Core Insights - Koss Corporation's shares increased by 14.7% following the earnings report for the quarter ended March 31, 2025, outperforming the S&P 500's 4.5% growth during the same period [1] - The company reported net sales of $2.8 million, a 5.4% increase from $2.6 million in the same quarter last year, despite incurring a net loss of $0.3 million, slightly wider than the previous year's loss [1][2] Financial Performance - Gross profit rose to $1.1 million from $0.8 million year-over-year, with gross margin improving by over 600 basis points due to lower shipping costs [2][8] - Operating expenses increased to $1.6 million from $1.5 million, leading to a narrowed operating loss of $0.5 million compared to $0.6 million in the prior year [3] - Interest income contributed positively, reducing the pre-tax loss to $0.3 million from $0.4 million [3] Management Commentary - The CEO highlighted geographic expansion and new product sales as key growth drivers, particularly in Europe and Asia [4] - Direct-to-consumer sales also supported revenue growth [4] Market Dynamics - Sales to the education sector fell nearly 60% due to a postponed project, impacting overall performance [5] - The decline in domestic distributor sales also weighed on results [5][7] - The rebound in international distributor sales, especially in Europe and Asia, was a significant growth factor [7] Margin Analysis - Margin expansion was attributed to lower inbound freight and transit costs, although some gains were offset by write-offs related to obsolete inventory [6][8]

Financial Performance - For the three months ended March 31, 2025, Koss Corporation reported net sales of $2,781,006, an increase of 5.4% compared to $2,637,606 for the same period in 2024[10]. - Gross profit for the three months ended March 31, 2025, was $1,084,672, representing a gross margin of 39.0%, up from $841,523 and a gross margin of 31.9% in the prior year[10]. - The net loss for the nine months ended March 31, 2025, was $642,135, a decrease from a net loss of $840,542 for the same period in 2024[12]. - The company reported a loss from operations of $519,006 for the three months ended March 31, 2025, an improvement from a loss of $609,724 in the same period of 2024[10]. - The Company recorded a net loss of $316,742 for the three months ended March 31, 2025, compared to a net loss of $313,780 for the same period in 2024[35]. - Loss before income tax provision for the three months ended March 31, 2025, was $(310,831), or (11.2)% of net sales, an improvement from (15.0)% in the prior year[50]. Assets and Liabilities - Total current assets decreased to $19,636,400 as of March 31, 2025, down from $21,917,161 as of June 30, 2024, primarily due to a reduction in short-term investments[9]. - Total liabilities rose to $6,614,743 as of March 31, 2025, compared to $6,052,303 as of June 30, 2024, reflecting an increase in current liabilities[9]. - Stockholders' equity decreased to $30,683,175 as of March 31, 2025, down from $31,147,176 as of June 30, 2024, primarily due to the net loss incurred[9]. - The total net inventories as of March 31, 2025 were $4,396,383, a decrease from $4,473,680 as of June 30, 2024[31]. - The amortized cost basis of held-to-maturity U.S. Treasury securities was $17,111,885 as of March 31, 2025, with a fair value of $17,175,268[29]. - The Company’s deferred compensation liability increased to $2,241,804 as of March 31, 2025, up from $2,093,124 as of June 30, 2024[28]. Cash Flow - Cash and cash equivalents increased to $2,934,892 at the end of the period, compared to $2,837,081 at the beginning of the period[12]. - The company experienced a net cash provided by operating activities of $319,989 for the nine months ended March 31, 2025, compared to a net cash used of $16,558 in the prior year[12]. - Cash provided by operating activities for the nine months ended March 31, 2025, was $319,989, compared to cash used of $16,558 in the same period in 2024[76]. - The Company experienced a net increase in cash and cash equivalents of $97,811 for the nine months ended March 31, 2025, compared to a decrease of $178,383 in the same period in 2024[76]. - Cash used in investing activities for the nine months ended March 31, 2025, was $374,623, primarily for fixed asset expenditures[78]. Taxation - The effective tax rate for the three months ended March 31, 2025 was 1.9%, significantly lower than 20.5% for the same period in 2024[26]. - The effective tax rate for the three and nine months ended March 31, 2025, was 1.9% and 1.8%, respectively, a significant decrease from 20.5% and 8.4% for the same periods in 2024[60]. - The Company has a tax loss carryforward of approximately $33,600,000 as of March 31, 2025, due to cumulative taxable losses over the last three years[27]. - The remaining expected federal tax loss carryforward approximates $33.6 million at the end of the third quarter[61]. Expenses - Selling, general and administrative expenses for the three months ended March 31, 2025, were $1,603,678, accounting for 57.7% of net sales, up from 55.0% in the prior year[50]. - Selling, general and administrative expenses for the three months ended March 31, 2025, increased by $152,000, or 10.5%, to $1,604,000 compared to the same period in the prior year[58]. - For the nine months ended March 31, 2025, selling, general and administrative expenses rose by $388,000, or 8.5%, to $4,960,000 compared to $4,572,000 for the same period in 2024[58]. Sales and Market Performance - Export sales for the nine months ended March 31, 2025, were $3,022,000, a 47.7% increase compared to $2,045,000 for the same period in 2024[53]. - Sales to European distributors increased by 41% over the prior year, driven by new product sales and inventory restocking[53]. - The gross margin for the nine months ended March 31, 2025, was 38.4%, an increase of 620 basis points from 32.2% in the prior year[55]. Legal and Compliance - The Company is involved in ongoing patent infringement lawsuits against PEAG, LLC and Skullcandy, Inc. related to its wireless headphone technology[93]. - A Supplemental Notice of Infringement was served on the Company by One-E-Way, Inc. on March 18, 2025, regarding potential patent infringements[94]. - The company expects to incur approximately $41,000 in costs related to a patent infringement matter, which has been accrued as of March 31, 2025[41]. Management and Governance - The Company's management concluded that the disclosure controls and procedures were effective as of March 31, 2025[90]. - There have been no changes in the Company's internal control over financial reporting that materially affected its effectiveness during the most recent fiscal quarter[91]. Credit Facilities - The Company has a secured credit facility of $5 million with no outstanding borrowings as of March 31, 2025[82]. - The Company’s credit facility remains unused as of March 31, 2025, with a total revolving secured credit facility of $5,000,000[32]. Stock and Shareholder Information - Koss Corporation's weighted-average number of shares for basic loss per share was 9,375,795 for the three months ended March 31, 2025, compared to 9,254,795 for the same period in 2024[10]. - The Company has a stock repurchase program with a maximum authorization of $45.5 million, of which $43.36 million had been expended through March 31, 2025[98].

Financial Performance - Net sales for Q3 2025 were $2,781,006, an increase of $143,400 or 5.4% compared to Q3 2024[2] - For the nine months ended March 31, 2025, net sales were $9,539,960, reflecting an increase of $168,292 or 1.8% over the same period in the prior year[3] - The net loss for Q3 2025 was $316,742, slightly higher than the net loss of $313,780 in Q3 2024[2] - The net loss for the nine months ended March 31, 2025, improved to $642,135 from $840,542 in the prior year[3] - Basic and diluted net loss per share for Q3 2025 was $0.03, consistent with Q3 2024[2] - Basic and diluted net loss per share for the nine months ended March 31, 2025, was $0.07, compared to $0.09 for the same period in 2024[3] - The company reported a gross profit of $1,084,672 for Q3 2025, up from $841,523 in Q3 2024[9] Sales and Market Impact - Direct-to-consumer sales contributed to growth, but a nearly 60% drop in sales to education markets offset some gains[4] Cost and Margin Analysis - Margin improvement of over 600 basis points was noted during the first nine months of fiscal year 2025 compared to the same period last year[4] - The company is closely monitoring the impact of recent tariff announcements on product costs, particularly due to sourcing from China[4]

Core Viewpoint - Koss Corporation reported a slight increase in net sales for the third quarter of fiscal year 2025, but continued to experience net losses, highlighting challenges in certain market segments and the impact of external factors such as tariffs on product costs [2][4]. Financial Performance - Net sales for the three months ended March 31, 2025, were $2,781,006, an increase of $143,400, or 5.4%, compared to $2,637,606 for the same period in the prior year [2]. - For the nine months ended March 31, 2025, net sales reached $9,539,960, reflecting an increase of $168,292, or 1.8%, over the prior year's $9,371,668 [3]. - The net loss for the third quarter of fiscal year 2025 was $316,742, slightly higher than the net loss of $313,780 for the same quarter in the previous year [2]. - The net loss for the nine months ended March 31, 2025, was $642,135, showing improvement compared to a net loss of $840,542 for the same period in the prior year [3]. Sales and Market Dynamics - A significant increase in sales to distributors in Europe and Asia, driven by new product success, was a key factor in the overall sales improvement for the fiscal year-to-date [4]. - Direct-to-consumer (DTC) sales contributed to sales growth, but a nearly 60% drop in sales to the education markets due to project postponements and lower domestic distributor sales offset some of the gains [4]. Margin and Cost Analysis - Margin improvement of over 600 basis points during the first nine months of fiscal year 2025 was attributed to the adverse impact on prior year's margins from higher transit costs [4]. - The write-off of obsolete products during the current year partially offset margin gains [4]. Strategic Considerations - The company is closely monitoring recent tariff announcements that could significantly impact product costs, particularly since a substantial portion of its products are sourced from China [4]. - A strategic response is being developed to mitigate potential adverse effects on operations and financial condition [4].

Core Insights - Koss Corporation's shares have declined 1.6% since the earnings report for the quarter ended December 31, 2024, compared to a 0.5% decline in the S&P 500 index during the same period [1] - Over the past month, Koss's stock has decreased by 21.5%, while the S&P 500 has grown by 0.6% [1] Financial Performance - For the fiscal second quarter, Koss reported earnings per share (EPS) of 1 cent, a significant improvement from a loss of 3 cents per share in the prior-year quarter [2] - The company achieved net sales of $3.6 million, marking a 5.9% increase from $3.4 million in the same quarter last year [2] - Koss recorded a net income of $0.1 million, recovering from a net loss of $0.3 million reported in the same period last year [2] Key Business Metrics - Koss's gross profit for the fiscal second quarter reached $1.4 million, up from $1.1 million in the same period last year, driven by higher sales volumes and an improved product mix [3] - The gross margin expanded to 39.5%, an increase from 33% a year ago, benefiting from increased direct-to-consumer (DTC) sales and stronger European distribution [3] Operating Expenses - Selling, general, and administrative (SG&A) expenses for the second quarter slightly declined to $1.55 million from $1.58 million in the prior-year period [4] - The operating loss narrowed to $0.1 million from $0.5 million in the same quarter last year [4] Management Commentary - Chairman and CEO Michael J. Koss emphasized that sales to the company's two largest export distributors were crucial for revenue growth, with European market sales more than doubling year-over-year due to strong demand for new products [5] - Higher-margin DTC sales and a substantial custom order from a new U.S. customer contributed to improved financial performance, although these gains were partially offset by lower sales to the education sector, e-tailers, and domestic distributors [5] Supply Chain Considerations - Koss noted a slight increase in freight costs, with further increases anticipated, and the company is closely monitoring potential supply chain disruptions and tariff changes that could impact operations [6]

Financial Performance - Net sales for the three months ended December 31, 2024, were $3,557,086, representing a 5.9% increase from $3,360,124 in the same period of 2023[50]. - Gross profit for the three months ended December 31, 2024, was $1,404,957, with a gross profit margin of 39.5%, up from 33.0% in the prior year[50][55]. - Selling, general and administrative expenses for the three months ended December 31, 2024, decreased slightly to $1,546,741, or 43.5% of net sales, compared to 47.2% in the same period of 2023[50][57]. - Export sales for the three months ended December 31, 2024, were $1,376,000, a 90% increase compared to $693,000 in the prior year, driven by new product sales to European distributors[53]. - Domestic market sales declined by $486,000, or 18.2%, year over year for the three-month period ended December 31, 2024[54]. - The effective tax rate for the three months ended December 31, 2024, was 2.8%, compared to less than 1% in the same period of 2023[59]. Cash Flow and Investments - The company had $2.5 million in cash and cash equivalents and $7.2 million in short-term investments as of December 31, 2024[62]. - The Company experienced a net operating loss for the first half of fiscal year 2024, resulting in cash used in operating activities of $(50,419) compared to $(345,185) in the same period of fiscal year 2023[75]. - Cash used in investing activities for the six months ended December 31, 2024, was $(403,380), primarily for fixed asset expenditures, including approximately $346,000 for roof replacement[77]. - The Company had a net decrease in cash and cash equivalents of $(301,354) for the six months ended December 31, 2024, compared to $(566,808) in the prior year[75]. - The Company believes its existing cash and cash equivalents, along with cash provided by operating activities, will be sufficient to meet anticipated working capital and capital expenditure requirements over the next twelve months[80]. - The Company had no outstanding borrowings on its bank line of credit facility as of December 31, 2024[79]. Operational Challenges - The company expects shipment costs to increase in the coming quarters due to general rate increases and supply chain delays[56]. - The Company anticipates that economic uncertainties, including inflation and consumer confidence, will continue to impact its business performance[64]. - The Company continues to monitor supply chain disruptions and trade tensions, particularly with China, which may affect future shipments and costs[68]. - Cyberattacks are identified as a significant risk, potentially impacting the Company's operations and financial condition due to the reliance on information systems[72]. Strategic Decisions - The Company maintains a program focused on enforcing its intellectual property, particularly its wireless headphone technology patents[61]. - The lease for the Company's 126,000 square foot facility was renewed for five years at a fixed rate of $380,000 per year, with an option to renew for an additional five years starting July 1, 2028[83]. - The Company suspended sales to Russia following sanctions imposed due to the invasion of Ukraine, with no sales recorded during the three and six months ended December 31, 2024, and 2023[71]. - The Company issued 76,000 shares of common stock from employee stock option exercises during the six months ended December 31, 2024, compared to 20,000 shares in the same period of 2023[78].

Financial Performance - Net sales for Q2 2025 were $3,557,086, an increase of $196,962 or 5.9% compared to $3,360,124 in Q2 2024[2] - Net income for Q2 2025 was $94,142, a significant improvement from a net loss of $269,153 in Q2 2024, resulting in a basic and diluted net income per share of $0.01 compared to a loss of $0.03[2] - For the six months ended December 31, 2024, net sales were $6,758,954, up slightly by $24,892 or 0.4% from $6,734,062 in the prior year[3] - The company experienced a net loss of $325,393 for the six months ended December 31, 2024, an improvement from a net loss of $526,762 in the same period of the prior year[3] Gross Margin and Sales Growth - The gross margin increased to 38.1% for the first half of the fiscal year, compared to 32.3% for the same period in the prior year, driven by higher direct-to-consumer sales and new product sales[4] - Sales to the European market exceeded prior year sales by over 100%, contributing significantly to the overall sales growth[4] Expenses and Income - Selling, general and administrative expenses for the first half of the fiscal year were $3,356,800, compared to $3,120,802 in the prior year[9] - Interest income for the six months ended December 31, 2024, was $459,044, compared to $421,668 in the prior year[9] - The weighted-average number of basic shares for the six months ended December 31, 2024, was 9,332,844, slightly up from 9,238,002 in the prior year[9] Supply Chain and Costs - The company anticipates further increases in freight costs and is monitoring the supply chain and potential tariffs closely[4]

Core Insights - Koss Corporation reported a net sales increase of 5.9% for the second quarter ended December 31, 2024, reaching $3,557,086 compared to $3,360,124 in the same period last year [2] - The company achieved a net income of $94,142 for the second quarter, a significant turnaround from a net loss of $269,153 in the prior year [2] - For the six months ended December 31, 2024, net sales were $6,758,954, a slight increase of 0.4% from $6,734,062 in the same period last year, while the net loss improved to $325,393 from $526,762 [3] Financial Performance - Gross margins increased to 38.1% for the first half of the current fiscal year, up from 32.3% in the prior year, driven by higher direct-to-consumer sales and new product sales to Europe [4] - Selling, general and administrative expenses for the second quarter were $1,546,741, slightly down from $1,584,523 in the previous year [7] - The company reported a loss from operations of $141,784 for the second quarter, an improvement from a loss of $476,083 in the same period last year [7] Sales and Market Dynamics - Sales to the two largest export distributors significantly contributed to the sales increase, with new product sales exceeding expectations and surpassing prior year sales to the European market by over 100% [4] - Increased direct-to-consumer sales and a significant custom order from a new domestic customer also contributed to growth, although these gains were partially offset by lower sales to the education market and U.S. domestic distributors [4] - The company experienced slight increases in freight costs and anticipates further rises, indicating a need to monitor supply chain dynamics closely [4]

Core Insights - Koss Corporation reported a loss per share of 5 cents for Q1 fiscal 2025, widening from a 3 cents loss in the same quarter last year [1] - Net sales decreased by 5.1% year-over-year to $3.2 million, down from $3.4 million in Q1 fiscal 2024 [1][3] Sales Performance - The decline in sales was primarily attributed to lower demand from U.S. distributors and reduced orders from the Education and Music segments [2][3] - Despite the overall decline, Koss experienced notable growth in European markets and direct-to-consumer (DTC) channels, indicating strategic resilience [2][4] International and DTC Growth - International sales saw a significant increase, particularly from Koss' two largest European distributors, which grew by over 30% [4] - Direct-to-consumer sales, especially on Amazon, achieved record-setting sales days, driven by the successful launch of the Porta Pro Wireless 2.0 [4] Cost and Profitability - The cost of goods sold decreased to $2 million from $2.3 million in the previous year, contributing to an improved gross margin [5] - Gross profit increased to $1.2 million, up from $1.1 million, with gross margin climbing from 31.6% to 36.6% due to a favorable product mix [6] Expenses and Losses - Selling, general and administrative (SG&A) expenses rose by 17.8% to $1.8 million, reflecting increased spending on product launches and DTC enhancements [7] - The net loss for the quarter was $0.4 million, wider than the $0.3 million loss in Q1 fiscal 2024, driven by mixed sales performance and higher SG&A costs [9]

Financial Performance - Net sales for the three months ended September 30, 2024, were $3,201,868, a decrease of $172,070 or 5.1% from $3,373,938 in the same period last year[46] - Gross profit for the same period was $1,172,926, representing 36.6% of net sales, an improvement of 500 basis points from 31.6% in the prior year[49] - Selling, general and administrative expenses increased by $273,780 or 17.8% from $1,536,279 to $1,810,059, primarily due to increased deferred compensation liability[51] - Domestic net sales decreased by $435,794 or 16.7% to $2,167,364, driven by a non-recurring custom order and a shortfall in U.S. distributor sales[47] - Sales to export markets increased significantly, with an 86% rise in sales to European distributors and a 100% increase to a Georgian distributor compared to the prior year[48] Cash Flow and Investments - Cash provided by operating activities for the three months ended September 30, 2024, was $201,554, compared to cash used of $(713,247) in the same period of 2023[67] - Cash used by investing activities was $(392,773) in Q1 FY 2024, slightly down from $(393,536) in Q1 FY 2023[67] - Cash from financing activities amounted to $104,870 in Q1 FY 2024, with 51,000 shares of common stock issued from stock option exercises[67] - The net decrease in cash and cash equivalents for the three months ended September 30, 2024, was $(86,349), significantly improved from $(1,106,783) in the prior year[67] - The Company received $5,034,000 from the maturity of U.S. Treasury securities and reinvested $5,057,000 in similar securities at a $58,000 discount during Q1 FY 2024[69] - The Company has no outstanding borrowings on its bank line of credit facility as of September 30, 2024[71] - The Company believes its existing cash and cash equivalents will be sufficient to meet anticipated working capital and capital expenditure requirements over the next twelve months[72] Tax and Legal Matters - The remaining expected federal tax loss carryforward approximates $32,800,000 at the end of the first quarter of fiscal 2025[54] - The effective tax rate was less than 1% for both three-month periods ending September 30, 2024, and 2023, with minimal state income tax expense recorded[53] - The Company is currently involved in patent infringement lawsuits against Bose Corporation, PEAG, LLC, and Skullcandy, Inc. related to its wireless headphone technology[81] Macroeconomic Conditions - The company is monitoring ongoing macroeconomic and geopolitical conditions, including inflation and supply chain disruptions, which may impact future performance[57] - The Company suspended sales to Russia due to the humanitarian crisis in Ukraine, but received a sizable order from a Ukrainian distributor in Q1 FY 2024[64] Lease Obligations - The lease for the Company's facility is fixed at $380,000 per year, renewed for five years ending June 30, 2028, with an option to renew for an additional five years[74] Interest Income - Interest income recorded was $220,358, compared to $212,859 in the same period last year, mainly from U.S. Treasury investments[52]