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. 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. Accordingly, 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 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 $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 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. 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 $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 Volatility in the price of oil impacts the cost of petroleum-based specialty chemicals included in our maintenance products. The average price of oil increased significantly in the third quarter of fiscal year 2026 due to the geopolitical conflicts in 23 Table of Contents 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. 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 to India and the Middle East. 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. 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 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 May 31, Nine Months Ended May 31, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent Net sales: WD-40 Multi-Use Product $ 152,523 $ 120,687 $ 31,836 26 % $ 397,686 $ 352,926 $ 44,760 13 % WD-40 Specialist 28,018 22,028 5,990 27 % 72,899 59,762 13,137 22 % Other maintenance products 9,203 7,687 1,516 20 % 24,888 22,538 2,350 10 % Total maintenance products 189,744 150,402 39,342 26 % 495,473 435,226 60,247 14 % HCCP (1) 5,375 6,513 (1,138) (17) % 15,740 21,288 (5,548) (26) % Total net sales 195,119 156,915 38,204 24 % 511,213 456,514 54,699 12 % Cost of products sold 84,696 68,804 15,892 23 % 224,017 204,600 19,417 9 % Gross profit 110,423 88,111 22,312 25 % 287,196 251,914 35,282 14 % Operating expenses 70,087 60,746 9,341 15 % 197,314 176,147 21,167 12 % Income from operations $ 40,336 $ 27,365 $ 12,971 47 % $ 89,882 $ 75,767 $ 14,115 19 % Net income (2) $ 30,216 $ 20,977 $ 9,239 44 % $ 67,985 $ 69,753 $ (1,768) (3) % EPS – diluted (3) $ 2.24 $ 1.54 $ 0.70 45 % $ 5.02 $ 5.13 $ (0.11) (2) % Shares used in diluted EPS 13,481 13,567 (86) (1) % 13,512 13,570 (58) — % (1) Homecare and cleaning products (“HCCP”). 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. 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 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 May 31, Nine Months Ended May 31, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent Americas $ 101,216 $ 78,162 $ 23,054 29 % $ 244,903 $ 213,127 $ 31,776 15 % EIMEA (1) 66,572 56,705 9,867 17 % 190,116 173,763 16,353 9 % Asia-Pacific 27,331 22,048 5,283 24 % 76,194 69,624 6,570 9 % Total $ 195,119 $ 156,915 $ 38,204 24 % $ 511,213 $ 456,514 $ 54,699 12 % (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 $1.1 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 May 31, Nine Months Ended May 31, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 81,914 $ 61,225 $ 20,689 34 % $ 192,539 $ 165,184 $ 27,355 17 % WD-40 Specialist 11,471 9,400 2,071 22 % 29,908 25,353 4,555 18 % Other maintenance products 4,957 4,372 585 13 % 13,540 12,238 1,302 11 % Total maintenance products 98,342 74,997 23,345 31 % 235,987 202,775 33,212 16 % HCCP 2,874 3,165 (291) (9) % 8,916 10,352 (1,436) (14) % Total net sales $ 101,216 $ 78,162 $ 23,054 29 % $ 244,903 $ 213,127 $ 31,776 15 % % of consolidated net sales 52 % 50 % 48 % 47 % CC Net sales – non-GAAP (1) $ 99,539 $ 78,162 $ 21,377 27 % $ 241,568 $ 213,127 $ 28,441 13 % 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. 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 Third Quarter Year to Date Increase in average selling price (1) $ 0.6 $ 2.2 $ 0.4 $ 3.2 Increase in sales volume (1) 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 – 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. and Latin America of $17.2 million and $2.6 million, respectively. U.S. 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. 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: • WD-40 Multi-Use Product sales increased $27.4 million , or 17% , primarily due to increases in the U.S. and Latin America of $22.5 million and $4.1 million, respectively. U.S. 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. and Latin America period over period. • Homecare and cleaning product sales decreased $1.4 million, or 14%. 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. • 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. 26 Table of Contents EIMEA Sales The following table summarizes net sales by product line for the EIMEA segment, which includes Europe, India, the Middle East and Africa (in thousands, except percentages): Three Months Ended May 31, Nine Months Ended May 31, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 50,006 $ 42,804 $ 7,202 17 % $ 147,314 $ 134,076 $ 13,238 10 % WD-40 Specialist 12,630 9,671 2,959 31 % 32,137 25,912 6,225 24 % Other maintenance products 3,936 3,125 811 26 % 10,665 9,573 1,092 11 % Total maintenance products 66,572 55,600 10,972 20 % 190,116 169,561 20,555 12 % HCCP (1) — 1,105 (1,105) (100) % — 4,202 (4,202) (100) % Total net sales $ 66,572 $ 56,705 $ 9,867 17 % $ 190,116 $ 173,763 $ 16,353 9 % % of consolidated net sales 34 % 36 % 37 % 38 % CC Net sales – non-GAAP (2) $ 62,217 $ 56,705 $ 5,512 10 % $ 175,238 $ 173,763 $ 1,475 1 % Currency impact on current period – non-GAAP (2) $ 4,355 $ 14,878 (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 Third Quarter Year to Date Decrease in average selling price (1) $ (0.2) $ (0.5) $ (0.6) $ (1.3) Decrease in sales volume due to sale of HCCP (2) (1.6) (1.5) (1.1) (4.2) Increase (decrease) increase in sales volume (1) (0.2) — 7.2 7.0 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) 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 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 – 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 $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: • WD-40 Multi-Use Product sales increased $13.2 million or 10%. Net sales were positively impacted by favorable changes in foreign currency exchange rates. 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%. Net sales were positively impacted by favorable changes in foreign currency exchange rates. On a constant currency basis, sales would have increased by approximately 14% period over period. 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 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. 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 May 31, Nine Months Ended May 31, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 20,603 $ 16,658 $ 3,945 24 % $ 57,833 $ 53,666 $ 4,167 8 % WD-40 Specialist 3,917 $ 2,957 $ 960 32 % 10,854 8,497 2,357 28 % Other maintenance products 310 $ 190 $ 120 63 % 683 727 (44) (6) % Total maintenance products 24,830 $ 19,805 $ 5,025 25 % 69,370 62,890 6,480 10 % HCCP 2,501 2,243 258 12 % 6,824 6,734 90 1 % Total net sales $ 27,331 $ 22,048 $ 5,283 24 % $ 76,194 $ 69,624 $ 6,570 9 % % of consolidated net sales 14 % 14 % 15 % 15 % CC Net sales – non-GAAP (1) $ 26,094 $ 22,048 $ 4,046 18 % $ 74,493 $ 69,624 $ 4,869 7 % Currency impact on current period – non-GAAP (1) $ 1,237 $ 1,701 (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 Third Quarter Year to Date Increase in average selling price (1) $ 1.3 $ 1.1 $ 0.2 $ 2.6 Increase (decrease) in sales volume (1) (3.8) 2.2 3.8 2.2 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 (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 – 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 $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. 29 Table of Contents • Other maintenance and homecare and cleaning product sales remained relatively constant from period to period. 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 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. 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 Euro, U.S. Dollar and Pound Sterling. 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 $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 May 31, Nine Months Ended May 31, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Gross profit $ 110,423 $ 88,111 $ 22,312 $ 287,196 $ 251,914 $ 35,282 Gross margin 56.6 % 56.2 % 40 bps (1) 56.2 % 55.2 % 100 bps (1) (1) Basis points (“bps”) change in gross margin. 30 Table of Contents 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) 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 May 31, Nine Months Ended May 31, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year (in thousands) Dollars Percent Dollars Percent SG&A expenses $ 56,687 $ 51,541 $ 5,146 10 % $ 166,805 $ 151,054 $ 15,751 10 % % of net sales 29.1 % 32.8 % 32.6 % 33.1 % 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. 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. 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 $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. This team leverages its development capabilities by collaborating with a network of outside resources including our current and prospective third-party contract manufacturers. 31 Table of Contents 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 May 31, Nine Months Ended May 31, Change from Prior Year Change from Prior Year (in thousands) 2026 2025 Dollars Percent 2026 2025 Dollars Percent A&P expenses $ 11,939 $ 9,160 $ 2,779 30 % $ 28,951 $ 24,957 $ 3,994 16 % % of net sales 6.1 % 5.8 % 5.7 % 5.5 % 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 $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 $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 May 31, Nine Months Ended May 31, 2026 2025 Change from Prior Year 2026 2025 Change from Prior Year Dollars Percent Dollars Percent Americas $ 27,470 $ 20,483 $ 6,987 34 % $ 57,551 $ 46,345 $ 11,206 24 % EIMEA 16,456 12,028 4,428 37 % 44,583 40,982 3,601 9 % Asia-Pacific 9,137 7,087 2,050 29 % 25,800 24,616 1,184 5 % Unallocated corporate (1) (12,727) (12,233) (494) (4) % (38,052) (36,176) (1,876) (5) % Total $ 40,336 $ 27,365 $ 12,971 47 % $ 89,882 $ 75,767 $ 14,115 19 % (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. 32 Table of Contents Americas 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 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 – 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 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 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 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 increased from 32.1% to 33.4% period over period. 33 Table of Contents 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. Operating income as a percentage of net sales decreased from 35.4% to 33.9% period over period. Unallocated Corporate 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 – 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. Non-Operating Items The following table summarizes non-operating income and expenses for our consolidated operations (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2026 2025 Change 2026 2025 Change Interest income $ 156 $ 104 $ 52 $ 489 $ 358 $ 131 Interest expense $ 794 $ 887 $ (93) $ 2,108 $ 2,781 $ (673) Other income (expense), net $ (127) $ 880 $ (1,007) $ (246) $ 813 $ (1,059) 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. Dollar. 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 34 Table of Contents 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. 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 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. 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 May 31, Nine Months Ended May 31, 2026 2025 2026 2025 Gross margin – GAAP 57 % 56 % 56 % 55 % Cost of doing business as a percentage of net sales – non-GAAP 34 % 38 % 37 % 38 % Adjusted EBITDA as a percentage of net sales – non-GAAP (1) 23 % 20 % 19 % 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 35 Table of Contents how we run our business. We believe these measures also provide investors with additional financial information that should be considered when assessing our underlying business performance and trends. These non-GAAP financial measures are supplemental in nature and should not be considered in isolation or as alternatives to net income, income from operations or other financial information prepared in accordance with GAAP as indicators of our performance or operations. The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies. Reconciliations of these non-GAAP financial measures to our financial statements as prepared in accordance with GAAP are as follows: Cost of Doing Business (in thousands, except percentages) Three Months Ended May 31, Nine Months Ended May 31, 2026 2025 2026 2025 Total operating expenses – GAAP $ 70,087 $ 60,746 $ 197,314 $ 176,147 Amortization (1) (in operating departments) (1,868) (475) (2,877) (1,401) Depreciation (in operating departments) (1,027) (881) (2,978) (2,696) Cost of doing business $ 67,192 $ 59,390 $ 191,459 $ 172,050 Net sales $ 195,119 $ 156,915 $ 511,213 $ 456,514 Cost of doing business as a percentage of net sales – non-GAAP 34 % 38 % 37 % 38 % (1) Includes amortization of definite-lived intangible assets and cloud computing amortization. Adjusted EBITDA (in thousands, except percentages) 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 for income taxes 9,355 6,485 20,032 4,404 Interest income (156) (104) (489) (358) Interest expense 794 887 2,108 2,781 Amortization (1)(2) 1,965 475 3,166 1,401 Depreciation (2) 1,872 1,992 6,058 5,963 Adjusted EBITDA $ 44,046 $ 30,712 $ 98,860 $ 83,944 Net sales $ 195,119 $ 156,915 $ 511,213 $ 456,514 Adjusted EBITDA as a percentage of net sales – non-GAAP 23 % 20 % 19 % 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 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. 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: 36 Table of Contents 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 Overview Our financial condition and liquidity remain strong. Although there continues to be uncertainty related to adverse global economic conditions, volatility in financial markets, the current inflationary environment and their impacts on our future results, we believe our efficient business model positions us to manage our business through such situations. We continue to manage all aspects of our business including, but not limited to, monitoring our liquidity, the financial health of our customers, suppliers and other third-party relationships, implementing gross margin enhancement strategies and developing new opportunities for growth. Our principal sources of liquidity are cash generated from operations and cash currently available from our existing unsecured revolving credit facility under the Credit Agreement with Bank of America, N.A. We use the revolving credit facility primarily for our general working capital needs. We also hold borrowings under the Note Agreement. See Note 9 — 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 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. Dollars. 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. 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 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 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 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. 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. 37 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 $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. Cash Flows The following table summarizes our cash flows by category for the periods presented (in thousands): Nine Months Ended May 31, 2026 2025 Change Net cash provided by operating activities $ 54,825 $ 57,980 $ (3,155) Net cash used in investing activities (3,379) (2,848) (531) Net cash used in financing activities (51,349) (49,321) (2,028) Effect of exchange rate changes on cash and cash equivalents 910 (828) 1,738 Net increase in cash and cash equivalents $ 1,007 $ 4,983 $ (3,976) Operating Activities 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 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 $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. and the U.K. from period to period. Financing Activities 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 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 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 38 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 13. 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 10 — Share Repurchase Plan included in this report. Dividends 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 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. 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.