FORT LAUDERDALE, Fla., July 16, 2014 /PRNewswire via COMTEX/ — The Singing Machine Company (“Singing Machine” or the “Company”) (OTCQB: SMDM) has entered into an agreement for senior secured financing with PNC Bank, N.A. (“PNC”). Under the agreement (“PNC Facility”), PNC will provide the Company with up to $15 million dollars in asset-based lending during the Company’s peak shipping season and reduce to $7.5 million from January 1 to July 31.
The PNC Facility is for three years and provides for borrowing against eligible accounts receivable and inventory, with sub limits on inventory up to $4,000,000 and for letters of credit up to $3,000,000. It provides Singing Machine with immediate cash availability on its eligible assets and is expected to provide the Company with expanded access to working capital to operate and grow its business.
“Our anticipated sales growth for fiscal year-end March 2015 and beyond required that Singing Machine seek a substantially larger credit facility than in previous years. This PNC Facility replaces a previous $5 million receivables-based borrowing facility with another bank and aligns Singing Machine with a financial partner that is well positioned to grow with us for the long-term. In addition to credit size, the PNC Facility provides a number of advantages over our previous banking facility — it allows us to borrow against our eligible inventory, provides for letters of credit, and the cost of borrowing is reduced,” commented Lionel Marquis, CFO. “This new credit facility is a necessary ingredient to implementing Singing Machine’s growth plans. It reduces our dependence on extended vendor financing and aligns us with a world-class financial partner.”
PNC Bank, N.A. is a member of The PNC Financial Services Group, Inc. (www.pnc.com) is one of the United States’ largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management.
About The Singing Machine
Based in the US, Singing Machine is the North American leader in consumer karaoke products. We offer the widest line of at-home karaoke entertainment products, which allow consumers to find a machine that suits their needs and skill level. As the most recognized brand in karaoke, Singing Machine has a long history of offering quality products with the latest technology. We continue to redefine the home entertainment space. The Singing Machine sells its products through major retailers in North America and offers the industry’s best warranty program. For more information on Singing Machine, visitwww.singingmachine.com.
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 31, 2014. 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.