Q2 profit slips slightly at WD-40 Co.

San Diego-based WD-40 Co. reported net income of $10.5 million in the second quarter, down 1% compared with the previous year.

Net sales for the quarter ended Feb. 28 increased 1% to $86.7 million.

Gross margin was 50.9% in the second quarter compared with 49.0% in the same quarter last fiscal year.

"We were able to maintain our gross margin due to several factors, including the price increases we took last year to offset product cost increases, the relative stability in commodity costs and the benefits of the supply chain initiatives we implemented in China and North America," said Garry Ridge, president and CEO. 

Second-quarter multipurpose maintenance products sales, which include the WD-40, 3-In-One and Blue Works brands, were $75.4 million, up 6% from the prior-year fiscal quarter, and $157.2 million year-to-date, up 11% from the same period last fiscal year.

The multipurpose maintenance products are considered a primary focus for the company. Homecare and cleaning products sales, which include all other brands, were $11.3 million for the second quarter, down 23%, and were $24.8 million year-to-date, down 14%, both as compared with the prior fiscal year periods. The U.S. homecare and cleaning products are considered harvest brands providing healthy profit returns to the company and are becoming a smaller part of the business as the multi-purpose maintenance products sales grow.

For the first six months, sales increased 6% to $182.0 million. Year-to-date net income was $21.4 million, an increase of 23% from the prior fiscal year period.

The WD-40 Specialist product line was launched in fiscal year 2012 and was expanded into additional countries in the first half of fiscal year 2013. During the second quarter of fiscal year 2013, the company also launched three additional products in the WD-40 Specialist line: WD-40 Specialist Dirt & Dust Resistant Dry Lube, WD-40 Specialist Electrical Contact Cleaner Spray and WD-40 Specialist Machine & Engine Degreaser. The company recently launched the WD-40 Specialist Motor Bike line in the U.K. as well. 

"We are pleased with the performance of the WD-40 Specialist product line and what it does to bring the power of the WD-40 shield to new products that meet the needs of our end users," Ridge said. "As we planned, we continue to expand the WD-40 Specialist product line with new product offerings and in new categories, and later this year we will introduce a new line of products in the U.S. in the lawn and landscape arena."