Milwaukee-based Koss Corp. saw some improvement in its U.S., Internet and direct-to-consumer businesses, but challenges in Europe and Asia hurt the company’s overall sales.
Koss also saw costs of goods sold increase as a percentage of sales along with higher interest costs. Those factors offset slightly lower selling, general and administrative costs and a $14,000 recovery related to Sue Sachdeva’s embezzlement.
The result for the quarter was net income of $17,500, down from $84,211 last year. There were no per share earnings during the quarter, compared to 1 cent last year.
Koss also reported $6.1 million in revenue for the first quarter, a 4.4 percent decline from the same period last year. Michael Koss, Koss chairman and chief executive officer, said the company saw a 33 percent increase in U.S. mass market sales, despite at least 19 major retail bankruptcies in the U.S.
“Unfortunately sales to one OEM customer in Asia accounted for 64 percent of the decline in total Koss revenue for the quarter in comparison to the ramp up in new business shipments to the same customer one year ago.” Koss continued, “The shortfall is related to a previously disclosed pricing adjustment and margin erosion related to the new product’s life-cycle as well as a decrease in its total unit sales.”
Koss also said sales were down overall in Europe but one major distributor was beginning to overcome challenges of a stronger dollar.