Q.E.P. Co., Inc. Amends Loan and Security Agreement

Rhea-AI Summary

Q.E.P. Co., Inc. (OTCQX: QEPC) has announced an amendment to its Loan Agreement with Bank of America, extending the maturity date to November 22, 2026, while providing up to $85 million in revolving credit. Key changes include the addition of Q.E.P. Australia as a secured borrower, relaxed customer concentration limits, and updated covenant requirements. The amendment also transitions from LIBOR to alternative interest rates and reduces the pricing floor, enhancing financial flexibility for the Company.

Positive

• Extension of the Loan Agreement maturity until November 22, 2026.
• Inclusion of Q.E.P. Australia as a secured borrower enhances credit access.
• Relaxed customer concentration limits and modified covenant requirements improve operational flexibility.
• Transition from LIBOR to alternative reference rates may reduce financing costs.

Negative

• None.

Provides additional financial flexibility and adds Australian subsidiary as a borrower

BOCA RATON, Fla., Nov. 30, 2021 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today announced that it has entered into a second amendment (the “Amendment”) of the Fifth Amended and Restated Loan and Security Agreement dated February 15, 2021 (as amended, the “Loan Agreement”) with its longstanding lending institution, Bank of America, N.A.

The Loan Agreement continues to provide QEP and certain of its subsidiaries with up to $85,000,000 in revolving credit availability for its working capital needs and other general corporate purposes.

The Amendment (i) extends the maturity date of the Loan Agreement from October 5, 2023 to November 22, 2026; (ii) adds Q.E.P. Australia Pty. Limited, the Company’s wholly-owned Australian operating subsidiary, as a new secured borrower; (iii) relaxes customer concentration limits and modifies certain covenant requirements to testing on a consolidated basis; (iv) reloads and resets the amortization of existing FILO loans; (v) provides for the transition from LIBOR to alternative reference interest rates; and (vi) reduces the pricing floor. All other material terms and conditions of the Loan Agreement remained unchanged.

About QEP

Founded in 1979, Q.E.P. Co., Inc. is a leading designer, manufacturer and distributor of a broad range of best-in-class flooring and installation solutions for commercial and home improvement projects worldwide. QEP offers a comprehensive line of specialty installation tools, adhesives, and underlayment as well as a complete line of hardwood, luxury vinyl, and modular carpet tile. QEP sells its products throughout the world to home improvement retailers, professional specialty distribution outlets, and flooring dealers under brand names including QEP^®, LASH^®, ROBERTS^®, Vitrex^®, Brutus^®, PRCI^®, Plasplugs^®, Tomecanic^®, Premix-Marbletite^® (PMM), Apple Creek^®, Homelux^®, Capitol^® and XPS Foam™. Brand names featured under QEP’s Harris Flooring Group^® include Harris^®, Kraus^® and Naturally Aged Flooring™.

QEP is headquartered in Boca Raton, Florida with offices in Canada, Europe, Asia, Australia and New Zealand. Please visit our website at www.qepcorporate.com.

Forward-Looking Statements

This press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release, other than statements of historical facts, may constitute forward-looking statements within the meaning of the federal securities laws. These statements can be identified by words such as "expects," "plans," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding access to liquidity and financial flexibility. Any forward-looking statements contained herein are based on current expectations and beliefs, and are subject to a number of risks and uncertainties. Forward-looking statements may also be adversely affected by general market factors, federal and state regulations and legislation, manufacturing issues that may arise, patent positions and litigation, among other factors. The forward-looking statements contained in this press release speak only as of the date the statements were made, and the Company does not undertake any obligation to update forward-looking statements, except as required by law.

CONTACT:
Q.E.P. Co., Inc.
Enos Brown
Executive Vice President and
Chief Financial Officer
561-994-5550

FAQ

What recent financial amendment did Q.E.P. Co., Inc. make?

Q.E.P. Co., Inc. amended its Loan Agreement with Bank of America, extending the maturity to November 22, 2026.

How much credit is available to Q.E.P. Co., Inc. under the new Loan Agreement?

The amended Loan Agreement provides Q.E.P. Co., Inc. with up to $85 million in revolving credit.

What is the significance of adding Q.E.P. Australia as a borrower?

Adding Q.E.P. Australia as a borrower enhances the Company's financial flexibility and access to credit.

What changes were made to customer concentration limits in Q.E.P.'s Loan Agreement?

The amendment relaxes customer concentration limits, giving Q.E.P. more operational flexibility.