Q3 FY25 Financial Performance - Net sales increased by 1% to $156.9 million, but would have increased by 2% excluding currency impacts[12] - Gross margin improved by 310 basis points to 56.2%[12] - Net income increased by 6% to $21.0 million[12] - Diluted EPS increased by 5% to $1.54[12] Segment Performance - Americas segment sales increased by 4%, representing 50% of global net sales[14] - EIMEA segment sales decreased by 5%, representing 36% of global net sales[17] - Asia-Pacific segment sales increased by 7%, representing 14% of global net sales[21] Growth and Strategy - The company targets mid-to-high single-digit CAGR for total company maintenance product sales[30] - The company is focused on four must-win battles: lead geographic expansion, accelerate premiumization, drive WD-40 Specialist growth, and turbo-charge digital commerce[34] FY25 Guidance (Pro Forma) - Sales growth is narrowed to between 6% and 9% over 2024 pro forma results, with net sales between $600 million and $620 million[53] - Diluted EPS is increased to between $5.30 and $5.60[53]

Financial Data and Key Metrics Changes - The company reported third quarter net sales of $156.9 million, a 1% increase compared to the same period last year, marking a record sales quarter [7][8] - Adjusting for foreign currency translation, net sales would have been $158.6 million, reflecting a 2% increase year over year [8] - Gross margin improved to 56.2%, up from 53.1% last year, driven by higher average selling prices and lower specialty chemical costs [30][31] - Adjusted EBITDA margin was 20%, compared to 19% in the same period last year, with adjusted EBITDA of $30.7 million, up 3% from the prior quarter [36][37] - Operating income improved to $27.4 million, an increase of 1% over the prior period, and diluted earnings per share were $1.54, reflecting a 5% increase [38] Business Line Data and Key Metrics Changes - Maintenance products net sales reached $150.4 million, a 2% year-over-year increase, with year-to-date sales of $435.2 million representing a 6% increase [8][9] - Sales of WD-40 Multi Use Product increased 6% year to date, while WD-40 Specialist products were up 11% year to date [47] - Sales in The Americas increased 4% to $78.2 million, with maintenance products sales up 4% to $75 million [10][11] - EMEA sales declined 5% to $56.7 million, with maintenance products down 3% to $55.6 million [12][13] - Asia Pacific sales increased 7% to $22 million, with maintenance products up 9% to $19.8 million [16][17] Market Data and Key Metrics Changes - The Americas accounted for 50% of global business, while EMEA made up 36% and Asia Pacific contributed 14% [12][17] - Sales in Latin America showed strong growth of 19%, while Turkey experienced a significant decline of nearly 40% [19][70] - Sales in France increased by 9%, 14% in DACH, 13% in Iberia, and 7% in the UK, indicating strong market trends in these regions [14][15] Company Strategy and Development Direction - The company is focused on driving revenue growth in maintenance products and enhancing overall profitability through geographic expansion and premiumization [18][20] - The strategic enablers emphasize operational excellence and a people-first mindset, with a commitment to social responsibility and community support [24][26] - The company is targeting a compound annual growth rate for premiumized products of greater than 10% and for WD-40 Specialist products of greater than 15% [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in concluding the fiscal year with solid growth, despite challenges in certain markets [9][47] - The company narrowed its net sales guidance for fiscal year 2025 to between 6% and 9%, reflecting a clearer view of business performance [42][68] - Management acknowledged potential risks including inflationary pressures and foreign currency fluctuations but remains optimistic about achieving long-term targets [45][72] Other Important Information - The company plans to continue returning capital to stockholders through dividends and share repurchases, with a quarterly cash dividend of $0.94 per share approved [40] - The divestiture of the Home Care and Cleaning business is ongoing, with active discussions with potential buyers [41] Q&A Session Summary Question: Why is the Q4 guidance wide? - Management noted that promotional activity and timing of orders can impact revenue, leading to a wider guidance range [52][54] Question: Will gross margin growth slow next year? - Management indicated that while they are pleased with current margins, they have supply chain initiatives that could offset potential inflationary pressures [55][56] Question: How should G&A costs be viewed moving forward? - Management stated that they are focused on controlling costs and do not expect double-digit increases in G&A expenses [58][60] Question: What is the impact of foreign exchange on Q4? - Management expects a small benefit from foreign exchange in Q4, with some currencies remaining a headwind [61][62] Question: Are tariffs affecting customer order trends? - Management clarified that while there is some exposure to tariffs, substantial supply chain initiatives are mitigating their impact [63][64] Question: What changed in the top line guidance? - Management explained that the guidance reflects a clearer picture of business performance and adjustments for currency fluctuations [67][72]

Financial Data and Key Metrics Changes - The company reported third quarter net sales of $156.9 million, a 1% increase compared to the same period last year, marking a record sales quarter [6][7] - Adjusting for foreign currency translation, net sales would have been $158.6 million, reflecting a 2% increase year over year [7] - Year-to-date net sales of maintenance products reached $435.2 million, representing a 6% increase [8] - Gross margin improved to 56.2% in the third quarter, up from 53.1% last year, driven by higher average selling prices and lower specialty chemical costs [30][31] - Adjusted EBITDA margin was 20% compared to 19% in the same period last year, with adjusted EBITDA of $30.7 million, up 3% from the prior quarter [36][37] - Operating income improved to $27.4 million, an increase of 1% over the prior period, while diluted earnings per share were $1.54, reflecting a 5% increase [38] Business Line Data and Key Metrics Changes - Maintenance products sales increased 2% year over year to $150.4 million in the third quarter, with year-to-date sales aligning with long-term growth targets [7][8] - Sales of WD-40 Multi Use Product in The Americas increased 7%, driven by promotional activity [9] - WD-40 Specialist sales increased 11% year to date, with a target of greater than 15% compound annual growth rate for future sales [20][21] - Home Care and Cleaning product sales remained steady, reflecting a strategic shift towards higher margin maintenance products [10][13] Market Data and Key Metrics Changes - Sales in The Americas increased 4% to $78.2 million, with maintenance products sales up 4% to $75 million [8][9] - EMEA sales declined 5% to $56.7 million, with maintenance products down 3% [10][11] - Asia Pacific sales increased 7% to $22 million, with maintenance products up 9% [14][16] - Sales in Turkey and the Middle East were impacted by operational changes and timing of customer orders, affecting overall performance in EMEA [12][13] Company Strategy and Development Direction - The company is focused on driving revenue growth in maintenance products and enhancing overall profitability through geographic expansion and premiumization [17][20] - The strategic enablers emphasize operational excellence and a people-first mindset, with a commitment to social responsibility and community support [22][25] - The company is actively pursuing a divestiture of its Home Care and Cleaning business, with ongoing discussions with potential buyers [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in concluding the fiscal year with solid growth, despite challenges in certain markets [8][47] - The company anticipates a strong start to the fourth quarter, with robust performance across all trade blocks [47] - Management acknowledged potential risks including cost volatility and foreign currency fluctuations, but remains optimistic about achieving long-term growth targets [32][45] Other Important Information - The company plans to maintain a disciplined capital allocation strategy, targeting annual dividends greater than 50% of earnings [40] - Employee tenure at the company averages eight years, significantly higher than the median tenure at U.S. companies [24] Q&A Session Summary Question: Why is the Q4 guidance wide? - Management noted that promotional activity and timing of orders can impact revenue, leading to a wider guidance range [52][54] Question: Will gross margin growth slow next year? - Management indicated that while they are pleased with current margins, they have initiatives in place to potentially enhance margins further [55][56] Question: How should SG&A costs be viewed moving forward? - Management suggested that SG&A costs may not rise at the same rate as in previous years, focusing on cost management [60] Question: What is the impact of foreign exchange on Q4? - Management expects a small positive impact from foreign exchange in Q4, particularly in Europe [62] Question: Are tariffs affecting customer order trends? - Management stated that while there is some exposure to tariffs, substantial supply chain initiatives are mitigating their impact [63][64]

[PART I — FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents WD-40 Company's unaudited condensed consolidated financial statements, including Balance Sheets, Operations, and Cash Flows Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 31, 2025 | August 31, 2024 | | :--- | :--- | :--- | | Total current assets | $266,457 | $255,441 | | Total assets | $455,952 | $449,039 | | Total current liabilities | $93,721 | $103,500 | | Total liabilities | $198,890 | $218,513 | | Total stockholders' equity | $257,062 | $230,526 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | | Net sales | $456,514 | $434,566 | | Gross profit | $251,914 | $230,882 | | Income from operations | $75,767 | $72,301 | | Net income | $69,753 | $52,860 | | Diluted EPS | $5.13 | $3.88 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $57,980 | $64,824 | | Net cash used in investing activities | $(2,848) | $(9,103) | | Net cash used in financing activities | $(49,321) | $(58,145) | | Net increase (decrease) in cash | $4,983 | $(2,843) | - In Q1 FY2025, certain assets of the company's homecare and cleaning product businesses in the Americas and EIMEA segments were classified as held for sale, totaling **$9.3 million**. These assets primarily consist of inventory, goodwill, and other intangible assets[45](index=45&type=chunk)[46](index=46&type=chunk) - Effective September 1, 2024, the company changed the functional currency of its U.K. subsidiary (which generates EIMEA results) from Pound Sterling to the Euro, reflecting a significant shift in the currency mix of its operating income[38](index=38&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting a **5%** sales increase, improved gross margin, and a **32%** net income rise - For the nine months ended May 31, 2025, consolidated net sales increased **5%** to **$456.5 million**, and net income rose **32%** to **$69.8 million**. Diluted EPS was **$5.13**, up from **$3.88**. Excluding a one-time tax benefit of **$11.9 million**, net income would have increased **9%**[102](index=102&type=chunk) - The company returned approximately **$47.2 million** to stockholders through share repurchases and dividends during the first nine months of fiscal year 2025[102](index=102&type=chunk) - The company's long-term business model targets are **55%** gross margin, **30%** cost of doing business, and **25%** Adjusted EBITDA. For the nine months ended May 31, 2025, the company achieved **55%** gross margin, **38%** cost of doing business, and **18%** Adjusted EBITDA[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Net sales grew **5%** to **$456.5 million**, gross margin improved to **55.2%**, and net income rose **32%** due to a tax benefit Net Sales by Product Category (Nine Months Ended May 31, in thousands) | Product Category | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total maintenance products | $435,226 | $410,546 | 6% | | HCCP | $21,288 | $24,020 | (11)% | | **Total net sales** | **$456,514** | **$434,566** | **5%** | Net Sales by Segment (Nine Months Ended May 31, in thousands) | Segment | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Americas | $213,127 | $202,685 | 5% | | EIMEA | $173,763 | $162,466 | 7% | | Asia-Pacific | $69,624 | $69,415 | 0% | | **Total** | **$456,514** | **$434,566** | **5%** | - Gross margin for the nine months ended May 31, 2025, increased by **210 basis points** to **55.2%**, primarily due to lower costs of aerosol cans (**70 bps**) and specialty chemicals (**70 bps**)[118](index=118&type=chunk)[120](index=120&type=chunk) - SG&A expenses for the nine-month period increased by **12%** (**$16.3 million**), mainly due to higher employee-related costs of **$11.5 million** from increased headcount, incentive compensation, and annual salary increases[121](index=121&type=chunk)[123](index=123&type=chunk) - The effective tax rate for the nine months ended May 31, 2025, was **5.9%**, a significant decrease from **23.1%** in the prior year, primarily due to the release of an **$11.9 million** uncertain tax position related to the Tax Cuts and Jobs Act[84](index=84&type=chunk)[143](index=143&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$51.7 million** cash, with operating cash flow at **$58.0 million**, and used cash for dividends and share repurchases Cash Flow Summary (Nine Months Ended May 31, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $57,980 | $64,824 | | Net cash used in investing activities | $(2,848) | $(9,103) | | Net cash used in financing activities | $(49,321) | $(58,145) | - The decrease in operating cash flow was primarily due to an **$11.7 million** unfavorable net change in working capital, driven by changes in inventory and accounts payable balances[164](index=164&type=chunk) - The Board extended the 2023 Share Repurchase Plan to August 31, 2026. As of May 31, 2025, **$32.2 million** remains available for repurchases under the **$50.0 million** plan[161](index=161&type=chunk)[184](index=184&type=chunk) - On June 17, 2025, the Board declared a quarterly cash dividend of **$0.94** per share[91](index=91&type=chunk)[173](index=173&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company incorporates market risk disclosures from its latest 10-K, indicating no material changes to foreign currency, interest rate, or commodity price exposures - The company states there are no material changes to its market risk disclosures from its most recent Annual Report on Form 10-K filed on October 21, 2024[178](index=178&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of May 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of May 31, 2025, ensuring timely reporting as required by the SEC[179](index=179&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended May 31, 2025, that materially affected, or are reasonably likely to materially affect, these controls[180](index=180&type=chunk) [PART II — OTHER INFORMATION](index=45&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, but management believes no pending claims will materially impact its financial condition - As of May 31, 2025, the company believes no legal proceedings will result in a probable loss or have a materially adverse impact on its financial condition, results of operations, or cash flows[79](index=79&type=chunk)[182](index=182&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since those disclosed in the Annual Report on Form 10-K - There have been no material changes in risk factors from those disclosed in the Annual Report on Form 10-K for the fiscal year ended August 31, 2024[183](index=183&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **12,750** shares for approximately **$3.0 million** in Q3 FY2025, extending the plan with **$32.2 million** remaining - The Board of Directors extended the expiration date of the 2023 Repurchase Plan from August 31, 2025, to August 31, 2026. As of May 31, 2025, **$32.2 million** remains available for repurchase under the plan[184](index=184&type=chunk) Share Repurchases (Q3 FY2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 2025 | **5,000** | **$241.52** | | April 2025 | **4,000** | **$234.14** | | May 2025 | **3,750** | **$239.05** | | **Total** | **12,750** | **$238.48** | [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) No directors or officers reported adoption, modification, or termination of Rule 10b5-1 trading arrangements in Q3 FY2025 - No directors or officers reported the adoption, modification, or termination of a Rule 10b5-1 trading arrangement during the three months ended May 31, 2025[187](index=187&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, CEO/CFO certifications, and iXBRL data - The report includes standard exhibits such as corporate governance documents, CEO/CFO certifications (Sections 302 and 906), and financial statements formatted in iXBRL[188](index=188&type=chunk)

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) The company achieved record quarterly net sales and improved profitability, driven by core maintenance product growth and varied regional performance [Third Quarter 2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) WD-40 Company reported record quarterly net sales of $156.9 million for Q3 2025, a 1% increase year-over-year, driven by a 2% growth in its core maintenance products. Gross margin significantly improved by 310 basis points to 56.2%, exceeding the company's long-term target a year ahead of schedule. Net income rose 6% to $21.0 million, with diluted EPS increasing 5% to $1.54 Q3 2025 Financial Highlights vs. Q3 2024 | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Total Net Sales | $156.9M | $155.0M | +1% | | Gross Margin | 56.2% | 53.1% | +310 bps | | Operating Income | $27.4M | $27.2M | +1% | | Net Income | $21.0M | $19.8M | +6% | | Diluted EPS | $1.54 | $1.46 | +5% | - Achieved a new record high for net sales in a quarter at **$156.9 million**[3](index=3&type=chunk) - Gross margin reached **56%**, exceeding the long-term target of **55%** a full year ahead of schedule[3](index=3&type=chunk) - Core maintenance products sales grew **2%** in the quarter and are up **6%** year-to-date, aligning with long-term growth objectives[3](index=3&type=chunk) [Performance by Business Segment](index=1&type=section&id=Performance%20by%20Business%20Segment) In Q3 2025, the Americas segment, representing 50% of total sales, grew 4% to $78.2 million, primarily driven by strong performance in the United States. The EIMEA segment saw a 5% sales decrease to $56.7 million due to timing of customer orders in distributor markets. The Asia-Pacific segment posted a 7% increase in sales to $22.0 million, led by growth in China and other Asian distributor markets Net Sales by Segment (in thousands) | Segment | Q3 2025 Sales | Q3 2024 Sales | Change | YTD 2025 Sales | YTD 2024 Sales | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Americas | $78,162 | $75,103 | +4% | $213,127 | $202,685 | +5% | | EIMEA | $56,705 | $59,399 | -5% | $173,763 | $162,466 | +7% | | Asia-Pacific | $22,048 | $20,543 | +7% | $69,624 | $69,415 | —% | - Americas: Sales growth was driven by a **$3.0 million** increase in the U.S. due to increased promotional activity and timing of customer orders[9](index=9&type=chunk) - EIMEA: Sales decreased due to lower sales volume in distributor markets, particularly Turkey and the Middle East, related to order timing and operational changes[9](index=9&type=chunk) - Asia-Pacific: Growth was fueled by successful promotional programs and expanded distribution in China, along with increased demand in markets like Indonesia and Taiwan[9](index=9&type=chunk) [Performance by Product Group](index=3&type=section&id=Performance%20by%20Product%20Group) Maintenance products, the company's primary strategic focus, accounted for 96% of total net sales in Q3 2025, with sales increasing 2% to $150.4 million. This growth was led by a 9% increase in WD-40 Specialist® sales. In contrast, homecare and cleaning products (HCCP) sales declined 17% to $6.5 million, reflecting the company's stated intent to divest these product lines Net Sales by Product Group (in thousands) | Product Group | Q3 2025 Sales | Q3 2024 Sales | Change | YTD 2025 Sales | YTD 2024 Sales | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Maintenance Products | $150,402 | $147,162 | +2% | $435,226 | $410,546 | +6% | | - WD-40 Multi-Use | $120,687 | $119,053 | +1% | $352,926 | $333,964 | +6% | | - WD-40 Specialist | $22,028 | $20,224 | +9% | $59,762 | $53,883 | +11% | | Homecare & Cleaning (HCCP) | $6,513 | $7,883 | -17% | $21,288 | $24,020 | -11% | - Maintenance products are the primary strategic focus, representing **96%** of total net sales in the third quarter[10](index=10&type=chunk) - The company has announced its intention to sell its homecare and cleaning product portfolios in the Americas and the United Kingdom[10](index=10&type=chunk) [Shareholder Returns and Outlook](index=3&type=section&id=Shareholder%20Returns%20and%20Outlook) The company declared a quarterly dividend and extended its share repurchase plan, while updating its fiscal year 2025 guidance for net sales, operating income, and diluted EPS on a pro forma basis [Dividend and Share Repurchase](index=3&type=section&id=Dividend%20and%20Share%20Repurchase%20Update) The company declared a regular quarterly dividend of $0.94 per share. The board also extended its 2023 Share Repurchase Plan to August 31, 2026, with $32.2 million remaining available for buybacks as of May 31, 2025. Since the beginning of the fiscal year, the company has repurchased 39,000 shares for a total of $9.7 million - A regular quarterly dividend of **$0.94 per share** was declared, payable on July 31, 2025[13](index=13&type=chunk) - The share repurchase plan was extended to August 31, 2026, with **$32.2 million** remaining available for repurchases[13](index=13&type=chunk) - From September 1, 2024, through Q3, the company repurchased **39,000 shares** at a total cost of **$9.7 million**[13](index=13&type=chunk) [Updated Fiscal Year 2025 Guidance](index=3&type=section&id=Updated%20Fiscal%20Year%202025%20Guidance) WD-40 Company updated its pro forma guidance for fiscal year 2025, narrowing the net sales outlook while raising projections for operating income and EPS. Net sales are now expected to be between $600 million and $620 million (6-9% growth). Guidance for operating income was increased to a range of $96 million to $101 million, and diluted EPS was raised to between $5.30 and $5.60 FY 2025 Pro Forma Guidance | Metric | Updated Guidance | Growth vs. 2024 Pro Forma | | :--- | :--- | :--- | | Net Sales | $600M - $620M | 6% to 9% | | Gross Margin | 55% to 56% | N/A | | Advertising & Promotion | ~6% of net sales | N/A | | Operating Income | $96M - $101M | 7% to 12% | | Diluted EPS | $5.30 - $5.60 | 12% to 18% | - The guidance is provided on a pro forma basis, excluding the financial impact of homecare and cleaning products classified as assets held for sale[12](index=12&type=chunk) - If the company is unsuccessful in divesting these assets, its guidance would be positively impacted by approximately **$20 million** in net sales and **$0.33** in diluted EPS for the full fiscal year[14](index=14&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements provide a detailed overview of the company's financial position, operational performance, and cash flow activities for the period [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of May 31, 2025, the company's balance sheet showed total assets of $456.0 million and total liabilities of $198.9 million. This compares to total assets of $449.0 million and total liabilities of $218.5 million at the end of fiscal year 2024. The increase in total assets was accompanied by a decrease in total liabilities, resulting in a stronger stockholders' equity position of $257.1 million Balance Sheet Summary (in thousands) | Account | May 31, 2025 | August 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $51,682 | $46,699 | | Total Current Assets | $266,457 | $255,441 | | Total Assets | $455,952 | $449,039 | | Total Current Liabilities | $93,721 | $103,500 | | Total Liabilities | $198,890 | $218,513 | | Total Stockholders' Equity | $257,062 | $230,526 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the third quarter ended May 31, 2025, the company generated $156.9 million in net sales, resulting in a gross profit of $88.1 million and net income of $21.0 million. For the nine-month period, net sales reached $456.5 million, with a gross profit of $251.9 million and a significantly higher net income of $69.8 million compared to $52.9 million in the prior year period Statement of Operations Summary (in thousands) | Account | Three Months Ended May 31, 2025 | Nine Months Ended May 31, 2025 | | :--- | :--- | :--- | | Net Sales | $156,915 | $456,514 | | Gross Profit | $88,111 | $251,914 | | Income from Operations | $27,365 | $75,767 | | Net Income | $20,977 | $69,753 | | Diluted EPS | $1.54 | $5.13 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended May 31, 2025, net cash provided by operating activities was $58.0 million, a decrease from $64.8 million in the prior year period. The company used $2.8 million in investing activities and $49.3 million in financing activities, primarily for dividend payments ($37.5 million) and share repurchases ($9.7 million). This resulted in a net increase in cash of $5.0 million, bringing the cash and cash equivalents balance to $51.7 million Cash Flow Summary (Nine Months Ended May 31, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $57,980 | $64,824 | | Net cash used in investing activities | $(2,848) | $(9,103) | | Net cash used in financing activities | $(49,321) | $(58,145) | | Net increase (decrease) in cash | $4,983 | $(2,843) | | Cash and cash equivalents at end of period | $51,682 | $45,300 | - Major uses of cash in financing activities included **$37.5 million** for dividends paid and **$9.7 million** for treasury stock purchases[32](index=32&type=chunk)

Group 1 - Seeking Alpha welcomes David Devine as a new contributing analyst, encouraging others to share investment ideas for publication [1] - David Devine has a master's in economics and 15 years of experience in both public and private sectors, providing a global perspective on investing [2] - Devine's investment approach includes a mix of growth stocks, quality stalwarts, and dividend growth strategies, aiming for a balanced portfolio that outperforms the market [2] Group 2 - Devine teaches investing, micro, and macroeconomics, helping the next generation of investors understand financial market fundamentals [2] - His portfolio strategy balances individual stocks and ETFs, combining stability with growth [2]

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed financial statements for the six months ended February 28, 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | February 28, 2025 | August 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$458,262** | **$449,039** | | Total Current Assets | $272,437 | $255,441 | | **Total Liabilities** | **$216,120** | **$218,513** | | Total Current Liabilities | $113,479 | $103,500 | | **Total Stockholders' Equity** | **$242,142** | **$230,526** | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Six Months Ended Feb 28, 2025 | Six Months Ended Feb 29, 2024 | | :--- | :--- | :--- | | Net Sales | $299,599 | $279,521 | | Gross Profit | $163,803 | $148,494 | | Income from Operations | $48,402 | $45,125 | | Net Income | $48,776 | $33,018 | | Diluted EPS | $3.58 | $2.42 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Six Months Ended Feb 28, 2025 | Six Months Ended Feb 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,908 | $44,892 | | Net cash used in investing activities | ($1,800) | ($1,743) | | Net cash used in financing activities | ($12,633) | ($35,589) | | Net increase in cash and cash equivalents | $6,296 | $7,300 | - In Q1 FY2025, the company reclassified certain assets of its homecare and cleaning product businesses in the Americas and EIMEA segments as **held for sale, totaling $9.5 million**[45](index=45&type=chunk)[46](index=46&type=chunk) - The functional currency for the company's U.K. subsidiary was **changed from Pound Sterling to the Euro**, effective September 1, 2024, to reflect shifts in operating income currency mix[38](index=38&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial performance for H1 FY2025, highlighting sales growth and a tax-driven net income increase - For the six months ended Feb 28, 2025, **consolidated net sales increased by 7% to $299.6 million**, and **net income rose 48% to $48.8 million**, significantly impacted by a one-time favorable tax adjustment[103](index=103&type=chunk) - The company's business model targets a **55% gross margin** and **25% Adjusted EBITDA**; for H1 FY2025, it achieved a 55% gross margin but Adjusted EBITDA was 18%[144](index=144&type=chunk)[145](index=145&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Net sales grew 7% to $299.6 million and gross margin improved to 54.7% in H1 FY2025 Net Sales by Product Category (Six Months Ended, in thousands) | Product Category | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Total maintenance products | $284,824 | $263,384 | 8% | | Homecare & cleaning products (HCCP) | $14,775 | $16,137 | (8)% | | **Total net sales** | **$299,599** | **$279,521** | **7%** | - **Gross margin increased by 160 basis points to 54.7%**, driven by lower costs of aerosol cans and specialty chemicals[118](index=118&type=chunk) - **SG&A expenses increased by 12% ($10.4 million)**, mainly due to higher employee-related costs ($5.7 million) and increased professional services fees ($1.3 million)[121](index=121&type=chunk) - Total advertising and promotional (A&P) spending for the six months was **$32.3 million**, up from $29.1 million, reflecting increased marketing support[128](index=128&type=chunk) [Net Sales by Segment](index=26&type=section&id=Net%20Sales%20by%20Segment) EIMEA segment sales grew 14%, Americas 6%, while Asia-Pacific declined 3% in H1 FY2025 Net Sales by Segment (Six Months Ended, in thousands) | Segment | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Americas | $134,965 | $127,582 | 6% | | EIMEA | $117,058 | $103,067 | 14% | | Asia-Pacific | $47,576 | $48,872 | (3)% | | **Total** | **$299,599** | **$279,521** | **7%** | - Americas sales growth was primarily driven by a **$7.0 million increase in Latin America**, benefiting from a new direct marketing model in Brazil[108](index=108&type=chunk) - EIMEA sales growth was due to **higher sales volume across nearly all regions** as demand recovered following prior price increases[112](index=112&type=chunk) - Asia-Pacific sales decreased mainly in distributor markets ($3.3 million) as distributors **reduced orders to normalize high inventory levels**[116](index=116&type=chunk) [Non-Operating Items and Net Income](index=37&type=section&id=Non-Operating%20Items%20and%20Net%20Income) A one-time $11.9 million tax benefit significantly increased net income and diluted EPS for H1 FY2025 - The **effective tax rate for Q2 FY2025 was (33.0)%**, a sharp decrease driven by the release of an **$11.9 million uncertain tax position** after the statute of limitations expired[86](index=86&type=chunk)[138](index=138&type=chunk) GAAP vs. Non-GAAP Adjusted EPS (Six Months Ended) | Metric | Feb 28, 2025 | Feb 29, 2024 | | :--- | :--- | :--- | | Diluted EPS - GAAP | $3.58 | $2.42 | | Release of Uncertain Tax Position | ($0.87) | — | | **Adjusted diluted EPS - Non-GAAP** | **$2.71** | **$2.42** | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow decreased to $22.9 million while the company returned $31.4 million to shareholders - **Net cash from operating activities decreased by $22.0 million YoY**, primarily due to a $15.8 million decrease from changes in inventory balances[157](index=157&type=chunk)[158](index=158&type=chunk) - **Net cash used in financing activities decreased by $23.0 million YoY**, mainly due to net proceeds of $22.1 million from the revolving credit facility[160](index=160&type=chunk) - As of February 28, 2025, the company had **$53.0 million in cash and cash equivalents** and was in compliance with all debt covenants[153](index=153&type=chunk) - Under the 2023 Repurchase Plan, **$35.2 million remains available for share repurchases** as of February 28, 2025[155](index=155&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk disclosures are incorporated by reference from the FY2024 Annual Report on Form 10-K - The information required for this item is **incorporated by reference** from the company's Annual Report on Form 10-K for the fiscal year ended August 31, 2024[171](index=171&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of February 28, 2025 - The Company's CEO and CFO concluded that as of February 28, 2025, the company's **disclosure controls and procedures were effective**[172](index=172&type=chunk) - There were **no material changes in internal control over financial reporting** during the quarter ended February 28, 2025[172](index=172&type=chunk) [PART II — OTHER INFORMATION](index=44&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no pending claims expected to have a materially adverse financial impact - As of February 28, 2025, the Company believes that **no pending claims will result in a loss that would have a materially adverse impact** on its financial condition[82](index=82&type=chunk)[175](index=175&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the FY2024 Annual Report on Form 10-K - There have been **no material changes in risk factors** from those disclosed in the Annual Report on Form 10-K for the fiscal year ended August 31, 2024[176](index=176&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details share repurchase activity, with 26,250 shares repurchased for $6.7 million in H1 FY2025 - The company is authorized to acquire up to **$50.0 million of its shares** through August 31, 2025, under the 2023 Repurchase Plan[177](index=177&type=chunk) Share Repurchases (Three Months Ended February 28, 2025) | Period | Total of Shares Purchased | Average Price Paid Per Share | Max $ Value of Shares That May Yet Be Purchased | | :--- | :--- | :--- | :--- | | Dec 2024 | 3,750 | $271.00 | $37,263,141 | | Jan 2025 | 3,750 | $234.93 | $36,382,152 | | Feb 2025 | 5,000 | $234.88 | $35,207,747 | | **Total** | **12,500** | **$245.73** | | [Other Information](index=44&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement - During the quarter ended February 28, 2025, **no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement**[180](index=180&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) Lists filed exhibits, including CEO/CFO certifications and iXBRL data files - The exhibits filed with this report include **CEO/CFO certifications** pursuant to Sarbanes-Oxley Sections 302 and 906, and financial statements formatted in iXBRL[181](index=181&type=chunk)

Group 1 - The WD-40 Company (NASDAQ: WDFC) is highlighted as one of the oldest positions in the investment portfolio, indicating a long-term investment strategy [1] - The company has experienced a significant stock decline, but the investment strategy employed by the firm has allowed for thriving during market selloffs [1] - The firm emphasizes a blended trading and income approach to enhance savings and retirement timelines, suggesting a proactive investment strategy [1] Group 2 - The company offers a money-back guarantee for its services, indicating confidence in its investment strategies and customer satisfaction [3] - The firm promotes its proven track record and encourages potential clients to take the next step in their investment journey [3]

Q2 FY25 Financial Performance - Net sales increased by 5% to $146.1 million, compared to $139.1 million in Q2 FY24[12] - Gross margin improved by 220 basis points to 54.6%, compared to 52.4% in Q2 FY24[12] - Operating income increased by 11% to $23.3 million, compared to $20.9 million in Q2 FY24[12] - Net income increased significantly by 92% to $29.9 million, compared to $15.5 million in Q2 FY24[12] - Diluted EPS also increased by 92% to $2.19, compared to $1.14 in Q2 FY24, which includes a $0.87 positive impact from a one-time income tax adjustment[12] Segment Performance - Americas segment sales increased by 3%, representing 45% of global net sales[14] - EIMEA segment sales increased by 10%, representing 41% of global net sales[19] - Asia-Pacific segment sales increased by 1%, representing 14% of global net sales[22] Growth and Strategy - The company targets mid-to-high single-digit CAGR for total company maintenance products[30] - The company is focused on four must-win battles: lead geographic expansion, accelerate premiumization, drive WD-40 Specialist growth, and turbo-charge digital commerce[34] - E-commerce sales increased by 9% year-to-date[36] FY25 Guidance (Pro Forma) - The company expects net sales between $600 million and $630 million, representing a 6% to 11% growth over FY24 pro forma results[51] - Gross margin is expected to increase to between 55% and 56%[51] - Diluted EPS is projected to be between $5.25 and $5.55, based on 13.5 million shares outstanding[51]

Financial Data and Key Metrics Changes - The company reported net sales of $146.1 million for the second quarter, an increase of 5% from the same quarter last year [9] - Adjusting for foreign currency translation, net sales would have been $150.9 million, reflecting a 9% increase compared to the prior year [10] - Gross margin improved to 54.6%, up from 52.4% last year, representing an improvement of 220 basis points [48][49] - Adjusted EBITDA was $25.8 million, up 10% from the prior year [58] Business Line Data and Key Metrics Changes - Net sales for core maintenance products reached $139.3 million, a 6% increase despite currency headwinds [11] - Sales of WD-40 Multi-Use Product in Latin America increased by 47% compared to the prior year quarter [13] - Sales of WD-40 Specialist products were up 12% year-to-date, with strong growth in EIMEA and the Americas [32][33] Market Data and Key Metrics Changes - Total sales in the Americas increased 3% to $65.5 million, with a 4% increase in maintenance products [12] - EIMEA sales increased 10% to $59.6 million, with maintenance products up 11% [17] - Asia Pacific sales decreased 1% to $21 million, primarily due to lower sales of WD-40 Multi-Use product [20] Company Strategy and Development Direction - The company is focusing on geographic expansion and exploring alternative go-to-market strategies [27][28] - The Must-Win Battles include accelerating premiumization and driving WD-40 Specialist growth [30][32] - The company aims to achieve a gross margin of between 55% and 56% in fiscal year 2025, one year earlier than previously projected [51] Management's Comments on Operating Environment and Future Outlook - Management noted that geopolitical fragmentation is increasing, which may lead to new market strategies [27] - The company expects cost savings from supply chain optimization to offset potential tariff impacts [41][43] - Future guidance for fiscal year 2025 includes net sales growth projected between 6% and 11% [69] Other Important Information - The anticipated divestiture of the home care and cleaning business is progressing, with discussions ongoing with potential buyers [46] - Employee engagement index score increased to 94%, indicating a motivated workforce [39] - The company plans to maintain a disciplined capital allocation strategy, prioritizing dividends and share repurchases [64] Q&A Session Summary Question: Impact of tariffs on operations - Management indicated that the centralized supply chain mitigates tariff risks, with most manufacturing occurring in the U.S. [80] Question: Retaliatory tariffs from China - Management stated there is currently no material risk to operations in China due to localized supply chains [84] Question: Supply chain optimization details - Management explained that supply chain optimization involves a combination of dual and sole sourcing to create a diversified geographic footprint [86] Question: Timing for qualifying suppliers - Management noted that qualifying a new supplier can take 18 months to 2 years [90] Question: Operating income guidance - Management clarified that the operating income guidance remains unchanged due to foreign currency impacts [92] Question: Potential upside from foreign exchange fluctuations - Management acknowledged that recent trends in the euro could provide a tailwind if they hold [95]