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

Rhea-AI Summary

Q.E.P. CO. (OTCQX: QEPC) reported fiscal 2026 nine-month and third-quarter results for the period ended November 30, 2025. Nine-month net sales were $178.3M (down 4.7% YoY) and Q3 net sales were $59.1M (down 3.2% YoY). Nine-month net income from continuing operations was $11.5M or $3.53 diluted EPS; Q3 net income was $3.5M or $1.08 diluted EPS. Adjusted EBITDA was $16.0M (9.0% of sales) for nine months and $4.9M (8.3%) for Q3. Cash provided by operations was $15.8M YTD; aggregate available cash/net of debt rose to $36.1M. Management cited consumer uncertainty and housing pressure while reiterating capital returns to shareholders.

Positive

• Aggregate available cash, net of debt increased to $36.1M (from $28.4M)

Negative

• Third-quarter adjusted EBITDA declined 24.5% to $4.9M versus prior-year quarter
• Third-quarter net income from continuing operations declined 24.7% to $3.5M versus prior-year quarter

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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

FAQ

What were Q.E.P. (QEPC) nine-month net sales for fiscal 2026 and how did they compare to fiscal 2025?

Nine-month net sales were $178.3M, a 4.7% decline from $187.2M in the prior-year period.

How much did Q.E.P. (QEPC) report for adjusted EBITDA in Q3 fiscal 2026 and what was the margin?

Q3 adjusted EBITDA was $4.9M, representing an 8.3% EBITDA margin of Q3 net sales.

What was Q.E.P. (QEPC) net income per diluted share for the nine months and Q3 of fiscal 2026?

Nine-month diluted EPS was $3.53; Q3 diluted EPS was $1.08 from continuing operations.

Did Q.E.P. (QEPC) report any change in cash or liquidity as of November 30, 2025?

Yes. Aggregate available cash, net of outstanding debt, was $36.1M, up from $28.4M at fiscal-year end.

What factors did Q.E.P. (QEPC) cite for weaker sales in fiscal 2026 Q3?

Management cited consumer uncertainty, continued pressure on home improvement spending, and elevated interest rates.