KOSS CORP

Koss Corporation

Company scope

Koss Corporation, including its subsidiaries Koss Corp B.V. and Koss U.K. Limited, designs, manufactures, and sells stereo headphones and related personal listening accessories. Results are reported as a single operating segment.

Products and markets

• About 80% of fiscal 2026 sales came from stereo headphones used for listening to music.
• About 20% of sales came from headphones used in communications and education, with metal detectors, and sold to original equipment manufacturers (OEMs).
• Products are sold through multiple channels: U.S. and international distributors, audio specialty stores, the internet, national retailers, grocery stores, electronics retailers, and private label arrangements. The Company also sells to distributors for resale to school systems and directly to other manufacturers for inclusion with their products.
• International markets are served via domestic sales representatives in the Netherlands and the Caucasus region, and through independent distributors in several countries.

Distribution and customers

• The Company’s direct-to-consumer sales via the Amazon portal accounted for about 22% of net sales in 2026 and 19% in 2025.
• The five largest customers represented approximately 49% of net sales in 2026 and 50% in 2025.
• International sales were about 17% of consolidated net sales.
• Management emphasizes retaining a broad base of retailers and distributors to maintain product placement; no single foreign country accounted for a material portion of revenue.

Sourcing and manufacturing

• The Company sources complete stereo headphones manufactured to its specifications from various manufacturers in Asia.
• Raw materials for production at the Milwaukee, Wisconsin plant are sourced as needed.
• Management believes current sources of complete headphones and raw materials meet the Company's requirements.

Intellectual property

• As of June 30, 2026, the Company had approximately 400 trademarks registered in about 88 countries and nearly 170 patents in about 25 countries.
• The Company maintains an IP enforcement program that began in 2019 and regards IP protection as central to its business model.

Employees and personnel

• As of June 30, 2026, the Company employed 30 people, including 2 part-time employees.
• No temporary personnel were engaged during the year.
• None of the employees are covered by a collective bargaining agreement.

Strategy and financial outlook

• During the fiscal year ended June 30, 2026, management announced a diversification-by-acquisition strategy to acquire cash-flow-positive companies for long-term growth and retention.
• The Company expects this strategy to change its financial profile over the next 1–5 years and to generate more predictable, recurring revenue streams.
• Selling, general, and administrative costs are expected to increase during the acquisition phase; existing cash, cash equivalents, and operating cash flows are anticipated to support the transition.

Seasonal and other notes

• Retail electronics can be seasonal, but headphone sales have generally been even throughout the year, with a temporary spike in Q1 of fiscal 2026 due to a large custom order.
• The Company cites its IP portfolio and brand differentiation—sound quality, workmanship, and customer service—as key competitive advantages.