BOCA RATON, Fla., June 01, 2026 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the "Company" or "QEP") today reported financial results for its fiscal year ended February 28, 2026.
Net sales for fiscal 2026 were $233.7 million, compared to $243.8 million for fiscal 2025, a decrease of $10.1 million, or 4.1%. The decrease primarily reflected continued softness in home improvement spending, which the Company believes was influenced by elevated interest rates, inflationary pressures and broader macroeconomic uncertainty. The Company continued to invest in its sales organization and customer development initiatives during fiscal 2026.
Gross profit for fiscal 2026 was $82.6 million, compared to $86.6 million in the prior year, a decrease of $4.0 million or 4.5%. As a percentage of net sales, gross margin was 35.4% in fiscal 2026, compared to 35.5% in fiscal 2025. Gross margin during fiscal 2026 reflected the impact of increased tariffs, which were partially offset by inventory purchases made prior to tariff implementation.
Operating expenses were $64.5 million, or 27.6% of net sales, for fiscal 2026, compared to $66.8 million, or 27.4% of net sales, in fiscal 2025. The decrease in operating expenses primarily reflected lower variable freight costs and reduced administrative expenses, which were partially offset by continued investments in sales and marketing personnel and infrastructure.
Operating income for fiscal 2026 was $18.2 million, compared to $19.8 million for fiscal 2025.
Interest income, net, was $0.9 million for both fiscal 2026 and fiscal 2025.
The provision for income taxes as a percentage of income before taxes was 22.5% for fiscal 2026, compared to 24.1% for fiscal 2025.
Net income for fiscal 2026 was $15.8 million, or $4.90 per diluted share, compared to $16.3 million, or $4.94 per diluted share, for fiscal 2025. Net income from continuing operations for fiscal 2026 was $14.8 million, or $4.59 per diluted share, compared to $15.7 million, or $4.78 per diluted share, for fiscal 2025.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for fiscal 2026 was $19.8 million, or 8.5% of net sales, compared to $22.2 million, or 9.1% of net sales, for fiscal 2025. Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to net income from continuing operations is included in this press release.
For the Year Ended
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February 28, February 28,
2026 2025
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Net income from continuing operations $ 14,760 $ 15,711
Add: Interest income, net (868) (876)
Provision for income taxes 4,273 4,979
Depreciation and amortization 1,727 1,385
(Gain) Loss on sale of business (71) 958
EBITDA, as adjusted $ 19,821 $ 22,157
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Cash provided by operating activities during fiscal 2026 was $14.3 million, compared to $12.7 million in fiscal 2025. Operating cash flow during fiscal 2026 primarily reflected the timing impact of inventory purchases made ahead of tariff increases during the prior fiscal year and related supplier payments during fiscal 2026.
During fiscal 2026, the Company used cash generated from operations, together with proceeds from business divestitures, to fund capital expenditures, repurchase shares of common stock, pay dividends and increase cash balances.
As of February 28, 2026, working capital was $75.5 million, compared to $67.4 million at February 28, 2025. The Company ended fiscal 2026 with a net cash position of $34.1 million, compared to $28.4 million at the end of fiscal 2025.
"Throughout fiscal 2026, we delivered strong operating results and our team did an incredible job engaging with customers and growing Pro market share. I would like to thank them for their hard work and dedication," said Len Gould, President & Chief Executive Officer. "Additionally, this past fiscal year, our capital allocation strategy enabled us to return value to shareholders through dividends and share repurchases."
Mr. Gould added, "Our year-end results are in line with expectations. Our industry leading ROBERTS$(R)$ and QEP(R) brands continue to grow share with the Pro despite tremendous consumer uncertainty and housing affordability pressure.
We will continue to lean into innovation and unrivaled service, as it is clearly resonating with our customers and end-users alike."
The Company welcomes investor inquiries via email at ir@qep.com.
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(R), LASH(R), ROBERTS(R), Capitol(R), Premix-Marbletite(R) $(PMM)$, Brutus(R) and Homelux(R).
QEP is headquartered in Boca Raton, Florida and has operations in the United States, Canada and Asia. Additional information is available at www.qepcorporate.com.
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, trade policies and uncertainty relating to the potential recovery of certain tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA") including tariffs affecting goods imported from China and Vietnam; 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 completion of divestitures; 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.
-Financial Information Follows-
Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
For the Year Ended
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February 28, February 28,
2026 2025
Net sales $ 233,715 $ 243,831
Cost of goods sold 151,076 157,262
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Gross profit 82,639 86,569
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Operating expenses:
Shipping 26,616 27,199
General and administrative 23,171 24,705
Selling and marketing 14,903 14,428
Other (income) expense, net (216) 423
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Total operating expenses 64,474 66,755
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Operating income 18,165 19,814
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Interest income, net 868 876
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Income before provision for income taxes 19,033 20,690
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Provision for income taxes 4,273 4,979
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Net income from continuing operations 14,760 15,711
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Gain from discontinued operations, net
of tax 1,011 542
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Net income $ 15,771 $ 16,253
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Basic earnings per share:
From continuing operations $ 4.59 $ 4.78
From discontinued operations 0.31 0.17
Basic earnings per share $ 4.90 $ 4.95
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