WD-40 Company (WDFC) Q1 2018 Earnings Report, Transcript and Summary

Good day and welcome to the WD-40 Company First Quarter Fiscal Year 2018 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 the 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. In addition to the financial information presented on today’s call, we encourage investors to review our earnings presentation, earnings press release and Form 10-Q for the period ending November 30, 2017. These documents are available on our Investor Relations website at investor.wd40company.com. A replay and transcript of today’s call will also be made available at that location shortly after this call. On today’s call, we will discuss certain non-GAAP measures. The descriptions and reconciliations of these non-GAAP measures are available in our SEC filings as well as our earnings presentation. 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 discussions. Finally, for anyone listening to a webcast replay or reviewing a written transcript of this call, please note that all information presented is current only as of today’s date, January 9, 2018. 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.

Thank you, Wendy. Good day and thanks for joining us on today's conference call. I'm delighted to report for the first time in a long time that the impact of foreign currency exchange rates are not diluting our top line growth results. Today, we reported net sales of 97.6 million for the first quarter of fiscal 2018, reflecting an increase of 9% from the first quarter of last fiscal year. Net income for the first quarter was 12.6 million compared to 11.8 million in the first quarter of last fiscal year, an increase of 7% period over period and diluted earnings per share for the first quarter were $0.90 compared to $0.82 for the same period last fiscal year. Now, let's start with the discussion about our strategic initiatives. As most of you will recall, at the end of last fiscal year, we shared with investors a revised view of our strategic initiatives and our 2025 revenue targets associated with them. Our new long-term revenue target is to drive consolidated net sales to approximately 700 million in revenue by the end of fiscal 2025. Strategic driver number one is to grow WD-40 multi-use products. Our most important strategic initiative is to take the blue and yellow can with a little red top to more places for more people. We’ll find more users more frequently. We believe there are many opportunities in front of us that will enable us to achieve our anticipated target of approximately 530 million in WD-40 multi-use product revenue by the end of fiscal year 2025. To achieve this target, we will maximize the product line through geographic expansion, increased market penetration and development of new and unique delivery systems. In the first quarter, global sales of WD-40 multi-use product was 74.5 million, reflecting an increase of 10% compared to the first quarter of last year. Strategic initiative number two is to grow the WD-40 specialist product line. Our goal, under this initiative, is to leverage the WD-40 specialist product line and create growth through continued geographic expansion as well as by developing new products and product categories within defined platforms. We are optimistic about the long-term opportunities for the WD-40 specialist and believe we can grow the product line to approximately 100 million in revenue by the end of 2025. Our tribe has delivered some best-in-class WD-40 specialist products over several years. As a result, we now have an exceptional portfolio of products that we are proud to have wear the WD-40 shield. It's now time to maximize the pipeline of products we've developed by enhancing the distribution through focused and deliberate geographic expansion. In the first quarter, global sales of WD-40 specialist was 7.5 million, reflecting a increase of 29% compared to the first quarter of last year. We are optimistic about the long-term opportunity of specialist, however there will be some volatility in sales levels along the way due to the timing of promotional programs, the building of distribution and various other factors that come with building out a new product launch. Strategic initiative number three is to broaden the product and revenue base. Our goal, under this initiative, is to leverage the recognized strengths of WD-40 Company to derive revenue from existing brands as well as from new sources and products. Strategic initiative number three includes maintenance products like WD-40, sorry, THREE-IN-ONE, WD-40 BIKE and G T85 and has been expanded to include its brands such as Spot Shot and Lava in the Americas, 1001 in EMEA and NoVac and Solvol in Asia Pacific. We believe we can continue to nurture the products included under this initiative and expect their combined revenue to reach approximately 70 million by the end of fiscal 2025. We have spent the last several years better understanding how each of these brands perform in their own unique channels and geographies. Many of them generate sizable revenues and they all generate meaningful profitable contributions and cash flows. In the first quarter, global sales of products included under this initiative were 10.5 million, which is relatively flat compared to the first quarter of last year. Strategic initiative number four is to attract, develop and retain outstanding tribe members. Our goal, under this initiative, is to attract, develop and retain talented tribe members and to grow tribe member engagement to greater than 95%. We recently announced the addition of David Pendarvis to our Board of Directors. As a Global General Counsel at Resmed, David's international experience is an asset to the business like ours, which has products available in more than 176 countries and territories worldwide. In fact, over the last three years, we've made several changes to our Board of Directors to ensure we have a diverse board, not just because it's the right thing to do, but we need to have a board that understands and can adapt our business to respond to the current events from San Diego to Shanghai. Accordingly, over the last three years, we've welcome Melissa Claassen who is currently living and working in Germany. Eric Etchart is a French national who has lived and worked for much of his career in China and speaks fluent Mandarin. We also are very proud to have Linda Lang serve as our Board Chair. Furthermore, our diverse board of directors mirrors our tribe of employees. Our 447 tribe members are truly a reflection of a global business. They live in the United Kingdom, the United States, China, France, Germany, Italy, Portugal and the Netherlands, Spain, Malaysia and you can bet I'm not the only Australian in this tribe. Let there be no mistakes. Our global diverse workforce is driving -- is the driving force behind our thriving global business, which is just one reason we’ve made another decision recently. As most of you know, last fiscal year, we relocated our San Diego based tribe members into a new office building designed to increase employee engagement and collaboration. Anyone who has ever visited our old offices would probably agree this investment was long overdue. What most people do not know is that our facility in Milton Keynes, which houses our UK based tribe members is nearly an exact replica of our old San Diego office. The fact is that it was built in -- it was pretty cool in 1985 when we moved in. Since then, we've done little to improve the office. After seeing the positive impacts of our new offices have had on our San Diego tribe, we decided it's time to invest in a new facility for our 85 UK based tribe members. We’re currently looking for properties in Milton Keynes area and we hope to find a building we can buy and renovate during this fiscal year and we look forward to keeping you updated on this exciting project in the coming months. Strategic initiative number five is operational excellence. Our goal, under this initiative, is best summarized by one of our core values here at WD-40 Company, make it better than it is today. We are continuously focused on optimizing resources, systems and processes as well as applying rigorous commitment to quality assurance, regulatory compliance, intellectual property protection. We measure ourselves against this operational excellence initiative by executing against our 55/30/25 business model and by making improvements to processes and systems that will safeguard the blue and yellow can with a little red top. To complete the update on our strategic initiatives, so let's move on to the details of our first quarter results, starting with sales. Consolidated net sales were 97.6 million in the first quarter, up 8.3 million or 9% versus last year. Translation of our foreign subsidiary results from their functional currencies to the US dollar had a favorable impact on sales. On a constant currency basis, total net sales would have been 96.2 million, an increase of 8% compared to last year. This is what we refer to as translation related impacts and impacts reported results from Canada, Australia, China and the EMEA segment. In addition, we experienced about 200,000 in transaction related impacts in EMEA. So in total, changes in foreign currency exchange rates increased our net sales by 1.6 million in the first quarter. Now, let's take a closer look at what's happening in the individual segments. We'll start with the Americas. Consolidated net sales in the Americas, which includes the United States, Latin America and Canada, increased to 46.2 million in the first quarter, up about 8% from last year. Sales of maintenance products increased by 11% in the Americas, primarily due to the higher sales of WD-40 multi-use products throughout the trading block as well as strong sales of specialist in the US and Canada. I'm pleased to share with you that the challenging market conditions we experienced in the United States during fiscal 2017 have eased. Accordingly, maintenance products sales in the United States increased 10% in the first quarter due to the successful promotional activities and higher sales of our WD-40 EZ-REACH delivery system. Maintenance product sales in Latin America were up 15% in the first quarter when compared to last year, driven by increased sales of multi-use product, particularly in Central America, Ecuador and Mexico. In Canada, maintenance product sales were up 16% during the quarter due to the timing of customer orders and promotional activities for the multi-use product WD-40. As a reminder, our maintenance products exclude our home care and cleaning products. Sales of our home care and cleaning products in the Americas decreased 7% in the first quarter as compared to the same period last year. Now, let's head over to EMEA. Consolidated net sales in EMEA, which includes Europe, the Middle East, Africa and India, increased to 35 million in the first quarter, up 16% from last year. EMEA’s reported results in the first quarter were positively impacted by foreign currency exchange rates. On a constant currency basis, sales in EMEA increased 3.7 million or 12% compared to last year. We continue to make progress with increased distribution throughout EMEA of our WD-40 Smart Straw delivery system. The UK marketing team ran some very successful in-store and online promotions to help educate trade users about the Smart Straw delivery system. In fact, the tribe was able to generate over 5.5 million views in one week with the help of their Don't be a Tool video campaign. As you know, we sell into EMEA through a combination of direct operations as well as through marketing distributors. Net sales in EMEA direct markets, which accounted for 64% of the region’s sales, increased 13% during the quarter to 22.5 million in US dollars. We experienced strong sales growth in nearly all of our EMEA direct markets in the first quarter. The strength was driven by the timing of promotional activities in the region and very strong sales of WD-40 specialist within our Continental European direct markets. Now, let's have a look at our EMEA distributor markets, which accounted for 36% of EMEA sales in the quarter. Distributor market sales increased by 22% in the first quarter to 12.6 million. The strength was driven by higher sales of WD-40 multi-use products in Northern Europe and the Middle East as a result of promotional activities in the region. Of course, we'd like to remind investors that the political and economic instability in many of these regions make it difficult for us to predict what level of sales we’ll have in this market in the future. Now, let's take a look at Asia Pacific. Consolidated net sales in Asia Pacific, which includes Australia, China and other countries in the Asian region increased to 16.4 million in the first quarter, up about 2% from last year. In Australia, net sales in US dollars were 4.5 million in the first quarter, up 1% compared to last year. Changes in foreign currency exchange rates had a positive impact on these results. In its functional currency of the Australian dollar, sales were down 2% for the quarter. This decline was due to the timing of customers orders and lower level of promotional activities in the period. In China, net sales in US dollars were 2.9 million in the first quarter, down 9% compared to last year due to the timing of customer orders. Changes in foreign currency exchange rates have an immaterial impact on reported results. We remain optimistic about the long-term opportunities in the China region that we expect a lot of volatility along the way due to the timing of promotional orders, the building of distribution, changing economic patterns and varying industrial activities as well as the timing of customer orders. In our Asian distributor markets, net sales were 9 million for the quarter, up 6% compared to last year. The increase in sales was driven primarily by a high level of promotional activities, particularly in Malaysia, South Korea and the Philippines. Our Asian distributor markets are not impacted by currency, since we sell our product in US dollars in that region. Now, I'd like to hand over to Jay who will continue the review of the financials.

Thank you, Garry. First, let's review our 55/30/25 business model, the long term targets we use to guide our business. As you may recall, 55 represents gross margin, which we target to be at 55% of net sales. The 30 represents our cost of doing business, which is our total operating expenses, excluding depreciation and amortization. Our goal is to be closer to 30% of net sales. And finally, the 25 represents EBITDA. First, a look at the 55 or our gross margin. In the first quarter, gross margin was 55.5% compared to 57.2% last year. Net changes and major input costs, which include petroleum based specialty chemicals as well as aerosol cans negatively impacted our margin by 120 basis points in the current quarter, primarily due to increased costs of the specialty chemicals compared to last fiscal year in all three segments. As you know, crude oil is one of the primary feedstocks of our petroleum based specialty chemicals and the average cost of crude oil that flowed through our cost of goods sold this year was higher in the first quarter compared to the same period last year. So we had negative impacts to gross margin. Sales of exchanges and other miscellaneous costs also negatively impacted gross margin by approximately 50 basis points. Gross margin was also negatively impacted by 30 basis points due to higher warehousing and inbound freight costs in all three segments. These negative impacts to gross margin were partially offset by changes in foreign currency exchange rates, which had a slight positive impact to gross margin of 10 basis points. This is because in EMEA, our cost of goods are sourced primarily in pound sterling, while approximately 70% of our revenues are generated in currencies other than pound sterling. Advertising, promotion and other discounts decreased compared to last year period, positively impacting our gross margin by 10 basis points. And gross margin also was positively impacted by 10 basis points due to select price increases, which were implemented in EMEA over the last 12 months. I'd like to remind investors that despite the current cost increases we've seen for crude oil, our gross margin target of 55% remains unchanged. Our gross margin is not contingent on crude oil staying at any particular price point. We will continue to be focused and deliberate in managing our business so that we can maintain gross margin at a level close to the target of 55 over the long term. Now, I’ll address the 30 or our cost of doing business. In the first quarter, our cost of doing business was approximately 36% compared to 37% last year. Revenue growth is the most important factor in achieving our long-term 30% target. And in the first quarter of this year, our reported revenue increase positively affected our cost of doing business percentage. In the first – for the first quarter, 76% of the cost of doing business came from three areas, people costs or the investments we make in our tribe, the investments we make in marketing, advertising and promotion. As a percentage of sales, our advertising and promotional investment was 5.2% in the first quarter. And then finally, freight costs, the costs to get our products to our customers. In the first quarter, our SG&A increased 8% compared to last year, primarily due to higher employee related costs linked to increased headcount and annual compensation increases. Also impacting SG&A was increased freight costs, primarily due to higher sales volumes in the Americas and EMEA. Various other items also contributed to the increase in SG&A expenses, including some additional costs associated with our new building in San Diego and the unfavorable impacts from foreign currency exchange rates from period to period. While our objective is to have our cost of doing business closer to our target of 30% of net sales, we plan to continue to make investments in support of the fifth strategic initiative, operational excellence, and this will include investments in quality assurance, regulatory compliance and intellectual property protection, in order to safeguard the blue and yellow can with the little red top. We expect to move closer to our long-term target of 30% over time as revenues grow. Well, that brings us to EBITDA, the last of our 55/30/25 measures. EBITDA was 20% of net sales for the first quarter, compared to 21% in the first quarter last year and that will complete the discussion on our 55/30/25 business model for the current quarter. I’ll now discuss a couple of other items worth noting. The provision for income taxes was 23.7% in the first quarter compared to 28.3% last year. The decrease in the effective income tax rate was driven by our recent adoption of the new accounting standard for stock-based compensation. This resulted in a decrease in the company's effective tax rate of approximately 4.9 percentage points or about $800,000 for the first quarter compared to last year. Although this change in accounting can increase the volatility of the company's effective tax rate from period to period, the majority of the impact is expected to occur in the company's first quarter each fiscal year. Including the impact of the adoption of this accounting change, we would expect our effective tax rate for fiscal 2018 to be approximately 27%. However, this excludes any impacts from the recent changes in the US tax law. These tax legislation changes are complex and significant and once our tax team has completed their assessment of this new law, we will be able to quantify the full impact of it on our effective tax rate. Based on our initial assessment, we believe the changes will have some positive impact on our annual effective rate in fiscal 2018. Well, net income for the first quarter was 12.6 million versus 11.8 million in the prior year, reflecting an increase of 7%. Changes in foreign currency exchange rates had a favorable impact of about $200,000 on the translation of our consolidated results this quarter. On a constant currency basis, net income would have increased about 5% compared to last year. Diluted earnings per common share were $0.90 in the first quarter compared to $0.82 for the same period last year. Diluted weighted average shares outstanding decreased to 14 million shares from 14.2 million shares a year ago. And now, a word about our capital allocation. Our capital allocation strategy includes a comprehensive approach to balance investing and long term growth while providing strong returns to our stockholders. We typically target maintenance CapEx of between 1% and 2% of net sales. However, our CapEx this year was higher than normal due to an investment we made during the year of 2017 to buy and renovate a new office building to house our San Diego based tribe members. As Garry mentioned earlier, we're planning to complete a similar project for our UK based tribe members. Therefore, in addition to our maintenance CapEx, we anticipate an investment of approximately $13 million over the next 18 months. We are in the early stages with this project, but we’ll update investors as it develops. We continue to return capital to our shareholders through regular dividends and share repurchases. On December 12, 2017, our Board of Directors approved a quarterly cash dividend of $0.54 per share, reflecting an increase of 10% over the previous quarter’s dividend of $0.49 per share. This increase represents the eighth consecutive year the company has raised its annual dividend over which time the dividend has increased 116%. And based on today's closing price of $118.10, the annualized dividend yield is 1.8%. During the first quarter, we repurchased just over 35,000 shares of our stock at a total cost of $3.9 million under our current $75 million share repurchase plan, which was approved by the board in June of 2016. At the end of our first quarter, we had $40 million remaining under the plan. So with that, let's turn to fiscal 2018 guidance. We are updating the net income and diluted earnings per share guidance we gave in October to reflect our recent adoption of the new accounting standard for stock-based compensation. The remainder of our guidance remains unchanged. It is important for investors to note that this updated guidance does not take into account any impact from the recent tax law changes or any actions that we may take as a result of the new legislation. Once we've had the opportunity to quantify the full impact of the revised tax law, we will update our guidance accordingly. Net sales growth is projected between 4% and 6% with net sales expected to be between $396 million and $403 million. Gross margin for the full year is expected to be near 56%. Advertising and promotion investment is projected to be near 6% of net sales. Net income is projected to be between $54.4 million and $55.3 million and diluted earnings per share is expected to be between $3.91 and $3.98 based on 13.9 million weighted average shares outstanding. As a reminder, the guidance doesn’t include any future acquisitions or divestitures and assumes crude oil prices and foreign exchange rates will remain close to current levels for the duration of 2018. Now, that completes the financial overview and I’ll turn it back to Garry.

Thanks, Jay. In closing, I’ll summarize what you heard from us on the call today. You heard that for the first time in a long time, the impact of foreign currency exchange rates are not diluting our top line growth results. You heard that MUP is up with 10% global growth in the first quarter. You heard that the Americas and EMEA both delivered double digit maintenance product sales growth. You heard that the global south of WD-40 specialist grew 29% in the quarter. You heard that we've increased our dividend 10% last month and that’s the increase that represents the eighth consecutive year the company has raised its annual dividend over which time the dividend has increased 116%. You heard that we updated our fiscal year 2018 guidance for net income and diluted earnings per share to reflect our recent adoption of a new accounting standard for stock based compensation. And you heard that we expect the new tax law to have some favorable impact on our annual effective tax rate in fiscal year 2018 and that once our tax team have completed their assessment, we will update our guidance accordingly. In closing, I'd like to share with you a quote from Richard Branson, “If your dreams don’t scare you, they are too small.” Thank you for joining us today. I’ll be pleased now to open the conference call to your questions. Back to the operator.

[Operator Instructions] And your first question comes from the line of Liam Burke from B. Riley FBR.

Garry, this isn't a big deal, but you had strong EZ Reach sales in the US. Specialist sales were pretty strong. Those are nice margin products. But you had a little bit of unfavorable product mix in the multipurpose category. What caused that?

What unfavorable product mix?

You had about 50 basis points in lower gross margins year-over-year on less favorable product mix. But during your prepared comments, you were saying EZ Reach in the US was strong. Specialist sales were good. What was in the mix that would cause that?

Just let me see here, Liam. There was nothing particular. When I look at the mix, there was about 1 percentage point in the US that was off and it may have been because of some of the promotional phasing of EZ Reach. We did have some major promotions going on in that area so that would probably be what I could point to.

Okay. And on the subject of tax reform, do you see any shift in the capital structure? You should be able to repatriate some of the cash you have overseas. Would you apply any of that to debt reduction or are you comfortable with your current capital structure?

Well, we’re generally comfortable with our current capital structure, but certainly, that's an option for our use of cash and we wouldn't -- it wouldn't surprise -- you shouldn’t be surprised if we do bring some back and pay down some debt.

Your next question comes from the line of Daniel Rizzo from Jefferies.

Just so in terms of the gross margin and your outlook for 2018 and for the 55%, I mean, given what oil has done, would that suggest that you’re going to raise prices to offset in the back half of the year if need be to keep the target and to kind of maintain what you’ve said as a long term goal.

Thanks, Daniel. Right now, we’re looking at the flow through of oil. As you may recall, it takes 90 to 120 days for oil to flow through. Currently, we're seeing oil at around the $62 mark. It was probably in the mid-50s or so prior to that. We have taken some pricing in some areas of the world where some of the oil impact is a little higher, particularly in Europe. But at this time, we’re really not anticipating any real pricing changes. What we are seeing is the ability to maintain margins through our premiumization, which is primarily the conversion of Smart Straw in Canada, sorry, in the EMEA segment and some of the other products that we're bringing and some of the specialist products. So we are very committed to our 55 or greater gross margin. We've been managing through oil at varying levels for many years. If oil does do something unexpectedly in spiking, then, we'll make a decision then and we may take a hit for a short period of time, but it will only be a short period of time. So right now, we've not changed our guidance and we feel comfortable where we are. We'll see what happens in the next 90 to 120 days.

And then with sales, you had a very strong quarter. It seems like things accelerated and you no longer have the FX headwind. Are you -- would that suggest that maybe towards the end of the year again that you might be -- not be raising guidance at this point, but that -- I mean it just seems like that would suggest that things aren’t going to continue at this path and this quarter was more of an outlier. I was just wondering if, given the sales growth you have, no longer the FX headwind, if perhaps sales could come in higher than what you’re currently anticipating.

If we thought that, we would change our guidance. So, we're comfortable where we are now. It's like a game of golf. It's not over till 18 holes are played and we feel the first part of our year was -- put us on a strong point and if we feel later in the year it continues then we will do what we should do and that's we'll update people with good knowledge and good information on the way the market is.

And then finally with the new building in the UK, is that I mean going to follow a similar path as the one in San Diego in terms of cost and timing? I mean I know you said you wanted to take care of everything this year, but I was wondering if we can expect a similar result as what we saw last year.

It'll be smaller than the building in San Diego. We think the total costs, I think, Jay mentioned was in the vicinity of 13 million US. So, it's about 5 or so million less than we invested here in San Diego. We haven't yet obviously found or made any moves on acquiring a building. We've been looking at a number of opportunities in the Milton Keynes area and we'll be working on that, but this will be somewhere in the vicinity of 18 months. As a project, we believe once we do find the building and we acquire it, we’ll be able to update our investors a little more on the exact total investment.

And your next question comes from the line of Rosemarie Morbelli from Gabelli and Company.

Just following up on the previous question, if sales are going to be lower for the -- sales growth are going to be lower for the full year than they were in the first quarter, is that due to seasonality or are there other reasons why you would expect slower rate for the full year?

We have very real consolidated seasonality and that's because we're spread across so many geographies. It's summer in Australia and it's winter here. One offsets the other. Southern Hemisphere, northern hemisphere, but these sales vary quarter to quarter really around our promotional activities, what -- where retailers and distributors are promoting and in what geographies. So if you've looked past -- back at our past, you’ll see that we do have some fluctuations quarter to quarter, but they're really not driven by season. They're more driven by events that we do have some influence over.

Okay. So that brings me to the question about China, the fact that your sales were down 9%. You talked about timing of promotions or timing of order, correctly. Or is it dependent on your promotional level? Do you expect those orders to show up in the second quarter or do you need to have additional promotions in order to have new orders?

No. We believe that you'll see a major part of those orders show up in the second quarter. We actually ran a fairly large dealer event in China, just near the end of the first quarter. A lot of those orders won't ship until the second quarter. So, we expect to deliver a pretty good top line growth in China over the year. So, I think that we’re fairly comfortable as we continue to build our business in China.

And then I was wondering regarding -- you said that you need to build up the distribution of some of your new specialist product lines. Why aren't they using the same distribution network as a multi-use? I guess I don't quite understand that.

I'm sorry. Yes. They are using the same distribution network. We just haven't released them through all that distribution. So, we don't take everything to every trade channel in every country at the same time. It's really a phasing of where it's appropriate and what other activities we have going on around at that time. So it's not taking them to new distribution. It's really executing distribution in trade channels that we currently sell our blue and yellow can in, but we make a deliberate decision on when to go in certain geographies.

And then lastly if I may, looking at your 2025 targets, I understand the WD-40 multi-use target. I understand the specialist for the client target. The other 70 million, is that expected to come from products that are not currently in your portfolio?

No. It's going to come from products that are currently in our portfolio. Those products currently add up to about $53 million worth of revenue and in our investor presentation, on page 5 that should be up on our website now, if it’s not, it will be soon, it shows that they are currently at that 63 million and moving on to 70 million by 2025. And the products in there are THREE-IN-ONE, WD-40 BIKE, GT85, Spot Shot, NoVac in Australia, Solvol and Lava and 1001 in the UK.

Okay. So the difference between this and the specialist product is that the specialist products are more or less the multi-use, but just aren’t different type of applications?

Different applications and different types, for example, in our specialist products, we have products that are -- our new line of greasers, we have a line of degreasers. Then, we have a line of specific maintenance products like our penetrant, our silicon, our white lithium grease, our spray gel. So the specialist products are aimed at the heavy end uses or the trades end uses and we already have a significant portfolio of products wearing the specialist uniform.

Ladies and gentlemen, that does conclude our allotted time for questions. We thank you for your participation on today's conference call and ask you please disconnect your lines.