WD-40 sales slip, but profits climb

San Diego-based WD-40 reported sales for the first quarter ended Nov. 30 of $77.7 million, a decrease of 7.0% from the first quarter last year. Net income for the first quarter was $9.4 million, up 22.5% over the prior-year first quarter.

Gross margin was 51.4% in the first quarter, compared with 46.3% in the same quarter last year.

"Our continued focus has helped us weather these turbulent times and produce positive overall results," said Garry O. Ridge, WD-40 company president and CEO. He pointed to a focus on product development, supply chain enhancements and the benefits of price increases that accompanied increased cost of goods.

The company also saw a boost from its participation in marketing surrounding the movie "Cloudy with a Chance of Meatballs." The company gave away Spot Shot stain removers along with DVDs as part of the program, leading to a "positive sales lift" for the brand.

"In the current quarter, we continued to see improving economic stability in many markets and saw some of our core customers realize sales growth compared with major declines experienced during fiscal 2009," Ridge told investors. "We saw relative stability in foreign currency exchange rates and raw material costs, both of which significantly impact our results and gross margins."

Another cause of optimism for the company was its Blue Works line, targeting industrial customers and the repair maintenance and overhaul markets -- not through hardware stores, though, Ridge said. Blue Works, which began shipping in December, is a line of specialty maintenance products described as "industrial strength."