Q.E.P. CO., INC. REPORTS FISCAL 2025 FIRST QUARTER FINANCIAL RESULTS
Quarterly Adjusted Net Income More than Doubles to $3.9 Million or $1.17 per Share
BOCA RATON, FLORIDA — July 15, 2024 — Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today reported its consolidated results of operations for the first quarter of fiscal year 2025, which ended on May 31, 2024.
During the prior fiscal year, QEP completed several strategic divestments to streamline operations and concentrate resources on its core product lines in the North American market. These divestments included the sale of the Company’s Harris Flooring Group in North America and the Company’s businesses in the United Kingdom, Australia and New Zealand. These divested operations have been classified as discontinued operations in our financial statements for all periods presented.
QEP reported net sales of $63.5 million for the quarter ended May 31, 2024, a decrease of $2.5 million or 3.7% from the $66.0 million reported for the first quarter of fiscal 2024, which was primarily due to continued softening of consumer demand across multiple product categories and sales channels. The Company continues to invest in the expansion of its regional sales coverage in order to penetrate new and existing sales channels.
The Company’s gross profit for the first quarter of fiscal 2025 increased $2.5 million or 12.2% to $22.5 million, from $20.0 million for the first quarter of fiscal 2024. As a percentage of net sales, gross margin was 35.4% for the first quarter of fiscal 2025, as compared to 30.4% for the first quarter of fiscal 2024. The increase in gross margin as a percentage of net sales was largely due to lower inbound freight, along with continued improvement in product mix and other cost-reduction initiatives.
Leonard Gould, President & Chief Executive Officer, commented on the Company’s results, “I am grateful for the support of the QEP Team as we continue our transformation. These positive results allow us to reinvest in resources to provide the ultimate service to our customers and critically to move forward with the numerous innovations in our product pipeline.”
Operating expenses were $17.3 million or 27.2% of net sales for the first quarter of fiscal 2025 as compared to $16.9 million or 25.6% of net sales for the first quarter of fiscal 2024. The increase in operating expenses was due to higher personnel and outbound shipping costs in the current period.
Interest income was $0.2 million for the first quarter of fiscal 2025 as compared to interest expense of $0.6 million in the first quarter of fiscal 2024. This change is due to the Company’s significant repayment of debt in the latter part of fiscal 2024 and the investment of the Company’s cash surplus in the first quarter of fiscal 2025.
The provision for income taxes as a percentage of income before taxes was 28% for both the first quarter of fiscal 2025 and the first quarter of fiscal 2024.