WD-40 (WDFC) 8-K WD-40 Company Reports Record Sales for Year

EXHIBIT 99.1

CONTACT: GARRY RIDGE

PHONE: 619-275-9324

WD-40 COMPANY REPORTS RECORD SALES FOR YEAR

SAN DIEGO, Oct. 18 /PRNewswire-FirstCall/ — WD-40 Company (Nasdaq: WDFC) today reported its fourth-quarter earnings and announced record sales for the fiscal year ended August 31, 2006.

Net sales for the year were $286.9 million, an increase of 9.0% over $263.2 million last year. Net income for the year was $28.1 million compared to $27.8 million last year, an increase of 1.1%. Earnings per share for the year grew 0.5% to $1.66 compared to $1.65 per share last year. Fiscal year 2006 results include the expensing of stock options, which were not included in previous years. Fiscal year stock options expense, after tax, was $1.3 million or 8 cents per share.

“We are pleased with both our sales progress for the year and the fact that we met or exceeded our annual guidance in all areas,” said Garry O. Ridge, WD-40 Company president and chief executive officer. “For the year, we continued to feel the impact from increases in cost of goods as well as our decision to ramp up our investments in marketing and R&D,” Ridge added.

Net sales for the fourth quarter were $75.2 million, a decrease of 1.5% from sales of $76.3 million in the fourth quarter last year.

Net income for the fourth quarter was $6.3 million, a decrease of 39.9% compared to the same period last year. Earnings per share for the quarter were $0.37 compared to $0.63 for the prior year’s quarter. Stock options expense, after tax, in the fourth quarter was $0.3 million or 2 cents per share.

“Our fourth quarter didn’t track along in proportion with our historical sales patterns as a result of the timing of promotions and new product introductions, Ridge said. “We also invested more in marketing to support innovations introduced over the past year. We expect that investment to help our brands going forward.”

Fiscal Year 2007 Guidance

In fiscal year 2007, WD-40 Company expects net sales to grow 7%-13% to $307-$324 million. WD-40 Company expects net income of $29.1—$31.6 million in 2007, achieving earnings per share between $1.70 to $1.85 based on an estimated 17.1 million shares outstanding. Fiscal year 2007 outlook reflects the impact of the company’s move to open a direct operation in China. The investment in China is expected to reduce net income in 2007 by approximately $1.0 million, or 6 cents per share.

“We are pleased to report that we are making great progress in opening our direct operations in China,” Ridge said.

“While we continue to look for acquisitions that meet our guidelines for success, we feel the investments we are making in China now are similar to an acquisition, but they impact the P&L, more so than the balance sheet.”

As previously announced, the board of directors of WD-40 Company declared a regular quarterly dividend on Friday, October 6, 2006 of 22 cents per share, payable October 31, 2006, to shareholders of record on October 17, 2006.

Total sales for the quarter were 64% from the Americas, 28% from Europe and 8% from Asia/Pacific.

In the Americas, sales for the fourth quarter were down 6.7% from a year ago and up 6.1% on a year-to-date basis.

“We had solid growth for the year in Canada and Latin America, driven by lubricant sales,” Ridge said. “US sales growth was spurred by household products.”

In Europe, sales were up 10.3% for the fourth quarter and up 15.7% for the year.

“While we continued our strong growth in all of our direct markets in Europe, we also had double-digit growth in our distributor markets in that region,” Ridge said. “The success we have had in our European markets clearly demonstrates how investments in building our business in growth markets pays off for the long-term.”

In the Asia/Pacific region, sales for the fourth quarter were up 5.1% from comparable period last year and sales for the year were up 12.1% over last year.

Global sales of the lubricants WD-40 and 3-IN-ONE Oil(R) in the fourth quarter were $50.2 million, down 1.2%, and $190.5 million for the year, up 9.4%.

“This is the fourth year in a row where we have grown our lubricant business by more than 8% across the globe,” Ridge said.

Sales of heavy-duty hand cleaners Lava(R) and Solvol(R) were up 1.6% to $1.9 million for the fourth quarter, and for the year were $6.6 million, down 4.1%.

Sales of household products X-14(R), Carpet Fresh(R), 2000 Flushes(R), Spot Shot(R) and 1001(R) were $23.1 million during the fourth quarter, down 2.3%, and were $89.8 million year to date, up 9.2% from last year.

“We had solid growth for the year across the globe in all of our household products as we continue our strategy of innovation followed by distribution,” Ridge said.

“We only see one market, and that is the global marketplace,” Ridge said. “That is why we continue to invest in innovations that will not only help maintain our base business, but will also fuel future growth in our existing markets and allow us to enter new markets.”

WD-40 Company also reported that its return on invested capital (ROIC) was 17.1% in 2006 compared to 18.4% last fiscal year. Stock options expense in 2006 reduced ROIC by 0.7%.

WD-40 Company, with headquarters in San Diego, is a global consumer products company dedicated to building brand equities that are first or second choice in their respective categories. The company will leverage and build the fortress of brands of WD-40 Company by developing and acquiring brands that deliver a unique high value to end users and that can be distributed across multiple trade channels in one or more areas of the world. WD-40 Company produces multi-purpose lubricants, WD-40(R), and 3-IN-ONE(R), the Lava(R) and Solvol(R) brands of heavy-duty hand cleaners, and household products 2000 Flushes(R), X-14(R), Carpet Fresh(R), Spot Shot(R) and 1001(R). WD-40 Company markets its products in more than 160 countries worldwide and recorded sales of $286.9 million in 2006. Additional information about WD-40 Company can be obtained online at www.wd40.com.

Except for the historical information contained herein, this news release contains forward-looking statements concerning WD-40 Company’s outlook for sales, earnings, dividends and other financial results. These statements are based on an assessment of a variety of factors, contingencies and uncertainties considered relevant by WD-40 Company. Forward-looking statements involve risks and uncertainties, which cause actual results to differ materially from the forward-looking statements, including impact of cost of goods, the fluctuation in advertising and promotion expenditures and the uncertainty of market conditions, both in the United States and internationally. The company’s expectations, beliefs and projections are expressed in good faith and are believed by the company to have a reasonable basis, but there can be no assurance that the company’s expectations, beliefs or projections will be achieved or accomplished.

The risks and uncertainties are detailed from time to time in reports filed by WD-40 Company with the SEC, including Forms 8-K, 10-Q, and 10-K, and readers are urged to carefully review these and other documents.

WD-40 Company

Consolidated Condensed Statements of Operations

	Three Months Ended August 31,						Fiscal Year Ended August 31,
	2006			2005			2006			2005
Net sales	$	75,169,000		$	76,314,000		$	286,916,000		$	263,227,000
Cost of products sold(1)		38,778,000			38,388,000			148,516,000			133,833,000
Gross profit		36,391,000			37,926,000			138,400,000			129,394,000
Operating expenses:
Selling, general and administrative		19,787,000			15,992,000			71,767,000			63,529,000
Advertising and sales promotion		5,982,000			4,534,000			20,079,000			17,893,000
Amortization of intangible asset		138,000			134,000			532,000			552,000
Income from operations		10,484,000			17,266,000			46,022,000			47,420,000
Other income (expense):
Interest expense, net		(692,000	)		(1,097,000	)		(3,503,000	)		(5,133,000	)
Other (expense) income, net		(65,000	)		119,000			339,000			578,000
Income before income taxes		9,727,000			16,288,000			42,858,000			42,865,000
Provision for income taxes		3,405,000			5,765,000			14,746,000			15,067,000
Net income	$	6,322,000		$	10,523,000		$	28,112,000		$	27,798,000
Earnings per common share:
Basic	$	0.37		$	0.63		$	1.67		$	1.67
Diluted	$	0.37		$	0.63		$	1.66		$	1.65
Weighted average common shares outstanding, basic		16,900,319			16,679,664			16,784,473			16,629,057
Weighted average common shares outstanding, diluted		17,074,942			16,810,508			16,912,355			16,807,399
Dividends declared per share	$	0.22		$	0.22		$	0.88		$	0.84

⁽¹⁾ Includes cost of products acquired from related party of $9,783,000 and $10,702,000 for the three months ended August 31, 2006 and 2005, respectively; and $41,004,000 and $38,384,000 for the fiscal years ended August 31, 2006 and 2005, respectively.

WD-40 Company

Consolidated Condensed Balance Sheets

	August 31, 2006			August 31, 2005
Assets
Current assets:
Cash and cash equivalents	$	45,206,000		$	37,120,000
Trade accounts receivable, less allowance for cash discounts, returns and doubtful accounts of $1,839,000 and $1,506,000		44,491,000			44,487,000
Product held at contract packagers		1,385,000			1,814,000
Inventories		15,269,000			8,041,000
Current deferred tax assets, net		4,331,000			2,946,000
Other current assets		4,858,000			6,784,000
Total current assets		115,540,000			101,192,000
Property, plant and equipment, net		8,940,000			8,355,000
Goodwill		96,118,000			95,858,000
Other intangibles, net		42,722,000			42,884,000
Investment in related party		972,000			1,112,000
Other assets		4,183,000			4,852,000
	$	268,475,000		$	254,253,000
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	10,714,000		$	10,714,000
Accounts payable		11,287,000			13,671,000
Accounts payable to related party		463,000			1,945,000
Accrued liabilities		11,678,000			14,058,000
Accrued payroll and related expenses		7,485,000			3,828,000
Income taxes payable		2,040,000			2,484,000
Total current liabilities		43,667,000			46,700,000
Long-term debt		53,571,000			64,286,000
Deferred employee benefits and other long-term liabilities		1,895,000			1,838,000
Long-term deferred tax liabilities, net		13,611,000			11,363,000
Total liabilities		112,744,000			124,187,000
Shareholders’ equity:
Common stock, $.001 par value, 36,000,000 shares authorized — 17,510,668 and 17,222,410 shares issued		17,000			17,000
Paid-in capital		62,322,000			52,990,000
Unearned stock-based compensation		—			(136,000	)
Retained earnings		103,335,000			89,983,000
Accumulated other comprehensive income		5,083,000			2,238,000
Common stock held in treasury, at cost (534,698 shares)		(15,026,000	)		(15,026,000	)
Total shareholders’ equity		155,731,000			130,066,000
	$	268,475,000		$	254,253,000

WD-40 Company

Consolidated Condensed Statements of Cash Flows

	Fiscal Year Ended August 31,
	2006			2005
Cash flows from operating activities:
Net income	$	28,112,000		$	27,798,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,467,000			3,007,000
Gains on sales and disposals of property and equipment		(38,000	)		(24,000	)
Deferred income tax expense		1,396,000			3,474,000
Tax benefit from exercise of stock options		—			377,000
Excess tax benefits from exercise of stock options		(503,000	)		—
Distributions received and equity losses (earnings) from related party, net		140,000			(180,000	)
Stock-based compensation		1,836,000			22,000
Changes in assets and liabilities:
Trade accounts receivable		1,146,000			(3,635,000	)
Product held at contract packagers		429,000			161,000
Inventories		(6,889,000	)		(1,655,000	)
Other assets		1,976,000			(970,000	)
Accounts payable and accrued expenses		(1,621,000	)		3,262,000
Accounts payable to related party		(1,481,000	)		14,000
Income taxes payable		147,000			(125,000	)
Deferred employee benefits and other long-term liabilities		80,000			38,000
Net cash provided by operating activities		28,197,000			31,564,000
Cash flows from investing activities:
Purchases of short-term investments		(31,675,000	)		—
Sales of short-term investments		31,675,000			—
Proceeds from collections on note receivable		125,000			50,000
Capital expenditures		(2,947,000	)		(3,101,000	)
Proceeds from sales of property and equipment		267,000			162,000
Net cash used in investing activities		(2,555,000	)		(2,889,000	)
Cash flows from financing activities:
Repayments of long-term debt		(10,714,000	)		(10,000,000	)
Proceeds from issuance of common stock		7,018,000			2,839,000
Excess tax benefits from exercise of stock options		503,000			—
Dividends paid		(14,760,000	)		(13,967,000	)
Net cash used in financing activities		(17,953,000	)		(21,128,000	)
Effect of exchange rate changes on cash and cash equivalents		397,000			140,000
Increase in cash and cash equivalents		8,086,000			7,687,000
Cash and cash equivalents at beginning of period		37,120,000			29,433,000
Cash and cash equivalents at end of period	$	45,206,000		$	37,120,000

WD-40 Company

Consolidated Condensed Statements of Comprehensive Income

	Three Months Ended August 31,					Fiscal Year Ended August 31,
	2006		2005			2006		2005
Net income	$	6,322,000	$	10,523,000		$	28,112,000	$	27,798,000
Other comprehensive income (loss):
Equity adjustment from foreign currency translation, net of tax		1,387,000		(87,000	)		2,845,000		579,000
Total comprehensive income	$	7,709,000	$	10,436,000		$	30,957,000	$	28,377,000

WD-40 Company

Return on Invested Capital

In addition to GAAP measures, WD-40 Company management believes that the quality of business performance can also be illustrated by its Return on Invested Capital (ROIC).

Return on Invested Capital is important to investors because it provides an indication as to how well a company is utilizing the resources invested in a business. Long-term economic value is created by companies with Returns on Invested Capital that exceed the company’s weighted average cost of capital.

Return on Invested Capital is calculated as follows:

ROIC = Net Operating Profit After Tax ÷ Average Total Assets less other cash minus non-interest bearing liabilities

• Net Operating Profit After Tax = Operating Income + Amortization – Tax

• Average Total Assets = (Beginning Total Assets + Ending Total Assets) divided by 2

• Other Cash = Total Cash – Transactional Cash representing 3% of Annual Net Sales

• Non-interest bearing Liabilities = Accounts Payable + Accrued Liabilities + Accrued Payroll & Related + Income Tax Payable

The calculation is illustrated below.

Worldwide	FY04		FY05		FY06
Net Sales	242,467		263,227		286,916
Operating Profit	45,449		47,420		46,022
Net Income	25,643		27,798		28,112
Amortization	224		552		532
Tax Rate	34.0	%	35.2	%	34.4	%
NOPAT = Op Inc + Amort after Tax	30,144		31,110		30,536
Total Assets(beginning)	236,658		236,775		254,253
Total Assets(ending)	236,775		254,253		268,475
Total Assets(average)	236,717		245,514		261,364
Cash	29,433		37,120		45,206
Transactional cash 3% of net sales	7,274		7,897		8,607
Other Cash	22,159		29,223		36,599
Non-interest bearing liabilities:
Accounts Payable	13,836		15,616		11,750
Accrued Liabilities	12,151		14,058		11,678
Accrued Payroll & Related	3,935		3,828		7,485
Income Tax Payable	2,613		2,484		2,040
Long-term Deferred Tax	4,853		11,363		13,611
Total Non-interest Bearing Liabilities:	37,388		47,349		46,564
Return on Invested Capital (ROIC)	17.0	%	18.4	%	17.1	%