WDFC - Earnings call transcript Q2 2018

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Operator

Good day and welcome to the WD-40 Company Second Quarter Fiscal Year 2018 Earnings Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. At the end of the prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] I would now like to turn the presentation over to the host for today's call, Ms. Investor Corporate of Director Kelley, Relations Communications. and Wendy proceed. Please

Wendy Kelley

Ridge, thanks for today Financial joining Thank Officer, WD-XX you. today. Officer, everyone and afternoon Garry Executive Chief call Good Jay us Rembolt. and to On President and Vice and President Company's Chief are our

on made transcript In the call. ending of documents Form as and XX-Q well presented today's in the period financial available will The call Investor at earnings call, on these encourage These call, our today's as we our release, addition reconciliations to earnings review location at available will replay discuss press XX, this available Web-site also non-GAAP to after February are and SEC non-GAAP are XXXX. investors measures. and be descriptions our shortly our filings information investor.wdXXcompany.com. today's we earnings Relations presentation. certain presentation, that On of for measures A

As future about a reminder, today's for performance. the statements expectations our call includes forward-looking Company's

course, could risk beliefs expressed SEC but refer or the and Please faith, The in in detailed discussion. that good results projections there Company's expectations, accomplished. could filings Of no will be for are assurance to they achieved differ our further factors be materially. actual

Garry. only Finally, current this as to a of call, X, With new turn for I'd update reviewing to obligation date, The information a of Company future is duty now any anyone information to as today's otherwise. call listening result written please all transcript Webcast or replay to or presented note XXXX. that April forward-looking that, over the information, disclaims whether a events, or any of like

Garry Ridge

period-over-period. an net year $XXX to the of and X% Company's reflecting the fiscal history. day in Good million $XX.X the the year million quarter in quarter last we call. quarter of fiscal share period for Wendy. second of a record year, second and second from the quarter million for fiscal for compared earnings for second much, was very last were the $XXX.X to of the XX% million last quarter Today Company. for to income the everyone new XXXX, $X.XX our the same fiscal of Net Diluted of welcome per increase sales conference $XX.X quarter you compared increase Thank reported $X.XX first year, second an

currency second quarter we are exchange sales thus the solid this Foreign seeing organic favorably impacted rates year. fiscal in our far growth but

the a on basis first have Our the half basis. X% reported by global grown constant a currency for on X% by net sales year of and

a initiatives. about with discussion strategic start our let's Now

our Cuts by sales As you is end have most from of brand-building this recall, million this year. Tax and of will to to as drive the we long-term the in $XXX and approximately year are XXXX. revenue going In decided net savings support a realize an that fiscal fiscal revenue target of invest target $X to Jobs additional the Act, to we of result million consolidated in

keep we aspirational, know we said, right our the opportunities that, We they once In are we Richard in opportunities. that if our acknowledge but targets core can global Branson our 'If fiscal focus volume focus sampling anticipated scare identified focus This of used of digital the Multi-Use presence and end-user first will to two In programs building strategies of currently countries in we making groups successful. as are too evaluating light your the and you, dreams don't believe be our targeted for and brand increase to addition, places, year. main as abundant to gift, our additional aware but investment buy. is Product products are the investments making small.' to XXXX key fast-track end-user a will on easy be next It growth areas are of we

Let's Product. Multi-Use the look at number take WD-XX strategic initiatives, grow being a one now

sales $XXX take important more most red frequently. top a can In of yellow more order and in that achieve geographic to as the Reach, WD-XX need last increase quarter, to for little reflecting to up of it strategic more product, the version expansion compared were of an global In In Multi-Use revenue, Multi-Use launched million, Product of EZ have with to net an which of Product flexible both the year. is European target the WD-XX places of blue Multi-Use last initiative innovative all are second second WD-XX our Flexible, sales continue use featuring X% building the and is Multi-Use our year. them as through newest innovation. Product we through X% million quarter, to second compared Our $XX.X we Year-to-date, markets of people Product quarter in well across straw. strategy

about we deliberate new very being of are staging product. how are We the release this

Italy results. We initial in product are with and have the we begun happy of in distribution trade-focused channels the

in this in distribution third add fiscal quarter to expect year. of France We the

The second Specialist to WD-XX grow strategic the line. is initiative product

line Our categories. expansion Specialist grow and to through target product this as new initiative well product geographic under products as continued WD-XX is by developing

several a the products. last we've Specialist years, robust developed pipeline Over WD-XX of

stated year. new our to Now end XXXX. revenue Specialist was in on and to our of initiatives to building sales sales of were the needs achieve of million and focus compared WD-XX global Specialist market order XX% distribution second year. up to last $X.X compared be innovations of target WD-XX these the quarter, In million, second increase the reflecting Year-to-date, $XXX an awareness XX% net last by for quarter in of of

the long-term are about We opportunities Specialist. for WD-XX optimistic

to some broaden timing base. are new will the that other out way of the product levels promotional you along programs, three while building initiative factors and product due number sales is build and distribution, Strategic the various in to However, of the common line. revenue be volatility a there

their as believe Solvol initiative three existing GTXX, as maintenance sources Our to Bike, under products also Asia in and brands Strategic Spot in from number reflecting last of the X% develop Year-to-date nurture products the X% strengths under the this members. Shot XXXX. quarter includes recognized initiative vac X-IN-ONE, included combined to of products and to and initiative is and initiative initiative sales and retain to the new is to derive like are such brands Pacific. second compared compared goal well this to in includes Company as and second this $XX Lava under attract, number quarter, Strategic the of revenues WD-XX tribe products grow of $XX.X can four outstanding year. were fiscal but revenue leverage million, continue this last to we up an included and no year. of approximately Americas, We XXXX the reach expect In of initiative of revenue EMEA, million products. WD-XX global by sales increase end under

talented grow Our goal XX%. the to engagement tribe members retain under and this and member greater is develop tribe to attract, initiative than

the report we to tribe index XX engagement our increased During employee members that happy global basis survey. a ago very XXX employee XX.X%. quarter, asked second engagement in two to from our I'm to participate years biannual score points by

values values care, WD-XX learning. of told high based guided culture. with opinions they WD-XX candor, by by and Company. our people answered our XX% nourished We for they fit responsibility, us our XX% tribe that tell and a Company and good fact, And the of accountability are engagement cultivate love work to employee a feel In tribe they by on that creating culture their

engagement way score a that employee is of Our reflection life. of

our from to and X I'm house is Milton we a miles Keynes you quarter that to located share current Additionally, purchased new our happy with The members. office. during U.K.-based only building new facility second the tribe located

early We Strategic the to operational number are spring to of XXXX. move the of initiative five currently tribe is new building this expect in stages renovating space we the excellence. and in the

Our better against at We one Volatile by operational best goal improvements is safeguarding and to brands. while this XX/XX/XX Protecting under us. and the ourselves here priority initiative prices, business making long-term systems business against than over over gross are today. for business will steel, commodity this executing update on is those processes intact. values making XX/XX/XX the making we a Accordingly, core our and our summarized WD-XX to but margins impact some XX/XX/XX remain short-term, measure coming the to the ability is model oil our must it our model margins it initiatives. including months gross excellence completes by Company, target initiative of have ensure for model our strategic the the our within ranges That adjustments remain in proactive the price term. long the over by the

So, of starting with results, our let's Americas. on details second to quarter the sales move the

XX X% were impacts it of from Transaction-related their this the million, increase sales. total quarter as had As second subsidiary X% quarter, just year. currencies consolidated in net year. EMEA U.S. in we On to last affects Translation net the results a foreign impact basis, $XXX.X translation-related sales an were million have I constant on would insignificant mentioned $X.X sales China, under a to segment. or million up and of currency compared favorable reported is Canada, and This refer what second Australia, from impacts to sales of last earlier, EMEA been the dollars quarter. functional in

rates obviously million So, $X.X foreign was on sales that the in and total, increased changes update second exchange net results. quarter, global currency in about in by the

which with last Americas happened segments. compared X% maintenance Americas, compared of products X% year in distribution year. in U.S. in Net to what products the the to at year and start XX% in individual sales America. fiscal to WD-XX of quarter Americas, States $XX in net million. X% products States, second XXXX. the were look primarily the due early Maintenance a last Year-to-date the include the United maintenance quarter, Latin second the Specialist take flat to in United new increased due up launched let's relatively Now, the increased of for in to sales America a Latin increase in the Sales products were due by sales of of Canada, sales higher were sales the Americas. that in in and primarily the We'll

in quarter, sales Canada maintenance the offset in were second the due decrease in a to In addition, up maintenance the sales activities. sales sales due both some of to during X-IN-ONE. X% the WD-XX in of quarter primarily products Latin These by Specialist products timing increased were America promotional and X% increases

homecare to products. and homecare last and exclude of maintenance the our products X% decreased cleaning reminder, quarter our as Sales same a Americas the cleaning second our of in year. in products the period As compared

sales Middle compared second rates. and million EMEA the quarter, basis, net Year-to-date, in to $XX.X last second year. Now foreign on in constant by includes are impacted up sales reported last positively year. were net exchange EMEA, sales to the Europe, to last India, compared X% EMEA, X% from increased XX% currency EMEA in to which East, up in currency the EMEA's a quarter in year. results decreased the Africa, On

As Reported you in the direct due a through region, markets, base EMEA timing direct growth direct the as as are was distributors. sales into quarter, X% increased local by helpful of in our to to In in levels sales we of of activities primarily US$XX.X In to product Straw quarter in euro-based by to direct know, at Specialist. increased focusing customer direct to combination sales consolidated currencies business. of we continued and million. the of the in sterling due of Smart WD-XX our WD-XX the EMEA in through sales and on the primarily quarter, WD-XX during accounted Also sales sell higher results these contributing region which XX% line. markets the the sales in growth the XX% for operations our higher our well X% in markets. which that Specialist driven look increased pound markets, based overall It's also transactions the markets, conduct promotional marketing orders increase

markets, turn These sales decreased customer let's by which timing million. EMEA quarter. driven for distributor X% EMEA of declines of our in the currency, market distributor Now second quarter XX% to In EMEA XX accounted orders. the to were during sales our reported the

the in WD-XX countries compared million basis, were includes second which X% Australia, XX.X second region. sales year. currency Year-to-date, quarter, in Asia-Pacific, a to in on compared results. a and impact sales successful Australia, net million in sales increased sales from in foreign positive last increased year. net line the period-to-period. by other on This Changes exchange up in in last the up year. On consolidated promotional $X.X increase to was rates of In dollars currency have product up in driven U.S. China, or X% net X% Asia-Pacific, and the last distribution to Now quarter, XX% these Specialist primarily sales had the activities constant by Asia-Pacific expanded region, to would in XXX,XXX are

net compared was market activities Asian to increase million higher This in region, in the Our promotion particular last X.X sales of X% and distributor up Thailand. year. sales to Taiwan quarter, level in in attributed the were a primarily in

building Changes year. distributor activities. for by last a of the sell we currency for second had long-term turn the these China, expect basis, XXX,XXX timing to I'll promotional period-to-period. markets of dollars dollars China, XX% increase volatility distribution, to due This are Asian quarter our not financials. second the shifting results. the now. and quarter, with Our on by the products increased in a up Jay in in that opportunities along promotional rates a sales varying optimistic due XX% it year. the to to constant the patterns, We the program positive over in the of conducted In or impact was U.S. exchange we continue million On now That's remain of about sales a programs, during in compared lot economic foreign out the U.S. although sales the primarily review $X.X we would way net currency since who in impacted have currency, me region. will of were industrial

Jay Rembolt

Thank you, Garry.

the review These model. let's our the targets guide business business. First, to use we XX/XX/XX are long-term

XX of cost target As doing represents depreciation of sales. excluding margin, our total the we which XX% business, you at may is our and gross be The XX operating expenses net recall, amortization. represents which to

EBITDA. Our And doing time cost of our represents that goal then is toward to drive business over the XX%. finally, XX

chemicals major or at the our basis include XX.X% margin, cans, XX. second in we'll the primarily which compared our petroleum-based input year. negatively our In points. Changes last was aerosol costs, First, margin and XX.X% specialty look to gross quarter, XXX impacted gross by margin

one is As feedstocks you our of crude know, petroleum-based primary oil chemicals. specialty of the

crude margin Our goods margin was to of compared XX points by impacted aerosol was increased through cost cans. gross oil year. higher negatively because was second the our negatively to contributing that with points in XX Also the basis our quarter of last cost flowed by sold cost the associated average our basis

gross were cans, impacted remind XX our primarily Asia-Pacific which and and to increases XX% in cost and segment. points. by other over months, points. sales implemented seen impacts negatively impacted recent addition, which crude unchanged. the impact increases margin by These last In were a sales to the the XX These for sold negative impacts there goods by variety margin to margin in and XX we positively increases gross margin that partially costs aerosol by warehousing higher impacts which Americas of price despite target costs, miscellaneous offset mostly of select other cost in include remains Gross and mix combined oil from gross inbound non-oil basis margin EMEA to can-related basis due negatively we've like points XX other gross I'd changes. was of basis also freight you

most input our we've it on and of recently Now price review factors goods us rising three implement our which trading necessary cost costs increases markets. put in blocks. all our would experienced pricing made to of These of in have economic structure for pressure our

business be gross so a margin continue that in XX% the that we is above focused We of and over target level managing at maintain to deliberate our our can long-term.

factor XX% of reported achieving impacted Revenue the quarter, In doing the business. our percentage. of business or the address last the of cost XX% was long-term growth XX business our compared second is in our year, year. approximately target. our most our cost second cost to this In positively doing quarter I'll important Now, revenue XX% of doing increase

by For currency products make cost foreign compared the this second year customers. more then percent areas; investments our sales our exchange professional office last. in were unfavorable decreased offset the cost to costs, increased million the our depreciation new $X from costs. tribe; quarter, investment and items our three business costs, SG&A the our cost rates we X%, associated to advertising San contributed service second costs, of the other the was development promotion, compared in product investment period. of X.X% also in related to primarily In a costs, increased costs get people-related quarter; of of came prior primarily general increased increased than to to second in and changes finally, and our year including incentive XX% people marketing, as promotion doing due increases make building Diego, to increased we freight the advertising in our quarter, freight and compensation, to as and earned Various overhead decreased costs SG&A new expense These with or

to our to of is have of While in that of support objective sales, continue our to make will investments operational business our strategic doing our necessary of XX% net cost we of target closer excellence. initiative

As Garry investments doing in our an currently million cost and will business of as are these A&P promotion during mentioned we anticipate additional well. investment Accordingly, year results fiscal impact decided to in we of additional development this next brand we've year $X invest for evaluating and earlier, the an near-term. advertising support

measures. That to this sales expect to revenues as second discussion us move brings EBITDA for the of target model our on XX% the was both net of XX% last This to last EBITDA, business year. the over XX/XX/XX of the to continue year quarter. and we completes However, grow. of long-term closer our the our quarter for

Tax tax worth XX.X% for last decrease the items One, XX.X% other of The in income second the the year. quarter Now, to I'll in effective discuss this noting. a was compared couple the provision primarily Jobs U.S. was the Act and to quarter rate the Cuts of favorable which for effective from year. tax us in impact in became due the second income

In of rate adjustment income addition, last that will August for points foreign losses. apply we second which year rate the XX, X prior XX% tax to quarter ends Since certain exchange year. currency an associated a year with income fiscal tax is the on the unrealized XXXX, effective for statutory blended below higher from impacts due under fiscal our about percentage year tax just of of was

the second to and up rates we year, are consolidated quarter foreign reform, million of tax currency year per $X.XX effective the rate basis, are tax to constant the the diluted a results We income that to the on have U.S. from to were SEC. to the exchange two best year reform to compared last favorable XX% for translation total the $XXX,XXX provisional Company's to subject in tax These outstanding offset the common one-time combined little share currency about to revisions period amounts, as shares Diluted related the was our in the of deferred well as to will issued unremitted second means one last were liabilities, quarter reform, XX%. U.S. discrete re-measurement also the the reflecting mandatory based of of tax effective assets the in rate this impact of recent year. our charge from These items recorded on on as estimates in essentially amounts, a year, tax management's full during Changes earnings during the would year fiscal million items decreased after tax one increase ago. by $X.XX quarter of re-measurement which a this XX% U.S. a weighted compared shares had the provisional benefit a year but is net an On initial tax on of Based change both had analysis when guidance tax in amounts to XXXX. increased to average our earnings. foreign million another that XX% enactment note XX recorded quarter. two period impact second and Company's $XX.X million XX.X compared from prior important the in and the they our fiscal the by It these items subject at time. expect for same shares of that of income Net range. be the $XX.X of one-time

the allocation, typically providing net buy The and of balance Keynes to returns purchase investment the renovate approach the as about the to At a to will we capital growth investing and target capital able includes an stockholders. were making house find Now, our $X.X our while and equip new and comprehensive to to investment X% area word building the quarter, this We CapEx, CapEx our of to anticipate building we office but strategy the addition approximately to members. long-term be of discussed, our remainder XX months. second allocation million to Milton million between $XX tribe strong our for XX of of maintenance normal estimated next used end office previously U.K.-based and in maintenance an X% $XX over million. in sales, renovate a building

U.K. tribe very are are building the new expected to excited and relocate year. the in next to fiscal members Our

capital per X.X%. cash annualized XXXX, today's share, of is dividend dividend payable of on at on of return and approved quarterly to And close price closing record based the of April a On to of business to the repurchases. March stockholders continue XX, Directors XX. $X.XX April our through regular yield share Board shareholders $XXX, dividends XX We

guidance. we over Board approved our that, we XXXX With $X.X second to plan. the $XX.X the which was second let's end our quarter, by remaining total million current had of of shares of year the During $XX the under turn a under fiscal in XXXX. repurchase stock share repurchased quarter, million cost At just June fiscal XX,XXX the at our million plan,

new net we our advertising to be $XXX near tax X% to expected as higher to is for Net as with year. to expected rate between $XXX costs, our We rates, and investment make, and and tax additional and sales foreign is growth the investments between full promotions our on we the X%, currency to this guidance effective additional with updated exchange year net are projected the million And are the advertising legislation, be tend updating million. reflect Gross XX%. investments sales that's well margin fiscal promotion been is making to input be the XXXX. be XX.X based impacts earnings revised exchange but average near to between any for and X% shares currency does of to foreign of Tax acquisitions to And the expected sales. be income Cuts anticipated commodity Jobs between million remainder it include remain prices an and future is $XX.X current projected or and the Net $XX.X assumes $X.XX completes projected $X.XX includes overview. is financial estimated weighted be the divestitures not and per share Act diluted on million. of and to million that And levels will outstanding. that This rates close guidance

Now Garry. it I'll over back turn to

Garry Ridge

today call this did Jay. You million on heard sales quarter us you, from that and ever Company $XXX.X hear record reported you first In the million history. in summary, what today? we of the $XXX Thank net

net growth basis. basis a on on You a X% growth seen heard X% year-to-date solid with constant that currency a we've and growth reported sales

that XX% during grew heard the of sales Specialist quarter. global You WD-XX

of that we heard EPS You $X.XX. record today reported

year Act by brand and of Cuts global million more heard $X in year fiscal results You were we that and Tax next to additional invest reported support impacted and the an Jobs that during intend favorably development. our this

two employee ago engagement increased to from XX.X%. that points the years survey XX basis score heard You global

to and heard as updated well making foreign margin given to You as this that and heard increase line to making we've tax rate, are exchange that proactive guidance cost, fiscal XX/XX/XX our we additional with commodity our rates, year. And input currency adjustments promotional we're remains XXXX ensure you the our the investments updated in model, effective year some our in business gross higher reflect revised price investments advertising costs.

go, who call today in with to the where usual, So, open from now not it's our for I'd and closing share today like it you we'll your Charles a it's joining travel be is, with'. for you us you to conference 'In tribe. life, Schulz, as pleased Thank you quote for and That's questions.

Operator

the with [Operator first line Liam Instructions] of comes Burke question Riley your FBR. Please proceed Your from question. with B.

Liam Burke

Garry, EZ domestically us you doing it? some you to want Reach catch been give color however on in has how or the could Americas,

Garry Ridge

our end fact sales, certainly it's EZ the expectation. Reach meeting users domestically the but has and We product you'll a have in that of a embraced, quite break out see displays don't of new it currently we're been individual we've U.S. out our it also around we out it. with in that stores and and rolled France enter Italy Australia. as the now in we've comfortable major promotional rolled very And period it number in

think I month it And last Australia next will in quarter. on during actually that about talked TV we the a or racing so featured around be big motor carnival.

Liam Burke

separate or on Is additional that promotion announced Reach? the tied you is investment EZ to the the from incremental that brand-building $X million call

Garry Ridge

up million The separate. Liam. year $X year focused, we'll is investing what this It's very and end next

'make enhancement done to the include e-commerce of enhance buy' engine opportunities, investment go easy categories or be the in education ago our assets presence optimizing and have on this optimization a digital a will 'make both month it place that to global program. our concluded We our and YouTube, end-user with will digital Web-sites the the first information and a aware' that optimizing global globally, things dive about will space the our deep and very on just workshop in search and like

it So, there. go of the majority will

for programs cetera. China, Mexico opportunity in our markets, of et larger targeted The India, sampling to other will some example, go

Liam Burke

Okay, happened what doing Could there? sequentially. give business the on was great. Thank on Jay, your you us Garry. down of business a of cost little you, front, piece the SG&A color

Jay Rembolt

was from came that Some the of impact the on incentive lowering. lower really It the compensation. bigger

Liam Burke

great. that's and thanks, Jay, Okay, Garry. Thanks,

Operator

Daniel question Please proceed comes your line from with next Jefferies. the Your with Rizzo question. of

Daniel Rizzo

EMEA distributors that suggest quarter? is lumpiness quarter there in was in to of it's to just kind to going mentioned due weakness quarter flow that be here, Would issues. from You snapback with the third timing that a the

Garry Ridge

time over and have distributor for quarter, has see in anticipation will whether know that I third will we the the and for track on the it off don't year be ebbs We be be no flows. but business we distributor that year. would will our business

So, about. are concerned that we nothing particularly it's

Daniel Rizzo

And days provide? we're between take having lag it Okay. cost. the than the announcing or was that, increases input is I offset it mentioned you wondering, you versus when then usually realized color can less the what XX that XXX two to today. just I to price mean, any is what that's or higher

Garry Ridge

already go gone increases, price some into In States, X. the the into United they of have effect on them Yes, like effect. June markets other

announce we month our to them So about a did customers ago.

going I margin think I have should think don't see we're a or headwind. we huge tail to the stabilize. So,

we well line we come up pretty third think quarter. as the I should through

Daniel Rizzo

Okay. I the necessary And from sales organically? meet developing to just in you XX number is And new did goal about mentioned million for you to just allude or initiative M&A. that it XXXX, is was if net But three. more goals then on M&A wondering brands

Garry Ridge

We have our million that of right no is about, we XX million. XXXX are in M&A that plans now That goal. talking chart I products in group doing aggregate in XX our think

So it's not a huge growth.

brand the two offset included not fall-off of by Particularly that. some the are in offset WD-XX will there there. that from the household see of We X-IN-ONE products will are Bike the products fall-off some in growth the that and be that that will are areas and

Daniel Rizzo

Thank very you much. Okay.

Operator

the Morbelli your line of with Company. & question. Your Please proceed next Rosemarie question Gabelli with comes from

Rosemarie Morbelli

so have the X% of second the the were the second so previous for disconnect the up but XX% year there. why to question was quarter in quarter the date, answer but income we in reason growth year-to-date, kind rate slowed Jay's if while a revenues SG&A wondering X%, quarter, up on was XX% I was up net to

Garry Ridge

No.

Our we but be. we it as to go that's year incentive through we programs of our annualized truing up a pay adjusts just as of year, were growth see commissions, what are think program, if the an you reward will what cost our to. incentive annual so matter don't quarterly It's the us progresses alluding program

Rosemarie Morbelli

the what So it XX% since in line, quarter? then the helped net second grew income

Jay Rembolt

of portion from the benefit. A came big tax that

Rosemarie Morbelli

Okay.

missed Okay, totally that.

Jay Rembolt

big that a We really significant impact got earnings. benefit quarter in a had on the

Rosemarie Morbelli

out. one that figured have should I thanks. Okay,

anticipating between use out the tax XXXX the a to XXXX years? for Is rate and number are XX% to You good that and be XX%.

Jay Rembolt

that. and finalized might bit expect that a drop haven't the would We out but years, than we XXXX little the lower it

Garry Ridge

And the this reason year is a is rate. being blended

August. year fiscal is September to Our

old September December the period of So year the rate balance at through from at we've new rate. the to got the and the

would we be year a why that's full So, slightly expect full rate it fiscal in fiscal, of to our XXXX. in different the

Rosemarie Morbelli

selling prices Okay, increase estimate the me the half this at percent you year? And let raw can of first margin, got material the gross on percent rephrase versus for thanks. cost you increase the your in this, looking

Jay Rembolt

increases, had benefit We from price the should the the to didn't XX costs. significant we that, that from input points able – positive more amount be math we on so had margin, the but a do impact partially the much or offset on we by increase basis do of it of in offsetting

Rosemarie Morbelli

the XX that basis points? Was

Jay Rembolt

input the costs points. XXX Yes, in were total basis

from the impact points. offset points negative basis So XXX a of positive impact by XX we price increases had of a basis

Rosemarie Morbelli

Okay, yes, I see.

your plus the So the aren't the Europe, And cans, that and what me between you Reach and U.S. introducing Flexible the can you you all why is same? EZ help they then, in the are difference understand, in had right. the crude

Garry Ridge

exactly same. than translates Reach in call are different just Italian They and a name. the Flexible them better EZ Spanish We does.

with a description. exactly slightly same product the So different it's

Rosemarie Morbelli

than found thought had Okay. that worked something that the you Reach. I EZ better

Garry Ridge

No, it's the just naming.

Rosemarie Morbelli

question the And to? All of a inventory timing. sales then distribution on needed down, said also built okay. was Was to that distribution you the right, at the they get lastly, EMEA level it

Garry Ridge

No. wasn't. No, it

it whether globally, Asia-Pacific as not necessarily it's in areas. as other a in Latin distributors, in be because or business distributors few EMEA distributor it's would smooth or America, large in Our

unusual down, quarters that unusual So, in But event, up, where of we had overall, we event, just Russia, that. where continues years to but have some would quarters growth it's it's it's about a do there timing some couple a an have call trend, thing. talk a unless and out is no you trend we ago be the like and

Rosemarie Morbelli

Okay.

Jay Rembolt

market year-to-date. up itself X% the And is

Garry Ridge

Yes.

Rosemarie Morbelli

Okay. Thank you much. very

Operator

time for ask participation today's disconnect your thank for you line. our and that conference questions. Ladies your call you conclude does that gentlemen, allotted on We please and

WD-40 (WDFC) 5 Apr 182018 Q2 Earnings call transcript