The lubricant with thousands of uses, WD-40 is found in just about every toolbox in the nation. WD-40 Company (NASDAQ: WDFC) released 3Q 2008 results that show solid sales figure increases in all divisions around the globe. Net sales for the quarter increased 5.8% to $82 million. Net income was up by the same amount to $8 million. EPS increased 10% to $0.49. The story is much the same for YTD figures. WD-40 posted these numbers despite a tremendous run-up in the prices of raw materials. Senior management is being conservative and has, therefore, reduced FY2008 guidance. The company now expects net sales to increase 4-8% to $320-$332 million. Net income will be in the $30 to $31 million range and EPS in the $1.78-$1.85 range.
The company is rolling out its Smart Straw initiative globally. No more looking for the stupid little red straw that always got separated from the spray can. Now all aerosol cans of WD-40 have a built-in applicator. What a relief.
WD-40 also owns 3-in1 oil, Lava soap, X-14 and Carpet Fresh. None of these products are environmentally friendly by any stretch of the imagination. To counteract the perception that its products are not environmentally sensitive, WD-40 has launched a new product line, Spot Shot, comprised of an environmentally safe carpet stain remover and pet odor remover.
The stock is trading at just over $27, near its 52-week low of $26.50, and pays $0.25 in quarterly dividend.
WD-40 (NASDAQ: WDFC) issued its Q2 earnings report yesterday after the close of the market trading session -- and it wasn't full of great news. The top line was essentially flat as net sales dipped 0.5% to almost $79 million. Earnings came in at $0.51 per diluted share versus $0.52 per diluted share in the year-ago time frame.
Another negative aspect to the report was the statement of cash flows. WD-40 took in a lot less in terms of net cash from operations this time around, as changes in working capital and other items affected the flow. There's also a lot less cash on the balance sheet. And, sorry to say shareholders, but WD-40 missed analyst expectations by the proverbial penny. Investors shouldn't always be concerned with Wall Street expectations, but here's something that shareholders will be concerned with: the company lowered its earnings outlook. Management says that revenue growth will probably be somewhere between 4% and 8% as opposed to the originally expected range of between 7% and 10% -- any hopes for double-digit appreciation are now history. Net income per share is now expected to fall in a range between $1.80 and $1.90 versus a previous range of $1.83 and $1.93.
Well, now, what do we make of all this? It was a disappointing report, no question. But WD-40 has some decent brands in its portfolio, including the flagship lubricant, although its brand collection isn't necessarily on par with others, such as Procter & Gamble (NYSE: PG), Colgate-Palmolive (NYSE: CL), and Clorox (NYSE: CLX). WD-40 isn't the current best play in the consumer-goods department at the moment, in my humble opinion. Some will point out that the stock's yield is attractive right now at 3%, but its dividend history isn't as good as others in terms of quarterly hikes. I'm not very bullish on WD-40; maybe I will be at a later date.
Disclosure: I don't own shares in any of the companies mentioned; positions can change at any time.
Luckily, there is no indication yet that multi-purpose lubricant and cleanser manufacturer WD-40 Company (NASDAQ: WDFC), headquartered in San Diego, has been impacted by the devastating fires in San Diego. But even before its luck in the fires, things were going well for WD-40. The company posted record sales and earnings for FY 2007, sales were up 7% to $308 million and net income increased 12% to $31.5 million. Diluted EPS rose from $1.66 to $1.83, an increase of just under 10%.
Fourth quarter 2007 activity drove the bulk of WD-40's good numbers. Sales for 4Q were up 5%, net income was up 46% and diluted EPS increased 45%. In part, these great 4Q numbers are a result of WD-40 redesigning its spray lubricant containers to contain a permanently attached straw so users no longer have to hunt endlessly for the stupid little red straw that got lost long ago. CEO Garry Ridge has promised that most WD-40 lubricant products will have permanent straws by the end of 2008. Can't come soon enough.
WD-40's redesign is a smart move and will help counter slowing demand for its products in the U.S. market. This slow down is offset by rising sales in Europe, Latin America, Asia and a 50% sales increase in China.
WD-40 also owns commonly used household cleaning products X-14, Carpet Fresh and Spot Shot. Sales in this business unit are down, not because the products are faulty. They work exceptionally well, precisely because they are full of toxins and chemicals that have proved very effective. Overall, there is a slow consumer movement towards greener, more environmentally friendly household cleaning products. WD-40's cleaning products hardly qualify.
Based on 4Q and FY 2007 results, Ridge expects net sales to grow 7-10% to $329-$339 million in FY 2008, achieving EPS of $1.83-$1.93. The company will pay out its regular dividend of $0.25 per share and will continue its share repurchase program.
Multi-purpose lubricant, cleaning, and consumer products company WD-40 (NASDAQ: WDFC) is posting such good earnings that CEO Garry Ridge recently announced the company has revised FY guidance upwards. Net sales are predicted to grow 7-9% to $307-$313 million. FY EPS are predicted to be $1.70-$1.75 with net income of $29-$30 million. Ridge maintains these are viable numbers despite the capital expenditures necessary for WD-40 to open a direct sales operation in China by late 2007. WD-40 has posted these numbers despite increases in the cost of goods due to increases in the cost of raw materials, and a 10% increase in administrative expenses in 3Q 2007. Advertising and sales expenses are also on the increase by 12% as WD-40 moves into new markets outside the U.S.
WD-40 has no choice but to seek new international markets. Sales in Europe are up 23% in 3Q 2007 and up 17% in Asia/Pacific, not yet including China. These double-digit increases make up for the fact that sales in North America are down 2.5% in 3Q 2007. This decline is caused primarily by a 15% drop in sales of household products, which makes very little sense considering the company's flagship product, WD-40, posted a sales increase of just under 16%, and hand-cleaning products posted an impressive 12% increase. WD-40 makes well-known and widely respected cleaning products such as X-14 for cleaning soap scum and Carpet Fresh for removing spots in carpet. Granted, these products are a bit more expensive than competing brands, but these products unarguably work well and are found in the cleaning cabinets of many U.S. homes. After getting its China facility up and running full speed, perhaps WD-40 needs to turn its attention to convincing American consumers of the value of WD-40 products, not just their price.
Overall, 3Q net sales were up 6.2% and up 8.1% for 1Q-3Q 2007 inclusive. In addition to raising FY guidance, the company announced a $0.25 per share dividend.
BusinessWeek reports that a waitress -- for 20 years and a welder before that -- who has never owned a stock in her life is positioned to win CNBC's Million Dollar Contest. This is sort of like winning the lottery.
And luck -- combined with playing by the rules -- may help Mary Sue Williams of St. Clairsville, OH win that $1 million. According to the last official standings, posted on May 25, she was in sixth place, with a 29% return during the two-week final round. But since many top finishers are suspected of exploiting a loophole in CNBC's trading software to inflate their returns, CNBC may disqualify the five who are ahead of her, leaving Williams the most likely winner.
She followed her mother-in-law's advice, spending about an hour a day checking the financial web site Earnings.com for companies that were about to announce their quarterly results. She figured that companies reporting earnings were the most likely to see big moves. To pick specific stocks, she used the Warren Buffett approach: invest in what you know.
Brand supremacy is often said to be the Holy Grail of business. There is a San Diego firm that ranks among the leaders in the quest for that absolute. The company's product list is one of the best recognized anywhere.
WD-40 Company (NASDAQ: WDFC) produces lubricants, hand cleaners, and household cleaners. Products include lubricants WD-40 and 3-IN-ONE Oil, the Lava and Solvol brands of heavy-duty hand cleaners, 2000 Flushes toilet bowl cleaner, X-14 bathroom cleaners, Carpet Fresh rug and room deodorizers, and Spot Shot carpet stain remover. The firm attempts to build brand equities that are first or second choice in their respective categories, by acquiring and developing products that deliver a unique value to end users and that can be distributed across multiple trade channels. Key competitors are Clorox (NYSE: CLX), Church & Dwight (NYSE: CHD) and S.C. Johnson.
The company pleased investors last week, when it announced Q2 EPS of 52 cents and revenues of $79.3 million. Analysts had been expecting 46 cents and $78.3 million. Management also guided FY07 EPS to $1.70-1.85 ($1.76 consensus) and FY07 revenues to $307-324 million ($313.14M consensus). The board authorized an open-ended buy back of company shares up to $35 million, over the next 12 months.
Industrial lubricant and cleaning product manufacturer WD-40 Co. (NASDAQ: WDFC) released good news for second-quarter 2007. Net income rose to $8.9 million. Earnings per share were $0.52, a whole $0.06 per share better than estimated, and compared to $0.43 per share in 2Q 2006. Revenue was $79.3 million, up just shy of 11% from 2Q 2006. 2Q profit was up 24% due to strong sales of industrial lubricant products which helped offset lower heavy-duty cleaning products sales.
FY 2007 revenues are forecast in the $307-324 million range, EPS of $1.70-1.85. Given the hefty earnings, WD-40 board of directors authorized a share repurchase program of up to $35 million over the next 12 months. Management also authorized the regular quarterly dividend of $0.25 per share payable to stockholders of record as of 16 April 2007. The company will also continue looking for efficiencies in its cost of goods.
In addition to its flagship brand WD-40, the company also produces 3-in-One oil, Lava and Solvol cleaners, X-14 shower and tile cleanser, and Carpet Fresh carpet cleaner.
WD40 stock closed at $31.89, up $0.26 on the good news.
These four companies are on my watch list and I love them all. There are plenty of reasons to love my Dubya's; WD-40 (WDFC), Washington Mutual (WM), Wells Fargo Bank (WFC), and Wrigley (WWY) and I would be delighted to own them all...that is if Warren does not beat me to them.
They all pay higher than average dividends, have little or no debt, long illustrious histories, proven successful management, profitability, clear understandable businesses, and much more. I currently own Washington Mutual in my Roth IRA. Warren Buffett owns Wells Fargo and it has been reported he may be buying more. WD-40 and Wrigley are exactly the type of companies that Buffett would buy out in their entirety at the right price.
It is important to have a watch list because companies like these are not often on sale. Like Mr. Buffett I always want to buy at bargain prices. It is possible to make money buying them when they are not on sale but why not have the margin of safety (an important Benjamin Graham concept); there is no rush. Some of the companies/stocks I purchased in the last year were not available at bargain prices for many years prior. PATIENCE, PATIENCE--I watched Federal Express, UPS and Starbucks sadly wanting in but not having the right opportunity.
Luckily, there is no indication yet that multi-purpose lubricant and cleanser manufacturer 
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