WD-40 Earnings 2019-11-30

WDFC 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

Comparables ($MM TTM)
Ticker	M Cap	Assets	Liab	Rev	G Profit	Net Inc	EBITDA	EV	G Margin	EV/EBITDA	ROA
PAH	2,714	4,440	2,209	1,883	803	-395	-377	4,040	43%	-10.7	-9%
CBT	2,692	3,119	2,027	3,360	727	248	488	3,622	22%	7.4	8%
KWR	2,664	725	267	851	307	57	88	2,569	36%	29.2	8%
POL	2,374	2,931	2,360	3,521	752	142	270	3,689	21%	13.6	5%
WDFC	2,238	313	160	317	231	69	88	2,264	73%	25.7	22%
IOSP	2,177	1,490	626	1,534	457	92	190	2,229	30%	11.7	6%
PQG	2,089	4,442	2,722	1,598	392	77	413	4,151	24%	10.0	2%
MTX	2,077	3,149	1,728	1,813	454	154	338	2,739	25%	8.1	5%
TSE	1,838	2,804	2,059	4,230	374	138	325	2,472	9%	7.6	5%
KRO	1,757	1,959	1,091	1,681	434	116	250	1,881	26%	7.5	6%

wdfc-20191130x10q

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 November 30, 2019


¨	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

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.¨

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

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 January 3, 2020 was 13,706,715.

WD-40 COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended November 30, 2019

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	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 6.	Exhibits	37



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)

	November 30,		August 31,
	2019		2019
Assets
Current assets:
Cash and cash equivalents	$	28,680	$	27,233
Trade accounts receivable, less allowance for doubtful
accounts of $320 and $300 at November 30, 2019
and August 31, 2019, respectively		70,058		72,864
Inventories		43,703		40,682
Other current assets		6,783		7,216
Total current assets		149,224		147,995
Property and equipment, net		50,103		45,076
Goodwill		95,573		95,347
Other intangible assets, net		10,124		10,652
Operating lease right-of-use assets		8,734		-
Deferred tax assets, net		428		403
Other assets		3,305		3,189
Total assets	$	317,491	$	302,662

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	18,457	$	18,727
Accrued liabilities		20,041		18,513
Accrued payroll and related expenses		13,361		15,301
Short-term borrowings		29,088		21,205
Income taxes payable		73		844
Total current liabilities		81,020		74,590
Long-term borrowings		61,152		60,221
Deferred tax liabilities, net		11,784		11,688
Long-term operating lease liabilities		7,084		-
Other long-term liabilities		10,459		10,688
Total liabilities		171,499		157,187

Commitments and Contingencies (Note 13)

Shareholders' equity:
Common stock ― authorized 36,000,000 shares, $0.001 par value;
19,796,319 and 19,773,977 shares issued at November 30, 2019 and
August 31, 2019, respectively; and 13,714,203 and 13,718,661 shares
outstanding at November 30, 2019 and August 31, 2019, respectively		20		20
Additional paid-in capital		154,706		155,132
Retained earnings		377,848		374,060
Accumulated other comprehensive loss		(30,370)		(32,482)
Common stock held in treasury, at cost ― 6,082,116 and 6,055,316
shares at November 30, 2019 and August 31, 2019, respectively		(356,212)		(351,255)
Total shareholders' equity		145,992		145,475
Total liabilities and shareholders' equity	$	317,491	$	302,662

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 November 30,
		2019		2018

Net sales	$	98,556	$	101,282
Cost of products sold		45,013		45,451
Gross profit		53,543		55,831

Operating expenses:
Selling, general and administrative		32,599		32,731
Advertising and sales promotion		5,590		5,966
Amortization of definite-lived intangible assets		650		733
Total operating expenses		38,839		39,430

Income from operations		14,704		16,401

Other income (expense):
Interest income		25		51
Interest expense		(442)		(710)
Other income (expense), net		5		376
Income before income taxes		14,292		16,118
Provision for income taxes		2,098		2,839
Net income	$	12,194	$	13,279

Earnings per common share:
Basic	$	0.88	$	0.95
Diluted	$	0.88	$	0.95

Shares used in per share calculations:
Basic		13,714		13,846
Diluted		13,746		13,882


See accompanying notes to condensed consolidated financial statements.

‎



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

	Three Months Ended November 30,
		2019		2018

Net income	$	12,194	$	13,279
Other comprehensive (loss) income:
Foreign currency translation adjustment		2,112		(1,631)
Total comprehensive income	$	14,306	$	11,648

See accompanying notes to condensed consolidated financial statements.



WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENT 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, 2019	19,773,977	$	20	$	155,132	$	374,060	$	(32,482)	6,055,316	$	(351,255)	$	145,475
Issuance of common stock under share-based
compensation plan, net of shares withheld for taxes	22,342				(2,640)									(2,640)
Stock-based compensation					2,214									2,214
Cash dividends ($0.61 per share)							(8,406)							(8,406)
Acquisition of treasury stock										26,800		(4,957)		(4,957)
Foreign currency translation adjustment									2,112					2,112
Net income							12,194							12,194
Balance at November 30, 2019	19,796,319	$	20	$	154,706	$	377,848	$	(30,370)	6,082,116	$	(356,212)	$	145,992


Balance at August 31, 2018	19,729,774	$	20	$	153,469	$	351,266	$	(27,636)	5,879,361	$	(321,630)	$	155,489
Issuance of common stock under share-based
compensation plan, net of shares withheld for taxes	24,062				(2,425)									(2,425)
Stock-based compensation					1,965									1,965
Cash dividends ($0.54 per share)							(7,522)							(7,522)
Acquisition of treasury stock										41,184		(6,863)		(6,863)
Foreign currency translation adjustment									(1,631)					(1,631)
Cumulative effect of change in accounting principle							(324)							(324)
Net income							13,279							13,279
Balance at November 30, 2018	19,753,836	$	20	$	153,009	$	356,699	$	(29,267)	5,920,545	$	(328,493)	$	151,968

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$0.00	14	$2,238

10-Q	2020-01-09	Quarter: 2019-11-30
10-Q	2019-07-09	Quarter: 2019-05-31
10-Q	2019-04-09	Quarter: 2019-02-28
10-Q	2019-01-09	Quarter: 2018-11-30
10-K	2018-10-22	Annual: 2018-08-31
10-Q	2018-07-10	Quarter: 2018-05-31
10-Q	2018-04-06	Quarter: 2018-02-28
10-Q	2018-01-09	Quarter: 2017-11-30
10-K	2017-10-23	Annual: 2017-08-31
10-Q	2017-07-10	Quarter: 2017-05-31
10-Q	2017-04-06	Quarter: 2017-02-28
10-Q	2017-01-09	Quarter: 2016-11-30
10-K	2016-10-24	Annual: 2016-08-31
10-Q	2016-07-07	Quarter: 2016-05-31
10-Q	2016-04-07	Quarter: 2016-02-29
10-Q	2016-01-07	Quarter: 2015-11-30
10-K	2015-10-22	Annual: 2015-08-31
10-Q	2015-07-09	Quarter: 2015-05-31
10-Q	2015-04-09	Quarter: 2015-02-28
10-Q	2015-01-08	Quarter: 2014-11-30
10-K	2014-10-21	Annual: 2014-08-31
10-Q	2014-07-10	Quarter: 2014-05-31
10-Q	2014-04-09	Quarter: 2014-02-28
10-Q	2014-01-09	Quarter: 2013-11-30
10-K	2013-10-22	Annual: 2013-08-31
10-Q	2013-07-09	Quarter: 2013-05-31
10-Q	2013-04-08	Quarter: 2013-02-28
10-Q	2013-01-09	Quarter: 2012-11-30
10-K	2012-10-22	Annual: 2012-08-31
10-Q	2012-07-10	Quarter: 2012-05-31
10-Q	2012-04-09	Quarter: 2012-02-29
10-Q	2012-01-09	Quarter: 2011-11-30
10-K	2011-10-20	Annual: 2011-08-31
10-Q	2011-07-08	Quarter: 2011-05-31
10-Q	2011-04-07	Quarter: 2011-02-28
10-Q	2011-01-10	Quarter: 2010-11-30
10-K	2010-10-18	Annual: 2010-08-31
10-Q	2010-07-08	Quarter: 2010-05-31
10-Q	2010-04-08	Quarter: 2010-02-28
10-Q	2010-01-11	Quarter: 2009-11-30

8-K	2020-01-09
8-K	2019-12-10	Officers, Shareholder Vote
8-K	2019-07-26	Exhibits
8-K	2019-07-09
8-K	2019-06-24
8-K	2019-06-10
8-K	2019-04-09
8-K	2019-03-22
8-K	2019-01-25
8-K	2019-01-09
8-K	2018-12-17	Shareholder Vote
8-K	2018-10-18
8-K	2018-08-16
8-K	2018-07-10
8-K	2018-04-05
8-K	2018-02-27
8-K	2018-01-09

EX-10.A	wdfc-20191130xex10_a.htm
EX-31.A	wdfc-20191130xex31_a.htm
EX-31.B	wdfc-20191130xex31_b.htm
EX-32.A	wdfc-20191130xex32_a.htm
EX-32.B	wdfc-20191130xex32_b.htm