WD 40 CO [WDFC] Filings

10-Q 1 wdfc-20221130x10q.htm 10-Q wdfc-20221130x10q

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, 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 January 3, 2023 was 13,587,596.

WD-40 COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended November 30, 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 Statements of Stockholders’ 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	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits	36



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,
	2022		2022
Assets
Current assets:
Cash and cash equivalents	$	36,882	$	37,843
Trade and other accounts receivable, net		87,285		89,930
Inventories		119,067		104,101
Other current assets		12,122		17,766
Total current assets		255,356		249,640
Property and equipment, net		65,658		65,977
Goodwill		95,277		95,180
Other intangible assets, net		5,362		5,588
Operating lease right-of-use assets		8,435		7,559
Deferred tax assets, net		629		679
Other assets		10,776		9,672
Total assets	$	441,493	$	434,295

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	31,826	$	32,852
Accrued liabilities		24,728		27,161
Accrued payroll and related expenses		14,251		11,583
Short-term borrowings		42,537		39,173
Income taxes payable		301		51
Total current liabilities		113,643		110,820
Long-term borrowings		107,902		107,139
Deferred tax liabilities, net		10,715		10,528
Long-term operating lease liabilities		6,629		5,999
Other long-term liabilities		11,234		11,185
Total liabilities		250,123		245,671

Commitments and Contingencies (Note 11)

Stockholders’ equity:
Common stock ― authorized 36,000,000 shares, $0.001 par value;
19,896,477 and 19,888,807 shares issued at November 30, 2022 and
August 31, 2022, respectively; and 13,587,596 and 13,602,346 shares
outstanding at November 30, 2022 and August 31, 2022, respectively		20		20
Additional paid-in capital		168,092		165,973
Retained earnings		459,439		456,076
Accumulated other comprehensive loss		(34,873)		(36,209)
Common stock held in treasury, at cost ― 6,308,881 and 6,286,461
shares at November 30, 2022 and August 31, 2022, respectively		(401,308)		(397,236)
Total stockholders’ equity		191,370		188,624
Total liabilities and stockholders’ equity	$	441,493	$	434,295

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,
		2022		2021

Net sales	$	124,893	$	134,746
Cost of products sold		60,638		66,276
Gross profit		64,255		68,470

Operating expenses:
Selling, general and administrative		39,984		38,423
Advertising and sales promotion		5,339		5,624
Amortization of definite-lived intangible assets		253		363
Total operating expenses		45,576		44,410

Income from operations		18,679		24,060

Other income (expense):
Interest income		44		25
Interest expense		(1,169)		(620)
Other income (expense), net		150		(329)
Income before income taxes		17,704		23,136
Provision for income taxes		3,707		4,581
Net income	$	13,997	$	18,555

Earnings per common share:
Basic	$	1.03	$	1.35
Diluted	$	1.02	$	1.34

Shares used in per share calculations:
Basic		13,590		13,716
Diluted		13,609		13,752


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,
		2022		2021

Net income	$	13,997	$	18,555
Other comprehensive income (loss):
Foreign currency translation adjustment		1,336		(1,893)
Total comprehensive income	$	15,333	$	16,662

See accompanying notes to condensed consolidated financial statements.


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

								Accumulated
				Additional				Other					Total
	Common Stock			Paid-in		Retained		Comprehensive		Treasury Stock			Stockholders’
	Shares	Amount		Capital		Earnings		Income (Loss)		Shares	Amount		Equity
Balance at August 31, 2022	19,888,807	$	20	$	165,973	$	456,076	$	(36,209)	6,286,461	$	(397,236)	$	188,624
Issuance of common stock under share-based
compensation plan, net of shares withheld for taxes	7,670		-		(600)									(600)
Stock-based compensation					2,719									2,719
Cash dividends ($0.78 per share)							(10,634)							(10,634)
Acquisition of treasury stock										22,420		(4,072)		(4,072)
Foreign currency translation adjustment									1,336					1,336
Net income							13,997							13,997
Balance at November 30, 2022	19,896,477	$	20	$	168,092	$	459,439	$	(34,873)	6,308,881	$	(401,308)	$	191,370



								Accumulated
				Additional				Other					Total
	Common Stock			Paid-in		Retained		Comprehensive		Treasury Stock			Stockholders’
	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


See accompanying notes to condensed consolidated financial statements.


WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

WD 40 CO [WDFC] Filings
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10-K	[2020-10-21]
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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]