Company Overview - Quad 7 Capital is a team of 7 analysts with diverse expertise in business, policy, economics, mathematics, game theory, and the sciences [1] - The company has been sharing investment opportunities for nearly 12 years, focusing on short- and medium-term investments, income generation, special situations, and momentum trades [1] - Quad 7 Capital is best known for its February 2020 call to sell everything and go short, and has maintained an average portfolio allocation of 95% long and 5% short since May 2020 [1] Investment Strategy - The company's BAD BEAT Investing group provides in-depth, high-quality research with clear entry and exit targets, aiming to save investors time [1] - Quad 7 Capital focuses on teaching investors to become proficient traders through their playbook, rather than just providing trades [1] - The company shares both long and short trades, and its analysts personally invest in the equities they discuss within the BAD BEAT Investing group [1] Benefits of BAD BEAT Investing - Investors can learn to understand the pinball nature of markets and execute well-researched written trade ideas each week [2] - The service includes access to 4 chat rooms, daily complimentary key analyst upgrade/downgrade summaries, and learning basic options trading [2] - Extensive trading tools are provided to enhance the investment experience [2]

WD-40 (WDFC -6.20%) stock fell 6.3% through 11:30 a.m. ET Monday despite the company beating forecasts in its fiscal Q1 2025 earnings report, released after close of trading last Friday.Analysts had expected WD-40 to earn only $1.26 per share in Q1, but the company actually earned $1.39 per share, a significant "beat." WD-40 Q1 earningsSales for the quarter were $153.5 million, about 9% better than quarterly earnings one year ago, and WD-40 expanded its gross profit margin by 1 full percentage point to 54.8 ...

Q1 FY25 Earnings Results JANUARY 10, 2025 Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company and its subsidiaries (collectively, the "Company"). The Company markets maintenance products ("MP") under the WD-40®, 3-IN-ONE® and GT85® brand names. The WD-40 brand portfolio also includes the WD-40® Multi-Use Product, the WD-40 Specialist® and WD-40 BIKE® product lines. The Company markets the homecare and cleaning products ("H ...

Financial Data and Key Metrics - The company encourages investors to review the earnings presentation, earnings press release, and Form 10-Q for the period ending November 30, 2024, for detailed financial information [2] - The call includes discussions on certain non-GAAP measures, with descriptions and reconciliations available in SEC filings and earnings documents on the investor relations website [3] Business Line Data and Key Metrics - No specific data or metrics related to individual business lines were provided in the content Market Data and Key Metrics - No specific data or metrics related to individual markets were provided in the content Company Strategy and Industry Competition - No specific details on company strategy or industry competition were provided in the content Management Commentary on Operating Environment and Future Outlook - The call includes forward-looking statements about the company's expectations for future performance, with actual results potentially differing materially [3] Other Important Information - A replay and transcript of the call will be made available shortly after the call on the investor relations website [2] Q&A Session Summary - No Q&A session details were provided in the content

Sales Performance - Consolidated net sales increased by $13.1 million or 9% to $153.5 million compared to the prior year, driven by higher sales volume and price increases[97] - Americas segment sales grew 8% to $69.4 million, led by 9% growth in WD-40 Multi-Use Product sales[98][99] - EIMEA segment sales surged 18% to $57.5 million, with WD-40 Multi-Use Product sales up 21%[98][105] - Asia-Pacific segment sales declined 4% to $26.6 million, with WD-40 Multi-Use Product sales down 6%[98][108] - Net sales increased to $153.5 million in Q3 2024, up 9.3% from $140.4 million in Q3 2023[16] - Total net sales for the three months ended November 30, 2024, were $153.495 million, up from $140.416 million in the same period in 2023[68] - WD-40 Multi-Use Product sales increased to $118.547 million in Q3 2024 from $107.677 million in Q3 2023[68] - WD-40 Specialist sales rose to $19.172 million in Q3 2024 from $16.842 million in Q3 2023[68] - Foreign currency exchange rates favorably impacted consolidated net sales by $1.5 million[97] - Asia-Pacific segment net sales decreased, with WD-40 Multi-Use Product sales down $1.3 million (6%), driven by a $2.6 million decline in Asia distributor markets, partially offset by a $1.0 million increase in China[109] - WD-40 Specialist sales in the Asia-Pacific segment increased $1.2 million (17%), driven by higher sales volume in Iberia, U.K., and Italy, each up $0.5 million, $0.3 million, and $0.3 million respectively[109] Profitability and Margins - Gross profit margin improved to 54.8% from 53.8% in the prior year period[97] - Net income rose 8% to $18.9 million, with diluted EPS increasing 9% to $1.39[97] - Gross profit increased to $84.1 million, up $8.5 million, with gross margin improving to 54.8% from 53.8% (100 basis points increase)[111] - Net income rose to $18.9 million in Q3 2024, an 8.3% increase from $17.5 million in Q3 2023[16] - Gross profit margin improved to 54.8% in Q3 2024, up from 53.8% in Q3 2023[16] - Net income for the three months ended November 30, 2024, was $18.925 million, compared to $17.482 million for the same period in 2023[19] - Net income for the three months ended November 30, 2024, was $18.925 million, compared to $17.482 million for the same period in 2023[67] Expenses and Costs - SG&A expenses increased to $50.5 million, up $6.4 million (14%), representing 32.9% of net sales compared to 31.4% in the prior year[113] - Advertising and sales promotion expenses increased to $8.4 million, up $1.4 million (20%), representing 5.5% of net sales compared to 5.0% in the prior year[116] - Operating expenses increased to $59.0 million in Q3 2024, up 14.8% from $51.4 million in Q3 2023[16] - Americas segment operating income decreased to $12.7 million, down $1.5 million (11%), with operating expenses increasing $4.1 million primarily due to higher employee-related costs[121] Shareholder Returns and Capital Allocation - The company repurchased 13,750 shares at an average price of $263.75 per share for a total cost of $3.6 million under its $50 million share repurchase plan[161][163] - Returned $15.6 million to stockholders through share repurchases and dividends in the quarter[97] - The company declared a 7% increase in the regular quarterly cash dividend, raising it from $0.88 per share to $0.94 per share, payable on January 31, 2025[88] - Treasury stock purchases totaled $3.6 million in Q3 2024, up 50.2% from $2.4 million in Q3 2023[22] - Dividends paid increased to $12.0 million in Q3 2024, up 5.9% from $11.3 million in Q3 2023[22] - Cash dividends paid in Q3 2024 were $0.88 per share, totaling $11.958 million, compared to $0.83 per share and $11.297 million in Q3 2023[19] - The company repurchased 13,750 shares at an average price of $263.75 per share, totaling $3.6 million, leaving $38.3 million authorized under the 2023 Repurchase Plan[66] Cash Flow and Liquidity - Cash and cash equivalents grew to $54.9 million as of November 30, 2024, up 17.6% from $46.7 million at August 31, 2024[14] - Total current assets increased to $262.8 million as of November 30, 2024, up 2.9% from $255.4 million at August 31, 2024[14] - Net cash provided by operating activities was $14.9 million in Q3 2024, down 44.5% from $26.9 million in Q3 2023[22] - The company extended its revolving credit facility maturity date to April 30, 2029, under the Second Amended and Restated Credit Agreement[58] - The company's revolving credit agreement includes a $125.0 million limit on other unsecured indebtedness[62] Tax and Financial Adjustments - The release of an unrecognized tax benefit is expected to generate a favorable income tax adjustment of $11.9 million in the fiscal second quarter ending February 28, 2025[89] - The effective tax rate decreased by 2.2% from 24.2% in 2023 to 22.0% in 2024, primarily due to increased excess tax benefits from stock-based equity awards[81] Inventory and Assets - Total inventories decreased from $79.088 million as of August 31, 2024, to $74.887 million as of November 30, 2024, with finished goods inventory increasing from $60.331 million to $63.874 million[45] - Total assets held for sale as of November 30, 2024, were $9.865 million, including intangibles, goodwill, and inventory[44] - Goodwill decreased by $1.069 million due to assets held for sale, with the balance as of November 30, 2024, at $96.584 million[47] - The carrying amount of definite-lived intangible assets decreased from $6.222 million as of August 31, 2024, to $2.287 million as of November 30, 2024, due to amortization and translation adjustments[52] - The gross carrying amount of definite-lived intangible assets increased slightly from $38.863 million as of August 31, 2024, to $39.091 million as of November 30, 2024[51] - The company's goodwill showed no indicators of impairment as of November 30, 2024, with no impairment losses recorded[48] Liabilities and Debt - Total liabilities decreased to $221.0 million as of November 30, 2024, down 1.1% from $218.5 million at August 31, 2024[14] - The fair value of the company's senior notes was estimated at $60.3 million as of November 30, 2024, compared to a carrying value of $66.4 million[39] Operational and Strategic Changes - The company changed the functional currency of its U.K. subsidiary from Pound Sterling to Euro effective September 1, 2024[36] - The company has no outstanding commitments for purchasing finished goods and components as of November 30, 2024[75] Homecare and Cleaning Products - Homecare and cleaning product sales decreased 3% to $7.99 million, with a 7% decline in the Americas segment[97][99] - Homecare and cleaning product sales in the Asia-Pacific segment decreased $0.4 million (19%) due to reduced demand in the U.K. from lower advertising and promotional activities[109]

Sales Performance - Global net sales grew 9% to $153.5 million in Q1 2025 compared to the prior year fiscal quarter[5] - Total maintenance product sales increased 10% to $145.5 million, representing 95% of total net sales[5][13] - EIMEA segment net sales increased 18% to $57.5 million, driven by 21% growth in WD-40 Multi-Use Product sales[6][10] - Americas segment net sales grew 8% to $69.4 million, with WD-40 Multi-Use Product sales up 9%[6][10] - Asia-Pacific segment net sales decreased 4% to $26.6 million, primarily due to a 6% decline in WD-40 Multi-Use Product sales[6][10] - Net sales increased to $153.5 million in Q3 2024, up 9.3% from $140.4 million in Q3 2023[29] Profitability - Gross margin improved to 54.8%, up 100 basis points from the prior year quarter[5][14] - Net income increased 8% to $18.9 million, with diluted EPS up 9% to $1.39[5] - Gross profit rose to $84.1 million in Q3 2024, an 11.3% increase from $75.6 million in Q3 2023[29] - Net income grew to $18.9 million in Q3 2024, up 8.3% from $17.5 million in Q3 2023[29] Financial Position - Cash and cash equivalents increased to $54.9 million as of November 30, 2024, up 17.6% from $46.7 million as of August 31, 2024[27] - Total assets decreased slightly to $447.3 million as of November 30, 2024, down 0.4% from $449.0 million as of August 31, 2024[27] - Total liabilities increased to $221.0 million as of November 30, 2024, up 1.2% from $218.5 million as of August 31, 2024[27] - Inventory levels decreased to $74.9 million as of November 30, 2024, down 5.3% from $79.1 million as of August 31, 2024[27] - Accounts receivable decreased to $111.4 million as of November 30, 2024, down 5.2% from $117.5 million as of August 31, 2024[27] - Short-term borrowings increased to $23.4 million as of November 30, 2024, up 170.5% from $8.7 million as of August 31, 2024[27] Expenses and Investments - Advertising and sales promotion expenses rose 20% to $8.4 million, representing 5.5% of total net sales[5] - The company repurchased 13,750 shares at a total cost of $3.6 million under its $50.0 million share repurchase plan[13] Guidance and Outlook - Fiscal year 2025 guidance projects net sales growth of 6-11% to $600-630 million and diluted EPS of $5.20-$5.45[13][14] Cash Flow - Operating cash flow decreased to $14.9 million in Q3 2024, down 44.5% from $26.9 million in Q3 2023[31]

Company Performance - WD-40 Company reported Q4 revenue of $156 million, an 11% increase YoY, surpassing consensus estimates by 450 basis points [1] - Sales in the Americas grew by 6%, APAC by 21%, and emerging markets by 16%, reflecting strong global performance [1] - Maintenance Products segment grew by 12%, driven by a 13% increase in WD-40 Multi-Use product sales, while Harvest Brands declined by 2% [1] - Gross margin widened by 270 basis points due to revenue leverage and product mix, though net income only increased by 1% to $16.8 million [2] - The company expects revenue growth of 6%-11% in 2025, with earnings growth projected at 9%-14% [2] Financial Health and Strategy - WD-40 Company maintains a robust balance sheet with $46.7 million in cash and low leverage, with total liabilities at less than 0.5x assets and 1x equity [3] - Equity, a measure of shareholder value, increased by nearly 10% [3] - The company plans to divest its Harvest Brand Cleaning Products segment to focus on core business growth, despite its good margins [2] - Cash flow was negative due to growth investments, but cash burn was only 3% of total cash, indicating strong capitalization [3] Dividend and Capital Returns - WD-40 Company has a reliable dividend with a yield of 1.33%, aligning with the S&P 500 average [1][3] - The company has a 16-year track record of dividend increases, with an annualized 3-year dividend growth rate of 7.40% [3] - The payout ratio is high at 68.88%, but it is supported by strong cash flow and growth prospects [3] Market and Analyst Sentiment - Analysts from DA Davidson and Jefferies Financial Group rate WD-40 stock as "Moderate Buy," with price targets ranging from $280 to $322, indicating a potential upside of 7.75%-20% [4] - Technical indicators suggest the stock is near equilibrium, with a bias towards upward movement due to growth, cash flow, and capital return prospects [5] Growth Opportunities - With 51% of revenue coming from the U.S., which represents only 15% of the global economy, WD-40 has significant growth potential in international markets [1] - Management is actively investing in new opportunities to drive future growth [1]

Sales Performance - Consolidated net sales increased by $53.3 million, or 10%, for fiscal year 2024 compared to the prior fiscal year, with sales volume contributing $41.3 million and average selling price contributing $4.2 million[124] - WD-40 Multi-Use Product sales increased by $45.3 million, or 11%, for fiscal year 2024 compared to the prior fiscal year[127] - WD-40 Specialist sales increased by $7.2 million, or 11%, for fiscal year 2024 compared to the prior fiscal year[127] - EIMEA segment net sales increased by $30.2 million, or 16%, for fiscal year 2024 compared to the prior fiscal year[128] - Americas segment net sales increased by $15.1 million, or 6%, for fiscal year 2024 compared to the prior fiscal year[128] - Latin America sales of WD-40 Multi-Use Product increased by $14.8 million, or 40%, primarily due to the transition to a direct marketing model in Brazil[132] - EIMEA segment net sales increased by $30.2 million (16%) to $221.0 million, driven by a 17% growth in maintenance products, with WD-40 Multi-Use Product sales up $25.5 million (18%) and WD-40 Specialist sales up $3.8 million (14%)[135][138] - Asia-Pacific segment net sales increased by $7.9 million (10%) to $87.6 million, with WD-40 Multi-Use Product sales up $5.7 million (9%) and WD-40 Specialist sales up $1.5 million (17%)[141][144] - Constant currency net sales in EIMEA increased by 12% ($22.2 million) and in Asia-Pacific by 11% ($9.1 million), reflecting underlying growth excluding currency impacts[135][141] - Net sales for fiscal year 2024 were $590.557 million, up from $537.255 million in 2023 and $518.820 million in 2022[177] Profitability and Margins - Gross profit as a percentage of net sales increased to 53.4% for fiscal year 2024 compared to 51.0% for the prior fiscal year[125] - Consolidated net income increased by $3.7 million, or 6%, for fiscal year 2024 compared to the prior fiscal year, with foreign currency exchange rates contributing $1.5 million[125] - Diluted earnings per common share for fiscal year 2024 were $5.11 versus $4.83 in the prior fiscal year[125] - Gross margin increased by 240 basis points to 53.4%, driven by favorable sales mix (130 bps), lower specialty chemical costs (80 bps), and reduced warehousing/distribution costs (80 bps)[149][151] - Americas operating income increased by 7% to $65.0 million in 2024, driven by a $15.1 million increase in sales and higher gross margin, which rose from 48.9% to 50.9%[159] - EIMEA operating income grew by 19% to $46.8 million in 2024, supported by a $30.2 million increase in sales and a gross margin improvement from 52.2% to 54.7%[161] - Asia-Pacific operating income rose by 15% to $29.7 million in 2024, with gross margin increasing from 55.3% to 58.0% due to favorable sales and market mix changes[162] - Net income for 2024 was $69.6 million, or $5.11 per diluted share, compared to $66.0 million, or $4.83 per diluted share, in 2023[169] - Gross margin improved to 53% in 2024, up from 51% in 2023, reflecting progress toward the company's long-term target of 55%[174] - Adjusted EBITDA as a percentage of net sales remained stable at 18% in both 2024 and 2023, consistent with the company's long-term target of 25%[174] - Adjusted EBITDA for fiscal year 2024 was $105.998 million, an increase from $98.697 million in 2023 and $95.042 million in 2022[177] - Adjusted EBITDA as a percentage of net sales remained consistent at 18% for fiscal years 2024, 2023, and 2022[177] Expenses and Costs - SG&A expenses increased by $29.2 million (19%) to $183.9 million, primarily due to higher employee-related costs ($16.1 million) and professional services fees ($6.1 million)[152][153] - Research and development investment increased by $1.8 million to $8.0 million, focused on sustainability, innovation, and product renovation[154] - A&P expenses increased to $33.9 million in 2024, up 18% from $28.8 million in 2023, driven by higher promotional programs and marketing support, particularly in the Americas and EIMEA segments[156][157] - Total expenditure on A&P activities reached $66.6 million in 2024, representing 11.2% of net sales, compared to $57.9 million (10.8% of net sales) in 2023[157] - Unallocated corporate expenses increased by 24% to $45.2 million in 2024, primarily due to higher employee-related costs and ERP system implementation expenses[163] - Cost of doing business as a percentage of net sales increased to 36% in 2024, compared to 33% in 2023, driven by higher operating expenses[176] Cash Flow and Financial Position - Net cash provided by operating activities decreased to $92.034 million in 2024 from $98.391 million in 2023[183] - Net cash used in investing activities increased to $9.735 million in 2024, primarily due to the purchase of the Brazilian distributor Theron[187] - Net cash used in financing activities decreased to $83.936 million in 2024, driven by lower net repayments on the revolving credit facility[187] - The company had $46.7 million in cash and cash equivalents as of August 31, 2024[181] - The 2023 Repurchase Plan authorized the company to acquire up to $50.0 million of outstanding shares, with $41.9 million remaining available as of August 31, 2024[182] - The company increased its regular quarterly cash dividend by 6% to $0.88 per share in December 2023[191] Debt and Interest Rates - The company's consolidated leverage ratio cannot exceed 3.5:1, and the consolidated interest coverage ratio cannot be less than 3:1[181] - The company has a $27.8 million outstanding balance on its $125.0 million revolving credit facility as of August 31, 2024, with interest rates based on SOFR, SONIA, and EURIBOR[207] - A one percentage point increase in variable interest rates would result in a pretax reduction of earnings and cash flows by approximately $0.3 million annually[207] - The weighted average cost of short-term debt, including fixed and variable rate borrowings, was 6.1% as of August 31, 2024[207] Foreign Currency and Hedging - Foreign currency exchange rates favorably impacted EIMEA net sales by $8.1 million but unfavorably impacted Asia-Pacific net sales by $1.1 million[140][145] - The company's U.K. subsidiary uses foreign currency forward contracts to manage exposure to net asset balances held in non-functional currencies[204] - The company does not engage in hedging activities to mitigate foreign currency translation risk, which affects sales, expenses, profits, assets, and liabilities[203] - Unremitted earnings of foreign subsidiaries are generally not considered indefinitely reinvested, except for specific statutory remittance restrictions in China[201] - The company's international subsidiaries operate in functional currencies other than the U.S. Dollar, exposing it to foreign currency risk during financial statement consolidation[203] Product and Market Performance - Homecare and cleaning product sales in the Americas segment decreased by $1.6 million, or 10%, due to reduced demand in the U.S.[134] - WD-40 Multi-Use Product sales in EIMEA benefited from volume recovery and price increases, with significant growth in France ($5.2 million), DACH ($5.0 million), and Iberia ($2.1 million)[138][139] - Asia-Pacific sales growth was driven by successful promotional programs in Indonesia, Korea, and Taiwan ($4.3 million) and increased sales volume in China ($1.6 million)[144][145] - The company expanded its direct market presence in Brazil and implemented a new ERP system in the U.S., contributing to increased professional services costs[153] Commodity and Raw Material Risks - The company does not hedge crude oil price volatility, which impacts the cost of specialty chemicals and aerosol cans, potentially affecting gross margins and operating results[206]

Quarterly Performance - WD-40 reported Q4 fiscal 2024 earnings of $1 23 per share missing the Zacks Consensus Estimate of $1 31 per share but marking an increase from $1 21 per share in the year-ago quarter [2] - Net sales rose 11 1% year over year to $156 million driven by increased sales of WD-40 Multi-Use Product in EIMEA Latin America and China [3] - Gross profit increased 16 9% to $84 3 million with gross margin expanding 270 basis points to 54 1% [3] - SG&A expenses escalated 26 6% to $49 1 million accounting for 31 5% of net sales [3] Segmental Sales - Americas net sales grew 6% to $79 2 million driven by a 7% increase in WD-40 Multi-Use Product sales particularly in Latin America [4] - EIMEA net sales increased 15 5% to $58 6 million with WD-40 Multi-Use Product sales up 16% [4] - Asia-Pacific net sales rose 21 4% to $18 2 million driven by a 26% increase in WD-40 Multi-Use Product sales [5] Strategic Initiatives - WD-40 is focusing on its new mantra 'few things many places bigger impact' to enhance efficiencies and returns on global investments [1] - The company plans to pursue the sale of its homecare and cleaning product portfolios in the Americas and the U K aligning with its Four-by-Four Strategic Framework [7] Financial Health - WD-40 ended Q4 with $46 7 million in cash and cash equivalents $86 million in long-term borrowings and $230 5 million in stockholders' equity [8] - The company repurchased 34 250 shares for $8 1 million under a $50 million share repurchase plan [8] FY25 Outlook - WD-40 projects net sales growth of 6-11% with total net sales expected to range from $600 million to $630 million [8] - Gross margin is anticipated to be 54-55% with operating income forecast between $95 million and $100 million [9] - Earnings per share are projected between $5 20 and $5 45 indicating growth of 9-14% [9] Industry Comparison - Shares of WD-40 lost 2 1% in the past month compared with the industry's decline of 0 3% [9]

Company Overview - The WD-40 Company (NASDAQ: WDFC) stock is one of the longest-held positions [1] - The company has maintained a hold rating due to expensive valuations despite its growth [1] Investment Strategy - The company promotes a blended trading and investing approach to grow wealth [1] - A sale is currently available, offering 75% savings compared to the regular price of $1,668 [1] - The sale will end once 3 more members sign up [1] - The company offers a money-back guarantee for new members [1]