WD-40 Company Reports Fourth Quarter and Fiscal Year 2021 Financial Results

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29/08/2022
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SAN DIEGO, Oct. 19, 2021 /PRNewswire/ -- WD-40 Company (NASDAQ: WDFC), a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world, today reported financial results for its fourth quarter and fiscal year ended August 31, 2021.

Financial Highlights and Summary

"We are pleased that in a year that presented us with both unexpected opportunities and challenges, our tribe was able to achieve both net sales and earnings results in fiscal year 2021 that reflect new record highs for the Company," said Garry Ridge, WD-40 Company's chairman and chief executive officer. "Our maintenance products delivered solid sales increases in the full fiscal year including 22 percent growth of WD-40 Multi-Use Product and 16 percent growth of WD-40 Specialist."

"The dynamics of the pandemic continue to create abnormal swings in our net sales results from period to period.Despite this quarterly volatility, we continue to see strong end-user demand for our maintenance products across the globe and we remain optimistic that many of the new end-users who have interacted with our brands during the pandemic will become permanent users of our maintenance solutions."

"The tribe has never been more aligned and laser-focused on the areas where we believe our future revenue growth will come from. In the fourth quarter we made a thoughtful and deliberate decision to invest significantly in the sales momentum we have been experiencing and increase our investments in brand awareness and market penetration. Though this decision negatively impacted our net income in the fourth quarter, we believe investments in these key strategic areas will drive strong topline growth in the future," concluded Ridge.

Net Sales by Segment (in thousands):

	Three Months Ended August 31,		Fiscal Year Ended August 31,
	2021		2020		%Change	2021		2020		%Change
Americas	$	54,211		$	56,821		(5)%		$	214,601	$	200,493	7%
EMEA		45,102			42,722		6%			208,252		156,241	33%
Asia-Pacific		15,927			12,103		32%			65,256		51,764	26%
Total	$	115,240		$	111,646		3%		$	488,109	$	408,498	19%

Net Sales by Product Group (in thousands):

	Three Months Ended August 31,		Fiscal Year Ended August 31,
	2021		2020		%Change	2021		2020		%Change
Maintenance products	$	104,371		$	100,768		4%		$	448,817	$	369,444	21%
Homecare and cleaning products		10,869			10,878		-			39,292		39,054	1%
Total	$	115,240		$	111,646		3%		$	488,109	$	408,498	19%

Dividend and Share RepurchasesAs previously announced, the Company's board of directors declared on Monday, October 4, 2021 a quarterly dividend of $0.72 per share payable October 29, 2021 to stockholders of record at the close of business on October 15, 2021.

On October 12, 2021, the Company's Board of Directors approved a share buy-back plan which will become effective on November 1, 2021. Under the plan the Company is authorized to acquire up to $75.0 million of its outstanding shares through August 31, 2023. The timing and amount of repurchases will be based on terms and conditions acceptable to the Company and in compliance with applicable laws and regulations.

Fiscal Year 2022 GuidanceThe Company issued the following guidance for fiscal year 2022:

This guidance is based on management's current view of anticipated results and does not include any future acquisitions or divestitures or the impact of fluctuating foreign currency exchange rates. Unanticipated inflationary headwinds and other unforeseen events may further impact the Company's financial results.

Webcast InformationAs previously announced, management will host a live webcast at approximately 5:00 p.m. ET / 2:00 p.m. PT today to discuss these results. Other forward-looking and material information may also be discussed during this call.Please visithttp://investor.wd40company.comfor more information and to view supporting materials.

About WD-40 CompanyWD-40 Company is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world. The Company owns a wide range of maintenance products and homecare and cleaning products under the following well-known brands: WD-40®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava® and Solvol®.

Headquartered in San Diego, WD-40 Company recorded net sales of $488.1 million in fiscal year 2021 and its products are currently available in more than 176 countries and territories worldwide. WD-40 Company is traded on the NASDAQ Global Select market under the ticker symbol "WDFC." For additional information about WD-40 Company please visithttp://www.wd40company.com.

Forward-Looking StatementsExcept 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

Our forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: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; the length and severity of the current COVID-19 pandemic and its impact on the global economy and our financial results; and forecasted foreign currency exchange rates and commodity prices. These forward-looking statements are generally identified with words such as "believe," "expect," "intend," "plan," "could," "may," "aim," "anticipate," "target," "estimate" and similar expressions.

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 October 19, 2021. We undertake no obligation to revise or update any forward-looking statements.

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 August 31, 2021, which the company expects to file with the SEC on October 22, 2021.

Table Notes and General Definitions
(1)	The Company owns maintenance products under the WD-40_®, GT85_®and 3-IN-ONE_®brand names. Currently included in the WD-40 Brand are the WD-40 Multi-Use Product and the WD-40 Specialist_®and WD-40 BIKE_®product lines.
(2)	The Company owns the following homecare and cleaning brands:X-14_®automatic toilet bowl cleaners, 2000 Flushes_®automatic toilet bowl cleaners, Carpet Fresh_®and no vac_®rug and room deodorizers, Spot Shot_®aerosol and liquid carpet stain removers, 1001_®household cleaners and rug and room deodorizers and Lava_®and Solvol_®heavy-duty hand cleaners.
(3)	The Americas segment consists of the U.S., Canada and Latin America.
(4)	The EMEA segment consists of countries in Europe, the Middle East, Africa and India.
(5)	The Asia-Pacific segment consists of Australia, China and other countries in the Asia region.
(6)	Constant currency represents the translation of the current quarter and year-to-date results from the functional currencies of the Company's subsidiaries to U.S. dollars using the exchange rate in effect for the corresponding periods of the prior fiscal year.

WD-40 COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share amounts)

	August 31,		August 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	85,961		$	56,462
Trade and other accounts receivable, less allowance for doubtful
accounts of $463 and $362 at August 31, 2021
and 2020, respectively		89,558			80,672
Inventories		55,752			41,264
Other current assets		9,948			6,756
Total current assets		241,219			185,154
Property and equipment, net		70,145			60,759
Goodwill		95,869			95,731
Other intangible assets, net		7,244			8,633
Operating lease right-of-use assets		8,824			8,168
Deferred tax assets, net		858			464
Other assets		6,044			3,728
Total assets	$	430,203		$	362,637

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	33,499		$	21,676
Accrued liabilities		25,658			21,660
Accrued payroll and related expenses		25,662			14,767
Short-term borrowings		800			800
Income taxes payable		317			1,213
Total current liabilities		85,936			60,116
Long-term borrowings		114,940			113,098
Deferred tax liabilities, net		10,401			11,291
Long-term operating lease liabilities		7,062			6,520
Other long-term liabilities		11,482			11,299
Total liabilities		229,821			202,324

Commitments and Contingencies

Shareholders' equity:
Common stock ― authorized 36,000,000 shares, $0.001 par value;
19,856,865 and 19,812,685 shares issued at August 31, 2021 and 2020,
respectively; and 13,708,966 and 13,664,786 shares outstanding at
August 31, 2021 and 2020, respectively		20			20
Additional paid-in capital		163,737			157,850
Retained earnings		430,735			398,731
Accumulated other comprehensive income (loss)		(26,030)			(28,208)
Common stock held in treasury, at cost ― 6,147,899 shares
at both August 31, 2021 and 2020		(368,080)			(368,080)
Total shareholders' equity		200,382			160,313
Total liabilities and shareholders' equity	$	430,203		$	362,637

WD-40 COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share amounts)

	Three Months Ended August 31,		Fiscal Year Ended August 31,
		2021			2020		2021		2020

Net sales	$	115,240		$	111,646	$	488,109	$	408,498
Cost of products sold		56,212			48,824		224,370		185,481
Gross profit		59,028			62,822		263,739		223,017

Operating expenses:
Selling, general and administrative		35,907			31,553		145,493		121,980
Advertising and sales promotion		10,283			6,395		27,956		21,606
Amortization of definite-lived intangible assets		365			355		1,449		2,211
Total operating expenses		46,555			38,303		174,898		145,797

Income from operations		12,473			24,519		88,841		77,220

Other income (expense):
Interest income		22			20		81		93
Interest expense		(600)			(626)		(2,395)		(2,439)
Other income (expense), net		(541)			838		(28)		641
Income before income taxes		11,354			24,751		86,499		75,515
Provision for income taxes		2,945			5,086		16,270		14,805
Net income	$	8,409		$	19,665	$	70,229	$	60,710

Earnings per common share:
Basic	$	0.61		$	1.43	$	5.11	$	4.41
Diluted	$	0.61		$	1.42	$	5.09	$	4.40

Shares used in per share calculations:
Basic		13,708			13,665		13,698		13,691
Diluted		13,749			13,694		13,733		13,719

WD-40 COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)

	Fiscal Year Ended August 31,
	2021		2020
Operating activities:
Net income	$	70,229		$	60,710
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		7,019			7,701
Net gains on sales and disposals of property and equipment		(249)			(124)
Deferred income taxes		(1,334)			(509)
Stock-based compensation		9,555			5,358
Unrealized foreign currency exchange losses (gains), net		(511)			265
Provision for bad debts		210			134
Changes in assets and liabilities:
Trade and other accounts receivable		(6,595)			(4,499)
Inventories		(13,774)			555
Other assets		(5,343)			232
Operating lease assets and liabilities, net		15			233
Accounts payable and accrued liabilities		15,485			2,725
Accrued payroll and related expenses		10,702			(1,042)
Other long-term liabilities and income taxes payable		(695)			925
Net cash provided by operating activities		84,714			72,664

Investing activities:
Purchases of property and equipment		(15,059)			(19,307)
Proceeds from sales of property and equipment		599			362
Net cash provided by (used in) investing activities		(14,460)			(18,945)

Financing activities:
Treasury stock purchases		-			(16,825)
Dividends paid		(38,225)			(36,039)
Proceeds from issuance of long-term senior notes		52,000			-
Repayments of long-term senior notes		(800)			(800)
Net proceeds (repayments) from revolving credit facility		(50,056)			29,595
Shares withheld to cover taxes upon conversion of equity awards		(3,668)			(2,640)
Net cash used in financing activities		(40,749)			(26,709)
Effect of exchange rate changes on cash and cash equivalents		(6)			2,219
Net increase in cash and cash equivalents		29,499			29,229
Cash and cash equivalents at beginning of period		56,462			27,233
Cash and cash equivalents at end of period	$	85,961		$	56,462