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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 February 28, 2021

 

¨

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 April 5, 2021 was 13,707,767.

1


WD-40 COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended February 28, 2021

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)

February 28,

August 31,

2021

2020

Assets

Current assets:

Cash and cash equivalents

$

72,381

$

56,462

Trade accounts receivable, less allowance for doubtful

accounts of $550 and $362 at February 28, 2021

and August 31, 2020, respectively

93,577

80,672

Inventories

44,539

41,264

Other current assets

11,339

6,756

Total current assets

221,836

185,154

Property and equipment, net

67,077

60,759

Goodwill

95,987

95,731

Other intangible assets, net

8,020

8,633

Operating lease right-of-use assets

8,741

8,168

Deferred tax assets, net

498

464

Other assets

3,828

3,728

Total assets

$

405,987

$

362,637

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$

27,729

$

21,676

Accrued liabilities

24,451

21,660

Accrued payroll and related expenses

16,667

14,767

Short-term borrowings

800

800

Income taxes payable

2,236

1,213

Total current liabilities

71,883

60,116

Long-term borrowings

116,731

113,098

Deferred tax liabilities, net

11,535

11,291

Long-term operating lease liabilities

6,945

6,520

Other long-term liabilities

11,313

11,299

Total liabilities

218,407

202,324

Commitments and Contingencies (Note 12)

 

 

Shareholders' equity:

Common stock ― authorized 36,000,000 shares, $0.001 par value;

19,855,666 and 19,812,685 shares issued at February 28, 2021 and

August 31, 2020, respectively; and 13,707,767 and 13,664,786 shares

outstanding at February 28, 2021 and August 31, 2020, respectively

20

20

Additional paid-in capital

158,897

157,850

Retained earnings

421,129

398,731

Accumulated other comprehensive loss

(24,386)

(28,208)

Common stock held in treasury, at cost ― 6,147,899 and 6,147,899

shares at February 28, 2021 and August 31, 2020, respectively

(368,080)

(368,080)

Total shareholders' equity

187,580

160,313

Total liabilities and shareholders' equity

$

405,987

$

362,637

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 February 28/29,

Six Months Ended February 28/29,

2021

2020

2021

2020

Net sales

$

111,905

$

100,049

$

236,464

$

198,605

Cost of products sold

49,898

46,447

104,211

91,460

Gross profit

62,007

53,602

132,253

107,145

Operating expenses:

Selling, general and administrative

35,478

29,906

71,455

62,505

Advertising and sales promotion

5,512

4,857

11,031

10,447

Amortization of definite-lived intangible assets

362

654

720

1,304

Total operating expenses

41,352

35,417

83,206

74,256

Income from operations

20,655

18,185

49,047

32,889

Other income (expense):

Interest income

19

28

38

53

Interest expense

(610)

(593)

(1,180)

(1,035)

Other income (expense), net

151

(229)

330

(224)

Income before income taxes

20,215

17,391

48,235

31,683

Provision for income taxes

3,024

3,064

7,421

5,162

Net income

$

17,191

$

14,327

$

40,814

$

26,521

Earnings per common share:

Basic

$

1.25

$

1.04

$

2.97

$

1.92

Diluted

$

1.24

$

1.04

$

2.96

$

1.92

Shares used in per share calculations:

Basic

13,700

13,712

13,687

13,713

Diluted

13,729

13,737

13,718

13,741

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 February 28/29,

Six Months Ended February 28/29,

2021

2020

2021

2020

Net income

$

17,191

$

14,327

$

40,814

$

26,521

Other comprehensive income (loss):

Foreign currency translation adjustment

3,234

(98)

3,822

2,014

Total comprehensive income

$

20,425

$

14,229

$

44,636

$

28,535

See accompanying notes to condensed consolidated financial statements.

5


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, 2020

19,812,685 

$

20 

$

157,850 

$

398,731 

$

(28,208)

6,147,899 

$

(368,080)

$

160,313 

Issuance of common stock under share-based

compensation plan, net of shares withheld for taxes

23,417 

-

(3,490)

(3,490)

Stock-based compensation

2,665 

2,665 

Cash dividends ($0.67 per share)

(9,199)

(9,199)

Foreign currency translation adjustment

588 

588 

Net income

23,623 

23,623 

Balance at November 30, 2020

19,836,102 

$

20 

$

157,025 

$

413,155 

$

(27,620)

6,147,899 

$

(368,080)

$

174,500 

Issuance of common stock under share-based

compensation plan, net of shares withheld for taxes

19,564 

-

(5)

(5)

Stock-based compensation

1,877 

1,877 

Cash dividends ($0.67 per share)

(9,217)

(9,217)

Foreign currency translation adjustment

3,234 

3,234 

Net income

17,191 

17,191 

Balance at February 28, 2021

19,855,666 

$

20 

$

158,897 

$

421,129 

$

(24,386)

6,147,899 

$

(368,080)

$

187,580 

See accompanying notes to condensed consolidated financial statements.


6


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 

Issuance of common stock under share-based

compensation plan, net of shares withheld for taxes

16,366 

-

-

Stock-based compensation

1,675 

1,675 

Cash dividends ($0.67 per share)

(9,236)

(9,236)

Acquisition of treasury stock

24,774 

(4,701)

(4,701)

Foreign currency translation adjustment