Koss Corporation Releases Second Quarter Results
January 26 2023 - 5:15PM
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, 2022.
Sales for the second quarter ended December 31,
2022 were $3,271,931, a decline of 25.9% compared to $4,415,886 for
the same period in the prior year. The net loss for the three
months was $1,146,879 compared to net income of $578,969 for the
second quarter of the prior year. Basic and diluted loss per
common share for the quarter was $0.12 compared to basic and
diluted income per common share of $0.06 for the same three-month
period one year ago.
Sales for the six months ended December 31,
2022 decreased 24.5% from $8,780,953 in the same
period last year to $6,626,460 in the current fiscal
year. The six-month net
income was $8,797,864 compared to net
income of $479,610 for the same period last year.
Basic income per common share was $0.96 for the six months ended
December 31, 2022 and diluted income per common share was $0.90.
This compares to basic and diluted income per common share of
$0.05 for the same six-month period in the prior year.
“The decline in sales was partially driven by a
slowdown in sales to certain of our domestic distributors,” Michael
J. Koss, Chairman and CEO, said today. “The weaker demand appears
to be due to over-stocked shelves as a result of the bullwhip
effect triggered by the pandemic. In addition, sales to our
European distributors continue to be impacted by the ongoing
conflict between Russia and Ukraine, as well as high energy costs
and inflation reducing disposal income.”
“An unfavorable sales mix negatively impacted
gross margins for the first six months of the current fiscal year
versus the same period in the prior year,” Koss continued. “Lower
volumes of higher margin sales, coupled with fixed manufacturing
expenses that do not flex with sales volume and the sale of
inventory purchased at higher freight rates, contributed to the
lower gross margins. The Company continues to monitor the threat of
a rail strike and the potential manufacturing and supply chain
delays due to the surge of infection since the easing of zero COVID
restrictions in China as both situations could have negative
repercussions. Legal fees recorded during the second quarter were
the main contributor to the net loss for the quarter.”
About Koss Corporation
Koss Corporation markets a complete line of high-fidelity
headphones, wireless Bluetooth® speakers, computer headsets,
telecommunications headsets, active noise canceling headphones,
wireless headphones, and compact disc recordings of American
Symphony Orchestras on the Koss Classics® label.
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 the COVID-19 pandemic, 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
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
Three Months Ended |
|
Six Months Ended |
|
December 31 |
|
December 31 |
|
2022 |
|
|
2021 |
|
2022 |
|
|
2021 |
Net sales |
$ |
3,271,931 |
|
|
$ |
4,415,886 |
|
$ |
6,626,460 |
|
|
$ |
8,780,953 |
Cost of goods sold |
|
2,145,769 |
|
|
|
2,866,193 |
|
|
4,314,074 |
|
|
|
5,649,423 |
Gross profit |
|
1,126,162 |
|
|
|
1,549,693 |
|
|
2,312,386 |
|
|
|
3,131,530 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
2,473,975 |
|
|
|
1,229,294 |
|
|
26,144,571 |
|
|
|
3,010,091 |
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from operations |
|
(1,347,813 |
) |
|
|
320,399 |
|
|
(23,832,185 |
) |
|
|
121,439 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
— |
|
|
|
255,975 |
|
|
33,000,000 |
|
|
|
355,975 |
Interest income |
|
97,832 |
|
|
|
3,626 |
|
|
124,888 |
|
|
|
4,258 |
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income tax provision |
|
(1,249,981 |
) |
|
|
580,000 |
|
|
9,292,703 |
|
|
|
481,672 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision |
|
(103,102 |
) |
|
|
1,031 |
|
|
494,839 |
|
|
|
2,062 |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
$ |
(1,146,879 |
) |
|
$ |
578,969 |
|
$ |
8,797,864 |
|
|
$ |
479,610 |
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.12 |
) |
|
$ |
0.06 |
|
$ |
0.96 |
|
|
$ |
0.05 |
Diluted |
$ |
(0.12 |
) |
|
$ |
0.06 |
|
$ |
0.90 |
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of
shares: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
9,186,208 |
|
|
|
9,144,099 |
|
|
9,171,746 |
|
|
|
8,994,023 |
Diluted |
|
9,186,208 |
|
|
|
10,064,713 |
|
|
9,817,398 |
|
|
|
10,062,915 |
CONTACT: |
Michael J. Koss |
|
Chairman & CEO |
|
(414) 964-5000 |
|
mjkoss@koss.com |
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