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]

Part I [Business](index=4&type=section&id=Item%201.%20Business) WD-40 Company is a global marketing organization focused on maintenance and homecare products, driven by a 'four-by-four' growth strategy and outsourced manufacturing - The company's sales are divided into two main product groups: maintenance products (sold worldwide) and homecare/cleaning products (sold primarily in North America, U.K., and Australia)[25](index=25&type=chunk) - WD-40's growth strategy is centered on a 'four-by-four' framework, which includes four 'Must-Win Battles' to increase maintenance product sales and four 'Strategic Enablers' focused on operational excellence[26](index=26&type=chunk)[27](index=27&type=chunk)[32](index=32&type=chunk) - The company employs **613 people** across **17 countries**, with a global distribution of its workforce: **36% in the Americas**, **42% in EMEA**, **14% in Asia-Pacific**, and **8% corporate**[29](index=29&type=chunk) - Manufacturing of finished goods is outsourced to third-party manufacturers in various countries, while the company produces the concentrate for its WD-40 products at its own facilities and through contract manufacturers[41](index=41&type=chunk)[42](index=42&type=chunk) [Products](index=6&type=section&id=Products) This section details the company's product portfolio, distinguishing between primary growth-driving maintenance products and harvest-focused homecare/cleaning brands - **Maintenance Products:** This group includes the signature WD-40® Multi-Use Product, the WD-40 Specialist® line for professional use, 3-IN-ONE® multi-purpose oils, and the GT85® bike maintenance line[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - **Homecare and Cleaning Products:** This portfolio includes brands such as 2000 Flushes®, Spot Shot®, Carpet Fresh®, 1001®, Lava®/Solvol®, and X-14® These are considered 'harvest brands' with reduced marketing investment as the company focuses on maintenance products[28](index=28&type=chunk)[39](index=39&type=chunk) [Manufacturing and Raw Materials](index=7&type=section&id=Manufacturing%20and%20Raw%20Materials) The company outsources finished goods manufacturing to third parties globally and faces input cost inflation due to reliance on limited raw material suppliers - The company outsources its finished goods manufacturing to third-party contractors in the U.S., Mexico, Brazil, U.K., Italy, China, and other countries[41](index=41&type=chunk) - WD-40 relies on a limited number of suppliers for raw materials, packaging, and components, including single-source suppliers Key components like specialty chemicals and aerosol cans are subject to market price fluctuations[44](index=44&type=chunk) - The company has been experiencing input cost inflation and has implemented price increases and cost-saving initiatives to mitigate these pressures[44](index=44&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from adverse economic conditions, supply chain disruptions, raw material cost volatility, foreign currency fluctuations, cybersecurity threats, and intense competition - **Economic Conditions:** Adverse global economic conditions, inflation, and reduced consumer spending could decrease demand for the company's products[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - **Supply Chain & Costs:** Reliance on a limited base of third-party manufacturers and suppliers creates risks of disruption Volatility in the cost of raw materials (like specialty chemicals and aerosol cans), transportation, and other inputs could harm financial results[61](index=61&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - **Global Operations & Currency Risk:** With approximately **61% of sales outside the U.S.** in FY2023, the company is exposed to political instability, trade restrictions, and foreign currency exchange rate risks **46% of revenues** were generated in currencies other than the U.S. Dollar[63](index=63&type=chunk)[64](index=64&type=chunk) - **Brand Reputation & Competition:** Erosion of the success and reputation of leading brands, particularly the WD-40 Brand, could negatively impact the business The company faces intense competition from similar and alternative products, some from larger companies with greater financial resources[58](index=58&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk) - **Cybersecurity & IT Systems:** Malfunctions, implementation issues with new ERP systems, or cyberattacks on critical information systems could disrupt business operations[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - **Customer Dependence:** A large percentage of net sales comes from a limited number of large retail customers The loss of, or a reduction in orders from, a significant customer could materially affect the business[94](index=94&type=chunk) [Unresolved Staff Comments](index=20&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[112](index=112&type=chunk) [Properties](index=20&type=section&id=Item%202.%20Properties) The company owns its corporate office in San Diego and a UK facility, while leasing various other global office, R&D, and warehouse spaces - **Americas:** Owns an office in San Diego, CA Leases offices in Miami, FL; Pine Brook, NJ; Toronto, Canada; and Monterrey, Mexico[113](index=113&type=chunk) - **EMEA:** Owns an office and plant in Milton Keynes, UK Leases branch offices in Germany, France, Italy, Spain, Portugal, and the Netherlands[114](index=114&type=chunk) - **Asia-Pacific:** Leases office space in Australia, China, and Malaysia[115](index=115&type=chunk) [Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 12 — Commitments and Contingencies in the consolidated financial statements - The required information is incorporated by reference from Note 12 of the financial statements[116](index=116&type=chunk) [Mine Safety Disclosures](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[117](index=117&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ, with a recent dividend increase and a new $50.0 million share repurchase plan effective September 2023 - Common stock is traded on the NASDAQ Global Select Market under the symbol WDFC[120](index=120&type=chunk) - The quarterly cash dividend was increased by **6% from $0.78 to $0.83 per share** on December 13, 2022[121](index=121&type=chunk) - A new share repurchase plan authorizing up to **$50.0 million** in share buy-backs became effective on September 1, 2023, and will run through August 31, 2025[124](index=124&type=chunk) [Selected Financial Data](index=22&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is reserved as the requirement for selected financial data under Item 301 of Regulation S-K has been eliminated - This item is reserved pursuant to SEC amendments[125](index=125&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2023, consolidated net sales grew 4% to $537.3 million due to price increases, improving gross margin to 51.0%, but net income decreased 2% to $66.0 million due to higher operating expenses Financial Performance Overview | Financial Metric | FY 2023 | FY 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Sales | $537.3M | $518.8M | +4% | | Gross Profit | $274.2M | $254.8M | +8% | | Gross Margin | 51.0% | 49.1% | +190 bps | | Income from Operations | $89.7M | $87.3M | +3% | | Net Income | $66.0M | $67.3M | -2% | | Diluted EPS | $4.83 | $4.90 | -1% | - Net sales growth of **4%** was driven by price increases (+$81.9 million), partially offset by lower sales volume (-$45.8 million) and unfavorable foreign currency exchange rates (-$17.7 million)[131](index=131&type=chunk) - The company suspended sales to Russia and Belarus in March 2022, which continues to unfavorably impact business Prior to the suspension, these markets represented **3-4% of consolidated net sales**[136](index=136&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) In FY2023, Americas sales grew 11% due to price increases, EMEA sales fell 7% from currency and Russia suspension, and Asia-Pacific sales rose 8% due to eased lockdowns and promotions Segment Net Sales | Segment | FY 2023 Net Sales | FY 2022 Net Sales | Change (%) | | :--- | :--- | :--- | :--- | | Americas | $266.8M | $240.2M | +11% | | EMEA | $190.8M | $204.7M | -7% | | Asia-Pacific | $79.7M | $73.9M | +8% | - **Americas:** Sales increased **11%** due to price increases (+$40.1 million) that offset volume declines (-$14.4 million) U.S. sales grew **17%**, while Latin America sales decreased **8%**[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - **EMEA:** Sales decreased **7%** (but increased **1%** in constant currency) The decline was driven by unfavorable currency (-$14.9 million), suspension of sales to Russia (-$8.3 million), and volume declines in other markets (-$27.0 million), which were partially offset by price increases (+$36.3 million)[144](index=144&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk) - **Asia-Pacific:** Sales grew **8%** (**13%** in constant currency), driven by higher volumes in China and Asia distributor markets following the easing of COVID-19 lockdowns, along with price increases[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Gross margin increased by **190 bps**, primarily due to a **720 bps** favorable impact from sales price increases, which was significantly offset by higher costs for aerosol cans (**-290 bps**) and specialty chemicals (**-260 bps**)[155](index=155&type=chunk) - SG&A expenses increased **12% to $154.7 million**, mainly due to higher employee-related costs (+$13.0 million), increased travel and meeting expenses (+$4.2 million), and higher professional services fees (+$3.4 million)[156](index=156&type=chunk)[157](index=157&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow significantly increased to $98.4 million in FY2023 due to inventory changes, while financing cash flow rose to $85.0 million from credit facility repayments, maintaining a strong financial position Cash Flow Activity | Cash Flow Activity (in millions) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $98.4 | $2.6 | | Net cash used in investing activities | ($6.2) | ($7.7) | | Net cash used in financing activities | ($85.0) | ($38.0) | - The substantial increase in operating cash flow was primarily due to a **$72.6 million** favorable impact from changes in inventory levels, as inventory decreased in FY2023 compared to a significant build-up in FY2022[186](index=186&type=chunk) - As of August 31, 2023, total borrowings were **$120.5 million**, consisting of **$52.9 million** from the revolving credit facility and **$67.6 million** in fixed-rate senior notes[182](index=182&type=chunk)[338](index=338&type=chunk) - A new **$50.0 million** share repurchase plan became effective on September 1, 2023, authorized through August 31, 2025[184](index=184&type=chunk) [Critical Accounting Policies and Estimates](index=38&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies, Revenue Recognition and Accounting for Income Taxes, involve significant management judgment and estimates, particularly for variable consideration and tax positions - **Revenue Recognition:** Sales are recognized when control transfers to the customer The transaction price is recorded net of estimated variable consideration (rebates, discounts, returns) A **10% difference** in the accrual estimate for sales incentives at year-end would have impacted net sales by approximately **$1.3 million**[199](index=199&type=chunk)[201](index=201&type=chunk) - **Accounting for Income Taxes:** This policy requires significant judgment in determining the effective tax rate, establishing valuation allowances for deferred tax assets, and accounting for uncertain tax positions[202](index=202&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, commodity price volatility impacting specialty chemicals, and interest rate changes on its variable-rate revolving credit facility - **Foreign Currency Risk:** The company is exposed to translation risk as all international subsidiaries operate in functional currencies other than the U.S. Dollar It uses forward contracts to hedge some non-functional currency asset balances[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - **Commodity Price Risk:** Volatility in oil prices directly impacts the cost of specialty chemicals, which can negatively affect gross margins The company does not currently hedge crude oil price volatility[209](index=209&type=chunk) - **Interest Rate Risk:** The primary exposure is from the variable interest rate on the **$150.0 million** revolving credit facility, which had a **$52.9 million** balance at year-end A **one percentage point increase** in variable rates would have reduced pretax earnings by approximately **$0.5 million** in FY2023[210](index=210&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section indicates that the company's consolidated financial statements and the Report of Independent Registered Public Accounting Firm are included in Item 15 of the report - The consolidated financial statements for the fiscal years ended August 31, 2023 and 2022, and the independent auditor's report are included in Item 15[211](index=211&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=40&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[213](index=213&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of August 31, 2023, a conclusion audited by PricewaterhouseCoopers LLP - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of August 31, 2023[214](index=214&type=chunk) - Management concluded that internal control over financial reporting was effective as of August 31, 2023, based on the COSO 2013 framework[215](index=215&type=chunk) - The independent registered public accounting firm, PricewaterhouseCoopers LLP, audited and confirmed the effectiveness of the company's internal control over financial reporting[217](index=217&type=chunk) [Other Information](index=41&type=section&id=Item%209B.%20Other%20Information) This section discloses information regarding the termination of a Rule 10b5-1 trading arrangement for one of the company's directors or officers - On June 14, 2023, Patricia Q Olsem's Rule 10b5-1 trading arrangement terminated pursuant to its terms[219](index=219&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=41&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company reports no applicable information for this item - None[220](index=220&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=42&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's Proxy Statement for the 2023 Annual Meeting - Information is incorporated by reference from the Proxy Statement for the annual meeting on December 12, 2023[223](index=223&type=chunk) [Executive Compensation](index=42&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the company's Proxy Statement - Information is incorporated by reference from various sections of the Proxy Statement, including 'Compensation Discussion and Analysis' and 'Executive Compensation'[225](index=225&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=42&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the Proxy Statement, with 172,878 securities remaining available for future issuance under equity compensation plans - Information on security ownership is incorporated by reference from the Proxy Statement[226](index=226&type=chunk) Equity Compensation Plan Information | Plan Category | Securities to be issued upon exercise (a) | Securities remaining available for future issuance (c) | | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 137,829 | 172,878 | [Certain Relationships and Related Transactions, and Director Independence](index=42&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the company's Proxy Statement - Information is incorporated by reference from the Proxy Statement under the headings 'Director Independence' and 'Audit Committee – Related Party Transactions Review and Oversight'[227](index=227&type=chunk) [Principal Accountant Fees and Services](index=43&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's Proxy Statement - Information is incorporated by reference from the Proxy Statement under the heading 'Ratification of Appointment of Independent Registered Public Accounting Firm'[228](index=228&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=44&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K report, including consolidated financial statements, auditor's report, and various exhibits - This item contains the list of financial statements, schedules, and exhibits filed with the Form 10-K[230](index=230&type=chunk) [Form 10-K Summary](index=46&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[233](index=233&type=chunk)

Financial Data and Key Metrics Changes - The company reported net sales of $140.5 million for Q4 2023, an increase of nearly 8% compared to the same quarter last year [50] - Gross margin for Q4 was 51.4%, reflecting a 400 basis point improvement year-over-year [97] - EBITDA margin improved to 18% from 16% in the previous year [102] - Diluted earnings per share for the quarter were $1.21, compared to $1.08 for the same quarter last year, reflecting a 12% increase [104] Business Line Data and Key Metrics Changes - Sales in the Americas increased by 10% to $74.7 million, with maintenance product sales in the U.S. up 18% [43] - Maintenance product sales in EMEA increased by 19% in Q4, driven by strong performance in the UK, Italy, and Benelux [54] - Sales in Asia-Pacific decreased by 20% to $50 million, primarily due to foreign currency exchange rates [58] Market Data and Key Metrics Changes - The U.S. market experienced double-digit volume growth, with POS sales up 13% in units and 19% in dollars [1] - EMEA showed signs of recovery with double-digit constant currency growth for the last two quarters, despite a negative currency impact of nearly $18 million [49] - Latin America saw a 12% decline in maintenance product sales against a strong comparative period [51] Company Strategy and Development Direction - The company introduced a new Four-by-Four strategic framework aimed at driving profitable growth and sustainable value creation [62] - Key focus areas include geographic expansion, premiumization of products, and enhancing digital commerce capabilities [63][75] - The company is committed to achieving a gross margin target of 55% over the long term, with a short-term target range of 50% to 55% [119] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovery trends in the second half of fiscal year 2023, entering fiscal year 2024 with positive momentum [41][94] - The company anticipates net sales growth of 6% to 12% for fiscal year 2024, with gross margin expected between 51% and 53% [123] - Increased foreign taxes and interest rates are expected to impact net income and EPS for the upcoming fiscal year [17] Other Important Information - The company is undergoing a global strategic review of its homecare and cleaning brands, with no decisions made yet [46] - The implementation of a new cloud-based ERP system is expected to go live in the first half of fiscal year 2024 [114] - The company has reduced inventory levels by $32.5 million or 27% since the first quarter of fiscal year 2023 [113] Q&A Session Summary Question: Clarification on SG&A expense growth - Management indicated that SG&A growth will be less in percentage terms compared to the previous two years, primarily due to investments made in FY'23 [2][3] Question: FX effect on topline growth for FY'24 - The company plans to provide both actuals and constant currency guidance starting in Q1 FY'24, using the average FX rate from FY'23 [4][5] Question: Factors affecting EPS guidance - Management highlighted increased SG&A costs, non-cash amortization expenses from the new ERP system, and a rising tax rate as key factors impacting EPS [16][17] Question: Supply chain improvements - The company has stabilized its supply chain and expanded its supplier network, focusing on optimization as volumes recover [21][22] Question: Potential acquisitions - Management mentioned ongoing strategic reviews but indicated no immediate plans for acquisitions, focusing instead on organic growth and geographic expansion [25]

Financial Data and Key Metrics Changes - The company reported net sales of $141.7 million for Q3 2023, an increase of 15% compared to the same period last year, marking a new record for the company [41] - Year-to-date net sales reached $396.8 million, up 2% compared to the prior year [42] - Net income for the quarter was $18.9 million, reflecting a 30% increase year-on-year [12][31] - Gross margin improved to 50.6% in Q3 2023, up from 47.7% in the same quarter last year, representing a 290 basis points improvement [56] Business Line Data and Key Metrics Changes - Sales in the Americas increased by 16% to $71.1 million, driven by a 21% increase in maintenance product sales in the U.S. [13] - Sales of WD-40 Specialist increased by 7% in Q3 and 11% year-to-date [23][85] - Sales of homecare and cleaning products in the Americas remained flat compared to the prior year [15] - In Asia Pacific, sales surged by 42% to $18.1 million, with distributor markets seeing a 151% increase [18] Market Data and Key Metrics Changes - Sales in EMEA rose by 6% to $52.5 million, with a constant currency basis increase of 13% [16] - Sales in Latin America increased by 18% in Q3, primarily due to preemptive purchases ahead of a price increase [44] - Sales in Australia declined by 14% due to weaker market conditions and unfavorable currency changes [48] Company Strategy and Development Direction - The company is focusing on geographic expansion, premiumization of products, and digital commerce as part of its growth strategy [21][53] - A new global online marketing campaign titled "Repair It, Don't Replace It" was launched to promote sustainability [24][65] - The company is strategically reviewing its homecare and cleaning brands, indicating a potential de-emphasis on these lines [50][72] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about returning to growth, despite ongoing challenges from inflation and currency fluctuations [25][86] - The company anticipates a decline in inventory levels and expects to end the fiscal year in growth mode [33][36] - Future gross margin targets remain at 55%, with a commitment to restoring margins over the mid to long term [58][60] Other Important Information - The company plans to continue returning capital to shareholders through dividends and share repurchases, with a new plan approved for up to $50 million in buybacks [32][82] - The gross margin for the Americas was reported at 48.2%, showing improvement from previous lows [58] Q&A Session Summary Question: How should the company think about the next quarter regarding sales growth in the Americas? - Management indicated that while there will be some impact from prior price increases, they expect to see a turnaround in volumes, with a cautious outlook for the fourth quarter [37][89] Question: Is the company considering divesting any homecare and cleaning brands? - Management clarified that there are no firm plans to exit these brands but will take a strategic look at their long-term future [72][95] Question: When can the company expect to return to 55% gross margins? - Management stated that while they are making progress, it is difficult to pinpoint a timeline, suggesting it may take longer than a year to reach that target [100][104]

Q3 FY23 Financial Performance - Net sales increased by 15% to $141.7 million compared to Q3 FY22's $123.7 million[7] - Gross profit margin improved by 290 basis points to 50.6% from 47.7% in Q3 FY22[7, 27] - Operating income rose by 35% to $25.7 million, up from $19.0 million in Q3 FY22[7] - Net income increased by 30% to $18.9 million compared to $14.5 million in Q3 FY22[7] - Diluted EPS increased by 29% to $1.38, compared to $1.07 in Q3 FY22[7] - On a constant currency basis, Q3 FY23 net sales would have increased by $21.9 million or 18% compared to Q3 FY22[7] - Year-to-date net sales were $396.8 million, a 2% increase compared to the same period last fiscal year; on a constant currency basis, the increase would have been $27.3 million or 7%[7] Segment Performance - Americas segment sales increased by 16% to $71.1 million and made up 50% of global sales[13] - EMEA segment sales increased by 6% to $49.5 million and made up 37% of global sales[14, 15] - Asia-Pacific segment sales increased by 42% to $18.1 million and made up 13% of global sales[15] Gross Margin Drivers - Price increases contributed +740 basis points to gross margin improvement[25] - Lower input costs contributed +210 basis points to gross margin improvement[25] - Changes in FX rates contributed +60 basis points to gross margin improvement[25] - Higher costs of specialty chemicals negatively impacted gross margin by -300 basis points[26] - Higher costs of aerosol cans negatively impacted gross margin by -300 basis points[26] - Higher filling fees negatively impacted gross margin by -100 basis points[26] FY23 Guidance - The company reiterated its FY23 guidance, with net sales projected between $535 million and $560 million, representing sales growth between 3.5% and 7.5%[33]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2023 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number: 000-06936 Commission Company Name: WD 40 CO WD-40 COMPANY (Exact name of registrant as specified in ...

Q2 FY23 Earnings Results April 6, 2023 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 ("HCCP") under the following brands: X-14® ...

WD-40 Company (NASDAQ:WDFC) Q2 2023 Earnings Conference Call April 6, 2023 5:00 PM ET Company Participants Wendy Kelley - Vice President, Stakeholder, and Investor Engagement Steve Brass - President & CEO Sara Hyzer - Vice President & CFO Conference Call Participants Daniel Rizzo - Jefferies Linda Bolton-Weiser - D.A. Davidson Rosemarie Morbelli - Gabelli Funds Operator Ladies and gentlemen, thank you for standing by. Good day and welcome to the WD-40 Company Second Quarter 2023 Earnings Conference Call. To ...