BOCA RATON, Fla., Oct. 15, 2026 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today reported financial results for the first six months and second quarter of fiscal year 2027, which ended on August 31, 2026.

Net sales for the six months ended August 31, 2026 were $122.0 million, up $2.8 million or 2.4% from $119.2 million reported in the same period of fiscal 2026. Net sales for the second quarter ended August 31, 2026 were $61.1 million, up $3.4 million or 5.9% from $57.7 million reported in the second quarter of fiscal 2026. Sales growth was driven by continued expansion in the professional distribution channel, particularly in adhesive products, and successful retail initiatives, despite a challenging macroeconomic environment.

Len Gould, President & Chief Executive Officer, commented, "Our fiscal 2027 results highlight the resonance of our Brands with the Professional Installer, and the resilience of our core business in the face of a challenging macroeconomic landscape. Our continuing investment in U.S.-based manufacturing, together with our laser focus on innovation and service, is supporting improved sales momentum. Notwithstanding the current economic headwinds, we continue to push forward with multiple initiatives to expand our market penetration and strengthen our product portfolio.”

Mr. Gould added, “Our financial strength provides a solid foundation during uncertain times and allows us to return capital to stockholders through regular quarterly cash dividends and stock repurchases of $9.2 million during the first six months of fiscal 2027. Lastly, I would like to thank QEP’s Associates for their hard work and incredible commitment to our customers.”

Gross profit for the first six months of fiscal 2027 was $42.7 million compared to $43.3 million in the corresponding fiscal 2026 period, down $0.6 million or 1.4%. Gross profit for the second quarter of fiscal 2027 was $20.9 million compared to $20.6 million for the second quarter of fiscal 2026, up $0.3 million or 1.5%. As a percentage of net sales, gross margin for the first six months and second quarter of fiscal 2027 was 35.0% and 34.2%, respectively, down from 36.3% and 35.7% in the same periods of the prior fiscal year. The decline in gross margins during the current fiscal year reflects the continued impact of higher tariff costs combined with more recent increases in fuel and other input costs. By comparison, the prior-year periods benefited from inventory purchased before the implementation of tariffs. Refunds of tariffs previously paid under the International Emergency Economic Powers Act (“IEEPA”) were recognized in other income within operating expenses and did not affect reported gross profit or gross margins.

Operating expenses totaled $30.0 million and $13.5 million for the first six months and second quarter of fiscal 2027, respectively, or 24.6% and 22.1% of net sales in those periods, compared to $32.9 million and $16.0 million, respectively, or 27.6% and 27.8% of net sales in the comparable fiscal 2026 periods. Other income, within operating expenses, includes $5.7 million and $4.8 million, respectively, of IEEPA tariff refunds previously paid and recognized as expense. Excluding these refunds, operating expenses increased compared with the prior-year periods, primarily due to higher shipping, general and administrative, and selling and marketing expenses.

Interest income was $0.7 million and $0.5 million for the first six months and second quarter of fiscal 2027, compared to $0.4 million and $0.2 million for the comparable fiscal 2026 periods. Included in both current year periods were $0.3 million in interest income related to the IEEPA tariff refunds.

The provision for income taxes as a percentage of income before taxes was 26.0% for all periods presented.

Net income from continuing operations for the first six months and second quarter of fiscal 2027 was $9.9 million and $5.8 million, respectively, or $3.29 and $1.97, respectively, per diluted share. For the comparable periods of fiscal 2026, net income from continuing operations was $8.0 million and $3.5 million, respectively, or $2.45 and $1.09, respectively, per diluted share.

Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the first six months and second quarter of fiscal 2027 were $13.6 million and $7.9 million, respectively, or 11.2% and 12.9% of net sales. This compares to EBITDA of $11.1 million and $5.0 million, or 9.3% and 8.6% of net sales for the corresponding periods of fiscal 2026. Fiscal 2027 EBITDA includes refunds of IEEPA tariffs previously paid and recognized as expenses of $5.7 million for the first six months and $4.8 million for the second quarter. Management does not expect these refunds to be indicative of ongoing operating results.

  For the Three Months Ended  For the Six Months Ended
  August 31,
2026		 August 31,
2025		 August 31,
2026		 August 31,
2025
         
Net income from continuing operations$5,848  $3,538  $9,896  $7,982 
         
Add:Interest income, net (512)  (240)  (699)  (417)
 Provision for income taxes 2,055   1,244   3,477   2,805 
 Depreciation and amortization 472   439   941   807 
 Gain on sale of businesses -   -   -   (71)
EBITDA$7,863  $4,981  $13,615  $11,106 
                

Cash provided by operations during the first six months of fiscal 2027 was $17.3 million, compared to $8.8 million in the first six months of fiscal 2026, reflecting the receipt of IEEPA tariff refunds and higher trade payables and accrued liabilities. In the first six months of fiscal 2027, the Company used cash generated from operations to repurchase shares of common stock, pay dividends, fund capital expenditures and increase available cash.

As of August 31, 2026, working capital remained stable at $74.7 million, compared to $75.5 million as of February 28, 2026. The Company ended the second quarter of fiscal 2027 with a net cash position of $40.1 million, compared to $34.1 million as of February 28, 2026.

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®, LASH®, ROBERTS®, Capitol®, Spray-Lock®, Premix-Marbletite® (PMM), Brutus® and Homelux®.

QEP is headquartered in Boca Raton, Florida with other operations in the United States, Canada and Asia. Additional information is available at www.qep.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 and trade policies; 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 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.

CONTACT:
Q.E.P. Co., Inc.
Enos Brown
Executive Vice President and
Chief Financial Officer
561-994-5550

-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 Six Months Ended
  August 31, August 31, August 31, August 31,
   2026   2025   2026   2025 
         
 Net sales$61,050  $57,663  $122,005  $119,191 
 Cost of goods sold 40,154   37,072   79,357   75,922 
 Gross profit 20,896   20,591   42,648   43,269 
         
 Operating expenses:       
      Shipping 7,204   6,653   14,142   13,528 
      General and administrative 7,372   6,012   13,428   12,178 
      Selling and marketing 3,669   3,431   8,149   7,357 
      Other (income) expense, net (4,740)  (47)  (5,745)  (164)
      Total operating expenses 13,505   16,049   29,974   32,899 
         
 Operating income 7,391   4,542   12,674   10,370 
         
 Interest income, net 512   240   699   417 
         
 Income before provision for income taxes 7,903   4,782   13,373   10,787 
         
 Provision for income taxes 2,055   1,244   3,477   2,805 
         
 Net income from continuing operations operations 5,848   3,538   9,896   7,982 
         
 Gain from discontinued operations, net of tax -   300   -   300 
         
 Net income$ 5,848  $ 3,838  $ 9,896  $ 8,282 
         
 Basic earnings per share:       
     From continuing operations$1.97  $1.09  $3.29  $2.45 
     From discontinued operations -   0.09   -   0.09 
 Basic earnings per share$ 1.97  $ 1.18  $ 3.29  $ 2.54 
         
 Diluted earnings per share:       
     From continuing operations$1.97  $1.09  $3.29  $2.45 
     From discontinued operations -   0.09   -   0.09 
 Diluted earnings per share$ 1.97  $ 1.18  $ 3.29  $ 2.54 
         
 Weighted average number of common       
      shares outstanding:       
      Basic 2,967   3,255   3,011   3,256 
      Diluted 2,967   3,255   3,011   3,256 
         


Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)
    
 August 31, 2026 February 28, 2026
 (Unaudited) (Audited)
    
ASSETS   
Cash$40,136  $34,092 
Accounts receivable, less allowance for credit losses of $71 and   
     $63 at August 31, 2026 and February 28, 2026, respectively 29,195   29,154 
Inventories, net 33,285   33,324 
Prepaid expenses and other current assets 2,215   2,680 
Prepaid income taxes -   2,424 
Current assets 104,831   101,674 
    
Property and equipment, net 14,316   14,245 
Right of use operating lease assets 20,297   19,614 
Deferred income taxes, net 834   834 
Other assets 965   975 
Total assets$ 141,243  $ 137,342 
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
    
Trade accounts payable$12,202  $10,569 
Accrued liabilities 14,918   12,855 
Current operating lease liabilities 2,752   2,775 
Income taxes payable 199   - 
Lines of credit 70   11 
Current maturities of debt 9   14 
Current liabilities 30,150   26,224 
    
Long-term debt 5   7 
Non-current operating lease liabilities 19,634   18,970 
Other long-term liabilities 422   437 
Total liabilities 50,211   45,638 
    
Preferred stock, 2,500 shares authorized, $1.00 par value; 0 shares   
     issued and outstanding at August 31, 2026 and February 28, 2026, -   - 
     respectively   
Common stock, 20,000 shares authorized, $.001 par value;   
     4,005 shares issued: 2,940 and 3,133 shares outstanding at   
     August 31, 2026 and February 28, 2026, respectively 4   4 
Additional paid-in capital 10,361   10,361 
Retained earnings 107,313   98,741 
Treasury stock, 1,065 and 872 shares held at cost at August 31, 2026   
     and February 28, 2026, respectively (24,202)  (15,033)
Accumulated other comprehensive income (2,444)  (2,369)
Shareholders' equity 91,032   91,704 
Total liabilities and shareholders' equity$ 141,243  $ 137,342 
    


Q.E.P. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
    
 For the Six Months Ended
 August 31, 2026 August 31, 2025
    
Operating activities:   
Net income$9,896  $8,282 
Adjustments to reconcile net income to net cash   
   provided by (used in) operating activities:   
     Depreciation and amortization 941   807 
     Gain on disposal of businesses -   (476)
     Gain on sale of property (1)  (4)
     Other non-cash adjustments 32   (153)
Changes in assets and liabilities:   
     Accounts receivable (91)  1,833 
     Inventories (11)  3,829 
     Prepaid expenses and other assets 1,620   1,688 
     Trade accounts payable and accrued liabilities 4,954   (7,034)
Net cash provided by operating activities 17,340   8,772 
    
Investing activities:   
     Capital expenditures (1,037)  (2,392)
     Proceeds from sale of businesses -   1,374 
     Proceeds from sale of property 1   4 
     Note Receivable 197   - 
Net cash used in investing activities (839)  (1,014)
    
Financing activities:   
     Net repayments under lines of credit 59   (70)
     Purchase of treasury stock (9,169)  (565)
     Principal payments on finance leases (7)  (5)
     Dividends paid (1,324)  (1,298)
Net cash used in financing activities (10,441)  (1,938)
    
Effect of exchange rate changes on cash (16)  (5)
    
Net increase in cash 6,044   5,815 
     Cash at beginning of period 34,092   28,552 
Cash at end of period$ 40,136  $ 34,367 
    


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 shareholders' equity for the six months ended August 31, 2026 and 2025.    
                  
               Accumulated  
           Other Total
 Preferred Stock Common Stock Paid-in Retained Treasury Comprehensive Shareholders'
 Shares Amount Shares AmountCapital 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           8,282       8,282 
Unrealized currency translation adjustments              209   209 
Purchase of treasury stock             (528)    (528)
Dividends paid           (1,298)      (1,298)
Balance at August 31, 2025- $ - 4,005,370 $ 4 $ 10,361 $ 92,528  $ (10,905) $ (2,391) $ 89,597 
                  
               Accumulated  
           Other Total
 Preferred Stock Common Stock Paid-in Retained Treasury Comprehensive Shareholders'
 Shares Amount Shares AmountCapital Earnings Stock Income Equity
                  
Balance at February 28, 2026- $ - 4,005,370 $ 4 $ 10,361 $ 98,741  $ (15,033) $ (2,369) $ 91,704 
Net income           9,896       9,896 
Unrealized currency translation adjustments              (75)  (75)
Purchase of treasury stock             (9,169)    (9,169)
Dividends paid           (1,324)      (1,324)
Balance at August 31, 2026- $ - 4,005,370 $ 4 $ 10,361 $ 107,313  $ (24,202) $ (2,444) $ 91,032