·

Total net sales for the fourth quarter were $115.2 million, an increase of 3 percent compared to the prior year fiscal quarter. For the full fiscal year, total net sales were $488.1 million, an increase of 19 percent compared to the prior fiscal year.  

·

Translation of the Company’s foreign subsidiary results to U.S. dollars had a favorable impact on sales for the current quarter and full fiscal year.  On a constant currency basis, total net sales would have been $108.8 million for the fourth quarter and $468.4 million for the full fiscal year.  

·

Net income for the fourth quarter was $8.4 million, a decrease of 57 percent compared to the prior year fiscal quarter. For the full fiscal year, net income was $70.2 million, an increase of 16 percent from the prior fiscal year.  On a constant currency basis, total net income would have been $7.7 million for the fourth quarter and $66.5 million for the full fiscal year.

·

Diluted earnings per share were $0.61 in the fourth quarter, compared to $1.42 per share for the prior year fiscal quarter. For the full fiscal year, diluted earnings per share were $5.09 compared to $4.40 in the prior fiscal year.

·

Gross margin was 51.2 percent in the fourth quarter compared to 56.3 percent in the prior year fiscal quarter.  For the full fiscal year, gross margin was 54.0 percent compared to 54.6 percent in the prior fiscal year.

·

Selling, general and administrative expenses were up 14 percent in the fourth quarter to $35.9 million when compared to the prior year fiscal quarter.  Selling, general and administrative expenses for the full fiscal year were up 19 percent to $145.5 million compared to the prior fiscal year. 

·

Advertising and sales promotion expenses were up 61 percent in the fourth quarter to  $10.3 million when compared to the prior year fiscal quarter.  Advertising and sales promotion expenses for the full fiscal year were up 29 percent to $28.0 million compared to the prior fiscal year.    







Three Months Ended August 31,

Fiscal Year Ended August 31,



2021

2020

%
Change

2021

2020

%
Change

Americas

$

$

(5)%

$

$

EMEA

Asia-Pacific

Total

$

$

$

$



·

Net sales by segment as a percent of total net sales for the fourth quarter were as follows: for the Americas,  47 percent; for EMEA, 39 percent; and for Asia-Pacific, 14 percent.

·

Net sales in the Americas decreased 5 percent in the fourth quarter primarily due to lower sales of WD-40 Multi-Use Product in the United States and Canada which decreased 5 percent and 17 percent, respectively.  In the corresponding period of the prior fiscal year, we experienced strong demand for WD-40 Multi-Use Product in the United States and Canada linked to renovation trends associated with the pandemic.  Although demand for our maintenance products in the United States remained strong in the fourth quarter of this fiscal year, we were unable to meet this demand due to continued supply chain constraints and disruptions related to the COVID-19 pandemic. These declines were partially offset by higher sales of maintenance products in Latin America.  The increase in sales in Latin America was primarily due to higher sales of WD-40 Multi-Use Product in Mexico.  In the fourth quarter sales of WD-40 Multi-Use Product in Mexico increased 33 percent compared to the prior year fiscal quarter.  

·

Net sales in EMEA increased 6 percent in the fourth quarter. Changes in foreign currency exchange rates had a favorable impact on sales for the EMEA segment from period to period. On a constant currency basis, sales for the fourth quarter would have decreased by 6 percent compared to the prior fiscal year quarter.  This constant currency sales decline was driven by lower sales in the EMEA direct markets, which were partially offset by increased sales in our EMEA distributor markets. The increase in sales in the EMEA distributor markets were primarily driven by the easing of COVID-19 lockdown measures and restrictions.  The decrease in sales in the EMEA direct markets was due to much higher sales comparable in the fourth quarter of fiscal year 2020 due to the lifting of severe COVID-19 lockdown measures that occurred during the third quarter of last year that resulted in higher consumer demand in the fourth quarter of last year.

·

Net sales in Asia-Pacific increased 32 percent in the fourth quarter primarily due to higher sales of WD-40 Multi-Use Product in the Asia distributor markets, which increased 198 percent compared to the prior year fiscal quarter.    These sales increases were primarily driven by the easing of COVID-19 lockdown measures and restrictions. These reduced lockdown measures positively impacted economic conditions during the fourth quarter and resulted in increased demand and higher sales particularly in South Korea and Indonesia.







Three Months Ended August 31,

Fiscal Year Ended August 31,



2021

2020

%
Change

2021

2020

%
Change

Maintenance products

$

$

$

$

Homecare and cleaning products

-

Total

$

$

$

$



·

Net sales of maintenance products, which are considered the primary growth focus for the Company, increased 4 percent in the fourth quarter when compared to the prior year fiscal quarter.  This sales growth was primarily attributable to increased sales of WD-40 Multi-Use Product within the EMEA and Asia distributor markets. 

·

Net sales of homecare and cleaning products remained relatively constant in the fourth quarter compared to the prior year fiscal quarter.  While each of our homecare and cleaning products have continued to generate positive cash flows, we had experienced decreased or flat sales for many of these products in recent years prior to the COVID-19 pandemic.

·

Net sales growth is projected to be between 7 and 11 percent with net sales expected to be between $522 million and $542 million.

·

Gross margin percentage for the full year is expected to be between 53 and 54 percent. 

·

Advertising and promotion investments are projected to be between 5.5 and 6.0 percent of net sales.  

·

The provision for income tax is expected to be between 21 and 22 percent.

·

Net income is projected to be between $71.7 million and $73.6 million.

·

Diluted earnings per share is expected to be between $5.24 and $5.38 based on an estimated 13.7 million weighted average shares outstanding.

(1)

The Company owns 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 owns the following homecare and cleaning brands:  X-14_® 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. 



WD-40 COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except share and per share amounts)





August 31,

August 31,



2021

2020

Assets

Current assets:

Cash and cash equivalents

$

$

Trade and other accounts receivable, less allowance for doubtful

accounts of $463 and $362 at August 31, 2021

and 2020, respectively

Inventories

Other current assets

Total current assets

Property and equipment, net

Goodwill

Other intangible assets, net

Operating lease right-of-use assets

Deferred tax assets, net

Other assets

Total assets

$

$



Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$

$

Accrued liabilities

Accrued payroll and related expenses

Short-term borrowings

Income taxes payable

Total current liabilities

Long-term borrowings

Deferred tax liabilities, net

Long-term operating lease liabilities

Other long-term liabilities

Total liabilities



Commitments and Contingencies



Shareholders' equity:

Common stock ― authorized 36,000,000 shares, $0.001 par value;

19,856,865 and 19,812,685 shares issued at August 31, 2021 and 2020,

respectively; and 13,708,966 and 13,664,786 shares outstanding at

August 31, 2021 and 2020, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income (loss)

Common stock held in treasury, at cost ― 6,147,899 shares

at both August 31, 2021 and 2020

Total shareholders' equity

Total liabilities and shareholders' equity

$

$







WD-40 COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except per share amounts)





Three Months Ended August 31,

Fiscal Year Ended August 31,



2021

2020

2021

2020



Net sales

$

$

$

$

Cost of products sold

Gross profit



Operating expenses:

Selling, general and administrative

Advertising and sales promotion

Amortization of definite-lived intangible assets

Total operating expenses



Income from operations



Other income (expense):

Interest income

Interest expense

Other income (expense), net

Income before income taxes

Provision for income taxes

Net income

$

$

$

$



Earnings per common share:

Basic

$

$

$

$

Diluted

$

$

$

$



Shares used in per share calculations:

Basic

Diluted





WD-40 COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)





Fiscal Year Ended August 31,



2021

2020

Operating activities:

Net income

$

$

Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation and amortization

Net gains on sales and disposals of property and equipment

Deferred income taxes

Stock-based compensation

Unrealized foreign currency exchange losses (gains), net

Provision for bad debts

Changes in assets and liabilities:

Trade and other accounts receivable

Inventories

Other assets

Operating lease assets and liabilities, net

Accounts payable and accrued liabilities

Accrued payroll and related expenses

Other long-term liabilities and income taxes payable

Net cash provided by operating activities



Investing activities:

Purchases of property and equipment

Proceeds from sales of property and equipment

Net cash provided by (used in) investing activities



Financing activities:

Treasury stock purchases

 -

Dividends paid

Proceeds from issuance of long-term senior notes

 -

Repayments of long-term senior notes

Net proceeds (repayments) from revolving credit facility

Shares withheld to cover taxes upon conversion of equity awards

 Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

$

$