WD-40 pany(US:WDFC)2025-07-10 20:16PART I — FINANCIAL INFORMATION Financial Statements (Unaudited) Presents WD-40 Company's unaudited condensed consolidated financial statements, including Balance Sheets, Operations, and Cash Flows Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 31, 2025 | August 31, 2024 | | :--- | :--- | :--- | | Total current assets | $266,457 | $255,441 | | Total assets | $455,952 | $449,039 | | Total current liabilities | $93,721 | $103,500 | | Total liabilities | $198,890 | $218,513 | | Total stockholders' equity | $257,062 | $230,526 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | | Net sales | $456,514 | $434,566 | | Gross profit | $251,914 | $230,882 | | Income from operations | $75,767 | $72,301 | | Net income | $69,753 | $52,860 | | Diluted EPS | $5.13 | $3.88 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $57,980 | $64,824 | | Net cash used in investing activities | $(2,848) | $(9,103) | | Net cash used in financing activities | $(49,321) | $(58,145) | | Net increase (decrease) in cash | $4,983 | $(2,843) | - In Q1 FY2025, certain assets of the company's homecare and cleaning product businesses in the Americas and EIMEA segments were classified as held for sale, totaling $9.3 million. These assets primarily consist of inventory, goodwill, and other intangible assets4546 - Effective September 1, 2024, the company changed the functional currency of its U.K. subsidiary (which generates EIMEA results) from Pound Sterling to the Euro, reflecting a significant shift in the currency mix of its operating income38 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, highlighting a 5% sales increase, improved gross margin, and a 32% net income rise - For the nine months ended May 31, 2025, consolidated net sales increased 5% to $456.5 million, and net income rose 32% to $69.8 million. Diluted EPS was $5.13, up from $3.88. Excluding a one-time tax benefit of $11.9 million, net income would have increased 9%102 - The company returned approximately $47.2 million to stockholders through share repurchases and dividends during the first nine months of fiscal year 2025102 - The company's long-term business model targets are 55% gross margin, 30% cost of doing business, and 25% Adjusted EBITDA. For the nine months ended May 31, 2025, the company achieved 55% gross margin, 38% cost of doing business, and 18% Adjusted EBITDA147148149 Results of Operations Net sales grew 5% to $456.5 million, gross margin improved to 55.2%, and net income rose 32% due to a tax benefit Net Sales by Product Category (Nine Months Ended May 31, in thousands) | Product Category | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total maintenance products | $435,226 | $410,546 | 6% | | HCCP | $21,288 | $24,020 | (11)% | | Total net sales | $456,514 | $434,566 | 5% | Net Sales by Segment (Nine Months Ended May 31, in thousands) | Segment | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Americas | $213,127 | $202,685 | 5% | | EIMEA | $173,763 | $162,466 | 7% | | Asia-Pacific | $69,624 | $69,415 | 0% | | Total | $456,514 | $434,566 | 5% | - Gross margin for the nine months ended May 31, 2025, increased by 210 basis points to 55.2%, primarily due to lower costs of aerosol cans (70 bps) and specialty chemicals (70 bps)118120 - SG&A expenses for the nine-month period increased by 12% ($16.3 million), mainly due to higher employee-related costs of $11.5 million from increased headcount, incentive compensation, and annual salary increases121123 - The effective tax rate for the nine months ended May 31, 2025, was 5.9%, a significant decrease from 23.1% in the prior year, primarily due to the release of an $11.9 million uncertain tax position related to the Tax Cuts and Jobs Act84143 Liquidity and Capital Resources The company maintains strong liquidity with $51.7 million cash, with operating cash flow at $58.0 million, and used cash for dividends and share repurchases Cash Flow Summary (Nine Months Ended May 31, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $57,980 | $64,824 | | Net cash used in investing activities | $(2,848) | $(9,103) | | Net cash used in financing activities | $(49,321) | $(58,145) | - The decrease in operating cash flow was primarily due to an $11.7 million unfavorable net change in working capital, driven by changes in inventory and accounts payable balances164 - The Board extended the 2023 Share Repurchase Plan to August 31, 2026. As of May 31, 2025, $32.2 million remains available for repurchases under the $50.0 million plan161184 - On June 17, 2025, the Board declared a quarterly cash dividend of $0.94 per share91173 Quantitative and Qualitative Disclosures About Market Risk The company incorporates market risk disclosures from its latest 10-K, indicating no material changes to foreign currency, interest rate, or commodity price exposures - The company states there are no material changes to its market risk disclosures from its most recent Annual Report on Form 10-K filed on October 21, 2024178 Controls and Procedures Management concluded disclosure controls and procedures were effective as of May 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of May 31, 2025, ensuring timely reporting as required by the SEC179 - No changes in internal control over financial reporting occurred during the quarter ended May 31, 2025, that materially affected, or are reasonably likely to materially affect, these controls180 PART II — OTHER INFORMATION Legal Proceedings The company is subject to various legal proceedings, but management believes no pending claims will materially impact its financial condition - As of May 31, 2025, the company believes no legal proceedings will result in a probable loss or have a materially adverse impact on its financial condition, results of operations, or cash flows79182 Risk Factors No material changes to risk factors have occurred since those disclosed in the Annual Report on Form 10-K - There have been no material changes in risk factors from those disclosed in the Annual Report on Form 10-K for the fiscal year ended August 31, 2024183 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 12,750 shares for approximately $3.0 million in Q3 FY2025, extending the plan with $32.2 million remaining - The Board of Directors extended the expiration date of the 2023 Repurchase Plan from August 31, 2025, to August 31, 2026. As of May 31, 2025, $32.2 million remains available for repurchase under the plan184 Share Repurchases (Q3 FY2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 2025 | 5,000 | $241.52 | | April 2025 | 4,000 | $234.14 | | May 2025 | 3,750 | $239.05 | | Total | 12,750 | $238.48 | Other Information No directors or officers reported adoption, modification, or termination of Rule 10b5-1 trading arrangements in Q3 FY2025 - No directors or officers reported the adoption, modification, or termination of a Rule 10b5-1 trading arrangement during the three months ended May 31, 2025187 Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents, CEO/CFO certifications, and iXBRL data - The report includes standard exhibits such as corporate governance documents, CEO/CFO certifications (Sections 302 and 906), and financial statements formatted in iXBRL188