What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-10 compared with 2025-04-09 · 182 added, 169 removed, 342 unchanged (51% of the section changed)

39 unchanged sentences

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.

The following summarizes the financial and operational highlights for our business during the six months ended February 28, 2025:

The following summarizes the financial and operational highlights for our business during the nine months ended May 31, 2025:

• Consolidated net sales increased $21.9 million or 5%, to $456.5 million compared to the corresponding period of the prior fiscal year.

2 unchanged sentences

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.

Consolidated net sales was unfavorably impacted by changes in foreign currency exchange rates, which impact was estimated to be $5.0 million from period to period.

• Gross profit as a percentage of net sales increased to 55.2% from 53.1% in the corresponding period of the prior fiscal year.

6 unchanged sentences

• 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.

• During the nine months ended May 31, 2025, we returned approximately $47.2 million to our stockholders 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.

We utilize third-party manufacturers and distribution centers that are primarily in regions near our customers and end users, which mitigates 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.

In addition, any supply chain constraints, inflationary impacts or weakening in consumer demand as a result of changes to global economic conditions could impact our results.

See our risk factors disclosed in Part I―Item 1A, “Risk Factors,” 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 for further information on risks related to global economic conditions and uncertainty of trade relations and tariffs affecting trade between the U.S.

and other countries.

Results of Operations

Three and Six Months Ended February 28, 2025 Compared to Three and Six Months Ended February 29, 2024

Three and Nine Months Ended May 31, 2025 Compared to Three and Nine Months Ended May 31, 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,

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

2025 2024 Change from

17 unchanged sentences

The following table summarizes net sales by segment (in thousands, except percentages):

Three Months Ended February 28/29, Six Months Ended February 28/29,

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

2025 2024 Change from

7 unchanged sentences

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,

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

2025 2024 Change from

10 unchanged sentences

Change from Prior Year

First Quarter Second Quarter Year to Date

First Quarter Second Quarter Third Quarter Year to Date

Increase in average selling price (1)

1 unchanged sentence

Increase in sales volume (1)

6.3 3.1 2.4 11.8

Currency impact on current period (1.1) (1.4) (1.8) (4.3)

1 unchanged sentence

(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

Americas Sales – Three Months Ended – May 31, 2025 Compared to May 31, 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.

• 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

• WD-40 Multi-Use Product sales increased $2.7 million, or 5%, primarily due to the increase in U.S.

of $3.0 million.

sales increased primarily due to higher sales volume due to higher level of promotional activities and timing of customer orders from certain mass retailers and online retailers.

Sales in Latin America remained relatively constant from period to period.

Latin America distributor markets decreased in sales volume from period to period due to a lower level of promotional activities and timing of customer orders, which were offset by an increase in sales volume in Brazil.

• WD-40 Specialist sales increased $0.4 million, or 4%, primarily due to increased distribution in the United States.

• Other maintenance product and homecare and cleaning product sales remained relatively constant from period to period.

• For the three months ended May 31, 2025, 73% of sales came from the U.S., and 27% of sales came from Canada and Latin America combined compared to the three months ended May 31, 2024 when 72% of sales came from the U.S., and 28% of sales came from Canada and Latin America.

Americas Sales – Nine Months Ended – May 31, 2025 Compared to May 31, 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.

• WD-40 Multi-Use Product sales increased $9.1 million, or 6%, primarily due to increases in Latin America and U.S.

of $6.9 million and $2.7 million, respectively.

Sales in Brazil increased $7.0 million primarily due to operating under a direct model for the nine months ended May 31, 2025.

Early in the third quarter of fiscal year 2024, we acquired a Brazilian distributor and shifted from an indirect distribution model to a direct model.

In addition, sales in other Latin American markets increased $0.9 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.

Sales in U.S.

increased primarily due to increased sales volumes due to a higher level of promotional programs.

These increases in Latin America and U.S.

were partially offset by lower sales in Mexico of $2.1 million primarily due to unfavorable changes in foreign currency exchange rates.

• WD-40 Specialist sales increased $2.1 million , or 9% , primarily due to new distribution and increased demand in the United States.

1 unchanged sentence

• Homecare and cleaning product sales decreased $0.5 million, or 5%, 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.

• For the nine months ended May 31, 2025, 72% of sales came from the U.S., and 28% of sales came from Canada and Latin America combined compared to the nine months ended May 31, 2024 when 74% of sales came from the U.S., and 26% of sales came from Canada and Latin America.

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,

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

2025 2024 Change from

10 unchanged sentences

Change from Prior Year

First Quarter Second Quarter Year to Date

First Quarter Second Quarter Third Quarter Year to Date

Increase in average selling price (1)

$ 0.5 $ 0.9 $ 1.7 $ 3.1

Increase in sales volume (1)

Increase (decrease) in sales volume (1)

6.2 7.4 (4.8) 8.8

Currency impact on current period 2.0 (3.0) 0.4 (0.6)

Increase in net sales $ 8.7 $ 5.3 $ 14.0

Increase (decrease) in net sales $ 8.7 $ 5.3 $ (2.7) $ 11.3

1 unchanged sentence

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.

• 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.

EIMEA Sales – Three Months Ended – May 31, 2025 Compared to May 31, 2024

Net sales decreased in the EIMEA segment from period to period, primarily due to the following:

• WD-40 Multi-Use Product sales decreased $2.6 million, or 6%, primarily due to a decrease in sales volume to our marketing distributor customers which unfavorably impacted sales by $3.9 million, primarily in the Middle East region.

This decrease was due to lower demand as a result of weaker economic conditions in certain regions as well as timing of customer orders.

This decrease was partially offset by increases in some of our direct markets, including the U.K.

and France, which increased $0.5 million and $0.4 million, respectively, due to increased sales volume.

• WD-40 Specialist sales increased $1.3 million, or 15%, primarily due to higher sales volume as a result of increased promotional activity for our WD-40 Bike line in the DACH region, as well as stronger levels of demand in France and other direct markets.

• Other maintenance product sales remained relatively constant from period to period.

1 unchanged sentence

EIMEA Sales – Six Months Ended – February 28, 2025 Compared to February 29, 2024

EIMEA Sales – Nine Months Ended – May 31, 2025 Compared to May 31, 2024

Net sales increased in the EIMEA segment from period to period, highlighted by the following:

• WD-40 Multi-Use Product sales increased $10.1 million, or 8%, 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.

Sales in direct markets increased significantly in France, Iberia, Benelux, and Italy which were up $2.2 million, $1.6 million, $1.4 million, and $1.3 million, respectively.

Sales to our marketing distributors in various regions, increased $2.2 million, most predominately in India, primarily due to increased distribution, higher levels of demand and timing of customer orders.

Most regions in EIMEA have experienced continued increases in sales volumes after a temporary reduction in demand from price increases we implemented during fiscal year 2023.

• 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.

• WD-40 Specialist and other maintenance product sales increased $3.3 million, or 15%, primarily due to the increased demand and new distribution associated with premiumization efforts in support of our strategic framework.

Other contributing factors include increased promotional activities discussed in the section for the three months ended May 31, 2025.

• Homecare and cleaning product sales decreased $2.3 million, or 35%, primarily due to reduced demand in the U.K.

as discussed above in the section for the three months ended February 28, 2025.

as a result of a lower level of advertising and promotional activities associated with these brands, as discussed above in the section for the three months ended May 31, 2025.

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,

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

Prior Year Change from

9 unchanged sentences

Change from Prior Year

First Quarter Second Quarter Year to Date

First Quarter Second Quarter Third Quarter Year to Date

Increase (decrease) in average selling price (1)

3 unchanged sentences

Currency impact on current period 0.6 (0.5) (0.2) (0.1)

Decrease in net sales $ (1.0) $ (0.3) $ (1.3)

(Decrease) increase in net sales $ (1.0) $ (0.3) $ 1.5 $ 0.2

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-Pacific Sales – Three Months Ended – May 31, 2025 Compared to May 31, 2024

Net sales in the Asia-Pacific segment increased from period to period, highlighted by the following:

• WD-40 Multi-Use Product sales increased $1.6 million, or 10%, primarily due to increases in China and our Asia distributor markets of $0.9 million and $0.6 million, respectively.

Sales in China increased due to increased sales volume from successful promotional programs and marketing activities as well as increased distribution.

Sales in our Asia Distributor markets increased due to successful promotional programs and increased demand, particularly in Indonesia and Taiwan.

• WD-40 Specialist and other maintenance product sales remained relatively constant from period to period.

• Homecare and cleaning product sales decreased $0.2 million, or 8%, from period to period primarily due to lower sales due to a lower level of promotional activity.

Asia-Pacific Sales – Nine Months Ended – May 31, 2025 Compared to May 31, 2024

Net sales in the Asia-Pacific segment increased from period to period, highlighted by the following:

• WD-40 Multi-Use Product sales remained relatively constant due to sales decreases in Asia distributor markets of $2.6 million mostly offset by sales increases in China and Australia of $2.1 million and $0.3 million, respectively.

Asia distributor markets experienced a decrease in sales volume primarily due to market disruption driven by the strengthening of the U.S.

Dollar during the first half of fiscal year 2025, as well as weaker economic conditions in certain regions.

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.

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 $0.4 million, or 6%, 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.

• Other maintenance and homecare and cleaning product sales remained relatively constant from period to period.

Our homecare and cleaning businesses in the Asia-Pacific segment are not held for sale.

8 unchanged sentences

• 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.

These costs totaled $4.6 million, or 2.9% of net sales for both the three months ended May 31, 2025 and 2024, respectively, and $13.5 million and $12.6 million, or 3.0% and 2.9% of net sales for the nine months ended May 31, 2025 and 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,

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

2025 2024 Change from

4 unchanged sentences

(1) Basis points (“bps”) change in gross margin.

Gross Margin – Three Months Ended – February 28, 2025 Compared to February 29, 2024

Gross Margin – Three Months Ended – May 31, 2025 Compared to May 31, 2024

Gross margin increased 310 bps primarily due to the following favorable impacts:

Favorable Explanations

Lower costs of aerosol cans

Increases in average selling prices

Lower costs of specialty chemicals used in the formulation of our products

Lower costs of aerosol cans

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)

Gross margin excluding these products would have been 0.5% higher during the three months ended May 31, 2025.

Gross Margin – Nine Months Ended – May 31, 2025 Compared to May 31, 2024

Gross margin increased 210 bps primarily due to the following favorable impacts:

Lower costs of aerosol cans

Lower costs of specialty chemicals used in the formulation of our products

Favorable sales mix and other miscellaneous mix impacts and decreases in miscellaneous other input costs

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.

Favorable sales mix and other miscellaneous mix impacts

Gross margin excluding assets held for sale would have been 0.6% higher during the nine months ended May 31, 2025.

Selling, General and Administrative (“SG&A”) Expenses

Three Months Ended February 28/29, Six Months Ended February 28/29,

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

2025 2024 Change from

3 unchanged sentences

% of net sales 32.8 % 29.4 % 33.1 % 31.0 %

SG&A Expenses – Three Months Ended – February 28, 2025 Compared to February 29, 2024

SG&A Expenses – Three Months Ended – May 31, 2025 Compared to May 31, 2024

The increase in SG&A expenses was primarily due to increases in employee-related costs of $5.8 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.

These higher employee-related costs include additional headcount to support various sales growth initiatives identified within our strategic framework, as well as headcount related to the enhancement of our information systems.

SG&A Expenses – Nine Months Ended – May 31, 2025 Compared to May 31, 2024

The increase in SG&A expenses was primarily due to increases in employee-related costs of $11.5 million due to higher accrued incentive compensation, annual compensation increases, higher stock-based compensation expense and higher headcount.

These higher employee-related costs include additional headcount to support various sales growth initiatives identified within our strategic framework and headcount related to the enhancement of our information systems.

Professional services fees increased SG&A by $1.2 million primarily due to increases in the EIMEA segment in support of various strategic initiatives.

Freight expense increased $0.9 million primarily in the Americas and EIMEA segments, due to higher sales volumes that resulted in higher outbound freight costs.

Credit loss adjustments increased in the U.S.

by $0.6 million and travel and meeting expenses increased $0.6 million as a result of additional 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 $0.6 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

February 29, 2024, respectively.

Research and development costs were $2.5 million and $2.2 million for the three months ended May 31, 2025 and 2024, respectively, and $6.3 million and $5.8 million for the nine months ended May 31, 2025 and 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.

3 unchanged sentences

Advertising and Sales Promotion (“A&P”) Expenses

Three Months Ended February 28/29, Six Months Ended February 28/29,

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

Prior Year Change from

2 unchanged sentences

% of net sales 5.8 % 6.0 % 5.5 % 5.3 %

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.

A&P Expenses – Three M onths Ended – May 31, 2025 Compared to May 31, 2024

A&P expenses remained relatively constant from period to period.

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

Total promotional costs recorded as a reduction to sales were $8.6 million and $7.7 million for the three months ended May 31, 2025 and 2024, respectively.

Therefore, our total expenditures on A&P activities were $17.7 million and $17.0 million for the three months ended May 31, 2025 and 2024, respectively.

A&P Expenses – Nine Months Ended – May 31, 2025 Compared to May 31, 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.

Although A&P expenses increased from period to period, A&P expenses as a percentage of net sales remained relatively constant.

Total promotional costs recorded as a reduction to sales were $25.1 million and $23.1 million, for the nine months ended May 31, 2025 and 2024, respectively.

Therefore, our total expenditure on A&P activities was $50.1 million and $46.1 million for the nine months ended May 31, 2025 and 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,

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

2025 2024 Change from

9 unchanged sentences

These expenses are reported separate from our identified segments and are included in Selling, General and Administrative expenses on our consolidated statements of operations.

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.

Americas Operating Income – Three Months Ended – May 31, 2025 Compared to May 31, 2024

Income from operations for the Americas increased to $20.5 million, up $2.1 million, or 11.0%, primarily due to a $3.1 million increase in sales and a higher gross margin, which was partially offset by higher operating expenses.

Gross margin for the Americas segment increased from 50.6% to 54.2%, primarily due a lower level of discounts that we gave to our customers, as well as decreases in the costs of petroleum-based specialty chemicals, and the favorable impact of increases in average selling price.

Operating expenses increased $2.3 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 increased from 24.5% to 26.2% period over period.

Americas Operating Income – Nine Months Ended – May 31, 2025 Compared to May 31, 2024

Income from operations for the Americas increased to $46.3 million, up $0.5 million, or 1%, primarily due to a increase in sales of $10.4 million and a higher gross margin partially offset by higher operating expenses.

Gross margin for the Americas segment increased from 50.2% to 51.7%, primarily due to decreases in the costs of petroleum-based specialty chemicals, the favorable impact of increases in average selling price and a lower level of discounts that we gave to our customers.

These favorable impacts were partially offset by higher warehousing, distribution and freight costs increases as well as increases to miscellaneous other input costs.

Operating expenses increased $7.8 million primarily due to higher employee-related costs as a result of increased headcount, higher accrued incentive compensation and annual compensation increases.

In addition, operating expenses increased due to a higher level of A&P expenses, higher outbound freight costs primarily due to increased sales and an increase in provision for credit losses from period to period.

Operating income as a percentage of net sales decreased from 22.6% to 21.7% period over period.

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.

EIMEA Operating Income – Three Months Ended – May 31, 2025 Compared to May 31, 2024

Income from operations for the EIMEA segment decreased to $12.0 million, down $1.7 million, or 12%, primarily due to due to higher operating expenses and decreased sales partially offset by higher gross margin.

Operating expenses increased $1.9 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

In addition, operating expenses increased due to a higher level of professional service costs and travel and meeting expenses in support of our strategic framework.

Gross margin for the EIMEA segment increased from 54.8% to 57.7% primarily due to the favorable impact of price increases as well as favorable changes in sales mix and market mix from period to period, and decreases to miscellaneous other input costs.

Operating income as a percentage of net sales decreased from 23.1% to 21.2% period over period.

EIMEA Operating Income – Nine Months Ended – May 31, 2025 Compared to May 31, 2024

Income from operations for the EIMEA segment increased to $41.0 million, up $5.7 million, or 16%, primarily due to a $11.3 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.

Gross margin for the EIMEA segment increased from 54.4% to 57.9% primarily due to the favorable impact of price increases as well as decreases to miscellaneous other input costs, and decreases in the costs of aerosol cans.

Operating expenses increased $6.5 million primarily due to the factors as discussed above in the section for the three months ended May 31, 2025, as well as a higher level of A&P expenses from period to period.

Operating income as a percentage of net sales increased from 21.7% to 23.6% period over period.

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%.

Asia-Pacific Operating Income – Three Months Ended – May 31, 2025 Compared to May 31, 2024

Income from operations for the Asia-Pacific segment increased to $7.1 million, up $0.3 million, or 5%, primarily due to a $1.5 million increase in sales and a higher gross margin, partially offset by higher operating expenses.

Gross margin for the Asia-Pacific segment increased from 57.6% to 59.0%, primarily due to a lower level of discounts that we gave to our customers partially offset by the unfavorable changes in sales mix and market mix from period to period.

Operating expenses increased $0.8 million due to higher employee-related costs as a result of annual compensation increases as well as higher A&P expenses from period to period.

Operating income as a percentage of net sales decreased slightly from 32.9% to 32.1%.

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%.

Asia-Pacific Operating Income – Nine Months Ended – May 31, 2025 Compared to May 31, 2024

Income from operations for the Asia-Pacific segment decreased to $24.6 million, down $0.6 million, or 3%, due to higher operating expenses partially offset by increased sales and a higher gross margin, which increased slightly from 58.5% to 59.0%.

Operating expenses increased $1.2 million primarily due to the factors as discussed above in the section for the three months ended May 31, 2025.

Operating income as a percentage of net sales decreased from 36.4% to 35.4% period over period.

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 – Three Months Ended – May 31, 2025 Compared to May 31, 2024

Unallocated corporate expenses increased to $12.2 million, up $0.6 million, or 5%, as a result of higher accrued incentive compensation expense from period to period.

Unallocated Corporate Expenses – Nine Months Ended – May 31, 2025 Compared to May 31, 2024

Unallocated corporate expenses increased to $36.2 million, up $2.1 million, or 6%, 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.

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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,

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

2025 2024 Change 2025 2024 Change

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Other income (expense), net $ 880 $ (283) $ 1,163 $ 813 $ (516) $ 1,329

(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.

Provision for income taxes $ 6,485 $ 6,005 $ 480 $ 4,404 $ 15,865 $ (11,461)

Interest Income

Interest income remained relatively consistent for both the three and nine months ended May 31, 2025 and 2024.

Interest Expense

Interest expense decreased by $0.3 million for the $0.6 million for the three months ended May 31, 2025 and 2024, respectively, primarily due to lower aggregate outstanding balances on our revolving credit agreement from period to period.

Other Income (Expense), Net

Other income (expense), net changed favorably by $1.2 million and $1.3 million for the three and nine months ended May 31, 2025 and 2024, respectively, primarily due to foreign currency exchange gains which were recorded for the three and nine months ended May 31, 2025 compared to net foreign currency exchange losses which were recorded in the same period of the prior fiscal year as a result of fluctuations in the foreign currency exchange rates for both the Euro and the U.S.

Dollar against the Pound Sterling.

Provision for Income Taxes

The provision for income taxes was 23.6% and 23.2% of income before income taxes for the three months ended May 31, 2025 and 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.

The provision for income taxes was 5.9% and 23.1% of income before income taxes for the nine months ended May 31, 2025 and 2024, respectively.

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.

Net income increased 6% to $21.0 million, or $1.54 per common share on a fully diluted basis, for the three months ended May 31, 2025 compared to $19.8 million, or $1.46 per common share on a fully diluted basis, for the three months ended May 31, 2024.

Net income increased 32% to $69.8 million, or $5.13 per common share on a fully diluted basis, for the nine months ended May 31, 2025 compared to $52.9 million, or $3.88 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 of $11.9 million.

Excluding this one-time benefit, net income would have increased $5.0 million, or 9%.

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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.

These performance measures are part of our current 55/30/25 business model, which includes gross margin, cost of doing business, and “Adjusted EBITDA” (defined below), 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

as net income before interest, income taxes, depreciation, amortization of definite-lived intangible assets, and cloud computing amortization.

Adjusted EBITDA is defined 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.

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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.

Our targets for gross margin, cost of doing business and Adjusted EBITDA are long-term in nature.

We expect to make progress towards our cost of doing business and Adjusted EBITDA targets over time.

Progression towards our cost of doing business and Adjusted EBITDA measures may be challenging 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.

Despite these potential challenges, we intend to focus our resources and proceeds from the anticipated 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,

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

2025 2024 2025 2024

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20 % 19 % 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.

(1) Percentages may not aggregate to Adjusted EBITDA percentage due to rounding and because amounts recorded in other income (expense), net on our condensed 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.

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Cost of Doing Business (in thousands, except percentages)

Three Months Ended February 28/29, Six Months Ended February 28/29,

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

2025 2024 2025 2024

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Adjusted EBITDA (in thousands, except percentages)

Three Months Ended February 28/29, Six Months Ended February 28/29,

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

2025 2024 2025 2024

Net income – GAAP $ 20,977 $ 19,842 $ 69,753 $ 52,860

(Benefit) provision for income taxes (7,412) 4,270 (2,081) 9,860

Provision for income taxes 6,485 6,005 4,404 15,865

Interest income (104) (136) (358) (276)

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The following is a reconciliation of diluted EPS to Adjusted EPS:

Three Months Ended February 28/29,

Six Months Ended February 28/29,

Three Months Ended May 31,

Nine Months Ended May 31,

Diluted EPS - GAAP $ 1.54 $ 1.46 $ 5.13 $ 3.88

Release of Uncertain Tax Position - Tax Cut and Jobs Act (1)

(0.87) — (0.87) —

Adjusted diluted EPS - Non-GAAP $ 1.54 $ 1.46 $ 4.26 $ 3.88

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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.

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.

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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

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.

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

As of May 31, 2025, $20.3 million of this facility was classified as long-term and was entirely denominated in Euros.

$9.5 million was classified as short-term and was entirely denominated in U.S.

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.

In the United States, we held $66.0 million in fixed rate long-term borrowings as of May 31, 2025, consisting of senior notes under our Note Agreement.

We paid $0.8 million in principal payments on our Series A Notes during the first nine months 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.

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See Note 8 — Debt for additional information on these financial covenants.

At February 28, 2025, we were in compliance with all material debt covenants.

At May 31, 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.

At May 31, 2025, we had a total of $51.7 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.

On June 16, 2025, the Board approved the extension of the expiration date to August 31, 2026 for the 2023 Repurchase Plan, which became effective on September 1, 2023 and was set to expire August 31, 2025.

We are authorized to acquire up to $50.0 million of our outstanding shares through this expiration date of August 31, 2026, of which $32.2 million remains available for the repurchase of shares of common stock as of May 31, 2025.

The following table summarizes our cash flows by category for the periods presented (in thousands):

Six Months Ended February 28/29,

Nine Months Ended May 31,

2025 2024 Change

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Effect of exchange rate changes on cash and cash equivalents (828) (419) (409)

Net increase in cash and cash equivalents $ 6,296 $ 7,300 $ (1,004)

Net increase (decrease) in cash and cash equivalents $ 4,983 $ (2,843) $ 7,826

Operating Activities

Net cash provided by operating activities decreased $22.0 million to $22.9 million for the six months ended February 28, 2025.

Net cash provided by operating activities decreased $6.8 million to $58.0 million for the nine months ended May 31, 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.

Our primary source of operating cash flows for the nine months ended May 31, 2025 was net income of $69.8 million, which increased approximately $16.9 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.

Changes in our working capital decreased net cash provided by operating activities by $14.8 million for the nine months ended May 31, 2025, compared to a $3.1 million increase in the prior period.

The unfavorable $11.7 million net change in working capital was primarily due to changes in inventory, accounts payable, and other assets.

Changes in inventory balances decreased net cash provided by operating activities by $11.7 million from period to period.

We took deliberate actions to significantly decrease inventory levels during the nine months ended May 31, 2024, which actions resulted in a significant net cash inflow in the comparative period, whereas inventory levels remained relatively consistent in the current period.

Changes in accounts payable balances decreased working capital $9.6 million primarily due to the timing of payments to vendors in the Americas from period to period.

Changes in other asset balances decreased working capital by $6.2 million, primarily due to a $4.1 million increase in tax receivable due to timing of tax payments as well as a $0.7 million increase in assets related to cloud-based information systems.

These unfavorable changes in working capital were partially offset by favorable changes in trade and other accounts receivable balances of $20.4 million primarily due to the timing of collection of payments from customers, primarily in the U.S.

Investing Activities

Net cash used in investing activities remained relatively constant from period to period.

Net cash used in investing activities decreased $6.3 million to $2.8 million.

In the prior fiscal year, we acquired a Brazilian distributor for $6.2 million in cash as we shifted from an indirect distribution model to a direct model.

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.

Net cash used in financing activities decreased $8.8 million to $49.3 million for the nine months ended May 31, 2025 primarily due to net proceeds of $1.6 million on our revolving credit facility during the first nine months of the fiscal year, compared to net repayments of $11.6 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 $2.3 million and increases of treasury stock repurchases of $1.6 million.

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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.

Dollar terms, was a decrease in cash of $0.8 million for the nine months ended May 31, 2025 as compared to a decrease in cash of $0.4 million for the nine months ended May 31, 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.

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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.

As of May 31, 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.

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.

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 and Note 15 — Subsequent Events included in this report.

On June 17, 2025, the Company’s Board declared a cash dividend of $0.94 per share payable on July 31, 2025 to stockholders of record at the close of business on July 18, 2025.

Critical Accounting Estimates

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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 2. Management’s Discussion and Analysis