Cover
Cover - USD ($) | 12 Months Ended | ||
Aug. 31, 2023 | Oct. 16, 2023 | Feb. 28, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Aug. 31, 2023 | ||
Current Fiscal Year End Date | --08-31 | ||
Document Transition Report | false | ||
Entity File Number | 000-06936 | ||
Entity Registrant Name | WD-40 COMPANY | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 95-1797918 | ||
Entity Address, Address Line One | 9715 Businesspark Avenue | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92131 | ||
City Area Code | 619 | ||
Local Phone Number | 275-1400 | ||
Title of 12(b) Security | Common stock, par value $0.001 per share | ||
Trading Symbol | WDFC | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,341,691,922 | ||
Entity Common Stock, Shares Outstanding | 13,556,684 | ||
Documents Incorporated by Reference | Documents Incorporated by Reference: The Proxy Statement for the annual meeting of stockholders on December 12, 2023 is incorporated by reference into Part III, Items 10 through 14 of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0000105132 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Aug. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | San Diego, California |
Auditor Firm ID | 238 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 48,143 | $ 37,843 |
Trade and other accounts receivable, net | 98,039 | 89,930 |
Inventories | 86,522 | 104,101 |
Other current assets | 15,821 | 17,766 |
Total current assets | 248,525 | 249,640 |
Property and equipment, net | 66,791 | 65,977 |
Goodwill | 95,505 | 95,180 |
Other intangible assets, net | 4,670 | 5,588 |
Operating lease right-of-use assets | 7,820 | 7,559 |
Deferred tax assets, net | 1,201 | 679 |
Other assets | 13,454 | 9,672 |
Total assets | 437,966 | 434,295 |
Current liabilities: | ||
Accounts payable | 30,826 | 32,852 |
Accrued liabilities | 30,000 | 27,161 |
Accrued payroll and related expenses | 16,722 | 11,583 |
Short-term borrowings | 10,800 | 39,173 |
Income taxes payable | 494 | 51 |
Total current liabilities | 88,842 | 110,820 |
Long-term borrowings | 109,743 | 107,139 |
Deferred tax liabilities, net | 10,305 | 10,528 |
Long-term operating lease liabilities | 5,832 | 5,999 |
Other long-term liabilities | 13,066 | 11,185 |
Total liabilities | 227,788 | 245,671 |
Commitments and Contingencies (Note 12) | ||
Stockholders’ equity: | ||
Common stock — authorized 36,000,000 shares, $0.001 par value; 19,905,815 and 19,888,807 shares issued at August 31, 2023 and 2022, respectively; and 13,563,434 and 13,602,346 shares outstanding at August 31, 2023 and 2022, respectively | 20 | 20 |
Additional paid-in capital | 171,546 | 165,973 |
Retained earnings | 477,488 | 456,076 |
Accumulated other comprehensive income (loss) | (31,206) | (36,209) |
Common stock held in treasury, at cost — 6,342,381 and 6,286,461 shares at August 31, 2023 and 2022, respectively | (407,670) | (397,236) |
Total stockholders’ equity | 210,178 | 188,624 |
Total liabilities and stockholders’ equity | $ 437,966 | $ 434,295 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Aug. 31, 2023 | Aug. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, authorized (in shares) | 36,000,000 | 36,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, issued (in shares) | 19,905,815 | 19,888,807 |
Common stock, outstanding (in shares) | 13,563,434 | 13,602,346 |
Treasury stock, shares (in shares) | 6,342,381 | 6,286,461 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Income Statement [Abstract] | |||
Net sales | $ 537,255 | $ 518,820 | $ 488,109 |
Cost of products sold | 263,035 | 264,055 | 224,370 |
Gross profit | 274,220 | 254,765 | 263,739 |
Operating expenses: | |||
Selling, general and administrative | 154,684 | 138,658 | 145,493 |
Advertising and sales promotion | 28,807 | 27,343 | 27,956 |
Advertising and sales promotion | 1,005 | 1,434 | 1,449 |
Total operating expenses | 184,496 | 167,435 | 174,898 |
Income from operations | 89,724 | 87,330 | 88,841 |
Other income (expense): | |||
Interest income | 231 | 102 | 81 |
Interest expense | (5,614) | (2,742) | (2,395) |
Other income (expense), net | 822 | (582) | (28) |
Income before income taxes | 85,163 | 84,108 | 86,499 |
Provision for income taxes | 19,170 | 16,779 | 16,270 |
Net income | $ 65,993 | $ 67,329 | $ 70,229 |
Earnings per common share: | |||
Basic (in dollars per share) | $ 4.84 | $ 4.91 | $ 5.11 |
Diluted (in dollars per share) | $ 4.83 | $ 4.90 | $ 5.09 |
Shares used in per share calculations: | |||
Basic (in shares) | 13,578 | 13,668 | 13,698 |
Diluted (in shares) | 13,604 | 13,696 | 13,733 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 65,993 | $ 67,329 | $ 70,229 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 5,003 | (10,179) | 2,178 |
Total comprehensive income | $ 70,996 | $ 57,150 | $ 72,407 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance (in shares) at Aug. 31, 2020 | 19,812,685 | |||||
Beginning balance at Aug. 31, 2020 | $ 160,313 | $ 20 | $ 157,850 | $ 398,731 | $ (28,208) | $ (368,080) |
Beginning balance (in shares) at Aug. 31, 2020 | 6,147,899 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under share-based compensation plan, net of shares withheld for taxes (in shares) | 44,180 | |||||
Issuance of common stock under share-based compensation plan, net of shares withheld for taxes | (3,668) | (3,668) | ||||
Stock-based compensation | 9,555 | 9,555 | ||||
Cash dividends | (38,225) | (38,225) | ||||
Foreign currency translation adjustment | 2,178 | 2,178 | ||||
Net income | 70,229 | 70,229 | ||||
Ending balance (in shares) at Aug. 31, 2021 | 19,856,865 | |||||
Ending balance at Aug. 31, 2021 | 200,382 | $ 20 | 163,737 | 430,735 | (26,030) | $ (368,080) |
Ending balance (in shares) at Aug. 31, 2021 | 6,147,899 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under share-based compensation plan, net of shares withheld for taxes (in shares) | 31,942 | |||||
Issuance of common stock under share-based compensation plan, net of shares withheld for taxes | (4,461) | (4,461) | ||||
Stock-based compensation | 6,697 | 6,697 | ||||
Cash dividends | (41,988) | (41,988) | ||||
Repurchases of common stock (in shares) | 138,562 | |||||
Repurchases of common stock | (29,156) | $ (29,156) | ||||
Foreign currency translation adjustment | (10,179) | (10,179) | ||||
Net income | $ 67,329 | 67,329 | ||||
Ending balance (in shares) at Aug. 31, 2022 | 13,602,346 | 19,888,807 | ||||
Ending balance at Aug. 31, 2022 | $ 188,624 | $ 20 | 165,973 | 456,076 | (36,209) | $ (397,236) |
Ending balance (in shares) at Aug. 31, 2022 | 6,286,461 | 6,286,461 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under share-based compensation plan, net of shares withheld for taxes (in shares) | 17,008 | |||||
Issuance of common stock under share-based compensation plan, net of shares withheld for taxes | $ (861) | (861) | ||||
Stock-based compensation | 6,434 | 6,434 | ||||
Cash dividends | (44,581) | (44,581) | ||||
Repurchases of common stock (in shares) | 55,920 | |||||
Repurchases of common stock | (10,434) | $ (10,434) | ||||
Foreign currency translation adjustment | 5,003 | 5,003 | ||||
Net income | $ 65,993 | 65,993 | ||||
Ending balance (in shares) at Aug. 31, 2023 | 13,563,434 | 19,905,815 | ||||
Ending balance at Aug. 31, 2023 | $ 210,178 | $ 20 | $ 171,546 | $ 477,488 | $ (31,206) | $ (407,670) |
Ending balance (in shares) at Aug. 31, 2023 | 6,342,381 | 6,342,381 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends, per share | $ 3.27 | $ 3.06 | $ 2.78 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | 22 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2023 | |
Operating activities: | ||||
Net income | $ 65,993 | $ 67,329 | $ 70,229 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 8,151 | 8,294 | 7,019 | |
Net gains on sales and disposals of property and equipment | (90) | (311) | (249) | |
Deferred income taxes | (1,254) | 596 | (1,334) | |
Stock-based compensation | 6,434 | 6,697 | 9,555 | |
Unrealized foreign currency exchange (gains) losses, net | (1,702) | 1,035 | (511) | |
Provision for credit losses | 391 | 143 | 210 | |
Write-off of inventories | 713 | 595 | 800 | |
Changes in assets and liabilities: | ||||
Trade and other accounts receivable | (5,339) | (7,443) | (6,595) | |
Inventories | 19,367 | (53,260) | (14,574) | |
Other assets | (1,367) | (12,578) | (5,343) | |
Operating lease assets and liabilities, net | 49 | (32) | 15 | |
Accounts payable and accrued liabilities | (213) | 5,208 | 15,485 | |
Accrued payroll and related expenses | 4,965 | (13,133) | 10,702 | |
Other long-term liabilities and income taxes payable | 2,293 | (536) | (695) | |
Net cash provided by operating activities | 98,391 | 2,604 | 84,714 | |
Investing activities: | ||||
Purchases of property and equipment | (6,871) | (8,303) | (15,059) | |
Proceeds from sales of property and equipment | 655 | 612 | 599 | |
Net cash used in investing activities | (6,216) | (7,691) | (14,460) | |
Financing activities: | ||||
Treasury stock purchases | (10,434) | (29,156) | 0 | $ (39,600) |
Dividends paid | (44,581) | (41,988) | (38,225) | |
Proceeds from issuance of long-term senior notes | 0 | 0 | 52,000 | |
Repayments of long-term senior notes | (800) | (800) | (800) | |
Net (repayments) proceeds from revolving credit facility | (28,372) | 38,394 | (50,056) | |
Shares withheld to cover taxes upon conversion of equity awards | (861) | (4,461) | (3,668) | |
Net cash used in financing activities | (85,048) | (38,011) | (40,749) | |
Effect of exchange rate changes on cash and cash equivalents | 3,173 | (5,020) | (6) | |
Net increase (decrease) in cash and cash equivalents | 10,300 | (48,118) | 29,499 | |
Cash and cash equivalents at beginning of period | 37,843 | 85,961 | 56,462 | |
Cash and cash equivalents at end of period | 48,143 | 37,843 | 85,961 | $ 48,143 |
Supplemental cash flow information: | ||||
Accrued capital expenditures | 80 | 960 | 1,123 | |
Cash paid for: | ||||
Interest | 5,522 | 2,687 | 2,319 | |
Income taxes, net of tax refunds received | $ 12,811 | $ 18,345 | $ 19,254 |
The Company
The Company | 12 Months Ended |
Aug. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | 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 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 hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, warehouse club stores, farm supply, sport retailers, and independent bike dealers. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Aug. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 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 accounting principles generally accepted in the United States of America (“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. Global economic conditions have been adversely impacted and financial markets have experienced significant volatility in recent years. 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 factors that have been subject to such volatility 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 its 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 Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance for credit losses 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 credit losses related to the Company’s trade accounts receivable was not significant at August 31, 2023 and 2022. 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 three three three three and three 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 Leases 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 value of lease payments over the lease term with lease expense recognized over the term of the lease. For leases that do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability at the lease commencement date using its estimated secured incremental borrowing rate, determined by 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. The Company records ROU assets and lease liabilities on its consolidated balance sheets for leases with an expected term greater than one year. 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 committed, non-cancelable period of the lease and options to renew, 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, IT equipment and third-party manufacturing facilities; and (ii) exclude leases with an initial term of twelve 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 2023, 2022 or 2021. 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 2023, 2022 or 2021. 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, 2023, 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 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 $60.1 million as of August 31, 2023, 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 $67.6 million. During the fiscal years ended August 31, 2023, 2022 and 2021, 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. Historically, except for limited circumstances during the COVID-19 pandemic, 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. Where possible and where it makes business sense, the Company works with secondary or multiple suppliers to qualify additional supply sources. 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, 2023 and 2022. 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 and 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 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. 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 consolidated balance sheets, were not significant at August 31, 2023 and 2022. Coupons recorded as a reduction to sales were not significant during fiscal years 2023 and 2022, 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. 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. Contract liabilities are recorded in accrued liabilities on the Company’s consolidated balance sheets. Contract assets are recorded if the Company has satisfied a performance obligation but does not yet have an unconditional right to consideration. The Company has an unconditional right to payment for its trade and other accounts receivable on the Company’s consolidated balance sheets. 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 $17.1 million, $18.6 million and $16.5 million for fiscal years 2023, 2022 and 2021, 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 $28.8 million, $27.3 million and $28.0 million for fiscal years 2023, 2022 and 2021, 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 $6.2 million, $5.1 million and $5.6 million in fiscal years 2023, 2022 and 2021, 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 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 $0.5 million in net gains and $1.1 million in net losses in foreign currency transactions in fiscal years 2023 and 2022, respectively. The Company’s net losses in foreign currency transactions were not significant in fiscal year 2021. 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, 2023, the Company had a notional amount of $2.6 million outstanding in foreign currency forward contracts, which matured in September 2023. Unrealized net gains and losses related to foreign currency forward contracts were not significant at August 31, 2023 or 2022. Realized net losses related to foreign currency forward contracts were not significant for the fiscal years ended August 31, 2023 and 2022. 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 Compan |
Inventories
Inventories | 12 Months Ended |
Aug. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in thousands): August 31, August 31, Product held at third-party contract manufacturers $ 6,680 $ 7,915 Raw materials and components 11,924 13,952 Work-in-process 497 881 Finished goods 67,421 81,353 Total $ 86,522 $ 104,101 |
Property and Equipment and Capi
Property and Equipment and Capitalized Cloud-Based Software Implementation Costs | 12 Months Ended |
Aug. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment and Capitalized Cloud-Based Software Implementation Costs | Property and Equipment and Capitalized Cloud-Based Software Implementation Costs Property and equipment, net, consisted of the following (in thousands): August 31, August 31, Machinery, equipment and vehicles $ 49,804 $ 44,533 Buildings and improvements 27,555 27,958 Computer and office equipment 6,151 5,757 Internal-use software 11,277 9,591 Furniture and fixtures 3,027 2,669 Capital in progress 7,937 10,135 Land 4,220 4,240 Subtotal 109,971 104,883 Less: accumulated depreciation and amortization (43,180) (38,906) Total $ 66,791 $ 65,977 As of August 31, 2023 and 2022, the Company’s consolidated balance sheets included $11.0 million and $6.5 million, respectively, of capitalized cloud-based implementation costs recorded as other assets within the Company’s consolidated balance sheets. These balances primarily consist of capitalized costs related to the new cloud-based enterprise resource planning system which the Company is in the process of implementing. Accumulated amortization associated with these assets was $0.7 million as of August 31, 2023, and was $0.5 million as of August 31, 2022. Amortization expense associated with these assets was not significant during the fiscal years 2023 or 2022. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Aug. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The following table summarizes the changes in the carrying amounts of goodwill by segment (in thousands): Americas EMEA Asia-Pacific Total Balance as of August 31, 2021 $ 85,476 9,184 1,209 95,869 Translation adjustments (74) (615) — (689) Balance as of August 31, 2022 85,402 8,569 1,209 95,180 Translation adjustments 34 291 - 325 Balance as of August 31, 2023 $ 85,436 $ 8,860 $ 1,209 $ 95,505 During the second quarter of fiscal year 2023, 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, 2022. During the fiscal year 2023 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, 2022 through August 31, 2023. As a result, the Company concluded that no impairment of its goodwill existed as of August 31, 2023. To date, there have been no impairment losses identified and recorded related to the Company’s goodwill. 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): August 31, August 31, Gross carrying amount $ 35,877 $ 35,166 Accumulated amortization (31,207) (29,578) Net carrying amount $ 4,670 $ 5,588 There has been no impairment charge for the period ended August 31, 2023 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. Changes in the carrying amounts of definite-lived intangible assets by segment are summarized below (in thousands): Americas EMEA Asia-Pacific Total Balance as of August 31, 2021 $ 5,495 1,749 - $ 7,244 Amortization expense (1,058) (376) - (1,434) Translation adjustments - (222) - (222) Balance as of August 31, 2022 4,437 1,151 - 5,588 Amortization expense (813) (192) - (1,005) Translation adjustments - 87 - 87 Balance as of August 31, 2023 $ 3,624 $ 1,046 $ - $ 4,670 The estimated amortization expense for the Company’s definite-lived intangible assets is not significant in any future individual fiscal year. |
Leases
Leases | 12 Months Ended |
Aug. 31, 2023 | |
Leases [Abstract] | |
Leases | 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. The Company also leases an automobile fleet in the United States. In addition, the Company has identified warehouse leases within certain third-party distribution center service contracts and a lease of a blending room within a third-party manufacturing contract. All other leases are insignificant to the Company’s consolidated financial statements. Right-of-use assets and lease liabilities consisted of the following (in thousands): August 31, August 31, Assets: Operating lease right-of-use assets $ 7,820 $ 7,559 Liabilities: Current operating lease liabilities (1) 2,144 1,703 Long-term operating lease liabilities 5,832 5,999 Total operating lease liabilities $ 7,976 $ 7,702 (1) Current operating lease liabilities are classified in accrued liabilities on the Company’s consolidated balance sheets. 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, 2023 (in thousands): Operating Fiscal year 2024 2,387 Fiscal year 2025 1,510 Fiscal year 2026 1,247 Fiscal year 2027 913 Fiscal year 2028 798 Thereafter 2,051 Total undiscounted future cash flows $ 8,906 Less: Interest (930) Present value of lease liabilities $ 7,976 The Company recorded $2.1 million and $2.0 million in lease expense during the fiscal years ended August 31, 2023 and 2022, respectively. This lease expense was included in selling, general and administrative expenses. The Company recorded $0.5 million of lease expense classified within cost of products sold for the fiscal year ended August 31, 2023, and $0.3 million for the fiscal year ended August 31, 2022. During the fiscal year ended August 31, 2023 and 2022, the Company paid cash of $2.4 million and $2.1 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, 2023 and 2022. As of August 31, 2023, the weighted-average remaining lease term was 5.9 years and the weighted-average discount rate was 3.4% for the Company’s operating leases. 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. The Company had $3.8 million of prepaid deposits for a future right to use a blending facility recorded in other current assets on the Company’s consolidated balance sheets as of August 31, 2023, which converted to an ROU asset after August 31, 2023. In addition, the Company had approximately $1.6 million of leases that commenced after August 31, 2023 that created rights and obligations to the Company. These leases are not included in the preceding schedules. The Company had no significant short-term leases as of August 31, 2023. The Company obtained additional ROU assets of $1.7 million in exchange for lease obligations related to renewals of existing leases during fiscal year 2023. As of August 31, 2023 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 were also not significant. |
Accrued and Other Liabilities
Accrued and Other Liabilities | 12 Months Ended |
Aug. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | Accrued and Other Liabilities Accrued liabilities consisted of the following (in thousands): August 31, August 31, Accrued advertising and sales promotion expenses $ 14,472 $ 13,563 Accrued professional services fees 1,924 1,979 Accrued sales taxes and other taxes 2,618 995 Deferred revenue 4,552 4,988 Short-term operating lease liability 2,144 1,703 Other 4,290 3,933 Total $ 30,000 $ 27,161 Accrued payroll and related expenses consisted of the following (in thousands): August 31, August 31, Accrued incentive compensation $ 6,698 $ 2,524 Accrued payroll 4,298 4,001 Accrued profit sharing 3,561 2,758 Accrued payroll taxes 1,650 1,779 Other 515 521 Total $ 16,722 $ 11,583 |
Debt
Debt | 12 Months Ended |
Aug. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of August 31, 2023, 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, 2023, 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. 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 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 August 31, August 31, Credit Agreement – revolving credit facility (1)(3) Various 9/30/2025 52,943 $ 77,912 Note Agreement Series A Notes – 3.39% fixed rate (2) 11/15/2017 2023-2032 15,600 16,400 Series B Notes – 2.50% fixed rate (3) 9/30/2020 11/15/2027 26,000 26,000 Series C Notes – 2.69% fixed rate (3) 9/30/2020 11/15/2030 26,000 26,000 Total borrowings 120,543 146,312 Short-term portion of borrowings (10,800) (39,173) Total long-term borrowings $ 109,743 $ 107,139 (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, 2023, $42.9 million on this facility is classified as long-term and is denominated in Euros and Pounds Sterling. $10.0 million is classified as short-term and is denominated entirely in U.S. Dollars. 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 . (3) Interest on notes is payable semi-annually in May and November of each year with no principal due until the maturity date. 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 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, 2023, the Company was in compliance with all debt covenants under both the Note Agreement and the Credit Agreement. |
Share Repurchase Plan
Share Repurchase Plan | 12 Months Ended |
Aug. 31, 2023 | |
Equity [Abstract] | |
Share Repurchase Plan | Share Repurchase Plan On October 12, 2021, the Company’s Board approved a share repurchase plan (the “2021 Repurchase Plan”). Under the 2021 Repurchase Plan, which became effective on November 1, 2021, the Company was authorized to acquire up to $75.0 million of its outstanding shares through August 31, 2023. During fiscal year 2023, the Company repurchased 55,920 shares at an average price of $186.09 per share, for a total cost of $10.4 million. Throughout the course of the 2021 Repurchase Plan, the Company repurchased 194,482 shares at an average price of $203.42 per share, for a total cost of $39.6 million. On June 19, 2023, the Company’s Board approved a share repurchase plan (the “2023 Repurchase Plan”). Under the 2023 Repurchase Plan, which became effective on September 1, 2023, the Company is authorized to acquire up to $50.0 million of its outstanding shares through August 31, 2025. 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. |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Aug. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share The table below reconciles net income to net income available to common stockholders (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Net income $ 65,993 $ 67,329 $ 70,229 Less: Net income allocated to participating securities (272) (251) (277) Net income available to common stockholders $ 65,721 $ 67,078 $ 69,952 The table below summarizes the weighted-average number of common shares outstanding included in the calculation of basic and diluted EPS (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Weighted-average common shares outstanding, basic 13,578 13,668 13,698 Weighted-average dilutive securities 26 28 35 Weighted-average common shares outstanding, diluted 13,604 13,696 13,733 For the fiscal year ended August 31, 2023, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 4,551 were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive. 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. |
Revenue
Revenue | 12 Months Ended |
Aug. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The following table presents the Company’s revenues by segment and major source (in thousands): Fiscal Year Ended August 31, 2023 Fiscal Year Ended August 31, 2022 Americas EMEA Asia-Pacific Total Americas EMEA Asia-Pacific Total Maintenance products $ 250,348 $ 181,501 $ 71,709 $ 503,558 $ 223,470 $ 196,524 $ 65,332 $ 485,326 HCCP (1) 16,424 9,317 7,956 33,697 16,763 8,164 8,567 33,494 Total net sales $ 266,772 $ 190,818 $ 79,665 $ 537,255 $ 240,233 $ 204,688 $ 73,899 $ 518,820 (1) Homecare and cleaning products (“HCCP”) The Company recorded approximately $33.3 million and $32.8 million in rebates/other discounts as a reduction to sales during fiscal years 2023 and 2022, respectively. The Company had a $11.1 million and $8.7 million balance in rebate/other discount liabilities as of August 31, 2023 and 2022, respectively, which are included in accrued liabilities on the Company’s consolidated balance sheets. The Company recorded approximately $5.6 million and $5.2 million in cash discounts as a reduction to sales during fiscal years 2023 and 2022, respectively. The Company had a $0.6 million and $0.5 million balance in the allowance for cash discounts as of August 31, 2023 and 2022, respectively. The Company had contract liabilities, which consist of deferred revenue related to undelivered products, of $4.6 million and $5.0 million as of August 31, 2023 and 2022, respectively. All of the $5.0 million that was included in contract liabilities as of August 31, 2022 was recognized to revenue during fiscal year 2023. Contract assets are recorded if the Company has satisfied a performance obligation but does not yet have an unconditional right to consideration. The Company did not have any contract assets as of August 31, 2023 and 2022. The Company has an unconditional right to payment for all trade and other accounts receivable on the Company’s consolidated balance sheets. The Company’s refund liability for sales returns was not significant as of August 31, 2023 and 2022. The Company records an amount to other current assets for the value of inventory that represents the right to recover products from customers associated with sales returns, which was not significant as of August 31, 2023 and 2022. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 the finished products themselves until shipment to the Company’s third-party distribution centers or customers 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, 2023, 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, 2023, 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 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, 2023. 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, 2023. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes consisted of the following (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 United States $ 49,871 $ 47,427 $ 40,949 Foreign (1) 35,292 36,681 45,550 Income before income taxes $ 85,163 $ 84,108 $ 86,499 (1) Included in these amounts are income before income taxes for the EMEA segment of $25.6 million, $30.3 million and $38.8 million for the fiscal years ended August 31, 2023, 2022 and 2021, respectively. The provision for income taxes consisted of the following (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Current: Federal $ 9,973 $ 7,487 $ 5,871 State 1,039 861 1,007 Foreign 9,023 8,114 10,944 Total current 20,035 16,462 17,822 Deferred: United States (806) 6 (1,201) Foreign (59) 311 (351) Total deferred (865) 317 (1,552) Provision for income taxes $ 19,170 $ 16,779 $ 16,270 Deferred tax assets and deferred tax liabilities consisted of the following (in thousands): August 31, August 31, Deferred tax assets: Accrued payroll and related expenses $ 1,110 $ 881 Reserves and accruals 1,436 1,178 Research and development expenses 1,125 - Stock-based compensation expense 2,394 2,366 Uncertain tax positions and related interest 991 560 Uniform capitalization 2,383 2,657 Tax credit carryforwards 3,918 3,512 Other 2,673 2,630 Total gross deferred tax assets 16,030 13,784 Valuation allowance (3,960) (3,628) Total net deferred tax assets 12,070 10,156 Deferred tax liabilities: Property and equipment, net (4,215) (4,122) Amortization of tax goodwill and intangible assets (15,415) (14,931) Other (1,544) (952) Total deferred tax liabilities (21,174) (20,005) Net deferred tax liabilities $ (9,104) $ (9,849) The Company had state net operating loss (“NOL”) carryforwards of $5.3 million as of August 31, 2023 and 2022, which generated a net deferred tax asset of $0.4 million as of August 31, 2023 and 2022. The state NOL carryforwards, if unused, will expire between fiscal year 2024 and 2043. The Company also had tax credit carryforwards of $3.9 million and $3.5 million as of August 31, 2023 and 2022, respectively, of which $3.6 million and $3.3 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): Fiscal Year Ended August 31, 2023 2022 2021 Amount computed at U.S. statutory federal tax rate $ 17,884 $ 17,662 $ 18,165 Effect of foreign operations 1,583 317 629 Net benefit from GILTI/FDII (2,071) (2,002) (1,764) Expense (benefit) from stock compensation 538 (204) (1,813) Uncertain tax positions and related interest 1,377 273 222 Other (141) 733 831 Provision for income taxes $ 19,170 $ 16,779 $ 16,270 The provision for income taxes was 22.5% and 19.9% of income before income taxes for the fiscal years ended August 31, 2023 and 2022, respectively. The increase in the effective income tax rate from period to period was primarily due to higher tax rates in certain foreign jurisdictions, as well as tax shortfalls from the settlements of stock-based equity awards and increases in interest expense related to uncertain tax positions. The increase was partially offset by a decrease in nondeductible performance-based compensation expense. Reconciliations of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands): Fiscal Year Ended August 31, 2023 2022 Unrecognized tax benefits – beginning of fiscal year $ 9,251 $ 9,314 Net increases (decreases) – prior period tax positions - - Net increases – current period tax positions 191 200 Expirations of statute of limitations for assessment (167) (263) Unrecognized tax benefits – end of fiscal year $ 9,275 $ 9,251 Gross unrecognized tax benefits totaled $9.3 million for the fiscal years ended August 31, 2023 and 2022 of which $9.1 million would affect the Company’s effective income tax rate if recognized. Interest and penalties related to uncertain tax positions included in tax expense was $1.8 million for fiscal year ending August 31, 2023 and $0.3 million for fiscal year ending August 31, 2022, primarily related to the toll tax liability reserve. The total balance of accrued interest and penalties related to uncertain tax positions was $3.4 million and $1.6 million for the fiscal years ended August 31, 2023 and 2022, respectively. Total unrecognized tax benefits including interest were $12.7 million and $10.9 million as of August 31, 2023 and 2022, respectively, and are recorded in other long-term liabilities in the Company’s consolidated balance sheets. 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 2022. Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2019 are no longer subject to examination. The Company has estimated that up to $0.4 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 $1.1 million and $5.0 million are recorded in the Company’s consolidated balance sheets as of August 31, 2023 and 2022, respectively. Income taxes receivable are included in other current assets, which also consists of miscellaneous prepaid expenses and deposits. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Aug. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation As of August 31, 2023, the Company had one stock incentive plan, the WD-40 Company 2016 Stock Incentive Plan (the “2016 Plan”), which was approved by the Company’s stockholders 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, 2023, 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, 2023, there were still certain outstanding awards which had been granted under the Company’s prior stock 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, 2023, 172,878 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 nonemployee directors is immediate, with shares to be issued pursuant to the vested RSUs upon termination of each nonemployee 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 separation from service from 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 nonemployee 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 Board. Vesting of the MSUs granted to certain high level employees follows a performance measurement period of three During fiscal year 2021, PSU awards were granted for the first time under the 2016 Plan in October 2020 and granting of new DPUs was discontinued by the Company. No DPUs were granted in or after 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 separation from service from the Company. Vested PSUs are issuable prior to separation from service but contain a period of restriction, wherein the recipient cannot sell or otherwise dispose of the stock until six months following separation from service from 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): Fiscal Year Ended August 31, 2023 2022 2021 RSU compensation expense $ 4,254 $ 4,153 $ 3,656 MSU compensation expense 2,180 2,544 2,294 PSU compensation expense (1) - - 3,605 Total $ 6,434 $ 6,697 $ 9,555 (1) PSU awards contain performance conditions for which accrual of expense is based on the probable outcome of the performance conditions. PSUs pertaining to the measurement year of fiscal year 2021 vested at 100% since the performance conditions were fully achieved. Vesting of PSUs pertaining to the measurement years of fiscal years 2023 and 2022 was deemed not probable at the end of each respective fiscal year and the PSUs were subsequently forfeited. The Company recorded deferred tax assets related to such stock-based compensation of $1.3 million, $1.5 million and $2.0 million for the fiscal years ended August 31, 2023, 2022 and 2021, respectively. As of August 31, 2023, the total unamortized compensation cost related to non-vested stock-based equity awards was $1.0 million and $2.4 million for RSUs and MSUs, respectively, which the Company expects to recognize over remaining weighted-average vesting periods of 1.80 and 1.88 years for RSUs and MSUs, respectively. No unamortized compensation cost for DPUs or PSUs remained as of August 31, 2023. 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. A summary of the Company’s restricted stock unit activity is as follows (in thousands, except share and per share amounts): Restricted Stock Units Number of Weighted-Average Aggregate Outstanding at August 31, 2022 78,604 $ 148.28 Granted 23,732 $ 167.05 Converted to shares of common stock (22,032) $ 182.16 Forfeited (488) $ 192.24 Outstanding at August 31, 2023 79,816 $ 144.24 $ 17,150 Vested at August 31, 2023 50,319 $ 118.94 $ 10,812 The weighted-average grant date fair value of all RSUs granted during the fiscal years ended August 31, 2023, 2022 and 2021 was $167.05, $217.03 and $208.29, respectively. The total intrinsic value of all RSUs converted to shares of common stock was $3.7 million, $3.0 million and $8.5 million for the fiscal years ended August 31, 2023, 2022 and 2021, respectively. The income tax benefits from RSUs converted to shares of common stock totaled $0.8 million, $0.6 million and $1.9 million for the fiscal years ended August 31, 2023, 2022 and 2021, 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 (the “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: Fiscal Year Ended August 31, 2023 2022 2021 Expected volatility 37.5 % 32.7 % 28.5 % Risk-free interest rate 4.3 % 0.6 % 0.2 % Expected dividend yield 0.0 % 0.0 % 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, 2023 and over the most recent 2.89 and 2.88-year periods for MSUs granted during each of the fiscal years ended August 31, 2022 and 2021, 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. A summary of the Company’s market share unit activity is as follows (in thousands, except share and per share amounts): Market Share Units Number of Weighted-Average Aggregate Outstanding at August 31, 2022 37,201 $ 212.66 Granted 13,695 $ 184.15 Forfeited (16,947) $ 218.88 Outstanding at August 31, 2023⁽¹⁾ 33,949 $ 198.05 $ 7,295 (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, 2023, 2022 and 2021 was $184.15, $232.99 and $184.96, respectively. There were no conversions of MSUs to shares of common stock for the fiscal year ended August 31, 2023. The total intrinsic value of all MSUs converted to shares of common stock was $4.4 million and $5.9 million for the fiscal years ended August 31, 2022 and 2021, respectively. The income tax benefits from MSUs converted to shares of common stock totaled $0.9 million for the fiscal year ended August 31, 2022 and $1.3 million for the fiscal year ended August 31, 2021. 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 shares of common stock issued to recipients following separation from service from the Company were not material to the Company’s consolidated financial statements and related disclosures during fiscal years 2023, 2022 and 2021. 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 PSUs 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. A summary of the Company’s performance share unit activity is as follows (in thousands, except share and per share amounts): Performance Share Units Number of Weighted-Average Aggregate Outstanding at August 31, 2022 17,826 $ 227.24 Granted 21,990 $ 170.16 Forfeited (18,668) $ 224.67 Outstanding at August 31, 2023⁽¹⁾ 21,148 $ 170.16 $ 4,544 (1) PSUs pertaining to the measurement year of fiscal year 2023 were forfeited in October 2023 since performance conditions were not achieved. Performance is certified annually in October by the Committee subsequent to the Company’s fiscal year end and PSUs 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, 2023, 2022, and 2021 was $170.16, $227.24 and $197.51, respectively. This form of PSU awards was granted for the first time in October 2020. There were no conversions of PSUs to shares of common stock for the fiscal year ended August 31, 2023. 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 benefit from PSUs converted to shares of common stock totaled $0.8 million for the fiscal year ended August 31, 2022. There were no conversions of PSUs to shares of common stock for the fiscal year ended August 31, 2021. |
Other Benefit Plans
Other Benefit Plans | 12 Months Ended |
Aug. 31, 2023 | |
Retirement Benefits [Abstract] | |
Other Benefit Plans | 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, 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 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 $4.6 million for fiscal year 2023, $4.1 million for fiscal year 2022 and $3.9 million for fiscal year 2021. 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 each 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, 2023, $2.1 million for the fiscal year ended August 31, 2022 and $1.9 million for the fiscal year ended August 31, 2021. |
Business Segments and Foreign O
Business Segments and Foreign Operations | 12 Months Ended |
Aug. 31, 2023 | |
Segment Reporting [Abstract] | |
Business Segments and Foreign Operations | Business Segments and Foreign OperationsThe Company evaluates the performance of its segments and allocates resources to them based on sales and income from operations. 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. 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. Americas EMEA Asia-Pacific Unallocated Corporate (1) Total Fiscal Year Ended August 31, 2023 Net sales $ 266,772 $ 190,818 $ 79,665 $ - $ 537,255 Income from operations $ 60,797 $ 39,456 $ 25,888 $ (36,417) $ 89,724 Depreciation and amortization expense $ 3,656 $ 3,987 $ 204 $ 304 $ 8,151 Interest income $ 4 $ 111 $ 116 $ - $ 231 Interest expense $ 3,834 $ 1,775 $ 5 $ - $ 5,614 Fiscal Year Ended August 31, 2022 Net sales $ 240,233 $ 204,688 $ 73,899 $ - $ 518,820 Income from operations $ 54,198 $ 42,058 $ 22,590 $ (31,516) $ 87,330 Depreciation and amortization expense $ 4,320 $ 3,356 $ 275 $ 343 $ 8,294 Interest income $ 2 $ - $ 100 $ - $ 102 Interest expense $ 2,165 $ 574 $ 3 $ - $ 2,742 Fiscal Year Ended August 31, 2021 Net sales $ 214,601 $ 208,252 $ 65,256 $ - $ 488,109 Income from operations $ 51,591 $ 53,003 $ 19,121 $ (34,874) $ 88,841 Depreciation and amortization expense $ 3,219 $ 3,174 $ 307 $ 319 $ 7,019 Interest income $ 1 $ 5 $ 75 $ - $ 81 Interest expense $ 1,909 $ 481 $ 5 $ - $ 2,395 (1) These expenses are reported separately 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, 2023 2022 2021 Maintenance products $ 503,558 $ 485,326 $ 448,817 Homecare and cleaning products 33,697 33,494 39,292 Total $ 537,255 $ 518,820 $ 488,109 Net sales and long-lived assets by geographic area are as follows (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Net Sales by Geography: United States $ 207,629 $ 176,863 $ 164,946 International 329,626 341,957 323,163 Total $ 537,255 $ 518,820 $ 488,109 Long-lived Assets by Geography (1) : United States $ 33,263 $ 35,375 $ 37,204 International 33,528 30,602 32,941 Total $ 66,791 $ 65,977 $ 70,145 (1) Includes tangible assets and property and equipment, net, attributed to the geographic location in which such assets are located. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Aug. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Dividend Declaration On October 6, 2023, the Board declared a cash dividend of $0.83 per share payable on October 31, 2023 to stockholders of record on October 20, 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 65,993 | $ 67,329 | $ 70,229 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Aug. 31, 2023 | Aug. 31, 2023 | |
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Patricia Q. Olsem [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On June 14, 2023, Patricia Q. Olsem’s Rule 10b5-1 trading arrangement terminated pursuant to its terms, i.e., upon the earlier of November 7, 2023 or the execution of all trades of all orders. | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | June 14, 2023 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | 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 | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“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. Global economic conditions have been adversely impacted and financial markets have experienced significant volatility in recent years. 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 factors that have been subject to such volatility 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 its results of operations and financial condition. |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash equivalents are highly liquid investments purchased with an original maturity of three months or less. |
Trade Accounts Receivable and Allowance for Credit Losses | Trade Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance for credit losses 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 credit losses related to the Company’s trade accounts receivable was not significant at August 31, 2023 and 2022. |
Inventories | 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 Property and equipment is stated at cost. Depreciation is computed using the straight-line method based upon estimated useful lives of ten three three three three and three |
Internal-Use Software and Cloud Computing Arrangements | 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 |
Leases | Leases 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 value of lease payments over the lease term with lease expense recognized over the term of the lease. For leases that do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability at the lease commencement date using its estimated secured incremental borrowing rate, determined by 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. The Company records ROU assets and lease liabilities on its consolidated balance sheets for leases with an expected term greater than one year. 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 committed, non-cancelable period of the lease and options to renew, 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, IT equipment and third-party manufacturing facilities; and (ii) exclude leases with an initial term of twelve 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 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 2023, 2022 or 2021. |
Subsequent Measurement of Long-lived Assets | 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 2023, 2022 or 2021. |
Fair Value of Financial Instruments | 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, 2023, 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 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 $60.1 million as of August 31, 2023, 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 $67.6 million. During the fiscal years ended August 31, 2023, 2022 and 2021, 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 | 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 | Concentration of Supplier RiskThe 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. Historically, except for limited circumstances during the COVID-19 pandemic, 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. Where possible and where it makes business sense, the Company works with secondary or multiple suppliers to qualify additional supply sources. |
Insurance Coverage | 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, 2023 and 2022. |
Revenue Recognition | 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 and 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 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. 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 consolidated balance sheets, were not significant at August 31, 2023 and 2022. Coupons recorded as a reduction to sales were not significant during fiscal years 2023 and 2022, 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. 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. Contract liabilities are recorded in accrued liabilities on the Company’s consolidated balance sheets. Contract assets are recorded if the Company has satisfied a performance obligation but does not yet have an unconditional right to consideration. The Company has an unconditional right to payment for its trade and other accounts receivable on the Company’s consolidated balance sheets. |
Cost of Products Sold | 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 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 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 $17.1 million, $18.6 million and $16.5 million for fiscal years 2023, 2022 and 2021, respectively. |
Advertising and Sales Promotion Expenses | 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 $28.8 million, $27.3 million and $28.0 million for fiscal years 2023, 2022 and 2021, respectively. |
Research and Development | 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 $6.2 million, $5.1 million and $5.6 million in fiscal years 2023, 2022 and 2021, 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 | 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 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 | 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 $0.5 million in net gains and $1.1 million in net losses in foreign currency transactions in fiscal years 2023 and 2022, respectively. The Company’s net losses in foreign currency transactions were not significant in fiscal year 2021. 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 |
Earnings Per Common Share | 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 stockholders for the period by the weighted-average number of common shares outstanding during the period. Net income available to common stockholders for the period includes dividends paid to common stockholders during the period plus a proportionate share of undistributed net income allocable to common stockholders for the period; the proportionate share of undistributed net income allocable to common stockholders 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 stockholders 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 | 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 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 | 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 |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards None. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): August 31, August 31, Product held at third-party contract manufacturers $ 6,680 $ 7,915 Raw materials and components 11,924 13,952 Work-in-process 497 881 Finished goods 67,421 81,353 Total $ 86,522 $ 104,101 |
Property and Equipment and Ca_2
Property and Equipment and Capitalized Cloud-Based Software Implementation Costs (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net, consisted of the following (in thousands): August 31, August 31, Machinery, equipment and vehicles $ 49,804 $ 44,533 Buildings and improvements 27,555 27,958 Computer and office equipment 6,151 5,757 Internal-use software 11,277 9,591 Furniture and fixtures 3,027 2,669 Capital in progress 7,937 10,135 Land 4,220 4,240 Subtotal 109,971 104,883 Less: accumulated depreciation and amortization (43,180) (38,906) Total $ 66,791 $ 65,977 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amounts of Goodwill | The following table summarizes the changes in the carrying amounts of goodwill by segment (in thousands): Americas EMEA Asia-Pacific Total Balance as of August 31, 2021 $ 85,476 9,184 1,209 95,869 Translation adjustments (74) (615) — (689) Balance as of August 31, 2022 85,402 8,569 1,209 95,180 Translation adjustments 34 291 - 325 Balance as of August 31, 2023 $ 85,436 $ 8,860 $ 1,209 $ 95,505 |
Summary of Definite-Lived Intangible Assets | The following table summarizes the definite-lived intangible assets and the related accumulated amortization (in thousands): August 31, August 31, Gross carrying amount $ 35,877 $ 35,166 Accumulated amortization (31,207) (29,578) Net carrying amount $ 4,670 $ 5,588 |
Summary of Changes in Carrying Amounts of Definite-Lived Intangible Assets by Segment | Changes in the carrying amounts of definite-lived intangible assets by segment are summarized below (in thousands): Americas EMEA Asia-Pacific Total Balance as of August 31, 2021 $ 5,495 1,749 - $ 7,244 Amortization expense (1,058) (376) - (1,434) Translation adjustments - (222) - (222) Balance as of August 31, 2022 4,437 1,151 - 5,588 Amortization expense (813) (192) - (1,005) Translation adjustments - 87 - 87 Balance as of August 31, 2023 $ 3,624 $ 1,046 $ - $ 4,670 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Leases [Abstract] | |
Right-of-Use Assets and Lease Liabilities | Right-of-use assets and lease liabilities consisted of the following (in thousands): August 31, August 31, Assets: Operating lease right-of-use assets $ 7,820 $ 7,559 Liabilities: Current operating lease liabilities (1) 2,144 1,703 Long-term operating lease liabilities 5,832 5,999 Total operating lease liabilities $ 7,976 $ 7,702 (1) Current operating lease liabilities are classified in accrued liabilities on the Company’s consolidated balance sheets. |
Schedule of Maturities of Operating Lease Liabilities | 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, 2023 (in thousands): Operating Fiscal year 2024 2,387 Fiscal year 2025 1,510 Fiscal year 2026 1,247 Fiscal year 2027 913 Fiscal year 2028 798 Thereafter 2,051 Total undiscounted future cash flows $ 8,906 Less: Interest (930) Present value of lease liabilities $ 7,976 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): August 31, August 31, Accrued advertising and sales promotion expenses $ 14,472 $ 13,563 Accrued professional services fees 1,924 1,979 Accrued sales taxes and other taxes 2,618 995 Deferred revenue 4,552 4,988 Short-term operating lease liability 2,144 1,703 Other 4,290 3,933 Total $ 30,000 $ 27,161 |
Schedule of Accrued Payroll and Related Expenses | Accrued payroll and related expenses consisted of the following (in thousands): August 31, August 31, Accrued incentive compensation $ 6,698 $ 2,524 Accrued payroll 4,298 4,001 Accrued profit sharing 3,561 2,758 Accrued payroll taxes 1,650 1,779 Other 515 521 Total $ 16,722 $ 11,583 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term and Long-term Borrowings | Short-term and long-term borrowings under the Company’s Credit Agreement and Note Agreement consisted of the following (in thousands): Issuance Maturities August 31, August 31, Credit Agreement – revolving credit facility (1)(3) Various 9/30/2025 52,943 $ 77,912 Note Agreement Series A Notes – 3.39% fixed rate (2) 11/15/2017 2023-2032 15,600 16,400 Series B Notes – 2.50% fixed rate (3) 9/30/2020 11/15/2027 26,000 26,000 Series C Notes – 2.69% fixed rate (3) 9/30/2020 11/15/2030 26,000 26,000 Total borrowings 120,543 146,312 Short-term portion of borrowings (10,800) (39,173) Total long-term borrowings $ 109,743 $ 107,139 (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, 2023, $42.9 million on this facility is classified as long-term and is denominated in Euros and Pounds Sterling. $10.0 million is classified as short-term and is denominated entirely in U.S. Dollars. 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 . (3) Interest on notes is payable semi-annually in May and November of each year with no principal due until the maturity date. |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Net Income to Net Income Available to Common Shareholders | The table below reconciles net income to net income available to common stockholders (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Net income $ 65,993 $ 67,329 $ 70,229 Less: Net income allocated to participating securities (272) (251) (277) Net income available to common stockholders $ 65,721 $ 67,078 $ 69,952 |
Schedule of Weighted Average Number of Shares | The table below summarizes the weighted-average number of common shares outstanding included in the calculation of basic and diluted EPS (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Weighted-average common shares outstanding, basic 13,578 13,668 13,698 Weighted-average dilutive securities 26 28 35 Weighted-average common shares outstanding, diluted 13,604 13,696 13,733 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenues by Segment and Major Source | The following table presents the Company’s revenues by segment and major source (in thousands): Fiscal Year Ended August 31, 2023 Fiscal Year Ended August 31, 2022 Americas EMEA Asia-Pacific Total Americas EMEA Asia-Pacific Total Maintenance products $ 250,348 $ 181,501 $ 71,709 $ 503,558 $ 223,470 $ 196,524 $ 65,332 $ 485,326 HCCP (1) 16,424 9,317 7,956 33,697 16,763 8,164 8,567 33,494 Total net sales $ 266,772 $ 190,818 $ 79,665 $ 537,255 $ 240,233 $ 204,688 $ 73,899 $ 518,820 (1) Homecare and cleaning products (“HCCP”) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Tax, Domestic and Foreign | Income before income taxes consisted of the following (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 United States $ 49,871 $ 47,427 $ 40,949 Foreign (1) 35,292 36,681 45,550 Income before income taxes $ 85,163 $ 84,108 $ 86,499 (1) Included in these amounts are income before income taxes for the EMEA segment of $25.6 million, $30.3 million and $38.8 million for the fiscal years ended August 31, 2023, 2022 and 2021, respectively. |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consisted of the following (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Current: Federal $ 9,973 $ 7,487 $ 5,871 State 1,039 861 1,007 Foreign 9,023 8,114 10,944 Total current 20,035 16,462 17,822 Deferred: United States (806) 6 (1,201) Foreign (59) 311 (351) Total deferred (865) 317 (1,552) Provision for income taxes $ 19,170 $ 16,779 $ 16,270 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and deferred tax liabilities consisted of the following (in thousands): August 31, August 31, Deferred tax assets: Accrued payroll and related expenses $ 1,110 $ 881 Reserves and accruals 1,436 1,178 Research and development expenses 1,125 - Stock-based compensation expense 2,394 2,366 Uncertain tax positions and related interest 991 560 Uniform capitalization 2,383 2,657 Tax credit carryforwards 3,918 3,512 Other 2,673 2,630 Total gross deferred tax assets 16,030 13,784 Valuation allowance (3,960) (3,628) Total net deferred tax assets 12,070 10,156 Deferred tax liabilities: Property and equipment, net (4,215) (4,122) Amortization of tax goodwill and intangible assets (15,415) (14,931) Other (1,544) (952) Total deferred tax liabilities (21,174) (20,005) Net deferred tax liabilities $ (9,104) $ (9,849) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Amount computed at U.S. statutory federal tax rate $ 17,884 $ 17,662 $ 18,165 Effect of foreign operations 1,583 317 629 Net benefit from GILTI/FDII (2,071) (2,002) (1,764) Expense (benefit) from stock compensation 538 (204) (1,813) Uncertain tax positions and related interest 1,377 273 222 Other (141) 733 831 Provision for income taxes $ 19,170 $ 16,779 $ 16,270 |
Schedule of Unrecognized Tax Benefits Roll Forward | Reconciliations of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands): Fiscal Year Ended August 31, 2023 2022 Unrecognized tax benefits – beginning of fiscal year $ 9,251 $ 9,314 Net increases (decreases) – prior period tax positions - - Net increases – current period tax positions 191 200 Expirations of statute of limitations for assessment (167) (263) Unrecognized tax benefits – end of fiscal year $ 9,275 $ 9,251 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense related to the Company’s stock-based equity awards is as follows by award type (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 RSU compensation expense $ 4,254 $ 4,153 $ 3,656 MSU compensation expense 2,180 2,544 2,294 PSU compensation expense (1) - - 3,605 Total $ 6,434 $ 6,697 $ 9,555 (1) PSU awards contain performance conditions for which accrual of expense is based on the probable outcome of the performance conditions. PSUs pertaining to the measurement year of fiscal year 2021 vested at 100% since the performance conditions were fully achieved. Vesting of PSUs pertaining to the measurement years of fiscal years 2023 and 2022 was deemed not probable at the end of each respective fiscal year and the PSUs were subsequently forfeited. |
Schedule of Restricted Stock Units Activity | A summary of the Company’s restricted stock unit activity is as follows (in thousands, except share and per share amounts): Restricted Stock Units Number of Weighted-Average Aggregate Outstanding at August 31, 2022 78,604 $ 148.28 Granted 23,732 $ 167.05 Converted to shares of common stock (22,032) $ 182.16 Forfeited (488) $ 192.24 Outstanding at August 31, 2023 79,816 $ 144.24 $ 17,150 Vested at August 31, 2023 50,319 $ 118.94 $ 10,812 |
Schedule of Valuation Assumptions | The following weighted-average assumptions for MSU grants for the last three fiscal years were used in the Monte Carlo simulation model: Fiscal Year Ended August 31, 2023 2022 2021 Expected volatility 37.5 % 32.7 % 28.5 % Risk-free interest rate 4.3 % 0.6 % 0.2 % Expected dividend yield 0.0 % 0.0 % 0.0 % |
Schedule of Market Share Units Activity | A summary of the Company’s market share unit activity is as follows (in thousands, except share and per share amounts): Market Share Units Number of Weighted-Average Aggregate Outstanding at August 31, 2022 37,201 $ 212.66 Granted 13,695 $ 184.15 Forfeited (16,947) $ 218.88 Outstanding at August 31, 2023⁽¹⁾ 33,949 $ 198.05 $ 7,295 (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. |
Schedule of Performance Share Units | A summary of the Company’s performance share unit activity is as follows (in thousands, except share and per share amounts): Performance Share Units Number of Weighted-Average Aggregate Outstanding at August 31, 2022 17,826 $ 227.24 Granted 21,990 $ 170.16 Forfeited (18,668) $ 224.67 Outstanding at August 31, 2023⁽¹⁾ 21,148 $ 170.16 $ 4,544 (1) PSUs pertaining to the measurement year of fiscal year 2023 were forfeited in October 2023 since performance conditions were not achieved. Performance is certified annually in October by the Committee subsequent to the Company’s fiscal year end and PSUs are forfeited, or vest, depending on performance achievement. |
Business Segments and Foreign_2
Business Segments and Foreign Operations (Tables) | 12 Months Ended |
Aug. 31, 2023 | |
Segment Reporting [Abstract] | |
Summarized Information by Reportable Segments | Americas EMEA Asia-Pacific Unallocated Corporate (1) Total Fiscal Year Ended August 31, 2023 Net sales $ 266,772 $ 190,818 $ 79,665 $ - $ 537,255 Income from operations $ 60,797 $ 39,456 $ 25,888 $ (36,417) $ 89,724 Depreciation and amortization expense $ 3,656 $ 3,987 $ 204 $ 304 $ 8,151 Interest income $ 4 $ 111 $ 116 $ - $ 231 Interest expense $ 3,834 $ 1,775 $ 5 $ - $ 5,614 Fiscal Year Ended August 31, 2022 Net sales $ 240,233 $ 204,688 $ 73,899 $ - $ 518,820 Income from operations $ 54,198 $ 42,058 $ 22,590 $ (31,516) $ 87,330 Depreciation and amortization expense $ 4,320 $ 3,356 $ 275 $ 343 $ 8,294 Interest income $ 2 $ - $ 100 $ - $ 102 Interest expense $ 2,165 $ 574 $ 3 $ - $ 2,742 Fiscal Year Ended August 31, 2021 Net sales $ 214,601 $ 208,252 $ 65,256 $ - $ 488,109 Income from operations $ 51,591 $ 53,003 $ 19,121 $ (34,874) $ 88,841 Depreciation and amortization expense $ 3,219 $ 3,174 $ 307 $ 319 $ 7,019 Interest income $ 1 $ 5 $ 75 $ - $ 81 Interest expense $ 1,909 $ 481 $ 5 $ - $ 2,395 (1) These expenses are reported separately from the Company’s identified segments and are included in selling, general and administrative expenses on the Company’s consolidated statements of operations. |
Schedule of Net Sales by Product Group | Net sales by product group are as follows (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Maintenance products $ 503,558 $ 485,326 $ 448,817 Homecare and cleaning products 33,697 33,494 39,292 Total $ 537,255 $ 518,820 $ 488,109 |
Net Sales and Long-Lived Assets by Geographical Area | Net sales and long-lived assets by geographic area are as follows (in thousands): Fiscal Year Ended August 31, 2023 2022 2021 Net Sales by Geography: United States $ 207,629 $ 176,863 $ 164,946 International 329,626 341,957 323,163 Total $ 537,255 $ 518,820 $ 488,109 Long-lived Assets by Geography (1) : United States $ 33,263 $ 35,375 $ 37,204 International 33,528 30,602 32,941 Total $ 66,791 $ 65,977 $ 70,145 (1) Includes tangible assets and property and equipment, net, attributed to the geographic location in which such assets are located. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 7,100,000 | $ 6,900,000 | $ 5,600,000 |
Cost of goods sold, depreciation | 3,000,000 | 2,500,000 | 1,200,000 |
Impairment of goodwill | 0 | 0 | 0 |
Impairment of long-lived assets | 0 | 0 | 0 |
Total long-term borrowings | 109,743,000 | 107,139,000 | |
Self-insurance reserves | 0 | 0 | |
Shipping and handling costs | 17,100,000 | 18,600,000 | 16,500,000 |
Advertising and sales promotion | 28,807,000 | 27,343,000 | 27,956,000 |
Research and development expense | 6,200,000 | 5,100,000 | 5,600,000 |
Foreign currency transactions gain (loss), before tax | 500,000 | (1,100,000) | 0 |
Unrealized foreign currency transactions | 1,702,000 | (1,035,000) | 511,000 |
Foreign Currency Forward Contracts | |||
Property, Plant and Equipment [Line Items] | |||
Foreign currency forward contracts outstanding | $ 2,600,000 | ||
Foreign currency forward contracts, maturity date | Sep. 01, 2023 | ||
Unrealized foreign currency transactions | $ 0 | 0 | |
Realized net losses | 0 | 0 | |
Level 2 | Senior Notes | |||
Property, Plant and Equipment [Line Items] | |||
Fair value of senior notes | 60,100,000 | ||
Total long-term borrowings | 67,600,000 | ||
Level 2 | Recurring | |||
Property, Plant and Equipment [Line Items] | |||
Assets | 0 | ||
Liabilities | 0 | ||
Level 2 | Nonrecurring | |||
Property, Plant and Equipment [Line Items] | |||
Assets | 0 | 0 | 0 |
Liabilities | $ 0 | $ 0 | $ 0 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Service period of employee awards | 1 year | ||
Minimum | Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 10 years | ||
Minimum | Machinery And Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Minimum | Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Minimum | Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Minimum | R&D Lab Equipment And Office Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Minimum | Software and Computer Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Minimum | Internal-Use Software And Cloud Computing Arrangements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Service period of employee awards | 3 years | ||
Maximum | Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 40 years | ||
Maximum | Machinery And Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 15 years | ||
Maximum | Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 5 years | ||
Maximum | Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 10 years | ||
Maximum | R&D Lab Equipment And Office Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 7 years | ||
Maximum | Software and Computer Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 5 years | ||
Maximum | Internal-Use Software And Cloud Computing Arrangements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 5 years |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Product held at third-party contract manufacturers | $ 6,680 | $ 7,915 |
Raw materials and components | 11,924 | 13,952 |
Work-in-process | 497 | 881 |
Finished goods | 67,421 | 81,353 |
Total | $ 86,522 | $ 104,101 |
Property and Equipment and Ca_3
Property and Equipment and Capitalized Cloud-Based Software Implementation Costs (Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 109,971 | $ 104,883 | |
Less: accumulated depreciation and amortization | (43,180) | (38,906) | |
Total | 66,791 | 65,977 | $ 70,145 |
Machinery, equipment and vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 49,804 | 44,533 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 27,555 | 27,958 | |
Computer and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 6,151 | 5,757 | |
Internal-use software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 11,277 | 9,591 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 3,027 | 2,669 | |
Capital in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 7,937 | 10,135 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 4,220 | $ 4,240 |
Property and Equipment and Ca_4
Property and Equipment and Capitalized Cloud-Based Software Implementation Costs (Narrative) (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2023 | Aug. 31, 2022 | |
Business Acquisition [Line Items] | ||
Capitalized computer software, amortization | $ 0 | $ 0 |
Capitalized Cloud-Based Asset | ||
Business Acquisition [Line Items] | ||
Capitalized computer software, net | 11,000,000 | 6,500,000 |
Capitalized computer software, accumulated amortization | $ 700,000 | $ 500,000 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Summary of Changes in Carrying Amounts of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2023 | Aug. 31, 2022 | |
Goodwill [Roll Forward] | ||
Balance, beginning | $ 95,180 | $ 95,869 |
Translation adjustments | 325 | (689) |
Balance, ending | 95,505 | 95,180 |
Americas | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 85,402 | 85,476 |
Translation adjustments | 34 | (74) |
Balance, ending | 85,436 | 85,402 |
EMEA | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 8,569 | 9,184 |
Translation adjustments | 291 | (615) |
Balance, ending | 8,860 | 8,569 |
Asia-Pacific | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 1,209 | 1,209 |
Translation adjustments | 0 | 0 |
Balance, ending | $ 1,209 | $ 1,209 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Impairment charges | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Summary of Definite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Gross carrying amount | $ 35,877 | $ 35,166 | |
Accumulated amortization | (31,207) | (29,578) | |
Net carrying amount | $ 4,670 | $ 5,588 | $ 7,244 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets (Summary of Changes in Carrying Amounts of Definite-Lived Intangible Assets by Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Finite-Lived Intangible Assets [Roll Forward] | |||
Beginning balance | $ 5,588 | $ 7,244 | |
Amortization expense | (1,005) | (1,434) | $ (1,449) |
Translation adjustments | 87 | (222) | |
Ending balance | 4,670 | 5,588 | 7,244 |
Americas | |||
Finite-Lived Intangible Assets [Roll Forward] | |||
Beginning balance | 4,437 | 5,495 | |
Amortization expense | (813) | (1,058) | |
Translation adjustments | 0 | 0 | |
Ending balance | 3,624 | 4,437 | 5,495 |
EMEA | |||
Finite-Lived Intangible Assets [Roll Forward] | |||
Beginning balance | 1,151 | 1,749 | |
Amortization expense | (192) | (376) | |
Translation adjustments | 87 | (222) | |
Ending balance | 1,046 | 1,151 | 1,749 |
Asia-Pacific | |||
Finite-Lived Intangible Assets [Roll Forward] | |||
Beginning balance | 0 | 0 | |
Amortization expense | 0 | 0 | |
Translation adjustments | 0 | 0 | |
Ending balance | $ 0 | $ 0 | $ 0 |
Leases (Right-of-Use Assets and
Leases (Right-of-Use Assets and Lease Liabilities) (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 7,820 | $ 7,559 |
Current operating lease liabilities | 2,144 | 1,703 |
Long-term operating lease liabilities | 5,832 | 5,999 |
Total operating lease liabilities | $ 7,976 | $ 7,702 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Leases (Schedule of Maturities
Leases (Schedule of Maturities of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 |
Leases [Abstract] | ||
Fiscal year 2024 | $ 2,387 | |
Fiscal year 2025 | 1,510 | |
Fiscal year 2026 | 1,247 | |
Fiscal year 2027 | 913 | |
Fiscal year 2028 | 798 | |
Thereafter | 2,051 | |
Total undiscounted future cash flows | 8,906 | |
Less: Interest | (930) | |
Present value of lease liabilities | $ 7,976 | $ 7,702 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2023 | Aug. 31, 2022 | |
Leases [Abstract] | ||
Lease expense | $ 2,100,000 | $ 2,000,000 |
Lease expense classified within cost of products sold | 500,000 | 300,000 |
Lease payments | $ 2,400,000 | $ 2,100,000 |
Weighted-average lease term | 5 years 10 months 24 days | 6 years 6 months |
Weighted-average discount rate | 3.40% | 3.10% |
Prepaid deposits | $ 3,800,000 | |
Leases not yet commenced, amount | 1,600,000 | |
Short term lease | 0 | |
Additional right-of-use assets | $ 1,700,000 |
Accrued and Other Liabilities_2
Accrued and Other Liabilities (Schedule of Accrued Liabilities) (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued advertising and sales promotion expenses | $ 14,472 | $ 13,563 |
Accrued professional services fees | 1,924 | 1,979 |
Accrued sales taxes and other taxes | 2,618 | 995 |
Deferred revenue | 4,552 | 4,988 |
Short-term operating lease liability | 2,144 | 1,703 |
Other | 4,290 | 3,933 |
Total | $ 30,000 | $ 27,161 |
Accrued and Other Liabilities_3
Accrued and Other Liabilities (Schedule of Accrued Payroll and Related Expenses) (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued incentive compensation | $ 6,698 | $ 2,524 |
Accrued payroll | 4,298 | 4,001 |
Accrued profit sharing | 3,561 | 2,758 |
Accrued payroll taxes | 1,650 | 1,779 |
Other | 515 | 521 |
Total | $ 16,722 | $ 11,583 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) $ in Millions | 12 Months Ended |
Aug. 31, 2023 USD ($) item | |
Debt Instrument [Line Items] | |
Number of agreements | item | 2 |
Other Unsecured Debt | |
Debt Instrument [Line Items] | |
Revolving credit facility, amount | $ 125 |
Note Agreement and the Credit Agreement | |
Debt Instrument [Line Items] | |
Consolidated leverage ratio | 3.50 |
Consolidated interest coverage ratio | 3 |
Credit Agreement - Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Revolving credit facility, amount | $ 150 |
Credit Agreement - Revolving Credit Facility | Europe, The Middle East, Africa And India Subsidiary | |
Debt Instrument [Line Items] | |
Revolving credit facility, amount | $ 100 |
Debt (Schedule of Short-term an
Debt (Schedule of Short-term and Long-term Borrowings) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2023 | Aug. 31, 2022 | |
Debt Instrument [Line Items] | ||
Total borrowings | $ 120,543 | $ 146,312 |
Short-term portion of borrowings | (10,800) | (39,173) |
Total long-term borrowings | $ 109,743 | 107,139 |
Series A Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.39% | |
Issuance | Nov. 15, 2017 | |
Total borrowings | $ 15,600 | 16,400 |
Short term portion of long-term debt | 800 | |
Periodic payment amount | 400 | |
Remaining principal payment | $ 8,400 | |
Series B Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.50% | |
Issuance | Sep. 30, 2020 | |
Total borrowings | $ 26,000 | 26,000 |
Series C Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.69% | |
Issuance | Sep. 30, 2020 | |
Total borrowings | $ 26,000 | 26,000 |
Credit Agreement - Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total borrowings | 52,943 | $ 77,912 |
Total long-term borrowings | 42,900 | |
Short term portion of long-term debt | $ 10,000 |
Share Repurchase Plan (Details)
Share Repurchase Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 22 Months Ended | ||||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2023 | Jun. 19, 2023 | Oct. 12, 2021 | |
Equity [Abstract] | ||||||
Share buy-back plan, amount authorized | $ 50,000 | $ 75,000 | ||||
Number of shares repurchased (in shares) | 55,920 | 194,482 | ||||
Average price of shares repurchased (in dollars per share) | $ 186.09 | $ 203.42 | ||||
Payment for repurchased shares | $ 10,434 | $ 29,156 | $ 0 | $ 39,600 |
Earnings per Common Share (Sche
Earnings per Common Share (Schedule of Reconciliation of Net Income to Net Income Available to Common Shareholders) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Net income | $ 65,993 | $ 67,329 | $ 70,229 |
Less: Net income allocated to participating securities | (272) | (251) | (277) |
Net income available to common stockholders, basic | 65,721 | 67,078 | 69,952 |
Net income available to common stockholders, diluted | $ 65,721 | $ 67,078 | $ 69,952 |
Earnings per Common Share (Sc_2
Earnings per Common Share (Schedule of Weighted Average Number of Shares) (Details) - shares shares in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Weighted-average common shares outstanding, basic (in shares) | 13,578 | 13,668 | 13,698 |
Weighted-average dilutive securities (in shares) | 26 | 28 | 35 |
Weighted-average common shares outstanding, diluted (in shares) | 13,604 | 13,696 | 13,733 |
Earnings per Common Share (Narr
Earnings per Common Share (Narrative) (Details) - shares | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Anti-dilutive stock options outstanding (in shares) | 4,551 | 8,724 | 0 |
Revenue (Schedule of Revenues b
Revenue (Schedule of Revenues by Segment and Major Source) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Revenue from External Customer [Line Items] | |||
Total net sales | $ 537,255 | $ 518,820 | $ 488,109 |
Maintenance products | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 503,558 | 485,326 | 448,817 |
HCCP | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 33,697 | 33,494 | $ 39,292 |
Americas | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 266,772 | 240,233 | |
Americas | Maintenance products | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 250,348 | 223,470 | |
Americas | HCCP | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 16,424 | 16,763 | |
EMEA | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 190,818 | 204,688 | |
EMEA | Maintenance products | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 181,501 | 196,524 | |
EMEA | HCCP | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 9,317 | 8,164 | |
Asia-Pacific | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 79,665 | 73,899 | |
Asia-Pacific | Maintenance products | |||
Revenue from External Customer [Line Items] | |||
Total net sales | 71,709 | 65,332 | |
Asia-Pacific | HCCP | |||
Revenue from External Customer [Line Items] | |||
Total net sales | $ 7,956 | $ 8,567 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Total net sales | $ 537,255,000 | $ 518,820,000 | $ 488,109,000 |
Accrued liabilities | 30,000,000 | 27,161,000 | |
Contract liabilities | 4,600,000 | 5,000,000 | |
Contract liabilities recognized to revenue | 5,000,000 | ||
Contract assets | 0 | 0 | |
Rebate/Other Discounts | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 33,300,000 | 32,800,000 | |
Accrued liabilities | 11,100,000 | 8,700,000 | |
Cash Discounts | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 5,600,000 | 5,200,000 | |
Allowance for cash discount | $ 600,000 | $ 500,000 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | 12 Months Ended |
Aug. 31, 2023 USD ($) | |
Indemnification Guarantee 2 | |
Loss Contingencies [Line Items] | |
Liabilities related to indemnification agreement | $ 0 |
Senior Officers and Directors | Indemnification Agreement 1 | |
Loss Contingencies [Line Items] | |
Liabilities related to indemnification agreement | 0 |
Purchase Commitment | |
Loss Contingencies [Line Items] | |
Commitment outstanding | $ 0 |
Minimum | Purchase Commitment | |
Loss Contingencies [Line Items] | |
Purchase commitment period | 2 months |
Maximum | Purchase Commitment | |
Loss Contingencies [Line Items] | |
Purchase commitment period | 6 months |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income Before Income Tax, Domestic and Foreign) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Income Tax [Line Items] | |||
United States | $ 49,871 | $ 47,427 | $ 40,949 |
Foreign | 35,292 | 36,681 | 45,550 |
Income before income taxes | 85,163 | 84,108 | 86,499 |
EMEA | |||
Income Tax [Line Items] | |||
Foreign | $ 25,600 | $ 30,300 | $ 38,800 |
Income Taxes (Schedule of Compo
Income Taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Current: | |||
Federal | $ 9,973 | $ 7,487 | $ 5,871 |
State | 1,039 | 861 | 1,007 |
Foreign | 9,023 | 8,114 | 10,944 |
Total current | 20,035 | 16,462 | 17,822 |
Deferred: | |||
United States | (806) | 6 | (1,201) |
Foreign | (59) | 311 | (351) |
Total deferred | (865) | 317 | (1,552) |
Provision for income taxes | $ 19,170 | $ 16,779 | $ 16,270 |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Aug. 31, 2022 |
Deferred tax assets: | ||
Accrued payroll and related expenses | $ 1,110 | $ 881 |
Reserves and accruals | 1,436 | 1,178 |
Research and development expenses | 1,125 | 0 |
Stock-based compensation expense | 2,394 | 2,366 |
Uncertain tax positions and related interest | 991 | 560 |
Uniform capitalization | 2,383 | 2,657 |
Tax credit carryforwards | 3,918 | 3,512 |
Other | 2,673 | 2,630 |
Total gross deferred tax assets | 16,030 | 13,784 |
Valuation allowance | (3,960) | (3,628) |
Total net deferred tax assets | 12,070 | 10,156 |
Deferred tax liabilities: | ||
Property and equipment, net | (4,215) | (4,122) |
Amortization of tax goodwill and intangible assets | (15,415) | (14,931) |
Other | (1,544) | (952) |
Total deferred tax liabilities | (21,174) | (20,005) |
Net deferred tax liabilities | $ (9,104) | $ (9,849) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Income Tax [Line Items] | |||
Operating loss carryforwards | $ 5,300 | $ 5,300 | |
Net deferred tax asset | 400 | 400 | |
Tax credit carryforwards | $ 3,918 | $ 3,512 | |
Provision for income taxes | 22.50% | 19.90% | |
Unrecognized tax benefits | $ 9,275 | $ 9,251 | $ 9,314 |
Unrecognized tax benefits that would impact the effective tax rate | 9,100 | 9,100 | |
Interest and penalties included in income tax expense | 1,800 | 300 | |
Accrued interest and penalties related to uncertain tax positions | 3,400 | 1,600 | |
Total unrecognized tax benefits including interest | 12,700 | 10,900 | |
Unrecognized tax benefits affected by the resolution of tax examinations or expiring statutes of limitation | 400 | ||
Income taxes receivable | 1,100 | 5,000 | |
Foreign Tax Authority | |||
Income Tax [Line Items] | |||
Tax credit carryforwards | $ 3,600 | $ 3,300 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Amount computed at U.S. statutory federal tax rate | $ 17,884 | $ 17,662 | $ 18,165 |
Effect of foreign operations | 1,583 | 317 | 629 |
Net benefit from GILTI/FDII | (2,071) | (2,002) | (1,764) |
Expense (benefit) from stock compensation | 538 | (204) | (1,813) |
Uncertain tax positions and related interest | 1,377 | 273 | 222 |
Other | (141) | 733 | 831 |
Provision for income taxes | $ 19,170 | $ 16,779 | $ 16,270 |
Income Taxes (Schedule of Unrec
Income Taxes (Schedule of Unrecognized Tax Benefits Roll Forward) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2023 | Aug. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits – beginning of fiscal year | $ 9,251 | $ 9,314 |
Net increases (decreases) – prior period tax positions | 0 | 0 |
Net increases – current period tax positions | 191 | 200 |
Expirations of statute of limitations for assessment | (167) | (263) |
Unrecognized tax benefits – end of fiscal year | $ 9,275 | $ 9,251 |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of shares authorized under stock plan | 1,000,000 | ||
Number of shares available for grant | 172,878 | ||
Employee service share-based, Tax benefit from compensation expense | $ 1,300,000 | $ 1,500,000 | $ 2,000,000 |
Restricted Stock Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Granted (in shares) | 23,732 | ||
Employee service share-based, Tax benefit from compensation expense | $ 800,000 | $ 600,000 | $ 1,900,000 |
Compensation cost not yet recognized | $ 1,000,000 | ||
Remaining weighted-average vesting periods | 1 year 9 months 18 days | ||
Weighted-average grant date fair value (in dollars per share) | $ 167.05 | $ 217.03 | $ 208.29 |
Intrinsic value of shares converted | $ 3,700,000 | $ 3,000,000 | $ 8,500,000 |
Market Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Granted (in shares) | 13,695 | ||
Employee service share-based, Tax benefit from compensation expense | $ 900,000 | $ 1,300,000 | |
Compensation cost not yet recognized | $ 2,400,000 | ||
Remaining weighted-average vesting periods | 1 year 10 months 17 days | ||
Weighted-average grant date fair value (in dollars per share) | $ 184.15 | $ 232.99 | $ 184.96 |
Intrinsic value of shares converted | $ 0 | $ 4,400,000 | $ 5,900,000 |
Expected volatility period | 2 years 10 months 20 days | 2 years 10 months 20 days | 2 years 10 months 17 days |
Deferred Performance Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Granted (in shares) | 0 | ||
Compensation cost not yet recognized | $ 0 | ||
Performance Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Period of separation from service | 6 months | ||
Granted (in shares) | 21,990 | ||
Employee service share-based, Tax benefit from compensation expense | $ 800,000 | $ 0 | |
Compensation cost not yet recognized | $ 0 | ||
Weighted-average grant date fair value (in dollars per share) | $ 170.16 | $ 227.24 | $ 197.51 |
Intrinsic value of shares converted | $ 0 | $ 4,000,000 | |
Vesting percentage | 100% | ||
Key Executives | Restricted Stock Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Period of separation from service | 6 months | ||
High Level Employees | Restricted Stock Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
High Level Employees | Market Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Minimum | Market Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting percentage | 0% | ||
Minimum | Performance Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting percentage | 0% | ||
Maximum | Market Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting percentage | 200% | ||
Maximum | Performance Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Vesting percentage | 100% |
Stock-based Compensation (Sched
Stock-based Compensation (Schedule of Stock-based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 6,434 | $ 6,697 | $ 9,555 |
Restricted Stock Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock-based compensation expense | 4,254 | 4,153 | 3,656 |
Market Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock-based compensation expense | 2,180 | 2,544 | 2,294 |
Performance Share Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 3,605 |
Vesting percentage | 100% |
Stock-based Compensation (Sch_2
Stock-based Compensation (Schedule of Restricted Stock Units Activity) (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Number of Units | |||
Beginning Outstanding (in shares) | 78,604 | ||
Granted (in shares) | 23,732 | ||
Converted to shares of common stock (in shares) | (22,032) | ||
Forfeited (in shares) | (488) | ||
Ending Outstanding (in shares) | 79,816 | 78,604 | |
Vested (in shares) | 50,319 | ||
Weighted-Average Grant Date Fair Value Per Unit | |||
Beginning Outstanding (in dollars per share) | $ 148.28 | ||
Granted (in dollars per share) | 167.05 | $ 217.03 | $ 208.29 |
Converted to shares of common stock (in dollars per share) | 182.16 | ||
Forfeited (in dollars per share) | 192.24 | ||
Ending Outstanding (in dollar par share) | 144.24 | $ 148.28 | |
Vested (in dollars per share) | $ 118.94 | ||
Outstanding, Aggregate Intrinsic Value | $ 17,150 | ||
Vested, Aggregate Intrinsic Value | $ 10,812 |
Stock-based Compensation (Sch_3
Stock-based Compensation (Schedule of Valuation Assumptions) (Details) - Market Share Units | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expected volatility | 37.50% | 32.70% | 28.50% |
Risk-free interest rate | 4.30% | 0.60% | 0.20% |
Expected dividend yield | 0% | 0% | 0% |
Stock-based Compensation (Sch_4
Stock-based Compensation (Schedule of Market Share Units Activity) (Details) - Market Share Units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Number of Units | |||
Beginning Outstanding (in shares) | 37,201 | ||
Granted (in shares) | 13,695 | ||
Forfeited (in shares) | (16,947) | ||
Ending Outstanding (in shares) | 33,949 | 37,201 | |
Weighted-Average Grant Date Fair Value Per Unit | |||
Beginning Outstanding (in dollars per share) | $ 212.66 | ||
Granted (in dollars per share) | 184.15 | $ 232.99 | $ 184.96 |
Forfeited (in dollars per share) | 218.88 | ||
Ending Outstanding (in dollar par share) | $ 198.05 | $ 212.66 | |
Outstanding, Aggregate Intrinsic Value | $ 7,295 | ||
Percent of original target number of vested shares | 100% | ||
Maximum | |||
Weighted-Average Grant Date Fair Value Per Unit | |||
Percent of original target number of vested shares | 200% |
Stock-based Compensation (Sch_5
Stock-based Compensation (Schedule of Performance Share Units) (Details) - Performance Share Units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Number of Units | |||
Beginning Outstanding (in shares) | 17,826 | ||
Granted (in shares) | 21,990 | ||
Forfeited (in shares) | (18,668) | ||
Ending Outstanding (in shares) | 21,148 | 17,826 | |
Weighted-Average Grant Date Fair Value Per Unit | |||
Beginning Outstanding (in dollars per share) | $ 227.24 | ||
Granted (in dollars per share) | 170.16 | $ 227.24 | $ 197.51 |
Forfeited (in dollars per share) | 224.67 | ||
Ending Outstanding (in dollar par share) | $ 170.16 | $ 227.24 | |
Outstanding, Aggregate Intrinsic Value | $ 4,544 | ||
Vesting percentage | 100% |
Other Benefit Plans (Narrative)
Other Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Defined contribution plan, employer matching contribution, percent of match | 50% | ||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 6.60% | ||
Defined contribution plan, maximum annual contributions per employee percent | 10% | ||
Discretionary non-elective contribution, percentage | 5% | ||
Pension Plan, Defined Benefit | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Defined contribution plan, cost recognized | $ 4.6 | $ 4.1 | $ 3.9 |
International Pension Plans Defined Benefit | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Defined contribution plan, cost recognized | $ 2.1 | $ 2.1 | $ 1.9 |
Business Segments and Foreign_3
Business Segments and Foreign Operations (Summarized Information by Reportable Segments) (Details) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 USD ($) segment | Aug. 31, 2022 USD ($) | Aug. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 3 | ||
Net sales | $ 537,255 | $ 518,820 | $ 488,109 |
Income from operations | 89,724 | 87,330 | 88,841 |
Depreciation and amortization expense | 8,151 | 8,294 | 7,019 |
Interest income | 231 | 102 | 81 |
Interest expense | 5,614 | 2,742 | 2,395 |
Unallocated Corporate | |||
Segment Reporting Information [Line Items] | |||
Income from operations | (36,417) | (31,516) | (34,874) |
Depreciation and amortization expense | 304 | 343 | 319 |
Americas | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 266,772 | 240,233 | 214,601 |
Income from operations | 60,797 | 54,198 | 51,591 |
Depreciation and amortization expense | 3,656 | 4,320 | 3,219 |
Interest income | 4 | 2 | 1 |
Interest expense | 3,834 | 2,165 | 1,909 |
EMEA | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 190,818 | 204,688 | 208,252 |
Income from operations | 39,456 | 42,058 | 53,003 |
Depreciation and amortization expense | 3,987 | 3,356 | 3,174 |
Interest income | 111 | 0 | 5 |
Interest expense | 1,775 | 574 | 481 |
Asia-Pacific | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 79,665 | 73,899 | 65,256 |
Income from operations | 25,888 | 22,590 | 19,121 |
Depreciation and amortization expense | 204 | 275 | 307 |
Interest income | 116 | 100 | 75 |
Interest expense | $ 5 | $ 3 | $ 5 |
Business Segments and Foreign_4
Business Segments and Foreign Operations (Schedule of Net Sales by Product Group) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Revenue from External Customer [Line Items] | |||
Net sales | $ 537,255 | $ 518,820 | $ 488,109 |
Maintenance products | |||
Revenue from External Customer [Line Items] | |||
Net sales | 503,558 | 485,326 | 448,817 |
Homecare and cleaning products | |||
Revenue from External Customer [Line Items] | |||
Net sales | $ 33,697 | $ 33,494 | $ 39,292 |
Business Segments and Foreign_5
Business Segments and Foreign Operations (Net Sales and Long-Lived Assets by Geographical Area) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 537,255 | $ 518,820 | $ 488,109 |
Long-lived assets | 66,791 | 65,977 | 70,145 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 207,629 | 176,863 | 164,946 |
Long-lived assets | 33,263 | 35,375 | 37,204 |
International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 329,626 | 341,957 | 323,163 |
Long-lived assets | $ 33,528 | $ 30,602 | $ 32,941 |
Subsequent Event (Details)
Subsequent Event (Details) | Oct. 06, 2023 $ / shares |
Subsequent Event | |
Subsequent Events [Line Items] | |
Cash dividend (in dollars par share) | $ 0.83 |