WD-40 Company (NASDAQ:WDFC) Q1 2021 Earnings Conference Call January 7, 2021 5:00 PM ET Company Participants Wendy Kelley - Director, IR and Corporate Communications Garry Ridge - Chairman and CEO Steve Brass - President and COO Jay Rembolt - VP, Finance and CFO Conference Call Participants Linda Bolton Weiser - D.A. Davidson Daniel Rizzo - Jefferies Operator Ladies and gentlemen, thank you for standing by. Good day, and welcome to the WD-40 Company First Quarter Fiscal Year 2021 Earnings Conference Call. T ...

Q1 FY21 Earnings Results January 7, 2021 Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company, its subsidiaries and its legal entities. WD-40 Company markets maintenance products ("MP") under the WD-40®, 3-IN-ONE® and GT85® brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKE® product lines. WD-40 Company markets the following homecare and cleaning ("HCC ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2020 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 000-06936 Commission Company Name: WD 40 CO WD-40 COMPANY (Exact name of registrant as specified in its charter) Dela ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) WD-40 Company is a global marketing organization focused on maintenance and homecare products, with core growth driven by its flagship WD-40 Multi-Use Product - Sales are primarily from **maintenance products** sold globally and **homecare/cleaning products** mainly in North America, the U.K., and Australia[19](index=19&type=chunk) - Strategic initiatives focus on maximizing **WD-40 Multi-Use Product** sales through geographic expansion and growing the **WD-40 Specialist** line[20](index=20&type=chunk) - The **WD-40 Multi-Use Product** is the flagship, accounting for the majority of sales and driving principal growth[21](index=21&type=chunk)[25](index=25&type=chunk) - Finished product manufacturing is outsourced globally, while the company formulates and produces the **WD-40 concentrate** internally[36](index=36&type=chunk) Employee Distribution as of August 31, 2020 | Location | Number of Employees | | :--- | :--- | | **Total Worldwide** | **522** | | U.S. Parent Corporation | 198 | | U.K. Subsidiary | 224 | | China Subsidiary | 58 | | Australia Subsidiary | 20 | | Canada Subsidiary | 15 | | Malaysia Subsidiary | 7 | [Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from global economic conditions, foreign currency fluctuations, supply chain reliance, raw material price volatility, and intellectual property protection - Global economic conditions, including the **COVID-19 pandemic**, pose significant risks to consumer spending and supply chains[49](index=49&type=chunk)[50](index=50&type=chunk) - **60% of FY2020 net sales** were international, exposing the company to foreign currency exchange rate risks, with **44% of revenues** in non-USD currencies[52](index=52&type=chunk)[55](index=55&type=chunk) - Reliance on a limited number of **third-party contract manufacturers** and sole source suppliers creates business disruption risks[61](index=61&type=chunk) - Costs for **petroleum-based specialty chemicals** and aerosol cans are subject to significant price volatility, impacting gross margins[65](index=65&type=chunk) - The company relies on **trade secret protection** for the **WD-40 Multi-Use Product** formulation; loss of secrecy could adversely affect financial condition[75](index=75&type=chunk) - Implementation of a new information system for U.S., Canada, Australia, and Malaysia offices poses risks of operational and financial reporting interruptions[83](index=83&type=chunk)[84](index=84&type=chunk) [Unresolved Staff Comments](index=17&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - No unresolved staff comments are reported[107](index=107&type=chunk) [Properties](index=17&type=section&id=Item%202.%20Properties) The company owns offices in San Diego and Milton Keynes, while leasing various other regional offices globally - The company owns its main office in **San Diego, California** and an office building in **Milton Keynes, United Kingdom**[108](index=108&type=chunk)[109](index=109&type=chunk) - Leased properties include offices across the Americas, EMEA, and Asia-Pacific regions[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [Legal Proceedings](index=18&type=section&id=Item%203.%20Legal%20Proceedings) Details on legal proceedings are incorporated by reference from Note 13 of the consolidated financial statements - Details on legal proceedings are referenced in **Note 13 — Commitments and Contingencies**[112](index=112&type=chunk) [Mine Safety Disclosures](index=18&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable[113](index=113&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=19&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) WD-40 Company's common stock trades on NASDAQ, with a history of increased dividends and a suspended share buy-back plan - The company's common stock trades on the **NASDAQ Global Select Market** under symbol **WDFC**[123](index=123&type=chunk) - Quarterly cash dividend increased by **10%** to **$0.67 per share** in December 2019[124](index=124&type=chunk) - The company repurchased **92,583 shares** for **$16.8 million** in FY2020, but suspended its buy-back plan due to COVID-19, which expired August 31, 2020[126](index=126&type=chunk)[127](index=127&type=chunk) [Selected Financial Data](index=20&type=section&id=Item%206.%20Selected%20Financial%20Data) The company presents five years of selected financial data, showing FY2020 net sales of **$408.5 million** and net income of **$60.7 million** Selected Financial Data (in thousands, except per share amounts) | | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $408,498 | $423,350 | $408,518 | $380,506 | $380,670 | | **Gross profit** | $223,017 | $232,340 | $225,263 | $213,885 | $214,369 | | **Income from operations** | $77,220 | $82,382 | $78,604 | $75,909 | $71,348 | | **Net income** | $60,710 | $55,908 | $65,215 | $52,930 | $52,628 | | **Diluted EPS** | $4.40 | $4.02 | $4.64 | $3.72 | $3.64 | | **Dividends per share** | $2.62 | $2.37 | $2.11 | $1.89 | $1.64 | | **Total assets** | $362,637 | $302,662 | $317,059 | $369,717 | $339,668 | | **Long-term obligations** | $142,208 | $82,597 | $75,667 | $154,907 | $140,579 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2020 consolidated net sales decreased **4%** to **$408.5 million** due to COVID-19, while net income rose **9%** to **$60.7 million** due to a prior year tax charge FY 2020 Financial Highlights vs. FY 2019 | Metric | FY 2020 | FY 2019 | Change | Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | **Consolidated Net Sales** | $408.5M | $423.4M | -4% | -2% | | **Gross Margin** | 54.6% | 54.9% | -0.3 p.p. | N/A | | **Consolidated Net Income** | $60.7M | $55.9M | +9% | +12% | | **Diluted EPS** | $4.40 | $4.02 | +9% | N/A | - The **COVID-19 pandemic** negatively impacted FY2020 results, causing disruptions, though direct and e-commerce sales partially offset declines[136](index=136&type=chunk) - The company's 55/30/25 business model targets were not fully met in FY2020, with **55% gross margin**, **34% cost of doing business**, and **21% EBITDA**[180](index=180&type=chunk)[181](index=181&type=chunk) [Results of Operations (FY 2020 vs. FY 2019)](index=23&type=section&id=Results%20of%20Operations) FY2020 net sales decreased **4%** to **$408.5 million** due to COVID-19 impacts on EMEA and Asia-Pacific, while net income increased **9%** Net Sales by Segment (FY 2020 vs. FY 2019) | Segment | FY 2020 Sales | FY 2019 Sales | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Americas** | $200,493 | $193,972 | +$6,521 | +3% | | **EMEA** | $156,241 | $160,615 | -$4,374 | -3% | | **Asia-Pacific** | $51,764 | $68,763 | -$16,999 | -25% | | **Total** | **$408,498** | **$423,350** | **-$14,852** | **-4%** | - Americas sales grew **3%** (**4% in constant currency**), driven by strong **WD-40 Multi-Use Product** and **homecare product** demand[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - EMEA sales decreased **3%** (**1% in constant currency**), with direct markets growing **2%** but distributor markets falling **13%** due to COVID-19 lockdowns[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Asia-Pacific sales declined **25%** (**23% in constant currency**), significantly impacted by pandemic-related closures in distributor markets and China[154](index=154&type=chunk)[155](index=155&type=chunk] - Gross margin decreased from **54.9% to 54.6%** due to higher freight costs and unfavorable sales mix, partially offset by lower chemical costs and price increases[157](index=157&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk) - The effective tax rate decreased to **19.6%** in FY2020 from **30.8%** in FY2019, primarily due to an **$8.7 million** uncertain tax position in FY2019[176](index=176&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, with net cash from operations increasing to **$72.7 million** and an expanded **$150 million** revolving credit facility Summary of Cash Flows (in thousands) | Activity | FY 2020 | FY 2019 | FY 2018 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $72,664 | $62,851 | $64,822 | | **Net cash used in investing activities** | ($18,945) | ($12,680) | $71,207 | | **Net cash used in financing activities** | ($26,709) | ($69,009) | ($121,409) | | **Net increase (decrease) in cash** | $29,229 | ($21,633) | $11,784 | - Net cash from operations increased by **$9.8 million**, driven by higher net income and favorable working capital changes[190](index=190&type=chunk) - The revolving credit commitment was increased from **$100.0 million to $150.0 million** through an amended Credit Agreement[185](index=185&type=chunk) - The company drew **$80.0 million** on its credit line in March 2020 as a COVID-19 precaution, later repaying **$55.0 million**[186](index=186&type=chunk)[350](index=350&type=chunk) Contractual Obligations as of August 31, 2020 (in thousands) | Obligation | Total | < 1 year | 2-3 years | 4-5 years | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | | **Leases** | $9,402 | $2,073 | $2,867 | $2,041 | $2,421 | | **Borrowings** | $113,898 | $800 | $1,600 | $97,498 | $14,000 | | **Minimum purchase obligations** | $17,008 | $4,494 | $7,740 | $4,774 | - | | **Total** | **$140,308** | **$7,367** | **$12,207** | **$104,313** | **$16,421** | [Critical Accounting Policies](index=34&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant management judgment in revenue recognition, income taxes, and impairment assessment of intangible assets - Revenue recognition requires significant estimates for variable consideration; a **10% change** in accrual estimates would impact net sales by approximately **$0.9 million**[204](index=204&type=chunk)[207](index=207&type=chunk) - Accounting for income taxes involves judgment concerning deferred tax assets/liabilities, valuation allowances, and uncertain tax positions[208](index=208&type=chunk) - Definite-lived intangible assets are assessed for impairment when triggering events occur, with no impairments identified in fiscal years **2018, 2019, or 2020**[210](index=210&type=chunk)[211](index=211&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks including foreign currency fluctuations, commodity price volatility, and interest rate changes on its credit facility - Foreign currency risk exists as international subsidiaries operate in non-USD functional currencies; the U.K. subsidiary uses forward contracts for hedging[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - Commodity price risk is significant due to reliance on **petroleum-based specialty chemicals** and aerosol cans, with no current hedging in place[217](index=217&type=chunk) - Interest rate risk arises from the **$150.0 million** revolving credit facility, with rates based on Prime and LIBOR, and the company monitors LIBOR phase-out[218](index=218&type=chunk) [Financial Statements and Supplementary Data](index=37&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents consolidated financial statements and unaudited quarterly data for FY2020 and FY2019, showing quarterly fluctuations Unaudited Quarterly Financial Data (in thousands, except per share data) | Fiscal Year 2020 | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $98,556 | $100,049 | $98,247 | $111,646 | | **Gross profit** | $53,543 | $53,602 | $53,050 | $62,822 | | **Net Income** | $12,194 | $14,327 | $14,524 | $19,665 | | **Diluted EPS** | $0.88 | $1.04 | $1.06 | $1.42 | | **Fiscal Year 2019** | **1st Qtr** | **2nd Qtr** | **3rd Qtr** | **4th Qtr** | | **Net sales** | $101,282 | $101,335 | $113,989 | $106,744 | | **Gross profit** | $55,831 | $56,158 | $62,083 | $58,268 | | **Net Income** | $13,279 | $15,906 | $18,139 | $8,584 | | **Diluted EPS** | $0.95 | $1.14 | $1.30 | $0.63 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=37&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - No changes in or disagreements with accountants are reported[222](index=222&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and auditors concluded that disclosure controls and internal control over financial reporting were effective as of August 31, 2020 - The CEO and CFO concluded that disclosure controls and procedures were effective as of **August 31, 2020**[223](index=223&type=chunk) - Management concluded internal control over financial reporting was effective as of **August 31, 2020**, based on the **COSO 2013 framework**[224](index=224&type=chunk) - Internal control enhancements were made related to the adoption of new lease guidance under **ASC 842**[228](index=228&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=38&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the company's **Proxy Statement**[231](index=231&type=chunk) [Executive Compensation](index=38&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the company's **Proxy Statement**[232](index=232&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=39&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference, detailing outstanding equity awards and available securities for future issuance Equity Compensation Plan Information as of August 31, 2020 | Plan category | Number of securities to be issued upon exercise (a) | Weighted-average exercise price (b) | Number of securities remaining available for future issuance (c) | | :--- | :--- | :--- | :--- | | **Equity compensation plans approved by security holders** | 148,186 | $ - | 627,742 | | **Equity compensation plans not approved by security holders** | n/a | n/a | n/a | | **Total** | **148,186** | **$ -** | **627,742** | [Certain Relationships and Related Transactions, and Director Independence](index=39&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the company's **Proxy Statement**[234](index=234&type=chunk) [Principal Accountant Fees and Services](index=39&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the company's **Proxy Statement**[234](index=234&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=40&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section includes consolidated financial statements, the auditor's unqualified opinion, and identifies 'Rebates - Cooperative Marketing Program Accruals' as a critical audit matter - PricewaterhouseCoopers LLP issued unqualified opinions on consolidated financial statements and internal control over financial reporting as of **August 31, 2020**[247](index=247&type=chunk)[248](index=248&type=chunk) - Auditors identified **'Rebates - Cooperative Marketing Program Accruals'** as a Critical Audit Matter due to significant management judgment and audit effort required for estimation[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - The report lists numerous exhibits, including articles of incorporation, material contracts, and executive compensation plans[236](index=236&type=chunk)[237](index=237&type=chunk) [Form 10-K Summary](index=42&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - This item is not applicable[239](index=239&type=chunk)

WD-40 Company (NASDAQ:WDFC) Q4 2020 Earnings Conference Call October 20, 2020 5:00 PM ET Company Participants Wendy Kelley - Director, Investor Relations & Corporate Communications Garry Ridge - Chairman & Chief Executive Officer Jay Rembolt - Vice President & Chief Financial Officer Steve Brass - President & Chief Operating Officer Conference Call Participants Linda Bolton Weiser - D.A. Davidson Daniel Rizzo - Jefferies Operator Ladies and gentlemen, thank you for standing by. Good day, and welcome to the ...

Q4 & FY20 Earnings Results October 20, 2020 Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company, its subsidiaries and its legal entities. WD-40 Company markets maintenance products ("MP") under the WD-40®, 3-IN-ONE® and GT85® brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKE® product lines. WD-40 Company markets the following homecare and cleaning (" ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2020 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 000-06936 Commission Company Name: WD 40 CO WD-40 COMPANY (Exact name of registrant as specified in its charter) Delaware ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended February 29, 2020 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-06936 Commission Company Name: WD 40 CO WD-40 COMPANY (Exact name of registrant as specified in its charter) Delaware 95-1797918 (State or other jurisdiction of incorporation or organization) FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUA ...

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Q1 FY2020, detailing financial position, operations, and cash flows [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Summarizes key financial results for the quarter, including net sales, net income, total assets, and cash flow from operations Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Nov 30, 2019 (in thousands) | Aug 31, 2019 (in thousands) | | :--- | :--- | :--- | | **Total current assets** | $149,224 | $147,995 | | **Total assets** | $317,491 | $302,662 | | **Total current liabilities** | $81,020 | $74,590 | | **Total liabilities** | $171,499 | $157,187 | | **Total shareholders' equity** | $145,992 | $145,475 | Condensed Consolidated Statement of Operations (in thousands, except per share amounts) | Metric | Three Months Ended Nov 30, 2019 (in thousands) | Three Months Ended Nov 30, 2018 (in thousands) | | :--- | :--- | :--- | | Net sales | $98,556 | $101,282 | | Gross profit | $53,543 | $55,831 | | Income from operations | $14,704 | $16,401 | | Net income | $12,194 | $13,279 | | Diluted EPS | $0.88 | $0.95 | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | Three Months Ended Nov 30, 2019 (in thousands) | Three Months Ended Nov 30, 2018 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $15,206 | $9,009 | | Net cash used in investing activities | $(5,770) | $(1,234) | | Net cash used in financing activities | $(8,520) | $(24,148) | | Net increase (decrease) in cash | $1,447 | $(17,292) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed disclosures on accounting policies, lease standard adoption, debt, revenue disaggregation, and dividend changes - The company adopted the new lease standard ASC 842 on September 1, 2019. Upon adoption, total assets increased by **$9.0 million** and total liabilities increased by **$9.2 million**, with no material impact on retained earnings, operations, or cash flows[37](index=37&type=chunk)[47](index=47&type=chunk) - As of November 30, 2019, the company had total borrowings of **$90.2 million**, consisting of a revolving credit facility and Series A Notes. The company was in compliance with all debt covenants[63](index=63&type=chunk)[65](index=65&type=chunk) Net Sales by Product Group (in thousands) | Product Group | Three Months Ended Nov 30, 2019 (in thousands) | Three Months Ended Nov 30, 2018 (in thousands) | | :--- | :--- | :--- | | Maintenance products | $89,670 | $92,468 | | Homecare and cleaning products | $8,886 | $8,814 | | **Total** | **$98,556** | **$101,282** | Net Sales by Segment (in thousands) | Segment | Three Months Ended Nov 30, 2019 (in thousands) | Three Months Ended Nov 30, 2018 (in thousands) | | :--- | :--- | :--- | | Americas | $46,736 | $47,791 | | EMEA | $39,245 | $38,745 | | Asia-Pacific | $12,575 | $14,746 | | **Total** | **$98,556** | **$101,282** | - On December 10, 2019, the Board of Directors approved a **10% increase** in the regular quarterly cash dividend, from **$0.61 to $0.67 per share**, payable on January 31, 2020[97](index=97&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 FY2020 financial performance, analyzing sales, income, gross margin, expenses, liquidity, and non-GAAP measures [Overview](index=22&type=section&id=Overview) Provides a high-level summary of the quarter's performance, including sales, income, EPS, and share repurchases - Consolidated net sales decreased by **$2.7 million** in Q1 2020. Unfavorable foreign currency exchange rates had a negative impact of **$2.2 million**, meaning sales would have decreased by only **$0.5 million** on a constant currency basis[108](index=108&type=chunk) - Consolidated net income decreased by **$1.1 million (8%)**, and diluted EPS fell to **$0.88** from **$0.95** in the prior-year period[108](index=108&type=chunk) - The company repurchased **26,800 shares** for a total cost of **$5.0 million** during the three months ended November 30, 2019[108](index=108&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Provides detailed analysis of operational performance, including net sales by segment, gross margin fluctuations, and key drivers of change Net Sales by Segment (in thousands) | Segment | Q1 2020 (in thousands) | Q1 2019 (in thousands) | Change ($ in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Americas | $46,736 | $47,791 | $(1,055) | (2)% | | EMEA | $39,245 | $38,745 | $500 | 1% | | Asia-Pacific | $12,575 | $14,746 | $(2,171) | (15)% | | **Total** | **$98,556** | **$101,282** | **$(2,726)** | **(3)%** | - Americas sales decreased **2%**, mainly due to lower sales of WD-40 Specialist in the U.S. resulting from a holiday gift pack promotion in the prior year that was not repeated[112](index=112&type=chunk)[113](index=113&type=chunk) - EMEA sales grew **1%**, but were unfavorably impacted by foreign currency. On a constant currency basis, sales would have increased by **6%**[118](index=118&type=chunk) - Asia-Pacific sales fell **15% (13% in constant currency)**, primarily due to the timing of customer orders in distributor markets and slowed market conditions in China[122](index=122&type=chunk)[123](index=123&type=chunk) - Gross margin decreased from **55.1% to 54.3%**. Key negative factors included unfavorable sales mix (**0.7 ppt**) and higher warehousing/freight costs (**0.7 ppt**). This was partially offset by sales price increases in EMEA (**0.8 ppt**)[125](index=125&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk) [Performance Measures and Non-GAAP Reconciliations](index=31&type=section&id=Performance%20Measures%20and%20Non-GAAP%20Reconciliations) Discusses the company's 55/30/25 business model and provides reconciliations for non-GAAP performance measures like EBITDA Performance Measure Results | Measure | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Gross margin - GAAP | 54% | 55% | | Cost of doing business % of net sales - non-GAAP | 38% | 37% | | EBITDA % of net sales - non-GAAP | 17% | 18% | EBITDA Reconciliation (in thousands) | Line Item | Q1 2020 (in thousands) | Q1 2019 (in thousands) | | :--- | :--- | :--- | | Net income - GAAP | $12,194 | $13,279 | | Provision for income taxes | 2,098 | 2,839 | | Interest income | (25) | (51) | | Interest expense | 442 | 710 | | Amortization of definite-lived intangible assets | 650 | 733 | | Depreciation | 1,307 | 1,192 | | **EBITDA** | **$16,666** | **$18,702** | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's liquidity and capital resources, detailing cash flow from operating, investing, and financing activities - Net cash provided by operating activities increased to **$15.2 million** for Q1 2020, up from **$9.0 million** in Q1 2019, primarily due to favorable changes in working capital, particularly trade accounts receivable[152](index=152&type=chunk)[158](index=158&type=chunk) - Net cash used in investing activities increased by **$4.5 million** to **$5.8 million**, mainly due to renovations and equipping of the new office building in Milton Keynes, England[159](index=159&type=chunk) - Net cash used in financing activities decreased by **$15.6 million** to **$8.5 million**, primarily due to a **$12.9 million** increase in proceeds from the autoborrow agreement and a **$1.9 million** reduction in treasury stock purchases[160](index=160&type=chunk) - As of November 30, 2019, the company was in compliance with all debt covenants, including a consolidated leverage ratio not to exceed **three to one** and an interest coverage ratio not less than **three to one**[154](index=154&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Incorporates by reference market risk disclosures from the company's Annual Report on Form 10-K for FY2019 - Information regarding quantitative and qualitative disclosures about market risk is incorporated by reference from the company's Annual Report on Form 10-K for the fiscal year ended August 31, 2019[173](index=173&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective, with enhancements for new lease accounting standard adoption - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of November 30, 2019[174](index=174&type=chunk) - In connection with the adoption of the new lease guidance (ASC 842), the company made enhancements to its internal controls over financial reporting and procedures related to lease accounting[175](index=175&type=chunk) [PART II — OTHER INFORMATION](index=36&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal claims, none expected to have a material adverse financial impact - As of November 30, 2019, the company believes that no pending claims will result in a probable loss or have a materially adverse impact on its financial condition, results of operations, or cash flows[85](index=85&type=chunk)[179](index=179&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes in risk factors were reported from the Annual Report on Form 10-K for FY2019 - No material changes in risk factors were reported from those disclosed in the Annual Report on Form 10-K for the fiscal year ended August 31, 2019[180](index=180&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the company's share repurchase activities, including shares bought back and remaining authorization under the plan Share Repurchases (Q1 FY2020) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | September 2019 | 10,000 | $183.95 | | October 2019 | 8,500 | $183.98 | | November 2019 | 8,300 | $187.07 | | **Total** | **26,800** | **$184.92** | - The company is authorized to acquire up to **$75.0 million** of its outstanding shares under a plan effective from September 1, 2018, through August 31, 2020. As of November 30, 2019, approximately **$40.4 million** remained available for repurchase under the plan[181](index=181&type=chunk)[183](index=183&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including certifications and XBRL data files

[FORM 10-K General Information](index=1&type=section&id=FORM%2010-K%20General%20Information) This section provides general filing information for WD-40 Company's Annual Report on Form 10-K, detailing its issuer status, common stock trading symbol, and outstanding shares [Filing Information](index=1&type=section&id=Filing%20Information) This section details WD-40 Company's Form 10-K filing, confirming its well-known seasoned issuer and large accelerated filer status, and listing common stock information - **WD-40 Company (WDFC)** is a well-known seasoned issuer and a large accelerated filer[3](index=3&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) Filing Information Table | Metric | Value | | :--- | :--- | | Common Stock Trading Symbol | WDFC | | Exchange | NASDAQ | | Voting Stock Market Value (as of Feb 28, 2019) | $2,409,711,298 | | Common Stock Outstanding (as of Oct 17, 2019) | 13,703,661 shares | [Documents Incorporated by Reference](index=2&type=section&id=Documents%20Incorporated%20by%20Reference) This section indicates that the Proxy Statement for the annual meeting of stockholders on December 10, 2019, is incorporated by reference into Part III, Items 10 through 14 of this Annual Report on Form 10-K - The Proxy Statement for the December 10, 2019 annual meeting is incorporated by reference into Part III, Items 10-14 of this 10-K report[9](index=9&type=chunk) [PART I](index=4&type=section&id=PART%20I) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section outlines the company's forward-looking statements, which reflect current views on future events and financial performance, including growth expectations, spending levels, input costs, product innovation, tax rates, and foreign currency exchange rates - The report contains forward-looking statements regarding future financial and operating results, including growth expectations for maintenance products, promotional and advertising spending, input costs, product innovation, tax rates, and foreign currency exchange rates[13](index=13&type=chunk)[14](index=14&type=chunk) - Actual events or results may differ materially from projections due to various factors, including those detailed in Item 1A (Risk Factors)[15](index=15&type=chunk) [Item 1. Business](index=4&type=section&id=Item%201.%20Business) WD-40 Company is a global marketing organization founded in 1953, headquartered in San Diego, California, focused on developing and selling maintenance and homecare products - **WD-40 Company** is a global marketing organization, founded in **1953**, selling maintenance and homecare products in over **176 countries**[16](index=16&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Key strategic initiatives include maximizing WD-40 Multi-Use Product sales through geographic expansion and new delivery systems, growing the WD-40 Specialist line, broadening product/revenue base, attracting talent, and operating with excellence[20](index=20&type=chunk) [Overview](index=4&type=section&id=Overview) The company's primary growth driver is expanding the reach of WD-40 Multi-Use Product to new global users, with innovation crucial for long-term brand growth - The Company's primary growth driver is expanding the reach of **WD-40 Multi-Use Product** to new global users[21](index=21&type=chunk) - Innovation and renovation of products, packaging, and delivery systems are crucial for long-term brand growth[21](index=21&type=chunk) - Homecare and cleaning products are considered 'harvest brands,' providing returns but becoming a smaller part of the business as maintenance product sales grow[23](index=23&type=chunk) [Products](index=5&type=section&id=Products) [Maintenance Products](index=5&type=section&id=Maintenance%20Products) The company's maintenance product portfolio includes the signature WD-40 Multi-Use Product, WD-40 Specialist, WD-40 Bike, 3-IN-ONE, and GT85 brands - The **WD-40 Multi-Use Product** is the signature product and accounts for a significant majority of the Company's sales, sold worldwide through various retail and industrial channels[25](index=25&type=chunk) - The **WD-40 Specialist** product line offers professional-grade specialty maintenance products (penetrants, degreasers, lubricants, etc.) aimed at professionals and existing WD-40 users, primarily sold in the U.S., Europe, and parts of Canada, Latin America, Australia, and Asia[26](index=26&type=chunk) - The **WD-40 Bike** product line, launched in 2013-2016, provides comprehensive bicycle maintenance products for cyclists and mechanics, with expanding distribution[27](index=27&type=chunk) - Other maintenance brands include **3-IN-ONE** (multi-purpose drip oil, professional line, RVcare, Garage Door Lubricant) and **GT85** (multi-purpose bike maintenance, acquired in 2014, sold primarily in the U.K.)[28](index=28&type=chunk)[29](index=29&type=chunk) [Homecare and Cleaning Products](index=6&type=section&id=Homecare%20and%20Cleaning%20Products) The homecare and cleaning product portfolio includes well-known brands such as 2000 Flushes, Spot Shot, Carpet Fresh, 1001, Lava/Solvol, and X-14 - The homecare and cleaning product portfolio includes well-known brands such as **2000 Flushes** (automatic toilet bowl cleaners, U.S. and Canada), **Spot Shot** (carpet stain remover, U.S., Canada, U.K. as 1001), **Carpet Fresh** (room and rug deodorizers, U.S., U.K. as 1001, Australia as No Vac)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Other brands include **1001** (carpet and household cleaners, U.K.), **Lava/Solvol** (heavy-duty hand cleaners, Lava in U.S., Solvol in Australia), and **X-14** (mildew stain remover, toilet bowl cleaner, U.S.)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Sales and Marketing](index=6&type=section&id=Sales%20and%20Marketing) Sales fluctuate due to new/lost distribution, product offerings, and promotional activities, which the Company manages as part of normal business operations - Sales do not show significant seasonality but fluctuate due to new/lost distribution, product offerings, and promotional activities[37](index=37&type=chunk) - The Company manages these fluctuations as part of normal business operations[37](index=37&type=chunk) [Manufacturing](index=6&type=section&id=Manufacturing) Finished product manufacturing is outsourced globally, while the Company formulates and manufactures concentrate for WD-40 products at its own facilities and through third-party contract manufacturers - Finished product manufacturing is outsourced to third-party contract manufacturers globally (U.S., Canada, Mexico, Brazil, Argentina, Columbia, U.K., Italy, Australia, China, South Korea, India)[38](index=38&type=chunk) - The Company formulates and manufactures concentrate for WD-40 products at its own facilities and through third-party contract manufacturers[38](index=38&type=chunk) - Supply needs are communicated via orders and short-term projections (2-5 months), with minimum purchase obligations generally immaterial or well below historical volumes[38](index=38&type=chunk) [Sources and Availability of Components and Raw Materials](index=7&type=section&id=Sources%20and%20Availability%20of%20Components%20and%20Raw%20Materials) The Company relies on a limited number of suppliers for key raw materials and components, which are subject to volatile price changes due to commodity markets - The Company relies on a limited number of suppliers, including single or sole sources, for key raw materials and components[41](index=41&type=chunk) - Primary components like petroleum-based specialty chemicals and aerosol cans are subject to volatile price changes due to commodity markets[41](index=41&type=chunk) - Availability is expected to continue, but exposure to volatile prices remains[41](index=41&type=chunk) [Research and Development](index=7&type=section&id=Research%20and%20Development) The Company prioritizes innovation and renovation, particularly in its maintenance product group, through consumer research, product development, and improvement activities - The Company prioritizes innovation and renovation, particularly in its maintenance product group, through consumer research, product development, and improvement activities[42](index=42&type=chunk) - The R&D team partners with external resources and ensures compliance with regulatory requirements for product formulations[42](index=42&type=chunk) [Order Backlog](index=7&type=section&id=Order%20Backlog) Order backlog is not a significant factor in the Company's business - Order backlog is not a significant factor in the Company's business[43](index=43&type=chunk) [Competition](index=7&type=section&id=Competition) Markets for the Company's products are highly competitive, facing products from companies with greater financial resources, requiring intense advertising and promotional support - Markets for the Company's products, especially homecare and cleaning, are highly competitive, facing products from companies with greater financial resources[44](index=44&type=chunk) - Competition strategies include brand awareness, perceived value, product innovation, and multiple distribution channels[44](index=44&type=chunk) - New products require intense advertising and promotional support to gain and maintain market position[44](index=44&type=chunk) [Trademarks and Patents](index=7&type=section&id=Trademarks%20and%20Patents) The Company primarily relies on established trademarks, brand names, and marketing efforts, rather than patents, to compete effectively - The Company primarily relies on established trademarks, brand names, and marketing efforts, rather than patents, to compete effectively[45](index=45&type=chunk) - Key trademarks like **WD-40, 3-IN-ONE, Lava, Solvol, X-14, 2000 Flushes, Carpet Fresh, No Vac, Spot Shot, GT85, and 1001** are registered or pending globally[45](index=45&type=chunk) [Employees](index=7&type=section&id=Employees) The Company employs 495 people worldwide as of August 31, 2019, across its U.S. parent corporation and international subsidiaries Number of Employees (as of Aug 31, 2019) | Region | Number of Employees (as of Aug 31, 2019) | | :--- | :--- | | U.S. Parent Corporation | 183 | | U.K. Subsidiary | 214 | | China Subsidiary | 56 | | Australia Subsidiary | 20 | | Canada Subsidiary | 13 | | Malaysia Subsidiary | 7 | | WD-40 Manufacturing Company | 2 | | **Total Worldwide** | **495** | [Financial Information about Foreign and Domestic Operations](index=7&type=section&id=Financial%20Information%20about%20Foreign%20and%20Domestic%20Operations) Detailed financial information on foreign and domestic operations, including net sales by segment and long-lived assets by geography, is available in Note 16 of the consolidated financial statements - Detailed financial information on foreign and domestic operations, including net sales by segment and long-lived assets by geography, is available in Note 16 of the consolidated financial statements[47](index=47&type=chunk) [Item 1A. Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) This section details various risks that could adversely affect the Company's business, financial condition, and results of operations, spanning global operations, strategic execution, brand reputation, and supply chain dependencies - The Company faces substantial risks from global operations, including foreign currency exchange rate volatility (**42% of FY2019 revenues in non-USD currencies**), economic/political instability, and compliance challenges in foreign jurisdictions[51](index=51&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk) - Failure to successfully implement strategic initiatives, such as geographic expansion and product line growth, or to attract and retain talented people, could negatively impact financial results[58](index=58&type=chunk) - The success and reputation of leading brands, especially **WD-40**, are critical; damage due to marketing failures, quality issues, or negative publicity could significantly impact the business[59](index=59&type=chunk) [Global Operations and Foreign Currency Risk](index=8&type=section&id=Global%20Operations%20and%20Foreign%20Currency%20Risk) Approximately 63% of consolidated net sales in fiscal year 2019 were from outside the U.S., exposing the Company to risks like economic/political instability, compliance challenges, tax complexity, and foreign currency fluctuations - Approximately **63% of consolidated net sales in fiscal year 2019** were from outside the U.S., exposing the Company to risks like economic/political instability, compliance challenges, tax complexity, and foreign currency fluctuations[51](index=51&type=chunk)[55](index=55&type=chunk) - **42% of FY2019 revenues** were generated in non-U.S. dollar currencies, making financial results vulnerable to foreign currency weakening against the U.S. Dollar, despite hedging efforts[53](index=53&type=chunk) - Brexit has caused and may continue to cause volatility in Pound Sterling and Euro, potentially negatively impacting reported results, and could alter European business operations[54](index=54&type=chunk)[56](index=56&type=chunk) - Increased complexities and risks in emerging markets (e.g., China, Russia) include potential for fraud/corruption and evolving privacy laws (e.g., GDPR), with non-compliance leading to significant penalties[57](index=57&type=chunk) [Strategic Initiatives Implementation Risk](index=9&type=section&id=Strategic%20Initiatives%20Implementation%20Risk) There is no assurance that the Company's five core strategic initiatives will be successfully implemented or achieve intended results, with talent management being crucial for future performance - There is no assurance that the Company's five core strategic initiatives (maximizing WD-40 Multi-Use Product sales, growing WD-40 Specialist, broadening product/revenue base, talent development, operational excellence) will be successfully implemented or achieve intended results[58](index=58&type=chunk) - Maintaining high employee engagement, retaining key personnel, and effective succession planning are crucial for future performance; loss of key employees could have a material adverse effect[58](index=58&type=chunk) [Brand Reputation Erosion Risk](index=9&type=section&id=Brand%20Reputation%20Erosion%20Risk) The Company's financial success is directly dependent on the success and reputation of its brands, especially WD-40, which can be damaged by ineffective marketing, product failures, or negative publicity - The Company's financial success is directly dependent on the success and reputation of its brands, especially **WD-40**[59](index=59&type=chunk) - Brand reputation can suffer from ineffective marketing, product development failures, competitive pressures, or real/perceived quality/safety issues (e.g., product contamination, regulatory non-compliance, recalls)[59](index=59&type=chunk) - Negative claims or publicity, regardless of accuracy, could damage the Company's reputation and brand image[59](index=59&type=chunk) [Sales Unit Volume Growth Challenges](index=9&type=section&id=Sales%20Unit%20Volume%20Growth%20Challenges) Achieving sales volume growth is difficult in developed markets and depends on executing strategic initiatives, driving innovation, and capturing market share, while price increases may slow volume - Achieving sales volume growth is difficult in developed markets and depends on executing strategic initiatives, driving growth in new/existing markets through innovation, and capturing market share[60](index=60&type=chunk)[61](index=61&type=chunk) - Sales price increases (in response to rising costs) may slow or decrease volume in the short term[61](index=61&type=chunk) - Challenges in online retail channels (e.g., demand for non-flammable products) and changes in customer strategies (e.g., shelf simplification, product discontinuation) could negatively impact sales[61](index=61&type=chunk) [Reliance on Third-Party Manufacturers and Suppliers](index=10&type=section&id=Reliance%20on%20Third-Party%20Manufacturers%20and%20Suppliers) The Company relies on a limited number of third-party contract manufacturers, logistics providers, and suppliers, including single or sole sources, for critical raw materials and components - The Company relies on a limited number of third-party contract manufacturers, logistics providers, and suppliers, including single or sole sources, for critical raw materials and components[62](index=62&type=chunk) - Disruptions could occur if terms of business change, relationships are not maintained, or these third parties experience financial difficulties, potentially affecting production and financial results[62](index=62&type=chunk) [Cost Increases and Cost Volatility](index=10&type=section&id=Cost%20Increases%20and%20Volatility) Increases or volatility in costs of finished goods, components, raw materials (especially petroleum-based chemicals and aerosol cans), and transportation could harm financial condition - Increases or volatility in costs of finished goods, components, raw materials (especially petroleum-based chemicals and aerosol cans), and transportation could harm financial condition[63](index=63&type=chunk) - If price increases cannot offset cost increases, gross margins and operating results will be negatively impacted[63](index=63&type=chunk) - Significant fluctuations in raw material costs, which are principal contributors to cost of goods sold, could materially impact gross margins[63](index=63&type=chunk) [Global Economic Conditions](index=10&type=section&id=Global%20Economic%20Conditions) A weakening global economy, reduced industrial output, or decreased consumer spending/confidence could delay or significantly decrease product purchases, impacting financial results - A weakening global economy, reduced industrial output, or decreased consumer spending/confidence could delay or significantly decrease product purchases[64](index=64&type=chunk) - During economic uncertainty, consumers may shift to lower-priced or non-branded products, and competitors may increase promotions, negatively impacting the Company's financial results[65](index=65&type=chunk) - Adverse conditions could also impair customers' ability to pay and suppliers' ability to provide goods, increasing doubtful accounts and disrupting supply[66](index=66&type=chunk) [Government Laws and Regulations](index=11&type=section&id=Government%20Laws%20and%20Regulations) The Company must comply with extensive federal, state, and foreign laws regarding manufacturing, chemical composition, packaging, storage, distribution, and labeling of products, with non-compliance leading to penalties - The Company must comply with extensive federal, state, and foreign laws regarding manufacturing, chemical composition, packaging, storage, distribution, and labeling of products[67](index=67&type=chunk) - Non-compliance could lead to fines, product recalls, increased costs, or inability to obtain raw materials, potentially impacting financial condition[67](index=67&type=chunk) - Regulatory changes may require altering product chemical compositions, potentially affecting efficacy or marketability, and evolving privacy laws (e.g., GDPR) impose strict regulations[68](index=68&type=chunk)[72](index=72&type=chunk) - The Company is subject to Dodd-Frank Section 1502 regarding 'conflict minerals' and environmental laws, with potential for increased expenditures or liabilities[69](index=69&type=chunk)[70](index=70&type=chunk) [Intellectual Property Rights](index=12&type=section&id=Intellectual%20Property%20Rights) The Company relies on trademark, trade secret, patent, and copyright laws to protect its intellectual property, but cannot assure successful assertion or protection, facing risks from loss of trade secret protection or infringement - The Company relies on trademark, trade secret, patent, and copyright laws to protect its intellectual property, but cannot assure successful assertion or protection[74](index=74&type=chunk) - Loss of trade secret protection (especially for **WD-40 Multi-Use Product** formulation) or inability to protect IP in foreign countries could adversely affect financial condition[74](index=74&type=chunk) - Infringement by others, including counterfeiting, could dilute brand value and harm sales; conversely, infringing on others' IP could result in substantial payments or cessation of use[74](index=74&type=chunk)[75](index=75&type=chunk) [Operating Results and Stock Price Volatility](index=12&type=section&id=Operating%20Results%20and%20Stock%20Price%20Volatility) The Company cannot guarantee its operating results and financial performance will meet expectations, and failure to do so could cause stock price decline, influenced by securities analysts' reports - The Company cannot guarantee its operating results and financial performance will meet expectations, and failure to do so could cause stock price decline[76](index=76&type=chunk) - Stock price is influenced by securities analysts' reports, over which the Company has no control[76](index=76&type=chunk) - Sales volume growth can strain management resources and financial controls, and if actual revenues fall short of expectations, operating margins may be adversely affected[78](index=78&type=chunk) [Information Systems and Cybersecurity Risks](index=13&type=section&id=Information%20Systems%20and%20Cybersecurity%20Risks) Reliance on information technology systems, including third-party providers, exposes the Company to cybersecurity threats, with system failures or data loss potentially disrupting operations and financial reporting - Reliance on information technology systems, including third-party providers, exposes the Company to cybersecurity threats (e.g., cyberattacks, ransomware, data breaches)[79](index=79&type=chunk) - System failures or data loss could disrupt operations, transaction processing, and financial reporting, despite business continuity plans[80](index=80&type=chunk) - The U.S. office uses a market-specific application with potentially limited support, posing a risk if the provider ceases operations or support[81](index=81&type=chunk) [Competition](index=13&type=section&id=Competition) The Company faces competition from similar and alternative products, including those from major national/multinational companies, and counterfeit reproductions, requiring substantial advertising and promotional expenditures - The Company faces competition from similar and alternative products, including those from major national/multinational companies, and counterfeit reproductions, especially in emerging markets[82](index=82&type=chunk) - Competition is based on product performance, brand recognition, price, quality, and consumer benefits, requiring substantial advertising and promotional expenditures[83](index=83&type=chunk) - Competitors with greater financial resources may outspend the Company on marketing, introduce products faster, or respond more effectively to market changes, potentially leading to reduced profit margins or market share loss[84](index=84&type=chunk)[85](index=85&type=chunk) [Dependence on Key Customers](index=14&type=section&id=Dependence%20on%20Key%20Customers) The Company's sales are concentrated among a limited number of large chain stores in the retail industry, making it vulnerable to changes in customer strategies or loss of significant customers - The Company's sales are concentrated among a limited number of large chain stores in the retail industry, although no single customer accounted for over **10% of consolidated net sales** in FY2019[87](index=87&type=chunk) - Changes in key customer strategies (e.g., shelf simplification, private labels, reduced brands) or loss of significant customers could materially harm sales and brand values[87](index=87&type=chunk)[88](index=88&type=chunk) - Large customers may demand price reductions or promotional concessions, impacting profit margins[87](index=87&type=chunk) [New Product Development and Line Extensions](index=14&type=section&id=New%20Product%20Development%20and%20Line%20Extensions) Future growth depends on successfully developing and introducing new products and line extensions, which requires substantial R&D and marketing investment, with inherent risks of delays or market acceptance failures - Future growth depends on successfully developing and introducing new products and line extensions, which requires substantial R&D and marketing investment[89](index=89&type=chunk) - Inherent risks include development/launch delays, performance issues, changing regulations, and raw material availability, potentially leading to market acceptance failures or increased costs[89](index=89&type=chunk) [Marketing Distributor Relationships](index=14&type=section&id=Marketing%20Distributor%20Relationships) Changes or termination of marketing distributor relationships, particularly in countries without direct Company operations, could disrupt sales and potentially incur substantial termination payments - Changes or termination of marketing distributor relationships, particularly in countries without direct Company operations, could disrupt sales until a suitable replacement is found[90](index=90&type=chunk) - Local laws in some countries may require substantial payments to terminate distributor relationships, adversely affecting financial condition[91](index=91&type=chunk) [Goodwill and Intangible Assets Impairment Risk](index=15&type=section&id=Goodwill%20and%20Intangible%20Assets%20Impairment%20Risk) Goodwill and definite-lived intangible assets are subject to impairment risk, assessed annually or when circumstances indicate impairment, requiring significant management judgment and potentially leading to charges - Goodwill and definite-lived intangible assets are subject to impairment risk, assessed annually or when circumstances indicate impairment[92](index=92&type=chunk) - Impairment assessment requires significant management judgment on estimates like macroeconomic conditions, growth rates, and expense levels[93](index=93&type=chunk) - A significant impairment charge could negatively impact financial condition and results of operations[93](index=93&type=chunk) - Divestitures of assets or brands could also negatively impact profitability and cash flows, potentially requiring impairment charges[94](index=94&type=chunk) [Product Liability Claims and Litigation](index=15&type=section&id=Product%20Liability%20Claims%20and%20Litigation) Product use may expose the Company to liability claims, potentially leading to negative publicity, harm to sales, and losses exceeding insurance limits or arising from uninsured circumstances - Product use may expose the Company to liability claims (e.g., contaminants, inadequate instructions/warnings), potentially leading to negative publicity and harm to sales[95](index=95&type=chunk) - Losses could exceed insurance limits or arise from uninsured circumstances; product recalls due to defects could also result in adverse publicity and significant expenses[95](index=95&type=chunk) - Association with competitor products causing harm could lead to unwarranted legal actions and defense costs[96](index=96&type=chunk) [Income Tax Matters](index=15&type=section&id=Income%20Tax%20Matters) Significant judgment is required for income tax rates and uncertain tax positions, with resolutions of tax audits impacting the effective tax rate and cash flow, and changes in U.S. tax laws creating uncertainty - Significant judgment is required for income tax rates and uncertain tax positions; resolutions of tax audits can impact the effective tax rate and cash flow[97](index=97&type=chunk)[98](index=98&type=chunk) - The **Tax Cuts and Jobs Act (2017)** significantly changed U.S. tax law, including a one-time 'toll tax' on unremitted foreign earnings, and the Company reevaluated its indefinite reinvestment assertion[99](index=99&type=chunk) - Uncertainty regarding future regulations and potential changes in U.S. tax laws could materially affect financial results[100](index=100&type=chunk) [Business Development Activities](index=16&type=section&id=Business%20Development%20Activities) Growth through acquisitions, joint ventures, or strategic partnerships carries risks, including difficulties in integration, diversion of management attention, and potential for debt or dilutive equity issuances - Growth through acquisitions, joint ventures, or strategic partnerships carries risks, including difficulties in integration, diversion of management attention, and loss of key employees[101](index=101&type=chunk) - Such activities may not be profitable initially or justify investments, and could result in debt, dilutive equity issuances, contingent liabilities, or increased operating expenses[101](index=101&type=chunk)[102](index=102&type=chunk) - Diminished economic benefits from business development could lead to goodwill or intangible asset impairments[102](index=102&type=chunk) [Sufficiency of Cash for Indebtedness and Dividends](index=16&type=section&id=Sufficiency%20of%20Cash%20for%20Indebtedness%20and%20Dividends) The Company's ability to service debt and pay cash dividends depends on operating income and compliance with financial covenants, with future debt or insufficient financing potentially impacting dividend payments - The Company's ability to service debt (fixed rate senior notes, revolving credit facility) and pay cash dividends depends on operating income and compliance with financial covenants[103](index=103&type=chunk) - Future substantial debt for acquisitions or share repurchases, or insufficient financing, could require reducing, suspending, or eliminating dividend payments[104](index=104&type=chunk) [Item 1B. Unresolved Staff Comments](index=17&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments from the SEC - There are no unresolved staff comments[106](index=106&type=chunk) [Item 2. Properties](index=17&type=section&id=Item%202.%20Properties) The Company's properties include owned and leased office spaces and plant facilities across its Americas, EMEA, and Asia-Pacific segments, with a significant new office building under renovation in the U.K. for its EMEA operations [Americas](index=17&type=section&id=Americas) The Americas segment includes an owned office in San Diego, California, and leased regional sales, R&D, and office spaces in Miami, Pine Brook, and Toronto - The Company owns and occupies an office in San Diego, California, housing corporate and Americas segment employees[107](index=107&type=chunk) - Leased properties include a regional sales office in Miami, Florida, an R&D office in Pine Brook, New Jersey, and office space in Toronto, Ontario, Canada[107](index=107&type=chunk) [EMEA](index=17&type=section&id=EMEA) The EMEA segment includes a newly purchased office building and land in Milton Keynes, U.K., under renovation, with the current location remaining a plant facility, and leased branch offices across Europe - A new office building and land were purchased in Milton Keynes, U.K., in February 2018, with renovations expected to complete in **Q1 FY2020** for EMEA employees[108](index=108&type=chunk) - The current Milton Keynes location will continue as a plant facility[108](index=108&type=chunk) - Branch offices are leased in Germany, France, Italy, Spain, Portugal, and the Netherlands[108](index=108&type=chunk) [Asia-Pacific](index=17&type=section&id=Asia-Pacific) The Asia-Pacific segment operates from leased office spaces in Epping, New South Wales, Australia; Shanghai, China; and Kuala Lumpur, Malaysia - Leased office spaces are located in Epping, New South Wales, Australia; Shanghai, China; and Kuala Lumpur, Malaysia[109](index=109&type=chunk) [Item 3. Legal Proceedings](index=17&type=section&id=Item%203.%20Legal%20Proceedings) This section refers to Note 12 — Commitments and Contingencies for information regarding legal proceedings - Information on legal proceedings is incorporated by reference from Note 12 — Commitments and Contingencies in Item 15[110](index=110&type=chunk) [Item 4. Mine Safety Disclosures](index=17&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[110](index=110&type=chunk) [Executive Officers of the Registrant](index=17&type=section&id=Executive%20Officers%20of%20the%20Registrant) This section lists the executive officers of WD-40 Company as of August 31, 2019, including their ages, year elected to current position, and titles, along with brief professional backgrounds Executive Officers of the Registrant | Name | Age | Year Elected to Current Position | Title | | :--- | :--- | :--- | :--- | | Garry O. Ridge | 63 | 1997 | Chief Executive Officer | | Steven A. Brass | 53 | 2019 | President and Chief Operating Officer | | Jay W. Rembolt | 68 | 2008 | Vice President, Finance, Treasurer and Chief Financial Officer | | Patricia Q. Olsem | 53 | 2019 | Division President, The Americas | | William B. Noble | 61 | 1996 | Managing Director, EMEA | | Geoffrey J. Holdsworth | 57 | 1997 | Managing Director, Asia-Pacific | | Stanley A. Sewitch | 66 | 2012 | Vice President, Global Organization Development | | Richard T. Clampitt | 64 | 2014 | Vice President, General Counsel and Corporate Secretary | - Executive officers hold office at the discretion of the Board of Directors[117](index=117&type=chunk) [PART II](index=18&type=section&id=PART%20II) [Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=18&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section provides information on the Company's common stock market, dividend policy, and share repurchase activities, detailing the NASDAQ listing, outstanding shares, recent dividend increases, and the ongoing share buy-back plan [Market Information](index=18&type=section&id=Market%20Information) The Company's common stock trades on the NASDAQ Global Select Market under the symbol WDFC, with a closing price of $182.67 per share and 13,703,661 shares outstanding as of October 17, 2019 - The Company's common stock trades on the **NASDAQ Global Select Market** under the symbol **WDFC**[119](index=119&type=chunk) Market Information Table | Metric | Value | | :--- | :--- | | Closing Price (Oct 17, 2019) | $182.67 per share | | Shares Outstanding (Oct 17, 2019) | 13,703,661 shares | | Holders of Record (Oct 17, 2019) | Approximately 622 | [Dividends](index=18&type=section&id=Dividends) The Company has a history of paying regular quarterly cash dividends, with the Board increasing the quarterly dividend by 13% to $0.61 per share in December 2018 - The Company has a history of paying regular quarterly cash dividends[120](index=120&type=chunk) - In December 2018, the Board increased the quarterly dividend by **13% from $0.54 to $0.61 per share**[120](index=120&type=chunk) - A cash dividend of **$0.61 per share** was declared on October 8, 2019, payable on October 31, 2019[120](index=120&type=chunk) - Future dividend payments are subject to business performance, liquidity, capital needs, investment opportunities, and debt covenants[121](index=121&type=chunk) [Purchases of Equity Securities By the Issuer and Affiliated Purchasers](index=19&type=section&id=Purchases%20of%20Equity%20Securities%20By%20the%20Issuer%20and%20Affiliated%20Purchasers) A $75.0 million share buy-back plan was approved in June 2018, effective September 1, 2018, and authorized through August 31, 2020 - A **$75.0 million** share buy-back plan was approved in June 2018, effective September 1, 2018, and authorized through August 31, 2020[122](index=122&type=chunk) Share Repurchase Activity | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :--- | :--- | :--- | :--- | :--- | | Sep 1, 2018 - Aug 31, 2019 | 175,955 | $168.34 | 175,955 | $45,375,339 (as of Aug 31, 2019) | | June 1 - June 30, 2019 | 24,071 | $161.03 | 24,071 | $48,739,779 | | July 1 - July 31, 2019 | 14,700 | $166.97 | 14,700 | $46,285,053 | | August 1 - August 31, 2019 | 5,000 | $181.92 | 5,000 | $45,375,339 | | **Total (Q4 FY2019)** | **43,771** | **$165.41** | **43,771** | | - Purchases between June 1 and July 12, 2019, were executed under Rule 10b5-1 trading plans[124](index=124&type=chunk) [Item 6. Selected Financial Data](index=19&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents a five-year summary of selected financial data, including net sales, gross profit, operating income, net income, earnings per common share, dividends per share, total assets, and long-term obligations Selected Financial Data (in thousands, except per share amounts) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $423,350 | $408,518 | $380,506 | $380,670 | $378,150 | | Cost of products sold | $191,010 | $183,255 | $166,621 | $166,301 | $177,972 | | Gross profit | $232,340 | $225,263 | $213,885 | $214,369 | $200,178 | | Operating expenses | $149,958 | $146,659 | $137,976 | $143,021 | $134,788 | | Income from operations | $82,382 | $78,604 | $75,909 | $71,348 | $65,390 | | Interest and other (expense) income, net | $(1,612) | $(3,426) | $(1,287) | $1,441 | $(2,280) | | Income before income taxes | $80,770 | $75,178 | $74,622 | $72,789 | $63,110 | | Provision for income taxes | $24,862 | $9,963 | $21,692 | $20,161 | $18,303 | | Net income | $55,908 | $65,215 | $52,930 | $52,628 | $44,807 | | Earnings per common share: | | | | | | | Basic | $4.03 | $4.65 | $3.73 | $3.65 | $3.05 | | Diluted | $4.02 | $4.64 | $3.72 | $3.64 | $3.04 | | Dividends per share | $2.37 | $2.11 | $1.89 | $1.64 | $1.48 | | Weighted-average shares outstanding - diluted | 13,830 | 13,962 | 14,123 | 14,379 | 14,649 | | Total assets | $302,662 | $317,059 | $369,717 | $339,668 | $339,257 | | Long-term obligations | $82,597 | $75,667 | $154,907 | $140,579 | $133,427 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%