What changed in this filing

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Item 1. Financial Statements

2025-01-10 compared with 2024-07-10 · 133 added, 192 removed, 392 unchanged (45% of the section changed)

33 unchanged sentences

Common stock — authorized 36,000,000 shares, $ 0.001 par value;

19,924,268 and 19,905,815 shares issued at May 31, 2024 and August 31, 2023, respectively;

and 13,547,637 and 13,563,434 shares outstanding at May 31, 2024 and August 31, 2023, respectively

19,940,370 and 19,925,212 shares issued at November 30, 2024 and August 31, 2024, respectively;

and 13,549,989 and 13,548,581 shares outstanding at November 30, 2024 and August 31, 2024, respectively

Additional paid-in capital 174,258 175,642

1 unchanged sentence

Accumulated other comprehensive loss ( 35,453 ) ( 29,268 )

Common stock held in treasury, at cost — 6,376,631 and 6,342,381 shares at May 31, 2024 and August 31, 2023, respectively

Common stock held in treasury, at cost — 6,390,381 and 6,376,631 shares at November 30, 2024 and August 31, 2024, respectively

( 419,426 ) ( 415,799 )

5 unchanged sentences

(Unaudited and in thousands, except per share amounts)

Three Months Ended May 31, Nine Months Ended May 31,

2024 2023 2024 2023

Three Months Ended November 30,

Net sales $ 153,495 $ 140,416

10 unchanged sentences

Interest expense ( 873 ) ( 1,146 )

Other (expense) income, net ( 283 ) 243 ( 516 ) 558

Other expense, net ( 141 ) ( 40 )

Income before income taxes 24,256 23,072

11 unchanged sentences

(Unaudited and in thousands)

Three Months Ended May 31, Nine Months Ended May 31,

2024 2023 2024 2023

Three Months Ended November 30,

Net income $ 18,925 $ 17,482

22 unchanged sentences

Balance at November 30, 2024 19,940,370 $ 20 $ 174,258 $ 506,898 $ ( 35,453 ) 6,390,381 $ ( 419,426 ) $ 226,297

Issuance of common stock under share-based compensation plan, net of shares withheld for taxes 8,554 - ( 1,742 ) ( 1,742 )

Stock-based compensation 1,866 1,866

Cash dividends ($ 0.88 per share)

( 11,976 ) ( 11,976 )

Repurchases of common stock 11,500 ( 2,905 ) ( 2,905 )

Foreign currency translation adjustment ( 433 ) ( 433 )

Net income 15,536 15,536

Balance at February 29, 2024 19,920,049 $ 20 $ 173,263 $ 487,233 $ ( 31,249 ) 6,365,381 $ ( 412,989 ) $ 216,278

Issuance of common stock under share-based compensation plan, net of shares withheld for taxes 4,219 - - -

Stock-based compensation 914 914

Cash dividends ($ 0.88 per share)

( 11,966 ) ( 11,966 )

Repurchases of common stock 11,250 ( 2,775 ) ( 2,775 )

Foreign currency translation adjustment ( 51 ) ( 51 )

Net income 19,842 19,842

Balance at May 31, 2024 19,924,268 $ 20 $ 174,177 $ 495,109 $ ( 31,300 ) 6,376,631 $ ( 415,764 ) $ 222,242

See accompanying notes to condensed consolidated financial statements (unaudited).

WD-40 COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited and in thousands, except share and per share amounts)

Common Stock Additional

14 unchanged sentences

Balance at November 30, 2023 19,911,495 $ 20 $ 173,139 $ 483,673 $ ( 30,816 ) 6,353,881 $ ( 410,084 ) $ 215,932

Stock-based compensation 2,261 2,261

Cash dividends ($ 0.83 per share)

( 11,324 ) ( 11,324 )

Repurchases of common stock 9,250 ( 1,569 ) ( 1,569 )

Foreign currency translation adjustment 8 8

Net income 16,526 16,526

Balance at February 28, 2023 19,896,477 $ 20 $ 170,353 $ 464,641 $ ( 34,865 ) 6,318,131 $ ( 402,877 ) $ 197,272

Stock-based compensation 813 813

Cash dividends ($ 0.83 per share)

( 11,315 ) ( 11,315 )

Repurchases of common stock 10,000 ( 1,793 ) ( 1,793 )

Foreign currency translation adjustment 1,955 1,955

Net income 18,895 18,895

Balance at May 31, 2023 19,896,477 $ 20 $ 171,166 $ 472,221 $ ( 32,910 ) 6,328,131 $ ( 404,670 ) $ 205,827

See accompanying notes to condensed consolidated financial statements (unaudited).

2 unchanged sentences

(Unaudited and in thousands)

Nine Months Ended May 31,

Three Months Ended November 30,

Operating activities:

2 unchanged sentences

Depreciation and amortization 2,075 2,261

Net (gains) losses on sales and disposals of property and equipment ( 141 ) 20

Amortization of cloud computing implementation costs 416 57

Net gains on sales and disposals of property and equipment ( 41 ) ( 58 )

Deferred income taxes 522 625

Stock-based compensation 1,499 2,271

Amortization of cloud computing implementation costs 650 212

Unrealized foreign currency exchange losses (gains) 108 ( 1,780 )

Unrealized foreign currency exchange (gains) losses ( 330 ) 322

Provision for credit losses 994 42

12 unchanged sentences

Proceeds from sales of property and equipment 124 115

Acquisition of business, net of cash acquired ( 6,201 ) -

Net cash used in investing activities ( 567 ) ( 671 )

3 unchanged sentences

Repayments of long-term senior notes ( 400 ) ( 400 )

Net repayments from revolving credit facility ( 11,592 ) ( 11,917 )

Net proceeds (repayments) from revolving credit facility 14,771 ( 9,713 )

Shares withheld to cover taxes upon conversions of equity awards ( 2,883 ) ( 678 )

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents ( 2,051 ) 431

Net (decrease) increase in cash and cash equivalents ( 2,843 ) 560

Net increase in cash and cash equivalents 8,215 2,174

Cash and cash equivalents at beginning of period 46,699 48,143

9 unchanged sentences

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®.

Certain of our homecare and cleaning businesses are classified as held for sale as of November 30, 2024.

Please refer to Note 3 Assets Held for Sale for additional information.

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

19 unchanged sentences

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 differ materially from the Company’s estimates in future periods, which could materially affect its results of operations and financial condition.

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.

Foreign Currency Forward Contracts

6 unchanged sentences

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 condensed consolidated balance sheets.

At May 31, 2024, the Company had a notional amount of $ 4.1 million outstanding in foreign currency forward contracts, which matured in June 2024.

Unrealized net gains and losses related to foreign currency forward contracts were not significant at May 31, 2024 and August 31, 2023.

Realized net gains and losses related to foreign currency forward contracts were not significant for the three and nine months ended May 31, 2024 and 2023.

At November 30, 2024, the Company had a notional amount of $ 8.3 million outstanding in foreign currency forward contracts, which will mature in January 2025.

Unrealized net gains and losses related to foreign currency forward contracts were not significant at November 30, 2024 and August 31, 2024.

Realized net gains and losses related to foreign currency forward contracts were not significant for the three months ended November 30, 2024 and 2023.

Both unrealized and realized net gains and losses are recorded in other (expense) income, net in the Company’s condensed consolidated statements of operations.

4 unchanged sentences

The functional currency of the Company’s U.K.

subsidiary, the entity in which the EIMEA results are generated, is the Pound Sterling.

Trends within EIMEA have indicated a shift towards the Euro over time, particularly those pertaining to sales, cost of products sold and operating expenses.

Management expects these trends may become other-than-temporary in a future period, which could result in a change in functional currency from Pound Sterling to Euro in that period.

While the Company is in the process of evaluating the materiality of the overall impact of such a change, it does not expect that the impact to income from operations would be material.

subsidiary, the entity in which the EIMEA results are generated, has been the 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.

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 loss in the Company’s consolidated balance sheet as of September 1, 2024.

The balances previously recorded in accumulated comprehensive loss 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.

Fair Value of Financial Instruments

5 unchanged sentences

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 May 31, 2024, the Company had no assets or liabilities that are measured at fair value in the financial statements on a recurring basis, except for foreign currency forward contracts, which are classified as Level 2 within the fair value hierarchy.

As of November 30, 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.

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 $ 58.9 million as of May 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 nine months ended May 31, 2024, the Company did not record any significant nonrecurring fair value measurements for assets or liabilities in periods subsequent to their initial recognition.

The Company estimates that the fair value of its senior notes, based on Level 2 inputs, was approximately $ 60.3 million as of November 30, 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 $ 66.4 million.

During the three months ended November 30, 2024, the Company did not record any significant nonrecurring fair value measurements for assets or liabilities in periods subsequent to their initial recognition.

Recently Issued Accounting Standards

3 unchanged sentences

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 is in the process of evaluating this ASU to determine its impact on the Company’s disclosures.

The Company has been evaluating this ASU to determine its impact on the Company’s disclosures.

In December 2023, the FASB issued ASU No.

3 unchanged sentences

The Company is in the process of evaluating this ASU to determine its impact on the Company’s disclosures.

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 condensed 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 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 condensed consolidated balance sheets as of March 4, 2024 (in thousands):

Fair value of consideration paid

Cash, net of cash acquired

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.

The Company’s accounting for the acquisition has not been finalized and could necessitate a one-year measurement period of determination from the acquisition date.

Goodwill is expected to be deductible for tax purposes.

See Note 6 to the condensed 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.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses” which includes amendments that require disclosure in the notes to financial statements of specified information about certain costs and expenses.

The amendments are effective for the Company’s annual periods beginning September 1, 2027, 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.

Assets Held for Sale

Reclassification to Held for Sale of Certain Homecare and Cleaning Product Businesses

In the first quarter of fiscal year 2025, the Company’s homecare and cleaning product businesses in the Americas and EIMEA segments met the criteria to be classified as held for sale.

Management has determined that the planned 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.

The Company expects to sell these homecare and cleaning product businesses in the Americas and EIMEA segments in fiscal year 2025.

Assets included as part of the disposal group classified as held for sale consisted of intangible assets, goodwill and inventory.

There are no liabilities in the disposal group.

The following table summarizes assets held for sale (in thousands):

Intangibles, Net 3,897

Goodwill 1,069

Inventory 4,899

Total assets held for sale (1)

(1) Total assets held for sale are included in other current assets on the Company’s condensed consolidated balance sheets.

Inventories consisted of the following (in thousands):

4 unchanged sentences

Finished goods 63,874 60,331

Inventory held for sale (1)

Total $ 74,887 $ 79,088

Property and Equipment and Capitalized Cloud-Based Software Implementation Costs

(1) Inventory held for sale consists mostly of finished goods inventory and is included in other current assets on the Company’s condensed consolidated balance sheets.

Property and Equipment and Capitalized Cloud Computing Implementation Costs

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

10 unchanged sentences

Total $ 59,384 $ 62,983

As of May 31, 2024 and August 31, 2023, the Company’s condensed consolidated balance sheets included $ 12.4 million and $ 11.0 million, respectively, of capitalized cloud-based implementation costs recorded as other assets within the Company’s condensed consolidated balance sheets.

These balances primarily consist of capitalized implementation costs related to a new cloud-based enterprise resource planning (“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 $ 1.4 million and $ 0.7 million as of May 31, 2024 and August 31, 2023, respectively.

Amortization expense associated with these assets was $ 0.6 million for the nine months ended May 31, 2024 and was not significant for three months ended May 31, 2024 or for the three and nine months ended May 31, 2023.

As of November 30, 2024 and August 31, 2024, the Company’s condensed consolidated balance sheets included $ 13.7 million and $ 13.4 million, respectively, of capitalized cloud computing implementation costs recorded as other assets within the Company’s condensed consolidated balance sheets.

Accumulated amortization associated with these assets was $ 2.5 million and $ 2.1 million as of November 30, 2024 and August 31, 2024, respectively.

Amortization expense associated with these assets was $ 0.4 million for the three months ended November 30, 2024 and was not significant for the three months ended November 30, 2023.

Goodwill and Other Intangible Assets

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):

1 unchanged sentence

Balance as of August 31, 2024 $ 86,765 $ 9,011 $ 1,209 $ 96,985

Goodwill incident to acquisition 1,481 - - 1,481

Translation adjustments 86 582 - 668

Balance as of May 31, 2024 $ 86,846 $ 8,872 $ 1,209 $ 96,927

There were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill as of May 31, 2024.

Goodwill held for sale (1)

( 995 ) ( 74 ) - ( 1,069 )

Balance as of November 30, 2024 $ 85,856 $ 9,519 $ 1,209 $ 96,584

(1) Goodwill held for sale is included in other current assets on the Company’s condensed consolidated balance sheets.

There were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill as of November 30, 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 May 31, 2024 and August 31, 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 nine months ended May 31, 2024.

The Company’s definite-lived intangible assets include the trade names Spot Shot, Carpet Fresh, 1001, EZ REACH and GT85 trade names, as well as intangible assets related to customer relationships and a non-compete agreement acquired in connection with the Company’s purchase of a Brazilian distributor during the fiscal year ended August 31, 2024.

All of these assets are included in other intangible assets, net in the Company’s condensed consolidated balance sheets.

The weighted-average useful life of the customer relationships and non-compete agreement acquired from Theron is 14.80 years.

In the first quarter of fiscal year 2025, the Company’s homecare and cleaning product businesses in the Americas and EIMEA segments was classified as held for sale.

Definite-lived intangible assets included in homecare and cleaning include Spot Shot and Carpet Fresh in the Americas segment as well as the 1001 trade name in the EIMEA segment.

Spot Shot in the Americas segment was recorded at an acquisition-date fair value of $ 13.7 million and was being amortized on a straight-line basis over the useful life of 17 years.

Accumulated amortization expense was $ 10.9 million and the carrying value of this asset was $ 2.8 million as of August 31, 2024.

Carpet Fresh in the Americas segment was recorded at an acquisition-date fair value of $ 2.8 million, was being amortized on a straight-line basis over the useful life of 13 years and was fully amortized as of August 31, 2022.

1001 trade name in the EIMEA segment was recorded at an acquisition-date fair value of $ 3.3 million and was being amortized on a straight-line basis over the useful life of 20 years.

Accumulated amortization expense was $ 2.2 million and the carrying value of this asset was $ 1.1 million as of August 31, 2024.

Amortization of the Spot Shot and 1001 trade names ceased as of September 1, 2024.

The following table summarizes the definite-lived intangible assets and the related accumulated amortization (in thousands):

1 unchanged sentence

Gross carrying amount $ 39,091 $ 38,863

Definite-lived intangible assets acquired 2,959 -

Accumulated amortization ( 32,907 ) ( 32,641 )

intangibles, net current held for sale (1)

Net carrying amount $ 2,287 $ 6,222

There has been no impairment charge for the nine months ended May 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 for the nine months ended May 31, 2024 are summarized below (in thousands):

(1) Intangibles, current held for sale are included in other current assets on the Company’s condensed consolidated balance sheets.

There has been no impairment charge for the three months ended November 30, 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 for the three months ended November 30, 2024 are summarized below (in thousands):

Americas EIMEA Asia-Pacific Total

Balance as of August 31, 2024 $ 5,354 $ 868 - $ 6,222

Definite-lived intangible assets acquired 2,959 - - 2,959

Amortization expense ( 47 ) - - ( 47 )

Translation adjustments ( 114 ) 123 - 9

Balance as of May 31, 2024 $ 5,792 $ 890 - $ 6,682

The estimated amortization expense for the Company’s definite-lived intangible assets is not significant in any future individual fiscal year.

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

2024 August 31,

Operating lease right-of-use assets $ 7,960 $ 7,820

Finance lease right-of-use asset 3,630 -

Total right-of-use assets $ 11,590 $ 7,820

Current operating lease liabilities (1)

Intangibles, net current held for sale (1)

( 2,820 ) ( 1,077 ) - ( 3,897 )

Long-term operating lease liabilities 6,072 5,832

Total operating lease liabilities $ 8,069 $ 7,976

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

During the nine months ended May 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 nine months ended May 31, 2024.

Since the Finance Lease was fully prepaid at commencement, no lease liability exists related to it .

Balance as of November 30, 2024 $ 2,373 $ ( 86 ) $ - $ 2,287

(1) Intangibles, current held for sale are included in other current assets on the Company’s condensed consolidated balance sheets.

The estimated amortization expense for the Company’s definite-lived intangible assets is not significant in any future individual fiscal year.

Accrued and Other Liabilities

16 unchanged sentences

Total $ 20,581 $ 26,055

As of May 31, 2024, the Company held borrowings under two separate agreements as detailed below.

As of November 30, 2024, the Company held borrowings under two separate agreements as detailed below.

Note Purchase and Private Shelf Agreement

1 unchanged sentence

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

As of May 31, 2024, the Company had outstanding balances on its series A, B and C notes issued under this Note Agreement.

As of November 30, 2024, the Company had outstanding balances on its series A, B and C notes issued under the 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 and also included certain conforming amendments to the credit agreement, including the revision of financial and restrictive covenants.

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

3 unchanged sentences

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.

The Company’s Credit Agreement with Bank of America, N.A.

consists of a revolving commitment for borrowing by the Company up to $ 125.0 million with a sublimit of $ 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.

1 unchanged sentence

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

Issuance Maturities May 31,

Issuance Maturities November 30,

2024 August 31,

14 unchanged sentences

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 May 31, 2024, $ 19.5 million of this facility was classified as long-term and was entirely denominated in Euros.

As of November 30, 2024, $ 19.0 million of this facility was classified as long-term and was entirely denominated in Euros.

$ 22.6 million was classified as short-term and was denominated in U.S.

As of August 31, 2023, $ 42.9 million on 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 entirely in U.S.

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

14 unchanged sentences

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 May 31, 2024, the Company was in compliance with all debt covenants under both the Note Agreement and the Credit Agreement.

As of November 30, 2024, the Company was in compliance with all debt covenants under both the Note Agreement and the Credit Agreement.

Share Repurchase Plan

1 unchanged sentence

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.

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

During the nine months ended May 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.

The timing and amount of repurchases are based on terms and conditions as may be acceptable to the Company’s Chief Executive Officer and Chief Financial Officer, subject

to present loan covenants and in compliance with all laws and regulations applicable thereto.

During the three months ended November 30, 2024, the Company repurchased 13,750 shares at an average price of $ 263.75 per share, for a total cost of $ 3.6 million under this $ 50.0 million plan.

As of November 30, 2024, the Company is authorized to purchase an additional $ 38.3 million under the 2023 Repurchase Plan.

Earnings per Common Share

The table below reconciles net income to net income available to common stockholders (in thousands):

Three Months Ended May 31, Nine Months Ended May 31,

2024 2023 2024 2023

Three Months Ended November 30,

Net income $ 18,925 $ 17,482

2 unchanged sentences

The table below summarizes the weighted-average number of common shares outstanding included in the calculation of basic and diluted EPS (in thousands):

Three Months Ended May 31, Nine Months Ended May 31,

2024 2023 2024 2023

Three Months Ended November 30,

Weighted-average common shares outstanding, basic 13,548 13,560

1 unchanged sentence

Weighted-average common shares outstanding, diluted 13,573 13,584

For the three months ended May 31, 2024, there were no anti-dilutive stock-based equity awards outstanding.

For the nine months ended May 31, 2024, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 1,801 were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive.

For the three months ended May 31, 2023, there were no anti-dilutive stock-based equity awards outstanding.

For the nine months ended May 31, 2023, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 6,068 were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive.

For the three months ended November 30, 2024 and 2023 , weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 6,188 and 5,404 , respectively, were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive.

The following table presents the Company’s revenues by segment and major source (in thousands):

Three Months Ended May 31, 2024 Nine Months Ended May 31, 2024

Americas EIMEA Asia-Pacific Total Americas EIMEA Asia-Pacific Total

Three Months Ended November 30, 2024

Americas EIMEA Asia-Pacific Total

WD-40 Multi-Use Product $ 52,901 $ 44,866 $ 20,780 $ 118,547

5 unchanged sentences

Total net sales $ 69,436 $ 57,483 $ 26,576 $ 153,495

Three Months Ended May 31, 2023 Nine Months Ended May 31, 2023

Americas EIMEA Asia-Pacific Total Americas EIMEA Asia-Pacific Total

Three Months Ended November 30, 2023

Americas EIMEA Asia-Pacific Total

WD-40 Multi-Use Product $ 48,511 $ 37,044 $ 22,122 $ 107,677

10 unchanged sentences

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.

The Company had contract liabilities of $ 2.2 million and $ 4.6 million as of May 31, 2024 and August 31, 2023, respectively.

Substantially all of the $ 4.6 million that was included in contract liabilities as of August 31, 2023 was recognized to revenue during the nine months ended May 31, 2024.

Revenue is subsequently recognized when revenue

recognition criteria are met, generally when control of the product transfers to the customer.

The Company had contract liabilities of $ 3.0 million and $ 4.3 million as of November 30, 2024 and August 31, 2024, respectively.

Substantially all of the $ 4.3 million that was included in contract liabilities as of August 31, 2024 was recognized to revenue during the three months ended November 30, 2024.

These contract liabilities are recorded in accrued liabilities on the Company’s condensed 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 did not have any contract assets as of May 31, 2024 and August 31, 2023.

The Company did not have any contract assets as of November 30, 2024 and August 31, 2024.

The Company has an unconditional right to payment for its trade and other accounts receivable on the Company’s condensed consolidated balance sheets.

These receivables are presented net of an allowance for credit losses of $ 1.3 million as of May 31, 2024 and which was not significant as of August 31, 2023.

These receivables are presented net of an allowance for credit losses of $ 1.8 million as of November 30, 2024 and which was not significant as of August 31, 2024.

Commitments and Contingencies

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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 renovation initiatives and/or supply chain initiatives.

As of May 31, 2024, no such commitments were outstanding.

As of November 30, 2024, no such commitments were outstanding.

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 May 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 of November 30, 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.

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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 unlimited;

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 May 31, 2024.

From time to time, the Company enters into indemnification agreements with certain contractual parties in the ordinary course of business, including agreements with lenders, lessors, contract manufacturers, marketing distributors, customers and certain 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 unlimited, 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 May 31, 2024.

The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its

quarterly provision for income taxes.

Thus, no liabilities have been recorded for these agreements as of November 30, 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 vendors.

Indemnification agreements are generally 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 November 30, 2024.

Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

The provision for income taxes was 23.2 % and 22.5 % of income before income taxes for the three months ended May 31, 2024 and 2023, respectively.

This 0.7 % increase in the effective tax rate from period to period was primarily due to the following impacts:

Description of impacts on the Company’s estimated annual effective tax rate

Unfavorable/(Favorable)

Higher tax rates in certain foreign jurisdictions from period to period

An increase in benefit from the high tax exception associated with global intangible low-taxed income ( 1.1 )%

The provision for income taxes was 23.1 % and 21.5 % of income before income taxes for the nine months ended May 31, 2024 and 2023, respectively.

This 1.6 % increase in the effective tax rate from period to period was primarily due to the following impacts:

Description of impacts on the Company’s estimated annual effective tax rate Unfavorable/(Favorable)

Higher tax rates in certain foreign jurisdictions from period to period

A non-recurring charitable donation made in the first quarter of fiscal year 2023

Lower shortfalls from the settlements of stock-based equity awards in fiscal year 2024

An increase in benefit from the high tax exception associated with global intangible low-taxed income ( 0.7 )%

The provision for income taxes was 22.0 % and 24.2 % of income before income taxes for the three months ended November 30, 2024 and 2023, respectively.

This 2.2 % decrease in the effective tax rate from period to period was primarily due to an increase in excess tax benefits from settlements of stock-based equity awards that are recognized in the provision for income taxes.

The Company is subject to taxation in the U.S.

and in various state and foreign jurisdictions.

Due to expired statutes, the Company’s federal income tax returns for years prior to fiscal year 2018 are not subject to examination by the U.S.

Due to expired statutes of limitations, 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.

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The Company is currently under audit in various state jurisdictions for fiscal years 2021 through 2022.

The Company has estimated that up to $ 12.7 million of unrecognized tax benefits related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months.

The Company has estimated that up to $ 13.4 million of unrecognized tax benefits related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitations within the next twelve months.

This includes $ 13.1 million 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.

Please refer to subsequent events for potential unrecognized tax benefits related to income tax positions after the period ending November 30, 2024.

Business Segments and Foreign Operations

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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, as well as all direct costs associated with public company compliance matters including legal, audit and other professional services costs.

Corporate overhead costs include expenses for the Company’s accounting and finance, information technology, legal, human resources, research and development, quality control and executive management functions, 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):

1 unchanged sentence

Corporate (1)

Net sales $ 75,103 $ 59,399 $ 20,543 $ - $ 155,045

Income from operations $ 18,382 $ 13,705 $ 6,750 $ ( 11,661 ) $ 27,176

Depreciation and amortization expense (2)

$ 1,201 $ 1,180 $ 56 $ 66 $ 2,503

Interest income $ 3 $ 100 $ 33 $ - $ 136

Interest expense $ 807 $ 373 $ 2 $ - $ 1,182

Net sales $ 71,130 $ 52,524 $ 18,063 $ - $ 141,717

Income from operations $ 16,906 $ 11,966 $ 5,312 $ ( 8,527 ) $ 25,657

Depreciation and amortization expense (2)

$ 911 $ 1,035 $ 53 $ 76 $ 2,075

Interest income $ - $ 40 $ 29 $ - $ 69

Interest expense $ 1,079 $ 516 $ 2 $ - $ 1,597

For the Nine Months Ended

November 30, 2024

Net sales $ 69,436 $ 57,483 $ 26,576 $ - $ 153,495

4 unchanged sentences

Interest expense $ 653 $ 219 $ 1 $ - $ 873

November 30, 2023

Net sales $ 64,075 $ 48,754 $ 27,587 $ - $ 140,416

7 unchanged sentences

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.

Subsequent Event

Subsequent Events

Dividend Declaration

On June 18, 2024, the Company’s Board declared a cash dividend of $ 0.88 per share payable on July 31, 2024 to stockholders of record at the close of business on July 19, 2024.

On December 11, 2024, the Company’s Board approved a 7 % increase in the regular quarterly cash dividend, increasing it from $ 0.88 per share to $ 0.94 per share.

The $ 0.94 per share dividend declared on December 11, 2024 is payable on January 31, 2025 to stockholders of record at the close of business on January 17, 2025.

Release of Uncertain Tax Position

Due to the expiration of federal statutes on December 17, 2024, the Company released an unrecognized tax benefit associated with the Tax Cuts and Jobs Act of 2017 mandatory onetime “toll tax” on unremitted foreign earnings.

The release of this unrecognized tax benefit is expected to generate a favorable income tax adjustment of $ 11.9 million, net of federal benefit, in the fiscal second quarter ending February 28, 2025.

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

What changed 10-Q

Item 1. Financial Statements