Q E P : Consolidated Financial Statements For the Nine Months Ended November 30, 2021 and 2020

Q.E.P. CO., INC. AND SUBSIDIARIES

Consolidated Financial Statements

For the Nine Months Ended November 30, 2021 and 2020

C O N T E N T S

	Page
Financial Statements
∙ Consolidated Balance Sheets	2
∙ Consolidated Statements of Operations	3
∙ Consolidated Statements of Comprehensive Income	4
∙ Consolidated Statements of Cash Flows	5
∙ Consolidated Statements of Shareholders' Equity	6-7
∙ Notes to Consolidated Financial Statements	8

Q.E.P. CO., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except par values)

	November 30,	February 28,
		2021			2021
	(Unaudited)		(Audited)
ASSETS
Cash	$	15,015		$	10,905
Accounts receivable, less allowance for doubtful accounts of $888
and $1,059 as of November 30, 2021 and February 28, 2021, respectively		52,959			53,183
Inventories		85,406			67,032
Prepaid expenses and other current assets		4,409			6,829
Prepaid income taxes		-			736
Current assets		157,789			138,685
Property and equipment, net		10,415			11,398
Right of use operating lease assets		16,447			16,417
Deferred income taxes, net		3,402			3,436
Intangibles, net		10,686			12,454
Goodwill		2,375			2,493
Other assets		3,333			2,840
Total Assets	$	204,447		$	187,723
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable	$	48,513		$	40,900
Accrued liabilities		26,220			23,475
Current operating lease liabilities		5,067			5,196
Income taxes payable		1,480			-
Lines of credit		21,754			21,010
Current maturities of notes payable		3,343			3,417
Current liabilities		106,377			93,998
Notes payable		7,519			9,438
Non-current operating lease liabilities		12,478			12,336
Deferred income taxes		172			172
Other long term liabilities		679			851
Total Liabilities		127,225			116,795
Preferred stock, 2,500 shares authorized, $1.00 par value; 0 shares
issued and outstanding at November 30, 2021 and February 28, 2021		-			-
Common stock, 20,000 shares authorized, $.001 par value;
4,005 shares issued, and 3,309 shares outstanding at
November 30, 2021 and February 28, 2021		4			4
Additional paid-in capital		11,251			11,251
Retained earnings		79,360			71,785
Treasury stock, 696 shares held at cost at November 30, 2021
and February 28, 2021		(9,082)			(9,082)
Accumulated other comprehensive income		(4,311)			(3,030)
Shareholders' Equity		77,222			70,928
Total Liabilities and Shareholders' Equity	$	204,447		$	187,723
The accompanying notes are an integral part of these financial statements.
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Q.E.P. CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

(Unaudited)

		For the Three Months Ended		For the Nine Months Ended
	November 30,	November 30,	November 30,	November 30,
		2021		2020		2021		2020
Net sales	$	111,942	$	98,941	$	339,211	$	288,008
Cost of goods sold		81,455		70,277		246,396		206,257
Gross profit		30,487		28,664		92,815		81,751
Operating expenses:
Shipping		12,248		11,544		37,461		32,516
General and administrative		7,467		6,897		22,453		20,858
Selling and marketing		6,723		6,687		21,524		18,780
Restructuring		1		301		58		1,110
Other income, net		(74)		(78)		(423)		(455)
Total operating expenses		26,365		25,351		81,073		72,809
Operating income		4,122		3,313		11,742		8,942
Interest expense, net		(343)		(391)		(993)		(1,254)
Income before provision for
income taxes		3,779		2,922		10,749		7,688
Provision for income taxes		1,058		818		3,009		2,153
Net income	$	2,721	$	2,104	$	7,740	$	5,535
Earnings per share:
Basic	$	0.82	$	0.63	$	2.32	$	1.66
Diluted	$	0.81	$	0.63	$	2.31	$	1.66
Weighted average number of
shares outstanding:
Basic		3,335		3,335		3,335		3,335
Diluted		3,344		3,343		3,345		3,338

The accompanying notes are an integral part of these financial statements.

3

Q.E.P. CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

		For the Three Months Ended		For the Nine Months Ended
	November 30,	November 30,	November 30,	November 30,
		2021		2020		2021		2020
Net income	$	2,721	$	2,104	$	7,740	$	5,535
Unrealized currency
translation adjustments		(612)		160		(1,281)		835
Comprehensive income	$	2,109	$	2,264	$	6,459	$	6,370

The accompanying notes are an integral part of these financial statements.

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