WD-40 Company
Annual Report 2022

Plain-text annual report

2022 ANNUAL REPORT WE MEASURE OUR RESULTS BY DRIVING PROGRESS AND SUSTAINING SUCCESS WD-40 Company has a long record of success, but it is the future that is truly exciting. A wise man once said, “None of us is smarter than all of us.” We believe this adage to be true. Our global leadership team is composed of a group of leaders who have more than 225 collective years of experience working at WD-40 Company. These individuals oversee a broad cross-section of global functions and come from a myriad of cultures, backgrounds, and experiences because we believe that diversity in thought leads to better strategic decision making. Together with our tribemates, our global leadership team will drive progress and sustain success in fiscal year 2023 and beyond. Global Strategic Council 43% FEMALE 57% MALE AGE DIVERSIT Y 4 members age: 36-45 4 members age: 46-54 6 members age: 55 and over AVERAGE TENURE 17 YEARS Global Strategic Council from top left to right: Mike Starzman, Bill Noble, Geoff Holdsworth, Preston Ley, Jeff Lindeman, Steve Brass, Jay Rembolt, Christophe Cloez, Sara Hyzer, Meghan Lieb, Patricia Olsem, Wendy Kelley, Phenix Kiamilev Maintenance Product Revenue (in millions) We have sustained our maintenance product revenue at a compound annual growth rate of 6.4% over the last 10 years. 1FY22 presented as reported, all prior years presented on a constant currency basis using FY22 foreign currency exchange rates 91% OF EMPLOYEES IDENTIFY WITH THE COMPANY’S PURPOSE Build a Business for the Future We are building an enduring business that we will be proud to pass to the next generation. By using our purpose and values as a decision-making filter, we will make infinite-minded decisions that create and protect long-term stakeholder value. OUR PURPOSE We exist to create positive lasting memories in everything we do. We solve problems. We make things work smoothly. We create opportunities. “I grew up at WD-40 Company. To grow up means you have a community of people who let you grow up. They allow you the space to learn and to grow and they remind you of your strengths when you forget. I have been surrounded by these people throughout my career and they have enabled me to sustain my personal success.” Alice-Kate Lamb, Tribemate, Americas Segment WD-40 COMPANY | 2022 ANNUAL REPORT 1 WD-40 Company that Steve brings with him, there are many talented people within the organization from all functions, trade blocs, countries, and time zones who are committed to ensuring that millions of new people will meet the blue and yellow can with the little red top for the first time in the years to come. The Future As we move into fiscal year 2023, the “long-term 2025 revenue targets” that you have heard me speak about many times over the years are just three short fiscal years away. Our global leadership team remains committed to the ompany’s 2025 revenue aspirations and to the 55/30/25 business model. I have every confidence that they will be able to achieve these objectives and I will be cheering them on from the sidelines. c For me it’s not goodbye. As I begin the next chapter of my life, I remain chairman of WD-40 Company through our 2022 Annual Meeting of Stockholders and then I will transition to the role of chairman emeritus of WD-40 Company. In my role as chairman emeritus, I will have no formal authority or responsibilities, but it means I can proudly say I remain a member of the WD-40 Company tribe. I would like to say thank you to the tribe members of WD-40 Company for allowing me the privilege of being your leader for the last 25 years. I was honored to stand on the shoulders of giants. Thank you for helping me build an enduring business that I am proud to pass onto the next generation. Believe in yourself, never give up, take one day at a time, we all have something significant yet to do. Cheers, Garry O. Ridge CHAIRMAN OF THE BOARD G’day fellow stockholders, I am privileged to write my 25th letter to the stockholders of WD-40 Company. If WD-40 Company was a member of the S&P 500, I would be the 9th longest serving active CEO amongst those companies. I am grateful to have served this wonderful tribe and all its stakeholder for so many years. In business, there are headwinds and tailwinds, and both are usually manageable because we are aware of them and can plan accordingly. We had plenty of headwinds and tailwinds in fiscal year 2022, but we also had turbulence. Turbulence is more difficult to navigate because you do not see it coming, you don’t know how long it will last, and you can’t properly plan for it. The turbulence we experienced in fiscal year 2022 came primarily in the form of higher input costs associated with historic levels of inflation around the globe. The inflationary environment we operated in throughout fiscal year 2022 resulted in gross margin declining by 490 basis points compared to the prior fiscal year period. The current inflationary environment disrupted our ability to achieve our 55 percent gross margin target in fiscal year 2022, but our global leadership team remains committed to the ompany’s 55/30/25 business model. c When I took over as chief executive officer of this wonderful c ompany in 1997, we had a dream. We wanted to take the blue and yellow can with the little red top to the world. Today I am extremely pleased to say that you can find WD-40® Multi-Use Product in 176 countries and territories around the world. Indeed, the sun never sets on WD-40® Multi-Use Product. This dream was not something that I could accomplish on my own. As Marshall Goldsmith once said, “The best leaders understand that long-term results are created by all the great people doing the work — not just the one person who has the privilege of being at the top.” I have had the honor of working with many exceptional people during my tenure at WD-40 Company, many of whom remain on our global leadership team today. Earlier this year, I shared my intention to retire from my role as chief executive officer and formally handed the CEO reins to my successor, Steve Brass, on September 1, 2022 as part of our planned leadership transition. I have worked with Steve for over three decades and I am incredibly pleased that he is my successor. In addition to the 31 years of experience within 2 WD-40 COMPANY | 2022 ANNUAL REPORT“One of the essential distinguishers of a high-growth company is learning velocity: companies that learn faster, grow faster.” Dr. Rebecca Homkes Dear fellow stockholders, Fiscal year 2022 was a challenging year dominated by economic, financial, and political challenges as well as continuing disruptions caused by the global pandemic. I am happy to share with you that we learned to expect the unexpected this fiscal year and I believe we are a better prepared and more agile organization because of the challenges we’ve faced. We are pleased we were able to achieve solid topline growth of our maintenance products in this volatile environment, including 8 percent growth of WD-40® Multi-Use Product and 19 percent growth of WD-40 Specialist® for the full fiscal year. All three of our segments grew in local currencies in fiscal year 2022, but we saw substantial strength in certain geographies. For the full fiscal year, revenue in the Americas was up 12 percent to $240.2 million primarily driven by strong sales of maintenance products throughout the region. We generated 10 percent growth of maintenance products in our largest market, the United States. We also generated significant sales growth throughout the Latin American region, including our newest direct market, Mexico, which continues to perform extremely well. For the full fiscal year, revenue in EMEA was down 2 percent to $204.7 million. Our EMEA segment was unfavorably impacted by the weakening of the Pound Sterling against the U.S. Dollar this year. On a constant currency basis, sales would have increased by about 2 percent in our EMEA segment. In addition, in early March 2022, we made the values-guided decision to suspend sales of our all our products to our marketing distributor customers in Russia and Belarus and this decision has had an unfavorable impact on our sales in this region. In Asia-Pacific, which is our smallest but historically fastest growing segment, revenue was up 13 percent to $73.9 million in fiscal year 2022 primarily due to higher sales within our Asia distributor markets. Our marketing distributor markets in the region have seen immense success with promotional programs and have continued to benefit from the easing of COVID-19 lockdown measures throughout the fiscal year. 2025 Strategy and Must-Win Battles We have a simple strategy, a practical business model, and a significant and realistic opportunity to drive revenue growth well beyond the 2025 targets over the longer-term. I am absolutely committed to our 2025 revenue growth target, which is to drive net sales to between $650 - $700 million by the end of fiscal year 2025. Our Must-Win Battles are the primary areas of action that will enable us to deliver against our aspirations. These hyper-focused actions support our overall strategy and are the key drivers of revenue growth. Must-Win Battle #1 – Geographic Expansion Our largest growth opportunity and first Must-Win Battle is the geographic expansion of the blue and yellow can with the little red top. We continue to experience growth of our flagship brand with global sales of WD-40® Multi-Use Product up 8 percent in fiscal year 2022. We’ve seen tremendous growth in markets like China, Mexico, and India, where in fiscal year 2022 we saw growth of 13 percent, 31 percent, and 45 percent, respectively. Steve Brass PRESIDENT AND CHIEF EXECUTIVE OFFICER 3 WD-40 COMPANY | 2022 ANNUAL REPORTMust-Win Battle #2 – Premiumization Our second Must-Win Battle is to grow WD-40® Multi-Use Product through premiumization. Premiumization creates opportunities for revenue growth and gross margin expansion. Most importantly, it delights our end-users. In fiscal year 2022, sales of WD-40® Smart Straw® and EZ-Reach®, when combined, grew 4 percent year over year, with growth across all three trade blocs, and currently represent 47 percent of global sales of WD-40® Multi-Use Product. Must-Win Battle #3 – WD-40 Specialist® Our third Must-Win Battle is to grow the WD-40 Specialist® product line. We saw sales growth of WD-40 Specialist® across all our segments, but the United States saw outstanding growth of WD-40 Specialist® reporting an increase of 51 percent compared to last year. As you might recall, in early fiscal year 2020 we debuted new packaging for WD-40 Specialist®. This gave us stronger brand presence for both WD-40® Multi-Use Product and WD-40 Specialist®, aligning them as the blue and yellow brand with the little red top. We believe the new brand architecture is improving the sell through of our WD-40 Specialist® brand products. Must-Win Battle #4 – Digital Commerce Our final Must-Win Battle is focused on driving digital commerce. Our vision for digital commerce is to engage with end-users at scale, making it easy to access, learn about, and purchase our brands. In fiscal year 2022, global ecommerce sales were down 8 percent compared to last fiscal year. Despite our lower level of ecommerce sales this fiscal year, there is a significant opportunity ahead of us in this space as we continue our digital transformation journey. The Road Ahead Looking beyond 2025, I believe there is huge runway for long-term revenue growth for our company. I’d like to take this opportunity to share my three strategic priorities during my tenure as CEO. They are: • Pivot the company toward a sustainable future. I consider the environment to be a key stakeholder and making decisions that create and protect long-term value must take that key stakeholder into consideration. • Further leverage our capability as a global learning and teaching organization. I believe if we learn faster, we can grow faster. • Realize the huge growth potential present in emerging markets. I believe the long-term global market growth opportunity for WD-40® Multi-Use Product alone is over one billion dollars. Final Remarks I want to take this opportunity to thank Garry and Jay for their relentless commitment to our company and its stakeholders. Their fingerprints are all over this wonderful company and I honestly don’t think I could be inheriting a better situation. The blue and yellow brand with the little red top is one of the most widely distributed, and consistently executed global brands. As Garry always said, “The sun never sets on WD-40.” And then of course there is our secret formula. Not the one found inside the blue and yellow can with the little red top. But rather our wonderful global tribemates. I want to thank our tribemates for their unrelenting commitment during these challenging times. It’s a great honor to be able to serve this tribe. Our tribemates are the secret to our success. They are our competitive advantage and a critical multiplier of our strategic effectiveness. They will enable us to drive progress and sustain success so that we will thrive in the future. Steve Brass PRESIDENT AND CHIEF EXECUTIVE OFFICER 4 W W W.WD40COMPANY.COM/OUR-COMPANY/CORPORATE-RESPONSIBILITY TO VIEW OUR 2022 ESG REPORT, PLEASE VISIT: WD-40 COMPANY | 2022 ANNUAL REPORTFISCAL YEAR 2022 NET SALES BY SEGMENT AMERICAS EMEA ASIA-PACIFIC $ 240.2 MILLION REPRESENTS 47% OF GLOBAL SALES IN FY2022 $ 204.7 MILLION REPRESENTS 39% OF GLOBAL SALES IN FY2022 $ 73.9 MILLION REPRESENTS 14% OF GLOBAL SALES IN FY2022 5 WD-40 COMPANY | 2022 ANNUAL REPORTTo offset the impacts of inflation, we began implementing price increases across all our markets and geographies beginning in the first quarter of fiscal year 2022. Price increases take time to embed their way into our reported results, but I am confident that our plans to rebuild margin, coupled with the advancement of our margin accretive Must-Win Battles, will enable us to deliver on our long-term margin goals. Creating Long-Term Value We continue to maintain a strong balance sheet and solid stockholder returns. Our capital allocation strategy remains firm and includes a comprehensive approach to balance investing in long-term growth while providing strong returns. During fiscal year 2022, we returned $71.1 million to our stockholders through regular cash dividends and share repurchases. We repurchased approximately 139,000 shares of our stock at a total cost of approximately $29.2 million. In the second quarter of fiscal year 2022, our Board of Directors declared an 8 percent increase in our regular quarterly dividend. In total, we delivered a return on invested capital to stockholders of 23 percent in fiscal year 2022. In closing, I would like to take this opportunity to say thank you to the tribe and all of our stakeholders for allowing me to serve as CFO of this wonderful company for the last 14 years. I have made so many positive lasting memories with you all, and I am grateful for each one. Jay Rembolt VICE PRESIDENT, FINANCE, TREASURER AND CHIEF FINANCIAL OFFICER Dear fellow stockholders, Each year, I look forward to updating our stockholders on the company’s financial performance. I can hardly believe that this is the last annual update I will ever write about WD-40 Company. However, I can confidently tell you that I am handing the CFO baton to an extremely capable leader. Sara Hyzer has worked alongside our global finance and accounting team as a financial strategist for over a year now. Her financial expertise and growth mindset are an excellent fit for our company and its culture, and she is committed to WD-40 Company’s stakeholders and financial success. This year we saw both opportunities and challenges as we continued to navigate uncertain times. Thanks to our talented and committed tribe, our net sales increased 6 percent over last year to a record $518.8 million. Changes in foreign currency exchange rates had an unfavorable impact on our net sales for this year. On a constant currency basis, net sales would have increased 8 percent over last year. Our net income and diluted earnings per common share were both down in fiscal year 2022 due primarily to the challenging inflationary environment we continue to operate in. Net income was $67.3 million for the full fiscal year, reflecting a decrease of 4 percent over the previous fiscal year. Diluted earnings per common share were $4.90 compared to $5.09 in the prior fiscal year. Our 55/30/25 Business Model The current inflationary environment has severely impacted our ability to achieve our 55 percent gross margin goal over the near-term. Our discipline and diligence around our 55/30/25 business model remain a top priority for us. The model targets a gross margin at or above 55 percent of net sales, a cost of doing business of 30 percent of net sales, and an EBITDA of 25 percent of net sales. For the full fiscal year 2022, our gross margin fell significantly to 49 percent, compared to 54 percent last year. Our cost of doing business decreased to 31 percent, compared to 35 percent last year. And EBITDA decreased to 18 percent, compared to 20 percent last year. All three measures were impacted by inflationary headwinds which affected our overall costs. 6 WD-40 COMPANY | 2022 ANNUAL REPORTFISCAL YEAR 2022 RESULTS 13%13% RETURN ON SALES1 16%16% RETURN ON ASSETS2 Gross Margin (percent) Sales Per Employee (in millions) 23%23% RETURN ON INVESTED CAPITA L 3 Weighted-Average Common Shares Outstanding, Diluted (in millions) Net Sales (in millions) Diluted Earnings Per Common Share (in dollars) Net Income (in millions) 1 Calculated as net income for fiscal year 2022 divided by net sales for 2022. 2 Calculated as net income for fiscal year 2022 divided by total assets at 8/31/22. 3 Calculated as net operating profit after tax divided by average total assets less cash and cash equivalents, short-term investments and noninterest bearing liabilities. 7 WD-40 COMPANY | 2022 ANNUAL REPORTPERFORMANCE GRAPH The following graph compares the cumulative total stockholder return on the company’s Common Stock to the yearly weighted cumulative return of a peer group of companies, the Standard & Poor’s 500 Composite Index (“S&P 500”) and the Russell 2000 Composite Stock Index (“Russell 2000”) for each of the last five fiscal years ending August 31, 2022. c The ompany uses the same peer group for the Committee of the Board of Directors for purposes of benchmarking executive compensation. ompany c ’s five-year performance graph as the peer group of companies used by the Compensation During fiscal year 2022, Landec Corporation and Rayonier Advanced Materials, Inc. were removed from the peer group as they were no longer ompany considered reasonably comparable to the international chemicals company that more closely meets the peer group criteria, was added. based on revenues, market capitalization and/or primary business focus. Livent Corporation, an c The below comparison assumes $100 was invested on August 31, 2017 in the 2022 Peer Group, and assumes reinvestment of dividends. c ompany ’s Common Stock, and in each of the major stock indices and $240 $220 $200 $180 $160 $140 $120 $100 $80 8 (1) WD-40 Company’s peer group is comprised of the following 13 companies: • American Vanguard Corporation • Balchem Corporation • Chase Corporation • Dorman Products, Inc. • Hawkins, Inc. • Ingevity Corporation • Innospec Inc. • Livent Corporation • Prestige Consumer Healthcare, Inc. • Quaker Chemical Corporation • Sensient Technologies Corporation • Stoneridge Inc. • USANA Health Sciences, Inc. WD-40 COMPANY | 2022 ANNUAL REPORT TABLE OF CONTENTS WD-40 Company Proxy Statement WD-40 Company Annual Report on Form 10-K WD-40 Company Corporate Information UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant  Filed by a party other than the Registrant  Check the appropriate box:  Preliminary Proxy Statement  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))  Definitive Proxy Statement  Definitive Additional Materials  Soliciting Material under §240.14a-12 WD-40 COMPANY (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check all boxes that apply):  No fee required  Fee paid previously with preliminary materials  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 9715 Businesspark Avenue San Diego, California 92131 NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS To the Stockholders: The 2022 Annual Meeting of Stockholders (“annual meeting”) of WD-40 Company (“Company”) will be held solely via a live audio webcast at the following virtual location and for the following purposes: When: Where: Items of Business: Who Can Vote: Attending the Virtual Annual Meeting Tuesday, December 13, 2022 at 10:00 a.m., Pacific Time https://meetnow.global/M9Z7T5K 1. To elect a Board of Directors (“Board”) for the ensuing year and until their successors are elected and qualified; 2. To hold an advisory vote to approve executive compensation; 3. To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023; and 4. To consider and act upon such other business as may properly come before the annual meeting. Only the stockholders of record at the close of business on October 17, 2022 are entitled to vote at the annual meeting. The Proxy Statement, enclosed form of proxy, and the Company’s 2022 Annual Report (collectively, “proxy materials”) are first sent to stockholders on or about November 2, 2022. In order to expand access to our stockholders, this year’s annual meeting will be conducted virtually. You may attend and participate in the annual meeting online, vote your shares electronically, and submit your questions prior to and during the annual meeting by visiting: https://meetnow.global/M9Z7T5K. There is no physical location for the annual meeting. Please see “How can I participate in the virtual annual meeting?” beginning on page 1 for information about how to attend and participate in the annual meeting. REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS: VIA THE INTERNET Visit the website listed on your proxy card BY MAIL Sign, date and return your proxy card in the enclosed envelope BY TELEPHONE Call the telephone number on your proxy card VIA LIVE VIRTUAL MEETING Attend the annual meeting at https://meetnow.global/M9Z7T5K By Order of the Board of Directors, Phenix Q. Kiamilev Vice President, General Counsel and Corporate Secretary San Diego, California November 2, 2022 TABLE OF CONTENTS PROXY STATEMENT SUMMARY FAQS AND GENERAL INFORMATION HOUSEHOLDING OF PROXY MATERIALS PROPOSALS: ITEM NO. 1: ELECTION OF DIRECTORS ITEM NO. 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION ITEM NO. 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Section 16(a) Beneficial Ownership Reporting Compliance BOARD OF DIRECTORS AND CORPORATE GOVERNANCE Board Leadership, Risk Oversight and Compensation-Related Risk Board Meetings, Committees and Annual Meeting Attendance Equity Holding Requirement for Directors Insider Trading Policy – Prohibited Trading Transactions Stockholder Communications with Directors DIRECTOR COMPENSATION BOARD COMMITTEES Corporate Governance Committee Corporate Governance Committee - Nomination Policies and Procedures Audit Committee Finance Committee Compensation Committee Compensation Committee – Interlocks and Insider Participation ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT INFORMATION REGARDING OUR EXECUTIVE OFFICERS COMPENSATION DISCUSSION AND ANALYSIS Executive Summary of Compensation Decisions and Results Governance of Executive Officer Compensation Program Executive Compensation Philosophy and Framework Executive Officer Compensation Decisions for Fiscal Year 2022 Other Compensation Policies COMPENSATION COMMITTEE REPORT EXECUTIVE COMPENSATION Summary Compensation Table Grants of Plan-Based Awards – Fiscal Year 2022 Outstanding Equity Awards at 2022 Fiscal Year End Stock Vested – Fiscal Year 2022 Nonqualified Deferred Compensation – Fiscal Year 2022 Supplemental Death Benefit Plans and Supplemental Insurance Benefits Change of Control Severance Agreements CEO Pay Ratio EQUITY COMPENSATION PLAN INFORMATION AUDIT RELATED MATTERS Fees Paid to Independent Registered Accounting Firm Pre-approval Policies and Procedures Related Party Transactions Review and Oversight AUDIT COMMITTEE REPORT STOCKHOLDER PROPOSALS FOR OUR 2023 ANNUAL MEETING FORWARD-LOOKING STATEMENTS INCORPORATION BY REFERENCE Page 1 1 3 4 4 8 9 10 12 12 12 13 13 13 14 14 15 15 15 17 17 17 18 18 19 20 20 22 23 24 31 32 32 32 34 35 35 36 36 36 38 38 39 39 39 39 40 41 41 42 PROXY STATEMENT SUMMARY We provide below highlights of certain information in this Proxy Statement. As it is only a summary, please refer to the complete Proxy Statement and 2022 Annual Report before you vote. 2022 ANNUAL MEETING OF STOCKHOLDERS Date and Time: December 13, 2022, at 10:00 a.m., Pacific Time Record Date: October 17, 2022 Virtual Meeting Place: https://meetnow.global/M9Z7T5K Meeting Webcast: Available on the Company’s investor relations website at http:/investor.wd40company.com beginning at 10:00 a.m., Pacific Time on December 13, 2022 VOTING MATTERS AND BOARD RECOMMENDATIONS Management Proposals: Election of Directors (Item No. 1) Board’s Recommendation FOR all Director Nominees Advisory Vote to Approve Executive Compensation (“Say FOR on Pay”) (Item No. 2) Ratification of Appointment of PricewaterhouseCoopers LLP FOR as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2023 (Item No. 3) Page 4 8 9 Q: Why am I receiving these proxy materials? FAQS AND GENERAL INFORMATION A: This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of the Company for use at its annual meeting to be held on Tuesday, December 13, 2022, and at any postponements or adjournments thereof. At the annual meeting, the Company’s stockholders will consider and vote upon (i) the election of the Board for the ensuing year; (ii) an advisory vote to approve compensation for named executive officers (“NEOs”); and (iii) the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023. Detailed information concerning these matters is set forth below. Management knows of no other business to come before the annual meeting. Q: When and where will the annual meeting be held? A: In order to provide expanded access to our stockholders, this year’s annual meeting will be a virtual meeting of stockholders conducted exclusively via a live audio webcast, accessible at https://meetnow.global/M9Z7T5K. Although no physical in- person meeting will be held, we designed the format of this year’s annual meeting to ensure that our stockholders of record who attend the annual meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting. The annual meeting will begin promptly at 10:00 a.m., Pacific Time, on Tuesday, December 13, 2022. Online access to the audio webcast will open 15 minutes prior to the start of the annual meeting. Stockholders are encouraged to access the annual meeting prior to the start time and allow ample time to log into the audio webcast and test their computer systems. Q: How can I participate in the virtual annual meeting? A: The annual meeting will be conducted exclusively by live audio webcast and utilize the latest technology to expand access, improve communication, and save costs for stockholders and the Company. Anyone may enter the annual meeting as a guest in listen-only mode, but only stockholders as of the record date and holders of valid proxies are entitled to vote or ask questions at the annual meeting. To participate in the annual meeting, you will need to review the information included on your notice, on your proxy card or on the instructions that accompanied your proxy materials. 1 Stockholders of Record If you are a registered stockholder (that is, if you hold your shares through our transfer agent, Computershare), you do not need to register to attend the annual meeting. You can participate in the annual meeting by accessing https://meetnow.global/M9Z7T5K. You will be able to attend the annual meeting online, ask a question and vote by following the instructions on your notice, proxy card, or on the instructions that accompanied your proxy materials. If you cannot locate your Notice of Internet Availability of Proxy Materials or proxy card but would still like to attend the annual meeting, you can join as a guest by selecting “I am a Guest.” Guest attendees will not be allowed to vote or submit questions at the annual meeting. Stockholders are encouraged to vote and submit proxies in advance of the annual meeting by internet, telephone or mail as early as possible. Beneficial Owners If you hold your shares through an intermediary, such as a bank or broker, you have several options to participate in the annual meeting. If you would like to attend the annual meeting and do not want to ask questions or vote you can simply join the annual meeting as a guest. You can participate in the annual meeting by accessing https://meetnow.global/M9Z7T5K. Guest attendees will not be allowed to vote or submit questions at the annual meeting. Stockholders are encouraged to vote and submit proxies in advance of the annual meeting by internet, telephone or mail as early as possible. If you are a beneficial owner and want to attend the annual meeting, ask a question and/or vote, you have two options: 1) Most beneficial holders do not need to register in advance and will be able to fully participate using the control number received with their voting instruction form. Please note, however, that this option may not be available for every type of beneficial owner voting control number. The absence of this option shall not impact the validity of the annual meeting. Most beneficial holders can participate in the annual meeting by accessing https://meetnow.global/M9Z7T5K, which enables them to attend the annual meeting online, ask a question and vote by following the instructions on the notice, proxy card, or on the instructions that accompanied the proxy materials. 2) Beneficial owners may choose to register in advance of the annual meeting if they prefer to use this traditional, paper-based option. To register to participate in the annual meeting, submit proof of your proxy power (legal proxy) reflecting your WD-40 Company (WDFC) holdings, along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on December 9, 2022, using one of the following methods: • Email: Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com. • Mail: Send a copy of the email or correspondence from your broker, or include your legal proxy, to WD-40 Company Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001. Upon receipt of your valid legal proxy, Computershare will provide you with a control number by email. Once provided, you can attend and participate in the annual meeting by accessing https://meetnow.global/M9Z7T5K. Enter the control number provided by Computershare. Whether or not you plan to attend the annual meeting, we urge you to vote and submit your proxy using the methods described the Notice of Internet Availability of Proxy Materials sent to you, or by following the instructions at www.envisionreports.com/WDFC. Our annual meeting procedures are intended to authenticate stockholders’ identities, allow stockholders to give their voting instructions, confirm that stockholders’ instructions have been recorded properly, and comport with applicable legal requirements. Q: What constitutes a quorum in order to hold and transact business at the annual meeting? A: The close of business on October 17, 2022 is the record date for stockholders entitled to notice of and to vote at the annual meeting. On the record date, the Company had 13,579,926 shares of $0.001 par value common stock outstanding. Stockholders of record entitled to vote at the annual meeting will have one vote for each share so held on the matters to be voted upon. If you are a beneficial owner whose shares are held of record by a broker, you must instruct the broker how to vote your shares. If you do not provide voting instructions, your shares will not be voted on any proposal on which the broker does not have discretionary authority to vote. This is called a “broker non-vote.” A majority of the outstanding shares will constitute a quorum at the meeting. Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum. Broker non-votes are shares that are held of record by a bank or broker as to which the bank or broker has not received instructions from the beneficial owner as to how the shares are to be voted. 2 Q: If I hold my shares through a broker, how do I vote? A: If you are a beneficial owner whose shares are held of record by a broker, you must instruct the broker how to vote your shares. If you do not provide voting instructions, your shares will not be voted on any proposal on which the broker does not have discretionary authority to vote. It is important that you cast your vote if you want it to count in (i) the election of directors, (ii) the advisory vote to approve executive compensation, and (iii) the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023. Your broker will only be permitted to exercise its discretionary authority to vote on your behalf as to the ratification of the appointment of PricewaterhouseCoopers LLP. You may have received a notice from the Company entitled “Notice Regarding the Internet Availability of Proxy Materials” with voting instructions or you may have received these proxy materials with separate voting instructions. Follow the instructions to vote or to request further voting instructions as set forth on the proxy materials you have received. Q: How will my vote be cast if I provide instructions or return my proxy and can I revoke my proxy? A: If the enclosed form of proxy is properly executed and returned, the shares represented thereby will be voted in accordance with the instructions specified thereon. If no specified instruction is given with respect to a particular matter on your proxy, your shares will be voted by the proxy holder as set forth on your proxy. A proxy may be revoked by attendance at the annual meeting or by filing a proxy bearing a later date with the Corporate Secretary of the Company. Q: How are the proxies solicited and what is the cost? A: The cost of soliciting proxies will be borne by the Company. Solicitations other than by mail may be made by telephone or in person by employees of the Company for which the expense will be nominal. We may also reimburse persons representing beneficial owners for their reasonable expenses incurred in forwarding such materials. HOUSEHOLDING OF PROXY MATERIALS The U.S. Securities and Exchange Commission (“SEC”) rules permit companies and intermediaries (such as banks and brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. A number of banks and brokers with account holders that are our stockholders will be householding our proxy materials. A single Proxy Statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. If you have received notice from your bank or broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Proxy Statement and Annual Report, please notify your bank or broker, direct your written request to investorrelations@wd40.com, Investor Relations, 9715 Businesspark Ave., San Diego, CA 92131 or contact Investor Relations by telephone at +1 (800) 448-9340. Stockholders who currently receive multiple copies of the Proxy Statement at their address and would like to request householding of their communications should contact their bank or broker. 3 PROPOSALS ITEM NO. 1 ELECTION OF DIRECTORS At the Company’s 2022 annual meeting, the twelve nominees named below under the heading, Director Nominees, will be presented for election as directors to serve until the next annual meeting when their successors may be elected or appointed. In the event any nominee is unable or declines to serve as a director at the time of the annual meeting, any proxy granted to vote for such nominee will be voted for a nominee designated by the present Board to fill such vacancy. A nominee for election to the Board will be elected as a director if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Holders of common stock are not entitled to cumulate their votes in the election of directors. Withheld votes and broker non-votes are not counted as votes in favor of any nominee. If an incumbent director nominee fails to receive more votes for election as a director than votes against election, the incumbent director will continue to serve as a director until a successor is elected or appointed. However, pursuant to Corporate Governance Guidelines adopted by the Board, such director nominee will be expected to tender his or her resignation to the Corporate Governance Committee of the Board. The Corporate Governance Committee will promptly consider such resignation and present a recommendation to the Board to accept or reject such resignation for formal action to be taken within 90 days following the annual meeting. Article III, Section 3.2 of the Bylaws of the Company (amended and restated on August 15, 2018) provides that the authorized number of directors of the Company shall not be less than seven nor more than twelve until changed by amendment of the Certificate of Incorporation or by a bylaw duly adopted by the stockholders. The exact number of directors is to be fixed from time to time by a resolution duly adopted by the Board or by the stockholders. By resolution of the Board adopted on June 20, 2022, the number of directors was fixed at twelve, effective immediately. On such date, the Board appointed Edward O. Magee, Jr. as the 12th director and voted to include Cynthia B. Burks as a director nominee to be elected at the Company’s 2022 annual meeting. After 35 years of service to the Company, 25 years of which included service on the Board as its Executive Chair, Garry O. Ridge provided notice to the Company in March 2022 that he will retire as CEO effective August 31, 2022, and that he will not stand for re-election. He will serve the remainder of his current term and retire as Chair of the Board immediately following the 2022 annual meeting in accordance with the Company’s Corporate Governance Guidelines. DIRECTOR NOMINEES Director Nominees Steven A. Brass Cynthia B. Burks2 Daniel T. Carter Melissa Claassen Eric P. Etchart Lara L. Lee Edward O. Magee, Jr. Trevor I. Mihalik Graciela I. Monteagudo David B. Pendarvis Gregory A. Sandfort Anne G. Saunders 1 Independent1 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Audit Compensation Corporate Governance Finance Chair3 ✓ ✓ ✓ ✓ ✓    ✓ ✓ ✓ ✓ Chair ✓ Chair ✓ ✓ ✓ ✓ ✓ ✓ ✓ Chair ✓ ✓  1 2 3 The Board has determined that each director nominee (except for Mr. Brass): (i) has no material relationship with the Company (either directly or indirectly through an immediate family member or as a partner, stockholder or officer of an organization that has a relationship with the Company), and (ii) is an independent director as defined in the Marketplace Rules of The Nasdaq Stock Market LLC (the “Nasdaq Rules”). If elected, the Board will determine Ms. Burks’ assignment to committees shortly after the 2022 annual meeting concludes. The Board determined that Mr. Carter is an “audit committee financial expert” as defined by regulations adopted by the SEC. 4 STEVEN A. BRASS – CEO, President and Director Steven A. Brass, age 56 was appointed to the Board in March 2022. Mr. Brass was appointed CEO, effective September 2022 and continues to serve as President, a position that he has held since 2019. He joined the Company in 1991 as International Area Manager at the Company’s U.K. subsidiary and has since held several management positions including Country Manager in Germany, Director of Continental Europe, European Sales Director, and European Commercial Director. From 2016 until 2019, Mr. Brass served as Division President, The Americas, and from 2019 to August 2022, as Chief Operating Officer. As CEO and President of the Company, Mr. Brass offers the Board a broad and deep Company-based perspective. In addition, his specific knowledge of the Company’s operations, coupled with his breadth of experience with international markets and our domestic market, provides the Board with valuable insight. CYNTHIA B. BURKS – Independent Director Nominee Cynthia B. Burks, age 56, serves as a director and member of the Organization and Compensation Committee of Inspire Medical Systems, Inc. (NYSE: INSP), which she joined in August 2022. In addition, she serves as a board member of two privately held companies: Torch, an educational software company, and Sellars Absorbent Materials, Inc., a manufacturer of absorbents made with recycled fibers, since January 2022 and August 2022, respectively. Ms. Burks also serves on the board of two non-profit organizations: Juma Ventures, which strives to break the cycle of youth poverty, and Summer Search, which mentors and develops youths, since December 2021 and June 2021, respectively. Ms. Burks’ board experience includes serving the Genentech Foundation from 2020 to 2022. From 2019 to 2022, Ms. Burks was a senior vice president and chief people and culture officer at Genentech, Inc., a subsidiary of Roche Holding AG (OTCQX: RHHBY). She served as vice president, head of human resources at Genentech Research and Early Development from 2015 to 2019, and in various human resource management roles at Genentech from 2011 to 2015. From 1999 to 2011, Ms. Burks held human resource and organizational development positions in industries including media, consumer goods and technology. Ms. Burks extensive knowledge of human capital strategy including talent management, succession planning, compensation strategy, designing culture to increase competitive advantage, diversity, equity and inclusion, and organizational design would enhance the Board’s management oversight capabilities. DANIEL T. CARTER – Independent Director Daniel T. Carter, age 66, was elected to the Board in 2016 and serves as the Chair of the Audit Committee and as a member of the Finance Committee and the Corporate Governance Committee. Mr. Carter served as executive vice president and chief financial officer of BevMo! Inc. from 2009 until June 2016. Mr. Carter served as chief financial officer of Semtek, Inc. from 2008 to 2009; chief financial officer at Charlotte Russe Holding, Inc. from 1998 to 2007; and chief financial officer of Advanced Marketing Services from 1997 to 1998. From 1986 to 1997, he was employed by Price Club and its follow-on entities, serving as senior vice president for PriceCostco and chief financial officer for Price Enterprises. Mr. Carter began his career as an auditor with Ernst & Young, and he is a Certified Public Accountant (inactive). Mr. Carter is recognized as a NACD Board Leadership Fellow and has earned Harvard’s Corporate Director Certificate. Mr. Carter’s financial expertise, considerable knowledge of the retail industry and financial experience provides the Board with a breadth of relevant skills and experience. MELISSA CLAASSEN – Independent Director Melissa Claassen, age 50, was elected to the Board in 2015 and serves as a member of the Compensation Committee and the Finance Committee. Ms. Claassen is vice president finance, emerging markets – adidas Group (XETR: ADS). She served as vice president, brand finance at adidas from 2018 to 2019 and as vice president, business unit finance at adidas from 2015 to 2018. Ms. Claassen served as the chief financial officer of Taylor Made – adidas Golf from 2012 to 2015. From 1996 until 2012, Ms. Claassen held positions at various adidas subsidiaries including chief financial officer of adidas Group Hong Kong and Taiwan, controlling director at adidas Group China, head of marketing controlling, senior financial controller, finance manager, SAP team lead, management accountant, and financial accountant. Ms. Claassen’s extensive knowledge and expertise in the areas of collaboration, finance, accounting, and international business enhance the Board’s management oversight capabilities. ERIC P. ETCHART – Independent Director Eric P. Etchart, age 65, was elected to the Board in 2016 and serves as the Chair of the Corporate Governance Committee and as a member of the Finance Committee. Mr. Etchart served as senior vice president of The Manitowoc Company, Inc. from 2007 until his retirement in January 2016. He served as senior vice president, business development, from 2015 to 2016 and as president and general manager of the Manitowoc Crane Group from 2007 to 2015. From 1983 to 2007, Mr. Etchart held various sales, marketing and management positions at subsidiaries and predecessor companies of The Manitowoc Company, Inc. Mr. Etchart is a French national, having held management positions in China, Singapore, Italy, France and the U. S. Mr. Etchart is recognized as a NACD Board Leadership Fellow and recently earned Diligent Climate Leadership Certification, which focuses on climate risk and related business strategy, board-related fiduciary obligations, climate-related government regulations, reporting and disclosure requirements, and investor engagement. He presently serves as a director and as a member of the Audit Committee and the Governance Committee of Graco Inc. (NYSE: GGG) and as a director and member of the Compensation Committee and the Chair of the Nominating / Corporate Governance Committee of Alamo Group Inc. (NYSE: ALG). In addition, Mr. Etchart 5 serves as a director of the UPERIO Group, which sells and rents tower and self-erecting cranes, and chairs its Environmental, Social, and Governance (ESG) Committee. Mr. Etchart’s breadth of international finance, marketing, board and management experience provides important perspective to the Board. His commitment to the highest standards of board leadership, with an emphasis on ESG, demonstrates the Board’s continued commitment to good governance. LARA L. LEE – Independent Director Lara L. Lee, age 59, was elected to the Board in 2020 and serves as a member of the Audit Committee and the Compensation Committee. Ms. Lee operates Lara Lee Associates, LLC dba Creative Renewal, which offers governance, consulting, and advisory services. Previously, Ms. Lee served as president of Orchard Supply Hardware, a subsidiary of Lowe’s Companies, Inc. (NYSE: LOW), from 2016 to 2018 and as senior vice president of Lowe’s from 2013 to 2018. From 2011 to 2013 she served as chief innovation and operating officer for Continuum, a global consultancy. She was also a partner at an innovation firm, Jump Associates, from 2007 to 2010. Ms. Lee’s prior experience included 15 years at Harley-Davidson Motor Company as vice president, business unit leader, and in various European and Asian strategy and business development roles, and three years as a financial analyst at Otis Elevator Company based in Singapore. Ms. Lee is NACD Directorship Certified and previously served as a director of Marrone Bio Innovations, Inc. (NASDAQ: MBII) and the board’s designated ESG liaison to management. In addition to serving as a director of two non-profit organizations, Ms. Lee serves as a director of The Sill, Inc, an omnichannel specialty retailer of house plants and related products, and as a director of the parent company of Liberty Safe & Security Products, Inc., which designs and manufactures residential safes. She began her career with Ernst & Whinney (now Ernst & Young LLP) in Washington, D.C. and Singapore. Ms. Lee’s diverse international business and management experience, including expertise in strategic marketing (including digital, e-commerce and channel marketing), brand development, and innovation across industries and international markets, will provide the Board with valuable insights. EDWARD O. MAGEE, JR. – Independent Director Edward O. Magee, Jr., age 56, was appointed to the Board in June 2022 and serves as a member of the Audit Committee and the Finance Committee. Since February 2020, Mr. Magee has served as executive vice president, operations at Fender Musical Instruments Corporation (“Fender”), a privately held musical instruments company owned by Servco Pacific Inc. Prior to his current role, he served as senior vice president, operations at Fender from 2016 to 2020. Mr. Magee served as vice president of operations and distribution for Thomas & Betts Corporation (presently ABB Installation Products Inc.) (NYSE: ABB) from 2014 to 2016 and in various management roles in vehicle operations at Harley-Davidson Motor Company from 2009 to 2014. Prior to his executive experience, Mr. Magee served as a combat-decorated Lieutenant Colonel in the U.S. Marine Corps. He has extensive non-profit board experience including the Board of Visitors at Duke University’s Fuqua School of Business, the Fender Play Foundation™, Boys & Girls Clubs of Metro LA, and an advisory role for the National Association of Manufacturers, “Heroes MAKE America” veterans transition program. Mr. Magee’s extensive knowledge of manufacturing, sustainability, supply chain, and logistics as well as his wide-ranging experience building and developing global leadership teams that drive organizational culture change enhance the Board’s management oversight capabilities. TREVOR I. MIHALIK – Independent Director Trevor I. Mihalik, age 56, was elected to the Board in 2019 and serves as the Chair of the Finance Committee and as a member of the Audit Committee and the Corporate Governance Committee. Mr. Mihalik has served as executive vice president and chief financial officer of Sempra Energy (NYSE: SRE) (“Sempra”) since May 2018. Mr. Mihalik was senior vice president controller and chief accounting officer of Sempra from 2014 until 2018 and controller and chief accounting officer from 2012 to 2014. Prior to Sempra, Mr. Mihalik held roles as senior vice president – finance for Iberdrola Renewables and vice president and CFO for Chevron Natural Gas. Mr. Mihalik previously served as director of San Diego Gas & Electric Company and Southern California Gas Company, as chairman of the board of Luz del Sur and Chilquinta Energia, and as a director of Infraestructura Energética Nova S.A.B. de C.V., all currently or formerly owned and controlled Sempra subsidiaries. Mr. Mihalik’s currently serves as a director of Oncor Electric Delivery Company LLC, a Sempra subsidiary. Mr. Mihalik’s involvement with significant transactions in addition to his experience with Fortune 500 companies as a seasoned finance executive with accounting and public company financial reporting expertise, and as a director with experience in the oversight of business management and strategic planning, offers the Board valuable judgment and management perspective. GRACIELA I. MONTEAGUDO – Independent Director Graciela I. Monteagudo, age 56, was elected to the Board in 2020 and serves as a member of the Audit Committee and the Finance Committee. Ms. Monteagudo served as president and CEO of Lala U.S., Inc. from 2017 to 2018. From 2015 to 2017 she served as president, Americas and global marketing for Mead Johnson Nutrition Company and from 2012 to 2015 she held various leadership roles at Mead Johnson & Company, LLC. From 2008 through 2012, she held various leadership roles at Walmart Mexico, including senior vice president and business unit head for Sam’s Club stores in Mexico. Ms. Monteagudo has dual Mexican and American citizenship and has held senior management positions in both Latin America and the U. S. Ms. Monteagudo is recognized as a NACD Board Leadership Fellow and she has been included in the Women Inc. Magazine Most Influential Corporate Directors list. Ms. Monteagudo presently serves as a director of ACCO Brands Corporation (NYSE: ACCO) 6 and iHeartMedia, Inc. (NASDAQ: IHRT). Ms. Monteagudo’s significant board and leadership experience, including international business experience in Latin America, her extensive global, digital, and retail marketing, e-commerce and consumer goods expertise offers the Board with valuable marketing and consumer products insight. DAVID B. PENDARVIS – Independent Director David B. Pendarvis, age 63, was elected to the Board in 2017 and serves as a member of the Audit Committee and the Compensation Committee. Mr. Pendarvis has served as chief administrative officer of ResMed Inc. (“ResMed,” NYSE and ASX: RMD) since 2011 and secretary since 2003. He also serves as a member of the board of directors of ResMed’s subsidiaries and the San Diego Regional Chamber of Commerce. In 2017, he served as interim president, EMEA and Japan of ResMed. He joined ResMed in 2002 as global general counsel and has also served as vice president of organizational development from 2005 to 2011. Before joining ResMed, Mr. Pendarvis was a partner at Gray Cary Ware & Freidenrich LLP (presently, DLA Piper), a partner at Gibson, Dunn & Crutcher, and a law clerk to U.S. District Court Judge, J. Lawrence Irving in the U.S. District Court for the Southern District of California, San Diego. Mr. Pendarvis served as a director of Sequenom, Inc. from 2009 until its acquisition by Laboratory Corporation of America Holdings (NYSE: LH) in 2016. His expertise in corporate governance, compliance, intellectual property and worldwide legal affairs, and experience as general counsel with global responsibilities, including international executive management experience and focus on investor relations and corporate communications, provide the Board with valuable perspective for risk oversight. GREGORY A. SANDFORT – Lead Independent Director Gregory A. Sandfort, age 67, was elected to the Board in 2011 and serves as a member of Compensation Committee, Corporate Governance Committee, and Finance Committee. He was designated as lead independent director in October 2020. Mr. Sandfort served as chief executive officer of Tractor Supply Company (“TSC”), which is a distribution channel of the Company’s products, from December 2012 until his retirement in February 2020. At TSC, he also served as president from 2009 to 2015, chief operating officer starting in 2012, chief merchandising officer from 2007 to 2012, and executive vice president from 2007 until he was promoted to president in 2009. Mr. Sandfort previously served as president and chief operating officer at Michael’s Stores, Inc. (“Michaels”) from 2006 to 2007, and as executive vice president-general merchandise manager at Michaels from 2004 to 2006. Mr. Sandfort also serves as the lead independent director on the board of directors of Genesco Inc. (NYSE: GCO), and he is recognized as an NACD Board Leadership Fellow. As a former chief executive officer of TSC with a long-standing connection with consumers of the Company’s products, the Board values Mr. Sandfort’s extensive management experience in, and perspective of, the retail industry. ANNE G. SAUNDERS – Independent Director Anne G. Saunders, age 61, was elected to the Board in 2019 and serves as the Chair of the Compensation Committee and as a member of the Corporate Governance Committee. Ms. Saunders served as president, U.S., of nakedwines.com from 2016 through 2017. From 2014 through 2016, she was president, U.S. of FTD Companies, Inc. (NASDAQ: FTD), and from 2012 through 2014, she served as president of Redbox Automated Retail, LLC. From 1990 to 2012, Ms. Saunders held various senior executive level positions at Starbucks Corporation, Bank of America, N.A., Knowledge Universe (presently KinderCare Education), eSociety and AT&T. Ms. Saunders is a director of Swiss Water Decaffeinated Coffee Inc. (TSX: SWP) and chairs its Compensation and Corporate Governance Committee and is the chair of the board of directors of Nautilus, Inc. (NYSE: NLS). Ms. Saunders’ expertise in brand management in significant consumer and retail markets, diverse marketing strategy utilizing digital and e-commerce tools, and product innovation and development as well as her extensive public company board experience, provide valuable experience to the Board. There are no pending litigation or proceedings involving the Company’s directors or nominees. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” EACH OF THE DIRECTOR NOMINEES SET FORTH ABOVE. 7 ITEM NO. 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION (“SAY-ON-PAY”) In accordance with the requirements of Section 14A of the Exchange Act, the Company’s stockholders are being asked to cast an advisory vote to approve the compensation of the Company’s Named Executive Officers (“NEOs”) identified in the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement. This vote is commonly referred to as a “Say- on-Pay” vote. At the Company’s 2011 annual meeting and 2017 annual meeting, the Company’s stockholders were asked, by a non-binding advisory vote, to express their preference as to the frequency of future Say-on-Pay votes. The Board recommended annual Say- on-Pay voting, and the Company’s stockholders approved to have Say-on-Pay votes every year. Since 2011, the Board has authorized annual advisory votes for the stockholders to consider and approve the compensation of the NEOs. The Say-on-Pay votes approving NEO compensation for 2011 through 2021 have been approved in each year by more than 83% of the votes cast. The following resolution will be presented for approval by the Company’s stockholders at the 2022 annual meeting: “RESOLVED, that the stockholders of WD-40 Company (the “Company”) hereby approve the compensation of the Company’s Named Executive Officers as disclosed in the Compensation Discussion and Analysis section of the Company’s proxy statement for the 2022 Annual Meeting of Stockholders and in the accompanying compensation tables and narrative disclosures.” The advisory vote to approve executive compensation is a non-binding vote on the compensation of the Company’s NEOs. This Proxy Statement contains a description of the compensation provided to the NEOs as required by Item 402 of Regulation S-K promulgated under the Exchange Act. Stockholders are encouraged to carefully consider the CD&A, accompanying compensation tables and related narrative discussion in this Proxy Statement in considering this advisory vote. The Board believes that the compensation provided to the Company’s NEOs offers a competitive pay package with a proper balance of current and long-term incentives aligned with the interests of the Company’s stockholders. This is an advisory vote and will not affect compensation previously paid or awarded to the NEOs. While a vote disapproving the NEOs’ executive compensation will not be binding on the Board or the Compensation Committee, the Compensation Committee will consider the results of the advisory vote in making future executive compensation decisions. The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the proposal at the annual meeting is required to approve this advisory vote on executive compensation. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” ADOPTION OF THE PROPOSED RESOLUTION FOR APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS. 8 ITEM NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee of the Board has appointed PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm (“auditor”) for the Company to audit the consolidated financial statements of the Company for fiscal year 2023. Although ratification by stockholders is not required by law, the Audit Committee has determined that it is desirable to request ratification of this selection by the stockholders. Notwithstanding its selection, the Audit Committee, in its discretion, may appoint a new auditor at any time during the year if the Audit Committee believes that such a change would be in the best interests of the Company and its stockholders. If the stockholders do not ratify the appointment of PwC, the Audit Committee may reconsider its selection. A majority of the votes of the common stock present or represented at the annual meeting is required for approval. Broker non- votes will be voted in favor of approval. PwC acted as the Company’s auditor during the past fiscal year and, unless the Audit Committee appoints a new auditor, PwC will continue to act in such capacity during the current fiscal year. It is anticipated that a representative of PwC will attend the Annual Meeting, will have an opportunity to make a statement and will be available to respond to appropriate questions. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING AUGUST 31, 2023. 9 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information concerning those stockholders known to the Company to be the beneficial owners of more than 5% of the common stock of the Company and, based on information furnished by them, such stockholders have sole voting and investment power with respect to their shares, except as otherwise noted: Name and Address of Beneficial Owner BlackRock, Inc. 55 East 52nd Street New York, NY 10055 APG Asset Management N.V. Gustav Mahlerplein 3, 1082 MS Amsterdam, P7 00000 Netherlands Vanguard Group, Inc. P.O. Box 2600 Valley Forge, PA 19482 Neuberger Berman Group LLC 1290 Avenue of the Americas New York, NY 10104 Amount and Nature of Beneficial Ownership^ Percent of Class† 2,126,258 1 15.66% 1,642,584 2 12.10% 1,612,323 3 11.87% 883,726 4 6.51% ^ † 1 2 3 4 Beneficial ownership information is based on reports as of June 30, 2022 filed on Form 13F with the SEC. Such information is unavailable as of October 17, 2022. Based on 13,579,926 shares of common stock outstanding as of the close of business on October 17, 2022. BlackRock, Inc. (“BlackRock”) reported that these shares are managed by 15 investment management subsidiaries and disclaims investment discretion over such shares. A summary of investment discretion and voting authority of shares reported for certain subsidiaries is as follows: Investment Management Subsidiary BlackRock Fund Advisors BlackRock Investment Management, LLC BlackRock Advisors LLC BlackRock Asset Management Ireland Limited 7 other BlackRock subsidiaries BlackRock Institutional Trust Company, N.A. BlackRock Financial Management, Inc. BlackRock Investment Management (UK) Limited Aperio Group, LLC Investment Discretion Sole 1,649,583 44,519 27,780 24,000 5,616 342,298 12,505 4,205 15,752 Voting Authority Sole None 1,649,583 44,519 27,780 24,000 5,616 334,156 10,968 3,222 15,578 8,142 1,537 983 174 APG Asset Management N.V. reported shared investment discretion with two additional reporting managers and sole voting authority as to all such shares. The Vanguard Group, Inc. reported beneficial ownership of 1,576,456 shares with sole investment discretion and no voting authority, 19,796 shares held by Vanguard Fiduciary Trust Co. with shared investment discretion and shared voting authority, 13,474 shares held by Vanguard Global Advisors, LLC with shared investment discretion and (i) shared voting authority with respect to 171 shares, and (ii) no voting authority with respect to 13,303 shares, and 2,597 shares held by Vanguard Investments Australia, Ltd. with shared investment and shared voting authority. Neuberger Berman Investment Advisers LLC reported shared investment discretion and sole voting authority with respect to 867,575 shares, shared investment discretion and no voting authority with respect to 10,108 shares, and sole investment discretion and sole voting authority with respect to 6,043 shares. 10 The following table sets forth certain information with respect to the beneficial ownership of the Company’s common stock, as of October 17, 2022, by (i) each current director, director nominee, and NEO, and (ii) all current directors, director nominee, NEOs, and other executive officers as a group: Name of Beneficial Owner Steven A. Brass Jay W. Rembolt Phenix Q. Kiamilev Patricia Q. Olsem Cynthia B. Burks Daniel T. Carter Melissa Claassen Eric P. Etchart Lara L. Lee Edward O. Magee, Jr. Trevor I. Mihalik Graciela I. Monteagudo David B. Pendarvis Garry O. Ridge Gregory A. Sandfort Anne G. Saunders Shares and Nature of Beneficial Ownership1 † Number 15,389 2 44,394 3 1,347 4 6,574 5 - 4,554 6 5,901 6 5,692 7 600 6 549 8 1,994 9 970 6 3,360 6 78,546 10 17,982 11 1,460 6 Percent of Class† * * * * * * * * * * * * * * * All current directors, director nominee, NEOs, and other executive officers of the Company, as a group (19 persons) 196,546 12 1.5% * † Less than 1%. Based on 13,579,926 shares of common stock outstanding as of the close of business on October 17, 2022. All shares owned directly unless otherwise indicated. 1 2 Mr. Brass has the right to receive: (i) 108 shares upon settlement of vested deferred performance units (“DPUs”) upon termination of employment and (ii) 1,826 shares within 60 days upon vesting and settlement of restricted stock units (“RSUs”). 3 Mr. Rembolt has the right to receive: (i) 310 shares upon settlement of vested DPUs upon termination of employment and (ii) 772 shares within 60 days upon vesting and settlement of RSUs. Mr. Rembolt also has voting and investment power over 6,712 shares held in the WD-40 Company Profit Sharing / 401(k) Plan (“401(k) Plan”). 4 Ms. Kiamilev has the right to receive: (i) 190 shares within 60 days upon vesting and settlement of RSUs. 5 Ms. Olsem has the right to receive: (i) 89 shares upon settlement of vested DPUs upon termination of employment and (ii) 778 shares within 60 days upon vesting and settlement of RSUs. 6 Shares shown represent the right to receive all such shares upon settlement of vested RSUs upon termination of service as a director of the Company, 7 Mr. Etchart has the right to receive 4,192 shares upon settlement of vested RSUs upon termination of service as a director of the Company. 8 Mr. Magee has the right to receive 437 shares upon settlement of vested RSUs upon termination of service as a director of the Company. 9 Mr. Mihalik has the right to receive 1,692 shares upon settlement of vested RSUs upon termination of service as a director of the Company. 10 Total includes the right to receive: (i) 5,884 shares upon settlement of vested RSUs upon termination of service to the Company, (ii) 967 shares upon settlement of vested DPUs upon termination of service to the Company, and (iii) 3,917 shares within 60 days upon vesting and settlement of RSUs, and 12,472 shares owned directly by Mr. Ridge’s spouse and held in the Company’s 401(k) Plan. Mr. Ridge also has voting and investment power over 1,319 shares he owns directly that are held in the Company’s 401(k) Plan. 11 Mr. Sandfort has the right to receive 12,628 shares upon settlement of vested RSUs upon termination of service as a director of the 12 Company. Total includes the rights of directors, director nominee, NEOs, and other executive officers to receive a total of 49,677 shares upon settlement of vested RSUs upon termination of employment or service as a director of the Company, the rights of all executive officers to receive 2,002 shares upon settlement of vested DPUs upon termination of employment, the rights of all executive officers to receive a total of 8,472 shares within 60 days upon vesting and settlement of RSUs, and a total of 8,031 shares directly held by all executive officers in the Company’s 401(k) Plan. 11 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than ten percent of the Company’s stock, to file with the SEC initial reports of stock ownership and reports of changes in stock ownership. Reporting persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports they file. To the Company’s knowledge, based solely on review of the copies of such reports furnished to the Company during the last fiscal year and written representations that no other reports were required, except as described below, all Section 16(a) requirements were complied with by all persons required to report with respect to the Company’s equity securities during the last fiscal year. On December 22, 2021, due to a technical filing error, Graciela I. Monteagudo filed a late report on Form 4 to report 332 RSUs granted on December 14, 2021 in connection with her service as a director. BOARD OF DIRECTORS AND CORPORATE GOVERNANCE Our Corporate Governance Policies Reflect Best Practices • Annual election of all directors with majority voting • Executive sessions of independent directors held at each requirement regularly scheduled board meeting • • • Governance guidelines for independent director leadership, including overboarding policy and other best governance practices • Annual consideration of succession planning for the board, the CEO, and senior management Annual performance evaluations for board, committees and directors 11 of 12 director nominees are independent, except for CEO and President • • Company prohibits pledging and hedging of Company stock by directors Equity grants received by directors must be held until board service ends BOARD LEADERSHIP AND RISK OVERSIGHT Board Leadership Corporate Governance Guidelines provide, under appropriate circumstances, for the designation of the CEO to serve as board chair and for the designation of a lead independent director to assure the most effective board governance when the CEO is also serving as board chair. Prior to 2019, the leadership structure of the Board generally maintained the separation of its principal executive officer and board chair positions. However, since Mr. Ridge, the current Board Chair, has retired as CEO and will not be standing for re-election, the Board decided that board oversight of and attention to the Company’s current strategic initiatives are better served by having a non-executive chair provide primary leadership at meetings of the Board after a new Board is elected at the annual meeting and serve as a liaison between the Board and executive management. Furthermore, the Board believes that separation of the principal executive officer and the board chair position is currently more appropriate for the Company given the increased size of the Board, the continued need for the principal executive officer’s focus and flexibility to implement strategic directives and execute overall management responsibilities. As an independent director, the non-executive chair can provide leadership to the Board without perceived or actual conflicts associated with individual and collective interests of management. The Board believes that a retiring principal executive officer should not continue to serve as a director beyond his or her current term in order to provide management with an unfettered ability to provide new leadership. The Board’s determination as to whether having an independent director serve as board chair is in the best interests of the Company is subject to annual review. Board Role in Risk Oversight Risk oversight is undertaken by the Board as a whole, but various Board Committees are charged with responsibility to review and report on business and management risks included within the purview of each Committee’s responsibilities. The Compensation Committee considers risks associated with the Company’s compensation policies and practices, with particular focus on the cash incentive compensation and equity awards offered to the Company’s executive officers and the performance metrics to best align the interests of management with the best interest of the Company. The Audit Committee considers risks associated with financial reporting and internal control, including ethics and compliance program risks. The Audit Committee also reviews the appropriateness of the Company’s insurance programs. The Finance Committee considers risks associated with the Company’s financial management and investment activities, acquisition-related risks and Employee Retirement Income 12 Security Act of 1974 plan oversight. The Board and the Committees receive periodic reports from management employees having responsibility for the management of particular areas of risk, including risks related to systems integrity and disaster recovery of primary information technology systems, and supply chain risks associated with disruptive events. The CEO is responsible for overall risk management and provides input to the Board with respect to the Company’s enterprise risk management program and is responsive to the Board in carrying out its risk oversight role. Compensation Risk Assessment In addition to oversight of compensation-related risk by the Compensation Committee, the Company’s management has undertaken an annual assessment of the Company’s compensation policies and practices and strategic business initiatives to determine whether any of these policies or practices, as well as any compensation plan design features, including those applicable to the executive officers, are reasonably likely to have a material adverse effect on the Company. Based on this review, management has concluded that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. This conclusion is based primarily on the fact that the incentives underlying the Company’s compensation plan design features provide balance among increased profitability, long-term growth, and longer-term stockholder returns. Management has discussed these findings with the Compensation Committee. BOARD MEETINGS, COMMITTEES AND ANNUAL MEETING ATTENDANCE The Board is charged by the stockholders with managing or directing the management of the business affairs and exercising the corporate power of the Company. The Board relies on the following standing committees to assist in carrying out the Board’s responsibilities: the Audit Committee, the Compensation Committee, the Corporate Governance Committee, and the Finance Committee. Each of the committees has a written charter approved by the Board, and each committee reviews their respective charter annually. Committee charters can be found on WD-40 Company’s website at http://investor.wd40company.com/investors /corporate-governance/overview. There were five meetings of the Board during the last fiscal year. Each director serving for the full fiscal year attended at least 75 percent of the aggregate of the total number of meetings of the Board and of all committees on which the director served. The Board holds an annual organizational meeting on the date of the annual meeting. Pursuant to our Corporate Governance Guidelines, directors are expected to attend the annual meeting. At the last annual meeting, all of the prior year director nominees were present. EQUITY HOLDING REQUIREMENT FOR DIRECTORS All RSU awards to non-employee directors, including both non-elective grants and RSU awards granted pursuant to the annual elections of the directors to receive RSUs in lieu of all or part of their base annual fee, provide for immediate vesting but will not be settled in shares of the Company’s common stock until termination of each director’s service as a director. The number of shares to be issued to each non-employee director upon termination of service is disclosed in the footnotes to the table under the heading, Security Ownership of Certain Beneficial Owners and Management. INSIDER TRADING POLICY - PROHIBITED HEDGING TRANSACTIONS The Company maintains an insider trading policy, including transaction pre-approval requirements, applicable to its officers and directors required to report changes in beneficial ownership of the Company’s common stock under Section 16 of the Exchange Act as well as certain other employees who have significant management or financial reporting responsibilities and can be expected to have access to material non-public information concerning the Company. The Company’s insider trading policy also requires pre-approval of all trading plans adopted pursuant to Rule 10b5-1 promulgated under the Exchange Act. To avoid the potential for abuse, the Company’s policy with respect to such trading plans is that, once adopted, trading plans are not subject to change or cancellation. Any such change or cancellation of an approved trading plan by an executive officer, director or employee covered by the Company’s insider trading policy in violation of the policy will result in the Company’s refusal to approve future trading plan requests for that person. The insider trading policy also includes a prohibition on certain hedging and transactions involving the potential for abuse. Pursuant to the insider trading policy, covered officers, directors and employees may not engage in the following transactions involving the Company’s publicly traded securities: Short sale transactions • • Transactions in publicly traded options or derivatives • • Hedging transactions Pledges or margin account borrowing 13 STOCKHOLDER COMMUNICATIONS WITH THE BOARD Stockholders may send communications to the Board by submitting a letter addressed to: WD-40 Company, Corporate Secretary, 9715 Businesspark Avenue, San Diego, CA 92131. The Board has instructed the Corporate Secretary to review and forward such communications to the Board Chair. The Board has also instructed the Corporate Secretary to exercise his or her discretion, to not forward to the Board Chair any communication which is deemed of a commercial or frivolous nature or inappropriate for consideration by the Board. The Corporate Secretary may also forward the stockholder communication within the Company to another department to facilitate an appropriate response. DIRECTOR COMPENSATION Compensation for non-employee directors is set by the Board upon the recommendation of the Corporate Governance Committee. The Corporate Governance Committee conducts a biennial review of non-employee director compensation, including consideration of a survey of director compensation for the same peer group of companies used by the Compensation Committee for the assessment of executive compensation. For fiscal year 2022, non-employee directors received compensation for services as directors pursuant to the Directors’ Compensation Policy and Election Plan (the “Director Compensation Policy”) adopted by the Board on October 12, 2021. Pursuant to the Director Compensation Policy, non-employee directors received a base annual fee of $60,000. The lead independent director received additional annual compensation of $24,000. Non-employee directors received additional cash compensation for service on various Board Committees. The Chair of the Audit Committee received $18,000 and each other member of the Audit Committee received $10,000. The Chair of the Compensation Committee received $12,000 and each other member of the Compensation Committee received $5,000. Each Chair of the Corporate Governance Committee and the Finance Committee received $10,000 and each other member of those committees received $5,000. All such annual fees were paid in March 2022. At the Company’s 2016 annual meeting, the Company’s stockholders approved the WD-40 Company 2016 Stock Incentive Plan (the “2016 Stock Incentive Plan”) to authorize the issuance of stock-based compensation awards to employees as well as to directors and consultants. The Director Compensation Policy provides for an annual grant of restricted stock unit (“RSU”) awards having a grant date value of approximately $80,000 to each non-employee director. Each RSU represents the right to receive one share of the Company’s common stock. On December 14, 2021, each non-employee director received a non-elective RSU award covering 332 shares of the Company’s common stock. Additional information regarding the RSU awards is provided in a footnote to the Director Compensation table below. Each non-employee director was also permitted to elect to receive an RSU award in lieu of all or a portion of his or her base annual fee for service as a director as specified above. The number of shares of the Company’s common stock subject to each such RSU award granted to the non-employee directors equaled the elective portion of his or her base annual fee payable in RSUs divided by the fair market value of the Company’s common stock as of the date of grant. RSU awards granted to non-employee directors pursuant to the Director Compensation Policy are subject to Award Agreements under the 2016 Stock Incentive Plan. Such RSU awards are fully vested, entitled to dividend compensation equivalent to dividends declared and paid on the Company’s common stock, and settled in shares of the Company’s common stock upon termination of the director’s service as a director of the Company. The Company also maintains a Director Contributions Fund from which each incumbent non-employee director has the right, at a specified time each fiscal year, to designate $6,000 in charitable contributions to be made by the Company to properly qualified (under Internal Revenue Code Section 501(c)(3)) charitable organizations. DIRECTOR COMPENSATION TABLE - FISCAL YEAR 2022 The following Director Compensation table provides information concerning compensation earned by each non-employee director for services rendered in fiscal year 2022. Amounts reported in the following table under Fees Earned or Paid in Cash for each director are dependent upon the various committees on which each director served as a member or as chair during the fiscal year and whether the director served as the lead independent director. 14 Name Daniel T. Carter Melissa Claassen Eric P. Etchart Lara L. Lee Edward O. Magee, Jr.4 Trevor I. Mihalik Graciela I. Monteagudo David B. Pendarvis Gregory A. Sandfort Anne G. Saunders Fees Earned or Paid in Cash ($)1 $ 88,000 $ 70,000 $ 75,000 $ 75,000 $ 52,500 $ 85,000 $ 75,000 $ 75,000 $ 99,000 $ 77,000 Stock Awards ($)2 $ 79,962 $ 79,962 $ 79,962 $ 79,962 $ 79,962 $ 79,962 $ 79,962 $ 79,962 $ 79,962 $ 79,962 All Other Compensation ($)3 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ - $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 Total ($) $ 173,962 $ 155,962 $ 160,962 $ 160,962 $ 132,462 $ 170,962 $ 160,962 $ 160,962 $ 184,962 $ 162,962 1 2 3 Except for Mr. Magee and Mses. Lee, Monteagudo, and Saunders, directors receive RSU awards in lieu of cash for all or part of their base annual fees pursuant to elections made as permitted under the Director Compensation Policy. The value of such elective RSU awards received by Ms. Claassen and Messrs. Carter, Etchart, Mihalik, Pendarvis and Sandfort was approximately $60,000. The number of shares underlying each director’s RSU award is rounded down to the nearest whole share. Mr. Magee and Mses. Lee, Monteagudo, and Saunders elected to receive their fiscal year 2022 base annual fees in cash. Amounts reported under Stock Awards represent the grant date fair value for non-elective RSU awards granted pursuant to the Director Compensation Policy. On December 14, 2021, each director received a non-elective RSU award covering 332 shares of the Company’s common stock, with the exception of Mr. Magee who was appointed in June 2022. The grant date fair value of approximately $80,000 equals the closing price of the Company’s common stock on that the grant date, which was $240.85 multiplied by the number of shares underlying the RSU award. The number of shares underlying each director’s RSU award is rounded down to the nearest whole share. Outstanding RSUs held by each director as of October 17, 2022 are reported in footnotes to Security Ownership of Certain Beneficial Owners and Management table. Amounts represent charitable contributions made by the Company in fiscal year 2022 as designated by non-employee directors pursuant to the Company’s Director Contributions Fund. 4 On June 21, 2022, Mr. Magee received a non-elective RSU award covering 437 shares of the Company’s common stock with a grant date fair value of approximately $80,000, based on the closing price of the Company’s common stock on that date of $182.98. BOARD COMMITTEES CORPORATE GOVERNANCE COMMITTEE The Corporate Governance Committee is comprised of Eric P. Etchart (Chair), Daniel T. Carter, Trevor I. Mihalik, Gregory A. Sandfort and Anne G. Saunders, each of whom is an independent director as defined under the Nasdaq Rules. The Corporate Governance Committee also functions as the Company’s nominating committee. The Corporate Governance Committee met four times during the last fiscal year. Nomination Policies and Procedures The Corporate Governance Committee acts in conjunction with the Board to ensure that a regular evaluation is conducted of succession plans, performance, independence, and of the qualifications and integrity of the Board. The Corporate Governance Committee also reviews the applicable skills and characteristics required of nominees for election as directors. The objective is to balance the composition of the Board to achieve a combination of individuals of different backgrounds and experiences as described more fully below. Although the Board has not established any specific diversity criteria for the selection of nominees other than the general composition criteria noted below, the current Board composition includes four female directors (1/3 of the Board), one of whom chairs a Board committee, one African-American, one Hispanic, and six non-U.S. directors (1/2 of the Board). The Corporate Governance Committee also oversees an annual process of self-evaluation conducted by each committee of the Board and for the Board as a whole, which includes a board evaluation, individual self-evaluations and peer evaluations. In determining whether to recommend a director for re-election, the Corporate Governance Committee considers the director’s past attendance at meetings, results of evaluations and the director’s participation in and anticipated future contributions to the Board. A director who will have reached the age of 72 prior to the date of the next annual meeting will be expected to retire from the Board. However, the Board may re-nominate any director for up to three additional years if the Board makes a specific finding that relevant circumstances warrant continued service. 15 The Corporate Governance Committee reviews new Board nominees through a series of internal discussions, reviewing available information, and interviewing selected candidates. Generally, candidates for nomination to the Board have been identified and compiled in a database through director networking resources and professional organizations or suggested by individual directors or employees. The Company does not currently employ a search firm or third party in connection with seeking or evaluating candidates. The Corporate Governance Committee considers director recruitment and succession planning for the Board at each quarterly meeting. This review entails consideration of various factors that the Corporate Governance Committee believes to be relevant to ensure that the Board maintains a level of diversity and experience that is appropriate for its oversight and governance responsibilities. The Corporate Governance Committee considers the extent of each director’s experience in senior leadership roles and as directors on other public company boards, including service on committees and as committee or board chairs, in addition to age and the tenure of each director on the Board. Beyond a baseline expectation that directors and director nominees will share the Company values and have demonstrated an ability to promote and sustain a strong corporate culture, the Board endeavors to ensure that the mix of skills among existing directors is appropriate for the evolving business of the Company. To emphasize the importance of continuing education, directors are reimbursed for expenses incurred in connection with attending continuing education programs and conferences and acquiring certain certifications to assist them in remaining abreast of developments in critical issues relating to the operation of public company boards, including environmental, social, and corporate governance. The following list of specific skills are among the areas of expertise and experience that the Corporate Governance Committee believes will best serve the Company. The list is updated from time to time and each director’s skills in these areas are graded on a scale to assess the level of competence in each area that is available to the Board as a whole. The table below presents those areas in which the Board has determined that individual directors have deep or knowledgeable level of expertise only, and individual directors who are only familiar with those areas are not captured on the table. This information will assist the Board in identifying areas of strengths and weaknesses and will guide the Board on formulating the applicable skills and characteristics of future nominees. Skills and Experience Finance Legal, Regulatory, Compliance Leadership, Human Capital, Exec. Comp Industry: Consumer / Retail Markets Omni-Channel Marketing; Digital International / Global Business IT / Cybersecurity Operations Innovation ESG Steven A. Brass Cynthia B. Burks Daniel T. Carter Melissa Claassen Eric P. Etchart Lara L. Lee Edward O. Magee, Jr. Trevor I. Mihalik Graciela I. Monteagudo David B. Pendarvis Gregory A. Sandfort Anne G. Saunders DIRECTOR NOMINEES X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 16 Total Number of Directors: 12 BOARD DIVERSITY MATRIX (as of October 17, 2022) Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Part II: Demographic Background African American or Black Alaskan Native or Native American Asian Hispanic or Latinx Native Hawaiian or Pacific Islander White Two or More Races or Ethnicities LGBTQ+ Did Not Disclose Demographic Background Part III: Non-U.S. Directors (Born Outside the U.S.) 4 1 3 2 8 1 7 4 The Corporate Governance Committee will consider director candidates recommended by security holders under the same criteria as other candidates described above. Nominations may be submitted by letter addressed to: WD-40 Company Corporate Governance Committee, Attn: Corporate Secretary, 9715 Businesspark Avenue, San Diego, California 92131. Nominations by security holders must be submitted in accordance with the requirements of the Company’s Bylaws, including submission of such nominations within the time required for submission of shareholder proposals as set forth below under the heading, Stockholder Proposals. AUDIT COMMITTEE The Audit Committee is comprised of Daniel T. Carter (Chair), Lara L. Lee, Edward O. Magee, Jr., Trevor I. Mihalik, Graciela I. Monteagudo and David Pendarvis, each of whom are independent directors as defined under the Nasdaq Rules. Five meetings of the Audit Committee were held during the last fiscal year to review quarterly financial reports, to consider the annual audit and other audit services, to review the audit with the independent registered public accounting firm after its completion and to fulfill other responsibilities provided for in the Audit Committee’s Charter. The Board has determined that Mr. Carter is an “audit committee financial expert” as defined by regulations adopted by the SEC. Each member of the Audit Committee also satisfies the requirements for service on the Audit Committee as set forth in Rule 5605(c)(2) of the Nasdaq Rules. FINANCE COMMITTEE The Finance Committee is comprised of Trevor I. Mihalik (Chair), Daniel T. Carter, Melissa Claassen, Eric P. Etchart, Edward O. Magee, Jr., Graciela I. Monteagudo and Gregory A. Sandfort, each of whom is an independent director as defined under the Nasdaq Rules. Five meetings of the Finance Committee were held during the last fiscal year. The Finance Committee is appointed by the Board for the primary purpose of assisting the Board in overseeing financial matters of importance to the Company, including matters relating to acquisitions, investment policy, capital structure, and dividend policy. The Finance Committee also reviews the Company’s annual and long-term financial strategies and objectives. COMPENSATION COMMITTEE The Compensation Committee is comprised of Anne G. Saunders (Chair), Melissa Claassen, Lara L. Lee, David B. Pendarvis and Gregory A. Sandfort, all of whom are independent directors as defined under the Nasdaq Rules. The Compensation Committee met four times during the last fiscal year. The Compensation Committee is appointed by the Board for the primary purpose of assisting the Board in matters relating to compensation and benefits of the Company’s executive officers, including management succession. The Committee is also responsible for establishing the overall compensation strategy for the Company. 17 Compensation Committee Interlocks and Insider Participation During the fiscal year ended August 31, 2022, there were no compensation committee interlock relationships with respect to the Company’s executive officers, members of the Board and/or the Compensation Committee as described in Item 407(e)(4)(iii) of Regulation S-K promulgated under the Exchange Act. ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT The Company believes that taking an integrated approach to environmental, social and governance (“ESG”) issues enhances the sustainability and growth of our business and protects the long-term interests of our stakeholders. Our Board has ultimate authority and has demonstrated its continued commitment to the Company’s performance relative to ESG matters. The Company is focused on building an enduring business that can proudly be passed onto the next generation and on being a responsible corporate citizen for the benefit of our stakeholders. In fiscal year 2018, the Company established a cross-regional, cross-functional ESG Project Team to formally address ESG topics and provide recommendations to management. In that year, the ESG Project Team completed a comprehensive analysis documenting the Company’s activities and guiding structures that fall under the umbrella of ESG. In fiscal year 2019, the ESG Project Team completed an ESG Materiality Assessment to obtain from various stakeholders their views of which aspects of ESG were of highest importance. In connection with this assessment, the ESG Project Team engaged Sustainability Partners, led by Drs. Mary and Brian Nattrass, well-known and respected experts in sustainability programs for businesses, non-profits, and governments. In fiscal year 2020, the ESG Project Team completed a Life Cycle Assessment screening for the Company’s flagship product, WD-40® Multi-Use Product, and prepared for the publication of its inaugural ESG report. In fiscal year 2021, the Company published its first ESG report, which can be found at https://www.wd40company.com/our- company/corporate-responsibility/. After the publication of the ESG report, the ESG Project Team pursued the objectives and focused on four ESG pillars: 1) social impact, 2) carbon and environmental impact, 3) circular supply chain, and 4) product sustainability lens. The results on these objectives are included in the Company’s latest ESG report, which has been published contemporaneously with the filing of this Proxy Statement and can be found at https://www.wd40company.com/our-company/corporate- responsibility/. The 2022 ESG report details the Company’s ESG-related objectives, targets, and progress, for fiscal years 2021 and 2022 and establishes objectives and targets for fiscal years 2023 and 2024. 18 INFORMATION REGARDING OUR EXECUTIVE OFFICERS The following table sets forth the names, ages, and current titles of the Company’s executive officers as of August 31, 2022: Name Garry O. Ridge Steven A. Brass Jay W. Rembolt Patricia Q. Olsem William B. Noble Geoffrey J. Holdsworth Jeffrey G. Lindeman Phenix Q. Kiamilev Age 65 56 71 55 64 60 59 43 Title Chief Executive Officer (“CEO”) and Chairman of the Board President and Chief Operating Officer; Director Vice President, Finance, Treasurer and Chief Financial Officer Division President, The Americas Managing Director, EMEA Managing Director, Asia-Pacific Vice President, Global Organizational Development and Chief Human Resources Officer Vice President, General Counsel and Corporate Secretary Mr. Ridge joined the Company’s Australian subsidiary, WD-40 Company (Australia) Pty. Limited (“WD-40 (Australia)”), in 1987 as Managing Director. He held several senior management positions prior to his appointment as CEO, President, and Chairman of the Board in 1997. Mr. Ridge served as President until 2019 and retired as CEO, effective August 31, 2022. Upon his retirement from the Board as Executive Chairman at the 2022 annual meeting, he will serve an honorary role as Chairman Emeritus. Mr. Brass joined the Company in 1991 as International Area Manager at the Company’s U.K. subsidiary and has since held several management positions including Country Manager in Germany, Director of Continental Europe, European Sales Director, and European Commercial Director. He then served as Division President, The Americas, from 2016 until 2019, when he was promoted to his President and Chief Operating Officer. In March 2022, Mr. Brass was appointed to the Board and, effective September 1, 2022, Mr. Brass serves as CEO and President. Mr. Rembolt joined the Company in 1997 as Manager of Financial Services. He was promoted to Controller in 1999 and to Vice President, Finance/Controller in 2001. He was then named Vice President, Finance, Treasurer, and Chief Financial Officer in 2008 and served until his retirement, effective October 31, 2022, from such positions. Ms. Olsem joined the Company in 2005 and has held various senior management positions including, Vice President Americas Innovation Development Group, Senior Vice President Marketing and Innovation of the Americas, and Senior Vice President and General Manager of the U. S. She was promoted to her current position as Division President, The Americas in 2019. Mr. Noble joined the Company’s Australian subsidiary, WD-40 (Australia), in 1993 as International Marketing Manager for the Asia Region. He was then promoted to his current position of Managing Director, EMEA and as a Director of the Company’s U.K. subsidiary, WD-40 Company Limited, in 1996. Mr. Holdsworth joined the Company’s Australian subsidiary, WD-40 (Australia), in 1996 as General Manager and was promoted to his current position of Managing Director, Asia-Pacific and as a Director of WD-40 (Australia) in 1997. Mr. Lindeman serves as the Company’s Chief Human Resources Officer and was named Vice President, Global Organizational Development in December 2020. He joined the Company in 2016 and has held management positions within the Company’s EMEA segment, including director of human resources, information technology, supply chain and finance. Prior to joining the Company, Mr. Lindeman worked as the senior director of talent and engagement for San Diego International Airport from 2006 to 2016. Ms. Kiamilev joined the Company in May 2021 as Vice President, Legal, and was appointed General Counsel and Corporate Secretary in December 2021. From 2019 to 2021, Ms. Kiamilev served as Vice President, Legal, and General Counsel of Kyriba Corp. and held other legal roles from 2014 to 2019. Ms. Kiamilev also served as in-house counsel for Active Network, LLC after practicing law at Luce, Forward, Hamilton & Scripps LLP (currently Dentons US LLP). All executive officers hold office at the discretion of the Board. There are no family relationships between any executive officer and any member of the Board. There are no pending litigation or proceedings involving the Company’s officers. 19 COMPENSATION DISCUSSION AND ANALYSIS The following Compensation Discussion and Analysis (“CD&A”) addresses the philosophy, policies and programs, and the processes and decisions of the Compensation Committee (the “Committee”) in connection with executive compensation for the following Named Executive Officers (the “NEOs”) of the Company for fiscal year 2022: • Garry O. Ridge, Chief Executive Officer and Chairman of the Board (“CEO”) • • • • Steven A. Brass, President and Chief Operating Officer Jay W. Rembolt, Vice President, Finance, Treasurer and Chief Financial Officer (“CFO”) Phenix Q. Kiamilev, Vice President, Legal, General Counsel and Corporate Secretary Patricia Q. Olsem, Division President, Americas Our Executive Compensation Programs Incorporate Strong Governance Features • No Employment Agreements with Executive Officers • Executive Officers are Subject to Stock Ownership Guidelines • No Supplemental Executive Retirement Plans for • Executive Officers are Prohibited from Hedging or Pledging Executive Officers Company Stock • Long-Term Incentive Awards are Subject to Double- • No Backdating or Re-Pricing of Equity Awards Trigger Vesting upon Change of Control • Annual and Long-Term Incentive Programs Provide a Balanced Mix of Goals for Profitability, Growth and Total Stockholder Return Performance • Financial Goals for Performance-Based Equity Awards Never Reset EXECUTIVE SUMMARY OF EXECUTIVE COMPENSATION DECISIONS AND RESULTS The compensation structure for the NEOs is comprised of three elements: base salary, retention-related equity compensation, and performance-related cash and equity compensation. Through the application of these elements, a significant portion of NEO realized compensation is directly tied to Company performance measured by increased earnings and total stockholder return (“TSR”). Performance-based compensation tied to earnings is based on earnings before interest, income taxes, depreciation (in operating departments) and amortization (“EBITDA”), not earnings per share. To measure NEO performance, the Company uses several EBITDA-based measures: ▪ ▪ ▪ “Adjusted EBITDA” defined as EBITDA before deduction of stock-based compensation expense for any vested performance share unit (“PSU”) awards and excludes other non-operating income and expense amounts; “Regional Adjusted EBITDA” defined as Adjusted EBITDA computed for each of the Company’s relevant financial reporting segments; and “Global Adjusted EBITDA” defined as Adjusted EBITDA computed on a consolidated basis. Retention-related equity compensation includes restricted stock unit (“RSU”) awards that typically vest annually over a period of three years after grant, subject to earlier vesting upon the effective date of retirement under certain conditions. Retention- related equity compensation features are also reflected in our performance-based market share unit (“MSU”) awards that may be earned over a market return-based measurement period of three years. MSUs earned are subject to a three-year vesting cliff (or pro-rata vesting at the end of the applicable measurement period in the event of earlier retirement under certain conditions). Performance-related compensation includes (i) an annual cash payment opportunity that is tied to current fiscal year financial results (“Incentive Compensation”); (ii) MSU awards that are tied to a measure of TSR; and (iii) PSU awards that are tied to current fiscal year financial results that exceed levels required for maximum payment of the Incentive Compensation opportunity that is tied to Global Adjusted EBITDA. The foregoing compensation structure elements are fully described later in this CD&A. As part of the framework for overall NEO compensation and assessment of compensation for each NEO in light of individual and Company performance, the Committee considers actual and target levels of compensation, short-term and long-term 20 performance periods, labor market data, and peer group executive compensation. The Committee seeks to align individual NEO performance incentives with short-term and long-term Company objectives. The Committee assesses the effectiveness of the established framework for NEO compensation by reviewing each principal element of NEO compensation. The Committee considers measures of Company performance over multi-year periods, specifically including regional and global measures based on the Company’s Adjusted EBITDA, and relative Company performance compared to an established peer group of companies and a comparable market index. The Committee also considers the relative achievement of longer-term strategic objectives as to which each NEO is accountable. Information regarding NEO strategic objectives is provided in the Executive Officer Compensation Decisions for Fiscal Year 2022 section below under the heading, Base Salary: Process. THREE YEAR PERFORMANCE-BASED COMPENSATION REVIEW For fiscal year 2022, the Company’s overall financial performance resulted in relatively low achievement of performance measure goals due to impacts of the inflationary environment and global supply chain disruptions in fiscal year 2022 that most severely impacted the Americas and EMEA regions. The Company’s financial results for Regional Adjusted EBITDA under the Company’s Performance Incentive Program was variable depending on the region. No portion of the first level performance goal for the Americas or EMEA region was achieved, while the maximum first level goal for Adjusted EBITDA for the Asia Pacific region was achieved. The Company achieved 26.3% of the first level goal for Global Adjusted EBITDA and none of the second level goal for Global Adjusted EBITDA. Each of the NEOs identified for fiscal year 2022, other than Ms. Olsem, earned Incentive Compensation equal to approximately 13% of their Incentive Compensation opportunity because for such NEOs, 50% of their opportunity was based on approximately 26.3% achievement of the first level goal for Global Adjusted EBITDA. Ms. Olsem earned none of her Incentive Compensation opportunity because neither the Regional Adjusted EBITDA goal for the Americas nor the second level goal for Global Adjusted EBITDA was achieved. For fiscal year 2021, the Company’s overall financial performance resulted in a very high level of achievement of performance measure goals for Regional Adjusted EBITDA and Global Adjusted EBITDA under the Company’s incentive compensation program (the “Performance Incentive Program”) as described below. With the exception of Regional Adjusted EBITDA for the Americas, which achieved 78% of the maximum for the first level goal for Adjusted EBITDA, the maximum first level goal for Adjusted EBITDA for the EMEA and Asia Pacific regions were achieved and the maximum first and second level goals for Global Adjusted EBITDA were achieved. As a result, for fiscal year 2021, each of the NEOs other than Ms. Olsem earned their maximum Incentive Compensation opportunity and Ms. Olsem earned approximately 89% of her maximum Incentive Compensation opportunity. For fiscal year 2020, the Company’s overall financial performance resulted in highly variable achievement of performance measure goals for Regional Adjusted EBITDA under the Company’s Performance Incentive Program. Depending on local market impacts resulting from efforts to slow the spread of COVID-19, most local market results for the Company were either quite strong or very poor. Due to this variability, a modest portion of the first level performance measure goal for the Americas region was achieved, a small portion of the first level performance goal for the EMEA region was achieved, and no portion of the first level performance goal for the Asia-Pacific region was achieved. As a result, a small portion of the first level goal for Global Adjusted EBITDA was achieved and none of the second level goal for Global Adjusted EBITDA was achieved. Each of the NEOs identified for fiscal year 2020, other than Ms. Olsem, earned Incentive Compensation equal to approximately 10% of their Incentive Compensation opportunity while Ms. Olsem earned Incentive Compensation equal to approximately 35% of her Incentive Compensation opportunity. Due to the extreme variability of the impacts of the COVID-19 pandemic on the Company’s financial results across local markets and regions, the Company awarded additional cash compensation to employees, including NEOs, who did not receive at least 25% of their Incentive Compensation opportunity. As a result, each of the NEOs other than Ms. Olsem (who received more than 25% of her Incentive Compensation opportunity) received a supplemental cash compensation award identified as a “Bonus” for fiscal year 2020 in an amount equal to approximately 15% of their Incentive Compensation opportunity. For the three fiscal years ended August 31, 2022, the TSR for the Company’s shares fell below, by an absolute percentage point difference, the return for the Russell 2000 Index (the “Index”) by 10.9%. As a result, MSUs awarded to applicable NEOs in October 2019 did not vest and were forfeited. For the three fiscal years ended August 31, 2021, the TSR for the Company’s shares exceeded, by an absolute percentage point difference, the return for the Index by 23.6%. As a result, MSUs awarded to applicable NEOs in October 2018 provided vested shares of the Company’s common stock to such NEOs, other than Ms. Olsem, at 200% of the target number of award shares. Ms. Olsem earned 150% of the target number of award shares for the MSUs awarded to her in October 2018. For the three fiscal years ended August 31, 2020, the TSR for the Company’s shares exceeded, by an absolute percentage point difference, the return for the Index by 79.2%. As a result, MSUs awarded to applicable NEOs in October 2017 provided vested shares of the Company’s common stock to such NEOs, other than Ms. Olsem, at 200% of the target number of award shares. Ms. Olsem earned 150% of the target number of award shares for the MSUs awarded to her in October 2017. 21 FISCAL YEAR 2022 COMPENSATION DECISIONS Compensation decisions for fiscal year 2022 were made in October 2021 based on individual and Company performance during fiscal year 2021 and a market survey conducted by the Committee’s independent compensation consultant, ClearBridge Compensation Group, LLC (“Clearbridge”). The following is a summary of such decisions made by the Committee for NEO compensation for fiscal year 2022: • For fiscal year 2022, base salaries were increased from fiscal year 2021 salary amounts for NEOs as follows: a 2.5% increase for all executive officers, except for Ms. Olsem who received a 10% increase. These increases in base salaries were reasonable and generally modest since NEOs did not receive an increase for fiscal year 2021 due to the continuing uncertainty for the global economy, labor markets, and the Company’s business attributable to the COVID-19 pandemic. • Annual Incentive Compensation is awarded to the NEOs under the Company’s Performance Incentive Compensation Plan as described below under the heading Performance Incentive Program. Under the Performance Incentive Program, goals for Regional Adjusted EBITDA and Global Adjusted EBITDA were established at the beginning of the fiscal year. The Company’s performance as measured against these goals is described in detail below. • In October 2021, the NEOs received the following stock-based awards: • RSU awards providing for the issuance of a total of 7,288 shares of the Company’s common stock to be earned by continued employment by the Company over a vesting period of three years, subject to earlier vesting upon the effective date of retirement under certain conditions1. These awards serve a retention purpose together with an incentive to maximize long term stockholder value through share price appreciation. • MSU awards subject to performance vesting covering a target number of shares of the Company’s common stock totaling 7,288 shares. If the Company’s TSR over the three-year measurement period matches the median return for the Index, the target number of shares of the Company’s common stock would vest and be issued to the NEOs. The actual number of shares to be issued to the NEOs will be from 0% to 200% of the target number of shares depending upon the Company’s TSR compared to the return for the Index2. • PSU awards providing an opportunity to receive up to a maximum of 6,430 restricted shares of the Company’s common stock. The PSU awards provide for vesting at the end of fiscal year 2022 if the Company achieves a level of Global Adjusted EBITDA for the fiscal year in excess of the maximum goal for Global Adjusted EBITDA established for the Performance Incentive Program3. The Company’s Global Adjusted EBITDA for fiscal year 2022 fell short of the minimum goal for Global Adjusted EBITDA established for the Performance Incentive Program. As a result, the PSU awards did not vest and were forfeited. • Equity awards for fiscal year 2022 varied among the NEOs based on labor market compensation practices specific to the region of employment, relative achievement of individual performance measures and goals established for each NEO, as well as Company performance for fiscal year 2022 in areas over which each NEO had direct influence. • The Committee has considered the results of advisory Say-on-Pay votes in its decision-making for executive compensation of the NEOs and has concluded that no significant changes in executive compensation decisions and policies are warranted. For additional details on Say-on-Pay results, please refer to Item No. 2 Advisory Vote to Approve Executive Compensation (“Say-on-Pay”) above. In March 2022, the Committee made compensation decisions, which included a grant of 5,347 RSUs, in connection with Mr. Ridge’s retirement as CEO as of August 31, 2022 and Chairman of the Board as of December 13, 2022. A summary of such decisions is set forth in the Executive Compensation section under the heading, “Summary of Transition and Release Agreement with Garry O. Ridge.” GOVERNANCE OF EXECUTIVE OFFICER COMPENSATION PROGRAM The primary purpose of the Committee is to establish the compensation and benefit arrangements for our CEO and other NEOs and executive officers of the Company, on behalf of the Board. The Committee is responsible for developing and reviewing the Company’s overall executive compensation strategy, with support from management and consultants. For fiscal year 2022 1 For a more complete description of the RSU awards, refer to the Executive Officer Compensation Decisions section below under Restricted Stock Unit Awards. 2 For a more complete description of the MSU awards, refer to the Executive Officer Compensation Decisions section below under Market Share Unit or MSU Awards. 3 For a more complete description of the PSU awards, refer to the Executive Officer Compensation Decisions section below under Performance Share Unit or PSU Awards. 22 executive compensation decisions, the Committee engaged an independent compensation consulting firm, ClearBridge. The Committee also has the authority to administer the Company’s equity compensation plans. The Committee operates pursuant to a charter that outlines its responsibilities, including evaluating the performance and approving annual compensation and benefits for the Company’s executive officers. A copy of the Compensation Committee Charter (“Compensation Charter”), which the Company’s website at http://investor.wd40company.com in the “Corporate Governance” section. is reviewed annually, can be found on PROCESS FOR EVALUATING EXECUTIVE OFFICER PERFORMANCE AND COMPENSATION In accordance with its Compensation Charter, the Committee works with the Company’s Human Resources function in carrying out its responsibilities. The Vice President of Global Organizational Development is management’s liaison with the Committee. ClearBridge provides advice and information relating to executive compensation and benefits. For fiscal year 2022, ClearBridge assisted the Committee in the evaluation of executive base salary, cash incentives, equity incentive design and award levels, and the specific pay recommendation for our CEO. ClearBridge reports directly to the Committee and provides no services to management. EXECUTIVE COMPENSATION PHILOSOPHY AND FRAMEWORK COMPENSATION OBJECTIVES The Company’s compensation program for executive officers is designed to achieve five primary objectives: 1. Attract, motivate, reward and retain high performing executives; 2. Align the interests and compensation of executives with the value created for stockholders; 3. Create a sense of motivation among executives to achieve both short- and long-term Company objectives; 4. Create a direct, meaningful link between business and team performance and individual accomplishment and rewards; and 5. Ensure our compensation programs are appropriately competitive in the relevant labor markets. TARGET PAY POSITION / MIX OF PAY The Company’s compensation program consists primarily of base salary, annual cash incentives, and long-term oriented equity awards. The Committee considers multiple factors when establishing target total compensation opportunities for executive officers (including base salary, target incentive compensation, and RSU, PSU and MSU equity awards). Specifically, compensation is determined considering internal factors (including, but not limited to, individual performance, complexity of job function, length of time within the position and anticipated contribution) as well as external market data. When using external market data, the Committee does not target a specific pay positioning. Instead, the Committee reviews the full range of market data, with a specific focus on market 50th percentile of total compensation as a reference point. The Committee then assesses internal factors for each executive officer, which results in final total target pay levels above or below the market 50th percentile, depending on the Committee’s individual assessment. Based on recent market analysis, executive officer target pay levels generally fall between the 25th and the 50th percentiles on average, with variability by individual. Actual compensation will vary from target based on the Company’s incentive compensation plan designs, which consider the Company’s performance. This approach is consistent with the Committee’s historic approach to assessing market data and setting target pay levels (i.e., considering a holistic assessment of relevant internal and external considerations, on an individual case-by-case basis). The mix of pay for executive officers is intended to provide significant incentives to drive overall Company performance and increased stockholder value. This mix consists of Salary and All Other Compensation amounts as reported in the Summary Compensation Table under Executive Compensation below, maximum possible values for RSUs, MSUs and PSUs (collectively, “Stock Awards”) as reported in the table in footnote 1 to the Summary Compensation Table, maximum possible non-equity incentive plan compensation amounts as reported in the Grants of Plan-Based Awards table under Executive Compensation below, and when applicable, Bonus. The total of these maximum possible compensation amounts for NEOs is referred to as “Total Compensation Opportunity.” In the charts below, the Total Compensation Opportunity for the CEO, and for all other NEOs in the aggregate, has been divided among elements of compensation that are considered at risk (MSUs, tied to longer term relative stockholder return, and PSUs and Incentive Compensation, tied to current fiscal year financial performance), and those elements that are not performance-based and not considered at risk (Salary, All Other Compensation and RSUs). Approximately 59% of the CEO’s Total Compensation Opportunity for fiscal year 2022 was at risk (which percentage would have been higher if the additional RSU grant in March 2022 as shown in the table under the section, “Grants of Plan-Based Awards - Fiscal Year 2022,” had not been included) while approximately 62% of the Total Compensation Opportunity for fiscal year 2022 for the other NEOs was at risk. 23 COMPENSATION BENCHMARKING Before making fiscal year 2022 compensation decisions in October 2021, the Committee examined the executive compensation practices of a peer group of 13 publicly traded companies to assess the competitiveness of the Company’s executive compensation. Peer group companies were selected from a list of U.S. headquartered companies having revenues, earnings, and market capitalization reasonably comparable to the Company and doing business in the specialty chemical industry or within specific consumer products categories. Compared to the prior year peer group, the list for fiscal year 2022 excluded two companies, Landec Corporation and Rayonier Advanced Materials, Inc., that were no longer considered reasonably comparable to the Company based on revenues, market capitalization and/or primary business focus and added Livent Corporation, which is an international chemicals company that more closely meets the peer group criteria. In addition to peer group data, the Committee considered general industry company survey data provided by Korn Ferry Hay Group, a global management consulting firm. The Committee applied these data sources to establish the market median level of compensation for each executive officer position. The peer group companies used in the analysis for fiscal year 2022 compensation decisions were as follows: • • • • • • • American Vanguard Corporation Balchem Corporation Chase Corporation Dorman Products, Inc. Hawkins, Inc. Ingevity Corporation Innospec Inc. • Livent Corporation • Prestige Consumer Healthcare, Inc. • Quaker Chemical Corporation • Sensient Technologies Corporation • Stoneridge Inc. • USANA Health Sciences, Inc. 24 EXECUTIVE OFFICER COMPENSATION DECISIONS FOR FISCAL YEAR 2022 BASE SALARY: PROCESS Base salaries for executive officers, including NEOs, are approved by the Committee effective for the beginning of each fiscal year. In setting base salaries, the Committee normally considers the salary range prepared by its independent compensation consultant based on each NEO’s job responsibilities and the market 50th percentile target pay position. Salary adjustments, if any, are based on factors such as individual performance, position, current pay relative to the market, future anticipated contribution and the Company’s merit increase budget. Assessment of individual performance follows a rigorous evaluation process, including self-evaluation and the establishment of annual goals for each executive officer and an assessment of the achievement thereof. Individual performance elements considered in this process included individual and Company performance goals and achievements in such areas as growth, leadership, earnings and governance for Mr. Ridge; growth, leadership, innovation, brand development, earnings and customer relations for Mr. Brass; governance and risk, compliance, forecasting and financial reporting for Mr. Rembolt; business unit performance, teamwork, execution and growth for Ms. Olsem; and global brand protection, corporate governance, legal services, risk management, and compliance for Ms. Kiamilev. BASE SALARY: FISCAL YEAR 2022 In October 2021, base salary increases for executive officers for fiscal year 2022 were approved as follows: a 2.5% increase from fiscal year 2021 salary amounts for all executive officers, except for Ms. Olsem who received a 10% increase. These increases in base salaries were reasonable and generally modest since executive officers did not receive an increase for fiscal year 2021. Base salaries in fiscal year 2021 remained unchanged from fiscal year 2020 due the continuing uncertainty for the global economy, labor markets, and the Company’s business attributable to the COVID-19 pandemic. PERFORMANCE INCENTIVE PROGRAM The Company uses its Performance Incentive Program, which is a component of the WD-40 Company Performance Incentive Compensation Plan approved by the stockholders at the Company’s 2017 annual meeting, to tie executive officer compensation to the Company’s financial performance. For NEOs, Incentive Compensation opportunities for fiscal year 2022 were based on goals for two corporate performance measures: (i) Regional Adjusted EBITDA; and/or (ii) Global Adjusted EBITDA. In computing the financial results to be measured against the goals established for Regional Adjusted EBITDA and Global Adjusted EBITDA performance measures, the Company may exclude certain expenditures as approved by the Committee. For fiscal year 2022, no such exclusions were applicable. The Company’s Incentive Compensation program is designed to fund the Incentive Compensation payout to employees, including NEOs, from increased earnings over the prior fiscal year. If the Company does not realize an increase in Global Adjusted EBITDA over the prior fiscal year, it is possible that Ms. Olsem will earn some Incentive Compensation because the performance measure for a portion of the Incentive Compensation opportunity payable to her is based on Regional Adjusted EBITDA. Depending upon performance, the Incentive Compensation opportunities for fiscal year 2022 reach up to 200% of base salary for Mr. Ridge, up to 160% of base salary for Mr. Brass, up to 100% of base salary for Mr. Rembolt, up to 110% of base salary for Ms. Olsem, and up to 90% of base salary for Ms. Kiamilev. The Performance Incentive Program provides for three performance measure levels: Levels A, B and C. Only two of the three performance measure goals are applied for NEOs to calculate earned Incentive Compensation and to provide enhanced incentives to achieve maximum Global Adjusted EBITDA results for the benefit of stockholders. For NEOs, the Performance Incentive Program for fiscal year 2022 provided two performance measure levels (A and C) for determination of earned Incentive Compensation; each level represented 50% of the maximum Incentive Compensation potential (“Annual Opportunity”). The maximum Incentive Compensation payout for Ms. Olsem required achievement of specified goals for Regional Adjusted EBITDA (Level A) and Company performance that equaled the maximum goal amount for Global Adjusted EBITDA (Level C,) each described below. For Messrs. Ridge, Brass and Rembolt and Ms. Kiamilev (each of whom has global rather than regional responsibilities), the maximum Incentive Compensation payouts required achievement of specified goals for Global Adjusted EBITDA for each of Levels A and C. Target and maximum payouts for NEOs for the fiscal year 2022 Performance Incentive Program are disclosed below in the table under the heading, Grants of Plan-Based Awards - Fiscal Year 2022. 25 The following table sets forth the fiscal year 2022 Incentive Compensation payout weightings and the minimum and maximum goals for the performance measures applicable to each of the NEOs. The minimum and maximum Level A goals for Regional Adjusted EBITDA and Global Adjusted EBITDA were based on earnings before deduction of Incentive Compensation. The minimum and maximum Level C goals for Global Adjusted EBITDA were based on earnings after deduction of an estimate of the maximum possible Incentive Compensation for Levels A and B, but before deduction of Incentive Compensation for Level C. Level A A C Performance Measure Regional EBITDA (Americas) Global EBITDA Global EBITDA Garry O. Ridge Jay W. Rembolt Steven A. Brass Phenix Q. Kiamilev N/A 50% 50% Patricia Q. Olsem 50% N/A 50% Minimum Goal FY 2022 ($ thousands) Maximum Goal FY 2022 ($ thousands) $ 61,041 $ 65,914 $ 92,165 $ 107,895 $ 96,895 $ 106,285 The following table sets forth the fiscal year 2022 performance and percentage achievement for each performance measure under the Performance Incentive Program formulas applicable to NEOs. Level A A C Performance Measure Regional EBITDA (Americas) Global EBITDA Global EBITDA Actual FY 2022 ($ thousands) $ 57,504 $ 96,299 $ 93,258 % Achievement 0.0% 26.3% 0.0% Achievement of the maximum goals for Regional Adjusted EBITDA and Global Adjusted EBITDA is intended to be attainable through the concerted efforts of management teams working in their own regions and areas of responsibility and for the Company as a whole. Based on the Company’s fiscal year 2022 performance and the Committee’s certification of the relative attainment of each performance measure under the Performance Incentive Program, the payouts for our NEOs were calculated. On October 10, 2022, the Committee approved payment of the following Incentive Compensation to NEOs for fiscal year 2022 performance: Named Executive Officer Garry O. Ridge Steven A. Brass Jay W. Rembolt Phenix Q. Kiamilev Patricia Q. Olsem Title Chief Executive Officer and Chairman of the Board President and Chief Operating Officer Vice President, Finance, Treasurer and Chief Financial Officer Vice President, General Counsel and Corporate Secretary Division President, Americas FY 2022 Annual Opportunity (As % of Base Salary) 200% FY 2022 Incentive Compensation Paid ($) $ 181,678 160% 100% $ 96,091 $ 43,992 90% $ 32,001 110% $ - FY 2022 Actual Incentive Compensation (As % of Opportunity) 13% 13% 13% 13% 0% To illustrate how the Performance Incentive Program with Levels A and C works, Ms. Kiamilev’s Incentive Compensation of $32,001 for fiscal year 2022 was generally computed as follows: Incentive Compensation Annual Opportunity = 90% x Salary ($271,625) = $244,463 • • Level A (Regional Adjusted EBITDA) = 50% of Annual Opportunity = $122,231 — Level A Incentive Compensation = Level A Achievement (26.3%) x Level A Annual Opportunity = $32,001 • Level C (Global Adjusted EBITDA) = 50% of Annual Opportunity = $122,231 — Level C Incentive Compensation = Level C Achievement (0%) x Level C Annual Opportunity = $0 • Level A Incentive Compensation + Level C Incentive Compensation = $32,001 + $0 = $32,001 26 EQUITY COMPENSATION Equity compensation is a critical component of the Company’s efforts to attract and retain executives and key employees, encourage employee ownership in the Company, link pay with performance and align the interests of executive officers with those of stockholders. To provide appropriately directed incentives to our executive officers, the Company grants awards of RSUs, MSUs and PSUs. Equity awards for fiscal year 2022 were granted to NEOs pursuant to the Company’s 2016 Stock Incentive Plan. In October 2021, primary equity allocations of RSU and MSU awards for fiscal year 2022 were granted. The authorized awards were divided equally between the two types of awards for NEOs. MSU awards provide for vesting after the measurement period, as described in more detail below. In addition to the RSU and MSU awards, the NEOs were also granted PSU awards in October 2021. Compared to the retention and long-term performance-based attributes of the RSU and MSU awards, the PSU awards provide a near-term incentive. If the applicable performance measures are achieved, PSU awards vest at the end of the fiscal year for which they are granted. RSU, MSU and PSU awards are subject to terms and conditions set forth in an applicable award agreement (the “Award Agreement”). The principal attributes and benefits of equity awards for executive officers are as follows: • RSU awards provide for annual vesting in relatively equal portions over three years from the grant date, subject to earlier vesting upon the effective date of retirement under certain conditions. • MSU awards provide for performance-based vesting tied to the Company’s TSR over a performance measurement period of three fiscal years beginning with the fiscal year in which the awards are granted and ending on August 31st of the third year. The change in the value of the Company’s common stock assumes the reinvestment of dividends and compares the Company’s TSR against the Index. PSU awards provide for performance-based vesting tied to the Company’s Global Adjusted EBITDA achievement for the fiscal year in which the awards are granted in excess of the maximum goal for Global Adjusted EBITDA under Level C of the Company’s Performance Incentive Program. • • RSU and MSU awards provide for the issuance of shares of the Company’s common stock upon vesting. • PSU awards provide for the issuance of restricted shares of the Company’s common stock upon vesting. These issued shares are restricted to the extent that they may not be sold before termination of employment. • A mix of equity awards is more balanced compared to RSU awards alone or other equity awards, such as stock options, because: (i) annual MSU awards provide a more direct performance-based incentive aligned directly with longer term stockholder interests; (ii) RSU awards have a higher perceived value to recipients than stock options; (iii) PSU awards offer a reward for exceeding the highest goal for near-term financial results for the Company; (iv) equity awards have a less dilutive impact on total outstanding shares than stock options; and (v) holding shares of the Company’s common stock (and earning dividends) encourages long-term stock ownership, promotes retention and supports compliance with the Company’s stock ownership guidelines (described below in the Other Compensation Policies section, under the heading, Executive Officer Stock Ownership Guidelines). The Board recognizes the potentially dilutive impact of equity awards. Accordingly, the Company’s equity award practices are designed to balance the impact of dilution and the Company’s need to remain competitive by recruiting, retaining, and providing incentives for high-performing employees. Restricted Stock Unit Awards RSU awards provide for the issuance of shares of the Company’s common stock upon vesting provided that the employee remains employed with the Company on the applicable vesting date (except for termination of employment due to death or disability or vesting upon retirement as noted below). Except as otherwise noted, RSU awards vest annually over three years from the grant date. 34% of the RSU award vests on the first vesting date and 33% of the RSU award vests on each of the second and third vesting dates. The vesting date each year is the third business day following the Company’s public release of its annual earnings for the fiscal year, but not later than November 15. Award Agreements provide that for employees who retire from the Company after reaching age 65, or employees who retire from the Company after reaching age 55 and have been employed by the Company for at least 10 years, all RSUs will vest upon the effective date of retirement. Shares for RSU awards granted prior to fiscal year 2021 that vest due to death, disability or retirement will be issued within 30 days after the effective date of termination of employment, except for specified employees, including the Company’s executive officers, whose RSU shares will be issued no earlier than 6 months after the effective date of separation from service or termination of employment due to disability. For shares of RSU awards granted starting in fiscal year 2022, RSU shares will be issued no earlier than 6 months after the effective date of separation of service, which policy shall apply to every employee. 27 Payment of required withholding taxes due to the vesting of the RSU awards will be covered through withholding of shares by the Company. The Company will issue a net number of RSU shares after withholding shares having a value as of the vesting date, or as of the date of issuance in the case of death, disability or retirement, equal to the required tax withholding obligation. Market Share Unit or MSU Awards MSU awards provide for vesting over a performance measurement period of three fiscal years commencing with the fiscal year in which the MSU awards are granted (the “MSU Measurement Period”). Except as noted below with respect to vesting upon death, disability or retirement, employees must remain employed with the Company until the date on which the Committee certifies achievement of the requisite performance provided for in the MSU Award Agreement. Shares of the Company’s common stock equal to an “Applicable Percentage” of the “Target Number” of shares covered by the MSU awards to NEOs will be issued on the Settlement Date (defined below). The Applicable Percentage is determined by the performance provisions of the MSU Award Agreements described below. The Settlement Date for an MSU award is the third business day following the Company’s public release of its annual earnings for the third fiscal year of the MSU Measurement Period. Award Agreements provide for monthly pro-rata vesting of MSUs as of the end of the MSU Measurement Period in the event of the earlier termination of employment due to death, disability, or retirement after reaching age 65, or retirement after reaching age 55 with at least 10 years of employment with the Company. To calculate the number of MSUs vested and the corresponding number of shares to be issued on the Settlement Date, the Target Number of shares covered by the MSU awards will be adjusted according to the pro-rata portion of the Measurement Period that has elapsed as of the effective date of termination of employment. The Committee may also exercise its discretion to provide for monthly pro-rata vesting of MSUs awarded to an employee who resigns or is terminated by the Company for reasons other than good cause. Payment of required withholding taxes due to the settlement of an MSU award, if any, will be covered through withholding of shares by the Company. The Company will issue a net number of MSU shares after withholding shares having a value on the Settlement Date equal to the required tax withholding obligation. The performance provisions of MSU awards are based on relative TSR for the Company over the MSU Measurement Period compared to the total return (“Return”) for the Index reported for total return (with dividends reinvested), as published by Russell Investments. To compute the relative TSR for the Company compared to the Return for the Index, dividends paid will be treated as reinvested as of the ex-dividend date for each declared dividend. The Applicable Percentage of the Target Number of shares will be determined for NEOs based on the absolute percentage point difference between the TSR for the Company compared to the Return for the Index (the “Relative TSR”) as set forth in the table below: Relative TSR (absolute percentage point difference) ≥ 20% 15% 10% 5% Equal -5% -10% >-10% Applicable Percentage 200% 175% 150% 125% 100% 75% 50% 0% The Applicable Percentage will be determined on a straight-line sliding scale from the minimum 50% Applicable Percentage achievement level to the maximum 200% Applicable Percentage achievement level. To determine the TSR for the Company and the Return for the Index, the beginning and ending values for each measure will be determined by taking the average closing price on all market trading days within the ninety (90) calendar days prior to the beginning of the fiscal year for the beginning of the MSU Measurement Period and all market trading days within the ninety (90) calendar days prior to the end of the third fiscal year of the MSU Measurement Period. In the event of a Change in Control (as defined in the 2016 Stock Incentive Plan), the MSU Measurement Period will end as of the effective date of the Change in Control and the ending values for calculating the TSR for the Company and the Return for the Index will be determined based on the closing price of the Company’s common stock and the value of the Index, respectively, immediately prior to the effective date of the Change in Control. The Applicable Percentage will be applied to a proportionate amount of the Target Number of MSUs based on the portion of the Measurement Period elapsed as of the effective date of the 28 Change in Control. The NEO will receive RSUs for the portion of the Target Number of MSUs to which the Applicable Percentage is not applied. Those RSUs will time vest, subject to rights under the NEO’s Change of Control Severance Agreement, as of the Settlement Date. Performance Share Unit or PSU Awards PSU awards provide for vesting over a performance measurement period of the fiscal year in which the PSU awards are granted (the “PSU Measurement Year”). The PSU awards provide for vesting of PSUs equal to an “Applicable Percentage” of the “Maximum Number” of PSUs awarded to the NEOs as of the conclusion of the PSU Measurement Year. The Applicable Percentage is determined by reference to the vesting provisions of the PSU Award Agreement as described below. Restricted shares of the Company’s common stock equal to the number of vested PSUs will be issued as of the “Settlement Date.” The restricted shares issued upon vesting of the PSUs will be subject to a restrictive endorsement and may not be sold before termination of employment. The Settlement Date for vested PSU awards is the third business day following the Company’s public release of its annual earnings for the PSU Measurement Year. Award Agreements provide for monthly pro-rata vesting of PSUs as of the end of the PSU Measurement Year in the event of the earlier termination of employment due to death, disability, or retirement after reaching age 65, or retirement after reaching age 55 with at least 10 years of employment with the Company. To calculate the number of shares to be issued upon vesting of the PSUs, the Maximum Number of shares covered by the PSU awards will be adjusted according to the pro-rata portion of the PSU Measurement Year that has elapsed as of the effective date of termination of employment. Payment of required withholding taxes due with respect to the settlement of any vested PSU award will be covered through withholding of shares by the Company. The Company will issue a net number of PSU shares after withholding shares having a value as of the Settlement Date equal to the required tax withholding obligation. The vesting provisions of the PSUs are based on relative achievement within an established performance measure range of the Company’s Global Adjusted EBITDA for the PSU Measurement Year. For fiscal year 2022, the established performance targets for PSUs to vest are set forth in the table below: Global Adjusted EBITDA ≥ $108,762,000 $102,500,000 < $102,500,000 Applicable Percentage 100% 5% 0% If Global Adjusted EBITDA exceeds the performance target set at 5%, then the Applicable Percentage is determined on a straight- line basis from the implied zero percentage achievement level of $102,170,000 to the 100% Applicable Percentage achievement level, but the Applicable Percentage shall not exceed 100%. EQUITY AWARDS – FISCAL YEAR 2022 For fiscal year 2022, equity awards to our executive officers were generally granted to satisfy goals for executive officer retention, to provide incentives for current and future performance, and to meet objectives for overall levels of compensation and pay mix. Equity awards granted to NEOs by the Committee in October 2021 and March 2022 are set forth below in the table under the heading, Grants of Plan-Based Awards - Fiscal Year 2022. In establishing award levels for the NEOs in October 2021 for fiscal year 2022, the Committee placed emphasis on long-term retention goals and desired incentives for current and future contributions. The RSU and MSU awards in October 2021 to our CEO were, consistent with past practice, larger than the awards to the other NEOs in recognition of his higher level of responsibility for overall Company performance and based upon market data that supports a higher level of equity compensation for our CEO. RSU awards and Target Number of shares covered by MSU awards were determined for each NEO based on an assessment of the NEO’s achievement of individual performance goals as well as Company performance for fiscal year 2021 in areas over which the NEO had particular influence. The grant of RSUs to the CEO in March 2022 is discussed in the Executive Compensation section under the heading, “Summary of Transition and Release Agreement with Garry O. Ridge.” The PSU awards were established by reference to each NEO’s Incentive Compensation opportunity based on fiscal year 2021 base salary and fiscal year 2022 maximum Incentive Compensation opportunity; the share equivalent value of the PSUs awarded to NEOs as of the date of grant equals 50% of the NEO’s maximum Incentive Compensation opportunity. Market Share Unit or MSU Award Vesting for Three Fiscal Year Performance Achievement On October 10, 2022, the Committee reviewed the performance measure applicable to MSU awards granted to the NEOs in October 2019. The Committee assessed the Company’s relative TSR compared to the Return for the Index for the performance 29 Measurement Period ended August 31, 2022 to calculate the number of shares of the Company’s common stock for those MSU awards vesting, if any. The relative TSR compared to the Return for the Index (as an absolute percentage point difference) over the three fiscal year Measurement Period ending August 31, 2022 was 10.9% lower. As a result, based on the table above in the description of the MSU awards, the Committee certified that the Applicable Percentage of the Target Number of shares underlying the MSU awards granted in October 2019 was 0% for each of the NEOs. The following table sets forth the Target Number of shares underlying the MSU awards granted to each NEO in October 2019, none of which vested and were forfeited: Named Executive Officer Garry O. Ridge Steven A. Brass Jay W. Rembolt Phenix Q. Kiamilev Patricia Q. Olsem Target Number 4,295 1,745 805 - 698 Vested Shares - - - - - Performance Share Unit or PSU Award Vesting for Fiscal Year 2022 Performance Achievement PSU awards granted to the NEOs in October 2021 as shown in the Grants of Plan-Based Awards - Fiscal Year 2022 table below did not vest and were forfeited without any value to the NEOs. The Company’s Global Adjusted EBITDA (as described above in the description of PSU awards), which was $93,133,000 for fiscal year 2022, was not attained as required for vesting. BENEFITS AND PERQUISITES The NEOs are provided with standard health and welfare benefits and the opportunity to participate in the Company’s 401(k) Plan, similar to those generally offered to other Company employees. The Plan serves to provide our executive officers, including the eligible NEOs, with tax-advantaged retirement savings as an additional component of overall compensation. Employees have the right to invest the Company’s contributions to the Plan in shares of the Company’s common stock as an alternative to other investment choices available under the Plan. The Company maintains individual Supplemental Death Benefit Plan agreements for Messrs. Ridge and Rembolt, and such agreements will terminate once they are no longer employees as of January 2, 2023 and January 6, 2023, respectively. The Company’s obligations under these agreements are funded by life insurance policies owned by the Company. The Company also provides leased vehicles or a vehicle allowance to its executive officers. The costs associated with the perquisites and other personal benefits provided to the NEOs are included in the Summary Compensation Table below and separately identified for fiscal year 2022 in the footnote disclosure of such perquisites and other personal benefits. The Committee considers the cost of the foregoing health and welfare benefits and perquisites in connection with its approval of the total compensation package for our NEOs. All such costs are considered appropriate in support of the Committee’s objective of attracting and retaining high quality executive officers because they are common forms of benefits and perquisites offered to executives, who expect and compare them to competing compensation packages. POST-EMPLOYMENT OBLIGATIONS The Company has change of control severance agreements with each of the NEOs. The specific terms of the agreements are described below under the heading, Change of Control Severance Agreements. In establishing the terms and conditions of these agreements, consideration was given to including severance compensation in the event of termination of employment without cause (or for good reason) without regard to a change of control of the Company. No such provisions were included, and severance compensation is payable only following a “double-trigger”: termination of employment without “cause” or for “good reason” within two years following a “change of control” of the Company (as defined in these agreements). The Committee believes that the change of control severance agreements help ensure the best interests of stockholders by fostering continuous employment of key management personnel. As is the case in many public companies, the possibility of an unsolicited change of control exists. The uncertainty among management that can arise from a possible change of control can result in the untimely departure or distraction of key executive officers. Reasonable change of control severance agreements reinforce continued attention and dedication of executive officers to their assigned duties and support the Committee’s objective of retaining high quality executives. 30 OTHER COMPENSATION POLICIES EXCHANGE ACT RULE 10b5-1 TRADING PLANS AND INSIDER TRADING GUIDELINES A description of the Company’s insider trading policies applicable to our executive officers is included above in this Proxy Statement under Insider Trading Policy – Prohibited Hedging Transactions. EXECUTIVE OFFICER STOCK OWNERSHIP GUIDELINES The Board has approved guidelines for executive officer ownership of the Company’s common stock. The guidelines specify that each executive officer will be expected to attain, within a period of five years from the later of the date of appointment of the executive officer or the date of adoption of the guidelines, and to maintain thereafter, equity ownership in the Company valued at not less than one times current base salary for executive officers other than our CEO and CFO, two times the current base salary for our CFO, and five times the current base salary for our CEO. Valuation is determined at the higher of cost or current fair market value for shares of the Company’s common stock held outright and, if applicable, shares underlying vested equity awards held by the executive officers. The Board believes that the stock ownership guidelines serve to improve alignment of the interests of our executive officers and the Company’s stockholders. As of October 17, 2022, all NEOs comply with the established guidelines of stock ownership. TAX CONSIDERATIONS Section 162(m) of the Internal Revenue Code of 1986 limits the deductibility of compensation payable in any tax year to certain covered executive officers. Section 162(m) generally provides that a company covered by the statute cannot deduct compensation paid to its most highly paid executive officers to the extent that such compensation exceeds $1 million per officer per taxable year. While the Committee will always seek to maximize the deductibility of compensation paid to the Company’s executive officers, the Committee provides total compensation to the executive officers in line with competitive practice, the Company’s compensation philosophy, and the interests of stockholders. Therefore, the Company presently pays some compensation to its executive officers that may not be deductible under Section 162(m) and it is anticipated that the Company will continue to do so. ACCOUNTING CONSIDERATIONS We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”) for our stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for share-based payment awards made to employees and directors, including restricted stock awards and performance-based awards, based on the grant date fair value of these awards. Depending upon the type of performance conditions applicable to performance-based awards, ASC Topic 718 may require the recording of compensation expense over the service period for the award (usually, the vesting period) based on the grant date value (such as for our MSUs) or compensation expense may be recorded based on the expected probability of vesting over the vesting period, subject to adjustment as such probability may vary from period to period (such as for our PSUs). This calculation is performed for accounting purposes and amounts reported in the compensation tables below are based on the compensation expense expected to be recorded over the vesting periods for the awards, determined as of the grant date for the awards. In the case of our MSUs, the grant date values fix the compensation expense to be recorded over the vesting period. These amounts are reported even though our executive officers may realize more or less value from their MSU awards depending upon the actual level of achievement of the applicable performance measure. In the case of our PSUs, no value is included in the Summary Compensation Table or in the table under Grants of Plan-Based Awards – Fiscal Year 2022 because ASC Topic 718 requires that we assess the probability of vesting of the PSUs as of the grant date. As of the grant date, we did not consider it probable that the PSUs would become vested even though it was possible that our executive officers would receive shares upon vesting of the PSUs following the end of the fiscal year upon achievement of the applicable performance measure. 31 COMPENSATION COMMITTEE REPORT The Compensation Committee of WD-40 Company’s Board of Directors (the “Board”) has reviewed and discussed with management of the Company the Compensation Discussion and Analysis included in this Proxy Statement and the Company’s annual report on Form 10-K for the year ended August 31, 2022, and, based upon that review and discussion, recommended to the Board that it be so included. Compensation Committee Anne G. Saunders (Chair) Melissa Claassen Lara L. Lee David B. Pendarvis Gregory A. Sandfort EXECUTIVE COMPENSATION As August 31, 2022, none of our executive officers has an employment agreement or other arrangement, whether written or unwritten, providing for a term of employment or compensation for services rendered other than under specific arrangements, plans or programs described herein. For fiscal year 2022, our executive officers received compensation benefits for services rendered in fiscal year 2022 as more fully described and reported in the CD&A section of this Proxy Statement and in the compensation tables below. Total cash compensation for fiscal year 2022, comprised of annual salary and earned Incentive Compensation, was 25% of total compensation for our CEO and 38% to 47% of total compensation for the other NEOs. SUMMARY COMPENSATION TABLE The following table shows information for the three fiscal years ended August 31, 2022, August 31, 2021, and August 31, 2020 concerning the compensation of our CEO, our CFO and the three most highly compensated executive officers other than the CEO and CFO as of the end of fiscal year 2022 (collectively, the “Named Executive Officers” or “NEOs”): Name and Principal Position(s) Garry O. Ridge Chief Executive Officer and Chairman of the Board Year 2022 2021 2020 Salary Bonus Stock Awards1 Non-Equity Incentive Plan Compensation2 All Other Compensation3 Total $ 692,121 $ - $ 2,621,233 $ 181,678 $ 137,381 $ 3,632,413 $ 675,240 $ - $ 1,574,584 $ 1,350,480 $ 129,584 $ 3,729,888 $ 675,240 $ 196,718 $ 1,775,853 $ 140,647 $ 119,403 $ 2,907,861 Steven A. Brass President and Chief Operating Officer $ 457,583 $ - $ 825,029 $ 96,091 $ 101,180 $ 1,479,882 2022 2021 $ 446,422 $ - $ 787,292 $ 714,275 $ 97,156 $ 2,045,145 $ 446,422 $ 103,727 $ 721,505 $ 74,161 $ 96,810 $ 1,442,625 2020 Jay W. Rembolt Vice President, Finance, Treasurer and Chief Financial Officer 2022 $ 335,186 $ - $ 360,772 $ 43,992 $ 108,469 $ 848,419 2021 $ 327,011 $ - $ 295,136 $ 327,011 $ 106,787 $ 1,055,945 $ 327,011 $ 47,634 $ 332,844 $ 34,037 $ 101,178 $ 842,704 2020 Phenix Q. Kiamilev Vice President, General Counsel and Corporate Secretary 2022 2021 2020 $ 271,625 $ - $ 262,984 $ 32,001 $ 90,355 $ 656,965 - - - - - - - - - - - - Patricia Q. Olsem Division President, Americas 2022 $ 330,413 $ - $ 360,772 $ - $ 104,654 $ 795,839 $ 300,375 $ - $ 344,391 $ 294,072 $ 95,166 $ 1,034,004 2021 2020 $ 300,375 $ - $ 288,602 $ 104,419 $ 96,630 $ 790,026 32 1 Stock Awards other than PSUs for fiscal year 2022 and deferred performance units (“DPUs”) for fiscal years 2021 and 2020 are reported at their grant date fair values. Grant date fair value assumptions and related information is set forth in Note 2, Basis of Presentation and Summary of Significant Accounting Policies under the subsection “Stock-based Compensation” and Note 14, Stock-based Compensation, to the Company’s financial statements included in the Company’s Annual Report on Form 10-K filed on October 24, 2022. Stock Awards consisting of MSUs awarded in fiscal years 2022, 2021, and 2020 are included based on the value of 100% of the target number of shares of the Company’s common stock to be issued upon achievement of the applicable performance measure. Stock Awards consisting of PSUs awarded for fiscal year 2022 and 2021 and DPUs awarded for fiscal year 2020 are reported as having no value under applicable disclosure rules and ASC Topic 718 due to the lack of any expected probability of vesting of the PSUs and DPUs as of their respective grant dates, as discussed above in the CD&A section under the heading, Accounting Considerations. For achievement of the highest level of the applicable performance measure for the MSUs granted in fiscal year 2020, the NEOs other than Ms. Olsem receive 200% of the target number of shares, and Ms. Olsem receives 150% of the target number of shares. Since the highest level of the applicable performance measure for the PSUs granted in fiscal year 2022 was not achieved, NEOs did not receive any such PSUs and they were forfeited. Stock Awards in fiscal year 2022 for Mr. Ridge includes an award of 5,347 RSUs in March 2022 in addition to an award of 3,476 RSUs in October 2021. The following table sets forth the amounts that would have been included for the Stock Awards for fiscal years 2022, 2021, and 2020 for each of the NEOs based on the grant date fair values and the maximum number of shares targeted to be received under MSU, PSU and/or DPU award agreements. PSUs were granted starting in fiscal year 2021 because the Company discontinued grants of DPUs after fiscal year 2020. Named Executive Officer Garry O. Ridge Steven A. Brass Jay W. Rembolt Phenix Q. Kiamilev Patricia Q. Olsem Year 2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020 RSUs $ 1,751,225 $ 778,661 MSUs (Maximum) $ 1,740,016 $ 1,591,847 PSUs/DPUs (Maximum) $ 666,722 $ 666,004 Total Stock Awards $ 4,157,963 $ 3,036,512 $ 776,364 $ 1,998,979 $ 652,585 $ 3,427,928 $ 390,025 $ 870,008 $ 352,449 $ 1,612,482 $ 389,330 $ 795,923 $ 352,160 $ 1,537,413 $ 315,426 $ 812,158 $ 317,112 $ 1,444,696 $ 170,552 $ 380,441 $ 161,340 $ 712,333 $ 145,950 $ 298,372 $ 161,168 $ 605,490 $ 145,512 $ 374,663 $ 157,913 $ 678,088 $ 124,323 $ 277,321 $ 117,710 $ 519,354 $ - $ - $ - $ - $ - $ - $ - $ - $ 170,552 $ 380,441 $ 162,931 $ 713,924 $ 170,308 $ 348,167 $ 162,946 $ 681,421 $ 126,170 $ 324,863 $ 131,472 $ 582,505 2 3 Amounts reported as Non-Equity Incentive Plan Compensation represent Incentive Compensation payouts under the Company’s Performance Incentive Program as described in the narrative preceding the Summary Compensation Table and in the CD&A section of this Proxy Statement. Threshold, target and maximum payouts for each of the NEOs for fiscal year 2022 are set forth below in the table under the heading, Grants of Plan-Based Awards - Fiscal Year 2022. All Other Compensation for each of the NEOs includes the following items: (i) employer profit sharing and matching contributions to the Company’s 401(k) Plan (“Retirement Benefits”); (ii) dividend equivalent amounts paid with respect to vested RSUs and vested DPUs held and that will not be settled in shares until termination of employment (“Dividend Equivalents”); (iii) the value of supplemental life insurance benefits received by Messrs. Ridge and Rembolt described below under the heading, Supplemental Death Benefit Plans and Supplemental Insurance Benefits (“Death Benefits”); (iv) perquisites and benefits which include group life, medical, dental, vision, wellness and other insurance benefits (“Welfare Benefits”); and (v) vehicle allowance costs which include lease or depreciation expense, fuel, maintenance and insurance costs (“Vehicle Allowance”). 33 The following table specifies the amounts included in All Other Compensation for fiscal year 2022 for each of the NEOs: Named Executive Officer Garry O. Ridge Steven A. Brass Jay W. Rembolt Phenix Q. Kiamilev Patricia Q. Olsem Retirement Benefits $ 50,000 $ 50,000 Dividend Equivalents $ 20,964 Death Benefits $ 8,236 Welfare Benefits $ 40,180 Vehicle Allowance $ 18,000 Total All Other Compensation $ 137,381 $ 330 $ - $ 36,951 $ 13,899 $ 101,180 $ 50,000 $ 949 $ 7,615 $ 36,412 $ 13,493 $ 108,469 $ 50,000 $ - $ - $ 22,355 $ 18,000 $ 90,355 $ 50,000 $ 272 $ - $ 36,382 $ 18,000 $ 104,654 GRANTS OF PLAN-BASED AWARDS - FISCAL YEAR 2022 In addition to base salary and Performance Incentive Compensation for fiscal year 2022, NEOs were granted RSU, MSU and PSU awards under the Company’s 2016 Stock Incentive Plan as shown in the table below. Descriptions of the RSU, MSU and PSU awards are provided above in the CD&A section under the heading, Equity Compensation. The table also contains information with respect to Performance Incentive Program opportunity awards for fiscal year 2022 as described above in the CD&A section under the heading, Performance Incentive Program. The table provides threshold, target and maximum payout information relating to the Company’s fiscal year 2022 Performance Incentive Program. Estimated Future Payouts Under Non-Equity Incentive Plan Awards1 Estimated Future Payouts Under Equity Incentive Plan Awards2 Grant Date Threshold ($) Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#) Name Garry O. Ridge Steven A. Brass Jay W. Rembolt $ 1 $ 692,121 $ 1,384,242 10/12/2021 10/12/2021 (MSU) 10/12/2021 (RSU) 10/12/2021 (PSU) 03/17/2022 (RSU)5 $ 1 $ 366,067 $ 732,133 10/12/2021 10/12/2021 (MSU) 10/12/2021 (RSU) 10/12/2021 (PSU) $ 1 $ 167,593 $ 335,186 10/12/2021 10/12/2021 (MSU) 10/12/2021 (RSU) 10/12/2021 (PSU) Phenix Q. Kiamilev Patricia Q. Olsem $ 1 $ 122,232 $ 244,463 10/12/2021 10/12/2021 (MSU) 10/12/2021 (RSU) 10/12/2021 (PSU) $ 1 $ 181,727 $ 363,454 10/12/2021 10/12/2021 (MSU) 10/12/2021 (RSU) 10/12/2021 (PSU) All Other Stock Awards: Number of Shares of Stock or Units3 (#) Grant Date Fair Value of Stock and Options Awards4 ($) 1,738 3,476 6,952 146 2,934 869 1,738 3,476 77 1,551 380 760 1,520 35 710 277 554 1,108 25 518 380 760 1,520 35 717 3,476 5,347 1,738 760 554 760 $ 870,008 $ 780,049 - $ 971,176 $ 435,004 $ 390,025 - $ 190,220 $ 170,552 - $ 138,661 $ 124,323 - $ 190,220 $ 170,552 - 1 The Estimated Future Payouts Under Non-Equity Incentive Plan Awards represent Threshold, Target and Maximum payouts under the Company Performance Incentive Compensation Plan for Incentive Compensation payable for fiscal year 2022 performance. The Target amount represents 50% of the Maximum payout for each NEO. The Maximum amount represents the Incentive Compensation opportunity for each NEO that assumes full achievement of the performance measures for Level A of the Performance Incentive Program (as more 34 fully discussed above in the CD&A section under the heading, Performance Incentive Program) and attainment by the Company of a level of Global Adjusted EBITDA sufficient to maximize such payouts under Level C of the Performance Incentive Program. The Estimated Future Payouts Under Equity Incentive Plan Awards represent the Threshold, Target and Maximum number of shares to be issued upon performance vesting of MSU and PSU awards as described in the CD&A section under the heading, Equity Compensation. There is no applicable Target number of shares for PSU awards to be earned by the NEOs. All Other Stock Awards represent RSUs described in the CD&A section under the heading, Equity Compensation. Information relating to the amounts disclosed as the Grant Date Fair Value of Stock Awards is included in footnote 1 to the Summary Compensation Table above. Shares vest on June 30, 2023. 2 3 4 5 OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR END The following table provides detailed information concerning the RSU and MSU awards that were not vested as of the end of the last fiscal year for each of the NEOs: Stock Awards Name Garry O. Ridge Steven A. Brass Jay W. Rembolt Phenix Q. Kiamilev Patricia Q. Olsem Number of Shares or Units of Stock That Have Not Vested (#)1 12,876 3,631 1,519 554 1,566 Market Value of Shares or Units of Stock That Have Not Vested ($)2 $ 2,435,624 $ 686,840 $ 287,334 $ 104,795 $ 296,225 Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)3 14,944 7,472 3,018 1,108 3,268 Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)2 $ 2,826,807 $ 1,413,404 $ 570,885 $ 209,589 $ 618,175 1 2 3 Represents RSU awards to the NEOs that were not vested as of the fiscal year end. The Market Value of the shares or units that were not vested as of the fiscal year end is based on $189.16 per share or unit, which was the closing price of the Company’s common stock on August 31, 2022. Represents the maximum number of shares to be issued with respect to MSU awards granted to the NEOs that were not vested as of the fiscal year end. The maximum number of shares to be issued with respect to MSU awards equals the number of shares to be issued with respect to the MSU awards upon achievement of the highest level of achievement for such MSU awards as described above in the CD&A section under the heading, Equity Compensation. MSU awards from October 2019 that would have vested in October 2022 had the performance targets been attained and certified are excluded. STOCK VESTED – FISCAL YEAR 2022 The following table sets forth the number of shares of the Company’s common stock acquired upon the vesting of RSU awards in the Company’s last fiscal year and the aggregate dollar value realized with respect to such vested RSU awards. No shares of restricted stock were issued with respect to MSU and PSU awards that would have vested on August 31, 2022 had performance targets been attained. Executive Officer Garry O. Ridge Steven A. Brass Jay W. Rembolt Phenix Q. Kiamilev Patricia Q. Olsem Stock Awards Number of Shares Acquired on Vesting1 (#) 12,083 2,685 2,488 - 1,141 Value Realized on Vesting2 ($) $ 2,634,457 $ 585,411 $ 542,459 $ - $ 248,772 1 The Number of Shares Acquired on Vesting includes shares of the Company’s common stock issued on October 22, 2021 upon vesting of RSU awards. 35 2 The Value Realized on Vesting for the RSUs on October 22, 2021 is calculated based on the number of vested RSU awards multiplied by the closing price of $218.03 for the Company’s common stock on such date. NONQUALIFIED DEFERRED COMPENSATION – FISCAL YEAR 2022 The following table provides information concerning compensation received by the NEOs that is subject to deferral under applicable RSU and DPU award agreements: Named Executive Officer Garry O. Ridge Jay W. Rembolt Steven A. Brass Phenix Q. Kiamilev Patricia Q. Olsem Aggregate Earnings in Last FY1 ($) $ (345,770) $ (15,646) $ (5,451) $ - $ (4,492) Aggregate Balance at Last FYE2 ($) $ 1,295,935 $ 58,640 $ 20,429 $ - $ 16,835 1 2 The Aggregate Earnings in Last FY represents the decrease in value from August 31, 2021 to August 31, 2022 of the shares underlying deferred settlement RSUs and vested DPUs held by each NEO that will be settled in shares of the Company’s common stock following termination of employment as disclosed in footnotes to the table under the heading, Security Ownership of Directors and Executive Officers. The number of such deferred settlement RSUs and vested DPUs for each NEO was multiplied by the difference in the closing price of the Company’s common stock on August 31, 2022 of $189.16 and on August 31, 2021 of $239.63, a decrease in value of $50.47 per share. Amounts shown are not included as compensation in the Summary Compensation Table for fiscal year 2022. The Aggregate Balance at Last FYE represents the value as of August 31, 2022 of the deferred settlement RSUs and any vested DPUs held by each NEO as noted in the footnote above. The value for each deferred settlement RSU and each vested DPU is based on the closing price of the Company’s common stock on August 31, 2022, which was $189.16 per share. The underlying deferred settlement RSUs and vested DPUs were included in prior disclosures for the NEOs to the extent that the NEOs were included in Summary Compensation Table disclosures for the years in which such awards were first granted to the NEOs. SUPPLEMENTAL DEATH BENEFIT PLANS AND SUPPLEMENTAL INSURANCE BENEFITS The Company maintains Supplemental Death Benefit Plans for Messrs. Ridge and Rembolt, which will terminate upon their separation from the Company as an employee. Under the death benefit plan agreements, the NEO’s designated beneficiary or estate, as applicable, will receive a death benefit equal to the NEO’s then current base salary in the event of his death prior to retirement from the Company. Each of the NEOs is also eligible to receive life insurance benefits offered to all employees of the Company. The death benefits under the Supplemental Death Benefit Plans are not formally funded but the Company has purchased key man life insurance policies owned by the Company to cover its benefit obligations. Non-employee directors do not have death benefit plan agreements. Based upon their fiscal year 2022 base salaries, the supplemental death benefit to be provided to Messrs. Ridge and Rembolt as of the end of fiscal year 2022 would have been as set forth in the following table: Named Executive Officer Garry O. Ridge Jay W. Rembolt CHANGE OF CONTROL SEVERANCE AGREEMENTS Death Benefit $ 692,121 $ 335,186 The Company has entered into Change of Control Severance Agreements (“CoC Agreements”) with each of the NEOs. The CoC Agreements provide that each executive officer will receive certain severance benefits if his or her employment is terminated without “Cause” or if he or she resigns for “Good Reason,” as those terms are defined in the CoC Agreements, within two years after a “Change of Control” as defined in the CoC Agreements and summarized below. If the executive officer’s employment is terminated during the aforementioned two-year period by the Company without “Cause” or by the executive officer for “Good Reason”, the executive officer will be entitled to a lump sum payment (subject to limits provided by reference to Section 280G of the Internal Revenue Code which limits the deductibility of certain payments to executives upon a change in control) of twice the executive officer’s salary, calculated based on the greater of the executive officer’s then current annual salary or a five-year 36 average, plus twice the executive officer’s earned Incentive Compensation, calculated based on the greater of the most recent annual earned Incentive Compensation or a five-year average. Further, any of the executive officer’s outstanding equity incentive awards that are not then fully vested (with the exception of PSU awards), will be accelerated and vested in full following such termination of employment within such two-year period and the executive officer will be entitled to continuation of health and welfare benefits under the Company’s then existing benefit plans or equivalent benefits for a period of up to two years from the date of termination of employment. No employment rights or benefits other than the change of control severance benefits described in this paragraph are provided by the CoC Agreements. For purposes of the CoC Agreements and subject to the express provisions and limitations contained therein, a “Change of Control” means a transaction or series of transactions by which a person or persons acting together acquire more than 30% of the Company’s outstanding shares; a change in a majority of the incumbent members of the Company’s Board as specified in the CoC Agreements, a reorganization, merger or consolidation as specified in the CoC Agreements or a sale of substantially all of the assets or complete liquidation of the Company. As specified more particularly in the CoC Agreements, a “Change of Control” does not include a reorganization, merger or consolidation or a sale or liquidation where a majority of the incumbent members of the Company’s Board continue in office and more than 60% of the successor company’s shares are owned by the Company’s pre-transaction stockholders. The CoC Agreements have a term of two years, subject to automatic renewal for successive two-year periods unless notice of non-renewal is provided by the Company’s Board not less than six months prior to the end of the current term. The term of the CoC Agreements will be automatically extended for a term of two years following any “Change of Control.” The following table sets forth the estimated amounts payable to each of the NEOs pursuant to their respective CoC Agreements on the assumption that the employment of each NEO was terminated without “Cause” or otherwise for “Good Reason” effective as of the end of fiscal year 2022 following a “Change of Control” as provided for in the CoC Agreements. The table also includes the value, as of the end of the fiscal year, of all unvested RSU and MSU awards as of the end of fiscal year 2022. Named Executive Officer Garry O. Ridge4 Jay W. Rembolt Steven A. Brass Phenix Q. Kiamilev Patricia Q. Olsem Severance Pay1 Welfare Benefits2 Accelerated Vesting of RSUs and MSUs3 Total Change of Control Severance Benefits $ 4,085,202 $ 73,491 $ 3,849,028 $ 8,007,721 $ 1,324,394 $ 69,091 $ 572,776 $ 1,966,261 $ 2,343,716 $ 69,091 $ 1,393,542 $ 3,806,349 $ 671,673 $ 41,555 $ 209,590 $ 922,818 $ 1,248,970 $ 69,091 $ 605,312 $ 1,923,373 1 Severance Pay includes two times the Salary reported in the Summary Compensation Table for fiscal year 2022 plus two times Non-Equity Incentive Plan Compensation received for fiscal year 2021. 2 Welfare Benefits includes an estimate of the Company’s cost to provide two years of continuation coverage under the Company’s welfare benefit plans, which does not include life insurance or long-term disability insurance. The estimate is based on the Company’s cost of such coverage for fiscal year 2022. 3 Acceleration of vesting of RSU and MSU awards is governed by applicable provisions of the CoC Agreements and the RSU and MSU Award Agreements. The value included for accelerated vesting of RSU and MSU awards is based on $189.16, the closing price of the Company’s common stock on August 31, 2022. Except for MSUs awards from October 7, 2019 that did not vest because attainment was not achieved and therefore lapsed, MSUs awarded are valued for this purpose based upon the Target Number of shares of the Company’s common stock to be issued with respect to the MSUs as described above in the CD&A section under the heading, Equity Compensation. 4 Mr. Ridge’s CoC Agreement terminated on August 31, 2022 pursuant to the terms of the Transition Agreement (defined below). SUMMARY OF TRANSITION AND RELEASE AGREEMENT WITH GARRY O. RIDGE In connection with Mr. Ridge’s retirement as CEO and Chairman of the Board, the Company and Mr. Ridge entered into a Transition and Release Agreement on March 11, 2022 (“Transition Agreement”). The Transition Agreement provides that Mr. Ridge retires as CEO, effective August 31, 2022, that he remains an employee of the Company until January 2, 2023, that he be compensated $34,606 per month effective September 1, 2022, and that he serves as Chairman of the Board until his term expires on December 13, 2022. Mr. Ridge’s outstanding equity awards continue to be treated in accordance with the terms in their respective award agreements, and he will not be eligible for any grants of equity awards in fiscal year 2023. As of January 3, 2023, Mr. Ridge will serve as a consultant to the Company at a monthly rate of $34,606 and will continue to provide leadership support and other advisory services to Mr. Brass, who was appointed CEO effective September 1, 2022, and the Board until June 30, 2023. 37 As consideration for Mr. Ridge’s execution of waivers and releases of claims and covenants in favor of the Company, and in order to help effect an orderly CEO transition to ensure continued alignment and focus on long-term stockholder interests, the Company granted RSUs approximately equal to $1,000,000 in March 2022 pursuant to the terms of the Transition Agreement and agreed to provide 36 months of COBRA coverage. The grant of 5,347 RSUs in March 2022 is reflected in the applicable tables disclosing Mr. Ridge’s stock awards and beneficial ownership in this Proxy Statement. The Transition Agreement and related agreements are filed as exhibits to the Company’s Current Report on Form 8-K filed with the SEC on March 16, 2022. CEO PAY RATIO As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and the SEC, the pay ratio of the total annual compensation of our CEO, Mr. Ridge, to that of the Company’s “median employee” for fiscal year 2022 was approximately 42:1. To determine the CEO pay ratio, the total annual compensation for the median employee for fiscal year 2022 was calculated to be $87,169, which included the same elements of compensation required to be in the Summary Compensation Table, and was calculated in the same manner as the CEO’s total annual compensation, which was $3,632,412 for fiscal year 2022. SEC rules allow the Company to identify its median employee once every three years unless there has been a change in its employee population or employee compensation arrangements that it reasonably believes would result in a significant change in its pay ratio disclosure. The Company used the same median employee for fiscal year 2022 as fiscal year 2021, after considering the changes to employee population and compensation programs during 2022, as well as the 2022 compensation of the median employee. We identified the Company’s median employee from all 557 employees of the Company (excluding the CEO) as of August 31, 2021. We included employees, including full-time, part-time and temporary employees, located in 17 countries at such time. To identify the Company’s median employee in fiscal year 2021, we calculated total compensation for fiscal year 2021 for each employee other than the CEO by including salary or regular hourly wages paid in the fiscal year, Incentive Compensation paid during the fiscal year under the Company’s Performance Incentive Program, and the grant date value of RSUs and MSUs granted to employees in the fiscal year. Compensation paid to employees who were hired after the beginning of fiscal year 2021 or who terminated prior to the end of the fiscal year 2021 was not annualized. For employees who received compensation denominated in a foreign currency, such amounts were converted to U.S. dollars using average annual exchange rates as of August 31, 2021. As of August 31, 2022, the Company employed 603 employees located in 15 countries. The Company’s median employee is located in the U.S. EQUITY COMPENSATION PLAN INFORMATION The following table sets forth certain equity compensation plan information as of August 31, 2022: Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Plan category Equity compensation plans approved by security holders (1) Equity compensation plans not approved by security holders Total (a) 136,9372 N/A 136,937 (b) N/A N/A N/A (c) 384,859 N/A 384,859 (1) The 2016 Stock Incentive Plan, which authorizes the grant of 1,000,000 shares of common stock, was approved by our stockholders at our 2016 annual meeting. (2) Represents shares of common stock subject to unvested 78,604 RSUs, vested 3,306 DPUs, and 37,201 MSU and 17,826 PSU awards assuming the issuance of shares based on target performance. 38 AUDIT-RELATED MATTERS Fees Paid to Independent Registered Accounting Firm The following table presents fees for professional services rendered by PricewaterhouseCoopers LLC (“PwC”) for fiscal years 2022 and 2021: Audit fees1 Audit-related fees2 Tax fees3 All other fees4 Total fees 2022 2021 $ 1,642,950 $ $ $ $ — 189,025 $ 900 $ 1,832,875 $ 1,398,900 — 217,925 2,700 1,619,525 1 2 3 4 Professional services rendered for the audit of the Company’s consolidated annual financial statements, the review of the interim consolidated financial statements included in quarterly reports, and services normally provided by PwC in connection with statutory and regulatory filings or engagements. Assurance and related services reasonably related to the audit and/or review of the Company’s consolidated financial statements that are not reported under “Audit Fees.”. Tax return preparation, tax compliance, tax advice and/or tax planning services Access provided by PwC to its online research reference and disclosure checklist materials The possible effect on the independence of the auditor is considered by the Audit Committee. There is no direct or indirect understanding or agreement that places a limit on current or future years’ audit fees or permissible non-audit products and services. Pre-approval Policies and Procedures The Audit Committee’s policy is to pre-approve all audit and permissible non-audit products and services provided by the auditor. These products and services may include audit services, audit-related services, tax services, software and other products or services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The auditor and management are required to periodically report to the Audit Committee regarding the extent of services provided by the auditor in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. All services described above received pre-approval pursuant to policies and procedures that were established to comply with SEC rules that require pre-approval of audit and non-audit services. Related Party Transactions Review and Oversight The Audit Committee has responsibility for review and oversight of related party transactions for potential conflicts of interest. Related party transactions include any independent business dealings between the Company and related parties who consist of, or are related to, the Company’s executive officers, directors, director nominees and holders of more than 5% of the Company’s shares. Such transactions include business dealings with parties in which any related party has a material direct or indirect interest. The Audit Committee has adopted a written policy to provide for its review and oversight of related party transactions. Executive officers and directors are required to notify the Corporate Secretary of the Company of any proposed or existing related party transactions in which they have an interest. The Corporate Secretary and the Audit Committee also rely upon the Company’s disclosure controls and procedures adopted pursuant to Exchange Act rules for the purpose of assuring that matters requiring disclosure, including transactions that may involve a related party or may otherwise involve the potential for conflicts of interests, are brought to the attention of management and the Audit Committee on a timely basis. Certain related party transactions do not require Audit Committee review and approval. Such transactions are considered pre-approved. Pre-approved transactions include: • • compensation arrangements approved by the Compensation Committee or the Board and expense reimbursements consistent with the Company’s expense reimbursement policy; transactions in which the related party’s interest is derived solely from the fact that he or she serves as a director of another corporation that is a party to the transaction; 39 • • transactions in which the related party’s interest is derived solely from his or her ownership (combined with the ownership interests of all other related parties) of not more than a 5% beneficial interest (but excluding any interest as a general partner of a partnership) in an entity that is a party to the transaction; and transactions available to all employees of the Company generally. If a related party transaction is proposed or if an existing transaction is identified, the Audit Committee has authority to disapprove, approve or ratify the transaction and to impose such restrictions or other limitations on the transaction as the Committee may consider necessary to best assure that the interests of the Company are protected and that the related party involved is not in a position to receive an improper benefit. In making such determination, the Audit Committee considers such factors as it deems appropriate, including without limitation (i) the benefits to the Company of the transaction; (ii) the commercial reasonableness of the terms of the transaction; (iii) the dollar value of the transaction and its materiality to the Company and to the related party; (iv) the nature and extent of the related party’s interest in the transaction; (v) if applicable, the impact of the transaction on a non-employee director’s independence; and (vi) the actual or apparent conflict of interest of the related party participating in the transaction. During the fiscal year ended August 31, 2021, there were no transactions required to be reported pursuant to the requirements of Item 404(a) of Regulation S-K under the Exchange Act. AUDIT COMMITTEE REPORT In accordance with its charter, the Audit Committee provides assistance to the Company’s Board of Directors (“Board”) in fulfilling its oversight responsibilities relating to the quality and integrity of the accounting, auditing, and reporting practices of the Company, including assessment of the effectiveness of internal controls over financial reporting. Each member of the Audit Committee meets the independence criteria prescribed by applicable regulations and rules of the SEC for audit committee membership and is an “independent director” within the meaning of applicable NASDAQ listing standards. Management is responsible for preparing the Company’s financial statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”) and for establishing and maintaining internal control over financial reporting. The Company’s independent registered public accounting firm (“auditor”) is responsible for performing an integrated audit of the Company’s financial statements and internal control over financial reporting and expressing opinions as to whether the financial statements have been prepared in accordance with GAAP and as to management’s assessment of the effectiveness of internal control over financial reporting. The Audit Committee reviewed the Company’s audited financial statements for the fiscal year ended August 31, 2022. The Audit Committee discussed and reviewed with management the audited financial statements and management’s assessment of the effectiveness of its internal controls over financial reporting. The Audit Committee discussed and reviewed with the Company’s auditor the audited financial statements and the auditor’s attestation report regarding effectiveness of management’s internal controls over financial reporting. The Audit Committee also discussed with the auditor those matters required to be discussed by PCAOB Auditing Standard No. 1301, Communications with Audit Committees, which provides that certain matters related to the conduct of the financial statement audit are to be communicated to the Audit Committee. In fulfilling its oversight responsibilities, the Audit Committee met separately with management and separately with the Company’s auditor to discuss results of audit examinations and evaluations of internal controls. The Audit Committee is responsible for the appointment, retention, compensation, and oversight of the Company’s auditor. In this regard, the Audit Committee discussed with the auditor its independence from management and the Company, including matters in written documents and a letter received from the auditor as required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence. In evaluating the auditor’s independence, the Audit Committee also considered whether the auditor’s provision of any non-audit services impaired or compromised its independence. The Audit Committee considered several factors in selecting PricewaterhouseCoopers LLP (“PwC”) as the Company’s auditor, including its independence and internal quality controls, the overall depth of talent, and its familiarity with the Company’s businesses and internal controls over financial reporting. Further, in conjunction with the mandated rotation of an auditor’s lead, concurring and/or relationship partner (each an “audit partner”), the Audit Committee and its chair oversee and are directly involved in the selection process for any change in audit partners. 40 Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its annual report on Form 10-K for its fiscal year ended August 31, 2022, and that PwC serve as the Company’s auditor for the fiscal year ending August 31, 2023. Audit Committee Daniel T. Carter, Chair Lara L. Lee Edward O. Magee, Jr. Trevor I. Mihalik Graciela I. Monteagudo David B. Pendarvis STOCKHOLDER PROPOSALS FOR OUR 2023 ANNUAL MEETING For a stockholder proposal otherwise satisfying the eligibility requirements of SEC Rule 14a-8 to be considered for inclusion in our Proxy Statement for our 2023 annual meeting, it must be received by us at our principal office, 9715 Businesspark Avenue, San Diego, CA 92131 on or before July 6, 2023. For an eligible stockholder or group of stockholders to nominate a director nominee for election at our 2023 annual meeting pursuant to the proxy access provision of our Bylaws, such eligible stockholder or group of stockholders must comply with the then current advance notice requirements in our Bylaws and deliver the proposal to our Corporate Secretary between June 6, 2023 and July 6, 2023 in order for such proposal to be considered timely. In addition, our Bylaws require the eligible stockholder or group of stockholders to update and supplement such information as of specified dates. In addition, if a stockholder desires to bring business (including director nominations) before our 2023 annual meeting that is not the subject of a proposal timely submitted for inclusion in our 2023 Proxy Statement, written notice of such business, as currently prescribed in our Bylaws, must be received by our Corporate Secretary between June 6, 2023 and 5:00 p.m., Pacific Time, on July 6, 2023. For additional requirements, a stockholder may refer to our current Bylaws, Article II, Section 2.15, “Nomination of Directors,” and Article II, Section 2.17, “Proxy Access,” a copy of which may be obtained from our Corporate Secretary upon request and without charge. See “Stockholder Communications with the Board” for contact information. If we do not receive timely notice pursuant to our Bylaws, the proposal will be excluded from consideration at the annual meeting. In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees for the 2023 annual meeting other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than October 14, 2023. FORWARD-LOOKING STATEMENTS This Proxy Statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. When used in this Proxy Statement, the words “estimated,” “anticipated,” “expect,” “believe,” “intend” and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of strategy, plans or intentions of management. Forward-looking statements are subject to risks, uncertainties, and assumptions about the Company, and future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward- looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Proxy Statement. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this Proxy Statement or to reflect the occurrence of unanticipated events. 41 INCORPORATION BY REFERENCE Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act or the Exchange Act, which might incorporate future filings made by us under those statutes, the preceding Compensation Committee Report and Audit Committee Report will not be incorporated by reference into any of those prior filings, nor will any such reports be incorporated by reference into any future filings made by the Company under those statutes. In addition, information on our website, other than our Proxy Statement, Notice of Annual Meeting and form of proxy, is not part of the proxy soliciting material and is not incorporated herein by reference. By Order of the Board of Directors, Phenix Q. Kiamilev Vice President, General Counsel and Corporate Secretary Dated: November 2, 2022 42 [ THIS PAGE INTENTIONALLY LEFT BLANK ] ANNUAL REPORT ON FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31, 2022 or  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 000-06936 Commission Company Name: WD 40 CO WD-40 COMPANY (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 9715 Businesspark Avenue, San Diego, California (Address of principal executive offices) 95-1797918 (I.R.S. Employer Identification No.) 92131 (Zip code) Registrant’s telephone number, including area code: (619) 275-1400 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common stock, par value $0.001 per share Trading Symbol WDFC Name of exchange on which registered NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Act: Title of each class None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  No  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No  Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer  Accelerated filer  Non-accelerated filer  Smaller reporting company  Emerging growth company  If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No  The aggregate market value (closing price) of the voting stock held by non-affiliates of the registrant as of February 28, 2022 was approximately $2,857,971,684. As of October 17, 2022, there were 13,579,926 shares of the registrant’s common stock outstanding. The Proxy Statement for the annual meeting of stockholders on December 13, 2022 is incorporated by reference into Part III, Items 10 through 14 of this Annual Report on Form 10-K. Documents Incorporated by Reference:  WD-40 COMPANY ANNUAL REPORT ON FORM 10-K For the Fiscal Year Ended August 31, 2022 TABLE OF CONTENTS PART I Page Business Item 1. Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Item 3. Item 4. Properties Legal Proceedings Mine Safety Disclosures PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 6. Item 7. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Item 8. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Item 12. Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Principal Accountant Fees and Services Item 15. Item 16. Exhibits, Financial Statement Schedules Form 10-K Summary PART IV 1 6 16 16 16 16 17 17 17 33 33 34 34 34 34 35 35 35 36 36 37 39 Forward-Looking Statements PART I This Annual Report on Form 10-K contains forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements which reflect our current views with respect to future events and financial performance. These forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: growth expectations for maintenance products; expected levels of promotional and advertising spending; anticipated input costs for manufacturing and the costs associated with distribution of our products; plans for and success of product innovation, the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; expected tax rates and the impact of tax legislation and regulatory action; the length and severity of the current COVID-19 pandemic and its impact on the global economy and our financial results; changes in the political conditions or relations between the United States and other nations, the impacts from inflationary trends and supply chain constraints; and forecasted foreign currency exchange rates and commodity prices. These forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “could,” “may,” “aim,” “anticipate,” “target,” “estimate” and similar expressions. We undertake no obligation to revise or update any forward-looking statements. Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Item 1A of this report. As used in this report, the terms “we,” “our,” “us” and “the Company” refer to WD-40 Company and its wholly-owned subsidiaries, unless the context suggests otherwise. Amounts and percentages in tables and discussions may not total due to rounding. Item 1. Business Overview WD-40 Company is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world. The Company was founded in 1953 and is headquartered in San Diego, California. For more than four decades, we sold only one product, WD-40® Multi-Use Product, a maintenance product which acts as a lubricant, rust preventative, penetrant and moisture displacer. Over the last several decades, we have evolved and expanded our product offerings through both research and development activities and through the acquisition of several brands worldwide. As a result, we have built a family of brands and product lines that deliver high quality performance at a good value to our end users. 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. 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 strategic initiatives are the areas where we will continue to focus our time, talent and resources in future periods. Our strategic initiatives include: (i) building a business for the future; (ii) attracting, developing and engaging outstanding tribe members; (iii) striving for operational excellence; (iv) growing WD-40 Multi-Use Product; (v) growing WD-40 Specialist product line; and (vi) expanding and supporting portfolio opportunities that help us grow. Our top priority is to build an enduring business that we will be proud to pass onto the next generation by using our purpose and values as a decision-making filter. Our desired outcome for this top strategic initiative is to further align and integrate our business decisions with Environmental, Social, and Governance (“ESG”) factors and considerations. We understand that we cannot achieve this without attracting, developing and engaging outstanding people, whom we refer to collectively as a tribe, that strive for operational excellence daily. The principal driver of our growth continues to be taking the blue and yellow can with the little red top, to new users in global markets. We continue to be focused and committed to innovation and renovation of our products. 1 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 in order to expand our product portfolio to help us grow. We are also focused on expanding our current brands in existing markets with new product development. Our product development teams support 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. Key innovations for our products include, but are not limited to, WD-40 EZ-Reach® Flexible Straw, WD-40 Smart Straw®, WD-40 Trigger Pro®, WD-40 Specialist®, WD-40 BIKE®, 3-IN-ONE RVcare® and 3-IN-ONE® Professional Garage Door Lube. Our homecare and cleaning products, particularly those in the U.S., 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 strategic initiatives. Although we have evaluated strategic alternatives for certain of our homecare and cleaning products, particularly those in the U.S., we have continued to sell products within these brands but with a reduced level of marketing investment. Human Capital Resources Our success is the result of the engagement and commitment of our people, whom we refer to as tribe members. We believe that a tribe is a group of people who come together to feed and defend one another in order to fulfill a common purpose. Our purpose can only be achieved with the efforts of our 583 tribe members who create positive lasting memories for our stakeholders, including our end users as they work to ensure that our products solve problems in factories, workshops, and homes around the world. Our workforce is distributed globally in 15 countries, with approximately 34% in the Americas, 42% in EMEA, 15% in Asia-Pacific, and 9% corporate employees. Women make up approximately 46% of our global tribe. The average tenure of our global tribe is 8 years. A foundational strategic initiative is to attract, develop and engage outstanding tribe members. We believe that our ability to attract, develop, engage, and retain outstanding tribe members is the result of our inclusive, purpose-driven, learning focused and values guided culture. This strategic initiative guides our commitment to develop tribe members throughout the organization. One of the primary responsibilities of our leaders, whom we refer to as coaches, is to tailor individual development plans to support the needs of our tribe members to achieve their performance goals. We also offer various internal training programs to our tribe members and encourage attendance at external training programs that allow tribe members to grow from both a technical and leadership standpoint. As a result of the culture we have nurtured and evolved, we have increased employee engagement over time while expanding the size of our tribe to support our growing business. Our most recent biennial global employee engagement survey, which was conducted in January 2022 by an independent third-party, resulted in a very high employee engagement level of 93%. Consistently living our company values grants each of us the freedom and agility to make autonomous decisions yet remain aligned as we act in the best interest of all our stakeholders across the globe. Our approach to diversity and inclusion focuses on what unites us: a common purpose as a tribe. Our diverse global tribe, hired primarily within local markets, contains an array of talent and experiences, work collaboratively to solve problems and bring meaning to our work life. Our tribe is comprised of talented and dedicated members, many of whom work together with their international peers in the areas of: marketing, sales, customer service, finance and accounting, legal, information technology, human resources, supply chain and logistics, innovation, R&D, quality, and other technical fields. We believe our culture is a competitive advantage, and we prioritize it as such. Understanding the views, perspectives and experiences of our end-users and tribe members is foundational in maintaining and growing the WD-40 Company brand and business. Our language, norms, artifacts, and traditions result in psychological safety, learning, and goal achievement. This includes a total rewards strategy that ensures each tribe member can sustain their well-being today and into the future. The recent and ongoing global pandemic has reinforced the importance of our priority to maintain the safety, health, and well- being of every tribe member. During various stages of the COVID-19 pandemic, much of our workforce worked remotely, in accordance with public health and safety guidance. The pandemic inspired us to launch what we call “Work from Where”, a philosophy to support the work-life integration of our global tribe members. This “Work from Where” philosophy enables our coaches and tribe members 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 attempts to align the interests of every tribe member with the creation of company value over time. 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 calendar year 2023. We will continue to conduct equitable pay studies going forward and will include results from those studies in our future ESG reports. We invite you to review our ESG 2 Report (located on our Internet site at www.wd40company.com) for more information about corporate responsibility, our tribe, programs, and initiatives. Nothing on our website 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. 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. 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 and in liquid-bulk form through mass retail stores, hardware stores, warehouse club stores, automotive parts outlets, online retailers and industrial distributors and suppliers. 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. WD-40 Specialist product line – WD-40 Specialist consists of a line of professional-grade specialty maintenance products that include penetrants, degreasers, corrosion inhibitors, greases, lubricants and rust removers that are aimed at professionals and consumer enthusiasts. 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. 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. 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. 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. The long legacy, brand awareness and high quality of the 3-IN-ONE brand and its established distribution network have enabled these products to gain international acceptance. 3-IN-ONE products are sold primarily in the U.S., Europe, Canada, Latin America and Australia. 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 United Kingdom. This brand was acquired by our U.K. subsidiary in September 2014 and it has helped build upon our strategy to develop new product categories for WD-40 Specialist and WD-40 BIKE. 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. It includes a variety of formulas, including the Bleach and Blue plus Bleach that has a unique EPA-approved “kills bacteria” claim. 2000 Flushes is sold primarily in the U.S. and Canada through grocery and mass retail channels as well as through online retailers. 3 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 are non-toxic and biodegradable. 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. Carpet 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. 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. 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. 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. 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. However, it is common for our sales to fluctuate from period to period or year to year due to various factors including, but not limited to, new or lost distribution, the number of product offerings carried by a customer and the level of promotional activities and programs being run at customer locations. New or lost distribution occurs when we gain or lose customers, when we gain or lose store count for a customer or when our products are added to new locations within a store or removed from existing locations. From time to time, as part of new product offering launches, we may gain access to entirely new distribution channels. The number of product offerings refers to the number of brands and/or the number of products within each of those brands that our customers offer for sale to end user customers. The level of promotional activities and programs relates to the number of events or volumes of purchases by customers in support of off-shelf or promotional display activities. Changes in any one of these three factors or a combination of them can cause our sales levels to increase or decrease from period to period. 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. Manufacturing We outsource our finished goods manufacturing directly or through our marketing distributors to various third-party manufacturers. The Company or its marketing distributors use contract manufacturers in the U.S., Canada, Mexico, Brazil, Argentina, Colombia, the U.K., Italy, Poland, Australia, China, South Korea and India. 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. Supply needs are communicated by us to our contract manufacturers, and we are committed to purchase 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. 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. Sources and Availability of Components and Raw Materials We rely on a limited number of third-party contract manufacturers and component suppliers, including single or sole-sourced suppliers, for certain of our raw materials, packaging, product components and other necessary supplies. Where possible and where it makes business sense, we work with secondary or multiple suppliers to qualify additional supply and, historically, we have been able to obtain adequate capacity and raw materials. However, during the COVID-19 pandemic, we have experienced certain constraints, particularly in our Americas supply chain. These challenges include general aerosol-related production capacity constraints primarily due to increased demand at third-party manufacturers along with shortages of certain other raw 4 materials and freight services. The primary components and raw materials for most of our products include specialty chemicals and aerosol cans, which are manufactured from commodities that are subject to market price fluctuations. 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 couple of years. Actions that we are taking to increase prices with our customers and cost savings initiatives that are currently underway will mitigate some of these inflationary pressures. Our business results depend on the effective management and remedy of any supply disruptions. 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 market constraints to persist in fiscal year 2023, as described above. 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. 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 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. 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. 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. 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. 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. The WD-40 brand, 3-IN-ONE, Lava, Solvol, X-14, 2000 Flushes, Carpet Fresh and no vac, Spot Shot, GT85, and 1001 trademarks are registered or have pending registrations in various countries throughout the world. 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. Access to SEC Filings Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available through the Investors section of our website at www.wd40company.com. These reports can be accessed free of charge from our website as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (“SEC”). Information contained on our website is not included as a part of, or incorporated by reference into, this report. The SEC also maintains an internet site (www.sec.gov) that contains our reports. 5 Item 1A. Risk Factors The following risks and uncertainties, as well as other factors described elsewhere in this report or in other SEC filings by the Company, could adversely affect the Company’s business, financial condition and results of operations. Global economic conditions may negatively impact our financial condition and results of operations. Adverse developments in the global economy or a reduction in industrial outputs, consumer spending or confidence could significantly decrease purchases of our products by our customers and end users. Consumer purchases of discretionary items, which could include our maintenance products and homecare and cleaning products, may decline during periods where disposable income is reduced or there is economic uncertainty, and this may negatively impact our financial condition and results of operations. During unfavorable or uncertain economic times, end users may also increase purchases of lower-priced or non- branded products and our competitors may increase their level of promotional activities to maintain sales volumes, both of which may negatively impact our financial condition and results of operations. 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. Public health crises, including epidemics or pandemics, may affect the principal markets, trade channels, and industrial segments in which we conduct our business. For example, the impact of the ongoing COVID-19 pandemic has caused a significant disruption to global financial markets and supply chains beginning in early calendar year 2020. Certain ongoing direct and indirect impacts of the pandemic have continued to affect recent periods. Supply chains at many companies globally continue to be strained due to increased competition for production line capacity, freight and logistics resources, as well as labor shortages, and shortages of certain materials. These constraints have sometimes impacted the ability of our third-party manufacturers to procure certain raw materials needed to manufacture our products and this has periodically resulted in us not being able to meet the demand for our products from customers and end-users in certain markets. 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. The additional costs resulting from this inflationary environment and the constraints in our supply chain and distribution networks may continue to unfavorably impact our gross margin and operating results in future periods for as long as such constraints and challenges exist. The severity and duration of the COVID-19 pandemic, as well as the current inflationary environment, remain uncertain and it is difficult 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 the pandemic or inflationary conditions will impact demand from our customers and end-users. If demand from our customers and end-users decreases in future periods, this could adversely impact 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. Adverse economic and market conditions could also harm our business by negatively affecting the parties with whom we do business, including our customers, retailers, distributors and wholesalers, and third-party contract manufacturers and suppliers. These conditions could impair the ability of our customers to pay for products they have purchased from us. As a result, allowances for doubtful accounts and write-offs of accounts receivable from our customers may increase. In addition, our third-party contract manufacturers and their suppliers may experience financial difficulties or business disruptions that could negatively affect their operations and their ability to supply us with finished goods and the raw materials, packaging, and components required for our products. Our financial results could suffer if we are unable to implement and successfully manage our strategic initiatives or if our strategic initiatives do not achieve the intended results. There is no assurance that we will be able to implement and successfully manage our strategic initiatives, including our six core strategic initiatives, or that the strategic initiatives will achieve the intended results. Our six core strategic initiatives include: (i) building a business for the future; (ii) attracting, developing and engaging outstanding tribe members; (iii) striving for operational excellence; (iv) growing WD-40 Multi-Use Product; (v) growing WD-40 Specialist product line; and (vi) expanding and supporting portfolio opportunities that help us grow. An important part of our success depends on our continuing ability to attract, engage and develop highly qualified people. Our future performance depends in significant part on maintaining high levels of employee engagement and nurturing our values and culture. We believe that our company culture is a critical driver of our success and we invest substantial time and resources in building, maintaining and evolving our culture. Any failure to preserve and evolve our culture could negatively affect our future success, including our ability to retain and recruit employees. Our success also depends on the continued service of our executive officers, key employees and other talented people. Further, our ability to successfully execute organizational changes, including succession planning and the transition of our executive officers and key employees, is critical to the continued success of our business. The unexpected loss of the services of key employees or executive officers could have a material adverse effect on our business and prospects. In addition current economic conditions have led to an unusually competitive labor market in which experienced personnel are in high demand. Since the competition for such talent 6 is intense there can be no assurance that we can retain our key employees or attract, assimilate and retain employees who are fully engaged in the future. If we are unable to implement and successfully manage our strategic initiatives in accordance with our business plans, our business and financial results could be adversely affected. Moreover, we cannot be certain that the implementation of our strategic initiatives will necessarily advance our business or financial results as intended. If the success and reputation of one or more of our leading brands erodes, our business, financial condition and results of operations could be negatively impacted. Our financial success is directly dependent on the success and reputation of our brands, particularly our WD-40 Brand. The success and reputation of our brands can suffer if marketing plans or product development and improvement initiatives, including the release of new products or innovative packaging, do not have the desired impact on the brands’ image or do not attract customers as intended. Our brands can also be adversely impacted due to the activities and pressures placed on them by our competitors. Further, our business, financial condition and results of operations could be negatively impacted if one of our leading brands suffers damage to its reputation due to real or perceived quality or safety issues. Quality issues, which can lead to large scale recalls of our products, can be due to items 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. 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. 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 are accurate. This risk is compounded by the increasing use of social and digital media by consumers and the speed by which information and opinions are shared. If we are unable to anticipate and respond to sudden challenges in the marketplace, trends in the market and changing consumer demands and sentiment, our financial results may be negatively impacted. Although we make every effort to prevent brand erosion and preserve our reputation and the reputation of our brands, there can be no assurance that such efforts will be successful. Sales unit volume growth may be difficult to achieve. Our ability to achieve sales volume growth will depend on our ability to (i) execute certain of our strategic initiatives, (ii) drive growth in new markets by making targeted end users aware of our products and making them easier to buy, (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. It is more difficult for us to achieve sales volume growth in developed markets where our products are widely used as compared to in developing or emerging markets where our products have been newly introduced or are not as well known by consumers. In order to protect our existing market share or capture additional market share from our competitors, we may need to increase our expenditures related to promotions and advertising or introduce and establish new products or product lines. In addition, we also periodically implement sales price increases within certain markets or for certain product lines in response to increased costs associated with components, raw materials, manufacturing and distribution. For example, we implemented significant sales price increases during fiscal year 2022 in response to the current inflationary environment that has significantly increased our cost of goods sold. Sales price increases may slow sales volume growth or create declines in volume in the short term as customers and end users adjust to sales price increases or purchase alternative products at lower prices. In addition, the continued prominence and growth of the online retail sales channel has presented both us and our customers that sell our products online with the challenge of balancing online and physical store retailing methods. As a result of the COVID-19 pandemic and 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. Although we are engaged in e-commerce with respect to our products, if we are not successful in expanding sales in such alternative retail channels or we experience challenges with operating in such channels, our financial condition and results of operations may be negatively impacted. 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. 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. Cost increases or cost volatility in finished goods, components, raw materials, transportation and other necessary supplies or services could harm or impact our financial condition and results of operations. Increases in the cost of finished goods, which may be driven by higher costs for components, raw materials and third-party manufacturing fees, as well as increases in the cost of transportation and other necessary supplies or services may harm our financial condition and results of operations. Specialty chemicals and aerosol cans, which constitute a significant portion of the 7 costs for many of our maintenance products, have experienced significant price volatility in the past, and may continue to do so in the future. In particular, volatility in the price of oil impacts the cost of specialty chemicals, many of which are indexed to the price of regional crude oil or related refined products. Fluctuations in oil and diesel fuel prices have also historically impacted our cost of transporting our products, compounded recently by increased regulations imposed on the freight industry and additional macroeconomic factors which have resulted in increased freight costs. For example, the COVID-19 pandemic has resulted in global supply chain constraints and transportation disruptions that have led to increased competition for freight resources, higher fees charged by our third-party manufacturers, increased raw material costs and other input costs that have negatively impacted our results of operations. In addition, other macroeconomic factors have recently 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. When there are significant increases in the costs of components, raw materials, third-party manufacturing fees and other expenses, and we are not able to increase the prices of our products or achieve other cost savings to an extent that they will offset such cost increases, our gross margin and operating results will be negatively impacted. In addition, if we increase our sales prices in response to increases in the cost of such raw materials, and those raw material costs later decline significantly, we may not be able to sustain our sales prices at these higher levels. 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. Sustained increases in the cost of raw materials, components, fees from our third-party contract packagers, transportation and other necessary supplies or services, or significant volatility in such costs, could have a material adverse effect on our financial condition and results of operations. Reliance on a limited base of third-party contract manufacturers, logistics providers and suppliers of raw materials and components may result in disruption to our business and this could adversely affect our financial condition and results of operations. We rely on a limited number of third-party contract manufacturers, logistics providers and suppliers, including single or sole source suppliers for certain raw materials, packaging, product components and other necessary supplies. We do not have direct control over the management or business of these third parties, except indirectly through terms negotiated in service or supply contracts. As a result, we currently face, and will continue to 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 result in the acquiring company not being interested in manufacturing 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 the COVID-19 pandemic 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. In addition, if we are unable to contract with third-party manufacturers or suppliers for the quantity and quality levels needed for our business, we could experience disruptions in production and our financial results could be adversely affected. In particular, the COVID-19 pandemic, extreme weather events and other macroeconomic factors have resulted in significant supply chain constraints and transportation disruptions that have periodically arisen. 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. These challenges have periodically resulted in us not being able to meet the demand for our products by customers and end-users in certain markets where demand for aerosols has, for certain products, outpaced the available production capacity in the region. We have been actively working on various initiatives in partnership with our third-party manufacturers and we are also identifying and onboarding new third-party manufacturers in order to increase the capacity and resilience of our supply chain to meet strong end-user demand. When we onboard new third- party manufacturers, it comes with inherent risks and in the current economic environment, it also potentially comes with higher costs. 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, has also come with higher transportation, storage and distribution costs. We are not able to estimate the degree of the impact or the costs associated with potential future disruptions within our supply chain and distribution networks as these supply chain issues are being resolved. 8 Global operations outside the U.S. expose us to uncertain conditions, foreign currency exchange rate risk and other risks in international markets. Our sales outside of the U.S. were approximately 66% of consolidated net sales in fiscal year 2022. 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. These risks could have a significant impact on our ability to sell our products on a competitive basis in global markets outside the United States. In addition, continued developments in global political climates have introduced greater uncertainty with respect to tax policies, trade relations, tariffs and government regulations affecting trade between the U.S. and other countries. For example, on February 24, 2022, Russian forces launched significant military action against Ukraine, which has resulted in conflict and disruption in the region. In response to this action taken by Russia, the U.S. and other countries immediately imposed various economic sanctions against Russia. These geopolitical tensions have continued and it is uncertain when conditions will improve or whether additional governmental sanctions will be enacted in future periods. The direct and indirect impacts of this evolving situation and its effect on global economies in future periods are difficult to predict. We suspended selling our products to markets in Russia and Belarus beginning in March 2022, which has had an unfavorable impact on our sales. In addition, we are currently unable to sell our products in Ukraine due to the disruption in the country. As a result of this conflict, commodity markets remain subject to heightened levels of uncertainty, especially as they relate to the price of crude oil, which increased significantly in the immediate aftermath of the sanctions against Russia. Increases in crude oil prices unfavorably impact the cost of our products, as well as the cost of the transportation and distribution of our products. The duration and severity of the recent increases in the price of crude oil are highly unpredictable and may unfavorably impact our cost of goods sold for as long as these conditions exist. These developments, as well as the risks outlined above, could have a material adverse effect on our business, financial condition and results of operations. Approximately 49% of our revenues in fiscal year 2022 were generated in currencies other than the U.S. Dollar, which is our reporting currency. In addition, all of our foreign operating subsidiaries have functional currencies other than the U.S. Dollar and our largest subsidiary is located in the U.K. and generates significant sales in Pound Sterling and Euro. As a result, we are exposed to foreign currency exchange rate risk with respect to our sales, expenses, profits, cash and cash equivalents, other assets and liabilities denominated in currencies other than the U.S. Dollar. In particular, our financial results are negatively impacted when the foreign currencies in which our subsidiary offices operate weaken relative to the U.S. Dollar. 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. Moreover, any favorable impacts to profit margins or financial results from fluctuations in foreign currency exchange rates are likely to be unsustainable over time. Additionally, our global operations outside the U.S. are subject to risks relating to appropriate compliance with legal and regulatory requirements in local jurisdictions, potential difficulties in staffing and managing local operations, potentially higher incidence of fraud or corruption, credit risk of local customers and distributors and potentially adverse tax consequences. As we further develop and grow our business operations outside the U.S., we are exposed to additional complexities and risks, particularly in China 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. Bribery Act or other applicable anti-corruption laws and regulations may be prevalent. Evolving privacy 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 have adopted policies and contract terms to mandate compliance with these laws, there can be no assurance that all of our employees, contractors and agents will comply with our requirements. Violations of these laws could be costly and disrupt our business, which could have a material adverse effect on our business, financial condition and results of operations. 9 Malfunctions or implementation issues related to the critical information systems that we use for the daily operations of our business, cyberattacks and data breaches could adversely affect our ability to conduct business. To conduct our business, we rely extensively on information technology systems, networks and services, many of which are managed, hosted and provided by third-party service providers. We cannot guarantee that our security measures will prevent cyberattacks resulting in breaches of our own or our third-party service providers’ databases and systems. Techniques used in these attacks change frequently and may be difficult to detect for periods of time. 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. 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. 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. We also cannot be certain that such insurance will continue to be available to us on economically reasonable terms, or at all, in future periods. In addition, system failure, malfunction or loss of data that is housed in the Company’s or its third-party service providers’ critical information systems could disrupt our ability to timely and accurately process transactions and produce key financial reports, including information on our operating results, financial position and cash flows. 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. As a result, we may experience interruptions in our ability to manage our daily operations and this could adversely affect our business, financial condition and results of operations. The information system that the U.S. office uses for its business operations is a market-specific application that is not widely used by other companies. This system is also used by three of our other regional offices: our Canada, Australia and Malaysia offices. The company that owns and supports this application may not be able to provide the same level of support as that of larger information systems. If the company that owns and supports this application in the U.S. were to cease its operations or were unable to provide continued support for this application, it could adversely affect our daily operations or our business, financial condition and results of operations. Management determined that it is appropriate to replace this information system so we are currently in the process of implementing a new information system that will be used at all of these offices. We are currently configuring the system based on our design work to date and have been performing various stages of testing. We are also in the process of determining our implementation rollout strategy and timing for the offices transitioning to this new information system. This information system, along with other integrated software platforms, will be used to process all of the daily transactions and to produce key financial reports for all of these offices. If we encounter difficulties in completing this critical information system implementation, or if the implementation takes longer than intended, we may experience interruptions in our ability to manage our daily operations and report financial results and we may experience significant incremental costs, which could adversely affect our business, financial condition and results of operations. Our ability to achieve our environmental, social and governance and sustainability initiatives are subject to emerging risks and the outcomes may not achieve the anticipated benefits or align with new regulations and stakeholders’ expectations. There has been an increasing focus from stakeholders and regulators related to environmental, social and governance (“ESG”) matters across all industries in recent years. ESG standard setting and stakeholder expectations continue to evolve. Criteria used to evaluate ESG practices and metrics may change rapidly in future periods, which could result in increased expectations of public companies and may cause us to undertake costly initiatives to satisfy any new requirements. 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. The increased attention directed towards publicly traded companies surrounding ESG matters includes the recent release of proposed rules by the SEC that would require companies to enhance and standardize disclosures related to climate change, specifically those associated with physical risks and transitional risks. Physical risks include acute risks associated with extreme weather events or chronic risks associated with gradual shifts in climate or weather. 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 10 goals in the United States and other countries, or risks associated with changing stakeholder expectations and demands. Our first strategic initiative, “building a business for the future”, was developed to further align and integrate our business decisions with ESG factors and considerations and we anticipate achieving compliance with current and future ESG expectations and standards, as well as ESG expectations from our stakeholders. We are expecting to publish our next ESG Report in November 2022, which will include certain ESG and sustainability objectives. However, 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 increase the risk of litigation and this could negatively impact our financial condition and results of operations. Government laws and regulations, including environmental laws and regulations, could result in material costs or otherwise adversely affect our financial condition and results of operations. The manufacturing, chemical composition, packaging, storage, distribution and labeling of our products and the manner in which our business operations are conducted must comply with an extensive array of federal, state and international laws and regulations. If we are not successful in complying with the requirements of all such regulations, we could be fined or other actions could be taken against us by the applicable governing body, including the possibility of a required product recall. Any such regulatory action could adversely affect our financial condition and results of operations. 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. Some of our products have chemical compositions that are controlled by various state, federal and international laws and regulations that are subject to change. We are required to comply with these laws and regulations and we seek to anticipate regulatory developments that could impact our ability to continue to produce and market our products. 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. A delay or other inability of the Company to complete product research and development and successfully reformulate our products in response to any such regulatory requirements could have a material adverse effect on our business, financial condition and results of operations. We are subject to an SEC rule mandated by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that requires management to conduct annual due diligence to determine whether certain minerals and metals, known as “conflict minerals”, are contained in our products and, if so, whether they originate from the Democratic Republic of Congo or adjoining countries. 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. 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. Such laws and regulations may otherwise relate to various health and safety matters that impose burdens upon our operations. These laws and regulations also impose strict, retroactive and joint and several liability for the costs of, and damages resulting from, cleaning up current sites, past spills, disposals and other releases of hazardous substances. We believe that our expenditures related to environmental matters have not had, and are not currently expected to have, a material adverse effect on our financial condition, results of operations or cash flows. However, the environmental laws under which we operate are complicated, often become increasingly more stringent and may be applied retroactively. Accordingly, there can be no assurance that we will not be required to incur additional expenditures to remain in or to achieve compliance with environmental laws in the future or that any such additional expenditures will not have a material adverse effect on our business, financial condition or results of operations. In addition, certain countries and other jurisdictions in which we operate have data protection laws that impose strict regulations on the Company. Non-compliance with any of these regulations may result in significant penalties being imposed on us. 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. Our failure to comply with any of these regulations or our inability to adequately predict the manner in which 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. 11 Failure to maximize or to successfully assert our intellectual property rights or infringement by the Company on the intellectual property rights of others could impact our competitiveness or otherwise adversely affect our financial condition and results of operations. 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. 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. 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 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. 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. 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. 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. 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 an adverse effect on our business, financial condition or results of operations. 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. 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. Either having to cease use or pay such amounts could make the Company less competitive and could have a material adverse impact on our business, financial condition and results of operations. Our operating results and financial performance may not meet expectations, which could adversely affect our stock price. 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. 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. 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. If securities or industry analysts adversely change their recommendations regarding our common stock or if any of these analysts cease coverage of us in their reports, our stock price and trading volume could decline. Our operating results and financial performance may be negatively influenced by a number of factors, many of which are discussed in this Item 1A “Risk Factors”. In addition, sales volume growth, whether due to acquisitions or internal growth, can place burdens on management resources and financial controls that, in turn, can have a negative impact on our operating results and financial condition. To some extent, we plan our expense levels in anticipation of future revenues. If actual revenues fall short of these expectations, operating results may be adversely affected by reduced operating margins or operating profits due to actual expense levels that are higher than might otherwise have been appropriate. We face competition in our markets which could lead to reduced sales and profitability. We encounter competition from similar and alternative products, many of which are produced and marketed by major national or multinational companies. In addition, we frequently discover products in certain markets that are counterfeit reproductions of our WD-40 products as well as products otherwise bearing an infringing trade dress. The availability of counterfeits and other infringing products, particularly in China and other emerging markets, could adversely impact our sales and potentially damage the value and reputation of our brands. 12 Our products generally compete on the basis of product performance, brand recognition, price, quality or other benefits to consumers and meeting end users’ needs. Advertising, promotions, merchandising and packaging also have a significant impact on consumer purchasing decisions. A newly introduced consumer product, whether improved or recently developed, usually encounters intense competition requiring substantial expenditures for advertising, sales and consumer promotion. If a product gains consumer acceptance, it normally requires continued advertising, promotional support and product improvements in order to maintain its relative market position. Some of the competitors for our homecare and cleaning products are larger and have financial resources greater than ours. These competitors may be able to spend more aggressively on advertising and promotional activities, introduce competing products more quickly and respond more effectively to changing business and economic conditions than us. 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. There can be no assurance that the Company 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. Dependence on key customers could adversely affect our business, financial condition and results of operations. We sell our products through a network of domestic and international mass retail, trade supply and consumer retailers as well as through industrial distributors and suppliers. The retail industry has historically been the subject of consolidation, and as a result, the development of large chain stores has taken place. Today, the retail channel is comprised of several of these large chain stores that capture the bulk of the market share. Since many of our customers have been part of consolidations in the retail industry, these limited customers account for a large percentage of our net sales. Although we expect that a significant portion of our revenues will continue to be derived from this limited number of customers, there was no individual customer that contributed to more than 10% of our consolidated net sales in fiscal year 2022. However, changes in the strategies of our largest customers, including shelf simplification, a reduction in the number of brands they carry or a shift in shelf space to “private label” or competitors’ products, may harm our sales. 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. 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. Accordingly, these customers could reduce their purchasing levels or cease buying products from us at any time and for any reason. We are also subject to changes in customer purchasing patterns or the level of promotional activities. These types of changes may result from changes in the manner in which customers purchase and manage inventory levels, or display and promote products within their stores. Other potential factors such as customer disputes regarding shipments, fees, merchandise condition or related matters may also impact operating results. 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. We may not successfully develop, introduce and/or establish new products and line extensions. 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. 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. 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. There are inherent risks associated with new product development and marketing efforts, including product development or launch delays, product performance issues during development, changing regulatory frameworks that affect the new products in development and the availability of key raw materials included in such products. These inherent risks could result in the failure of new products and product line extensions to achieve anticipated levels of market acceptance, additional costs resulting from failed product introductions and the product not being first to market. As we continue to focus on innovation and renovation of our products, our business, financial condition or results of operations could be adversely affected in the event that we are not able to effectively develop and introduce new or renovated products and line or brand extensions. 13 Changes in marketing distributor relationships that are not managed successfully by us could result in a disruption in the affected markets. 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. 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. Should our relationship with a marketing distributor change or terminate, our sales within such a marketing distributor’s territory could be adversely impacted until such time as a suitable replacement can be found and our key marketing strategies are implemented. 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 a disruption could have a material adverse effect on our business, financial condition and results of operations. 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. While we make every effort to ensure that the products we develop and market are safe for consumers and comply with all applicable regulations, the use of our products may expose us to liability claims resulting from such use and potential enforcement actions, including the risk of recall. Claims could be based on allegations that, among other things, our products are improperly labeled or that statements we make on our labels are not accurate, contain contaminants, provide inadequate instructions regarding their use or inadequate warnings concerning their use or interactions with other substances. Product liability claims could result in negative publicity that could harm our sales and operating results. We maintain product liability insurance to protect us from loss attributable to product liability claims but the extent of such loss could exceed available limits of insurance or could arise out of circumstances under which such insurance coverage would be unavailable. Other business activities may also expose us to litigation risks, including risks that may not be covered by insurance such as contract disputes. If successful claims are asserted by regulatory agencies or third parties against us for non-compliance or uninsured liabilities or liabilities in excess of applicable limits of insurance coverage, our business, financial condition and results of operations may be adversely affected. In addition, if one of our products was determined to be defective, we could be required to recall the product, which could result in adverse publicity, loss of revenues and significant expenses. Additionally, our products may be associated with competitor products or other products in the same category that may be alleged to have caused harm to consumers. As a result of this association, we may be named in unwarranted legal actions. The potential costs to defend such claims may materially affect our business, financial condition and results of operations. Resolution of income tax matters may impact our financial condition and results of operations. Significant judgment is required in determining our effective income tax rate and in evaluating tax positions, particularly those related to uncertain tax positions. 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. When particular tax matters arise, a number of years may elapse before such matters are audited and finally resolved. Favorable or unfavorable resolution of such matters would be recognized as a reduction to our effective tax rate in the year of resolution. 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, included in this report. Changes in tax rules may also materially affect, either adversely or favorably, our future financial results or the way management conducts its business. For example, on August 16, 2022, President Biden signed the “Inflation Reduction Act” (the “IRA”) into law. Although we do not at this time foresee this new law having a material impact on the Company, the new law is under evaluation as to how it might affect the Company’s future results and decisions of management. Previously, on December 22, 2017, the “Tax Cuts and Jobs Act” (the “Tax Act”) was signed into law and became effective beginning January 1, 2018. The Tax Act significantly changed U.S. tax law and tax rates, as well as mandated the application of a one-time “toll tax” on unremitted foreign earnings, among other things. International tax changes that occur in locations where we operate can also materially affect future financial results or operations. For example, we have significant operations in Europe that are subject to income tax rates and laws in multiple jurisdictions. A significant portion of European income is subject to taxation in the U.K as a result of our European subsidiary being 14 headquartered in the United Kingdom. In June of 2021 an Act of Parliament received Royal Assent, changing the U.K. corporate tax rate from 19% to 25% effective on April 1, 2023 and this change may have a material impact on our future financial results. In addition, we are required to make assertions on whether our foreign subsidiaries will invest their undistributed earnings indefinitely and these assertions are based on the capital needs of the foreign subsidiaries. Generally, unremitted earnings of our foreign subsidiaries are not considered to be indefinitely reinvested. However, there are exceptions 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. For additional information on income tax matters, see Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 13 — Income Taxes, included in this report. Although many impacts of the Tax Act have been favorable for us both in the near term and long term and the IRA may have a negligible effect, the Tax Act and IRA have also authorized the U.S. Department of the Treasury to issue regulations with respect to the new provisions. We cannot predict how subsequent changes in the Tax Act, and IRA, regulations, or other guidance issued under each, including conforming or non-conforming state tax rules, might affect our business, financial condition and results of operations. In addition, there can be no assurance that U.S. tax laws, including the corporate income tax rate, will not undergo significant additional changes in the future. Our business development activities may not be successful. We may increase growth through business development activities such as acquisitions, joint ventures, licensing and/or other strategic partnerships in the U.S. and internationally. However, if we are not able to identify, acquire and successfully integrate acquired products or companies or successfully manage joint ventures or other strategic partnerships, we may not be able to maximize these opportunities. The failure to properly manage business development activities because of difficulties in the assimilation of operations and products, the diversion of management’s attention from other business concerns, the loss of key employees or other factors could have a material adverse effect on our business, financial condition and results of operations. 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. Future acquisitions, joint ventures or strategic partnerships could also result in the incurrence of debt, potentially dilutive issuances of equity securities, contingent liabilities, amortization expenses related to certain intangible assets, unanticipated regulatory complications and/or increased operating expenses, all of which could adversely affect our results of operations and financial condition. 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 adversely affect our business, financial condition and results of operations. Goodwill and intangible assets are subject to impairment risk. In accordance with the authoritative accounting guidance on goodwill and intangibles, we assess the potential impairment of our existing 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 also assess our definite-lived intangible assets for potential impairment when events and circumstances indicate that the carrying amount of the asset may not be recoverable or its estimated remaining useful life may no longer be appropriate. 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. The assessment for possible impairment of our goodwill and intangible assets requires management to make judgments on a number of significant estimates and assumptions, including macroeconomic conditions, overall category growth rates, sales growth rates, cost containment and margin expansion and expense levels for advertising and promotions and general overhead, all of which must be developed from a market participant standpoint. 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 negatively impact our financial condition and results of operations. Changes in management estimates and assumptions as they relate to valuation of goodwill and intangible assets could affect our financial condition or results of operations in the future. Our review of events and circumstances during fiscal year 2022 included consideration of the ongoing COVID-19 pandemic, the current inflationary environment, and the impact of Russian military action against Ukraine. For additional information, see Part IV – Item 15, “Exhibits, Financial Statement Schedules” Note 5 – Goodwill and Other Intangible Assets, included in this report. 15 We may also divest certain of our assets, businesses or brands that do not align with our strategic initiatives. Any divestiture could negatively impact our profitability as a result of losses that may result from such a sale, the loss of sales and operating income or a decrease in cash flows subsequent to the divestiture. We may also be required to recognize impairment charges as a result of a divestiture. We may not have sufficient cash to service our indebtedness or to pay cash dividends. Our debt consists of fixed rate senior notes and a revolving credit facility. We use income from operations to make interest and principal payments required by the terms of our borrowing agreements. In addition, our borrowing agreements include covenants to maintain certain financial ratios and to comply with other financial terms, conditions and covenants. Also, we have historically paid out a large part of our earnings to stockholders in the form of regular quarterly cash dividends. We may incur substantial debt in the future for general business and development activities. In addition, we may continue to use available cash balances to execute share repurchases under approved share buy-back plans. To the extent that we are required to seek additional financing to support certain of these activities, such financing may not be available in sufficient amounts or on terms acceptable to us. If we are unable to obtain such financing or to service our existing or future debt with our operating income, or if available cash balances are affected by future business performance, unstable global economic conditions, liquidity, capital needs, alternative investment opportunities or debt covenants, we could be required to reduce, suspend or eliminate our dividend payments to our stockholders. 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. Item 2. Properties Americas We own and occupy an office located in San Diego, California which houses both corporate employees and employees in our Americas segment. We also lease a regional sales office in Miami, Florida, a research and development office and laboratory in Pine Brook, New Jersey and office space in Toronto, Ontario, Canada and Monterrey, Nuevo León, Mexico. EMEA We own and occupy an office as well as a plant facility located in Milton Keynes, United Kingdom. In addition, we lease space for our branch offices in Germany, France, Italy, Spain, Portugal and the Netherlands. Asia-Pacific We lease office space in Epping, New South Wales, Australia; Shanghai, China; and Kuala Lumpur, Malaysia. Item 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. Mine Safety Disclosures Not applicable. 16 PART II Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Global Select Market under the trading symbol WDFC. On October 17, 2022, the last reported sales price of our common stock on the NASDAQ Global Select Market was $173.52 per share, and there were 13,579,926 shares of common stock outstanding held by approximately 570 holders of record. Dividends We have historically paid regular quarterly cash dividends on our common stock. In December 2021, the Board of Directors declared an 8% increase in the regular quarterly cash dividend, increasing it from $0.72 per share to $0.78 per share. On October 11, 2022, our Board of Directors declared a cash dividend of $0.78 per share payable on October 31, 2022 to shareholders of record on October 21, 2022. Our Board of Directors presently intends to continue the payment of regular quarterly cash dividends on our common stock. Our ability to pay dividends could be affected by future business performance, liquidity, capital needs, alternative investment opportunities and debt covenants. Purchases of Equity Securities By the Issuer and Affiliated Purchasers On April 8, 2020, we elected to suspend repurchases under our previously approved share buy-back plan, which subsequently expired on August 31, 2020. We made this election in order to preserve cash while we continued to monitor the long-term impacts of the COVID-19 pandemic. No repurchase transactions were made during fiscal year 2021. On October 12, 2021, our Board of Directors approved a new share buy-back plan. Under the plan, which became effective on November 1, 2021, we are authorized to acquire up to $75.0 million of our outstanding shares through August 31, 2023. 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. 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 and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide the reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity and certain other factors that may affect future results. This MD&A includes the following sections: Overview, Highlights, Results of Operations, Performance Measures and Non-GAAP Reconciliations, Liquidity and Capital Resources, Critical Accounting Policies and 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. Use of Non-GAAP Constant Currency In order to show the impact of changes in foreign currency exchange rates on our results of operations, we have included constant currency disclosures, where necessary, in the Overview and Results of Operations sections which follow. Constant currency disclosures represent the translation of our current fiscal year revenues, expenses and net income from the functional currencies of our subsidiaries to U.S. Dollars using the exchange rates in effect for the corresponding period of the prior fiscal year. Results on a constant currency basis are not in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”) and should be considered in addition to, not as a substitute for, results prepared in accordance with GAAP. We use results on a constant currency basis as one of the measures to understand our operating results and evaluate our performance in comparison to prior periods in order to enhance the visibility of the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. Management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing our underlying business performance and trends. However, reference to constant currency basis should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP. 17 Overview The Company WD-40 Company, based in San Diego, California, is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world. We own a wide range of well-known brands that include maintenance products and homecare and cleaning products: WD-40 Multi-Use Product, WD-40 Specialist, 3-IN-ONE, GT85, X-14, 2000 Flushes, Carpet Fresh, no vac, Spot Shot, 1001, Lava and Solvol. Our products are sold in various locations around the world. Maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, the Middle East and Africa. Homecare and cleaning products are sold primarily in North America, the United Kingdom (“U.K.”) and Australia. 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. Highlights The following summarizes the financial and operational highlights for our business during the fiscal year ended August 31, 2022: • Consolidated net sales increased $30.7 million, or 6%, for fiscal year 2022 compared to the prior fiscal year. Changes in foreign currency exchange rates had an unfavorable impact of $8.3 million on consolidated net sales for fiscal year 2022. Thus, on a constant currency basis, net sales would have increased by $39.0 million, or 8%, for fiscal year 2022 compared to the prior fiscal year. This unfavorable impact from changes in foreign currency exchange rates mainly came from our EMEA segment, which accounted for 39% of our consolidated sales for the fiscal year ended August 31, 2022. • Gross profit as a percentage of net sales decreased to 49.1% for fiscal year 2022 compared to 54.0% for the prior fiscal year, primarily due to ongoing global supply chain challenges, including the increased cost of raw materials and constraints related to the ongoing COVID-19 pandemic. These ongoing challenges have resulted in increased inflation rates globally. See the Impact of COVID-19 on Our Business section which follows for details, including actions we are taking in response to these challenges. • Consolidated net income decreased $2.9 million, or 4%, for fiscal year 2022 compared to the prior fiscal year. Changes in foreign currency exchange rates had an unfavorable impact of $0.8 million on consolidated net income for fiscal year 2022. Thus, on a constant currency basis, net income would have decreased by $2.1 million, or 3%, for fiscal year 2022 compared to the prior fiscal year. • Diluted earnings per common share for fiscal year 2022 were $4.90 versus $5.09 in the prior fiscal year. Our strategic initiatives and the areas where we will continue to focus our time, talent and resources in future periods include: (i) building a business for the future; (ii) attracting, developing and engaging outstanding tribe members; (iii) striving for operational excellence; (iv) growing WD-40 Multi-Use Product; (v) growing WD-40 Specialist product line; and (vi) expanding and supporting portfolio opportunities that help us grow. 18 Significant Developments Impact of COVID-19 on Our Business Our financial results and operations continue to be impacted by the COVID-19 pandemic that began during our fiscal year 2020. The ongoing COVID-19 pandemic has impacted global economies, the rate of inflation, supply chains, distribution networks and consumer behavior around the world. We have experienced both favorable and unfavorable impacts to our financial results and our operations as a result of the direct and indirect effects of the COVID-19 pandemic. For example, sales have been negatively impacted at varying times in the regions in which we operate due to health and safety restrictions required by local governmental authorities; such restrictions most recently impacted our Asia-Pacific segment when COVID-19 lockdowns were in place in China sporadically during the second half of fiscal year 2022. These negative sales impacts since the start of the pandemic have been offset in certain periods by increased demand for our products, particularly in fiscal year 2021, as a result of the shift in consumer spending patterns due to increased renovation and maintenance activities. However, global supply chain issues have resulted in increased raw material costs and other input costs, higher competition for freight resources, and labor constraints within manufacturing and distribution networks. These increased costs started to negatively impact our gross margin and financial results in fiscal year 2021. This inflationary environment worsened during fiscal year 2022 resulting in lower gross margins compared to the corresponding periods of the prior fiscal year. Some of the increasing supply chain challenges that we have experienced include general aerosol production capacity constraints and competition for such capacity by other companies who also utilize third-party manufacturers for their aerosol production. Supply chains at many companies globally are being strained due to shortages of certain materials and this is impacting the ability of our third-party manufacturers to procure certain raw materials needed to manufacture our products. These challenges have periodically resulted in us not being able to meet the high level of demand for our products by customers and end-users in certain markets, most significantly those markets in our Americas segment where demand for aerosols has periodically outpaced the available production capacity in the region. We are continuing to actively manage periodic supply chain constraints and transportation disruptions. We have been actively working on various initiatives with our existing third-party manufacturers and we are also identifying and onboarding new third-party manufacturers, particularly in the Americas and EMEA segments. In addition, we have taken actions 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. As a result of these initiatives, we have begun to see increases in the capacity and flexibility of our supply chain throughout fiscal year 2022, particularly in the Americas segment. When we onboard new third-party manufacturers, it comes with inherent risks and in the current economic environment, it also potentially comes with higher costs. Although we are not able to estimate the costs or impacts associated with potential future supply chain disruptions, we believe that the changes we continue to implement as a result of the pandemic will have a positive lasting impact on our ability to better manage any future disruptions. However, some of the additional costs resulting from these recent supply chain constraints, including costs resulting from maintenance of higher inventory levels, as well as the inflationary environment that is impacting our raw material costs, are expected to unfavorably impact our cost of goods sold for as long as such conditions exist. To offset these unfavorable impacts to gross margin, significant price increases have been implemented across all of our markets and geographies in fiscal year 2022 and further price increases may be implemented in certain regions in fiscal year 2023. Although we are beginning to see the favorable impacts of these price increases, it will take additional time before the full impact of these price increases is reflected in our reported results, especially those in some of our largest markets which we implemented late in the third quarter and in the fourth quarter of fiscal year 2022. However, it is possible that sales volumes may be impacted unfavorably in the short term as customers and end users adjust to increased sales prices. The severity and duration of the COVID- 19 pandemic and its effects on our supply chain, changes in end-user demand and the current inflationary environment remain uncertain and it is not possible to estimate the extent to which these conditions will impact our financial results and operations in future periods. We have continued to follow a variety of measures to promote the safety and security of our employees during the pandemic, support the communities in which we operate and ensure the availability and functioning of our critical infrastructure. These measures have included allowing for or requiring remote working arrangements for employees in some regions and the imposition of various travel restrictions. In addition, we continue to develop and monitor plans to support a safe working environment for our employees in the various office locations in which we operate around the world. These plans vary by region based on the evolving situations within those regions. In connection with these plans, we have put in place our “Work from Where” philosophy to support work-life integration, and enable management and employees to align on where work is completed. See our risk factors disclosed in Part I―Item 1A, “Risk Factors,” for further information on risks associated with pandemics, including COVID-19. 19 The Impact of Russian Military Action in Ukraine On February 24, 2022, Russian forces launched significant military action against Ukraine, which has resulted in conflict and disruption in the region. In response to this action taken by Russia, the U.S. and other countries immediately imposed various economic sanctions against Russia. These geopolitical tensions continued throughout the remainder of the fiscal year and it is uncertain when conditions will improve or whether additional governmental sanctions will be enacted in future periods. The direct and indirect impacts of this evolving situation and its effect on global economies in future periods are difficult to predict. We suspended selling our products to markets in Russia and Belarus beginning in March 2022, which had an unfavorable impact on our sales. In addition, we are currently unable to sell our products in Ukraine due to the disruption in the country. Our net sales to the regions that are directly impacted were approximately 3% of consolidated net sales for fiscal year 2021 and approximately 4% of consolidated net sales for the first half of fiscal year 2022, prior to the suspension of sales in these regions. As a result of this event that impacted the second half of our fiscal year, sales in these regions decreased 38% for the fiscal year ended August 31, 2022 compared to the prior fiscal year. We do not have facilities, third-party manufacturing partners, employees or inventory in these affected regions. Additionally, the only activities we conducted in these regions prior to the suspension of sales were through local marketing distributors. Write-offs of previously existing accounts receivable from those marketing distributors affected by the crisis have not been significant to date and are not expected to become significant in future periods. As a result of this conflict, commodity markets remain subject to heightened levels of uncertainty, especially as they relate to the price of crude oil, which increased significantly in the immediate aftermath of the sanctions against Russia. Increases in crude oil prices unfavorably impact the cost of our products, as well as the cost of the transportation and distribution of our products. The length and severity of the recent increases in the price of crude oil are highly unpredictable and may unfavorably impact our cost of goods sold for as long as these conditions exist. 20 Results of Operations Fiscal Year Ended August 31, 2022 Compared to Fiscal Year Ended August 31, 2021 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, Change from Prior Year 2022 2021 Dollars Percent $ $ $ $ 485,326 33,494 518,820 264,055 254,765 167,435 87,330 67,329 4.90 $ $ $ $ 448,817 39,292 488,109 224,370 263,739 174,898 88,841 70,229 5.09 $ $ $ $ 36,509 (5,798) 30,711 39,685 (8,974) (7,463) (1,511) (2,900) (0.19) 8% (15)% 6% 18% (3)% (4)% (2)% (4)% (4)% Net sales: Maintenance products Homecare and cleaning products Total net sales Cost of products sold Gross profit Operating expenses Income from operations Net income Earnings per common share - diluted Net Sales by Segment The following table summarizes net sales by segment (in thousands, except percentages): Americas EMEA Asia-Pacific Total Fiscal Year Ended August 31, Change from Prior Year 2022 2021 Dollars Percent $ 240,233 $ 214,601 $ 25,632 204,688 73,899 518,820 208,252 65,256 488,109 $ $ $ (3,564) 8,643 30,711 12% (2)% 13% 6% 21 Americas Sales The following table summarizes net sales by product line for the Americas segment (in thousands, except percentages): Fiscal Year Ended August 31, Maintenance products Homecare and cleaning products Total % of consolidated net sales $ $ 2022 223,470 16,763 240,233 47% $ $ 2021 194,295 20,306 214,601 44% Change from Prior Year Dollars Percent $ $ 29,175 (3,543) 25,632 15% (17)% 12% CC Net sales - non-GAAP (1) $ 240,190 $ 214,601 $ 25,589 12% (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 Americas Sales – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Net sales of maintenance products in the Americas segment increased due primarily to the following: • U.S. sales increased $15.3 million, or 10%, due to increased sales of WD-40 Multi-Use Product and WD-40 Specialist of $7.1 million, or 6%, and $7.7 million, or 51%, respectively. The increase for WD-40 Multi-Use Product was primarily due to price increases that went into effect during the last twelve months and supply chain improvements we made during fiscal year 2022 which resulted in increased product availability. These increases were offset by lower demand, partially due to unusually high levels of renovation and maintenance activities exhibited by our end-users during the prior fiscal year 2021 in earlier stages of the COVID-19 pandemic. WD-40 Specialist sales increased primarily due to significantly higher product availability. WD-40 Specialist products are sourced at certain third-party manufacturers that were significantly impacted by global supply chain constraints in fiscal year 2021. However, adjustments we have made in our supply chain to increase the production capacity of our most significant products, including WD-40 Specialist, improved the availability of these products throughout fiscal year 2022. In addition, WD-40 Specialist also benefited from price increases we implemented over the last 12 months. • Latin America sales increased $11.8 million, or 35%, primarily due to higher sales throughout many markets in the region, including in our direct market in Mexico. Sales were favorably impacted by price increases, increased product availability, successful promotional programs, and the continued momentum of achieving new distribution in our direct market in Mexico. In addition, sales were favorably impacted in the fourth quarter of fiscal year 2022 due to marketing distributors purchasing product in advance of additional price increases which were implemented late in fiscal year 2022. • Canada sales increased $2.1 million, or 16%, primarily due to demand in the industrial channel in Western Canada as a result of increased activity levels of end-users in the oil industry. In addition, price increases we implemented over the last twelve months, increased promotional activities and new distribution also had a favorable impact on sales. Net sales of homecare and cleaning products in the Americas decreased due to the following: • Challenges in our Americas supply chain, primarily in the U.S., resulted in decreased product availability and lower net sales for most homecare and cleaning product brands. While we have been actively working to increase the capacity and flexibility of our supply chain in recent periods, the adjustments we have made to date have been more heavily focused on our most significant products, primarily our maintenance products. • While each of our homecare and cleaning products have continued to generate positive cash flows, we have experienced flat or decreased sales for many of these products in recent periods. For the Americas segment, 74% of sales came from the U.S., and 26% of sales came from Canada and Latin America combined for the fiscal year ended August 31, 2022 compared to the prior fiscal year when 77% of sales came from the U.S., and 23% of sales came from Canada and Latin America combined. 22 EMEA Sales The following table summarizes net sales by product line for the EMEA segment (in thousands, except percentages): Fiscal Year Ended August 31, Maintenance products Homecare and cleaning products Total (1) % of consolidated net sales $ $ 2022 196,524 8,164 204,688 39% $ $ 2021 198,309 9,943 208,252 43% Change from Prior Year Dollars Percent $ $ (1,785) (1,779) (3,564) (1)% (18)% (2)% CC Net sales - non-GAAP (2) $ 212,319 $ 208,252 $ 4,067 2% (1) While our reporting currency is the U.S. Dollar, the functional currency of our U.K. subsidiary, the entity in which the EMEA results are generated, is Pound Sterling. Although the functional currency of this subsidiary is Pound Sterling, approximately 50% of its sales are generated in Euro and approximately 15% are generated in U.S. Dollar. As a result, the Pound Sterling sales and earnings for the EMEA segment can be negatively or positively impacted from period to period upon translation from these currencies depending on whether the Euro and U.S. Dollar are weakening or strengthening against the Pound Sterling. (2) Current fiscal year constant currency net sales translated at the foreign currency exchange rates in effect for the corresponding period of the prior fiscal year, compared to prior period actual net sales. EMEA Sales – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Net sales decreased in the EMEA segment due to the following drivers: Direct Markets – EMEA (67% of net sales YTD FY2022 vs 68% YTD FY2021) • Direct markets decreased $4.5 million, or 3%, primarily due to decreased sales in the U.K of $8.4 million, or 21%, offset by increases in our other EMEA direct markets, when combined, of $3.9 million, or 4%. Sales in our direct markets were unfavorably impacted by the weakening of the Pound Sterling, the functional currency of our U.K subsidiary, against the U.S. Dollar. On a constant currency basis, sales would have increased $1.0 million in our direct markets in fiscal year 2022 as compared to the prior fiscal year. • Decreased sales in the U.K. direct market were primarily due to a lower level of demand, as renovation, maintenance and homecare and cleaning activities exhibited by our end-users in the U.K. during the COVID-19 pandemic resulted in particularly strong demand in fiscal year 2021. In addition, sales were unfavorably impacted by changes in foreign currency exchange rates. These decreases were partially offset by price increases we have implemented over the last twelve months. Although these price increases positively impacted sales, the overall impact was partially offset by a lower level of customer orders and promotional programs as customers adjust to these price increases. • Sales in EMEA direct markets, excluding the U.K., increased from period to period primarily due to new distribution and sales price increases, as well as successful promotional programs that occurred during fiscal year 2022. These favorable impacts were partially offset by lower demand and reduced renovation and maintenance activities exhibited by our end-users, as discussed above, as well as unfavorable impacts due to changes in foreign currency exchange rates. Distributor Markets – EMEA (33% of net sales YTD FY2022 vs 32% YTD FY2021) • Sales increased $0.9 million, or 1%, in EMEA markets wherein we utilize a marketing distributor model (“distributor markets”), in which products are sold to marketing distributors who in turn sell to wholesalers and retailers. The increase was primarily due to increased sales in India, the Middle East, Poland and the Czech Republic of $2.5 million, $1.5 million, $1.0 million, and $0.9 million, respectively. The increases in the distributor market sales were significantly offset by decreased sales in Russia and Turkey of $4.8 million and $0.9 million, respectively. The sales decrease in Russia was primarily due to the ongoing effects of the Russian military action in Ukraine. See The Impact of Russian Military Action in Ukraine described in the “Significant Developments” section above for further information regarding the suspension of our sales to Russian markets. • Sales were positively impacted in the distributor markets due to strong demand, new distribution and price increases we have implemented over the last twelve months. 23 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, Change from Prior Year Maintenance products Homecare and cleaning products Total % of consolidated net sales 2022 2021 Dollars Percent $ $ 65,332 8,567 73,899 14% $ $ 56,213 9,043 65,256 13% $ $ 9,119 (476) 8,643 16% (5)% 13% CC Net sales - non-GAAP (1) $ 74,621 $ 65,256 $ 9,365 14% (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 Asia-Pacific Sales – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Net sales in the Asia-Pacific segment increased due to the following drivers: • Sales in the Asia distributor markets increased $5.9 million, or 23%, primarily due to the success of promotional programs and the continued easing of COVID-19 lockdown measures throughout the fiscal year, which resulted in increased demand and higher sales in most countries, as well as the timing of customer orders in response to price increases. • Sales in China increased $2.3 million, or 13%, primarily due to a higher level of promotional activities during the first half of fiscal year 2022, as well as customers purchasing product in advance of anticipated price increases. These increases in sales were partially offset by decreased sales due to COVID-19 lockdowns in Shanghai and other cities, primarily in the third quarter, that severely limited the production of our products by our third-party manufacturer located in the region. In addition, these lockdowns and the severe restrictions placed on various regions in China during certain periods in the second half of fiscal year 2022 negatively impacted logistics networks in the country. • Australia sales increased $0.5 million, or 2%, primarily due to the ongoing growth of the base business, increased promotional activities and price increases that went into effect in February 2022. Changes in foreign currency exchange rates had an unfavorable impact on sales in Australia. On a constant currency basis, sales in Australia would have increased $1.5 million, or 7%. Gross Profit The following general information regarding the timing and nature of our product costs is important when assessing fluctuations in our gross margin from period to period: • There is often a delay of one quarter or more 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; • In general, the timing of advertising, promotional and other discounts may cause fluctuations in gross margin from period to period. Advertising, promotional and other discounts that are given to our customers are recorded as a reduction to sales, whereas advertising and sales promotional costs associated with promotional activities that we pay to third parties are recorded as advertising and sales promotion expenses; • In the 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. Dollar. The strengthening or weakening of the Euro and U.S. 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. These costs totaled $18.6 million and $16.5 million for the fiscal year ended August 31, 2022 and 2021, respectively. 24 • For further information pertaining to recent trends and economic conditions affecting gross margin, please see the section titled “Significant Developments”. The following table summarizes gross margin and gross profit (in thousands, except percentages): Gross profit Gross margin Fiscal Year Ended August 31, $ 2022 254,765 49.1% $ 2021 263,739 54.0% Change from Prior Year $ (8,974) (490) bps (1) (1) Basis points (“bps”) change in gross margin. Gross Margin – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Gross margin decreased 490 bps primarily due to the following unfavorable impacts, partially offset by favorable impacts: 1010 (Unfavorable)/Favorable Explanations (430) bps (180) bps (110) bps (100) bps (50) bps 390 bps Higher costs of specialty chemicals used in the formulation of our products. Higher costs of aerosol cans. Higher warehousing, distribution and freight costs associated with supply chain constraints as a result of the ongoing COVID-19 pandemic, the worsening inflationary environment and initiatives to increase production capacity while these constraints exist. Higher filling fees paid to our third-party contract manufacturers, primarily in the Americas segment. Changes in foreign currency exchange rates in the EMEA segment. Sales price increases implemented in all three segments at varying times during the last 12 months. Selling, General and Administrative (“SG&A”) Expenses Fiscal Year Ended August 31, SG&A expenses % of net sales $ 2022 138,658 26.7% $ 2021 145,493 29.8% SG&A Expenses – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Change from Prior Year Dollars Percent $ (6,835) (5)% The decrease in SG&A expenses from period to period was primarily due lower employee-related costs, which decreased $11.5 million due to lower incentive compensation accruals of $15.2 million, which were partially offset by higher salary and other employee costs of $3.7 million primarily due to increased headcount and annual compensation increases. Changes in foreign currency exchange rates from period to period also resulted in a decrease of $2.0 million in SG&A expenses. These decreases to SG&A expense were partially offset by higher travel and meeting expense, which increased $3.5 million due to the reduction in travel restrictions related to COVID-19, resulting in a higher level of travel and meetings by employees. Additionally, freight costs increased $2.5 million primarily due to carrier price increases associated with supply chain constraints and limited capacity in the global distribution networks. Miscellaneous costs also increased $0.7 million from period to period. 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, 2022 and 2021 were $5.1 million and $5.6 million, respectively. 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. 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. 25 Advertising and Sales Promotion (“A&P”) Expenses A&P expenses % of net sales $ 2022 27,343 5.3% $ 2021 27,956 5.7% Change from Prior Year Dollars Percent $ (613) (2)% Fiscal Year Ended August 31, A&P Expenses – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Changes in foreign currency exchange rates had a favorable impact of $0.6 million on advertising and sales promotion expenses from period to period. On a constant currency basis, A&P expenses would have been relatively constant. As a percentage of net sales, A&P expenses may fluctuate period to period based upon the type of marketing activities we employ and the period in which the costs are incurred. Total promotional costs recorded as a reduction to sales were $28.1 million and $24.8 million for the fiscal years ended August 31, 2022 and 2021, respectively. Therefore, our total investment in A&P activities totaled $55.4 million and $52.8 million for the fiscal years ended August 31, 2022 and 2021, respectively. Income from Operations by Segment The following table summarizes income from operations by segment (in thousands, except percentages): Americas EMEA Asia-Pacific Unallocated corporate (1) Total Fiscal Year Ended August 31, Change from Prior Year 2022 2021 Dollars Percent $ 54,198 $ 51,591 $ 2,607 42,058 22,590 (31,516) 53,003 19,121 (34,874) (10,945) 3,469 3,358 $ 87,330 $ 88,841 $ (1,511) 5% (21)% 18% (10)% (2)% (1) Unallocated corporate expenses are general corporate overhead expenses not directly attributable to any one of the business segments. These expenses are reported separate from our identified segments and are included in Selling, General and Administrative expenses on our consolidated statements of operations. Americas Americas Operating Income – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Income from operations for the Americas increased to $54.2 million, up $2.6 million, or 5%, primarily due to a $25.6 million increase in sales and slightly lower operating expenses, significantly offset by a lower gross margin. Gross margin for the Americas segment decreased from 52.0% to 47.3% primarily due to increases in the costs of specialty chemicals and aerosol cans. In addition, gross margin was unfavorably impacted by increased warehousing, distribution and freight costs and higher costs at our third-party manufacturers due to supply chain constraints and inflationary impacts, as well as unfavorable changes in sales mix and higher overhead costs. These unfavorable impacts to gross margin were partially offset by the favorable impacts of price increases that were implemented during the previous 12 months. Although operating expenses decreased due to lower accrued incentive compensation, these decreases were almost entirely offset by higher outbound freight costs primarily due to higher freight rates, increased headcount and salaries, and higher travel and meeting expenses. Operating income as a percentage of net sales decreased from 24.0% to 22.6% period over period. 26 EMEA EMEA Operating Income – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Income from operations for the EMEA segment decreased to $42.1 million, down $10.9 million, or 21%, primarily due to a lower gross margin and a $3.6 million decrease in sales, partially offset by a decrease in operating expenses. Gross margin for the EMEA segment decreased from 55.6% to 49.6% primarily due to increases in the costs of specialty chemicals and aerosol cans. In addition, gross margin was also unfavorably impacted by fluctuations in exchange rates as well as increased warehousing, distribution and freight costs due to supply chain constraints and inflationary impacts. These unfavorable impacts to gross margin were partially offset by price increases that were implemented over the last twelve months. Operating expenses decreased $3.2 million primarily due to lower accrued incentive compensation, partially offset by increased headcount and salaries, higher travel and meeting expenses and higher outbound freight costs. Operating income as a percentage of net sales decreased from 25.5% to 20.5% period over period. Asia-Pacific Asia-Pacific Operating Income – Fiscal Year Ended – August 31, 2022 Compared to August 31, 2021 Income from operations for the Asia-Pacific segment increased to $22.6 million, up $3.5 million, or 18%, primarily due to a $8.6 million increase in sales, partially offset by a lower gross margin. Gross margin for the Asia-Pacific segment decreased from 55.8% to 53.6% primarily due to combined unfavorable impacts of increases to the cost of specialty chemicals and aerosol cans. These unfavorable impacts to gross margin were partially offset by price increases that were implemented during the previous 12 months. Operating income as a percentage of net sales increased from 29.3% to 30.6% period over period. Non-Operating Items The following table summarizes non-operating income and expenses for our consolidated operations (in thousands): Interest income Interest expense Other (expense) income, net Provision for income taxes Interest Income Fiscal Year Ended August 31, 2022 2021 Change $ $ $ $ 102 2,742 (582) 16,779 $ $ $ $ 81 2,395 (28) 16,270 $ $ $ $ 21 347 (554) 509 Interest income was not significant for both the fiscal years ended August 31, 2022 and 2021. Interest Expense Interest expense increased primarily due to an increased weighted average outstanding balance on our revolving credit facility and higher interest rates related to draws on this credit facility. Other (Expense) Income, Net Other (expense) income, net was $0.6 million for the fiscal year ended 2022 and was not significant for the corresponding period of the prior fiscal year. The $0.6 million change from period to period was primarily due to net foreign currency losses during fiscal year 2022 as a result of fluctuations in the foreign currency exchange rates for both the U.S. Dollar and the Euro against the Pound Sterling. Provision for Income Taxes The provision for income taxes was 19.9% of income before income taxes for the fiscal year ended August 31, 2022 compared to 18.8% for the prior fiscal year. The increase in the effective income tax rate from period to period was primarily due to an increase in non-deductible performance-based compensation expense. 27 Net Income Net income was $67.3 million, or $4.90 per common share on a fully diluted basis, for fiscal year 2022 compared to $70.2 million, or $5.09 per common share on a fully diluted basis, for the prior fiscal year. Changes in foreign currency exchange rates year over year had an unfavorable impact of $0.8 million on net income for fiscal year 2022. Thus, on a constant currency basis, net income for fiscal year 2022 would have been $68.1 million. Results of Operations Fiscal Year Ended August 31, 2021 Compared to Fiscal Year Ended August 31, 2020 For discussion related to changes in financial condition and the results of operations for fiscal year 2021 compared to fiscal year 2020, refer to Part II - Item 7. 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, 2021, which was filed with the SEC on October 22, 2021. Performance Measures and Non-GAAP Reconciliations In managing our business operations and assessing our financial performance, we supplement the information provided by our financial statements with certain non-GAAP performance measures. These performance measures are part of our current 55/30/25 business model, which includes gross margin, cost of doing business, and earnings before interest, income taxes, depreciation and amortization (“EBITDA”), the latter two of which are non-GAAP performance measures. Cost of doing business is defined as total operating expenses less amortization of definite-lived intangible assets, impairment charges related to intangible assets and depreciation in operating departments, and EBITDA is defined as net income before interest, income taxes, depreciation and amortization. We target our gross margin to be at or above 55% of net sales, our cost of doing business to be at 30% of net sales, and our EBITDA to be at or above 25% of net sales. Results for these performance measures may vary from period to period depending on various factors, including economic conditions and our level of investment in activities for the future such as those related to quality assurance, regulatory compliance, and intellectual property protection in order to safeguard our WD-40 brand. Our financial results and operations continue to be impacted by increased global supply chain constraints and an inflationary environment, both of which have significantly lowered our gross margin percentage over the last twelve months and moved us well below our target of 55%. Although we have been implementing strategic sales price increases across all segments at varying times in response to increased costs, it will take time before the full impact of these sales price increases are reflected in our reported results. In addition, it is difficult to determine how long these supply chain and inflationary conditions will exist and if they will worsen or improve over time. However, the targets for gross margin and these other performance measures are long-term in nature and we expect to make progress towards achieving 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”. The following table summarizes the results of these performance measures: Gross margin - GAAP Cost of doing business as a percentage of net sales - non-GAAP EBITDA as a percentage of net sales - non-GAAP (1) Fiscal Year Ended August 31, 2022 2021 2020 49% 31% 18% 54% 35% 20% 55% 34% 21% (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. We use the performance measures above to establish financial goals and to gain an understanding of our comparative performance from period to period. We believe that these measures provide our shareholders with additional insights into how we run our business. We believe these measures also provide investors with additional financial information that should be considered when assessing our underlying business performance and trends. These non-GAAP financial measures are supplemental in nature and should not be considered in isolation or as alternatives to net income, income from operations or other financial information prepared in accordance with GAAP as indicators of our performance or operations. The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies. 28 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): Total operating expenses - GAAP Amortization of definite-lived intangible assets Depreciation (in operating departments) Cost of doing business - non-GAAP Net sales Cost of doing business as a percentage of net sales - non-GAAP EBITDA (in thousands, except percentages): Net income - GAAP Provision for income taxes Interest income Interest expense Amortization of definite-lived intangible assets Depreciation EBITDA Net sales EBITDA as a percentage of net sales - non-GAAP Liquidity and Capital Resources Overview $ $ $ $ $ $ 2022 167,435 (1,434) (4,369) 161,632 518,820 31% $ Fiscal Year Ended August 31, 2021 174,898 (1,449) (4,311) 169,138 488,109 35% $ $ 2022 Fiscal Year Ended August 31, 2021 67,329 16,779 (102) 2,742 1,434 6,860 95,042 518,820 18% $ $ $ 70,229 16,270 (81) 2,395 1,449 5,570 95,832 488,109 20% $ $ $ $ $ $ 2020 145,797 (2,211) (4,095) 139,491 408,498 34% 2020 60,710 14,805 (93) 2,439 2,211 5,490 85,562 408,498 21% Our financial condition and liquidity remain strong. Although there continues to be uncertainty related to the ongoing and anticipated impact of the current COVID-19 pandemic on our future results, we believe our efficient business model and the steps that we have taken position us to manage our business through the situation as it continues to develop. We continue to manage all aspects of our business including, but not limited to, monitoring our liquidity, the financial health of our customers, suppliers and other third-party relationships, implementing gross margin enhancement strategies and developing new opportunities for growth Our principal sources of liquidity are cash generated from operations and cash currently available from our existing unsecured revolving credit facility under the Credit Agreement with Bank of America. We use proceeds of the revolving credit facility primarily for our general working capital needs. We also hold borrowings under the Note Agreement. 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 Pound Sterling in the EMEA segment. Euro and Pound Sterling denominated draws will fluctuate in U.S. Dollars from period to period due to changes in foreign currency exchange rates. We regularly convert many of our draws on our line of credit to new draws with new maturity dates and interest rates. We have the ability to refinance any draws under the line of credit with successive short-term borrowings through the 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. As of August 31, 2022, $39.5 million of the outstanding balance under our line of credit resides in the EMEA segment and is denominated in Euros and Pound Sterling and classified long-term, whereas $38.4 million is denominated in U.S. Dollar and classified as short-term. In the United States, we held $68.4 million in fixed rate long- term borrowings as of August 31, 2022, consisting of senior notes under our Note Agreement. We paid $0.8 million in principal payments on our Series A Notes during fiscal year 2022. There were no other letters of credit outstanding or restrictions on the 29 amount available on our line of credit or notes. Per the terms of both the Note Agreement and the Credit Agreement, our consolidated leverage ratio cannot be greater than three and a half to one and our consolidated interest coverage ratio cannot be less than three to one. See Note 8 – Debt for additional information on these financial covenants. At August 31, 2022, 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, 2022, we had a total of $37.8 million in cash and cash equivalents. We do not foresee any ongoing issues with repaying our borrowings and we closely monitor the use of this credit facility. We believe that our future cash from domestic and international operations, together with our access to funds available under our unsecured revolving credit facility, will provide adequate resources to fund short-term and long-term operating requirements, capital expenditures, dividend payments, acquisitions, new business development activities and share repurchases. On October 12, 2021, our Board of Directors approved a new share repurchase plan. Under the plan, which became effective on November 1, 2021, we are authorized to acquire up to $75.0 million of our outstanding shares through August 31, 2023, of which $45.8 million remains available for the repurchase of common shares as of August 31, 2022. Cash Flows The following table summarizes our cash flows by category for the periods presented (in thousands): Net cash provided by operating activities Net cash used in investing activities Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Operating Activities Fiscal Year Ended August 31, 2022 2,604 (7,691) (38,011) (5,020) (48,118) $ $ 2021 84,714 (14,460) (40,749) (6) 29,499 $ $ 2020 72,664 (18,945) (26,709) 2,219 29,229 $ $ Net cash provided by operating activities decreased $82.1 million to $2.6 million for fiscal year 2022. 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, 2022 was net income of $67.3 million, which decreased $2.9 million from period to period. Changes in our working capital significantly decreased net cash provided by operating activities, primarily due to increases in inventory, most significantly in the Americas segment but also in the EMEA segment. This increase in inventory was due to actions we took to stock certain raw materials and finished goods to increase the flexibility and capacity within our supply chain, as well as the higher carrying value of inventory due to higher raw material costs and other input costs from period to period. Net cash provided by operating activities was further decreased due to higher earned incentive payouts in the first quarter of fiscal year 2022 compared to the same period of the prior fiscal year as well as lower level of earned incentive accruals from period to period. Additionally, net cash provided by operating activities decreased from period to period due to lower increases in accounts payable and accrued liabilities, as well as increases in other assets primarily due to capitalized costs related to the new cloud-based ERP system which we are currently implementing. Investing Activities Net cash used in investing activities decreased $6.8 million to $7.7 million for fiscal year 2022, primarily due to a lower level of manufacturing-related capital expenditures within the United States and the United Kingdom. Some of this manufacturing equipment is still under construction and will be located at our third-party manufacturers in the United States and the United Kingdom once completed. Financing Activities Net cash used in financing activities decreased $2.8 million to $38.0 million for fiscal year 2022. This change was primarily due to the resumption of treasury stock purchases in November 2021, resulting in increased treasury stock purchases of $29.2 million. In addition, increases in dividends paid to our shareholders of $3.8 million and increases in shares withheld to cover taxes on conversion of equity rewards of $0.8 million resulted in higher cash outflows from period to period. These increases in cash outflows from period to period were significantly offset by $36.4 million in higher proceeds provided by the Company’s debt agreements, primarily due to $38.4 million in proceeds from our line of credit in fiscal year 2022. In fiscal year 2021, we repaid $50.0 million of borrowings outstanding under our line of credit using $52.0 million in proceeds that we received from the issuance and sale of senior notes. This net borrowing activity resulted in a $2.0 million cash inflow during fiscal year 2021 related to our debt agreements compared to the $38.4 million in net proceeds during fiscal year 2022. 30 Effect of Exchange Rate Changes All of our foreign subsidiaries currently operate in currencies other than the U.S. Dollar and a significant portion of our consolidated cash balance is denominated in these foreign functional currencies, particularly at our U.K. subsidiary which operates in Pound 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. The net effect of exchange rate changes on cash and cash equivalents, when expressed in U.S. Dollar terms was a decrease in cash of $5.0 million in fiscal year 2022, while such changes were not significant in fiscal year 2021 and resulted in an increase in cash of $2.2 million for fiscal year 2020. These changes were primarily due to fluctuations in various foreign currency exchange rates from period to period, but the majority is related to the fluctuations in the Pound Sterling against the U.S. Dollar. Cash Flows Fiscal Year Ended August 31, 2021 Compared to Fiscal Year Ended August 31, 2020 For discussion related to changes in the consolidated statements of cash flows for fiscal year 2021 compared to fiscal year 2020, refer to Part II - Item 7. 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, 2021, which was filed with the SEC on October 22, 2021. 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. In December 2021, the Board of Directors declared an 8% increase in the regular quarterly cash dividend, increasing it from $0.72 per share to $0.78 per share. On October 11, 2022, our Board of Directors declared a cash dividend of $0.78 per share payable on October 31, 2022 to shareholders of record on October 21, 2022. Our ability to pay dividends could be affected by future business performance, liquidity, capital needs, alternative investment opportunities and loan covenants. Contractual Obligations We hold borrowings under our Note Purchase and Private Shelf Agreement with fixed repayment requirements and under a Revolving Credit Facility that has variable underlying interest rates. For additional details on these borrowings, including ability and intent assessment on our credit facility agreement with Bank of America, refer to the information set forth in Part IV—Item 15, “Exhibits, Financial Statement Schedules”, Note 8 – Debt. Additionally, we have ongoing relationships with various third-party suppliers (contract manufacturers) that manufacture our products and third-party distribution centers which warehouse and ship our products to customers. The contract manufacturers maintain title and control of certain raw materials and components, materials utilized in finished products, and of the finished products themselves until shipment to our customers or third-party distribution centers in accordance with agreed upon shipment terms. Although we have definitive minimum purchase obligations in the contract terms with certain of our contract manufacturers, when such obligations have been included, they have either been immaterial or the minimum amounts have been such that they are well below the volume of goods that we have historically purchased. In addition, in the ordinary course of business, we communicate supply needs to our contract manufacturers based on orders and short-term projections, ranging from two to six months. We are committed to purchase the products produced by the contract manufacturers based on the projections provided. Upon the termination of contracts with contract manufacturers, we obtain certain inventory control rights and are obligated to work with the contract manufacturer to sell through all product held by or manufactured by the contract manufacturer on our behalf during the termination notification period. If any inventory remains at the contract manufacturer at the termination date, we are obligated to purchase such inventory which may include raw materials, components and finished goods. The amounts for inventory purchased under termination commitments have been immaterial. 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, 2022, no such commitments were outstanding. At August 31, 2022, the liability recorded for uncertain tax positions, excluding associated interest and penalties, was approximately $9.3 million. For additional details on our uncertain tax positions, refer to the information set forth in Part IV— Item 15, “Exhibits, Financial Statement Schedules” Note 13 – Income Taxes. We have estimated that up to $0.2 million of 31 unrecognized tax benefits related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months. Critical Accounting Policies and Estimates Our results of operations and financial condition, as reflected in our consolidated financial statements, have been prepared in accordance with accounting principles generally accepted in the United States of America. Preparation of financial statements requires us to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities. We use historical experience and other relevant factors when developing estimates and assumptions and these estimates and assumptions are continually evaluated. 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. Our financial results may have varied from those reported had different assumptions been used or other conditions prevailed. 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. For certain of our sales we must make judgments and certain assumptions in order to determine when delivery has occurred. Through an analysis of end-of-period shipments for these particular sales, we determine an average time of transit of product to our customers, and this is used to estimate the time of delivery and whether revenue should be recognized during the current reporting period for such shipments. 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. Sales are recorded net of allowances for damaged goods and other sales returns, sales incentives, trade promotions and cash discounts. We apply a five-step approach in determining the amount and timing of revenue to be recognized which includes the following: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. In determining the transaction price, management evaluates whether the price is subject to refund or adjustment related to variable consideration to determine the net consideration to which we expect to be entitled. We record estimates of variable consideration, which primarily includes rebates/other discounts (cooperative marketing programs, volume-based discounts, shelf price reductions and allowances for shelf space, charges from customers for services they provided to us related to the sale and penalties/fines charged to us by our customers for failing to adhere to contractual obligations), coupon offers, cash discount allowances, and sales returns, as a reduction of sales in the consolidated statements of operations. These estimates are based on the expected value method considering all reasonably available information, including current and past trade promotion spending patterns, status of trade promotion activities and the interpretation of historical spending trends by customer and category, customer agreements and/or currently known factors that arise in the normal course of business. 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, 2022 were to differ by 10%, the impact on net sales would be approximately $1.0 million. 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. Based on changes in the related tax law as well as forecasted results, a valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition to valuation allowances, we provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the authoritative guidance on income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. We recognize accrued interest and penalties related to uncertain tax positions as a component of income tax expense. We are required to make assertions on whether our foreign subsidiaries will invest their undistributed earnings indefinitely and these assertions are based on the capital needs of the foreign subsidiaries. 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. For additional 32 information on income tax matters, see Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 13 — Income Taxes, included in this report. Recently Issued Accounting Standards Information on Recently Issued Accounting Standards that could potentially impact our consolidated financial statements and related disclosures is incorporated by reference to Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 2 — Basis of Presentation and Summary of Significant Accounting Policies, included in this report. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Foreign Currency Risk We are exposed to a variety of risks, including foreign currency exchange rate fluctuations. In the normal course of business, we employ established policies and procedures to manage our exposure to fluctuations in foreign currency values. All of our international subsidiaries operate in functional currencies other than the U.S. Dollar. As a result, we are exposed to foreign currency related risk when the financial statements of our international subsidiaries are translated for consolidation purposes from functional currencies to U.S. Dollars. This foreign currency risk can affect sales, expenses and profits as well as assets and liabilities that are denominated in currencies other than the U.S. Dollar. We do not enter into any hedging activities to mitigate this foreign currency translation risk. Our U.K. subsidiary, whose functional currency is Pound 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. While we engage in foreign currency hedging activity to reduce our risk, for accounting purposes, none of our foreign currency forward contracts are designated as hedges. Commodity Price Risk Specialty chemicals and aerosol cans constitute a significant portion of the cost of many of our maintenance products. Volatility in the price of oil directly impacts the cost of specialty chemicals which are indexed to the price of crude oil. If there are significant increases in the costs of crude oil, our gross margins and operating results will be negatively impacted. 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. Interest Rate Risk As of August 31, 2022, we had a $77.9 million outstanding balance on our existing $150.0 million revolving credit facility agreement with Bank of America. 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. dollars or in foreign currencies from time to time until September 30, 2025. In addition, we had $68.4 million in fixed rate borrowings consisting of senior notes under our note purchase agreements as of August 31, 2022. For additional details on our long-term borrowings as of August 31, 2022, 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. Dollar borrowings) • Sterling Overnight Index Average Reference Rate (British Pound Sterling borrowings) • Euro Interbank Offered Rate (Euro borrowings) Any significant increase in these rates could have a material effect on interest expense incurred on any borrowings outstanding under the credit facility. Item 8. Financial Statements and Supplementary Data Our consolidated financial statements at August 31, 2022 and 2021 and for each of the three fiscal years in the period ended August 31, 2022, and the Report of Independent Registered Public Accounting Firm, are included in Item 15 of this report. 33 Quarterly Financial Data (Unaudited) Pursuant to amendments in SEC Release No. 33-10890, we have omitted historical quarterly financial data for our business over the last two fiscal year periods as there has not been any retrospective change to the information previously reported. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). The term disclosure controls and procedures means controls and other procedures of a Company that are designed to ensure the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures as of August 31, 2022, the end of the period covered by this report (the Evaluation Date), and they have concluded that, as of the Evaluation Date, such controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in the Company’s reports filed under the Exchange Act. Although management believes the Company’s existing disclosure controls and procedures are adequate to enable the Company to comply with its disclosure obligations, management continues to review and update such controls and procedures. The Company has a disclosure committee, which consists of certain members of the Company’s senior management. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of its internal control over financial reporting based upon the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on that evaluation, management concluded that its internal control over financial reporting is effective as of August 31, 2022. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. PricewaterhouseCoopers LLP, independent registered public accounting firm, who audited and reported on the consolidated financial statements of WD-40 Company included in Item 15 of this report, has audited the effectiveness of WD-40 Company’s internal control over financial reporting as of August 31, 2022, as stated in their report included in Item 15 of this report. Changes in Internal Control over Financial Reporting There were no changes to the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter ended August 31, 2022, that materially affected, or would be reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 34 Item 10. Directors, Executive Officers and Corporate Governance PART III Certain information required by this item is set forth in sections under the headings “Security Ownership of Certain Beneficial Owners and Management,” “Director Nominees,” and “Related Party Transactions Review and Oversight” in our Proxy Statement to be filed with the Securities and Exchange Commission in connection with the 2022 Annual Meeting of Stockholders on December 13, 2022 (“Proxy Statement”), which information is incorporated by reference herein. Information regarding executive officers is also incorporated by reference to the “Information Regarding our Executive Officers” section of our Proxy Statement. The Registrant has a code of ethics (as defined in Item 406 of Regulation S-K under the Exchange Act) applicable to its principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions. The code of ethics is represented by the Registrant’s Code of Conduct applicable to all employees and directors. A copy of the Code of Conduct may be found on the Registrant’s internet website on the Corporate Governance link from the Investors page at www.wd40company.com. Item 11. Executive Compensation Information required by this item is incorporated by reference to sections of the Proxy Statement under the headings “Director Compensation” (and the table following such section), “Compensation Committee - Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation” (and the compensation tables following such section), “Supplemental Death Benefit Plans and Supplemental Insurance Benefits,” “Change of Control Severance Agreements” and “CEO Pay Ratio.” Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain information required by this item is incorporated by reference to the Proxy Statement under the heading “Security Ownership of Certain Beneficial Owners and Management.” Equity Compensation Plan Information The following table provides information regarding shares of our common stock authorized for issuance under equity compensation plans as of August 31, 2022: Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) 136,937 (1) $ n/a 136,937 (1) $ - n/a - 384,859 n/a 384,859 Plan category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders (1) Includes 78,604 securities to be issued pursuant to outstanding restricted stock units; 37,201 securities to be issued pursuant to outstanding market share units (“MSUs”) based on 100% of the target number of MSU shares to be issued upon achievement of the applicable performance measure specified for such MSUs; 3,306 securities to be issued pursuant to outstanding deferred performance units (“DPUs”); and 17,826 securities to be issued pursuant to outstanding performance share units (“PSUs”) based on 100% of the maximum number of PSU shares to be issued upon achievement of the applicable performance measure specified for such PSUs. 35 Item 13. Certain Relationships and Related Transactions, and Director Independence Information required by this item is incorporated by reference to the Proxy Statement under the headings “Director Independence” and “Audit Committee - Related Party Transactions Review and Oversight.” Item 14. Principal Accountant Fees and Services Information required by this item is incorporated by reference to the Proxy Statement under the heading “Ratification of Appointment of Independent Registered Public Accounting Firm.” 36 PART IV Item 15. Exhibits, Financial Statement Schedules (a) Documents filed as part of this report (1) Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Statements of Shareholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Page F-1 F-3 F-4 F-5 F-6 F-7 F-8 (2) Financial statement schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. (3) Exhibits Exhibit No. Description Articles of Incorporation and Bylaws. 3(a) Certificate of Incorporation, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2018, Exhibit 3(a) thereto. 3(b) Amended and Restated Bylaws of WD-40 Company, incorporated by reference from the Registrant’s Form 8-K filed August 16, 2018, Exhibit 3.1 thereto. Material Contracts. Executive Compensation Plans and Arrangements (Exhibits 10(a) through 10(s) are management contracts and compensatory plans or arrangements required to be filed as exhibits pursuant to Item 15(b)). 10(a) WD-40 Company 2016 Stock Incentive Plan, incorporated by reference from the Registrant’s Proxy Statement filed November 3, 2016, Appendix A thereto. 10(b) WD-40 Directors’ Compensation Policy and Election Plan dated October 12, 2021, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2021, Exhibit 10(b) thereto. 10(c) 10(d) 10(e) 10(f) 10(g) 10(h) 10(i) 10(j) 10(k) Form of Indemnity Agreement between the Registrant and its executive officers and directors, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2013, Exhibit 10(d) thereto. Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2020, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(d) thereto. Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 2020, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(e) thereto. Form of Deferred Performance Unit Award Agreement for grants of Deferred Performance Units to Executive Officers incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(f) thereto. Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2021, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(g) thereto. Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 2021 incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(h) thereto. Form of Performance Share Unit Restricted Stock Award Agreement for grants of Performance Share Units to Executive Officers in fiscal year 2021, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2020, Exhibit 10(i) thereto. Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2022, , incorporated by reference from the Registrant’s Form 10-K filed October 22, 2021, Exhibit 10(j) thereto. Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 2022, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2021, Exhibit 10(k) thereto. 37 10(l) 10(m) 10(n) 10(o) 10(p) 10(q) Form of Performance Share Unit Restricted Stock Award Agreement for grants of Performance Share Units to Executive Officers in fiscal year 2022, incorporated by reference from the Registrant’s Form 10-K filed October 22, 2021, Exhibit 10(l) thereto. Transition and Release Agreement, dated March 11, 2022, between WD-40 Company and Garry O. Ridge, incorporated by reference from the Registrant’s Form 8-K filed March 16, 2022, Exhibit 10.1 thereto. FY 2022 Restricted Stock Unit Award Agreement, dated March 11, 2022, between WD-40 Company and Garry O. Ridge, incorporated by reference from the Registrant’s Form 8-K filed March 16, 2022, Exhibit 10.2 thereto. Form of Restricted Stock Unit Agreement for grants of Restricted Stock Units to Executive Officers in fiscal year 2023. Form of Market Share Unit Award Agreement for grants of Market Share Units to Executive Officers in fiscal year 2023. Form of Performance Share Unit Restricted Stock Award Agreement for grants of Performance Share Units to Executive Officers in fiscal year 2023. 10(r) WD-40 Company 2017 Performance Incentive Compensation Plan, incorporated by reference from the Registrant’s Proxy Statement filed November 2, 2017, Appendix A thereto. 10(s) 10(t) 10(u) 10(v) 10(w) Form of WD-40 Company Supplemental Death Benefit Plan applicable to certain executive officers of the Registrant, incorporated by reference from the Registrant’s Form 10-K filed October 24, 2016, Exhibit 10(i) thereto. Change of Control Severance Agreement between WD-40 Company and Jay W. Rembolt dated October 16, 2008, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2014, Exhibit 10(h) thereto. Change of Control Severance Agreement between WD-40 Company and Richard T. Clampitt dated October 15, 2014, incorporated by reference from the Registrant’s Form 10-K filed October 21, 2014, Exhibit 10(i) thereto. Change of Control Severance Agreement between WD-40 Company and Garry O. Ridge dated February 14, 2006, incorporated by reference from the Registrant’s Form 10-K filed October 23, 2017, Exhibit 10(p) thereto. Change of Control Severance Agreement between WD-40 Company and Geoffrey J. Holdsworth dated February 14, 2006, incorporated by reference from the Registrant’s Form 10-K filed October 23, 2017, Exhibit 10(r) thereto. 10(x) Change of Control Severance Agreement between WD-40 Company and William B. Noble dated February 14, 2006, incorporated by reference from the Registrant’s Form 10-K filed October 23, 2017, Exhibit 10(s) thereto. 10(y) 10(z) 10(aa) 10(ab) 10(ac) 10(ad) 10(ae) 10(af) 10(ag) 10(ah) Change of Control Severance Agreement between WD-40 Company and Steven Brass dated June 22, 2016, incorporated by reference from the Registrant’s Form 10-Q filed January 9, 2017, Exhibit 10(c) thereto. Change of Control Severance Agreement between WD-40 Company and Patricia Q. Olsem dated October 8, 2019, incorporated by reference from the Registrant’s Form 10-Q filed January 9, 2020, Exhibit 10(a) thereto. Change of Control Severance Agreement between WD-40 Company and Jeffrey G. Lindeman dated December 8, 2020 incorporated by reference from the Registrant's Form 10-Q filed April 8, 2021, Exhibit 10(e) thereto. Change of Control Severance Agreement between WD-40 Company and Phenix Q. Kiamilev dated December 13, 2021, incorporated by reference from the Registrant’s Form 10-Q filed April 7, 2022, Exhibit 10(b) thereto. Credit Agreement dated March 16, 2020 among WD-40 Company and Bank of America, incorporated by reference from the Registrant’s Form 8-K filed March 20, 2020, Exhibit 10(a) thereto. Form of Acknowledgement Letter Agreement dated April 8, 2020 among WD-40 Company and Bank of America, incorporated by reference from the Registrant’s Form 10-Q filed April 9, 2020, Exhibit 10(d) thereto. Libor Transition Agreement dated November 29, 2021 among the Company and Bank of America, N.A., incorporated by reference from the Registrant's Form 8-K filed December 1, 2021, Exhibit 10(a) thereto. First Amendment to Credit Agreement dated September 30, 2020 among WD-40 Company and Bank of America, N.A., incorporated by reference from the Registrant’s Form 8-K filed October 6, 2020, Exhibit 10(a) thereto. Note Purchase and Private Shelf Agreement dated November 15, 2017 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 8-K filed November 17, 2017, Exhibit 10(a) thereto. First Amendment to Note Purchase Agreement dated February 23, 2018 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 8-K filed February 27, 2018, Exhibit 10(b) thereto. 38 10(ai) 10(aj) 10(ak) 10(al) 10(am) 21 23 Second Amendment to Note Purchase and Private Shelf Agreement dated March 16, 2020 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 8-K filed March 20, 2020, Exhibit 10(b) thereto. Form of Limited Consent Letter Agreement dated April 8, 2020 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 10-Q filed April 9, 2020, Exhibit 10(e) thereto. Third Amendment to Note Purchase and Private Shelf Agreement dated September 30, 2020 among WD-40 Company and Prudential and certain Note Purchasers, incorporated by reference from the Registrant’s Form 8-K filed October 6, 2020, Exhibit 10(e) thereto. Series B Senior Notes dated September 30, 2020, incorporated by reference from the Registrant’s Form 8-K filed October 6, 2020, Exhibit 10(f) thereto. Series C Senior Notes dated September 30, 2020, incorporated by reference from the Registrant’s Form 8-K filed October 6, 2020, Exhibit 10(g) thereto. Subsidiaries of the Registrant. Consent of Independent Registered Public Accounting Firm dated October 24, 2022. 31(a) Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31(b) Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32(a) Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32(b) Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101 104 The following materials from WD-40 Company’s Annual report on Form 10-K for the fiscal year ended August 31, 2022 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (ii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Balance Sheet, (v) the Consolidated Statements of Shareholders’ Equity, and (vi) Notes to the Consolidated Financial Statements. The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2022, formatted in iXBRL and contained in Exhibit 101. Item 16. Form 10-K Summary Not applicable. 39 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES WD-40 COMPANY Registrant /s/ JAY W. REMBOLT JAY W. REMBOLT Vice President, Finance Treasurer and Chief Financial Officer (Principal Financial Officer) Date: October 24, 2022 /s/ RAE ANN PARTLO RAE ANN PARTLO Vice President and Corporate Controller (Principal Accounting Officer) Date: October 24, 2022 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ DANIEL T. CARTER DANIEL T. CARTER, Director Date: October 24, 2022 /s/ MELISSA CLAASSEN MELISSA CLAASSEN, Director Date: October 24, 2022 /s/ ERIC P. ETCHART ERIC P. ETCHART, Director Date: October 24, 2022 /s/ LARA L. LEE LARA L. LEE, Director Date: October 24, 2022 /s/ EDWARD O. MAGEE, JR. EDWARD O. MAGEE, JR., Director Date: October 24, 2022 /s/ TREVOR I. MIHALIK TREVOR I. MIHALIK, Director Date: October 24, 2022 /s/ STEVEN A. BRASS STEVEN A. BRASS Chief Executive Officer and Director (Principal Executive Officer) Date: October 24, 2022 /s/ GRACIELA I. MONTEAGUDO GRACIELA I. MONTEAGUDO, Director Date: October 24, 2022 /s/ DAVID B. PENDARVIS DAVID B. PENDARVIS, Director Date: October 24, 2022 /s/ GARRY O. RIDGE GARRY O. RIDGE, Director Date: October 24, 2022 /s/ GREGORY A. SANDFORT GREGORY A. SANDFORT, Director Date: October 24, 2022 /s/ ANNE G. SAUNDERS ANNE G. SAUNDERS, Director Date: October 24, 2022 40 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of WD-40 Company Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of WD-40 Company and its subsidiaries (the “Company”) as of August 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended August 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of August 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of August 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended August 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. F-1 Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Rebates – Certain Cooperative Marketing Program Accruals As described in Notes 2 and 11 to the consolidated financial statements, sales are recorded net of allowances for damaged goods and other sales returns, sales incentives, trade promotions and cash discounts. In determining the transaction price, management evaluates whether the price is subject to refund or adjustment related to variable consideration to determine the net consideration to which the Company expects to be entitled. Management records estimates of variable consideration, which primarily includes rebates/other discounts (cooperative marketing programs, volume-based discounts, shelf price reductions and allowances for shelf space, charges from customers for services they provide to the Company related to the sale and penalties/fines charged to the Company by customers associated with failing to adhere to contractual obligations), coupon offers, cash discount allowances, and sales returns, as a reduction of sales in its consolidated statements of operations. These estimates are based on the expected value method considering all reasonably available information, including current and past trade promotion spending patterns, status of trade promotion activities, the interpretation of historical spending trends by customer and category, customer agreements and/or currently known factors that arise in the normal course of business. Management reviews its assumptions and adjusts these estimates accordingly on a quarterly basis. The Company had an $8.7 million balance in rebate/other discount liabilities as of August 31, 2022, which are included in accrued liabilities on the Company’s consolidated balance sheets, and recorded approximately $32.8 million in rebates/other discounts as a reduction to sales during fiscal year 2022. The principal considerations for our determination that performing procedures relating to certain cooperative marketing program accruals is a critical audit matter are (i) the significant judgment by management to estimate certain cooperative marketing program accruals, which in turn led to a high degree of auditor judgment in performing procedures to evaluate the status of trade promotion activities within certain cooperative marketing program accruals, and (ii) the high level of audit effort and subjectivity in performing procedures to evaluate the current and past trade promotion spending patterns and the status of trade promotion activities used to determine certain cooperative marketing program accruals. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the estimation of cooperative marketing program accruals, which related to controls over the current and past trade promotion spending patterns and the status of trade promotion activities used in management’s estimate. These procedures also included, among others, (i) testing management’s process to estimate certain cooperative marketing program accruals, including evaluating the appropriateness of the expected value method, testing the completeness, accuracy and relevance of underlying data used, including the current and past trade promotion spending patterns, and evaluating the reasonableness of the status of the trade promotion activities assumption considering the overall business environment, and (ii) evaluating the completeness of offers made to customers for potential promotional activities, which may require accrual as of period end. /s/ PricewaterhouseCoopers LLP San Diego, California October 24, 2022 We have served as the Company’s auditor since at least 1972. We have not been able to determine the specific year we began serving as auditor of the Company. F-2 WD-40 COMPANY CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) Assets Current assets: Cash and cash equivalents Trade and other accounts receivable, less allowance for doubtful accounts of $292 and $463 at August 31, 2022 and 2021, respectively Inventories Other current assets Total current assets Property and equipment, net Goodwill Other intangible assets, net Operating lease right-of-use assets Deferred tax assets, net Other assets Total assets Liabilities and Shareholders' Equity Current liabilities: Accounts payable Accrued liabilities Accrued payroll and related expenses Short-term borrowings Income taxes payable Total current liabilities Long-term borrowings Deferred tax liabilities, net Long-term operating lease liabilities Other long-term liabilities Total liabilities Commitments and Contingencies (Note 12) Shareholders' equity: Common stock ― authorized 36,000,000 shares, $0.001 par value; 19,888,807 and 19,856,865 shares issued at August 31, 2022 and 2021, respectively; and 13,602,346 and 13,708,966 shares outstanding at August 31, 2022 and 2021, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Common stock held in treasury, at cost ― 6,286,461 and 6,147,899 shares at August 31, 2022 and 2021, respectively Total shareholders' equity Total liabilities and shareholders' equity August 31, 2022 August 31, 2021 $ 37,843 $ 85,961 $ $ 89,930 104,101 17,766 249,640 65,977 95,180 5,588 7,559 679 9,672 434,295 32,852 27,161 11,583 39,173 51 110,820 107,139 10,528 5,999 11,185 245,671 20 165,973 456,076 (36,209) $ $ 89,558 55,752 9,948 241,219 70,145 95,869 7,244 8,824 858 6,044 430,203 33,499 25,658 25,662 800 317 85,936 114,940 10,401 7,062 11,482 229,821 20 163,737 430,735 (26,030) (397,236) 188,624 434,295 $ (368,080) 200,382 430,203 $ See accompanying notes to consolidated financial statements. F-3 WD-40 COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Fiscal Year Ended August 31, 2022 2021 2020 $ 518,820 264,055 254,765 $ 488,109 224,370 263,739 $ 408,498 185,481 223,017 Net sales Cost of products sold Gross profit Operating expenses: Selling, general and administrative Advertising and sales promotion Amortization of definite-lived intangible assets Total operating expenses 138,658 27,343 1,434 167,435 145,493 27,956 1,449 174,898 121,980 21,606 2,211 145,797 Income from operations 87,330 88,841 77,220 Other income (expense): Interest income Interest expense Other (expense) income, net Income before income taxes Provision for income taxes Net income Earnings per common share: Basic Diluted Shares used in per share calculations: Basic Diluted 102 (2,742) (582) 84,108 16,779 67,329 4.91 4.90 13,668 13,696 $ $ $ 81 (2,395) (28) 86,499 16,270 70,229 5.11 5.09 13,698 13,733 $ $ $ 93 (2,439) 641 75,515 14,805 60,710 4.41 4.40 13,691 13,719 $ $ $ See accompanying notes to consolidated financial statements. F-4 WD-40 COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Fiscal Year Ended August 31, 2022 2021 2020 Net income Other comprehensive income (loss): Foreign currency translation adjustment Total comprehensive income $ $ 67,329 $ 70,229 $ 60,710 (10,179) 57,150 $ 2,178 72,407 $ 4,274 64,984 See accompanying notes to consolidated financial statements. F-5 WD-40 COMPANY CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands, except share and per share amounts) Common Stock Shares 19,773,977 $ Amount Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) 20 $ 155,132 $ 374,060 $ (32,482) Total Treasury Stock Shareholders' Shares 6,055,316 $ Amount Equity (351,255) $ 145,475 Balance at August 31, 2019 Issuance of common stock under share-based compensation plan, net of shares withheld for taxes 38,708 Stock-based compensation Cash dividends ($2.62 per share) Repurchases of common stock Foreign currency translation adjustment Net income (2,640) 5,358 (36,039) 60,710 92,583 (16,825) 4,274 Balance at August 31, 2020 19,812,685 $ 20 $ 157,850 $ 398,731 $ (28,208) 6,147,899 $ (368,080) $ Issuance of common stock under share-based compensation plan, net of shares withheld for taxes 44,180 Stock-based compensation Cash dividends ($2.78 per share) Foreign currency translation adjustment Net income (3,668) 9,555 (38,225) 70,229 2,178 Balance at August 31, 2021 19,856,865 $ 20 $ 163,737 $ 430,735 $ (26,030) 6,147,899 $ (368,080) $ Issuance of common stock under share-based compensation plan, net of shares withheld for taxes 31,942 Stock-based compensation Cash dividends ($3.06 per share) Repurchases of common stock Foreign currency translation adjustment Net income (4,461) 6,697 (41,988) 67,329 138,562 (29,156) (10,179) Balance at August 31, 2022 19,888,807 $ 20 $ 165,973 $ 456,076 $ (36,209) 6,286,461 $ (397,236) $ (2,640) 5,358 (36,039) (16,825) 4,274 60,710 160,313 (3,668) 9,555 (38,225) 2,178 70,229 200,382 (4,461) 6,697 (41,988) (29,156) (10,179) 67,329 188,624 See accompanying notes to consolidated financial statements. F-6 WD-40 COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Net gains on sales and disposals of property and equipment Deferred income taxes Stock-based compensation Unrealized foreign currency exchange losses (gains), net Provision for bad debts Changes in assets and liabilities: Trade and other accounts receivable Inventories Other assets Operating lease assets and liabilities, net Accounts payable and accrued liabilities Accrued payroll and related expenses Other long-term liabilities and income taxes payable Net cash provided by operating activities Investing activities: Purchases of property and equipment Proceeds from sales of property and equipment Net cash used in investing activities Financing activities: Treasury stock purchases Dividends paid Proceeds from issuance of long-term senior notes Repayments of long-term senior notes Net proceeds (repayments) from revolving credit facility Shares withheld to cover taxes upon conversion of equity awards Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental cash flow information: Accrued capital expenditures Cash paid for: Interest Income taxes, net of tax refunds received Fiscal Year Ended August 31, 2022 2021 2020 $ 67,329 $ 70,229 $ 60,710 8,294 (311) 596 6,697 1,035 143 (7,443) (52,665) (12,578) (32) 5,208 (13,133) (536) 2,604 (8,303) 612 (7,691) (29,156) (41,988) - (800) 38,394 (4,461) (38,011) (5,020) (48,118) 85,961 37,843 960 2,687 18,345 $ $ $ $ $ $ 7,019 (249) (1,334) 9,555 (511) 210 (6,595) (13,774) (5,343) 15 15,485 10,702 (695) 84,714 (15,059) 599 (14,460) - (38,225) 52,000 (800) (50,056) (3,668) (40,749) (6) 29,499 56,462 85,961 1,123 2,319 19,254 $ $ $ 7,701 (124) (509) 5,358 265 134 (4,499) 555 232 233 2,725 (1,042) 925 72,664 (19,307) 362 (18,945) (16,825) (36,039) - (800) 29,595 (2,640) (26,709) 2,219 29,229 27,233 56,462 1,764 2,259 12,569 See accompanying notes to consolidated financial statements. F-7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. The Company WD-40 Company (the “Company”), incorporated in Delaware and based in San Diego, California, is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world. The Company owns a wide range of well-known brands that include maintenance products and homecare and cleaning products: WD-40® Multi-Use Product, WD-40 Specialist®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava® and Solvol®. The Company’s products are sold in various locations around the world. Maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, the Middle East and Africa. Homecare and cleaning products are sold primarily in North America, the United Kingdom (“U.K.”) and Australia. The Company’s products are sold 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. Note 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. COVID-19 Considerations The COVID-19 pandemic has adversely impacted global economic conditions and has contributed to significant volatility in financial markets beginning in early calendar year 2020. Although the Company’s current estimates consider current conditions, the inputs into certain of the Company’s significant and critical accounting estimates include judgments and assumptions about the economic implications of the COVID-19 pandemic and how management expects them to change in the future, as appropriate. It is reasonably possible that actual results experienced may differ materially from the Company’s estimates in future periods, which could materially affect our results of operations and financial condition. Cash and Cash Equivalents Cash equivalents are highly liquid investments purchased with an original maturity of three months or less. Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance for doubtful accounts based on historical write-off experience and the identification of specific balances deemed uncollectible. Trade accounts receivable are charged against the allowance when the Company believes it is probable that the trade accounts receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. Allowance for doubtful accounts related to the Company’s trade accounts receivable were not significant at August 31, 2022 and 2021. F-8 Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined primarily based on a first-in, first-out method or, for a portion of raw materials inventory, the average cost method. When necessary, the Company adjusts the carrying value of its inventory to the lower of cost or net realizable value, including any costs to sell or dispose of such inventory. Appropriate consideration is given by the Company to obsolescence, excessive inventory levels, product deterioration and other factors when evaluating net realizable value for the purposes of determining the lower of cost or net realizable value. Included in inventories are amounts for certain raw materials and components that the Company has provided to its third-party contract manufacturers but that remain unpaid to the Company as of the balance sheet date. The Company’s contract manufacturers package products to the Company’s specifications and, upon order from the Company, ship ready-to-sell inventory to either the Company’s third-party distribution centers or directly to its customers. The Company transfers certain raw materials and components to these contract manufacturers for use in the manufacturing process. Contract manufacturers are obligated to pay the Company for these raw materials and components. Amounts receivable from the contract manufacturers as of the balance sheet date related to transfers of these raw materials and components by the Company to its contract manufacturers are generally considered product held at third-party contract manufacturers and are included in inventories in the accompanying consolidated balance sheets. Property and Equipment Property and equipment is stated at cost. Depreciation is computed using the straight-line method based upon estimated useful lives of ten to forty years for buildings and improvements, three to fifteen years for machinery and equipment, three to five years for vehicles, three to ten years for furniture and fixtures, three to seven years for R&D lab equipment and office equipment and three to five years for computer equipment. Depreciation expense totaled $6.9 million, $5.6 million and $5.5 million for fiscal years 2022, 2021 and 2020, respectively. These amounts include equipment depreciation expense which is recognized as cost of products sold and totaled $2.5 million in fiscal year 2022, $1.2 million in fiscal year 2021 and $1.4 million in fiscal year 2020. Internal-Use Software and Cloud Computing Arrangements The Company capitalizes costs related to computer software obtained or developed for internal use. Software obtained for internal use has generally been enterprise-level business and finance software that the Company customizes to meet its specific operational needs. Costs incurred in the application development phase are capitalized as property and equipment in the Company’s consolidated balance sheets and are depreciated using the straight-line method over their estimated useful lives. The Company also enters into certain cloud-based software hosting arrangements. In evaluating whether cloud computing arrangements include an embedded internal-use software license, management considers whether the Company has the contractual right to take possession of the software during the hosting period without significant penalty and whether it is feasible to either i) run the software on the Company’s hardware, or ii) contract with another party unrelated to the vendor to host the software. If management determines a cloud computing arrangement includes an embedded software license, the Company accounts for the software license element of the arrangement consistent with the acquisition of other internal-use software licenses. If a cloud computing arrangement does not include a software license, the Company accounts for the arrangement as a service contract. For such cloud computing service contracts, the Company capitalizes certain implementation costs such as the configuration, coding and customization of the software. Capitalizable cloud computing arrangement costs are generally consistent with those incurred during the application development stage for internal-use software, however, these costs are capitalized as “other assets” in the Company’s consolidated balance sheets. The Company amortizes these capitalized cloud computing implementation costs into selling, general and administrative expenses using the straight-line method over the fixed, non-cancellable term of the associated hosting arrangement, plus any reasonably certain renewal periods. The useful lives of the Company’s internal-use software and capitalized cloud computing implementation costs are generally three to five years. However, the useful lives of major information system installations such as implementations of enterprise resource planning (“ERP”) systems are determined on an individual basis and may exceed five years depending on the estimated period of use. The Company applies the same impairment model to both internal-use software and capitalized cloud computing implementation costs. Leases The Company leases real estate for its regional sales offices, a research and development facility, and offices located at its international subsidiaries and branch locations. In addition, the Company leases a fleet of automobiles. The Company has also identified warehouse leases within certain third-party distribution center service contracts. To determine if a contract contains a lease, the Company assesses its contracts and determines if there is an identified asset for which the Company has obtained the right to control, as defined in ASC 842. Right-of-use (“ROU”) assets and lease liabilities are recognized based on the present F-9 value of lease payments over the lease term with lease expense recognized over the term of the lease. As the Company’s leases typically do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability using its estimated secured incremental borrowing rate at the lease commencement date based on the lease term and the currency of the lease on a collateralized basis. Lease agreements may contain rent escalation clauses, renewal or termination options, and rent holidays, amongst other features. ROU assets include amounts for scheduled rent increases. The lease term includes the non-cancelable period of the lease and options to extend or terminate the lease when it is reasonably certain the Company will exercise those options, and is reviewed in subsequent periods if a triggering event occurs. The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to: (i) not separate lease components from non-lease components for real estate – office buildings, machinery and equipment, lab equipment, office equipment, furniture and fixtures, and IT equipment; and (ii) exclude leases with an initial term of 12 months or less (“short-term” leases) from the consolidated balance sheets and recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Goodwill Goodwill represents the excess of the purchase price over the fair value of tangible and intangible assets acquired. The carrying value of goodwill is reviewed for possible impairment in accordance with the authoritative guidance on goodwill, intangibles and other. The Company assesses possible impairments to goodwill at least annually during its second fiscal quarter and otherwise when events or changes in circumstances indicate that an impairment condition may exist. In performing the annual impairment test of its goodwill, the Company considers the fair value concepts of a market participant and the highest and best use for its intangible assets. In addition to the annual impairment test, goodwill is evaluated each reporting period to determine whether events and circumstances would more likely than not reduce the fair value of a reporting unit below its carrying value. When testing goodwill for impairment, the Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. If, after assessing qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing a quantitative test is unnecessary. Otherwise, a quantitative test is performed to identify the potential impairment and to measure the amount of goodwill impairment, if any. The Company also performs a quantitative assessment periodically, regardless of the results of the qualitative assessments. Any required impairment losses are recorded as a reduction in the carrying amount of the related asset and charged to results of operations. No goodwill impairments were identified by the Company during fiscal years 2022, 2021 or 2020. Subsequent Measurement of Long-lived Assets The Company’s long-lived assets consist of property and equipment and definite-lived intangible assets. Long-lived assets are depreciated or amortized, as applicable, on a straight-line basis over their estimated useful lives. The Company assesses for potential impairments to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and/or its remaining useful life may no longer be appropriate. Any required impairment loss would be measured as the amount by which the asset’s carrying amount exceeds its fair value, which is the amount at which the asset could be bought or sold in a current transaction between willing market participants and would be recorded as a reduction in the carrying amount of the related asset and a charge to results of operations. An impairment loss would be recognized when the sum of the expected future undiscounted net cash flows is less than the carrying amount of the asset. No impairments to its long-lived assets were identified by the Company during fiscal years 2022, 2021 or 2020. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes its financial assets and liabilities measured at fair value into a hierarchy that categorizes fair value measurements into the following three levels based on the types of inputs used in measuring their fair value: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities; Level 2: Observable market-based inputs or observable inputs that are corroborated by market data; and Level 3: Unobservable inputs reflecting the Company’s own assumptions. Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of August 31, 2022, the Company had no assets or liabilities that are measured at fair value in the financial statements on a recurring basis, with the exception of the foreign currency forward contracts, which are classified as Level 2 within the fair value hierarchy. The carrying values of cash equivalents and short-term borrowings are recorded at F-10 cost, which approximates their fair values, primarily due to their short-term nature. In addition, the carrying value of borrowings held under the Company’s revolving credit facility approximates fair value, based on Level 2 inputs, due to the variable nature of underlying interest rates, which generally reflect market conditions. The Company’s fixed rate long-term borrowings consist of senior notes and are recorded at carrying value. The Company estimates that the fair value of its senior notes, based on Level 2 inputs, was approximately $63.4 million as of August 31, 2022, which was determined based on a discounted cash flow analysis using current market interest rates for instruments with similar terms, compared to their carrying value of $68.4 million. During the fiscal years ended August 31, 2022, 2021 and 2020, the Company did not record any significant nonrecurring fair value measurements for assets or liabilities in periods subsequent to their initial recognition. Concentration of Credit Risk Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. The Company’s policy is to place its cash in high credit quality financial institutions, in investments that include demand deposits, term deposits and callable time deposits. The Company’s trade accounts receivable are derived from customers located in North America, South America, Asia-Pacific, Europe, the Middle East, Africa and India. The Company limits its credit exposure from trade accounts receivable by performing on-going credit evaluations of customers, as well as insuring its trade accounts receivable in selected markets. Concentration of Supplier Risk The Company relies on a limited number of suppliers, including single or sole source suppliers for certain of its raw materials, packaging, product components and other necessary supplies. Where possible and where it makes business sense, the Company works with secondary or multiple suppliers to qualify additional supply sources. Historically, the Company has been able to obtain adequate supplies of these materials which are used in the production of its maintenance products and homecare and cleaning products in a timely manner from existing sources and has been able to access adequate production capacity at its third- party manufacturers. However, during the COVID-19 pandemic, the Company has experienced challenges within its supply chain. These challenges include general aerosol production capacity constraints primarily due to increased demand at the third- party manufacturers that the Company utilizes as well as shortages of certain raw materials and increased costs. Insurance Coverage The Company carries insurance policies to cover insurable risks such as property damage, business interruption, product liability, cyber liability, workers’ compensation and other risks, with coverage and other terms that it believes to be adequate and appropriate. These policies may be subject to applicable deductible or retention amounts, coverage limitations and exclusions. The Company does not maintain self-insurance with respect to its material risks; therefore, the Company has not provided for self-insurance reserves as of August 31, 2022 and 2021. Revenue Recognition The Company recognizes revenue related to the sale of products when it satisfies a performance obligation in an amount reflecting the consideration to which it expects to be entitled. Sales are recorded net of allowances for damaged goods and other sales returns, sales incentives, trade promotions and cash discounts. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized which includes the following: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment related to variable consideration to determine the net consideration to which the Company expects to be entitled. The Company records estimates of variable consideration, which primarily includes rebates/other discounts (cooperative marketing programs, volume- based discounts, shelf price reductions and allowances for shelf space, charges from customers for services they provided to us related to the sale and penalties/fines charged to us by customers associated with failing to adhere to contractual obligations), coupon offers, cash discount allowances, and sales returns, as a reduction of sales in its consolidated statements of operations. These estimates are based on the expected value method considering all reasonably available information, including current and past trade promotion spending patterns, status of trade promotion activities, the interpretation of historical spending trends by customer and category, customer agreements and/or currently known factors that arise in the normal course of business. The Company reviews its assumptions and adjusts these estimates accordingly on a quarterly basis. F-11 Cost of Products Sold Cost of products sold primarily includes the cost of products manufactured on the Company’s behalf by its third-party contract manufacturers, net of volume and other rebates. Cost of products sold also includes the costs to manufacture WD-40 concentrate, which is done at the Company’s own facilities or at third-party contract manufacturers. When the concentrate is manufactured by the Company, cost of products sold includes direct labor, direct materials and supplies; in-bound freight costs related to purchased raw materials and finished product; and depreciation of machinery and equipment used in the manufacturing process. In addition, cost of products sold includes fees charged to the Company by its third-party distribution centers to warehouse and administer finished products once they are received from the Company’s third-party contract manufacturers. Selling, General and Administrative Expenses Selling, general and administrative expenses include costs related to selling the Company’s products, such as the cost of the sales force and broker commissions; shipping and handling costs paid to third-party companies to distribute finished goods from the Company’s third-party contract manufacturers and distribution centers to its customers; other general and administrative costs related to the Company’s business such as general overhead, legal and accounting fees, insurance, and depreciation; and employee-related and various other costs to support marketing, human resources, finance, supply chain, information technology and research and development activities. Shipping and Handling Costs Shipping and handling costs associated with the movement of finished goods from third-party contract manufacturers to the Company’s third-party distribution centers and from one third-party distribution center to another are capitalized in the cost of inventory and subsequently included in cost of sales when the sale to the customer is recognized in the statement of operations. Shipping and handling costs associated with out-bound transportation are included in selling, general and administrative expenses and are recorded at the time of shipment of product to the Company’s customers. Out-bound shipping and handling costs were $18.6 million, $16.5 million and $12.9 million for fiscal years 2022, 2021 and 2020, respectively. Advertising and Sales Promotion Expenses Advertising and sales promotion expenses are expensed as incurred. Advertising and sales promotion expenses include costs associated with promotional activities that the Company pays to third parties, which include costs for advertising (television, print media and internet), administration of coupon programs, consumer promotions, product demonstrations, public relations, agency costs, package design expenses and market research costs as well as market and sales data analyses. Advertising and sales promotion expenses also include product samples which are given to customers and are initiated by the Company and costs associated with shared marketing fund programs that the Company has in place with its marketing distributor customers. Total advertising and sales promotion expenses were $27.3 million, $28.0 million and $21.6 million for fiscal years 2022, 2021 and 2020, respectively. Research and Development The Company is involved in research and development efforts that include the ongoing development or innovation of new products and the improvement, extension or renovation of existing products or product lines. All research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses were $5.1 million, $5.6 million and $6.0 million in fiscal years 2022, 2021 and 2020, respectively. These expenses include costs associated with general research and development activities, as well as those associated with internal staff, overhead, design testing, market research and consultants. 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 basis of assets and liabilities. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the authoritative guidance on income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of income tax expense. The Company is required to make assertions on whether its foreign subsidiaries will invest their undistributed earnings indefinitely and these assertions are based on the capital needs of the foreign subsidiaries. Generally, unremitted earnings of the F-12 Company’s foreign subsidiaries are not considered to be indefinitely reinvested. However, there is an exception regarding specific statutory remittance restrictions imposed on the Company’s China subsidiary. Costs associated with repatriating unremitted foreign earnings, including U.S. state income taxes and foreign withholding taxes, are immaterial to the Company’s consolidated financial statements. For additional information on income tax matters, see Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 13 — Income Taxes, included in this report. Foreign Currency The Company translates the assets and liabilities of its foreign subsidiaries into U.S. Dollars at current rates of exchange in effect at the end of the reporting period. Income and expense items are translated at rates that approximate the rates in effect at the transaction date. Gains and losses from translation are included in accumulated other comprehensive income or loss. Gains or losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity’s functional currency) are included as other income in the Company’s consolidated statements of operations. The Company had $1.1 million and $0.3 million in net losses, and $0.4 million of net gains in foreign currency transactions in fiscal years 2022, 2021 and 2020, respectively. In the normal course of business, the Company employs established policies and procedures to manage its exposure to fluctuations in foreign currency exchange rates. The Company utilizes foreign currency forward contracts to limit its exposure to net asset balances held in non-functional currencies, primarily at its U.K. subsidiary. The Company regularly monitors its foreign currency exchange rate exposures to ensure the overall effectiveness of its foreign currency hedge positions. While the Company engages in foreign currency hedging activity to reduce its risk, for accounting purposes, none of its foreign currency forward contracts are designated as hedges. Foreign currency forward contracts are carried at fair value, with net realized and unrealized gains and losses recognized in other income (expense), net in the Company’s consolidated statements of operations. Cash flows from settlements of foreign currency forward contracts are included in operating activities in the consolidated statements of cash flows. Foreign currency forward contracts in an asset position at the end of the reporting period are included in other current assets, while foreign currency forward contracts in a liability position at the end of the reporting period are included in accrued liabilities in the Company’s consolidated balance sheets. At August 31, 2022, the Company had a notional amount of $5.8 million outstanding in foreign currency forward contracts, which matured in September 2022. Unrealized net gains and losses related to foreign currency forward contracts were not significant at August 31, 2022 or 2021. Realized net losses related to foreign currency forward contracts were not significant for the fiscal years ended August 31, 2022 and 2021. Both unrealized and realized net gains and losses are recorded in other income on the Company’s consolidated statements of operations. Earnings per Common Share Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities that are required to be included in the computation of earnings per common share pursuant to the two-class method. Accordingly, the Company’s outstanding unvested, if any, and outstanding vested stock-based equity awards that provide such nonforfeitable rights to dividend equivalents are included as participating securities in the calculation of earnings per common share (“EPS”) pursuant to the two-class method. The Company calculates EPS using the two-class method, which provides for an allocation of net income between common stock and other participating securities based on their respective participation rights to share in dividends. Basic EPS is calculated by dividing net income available to common shareholders for the period by the weighted-average number of common shares outstanding during the period. Net income available to common shareholders for the period includes dividends paid to common shareholders during the period plus a proportionate share of undistributed net income allocable to common shareholders for the period; the proportionate share of undistributed net income allocable to common shareholders for the period is based on the proportionate share of total weighted-average common shares and participating securities outstanding during the period. Diluted EPS is calculated by dividing net income available to common shareholders for the period by the weighted-average number of common shares outstanding during the period increased by the weighted-average number of potentially dilutive common shares (dilutive securities) that were outstanding during the period if the effect is dilutive. Dilutive securities are comprised of various types of stock-based equity awards granted under the Company’s prior and current equity incentive plans. Stock-based Compensation The Company accounts for stock-based equity awards exchanged for employee and non-employee director services in accordance with the authoritative guidance for share-based payments. Stock-based equity awards are measured at the estimated grant date fair value and expensed on a straight-line basis, net of forfeitures recognized as they occur, over the requisite service period. The requisite service period of employee awards generally ranges from about one to three years, although awards of certain employees F-13 may have shorter requisite service periods as a result of retirement, death and disability provisions. Director awards vest immediately at the grant date. Compensation expense related to the Company’s stock-based equity awards is recorded as selling, general and administrative expenses in the Company’s consolidated statements of operations. The Company does not currently grant stock options. The fair values of restricted stock unit awards and performance share unit awards are based on the fair value of the Company’s common stock on the date that such awards are granted. The fair value of market share unit awards is determined using a Monte Carlo simulation model. For the performance share unit awards, the Company adjusts the compensation expense over the service period based upon the expected achievement level of the applicable performance condition. As the grant date fair value of market share unit awards reflects the probabilities of the actual number of such awards expected to vest, compensation expense for such awards is not adjusted based on the expected achievement level of the applicable performance condition. The Company records any excess tax benefits or deficiencies from settlements of its stock- based equity awards within the provision for income taxes on the Company’s consolidated statements of operations in the reporting periods in which the settlement of the equity awards occur. Segment Information The Company discloses certain information about its business segments, which are determined consistent with the way the Company’s Chief Operating Decision Maker organizes and evaluates financial information internally for making operating decisions and assessing performance. In addition, the Chief Operating Decision Maker assesses and measures revenue based on product groups. Recently Adopted Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” under ASC 740, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and amended existing guidance to improve consistent application. This guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year. The Company adopted this new guidance on September 1, 2021, and the adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures Note 3. Inventories Inventories consisted of the following (in thousands): Product held at third-party contract manufacturers Raw materials and components Work-in-process Finished goods Total August 31, 2022 August 31, 2021 $ $ 7,915 13,952 881 81,353 104,101 $ $ 9,036 8,981 802 36,933 55,752 F-14 Note 4. Property and Equipment and Capitalized Cloud-Based Software Implementation Costs Property and equipment, net, consisted of the following (in thousands): Machinery, equipment and vehicles Buildings and improvements Computer and office equipment Internal-use software Furniture and fixtures Capital in progress Land Subtotal Less: accumulated depreciation and amortization Total August 31, 2022 August 31, 2021 $ $ 44,533 27,958 5,757 9,591 2,669 10,135 4,240 104,883 (38,906) 65,977 $ $ 22,504 29,697 5,742 10,559 2,794 31,016 4,406 106,718 (36,573) 70,145 At August 31, 2021, capital in progress on the Company’s consolidated balance sheets included $30.3 million associated with capital costs related to proprietary machinery and equipment for the Company’s next generation of delivery systems for its WD- 40 Smart Straw® products. During fiscal year 2022, $22.1 million of this machinery and equipment was placed in service and thus the Company reclassified these amounts from capital in progress to machinery, equipment and vehicles. As of August 31, 2022 and 2021, the Company’s consolidated balance sheets included $6.5 million and $2.6 million, respectively, of capitalized cloud-based implementation costs recorded as other assets within the Company’s consolidated balance sheets. Accumulated amortization associated with these assets were $0.5 million as of August 31, 2022, and were not significant as of August 31, 2021. Amortization expense associated with these assets were not significant during the fiscal years 2022 or 2021. Note 5. Goodwill and Other Intangible Assets Goodwill The following table summarizes the changes in the carrying amounts of goodwill by segment (in thousands): Balance as of August 31, 2020 Translation adjustments Balance as of August 31, 2021 Translation adjustments Balance as of August 31, 2022 Americas EMEA Asia-Pacific Total $ $ 85,461 15 85,476 (74) 85,402 $ 9,060 124 9,184 (615) 8,569 $ 1,210 (1) 1,209 - 1,209 $ 95,731 138 95,869 (689) 95,180 During the second quarter of fiscal year 2022, the Company performed its annual goodwill impairment test. The annual goodwill impairment test was performed at the reporting unit level as of the Company’s most recent goodwill impairment testing date, December 1, 2021. During the fiscal year 2022 annual goodwill impairment test, the Company performed a qualitative assessment of each reporting unit to determine whether it was more likely than not that the fair value of a reporting unit was less than its carrying amount. In performing this qualitative assessment, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of each of its reporting units. Factors that were considered included, but were not limited to, the following: (1) macroeconomic conditions, including the impacts of the COVID-19 pandemic; (2) industry and market conditions; (3) historical financial performance and expected financial performance; (4) other entity specific events, such as changes in management or key personnel; and (5) events affecting the Company’s reporting units, such as a change in the composition of net assets or any expected dispositions. Based on the results of this qualitative assessment, the Company determined that the estimated fair value of each of the Company’s reporting units exceeded their respective carrying values so significantly that an impairment charge to the Company’s goodwill balances is remote and, thus, a quantitative analysis was not required. The Company also concluded that there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill subsequent to December 1, 2021 through August 31, 2022. As a result, the Company concluded that no impairment of its goodwill existed as of August 31, 2022.To date, there have been no impairment losses identified and recorded related to the Company’s goodwill. F-15 Definite-lived Intangible Assets The Company’s definite-lived intangible assets, which include the Spot Shot, Carpet Fresh, 1001, EZ REACH and GT85 trade names, are included in other intangible assets, net in the Company’s consolidated balance sheets. The following table summarizes the definite-lived intangible assets and the related accumulated amortization (in thousands): Gross carrying amount Accumulated amortization Net carrying amount August 31, 2022 $ $ 35,166 (29,578) 5,588 August 31, 2021 $ $ 36,657 (29,413) 7,244 There has been no impairment charge for the period ended August 31, 2022 and there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its existing definite-lived intangible assets. The Company’s review of events and circumstances included consideration of the ongoing COVID-19 pandemic. Changes in the carrying amounts of definite-lived intangible assets by segment are summarized below (in thousands): Balance as of August 31, 2020 Amortization expense Translation adjustments Balance as of August 31, 2021 Amortization expense Translation adjustments Balance as of August 31, 2022 Americas EMEA Asia-Pacific Total $ $ 6,553 (1,058) - 5,495 (1,058) - 4,437 $ 2,080 (391) 60 1,749 (376) (222) 1,151 $ - - - - - - - $ $ 8,633 (1,449) 60 7,244 (1,434) (222) 5,588 The estimated amortization expense for the Company’s definite-lived intangible assets is not significant in any future individual fiscal year. F-16 Note 6. Leases The Company leases real estate for its regional sales offices, a research and development facility, and offices located at its international subsidiaries and branch locations. In addition, the Company leases an automobile fleet in the United States. The Company has also identified warehouse leases within certain third-party distribution center service contracts. All other leases are insignificant to the Company’s consolidated financial statements. To determine if a contract contains a lease, the Company assesses its contracts and determines if there is an identified asset for which the Company has obtained the right to control, as defined in ASC 842. The Company records right-of-use assets and lease liabilities on its consolidated balance sheets for leases with an expected term greater than one year. The lease term includes the committed lease term, also taking into account early termination and renewal options that management is reasonably certain to exercise. For leases that do not have a readily determinable implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. The Company’s estimated secured incremental borrowing rate is determined using a portfolio approach based on the rate of interest the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the unsecured borrowing rate and risk- adjusts that rate to approximate a collateralized rate in the currency of the lease. As of August 31, 2021 and 2022, finance leases were not significant and all leases recorded on the Company’s consolidated balances sheets were operating leases. Residual value guarantees, restrictions, covenants, sublease income, net gains or losses from sale and leaseback transactions, and transactions with related parties associated with leases are also not significant. The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to: (i) not separate lease components from nonlease components for real estate – office buildings, machinery and equipment, lab equipment, office equipment, furniture and fixtures, and IT equipment; and (ii) exclude leases with an initial term of 12 months or less (“short-term” leases) from the consolidated balance sheets and will recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term. However, the Company had no significant short-term leases as of August 31, 2022. The Company obtained additional right-of-use assets of $2.2 million in exchange for lease obligations related to renewals of existing leases during fiscal year 2022. The Company recorded $2.0 million and $2.1 million in lease expense during the fiscal years ended August 31, 2022 and 2021, respectively. This lease expense was included in selling, general and administrative expenses. The Company recorded $0.3 million of lease expense classified within cost of products sold for the fiscal year ended August 31, 2022, and $0.6 million for the fiscal year ended August 31, 2021. During the fiscal year ended August 31, 2022 and 2021, the Company paid cash of $2.1 million and $2.0 million related to lease liabilities, respectively. Variable lease expense under the Company’s lease agreements was not significant for both the fiscal years ended August 31, 2022 and 2021. As of August 31, 2022, the weighted-average remaining lease term was 6.5 years and the weighted-average discount rate was 3.1% for the Company’s operating leases. As of August 31, 2021, the weighted-average remaining lease term was 6.7 years and the weighted-average discount rate was 2.8% for the Company’s operating leases. The Company had approximately $1.2 million of leases that commenced after August 31, 2022 that created rights and obligations to the Company. These leases are not included in the following schedules. Right-of-use assets and lease liabilities consisted of the following (in thousands): Assets: Operating lease right-of-use assets Liabilities: Current operating lease liabilities(1) Long-term operating lease liabilities Total operating lease liabilities August 31, 2022 August 31, 2021 $ $ 7,559 1,703 5,999 7,702 $ $ 8,824 1,903 7,062 8,965 (1) Current operating lease liabilities are classified in accrued liabilities on the Company’s consolidated balance sheets. F-17 The Company’s maturities of its operating lease liabilities, including early termination and renewal options that management is reasonably certain to exercise, are as follows as of August 31, 2022 (in thousands): Fiscal year 2023 Fiscal year 2024 Fiscal year 2025 Fiscal year 2026 Fiscal year 2027 Thereafter Total undiscounted future cash flows Less: Interest Present value of lease liabilities Note 7. Accrued and Other Liabilities Accrued liabilities consisted of the following (in thousands): Operating Leases 1,918 1,656 1,077 939 770 2,230 8,590 (888) 7,702 $ $ August 31, 2022 August 31, 2021 Accrued advertising and sales promotion expenses Accrued professional services fees Accrued sales taxes and other taxes Deferred revenue Short-term operating lease liability Other Total $ $ 13,563 1,979 995 4,988 1,703 3,933 27,161 Accrued payroll and related expenses consisted of the following (in thousands): Accrued incentive compensation Accrued payroll Accrued profit sharing Accrued payroll taxes Other Total Note 8. Debt August 31, 2022 2,524 4,001 2,758 1,779 521 11,583 $ $ $ $ $ $ 11,796 2,122 1,708 3,696 1,903 4,433 25,658 August 31, 2021 14,068 4,746 3,273 2,952 623 25,662 As of August 31, 2022, the Company held borrowings under two separate agreements as detailed below. Note Purchase and Private Shelf Agreement The Company holds borrowings under its Note Purchase and Private Shelf Agreement, as amended (the “Note Agreement”) by and among the Company, PGIM, Inc. (“Prudential”), and certain affiliates and managed accounts of Prudential (the “Note Purchasers”). As of August 31, 2022, the Company had outstanding balances on its series A, B and C notes issued under this Note Agreement. Credit Agreement The Company’s Amended and Restated Credit Agreement, as amended (the “Credit Agreement”) with Bank of America, N.A., consists of a revolving commitment for borrowing by the Company up to $150.0 million with a sublimit of $100.0 million for WD-40 Company Limited, a wholly owned operating subsidiary of the Company for Europe, the Middle East, Africa and India. F-18 On November 29, 2021, the Company entered into its most recent amendment to the Credit Agreement (the “LIBOR Amendment”) with Bank of America, N.A. The LIBOR Amendment changed the Company’s index rates under the Credit Agreement for British Pound Sterling and U.S. Dollar borrowings from the London Interbank Offered Rate as administered by ICE Benchmark Administration to the Sterling Overnight Index Average Reference Rate and the Bloomberg Short-term Bank Yield Index rate, respectively, as well as certain definitions and clarifications within the Credit Agreement to accommodate the change in index rates. The impact of the LIBOR Amendment was insignificant to the Company’s consolidated financial statements. Short-term and long-term borrowings under the Company’s Credit Agreement and Note Agreement consisted of the following (in thousands): Issuance Maturities (calendar year) August 31, 2022 August 31, 2021 Credit Agreement - revolving credit facility (1)(3) Various 9/30/2025 77,912 $ 46,540 Note Agreement Series A Notes - 3.39% fixed rate(2) Series B Notes - 2.50% fixed rate(3) Series C Notes - 2.69% fixed rate(3) Total borrowings Short-term portion of borrowings Total long-term borrowings 11/15/2017 9/30/2020 9/30/2020 2021-2032 11/15/2027 11/15/2030 16,400 26,000 26,000 146,312 (39,173) 107,139 17,200 26,000 26,000 115,740 (800) 114,940 $ $ (1) The Company has the ability to refinance any draw under the line of credit with successive short-term borrowings through the maturity date. Outstanding draws for which management has both the ability and intent to refinance with successive short-term borrowings for a period of at least twelve months are classified as long-term. As of August 31, 2022, $39.5 million on this facility is classified as long-term and is denominated in Euros and Pound Sterling. $38.4 million is classified as short-term and is denominated entirely in U.S. Dollar. Euro and Pound Sterling denominated draws will fluctuate in U.S. Dollars from period to period due to changes in foreign currency exchange rates. (2) Principal payments are required semi-annually in May and November of each year in equal installments of $0.4 million through May 15, 2032, resulting in $0.8 million classified as short-term. The remaining outstanding principal in the amount of $8.4 million will become due on November 15, 2032. Interest on notes is payable semi-annually in May and November of each year with no principal due until the maturity date. (3) Both the Note Agreement and the Credit Agreement contain representations, warranties, events of default and remedies, as well as affirmative, negative and other financial covenants customary for these types of agreements. These covenants include, among other things, certain limitations on the ability of the Company and its subsidiaries to incur indebtedness, create liens, dispose of assets, make investments, declare, make or incur obligations to make certain restricted payments, including the payment of dividends and payments for the repurchase of the Company’s capital stock and enter into certain merger or consolidation transactions. The Credit Agreement includes, among other limitations on indebtedness, a $125.0 million limit on other unsecured indebtedness. Each agreement also includes a most favored lender provision which requires that any time any other lender has the benefit of one or more financial or operational covenants that is different than, or similar to, but more restrictive than those contained in its own agreement, those covenants shall be immediately and automatically incorporated by reference to the other lender’s agreement. Both the Note Agreement and the Credit Agreement require the Company to adhere to the same financial covenants. For the financial covenants, the definition of consolidated EBITDA includes the add back of non-cash stock-based compensation to consolidated net income when arriving at consolidated EBITDA. The terms of the financial covenants are as follows: • The consolidated leverage ratio cannot be greater than three and a half to one. The consolidated leverage ratio means, as of any date of determination, the ratio of (a) consolidated funded indebtedness as of such date to (b) consolidated EBITDA for the most recently completed four fiscal quarters. • The consolidated interest coverage ratio cannot be less than three to one. The consolidated interest coverage ratio means, as of any date of determination, the ratio of (a) consolidated EBITDA for the most recently completed four fiscal quarters to (b) consolidated interest charges for the most recently completed four fiscal quarters As of August 31, 2022, the Company was in compliance with all debt covenants under both the Note Agreement and the Credit Agreement. F-19 Note 9. Share Repurchase Plan On April 8, 2020, the Company elected to suspend repurchases under its previously approved share buy-back plan, which subsequently expired on August 31, 2020. The Company made this election in order to preserve cash while it continued to monitor the long-term impacts of the COVID-19 pandemic. On October 12, 2021, the Company’s Board of Directors approved a new share repurchase plan. Under the plan, which became effective on November 1, 2021, the Company is authorized to acquire up to $75.0 million of its outstanding shares through August 31, 2023. The timing and amount of repurchases are based on terms and conditions as may be acceptable to the Company’s Chief Executive Officer and Chief Financial Officer, subject to present loan covenants and in compliance with all laws and regulations applicable thereto. During fiscal year 2022, the Company repurchased 138,562 shares at an average price of $210.39 per share, for a total cost of $29.2 million under this $75.0 million plan. Note 10. Earnings per Common Share The table below reconciles net income to net income available to common shareholders (in thousands): Net income Less: Net income allocated to participating securities Net income available to common shareholders 2022 67,329 (251) 67,078 $ $ Fiscal Year Ended August 31, 2021 $ $ 70,229 (277) 69,952 $ $ 2020 60,710 (294) 60,416 The table below summarizes the weighted-average number of common shares outstanding included in the calculation of basic and diluted EPS (in thousands): Weighted-average common shares outstanding, basic Weighted-average dilutive securities Weighted-average common shares outstanding, diluted 2022 13,668 28 13,696 Fiscal Year Ended August 31, 2021 13,698 35 13,733 2020 13,691 28 13,719 For the fiscal year ended August 31, 2022, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 8,724 were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive. There were no anti-dilutive stock-based equity awards outstanding for the fiscal year ended August 31, 2021. For the fiscal year ended August 31, 2020, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 6,172, were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive. Note 11. Revenue Recognition The following paragraphs detail the Company’s revenue recognition policies and provide additional information used in its determination of net sales and contract balances under ASC 606. Disaggregation of Revenue The following table presents our revenues by segment and major source (in thousands): Fiscal Year Ended August 31, 2022: Fiscal Year Ended August 31, 2021: Americas EMEA Asia-Pacific Total Americas EMEA Asia-Pacific Total Maintenance products HCCP (1) $ 223,470 $ 196,524 $ 65,332 $ 485,326 $ 194,295 $ 198,309 $ 56,213 $ 448,817 16,763 8,164 8,567 33,494 20,306 9,943 9,043 39,292 Total net sales $ 240,233 $ 204,688 $ 73,899 $ 518,820 $ 214,601 $ 208,252 $ 65,256 $ 488,109 (1) Homecare and cleaning products (“HCCP”) F-20 Revenue Recognition The Company generates revenue from sales of its products to customers in its Americas, EMEA and Asia-Pacific segments. Product sales for the Company include maintenance products and homecare and cleaning products. The Company recognizes revenue related to the sale of these products when it satisfies a performance obligation in an amount reflecting the consideration to which it expects to be entitled. Sales are recorded net of allowances for damaged goods and other sales returns, sales incentives, trade promotions and cash discounts. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized which includes the following: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Contracts with customers are renewable periodically and contain terms and conditions with respect to payment, delivery, sales incentives, warranty and supply, but do not require mandatory purchase commitments. In the absence of a specific sales agreement with a customer, the Company’s standard terms and conditions at the time of acceptance of purchase orders apply to the sales transaction. The Company’s standard terms and conditions are either included in a standalone document or on the Company’s price lists or both, and these standard terms and conditions are provided to the customer prior to the sales transaction. The Company considers the customer purchase orders, governed by specific sales agreements or the Company’s standard terms and conditions, to be the contract with the customer. The Company considers each transaction to sell products as separate and distinct, with no additional promises made, and as a result, all of the Company's sales are single performance obligation arrangements for which the transaction price is equivalent to the stated price of the product, net of any variable consideration for items such as sales returns, discounts, rebates and other sales incentives. The Company recognizes sales at a point in time upon transferring control of its 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. Taxes imposed by governmental authorities on the Company's revenue, such as sales taxes and value added taxes, are excluded from net sales. Sales commissions are paid to certain third-parties based upon specific sales levels achieved during a defined time period. Since the Company’s contracts related to these sales commissions do not exceed one year, the Company has elected as a practical expedient to expense these payments as incurred. The Company also elected the practical expedient related to shipping and handling fees which allows the Company to account for freight costs as fulfillment activities instead of assessing such activities as performance obligations. The Company’s freight costs are sometimes paid by the customer, while other times, the freight costs are included in the sales price. The Company does not account for freight costs as a separate performance obligation, but rather as an activity performed to transfer the products to its customers. Variable Consideration - Sales Incentives In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment related to variable consideration to determine the net consideration to which the Company expects to be entitled. The Company records estimates of variable consideration, which primarily includes rebates/other discounts (cooperative marketing programs, volume- based discounts, shelf price reductions and allowances for shelf space, charges from customers for services they provided to us related to the sale and penalties/fines charged to us by customers associated with failing to adhere to contractual obligations), coupon offers, cash discount allowances, and sales returns, as a reduction of sales in its consolidated statements of operations. These estimates are based on the expected value method considering all reasonably available information, including current and past trade promotion spending patterns, status of trade promotion activities, the interpretation of historical spending trends by customer and category, customer agreements and/or currently known factors that arise in the normal course of business. The Company reviews its assumptions and adjusts these estimates accordingly on a quarterly basis. Rebates/Other Discounts — The Company offers various on-going trade promotion programs with customers and provides other discounts to customers that require management to estimate and accrue for the expected costs of such programs or discounts. These programs include cooperative marketing, volume-based discounts, shelf price reductions, consideration and allowances given to retailers for shelf space and/or favorable display positions in their stores and other promotional activities. Other discounts include items such as charges from customers for services they provide related to the sale of WD-40 Company products and penalties/fees associated with WD-40 Company failing to adhere to contractual obligations (e.g., errors on purchase orders, errors on shipment, late deliveries, etc.). Costs related to rebates, cooperative advertising and other promotional activities and other discounts are recorded as a reduction to sales upon delivery of the Company’s products to its customers. The Company had a $8.7 million and $8.4 million balance in rebate/other discount liabilities as of August 31, 2022 and 2021, respectively, which are included in accrued liabilities on the Company’s consolidated balance sheets. The Company recorded approximately $32.8 million and $28.7 million in rebates/other discounts as a reduction to sales during fiscal years 2022 and 2021, respectively. Coupons — Coupon costs are based upon historical redemption rates and are recorded as a reduction to sales as incurred, which is when the coupons are circulated. Coupon redemption liabilities, which are included in accrued liabilities on the Company’s F-21 consolidated balance sheets, were not significant at August 31, 2022 and 2021. Coupons recorded as a reduction to sales were not significant during fiscal years 2022 and 2021, respectively. Cash discounts — The Company offers certain of its customers a cash discount program to incentivize them to pay the invoice earlier than the normal payment date on the invoice. Although payment terms vary, most customers typically pay within 30 to 90 days of invoicing. The Company had a $0.5 million balance in the allowance for cash discounts at both August 31, 2022 and 2021. The Company recorded approximately $5.2 million and $4.9 million in cash discounts as a reduction to sales during fiscal year 2022 and 2021, respectively. Sales returns — The Company recognizes revenue net of allowances for estimated returns, which is generally based on historical return rates, with a corresponding reduction to cost of products sold. Although the Company typically does not have definitive sales return provisions included in the contract terms with its customers, when such provisions have been included, they have not been significant. The Company presents its provision for sales returns on a gross basis as a liability. The Company’s refund liability for sales returns is included in accrued liabilities and represents the amount expected to be owed to the customers for product returns. The Company’s refund liability for sales returns was $0.4 million at August 31, 2022 and was $0.5 million at August 31, 2021. The Company also records an asset for the value of inventory that represents the right to recover products from customers associated with sales returns. The value of this inventory is recorded to other current assets and the balance in this account associated with product returns was not significant at August 31, 2022 and August 31, 2021. Contract Balances Contract liabilities consist of deferred revenue related to undelivered products. Deferred revenue is recorded when payments have been received from customers for undelivered products. Revenue is subsequently recognized when revenue recognition criteria are met, generally when control of the product transfers to the customer. The Company had contract liabilities of $5.0 million and $3.7 million as of August 31, 2022 and 2021, respectively. All of the $3.7 million that was included in contract liabilities as of August 31, 2021 was recognized to revenue during fiscal year 2022. These contract liabilities are recorded in accrued liabilities on the Company’s consolidated balance sheets. The Company did not have any contract assets as of August 31, 2022 and August 31, 2021. Note 12. Commitments and Contingencies Purchase Commitments The Company has ongoing relationships with various suppliers (contract manufacturers) that manufacture the Company’s products and third-party distribution centers that warehouse and ship the Company’s products to customers. The contract manufacturers maintain title and control of certain raw materials and components, materials utilized in finished products, and of the finished products themselves until shipment to the Company’s customers or third-party distribution centers in accordance with agreed upon shipment terms. Although the Company has definitive minimum purchase obligations included in the contract terms with certain of its contract manufacturers, when such obligations have been included, they have either been immaterial or the minimum amounts have been such that they are well below the volume of goods that the Company has historically purchased. In the ordinary course of business, supply needs are communicated by the Company to its contract manufacturers based on orders and short-term projections, ranging from two months to six months. The Company is committed to purchase the products produced by the contract manufacturers based on the projections provided. Upon the termination of contracts with contract manufacturers, the Company obtains certain inventory control rights and is obligated to work with the contract manufacturer to sell through all product held by or manufactured by the contract manufacturer on behalf of the Company during the termination notification period. If any inventory remains at the contract manufacturer at the termination date, the Company is obligated to purchase such inventory which may include raw materials, components and finished goods. The amounts for inventory purchased under termination commitments have been immaterial. In addition to the commitments to purchase products from contract manufacturers described above, the Company may also enter into commitments with other manufacturers to purchase finished goods and components to support innovation and renovation initiatives and/or supply chain initiatives. As of August 31, 2022, no such commitments were outstanding. Litigation From time to time, the Company is subject to various claims, lawsuits, investigations and proceedings arising in the ordinary course of business, including but not limited to, product liability litigation and other claims and proceedings with respect to intellectual property, breach of contract, labor and employment, tax and other matters. As of August 31, 2022, there were no unasserted claims or pending proceedings for claims against the Company that the Company believes will result in a probable loss. As to claims that the Company believes may result in a reasonably possible loss, the Company believes that no reasonably F-22 possible outcome of any such claim will have a materially adverse impact on the Company’s financial condition, results of operations or cash flows. Indemnifications As permitted under Delaware law, the Company has agreements whereby it indemnifies senior officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company maintains Director and Officer insurance coverage that mitigates the Company’s exposure with respect to such obligations. As a result of the Company’s insurance coverage, management believes that the estimated fair value of these indemnification agreements is minimal. Thus, no liabilities have been recorded for these agreements as of August 31, 2022. From time to time, the Company enters into indemnification agreements with certain contractual parties in the ordinary course of business, including agreements with lenders, lessors, contract manufacturers, marketing distributors, customers and certain vendors. All such indemnification agreements are entered into in the context of the particular agreements and are provided in an attempt to properly allocate risk of loss in connection with the consummation of the underlying contractual arrangements. Although the maximum amount of future payments that the Company could be required to make under these indemnification agreements is unlimited, management believes that the Company maintains adequate levels of insurance coverage to protect the Company with respect to most potential claims arising from such agreements and that such agreements do not otherwise have value separate and apart from the liabilities incurred in the ordinary course of the Company’s business. Thus, no liabilities have been recorded with respect to such indemnification agreements as of August 31, 2022. Note 13. Income Taxes Income before income taxes consisted of the following (in thousands): United States Foreign (1) Income before income taxes 2022 47,427 36,681 84,108 $ $ Fiscal Year Ended August 31, 2021 $ $ 40,949 45,550 86,499 $ $ 2020 43,000 32,515 75,515 (1) Included in these amounts are income before income taxes for the EMEA segment of $30.3 million, $38.8 million and $27.0 million for the fiscal years ended August 31, 2022, 2021 and 2020, respectively. The provision for income taxes consisted of the following (in thousands): Current: Federal State Foreign Total current Deferred: United States Foreign Total deferred Provision for income taxes 2022 Fiscal Year Ended August 31, 2021 2020 $ $ 7,487 861 8,114 16,462 6 311 317 16,779 $ $ 5,871 1,007 10,944 17,822 (1,201) (351) (1,552) 16,270 $ $ 7,267 822 7,139 15,228 (619) 196 (423) 14,805 F-23 Deferred tax assets and deferred tax liabilities consisted of the following (in thousands): Deferred tax assets: Accrued payroll and related expenses Reserves and accruals Stock-based compensation expense Lease Accounting Uniform capitalization Tax credit carryforwards Other Total gross deferred tax assets Valuation allowance Total net deferred tax assets Deferred tax liabilities: Property and equipment, net Amortization of tax goodwill and intangible assets Lease Accounting Other Total deferred tax liabilities Net deferred tax liabilities August 31, 2022 August 31, 2021 $ $ 881 1,178 2,366 642 2,657 3,512 2,548 13,784 (3,628) 10,156 (4,122) (14,931) (613) (339) (20,005) (9,849) $ $ 1,029 1,115 2,387 882 1,558 3,911 1,569 12,451 (3,984) 8,467 (1,927) (15,109) (856) (118) (18,010) (9,543) The Company had state net operating loss (“NOL”) carryforwards of $5.3 million and $4.5 million as of August 31, 2022 and 2021, respectively, which generated a net deferred tax asset of $0.4 million and $0.3 million as of August 31, 2022 and 2021, respectively. The state NOL carryforwards, if unused, will expire between fiscal year 2023 and 2042. The Company also had tax credit carryforwards of $3.5 million and $3.9 million as of August 31, 2022 and 2021, respectively, of which $3.3 million and $3.7 million, respectively, is attributable to U.K. tax credit carryforwards, which do not expire. Future utilization of the U.K. tax credit carryforwards and certain state credit carryforwards is uncertain and is dependent upon several factors that may not occur, including the generation of future taxable income in certain jurisdictions. At this time, management cannot conclude that it is “more likely than not” that the related deferred tax assets will be realized. Accordingly, a valuation allowance has been recorded against the related deferred tax asset associated with the U.K. tax credit carryforwards and certain state carryforwards. A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows (in thousands): Amount computed at U.S. statutory federal tax rate State income taxes, net of federal tax benefits Net benefit from GILTI/FDII Benefit from stock compensation Other Provision for income taxes Fiscal Year Ended August 31, 2022 2021 2020 17,662 455 (2,002) (204) 868 16,779 $ $ 18,165 803 (1,764) (1,736) 802 16,270 $ $ 15,858 853 (1,582) (1,078) 754 14,805 $ $ The provision for income taxes was 19.9% and 18.8% of income before income taxes for the fiscal years ended August 31, 2022 and 2021, respectively. The increase in the effective income tax rate from period to period was primarily due to an increase in nondeductible performance-based compensation expense. F-24 Reconciliations of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands): Unrecognized tax benefits - beginning of fiscal year Net increases (decreases) - prior period tax positions Net increases - current period tax positions Expirations of statute of limitations for assessment Unrecognized tax benefits - end of fiscal year Fiscal Year Ended August 31, 2022 2021 $ $ 9,314 - 200 (263) 9,251 $ $ 9,352 31 254 (323) 9,314 Gross unrecognized tax benefits totaled $9.3 million for both the fiscal years ended August 31, 2022 and 2021, of which $9.1 million in both fiscal years ended August 31, 2022 and 2021, would affect the Company’s effective income tax rate if recognized. Interest and penalties related to uncertain tax positions included in tax expense was $0.3 million for both fiscal years ending August 31, 2022 and 2021, primarily related to the toll tax liability reserve. The total balance of accrued interest and penalties related to uncertain tax positions was $1.6 million and $1.2 million for the fiscal years ended August 31, 2022 and 2021, respectively. The Company is subject to taxation in the U.S. and in various state and foreign jurisdictions. Due to expired statutes and closed audits, the Company’s federal income tax returns for years prior to fiscal year 2018 are not subject to examination by the U.S. Internal Revenue Service. The Company is currently under audit in various state jurisdictions for fiscal years 2018 through 2019. Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2018 are no longer subject to examination. The Company has estimated that up to $0.2 million of unrecognized tax benefits related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months. Audit outcomes and the timing of settlements are subject to significant uncertainty. Income taxes receivable of $5.0 million and $1.9 are recorded in the Company’s consolidated balance sheets as of August 31, 2022 and 2021, respectively. Income taxes receivable are included in other current assets, which also consists of miscellaneous prepaid expenses and deposits. Note 14. Stock-based Compensation As of August 31, 2022, the Company had one stock incentive plan, the WD-40 Company 2016 Stock Incentive Plan (“2016 Plan”), which was approved by the Company’s shareholders effective as of December 13, 2016. The 2016 Plan permits the granting of various stock-based equity awards, including non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards to employees, directors and consultants. To date through August 31, 2022, the Company had granted awards of restricted stock units (“RSUs”), market share units (“MSUs”), deferred performance units (“DPUs”) and performance share units (“PSUs”) under the 2016 Plan. Additionally, as of August 31, 2022, there were still certain outstanding awards which had been granted under the Company’s prior equity incentive plan. The 2016 Plan is administered by the Board of Directors (the “Board”) or the Compensation Committee or other designated committee of the Board (the “Committee”). All stock-based equity awards granted under the 2016 Plan are subject to the specific terms and conditions as determined by the Committee at the time of grant of such awards in accordance with the various terms and conditions specified for each award type per the 2016 Plan. The total number of shares of common stock authorized for issuance pursuant to grants of awards under the 2016 Plan is 1,000,000. As of August 31, 2022, 384,859 shares of common stock remained available for future issuance pursuant to grants of awards under the 2016 Plan. The shares of common stock to be issued pursuant to awards under the 2016 Plan may be authorized shares not previously issued, or treasury shares. The Company has historically issued new authorized shares not previously issued upon the settlement of the various stock-based equity awards under its equity incentive plans. Vesting of the RSUs granted to directors is immediate, with shares to be issued pursuant to the vested RSUs upon termination of each director’s service as a director of the Company. Vesting of the one-time grant of RSUs granted to certain key executives of the Company in March 2008 in settlement of these key executives’ benefits under the Company’s supplemental employee retirement plan agreements was over a period of three years from the date of grant, with shares to be issued pursuant to the vested RSUs six months following the day after each executive officer’s termination of employment with the Company. Vesting of the RSUs granted to certain high level employees is over a period of three years from the date of grant, subject to potential earlier vesting in the event of retirement of the holder of the award in accordance with the award agreement, with shares to be issued pursuant to the vested RSUs at the time of vest. The director RSU holders and the executive officer March 2008 grant date RSU holders are entitled to receive dividend equivalents with respect to their RSUs, payable in cash as and when dividends are declared by the Company’s Board of Directors. F-25 Vesting of the MSUs granted to certain high level employees follows a performance measurement period of three fiscal years commencing with the Company’s fiscal year in which the MSU awards are granted (the “Measurement Period”). Shares will be issued pursuant to the vested MSUs following the conclusion of the applicable MSU Measurement Period after the Committee’s certification of achievement of the applicable performance measure for such awards and the vesting of the MSU awards and the applicable percentage of the target number of MSU shares to be issued. The recipient must remain employed with the Company for vesting purposes until the date on which the Committee certifies achievement of the applicable performance measure for the MSU awards, subject to potential pro-rata vesting in the event of earlier retirement of the holder of the award in accordance with the award agreement. During fiscal year 2021, PSU awards were granted for the first time under the 2016 Plan in October 2021 and granting of new DPUs was discontinued by the Company. No DPUs were granted in fiscal year 2021. Although certain vested DPU awards granted in prior periods remain outstanding due to a deferred settlement feature contained within these award agreements, the expense associated with these awards has been fully recognized in prior periods. Many features of the Company’s PSU award agreements are similar to the discontinued DPU awards with the exception of the timing and terms of issuances. Vested DPUs contain a deferred settlement feature wherein the awards must be held until termination of employment, prior to which the recipients are entitled to dividend equivalents, with vested shares to be issued six months following each such recipient’s termination of employment with the Company. Vested PSUs are issuable prior to termination of employment but contain a period of restriction, wherein the recipient cannot sell or otherwise dispose of the stock until six months following termination of employment with the Company. Vesting of the PSUs granted to certain high level employees follows a performance measurement period of one fiscal year that is the same fiscal year in which the PSU awards are granted (the “Measurement Year”). A number of PSUs equal to the applicable percentage of the maximum number of PSUs awarded will be confirmed as vested and issuable following the conclusion of the applicable PSU Measurement Year after the Committee’s certification of achievement of the applicable performance measure for such awards. The recipient must remain employed with the Company for vesting purposes until August 31 of the Measurement Year, subject to potential pro-rata vesting in the event of earlier retirement of the holder of the award in accordance with the award agreement. Stock-based compensation expense is amortized on a straight-line basis over the requisite service period for the entire award. Stock-based compensation expense related to the Company’s stock-based equity awards is as follows by award type (in thousands): RSU compensation expense MSU compensation expense PSU compensation expense (1) Total Fiscal Year Ended August 31, 2022 2021 2020 $ $ 4,153 2,544 - 6,697 $ $ 3,656 2,294 3,605 9,555 $ $ 3,325 2,033 - 5,358 (1) PSU awards, similar to DPU awards that were replaced by PSUs in fiscal year 2021, contain performance conditions for which accrual of expense is based on the probable outcome of the performance conditions. Vesting of DPUs related to the measurement year of 2020 was deemed not probable at the end of the fiscal year. DPUs were then discontinued by the Company beginning in fiscal year 2021. PSUs pertaining to the measurement year of fiscal year 2021 vested at 100% since the performance conditions were fully achieved. PSUs pertaining to the measurement year of fiscal year 2022 was deemed not probable at the end of the fiscal year. The Company recorded deferred tax assets related to such stock-based compensation of $1.5 million, $2.0 million and $1.2 million for the fiscal years ended August 31, 2022, 2021 and 2020, respectively. As of August 31, 2022, the total unamortized compensation cost related to non-vested stock-based equity awards was $1.4 million and $3.1 million for RSUs and MSUs, respectively, which the Company expects to recognize over remaining weighted-average vesting periods of 1.45 and 1.82 years for RSUs and MSUs, respectively. No unamortized compensation cost for DPUs or PSUs remained as of August 31, 2022. Restricted Stock Units The estimated fair value of each of the Company’s RSU awards was determined on the date of grant based on the closing market price of the Company’s common stock on the date of grant for those RSUs which are entitled to receive dividend equivalents with respect to the RSUs, or based on the closing market price of the Company’s common stock on the date of grant less the grant date present value of expected dividends during the vesting period for those RSUs which are not entitled to receive dividend equivalents with respect to the RSUs. F-26 A summary of the Company’s restricted stock unit activity is as follows (in thousands, except share and per share amounts): Restricted Stock Units Outstanding at August 31, 2021 Granted Converted to common shares Forfeited Outstanding at August 31, 2022 Vested at August 31, 2022 Number of Shares Weighted-Average Grant Date Fair Value Per Share 69,001 23,461 (13,751) (107) 78,604 49,620 $ $ $ $ $ $ $131.88 $217.03 $182.72 $224.41 $148.28 $116.22 Aggregate Intrinsic Value $ $ 14,869 9,386 The weighted-average grant date fair value of all RSUs granted during the fiscal years ended August 31, 2022, 2021 and 2020 was $217. 03, $208.29 and $184.43, respectively. The total intrinsic value of all RSUs converted to common shares was $3.0 million, $8.5 million and $5.4 million for the fiscal years ended August 31, 2022, 2021 and 2020, respectively. The income tax benefits from RSUs converted to common shares totaled $0.6 million, $1.9 million and $1.2 million for the fiscal years ended August 31, 2022, 2021 and 2020, respectively. Market Share Units The MSUs are market performance-based awards that vest with respect to the applicable percentage of the target number of MSU shares based on relative total stockholder return (“TSR”) for the Company as compared to the total return for the Russell 2000 Index (“Index”) over the performance Measurement Period. The ultimate number of MSUs that vest may range from 0% to 200% of the original target number of shares depending on the relative achievement of the TSR performance measure at the end of the Measurement Period. The grant date fair value of MSUs are estimated using a Monte Carlo simulation model and are expensed over the requisite service period rendered. Assumptions and estimates utilized in the model include expected volatilities of the Company’s stock and the Index, the Company’s risk-free interest rate and expected dividends. The probabilities of the actual number of MSUs expected to vest and resultant actual number of shares of common stock expected to be awarded are reflected in the grant date fair values of the various MSU awards; therefore, the compensation expense for the MSU awards is not adjusted based on the actual number of such MSU awards to ultimately vest. The following weighted-average assumptions for MSU grants for the last three fiscal years were used in the Monte Carlo simulation model: Expected volatility Risk-free interest rate Expected dividend yield 2022 Fiscal Year Ended August 31, 2021 2020 32.7% 0.6% 0.0% 28.5% 0.2% 0.0% 21.4% 1.4% 0.0% The expected volatility utilized is based on the historical volatilities of the Company’s common stock and the Index in order to model the stock price movements. The volatility used was calculated over the most recent 2.89-year period for MSUs granted during the fiscal year ended August 31, 2022 and over the most recent 2.88 and 2.90-year periods for MSUs granted during each of the fiscal years ended August 31, 2021 and 2020, respectively, which were the remaining terms of the performance Measurement Period at the dates of grant. The risk-free interest rates used are based on the implied yield available on a U.S. Treasury zero-coupon bill with a remaining term equivalent to the remaining performance Measurement Period. The expected dividend yield of zero was used in the Monte Carlo simulation model for the purposes of computing the relative TSR of the Company compared to the Index since it is the mathematical equivalent to reinvesting dividends in each issuing entity over the performance Measurement Period. F-27 A summary of the Company’s market share unit activity is as follows (in thousands, except share and per share amounts): Market Share Units Outstanding at August 31, 2021 Granted Performance factor adjustments Converted to common shares Forfeited Outstanding at August 31, 2022 (1) Number of Shares 36,594 13,195 8,890 (20,050) (1,428) 37,201 $ $ $ $ $ $ Weighted-Average Grant Date Fair Value Per Share Aggregate Intrinsic Value 194.83 232.99 186.38 182.13 208.74 212.66 $ 7,037 (1) This figure represents the total number of shares underlying MSU grants assuming achievement of the target number of shares at 100%. As the ultimate number of shares that vest could be as high as 200% of the target, the Company may be required to issue additional shares to satisfy outstanding MSU award grants. The weighted-average grant date fair value of all MSUs granted during the fiscal years ended August 31, 2022, 2021 and 2020 was $232.99, $184.96 and $216.77, respectively. The total intrinsic value of all MSUs converted to common shares was $4.4 million, $5.9 million and $4.4 million for the fiscal years ended August 31, 2022, 2021 and 2020, respectively. The income tax benefits from MSUs converted to common shares totaled $0.9 million for the fiscal year ended August 31, 2022, $1.3 million for the fiscal years ended August 31, 2021 and $0.9 million for the fiscal year ended August 31, 2020. Deferred Performance Units During fiscal year 2021, the Company discontinued the granting of new DPU awards. Although certain vested DPU awards granted in prior periods remain outstanding due to the deferred settlement feature contained within these award agreements, the expense associated with these awards has been fully recognized in prior periods. DPU awards converted to common shares issued to recipients following termination of employment from the Company were not material to the Company’s consolidated financial statements and related disclosures during fiscal years 2022, 2021 and 2020 respectively. Performance Share Units The PSU awards provide for performance-based vesting over a measurement period of the fiscal year in which the PSU awards are granted. The performance vesting provisions of the PSUs are based on relative achievement within an established performance measure range of the Company’s reported earnings before interest, income taxes, depreciation in operating departments, and amortization computed on a consolidated basis for the Measurement Year, before deduction of the stock-based compensation expense for the Vested PSUs and excluding other non-operating income and expense amounts (“Adjusted Global EBITDA”). The ultimate number of PSUs that vest may range from 0% to 100% of the original maximum number of DPUs awarded depending on the relative achievement of the Adjusted Global EBITDA performance measure at the end of the Measurement Year. The estimated fair value of each of the Company’s PSU awards was determined on the date of grant based on the closing market price of the Company’s common stock on the date of grant less the grant date present value of expected dividends during the vesting period for the PSUs, which are not entitled to receive dividend equivalents with respect to the unvested PSUs. F-28 A summary of the Company’s performance share unit activity is as follows (in thousands, except share and per share amounts): Performance Share Units Outstanding at August 31, 2021 Granted Performance factor adjustments Converted to common shares Forfeited Outstanding at August 31, 2022 (1) Number of Shares 18,252 18,684 - (18,252) (858) 17,826 $ $ $ $ $ $ Weighted-Average Grant Date Fair Value Per Share $197.51 227.24 - 197.51 227.24 Aggregate Intrinsic Value 227.24 $ 3,371,966 (1) PSUs pertaining to the measurement year of fiscal year 2022 were forfeited in October 2022 since performance conditions were not achieved. Performance is certified annually in October by the Company’s compensation committee subsequent to the Company’s fiscal year end and are forfeited, or vest, depending on performance achievement. The weighted-average grant date fair value of all PSUs granted during the fiscal years ended August 31, 2022 and 2021 was $227.24 and $197.51, respectively. This form of PSU awards were granted for the first time in October 2021. The total intrinsic value of all PSUs converted to common shares was $4.0 million for the fiscal year ended August 31, 2022. The income tax benefits from PSUs converted to common shares totaled $0.8 million for the fiscal year ended August 31, 2022. There were no conversions of PSUs to common shares for the fiscal years ended August 31, 2021 and 2020. Note 15. Other Benefit Plans The Company has a WD-40 Company Profit Sharing/401(k) Plan and Trust (the “Profit Sharing/401(k) Plan”) whereby regular U.S. employees who have completed certain minimum service requirements can defer a portion of their income through contributions to a trust. The Profit Sharing/401(k) Plan provides for Company contributions to the trust, as approved by the Board of Directors, as follows: 1) matching contributions to each participant up to 50% of the first 6.6% of compensation contributed by the participant; 2) fixed non-elective contributions in the amount equal to 10% of eligible compensation; and 3) a discretionary non-elective contribution in an amount to be determined by the Board of Directors up to 5% of eligible compensation. The Company’s contributions are subject to overall employer contribution limits and may not exceed the amount deductible for income tax purposes. The Profit Sharing/401(k) Plan may be amended or discontinued at any time by the Company. The Company’s contribution expense for the Profit Sharing/401(k) Plan was $4.1 million for fiscal year 2022, $3.9 million for fiscal year 2021 and $3.6 million for fiscal year 2020. The Company’s international subsidiaries have similar benefit plan arrangements, dependent upon the local applicable laws and regulations. The plans provide for Company contributions to an appropriate third-party plan, as approved by the subsidiary’s Board of Directors. The Company’s contribution expense related to the international plans was $2.1 million for the fiscal year ended August 31, 2022, $1.9 million for the fiscal year ended August 31, 2021 and $1.6 million for the fiscal year ended August 31, 2020. F-29 Note 16. Business Segments and Foreign Operations The Company evaluates the performance of its segments and allocates resources to them based on sales and operating income. The Company is organized on the basis of geographical area into the following three segments: the Americas; EMEA; and Asia- Pacific. Segment data does not include inter-segment revenues. Unallocated corporate expenses are general corporate overhead expenses not directly attributable to the business segments and are reported separate from the Company’s identified segments. The corporate overhead costs include expenses for the Company’s accounting and finance, information technology, human resources, research and development, quality control and executive management functions, as well as all direct costs associated with public company compliance matters including legal, audit and other professional services costs. Fiscal Year Ended August 31, 2022 Net sales Income from operations Depreciation and amortization expense Interest income Interest expense Fiscal Year Ended August 31, 2021 Net sales Income from operations Depreciation and amortization expense Interest income Interest expense Fiscal Year Ended August 31, 2020 Net sales Income from operations Depreciation and amortization expense Interest income Interest expense Americas EMEA Asia-Pacific Corporate (1) Total Unallocated $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 240,233 54,198 4,320 2 2,165 214,601 51,591 3,219 1 1,909 200,493 51,089 4,361 15 1,867 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 204,688 42,058 3,356 - 574 208,252 53,003 3,174 5 481 156,241 37,620 2,855 2 567 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 73,899 22,590 275 100 3 65,256 19,121 307 75 5 51,764 14,982 307 76 5 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ - (31,516) 343 - - - (34,874) 319 - - - (26,471) 178 - - $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 518,820 87,330 8,294 102 2,742 488,109 88,841 7,019 81 2,395 408,498 77,220 7,701 93 2,439 (1) Unallocated corporate expenses are general corporate overhead expenses not directly attributable to any one of the business segments. These expenses are reported separate from the Company’s identified segments and are included in Selling, General and Administrative expenses on the Company’s consolidated statements of operations. The Company’s Chief Operating Decision Maker does not review assets by segment as part of the financial information provided and therefore, no asset information is provided in the above table. Net sales by product group are as follows (in thousands): Fiscal Year Ended August 31, 2021 448,817 39,292 488,109 $ $ 2020 369,444 39,054 408,498 $ $ Maintenance products Homecare and cleaning products Total 2022 485,326 33,494 518,820 $ $ F-30 Net sales and long-lived assets by geographic area are as follows (in thousands): Net Sales by Geography: United States International Total Long-lived Assets by Geography (1) : United States International Total 2022 Fiscal Year Ended August 31, 2021 2020 $ $ $ $ 176,863 341,957 518,820 35,375 30,602 65,977 $ $ $ $ 164,946 323,163 488,109 37,204 32,941 70,145 $ $ $ $ 164,446 244,052 408,498 32,242 28,517 60,759 (1) Includes tangible assets and property and equipment, net, attributed to the geographic location in which such assets are located. Note 17. Subsequent Event Dividend Declaration On October 11, 2022, the Company’s Board of Directors declared a cash dividend of $0.78 per share payable on October 31, 2022 to shareholders of record on October 21, 2022. F-31 CORPORATE INFORMATION BOARD OF DIRECTORS Garry O. Ridge Chairman of the Board WD-40 Company Steven A. Brass President and Chief Executive Officer WD-40 Company Daniel T. Carter Audit Committee Chair Former Executive Vice President and Chief Financial Officer BevMo! Inc. Melissa Claassen Vice President Finance, Emerging Markets adidas AG Eric P. Etchart Corporate Governance Committee Chair Former Senior Vice President The Manitowoc Company, Inc. Lara L. Lee Former President Orchard Supply Hardware Edward O. Magee, Jr. Executive Vice President, Operations Fender Musical Instruments Corporation Trevor I. Mihalik Finance Committee Chair Executive Vice President and CFO Sempra Energy Graciela I. Monteagudo Former Chief Executive Officer and President Lala U.S., Inc. David B. Pendarvis Chief Administrative Officer, Global General Counsel and Secretary ResMed Inc. Gregory A. Sandfort Lead Independent Director Former Chief Executive Officer Tractor Supply Company Anne G. Saunders Compensation Committee Chair Former President, U.S. nakedwines.com Designed and produced by Mentus STOCK INFORMATION The common stock of the Company is traded on the NASDAQ® Global Select Market under the symbol “WDFC.” The Company’s publicly filed reports, including financial statements and supporting exhibits, are available on the Securities and Exchange Commission’s EDGAR system, on the Company’s website at www.wd40company.com, or by writing to the Corporate Secretary, WD-40 Company, 9715 Businesspark Avenue, San Diego, CA 92131. LEGAL DISCLAIMERS This annual report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management’s current expectations for the Company’s future performance but are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated in or implied by the forward- looking statements. Our forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “could,” “may,” “aim,” “anticipate,” “target,” “estimate” and similar expressions. The Company’s expectations, beliefs and projections are expressed in good faith but there can be no assurance that they will be achieved or accomplished. Actual events or results can differ materially from those expressed or implied. Please refer to the information set forth under the captions “Risk Factors” and “Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended August 31, 2022 and other reports and documents that we file from time to time with the Securities and Exchange Commission for some of the factors that may cause actual results to differ materially from the forward- looking statements. Except as required by law, we undertake no obligation to update any forward-looking statement. Copyrighted © 2022 WD-40 Company All rights reserved. WD-40, WD-40 Smart Straw, WD-40 BIKE, WD-40 EZ-REACH, WD-40 Flexible, WD-40 Specialist, 3-IN-ONE, Spot Shot, Lava, GT85, Solvol, 1001, no vac, 2000 Flushes, X-14 and Carpet Fresh are, where designated, registered trademarks of WD-40 Company or one of its subsidiaries in the primary markets in which they are used, or such marks are unregistered trademarks of WD-40 Company and its subsidiaries. Corporate information as of October 17, 2022. EXECUTIVE OFFICERS Steven A. Brass President and Chief Executive Officer Geoffrey J. Holdsworth Managing Director, Asia-Pacific Phenix Q. Kiamilev Vice President, General Counsel and Corporate Secretary Jeffrey G. Lindeman Vice President, Global Organizational Development William B. Noble Managing Director, EMEA Patricia Q. Olsem Division President, Americas Jay W. Rembolt Vice President, Finance, Treasurer and Chief Financial Officer INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP San Diego, California TRANSFER AGENT Computershare P.O. Box 43078 Providence, RI 02940-3078 Phone: +1-781-575-2879 https://www-us.computershare.com/investor/contact ANNUAL MEETING December 13, 2022, 10:00 AM Pacific Standard Time www.meetnow.global/M9Z7T5K INVESTOR RELATIONS Wendy D. Kelley Vice President, Stakeholder and Investor Engagement Phone: +1-619-275-9304 investorrelations@wd40.com PHYSICAL ADDRESS WD-40 Company 9715 Businesspark Avenue San Diego, California 92131 Phone: +1-858-251-5600 OPERATING SUBSIDIARIES WD-40 Company Limited Milton Keynes, United Kingdom WD-40 Company (Canada) Ltd. Etobicoke, Canada WD-40 Company (Australia) Pty. Limited Epping, Australia Wu Di (Shanghai) Industrial Co., Ltd. Shanghai, China WD-40 Company (Malaysia) SDN. BHD. Selangor, Malaysia WD-40 Co. Mexico, S. de R.L. de C.V. Monterrey, Nuevo León, Mexico Diversity at WD-40 Company refers to the variety of individual characteristics that make us unique, such as our backgrounds, experiences, qualities, talent, traits, beliefs, preferences, and the challenges we have met and overcome DIVERSITY EQUITY Equity at WD-40 Company refers to the state, quality, and ideal of being just, impartial and fair within the context of each individual’s reality INCLUSION Inclusion at WD-40 Company refers to our practices of fostering a culture where all individuals are recognized, valued, respected, and experience a sense of belonging within the tribe BELONGING Belonging at WD-40 Company refers to the feeling of acceptance and inclusion WD-40 COMPANY 9715 BUSINESSPARK AVENUE SAN DIEGO, CA 92131 858-251-5600 W W W.WD40COMPANY.COM TO VIEW OUR 2022 ESG REPORT, PLEASE VISIT: W W W.WD40COMPANY.COM/OUR-COMPANY/CORPORATE-RESPONSIBILITY 

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