Good afternoon. 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. Following their prepared remarks, the operator will come back on the line for the Q&A portion of the call. Before we get started, let me remind you that supporting materials for this call are available on our investor relations website at investor.wd40company.com. In addition to our traditional disclosures, the company has published its supplemental slides, which can be downloaded from this website. We encourage investors to review these slides in conjunction with today's prepared remarks. A replay and transcript of today's webcast will also be made available at that location shortly after this call. 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 discussion. Finally, for anyone listening to a taped or webcast replay or reviewing a written transcript of this call, please note that all information presented is current only as of today's date, July 8th, 2015. 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.
Thanks, Wendy. Good day. Thanks for joining us for today's conference call. I'm pleased with the performance of our global business, yet foreign currency exchange headwinds are distorting our reported results. Hopefully, today will throw some color on what that is. Today, you will hear that we reported net income of $11 million and diluted earnings per share of $0.75 for the third quarter. Year-to-date net income was $33.1 million, and diluted earnings per share were $2.24. You will hear that we reported net sales of $92.5 million for the third quarter, which is a 3% decline from the third quarter of last fiscal year. Year-to-date net sales were $286.2 million, which is a slight increase year over year. You will hear that the Americas performed very well in the third quarter, with a 10% increase in net sales.
You will hear that Asia Pacific is on track for a great year, despite a product quality challenge we encountered during the quarter. You will hear that EMEIA's base business is strong, but reported sales continue to be impacted by significant currency headwinds and political and economic instability in Eastern Europe. You will hear that the WD-40 Specialist product line continues to perform well, with global growth rate of 26% in the third quarter. You'll hear that later this month, we are launching our new delivery system for the WD-40 Multi-Use Product in the USA. In the third quarter, nearly 40% of our revenues were generated in currencies other than the U.S. dollar, which means we are experiencing significant foreign currency headwinds, particularly in EMEIA.
If you peel back the onion, our underlying business is performing well, and in local currencies, seeing growth in all but a few of our markets globally. While foreign currency exchange rates may obscure the strength of our underlying business, we remain focused on our long-term strategic initiatives, which are intended to drive organic growth despite foreign currency transaction and translation impacts. Let me remind you that we currently have four subsidiaries located outside of the U.S. that generate sales and do business in currencies other than the US dollar. They are located in the U.K., Canada, Australia, and China. The main currency in which each of our subsidiaries conducts its business is called the functional currency. We have foreign currency translation exposure when we translate the results of our foreign subsidiaries from their functional currency into US dollars.
The continued strength of the US dollar deflates the net sales denominated in currencies other than the US dollar, and thus has a negative impact on our consolidated results. In addition to this translation exposure, our U.K. subsidiary also experiences foreign currency transaction exposure because it conducts business in currencies other than its functional currency, the pound sterling. A significant portion of EMEIA's net sales are generated outside the U.K. and transacted in euros and US dollars. When these sales are converted into pound sterling, EMEIA reported results are impacted by the weakening of the euro against the pound sterling. In 2015, the euro has continually weakened against the pound sterling, making transaction exposure more significant to our business. Keeping the present currency environment in mind, I will now discuss our sales results in greater detail.
Consolidated net sales were $92.5 million in the third quarter and $286.2 million year-to-date. These numbers reflect a decline of 3% for the quarter and growth of nearly 1% year-to-date. If we take a closer look at the net sales by product group, we continue to be well-positioned for sustainable growth of our multipurpose maintenance products. We refer to this group as MPMP. We focus our time, talent, and treasure on this product group, and it accounted for 88% of our global sales in the third quarter. Consolidated MPMP sales were down 4% to $81.5 million in the third quarter and flat at $253 million year-to-date. By trading block, MPMP sales in the third quarter were up 12% in the Americas, down 18% in EMEA, and down 12% in Asia Pacific.
Year-to-date MPMP sales were up 4% in the Americas, down 7% in EMEA, and up 10% in Asia Pacific. If we take a closer look at the current quarter results, the increase in MPMP sales in the Americas was driven by strong growth of both our Multi-Use Product and Specialist sales throughout the trading block, including double-digit growth of both categories. MPMP sales in EMEA in the third quarter decreased 18%, primarily due to the unfavorable impact of foreign currency exchange rates. Overall, in EMEA, we saw double-digit growth of Specialist despite currency headwinds. The decrease in MPMP sales in Asia Pacific in the third quarter was attributed to a 28% decrease in our Asian distributor markets.
This decrease was due to a defective aerosol can component that caused an evacuation failure in one of our sizes of our multi-use products sold to our marketing distributors in various countries in Asia. We recorded a sales return allowance, and we were not able to sell the product, this SKU, to our marketing distributors in the third quarter due to the quality issue. Although our third quarter was negatively impacted by this event, it was an isolated incident and one which was quickly addressed from a quality perspective. Sales of MPMP products increased year-over-year in both China and Australia during the third quarter. Turning to our home care and cleaning products groups, sales were $11 million in the third quarter and $33.2 million year-to-date, up 1% in both periods. The product group accounted for 12% of net sales in the third quarter.
By trading block, sales of our home care and cleaning products in the third quarter were up 1% in the Americas, up 6% in EMEA, and down 3% in Asia Pacific. Year-to-date sales were flat in the Americas, up 2% in EMEA, and up 7% in Asia Pacific. As a reminder, our home care and cleaning products, particularly those in the U.S., are considered harvest brands that continue to generate positive contribution and cash flows but are generally expected to become a smaller part of the business as net sales of multi-purpose maintenance products grow with the execution of our strategic initiatives. Now, onto the results by segment. Let's start with the Americas. Net sales in the Americas, which includes the United States, Canada, and Latin America, increased to $49.7 million in the third quarter, up 10% versus last year.
Year-to-date net sales in the Americas increased to $139.2 million, up 4% versus last year. Looking at the U.S. alone, sales were up 11% in the third quarter and 4% year-to-date. During the third quarter, the U.S. experienced double-digit growth for all MPMP products due to the increased distribution and higher level of promotional activities. In the U.S., we experienced a 21% growth of the WD-40 Specialist product line in the third quarter and now 17% year-to-date. In Canada, net sales were up 7% in the third quarter and down 3% year-to-date. Changes in foreign currency exchange rates had a negative impact on sales results in Canada. In its transactional currency, the Canadian dollar, sales increased by 19% in the third quarter and 6% year-over-year. Total Latin American sales were up 7% in both the third quarter and year-to-date.
The sales increases in Latin America for both periods was due to higher sales of the WD-40 Multi-Use Product, primarily in Mexico, due to a successful promotional program, which was conducted in the third quarter of fiscal year 2015. Now over to EMEA. Net sales in EMEA, which includes Europe, the Middle East, Africa, and India, decreased to $30.3 million in the third quarter, down 17% versus last year. Year-to-date sales decreased 7% to $103.6 million. EMEA results in the third quarter were negatively impacted by currency headwinds as well as the political and economic instability in Eastern Europe. Since our results fluctuate due to the changes in foreign currency exchange rates, we also discuss our sales in what we call constant currency. For that, we translate the current period results from the foreign subsidiary functional currency into U.S. dollars at the same period last year exchange rates.
On a constant currency basis, sales in EMEA would have decreased 9% in the third quarter and 3% year-to-date. Wait, there's more. We sell into EMEA through a combination of direct operations as well as through marketing distributors. The direct market sales account for 67% of EMEA's total third-quarter sales and 61% of sales year-to-date. Direct market reported sales declined 6% in the third quarter and 5% year-over-year. Here is the more. These sales declines were entirely due to foreign currency exchange impacts. If we look at the local currencies in which sales are transacted in EMEA, in the direct markets. In the U.K., we sell in GBP. Sales increased by 15% in the third quarter and 10% year-over-year. In the European direct markets where we sell in EUR, sales increased 9% in the third quarter and 6% year-over-year. There you have it.
Currency headwinds obscuring what is going on within our Europe direct markets. Our distributor markets accounted for 33% of EMEA's total third-quarter sales and 39% of sales year-to-date. Distributor markets net sales decreased 33% in the third quarter and 10% year-to-date, primarily due to a significant decrease in Eastern European sales, particularly in Russia and Ukraine, where there continues to be political and economic instability. During the third quarter, we recorded no sales in Ukraine, and we have only recorded sales for Russia in the last month of this quarter. Unfortunately, at this point, experts are uncertain on how long this political and economic situation in Russia and Ukraine will last. Now Asia Pacific. Net sales in Asia Pacific, which includes Australia, China, and other countries in the Asian region, decreased to $12.5 million in the third quarter, down 11% versus last year.
Year-to-date sales increased 9% to $43.4 million. Changes in foreign currency exchange rates had an unfavorable impact on sales. On a constant currency basis, sales in Asia Pacific would have decreased 6% in the third quarter and would have increased 12% year-to-date. In Australia, reported net sales were flat both in the quarter and year-over-year. Changes in foreign currency exchange rates had a negative impact on sales results in Australia. In its transactional currency, the AUD, sales increased by 16% during the third quarter and 8% year-to-date. Sales in China increased 10% in the third quarter and 11% year-over-year due to the continuing building of distribution, much of which came from Southern China on ongoing promotional activities throughout the country.
We continue to be optimistic about the long-term opportunities in this region, although we expect a lot of volatility along the way due to the timing of promotional activities and programs, the building of distribution, the shifting economic patterns, and varying industrial activities. Sales in the rest of the Asian region decreased 28% in the third quarter. As I mentioned earlier, this decrease was due to a product quality issue linked to a defective aerosol can component in 1 SKU sold to our Asian Marketing distributors. The issue was quickly identified and rectified, and we do not anticipate having any further disruptions. We do not expect that sales in the Asian distributor markets will be negatively impacted in the future periods by this product quality issue.
Year-to-date, sales in the Asian region increased 15% year-to-date, primarily due to the increased sales of WD-40 Multi-Use Product throughout most of the distributor markets, including those of South Korea, the Philippines, and Indonesia. I would like to provide you with an update on our strategic initiatives. Our strategic initiative number one is to grow the WD-40 Multi-Use Product, the blue and yellow can with the little red top. Our goal under this initiative is to take the WD-40 Multi-Use Product to more places for more people and with more uses. Under the umbrella of strategic initiative number one, we're really excited to finally give you a sneak peek of our innovative new delivery system, and it's on slide 10 of our third quarter results earning presentation that's currently on our website. You can see a glimpse of our teaser campaign at www.wd40.com/ez.
Much like our Smart Straw, it was designed to make WD-40 Multi-Use Product even easier to use. The delivery system on this new product is designed to make the hard-to-reach easy to reach. The product will not replace any of our current delivery systems, but rather is an additional SKU for our end users to choose. It's scheduled to be on select store shelves in the U.S. by the end of this month. Strategic driver number two is to grow the WD-40 Specialist product line. Our goal under this initiative is to leverage the power of the shield to develop new products and categories within identified geographies and platforms. The WD-40 Specialist product line continues to grow, and sales of the product line increased 26% in the third quarter and 20% year-to-date. We continue to launch new specialist categories in markets around the world.
Each market and country and segment experiences different short-term trends relating to the sales of WD-40 Specialist product line, we continue to believe that WD-40 Specialist will be a sustainable and substantial revenue and earnings growth engine for many, many years to come. Strategic driver initiative number three, broaden our product base and revenue. Our goal under this initiative is to leverage the strengths within our company to derive revenue from new sources outside of our WD-40 flagship brand. WD-40 BIKE continues to grow, and we've expanded our product line, and it is now available in 19 countries at thousands of retailers around the world. During the third quarter, we continued to broaden distribution of our products. Our newest 3-IN-ONE product, Lock Dry Lube, was on the store shelves in retail channels in the U.S. for the first time in the third quarter.
Strategic initiative number four, attract, develop, retain outstanding tribe members. Our goal under this initiative is to attract, develop, and retain our most valuable resource, our tribe. We welcomed 10 new tribe members during the third quarter, bringing our total number of new hires year-to-date to 48. Developing our tribe and building our company's bench strength for our future success remains a top priority. During the third quarter, we concluded our fourth year of Leadership Lab, a program created to facilitate understanding of our leadership principles and values in order to develop the next generation of leaders within our organization. In total, we've had 162 tribe members graduate from various levels of Leadership Lab in the past four years. That's nearly 40% of our tribe globally.
Finally, our organization was recently recognized for the fifth consecutive year by WorldBlu as one of the most freedom-centered workplaces for high levels of innovation, accountability, and transparency. Strategic driver number five, operational excellence. This initiative includes the continuous improvement of resources, systems, and processes in order to help offset rising costs to protect our operating margin. We continue to make progress on several initiatives we planned for fiscal 2015. We made additional progress in the implementation of the upgraded ERP system in EMEA, and in June, we went live with our new system at our Italy branch. I mentioned in the past that one of the projects we planned in fiscal year 2015 under the strategic initiative was to transition all 50 states to a lower VOC formula we launched in California in fiscal year 2014.
We continued working with our manufacturing partners on test production runs and preparations for the upcoming transition, but it will not occur this fiscal year. There are no negative ramifications as a result of this change to our plans, but the cost associated with implementing of these regulatory requirements will shift now into 2016. I will take a break now, and I will be happy to hand over to Jay, who will continue the review of our financials. Thanks, Jay.
Thank you, Garry. In addition to the information that we are presenting on this call today, we suggest that you review our Form 10-Q for our quarter, which we will file tomorrow. Let's first review our 50/30/20 rule. As you may recall, those are the measures we use to guide our business. The 50 represents our gross margin, which we target to be 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 to be at or below 30% of net sales. Finally, the 20 represents EBITDA. If our gross margin is at above the 50% and our cost of doing business is 30% or less, our EBITDA will be above our 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 web investor presentation, which is available on our investor relations website. Now we will look at our gross margin, the 50 in our 50/30/20 rule. Gross margin in the third quarter was 53.3% compared to the 51.4% in the prior fiscal year period. The increase in gross margin was primarily driven by decreased input costs in all three trading blocks. These favorable impacts were partially offset by the unfavorable impacts from foreign currency exchange rates in EMEA and increased discount and other allowances, primarily within our Americas and Asia Pacific trading blocks. Our cost of products sold, a closer look at input costs, we experienced a net favorable impact of 260 basis points from our major input costs.
This was driven primarily by changes in the cost of petroleum-based specialty chemicals and, to a lesser extent, aerosol cans. As we've shared with you in the past, it takes considerable time, approximately 90 to 120 days, for changing commodity prices to impact our cost of goods sold. All three trading blocks saw net positive impacts to gross margin due to lower crude oil prices, one of the primary feedstocks of our petroleum-based specialty chemicals. As Garry mentioned earlier, we've delayed the transition to all 50 states for the lower VOC formula of the multi-use products, which was launched in California during FY 2014. However, when we move forward with the implementation, we will expect to see some increase in our cost base.
Also impacting gross margin this quarter were improved warehousing, distribution, and inbound freight costs, which had a favorable impact on our gross margin of 30 basis points, mainly in the Americas. As you may recall, last year we had some elevated expenses due to a promotion in the U.S. that had special display configurations which resulted in increased storage and transportation costs. Transportation costs were also higher last year due to disruptions caused by adverse weather conditions. In addition, our gross margin improved by 30 basis points as a result of sales price increases implemented in the past 12 months in certain markets in Asia Pacific and EMEA. Gross margin had another positive impact of 30 basis points due to the combined effects of sales mix changes and other miscellaneous costs.
The overall favorable sales mix changes in the Americas and EMEA more than offset the additional costs associated with the write-off of defective goods in our Asian distributor markets. These improvements to margin were partially offset by increased promotional discounts and allowances, which had an unfavorable impact of 110 basis points in the third quarter. This was driven by increased advertising, promotional spending, and investment in the Americas and Asia Pacific. Changing foreign currency rates impact our net sales, but they also impact our gross margin. In the third quarter, foreign currency exchange rates adversely impacted our margin by 50 basis points. This is because in EMEA, our cost of goods are sourced almost entirely in GBP, while approximately 45% of our revenues are generated in EUR, with 30% GBP and the remaining 25% in USD.
Although the U.S. dollar strengthened against the GBP, the EUR deteriorated against the GBP compared to last year. As a result, revenues in total were worth less in GBP and thus decreasing our gross margin. The themes that we just discussed for the third quarter for gross margin also apply to our year-to-date results. Gross margin year-to-date was 52.5% compared to 51.6% in the prior year. Though we cannot control global market dynamics, such as the impact of foreign currency or the price of crude oil, we continue to be focused and deliberate in managing the rest of our business for maximum growth in our gross margin. Now on to the 30, our cost of doing business. In the third quarter, our cost of doing business was 35%, up from 34% the same period last year.
While our goal is to have our cost of doing business at or below 30% of net sales, we plan to continue investments in our new product development activities, brand protection, regulatory compliance, and quality assurance. As a result, we expect our cost of doing business to remain near current levels throughout the remainder of the year. We expect to move closer to our target of 30 over time as our revenues grow. Year-to-date, 76% of the total 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, and freight costs, the cost to get our products to our customers. Now, let's take a closer look at our expense items that lead to our final EBITDA measure. First, SG&A expenses.
In the third quarter, SG&A expense declined by $300,000 compared to the prior year to $26.6 million. As a percent of net sales, SG&A expense increased to 28.8% for the third quarter, compared to 28.1% last year. The decrease in the SG&A expenses was primarily attributable to the impact of $1.1 million from changes in foreign currency exchange rates and a decrease of $800,000 in professional service costs. The decrease in professional service costs primarily driven by lower legal fees associated with litigation and intellectual property protection activities, as well as reduced consulting services in our Americas and EMEA segments. These decreases were offset by a $1 million increase in employee-related costs, a $200,000 increase in costs for travel and meetings, and $400,000 of increased other miscellaneous expenses. Year-to-date, our SG&A expense increased by $1.2 million compared to the prior year to $81.4 million.
As a percentage of net sales, SG&A expense 28.5% year-to-date compared to 28.1% last year. Year-to-date, the increase in SG&A was primarily attributable to higher employee-related costs, which increased by $2.2 million compared to the prior year period. These increases were primarily due to increased headcount and annual merit increases implemented in the first quarter and were partially offset by lower earned incentive compensation accruals. Contributing to the increase in SG&A expense was travel and meeting expenses in support of our strategic initiatives, which increased $700,000 compared to the prior year. Depreciation expense increased $400,000 compared to last year, primarily due to our increased investments in systems. Other miscellaneous expenses increased $400,000.
These increases were partially offset by a $1.7 million impact due to changes in foreign currency exchange rates, as well as $800,000 decrease in professional service costs associated with litigation, intellectual property protection activities, and general consulting services in our Americas and EMEA trading blocks. We continued our investment in innovation and renovation by investing $2.2 million in the third quarter and $5.5 million year-to-date in research and development activities, which is up from $2 million and $4.4 million in the same periods last year. Advertising and sales promotion expense decreased by 15% in the third quarter to $5.5 million compared to the prior year quarter. As a percentage of sales, A&P investment decreased to 6% in the third quarter compared to 6.8% last year.
The decrease in advertising and sales promotion during the third quarter was primarily due to lower level of promotional programs and marketing support in EMEA and Asia Pacific, which was offset by increased promotional activities in the Americas trading block. Changes in foreign currency exchange rates had a positive impact of $300,000 on A&P expense in the third quarter. Year-to-date, advertising and sales promotion expense decreased by 6% to $16.9 million compared to the prior year. As a percentage of sales, A&P investment decreased to 5.9% compared to 6.3% in the prior year period. The decrease in advertising and sales expense year-to-date was primarily due to a lower level of promotional programs and marketing support in EMEA. Changes in foreign currency exchange rates had a positive impact of $400,000 on our A&P investment during our year-to-date period.
As a reminder, it is common for advertising and sales promotion expense to fluctuate period to period based on the type of marketing activity or promotion we employ. The amortization of intangible assets increased by $100,000 to $800,000 in the third quarter of this year. Year-to-date, such expenses increased by $400,000 to $2.3 million, primarily to our intangibles that we acquired in the GT85 acquisition completed earlier this year. Total expenses in the third quarter were $32.9 million versus $34 million in the third quarter last year. Operating income in the third quarter was $16.4 million compared to $15.1 million in the prior year quarter, and year-to-date total operating expenses were $106 million compared to $102 million for the same period last year. This resulted in year-to-date operating income of $49.6 million versus $47.1 million last fiscal year.
EBITDA, the last of our 50-30-20 measures, was 19% of net sales in the third quarter, up from 17% in the prior year period. Year-to-date, EBITDA was at 18% of net sales and flat compared to last year. We target EBITDA of 20% but expect variations from time to time as sales, A&P investment, and other expenses fluctuate with the timing of our activities. Our EBITDA percentage is also affected by the investments we make for future growth. Well, that completes the discussion on our operating items for the current quarter and year-to-date. I'll quickly review our other non-operating items. Interest income and interest expense in total remained relatively constant in both the third quarter and year-to-date periods. Other expenses increased by $400,000 in the third quarter and $1.3 million year-to-date.
These increases were primarily due to higher foreign currency exchange losses as a result of the significant fluctuations in foreign currency exchange rates, primarily the euro against the pound sterling. The provision for income tax was 30.2% in the third quarter and 30.1% year-to-date. This is compared to 30.4% and 30.6% in the prior year periods. The lower tax rate is primarily driven by the portion of the company's earnings from foreign operations, which are taxed at decreasing rates. Net income in the third quarter was $11 million, versus $10.4 million in the prior year quarter. Changes in foreign currency rates had an unfavorable impact of $500,000 on the translation of our consolidated results this quarter. On a constant currency basis, net income would have increased by $1.1 million in the third quarter.
Our diluted earnings per common share were $0.75 in the third quarter, compared to $0.69 in the prior year quarter. Diluted shares outstanding decreased to 14.6 million shares, down from 15.1 million shares last year. Year-to-date net income was $33.1 million, compared to $32.2 million in the prior year period. Changes in foreign currency exchange rates had an unfavorable impact of $800,000 on the translation of our year-to-date consolidated results. On a constant currency basis, net income would have increased by $1.7 million in the year-to-date period. Diluted earnings per common share were $2.24 year-to-date, compared to $2.10 in the prior year period. Diluted shares outstanding decreased to 14.7 million shares from 15.2 million shares in the same period last year. Let's take a look at our balance sheet at May 31st. Our balance sheet and liquidity remain strong.
At the end of the third quarter, our cash balance was $46.9 million, and we had $48.3 million in short-term investments, which consists of time deposits held in money center banks. During the quarter, we amended our line of credit agreement with Bank of America to extend the maturity date of our revolving credit facility to 2020. It increased the revolving commitment to $150 million and to revise the financial covenants. Other changes to the credit agreement now permit us to classify draws on the line of credit as long-term, provided certain conditions are met. You will see this classification change on our balance sheet for the current quarter. In the third quarter, we borrowed an additional $5 million on our revolving line of credit. As a result, our debt outstanding is $108 million at the end of the period.
The $5 million increase in the line of credit balance during the third quarter was used for share repurchases. A quick word about capital allocation. We continue to return capital to shareholders through regular dividends and share repurchases. On June 23rd, the board of directors declared a regular quarterly cash dividend of $0.38 per share payable July 31st, 2015, to stockholders of record at the close of business on July 17th, 2015. Based on today's closing price of $88.82, the annualized dividend yield would be 1.7%. During the third quarter, we acquired approximately 136,000 shares of our stock at a total cost of $11.3 million. This plan, which was approved in October of 2014, became effective March 1st, 2015, and it provides authorization to acquire up to $75 million of the company's outstanding shares through the plan's end date August 2016. That completes the financial review.
More information will be available on our Form 10-Q, which we'll file tomorrow. Thank you so much. Now back to Garry.
Thanks, Jay. Now let's take a look at our view for the remainder of fiscal 2015. We've updated our full year 2015 guidance. It reflects the impact of foreign currency exchange movements, as well as the macroeconomic and political challenges in our European markets, particularly in Russia and Ukraine, as well as the quality issues identified in Asia Pacific. This guidance does not include any future acquisitions or divestiture activities and is based on recent foreign currency exchange rates. We expect our fiscal year net sales results to be in the range of $383 million-$390 million, which will mean either flat or growth of up to 2%. We project gross margin to be better than 52%. We expect our global advertising and promotional investment to be in the range of 6%-7% of net sales.
We expect net income of between $44.5 million and $45.4 million, which would achieve EPS of between $3.03 and $3.09, assuming 14.7 million weighted average shares outstanding. In summary, in closing, our business continues to perform well. Foreign currency exchange headwinds will continue to impact our reported results, but we believe if we remain focused on our long-term goals, we will navigate this environment just as we've done in the past. In summary, what did you hear from us on this call? You heard that the Americas performed very well in the third quarter with a 10% growth rate overall in revenue. You heard that Asia Pacific is on track for a great year. Despite a minor hiccup in the quarter, they were up 9% year-to-date.
You heard that EMEA's base business is strong, but the reported sales continue to be impacted by significant currency headwinds and political and economic instability in Eastern Europe. You heard that the WD-40 Specialist product line continues to perform well with a global growth rate of 26% in the third quarter. You heard that crude oil costs going down continues to be a tailwind, and we are seeing the positive impact of lower input costs in our gross margin. You heard that later this month, we are launching our new delivery system for WD-40 Multi-Use Product, and that is designed to make the hard-to-reach easy to reach. You've heard that we continue to return capital to our stockholders and that we've begun executing repurchases under our new $75 million plan during the third quarter.
You heard that we amended our line of credit agreement, which extended the maturity date of our revolving credit facility to 2020, increasing the line to $150 million and revised financial covenants. In closing, I'd like to share a quote with you from Mike Gafka. "To be successful, you must accept all challenges that come your way. You can't just accept the ones you like." Thank you for joining us on the call today, and we'll be happy to take any questions.
Ladies and gentlemen, if you would like to register a question, please press *1 on your telephone keypad. Please make sure that your mute function is turned off to allow your signal to reach our equipment. If your question has been answered and you would like to withdraw your registration, please press *2 on your telephone keypad. One moment, please, for the first question. Our first question comes from the line of Linda Bolton-Weiser with B. Riley & Company.
Hi, guys. How are you doing?
Good, Linda. How are you?
Hi, Linda.
First off, I guess just a question on Eastern Europe and the weakness you're seeing there now. Did I understand you correctly that you said you only posted some sales in Russia in the last month of the quarter?
Right.
Yeah. Last quarter, I think that the distributor markets in EMEA were up 9%. I'm wondering how did this weakness, it just caught you by surprise, or it took time to settle into the market? I'm just wondering how embedded this weakness is, being that it was still pretty strong last quarter. Also, can you quantify it? Like is Russian and Ukraine, what % of the EMEA distributor markets would that be roughly?
Okay. Firstly, we've been seeing the activity in Russia and the Ukraine. I think we've mentioned it a couple of times. What we saw was a period of time where inventory in the market is being absorbed. We think that right now we're starting to see inventory coming back into the market from us. We do about 10 million cans a year in Russia. I guess it's about a $10 million business, plus or minus, if that's real rough. That's about the extent of it. The Ukraine is a lot less. The rest of the distributor markets in Europe are still performing well. In fact, you're right. They grew last quarter. Excluding the Ukraine and Russian business, they grew in the third quarter of this year. It's really isolated around the Russian economy. Inflation there went through the roof.
It took some time for it to settle. We believe it will settle down. We'll see us back to some type of normalized business in the next couple of quarters. It's just a hiccup. I'm not sure, Linda, it took us by surprise. I think it just was something that we didn't understand the extent of the timing of it. We're back on track again, I think, as long as Russia continues to improve.
Did you take any price increases there in Russia that maybe is making this be a temporary situation, and then when the price increases settle in, the growth will return?
No, we didn't. The ruble was deteriorated against the dollar. We sell into Russia in US dollars. Our marketing distributors there did take some pricing. We also helped support that with some promotional activities of free goods to sort of minimize that. Yes, the price has increased, but it's truly because of the ruble.
Okay, thanks. Just kind of seeing what's happening in China, I think people are bracing themselves for slower overall economic growth in China. Is that something that you're seeing at all, or do you suspect that that could happen there as well?
China is going to continue to be a bumpy road. The thing that we love about China is that there are a lot more people who don't know us than know us. Sure, if it's growing at 8%-10%, we do better. We see China long term as a large market. Since opening, we've taken the revenues from a couple of million to $15 million or so. We're growing at 10% this year. We think we'll see growth again next year. It'll bump around quarter to quarter, it's a journey that we're on and we're continuing on the path.
Okay. Your new product here, that's going to be launched here. Did you ship any of that at all in the third fiscal quarter, or will the shipments begin in the next quarter, in the fourth quarter?
They're all in this quarter. There was none in Q3. They started shipping this week.
Okay.
That's why you couldn't find them in the stores.
Okay. I haven't looked at all the pictures here, but the bendy neck looks interesting, but it looks actually bigger than the straw application. Is it for a different type of application? I assume this would be purchased by the user in addition to the straw type application. Is that true?
Yes. Basically, the extended tube on this is about eight inches in length, and it's completely flexible. What it's meant to do is enable the delivery of our product to places that are very hard to get at with a normal can. Firstly, without a straw, it's impossible to get there. With our Smart Straw, it can get there. Our heavy-end users, particularly in automotive, industrial, one of the big feedback points we got from our research over the past couple of years was, we'd love to be able to deliver the product to these hard-to-get places easier. It's a bigger can. It's designed to appeal to our heavy-end users, and we believe that it will be a can that they will have on the shelf as well as the other. It has a higher price, obviously, because that delivery system costs more.
There's been a lot of innovation, a lot of work gone into it. We have a patent on it. We're excited to take it to the end users, and you should see displays initially in store within the next week or so. The first stores will be Home Depot and other retails will follow soon after, or other supply chains will follow soon after.
How fast do you think you can ramp up the distribution reach of it in the U.S.? Do you think you'll get 80% there by the end of next fiscal year or even quicker?
Oh, I don't know. I think one of the things that we're working on now is demand. One of the key components of this is actually manually assembled right now. Our supply partners are in the late stage of putting in automated assembly equipment. That's a bit of a pacing item. I'd say by the end of this year, we will have distribution in four or five of our major supply channels, we'll see where we go from there. It'll take time. Of course, after that, the world is to come. You know how we do things, Linda. We're deliberate, and we're not here as a bottle rocket. We're here to grow our revenue with our end users over time.
It'll be interesting to see, we're excited to see how it moves off the shelf when it hits in a very attractive display configuration in the next couple of weeks.
Great. Can I just ask you, in terms of the VOC implementation, is there any way to quantify how much in those costs will be shifted to FY 2016? Is that $1 million or a couple million or any quantification?
We haven't shared that yet.
Okay. Just finally, the quality issue here that you had with the one SKU in Asia. I know these things happen and everything, you have something in Canada that happened, I think about a year ago as well.
Totally unrelated. Totally unrelated.
Right.
Totally un-
Right. I'm wondering if there needs to be some improvement or modification of your monitoring of the outsourced suppliers when they're manufacturing the components and the product.
Thank you for the question. It was impossible to do that. The product that we manufactured passed all of our quality control stringent testing as it left, and the issue was not apparent until about three weeks after the product shipped. It took that long for the extended tube to actually disengage from the under of the valve. It was really intriguing for us. We were fortunate enough that this happened while product was on boats shipping across the Pacific Ocean. When we then tested it on arrival, which we do at our distributors, we identified the problem. We don't know how we would've identified this problem other than the way we did, and I'm extremely proud of our quality people and the way they were able to actually catch this before it even got into the market.
It only got to the actual distributor warehouses. They did a great job.
Oh, okay. No end user ended up with this problem in their hand?
Correct.
Oh, okay. Great. Okay. I guess that's pretty much it for me. Thank you very much.
Thanks, Linda.