Heritage-Crystal Clean’s oil business segment reported lower revenue for the third quarter, while WD-40 posted higher net income and revenue for the fourth quarter of its fiscal year, compared to results a year earlier.
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Heritage-Crystal Clean’s oil business segment – including oil collection and rerefining activities and sales of recycled fuel oil – reported revenues of $24.7 million for the quarter ending Sept. 5, down 31% from $35.8 million in 2019’s third quarter.
“During the third quarter, the COVID-19 pandemic continued to drive decreased demand for finished lubricants, directly impacting both the demand and price for our base oil products,” the Elgin, Illinois-based company said in its earnings news release.
The company noted that the segment’s revenue increased $5 million, or 25%, from the second quarter to the third quarter as economic activity improved from pandemic lows. In addition, base oil production volume at its rerefinery in Indianapolis in the third quarter increased 76% from the second quarter, in line with the third quarter of 2019.
“As demand for our base oil and the supply of used oil improved incrementally during the third quarter, we were able run our rerefinery efficiently, which yielded vastly improved profitability in our oil business segment, compared to the second quarter,” President and CEO Brian Recatto said in the earnings release. The company believes the second quarter was the low point of the pandemic-driven downturn, Recatto added.
WD-40 reported net income of $19.7 million for the quarter ending Aug. 31, the fourth quarter of its fiscal year, up 129% from a year earlier. For its full fiscal year, net income reached $60.7 million, up 9% from the prior fiscal year.
San Diego-based WD-40’s fiscal year goes from Sept. 1 to Aug. 31.
Net sales during the quarter for its maintenance products group were up 4% at $100.8 million. For the full fiscal year, net sales for the group were down 4% at $369.4 million.
Earnings reached $1.42 per diluted share in the quarter, up from 63 cents a year earlier. Earnings for the full fiscal year reached $4.41 per diluted share, up from $4.02 in the prior fiscal year.
Net sales for the quarter were up 15% in the Americas at $56.8 million, up 18% in Europe, the Middle East and Africa at $42.7 million and down 43% in Asia-Pacific at $12.1 million. For the full fiscal year, net sales were up 3% in the Americas at $200.5 million, down 3% in Europe, the Middle East and Africa at $156.2 million and down 25% in Asia-Pacific at $51.8 million.
The company said net sales in the Americas were up in the Americas due entirely to higher sales of maintenance products in the United States, Canada and Latin America. Net sales rose in Europe, Middle East and Africa primarily due to higher sales of maintenance products in those regions’ direct markets. The company attributed the lower net sales in Asia-Pacific primarily to lower sales of maintenance products in Asia distributor markets and in China.
Garry Ridge, WD-40 Co.’s chairman and CEO, said each of the company’s markets were impacted differently by the COVID-19 pandemic during its fiscal year. “In geographies where
retail operations remained open and where we were able to leverage our strong digital presence, we saw strong sales growth,” Ridge said in the company’s earnings news release. “However, in markets with strict movement restrictions in place or less developed e-commerce
adoption, our sales were challenged.”
Ridge noted the company experienced an unexpected, developing trend during the quarter – an increase in demand for products linked to a renovation trend associated with the pandemic. “It seems that the more time people spend isolated in their homes, the more time and money they spend making home improvements,” he said. The company is calling the trend “isolation renovation,” and Ridge said that in nearly all its direct markets, it experienced double-digit sales percentage growth of its multi-use maintenance product due to the phenomenon.