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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 May 31, 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 July 2, 2021 was 13,707,767.

1


WD-40 COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended May 31, 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)

May 31,

August 31,

2021

2020

Assets

Current assets:

Cash and cash equivalents

$

80,362

$

56,462

Trade and other accounts receivable, less allowance for doubtful

accounts of $620 and $362 at May 31, 2021

and August 31, 2020, respectively

104,911

80,672

Inventories

47,768

41,264

Other current assets

7,902

6,756

Total current assets

240,943

185,154

Property and equipment, net

68,968

60,759

Goodwill

96,017

95,731

Other intangible assets, net

7,665

8,633

Operating lease right-of-use assets

9,158

8,168

Deferred tax assets, net

484

464

Other assets

4,652

3,728

Total assets

$

427,887

$

362,637

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$

31,307

$

21,676

Accrued liabilities

24,728

21,660

Accrued payroll and related expenses

21,485

14,767

Short-term borrowings

800

800

Income taxes payable

798

1,213

Total current liabilities

79,118

60,116

Long-term borrowings

116,498

113,098

Deferred tax liabilities, net

10,878

11,291

Long-term operating lease liabilities

7,344

6,520

Other long-term liabilities

11,417

11,299

Total liabilities

225,255

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 May 31, 2021 and

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

outstanding at May 31, 2021 and August 31, 2020, respectively

20

20

Additional paid-in capital

162,240

157,850

Retained earnings

432,230

398,731

Accumulated other comprehensive loss

(23,778)

(28,208)

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

at both May 31, 2021 and August 31, 2020

(368,080)

(368,080)

Total shareholders' equity

202,632

160,313

Total liabilities and shareholders' equity

$

427,887

$

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 May 31,

Nine Months Ended May 31,

2021

2020

2021

2020

Net sales

$

136,405

$

98,247

$

372,869

$

296,852

Cost of products sold

63,947

45,197

168,158

136,657

Gross profit

72,458

53,050

204,711

160,195

Operating expenses:

Selling, general and administrative

38,131

27,922

109,586

90,427

Advertising and sales promotion

6,642

4,764

17,673

15,211

Amortization of definite-lived intangible assets

364

552

1,084

1,856

Total operating expenses

45,137

33,238

128,343

107,494

Income from operations

27,321

19,812

76,368

52,701

Other income (expense):

Interest income

21

20

59

73

Interest expense

(615)

(778)

(1,795)

(1,813)

Other income (expense), net

183

27

513

(197)

Income before income taxes

26,910

19,081

75,145

50,764

Provision for income taxes

5,904

4,557

13,325

9,719

Net income

$

21,006

$

14,524

$

61,820

$

41,045

Earnings per common share:

Basic

$

1.53

$

1.06

$

4.50

$

2.98

Diluted

$

1.52

$

1.06

$

4.48

$

2.98

Shares used in per share calculations:

Basic

13,708

13,674

13,694

13,700

Diluted

13,746

13,700

13,727

13,727

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 May 31,

Nine Months Ended May 31,

2021

2020

2021

2020

Net income

$

21,006

$

14,524

$

61,820

$

41,045

Other comprehensive income (loss):

Foreign currency translation adjustment

608

(1,855)

4,430

159

Total comprehensive income

$

21,614

$

12,669

$

66,250

$

41,204

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 

Stock-based compensation

3,343 

3,343 

Cash dividends ($0.72 per share)

(9,905)

(9,905)

Foreign currency translation adjustment

608 

608 

Net income

21,006 

21,006 

Balance at May 31, 2021

19,855,666 

$

20 

$

162,240 

$

432,230 

$

(23,778)

6,147,899 

$

(368,080)

$

202,632 

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