Q.E.P. CO., Inc. Reports Fiscal 2026 Nine Month and Third Quarter Financial Results

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

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