10-Q 1 wdfc-20220228x10q.htm 10-Q wdfc-20220228x10q
falseQ2202200001051323.5P3Y0000105132srt:MinimumMember2021-09-012022-02-280000105132srt:MaximumMember2021-09-012022-02-280000105132srt:MinimumMemberus-gaap:PurchaseCommitmentMember2021-09-012022-02-280000105132srt:MaximumMemberus-gaap:PurchaseCommitmentMember2021-09-012022-02-280000105132wdfc:NoteAgreementAndCreditAgreementMember2022-02-280000105132srt:MinimumMemberwdfc:SeriesNotesMember2021-09-012022-02-280000105132srt:MaximumMemberwdfc:SeriesNotesMember2021-09-012022-02-280000105132us-gaap:TreasuryStockMember2020-12-012021-02-280000105132us-gaap:TreasuryStockMember2021-12-012022-02-280000105132us-gaap:TreasuryStockMember2021-09-012021-11-3000001051322021-10-120000105132us-gaap:CommonStockMember2021-12-012022-02-280000105132us-gaap:CommonStockMember2021-09-012021-11-300000105132us-gaap:CommonStockMember2020-12-012021-02-280000105132us-gaap:CommonStockMember2020-09-012020-11-300000105132us-gaap:RetainedEarningsMember2022-02-280000105132us-gaap:AdditionalPaidInCapitalMember2022-02-280000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-02-280000105132us-gaap:RetainedEarningsMember2021-11-300000105132us-gaap:AdditionalPaidInCapitalMember2021-11-300000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-11-3000001051322021-11-300000105132us-gaap:RetainedEarningsMember2021-08-310000105132us-gaap:AdditionalPaidInCapitalMember2021-08-310000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-08-310000105132us-gaap:RetainedEarningsMember2021-02-280000105132us-gaap:AdditionalPaidInCapitalMember2021-02-280000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-02-280000105132us-gaap:RetainedEarningsMember2020-11-300000105132us-gaap:AdditionalPaidInCapitalMember2020-11-300000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-11-3000001051322020-11-300000105132us-gaap:RetainedEarningsMember2020-08-310000105132us-gaap:AdditionalPaidInCapitalMember2020-08-310000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-08-310000105132srt:ChiefExecutiveOfficerMemberwdfc:TransitionAgreementMemberus-gaap:SubsequentEventMember2022-03-112022-03-110000105132srt:ChiefExecutiveOfficerMemberwdfc:TransitionAgreementMemberus-gaap:SubsequentEventMember2022-03-110000105132wdfc:MultiPurposeMaintenanceProductsMemberus-gaap:EMEAMember2021-12-012022-02-280000105132wdfc:MultiPurposeMaintenanceProductsMembersrt:AsiaPacificMember2021-12-012022-02-280000105132wdfc:MultiPurposeMaintenanceProductsMembersrt:AmericasMember2021-12-012022-02-280000105132wdfc:HomecareAndCleaningProductsMemberus-gaap:EMEAMember2021-12-012022-02-280000105132wdfc:HomecareAndCleaningProductsMembersrt:AsiaPacificMember2021-12-012022-02-280000105132wdfc:HomecareAndCleaningProductsMembersrt:AmericasMember2021-12-012022-02-280000105132wdfc:MultiPurposeMaintenanceProductsMember2021-12-012022-02-280000105132wdfc:HomecareAndCleaningProductsMember2021-12-012022-02-280000105132us-gaap:EMEAMember2021-12-012022-02-280000105132srt:AsiaPacificMember2021-12-012022-02-280000105132srt:AmericasMember2021-12-012022-02-280000105132wdfc:MultiPurposeMaintenanceProductsMemberus-gaap:EMEAMember2021-09-012022-02-280000105132wdfc:MultiPurposeMaintenanceProductsMembersrt:AsiaPacificMember2021-09-012022-02-280000105132wdfc:MultiPurposeMaintenanceProductsMembersrt:AmericasMember2021-09-012022-02-280000105132wdfc:HomecareAndCleaningProductsMemberus-gaap:EMEAMember2021-09-012022-02-280000105132wdfc:HomecareAndCleaningProductsMembersrt:AsiaPacificMember2021-09-012022-02-280000105132wdfc:HomecareAndCleaningProductsMembersrt:AmericasMember2021-09-012022-02-280000105132wdfc:MultiPurposeMaintenanceProductsMember2021-09-012022-02-280000105132wdfc:HomecareAndCleaningProductsMember2021-09-012022-02-280000105132wdfc:MultiPurposeMaintenanceProductsMemberus-gaap:EMEAMember2020-12-012021-02-280000105132wdfc:MultiPurposeMaintenanceProductsMembersrt:AsiaPacificMember2020-12-012021-02-280000105132wdfc:MultiPurposeMaintenanceProductsMembersrt:AmericasMember2020-12-012021-02-280000105132wdfc:HomecareAndCleaningProductsMemberus-gaap:EMEAMember2020-12-012021-02-280000105132wdfc:HomecareAndCleaningProductsMembersrt:AsiaPacificMember2020-12-012021-02-280000105132wdfc:HomecareAndCleaningProductsMembersrt:AmericasMember2020-12-012021-02-280000105132wdfc:MultiPurposeMaintenanceProductsMember2020-12-012021-02-280000105132wdfc:HomecareAndCleaningProductsMember2020-12-012021-02-280000105132us-gaap:EMEAMember2020-12-012021-02-280000105132srt:AsiaPacificMember2020-12-012021-02-280000105132srt:AmericasMember2020-12-012021-02-280000105132wdfc:MultiPurposeMaintenanceProductsMemberus-gaap:EMEAMember2020-09-012021-02-280000105132wdfc:MultiPurposeMaintenanceProductsMembersrt:AsiaPacificMember2020-09-012021-02-280000105132wdfc:MultiPurposeMaintenanceProductsMembersrt:AmericasMember2020-09-012021-02-280000105132wdfc:HomecareAndCleaningProductsMemberus-gaap:EMEAMember2020-09-012021-02-280000105132wdfc:HomecareAndCleaningProductsMembersrt:AsiaPacificMember2020-09-012021-02-280000105132wdfc:HomecareAndCleaningProductsMembersrt:AmericasMember2020-09-012021-02-280000105132wdfc:MultiPurposeMaintenanceProductsMember2020-09-012021-02-280000105132wdfc:HomecareAndCleaningProductsMember2020-09-012021-02-280000105132us-gaap:EMEAMember2020-09-012021-02-280000105132srt:AsiaPacificMember2020-09-012021-02-280000105132srt:AmericasMember2020-09-012021-02-280000105132us-gaap:PurchaseCommitmentMember2022-02-280000105132wdfc:MachineryEquipmentAndVehiclesMember2022-02-280000105132wdfc:ComputerAndOfficeEquipmentMember2022-02-280000105132us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-02-280000105132us-gaap:LandMember2022-02-280000105132us-gaap:FurnitureAndFixturesMember2022-02-280000105132us-gaap:ConstructionInProgressMember2022-02-280000105132us-gaap:BuildingAndBuildingImprovementsMember2022-02-280000105132wdfc:MachineryEquipmentAndVehiclesMember2021-08-310000105132wdfc:ComputerAndOfficeEquipmentMember2021-08-310000105132us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-08-310000105132us-gaap:LandMember2021-08-310000105132us-gaap:FurnitureAndFixturesMember2021-08-310000105132us-gaap:ConstructionInProgressMember2021-08-310000105132us-gaap:BuildingAndBuildingImprovementsMember2021-08-3100001051322021-11-012022-02-280000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-012022-02-280000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-012021-11-300000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-012021-02-280000105132us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-012020-11-300000105132us-gaap:FairValueInputsLevel2Memberus-gaap:SeniorNotesMember2022-02-280000105132wdfc:EuropeMiddleEastAfricaAndIndiaSubsidiaryMemberus-gaap:RevolvingCreditFacilityMember2022-02-280000105132wdfc:OtherUnsecuredDebtMember2022-02-280000105132us-gaap:IndemnificationGuaranteeMemberwdfc:SeniorOfficersAndDirectorsMember2022-02-280000105132wdfc:IndemnificationGuaranteeTwoMember2022-02-280000105132us-gaap:ForeignExchangeForwardMember2020-09-012021-08-310000105132us-gaap:EMEAMember2022-02-280000105132srt:AsiaPacificMember2022-02-280000105132srt:AmericasMember2022-02-280000105132us-gaap:EMEAMember2021-08-310000105132srt:AsiaPacificMember2021-08-310000105132srt:AmericasMember2021-08-310000105132us-gaap:RetainedEarningsMember2021-12-012022-02-280000105132us-gaap:RetainedEarningsMember2021-09-012021-11-300000105132us-gaap:RetainedEarningsMember2020-12-012021-02-280000105132us-gaap:RetainedEarningsMember2020-09-012020-11-300000105132us-gaap:ForeignExchangeForwardMember2022-02-280000105132us-gaap:ForeignExchangeForwardMember2021-09-012022-02-280000105132wdfc:EuropeMiddleEastAndAfricaSegmentsMember2021-12-012022-02-280000105132wdfc:AsiaPacificSegmentMember2021-12-012022-02-280000105132wdfc:AmericasSegmentMember2021-12-012022-02-280000105132us-gaap:CorporateNonSegmentMember2021-12-012022-02-280000105132wdfc:EuropeMiddleEastAndAfricaSegmentsMember2021-09-012022-02-280000105132wdfc:AsiaPacificSegmentMember2021-09-012022-02-280000105132wdfc:AmericasSegmentMember2021-09-012022-02-280000105132us-gaap:CorporateNonSegmentMember2021-09-012022-02-280000105132wdfc:EuropeMiddleEastAndAfricaSegmentsMember2020-12-012021-02-280000105132wdfc:AsiaPacificSegmentMember2020-12-012021-02-280000105132wdfc:AmericasSegmentMember2020-12-012021-02-280000105132us-gaap:CorporateNonSegmentMember2020-12-012021-02-280000105132wdfc:EuropeMiddleEastAndAfricaSegmentsMember2020-09-012021-02-280000105132wdfc:AsiaPacificSegmentMember2020-09-012021-02-280000105132wdfc:AmericasSegmentMember2020-09-012021-02-280000105132us-gaap:CorporateNonSegmentMember2020-09-012021-02-280000105132us-gaap:RevolvingCreditFacilityMember2022-02-280000105132wdfc:SeriesNotesMember2021-08-310000105132wdfc:SeriesCNotesMember2021-08-310000105132wdfc:SeriesBNotesMember2021-08-310000105132us-gaap:RevolvingCreditFacilityMember2021-08-310000105132us-gaap:RevolvingCreditFacilityMember2021-09-012022-02-280000105132wdfc:SeriesCNotesMember2021-09-012022-02-280000105132wdfc:SeriesBNotesMember2021-09-012022-02-280000105132wdfc:SeriesNotesMember2022-02-280000105132wdfc:SeriesCNotesMember2022-02-280000105132wdfc:SeriesBNotesMember2022-02-280000105132wdfc:SeriesNotesMember2021-09-012022-02-280000105132wdfc:SeriesBAndSeriesCNotesMember2021-09-012022-02-280000105132us-gaap:TreasuryStockMember2022-02-280000105132us-gaap:CommonStockMember2022-02-280000105132us-gaap:TreasuryStockMember2021-11-300000105132us-gaap:CommonStockMember2021-11-300000105132us-gaap:TreasuryStockMember2021-08-310000105132us-gaap:CommonStockMember2021-08-310000105132us-gaap:TreasuryStockMember2021-02-280000105132us-gaap:CommonStockMember2021-02-280000105132us-gaap:TreasuryStockMember2020-11-300000105132us-gaap:CommonStockMember2020-11-300000105132us-gaap:TreasuryStockMember2020-08-310000105132us-gaap:CommonStockMember2020-08-310000105132us-gaap:SubsequentEventMember2022-03-152022-03-1500001051322021-02-2800001051322020-08-310000105132us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2021-12-012022-02-280000105132us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2021-09-012022-02-280000105132us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2020-12-012021-02-280000105132us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2020-09-012021-02-280000105132us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2022-02-280000105132us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2021-08-310000105132us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-02-280000105132us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2022-02-280000105132us-gaap:EMEAMember2021-09-012022-02-280000105132srt:AsiaPacificMember2021-09-012022-02-280000105132srt:AmericasMember2021-09-012022-02-2800001051322020-09-012021-02-280000105132us-gaap:AdditionalPaidInCapitalMember2021-12-012022-02-2800001051322021-12-012022-02-280000105132us-gaap:AdditionalPaidInCapitalMember2021-09-012021-11-3000001051322021-09-012021-11-300000105132us-gaap:AdditionalPaidInCapitalMember2020-12-012021-02-2800001051322020-12-012021-02-280000105132us-gaap:AdditionalPaidInCapitalMember2020-09-012020-11-3000001051322020-09-012020-11-3000001051322022-02-2800001051322021-08-3100001051322022-04-0400001051322021-09-012022-02-28wdfc:agreementwdfc:employeewdfc:itemxbrli:pureiso4217:USDxbrli:sharesiso4217:USDxbrli:shares

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 February 28, 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 April 4, 2022 was 13,660,980.

1


WD-40 COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended February 28, 2022

TABLE OF CONTENTS

2


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)

February 28,

August 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$

43,322

$

85,961

Trade and other accounts receivable, less allowance for doubtful

accounts of $366 and $463 at February 28, 2022

and August 31, 2021, respectively

103,582

89,558

Inventories

75,537

55,752

Other current assets

12,158

9,948

Total current assets

234,599

241,219

Property and equipment, net

69,334

70,145

Goodwill

95,754

95,869

Other intangible assets, net

6,478

7,244

Operating lease right-of-use assets

8,115

8,824

Deferred tax assets, net

853

858

Other assets

8,013

6,044

Total assets

$

423,146

$

430,203

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$

39,655

$

33,499

Accrued liabilities

28,130

25,658

Accrued payroll and related expenses

13,133

25,662

Short-term borrowings

2,038

800

Income taxes payable

433

317

Total current liabilities

83,389

85,936

Long-term borrowings

112,809

114,940

Deferred tax liabilities, net

10,717

10,401

Long-term operating lease liabilities

6,356

7,062

Other long-term liabilities

11,025

11,482

Total liabilities

224,296

229,821

Commitments and Contingencies (Note 11)

 

 

Shareholders' equity:

Common stock ― authorized 36,000,000 shares, $0.001 par value;

19,887,516 and 19,856,865 shares issued at February 28, 2022 and

August 31, 2021, respectively; and 13,660,980 and 13,708,966 shares

outstanding at February 28, 2022 and August 31, 2021, respectively

20

20

Additional paid-in capital

164,192

163,737

Retained earnings

448,179

430,735

Accumulated other comprehensive loss

(27,296)

(26,030)

Common stock held in treasury, at cost ― 6,226,536 and 6,147,899

shares at February 28, 2022 and August 31, 2021, respectively

(386,245)

(368,080)

Total shareholders' equity

198,850

200,382

Total liabilities and shareholders' equity

$

423,146

$

430,203

See accompanying notes to condensed consolidated financial statements.

3


WD-40 COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except per share amounts)

Three Months Ended February 28,

Six Months Ended February 28,

2022

2021

2022

2021

Net sales

$

129,986

$

111,905

$

264,732

$

236,464

Cost of products sold

64,468

49,898

130,744

104,211

Gross profit

65,518

62,007

133,988

132,253

Operating expenses:

Selling, general and administrative

34,819

35,478

73,242

71,455

Advertising and sales promotion

5,596

5,512

11,220

11,031

Amortization of definite-lived intangible assets

360

362

723

720

Total operating expenses

40,775

41,352

85,185

83,206

Income from operations

24,743

20,655

48,803

49,047

Other income (expense):

Interest income

21

19

46

38

Interest expense

(613)

(610)

(1,233)

(1,180)

Other income (expense), net

252

151

(77)

330

Income before income taxes

24,403

20,215

47,539

48,235

Provision for income taxes

4,895

3,024

9,476

7,421

Net income

$

19,508

$

17,191

$

38,063

$

40,814

Earnings per common share:

Basic

$

1.41

$

1.25

$

2.76

$

2.97

Diluted

$

1.41

$

1.24

$

2.75

$

2.96

Shares used in per share calculations:

Basic

13,679

13,700

13,773

13,687

Diluted

13,704

13,729

13,804

13,718

See accompanying notes to condensed consolidated financial statements.


4


WD-40 COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited and in thousands)

Three Months Ended February 28,

Six Months Ended February 28,

2022

2021

2022

2021

Net income

$

19,508

$

17,191

$

38,063

$

40,814

Other comprehensive income (loss):

Foreign currency translation adjustment

627

3,234

(1,266)

3,822

Total comprehensive income

$

20,135

$

20,425

$

36,797

$

44,636

See accompanying notes to condensed consolidated financial statements.

5


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