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