Sales Rise, Profit Slides at WD-40


WD-40 Co. yesterday reported its net sales forits first quarter, ended Nov. 30, 2006, were $72 million, a 7 percent increase over the first quarter of the previous year, but net income for the quarter declined 24 percent, to $5.7 million, compared to the year-ago period.

Earnings per share were 33 cents in the first quarter, compared to 45 cents per share in the same quarter a year ago, a decrease of 26 percent. Cost of goods during the first quarter was 52.1 percent of sales, compared to 51.9 percent in the previous period, the San Diego, Calif., based company reported.

For fiscal 2007, ending Aug. 31, the company expects net sales to grow 7 percent to 13 percent, to $307 to $324 million, and it projects net income in the range of $29 to nearly $32 million.

WD-40 Co. also released a four-year outlook yesterday, predicting that total sales will grow at a compound annual rate of 7 to 9 percent per year through fiscal 2010. Lubricants segment sales, which came to $190 million in the fiscal year ended Aug. 31, 2006, are expected to rise to $205 million to $219 million in fiscal 2007, and to reach $255 to $275 million by fiscal 2010. The lubricants segment accounts for about two-thirds of the companys total sales.

During the first quarter, we increased our marketing investment to support new products, said Garry O. Ridge, president and CEO. In addition, we continued to invest in infrastructure to support global sourcing, inventory management, product development and our China operation.

WD-40s total sales for the quarter were 63 percent from the Americas, 30 percent from Europe and 7 percent from Asia-Pacific. In the Americas, sales for the quarter were down 2.4 percent from a year ago, while in Europe sales were up 29.1 percent for the first quarter. The company attributedgains in Europe to growth in distributor markets in Eastern and Northern Europe, as well asexpansion in direct markets.

Global sales of the lubricants WD-40 and 3-in-One Oil were up 15.3 percent, or $6.5 million, for the quarter.

Related Topics

Market Topics