SAN DIEGO, Oct. 14 /PRNewswire-FirstCall/ -- WD-40 Company (Nasdaq: WDFC) today reported net sales for the fourth quarter ended August 31, 2009 of $77.8 million, an increase of 1.1% from the fourth quarter last year. Year-to-date net sales were $292.0 million, down 7.9% from the same period last year.
Net income for the fourth quarter was $7.6 million, up 63.8% compared to the prior year's quarter. Earnings per share in the fourth quarter were $0.46 compared to $0.28 during the same period last year. Year-to-date net income was $26.3 million, a decrease of 4.8% from last year. For the year, earnings per share were $1.58, compared to $1.64 for the same period last year. More detailed information will be available on WD-40 Company's 10-K that will be filed the week of October 19, 2009.
"While we have seen tough times during the past year with lots of uncertainty, our tribe focused on reaching our target goals and delivered impressive results," said
Garry Ridge
, WD-40 Company President and CEO. "During the year we made strategic decisions that should benefit us in the long-term. These include diverting R&D resources to our multi-purpose maintenance products and adjacent categories, exploring the opportunities for the WD-40 brand, developing our business through acquisitions and strategic partnerships, and continuing our efforts to expand geographically around the world."
During the year foreign currency exchange rates negatively affected net sales by $30.0 million and net income by $4.5 million.
"In constant currency, we would have seen sales increases of 2% for the year and net income increases of 11% for the year," Ridge said.
The Company's constant currency disclosures represent the translation of the Company's current fiscal year revenues and expenses from the functional currencies of WD-40 Company subsidiaries to U.S. dollars utilizing the exchange rates in effect for the corresponding period of the prior fiscal year.
Summary
-- Net sales increased 1.1% to $77.8 million for the fourth quarter compared to the prior year's quarter. Year-to-date net sales declined 7.9% to $292.0 million from the same period last year.
-- Fourth quarter multi-purpose maintenance product sales, which include the WD-40 and 3-IN-ONE brands, were $59.6 million, up 2.6%, and $225.1 million for the year, down 4.6% from the prior year. Homecare and cleaning product sales, which include all of our other brands, were $18.2 million for the quarter, down 3.4% from the fourth quarter last year, and were $66.9 million year-to-date, down 17.6% from the prior year.
-- America's segment fourth quarter sales were up 4.0% compared to the prior year's quarter and were down 4.8% year-to-date from the prior year. Europe segment sales for the fourth quarter were up 0.2% compared to the prior year's quarter and were down 11.8% year-to-date from the prior year. Asia/Pacific segment sales for the fourth quarter were down 12.0% compared to the prior year's quarter and were down 12.2% year-to-date from the prior year.
Total sales by segment for the fiscal year were 58% from the Americas, 33% from Europe and 9% from Asia/Pacific.
Fourth quarter gross margin was 51.6% of sales compared to 44.8% in the same period last year. For the year, gross margin was 49.5% of sales, compared to 46.8% in the prior year.
"We are pleased to see our gross margin recover as we drew closer to our target of 50% as a percentage of net sales for FY09," Ridge said. "During the quarter, margin benefited from stabilization in the cost of petroleum-based products as well as positive impacts from investments related to our supply chain we made during the year.
During the past year, the Company recorded impairment charges amounting to $6.7 million related to the X-14 and Carpet Fresh brands. Impairments were due to the decline in profit margins and future forecasted sales levels resulting primarily from lost distribution and our strategic decision to divert research and development efforts to other brands.
Advertising and sales promotion expenses were down 10.7% for the fourth quarter compared to the same period last year and were down 1.9% for the year from the prior year.
"During the past year we launched the WD-40 Trigger Pro(TM), a non-aerosol delivery system developed for industrial end-users, and increased distribution of the 3-In-One No Rust Shield and 3-In-One Professional Garage Door Lube products," Ridge said. "We are also launching a new brand in the coming months called Blue Works(TM) that features best-in-class products developed for industrial users that will carry the WD-40 Company signature of endorsement."
Selling, general and administrative expenses were down 0.5% in the fourth quarter to $20.7 million compared to the prior year's quarter and were down 6.9% for the year to $78.1 million from the prior year.
The board of directors of WD-40 Company declared on Friday, October 2, 2009 the regular quarterly dividend of $.25 per share, payable October 30, 2009 to stockholders of record on October 16, 2009.
Fiscal Year 2010 Guidance
WD-40 Company expects fiscal year 2010 net sales to grow 2%-9% to $298-$318 million. The company expects earnings per share of $1.80 to $1.95 based on an estimated 16.8 million shares outstanding.
WD-40 Company, with headquarters in San Diego, is a global consumer product company dedicated to delivering unique, high value and easy-to-use solutions for a wide variety of maintenance needs of "doer" and "on-the-job" users by leveraging and building the brand fortress of the Company.
The Company markets two multi-purpose maintenance product brands, WD-40(R), and 3-IN-ONE(R), and eight homecare and cleaning product brands, X-14(R) mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes(R) automatic toilet bowl cleaners, Carpet Fresh(R ) and No Vac (R) rug and room deodorizers, Spot Shot(R) aerosol and liquid carpet stain removers, 1001(R) carpet and household cleaners and rug and room deodorizers, and Lava (R) and Solvol (R) heavy-duty hand cleaners.
WD-40 Company markets its products in more than 160 countries worldwide and recorded sales of $292.0 million in fiscal year 2009. Additional information about WD-40 Company can be obtained online at http://www.wd40company.com.
Except for the historical information contained herein, this news release contains forward-looking statements concerning WD-40 Company's outlook for sales, earnings, dividends and other financial results. These statements are based on an assessment of a variety of factors, contingencies and uncertainties considered relevant by WD-40 Company. Forward-looking statements involve risks and uncertainties, which cause actual results to differ materially from the forward-looking statements, including the impact of commodity prices, changes in foreign exchange rates, impacts of new product and brands and fluctuating market conditions, both in the United States and internationally. The company's expectations, beliefs and projections 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 projections will be achieved or accomplished.
The risks and uncertainties are detailed from time to time in reports filed by WD-40 Company with the SEC, including Forms 8-K, 10-Q, and 10-K, and readers are urged to carefully review these and other documents.
WD-40 Company
Consolidated Statements of Operations
-------------------------------------
(in thousands, except share and per share amounts)
Three Months Ended Fiscal Year Ended
August 31, August 31,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Net sales $77,752 $76,916 $292,002 $317,118
Cost of products
sold(1) 37,596 42,439 147,469 168,848
------ ------ ------- -------
Gross profit 40,156 34,477 144,533 148,270
Operating expenses:
Selling, general
and administrative 20,686 20,786 78,051 83,800
Advertising and
sales promotion 4,121 4,615 19,459 19,837
Amortization of
intangible asset 122 148 468 597
Impairment of
indefinite-lived
intangible assets 3,950 1,340 6,710 1,340
----- ----- ----- -----
Total operating
expenses 28,879 26,889 104,688 105,574
------ ------ ------- -------
Income from operations 11,277 7,588 39,845 42,696
Other (expense) income:
Interest expense, net (546) (450) (2,064) (1,679)
Other (expense)
income, net (1) 229 543 982
-- --- --- ---
Income before income
taxes 10,730 7,367 38,324 41,999
Provision for income
taxes 3,108 2,714 12,037 14,377
----- ----- ------ ------
Net income $7,622 $4,653 $26,287 $27,622
====== ====== ======= =======
Earnings per common share:
Basic $0.46 $0.28 $1.59 $1.66
===== ===== ===== =====
Diluted $0.46 $0.28 $1.58 $1.64
===== ===== ===== =====
Shares used in per share calculations:
Basic 16,515,450 16,450,953 16,503,265 16,637,740
========== ========== ========== ==========
Diluted 16,652,835 16,621,139 16,655,699 16,815,361
========== ========== ========== ==========
Dividends declared
per share $0.25 $0.25 $1.00 $1.00
===== ===== ===== =====
(1) Includes cost of products acquired from related party of $125 and
$4,653 for the three months ended August 31, 2009 and 2008,
respectively; and $11,675 and $21,757 for the fiscal years ended
August 31, 2009 and 2008, respectively.
WD-40 Company
Consolidated Balance Sheets
-----------------------------
(In thousands, except share amounts)
August 31, 2009 August 31, 2008
--------------- ---------------
Assets
------
Cash and cash equivalents $45,956 $41,983
Trade accounts receivable,
less allowance for doubtful
accounts of $694 and $486 at
August 31, 2009 and 2008,
respectively 48,061 49,271
Product held at contract
packagers 1,797 2,453
Inventories 15,858 18,280
Current deferred tax assets, net 4,369 4,045
Other current assets 4,736 3,453
----- -----
Total current assets 120,777 119,485
Property, plant and equipment, net 10,930 11,309
Goodwill 95,424 95,909
Other intangible assets, net 32,205 39,992
Investment in related party - 435
Other assets 3,281 3,543
----- -----
Total assets $262,617 $270,673
======== ========
Liabilities and Shareholders' Equity
------------------------------------
Accounts payable $12,529 $22,985
Accounts payable to related
party - 547
Accrued liabilities 15,233 13,143
Current portion of long-term
debt 10,714 10,714
Accrued payroll and related
expenses 7,168 6,084
Income taxes payable 2,570 1,090
----- -----
Total current liabilities 48,214 54,563
Long-term debt 21,429 32,143
Long-term deferred tax liabilities,
net 16,868 16,876
Deferred employee benefits and other
long-term liabilities 3,159 3,099
----- -----
Total liabilities 89,670 106,681
------ -------
Shareholders' equity:
Common stock -- authorized
36,000,000 shares, $0.001 par value;
18,093,879 and 18,041,715 shares
issued at August 31, 2009 and 2008,
respectively; and 16,530,381 and
16,478,217 shares outstanding at
August 31, 2009 and 2008,
respectively 18 18
Additional paid-in capital 86,729 82,647
Retained earnings 138,367 128,627
Accumulated other comprehensive
(loss) income (2,101) 2,766
Common stock held in treasury, at
cost -- 1,563,498 shares (50,066) (50,066)
------- -------
Total shareholders' equity 172,947 163,992
------- -------
Total liabilities and
shareholders' equity $262,617 $270,673
======== ========
WD-40 Company
Consolidated Statements of Cash Flows
-------------------------------------
(In thousands)
-------------
Fiscal Year Ended August 31,
---------------------------
2009 2008
---- ----
Operating activities:
Net income $26,287 $27,622
Adjustments to reconcile net income to
net cash provided by
operating activities:
Depreciation and amortization 3,727 3,827
Impairment of indefinite-lived
intangible assets 6,710 1,340
Net gains on sales and
disposals of
property and equipment (17) (41)
Deferred income tax expense (266) 911
Excess tax benefits from exercises
of stock options and
conversions of restricted
stock units to common shares (101) (294)
Distributions received and
equity losses from
related party, net 435 580
Stock-based compensation 2,688 2,398
Unrealized foreign currency
exchange gains, net (696) (1,697)
Provision for bad debts 500 782
Changes in assets and liabilities:
Trade accounts receivable (1,349) (4,062)
Product held at contract
packagers 632 (969)
Inventories 2,034 (5,375)
Other assets (1,643) (281)
Accounts payable and
accrued expenses and
liabilities (6,669) 1,085
Accounts payable to
related party 547 959
Income taxes payable 1,732 1,571
Deferred employee
benefits and other
long term liabilities 77 1,346
-- -----
Net cash provided by
operating activities 34,628 29,702
------ ------
Investing activities:
Capital expenditures (3,008) (5,752)
Proceeds from sales of
property and equipment 255 215
Purchases of marketable
securities - (76,175)
Proceeds from sales of
marketable securities - 76,175
- ------
Net cash used in
investing activities (2,753) (5,537)
------ ------
Financing activities:
Repayments of long-term debt (10,714) (10,714)
Proceeds from issuance of
common stock 1,296 4,208
Excess tax benefits from exercises
of stock options and
conversions of restricted
stock units to common shares 101 294
Dividends paid (16,547) (16,691)
Treasury stock purchases - (17,720)
- -------
Net cash used in
financing activities (25,864) (40,623)
------- -------
Effect of exchange rate changes
on cash
and cash equivalents (2,038) (2,637)
------ ------
Net increase (decrease) in cash
and cash equivalents 3,973 (19,095)
Cash and cash equivalents at
beginning of period 41,983 61,078
------ ------
Cash and cash equivalents
at end of period $45,956 $41,983
======= =======
WD-40 Company
Consolidated Statements of Comprehensive Income
-----------------------------------------------
(In thousands)
Three Months Fiscal Year
Ended August 31, Ended August 31,
--------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
Net income $7,622 $4,653 $26,287 $27,622
Other comprehensive income:
Foreign currency translation
adjustment, net of tax 1,127 (4,345) (4,867) (4,827)
Other - - - 89
- - - --
Total comprehensive
income $8,749 $308 $21,420 $22,884
====== ==== ======= =======
SOURCE WD-40 Company
Garry O. Ridge of WD-40 Company, +1-619-275-9324