WD 40 CO 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures as of August 31, 2024, the end of the period covered by this report (the Evaluation Date), and they have concluded that, as of the Evaluation Date, such controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in the Company’s reports filed under the Exchange Act. Although management believes the Company’s existing disclosure controls and procedures are adequate to enable the Company to comply with its disclosure obligations, management continues to review and update such controls and procedures. The Company has a disclosure committee, which consists of certain members of the Company’s senior management. 36 Table of Contents Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of its internal control over financial reporting based upon the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on that evaluation, management concluded that its internal control over financial reporting is effective as of August 31, 2024. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. PricewaterhouseCoopers LLP, independent registered public accounting firm, who audited and reported on the consolidated financial statements of WD-40 Company included in Item 15 of this report, has audited the effectiveness of WD-40 Company’s internal control over financial reporting as of August 31, 2024, as stated in their report included in Item 15 of this report. Changes in Internal Control over Financial Reporting There were no changes to the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter ended August 31, 2024, that materially affected, or would be reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information During the three months ended August 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) informed the Company of the adoption , modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. 37 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance Certain information required by this item is set forth in sections under the headings “Security Ownership of Certain Beneficial Owners and Management,” “Director Nominees,” “Insider Trading Policy,” and “Related Party Transactions Review and Oversight” in our Proxy Statement to be filed with the Securities and Exchange Commission in connection with the 2024 Annual Meeting of Stockholders on December 12, 2024 (“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. The code of ethics is represented by the Registrant’s Code of Conduct applicable to all employees and directors. A copy of the Code of Conduct may be found on the Registrant’s internet website on the Governance link from the Investors page at www.wd40company.com . Item 11. Executive Compensation 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 and People Committee – Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Compensation and People Committee Report,” “Executive Compensation” (and the compensation tables following such section), “Summary Compensation Table,” “Change of Control Severance Agreements” and “CEO Pay Ratio.” Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required by this item is incorporated by reference to the Proxy Statement under the heading “Security Ownership of Certain Beneficial Owners and Management.” Item 13. Certain Relationships and Related Transactions, and Director Independence Information required by this item is incorporated by reference to the Proxy Statement under the headings “Director Independence” and “Audit Committee – Related Party Transactions Review and Oversight.” Item 14. Principal Accountant Fees and Services Information required by this item is incorporated by reference to the Proxy Statement under the heading “Ratification of Appointment of Independent Registered Public Accounting Firm.” 38 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules Page (a) Documents filed as part of this report (1) Report of Independent Registered Public Accounting Firm (PCAOB ID: 238 ) F- 1 Consolidated Balance Sheets F- 3 Consolidated Statements of Operations F- 4 Consolidated Statements of Comprehensive Income F- 5 Consolidated Statements of Stockholders’ Equity F- 6 Consolidated Statements of Cash Flows F- 7 Notes to Consolidated Financial Statements F- 8 (2) Financial statement schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. (3) Exhibits Exhibit No. Description Articles of Incorporation and Bylaws. 3(a) Certificate of Incorporation,incorporated by reference from the Registrant’s Form 10-K filed October 22, 2018, Exhibit 3(a) thereto . 3(b) Amended and Restated Bylaws of WD-40 Company, incorporated by reference from the Registrant’s Form 8-K filed June 2 0 , 202 4 , Exhibit 3.2 thereto. Material Contracts. Executive Compensation Plans and Arrangements (Exhibits 10(a) through 10(o) are management contracts and compensatory plans or arrangements required to be filed as exhibits pursuant to Item 15(b)). 10(a) Amended and Restated W D-40 Company 2016 Stock Incentive Plan, incorporated by reference from the Registrant’s Proxy Statement filed November 2, 2023 , Appendix A thereto. 10(b) WD-40 Directors’ Compensation Policy and Election Plan dated October 3 , 202 4 . 10(c) 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. 10(d) 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. 10(e) 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. 10(f) Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2023, incorporated by reference from the Registrant’s Form 10-K filed October 24, 2022, Exhibit 10(o) thereto. 10(g) Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 2023, incorporated by reference from the Registrant’s Form 10-K filed October 24, 2022, Exhibit 10(p) thereto. 39 Table of Contents 10(h) Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 202 4 , incorporated by reference from the Registrant’s Form 10-K filed October 23 , 202 3 , Exhibit 10(o) thereto. 10(i) Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 202 4 , incorporated by reference from the Registrant’s Form 10-K filed October 23 , 202 3 , Exhibit 10(p) thereto. 10(j) Form of Performance Share Unit Restricted Stock Award Agreement for grants of Performance Share Units to Executive Officers in fiscal year 202 4 , incorporated by reference from the Registrant’s Form 10-K filed October 23 , 202 3 , Exhibit 10(q) thereto. 10(k) Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2025. 10(l) Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 2025. 10(m) Form of Performance Share Unit Restricted Stock Award Agreement for grants of Performance Share Units to Executive Officers in fiscal year 2025. 10(n) WD-40 Company 2017 Performance Incentive Compensation Plan, incorporated by reference from the Registrant’s Proxy Statement filed November 2, 2017, Appendix A thereto. 10(o) Form of Change in Control Severance Agreement between WD-40 Company and Executive Officers, incorporated by reference from the Registrant’s Form 10-Q filed January 9, 2023, Exhibit 10(a) thereto. 10(p) 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 . 10(q) 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 . 10(r) 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 . 10(s) 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. 10(t) 2 nd Amended and Restated Credit Agreement dated April 30, 2024 among WD-40 Company and certain of its subsidiaries and Bank of America, N.A., incorporated by reference from the Registrant’s Form 8-K filed May 2, 2024, Exhibit 10(a) thereto. 10(u) Note Purchase and Private Shelf Agreement dated November 15, 2017 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 8-K filed November 17, 2017, Exhibit 10(a) thereto. 10(v) First Amendment to Note Purchase Agreement dated February 23, 2018 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 8-K filed February 27, 2018, Exhibit 10(b) thereto. 10(w) Second Amendment to Note Purchase and Private Shelf Agreement dated March 16, 2020 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 8-K filed March 20, 2020, Exhibit 10(b) thereto . 10(x) Form of Limited Consent Letter Agreement dated April 8, 2020 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 10-Q filed April 9, 2020, Exhibit 10(e) thereto . 10(y) Third Amendment to Note Purchase and Private Shelf Agreement dated September 30, 2020 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 8-K filed October 6, 2020, Exhibit 10(e) thereto . 40 Table of Contents 10(z) Fourth Amendment to Note Purchase and Private Shelf Agreement dated April 30, 2024 among WD-40 Company and PGIM, Inc. and certain affiliates and managed accounts of PGIM, Inc., incorporated by reference from the Registrant’s Form 8-K filed May 2, 2024, Exhibit 10(b) thereto. 10(aa) Series B Senior Notes dated September 30, 2020, incorporated by reference from the Registrant’s Form 8-K filed October 6, 2020, Exhibit 10(f) thereto . 10(ab) Series C Senior Notes dated September 30, 2020, incorporated by reference from the Registrant’s Form 8-K filed October 6, 2020, Exhibit 10(g) thereto . 10(ac) Quota Purchase Agreement entered into by WD-40 Holding Company Brasil Ltda., M12 Participações Empresariais S.A. and Theron Marketing Ltda., dated March 4, 2024, incorporated by reference from the Registrant’s Form 8-K/A filed March 7, 2024, Exhibit 10.1 thereto*. 19 Insider Trading Policies and Procedures. 21 Subsidiaries of the Registrant . 23 Consent of Independent Registered Public Accounting Firm dated October 21, 2024. 31(a) Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31(b) Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32(a) Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32(b) Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97 Policy for Recovery of Erroneously Awarded Compensation of WD-40 Company, incorporated by reference from the Registrant’s Form 8-K filed June 23, 2023, Exhibit 10.1 thereto. 101 The following materials from WD-40 Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2024 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Balance Sheets, (v) the Consolidated Statements of Stockholders’ Equity, and (vi) Notes to Consolidated Financial Statements. 104 The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2024, formatted in iXBRL and contained in Exhibit 101. * Except for Exhibit 1.1 of the Quota Purchase Agreement entered into by WD-40 Holding Company Brasil Ltda., M12 Participações Empresariais S.A. and Theron Marketing Ltda. dated March 4, 2024, the other exhibits, schedules and/or attachments to Exhibit 10.1 of the Registrant’s Form 8-K/A filed March 7, 2024 have been omitted in accordance with Regulation S-K Item 601(b)(10). The Registrant agrees to furnish a copy of any omitted schedule to the SEC upon its request. Item 16. Form 10-K Summary Not applicable. 41 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. WD-40 COMPANY Registrant /s/ SARA K. HYZER SARA K. HYZER Vice President, Finance and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: October 21, 2024 42 Table of Contents 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. BRASS STEVEN A. BRASS President, Chief Executive Officer and Director (Principal Executive Officer) Date: October 21, 2024 /s/ CYNTHIA BURKS /s/ TREVOR I. MIHALIK CYNTHIA B. BURKS, Director TREVOR I. MIHALIK, Director Date: October 21, 2024 Date: October 21, 2024 /s/ DANIEL T. CARTER /s/ GRACIELA I. MONTEAGUDO DANIEL T. CARTER, Director GRACIELA I. MONTEAGUDO, Director Date: October 21, 2024 Date: October 21, 2024 /s/ ERIC P. ETCHART /s/ DAVID B. PENDARVIS ERIC P. ETCHART, Director DAVID B. PENDARVIS, Director Date: October 21, 2024 Date: October 21, 2024 /s/ LARA L. LEE /s/ GREGORY A. SANDFORT LARA L. LEE, Director GREGORY A. SANDFORT, Director Date: October 21, 2024 Date: October 21, 2024 /s/ EDWARD O. MAGEE, JR. /s/ ANNE G. SAUNDERS EDWARD O. MAGEE, JR., Director ANNE G. SAUNDERS, Director Date: October 21, 2024 Date: October 21, 2024 43 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of WD-40 Company 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, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended August 31, 2024, 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, 2024, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of August 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended August 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 31, 2024, based on criteria established in Internal Control—Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and F-1 Table of Contents directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. 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. Revenue Recognition – Product Sales As described in Notes 2 and 12 to the consolidated financial statements, product sales make up a majority of the Company’s net sales of $590.6 million for the year ended August 31, 2024. The Company generates revenue from sales of its products to customers. Product sales include maintenance products and homecare and cleaning products. As disclosed by management, sales are recognized as revenue at a point in time upon transferring control of the product to the customer, which typically occurs when products are shipped or delivered, depending on when risks of loss and title have passed to the customer per the terms of the contract. The Company recognizes revenue related to the sale of these products in an amount reflecting the consideration to which it expects to be entitled. The principal consideration for our determination that performing procedures relating to revenue recognition for product sales is a critical audit matter is a high degree of auditor effort involved in performing procedures related to the Company’s revenue recognition. 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 product sales revenue recognition, including controls over the recording of product sales at the point in time upon transferring control to the customer. These procedures also included, among others (i) testing the revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as purchase orders, invoices, proof of shipment or delivery, and cash receipts and (ii) confirming a sample of outstanding customer invoice balances as of August 31, 2024 and, for confirmations not returned, obtaining and inspecting source documents, such as purchase orders, invoices, proof of shipment or delivery, and subsequent cash receipts. /s/ PricewaterhouseCoopers LLP San Diego, California October 21, 2024 We have served as the Company’s auditor since at least 1972. We have not been able to determine the specific year we began serving as auditor of the Company. F-2 Table of Contents WD-40 COMPANY CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) August 31, 2024 August 31, 2023 Assets Current assets: Cash and cash equivalents $ 46,699 $ 48,143 Trade and other accounts receivable, net 117,493 98,039 Inventories 79,088 86,522 Other current assets 12,161 15,821 Total current assets 255,441 248,525 Property and equipment, net 62,983 66,791 Goodwill 96,985 95,505 Other intangible assets, net 6,222 4,670 Right-of-use assets 11,611 7,820 Deferred tax assets, net 993 1,201 Other assets 14,804 13,454 Total assets $ 449,039 $ 437,966 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 35,960 $ 30,826 Accrued liabilities 31,272 30,000 Accrued payroll and related expenses 26,055 16,722 Short-term borrowings 8,659 10,800 Income taxes payable 1,554 494 Total current liabilities 103,500 88,842 Long-term borrowings 85,977 109,743 Deferred tax liabilities, net 9,066 10,305 Long-term operating lease liabilities 5,904 5,832 Other long-term liabilities 14,066 13,066 Total liabilities 218,513 227,788 Commitments and Contingencies (Note 13) Stockholders’ equity: Common stock — authorized 36,000,000 shares, $ 0.001 par value; 19,925,212 and 19,905,815 shares issued at August 31, 2024 and 2023, respectively; and 13,548,581 and 13,563,434 shares outstanding at August 31, 2024 and 2023, respectively 20 20 Additional paid-in capital 175,642 171,546 Retained earnings 499,931 477,488 Accumulated other comprehensive income (loss) ( 29,268 ) ( 31,206 ) Common stock held in treasury, at cost — 6,376,631 and 6,342,381 shares at August 31, 2024 and 2023, respectively ( 415,799 ) ( 407,670 ) Total stockholders’ equity 230,526 210,178 Total liabilities and stockholders’ equity $ 449,039 $ 437,966 See accompanying notes to consolidated financial statements. F-3 Table of Contents WD-40 COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Fiscal Year Ended August 31, 2024 2023 2022 Net sales $ 590,557 $ 537,255 $ 518,820 Cost of products sold 275,330 263,035 264,055 Gross profit 315,227 274,220 254,765 Operating expenses: Selling, general and administrative 183,859 154,684 138,658 Advertising and sales promotion 33,911 28,807 27,343 Amortization of definite-lived intangible assets 1,106 1,005 1,434 Total operating expenses 218,876 184,496 167,435 Income from operations 96,351 89,724 87,330 Other income (expense): Interest income 474 231 102 Interest expense ( 4,287 ) ( 5,614 ) ( 2,742 ) Other (expense) income, net ( 1,030 ) 822 ( 582 ) Income before income taxes 91,508 85,163 84,108 Provision for income taxes 21,864 19,170 16,779 Net income $ 69,644 $ 65,993 $ 67,329 Earnings per common share: Basic $ 5.12 $ 4.84 $ 4.91 Diluted $ 5.11 $ 4.83 $ 4.90 Shares used in per share calculations: Basic 13,554 13,578 13,668 Diluted 13,580 13,604 13,696 See accompanying notes to consolidated financial statements. F-4 Table of Contents WD-40 COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Fiscal Year Ended August 31, 2024 2023 2022 Net income $ 69,644 $ 65,993 $ 67,329 Other comprehensive income (loss): Foreign currency translation adjustment 1,938 5,003 ( 10,179 ) Total comprehensive income $ 71,582 $ 70,996 $ 57,150 See accompanying notes to consolidated financial statements. F-5 Table of Contents WD-40 COMPANY CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share and per share amounts) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders’ Equity Shares Amount Shares Amount Balance at August 31, 2021 19,856,865 $ 20 $ 163,737 $ 430,735 $ ( 26,030 ) 6,147,899 $ ( 368,080 ) $ 200,382 Issuance of common stock under share-based compensation plan, net of shares withheld for taxes 31,942 ( 4,461 ) ( 4,461 ) Stock-based compensation 6,697 6,697 Cash dividends ($ 3.06 per share) ( 41,988 ) ( 41,988 ) Repurchase of common stock 138,562 ( 29,156 ) ( 29,156 ) Foreign currency translation adjustment ( 10,179 ) ( 10,179 ) Net income 67,329 67,329 Balance at August 31, 2022 19,888,807 $ 20 $ 165,973 $ 456,076 $ ( 36,209 ) 6,286,461 $ ( 397,236 ) $ 188,624 Issuance of common stock under share-based compensation plan, net of shares withheld for taxes 17,008 ( 861 ) ( 861 ) Stock-based compensation 6,434 6,434 Cash dividends ($ 3.27 per share) ( 44,581 ) ( 44,581 ) Repurchases of common stock 55,920 ( 10,434 ) ( 10,434 ) Foreign currency translation adjustment 5,003 5,003 Net income 65,993 65,993 Balance at August 31, 2023 19,905,815 $ 20 $ 171,546 $ 477,488 $ ( 31,206 ) 6,342,381 $ ( 407,670 ) $ 210,178 Issuance of common stock under share-based compensation plan, net of shares withheld for taxes 19,397 ( 2,439 ) ( 2,439 ) Stock-based compensation 6,535 6,535 Cash dividends ($ 3.47 per share) ( 47,201 ) ( 47,201 ) Repurchases of common stock 34,250 ( 8,129 ) ( 8,129 ) Foreign currency translation adjustment 1,938 1,938 Net income 69,644 69,644 Balance at August 31, 2024 19,925,212 $ 20 $ 175,642 $ 499,931 $ ( 29,268 ) 6,376,631 $ ( 415,799 ) $ 230,526 See accompanying notes to consolidated financial statements. F-6 Table of Contents WD-40 COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Fiscal Year Ended August 31, 2024 2023 2022 Operating activities: Net income $ 69,644 $ 65,993 $ 67,329 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization $ 9,456 $ 8,151 $ 8,294 Net gains on sales and disposals of property and equipment $ ( 241 ) $ ( 90 ) $ ( 311 ) Deferred income taxes $ ( 1,156 ) $ ( 1,254 ) $ 596 Stock-based compensation $ 6,535 $ 6,434 $ 6,697 Amortization of cloud computing implementation costs $ 1,221 $ 270 $ 295 Unrealized foreign currency exchange losses (gains), net $ 200 $ ( 1,702 ) $ 1,035 Provision for credit losses $ 325 $ 391 $ 143 Write-off of inventories $ 1,425 $ 713 $ 595 Changes in assets and liabilities: Trade and other accounts receivable $ ( 15,498 ) $ ( 5,339 ) $ ( 7,443 ) Inventories $ 6,414 $ 19,367 $ ( 53,260 ) Other assets $ ( 1,444 ) $ ( 1,637 ) $ ( 12,873 ) Operating lease assets and liabilities, net $ ( 35 ) $ 49 $ ( 32 ) Accounts payable and accrued liabilities $ 4,322 $ ( 213 ) $ 5,208 Accrued payroll and related expenses $ 8,879 $ 4,965 $ ( 13,133 ) Other long-term liabilities and income taxes payable $ 1,987 $ 2,293 $ ( 536 ) Net cash provided by operating activities $ 92,034 $ 98,391 $ 2,604 Investing activities: Purchases of property and equipment $ ( 4,206 ) $ ( 6,871 ) $ ( 8,303 ) Proceeds from sales of property and equipment $ 672 $ 655 $ 612 Acquisition of business, net of cash acquired $ ( 6,201 ) $ — $ — Net cash used in investing activities $ ( 9,735 ) $ ( 6,216 ) $ ( 7,691 ) Financing activities: Treasury stock purchases $ ( 8,094 ) $ ( 10,434 ) $ ( 29,156 ) Dividends paid $ ( 47,201 ) $ ( 44,581 ) $ ( 41,988 ) Repayments of long-term senior notes $ ( 800 ) $ ( 800 ) $ ( 800 ) Net (repayments) proceeds from revolving credit facility $ ( 25,402 ) $ ( 28,372 ) $ 38,394 Shares withheld to cover taxes upon conversion of equity awards $ ( 2,439 ) $ ( 861 ) $ ( 4,461 ) Net cash used in financing activities $ ( 83,936 ) $ ( 85,048 ) $ ( 38,011 ) Effect of exchange rate changes on cash and cash equivalents $ 193 $ 3,173 $ ( 5,020 ) Net (decrease) increase in cash and cash equivalents $ ( 1,444 ) $ 10,300 $ ( 48,118 ) Cash and cash equivalents at beginning of period $ 48,143 $ 37,843 $ 85,961 Cash and cash equivalents at end of period $ 46,699 $ 48,143 $ 37,843 Supplemental cash flow information: Accrued capital expenditures $ 111 $ 80 $ 960 Finance lease obligation settled with prepaid deposit $ 3,855 $ — $ — Cash paid for: Interest $ 4,459 $ 5,522 $ 2,687 Income taxes, net of tax refunds received $ 19,843 $ 12,811 $ 18,345 See accompanying notes to consolidated financial statements. F-7 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. The Company 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 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. Maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, India, the Middle East and Africa. Homecare and cleaning products are sold primarily in North America, the United Kingdom (“U.K.”) and Australia. The Company’s products are sold primarily through hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, warehouse club stores, farm supply, sport retailers, and independent bike dealers. Note 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates. Global economies have experienced significant volatility in recent years. Although the Company’s 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 factors that have been subject to such volatility and how management expects them to change in the future, as appropriate. It is possible that actual results experienced may materially differ from the Company’s estimates in future periods, which could materially affect its results of operations and financial condition. Cash and Cash Equivalents Cash equivalents are highly liquid investments purchased with an original maturity of three months or less. Trade Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance for credit losses based on historical write-off experience and the identification of specific balances deemed uncollectible. Trade accounts receivable are charged against the allowance when the Company believes it is probable that the trade accounts receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. Allowance for credit losses related to the Company’s trade accounts receivable was not significant at August 31, 2024 and 2023. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined primarily based on a first-in, first-out method or, for a portion of raw materials inventory, the average cost method. When necessary, the Company adjusts the carrying value of its inventory to the lower of cost or net realizable value, including any costs to sell or dispose of such inventory. Appropriate consideration is given by the Company to obsolescence, excessive inventory levels, product F-8 Table of Contents deterioration and other factors when evaluating net realizable value for the purposes of determining the lower of cost or net realizable value. Included in inventories are amounts for certain raw materials and components that the Company has provided to its third-party contract manufacturers but that remain unpaid to the Company as of the balance sheet date. The Company’s contract manufacturers package products to the Company’s specifications and, upon order from the Company, ship ready-to-sell inventory to either the Company’s third-party distribution centers or directly to its customers. The Company transfers certain raw materials and components to these contract manufacturers for use in the manufacturing process. Contract manufacturers are obligated to pay the Company for these raw materials and components. Amounts receivable from the contract manufacturers as of the balance sheet date related to transfers of these raw materials and components by the Company to its contract manufacturers are generally considered product held at third-party contract manufacturers and are included in inventories in the accompanying consolidated balance sheets. Property and Equipment 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 computer equipment. Depreciation expense totaled $ 8.0 million, $ 7.1 million and $ 6.9 million for fiscal years 2024, 2023 and 2022, respectively. These amounts include equipment depreciation expense which is recognized as cost of products sold and totaled $ 3.9 million, $ 3.0 million, and $ 2.5 million in fiscal years 2024, 2023, and 2022, respectively. 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 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 and certain related software 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. Leases 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. For leases that do not contain a readily determinable implicit rate, the Company determines the F-9 Table of Contents present value of the lease liability at the lease commencement date using its estimated secured incremental borrowing rate, determined by using a portfolio approach based on the rate of interest the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate in the currency of the lease. The Company records ROU assets and lease liabilities on its consolidated balance sheets for leases with an expected term greater than one year. Lease agreements may contain rent escalation clauses, renewal or termination options, and rent holidays, amongst other features. ROU assets include amounts for scheduled rent increases. The lease term includes the committed, non-cancelable period of the lease and options to renew, extend or terminate the lease when it is reasonably certain the Company will exercise those options, and is reviewed in subsequent periods if a triggering event occurs. The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to: (i) not separate lease components from non-lease components for real estate – office buildings, machinery and equipment, lab equipment, office equipment, furniture and fixtures, IT equipment and third-party manufacturing facilities; and (ii) exclude leases with an initial term of twelve months or less (“short-term” leases) from the consolidated balance sheets and recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Goodwill Goodwill represents the excess of the purchase price over the fair value of tangible and intangible assets acquired. The carrying value of goodwill is reviewed for possible impairment in accordance with the authoritative guidance on goodwill, intangibles and other. 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 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. When testing goodwill for impairment, the Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. If, after assessing qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing a quantitative test is unnecessary. Otherwise, a quantitative test is performed to identify the potential impairment and to measure the amount of goodwill impairment, if any. The Company also performs a quantitative assessment periodically, regardless of the results of the qualitative assessments. Any required impairment losses are recorded as a reduction in the carrying amount of the related asset and charged to results of operations. No goodwill impairments were identified by the Company during fiscal years 2024, 2023 or 2022. Subsequent Measurement of Long-lived Assets The Company’s long-lived assets consist of property and equipment and definite-lived intangible assets. Long-lived assets are depreciated or amortized, as applicable, on a straight-line basis over their estimated useful lives. The Company assesses for potential impairments to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and/or its remaining useful life may no longer be appropriate. Any required impairment loss would be measured as the amount by which the asset’s carrying amount exceeds its fair value, which is the amount at which the asset could be bought or sold in a current transaction between willing market participants and would be recorded as a reduction in the carrying amount of the related asset and a charge to results of operations. An impairment loss would be recognized when the sum of the expected future undiscounted net cash flows is less than the carrying amount of the asset. No impairments to its long-lived assets were identified by the Company during fiscal years 2024, 2023 or 2022. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820, “ Fair Value Measurements and Disclosures” , defines fair value as the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes its financial assets and liabilities measured at fair value F-10 Table of Contents into a hierarchy that categorizes fair value measurements into the following three levels based on the types of inputs used in measuring their fair value: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities; Level 2: Observable market-based inputs or observable inputs that are corroborated by market data; and Level 3: Unobservable inputs reflecting the Company’s own assumptions. Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of August 31, 2024, 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. 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. The Company’s fixed rate long-term borrowings consist of senior notes and are recorded at carrying value. The Company estimates that the fair value of its senior notes, based on Level 2 inputs, was approximately $ 61.8 million as of August 31, 2024, which was determined based on a discounted cash flow analysis using current market interest rates for instruments with similar terms, compared to their carrying value of $ 66.8 million. During the fiscal years ended August 31, 2024, 2023 and 2022, the Company did not record any significant nonrecurring fair value measurements for assets or liabilities in periods subsequent to their initial recognition. Concentration of Credit Risk Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. The Company’s policy is to place its cash in high credit quality financial institutions, in investments that include demand deposits, term deposits and callable time deposits. The Company’s trade accounts receivable are derived from customers located in North, Central and South America, Asia-Pacific, Europe, India, the Middle East, and Africa. The Company limits its credit exposure from trade accounts receivable by performing on-going credit evaluations of customers, as well as insuring its trade accounts receivable in selected markets. Concentration of Supplier Risk The Company relies on a limited number of suppliers, including single or sole source suppliers for certain of its raw materials, packaging, product components and other necessary supplies. Historically, except for limited circumstances during the COVID-19 pandemic, 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. Where possible and where it makes business sense, the Company works with secondary or multiple suppliers to qualify additional supply sources. Insurance Coverage The Company carries insurance policies to cover insurable risks such as property damage, business interruption, product liability, cyber liability, workers’ compensation and other risks, with coverage and other terms that it believes to be adequate and appropriate. These policies may be subject to applicable deductible or retention amounts, coverage limitations and exclusions. The Company does not maintain self-insurance with respect to its material risks; therefore, the Company has not provided for self-insurance reserves as of August 31, 2024 and 2023. Revenue Recognition The Company generates revenue from sales of its products to customers in its Americas, EIMEA and Asia-Pacific segments. Product sales for the Company include maintenance products and homecare and cleaning products. The Company recognizes revenue related to the sale of these products when it satisfies a performance obligation in an amount reflecting the consideration to which it expects to be entitled. Sales are recorded net of allowances for damaged goods and other sales returns, sales incentives, trade promotions and cash discounts. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized which includes the following: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) F-11 Table of Contents allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Contracts with customers are renewable periodically and contain terms and conditions with respect to payment, delivery, sales incentives, warranty and supply, but do not require mandatory purchase commitments. In the absence of a specific sales agreement with a customer, the Company’s standard terms and conditions at the time of acceptance of purchase orders apply to the sales transaction. The Company’s standard terms and conditions are either included in a standalone document or on the Company’s price lists or both, and these standard terms and conditions are provided to the customer prior to the sales transaction. The Company considers the customer purchase orders, governed by specific sales agreements or the Company’s standard terms and conditions, to be the contract with the customer. The Company considers each transaction to sell products as separate and distinct, with no additional promises made, and as a result, all of the Company’s sales are single performance obligation arrangements for which the transaction price is equivalent to the stated price of the product, net of any variable consideration for items such as sales returns, discounts, rebates and other sales incentives. The Company recognizes sales at a point in time upon transferring control of its product to the customer. This typically occurs when products are shipped or delivered, depending on when risks of loss and title have passed to the customer per the terms of the contract. Taxes imposed by governmental authorities on the Company’s revenue, such as sales taxes and value added taxes, are excluded from net sales. Sales commissions are paid to certain third-parties based upon specific sales levels achieved during a defined time period. Since the Company’s contracts related to these sales commissions do not exceed one year, the Company has elected as a practical expedient to expense these payments as incurred. The Company also elected the practical expedient related to shipping and handling fees which allows the Company to account for freight costs as fulfillment activities instead of assessing such activities as performance obligations. The Company’s freight costs are sometimes paid by the customer, while other times, the freight costs are included in the sales price. The Company does not account for freight costs as a separate performance obligation, but rather as an activity performed to transfer the products to its customers. Variable Consideration – Sales Incentives In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment related to variable consideration to determine the net consideration to which the Company expects to be entitled. The Company records estimates of variable consideration, which primarily includes rebates/other discounts (cooperative marketing programs, volume-based discounts, shelf price reductions and allowances for shelf space, charges from customers for services they provided to us related to the sale and penalties/fines charged to us by customers associated with failing to adhere to contractual obligations), coupon offers, cash discount allowances, and sales returns, as a reduction of sales in its consolidated statements of operations. These estimates are based on the expected value method considering all reasonably available information, including current and past trade promotion spending patterns, status of trade promotion activities, the interpretation of historical spending trends by customer and category, customer agreements and/or currently known factors that arise in the normal course of business. The Company reviews its assumptions and adjusts these estimates accordingly on a quarterly basis. Rebates and Other Discounts The Company offers various on-going trade promotion programs with customers and provides other discounts to customers that require management to estimate and accrue for the expected costs of such programs or discounts. These programs include cooperative marketing, volume-based discounts, shelf price reductions, consideration and allowances given to retailers for shelf space and/or favorable display positions in their stores and other promotional activities. Other discounts include items such as charges from customers for services they provide related to the sale of WD-40 Company products and penalties/fees associated with WD-40 Company failing to adhere to contractual obligations (e.g., errors on purchase orders, errors on shipment, late deliveries, etc.). 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 offers certain of its customers a cash discount program to incentivize them to pay the invoice earlier than the normal payment date on the invoice. Although payment terms vary, most customers typically pay within 30 to 90 days of invoicing. F-12 Table of Contents 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, 2024 and 2023. Coupons recorded as a reduction to sales were not significant during fiscal years 2024 and 2023, respectively. Sales Returns The Company recognizes revenue net of allowances for estimated returns, which is generally based on historical return rates, with a corresponding reduction to cost of products sold. Although the Company typically does not have definitive sales return provisions included in the contract terms with its customers, when such provisions have been included, they have not been significant. The Company presents its provision for sales returns on a gross basis as a liability. 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. Contract Balances Contract liabilities consist of deferred revenue related to undelivered products. Deferred revenue is recorded when payments have been received from customers for undelivered products. Revenue is subsequently recognized when revenue recognition criteria are met, generally when control of the product transfers to the customer. Contract liabilities are recorded in accrued liabilities on the Company’s consolidated balance sheets. Contract assets are recorded if the Company has satisfied a performance obligation but does not yet have an unconditional right to consideration. The Company has an unconditional right to payment for its trade and other accounts receivable on the Company’s consolidated balance sheets. Cost of Products Sold Cost of products sold primarily includes the cost of products manufactured on the Company’s behalf by its third-party contract manufacturers, net of volume and other rebates. Cost of products sold also includes the costs to manufacture WD-40 concentrate, which is done at the Company’s own facilities or at third-party contract manufacturers. When the concentrate is manufactured by the Company, cost of products sold includes direct labor, direct materials and supplies; in-bound freight costs related to purchased raw materials and finished product; and depreciation of machinery and equipment used in the manufacturing process. In addition, cost of products sold includes fees charged to the Company by its third-party distribution centers to warehouse and administer finished products once they are received from the Company’s third-party contract manufacturers. 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 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; other general and administrative costs related to the Company’s business such as general overhead, legal and accounting fees, insurance, and depreciation; and employee-related and various other costs to support marketing, human resources, finance, supply chain, information technology and research and development activities. Shipping and Handling Costs Shipping and handling costs associated with the movement of finished goods from third-party contract manufacturers to the Company’s third-party distribution centers and from one third-party distribution center to another are capitalized in the cost of inventory and subsequently included in cost of sales when the sale to the customer is recognized in the statement of operations. Shipping and handling costs associated with out-bound transportation are included in selling, general and administrative expenses and are recorded at the time of shipment of product to the Company’s customers. Out-bound shipping and handling costs were $ 17.3 million, $ 17.1 million and $ 18.6 million for fiscal years 2024, 2023 and 2022, respectively. F-13 Table of Contents Advertising and Sales Promotion Expenses Advertising and sales promotion expenses are expensed as incurred. Advertising and sales promotion expenses include costs associated with promotional activities that the Company pays to third parties, which include costs for advertising (television, print media and internet), administration of coupon programs, consumer promotions, product demonstrations, public relations, agency costs, package design expenses and market research costs as well as market and sales data analyses. Advertising and sales promotion expenses also include product samples which are given to customers and are initiated by the Company and costs associated with shared marketing fund programs that the Company has in place with its marketing distributor customers. Total advertising and sales promotion expenses were $ 33.9 million, $ 28.8 million and $ 27.3 million for fiscal years 2024, 2023 and 2022, respectively. Research and Development The Company is involved in research and development efforts, including efforts focused on sustainability as well as ongoing development or innovation of new products and the improvement, extension or renovation of existing products or product lines. All research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses were $ 8.0 million, $ 6.2 million and $ 5.1 million in fiscal years 2024, 2023 and 2022, respectively. These expenses include costs associated with general research and development activities, as well as those associated with internal staff, overhead, design testing, market research and consultants. Income Taxes Current income tax expense is the amount of income taxes expected to be payable for the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the authoritative guidance on income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of income tax expense. 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 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. state income taxes and foreign withholding taxes, are immaterial to the Company’s consolidated financial statements. For additional information on income tax matters, see Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 14 — Income Taxes, included in this report. Foreign Currency The Company translates the assets and liabilities of its foreign subsidiaries into U.S. Dollars at current rates of exchange in effect at the end of the reporting period. Income and expense items are translated at rates that approximate the rates in effect at the transaction date. Gains and losses from translation are included in accumulated other comprehensive income or loss. 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 $ 1.3 million in net losses, $ 0.5 million in net gains, and $ 1.1 million in net losses in foreign currency transactions in fiscal years 2024, 2023, and 2022, 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. subsidiary. 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. Foreign currency forward contracts are carried at fair value, with net realized and unrealized gains and losses recognized in other income (expense), net in the Company’s consolidated statements of operations. Cash flows from settlements of F-14 Table of Contents foreign currency forward contracts are included in operating activities in the consolidated statements of cash flows. Foreign currency forward contracts in an asset position at the end of the reporting period are included in other current assets, while foreign currency forward contracts in a liability position at the end of the reporting period are included in accrued liabilities in the Company’s consolidated balance sheets. At August 31, 2024, the Company had a notional amount of $ 21.8 million outstanding in foreign currency forward contracts, which matured in September 2024. Unrealized net gains and losses related to foreign currency forward contracts were not significant at August 31, 2024 or 2023. Realized net losses related to foreign currency forward contracts were not significant for the fiscal years ended August 31, 2024 and 2023. Both unrealized and realized net gains and losses are recorded in other income on the Company’s consolidated statements of operations. Functional Currencies The reporting currency of the Company is the U.S. Dollar. The functional currency of each of the Company’s subsidiaries is based on the currency of the economic environment in which it operates. Management periodically assesses the functional currency of each subsidiary in accordance with Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters”. The functional currency of the Company’s U.K. subsidiary, the entity in which the EIMEA results are generated, has historically been the Pound Sterling and remained Pound Sterling through August 31, 2024. However, trends within EIMEA have indicated a shift towards the Euro over time. During the first quarter of fiscal year 2025, management determined that changes in economic facts and circumstances, such as additional shifts in the currency mix of our operating income, represented a significant change that was other-than-temporary and required a change in functional currency from Pound Sterling to Euro at the Company’s U.K. subsidiary. In accordance with ASC 830-10-45-7, a change in functional currency should be made on the date that significant changes in economic facts and circumstances occurred. Although such a change could occur on any date during the fiscal year, the use of a date at the beginning of the most recent reporting period is permissible. Accordingly, the change in functional currency from Pound Sterling to Euro at the Company’s U.K. subsidiary was accounted for prospectively from September 1, 2024. In the period of a functional currency change, nonmonetary assets and liabilities at the impacted subsidiary are remeasured into the new functional currency using the exchange rate on the date the asset or liability arose. These amounts are then translated into the Company’s reporting currency, the U.S. Dollar, based on the exchange rate at the date of the change in functional currency. The difference between this amount and the prior translated balance was not material and was recorded in accumulated other comprehensive income in the Company’s consolidated balance sheets as of September 1, 2024. The balances previously recorded in accumulated comprehensive income for prior periods through August 31, 2024 were not reversed upon this prospective change in functional currency. Monetary assets and liabilities not denominated in the new functional currency, the Euro, will create transaction gains and losses subsequent to the change in functional currency. The Company does not expect that the impact of such gains and losses will be material to the Company’s consolidated statements of operations. Earnings per Common Share Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities that are required to be included in the computation of earnings per common share pursuant to the two-class method. Accordingly, the Company’s outstanding unvested, if any, and outstanding vested stock-based equity awards that provide such nonforfeitable rights to dividend equivalents are included as participating securities in the calculation of earnings per common share (“EPS”) pursuant to the two-class method. The Company calculates EPS using the two-class method, which provides for an allocation of net income between common stock and other participating securities based on their respective participation rights to share in dividends. Basic EPS is calculated by dividing net income available to common stockholders for the period by the weighted-average number of common shares outstanding during the period. Net income available to common stockholders for the period includes dividends paid to common stockholders during the period plus a proportionate share of undistributed net income allocable to common stockholders for the period; the proportionate share of undistributed net income allocable to common stockholders for the period is based on the proportionate share of total weighted-average common shares and participating securities outstanding during the period. Diluted EPS is calculated by dividing net income available to common stockholders for the period by the weighted-average number of common shares outstanding during the period increased by the weighted-average number of potentially dilutive common shares (dilutive securities) that were outstanding during the period if the effect is dilutive. Dilutive securities are F-15 Table of Contents comprised of various types of stock-based equity awards granted under the Company’s prior and current equity incentive plans. Stock-based Compensation The Company accounts for stock-based equity awards exchanged for employee and nonemployee director services in accordance with the authoritative guidance for share-based payments. 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. Vesting of the RSUs granted to nonemployee directors is over a period of up to one year from the date of grant, with shares to be issued pursuant to the vested RSUs upon termination of each nonemployee director’s service as a director of the Company. 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. The Company does not currently grant stock options. The fair values of restricted stock unit awards and performance share unit awards are based on the fair value of the Company’s common stock on the date that such awards are granted. The fair value of market share unit awards is determined using a Monte Carlo simulation model. For the performance share unit awards, the Company adjusts the compensation expense over the service period based upon the expected achievement level of the applicable performance condition. As the grant date fair value of market share unit awards reflects the probabilities of the actual number of such awards expected to vest, compensation expense for such awards is not adjusted based on the expected achievement level of the applicable performance condition. The Company records any excess tax benefits or deficiencies from settlements of its stock-based equity awards within the provision for income taxes on the Company’s consolidated statements of operations in the reporting periods in which the settlement of the equity awards occur. Segment Information 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. In addition, the Chief Operating Decision Maker assesses and measures revenue based on product groups. Recently Issued Accounting Standards In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments primarily require enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The amendments are effective for the Company’s annual periods beginning September 1, 2024, and interim periods beginning September 1, 2025, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. The Company has been evaluating this ASU to determine its impact on the Company’s disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for the Company’s annual periods beginning September 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is in the process of evaluating this ASU to determine its impact on the Company’s disclosures. Note 3. Acquisitions On March 4, 2024, WD-40 Holding Company Brasil Ltda., a wholly-owned subsidiary of the Company, acquired all of the issued and outstanding capital stock of the Company’s Brazilian distributor, Theron Marketing Ltda. (“Theron”), from M12 Participações Empresarias S.A. for total consideration of $ 6.9 million. Contingent consideration of $ 0.3 million is included in the total purchase price and recorded as a liability in the Company’s consolidated balance sheets. With this transaction, the Company began direct distribution within Brazil in March 2024. Under the terms of the purchase agreement, the Company acquired assets with approximate fair values of $ 3.0 million of intangible assets, including customer relationships and a non-compete agreement, $ 3.4 million of accounts receivable, $ 0.6 million of inventory, and assumed liabilities with an approximate fair value of $ 1.6 million. The total consideration F-16 Table of Contents paid less the fair value of net assets acquired resulted in $ 1.5 million of goodwill. Transaction-related expenses were not material. The following table summarizes the fair value of assets acquired and liabilities assumed on the consolidated balance sheets as of March 4, 2024 (in thousands): March 4, 2024 Fair value of consideration paid Cash, net of cash acquired $ 6,201 Other consideration 703 Total consideration paid 6,904 Fair value of assets acquired Definite-lived intangible assets 2,959 Tangible assets acquired 4,069 Total assets 7,028 Fair value of liabilities assumed 1,604 Fair value of net assets acquired 5,424 Goodwill incident to acquisition $ 1,481 The transaction was treated as a business combination. The Company recognized goodwill of $ 1.5 million as of March 4, 2024, which is calculated as the excess of the consideration exchanged as compared to the fair value of identifiable assets acquired. Goodwill is expected to be deductible for tax purposes. See Note 6 to the consolidated financial statements for further information on goodwill and other intangible assets. Pro forma results are not presented because they are not material to the Company’s consolidated financial results. Note 4. Inventories Inventories consisted of the following (in thousands): August 31, 2024 August 31, 2023 Product held at third-party contract manufacturers $ 8,199 $ 6,680 Raw materials and components 10,037 11,924 Work-in-process 521 497 Finished goods 60,331 67,421 Total $ 79,088 $ 86,522 F-17 Table of Contents Note 5. Property and Equipment and Capitalized Cloud-Based Software Implementation Costs Property and equipment, net, consisted of the following (in thousands): August 31, 2024 August 31, 2023 Machinery, equipment and vehicles $ 53,844 $ 49,804 Buildings and improvements 28,433 27,555 Computer and office equipment 6,652 6,151 Internal-use software 9,799 11,277 Furniture and fixtures 3,165 3,027 Capital in progress 3,344 7,937 Land 4,260 4,220 Subtotal 109,497 109,971 Less: accumulated depreciation and amortization ( 46,514 ) ( 43,180 ) Total $ 62,983 $ 66,791 As of August 31, 2024 and 2023, the Company’s consolidated balance sheets included $ 13.4 million and $ 11.0 million, respectively, of capitalized cloud-based implementation costs recorded as other assets within the Company’s consolidated balance sheets. These balances primarily consist of capitalized implementation costs related to a new cloud-based ERP system which the Company placed into service in the U.S. during the second quarter of fiscal year 2024. 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 ERP systems and certain related software are determined on an individual basis and may exceed five years depending on the estimated period of use. The Company has determined the useful life of the new ERP system to be ten years and is amortizing over such period. Accumulated amortization associated with these assets was $ 2.1 million and $ 0.7 million as of August 31, 2024 and 2023, respectively. Amortization expense associated with these assets was $ 1.2 million for the fiscal year ended August 31, 2024 and not significant for the fiscal year ended August 31, 2023. Note 6. Goodwill and Other Intangible Assets Goodwill The Company recorded goodwill on March 4, 2024 incident to its acquisition of Theron. At the time of acquisition a fair value study was conducted to determine the goodwill created as part of the transaction. The following table summarizes the changes in the carrying amounts of goodwill by segment (in thousands): Americas EIMEA Asia-Pacific Total Balance as of August 31, 2022 $ 85,402 8,569 1,209 95,180 Translation adjustments 34 291 — 325 Balance as of August 31, 2023 85,436 8,860 1,209 95,505 Goodwill incident to acquisition 1,481 — — 1,481 Translation adjustments ( 152 ) 151 — ( 1 ) Balance as of August 31, 2024 $ 86,765 $ 9,011 $ 1,209 $ 96,985 During the second quarter of fiscal year 2024, the Company performed its annual goodwill impairment test. 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, 2023. The Company performed a quantitative assessment to determine whether the fair value of any of its reporting units was less than each reporting unit’s carrying amount. The Company determined the fair value of its reporting units by following the income approach, which uses a discounted cash flow methodology. The discounted cash flow methodology bases the fair value of each reporting unit on the present value of its estimated future cash flows. The discounted cash flow methodology also requires that management make assumptions about certain key inputs in the F-18 Table of Contents estimated cash flows, including long-term sales forecasts or growth rates, terminal growth rates and discount rates, all of which are inherently uncertain. The forecast of future cash flows was primarily based on historical data and management’s best estimates of sales growth rates and operating margins for each reporting unit for the next five fiscal years. The discount rate used was based on management’s estimate of the current weighted-average cost of capital for each reporting unit. As these assumptions are largely unobservable, the estimated fair values fall within Level 3 of the fair value hierarchy. Based on quantitative analysis, the Company determined that the estimated fair value of each of its reporting units significantly exceeded their respective carrying values. As a result, the Company concluded that no impairment of its goodwill existed as of December 1, 2023. In addition, 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, 2023 through August 31, 2024. To date, there have been no impairment losses identified and recorded related to the Company’s goodwill. Definite-lived Intangible Assets The Company’s definite-lived intangible assets include the Spot Shot, Carpet Fresh, 1001, EZ REACH and GT85 trade names at both August 31, 2024 and 2023. In addition, intangible assets related to customer relationships and a non-compete agreement were acquired in connection with the Company’s purchase of Theron during the fiscal year ended August 31, 2024. All of these assets are included in other intangible assets, net in the Company’s consolidated balance sheets. The weighted-average useful life of the customer relationships and non-compete agreement acquired from Theron is 14.80 years. The following table summarizes the definite-lived intangible assets and the related accumulated amortization (in thousands): August 31, 2024 August 31, 2023 Gross carrying amount $ 35,904 $ 35,877 Definite-lived intangible assets acquired 2,959 — Accumulated amortization ( 32,641 ) ( 31,207 ) Net carrying amount $ 6,222 $ 4,670 There has been no impairment charge for the period ended August 31, 2024 and there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its existing definite-lived intangible assets. Changes in the carrying amounts of definite-lived intangible assets by segment are summarized below (in thousands): Americas EIMEA Asia-Pacific Total Balance as of August 31, 2022 $ 4,437 $ 1,151 $ — $ 5,588 Amortization expense $ ( 813 ) $ ( 192 ) $ — $ ( 1,005 ) Translation adjustments $ — $ 87 $ — $ 87 Balance as of August 31, 2023 $ 3,624 $ 1,046 $ — $ 4,670 Definite-lived intangible assets acquired $ 2,959 $ — $ — $ 2,959 Amortization expense $ ( 905 ) $ ( 201 ) $ — $ ( 1,106 ) Translation adjustments $ ( 324 ) $ 23 $ — $ ( 301 ) Balance as of August 31, 2024 $ 5,354 $ 868 $ — $ 6,222 The estimated amortization expense for the Company’s definite-lived intangible assets is not significant in any future individual fiscal year. Note 7. Leases 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. The Company also leases an automobile fleet in the United States. In addition, the Company has identified warehouse leases within certain third-party distribution center service contracts and a F-19 Table of Contents lease of a blending room within a third-party manufacturing contract. All other leases are insignificant to the Company’s consolidated financial statements. Right-of-use assets and lease liabilities consisted of the following (in thousands): August 31, 2024 August 31, 2023 Assets: Operating lease right-of-use assets 8,077 7,820 Finance lease right-of-use asset 3,534 — Total right-of-use assets $ 11,611 $ 7,820 Liabilities: Current operating lease liabilities (1) 2,294 2,144 Long-term operating lease liabilities 5,904 5,832 Total operating lease liabilities $ 8,198 $ 7,976 (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, 2024 (in thousands): Operating Leases Fiscal year 2025 2,625 Fiscal year 2026 2,033 Fiscal year 2027 1,508 Fiscal year 2028 845 Fiscal year 2029 601 Thereafter 1,521 Total undiscounted future cash flows $ 9,133 Less: Interest ( 935 ) Present value of lease liabilities $ 8,198 The Company recorded $ 2.3 million and $ 2.1 million in lease expense during the fiscal years ended August 31, 2024 and 2023, respectively. This lease expense was included in selling, general and administrative expenses. The Company recorded $ 1.0 million and $ 0.5 million of lease expense classified within cost of products sold for the fiscal years ended August 31, 2024, and 2023, respectively. During the fiscal year ended August 31, 2024 and 2023, the Company paid cash of $ 2.6 million and $ 2.4 million, respectively, related to lease liabilities. Variable lease expense under the Company’s lease agreements was not significant for both the fiscal years ended August 31, 2024 and 2023. As of August 31, 2024, the weighted-average remaining lease term was 5.0 years and the weighted-average discount rate was 5.0 % for the Company’s operating leases. As of August 31, 2023, the weighted-average remaining lease term was 5.9 years and the weighted-average discount rate was 3.4 % for the Company’s operating leases. The Company did no t have a significant amount of leases that commenced after August 31, 2024 that created rights and obligations to the Company. The Company had no significant short-term leases as of August 31, 2024. The Company obtained additional ROU assets of $ 1.7 million in exchange for lease obligations related to renewals of existing leases during fiscal year 2024. During the fiscal year ended August 31, 2024, the Company entered into a finance lease for a blending facility (the “Finance Lease”). As of August 31, 2023, the Company had $ 3.8 million of prepaid deposits, which converted to a right-of-use asset at the commencement of the Finance Lease during the fiscal year ended August 31, 2024. Since the Finance Lease was fully prepaid at commencement, no lease liability exists related to it. As of August 31, 2023, 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 were also not significant. F-20 Table of Contents Note 8. Accrued and Other Liabilities Accrued liabilities consisted of the following (in thousands): August 31, 2024 August 31, 2023 Accrued advertising and sales promotion expenses $ 15,091 $ 14,472 Accrued professional services fees 2,058 1,924 Accrued sales taxes and other taxes 2,885 2,618 Deferred revenue 4,288 4,552 Short-term operating lease liability 2,294 2,144 Other 4,656 4,290 Total $ 31,272 $ 30,000 Accrued payroll and related expenses consisted of the following (in thousands): August 31, 2024 August 31, 2023 Accrued incentive compensation $ 13,532 $ 6,698 Accrued payroll 4,559 4,298 Accrued profit sharing 4,403 3,561 Accrued payroll taxes 2,907 1,650 Other 654 515 Total $ 26,055 $ 16,722 Note 9. Debt As of August 31, 2024, the Company held borrowings under two separate agreements as detailed below. Note Purchase and Private Shelf Agreement 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”). As of August 31, 2024, the Company had outstanding balances on its series A, B and C notes issued under this Note Agreement. The Note Agreement was most recently amended on April 30, 2024 (the “Fourth Amendment”). The Fourth Amendment permitted the Company to enter into an amendment to its revolving credit agreement with Bank of America, N.A. and also included certain conforming amendments to the credit agreement, including the revision of financial and restrictive covenants. Credit Agreement On April 30, 2024, the Company and certain subsidiaries of the Company, entered into a Second Amended and Restated Credit Agreement with Bank of America, N.A. (the “Credit Agreement”). The Credit Agreement modified certain terms and conditions of the Company’s previous Amended and Restated Agreement dated March 16, 2020 (as amended on September 30, 2020, and November 29, 2021), and extended the maturity date for the revolving credit facility from September 30, 2025 to April 30, 2029. Borrowings under the Credit Agreement will be used for the Company’s various operating, investing and financing needs. The Company’s Credit Agreement decreased the revolving commitment for borrowing by the Company from $ 150.0 million to $ 125.0 million and decreased the sublimit from $ 100.0 million to $ 95.0 million for WD-40 Company Limited, a wholly owned operating subsidiary of the Company for Europe, India, the Middle East and Africa. In addition, the Company’s index rate under the Credit Agreement for U.S. Dollar borrowings changed from the Bloomberg Short-term Bank Yield Index rate to the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York. F-21 Table of Contents Short-term and long-term borrowings under the Company’s Credit Agreement and Note Agreement consisted of the following (in thousands): Issuance Maturities (calendar year) August 31, 2024 August 31, 2023 Credit Agreement – revolving credit facility (1)(3) Various 4/30/2029 27,836 $ 52,943 Note Agreement Series A Notes – 3.39 % fixed rate (2) 11/15/2017 2024-2032 14,800 15,600 Series B Notes – 2.50 % fixed rate (3) 9/30/2020 11/15/2027 26,000 26,000 Series C Notes – 2.69 % fixed rate (3) 9/30/2020 11/15/2030 26,000 26,000 Total borrowings 94,636 120,543 Short-term portion of borrowings ( 8,659 ) ( 10,800 ) Total long-term borrowings $ 85,977 $ 109,743 (1) The Company has the ability to refinance any draw under the line of credit with successive short-term borrowings through the maturity date. Outstanding draws for which management has 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, 2024, $ 20.0 million of this facility was classified as long-term and was entirely denominated in Euros. $ 7.8 million was classified as short-term and was denominated in U.S. Dollars. As of August 31, 2023, $ 42.9 million of this facility was classified as long-term and was denominated in Euros and Pounds Sterling. $ 10.0 million was classified as short-term and was denominated in U.S. Dollars. Euro and Pound Sterling denominated draws 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, 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) 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. 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 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. Each agreement also includes a most favored lender provision which requires that any time any other lender has the benefit of one or more financial or operational covenants that is different than, or similar to, but more restrictive than those contained in its own agreement, those covenants shall be immediately and automatically incorporated by reference to the other lender’s agreement. Both the Note Agreement and the Credit Agreement require the Company to adhere to the same financial covenants. For the financial covenants, the definition of consolidated EBITDA includes the add back of non-cash stock-based compensation to consolidated net income when arriving at consolidated EBITDA. The terms of the financial covenants are as follows: • The consolidated leverage ratio cannot be greater than three and a half to one. The consolidated leverage ratio means, as of any date of determination, the ratio of (a) consolidated funded indebtedness as of such date to (b) consolidated EBITDA for the most recently completed four fiscal quarters. • The consolidated interest coverage ratio cannot be less than three to one. The consolidated interest coverage ratio means, as of any date of determination, the ratio of (a) consolidated EBITDA for the most recently completed four fiscal quarters to (b) consolidated interest charges for the most recently completed four fiscal quarters As of August 31, 2024, the Company was in compliance with all debt covenants under both the Note Agreement and the Credit Agreement. F-22 Table of Contents Note 10. Share Repurchase Plan On June 19, 2023, the Company’s Board of Directors (the “Board”) approved a share repurchase plan (the “2023 Repurchase Plan”). Under the 2023 Repurchase Plan, which became effective on September 1, 2023, the Company is authorized to acquire up to $ 50.0 million of its outstanding shares through August 31, 2025. During the fiscal year ended August 31, 2024, the Company repurchased 34,250 shares at an average price of $ 236.32 per share, for a total cost of $ 8.1 million under this $ 50.0 million plan. Note 11. Earnings per Common Share The table below reconciles net income to net income available to common stockholders (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 Net income $ 69,644 $ 65,993 $ 67,329 Less: Net income allocated to participating securities ( 246 ) ( 272 ) ( 251 ) Net income available to common stockholders $ 69,398 $ 65,721 $ 67,078 The table below summarizes the weighted-average number of common shares outstanding included in the calculation of basic and diluted EPS (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 Weighted-average common shares outstanding, basic 13,554 13,578 13,668 Weighted-average dilutive securities 26 26 28 Weighted-average common shares outstanding, diluted 13,580 13,604 13,696 For the fiscal years ended August 31, 2024, 2023 and 2022, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 1,351 , 4,551 and 8,724 , respectively, were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive. Note 12. Revenue The following table presents the Company’s revenues by segment and major source (in thousands): Fiscal Year Ended August 31, 2024 Fiscal Year Ended August 31, 2023 Americas EIMEA Asia-Pacific Total Americas EIMEA Asia-Pacific Total WD-40 Multi-Use Product $ 216,769 $ 168,450 $ 67,706 $ 452,925 $ 202,651 $ 142,965 $ 62,056 $ 407,672 WD-40 Specialist $ 32,966 $ 30,876 $ 10,096 $ 73,938 $ 31,055 $ 27,029 $ 8,630 $ 66,714 Other maintenance products (1) $ 17,289 $ 12,741 $ 1,143 $ 31,173 $ 16,642 $ 11,507 $ 1,023 $ 29,172 Total maintenance products $ 267,024 $ 212,067 $ 78,945 $ 558,036 $ 250,348 $ 181,501 $ 71,709 $ 503,558 HCCP (2) $ 14,859 $ 8,978 $ 8,684 32,521 $ 16,424 $ 9,317 $ 7,956 33,697 Total net sales $ 281,883 $ 221,045 $ 87,629 $ 590,557 $ 266,772 $ 190,818 $ 79,665 $ 537,255 (1) Other maintenance products consist of the 3-IN-ONE and GT85 brands. (2) Homecare and cleaning products (“HCCP”). The Company recorded approximately $ 37.4 million and $ 33.3 million in rebates/other discounts as a reduction to sales during fiscal years 2024 and 2023, respectively. The Company had a $ 14.8 million and $ 11.1 million balance in rebate/other discount liabilities as of August 31, 2024 and 2023, respectively, which are included in accrued liabilities on the Company’s consolidated balance sheets. The Company recorded approximately $ 5.8 million and $ 5.6 million in cash discounts as a reduction to sales during fiscal years 2024 and 2023, respectively. The Company had a $ 0.6 million balance in the allowance for cash discounts as of August 31, 2024 and 2023. F-23 Table of Contents The Company had contract liabilities, which consist of deferred revenue related to undelivered products, of $ 4.3 million and $ 4.6 million as of August 31, 2024 and 2023, respectively. All of the $ 4.6 million that was included in contract liabilities as of August 31, 2023 was recognized to revenue during fiscal year 2024. Contract assets are recorded if the Company has satisfied a performance obligation but does not yet have an unconditional right to consideration. The Company did not have any contract assets as of August 31, 2024 and 2023. The Company has an unconditional right to payment for all trade and other accounts receivable on the Company’s consolidated balance sheets. The Company’s refund liability for sales returns was not significant as of August 31, 2024 and 2023. The Company records an amount to other current assets for the value of inventory that represents the right to recover products from customers associated with sales returns, which was not significant as of August 31, 2024 and 2023. Note 13. Commitments and Contingencies Purchase Commitments The Company has ongoing relationships with various suppliers (contract manufacturers) that manufacture the Company’s products, and third-party distribution centers that warehouse and ship the Company’s products to customers. The contract manufacturers maintain title and control of certain raw materials and components, materials utilized in finished products, and the finished products themselves until shipment to the Company’s third-party distribution centers or customers in accordance with agreed-upon shipment terms. Although the Company has contractual minimum purchase obligations with certain contract manufacturers, such obligations are either immaterial or below the volume of goods that the Company has historically purchased. In the ordinary course of business, supply needs are communicated by the Company to its contract manufacturers based on orders and short-term projections, ranging from two months to six months . The Company is committed to purchase the products produced by the contract manufacturers based on the projections provided. 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. The amounts for inventory purchased under termination commitments have been immaterial. In addition to the commitments to purchase products from contract manufacturers described above, the Company may also enter into commitments with other manufacturers to purchase finished goods and components to support innovation and and/or supply chain initiatives. As of August 31, 2024, no such commitments were outstanding. Litigation 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, 2024, 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 As permitted under Delaware law, the Company has agreements whereby it indemnifies senior officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not capped; however, the Company maintains Director and Officer insurance coverage that mitigates the Company’s exposure with respect to such obligations. As a result of the Company’s insurance coverage, management believes that the estimated fair value of these indemnification agreements is minimal. Thus, no liabilities have been recorded for these agreements as of August 31, 2024. From time to time, the Company enters into indemnification agreements with certain parties in the ordinary course of business, including agreements with lenders, lessors, contract manufacturers, marketing distributors, customers and certain F-24 Table of Contents vendors. All such indemnification agreements are entered into in the context of the particular agreements and are provided in an attempt to allocate risk of loss in connection with the consummation of the underlying contractual arrangements. Although the maximum amount of future payments that the Company could be required to make under these indemnification agreements is not capped, management believes that the Company maintains adequate levels of insurance coverage to protect the Company with respect to most potential claims arising from such agreements and that such agreements do not otherwise have value separate and apart from the liabilities incurred in the ordinary course of the Company’s business. Thus, no liabilities have been recorded with respect to such indemnification agreements as of August 31, 2024. Note 14. Income Taxes Income before income taxes consisted of the following (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 United States $ 47,345 $ 49,871 $ 47,427 Foreign (1) 44,163 35,292 36,681 Income before income taxes $ 91,508 $ 85,163 $ 84,108 (1) Included in these amounts are income before income taxes for the EIMEA segment of $ 31.4 million, $ 25.6 million and $ 30.3 million for the fiscal years ended August 31, 2024, 2023 and 2022, respectively. The provision for income taxes consisted of the following (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 Current: Federal $ 9,559 $ 9,973 $ 7,487 State 820 1,039 861 Foreign 12,596 9,023 8,114 Total current 22,975 20,035 16,462 Deferred: United States ( 1,413 ) ( 806 ) 6 Foreign 302 ( 59 ) 311 Total deferred ( 1,111 ) ( 865 ) 317 Provision for income taxes $ 21,864 $ 19,170 $ 16,779 F-25 Table of Contents Deferred tax assets and deferred tax liabilities consisted of the following (in thousands): August 31, 2024 August 31, 2023 Deferred tax assets: Accrued payroll and related expenses $ 1,321 $ 1,110 Reserves and accruals 2,166 1,436 Research and development expenses 1,520 1,125 Stock-based compensation expense 2,622 2,394 Uncertain tax positions and related interest 1,266 991 Uniform capitalization 1,774 2,383 Tax credit carryforwards 4,197 3,918 Other 2,673 2,673 Total gross deferred tax assets 17,539 16,030 Valuation allowance ( 4,305 ) ( 3,960 ) Total net deferred tax assets 13,234 12,070 Deferred tax liabilities: Property and equipment, net ( 3,940 ) ( 4,215 ) Amortization of tax goodwill and intangible assets ( 15,458 ) ( 15,415 ) Other ( 1,909 ) ( 1,544 ) Total deferred tax liabilities ( 21,307 ) ( 21,174 ) Net deferred tax liabilities $ ( 8,073 ) $ ( 9,104 ) The Company had state net operating loss (“NOL”) carryforwards of $ 6.3 million as of August 31, 2024, which generated a net deferred tax asset of $ 0.4 million. The state NOL carryforwards, if unused, will expire between fiscal years 2025 and 2044. The Company also had tax credit carryforwards of $ 4.2 million as of August 31, 2024, of which $ 4.1 million is attributable to U.K. tax credit carryforwards, which do not expire. Future utilization of the U.K. tax credit carryforwards and certain state carryforwards is uncertain and is dependent upon several factors that may not occur, including the generation of future taxable income in certain jurisdictions. At this time, management does not conclude that it is “more likely than not” that all of the related deferred tax assets will be realized. Accordingly, the Company recorded a net increase in its valuation allowance of $ 0.3 million during the fiscal year ended August 31, 2024 which resulted in a cumulative valuation allowance recorded against the related deferred tax asset associated with the U.K. tax credit carryforwards of $ 3.9 million and certain state carryforwards of $ 0.4 million as of August 31, 2024. A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 Amount computed at U.S. statutory federal tax rate $ 19,217 $ 17,884 $ 17,662 Effect of foreign operations 3,339 1,583 317 Net benefit from GILTI/FDII ( 2,696 ) ( 2,071 ) ( 2,002 ) Uncertain tax positions and related interest 947 1,377 273 Other 1,057 397 529 Provision for income taxes $ 21,864 $ 19,170 $ 16,779 The provision for income taxes was 23.9 % and 22.5 % of income before income taxes for the fiscal years ended August 31, 2024 and 2023, respectively. The increase in the effective income tax rate from period to period was primarily due to income taxed at higher tax rates in certain foreign jurisdictions from period to period. F-26 Table of Contents Reconciliations of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands): Fiscal Year Ended August 31, 2024 2023 Unrecognized tax benefits – beginning of fiscal year $ 9,275 $ 9,251 Net increases – current period tax positions 184 191 Expirations of statute of limitations for assessment ( 312 ) ( 167 ) Unrecognized tax benefits – end of fiscal year $ 9,147 $ 9,275 Gross unrecognized tax benefits totaled $ 9.1 million and $ 9.3 million for the fiscal years ended August 31, 2024 and 2023, respectively, of which $ 9.0 million and $ 9.1 million, 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 $ 1.2 million and $ 1.8 million for the fiscal years ended August 31, 2024 and 2023, respectively. The total balance of accrued interest and penalties related to uncertain tax positions was $ 4.6 million and $ 3.4 million for the fiscal years ended August 31, 2024 and 2023, respectively. Total unrecognized tax benefits including interest and penalties were $ 13.7 million and $ 12.7 million as of August 31, 2024 and 2023, respectively, and are recorded in other long-term liabilities in the Company’s consolidated balance sheets. The Company is subject to taxation in the U.S. and in various state and foreign jurisdictions. Due to expired statutes and closed audits, the Company’s federal income tax returns for years prior to fiscal year 2018 are not subject to examination by the U.S. Internal Revenue Service. The Company is currently under audit in various state jurisdictions for fiscal years 2021 through 2022. Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2020 are no longer subject to examination. The Company has estimated that up to $ 13.1 million of unrecognized tax benefits, including interest and penalties, related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months. This includes $ 12.7 million of unrecognized tax benefits, including interest and penalties, associated with the Tax Cuts and Jobs Act’s mandatory one-time “toll tax” on unremitted foreign earnings. Audit outcomes and the timing of settlements are subject to significant uncertainty. Income taxes receivable of $ 0.5 million and $ 1.1 million are recorded in the Company’s consolidated balance sheets as of August 31, 2024 and 2023, respectively. Income taxes receivable are included in other current assets, which also consists of miscellaneous prepaid expenses and deposits. Note 15. Stock-based Compensation As of August 31, 2024, the Company had one stock incentive plan, the WD-40 Company 2016 Stock Incentive Plan (the “2016 Plan”), which was approved by the Company’s stockholders effective as of December 13, 2016 and which was amended and restated on December 12, 2023. The 2016 Plan permits the granting of various stock-based equity awards, including non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards to employees, directors and consultants. To date through August 31, 2024, the Company had granted awards of restricted stock units (“RSUs”), market share units (“MSUs”), deferred performance units (“DPUs”) and performance share units (“PSUs”) under the 2016 Plan. Additionally, as of August 31, 2024, there were still certain outstanding awards which had been granted under the Company’s prior stock incentive plan. The 2016 Plan is administered by the Board or the Compensation and People Committee or other designated committee of the Board (the “Committee”). All stock-based equity awards granted under the 2016 Plan are subject to the specific terms and conditions as determined by the Committee at the time of grant of such awards in accordance with the various terms and conditions specified for each award type per the 2016 Plan. On December 12, 2023, the total number of shares of common stock authorized for issuance pursuant to grants of awards was increased from 1,000,000 to 2,000,000 in connection with the amendment and restatement of the 2016 Plan. As of August 31, 2024, 1,106,326 shares of common stock remained available for future issuance pursuant to grants of awards under the 2016 Plan. The shares of common stock to be issued pursuant to awards under the 2016 Plan may be authorized shares not previously issued, or treasury shares. The Company has historically issued new authorized shares not previously issued upon the settlement of the various stock-based equity awards under its equity incentive plans. F-27 Table of Contents Vesting of the RSUs granted to nonemployee directors is over a period of up to one year from the date of grant, with shares to be issued pursuant to the vested RSUs upon termination of each nonemployee director’s service as a director of the Company. Vesting of the RSUs granted to certain high level employees is over a period of three years from the date of grant, subject to potential earlier vesting in the event of retirement of the holder of the award in accordance with the award agreement, with shares to be issued pursuant to the vested RSUs at the time of vest. The nonemployee director RSU holders are entitled to receive dividend equivalents with respect to their vested RSUs, payable in cash as and when dividends are declared by the Board. Vesting of the MSUs granted to certain high level employees follows a performance measurement period of three fiscal years commencing with the Company’s fiscal year in which the MSU awards are granted (the “Measurement Period”). Shares will be issued pursuant to the vested MSUs following the conclusion of the applicable MSU Measurement Period after the Committee’s certification of achievement of the applicable performance measure for such awards and the vesting of the MSU awards and the applicable percentage of the target number of MSU shares to be issued. The recipient must remain employed with the Company for vesting purposes until the date on which the Committee certifies achievement of the applicable performance measure for the MSU awards, subject to potential pro-rata vesting in the event of earlier retirement of the holder of the award in accordance with the award agreement. During fiscal year 2021, PSU awards were granted for the first time under the 2016 Plan in October 2020 and granting of new DPUs was discontinued by the Company. No DPUs were granted in or after fiscal year 2021. Although certain vested DPU awards granted in prior periods remain outstanding due to a deferred settlement feature contained within these award agreements, the expense associated with these awards has been fully recognized in prior periods. Many features of the Company’s PSU award agreements are similar to the discontinued DPU awards with the exception of the timing and terms of issuances. Vested DPUs contain a deferred settlement feature wherein the awards must be held until termination of employment, prior to which the recipients are entitled to dividend equivalents, with vested shares to be issued six months following each such recipient’s separation from service from the Company. Vested PSUs are issuable prior to separation from service but contain a period of restriction, wherein the recipient cannot sell or otherwise dispose of the stock until six months following separation from service from the Company. Vesting of the PSUs granted to certain high level employees follows a performance measurement period of one fiscal year that is the same fiscal year in which the PSU awards are granted (the “Measurement Year”). A number of PSUs equal to the applicable percentage of the maximum number of PSUs awarded will be confirmed as vested and issuable following the conclusion of the applicable PSU Measurement Year after the Committee’s certification of achievement of the applicable performance measure for such awards. The recipient must remain employed with the Company for vesting purposes until August 31 of the Measurement Year, subject to potential pro-rata vesting in the event of earlier retirement of the holder of the award in accordance with the award agreement. Stock-based compensation expense is amortized on a straight-line basis over the requisite service period for the entire award. Stock-based compensation expense related to the Company’s stock-based equity awards is as follows by award type (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 RSU compensation expense $ 3,612 $ 4,254 $ 4,153 MSU compensation expense 2,282 2,180 2,544 PSU compensation expense (1) 641 — — Total $ 6,535 $ 6,434 $ 6,697 (1) PSU awards contain performance conditions for which accrual of expense is based on the probable outcome of the performance conditions. PSUs pertaining to the measurement year of fiscal year 2024 vested at 16.3 % since the performance conditions were partially achieved. Vesting of PSUs pertaining to the measurement years of fiscal years 2023 and 2022 was deemed not probable at the end of each respective fiscal year and the PSUs were subsequently forfeited. The Company recorded deferred tax assets related to such stock-based compensation of $ 1.4 million, $ 1.3 million and $ 1.5 million for the fiscal years ended August 31, 2024, 2023 and 2022, respectively. As of August 31, 2024, the total unamortized compensation cost related to non-vested stock-based equity awards was $ 1.3 million and $ 3.3 million for RSUs and MSUs, respectively, which the Company expects to recognize over remaining weighted-average vesting periods of 1.72 and 1.86 years for RSUs and MSUs, respectively. No unamortized compensation cost for DPUs or PSUs remained as of August 31, 2024. F-28 Table of Contents Restricted Stock Units The estimated fair value of each of the Company’s RSU awards was determined on the date of grant based on the closing market price of the Company’s common stock on the date of grant for those RSUs which are entitled to receive dividend equivalents with respect to the RSUs, or based on the closing market price of the Company’s common stock on the date of grant less the grant date present value of expected dividends during the vesting period for those RSUs which are not entitled to receive dividend equivalents with respect to the RSUs. A summary of the Company’s restricted stock unit activity is as follows (in thousands, except share and per share amounts): Restricted Stock Units Number of Units Weighted-Average Grant Date Fair Value Per Unit Aggregate Intrinsic Value Outstanding at August 31, 2023 79,816 $ 144.24 Granted 19,201 $ 206.85 Converted to shares of common stock ( 28,658 ) $ 137.42 Forfeited ( 211 ) $ 188.85 Outstanding at August 31, 2024 70,148 $ 164.03 $ 18,438 Vested at August 31, 2024 45,113 $ 149.81 $ 11,858 The weighted-average grant date fair value of all RSUs granted was $ 206.85 , $ 167.05 and $ 217.03 during the fiscal years ended August 31, 2024, 2023 and 2022, respectively. The total intrinsic value of all RSUs converted to shares of common stock was $ 6.7 million, $ 3.7 million and $ 3.0 million for the fiscal years ended August 31, 2024, 2023 and 2022, respectively. The income tax benefits from RSUs converted to shares of common stock totaled $ 1.3 million, $ 0.8 million and $ 0.6 million for the fiscal years ended August 31, 2024, 2023 and 2022, respectively. Market Share Units The MSUs are market performance-based awards that vest with respect to the applicable percentage of the target number of MSU shares based on relative total stockholder return (“TSR”) for the Company as compared to the total return for the Russell 2000® Index (the “Index”) over the performance Measurement Period. The ultimate number of MSUs that vest may range from 0 % to 200 % of the original target number of shares depending on the relative achievement of the TSR performance measure at the end of the Measurement Period. 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. 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; therefore, the compensation expense for the MSU awards is not adjusted based on the actual number of such MSU awards to ultimately vest. The following weighted-average assumptions for MSU grants for the last three fiscal years were used in the Monte Carlo simulation model: Fiscal Year Ended August 31, 2024 2023 2022 Expected volatility 34.4 % 37.5 % 32.7 % Risk-free interest rate 4.8 % 4.3 % 0.6 % Expected dividend yield 0.0 % 0.0 % 0.0 % 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 2.90 -year period for F-29 Table of Contents MSUs granted during the fiscal year ended August 31, 2024 and over the most recent 2.89 year periods for both MSUs granted during fiscal years ended August 31, 2023 and 2022, 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. Treasury zero-coupon bill with a remaining term equivalent to the remaining performance Measurement Period. The expected dividend yield of zero was used in the Monte Carlo simulation model for the purposes of computing the relative TSR of the Company compared to the Index since it is the mathematical equivalent to reinvesting dividends in each issuing entity over the performance Measurement Period. A summary of the Company’s market share unit activity is as follows (in thousands, except share and per share amounts): Market Share Units Number of Units Weighted-Average Grant Date Fair Value Per Unit Aggregate Intrinsic Value Outstanding at August 31, 2023 33,949 $ 198.05 Granted 14,263 $ 226.30 Forfeited ( 11,578 ) $ 185.15 Outstanding at August 31, 2024⁽¹⁾ 36,634 $ 213.13 $ 9,629 (1) This figure represents the total number of shares underlying MSU grants assuming achievement of the target number of shares at 100 %. As the ultimate number of shares that vest could be as high as 200 % of the target, the Company may be required to issue additional shares to satisfy outstanding MSU award grants. The weighted-average grant date fair value of all MSUs granted was $ 226.30 , $ 184.15 and $ 232.99 during the fiscal years ended August 31, 2024, 2023 and 2022, respectively. There were no conversions of MSUs to shares of common stock for the fiscal years ended August 31, 2024 and 2023. The total intrinsic value of all MSUs converted to shares of common stock was $ 4.4 million for the fiscal year ended August 31, 2022. The income tax benefits from MSUs converted to shares of common stock totaled $ 0.9 million for the fiscal year ended August 31, 2022. Performance Share Units The PSU awards provide for performance-based vesting over a measurement period of the fiscal year in which the PSU awards are granted. The performance vesting provisions of the PSUs are based on relative achievement within an established performance measure range of the Company’s reported earnings before interest, income taxes, depreciation in operating departments, and amortization computed on a consolidated basis for the Measurement Year, before deduction of the stock-based compensation expense for the Vested PSUs and excluding other non-operating income and expense amounts (“Adjusted Global EBITDA”). The ultimate number of PSUs that vest may range from 0 % to 100 % of the original maximum number of PSUs awarded depending on the relative achievement of the Adjusted Global EBITDA performance measure at the end of the Measurement Year. The estimated fair value of each of the Company’s PSU awards was determined on the date of grant based on the closing market price of the Company’s common stock on the date of grant less the grant date present value of expected dividends during the vesting period for the PSUs, which are not entitled to receive dividend equivalents with respect to the unvested PSUs. F-30 Table of Contents A summary of the Company’s performance share unit activity is as follows (in thousands, except share and per share amounts): Performance Share Units Number of Units Weighted-Average Grant Date Fair Value Per Unit Aggregate Intrinsic Value Outstanding at August 31, 2023 21,148 $ 170.16 Granted 20,039 $ 198.94 Forfeited ( 21,529 ) $ 170.67 Outstanding at August 31, 2024 19,658 $ 198.94 $ 5,167 The weighted-average grant date fair value of all PSUs granted was $ 198.94 , $ 170.16 and $ 227.24 during the fiscal years ended August 31, 2024, 2023, and 2022, respectively. There were no conversions of PSUs to shares of common stock for the fiscal years ended August 31, 2024 and 2023. 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 benefit from PSUs converted to shares of common stock totaled $ 0.8 million for the fiscal year ended August 31, 2022. Deferred Performance Units During fiscal year 2021, the Company discontinued the granting of new DPU awards. 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 shares of common stock issued to recipients following separation from service from the Company were not material to the Company’s consolidated financial statements and related disclosures during fiscal years 2024, 2023 and 2022. Note 16. Other Benefit Plans The Company has a WD-40 Company Profit Sharing/401(k) Plan and Trust (the “Profit Sharing/401(k) Plan”) whereby regular U.S. employees who have completed certain minimum service requirements can defer a portion of their income through contributions to a trust. The Profit Sharing/401(k) Plan provides for Company contributions to the trust, as approved by the Board, as follows: 1) matching contributions to each participant up to 50 % of the first 6.6 % of compensation contributed by the participant; 2) fixed non-elective contributions in the amount equal to 10 % of eligible compensation; and 3) a discretionary non-elective contribution in an amount to be determined by the Board up to 5 % of eligible compensation. The Company’s contributions are subject to overall employer contribution limits and may not exceed the amount deductible for income tax purposes. The Profit Sharing/401(k) Plan may be amended or discontinued at any time by the Company. The Company’s contribution expense for the Profit Sharing/401(k) Plan was $ 5.2 million for fiscal year 2024, $ 4.6 million for fiscal year 2023 and $ 4.1 million for fiscal year 2022. The Company’s international subsidiaries have similar benefit plan arrangements, dependent upon the local applicable laws and regulations. The plans provide for Company contributions to an appropriate third-party plan, as approved by each subsidiary’s board of directors. The Company’s contribution expense related to the international plans was $ 2.4 million for the fiscal year ended August 31, 2024, $ 2.1 million for the fiscal year ended August 31, 2023 and $ 2.1 million for the fiscal year ended August 31, 2022. Note 17. Business Segments and Foreign Operations The Company evaluates the performance of its segments and allocates resources to them based on sales and income from operations. The Company is organized on the basis of geographical area into the following three segments: the Americas; EIMEA; and Asia-Pacific. Segment data does not include inter-segment revenues. Unallocated corporate expenses are general corporate overhead expenses not directly attributable to the business segments and are reported separate from the Company’s identified segments. Corporate overhead costs include expenses for the Company’s accounting and finance, information technology, human resources, research and development, quality control and executive management functions, F-31 Table of Contents as well as all direct costs associated with public company compliance matters including legal, audit and other professional services costs. Summary information about reportable segments is as follows (in thousands): Americas EIMEA Asia-Pacific Unallocated Corporate (1) Total Fiscal Year Ended August 31, 2024 Net sales $ 281,883 $ 221,045 $ 87,629 $ — $ 590,557 Income from operations $ 65,037 $ 46,809 $ 29,714 $ ( 45,209 ) $ 96,351 Depreciation and amortization expense (2) $ 4,581 $ 4,374 $ 229 $ 272 $ 9,456 Interest income $ 39 $ 313 $ 122 $ — $ 474 Interest expense $ 2,590 $ 1,691 $ 6 $ — $ 4,287 Fiscal Year Ended August 31, 2023 Net sales $ 266,772 $ 190,818 $ 79,665 $ — $ 537,255 Income from operations $ 60,797 $ 39,456 $ 25,888 $ ( 36,417 ) $ 89,724 Depreciation and amortization expense (2) $ 3,656 $ 3,987 $ 204 $ 304 $ 8,151 Interest income $ 4 $ 111 $ 116 $ — $ 231 Interest expense $ 3,834 $ 1,775 $ 5 $ — $ 5,614 Fiscal Year Ended August 31, 2022 Net sales $ 240,233 $ 204,688 $ 73,899 $ — $ 518,820 Income from operations $ 54,198 $ 42,058 $ 22,590 $ ( 31,516 ) $ 87,330 Depreciation and amortization expense (2) $ 4,320 $ 3,356 $ 275 $ 343 $ 8,294 Interest income $ 2 $ — $ 100 $ — $ 102 Interest expense $ 2,165 $ 574 $ 3 $ — $ 2,742 (1) These expenses are reported separately from the Company’s identified segments and are included in selling, general and administrative expenses on the Company’s consolidated statements of operations. (2) Amortization presented above includes amortization of definite-lived intangible assets and excludes amortization of implementation costs associated with cloud computing arrangements. The Company’s Chief Operating Decision Maker does not review assets by segment as part of the financial information provided and therefore, no asset information is provided in the above table. Net sales by product group are as follows (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 Maintenance products $ 558,036 $ 503,558 $ 485,326 Homecare and cleaning products 32,521 33,697 33,494 Total $ 590,557 $ 537,255 $ 518,820 F-32 Table of Contents Net sales and long-lived assets by geographic area are as follows (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 Net Sales by Geography: United States $ 206,963 $ 207,629 $ 176,863 International 383,594 329,626 341,957 Total $ 590,557 $ 537,255 $ 518,820 Long-lived Assets by Geography (1) : United States $ 30,057 $ 33,263 $ 35,375 International 32,926 33,528 30,602 Total $ 62,983 $ 66,791 $ 65,977 (1) Includes tangible assets and property and equipment, net, attributed to the geographic location in which such assets are located. Note 18. Subsequent Events Dividend Declaration On October 4, 2024, the Board declared a cash dividend of $ 0.88 per share payable on October 31, 2024 to stockholders of record on October 18, 2024. Reclassification to Held for Sale of Homecare and Cleaning Product Portfolio In the first quarter of fiscal year 2025, the Company’s homecare and cleaning product portfolio in the Americas and EIMEA segments met the criteria to be classified as held for sale. Management has determined that the potential sale of these brands does not represent a strategic shift having a major effect on the Company’s operations and financial results and therefore does not meet the criteria for classification as discontinued operations in the first quarter of fiscal year 2025. Assets and liabilities included as part of the disposal group classified as held for sale are not material to the financial statements. F-33