<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
20549
-----------------------------------
FORM 8-K/A
AMENDMENT TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): April 30, 1999
WD-40 COMPANY
(Exact Name of Registrant as specified in its charter)
California 0-6936-3 95-1797918
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
1061 Cudahy Place, San Diego, California 92110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 275-1400
No Changes to name or address.
(Former name or former address, if changed since last report)
<PAGE>
AMENDMENT TO CURRENT REPORT
The registrant's Current Report on Form 8-K, filed on May 14, 1999 to report
on the registrant's acquisition on April 30, 1999 of the Lava brand
heavy-duty hand cleaner product line from Block Drug Company, Inc., is
amended to provide financial statements and pro forma financial information
required by Item 7 of the report. There are no other changes to the report
as filed.
ITEM 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Report of Independent Accountants
Statement of Assets as of March 31, 1999
Statement of Revenues and Direct Operating Expenses for the year ended
March 31, 1999
Notes to Statement of Assets and Statement of Revenues and Direct Operating
Expenses
(b) Pro forma financial information.
Introduction to Pro Forma Financial Statements
Pro Forma Combined Statement of Income (Unaudited) for the year ended
August 31, 1998
Pro Forma Combined Statement of Income (Unaudited) for the nine months
ended May 31, 1999
(c) Exhibits.
None.
<PAGE>
SIGNATURES:
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
WD-40 Company
(Registrant)
Date: July 13, 1999 /s/ Thomas J. Tranchina
-------------------------
Thomas J. Tranchina
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
To the Board of Directors and Shareholders of
WD-40 Company
We have audited the accompanying statement of assets as of March 31, 1999 and
the related statement of revenues and direct operating expenses of the Lava
business (the "statements") of Block Drug Company (the "Company") for the year
ended March 31, 1999. These statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and the statement of revenues
and direct operating expenses are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in these statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of these statements. We believe that our
audit provides a reasonable basis for our opinion.
The accompanying statements reflect the assets and the revenues and direct
operating expenses attributable to the Lava business of the Company as described
in Note 3 and are not intended to be a complete presentation of the assets or
revenues and expenses of Lava.
In our opinion, the statement of assets and statement of revenues and direct
operating expenses present fairly, in all material respects, the assets as
described in Note 3 as of March 31, 1999 and the revenues and direct operating
expenses as described in Note 3 for the year ended March 31, 1999 of Lava in
conformity with generally accepted accounting principles.
PricewaterhouseCoopers LLP
San Diego, California
June 18, 1999
<PAGE>
LAVA
STATEMENT OF ASSETS
MARCH 31, 1999
<TABLE>
<S> <C>
Inventory $ 3,903,000
Intangible assets, net of accumulated
amortization of $1,448,000 17,796,000
---------------
Total Assets $ 21,699,000
---------------
---------------
</TABLE>
(See accompanying notes to these statements)
<PAGE>
LAVA
STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<S> <C>
Net sales $ 9,159,000
Cost of product sold 3,540,000
----------------
Gross profit 5,619,000
Operating expenses:
Selling, general & administrative,
and amortization expense 2,828,000
Advertising & sales promotion 4,305,000
Research & development 517,000
----------------
Deficiency of revenues over
direct operating expenses $ (2,031,000)
----------------
----------------
</TABLE>
(See accompanying notes to these statements)
<PAGE>
LAVA
NOTES TO STATEMENT OF ASSETS AND
STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
1. Asset Purchase Agreement
Lava (the "Business") is a heavy duty hand cleaner product line manufactured,
sold and distributed by Block Drug Company, Inc. ("Block"). Effective April
30, 1999, Block sold Lava to WD-40 Company under an asset purchase agreement.
The assets included all of the worldwide Lava brand trademarks and other
intangible assets associated with the Lava product line. The acquisition of
assets also included inventory on hand.
2. Summary of Significant Accounting Policies
Inventory - Inventories are stated at the lower of cost or market.
Intangibles - Intangibles primarily include trademarks, customer lists and
goodwill. Intangibles are stated at Block's historical cost and are amortized
using the straight-line method over useful lives of 40 years.
3. Basis of Presentation
The accompanying statement of assets and statement of revenues and direct
operating expenses have been prepared in accordance with generally accepted
accounting principles and were derived from the historical accounting records
of Block. Complete financial statements were not prepared as Block did not
maintain Lava as a separate business unit and has not segregated indirect
operating cost information or related assets and liabilities (other than
inventory and intangible assets) for this product line in its accounting
records. It is not practical to attempt to reconstruct and separate the
indirect operating costs and other related assets and liabilities applicable
to this product line.
The statement of assets includes the assets of Block which are directly
related to the Business and which have been historically segregated by Block
in its accounting records. This statement does not include cash, accounts
receivable, prepaid or other assets, accounts payable, accrued expenses,
borrowings or any other assets or liabilities.
The statement of revenues and direct operating expenses includes the revenues
and expenses directly related to the manufacture, sale and distribution of
the product line comprising the Business sold, and also includes an
allocation of certain expenses directly attributable to the manufacture,
sales and distribution of the product line comprising the Business sold which
have been historically segregated by Block in its accounting records. This
statement does not include interest expense, income taxes or any other
indirect expenses.
Block management believes that the expense allocations are reasonable for the
purposes of these financial statements; however, there can be no assurances
that such allocations will be indicative of future results of operations by
WD-40 Company.
<PAGE>
WD-40 COMPANY
INTRODUCTION TO PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements give effect
to the acquisition by WD-40 Company (the "Company") of the assets of Lava in a
transaction accounted for as a purchase. The unaudited pro forma combined
statements of income for the year ended August 31, 1998 and the nine months
ended May 31, 1999, are based upon the individual statements of income of
WD-40 Company for the year ended August 31, 1998 and the nine months ended
May 31, 1999, as appearing in the Company's Form 10-K filed for the year
ended August 31, 1998 and the Company's Form 10-Q filed for the nine months
ended May 31, 1999, respectively, combined with the individual statements of
income of Lava, prepared from its accounting records for the comparable
periods then ended. The unaudited pro forma combined statement of income for
the year ended August 31, 1998 and the nine month period ended May 31, 1999
combine the results of operations of WD-40 Company and Lava (acquired by
WD-40 Company on April 30, 1999) as if the acquisition had occurred on
September 1, 1997. These unaudited pro forma combined financial statements
should be read in conjunction with the historical financial statements and
notes thereto of WD-40 Company as appearing in the Company's Form 10-K filed
for the year ended August 31, 1998 and the Company's Form 10-Q filed for the
nine months ended May 31, 1999.
<PAGE>
WD-40 COMPANY
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31, 1998
--------------------------------------------------------------------------------
WD-40 PRO FORMA
COMPANY LAVA ADJUSTMENTS COMBINED
---------------- ---------------- ---------------- -------------------
<S> <C> <C> <C> <C>
Net sales $ 144,397,000 $ 9,763,000 $ 154,160,000
Cost of product sold 62,984,000 4,260,000 67,244,000
---------------- ---------------- -------------------
Gross profit 81,413,000 5,503,000 86,916,000
Operating expenses:
Selling, general & administrative, -
and amortization expense 32,442,000 2,963,000 $ 841,000 a) 36,246,000
Advertising & sales promotion 14,811,000 5,059,000 19,870,000
Research & development 440,000 440,000
---------------- ---------------- -------------------
Income from operations 34,160,000 $ (2,959,000) 30,360,000
Other income (expense) 96,000 (1,397,000) b) (1,301,000)
---------------- ---------------- -------------------
Income before income taxes 34,256,000 (2,959,000) 29,059,000
Provision for income taxes 12,368,000 (1,871,000) c) 10,497,000
---------------- ---------------- -------------------
Net Income $ 21,888,000 $ (2,959,000) $ 18,562,000
---------------- ---------------- -------------------
---------------- ---------------- -------------------
Basic earnings per share $ 1.40 N/A $ 1.19
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---------------- ---------------- -------------------
Diluted earnings per share $ 1.40 N/A $ 1.19
---------------- ---------------- -------------------
---------------- ---------------- -------------------
Basic common equivalent shares 15,604,160 N/A 15,604,160
---------------- ---------------- -------------------
---------------- ---------------- -------------------
Diluted common equivalent shares 15,664,119 N/A 15,664,119
---------------- ---------------- -------------------
---------------- ---------------- -------------------
</TABLE>
a) Recognition of additional amortization related to the acquired intangible
assets using a 15 year life. The purchase price of $23,283,000 was allocated to
intangibles and inventory in the amount of $19,830,000 and $3,453,000,
respectively. The amount allocated to inventory approximated market value at the
time of acquisition.
b) Recognition of additional interest expense, net related to the funds
utilized to finance the acquisition. These funds include $16,000,000 of debt
financing and $7,283,000 cash from the liquidation of short-term investments.
The debt consists primarily of long-term borrowing at the bank's LIBOR rate
plus 1.5% (currently 6.56%), maturing in April 2009. The effect on net income
of a 1/8% variance in interest rate would be $20,000.
c) Recognition of the federal and state income taxes at an effective rate of
36%.
d) The following represents the periods used in preparation of the pro forma
information for Lava for the period ending 8/31/98:
<TABLE>
<CAPTION>
For the year 5 month 5 months
ended ended ended
3/31/98 8/31/97 8/31/98
----------------- ----------------- -------------------
<S> <C> <C> <C>
Revenues $ 10,467 $ 4,881 $ 4,177
Net Income $ (1,921) $ (992) $ (2,030)
</TABLE>
<PAGE>
WD-40 COMPANY
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED MAY 31, 1999
---------------------------------------------------------------------------------
WD-40 PRO FORMA
COMPANY LAVA ADJUSTMENTS COMBINED
---------------- ---------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Net sales $ 104,795,000 $ 6,352,000 $ 111,147,000
Cost of product sold 46,171,000 2,296,000 48,467,000
---------------- ---------------- -------------------
Gross profit 58,624,000 4,056,000 62,680,000
Operating expenses:
Selling, general & administrative, -
and amortization expense 24,229,000 1,554,000 25,783,000
Advertising & sales promotion 9,872,000 2,723,000 12,595,000
Amortization 917,000 361,000 $ 632,000 a) 1,910,000
Research & development 464,000 464,000
---------------- ---------------- -------------------
Income from operations 23,606,000 (1,046,000) 21,928,000
Other income (expense)
Interest Income (expense) net 233,000 (1,049,000) b) (816,000)
Other Income (expense) net (33,000) (33,000)
---------------- ---------------- -------------------
Income before income taxes 23,806,000 (1,046,000) 21,079,000
Provision for income taxes 8,689,000 (995,000) c) 7,694,000
---------------- ---------------- -------------------
Net Income $ 15,117,000 $ (1,046,000) $ 13,385,000
---------------- ---------------- -------------------
---------------- ---------------- -------------------
Basic earnings per share $ 0.97 N/A $ 0.86
---------------- ---------------- -------------------
---------------- ---------------- -------------------
Diluted earnings per share $ 0.97 N/A $ 0.86
---------------- ---------------- -------------------
---------------- ---------------- -------------------
Basic common equivalent shares 15,598,009 N/A 15,598,009
---------------- ---------------- -------------------
---------------- ---------------- -------------------
Diluted common equivalent shares 15,652,130 N/A 15,652,130
---------------- ---------------- -------------------
---------------- ---------------- -------------------
</TABLE>
a) Recognition of additional amortization related to the acquired intangible
assets using a 15 year life. The purchase price of $23,283,000 was allocated to
intangibles and inventory in the amount of $19,830,000 and $3,453,000,
respectively. The amount allocated to inventory approximated market value at the
time of acquisition.
b) Recognition of additional interest expense, net related to the funds
utilized to finance the acquisition. These funds include $16,000,000 of debt
financing and $7,283,000 cash from the liquidation of short-term investments.
The debt consists primarily of long-term borrowing at the bank's LIBOR rate
plus 1.5% (currently 6.56%), maturing in April 2009. The effect on net income
of a 1/8% variance in interest rate would be $15,000.
c) Recognition of the federal and state income taxes at an effective rate of
36.5%.
d) The following represents the periods used in preparation of the pro forma
information for Lava for the period ending 5/31/99:
<TABLE>
<CAPTION>
For the year 5 months 2 months
ended ended ended
3/31/99 8/31/98 5/31/99
----------------- ----------------- -------------------
<S> <C> <C> <C>
Revenues $ 9,159 $ 4,177 $ 1,370
Net Income $ (2,031) $ (2,030) $ (1,045)
</TABLE>
