“Sales were down this quarter,” said Michael J. Kos Chairman and CEO said today: “Domestic distributors appear to have become more conservative in their inventory management and are slowing down orders. , “Fortunately, our direct-to-consumer (DTC) business grew significantly in the same quarter last year, which is positive for the company’s margins.”
The US-based hi-fi headphone company has announced results for its fourth quarter ended June 30, 2022. Fourth fiscal quarter revenue was $4,191,761, down 22.7% from $5,420,471 in the same period last year. For the three months ended June 30, 2022, net income was $385,595, up from net income of $331,943 in the same period last year. Basic and diluted earnings per common share were both $0.04 for the quarter, compared with $0.04 and $0.03 diluted earnings per common share for the three months a year ago was a dollar.
Highlights
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Diluted earnings per common share were $0.13 for the year, compared with diluted earnings per common share or $0.05 in the prior-year period. “The two most important drivers of the decline in sales were the loss of domestic distributors and private-label products sold to a single US wholesaler.” Our DTC sales grew exponentially, and sales to the education sector also helped offset some of the decline.”
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Revenue of $17,607,267 for the fiscal year ended June 30, 2022 decreased by $1,938,741, or 9.9%, from $19,546,008 in the prior year. Net income for the year ended June 30, 2022 was $1,268,409, compared with $493,594 in the same period last year. Basic earnings per common share for the full year were $0.14, compared with basic earnings per common share of $0.06 last year.
Continued disruptions in ocean freight and congestion at U.S. ports have led to rising transportation costs, which are expected to continue for the foreseeable future and are expected to negatively impact gross margins. The company’s contract with a professional carrier has stabilized its rates. “
“While revenues for the fiscal year were down, the combination of these sales by channel has resulted in higher margin sales from his DTC sales replacing lower margin sales to U.S. bulk distributors. Gross margins have improved significantly,” he continued Koss. “The persistence of COVID-19 around the world and delays across supply chains as a result of the conflict in Eastern Europe continue to affect the company.