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WD40 Company Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: January 9, 2012 04:07PM

WD40 Company (WDFC) filed Quarterly Report for the period ended 2011-11-30. Wd40 Company has a market cap of $636.76 million; its shares were traded at around $39.89 with a P/E ratio of 18.64 and P/S ratio of 1.89. The dividend yield of Wd40 Company stocks is 2.91%. Wd40 Company had an annual average earning growth of 1.4% over the past 10 years. GuruFocus rated Wd40 Company the business predictability rank of 3-star.



Highlight of Business Operations:

Sales in the Europe segment decreased to $30.1 million, down $0.6 million, or 2%, for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year. Changes in foreign currency exchange rates for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year had a favorable impact on sales. Sales for the three months ended November 30, 2011 translated at the exchange rates in effect for the corresponding period of the prior fiscal year would have been $29.6 million in the Europe segment. Thus, on a constant currency basis, sales would have decreased by $1.1 million, or 4%, for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year.

The countries in Europe where we sell through a direct sales force include the U.K., Italy, France, Iberia (which includes Spain and Portugal) and the Germanics sales region (which includes Germany, Austria, Denmark, Switzerland and the Netherlands). Overall, sales from direct markets decreased $2.6 million, or 13%, for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year. We experienced sales decreases throughout most of the Europe segment for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year, with percentage decreases in sales as follows: U.K., 26%; France, 15%; Italy and the Germanics sales region, 6% each. Iberia experienced a sales increase of 8% from period to period.

Sales in Asia, which represented 71% of the total sales in the Asia-Pacific segment for the three months ended November 30, 2011, increased $2.7 million, or 36%, for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year primarily due to strong economic conditions throughout the Asia region. The distributor markets in the Asia region experienced a sales increase of $1.6 million, or 29%, for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year, primarily due to the continued growth of the WD-40 multi-use products throughout the distributor markets, including those in Indonesia, the Philippines and Korea. Sales in China increased $1.1 million, or 55%, for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year due to the ongoing growth of our base business and the higher level of orders placed by our customers during promotional programs.

Selling, general and administrative (“SG&A”) expenses for the three months ended November 30, 2011 increased $1.0 million, or 5%, to $22.6 million from $21.6 million for the corresponding period of the prior fiscal year. As a percentage of net sales, SG&A expenses slightly decreased to 26.6% for the three months ended November 30, 2011 from 26.8% for the corresponding period of the prior fiscal year. The increase in SG&A expenses was largely

Advertising and sales promotion expenses for the three months ended November 30, 2011 increased $1.7 million, or 29%, to $7.8 million from $6.1 million for the corresponding period of the prior fiscal year. As a percentage of net sales, these expenses increased to 9.2% for the three months ended November 30, 2011 from 7.5% for the corresponding period of the prior fiscal year. The increase in advertising and sales promotion expenses was due to a significantly higher level of advertising and promotional activities period over period, primarily in our Americas and Europe segments. Changes in foreign currency exchange rates did not have a material impact on advertising and sales promotion expenses for the three months ended November 30, 2011 compared to the corresponding period of the prior fiscal year. Investment in global advertising and sales promotion expenses for fiscal year 2012 is expected to be in the range of 6.5% to 8.0% of net sales.

Read the The complete Report



Stocks Discussed: WDFC,
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