q3 fy16-earnings-presentation-final

Q3 FY16

July 7, 2016

Earnings Results

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Historical financial and operating data in this presentation reflect the consolidated results of WD-40 Company, its subsidiaries and its legal

entities. WD-40 Company markets maintenance products (“MP”) under the WD-40®, 3-IN-ONE® and GT85® brand names. Currently

included in the WD-40 brand are the WD-40 Multi-Use Product and the WD-40 Specialist® and WD-40 BIKETM 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 1995. 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 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, 2015 which the Company filed with the SEC on October 22, 2015 and in the Company’s Quarterly Report on Form 10-Q for the period

ended May 31, 2016 which the Company expects to file with the SEC on July 7, 2016.

All forward-looking statements included in this presentation should be considered in the context of these risks. All forward-looking statements

speak only as of July 7, 2016 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.

Forward-Looking Statements

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Q3 FY16 Q3 FY15 % Change

Net Sales $96.4 $92.5 4%

Gross Profit (%) 56.8% 53.3% 350 bps

Operating Income $18.7 $16.4 14%

Net Income $12.7 $11.0 16%

EPS (Diluted) $0.88 $0.75 17%

Q3 FY16 Results

• Top-line sales growth was impacted by foreign currency exchange

rates in Q3 FY16

• When you take both translation (or “constant currency”) and

transaction exposure into consideration, the impacts of foreign

currency exchange rates reduced our total net sales by approximately

$1.2 million

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STRATEGIC INITIATIVES

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1. Grow WD-40 Multi-Use Product

Maximize the product line through geographic expansion

and increased market penetration. More places, more

people, more uses, more frequently.

Double our WD-40 Multi-Use Product

net sales over the next 10 years

2. Grow the WD-40 Specialist Product Line

Leverage the WD-40 Specialist brand to grow specialist by

developing new products and product categories within

identified geographies and platforms.

Grow WD-40 Specialist to $125 million

in net sales over the next 10 years

3. Broaden Product and Revenue Base

Leverage the recognized strengths of WD-40 Company to

derive revenue from new sources and brands.

Continue to develop or acquire

maintenance products that fit well with

our unique multi-channel distribution

network

4. Attract, Develop and Retain Outstanding Tribe

Members

Succeed as a tribe while excelling as individuals.

Grow employee engagement to greater

than 95 percent

5. Operational Excellence

Continuous improvement by optimizing resources,

systems and processes as well as applying rigorous

commitment to quality assurance, regulatory compliance,

and intellectual property protection.

Execute the 55/30/25 business model

while safeguarding the “Power of the

Shield”

Strategic InitiativesTarget

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SALES UPDATE

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Functional currencyMain currency in which

subsidiaries conduct

business; typically the same

as that of the country in

which the subsidiary is

headquartered

Transaction currencyCurrency in which sales,

costs, expenses are

transacted; typically the

same as that of the country in

which the sales transaction

takes place

Reporting currencyAs a U.S. based company

the reporting currency of

WD-40 Company is the

U.S. dollar Conversion

from

transaction

currency to

subsidiaries’

functional

currency

Translation

from

functional

currency to

WD-40

Company’s

reporting

currency

Foreign Currency Impact

Translation

Impact

Transaction

Impact

Subsidiary

(Functional Currency)

UK – GBP

CANADA- CAD

AUSTRALIA- AUD

CHINA- CNY

Subsidiary

(Non-Functional Currency)

UK – USD & EUR

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Q3 FY16 net sales at Q3 FY16 FX rates Q3 FY16 net sales at Q3 FY15 FX rates Q3 FY16 net sales at Q3 FY15 FX rates

Foreign Currency Exchange Impact

In total

changes in FX

rates reduced

net sales by

~$1.2M in 3Q

FY16

$96.4

$99.2

$97.6

Reported Net Sales Translation Impact Transaction Impact

Translation Impact(Functional Currency)

Translation and

Transaction ImpactReporting Currency

Q3 FY16 Net Sales(In millions)

(constant currency) (constant currency plus transaction impacts)(as reported)

$2.8$1.6

$80

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$43.3 $42.2

$6.6 $7.6

Q3 FY16 Q3 FY15

Americas Net Sales(in millions)

Maintenance Products Homecare and Cleaning Products

Americas Segment

Americas – Q3 FY16 vs. Q3 FY15

$49.9 $49.8

• Total reported segment sales flat

• Segment makes up 52% of global sales

• Maintenance product sales ▲ 3%

• HCCP sales ▼ 13%

• Maintenance product (MP) sales:

• U.S. MP sales ▲ 5%

• Represents 84% of segment sales

• Latin America MP sales flat

• Canadian MP sales ▼ 16%

• Due to timing of promotional programs

and unstable market and economic

conditions in Western Canada

$0

10

$31.5 $28.8

$1.4

$1.5

Q3 FY16 Q3 FY15

EMEA Net Sales(in millions)


EMEA SegmentEMEA – Q3 FY16 vs. Q3 FY15

$30.3$32.9

• Total reported segment sales ▲ 9%


• Changes in foreign currency exchange rates

had an unfavorable impact on sales

• On a constant currency basis sales ▲ 16%


• HCCP sales ▼ 12%

• EMEA direct market sales ▲ 9%

• 68% of segment sales came from direct

markets

• In GBP-based markets sales ▲ 1% in GBP

• In EUR-based markets sales ▲ 15% in EUR

• EMEA distributor market sales ▲ 7%

• 32% of segment sales came from distributor

markets

• Sales increase due to improving market

conditions in Eastern Europe

$0

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$11.7 $10.6

$1.9

$1.8

Q3 FY16 Q3 FY15

Asia-Pacific Net Sales(in millions)


Asia-Pacific Segment

Asia-Pacific – Q3 FY16 vs. Q3 FY15

$12.4$13.6

• Total reported Asia-Pacific sales ▲ 10%


• Changes in foreign currency exchange

rates had an unfavorable impact on sales

• On a constant currency basis sales ▲ 14%


• HCCP sales ▲ 6%

• Australia sales flat

• In functional currency (AUD) sales ▲ 5%

• China sales ▼ 5%

• In functional currency (RMB) sales ▲ 1%

• Asia distributor market sales ▲ 32%

• Driven by successful promotional programs

$0

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THE 55/30/25 RULE

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Gross Margin

As the cost of crude oil continues to increase from the extremely low levels that flowed through our cost of goods

in the third quarter, we expect to see pressure on gross margin in the coming quarters

FY15

53%

FY14

52%

FY13

51%

Gross Margin – 53.3% Q3 FY15 vs. 56.8% Q3 FY16 (+3.5pp)

• Changes in petroleum-based specialty chemicals and aerosol

cans (+2.0pp)

• Lower advertising and promotional discounts (+1.0pp)

• Changes in foreign currency exchange rates in EMEA (+0.6pp)

• Price increases in Asia-Pacific and EMEA (+0.1pp)

• Warehousing and in-bound freight costs (+0.1pp)

• Sales mix and miscellaneous (-0.3pp)

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55/30/25 Results

* See appendix for descriptions and reconciliations of these non-GAAP measures.

Note: Percentages may not aggregate to EBITDA percentage due to rounding and because amounts recorded in other income (expense), net on the Company’s

consolidated statement of operations are not included in the EBITDA calculation.

55/30/25 Business Model Target Q3 FY16

Actuals

Q3 FY15

Actuals

Q3 FY14

Actuals

Gross Margin 55% 57% 53% 51%

Cost of Doing Business 30% 36% 34% 34%

EBITDA 25% 20% 19% 17%

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GUIDANCE

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Diluted EPS

Net Income

A&P Investment

Gross Margin

Net Sales

Sales Growth Slightly above fiscal year 2015

Between $378 and $383 million

Above 55%

Near 6.0%

Between $49.0 and $50.0 million

Between $3.40 and $3.47 based on 14.4

million shares outstanding

* As of 7/7/16. The assumptions in this guidance have been adjusted as it relates to foreign currency exchange rates to accommodate for current

events in Great Britain. This guidance does not include any future acquisitions or divestitures and assumes crude oil prices will remain close to

current levels for the remainder of the fiscal year.

Fiscal Year 2016 Guidance*

Changes to guidance indicated in BLUE.

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APPENDIX

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Foreign Currency Translation Impact or“Constant Currency” – Q3 FY16

Q3 FY16 CC* Q3 FY15 % Change

Net Sales $99.2 $92.5 7%


Net Income $13.0 $11.0 19%

EPS (Diluted) $0.90 $0.75 20%

Q3 FY16 Q3 FY15 % Change

Net Sales $96.4 $92.5 4%

Gross Profit (%) 56.8% 53.3% 350 bps


Net Income $12.7 $11.0 16%

EPS (Diluted) $0.88 $0.75 17%

Financial ResultsAs reported

Financial ResultsConstant currency basis

*Q3 FY16 results translated at Q3 FY15 foreign currency exchange rates

($ in millions; except % change and EPS)

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(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:

Non-GAAP Reconciliation – Q3 FY16

Cost of doing business:

Total operating expenses - GAAP $ 36,143 $ 32,900

Amortization of definite-lived intangible assets (740) (754)

Depreciation (in operating departments) (671) (649)

Cost of doing business $ 34,732 $ 31,497

Net sales $ 96,446 $ 92,485

Cost of doing business as a percentage of net sales 36% 34%

EBITDA:

Net income - GAAP $ 12,665 $ 10,965

Provision for income taxes 4,957 4,733

Interest income (186) (113)

Interest expense 433 343

Amortization of definite-lived intangible assets 740 754

Depreciation 842 823

EBITDA $ 19,451 $ 17,505

Net sales $ 96,446 $ 92,485

EBITDA as a percentage of net sales 20% 19%

Three Months Ended

5/31/2016 5/31/2015

Note: Percentages may not aggregate to EBITDA percentage due to rounding

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