Boca Raton, FL, Apr. 22--Q.E.P. Co., INC. today announced financial results for the fiscal 2004 fourth quarter and full year ended February 29, 2004.
For the fiscal 2004 fourth quarter, net sales were a quarterly record $37.5 million up 16.1 percent compared with $32.3 million for the same period last fiscal year.
Q.E.P. has recorded quarterly year-over-year increases in 22 of the last 24 periods. For fiscal 2004, net sales were up 10.8 percent to $143.3 million versus fiscal 2003 net sales of $129.3 million.
Included in the foregoing sales is a favorable effect from the change in foreign exchange rates of $1.3 million and $5.2 million, respectively for the fourth quarter and full year ended February 29, 2004. Net income was not materially affected by the foreign exchange rates for these periods.
Gross profit for the fourth quarter declined from 34.4 percent to 34.0 percent. This is a result of a slight change in the sales mix and an increase in costs of certain raw materials related to higher fuel costs and the weakened U.S. dollar. Gross profit for the fiscal 2004 and 2003 years was 34.3 percent.
Operating income for the fiscal 2004 fourth quarter approximated operating income for the same period last fiscal year. As a percentage of sales, shipping and selling and marketing costs for fiscal 2004 decreased from the comparable period last fiscal year. General and administrative costs increased 44 basis points as a percentage of sales predominantly as a result of increases in human resources. For fiscal 2004, operating income increased 3.9 percent to $7.5 million from fiscal 2003, while being impacted by a $617,000 charge taken in the first quarter for the early repayment of $4.5 million of subordinated debt. Excluding the first quarter charge, operating income for fiscal 2004 would have been nearly $8.1 million, an increase of 12.5 percent over the same period last year.
Interest expense for the fourth quarter, compared with the prior period, decreased by $142,000 as a result of the company's repayment of its subordinated debt facility and principal reduction in its senior debt.
For fiscal 2004, interest expense decreased 15.5 percent compared with fiscal 2003, notwithstanding a $270,000 prepayment penalty associated with the aforementioned repayment of the subordinated debt in the first quarter of the fiscal year.
The company's net income increased 18.7 percent for the fiscal 2004 fourth quarter to $1.0 million, or $0.29 per diluted share, compared with $881,000, or $0.26 per diluted share earned for the same quarter last fiscal year. For fiscal 2004, the company's net income was $3.5 million, or $0.99 per diluted share, compared with nearly $3.1 million, or $0.90 per diluted share before the $3.0 million cumulative effect of a change in accounting principle relating to impairment of goodwill for the comparable period last fiscal year. The weighted average number of shares for the fourth quarter and fiscal 2004 increased by 215,000 shares and 126,000 shares, respectively for the comparable quarter and last fiscal year.
For fiscal 2003, after the $3.0 million cumulative effect of a change in accounting principle relating to impairment of goodwill that took effect in the first quarter of fiscal 2003, the company reported net income of $8,000, or $0.01 per diluted share. Excluding the prepayment of the subordinated debt, net income for fiscal 2004 improved 31.6 percent to $4.0 million, or $1.15 per diluted share, compared with last fiscal year's nearly $3.1 million, or $0.90 per diluted share, excluding the cumulative effect of the change in accounting principle.
