insane dividends

[wzebra33]

Quality Products Announces Payment of a Special Dividend and Results For the Three and Six Months Ended March 31, 2011
05/11/2011 | 04:05 pm


Quality Products, Inc. (Pink Sheets: QPDC), a manufacturer and distributor of aircraft ground support equipment ("Columbus Jack & Regent Manufacturing") and hydraulic press machine tools ("Multipress"), today announced payment of a special dividend and reported fiscal 2011 second quarter and six months operating results.

SPECIAL DIVIDEND

The Company's board of directors has approved a special one-time dividend of $1.25 per share, or approximately $3,043,000. The special dividend will be payable on July 1, 2011, to shareholders of record on June 17, 2011 and the Company will use up to $3,000,000 of debt to fund this dividend with the remainder provided by existing cash.

QUARTERLY RESULTS

Net income was $1,520,459 compared to $1,444,312 earned last year, an increase of $76,147 or 5.3%. Revenues were $6,058,888 compared to $5,244,273 last year, an increase of $814,615 or 15.5%. The gross margin decreased to 43.1% this year from 48.6% last year. As with most manufacturers, our margins can vary significantly depending on product mix and pricing pressures in the marketplace. Due to these factors, we consider the range of 35 - 40% to be normal for gross margins.

Shipments in the Multipress segment were $821,988 compared to $777,825, an increase of $44,163 or 5.7%, and gross profit was $336,762 or 41.0% compared to $333,380 or 42.9%, an increase of $3,382 or 1.0%. Incoming orders were up by $447,233 or 57.4% compared to last year. Historically, the visibility of future business for this segment has rarely exceeded six months, making it difficult to predict long-term trends.

Shipments in the ground support equipment segment were $5,236,900 compared to $4,466,448 last year, an increase of $770,452 or 17.2%. Gross profit was $2,271,795 or 43.4% compared to $2,213,213 or 49.6% last year, an increase of $58,582 or 2.6%. However, incoming orders decreased by $(1,265,265) or (29.1)% compared to last year. A majority of this segment's business is with the U.S. government, so if defense spending is reduced it is likely this segment will be unfavorably impacted.

S G & A expenses were $883,079 or 14.6% of sales in the current quarter compared to $806,493 or 15.4% last year, an increase of $76,586 or 9.5%. This is primarily due to higher wages and benefits, higher consulting expenses, and higher public company expenses.

Other income in the latest quarter includes $671,000 of royalties for our joint participation in certain military contracts and approximately $33,000 of distributions and realized gains from our investments.

Income tax expense decreased by approximately $(27,000) primarily due to changes in estimates.

Basic and diluted EPS was $0.62, up from $0.42 and the weighted average shares outstanding decreased to 2,468,522 from 3,402,425.