BOCA RATON, Fla., July 15, 2026 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today reported financial results for its first quarter ended May 31, 2026.

Net sales for the quarter ended May 31, 2026 were $61.0 million, down $0.5 million or 0.9% from $61.5 million for the first quarter of fiscal 2026. The slight decline in net sales was primarily due to lower sales in the Company’s non-core powder business. Despite continued weakness in home improvement spending amid elevated interest rates, inflationary pressures, and broader macroeconomic and geopolitical uncertainties, retail channel sales remained flat and distribution channel sales increased during the current period.

Gross profit for the first quarter of fiscal 2027 was $21.8 million, compared to $22.7 million in the prior-year period, a decrease of $0.9 million or 4.1%. As a percentage of net sales, gross margin was 35.7% in the first quarter of fiscal 2027, compared to 36.9% in the first quarter of fiscal 2026. Gross margin during the first quarter of fiscal 2027 reflects higher tariff costs and ongoing inflationary pressures. By comparison, the prior-year period benefited from inventory purchased before the implementation of tariffs.

Operating expenses for the first quarter of fiscal 2027 were $16.5 million, or 27.0% of net sales, compared to $16.9 million, or 27.4% of net sales for the first quarter of fiscal 2026. Operating expenses for the first quarter of fiscal 2027 reflect higher outbound freight costs, driven by increased fuel charges, together with continued investment in sales and marketing infrastructure. Other income during the quarter included approximately $1.0 million of cash refunds received from U.S. Customs and Border Protection related to tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA").

Operating income for the first quarter of fiscal 2027 was $5.3 million, compared to $5.8 million for the comparable period in fiscal 2026.

Interest income, net, was $0.2 million for the first quarter of both fiscal 2027 and fiscal 2026.

The provision for income taxes as a percentage of income before taxes was 26% for the first quarter of fiscal 2027, unchanged from the prior-year period.

Net income for the first quarter of fiscal 2027 was $4.0 million, or $1.33 per diluted share, compared to $4.4 million, or $1.36 per diluted share, for the first quarter of fiscal 2026.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of fiscal 2027 was $5.8 million, or 9.4% of net sales, compared to $6.1 million, or 10.0% of net sales, for the first quarter of fiscal 2026. A reconciliation of adjusted EBITDA, a non-GAAP financial measure, to net income from continuing operations is included in this press release.

Cash provided by operating activities during the first quarter of fiscal 2027 was $6.0 million, compared to $2.6 million in the first quarter of fiscal 2026, driven by favorable working capital management that provided cash during the current period versus a use of cash in the prior-year period. In the first quarter of fiscal 2027, the Company used cash generated from operations, supplemented by existing cash balances, to repurchase shares of common stock, pay dividends and fund capital expenditures.

As of May 31, 2026, working capital was $71.6 million, compared to $75.5 million as of February 28, 2026. After significant share repurchases during the period, the Company ended the first quarter of fiscal 2027 with a net cash position of $32.0 million, compared to $34.1 million at February 28, 2026.

Len Gould, President & Chief Executive Officer, commented, "I want to thank our 345 QEP Associates who each contributed to the strong first-quarter performance, despite declining consumer confidence and ongoing policy uncertainty. Order reliability and delivery certainty are more important than ever, especially for our customers serving the professional market. We remain committed to our strategy of being the ‘Absolute Product Authority’, supported by bulletproof delivery execution and best-in-class technical support. By shipping customer orders nearly 100% complete and on time, QEP earned the distinction of being named an ‘Industry Disrupter’ by Floor Covering News (March 16, 2026). While we're proud of these results, we're even more excited about the opportunities ahead as we continue to lean into our plan and strengthen our leadership position in the industry.”

Mr. Gould added, “Our balance sheet remains a fundamental strength of the Company, providing the financial flexibility to navigate ongoing uncertainty while continuing to return capital to shareholders through regular dividends and the repurchase of approximately $7.0 million of common stock from minority shareholders during the quarter.”

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^®, Premix-Marbletite^® (PMM), Brutus^® and Homelux^®.

QEP is headquartered in Boca Raton, Florida and has operations in the United States, Canada and Asia. Additional information is available at www.qepcorporate.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, trade policies and uncertainty relating to the potential recovery of certain tariffs previously paid under the International Emergency Economic Powers Act (“IEEPA”) including tariffs affecting goods imported from China and Vietnam; 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 completion of divestitures; 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.

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