Q.E.P. CO., INC. REPORTS FISCAL 2025 SIX MONTH AND SECOND QUARTER FINANCIAL RESULTS
Six Month Adjusted Net Income Grows to $7.7 Million or $2.34 per Share
BOCA RATON, FLORIDA — October 15, 2024 — Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today reported its consolidated results of operations for the first six months and second quarter of fiscal year 2025, which ended on August 31, 2024.
Results of Operations
During the prior fiscal year, QEP completed the sale of its Harris Flooring Group in North America and its businesses in the United Kingdom, Australia and New Zealand in order to streamline operations and concentrate resources on its core product lines in the North American market. These divested operations have been classified as discontinued operations in our financial statements for all periods presented.
QEP reported net sales of $126.1 million for the six months ended August 31, 2024, a decrease of $3.9 million or 3.0% from the $130.0 million reported in the same period of fiscal 2024. The Company reported net sales of $62.6 million for the quarter ended August 31, 2024, a decrease of $1.4 million or 2.2% from the $64.0 million reported in the same period of fiscal 2024. The decrease in net sales was primarily due to the ongoing moderation of consumer spending on home improvement projects due to elevated interest rates, inflationary pressures and broader economic uncertainty.
The Company’s gross profit for the first six months of fiscal 2025 was $44.8 million compared to $41.0 million in the corresponding fiscal 2024 period, an increase of $3.8 million or 9.3%. Gross profit for the second quarter of fiscal 2025 was $22.3 million, representing an increase of $1.4 million or 6.4%, from $20.9 million in the corresponding fiscal 2024 period. The Company’s gross margin as a percentage of net sales for the first six months and second quarter of fiscal 2025 was 35.5% and 35.6%, respectively, which increased from 31.5% and 32.7% in the same periods of the prior fiscal year. The increase in gross margin as a percentage of net sales was largely due to lower inbound freight costs, improved product sourcing and other cost reduction initiatives.
Leonard Gould, President & Chief Executive Officer, commented on the Company’s results, “QEP continues to lean into product innovation by investing in people, processes, and the latest technology to bring products to market that are meaningful to the Professional Installer. This is the lifeblood of remaining ‘The Product Authority’ within our categories. We have more work ahead of us, but the Pro has noticed.
Lastly, I’d like to acknowledge the tremendous efforts of our people to successfully ship our customers complete and on-time despite the challenging marketplace.”
Operating expenses for the first six months and second quarter of fiscal 2025 were $34.5 million and $17.2 million, respectively, or 27.3% and 27.5% of net sales in those periods, compared to $33.3 million and $16.3 million, respectively, or 25.6% and 25.5% of net sales in the comparable fiscal 2024 periods. The increase in operating expenses was due to higher personnel costs in the current period.