Q.E.P. Co., Inc. Reports Fiscal 2026 First Quarter Financial Results and Declares Second Quarter Cash Dividend
BOCA RATON, Fla., July 15, 2025 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX:QEPC) (the "Company" or "QEP") today announced its financial results for the first quarter ended May 31, 2025 and declared its second quarter cash dividend.
Results of Operations
Net sales for the quarter ended May 31, 2025 were $61.5 million, down $2.0 million or 3.1% from $63.5 million reported for the first quarter of fiscal 2025. The slight decline in net sales was primarily due to the ongoing softness in home improvement spending due to elevated interest rates and macroeconomic uncertainty.
Gross profit for the first quarter of fiscal 2026 increased $0.2 million or 0.1% to $22.7 million, up from $22.5 million for the same period in the prior year. As a percentage of net sales, gross margin improved to 36.9% in the first quarter of fiscal 2026, up from 35.4% in the first quarter of fiscal 2025, primarily due to the sell-through of inventory purchased before recent tariff increases. This improvement may be temporary, as future gross margins are expected to be impacted by higher landed costs resulting from newly imposed tariffs.
"Despite persistent economic headwinds, the first quarter results demonstrate the strength and resiliency of our business," said Len Gould, President and Chief Executive Officer. "This is a reflection of the hard work of our people throughout QEP, and their efforts are to be applauded."
Gould continued, "We continue to proactively expand and enhance our domestic manufacturing footprint and our sourcing capabilities. Earlier this week the Grand Opening of our latest adhesive production facility in Dalton, Georgia was held. This completed a multi-year effort to bring new technology and enhanced capacity to our lineup, along with the ability to ‘in-house' formerly purchased items, which represents a major milestone for the Company, and a true win for our customers."
Operating expenses totaled $16.9 million or 27.4% of net sales versus $17.3 million or 27.2% of net sales in the prior year period, reflecting lower variable expenses tied to sales volumes.
Interest income from the Company's invested cash balances was $0.2 million, unchanged from the prior year.
The provision for income taxes as a percentage of income before taxes was 26% compared to 28% in the first quarter of fiscal 2025.
Net income was $4.4 million or $1.36 per diluted share, as compared to $4.5 million or $1.34 per diluted share for the prior year period. Excluding discontinued operations, adjusted net income for the first quarter of the prior year was $3.9 million or $1.17 per diluted share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the first quarter of fiscal 2026 was $6.1 million or 10.0% of net sales, up from $5.6 million or 8.8% of net sales in the first quarter of fiscal 2025.
For the Three Months Ended
May 31, 2025
May 31, 2024
Net income from continuing operations
$
4,444
$
3,903
Add:
Interest (income) expense, net
(178
)
(183
)
Provision for income taxes
1,561
1,508
Depreciation and amortization
369
338
Gain on sale of business
(71
)
-
EBITDA, as adjusted
$
6,125
$
5,566
Cash provided by operating activities during the first quarter of fiscal 2026 was $2.6 million, compared to $6.1 million in the comparable fiscal 2025 period, reflecting a strategic inventory build in anticipation of potential tariff impacts. In the first quarter of fiscal 2026, the Company used its cash from operations, along with proceeds from the sale of a business, to fund capital expenditures, repurchase stock, return capital to stockholders through dividends and increase cash balances. In the first quarter of fiscal 2025, cash provided by operations, along with proceeds from the sale of businesses, was used to repurchase stock and increase the Company's cash surplus.
As of May 31, 2025, working capital totaled $70.2 million, compared to $67.4 million at the end of fiscal 2025. Aggregate available cash, net of outstanding debt at May 31, 2025 was $30.4 million, up from $28.4 million at the end of fiscal 2025.
Cash Dividend Declaration
QEP's Board of Directors declared a quarterly cash dividend of $0.20 per share on its common stock, payable on August 28, 2025 to stockholders of record as of August 1, 2025, which reflects QEP's ongoing commitment to returning value to stockholders.
The Company welcomes investor inquiries via email at
About QEP
Founded in 1979, Q.E.P. Co., Inc. is a leading designer, manufacturer and distributor of a broad range of best-in-class flooring installation solutions for commercial and home improvement projects worldwide. QEP offers a comprehensive line of specialty installation tools, adhesives, and underlayment. QEP sells its products throughout the world to home improvement retail centers, and professional specialty distribution outlets, under brand names including QEP®, LASH®, ROBERTS®, Capitol®, Premix-Marbletite® (PMM), Brutus® and Homelux®.
QEP is headquartered in Boca Raton, Florida with other offices in the United States, Canada and Asia. Please visit our website at www.qepcorporate.com.
Forward-Looking Statements
All statements contained in this press release, other than statements of historical facts, may constitute forward-looking statements within the meaning of the federal securities laws. These statements can be identified by words such as "expects," "plans," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. These forward-looking statements include, but are not limited to, (i) statements regarding (a) pending legal proceedings and/or administrative matters, (b) exposure of the Company to significant fines and penalties if the Company fails to comply with certain environmental laws or approval requirements and (c) the inability to obtain components and products as required or to develop alternative sources, if and as required in the future and (ii) statements under the section titled "Competitive Business Conditions, the Issuer's Competitive Position in the Industry, and Methods of Competition." Any forward-looking statements contained herein are based on current expectations and beliefs, and are subject to a number of risks and uncertainties, including risks related to the following: challenges presented by (i) scarcity and rising cost for raw materials, (ii) shifts in global sourcing patterns, and (iii) general inflationary pressures, economic conditions, sales growth, price increases, maintaining and improving profitability, product development and marketing, operating expenses, cost savings, the successful completion of acquisitions and dispositions, acquisition integration, operational synergy realization, global sourcing, political uncertainty, cash flow, debt and currency exchange rates, including as a result of (A) the imposition and changes to tariffs, including the effects of tariffs on goods imported from China and Vietnam, which countries the Company relies on for the manufacturing and importation of many of the Company's flooring installation tool products and related accessories, and tariffs on all steel and aluminum imports into the United States, (B) trade policies affecting macroeconomic conditions and/or (C) retaliatory trade actions taken by global trading partners. Forward-looking statements may also be adversely affected by general market factors, competitive product development, product availability, federal and state regulations and legislation, manufacturing issues that may arise, patent positions and litigation, among other factors. The forward-looking statements contained herein speak only as of the date the statements were made, and the Company does not undertake any obligation to update forward-looking statements, except as required by law.
-Financial Information Follows-
Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
For the Three Months Ended
May 31,
May 31,
2025
2024
Net sales
$
61,528
$
63,524
Cost of goods sold
38,850
41,021
Gross profit
22,678
22,503
Operating expenses:
Shipping
6,874
7,081
General and administrative
6,166
6,284
Selling and marketing
3,927
3,905
Other (income) expense, net
(116
)
5
Total operating expenses
16,851
17,275
Operating income
5,827
5,228
Interest income (expense), net
178
183
Income before provision for income taxes
6,005
5,411
Provision for income taxes
1,561
1,508
Net income from continuing operations
4,444
3,903
Gain from discontinued operations, net of tax
-
565
Net income
$
4,444
$
4,468
Basic earnings per share:
From continuing operations
$
1.36
$
1.17
From discontinued operations
-
0.17
Basic earnings per share
$
1.36
$
1.34
Diluted earnings per share:
From continuing operations
$
1.36
$
1.17
From discontinued operations
-
0.17
Diluted earnings per share
$
