October 23, 2019
Volume 3 Issue 4
Results Down for HCC, WD-40
Heritage-Crystal Clean’s oil business segment reported a small decline in revenues for its third quarter, and WD-40 posted steep declines in net income for the fourth quarter of its fiscal year, compared to results a year earlier.
Heritage-Crystal Clean’s oil business segment – which includes used oil collection activities, sales of recycled fuel oil and rerefining activities – posted revenues of $35.8 million for its third quarter ending Sept. 7, down 1.4 percent from the year-earlier period. The Elgin, Illinois-based company attributed the decline mainly to a decrease in its selling price for base oil, partially offset by an increase in the volume of base oil gallons sold.
The segment’s operating margin fell to 10.5 percent in the third quarter, compared to 12 percent in the year-earlier period. The lower operating margin was mainly due to a decrease in the spread between HCC’s selling price for base oil and its feedstock costs, the company stated in its earnings news release.
“We are pleased with the results in the oil business segment given that base oil conditions during the third quarter were worse relative to last year,” Brian Recatto, HCC president and CEO, said in the news release.
San Diego-based WD-40 reported net income of $8.6 million for its fiscal quarter ending Aug. 31, a steep 60 percent decline from $21.6 million in the same period last year.
Net income for fiscal year 2019 reached $55.9 million, down 14 percent.
Diluted earnings per share declined to 63 cents in the quarter, down 59 percent from $1.54 per share. “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,” WD-40 Chief Financial Officer Jay Rembolt said in the company’s earnings news release. “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 is a one-time charge, and the high tax rate we recorded is not expected to carry into fiscal year 2020.”
Net sales for the quarter reached $106.7 million, up 4 percent from the year-earlier period. Net sales for fiscal year 2019 totaled $423.4 million, also up 4 percent.
Net sales for the quarter in the Americas were up 1 percent at $49.3 million, up from $48.7 million in the same quarter last year. For the fiscal year, net sales in the region reached almost $194 million, up 1 percent from $192.9 million. The company attributed the increase to higher sales of maintenance products in the United States and Canada, partially offset by lower sales of such products in Latin America.
Net sales in Europe, the Middle East and Africa slipped to $36.4 million for the quarter, down less than 1 percent from the year-earlier period. For the fiscal year, net sales in Europe, the Middle East and Africa reached $160.6 million, up 6 percent. The company attributed the decline to the impact of changes in foreign currency exchange rates.
In Asia-Pacific, net sales for the quarter jumped 22 percent to $21.1 million. The region’s net sales for fiscal year 2018 reached $68.8 million, up 6 percent from $64.8 million. The company attributed the improved net sales primarily to a 28 percent increase in sales in the Asia distributor markets and a 22 percent increase in sales in China. Successful promotional programs as well as the timing of customer orders in certain countries helped drive the improvement in net sales in Asia distributor markets. The timing of promotional activities as well as continued growth within the e-commerce channel helped drive the increased sales in China, the company said.