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, 2025, which was filed with the Securities and Exchange Commission (“SEC”) on October 27, 2025. Use of Non-GAAP Constant Currency In order to show the impact of changes in foreign currency exchange rates on our results of operations, we have included constant currency disclosures, where necessary, in the Overview and Results of Operations sections which follow. Constant currency disclosures represent the translation of our current fiscal year revenues, expenses and net income from the functional currencies of our subsidiaries to U.S. Dollars using the exchange rates in effect for the corresponding period of the prior fiscal year. Results on a constant currency basis are not in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”) and should be considered in addition to, not as a substitute for, results prepared in accordance with U.S. GAAP. We use results on a constant currency basis as one of the measures to understand our operating results and evaluate our performance in comparison to prior periods in order to enhance the visibility of the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. Management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing our underlying business performance and trends. However, reference to constant currency basis should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP. 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 divestiture transaction; disruption to the parties’ business as a result of the announcement or completion of any divestiture transaction; the Company's ability to successfully complete any planned divestiture; expected timing for the closing of any divestitures; expected proceeds from any divestiture; the intended use of proceeds by the Company from any divestiture transaction; impact of any 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 geopolitics and political conditions or relations between the United States and other nations; changes in trade policies and tariffs and the impact therefrom; the impacts from inflationary trends; the impacts from supply chain constraints and supply chain disruptions; changes in interest rates; and forecasted foreign currency exchange rates and commodity prices and specialty chemicals. 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, 2025, 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® 22 Table of Contents Multi-Use Product, WD-40 Specialist®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 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 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 stores, sport retailers, and independent bike dealers. During the prior fiscal year 2025, certain assets of our homecare and cleaning product businesses in the Americas segment were reclassified to held for sale and they continue to be classified as held for sale as of February 28, 2026. The Company sold its homecare and cleaning product brands in the EIMEA segment during the fourth quarter of fiscal year 2025. These brands are included in fiscal year 2025 financial results but are not included in fiscal year 2026 financial results. Highlights The following summarizes the financial and operational highlights for our business during the six months ended February 28, 2026: • Consolidated net sales increased $16.5 million or 6%, to $316.1 million compared to the corresponding period of the prior fiscal year. Changes in foreign currency exchange rates from period to period had a favorable impact of $12.7 million on consolidated net sales for the first six months of fiscal year 2026. On a constant currency basis, net sales would have increased by $3.8 million, or 1%, from period to period. This favorable impact from changes in foreign currency exchange rates mainly came from our EIMEA segment, which accounted for 39% of our consolidated sales for the six months ended February 28, 2026. Increases in the average selling price of our products positively impacted net sales by approximately $4.5 million from period to period. Decreases in sales volume unfavorably impacted net sales by approximately $0.7 million from period to period, however, approximately $3.1 million of the decrease in sales volume for the six months ended February 28, 2026 was driven by the sale of our HCCP business in EIMEA during fiscal year 2025. Therefore, sales volume would have increased $2.4 million for the first six months of fiscal year 2026 on a comparable basis to prior year. 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. • Gross profit as a percentage of net sales increased to 55.9% from 54.7% in the corresponding period of the prior fiscal year. • Consolidated net income decreased $11.0 million, or 23%, compared to the corresponding period of the prior fiscal year. During the second quarter of the prior fiscal year, we released an uncertain tax position that generated a favorable income tax adjustment of $11.9 million. Excluding this one-time benefit from the prior fiscal year, net income would have increased $0.9 million, or 3%. • Diluted earnings per common share were $2.78 versus $3.58 in the prior fiscal year period. As noted above, during the second quarter of the prior fiscal year, we released an uncertain tax position that generated a favorable income tax adjustment. Excluding this one-time benefit, on a Non-GAAP basis, prior year adjusted diluted EPS was $2.71. • During the six months ended February 28, 2026, we returned approximately $42.4 million to our stockholders through share repurchases and dividends. Significant Developments We are currently monitoring the geopolitical conflicts in the Middle East which could adversely impact our results. Volatility in the price of oil impacts the cost of petroleum-based specialty chemicals included in our maintenance products. Subsequent to the escalation of these conflicts that occurred in late February 2026, the cost of these petroleum-based specialty chemicals have increased and will impact our cost of products sold. There is a delay before changes in costs of raw materials impact cost of products sold due to production and inventory life cycles. We do not expect significant impacts to our cost of products sold until the fourth quarter of fiscal year 2026 based on current inventory levels and inventory life cycles. Management is currently considering mitigation strategies to reduce the negative impacts these recent 23 Table of Contents geopolitical impacts will have on gross margin. It is not possible to reliably estimate the impact on our gross margin, nor the length or severity of the impact. While input costs other than petroleum-based specialty chemicals could increase in future periods, such increases have not significantly impacted the cost of our products to date. In addition, these developments have caused supply chain disruptions within the EIMEA segment for our Middle East distribution network, impacting the sourcing of raw materials by certain of our third-party manufacturers as well as shipping routes to certain customers supplied within our Middle East distribution network. Our net sales to these regions were approximately 3% of consolidated net sales for fiscal year 2025 and approximately 2% of consolidated net sales for the first half of fiscal year 2026. While supply chain constraints may impact our ability to service these areas, we anticipate that demand for our product will not be negatively impacted. We are actively managing these supply chain constraints and transportation disruptions through various temporary measures, such as utilizing different shipping routes within the region as well as working with our third-party manufacturers to ensure flexibility within our supply chain during these conflicts. The severity and duration of these conditions and their effects on our supply chain and our cost of products sold remain uncertain and it is not possible to estimate the extent to which these conditions will impact our financial results and operations in future periods. For further information, 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, 2025, which was filed with the SEC on October 27, 2025. Results of Operations Three and Six Months Ended February 28, 2026 Compared to Three and Six Months Ended February 28, 2025 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, Six Months Ended February 28, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent Net sales: WD-40 Multi-Use Product $ 127,366 $ 113,692 $ 13,674 12 % $ 245,163 $ 232,239 $ 12,924 6 % WD-40 Specialist 22,343 18,562 3,781 20 % 44,881 37,734 7,147 19 % Other maintenance products 7,125 7,063 62 1 % 15,685 14,851 834 6 % Total maintenance products 156,834 139,317 17,517 13 % 305,729 284,824 20,905 7 % HCCP (1) 4,837 6,787 (1,950) (29) % 10,365 14,775 (4,410) (30) % Total net sales 161,671 146,104 15,567 11 % 316,094 299,599 16,495 6 % Cost of products sold 71,730 66,388 5,342 8 % 139,321 135,796 3,525 3 % Gross profit 89,941 79,716 10,225 13 % 176,773 163,803 12,970 8 % Operating expenses 63,653 56,436 7,217 13 % 127,227 115,401 11,826 10 % Income from operations $ 26,288 $ 23,280 $ 3,008 13 % $ 49,546 $ 48,402 $ 1,144 2 % Net income (2) $ 20,318 $ 29,851 $ (9,533) (32) % $ 37,769 $ 48,776 $ (11,007) (23) % EPS – diluted (3) $ 1.50 $ 2.19 $ (0.69) (32) % $ 2.78 $ 3.58 $ (0.80) (22) % Shares used in diluted EPS 13,508 13,572 (64) — % 13,529 13,572 (43) — % (1) Homecare and cleaning products (“HCCP”). Approximately $1.5 million and $3.1 million of the decrease in net sales of HCCP for the three and six months ended February 28, 2026, respectively, was driven by the sale of our HCCP business in EIMEA during fiscal year 2025. 24 Table of Contents (2) 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, on a non-GAAP basis, prior quarter and prior year net income was $17.9 million and $36.8 million for the three and six months ended February 28, 2025, respectively. (3) Excluding the one-time tax benefit discussed above, on a non-GAAP basis, prior quarter and prior year adjusted diluted EPS was $1.32 and $2.71 for the three and six months ended February 28, 2025, respectively. Net Sales by Segment The following table summarizes net sales by segment (in thousands, except percentages): Three Months Ended February 28, Six Months Ended February 28, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent Americas $ 71,814 $ 65,529 $ 6,285 10 % $ 143,687 $ 134,965 $ 8,722 6 % EIMEA (1) 64,869 59,575 5,294 9 % 123,544 117,058 6,486 6 % Asia-Pacific 24,988 21,000 3,988 19 % 48,863 47,576 1,287 3 % Total $ 161,671 $ 146,104 $ 15,567 11 % $ 316,094 $ 299,599 $ 16,495 6 % (1) Prior fiscal year net sales include sales related to our EIMEA HCCP business, which was sold at the end of fiscal year 2025 and is no longer included in current year results. The divestiture resulted in approximately $1.5 million and $3.1 million reduction in net sales for the three and six months ended February 28, 2026, respectively. 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, Six Months Ended February 28, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 56,041 $ 51,058 $ 4,983 10 % $ 110,625 $ 103,959 $ 6,666 6 % WD-40 Specialist 9,020 7,720 1,300 17 % 18,437 15,953 2,484 16 % Other maintenance products 4,008 3,592 416 12 % 8,583 7,866 717 9 % Total maintenance products 69,069 62,370 6,699 11 % 137,645 127,778 9,867 8 % HCCP 2,745 3,159 (414) (13) % 6,042 7,187 (1,145) (16) % Total net sales $ 71,814 $ 65,529 $ 6,285 10 % $ 143,687 $ 134,965 $ 8,722 6 % % of consolidated net sales 44 % 45 % 46 % 45 % CC Net sales – non-GAAP (1) $ 70,601 $ 65,529 $ 5,072 8 % $ 142,029 $ 134,965 $ 7,064 5 % Currency impact on current period – non-GAAP $ 1,213 $ 1,658 (1) Current fiscal year constant currency net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales. 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): 25 Table of Contents Change from Prior Year First Quarter Second Quarter Year to Date Increase in average selling price (1) $ 0.6 $ 2.2 $ 2.8 Increase in sales volume (1) 1.4 2.8 4.2 Currency impact on current period 0.4 1.3 1.7 Increase in net sales $ 2.4 $ 6.3 $ 8.7 (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, 2026 Compared to February 28, 2025 Net sales in the Americas segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $5.0 million, or 10%, due to the increase in the U.S. of $5.0 million. U.S. sales increased primarily due to higher sales volume from certain mass retailers and online retailers due to higher level of promotional activities and expanded distribution, as well as marginal price increases implemented in the first quarter of fiscal year 2026. Net sales in Latin America remained relatively constant but were primarily impacted by favorable changes in foreign currency exchange rates. On a constant currency basis, sales in Latin America would have decreased by approximately 5% period over period. Latin America distributor markets increased due to expanded distribution period over period. Sales in Mexico experienced decreased sales volume due to lower demand as a result of weak economic conditions and temporary delays in the supply chain. Sales volumes in Brazil decreased primarily due to lower demand as customers adjust to increases in average selling price. • WD-40 Specialist sales increased $1.3 million, or 17%, primarily due to increased sales volumes in the U.S. driven by enhanced product placement and broader distribution at certain large retail customers. Net sales in the U.S. also increased due to continued increases in online retail sales in the fiscal year 2026. • Other maintenance and homecare and cleaning product sales combined remained relatively constant from period to period. • For the three months ended February 28, 2026, 72% of sales came from the U.S., and 28% of sales came from Canada and Latin America combined compared to the three months ended February 28, 2025 when 70% of sales came from the U.S., and 30% of sales came from Canada and Latin America. Americas Sales – Six Months Ended – February 28, 2026 Compared to February 28, 2025 Net sales in the Americas segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $6.7 million , or 6% , primarily due to increases in the U.S. and Latin America of $5.3 million and $1.5 million, respectively. U.S. sales increased primarily due to increased online and large retail sales as well as higher sales volume due to higher level of promotional activities as discussed above in the section for the three months ended February 28, 2026. Latin America sales increased primarily due to a $1.3 million increase in Mexico due to favorable period over period changes in foreign currency exchange rates, as well as slight increases due to expanded distribution and successful promotional activities. • WD-40 Specialist sales increased $2.5 million , or 16% , primarily due to increased online retail sales, new distribution and increased demand in the U.S as discussed above in the section for the three months ended February 28, 2026. • Other maintenance product sales increased $0.7 million, or 9%, primarily due to increases in sales volume in the U.S. period over period. • Homecare and cleaning product sales decreased $1.1 million, or 16%. Our HCCP products are considered harvest brands, which continue to provide positive returns but have become a smaller part of the business as we continue to emphasize focus on sales growth of maintenance products. We have continued to sell HCCP brand products but with a reduced level of marketing investment over time. 26 Table of Contents • For the six months ended February 28, 2026 and 2025, 72% of sales came from the U.S., and 28% of sales came from Canada and Latin America combined. 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, Six Months Ended February 28, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 52,359 $ 46,406 $ 5,953 13 % $ 97,308 $ 91,272 $ 6,036 7 % WD-40 Specialist 9,574 8,424 1,150 14 % 19,507 16,241 3,266 20 % Other maintenance products 2,936 3,254 (318) (10) % 6,729 6,448 281 4 % Total maintenance products 64,869 58,084 6,785 12 % 123,544 113,961 9,583 8 % HCCP (1) — 1,491 (1,491) (100) % — 3,097 (3,097) (100) % Total net sales $ 64,869 $ 59,575 $ 5,294 9 % $ 123,544 $ 117,058 $ 6,486 6 % % of consolidated net sales 40 % 41 % 39 % 39 % CC Net sales – non-GAAP (2) $ 57,503 $ 59,575 $ (2,072) (3) % $ 113,021 $ 117,058 $ (4,037) (3) % Currency impact on current period – non-GAAP (2) $ 7,366 $ 10,523 (1) During the fourth quarter of fiscal year 2025, we completed the sale of the homecare and cleaning product businesses in the EIMEA segment. (2) Current fiscal year constant currency net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales. 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 Decrease in average selling price (1) $ (0.2) $ (0.5) $ (0.7) Decrease in sales volume due to sale of HCCP (2) (1.6) (1.5) (3.1) Decrease in sales volume (1) (0.2) — (0.2) Currency impact on current period 3.2 7.3 10.5 Increase in net sales $ 1.2 $ 5.3 $ 6.5 (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. (2) The Company sold its homecare and cleaning product brands in the EIMEA segment during the fourth quarter of fiscal year 2025. These brands are included in fiscal year 2025 financial results but are not be included in fiscal year 2026 financial results. 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. 27 Table of Contents EIMEA Sales – Three Months Ended – February 28, 2026 Compared to February 28, 2025 Net sales increased in the EIMEA segment from period to period, primarily due to the following: • WD-40 Multi-Use Product sales increased $6.0 million, or 13%, due to favorable changes in foreign currency exchange rates. On a constant currency basis, sales would have remained relatively constant period over period. Our direct markets sales, particularly France and Iberia increased sales $2.1 million and $0.9 million, respectively, as successful promotional activities contributed to increased sales, specifically those sales in the hardware sector. These increases in sales were entirely offset by decreased volumes in our distributor markets, in particular Saudi Arabia and the UAE region due to timing of customer orders as a result of strategic distribution changes we have made in the first half of fiscal year 2026. For additional information regarding geopolitical events and their potential effect on our business in the Middle East, refer to “Significant Developments” above. • WD-40 Specialist sales increased $1.2 million, or 14%, almost entirely due to favorable changes in foreign currency exchange rates. On a constant currency basis, sales would have remained relatively constant period over period. Net sales increased most significantly in France and Iberia as both regions sales benefited from strong marketing activities and new product launches within the quarter. These increased sales were offset by decreased sales in our DACH region due to timing of customer orders. • Other maintenance product sales remained relatively constant from period to period. EIMEA Sales – Six Months Ended – February 28, 2026 Compared to February 28, 2025 Net sales increased in the EIMEA segment from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $6.0 million or 7%. Net sales were positively impacted by favorable changes in foreign currency exchange rates. On a constant currency basis, sales would have decreased by approximately 3% period over period. Sales decreased most significantly in our distributor markets including Saudi Arabia and regions within the UAE due to the strategic distribution changes as discussed above in the section for the three months ended February 28, 2026. These decreases were partially offset by higher sales in our direct markets particularly in France and Iberia due to the reasons discussed above in the section for the three months ended February 28, 2026. • WD-40 Specialist product sales increased $3.3 million, or 20%. Net sales were positively impacted by favorable changes in foreign currency exchange rates. On a constant currency basis, sales would have increased by approximately 10% period over period. Net sales increased most significantly in France and Iberia direct markets which increased $1.7 million and $0.7 million, respectively. Sales growth in France and Iberia benefited from strong sales volume growth due to increased promotional activities as well as recent product launches. • Other maintenance product sales remained relatively constant from period to period. 28 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, Six Months Ended February 28, Change from Prior Year Change from Prior Year 2026 2025 Dollars Percent 2026 2025 Dollars Percent WD-40 Multi-Use Product $ 18,966 $ 16,228 $ 2,738 17 % $ 37,230 $ 37,008 $ 222 1 % WD-40 Specialist 3,749 $ 2,418 $ 1,331 55 % 6,937 5,540 1,397 25 % Other maintenance products 181 $ 217 $ (36) (17) % 373 537 (164) (31) % Total maintenance products 22,896 $ 18,863 $ 4,033 21 % 44,540 43,085 1,455 3 % HCCP 2,092 2,137 (45) (2) % 4,323 4,491 (168) (4) % Total net sales $ 24,988 $ 21,000 $ 3,988 19 % $ 48,863 $ 47,576 $ 1,287 3 % % of consolidated net sales 16 % 14 % 15 % 16 % CC Net sales – non-GAAP (1) $ 24,287 $ 21,000 $ 3,287 16 % $ 48,399 $ 47,576 $ 823 2 % Currency impact on current period – non-GAAP $ 701 $ 464 (1) Current fiscal year constant currency net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales. 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 in average selling price (1) $ 1.3 $ 1.1 $ 2.4 (Decrease) increase in sales volume (1) (3.8) 2.2 (1.6) Currency impact on current period (0.2) 0.7 0.5 (Decrease) increase in net sales $ (2.7) $ 4.0 $ 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, 2026 Compared to February 28, 2025 Net sales in the Asia-Pacific segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $2.7 million, or 17%, primarily due to increases in Asia distributor markets and China of $1.3 million and $1.1 million, respectively. Sales in Asia distributor markets increased due to successful promotional programs, particularly in Malaysia and the Philippines. Sales in China increased due to increased sales volume from successful promotional programs and marketing activities as well as increased distribution, specifically through our online retailers and industrial channels. • WD-40 Specialist sales increased $1.3 million, or 55%, primarily due to increased sales in China of $0.7 million as well as increased sales in Australia and Asia distributor markets which each increased $0.3 million. Sales in China increased due to increased sales volume from successful promotional programs and marketing activities as well as increased distribution, specifically through our online retailers and industrial channels. • Other maintenance and homecare and cleaning product sales remained relatively constant from period to period. 29 Table of Contents Asia-Pacific Sales – Six Months Ended – February 28, 2026 Compared to February 28, 2025 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 from period to period. Net sales in China and Australia increased $1.8 million and $0.4 million, respectively, which were mostly offset by a decrease in Asia distributor markets of $2.0 million. Net sales increased in China due to higher sales volume as a result of successful promotional programs and marketing activities, as well as increased distribution. 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 2025 and reduced the volume of orders at the beginning of the fiscal year 2026 to adjust to more normal levels of inventory. • WD-40 Specialist sales increased $1.4 million, or 25%, primarily due to an $0.8 million increase in China, as well as increases of $0.4 million and $0.3 million in our Asia distributor markets and Australia, respectively. Sales in China increased due to increased sales volume from successful promotional programs and marketing activities as well as increased distribution. • Other maintenance and homecare and cleaning product sales remained relatively constant from period to period. 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 for each of the three months ended February 28, 2026 and 2025, respectively, $8.9 million for each of the six months ended February 28, 2026 and 2025, respectively. The following table summarizes gross margin and gross profit (in thousands, except percentages): Three Months Ended February 28, Six Months Ended February 28, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Gross profit $ 89,941 $ 79,716 $ 10,225 $ 176,773 $ 163,803 $ 12,970 Gross margin 55.6 % 54.6 % 100 bps (1) 55.9 % 54.7 % 120 bps (1) (1) Basis points (“bps”) change in gross margin. 30 Table of Contents Gross Margin – Three Months Ended – February 28, 2026 Compared to February 28, 2025 Gross margin increased 100 bps primarily due to the following impacts: Favorable (unfavorable) Explanations 80 bps Lower costs of specialty chemicals used in the formulation of our products 70 bps Increases in average selling prices (40 bps) Other miscellaneous input costs During the prior fiscal year, certain assets of our homecare and cleaning product businesses in the Americas segment were reclassified to held for sale and they continue to be classified as held for sale as of February 28, 2026. Gross margin excluding these products would have been 56.0% and 55.1% for the three months ended February 28, 2026 and 2025, respectively. Gross Margin – Six Months Ended – February 28, 2026 Compared to February 28, 2025 Gross margin increased 120 bps primarily due to the following impacts: Favorable (unfavorable) Explanations 90 bps Lower costs of specialty chemicals used in the formulation of our products 70 bps Increases in average selling prices. (40 bps) Higher filling fees paid to our third-party contract manufacturers, primarily in the EIMEA segment. Gross margin excluding products from held for sale businesses would have been 56.4% and 55.2% for the six months ended February 28, 2026 and 2025, respectively. Selling, General and Administrative (“SG&A”) Expenses Three Months Ended February 28, Six Months Ended February 28, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year (in thousands) Dollars Percent Dollars Percent SG&A expenses $ 54,782 $ 48,988 $ 5,794 12 % $ 110,118 $ 99,513 $ 10,605 11 % % of net sales 33.9 % 33.5 % 34.8 % 33.2 % SG&A Expenses – Three Months Ended – February 28, 2026 Compared to February 28, 2025 The increase in SG&A expenses was primarily due to increases in employee-related costs of $2.3 million due to higher headcount, annual compensation increases, accrued incentive compensation, and higher stock-based compensation expense. 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. Software licenses and fees increased expenses $0.4 million primarily due to increased users and costs related to cloud computing solutions across all regions. Unfavorable changes in foreign currency exchange rates increased SG&A expenses by $2.5 million. On a constant currency basis, SG&A expenses would have increased by 7% period to period. SG&A Expenses – Six Months Ended – February 28, 2026 Compared to February 28, 2025 The increase in SG&A expenses was primarily due to increases in employee-related costs of $5.1 million due to higher headcount, annual compensation increases, accrued incentive compensation, and higher stock-based compensation expense. These higher employee-related costs are to support various sales growth initiatives identified within our strategic framework and the enhancement of our information systems. SG&A also increased by $1.2 million due to higher travel and meeting expense across all three segments primarily in support of growth related initiatives. Software licenses and fees increased expenses $0.7 million primarily due to increased users and costs related to cloud computing solutions across all regions. Unfavorable changes in foreign currency exchange rates increased SG&A expenses by $3.6 million. On a constant currency basis, SG&A expenses would have increased by 7% period to period. 31 Table of Contents 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 for both the three months ended February 28, 2026 and 2025, respectively, and $4.0 million and $3.9 million for the six months ended February 28, 2026 and 2025, respectively. 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, Six Months Ended February 28, Change from Prior Year Change from Prior Year (in thousands) 2026 2025 Dollars Percent 2026 2025 Dollars Percent A&P expenses $ 8,823 $ 7,404 $ 1,419 19 % $ 17,012 $ 15,797 $ 1,215 8 % % of net sales 5.5 % 5.1 % 5.4 % 5.3 % A&P Expenses – Three M onths Ended – February 28, 2026 Compared to February 28, 2025 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. Unfavorable changes in foreign currency exchange rates increased A&P expenses by $0.5 million. On a constant currency basis, A&P expenses would have increased by 12% 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 $8.7 million and $7.7 million for the three months ended February 28, 2026 and 2025, respectively. Therefore, our total expenditures on A&P activities were $17.5 million and $15.1 million for the three months ended February 28, 2026 and 2025, respectively. A&P Expenses – Six Months Ended – February 28, 2026 Compared to February 28, 2025 The increase in A&P expenses was primarily due to a higher level of promotional programs and marketing support, particularly in the EIMEA segment. Unfavorable changes in foreign currency exchange rates increased A&P expenses by $0.7 million. On a constant currency basis, A&P expenses would have increased by 3% period to period. Total promotional costs recorded as a reduction to sales were $17.7 million and $16.5 million for the six months ended February 28, 2026 and 2025, respectively. Therefore, our total expenditures on A&P activities were $34.7 million and $32.3 million for the six months ended February 28, 2026 and 2025, respectively. Income from Operations by Segment The following table summarizes income from operations by segment (in thousands, except percentages): Three Months Ended February 28, Six Months Ended February 28, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent Americas $ 15,043 $ 13,210 $ 1,833 14 % $ 30,082 $ 25,862 $ 4,220 16 % EIMEA 15,653 15,273 380 2 % 28,127 28,954 (827) (3) % Asia-Pacific 8,690 7,349 1,341 18 % 16,662 17,529 (867) (5) % Unallocated corporate (1) (13,098) (12,552) (546) (4) % (25,325) (23,943) (1,382) (6) % Total $ 26,288 $ 23,280 $ 3,008 13 % $ 49,546 $ 48,402 $ 1,144 2 % 32 Table of Contents (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 condensed consolidated statements of operations. Americas Americas Operating Income – Three Months Ended – February 28, 2026 Compared to February 28, 2025 Income from operations for the Americas segment increased to $15.0 million, up $1.8 million, or 14.0%, primarily due to a $6.3 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 50.1% to 53.1%, primarily due to the favorable impact of increases in average selling prices, as well as decreases in the costs of petroleum-based specialty chemicals. Operating expenses increased $3.5 million primarily due to employee-related costs as a result of increased headcount, higher accrued incentive compensation and annual compensation increases, as well as a higher level of advertising and promotion expense. Operating income as a percentage of net sales increased from 20.2% to 20.9% period over period. Americas Operating Income – Six Months Ended – February 28, 2026 Compared to February 28, 2025 Income from operations for the Americas segment increased to $30.1 million, up $4.2 million, or 16%, primarily due to an increase in sales of $8.7 million and a higher gross margin, which was partially offset by higher operating expenses. Gross margin for the Americas segment increased from 50.3% to 53.2%, primarily due to the favorable impact of increases in average selling prices and lower level of discounts that we gave to our customers, as well as decreases in the costs of petroleum-based specialty chemicals. Operating expenses increased $4.4 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 professional service costs and travel and meeting expenses. Operating income as a percentage of net sales increased from 19.2% to 20.9% period over period. EIMEA EIMEA Operating Income – Three Months Ended – February 28, 2026 Compared to February 28, 2025 Income from operations for the EIMEA segment increased to $15.7 million, up $0.4 million, or 2%, primarily due to an increase in sales of $5.3 million partially offset by higher operating expenses. Operating expenses increased $2.1 million primarily due to higher employee-related costs as a result of increased headcount and annual compensation increases, as well as a higher level of A&P expenses and freight. Gross margin for the EIMEA segment decreased from 58.1% to 57.2% primarily due to higher filling and warehousing fees paid to our third party manufacturer partially offset by decreases in the costs of petroleum-based specialty chemicals. Operating income as a percentage of net sales decreased from 25.6% to 24.1% period over period. EIMEA Operating Income – Six Months Ended – February 28, 2026 Compared to February 28, 2025 Income from operations for the EIMEA segment decreased to $28.1 million, down $0.8 million, or 3%, primarily due to higher operating expenses, partially offset by a $6.5 million increase in sales. Gross margin for the EIMEA segment remained constant at 58.0% for the six months ended February 28, 2026 and 2025. Operating expenses increased $4.6 million primarily due to higher employee-related costs as a result of increased headcount and annual compensation increases, as well as a higher level of A&P expenses and freight. Operating income as a percentage of net sales decreased from 24.7% to 22.8% period over period. Asia-Pacific Asia-Pacific Operating Income – Three Months Ended – February 28, 2026 Compared to February 28, 2025 Income from operations for the Asia-Pacific segment increased to $8.7 million, up $1.3 million, or 18%, primarily due to a $4.0 million increase in sales and a slightly higher gross margin, partially offset by higher operating expenses. Gross margin for the Asia-Pacific segment increased from 58.4% to 58.7%, primarily due to favorable changes in sales mix and market mix from period to period. Operating expenses increased $1.1 million primarily due to higher employee-related cost. Operating income as a percentage of net sales decreased slightly from 35.0% to 34.8%. 33 Table of Contents Asia-Pacific Operating Income – Six Months Ended – February 28, 2026 Compared to February 28, 2025 Income from operations for the Asia-Pacific segment decreased to $16.7 million, down $0.9 million, or 5%, due to higher operating expenses and slightly lower gross margin, partially offset by an increase in sales. Gross margin for the Asia-Pacific segment decreased from 59.0% to 58.8%, primarily due to favorable changes in sales mix and market mix from period to period. Operating expenses increased $1.5 million primarily due to higher employee-related costs as a result of increased headcount and annual compensation increases, as well as a higher level of travel and meeting expenses. Operating income as a percentage of net sales decreased from 36.8% to 34.1% period over period. Unallocated Corporate Unallocated Corporate Expenses – Three Months Ended – February 28, 2026 Compared to February 28, 2025 Unallocated corporate expenses increased to $13.1 million, up $0.5 million, or 4%, primarily due to higher employee-related costs as a result of increased headcount and annual compensation increases. Unallocated Corporate Expenses – Six Months Ended – February 28, 2026 Compared to February 28, 2025 Unallocated corporate expenses increased to $25.3 million, up $1.4 million, or 6%, primarily due to higher employee-related costs as a result of increased headcount and annual compensation increases, as well as higher stocked-based compensation expense. Non-Operating Items The following table summarizes non-operating income and expenses for our consolidated operations (in thousands): Three Months Ended February 28, Six Months Ended February 28, 2026 2025 Change 2026 2025 Change Interest income $ 154 $ 106 $ 48 $ 333 $ 254 $ 79 Interest expense $ 666 $ 1,021 $ (355) $ 1,314 $ 1,894 $ (580) Other income (expense), net $ 78 $ 74 $ 4 $ (119) $ (67) $ (52) Provision (benefit) for income taxes $ 5,536 $ (7,412) $ 12,948 $ 10,677 $ (2,081) $ 12,758 Provision (benefit) for Income Taxes The provision (benefit) for income taxes was 21.4% and (33.0)% of income before income taxes for the three months ended February 28, 2026 and 2025, respectively, and 22.0% and (4.5)% of income before income taxes for the six months ended February 28, 2026 and 2025, 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 decreased $9.5 million, or 32% to $20.3 million, or $1.50 per common share on a fully diluted basis, for the three months ended February 28, 2026 compared to $29.9 million, or $2.19 per common share on a fully diluted basis, for the three months ended February 28, 2025. On a constant currency basis and excluding the prior period one-time tax benefit of $11.9 million as discussed in Note 13 to the condensed consolidated financial statements, net income would have increased $0.8 million, or 5%, from period to period. Net income decreased $11.0 million , or 23% to $37.8 million, or $2.78 per common share on a fully diluted basis, for the six months ended February 28, 2026 compared to $48.8 million, or $3.58 per common share on a fully diluted basis, for the corresponding period of the prior fiscal year. On a constant currency basis and excluding the prior period one-time tax benefit of $11.9 million as discussed in Note 13 to the condensed consolidated financial statements, net income would have decreased $1.2 million, or 3%, from period to period. 34 Table of Contents 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 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. We target our gross margin to be between 50% and 55% of net sales, our cost of doing business to be between 30% to 35% of net sales, and our Adjusted EBITDA to be between 20% and 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 targeted ranges 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 targets may be challenged as we continue to divest certain of our homecare and cleaning product businesses, 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 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, Six Months Ended February 28, 2026 2025 2026 2025 Gross margin – GAAP 56 % 55 % 56 % 55 % Cost of doing business as a percentage of net sales – non-GAAP 38 % 38 % 39 % 38 % Adjusted EBITDA as a percentage of net sales – non-GAAP (1) 18 % 18 % 17 % 18 % (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 statements 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: 35 Table of Contents Cost of Doing Business (in thousands, except percentages) Three Months Ended February 28, Six Months Ended February 28, 2026 2025 2026 2025 Total operating expenses – GAAP $ 63,653 $ 56,436 $ 127,227 $ 115,401 Amortization (1) (in operating departments) (547) (462) (1,009) (926) Depreciation (in operating departments) (989) (858) (1,951) (1,815) Cost of doing business $ 62,117 $ 55,116 $ 124,267 $ 112,660 Net sales $ 161,671 $ 146,104 $ 316,094 $ 299,599 Cost of doing business as a percentage of net sales – non-GAAP 38 % 38 % 39 % 38 % (1) Includes amortization of definite-lived intangible assets and cloud computing amortization. Adjusted EBITDA (in thousands, except percentages) Three Months Ended February 28, Six Months Ended February 28, 2026 2025 2026 2025 Net income – GAAP $ 20,318 $ 29,851 $ 37,769 $ 48,776 Provision (benefit) for income taxes 5,536 (7,412) 10,677 (2,081) Interest income (154) (106) (333) (254) Interest expense 666 1,021 1,314 1,894 Amortization (1)(2) 643 462 1,201 926 Depreciation (2) 2,228 1,943 4,186 3,971 Adjusted EBITDA $ 29,237 $ 25,759 $ 54,814 $ 53,232 Net sales $ 161,671 $ 146,104 $ 316,094 $ 299,599 Adjusted EBITDA as a percentage of net sales – non-GAAP 18 % 18 % 17 % 18 % (1) Includes amortization of definite-lived intangible assets and cloud computing amortization. (2) Includes amortization and depreciation presented in both cost of products sold and operating departments. 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, Six Months Ended February 28, 2026 2025 2026 2025 Diluted EPS - GAAP $ 1.50 $ 2.19 $ 2.78 $ 3.58 Release of Uncertain Tax Position - Tax Cut and Jobs Act (1) — (0.87) — (0.87) Adjusted diluted EPS - Non-GAAP $ 1.50 $ 1.32 $ 2.78 $ 2.71 (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 36 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, incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” 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 borrowings for a period of at least twelve months are classified as long-term. As of February 28, 2026, $21.2 million of this facility was classified as long-term and was entirely denominated in Euros. $14.4 million was classified as short-term and was entirely denominated in U.S. Dollars. In the United States, we held $65.6 million in fixed rate long-term borrowings as of February 28, 2026, 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 2026. 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 incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” for additional information on these agreements for additional information on these financial covenants. At February 28, 2026, 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, 2026, we had a total of $50.3 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 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 $13.8 million remains available for the repurchase of shares of common stock as of February 28, 2026. Cash Flows The following table summarizes our cash flows by category for the periods presented (in thousands): Six Months Ended February 28, 2026 2025 Change Net cash provided by operating activities $ 24,281 $ 22,908 $ 1,373 Net cash used in investing activities (2,342) (1,800) (542) Net cash used in financing activities (30,654) (12,633) (18,021) Effect of exchange rate changes on cash and cash equivalents 933 (2,179) 3,112 Net (decrease) increase in cash and cash equivalents $ (7,782) $ 6,296 $ (14,078) Operating Activities Net cash provided by operating activities increased $1.4 million to $24.3 million for the six months ended February 28, 2026. 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, 2026 was net income of $37.8 million, which 37 decreased approximately $11.0 million from period to period primarily due to the release of the uncertain tax position in the second quarter of the prior fiscal year as discussed in Note 13 to the condensed consolidated financial statements. Excluding this one-time benefit, net income would have increased $0.9 million. Changes in our working capital remained relatively constant from period to period. Changes in working capital balances depend heavily on the impact of timing of payments made to vendors and tax authorities as well as collections from customers. Investing Activities Net cash used in investing activities increased $0.5 million to $2.3 million for the six months ended February 28, 2026, primarily due to a higher level of manufacturing-related capital expenditures within the U.S. and the U.K. from period to period. Financing Activities Net cash used in financing activities increased $18.0 million to $30.7 million for the six months ended February 28, 2026 primarily due to increases of treasury stock repurchases of $9.1 million and a decrease in net proceeds from our revolving credit facility of $7.7 million. During the first six months of the fiscal year, net proceeds from our revolving credit facility were $14.4 million compared to $22.1 million in the corresponding period of the prior fiscal year. Increases in dividends paid to our stockholders of $1.8 million also increased net cash used in financing activities for the first half of fiscal year 2026. 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 an increase in cash of $0.9 million for the six months ended February 28, 2026 as compared to a decrease in cash of $2.2 million for the six months ended February 28, 2025. 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 against the U.S. Dollar. Purchase Commitments See Note 12. Commitments and Contingencies, incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” for additional information on purchase commitments. 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 16, 2026, the Company’s Board declared a cash dividend of $1.02 per share payable on April 30, 2026 to stockholders of record at the close of business on April 17, 2026. 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. 38 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, 2025, which was filed with the SEC on October 27, 2025. 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, 2025, which was filed with the SEC on October 27, 2025.