Wednesday, lubricant and cleaning products company WD-40 Co. (WDFC), reported a 52.9% decline in the second-quarter profit from the year-ago period, primarily due to impairment charge and lower sales. The company also lowered its fiscal 2009 earnings and revenue outlook.
The San Diego, California-based company reported second-quarter net income of $4.08 million or $0.25 per share, down from $8.67 million or $0.51 per share in the corresponding quarter last year. On average, five analysts polled by Thomson Reuters estimated earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
Net income for the quarter was impacted by a $2.8 million brand valuation charge against the Carpet Fresh brand indefinite-lived intangible asset.
Other comprehensive loss for the quarter, which includes foreign currency translation adjustment, net of tax was $2.99 million compared to a comprehensive loss of $1.42 million in the second-quarter last year.
Including other comprehensive loss, total comprehensive income for the quarter declined to $1.09 million from $7.25 million in the similar period last year.
Net sales for the second-quarter declined 21.7% to $61.84 million from $78.95 million in the comparable period last year. Analysts estimated revenue of $71.35 million for the quarter.
Segment wise, second quarter multi-purpose maintenance products sales, which include the WD-40 and 3-IN-ONE brands were $47.1 million, down 20.6% from the same quarter last year. Home care and cleaning products sales, which include all other brands, was $14.8 million for the second quarter, down 24.9% from the year-ago corresponding period.
Garry Ridge, WD-40 President and CEO said, During the quarter, we were negatively impacted by the overall weakness in the global economy, the Carpet Fresh brand valuation charge as well as the negative impact of the foreign currency exchange rates. Even with these impacts, we ended the quarter within the range we guided and we remain a resilient company with a strong balance sheet, good cash flows, limited debt and minimal capital requirements.
Provision for income taxes for the quarter declined to $1.22 million from $4.58 million in the second-quarter of fiscal 2008.
Foreign exchange rates negatively impacted net sales for the quarter by $8.5 million and negatively affected net income by $1.6 million.
Gross margin was 49.6% in the second quarter, compared to 48.3% in the same quarter last year.
In the prior first-quarter, WD-40's 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 a year ago. Net sales for the quarter increased 5.6% to $83.60 million from $79.15 million in the comparable period last year.
Among others in the industry, Oakland, California-based cleaning product maker Clorox Co. (CLX), is scheduled to report third quarter financial results on May 1, 2009. Analysts currently expect the company to report earnings of $0.89 per share for the quarter on revenues of $1.37 billion.
Princeton, New Jersey-based Household and personal care product maker Church & Dwight Co. Inc. (CHD) reported a fourth-quarter net income of $44.2 million or $0.62 per share, up from $31.7 million or $0.46 per share in the prior year quarter. Net sales for the quarter increased 11% to $644.9 million from $579.7 million in the same quarter last year.
For the six-month period, WD-40 reported net income that decreased 21% to $11.77 million or $0.71 per share from $14.90 million or $0.87 per share in the corresponding period last year.
Other comprehensive loss for the half-year period widened to $11.24 million from $0.33 million in the six-month period of fiscal 2008.
Including other comprehensive loss, total comprehensive income for the six-month period was $0.53 million compared to $14.57 million in the six-month period of fiscal 2008.
Net sales for the half-year period were $145.43 million, down 8% from $158.10 million in the six-month period of fiscal 2008.
As previously announced on March 24, 2009, the WD-40 board of directors declared a regular quarterly dividend of $0.25 per share payable April 30, 2009 to stockholders of record on April 16, 2009.
Looking forward, WD-40 lowered fiscal 2009 net income guidance to a range of $22.5 million to $25.8 million, with earnings anticipated in the range of $1.35 to $1.55 per share. The net income includes negative foreign currency exchange impact of $5.0 million or $0.30 per share. Analysts currently estimate earnings of $1.63 per share for the fiscal year 2009. Previously, earnings were indicated in the range of $1.60 to $1.75 per share, on net income of $26.5 million - $29.0 million for the full year 2009.
The company also slashed fiscal 2009 sales to a range of $279.0 million - $292.0 million. Analysts currently estimate net sales of $311.77 million for the fiscal 2009. Prior net sales forecast of the company was in the range of between $305 million to $315 million.
WD-40 closed Wednesday's regular trading at $26.20, up $1.21 or 4.84%, on a volume of 94,811 shares on the Nasdaq. In after-hours, the stock lost $2.20 or 8.40% trading at $24.0.
For comments and feedback: contact email@example.com