WD-40 Company (NASDAQ:WDFC) Q2 2020 Earnings Conference Call - Final Transcript

Apr 09, 2020 • 05:00 pm ET


WD-40 Company (NASDAQ:WDFC) Q2 2020 Earnings Conference Call - Final Transcript


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Garry Ridge

with our tribe, we successfully navigated those difficult times and the Company emerged stronger than when we entered. We realize that the difficult times we were encountering during the 2008 fiscal crisis were very different from the ones we are facing today. We are in a health crisis, which is impacting all parts of the globe and affecting economies worldwide. As a result, the outcome is very difficult to predict.

I have again confirmed in my mind that people are okay at dealing with risk but struggle with uncertainty. And while it is true that there's a lot we don't know today, there are some things we do know. We do know the health crisis is going to be a temporary disruptive to our business and that we will likely see [Phonetic] some short-term negative impacts on our financial results. We know that we'll probably face some challenges in the coming weeks and months, and we -- as we continue to operate a global business through these volatile and uncertain times. However, despite all this, we also know that we're going to get through this. We have a strong tribe who are dedicated to our brands and to our end users. We have a famous brand that people can trust and which can bring certainty to both our customers and our end users in these uncertain times.

We remain committed to making our products easy to buy, which is demonstrated by their availability in over 62 unique trade channels. We have a loyal end user base in more than 176 countries and territories around the world. We have acted to further bulletproof our balance sheet, thanks to the great work done by Jay and the finance team over the last couple of weeks. For all these reasons, I'm sure we are well positioned to navigate the storm as it unfolds from both a financial and operational perspective. This too will pass.

Now, let's talk about our long-term growth aspirations. As a reminder, our long-term growth aspirations are guideposts not guidance, and they are probably wrong and roughly right. Our long-term growth aspirations are to drive consolidated net sales to approximately $700 million and to do this while following our 55/30/25 business model. Our long-term targets are still very clear to us. However, with the uncertain global economy ahead, the timing of our 2025 aspirations may be delayed. During the second quarter, except for the Asia-Pacific segment, our long-term strategic drivers continued to perform mostly in line with our expectations.

Let's talk about the strategic initiatives. Number one is to grow the WD-40 Multi-Use Product. Our goal under this initiative is to grow WD-40 Multi-Use Product to approximately $530 million in revenue. In the second quarter, sales of WD-40 Multi-Use Product were $76 million, down 3% compared to last year. This decline was driven primarily by a 37% decline in Asia-Pacific, which was partially offset by increased sales in the Americas and EMEA of 7% and 1% respectively. The decline in