Q.E.P. Co., Inc. Reports Fiscal 2027 First Quarter Financial Results

(MENAFN- GlobeNewsWire - Nasdaq) BOCA RATON, Fla., July 15, 2026 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the“Company” or“QEP”) today reported financial results for its first quarter ended May 31, 2026.

Net sales for the quarter ended May 31, 2026 were $61.0 million, down $0.5 million or 0.9% from $61.5 million for the first quarter of fiscal 2026. The slight decline in net sales was primarily due to lower sales in the Company's non-core powder business. Despite continued weakness in home improvement spending amid elevated interest rates, inflationary pressures, and broader macroeconomic and geopolitical uncertainties, retail channel sales remained flat and distribution channel sales increased during the current period.

Gross profit for the first quarter of fiscal 2027 was $21.8 million, compared to $22.7 million in the prior-year period, a decrease of $0.9 million or 4.1%. As a percentage of net sales, gross margin was 35.7% in the first quarter of fiscal 2027, compared to 36.9% in the first quarter of fiscal 2026. Gross margin during the first quarter of fiscal 2027 reflects higher tariff costs and ongoing inflationary pressures. By comparison, the prior-year period benefited from inventory purchased before the implementation of tariffs.

Operating expenses for the first quarter of fiscal 2027 were $16.5 million, or 27.0% of net sales, compared to $16.9 million, or 27.4% of net sales for the first quarter of fiscal 2026. Operating expenses for the first quarter of fiscal 2027 reflect higher outbound freight costs, driven by increased fuel charges, together with continued investment in sales and marketing infrastructure. Other income during the quarter included approximately $1.0 million of cash refunds received from U.S. Customs and Border Protection related to tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA").

Operating income for the first quarter of fiscal 2027 was $5.3 million, compared to $5.8 million for the comparable period in fiscal 2026.

Interest income, net, was $0.2 million for the first quarter of both fiscal 2027 and fiscal 2026.

The provision for income taxes as a percentage of income before taxes was 26% for the first quarter of fiscal 2027, unchanged from the prior-year period.

Net income for the first quarter of fiscal 2027 was $4.0 million, or $1.33 per diluted share, compared to $4.4 million, or $1.36 per diluted share, for the first quarter of fiscal 2026.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of fiscal 2027 was $5.8 million, or 9.4% of net sales, compared to $6.1 million, or 10.0% of net sales, for the first quarter of fiscal 2026. A reconciliation of adjusted EBITDA, a non-GAAP financial measure, to net income from continuing operations is included in this press release.

		For the Three Months Ended
		May 31, 2026		May 31, 2025
Net income	$	4,048			$	4,444
Add:	Interest income, net		(188	)			(178	)
	Provision for income taxes		1,422				1,561
	Depreciation and amortization		469				369
	(Gain) Loss on sale of business		-				(71	)
EBITDA, as adjusted	$	5,751			$	6,125

Cash provided by operating activities during the first quarter of fiscal 2027 was $6.0 million, compared to $2.6 million in the first quarter of fiscal 2026, driven by favorable working capital management that provided cash during the current period versus a use of cash in the prior-year period. In the first quarter of fiscal 2027, the Company used cash generated from operations, supplemented by existing cash balances, to repurchase shares of common stock, pay dividends and fund capital expenditures.

As of May 31, 2026, working capital was $71.6 million, compared to $75.5 million as of February 28, 2026. After significant share repurchases during the period, the Company ended the first quarter of fiscal 2027 with a net cash position of $32.0 million, compared to $34.1 million at February 28, 2026.

Len Gould, President & Chief Executive Officer, commented, "I want to thank our 345 QEP Associates who each contributed to the strong first-quarter performance, despite declining consumer confidence and ongoing policy uncertainty. Order reliability and delivery certainty are more important than ever, especially for our customers serving the professional market. We remain committed to our strategy of being the 'Absolute Product Authority', supported by bulletproof delivery execution and best-in-class technical support. By shipping customer orders nearly 100% complete and on time, QEP earned the distinction of being named an 'Industry Disrupter' by Floor Covering News (March 16, 2026). While we're proud of these results, we're even more excited about the opportunities ahead as we continue to lean into our plan and strengthen our leadership position in the industry.”

Mr. Gould added,“Our balance sheet remains a fundamental strength of the Company, providing the financial flexibility to navigate ongoing uncertainty while continuing to return capital to shareholders through regular dividends and the repurchase of approximately $7.0 million of common stock from minority shareholders during the quarter.”

The Company welcomes investor inquiries via email at ....

About QEP

Founded in 1979, Q.E.P. Co., Inc. designs, manufactures and distributes a broad range of flooring installation solutions for commercial and home improvement projects. QEP offers a comprehensive line of specialty installation tools, adhesives, and underlayment products sold through home improvement retailers, and professional distribution channels, under brands including QEP^®, LASH^®, ROBERTS^®, Capitol^®, Premix-Marbletite^® (PMM), Brutus^® and Homelux^®.

QEP is headquartered in Boca Raton, Florida and has operations in the United States, Canada and Asia. Additional information is available at .

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally may be identified by words such as“expects,”“plans,”“projects,”“may,”“will,”“believes,”“anticipates,”“intends,”“estimates,”“could,”“should,” and similar expressions.

Forward-looking statements are based on current expectations, estimates and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include, among others: general economic conditions; conditions in the home improvement and construction markets; inflationary pressures; tariffs, trade policies and uncertainty relating to the potential recovery of certain tariffs previously paid under the International Emergency Economic Powers Act (“IEEPA”) including tariffs affecting goods imported from China and Vietnam; global sourcing and supply chain disruptions; raw material and transportation costs; competitive conditions; customer demand; the Company's ability to maintain and develop customer relationships; foreign currency fluctuations; litigation and regulatory matters; the successful integration of acquisitions and completion of divestitures; and other risks and uncertainties described from time to time in the Company's public filings and disclosures.

Forward-looking statements speak only as of the date made, and the Company undertakes no obligation to update or revise any 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,
	2026		2025
Net sales	$	60,955			$	61,528
Cost of goods sold		39,203				38,850
Gross profit		21,752				22,678
Operating expenses:
Shipping		6,937				6,874
General and administrative		6,056				6,166
Selling and marketing		4,480				3,927
Other (income) expense, net		(1,003	)			(116	)
Total operating expenses		16,470				16,851
Operating income		5,282				5,827
Interest income, net		188				178
Income before provision for income taxes		5,470				6,005
Provision for income taxes		1,422				1,561
Net income	$	4,048			$	4,444
Earnings per share:
Basic	$	1.33			$	1.36
Diluted	$	1.33			$	1.36
Weighted average number of common
shares outstanding:
Basic		3,054				3,257
Diluted		3,054				3,257

Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)
	May 31, 2026		February 28, 2026
	(Unaudited)		(Audited)
ASSETS
Cash	$	32,019			$	34,092
Accounts receivable, less allowance for credit losses of $71 and
$63 at May 31, 2026 and February 28, 2026, respectively		29,647				29,154
Inventories, net		31,526				33,324
Prepaid expenses and other current assets		2,694				2,680
Prepaid income taxes		1,032				2,424
Current assets		96,918				101,674
Property and equipment, net		14,286				14,245
Right of use operating lease assets		19,587				19,614
Deferred income taxes, net		834				834
Other assets		962				975
Total assets	$	132,587			$	137,342
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable	$	10,256			$	10,569
Accrued liabilities		12,224				12,855
Current operating lease liabilities		2,819				2,775
Lines of credit		30				11
Current maturities of debt		11				14
Current liabilities		25,340				26,224
Long-term debt		6				7
Non-current operating lease liabilities		18,814				18,970
Other long-term liabilities		428				437
Total liabilities		44,588				45,638
Preferred stock, 2,500 shares authorized, $1.00 par value; 0 shares
issued and outstanding at May 31, 2026 and February 28, 2026,		-				-
respectively
Common stock, 20,000 shares authorized, $.001 par value;
4,005 shares issued: 2,983 and 3,133 shares outstanding at
May 31, 2026 and February 28, 2026, respectively		4				4
Additional paid-in capital		10,361				10,361
Retained earnings		102,116				98,741
Treasury stock, 1,022 and 872 shares held at cost at May 31, 2026
and February 28, 2026, respectively		(22,062	)			(15,033	)
Accumulated other comprehensive income		(2,420	)			(2,369	)
Shareholders' equity		87,999				91,704
Total liabilities and shareholders' equity	$	132,587			$	137,342

Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	For the Three Months Ended
	May 31, 2026		May 31, 2025
Operating activities:
Net income	$	4,048			$	4,444
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization		469				369
Gain on disposal of businesses		-				(71	)
Gain on sale of property		-				(3	)
Other non-cash adjustments		14				-
Changes in assets and liabilities:
Accounts receivable		(528	)			236
Inventories		1,765				6,719
Prepaid expenses and other assets		571				248
Trade accounts payable and accrued liabilities		(298	)			(9,320	)
Net cash provided by operating activities		6,041				2,622
Investing activities:
Capital expenditures		(516	)			(895	)
Proceeds from sale of businesses		-				1,374
Proceeds from sale of property		-				2
Note Receivable		99				-
Net cash provided by (used in) investing activities		(417	)			481
Financing activities:
Net repayments under lines of credit		19				(87	)
Purchase of treasury stock		(7,029	)			(441	)
Principal payments on finance leases		(3	)			(2	)
Dividends paid		(673	)			(650	)
Net cash used in financing activities		(7,686	)			(1,180	)
Effect of exchange rate changes on cash		(11	)			4
Net increase (decrease) in cash		(2,073	)			1,927
Cash at beginning of period		34,092				28,552
Cash at end of period	$	32,019			$	30,479

Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except shares data)
																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 lncome													4,444								4,444
Unrealized currency translation adjustments															217				217
Purchase of treasury stock															(528	)					(528	)
Dividends paid													(650	)							(650	)
Balance at May 31, 2025		-		$	-		4,005,370		$	4		$	10,361		$	89,338			$	(10,905	)		$	(2,383	)		$	86,415
																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, 2026		-		$	-		4,005,370		$	4		$	10,361		$	98,741			$	(15,033	)		$	(2,369	)		$	91,704
Net lncome													4,048								4,048
Unrealized currency translation adjustments															(51	)			(51	)
Purchase of treasury stock															(7,029	)					(7,029	)
Dividends paid													(673	)							(673	)
Balance at May 31, 2026		-		$	-		4,005,370		$	4		$	10,361		$	102,116			$	(22,062	)		$	(2,420	)		$	87,999

CONTACT:
Q.E.P. Co., Inc.
Enos Brown
Executive Vice President and
Chief Financial Officer
561-994-5550

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