WD-40 pany(US:WDFC)2024-01-09 21:18Financial 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]