Koss Corporation Reports 5.9% Net Sales Increase and Improved Profitability for Quarter Ended December 31, 2024

Koss Corporation reported a net sales increase of 5.9% for the three months ended December 31, 2024, reaching $3.56 million compared to $3.36 million in the same period last year. For the six months, sales were slightly up at $6.76 million, compared to $6.73 million in the prior year. The company achieved a gross profit of $1.40 million for the quarter, representing a gross margin of 39.5%, a significant improvement from 33.0% in the previous year. This increase in profitability was attributed to a favorable customer mix, including higher-margin direct-to-consumer sales and successful new product launches in Europe.

The company experienced notable changes in its operational performance, particularly in export sales, which surged by 90% year-over-year to $1.38 million for the three months ended December 31, 2024. This growth was primarily driven by increased orders from two major European distributors. However, domestic sales declined by 18.2% during the same period, largely due to reduced orders from the education sector and domestic distributors. The overall sales performance reflects a mixed landscape, with strong international demand offsetting domestic challenges.

Koss Corporation's selling, general, and administrative expenses decreased slightly to $1.55 million for the three months ended December 31, 2024, down from $1.58 million in the prior year. The company noted that while legal expenses related to ongoing patent litigation increased, this was offset by a reduction in stock-based compensation expenses. The net loss for the quarter was $141,784, a significant improvement from a loss of $476,083 in the same quarter of the previous year. The company reported a net income of $94,142 for the three months ended December 31, 2024, compared to a net loss of $269,153 in the prior year.

In terms of strategic developments, Koss Corporation has been actively enforcing its intellectual property rights, particularly regarding its wireless headphone technology. The company has filed patent infringement lawsuits against several competitors, which could potentially lead to monetary awards or licensing agreements. Additionally, the company has maintained a strong liquidity position, with $2.54 million in cash and cash equivalents and $7.2 million in short-term investments as of December 31, 2024.

Looking ahead, Koss Corporation anticipates continued challenges due to macroeconomic factors such as inflation, supply chain disruptions, and geopolitical tensions. The company remains focused on evaluating its product offerings and managing costs effectively to navigate these uncertainties. Despite the challenges, Koss believes its financial position is strong enough to meet its working capital and capital expenditure requirements in the near term.