Koss Corporation Reports Profitable Second Quarter Results

Rhea-AI Summary

Koss (NASDAQ: KOSS) reported improved financial results for Q2 FY2025. Net sales increased 5.9% to $3.56 million compared to $3.36 million in Q2 FY2024. The company turned profitable with net income of $94,142 versus a loss of $269,153 in the prior year period.

For the six-month period, sales slightly increased by 0.4% to $6.76 million, while net loss improved to $325,393 from $526,762. Gross margins improved to 38.1% from 32.3% year-over-year, driven by increased direct-to-consumer sales and new product sales in Europe, which exceeded expectations by over 100%. However, these gains were largely offset by lower sales in Education market, e-tailers and U.S. domestic distributors. The company noted slight increases in freight costs and anticipates further rises.

Positive

• Q2 revenue increased 5.9% YoY to $3.56 million
• Turned profitable with Q2 net income of $94,142 vs loss last year
• Gross margins improved significantly to 38.1% from 32.3%
• European market sales grew over 100% YoY
• Direct-to-consumer sales showed growth

Negative

• Six-month net loss of $325,393 despite improvement from prior year
• Declining sales in Education market, e-tailers and U.S. domestic distributors
• Rising freight costs with expectations of further increases
• Minimal six-month revenue growth of just 0.4%

MILWAUKEE, Jan. 30, 2025 (GLOBE NEWSWIRE) -- Koss Corporation (NASDAQ: KOSS) (the “Company”), the U.S. based high-fidelity headphone company, has reported its results for the second quarter ended December 31, 2024.

For the three months ended December 31, 2024, net sales were $3,557,086 compared to $3,360,124 for the same three-month period in the prior year, an increase of $196,962 or 5.9%. Net income for the second quarter ended December 31, 2024 was $94,142 compared to a net loss of $269,153 for the second quarter of the prior fiscal year. Basic and diluted net income per common share for the second quarter of fiscal year 2025 was $0.01 compared to basic and diluted net loss per common share of $0.03 for the same three-month period one year ago.

Net sales of $6,758,954 for the six months ended December 31, 2024 were up slightly by $24,892, or 0.4%, over the sales of $6,734,062 for the comparable period in the prior year. The net loss of $325,393 for the six months ended December 31, 2024 was $201,369, favorable to the net loss of $526,762 for the same period in the prior year. Basic and diluted net loss per common share was $0.03 for the six months ended December 31, 2024 compared to basic and diluted net loss of $0.06 for the six months ended December 31, 2023.

“Sales to our two largest Export distributors played a major role in the increase in sales for the first six months of the current fiscal year. This improvement was driven by new product sales that far exceeded our expectations, surpassing prior year sales to the European market by over 100%,” Michael J. Koss, Chairman and CEO, said today. “Greater direct-to-consumer (DTC) sales and a significant custom order from a new domestic customer also contributed to the growth compared to the same six-month period in the prior year. Unfortunately, most of these gains were offset by lower sales to the Education market, e-tailers and U.S. domestic distributors.”

Koss continued, stating that “Increased DTC sales and new product sales to Europe helped drive higher margins, along with favorable volumes of higher margin sales to our domestic distributors. Gross margins increased to 38.1% for the first half of our current fiscal year compared to 32.3% for the same period in the prior year. The prior year margins were also negatively impacted by the sell-through of inventory landed in at higher freight rates.”

Koss further noted, “During the first half of our fiscal year, we experienced slight increases in freight costs and anticipate further rises in the future. We will continue to monitor the supply chain and potential tariffs closely and take necessary actions to address any adverse changes.”

About Koss Corporation

Koss Corporation markets a complete line of high-fidelity headphones, wireless Bluetooth® speakers, computer headsets, telecommunications headsets, active noise canceling headphones, and wireless headphones.

Forward-Looking Statements

This press release contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “aims,” "anticipates," "believes," "estimates," "expects," "intends," "plans," “thinks,” "may," "will," “shall,” "should," “could,” “would,” "forecasts," "predicts," "potential," "continue," or the negative of such terms and other comparable terminology. These statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual events or results may differ materially. In evaluating forward-looking statements, you should specifically consider various factors that may cause actual results to vary from those contained in the forward-looking statements, such as general economic conditions, inflationary cost environment, supply chain disruption, the impacts of public health events, such as pandemics, geopolitical instability and war, consumer demand for the Company's and its customers' products, competitive and technological developments, foreign currency fluctuations, and costs of operations. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances or new information. In addition, such uncertainties and other operational matters are discussed further in the Company's quarterly and annual filings with the Securities and Exchange Commission.

KOSS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended								Six Months Ended
	December 31								December 31
	2024				2023				2024				2023
Net sales	$	3,557,086			$	3,360,124			$	6,758,954			$	6,734,062
Cost of goods sold		2,152,129				2,251,684				4,181,071				4,557,932
Gross profit		1,404,957				1,108,440				2,577,883				2,176,130
Selling, general and administrative expenses		1,546,741				1,584,523				3,356,800				3,120,802
Loss from operations		(141,784	)			(476,083	)			(778,917	)			(944,672	)
Interest income		238,686				208,809				459,044				421,668
Income (loss) before income tax provision		96,902				(267,274	)			(319,873	)			(523,004	)
Income tax provision		2,760				1,879				5,520				3,758
Net income (loss)	$	94,142			$	(269,153	)		$	(325,393	)		$	(526,762	)
Income (loss) per common share:
Basic	$	0.01			$	(0.03	)		$	(0.03	)		$	(0.06	)
Diluted	$	0.01			$	(0.03	)		$	(0.03	)		$	(0.06	)
Weighted-average number of shares:
Basic		9,355,686				9,241,208				9,332,844				9,238,002
Diluted		9,629,535				9,241,208				9,332,844				9,238,002

CONTACT:	Michael J. Koss
	Chairman & CEO
	(414) 964-5000
	mjkoss@koss.com

FAQ

What was Koss 's (KOSS) Q2 2025 revenue growth?

Koss reported Q2 2025 revenue growth of 5.9%, with net sales increasing to $3.56 million from $3.36 million in Q2 2024.

How much profit did KOSS make in Q2 2025?

KOSS reported a net income of $94,142 in Q2 2025, compared to a net loss of $269,153 in Q2 2024.

What was KOSS's gross margin improvement in the first half of FY2025?

KOSS's gross margins improved to 38.1% in the first half of FY2025, up from 32.3% in the same period of the previous year.

How did KOSS perform in the European market in FY2025?

KOSS's sales in the European market exceeded expectations, growing by over 100% compared to the previous year.

What challenges is KOSS facing in its domestic market?

KOSS is experiencing declining sales in the Education market, e-tailers, and U.S. domestic distributors, along with rising freight costs.