Q.E.P. Announces Preliminary 2005 Results and 2006
Boca Raton, FL, March 9--Q.E.P. announced selected preliminary results for its fiscal year ended February 28, 2005.
For fiscal 2005 sales increased nearly 20% to approximately $170 million from $143 million in the prior year. The improvement was the result of market share gains and contributions from domestic and foreign acquisitions consummated during the year.
The company's operating income, after tax, for the 2005 fiscal period is expected to be approximately $1 million less than anticipated. The shortfall was the result of a continuing erosion (particularly in the fourth quarter of fiscal 2005) in the company's gross margin due primarily to higher costs for raw materials, shipping and energy.
An approximate $1 million tax benefit associated with the recognition of certain accumulated international losses on its U.S. tax return for the fiscal 2005 year is expected to offset the operating income shortfall and result in net earnings after tax in the upper end of the range of $1.27 to $1.30 per share as previously estimated by the company.
For fiscal 2006, gross margins are anticipated to gradually improve as a result of a series of price increases that will become effective during the course of the year with the company's major customers. Sales for the fiscal 2006 period are estimated to grow by 20 percent and be in excess of $200 million.
Lewis Gould, Q.E.P.'s chairman and chief executive officer, stated: "The past fiscal year has been challenging because of unprecedented and consistently rising raw materials and shipping costs. We have a number of initiatives that will result in us obtaining higher prices for fiscal 2006, which will begin to improve our gross margins as we progress through the year. The company anticipates that its final fiscal 2005 fourth-quarter and full-year results will be released during the week of April 18, 2005 at which the time it will give full guidance for the fiscal 2006 period."
