Koss Corp. Releases First Quarter Results

Rhea-AI Summary

Koss Corporation (NASDAQ: KOSS) reported its first quarter results for the period ending September 30, 2020. Net sales decreased by 3.7% to $5,208,295 from $5,410,762 year-over-year. However, the company achieved a net income of $126,928, recovering from a loss of $310,749 in the previous year. The earnings per share improved to $0.02, compared to a loss of $0.04 last year. CEO Michael J. Koss noted a decline in mass retailer sales but an increase in direct-to-consumer online sales and a rebound in export markets, particularly in Europe.

Positive

• Achieved net income of $126,928, compared to a loss of $310,749 last year.
• Improved earnings per share to $0.02 from a loss of $0.04.
• Gross margin increased to 31.4%, up from 24.9%.

Negative

• Sales decreased by 3.7% compared to the previous year.

MILWAUKEE, Oct. 29, 2020 (GLOBE NEWSWIRE) -- Koss Corporation (NASDAQ SYMBOL: KOSS), the U.S. based high-fidelity headphone company, has reported its first quarter results for the quarter ended September 30, 2020.

Sales for the first quarter were $5,208,295, which is a 3.7% decrease from sales of $5,410,762 for the same three month period one year ago. The three month net income was $126,928, compared to a net loss of $310,749 for the first quarter last year. Diluted and basic income per common share for the quarter was $0.02 compared to a loss per common share of $0.04 for the same three month period one year ago.

"The decline in net sales for the quarter was due to a decline in certain mass retailers in the U.S.," Michael J. Koss, Chairman and CEO, said today. "We experienced an increase in online direct-to-consumer sales driven by the continuation of people studying and working from home. Additionally, we saw a rebound in our export markets, especially in Europe, and in many of our U.S. based distributors."

"The sales mix was favorable to gross margin increasing it from 24.9% last year to 31.4% in the current quarter," Koss explained. "Early in this same quarter last year, there were significant promotional back-to-school sales to a domestic mass retail customer at very low margins.  This promotional activity accounted for the lower gross margin last year."

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.

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 "anticipates," "believes," "estimates," "expects," "intends," "plans," "may," "will," "should," "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, in particular, 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 INCOME (Unaudited)
	Three Months Ended
	September 30
	2020				2019
Net sales	$	5,208,295			$	5,410,762
Cost of goods sold		3,572,067				4,063,308
Gross profit		1,636,228				1,347,454
Selling, general and administrative expenses		1,505,772				1,664,600
Income (loss) from operations		130,456				(317,146	)
Interest (expense) income		(2,051	)			6,397
Income (loss) before income tax provision		128,405				(310,749	)
Income tax provision		1,477				—
Net income (loss)	$	126,928			$	(310,749	)
Income (loss) per common share:
Basic	$	0.02			$	(0.04	)
Diluted	$	0.02			$	(0.04	)
Weighted-average number of shares:
Basic		7,404,831				7,404,831
Diluted		7,408,685				7,404,831

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

FAQ

What were Koss Corporation's Q1 2020 sales figures?

Koss Corporation reported Q1 2020 sales of $5,208,295.

How did Koss Corporation's net income perform in Q1 2020?

Koss Corporation achieved a net income of $126,928 in Q1 2020.

What was the change in earnings per share for Koss Corporation in Q1 2020?

Earnings per share improved to $0.02 in Q1 2020 from a loss of $0.04 in the same period last year.

Why did Koss Corporation's sales decline in Q1 2020?

The decline in sales was attributed to reduced sales in certain mass retailers in the U.S.

Did Koss Corporation see any growth in online sales?

Yes, Koss Corporation experienced an increase in online direct-to-consumer sales.