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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
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FORM 8-K
__________
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CURRENT REPORT
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PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (date of earliest event reported): January 9 , 201 7
__________
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WD-40 COMPANY
(Exact Name of Registrant as specified in its charter )
__________
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﻿	 	 	 	 	
Delaware
(State or other jurisdiction of incorporation or organization)	 	000-06936
(Commission File Number)	 	95-1797918
(I.R.S. Employer
Identification Number)

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﻿	 	1061 Cudahy Place, San Diego, California 92110
(Address of principal executive offices, with zip code)

﻿	 	 	 	 	
﻿	 	(619) 275-1400
(Registrant’s telephone number, including area code)

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﻿	 	n/a
(Former name or former address, if changed since last report)

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__________
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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☐	Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
☐	Pre-commencement c ommunications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
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﻿
﻿

 

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ITEM 2.02.	 	Results of Operations and Financial Condition	
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﻿	 	On January 9 , 201 7 , WD-40 Company issued a news release with respect to earnings for the quarter ended November 30 , 201 6 . The full text of the news release is attached hereto as Exhibit 99.1.	
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ITEM 9.01.	 	Financial Statements and Exhibits	
﻿	 	(d) Exhibits	
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﻿	 	 	
﻿	Exhibit No.	Description	
﻿	 	 	
﻿	99.1	News Release by WD-40 Company dated January 9 , 201 7 .	
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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﻿	 	 	
﻿	 	 	
﻿	 	WD-40 Company	
﻿	 	(Registrant)	
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Date: January 9 , 201 7	 	/s/ JAY W. REMBOLT	
﻿	 	Jay W. Rembolt	
﻿	 	Vice President, Finance	
﻿	 	Treasurer and Chief Financial Officer	
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EXHIBIT 99.1
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WD-40 Company Reports First   Q uarter 201 7   Finan c i al Results
~ Management reaffirms previously issued fiscal year 2017   guidance ~
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SAN DIEGO   –   January 9 , 2017 ― 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 first   fiscal quarter ended November 30 , 201 6 .
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Financial Highlights and Summary

	·		Total net sales for the first quarter were   $ 89.2 million ,   a decrease of 4 percent compared to the prior year fiscal quarter .   	
	·		Translation of the Company’s foreign subsidiary results from their functional currencies to U.S. dollars had a n   un favorable impact on sales for the current quarter.  On a constant cur rency basis total net sales for the first quarter would have been  $ 9 5 . 1 million , an increase of 3 percent compared to the prior year fiscal quarter .	
	·		Net income for th e   first   quarter was $ 11.8 million, a decrea se of 3 percent  f rom the prior year fiscal quarter .	
	·		Diluted earnings per share were $ 0.82 compared to $ 0.83 in the prior year fiscal quarter .	
	·		Gross margin percentage was 57.2 percent compared to 55.6 percent   in the prior year fiscal quarter .	
	·		Selling, general and administrative expenses were up 4 percent in the first   quarter to $ 29.0 million w hen compared to the prior year fiscal quarter .  	
	·		Advertising and sales promotion expenses were down 15 percent to $ 4.8 million compared to the prior year fiscal quarter .	
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“ A s a global c ompany that generates nearly 40 percent   of its sales in currencies other than the U.S. dollar, foreign currency exchange headwinds continue to have an impact on our reported results ,” said Garry Ridge, WD-40 Company’s presiden t and chief executive officer. “Even though the global nature of our business exposes us to some currency risk ,   our g eographically diversified business also acts as a natural hedge which can cu shion us from the impact of localized events. At any given time , depending on what is going on in a particular region, some of our markets will over perform while others may underperform.  While we expect we will continue to see fluctuations in the performance of certain markets quarter to quarter, our long-ter m growth plans remain unchanged , ” co ncluded Ridge.  
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Net S ales by Segment (in thousands) :
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﻿	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	
﻿	Three Months Ended November 30,	
﻿	2016	 	2015	 	Change	
Americas	$	42,840 	 	$	44,412 	 	 	(4)%	
EMEA	 	30,257 	 	 	32,086 	 	 	(6)%	
Asia-Pacific	 	16,151 	 	 	16,024 	 	 	1% 	
Total	$	89,248 	 	$	92,522 	 	 	(4)%	
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	·		Net sales by segment as a percent of total net sales   for the first   quarter were as follows: for the Americas, 48   percent ; for EMEA, 3 4   percent ; and for Asia-Pacific, 1 8   percent.	
	·		The decline in net sales in the Americas in the first quarter was primarily driven by lower maintenance product sales in the United States and Latin America. In the United States, in the comparable period last fiscal year, sales were higher than normal due to the initial launch of the WD-40 EZ-Reach Flexible Straw product offering.  In Latin America, maintenance product sales were lower primarily due to the uncertain business climate in Mexico.	

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	·		The decline   in net sales in EMEA in the first   quarter was primarily driven by   unfavorable impacts of foreign currency exchange rates   as well as decreased sales in the Company’s distributor markets in Eastern Europe.  Although market conditions have begun to stabilize in Russia , sales of maintenance products are down due to the market distributors in the region normalizing inventory levels to meet current market needs.   On a constant curr ency basis EMEA sales for the first   quarter would have in creased by $ 4.2   million or 1 3 percent compared to the prior year fiscal year period.	
	·		The increase   in sales in Asia-Pacific in the first   quarter was primarily driven by new distribution and increased promotional programs in Australia and China.  This sales increase was partially offset by a decrease in sales in the Company’s Asian distributor markets due to the timing of promotional activities and customer orders . Maintenance product s ales were lower in the Asian distributor markets in the first quarter due to certain customers buying product in advance of a price increase that took place at the end of the first quarter of fiscal year 2016.	
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Net Sales by Product Group (in thousands):
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﻿	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	
﻿	Three Months Ended November 30,	
﻿	2016	 	2015	 	Change	
Maintenance products	$	79,159 	 	$	82,241 	 	 	(4)%	
Homecare and cleaning products	 	10,089 	 	 	10,281 	 	 	(2)%	
Total	$	89,248 	 	$	92,522 	 	 	(4)%	
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	·		Net sales of maintenance products, which are considered the primary growth focus for the Company, decreased 4 percent in the f irst quarter when compared to the prior fiscal quarter period.  The decline in the first quarter was driven primarily by the unfavorable impact of foreign currency exchange rates, the timing of orders and promotional activities.  	
	·		Net sales of homecare and cleaning products decreased   2 percent   for the first quarter compared to the prior fiscal year period .   The homecare and cleaning products, particularly those in the U.S., are considered harvest brands providing healthy profit returns to the Company but are becoming a smaller part of the business as net sales of maintenance products grow per the execution of the Company’s strategic initiatives.    	
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Dividend and Share Repurchase
As previously announced, WD-40 Company’s board of directors declared on Tuesday, December 13, 2016   a   quarterly dividend of $0.4 9 per share reflecting an increase of 1 7 percent over the previous quarter’s dividend. The quarterly dividend is payable on January 31 , 201 7 to stockholders of record at the close of business on January 20 , 201 7 .
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On June 21, 2016, the Company’s Board of Directors approved a share buy-back plan. Under the plan, which became effective on September 1, 2016, the Company is authorized to acquire up to $75.0 million of its outstanding shares through August 31, 2018. The timing and amount of repurchases are based on terms and conditions as may be acceptable to the Company’s Chief Executive Officer and Chief Financial Officer and in compliance with all laws and regulations applicable thereto. During the period from September 1, 2016 through November 30, 2016, the Company repurchased 112,701 shares at a total cost of $12.2 million under this $75.0 million plan .  
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Fiscal Year 201 7   Guidance
The Company reaffirmed its guidance for fiscal year 201 7 as follows:
	·		Net sales growth is projected to be between 4 and 6 percent with net sales expected to be between   $395 million and $404 million.	
	·		Gross margin percentage for the   full year is expected to be near 56   percent . 	
	·		Advertising and promotion investments are projected to be near 6.0 percent of net sales . 	

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	·		Net income is projected to be between $51.3   million and $52.3   million.	
	·		Diluted earnings per share   is expected to be between $3.64 and $3.71   based on an estimated 14.1 million   weighted average shares outstanding.	
This guidance does not include any future acquisitions or divestitures and assumes that foreign currency exchange rates and crude oil prices will remain close to curre nt levels for the remainder of fiscal year 2017.
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Webcast Information
As previously announced, WD-40 Company management will host a live webcast at approximately 5:00 p.m. ET / 2:00 p.m. PT today to discuss these results. Other forward-looking and material information may also be discussed during this call.  Please visit http://investor.wd40company.com for more information and to view   supporting materials. 
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About WD-40 Company
WD-40 Company is 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. The Company markets its maintenance products and homecare and cleaning products under the following well-known brands: WD-40®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava®   and Solvol®.  
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Headquartered in San Diego, WD-40 Company recorded net sales of $381 million in fiscal year 2016 and its products are currently available in more than 176 countries and territories worldwide. WD-40 Company is traded on the NASDAQ Global Select market under the ticker symbol “WDFC.” For additional information about WD-40 Company please visit   http://www.wd40company.com .
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Forward-Looking Statements
Except for the historical information contained herein, this press release   contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect the Company’s current expectations with respect to currently available operating, financial and economic information.  These forward-looking statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated in or implied by the forward-looking statements.
 
Our forward-looking statements   include, but are not limited to,   discussions about future financial and operating results, including:    growth expectations for maintenance products; expected levels of promotional and advertising spending; plans for and success of product innovation, the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; and forecasted foreign currency exchange rates and commodity prices.  Our forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “could,” “may,” “aim,” “anticipate,” “estimate” and similar expressions. 
 
The Company's expectations, beliefs and forecasts are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that the Company's expectations, beliefs or   forecasts   will be achieved or accomplished.  
 
Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I ― Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2016, and in the Company’s Quarterly Report on Form 10-Q for the period ended   November 30, 2016 which the Company expects to file with the SEC on   January 9, 2016.
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All forward-looking statements included in this press release should be considered in the context of these risks. All forward-looking statements speak only as of   January 9, 2016, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on our forward-looking statements.
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Table Notes and General Definitions
	(1)		The Company markets maintenanc e products under the WD-40® , GT85® and 3-IN-ONE® brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use P roduct and the WD-40 Specialist® and WD-40 B IKE ® product lines.	
	(2)		The Company markets the followin g homecare and cleaning brands:  X-14® mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes® automatic toilet bowl cleaners, Carpet Fresh® and n o   v ac® rug and room deodorizers, Spot Shot® aerosol and liquid carpet stain removers, 1001® household cleaners and rug and room deodorizers and Lava® and Solvol® heavy-duty hand cleaners.	
	(3)		The Americas segment consists of the U.S., Canada and Latin America.	
	(4)		The EMEA segment consists of countries in Europe, the Middle East, Africa and India.	
	(5)		The Asia-Pacific segment consists of Australia, China and other countries in the Asia region.	
	(6)		Constant currency represents the translation of the current quarter and year-to-date results from the functional currencies of the Company’s subsidiaries to U.S. dollars using the exchange rate in effect for the corresponding periods of the prior fiscal year. 	
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WD-40 COMPANY	 	
CONDENSED CONSOLIDATED BALANCE SHEETS	 	
(Unaudited and in thousands, except share and per share amounts)	 	
﻿	 	 	 	 	 	 	
﻿	November 30,	 	August 31,	 	
﻿	2016	 	2016	 	
Assets	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	
Cash and cash equivalents	$	33,482 	 	$	50,891 	 	
Short-term investments	 	67,339 	 	 	57,633 	 	
Trade accounts receivable, less allowance for doubtful	 	 	 	 	 	 	
accounts of $242 and $394 at November 30, 2016	 	 	 	 	 	 	
and August 31, 2016, respectively	 	55,851 	 	 	64,680 	 	
Inventories	 	34,206 	 	 	31,793 	 	
Other current assets	 	3,641 	 	 	4,475 	 	
Total current assets	 	194,519 	 	 	209,472 	 	
Property and equipment, net	 	22,016 	 	 	11,545 	 	
Goodwill	 	95,432 	 	 	95,649 	 	
Other intangible assets, net	 	18,263 	 	 	19,191 	 	
Deferred tax assets, net	 	608 	 	 	621 	 	
Other assets	 	2,817 	 	 	3,190 	 	
Total assets	$	333,655 	 	$	339,668 	 	
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Liabilities and Shareholders' Equity	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	
Accounts payable	$	18,131 	 	$	18,690 	 	
Accrued liabilities	 	15,889 	 	 	15,757 	 	
Accrued payroll and related expenses	 	13,363 	 	 	20,866 	 	
Revolving credit facility, current	 	12,354 	 	 	 -	 	
Income taxes payable	 	4,295 	 	 	3,381 	 	
Total current liabilities	 	64,032 	 	 	58,694 	 	
Revolving credit facility	 	122,000 	 	 	122,000 	 	
Deferred tax liabilities, net	 	16,521 	 	 	16,365 	 	
Other long-term liabilities	 	2,655 	 	 	2,214 	 	
Total liabilities	 	205,208 	 	 	199,273 	 	
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Commitments and Contingencies	 	 	 	 	 	 	
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Shareholders' equity:	 	 	 	 	 	 	
Common stock ― authorized 36,000,000 shares, $0.001 par value;	 	 	 	 	 	 	
19,653,335 and 19,621,820 shares issued at November 30, 2016 and	 	 	 	 	 	 	
August 31, 2016, respectively; and 14,127,152 and 14,208,338 shares	 	 	 	 	 	 	
outstanding at November 30, 2016 and August 31, 2016, respectively	 	20 	 	 	20 	 	
Additional paid-in capital	 	146,498 	 	 	145,936 	 	
Retained earnings	 	295,402 	 	 	289,642 	 	
Accumulated other comprehensive income (loss)	 	(33,412)	 	 	(27,298)	 	
Common stock held in treasury, at cost ― 5,526,183 and 5,413,482	 	 	 	 	 	 	
shares at November 30, 2016 and August 31, 2016, respectively	 	(280,061)	 	 	(267,905)	 	
Total shareholders' equity	 	128,447 	 	 	140,395 	 	
Total liabilities and shareholders' equity	$	333,655 	 	$	339,668 	 	
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WD-40 COMPANY	
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	
(Unaudited and in thousands, except per share amounts)	
﻿	 	 	 	 	 	
﻿	Three Months Ended November 30,	
﻿	 	2016	 	 	2015	
﻿	 	 	 	 	 	
Net sales	$	89,248 	 	$	92,522 	
Cost of products sold	 	38,208 	 	 	41,114 	
Gross profit	 	51,040 	 	 	51,408 	
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Operating expenses:	 	 	 	 	 	
Selling, general and administrative	 	28,991 	 	 	27,848 	
Advertising and sales promotion	 	4,812 	 	 	5,660 	
Amortization of definite-lived intangible assets	 	721 	 	 	755 	
Total operating expenses	 	34,524 	 	 	34,263 	
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Income from operations	 	16,516 	 	 	17,145 	
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Other income (expense):	 	 	 	 	 	
Interest income	 	147 	 	 	148 	
Interest expense	 	(531)	 	 	(372)	
Other income (expense), net	 	264 	 	 	(51)	
Income before income taxes	 	16,396 	 	 	16,870 	
Provision for income taxes	 	4,638 	 	 	4,808 	
Net income	$	11,758 	 	$	12,062 	
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Earnings per common share:	 	 	 	 	 	
Basic	$	0.82 	 	$	0.83 	
Diluted	$	0.82 	 	$	0.83 	
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Shares used in per share calculations:	 	 	 	 	 	
Basic	 	14,180 	 	 	14,404 	
Diluted	 	14,221 	 	 	14,461 	
Dividends declared per common share	$	0.42 	 	$	0.38 	
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WD-40 COMPANY	 	
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	 	
(Unaudited and in thousands)	 	
﻿	 	 	 	 	 	 	
﻿	Three Months Ended November 30,	 	
﻿	2016	 	2015	 	
Operating activities:	 	 	 	 	 	 	
Net income	$	11,758 	 	$	12,062 	 	
Adjustments to reconcile net income to net cash provided by	 	 	 	 	 	 	
operating activities:	 	 	 	 	 	 	
Depreciation and amortization	 	1,620 	 	 	1,661 	 	
Net gains on sales and disposals of property and equipment	 	(54)	 	 	(3)	 	
Deferred income taxes	 	(405)	 	 	3 	 	
Excess tax benefits from settlements of stock-based equity awards	 	(435)	 	 	(1,390)	 	
Stock-based compensation	 	1,622 	 	 	633 	 	
Unrealized foreign currency exchange losses, net	 	1,075 	 	 	360 	 	
Provision for bad debts	 	(120)	 	 	78 	 	
Changes in assets and liabilities:	 	 	 	 	 	 	
Trade and other accounts receivable	 	6,357 	 	 	430 	 	
Inventories	 	(2,876)	 	 	(3,730)	 	
Other assets	 	1,070 	 	 	1,688 	 	
Accounts payable and accrued liabilities	 	203 	 	 	3,617 	 	
Accrued payroll and related expenses	 	(8,886)	 	 	(3,187)	 	
Income taxes payable	 	2,619 	 	 	2,403 	 	
Other long-term liabilities	 	(45)	 	 	20 	 	
Net cash provided by operating activities	 	13,503 	 	 	14,645 	 	
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Investing activities:	 	 	 	 	 	 	
Purchases of property and equipment	 	(11,603)	 	 	(448)	 	
Proceeds from sales of property and equipment	 	162 	 	 	 -	 	
Purchases of short-term investments	 	(16,997)	 	 	(2,933)	 	
Maturities of short-term investments	 	4,548 	 	 	2,846 	 	
Net cash used in investing activities	 	(23,890)	 	 	(535)	 	
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Financing activities:	 	 	 	 	 	 	
Treasury stock purchases	 	(12,156)	 	 	(8,075)	 	
Dividends paid	 	(5,998)	 	 	(5,500)	 	
Proceeds from issuance of common stock	 	197 	 	 	421 	 	
Excess tax benefits from settlements of stock-based equity awards	 	435 	 	 	1,390 	 	
Net proceeds from revolving credit facility	 	12,354 	 	 	10,000 	 	
 Net cash used in financing activities	 	(5,168)	 	 	(1,764)	 	
Effect of exchange rate changes on cash and cash equivalents	 	(1,854)	 	 	(1,171)	 	
Net (decrease) increase in cash and cash equivalents	 	(17,409)	 	 	11,175 	 	
Cash and cash equivalents at beginning of period	 	50,891 	 	 	53,896 	 	
Cash and cash equivalents at end of period	$	33,482 	 	$	65,071 	 	
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