Q.E.P. Co., Inc. Reports Fiscal 2027 Six-Month And Second-Quarter Financial Results

(MENAFN- GlobeNewsWire - Nasdaq) BOCA RATON, Fla., Oct. 15, 2026 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the“Company” or“QEP”) today reported financial results for the first six months and second quarter of fiscal year 2027, which ended on August 31, 2026.

Net sales for the six months ended August 31, 2026 were $122.0 million, up $2.8 million or 2.4% from $119.2 million reported in the same period of fiscal 2026. Net sales for the second quarter ended August 31, 2026 were $61.1 million, up $3.4 million or 5.9% from $57.7 million reported in the second quarter of fiscal 2026. Sales growth was driven by continued expansion in the professional distribution channel, particularly in adhesive products, and successful retail initiatives, despite a challenging macroeconomic environment.

Len Gould, President & Chief Executive Officer, commented, "Our fiscal 2027 results highlight the resonance of our Brands with the Professional Installer, and the resilience of our core business in the face of a challenging macroeconomic landscape. Our continuing investment in U.S.-based manufacturing, together with our laser focus on innovation and service, is supporting improved sales momentum. Notwithstanding the current economic headwinds, we continue to push forward with multiple initiatives to expand our market penetration and strengthen our product portfolio.”

Mr. Gould added,“Our financial strength provides a solid foundation during uncertain times and allows us to return capital to stockholders through regular quarterly cash dividends and stock repurchases of $9.2 million during the first six months of fiscal 2027. Lastly, I would like to thank QEP's Associates for their hard work and incredible commitment to our customers.”

Gross profit for the first six months of fiscal 2027 was $42.7 million compared to $43.3 million in the corresponding fiscal 2026 period, down $0.6 million or 1.4%. Gross profit for the second quarter of fiscal 2027 was $20.9 million compared to $20.6 million for the second quarter of fiscal 2026, up $0.3 million or 1.5%. As a percentage of net sales, gross margin for the first six months and second quarter of fiscal 2027 was 35.0% and 34.2%, respectively, down from 36.3% and 35.7% in the same periods of the prior fiscal year. The decline in gross margins during the current fiscal year reflects the continued impact of higher tariff costs combined with more recent increases in fuel and other input costs. By comparison, the prior-year periods benefited from inventory purchased before the implementation of tariffs. Refunds of tariffs previously paid under the International Emergency Economic Powers Act (“IEEPA”) were recognized in other income within operating expenses and did not affect reported gross profit or gross margins.

Operating expenses totaled $30.0 million and $13.5 million for the first six months and second quarter of fiscal 2027, respectively, or 24.6% and 22.1% of net sales in those periods, compared to $32.9 million and $16.0 million, respectively, or 27.6% and 27.8% of net sales in the comparable fiscal 2026 periods. Other income, within operating expenses, includes $5.7 million and $4.8 million, respectively, of IEEPA tariff refunds previously paid and recognized as expense. Excluding these refunds, operating expenses increased compared with the prior-year periods, primarily due to higher shipping, general and administrative, and selling and marketing expenses.

Interest income was $0.7 million and $0.5 million for the first six months and second quarter of fiscal 2027, compared to $0.4 million and $0.2 million for the comparable fiscal 2026 periods. Included in both current year periods were $0.3 million in interest income related to the IEEPA tariff refunds.

The provision for income taxes as a percentage of income before taxes was 26.0% for all periods presented.

Net income from continuing operations for the first six months and second quarter of fiscal 2027 was $9.9 million and $5.8 million, respectively, or $3.29 and $1.97, respectively, per diluted share. For the comparable periods of fiscal 2026, net income from continuing operations was $8.0 million and $3.5 million, respectively, or $2.45 and $1.09, respectively, per diluted share.

Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the first six months and second quarter of fiscal 2027 were $13.6 million and $7.9 million, respectively, or 11.2% and 12.9% of net sales. This compares to EBITDA of $11.1 million and $5.0 million, or 9.3% and 8.6% of net sales for the corresponding periods of fiscal 2026. Fiscal 2027 EBITDA includes refunds of IEEPA tariffs previously paid and recognized as expenses of $5.7 million for the first six months and $4.8 million for the second quarter. Management does not expect these refunds to be indicative of ongoing operating results.

		For the Three Months Ended		For the Six Months Ended
		August 31, 2026		August 31, 2025		August 31, 2026		August 31, 2025
Net income from continuing operations	$	5,848			$	3,538			$	9,896			$	7,982
Add:	Interest income, net		(512	)			(240	)			(699	)			(417	)
	Provision for income taxes		2,055				1,244				3,477				2,805
	Depreciation and amortization		472				439				941				807
	Gain on sale of businesses		-				-				-				(71	)
EBITDA	$	7,863			$	4,981			$	13,615			$	11,106

Cash provided by operations during the first six months of fiscal 2027 was $17.3 million, compared to $8.8 million in the first six months of fiscal 2026, reflecting the receipt of IEEPA tariff refunds and higher trade payables and accrued liabilities. In the first six months of fiscal 2027, the Company used cash generated from operations to repurchase shares of common stock, pay dividends, fund capital expenditures and increase available cash.

As of August 31, 2026, working capital remained stable at $74.7 million, compared to $75.5 million as of February 28, 2026. The Company ended the second quarter of fiscal 2027 with a net cash position of $40.1 million, compared to $34.1 million as of February 28, 2026.

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®, Spray-Lock®, Premix-Marbletite® (PMM), Brutus® and Homelux®.

QEP is headquartered in Boca Raton, Florida with other 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 and trade policies; 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 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.
CONTACT:
Q.E.P. Co., Inc.
Enos Brown
Executive Vice President and
Chief Financial Officer
561-994-5550

-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		For the Six Months Ended
		August 31,		August 31,		August 31,		August 31,
			2026				2025				2026				2025
	Net sales	$	61,050			$	57,663			$	122,005			$	119,191
	Cost of goods sold		40,154				37,072				79,357				75,922
	Gross profit		20,896				20,591				42,648				43,269
	Operating expenses:
	Shipping		7,204				6,653				14,142				13,528
	General and administrative		7,372				6,012				13,428				12,178
	Selling and marketing		3,669				3,431				8,149				7,357
	Other (income) expense, net		(4,740	)			(47	)			(5,745	)			(164	)
	Total operating expenses		13,505				16,049				29,974				32,899
	Operating income		7,391				4,542				12,674				10,370
	Interest income, net		512				240				699				417
	Income before provision for income taxes		7,903				4,782				13,373				10,787
	Provision for income taxes		2,055				1,244				3,477				2,805
	Net income from continuing operations operations		5,848				3,538				9,896				7,982
	Gain from discontinued operations, net of tax		-				300				-				300
	Net income	$	5,848			$	3,838			$	9,896			$	8,282
	Basic earnings per share:
	From continuing operations	$	1.97			$	1.09			$	3.29			$	2.45
	From discontinued operations		-				0.09				-				0.09
	Basic earnings per share	$	1.97			$	1.18			$	3.29			$	2.54
	Diluted earnings per share:
	From continuing operations	$	1.97			$	1.09			$	3.29			$	2.45
	From discontinued operations		-				0.09				-				0.09
	Diluted earnings per share	$	1.97			$	1.18			$	3.29			$	2.54
	Weighted average number of common
	shares outstanding:
	Basic		2,967				3,255				3,011				3,256
	Diluted		2,967				3,255				3,011				3,256

Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)
	August 31, 2026		February 28, 2026
	(Unaudited)		(Audited)
ASSETS
Cash	$	40,136			$	34,092
Accounts receivable, less allowance for credit losses of $71 and
$63 at August 31, 2026 and February 28, 2026, respectively		29,195				29,154
Inventories, net		33,285				33,324
Prepaid expenses and other current assets		2,215				2,680
Prepaid income taxes		-				2,424
Current assets		104,831				101,674
Property and equipment, net		14,316				14,245
Right of use operating lease assets		20,297				19,614
Deferred income taxes, net		834				834
Other assets		965				975
Total assets	$	141,243			$	137,342
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable	$	12,202			$	10,569
Accrued liabilities		14,918				12,855
Current operating lease liabilities		2,752				2,775
Income taxes payable		199				-
Lines of credit		70				11
Current maturities of debt		9				14
Current liabilities		30,150				26,224
Long-term debt		5				7
Non-current operating lease liabilities		19,634				18,970
Other long-term liabilities		422				437
Total liabilities		50,211				45,638
Preferred stock, 2,500 shares authorized, $1.00 par value; 0 shares
issued and outstanding at August 31, 2026 and February 28, 2026,		-				-
respectively
Common stock, 20,000 shares authorized, $.001 par value;
4,005 shares issued: 2,940 and 3,133 shares outstanding at
August 31, 2026 and February 28, 2026, respectively		4				4
Additional paid-in capital		10,361				10,361
Retained earnings		107,313				98,741
Treasury stock, 1,065 and 872 shares held at cost at August 31, 2026
and February 28, 2026, respectively		(24,202	)			(15,033	)
Accumulated other comprehensive income		(2,444	)			(2,369	)
Shareholders' equity		91,032				91,704
Total liabilities and shareholders' equity	$	141,243			$	137,342

Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	For the Six Months Ended
	August 31, 2026		August 31, 2025
Operating activities:
Net income	$	9,896			$	8,282
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization		941				807
Gain on disposal of businesses		-				(476	)
Gain on sale of property		(1	)			(4	)
Other non-cash adjustments		32				(153	)
Changes in assets and liabilities:
Accounts receivable		(91	)			1,833
Inventories		(11	)			3,829
Prepaid expenses and other assets		1,620				1,688
Trade accounts payable and accrued liabilities		4,954				(7,034	)
Net cash provided by operating activities		17,340				8,772
Investing activities:
Capital expenditures		(1,037	)			(2,392	)
Proceeds from sale of businesses		-				1,374
Proceeds from sale of property		1				4
Note Receivable		197				-
Net cash used in investing activities		(839	)			(1,014	)
Financing activities:
Net repayments under lines of credit		59				(70	)
Purchase of treasury stock		(9,169	)			(565	)
Principal payments on finance leases		(7	)			(5	)
Dividends paid		(1,324	)			(1,298	)
Net cash used in financing activities		(10,441	)			(1,938	)
Effect of exchange rate changes on cash		(16	)			(5	)
Net increase in cash		6,044				5,815
Cash at beginning of period		34,092				28,552
Cash at end of period	$	40,136			$	34,367

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, 2026 and 2025.
															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
															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 income												9,896								9,896
Unrealized currency translation adjustments															(75	)			(75	)
Purchase of treasury stock														(9,169	)					(9,169	)
Dividends paid												(1,324	)							(1,324	)
Balance at August 31, 2026	-		$	-		4,005,370		$	4		$	10,361		$	107,313			$	(24,202	)		$	(2,444	)		$	91,032

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