Q.E.P. CO., INC. REPORTS FISCAL 2021 NINE MONTH AND THIRD QUARTER FINANCIAL RESULTS AND ANNOUNCES A 5 PERCENT SPECIAL STOCK DIVIDEND
BOCA RATON, FLORIDA — January 14, 2021 — Q.E.P. CO., INC. (OTC: QEPC.PK) (the “Company” or “QEP”) today reported its consolidated results of operations for the first nine months and third quarter of its fiscal year ending February 28, 2021 and announces a five percent special stock dividend.
QEP reported net sales of $288.0 million for the nine months ended November 30, 2020, a decrease of $11.1 million or 3.7% from the $299.1 million reported in the same period of fiscal 2020. The Company reported net sales of $98.9 million for the quarter ended November 30, 2020, an increase of $2.2 million or 2.3% from the $96.7 million reported in the same period of fiscal 2020. The fiscal 2021 nine month decline in sales compared to the prior year reflects the adverse impact of the worldwide economic downturn caused by the COVID-19 pandemic during the first quarter of the current year. All subsequent quarters reflect increased year-over-year net sales.
Lewis Gould, Executive Chairman, commented on the Company’s results, “I am pleased that the Company was able to generate sales growth for the second consecutive quarter, which has further offset the sales decline in the first quarter that was the results of the COVID-19 related economic downturn. The sales increase during the previous two quarters was driven by retail channels in North America, despite COVID-19 related challenges in the dealer and distributor channels, and growth in the Company’s overseas operations. During the quarter, the Company continued to maintain aggressive cost control measures, which included lower personnel cost, along with reduced overhead and marketing expenses. Collectively, these actions resulted in the Company’s increased profitability during the quarter and for the first nine months of the year.”
Mr. Gould concluded, “The Company is diligently monitoring and adjusting its response not only to the COVID-19 pandemic, but also to the challenges presented by the weakening U.S. Dollar, shifts in global sourcing patterns and political uncertainty in the U.S. and U.K. I believe that the Company under the current leadership team is emerging from the current crisis better positioned for long-term profitability and the creation of sustainable shareholder value.”
The Company’s gross profit for the first nine months of fiscal 2021 was $81.8 million compared to $79.5 million in the corresponding fiscal 2020 period, an increase of $2.3 million or 2.8%. Gross profit for the third quarter of fiscal 2021 was $28.7 million, representing an increase of $2.2 million or 8.2%, from $26.5 million in the fiscal 2020 period. The Company’s gross margin as a percentage of net sales for the first nine months and third quarter of fiscal year 2021 was 28.4% and 29.0%, respectively, which increased from 26.6% and 27.4% in the prior fiscal year periods, respectively. The gross margin as a percentage of net sales improvement is due to favorable changes in product mix and timely actions taken by the Company to reduce manufacturing overhead during the first nine months and third quarter of fiscal 2021.