Adjusted Net Income More than Doubles to $9.1 Million or $2.73 per Share

BOCA RATON, FLORIDA — June 13, 2024 — Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today reported its consolidated results of operations for its full year ended February 29, 2024.

During fiscal 2024, QEP completed several strategic divestments to streamline operations and concentrate resources on its core product lines in the North American market. These divestments included the sale of our North American hard surface flooring business, which consisted of the Harris®, Kraus®, Naturally Aged FlooringTM and Heritage Mills® brands, as well as a wood flooring manufacturing facility in Johnson City, Tennessee. This was followed by the divestment of QEP’s businesses in the United Kingdom, Australia and New Zealand.

As of fiscal 2024, these divested operations have been classified as discontinued operations in our financial statements. Amounts for prior periods, including sales and operating income, have been reclassified to conform to this presentation.

QEP reported net sales of $252.0 million for the year ended February 29, 2024, a decrease of $17.5 million or 6.5% from the $269.5 million reported in fiscal 2023, which was primarily due to softening consumer demand across multiple product categories. To mitigate this impact, the Company is expanding its regional sales coverage in order to penetrate new and existing sales channels.

The Company’s gross profit for fiscal 2024 increased $8.8 million or 12.0% to $82.0 million, from $73.2 million in fiscal 2023. As a percentage of net sales, gross margin was 32.5% in fiscal 2024, as compared to 27.2% in fiscal 2023. The increase in gross margin as a percentage of net sales was largely due to lower inbound freight, improved product mix, and multiple cost-reduction and streamlining initiatives.

Leonard Gould, President & Chief Executive Officer, commented on the Company’s results, “I would like to personally thank all of our QEP associates for their noteworthy contributions which have enabled QEP to ‘return to its roots’ and fuel our ongoing transformation. The massive efforts underway to better serve our customers and our innovation/patent roadmap over the next few years makes me incredibly proud. Our retail and distribution partners are our lifeblood and together we continue to implement initiatives to drive volume and profitability of their QEP business. We are also grateful for the ongoing support of our vendor and banking partners.”

Lewis Gould, Executive Chairman, added, “We are pleased with our continuing transformation which has resulted in significant repayment of our debt and generated a healthy cash surplus. The Company has shared this success with its stockholders through two special dividends in 2024. We hope to continue to reward all of our stakeholders in concert with the Company’s success.”

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