WD-40 Company Reports Fourth Quarter and Fiscal Year 2024 Financial Results
~ Global net sales grew 11 percent in the fourth quarter compared to the prior year fiscal quarter ~
~ Management issues fiscal year 2025 guidance ~
Fourth Quarter Highlights and Summary:
-
Total net sales were
$156.0 million , an increase of 11 percent compared to the prior year fiscal quarter. -
Excluding the impact of foreign currency exchange rates, net sales would have increased 11 percent to
$156.5 million compared to the prior year fiscal quarter.(1) -
Total maintenance product sales were
$147.5 million , an increase of 12 percent compared to the prior year fiscal quarter. - Gross margin was 54.1 percent compared to 51.4 percent in the prior year fiscal quarter.
-
Selling, general, and administrative expenses were
$49.1 million , up 27 percent compared to the prior year fiscal quarter. -
Advertising and sales promotion expenses were
$10.9 million , up 11 percent compared to the prior year fiscal quarter. -
Net income was
$16.8 million , an increase of 1 percent compared to the prior year fiscal quarter. - Foreign currency exchange rates did not have a significant effect on net income compared to the prior year fiscal quarter.
-
Diluted earnings per share were
$1.23 compared to$1.21 in the prior year fiscal quarter.
Fiscal Year 2024 Highlights and Summary:
-
Total net sales were
$590.6 million , an increase of 10 percent compared to the prior fiscal year. -
Excluding the impact of foreign currency exchange rates, net sales would have increased 8 percent to
$582.7 million compared to the prior fiscal year.(1) - Gross margin was 53.4 percent compared to 51.0 percent in the prior fiscal year.
-
Selling, general, and administrative expenses were
$183.9 million , up 19 percent compared to the prior fiscal year. -
Advertising and sales promotion expenses were
$33.9 million , up 18 percent compared to the prior fiscal year. -
Net income was
$69.6 million , an increase of 6 percent compared to the prior fiscal year. -
Excluding the favorable impact of foreign currency exchange rates, net income would have increased 3 percent to
$68.2 million compared to the prior fiscal year.(1) -
Diluted earnings per share were
$5.11 compared to$4.83 for the prior fiscal year.
"Fiscal year 2024 was exceptionally strong for
"Our Four-by-Four Strategic Framework is working. We're turning up the heat on our Must-
"We've also recently introduced our new mantra, 'few things, many places, bigger impact.' This focused approach is already driving efficiencies and better returns on our investments globally, in areas such as product innovation and systems implementation. It's helping us leverage our global presence to drive faster growth and operational excellence. Throughout this growth journey, our strategy remains simple: make our products available in more places and put more cans in the hands of our target end users around the world.
“Looking ahead to fiscal year 2025, we’re well positioned to continue our growth trajectory. Our focus remains on executing our strategy, expanding in high-potential markets across the globe, and driving operational efficiencies. With our strong brand, clear strategy, and engaged workforce, we are confident in our ability to continue delivering long-term value to our stockholders,” concluded Brass.
Three Months Ended |
Fiscal Year Ended |
||||||||||||||||||||||
|
|
2024 |
|
2023 |
Dollars |
Change |
|
2024 |
|
2023 |
Dollars |
Change |
|||||||||||
|
$ |
79,198 |
$ |
74,738 |
$ |
4,460 |
6 |
% |
$ |
281,883 |
$ |
266,772 |
$ |
15,111 |
6 |
% |
|||||||
EIMEA (3) |
|
58,579 |
|
50,713 |
|
7,866 |
16 |
% |
|
221,045 |
|
190,818 |
|
30,227 |
16 |
% |
|||||||
|
|
18,214 |
|
15,001 |
|
3,213 |
21 |
% |
|
87,629 |
|
79,665 |
|
7,964 |
10 |
% |
|||||||
Total |
$ |
155,991 |
$ |
140,452 |
$ |
15,539 |
11 |
% |
$ |
590,557 |
$ |
537,255 |
$ |
53,302 |
10 |
% |
Fourth Quarter Highlights by Segment:
-
The
Americas segment represented 51 percent of total net sales in the fourth quarter. -
Net sales in the
Americas increased$4.5 million or 6 percent in the fourth quarter compared to the prior year fiscal quarter. The increase was due primarily to an increase in net sales ofWD-40 ® Multi-Use Product of$4.2 million or 7 percent compared to the prior year fiscal quarter.WD-40 ® Multi-Use Product sales increased most significantly inLatin America , which were up$5.9 million , and were partially offset by lower sales inthe United States of$1.7 million . -
Net sales of WD-40 Specialist® increased
$0.6 million or 6 percent in the fourth quarter due primarily to strong sales inLatin America andCanada .
EIMEA
- The EIMEA segment represented 37 percent of total net sales in the fourth quarter.
-
Net sales in EIMEA increased
$7.9 million or 16 percent in the fourth quarter compared to the prior year fiscal quarter. The increase was due primarily to an increase in net sales ofWD-40 ® Multi-Use Product of$6.2 million or 16 percent.WD-40 ® Multi-Use Product sales increased most significantly in the EIMEA distributor markets which were up$4.8 million .WD-40 ® Multi-Use Product sales also increased inFrance and the DACH(5) region, which were up$1.0 million and$0.6 million , respectively. -
Net sales of WD-40 Specialist® increased
$0.9 million or 13 percent due primarily to the combined impact of higher sales volume and the favorable impact of price increases across the regions. -
Translation of the Company’s foreign subsidiaries’ results from their functional currencies to
U.S. dollars had a favorable impact on sales in EIMEA for the current quarter. On a non-GAAP constant currency basis, net sales in EIMEA would have been$58.1 million for the fourth quarter.(1)
-
The
Asia-Pacific segment represented 12 percent of total net sales in the fourth quarter. -
Net sales in
Asia-Pacific increased$3.2 million or 21 percent in the fourth quarter compared to the prior year fiscal quarter. This increase was due primarily to an increase in sales ofWD-40 ® Multi-Use Product of$2.9 million or 26 percent.WD-40 ® Multi-Use Product sales increased most significantly in theAsia distributor markets, which were up$2.9 million due to successful brand building programs in certain regions and the timing of customer orders. -
Net sales of WD-40 Specialist® increased
$0.4 million or 24 percent due primarily to successful brand building in certain regions and the timing of customer orders. -
Translation of the Company’s foreign subsidiaries’ results from their functional currencies to
U.S. dollars did not have a significant impact on sales inAsia-Pacific for the current quarter.
|
|
Three Months Ended |
|
Fiscal Year Ended |
|||||||||||||||||||||
|
|
2024 |
|
2023 |
Dollars |
Change |
|
2024 |
|
2023 |
Dollars |
Change |
|||||||||||||
WD-40 Multi-Use Product |
|
118,961 |
$ |
105,672 |
$ |
13,289 |
|
13 |
% |
$ |
452,925 |
$ |
407,672 |
$ |
45,253 |
|
11 |
% |
|||||||
WD-40 Specialist |
|
20,055 |
|
18,148 |
|
1,907 |
|
11 |
% |
|
73,938 |
|
66,714 |
|
7,224 |
|
11 |
% |
|||||||
Other maintenance products (6) |
|
8,474 |
|
7,997 |
|
477 |
|
6 |
% |
|
31,173 |
|
29,172 |
|
2,001 |
|
7 |
% |
|||||||
Total maintenance products |
|
147,490 |
|
131,817 |
|
15,673 |
|
12 |
% |
|
558,036 |
|
503,558 |
|
54,478 |
|
11 |
% |
|||||||
HCCP (7) |
|
8,501 |
|
8,635 |
|
(134 |
) |
(2 |
)% |
|
32,521 |
|
33,697 |
|
(1,176 |
) |
(3 |
)% |
|||||||
Total |
$ |
155,991 |
$ |
140,452 |
$ |
15,539 |
|
11 |
% |
$ |
590,557 |
$ |
537,255 |
$ |
53,302 |
|
10 |
% |
-
Net sales of maintenance products increased 13 percent in the fourth quarter when compared to the prior year fiscal quarter primarily due to increased sales of
WD-40 ® Multi-Use Product in EIMEA,Latin America , and theAsia distributor markets from period to period. Maintenance products are considered the primary strategic focus for the Company. -
Net sales of homecare and cleaning products decreased 2 percent in the fourth quarter compared to the prior year fiscal quarter. The homecare and cleaning products, particularly those in the
Americas , are considered harvest brands providing consistent profit returns to the Company and are becoming a smaller part of the business as net sales of maintenance products grow in alignment with the Company’s Four-by-Four Strategic Framework. The Company has previously disclosed its intent to actively pursue the sale of its homecare and cleaning product portfolios in theAmericas and theUnited Kingdom .
Dividend and Share Repurchase Update
-
On
October 4, 2024 , the Company’s board of directors declared a regular quarterly dividend of$0.88 per share payable onOctober 31, 2024 to stockholders of record at the close of business onOctober 18, 2024 . -
On
June 19, 2023 , the Company’s board approved a share repurchase plan that became effective onSeptember 1, 2023 . Under the plan, the Company is authorized to acquire up to$50.0 million of its outstanding shares throughAugust 31, 2025 . -
During fiscal year 2024, the Company repurchased 34,250 shares at a total cost of
$8.1 million under this$50.0 million plan. - The timing and amount of repurchases under the plan are based on terms and conditions as may be acceptable to the Company’s chief executive officer and chief financial officer, subject to present loan covenants, and in compliance with all laws and regulations applicable thereto.
Fiscal Year 2025 Guidance
The Company is providing the following fiscal year guidance on a pro forma basis, excluding the full fiscal year financial impact of the homecare and cleaning product portfolios the Company expects to divest in fiscal year 2025:
-
Net sales growth from the 2024 pro forma results is projected to be between 6 and 11 percent with net sales expected to be between
$600 million and$630 million on a non-GAAP constant currency basis. - Gross margin for the full year is expected to be between 54 and 55 percent.
- Advertising and promotion investments are projected to be around 6 percent of net sales.
-
Operating income is projected to be between
$95 million and$100 million . This range reflects anticipated growth of between 6 to 12 percent compared to 2024 pro forma results. - The provision for income tax is expected to be around 24 percent.
-
Diluted earnings per share is expected to be between
$5.20 and$5.45 based on an estimated 13.5 million weighted average shares outstanding. This range reflects anticipated growth of between 9 to 14 percent compared to 2024 pro forma results.
“Our fiscal year 2024 performance demonstrates the power of the
“Consistent with our increased focus, we continue to make progress on the divestiture of our
This guidance is expressed in good faith and is based on management’s current view of anticipated results on a pro forma basis. Unanticipated inflationary headwinds and other unforeseen events may further affect the Company’s financial results. Net sales guidance presented on a non-GAAP constant currency basis use weighted average fiscal year 2024 foreign currency exchange rates. In the event the Company is unsuccessful in the divestiture of its homecare and cleaning products in the
Webcast Information
As previously announced,
About
Headquartered in
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. These forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “project,” “could,” “may,” “aim,” “anticipate,” “target,” “estimate” and similar expressions.
Our forward-looking statements include, but are not limited to, discussions about future financial and operating results; expected benefits from the acquisition or divestiture transaction; acquired business not performing as expected; assuming unexpected risks, liabilities and obligations of the acquired business; disruption to the parties’ business as a result of the announcement and acquisition or divestiture transaction; integration of acquired business and operations into the company; the Company's ability to successfully complete any planned divestiture; expected timing of the closing for the divestiture; expected proceeds from the divestiture; the intended use of proceeds by the Company from the divestiture transaction; impact of the divestiture transaction on the Company's stock price or EPS; 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; changes in the political conditions or relations between
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. All forward-looking statements reflect the Company’s expectations as of
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
Table Notes and General Definitions
(1) |
In order to show the impact of changes in foreign currency exchange rates on our results of operations, we have included constant currency disclosures, where necessary, in this press release. Constant currency disclosures represent the translation of our current fiscal year revenues, expenses and net income from the functional currencies of our subsidiaries to |
(2) |
The |
(3) |
The EIMEA segment consists of countries in |
(4) |
The |
(5) |
The DACH region is comprised of the countries of |
(6) |
The Company markets its other maintenance products under the GT85® and 3-IN-ONE® brand names. |
(7) |
The Company markets its homecare and cleaning products (“HCCP”) under the X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava®, and Solvol® brand names. |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited and in thousands, except share and per share amounts) |
||||||
|
2024 |
2023 |
||||
Assets |
|
|
||||
Current assets: |
|
|
||||
Cash and cash equivalents |
$ |
46,699 |
$ |
48,143 |
||
Trade and other accounts receivable, net |
|
117,493 |
|
98,039 |
||
Inventories |
|
79,088 |
|
86,522 |
||
Other current assets |
|
12,161 |
|
15,821 |
||
Total current assets |
|
255,441 |
|
248,525 |
||
Property and equipment, net |
|
62,983 |
|
66,791 |
||
|
|
96,985 |
|
95,505 |
||
Other intangible assets, net |
|
6,222 |
|
4,670 |
||
Right-of-use assets |
|
11,611 |
|
7,820 |
||
Deferred tax assets, net |
|
993 |
|
1,201 |
||
Other assets |
|
14,804 |
|
13,454 |
||
Total assets |
$ |
449,039 |
$ |
437,966 |
Liabilities and Stockholders’ Equity |
||||||
Current liabilities: |
||||||
Accounts payable |
$ |
35,960 |
$ |
30,826 |
||
Accrued liabilities |
|
31,272 |
|
30,000 |
||
Accrued payroll and related expenses |
|
26,055 |
|
16,722 |
||
Short-term borrowings |
|
8,659 |
|
10,800 |
||
Income taxes payable |
|
1,554 |
|
494 |
||
Total current liabilities |
|
103,500 |
|
88,842 |
||
Long-term borrowings |
|
85,977 |
|
109,743 |
||
Deferred tax liabilities, net |
|
9,066 |
|
10,305 |
||
Long-term operating lease liabilities |
|
5,904 |
|
5,832 |
||
Other long-term liabilities |
|
14,066 |
|
13,066 |
||
Total liabilities |
|
218,513 |
|
227,788 |
Commitments and Contingencies |
||||||
Stockholders’ equity: |
||||||
Common stock — authorized 36,000,000 shares, |
|
20 |
|
|
20 |
|
Additional paid-in capital |
|
175,642 |
|
|
171,546 |
|
Retained earnings |
|
499,931 |
|
|
477,488 |
|
Accumulated other comprehensive income (loss) |
|
(29,268 |
) |
|
(31,206 |
) |
Common stock held in treasury, at cost — 6,376,631 and 6,342,381 shares at |
|
(415,799 |
) |
|
(407,670 |
) |
Total stockholders’ equity |
|
230,526 |
|
|
210,178 |
|
Total liabilities and stockholders’ equity |
$ |
449,039 |
|
$ |
437,966 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited and in thousands, except per share amounts) |
|||||||||||||||
|
Three Months Ended |
|
|
Fiscal Year Ended |
|||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
|
|
||||||||||||
Net sales |
$ |
155,991 |
|
$ |
140,452 |
|
$ |
590,557 |
|
$ |
537,255 |
|
|||
Cost of products sold |
|
71,646 |
|
|
68,327 |
|
|
275,330 |
|
|
263,035 |
|
|||
Gross profit |
|
84,345 |
|
|
72,125 |
|
|
315,227 |
|
|
274,220 |
|
|||
|
|
|
|
|
|||||||||||
Operating expenses: |
|
|
|
|
|||||||||||
Selling, general and administrative |
|
49,137 |
|
|
38,815 |
|
|
183,859 |
|
|
154,684 |
|
|||
Advertising and sales promotion |
|
10,858 |
|
|
9,823 |
|
|
33,911 |
|
|
28,807 |
|
|||
Amortization of definite-lived intangible assets |
|
300 |
|
|
252 |
|
|
1,106 |
|
|
1,005 |
|
|||
Total operating expenses |
|
60,295 |
|
|
48,890 |
|
|
218,876 |
|
|
184,496 |
|
|||
|
|
|
|
|
|||||||||||
Income from operations |
|
24,050 |
|
|
23,235 |
|
|
96,351 |
|
|
89,724 |
|
|||
|
|
|
|
|
|||||||||||
Other income (expense): |
|
|
|
|
|||||||||||
Interest income |
|
198 |
|
|
67 |
|
|
474 |
|
|
231 |
|
|||
Interest expense |
|
(951 |
) |
|
(1,346 |
) |
|
(4,287 |
) |
|
(5,614 |
) |
|||
Other (expense) income, net |
|
(514 |
) |
|
264 |
|
|
(1,030 |
) |
|
822 |
|
|||
Income before income taxes |
|
22,783 |
|
|
22,220 |
|
|
91,508 |
|
|
85,163 |
|
|||
Provision for income taxes |
|
5,999 |
|
|
5,645 |
|
|
21,864 |
|
|
19,170 |
|
|||
Net income |
$ |
16,784 |
|
$ |
16,575 |
|
$ |
69,644 |
|
$ |
65,993 |
|
|||
|
|
|
|
|
|||||||||||
Earnings per common share: |
|
|
|
|
|||||||||||
Basic |
$ |
1.23 |
|
$ |
1.22 |
|
$ |
5.12 |
|
$ |
4.84 |
|
|||
Diluted |
$ |
1.23 |
|
$ |
1.21 |
|
$ |
5.11 |
|
$ |
4.83 |
|
|||
Shares used in per share calculations: |
|||||||||||||||
Basic |
|
13,548 |
|
|
13,567 |
|
|
13,554 |
|
|
13,578 |
|
|||
Diluted |
|
13,577 |
|
|
13,597 |
|
|
13,580 |
|
|
13,604 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited and in thousands) |
|||||||
|
Fiscal Year Ended |
||||||
|
|
2024 |
|
|
2023 |
|
|
Operating activities: |
|
|
|||||
Net income |
$ |
69,644 |
|
$ |
65,993 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|||||
Depreciation and amortization |
|
9,456 |
|
|
8,151 |
|
|
Net gains on sales and disposals of property and equipment |
|
(241 |
) |
|
(90 |
) |
|
Deferred income taxes |
|
(1,156 |
) |
|
(1,254 |
) |
|
Stock-based compensation |
|
6,535 |
|
|
6,434 |
|
|
Amortization of cloud computing implementation costs |
|
1,221 |
|
|
270 |
|
|
Unrealized foreign currency exchange losses (gains), net |
|
200 |
|
|
(1,702 |
) |
|
Provision for credit losses |
|
325 |
|
|
391 |
|
|
Write-off of inventories |
|
1,425 |
|
|
713 |
|
|
Changes in assets and liabilities: |
|
|
|||||
Trade and other accounts receivable |
|
(15,498 |
) |
|
(5,339 |
) |
|
Inventories |
|
6,414 |
|
|
19,367 |
|
|
Other assets |
|
(1,444 |
) |
|
(1,637 |
) |
|
Operating lease assets and liabilities, net |
|
(35 |
) |
|
49 |
|
|
Accounts payable and accrued liabilities |
|
4,322 |
|
|
(213 |
) |
|
Accrued payroll and related expenses |
|
8,879 |
|
|
4,965 |
|
|
Other long-term liabilities and income taxes payable |
|
1,987 |
|
|
2,293 |
|
|
Net cash provided by operating activities |
|
92,034 |
|
|
98,391 |
|
|
|
|
|
|||||
Investing activities: |
|
|
|||||
Purchases of property and equipment |
|
(4,206 |
) |
|
(6,871 |
) |
|
Proceeds from sales of property and equipment |
|
672 |
|
|
655 |
|
|
Acquisition of business, net of cash acquired |
|
(6,201 |
) |
|
— |
|
|
Net cash used in investing activities |
|
(9,735 |
) |
|
(6,216 |
) |
|
|
|
|
|||||
Financing activities: |
|
|
|||||
|
|
(8,094 |
) |
|
(10,434 |
) |
|
Dividends paid |
|
(47,201 |
) |
|
(44,581 |
) |
|
Repayments of long-term senior notes |
|
(800 |
) |
|
(800 |
) |
|
Net repayments from revolving credit facility |
|
(25,402 |
) |
|
(28,372 |
) |
|
Shares withheld to cover taxes upon conversion of equity awards |
|
(2,439 |
) |
|
(861 |
) |
|
Net cash used in financing activities |
|
(83,936 |
) |
|
(85,048 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
193 |
|
|
3,173 |
|
|
Net (decrease) increase in cash and cash equivalents |
|
(1,444 |
) |
|
10,300 |
|
|
Cash and cash equivalents at beginning of period |
|
48,143 |
|
|
37,843 |
|
|
Cash and cash equivalents at end of period |
$ |
46,699 |
|
$ |
48,143 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241017153023/en/
Media and Investor Contact:
Vice President, Stakeholder and Investor Engagement
investorrelations@wd40.com
+1-619-275-9304
Source: