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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

WD-40 COMPANY
(Exact Name of Registrant as specified in Charter)

Securities registered pursuant to Section 12(b) of the Act:

Title of Class: None

Securities registered pursuant to Section 12(g) of the Act:

Title of Class: Common Stock, $.001 par value

        Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ý    No o.

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: o.

        The aggregate market value (closing price) of the voting stock held by non-affiliates of the Registrant as of October 18, 2002 was $449,680,000.

        As of October 18, 2002 the Registrant had 16,525,400 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

        The Proxy Statement for the annual meeting of stockholders on December 17, 2002 is incorporated by reference into PART III, Items 10-12.

PART I

ITEM 1—Business

(a)

General Development of Business.

        For more than four decades, WD-40 Company sold only one petroleum-based product, known as WD-40®. WD-40 is a multi-purpose product which acts as a lubricant, rust preventative, penetrant, cleaner and moisture displacer. In December 1995, the Company acquired the 3-IN-ONE® Oil brand from affiliates of Reckitt & Colman, P.L.C. 3-IN-ONE Oil is a lower cost general-purpose lubricant that is useful when precise applications of a lubricant are needed. In April 1999, the Company acquired the Lava® brand heavy-duty hand cleaner from Block Drug Company, and in October 2000, acquired the Solvol® brand heavy-duty hand cleaner from Unilever Australia, Ltd. The four brands complement each other, providing the Company with a line of both lubricant and heavy-duty hand cleaning products aimed at the Do-It-Yourself ("DIY"), hardware, automotive and other retail and industrial markets. In April 2001, the Company acquired three additional brands of household cleaning products, 2000 Flushes®, X-14® and Carpet Fresh®. The Company added to its fortress of brands through the acquisition in May 2002 of the Spot Shot® brand, an aerosol stain remover and a leading brand in the carpet stain remover category. The Spot Shot brand fits well within the Company's brand portfolio, alongside the other household product brands.

        The acquisition of the 3-IN-ONE Oil brand provided the Company with an existing network of distribution in 17 countries, including several markets in which the WD-40 brand had not been sold. The Company has been using this distribution network to introduce the WD-40 brand to these markets and to add distribution channels to markets that have been previously established. This trend has caused a reduction in 3-IN-ONE sales in certain markets as sales of those products are replaced by sales of WD-40.

        In fiscal 1999, the Company acquired the Lava brand of heavy-duty hand cleaners from Block Drug Company, Inc. The Lava brand is more than 100 years old and is well recognized by U.S. consumers. Because the characteristics of the Lava consumer are very similar to those of the WD-40 consumer, the Company feels that the strength of the WD-40 brand name will be an effective vehicle in promoting the growth of Lava in the U.S. In addition, the Company saw opportunities to develop the brand internationally and in distribution channels in which the brand has not yet been sold.    During the first quarter of fiscal 2001, the Company introduced the Lava brand into the U.K. market and acquired the Solvol brand of heavy-duty hand cleaner in Australia from Unilever Australia Ltd. In fiscal 2002, the Lava brand was introduced into the Canadian and Latin American markets.

        On April 30, 2001, the Company completed its acquisition of the business, brand trademarks, patents and other tangible and intangible assets known as Global Household Brands. The three principal brand trademarks are 2000 Flushes and X-14 automatic toilet bowl cleaners, X-14 hard surface cleaners, and Carpet Fresh rug and room deodorizers. The acquisition was made to move the Company forward in its fortress of brands strategy, while also providing economies of scale in sales, manufacturing, and administration. The Global Household Brands' broker network and grocery business, combined with the WD-40 Company's DIY distribution, gives the Company good growth potential for all brands across new trade channels.

        On May 31, 2002, the Company completed the acquisition of the business, worldwide brand trademarks and other intangible assets of Heartland Corporation, through the acquisition of the entire capital stock of Heartland Corporation, a Kansas corporation. The principal brand acquired by the Company is the Spot Shot brand, an aerosol carpet stain remover. The acquisition of this brand expands the Company's product offerings, and offers potential for leveraging expanded product distribution. The acquisition also included related Spot Shot products and a group of developing brands, which were subsequently sold to former employees of Heartland.

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(b)

Financial Information About Industry Segments.

        The Company's operating segments are determined consistent with the way management organizes and evaluates financial information internally for making operating decisions and assessing performance. The Company is organized primarily on the basis of geographical area into the following segments: the Americas, Europe and Asia/Pacific. In addition, management reviews product performance on the basis of revenue.

        The Company's revenue comes from three product categories—multi-purpose lubricants, heavy-duty hand cleaners, and household products. The first two are marketed primarily through retail chain stores, hardware stores, automotive parts outlets, and industrial distributors and suppliers, while the household products are mainly sold in grocery and mass retail.

(c)

Narrative Description of Business.

        WD-40 Company manufactures and markets two multi-purpose lubricant products known as "WD-40" and "3-IN-ONE Oil", two heavy-duty hand cleaners known as "Lava" and "Solvol", and four household cleaners known as "X-14" hard surface cleaners and automatic toilet bowl cleaners, "2000 Flushes" automatic toilet bowl cleaner, "Carpet Fresh" room and rug deodorizer, and "Spot Shot" aerosol carpet spot remover.

        WD-40 is sold in aerosol cans and in liquid form through retail chain stores, hardware stores, warehouse club stores, automotive parts outlets, and industrial distributors and suppliers. It has a wide variety of consumer uses in, for example, household, marine, automotive, construction, repair, sporting goods, and gardening applications. The product also has numerous industrial applications.

        3-IN-ONE Oil is a drip oil lubricant, sold primarily through the same distribution channels as the WD-40 brand. It is a low-cost, entry-level lubricant. The unique drip tip allows precise application for small mechanisms and assemblies, tool maintenance, and threads on screws and bolts. 3-IN-ONE Oil is a market share leader among drip oils for household consumers. It also has wide industrial applications in such areas as locksmithing, HVAC, marine, farming, construction, and jewelry manufacturing. The product's high quality and the established distribution network that was acquired with the brand have enabled the product to gain international acceptance. In fiscal 2000, the Company introduced a patented new telescoping spout for 3-IN-ONE that allows precise delivery of oil in tight, hard-to-reach places.

        The Company purchased the Lava brand of heavy-duty hand cleaner from Block Drug Company in April 1999. The Lava brand is more than 100 years old and has exceptional awareness among American consumers. At the time of the acquisition, the brand was comprised of two sizes of bar soap and one size of liquid cleaner. The Company's strategy in acquiring this brand was to first expand distribution in the U.S. and then begin to market Lava internationally. Prior to the Company's acquisition, the brand had been sold in a limited number of domestic trade channels, notably supermarkets and drug stores. Because of its heavy-duty characteristics, the Lava brand has appeal to consumers who shop in other channels such as hardware, automotive and club stores. The Company is developing distribution in these channels where, with its WD-40 and 3-IN-ONE brands, it has considerable marketing experience. For international expansion in the Heavy-Duty hand cleaner market, the Company launched the Lava brand in the U.K., and acquired the Solvol brand in Australia during the first quarter of fiscal year 2001. Solvol, Australia's leading brand of heavy duty hand cleaner, was sold as a bar soap at the time of acquisition. In December of 2000, the Company increased the product offering of the brand by adding a liquid cleaner.

        The Company acquired the X-14, 2000 Flushes and Carpet Fresh brands with the April 2001 stock purchase of HPD Holdings, Corp. and its wholly owned subsidiary HPD Laboratories, Inc., doing business as Global Household Brands. X-14 is sold as a liquid mildew stain remover, a liquid bathroom soap scum remover, a liquid daily shower cleaner, and an automatic toilet bowl cleaner. 2000 Flushes is

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a pioneering line of long-duration automatic toilet bowl cleaners. Carpet Fresh initiated the rug deodorizer category upon its introduction in 1978. The Carpet Fresh powder is sprinkled on carpets and vacuumed up. Carpet Fresh is also sold as an aerosol foam which doesn't require vacuuming. In June 2002, the Company introduced a line extension of the Carpet Fresh brand with the introduction of Carpet Fresh Auto, a no-vacuum foam auto refresher. At the time of the acquisition, the brands were sold primarily through grocery, drug, and mass retail channels. The Company is expanding the distribution of these items into new channels. At the same time, the broker network is helping to grow the distribution of the Company's other brands into the grocery channels.

        The Company acquired the Spot Shot brand with the May 2002 stock purchase of Heartland Corporation. The Spot Shot brand is an aerosol carpet spot remover. At the time of the acquisition, the brand was sold primarily through food and mass retail, club stores, hardware, and home center stores. The Company sees growth potential for the brand through increased brand awareness, consumer usage, and household penetration, along with the expansion of the brand into new trade channels.

        The Company owns numerous patents, but relies primarily upon its established trademarks, brand names, and marketing efforts, including advertising and sales promotion, to compete effectively. The WD-40, 3-IN-ONE, Lava, X-14, 2000 Flushes, Carpet Fresh, and Spot Shot trademarks are registered in the United States and in various foreign countries.

        At August 31, 2002 the Company employed 211 people worldwide: 122 by the United States parent corporation, 5 of which are based in the Malaysian sales office; 9 by the Company's Canadian subsidiary; 69 by the United Kingdom subsidiary, including 11 in Germany, 10 in France, 6 in Italy and 8 in Spain; 8 by the Australian subsidiary; and 3 by WD-40 Manufacturing Company, the Company's manufacturing subsidiary. The majority of the Company's employees are engaged in sales and/or marketing activities.

(d)

Financial Information About Foreign and Domestic Operations and Export Sales.

        The information required by this item is included in Note 15—Business Segments and Foreign Operations, of the Company's consolidated financial statements, which have been included in ITEM 8, Financial Statements and Supplementary Data. The Company is subject to a variety of risks due to its foreign operations, including currency risk and credit risk. The Company attempts to minimize its exposure to foreign currency exchange fluctuations by the use of forward contracts on non-functional currency cash balances. With the continuing expansion of the Company's business in Asia, Latin America, Eastern Europe, the Middle East and various states in the former Soviet Union, the Company is subject to increased credit risk for product sold to customers in these areas.

ITEM 2—Properties

The Americas

        The Company owns and occupies an office and plant facility at 1061 Cudahy Place, San Diego, California 92110. The building consists of approximately 11,000 square feet of office space and 4,000 square feet of plant and storage area. The Company leases an additional 5,600 square feet of office and storage space in San Diego. The Company leases approximately 11,000 square feet of office space in total for sales offices in each of the following cities: Springfield, New Jersey; Atlanta, Georgia; Miami, Florida; and Northbrook, Illinois.    The Company also has a lease ending on November 30, 2002 for 19,000 square feet of office space in Olathe, Kansas. This space is no longer fully utilized, as effectively all the Heartland operations have been integrated into the Company. The Company leases approximately 2,000 square feet of office space in Etobicoke, Ontario, Canada.

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Europe

        The Company owns and occupies an office and plant facility at Kiln Farm, Milton Keynes, England. The building consists of approximately 8,000 square feet of office space and 4,700 square feet of plant and storage area. In addition, the Company leases space for the branch offices in Germany, France, Spain and Italy.

Asia-Pacific

        The Company leases approximately 2,500 square feet of office space in Epping, New South Wales, Australia. The Company leases approximately 1,800 square feet of office space for a sales office in Kuala Lumpur, Malaysia.

        With minor adjustments, the Company believes that these properties should be sufficient to meet its needs for office and plant facilities for the near future. Increased growth resulting from the recently acquired brands may cause the Company to acquire and/or modify its space in future years.

ITEM 3—Legal Proceedings

        The Company is party to various claims, legal actions and complaints, including product liability litigation, arising in the ordinary course of business. In the opinion of management, all such matters are adequately covered by insurance or will not have a material adverse effect on the Company's financial position or results of operations, with the exception of the item described below.

        In February 2002, the Company agreed to a settlement related to a patent infringement case on the 2000 Flushes product filed by HPD Holdings Corp. prior to acquisition by the Company. The total amount of the settlement was $1.4 million, and was received by the Company on March 1, 2002. The balance sheet as of August 31, 2002 reflects a reduction of goodwill in the amount of $0.9 million, which includes $0.1 million for litigation related expenses, and $0.4 million in taxes.

        On October 2, 2002, a legal action was filed in the Circuit Court of the 11^th Judicial Circuit in and for Miami-Dade County, Florida against the registrant by Michael William Granese, a Florida citizen, on behalf of himself and all others similarly situated, to seek damages allegedly arising out of the use of automatic toilet bowl cleaners ("ATBCs") sold by the registrant. ATBCs are marketed and sold by the registrant under the brand names, 2000 Flushes and X-14.

        The plaintiff seeks to certify a class of plaintiffs consisting of consumers in the state of Florida who, since September 1, 1998, have purchased and used ATBCs sold by the registrant and who, at the time of the first use of such products, had a product warranty for a toilet in which such products were used. The plaintiff alleges that the product warranty for such toilet may have been voided by the use of the registrant's ATBC. In addition to damages attributed to the value of the lost product warranty, plaintiff seeks damages for the purchase price of the ATBC which is allegedly unfit for its intended purpose.

        The legal action includes allegations of negligent omission of information concerning the potential loss of product warranties and alleged violations of the Florida Deceptive and Unfair Trade Practices Act (Fla. Stat. §§501.201 - 501.213) for failing to inform consumers of the potential loss of product warranties. The plaintiff seeks punitive and/or treble damages in addition to actual or compensatory damages, as well as costs and attorneys fees as may be provided for by Florida law.

        If class certification is granted, it is reasonably possible that the outcome of the suit could have a material adverse effect on the Company's results of operations. There is not sufficient information to estimate the Company's exposure at this time.

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ITEM 4—Submission of Matters to a Vote of Security Holders

        Not applicable.

Executive Officers of the Registrant

        The following table sets forth the names and ages of, and the positions and offices held by, all executive officers within the Company:

        All executive officers hold office at the pleasure of the Board of Directors. In addition, the Company has entered into employment agreements with Mr. Ridge, Mr. Irwin, Mr. Milner, Mr. Freeman, Mr. Holdsworth, and Mr. Noble for three-year terms. Subject to renewal, Mr. Ridge's current contract term expires on August 1, 2005 and the other officers' contracts expire on July 9, 2004.

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PART II

ITEM 5—Market For Registrant's Common Equity and Related Stockholder Matters

        The Company's common stock is traded in the over-the-counter market (Nasdaq National Market System). As of August 31, 2002, the approximate number of holders of record of the Company's common stock was 1,842. The following table sets forth the range of high and low sales prices on the Nasdaq National Market of the Company's common stock for the periods indicated, as reported by Nasdaq.

SELECTED STOCK INFORMATION

        The Company has historically paid regular quarterly cash dividends on its common stock. During the third quarter of fiscal 2001 the dividend per share was reduced from a historical $0.32 dividend per share, to a $0.27 per share to finance the acquisition of HPD Holdings Corp. During the third quarter of fiscal 2002 the dividend per share was reduced from $0.27 down to $0.20 in conjunction with the additional debt taken on to complete the acquisition of Heartland Corporation. The Board of Directors of the Company presently intends to continue the payment of regular quarterly cash dividends on the common stock. The Company's ability to pay dividends could be affected by future business performance, liquidity, capital needs, alternative investment opportunities, and loan covenants.

Issuance of Unregistered Securities

        As of March 1, 2002, the Company issued a total of 3,451 shares of its common stock to 7 of its non-employee directors pursuant to the Company's Amended and Restated WD-40 Company 1999 Non-Employee Director Restricted Stock Plan (the "Plan"). The shares were issued in lieu of cash compensation for all or part of each electing director's annual fee for services as a director. The number of shares issued was determined according to a formula set forth in the Plan equal to the total compensation to be paid in shares divided by 90% of the closing price of the Company's shares on the first business day of March. The total amount of director compensation paid by the issuance of shares under the Plan was $85,000 and the fair market value of the shares issued as of March 1, 2002 was $94,444. The issuance of the shares of the Company's common stock to the directors was exempt from registration under the Securities Act of 1933 (the "Act") pursuant to Section 4(2) of the Act as a transaction by an issuer not involving a public offering. The shares issued to directors are subject to certain restrictions upon transfer.

        As of May 31, 2002, the Company issued a total of 208,017 shares of its common stock to Scott Hilkene and 226,105 shares to Sally Hilkene as part of the total consideration paid by the Company upon the acquisition of Heartland Corporation, a Kansas corporation. The shares issued as part of the purchase price consideration for the acquisition had a value of $12,000,000 and the number of shares was determined based upon the average closing price of the Company's common stock for the 5 business days prior to the acquisition closing date of May 31, 2002. The foregoing issuance of shares of the Company's common stock was exempt from registration under the Act pursuant to Section 4(2) of the Act as a transaction by an issuer not involving a public offering. The shares are subject to certain restrictions upon transfer. The Company and Scott Hilkene and Sally Hilkene entered into a Registration Rights Agreement with respect to the shares and the shares have been registered for resale under a Registration Statement on Form S-3 filed by the Company on August 13, 2002.

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ITEM 6—Selected Financial Data

        The following data has been derived from the Company's audited financial statements The impact of the accounting change discussed in Item 8 was not material to previously reported results; therefore such results have not been recast to reflect the change. The consolidated balance sheets at August 31, 2002 and 2001 and the related consolidated statements of income, of cash flows and of shareholders' equity of the Company for the three years ended August 31, 2002 and notes thereto appear elsewhere herein. The data should be read in conjunction with such financial statements and other financial information appearing elsewhere herein.

        As described in Note 3 to the consolidated financial statements, the Company completed acquisitions of Heartland Corporation and HPD Holdings Corp. during fiscal 2002 and fiscal 2001, respectively. Sales of the Spot Shot brand acquired in the Heartland acquisition added $7.3 million in household product sales during fiscal 2002. Sales of products acquired in the HPD acquisition added $64.9 million, and $22.1 million in household product sales during fiscal 2002 and 2001, respectively.

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        As described in Note 4 to the consolidated financial statements, at the beginning of fiscal 2002, the Company adopted Statement of Financial Accounting Standard No. 142 ("SFAS 142"), which governs the amortization of acquisition-related goodwill and intangibles. As a result, beginning with the first quarter of 2002, the Company is no longer amortizing acquisition related goodwill and trade names that have been determined to have indefinite lives. With the additional acquisition related goodwill and intangibles from the Global Household Brands and Heartland acquisitions, the Company would have incurred amortization costs of $7.1 million related to its goodwill and intangible assets, had it not been for the new accounting standard.

        As described in Note 5 to the consolidated financial statements, effective March 1, 2002, the Company adopted the consensus reached by the Emerging Issues Task Force ("EITF") of the FASB in Issue 01-09 ("EITF 01-09") entitled, Accounting for Consideration Given by a Vendor to a Customer or Reseller of the Vendor's Products, which requires the reclassification of certain costs formerly included in advertising and sales promotion expense to a reduction in sales, thereby reducing both net sales and advertising and sales promotion expenses by equal and offsetting amounts. Promotional payments formerly included in advertising and sales promotion that are now being recorded as reductions in sales include: coupons, consideration and allowances given to retailers for space in their stores (slotting fees), consideration and allowances given to obtain favorable display positions in the retailer's stores, co-operative advertising and other promotional activity. Results reported reflect this application, and accordingly, all prior period financial statements have been reclassified to comply with this guidance. Amounts reclassified for pro forma presentation for fiscal years 1998 through 2001 in the application of this guidance is as follows (in thousands): fiscal year 2001, $10,828; fiscal year 2000, $6,229; fiscal year 1999, $5,995; and fiscal year 1998, $6,194.

ITEM 7—Management's Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

        Year ended August 31, 2002 compared with the year ended August 31, 2001

        During fiscal year 2002, the Company had sales of products within three primary categories: lubricants, hand cleaners and household products. Lubricants include the WD-40 and 3-IN-ONE brands, hand cleaners include the Lava and Solvol brands, and the household products category include Carpet Fresh, 2000 Flushes, X-14, and Spot Shot. Lubricant sales for the year were $134.4 million, up 2% over the prior year. Hand cleaner sales were $10.2 million, up by 6%. Household product sales were $72.2 million in the current year compared to $22.1 million in the prior year. The prior year included only four months of household product sales subsequent to the acquisition of Global Household Brands in April 2001, and the current year had increased household product sales as a result of the acquisition of the Spot Shot brand in May 2002.

        The reported results reflect the adoption of EITF Issue 01-09: "Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor's Products." The application of this guidance has no effect on net income, but reclassifies certain marketing and promotional expenses from operating expenses to a reduction in sales. The related marketing and promotional expenses that are now being recorded as reductions in sales include, coupons, consideration and allowances given to retailers for space in their stores (slotting fees), consideration and allowances given to obtain favorable display positions in the retailer's stores, co-operative advertising and other promotional activity.

        This reclassification reduced both net sales and advertising and sales promotion expense during the year ended August 31, 2002 by $21.7 million and by $10.8 million during the prior year. The increase in promotional costs requiring reclassification in the current year is primarily due to the marketing efforts associated with the household product line, combined with the overall increase in household product sales in fiscal 2002 compared to the prior year. A larger portion of the marketing investment to support

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the household products business requires reclassification. The effect on sales for the year is as follows (in thousands):

        Net sales were $216.8 million for the year ended August 31, 2002, an increase of 32% from net sales of $163.7 million in the prior year. The increase is due to sales of household products along with increases in hand cleaner sales over the prior year. Excluding household product sales, sales for the year were up 2% compared to the prior year.

        In the Americas region, sales for fiscal 2002 were up 42% over the prior year. This increase is also due to the household product sales, which are currently only sold in the Americas. Sales of the household products increased significantly over the prior year, $72.2 million in fiscal 2002 versus $22.1 million in the prior year. Most of the increase is due to the fact that the prior year included only four months of sales after the acquisition of Global Household Brands on April 30, 2001. In addition, fiscal 2002 added $7.3 million in sales of Spot Shot during the last three months of the year, after the acquisition of Heartland on May 31, 2002. The region's lubricant sales decreased by $2.3 million or 3%, but were partially offset by an increase in hand cleaner sales of $1 million or 12%.

        The decrease in lubricant sales in the Americas is principally a result of the decrease in WD-40 sales, which is primarily due to the Company's decision to discontinue the WD-40 bonus ounce promotion that offered 20% of free product in each can. For the past 8 years, that promotion had been a significant revenue source in the U.S. market; however, on the downside it put a large amount of free product into the market. The promotion was discontinued this year in conjunction with the Company's long-term plan to shorten the consumer repurchase cycle of WD-40. Lubricant sales in the Latin America region decreased 10% and $0.9 million overall as a result of the economic challenges in the region, primarily caused by a $1 million decrease in sales in Argentina. Strong sales in Mexico, Central America and throughout the Caribbean partially offset the poor performance in Argentina. Lubricant sales in Canada were down 3% due to promotional costs and foreign exchange differences.

        Sales of heavy-duty hand cleaners for the Americas increased to $8.8 million, up from $7.8 million in the prior year. The increase in the Americas hand cleaner sales is attributable to the U.S. market. During the year, an increase in Lava in-store promotional activity, television advertising, and coupon offerings resulted in significantly higher sales levels. Currently, Lava is sold primarily in the U.S.

        For this region, 90% of sales in the third quarter this year came from the U.S., and 10% from Canada and Latin America. This distribution reflects a change from fiscal 2001 in which 87% of sales came from the U.S., and 13% came from Canada and Latin America, principally the effect of the additional sales of household products in fiscal 2002.

        In Europe, current year sales were up $4.2 million, or 12% over sales in fiscal 2001. Lubricant sales increased by $4.7 million, or 14%, offset by $0.5 million decrease in hand cleaner sales. Increased lubricant sales are due to strong sales in Germany, Spain, Italy, the Middle East and in countries in which the Company sells through local distributors, where sales increased 21%, 20%, 47%, 38% and 8% respectively. The growth in Germany, Spain and Italy is a result of expanded distribution in all trade channels. The principal continental European countries where the Company sells through a direct sales force, Spain, Italy, France and Germany, together accounted for 35% of the region's sales for the

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current year, up from 33% last year. In the long term, these countries are expected to be significant contributors to the region's growth.

        In the Asia/Pacific region, total sales were down 1% over last year. Asia had a 3% decrease in sales, down to $9.6 million from $9.9 million in the prior year period, resulting from the effect of counterfeit products. Australia sales for the year were up 8% over fiscal 2001, with increases in sales of all brands, WD-40, 3-IN-ONE, and Solvol. Sales of the lubricants increased 6%, while Solvol increased by 14%. The Company expects trading conditions to remain difficult in the Asia/Pacific region, with modest growth in the coming fiscal year.

        Gross profit was $108.6 million, or 50.1% of sales in the 2002 fiscal year, compared to $84.2 million, or 51.4% of sales in the 2001 fiscal year. The gross margin decrease of 1.3% is primarily due to the effect of promotional costs and the mix of products sold. The overall impact of promotional costs on gross margin was 4.5% in the current period compared to 3.0% in the prior year, a change of 1.5%. Changes in product mix resulted in a 0.4% increase in gross margin. The write down of Lava towel inventory in the U.K. resulted in a 0.2% decrease in gross margin. As noted above, promotional costs in the current year had a greater impact than in the prior year due to marketing costs associated with the household products. The timing of certain promotional activities may continue to cause significant fluctuations in gross margin from period to period, similar to those fluctuations noted here. While the Company expects that its fiscal 2003 gross profit percentage will fluctuate in response to the timing of promotional activity, it anticipates only minimal changes in margin percentage due to the mix and costs of products sold.

        A breakdown of gross profit and gross profit percentage by segment by year follows (in thousands):

        Selling, general, & administrative expenses ("SG&A") for fiscal 2002 increased to $50.7 million from $36.7 million in 2001. The increase in SG&A is primarily due to increases in direct selling and freight costs associated with the additional sales generated from the Global Household Brands and Heartland acquisitions. Additionally, general and administrative costs increased as a result of the acquisitions, in order to support the integration of the businesses. Increased incentive costs contributed to the increase as well, as strong business results for the 2002 fiscal year resulted in higher payouts compared to fiscal 2001. As a percentage of sales, SG&A increased to 23.4% for the year, up 1% from 22.4% last year. The increase as a percentage of sales relates to the increased effect of promotional costs on sales in the current year as discussed above. Before promotional costs are considered, SG&A is consistent year to year, at 21.3% in 2002 compared to 21.0% in 2001.

        Advertising and sales promotion expense decreased to $15.2 million for the current year from $15.4 million last year. Advertising and sales promotion as a percentage of sales decreased to 7.0%, down from 9.4% in the prior year. Advertising and sales promotion expense as a percentage of sales may fluctuate period to period based upon the type of marketing activities employed by the Company, as the cost of certain activities are required to be recorded as reductions to sales, and others remain in advertising and sales promotion expense.

        Amortization expense was $0.3 million for the 2002 fiscal year, down from $3.9 million in the prior year. Current year amortization expense represents the amortization of a non-compete agreement over

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its five-year useful life. The decrease in amortization from fiscal 2001 is related to the Company's adoption of Statement of Financial Accounting Standards ("SFAS") No. 142 issued by the Financial Accounting Standards Board ("FASB"), which governs the amortization of acquisition-related goodwill and intangibles. As a result, beginning with the first quarter of fiscal 2002, the Company is no longer amortizing goodwill and trade names that have been determined to have indefinite lives. With the additional goodwill and other intangibles from the Global Household Brands and Heartland acquisitions, the Company would have incurred amortization costs related to its goodwill and other intangible assets of $7.1 million for fiscal year 2002, had it not been for the new accounting standard.

        Income from operations was $42.4 million, or 19.5% of sales for the year, compared to $28.1 million, or 17.2% of sales last year, an increase of 50.8%. The increase in both income from operations, and income from operations as a percentage of sales, was due to the items discussed above, namely, increased sales as a result of the Global Household Brands and Heartland acquisitions, consistency in the lubricant and hand cleaner business, along with the discontinuation of goodwill amortization.

        Interest expense, net was $5.8 million, and $2.6 million during the years ended August 31, 2002 and 2001, respectively. The change in interest expense, net is due to the interest expense incurred as a result of the borrowings associated with the Global Household Brands and Heartland acquisitions.

        Other income, net was $0.3 million during the current year, compared to $0.1 million in the prior year. The increase in other income was primarily due to the effect of foreign exchange transactions, which produced losses of $24,000 in the current year compared to losses of $143,000 in the prior year. The majority of the foreign exchange transactions are generated in Europe, which records transactions in British pounds but makes sales denominated in Euros and U.S. dollars as well as the British pound. Miscellaneous other income was $292,000 compared to $279,000 in fiscal 2002 and 2001, respectively.

        The provision for income taxes was 31.14% of taxable income for fiscal 2002, decreased from 34% in the prior year. This reflects an overall decrease in the tax rate to 32.5%, along with a one time benefit of $0.5 million associated with the resolution of certain tax items. The decline in tax rate is due to continued tax savings from changes due to the shift in worldwide taxable income and the utilization of federal tax credits resulting from increased research and development activities.

        Net income, before extraordinary item and cumulative effect of accounting change, was $25.4 million, or $1.57 per share on a fully diluted basis in fiscal 2002, versus $16.9 million, or $1.08 per share in fiscal 2001. The Company completed a new debt financing during the first quarter of fiscal year 2002, which resulted in an extraordinary charge of $692,000 net of tax, or $0.04 a share. The prior year first quarter was affected by a cumulative effect of accounting change of $980,000 net of tax, or $0.06 per share, related to the change in the Company's revenue recognition policy. Net income for fiscal year 2002, after extraordinary item and cumulative effect of accounting change, was $24.7 million, or $1.53 per share compared to $15.9 million, or $1.02 per share. Had the Company adopted FAS 142 beginning with the fiscal year 2001, the comparison of net income year to year would be $24.7 million, or $1.53 per share for fiscal 2002, versus $18.3 million, or $1.18 per share in fiscal 2001.

        Year ended August 31, 2001 compared with the year ended August 31, 2000

        During fiscal year 2001, the Company had sales of products within three primary categories: lubricants, hand cleaners and household products. Lubricants include the WD-40 and 3-IN-ONE brands, and hand cleaners include the Lava and Solvol brands. The household products category represent Carpet Fresh, 2000 Flushes, and X-14. Lubricant sales for the year were $132.1 million, down 3% over the prior year. Hand cleaner sales were $9.6 million, down by 8%. Sales of the Global Household brands (2000 Flushes, X-14, and Carpet Fresh) acquired in April, 2001 contributed four months of sales in fiscal 2001 amounting to $22.1 million.

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        The reported results reflect the adoption of EITF Issue 01-09: "Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor's Products." The application of this guidance has no effect on net income, but reclassifies certain marketing and promotional expenses from operating expenses to a reduction in sales. The related marketing and promotional expenses that are now being recorded as reductions in sales include, coupons, consideration and allowances given to retailers for space in their stores (slotting fees), consideration and allowances given to obtain favorable display positions in the retailer's stores, co-operative advertising and other promotional activity.

        This reclassification reduced both net sales and advertising and sales promotion expense during the year ended August 31, 2001 by $10.8 million and by $6.2 million during fiscal 2000. The increase in promotional costs requiring reclassification in fiscal 2001 is primarily due to the marketing efforts associated with the household product line. A larger portion of the marketing tactics to support the household products business requires reclassification. Fiscal year 2001 included four months of household product sales subsequent to the acquisition of Global Household Brands in April 2001. Thus, the impact is greater in fiscal year 2001. The effect on sales for the year is as follows (in thousands):

        In the Americas region, sales increased by 17.2% from $99.2 million in fiscal 2000 to $116.2 million in fiscal 2001. The increase in sales is primarily due to Global Household Brands sales in the U.S., which were $22.1 million for the year, offset by decreases in lubricants and hand cleaner sales of $2.3 million and $2.7 million, respectively.

        The decrease in lubricant sales in the Americas is primarily a result of the decrease in WD-40 sales of $2.8 million, or 3%, slightly offset by $0.6 million, or 15% increase in 3-IN-ONE sales. The decrease in WD-40 sales is a result of a shift in promotional emphasis. The movement away from discount pricing and value promotions was replaced with promotions aimed at attaining higher profit margins. Lubricant sales in the Latin America region increased 2% as a result of the development of the market in Mexico, along with strong sales in Argentina, Puerto Rico, Chile, and Brazil, compared to fiscal 2000. Canadian lubricants decreased 10% due to a loss in promotional momentum suffered in the beginning of fiscal 2001, due to the delay in the adoption of a price increase by several Canadian customers.

        Sales of heavy-duty hand cleaners for the Americas decreased to $7.8 million, down from $10.5 million in the fiscal 2000. The decrease in the Americas hand cleaner sales primarily reflect the comparison to a one-time, non-recurring promotional sale during fiscal 2000.

        In the region, 87% of the sales in 2001 came from the U.S., and 13% from Canada and Latin America. This reflects a change in sales from 2000 when 85% of the sales came from the U.S., and 15% from Canada and Latin America.

        Within the European region, sales grew by 3.3% to $34.6 million in fiscal 2001. Sales in local currencies were considerably better year-to-year, still posting gains despite the weakness of the Euro legacy currencies and the British pound against the dollar. The rise in the region's sales for fiscal 2001 is due to increases of 5% in the UK, 17% in France, 25% in Spain and 88% in Italy, partially offset by decreases in sales of 7% in Germany, 17% in Africa, and 32% in the Middle East. Sales from the U.K.,

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which is a mature and well-established market for the Company's products, accounted for 33% of the region's sales in 2001, slightly increased from 32.3% in 2000. The principal European countries where the Company sells through a direct sales force—France, Germany, Spain and Italy—together accounted for 33% of the region's sales in 2001, up from 31% in 2000.

        In the Asia/Pacific region, sales declined by 6.5% from 2000 to 2001. Of the sales in the region, 30% were from Australia in 2001, up from 17% in 2000. During 2001, sales in the Asia/Pacific region declined due to the Asian economic and political uncertainty.

        Gross profit was $84.2 million, or 51.4% of sales in fiscal 2001, $77.1 million, or 52.6% in 2000. The gross margin decrease of 1.2% is primarily due to the effect of promotional costs and the mix of products and customers. The overall impact of promotional costs on gross margin was 3.0% in 2001 compared to 1.9% in the prior year, a change of 1.1%. Changes in product and customer mix, and increases in raw material costs resulted in a 0.1% decrease in gross margin. As noted above, promotional costs in 2001 had greater impact compared to 2000 due to marketing costs associated with household products. In addition, due to the consolidation of companies in the retailing industry, increasing portions of the Company's sales are made to fewer, but larger, customers with greater purchasing power, negatively impacting selling prices and margins. Further, in 2001 the Company began to experience increases in the cost of certain raw materials as a result of the worldwide increase in oil prices.

        A breakdown of gross profit and gross profit percentage by segment by year follows (in thousands):

        Selling, general, & administrative expenses were $36.7 million in fiscal 2001, or 22.4% of sales compared to $34.1 million in fiscal 2000, or 23.2% of sales. The increase in SG&A expenses in 2001 is due primarily to the addition of overhead related to the Global Household Brands acquisition, as well as continued investment in employee related expenses, supply chain improvements, and information systems required to support future growth. In addition, fiscal year 2001 also had increased freight and warehousing costs associated with Lava.

        Advertising and sales promotion expense was $15.4 million, or 9.4% of sales in 2001, and $9.0 million, or 6.1% of sales in 2000. The large increase in promotion expense is due to higher advertising spending for the household products category, as well as the introduction of the Lava brand to the European market.

        Amortization expense was $4.0 million for fiscal 2001, up $1.6 million from $2.4 million in 2000. The increase is due to the amortization of goodwill and intangibles attributable to the purchase of the Global Household Brands of X-14, 2000 Flushes, and Carpet Fresh in April 2001. Amortization expense also includes amortization of intangibles attributable to the purchase of the 3-IN-ONE and Lava brands.

        Income from operations was $28.1 million or 17.2% of sales in 2001, $31.6 million, or 21.6% of sales in 2000. The decline in income from operations as a percentage of sales from 2000 to 2001 was due to the items discussed above, namely the higher advertising and promotion and amortization expenses, related to the recently acquired brands.

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        Interest expense, net was $2.6 million and $0.7 million during the years ended August 31, 2001 and 2000, respectively. The increase in interest expense in fiscal 2001 compared to the prior year is due to the acquisition of Global Household Brands in the third quarter of fiscal 2001. As a result of this acquisition, the Company used cash on hand resulting in less cash invested while borrowing funds and incurring higher interest costs.

        Other income, net was $0.1 million in fiscal 2001 and $0.2 million in fiscal 2000. The decrease in other income was primarily due to the effect of foreign exchange transactions, which produced net losses of $143,000 in fiscal 2001, compared to $23,000 in fiscal 2000. The majority of the foreign exchange transactions are generated in Europe, which records transactions in British pounds but made sales denominated in Euro legacy currencies and U.S. dollars as well as the British pound. Miscellaneous other income was $279,000 compared to $190,000 in fiscal 2001 and 2000, respectively.

        The income tax rate remained consistent at 34% from fiscal 2000 to 2001.

        Net income, before cumulative effect of accounting change, was $16.9 million, or $1.08 per share on a fully diluted basis in fiscal year 2001, versus $20.6 million, or $1.33 per share in fiscal 2000. Fiscal 2001 was affected by a cumulative effect of accounting change of $980,000 net of tax, or $0.06 per share, related to the change in the Company's revenue recognition policy. Net income for fiscal 2001, after the cumulative effect of accounting change, was $15.9 million, or $1.02 per share compared to $20.6 million, or $1.33 per share in fiscal 2000. Had the Company adopted FAS 142 beginning with the 2000 fiscal year, the comparison of net income year to year would be $18.4 million, or $1.18 per share for fiscal 2001, versus $20.1 million, or $1.43 per share in fiscal 2000.

LIQUIDITY AND CAPITAL RESOURCES

        On April 30, 2001, the Company completed its acquisition of the business, brand trademarks, patents and other tangible and intangible assets known as Global Household Brands through the acquisition, as of April 27, 2001, of the entire capital stock of HPD Holdings Corp. a Delaware corporation, and its wholly owned subsidiary, HPD Laboratories, Inc., a Delaware corporation.

        Cash for the acquisition was obtained through a senior credit facility in the amount of $85 million arranged by Union Bank of California, N.A. Proceeds from the financing were also used to repay an existing credit facility with Union Bank in the amount of approximately $18 million. The financing consisted of two term loans and a revolving loan, in the amounts of $30 million, $15 million and $40 million, respectively.

        On October 18, 2001, the Company refinanced its credit facility with Prudential Capital and Union Bank of California, N.A. The new credit facility consists of a $75 million 7.28% fixed-rate term loan, which matures in 2011, and a $15 million variable rate revolving line of credit, which matures in 2004. The new arrangement requires interest only payments for the first three years on the term loan, with seven principal payments of approximately $10.7 million due annually, beginning October 18, 2005, and for the six years thereafter.

        On May 31, 2002, the registrant completed the acquisition of the business, worldwide brand trademarks and other intangible assets of Heartland Corporation, through the acquisition of the entire capital stock of Heartland Corporation, a Kansas corporation.

        Cash for the acquisition was obtained through a $20 million term loan through Prudential Capital, funds from a revolving credit facility, and existing working capital. The term loan consists of fixed rate notes with a 3-year term, with aggregate principal payments of $10 million due at May 31, 2004 and May 31, 2005. The notes bear interest at an annualized rate of 6.29%. The revolving line of credit with Union Bank of California, N.A., has been increased to an availability of $20 million at a variable interest rate, and matures in 2004. A draw of $7 million from the line was used in the financing of the

15

transaction, along with $8 million of cash on hand. As of August 31, 2002, $19.7 million remained available under the line, with $299,000 outstanding.

        Under the $75 million and $20 million term loans and the revolving line of credit, the Company is required to maintain minimum consolidated net worth greater than the sum of $57 million plus 25% of consolidated net income for each fiscal quarter beginning with the first fiscal quarter of 2002, plus proceeds of all equity securities other than those issued under the employee stock option plan.

        A consolidated fixed charge coverage ratio greater than 1.20:1.00 on the last day of any fiscal quarter must be maintained. The Company is also limited to a maximum ratio of funded debt to earnings before interest, taxes, depreciation and amortization (EBITDA) 2.75 to 1.00 through August 31, 2002. The ratio continues to decrease by 0.25 for each additional six-month period, until March 1, 2003, when it is held constant at 2.25:1.00 for all periods thereafter.

        This new facility also limits the Company's ability, without prior approval from the Company's lenders, to incur additional unsecured indebtedness, sell, lease or transfer assets, place liens on properties, complete certain acquisitions mergers or consolidations, enter into guarantee obligations, enter into related party transactions, and make certain loan advances and investments.

        The events of default under the credit facility, including the $75 million and $20 million fixed rate term loans, and the $20 million variable rate revolving line of credit, include the following:

•

failure to pay principal or interest when due



•

failure to comply with covenants, representations or warranties, terms or conditions under the credit agreements



•

commencing any proceeding for bankruptcy, insolvency, reorganization, dissolution or liquidation



•

the sale, transfer, abandonment, forfeiture or disposal of the WD-40 trademark or any other trademark used in a material product line.

        Currently the Company is in compliance with all debt covenants as required by the credit facilities.

        Aside from the credit facility and the line of credit, the Company's primary source of funds is cash flow from operations, which is expected to provide sufficient funds to meet both short and long-term operating needs, as well as future dividends, which are determined on a quarterly basis.

        Since the businesses acquired through the acquisitions of HPD Holdings Corp. and Heartland Corporation have been integrated into the Company's current business structure, it is anticipated that cash flows from these operations will be adequate to support the incremental increase in short and long term operating needs.

        For the year ended August 31, 2002, cash and cash equivalents increased by $6.7 million, from $4.4 million at the end of fiscal 2001 to $11.1 million at August 31, 2002. Operating cash flow of $35.5 million and cash provided by financing activities of $5.7 million was offset by cash used in investing activities of $34.6 million.

        Current assets, excluding cash, increased by $5.1 million to $56.6 million at August 31, 2002, up from $51.5 million at August 31, 2001. Accounts receivable increased to $43.8 million, up $9.9 million from $33.8 million at August 31, 2001, as a result of higher sales during the fourth quarter of fiscal 2002 compared to fourth quarter of fiscal 2001, combined with the strengthening of the dollar. Inventory decreased to $6.1 million, down by $4.4 million from $10.5 million at fiscal 2001 end, primarily due to changes made in an effort to reduce inventory levels, in addition to the net $430,000 write down of Lava towel inventory in the UK during the second quarter. Product at contract packagers decreased by $1.9 million year over year, resulting from the changes in procurement of product by the packagers.

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        Current liabilities increased slightly by $0.5 million to $35.2 million at August 31, 2002 from $34.8 million at August 31, 2001. Accounts payable and other accrued liabilities increased by $6.2 million due to increases in product related payables directly related to the increased sales over prior year, along with an increase in payroll and related expenses due to higher incentive costs for 2002. Current portion of long-term debt decreased by $4.6 million due to the debt re-financing during the year, offset by an increase in the line of credit balance by $0.3 million. Income taxes payable decreased by $1.4 million, due to the effect of book to tax differences of goodwill amortization.

        At August 31, 2002 working capital increased to $32.4 million, up $11.4 million from $21.0 million at the end of fiscal 2001. The current ratio at August 31, 2002 is 1.9, increased from 1.6 at August 31, 2001.

        Net cash provided by operating activities for the year ended August 31, 2002 was $35.5 million. This amount consisted of $24.7 million from net income with an additional $4.5 million of adjustments for non-cash items, including depreciation and amortization, loss on early extinguishment of debt, and deferred tax expense, plus a $6.3 million change in the Company's operating assets and liabilities.

        Net cash used in investing activities for the 2002 fiscal year was $34.6 million. The Company spent $35 million in the Heartland acquisition, additional $0.4 million for acquisition costs associated with the Global Household Brands and Heartland acquisitions, net of $0.2 million of cash acquired, and $1.3 million for capital expenditures during the year. The Company received $626,000 in payments on the note receivable from VML Company, a related party contract manufacturer. Year to date capital expenditures were primarily in the area of computer hardware and software and vehicle replacements. In fiscal 2003, the Company expects to spend approximately $1.9 million for new capital assets, primarily for computer hardware and software in support of sales and operations, manufacturing molds and tools, and vehicle replacements in Europe.

        For fiscal year 2002, the cash provided by financing activities reflects the proceeds of the new $20 million term loan and $7 million draw on the line of credit to finance the Heartland acquisition, along with the proceeds from the exercise of stock options. These net proceeds were partially offset by dividend payments of $16.1 million, net repayment of $6.7 million on the line of credit, combined with net repayments made in conjunction with the debt restructuring completed in October 2001.

        On September 24, 2002, the Company's Board of Directors declared a cash dividend of $0.20 per share payable on October 31, 2002 to shareholders of record on October 11, 2002. During the third quarter of fiscal 2002 the dividend per share was reduced from a historical $0.27 down to $0.20 in conjunction with the additional debt taken on to complete the acquisition of Heartland. The Company's ability to pay dividends could be affected by future business performance, liquidity, capital needs, alternative investment opportunities, and loan covenants.

        The following schedule summarizes our contractual obligations and commitments to make future payments as of August 31, 2002:

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        The following summarizes other commercial commitments as of August 31, 2002:

•

The Company currently has available a $20 million variable rate revolving line of credit, maturing in 2004. There was $0.3 million outstanding under this line of credit as of August 31, 2002.



•

The Company has guaranteed $6 million of a VML line of credit, which expires in April 2003, of which $1,996,000 and $684,000 was outstanding at August 31, 2002 and 2001, respectively.

Relationships with Contract Manufacturers

        The Company has relationships with various suppliers who manufacture the Company's products ("Contract Manufacturers"). Although the Company does not have any definitive minimum purchase obligations included in the contract terms with Contract Manufacturers, supply needs are communicated and the Company is committed to purchase the products produced based on orders and projections provided to the Contract Manufacturers.

CRITICAL ACCOUNTING POLICIES

Allowance for Doubtful Accounts

        The preparation of financial statements requires our management to make estimates and assumptions relating to the collectibility of our accounts receivables. Management specifically analyzes historical bad debts, customer credit worthiness, current economic trends and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts.

Revenue Recognition

        WD-40 Company records revenue upon delivery of its products to customers. Management must make judgments and certain assumptions in the determination of when delivery occurs. Differences in judgments or estimates, such as the lengthening or shortening of our estimated delivery time used, could result in material differences in the amounts or timing of revenue recognition.

Accounting for Sales Incentives

        We record sales incentives as a reduction of sales in our income statement. Sales incentives include coupons, rebates, consideration and allowances given to retailers for space in their stores (slotting fees), consideration and allowances given to obtain favorable display positions in the retailer's stores and other promotional activity. We record these promotional activities in the period during which the related product ships, or when the expense is incurred.

        Estimated sales incentives are calculated and recorded at the time related sales are made and are based primarily on historical rates and consideration of recent promotional activities. We review our assumptions and adjust our reserves quarterly. Our financial statements could be materially impacted if the actual promotion rates fluctuate from the standard rate.

Accounting for Income Taxes

        We assess the need for a valuation allowance against deferred tax assets by considering future taxable income and ongoing prudent and feasible tax planning strategies. Should we determine that we would not be able to realize all or part of our deferred tax asset in the future, an adjustment to establish a valuation allowance against the deferred tax asset would be charged to income in the period such determination was made.

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Valuation of Long-lived, Intangible Assets and Goodwill

        We assess the impairment of identifiable intangibles, long-lived assets and related goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For goodwill and intangibles determined to have indefinite lives, impairment is reviewed at least annually under the guidance of SFAS No. 142, during our second fiscal quarter of each year. In addition, intangible assets with indefinite lives are evaluated quarterly to determine whether events and circumstances continue to support an indefinite useful life.

        Factors we consider important which could trigger an impairment, include the following:

•

Significant underperformance relative to historical or projected future operating results



•

Significant changes in the manner of our use of the acquired assets or the strategy for our overall business



•

Significant negative industry or economic trends



•

Significant decline in our stock price for a sustained period



•

Decreased market capitalization relative to net book value

        When there is indication that the carrying value of intangibles, long-lived assets and related goodwill and enterprise level goodwill may not be recoverable based upon the existence of one or more of the above indicators, an impairment loss is recognized if the carrying value amount of the asset is not recoverable and its carrying amount exceeds its fair value.

Inventory Valuation

        The Company monitors the value of inventory on a continual basis, and records any provisions necessary when events or circumstances indicate that the carrying value of inventories are greater than net realizable value. Management's judgments and estimates of future demand and market conditions are used to determine net realizable value. Actual market conditions may vary from those anticipated by management, and significant variations could effect the valuation of inventory.

TRANSACTIONS WITH RELATED PARTIES

        In conjunction with the Global Household Brands (HPD) acquisition, VML Company, L.L.C. ("VML"), a Delaware limited liability company, acquired ownership of certain inventory and manufacturing facility assets. VML serves as the Company's contract manufacturer for certain household products, and a warehouse distributor for other company products. The Company obtained a 30% membership interest in VML, and a note receivable from VML bearing interest at an annual rate of 8%, which had $0.5 million and $1.15 million outstanding at August 31, 2002 and 2001, respectively. In addition, beginning in 2004, the Company has the right to sell its 30% interest in VML to the 70% owner, and the 70% owner also has the right to purchase the Company's 30% interest at that time.

        The Company's investment in VML is accounted for using the equity method of accounting, and its share of VML earnings is recorded as a component of cost of products sold, as VML acts primarily as a contract manufacturer to the Company. For the year ended August 31, 2002, the Company recorded equity earnings of $0.7 million for its investment in VML.

        During the year ended August 31, 2002, the Company purchased approximately $39.1 million in product from VML, and had outstanding payables to VML at August 31, 2002 and 2001 of $4.7 million and $4.9 million, respectively. The Company has guaranteed $6 million of a VML line of credit that expires April 2003, of which $2 million and $0.7 million was outstanding at August 31, 2002 and 2001, respectively.

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ITEM 7A—Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Risk

        The Company is exposed to a variety of risks, including foreign currency fluctuations. In the normal course of its business, the Company employs established policies and procedures to manage its exposure to fluctuations in foreign currency values and changes in the market value of its investments.

        The Company's objective in managing its exposure to foreign currency exchange rate fluctuations is to reduce the impact of adverse fluctuations in earnings and cash flows associated with foreign currency exchange rate changes. Accordingly, the Company's U.K. subsidiary utilizes forward contracts to limit its exposure on converting cash balances maintained in Euros into British sterling. The Company regularly monitors its foreign exchange exposures to ensure the overall effectiveness of its foreign currency hedge positions. However, there can be no assurance the Company's foreign currency hedging activities will substantially offset the impact of fluctuations in currency exchange rates on its results of operations and financial position. While the Company engages in foreign currency hedging activity to reduce its risk, for accounting purposes, none of the foreign exchange contracts are designated as hedges.

Interest Rate Risk

        At August 31, 2001, the entire balance of the Company's outstanding borrowings of $79.8 million were variable interest rate loans and subject to fluctuations in interest rates. On October 18, 2001, the Company replaced $75 million of the variable rate loans with a new 10-year fixed rate loan, and obtained a new $20 million fixed rate term loan in May 2002. The change has significantly reduced the Company's exposure to interest rate risk, since only the $20 million revolving line of credit is subject to interest rate fluctuations. As of August 31, 2002, there was $0.3 million outstanding under the revolving line of credit with variable interest rate of 4.75%. The Company's interest rate risk on the outstanding line of credit balance is based upon the fluctuation in the LIBOR rate. Any significant increase in the LIBOR rate could have a material effect on interest expense incurred on any borrowings outstanding on the line of credit.

OTHER RISK FACTORS

Component Supply Risk

        The Company depends upon its suppliers for the supply of the primary components for its WD-40 brand and other products. Such components are subject to significant price volatility beyond the control or influence of the Company. Petroleum products, of which WD-40 and 3-IN-ONE are comprised, have had significant price volatility in the past, and may in the future. Rising oil prices can also impact the Company's cost of transporting its products. The Company has historically been successful in managing its component costs and product pricing to maintain historical gross margins. Additionally, the Company has generally found alternate sources of constituent chemicals for its products readily available. As component and raw material costs are the main contribution to cost of goods sold for all of the Company's products, any significant fluctuation in the costs of components could also have a material impact on the gross margins realized on the Company's products. Specifically, future can prices are exposed to fluctuation resulting from tariffs on steel; therefore any significant increase or decrease in the steel tariffs could have a significant impact on the costs of purchasing cans and the Company's cost of goods. In the event there is more significant price volatility or higher component costs generally, the Company may not be able to maintain, or may choose not to maintain, its gross margins by raising its product prices without affecting demand and unit sales. Increases in the prices for the components could have a material adverse effect on the Company's business, operating results, financial position and cash flows.

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Reliance on Supply Chain

        The Company's contract manufacturers rely upon two key vendors for the supply of empty cans used in the production of WD-40, Carpet Fresh, 3-IN-ONE, and Spot Shot products. Additionally, the Company relies on single manufacturers for the production of 2000 Flushes and X-14 automatic toilet bowl cleaners, X-14 liquid cleaners, Carpet Fresh powder and its Lava bar soap. The loss of any of these suppliers or manufacturers could temporarily disrupt or interrupt the production of the Company's products.

        The Company does not have direct control over the management or business of the primary contract manufacturers utilized in the manufacturing of the Company's products, except indirectly through terms as negotiated in contracts with those manufacturers. Should the terms of doing business with the Company's primary contract manufacturers change, the Company's cost structure may be impacted, which could have a direct impact on the Company's profit margins.

Competition

        The market for the Company's products is highly competitive and is expected to be increasingly competitive in the future. The Company's products compete both within their own product classes as well as within product distribution channels, competing with many other products for store placement and shelf space. Competition in international markets varies by country. The Company is aware of many competing products, some of which sell for lower prices; however, the Company relies on the awareness of its brands among consumers, the value offered by those brands as perceived by consumers, and its unique platform of multiple distribution channels as its primary competitive strategies.

        These considerations as well as increased competition generally could result in price reductions, reduced gross margins, and a loss of market share, any of which could have a material adverse effect on the Company's business, operating results, financial position and cash flows. In addition, many of the Company's competitors have significantly greater financial, technical, product development, marketing and other resources. There can be no assurance that the Company will be able to compete successfully against current and future competitors or that competitive pressures faced by the Company will not materially adversely affect its business, operating results, financial position and cash flows.

Political and Economic Risks

        The Company's domestic and international operations are exposed to the risk of political and economic uncertainties. Changes in political and economic conditions may affect product cost, availability, distribution, pricing, purchasing, and consumption patterns. While the Company seeks to manage its business in consideration of these risks, there can be no assurance that the Company will be successful in doing so.

        As the Company's sales extend to various countries around the globe, financial results in affected areas are exposed to a higher degree of risk. Examples of regions currently exposed to such types of risk include Argentina, the Middle East, and parts of Asia. There can be no assurance that the Company will be able to successfully mitigate against current and future risk associated with political and economic uncertainties, or that the risks faced by the Company will not materially adversely affect its business, operating results, financial position and cash flows. As sales grow within various regions around the world, the Company's exposure to this risk will increase.

Business Risks

        With the trend toward consolidation in the retail marketplace, the Company's customer base is shifting toward fewer, but larger, customers who purchase in larger volumes. The Spot Shot brand is

21

presently sold to two major customers, who each account for 10% or more of its sales. The loss of, or reduction in, orders from, any of the Company's most significant customers could have a material adverse effect on the Company's business and its financial results.

        Large customers also seek price reductions, added support, or promotional concessions. To support this trend, the Company has had to expand its use of customer and market-specific promotions and allowances, which has negatively impacted and will continue to impact, the Company's ability to maintain existing profit margins.

        In addition, the Company is subject to changes in customer purchasing patterns. These types of changes may result from changes in the manner in which customers purchase and manage inventory levels, or display and promote products within their stores. Other potential factors such as customer disputes regarding shipments, fees, merchandise condition or related matters may also impact operating results.

Operating Results and Net Earnings May Not Meet Expectations

        The Company cannot be sure that its operating results and net earnings will meet its expectations. If the Company's assumptions and estimates are incorrect or do not come to fruition, or if the Company does not achieve all of its key goals, then the Company's actual performance could vary materially from its expectations. The Company's operating results and net earnings may be influenced by a number of factors, including the following:

•

the introduction of new products and line extensions by the Company or its competitors;



•

the Company's ability to control its internal costs and the cost of raw materials;



•

the effectiveness of the Company's advertising, marketing and promotional programs;



•

changes in product pricing policies by the Company or its competitors;



•

changes of accounting policies;



•

the ability of the Company to achieve business plans, including volume growth and pricing plans, despite high levels of competitive activity;



•

the ability to maintain key customer relationships;



•

the ability of major customers and other creditors to meet their obligations as they come due;



•

the ability to successfully manage regulatory, tax and legal matters, including resolution of pending matters within current estimates;



•

the ability of the Company to attract and retain qualified personnel;



•

expenses for impairment of goodwill, trademarks and other intangible assets and equity investments in excess of projections;

Regulatory Risks

        The Company is subject to numerous environmental laws and regulations that impose various environmental controls on its business operations, including among other things, the discharge of pollutants into the air and water, the handling, use, treatment, storage and clean-up of solid and hazardous wastes, and the investigation and remediation of soil and groundwater affected by hazardous substances. Such laws and regulations may otherwise relate to various health and safety matters that impose burdens upon the Company's operations. These laws and regulations govern actions that may have adverse environmental effects and also require compliance with certain practices when handling and disposing of hazardous wastes. These laws and regulations also impose strict, retroactive and joint

22

and several liability for the costs of, and damages resulting from, cleaning up current sites, past spills, disposals and other releases of hazardous substances. The Company believes that its expenditures related to environmental matters have not had, and are not currently expected to have, a material adverse effect on its financial condition, results of operations or cash flows. However, the environmental laws under which the Company operates are complicated and often increasingly more stringent, and may be applied retroactively. Accordingly, there can be no assurance that the Company will not be required to make additional expenditures to remain in or to achieve compliance with environmental laws in the future or that any such additional expenditures will not have a material adverse effect on the Company's financial condition, results of operations or cash flows.

        Some of the Company's products have chemical compositions that are controlled by various state, federal and international laws and regulations. The Company complies with these laws and regulations and seeks to anticipate developments that could impact the Company's ability to continue to produce and market its products. The Company invests in research and development to maintain product formulations that comply with such laws and regulations. There can be no assurance that the Company will not be required to alter the chemical composition of one or more of the Company's products in such a way that will not have an adverse effect upon the product's efficacy or marketability. A delay or other inability of the Company to complete product research and development in response to any such regulatory requirements could have a material adverse effect on the Company's financial condition and results of operations.

        A focus on environmental regulations relating to VOCs (Volatile Organic Compounds) resulted in a change in the formulation of the WD-40 product in the majority of countries where the product is sold, whereby CO₂ was chosen as the aerosol propellant in 1996. As a result of this change, the cost of manufacturing WD-40 was increased and the Company increased its selling prices to partially offset the additional cost. In the event of future increases in product cost, the Company may not be in a position to raise selling prices, and therefore an increase in costs could have an adverse effect on the Company's profitability.

        VOC's are regulated by the California Air Resources Board ("CARB"). Current CARB regulations, if applied, could require a reformulation of the WD-40 product potentially resulting in a less efficient or less profitable product. The Company is seeking a variance from these requirements. In the event that a variance is not obtained, the reformulation could have a material impact on the Company's financial results.

        Generally, the manufacture, packaging, storage, distribution and labeling of the Company's products and the Company's business operations all must comply with extensive federal, state, and foreign laws and regulations. It is possible that the government will increase regulation of the transportation, storage or use of certain chemicals, to enhance homeland security or protect the environment and that such regulation could negatively impact raw material supply or costs.

Success of Acquisitions

        The Company has recently acquired the household product brands: Spot Shot, 2000 Flushes, X-14, and Carpet Fresh. The Company believes that its recent acquisitions provide opportunities for growth for all of the Company's brands as well as increased efficiencies and cost savings in management, operations and marketing. However, if the Company is not able to successfully integrate acquired products, the Company may not be able to maximize these opportunities. Rather, the failure to integrate these acquired businesses because of difficulties in the assimilation of operations and products, the diversion of management's attention from other business concerns, the loss of key employees or other factors, could materially adversely affect the Company's financial results.

        One of the Company's strategies is to increase its sales volumes, earnings and the markets it serves through acquisitions of other businesses in the United States and internationally. There can be no

23

assurance that the Company will be able to identify, acquire, or profitably manage additional companies or operations or that it will be able to successfully integrate future acquisitions into its operations. In addition, there can be no assurance that companies or operations acquired will be profitable at their inception or that they will achieve sales levels and profitability that justify the investments made.

Increased Use Of Debt Financing

        The Company has historically paid out a large part of its earnings to stockholders in the form of regular quarterly dividends. The recent acquisitions have been funded to a large extent by new debt. In order to service the new debt, the Company will be required to use its income from operations to make interest and principal payments required by the terms of the loan documents. In addition, the Company is required by covenants within the loan documents to maintain certain financial ratios and compliance with other financial terms. The Company believes that the increased income from operations derived from the acquired businesses will fully cover the new debt service requirements.

        In the past two years, the Company has announced reductions to its regular quarterly dividend from $0.32 to $0.27 per share in April 2001 and from $0.27 to $0.20 per share in July 2002 (reducing the annual dividend since April 2001 from $1.28 to $.80) in order to make more of its cash flow available for debt service requirements. However, if operating income is not sufficient to properly service the debt or otherwise allow the Company to maintain compliance with the terms of its loans, the Company could be required to seek additional financing through the issuance of more debt or the sale of equity securities, or the Company might be required to further reduce dividends. The increased debt service obligations could result in lower earnings for the Company if anticipated gross and net margins are not maintained for the Company's new and existing business lines.

Protection of Intellectual Property

        The Company relies on trademark, trade secret, patent and copyright laws to protect its intellectual property. The Company cannot be sure that these intellectual property rights will be successfully asserted in the future or that they will not be invalidated or circumvented. In addition, laws of some of the foreign countries in which the Company's products are or may be sold do not protect the Company's intellectual property rights to the same extent as the laws of the United States. The failure of the Company to protect its proprietary information and any successful intellectual property challenges or infringement proceedings against the Company could make it less competitive and could have a material adverse effect on the Company's business, operating results and financial condition.

Volatility in the Insurance Market

        The Company re-evaluates its insurance coverage annually. Trends in the insurance industry suggest that such contracts may be much more expensive, less protective or even unavailable. In such a case the Company may decide to self-insure more, thereby undertaking additional risks.

RECENT ACCOUNTING PRONOUNCEMENTS

        In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets and superseded SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions and amends APB No. 51, Consolidated Financial Statements. SFAS 144 is effective for the Company on September 1, 2002. The adoption will not have any material impact on the Company's consolidated financial statements.

24

        In May 2002, the FASB issued SFAS No. 145, Rescission of SFAS Nos. 4, 44, and 64, Amendment of SFAS No. 13, and Technical Corrections. Among other things, SFAS 145 rescinds various pronouncements regarding early extinguishment of debt and allows extraordinary accounting treatment for early extinguishment only when the provisions of Accounting Principles Board Opinion No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transaction, are met. SFAS 145 provisions regarding early extinguishment of debt will be effective for the Company September 1, 2002, the beginning of fiscal year ended 2003. The adoption will require the loss on early extinguishment of debt recorded during the year ended August 31, 2002, be reclassified from an extraordinary item, and reported in income before extraordinary items.

        In July 2002, the FASB issued Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities ("SFAS 146"). The standard requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Examples of costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing, or other exit or disposal activity. Previous accounting guidance was provided by Emerging Issue Task Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS 146 replaces Issue No. 94-3. SFAS 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. SFAS 146 is not expected to have any material effect on the Company's financial statements.

FORWARD LOOKING STATEMENTS

        The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. This report contains forward-looking statements, which reflect the Company's current views with respect to future events and financial performance.

        These forward-looking statements are subject to certain risks and uncertainties. The words "aim," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that indicate future events and trends identify forward-looking statements.

        Actual future results and trends may differ materially from historical results or those anticipated depending upon factors including, but not limited to, the near term growth expectations for heavy-duty hand cleaners and household products in the Americas, the impact of customer mix and raw material costs on gross margins, the impact of promotions on sales, the rate of sales growth in the Asia/Pacific region and direct European countries, the expected gross profit margin, the expected amount of future advertising and promotional expenses, the effect of future income tax provisions, the amount of future capital expenditures, foreign exchange rates and fluctuations in those rates, the effects of, and changes in, worldwide economic conditions, and legal proceedings.

        Readers also should be aware that while the Company does, from time to time, communicate with securities analysts, it is against the Company's policy to disclose to them any material non-public information or other confidential commercial information. Accordingly, shareholders should not assume that the Company agrees with any statement or report issued by any analyst irrespective of the content of the statement or report. Further, the Company has a policy against confirming financial forecasts or projections issued by others. Accordingly, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of the Company.

25

ITEM 8—Financial Statements and Supplementary Data

        The Company's consolidated financial statements at August 31, 2002 and 2001 and for each of the three years in the period ended August 31, 2002, and the Report of PricewaterhouseCoopers LLP, Independent Accountants, are included in this Annual Report on Form 10-K on pages i through xxvi.

26

        QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

        The following table sets forth certain unaudited quarterly consolidated financial information for each of the two years in the period ending August 31, 2002:

        As discussed in Note 1 to the consolidated financial statements, during the fourth quarter of the fiscal year 2001, the company changed its revenue recognition policy pursuant to Securities and Exchange Commission Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements." As a result, the company changed its revenue recognition policy effective September 1, 2000 to recognize revenue upon delivery rather than shipment of products. The cumulative effect of this accounting change was $980,000 net of tax, and is reflected in the first quarter ended November 30, 2000 net income above. Other than the cumulative effect adjustment, the impact of this accounting change was not material to previously reported quarterly results.

        As discussed in Note 5 to the consolidated financial statements, effective March 1, 2002, the Company adopted the consensus reached by the Emerging Issues Task Force ("EITF") of the FASB in Issue 01-09 ("EITF 01-09") entitled, Accounting for Consideration Given by a Vendor to a Customer or Reseller of the Vendor's Products, which requires the reclassification of certain costs formerly included in advertising and sales promotion expense to a reduction in sales, thereby reducing both net sales and advertising and sales promotion expenses by equal and offsetting amounts. Promotional payments formerly included in advertising and sales promotion that are now being recorded as reductions in sales include: coupons, consideration and allowances given to retailers for space in their stores (slotting fees), consideration and allowances given to obtain favorable display positions in the retailer's stores, co-operative advertising and other promotional activity. Quarterly results reported reflect this application, and accordingly, all prior period financial statements have been reclassified to comply with

27

this guidance. The following reconciles quarterly data reported above to amounts previously reported prior to the application of EITF 01-09:

        RECLASSIFICATION FOR APPLICATION OF EITF 01-09

        As discussed in Note 8 to the consolidated financial statements, during the first quarter of fiscal 2002, the Company replaced term loans A and B with proceeds from a new $75 million long-term obligation, and modified the terms of its revolving line of credit. In conjunction with this refinancing, the Company recorded an extraordinary loss of $692,000, as a result of the replacement of term loans A and B. The loss consists of the write off of debt acquisition costs capitalized under the original financing, net of a tax benefit of $340,000.

ITEM 9—Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

        Not applicable.

PART III

ITEM 10—Directors and Executive Officers of the Registrant

        The information required by this item is set forth under the captions "Security Ownership of Directors and Executive Officers," "Nominees for Election as Directors," "Compensation, Committees and Meetings of the Board of Directors," "Compensation Committee Interlocks and Insider Participation," "Audit Committee" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's Proxy Statement to be filed with the Securities and Exchange Commission in connection with the 2002 Annual Meeting of Shareholders, December 17, 2002 (the "Proxy Statement"), which information is incorporated by reference herein.

28

ITEM 11—Executive Compensation

        The information required by this item is incorporated by reference to the Proxy Statement under the headings "Executive Compensation," "Compensation Committee Report on Executive Compensation" and "Stock Performance Graph."

ITEM 12—Security Ownership of Certain Beneficial Owners and Management

        Certain information required by this item is incorporated by reference to the Proxy Statement under the headings "Principal Security Holders" and "Security Ownership of Directors and Executive Officers."

        Securities authorized for issuance under equity compensation plans as of August 31, 2002 is as follows:

¹

Shares available pursuant to the Company's Non-Employee Director Restricted Stock Plan

Non-Employee Director Restricted Stock Plan

        Shares are issued to non-employee directors of the Company pursuant to the Amended and Restated WD-40 Company 1999 Non-Employee Director Restricted Stock Plan (the "Plan") in lieu of cash compensation of up to $15,000 according to an election to be made by the director as of the September meeting of the Board of Directors. A director who holds shares of the Company having a value of at least $50,000 may elect to receive his or her entire annual director's fee in cash. Otherwise, directors must elect to receive restricted stock in lieu of cash in the amount of $5,000, $10,000 or $15,000. The restricted shares are to be issued in accordance with a director's election as soon as practicable after the first day of March. The number of shares to be issued is equal to the amount of compensation to be paid in shares divided by 90% of the closing price of the Company's shares as of the first business day of March.

        Restricted shares issued to directors do not become vested for resale for a period of five years except in the event of death or retirement from the Board following the director's 65th birthday. Unless a director has reached age 65, the shares are subject to forfeiture if, during the five year vesting period, the director resigns or otherwise fails to continue to serve on the Board of Directors for any reason other than as a result of death or disability.

ITEM 13—Certain Relationships and Related Transactions

        Not Applicable.

29

ITEM 14—Controls and Procedures

        (a)  Evaluation of disclosure controls and procedures. The term "disclosure controls and procedures" is defined in Rules 13a-14(c) and 15d-14(c) of the Securities and Exchange Act of 1934 ("Exchange Act"). These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. Our chief executive officer and our chief financial officer have evaluated the effectiveness of the Company's disclosure controls and procedures as of a date within 90 days before the filing of this yearly report (the "Evaluation Date"), and they have concluded that, as of the Evaluation Date, such controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in our reports filed under the Exchange Act. Although we believe our existing disclosure controls and procedures are adequate to enable us to comply with our disclosure obligations, as a result of such review, we are implementing changes, primarily to formalize and document the procedures already in place. We also established a disclosure committee, which consists of certain members of the Company's senior management.

        (b)  Changes in internal controls. We maintain a system of internal accounting controls that are designed to provide reasonable assurance that our books and records accurately reflect our transactions and that our established policies and procedures are carefully followed. For the year ended August 31, 2002, there were no significant changes to our internal controls or in other factors that could significantly affect our internal controls, and we have not identified any significant deficiencies or material weaknesses in our internal controls.

PART IV

ITEM 15—Exhibits, Financial Statements, Financial Statement Schedule, and Reports on Form 8-K

30

31

32

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

33

34

CERTIFICATIONS

I, Garry O. Ridge, certify that:

1.

I have reviewed this annual report on Form 10-K of the WD-40 Company;



2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;



3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this annual report;



4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;



b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the Evaluation Date); and



c)

presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;




5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the registrant's board of directors (or persons performing the equivalent functions):



a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and




6.

The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated: November 7, 2002

35

I, Michael J. Irwin, certify that:

1.

I have reviewed this annual report on Form 10-K of the WD-40 Company;



2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;



3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this annual report;



4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;



b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the Evaluation Date); and



c)

presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;




5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the registrant's board of directors (or persons performing the equivalent functions):



a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and




6.

The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated: November 7, 2002

36

Report of Independent Accountants

To the Board of Directors and
Shareholders of WD-40 Company

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) on page 30 present fairly, in all material respects, the financial position of WD-40 Company and its subsidiaries at August 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended August 31, 2002 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) on page 30 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Diego, California
October 31, 2002

i

WD-40 Company

Consolidated Balance Sheets

August 31, 2002 and 2001

The accompanying notes are an integral part of these consolidated financial statements.

ii

WD-40 Company

Consolidated Statements of Income

Years Ended August 31, 2002, 2001 and 2000

The accompanying notes are an integral part of these consolidated financial statements.

iii

WD-40 Company
Consolidated Statements of Shareholders' Equity and Comprehensive Income
For the Years Ended August 31, 2002, 2001 and 2000