The Singing Machine Company, Inc. (MICS) Q2 2024 Earnings Call Transcript

Financial and Performance Report

• Net sales for the three months ended June 30, 2024, decreased to approximately $2,440,000 million from approximately $2,625,000, representing a decrease of approximately $185,000 as compared to the three months ended June 30, 2023.
• Gross profit for the three months ended June 30, 2024 decreased to approximately $324,000 from approximately $529,000, representing a decrease of approximately $205,000, 38.8% as compared to the three months ended June 30, 2023.
• Gross margins for the three months ended June 30, 2024 were 13.3% as compared to 20.2% for the three months ended June 30, 2023.
• Total operating expenses increased to approximately $6,478,000 million compared to approximately $2,960,000 during the three months ended June 30, 2023.

Operational Highlights

• Bernardo Melo, Chief Revenue Officer, highlighted the upcoming holiday season plans, including a focus on WiFi enabled models and digital offerings.
• A brand-new WiFi model is being introduced at Sam's Club, partnered with Apple Music, Spotify, Pandora, Amazon Prime, and YouTube.
• The company is reducing the number of offerings in 2025 and focusing on launching mostly WiFi enabled models.

Product and Service Updates

• A Sesame Street Karaoke plus line has been launched, including characters Elmo, Abby, and Cookie Monster, with plans to expand in 2025.
• A TikTok shop with four concentrated items has been successfully launched, with increased marketing efforts towards TikTok and meta platforms for higher sales.

Future Outlook and Guidance

• The company is shifting towards integrated microphone devices for the automotive and connected TV markets for higher margins and growth opportunities.
• Singing Machine is expanding into the automotive market by introducing Karaoke microphones to integrate into in-car entertainment systems.
• Vivek Sehgal, SemiCab's Chief Product Officer, highlighted the company's focus on disrupting the global freight industry with AI technology.
• SemiCab attained 90% efficiency, reducing empty miles from one out of every three miles to one out of every 10 miles.
• Singing Machine sees SemiCab as an opportunity to create higher shareholder value and unlock growth potential for the company in the future.