Q.E.P. CO., INC. Amends Loan Agreement

Rhea-AI Summary

Q.E.P. Co., Inc. (OTCQX: QEPC) announced an amendment to its loan agreement with Bank of America, enhancing financial flexibility.

The amendment enables up to $10 million for facility upgrades and permits the sale of property in Apple Creek, Ohio for $1.45 million. Additionally, it adjusts the Fixed Charge Coverage Ratio requirements.

This agreement supports the company’s working capital needs and general corporate purposes, ensuring the continued pursuit of strategic priorities.

Positive

• Amendment allows up to $10 million for capital expenditures for facility upgrades.
• Permits property sale in Apple Creek, Ohio for $1.45 million, aiding operational restructuring.
• Provides up to $85 million in revolving credit for working capital.

Negative

• None.

Provides Additional Financial Flexibility to Pursue Strategic Priorities

BOCA RATON, Fla., Dec. 05, 2022 (GLOBE NEWSWIRE) -- Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) announced today that it entered into Amendment No. 3 (the “Amendment”) to the Fifth Amended and Restated Loan and Security Agreement, Waiver, Consent and Release dated February 15, 2021 (as amended, the “Loan Agreement”) with its 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 provides for certain changes to the Loan Agreement, including:

(i) Permitting capital expenditures up to $10,000,000 for upgrades and expansion of certain manufacturing and distribution facilities;
(ii) The disposition of real and personal property in Apple Creek, Ohio for $1,450,000 as part of the dissolution of the Company’s AC Products business; and
(iii) Adjusting the requirements for the Fixed Charge Coverage Ratio financial covenant.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment which is incorporated herein by reference to the Company Quarterly Report to be filed on or about January 15, 2023.

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), 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 is the recent loan amendment by Q.E.P. Co., Inc. (QEPC)?

Q.E.P. Co., Inc. announced an amendment to its loan agreement with Bank of America, allowing for additional financial flexibility, including up to $10 million for facility upgrades.

How much capital can Q.E.P. Co., Inc. access through its loan agreement?

Q.E.P. Co., Inc. can access up to $85 million in revolving credit availability for working capital and corporate purposes.

What property did Q.E.P. Co., Inc. sell as part of their restructuring efforts?

Q.E.P. Co., Inc. sold property in Apple Creek, Ohio for $1.45 million as part of the dissolution of its AC Products business.

What changes were made to the Fixed Charge Coverage Ratio in the loan amendment?

The amendment adjusted the requirements for the Fixed Charge Coverage Ratio financial covenant.