WD-40 Income, Sales Down

WD-40 Co. reported net income of $12.2 million for the quarter ending Nov. 30, down 8.3 percent from $13.3 million in the same period a year earlier.

Diluted earnings per share for the San Diego-based company fell to 88 cents per share, down from 95 cents per share in the year-earlier period. WD-40s fiscal year runs from Sept. 1 to Aug. 1.

Net sales for the maintenance products segment - which includes WD-40 lubricants - reached $89.7 million for the first fiscal quarter, down 3 percent from a year earlier. The company attributed the decline primarily to lower sales of WD-40 Multi-Use Product within the Asia-Pacific segment.

In the Americas, net sales decreased 2 percent to $46.7 million, primarily due to lower sales of maintenance products in the United States. Sales of maintenance products in Canada and Latin America remained relatively constant from period to period, the company noted.

Net sales topped $39.2 million in the Europe-Middle East-Africa region, edging up 1 percent from the year-earlier period. Higher sales of WD-40 Specialist increased 10 percent compared to the prior year fiscal quarter, helping to boost sales in the region.

Net sales dropped 15 percent to $12.6 million in Asia-Pacific, down from $14.7 million in the year-earlier period. The company attributed the steep decline to a 21 percent decrease in sales in the Asia-Pacific distributor markets and a 23 percent decrease in sales in China. Changes in foreign currency exchange rates had an unfavorable impact on sales for the region, WD-40 said. The declines were partially offset by a 5 percent increase in sales in Australia.

The revenue softness we experienced in the first [fiscal] quarter was primarily driven by the timing of customers orders, and we expect that sales activity will shift into later quarters, WD-40 Vice President and Chief Financial Officer Jay Rembolt said in the companys earnings news release.

WD-40 Chairman and CEO Garry Ridge cautioned that the companys business is one in which fluctuations in the performance of its markets from quarter to quarter are not unusual. Overall, we acknowledge that our first quarter does not reflect the revenue growth we would like to see in our business, Ridge said. However, we expect a solid, steady year ahead as we continue to put efforts behind the strategic initiatives we believe will help us achieve our probably wrong and roughly right long-term revenue objectives.