Tough Year for Hydrodec; Profits Up for WD-40


Transformer oil rerefiner Hydrodec posted a loss and lower revenues for 2015, compared to 2014, and net income for WD-40 was up for the quarter ending Feb. 29, compared to the year-earlier period.


Transformer oil rerefiner Hydrodec Group reported a $31.1 million total loss for 2015, compared to an $8.5 million loss for 2014. Revenues totaled $43.8 million for the 2015 fiscal year, down almost 20 percent.

In a news release, the company noted 2015 was a challenging year due to the collapse in world oil prices and difficult market conditions, particularly in the United Kingdom. At the same time, the company faced delays and cost overruns in the commissioning of its rebuilt and expanded transformer oil rerefinery in Canton, Ohio. An explosion and fire destroyed the processing unit at the Canton rerefinery in December 2013.

In its full-year results issued yesterday, the company said it expects oil sale volumes for 2015 to reach 62.1 million liters, up almost 28 percent from 48.6 million liters.

Last month, Hydrodec Group sold its United Kingdom operations – including its waste oil collection business and a proposed rerefinery – to a substantial shareholder, Andrew Black, for 1 pound (U.S. $1.43) and assumed debt. The company noted it retains an economic interest in the proposed U.K. rerefinery project and, to the extent the project is developed, an agreement to recover its incurred costs associated with the rerefinery.

In its earnings release, Hydrodec CEO Chris Ellis said the sale was the first step toward implementing a fundamental turnaround for the company to refocus on its core transformer oil technology business.

The recent price rises posted by producers of base oil and transformer oil in the U.S. are encouraging indications of a move towards prize stabilization, and I expect that over time the progress we have made in the first few months of this year will enable us to grow the business as envisaged prior to the incident in Canton, and expand further in the U.S. and into other geographical markets as we seek to enlarge our global footprint in a profitable and capital efficient manner, Ellis stated.


WD-40 posted net income of $13.7 million for the quarter ending Feb. 29, up 21 percent from a year earlier, with net sales down 3 percent at $94.6 million.

Earnings per diluted share reached 94 cents, up from 76 cents a year earlier. San Diego-headquartered WD-40s fiscal year goes from Sept. 1 to Aug. 31.

Net sales rose 2 percent in the Americas to $45.5 million, declined 8 percent in Europe, Middle East and Africa to $35.6 million, and fell 4 percent in Asia-Pacific to $13.4 million, compared to the year-earlier quarter.

The increase in sales in the Americas was primarily driven by a higher level of promotional activities, which resulted in strong growth of WD-40 Multi-Use Product in Latin America and the WD-40 Specialist product line in the United States, the company stated in its earnings news release.

WD-40 President and CEO Garry Ridge said its quarterly results reflect the diversity of the companys business across geographies, trade channels and economies. Foreign currency exchange rate fluctuations continue to negatively impact our reported sales, Ridge said. When we compare sales to last fiscal years second quarter, our European markets, in particular, continue to be heavily impacted by the weakening of the euro against the pound sterling as well as the strength of the U.S. dollar.

In Asia-Pacific, the company said the decrease in sales was also primarily driven by unfavorable impacts of foreign currency exchange rates, as well as the timing of customer orders in the companys Asian distributor markets.

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