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What changed in WD 40 CO's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of WD 40 CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+332 added−358 removedSource: 10-K (2024-10-21) vs 10-K (2023-10-23)

Top changes in WD 40 CO's 2024 10-K

332 paragraphs added · 358 removed · 273 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCarpet Fresh ® – The Carpet Fresh brand is a line of room and rug deodorizers sold as powder and aerosol quick-dry foam products. These products are sold primarily through grocery, mass, and value retail channels as well as through online retailers in the U.K. and Australia.
Biggest changeThese products are sold primarily through grocery, mass, and value retail channels as well as through online retailers in the United Kingdom. Although Carpet Fresh brand products are also sold in the U.S., they are sold by a third party under a licensing agreement. In the U.K., these products are sold under the 1001 ® brand name.
We currently market and sell our products in more than 176 countries and territories worldwide primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers.
We currently market and sell our products in more than 176 countries and territories worldwide primarily through hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, warehouse club stores, farm supply, sport retailers, and independent bike dealers.
The WD-40 Multi-Use Product is sold worldwide in North, Central and South America, Asia, Australia, Europe, the Middle East and Africa. WD-40 Multi-Use Product has a wide variety of consumer uses in, for example, household, marine, automotive, construction, repair, sporting goods and gardening applications, in addition to numerous industrial applications.
The WD-40 Multi-Use Product is sold worldwide in North, Central and South America, Asia, Australia, Europe, India, the Middle East and Africa. WD-40 Multi-Use Product has a wide variety of consumer uses in, for example, household, marine, automotive, construction, repair, sporting goods and gardening applications, in addition to numerous industrial applications.
Our sales come from two product groups – maintenance products and homecare and cleaning products. Maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, the Middle East and Africa. Homecare and cleaning products are sold primarily in North America, the United Kingdom (“U.K.”) and Australia.
Our sales come from two product groups – maintenance products and homecare and cleaning products. Maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, India, the Middle East and Africa. Homecare and cleaning products are sold primarily in North America, the United Kingdom (“U.K.”) and Australia.
In addition to the commitments to purchase products from contract manufacturers described above, we may also enter into commitments with other manufacturers from time to time to purchase finished goods and components to support innovation and renovation initiatives and/or supply chain initiatives.
In addition to the commitments to purchase products from contract manufacturers described above, we may also enter into commitments with other manufacturers from time to time to purchase finished goods and components to support innovation and/or supply chain initiatives.
In addition to the drip oil line of products, the 3-IN-ONE brand also includes professional-grade aerosol maintenance products, such as 3-IN-ONE RVcare products, 3-IN-ONE Garage Door Lubricant and 3-IN-ONE Lock Dry Lube.
In addition to the drip oil line of products, the 3-IN-ONE brand also includes professional-grade aerosol specialty maintenance products, such as 3-IN-ONE RVcare products, 3-IN-ONE Garage Door Lubricant and 3-IN-ONE Lock Dry Lube.
Our Must-Win Battles include: 1. growing WD-40 Multi-Use Product sales through geographic expansion; 2. growing sales and gross margin through the premiumization of WD-40 Multi-Use Product; 3. growing the WD-40 Specialist ® product line through category leadership; and 1 Table of Contents 4. accelerating our capabilities in building our brand digitally and maximizing our global digital commerce presence.
Our Must-Win Battles include: 1. growing WD-40 Multi-Use Product sales through geographic expansion; 2. growing sales and gross margin through the premiumization of WD-40 Multi-Use Product; 3. growing the WD-40 Specialist product line through category leadership; and 4. accelerating our capabilities in building our brand digitally and maximizing our global digital commerce presence.
We have various products and product lines which we currently sell under the WD-40 Brand and they are as follows: WD-40® Multi-Use Product – The WD-40 Multi-Use Product is a market leader in many countries among multi-purpose maintenance products and is sold as an aerosol spray with various unique delivery systems, a non-aerosol trigger spray, a precision pen, and in liquid-bulk form through mass retail stores, hardware stores, automotive parts outlets, online retailers, warehouse club stores and industrial distributors and suppliers.
We have various products and product lines which we currently sell under the WD-40 Brand: WD-40® Multi-Use Product – The WD-40 Multi-Use Product is a market leader in many countries among multi-purpose maintenance products and is sold as an aerosol spray with various unique delivery systems, a non-aerosol trigger spray, a precision pen, and in liquid-bulk form through mass retail stores, hardware stores, automotive parts outlets, online retailers, warehouse club stores and industrial distributors and suppliers.
Financial Information about Foreign and Domestic Operations For detailed information about our foreign and domestic operations, including net sales by reportable segment and long-lived assets by geography, refer to Note 16 – Business Segments and Foreign Operations of the consolidated financial statements, included in Item 15 of this report.
Financial Information about Foreign and Domestic Operations For detailed information about our foreign and domestic operations, including net sales by reportable segment and long-lived assets by geography, refer to Note 17 – Business Segments and Foreign Operations of the consolidated financial statements, included in Item 15 of this report.
We are also focused on expanding our current brands in existing markets with new product development. Our research and development team supports new product development and current product improvement for our brands. Over the years, our research and development team has made an impact on most of our brands through our innovation activities.
We are also focused on expanding our current brands in existing markets with new product development. Our research and development team supports new product development and current product improvement for our brands. Over the years, our research and development team has made impacts on most of our brands through our innovation activities.
As a result, we took actions to increase prices with our customers to help mitigate some of these inflationary pressures. We also have and continue to implement cost savings initiatives to help mitigate those pressures. Our business results depend on the effective management and remedy of any supply disruptions.
As a result, we took actions to increase prices with our customers to help mitigate some of these inflationary pressures. We also implemented cost savings initiatives to mitigate those pressures. Our business results depend on the effective management and remedy of any supply disruptions.
Other service marks, trademarks, and tradenames referred to in this Annual Report on Form 10-K are the property of their respective 5 Table of Contents owners.
Other service marks, trademarks, and tradenames referred to in this Annual Report on Form 10-K are the property of their respective owners.
We see innovation and renovation as important factors to the long-term growth of our brands and product lines, and intend to continue to work on future products, product lines, product packaging, and product delivery systems, as well as promotional innovations and renovations to expand our product portfolio to help us grow.
We see innovation and renovation as important factors to the long-term growth and sustainability of our brands and product lines, and intend to continue to work on future products, product lines, product packaging, and product delivery systems, as well as promotional innovations and renovations to expand our product portfolio, build a more sustainable future, and to help us grow.
When or if a new product achieves consumer acceptance, ongoing advertising and promotional support may be required in order to maintain its relative market position. Trademarks and Patents We own a number of patents, but rely primarily upon our established trademarks, brand names and marketing efforts, including advertising and sales promotions, to compete effectively.
When a new product achieves consumer acceptance, ongoing advertising and promotional support may be required to maintain its relative market position. 5 Table of Contents Trademarks and Patents We own a number of patents, but primarily rely upon our established trademarks, brand names and marketing efforts, including advertising and sales promotions, to compete effectively.
We rely on the awareness of our brands among consumers, the value offered by those brands as perceived by consumers, product innovation and renovation and our multiple channel distributions as our primary strategies. New products typically encounter intense competition, which may require advertising and promotional support and activities.
We rely on the awareness of our brands among consumers, the value offered by those brands as perceived by consumers, product innovation and renovation and our multiple channel distributions as our primary strategies. New products and our entry into new markets typically encounter intense competition, which may require additional investments in advertising and promotional activities.
We also have the following additional brands which are included within our maintenance products group: 3-IN-ONE ® – The 3-IN-ONE brand consists of multi-purpose drip oil, specialty drip oils, and spray lubricant products, as well as other specialty maintenance products.
We also have the following additional brands which are included within our maintenance products group: 3-IN-ONE ® – The 3-IN-ONE brand consists of multi-purpose drip oil, specialty drip oils, and specialty aerosol maintenance products.
Our homecare and cleaning products, particularly those in the U.S. and the U.K., are considered harvest brands which continue to provide positive returns but are becoming a smaller part of the business as sales of the maintenance products grow with the execution of our four Must Win Battles within our strategic framework.
Our homecare and cleaning products in the Americas and EIMEA segments are considered harvest brands, which continue to provide positive returns but are becoming a smaller part of the business as sales of the maintenance products grow with the execution of our four Must Win Battles within our strategic framework.
Human Capital Resources Our purpose can only be achieved with the efforts of our 613 employees who create positive lasting memories for our stakeholders, including end users of our products who solve problems in factories, workshops, and homes around the world.
Human Capital Resources Our purpose can only be achieved with the efforts of our 644 employees who live our values and create positive lasting memories for our stakeholders, including end users solving problems in factories, workshops, and homes around the world.
We are aware of many competing products, some of which sell for lower prices or are produced and marketed by companies with greater financial resources than those of our Company.
Competition in international markets varies by country. We are aware of many competing products, some of which sell for lower prices or are produced and marketed by companies with greater financial resources than those of our Company.
The availability of these components and raw materials is affected by a variety of supply and demand factors, including global market conditions, plant capacity utilization, and natural disasters. We have been experiencing input cost inflation that has impacted the cost of certain raw materials and freight services over the last several years.
The availability of these components and raw materials is affected by a variety of supply and demand factors, including global market conditions, plant capacity utilization, and natural disasters. We have historically experienced input cost inflation that impacted the cost of certain raw materials and freight services.
The multi-purpose drip oil is a lubricant with unique spout options that allow for precise applications to small mechanisms and assemblies, tool maintenance and threads on screws and bolts. 3-IN-ONE Oil is the market share leader among drip oils in many countries. It also has wide industrial applications in such areas as locksmithing, HVAC, marine, farming and construction.
The multi-purpose drip and specialty oil lubricant feature the Marksman ® Spout to deliver precise application to small mechanisms and assemblies, tool maintenance and threads on screws and bolts. 3-IN-ONE Oil is the market share leader among drip oils in many countries. It also has wide industrial applications in such areas as locksmithing, HVAC, marine, farming and construction.
Spot Shot ® – The Spot Shot brand is sold as an aerosol and a liquid trigger carpet stain and odor eliminator. The brand also includes environmentally friendly products such as Spot Shot Instant Carpet Stain & Odor Eliminator and Spot Shot Pet Instant Carpet Stain & Odor Eliminator, which have non-toxic and biodegradable formulas.
Spot Shot ® – The Spot Shot brand is sold as an aerosol and a liquid trigger carpet stain and odor eliminator. The brand includes Spot Shot Instant Carpet Stain & Odor Eliminator and the environmentally friendly product Spot Shot Pet Instant Carpet Stain & Odor Eliminator, which has a non-toxic and biodegradable formula.
It is also common and/or possible that we could lose distribution or product offerings and experience a decrease in promotional activities and programs in one period and subsequently regain this business in a future period. We are accustomed to such fluctuations and manage this as part of our normal business activities.
It is also common and/or possible that we could lose distribution or product offerings and experience a decrease in promotional activities and programs in one period and subsequently regain this business in a future period.
Although Carpet Fresh brand products are also sold in the U.S., they are sold by a third party under a licensing agreement. In the U.K., these products are sold under the 1001 ® brand name.
Although X-14 brand products are also sold in the U.S., they are sold by a third party under a licensing agreement.
These maintenance products are sold worldwide and they provide end users with a variety of product and delivery system options. Our signature product is WD-40 Multi-Use Product in the blue and yellow can with the little red top. It is included within the maintenance product category and accounts for a significant majority of our sales.
Our signature product is WD-40 Multi-Use Product in the blue and yellow can with the little red top. It accounts for a significant majority of our sales in the maintenance product category.
The WD-40 Specialist product line is sold primarily in the U.S. and many countries in Europe, as well as parts of Canada, Latin America, Australia and Asia. Within the WD-40 Specialist product line, we also sell bike-specific products across all our segments, motorbike-specific products in Europe, lawn and garden specific products in Australia, and automotive specific products in Asia.
Within the WD-40 Specialist product line, we also sell bike-specific products across all our segments, motorbike-specific products in Europe and Asia, lawn and garden specific products in Australia, and automotive specific products in Asia.
Supply needs are communicated by us to our contract manufacturers, and we are committed to purchasing the products manufactured based on orders and short-term projections, ranging from two months 4 Table of Contents to six months, provided to the contract manufacturers.
Supply needs are communicated by us to our contract manufacturers, and we are committed to purchasing the products manufactured based on orders and short-term projections, ranging from two months to six months, provided to the contract manufacturers. We also formulate and manufacture concentrate used in our WD-40 products at certain of our own facilities and at third-party contract manufacturers.
Our future is guided by a long-term four-by-four strategic framework tied to our purpose and our values. There are two main elements of our strategic framework. The first element of our four-by-four strategic framework, which we refer to as our Must-Win Battles, focuses on increasing sales of our maintenance products.
The first element of our four-by-four strategic framework, which we refer to as our Must-Win Battles, focuses on increasing sales of our maintenance products.
Lava ® /Solvol ® – The Lava and Solvol brands consist of heavy-duty hand cleaner products which are sold in bar soap and liquid form through hardware, grocery, industrial, automotive and mass retail channels as well as through online retailers. Lava is sold primarily in the U.S., while Solvol is sold exclusively in Australia.
Lava ® – The Lava brand consists of heavy-duty hand cleaner products which are sold in bar soap and liquid form through hardware, grocery, industrial, automotive and mass retail channels as well as through online retailers primarily in the United States. X-14 ® – The X-14 brand is a line of quality automatic toilet bowl cleaners.
The product development team also leverages its development capabilities by partnering with a network of outside resources including our current and prospective outsource suppliers. In addition, the research and development team engages in activities and product development efforts which are necessary to ensure that we meet all regulatory requirements for the formulation of our products.
Our product development team engages in consumer research, product development, current product improvement and testing activities. The product development team also leverages its development capabilities by partnering with a network of outside resources including our current and prospective outsource suppliers.
We are currently conducting a strategic review regarding the future of our homecare and cleaning products. The principal driver of our sales growth is focused on our maintenance products and making them available in more places, for more people, who will find more uses, more frequently.
The principal driver of our sales growth is focused on our maintenance products and making them available in more places, for more people, who will find more uses, more frequently. 1 Table of Contents Our future is guided by a long-term four-by-four strategic framework tied to our purpose and our values. There are two main elements of our strategic framework.
Our workforce is distributed globally in 17 countries, with approximately 36% in the Americas, 42% in EMEA, 14% in Asia-Pacific, and 8% corporate employees. Women make up approximately 44% of our global workforce. The average tenure of our global workforce is eight years. A strategic enabler of our business is to be an employer of choice with a people-first mindset.
Our workforce is distributed globally in 16 countries, with approximately 36% in the Americas, 42% in EIMEA, 14% in Asia-Pacific, and 8% corporate employees. Women make up approximately 46% of our global workforce. The average tenure of our global workforce is eight years and our average employee retention rate is greater than 90%.
GT85 ® – The GT85 brand is a multi-purpose bike maintenance product line that consists of professional spray maintenance products and lubricants which are sold primarily in the bike market through the automotive and industrial channels in the U.K. 3 Table of Contents Homecare and Cleaning Products We sell our homecare and cleaning products in certain locations worldwide and they include a portfolio of well-known brands as follows: 2000 Flushes ® – The 2000 Flushes brand is a line of long-lasting automatic toilet bowl cleaners.
GT85 ® – The GT85 brand is a multi-purpose bike maintenance product line that consists of professional spray maintenance products and lubricants which are sold primarily in the bike market through the automotive and industrial channels in the U.K.
Spot Shot products are sold primarily through grocery and mass retail channels, online retailers, warehouse club stores and hardware and home center stores in the U.S., Canada and the United Kingdom. Spot Shot products are sold in the U.K. under the 1001 ® brand name.
Spot Shot products are sold primarily through grocery, online retailers, warehouse club stores and hardware and home center stores in the U.S., Canada and the United Kingdom. Carpet Fresh ® /1001 ® – The Carpet Fresh and 1001 brands are a line of room and rug deodorizers sold as powder and aerosol quick-dry foam products.
Research and Development We recognize the importance of innovation and renovation to our long-term success and are focused on and committed to research and new product development activities, primarily in our maintenance product group. Our product development team engages in consumer research, product development, current product improvement and testing activities.
We expect these components and raw materials to continue to be readily available in the future and we have developed sourcing alternatives and risk mitigation plans. Research and Development We recognize the importance of innovation and renovation to our long-term success and are focused on and committed to research and new product development activities, primarily in our maintenance product group.
Our products compete both within their own product classes as well as within product distribution channels, competing with many other products for store placement and shelf space. Competition in international markets varies by country.
Our research and development team currently conducts global testing at a laboratory facility that we lease in New Jersey. Competition The markets for our products are highly competitive. Our products compete both within their own product classes as well as within product distribution channels, competing with many other products for store placement and shelf space.
Although we are evaluating strategic alternatives for certain of our homecare and cleaning products we have continued to sell products within these brands but with a reduced level of marketing investment.
We have continued to sell products within these brands but with a reduced level of marking investment over time.
Manufacturing We outsource our finished goods manufacturing directly or through our marketing distributors to various third-party manufacturers. We or our marketing distributors use contract manufacturers in the U.S., Mexico, Brazil, Argentina, Colombia, the U.K., Italy, Poland, Australia, China, South Korea and India.
We or our marketing distributors use contract manufacturers in the U.S., Mexico, Brazil, Argentina, Colombia, the U.K., Italy, Poland, Australia, China, South Korea and India. Although we have contractual minimum purchase obligations with certain contract manufacturers, such obligations are either immaterial or below the volume of goods that we have historically purchased.
This includes a total rewards strategy that ensures each employee can sustain their well-being today and into the future. Our workforce is comprised of the following functions: marketing, sales, customer service, finance and accounting, legal, information technology, human resources, supply chain and logistics, innovation, research and development, quality, and other technical fields.
The Compensation and People Committee of our Board of Directors provides oversight of our relevant people-management practices. 2 Table of Contents Our workforce is comprised of the following functions: marketing, sales, customer service, finance and accounting, legal, information technology, human resources, supply chain and logistics, innovation, research and development, environmental programs, quality, and other technical fields.
X-14 ® – The X-14 brand is a line of quality automatic toilet bowl cleaners. X-14 is sold primarily in the U.S. through grocery and mass retail channels as well as through online retailers. Sales and Marketing Our sales do not reflect any significant degree of seasonality.
Solvol ® – The Solvol brand consists of heavy-duty hand cleaner products which are sold in bar soap and liquid form through hardware, grocery, industrial, automotive and mass retail channels as well as through online retailers in Australia. Sales and Marketing Our sales do not reflect any significant degree of seasonality.
We are exploring options to further de-emphasize our homecare and cleaning brands, particularly those in the U.S. and U.K. De-emphasizing these brands over time will create opportunities for our workforce to bring an even greater focus to our higher margin maintenance products.
We are continuing to conduct a strategic review regarding the future of our homecare and cleaning product portfolios in the Americas and EIMEA segments to create opportunities for our workforce to bring an even greater focus to our higher margin maintenance products and are pursuing the sale of these portfolios in fiscal year 2025.
Consistently living our company values grants each of us the freedom to make autonomous decisions in the best interest of all stakeholders. We are committed to celebrating the diversity of our individual characteristics that make us unique and creating a culture where everyone experiences a sense of belonging.
Our purpose-driven and values-guided culture generates an important competitive advantage through our ability to attract, develop, retain and engage outstanding people. Consistently living our company values grants each of us the freedom to make autonomous decisions in the best interest of all stakeholders.
We completed a study in February 2020 to examine gender pay differences to determine if there were occasions of compensation decisions not being based on job-related criteria. This study identified no biased decision-making, as any differences were explainable by job-related criteria. The next study will be completed in late calendar year 2023.
Our calendar year 2023 global pay equity study reaffirmed there were not statistically significant or systemic gender-based pay disparities, ensuring all compensation decisions were rooted in job-related criteria with no evidence of biased decision-making.
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This competitive advantage enables us to attract, develop and engage outstanding employees. One of the primary responsibilities of our leaders, whom we refer to as coaches, is to support the development needs of our employees to achieve their performance goals. We offer various learning opportunities to allow employees to grow from both a technical and leadership standpoint.
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We are continuing to conduct a strategic review regarding the future of our homecare and cleaning product portfolios in the Americas and EIMEA segments and are pursuing the sale of these portfolios in fiscal year 2025. This potential sale will allow us to focus on our core, higher-margin maintenance products that are included in our strategic framework.
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Our organizational culture is a competitive advantage, and we prioritize it as such. We care about understanding the views, perspectives and experiences of our end-users and employees. This is foundational in maintaining and growing the WD-40 Company brand and business. Our language, norms, and traditions result in psychological safety, learning, and goal achievement.
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We are committed to celebrating diversity of thought and lived experiences, providing equitable access to opportunities, and creating a culture where everyone experiences a sense of inclusion and belonging. We are a meritocracy with a competitive performance-based total rewards strategy, where compensation and career advancement are determined by demonstrated competencies and contributions.
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Increasingly, employees collaborate globally with their functional peers or in squads focused on common goals. Success is accelerated through this global collaboration and learning. 2 Table of Contents The pandemic inspired us to launch what we call “Work from Where”, a philosophy to support the work-life integration of our global workforce.
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The success of our teams is accelerated through global collaboration and our bold ambition to become a world-class learning organization. Products Maintenance Products Included in our maintenance products are both multi-purpose maintenance products and specialty maintenance products. These maintenance products are sold worldwide and they provide end users with a variety of product and delivery system options.
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This “Work from Where” philosophy enables our coaches and employees to use our values in their decision-making to align on where work is completed. The Compensation Committee of our Board of Directors provides oversight of our relevant people-management practices. Our approach to compensation aligns the interests of every employee with the creation of company value over time.
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The WD-40 Specialist product line is sold primarily in the U.S. and many countries in Europe, as well as parts of Canada, Latin America, Australia and Asia.
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We will continue to conduct equitable pay studies going forward. We invite you to review our ESG report (located on our Internet site at www.wd40company.com) for more information about corporate responsibility, our workforce, programs, and initiatives.
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Homecare and Cleaning Products We sell our homecare and cleaning products in certain locations worldwide and they include a portfolio of well-known brands. We are pursuing the sale of these portfolios in the Americas and EIMEA segments in fiscal year 2025.
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Nothing on our website, including but not limited to our ESG report, shall be deemed incorporated by reference into this Annual Report on Form 10-K. Products Maintenance Products Included in our maintenance products are both multi-purpose maintenance products and specialty maintenance products.
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Certain of 3 Table of Contents our homecare and cleaning product brands will continue to be held for use due to their significance to the business within certain regional markets in the Asia-Pacific segment.
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In Australia, they are sold under the no vac ® brand name. 1001 ® – The 1001 brand includes carpet and household cleaners and rug and room deodorizers which are sold primarily through mass retail, grocery and home center stores in the U.K.
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We are actively pursuing the sale in fiscal year 2025 of the following homecare and cleaning product brands in the Americas and EIMEA segments: 2000 Flushes ® – The 2000 Flushes brand is a line of long-lasting automatic toilet bowl cleaners.
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Although we have definitive minimum purchase obligations included in the contract terms with certain contract manufacturers, when such obligations have been included, they have either been immaterial or the minimum amounts have been such that they are below the volume of goods that we have historically purchased.
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We will continue to hold for use the following homecare and cleaning product brands in the Asia-Pacific segment: no vac ® – The no vac brand includes a range of aerosol quick-dry foaming carpet and fabric sanitizers and deodorizers products, and spot stain cleaners. Products are sold through grocery, value, hardware and mass retail channels in Australia and New Zealand.
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We also formulate and manufacture concentrate used in our WD-40 products at certain of our own facilities and at third-party contract manufacturers.
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We are accustomed to such fluctuations and manage this as part of our normal business activities. 4 Table of Contents Manufacturing We outsource our finished goods manufacturing directly or through our marketing distributors to various third-party manufacturers.
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We expect these components and raw materials to continue to be readily available in the future and we have developed sourcing alternatives and risk mitigation plans. We expect some level of challenging market conditions to persist in fiscal year 2024, as described above.
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In addition, the research and development team engages in activities and product development efforts which are necessary to ensure that we meet all regulatory requirements for the formulation of our products. The research and development team also helps shape our environmental goals and business objectives by innovating and implementing sustainable practices and products.
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Our research and development team currently conducts global testing at a laboratory facility that we lease in New Jersey. Competition The markets for our products, particularly those related to our homecare and cleaning products, are highly competitive.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result, we face substantial risks associated with our reliance on third-party manufacturers, suppliers, and/or logistics providers, including but not limited to the following areas: • changes to the terms of doing business with these providers or the production capacity they allocate to our products; • disagreements or the inability to maintain good relationships with these providers, including the failure of these providers to be aligned with our company values; • financial difficulties experienced by these providers; • consolidation of third-party packagers, which could reduce competition in the industry and increase our costs for their services or result in the acquiring company declining to manufacture our products; • significant disruptions in the production or transportation of our products due to events having regional or global impacts on economic activity, such as public health emergencies, natural disasters or extreme weather conditions; • significant disruptions in the production or transportation of our products due to competition for materials, components, labor or services from third-party vendors; • concentration of inventory increasing exposure to risks associated with fire, natural disasters, theft and logistics disruptions to customer order fulfillment; or • inability to successfully implement new manufacturing processes associated with new facilities or new product lines.
Biggest changeAs a result, we face substantial risks associated with our reliance on third-party manufacturers, suppliers, and/or logistics providers, including but not limited to the following areas: • changes to the terms of doing business with these providers or the production capacity they allocate to our products; • disagreements or the inability to maintain good relationships with these providers, including the failure of these providers to be aligned with our company values; • inability to successfully implement new manufacturing processes associated with new facilities or new product lines; • concentration of inventory increasing exposure to risks associated with fire, natural disasters, theft and logistics disruptions to customer order fulfillment; • financial difficulties experienced by these providers; 10 Table of Contents • consolidation of third-party packagers, which could reduce competition in the industry and increase our costs for their services or result in the surviving company declining to manufacture or store our products; • significant disruptions in the production or transportation of our products due to events having regional or global impacts on economic activity, such as public health emergencies, natural disasters or extreme weather conditions; or • significant disruptions in the production or transportation of our products due to competition for materials, components, labor or services from third-party vendors.
If we are unable to increase market share in our existing product lines by developing product improvements, investing adequately in our existing brands, building usage among new customers, developing, acquiring or successfully launching new products or product line extensions, or successfully penetrating emerging and developing markets and sales channels globally, we may not achieve our sales volume growth objectives.
If we are unable to increase market share in our existing product lines by developing product improvements, investing adequately in our existing brands, building usage among existing and new customers, developing, acquiring or successfully launching new products or product line extensions, or successfully penetrating emerging and developing markets and sales channels globally, we may not achieve our sales volume growth objectives.
If we are found to have violated the trademark, copyright, patent or other intellectual property rights of others, such a finding could result in the need to cease the use of a trademark, trade secret, copyrighted work or patented invention in our business and an obligation to pay a substantial amount for past infringement.
If we are found to have violated trademark, copyright, patent or other intellectual property rights of others, such a finding could result in the need to cease the use of a trademark, trade secret, copyrighted work or patented invention in our business and an obligation to pay a substantial amount for past infringement.
If we agree to such customer demands and/or requests, it could negatively impact our ability to maintain existing profit margins. In addition, our business is based primarily upon individual sales orders, and we typically do not enter into long-term contracts with our customers.
If we agree to such customer demands and/or requests, it could negatively impact our ability to maintain existing profit margins. In addition, our business is primarily based upon individual sales orders, and we typically do not enter into long-term contracts with our customers.
Although we have policies and procedures in place governing (i) the timely investigation of cybersecurity incidents, (ii) the timely disclosure of any related material nonpublic information resulting from a material cybersecurity incident, and (iii) the safeguarding against insider trading of directors, officers, and other corporate insiders between the period of investigation and the public disclosure of such an incident; cybersecurity incidents themselves, such as the release of sensitive data from our databases and systems, could adversely affect our business, financial condition and results of operations.
Although we have policies and procedures in place governing (i) the timely investigation of cybersecurity incidents, (ii) the timely disclosure of any related material nonpublic information resulting from a material cybersecurity incident, and (iii) the safeguarding against insider trading by directors, officers, and other corporate insiders between the period of investigation and the public disclosure of such an incident; cybersecurity incidents themselves, such as the release of sensitive data from our databases and systems, could adversely affect our business, financial condition and results of operations.
In particular, the COVID-19 pandemic, extreme weather events and other macroeconomic factors have resulted in significant supply chain constraints and transportation disruptions at times. Some of the challenges that we have experienced include general aerosol-related production capacity constraints and competition for such capacity by other companies who utilize the same third-party manufacturers for their aerosol production.
In particular, the COVID-19 pandemic, extreme weather events and other macroeconomic factors have resulted in significant supply chain constraints and transportation disruptions at times. Some of the challenges that we have experienced historically include general aerosol-related production capacity constraints and competition for such capacity by other companies who utilize the same third-party manufacturers for their aerosol production.
Many international and local governmental authorities are considering increased legislative and regulatory requirements concerning protection of personal data which may impact us and increase our costs to comply with these requirements in future periods. Additional laws and regulations require that we carefully manage our supply chain for the production, distribution and sale of goods.
Many international and local governmental authorities are considering increased legislative and regulatory requirements concerning protection of personal data which may impact us and increase our costs to comply with these requirements in the future. Additional laws and regulations require that we carefully manage our supply chain for the production, distribution and sale of goods.
We distribute our products throughout the world in one of two ways: the direct distribution model, in which products are sold directly by us to wholesalers and retailers in the U.S., Canada, Mexico, Australia, China, the U.K. and a number of other countries, including those throughout Europe; and the marketing distributor model, in which products are sold to marketing distributors who in turn sell to wholesalers and retailers.
We distribute our products throughout the world in one of two ways: the direct distribution model, in which products are sold directly by us to wholesalers and retailers in the U.S., Canada, Mexico, Brazil, Australia, China, the U.K. and a number of other countries, including those throughout Europe; and the marketing distributor model, in which products are sold to marketing distributors who in turn sell to wholesalers and retailers.
In addition, our sales and operating results may be affected by uncertain or changing economic and market conditions, including inflation, deflation, prolonged weak consumer demand, political instability, public health crises or other changes that may affect the principal markets, trade channels, and industrial segments in which we conduct our business.
In addition, our sales and operating results may be affected by uncertain or changing economic and market conditions, including recession, inflation, deflation, prolonged weak consumer demand, political instability, public health crises or other changes that may affect the principal markets, trade channels, and industrial segments in which we conduct our business.
If such agreements, policies and procedures are not effective enough to maintain the secrecy of our trade secrets or if chemical disclosure regulations do not allow for continued protection of essential elements of our trade secret formulations, the loss of trade secret protection could have a material adverse effect on our business, financial condition or results of operations.
If such agreements, policies and procedures are not effective to maintain the secrecy of our trade secrets or if chemical disclosure regulations do not allow for continued protection of essential elements of our trade secret formulations, the loss of trade secret protection could have a material adverse effect on our business, financial condition or results of operations.
The increasing number of information technology security threats and the development of more sophisticated cyberattacks, including ransomware, pose a potential risk to the security of our information technology systems and networks, as well as to the confidentiality, availability and integrity of our data. In addition, the increased use of remote work infrastructures also increases the possible cybersecurity risks.
The increasing number of information technology security threats and the development of more sophisticated cyberattacks, including ransomware, pose a potential risk to the security of our information technology systems and networks, as well as to the confidentiality, availability and integrity of our data. In addition, the increased use of remote work infrastructures also increases cybersecurity risks.
Although we have concluded that our current products do not contain such “conflict minerals” in our annual evaluations to date, if we were to conclude that these materials exist within our products in future periods, we may have difficulty verifying the origin of such materials for purposes of disclosures required by the SEC rules.
Although we have concluded that our current products do not contain such “conflict minerals” in our annual evaluations to date, if we were to conclude that these materials exist within our products in the future, we may have difficulty verifying the origin of such materials for purposes of disclosures required by the SEC rules.
In addition, our brand value depends on our ability to maintain a positive consumer perception of our corporate integrity and brand culture. Negative claims or publicity involving us, our products, or any of our key employees could damage our reputation and brand image, regardless of whether such claims have merit.
In addition, our brand value depends on our ability to maintain a positive consumer perception of our corporate integrity and brand culture. Negative claims or publicity involving us or our brand influencers, our products, or any of our key employees could damage our reputation and brand image, regardless of whether such claims have merit.
When particular tax matters arise, a number of years may elapse before such matters are audited and resolved, or the statute of limitations expires resulting in the release of the liability. Resolution of such matters or the expiration of the statute of limitations would be recognized as a reduction to our effective tax rate in the year of resolution.
When tax matters arise, a number of years may elapse before such matters are audited and resolved, or the statute of limitations expires resulting in the release of the liability. Resolution of such matters or the expiration of the statute of limitations would be recognized as a reduction to our effective tax rate in the year of resolution.
We may be required to record a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or intangible assets is identified and this could materially adversely affect our financial condition and results of operations.
We may be required to record a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or intangible assets is identified, which could materially adversely affect our financial condition and results of operations.
As component and raw material costs are the principal contributors to the cost of goods sold for all of our products, any significant fluctuation in the costs of components and raw materials could have a material impact on the gross margins realized on our products.
As component and raw material costs are the principal contributors to the cost of products sold for all of our products, any significant fluctuation in the costs of components and raw materials could have a material impact on the gross margins realized on our products.
The CSRD expands the number of companies required to publicly report ESG-related information and defines the ESG-related information that companies are required to report in accordance with European Sustainability Reporting Standards (“ESRS”).
The CSRD expands the number of companies required to publicly report ESG-related information and defines the ESG-related information that companies are required to report in accordance with European Sustainability Reporting Standards.
We are also subject to numerous environmental laws and regulations that impose various environmental controls on our business operations, including, among other things, the discharge of pollutants into the air and water, the handling, use, treatment, storage and clean-up of solid and hazardous wastes and the investigation and remediation of soil and groundwater affected by hazardous substances.
We are also subject to laws and regulations that impose environmental controls on our business operations, including, among other things, the discharge of pollutants into the air and water, the handling, use, treatment, storage and clean-up of solid and hazardous wastes and the investigation and remediation of soil and groundwater affected by hazardous substances.
Although we expect that a significant portion of our revenues will continue to be derived from this limited number of customers, our largest individual customer contributed to less than 10% of our consolidated net sales in fiscal year 2023. However, changes in the strategies of our largest customers may have an adverse impact on our sales.
Although we expect that a significant portion of our revenues will continue to be derived from this limited number of customers, our largest individual customer contributed to less than 10% of our consolidated net sales in fiscal year 2024. However, changes in the strategies of our largest customers may have an adverse impact on our sales.
Indicators such as 16 Table of Contents underperformance relative to historical or projected future operating results, changes in our strategy for our overall business or use of acquired assets, unexpected negative industry or economic trends, decline in our stock price for a sustained period, decreased market capitalization relative to net book values, unanticipated technological change or competitive activities, loss of key distribution, change in consumer demand, loss of key personnel and acts by governments and courts may signal that an asset has become impaired.
Indicators such as underperformance relative to historical or projected future operating results, changes in our strategy for our overall business or use of acquired assets, unexpected negative industry or economic trends, decline in our stock price for a sustained period, decreased market capitalization relative to net book values, unanticipated technological change or competitive activities, loss of key distribution, change in consumer demand, loss of key personnel and acts by governments and courts may signal that an asset has become impaired.
In addition, to the extent that the economic benefits associated with any of our business development activities diminish in the future, we may be required to record impairments to goodwill, intangible assets or other assets associated with such activities, which could also materially adversely affect our business, financial condition and results of operations.
In addition, to the extent that the economic benefits associated with any of our business development activities not materialize or diminish in the future, we may be required to record impairments to goodwill, intangible assets or other assets associated with such activities, which could also materially adversely affect our business, financial condition and results of operations.
As we further develop and grow our business operations outside the U.S., we are exposed to additional complexities and risks, particularly in China, Mexico and other emerging markets. In many foreign countries, particularly in those with developing economies, business practices that are prohibited by the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K.
As we further develop and grow our business operations outside the U.S., we are exposed to additional complexities and risks, particularly in China, Mexico, Brazil and other emerging markets. In many foreign countries, particularly in those with developing economies, business practices that are prohibited by the U.S. Foreign Corrupt Practices Act, the U.K.
Any resolution of a tax matter may require the adjustment of tax assets or tax liabilities or the use of cash in the year of resolution. For additional information on such matters, see Part IV – Item 15, “Exhibits, Financial Statement Schedules” Note 13 – Income Taxes, in this report.
Any resolution of a tax matter may require the adjustment of tax assets or tax liabilities or the use of cash in the year of resolution. For additional information on such matters, see Part IV – Item 15, “Exhibits, Financial Statement Schedules” Note 14 – Income Taxes, in this report.
The development and introduction of new products, as well as the renovation of current products and product lines, require substantial and effective research, development and marketing expenditures, which we may be unable to recoup if the new or renovated products do not gain widespread market acceptance.
The development and introduction of new products, as well as the renovation of current products and product lines, require substantial and effective research, development and marketing expenditure, which we may be unable to recoup if the new or renovated products do not gain widespread market acceptance.
The marketing distributor model is generally used in countries where we do not have direct Company-owned operations. Instead, we partner with local companies who perform the sales, marketing and distribution functions. We invest time and resources into these relationships.
The marketing distributor model is generally used in countries where we do not have direct Company-owned operations. Instead, we work with local companies who perform the sales, marketing and distribution functions. We invest time and resources into these relationships.
Although we have historically paid out a large part of our earnings to stockholders in the form of regular quarterly cash dividends, we may not have sufficient cash to do so in the future. We may incur substantial debt in the future for general business and development activities.
Although we have historically paid out a large part of our earnings to stockholders in quarterly cash dividends, we may not have sufficient cash to do so in the future. We may incur substantial debt in the future for general business and development activities.
Our information systems could be damaged or cease to function properly due to a number of other reasons as well, including catastrophic events and power outages. Although we have certain business continuity plans in place to address such service interruptions, there is no guarantee that these business continuity plans will provide alternative processes in a timely manner.
Our information systems could be damaged or cease to function properly due to a number of other reasons, including catastrophic events and power outages. Although we have business continuity plans in place to address such service interruptions, there is no guarantee that these business continuity plans will provide alternative processes in a timely manner.
Our failure to protect or successfully assert our intellectual property rights or failure to protect our other proprietary information could make us less competitive and this could have a material adverse effect on our business, financial condition and results of operations.
Our failure to protect or successfully assert our intellectual property rights or failure to protect our other proprietary information could make us less competitive, which could have a material adverse effect on our business, financial condition and results of operations.
As a result, our ability to execute our strategic initiatives will continue to face substantial risks associated with having increased global operations outside the U.S., including: • economic or political instability in any of our global markets; • challenges associated with conducting business in foreign jurisdictions, including those related to our understanding of and compliance with business laws and regulations in such foreign jurisdictions; • increasing tax complexity or changes in tax law associated with operating in multiple tax jurisdictions; • a dispersed employee base and requirements for compliance with varied employment regulations and labor laws, including health and safety regulations and wage and hour laws, in countries outside the U.S.; • varying and complex privacy laws in foreign jurisdictions; and • the imposition of tariffs or trade restrictions and costs, burdens and restrictions associated with other governmental actions.
As a result, our ability to execute our strategic framework will continue to face substantial risks associated with having increased global operations outside the U.S., including, but not limited to: • economic or political instability in any of our global markets; • challenges associated with conducting business in foreign jurisdictions, including those related to our understanding of and compliance with business laws and regulations in such foreign jurisdictions; • increasing tax complexity or changes in tax law associated with operating in multiple tax jurisdictions; • a dispersed employee base and requirements for compliance with varied employment regulations and labor laws, including health and safety regulations and wage and hour laws, in countries outside the U.S.; • varying and complex privacy laws in foreign jurisdictions; and • the imposition of tariffs or trade restrictions and costs, burdens and restrictions associated with other governmental actions.
Additionally, in some countries, local laws may require substantial payments to terminate existing marketing distributor relationships, which could also have a material adverse effect on our business, financial condition and results of operations. 15 Table of Contents Product liability claims and other litigation and/or regulatory action could adversely affect our sales and operating results.
Additionally, in some countries, local laws may require substantial payments to terminate existing marketing distributor relationships, which could also have a material adverse effect on our business, financial condition and results of operations. Product liability claims and other litigation and/or regulatory action could adversely affect our sales and operating results.
There is a risk that changes in such marketing distributor relationships, including a change in key marketing distributor personnel or a transition to the direct distribution model, if not managed successfully, could result in a disruption in the affected markets and that such disruption could have a material adverse effect on our business, financial condition and results of operations.
There is a risk that changes in such marketing distributor relationships, including a change in key marketing distributor personnel or a transition to the direct distribution model, if not managed successfully, could result in a disruption in the affected markets and that such disruption could have a material adverse effect on our business, 15 Table of Contents financial condition and results of operations.
Product quality issues, which could include lower product efficacy due to formulation changes attributable to regulatory requirements, could also result in decreased customer confidence in our brands and a decline in product quality could result in product liability claims.
Product quality issues, which could include lower product efficacy due to formulation changes attributable to regulatory requirements, could also result in decreased customer confidence in our brands resulting in lower sales and a decline in product quality could result in product liability claims.
Specialty chemicals and aerosol cans, which constitute a significant portion of the costs for many of our maintenance products, have experienced significant price volatility in the past, and may continue to do so in the future.
Specialty chemicals and aerosol cans, which constitute a significant portion of the costs for many of our maintenance products, have experienced significant price volatility in the past, and may do so in the future.
Trade secret protection, particularly for our most valuable product formulation for the WD-40 Multi-Use Product, requires specific agreements, policies and procedures to assure the secrecy of information classified as a trade secret.
Trade secret protection, particularly for our most valuable product formulation for the WD-40 Multi-Use Product, requires specific agreements, policies and procedures to ensure the secrecy of information classified as a trade secret.
To protect our existing market share or capture additional market share from our competitors, we may need to increase our investments related to promotions and advertising or introduce and establish new products or product lines.
To protect our existing market share or capture additional market share from our competitors, we may need to increase our expenditure related to promotions and advertising or introduce and establish new products or product lines.
It could also be necessary to pay a substantial amount in the future if the holders of such rights are willing to permit us to continue to use the intellectual property rights.
It could also be necessary to pay a substantial royalty in the future if the holders of such rights are willing to permit us to continue to use the intellectual property rights.
In addition, a change in the strategies of our existing customers, including shelf simplification, the discontinuation of certain product offerings or the shift in shelf space to competitors’ products could reduce our sales and potentially offset sales volume increases achieved as a result of other sales growth initiatives.
In addition, a change in the strategies of our existing customers, including shelf simplification, the discontinuation of certain product offerings or the shift in shelf space to competitors’ products could reduce our sales and potentially offset sales volume increases achieved as a result of other 9 Table of Contents sales growth initiatives.
Quality issues, which can lead to large scale recalls of our products, can be due to causes such as product contamination, regulatory non-compliance, packaging errors, incorrect ingredients or components in our product or low-quality ingredients in our products due to suppliers delivering items that do not meet our specifications.
Quality issues, which can lead to large scale recalls of our products, can be due to product contamination, regulatory non-compliance, packaging errors, incorrect ingredients or components in our product or low-quality ingredients in our products due to suppliers delivering items that do not meet our specifications.
In addition, certain countries and other jurisdictions in which we operate have data protection and anti-trust laws that impose strict regulations on us. Non-compliance with any of these regulations may result in significant penalties being 12 Table of Contents imposed on us.
In addition, certain countries and other jurisdictions in which we operate have data protection and anti-trust laws that impose strict regulations on us. Non-compliance with any of these regulations may result in significant penalties being imposed on us.
Bribery Act or other applicable anti-corruption laws and regulations may be prevalent. Evolving 9 Table of Contents privacy and anti-trust laws and regulations in Europe, the U.S. and other jurisdictions present additional risks. Any failure to comply with these laws, even if inadvertent, could result in significant penalties or otherwise harm our reputation and business.
Bribery Act or other applicable anti-corruption laws and regulations may be prevalent. Evolving privacy and anti-trust laws and regulations in Europe, the U.S. and other jurisdictions present additional risks. Any failure to comply with these laws, even if inadvertent, could result in significant penalties or otherwise harm our reputation and business.
Although we use instruments to hedge certain foreign currency risks, primarily those associated with our U.K. subsidiary and net assets denominated in non-functional currencies, we are not fully protected against foreign currency fluctuations and, therefore, our reported earnings may be affected by changes in foreign currency exchange rates.
Although we use instruments to hedge certain foreign currency risks, primarily those associated with our U.K. subsidiary and net assets denominated in non-functional currencies, we are not fully protected against foreign currency fluctuations 7 Table of Contents and, therefore, our reported earnings may be affected by changes in foreign currency exchange rates.
Our ability to achieve sales volume growth will depend on our ability to (i) execute the initiatives associated with our strategic framework, (ii) drive growth in new markets by making targeted end users aware of our products and expanding distribution, (iii) drive growth within our existing markets through innovation, renovation and enhanced merchandising and marketing of our established brands, and (iv) capture market share from our competitors.
Our ability to achieve sales volume growth will depend on our ability to (i) execute the initiatives associated with our strategic framework, (ii) drive growth in new geographic markets by making targeted end users aware of our products and expanding distribution and market channels, including digital commerce, (iii) drive growth within our existing markets through innovation, renovation and enhanced merchandising and marketing of our established brands, and (iv) capture market share from our competitors.
We provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the accounting standard for uncertain tax positions. Changes in uncertain tax positions or other adjustments resulting from tax audits and settlements with taxing authorities, including related interest and penalties, impact our effective tax rate.
We provide liabilities for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement requirements prescribed by the specific accounting standards for uncertain tax positions. Changes in uncertain tax positions or other adjustments resulting from tax audits and settlements with taxing authorities, including related interest and penalties, impact our effective tax rate.
Competitive activity may require us to increase our investment in marketing or reduce our sales prices and this may lead to reduced profit margins, a loss of market share or loss of distribution, each of which could have a material adverse effect on our business, financial condition and results of operations.
Competitive activity may require us to increase our investment in marketing or reduce our sales prices, either of which would lead to reduced profit margins, or a potential loss of market share or loss of distribution, each of which could have a material adverse effect on our business, financial condition and results of operations.
If one of our products were determined to be defective, we could be required to recall the product, which could result in significant expenses, adverse publicity and loss of revenues. Even if we are successful in defending against such claims, litigation could result in substantial cost and be a distraction to our management and employees.
If one of our products were determined to be noncompliant or mislabeled, we could be required to recall the product, which could result in significant expenses, adverse publicity and loss of revenues. Even if we are successful in defending against such claims, litigation could result in substantial cost and be a distraction to our management and employees.
If our assumptions and estimates are incorrect or if we do not achieve all of our key goals or strategic initiatives, then our actual performance could vary materially from our internal expectations and those of the market. Failure to meet or exceed these expectations could cause the market price of our stock to decline.
If our assumptions and estimates are incorrect or if we do not achieve all our key goals outlined in our strategic framework, then our actual performance could materially vary from our internal expectations and those of the market. Failure to meet or exceed these expectations could cause the market price of our stock to decline.
In addition, actions we have taken to increase inventory levels of certain raw materials and finished goods, given the current challenges within supply chain and increased lead times required by suppliers, have led to higher transportation, storage and distribution costs.
In addition, actions we have taken in the past to increase inventory levels of certain raw materials and finished goods to mitigate challenges within supply chain and increased lead times required by suppliers, have led to higher transportation, storage and distribution costs.
As a result of changes in end-user preference, some sales are shifting more to these online retail sales channels, and this may present a challenge in our markets where we have a less developed e-commerce business.
As a result of changes in end-user preference, sales are increasingly shifting to these online retail sales channels, and this shift may present a challenge in our markets where we have a less developed e-commerce business.
In addition, the trading market for our common stock is influenced by the research and reports that securities analysts, industry analysts and other third parties publish about us or our business. We do not have any control over these reports or analysts.
In addition, the trading market for our common stock is influenced by the research and reports that securities analysts, industry analysts and other third parties publish about us or our business. We have no control over these reports or analysts.
Non-compliance with these emerging regulations or a failure to address stakeholder and societal expectations may result in potential cost increases, litigation, fines, penalties, production and sales restrictions, brand or reputational damage, loss of customers, failure to retain and attract talent, lower valuation and higher investor activism activities.
Non-compliance with these emerging regulations or a failure to address various stakeholder expectations may result in cost increases, litigation, fines, penalties, production and sales restrictions, brand or reputational damage, loss of customers, failure to retain and attract talent, lower valuation and investor activism.
We compete in several product categories where there are frequent introductions of new products and line extensions and such product introductions often require significant investment and support. Our ability to understand end user needs and preferences is key to maintaining and improving the competitiveness of our product offerings.
We compete in several product categories where there are frequent introductions of new products and line extensions and such 14 Table of Contents product introductions often require significant expenditure and support. Our ability to understand end user needs and preferences is key to maintaining and improving the competitiveness of our product offerings.
Such changes in customer strategy may include, but are not limited to: a reduction in willingness to transport and store goods of certain hazardous material ratings, a reduction in the number of brands they carry, or a shift in shelf space in favor of “private label” or competitors’ products.
Such changes in customer strategy may include, but are not limited to: demands for more liberal return rights, a reduction in willingness to transport and store goods of certain hazardous material ratings, a reduction in the number of brands they carry, or a shift in shelf space in favor of “private label” or competitors’ products.
It is also possible that governments and regulatory agencies will increase regulation, including the adoption of further regulations relating to the transportation, storage or use of certain chemicals, to enhance homeland security or protect the environment and such increased regulation could negatively impact our ability to obtain raw materials, components and/or finished goods or could result in increased costs.
Governments and regulatory agencies may increase regulation, including the adoption of further regulations relating to the transportation, storage or use of certain chemicals, to enhance homeland security or protect the environment, and such increased regulation could negatively impact our ability to obtain raw materials, components and/or finished goods or could result in increased costs.
There can be no assurance that we will be able to compete successfully against current and future competitors or that competitive pressures faced by us or the infringement of our products and brands will not have a material adverse effect on our business, financial condition and results of operations.
There can be no assurance that we will be able to compete successfully against current and future competitors or that competitive pressures faced by us or the infringement of our products and brands will not have a material adverse effect on our business, financial condition and results of operations. Sales unit volume growth may be difficult to achieve.
Our business and financial results could suffer if we are unable to attract, retain and motivate talented employees, including senior management, and maintain our corporate culture. Our success depends on our continuing ability to attract, engage and develop highly qualified people.
Our business and financial results could suffer if we are unable to attract, retain and motivate talented employees, including senior management, and maintain our corporate culture’s relevance to our strategic plan. Our success depends on our continuing ability to attract, engage and develop highly qualified people who are committed to our culture.
It is more difficult for us to achieve sales volume growth in developed markets where our products are widely used as compared to developing or 7 Table of Contents emerging markets where our products have been newly introduced or are not as well known by consumers.
It is more difficult for us to achieve sales volume growth in developed markets where our products are widely used as compared to developing or emerging markets where our products are newly introduced or are not as well known by consumers.
The loss of, or reduction in, orders from any of our most significant customers could have a material adverse effect on our brand values, business, financial condition and results of operations. Large customers may seek price reductions, added support or promotional concessions.
The loss of, or reduction in, orders or a higher volume of returns from any of our most significant customers could have a material adverse effect on our brand values, business, financial condition and results of operations. Large customers may seek price reductions, price protection, added support, non-compliance fees or promotional concessions.
In addition, there can be no assurance that our business development activities will be profitable at their inception or that they will achieve sales levels and profitability that justify the investments made.
In addition, there can be no assurance that our business development activities will be profitable or that they will achieve sales levels, profitability or synergies that justify the investments made.
Transition risks are the risks that may arise from the adoption of climate-related regulatory policies, including those that may be necessary to achieve 11 Table of Contents the national climate goals in the United States and other countries, or risks associated with changing stakeholder expectations and demands.
Transition risks are the risks that may arise from the adoption of climate-related regulatory policies, including those that may be necessary to achieve the national climate goals in the U.S. and other countries, or risks associated with changing stakeholder expectations and demands.
In addition, other macroeconomic factors have resulted in an inflationary environment that has compounded these impacts and led to further increases in raw material costs, manufacturing and distribution costs, and other input costs.
In the past, other macroeconomic factors resulted in an inflationary environment that compounded these impacts and led to further increases in raw material costs, manufacturing and distribution costs, and other input costs.
While CSRD rules are prescriptive for the types of data to be reported, the standards to quantify and qualify such data are still evolving and uncertain, and may impose increased costs on us related to complying with our reporting obligations and increase risks of non-compliance with ESRS and the CSRD.
While CSRD rules are prescriptive for the types of data to be reported, the standards to quantify and qualify such data are still evolving and uncertain and will impose increased costs on us related to complying with our reporting obligations.
Any failure or perceived failure, whether or not valid, to pursue and fulfill our ESG initiatives and objectives or to satisfy various ESG reporting standards timely could negatively impact our financial condition and results of operations. On January 5, 2023, the European Commission’s Corporate Sustainability Reporting Directive (“CSRD”) became effective.
Any failure or perceived failure, whether or not valid, to pursue and fulfill our ESG initiatives and objectives or to satisfy various ESG reporting standards in a timely manner could negatively impact our financial condition and results of operations. 12 Table of Contents In 2023, the European Commission’s Corporate Sustainability Reporting Directive (“CSRD”) became effective.
In addition, global supply chain issues and other macroeconomic factors have resulted in an inflationary environment that has led to increased raw material costs and other input costs.
In the past, global supply chain issues and other macroeconomic factors resulted in an inflationary environment that led to increased raw material costs and other input costs.
Our future performance and growth depend, in part, on our ability to successfully develop, introduce and/or establish new products as both brand extensions and/or line extensions. We cannot be certain that we will successfully achieve those goals.
Our future performance and growth depend, in part, on our ability to successfully develop, introduce and/or establish new products as both brand extensions and/or line extensions. There is no certainty that we will achieve those goals.
We cannot be certain that these rights, if obtained, will not be withdrawn, invalidated, circumvented or challenged in the future, and we could incur significant costs in connection with legal actions to defend and preserve our intellectual property rights.
These rights, if obtained, could be withdrawn, invalidated, circumvented or challenged and we could incur significant costs in connection with legal actions to defend and preserve our intellectual property rights.
Goodwill and intangible assets are subject to impairment risk. We assess the potential impairment of our goodwill during the second quarter of each fiscal year and otherwise when events or changes in circumstances indicate that an impairment condition may exist.
We assess the potential impairment of our goodwill during the second quarter of each fiscal year and when events or changes in circumstances indicate that an impairment condition may exist.
Strategic divestitures of certain businesses or brands could negatively impact our profitability as a result of a reduction in sales and operating income, or a decrease in cash flows subsequent to such divestiture. It may be necessary to recognize impairment charges as a result of a divestiture.
Strategic divestitures of certain businesses or brands could negatively impact our profitability as a result of a reduction in sales and operating income, decrease our cash flows, or cause us to recognize impairment charges.
In addition, even if such rights are obtained in the U.S., the laws of some of the other countries in which our products are or may be sold might not protect intellectual property rights to the same extent as the laws of the United States, or they may be difficult to enforce.
In addition, even if such rights are obtained in the U.S., other countries’ laws might not protect intellectual property rights to the same extent as the laws of the U.S., or they may be difficult or costly to enforce.
We cannot be sure that our operating results and financial performance, which include sales, net income, earnings per common share, gross margin and cash flows, will meet expectations.
Our operating results and financial performance, which include sales, net income, earnings per common share, gross margin and cash flows, may not meet expectations.
Further, such incidents could also materially increase the costs that we already incur to protect against such risks. While we maintain cyber insurance, our coverage may not be adequate for liabilities or costs actually incurred, and we cannot be certain that any insurer will not deny coverage of a future claim.
Further, such incidents could also materially increase the costs that we incur to protect against such risks. Although we maintain cyber insurance, our coverage may not be adequate for actual losses incurred, and an insurer may deny coverage of a future claim.
Although we maintain a global enforcement program to protect our intellectual property rights, there can be no assurance that these intellectual property rights will be maximized or that they can be successfully asserted.
We rely on trademark, trade secret protection, patent and copyright laws to protect our intellectual property rights. Although we maintain a global enforcement program to protect our intellectual property rights, there can be no assurance that these intellectual property rights will be maximized or that they can be successfully asserted.
There is a risk that we will not be able to obtain and protect our own intellectual property rights or, where appropriate, license intellectual property rights necessary to support new product introductions or product lines dependent upon such licensed rights.
We may be unable to obtain and protect our own intellectual property rights or, where appropriate, license intellectual property rights necessary to support new product introductions or product lines dependent upon such licensed rights.
We invest in research and development to maintain product formulations that comply with such laws and regulations. There can be no assurance that we will not be required to alter the chemical composition of one or more of our products in a way that will have an adverse effect upon the product’s efficacy or marketability.
There can be no assurance that we will not be required to alter the chemical composition of one or more of our products in a way that will have an adverse effect upon the product’s efficacy, marketability or cost.
The severity and duration of the current inflationary environment remain uncertain and it is not possible to predict the extent to which these conditions will impact our financial results and operations in future periods. It is also uncertain how changes in inflationary conditions will impact demand from our customers and end-users.
The severity and duration of any recession or inflationary environment are uncertain and it is not possible to predict the extent to which such conditions will impact our financial results and operations in the future. It is also uncertain how such changes in recessionary or 6 Table of Contents inflationary conditions could impact demand from our customers and end users.
If we cease doing business with a significant customer or if sales of our products to a significant customer materially decrease, our business, financial condition and results of operations may be harmed. 14 Table of Contents We may not successfully develop, introduce and/or establish new products and line extensions.
If we cease doing business with a significant customer or if sales of our products to a significant customer materially decrease, our business, financial condition and results of operations may be harmed.
In addition, all our foreign operating subsidiaries have functional currencies other than the U.S. Dollar, and our largest subsidiary is in the U.K. and generates significant sales in Pounds Sterling and Euros.
Approximately 50% of our revenues in fiscal year 2024 were generated in currencies other than the U.S. Dollar, which is our reporting currency. In addition, all our foreign operating subsidiaries have functional currencies other than the U.S. Dollar, and our largest subsidiary is in the U.K. and generates significant sales in Euros and Pounds Sterling.
Our failure to comply with any of these regulations or our inability to adequately predict the way these local regulations are interpreted and applied to our business by the applicable enforcement agencies could have a materially adverse effect on our business, financial condition and results of operations.
Our failure to comply with any of these regulations or our inability to adequately predict the way these local regulations are interpreted and applied to our business by the applicable enforcement agencies could have a materially adverse effect on our business, financial condition and results of operations. 13 Table of Contents Failure to maximize or to successfully assert our intellectual property rights or our infringement on the intellectual property rights of others could impact our competitiveness or otherwise adversely affect our financial condition and results of operations.
We may also elect to suspend share repurchases depending on available cash balances or concerns that we may have on future cash balances. Item 1B. Unresolved Staff Comments None.
We may also reduce or suspend share repurchases depending on available or projected cash balances. Item 1B. Unresolved Staff Comments None.
If demand from our customers and end-users decreases in future periods, this could adversely impact our financial results. 6 Table of Contents If economic or market conditions in certain of our key global markets deteriorate, we may experience material adverse effects on our business, financial condition and results of operations.
A decrease in demand from our customers and end users would harm our financial results. If economic or market conditions in certain of our key global markets deteriorate, we may experience material adverse effects on our business, financial condition and results of operations.
If other companies or entities infringe on our intellectual property rights or take part in counterfeiting activities, they may dilute the value of our brands in the marketplace, which could diminish the value that consumers associate with our brands and harm our sales.
If other companies or entities infringe on our intellectual property rights or engage in counterfeiting activities, they may dilute the value of our brands in the marketplace, which could diminish the value that consumers associate with our brands, harm our sales, or divert sales of product that we would ordinarily capture in the absence of infringing or counterfeit products.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we lease warehouse space at a third-party distributor facility in Denmark. 17 Table of Contents Asia-Pacific We lease office space in Epping, New South Wales, Australia; Shanghai, China; and Kuala Lumpur, Malaysia.
Biggest changeIn addition, we lease warehouse space at a third-party distributor facility in Denmark. Asia-Pacific We lease office space in Epping, New South Wales, Australia; Shanghai, China; and Kuala Lumpur, Malaysia.
In addition, we lease certain warehouse space and equipment at third-party manufacturer and distributor facilities throughout the U.S. EMEA We own and occupy an office as well as a plant facility located in Milton Keynes, United Kingdom. We also lease space for our branch offices in Germany, France, Italy, Spain, Portugal and the Netherlands.
In addition, we lease certain warehouse space and equipment at third-party manufacturer and distributor facilities throughout the U.S. EIMEA We own and occupy an office as well as a plant facility located in Milton Keynes, United Kingdom. We also lease space for our branch offices in Germany, France, Italy, Spain, Portugal and the Netherlands.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information required by this item is incorporated by reference to the information set forth in Item 15 of Part IV, “Exhibits, Financial Statement Schedules” Note 12 — Commitments and Contingencies, in the accompanying notes to the consolidated financial statements included in this report. Item 4.
Biggest changeItem 3. Legal Proceedings The information required by this item is incorporated by reference to the information set forth in Item 15 of Part IV, “Exhibits, Financial Statement Schedules” Note 13 — Commitments and Contingencies, in the accompanying notes to the consolidated financial statements included in this report. 18 Table of Contents Item 4.
Mine Safety Disclosures Not applicable. 18 Table of Contents PART II
Mine Safety Disclosures Not applicable. 19 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−2 removed2 unchanged
Biggest changeOn June 19, 2023, our Board approved a new share repurchase plan (the “2023 Repurchase Plan”). Under the 2023 Repurchase Plan, which became effective on September 1, 2023, we are authorized to acquire up to $50.0 million of our outstanding shares through August 31, 2025.
Biggest changePurchases of Equity Securities By the Issuer and Affiliated Purchasers On June 19, 2023, our Board approved a new share repurchase plan (the “2023 Repurchase Plan”). Under the 2023 Repurchase Plan, which became effective on September 1, 2023, we are authorized to acquire up to $50.0 million of our outstanding shares through August 31, 2025.
The timing and amount of repurchases are based on terms and conditions as may be acceptable to our Chief Executive Officer and Chief Financial Officer, subject to present loan covenants and in compliance with all laws and regulations applicable thereto. Item 6.
The timing and amount of repurchases are based on terms and conditions as may be acceptable to our Chief Executive Officer and Chief Financial Officer, subject to present loan covenants and in compliance with all laws and regulations applicable thereto.
On December 13, 2022, our Board of Directors (“Board”) approved a 6% increase in the regular quarterly cash dividend, increasing it from $0.78 per share to $0.83 per share. On October 6, 2023, our Board declared a cash dividend of $0.83 per share payable on October 31, 2023 to stockholders of record on October 20, 2023.
On December 12, 2023, our Board of Directors (“Board”) approved a 6% increase in the regular quarterly cash dividend, increasing it from $0.83 per share to $0.88 per share. On October 4, 2024, our Board declared a cash dividend of $0.88 per share payable on October 31, 2024 to stockholders of record on October 18, 2024.
On October 16, 2023, the last reported sales price of our common stock on the NASDAQ Global Select Market was $203.64 per share, and there were 13,556,684 shares of common stock outstanding held by approximately 549 holders of record. Dividends We have historically paid regular quarterly cash dividends on our common stock.
On October 15, 2024, the last reported sales price of our common stock on the NASDAQ Global Select Market was $260.85 per share, and there were 13,541,081 shares of common stock outstanding held by approximately 537 holders of record. Dividends We have historically paid regular quarterly cash dividends on our common stock.
Removed
Purchases of Equity Securities By the Issuer and Affiliated Purchasers On October 12, 2021, our Board approved a share buy-back plan (the “2021 Repurchase Plan”). Under the 2021 Repurchase Plan, which became effective on November 1, 2021, we were authorized to acquire up to $75.0 million of our outstanding shares through August 31, 2023.
Added
During the fiscal year ended August 31, 2024, the Company repurchased 34,250 shares at an average price of $236.32 per share, for a total cost of $8.1 million under this $50.0 million plan. No repurchase transactions were made during the fourth quarter of fiscal year 2024 . Item 6. [Reserved]
Removed
Selected Financial Data Reserved pursuant to amendments in SEC Release No. 33-10890 that eliminate the selected financial data requirements under Item 301 of Regulation S-K.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

88 edited+32 added−56 removed33 unchanged
Biggest changeThe length and severity of the recent volatility increases in the price of crude oil are highly unpredictable and may impact our cost of goods sold for as long as these conditions exist. 21 Table of Contents Results of Operations Fiscal Year Ended August 31, 2023 Compared to Fiscal Year Ended August 31, 2022 Operating Items The following table summarizes operating data for our consolidated operations (in thousands, except percentages and per share amounts): Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Dollars Percent Net sales: Maintenance products $ 503,558 $ 485,326 $ 18,232 4 % Homecare and cleaning products 33,697 33,494 203 1 % Total net sales 537,255 518,820 18,435 4 % Cost of products sold 263,035 264,055 (1,020) 0 % Gross profit 274,220 254,765 19,455 8 % Operating expenses 184,496 167,435 17,061 10 % Income from operations $ 89,724 $ 87,330 $ 2,394 3 % Net income $ 65,993 $ 67,329 $ (1,336) (2) % Earnings per common share – diluted $ 4.83 $ 4.90 $ (0.07) (1) % Net Sales by Segment The following table summarizes net sales by segment (in thousands, except percentages): Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Dollars Percent Americas $ 266,772 $ 240,233 $ 26,539 11 % EMEA 190,818 204,688 (13,870) (7) % Asia-Pacific 79,665 73,899 5,766 8 % Total $ 537,255 $ 518,820 $ 18,435 4 % 22 Table of Contents Americas Sales The following table summarizes net sales by product line for the Americas segment (in thousands, except percentages): Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Dollars Percent Maintenance products $ 250,348 $ 223,470 $ 26,878 12 % Homecare and cleaning products 16,424 16,763 (339) (2) % Total $ 266,772 $ 240,233 $ 26,539 11 % % of consolidated net sales 50 % 47 % CC Net sales – non-GAAP (1) $ 266,018 $ 240,233 $ 25,785 11 % Currency impact on current period – non-GAAP $ 754 (1) Current fiscal year constant currency (“CC”) net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales.
Biggest changeThus, on a constant currency basis, net income would have increased by $2.2 million, or 3%, for fiscal year 2024 compared to the prior fiscal year. • Diluted earnings per common share for fiscal year 2024 were $5.11 versus $4.83 in the prior fiscal year. • During the first quarter of fiscal year 2025 we reclassified our homecare and cleaning product portfolios in the Americas and EIMEA segments to held for sale. 21 Table of Contents Results of Operations Fiscal Year Ended August 31, 2024 Compared to Fiscal Year Ended August 31, 2023 Operating Items The following table summarizes operating data for our consolidated operations (in thousands, except percentages and per share amounts): Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Dollars Percent Net sales: WD-40 Multi-Use Product $ 452,925 $ 407,672 $ 45,253 11 % WD-40 Specialist 73,938 66,714 7,224 11 % Other maintenance products 31,173 29,172 2,001 7 % Total maintenance products 558,036 503,558 54,478 11 % HCCP (1) 32,521 33,697 (1,176) (3) % Total net sales 590,557 537,255 53,302 10 % Cost of products sold 275,330 263,035 12,295 5 % Gross profit 315,227 274,220 41,007 15 % Operating expenses 218,876 184,496 34,380 19 % Income from operations $ 96,351 $ 89,724 $ 6,627 7 % Net income $ 69,644 $ 65,993 $ 3,651 6 % EPS – diluted $ 5.11 $ 4.83 $ 0.28 6 % Shares used in diluted EPS 13,584 13,604 (20) 0 % (1) Homecare and cleaning products (“HCCP”) Net Sales by Segment The following table summarizes net sales by segment (in thousands, except percentages): Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Dollars Percent Americas $ 281,883 $ 266,772 $ 15,111 6 % EIMEA 221,045 190,818 30,227 16 % Asia-Pacific 87,629 79,665 7,964 10 % Total $ 590,557 $ 537,255 $ 53,302 10 % 22 Table of Contents Americas Sales The following table summarizes net sales by product line for the Americas segment (in thousands, except percentages): Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Dollars Percent WD-40 Multi-Use Product 216,769 202,651 14,118 7 % WD-40 Specialist 32,966 31,055 1,911 6 % Other maintenance products 17,289 16,642 647 4 % Total maintenance products 267,024 250,348 16,676 7 % HCCP 14,859 16,424 (1,565) (10) % Total net sales 281,883 266,772 15,111 6 % % of consolidated net sales 48 % 50 % CC Net sales – non-GAAP (1) $ 281,003 $ 266,772 $ 14,231 5 % Currency impact on current period – non-GAAP $ 880 (1) Current fiscal year constant currency (“CC”) net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales.
We sell our products primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers.
We sell our products primarily through hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, warehouse club stores, farm supply, sport retailers, and independent bike dealers.
Gross Profit The following general information is important when assessing our gross margin: • There is often a delay before changes in costs of raw materials, such as specialty chemicals used in the formulation of our products, impact cost of products sold due to production and inventory life cycles.
Gross Profit The following general information is important when assessing fluctuations in our gross margin: • There is often a delay before changes in costs of raw materials, such as specialty chemicals used in the formulation of our products, impact cost of products sold due to production and inventory life cycles.
Our principal sources of liquidity are cash generated from operations and cash currently available from our existing unsecured revolving credit facility under the Credit Agreement with Bank of America, N.A. We use proceeds of the revolving credit facility primarily for our general working capital needs. We also hold borrowings under the Note Agreement.
Our principal sources of liquidity are cash generated from operations and cash currently available from our existing unsecured revolving credit facility under the Credit Agreement with Bank of America, N.A. We use the revolving credit facility primarily for our general working capital needs. We also hold borrowings under the Note Agreement.
Maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, the Middle East and Africa. Homecare and cleaning products are sold primarily in North America, the United Kingdom (“U.K.”) and Australia.
Maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, India, the Middle East and Africa. Homecare and cleaning products are sold primarily in North America, the United Kingdom (“U.K.”) and Australia.
Advertising, promotional and other discounts that are given to our customers are recorded as a reduction to sales, whereas advertising and sales promotional costs associated with promotional activities that we pay to third parties are recorded as advertising and sales promotion expenses; • In the EMEA segment, the majority of our cost of goods sold is denominated in Pound Sterling whereas sales are generated in Pound Sterling, Euro and the U.S.
Advertising, promotional and other discounts that are given to our customers are recorded as a reduction to sales, whereas advertising and sales promotional costs associated with promotional activities that we pay to third parties are recorded as advertising and sales promotion expenses. • In the EIMEA segment, the majority of our cost of goods sold is denominated in Pound Sterling whereas sales are generated in Pound Sterling, Euro and the U.S.
We believe that our future cash from domestic and international operations, together with our access to funds available under our unsecured revolving credit facility, will provide adequate resources to fund short-term and long-term operating requirements, capital expenditures, dividend payments, acquisitions, new business development activities and share repurchases.
We believe that our future cash from domestic and international operations, together with our access to funds available under our unsecured revolving credit facility, will provide adequate resources to fund short-term and long-term operating requirements, debt maturities, capital expenditures, dividend payments, acquisitions, new business development activities and share repurchases.
For additional details on these borrowings, including ability and intent assessment on our credit facility agreement with Bank of America, N.A., refer to the information set forth in Part IV—Item 15, “Exhibits, Financial Statement Schedules”, Note 8 – Debt.
For additional details on these borrowings, including ability and intent assessment on our credit facility agreement with Bank of America, N.A., refer to the information set forth in Part IV—Item 15, “Exhibits, Financial Statement Schedules”, Note 9 – Debt.
We target our gross margin to be 55% of net sales, our cost of doing business to be 30% of net sales, and our EBITDA to be 25% of net sales.
We target our gross margin to be 55% of net sales, our cost of doing business to be 30% of net sales, and our Adjusted EBITDA to be 25% of net sales.
Generally, unremitted earnings of our foreign subsidiaries are not considered to be indefinitely reinvested. However, there is an exception regarding specific statutory remittance restrictions imposed on our China subsidiary. Costs associated with repatriating unremitted foreign earnings, 35 Table of Contents including U.S. state income taxes and foreign withholding taxes, are immaterial to our consolidated financial statements.
Generally, unremitted earnings of our foreign subsidiaries are not considered to be indefinitely reinvested. However, there is an exception regarding specific statutory remittance restrictions imposed on our China subsidiary. Costs associated with repatriating unremitted foreign earnings, including U.S. state income taxes and foreign withholding taxes, are immaterial to our consolidated financial statements.
We use results on a constant currency basis as one of the measures to 19 Table of Contents understand our operating results and evaluate our performance in comparison to prior periods in order to enhance the visibility of the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations.
We use results on a constant currency basis as one of the measures to understand our operating results and evaluate our performance in comparison to prior periods in order to enhance the visibility of the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations.
Results of Operations Fiscal Year Ended August 31, 2022 Compared to Fiscal Year Ended August 31, 2021 For discussion related to changes in financial condition and the results of operations for fiscal year 2022 compared to fiscal year 2021, refer to Part II—Item 7.
Fiscal Year Ended August 31, 2023 Compared to Fiscal Year Ended August 31, 2022 For discussion related to changes in financial condition and the results of operations for fiscal year 2023 compared to fiscal year 2022, refer to Part II—Item 7.
Dollar against the Pound Sterling may result in foreign currency related changes to the gross margin percentage in the EMEA segment from period to period; and • Our gross profit and gross margin may not be comparable to those of other consumer product companies, since some of these companies include all costs related to distribution of their products in cost of products sold, whereas we exclude the portion associated with amounts paid to third parties for shipment to our customers from our distribution centers and contract manufacturers and include these costs in selling, general and administrative expenses.
Dollar against the Pound Sterling may result in foreign currency related changes to the gross margin percentage in the EIMEA segment from period to period. • Our gross profit and gross margin may not be comparable to those of other consumer product companies, since some of these companies include all costs related to distribution of their products in cost of products sold, whereas we exclude the portion associated with amounts paid to third parties for shipment to our customers from our distribution centers and contract manufacturers and include these costs in selling, general and administrative 26 Table of Contents expenses.
Cash Flows Fiscal Year Ended August 31, 2022 Compared to Fiscal Year Ended August 31, 2021 For discussion related to changes in the consolidated statements of cash flows for fiscal year 2022 compared to fiscal year 2021, refer to Part II—Item 7.
Cash Flows Fiscal Year Ended August 31, 2023 Compared to Fiscal Year Ended August 31, 2022 For discussion related to changes in the consolidated statements of cash flows for fiscal year 2023 compared to fiscal year 2022, refer to Part II—Item 7.
We review our assumptions and adjust these estimates accordingly on a quarterly basis. Our consolidated financial statements could be materially impacted if the actual promotion rates are different from the estimated rates. If our accrual estimates for sales incentives at August 31, 2023 were to differ by 10%, the impact on net sales would be approximately $1.3 million.
We review our assumptions and adjust these estimates accordingly on a quarterly basis. Our consolidated financial statements could be materially impacted if the actual promotion rates are different from the estimated rates. If our accrual estimates for sales incentives at August 31, 2024 were to differ by 10%, the impact on net sales would be approximately $1.4 million.
The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the Americas segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Increase in average selling price (1) $ 13.6 $ 12.0 $ 11.0 $ 3.5 $ 40.1 (Decrease) increase in sales volume (1) (11.7) (3.8) (1.5) 2.6 (14.4) Currency impact on current period – non-GAAP (0.2) 0.2 0.2 0.6 0.8 Increase in net sales $ 1.7 $ 8.4 $ 9.7 $ 6.7 $ 26.5 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period.
The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the Americas segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Increase (decrease) in average selling price (1) $ 1.8 $ 2.2 $ 0.1 $ (1.6) $ 2.5 Increase (decrease) in sales volume (1) 3.6 (2.4) 3.5 7.0 11.7 Currency impact on current period – non-GAAP 0.7 0.8 0.4 (1.0) 0.9 Increase in net sales $ 6.1 $ 0.6 $ 4.0 $ 4.4 $ 15.1 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period.
Management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing our underlying business performance and trends. However, reference to constant currency basis should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP.
Management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing our underlying business performance and trends. However, reference 20 Table of Contents to constant currency basis should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP.
The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the Asia-Pacific segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Increase in average selling price (1) $ 3.1 $ 0.9 $ 0.6 $ 0.9 $ 5.5 Increase (decrease) in sales volume (1) 3.5 (1.0) 5.5 (4.1) 3.9 Currency impact on current period – non-GAAP (1.4) (0.8) (0.8) (0.6) (3.6) Increase (decrease) in net sales $ 5.2 $ (0.9) $ 5.3 $ (3.8) $ 5.8 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period.
The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the EIMEA segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Increase (decrease) in average selling price (1) $ 0.7 $ 0.0 $ (1.2) $ (0.7) $ (1.2) Increase in sales volume (1) 3.7 5.1 6.5 8.0 23.3 Currency impact on current period – non-GAAP 3.6 2.4 1.6 0.5 8.1 Increase in net sales $ 8.0 $ 7.5 $ 6.9 $ 7.8 $ 30.2 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period.
For additional information on income tax matters, see Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 13 — Income Taxes, included in this report.
For additional information on income tax matters, see Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 14 — Income Taxes, included in this report.
These performance measures are part of our current 55/30/25 business model, which includes gross margin, cost of doing business, and earnings before interest, income taxes, depreciation and amortization (“EBITDA”), the latter two of which are non-GAAP performance measures.
These performance measures are part of our current 55/30/25 business model, which includes gross margin, cost of doing business, and earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”), the latter two of which are non-GAAP performance measures.
Through an analysis of end-of-period shipments for these particular sales, we estimate the time of transit and delivery of product to our customers to determine whether revenue should be recognized during the current reporting period for such shipments.
Through an analysis of end-of-period shipments for these particular sales, we estimate the time of transit and delivery of product to our customers to determine whether revenue should be recognized during the current 34 Table of Contents reporting period for such shipments.
The regions in the EMEA segment where we sell through local distributors include the Middle East, Africa, India, Eastern and Northern Europe.
The regions in the EIMEA segment where we sell through local distributors include the Middle East, Africa, India, Eastern and Northern Europe.
We have the ability to refinance any draws under the line of credit with successive short-term borrowings through the September 30, 2025 maturity date of the Credit Agreement. Outstanding draws for which we have both the ability and intent to refinance with successive short-term borrowings for a period of at least twelve months are classified as long-term.
We have the ability to refinance any draws under the line of credit with successive short-term borrowings through the April 30, 2029 maturity date of the Credit Agreement. Outstanding draws for which we have both the ability and intent to refinance with successive short-term borrowings for a period of at least twelve months are classified as long-term.
Dollar and a significant portion of our consolidated cash balance is denominated in these foreign functional currencies, particularly at our U.K. subsidiary, which operates in Pounds Sterling. As a result, our cash and cash equivalents balances are subject to the effects of the fluctuations in these functional currencies against the U.S. Dollar at the end of each reporting period.
Dollar and a significant portion of our consolidated cash balance is denominated in these foreign functional currencies, particularly at our U.K. subsidiary. As a result, our cash and cash equivalents balances are subject to the effects of the fluctuations in these functional currencies against the U.S. Dollar at the end of each reporting period.
Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2022, which was filed with the SEC on October 24, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2023, which was filed with the SEC on October 23, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2022, which was filed with the SEC on October 24, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2023, which was filed with the SEC on October 23, 2023.
See Note 8 – Debt for additional information on these agreements. We have historically held a balance of outstanding draws on our line of credit in either U.S. Dollars in the Americas segment or in Euros and Pounds Sterling in the EMEA segment. Euro and Pound Sterling denominated draws will fluctuate in U.S.
See Note 9 – Debt for additional information on these agreements. We have historically held a balance of outstanding draws on our line of credit in either U.S. Dollars in the Americas segment or in Euros and Pounds Sterling in the EIMEA segment. Euro and Pound Sterling denominated draws fluctuate in U.S.
The net effect of exchange rate changes on cash and cash equivalents, when expressed in U.S. Dollar terms was an increase in cash of $3.2 million in fiscal year 2023, while such changes resulted in a decrease in cash of $5.0 million for fiscal year 2022, and were not significant 33 Table of Contents in fiscal year 2021.
The net effect of exchange rate changes on cash and cash equivalents, when expressed in U.S. Dollar terms was not significant in fiscal year 2024, while such changes resulted in an increase in cash of $3.2 million for fiscal year 2023, and a decrease in cash of $5.0 million in fiscal year 2022.
Share Repurchase Plans The information required by this item is incorporated by reference to Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 9 — Share Repurchase Plans, included in this report. Dividends We have historically paid regular quarterly cash dividends on our common stock.
Share Repurchase Plans The information required by this item is incorporated by reference to Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 10 — Share Repurchase Plan, included in this report. 33 Table of Contents Dividends We have historically paid regular quarterly cash dividends on our common stock.
Asia-Pacific Asia-Pacific Operating Income – Fiscal Year Ended – August 31, 2023 Compared to August 31, 2022 Income from operations for the Asia-Pacific segment increased to $25.9 million, up $3.3 million, or 15%, primarily due to a $5.8 million increase in sales and a higher gross margin, partially offset by an increase in operating expenses.
Asia-Pacific Asia-Pacific Operating Income – Fiscal Year Ended – August 31, 2024 Compared to August 31, 2023 Income from operations for the Asia-Pacific segment increased to $29.7 million, up $3.8 million, or 15%, primarily due to a $8.0 million increase in sales and a higher gross margin, partially offset by an increase in operating expenses.
For the Americas segment, 78% of sales came from the U.S., and 22% of sales came from Canada and Latin America combined for the fiscal year ended August 31, 2023 compared to the prior fiscal year when 74% of sales came from the U.S., and 26% of sales came from Canada and Latin America combined.
For the Americas segment, 73% of sales came from the U.S., and 27% of sales came from Canada and Latin America combined for the fiscal year ended August 31, 2024 compared to the prior fiscal year when 78% of sales came from the U.S., and 22% of sales came from Canada and Latin America combined.
The countries and regions in Europe where we sell through a direct sales force include the U.K., Italy, France, Iberia (which includes Spain and Portugal) and the Germanics sales region (which includes Austria, Denmark, Switzerland, Belgium and the Netherlands).
The countries and regions in Europe where we sell through a direct sales force include the U.K., Italy, France, Iberia (which includes Spain and Portugal), DACH (which includes Germany, Austria and Switzerland) and Benelux (which includes Belgium, the Netherlands and Luxembourg).
Accounting for Income Taxes Current income tax expense is the amount of income taxes expected to be payable for the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities.
Accounting for Income Taxes A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities.
In addition to the commitments to purchase products from contract manufacturers described above, we may also enter into commitments with other manufacturers to purchase finished goods and components to support innovation initiatives and/or supply chain initiatives. As of August 31, 2023, no such commitments were outstanding.
In addition to the commitments to purchase products from contract manufacturers described above, we may also enter into commitments with other manufacturers to purchase finished goods and components to support innovation initiatives and/or supply chain initiatives. As of August 31, 2024, no such commitments were outstanding. We have also recorded a liability for uncertain tax positions.
On December 13, 2022, our Board approved a 6% increase in the regular quarterly cash dividend, increasing it from $0.78 per share to $0.83 per share. On October 6, 2023, our Board declared a cash dividend of $0.83 per share payable on October 31, 2023 to stockholders of record on October 20, 2023.
On December 12, 2023, our Board approved a 6% increase in the regular quarterly cash dividend, increasing it from $0.83 per share to $0.88 per share. On October 4, 2024, our Board declared a cash dividend of $0.88 per share payable on October 31, 2024 to stockholders of record on October 18, 2024.
Changes in foreign currency exchange rates year over year had an unfavorable impact of $2.4 million on net income for fiscal year 2023. Thus, on a constant currency basis, net income for fiscal year 2023 would have been $68.4 million.
Changes in foreign currency exchange rates year over year had a favorable impact of $1.5 million on net income for fiscal year 2024. Thus, on a constant currency basis, net income for fiscal year 2024 would have been $68.2 million.
Cash flows from operating activities depend heavily on operating performance and changes in working capital. Our primary source of operating cash flows for fiscal year ended August 31, 2023 was net income of $66.0 million, which decreased $1.3 million from period to period.
Cash flows from operating activities depend heavily on operating performance and changes in working capital. Our primary source of operating cash flows for fiscal year ended August 31, 2024 was net income of $69.6 million, which increased $3.7 million from period to period.
Our research and development team engages in consumer research, product development, current product improvements and testing activities. This team leverages its development capabilities by collaborating with a network of outside resources including our current and prospective third-party contract manufacturers.
This team leverages its development capabilities by collaborating with a network of outside resources including our current and prospective third-party contract manufacturers.
Net Income Net income was $66.0 million, or $4.83 per common share on a fully diluted basis, for fiscal year 2023 compared to $67.3 million, or $4.90 per common share on a fully diluted basis, for the prior fiscal year.
Net Income Net income was $69.6 million, or $5.11 per common share on a fully diluted basis, for fiscal year 2024 compared to $66.0 million, or $4.83 per common share on a fully diluted basis, for the prior fiscal year.
Dollar and the Euro against the Pound Sterling. Provision for Income Taxes The provision for income taxes was 22.5% of income before income taxes for the fiscal year ended August 31, 2023 compared to 19.9% for the prior fiscal year.
Dollar and the Euro against the Pound Sterling. Provision for Income Taxes The provision for income taxes was 23.9% and 22.5% of income before income taxes for the fiscal years ended August 31, 2024 and 2023, respectively.
The following table summarizes the results of these performance measures: Fiscal Year Ended August 31, 2023 2022 2021 Gross margin – GAAP 51 % 49 % 54 % Cost of doing business as a percentage of net sales – non-GAAP 33 % 31 % 35 % EBITDA as a percentage of net sales – non-GAAP (1) 18 % 18 % 20 % (1) Percentages may not aggregate to EBITDA percentage due to rounding and because amounts recorded in other income (expense), net on our consolidated statement of operations are not included as an adjustment to earnings in the EBITDA calculation.
However, we intend to focus our resources and investments from the potential sale of those brands on growing our higher growth and higher gross margin core business. 30 Table of Contents The following table summarizes the results of these performance measures: Fiscal Year Ended August 31, 2024 2023 2022 Gross margin – GAAP 53 % 51 % 49 % Cost of doing business as a percentage of net sales – non-GAAP 36 % 33 % 31 % Adjusted EBITDA as a percentage of net sales – non-GAAP (1) 18 % 18 % 18 % (1) Percentages may not aggregate to Adjusted EBITDA percentage due to rounding and because amounts recorded in other income (expense), net on our consolidated statement of operations are not included as an adjustment to earnings in the Adjusted EBITDA calculation.
Cash Flows The following table summarizes our cash flows by category for the periods presented (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Net cash provided by operating activities $ 98,391 $ 2,604 $ 84,714 Net cash used in investing activities (6,216) (7,691) (14,460) Net cash used in financing activities (85,048) (38,011) (40,749) Effect of exchange rate changes on cash and cash equivalents 3,173 (5,020) (6) Net increase (decrease) in cash and cash equivalents $ 10,300 $ (48,118) $ 29,499 Operating Activities Net cash provided by operating activities increased $95.8 million to $98.4 million for fiscal year 2023.
Cash Flows The following table summarizes our cash flows by category for the periods presented (in thousands): Fiscal Year Ended August 31, 2024 2023 2022 Net cash provided by operating activities $ 92,034 $ 98,391 $ 2,604 Net cash used in investing activities (9,735) (6,216) (7,691) Net cash used in financing activities (83,936) (85,048) (38,011) Effect of exchange rate changes on cash and cash equivalents 193 3,173 (5,020) Net (decrease) increase in cash and cash equivalents $ (1,444) $ 10,300 $ (48,118) 32 Table of Contents Operating Activities Net cash provided by operating activities decreased $6.4 million to $92.0 million for fiscal year 2024.
Cost of doing business is defined as total operating expenses less amortization of definite-lived intangible assets, impairment 30 Table of Contents charges related to intangible assets and depreciation in operating departments, and EBITDA is defined as net income before interest, income taxes, depreciation and amortization.
Cost of doing business is defined as total operating expenses less amortization of definite-lived intangible assets, impairment charges related to intangible assets, amortization of implementation costs associated with cloud computing arrangements (“cloud computing amortization”) and depreciation in operating departments. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation, amortization of definite-lived intangible assets, and cloud computing amortization.
Offsetting these increases in cash outflows from period to period was a decrease in treasury stock purchases of $18.7 million, as well as a decrease of $3.6 million in shares withheld to cover taxes on conversion of equity awards. Effect of Exchange Rate Changes All of our foreign subsidiaries currently operate in currencies other than the U.S.
Offsetting these decreases in cash outflows from period to period was an increase in dividends paid to our stockholders of $2.6 million, as well as an increase of $1.6 million in shares withheld to cover taxes on conversion of equity awards. Effect of Exchange Rate Changes All of our foreign subsidiaries currently operate in currencies other than the U.S.
Americas Americas Operating Income – Fiscal Year Ended – August 31, 2023 Compared to August 31, 2022 Income from operations for the Americas increased to $60.8 million, up $6.6 million, or 12%, due to a $26.5 million increase in sales and a higher gross margin, partially offset by higher operating expenses.
Americas Americas Operating Income – Fiscal Year Ended – August 31, 2024 Compared to August 31, 2023 Income from operations for the Americas increased to $65.0 million, up $4.2 million, or 7%, due to a $15.1 million increase in sales and a higher gross margin, partially offset by higher operating expenses.
Changes in foreign currency exchange rates from period to period had an unfavorable impact of $2.4 million on consolidated net income for fiscal year 2023.
Changes in foreign currency exchange rates from period to period had a favorable impact of $1.5 million on consolidated net income for fiscal year 2024.
The following table summarizes gross margin and gross profit (in thousands, except percentages): Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Gross profit $ 274,220 $ 254,765 $ 19,455 Gross margin 51.0 % 49.1 % 190 bps (1) (1) Basis points (“bps”) change in gross margin.
The following table summarizes gross margin and gross profit (in thousands, except percentages): Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Gross profit $ 315,227 $ 274,220 $ 41,007 Gross margin 53.4 % 51.0 % 240 bps (1) (1) Basis points (“bps”) change in gross margin.
Operating expenses increased $10.4 million due to higher employee-related costs as a result of increased headcount and higher accrued incentive compensation. In addition, operating expenses increased due to a higher level of professional services expense, travel and meeting expense and A&P expense. Operating income as a percentage of net sales increased from 22.6% to 22.8% period over period.
Operating expenses increased $3.0 million from period to period primarily due to higher employee-related costs, including increased accrued incentive compensation. In addition, operating expenses increased as a result of a higher level of A&P expenses, professional service costs and travel and meeting expenses. Operating income as a percentage of net sales increased from 32.5% to 33.9% period over period.
On June 19, 2023, our Board approved a share repurchase plan (the “2023 Repurchase Plan”). Under the 2023 Repurchase Plan, which became effective on September 1, 2023, we are authorized to acquire up to $50.0 million of our outstanding shares through August 31, 2025.
Under the 2023 Repurchase Plan, which became effective on September 1, 2023, we are authorized to acquire up to $50.0 million of our outstanding shares through August 31, 2025, of which $41.9 million remained available for the repurchase of shares of common stock as of August 31, 2024.
At August 31, 2023, we had a total of $48.1 million in cash and cash equivalents. We do not foresee any ongoing issues with repaying our borrowings and we closely monitor the use of this credit facility.
We do not foresee any ongoing issues with repaying our borrowings and we closely monitor the use of this credit facility.
See Note 8 – Debt for additional information on these financial covenants. At August 31, 2023, we were in compliance with all material debt covenants. We continue to monitor our compliance with all debt covenants and, at the present time, we believe that the likelihood of being unable to satisfy all material covenants is remote.
At August 31, 2024, we were in compliance with all material debt covenants. We continue to monitor our compliance with all debt covenants and, at the present time, we believe that the likelihood of being unable to satisfy all material covenants is remote. At August 31, 2024, we had a total of $46.7 million in cash and cash equivalents.
Increases in the average selling price of our products positively impacted net sales by approximately $81.9 million from period to period, primarily due to sales price increases implemented across all segments at varying times during the current and prior fiscal year.
Increases in sales volume favorably impacted net sales by approximately $41.3 million from period to period. Increases in the average selling price of our products positively impacted net sales by approximately $4.2 million from period to period, primarily due to sales price increases implemented in certain regions during the prior fiscal year.
Advertising and Sales Promotion (“A&P”) Expenses Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Dollars Percent A&P expenses $ 28,807 $ 27,343 $ 1,464 5 % % of net sales 5.4 % 5.3 % A&P Expenses – Fiscal Year Ended – August 31, 2023 Compared to August 31, 2022 The increase in A&P expenses was primarily due to a higher level of promotional programs and marketing support in the Americas segment.
The level and types of expenses incurred within research and development can vary from period to period depending upon the types of activities being performed. 27 Table of Contents Advertising and Sales Promotion (“A&P”) Expenses Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Dollars Percent A&P expenses $ 33,911 $ 28,807 $ 5,104 18 % % of net sales 5.7 % 5.4 % A&P Expenses – Fiscal Year Ended – August 31, 2024 Compared to August 31, 2023 The increase in A&P expenses was primarily due to a higher level of promotional programs and marketing support, particularly in the Americas and EIMEA segments.
The MD&A is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in Item 15 of this report.
This MD&A includes the following sections: Overview, Highlights, Results of Operations, Performance Measures and Non-GAAP Reconciliations, Liquidity and Capital Resources, Critical Accounting Estimates, and Recently Issued Accounting Standards. The MD&A is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in Item 15 of this report.
EMEA Sales T he following table summarizes net sales by pr oduct line for the EMEA segment (in thousands, except percentages): Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Dollars Percent Maintenance products $ 181,501 $ 196,524 $ (15,023) (8) % Homecare and cleaning products 9,317 8,164 1,153 14 % Total $ 190,818 $ 204,688 $ (13,870) (7) % % of consolidated net sales 36 % 39 % CC Net sales – non-GAAP (1) $ 205,715 $ 204,688 $ 1,027 1 % Currency impact on current period – non-GAAP $ (14,897) (1) Current fiscal year constant currency net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales. 24 Table of Contents The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the EMEA segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Increase in average selling price (1) $ 9.5 $ 11.1 $ 9.7 $ 6.0 $ 36.3 Decrease in sales volume (1) – Russian markets (5.0) (3.3) - - (8.3) Decrease in sales volume (1) – All other markets (13.2) (10.2) (3.5) (0.1) (27.0) Currency impact on current period – non-GAAP (8.0) (4.9) (3.2) 1.2 (14.9) (Decrease) increase in net sales $ (16.7) $ (7.3) $ 3.0 $ 7.1 $ (13.9) (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period.
Asia-Pacific Sales The following table summarizes net sales by product line for the Asia-Pacific segment (in thousands, except percentages): Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Dollars Percent WD-40 Multi-Use Product 67,706 62,056 5,650 9 % WD-40 Specialist 10,096 8,630 1,466 17 % Other maintenance products 1,143 1,023 120 12 % Total maintenance products 78,945 71,709 7,236 10 % HCCP 8,684 7,956 728 9 % Total net sales 87,629 79,665 7,964 10 % % of consolidated net sales 15 % 14 % CC Net sales – non-GAAP (1) $ 88,754 $ 79,665 $ 9,089 11 % Currency impact on current period – non-GAAP $ (1,125) (1) Current fiscal year constant currency net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales. 25 Table of Contents The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the Asia-Pacific segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Increase (decrease) in average selling price (1) $ 1.6 $ 1.4 $ (0.1) $ — $ 2.9 Increase (decrease) in sales volume (1) 0.3 (0.3) 3.0 3.2 6.2 Currency impact on current period – non-GAAP (0.4) (0.3) (0.4) — (1.1) Increase in net sales $ 1.5 $ 0.8 $ 2.5 $ 3.2 $ 8.0 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period.
Highlights The following summarizes the financial and operational highlights for our business during the fiscal year ended August 31, 2023: • Consolidated net sales increased $18.4 million, or 4%, for fiscal year 2023 compared to the corresponding period of the prior fiscal year.
Results from Brazil continue to be reported in the Americas segment for the fiscal year ended August 31, 2024. Highlights The following summarizes the financial and operational highlights for our business during the fiscal year ended August 31, 2024: • Consolidated net sales increased $53.3 million, or 10%, for fiscal year 2024 compared to the prior fiscal year.
There were no other letters of credit outstanding or restrictions on the amount available on our line of credit or notes. Per the terms of both the Note Agreement and the Credit Agreement, our consolidated leverage ratio cannot be greater than three and a half to one and our consolidated interest coverage ratio cannot be less than three to one.
Per the terms of both the Note Agreement and the Credit Agreement, our consolidated leverage ratio cannot be greater than three and a half to one and our consolidated interest coverage ratio cannot be less than three to one. See Note 9 – Debt for additional information on these financial covenants.
Other (Expense) Income, Net Other income (expense), net changed by $1.4 million from period to period which was primarily due to net foreign currency losses during fiscal year 2022 as compared to net foreign currency exchange gains in fiscal year 2023 due to fluctuations in the foreign currency exchange rates for both the U.S.
Interest Expense Interest expense decreased $1.3 million primarily due to a decrease in weighted average outstanding balance on our revolving credit facility slightly offset by higher interest rates related to draws on this credit facility. 29 Table of Contents Other (Expense) Income, Net Other (expense) income, net changed by $1.9 million from period to period which was primarily due to net foreign currency gains during fiscal year 2023 as compared to net foreign currency exchange losses in fiscal year 2024 due to fluctuations in the foreign currency exchange rates for both the U.S.
In determining the transaction price, management evaluates whether the price is subject to refunds or adjustments related to variable consideration to determine the net consideration to which we expect to be entitled. We record estimates of variable consideration as a reduction of sales in the consolidated statements of operations.
Differences in judgments or estimates related to the lengthening or shortening of the estimated delivery time used could result in material differences in the timing of revenue recognition. In determining the transaction price, management evaluates whether the price is subject to refunds or adjustments related to variable consideration to determine the net consideration to which we expect to be entitled.
Reconciliations of these non-GAAP financial measures to our financial statements as prepared in accordance with GAAP are as follows: Cost of Doing Business (in thousands, except percentages): Fiscal Year Ended August 31, 2023 2022 2021 Total operating expenses – GAAP $ 184,496 $ 167,435 $ 174,898 Amortization of definite-lived intangible assets (1,005) (1,434) (1,449) Depreciation (in operating departments) (4,147) (4,369) (4,311) Cost of doing business – non-GAAP $ 179,344 $ 161,632 $ 169,138 Net sales $ 537,255 $ 518,820 $ 488,109 Cost of doing business as a percentage of net sales – non-GAAP 33 % 31 % 35 % 31 Table of Contents EBITDA (in thousands, except percentages): Fiscal Year Ended August 31, 2023 2022 2021 Net income – GAAP $ 65,993 $ 67,329 $ 70,229 Provision for income taxes 19,170 16,779 16,270 Interest income (231) (102) (81) Interest expense 5,614 2,742 2,395 Amortization of definite-lived intangible assets 1,005 1,434 1,449 Depreciation 7,146 6,860 5,570 EBITDA $ 98,697 $ 95,042 $ 95,832 Net sales $ 537,255 $ 518,820 $ 488,109 EBITDA as a percentage of net sales – non-GAAP 18 % 18 % 20 % Liquidity and Capital Resources Overview Our financial condition and liquidity remain strong.
Adjusted EBITDA (in thousands, except percentages): Fiscal Year Ended August 31, 2024 2023 2022 Net income – GAAP $ 69,644 $ 65,993 $ 67,329 Provision for income taxes 21,864 19,170 16,779 Interest income (474) (231) (102) Interest expense 4,287 5,614 2,742 Amortization (1) 2,327 1,005 1,434 Depreciation 8,350 7,146 6,860 Adjusted EBITDA $ 105,998 $ 98,697 $ 95,042 Net sales $ 590,557 $ 537,255 $ 518,820 Adjusted EBITDA as a percentage of net sales – non-GAAP 18 % 18 % 18 % (1) Includes amortization of definite-lived intangible assets and cloud computing amortization. 31 Table of Contents Liquidity and Capital Resources Overview Our financial condition and liquidity remain strong.
Operating income as a percentage of net sales increased from 30.6% to 32.5% period over period. 29 Table of Contents Non-Operating Items The following table summarizes non-operating income and expenses for our consolidated operations (in thousands): Fiscal Year Ended August 31, 2023 2022 Change Interest income $ 231 $ 102 $ 129 Interest expense $ 5,614 $ 2,742 $ 2,872 Other (expense) income, net $ 822 $ (582) $ 1,404 Provision for income taxes $ 19,170 $ 16,779 $ 2,391 Interest Income Interest income was not significant for both the fiscal years ended August 31, 2023 and 2022.
Non-Operating Items The following table summarizes non-operating income and expenses for our consolidated operations (in thousands): Fiscal Year Ended August 31, 2024 2023 Change Interest income $ 474 $ 231 $ 243 Interest expense $ 4,287 $ 5,614 $ (1,327) Other (expense) income, net $ (1,030) $ 822 $ (1,852) Provision for income taxes $ 21,864 $ 19,170 $ 2,694 Interest Income Interest income was not significant for both the fiscal years ended August 31, 2024 and 2023.
This change was primarily due to net repayments on our revolving credit facility of $28.3 million during the fiscal year, compared to net proceeds of $38.4 million in the prior fiscal year. Increases in dividends paid to our stockholders also increased cash used in financing activities by $2.6 million.
This change was primarily due to lower net repayments on our revolving credit facility which was $25.4 million during the fiscal year, compared to $28.4 million in the prior fiscal year, as well as decreases in treasury stock purchases of $2.3 million during the fiscal year compared to the prior period.
This typically occurs when products are shipped or delivered, depending on when risks of loss and title have passed to the customer per the terms of the contract. For certain of our sales we must make judgments and certain assumptions in order to determine when delivery has occurred.
Revenue Recognition Sales are recognized as revenue at a point in time upon transferring control of the product to the customer. This typically occurs when products are shipped or delivered, depending on when risks of loss and title have passed to the customer per the terms of the contract.
(90) bps Higher filling fees paid to our third-party contract manufacturers, primarily in the Americas segment. 27 Table of Contents Selling, General and Administrative (“SG&A”) Expenses Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Dollars Percent SG&A expenses $ 154,684 $ 138,658 $ 16,026 12 % % of net sales 28.8 % 26.7 % SG&A Expenses – Fiscal Year Ended – August 31, 2023 Compared to August 31, 2022 The increase in SG&A expenses was primarily due to increases in employee-related costs of $13.0 million due to increased headcount and annual compensation increases, as well as higher incentive compensation accruals.
Gross Margin – Fiscal Year Ended – August 31, 2024 Compared to August 31, 2023 Gross margin increased 240 bps primarily due to the following favorable impacts: Favorable Explanations 130 bps Favorable sales mix and other miscellaneous mix impacts 80 bps Lower costs of specialty chemicals used in the formulation of our products 80 bps Lower warehousing, distribution and freight costs, primarily in the Americas segment Selling, General and Administrative (“SG&A”) Expenses Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Dollars Percent SG&A expenses $ 183,859 $ 154,684 $ 29,175 19 % % of net sales 31.1 % 28.8 % SG&A Expenses – Fiscal Year Ended – August 31, 2024 Compared to August 31, 2023 The increase in SG&A expenses was primarily due to increases in employee-related costs of $16.1 million primarily due to an increase in accrued incentive compensation of $8.8 million, as well as annual compensation increases and higher headcount.
These favorable impacts were partially offset by decreases in sales volume, which unfavorably impacted net sales by approximately $45.8 million from period to period. Changes to net sales attributable to volumes and average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period.
Changes to net sales attributable to volumes and average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. In addition, changes in foreign currency exchange rates from period to period had a favorable impact of $7.8 million on consolidated net sales for the fiscal year 2024.
Americas Sales – Fiscal Year Ended – August 31, 2023 Compared to August 31, 2022 Net sales of maintenance products in the Americas segment increased primarily due to the following (by region): • U.S. sales increased $30.8 million, or 17%.
Americas Sales – Fiscal Year Ended – August 31, 2024 Compared to August 31, 2023 Net sales in the Americas segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $14.1 million, or 7%, primarily due to the increase in Latin America of $14.8 million, or 40%.
Note 2 to our consolidated financial statements included in Item 15 of this report includes a discussion of our significant accounting policies. The accounting policies discussed below are the ones we consider to be most critical to an understanding of our consolidated financial statements because their application places the most significant demands on our judgment.
The accounting estimates discussed below are the ones we consider to be most critical to an understanding of our consolidated financial statements because their application places the most significant demands on our judgment. Our financial results may have varied from those reported had different assumptions been used or other conditions prevailed.
In the United States, we held $67.6 million in fixed rate long-term borrowings as of August 31, 2023, consisting of senior notes under our Note Agreement. We paid $0.8 million in principal payments on our Series A Notes during fiscal year 2023.
As of August 31, 2024, $20.0 million of the facility was classified as long-term and was entirely denominated in Euros. $7.8 million was classified as short-term and was entirely denominated in U.S. Dollars. In the United States, we held $66.8 million in fixed rate long-term borrowings as of August 31, 2024, consisting of senior notes under our Note Agreement.
Changes in our working capital, which increased net cash provided by operating activities, were primarily attributable to a decrease in inventory during the fiscal year 2023 compared to a significant increase in inventory in the corresponding period of the prior fiscal year, which resulted in a $72.6 million favorable impact period over period to our cash provided by operating activities.
Changes in our working capital increased net cash provided by operating activities by $4.6 million for the fiscal year 2024, compared to a $19.5 million increase in the prior fiscal year. The unfavorable net change in working capital was primarily attributable to changes in inventory and trade and other accounts receivable.
Therefore, our total investment in A&P activities totaled $57.9 million and $55.4 million for the fiscal years ended August 31, 2023 and 2022, respectively. 28 Table of Contents Income from Operations by Segment The following table summarizes income from operations by segment (in thousands, except percentages): Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Dollars Percent Americas $ 60,797 $ 54,198 $ 6,599 12 % EMEA 39,456 42,058 (2,602) (6) % Asia-Pacific 25,887 22,590 3,297 15 % Unallocated corporate (1) (36,417) (31,516) (4,901) (16) % Total $ 89,723 $ 87,330 $ 2,393 3 % (1) Unallocated corporate expenses are general corporate overhead expenses not directly attributable to any one of the business segments.
Income from Operations by Segment The following table summarizes income from operations by segment (in thousands, except percentages): Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Dollars Percent Americas $ 65,037 $ 60,797 $ 4,240 7 % EIMEA 46,809 39,456 7,353 19 % Asia-Pacific 29,714 25,888 3,826 15 % Unallocated corporate (1) (45,209) (36,417) (8,792) (24) % Total $ 96,351 $ 89,724 $ 6,627 7 % (1) Unallocated corporate expenses are general corporate overhead expenses not directly attributable to any one of the business segments.
Gross margin for the Americas segment increased from 47.3% to 48.9% primarily due to the favorable impact of price increases implemented during the last twelve months, offset by increases in the costs of petroleum-based specialty chemicals and concentrate costs at our third-party manufacturers due to inflationary impacts.
Gross margin for the Americas segment increased from 48.9% to 50.9% primarily due to the favorable impact of price increases and decreases to costs of petroleum-based specialty chemicals as well as lower warehousing, distribution and freight costs from period to period.
In addition, changes in foreign currency exchange rates from period to period had an unfavorable impact of $17.7 million on consolidated net sales for fiscal year 2023. On a constant currency basis, net sales would have increased by $36.1 million, or 7% for fiscal year 2023 compared to the prior fiscal year.
On a constant currency basis, net sales would have increased by $45.5 million, or 8% for fiscal year 2024 compared to the prior fiscal year.
EMEA EMEA Operating Income – Fiscal Year Ended – August 31, 2023 Compared to August 31, 2022 Income from operations for the EMEA segment decreased to $39.5 million, down $2.6 million, or 6%, primarily due to a $13.9 million decrease in sales, which was slightly offset by a higher gross margin.
Operating income as a percentage of net sales increased from 22.8% to 23.1% period over period. 28 Table of Contents EIMEA EIMEA Operating Income – Fiscal Year Ended – August 31, 2024 Compared to August 31, 2023 Income from operations for the EIMEA segment increased to $46.8 million, up $7.4 million, or 19%, primarily due to a $30.2 million increase in sales and a higher gross margin, which was partially offset by higher operating expenses.
This unfavorable impact from changes in foreign currency exchange rates mainly came from our EMEA segment, which accounted for 36% of our consolidated sales for the fiscal year ended August 31, 2023. • Gross profit as a percentage of net sales increased to 51.0% for fiscal year 2023 compared to 49.1% for the prior fiscal year, primarily due to the positive impacts of price increases implemented at varying times during the current and prior fiscal year, offset by ongoing global supply chain challenges, including the increased cost of raw materials and changes in consumer behavior as a result of inflation.
This favorable impact from changes in foreign currency exchange rates mainly came from our EIMEA segment, which accounted for 37% of our consolidated sales for the fiscal year ended August 31, 2024. • Gross profit as a percentage of net sales increased to 53.4% for fiscal year 2024 compared to 51.0% for the prior fiscal year. • Consolidated net income increased $3.7 million, or 6%, for fiscal year 2024 compared to the corresponding period of the prior fiscal year.
These costs totaled $17.1 million and $18.6 million for the fiscal years ended August 31, 2023 and 2022, respectively. • For further information pertaining to recent trends and economic conditions affecting gross margin, please see the section titled “Significant Developments” .
These costs totaled $17.3 million and $17.1 million for the fiscal years ended August 31, 2024 and 2023, respectively.
Asia-Pacific Sales The following table summarizes net sales by product line for the Asia-Pacific segment (in thousands, except percentages): Fiscal Year Ended August 31, 2023 2022 Change from Prior Year Dollars Percent Maintenance products $ 71,709 $ 65,332 $ 6,377 10 % Homecare and cleaning products 7,956 8,567 (611) (7) % Total $ 79,665 $ 73,899 $ 5,766 8 % % of consolidated net sales 14 % 14 % CC Net sales – non-GAAP (1) $ 83,221 $ 73,899 $ 9,322 13 % Currency impact on current period – non-GAAP $ (3,556) (1) Current fiscal year constant currency net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales.
EIMEA Sales T he following table summarizes net sales by pr oduct line for the EIMEA segment (in thousands, except percentages): Fiscal Year Ended August 31, 2024 2023 Change from Prior Year Dollars Percent WD-40 Multi-Use Product 168,450 142,965 25,485 18 % WD-40 Specialist 30,876 27,029 3,847 14 % Other maintenance products 12,741 11,507 1,234 11 % Total maintenance products 212,067 181,501 30,566 17 % HCCP 8,978 9,317 (339) (4) % Total net sales 221,045 190,818 30,227 16 % % of consolidated net sales 37 % 36 % CC Net sales – non-GAAP (1) $ 212,981 $ 190,818 $ 22,163 12 % Currency impact on current period – non-GAAP $ 8,064 (1) Current fiscal year constant currency net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales.
Our targets for gross margin and these other performance measures are long-term in nature and we expect to make progress towards them over time. For more detailed information pertaining to recent trends and economic conditions and the actions we are taking to respond to them, please see the section titled “Significant Developments”.
Our targets for gross margin and these other performance measures are long-term in nature and we expect to make progress towards them over time. Given the anticipated divestiture of certain of our household brands, progression on certain aspects of our business model may be challenged if the potential divestiture occurs.
We continued our research and development investment, the majority of which is associated with our maintenance products, in support of our focus on innovation and renovation of our products. Research and development costs for the fiscal years ended August 31, 2023 and 2022 were $6.2 million and $5.1 million, respectively.
Unfavorable changes in foreign currency exchange rates increased SG&A expenses by $2.1 million from period to period. We continued our research and development investment, the majority of which is associated with our maintenance products, including efforts focused on sustainability as well as our focus on innovation and renovation of our products.
Operating expenses increased $1.2 million from period to period primarily due to higher A&P expenses and travel and meetings expense.
Operating expenses also increased due to to a higher level of A&P expenses and travel and meeting expense in support of our strategic framework.
On a constant currency basis, sales in Australia would have increased $1.1 million, or 5% due to the favorable impact of price increases.
On a constant currency basis, sales in EIMEA would have increased 12%.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur U.K. subsidiary, whose functional currency is Pounds Sterling, utilizes foreign currency forward contracts to limit our exposure to net asset balances held in non-functional currencies. We regularly monitor our foreign exchange exposures to ensure the overall effectiveness of our foreign currency hedge positions.
Biggest changeOur U.K. subsidiary utilizes foreign currency forward contracts to limit our exposure to net asset balances held in non-functional currencies. We regularly monitor our foreign exchange exposures to ensure the overall effectiveness of our 35 Table of Contents foreign currency hedge positions.
Dollar borrowings) • Sterling Overnight Index Average Reference Rate (Pound Sterling borrowings) • Euro Interbank Offered Rate (Euro borrowings) As of August 31, 2023, our primary interest rate exposure was from changes in interest rates which affect the variable rate on our revolving credit facility.
Dollar borrowings) • Sterling Overnight Index Average Reference Rate (Pound Sterling borrowings) • Euro Interbank Offered Rate (Euro borrowings) As of August 31, 2024, our primary interest rate exposure was from changes in interest rates which affect the variable rate on our revolving credit facility.
Based on the outstanding balance on our revolving credit facility as of August 31, 2023, the annualized effect of a one percentage point increase in variable interest rates would have resulted in a pretax reduction of our earnings and cash flows of approximately $0.5 million in fiscal year 2023.
Based on the outstanding balance on our revolving credit facility as of August 31, 2024, the annualized effect of a one percentage point increase in variable interest rates would have resulted in a pretax reduction of our earnings and cash flows of approximately $0.3 million in fiscal year 2024.
We do not currently have a strategy or policy to enter into transactions to hedge crude oil price volatility, but we regularly review this policy based on market conditions and other factors.
We do not currently have a strategy or policy to enter into transactions to hedge crude oil price volatility, but we regularly review our position based on market conditions and other factors.
For additional details on our long-term borrowings as of August 31, 2023, refer to the information set forth in Part IV—Item 15, “Exhibits, Financial Statement Schedules” and Note 8 – Debt. Interest rates associated with this revolving credit facility are based on the following rates: • Bloomberg Short-term Bank Yield Index Rate (U.S.
For additional details on our long-term borrowings as of August 31, 2024, refer to the information set forth in Part IV—Item 15, “Exhibits, Financial Statement Schedules” and Note 9 – Debt. Interest rates associated with this revolving credit facility are based on the following rates: • Secured Overnight Financing Rate (U.S.
Dollars or in foreign currencies from time to time until September 30, 2025. In addition, we had $67.6 million in fixed rate borrowings consisting of senior notes under our note purchase agreements as of August 31, 2023.
Dollars or in foreign currencies from time to time until April 30, 2029. In addition, we had $66.8 million in fixed rate borrowings consisting of senior notes under our note purchase agreements as of August 31, 2024.
As of August 31, 2023, our weighted average cost of short-term debt, including both fixed and variable rate borrowings, was 5.6% . 36 Table of Contents
As of August 31, 2024, our weighted average cost of short-term debt, including both fixed and variable rate borrowings, was 6.1% .
Interest Rate Risk As of August 31, 2023, we had a $52.9 million outstanding balance on our existing $150.0 million revolving credit facility agreement with Bank of America, N.A. This $150.0 million revolving credit facility is subject to interest rate fluctuations. Under the terms of the credit facility agreement, we may borrow loans in U.S.
Interest Rate Risk As of August 31, 2024, we had a $27.8 million outstanding balance on our existing $125.0 million revolving credit facility agreement with Bank of America, N.A. This $125.0 million revolving credit facility is subject to interest rate fluctuations. Under the terms of the credit facility agreement, we make borrowings in U.S.

Other WDFC 10-K year-over-year comparisons