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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

1


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

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)

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.

3


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.


4


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.

5


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.

6


WD-40 COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS