SAN DIEGO,– WD-40 Company (NASDAQ:WDFC), a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world, today reported financial results for its first fiscal quarter ended November 30, 2019.
Financial Highlights and Summary
“If you follow us quarter to quarter, you may not like our results this quarter,” said Garry Ridge, WD-40 Company’s chairman and chief executive officer. “Our business is one in which fluctuations in the performance of our markets from quarter to quarter are not unusual. That’s why we don’t issue quarterly guidance and why we frequently caution investors not to follow us too closely quarter to quarter.”
“We are playing the infinite game which is why it’s more important for investors to understand that our long-term strategic drivers are performing in-line with our expectations, than it is for them to be concerned about the performance of a particular market or segment in a finite period.”
“Overall, we acknowledge that our first quarter does not reflect the revenue growth we would like to see in our business. However, we expect a solid, steady year ahead as we continue to put our efforts behind the strategic initiatives we believe will help us achieve our ‘probably wrong and roughly right’ long-term revenue objectives,” Ridge concluded.
Net Sales by Segment (in thousands): |
||||||||
Three Months Ended November 30, |
||||||||
2019 |
2018 |
Change |
||||||
Americas |
$ |
46,736 |
$ |
47,791 |
(2)% |
|||
EMEA |
39,245 |
38,745 |
1% |
|||||
Asia-Pacific |
12,575 |
14,746 |
(15)% |
|||||
Total |
$ |
98,556 |
$ |
101,282 |
(3)% |
Net Sales by Product Group (in thousands): |
||||||||
Three Months Ended November 30, |
||||||||
2019 |
2018 |
Change |
||||||
Maintenance products |
$ |
89,670 |
$ |
92,468 |
(3)% |
|||
Homecare and cleaning products |
8,886 |
8,814 |
1% |
|||||
Total |
$ |
98,556 |
$ |
101,282 |
(3)% |
Dividend and Share Repurchase
As previously announced, WD-40 Company’s board of directors declared on Tuesday, December 10, 2019 a quarterly dividend of $0.67 per share reflecting an increase of 10 percent over the previous quarter’s dividend. The quarterly dividend is payable on January 31, 2020 to stockholders of record at the close of business on January 17, 2020.
On June 19, 2018, the Company’s Board of Directors approved a share buy-back plan. Under the plan, which became effective on September 1, 2018, the Company is authorized to acquire up to $75.0 million of its outstanding shares through August 31, 2020. The timing and amount of repurchases are based on terms and conditions as may be acceptable to the Company’s Chief Executive Officer and Chief Financial Officer and in compliance with all laws and regulations applicable thereto. During the period from September 1, 2018 through November 30, 2019, the Company repurchased 202,755 shares at a total cost of $34.6 million under this $75.0 million plan.
Fiscal Year 2020 Guidance
The Company reiterates the following guidance for fiscal year 2020:
This guidance is expressed in good faith and is believed by the Company to have a reasonable basis; however, it is not possible to predict with any reasonable degree of certainty the actual impact that fluctuating crude oil prices or foreign currency exchange rates may have on the Company’s fiscal year 2020 guidance. This guidance does not include any future acquisitions or divestitures.
“Our guidance reflects the Company’s current view of the business,” said Jay Rembolt, WD-40 Company’s vice president and chief financial officer. “The revenue softness we experienced in the first quarter was primarily driven by the timing of customer orders and we expect that sales activity will shift into later quarters. We remain comfortable with our current guidance range and are reiterating it today.”
Webcast Information
As previously announced, WD-40 Company management will host a live webcast at approximately 5:00 p.m. ET / 2:00 p.m. PT today to discuss these results. Other forward-looking and material information may also be discussed during this call. Please visit http://investor.wd40company.com for more information and to view supporting materials.
About WD-40 Company
WD-40 Company is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world. The Company markets its maintenance products and homecare and cleaning products under the following well-known brands: WD-40®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava® and Solvol®.
Headquartered in San Diego, WD-40 Company recorded net sales of $423.4 million in fiscal year 2019 and its products are currently available in more than 176 countries and territories worldwide. WD-40 Company is traded on the NASDAQ Global Select market under the ticker symbol “WDFC.” For additional information about WD-40 Company please visit http://www.wd40company.com.
Forward-Looking Statements
Except for the historical information contained herein, this press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect the Company’s current expectations with respect to currently available operating, financial and economic information. These forward-looking statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated in or implied by the forward-looking statements.
Our forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: growth expectations for maintenance products; expected levels of promotional and advertising spending; anticipated input costs for manufacturing and the costs associated with distribution of our products; plans for and success of product innovation, the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; expected tax rates and the impact of tax legislation and regulatory action; and forecasted foreign currency exchange rates and commodity prices. Our forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “could,” “may,” “aim,” “anticipate,” “target,” “estimate” and similar expressions.
The Company’s expectations, beliefs and forecasts 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 forecasts will be achieved or accomplished.
Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I―Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019, and in the Company’s Quarterly Report on Form 10-Q for the period ended November 30, 2019 which the Company expects to file with the SEC on January 9, 2020.
All forward-looking statements included in this press release should be considered in the context of these risks. All forward-looking statements speak only as of January 9, 2020, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on our forward-looking statements.
Table Notes and General Definitions |
|
(1) |
The Company markets maintenance products under the WD-40®, GT85® and 3-IN-ONE® brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKE® product lines. |
(2) |
The Company markets the following 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. |
(3) |
The Americas segment consists of the U.S., Canada and Latin America. |
(4) |
The EMEA segment consists of countries in Europe, the Middle East, Africa and India. |
(5) |
The Asia-Pacific segment consists of Australia, China and other countries in the Asia region. |
(6) |
Constant currency represents the translation of the current quarter and year-to-date results from the functional currencies of the Company’s subsidiaries to U.S. dollars using the exchange rate in effect for the corresponding periods of the prior fiscal year. |