Good day, and welcome to the WD-40 Company second quarter 2014 earnings release conference call. Today's call is being recorded. At this time, I would like to turn the call over to the President and Chief Executive Officer, Mr. Garry Ridge. You may begin, sir.

Good day. Before we start, I would like to remind you that except for historical information this conference call may contain forward-looking statements concerning WD-40's outlook for sales, earnings, dividends and other financial results. These statements are based on an assessment of a variety of factors, contingencies and uncertainties considered relevant by WD-40 Company. Forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements, including the impact of commodity prices, the introduction of new product lines and the fluctuating global conditions, including currency exchange rates, both in the United States and internationally. The company's expectations, beliefs and projections are expressed in good faith and are believed by the company to have a reasonable basis, but there can be no assurance that the company's expectations, beliefs or projections will be achieved or accomplished. The risks and uncertainties are detailed from time to time in reports filed by the WD-40 Company with the SEC, including forms 8-K, 10-Q and 10-K, and you are urged to carefully review these and other documents and to look for updated company information on our Investor Relations website at www.wd40company.com. A reminder that our Q3 earnings conference call will be on July 9 Thanks for joining us for the call today. Today we reported net sales of $94.2 million for the second quarter of fiscal year 2014, an increase of 9% over Q2 last year. Year-to-date net sales were $189.7 million, an increase of 4% over the prior year period. Net income for the second quarter was $10.3 million compared to $10.5 million in Q2 last fiscal year. Diluted earnings per share for the second quarter was $0.67 compared to $0.66 for the same period last fiscal year. Year-to-date net income was $21.8 million, an increase of 2% over…

Garry, thank you so much. Just a reminder, in addition to the information that we will provide on this call today, we suggest that you review our Form 10-Q which we will file tomorrow. Now let's first review our 50/30/20 rule, the measures that we use to guide our business. As you may recall, the 50 represents gross margin, which we target to be at or 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 30% or less. And then finally, the 20 represents EBITDA. If our gross margin is at or above 50% and our cost of business is 30% or less, our EBITDA will be at or above the 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 presentations. Now a look at gross margin or the 50. Gross margin in the second quarter was 51.6% compared to 50.9% in the prior fiscal year period. The increase of 70 basis points in gross margin was primarily driven by lower input costs as well as the impact of price increases implemented during the last 12 months, all of which were partially offset by higher promotional discounts. A look at input costs. We experienced a net unfavorable impact of 70 basis points from our major input costs. This was driven by changes in the cost of petroleum-based materials along with lower can costs and in Asia-Pacific and EMEA segments. The net impact of changes in other input cost was not material. Sales price increases are considered and implemented on a country-by-country basis periodically to help offset the impact from input cost increases. Period versus…

Thanks, Jay. Looking forward, we remain cautiously optimistic about several macroeconomic factors. As per our second quarter and year-to-date results, we expect that growth in EMEA and the Americas will continue to more than offset any lower industrial activity and sales in Asia-Pacific. We also hope there will continue to be a relative stability in input costs and that our efforts to improve operations and sourcing will benefit our gross margin. We also expect the benefit we currently have in our margin will help offset unfavorable impacts we are beginning to see related to changes in foreign currency exchange rates. Given this outlook, our guidance remains unchanged from what we shared with you in January. The following fiscal year 2014 guidance does not include any acquisitions or divestiture activity and assumes that foreign currency exchange rates will remain close to recent levels. We expect our fiscal year net sales results to be in the range of $383 million to $398 million or growth of between 4% and 8% versus fiscal 2013. We project gross margin to be close to 51%. We expect our global advertising and promotional investment to be in the 6.5% to 7.5% of net sales. We expect income of $40.5 million to 42.8 million, which would achieve a diluted EPS of $2.65 to $2.80 assuming 15.3 million weighted average shares outstanding. So, in summary, what did you hear from us in today's call? You heard, we increased sales by 8% in the second quarter and that double-digit growth in the Americas and EMEA more than offset the lower activity in our Asia-Pacific region. You heard we doubled sales of our Specialist product line and that we launched new offerings in Europe. You heard we grew gross margin by 70 basis points over the period and that we continue to be above our target. You heard that we continue to make progress on and benefit from our strategic initiatives, including new SKU launches to grow sales and aerosol can project reduce costs and programs to increase margins. You heard that we grew diluted earnings per share to $0.67 in the second quarter and returned capital to shareholders through the purchase of 239,501 shares at a cost to $17 million. You heard that our outlook is cautiously optimistic and that we are maintaining our guidance with sales growth of 4% to 8% for fiscal year 2014. In closing, I would like to share a quote with you from Franklin D. Roosevelt. The only limit to our realization of tomorrow will be our doubts of today. Let us move forward with strong and active faith. Thank you for joining us today. We would be pleased to now open the conference call to your questions.

(Operator Instructions). We will go first to Liam Burke with Janney Capital Markets.

Good afternoon, Garry. Good afternoon, Jay.

Hi, Liam.

Hello, Liam.

Garry, you said that Eastern Europe, or the distribution side of the European business was up 33%. A lot of those are smaller or more emerging markets. Do you see any similarities between those markets and the ones that you serve that are relatively more developed like China?

Well, there are a couple of big markets in that Eastern bloc, Liam. Places like Poland and Russia are in that bloc. So I think overall in Eastern Europe, we continue to see an increase of the people being aware and using more of our Blue and Yellow can, plus we are being pleased with the adoption of our Specialist product line in a number of countries, including Russia which was one of the first of those distributor markets to take on a range of Specialist earlier in the year.

Do you see any conflict between a newer WD-40 introduction and Specialist or do you see them growing together?

We don't take Specialist into a market until the WD-40 core brand has a measured level of awareness and acceptance. We have to have that to get buy-in or to gain from leveraging what we call the power of the shield. But it is not unlikely that both could grow at similar rates in the initial period. Again, we believed, and still believe that Blue and Yellow can market is bigger than the Specialist market but we maybe learning that could be different in some places over time.

Okay, and then on China, you spoke about how you have some cost savings on the aerosol cans. Is that production facility meeting your expectations and has it been running up to how you thought it would?

Yes, absolutely. It's delivered as we wanted and is well placed to deliver the volumes that we need in the foreseeable future.

Thank you, Garry.

Thank you.

We will go next to Ben Richardson with JPMorgan.

Good afternoon, gentlemen.

Hi, Ben.

Hi, Ben.

Just a quick question about the ERP implementation in Europe. Just any idea about possible savings and the timing of that implementation?

We are in the final pilot program. We expect to -- we will progressively implement it in different geographic areas over a year. All of the initial costs have been sunk costs. So we would think that it will be at least a year from now till it is fully operational in all of the geographies of Europe. It's more providing capacity than cost savings. As our business is growing substantially over there, we have needed more capacity to be able to facilitate the transactions. So, it's more really. There are obviously efficiencies but we don't think that it's going to reduce the number of people we have. In fact, we have probably increased a couple. So it's preparing us for the future growth.

Okay, and then on the topic of share repurchase. It seems that you are going at a pretty good clip here, and what remains of the $60 million? And you mentioned that you will likely consider to buy - execute that throughout the year. But what might be the pace for that?

We have targeted somewhere between 30 million to 35 million on an annual basis and that would effectively take us up through a couple months prior to our current authorization.

Okay, and what remains at this point?

$35 million.

$35 million. Okay, perfect. Thank you.

Thank you.

We will go next to Joe Altobello with Oppenheimer.

Hi, guys. Good afternoon.

Hi, Joe.

Just a couple of quick questions, I guess on Asia-Pacific first. In terms of the weakness this quarter, you mentioned that there is a backlog of orders that you were supposed to ship in the first quarter got pushed back into the second. Could you quantify for us, or actually from the second to the third, could you quantify how much of those orders got pushed back?

We probably would have been reasonably flat if they would have shipped for the quarter, and they are all to distributor markets. So that was orders that was going to places other than Australia and China where we manufacture, but they are all distributor business.

Okay, and the way that you described it, it sounds like that those orders have not been shipped yet, as of April 8.

Yes, they’ve shipped.

Okay, they have. And China, could you tell us what China did in the quarter year-over-year?

I think we mentioned it. You got another question while we find that?

Yes, just in terms of gross margin, I think, year-to-date, you have done 51.8% or thereabouts. Your guidance is still around 51%. So maybe I am reading this too literally, but that would imply some decline both sequentially as well as year-over-year. So help us understand why we would see the decline in gross margin you guys are guiding to in the back half of the year?

We are not that good at forecasting the future. He who guides by the crystal ball gets the glass. So there is nothing significant there but we have got exchange rates. We have got volatility in oil prices, all of the normal things. But I think, as you might have gathered from the call we were potentially reasonably comfortable that we were going to be at least that way we are guiding. Jay, you had…?

Yes, essentially we left our guidance alone. We are very pleased that our margin is up over that 51%, but we really are guiding towards our bottom-line earnings and we left it alone. We feel fairly comfortable in that range.

Okay, and then in terms of Specialist, obviously you mentioned that it doubled year-over-year. A lot of that is coming from new distribution. I think Australia was part of that new distribution. Are there other big markets that you still have to go into with that brand over the six or 12 months or so?

Well, there is a number of aspects to that, Joe. Firstly is, it’s not only the brand but it is the categories that we choose to go into. So we are not only increasing distribution of Specialist but in the United States, for example, we are still at early days. We continue to get more of the SKUs of the different categories into distribution. They are delivering excellent results for our retail as we are actually growing categories that we were not growing before. So our retailers are very comfortable with that. Specialist is a long, long road and we will be talking about it for as long as I am here, and probably longer than that. So we believe that is what we expected it would be which is our platform for leveraging the power of the shield. We are certainly delighted that we have doubled sales year-over-year. It's becoming a significant number now and now that we have seen that performance we gain more confidence about our ability to be able to very deliberately extend the brand, and I say the word ‘deliberately’ because this is not just slap that shield on anything. There is a lot of work been going on over the past many years and consistently and into the future about where we will take it. So the world, as you know, is our oyster. We can take things to more people and more places faster than anyone else now. We spent the last 10 years building up that distribution center globally and I think Specialist really shows how that having set up that distribution, we are able to take more things to more people and more places faster. So Specialist is - we are in a comfortable position with this and we feel good about the future.

Okay. Thanks, Garry. Thanks, Jay.

Thank you.

We will go next to Linda Bolton-Weiser with B. Riley. Linda Bolton-Weiser - B. Riley & Co.: Hi. First, can I just ask for a clarification on what you said on Asia? Did you mean that the whole Asia-Pacific segment would have been flat excluding the backorder issue? Or just the rest of Asia piece that was down 30%?

The rest of Asia. Well when you look at it, Australia was relatively flat anyhow, China was down and the rest of Asia would have been flat if would have shipped that backlog. Linda Bolton-Weiser - B. Riley & Co.: Okay. I got you. And then, well, just on that issue with the Indonesia distributor transition, I can't quite remember how long you have been talking about that, but when did that issue start to impact and when will we fully anniversary that disruption from that?

We changed the distributor in September last year. So we will lap at this September and what we are going through really is a ramp-up with the new distributor. So it took time to ship product in to our new distributor. There was, if you will, a gap in the market, but the in-market sales of good and it's just an event, its not a trend. We will be through it and on our way. Linda Bolton-Weiser - B. Riley & Co.: Okay, and then I was wondering, did you see any uptick in consumption demand in Philippines because of cleanup efforts there after the typhoon? And how does Philippines rank in terms of size of market for you? Is it one of the smaller or how does it rank versus like India and a few of those other markets there?

It would be a mid-size market as far as consumption is concerned in Asia-Pacific. India would be smaller than the Philippines because India is not as developed yet. We may have seen some. But I think as we have talked before, Linda, it would be very unusual to see a needle move, because of a particular geographic climatic condition that would be so obvious amongst the scheme of things. But yes, we always see an uptick in consumption but it is event driven and it is just an opportunistic result. But it normally doesn't make a huge difference. One of the reasons also is that the event happen and sometimes the product has to get to that region. They don't carry excess inventory hoping for a typhoon. So we may see some depletion of inventory and some top up later, but it's really hard to be able to focus in on one geographic area, particularly a country the size of Philippines and think that it might make a difference. Linda Bolton-Weiser - B. Riley & Co.: Okay, and then can you just talk, I think your normal habit is to redo some tin contracts in January. Can you give us some rough idea how that went? Does that bake in a lower tin cost, moderately lower, much lower, flatter? Can you give some color on that? And also, it seems like petroleum-based cost might be down a little bit since you last report? Would that be true? Thanks.

Actually today there, in the last few days they have been up. They are a little around 100 and a little over 100, where I think we last reported we were more into 90s, I think. But from a standpoint of the tin plate in our contracts, yes, in the U.S. we renegotiated our contract in the first quarter, in the first part of the year in January and essentially we saw no increase in the pricing this year. We had some negotiations that lowered our can costs at the very end of last year. So we are going into this year with lower can cost. Linda Bolton-Weiser - B. Riley & Co.: Great. And just one last thing. Did you say that the other expense item was more negative than in prior year because primarily of FX?

Yes. We had gains on foreign currency transactions in the prior year whereas this year we had some foreign currency exchange losses. Linda Bolton-Weiser - B. Riley & Co.: Okay, great. Thanks a lot, guys.

Thank you, Linda.

You are welcome.

We will go next to Rosemarie Morbelli with Gabelli & Company. Rosemarie Morbelli - Gabelli & Company: Hi. I was wondering if you could talk about what you are seeing in terms of overall demand in Europe? Have you seen an uptick as many companies have seen? Or are your products not as affected by the economic turnaround that we expect?

Well, I think you will see that last year when Europe went through its economic challenges, was it last year, I think it was the year before. We also went sideways, not necessarily because of a lack of demand of our product but more as a result of activities of the retailers and distributors who sell our product. We have seen a steady increase in confidence over the past 18 months in Europe and that's being reflected in the results that you are seeing being delivered now. So we are very encouraged about our opportunities for long period of time into Europe and will weather the storms as they come and our products itself again is not necessarily that impacted by the end user. It's more impacted by the activities of the distributors and wholesalers. Rosemarie Morbelli - Gabelli & Company: So when you look at what the activities of the distributors, and if you look sequentially on a monthly basis, since the beginning of the year are you seeing sequential improvement every month or it just doesn't work like that for you?

It doesn't work. We would have trouble over the many European countries that we are in tracking them month-by-month. Quarter-by-quarter would be the best but year-on-year, but yes, we have seen a general increase in business activity across most of the European markets, particularly one is Spain. Now Spain is a doing reasonably well right now and it was one of the worst performing markets 18 months ago. But our business in Spain has rebounded very significantly in the last year. Rosemarie Morbelli - Gabelli & Company: All right. That is very helpful. Thank you. And I was wondering also, if your sales in the U.S. were affected by the bad weather we had or if that has no impact whatsoever?

I can't say it has no impact but certainly, if there was any impact, I think it might have been reflected in the sales. We had a good quarter. Certainly as customers can't get to stores to buy product, then we are not going to sell products. But we know that overall the conditions will be impacted like most others but there is nothing that we can say this did that. Rosemarie Morbelli - Gabelli & Company: Okay, and then lastly, if I may. Could you talk about whether the turmoil in Russia, Eastern Europe is affecting your revenues and whether you expect it to?

Not that we can see at this time. Whether it will or not, I don't know. Rosemarie Morbelli - Gabelli & Company: Okay. Thank you.

Thank you.

We have no further questions at this time. So I turn the conference back over to Garry Ridge for any additional or closing remarks.

Thank you so much. Thanks for all of those who have joined us. Thanks for the questions. And we will look forward to talking to you again on July 9. Until then, keep spraying. Bye for now.

That does conclude today's conference. We thank you for your participation.