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Sales Gains Lift Shares of WD-40

March 28, 2003|Hanah Cho | Times Staff Writer

WD-40 Co.'s namesake household lubricant may be slick, but the company showed no indication of slipping Thursday as its stock price rose 15%.

Shares gained $3.25 to close at $24.90 on Nasdaq a day after the San Diego-based company said second-quarter profit climbed 49 cents a share, or 26%, to $8.2 million, from $6.5 million, or 41 cents, in the year-earlier period.

Sales jumped 15% to $58.3 million for the period ended Feb. 28, which the company said was largely because more consumers in Asia, Canada and Europe bought WD-40 and 3-In-One oil. International sales jumped 13% to $37.6 million.

"Our strategy is diversification across brands, borders and business channels," Garry Ridge, president and chief executive, said in an interview.

Not only has the company focused on selling more of its lubricants overseas, Ridge said, but WD-40 also is expanding distribution of its flagship brand as well as its other products, which include such household cleaners as Lava hand soap, 2000 Flushes and Carpet Fresh.

"If you go into Wal-Mart, you'll find WD-40 in the sporting section, the automotive section, the home product section and the cleaning product section," said Patrick Winton, an analyst with Seidler Cos. in Los Angeles, who does not own WD-40 stock. "It lends itself to product extensions."

Yet the stock is off its 52-week high of $30.80 reached one year ago. Shares have lost 6% so far this year.

Partly to blame for the stock's dip is the overall downturn in the market, Winton said, adding that the latest results have shown investors that the company can continue to expand, particularly in the international market.

Despite strong second-quarter results, WD-40 reduced its fiscal 2003 earnings outlook to $1.60 and $1.65 a share, down

5 cents, because of a one-time charge and uncertainty in the market.

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