Koss Corporation — First Quarter 2027 Earnings Summary

Financial Performance:

• Net sales for the quarter ended September 30, 2026, were $3,094,078, a 24.0% decline from $4,070,778 in the same period of the prior year.
• The Company reported a net loss of $234,168 for the quarter, compared to a net income of $243,729 in the prior year period.
• Basic and diluted net loss per common share was $0.02 for the quarter, compared to basic and diluted net income per common share of $0.03 in the prior year.
• Gross profit decreased to $1,221,835 from $1,628,692 in the prior year.
• Gross margin declined 50 basis points to 39.5% from 40.0% in the prior year.
• Selling, general, and administrative expenses were $1,622,430, down from $1,674,732 in the prior year.
• Loss from operations was $400,595, compared to a loss of $46,040 in the prior year.
• Total other income, net, was $168,661, down from $292,529 in the prior year, driven by interest income of $169,070 versus $293,128 previously.
• Income tax provision was $2,234, compared to $2,760 in the prior year.

Business Segments and Product Lines:

• Direct-to-consumer (DTC) sales continue to grow and now represent approximately 37% of total turnover.
• Sales to certain domestic distributors were strong compared to the prior-year period.
• European distributor sales were on par with the prior year, supported by inventory replenishment orders.
• A significant custom order for an Education customer's new product launch that shipped in the first quarter of the prior year did not recur in the current period.
• The Company recognized a final tariff refund of $76,000 for previously paid import duties on product from China.
• Fixed manufacturing overhead absorption on a lower sales base negatively impacted gross margins.
• Higher freight rates due to general rate increases and peak season surcharges negatively impacted gross margins.

Management Commentary and Tone:

• Michael J. Koss, Chairman and CEO, noted that while sales to domestic distributors were strong, the non-recurring custom order significantly impacted year-over-year comparisons.
• Management expressed encouragement regarding the strength of the domestic distributor business and the growing contribution of DTC sales.
• Management stated these positive trends position the Company to build momentum as the fiscal year progresses.

Other Key Points:

• The press release includes a standard "Forward-Looking Statements" disclaimer citing risks such as economic fluctuations, product development, consumer acceptance, competition, trade policies, geopolitical conflicts, and supply chain disruptions.
• The Company markets high-fidelity headphones, wireless Bluetooth speakers, computer headsets, telecommunications headsets, active noise canceling headphones, and wireless headphones.
• The financial results are for the first quarter ended September 30, 2026 (Fiscal Year 2027).