Koss Corporation Releases First Quarter Results

Core Viewpoint - Koss Corporation reported a decline in net sales and an increase in net loss for the first quarter of fiscal year 2025 compared to the same period last year, despite some positive developments in product launches and direct-to-consumer sales [2][3]. Financial Performance - Net sales for the first quarter ended September 30, 2024, were $3,201,868, a decrease of $172,070 or 5.1% from $3,373,938 in the prior year [2][7]. - The net loss for the quarter was $419,535, compared to a net loss of $257,609 in the same quarter of the previous fiscal year [2][7]. - Basic and diluted loss per common share was $0.05, up from $0.03 in the comparable period one year ago [2][7]. Sales and Market Dynamics - Sales to domestic distributors decreased primarily due to timing of orders, with declines noted in the Education and Music customer segments [3]. - Sales to the two largest European distributors increased by over 30% following the launch of the Porta Pro Wireless 2.0 in September 2024 [3]. - Direct-to-consumer sales saw an increase, driven by record-setting daily sales on Amazon and the successful launch of the new product [3]. Cost and Margin Analysis - Gross margins improved to 36.6% from 31.6% year-over-year, attributed to higher margins on new product sales and increased volume of higher-margin direct-to-consumer sales [3]. - The company experienced a write-off of older, excess inventory, but this was partially offset by capitalizing freight costs into inventory for future product purchases [4]. Supply Chain Considerations - The company noted a slight increase in freight rates and extended lead times due to port congestion, with expectations for transit rate increases to continue into the next quarter [4]. - Koss Corporation is actively monitoring potential supply chain disruptions to ensure adequate inventory levels ahead of the holiday season [4].