WD-40 Company Reports Fourth Quarter and Fiscal Year 2019 Financial Results

~ Fourth quarter consolidated net sales grew 4 percent in reported currency and 6 percent on a constant currency basis period-over-period

Published

SAN DIEGO, Oct. 17, 2019 /PRNewswire/ -- WD-40 Company (NASDAQ:WDFC), a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world, today reported financial results for its fourth quarter and fiscal year ended August 31, 2019.

Financial Highlights and Summary

  • Total net sales for the fourth quarter were $106.7 million, an increase of 4 percent compared to the prior year fiscal quarter. For the full fiscal year, total net sales were $423.4 million, also an increase of 4 percent compared to the prior fiscal year.
  • Translation of the Company's foreign subsidiary results to U.S. dollars had an unfavorable impact on sales for the current quarter and full fiscal year. On a constant currency basis, total net sales would have been $109.2 million for the fourth quarter and $433.8 million for the full fiscal year.
  • Net income for the fourth quarter was $8.6 million, a decrease of 60 percent compared to the prior year fiscal quarter. For the full fiscal year, net income was $55.9 million, a decrease of 14 percent from the prior fiscal year.
  • Diluted earnings per share were $0.63 in the fourth quarter, compared to $1.54 per share for the prior year fiscal quarter. For the full fiscal year, diluted earnings per share were $4.02 compared to $4.64 in the prior fiscal year.
  • Gross margin was 54.6 percent in the fourth quarter compared to 55.2 percent in the prior year fiscal quarter. For the full fiscal year, gross margin was 54.9 percent compared to 55.1 percent in the prior fiscal year.
  • Selling, general and administrative expenses were down 3 percent in the fourth quarter to $28.7 million when compared to the prior year fiscal quarter. Selling, general and administrative expenses for the full fiscal year were up 2 percent to $123.9 million compared to the prior fiscal year.
  • Advertising and sales promotion expenses were down 9 percent in the fourth quarter to $5.9 million when compared to the prior year fiscal quarter. Advertising and sales promotion expenses for the full fiscal year were up 4 percent to $23.3 million compared to the prior fiscal year.

"In the fourth quarter, net income and diluted earnings per share were negatively impacted by an $8.7 million reserve for an uncertain tax position that we recorded, and previously disclosed, during the fourth quarter," said Jay Rembolt, WD-40 Company's chief financial officer. "Because of this adjustment, our net income is significantly lower on a year-over-year basis in both the quarter and the full fiscal year. The good news is that this a one-time charge and the high tax rate we recorded is not expected to carry into fiscal year 2020. We expect the provision for income tax to be between 20 and 22 percent in fiscal year 2020," concluded Rembolt.

WD-40 Company's chief executive officer, Garry Ridge added, "We are pleased that we achieved sales results in fiscal year 2019 which reflect another solid year for the Company. Our maintenance products delivered solid sales increases in the full fiscal year including 4 percent growth of WD-40 Multi-Use Product and 13 percent growth of WD-40 Specialist. I'd like to thank the tribe for their contributions during fiscal year 2019. The tribe has never been more aligned and focused. We are clear about our purpose and we know what we need to do to achieve our long-term goals."

Net Sales by Segment (in thousands):

Three Months Ended August 31, Fiscal Year Ended August 31,
2019 2018 %Change 2019 2018 %Change
Americas $ 49,318 $ 48,749 1% $ 193,972 $ 192,878 1%
EMEA 36,356 36,647 (1)% 160,615 150,878 6%
Asia-Pacific 21,070 17,244 22% 68,763 64,762 6%
 Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4%

 

  • Net sales by segment as a percent of total net sales for the fourth quarter were as follows: for the Americas, 46 percent; for EMEA, 34 percent; and for Asia-Pacific, 20 percent.
  • Net sales in the Americas were up 1 percent in the fourth quarter due entirely to higher sales of maintenance products in the United States and Canada, which increased 2 percent and 19 percent, respectively. This increase was partially offset by lower sales of maintenance products Latin America. The higher sales of maintenance products in the United States were primarily due to an increase in sales of WD-40 Specialist. The higher sales of maintenance products in Canada were primarily due to strong sales of WD-40 Multi-Use Product.
  • Net sales in EMEA decreased 1 percent in the fourth quarter primarily due to changes in foreign currency exchange rates, which had an unfavorable impact on sales for the EMEA segment from period to period. On a constant currency basis EMEA sales for the fourth quarter would have increased by $1.6 million, or 4 percent, compared to the prior fiscal year period primarily due to higher sales of WD-40 Multi-Use Product within EMEA's distributor markets. EMEA also experienced strong sales of homecare and cleaning products which increased 16 percent compared to the prior year fiscal period.
  • Net sales in Asia-Pacific increased 22 percent in the fourth quarter primarily due to a 28 percent increase in sales in the Asia distributor markets and a 22 percent increase in sales in China. The sales growth in the Asia distributor markets was primarily attributable to increased sales driven by successful promotional programs as well as the timing of customer orders in certain countries. The growth in China was due to the timing of promotional activities as well as continued growth within the e-commerce channel. Changes in foreign currency exchange rates had an unfavorable impact on sales for the Asia-Pacific segment from period to period. On a constant currency basis Asia-Pacific sales for the fourth quarter would have increased by $4.3 million, or 25 percent, compared to the prior fiscal year period.

Net Sales by Product Group (in thousands):

Three Months Ended August 31, Fiscal Year Ended August 31, Three Months Ended August 31, Fiscal Year Ended August 31,
2019 2018 %Change 2019 2018 %Change 2019 2018 %Change 2019 2018 %Change
Americas $ 49,318 $ 48,749 1% $ 193,972 $ 192,878 1% Maintenance products $ 97,273 $ 93,203 4% $ 386,644 $ 372,391 4%
EMEA 36,356 36,647 (1)% 160,615 150,878 6% Homecare and cleaning products 9,471 9,437 - 36,706 36,127 2%
Asia-Pacific 21,070 17,244 22% 68,763 64,762 6%  Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4%
 Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4%

 

  • Net sales of maintenance products, which are considered the primary growth focus for the Company, increased 4 percent in the fourth quarter when compared to the prior fiscal year period. This sales growth was primarily attributable to increased sales of WD-40 Multi-Use Product within the Asia-Pacific segment and increased sales of WD-40 Specialist within the Americas segment.
  • Net sales of homecare and cleaning products remained relatively constant in the fourth quarter when compared to the prior fiscal year period. The homecare and cleaning products, particularly those in the U.S., are considered harvest brands providing healthy profit returns to the Company and are becoming a smaller part of the business as net sales of multi-purpose maintenance products grow per the execution of the Company's strategic initiatives.

Dividend and Share Repurchase As previously announced, WD-40 Company's board of directors declared on Tuesday, October 8, 2019 a quarterly dividend of $0.61 per share payable October 31, 2019 to stockholders of record at the close of business on October 18, 2019.

On June 19, 2018, the Company's Board of Directors approved a share buy-back plan. Under the plan, which became effective on September 1, 2018, the Company is authorized to acquire up to $75.0 million of its outstanding shares through August 31, 2020. The timing and amount of repurchases are based on terms and conditions as may be acceptable to the Company's Chief Executive Officer and Chief Financial Officer and in compliance with all laws and regulations applicable thereto. During the period from September 1, 2018 through August 31, 2019, the Company repurchased 175,955 shares at a total cost of $29.6 million under this $75.0 million plan.

Fiscal Year 2020 Guidance The Company issued the following guidance for fiscal year 2020:

  • Net sales growth is projected to be between 3 and 7 percent with net sales expected to be between $436 million and $453 million.
  • Gross margin percentage for the full year is expected to be between 54 and 55 percent.
  • Advertising and promotion investments are projected to be between 5.5 and 6.0 percent of net sales.
  • The provision for income tax is expected to be between 20 and 22 percent.
  • Net income is projected to be between $65.0 million and $66.2 million.
  • Diluted earnings per share is expected to be between $4.74 and $4.83 based on an estimated 13.7 million weighted average shares outstanding.

This guidance is expressed in good faith and is believed by the Company to have a reasonable basis; however, it is not possible to predict with a reasonable degree of certainty the actual impact of fluctuating foreign currency exchange rates, and these currency fluctuations may have a significant impact on the Company's fiscal year 2020 guidance. This guidance does not include any future acquisitions or divestitures and assumes that crude oil prices will remain close to current levels for the remainder of fiscal year 2020.

Webcast InformationAs previously announced, WD-40 Company management will host a live webcast at approximately 5:00 p.m. ET / 2:00 p.m. PT today to discuss these results. Other forward-looking and material information may also be discussed during this call. Please visit http://investor.wd40company.com for more information and to view supporting materials.

About WD-40 CompanyWD-40 Company is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world. The Company markets its maintenance products and homecare and cleaning products under the following well-known brands: WD-40®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava® and Solvol®.

Headquartered in San Diego, WD-40 Company recorded net sales of $423.4 million in fiscal year 2019 and its products are currently available in more than 176 countries and territories worldwide. WD-40 Company is traded on the NASDAQ Global Select market under the ticker symbol "WDFC." For additional information about WD-40 Company please visit http://www.wd40company.com.

Forward-Looking StatementsExcept for the historical information contained herein, this press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect the Company's current expectations with respect to currently available operating, financial and economic information. These forward-looking statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated in or implied by the forward-looking statements

Our forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: growth expectations for maintenance products; expected levels of promotional and advertising spending; anticipated input costs for manufacturing and the costs associated with distribution of our products; plans for and success of product innovation, the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; expected tax rates and the impact of tax legislation and regulatory action; and forecasted foreign currency exchange rates and commodity prices. Our forward-looking statements are generally identified with words such as "believe," "expect," "intend," "plan," "could," "may," "aim," "anticipate," "target," "estimate" and similar expressions.

The Company's expectations, beliefs and forecasts are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that the Company's expectations, beliefs or forecasts will be achieved or accomplished.

Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I―Item 1A, "Risk Factors," in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2019, which the company expects to file with the SEC on October 22, 2019.

All forward-looking statements included in this press release should be considered in the context of these risks. All forward-looking statements speak only as of October 17, 2019, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on our forward-looking statements.

Three Months Ended August 31, Fiscal Year Ended August 31, Three Months Ended August 31, Fiscal Year Ended August 31, Table Notes and General Definitions
2019 2018 %Change 2019 2018 %Change 2019 2018 %Change 2019 2018 %Change (1) The Company markets maintenance products under the WD-40®, GT85® and 3-IN-ONE® brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKE® product lines.
Americas $ 49,318 $ 48,749 1% $ 193,972 $ 192,878 1% Maintenance products $ 97,273 $ 93,203 4% $ 386,644 $ 372,391 4% (2) The Company markets the following homecare and cleaning brands: X-14® mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes® automatic toilet bowl cleaners, Carpet Fresh® and no vac® rug and room deodorizers, Spot Shot® aerosol and liquid carpet stain removers, 1001® household cleaners and rug and room deodorizers and Lava® and Solvol® heavy-duty hand cleaners.
EMEA 36,356 36,647 (1)% 160,615 150,878 6% Homecare and cleaning products 9,471 9,437 - 36,706 36,127 2% (3) The Americas segment consists of the U.S., Canada and Latin America.
Asia-Pacific 21,070 17,244 22% 68,763 64,762 6%  Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4% (4) The EMEA segment consists of countries in Europe, the Middle East, Africa and India.
 Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4% (5) The Asia-Pacific segment consists of Australia, China and other countries in the Asia region.
(6) Constant currency represents the translation of the current quarter and year-to-date results from the functional currencies of the Company's subsidiaries to U.S. dollars using the exchange rate in effect for the corresponding periods of the prior fiscal year.

 

Three Months Ended August 31, Fiscal Year Ended August 31, Three Months Ended August 31, Fiscal Year Ended August 31, Table Notes and General Definitions WD-40 COMPANY
2019 2018 %Change 2019 2018 %Change 2019 2018 %Change 2019 2018 %Change (1) The Company markets maintenance products under the WD-40®, GT85® and 3-IN-ONE® brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKE® product lines. CONSOLIDATED BALANCE SHEETS
Americas $ 49,318 $ 48,749 1% $ 193,972 $ 192,878 1% Maintenance products $ 97,273 $ 93,203 4% $ 386,644 $ 372,391 4% (2) The Company markets the following homecare and cleaning brands: X-14® mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes® automatic toilet bowl cleaners, Carpet Fresh® and no vac® rug and room deodorizers, Spot Shot® aerosol and liquid carpet stain removers, 1001® household cleaners and rug and room deodorizers and Lava® and Solvol® heavy-duty hand cleaners. (Unaudited and in thousands, except share and per share amounts)
EMEA 36,356 36,647 (1)% 160,615 150,878 6% Homecare and cleaning products 9,471 9,437 - 36,706 36,127 2% (3) The Americas segment consists of the U.S., Canada and Latin America.
Asia-Pacific 21,070 17,244 22% 68,763 64,762 6%  Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4% (4) The EMEA segment consists of countries in Europe, the Middle East, Africa and India. August 31, August 31,
 Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4% (5) The Asia-Pacific segment consists of Australia, China and other countries in the Asia region. 2019 2018
(6) Constant currency represents the translation of the current quarter and year-to-date results from the functional currencies of the Company's subsidiaries to U.S. dollars using the exchange rate in effect for the corresponding periods of the prior fiscal year. Assets
Current assets:
Cash and cash equivalents $ 27,233 $ 48,866
Short-term investments - 219
Trade accounts receivable, less allowance for doubtful
accounts of $300 and $340 at August 31, 2019
and 2018, respectively 72,864 69,025
Inventories 40,682 36,536
Other current assets 7,216 13,337
Total current assets 147,995 167,983
Property and equipment, net 45,076 36,357
Goodwill 95,347 95,621
Other intangible assets, net 10,652 13,513
Deferred tax assets, net 403 511
Other assets 3,189 3,074
Total assets $ 302,662 $ 317,059
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 18,727 $ 19,115
Accrued liabilities 18,513 26,240
Accrued payroll and related expenses 15,301 14,823
Short-term borrowings 21,205 23,600
Income taxes payable 844 2,125
Total current liabilities 74,590 85,903
Long-term borrowings 60,221 62,800
Deferred tax liabilities, net 11,688 11,050
Other long-term liabilities 10,688 1,817
Total liabilities 157,187 161,570
Commitments and Contingencies
Shareholders' equity:
Common stock ― authorized 36,000,000 shares, $0.001 par value;
19,773,977 and 19,729,774 shares issued at August 31, 2019 and 2018,
respectively; and 13,718,661 and 13,850,413 shares outstanding at
August 31, 2019 and 2018, respectively 20 20
Additional paid-in capital 155,132 153,469
Retained earnings 374,060 351,266
Accumulated other comprehensive income (loss) (32,482) (27,636)
Common stock held in treasury, at cost ― 6,055,316 and 5,879,361
shares at August 31, 2019 and 2018, respectively (351,255) (321,630)
Total shareholders' equity 145,475 155,489
Total liabilities and shareholders' equity $ 302,662 $ 317,059

 

Three Months Ended August 31, Fiscal Year Ended August 31, Three Months Ended August 31, Fiscal Year Ended August 31, Table Notes and General Definitions WD-40 COMPANY WD-40 COMPANY
2019 2018 %Change 2019 2018 %Change 2019 2018 %Change 2019 2018 %Change (1) The Company markets maintenance products under the WD-40®, GT85® and 3-IN-ONE® brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKE® product lines. CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF OPERATIONS
Americas $ 49,318 $ 48,749 1% $ 193,972 $ 192,878 1% Maintenance products $ 97,273 $ 93,203 4% $ 386,644 $ 372,391 4% (2) The Company markets the following homecare and cleaning brands: X-14® mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes® automatic toilet bowl cleaners, Carpet Fresh® and no vac® rug and room deodorizers, Spot Shot® aerosol and liquid carpet stain removers, 1001® household cleaners and rug and room deodorizers and Lava® and Solvol® heavy-duty hand cleaners. (Unaudited and in thousands, except share and per share amounts) (Unaudited and in thousands, except per share amounts)
EMEA 36,356 36,647 (1)% 160,615 150,878 6% Homecare and cleaning products 9,471 9,437 - 36,706 36,127 2% (3) The Americas segment consists of the U.S., Canada and Latin America.
Asia-Pacific 21,070 17,244 22% 68,763 64,762 6%  Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4% (4) The EMEA segment consists of countries in Europe, the Middle East, Africa and India. August 31, August 31, Three Months Ended August 31, Fiscal Year Ended August 31,
 Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4% (5) The Asia-Pacific segment consists of Australia, China and other countries in the Asia region. 2019 2018 2019 2018 2019 2018
(6) Constant currency represents the translation of the current quarter and year-to-date results from the functional currencies of the Company's subsidiaries to U.S. dollars using the exchange rate in effect for the corresponding periods of the prior fiscal year. Assets
Current assets: Net sales $ 106,744 $ 102,640 $ 423,350 $ 408,518
Cash and cash equivalents $ 27,233 $ 48,866 Cost of products sold 48,476 45,990 191,010 183,255
Short-term investments - 219 Gross profit 58,268 56,650 232,340 225,263
Trade accounts receivable, less allowance for doubtful
accounts of $300 and $340 at August 31, 2019 Operating expenses:
and 2018, respectively 72,864 69,025 Selling, general and administrative 28,668 29,658 123,946 121,394
Inventories 40,682 36,536 Advertising and sales promotion 5,886 6,486 23,306 22,314
Other current assets 7,216 13,337 Amortization of definite-lived intangible assets 650 735 2,706 2,951
Total current assets 147,995 167,983 Total operating expenses 35,204 36,879 149,958 146,659
Property and equipment, net 45,076 36,357
Goodwill 95,347 95,621 Income from operations 23,064 19,771 82,382 78,604
Other intangible assets, net 10,652 13,513
Deferred tax assets, net 403 511 Other income (expense):
Other assets 3,189 3,074 Interest income 32 83 155 454
Total assets $ 302,662 $ 317,059 Interest expense (579) (1,171) (2,541) (4,219)
Other income (expense), net (54) 426 774 339
Liabilities and Shareholders' Equity Income before income taxes 22,463 19,109 80,770 75,178
Current liabilities: Provision for income taxes 13,879 (2,528) 24,862 9,963
Accounts payable $ 18,727 $ 19,115 Net income $ 8,584 $ 21,637 $ 55,908 $ 65,215
Accrued liabilities 18,513 26,240
Accrued payroll and related expenses 15,301 14,823 Earnings per common share:
Short-term borrowings 21,205 23,600 Basic $ 0.63 $ 1.55 $ 4.03 $ 4.65
Income taxes payable 844 2,125 Diluted $ 0.63 $ 1.54 $ 4.02 $ 4.64
Total current liabilities 74,590 85,903
Long-term borrowings 60,221 62,800 Shares used in per share calculations:
Deferred tax liabilities, net 11,688 11,050 Basic 13,731 13,869 13,799 13,929
Other long-term liabilities 10,688 1,817 Diluted 13,763 13,904 13,830 13,962
Total liabilities 157,187 161,570
Commitments and Contingencies
Shareholders' equity:
Common stock ― authorized 36,000,000 shares, $0.001 par value;
19,773,977 and 19,729,774 shares issued at August 31, 2019 and 2018,
respectively; and 13,718,661 and 13,850,413 shares outstanding at
August 31, 2019 and 2018, respectively 20 20
Additional paid-in capital 155,132 153,469
Retained earnings 374,060 351,266
Accumulated other comprehensive income (loss) (32,482) (27,636)
Common stock held in treasury, at cost ― 6,055,316 and 5,879,361
shares at August 31, 2019 and 2018, respectively (351,255) (321,630)
Total shareholders' equity 145,475 155,489
Total liabilities and shareholders' equity $ 302,662 $ 317,059

 

Three Months Ended August 31, Fiscal Year Ended August 31, Three Months Ended August 31, Fiscal Year Ended August 31, Table Notes and General Definitions WD-40 COMPANY WD-40 COMPANY WD-40 COMPANY
2019 2018 %Change 2019 2018 %Change 2019 2018 %Change 2019 2018 %Change (1) The Company markets maintenance products under the WD-40®, GT85® and 3-IN-ONE® brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKE® product lines. CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF OPERATIONS CONSOLIDATED STATEMENTS OF CASH FLOWS
Americas $ 49,318 $ 48,749 1% $ 193,972 $ 192,878 1% Maintenance products $ 97,273 $ 93,203 4% $ 386,644 $ 372,391 4% (2) The Company markets the following homecare and cleaning brands: X-14® mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes® automatic toilet bowl cleaners, Carpet Fresh® and no vac® rug and room deodorizers, Spot Shot® aerosol and liquid carpet stain removers, 1001® household cleaners and rug and room deodorizers and Lava® and Solvol® heavy-duty hand cleaners. (Unaudited and in thousands, except share and per share amounts) (Unaudited and in thousands, except per share amounts) (Unaudited and in thousands)
EMEA 36,356 36,647 (1)% 160,615 150,878 6% Homecare and cleaning products 9,471 9,437 - 36,706 36,127 2% (3) The Americas segment consists of the U.S., Canada and Latin America.
Asia-Pacific 21,070 17,244 22% 68,763 64,762 6%  Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4% (4) The EMEA segment consists of countries in Europe, the Middle East, Africa and India. August 31, August 31, Three Months Ended August 31, Fiscal Year Ended August 31, Fiscal Year Ended August 31,
 Total $ 106,744 $ 102,640 4% $ 423,350 $ 408,518 4% (5) The Asia-Pacific segment consists of Australia, China and other countries in the Asia region. 2019 2018 2019 2018 2019 2018 2019 2018
(6) Constant currency represents the translation of the current quarter and year-to-date results from the functional currencies of the Company's subsidiaries to U.S. dollars using the exchange rate in effect for the corresponding periods of the prior fiscal year. Assets Operating activities:
Current assets: Net sales $ 106,744 $ 102,640 $ 423,350 $ 408,518 Net income $ 55,908 $ 65,215
Cash and cash equivalents $ 27,233 $ 48,866 Cost of products sold 48,476 45,990 191,010 183,255 Adjustments to reconcile net income to net cash provided by
Short-term investments - 219 Gross profit 58,268 56,650 232,340 225,263 operating activities:
Trade accounts receivable, less allowance for doubtful Depreciation and amortization 7,593 7,800
accounts of $300 and $340 at August 31, 2019 Operating expenses: Net gains on sales and disposals of property and equipment (99) (164)
and 2018, respectively 72,864 69,025 Selling, general and administrative 28,668 29,658 123,946 121,394 Deferred income taxes (4) (7,186)
Inventories 40,682 36,536 Advertising and sales promotion 5,886 6,486 23,306 22,314 Stock-based compensation 4,446 4,195
Other current assets 7,216 13,337 Amortization of definite-lived intangible assets 650 735 2,706 2,951 Unrealized foreign currency exchange losses (gains), net 651 (302)
Total current assets 147,995 167,983 Total operating expenses 35,204 36,879 149,958 146,659 Provision for bad debts 67 121
Property and equipment, net 45,076 36,357 Changes in assets and liabilities:
Goodwill 95,347 95,621 Income from operations 23,064 19,771 82,382 78,604 Trade accounts receivable (7,318) (5,635)
Other intangible assets, net 10,652 13,513 Inventories (4,800) (1,299)
Deferred tax assets, net 403 511 Other income (expense): Other assets 5,802 (5,353)
Other assets 3,189 3,074 Interest income 32 83 155 454 Accounts payable and accrued liabilities (7,948) 6,107
Total assets $ 302,662 $ 317,059 Interest expense (579) (1,171) (2,541) (4,219) Accrued payroll and related expenses 879 590
Other income (expense), net (54) 426 774 339 Other long-term liabilities and income taxes payable 7,674 733
Liabilities and Shareholders' Equity Income before income taxes 22,463 19,109 80,770 75,178 Net cash provided by operating activities 62,851 64,822
Current liabilities: Provision for income taxes 13,879 (2,528) 24,862 9,963
Accounts payable $ 18,727 $ 19,115 Net income $ 8,584 $ 21,637 $ 55,908 $ 65,215 Investing activities:
Accrued liabilities 18,513 26,240 Purchases of property and equipment (13,282) (12,356)
Accrued payroll and related expenses 15,301 14,823 Earnings per common share: Proceeds from sales of property and equipment 383 458
Short-term borrowings 21,205 23,600 Basic $ 0.63 $ 1.55 $ 4.03 $ 4.65 Purchases of intangible assets - (175)
Income taxes payable 844 2,125 Diluted $ 0.63 $ 1.54 $ 4.02 $ 4.64 Purchases of short-term investments - (83,704)
Total current liabilities 74,590 85,903 Maturities of short-term investments 219 166,984
Long-term borrowings 60,221 62,800 Shares used in per share calculations: Net cash provided by (used in) investing activities (12,680) 71,207
Deferred tax liabilities, net 11,688 11,050 Basic 13,731 13,869 13,799 13,929
Other long-term liabilities 10,688 1,817 Diluted 13,763 13,904 13,830 13,962 Financing activities:
Total liabilities 157,187 161,570 Treasury stock purchases (29,625) (22,616)
Dividends paid (32,889) (29,585)
Commitments and Contingencies Proceeds from issuance of common stock - 215
Proceeds from issuance of long-term senior notes - 20,000
Shareholders' equity: Repayments of long-term senior notes (800) (400)
Common stock ― authorized 36,000,000 shares, $0.001 par value; Net (repayments) proceeds from revolving credit facility (2,912) (87,200)
19,773,977 and 19,729,774 shares issued at August 31, 2019 and 2018, Shares withheld to cover taxes upon conversion of equity awards (2,783) (1,823)
respectively; and 13,718,661 and 13,850,413 shares outstanding at Net cash used in financing activities (69,009) (121,409)
August 31, 2019 and 2018, respectively 20 20 Effect of exchange rate changes on cash and cash equivalents (2,795) (2,836)
Additional paid-in capital 155,132 153,469 Net increase (decrease) in cash and cash equivalents (21,633) 11,784
Retained earnings 374,060 351,266 Cash and cash equivalents at beginning of period 48,866 37,082
Accumulated other comprehensive income (loss) (32,482) (27,636) Cash and cash equivalents at end of period $ 27,233 $ 48,866
Common stock held in treasury, at cost ― 6,055,316 and 5,879,361
shares at August 31, 2019 and 2018, respectively (351,255) (321,630)
Total shareholders' equity 145,475 155,489
Total liabilities and shareholders' equity $ 302,662 $ 317,059

 

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