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WD-40 Company Reports Fourth Quarter and Fiscal Year 2015 Financial Results

WD-40 Company

SAN DIEGO, Oct. 15, 2015 /PRNewswire/ -- WD-40 Company (NASDAQ: WDFC), a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world, today reported financial results for its fiscal fourth quarter and fiscal year ended

Financial Highlights and Summary

  • Total net sales for the fourth quarter were $92.0 million, a decrease of 6 percent compared to the prior year fiscal quarter. Total net sales for the full fiscal year were $378.2 million, a decrease of 1 percent from the prior fiscal year.
  • Translation of the Company's foreign subsidiary results to U.S. dollars had an unfavorable impact on sales for the current quarter and year to date. On a constant currency basis, total net sales were $96.2 million for the fourth quarter and $389.1 million for the full fiscal year.
  • Net income for the fourth quarter was $11.7 million, an increase of 2 percent compared to the prior year fiscal quarter. Net income for the full fiscal year was $44.8 million, an increase of 2 percent from the prior fiscal year.
  • Diluted earnings per share were $0.80 in the fourth quarter, compared to $0.77 per share for the prior year fiscal quarter. Diluted earnings per share for the full fiscal year were $3.04 compared to $2.87 in the prior fiscal year.
  • Gross margin was 54.3 percent in the fourth quarter compared to 52.7 percent in the prior year fiscal quarter. Gross margin for the full fiscal year was 52.9 percent, compared to 51.9 percent in the prior fiscal year.
  • Selling, general and administrative expenses were down 3 percent in the fourth quarter to $27.4 million when compared to the prior year fiscal quarter. Selling, general and administrative expenses remained relatively constant at $108.9 million and $108.6 million for fiscal years 2015 and 2014, respectively.
  • Advertising and sales promotion expenses were up 2 percent in the fourth quarter to $6.0 million compared to the prior year fiscal quarter and were down 4 percent for the full fiscal year to $22.9 million compared to the prior fiscal year.

"Fiscal year 2015 was a year of solid operating performance that was obscured by the impacts of political events, economic instability, a strong U.S. dollar and a particularly weak euro against the pound sterling," said Garry Ridge, WD-40 Company's president and chief executive officer. "We have built a global company and approximately 40 percent of our sales are currently generated in currencies other than the U.S. dollar. With this comes risk. If you take both translation and transaction exposure into consideration, changes in foreign currency exchange rates reduced our total net sales by approximately $16 million for fiscal year 2015.

"Despite the challenged macroeconomic environment we made solid progress against our strategic initiatives and in local currencies delivered growth in all but a few of our markets around the world. We are very excited that we launched our newest product, WD-40 EZ-REACH™, in the U.S. during our fourth quarter and initial point of sale results have been encouraging.

"Equally exciting, our WD-40 Specialist® product line celebrated its fourth birthday in August of 2015 by achieving a global growth rate of 24 percent for the full fiscal year," concluded Ridge.

Net Sales by Product Group (in thousands):


Three Months Ended August 31,


Fiscal Year Ended August 31,


2015


2014


%
Change


2015


2014


%
Change

Maintenance products

$

80,301


$

85,218



(6)%


$

333,306


$

337,825



(1)%

Homecare and cleaning products


11,680



12,404



(6)%



44,844



45,172



(1)%

Total

$

91,981


$

97,622



(6)%


$

378,150


$

382,997



(1)%

  • Net sales of maintenance products, which are considered the primary focus for the Company, decreased 6 percent in the fourth fiscal quarter and 1 percent for the full fiscal year when compared to the prior fiscal year periods. The decline in the both periods was driven primarily by the unfavorable impacts of changes in foreign currency exchange rates in EMEA and economic and political instability in Eastern Europe.
  • Net sales of homecare and cleaning products decreased 6 percent in the fourth fiscal quarter and 1 percent for the full fiscal year when compared to the prior fiscal year periods. The homecare and cleaning products, particularly those in the U.S., are considered harvest brands providing healthy profit returns to the Company and are becoming a smaller part of the business as net sales of maintenance products grow per the execution of the Company's strategic initiatives.

Net Sales by Segment (in thousands):


Three Months Ended August 31,


Fiscal Year Ended August 31,


2015


2014


%
Change


2015


2014


%
Change

Americas

$

48,125


$

46,440



4%


$

187,344


$

180,806



4%

EMEA


33,242



40,063



(17)%



136,847



151,368



(10)%

Asia-Pacific


10,614



11,119



(5)%



53,959



50,823



6%

Total

$

91,981


$

97,622



(6)%


$

378,150


$

382,997



(1)%

  • Net sales by segment as a percent of total net sales were as follows: for the Americas, 52 percent for the fourth quarter and 50 percent for the full fiscal year; for EMEA, 36 percent for both the fourth quarter and the full fiscal year; and for Asia-Pacific, 12 percent for the fourth quarter and 14 percent for the full fiscal year.
  • The increase in net sales in the Americas in both the fourth quarter and full fiscal year was primarily due to strong maintenance product sales in the United States and Latin America driven by expanded distribution and increased promotional activities. These increases were partially offset by net sales declines in Canada due primarily to the unfavorable impacts of changes in foreign currency exchange rates period over period.
  • The decrease in net sales in EMEA...

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