Koss Sales Decline on Weak European Demand

Koss Sales Decline on Weak European Demand 
MILWAUKEE, WI -- (Marketwire) -- 01/29/13 --  Koss Corporation
(NASDAQ: KOSS), the U.S. based high-fidelity headphone company, has
announced results for its second quarter ending December 31, 2012.  
Sales for the second quarter were $8,642,031 compared to $9,990,771
for the same period one year ago, a 13.5% decrease. Net income fell
by 59.3% to $338,688, compared to $831,212 for the second quarter
last year. Diluted earnings per share for the quarter were $0.05
compared with $0.11 in the same period one year ago. 
Sales for the six months ended December 31, 2012 were $17,556,893
compared to $18,745,556 for the same period one year ago, a 6.3%
decrease. Net income fell by 36.6% to $704,841, compared to
$1,111,809 for the same period one year ago. Diluted earnings per
share for the six months were $0.10 compared with $0.15 in the same
period one year ago. 
"European distributors have experienced declining demand from their
customer base which translates into lower sales for Koss. Sales to
U.S. domestic retailers held up with new customers helping to offset
declines in revenue," Michael J. Koss, President and CEO, told
employees here today. "The European economy continues to be soft. In
addition, certain export orders were disrupted and not shipped at the
end of December due to the threatened dockworker strike on the
Eastern Seaboard." 
Koss added that over the last several years, the Company invested in
software development tied to its Striva product line. Those costs are
now being amortized, which has increased costs and lowered earnings.
The Company is expecting to launch several new products, based on
this technology, in the next 6-12 months. 
The Company will pay a dividend of $0.06 cents per share on April 15,
2013, to shareholders of record on March 29, 2013.  
Koss Corporation markets a complete line of high-fidelity headphones,
speaker-phones, 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 "may," "will," "should,"
"forecasts," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue" or the negative
of such terms and other comparable terminology. These statements are
only predictions. 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. 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 STATEMENTS OF INCOME                       
                                (Unaudited)                                 
                                                                            
                             Three Months Ended        Six Months Ended     
                                 December 31              December 31       
                           ----------------------  ------------------------ 
                              2012        2011         2012         2011    
                           ----------  ----------  -----------  ----------- 
Net sales                  $8,642,031  $9,990,771  $17,556,893  $18,745,556 
Cost of goods sold          5,884,424   6,191,266   11,548,115   11,617,809 
                           ----------  ----------  -----------  ----------- 
Gross profit                2,757,607   3,799,505    6,008,778    7,127,747 
                           ----------  ----------  -----------  ----------- 
Operating Expenses:                                                         
  Selling, general and                                                      
   administrative expenses  3,003,488   2,924,733    6,022,239    5,809,919 
  Unauthorized transaction                                                  
   related recoveries, net   (812,344)   (469,519)  (1,195,071)    (519,933)
                           ----------  ----------  -----------  ----------- 
    Total Operating                                                         
     Expenses               2,191,144   2,455,214    4,827,168    5,289,986 
                           ----------  ----------  -----------  ----------- 
    Income from operations    566,463   1,344,291    1,181,610    1,837,761 
Other Income (Expense):                                                     
  Interest income                  --          --           10           -- 
  Interest expense            (27,206)    (24,012)     (56,515)     (64,538)
                           ----------  ----------  -----------  ----------- 
    Total Other Income                                                      
     (Expense), net           (27,206)    (24,012)     (56,505)     (64,538)
                           ----------  ----------  -----------  ----------- 
Income before income tax                                                    
 provision                    539,257   1,320,279    1,125,105    1,773,223 
Income tax provision          200,569     489,067      420,264      661,414 
                           ----------  ----------  -----------  ----------- 
      Net income           $  338,688  $  831,212  $   704,841  $ 1,111,809 
                           ==========  ==========  ===========  =========== 
Income per common share:                                                    
      Basic                $     0.05  $     0.11  $      0.10  $      0.15 
      Diluted              $     0.05  $     0.11  $      0.10  $      0.15 
                           ==========  ==========  ===========  =========== 
Dividends declared per                                                      
 common share              $     0.06  $     0.06  $      0.12  $      0.12 
                           ==========  ==========  ===========  =========== 

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