FY 2014 Corporate Overview. Updated: April 2015

Transcription

1 FY 2014 Corporate Overview Updated: April 2015

2 Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company, its subsidiaries and its legal entities. WD-40 Company markets multi-purpose maintenance products ( MPMP ) under the WD-40, 3-IN-ONE and GT85 brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist and WD-40 BIKE TM product lines. WD- 40 Company markets the following homecare and cleaning ( HCCP ) brands: X-14 mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes automatic toilet bowl cleaners, Carpet Fresh and no vac rug and room deodorizers, Spot Shot aerosol and liquid carpet stain removers, 1001 household cleaners and rug and room deodorizers and Lava and Solvol heavy-duty hand cleaners. Except for the historical information contained herein, this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Such statements reflect the Company s current expectations with respect to currently available operating, financial and economic information. These forward-looking statements are subject to certain 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 include, but are not limited to, discussions about future financial and operating results, including: growth expectations for multi-purpose maintenance products; expected levels of promotional and advertising spending; 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; and forecasted foreign currency exchange rates and commodity prices. Our forward-looking statements are generally identified with words such as believe, expect, intend, plan, could, may, aim, anticipate, estimate and similar expressions. The Company's expectations, beliefs and forecasts are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that the Company's expectations, beliefs or forecasts will be achieved or accomplished. Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I Item 1A, Risk Factors, in the Company s Annual Report on Form 10-K for the fiscal year ended August 31, 2014, and in the Company s Quarterly Report on Form 10-Q for the period ended February 28, 2015 which the Company expects to file with the SEC on April 9, All forward-looking statements included in this press release should be considered in the context of these risks. All forward-looking statements speak only as of April 8, 2015, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on our forward-looking statements. 2

3 WHO WE ARE 3

4 What Does A Good Business Look Like? Simple and easy to understand business model Dominant in its industry Superior returns on capital Sustainable competitive advantage Significant cash flow generation Strong balance sheet Growth opportunities Proven management team 4

5 WD-40 Company s Origins In the 1950 s a chemist in San Diego set out to create a compound that would prevent rust and corrosion. It took him 40 attempts to get the water displacing formula right, but the end result became the original secret formula for WD-40 Multi-Use Product ( MUP ) Rocket Chemical Company Incorporated WD-40 MUP is used by aerospace industry and on the SM-65 Atlas missile 1958 WD-40 MUP makes its first appearance on store shelves in San Diego 1970 The name WD-40 Company was adopted 1973 WD-40 Company goes public on the NASDAQ; stock increases 61% on first trading day 1993 MUP sales reach $100 million in annual sales Acquired 3-in-ONE, Lava, Solvol, 2000 Flushes, X-14, Carpet Fresh, and Spot Shot 1997 Garry Ridge named president and CEO 2008 For the first time over 50% of net sales generated outside of the United States 2011 Introduced WD- 40 Specialist product line In 2014 Over 61 years of growth, flagship WD-40 brand is more popular than ever, Company achieved over $383 million in net sales in FY2014 and its products are available in over 176 countries and territories worldwide 5

6 Guiding Principles Vision Create positive lasting memories by solving problems in workshops, factories and homes around the world. Values We value doing the right thing. We value creating positive lasting memories in all our relationships. We value making it better than it is today. We value succeeding as a tribe while excelling as individuals. We value owning it and passionately acting on it. We value sustaining the WD-40 Company economy. 6

7 People - Products - Passion SERVANT LEADERSHIP WITH AN EDGE Results in a tribal culture that values: Caring Candor Accountability Responsibility 2010 The Learning Moment Inc. All rights reserved. Do not duplicate. thelearningmoment.net 7

8 2014 Employee Engagement Survey Results Question Result Average of all questions 93.7 I understand how my job contributes to achieving WD-40 Company s goals I know what results are expected of me I love to tell people that I work for WD-40 Company I am clear on the company s goals I respect my supervisor I feel my opinions and values are a good fit with the WD-40 Company culture WD-40 encourages employees to continually improve in their job, to make it better 96.3 I am excited about WD-40 Company s future direction My definition of success is having the opportunity to enjoy what I do for a living and I have found that here. The achievement is attributable to its people and company values. - Nani Pham, Financial Systems Analyst 8

9 Strategic Initiatives 1. Grow WD-40 Multi-Use Product Maximize the WD-40 product line through geographic expansion and increased market penetration. More places, more people, more uses, more frequently. 2. Grow the WD-40 Specialist Product Line Leverage the WD-40 brand to grow specialist by developing new products and product categories within identified geographies and platforms. 3. Broaden Product and Revenue Base Leverage the recognized strengths of WD-40 Company to derive revenue from new sources and brands. 4. Attract, Develop and Retain Outstanding Tribe Members Succeed as a tribe while excelling as individuals. 5. Operational Excellence Continuous improvement by optimizing resources, systems and processes. 9

10 Our Brands MULTI-PURPOSE MAINTENANCE PRODUCTS HOMECARE AND CLEANING PRODUCTS WD-40 Multi-Use Product WD-40 Specialist 3-IN-ONE WD -40 Bike GT85 Currently make up over 85% of net sales Core strategic focus and growth engine X Flushes Carpet Fresh No Vac Spot Shot 1001 Lava Solvol Available in niche segments and geographies Generate positive cash flows but are not core strategic focus 10

11 Our End Users Maintenance, Repair & Overhaul Construction & Skilled Trades At-Home Doer-Enthusiast At-Home Non-Enthusiast The majority of sales of multipurpose maintenance products come from end-users in workshops and factories 8 out of 10 U.S. households have at least one can of WD-40 Multi-Use Product in their home 11

12 THE OPPORTUNITY 12

13 Global Opportunity WD-40 Company products are currently available in over 176 countries and territories worldwide 97% product awareness of WD-40 MUP among U.S. males expanded MUP sales nearly 2% in FY 2014 Germany is the second largest DIY market in the world brand awareness around 65% expanding distribution in the country is a key focus area China is an emerging market with significant long-term opportunity - expanded MUP sales over 5% in FY 2014 The Company s unique global infrastructure enables it to take its products to more places, with more people, who have more uses, more frequently. 13

14 Unique Distribution Strategy ACME TOOLS One brand, one trade channel, multiple products Multiple brands, multiple trade channels, multiple products 14

15 Physical Awareness Make it EASY TO BUY by maximizing store placement and shelf space 15

16 Leveraging the Trust in the Brand 16

17 WD-40 Specialist Product Line Examples General Maintenance Motor Bike Lawn and Garden Our first line of specialty products worthy of wearing the WD-40 Shield 17

18 INVESTMENT PERFORMANCE 18

19 5-Year Comparison of Total Stockholder Return Value of $100 Invested on August 31, 2009 $300 $280 $260 $240 $220 $200 $180 $160 $140 $120 $100 $80 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 WD-40 Company S&P 500 Russell 2000 *$100 invested on 8/31/09 in stock or index, including reinvestment of dividends. 19

20 What drove the performance? SOLID FINANCIAL FOUNDATION Strong balance sheet Predictable free cash flow Strong liquidity & access to capital FOCUSED ON CREATING VALUE High Returns on Invested Capital ROIC was 22.3% in FY11, 23.5% in FY12, 27.7% in FY13 and 28.2% in FY14 Employee earned incentives tied to EBITDA growth EFFICIENT BUSINESS MODEL WITH ASSET-LIGHT STRATEGY Average annual CAPEX needs of ~1% of net sales Outsourced manufacturing and distribution Sales per employee of $0.97M in FY 2014 GROWTH PLATFORM SUPPORTED BY STRONG BRANDS Brand portfolio includes many well-known brands and products Global diversification reduces risk Long runway of growth ahead We invest in brands and people, not factories and warehouses 20

21 Strong Brands with a Global Reach Nearly doubled MPMP sales over the last 10 years despite macroeconomic challenges Global financial crisis Largest ever turndown in U.S. housing Largest GDP decline in Eurozone history Largest drop in U.S. auto production $327 $338 $263 $280 $289 $170 $186 $202 $217 $230 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 1) In millions all years at FY14 foreign currency exchange rates 21

22 Global MPMP Sales by Segment $160 $140 $120 $100 $80 $60 $40 $20 MPMP Sales by Segment $- FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Americas EMEA Asia-Pac 1) In millions all years at FY14 foreign currency exchange rates 22

23 50/30/20 RULE 23

24 The 50/30/20 Rule WD-40 Company s business is guided by the 50/30/20 Rule if gross margin is above 50% of net sales and cost of doing business is 30% or less, EBITDA will be above 20% 50 Gross Margin Above 50% of net sales - 30 Cost of Doing Business (1) At or below 30% of net sales Maintenance CAPES & Regular Dividends Maintenance CAPEX of between EBITDA $2M to $4M (1) per fiscal year Annual dividends targeted Above at ~50% 20% of of earnings net sales or ~$20M = 20 1) See appendix for descriptions and reconciliations of these non-gaap measures. 24

25 The 50 - Gross Margin FY 2014 the Company achieved its highest annual gross margin in a decade at 52% compared to 51% FY 2013 Continually focus on driving gross margin improvement New product development, innovations and reformulations Operational efficiencies Product mix and market mix FY12 49% FY13 51% FY14 52% Pricing adjustments as needed to offset input cost increases Gross margin can be impacted positively and negatively by things not under the Company s control like changes in foreign currency exchange rates and changes in input costs 25

26 Crude Oil Trends $150 $140 4-Year Crude Oil Price Trend $130 $120 $110 $100 $90 $80 $70 Our considered range in the planning process for the cost of a crude oil is $85-$110 per barrel $60 $50 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 Source: New York Mercantile Exchange - WTI Oil Futures CLF5 (1/1/11 1/1/15) 26

27 What Makes Up the Cost of a Can? Approximate Cost Breakdown of a Typical Can of WD-40 MUP Manufactured in the United States 3% 21% 30% 12% 35% Corrugate Plastic Can Manufacturing Fees Petroleum-Based Specialty Chemicals We estimate only a small portion of the input costs associated with petroleumbased specialty chemicals directly correlate to the price of a barrel of crude oil Data as of February Represents average input costs over 6-month period of a typical 12 ounce can of WD-40 Multi-Use Product manufactured in the United States. 27

28 The 30 Cost of Doing Business FY 2014 cost of doing business was at 34% of net sales compared to 35% FY 2013 Cost of Doing Business In FY 2014 cost of doing business came from three primary areas: People Marketing, advertising and promotion Freight costs to get products to customers Additional investments in brand protection, new product development, and regulatory and quality assurance remain a high priority People A&P Investment Freight Other Revenue growth is the most important factor in achieving the 30 target 28

29 FY /30/20 Results 50/30/20 Business Model Target FY14 FY13 FY12 Gross Margin 50% 52% 51% 49% Cost of Doing Business 30% 34% 35% 33% EBITDA 20% 18% 17% 16% * See appendix for descriptions and reconciliations of these non-gaap measures. Note: Percentages may not aggregate to EBITDA percentage due to rounding 29

30 CAPITAL ALLOCATION 30

31 Capital Allocation Strategy 1 Long-term Growth & Return Targets Drive revenue and earnings growth of 6-8% Target return on invested capital of >20% 2 3 Liquidity, Debt & Cash Objectives Adequate liquidity to support growth strategy Strong balance sheet & available lines of credit - cash & debt in in neutral position Long-term Growth & Return Targets Drive revenue and earnings growth of 6-8% Maintenance Target return CAPES CAPEX on invested & Regular capital Dividends of >20% Maintenance CAPEX of between $2M to $4M per fiscal year Annual Annual dividends dividends targeted targeted at ~50% at of ~50% earnings of earnings or ~$20M or ~$20M per fiscal year 4 Excess Capital Allocated to the Highest Return Alternative Organic Growth Initiatives Acquisitions Share Repurchases 31

32 Cash Returns to Stockholders Dividends $ % $ % $ % $ % 47% $1.34 Over $92.3 million in cash dividends paid to shareholders over past five years Paid dividends without interruption for over 40 years Future increases expected to grow in-line with earnings over time FY10 FY11 FY12 FY13 FY14 FY Dividend per Share Dividend Payout Ratio Share Repurchases $41,399 $39,840 $42,773 $31,437 FY11 FY12 FY13 FY14 Two share repurchase plans in place through August 31, 2016 Under current $60 million plan Company repurchased 648,138 shares at a total cost of $45.4 million between August 1, 2013 and August 31, 2014 New $75 million share repurchase plan recently authorized becomes effective when current $60 million plan is exhausted Share Repurchases 32

33 FY 2014 FINANCIAL RESULTS 33

34 FY 2014 Financial Results Financial Results (As reported) FY14 FY13 Change Net Sales $383.0 $ % Gross Profit (%) 51.9% 51.3% 60 bps Operating Income $63.7 $ % Net Income $43.7 $ % EPS (Diluted) $2.87 $ % Financial Results (Constant currency basis) FY14 CC* FY13 Change Net Sales $377.7 $ % Operating Income $62.7 $ % Net Income $43.0 $39.8 8% EPS (Diluted) $2.84 $ % *FY 2014 results translated at FY 2013 foreign currency exchange rates ANNUAL MEET ING

35 FY 2014 Net Sales Total Net Sales FY 2012 FY 2013 FY 2014 $342.8 $368.5 $383.0 Sales by Product Group Sales by Segment $286.5 $320.9 $337.8 $177.4 $180.5 $180.8 $116.9 $137.4 $151.4 $56.3 $47.6 $45.2 FY12 FY13 FY14 $48.5 $50.6 $50.8 FY12 FY13 FY14 Multi-Purpose Maintenance Homecare and Cleaning Americas EMEA Asia-Pacific 35

36 LAST WORD 36

37 What Does A Good Business Look Like? Simple and easy to understand business model Dominant in its industry Superior returns on capital Sustainable competitive advantage Significant cash flow generation Strong balance sheet Growth opportunities Proven management team 37

38 APPENDIX 38

39 Non-GAAP Reconciliation (1) This presentation contains certain non-gaap (accounting principles generally accepted in the United States of America) measures, that our management believes provide our shareholders with additional insights into WD-40 Company s results of operations and how it runs its business. Our management uses these non-gaap financial measures in order to establish financial goals and to gain an understanding of the comparative performance of the Company from year to year or quarter to quarter. The non-gaap measures referenced in this presentation, which include EBITDA (earnings before interest, income taxes, depreciation and amortization) and the cost of doing business, 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 the Company s performance or operations. Reconciliations of these non-gaap financial measures to the WD-40 Company financials as prepared under GAAP are as follows: Fiscal Years Ended Cost of doing business: 8/31/2014 8/31/2013 8/31/2012 Total operating expenses - GAAP $ 135,116 $ 132,526 $ 116,753 Amortization of definite-lived intangible assets (2,617) (2,260) (2,133) Impairment of definite-lived intangible assets - (1,077) - Depreciation (in operating departments) (2,218) (1,850) (1,597) Cost of doing business $ 130,281 $ 127,339 $ 113,023 Net sales $ 382,997 $ 368,548 $ 342,784 Cost of doing business as a percentage of net sales 34% 35% 33% EBITDA: Net income - GAAP $ 43,746 $ 39,813 $ 35,485 Provision for income taxes 19,213 17,054 15,428 Interest income (596) (506) (261) Interest expense 1, Amortization of definite-lived intangible assets 2,617 2,260 2,133 Depreciation 3,243 3,009 2,736 EBITDA $ 69,225 $ 62,323 $ 56,250 Net sales $ 382,997 $ 368,548 $ 342,784 EBITDA as a percentage of net sales 18% 17% 16% 39

40 Investment Snapshot GLOBAL, DIVERSE BUSINESS Products available in over 176 countries and territories worldwide More than half of revenues were outside the U.S. Brands sold in multiple channels: retail, industrial, institutional Portfolio of 11 brands EFFICIENT OPERATION 395 employees as of 8/31/14 Sales per employee of $0.97M SMALL MARKET CAP Approximately $1.1 billion* 14.6M shares outstanding* Statistics as of FY14 unless noted otherwise *as of 11/25/2014 Source: Nasdaq Online **13F Report 12/31/14 ASSET-LIGHT STRATEGY Average annual CAPEX needs of ~1% of net sales Outsourced manufacturing and distribution CURRENT AND LONG-TERM RETURN TO SHAREHOLDERS Dividend yield of 2.0%* Dividend payout ratio of 47% Dividend increases every year since fiscal year 2011 Share repurchases of $40M in FY12, $31M in FY13, and $43M in FY14 Two share repurchase plans in place through August 2016 FINANCIAL FOUNDATION Strong balance sheet Strong free cash flow Strong liquidity & access to capital FOCUSED ON CREATING VALUE ROIC emphasis - ROIC was 22.3% in FY11, 23.5% in FY12, 27.7% in FY13 and 28.2% in FY14 Employee earned incentives tied to EBITDA targets PRIORITY IN NEW PRODUCT DEVELOPMENT (NPD) INVESTMENT NPD has touched every brand NPD priority is MPMP category Ownership** Insiders: 4% Institutions: 73% Institutions holding 5% or more shares: Parnassus Investments, Blackrock Institutional Trust, Vanguard Group, Kayne Anderson Rudnick 40

41 Q2 FY15 Earnings Results April 8, 2015

42 Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company, its subsidiaries and its legal entities. WD-40 Company markets multi-purpose maintenance products ( MPMP ) under the WD-40, 3-IN-ONE and GT85 brand names. Currently included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist and WD-40 BIKE TM product lines. WD- 40 Company markets the following homecare and cleaning ( HCCP ) brands: X-14 mildew stain remover and automatic toilet bowl cleaners, 2000 Flushes automatic toilet bowl cleaners, Carpet Fresh and no vac rug and room deodorizers, Spot Shot aerosol and liquid carpet stain removers, 1001 household cleaners and rug and room deodorizers and Lava and Solvol heavy-duty hand cleaners. Except for the historical information contained herein, this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Such statements reflect the Company s current expectations with respect to currently available operating, financial and economic information. These forward-looking statements are subject to certain 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 include, but are not limited to, discussions about future financial and operating results, including: growth expectations for multi-purpose maintenance products; expected levels of promotional and advertising spending; 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; and forecasted foreign currency exchange rates and commodity prices. Our forward-looking statements are generally identified with words such as believe, expect, intend, plan, could, may, aim, anticipate, estimate and similar expressions. The Company's expectations, beliefs and forecasts are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that the Company's expectations, beliefs or forecasts will be achieved or accomplished. Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I Item 1A, Risk Factors, in the Company s Annual Report on Form 10-K for the fiscal year ended August 31, 2014, and in the Company s Quarterly Report on Form 10-Q for the period ended February 28, 2015 which the Company expects to file with the SEC on April 9, All forward-looking statements included in this press release should be considered in the context of these risks. All forward-looking statements speak only as of April 8, 2015, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on our forward-looking statements. 42

43 Q2 FY15 Highlights We are pleased with the solid performance of our underlying business this quarter and are more confident than ever that our strategic initiatives are well positioned to carry us into the future. - Garry Ridge Net sales for the second quarter were $97.3 million, an increase of 3 percent compared to the prior year fiscal quarter Net income for the second quarter was $11.3 million, an increase of 10 percent compared to the prior year fiscal quarter Diluted earnings per share were $0.76 in the second quarter, compared to $0.67 per share for the prior year fiscal quarter Gross margin was 52.6 percent in the second quarter compared to 51.6 percent in the prior year fiscal quarter All repurchases under the $60 million share buy-back plan completed during the second quarter From August 1, 2013 through February 28, 2015 Company repurchased 848K shares at a total cost of $60 million New repurchase plan is now effective which authorizes the Company to acquire up to $75 million of its outstanding shares through August 31, 2016 As of February 28, 2015 no repurchases had been made under this new plan 43

44 SALES RESULTS 44

45 Foreign Currency Landscape Transaction currency Currency in which sales, costs, expenses are transacted; typically the same as that of the country in which the sales transaction takes place Conversion from transaction currency to subsidiaries functional currency Functional currency Main currency in which subsidiaries conduct business; typically the same as that of the country in which the subsidiary is headquartered Translation from functional currency to WD-40 Company s reporting currency (U.S. dollar) Reporting currency As a U.S. based company the reporting currency of WD- 40 Company is the U.S. dollar 45

46 Translation Impacts Transaction currency Currency in which sales, costs, expenses are transacted; typically the same as that of the country in which the sales transaction takes place In Q2 FY15 the Company experienced negative impacts from the translation of all of the results of its foreign subsidiaries into the U.S. dollar Conversion from transaction currency to subsidiaries functional currency Functional currency Main currency in which subsidiaries conduct business, typically the same as that of the country in which the subsidiary is headquartered WD-40 Company has the following foreign operating subsidiaries that generate sales and which have a functional currency other than the U.S. dollar: United Kingdom (EMEA) Canada (Americas) Australia (Asia-Pac) China (Asia-Pac) Translation from functional currency to WD-40 Company s reporting currency (U.S. dollar) Reporting currency As a U.S. based company the reporting currency of WD- 40 Company is the U.S. dollar The results of all of the Company s foreign subsidiaries must be translated into U.S. dollars Depending on current foreign currency trends, translation can have positive or negative impacts on reported results We frequently report our results in constant currency which means we compare current period results to the prior periods results at the prior period s exchange rates 46

47 Conversion Impacts Transaction currency Currency in which sales, costs, expenses are transacted; typically the same as that of the country in which the sales transaction takes place The Company s U.K. subsidiary (EMEA), records transactions in currencies other than its functional currency, including the euro and the U.S. dollar Conversion from transaction currency to subsidiaries functional currency Functional currency Main currency in which subsidiaries conduct business; typically the same as that of the country in which the subsidiary is headquartered Translation from functional currency to WD-40 Company s reporting currency (U.S. dollar) Reporting currency As a U.S. based company the reporting currency of WD- 40 Company is the U.S. dollar Therefore these euro and U.S. dollar transactions must be converted to the U.K. subsidiary functional currency (pound sterling) Depending on current foreign currency trends, this conversion can have positive or negative impacts on pound sterling reported results Country/Region of Sale United Kingdom Direct Markets European Direct Markets European Marketing Distributors U.K. Subsidiary (EMEA) Transaction Currency Impacts - Sales Transaction Currency % of EMEA Segment Sales Q2 FY15 Foreign Currency Conversion Impact Pound sterling ~20% None Euro ~45% Unfavorable US dollar Pound sterling ~25% ~10% Favorable None 47

48 Net Sales by Product Group Second Quarter Sales by Product Group ($M) Second Quarter Global Product Group Sales Mix $94.2 $97.3 $83.8 $86.6 $10.4 $10.7 Q2 FY14 Q2 FY15 Homecare and cleaning product sales 11% Multi-purpose maintenance product sales 89% Year-to-Date Sales by Segment ($M) $189.7 $167.8 $171.5 $21.9 $22.2 YTD FY14 Multi-Purpose Maintenance Products $193.7 YTD FY15 Homecare and Cleaning Products Multi-Purpose Maintenance Product Sales Second Quarter Year-to-Date MPMP (Total) 3% 2% Americas -1% 1% EMEA 1% -2% Asia-Pacific 32% 21% Homecare and Cleaning Product Sales Second Quarter Year-to-Date HCCP (Total) 3% 1% Americas 0% -1% EMEA 8% 1% Asia-Pacific 11% 12% 48

49 Net Sales by Segment Second Quarter Sales by Segment ($M) $94.2 $97.3 $45.2 $44.7 $38.1 $38.7 $10.9 $13.9 Q2 FY14 Q2 FY15 Year-to-Date Sales by Segment ($M) $189.7 $193.7 $89.3 $89.5 $74.6 $73.3 $25.8 $30.9 YTD FY14 YTD FY15 Americas Second Quarter Americas (Total) -1% 0% United States -1% -1% Latin America -6% 7% Canada -1% -7% EMEA Second Quarter EMEA (Total) 1% -2% Direct Markets -3% -5% Marketing Distributors 9% 2% Asia-Pacific Second Quarter Year-to-Date Year-to-Date Year-to-Date Asia-Pacific (Total) 28% 20% Australia -2% -1% China 57% 12% Asian Marketing Distributors 44% 39% Americas EMEA Asia-Pacific 49

50 FINANCIAL RESULTS 50

51 Gross Margin Results Q2 Gross Margin up 1.00 pp Q2 FY15 GM of 52.6% vs. Q2 FY14 GM of 51.6% Changes in petroleum-based specialty chemicals and aerosol cans (+1.3pp) Lower promotional discounts (+0.5pp) Price increases, primarily in Asia-Pacific (+0.2pp) Changes in foreign currency exchange rates in EMEA (-0.2pp) Sales mix and miscellaneous costs (-0.8pp) YTD Gross Margin up 0.3 pp YTD FY15 GM of 52.1% vs. YTD FY14 GM of 51.8% Changes in petroleum-based specialty chemicals and aerosol cans (+1.0pp) Price increases, primarily in Asia-Pacific (+0.2pp) Sales mix and miscellaneous costs (-0.5pp) Changes in foreign currency exchange rates in EMEA (-0.4pp) Gross margin can be impacted positively and negatively by things not under the Company s control like changes in foreign currency exchange rates and changes in input costs 51

52 What Makes Up the Cost of a Can? Approximate Cost Breakdown of a Typical Can of WD-40 MUP Manufactured in the United States 3% 21% 30% 12% 35% Corrugate Plastic Can Manufacturing Fees Petroleum-Based Specialty Chemicals We estimate only a small portion of the input costs associated with petroleumbased specialty chemicals directly correlate to the price of a barrel of crude oil Data as of February Represents average input costs over 6-month period of a typical 12 ounce can of WD-40 Multi-Use Product manufactured in the United States. 52

53 50/30/20 Results 50/30/20 Business Model Target Q2 FY15 Q2 FY14 Q2 FY13 Gross Margin 50% 53% 52% 51% Cost of Doing Business 30% 34% 34% 33% EBITDA 20% 18% 18% 19% * See appendix for descriptions and reconciliations of these non-gaap measures. Note: Percentages may not aggregate to EBITDA percentage due to rounding 53

54 Selected Financial Results Second quarter ($ in millions; except % change and EPS) Q2 FY15 Q2 FY14 % Change (1) Selling, general and administrative $27.4 $26.7 3% Advertising and sales promotion $5.5 $6.0-9% Amortization $0.8 $0.7 16% Total operating expenses $33.6 $33.3 1% Other expenses (2) $1.5 $ % Provision for income taxes $4.8 $4.6 3% Net Income $11.3 $ % EPS (Diluted) $0.76 $ % 1) Percentage change is based on whole numbers and not the rounded amounts as presented above. There will be minor calculation differences in percentages due to rounding. 2) Other expenses include interest income, interest expense and other expense. Other expense increased primarily due to higher foreign currency exchange losses as a result of significant fluctuations in the foreign currency exchange rates for the euro against the pound sterling. 54

55 Selected Financial Results Year to date ($ in millions; except % change and EPS) YTD FY15 YTD FY14 % Change (1) Selling, general and administrative $54.8 $53.4 3% Advertising and sales promotion $11.4 $11.6-2% Amortization $1.5 $1.2 22% Total operating expenses $67.7 $66.2 2% Other expenses (2) $1.6 $ % Provision for income taxes $9.5 $9.6-1% Net Income $22.1 $21.8 1% EPS (Diluted) $1.49 $1.41 6% 1) Percentage change is based on whole numbers and not the rounded amounts as presented above. There will be minor calculation differences in percentages due to rounding. 2) Other expenses include interest income, interest expense and other expense. Other expense increased primarily due to higher foreign currency exchange losses as a result of significant fluctuations in the foreign currency exchange rates for the euro against the pound sterling. 55

56 Condensed Balance Sheet ($ in millions; except % change) Q2 FY15 Q4 FY14 % Change (1) Cash and cash equivalents $43.7 $ % Short-term investments $42.1 $45.1-5% Other assets $252.0 $ % Total assets $337.7 $ % Revolving credit facility $103.0 $98.0 5% Other liabilities $74.2 $80.3-8% Total liabilities $177.2 $ % Total Shareholders' equity $160.6 $ % Total liabilities and shareholder's equity $337.7 $ % 1) Percentage change is based on whole numbers and not the rounded amounts as presented above. There will be minor calculation differences in percentages due to rounding. 56

57 GUIDANCE 57

58 Updated Fiscal Year 2015 Guidance* Sales Growth Between 1% and 4% Net Sales Gross Margin A&P Investment Net Income Diluted EPS Between $387 and $400 million Better than 52% In the range of 6.0% to 7.0% of net sales Between $45.1 and $46.0 million Between $3.07 and $3.13 based on 14.7 million shares outstanding Changes to guidance indicated in BLUE. * As of 4/8/15. This guidance does not include any future acquisitions or divestitures and is based on recent foreign currency exchange rates. 58

59 APPENDIX 59

60 Foreign Currency Translation Impact or Constant Currency - Q2 FY15 ($ in millions; except % change and EPS) Financial Results As reported Q2 FY15 Q2 FY14 % Change Net Sales $97.3 $94.2 3% Gross Profit (%) 52.6% 51.6% 100 bps Operating Income $17.6 $ % Net Income $11.3 $ % EPS (Diluted) $0.76 $ % Financial Results Constant currency basis Q2 FY15 CC* Q2 FY14 % Change Net Sales $100.6 $94.2 7% Operating Income $18.4 $ % Net Income $11.8 $ % EPS (Diluted) $0.80 $ % *Q2 FY15 results translated at Q2 FY14 foreign currency exchange rates 60

61 Foreign Currency Translation Impact or Constant Currency YTD ($ in millions; except % change and EPS) Financial Results (As reported) YTD FY15 YTD FY14 % Change Net Sales $193.7 $ % Gross Profit (%) 52.1% 51.8% 30 bps Operating Income $33.2 $32.0 4% Net Income $22.1 $21.8 1% EPS (Diluted) $1.49 $1.41 6% Financial Results (Constant currency basis) YTD FY15 CC* YTD FY14 % Change Net Sales $196.4 $ % Operating Income $33.9 $32.0 6% Net Income $22.6 $21.8 4% EPS (Diluted) $1.52 $1.41 8% *YTD FY15 results translated at YTD FY14 foreign currency exchange rates 61

62 Non-GAAP Reconciliation (1) This presentation contains certain non-gaap (accounting principles generally accepted in the United States of America) measures, that our management believes provide our stockholders with additional insights into WD-40 Company s results of operations and how it runs its business. Our management uses these non-gaap financial measures in order to establish financial goals and to gain an understanding of the comparative performance of the Company from year to year or quarter to quarter. The non-gaap measures referenced in this presentation, which include EBITDA (earnings before interest, income taxes, depreciation and amortization) and the cost of doing business, 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 the Company s performance or operations. Reconciliations of these non-gaap financial measures to the WD-40 Company financials as prepared under GAAP are as follows: Three Months Ended Six Months Ended Cost of doing business: Total operating expenses - GAAP $ 2/28/ ,602 $ 2/28/ ,306 Cost of doing business: Total operating expenses - GAAP $ 2/28/ ,710 $ 2/28/ ,212 Amortization of definite-lived intangible assets (757) (654) Amortization of definite-lived intangible assets (1,526) (1,246) Depreciation (in operating departments) (202) (529) Depreciation (in operating departments) (405) (1,014) Cost of doing business $ 32,643 $ 32,123 Cost of doing business $ 65,779 $ 63,952 Net sales $ 97,331 $ 94,184 Net sales $ 193,684 $ 189,725 Cost of doing business as a percentage of net sales 34% 34% Cost of doing business as a percentage of net sales 34% 34% EBITDA: Net income - GAAP $ 11,333 $ 10,317 Provision for income taxes 4,758 4,638 Interest income (178) (158) Interest expense Amortization of definite-lived intangible assets Depreciation EBITDA $ 17,802 $ 16,494 Net sales $ 97,331 $ 94,184 EBITDA as a percentage of net sales 18% 18% EBITDA: Net income - GAAP $ 22,119 $ 21,799 Provision for income taxes 9,507 9,625 Interest income (312) (289) Interest expense Amortization of definite-lived intangible assets 1,526 1,246 Depreciation 1,721 1,603 EBITDA $ 35,130 $ 34,425 Net sales $ 193,684 $ 189,725 EBITDA as a percentage of net sales 18% 18% 62