WD-40 Company (WDFC) has reported a 9.58 percent fall in profit for the quarter ended Feb. 28, 2017. The company has earned $12.36 million, or $0.87 a share in the quarter, compared with $13.67 million, or $0.94 a share for the same period last year.

Revenue during the quarter went up marginally by 2.08 percent to $96.52 million from $94.55 million in the previous year period. Gross margin for the quarter expanded 105 basis points over the previous year period to 56.43 percent. Total expenses were 80.46 percent of quarterly revenues, down from 81.06 percent for the same period last year. This has led to an improvement of 60 basis points in operating margin to 19.54 percent.

Operating income for the quarter was $18.86 million, compared with $17.91 million in the previous year period.

"Fluctuating foreign currency exchange rates continue to obscure the true strength of our business and they negatively impacted both our top-line and bottom line results in the second quarter," said Garry Ridge, WD-40 Company's president and chief executive officer. "Even with the impacts of foreign currency headwinds included, we had 4 percent growth in sales of our maintenance products, which continue to be our core strategic focus, and a 5 percent increase in operating income. Our net income was negatively impacted as a result of fluctuations in some non-operating currency related items period over period, as well as an adjustment that we recorded to our income tax expense in the second quarter of this year. As we look to the remainder of fiscal year 2017, we've updated our fiscal year guidance and we remain confident in our strategy and are staying the course."

For financial year 2017, WD-40 Company forecasts revenue to be in the range of $390 million to $395 million. The company projects net income to be in the range of $51.30 million to $52.30 million. It expects diluted earnings per share to be in the range of $3.64 to $3.71.

The company has spent $25.32 million cash to meet investing activities during the first six months as against cash outgo of $9.61 million in the last year period. It has incurred net capital expenditure of $12.62 million on net basis during the first six months, up 511.97 percent or $10.56 million from year ago period.

The company has spent $4.15 million cash to carry out financing activities during the first six months as against cash outgo of $9.92 million in the last year period.

Cash and cash equivalents stood at $33.57 million as on Feb. 28, 2017, down 20.65 percent or $8.74 million from $42.31 million on Feb. 29, 2016.

Working capital declines

WD-40 Company has witnessed a decline in the working capital over the last year. It stood at $144.96 million as at Feb. 28, 2017, down 9.72 percent or $15.61 million from $160.57 million on Feb. 29, 2016. Current ratio was at 3.18 as on Feb. 28, 2017, down from 3.98 on Feb. 29, 2016.

Cash conversion cycle (CCC) has decreased to 53 days for the quarter from 98 days for the last year period. Days sales outstanding went down to 58 days for the quarter compared with 62 days for the same period last year.

Days inventory outstanding has decreased to 41 days for the quarter compared with 77 days for the previous year period. At the same time, days payable outstanding went up to 45 days for the quarter from 41 for the same period last year.