What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-07-09 compared with 2026-04-09 · 240 added, 208 removed, 354 unchanged (56% of the section changed)

44 unchanged sentences

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.

At the beginning of the prior fiscal year, certain assets of our homecare and cleaning product businesses in the Americas segment were classified as held for sale.

During the third quarter of fiscal year 2026, the Company reassessed its classification and recorded an amount to reclassify as held for use as discussed in Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 3 — Assets Held for Sale included in this report.

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.

The following summarizes the financial and operational highlights for our business during the six months ended February 28, 2026:

Accordingly, these brands are included in fiscal year 2025 financial results but are not included in fiscal year 2026 financial results.

The following summarizes the financial and operational highlights for our business during the nine months ended May 31, 2026:

• Consolidated net sales increased $54.7 million or 12%, to $511.2 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.

Changes in foreign currency exchange rates from period to period had a favorable impact of $19.9 million on consolidated net sales for the nine months of fiscal year 2026.

On a constant currency basis, net sales would have increased by $34.8 million, or 8%, 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.

This favorable impact from changes in foreign currency exchange rates mainly came from our EIMEA segment, which accounted for 37% of our consolidated sales for the nine months ended May 31, 2026.

Increases in sales volume favorably impacted net sales by approximately $30.3 million from period to period, which includes an unfavorable impact of approximately $4.2 million related to reduced sales volume driven by the sale of our HCCP business in EIMEA during fiscal year 2025.

Sales volume would have increased $34.5 million for the nine months of fiscal year 2026 on a comparable basis to prior year.

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 56.2% from 55.2% 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.

• Consolidated net income decreased $1.8 million, or 3%, compared to the corresponding period of the prior fiscal year, due to a favorable income tax adjustment of $11.9 million recognized in the second quarter of the prior fiscal year upon the release of an uncertain tax position.

Refer to Performance Measures and Non-GAAP Reconciliations below for non-GAAP financial measures, including adjusted net income, and their reconciliations to the most directly comparable GAAP measures.

Adjusted net income increased $11.5 million, or 20% from period to period.

• Diluted earnings per common share (“EPS”) was $5.02 for the nine months of fiscal year 2026 versus $5.13 in the prior fiscal year period.

The decrease was due to the release of the uncertain tax position in the prior period.

Refer to Performance Measures and Non-GAAP Reconciliations below for non-GAAP financial measures, including adjusted EPS, and their reconciliations to the most directly comparable GAAP measures.

Adjusted EPS increased 20% from period to period.

• During the nine months ended May 31, 2026, we returned approximately $62.9 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

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.

The average price of oil increased significantly in the third quarter of fiscal year 2026 due to the geopolitical conflicts in

the Middle East.

These unfavorable impacts to our cost of goods sold are expected to be most significant during the fourth quarter of fiscal year 2026 due to the timing of inventory turnover.

Management has implemented mitigation strategies, including price increases in certain markets, to reduce the negative impacts these recent geopolitical impacts will have on gross margin.

Our net sales to these regions were approximately 5% of consolidated net sales for fiscal year 2025 and approximately 4% of consolidated net sales for the nine months 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.

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Results of Operations

Three and Six Months Ended February 28, 2026 Compared to Three and Six Months Ended February 28, 2025

Three and Nine Months Ended May 31, 2026 Compared to Three and Nine Months Ended May 31, 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,

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

2026 2025 Change from

17 unchanged sentences

(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.

Approximately $1.1 million and $4.2 million of the decrease in net sales of HCCP for the three and nine months ended May 31, 2026, respectively, was driven by the sale of our HCCP business in EIMEA during fiscal year 2025.

(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.

Excluding this one-time benefit, on a non-GAAP basis, prior year net income was $57.8 million for the nine months ended May 31, 2025.

Therefore, on a non-GAAP basis, net income would have increased 17% compared to prior year.

(3) Excluding the one-time tax benefit discussed above, on a non-GAAP basis, prior year adjusted diluted EPS was $4.26 for the nine months ended May 31, 2025.

Therefore, on a non-GAAP basis, EPS would have increased 18% compared to prior year.

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,

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

2026 2025 Change from

6 unchanged sentences

(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.

The divestiture resulted in approximately $1.1 million and $4.2 million reduction in net sales for the three and nine months ended May 31, 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,

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

2026 2025 Change from

11 unchanged sentences

Currency impact on current period – non-GAAP (1)

$ 1,677 $ 3,335

(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.

1 unchanged sentence

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)

Currency impact on current period 0.4 1.3 1.7

1.4 2.8 21.1 25.3

Currency impact on current period – non-GAAP 0.4 1.3 1.6 3.3

Increase in net sales $ 2.4 $ 6.3 $ 23.1 $ 31.8

(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

Americas Sales – Three Months Ended – May 31, 2026 Compared to May 31, 2025

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

• WD-40 Multi-Use Product sales increased $20.7 million, or 34%, due to the increase in the U.S.

of $5.0 million.

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.

and Latin America of $17.2 million and $2.6 million, respectively.

sales increased primarily due to a significant promotional program which included the sale of limited-edition cans involving Disney Entertainment, The Home Depot, and WD-40 brand.

Sales in Latin America increased primarily due to increases in Brazil and Mexico of $1.8 million and $1.0 million, respectively.

The increased sales in Brazil is primarily due to increased sales volume as a result of timing of customer orders.

Mexico sales benefited from favorable period to period changes in foreign currency exchange rates as well as strong promotional activity across multiple channels.

• WD-40 Specialist sales increased $2.1 million, or 22%, 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

primarily from our large retailers and online retailers.

WD-40 Specialist sales in the U.S.

were driven by enhanced product placement at certain large retail customers, as well as increases in online retail sales.

• Other maintenance product sales increased $0.6 million, or 13% due to increases in sales volume in the U.S.

and Latin America period over period.

• For the three months ended May 31, 2026, 75% of sales came from the U.S., and 25% of sales came from Canada and Latin America combined compared to the three months ended May 31, 2025 when 73% of sales came from the U.S., and 27% of sales came from Canada and Latin America.

Americas Sales – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

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

1 unchanged sentence

and Latin America of $22.5 million and $4.1 million, respectively.

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.

sales increased primarily due to the sale of limited-edition promotional cans as discussed above in the section for the three months ended May 31, 2026, as well as strength in our online retailers and mass retailers and expanded distribution.

Latin America sales increased primarily due to favorable period to period changes in foreign currency exchange rates as well as slight increases due to expanded distribution and successful promotional activities, most significantly in Mexico and Brazil.

• WD-40 Specialist sales increased $4.6 million , or 18% , primarily due to increased online retail sales and large retailers due to increased demand in the U.S as discussed above in the section for the three months ended May 31, 2026.

WD-40 Specialist sales also increased due to new distribution in fiscal year 2026.

• Other maintenance product sales increased $1.3 million, or 11%, primarily due to increases in sales volume in the U.S.

period over period.

and Latin America period over period.

• Homecare and cleaning product sales decreased $1.4 million, or 14%.

1 unchanged sentence

We have continued to sell HCCP brand products but with a reduced level of marketing investment over time.

• 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.

• For the nine months ended May 31, 2026, 73% of sales came from the U.S., and 27% of sales came from Canada and Latin America combined compared to the nine months ended May 31, 2025 when 72% of sales came from the U.S., and 28% 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, Six Months Ended February 28,

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

2026 2025 Change from

16 unchanged sentences

Change from Prior Year

First Quarter Second Quarter Year to Date

First Quarter Second Quarter Third Quarter Year to Date

Decrease in average selling price (1)

2 unchanged sentences

(1.6) (1.5) (1.1) (4.2)

Decrease in sales volume (1)

Increase (decrease) increase in sales volume (1)

(0.2) — 7.2 7.0

Currency impact on current period 3.2 7.3 10.5

Currency impact on current period – non-GAAP 3.2 7.3 4.4 14.9

Increase in net sales $ 1.2 $ 5.3 $ 9.9 $ 16.4

1 unchanged sentence

(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.

These brands are included in fiscal year 2025 financial results but are not 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.

EIMEA Sales – Three Months Ended – February 28, 2026 Compared to February 28, 2025

EIMEA Sales – Three Months Ended – May 31, 2026 Compared to May 31, 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

• WD-40 Multi-Use Product sales increased $7.2 million, or 17%, primarily due to increases in sales volumes for both direct and distributor markets as well as favorable changes in foreign currency exchange rates.

On a constant currency basis, sales for WD-40 Multi-Use-Product would have increased 9% period over period.

Our distributor markets, particularly in India and the Middle East regions, increased primarily due to a higher level of customer orders during the third quarter of fiscal year 2026 in anticipation of price increases.

Our direct markets sales in Iberia and DACH regions increased $1.5 million and $1.1 million, respectively, due to increased promotional activities and successful merchandising efforts.

• WD-40 Specialist sales increased $3.0 million, or 31%, due to increased sales in most of our direct and distributor markets as well as favorable changes in foreign currency exchange rates.

On a constant currency basis, sales would have increased 22% 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.

• Other maintenance product sales increased $0.8 million, or 26%, due to increases in sales volumes from strong promotional activities of our 3-IN-ONE maintenance product in some of our larger direct markets.

On a constant currency basis, sales would have increased 18% period over period.

EIMEA Sales – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

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

1 unchanged sentence

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.

On a constant currency basis, sales would have increased by approximately 1% period over period.

Sales increased most significantly in our direct markets most notably in Iberia and DACH region, primarily due to successful promotional activities and merchandising efforts as discussed above in the section for the three months ended May 31, 2026.

These increases were partially offset by decreases in our distributor markets such as Saudi Arabia and regions within the UAE due to timing of customer orders and strategic sourcing changes in the region.

• WD-40 Specialist product sales increased $6.2 million, or 24%.

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Net sales increased most significantly in France and Iberia direct markets which increased $2.6 million and $1.1 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.

Sales growth in France and Iberia benefited from strong sales volume growth due to increased promotional activities as well as new product launches.

• Other maintenance product sales increased $1.1 million, or 11%, due to increases in sales volumes from strong promotional activities of our 3-IN-ONE maintenance product in some of our direct markets.

On a constant currency basis, sales would have increased by approximately 3% period over period.

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,

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

2026 2025 Change from

Prior Year 2026 2025 Change from

10 unchanged sentences

Currency impact on current period – non-GAAP (1)

$ 1,237 $ 1,701

1 unchanged sentence

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)

$ 1.3 $ 1.1 $ 0.2 $ 2.6

(Decrease) increase in sales volume (1)

Increase (decrease) in sales volume (1)

(3.8) 2.2 3.8 2.2

Currency impact on current period (0.2) 0.7 0.5

(Decrease) increase in net sales $ (2.7) $ 4.0 $ 1.3

Currency impact on current period – non-GAAP (0.2) 0.7 1.2 1.7

Increase (decrease) in net sales $ (2.7) $ 4.0 $ 5.2 $ 6.5

Asia-Pacific Sales – Three Months Ended – February 28, 2026 Compared to February 28, 2025

Asia-Pacific Sales – Three Months Ended – May 31, 2026 Compared to May 31, 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.

• WD-40 Multi-Use Product sales increased $3.9 million, or 24%, primarily due to increases in China and Asia distributor markets of $2.2 million and $1.5 million, respectively.

Sales in China increased due to increased sales volume from successful promotional programs and marketing activities, including the use of online influencers, as well as increased distribution through our online retailers and industrial channels.

Sales in China also increased due to a higher level of customer orders in the third quarter of fiscal year 2026 in anticipation of price increases.

Sales in Asia distributor markets increased due to successful promotional programs, particularly in Philippines, Indonesia and Malaysia.

• WD-40 Specialist sales increased $1.0 million, or 32%, primarily due to increased sales in China of $0.7 million.

Sales in China increased due to increased sales volume from successful promotional programs and marketing activities, including seasonal promotions and samplings, as well as increased distribution through our online retailers and industrial channels.

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

Asia-Pacific Sales – Six Months Ended – February 28, 2026 Compared to February 28, 2025

Asia-Pacific Sales – Nine Months Ended – May 31, 2026 Compared to May 31, 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.

• WD-40 Multi-Use Product sales increased $4.2 million, or 8% primarily due to increased sales in China of $4.1 million.

Sales in China increased due to increased sales volume from successful promotional programs and marketing activities, primarily through our online retailers and industrial channels, as discussed above in the section for the three months ended May 31, 2026.

• WD-40 Specialist sales increased $2.4 million, or 28%, primarily due to a $1.5 million increase in China, as well as a $0.5 million increase in Australia.

Sales in China increased due to increased sales volume from successful promotional programs and marketing activities as well as increased distribution as discussed above in the section for the three months ended May 31, 2026.

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

4 unchanged sentences

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.

• In the EIMEA segment, the cost of our products sold are generated in the Euro, U.S.

Dollar and Pound Sterling.

The strengthening or weakening of the Pound Sterling and Euro against U.S.

1 unchanged sentence

• 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.

These costs totaled $5.8 million and $4.6 million for each of the three months ended May 31, 2026 and 2025, respectively, and $14.7 million and $13.5 million for each of the nine months ended May 31, 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,

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

2026 2025 Change from

4 unchanged sentences

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

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)

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

Increases in average selling prices

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 – Three Months Ended – May 31, 2026 Compared to May 31, 2025

Gross margin increased 40 bps primarily due to the following impacts:

Favorable (unfavorable)

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

Increases in average selling prices.

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.

Favorable (unfavorable) Explanations

80 bps Lower costs of aerosol cans and fill fees

60 bps Favorable sales mix and other miscellaneous mix impacts

(60 bps) Other miscellaneous input costs

Gross Margin – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

Gross margin increased 100 bps primarily due to the following favorable impacts:

Favorable Explanations

80 bps Lower costs of specialty chemicals used in the formulation of our products and lower costs of aerosol cans

50 bps Increases in average selling prices

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

Three Months Ended February 28, Six Months Ended February 28,

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

2026 2025 Change from

3 unchanged sentences

% of net sales 29.1 % 32.8 % 32.6 % 33.1 %

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.

SG&A Expenses – Three Months Ended – May 31, 2026 Compared to May 31, 2025

The increase in SG&A expenses was primarily due to unfavorable changes in foreign currency exchange rates which increased SG&A expenses by $1.9 million.

On a constant currency basis, SG&A expenses would have increased by 6% 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.

In addition, SG&A expenses increased due to increases in employee-related costs of $1.1 million from higher headcount, annual compensation increases, and other employee related costs.

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

Freight expense increased $0.9 million primarily in the Americas and EIMEA segments, due to the combined impacts of higher sales and increased costs.

Software licenses and fees increased $0.8 million primarily due to increased users and costs related to cloud computing solutions across all regions.

SG&A Expenses – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

The increase in SG&A expenses was primarily due to increases in employee-related costs of $6.1 million due to higher headcount, annual compensation increases, and other employee related cost.

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 $5.5 million.

On a constant currency basis, SG&A expenses would have increased by 7% period to period.

SG&A also increased by $1.6 million due to higher travel and meeting expense across all three segments primarily in support of growth related initiatives.

Software licenses and fees increased $1.5 million primarily due to increased users and costs related to cloud computing solutions across all regions.

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.

Research and development costs were $1.9 million and $2.5 million for the three months ended May 31, 2026 and 2025, respectively, and $6.0 million and $6.3 million for the nine months ended May 31, 2026 and 2025, respectively.

Our research and development team engages in consumer research, environmental and sustainability initiatives, product development, product improvements and testing activities.

2 unchanged sentences

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

Three Months Ended February 28, Six Months Ended February 28,

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

Prior Year Change from

2 unchanged sentences

% of net sales 6.1 % 5.8 % 5.7 % 5.5 %

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.

A&P Expenses – Three M onths Ended – May 31, 2026 Compared to May 31, 2025

The increase in A&P expenses was primarily due to a higher level of advertising and promotional programs in the U.S.

as a result of royalty expenses associated with a licensing agreement for the sale of limited-edition promotional cans sold to one of our large customers.

Changes in foreign currency exchange rates did not have a significant impact on A&P expenses 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 $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.

Total promotional costs recorded as a reduction to sales were $12.2 million and $8.6 million for the three months ended May 31, 2026 and 2025, respectively.

Therefore, our total expenditures on A&P activities were $24.1 million and $17.7 million for the three months ended May 31, 2026 and 2025, respectively.

A&P Expenses – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

The increase in A&P expenses was primarily due to a higher level of promotional programs in the U.S.

as discussed above in the section for the three months ended May 31, 2026, and a higher level of promotional programs and marketing support in the EIMEA segment.

Unfavorable changes in foreign currency exchange rates increased A&P expenses by $1.1 million, particularly in the EIMEA segment.

On a constant currency basis, A&P expenses would have increased by 11% 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.

Total promotional costs recorded as a reduction to sales were $29.9 million and $25.1 million for the nine months ended May 31, 2026 and 2025, respectively.

Therefore, our total expenditures on A&P activities were $58.9 million and $50.1 million for the nine months ended May 31, 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,

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

2026 2025 Change from

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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 Operating Income – Three Months Ended – February 28, 2026 Compared to February 28, 2025

Americas Operating Income – Three Months Ended – May 31, 2026 Compared to May 31, 2025

Income from operations for the Americas segment increased to $27.5 million, up $7.0 million, or 34%, primarily due to a $23.1 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 50.1% 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.

Gross margin for the Americas segment increased from 54.2% to 55.5%, primarily due to the favorable impact of increases in average selling prices as well as decreases in the costs of aerosol cans and fill fees.

Operating expenses increased $6.8 million primarily due to royalty expenses in the U.S.

associated with the sale of limited-edition promotional cans during the period.

In addition, operating expenses increased $1.7 million due to higher employee-related costs as a result of increased headcount, higher accrued incentive compensation and annual compensation increases.

Operating expenses also increased due to amortization related to reclassification of held for sale assets.

Refer to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 3 — Assets Held for Sale for additional information related to this amortization.

Operating income as a percentage of net sales increased from 26.2% to 27.2% period over period.

Americas Operating Income – Six Months Ended – February 28, 2026 Compared to February 28, 2025

Americas Operating Income – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

Income from operations for the Americas segment increased to $57.6 million, up $11.2 million, or 24%, primarily due to an increase in sales of $31.8 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.

Gross margin for the Americas segment increased from 51.7% to 54.2%, primarily due to the favorable impact of increases in average selling prices as well as decreases in the costs of petroleum-based specialty chemicals, aerosol cans and fill fees.

Operating expenses increased $11.2 million primarily due to a $4.0 million increase in 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 advertising and promotion expense as discussed above in the section for the three months ended May 31, 2026, as well as a $0.9 million increase in travel and meeting expenses.

Operating income as a percentage of net sales increased from 21.7% to 23.5% period over period.

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 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.

EIMEA Operating Income – Three Months Ended – May 31, 2026 Compared to May 31, 2025

Income from operations for the EIMEA segment increased to $16.5 million, up $4.4 million, or 37%, primarily due to an increase in sales of $9.9 million and a higher gross margin partially offset by higher operating expenses.

Gross margin for the EIMEA segment increased from 57.7% to 58.3% primarily due to decreases in the costs of petroleum-based specialty chemicals, aerosol cans and fill fees.

Operating expenses increased $1.6 million primarily due to increases in advertising and promotion expenses and freight.

Operating income as a percentage of net sales increased from 21.2% to 24.7% period over period.

EIMEA Operating Income – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

Income from operations for the EIMEA segment increased to $44.6 million, up $3.6 million, or 9%, primarily due to an increase in sales of $16.4 million and a higher gross margin partially offset by higher operating expenses.

Gross margin for the EIMEA segment increased from 57.9% to 58.1% primarily due to decreases in the costs of petroleum-based specialty chemicals which was partially offset by higher warehousing fees and increases in the costs of fill fees.

Operating expenses increased $6.2 million primarily due to higher employee-related costs as a result of higher headcount and annual compensation increases.

In addition, operating expenses increased due to a higher level of advertising and promotion expenses.

Operating income as a percentage of net sales decreased slightly from 23.6% to 23.5% period over period.

Asia-Pacific Operating Income – Three Months Ended – May 31, 2026 Compared to May 31, 2025

Income from operations for the Asia-Pacific segment increased to $9.1 million, up $2.1 million, or 29%, primarily due to a $5.3 million increase in sales partially offset by lower gross margin and higher operating expenses.

Gross margin for the Asia-Pacific segment decreased from 59.0% to 56.5%, primarily due to increased costs of petroleum-based specialty chemicals.

These impacts were concentrated in our Asia distributor markets, who’s shorter inventory and production cycles were affected by the conflict in Iran.

Operating expenses increased $0.4 million primarily due to higher employee-related cost.

Operating income as a percentage of net sales decreased slightly from 35.0% to 34.8%.

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 income as a percentage of net sales increased from 32.1% to 33.4% period over period.

Asia-Pacific Operating Income – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

Income from operations for the Asia-Pacific segment increased to $25.8 million, up $1.2 million, or 5%, primarily due to a $6.6 million increase in sales partially offset by lower gross margin and higher operating expenses.

Gross margin for the Asia-Pacific segment decreased from 59.0% to 58.0%, primarily due to increases in the costs of petroleum-based specialty chemicals.

Operating expenses increased $1.9 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.

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Unallocated Corporate

Unallocated Corporate Expenses – Three Months Ended – February 28, 2026 Compared to February 28, 2025

Unallocated Corporate Expenses – Three Months Ended – May 31, 2026 Compared to May 31, 2025

Unallocated corporate expenses increased to $12.7 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 – Nine Months Ended – May 31, 2026 Compared to May 31, 2025

Unallocated corporate expenses increased to $38.1 million, up $1.9 million, or 5%, 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.

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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,

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

2026 2025 Change 2026 2025 Change

2 unchanged sentences

Other income (expense), net $ (127) $ 880 $ (1,007) $ (246) $ 813 $ (1,059)

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.

Provision for income taxes $ 9,355 $ 6,485 $ 2,870 $ 20,032 $ 4,404 $ 15,628

Interest Income

Interest income remained relatively consistent for both the three and nine months ended May 31, 2026 and 2025.

Interest Expense

Interest expense decreased by $0.1 million and $0.7 million for the three and nine months ended May 31, 2026 and 2025, respectively, primarily due to lower aggregate outstanding balances as well as lower average interest rates on our revolving credit agreement from period to period.

Other Income (Expense), Net

Other income (expense), net changed unfavorably by $1.0 million and $1.1 million for the three and nine months ended May 31, 2026 and 2025, respectively, primarily due to foreign currency exchange losses which were recorded for the three and nine months ended May 31, 2026 compared to net foreign currency exchange gains which were recorded in the same period of the prior fiscal year as a result of fluctuations in the foreign currency exchange rates primarily related to the Euro against the U.S.

Provision for Income Taxes

The provision for income taxes was 23.6% of income before income taxes for both the three months ended May 31, 2026 and 2025 and 22.8% and 5.9% of income before income taxes for the nine months ended May 31, 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 14 — Income Taxes included in this report.

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.

Net income increased $9.2 million, or 44% to $30.2 million, or $2.24 per common share on a fully diluted basis, for the three months ended May 31, 2026 compared to $21.0 million, or $1.54 per common share on a fully diluted basis, for the three months ended May 31, 2025.

Changes in foreign currency exchange rates from period to period had a favorable impact of $1.3 million on consolidated net income for three months ended May 31, 2026.

Thus, on a constant currency basis, net income would have increased $7.9 million, or 38%, from period to period.

Net income decreased $1.8 million, or 3% to $68.0 million, or $5.02 per common share on a fully diluted basis, for the nine months ended May 31, 2026 compared to $69.8 million, or $5.13 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 14 to the condensed consolidated financial statements, net income would have increased $6.7 million, or 12%, 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.

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.

These performance measures are part of our legacy 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.

Results for these performance measures may fluctuate from period to period as a result of various factors, including macroeconomic conditions such as the inflationary environment experienced in recent fiscal years, and investments associated with structural changes undertaken in recent periods such as those related to technology, sustainability, innovation, research and development, legal risk management, quality assurance, regulatory compliance and intellectual property protection in order to safeguard our WD-40 brand.

Beginning in the third quarter of fiscal 2026, we reassessed the performance measures used to evaluate our operating performance to better prioritize reinvestment and support long-term value creation.

In conjunction with this reassessment, we have developed a new Enduring Business Model, which will replace our previous 55/30/25 business model.

Key components of our Enduring Business Model include net sales, gross margin, and Adjusted EBITDA, the latter of which is a non-GAAP performance measure.

Our Enduring Business Model reflects our long-term approach to value creation and performance management.

The model targets annual net sales growth of 5% to 9% on a constant currency basis, gross margin above 55% as a percentage of net sales, and Adjusted EBITDA growth that exceeds the net sales growth rate.

We believe these targets provide a disciplined framework for achieving sustainable growth, strong profitability, and consistent long-term returns for our stockholders.

We will continue to report the results of our 55/30/25 business model through the end of fiscal year 2026.

Beginning in fiscal year 2027, we will transition to report only the performance measures described above on an annual basis.

This change reflects our intent to align our metrics more closely with our long-term strategy to drive growth and deliver sustainable long-term returns.

The following table summarizes the results of these performance measures:

Three Months Ended February 28, Six Months Ended February 28,

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

2026 2025 2026 2025

5 unchanged sentences

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 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.

3 unchanged sentences

Cost of Doing Business (in thousands, except percentages)

Three Months Ended February 28, Six Months Ended February 28,

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

2026 2025 2026 2025

6 unchanged sentences

Cost of doing business as a percentage of net sales – non-GAAP 34 % 38 % 37 % 38 %

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,

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

2026 2025 2026 2025

Net income – GAAP $ 30,216 $ 20,977 $ 67,985 $ 69,753

Provision (benefit) for income taxes 5,536 (7,412) 10,677 (2,081)

Provision for income taxes 9,355 6,485 20,032 4,404

Interest income (156) (104) (489) (358)

9 unchanged sentences

(2) Includes amortization and depreciation presented in both cost of products sold and operating departments.

Adjusted Net Income and Adjusted EPS (in thousands, except for per share amounts)

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,

Diluted EPS - GAAP $ 1.50 $ 2.19 $ 2.78 $ 3.58

During the third quarter of fiscal year 2026, we reassessed the classification of our homecare and cleaning product businesses in the Americas segment previously recorded as held for sale.

These items are infrequent in nature and not reflective of the underlying operational results of our business.

We have included non-GAAP measures of Adjusted Net Income and Adjusted EPS which adjust for the impacts associated with the toll tax on unremitted earnings and expenses related to amounts of amortization to reclassify held for sale assets to held for use.

The following is a reconciliation of Net income to Adjusted Net income and Diluted EPS to Adjusted Diluted EPS:

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

2026 2025 2026 2025

Net Income - GAAP $ 30,216 $ 20,977 $ 67,985 $ 69,753

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

— — — (11,929)

Amortization related to reclassification of held for sale assets (2)

1,343 — 1,343 —

Adjusted Net Income - non-GAAP $ 31,559 $ 20,977 $ 69,328 $ 57,824

Diluted EPS - GAAP $ 2.24 $ 1.54 $ 5.02 $ 5.13

Impact of non-GAAP adjustments (1)(2)

0.09 — 0.10 (0.87)

Adjusted Diluted EPS - non-GAAP $ 2.33 $ 1.54 $ 5.12 $ 4.26

(1) Includes the tax impact on adjustment.

(2) Certain assets of the Company’s homecare and cleaning product businesses were reclassified from held for sale to held for use as of May 31, 2026.

Refer to Note 3 — Assets Held for Sale for additional information and related amortization thereof.

Liquidity and Capital Resources

Our financial condition and liquidity remain strong.

Although there continues to be uncertainty related to adverse global economic conditions, volatility in financial markets, the current inflationary environment and their impacts on our future

results, we believe our efficient business model positions us to manage our business through such situations.

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.

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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.

As of May 31, 2026, $21.0 million of this facility was classified as long-term and was entirely denominated in Euros.

$14.5 million was classified as short-term and was entirely denominated in U.S.

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.

In the United States, we held $65.2 million in fixed rate long-term borrowings as of May 31, 2026, consisting of senior notes under our Note Agreement.

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

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See Note 9 — 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.

At May 31, 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.

At May 31, 2026, we had a total of $59.1 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.

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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 01, 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.

We are authorized to acquire up to $50.0 million of our outstanding shares through this expiration date of August 31, 2026, of which $7.0 million remains available for the repurchase of shares of common stock as of May 31, 2026.

On June 15, 2026, the Board of Directors approved a new share repurchase authorization.

For additional information, refer to the terms and conditions of the 2026 Repurchase Plan in in Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 10— Share Repurchase Plan included in this report.

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

Six Months Ended February 28,

Nine Months Ended May 31,

2026 2025 Change

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Effect of exchange rate changes on cash and cash equivalents 910 (828) 1,738

Net (decrease) increase in cash and cash equivalents $ (7,782) $ 6,296 $ (14,078)

Net increase in cash and cash equivalents $ 1,007 $ 4,983 $ (3,976)

Operating Activities

Net cash provided by operating activities increased $1.4 million to $24.3 million for the six months ended February 28, 2026.

Net cash provided by operating activities decreased $3.2 million to $54.8 million for the nine months ended May 31, 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

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.

Our primary source of operating cash flows for the nine months ended May 31, 2026 was net income of $68.0 million, which decreased approximately $1.8 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 14 to the condensed consolidated financial statements.

Excluding this one-time benefit from the prior fiscal year, net income would have increased $10.1 million.

Changes in our working capital decreased net cash provided by operating activities by $29.5 million.

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.

Sales associated with the significant promotional program in the U.S.

at the end of the third fiscal quarter resulted in higher accounts receivable which negatively impacted cash flow from operating activities.

This was partially offset by favorable changes in income tax receivable balance as the prior period balances were larger in our EIMEA segments.

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.

Net cash used in investing activities increased $0.5 million to $3.4 million for the nine months ended May 31, 2026, primarily due to a higher level of manufacturing-related capital expenditures within the U.S.

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.

Net cash used in financing activities increased $2.0 million to $51.3 million for the nine months ended May 31, 2026 primarily due to increases of treasury stock repurchases of $12.9 million and increases in dividends paid to our stockholders of $2.8 million, partially offset by an increase in net proceeds from our revolving credit facility of $12.9 million.

During the nine months of the fiscal year, net proceeds from our revolving credit facility were $14.5 million compared to $1.6 million in the corresponding period of the prior fiscal year.

Effect of Exchange Rate Changes

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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 terms, was an increase in cash of $0.9 million for the nine months ended May 31, 2026 as compared to a decrease in cash of $0.8 million for the nine months ended May 31, 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.

Purchase Commitments

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The information required by this item is incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 10 — Share Repurchase Plan included in this report.

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.

On June 15, 2026, the Company’s Board declared a cash dividend of $1.02 per share payable on July 31, 2026 to stockholders of record at the close of business on July 17, 2026.

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