Wednesday, WD-40 Co. (WDFC), reported a 23.4% rise in the first-quarter net income from the year-ago period primarily due to a 14.9% rise in revenue from multi-purpose maintenance products. The company lowered its fiscal year 2009 earnings outlook and issued earnings guidance for second quarter.
The San Diego, California-based company's first quarter net income rose to $7.69 million or $0.46 per share from $6.23 million or $0.36 per share in the corresponding quarter last year. On average, five analysts polled by First Call/Thomson Financial estimated earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items such as one-time gain or expense.
Net sales for the quarter increased 5.6% to $83.60 million from $79.15 million in the comparable period last year. Analysts estimated revenue of $82.44 million for the quarter.
Segment wise, first quarter multi-purpose maintenance products sales, which include the WD-40 and 3-IN-ONE brands, were $65.9 million, up 14.9% from the same quarter last year. Home care and cleaning products sales, which include all other brands, was $17.7 million in the first quarter, down 18.8% from the corresponding period a year ago.
Americas first quarter sales were $45.5 million, up 4.5% from similar period last year. Europe sales in the quarter were $30.1 million, up 6.1% from prior-year comparable period. Asia-Pacific quarter sales were $7.9 million, up 10.3% from last year comparable period.
Garry Ridge, WD-40 president and CEO said, "We are pleased we met our expectations for the first quarter and had solid growth across all of our international regions, but it did not come without challenges. We continue to be impacted by the changing global economy and costs of raw materials."
The company noted that despite solid gains in local currencies in many of its international markets, sales grew only modestly due to the impact of foreign exchange rates, which negatively affected net sales by $5.5 million.
On a cautious note, Ridge said that due to the deteriorating global economy, the volatility in the costs of raw materials and the significant fluctuations in foreign exchange rates, the company does not have the same degree of confidence in its ability to accurately predict the future. Thus, he said that the company will continue to provide ongoing annual and periodic quarterly guidance only and will not be providing a longer-term outlook at this time.
Looking forward, WD-40 expects second quarter fiscal 2009 net income in the range of $3.8 million to $4.6 million and earnings in the range of $0.23 to $0.28 per share based on an estimated 16.6 million shares outstanding. Analysts currently estimate earnings of $0.48 per share for the quarter.
The company expects second quarter fiscal 2009 net sales in the range of $69.0 million to $73.0 million. Revenue estimate of analysts currently stands at $82.25 million for the quarter.
WD-40 lowered its fiscal year 2009 earnings guidance to the range of $1.60 to $1.75 per share based on a net income in the range of $26.5 million to $29.0 million and an estimated 16.6 million shares outstanding. Earnings estimate of analysts is currently $1.77 per share for the full year 2009. The prior earnings guidance for fiscal 2009 was in the range of $1.65 to $1.85 per share.
The company also lowered its fiscal year 2009 net sales to the range of $305 million to $315 million. Analysts currently expect the company to report revenue of $329.51 million for the fiscal year 2009. Previous revenue guidance of the company was in the range of $323 million to $343 million.
As previously announced, the board of directors had declared a regular quarterly dividend of $0.25 per share, payable January 30, 2009 to stockholders of record on January 8, 2009. The company also announced at its annual shareholder meeting on December 9, 2008, that Kenneth Olson, a company director since 2000, retired from the board effective as of the annual meeting. With his retirement, the exact number of authorized directors is now fixed at 8.
Ridge concluded saying, "We continue to see fluctuations in our cost of raw products, and while the price of oil is down, we are just starting to see that flow into the costs of our finished goods. We are also not seeing the benefits of the softening in overall steel prices because our primary cost is in the tinplate we use for aerosol cans, which has risen substantially."
WD-40 closed Wednesday's regular trading at $26.79, down $1.15 or 4.12%, on a volume of 71,760 shares on the Nasdaq. In after-hours trade, the stock is currently down $1.12 or 4.01% trading at $26.82.
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