Wednesday, October 14, 2009

WD40 beats estimates, guides up for 2010 (WDFC)

Nice.

WD-40(WDFC) reported a big increase in 4th quarter earnings, thanks to easing cost pressures and closely watching their marketing expenses. Year-to-date sales were down 8%, entirely due to currency exchange rates.

-- Fourth quarter multi-purpose maintenance product sales, which include the WD-40 and 3-IN-ONE brands, were $59.6 million, up 2.6%, and $225.1 million for the year, down 4.6% from the prior year. Homecare and cleaning product sales, which include all of our other brands, were $18.2 million for the quarter, down 3.4% from the fourth quarter last year, and were $66.9 million year-to-date, down 17.6% from the prior year.

-- America's segment fourth quarter sales were up 4.0% compared to the prior year's quarter and were down 4.8% year-to-date from the prior year. Europe segment sales for the fourth quarter were up 0.2% compared to the prior year's quarter and were down 11.8% year-to-date from the prior year. Asia/Pacific segment sales for the fourth quarter were down 12.0% compared to the prior year's quarter and were down 12.2% year-to-date from the prior year.

Total sales by segment for the fiscal year were 58% from the Americas, 33% from Europe and 9% from Asia/Pacific.

Fourth quarter gross margin was 51.6% of sales compared to 44.8% in the same period last year. For the year, gross margin was 49.5% of sales, compared to 46.8% in the prior year.

"We are pleased to see our gross margin recover as we drew closer to our target of 50% as a percentage of net sales for FY09," Ridge said. "During the quarter, margin benefited from stabilization in the cost of petroleum-based products as well as positive impacts from investments related to our supply chain we made during the year.



Management increased guidance for 2010 earnings per share to about 1.87, versus the current street expectation of 1.74. That makes for a Price-to-Earnings of 17 and a Free Cash Flow Yield (my estimate) of about 6.7% -->> too light a yield for me to chase...

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