·

Total net sales for the fourth quarter were $130.4 million, an increase of 13 percent compared to the prior year fiscal quarter. For the full fiscal year, total net sales were $518.8 million, an increase of 6 percent compared to the prior fiscal year.  

·

Translation of the Company’s foreign subsidiary results to U.S. dollars had an unfavorable impact on sales for the current quarter and full fiscal year.  On a constant currency basis, total net sales would have been $137.1 million for the fourth quarter and $527.1 million for the full fiscal year.  

·

Net income for the fourth quarter was $14.8 million, an increase of 77 percent compared to the prior year fiscal quarter. For the full fiscal year, net income was $67.3 million, a decrease of 4 percent from the prior fiscal year.  On a constant currency basis, total net income would have been $15.5 million for the fourth quarter and $68.1 million for the full fiscal year.

·

Diluted earnings per share were $1.08 in the fourth quarter, compared to $0.61 per share for the prior year fiscal quarter. For the full fiscal year, diluted earnings per share were $4.90 compared to $5.09 in the prior fiscal year.

·

Gross margin was 47.4 percent in the fourth quarter compared to 51.2 percent in the prior year fiscal quarter.  For the full fiscal year, gross margin was 49.1 percent compared to 54.0 percent in the prior fiscal year.

·

Selling, general and administrative expenses were down 11 percent in the fourth quarter to $31.8 million when compared to the prior year fiscal quarter.  Selling, general and administrative expenses for the full fiscal year were down 5 percent to $138.7 million compared to the prior fiscal year. 

·

Advertising and sales promotion expenses were down 2 percent in the fourth quarter to  $10.1 million when compared to the prior year fiscal quarter.  Advertising and sales promotion expenses for the full fiscal year were down 2 percent to $27.3 million compared to the prior fiscal year.    







Three Months Ended August 31,

Fiscal Year Ended August 31,



2022

2021

%
Change

2022

2021

%
Change

Americas

$

$

$

$

EMEA

(3)%

(2)%

Asia-Pacific

Total

$

$

$

$



·

Net sales by segment as a percent of total net sales for the fourth quarter were as follows: for the Americas, 52 percent; for EMEA, 34 percent; and for Asia-Pacific,  14 percent.

·

Net sales in the Americas increased 25 percent in the fourth quarter primarily due to higher sales in the United States and Latin America which increased 16 percent and 79 percent, respectively.  In the United States, sales of WD-40 Multi-Use Product and WD-40 Specialist were up 12 percent and 73 percent, respectively.  The sales increase of WD-40 Multi-Use Product in the United States was due to the timing of promotional programs, the impact of price increases, and the continued strength in the industrial channel. The sales increase of WD-40 Specialist in the United States was due primarily to greater product availability as a result of improvements the Company made to its United States supply chain. In Latin America, sales of WD-40 Multi-Use Product were up 84 percent due to certain customers purchasing product in advance of planned price increases and the continued momentum in our direct market in Mexico. In Canada, maintenance product sales were up 41 percent due to strong sales of both WD-40 Multi-Use Product and WD-40 Specialist.

·

Net sales in EMEA decreased 3 percent in the fourth quarter primarily due to changes in foreign currency exchange rates.  Changes in foreign currency exchange rates had an unfavorable impact on sales for the EMEA segment from period to period. On a constant currency basis, sales for the fourth quarter would have increased by 10 percent compared to the prior year fiscal quarter primarily due to higher sales of WD-40 Multi-Use Product and WD-40 Specialist within certain of EMEA’s direct and distributor markets.  Also negatively impacting our net sales in the fourth quarter were lower sales of homecare and cleaning products compared to the prior year period. The COVID-19 pandemic resulted in strong demand for homecare and cleaning products in the fourth quarter of fiscal year 2021 which was not repeated during the current year fiscal quarter.

·

Net sales in Asia-Pacific increased 18 percent in the fourth quarter primarily due to a 64 percent increase in sales in the Asia distributor markets which were partially offset by a 21 percent decline in sales in China. Sales of WD-40 Multi-Use Product in the Asia distributor markets, increased 66 percent compared to the prior year fiscal quarter. Severe lockdown measures linked to the COVID-19 pandemic were lifted on June 1, 2022, which resulted in strong sales in the Asia distributor markets in the fourth quarter.  Changes in foreign currency exchange rates had an unfavorable impact on sales for the Asia-Pacific segment from period to period. On a constant currency basis, Asia-Pacific sales for the fourth quarter would have increased by 22 percent, compared to the prior year fiscal period. 







Three Months Ended August 31,

Fiscal Year Ended August 31,



2022

2021

%
Change

2022

2021

%
Change

Maintenance products

$

$

$

$

Homecare and cleaning products

(22)%

(15)%

Total

$

$

$

$



·

Net sales of maintenance products, which are considered the primary growth focus for the Company, increased 17 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 Americas and Asia distributor markets and WD-40 Specialist in the Unites States.

·

Net sales of homecare and cleaning products decreased 22 percent in the fourth quarter compared to the prior year fiscal quarter.  The homecare and cleaning products, particularly those in the U.S., are considered harvest brands providing healthy profit returns to the Company and are becoming a smaller part of the business as net sales of multi-purpose maintenance products grow per the execution of the Company’s strategic initiatives. 

·

Net sales growth is projected to be between 5 and 10 percent with net sales expected to be between $545 million and $570 million.

·

Gross margin percentage for the full year is expected to be between 51 and 53 percent. 

·

Advertising and promotion investments are projected to be between 5.0 and 6.0 percent of net sales.  

·

The provision for income tax is expected to be around 22 percent.

·

Net income is projected to be between $69.0 million and $71.0 million.

·

Diluted earnings per share is expected to be between $5.09 and $5.24 based on an estimated 13.6 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,



2022

2021

Assets

Current assets:

Cash and cash equivalents

$

$

Trade and other accounts receivable, less allowance for doubtful

accounts of $292 and $463 at August 31, 2022

and 2021, 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;

19,888,807 and 19,856,865 shares issued at August 31, 2022 and 2021,

respectively; and 13,602,346 and 13,708,966 shares outstanding at

August 31, 2022 and 2021, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income (loss)

Common stock held in treasury, at cost ― 6,286,461 and 6,147,899

shares at August 31, 2022 and 2021, respectively

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,



2022

2021

2022

2021



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 (expense) income, 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,



2022

2021

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 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 (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

$

$