Q.E.P. CO., INC. REPORTS FISCAL 2024 NINE MONTH AND THIRD QUARTER FINANCIAL RESULTS DECLARES SPECIAL DIVIDEND OF $1.00 PER SHARE
BOCA RATON, FLORIDA — January 16, 2024 — 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 its fiscal year 2024, which ended on November 30, 2023, and announced the declaration of a special dividend.
Results of Operations
During the third quarter of fiscal 2024, QEP successfully completed the divestment of its North American flooring businesses and its UK operations. As of the third quarter, these businesses are now classified as discontinued operations. Amounts for prior periods, including sales and operating income, have been reclassified to conform to this presentation.
QEP reported net sales of $233.1 million for the nine months ended November 30, 2023, a decrease of $23.8 million or 9.3% from the $256.9 million reported in the same period of fiscal 2023. The Company reported net sales of $74.6 million for the quarter ended November 30, 2023, which was comparable to the $74.5 million reported in the same period of fiscal 2023. The decrease in net sales was primarily due to a general softening in consumer demand in the domestic and international segments as well as the currency translation impact of the stronger U.S. Dollar in the current period.
The Company’s gross profit for the first nine months of fiscal 2024 was $74.3 million compared to $69.4 million in the corresponding fiscal 2023 period, an increase of $4.9 million or 7.0%. Gross profit for the third quarter of fiscal 2024 was $24.4 million, representing an increase of $3.7 million or 18.0%, from $20.7 million in the corresponding fiscal 2023 period. The Company’s gross margin as a percentage of net sales for the first nine months and third quarter of fiscal 2024 was 31.9% and 32.7%, respectively, which increased from 27.0% and 27.8% in the corresponding prior fiscal year periods, respectively. The increase in gross margin as a percentage of net sales was largely due to lower inbound freight costs.
Lewis Gould, Executive Chairman, commented on the Company’s results, “The third quarter was highlighted by significant progress in the ongoing realignment of the Company’s focus on its market leadership in flooring installation tools and accessories. During the quarter, we successfully completed the exit from our North American flooring product lines and divested our UK operations. Proceeds from these transactions have positioned the Company to become debt-free by fiscal year-end, with a healthy cash balance.”
Leonard Gould, President & Chief Executive Officer, added, “This strategic transformation allows the Company to intensify our focus on the innovation and expansion of our best-in-class product offerings to our diverse customer base, offsetting the softer consumer demand caused by the current macroeconomic backdrop of higher inflation and higher cost of borrowing.”