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]

Q4 & FY24 Earnings Results OCTOBER 17, 2024 Forward-Looking Statements Except for the historical information contained herein, this presentation contains "forward-looking statements" within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are generally identified with words such as "believe," "expect," "intend," "plan," "project," "could," "may," "aim," "anticipate," "target," "estimate" and similar expressions. Such statements reflect the ...

Financial Data and Key Metrics Changes - The company reported fourth quarter net sales of $156 million, representing an increase of over 11% compared to the prior year, marking the second consecutive record-breaking sales quarter [6][51] - For the full fiscal year, revenue reached $583 million, up 8% on a non-GAAP constant currency basis, aligning with expectations [32] - Gross margin improved to 54.1% in the fourth quarter, an increase of 270 basis points year-over-year, and is moving closer to the target of 55% [7][35] Business Line Data and Key Metrics Changes - Sales of WD-40 Multi-Use Product reached $453 million for the fiscal year, an 11% increase over the prior year [7] - In the Americas, sales grew approximately 6% to $79 million, driven primarily by higher sales volumes in Latin America, which increased by 63% [8][12] - Sales of WD-40 Specialist products increased by 11% to nearly $74 million for the fiscal year, with notable growth in all three trade blocks [22] Market Data and Key Metrics Changes - Sales in EIMEA grew approximately 16% to $59 million, with a constant currency increase of 15% [13] - Asia Pacific sales increased by 21% to $18 million, driven by a 26% increase in WD-40 Multi-Use Product sales [15] - The company experienced strong growth in key markets, including 206% in India and 66% in Turkey [57] Company Strategy and Development Direction - The company is focused on its Four-by-Four strategic framework, which includes geographic expansion, premiumization, driving WD-40 Specialist growth, and accelerating digital commerce [17][21] - The company estimates a global benchmark sales opportunity of approximately $1.6 billion for WD-40 Multi-Use Product, with only 28% achieved to date, indicating significant growth potential [19][52] - The divestiture of home care and cleaning brands is expected to enhance focus on higher growth, higher margin maintenance products [34][46] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges and capitalize on opportunities, emphasizing the strong foundation built over seven decades [5] - The company anticipates gross margin recovery to 55% by the end of fiscal year 2026, with potential for earlier achievement post-divestiture [36] - Management highlighted the importance of employee engagement and operational excellence as key drivers of future success [25][28] Other Important Information - The company has reduced inventory levels by nearly $40 million or 34% since peaking in the first quarter of fiscal year 2023 [43] - Cash flow from operations for fiscal year 2024 was approximately $92 million, with plans to pay down higher interest rate borrowings [44] - The company is committed to sustainability and has taken significant steps to embed it into the business strategy [26][27] Q&A Session Summary Question: Pricing headwinds in the second half of '24 - Management indicated that the pricing headwinds were primarily related to mix rather than significant pricing changes [54] Question: Expectations for elevated SG&A expenses - Management confirmed that SG&A expenses are expected to remain elevated due to ongoing ERP investments and the integration of Brazil expenses [55] Question: Opportunities for direct business model expansion - Management expressed optimism about further direct market opportunities, highlighting strong growth in Brazil and Mexico [56][57] Question: Guidance for operating profit excluding household cleaning business - Management confirmed that the guidance for operating profit excludes the household cleaning business, reflecting uncertainty in the timing of the divestiture [60] Question: Gross margin guidance and oil price assumptions - Management explained that the gross margin guidance reflects ongoing supply chain initiatives and included an oil price assumption range of $70 to $90 [62][64] Question: Pro forma sales growth cadence - Management noted that sales growth is expected to be weighted towards the second half of the fiscal year, similar to the previous year [65][66]

Alexandr Lebedko Since 1953, WD-40 Company (NASDAQ:WDFC), a brand that spans the globe, has stood as a leading supplier of maintenance, home care, and cleaning products under the WD-40 Multi-Use product line of versatile maintenance products in aerosol, non-aerosol trigger spray, and liquid-bulk types. Its footprint is huge—the Americas, Europe, Middle East, Africa, Asia Pacific—and then down under in Australia. Its distribution network snakes from warehouse club stores, hardware stores, and automotive part ...

WD-40 is a famous name, but its stock price is just way too high to buy. Shares of the WD-40 Company (WDFC 3.04%) jumped 3.9% through 1:10 p.m. ET on Thursday after the famed manufacturer of household lubricants reported strong sales and earnings for its fiscal 2024 third-quarter last night. Heading into earning, analysts had expected WD-40 to report per-share profits of only $1.38 on $145.8 million in sales. In fact, it earned $1.46 per share on sales of $155 million, a beat on both the top and bottom line ...

Financial Data and Key Metrics Changes - The company reported consolidated net sales of $155 million for Q3 2024, an increase of over 9% year-over-year, marking a new record quarter [13][79] - Gross margin improved to 53.1%, up 70 basis points sequentially and 250 basis points compared to the same quarter last year [10][64] - Net income for the quarter was $19.8 million, a 5% increase from the prior year, with diluted earnings per share rising to $1.46 from $1.38 [73][84] Business Line Data and Key Metrics Changes - Sales in the Americas grew approximately 6% year-over-year to $75.1 million, with maintenance products growing over 10% [12][14] - Sales of WD-40 Multi-Use Products increased by 7% year-over-year, while WD-40 Specialists saw a 10% increase [16][22] - The home care and cleaning product brands experienced a decline of 15% in Q3, reflecting the company's strategic focus shift [27] Market Data and Key Metrics Changes - EIMEA sales grew approximately 13% year-over-year to $59.4 million, with WD-40 Multi-Use Products increasing by 17% [23][24] - Asia-Pacific sales rose approximately 14% to $20.5 million, driven by a 29% increase in maintenance products in China [28][29] - Latin America saw a significant sales increase of 32%, attributed to the acquisition of the Brazilian distributor and a direct market model [39][41] Company Strategy and Development Direction - The company is focused on its "Must-Win Battles," which include geographic expansion, premiumization, driving WD-40 Specialist growth, and accelerating digital commerce [35][37][45] - The strategic enablers supporting these battles include operational excellence, a people-first mindset, and building a sustainable business for the future [47][50][55] - The company aims to achieve a gross margin of 55% by the end of fiscal year 2026, with ongoing initiatives to improve operational efficiency and sales mix [67][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term growth targets, with maintenance product sales expected to grow by 5% to 8% in the Americas and 10% to 13% in Asia-Pacific [86][87] - The company anticipates continued strong performance in Q4, particularly in Asia-Pacific, due to favorable year-over-year comparisons [98][99] - Management highlighted the importance of brand-building and distribution expansion in driving future growth, especially in emerging markets like Brazil and Mexico [36][41] Other Important Information - The company is in the process of divesting its U.S. and U.K. home care and cleaning product brands, which represent approximately 4% of total sales [62] - The ERP implementation has stabilized, with most critical issues resolved, allowing for improved operational efficiency [58][60] - The company continues to return capital to shareholders through dividends and share repurchases, with a quarterly cash dividend of $0.88 per share approved [74][82] Q&A Session Summary Question: Gross margin outlook for FY '25 - Management indicated that while guidance for FY '25 is not provided yet, they are tracking towards the high end of the range for FY '24 and targeting 55% gross margin by FY '26 [91][92] Question: Sales growth comparison for Q4 - Management confirmed that Q4 comparisons are expected to be easier, particularly in Asia-Pacific, which had a weak quarter last year [96][99] Question: ERP implementation status in Europe - The ERP rollout has not yet occurred in Europe, with plans to prioritize smaller locations before considering a broader implementation [106][108] Question: IT spending and future CapEx - Management disclosed that the total cost of the ERP system's first wave was approximately $10 million, with ongoing IT investments expected to trend higher [116][119] Question: Growth in Specialist product lines - Management confirmed that core products within the Specialist range are driving growth, with a focus on expanding distribution and replacing underperforming products [120]

Part I [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for WD-40 Company for the periods ended May 31, 2024, including balance sheets, statements of operations, comprehensive income, stockholders' equity, cash flows, and notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows the company's financial position as of May 31, 2024, with total assets increasing to **$443.6 million** and total liabilities decreasing, leading to higher stockholders' equity Condensed Consolidated Balance Sheets (in thousands) | Account | May 31, 2024 | August 31, 2023 | | :--- | :--- | :--- | | **Total current assets** | $248,763 | $248,525 | | **Total assets** | $443,610 | $437,966 | | **Total current liabilities** | $105,241 | $88,842 | | **Total liabilities** | $221,368 | $227,788 | | **Total stockholders' equity** | $222,242 | $210,178 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations details the company's financial performance, with **net sales growing 10% to $434.6 million** and **net income increasing 7% to $52.9 million** for the nine months ended May 31, 2024 Key Performance Indicators (Nine Months Ended May 31, in thousands) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $434,566 | $396,803 | +9.5% | | Gross Profit | $230,882 | $202,095 | +14.2% | | Income from Operations | $72,301 | $66,489 | +8.7% | | Net Income | $52,860 | $49,418 | +7.0% | | Diluted EPS | $3.88 | $3.62 | +7.2% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement shows total comprehensive income, which was **$52.8 million** for the nine months ended May 31, 2024, remaining relatively flat due to foreign currency translation adjustments Comprehensive Income (in thousands) | Item | Nine Months Ended May 31, 2024 | Nine Months Ended May 31, 2023 | | :--- | :--- | :--- | | Net Income | $52,860 | $49,418 | | Foreign currency translation adjustment | ($94) | $3,299 | | **Total comprehensive income** | **$52,766** | **$52,717** | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement details changes in stockholders' equity, reflecting **net income of $52.9 million**, **cash dividends of $35.2 million**, and **common stock repurchases of $8.1 million** - Total stockholders' equity increased from **$210.2 million** at August 31, 2023, to **$222.2 million** at May 31, 2024[29](index=29&type=chunk) - During the nine months ended May 31, 2024, the company paid cash dividends totaling **$35.2 million** and repurchased **$8.1 million** of its common stock[29](index=29&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statement shows **net cash from operating activities of $64.8 million**, with **$9.1 million used in investing** and **$58.1 million used in financing** for the nine months ended May 31, 2024 Cash Flow Summary (Nine Months Ended May 31, in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $64,824 | $55,593 | | Net cash used in investing activities | ($9,103) | ($4,213) | | Net cash used in financing activities | ($58,145) | ($54,024) | | **Net (decrease) increase in cash** | **($2,843)** | **$560** | - Investing activities included **$6.2 million** for the acquisition of a business, net of cash acquired[53](index=53&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide additional detail and context for the financial statements, covering significant accounting policies, acquisitions, debt, revenue recognition, segment information, and other key financial matters - On March 4, 2024, a subsidiary acquired the company's Brazilian distributor, Theron Marketing Ltda., for total consideration of **$6.9 million**, resulting in **$1.5 million** of goodwill[86](index=86&type=chunk)[87](index=87&type=chunk) - The company's Board approved a share repurchase plan effective September 1, 2023, authorizing the acquisition of up to **$50.0 million** of its shares through August 31, 2025; during the nine months ended May 31, 2024, **34,250 shares** were repurchased for **$8.1 million**[130](index=130&type=chunk) - The effective income tax rate for the nine months ended May 31, 2024, was **23.1%**, an increase from **21.5%** in the prior year period, primarily due to higher tax rates in certain foreign jurisdictions[140](index=140&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the three and nine months ended May 31, 2024, highlighting a **10% increase in consolidated net sales** and improvements in gross margin, alongside analysis of operating expenses and liquidity [Overview](index=22&type=section&id=Overview) This section provides a high-level summary of the company's business and financial highlights, including a **10% increase in consolidated net sales to $434.6 million** and the acquisition of its Brazilian distributor - On March 4, 2024, the company acquired its Brazilian distributor, Theron, and transitioned to a direct distribution model in Brazil[174](index=174&type=chunk) Financial Highlights (Nine Months Ended May 31, 2024 vs 2023, in thousands) | Metric | Change | Key Drivers | | :--- | :--- | :--- | | Consolidated Net Sales | +10% | Volume increases (+$23.0M), price increases (+$6.5M), favorable currency impact (+$8.3M) | | Gross Margin | 53.1% (from 50.9%) | N/A | | Consolidated Net Income | +7% | Favorable currency impact of $1.5M | | Diluted EPS | $3.88 (from $3.62) | N/A | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section details operating results, showing **10% growth in total maintenance products sales**, a **4% decline in homecare and cleaning products sales**, and a **220 basis point improvement in gross margin** Net Sales by Product Line (Nine Months Ended May 31, in thousands) | Product Line | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Total maintenance products | $410,546 | $371,741 | +10% | | HCCP | $24,020 | $25,062 | -4% | | **Total net sales** | **$434,566** | **$396,803** | **+10%** | - Gross margin for the nine months ended May 31, 2024, increased to **53.1%** from **50.9%** in the prior year, an improvement of **220 basis points**[223](index=223&type=chunk) - Operating expenses for the nine months increased by **17%** to **$158.6 million**, primarily due to higher employee-related costs, professional services fees, and travel expenses[177](index=177&type=chunk)[248](index=248&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company's financial condition and liquidity remain strong, with **$64.8 million in cash generated from operating activities** and compliance with all debt covenants Cash Flow Summary (Nine Months Ended May 31, in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $64,824 | $55,593 | | Net cash used in investing activities | ($9,103) | ($4,213) | | Net cash used in financing activities | ($58,145) | ($54,024) | - The increase in net cash from operating activities was driven by higher net income and favorable changes in non-cash adjustments[298](index=298&type=chunk) - As of May 31, 2024, **$41.9 million** remains available for share repurchases under the 2023 Repurchase Plan[271](index=271&type=chunk) [Critical Accounting Estimates](index=41&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting estimates, involving subjective judgments, include revenue recognition and income taxes, with no material changes since the last Annual Report - Critical accounting estimates requiring significant judgment are related to revenue recognition and income taxes[12](index=12&type=chunk) - No material changes have occurred in the company's critical accounting estimates since the last Annual Report[304](index=304&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates market risk disclosures by reference from the company's most recent Form 10-K, indicating no material changes - Information regarding market risk is incorporated by reference from the company's most recent Form 10-K[323](index=323&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of May 31, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of May 31, 2024[324](index=324&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[306](index=306&type=chunk) Part II [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from the financial statement notes, with no pending proceedings expected to result in a probable loss - The company is subject to various claims and lawsuits in the ordinary course of business but believes no pending proceedings will result in a probable loss or have a materially adverse impact[112](index=112&type=chunk)[308](index=308&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the company's risk factors from those disclosed in its Annual Report on Form 10-K for the fiscal year ended August 31, 2023 - No material changes to the risk factors disclosed in the company's 2023 Form 10-K have been identified[7](index=7&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities during the third quarter of fiscal year 2024, with **11,250 shares repurchased at an average price of $246.69 per share** Share Repurchases (Three Months Ended May 31, 2024) | Period | Total of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 2024 | 5,000 | $255.65 | | April 2024 | 5,000 | $240.11 | | May 2024 | 1,250 | $237.15 | | **Total** | **11,250** | **$246.69** | - As of May 31, 2024, approximately **$41.9 million** remained available for future share repurchases under the publicly announced plan[327](index=327&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications, debt and acquisition agreements, and iXBRL formatted financial statements - Exhibits filed include CEO and CFO certifications pursuant to the Sarbanes-Oxley Act, the Quota Purchase Agreement for the Theron acquisition, and amended credit agreements[311](index=311&type=chunk)[15](index=15&type=chunk)[328](index=328&type=chunk)

Dividend and Share Repurchase - The Company declared a quarterly dividend of $0.88 per share, payable on July 31, 2024[1] - A share repurchase plan was approved, allowing the Company to buy back up to $50.0 million of its shares, with $8.1 million spent to repurchase 34,250 shares by the end of the third quarter[1] Financial Projections - Fiscal Year 2024 net sales growth is projected between 6% and 12%, with expected net sales of $570 million to $600 million on a non-GAAP constant currency basis[2] - Gross margin for the full year is anticipated to be between 51.5% and 53%[2] - Net income is projected to be between $67.7 million and $71.8 million, with diluted earnings per share expected between $5.00 and $5.30[2] Sales Performance - Net sales of maintenance products, the primary focus, represented 95% of total net sales in the third quarter, increasing by 10% compared to the prior year[10] - Total net sales increased by 9% in the third quarter compared to the prior year fiscal quarter, reaching $155,045 million[27] - Total maintenance product sales reached $147.2 million, reflecting a growth of 10 percent year-over-year[42] - The Americas segment reported net sales of $75.1 million, a 6 percent increase year-over-year[39] - The EIMEA segment accounted for 38% of total net sales in the third quarter, with a 13% increase in net sales primarily driven by a 17% increase in WD-40 Multi-Use Product sales[33] - The Asia-Pacific segment represented 13% of total net sales, with a 14% increase in net sales, largely due to an 11% increase in WD-40 Multi-Use Product sales[34] - WD-40 Specialist sales in the Asia-Pacific segment increased by 30%, attributed to successful brand building and customer order timing[35] Profitability Metrics - Gross profit for the third quarter was $82,388 million, up from $71,762 million in the same quarter last year, representing a 14.5% increase[27] - Gross margin improved to 53.1 percent, up from 50.6 percent in the prior year fiscal quarter[42] - Net income for the quarter was $19.8 million, a 5 percent increase from the prior year fiscal quarter[42] - Net income for the nine months ended May 31, 2024, was $52,860 million, compared to $49,418 million for the same period last year, reflecting a 4.9% increase[31] - Diluted earnings per share were $1.46, compared to $1.38 in the prior year fiscal quarter[42] Expenses and Liabilities - Selling, general, and administrative expenses increased by 19 percent to $45.6 million compared to the prior year fiscal quarter[42] - Advertising and sales promotion expenses rose by 22 percent to $9.3 million, accounting for 6.0 percent of total net sales[42] - Total current liabilities increased to $105,241 million from $88,842 million, primarily due to higher short-term borrowings[27] - The company reported a total of $221,368 million in liabilities, a decrease from $227,788 million in the previous period[27] Strategic Initiatives - The Company is actively pursuing the divestiture of its U.S. and U.K. homecare and cleaning product portfolios, engaging an investment bank for potential buyers[3] - The company reiterated its fiscal year 2024 guidance during the earnings call[37]

Financial Data and Key Metrics Changes - For Q2 2024, the company reported net sales of $139 million, a 7% increase year-over-year, with a 5% growth excluding currency impacts [17][18] - Year-to-date net sales grew 10% on a reported basis and 7% excluding currency impacts, aligning with FY '24 guidance and long-term growth targets [17][18] - Gross margin improved by 160 basis points to 52.4%, benefiting from a favorable sales mix and lower costs associated with specialty chemicals [42][44] Business Line Data and Key Metrics Changes - Sales in the Americas reached approximately $63.5 million, growing 1% year-over-year, driven by strong demand in the U.S. despite ERP implementation challenges [19][20] - EIMEA sales increased 16% to $54.3 million, with WD-40 Multi-Use Product and WD-40 Specialist sales up 17% and 23% respectively [21][22] - Asia Pacific sales were $21.3 million, up 4%, with home care and cleaning products increasing by 23% [24][26] Market Data and Key Metrics Changes - The Americas segment accounted for 46% of global business, while EIMEA made up 39% and Asia Pacific contributed 15% [20][23][26] - The company expects the Brazilian market to drive revenue growth exceeding $10 million in the next year following the acquisition of Theron Marketing [10][12] Company Strategy and Development Direction - The company is focusing on geographic expansion, premiumization, and digital commerce as part of its 4x4 strategic framework [7][28][32] - The decision to divest U.S. and UK home care and cleaning product portfolios aims to reinvest in core maintenance products for long-term growth [11][12] - The implementation of a new ERP system is expected to enhance operational efficiency despite initial disruptions [14][40][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of sales trends and gross margin expansion, which supports the revised guidance for FY 2024 [18][60] - The company anticipates that the divestiture of home care products will have a short-term negative impact on sales but will allow for greater focus on higher-margin products [12][65] - Management remains optimistic about achieving revenue growth in key markets, particularly in Brazil and China [81][88] Other Important Information - The company has maintained an employee engagement score of around 93%, reflecting a strong organizational culture [34][66] - The board approved a quarterly cash dividend of $0.88 per share, with plans for continued share repurchases [55][56] Q&A Session Summary Question: What caused the 24% decline in Canada? - The decline was due to the hard conversion of the Smart Straw product, which negatively impacted revenue but is expected to recover in the second half of the year [67][68] Question: What is the EBITDA contribution from the home care products? - The home care products generated approximately $26 million in revenue, representing about 5% of overall sales, with lower gross margins [69] Question: Are there more acquisition opportunities like the Brazilian distributor? - The company is focused on geographic expansion and has identified top growth markets, with potential for further investments in those areas [70][72] Question: What is the impact of ERP implementation on revenue? - The ERP disruption resulted in an estimated $2.4 million reduction in top-line volume for the quarter, primarily in the U.S. [77][78] Question: Can you clarify the $10 million revenue opportunity in Brazil? - The $10 million represents an incremental revenue opportunity compared to the previous $2 million under the royalty model, with expectations for significant growth [79][81] Question: What were the volume and pricing impacts for the quarter? - For the quarter, volume increased by 2% and pricing had a 3% impact, with expectations for pricing to decrease in the second half of the year [83][85] Question: What is the outlook for Asia Pacific growth? - The company expects strong growth in Asia Pacific, particularly in China, with overall growth masked by currency fluctuations [87][88] Question: What drove the increase in EPS guidance? - The increase in EPS guidance is primarily due to improved visibility on gross margin performance for the second half of the year [89]

Financial Performance - Consolidated net sales increased by $24.4 million, or 10%, compared to the same period last year, with sales volume contributing approximately $9.9 million and average selling price increases adding about $7.7 million[91]. - Consolidated net income increased by $2.5 million, or 8%, with a favorable impact of $1.2 million from foreign currency exchange rates[91]. - Diluted earnings per share were $2.42, compared to $2.23 in the prior fiscal year[91]. - Net income decreased 6% to $15.5 million, or $1.14 per common share for the three months ended February 29, 2024[137]. - Net income increased 8% to $33.0 million, or $2.42 per common share for the six months ended February 29, 2024[138]. - Cash provided by operating activities increased by $23.9 million to $44.9 million for the six months ended February 29, 2024, primarily driven by a net income increase[151]. - The company had $55.4 million in cash and cash equivalents as of February 29, 2024, indicating strong liquidity[148]. Sales Performance - The EIMEA segment accounted for 37% of consolidated sales, with net sales increasing by 16% in the three months ended February 29, 2024[93]. - Total maintenance products net sales increased by 10% to $263.4 million for the six months ended February 29, 2024[92]. - The Americas segment reported a 1% increase in net sales to $63.5 million for the three months ended February 29, 2024[93]. - Net sales in the Americas segment increased by $6.7 million, or approximately 6.7%, year-to-date, driven by a $4.0 million increase in average selling prices and a $1.5 million positive currency impact[95]. - WD-40 Multi-Use Product sales in the Americas increased by $6.0 million, or 7%, with significant contributions from Latin America (up $3.5 million, or 20%) and the U.S. (up $3.2 million, or 5%)[98]. - In the EIMEA segment, net sales increased by $15.5 million, or 18%, year-to-date, with WD-40 Multi-Use Product sales rising by $12.8 million, or 19%[99]. - Homecare and cleaning product sales in the Americas decreased by $0.5 million, or 6%, primarily due to lower demand in the U.S.[98]. - In the Asia-Pacific segment, total net sales increased by $2.3 million, or 5%, with WD-40 Multi-Use Product sales up by $1.3 million, or 3%[106]. - The WD-40 Multi-Use Product saw a sales increase in France, India, and Iberia, contributing significantly to the overall growth in the EIMEA segment[103]. Operating Expenses - Operating expenses rose by 18% to $52 million for the three months ended February 29, 2024[92]. - Selling, General and Administrative (SG&A) expenses increased by $7.3 million, or 19%, for the three months ended February 29, 2024, primarily due to higher employee-related costs[113][114]. - Research and development costs increased to $1.7 million for the three months ended February 29, 2024, compared to $1.2 million in the prior year, reflecting a focus on sustainability and product innovation[116]. - Advertising and Sales Promotion (A&P) expenses rose by $740,000, or 12%, for the three months ended February 29, 2024, driven by increased promotional programs[118][119]. - Total operating expenses increased to $52 million for the three months ended February 29, 2024, compared to $43.9 million for the same period in 2023[143]. Profitability Metrics - Gross profit as a percentage of net sales rose to 53.1%, up from 51.1% in the prior year[91]. - Gross profit for the three months ended February 29, 2024, was $72.9 million, up $6.9 million from the prior year, resulting in a gross margin increase of 160 basis points to 52.4%[110][111]. - Gross margin for the Americas segment increased from 48.1% to 49.4% primarily due to decreases in the costs of petroleum-based specialty chemicals[124]. - Gross margin for the EIMEA segment increased from 52.3% to 53.7% due to favorable changes in sales mix and decreases in costs of petroleum-based specialty chemicals[126]. - Gross margin for the Asia-Pacific segment increased from 55.3% to 58.5% due to favorable price increases and changes in input costs[128]. Future Outlook - New product introductions and product line extensions are anticipated to positively impact future sales growth[87]. - The company plans to continue focusing on product innovation and market expansion strategies to drive future performance[87]. Shareholder Returns - The Board approved a share repurchase plan allowing for the acquisition of up to $50.0 million of outstanding shares, with $44.7 million remaining available as of February 29, 2024[149]. - The company declared a cash dividend of $0.88 per share on March 19, 2024, payable on April 30, 2024[161]. Currency Impact - Net sales were negatively impacted by $0.7 million due to foreign currency exchange rate changes, but would have increased by 6% on a constant currency basis[110][112]. - The EIMEA segment experienced a favorable currency impact of $6.0 million, with constant currency sales increasing by 11%[105]. - The net effect of exchange rate changes resulted in a decrease in cash of $0.3 million for the six months ended February 29, 2024, compared to an increase of $2.8 million in the same period of 2023[156].