WD-40 Posts Flat Second Quarter Sales

WD-40 Company, San Diego, reported net sales for the quarter ended Feb. 29, 2004 were $58.5 million, up a meager 0.2% from the second quarter of last year. Sales for the current year to date increased 1.2% to $111.0 million.

Net income for the quarter was $6.2 million, down 23.9% compared to $8.2 million for the prior year’s second quarter. Net income for the six-month period was down 15.3% to $10.6 million.

“While we had a few timing setbacks in the domestic business we continued with solid growth in our international markets,” said Garry O. Ridge, WD-40 Company president and chief executive officer. “We will continue to build on the strong platform that we have created to manage our business for long-term growth.”

Operating expenses were up 12.4% for the year due to the effect of foreign currency rates, increased advertising and marketing activity, professional services, freight, insurance and other items, executives said. The company gave much brand support to Spot Shot and WD-40 to strengthen the brands over time.

In the Americas, sales for the quarter were down 8% from a year ago. In Europe, second quarter sales were up 18% from the comparable period last year. The Asia/Pacific region also saw growth with total sales up 39% for the quarter. Executives contributed the growth to changes made with new marketing distributors and solid brand growth in Australia.

Global sales of the lubricants WD-40 and 3-IN-ONE Oil were up 7% for the quarter. However, sales of heavy-duty hand cleaners Lava and Solvol were down 9% for the quarter. “We continue to grow the Solvol brand in Australia, but are struggling with Lava sales in the U.S.,” Mr. Ridge said. “We are currently developing a plan for future alternatives for the Lava brand.”

Sales of household products X-14, Carpet Fresh, 2000 Flushes and Spot Shot were down collectively 13% compared to the previous year’s quarter. “During the quarter we also suffered from the effects of the phase-in of our new X-14 packaging which caused some temporary distribution delays,” added Mr. Ridge.

During the second quarter WD 40 began shipping a new 2000 Flushes Clip-On product and introduced three new products to the 3-in-One Oil Professional line.