BOCA RATON, Fla., Jan. 14, 2026 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the "Company" or "QEP") today reported its consolidated results of operations for the first nine months and third quarter of fiscal year 2026, which ended on November 30, 2025.
Net Sales
Net sales for the nine months ended November 30, 2025 were $178.3 million, compared to $187.2 million in the same period of fiscal 2025, a decrease of $8.9 million, or 4.7%. Net sales for the third quarter were $59.1 million, compared to $61.1 million in the third quarter of fiscal 2025, a decrease of $2.0 million or 3.2%. The decrease reflects continued pressure on home improvement spending amid economic uncertainty and elevated interest rates.
Gross Profit and Margin
Gross profit for the first nine months of fiscal 2026 was $63.6 million, compared to $66.5 million in the prior year period, a decrease of $2.9 million, or 4.4%. Third quarter gross profit was $20.3 million, compared to $21.7 million in the third quarter of fiscal 2025, a decrease of $1.4 million, or 6.4%.
Gross margin for the first nine months and third quarter of fiscal 2026 was 35.7% and 34.4%, respectively, compared to 35.5% in each of the corresponding periods of fiscal 2025. Third quarter gross margin reflects the impact of recent tariff increases that were partially offset in prior periods by the sale of inventory purchased before the tariffs were implemented.
Operating Expenses
Operating expenses totaled $48.8 million for the first nine months of fiscal 2026 and $15.9 million for the third quarter, representing 27.3% and 26.8% of net sales, respectively. This compares to operating expenses of $50.0 million and $15.5 million, or 26.7% and 25.5% of net sales, respectively, in the comparable fiscal 2025 periods. The change reflects lower variable freight costs, partially offset by higher personnel-related expenses supporting selling and marketing initiatives.
Interest Income and Taxes
Interest income from invested cash totaled $0.7 million for the first nine months of fiscal 2026 and $0.2 million for the third quarter, 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 nine months and third quarter periods, compared to 28.0% in the corresponding fiscal 2025 periods.
Net Income
Net income from continuing operations for the first nine months of fiscal 2026 was $11.5 million, or $3.53 per diluted share, compared to $12.3 million, or $3.74 per diluted share, in the comparable fiscal 2025 period. Net income from continuing operations for the third quarter was $3.5 million, or $1.08 per diluted share, compared to $4.6 million, or $1.40 per diluted share, in the prior-year quarter.
EBITDA
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the first nine months of fiscal 2026 was $16.0 million, or 9.0% of net sales, compared to $17.5 million, or 9.4% in the comparable fiscal 2025 period. Third quarter adjusted EBITDA was $4.9 million, or 8.3% of net sales, compared to $6.5 million, or 10.6% in the prior-year quarter.
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| November 30, 2025 | November 30, 2024 | November 30, 2025 | November 30, 2024 | |||||||||||||
| Net income from continuing operations | - | 3,469 | - | 4,606 | - | 11,451 | - | 12,341 | ||||||||
| Add: | Interest (income) expense, net | (237 | - | (246 | - | (654 | - | (652 | - | |||||||
| Provision for income taxes | 1,219 | 1,784 | 4,023 | 4,787 | ||||||||||||
| Depreciation and amortization | 453 | 349 | 1,260 | 1,035 | ||||||||||||
| Gain on sale of busniess | - | - | (71 | - | - | |||||||||||
| EBITDA, as adjusted | - | 4,904 | - | 6,493 | - | 16,009 | - | 17,511 | ||||||||
Cash Flow and Liquidity
Cash provided by operating activities during the first nine months of fiscal 2026 was $15.8 million, compared to $16.1 million in the first nine months of fiscal 2025. The change primarily reflects current-year payments to suppliers related to inventory built in the prior year in anticipation of tariff implementation.
During the first nine months of fiscal 2026, cash provided by operations, together with proceeds from the sale of a business, was used to fund capital expenditures, repurchase shares of common stock, and return capital to stockholders through dividends. During the comparable fiscal 2025 period, cash provided by operations and proceeds from the sale of businesses were used to fund capital expenditures, dividends, share repurchases, and to increase cash balances.
As of November 30, 2025, working capital was $71.3 million, compared to $67.4 million at the end of fiscal 2025. Aggregate available cash, net of outstanding debt, totaled $36.1 million, compared to $28.4 million at the end of fiscal 2025.
Management Commentary
"In light of the current consumer uncertainty and continued pressure in housing, I am very proud of the QEP Team for delivering such strong performance in a difficult environment. Our balance sheet remains strong, as is our commitment to returning capital to stockholders," said Len Gould, President and Chief Executive Officer. "We continue to adhere to our plan for long-term Pro-share growth. The investments we've made consistently over the last several years have strengthened our distinct competitive advantages and position us well to do just that. I would like to thank our associates for their continued hard work and dedication."
Investor Inquiries
Investor inquiries may be directed to 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 products sold through home improvement retailers, and professional specialty distribution outlets, under brands including QEP, LASH, ROBERTS, Capitol, Premix-Marbletite (PMM), Brutus and Homelux-
QEP is headquartered in Boca Raton, Florida with additional operations in the United States, Canada and Asia. Additional information is available 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 | For the Nine Months Ended | |||||||||||||
| November 30, | November 30, | November 30, | November 30, | |||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net sales | - | 59,099 | - | 61,061 | - | 178,290 | - | 187,145 | ||||||
| Cost of goods sold | 38,788 | 39,370 | 114,710 | 120,662 | ||||||||||
| Gross profit | 20,311 | 21,691 | 63,580 | 66,483 | ||||||||||
| Operating expenses: | ||||||||||||||
| Shipping | 6,413 | 6,381 | 19,941 | 20,370 | ||||||||||
| General and administrative | 6,031 | 5,788 | 18,209 | 19,024 | ||||||||||
| Selling and marketing | 3,526 | 3,349 | 10,883 | 10,533 | ||||||||||
| Other (income) expense, net | (110 | - | 29 | (273 | - | 80 | ||||||||
| Total operating expenses | 15,860 | 15,547 | 48,760 | 50,007 | ||||||||||
| Operating income | 4,451 | 6,144 | 14,820 | 16,476 | ||||||||||
| Interest income (expense), net | 237 | 246 | 654 | 652 | ||||||||||
| Income before provision for income taxes | 4,688 | 6,390 | 15,474 | 17,128 | ||||||||||
| Provision for income taxes | 1,219 | 1,784 | 4,023 | 4,787 | ||||||||||
| Net income from continuing operations operations | 3,469 | 4,606 | 11,451 | 12,341 | ||||||||||
| Gain from discontinued operations, net of tax | - | 50 | 300 | 588 | ||||||||||
| Net income | - | 3,469 | - | 4,656 | - | 11,751 | - | 12,929 | ||||||
| Basic earnings per share: | ||||||||||||||
| From continuing operations | 1.08 | 1.40 | 3.53 | 3.75 | ||||||||||
| From discontinued operations | - | 0.02 | 0.09 | 0.18 | ||||||||||
| Basic earnings per share | 1.08 | 1.42 | 3.62 | 3.93 | ||||||||||
| Diluted earnings per share: | ||||||||||||||
| From continuing operations | 1.08 | 1.40 | 3.53 | 3.74 | ||||||||||
| From discontinued operations | - | 0.02 | 0.09 | 0.18 | ||||||||||
| Diluted earnings per share | 1.08 | 1.42 | 3.62 | 3.92 | ||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||
| Basic | 3,219 | 3,276 | 3,243 | 3,292 | ||||||||||
| Diluted | 3,219 | 3,276 | 3,243 | 3,297 | ||||||||||
| Q.E.P. CO., INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (In thousands, except par values) | |||||||
| November 30, 2025 | February 28, 2025 | ||||||
| (Unaudited) | (Audited) | ||||||
| ASSETS | |||||||
| Cash | - | 36,144 | - | 28,552 | |||
| Accounts receivable, less allowance for credit losses of $76 and | |||||||
| $221 at November 30, 2025 and February 28, 2025, respectively | 27,988 | 31,752 | |||||
| Inventories, net | 34,157 | 36,595 | |||||
| Prepaid expenses and other current assets | 1,920 | 2,781 | |||||
| Prepaid income taxes | 777 | 1,544 | |||||
| Current assets | 100,986 | 101,224 | |||||
| Property and equipment, net | 14,372 | 13,044 | |||||
| Right of use operating lease assets | 20,117 | 21,520 | |||||
| Deferred income taxes, net | 1,996 | 1,996 | |||||
| Intangibles, net | - | 1 | |||||
| Other assets | 412 | 489 | |||||
| Total assets | - | 137,883 | - | 138,274 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Trade accounts payable | - | 12,030 | - | 15,569 | |||
| Accrued liabilities | 14,752 | 15,251 | |||||
| Current operating lease liabilities | 2,862 | 2,887 | |||||
| Lines of credit | 50 | 105 | |||||
| Current maturities of debt | 13 | 9 | |||||
| Current liabilities | 29,707 | 33,821 | |||||
| Long term debt | 10 | 10 | |||||
| Non-current operating lease liabilities | 19,498 | 21,084 | |||||
| Other long term liabilities | 400 | 427 | |||||
| Total liabilities | 49,615 | 55,342 | |||||
| Preferred stock, 2,500 shares authorized, $1.00 par value; 0 shares | |||||||
| issued and outstanding at November 30, 2025 and February 28, 2025 | - | - | |||||
| respectively | |||||||
| Common stock, 20,000 shares authorized, $.001 par value; | |||||||
| 4,005 shares issued: 3,135 and 3,255 shares outstanding at | |||||||
| November 30, 2025 and February 28, 2025, respectively | 4 | 4 | |||||
| Additional paid-in capital | 10,361 | 10,361 | |||||
| Retained earnings | 95,347 | 85,544 | |||||
| Treasury stock, 870 and 750 shares held at cost at November 30, 2025 | |||||||
| and February 28, 2025, respectively | (14,974 | - | (10,377 | - | |||
| Accumulated other comprehensive income | (2,470 | - | (2,600 | - | |||
| Shareholders' equity | 88,268 | 82,932 | |||||
| Total liabilities and shareholders' equity | - | 137,883 | - | 138,274 | |||
| Q.E.P. CO., INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (In thousands) | |||||||
| (Unaudited) | |||||||
| For the Nine Months Ended | |||||||
| November 30, 2025 | November 30, 2024 | ||||||
| Operating activities: | |||||||
| Net income | - | 11,751 | - | 12,929 | |||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 1,260 | 1,035 | |||||
| Gain on disposal of businesses | (476 | - | (547 | - | |||
| Gain on sale of property | (3 | - | (1 | - | |||
| Impairment of right of use operating lease asset | - | 116 | |||||
| Impairment of long-lived asset | - | 85 | |||||
| Other non-cash adjustments | (147 | - | 174 | ||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | 2,652 | 997 | |||||
| Inventories | 2,532 | (3,953 | - | ||||
| Prepaid expenses and other assets | 2,203 | 2,667 | |||||
| Trade accounts payable and accrued liabilities | (3,974 | - | 2,582 | ||||
| Net cash provided by operating activities | 15,798 | 16,084 | |||||
| Investing activities: | |||||||
| Capital expenditures | (2,567 | - | (3,380 | - | |||
| Proceeds from sale of businesses | 1,023 | 4,890 | |||||
| Proceeds from sale of property | 3 | 1 | |||||
| Net cash provided by (used in) investing activities | (1,541 | - | 1,511 | ||||
| Financing activities: | |||||||
| Net repayments under lines of credit | (59 | - | (531 | - | |||
| Repurchase of equity-based awards | - | (1,540 | - | ||||
| Purchase of treasury stock | (4,634 | - | (433 | - | |||
| Principal payments on finance leases | (7 | - | (80 | - | |||
| Dividends paid | (1,948 | - | (3,269 | - | |||
| Net cash used in financing activities | (6,648 | - | (5,853 | - | |||
| Effect of exchange rate changes on cash | (17 | - | (9 | - | |||
| Net increase in cash | 7,592 | 11,733 | |||||
| Cash at beginning of period | 28,552 | 22,369 | |||||
| Cash at end of period | - | 36,144 | - | 34,102 | |||
| 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 shareholder's equity for the nine months ended November 30, 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 | 12,929 | 12,929 | ||||||||||||||||||||||||||||||
| Unrealized currency translation adjustments | (168 | - | (168 | - | ||||||||||||||||||||||||||||
| Repurchase of equity-based awards | (1,540 | - | (1,540 | - | ||||||||||||||||||||||||||||
| Purchase of treasury stock | (491 | - | (491 | - | ||||||||||||||||||||||||||||
| Dividends paid | (3,269 | - | (3,269 | - | ||||||||||||||||||||||||||||
| Balance at November 30, 2024 | - | - | - | 4,005,370 | - | - | 4 | - | 10,361 | - | 82,871 | - | (10,008 | - | - | (3,137 | - | - | 80,091 | |||||||||||||
| 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 | 11,751 | 11,751 | ||||||||||||||||||||||||||||||
| Unrealized currency translation adjustments | 130 | 130 | ||||||||||||||||||||||||||||||
| Purchase of treasury stock | (4,597 | - | (4,597 | - | ||||||||||||||||||||||||||||
| Dividends paid | (1,948 | - | (1,948 | - | ||||||||||||||||||||||||||||
| Balance at November 30, 2025 | - | - | - | 4,005,370 | - | 4 | - | 10,361 | - | 95,347 | - | (14,974 | - | - | (2,470 | - | - | 88,268 | ||||||||||||||
CONTACT:
Q.E.P. Co., Inc.
Enos Brown
Executive Vice President and
Chief Financial Officer
561-994-5550
