BOCA RATON, Fla., Oct. 15, 2025 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the "Company" or "QEP") today reported its consolidated results of operations for the first six months and second quarter of fiscal year 2026, which ended on August 31, 2025.
Results of Operations
Net sales for the six months ended August 31, 2025 were $119.2 million, down $6.9 million or 5.5% from $126.1 million reported in the same period of fiscal 2025. Net sales for the second quarter ended August 31, 2025 were $57.7 million, down $4.9 million or 7.8% from $62.6 million reported in the second quarter of fiscal 2025. Net sales through the first six months of fiscal 2026 continue to be adversely impacted by elevated interest rates and consumer caution amid ongoing economic uncertainty, which have constrained home improvement spending.
Gross profit for the first six months of fiscal 2026 was $43.3 million compared to $44.8 million in the corresponding fiscal 2025 period, down $1.5 million or 3.4%. Gross profit for the second quarter of fiscal 2026 was $20.6 million compared to $22.3 million for the second quarter of fiscal 2025, down $1.7 million or 7.6%. As a percentage of net sales, gross margin for the first six months and second quarter of fiscal 2026 was 36.3% and 35.7%, respectively, up from 35.5% and 35.6% in the same periods of the prior fiscal year. The Company has maintained its gross margin as a percentage of net sales principally through the sell-through of inventory purchased before recent tariff increases. Current inventory values reflect the incremental tariff cost that will cycle through gross margin in the coming months.
"Thank you to the 350 QEP Associates who wake up every day to serve our customers," said Len Gould, President and Chief Executive Officer. "Despite tariff variabilities and a challenging economic environment, we continue to fill orders at or near 100% levels, while shipping 100% on time." Gould continued, "QEP has transformed itself mightily over the course of the past few years. Our balance sheet has never been stronger. We remain absolutely laser focused on fast tracking innovation throughout our business, all while continuing to invest in our domestic manufacturing base."
Operating expenses totaled $32.9 million and $16.0 million for the first six months and second quarter of fiscal 2026, respectively, or 27.6% and 27.8% of net sales in those periods, compared to $34.5 million and $17.2 million, respectively, or 27.3% and 27.5% of net sales in the comparable fiscal 2025 periods. The reduction in operating expenses reflects lower variable freight costs and personnel-related expenses.
Interest income from the Company's invested cash was $0.4 million and $0.2 million for the first six months and second quarter of fiscal 2026, respectively, relatively unchanged from the comparable fiscal 2025 periods.
The provision for income taxes as a percentage of income before taxes was 26.0% for both the first six months and second quarter of fiscal 2026 versus 28.0% in each of the corresponding fiscal 2025 periods.
Net income from continuing operations for the first six months and second quarter of fiscal 2026 was $8.0 million and $3.5 million, respectively, or $2.45 and $1.09, respectively, per diluted share. For the comparable periods of fiscal 2025, net income from continuing operations was $7.7 million and $3.8 million, respectively, or $2.34 and $1.17, respectively, per diluted share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, as adjusted, for the first six months and second quarter of fiscal 2026 was $11.1 million and $5.0 million, respectively, or 9.3% and 8.6% of net sales, respectively. For the comparable periods of fiscal 2025, EBITDA was $11.0 million and $5.5 million, respectively, or 8.7% of net sales each period.
For the Three For the Six Months
Months Ended Ended
------------------- --------------------
August August
August 31, 31, 31, August 31,
2025 2024 2025 2024
---------- ------- -------- ----------
Net income from
continuing
operations $3,538 $3,832 $ 7,982 $ 7,735
Interest
(income)
expense,
Add: net (240) (223) (417) (406)
Provision for
income taxes 1,244 1,495 2,805 3,003
Depreciation and
amortization 439 348 807 686
Gain on sale of
business - - (71) -
EBITDA, as adjusted $4,981 $5,452 $11,106 $11,018
===== ===== ====== ======
Cash provided by operations during the first six months of fiscal 2026 was $8.8 million, compared to $11.2 million in the first six months of fiscal 2025, reflecting payments to suppliers for the strategic inventory increase in anticipation of tariff implementation. In the first six months of fiscal 2026, cash provided by operations, along with proceeds from the sale of a business, was used to fund capital expenditures, repurchase stock, return capital to stockholders through dividends, and increase cash balances. In the first six months of fiscal 2025, cash provided by operations, along with proceeds from the sale of businesses, was used to fund capital expenditures, pay dividends, repurchase stock and increase the Company's cash surplus.
As of August 31, 2025, working capital totaled $72.3 million, compared to $67.4 million at the end of fiscal 2025. Aggregate available cash, net of outstanding debt, as of August 31, 2025 was $34.3 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 $0.20 per share on its common stock, payable on November 26, 2025 to stockholders of record as of November 3, 2025, which reflects QEP's ongoing commitment to returning value to stockholders.
The Company welcomes investor inquiries via email at ir@qep.com.
About QEP
Founded in 1979, Q.E.P. Co., Inc. is a leading designer, manufacturer and distributor of a broad range of best-in-class flooring installation solutions for commercial and home improvement projects worldwide. QEP offers a comprehensive line of specialty installation tools, adhesives, and underlayment. QEP sells its products throughout the world to home improvement retail centers, and professional specialty distribution outlets, under brand names including QEP$(R)$ , LASH(R) , ROBERTS(R) , Capitol(R) , Premix-Marbletite(R) $(PMM)$, Brutus(R) and Homelux(R) .
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 For the Six Months
Months Ended Ended
August August August
31, 31, 31, August 31,
2025 2024 2025 2024
Net sales $57,663 $62,559 $119,191 $ 126,084
Cost of goods sold 37,072 40,271 75,922 81,292
Gross profit 20,591 22,288 43,269 44,792
Operating expenses:
Shipping 6,653 6,909 13,528 13,989
General and
administrative 6,012 6,952 12,178 13,236
Selling and
marketing 3,431 3,278 7,357 7,184
Other (income)
expense, net (47) 45 (164) 51
Total operating
expenses 16,049 17,184 32,899 34,460
Operating income 4,542 5,104 10,370 10,332
Interest income
(expense), net 240 223 417 406
Income before
provision for
income taxes 4,782 5,327 10,787 10,738
Provision for income
taxes 1,244 1,495 2,805 3,003
Net income from
continuing
operations
operations 3,538 3,832 7,982 7,735
Gain from
discontinued
operations, net of
tax 300 (27) 300 538
Net income $ 3,838 $ 3,805 $ 8,282 $ 8,273
Basic earnings per
share:
From continuing
operations 1.09 1.17 2.45 2.34
From
discontinued
operations 0.09 (0.01) 0.09 0.17
Basic earnings per
share 1.18 1.16 2.54 2.51
====== ====== ======= =========
Diluted earnings per
share:
From continuing
operations 1.09 1.17 2.45 2.34
From
discontinued
operations 0.09 (0.01) 0.09 0.16
Diluted earnings per
share 1.18 1.16 2.54 2.50
====== ====== ======= =========
Weighted average
number of common
shares
outstanding:
Basic 3,255 3,276 3,256 3,300
Diluted 3,255 3,280 3,256 3,307
Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)
August 31, February 28,
2025 2025
------------- ----------------
(Unaudited) (Audited)
------------- ----------------
ASSETS
Cash $ 34,367 $ 28,552
Accounts receivable, less allowance for
credit losses of $70 and
$223 at August 31, 2025 and February
28, 2025, respectively 28,854 31,752
Inventories, net 32,909 36,595
Prepaid expenses and other current assets 1,926 2,781
Prepaid income taxes 764 1,544
-------- ---------
Current assets 98,820 101,224
Property and equipment, net 14,643 13,044
Right of use operating lease assets 20,593 21,520
Deferred income taxes, net 1,996 1,996
Intangibles, net - 1
Other assets 491 489
Total assets $ 136,543 $ 138,274
======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable $ 9,109 $ 15,569
Accrued liabilities 14,423 15,251
Current operating lease liabilities 2,927 2,887
Lines of credit 40 105
Current maturities of debt 9 9
-------- ---------
Current liabilities 26,508 33,821
Long term debt 5 10
Non-current operating lease liabilities 20,025 21,084
Other long term liabilities 408 427
-------- ---------
Total liabilities 46,946 55,342
-------- ---------
Preferred stock, 2,500 shares authorized,
$1.00 par value; 0 shares
issued and outstanding at August 31,
2025 and February 28, 2025, - -
respectively
Common stock, 20,000 shares authorized,
$.001 par value;
4,005 shares issued: 3,244 and 3,255
shares outstanding at
August 31, 2025 and February 28, 2025,
respectively 4 4
Additional paid-in capital 10,361 10,361
Retained earnings 92,528 85,544
Treasury stock, 761 and 750 shares held
at cost at August 31, 2025
and February 28, 2025, respectively (10,905) (10,377)
Accumulated other comprehensive income (2,391) (2,600)
-------- ---------
Shareholders' equity 89,597 82,932
Total liabilities and shareholders'
equity $ 136,543 $ 138,274
======== =========
Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Six Months Ended
------------------------------
August 31, August 31,
2025 2024
---------------- ------------
Operating activities:
Net income $ 8,282 $ 8,273
Adjustments to reconcile net income to
net cash
provided by (used in) operating
activities:
Depreciation and amortization 807 686
Gain on disposal of businesses (476) (512)
Gain on sale of property (4) (1)
Impairment of right of use operating
lease asset 85
Other non-cash adjustments (153) 82
Changes in assets and liabilities:
Accounts receivable 1,833 103
Inventories 3,829 (2,233)
Prepaid expenses and other assets 1,688 1,678
Trade accounts payable and accrued
liabilities (7,034) 3,019
--- ---------- --------
Net cash provided by operating
activities 8,772 11,180
--- ---------- --------
Investing activities:
Capital expenditures (2,392) (2,121)
Proceeds from sale of businesses 1,374 4,305
Proceeds from sale of property 4 1
--- ---------- --------
Net cash provided by (used in) investing
activities (1,014) 2,185
--- ---------- --------
Financing activities:
Net repayments under lines of credit (70) (548)
Repurchase of equity-based awards (1,540)
Purchase of treasury stock (565) (403)
Principal payments on finance leases (5) (55)
Dividends paid (1,298) (3,269)
--- ---------- --------
Net cash used in financing activities (1,938) (5,815)
--- ---------- --------
Effect of exchange rate changes on cash (5) 25
--- ---------- --------
Net increase in cash 5,815 7,575
Cash at beginning of period 28,552 22,369
--- ---------- --------
Cash at end of period $ 34,367 $ 29,944
=== ========== ========
Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except shares data)
(Unaudited)
The following table shows the changes in the shareholders'
equity for the six months ended August 31, 2025 and
2024.
Accumulated
Other Total
Preferred Stock Common Stock Paid-in Retained Treasury Comprehensive Shareholders'
Shares Amount Shares Amount Capital Earnings Stock Income Equity
---------------
Balance at
February 29,
2024 - $ - 4,005,370 $ 4 $11,901 $73,211 $ (9,517) $ (2,969) $ 72,630
Net income 8,273 8,273
Unrealized currency
translation
adjustments 102 102
Repurchase of
equity-based
awards (1,540) (1,540)
Purchase of
treasury
stock (491) (491)
Dividends
paid (3,269) (3,269)
-------- ----------
Balance at
August 31,
2024 - $ - 4,005,370 $ 4 $10,361 $78,215 $(10,008) $ (2,867) $ 75,705
====== ==== ========= === ====== ====== ======= ========= === ========
Accumulated
Other Total
Preferred Stock Common Stock Paid-in Retained Treasury Comprehensive Shareholders'
Shares Amount Shares Amount Capital Earnings Stock Income Equity
---------------
Balance at
February 28,
2025 - $ - 4,005,370 $ 4 $10,361 $85,544 $(10,377) $ (2,600) $ 82,932
Net income 8,282 8,282
Unrealized currency
translation
adjustments 209 209
Purchase of
treasury
stock (528) (528)
Dividends
paid (1,298) (1,298)
-------- ----------
Balance at
August 31,
2025 - $ - 4,005,370 $ 4 $10,361 $92,528 $(10,905) $ (2,391) $ 89,597
====== ==== ========= === ====== ====== ======= === ========
CONTACT:
Q.E.P. Co., Inc.
Enos Brown
Executive Vice President and
Chief Financial Officer
561-994-5550
(END) Dow Jones Newswires
October 15, 2025 08:55 ET (12:55 GMT)