WDFC - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by. Good day, and welcome to the WD-40 Company Third Quarter Fiscal Year 2020 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. like call, the Ms. now host over I'd today's for Instructions] to conference turn to [Operator Wendy Corporate Communications. Director Kelley, of Investor Relations and proceed. Please

Wendy Kelley

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

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

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

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

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

Garry Ridge

times. homes. healthy WD-XX Wendy day, Good tribe joining families hope Company. for and Jay, and in from are for staying unprecedented once and call. have am engaged dialing in conference the Steve, so I Wendy. at I grateful are safe again thanks our these highly We us and you respective Thanks, today's your for we

global the of been operates time span one The to right tribe a we take thing and able language, or refrain quickly by and On we hold countries has typically political everywhere XX a on from has me has ways, XXX and business. ourselves. which ingenuity, tribe demonstrated innovation speaking in have to volatile by dramatic as moment quarter making topic, workforce. a confronted a certain, around of we engaged members of social different Through business results this to agility locations a Company have considerable this tribe the has an relates different WD-XX it long even own COVID-XX to enabled history situation. our religions about has minds. world, everyone's issues but But because how political the has been the something I’d quickly ethnicity, challenging unparalleled in conduct adapted cultures. structure, countries members changes tribe deliver to when uncertain of publicly doing range completely we been circumstances. to highly each our importance us like our share As impacted in to reinforced that extremely how thing effort that the and is our This conduct during to

can wrong world are initiatives make everything and inclusion. to for to At both there diversity and acts stakeholders improvement. However, runs listening, our know that always end, saddening. reflecting, we evaluating continue and the practices, and to deeply room racism plague racial meaningful injustice WD-XX that how culture and operate, equality, we find is our our want to our learning a senseless and and ways we Company, impact. protocols counter of central we are things that teach, And celebrate these we To while we are to

share our expect XXXX. initial file focus with report in and inclusion to ESG that continuing diversity in We October expect to on our efforts in progress these we stakeholders of our areas and

the disruptions caused to we disturbances past Given has today. lot and for that cover the a have COVID-XX months, several

touched For most of of beyond has our experienced. us, COVID lives and we've has aspects every challenges anything created

easy Steve the quarter. sales in third quarter e-commerce $XX.X the in geographies movement down third discuss mental that challenged. physical user contrary, To and been decline value and the our in was heard to the of Difficulty] our is performed disruptions often You've e-commerce and channels the this with to aware due down we buy, developed, well detail our not making In to pandemic. fiscal certain few very that were making that or to through Where always yet, had been simply lockdown products XXXX, currencies last me or maneuvered compared greater through the global results countries strict U.S. multi-country, sales the third is trade crisis impact has a the the a we the have our period, believe not success. $XXX.X We've we of multi-channel us in functional say pause, third this due of we XX% been less have third a reset by distribution Though awareness them strategy is this minutes, of in our locked this has very our quarter for will where targets strictest COVID-XX awareness have place restrictions not in stabilize subsidiary’s end deliver like and health primarily their in had growth business reported individual clear to required the we during and in do pandemic more have core buy our strategy foreign easy had net our dollar [Technical is future. even of places thrive on to measures become been related to to COVID-XX, million to will this said, I we the million the how sales the Today, enabled impacts segments, focused particularly an crisis clear those to and from on in sales the in constant basis, immediate on quarter. the well. with can such place aspirations. get way do over The quarter. crisis laser Translation to simply unfavorable COVID-XX have very a but test On business currency very quarter. through that reset third culture. What would achieve with

they're our As a growth and guidance, probably roughly. and reminder, aspirations guidepost, are wrong our

to are year. We to our and Our the of this our an model. growth net approximately aspirations XX/XX/XX aspirations do while aspirations to following be calendar business uncertain that the global million, to to later able update are ahead, drive $XXX investors hope growth unclear. provide of sales to on growth still timing consolidated Because our economy

which on Multi-Use number one, is grow initiative strategic to Product. So, to WD-XX

under a sales grow in $XX.X WD-XX The sales Our down primarily to initiative Product Multi-Use million at third of WD-XX driven decline year. Multi-Use XX% was revenue. last approximately the WD-XX Product in many compared to was goral XX% this both, and decline to were the the quarter, is In Multi-Use by Product by which COVID-XX. in to Product $XXX to pandemic. million, EMEA measures of the due impacted respectively declined and adopted decline region impacts WD-XX by to Americas Asia-Pacific, COVID-XX additionally the in in XX%, sales in countries This lockdown significant due the of lower response Multi-Use XX%,

they without so have As has systems been I'm Next our you systems. deliver. end delivery capability has the will like blue in brand convenience to toolbox friendly Straw with to value Delivery that to on actuator yellow and Canada. arrived the ways excited experience. has Smart which Generation easy users have Straw the end a to share innovation, Smart be latest more focused on store Straw successful we locking create evolved, spray better love premiumize a sold the and Smart very Generation, user Next our ability and with durable, has because a or shelves

of WD-XX Smart ramp Canada is Product Generation, X and Specialist the third to the about way leading grow to the can last product have sales conversion As Smart quarter, shared Multi-Use with objective remained was grow sales. global our will XX% a we as is Specialist attributed optimistic quarter approximately primarily relatively line in believe in is We of Specialist view penetration revenue. is WD-XX these long-term sales much Asia-Pacific, Next in Specialist sales you to initiative to XX% line. product for Strategic Straw we and remain in which year, increase third next year. to the to driven $XXX the fiscal Straw in opportunities The of China. launching WD-XX up In past, WD-XX stability constant compared begin grow win number by strong our we globally times. in challenging to we the WD-XX which in of million efforts

In the significant quarter, shared we addition, the WD-XX you global We've this sales on third experienced year. we of made Specialist, Specialist progress which strong channel. of e-commerce with re-brand within WD-XX during the earlier

our Lava such customers refreshed brand WD-XX our from Americas, in homecare number of but We hit on store brands share Strategic product little the base. product layering store. in most packaging in initiative ahead some Solvol improve yellow and Shot is Specialist initiative for in also red I'm can XXXX EMEA the awareness Strategic the the and includes are in will you a May time first For line. revenue vac asset, top. to very with and to and WD-XX will refreshed we and positive iconic Specialist getting the ever, fully product broaden believe the [Technical no with number findability Difficulty] feedback and that leverage Spot the schedule includes blue as X accelerate Asia-Pacific. happy and packaging shelves X

$XX under compared in goal approximately for initiative Global of this products initiatives were million combined sales $XX.X to third quarter, products to Our constant in last relatively the million. included revenues the these reach is year. of

Although last tribe the were were respectively, cleaning demand of to COVID-XX buying more vast crisis. as health sales of in category Strategic increased particularly members. XX% and strong top under BIKE and pandemic. WD-XX outstanding them BIKE Sales hit of year, bicycles ever EMEA to the by initiative to develop priority due our XX%, up to people mother the counterintuitive, hardest making actually And us our were sales majority is result and The invention, and been fixing home a XXXX well-being It riding their have up and quarter, year remain the of they in are and our last the in products of tribe than safety seems more flat Accordingly, during connected is to and be families world say, COVID learned areas phased as of a that homecare necessity this for as the but retain report prolonged in compared is number X attract, and collaborative this efficiently savvy that or months. I as their our team progress are tribe happy four around I'm That technically office sequestering more work this returns the of tribe. from said, working more homes. the comfort employees and a to and how the the in open is think of being environment. offices our of an either some from global to before.

some excellence excellence. always the perspective, I X months. and we operational been pass of flexible these hurdles. impacts the short-term who to safely deliver, our financial more in operational well over thoughtful, over these. They a highlights. these due must our return times to any offices, better is financial being call in will considerable commitments, of equipped is health been an the believe or of perspective, our approaches. has have From crisis. operational overcome of our an stewards are has to we We and operational shareholders’ not I'll deliberate as number good resources all the is discuss that one conservative global size our focused the never capital, fits and the served From to despite now how four Steve, in Strategic and commitment tribe in tribe to enormous this our and last like initiative there been execute has asset

Steve Brass

a what experienced line as shared with roughly hit The and COVID-XX around Unfortunately, as and spoke how on we in to hard we afternoon. the health global driven more to went much know well segments good more relatively When our May seen. individual the on challenge Though with a the basis. into primarily and some presents held evaluate would March, that market. daily which April We our by we levels significant and that pandemic. be the us and in back particular by the in with that compared optimistic open world any of we sales hardest you result became historically whether countries was and lockdown. we've challenges Garry crisis of the up were you operations in countries, unique had the despite or in March not more didn't address enormous place. for most sales in lockdown stringent of quarter many of were orders to markets revenue COVID-XX us industries, were continue We were Thanks our disruption performance a third the distribution declines most in channels hit saw impact

to strict were e-commerce markets trade markets many markets, our X% for U.S., losses in experienced example, a less developed our channels respectively. those these offset most distribution business and is down which e-commerce example, channels. very us emerging And markets States business, in shut of have with is For helped in other in we and the was our developed. in lockdowns, of simply increased In Australia, sales distribution because XX%, open. traditional the we This United and

the who As in a us Since very months shopping markets third In place. online becoming pandemic number the us for become how leader sales the last a global to have robust been are committed in the is in and vision digital were of One strategy is began, consumers four to that's in thing rapidly in result, we these e-commerce. e-commerce restricted has severely increasing. category of our it to important clear XXXX, quarter. the

to the seismic advantage to fortunate we've us We’re in take that made place. investments space taking positioned the shift of that is this e-commerce have currently

sales sales our three quarter, of up strong XX%, brick we in e-commerce by by third in growth are global distribution trading XXX% offset grew across some blocks. and sales this the markets. all mortar and with loss the e-commerce During to many approximately approximately Year-to-date, experienced helped

in and the the starting States, America. by sales a million. So, due sales and lockdown down third our of XX% the XX% happening trade Canada, in with take Multi-Use availability let's WD-XX Americas, now in around closer the due This the Americas, driven includes distribution of X% due the decline to which complete pandemic. what's decreased markets $XX.X decreased disruptions sale in a of quarter United Sales to Net products, was in nearly Latin Product in were product Latin to at look the of America due maintenance decline to Americas. the products blocks within primarily the COVID-XX our our the of many region, to

model negatively America quarter, Latin a the third we in sales addition, were In shifted distribution direct because impacted to recently Mexico. in during

quarter net that a on of the This is We to $X.X compared which last sales third this third up the the given higher and million in in future sales successful news a While The over favorably were in up we XX% anticipate up quarter, the in periods, Mexico direct to impacted cleaning attributable customer little increase current States consider consolidated held good well, homecare X% the $XX.X of increased in States, reasonably products million. is United environment. region transition. this United initial win build sales our in in year. to base a by sales the to

for products consider a quarter, Despite mentioned seeing continue earlier, Garry as for products the significant become we're cash increase in the smaller we an are a meaningful as except contributions and these COVID-XX to business part the generally tied in of our demand continue flows brands over increased time. to cleaning of aspirations those the homecare that to products, pandemic. sales to As cleaning expected result of harvest and third generate growth our that

Americas primarily sales XX% pandemic. third in total, net driven Finally, the consolidated up our segment XX% our consolidated the million, decreased in of XX% net the decline In to quarter. maintenance impacts $X.X sales products, COVID-XX made in Canada to sales due negative by a of of

we While in COVID-XX, sales segment between been due long X%, to the X% anticipate to term, will over has this Americas short-term the on there a annually. impact segment grow

rates. third were constant to foreign the exchange a basis, down EMEA EMEA, in by million the compared EMEA’s decreased last quarter currency in sales to EMEA. from sales which to Europe, decreased year. results down year. XX% India, have East, in in on to XX% Now Africa On Middle negatively last impacted currency $XX.X $XX.X third the million, includes reported Net quarter, and would about

As you March the lockdown Sales and to both decreased COVID-XX of May, primarily of the of region throughout of during our XX% adopted our impacted a volumes to in lockdowns by products third markets know, countries EMEA, the and all by high Product promotional mortar nearly WD-XX due Multi-Use sales and of in sell in our ability in products, nearly as were therefore limited many Europe The and maintenance pandemic as WD-XX markets was through Multi-Use participate European negatively epicenter quarter. the the comprehensive certain direct result of such MD brick retailers’ activities many measures Product. as lower locations.

down up net third markets in of the sales in of sales markets of XX% year distributor in with Net accounted XX%. favorable consolidated sales marketing EMEA quarter. the experienced also region cleaning of UK. quarter digital products of These last the our sales sales Fresh which made fiscal by our significantly million for year. Carpet higher XXXX while in due lower In direct in to in Sales of Fresh declines sales EMEA homecare entirely were We XX% accounted EMEA impacts third our the last to EMEA compared decreased in associated brand. Carpet the lower the driven segment third of our $X.X XX% were total, to XXXX the quarter, and for

there a been COVID-XX, annually. anticipate to While the this we the will long between grow to X% sales over due on EMEA short-term has XX%, term, within segment impact segment

Asia-Pacific. from in on last the region. compared third China, for have currency year. in the basis, a and X% in sales other net Solvol $XX.X Asia-Pacific sales year. the to countries last the X% in had Changes sales pandemic. includes down a third in million an in and impact currency decreased Consolidated On products COVID-XX to of $X.X Australia, increased on net to Asia year, in our rates unfavorable Now region decreased Asia-Pacific, which up foreign down last quarter, exchange $XX.X XX% vac from quarter, only driven million were by the demand in no third In the cleaning Australia, constant would sales quarter, result million to as

Changes numbers had foreign country In WD-XX in currency what sales restrictions of government result of pandemic. less compared the required up remained related and pandemic respectively temporary in to an emerging the the many last as from period. This lockdowns in very we the experienced our many Product have WD-XX in compared Specialist On complete were authorities XX% markets year. severe exchange in impacts relatively due by down year. Latin local to low on Similar sales COVID-XX The would XX% to addition, Australia for In unfavorable closures, requirements. sales quarter, for is COVID-XX increased to primarily and America, to net $X.X in were countries decrease various pandemic. Asia the basis, Australia disruptions currency the in in period lockdown limited impact distributor adopted other market XX% million a we Multi-Use the markets, to sales experienced region. and last COVID-XX X% from constant COVID-XX rates case in since a

the is experienced since Our quarter, XX% we U.S. The or optimistic we Asia been quarter in China in sizable are dollars net in orders ship normal in COVID-XX the disruptions had our third sell due $X.X delayed more to to were about not good compared in region. very from impacted news that the significant stronger were where markets previously sales as finally million they We increased in remain products year. quarter currency China, had began resume some that Sales distributor second the COVID-XX. to long-term able to opportunities China. that last the operations. in we Also, we during to by

the a patterns Asia-Pacific lot building total, we of the expect our further industrial to COVID-XX, segment of varying and sales from along consolidated our third volatility of the the of Although possibility XX% net timing in In of disruption the economic programs, made activities. due distribution, promotional way up quarter. shifting

been XX%, to a to annually. segment anticipate short-term the the between has we will sales over this COVID-XX, While term, within grow Asia-Pacific long segment XX% on there impact due

forward, you given share we environment exceptionally Looking of year. regarding some external remainder are with experiencing, want fiscal the the volatile thoughts I the to

a our the large third shortfall revenue quarter, our segment. from During majority of came EMEA

that business our the EMEA a restrictions, countries We their have in are which as March rebound region most in pleased to been from particularly direct June, have saw very report in May. markets, implemented our strong through relaxed in

also year, from and in U.S., the million. to likely in fiscal suggest full We $XXX a conditions million the that Australia for solid $XXX range is be to of current June. revenue Canada performances consolidated saw market These

I'll call over Jay update on Now, the the for financials. an to turn

Jay Rembolt

with perspective, precedence an cash enviable that these uncertainty. hold flow, amount will rebound indicates recession balance Thank of continued strong good manageable us world factors economic filled a debt, thereafter. we numbers quickly and during and financial Steve. From can navigate you, We a believe historical sheet, up our believe position with we're a fairly in a a revenue very help

Higher XX% Let’s a and impacted business. points. of about margin to start warehousing margin by was model, to our freight the third use In XX.X% last This that represents XX/XX/XX the basis primarily business negatively in EMEA gross with the targets XX basis our compared our quarter, the inbound discussion we our XXX decline points. long-term year. guide gross

customers magnitude sales specialty these to sales. margin total of in incentives, basis points, in primarily we positively The cause And impact activities in Americas discounts promotions, XX our Petroleum-based by chemical and recorded Changes period are our gross points. to basis our XX cash unfavorable give our the can such as a reduction had margin margin gross activities, fluctuations basis of positively gross points. to and impacted margin promotional period-over-period. period. increased cost trade from major input the that to costs gross timing on impacted as XX an by addition, cost activities, of In promotional

negatively third combined, cost items well multiyear in expect oil quarter, prices will mix realized It of points, primarily and see continue. Americas aerosol in from XX increased impacted impacting and and continue cans of to to and XX incentives to our gains sales changes and In lower impacted these in margin costs. days see year, benefit sales we we foreign expect to margin. gross falling Beginning lows, would as exchange prices as oil late realize to EMEA, the in and this experienced segments. drop by rates XXX our were points the steep gross earlier of prices. basis the by the February, the some this positively trend When quarter. oil began be a gross third between we we However, price in margin the reached oil positively Asia-Pacific Also, net to currency margin basis some gross due lower to our we've takes crude before the XX petroleum-based begin benefit positive typically offset crude

cost doing was XX%, of XX% year. the address quarter, compared I'll business or our third business. approximately XX, In cost Now, last our to doing of the

promotion, our in from a we we areas, majority with call actions reported to in managed the a levels and our our immediate our doing of experienced spending make cost doing comes get as business cost our the incentives our make of products the other costs our in the know, because reduce our bonuses, advertising or and earned customers. business to financial of Despite also quarter, to freight, frugal conservative three people to of good investments stewards reduce cost revenue some costs sales, investments any what the This always marketing, within spending in we We've companies associated tribe. of includes been percentage you we business. the our As decline and resources, in we or commitments. third took

us our downturn, has to invest XXXX, us business tribes enabled our we support our In how pandemic to model required and took times. that uncertain the we these structure even intact. COVID-XX the during last keep allowed become adjust significant However, us prudent economic during more cost actions that to in

similar This our are brings on net sales in our We XX% wraps focused business last the last achieving of quarter, to XX/XX/XX the on EBITDA XXXX. up year. compared EBITDA, was is now to the discussion outcomes us that third And measures. flat which of for XX/XX/XX model.

intangible year, the Now, a benefit the outstanding decreased average income. year, million was expected million much discuss the in in from I'll XX.X% the last shares to for the a for ago. $X.XX $X.XX quarter, Net to a prior compared was and was $XX.X lower $XX.X income of items. year, same from XX.X foreign-derived income taxes the increase a few XX.X% provision of period The third resulted per decrease quarter other million third rate this versus million quarter shares a in due year. diluted tax of third reflecting diluted earnings in XX%. for common last shares to This Weighted the XX.X for to share year compared primarily

quarter and of accounts eye material and relatively remained accounts slightly paying our word do changes using trend keeping accrued constant close business. quarters. up receivable levels COVID-XX a define appropriate second We're and We due impacts of on attention inventories about the levels the not any pandemic. capital and next our working intentionally few inventory to particularly a do are payable as to business. XXXX, result only manage of capital the and close as receivable support a is slightly. may have believe we're to accounts environment, increased the to This capital we're profitable In accounts the working capital of inventory, has receivable working liabilities. over Now, expect making growth current less of the to capital allocation. working compared and We When changes

First, hand manufacturing have in we that this uncertain inventory ensure of we have on levels environment. adequate to

direct launched operations of requires new in we Mexico, market. that recently to and inventory we Second, keep this meet which the up requirements build

Smart Generation may of cause Straw be a launch the Finally, time. Next elevated inventories to for

the our growth to projects, use Our $XX we stock delivery On payable June our balance providing to shareholders return business invest approach returns being machinery April system. we investing our used comprehensive Smart approved plan, of we suspend and on our of which close to XXth. to a regular at elected XXXX, shareholders. Board allocation current strategy dividends. will repurchases approximately In share equipment is shareholders to to million capital cash and manufacture long-term in regular Generation record will prepare we $X.XX strong capital share, includes proprietary XXth, our on under per while Straw in buyback Though fiscal the majority Directors to to quarterly July of capital of through continue our dividend Next

the forecast it with our for to So, us that, guidance makes and into withdrew business, in results Company. for Due our the for April, XXXX to fiscal inject difficult let's a of the COVID-XX which financial turn issuing short-term of fiscal XXXX year. to to very events, not has be pandemic guidance measure accurately remainder any will guidance. financial continued we uncertainty for these

turn that I'll Now, it Garry. to completes financial overview. the back

Garry Ridge

primarily that distractions to not easily third call? in summary, due products, You due related you our buy did from end were Jay. what hear us the quarter declines heard to sales to on being In global Thanks, able COVID-XX. the this to users

a strategy. credit disruptions, of these despite Specialist quarter, heard the view third which remained sales as to a win we e-commerce in constant WD-XX and our You

quarter, in in primarily You the sales due WD-XX EMEA XX% were BIKE of heard third demand our to e-commerce. segment strong and that in up strong sales

our were and to for You homecare of demand sales heard the XX% products COVID-XX. that due products to cleaning strong up due cleaning

grown heard You continue area sales e-commerce, in the digital outstanding have our that to XX% and we progress make approximately of year-to-date. e-commerce and

on You heard arrived some that Generation store Canada. has Next Straw Smart in shelves

the WD-XX packaging on has the that heard arrived You refreshed in stores’ product some shelves line for U.S. Specialist

to quote that you you our us Luther be full confident to realistic revenue the our you open you of we run, $XXX from market moving return crawl, to King aspirations heard we'd remain Martin a be to In year $XXX then current keep call call walk; do, today, for is that can't that heard a joining And to consolidated You the dividends. fiscal opportunity. pleased Over “If growth I'd to future if that range we continue capital fly, regular through any suggest the And you million. share today, investors heard then in that like have conditions closing on you Thank remain million conference if to our then you operator. can't to run; to Jr. walk, whatever questions. you Dr. forward.” but can't likely

Operator

Davidson. Linda comes with Bolton question D.A. Weiser [Operator first Our Instructions] from

Linda Bolton Weiser

Hi. How are you?

Garry Ridge

Good, Linda.

Linda Bolton Weiser

That’s good.

for in guess that So, sales at what whether think math determine you to you the might something What for X% or I that quarter, you fourth commentary that? up thank main end for be if of come that the down as of factors higher on the X% being the lower end the year. like the that. see you my I do did right, implies, about

Garry Ridge

trade when thing down. to that's plays can't high and very last for of shut us end this where open, is in increased our product, point is States what going the I But, users sale of and clear view. is quarter we're DIY channels demand particularly really -- Steve ahead give product, the my will that given us In consumers shuts completely. our right aware not United thing amount in on or year. in his that can't earlier, buy down that's ask that one And get comments our of there that, are activity is I'll now. think, It's there Europe, the last of point to of then become

I to of So, next. going the is the think of unknown risk happen risk biggest factor what's

would Steve, what about you say So, that?

Steve Brass

Garry. true, very that's think I

which of has people significant certainly in So, world, across it's at uptick seen improved a Europe. certainly considerable as the a DIY and been activity, have kind around uptick U.S. stuck the in home

distribution e-commerce seen, and third think to closed quarter of to be that elsewhere. lockdown occurred. secondly, channels as been And out of businesses able slack fortunate that position have some in with boomed absolutely we're our our in has respond you've of to capability taken a e-commerce I position the -- some the conditions to those have down

Linda Bolton Weiser

launch can talk think for would Canada? mention what that in the And you and the first just And next then, new chose do why about product then, the next be market you U.S.? be, And maybe Canada you you of the can timing launch? the entry market might

Garry Ridge

Generation. Straw, reasons a with Canada the regulations. years would the a there system have that in ago Next the delivery meet with And and learned to number We was one to main Smart Straw we have of we chose of Smart discussion development through we because of that regulators lockable were behind Canada

And So, because yet. that before. first they Straw in Smart stages of we've there place need obviously early volumes are Canada given nowhere be was production, to near had the where we're not

has is is So, made systems. start. of but and Next two Straw delivery lockable. X.X, which Smart a delivery X.X, system, It's for call up has improvement then was place the Canada not what current an different Straw Smart which great we it of Generation the toolbox-friendly lockable

better at the us all. allow mean we'll year, So, the to at we will X.X happen with part have we capabilities lot a that of will Straw level certainly up of which quantities markets a have Smart now a happen convert next the to don't will of will start into mid -- as And manufacture to that to start bring production. product to push that markets conversion

X.X. by Linda, to till probably, going to be X So, and see a we X.X the year or it's original it's Smart program XX-month gone replaced Straw

Linda Bolton Weiser

I in of BIKE you -- production of you're you reduced areas like anything that the recessionary as -- doing type talk you can sort of any any industrial sort it stuff. of seeing of signs benefiting, outdoorsy you then, are Are or from mentioned your seeing And where markets? just stay-at-home, result a these type mean, if actually about or some weakness

Garry Ridge

Linda, through that going economic and we're sure age is not I how not ice would this dissect from back, that is who don't I who know, I'm right now. why. mean, I

seen said where that it's is to a read that difficult in what's sale. Now, is But And start moving very distribution very we is and point think in time, areas sale manufacturing for of I where. reliable What extremely get such which having -- China. there the point we return have positive artisans normally a got, people disruption know of would channels example, buy. for clear market trades to us in where at both the is this that we've and on that,

-- that And headline there out there So, just handy. may Steve, this, a study, if that activity. just great of to you might you’ve to want study great tells and around that you got was Steve, on the us in is DIY came Europe a mention week want that, touch that information last

Steve Brass

Yes. across key Europe study that across COVID-XX multiple countries, by It I a just was XX% Europe. showing seven during countries eight across believe, was around showed period DIY up lockdown the or activity

Linda Bolton Weiser

visibility now? be you. guidance? report very to then, enough finally, able quarter And sense think interesting. do that the that for FYXX any Thank That's a few you months, have Do have give you to you right fiscal when in you'll fourth

Garry Ridge

don't I know.

Linda Bolton Weiser

Okay.

Garry Ridge

starting we last if million But, $XXX in to be we've got things on are nearly if be flat It come think to and to we're that to able we some going may in where going flat year be we're we vaccine mean, a to. in are well, I nearly ways. with $XXX the I normalize, depends million, at world. --

X% a think, that's the through. given are off result, trauma businesses the And pretty between X%. be I think, good and going that we'll I

Linda Bolton Weiser

one of versus you direct sometimes And the is through are revenue just that remind disruptions markets what that us I It thought Thanks. just occur. distributor more the where these Can ones of. seems your percentage distributors?

Garry Ridge

think right, update, through direct and might have Steve? but you XX% I I Is that distributors. is think, is XX% the Steve,

Steve Brass

That's correct. Yes.

Linda Bolton Weiser

very appreciate Okay. I much. Thanks it.

Garry Ridge

Linda. safe Thanks, and Stay well.

Linda Bolton Weiser

Thanks.

Operator

of question Rizzo next with comes Our Jefferies. from Daniel line the

Daniel Rizzo

Hi, you How everyone. doing? are

Garry Ridge

Hi, Daniel.

Daniel Rizzo

Hi.

mentioned to too the -- opening shut is you distribution of guess, not. the outlook Asia for what’s You wondering signs made Latin Southeast your channel. the starting may if sales and show that dependent was be and I I markets or America you down emerging and are that other reopening upon

Garry Ridge

it Daniel, week week. varies to

global basis hit and Americas meets a varies -- weekly it very, like team on and currently And countries Europe on India must hardly have from Indonesia, our very leaders that we been hard Certainly, and week over to from say, the I have week. Pacific Our leadership Asia call. time.

moving which faster yet not. countries uncertain are or it's So,

up Victoria was well, in and Just even this week, in another flare Australia though very doing they Melbourne. had

this is where know. don't next? going Now, being We

Daniel Rizzo

-- doing the to because a rollout were generation you with then, you that, is I you of Okay. on introductions just if next Straw, the Smart have or raising know premium disclosed have -- And you if there not set price don't of that? prices

Garry Ridge

manufacturing be at which the stage, Certainly, The the to has X.X lockable accretive version, improvements, to it premium. premium. it's doesn't is X.X going one, a margin. But, of this because gross

Daniel Rizzo

finally, rate sales. less offshore, because the Okay. was of of why it that And less jumped then, tax sales reasons is foreign the mentioned one

to quarter going rate say rebounding, it mean, more for I that fourth and opening wondering with I possible more, up was the Now, forward back is EMEA from normalized again, that the there. a world will to go

Garry Ridge

question. answer Jay that let I'll

Jay Rembolt

like it whereby markets, and America, on rebound EMEA, it the other intangible in rebound the Latin of depends also well. Yes. for those in as we some in Certainly, but the on from sales Asia somewhat -- markets the rebound the depends benefit achieve into example

of that. key are So, America our Asian impactful are markets it's others. more Latin EMEA, and the some foreign than distributors to

Operator

Our of with Please question. next G.research. the question line proceed Rosemarie with comes your from Morbelli

Rosemarie Morbelli

you. Thank Good afternoon, everyone.

Garry Ridge

Rosemarie. Hi,

Rosemarie Morbelli

come that pursue normal, I on, have established well. to during you if see the are different different going be to in everyone was lockdown Glad so marketing and at the call is you which pandemic all. I may regions what as a out new into we normal the wondering new method this not

less in you are what the you operating in in many intend as a or change? fewer need the feel So, you -- any you will changes people which is don't could help that offices, could tribe operating, how to do for If facilities? give you way office the us way mean

Garry Ridge

Yes.

we what taking sure very had. time one of of this that really making that learnings we So, conscious are the things advantage are is of we

creativity So, is driven. being of work much great has interaction is at is remotely. made any that we decisions. social though people haven't happened our we a we number believe Already strongly important, virtual. better But, What become

over and will communication collaboration improve think our before. So, I overall

is it aware, no, end the user to and true, make to As far the buy. as concerned, market easy are we make sticking tried

the particularly continuing, world? on touch think, players it, playing the we into Steve Steve, distributed And area and the I do, time. how now mentioned e-commerce how development given want over to is that they've and way changed around is and might major e-commerce the the one you what e-commerce that's was around of really

Steve Brass

Garry. you. Sure, Thank

reallocating I we absolutely resources. are mean, yes, So,

distribution the has happening for complete that's money, number centers just terms of about for our around there And online the alone, U.S. I there the centers of And product. reasons. our the over today, retailer. are mean, hogwash out in out the U.S. suitable product owing of e-commerce transportation been the certain ability transport the growth news there in due there in being world. is the the XXX distribution is network major So, e-commerce not to

very, So, reallocating around world. very it's not positive and the growth. we're barrier And where resources our results [indiscernible] a that's to with just

Rosemarie Morbelli

obviously So, I on strong -- heard mean, What if what North Europe America properly. you though? I based about are in

Garry Ridge

in E-commerce Europe?

Rosemarie Morbelli

in yes. E-commerce Europe,

Steve Brass

Yes.

the considerable strength In we in world. multiple and across terms largest the strength. is in same of also region the we countries, e-commerce, global have marketplaces, mean, I look, a And the America, also North in have market a strong EMEA the China players, e-commerce with the

strong We have very also. capability there a e-commerce

Rosemarie Morbelli

CapEx away And e-commerce if adding project of taking are? of $XX and you how much million you another the this are year, to for from the area,

Garry Ridge

the really in It's and what going brought capital we Straw might is are the to is But in Next capital Generation. squad really Steve, intensive. around digital not e-commerce mention year primarily brought of the our Smart intensive. bringing some done you talent. is That way world. we brought about very want global together we the advisor toward people some this And big e-commerce that we have So,

Steve Brass

Garry. Thanks, Sure.

yes. So,

our the put ago, player, out global to across global in we great And make e-commerce so of wonderful the progress doing what our terms the world one EMEA we're head up the or do taking squad. and just to USA of talented So, upcoming them results the spreading a to business. able us. leaders global best with couple China of e-commerce of for our years individual really, or They've achieved learnings on

been came big major a long-term added We strategy. from advising the our who Chief business, a of that's and digital recently terms in So, strength. and in a consultancy is Digital Advisor Garry myself

only not we great e-commerce. support So, in progress, e-commerce are making in but digital that the strategies

Our roof. certainly just conversion internet world. traffic leading pandemic to the that's through the gone And this in during has sales around

Garry Ridge

with very over up Steve, our one performed the in Correct? year-to-date markets sales e-commerce that's Italy. I but competitive are last well Italy. made the against progress is of landscape think And Italian year, we've significant

Steve Brass

more. one That many example is correct. just and are there It's

performance, The for very yes, very, the So, growth very in market and like is U.S. growing we're Italy. strongly. e-commerce very very, places many us large a strong U.S. obviously, market achieving

taking some situation. share very very really So, this in nice fast-growing

Rosemarie Morbelli

All help. I much. right. you very the appreciate Thank

Garry Ridge

Thank you.

Operator

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

WD-40 (WDFC) 9 Jul 202020 Q3 Earnings call transcript