What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-10-24 compared with 2021-10-22 · 160 added, 146 removed, 911 unchanged (25% of the section changed)

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Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .

Directors, Executive Officers and Corporate Governance

Certain information required by this item is set forth in sections under the headings “Security Ownership of Directors and Executive Officers,” “Nominees for Election as Directors,” and “Audit Committee – Related Party Transactions Review and Oversight” in our Proxy Statement to be filed with the Securities and Exchange Commission in connection with the 2021 Annual Meeting of Stockholders on December 14, 2021 (“Proxy Statement”), which information is incorporated by reference herein.

Additional information concerning executive officers of the Registrant required by this item is included in this report following Item 4 of Part I under the heading, "Executive Officers of the Registrant."

Certain information required by this item is set forth in sections under the headings “Security Ownership of Certain Beneficial Owners and Management,” “Director Nominees,” and “Related Party Transactions Review and Oversight” in our Proxy Statement to be filed with the Securities and Exchange Commission in connection with the 2022 Annual Meeting of Stockholders on December 13, 2022 (“Proxy Statement”), which information is incorporated by reference herein.

Information regarding executive officers is also incorporated by reference to the “Information Regarding our Executive Officers” section of our Proxy Statement.

The Registrant has a code of ethics (as defined in Item 406 of Regulation S-K under the Exchange Act) applicable to its principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions.

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Executive Compensation

Information required by this item is incorporated by reference to sections of the Proxy Statement under the headings “Board of Directors Compensation” (and the table following such section), “Compensation Committee - Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation” (and the compensation tables following such section), “Supplemental Death Benefit Plans and Supplemental Insurance Benefits,” “Change of Control Severance Agreements” and “CEO Pay Ratio.”

Information required by this item is incorporated by reference to sections of the Proxy Statement under the headings “Director Compensation” (and the table following such section), “Compensation Committee - Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation” (and the compensation tables following such section), “Supplemental Death Benefit Plans and Supplemental Insurance Benefits,” “Change of Control Severance Agreements” and “CEO Pay Ratio.”

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain information required by this item is incorporated by reference to the Proxy Statement under the headings “Principal Security Holders” and “Security Ownership of Directors and Executive Officers.”

Certain information required by this item is incorporated by reference to the Proxy Statement under the heading “Security Ownership of Certain Beneficial Owners and Management.”

Equity Compensation Plan Information

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Documents filed as part of this report

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

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WD-40 Company 2016 Stock Incentive Plan, incorporated by reference from the Registrant’s Proxy Statement filed November 3, 2016, Appendix A thereto.

WD-40 Directors’ Compensation Policy and Election Plan dated October 12, 2021 .

WD-40 Directors’ Compensation Policy and Election Plan dated October 12, 2021, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2021, Exhibit 10(b) thereto .

Form of Indemnity Agreement between the Registrant and its executive officers and directors, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2013, Exhibit 10(d) thereto.

Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal years 2019 and 2020, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(d) thereto.

Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal years 2019 and 2020, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(e) thereto.

Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2020, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(d) thereto.

Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 2020, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(e) thereto.

Form of Deferred Performance Unit Award Agreement for grants of Deferred Performance Units to Executive Officers incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(f) thereto.

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Form of Performance Share Unit Restricted Stock Award Agreement for grants of Performance Share Units to Executive Officers in fiscal year 2021, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(i) thereto.

Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2022, , incorporated by reference from the Registrant’s Form 10-K filed October 22, 2021, Exhibit 10(j) thereto.

Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 2022, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2021, Exhibit 10(k) thereto.

Form of Performance Share Unit Restricted Stock Award Agreement for grants of Performance Share Units to Executive Officers in fiscal year 2022, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2021, Exhibit 10(l) thereto.

Transition and Release Agreement, dated March 11, 2022, between WD-40 Company and Garry O.

Ridge, incorporated by reference from the Registrant’s Form 8-K filed March 16, 2022, Exhibit 10.1 thereto.

FY 2022 Restricted Stock Unit Award Agreement, dated March 11, 2022, between WD-40 Company and Garry O.

Ridge, incorporated by reference from the Registrant’s Form 8-K filed March 16, 2022, Exhibit 10.2 thereto.

Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2023.

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Lindeman dated December 8, 2020 incorporated by reference from the Registrant's Form 10-Q filed April 8, 2021, Exhibit 10(e) thereto.

Change of Control Severance Agreement between WD-40 Company and Phenix Q.

Kiamilev dated December 13, 2021, incorporated by reference from the Registrant’s Form 10-Q filed April 7, 2022, Exhibit 10(b) thereto .

Credit Agreement dated March 16, 2020 among WD-40 Company and Bank of America, incorporated by reference from the Registrant’s Form 8-K filed March 20, 2020, Exhibit 10(a) thereto .

Form of Acknowledgement Letter Agreement dated April 8, 2020 among WD-40 Company and Bank of America, incorporated by reference from the Registrant’s Form 10-Q filed April 9, 2020, Exhibit 10(d) thereto .

Libor Transition Agreement dated November 29, 2021 among the Company and Bank of America, N.A., incorporated by reference from the Registrant's Form 8-K filed December 1, 2021, Exhibit 10(a) thereto .

First Amendment to Credit Agreement dated September 30, 2020 among WD-40 Company and Bank of America, N.A., incorporated by reference from the Registrant’s Form 8-K filed October 6, 2020, Exhibit 10(a) thereto.

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The following materials from WD-40 Company’s Annual report on Form 10-K for the fiscal year ended August 31, 2022 formatted in iXBRL (Inline eXtensible Business Reporting Language):

(i) the Consolidated Statement of Operations, (ii) the Consolidated Statement of Comprehensive Income, (ii) the Consolidated Statement of Cash Flows, (iv) the Consolidated Balance Sheet, (v) the Consolidated Statement of Shareholders’ Equity, and (vi) Notes to the Consolidated Financial Statements.

(i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (ii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Balance Sheet, (v) the Consolidated Statements of Shareholders’ Equity, and (vi) Notes to the Consolidated Financial Statements.

The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2022, formatted in iXBRL and contained in Exhibit 101.

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Treasurer and Chief Financial Officer

(Principal Financial Officer)

October 24, 2022

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ STEVEN A.

Chief Executive Officer and Director

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/s/ DANIEL T.

/s/ GRACIELA I.

CARTER, Director

MONTEAGUDO, Director

October 24, 2022

/s/ MELISSA CLAASSEN

MELISSA CLAASSEN, Director

October 22, 2021

ETCHART, Director

October 22, 2021

LEE, Director

PENDARVIS, Director

October 24, 2022

/s/ TREVOR I.

MIHALIK, Director

October 24, 2022

/s/ GRACIELA I.

MONTEAGUDO, Director

ETCHART, Director

RIDGE, Director

October 24, 2022

PENDARVIS, Director

October 24, 2022

/s/ GREGORY A.

LEE, Director

SANDFORT, Director

October 24, 2022

/s/ EDWARD O.

MAGEE, JR., Director

SAUNDERS, Director

October 24, 2022

/s/ TREVOR I.

MIHALIK, Director

October 24, 2022

Report of Independent Reg istered Public Accounting Firm

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of WD-40 Company and its subsidiaries (the “Company”) as of August 31, 2021 and 2020, and the related consolidated statements of operations, of comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended August 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of WD-40 Company and its subsidiaries (the “Company”) as of August 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive income, of shareholders'

equity and of cash flows for each of the three years in the period ended August 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of August 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Rebates - Cooperative Marketing Program Accruals

Rebates – Certain Cooperative Marketing Program Accruals

As described in Notes 2 and 11 to the consolidated financial statements, sales are recorded net of allowances for damaged goods and other sales returns, sales incentives, trade promotions and cash discounts.

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The Company had an $8.7 million balance in rebate/other discount liabilities as of August 31, 2022, which are included in accrued liabilities on the Company’s consolidated balance sheets, and recorded approximately $32.8 million in rebates/other discounts as a reduction to sales during fiscal year 2022.

The principal considerations for our determination that performing procedures relating to the cooperative marketing program accruals is a critical audit matter are (i) the significant judgment by management to estimate the cooperative marketing program accruals, which in turn led to a high degree of auditor judgment in performing procedures to evaluate the status of trade promotion activities within the cooperative marketing program accruals, and (ii) the high level of audit effort and subjectivity in performing procedures to evaluate the current and past trade promotion spending patterns and the status of trade promotion activities used to determine the cooperative marketing program accruals.

The principal considerations for our determination that performing procedures relating to certain cooperative marketing program accruals is a critical audit matter are (i) the significant judgment by management to estimate certain cooperative marketing program accruals, which in turn led to a high degree of auditor judgment in performing procedures to evaluate the status of trade promotion activities within certain cooperative marketing program accruals, and (ii) the high level of audit effort and subjectivity in performing procedures to evaluate the current and past trade promotion spending patterns and the status of trade promotion activities used to determine certain cooperative marketing program accruals.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the estimation of cooperative marketing program accruals, which related to controls over the current and past trade promotion spending patterns and the status of trade promotion activities used in management’s estimate.

These procedures also included, among others, (i) testing management’s process to estimate the cooperative marketing program accruals, including evaluating the appropriateness of the expected value method, testing the completeness, accuracy and relevance of underlying data used, including the current and past trade promotion spending patterns, and evaluating the reasonableness of the status of the trade promotion activities assumption considering the overall business environment, and (ii) evaluating the completeness of offers made to customers for potential promotional activities, which may require accrual as of period end.

These procedures also included, among others, (i) testing management’s process to estimate certain cooperative marketing program accruals, including evaluating the appropriateness of the expected value method, testing the completeness, accuracy and relevance of underlying data used, including the current and past trade promotion spending patterns, and evaluating the reasonableness of the status of the trade promotion activities assumption considering the overall business environment, and (ii) evaluating the completeness of offers made to customers for potential promotional activities, which may require accrual as of period end.

/s/ PricewaterhouseCoopers LLP

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Accumulated other comprehensive income (loss)

Common stock held in treasury, at cost ― 6,147,899 shares

at both August 31, 2021 and 2020

Common stock held in treasury, at cost ― 6,286,461 and 6,147,899

shares at August 31, 2022 and 2021, respectively

Total shareholders'

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Cash dividends ($ 2.62 per share)

Acquisition of treasury stock

Repurchases of common stock

Foreign currency translation adjustment

Cumulative effect of change in accounting principle

Balance at August 31, 2020

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Cash dividends ($ 2.78 per share)

Acquisition of treasury stock

Foreign currency translation adjustment

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Cash dividends ($ 3.06 per share)

Repurchases of common stock

Foreign currency translation adjustment

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Proceeds from sales of property and equipment

Maturities of short-term investments

Net cash provided by (used in) investing activities

Net cash used in investing activities

Financing activities:

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Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

WD-40 Company (“the Company”), based in San Diego, California, is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world.

The Company markets a wide range of maintenance products and its homecare and cleaning products under the following well-known brands:

WD-40®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava® and Solvol®.

Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKE® product lines.

WD-40 Company (the “Company”), incorporated in Delaware and based in San Diego, California, is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world.

The Company owns a wide range of well-known brands that include maintenance products and homecare and cleaning products:

WD-40® Multi-Use Product, WD-40 Specialist®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava® and Solvol®.

The Company’s products are sold in various locations around the world.

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COVID-19 Considerations

The COVID-19 pandemic has adversely impacted global economic conditions and has contributed to significant volatility in financial markets beginning in early calendar year 2020, as described in the “ Impact of COVID-19 on Our Business ” section included in Part II – Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Although the Company’s current estimates contemplate current conditions, the inputs into certain of the Company’s significant and critical accounting estimates include judgments and assumptions about the economic implications of the COVID-19 pandemic and how management expects them to change in the future, as appropriate.

The COVID-19 pandemic has adversely impacted global economic conditions and has contributed to significant volatility in financial markets beginning in early calendar year 2020.

Although the Company’s current estimates consider current conditions, the inputs into certain of the Company’s significant and critical accounting estimates include judgments and assumptions about the economic implications of the COVID-19 pandemic and how management expects them to change in the future, as appropriate.

It is reasonably possible that actual results experienced may differ materially from the Company’s estimates in future periods, which could materially affect our results of operations and financial condition.

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Property and equipment is stated at cost.

Depreciation is computed using the straight-line method based upon estimated useful lives of ten to forty years for buildings and improvements, three to fifteen years for machinery and equipment, three to five years for vehicles, three to ten years for furniture and fixtures, three to seven years for R&D lab equipment and office equipment and three to five years for software and computer equipment.

The useful lives of major on-premises information system installations such as implementations of enterprise resource planning (“ERP”) systems are determined on an individual basis.

Depreciation expense totaled $ 6.9 million, $ 5.6 million and $ 5.5 million for fiscal years 2022, 2021 and 2020, respectively.

These amounts include equipment depreciation expense which is recognized as cost of products sold and totaled $ 2.5 million in fiscal year 2022, $ 1.2 million in fiscal year 2021 and $ 1.4 million in fiscal year 2020.

Internal-Use Software and Cloud Computing Arrangements

The Company capitalizes costs related to computer software obtained or developed for internal use.

Software obtained for internal use has generally been enterprise-level business and finance software that the Company customizes to meet its specific operational needs.

Costs incurred in the application development phase are capitalized and amortized over their useful lives, which are generally three to five years .

Costs incurred in the application development phase are capitalized as property and equipment in the Company’s consolidated balance sheets and are depreciated using the straight-line method over their estimated useful lives.

The Company also enters into certain cloud-based software hosting arrangements.

In evaluating whether cloud computing arrangements include an embedded internal-use software license, management considers whether the Company has the contractual right to take possession of the software during the hosting period without significant penalty and whether it is feasible to either i) run the software on the Company’s hardware, or ii) contract with another party unrelated to the vendor to host the software.

If management determines a cloud computing arrangement includes an embedded software license, the Company accounts for the software license element of the arrangement consistent with the acquisition of other internal-use software licenses.

If a cloud computing arrangement does not include a software license, the Company accounts for the arrangement as a service contract.

For such cloud computing service contracts, the Company capitalizes certain implementation costs such as the configuration, coding and customization of the software.

Capitalizable cloud computing arrangement costs are generally consistent with those incurred during the application development stage for internal-use software, however, these costs are capitalized as “other assets” in the Company’s consolidated balance sheets.

The Company amortizes these capitalized cloud computing implementation costs into selling, general and administrative expenses using the straight-line method over the fixed, non-cancellable term of the associated hosting arrangement, plus any reasonably certain renewal periods.

The useful lives of the Company’s internal-use software and capitalized cloud computing implementation costs are generally three to five years .

However, the useful lives of major information system installations such as implementations of enterprise resource planning (“ERP”) systems are determined on an individual basis and may exceed five years depending on the estimated period of use.

The Company applies the same impairment model to both internal-use software and capitalized cloud computing implementation costs.

The Company leases real estate for its regional sales offices, a research and development facility, and offices located at its international subsidiaries and branch locations.

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To determine if a contract contains a lease, the Company assesses its contracts and determines if there is an identified asset for which the Company has obtained the right to control, as defined in ASC 842.

Right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of lease payments over the lease term with lease expense recognized over the term of the lease.

Right-of-use (“ROU”) assets and lease liabilities are recognized based on the present

value of lease payments over the lease term with lease expense recognized over the term of the lease.

As the Company’s leases typically do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability using its estimated secured incremental borrowing rate at the lease commencement date based on the lease term and the currency of the lease on a collateralized basis.

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The Company assesses possible impairments to goodwill at least annually during its second fiscal quarter and otherwise when events or changes in circumstances indicate that an impairment condition may exist.

In performing the annual impairment

test of its goodwill, the Company considers the fair value concepts of a market participant and the highest and best use for its intangible assets.

In performing the annual impairment test of its goodwill, the Company considers the fair value concepts of a market participant and the highest and best use for its intangible assets.

In addition to the annual impairment test, goodwill is evaluated each reporting period to determine whether events and circumstances would more likely than not reduce the fair value of a reporting unit below its carrying value.

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No goodwill impairments were identified by the Company during fiscal years 2022, 2021 or 2020.

Long-lived Assets

Subsequent Measurement of Long-lived Assets

The Company’s long-lived assets consist of property and equipment and definite-lived intangible assets.

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As of August 31, 2022, the Company had no assets or liabilities that are measured at fair value in the financial statements on a recurring basis, with the exception of the foreign currency forward contracts, which are classified as Level 2 within the fair value hierarchy.

The carrying values of cash equivalents and short-term borrowings are recorded at cost, which approximates their fair values, primarily due to their short-term nature.

The carrying values of cash equivalents and short-term borrowings are recorded at

cost, which approximates their fair values, primarily due to their short-term nature.

In addition, the carrying value of borrowings held under the Company’s revolving credit facility approximates fair value, based on Level 2 inputs, due to the variable nature of underlying interest rates, which generally reflect market conditions .

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Historically, the Company has been able to obtain adequate supplies of these materials which are used in the production of its maintenance products and homecare and cleaning products in a timely manner from existing sources and has been able to access adequate production capacity at its third-party manufacturers .

However, during the COVID-19 pandemic, the Company has experienced challenges within its supply chain, but particularly in its Americas supply chain.

These challenges include general aerosol production capacity constraints primarily due to increased demand at the third-party manufacturers that the Company utilizes as well as shortages of certain raw materials.

However, during the COVID-19 pandemic, the Company has experienced challenges within its supply chain.

Insurance Coverage

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Selling, General and Administrative Expenses

Selling, general and administrative expenses include costs related to selling the Company’s products, such as the cost of the sales force and related sales and broker commissions;

Selling, general and administrative expenses include costs related to selling the Company’s products, such as the cost of the sales force and broker commissions;

shipping and handling costs paid to third-party companies to distribute finished goods from the Company’s third-party contract manufacturers and distribution centers to its customers;

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The Company is required to make assertions on whether its foreign subsidiaries will invest their undistributed earnings indefinitely and these assertions are based on the capital needs of the foreign subsidiaries.

Generally, unremitted earnings of the Company’s foreign subsidiaries are not considered to be indefinitely reinvested.

However, there are exceptions regarding the Company’s newly formed subsidiary in Mexico as well as specific statutory remittance restrictions imposed on the Company’s China subsidiary.

Generally, unremitted earnings of the

Company’s foreign subsidiaries are not considered to be indefinitely reinvested.

However, there is an exception regarding specific statutory remittance restrictions imposed on the Company’s China subsidiary.

Costs associated with repatriating unremitted foreign earnings, including U.S.

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Gains or losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity’s functional currency) are included as other income in the Company’s consolidated statements of operations.

The Company had $ 0.3 million in net losses and $ 0.4 million and $ 0.6 million of net gains in foreign currency transactions in fiscal years 2021, 2020 and 2019, respectively.

The Company had $ 1.1 million and $ 0.3 million in net losses, and $ 0.4 million of net gains in foreign currency transactions in fiscal years 2022, 2021 and 2020, respectively.

In the normal course of business, the Company employs established policies and procedures to manage its exposure to fluctuations in foreign currency exchange rates.

The Company utilizes foreign currency forward contracts to limit its exposure to net asset balances held in non-functional currencies, primarily at its U.K.

The Company regularly monitors its

foreign currency exchange rate exposures to ensure the overall effectiveness of its foreign currency hedge positions.

The Company regularly monitors its foreign currency exchange rate exposures to ensure the overall effectiveness of its foreign currency hedge positions.

While the Company engages in foreign currency hedging activity to reduce its risk, for accounting purposes, none of its foreign currency forward contracts are designated as hedges.

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At August 31, 2022, the Company had a notional amount of $ 5.8 million outstanding in foreign currency forward contracts, which matured in September 2022 .

Unrealized net gains and losses related to foreign currency forward contracts were

no t significant at August 31, 2021 or 2020.

Unrealized net gains and losses related to foreign currency forward contracts were no t significant at August 31, 2022 or 2021.

Realized net losses related to foreign currency forward contracts were no t significant for the fiscal years ended August 31, 2022 and 2021.

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The Company accounts for stock-based equity awards exchanged for employee and non-employee director services in accordance with the authoritative guidance for share-based payments.

Stock-based equity awards are measured at the grant date, based on the estimated fair value of the award, and are recognized as stock-based compensation expense on a straight-line basis over the requisite service period of the entire award, net of the impacts of award forfeitures as they occur.

The requisite service period is generally the maximum vesting period of the award.

Stock-based equity awards are measured at the estimated grant date fair value and expensed on a straight-line basis, net of forfeitures recognized as they occur, over the requisite service period.

The requisite service period of employee awards generally ranges from about one to three years, although awards of certain employees

may have shorter requisite service periods as a result of retirement, death and disability provisions.

Director awards vest immediately at the grant date.

Compensation expense related to the Company’s stock-based equity awards is recorded as selling, general and administrative expenses in the Company’s consolidated statements of operations.

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Recently Adopted Accounting Standards

The Company did not adopt any new accounting standards during its fiscal year 2021 that had a significant impact on its consolidated financial statements.

However, the adoption of new SEC guidance impacted certain of the Company's disclosure requirements.

In November 2020, the SEC adopted the final rule under SEC Release No.

33-10890, Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information, to modernize and simplify Management’s Discussion and Analysis and certain financial statement disclosure requirements.

These updates are part of the SEC’s broad disclosure effectiveness initiative intended to improve the content of SEC filings and simplify compliance for registrants.

The SEC also adopted the final rule under SEC Release No.

33-10825, Modernization of Regulation S-K Items 101, 103, and 105, in August 2020.

These amendments modernize the description of business, legal proceedings, and risk factor disclosure requirements, and were effective on November 9, 2020.

The Company updated its disclosures accordingly to comply with these amendments and these amendments do not impact the Company’s consolidated financial statements.

Recently Issued Accounting Standards

In December 2019, the FASB issued ASU No.

2019-12, “ Simplifying the Accounting for Income Taxes ” under ASC 740, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application.

2019-12, “ Simplifying the Accounting for Income Taxes ” under ASC 740, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and amended existing guidance to improve consistent application.

This guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year.

The Company has evaluated the potential impacts of this updated guidance , and it does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures .

The Company adopted this new guidance on September 1, 2021 , and the adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures

Inventories consisted of the following (in thousands):

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Finished goods

Property and Equipment

Property and Equipment and Capitalized Cloud-Based Software Implementation Costs

Property and equipment, net, consisted of the following (in thousands):

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Computer and office equipment

Internal-use software

Furniture and fixtures

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accumulated depreciation and amortization

At August 31, 2021, capital in progress on the Company’s consolidated balance sheets included $ 30.3 million associated with capital costs related to proprietary machinery and equipment for the Company’s next generation of delivery systems for its WD-40 Smart Straw ® products.

During fiscal year 2022, $ 22.1 million of this machinery and equipment was placed in service and thus the Company reclassified these amounts from capital in progress to machinery, equipment and vehicles.

As of August 31, 2022 and 2021, the Company’s consolidated balance sheets included $ 6.5 million and $ 2.6 million, respectively, of capitalized cloud-based implementation costs recorded as other assets within the Company’s consolidated balance sheets.

Accumulated amortization associated with these assets were $ 0.5 million as of August 31, 2022, and were no t significant as of August 31, 2021.

Amortization expense associated with these assets were no t significant during the fiscal years 2022 or 2021.

Goodwill and Other Intangible Assets

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During the second quarter of fiscal year 2022, the Company performed its annual goodwill impairment test.

The annual goodwill impairment test was performed at the reporting unit level as required by the authoritative guidance as of the Company’s most recent goodwill impairment testing date, December 1, 2020.

The annual goodwill impairment test was performed at the reporting unit level as of the Company’s most recent goodwill impairment testing date, December 1, 2021.

During the fiscal year 2022 annual goodwill impairment test, the Company performed a qualitative assessment of each reporting unit to determine whether it was more likely than not that the fair value of a reporting unit was less than its carrying amount.

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and (5) events affecting the Company’s reporting units, such as a change in the composition of net assets or any expected dispositions.

Based on the results of this qualitative assessment, the Company determined that it is more likely than not that the carrying value of each of its reporting units is less than its fair value as of the goodwill impairment testing date and, thus, a quantitative analysis was not required.

The estimated fair value of each of the Company’s reporting units exceeded their respective carrying values so significantly that an impairment charge to the Company’s goodwill balances is remote.

The Company concluded that there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill subsequent to December 1, 2020 through August 31, 2021.

To date, there have been no impairment losses identified and recorded related to the Company’s goodwill .

Based on the results of this qualitative assessment, the Company determined that the estimated fair value of each of the Company’s reporting units exceeded their respective carrying values so significantly that an impairment charge to the Company’s goodwill balances is remote and, thus, a quantitative analysis was not required.

The Company also concluded that there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill subsequent to December 1, 2021 through August 31, 2022.

As a result, the Company concluded that no impairment of its goodwill existed as of August 31, 2022.To date, there have been no impairment losses identified and recorded related to the Company’s goodwill .

Definite-lived Intangible Assets

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The Company uses the unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate in the currency of the lease.

As of August 31, 2021, finance leases were not significant and all leases recorded on the Company’s consolidated balances sheets were operating leases.

As of August 31, 2021 and 2022, finance leases were not significant and all leases recorded on the Company’s consolidated balances sheets were operating leases.

Residual value guarantees, restrictions, covenants, sublease income, net gains or losses from sale and leaseback transactions, and transactions with related parties associated with leases are also not significant.

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This lease expense was included in selling, general and administrative expenses.

The Company recorded $ 0.6 million of lease expense classified within cost of products sold for the fiscal year ended August 31, 2021, and an insignificant amount for the fiscal year ended August 31, 2020.

The Company recorded $ 0.3 million of lease expense classified within cost of products sold for the fiscal year ended August 31, 2022, and $ 0.6 million for the fiscal year ended August 31, 2021.

During the fiscal year ended August 31, 2022 and 2021, the Company paid cash of $ 2.1 million and $ 2.0 million related to lease liabilities, respectively.

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As of August 31, 2021, the weighted-average remaining lease term was 6.7 years and the weighted-average discount rate was 2.8 % for the Company’s operating leases.

There were no leases that had not yet commenced as of August 31, 2021 that will create additional significant rights and obligations for the Company.

The Company had approximately $ 1.2 million of leases that commenced after August 31, 2022 that created rights and obligations to the Company.

These leases are not included in the following schedules.

Right-of-use assets and lease liabilities consisted of the following (in thousands):

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Total operating lease liabilities

(1) Current operating lease liabilities are classified in accrued liabilities on the Company’s condensed consolidated balance sheet.

(1) Current operating lease liabilities are classified in accrued liabilities on the Company’s consolidated balance sheets.

The Company’s maturities of its operating lease liabilities, including early termination and renewal options that management is reasonably certain to exercise, are as follows as of August 31, 2022 (in thousands):

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Note Purchase and Private Shelf Agreement

The Company holds borrowings under its Note Purchase and Private Shelf Agreement (the “Note Agreement”) by and among the Company, PGIM, Inc.

The Company holds borrowings under its Note Purchase and Private Shelf Agreement, as amended (the “Note Agreement”) by and among the Company, PGIM, Inc.

(“Prudential”), and certain affiliates and managed accounts of Prudential (the “Note Purchasers”).

The Note Agreement has been amended three times, most recently on September 30, 2020 (the “Third Amendment”).

The Third Amendment permitted the Company to enter into the first amendment of its existing amended and restated revolving credit agreement with Bank of America and also included certain conforming amendments to the credit agreement, including the revision of financial and restrictive covenants.

As of August 31, 2022, the Company had outstanding balances on its series A, B and C notes issued under this Note Agreement.

Credit Agreement

The Company’s Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America consists of a revolving commitment for borrowing by the Company up to $ 150.0 million with a sublimit of $ 100.0 million for WD-40 Company Limited, a wholly owned operating subsidiary of the Company for Europe, the Middle East, Africa and India.

On September 30, 2020, the Company entered into a First Amendment to Credit Agreement (the “First Amendment to Credit Agreement”) with Bank of America.

In addition to other non-material and technical amendments to the Credit Agreement, the First Amendment to Credit Agreement extended the maturity date from March 16, 2025 to September 30, 2025 , revised certain financial and restrictive covenants, increased the limitation amounts on other unsecured Indebtedness and Investments and adjusted the interest rates on subsequent borrowings under the Credit Agreement using a three-tier pricing approach tied to the Company’s Consolidated Leverage Ratio.

Capitalized terms not otherwise defined in this report have the meaning given to such terms in the Credit Agreement.

The Company’s Amended and Restated Credit Agreement, as amended (the “Credit Agreement”) with Bank of America, N.A., consists of a revolving commitment for borrowing by the Company up to $ 150.0 million with a sublimit of $ 100.0 million for WD-40 Company Limited, a wholly owned operating subsidiary of the Company for Europe, the Middle East, Africa and India.

On November 29, 2021, the Company entered into its most recent amendment to the Credit Agreement (the “LIBOR Amendment”) with Bank of America, N.A.

The LIBOR Amendment changed the Company’s index rates under the Credit Agreement for British Pound Sterling and U.S.

Dollar borrowings from the London Interbank Offered Rate as administered by ICE Benchmark Administration to the Sterling Overnight Index Average Reference Rate and the Bloomberg Short-term Bank Yield Index rate, respectively, as well as certain definitions and clarifications within the Credit Agreement to accommodate the change in index rates.

The impact of the LIBOR Amendment was insignificant to the Company’s consolidated financial statements.

Short-term and long-term borrowings under the Company’s Credit Agreement and Note Agreement consisted of the following (in thousands):

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Outstanding draws for which management has both the ability and intent to refinance with successive short-term borrowings for a period of at least twelve months are classified as long-term.

As of August 31, 2021, the entire balance on this facility is classified as long-term and only contains amounts denominated in Euros and Pound Sterling.

As of August 31, 2022, $ 39.5 million on this facility is classified as long-term and is denominated in Euros and Pound Sterling.

$ 38.4 million is classified as short-term and is denominated entirely in U.S.

Euro and Pound Sterling denominated draws will fluctuate in U.S.

Dollars from period to period due to changes in foreign currency exchange rates.

(2) Principal payments are required semi-annually in May and November of each year in equal installments of $ 0.4 million through May 15, 2032 .

(2) Principal payments are required semi-annually in May and November of each year in equal installments of $ 0.4 million through May 15, 2032 , resulting in $ 0.8 million classified as short-term.

The remaining outstanding principal in the amount of $ 8.4 million will become due on November 15, 2032 .

(3) On September 30, 2020, the Company refinanced $ 50.0 million of existing draws under its Credit Agreement in the United States through the issuance of two new $ 26.0 million notes (“Series B Notes” and “Series C Notes”, respectively) under its Note Agreement.

Interest on these new notes is payable semi-annually in May and November of each year with no principal due until the maturity date.

The first interest payment on both the Series B and Series C Notes was paid in May 2021 .

(3) Interest on notes is payable semi-annually in May and November of each year with no principal due until the maturity date.

Both the Note Agreement and the Credit Agreement contain representations, warranties, events of default and remedies, as well as affirmative, negative and other financial covenants customary for these types of agreements.

dividends and payments for the repurchase of the Company’s capital stock and enter into certain merger or consolidation transactions.

These covenants include, among other things, certain limitations on the ability of the Company and its subsidiaries to incur indebtedness, create liens, dispose of assets, make investments, declare, make or incur obligations to make certain restricted payments, including the payment of dividends and payments for the repurchase of the Company’s capital stock and enter into certain merger or consolidation transactions.

The Credit Agreement includes, among other limitations on indebtedness, a $ 125.0 million limit on other unsecured indebtedness.

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The Company made this election in order to preserve cash while it continued to monitor the long-term impacts of the COVID-19 pandemic.

On October 12, 2021, the Company’s Board of Directors approved a new share buy-back plan.

Under the plan, which will become effective on November 1, 2021, the Company is authorized to acquire up to $ 75.0 million of its outstanding shares through August 31, 2023.

On October 12, 2021, the Company’s Board of Directors approved a new share repurchase plan.

Under the plan, which became effective on November 1, 2021, the Company is authorized to acquire up to $ 75.0 million of its outstanding shares through August 31, 2023.

The timing and amount of repurchases are based on terms and conditions as may be acceptable to the Company’s Chief Executive Officer and Chief Financial Officer, subject to present loan covenants and in compliance with all laws and regulations applicable thereto.

During fiscal year 2022, the Company repurchased 138,562 shares at an average price of $ 210.39 per share, for a total cost of $ 29.2 million under this $ 75.0 million plan.

Earnings per Common Share

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Weighted-average common shares outstanding, diluted

There were no anti-dilutive stock-based equity awards outstanding for the fiscal years ended August 31, 2021.

For the fiscal years ended August 31, 2020 and 2019,weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 6,172 and 1,082 , respectively, were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive.

For the fiscal year ended August 31, 2022, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 8,724 were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive.

There were no anti-dilutive stock-based equity awards outstanding for the fiscal year ended August 31, 2021.

For the fiscal year ended August 31, 2020, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 6,172 , were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive.

Revenue Recognition

The following paragraphs detail the Company’s revenue recognition policies and provide additional information used in its determination of net sales and contract balances under ASC 606.

Disaggregation of Revenue

The following table presents our revenues by segment and major source (in thousands):

Fiscal Year Ended August 31, 2022:

Fiscal Year Ended August 31, 2021:

Maintenance products

Total net sales

(1) Homecare and cleaning products (“HCCP”)

Revenue Recognition

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Costs related to rebates, cooperative advertising and other promotional activities and other discounts are recorded as a reduction to sales upon delivery of the Company ’ s products to its customers.

The Company had a $ 8.4 million and $ 7.5 million balance in rebate/other discount liabilities as of August 31, 2021 and 2020, respectively, which are

included in accrued liabilities on the Company ’ s consolidated balance sheets.

The Company had a $ 8.7 million and $ 8.4 million balance in rebate/other discount liabilities as of August 31, 2022 and 2021, respectively, which are included in accrued liabilities on the Company ’ s consolidated balance sheets.

The Company recorded approximately $ 32.8 million and $ 28.7 million in rebates/other discounts as a reduction to sales during fiscal years 2022 and 2021, respectively.

Coupons — Coupon costs are based upon historical redemption rates and are recorded as a reduction to sales as incurred, which is when the coupons are circulated.

Coupon redemption liabilities, which are included in accrued liabilities on the Company’s consolidated balance sheets, were not significant at August 31, 2021 and 2020.

Coupon redemption liabilities, which are included in accrued liabilities on the Company’s

consolidated balance sheets, were not significant at August 31, 2022 and 2021.

Coupons recorded as a reduction to sales were not significant during fiscal years 2022 and 2021, respectively.

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The Company ’ s refund liability for sales returns is included in accrued liabilities and represents the amount expected to be owed to the customers for product returns.

The Company’s refund liability for sales returns was $ 0.5 million at August 31, 2021 and was not significant at August 31, 2020.

The Company’s refund liability for sales returns was $ 0.4 million at August 31, 2022 and was $ 0.5 million at August 31, 2021.

The Company also records an asset for the value of inventory that represents the right to recover products from customers associated with sales returns.

The value of this inventory is recorded to other current assets and the balance in this account associated with product returns was not significant at August 31, 2022 and August 31, 2021.

Disaggregation of Revenue

The Company's revenue is presented on a disaggregated basis in Note 16 – Business Segments and Foreign Operations included in this report.

The Company discloses certain information about its business segments, which are determined consistent with the way the Company’s Chief Operating Decision Maker organizes and evaluates financial information internally for making operating decisions and assessing performance.

The Chief Operating Decision Maker assesses and measures revenue based on geographic area and product groups.

Contract Balances

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Upon the termination of contracts with contract manufacturers, the Company obtains certain inventory control rights and is obligated to work with the contract manufacturer to sell through all product held by or manufactured by the contract manufacturer on behalf of the Company during the termination notification period.

If any inventory remains at the contract manufacturer at the

termination date, the Company is obligated to purchase such inventory which may include raw materials, components and finished goods.

If any inventory remains at the contract manufacturer at the termination date, the Company is obligated to purchase such inventory which may include raw materials, components and finished goods.

The amounts for inventory purchased under termination commitments have been immaterial.

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From time to time, the Company is subject to various claims, lawsuits, investigations and proceedings arising in the ordinary course of business, including but not limited to, product liability litigation and other claims and proceedings with respect to intellectual property, breach of contract, labor and employment, tax and other matters.

As of August 31, 2021, there were no unasserted claims or pending proceedings for claims against the Company that the Company believes will result in a probable loss for the Company and, as to claims that the Company believes may result in a reasonably possible loss, the Company believes that no reasonably possible outcome of any such claim will have a materially adverse impact on the Company’s financial condition, results of operations or cash flows.

On or about August 18, 2020, Benny Bong (“Bong”) filed a civil action against the Company and the Company’s wholly-owned subsidiary, WD-40 Manufacturing Company (“WD-40 Manufacturing”), in Indonesia in the Commercial District Court of Central Jakarta, case reference number 41 / Pdt.Sus-Merek / 2020 / PN.Niaga.Jkt.Pst.

(the “Jakarta Litigation”).

In April 2021, the Company and WD-40 Manufacturing, owner of the WD-40 brand trademarks, were served with Summons and Complaint for the Jakarta Litigation, in which Bong is seeking damages based on the Company’s enforcement actions against Bong following registration of a Get All-40 trademark that includes a yellow shield logo similar to the WD-40 brand shield logo (the “Get All 40 Trademark”) .

The complaint asserts claims for damages for more than $ 25.0 million.

The dispute underlying the Jakarta Litigation follows 2018 litigation filed by WD-40 Manufacturing, in which the Commercial District Court ordered cancellation of two earlier Get All-40 trademark registrations.

In January 2021, WD-40 Manufacturing filed a new cancellation action in a separate proceeding before the Commercial District Court seeking to invalidate the most recent Get All-40 Trademark registration.

In August 2021, the Commercial District Court granted WD-40 Manufacturing’s action for cancellation of the Get All-40 Trademark.

Bong initiated appeal of the cancellation decision in September 2021.

The Company denies the allegations asserted by Bong and will vigorously defend itself in the Jakarta Litigation.

The Company believes that an unfavorable outcome in the Jakarta Litigation is not probable.

Due to the uncertainty as to the claims asserted by Bong for recovery of damages and as to future actions in the Jakarta Litigation, the Company is unable to estimate an amount of possible future loss or a range of possible loss.

As of August 31, 2022, there were no unasserted claims or pending proceedings for claims against the Company that the Company believes will result in a probable loss.

As to claims that the Company believes may result in a reasonably possible loss, the Company believes that no reasonably

possible outcome of any such claim will have a materially adverse impact on the Company’s financial condition, results of operations or cash flows.

Indemnifications

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Net deferred tax liabilities

The Company had state net operating loss (“NOL”) carryforwards of $ 4.5 million and $ 3.9 million as of August 31, 2021 and 2020, respectively, which generated a net deferred tax asset of $ 0.3 million as of both August 31, 2021 and 2020.

The Company had state net operating loss (“NOL”) carryforwards of $ 5.3 million and $ 4.5 million as of August 31, 2022 and 2021, respectively, which generated a net deferred tax asset of $ 0.4 million and $ 0.3 million as of August 31, 2022 and 2021, respectively.

The state NOL carryforwards, if unused, will expire between fiscal year 2023 and 2042.

The Company also had tax credit carryforwards of $ 3.9

million and $ 3.4 million as of August 31, 2021 and 2020, respectively, of which $ 3.7 million and $ 3.2 million, respectively, is attributable to U.K.

The Company also had tax credit carryforwards of $ 3.5 million and $ 3.9 million as of August 31, 2022 and 2021, respectively, of which $ 3.3 million and $ 3.7 million, respectively, is attributable to U.K.

tax credit carryforwards, which do not expire.

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State income taxes, net of federal tax benefits

Effect of foreign operations

Net benefit from GILTI/FDII

Tax Cuts and Jobs Act:

Toll tax, net of foreign tax credits

Benefit from stock compensation

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The provision for income taxes was 19.9 % and 18.8 % of income before income taxes for the fiscal years ended August 31, 2022 and 2021, respectively.

The decrease in the effective income tax rate from period to period was primarily due to an increase in excess tax benefits from settlements of stock-based equity awards, as well as increased benefits from earnings from foreign operations .

The increase in the effective income tax rate from period to period was primarily due to an increase in nondeductible performance-based compensation expense.

Reconciliations of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands):

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Unrecognized tax benefits - end of fiscal year

Gross unrecognized tax benefits totaled $ 9.3 million and $ 9.4 million for the fiscal years ended August 31, 2021 and 2020, respectively, of which $ 9.1 million and $ 9.2 million in fiscal years ended August 31, 2021 and 2020, respectively, would affect the Company’s effective income tax rate if recognized.

Interest and penalties related to uncertain tax positions included in tax expense was $ 0.3 million and $ 0.5 million for fiscal year ending August 31, 2021 and 2020, respectively, primarily related to the toll tax liability reserve.

Gross unrecognized tax benefits totaled $ 9.3 million for both the fiscal years ended August 31, 2022 and 2021, of which $ 9.1 million in both fiscal years ended August 31, 2022 and 2021, would affect the Company’s effective income tax rate if recognized.

Interest and penalties related to uncertain tax positions included in tax expense was $ 0.3 million for both fiscal years ending August 31, 2022 and 2021, primarily related to the toll tax liability reserve.

The total balance of accrued interest and penalties related to uncertain tax positions was $ 1.6 million and $ 1.2 million for the fiscal years ended August 31, 2022 and 2021, respectively.

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Audit outcomes and the timing of settlements are subject to significant uncertainty.

Income taxes receivable of $ 5.0 million and $ 1.9 are recorded in the Company’s consolidated balance sheets as of August 31, 2022 and 2021, respectively.

Income taxes receivable are included in other current assets, which also consists of miscellaneous prepaid expenses and deposits.

Stock-based Compensation

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(1) PSU awards, similar to DPU awards that were replaced by PSUs in fiscal year 2021, contain performance conditions for which accrual of expense is based on the probable outcome of the performance conditions.

Vesting of DPUs related to the measurement years of both fiscal year 2020 and 2019 was deemed not probable at the end of each fiscal year.

DPUs were then discontinued by the Company prior fiscal year 2021.

Vesting of DPUs related to the measurement year of 2020 was deemed not probable at the end of the fiscal year.

DPUs were then discontinued by the Company beginning in fiscal year 2021.

PSUs pertaining to the measurement year of fiscal year 2021 vested at 100 % since the performance conditions were fully achieved.

PSUs pertaining to the measurement year of fiscal year 2022 was deemed not probable at the end of the fiscal year.

The Company recorded deferred tax assets related to such stock-based compensation of $ 1.5 million, $ 2.0 million and $ 1.2 million for the fiscal years ended August 31, 2022, 2021 and 2020, respectively.

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Vested at August 31, 2022

The weighted-average grant date fair value of all RSUs granted during the fiscal years ended August 31, 2021, 2020 and 2019 was $ 208.29 , $ 184.43 and $ 163.93 , respectively.

The weighted-average grant date fair value of all RSUs granted during the fiscal years ended August 31, 2022, 2021 and 2020 was $217.

03, $ 208.29 and $ 184.43 , respectively.

The total intrinsic value of all RSUs converted to common shares was $ 3.0 million, $ 8.5 million and $ 5.4 million for the fiscal years ended August 31, 2022, 2021 and 2020, respectively.

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The grant date fair value of MSUs are estimated using a Monte Carlo simulation model and are expensed over the requisite service period rendered.

Assumptions and estimates utilized in the model include expected volatilities of the

Company’s stock and the Index, the Company’s risk-free interest rate and expected dividends.

Assumptions and estimates utilized in the model include expected volatilities of the Company’s stock and the Index, the Company’s risk-free interest rate and expected dividends.

The probabilities of the actual number of MSUs expected to vest and resultant actual number of shares of common stock expected to be awarded are reflected in the grant date fair values of the various MSU awards;

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The expected volatility utilized is based on the historical volatilities of the Company’s common stock and the Index in order to model the stock price movements.

The volatility used was calculated over the most recent 2.88 -year period for MSUs granted during the fiscal year ended August 31, 2021 and over the most recent 2.90 -year periods for MSUs granted during each of the fiscal years ended August 31, 2020 and 2019, which were the remaining terms of the performance Measurement Period at the dates of grant.

The volatility used was calculated over the most recent 2.89 -year period for MSUs granted during the fiscal year ended August 31, 2022 and over the most recent 2.88 and 2.90 -year periods for MSUs granted during each of the fiscal years ended August 31, 2021 and 2020, respectively, which were the remaining terms of the performance Measurement Period at the dates of grant.

The risk-free interest rates used are based on the implied yield available on a U.S.

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The total intrinsic value of all MSUs converted to common shares was $ 4.4 million, $ 5.9 million and $ 4.4 million for the fiscal years ended August 31, 2022, 2021 and 2020, respectively.

The income tax benefits from MSUs converted to common shares totaled $ 1.3 million for the fiscal year ended August 31, 2021, and $ 0.9 million for the fiscal years ended August 31, 2020 and 2019.

The income tax benefits from MSUs converted to common shares totaled $ 0.9 million for the fiscal year ended August 31, 2022, $ 1.3 million for the fiscal years ended August 31, 2021 and $ 0.9 million for the fiscal year ended August 31, 2020.

Deferred Performance Units

During fiscal year 2021, the Company discontinued the granting of new DPU awards.

Although certain vested DPU awards granted in prior period remain outstanding due to the deferred settlement feature contained within these award agreements, the expense associated with these awards has been fully recognized in prior periods.

Although certain vested DPU awards granted in prior periods remain outstanding due to the deferred settlement feature contained within these award agreements, the expense associated with these awards has been fully recognized in prior periods.

DPU awards converted to common shares issued to recipients following termination of employment from the Company were not material to the Company’s consolidated financial statements and related disclosures during fiscal years 2022, 2021 and 2020 respectively.

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Outstanding at August 31, 2022 (1)

(1) PSUs pertaining to the measurement year of fiscal year 2021 vested at 100 % since performance conditions were fully achieved at an attainment level of 100 %, which was certified subsequent to August 31, 2021 by the Company’s compensation committee.

The weighted-average grant date fair value of all PSUs granted during the fiscal years ended August 31, 2021 was $ 197.51 .

These PSU awards were granted for the first time in October 2021.

There have been no PSUs converted to common shares as of the fiscal year ended August 31, 2021.

(1) PSUs pertaining to the measurement year of fiscal year 2022 were forfeited in October 2022 since performance conditions were not achieved.

Performance is certified annually in October by the Company’s compensation committee subsequent to the Company’s fiscal year end and are forfeited, or vest, depending on performance achievement.

The weighted-average grant date fair value of all PSUs granted during the fiscal years ended August 31, 2022 and 2021 was $ 227.24 and $ 197.51 , respectively.

This form of PSU awards were granted for the first time in October 2021.

The total intrinsic value of all PSUs converted to common shares was $ 4.0 million for the fiscal year ended August 31, 2022.

The income tax benefits from PSUs converted to common shares totaled $ 0.8 million for the fiscal year ended August 31, 2022.

There were no conversions of PSUs to common shares for the fiscal years ended August 31, 2021 and 2020.

Other Benefit Plans

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The plans provide for Company contributions to an appropriate third-party plan, as approved by the subsidiary’s Board of Directors.

The Company’s contribution expense related to the international plans was $ 1.9 million for the fiscal year ended August 31, 2021 and $ 1.6 million for the fiscal years ended August 31, 2020 and 2019.

The Company’s contribution expense related to the international plans was $ 2.1 million for the fiscal year ended August 31, 2022, $ 1.9 million for the fiscal year ended August 31, 2021 and $ 1.6 million for the fiscal year ended August 31, 2020.

Business Segments and Foreign Operations

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(1) Includes tangible assets and property and equipment, net, attributed to the geographic location in which such assets are located.

Subsequent Events

Subsequent Event

Dividend Declaration

On October 11, 2022 , the Company’s Board of Directors declared a cash dividend of $ 0.78 per share payable on October 31, 2022 to shareholders of record on October 21, 2022 .

Share Repurchase Plan

On October 12, 2021, the Company’s Board of Directors approved a new share buy-back plan.

Under the plan, which will become effective on November 1, 2021, the Company is authorized to acquire up to $ 75.0 million of its outstanding shares through August 31, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures