Q.E.P. reports third quarter revenue decline
Per-share results are adjusted to reflect the five-for-four stock split that was effected as a stock dividend and paid to shareholders on Aug. 1, 2000.
Tackless carpet strip sales contributed approximately $3.3 million to the Company's revenues in last year's third quarter. If revenues in the fiscal 2000 third quarter attributable to the sales of tackless carpet strip and the additional incentive in fiscal 2001 are disregarded, then revenues for the fiscal 2001 third quarter would have increased 9.5% from the fiscal 2000 third quarter.
The company has recorded an approximate $2 million charge in the fiscal 2001 third quarter related to: the payment of incentive monies to one of the company's major customers; expenses associated with the relocation of the company's California distribution facility to Henderson, NV; and payments required to be made under severance agreements as a result of the downsizing of Q.E.P.'s operations in Holland.
The company believes that it will realize long-term benefits from each of these charges, including increased market penetration and sales volume through the major customer to which the incentives were provided, rent reduction and tax savings in the Henderson facility, and payroll savings in Holland. Additional shipping, selling and interest costs and continuing losses in the company's international operations also negatively impacted financial performance in the fiscal 2001 third quarter.
Excluding the $2 million pre-tax special charge, net income for the fiscal 2001 third quarter was $440,000 compared with $775,000 for last year's third quarter and earnings per basic share were 13 cents compared with 23 cents last year. After the charge, the company incurred a net loss of $797,000 in the fiscal 2001 third quarter and a loss per basic share of 24 cents.
For the nine months ended Nov. 30, 2000, net sales were $86 million compared with the prior year's $84.5 million. Excluding the special charge, net income was unchanged from the prior year at $2.2 million. After the charge, Q.E.P.'s net income for the nine months was $1 million, and earnings per share were 29 cents compared with last year's 67 cents.