Koss(US:KOSS)2025-05-08 22:11Financial 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].