Q.E.P. Co. Inc. reports fiscal first quarter 2004 results

Net sales were $34.7 million compared with $31.2 million for the corresponding quarter last fiscal year -- an increase of 11 percent. Gross profit margin improved 109 basis points to 34.43 percent compared with 33.34 percent in the prior-year period.

Operating income for the fiscal 2004 first quarter was negatively impacted by a $617,000 charge relating to the company's early repayment of its $4.5 million of subordinated debt. Reported operating income was $1.4 million versus operating income of $1.7 million in last year's comparable period. Excluding the charge, operating income was $2.1 million during the quarter, up more than 20 percent from fiscal 2003.

Interest expense increased $268,000, reflecting a 6 percent, or $270,000, pre-payment penalty related to the aforementioned repayment of subordinated debt. Reported net income was $411,000, or $0.12 per share, compared with a reported net loss of $2.3 million, or $(0.68) per share, for the first quarter of the prior fiscal year. Last year's reported net loss included a $3.0 million charge related to the cumulative effect of a change in accounting principle.

The total after-tax effect of the repayment of the subordinated debt was $568,000, or $0.16 per share. Net income for the quarter on a comparable basis, excluding the prepayment, improved 37 percent, reaching $979,000 versus $714,000. Diluted net income per share, excluding unusual items, improved 33 percent to $0.28 versus $0.21 in last fiscal year's first quarter.