Question-and-Answer Session
The question and answer session will be conducted electronically. (Operator Instructions) Our first question today will come from J.P. Morgan’s Jeff Zekauskas.
Jeffrey Zekauskas – J.P. Morgan Securities
When you sell a can of WD-40 with smart straw what’s the average price differential versus a can of WD-40 without smart straw?
Gary O. Ridge
At a retail level its about 30% higher than a normal can.
Jeffrey Zekauskas – J.P. Morgan Securities
So, maybe $0.90 higher?
Gary O. Ridge
About $1.
Jeffrey Zekauskas – J.P. Morgan Securities
How much have you converted over in the United States of your cans of WD-40 so far?
Gary O. Ridge
We’ve run primarily promotional programs with selected sizes over the past couple of years as we’ve been testing the concept. The majority of the conversion which will be most of the cans that we sell in aerosol sizes in the US will commence in March of this year and will be final about middle to the later part of the year as we phase it into all of our customers. So far, the promotional size that we’ve used has only been on the 12 ounce can.
Jeffrey Zekauskas – J.P. Morgan Securities
So, if it’s $1 at retail is it maybe $0.50 at wholesale?
Gary O. Ridge
It depends on the customer and the distribution Jeff. But, certainly the wholesale price and the cost price does rise in line with somewhat the retail percentage.
Jeffrey Zekauskas – J.P. Morgan Securities
In the quarter did you say how fast WD-40 grew in North America or the United States?
Gary O. Ridge
In the Americas our lubricant sales for the quarter were just off slightly. I don’t have the exact figure in front of me. Mike do you have it there?
Michael J. Irwin
In the case of WD-40 in the US WD-40 sales were down 4%.
Jeffrey Zekauskas – J.P. Morgan Securities
How about sales to Wal-Mart as a percentage of the total? You usually disclose that in the Q.
Gary O. Ridge
Yes, we have disclosed it in the Q and because of the shift of our business where we’ve got now Jeff substantially more business overall outside of the US in fact, two-thirds of our business is now outside the US I recall how south Wal-Mart with 7% down from 9% as a total of our total sales.
Jeffrey Zekauskas – J.P. Morgan Securities
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