WD 40 CO 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations As used in this report, the terms “we,” “our,” and “us” and “the Company” refer to WD-40 Company and its wholly-owned subsidiaries, unless the context suggests otherwise. Amounts and percentages in tables and discussions may not total due to rounding. The following information is provided as a supplement to, and should be read in conjunction with, the unaudited condensed consolidated financial statements and notes thereto included in Part I—Item 1 of this Quarterly Report and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, which was filed with the Securities and Exchange Commission (“SEC”) on October 21, 2024. Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. This report contains forward-looking statements, which reflect our current views with respect to future events and financial performance. These forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “project,” “could,” “may,” “aim,” “anticipate,” “target,” “estimate” and similar expressions. These forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: expected benefits from any acquisition or divestiture transaction; acquired business not performing as expected; assuming unexpected risks, liabilities and obligations of the acquired business; disruption to the parties’ business as a result of the announcement and acquisition or divestiture transaction; integration of acquired business and operations into the Company; the Company's ability to successfully complete any planned divestiture; expected timing of the closing for the divestiture; expected proceeds from the divestiture; the intended use of proceeds by the Company from the divestiture transaction; impact of the divestiture transaction on the Company's stock price or EPS; growth expectations for maintenance products; expected levels of promotional and advertising spending; anticipated input costs for manufacturing and the costs associated with distribution of our products; plans for and success of product innovation, the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; expected tax rates and the impact of tax legislation and regulatory action; changes in the political conditions or relations between the United States and other nations; changes in trade policies and tariffs; the impacts from inflationary trends, supply chain constraints and supply chain disruptions; changes in interest rates; and forecasted foreign currency exchange rates and commodity prices. We undertake no obligation to revise or update any forward-looking statements. Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I—Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, and in Part II—Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q. Overview The Company WD-40 Company based in San Diego, California, is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world. We own a wide range of well-known brands that include maintenance products and homecare and cleaning products: WD-40® Multi-Use Product, WD-40 Specialist®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava® and Solvol®. Our 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. We sell our products 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. During the first quarter of fiscal year 2025, we reclassified certain assets of our homecare and cleaning product businesses in the Americas and EIMEA segments to held for sale. 21 Table of Contents Highlights The following summarizes the financial and operational highlights for our business during the six months ended February 28, 2025: • Consolidated net sales increased $20.1 million or 7%, to $299.6 million compared to the corresponding period of the prior fiscal year. Increases in sales volume favorably impacted net sales by approximately $22.2 million from period to period. Increases in the average selling price of our products positively impacted net sales by approximately $1.3 million from period to period. Changes to net sales attributable to volumes and average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. Consolidated net sales was unfavorably impacted by changes in foreign currency exchange rates which was estimated to be $3.4 million from period to period. • Gross profit as a percentage of net sales increased to 54.7% from 53.1% in the corresponding period of the prior fiscal year. • Consolidated net income increased $15.8 million, or 48%, compared to the corresponding period of the prior fiscal year. During the second quarter of fiscal year 2025, we released an uncertain tax position that generated a favorable income tax adjustment of $11.9 million. Excluding this one-time benefit, net income would have increased $3.8 million, or 12%. • Diluted earnings per common share were $3.58 versus $2.42 in the prior fiscal year period. As noted above, during the second quarter of fiscal year 2025, we released an uncertain tax position that generated a favorable income tax adjustment. Excluding this one-time benefit, on a Non-GAAP basis, adjusted diluted EPS was $2.71. • During the first quarter of fiscal year 2025, we reclassified certain assets our homecare and cleaning product businesses in the Americas and EIMEA segments to held for sale. • We returned approximately $31.4 million to our stockholders in the first half of fiscal year 2025 through share repurchases and dividends. Global Economic Conditions We continue to monitor changes in international trade relations and trade policy, including those related to tariffs, which could adversely impact our results. We utilize third-party manufacturers and distribution centers that are primarily in regions near our customers and end users, which decreases the potential unfavorable impacts of new tariffs on purchases of our inventory and shipments to our customers. However, certain inputs sourced by our third-party manufacturers to produce our inventory may increase in cost and unfavorably impact our results. In addition, any supply chain constraints, inflationary impacts or weakening in consumer demand as a result of changes to global economic environments could impact our results. See the Company’s risk factors disclosed in Part I―Item 1A, “Risk Factors,” in its Annual Report on Form 10-K for the fiscal year ended August 31, 2024, which was filed with the SEC on October 21, 2024 for further information on risks related to global economic conditions. 22 Table of Contents Results of Operations Three and Six Months Ended February 28, 2025 Compared to Three and Six Months Ended February 29, 2024 Operating Items The following table summarizes operating data for our consolidated operations (in thousands, except percentages and per share amounts): Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent Net sales: WD-40 Multi-Use Product $ 113,692 $ 107,234 $ 6,458 6 % $ 232,239 $ 214,911 $ 17,328 8 % WD-40 Specialist 18,562 16,817 1,745 10 % 37,734 33,659 4,075 12 % Other maintenance products 7,063 7,188 (125) (2) % 14,851 14,814 37 — % Total maintenance products 139,317 131,239 8,078 6 % 284,824 263,384 21,440 8 % HCCP (1) 6,787 7,866 (1,079) (14) % 14,775 16,137 (1,362) (8) % Total net sales 146,104 139,105 6,999 5 % 299,599 279,521 20,078 7 % Cost of products sold 66,388 66,164 224 — % 135,796 131,027 4,769 4 % Gross profit 79,716 72,941 6,775 9 % 163,803 148,494 15,309 10 % Operating expenses 56,436 52,000 4,436 9 % 115,401 103,369 12,032 12 % Income from operations $ 23,280 $ 20,941 $ 2,339 11 % $ 48,402 $ 45,125 $ 3,277 7 % Net income $ 29,851 $ 15,536 $ 14,315 92 % $ 48,776 $ 33,018 $ 15,758 48 % EPS – diluted $ 2.19 $ 1.14 $ 1.05 92 % $ 3.58 $ 2.42 $ 1.16 48 % Shares used in diluted EPS 13,572 13,583 (11) — % 13,572 13,583 (11) — % (1) Homecare and cleaning products (“HCCP”) Net Sales by Segment The following table summarizes net sales by segment (in thousands, except percentages): Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent Americas $ 65,529 $ 63,507 $ 2,022 3 % $ 134,965 $ 127,582 $ 7,383 6 % EIMEA 59,575 54,313 5,262 10 % 117,058 103,067 13,991 14 % Asia-Pacific 21,000 21,285 (285) (1) % 47,576 48,872 (1,296) (3) % Total $ 146,104 $ 139,105 $ 6,999 5 % $ 299,599 $ 279,521 $ 20,078 7 % 23 Table of Contents Americas Sales The following table summarizes net sales by product line for the Americas segment, which includes the U.S., Canada and Latin America (in thousands, except percentages): Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 51,058 $ 49,043 $ 2,015 4 % $ 103,959 $ 97,554 $ 6,405 7 % WD-40 Specialist 7,720 7,090 630 9 % 15,953 14,198 1,755 12 % Other maintenance products 3,592 4,003 (411) (10) % 7,866 8,129 (263) (3) % Total maintenance products 62,370 60,136 2,234 4 % 127,778 119,881 7,897 7 % HCCP 3,159 3,371 (212) (6) % 7,187 7,701 (514) (7) % Total net sales $ 65,529 $ 63,507 $ 2,022 3 % $ 134,965 $ 127,582 $ 7,383 6 % % of consolidated net sales 45 % 46 % 45 % 46 % The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the Americas segment (in millions): Change from Prior Year First Quarter Second Quarter Year to Date Increase in average selling price (1) $ 0.2 $ 0.3 $ 0.5 Increase in sales volume (1) 6.3 3.1 9.4 Currency impact on current period (1.1) (1.4) (2.5) Increase in net sales $ 5.4 $ 2.0 $ 7.4 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. Americas Sales – Three Months Ended – February 28, 2025 Compared to February 29, 2024 Net sales in the Americas segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $2.0 million, or 4%, primarily due to increase in Latin America of $4.7 million, or 47%. Sales in Latin America were favorably impacted by increased sales in Brazil by $3.4 million, which benefited from a shift from an indirect distribution model to a direct model beginning in the third quarter of fiscal year 2024. In addition, sales in other Latin American markets increased $1.3 million due to improved economic conditions in certain regions as well as a higher level of promotional activities. This increase in Latin America was partially offset by lower sales in U.S. and Mexico of $2.7 million and $0.7 million, or 7% and 13%, respectively, due to decreased volumes as a result of the timing of customer orders. Mexico also decreased due to lower demand as a result of worsening economic conditions and unfavorable changes in foreign currency exchange rates from period to period. • WD-40 Specialist sales increased $0.6 million, or 9%, primarily due to new distribution and increased demand in the United States. • Other maintenance product sales decreased $0.4 million 10%, primarily due to decrease in Mexico due to decreased volumes from a lower level of promotional activities, as well as unfavorable changes in foreign currency exchange rates. 24 Table of Contents • Homecare and cleaning product sales decreased $0.2 million, or 6%, primarily due to changes in distribution and reduced sales volume in the U.S. as a result of a lower level of advertising and promotional activities associated with these brands, as we focus on increasing sales of maintenance products in support of our four-by-four strategic framework. • For the three months ended February 28, 2025, 70% of sales came from the U.S., and 30% of sales came from Canada and Latin America combined compared to the three months ended February 29, 2024 when 76% of sales came from the U.S., and 24% of sales came from Canada and Latin America. Americas Sales – Six Months Ended – February 28, 2025 Compared to February 29, 2024 Net sales in the Americas segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $6.4 million, or 7%, primarily due to increases in Latin America of $7.0 million, or 33%. Sales in Latin America were favorably impacted by the transition to a direct marketing model in Brazil as discussed above in the section for the three months ended February 28, 2025. In addition, sales in other Latin American markets increased $1.7 million due to improved economic conditions in certain regions as well as a higher level of promotional activities. This increase in Latin America was partially offset by lower sales in Mexico of $2.2 million, or 20%, due to lower demand as a result of worsening economic conditions, as well as unfavorable changes in foreign currency exchange rates. • WD-40 Specialist sales increased $1.8 million , or 12% , primarily due to new distribution and increased demand in the United States. • Other maintenance product sales remained relatively constant from period to period. • Homecare and cleaning product sales decreased $0.5 million, or 7%, primarily due to changes in distribution as well as reduced demand in the U.S. as discussed above in the section for the three months ended February 28, 2025. • For the six months ended February 28, 2025, 72% of sales came from the U.S., and 28% of sales came from Canada and Latin America combined compared to the six months ended February 29, 2024 when 75% of sales came from the U.S., and 25% of sales came from Canada and Latin America. 25 Table of Contents EIMEA Sales The following table summarizes net sales by product line for the EIMEA segment, which includes Europe, India, the Middle East and Africa (in thousands, except percentages): Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 46,406 $ 41,572 $ 4,834 12 % $ 91,272 $ 78,616 $ 12,656 16 % WD-40 Specialist 8,424 7,525 899 12 % 16,241 14,191 2,050 14 % Other maintenance products 3,254 3,009 245 8 % 6,448 6,071 377 6 % Total maintenance products 58,084 52,106 5,978 11 % 113,961 98,878 15,083 15 % HCCP 1,491 2,207 (716) (32) % 3,097 4,189 (1,092) (26) % Total net sales $ 59,575 $ 54,313 $ 5,262 10 % $ 117,058 $ 103,067 $ 13,991 14 % % of consolidated net sales 41 % 39 % 39 % 37 % The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the EIMEA segment (in millions): Change from Prior Year First Quarter Second Quarter Year to Date Increase in average selling price (1) $ 0.5 $ 0.9 $ 1.4 Increase in sales volume (1) 6.2 7.4 13.6 Currency impact on current period 2.0 (3.0) (1.0) Increase in net sales $ 8.7 $ 5.3 $ 14.0 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. The countries and regions in Europe where we sell through a direct sales force include the U.K., Italy, France, Iberia (which includes Spain and Portugal) DACH (which includes Germany, Austria and Switzerland) and Benelux (which includes Belgium, the Netherlands and Luxembourg). The regions in the EIMEA segment where we sell through local distributors include the Middle East, Africa, India, Eastern and Northern Europe. EIMEA Sales – Three Months Ended – February 28, 2025 Compared to February 29, 2024 Net sales increased in the EIMEA segment from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $4.8 million, or 12%, primarily due to higher sales volume across most regions. Sales in direct markets increased significantly in Italy, France, and the Benelux region, which were up $0.9 million, $0.8 million, and $0.6 million, respectively, from period to period. In addition, sales to our marketing distributors in various regions increased $2.0 million primarily due to increased distribution and higher levels of demand. Most regions in EIMEA have experienced continued increases in sales volumes after a temporary reduction in demand from price increases we implemented prior to fiscal year 2024. While most of this volume recovery was experienced in fiscal year 2024 after customers adjusted to those price increases, this volume recovery has continued into fiscal year 2025 and has resulted in higher sales levels from period to period. 26 Table of Contents • WD-40 Specialist sales increased $0.9 million, or 12%, primarily due to higher sales volume as a result of increased distribution and stronger levels of demand in various direct markets, most significantly in the DACH, Benelux, and Iberia regions. • Other maintenance product sales remained relatively constant from period to period. • Homecare and cleaning product sales decreased $0.7 million, or 32%, primarily due to reduced demand in the U.K. as a result of a lower level of advertising and promotional activities associated with these brands, as we focus on increasing sales of maintenance products in support of our four-by-four strategic framework. EIMEA Sales – Six Months Ended – February 28, 2025 Compared to February 29, 2024 Net sales increased in the EIMEA segment from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $12.7 million, or 16%, primarily due to higher sales volume across nearly all regions. Sales in direct markets increased significantly in France, Italy, and Benelux regions, which were up $1.8 million, $1.6 million, and $1.5 million, respectively. Sales to our marketing distributors in various regions, increased $5.8 million primarily due to increased distribution, higher levels of demand and timing of customer orders. India in particular increased $1.6 million from period to period. Most regions in EIMEA have experienced continued increases in sales volumes after a temporary reduction in demand from price increases we implemented prior to fiscal year 2024. While most of this volume recovery was experienced in fiscal year 2024 after customers adjusted to those price increases, this volume recovery has continued into fiscal year 2025 and has resulted in higher sales levels from period to period. • WD-40 Specialist and other maintenance product sales increased $2.1 million, or 14%, and $0.4 million, or 6%, respectively, primarily due to the combined impact of higher sales volume due to increased distribution and stronger levels of demand after customers adjusted to price increases. • Homecare and cleaning product sales decreased $1.1 million, or 26%, primarily due to reduced demand in the U.K. as discussed above in the section for the three months ended February 28, 2025. 27 Table of Contents Asia-Pacific Sales The following table summarizes net sales by product line for the Asia-Pacific segment, which includes Australia, China and other countries in the Asia region (in thousands, except percentages): Three Months Ended February 28/29, Six Months Ended February 28/29, Change from Prior Year Change from Prior Year 2025 2024 Dollars Percent 2025 2024 Dollars Percent WD-40 Multi-Use Product $ 16,228 $ 16,619 $ (391) (2) % $ 37,008 $ 38,741 $ (1,733) (4) % WD-40 Specialist 2,418 $ 2,202 $ 216 10 % 5,540 5,270 270 5 % Other maintenance products 217 $ 176 $ 41 23 % 537 614 (77) (13) % Total maintenance products 18,863 $ 18,997 $ (134) (1) % 43,085 44,625 (1,540) (3) % HCCP 2,137 2,288 (151) (7) % 4,491 4,247 244 6 % Total net sales $ 21,000 $ 21,285 $ (285) (1) % $ 47,576 $ 48,872 $ (1,296) (3) % % of consolidated net sales 14 % 15 % 16 % 17 % The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the Asia-Pacific segment (in millions): Change from Prior Year First Quarter Second Quarter Year to Date Increase (decrease) in average selling price (1) $ 0.5 $ (1.1) $ (0.6) (Decrease) increase in sales volume (1) (2.1) 1.3 (0.8) Currency impact on current period 0.6 (0.5) 0.1 Decrease in net sales $ (1.0) $ (0.3) $ (1.3) (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. Asia-Pacific Sales – Three Months Ended – February 28, 2025 Compared to February 29, 2024 Net sales in the Asia-Pacific segment decreased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales decreased $0.4 million, or 2%, primarily due to decreases in our Asia distributor markets of $0.7 million partially offset by increases in China of $0.3 million. Asia distributor markets experienced a decrease in sales volume primarily due to market disruption driven by the strengthening of the U.S. Dollar. In addition, sales volumes decreased due to timing of customer orders placed by certain of our distributors, particularly in the Philippines. Sales in China increased due to increased sales volume from successful promotional programs and marketing activities. • WD-40 Specialist sales increased $0.2 million, or 10%, primarily due to increased sales volume due to successful promotional programs and marketing activities in our Asia distributor markets. • Homecare and cleaning product sales decreased $0.2 million, or 7%, from period to period. 28 Table of Contents Asia-Pacific Sales – Six Months Ended – February 28, 2025 Compared to February 29, 2024 Net sales in the Asia-Pacific segment decreased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales decreased $1.7 million, or 4%, primarily due to decreases in our Asia distributor markets of $3.3 million partially offset by increases in China and Australia of $1.2 million and $0.3 million, respectively. In the Asia distributor markets, many of our distributors were carrying high levels of inventory of our product after participating in successful promotional programs in fiscal year 2024 and reduced the volume of orders during the first half of fiscal year 2025 to adjust to more normal levels of inventory, particularly in the Philippines, Indonesia and Singapore. Sales in China and Australia increased due to higher sales volume from successful promotional programs and marketing activities. • WD-40 Specialist sales increased $0.3 million, or 5%, primarily due to increased sales volume due to successful promotional programs and marketing activities in China. • Homecare and cleaning product sales increased $0.2 million or 6%. The increase was due to higher sales volume in Australia attributable to successful promotional activities and improved packaging. Our homecare and cleaning businesses in the Asia-Pacific segment are not held for sale. Gross Profit The following general information is important when assessing fluctuations in our gross margin: • There is often a delay before changes in costs of raw materials, such as specialty chemicals used in the formulation of our products, impact cost of products sold due to production and inventory life cycles. Such delays increase with higher production and inventory levels. • In general, the timing of advertising, promotional and other discounts may cause fluctuations in gross margin from period to period. Advertising, promotional and other discounts that are given to our customers are recorded as a reduction to sales, whereas advertising and sales promotional costs associated with promotional activities that we pay to third parties are recorded as advertising and sales promotion expenses. • In the EIMEA segment, the cost of our products sold are generated in the Pound Sterling and Euro. The strengthening or weakening of the Pound Sterling and Euro against U.S. Dollar may result in foreign currency related changes to the gross margin percentage in the EIMEA segment from period to period. • Our gross profit and gross margin may not be comparable to those of other consumer product companies, since some of these companies include all costs related to distribution of their products in cost of products sold, whereas we exclude the portion associated with amounts paid to third parties for shipment to our customers from our distribution centers and contract manufacturers and include these costs in selling, general and administrative expenses. These costs totaled $4.3 million and $4.0 million, or 3.0% and 2.8% of net sales for the three months ended February 28, 2025 and February 29, 2024, respectively and $8.9 million and $8.0 million, or 3.0% and 2.9% of net sales for the six months ended February 28, 2025 and February 29, 2024, respectively. The following table summarizes gross margin and gross profit (in thousands, except percentages): Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Gross profit $ 79,716 $ 72,941 $ 6,775 $ 163,803 $ 148,494 $ 15,309 Gross margin 54.6 % 52.4 % 220 bps (1) 54.7 % 53.1 % 160 bps (1) (1) Basis points (“bps”) change in gross margin. 29 Table of Contents Gross Margin – Three Months Ended – February 28, 2025 Compared to February 29, 2024 Gross margin increased 220 bps primarily due to the following favorable impacts: Favorable Explanations 110 bps Lower costs of aerosol cans 90 bps Lower costs of specialty chemicals used in the formulation of our products During the first quarter of fiscal year 2025, we reclassified certain assets of our homecare and cleaning product businesses in the Americas and EIMEA segments to held for sale. Gross margin excluding these products would have been 0.5% higher during the three months ended February 28, 2025. Gross Margin – Six Months Ended – February 28, 2025 Compared to February 29, 2024 Gross margin increased 160 bps primarily due to the following favorable impacts, partially offset by unfavorable impacts: Favorable/(Unfavorable) Explanations 70 bps Lower costs of aerosol cans 70 bps Lower costs of specialty chemicals used in the formulation of our products 60 bps Favorable sales mix and other miscellaneous mix impacts and decreases in miscellaneous other input costs (60) bps Higher warehousing, distribution and freight costs, primarily in the Americas segment Gross margin excluding assets held for sale would have been 0.5% higher during the six months ended February 28, 2025. Selling, General and Administrative (“SG&A”) Expenses Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year (in thousands) Dollars Percent Dollars Percent SG&A expenses $ 48,988 $ 45,023 $ 3,965 9 % $ 99,513 $ 89,158 $ 10,355 12 % % of net sales 33.5 % 32.4 % 33.2 % 31.9 % SG&A Expenses – Three Months Ended – February 28, 2025 Compared to February 29, 2024 The increase in SG&A expenses was primarily due to increases in employee-related costs of $3.6 million due to higher accrued incentive compensation, annual compensation increases, higher stock-based compensation expense and higher headcount. In addition, freight expense increased by $0.4 million primarily due to the combined impacts of higher sales and increased costs. SG&A Expenses – Six Months Ended – February 28, 2025 Compared to February 29, 2024 The increase in SG&A expenses was primarily due to increases in employee-related costs of $5.7 million due to higher accrued incentive compensation, annual compensation increases and higher headcount. Other professional services fees, such as those costs in support of our strategic initiatives in the Americas and EIMEA segments increased SG&A by $1.3 million. Freight expense increased $0.9 million primarily in the Americas and EIMEA segments, due to the combined impacts of higher sales and increased costs. In addition, SG&A increased due to a credit loss adjustment in the U.S. of $0.8 million, $0.5 million in sales commissions expense in Brazil given the shift to direct selling model, and travel and meeting expense of $0.5 million as a result of increased travel related to geographic expansion and other initiatives aligned with our strategic framework. Amortization costs associated with cloud computing implementation also increased SG&A by $0.5 million from period to period. We continued our research and development investment, the majority of which is associated with our maintenance products, including efforts focused on sustainability as well as our focus on innovation and renovation of our products. Research and development costs were $2.0 million and $1.7 million for the three months ended February 28, 2025 and February 29, 2024, respectively, and $3.9 million and $3.6 million for the six months ended February 28, 2025 and 30 Table of Contents February 29, 2024, respectively. The increase from period to period was partially due to a higher level of research and development activity associated with our sustainability initiatives. Our research and development team engages in consumer research, environmental and sustainability initiatives, product development, product improvements and testing activities. This team leverages its development capabilities by collaborating with a network of outside resources including our current and prospective third-party contract manufacturers. The level and types of expenses incurred within research and development can vary from period to period depending upon the types of activities being performed. Advertising and Sales Promotion (“A&P”) Expenses Three Months Ended February 28/29, Six Months Ended February 28/29, Change from Prior Year Change from Prior Year (in thousands) 2025 2024 Dollars Percent 2025 2024 Dollars Percent A&P expenses $ 7,404 $ 6,725 $ 679 10 % $ 15,797 $ 13,708 $ 2,089 15 % % of net sales 5.1 % 4.8 % 5.3 % 4.9 % A&P Expenses – Three M onths Ended – February 28, 2025 Compared to February 29, 2024 The increase in A&P expenses was primarily due to a higher level of promotional programs and marketing support, particularly in EIMEA and the Americas segments. As a percentage of net sales, A&P expenses may fluctuate period to period based upon the type of marketing activities we employ and the period in which the costs are incurred. Total promotional costs recorded as a reduction to sales were $7.7 million and $7.6 million for the three months ended February 28, 2025 and February 29, 2024, respectively. Therefore, our total expenditure on A&P activities was $15.1 million and $14.3 million for the three months ended February 28, 2025 and February 29, 2024, respectively. A&P Expenses – Six Months Ended – February 28, 2025 Compared to February 29, 2024 The increase in A&P expenses was primarily due to a higher level of promotional programs and marketing support, particularly in the Americas and EIMEA segments. Total promotional costs recorded as a reduction to sales were $16.5 million and $15.4 million, for the six months ended February 28, 2025 and February 29, 2024, respectively. Therefore, our total expenditure on A&P activities was $32.3 million and $29.1 million for the six months ended February 28, 2025 and February 29, 2024, respectively. Income from Operations by Segment The following table summarizes income from operations by segment (in thousands, except percentages): Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent Americas $ 13,210 $ 13,220 $ (10) — % $ 25,862 $ 27,416 $ (1,554) (6) % EIMEA 15,273 12,087 3,186 26 % 28,954 21,602 7,352 34 % Asia-Pacific 7,349 7,489 (140) (2) % 17,529 18,514 (985) (5) % Unallocated corporate (1) (12,552) (11,855) (697) (6) % (23,943) (22,407) (1,536) (7) % Total $ 23,280 $ 20,941 $ 2,339 11 % $ 48,402 $ 45,125 $ 3,277 7 % (1) Unallocated corporate expenses are general corporate overhead expenses not directly attributable to any one of the business segments. These expenses are reported separate from our identified segments and are included in Selling, General and Administrative expenses on our consolidated statements of operations. 31 Table of Contents Americas Americas Operating Income – Three Months Ended – February 28, 2025 Compared to February 29, 2024 Income from operations for the Americas remained constant for the three months ended February 28, 2025 compared to February 29, 2024. Gross margin for the Americas segment increased slightly from 49.4% to 50.1% and sales increased $2.0 million, which was offset by an increase in operating expenses. Operating expenses increased $1.4 million primarily due to higher employee-related costs as a result of increased headcount, annual compensation increases and increased stock-based compensation expense from period to period. Operating income as a percentage of net sales decreased from 20.8% to 20.2% period over period. Americas Operating Income – Six Months Ended – February 28, 2025 Compared to February 29, 2024 Income from operations for the Americas decreased to $25.9 million, down $1.6 million, or 6%, due to higher operating expenses partially offset by increased sales of $7.4 million and higher gross margin. Gross margin for the Americas segment increased slightly from 50.0% to 50.3%. Operating expenses increased $5.5 million due to higher employee-related costs as a result of increased headcount, higher accrued incentive compensation and annual compensation increases as well as an increase in provision for credit losses from period to period. Operating income as a percentage of net sales decreased from 21.5% to 19.2% period over period. EIMEA EIMEA Operating Income – Three Months Ended – February 28, 2025 Compared to February 29, 2024 Income from operations for the EIMEA segment increased to $15.3 million, up $3.2 million, or 26%, primarily due to a $5.3 million increase in sales and a higher gross margin, partially offset by higher operating expenses. Gross margin for the EIMEA segment increased from 53.7% to 58.1% primarily due to the favorable impact of decreases in the costs of aerosol cans, decreases in other miscellaneous input costs, and increases in average selling price from period to period. Operating expenses increased $2.3 million primarily due to higher employee-related costs as a result of higher accrued incentive compensation, annual compensation increases and increased headcount. In addition, operating expenses increased due to higher A&P expenses, as well as higher level of professional service costs and travel and meeting expenses in support of our strategic framework. Operating income as a percentage of net sales increased from 22.3% to 25.6% period over period. EIMEA Operating Income – Six Months Ended – February 28, 2025 Compared to February 29, 2024 Income from operations for the EIMEA segment increased to $29.0 million, up $7.4 million, or 34%, primarily due to a $14.0 million increase in sales and a higher gross margin, which was partially offset by higher operating expenses. Gross margin for the EIMEA segment increased from 54.2% to 58.0% primarily due to the favorable impact of decreases in the costs of aerosol cans and changes in sales mix and market mix from period to period, partially offset by unfavorable changes from foreign currency exchange rates. Operating expenses increased $4.6 million primarily due to the factors as discussed above in the section for the three months ended February 28, 2025. Operating income as a percentage of net sales increased from 21.0% to 24.7% period over period. Asia-Pacific Asia-Pacific Operating Income – Three Months Ended – February 28, 2025 Compared to February 29, 2024 Income from operations for the Asia-Pacific segment remained relatively constant for the three months ended February 28, 2025 compared to February 29, 2024. Gross margin for the Asia-Pacific segment decreased slightly from 58.5% to 58.4%. Operating income as a percentage of net sales decreased slightly from 35.2% to 35.0%. Asia-Pacific Operating Income – Six Months Ended – February 28, 2025 Compared to February 29, 2024 Income from operations for the Asia-Pacific segment decreased to $17.5 million, down $1.0 million, or 5%, due to decreased sales of $1.3 million and slightly higher operating expenses. Gross margin for the Asia-Pacific segment increased slightly from 58.9% to 59.0%. Operating income as a percentage of net sales decreased from 37.9% to 36.8% period over period. 32 Table of Contents Unallocated Corporate Unallocated Corporate Expenses – Three Months Ended – February 28, 2025 Compared to February 29, 2024 Unallocated Corporate expenses increased to $12.6 million, up $0.7 million, or 6%, as a result of higher stock-based compensation expense as well as higher accrued incentive compensation expense from period to period. Unallocated Corporate Expenses – Six Months Ended – February 28, 2025 Compared to February 29, 2024 Unallocated Corporate expenses increased to $23.9 million, up $1.5 million, or 7%, as a result higher accrued incentive compensation costs as well as amortization costs associated with the implementation of the ERP system in the U.S. Non-Operating Items The following table summarizes non-operating income and expenses for our consolidated operations (in thousands): Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 Change 2025 2024 Change Interest income $ 106 $ 66 $ 40 $ 254 $ 140 $ 114 Interest expense $ 1,021 $ 1,008 $ 13 $ 1,894 $ 2,154 $ (260) Other income (expense), net $ 74 $ (193) $ 267 $ (67) $ (233) $ 166 (Benefit) provision for income taxes $ (7,412) $ 4,270 $ (11,682) $ (2,081) $ 9,860 $ (11,941) (Benefit) provision for Income Taxes The (benefit) provision for income taxes was (33.0)% and 21.6% of income before income taxes for the three months ended February 28, 2025 and February 29, 2024, respectively. Descriptions of impacts on our effective income tax rate are incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 13 – Income Taxes included in this report. The (benefit) provision for income taxes was (4.5)% and 23.0% of income before income taxes for the six months ended February 28, 2025 and February 29, 2024, respectively. Descriptions of impacts on our effective income tax rate are incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 13 – Income Taxes included in this report. Net Income Net income increased 92% to $29.9 million, or $2.19 per common share on a fully diluted basis, for the three months ended February 28, 2025 compared to $15.5 million, or $1.14 per common share on a fully diluted basis, for the three months ended February 29, 2024. During the second quarter of fiscal year 2025, we released an uncertain tax position that generated a favorable income tax adjustment of $11.9 million. Excluding this one-time benefit, net income would have increased $2.4 million, or 15%. Net income increased 48% to $48.8 million, or $3.58 per common share on a fully diluted basis, for the six months ended February 28, 2025 compared to $33.0 million, or $2.42 per common share on a fully diluted basis, for the corresponding period of the prior fiscal year. During the second quarter of fiscal year 2025, we released an uncertain tax position that generated a favorable income tax adjustment as discussed above. Excluding this one-time benefit, net income would have increased $3.8 million, or 12%. Performance Measures and Non-GAAP Reconciliations In managing our business operations and assessing our financial performance, we supplement the information provided by our financial statements with certain non-GAAP performance measures. These performance measures are part of our current 55/30/25 business model, which includes gross margin, cost of doing business, and earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”), the latter two of which are non-GAAP performance measures. Cost of doing business is defined as total operating expenses less amortization of definite-lived intangible assets, impairment charges related to intangible assets, amortization of implementation costs associated with cloud computing arrangements (“cloud computing amortization”) and depreciation in operating departments. Adjusted EBITDA is defined 33 Table of Contents as net income before interest, income taxes, depreciation, amortization of definite-lived intangible assets, and cloud computing amortization. We placed a new cloud-based enterprise resource planning system into service in the U.S., which we began to amortize in the second quarter of fiscal year 2024. We target our gross margin to be 55% of net sales, our cost of doing business to be 30% of net sales, and our Adjusted EBITDA to be 25% of net sales. Results for these performance measures may vary from period to period depending on various factors, including economic conditions such as the inflationary environment we have experienced in the last several fiscal years, and our level of investment in activities for the future such as those related to quality assurance, regulatory compliance, information technology, sustainability, and intellectual property protection in order to safeguard our WD-40 brand. Our targets for gross margin and these other performance measures are long-term in nature and we expect to make progress towards them over time. Progression on our cost of doing business and Adjusted EBITDA metrics may be challenged if the anticipated divestiture of certain of our homecare and cleaning product businesses occurs, due to the low level of operating expenses associated with these businesses. However, we intend to focus our resources and investments from the potential sale of those brands on growing our higher growth and higher gross margin core business. The following table summarizes the results of these performance measures: Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 2025 2024 Gross margin – GAAP 55 % 52 % 55 % 53 % Cost of doing business as a percentage of net sales – non-GAAP 38 % 36 % 38 % 36 % Adjusted EBITDA as a percentage of net sales – non-GAAP (1) 18 % 17 % 18 % 18 % (1) Percentages may not aggregate to Adjusted EBITDA percentage due to rounding and because amounts recorded in other income (expense), net on our consolidated statement of operations are not included as an adjustment to earnings in the Adjusted EBITDA calculation. We use the performance measures above to establish financial goals and to gain an understanding of our comparative performance from period to period. We believe that these measures provide our stockholders with additional insights into how we run our business. We believe these measures also provide investors with additional financial information that should be considered when assessing our underlying business performance and trends. These non-GAAP financial measures are supplemental in nature and should not be considered in isolation or as alternatives to net income, income from operations or other financial information prepared in accordance with GAAP as indicators of our performance or operations. The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies. Reconciliations of these non-GAAP financial measures to our financial statements as prepared in accordance with GAAP are as follows: Cost of Doing Business (in thousands, except percentages) Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 2025 2024 Total operating expenses – GAAP $ 56,436 $ 52,000 $ 115,401 $ 103,369 Amortization (1) (462) (508) (926) (816) Depreciation (in operating departments) (858) (1,095) (1,815) (2,145) Cost of doing business $ 55,116 $ 50,397 $ 112,660 $ 100,408 Net sales $ 146,104 $ 139,105 $ 299,599 $ 279,521 Cost of doing business as a percentage of net sales – non-GAAP 38 % 36 % 38 % 36 % (1) Includes amortization of definite-lived intangible assets and cloud computing amortization. 34 Table of Contents Adjusted EBITDA (in thousands, except percentages) Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 2025 2024 Net income – GAAP $ 29,851 $ 15,536 $ 48,776 $ 33,018 (Benefit) provision for income taxes (7,412) 4,270 (2,081) 9,860 Interest income (106) (66) (254) (140) Interest expense 1,021 1,008 1,894 2,154 Amortization (1) 462 508 926 816 Depreciation 1,943 2,170 3,971 4,180 Adjusted EBITDA $ 25,759 $ 23,426 $ 53,232 $ 49,888 Net sales $ 146,104 $ 139,105 $ 299,599 $ 279,521 Adjusted EBITDA as a percentage of net sales – non-GAAP 18 % 17 % 18 % 18 % (1) Includes amortization of definite-lived intangible assets and cloud computing amortization. Adjusted EPS During the second quarter of fiscal year 2025 we released a previously unrecognized tax benefit associated with the Tax Cuts and Jobs Act of 2017 mandatory “toll tax” on unremitted foreign earnings. This item is infrequent in nature and not reflective of the underlying operational results of our business. We have included a non-GAAP measure of Adjusted EPS which is defined as diluted EPS less benefits associated with this toll tax on unremitted earnings. The following is a reconciliation of diluted EPS to Adjusted EPS: Three Months Ended February 28/29, Six Months Ended February 28/29, 2025 2024 2025 2024 Diluted EPS - GAAP $ 2.19 $ 1.14 $ 3.58 $ 2.42 Release of Uncertain Tax Position - Tax Cut and Jobs Act (1) (0.87) — (0.87) — Adjusted diluted EPS - Non-GAAP $ 1.32 $ 1.14 $ 2.71 $ 2.42 (1) Includes the tax impact on adjustment Liquidity and Capital Resources Overview Our financial condition and liquidity remain strong. Although there continues to be uncertainty related to adverse global economic conditions, volatility in financial markets, the current inflationary environment and their impacts on our future results, we believe our efficient business model positions us to manage our business through such situations. We continue to manage all aspects of our business including, but not limited to, monitoring our liquidity, the financial health of our customers, suppliers and other third-party relationships, implementing gross margin enhancement strategies and developing new opportunities for growth. Our principal sources of liquidity are cash generated from operations and cash currently available from our existing unsecured revolving credit facility under the Credit Agreement with Bank of America, N.A. We use the revolving credit facility primarily for our general working capital needs. We also hold borrowings under the Note Agreement. See Note 8 – Debt for additional information on these agreements. We have historically held a balance of outstanding draws on our line of credit in either U.S. Dollars in the Americas segment, or in Euros and Pounds Sterling in the EIMEA segment. Euro and Pound Sterling denominated draws fluctuate in U.S. Dollars from period to period due to changes in foreign currency exchange rates. We regularly convert many of our draws on our line of credit to new draws with new maturity dates and interest rates. We have the ability to refinance any draws under the line of credit with successive short-term borrowings through the April 30, 2029 maturity date of the Credit Agreement. Outstanding draws for which we have both the ability and intent to refinance with successive short-term 35 Table of Contents borrowings for a period of at least twelve months are classified as long-term. As of February 28, 2025, $18.9 million of this facility was classified as long-term and was entirely denominated in Euros. $29.9 million was classified as short-term and was entirely denominated in U.S. Dollars. In the United States, we held $66.4 million in fixed rate long-term borrowings as of February 28, 2025, consisting of senior notes under our Note Agreement. We paid $0.4 million in principal payments on our Series A Notes during the first half of fiscal year 2025. There were no other letters of credit outstanding or restrictions on the amount available on our line of credit or notes. Per the terms of both the Note Agreement and the Credit Agreement, our consolidated leverage ratio cannot be greater than three and a half to one and our consolidated interest coverage ratio cannot be less than three to one. See Note 8 – Debt for additional information on these financial covenants. At February 28, 2025, we were in compliance with all material debt covenants. We continue to monitor our compliance with all debt covenants and, at the present time, we believe that the likelihood of being unable to satisfy all material covenants is remote. At February 28, 2025, we had a total of $53.0 million in cash and cash equivalents. We do not foresee any ongoing issues with repaying our borrowings and we closely monitor the use of this credit facility. We believe that our future cash from domestic and international operations, together with our access to funds available under our unsecured revolving credit facility, will provide adequate resources to fund short-term and long-term operating requirements, capital expenditures, dividend payments, acquisitions, new business development activities and share repurchases. On June 19, 2023, the Board approved the 2023 Repurchase Plan. Under the 2023 Repurchase Plan, which became effective on September 1, 2023, we are authorized to acquire up to $50.0 million of our outstanding shares through August 31, 2025, of which $35.2 million remains available for the repurchase of shares of common stock as of February 28, 2025. Cash Flows The following table summarizes our cash flows by category for the periods presented (in thousands): Six Months Ended February 28/29, 2025 2024 Change Net cash provided by operating activities $ 22,908 $ 44,892 $ (21,984) Net cash used in investing activities (1,800) (1,743) (57) Net cash used in financing activities (12,633) (35,589) 22,956 Effect of exchange rate changes on cash and cash equivalents (2,179) (260) (1,919) Net increase in cash and cash equivalents $ 6,296 $ 7,300 $ (1,004) Operating Activities Net cash provided by operating activities decreased $22.0 million to $22.9 million for the six months ended February 28, 2025. Cash flows from operating activities depend heavily on operating performance and changes in working capital. Our primary source of operating cash flows for the six months ended February 28, 2025 was net income of $48.8 million, which increased approximately $15.8 million from period to period, primarily due to the release of the uncertain tax position in the second quarter of fiscal year 2025 that resulted in a net benefit of $11.9 million, as discussed in Note 13 to the condensed consolidated financial statements. Other changes in adjustments to reconcile net income to cash decreased net cash provided by operating activities by $1.0 million. Changes in working capital decreased net cash provided by operating activities by $24.8 million for the six months ended February 28, 2025 primarily due to changes in inventory balances and a larger decrease in accrued payroll liabilities compared to the prior period. Changes in inventory balances decreased net cash provided by operating activities by $15.8 million. Inventory balances increased during the first six months of fiscal year 2025 primarily to support certain supply chain initiatives in EIMEA and to meet strong demand in the region, compared to decreases in inventory balances, specifically in the Americas in the comparative period. In addition, net cash provided by operating activities decreased by $6.5 million primarily due to higher earned incentive payouts in the first half of fiscal year 2025 compared to the same period of the prior fiscal year. Investing Activities Net cash used in investing activities remained relatively constant from period to period. 36 Table of Contents Financing Activities Net cash used in financing activities decreased $23.0 million to $12.6 million for the six months ended February 28, 2025. This change was primarily due to net proceeds of $22.1 million on our revolving credit facility during the first six months of the fiscal year, compared to net repayments of $4.2 million in the corresponding period of the prior fiscal year. This decrease in net cash used in financing activities was slightly offset by increases in dividends paid to stockholders of $1.5 million and increases of treasury stock repurchases of $1.4 million. Effect of Exchange Rate Changes All of our foreign subsidiaries currently operate in currencies other than the U.S. Dollar and a significant portion of our consolidated cash balance is denominated in these foreign functional currencies, particularly at our U.K. subsidiary. As a result, our cash and cash equivalents balances are subject to the effects of the fluctuations in these functional currencies against the U.S. Dollar at the end of each reporting period. The net effect of exchange rate changes on cash and cash equivalents, when expressed in U.S. Dollar terms, was a decrease in cash of $2.2 million for the six months ended February 28, 2025 as compared to a decrease in cash of $0.3 million for the six months ended February 29, 2024. These changes were primarily due to fluctuations in various foreign currency exchange rates from period to period, but the majority is related to the fluctuations in the Euro and Pound Sterling against the U.S. Dollar. Commercial Commitments We have ongoing relationships with various third-party suppliers (contract manufacturers) that manufacture our products and third-party distribution centers that warehouse and ship our 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 our third-party distribution centers or customers in accordance with agreed upon shipment terms. Although we have contractual minimum purchase obligations with certain contract manufacturers, such obligations are immaterial or well below the volume of goods that we have historically purchased. In addition, in the ordinary course of business, we communicate supply needs to our contract manufacturers based on orders and short-term projections, ranging from two to six months. We are committed to purchase the products produced by the contract manufacturers based on the projections provided. Upon the termination of contracts with contract manufacturers, we obtain certain inventory control rights and are obligated to work with the contract manufacturer to sell through all product held by or manufactured by the contract manufacturer on our behalf during the termination notification period. If any inventory remains at the contract manufacturer at the termination date, we are 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, we may also enter into commitments with other manufacturers to purchase finished goods and components to support innovation initiatives and/or supply chain initiatives. As of February 28, 2025, no such commitments were outstanding. Share Repurchase Plans The information required by this item is incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 9 — Share Repurchase Plan included in this report. Dividends On March 18, 2025, the Company’s Board declared a cash dividend of $0.94 per share payable on April 30, 2025 to stockholders of record at the close of business on April 18, 2025. Critical Accounting Estimates Our discussion and analysis of our operating results and financial condition is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Critical accounting estimates are those that involve subjective or complex judgments. The following areas all require the use of judgments and estimates: revenue recognition and accounting for income taxes. Estimates in each of these areas are based on historical experience and various judgments and assumptions that we believe are appropriate. Actual results may materially differ from these estimates. 37 Table of Contents There have been no material changes in our critical accounting estimates from those disclosed in Part II—Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” to our consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, which was filed with the SEC on October 21, 2024. Recently Issued Accounting Standards Information on Recently Issued Accounting Standards that could potentially impact our consolidated financial statements and related disclosures is incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 2 – Basis of Presentation and Summary of Significant Accounting Policies, included in this report. Item 3. Quantitative and Qualitative Disclosures About Market Risk The information required by this item is incorporated by reference to Part II—Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, which was filed with the SEC on October 21, 2024.