News

Q2 profit slips slightly at WD-40 Co.

BY Ken Clark

San Diego-based WD-40 Co. reported net income of $10.5 million in the second quarter, down 1% compared with the previous year.

Net sales for the quarter ended Feb. 28 increased 1% to $86.7 million.

Gross margin was 50.9% in the second quarter compared with 49.0% in the same quarter last fiscal year.

"We were able to maintain our gross margin due to several factors, including the price increases we took last year to offset product cost increases, the relative stability in commodity costs and the benefits of the supply chain initiatives we implemented in China and North America," said Garry Ridge, president and CEO. 

Second-quarter multipurpose maintenance products sales, which include the WD-40, 3-In-One and Blue Works brands, were $75.4 million, up 6% from the prior-year fiscal quarter, and $157.2 million year-to-date, up 11% from the same period last fiscal year.

The multipurpose maintenance products are considered a primary focus for the company. Homecare and cleaning products sales, which include all other brands, were $11.3 million for the second quarter, down 23%, and were $24.8 million year-to-date, down 14%, both as compared with the prior fiscal year periods. The U.S. homecare and cleaning products are considered harvest brands providing healthy profit returns to the company and are becoming a smaller part of the business as the multi-purpose maintenance products sales grow.

For the first six months, sales increased 6% to $182.0 million. Year-to-date net income was $21.4 million, an increase of 23% from the prior fiscal year period.

The WD-40 Specialist product line was launched in fiscal year 2012 and was expanded into additional countries in the first half of fiscal year 2013. During the second quarter of fiscal year 2013, the company also launched three additional products in the WD-40 Specialist line: WD-40 Specialist Dirt & Dust Resistant Dry Lube, WD-40 Specialist Electrical Contact Cleaner Spray and WD-40 Specialist Machine & Engine Degreaser. The company recently launched the WD-40 Specialist Motor Bike line in the U.K. as well. 

"We are pleased with the performance of the WD-40 Specialist product line and what it does to bring the power of the WD-40 shield to new products that meet the needs of our end users," Ridge said. "As we planned, we continue to expand the WD-40 Specialist product line with new product offerings and in new categories, and later this year we will introduce a new line of products in the U.S. in the lawn and landscape arena."

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

POLLS

How much credit should be given to the co-op business model for the success of the independent hardware and building supply dealer over the last half century?
News

Valspar expands Pro Paint Program at Lowe’s

BY Ken Clark

Minneapolis-based The Valspar Corp. says it expanded its retail paint program with Lowe’s, tailoring it to the needs of the professional painter.

The effort brings a line of Valspar Pro and dedicated in-store service to more than 1,700 Lowe’s retail locations, according to the manufacturer’s announcement. 

“We believe this program at Lowe’s provides a compelling alternative to stand-alone paint stores by delivering quality professional paint products at an everyday low price with the added convenience of one-stop shopping,” said Howard Heckes, Valspar’s senior VP global consumer. 

The program includes a comprehensive lineup of Valspar-branded professional-grade products in multiple formulations and finishes that simplifies paint selection, while delivering on the durability and performance requirements of professional painters.

Valspar says it relied on input from pros as it expanded in-store support through custom tinting and color matching services, small batch mixing as well as direct shipping, volume and value pricing. 

The Valspar Pro program represents a substantial growth opportunity for Valspar as the professional paint business represents more than half of the U.S. architectural paint market, Valspar said. The program is also supported by a new mobile Web application at Valsparpro.com that provides essential information and application advice on various formulations and finishes. 

Valspar Pro officially launched in Lowe’s stores March 25 and features the “Pro Challenge,” a series of more than 300 events taking place in various Lowe’s retail locations throughout the U.S. 

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

POLLS

How much credit should be given to the co-op business model for the success of the independent hardware and building supply dealer over the last half century?
News

On private health exchange, choice and control drive satisfaction

BY Stephen Miller

Normal.dotm
0
0
1
1224
6979
LF
58
13
8570
12.0

0
false

18 pt
18 pt
0
0

false
false
false

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-parent:””;
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin:0in;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:”Times New Roman”;
mso-ascii-font-family:Cambria;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Cambria;
mso-hansi-theme-font:minor-latin;}

Data on the use of the first large private health exchange for U.S. employers — providing an online platform for active employees to purchase employer-subsidized coverage — reveal that enrollees chose the health plan they felt offered the best value for themselves and their family and that they liked being able to select among multiple carriers.

The multi-insurer corporate exchange, created by consultancy Aon Hewitt, began operating in the fall of 2012 for plan year 2013. Subsequently, a number of other large HR consultancies, including Towers Watson and Mercer, have created their own private exchanges for plan year 2014 or announced plans to do so.

Unlike the public, government-run exchanges scheduled to launch this fall for plan year 2014, private exchanges do not provide a conduit for the government to subsidize the purchase of policies by low-income employees. Instead, private exchanges let employers provide eligible workers with an employer subsidy to purchases policies that comply with the Patient Protection and Affordable Care Act (PPACA).

The new model is sometimes referred to as defined contribution health care, comparable to employer contributions to 401(k) retirement plans, in which employers monetize their commitment in the form of a defined contribution, rather than a defined benefit. In the case of private health exchanges, employers give each eligible employee fixed amounts for either individual or family coverage, regardless of the plan the employee chooses within those tiers. Workers add their own salary-deferred contributions in an amount they select and choose among differently priced plans from competing health insurers, taking into consideration factors such as varying premiums, deductibles and networks. If employees select a high-deductible plan that is health savings account (HSA)-eligible, for instance, they can determine how much extra money from their paycheck they would like to go into the HSA.

“During the 2013 annual enrollment period, last fall, more than 100,000 U.S. employees successfully enrolled in health benefits through Aon Hewitt’s Corporate Health Exchange,” said Ken Sperling, Aon Hewitt national health exchange strategy leader, at the 2013 MetLife Benefits Symposium on March 18, 2013, in Washington, D.C. Clients who shifted their health benefits to this exchange include Darden Restaurants (whose chains include Olive Garden and Red Lobster) and Sears Holdings Corp.

By offering coverage through a private exchange, “employers are not stepping away, but they are stepping back,” said Sperling. Under the private exchange model, employers no longer manage plan design and insurer relationships, including claims appeals, as those matters are outsourced to the exchange. As with other outsourced vendors, however, HR remains responsible for overseeing the employer’s ongoing relationship with the exchange provider. 

Competition among carriers

Competition among insurance carriers on the exchange lowers the cost for offered plans, Sperling said. In addition, “because enrollees from multiple companies participate, the exchange has greater leverage to negotiate lower plan costs for coverage that is comparable to what employees received through the traditional single-employer plan-enrollment model,” which in most cases will lower employers’ overall health care expenses, even after fees paid to the exchange are factored in, he explained.

“The exchange uses a fully insured model to create competition at a consumer level, and whenever markets are competitive, consumers benefit,” said Sperling. “This is not about shifting cost to employees; it’s about reducing the top line cost of health care. Employers can then redirect these cost savings to enhance companywide programs to increase employee health, well-being and engagement.”

Options for employees

During enrollment employees can sort and filter benefits options by price, carrier and plan. “When given more options, employees become empowered to make individual choices based on value, provider network, price and health status,” said Sperling. “Employees are not limited to a predetermined plan and insurance company.”

During the enrollment period for 2013 the Aon Hewitt exchange offered a range of health, dental and vision benefits options from multiple national and regional carriers, including UnitedHealthcare, Kaiser Permanente, HealthNet, Health Care Service Corp. (operating Blue Cross Plans in several states) and Florida’s Blue Cross and Blue Shield Plan.

“Aon Hewitt’s corporate exchange allowed us to move away from a one-size-fits-all approach to providing health benefits,” said Danielle Kirgan, senior vice president of total rewards and shared services at Darden Restaurants, who joined Sperling at the symposium. “This year we were able to offer a broader array of health care choices than we have in the past, giving our employees the flexibility to choose the level of coverage that best meets their needs at a price they could afford.”

Participating insurance providers highlighted their plans’ unique features and capabilities to help employees differentiate between coverage options, Kirgan said. The exchange’s support team provided employees with guidance throughout the enrollment process.

Enrollment by plan type

According to Aon Hewitt’s post-enrollment analysis for plan year 2013:

• 39% of employees with access to policies through the exchange enrolled in a consumer-driven health plan (CDHP) — a high-deductible plan with an HSA or health reimbursement arrangement (HRA). In 2012, before their employers shifted to the newly launched exchange, only 12% of these employees were enrolled in a CDHP option.

• Conversely, the number of exchange-eligible employees who enrolled in a traditional preferred provider organization (PPO) plan decreased from 70% in 2012 to 47% in 2013. However, while a significant number of employees migrated toward CDHPs, when given the choice, a fair amount chose to increase their health coverage by purchasing a plan with a lower deductible at a higher premium.

• For 2013, 32% of employees chose a plan similar in type to their current coverage (e.g., PPO to PPO), while 26% of employees “opted up” and chose to pay more for broader coverage.

• Forty-two percent of employees chose to reduce their regular payroll contributions and select a less rich form of coverage.

According to Sperling, “Employees who want richer coverage are free to purchase it — and they do. Health care is personal, and people have different needs. This model lets employees decide which plan and which insurance company is best for them, and they are free to modify that choice on an annual basis.”

Among other findings reported by Aon Hewitt, almost 80% of exchange enrollees said they were confident they chose the health plan that offered the best value for them and their family, and almost all (93%) indicated they liked being able to select among multiple carriers.

Increased use of decision-support tools

Employees who enrolled in their benefits through the exchange model used online decision-support tools, including health plan comparisons and cost estimators, significantly more than  the 10 million workers who completed a traditional enrollment through Aon Hewitt, Sperling noted. Specifically:

• 68% of exchange enrollees used a health plan comparison tool, while just 48% of employees who completed a traditional enrollment did so.

• 57% of exchange enrollees used a provider search tool, compared with only 14% of those enrolled in a traditional plan.

Challenges ahead

Kirgan noted that one issue likely to cause confusion among employees is how the new private exchanges (which are not eligible for government-subsidized coverage) will differ from the new public exchanges (which are). The private exchanges have adopted the “bronze, silver, gold and platinum” plan terminology of the public exchanges, denoting higher premiums for richer coverage, which adds to the blurring of differences.

Kirgan said that Darden Restaurants intends to help its employees who work fewer than 30 hours per week “get connected with coverage through state- or federal-government-run public exchanges,” which will require clear communication about which employees are eligible for which type of exchange.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

©2013 SHRM. All rights reserved.

Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, aToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).  

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

POLLS

How much credit should be given to the co-op business model for the success of the independent hardware and building supply dealer over the last half century?