~ 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:
- Total net sales were $155.0 million, an increase of 9 percent
compared to the prior year fiscal quarter.
- Excluding the favorable impact of foreign currency exchange
rates, net sales would have increased 8 percent to $153.5 million
compared to the prior year fiscal quarter.
- Total maintenance product sales were $147.2 million, an
increase of 10 percent compared to the prior year fiscal
quarter.
- Gross margin was 53.1 percent compared to 50.6 percent in the
prior year fiscal quarter.
- Selling, general, and administrative expenses were $45.6
million, up 19 percent compared to the prior year fiscal
quarter.
- Advertising and sales promotion expenses were $9.3 million, up
22 percent compared to the prior year fiscal quarter. These
expenses accounted for 6.0 percent of total net sales, up from 5.4
percent in the prior year fiscal quarter.
- Net income was $19.8 million, an increase of 5 percent from the
prior year fiscal quarter.
- Diluted earnings per share were $1.46 compared to $1.38 in the
prior year fiscal quarter.
“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
- The Americas segment represented 49 percent of total net sales
in the third quarter.
- Net sales in the Americas increased 6 percent in the third
quarter compared to the prior year fiscal quarter primarily due to
an increase in net sales of WD-40® Multi-Use Product of 7 percent.
WD-40® Multi-Use Product sales increased most significantly in
Latin America, which were up $5.4 million, and were partially
offset by lower sales in the United States and Canada, which were
down by $1.0 and $0.3 million, respectively.
- WD-40 Specialist® increased 10 percent primarily due to new
distribution and the timing of customer orders in the United
States.
EIMEA
- The EIMEA segment represented 38 percent of total net sales in
the third quarter.
- Net sales in EIMEA increased 13 percent in the third quarter
compared to the prior year fiscal quarter primarily due to an
increase in net sales of WD-40® Multi-Use Product of 17 percent.
WD-40® Multi-Use Product sales increased most significantly in
France and Italy, which were up $1.4 million and $1.2 million,
respectively, as well as Benelux(4) and Poland, which were each up
$1.1 million from the prior quarter of the previous fiscal
year.
- Net sales of WD-40 Specialist® increased 11 percent primarily
due to the combined impact of higher sales volume and the favorable
impact of price increases across the regions.
- Translation of the Company’s foreign subsidiaries’ results from
their functional currencies to U.S. dollars had a favorable impact
on sales in EIMEA for the current quarter. On a non-GAAP constant
currency basis, net sales in EIMEA would have been $57.8 million
for the third quarter.
Asia-Pacific
- The Asia-Pacific segment represented 13 percent of total net
sales in the third quarter.
- Net sales in Asia-Pacific increased 14 percent in the third
quarter compared to the prior year fiscal quarter primarily due to
an increase in sales of WD-40® Multi-Use Product of 11 percent.
WD-40® Multi-Use Product sales increased most significantly in
China and the Asia distributor markets, which were up $1.0 million
and $0.4 million, respectively.
- Net sales of WD-40 Specialist® increased 30 percent primarily
due to successful brand building in certain regions and the timing
of customer orders.
- Homecare and cleaning product sales, which remain strategic
focus for the Company in this segment, increased 28 percent due to
higher sales volume in Australia attributable to successful
promotional activities and improved packaging.
- Translation of the Company’s foreign subsidiaries’ results from
their functional currencies to U.S. dollars had an unfavorable
impact on sales in Asia-Pacific for the current quarter. On a
non-GAAP constant currency basis, net sales in Asia-Pacific would
have been $20.9 million for the third quarter.
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
%
- Net sales of maintenance products, which are considered the
primary strategic focus for the Company, represented 95 percent of
total net sales in the third quarter. Net sales of maintenance
products increased 10 percent in the third quarter when compared to
the prior year fiscal quarter primarily due to higher sales of
WD-40® Multi-Use Product in EIMEA, Latin America and China.
- Net sales of homecare and cleaning products represented 5
percent of total net sales in the third quarter. Net sales of the
homecare and cleaning products declined 6 percent in the third
quarter when compared to the prior year fiscal quarter primarily
due to lower sales of homecare and cleaning products in the United
States and the United Kingdom, which were partially offset by
higher sales in Australia. The Company has previously disclosed its
intent to actively pursue the sale of its homecare and cleaning
product portfolios in the United States and United Kingdom.
Dividend and Share Repurchase Update
- On June 18, 2024, the Company’s board of directors declared a
regular quarterly dividend of $0.88 per share payable on July 31,
2024 to stockholders of record at the close of business on July 19,
2024.
- On June 19, 2023, the Company’s board approved a share
repurchase plan that became effective on September 1, 2023. Under
the plan, the Company is authorized to acquire up to $50.0 million
of its outstanding shares through August 31, 2025.
- During the period from September 1, 2023 through the end of the
third quarter, the Company repurchased 34,250 shares at a total
cost of $8.1 million under this $50.0 million plan.
- The timing and amount of repurchases under the plan are based
on terms and conditions as may be acceptable to the Company’s chief
executive officer and chief financial officer, subject to present
loan covenants, and in compliance with all laws and regulations
applicable thereto.
Reiterated Fiscal Year 2024 Guidance
The Company reiterated its guidance for fiscal year 2024:
- Net sales growth is projected to be between 6 and 12 percent
with net sales expected to be between $570 million and $600 million
on a non-GAAP constant currency basis.
- Gross margin for the full year is expected to be between 51.5
and 53 percent.
- Advertising and promotion investments are projected to be
between 5 and 6 percent of net sales.
- The provision for income tax is expected to be between 23 and
24 percent.
- Net income is projected to be between $67.7 million and $71.8
million.
- Diluted earnings per share is expected to be between $5.00 and
$5.30 based on an estimated 13.6 million weighted average shares
outstanding.
“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
Grafico Azioni WD 40 (NASDAQ:WDFC)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni WD 40 (NASDAQ:WDFC)
Storico
Da Gen 2024 a Gen 2025
