The Singing Machine Company Announces 25% Increase in Revenue and Doubles its Operating Income in 3rd Quarter

Business Wire, Feb 15, 2008

COCONUT CREEK, Fla. -- The Singing Machine Company ("Singing Machine" or the "Company") (AMEX:SMD) today announced financial results for the third-quarter ended December 31, 2007. Singing Machine reported $13.7M in revenue this quarter, an increase of approximately $2.7M (25%) over the same period last year. The Company also reported the income from operations of $820,879, an increase of 109% compared to same period last year.

Third Quarter Highlights

For the quarter ended December 31, 2007, net sales increased from approximately $11.0M to $13.8M. This increase in sales can be primarily attributed to sales of the Company's "Bratz" line of products and musical instrument sales. At the same time, the Company was successful in its goal to lower general and administrative expenses by $186,271 (14%) while keeping its selling expenses consistent with the increase in revenue.

Additionally, the income from operations increased from $391,929 to $820,879, an increase of $428,950. This achievement is attributed to an increase in sales and a corresponding decrease in operating expenses.

Furthermore, the equity increased from approximately $2.9M at March 31, 2007 to $4.8M at December 31, 2007, an increase of approximately $1.9M. This increase is attributed to raising additional capital of approximately $1M and an improved profit of approximately $0.9M from operations.

"The numbers look good," remarked Tony Handal, C.E.O. "Our team is to be congratulated for achieving top-line growth while holding the line on net margin. Compared to the same time last year, we have seen a marked improvement in revenue, profits and equity, while successfully cutting costs. Our newly solidified management team has been instrumental in executing a number of operational improvements which I believe are reflected on our 3rd quarter results. Together with our current sales team, world-wide operations, distribution channel, and financing relationships the Company is well-positioned to carry this momentum into the next year."

About The Singing Machine

Incorporated in 1982, The Singing Machine Company develops and distributes a full line of consumer-oriented karaoke machines and music under The Singing Machine(TM), Bratz, SoundX and other brand names. The first to provide karaoke systems for home entertainment in the United States, The Singing Machine sells its products in North America, Europe and Australia.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management and include, but are not limited to statements about our financial statements for the fiscal year ended March 30, 2006. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including the risks that our vendors in China may not ship our products on the scheduled basis and that we will have sufficient cash flow to finance our working capital needs in the remaining periods of this fiscal year. In addition, you should review our risk factors in our SEC filings which are incorporated herein by reference. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

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