NEW YORK (TheStreet) -- It is difficult not to like the company, WD-40 (WDFC). Not only does almost everyone have a can of the eponymous household lubricant but the company's disclosures and presentation document are a joy to read. They are, in my view, insightful, informative and to the point.
For a company with a market cap of not much over $1 billion, many mega caps could learn a lot from looking at the style and structure of its reporting. The company's deceptively simple target of generating a 50% gross margin of net sales, holding the cost of doing business to 30% of net sales and hence generating a 20% EBITDA margin (of net sales) provides great accountability for investors.
Corporate results announced after the market close Tuesday showed some progress with its year-to-date 2014 sales, up 5% over the same period in 2013, and earnings per share up 6%. Hopes for 2014 were of a similar magnitude, but this was not enough for the market, which marked the shares down more than 6% on Wednesday.
WD-40 is not in crisis. With a strong balance sheet, geographic brand expansion and an experienced management team, it remains in a position of corporate strength.
The WD-40 quarterly presentation also contained great insight for economy watchers. Under a slide titled "Conditions that impact our outlook," the company graded key factors that influenced its business, with a traffic-light grading system: Green for favorable, yellow for uncertain and red for unfavorable. And the results? Two greens and three yellows.