WD-40 Co reports third quarter gains

San Diego-based WD-40 Co. Reported third-quarter net income of $12.7 million, up 16% from the same quarter last year.

Net sales for the quarter increased 4% to $96.4 million.

"We had a good quarter and are pleased we have seen solid year-over-year sales growth in maintenance products throughout all three of our trading blocs during the third quarter, despite the foreign currency exchange rate fluctuations which continue to impact our reported results," said Garry Ridge, WD-40 Company's president and CEO.

The company's cost of goods have benefited from "extremely low levels" of the cost of crude oil. But as oil prices recover, "we expect to see pressure on gross margin in the coming quarters," Ridge added.

"Our gross margin this quarter reflects the lowest oil costs we've seen in well over a decade. Our long-term target for gross margin is 55 percent however, as the cost of crude oil continues to increase from the extremely low levels that flowed through our cost of goods in the third quarter, we expect to see pressure on gross margin in the coming quarters.

Year-to-date total net sales were $283.5 million, a decrease of 1 percent compared to the prior year fiscal period.

Advertising and sales promotion expenses were up 13% in the third quarter to $6.2 million compared to prior year fiscal quarter. Year-to-date advertising and sales promotion expenses remained constant at $16.9 million compared to the prior year fiscal period.

Ridge refereed to the cmopany's far-flung employees as a "tribe," and said: "we are pleased that we will be able to reward them for their hard work across the globe."

Back at global headquarters in San Diego, meanwhile, plans are afoot to expand the building in use since 1973.

"Since that time, we've grown the San Diego corporate tribe from just a handful of people to roughly 20 employees," Ridge said. "In addition to our corporate employees, our San Diego facility also houses about 100 tribe members from our Americas trading block. For 40 years, we've attempted to make our current facility work by adding on additional square footage and leasing extra office space nearby. This has resulted in a work environment that limits collaboration, has inadequate meeting spaces, and quite frankly, is not the best work environment."

The new facility will come with a price tag of about $15 million.