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WD-40 pany(WDFC) - 2025 Q1 - Quarterly Report
WDFCWD-40 pany(WDFC)2025-01-10 21:14
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Sales Performance - Consolidated net sales increased by 13.1millionor913.1 million or 9% to 153.5 million compared to the prior year, driven by higher sales volume and price increases[97] - Americas segment sales grew 8% to 69.4million,ledby969.4 million, led by 9% growth in WD-40 Multi-Use Product sales[98][99] - EIMEA segment sales surged 18% to 57.5 million, with WD-40 Multi-Use Product sales up 21%[98][105] - Asia-Pacific segment sales declined 4% to 26.6million,withWD−40Multi−UseProductsalesdown626.6 million, with WD-40 Multi-Use Product sales down 6%[98][108] - Net sales increased to 153.5 million in Q3 2024, up 9.3% from 140.4millioninQ32023[16]−TotalnetsalesforthethreemonthsendedNovember30,2024,were140.4 million in Q3 2023[16] - Total net sales for the three months ended November 30, 2024, were 153.495 million, up from 140.416millioninthesameperiodin2023[68]−WD−40Multi−UseProductsalesincreasedto140.416 million in the same period in 2023[68] - WD-40 Multi-Use Product sales increased to 118.547 million in Q3 2024 from 107.677millioninQ32023[68]−WD−40Specialistsalesroseto107.677 million in Q3 2023[68] - WD-40 Specialist sales rose to 19.172 million in Q3 2024 from 16.842millioninQ32023[68]−Foreigncurrencyexchangeratesfavorablyimpactedconsolidatednetsalesby16.842 million in Q3 2023[68] - Foreign currency exchange rates favorably impacted consolidated net sales by 1.5 million[97] - Asia-Pacific segment net sales decreased, with WD-40 Multi-Use Product sales down 1.3million(61.3 million (6%), driven by a 2.6 million decline in Asia distributor markets, partially offset by a 1.0millionincreaseinChina[109]−WD−40SpecialistsalesintheAsia−Pacificsegmentincreased1.0 million increase in China[109] - WD-40 Specialist sales in the Asia-Pacific segment increased 1.2 million (17%), driven by higher sales volume in Iberia, U.K., and Italy, each up 0.5million,0.5 million, 0.3 million, and 0.3millionrespectively[109]ProfitabilityandMargins−Grossprofitmarginimprovedto54.80.3 million respectively[109] Profitability and Margins - Gross profit margin improved to 54.8% from 53.8% in the prior year period[97] - Net income rose 8% to 18.9 million, with diluted EPS increasing 9% to 1.39[97]−Grossprofitincreasedto1.39[97] - Gross profit increased to 84.1 million, up 8.5million,withgrossmarginimprovingto54.88.5 million, with gross margin improving to 54.8% from 53.8% (100 basis points increase)[111] - Net income rose to 18.9 million in Q3 2024, an 8.3% increase from 17.5millioninQ32023[16]−Grossprofitmarginimprovedto54.817.5 million in Q3 2023[16] - Gross profit margin improved to 54.8% in Q3 2024, up from 53.8% in Q3 2023[16] - Net income for the three months ended November 30, 2024, was 18.925 million, compared to 17.482millionforthesameperiodin2023[19]−NetincomeforthethreemonthsendedNovember30,2024,was17.482 million for the same period in 2023[19] - Net income for the three months ended November 30, 2024, was 18.925 million, compared to 17.482 million for the same period in 2023[67] Expenses and Costs - SG&A expenses increased to 50.5 million, up 6.4million(146.4 million (14%), representing 32.9% of net sales compared to 31.4% in the prior year[113] - Advertising and sales promotion expenses increased to 8.4 million, up 1.4million(201.4 million (20%), representing 5.5% of net sales compared to 5.0% in the prior year[116] - Operating expenses increased to 59.0 million in Q3 2024, up 14.8% from 51.4millioninQ32023[16]−Americassegmentoperatingincomedecreasedto51.4 million in Q3 2023[16] - Americas segment operating income decreased to 12.7 million, down 1.5million(111.5 million (11%), with operating expenses increasing 4.1 million primarily due to higher employee-related costs[121] Shareholder Returns and Capital Allocation - The company repurchased 13,750 shares at an average price of 263.75pershareforatotalcostof263.75 per share for a total cost of 3.6 million under its 50millionsharerepurchaseplan[161][163]−Returned50 million share repurchase plan[161][163] - Returned 15.6 million to stockholders through share repurchases and dividends in the quarter[97] - The company declared a 7% increase in the regular quarterly cash dividend, raising it from 0.88pershareto0.88 per share to 0.94 per share, payable on January 31, 2025[88] - Treasury stock purchases totaled 3.6millioninQ32024,up50.23.6 million in Q3 2024, up 50.2% from 2.4 million in Q3 2023[22] - Dividends paid increased to 12.0millioninQ32024,up5.912.0 million in Q3 2024, up 5.9% from 11.3 million in Q3 2023[22] - Cash dividends paid in Q3 2024 were 0.88pershare,totaling0.88 per share, totaling 11.958 million, compared to 0.83pershareand0.83 per share and 11.297 million in Q3 2023[19] - The company repurchased 13,750 shares at an average price of 263.75pershare,totaling263.75 per share, totaling 3.6 million, leaving 38.3millionauthorizedunderthe2023RepurchasePlan[66]CashFlowandLiquidity−Cashandcashequivalentsgrewto38.3 million authorized under the 2023 Repurchase Plan[66] Cash Flow and Liquidity - Cash and cash equivalents grew to 54.9 million as of November 30, 2024, up 17.6% from 46.7millionatAugust31,2024[14]−Totalcurrentassetsincreasedto46.7 million at August 31, 2024[14] - Total current assets increased to 262.8 million as of November 30, 2024, up 2.9% from 255.4millionatAugust31,2024[14]−Netcashprovidedbyoperatingactivitieswas255.4 million at August 31, 2024[14] - Net cash provided by operating activities was 14.9 million in Q3 2024, down 44.5% from 26.9millioninQ32023[22]−ThecompanyextendeditsrevolvingcreditfacilitymaturitydatetoApril30,2029,undertheSecondAmendedandRestatedCreditAgreement[58]−Thecompany′srevolvingcreditagreementincludesa26.9 million in Q3 2023[22] - The company extended its revolving credit facility maturity date to April 30, 2029, under the Second Amended and Restated Credit Agreement[58] - The company's revolving credit agreement includes a 125.0 million limit on other unsecured indebtedness[62] Tax and Financial Adjustments - The release of an unrecognized tax benefit is expected to generate a favorable income tax adjustment of 11.9millioninthefiscalsecondquarterendingFebruary28,2025[89]−Theeffectivetaxratedecreasedby2.211.9 million in the fiscal second quarter ending February 28, 2025[89] - The effective tax rate decreased by 2.2% from 24.2% in 2023 to 22.0% in 2024, primarily due to increased excess tax benefits from stock-based equity awards[81] Inventory and Assets - Total inventories decreased from 79.088 million as of August 31, 2024, to 74.887millionasofNovember30,2024,withfinishedgoodsinventoryincreasingfrom74.887 million as of November 30, 2024, with finished goods inventory increasing from 60.331 million to 63.874million[45]−TotalassetsheldforsaleasofNovember30,2024,were63.874 million[45] - Total assets held for sale as of November 30, 2024, were 9.865 million, including intangibles, goodwill, and inventory[44] - Goodwill decreased by 1.069millionduetoassetsheldforsale,withthebalanceasofNovember30,2024,at1.069 million due to assets held for sale, with the balance as of November 30, 2024, at 96.584 million[47] - The carrying amount of definite-lived intangible assets decreased from 6.222millionasofAugust31,2024,to6.222 million as of August 31, 2024, to 2.287 million as of November 30, 2024, due to amortization and translation adjustments[52] - The gross carrying amount of definite-lived intangible assets increased slightly from 38.863millionasofAugust31,2024,to38.863 million as of August 31, 2024, to 39.091 million as of November 30, 2024[51] - The company's goodwill showed no indicators of impairment as of November 30, 2024, with no impairment losses recorded[48] Liabilities and Debt - Total liabilities decreased to 221.0millionasofNovember30,2024,down1.1221.0 million as of November 30, 2024, down 1.1% from 218.5 million at August 31, 2024[14] - The fair value of the company's senior notes was estimated at 60.3millionasofNovember30,2024,comparedtoacarryingvalueof60.3 million as of November 30, 2024, compared to a carrying value of 66.4 million[39] Operational and Strategic Changes - The company changed the functional currency of its U.K. subsidiary from Pound Sterling to Euro effective September 1, 2024[36] - The company has no outstanding commitments for purchasing finished goods and components as of November 30, 2024[75] Homecare and Cleaning Products - Homecare and cleaning product sales decreased 3% to 7.99million,witha77.99 million, with a 7% decline in the Americas segment[97][99] - Homecare and cleaning product sales in the Asia-Pacific segment decreased 0.4 million (19%) due to reduced demand in the U.K. from lower advertising and promotional activities[109]