Milwaukee-based Koss Corp. today reported fiscal third quarter net income fell to $115,441, or 2 cents per share, from $896,715, or 12 cents per share, in the same period a year ago.
Sales for the third quarter were $8.3 million, up slightly from $8.2 million a year earlier.
“Overall we are pleased with the results this quarter, however when compared to the same quarter last year, several items create a marked difference on the bottom line,” said Michael Koss, president and chief executive officer. “Although sales remained essentially flat for the quarter, net income declined considerably. Last year’s quarter benefited from the higher positive impacts of approximately $726,000 of unauthorized transaction related recoveries and approximately $199,000 of interest expense reversal for tax positions related to the unauthorized transactions. In addition, this year’s results include nearly $398,000 of amortization expense for previously capitalized costs related to the Striva product line, which was launched last year. These three items amount to a reduction of approximately $1,323,000 for the quarter which is more than the $936,298 decline in income before income tax provision.”
The “unauthorized transaction related recoveries” presumably refer to fallout from the $34 million embezzlement by former Koss executive Sue Sachdeva, who is serving an 11-year federal prison sentence.
