WD-40 Company Reports First Quarter Sales and Earnings

SAN DIEGO, Jan. 9, 2012 /PRNewswire/ -- WD-40 Company (Nasdaq: WDFC) today reported net sales for the first quarter ended November 30, 2011 of $84.9 million, an increase of 5% from the first quarter last fiscal year. Net income for the first quarter was $6.8 million, a decrease of 25% compared to the prior year fiscal quarter.

Summary

• First quarter multi-purpose maintenance products sales, which include WD-40^® multi-use product, 3-IN-ONE^®, BLUE WORKS^® and the WD-40 Specialist™ product line were $70.8 million, up 6% from the prior year fiscal quarter. Homecare and cleaning products sales, which include all other brands, were $14.1 million for the first quarter, down 2% from the prior year fiscal quarter.
• Americas segment sales in the first quarter were $40.6 million, up 4% compared to the first quarter of the prior fiscal year. Europe segment sales in the first quarter were $30.1 million, down 2% compared to the same period last fiscal year. Asia Pacific segment sales were $14.2 million in the first quarter, up 30% from the prior year fiscal quarter.
• Diluted earnings per share were $0.42 in the first quarter, compared to $0.53 per share for the same quarter of the prior fiscal year.

"The Americas and Asia Pacific regions experienced growth in the first quarter driven by sales of the multi-purpose maintenance products," said Garry Ridge, WD-40 Company president and chief executive officer. "We continue to see economic uncertainty in Europe and the results in the first quarter reflect some of this uncertainty."

Net sales by segment as a percent of total net sales were 48% from the Americas, 35% from Europe and 17% from Asia-Pacific. Foreign currency exchange rates positively affected net sales by $1.1 million for the first quarter as compared to the same period last fiscal year.

Gross margin was 48.7% in the first quarter compared to 50.9% in the same quarter of the prior fiscal year.

"While we were not able to hit our gross margin target of 50% or above during the quarter, we see this as a temporary shortfall due to our sales mix during the quarter and the fact that we have not realized the full flow through of the recent price increases we implemented to offset higher commodity prices." Ridge said. "We also had costs during the quarter related to the redesign of our North American supply chain architecture which we are currently in the process of implementing.  Once fully integrated, we expect to see savings in our supply chain that will benefit margin."

Advertising and sales promotion expenses were up 29% in the first quarter to $7.8 million compared to the same period last fiscal year primarily due to timing of promotional activity and support for the WD-40 brand.

"During the quarter we had higher than normal investments in advertising and promotions due to some promotional timing and activities in support of several key marketing initiatives," Ridge said.  "We expect these investments to return to our normal levels during the remainder of the year."

Selling, general and administrative expenses were up 5% in the first quarter to $22.6 million compared to the same period last fiscal year.

"We are seeing early positive signs of consumer acceptance of the new WD-40 Specialist™ product line, a portfolio of specialty problem-solving products aimed at the trade and doer enthusiast, and we began selling to a key customer during the first quarter," Ridge said.  "We roll out the line with five new products early in 2012 across the U.S. and in Europe later in the year, and we will continue to add or change items in the product mix as consumer needs evolve."

Dividend and Share Buy-Back

As previously announced, WD-40 Company's board of directors declared on Tuesday, December 13, 2011 a 7% increase in the regular quarterly cash dividend, increasing it from $0.27 per share to $0.29 per share. The dividend is payable on January 31, 2012 to shareholders of record on January 6, 2012.

WD-40 Company also previously announced that at its regularly scheduled meeting on December 13, 2011, the board of directors authorized a buyback up to $50 million of the Company's outstanding shares expiring on December 12, 2013. The Company completed its previous $60.0 million authorized share buy-back plan by purchasing an additional $18.6 million in shares during the first quarter of fiscal year 2012.

"We continue to work hard to bring value to our shareholders, and are proud of the fact that we have paid out a dividend every quarter since 1973," Ridge said. "We have also increased our dividend payout by 16 percent since July of 2010."

Fiscal Year 2012 Guidance

WD-40 Company still expects fiscal year 2012 net sales of $353.0 million to $370.0 million. The Company expects net income of $37.2 million to $39.2 million and diluted earnings per share of $2.28 to $2.40 based on an estimated 16.3 million weighted average shares outstanding. Gross margin for the full year is expected to be close to 50.0%.  The Company expects advertising and promotion expenses of 6.5% to 8.0% of net sales. 

"We continue to focus on our five core strategic initiatives that set the direction for and drive nearly everything we do at the company," Ridge said. "Our strategic initiatives include maximizing the WD-40 brand, being the global leader in our product categories, long-term innovation efforts to ensure profitable growth of the company, developing strategic business relationships and the continued development of our people."

More detailed information will be available in WD-40 Company's Form 10-Q which will be filed on January 9, 2012.

About WD-40 Company

WD-40 Company, with headquarters in San Diego, is a global consumer products company dedicated to delivering unique, high-value and easy-to-use solutions for a wide variety of maintenance needs of "doer" and "on-the-job" users by leveraging and building the brand fortress of the company. The company markets multi-purpose maintenance products - WD-40^® multi-use product and, 3-IN-ONE^®, BLUE WORKS^® and WD-40 Specialist™ product lines. The company also markets homecare and cleaning brands: X-14^® mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes^® automatic toilet bowl cleaners, Carpet Fresh^® and No Vac^® rug and room deodorizers, Spot Shot^® aerosol and liquid carpet stain removers, 1001^® household cleaners and rug and room deodorizers, and Lava^® and Solvol^® heavy-duty hand cleaners.

WD-40 Company markets its products in more than 160 countries worldwide and recorded sales of $336 million in fiscal year 2011. Additional information about WD-40 Company can be obtained online at http://www.wd40company.com.

Except for the historical information contained herein, this news release contains forward-looking statements concerning WD-40 Company's outlook for sales, earnings, dividends and other financial results. These statements are based on an assessment of a variety of factors, contingencies and uncertainties considered relevant by WD-40 Company. Forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements, including the impact of commodity prices, changes in foreign currency exchange rates, the introduction of new products and fluctuating global market conditions, both in the United States and internationally. The company's expectations, beliefs and projections are expressed in good faith and are believed by the company to have a reasonable basis, but there can be no assurance that the company's expectations, beliefs or projections will be achieved or accomplished.

The risks and uncertainties are detailed from time to time in reports filed by WD-40 Company with the SEC, including Forms 8-K, 10-Q, and 10-K, and readers are urged to carefully review these and other documents.

SOURCE WD-40 Company