Q.E.P. reported its consolidated results of operations for the first nine months and third quarter of its fiscal year ending February 29, 2016.
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The company reported net sales of $237.4 million for the nine months ended November 30, 2015, an increase of $6.1 million or 2.6% from the $231.3 million reported in the same period of fiscal 2015.
As a percentage of net sales, gross margin was 26.7% in the first nine months of fiscal 2016 compared to 27.4% in the first nine months of fiscal 2015.
Net sales for the third quarter of fiscal 2016 were $77.5 million and reflected a gross margin of 25.9% compared to net sales of $74.6 million and a gross margin of 27.5% for the third quarter of fiscal 2015.
Operating expenses for the first nine months and third quarter of fiscal 2016 were $55.9 million and $18.5 million, respectively, or 23.5% and 23.9% of net sales in those periods, compared to $59.1 million and $19.4 million, respectively, or 25.5% and 25.9% of net sales in the comparable fiscal 2015 periods.
The decrease in operating expenses was driven by targeted decreases in US marketing costs and the favorable translation impact of foreign currency movements.
The decrease in interest expense during fiscal 2016 as compared to fiscal 2015 is principally the result of the repayment of $7.2 million outstanding under term loan facilities during fiscal 2016.
The provision for income taxes as a percentage of income before taxes for the first nine months and third quarter of fiscal 2016 was 35.0% in each period, compared to 33.2% and 36.0%, respectively, for the comparable periods of fiscal 2015. The effective tax rate in both fiscal years reflects the relative contribution of the company’s earnings sourced from its international operations.
The effective tax rate in fiscal 2015 also reflects the second quarter benefit of certain employment related US state income tax credits.
Net income for the first nine months and third quarter of fiscal 2016 was $4.3 million and $0.9 million, respectively, or $1.34 and $0.26, respectively, per diluted share. For the comparable periods of fiscal 2015, net income was $2.1 million and $0.5 million, respectively, or $0.65 and $0.16, respectively, per diluted share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) and non-operating income for the first nine months and third quarter of fiscal 2016 was $10.8 million and $2.7 million, respectively, as compared to $8.2 million and $2.5 million, respectively, for the comparable periods of fiscal 2015. ■