Core Insights - WD-40 Company reported a solid Q3 with net revenue of $155.05 million, reflecting a 9% increase, surpassing consensus estimates [4] - The company has a strong balance sheet with low debt levels, allowing for share repurchases to offset share-based compensation dilution [3] - The dividend yield stands at 1.54%, with an annual dividend of $3.52, and a history of consistent dividend payments since 1990 [19][10] Financial Performance - Revenue growth was driven by core maintenance products, which increased by 10%, with the original WD-40 product up by 11% and specialty products up by 13% [5] - The Americas region, contributing about 50% of revenue, grew by 6%, with Latin America showing significant strength [6] - Total assets increased while cash and inventory declined, indicating improved receivables and debt reduction [3] Market Dynamics - Institutional investors have been active buyers, providing solid support, while short-sellers have maintained a significant interest above 10% [2][8] - The stock price is currently at $228.63, with a P/E ratio of 44.92, and a price target set at $303, indicating a potential upside of 35% [9][21] - The company has a low beta of -0.07, suggesting minimal correlation with the broader market, which enhances its appeal as a stable investment [20] Dividend Strategy - WD-40 has a track record of regular dividend increases since 2005, with expectations for this trend to continue [9][20] - The company is positioned to maintain its dividend growth due to strong cash flow generation and low capital requirements [20]

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]

(1) Includes amortization of definite-lived intangible assets and cloud computing amortization. Critical Accounting Estimates Table of Contents Table of Contents Commercial Commitments Information on Recently Issued Accounting Standards that could potentially impact our consolidated financial statements and related disclosures is incorporated by reference to Part I—Item 1, "Notes to Condensed Consolidated Financial Statements" Note 2 – Basis of Presentation and Summary of Significant Accounting Policies, in ...

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]

WD-40 Company (NASDAQ:WDFC) Q2 2024 Results Conference Call April 9, 2024 5:00 PM ET Company Participants Ross Cooling - Communications Manager, Investor Relations and Stakeholder Engagement Steve Brass - President and Chief Executive Officer Sara Hyzer - Vice President, Finance and Chief Financial Officer Conference Call Participants Daniel Rizzo - Jefferies Linda Bolton Weiser - D.A. Davidson Operator Ladies and gentlemen, thank you for standing by. Good day, and welcome to the WD-40 Company Second Quarte ...

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].

Financial Performance - Global net sales for the second quarter increased by 7 percent to $139.1 million compared to the prior year fiscal quarter, with year-to-date total net sales reaching $279.5 million, a 10 percent increase[4]. - Net income for the second quarter was $15.5 million, a decrease of 6 percent from the prior year fiscal quarter, while year-to-date net income increased by 8 percent to $33.0 million[4]. - Net sales for the three months ended February 29, 2024, increased to $139.1 million, up 6.9% from $130.2 million in the same period of 2023[30]. - Gross profit for the six months ended February 29, 2024, was $148.5 million, representing a 13.9% increase compared to $130.3 million in the prior year[30]. - Net income for the six months ended February 29, 2024, was $33.0 million, a 4.9% increase from $30.5 million in the same period of 2023[30]. Sales by Segment - The Americas segment accounted for 46 percent of total net sales, with a 1 percent increase in net sales, primarily driven by WD-40 Multi-Use Product growth[9]. - The EIMEA segment represented 39 percent of total net sales, with a 16 percent increase, largely due to a 17 percent rise in WD-40 Multi-Use Product sales[9]. - The Asia-Pacific segment contributed 15 percent of total net sales, with a 4 percent increase, driven by a 3 percent rise in WD-40 Multi-Use Product sales[9]. - Maintenance products, the primary growth focus, represented 94 percent of total net sales, increasing by 7 percent in the second quarter[10]. Guidance and Future Outlook - The company is raising its fiscal year 2024 net income guidance to a range of $67.7 million to $71.8 million, up from the previous range of $65 million to $70 million[21]. - Diluted earnings per share guidance has been increased to a range of $5.00 to $5.30, compared to the prior guidance of $4.78 to $5.15[21]. Operating Expenses and Cash Flow - Operating expenses rose to $52.0 million for the three months ended February 29, 2024, compared to $43.9 million in the same period of 2023, reflecting a 18.5% increase[30]. - The company provided a net cash from operating activities of $44.9 million for the six months ended February 29, 2024, compared to $20.9 million in the same period of 2023[32]. Balance Sheet Highlights - Cash and cash equivalents at the end of the period increased to $55.4 million from $48.1 million at the beginning of the period[32]. - Total current assets as of February 29, 2024, were $250.5 million, slightly up from $248.5 million as of August 31, 2023[28]. - Total liabilities decreased to $225.7 million as of February 29, 2024, from $227.8 million as of August 31, 2023[28]. - The company’s total stockholders' equity increased to $216.3 million as of February 29, 2024, compared to $210.2 million as of August 31, 2023[28]. Strategic Decisions - The company announced the acquisition of its Brazilian marketing distributor and plans to sell its U.S. and U.K. Homecare and Cleaning Products portfolio to focus on higher-margin maintenance products[3]. - The company reported a basic earnings per share of $1.14 for the three months ended February 29, 2024, down from $1.21 in the same period of 2023[30].

WD-40 Company (NASDAQ:WDFC) Q1 2024 Earnings Conference Call January 9, 2024 5:00 PM ET Company Participants Wendy Kelley - Vice President of Stakeholder and Investor Engagement Steve Brass - President and Chief Executive Officer Sara Hyzer - Vice President and Chief Financial Officer Conference Call Participants Linda Bolton Weiser - D.A. Davidson Daniel Rizzo - Jefferies Operator Ladies and gentlemen, thank you for standing by. Good day and welcome to the WD-40 Company's First Quarter Fiscal Year 2024 Ear ...

Financial Performance - Consolidated net sales increased by $15.5 million, or 12%, compared to the same period last year, with a favorable impact of $3.8 million from foreign currency exchange rates[82] - Consolidated net income increased by $3.5 million, or 25%, with a constant currency basis showing a 21% increase[82] - Diluted earnings per share were $1.28, compared to $1.02 in the prior fiscal year period, reflecting a 25% increase[82] - Gross profit as a percentage of net sales rose to 53.8%, up from 51.4% in the prior year[82] - Gross profit for the three months ended November 30, 2023, was $75.6 million, an increase of $11.3 million from the prior year, with a gross margin of 53.8%[99] - Adjusted EBITDA as a percentage of net sales increased to 19% from 17% year-over-year[121] - Net income rose 25% to $17.5 million, or $1.28 per share, compared to $14.0 million, or $1.02 per share, in the prior year[115] Sales Performance by Segment - Net sales in the Americas segment increased by $6.1 million, or 10%, driven by a 12% increase in WD-40 Multi-Use Product sales[86] - EIMEA segment net sales rose by $7.98 million, or 20%, with WD-40 Multi-Use Product sales increasing by 23%[90] - Total maintenance products net sales increased by $15.8 million, or 14%, compared to the prior year[83] - The EIMEA segment accounted for 35% of consolidated sales for the three months ended November 30, 2023[82] - EIMEA segment net sales increased by $6.9 million, or 23%, driven by higher sales volume and price increases[93] - WD-40 Multi-Use Product sales in Asia-Pacific increased by $0.9 million, or 4%, with China sales up $0.5 million, or 8%[97] - Total net sales for the Asia-Pacific segment increased by 6% to $27.6 million, with a notable 131% increase in other maintenance products[94] - The favorable impact of foreign currency exchange rates contributed $3.6 million to net sales across various brands in the Asia-Pacific segment[96] Operating Expenses - SG&A expenses rose to $44.1 million, a 10% increase from the previous year, primarily due to higher employee-related costs and increased travel expenses[101] - Research and development costs increased to $1.9 million, up from $1.3 million, reflecting a focus on sustainability and product innovation[103] - A&P expenses increased by 31% to $7.0 million, driven by higher promotional programs and marketing support[104] - Total operating expenses increased to $51.4 million from $45.6 million, maintaining cost of doing business at 36% of net sales[120] Cash Flow and Financing - Cash provided by operating activities increased by $16.5 million to $26.9 million, driven by a net income increase of approximately $3.5 million[128] - Net cash used in investing activities decreased to $0.7 million, primarily due to lower manufacturing-related capital expenditures[130] - Net cash used in financing activities increased to $24.5 million, primarily due to net repayments on the revolving credit facility of $9.7 million[131] - The company has $50.3 million in cash and cash equivalents as of November 30, 2023, with no ongoing issues anticipated in repaying borrowings[125] Shareholder Returns - The Board approved a 2023 Repurchase Plan, authorizing up to $50.0 million in share repurchases, with $47.6 million remaining available[126] - The company's Board approved a 6% increase in the regular quarterly cash dividend, raising it from $0.83 per share to $0.88 per share, payable on January 31, 2024[137] Accounting and Compliance - The company’s financial statements are prepared in accordance with generally accepted accounting principles in the United States[138] - There have been no material changes in critical accounting policies and estimates since the last annual report filed on October 23, 2023[140] - No recently issued accounting standards are expected to have a material impact on the consolidated financial statements[141] - Revenue recognition and accounting for income taxes require subjective judgments and estimates, which may materially differ from actual results[139] Supplier Relationships - The company has ongoing relationships with various third-party suppliers and contract manufacturers, with minimum purchase obligations that are immaterial compared to historical purchase volumes[133] - The company communicates supply needs to contract manufacturers based on short-term projections ranging from two to six months[133] - The company is obligated to work with contract manufacturers to sell through all products held during the termination notification period[134] - As of November 30, 2023, there were no outstanding commitments with other manufacturers to purchase finished goods and components[135] - The amounts for inventory purchased under termination commitments with contract manufacturers have been immaterial[134]