Profits slip away at WD-40
WD-40 reported fourth quarter 2019 net sales of $106.7 million, a 4% increase from sales of $102.6 million in the fourth quarter 2018.
Sales for the full fiscal year 2019 were $423.4 million, also an increase of nearly 4% compared to sales of $408.5 million for the full year 2018.
But the San Diego, Calif.-based manufacturer said profits slipped and posted a net income $8.6 million for the fourth quarter – a 60% slide from a net income of $21.6 million for the fourth quarter was $8.6 million. For the full fiscal year, WD-40 reported a net income of $55.9 million, down 14% from a net income of $65.2 million in 2018.
According to WD-40 Chief Financial Officer Jay Rembolt, the company’s earnings were negatively impacted by an $8.7 million reserve for an uncertain tax position.
“Because of this adjustment, our net income is significantly lower on a year-over-year basis in both the quarter and the full fiscal year,” Rembolt said “The good news is that this a one-time charge and the high tax rate we recorded is not expected to carry into fiscal year 2020. We expect the provision for income tax to be between 20 and 22 percent in fiscal year 2020.”
Net sales of maintenance products, considered the primary growth focus for the company, increased 4% in the fourth quarter with growth was primarily attributable to increased sales of WD-40 Multi-Use Product within the Asia-Pacific segment and increased sales of WD-40 Specialist within the Americas segment.
Net sales of homecare and cleaning products remained relatively constant in the fourth quarter when compared to the prior fiscal year period.
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The bottom line: WD-40 sales rise 4% but profits are hit hard by tax charges.
What the CEO said: "We are pleased that we achieved sales results in the fiscal year 2019 which reflect another solid year for the company. Our maintenance products delivered solid sales increases in the full fiscal year including 4 percent growth of WD-40 Multi-Use Product and 13 percent growth of WD-40 Specialist. I'd like to thank the tribe for their contributions during the fiscal year 2019. The tribe has never been more aligned and focused. We are clear about our purpose and we know what we need to do to achieve our long-term goals,” said Gary Ridge, CEO of WD-40.
Ridge is slated to be appointed as chairman of WD-40’s Board of Directors at the company’s annual meeting in December.
Company info: WD-40’s full fourth quarter and fiscal year 2019 report can be read here.
Sales for the full fiscal year 2019 were $423.4 million, also an increase of nearly 4% compared to sales of $408.5 million for the full year 2018.
But the San Diego, Calif.-based manufacturer said profits slipped and posted a net income $8.6 million for the fourth quarter – a 60% slide from a net income of $21.6 million for the fourth quarter was $8.6 million. For the full fiscal year, WD-40 reported a net income of $55.9 million, down 14% from a net income of $65.2 million in 2018.According to WD-40 Chief Financial Officer Jay Rembolt, the company’s earnings were negatively impacted by an $8.7 million reserve for an uncertain tax position.
“Because of this adjustment, our net income is significantly lower on a year-over-year basis in both the quarter and the full fiscal year,” Rembolt said “The good news is that this a one-time charge and the high tax rate we recorded is not expected to carry into fiscal year 2020. We expect the provision for income tax to be between 20 and 22 percent in fiscal year 2020.”
Net sales of maintenance products, considered the primary growth focus for the company, increased 4% in the fourth quarter with growth was primarily attributable to increased sales of WD-40 Multi-Use Product within the Asia-Pacific segment and increased sales of WD-40 Specialist within the Americas segment.
Net sales of homecare and cleaning products remained relatively constant in the fourth quarter when compared to the prior fiscal year period.
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The bottom line: WD-40 sales rise 4% but profits are hit hard by tax charges.
What the CEO said: "We are pleased that we achieved sales results in the fiscal year 2019 which reflect another solid year for the company. Our maintenance products delivered solid sales increases in the full fiscal year including 4 percent growth of WD-40 Multi-Use Product and 13 percent growth of WD-40 Specialist. I'd like to thank the tribe for their contributions during the fiscal year 2019. The tribe has never been more aligned and focused. We are clear about our purpose and we know what we need to do to achieve our long-term goals,” said Gary Ridge, CEO of WD-40.
Ridge is slated to be appointed as chairman of WD-40’s Board of Directors at the company’s annual meeting in December.
Company info: WD-40’s full fourth quarter and fiscal year 2019 report can be read here.