Ladies and gentlemen, thank you for standing by. Good day and welcome to the WD-40 Company Third Quarter Fiscal Year 2015 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 your host for today’s call, Ms. Wendy Kelley, Director of Investor Relations and Corporate Communications. Please proceed.

Thank you. Good afternoon and thanks to everyone for joining us today. On our call today are WD-40 Company’s President and Chief Executive Officer, Garry Ridge; and Vice President and Chief Financial Officer, Jay Rembolt. Following their prepared remarks, the operator will come back on the line for the Q&A portion of the call. Before we get started, let me remind you that supporting materials for this call are available on our Investor Relations website at investor.wd40company.com. In addition to our traditional disclosures, the Company has published the supplemental slides, which can be downloaded from this website. We encourage investors to review these slides in conjunction with today’s prepared remarks. A replay and transcript of today’s webcast will also be made available at that location shortly after this call. As a reminder, today’s call includes forward-looking statements about our expectations for the Company’s future performance. Of course, actual results could differ materially. The Company’s expectations, beliefs and projections are expressed in good faith but there can be no assurance that they will be achieved or accomplished. Please refer to the Risk Factors detailed in our SEC filings for further discussion. Finally, for anyone listening to a taped or webcast replay or reviewing a written transcript of this call, please note that all information presented is current only as of today’s date, July 8, 2015. The Company disclaims any duty or obligation to update any forward-looking information whether as a result of new information, future events or otherwise. With that, I’d now like to turn the call over to Garry.

Thanks, Wendy. Good day and thanks for joining us for today’s conference call. I am pleased with the performance of our global business; yet foreign currency exchange headwinds are distorting our reported results. Hopefully, today we will throw some color on what that is. Today, you will hear that we reported net income of $11 million and diluted earnings per share of $0.75 for the third quarter. Year-to-date net income was $33.1 million and diluted earnings per share were $2.24. You will hear that we reported net sales of $92.5 million for the third quarter which is a 3% decline from the third quarter of last fiscal year. Year-to-date net sales were $286.2 million which is a slight increase year-over-year. You will hear that the Americas performed very well in the third quarter with a 10% increase in net sales. You will hear that Asia-Pacific is on track for a great year despite a product quality challenge we encountered during the quarter. You will hear that EMEA’s base business is strong, but reported sales continue to be impacted by significant currency headwinds and political and economic instability in Eastern Europe. You will hear that the WD-40 Specialist product line continues to perform well with global growth rate of 26% in the third quarter and you will hear that later this month we are launching a new delivery system for the WD-40 Multi-Use Product in the USA. In the third quarter nearly 40% of our revenues were generated in currencies other than the U.S. dollar, which means we are experiencing significant foreign currency headwinds particularly in EMEA. However, if you peel back the onion, our underlying business is performing well and in local currencies, seeing growth in all but a fuel-bound markets globally. While foreign currency exchange rates may have skewered…

Thank you, Garry. In addition to the information that we are presenting on this call today, we suggest that you review our Form 10-Q for our quarter which we will file tomorrow. Let’s first review our 50/30/20 rule, as you may recall those are the measures we used to guide our business. The 50 represents our gross margin which we target to be above 50% of net sales. The 30 represents our cost of doing business, which is our total operating expenses, excluding depreciation and amortization. Our target is to be at or below 30% of net sales. Finally, the 20 represents EBITDA. If our gross margin is that above the 50% and our cost of doing business is 30% or less. Our EBITDA will be above our 20% target. EBITDA is earnings before interest, taxes, depreciation, and amortization. The descriptions and reconciliations of these non-GAAP measures are available in our 10-Q, and in our investor presentation, which is available on our Investor Relations website. Now, we’ll look at our gross margin the 50 in our 50/30/20 rule. Gross margin in the third quarter was 53.3%, compared to the 51.4% in the prior fiscal year period. The increase in gross margin was primarily driven by decreased input costs in all three trading blocks. These favorable impacts were partially offset by the unfavorable impacts from foreign exchange rates in EMEA and increased discount and other allowances primarily within our Americas and Asia-Pacific trading blocks. Our cost of products sold a look at – closer look at input costs. We experienced a net favorable impact of 260 basis points from our major input costs. This was driven primarily by changes in the cost of petroleum-based specialty chemicals and to a lesser extent aerosol cans. As we’ve shared with you in the past…

Thanks Jay. Now, let’s take a look at our view for the remainder of the fiscal 2015. We’ve updated our full-year 2015 guidance. It reflects the impact of foreign currency exchange movements as well as the macroeconomic and political challenges in our European markets particularly in Russia and Ukraine as well as the quality issues identified in Asia-Pacific. This guidance does not include any future acquisitions or divestiture activities and is based on recent foreign currency exchange rates. We expect our fiscal year net sales results to be in the range of $383 million to $390 million which will mean either flat or a growth up to 2%. We project gross margin to be better than 52%. We expect that global advertising and promotional investment to be in the range of 6% and 7% in net sales. We expect net income of between $44.5 million and $45.4 million which would achieve EPS of between $3.03 and $3.09 assuming 40.7 million weighted average shares outstanding. So in summary and closing business continues to perform well. Foreign currency exchange headwinds will continue to impact our reported results, but we believe it remain focused on our long-term goals we will navigate this environment just as we’ve gone the past. In summary what did you hear from us on this goal? You heard that the Americas performed very well in the third quarter with 10% growth rate overall in revenue. You heard that Asia-Pacific is on track for a great year despite minor hiccup in the quarter there are up 9% year-to-date. You heard that EMEA’s base business is strong, but the reported sales continue to be impacted by significant currency headwinds and political and economic instability in Eastern Europe. You heard that the WD-40 specialist product line continues to perform well with the global growth rate of 26% in the third quarter. You heard that crude oil costs going down continues to be a tailwind and we have seen the positive impact of lower input cost in our gross margin. You heard that later this month we’ll be launching our new delivery system for WD-40 Multi-Use product and that is design to make the hard to reach, easy to reach. You heard that we continue to return capital to our stockholders and that we’ve begun executing repurchase under our new $75 million plan during the third quarter and you heard that we amended our line of credit agreement which extended the maturity date of our revolving credit facility to 2020 increasing the line of $150 million and revised financial covenants. So in closing, I’d like to share a quote with you with you from Mike Casca. To be successful, you must accept full challenges that come your way. You can’t just accept the ones you like. Thank you for the call - joining us on the call today and we will be happy to take any questions.

[Operator Instructions] Our first question comes from the line of Linda Bolton Weiser with B. Riley & Company.

Hi, guys, how are you doing?

Good. How are you?

Hi, Linda.

Good. Hi. So first of I guess just a question on Eastern Europe and the weakness you are seeing there now. Did I understand you correctly but you said the only posted some sales in Russia in the last month of the quarter and yes so last quarter I think that the distributor markets in EMEA were up 9%. So I’m kind of wondering how did this weakness kind of it caught you by surprise or it took time to settle into the market or I’m just wondering how embedded this weakness is being that it was still pretty strong last quarter and also can you quantify it like is Russia and Ukraine what percentage of the EMEA distributor markets with that be roughly.

Okay, firstly we’ve been seeing the activity in Russia and Ukraine I think we mentioned in a couple of times what we soul was a period of time where inventory in the market as being absorbed. So we think that right now we’re starting to see inventory coming back into the market from us. We do about 10 million cans a year in Russia. So I guess that's about a $10 million business plus or minus that's real rough. So that's about the extent of it. The Ukraine is a lot less. The rest of the distributor markets in Europe are still performing well. In fact you're right they grew last quarter and excluding the Ukraine and Russian business they grew in the third quarter of this year. So it's really isolated around the Russian economy inflation there went through the roof and took some time for it to settle. We believe it will settle down and we’ll see aspect of some type of normalized business in the next couple of quarters, it’s just a hiccup. And I am not sure when it took us for a surprise. I think it’s just was something that we didn't understand the extent of the timing of it and we’re back on track again I think as long as Russia continues to improve.

I mean did you take any price increases there in Russia that maybe is making this be a temporary situation and then when the pricing pieces settle in the growth will return?

No. We didn't. The ruble deteriorated against the dollar, so we sell into Russia in U.S. dollars. So our marketing distributors there did take some pricing. We also help support that with some promotional activities of free goods to sort of minimize that, but – yes the price has increased, but it's truly because of the ruble.

Okay. Thanks. And then just kind of seeing what’s happening in China I think people are bracing themselves for slower overall economic growth in China. Is that something that you're seeing at all or do you suspect that could happen there as well?

.:

Okay. And then your new product here, that's going to be launched here, did you ship any of that at all in the third fiscal quarter or will the shipments begin in the next quarter in the fourth quarter?

They're all in this quarter. There was none in Q3. They started shipping this week. That's why you couldn't find them in the stores.

Okay. And then I mean it looks I haven't looked at all the pictures here, but the [bending neck] looks interesting, but it looks actually bigger than the straw application. So is it for a different type of application and I assume this would be purchased by the user in addition to the straw type application? Is that true?

Yes. Basically the extended tube on this is about eight inches in length. And it's completely flexible. So what it's meant to do is enable the delivery of our product to places that are very hard to get at with a normal can. Firstly, without a straw it's impossible to get there. And with our Smart Straw it can get there, but our heavy end-users particularly in automotive, industrial one of the big feedback points we got from our research over the past couple of years was we'd love to be able to deliver the product to these hard to get places easier. So it's a bigger can. It's designed to appeal to our heavy end-users. And we believe that it will be in a can that they will have on the shelf as well as the other. It has a higher price obviously because that delivery system costs more. There's been a lot of innovation, a lot of work going into it. We have a patent on it. So we're excited to take it to the end-users and you should see displays initially in-store within the next week or so. The first stores will be Home Depot and then other retailers will follow soon after or other supply chains will follow soon after.

And how fast do you think you can ramp up the distribution reach of it in the U.S.? Do you think you'll get 80% there by the end of next fiscal year or even quicker?

I don't know. I think one of the things that we're working on now is demand. One of the key components of this is actually manually assembled right now. Our supply partners are in the late stage of putting in automated assembly equipment. So that's a bit of a pacing item. So I'd say by the end of this year we will have distribution in four or five of our major supply channels. And then we'll see where we go from there. So it will take time. And then of course after that, the world is to come. You know how we do things, Linda. We're deliberate and we're not here as a bottle rocket. We're here to grow our revenue with our end-users over time. So it will be interesting to see and we're excited to see how it moves off the shelf when it hits in a very attractive display configuration in the next couple of weeks.

Great. And then can I just ask you in terms of the VOC implementation, is there any way to quantify how much in those costs will be shifted to FY 2016, is that a $1 million or couple million or any quantification?

We haven’t shared that yet.

Okay. And then just finally, the quality issue here that you have with the one SKU in Asia, I know these things happen in everything, but a kind of you have something in Canada that happened I think about a year ago as well.

Totally unrelated.

Right, but I’m wondering if you – if there needs to be some improvement or modification of your monitoring of the outsourced suppliers when they are manufacturing the components and the product?

Thank you for the question, it was impossible to do that. These products – the product that we manufactured past all of our quality control stringent testing as it left. And the issue was not apparent until about three weeks after the product shift, because it took that long for the extender to actually disengage from the under of the valve. So it was quite – it was really intriguing for us, but we’re fortunate enough that this happened while product was on both shipping across the Pacific Ocean and when we then tested it on arrival which we do, at our distributors, we identified the problem so we don’t know how we would have identified this problem other than the way we did and I'm extremely proud of our quality people and the way that we’re able to actually catch this before it even got into the market. It only got to the actual distributor warehouses, so they did a great job.

Okay, so there are no end user ended up with this problem in their hands?

Correct.

Okay, great. Okay, I guess that’s pretty much it for me. Thank you very much.

Thanks Linda. End of Q&A

Ladies and gentlemen with no further questions in the queue. That will conclude today’s conference. We thank you for your participation on today’s conference call and ask that you please disconnect your lines.