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Share Name | Share Symbol | Market | Type |
---|---|---|---|
WD 40 Company | NASDAQ:WDFC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 267.01 | 175.00 | 267.00 | 0 | 09:00:00 |
~ Global net sales grew 9 percent in the third quarter compared to the prior year fiscal quarter ~
~ Management reiterates fiscal year 2024 guidance ~
WD-40 Company (NASDAQ:WDFC), a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world, today reported financial results for its third fiscal quarter ended May 31, 2024.
Third Quarter Highlights and Summary:
“We delivered another strong quarter with record sales driven by robust volume growth across all three of our trade blocs,” said Steve Brass, WD-40 Company’s president and chief executive officer. “Our maintenance product sales achieved impressive growth of over 10 percent for both the third quarter and year-to-date, aligning with our established long-term growth objectives. Additionally, we made significant progress across all four of our Must-Win Battles, including experiencing a strong start in our newest direct market, Brazil. Overall, we are satisfied with our performance and remain confident in our ability to consistently deliver sustainable, profitable growth,” concluded Brass.
Net Sales by Segment (in thousands):
Three Months Ended May 31,
Nine Months Ended May 31,
2024
2023
Dollars
Change
2024
2023
Dollars
Change
Americas (1)
$
75,103
$
71,130
$
3,973
6
%
$
202,685
$
192,034
$
10,651
6
%
EIMEA (2)
59,399
52,524
6,875
13
%
162,466
140,105
22,361
16
%
Asia-Pacific (3)
20,543
18,063
2,480
14
%
69,415
64,664
4,751
7
%
Total
$
155,045
$
141,717
$
13,328
9
%
$
434,566
$
396,803
$
37,763
10
%
Third Quarter Highlights by Segment:
Americas
EIMEA
Asia-Pacific
Net Sales by Product Group (in thousands):
Three Months Ended May 31,
Nine Months Ended May 31,
2024
2023
Dollars
Change
2024
2023
Dollars
Change
WD-40 Multi-Use Product
$
119,053
$
107,151
$
11,902
11
%
$
333,964
$
302,000
$
31,964
11
%
WD-40 Specialist
20,224
17,886
2,338
13
%
53,883
48,566
5,317
11
%
Other maintenance products (5)
7,885
8,288
(403
)
(5
)%
22,699
21,175
1,524
7
%
Total maintenance products
147,162
133,325
13,837
10
%
410,546
371,741
38,805
10
%
HCCP (6)
7,883
8,392
(509
)
(6
)%
24,020
25,062
(1,042
)
(4
)%
Total
$
155,045
$
141,717
$
13,328
9
%
$
434,566
$
396,803
$
37,763
10
%
Dividend and Share Repurchase Update
Reiterated Fiscal Year 2024 Guidance
The Company reiterated its guidance for fiscal year 2024:
“We continue to make progress on the divestiture of the U.S. and U.K. homecare and cleaning product portfolios. We have engaged an investment bank and they are currently in discussions with potential suitors on our behalf. In addition, we have made significant progress on gross margin this fiscal year and continue to move closer to our 55 percent target,” said Sara Hyzer, WD-40 Company’s vice president, finance and chief financial officer. “We remain on track to meet our fiscal year 2024 guidance but we are currently projecting that we will end the fiscal year closer to the upper end of our range for gross margin.”
This guidance is expressed in good faith and is based on management’s current view of anticipated results. Unanticipated inflationary headwinds and other unforeseen events may further affect the Company’s financial results. Net sales presented on a non-GAAP constant currency basis use weighted average fiscal year 2023 foreign currency exchange rates.
Webcast Information
As previously announced, WD-40 Company management will host a live webcast at approximately 2:00 p.m. PDT today to discuss these results. Other forward-looking and material information may also be discussed during this call. Please visit http://investor.wd40company.com for more information and to view supporting materials.
About WD-40 Company
WD-40 Company is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories, and homes around the world. The Company owns a wide range of well-known brands that include maintenance products and homecare and cleaning products: WD-40® Multi-Use Product, WD-40 Specialist®, 3-IN-ONE®, GT85®, 2000 Flushes®, no vac®, 1001®, Spot Shot®, Lava®, Solvol®, X-14®, and Carpet Fresh®.
Headquartered in San Diego, California, USA, WD-40 Company recorded net sales of $537.3 million in fiscal year 2023 and its products are currently available in more than 176 countries and territories worldwide. WD-40 Company is traded on the NASDAQ Global Select Market under the ticker symbol “WDFC.” For additional information about WD-40 Company please visit http://www.wd40company.com.
Forward-Looking Statements
Except for the historical information contained herein, this press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect the Company’s current expectations with respect to currently available operating, financial and economic information. These forward-looking statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated in or implied by the forward-looking statements. These forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “project,” “could,” “may,” “aim,” “anticipate,” “target,” “estimate” and similar expressions.
Our forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: expected benefits from the acquisition transaction; acquired business not performing as expected; assuming unexpected risks, liabilities and obligations of the acquired business; disruption to the parties’ business as a result of the announcement and acquisition transaction; integration of acquired business and operations into the company; growth expectations for maintenance products; expected levels of promotional and advertising spending; anticipated input costs for manufacturing and the costs associated with distribution of our products; plans for and success of product innovation; the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; expected tax rates and the impact of tax legislation and regulatory action; changes in the political conditions or relations between the United States and other nations; the impacts from inflationary trends and supply chain constraints; changes in interest rates; and forecasted foreign currency exchange rates and commodity prices.
The Company’s expectations, beliefs and forecasts are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that the Company’s expectations, beliefs or forecasts will be achieved or accomplished. All forward-looking statements reflect the Company’s expectations as of July 10, 2024. We undertake no obligation to revise or update any forward-looking statements.
Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I—Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2023 which the Company filed with the SEC on October 23, 2023, and in the Company’s Quarterly Report on Form 10-Q for the period ended May 31, 2024, which the Company expects to file with the SEC on July 10, 2024.
Table Notes and General Definitions
(1)
The Americas segment consists of the U.S., Canada and Latin America.
(2)
The EIMEA segment consists of countries in Europe, India, the Middle East and Africa.
(3)
The Asia-Pacific segment consists of Australia, China and other countries in the Asia region.
(4)
The Benelux region is comprised of the countries of Belgium, Luxembourg and the Netherlands.
(5)
The Company markets its other maintenance products under the GT85® and 3-IN-ONE® brand names.
(6)
The Company markets its homecare and cleaning products (“HCCP”) under the X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava®, and Solvol® brand names.
(7)
In order to show the impact of changes in foreign currency exchange rates on our results of operations, we have included constant currency disclosures, where necessary, in this press release. Constant currency disclosures represent the translation of our current fiscal year revenues, expenses and net income from the functional currencies of our subsidiaries to U.S. dollars using the exchange rates in effect for the corresponding period of the prior fiscal year. Results on a constant currency basis are not in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”) and should be considered in addition to, not as a substitute for, results prepared in accordance with U.S. GAAP. We use results on a constant currency basis as one of the measures to understand our operating results and evaluate our performance in comparison to prior periods in order to enhance the visibility of the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. Management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing our underlying business performance and trends. However, reference to constant currency basis should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP.
WD-40 COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share amounts)
May 31, 2024
August 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
45,300
$
48,143
Trade and other accounts receivable, net
116,434
98,039
Inventories
76,576
86,522
Other current assets
10,453
15,821
Total current assets
248,763
248,525
Property and equipment, net
63,903
66,791
Goodwill
96,927
95,505
Other intangible assets, net
6,682
4,670
Right-of-use assets
11,590
7,820
Deferred tax assets, net
1,197
1,201
Other assets
14,548
13,454
Total assets
$
443,610
$
437,966
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
32,377
$
30,826
Accrued liabilities
29,697
30,000
Accrued payroll and related expenses
18,740
16,722
Short-term borrowings
22,316
10,800
Income taxes payable
2,111
494
Total current liabilities
105,241
88,842
Long-term borrowings
85,473
109,743
Deferred tax liabilities, net
10,844
10,305
Long-term operating lease liabilities
6,072
5,832
Other long-term liabilities
13,738
13,066
Total liabilities
221,368
227,788
Commitments and Contingencies
Stockholders’ equity:
Common stock — authorized 36,000,000 shares, $0.001 par value; 19,924,268 and 19,905,815 shares issued at May 31, 2024 and August 31, 2023, respectively; and 13,547,637 and 13,563,434 shares outstanding at May 31, 2024 and August 31, 2023, respectively
20
20
Additional paid-in capital
174,177
171,546
Retained earnings
495,109
477,488
Accumulated other comprehensive loss
(31,300
)
(31,206
)
Common stock held in treasury, at cost — 6,376,631 and 6,342,381 shares at May 31, 2024 and August 31, 2023, respectively
(415,764
)
(407,670
)
Total stockholders’ equity
222,242
210,178
Total liabilities and stockholders’ equity
$
443,610
$
437,966
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share amounts)
Three Months Ended May 31,
Nine Months Ended May 31,
2024
2023
2024
2023
Net sales
$
155,045
$
141,717
$
434,566
$
396,803
Cost of products sold
72,657
69,955
203,684
194,708
Gross profit
82,388
71,762
230,882
202,095
Operating expenses:
Selling, general and administrative
45,564
38,195
134,722
115,869
Advertising and sales promotion
9,345
7,660
23,053
18,984
Amortization of definite-lived intangible assets
303
250
806
753
Total operating expenses
55,212
46,105
158,581
135,606
Income from operations
27,176
25,657
72,301
66,489
Other income (expense):
Interest income
136
69
276
164
Interest expense
(1,182
)
(1,597
)
(3,336
)
(4,268
)
Other (expense) income, net
(283
)
243
(516
)
558
Income before income taxes
25,847
24,372
68,725
62,943
Provision for income taxes
6,005
5,477
15,865
13,525
Net income
$
19,842
$
18,895
$
52,860
$
49,418
Earnings per common share:
Basic
$
1.46
$
1.39
$
3.89
$
3.62
Diluted
$
1.46
$
1.38
$
3.88
$
3.62
Shares used in per share calculations:
Basic
13,552
13,573
13,556
13,582
Diluted
13,577
13,600
13,581
13,606
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Nine Months Ended May 31,
2024
2023
Operating activities:
Net income
$
52,860
$
49,418
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
7,186
5,939
Net (gains) losses on sales and disposals of property and equipment
(141
)
20
Deferred income taxes
539
(376
)
Stock-based compensation
5,051
5,793
Amortization of cloud computing implementation costs
650
212
Unrealized foreign currency exchange losses (gains)
108
(1,780
)
Provision for credit losses
325
18
Write-off of inventories
1,347
693
Changes in assets and liabilities:
Trade and other accounts receivable
(15,771
)
(9,015
)
Inventories
9,137
9,826
Other assets
(186
)
(538
)
Operating lease assets and liabilities, net
(26
)
55
Accounts payable and accrued liabilities
(347
)
(7,086
)
Accrued payroll and related expenses
1,915
1,470
Other long-term liabilities and income taxes payable
2,177
944
Net cash provided by operating activities
64,824
55,593
Investing activities:
Purchases of property and equipment
(3,359
)
(4,650
)
Proceeds from sales of property and equipment
457
437
Acquisition of business, net of cash acquired
(6,201
)
-
Net cash used in investing activities
(9,103
)
(4,213
)
Financing activities:
Treasury stock purchases
(8,094
)
(7,434
)
Dividends paid
(35,239
)
(33,273
)
Repayments of long-term senior notes
(800
)
(800
)
Net repayments from revolving credit facility
(11,592
)
(11,917
)
Shares withheld to cover taxes upon conversions of equity awards
(2,420
)
(600
)
Net cash used in financing activities
(58,145
)
(54,024
)
Effect of exchange rate changes on cash and cash equivalents
(419
)
3,204
Net (decrease) increase in cash and cash equivalents
(2,843
)
560
Cash and cash equivalents at beginning of period
48,143
37,843
Cash and cash equivalents at end of period
$
45,300
$
38,403
View source version on businesswire.com: https://www.businesswire.com/news/home/20240710571145/en/
Media and Investor Contact: Wendy Kelley Vice President, Stakeholder and Investor Engagement investorrelations@wd40.com +1-619-275-9304
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