WD 40 CO [WDFC] Filings

10-Q 1 wdfc-20220531x10q.htm 10-Q wdfc-20220531x10q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2022


¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 000-06936

Commission Company Name: WD 40 CO

WD-40 COMPANY

(Exact name of registrant as specified in its charter)


Delaware		95-1797918
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9715 Businesspark Avenue, San Diego, California		92131
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (619) 275-1400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common stock, par value $0.001 per share	WDFC	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No þ

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of July 1, 2022 was 13,627,441.

WD-40 COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended May 31, 2022

TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statement of Shareholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 6.	Exhibits	41



PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

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

	May 31,		August 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	40,799	$	85,961
Trade and other accounts receivable, less allowance for doubtful
accounts of $329 and $463 at May 31, 2022
and August 31, 2021, respectively		92,621		89,558
Inventories		95,993		55,752
Other current assets		11,941		9,948
Total current assets		241,354		241,219
Property and equipment, net		69,156		70,145
Goodwill		95,499		95,869
Other intangible assets, net		6,037		7,244
Operating lease right-of-use assets		7,507		8,824
Deferred tax assets, net		852		858
Other assets		8,718		6,044
Total assets	$	429,123	$	430,203

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	40,684	$	33,499
Accrued liabilities		26,064		25,658
Accrued payroll and related expenses		13,021		25,662
Short-term borrowings		16,377		800
Income taxes payable		123		317
Total current liabilities		96,269		85,936
Long-term borrowings		110,189		114,940
Deferred tax liabilities, net		10,421		10,401
Long-term operating lease liabilities		5,870		7,062
Other long-term liabilities		11,145		11,482
Total liabilities		233,894		229,821

Commitments and Contingencies (Note 11)

Shareholders' equity:
Common stock ― authorized 36,000,000 shares, $0.001 par value;
19,887,577 and 19,856,865 shares issued at May 31, 2022 and
August 31, 2021, respectively; and 13,637,841 and 13,708,966 shares
outstanding at May 31, 2022 and August 31, 2021, respectively		20		20
Additional paid-in capital		165,159		163,737
Retained earnings		451,962		430,735
Accumulated other comprehensive loss		(31,442)		(26,030)
Common stock held in treasury, at cost ― 6,249,736 and 6,147,899
shares at May 31, 2022 and August 31, 2021, respectively		(390,470)		(368,080)
Total shareholders' equity		195,229		200,382
Total liabilities and shareholders' equity	$	429,123	$	430,203

See accompanying notes to condensed consolidated financial statements.



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

	Three Months Ended May 31,				Nine Months Ended May 31,
		2022		2021		2022		2021

Net sales	$	123,667	$	136,405	$	388,399	$	372,869
Cost of products sold		64,682		63,947		195,426		168,158
Gross profit		58,985		72,458		192,973		204,711

Operating expenses:
Selling, general and administrative		33,621		38,131		106,863		109,586
Advertising and sales promotion		6,022		6,642		17,242		17,673
Amortization of definite-lived intangible assets		358		364		1,081		1,084
Total operating expenses		40,001		45,137		125,186		128,343

Income from operations		18,984		27,321		67,787		76,368

Other income (expense):
Interest income		27		21		73		59
Interest expense		(669)		(615)		(1,902)		(1,795)
Other (expense) income, net		(42)		183		(119)		513
Income before income taxes		18,300		26,910		65,839		75,145
Provision for income taxes		3,820		5,904		13,296		13,325
Net income	$	14,480	$	21,006	$	52,543	$	61,820

Earnings per common share:
Basic	$	1.07	$	1.53	$	3.83	$	4.50
Diluted	$	1.07	$	1.52	$	3.82	$	4.48

Shares used in per share calculations:
Basic		13,656		13,708		13,683		13,694
Diluted		13,680		13,746		13,712		13,727


See accompanying notes to condensed consolidated financial statements.

‎



WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited and in thousands)

	Three Months Ended May 31,				Nine Months Ended May 31,
		2022		2021		2022		2021

Net income	$	14,480	$	21,006	$	52,543	$	61,820
Other comprehensive income (loss):
Foreign currency translation adjustment		(4,146)		608		(5,412)		4,430
Total comprehensive income	$	10,334	$	21,614	$	47,131	$	66,250

See accompanying notes to condensed consolidated financial statements.



WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited and in thousands, except share and per share amounts)

								Accumulated
				Additional				Other					Total
	Common Stock			Paid-in		Retained		Comprehensive		Treasury Stock			Shareholders'
	Shares	Amount		Capital		Earnings		Income (Loss)		Shares	Amount		Equity
Balance at August 31, 2021	19,856,865	$	20	$	163,737	$	430,735	$	(26,030)	6,147,899	$	(368,080)	$	200,382
Issuance of common stock under share-based
compensation plan, net of shares withheld for taxes	30,072		-		(4,246)									(4,246)
Stock-based compensation					2,891									2,891
Cash dividends ($0.72 per share)							(9,905)							(9,905)
Acquisition of treasury stock										32,000		(7,386)		(7,386)
Foreign currency translation adjustment									(1,893)					(1,893)
Net income							18,555							18,555
Balance at November 30, 2021	19,886,937	$	20	$	162,382	$	439,385	$	(27,923)	6,179,899	$	(375,466)	$	198,398
Issuance of common stock under share-based

WD 40 CO [WDFC] Filings
10-Q	[2022-07-07]
10-Q	[2022-04-07]
10-Q	[2022-01-06]
10-K	[2021-10-22]
10-Q	[2021-07-07]
10-Q	[2021-04-08]
10-Q	[2021-01-07]
10-K	[2020-10-21]
10-Q	[2020-07-09]
10-Q	[2020-04-09]
10-Q	[2020-01-09]
10-K	[2019-10-22]
10-Q	[2019-07-09]
10-Q	[2019-04-09]
10-Q	[2019-01-09]
10-K	[2018-10-22]
10-Q	[2018-07-10]
10-Q	[2018-04-06]
10-Q	[2018-01-09]
10-K	[2017-10-23]
10-Q	[2017-07-10]
10-Q	[2017-04-06]
10-Q	[2017-01-09]
10-K	[2016-10-24]
10-Q	[2016-07-07]
10-Q	[2016-04-07]
10-Q	[2016-01-07]
10-K	[2015-10-22]
10-Q	[2015-07-09]
10-Q	[2015-04-09]
10-Q	[2015-01-08]
10-K	[2014-10-21]
10-Q	[2014-07-10]
10-Q	[2014-04-09]
10-Q	[2014-01-09]
10-K	[2013-10-22]
10-Q	[2013-07-09]
10-Q	[2013-04-08]
10-Q	[2013-01-09]
10-K	[2012-10-22]
10-Q	[2012-07-10]
10-Q	[2012-04-09]
10-Q	[2012-01-09]