WD-40 Company (NASDAQ:WDFC) Q2 2019 Earnings Conference Call Transcript

Apr 09, 2019 • 05:00 pm ET

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WD-40 Company (NASDAQ:WDFC) Q2 2019 Earnings Conference Call Transcript

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Presentation
Executive
Garry Ridge

that are going to get us there as our 2025 brands. They are WD-40 Multi-Use Product, WD-40 Specialist, 3-IN-ONE, WD-40 BIKE, GT85, 1001, Spot Shot, Solvol, Lava and no vac. Our 2025 brands are our core strategic focus with the primary growth engine for our Company.

Strategic initiative number one is to grow WD-40 Multi-Use Product. Our goal under this initiative is to make the blue and yellow can with a little red top available to more people in more places who will find more uses more often. Our goal under this initiative is to grow WD-40 Multi-Use Product to approximately $530 million in revenue by the end of fiscal 2025.

In the second quarter, sales of WD-40 Multi-Use Product was $78.4 million, down just under 1% compared to last year. The slowness was driven almost entirely by events in our largest market, the United States, which I'll discuss in greater detail in a moment. Sales of Multi-Use Product grew in nearly every other market during the second quarter, driven by geographic expansion and continued innovation. As part of this strategic initiative, we continue to introduce WD Multi-Use Product into new markets, targeting increased growth and higher availability around the globe.

During the second quarter, we continued the expansion of our WD-40 EZ Reach Flexible Straw, which is now available in over two dozen countries and we will continue to roll it out into new countries all around the world.

Strategic initiative number two is to grow the WD-40 Specialist product line.

In the second quarter, sales of WD-40 Specialist were $8.1 million, up 8% compared to the second quarter of last year. This continues to move the Company toward the goal for this initiative, growing the product line to approximately $100 million in revenue by the end of fiscal 2025. We are optimistic about the long-term opportunities for WD-40 Specialist, however there may be some volatility in sales levels along the way due to the timing of promotional programs, the building of distribution and various other factors that come with building out a new product line.

Strategic initiative number three is to broaden the product and revenue base. Strategic initiative number three includes maintenance products like 3-IN-ONE, WD-40 BIKE and GT85, but it also includes such brands as Spot Shot and Lava in the Americas and 1001 in EMEA and no vac and Solvol in the Asia Pacific. We believe we are on track to reach a combined revenue for these products of approximately $70 million by 2025. Sales under this strategic initiative were $12.6 million this quarter, up 5% compared to last year. Nearly all of the growth was attributable to strong sales of 1001 Carpet Fresh in the UK due to the favorable impacts of some digital marketing windfalls in the UK and around -- they were associated with this brand.

Strategic initiative number four is to attract, develop and retain outstanding tribe members. Our goal under this initiative is to attract, develop and retain talents and