Koss Corporation Reports Modest Sales Growth and Increased Gross Profit Margins Amid Ongoing Net Losses

Koss Corporation reported its financial results for the three and nine months ended March 31, 2025, showing a modest increase in net sales and improvements in gross profit margins compared to the same periods in the previous fiscal year. For the third quarter, net sales reached $2.78 million, a 5.4% increase from $2.64 million in the prior year. For the nine-month period, sales totaled $9.54 million, up 1.8% from $9.37 million. The gross profit for the third quarter was $1.08 million, representing a gross margin of 39.0%, a significant improvement from 31.9% in the same quarter last year. The nine-month gross profit also increased to $3.66 million, with a margin of 38.4%, up from 32.2% in the prior year.

Despite the increase in sales, Koss Corporation reported a net loss of $316,742 for the third quarter, slightly higher than the loss of $313,780 in the same period last year. For the nine months, the net loss was $642,135, compared to $840,542 in the previous year. The company attributed the losses to rising selling, general, and administrative expenses, which increased by 10.5% to $1.60 million in the third quarter, driven by costs associated with new product certification and compliance testing, as well as higher online advertising expenditures.

Operationally, Koss Corporation saw a notable increase in export sales, which rose by 5.1% to $612,000 in the third quarter and by 47.7% to $3.02 million for the nine months, largely due to increased demand from Asian and European distributors. However, domestic sales faced challenges, particularly in the education sector, which saw a 57% decline. The company also reported a slight increase in its customer base, with the weighted average number of shares outstanding rising to 9,375,795 from 9,254,795 a year earlier.

Looking ahead, Koss Corporation is navigating a challenging economic landscape marked by inflation, elevated shipping costs, and geopolitical tensions, particularly concerning tariffs on products manufactured in China. The company anticipates increased duty costs and is closely monitoring the evolving tariff situation. Despite these challenges, Koss maintains a strong liquidity position with $2.93 million in cash and cash equivalents and $10.1 million in short-term investments as of March 31, 2025. The company is optimistic about its ability to meet working capital and capital expenditure requirements in the coming year, although it acknowledges the potential for fluctuations in consumer demand and operational costs.