WD 40 CO [WDFC] Filings

10-Q 1 wdfc-20220228x10q.htm 10-Q wdfc-20220228x10q

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.

WD-40 COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended February 28, 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	38
Item 4.	Controls and Procedures	38

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 6.	Exhibits	40



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.



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.

‎



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.



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	[2022-04-07]
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]