WDFC Presentation (1)

2016 CFA Institute Research Challenge: San Diego

San Diego State University

Viktoriya DeminaOlga Grigorchuk

Paul LambRyan NeumannHongliao Xiong

Executive Summary – “Expensive Slow-Grower”

Summary Business Overview Financial Analysis Valuation Risks Recommendation

Recommendation: Sell

2/19/2016 Closing Price: $107.79

12-Month Price Target: $87

Downside Potential: 19%

2/16/2

011

4/6/20

11

5/25/2

011

7/13/2

011

8/31/2

011

10/19

/2011

12/7/

2011

1/25/2

012

3/14/2

012

5/2/20

12

6/20/2

012

8/8/20

12

9/26/2

012

11/14

/2012

1/2/20

13

2/20/2

013

4/10/2

013

5/29/2

013

7/17/2

013

9/4/20

13

10/23

/2013

12/11

/2013

1/29/2

014

3/19/2

014

5/7/20

14

6/25/2

014

8/13/2

014

10/1/

2014

11/19

/2014

1/7/20

15

2/25/2

015

4/15/2

015

6/3/20

15

7/22/2

015

9/9/20

15

10/28

/2015

12/16

/2015

2/3/20

1630

40

50

60

70

80

90

100

110

Pric

e / S

hare

($)

Target Price : $87

Current Price : 107

2

• Global Marketing Company

• Two product segmentsoMaintenance Products oHomecare Products

The Ame

ri-cas50%

EMEA36%

Asia-

Pa-cific14%

Business Overview

Summary Business Overview Financial Analysis Valuation Risks Recommendation3

Competitive Positioning


• Americas SegmentoStrong competitive positioningoMature market

• EMEA and Asia-PacificoGrowth opportunities/challenges

Buyer Power

Supplier Power

New EntrantsSubstitute Products

Competitive Rivalry

012345

0 = No Threat1 = Minimal Threat 2 = Low Threat3 = Moderate Threat4 = Significant Threat5 = High Threat

4


2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E0

50

100

150

200

250

300

350

400

450

170 177 181 181 187 192 196 199 201 203

125 117 136 151 137 130 139 149 158 16641 49

5251 54 57

6472 80 88

36 35 40 44 45 50 53 56 58 61

Americas EMEA Asia-Pacific Net income

Mill

ions

of U

S D

olla

rs

Financial Analysis – Revenue Projections

5


2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E -

10.00

20.00

30.00

40.00

50.00

60.00

70.00

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Dividends + Repurchases Net Income Payout ratio

Mill

ions

of $

Mod

ified

Pay

out %

of N

.I.

Financial Analysis – Modified Payout Ratio

6


Financial Analysis – ROE

• Inflated ROE• Cash trapped overseasThree Step DuPont Analysis

2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020ENet Profit Margin 10.83% 10.35% 10.80% 11.42% 11.85% 13.21% 13.25% 13.29% 13.36% 13.46%

Asset TO 1.18 1.18 1.18 1.14 1.10 1.08 1.07 1.05 1.03 1.00

Financial Lev 1.43 1.50 1.71 1.92 2.10 2.27 2.32 2.16 2.04 1.93ROE 18.32% 18.35% 21.82% 25.07% 27.38% 32.60% 32.88% 30.23% 27.98% 26.06%

7


Valuation – Summary

$87

DCF$73.93

DCF$86.17

DDM$100.7

7

8


WACC AnalysisRisk Free Rate 2.00%S&P 500 Adjusted Beta 0.815Market Risk Premium 7.50%Cost Of Equity 8.11%Interest Expense $ 1,205,000 Debt Outstanding $ 108,000,000 Pre Tax Cost of Debt 1.12%Marginal Tax Rate 0.298After Tax Cost of Debt 0.79%Equity Financing 92.17%Debt Financing 7.83%WACC 7.54%

Valuation – WACC Analysis

9


Terminal Value Methodology Gordon Growth

Terminal Ratio

(+) Sum of PVs (Fair Value) 1133.67 1311.40(-) Net Debt 108.00 108.00(+) Excess Cash 48.60 48.60(=) Equity Value 1074.27 1252.00(/) Diluted Shares Outstanding 14.53 14.53(=) Share Price $73.93 $86.17Feb 19, 2016 Price $107.79Estimated Upside -31.4% -20.1%

Assumptions

• 2.5% Terminal Growth Rate

• 19.4x Terminal Multiple

• 2020 EBITDA = $90M

Valuation – Discounted Cash Flows

10


Valuation – DCF Sensitivity

Sensitivity Analysis - Terminal EBITDA Multiple EV/EBITDA 13.4 15.4 17.4 19.4 21.4 23.4 25.4

Discount Rate

(WACC)

4.5% $

71.33 $

81.56 $

91.79

$102.02 $112.25

$122.48

$132.71

5.5% $

68.41 $

78.21 $

88.01 $

97.81

$107.61 $117.41

$127.22

6.5% $

65.63 $

75.03 $

84.42 $

93.82

$103.21 $112.60

$122.00

7.5% $

63.00 $

72.01 $

81.01 $

90.02 $

99.03

$108.04 $117.04

8.5% $

60.49 $

69.13 $

77.77 $

86.41 $

95.05

$103.69 $112.33

9.5% $ 58.11 $

66.40 $

74.69 $

82.98 $

91.27 $

99.56

$107.85

10.5% $

55.84 $

63.80 $

71.76 $

79.72 $

87.68 $

95.64

$103.59

Sensitivity Analysis - Perpetuity Growth Terminal Growth Rate 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25%

Discount Rate

(WACC)

4.5% $142.00

$155.30

$171.56

$191.89

$218.03

$252.88

$301.66

5.5% $103.08

$109.82 $117.60

$126.68

$137.40

$150.27

$166.00

6.5% $ 80.57

$ 84.57

$ 89.05

$ 94.08

$ 99.79

$106.31 $113.84

7.5% $ 65.90

$ 68.51

$ 71.38

$ 74.54

$ 78.03

$ 81.90

$ 86.24

8.5% $ 55.58

$ 57.41

$ 59.38

$ 61.52

$ 63.85

$ 66.38

$ 69.16

9.5% $ 47.93

$ 49.27

$ 50.70

$ 52.23

$ 53.87

$ 55.64

$ 57.55

10.5% $ 42.04

$ 43.05

$ 44.13

$ 45.27

$ 46.48

$ 47.77

$ 49.16

11


Valuation – Modified Dividend Discount Model

2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E

Dividends + Repurchases 59.63 58.07 50.48 62.96 51.98 60.05 31.73 33.40 35.00 36.58

Net Income 36.43 35.49 39.81 43.75 44.81 50.09 52.88 55.67 58.34 60.97

Payout ratio 164% 164% 127% 144% 116% 120% 60% 60% 60% 60%

Payout/share 3.51 3.62 3.23 4.16 3.55 4.23 2.23 2.35 2.46 3.35

2016E 2017E 2018E 2019E 2020E Terminal

Dividends + Repurchases 4.23 2.23 2.35 2.46 3.35 121.95

PV 3.93 1.93 1.89 93.02

Sum (Value/Share) 100.77

12


Strengthening Dollar

Counterfeit Reproductions and

CompetitionIncrease in Oil Prices

Government Regulations and

Political InstabilityAttracting/Retaining Quality Employees

Like

lihoo

d

Low

Med

ium

Hig

h

Low Medium HighImpact

Investment Risks

13


Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-1675

80

85

90

95

100

105

Date

Inde

x (M

ar 1

973=

100)

Trade Weighted US Dollar Index: Major Currencies

Investment Risks – Stronger US Dollar

14

Source: Nasdaq.com

Investment Risks – Price of Oil

Summary Business Overview Financial Analysis Valuation Risks Recommendation15

• Unsustainable Payout Ratios

• Low Growth

• Intrinsic Values < Market Value


Recommendation


2/19/2016 Closing Price: $107.79



16

“You only need two things in life: Duct Tape and WD-40. If it moves and shouldn’t, use Duct

Tape, if it doesn’t move and should, use WD-40.”

Thank you for your attention

17

1. Cover Page2. Executive Summary3. Business Overview4. Competitive Positioning5. Revenue Projections6. Modified Payout Ratio7. ROE8. Valuation Summary9. WACC Analysis10. DCF Analysis11. DCF Sensitivity12. Modified DDM13. Investment Risks14. Exchange Rates15. Crude Prices

Appendices – Index16. Recommendation17. Questions18. Appendix Index19. Income Statement20. Common Size I.S.21. Revenue by Geography22. Revenue by Product23. Balance Sheet24. Balance Sheet POS25. Cash Flows26. Cash Flows POS27. Schedules28. Beta Calculation29. Treasury Method30. WACC Sensitivity

18

31. DCF Calculations32. NWC Calculations33. DCF Sensitivity (perp)34. DCF Sensitivity (EVx)35. Historical Multiples36. Multiples Comps37. Comparables38. DDM39. Demand Drivers40. Suppliers41. Counterfeiting42. Selected Ratios43. Ratios44. Ratios (cont.)45. ROE Reversal

46. Solvency47. Strategies48. Brands49. Brands50. Shareholders51. Can Costs52. Performance

Appendices – Income Statement($ In Millions )As of August 31, 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020ENet sales 336.41 342.78 368.55 383.00 378.15 379.18 399.05 418.97 436.74 453.05 Sales Growth 1.9% 7.5% 3.9% -1.3% 0.3% 5.2% 5.0% 4.2% 3.7%Cost of products sold 168.30 174.30 179.39 184.14 177.97 170.63 179.57 188.54 196.53 203.87Gross profit (loss) 168.11 168.48 189.16 198.85 200.18 208.55 219.48 230.43 240.20 249.18 Margin 50.0% 49.2% 51.3% 51.9% 52.9% 55.0% 55.0% 55.0% 55.0% 55.0%Selling, general & administrative expense 87.31 88.92 104.38 108.58 108.87 108.07 113.73 119.41 124.47 129.12 % of Sales 25.95% 25.94% 28.32% 28.35% 28.79% 28.5% 28.5% 28.5% 28.5% 28.5%Advertising & sales promotion expense 25.13 25.70 24.81 23.92 22.88 24.65 25.94 27.23 28.39 29.45 % of Sales 7.47% 7.50% 6.73% 6.25% 6.05% 6.5% 6.5% 6.5% 6.5% 6.5%Amortization of definite-lived intangible assets 1.54 2.13 2.26 2.62 3.04 3.03 3.02 3.02 2.76 2.26 % of Sales 0.46% 0.62% 0.61% 0.68% 0.80% 0.80% 0.76% 0.72% 0.63% 0.50%Impairment of definite-lived intangible assets 1.08Total operating expenses 113.98 116.75 132.53 135.12 134.79 135.74 142.69 149.66 155.62 160.83Income (loss) from operations 54.13 51.73 56.64 63.74 65.39 72.81 76.79 80.77 84.59 88.35 Operating Margin 16.1% 15.1% 15.4% 16.6% 17.3% 19.2% 19.2% 19.3% 19.4% 19.5%Interest income 0.23 0.26 0.51 0.60 0.58 0.56 0.56 0.56 0.56 0.56Interest expense 1.08 0.73 0.69 1.00 1.21 1.81 1.81 1.81 1.81 1.81 Interest Expense Increase 0.60 0.30 0.00 0.00 0.00Other income (expense), net 0.25 -0.35 0.42 -0.37 -1.66Income (loss) before income taxes - US 37.33 36.67 36.30 41.54 38.04Income (loss) before income taxes - foreign 16.20 14.25 20.57 21.42 25.07Income (loss) before income taxes 53.53 50.91 56.87 62.96 63.11 71.56 75.55 79.53 83.34 87.11 Pretax Margin 15.91% 14.85% 15.43% 16.44% 16.69% 18.87% 18.93% 18.98% 19.08% 19.23%Income Tax Rate 31.9% 30.3% 30.0% 30.5% 29.0% 30.0% 30.0% 30.0% 30.0% 30.0%Provision for income taxes 17.10 15.43 17.05 19.21 18.30 21.47 22.66 23.86 25.00 26.13Net income (loss) 36.43 35.49 39.81 43.75 44.81 50.09 52.88 55.67 58.34 60.97 Income Growth -2.60% 12.20% 9.88% 2.43% 11.80% 5.57% 5.27% 4.79% 4.51% Income Margin 10.83% 10.35% 10.80% 11.42% 11.85% 13.21% 13.25% 13.29% 13.36% 13.46%Less: N.I. (loss) allocated to participating securities - - - - 0.27N.I. (loss) available to common shareholders - - - - 44.54Weighted average shares outstanding - basic 16.80 15.91 15.52 15.07 14.58 14.14 14.14 14.14 14.14 14.14Weighted average shares outstanding - diluted 16.98 16.05 15.62 15.15 14.65 14.21 14.21 14.21 14.21 14.21Net earnings (loss) per share-basic 2.168243766 2.22 2.55 2.89 3.05 3.54 3.74 3.94 4.13 4.31Net earnings (loss) per share-diluted 2.14 2.2 2.54 2.87 3.04 3.53 3.72 3.92 4.11 4.29 EPS Growth 2.80% 15.45% 12.99% 5.92% 15.97% 5.56% 5.27% 4.79% 4.51%Dividends per share 1.08 1.14 1.22 1.33 1.48 1.77 2.24 2.36 2.48 2.59 Dividends/Share Growth 5.56% 7.02% 9.02% 11.28% 16.30% 26.72% 5.27% 4.79% 4.51%Total number of employees 334 347 369 395 433

Historical Income Statement Projected Income Statement

See Rev Breakdown (next slide)

Model to 55% Gross Margin

% of Sales

Q1 Conference Call

10K Report

Source: Company Data & Team Estimates

19

Appendices – Common Size I.S.

20

($ In Millions ) Historical Income Statement Common Size Projected Income Statement Common SizeAs of August 31, 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020ENet sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%Cost of products sold 50.03% 50.85% 48.67% 48.08% 47.06% 45.00% 45.00% 45.00% 45.00% 45.00%Gross profit (loss) 49.97% 49.15% 51.33% 51.92% 52.94% 55.00% 55.00% 55.00% 55.00% 55.00%Selling, general & administrative expense 25.95% 25.94% 28.32% 28.35% 28.79% 28.50% 28.50% 28.50% 28.50% 28.50%Advertising & sales promotion expense 7.47% 7.50% 6.73% 6.25% 6.05% 6.50% 6.50% 6.50% 6.50% 6.50%Amortization of definite-lived intangible assets 0.46% 0.62% 0.61% 0.68% 0.80% 0.80% 0.77% 0.74% 0.66% 0.52%Impairment of definite-lived intangible assets 0.00% 0.00% 0.29% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Total operating expenses 33.88% 34.06% 35.96% 35.28% 35.64% 35.80% 35.77% 35.74% 35.66% 35.52%Income (loss) from operations 16.09% 15.09% 15.37% 16.64% 17.29% 19.20% 19.23% 19.26% 19.34% 19.48%Interest income 0.07% 0.08% 0.14% 0.16% 0.15% 0.15% 0.14% 0.14% 0.13% 0.13%Interest expense 0.32% 0.21% 0.19% 0.26% 0.32% 0.48% 0.54% 0.52% 0.50% 0.49%Other income (expense), net 0.07% -0.10% 0.11% -0.10% -0.44% 0.00% 0.00% 0.00% 0.00% 0.00%Income (loss) before income taxes - US 11.10% 10.70% 9.85% 10.85% 10.06% 0.00% 0.00% 0.00% 0.00% 0.00%Income (loss) before income taxes - foreign 4.82% 4.16% 5.58% 5.59% 6.63% 0.00% 0.00% 0.00% 0.00% 0.00%Income (loss) before income taxes 15.91% 14.85% 15.43% 16.44% 16.69% 18.86% 18.83% 18.88% 18.98% 19.12%Provision for income taxes 5.08% 4.50% 4.63% 5.02% 4.84% 5.66% 5.65% 5.66% 5.69% 5.74%Net income (loss) 10.83% 10.35% 10.80% 11.42% 11.85% 13.21% 13.18% 13.21% 13.28% 13.38%

Appendices – Revenue Breakdown

Historical % of Sales by Geographic Segment 2011 2012 2013 2014 2015 AVG 2016E 2017E 2018E 2019E 2020EAmericas 50.51% 51.75% 48.98% 47.21% 49.54% 49.60% 50.63% 49.07% 47.44% 45.97% 44.75%EMEA 37.28% 34.10% 36.91% 39.53% 36.18% 36.80% 34.27% 34.85% 35.51% 36.11% 36.55%Asia-Pacific 12.22% 14.15% 14.11% 13.26% 14.28% 13.60% 15.10% 16.07% 17.14% 18.25% 19.35%Total 100.00% 100.00% 100.00% 100.00% 100.00% 0.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Historical Sales Growth by Geographic Segment 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020EAmericas (6.00%) 4.41% 1.75% 0.17% 3.60% 2.50% 2.00% 1.50% 1.00% 1.00%EMEA 14.00% (6.78%) 16.34% 11.32% (9.64%) (5.00%) 7.00% 7.00% 6.00% 5.00%Asia-Pacific 31.00% 18.00% 7.22% (2.31%) 6.30% 6.00% 12.00% 12.00% 11.00% 10.00%Total 5.00% 1.90% 7.50% 3.93% (1.28%) 0.29% 5.24% 4.99% 4.24% 3.74%

Historical Sales by Geographic Segment 2011 2012 2013 2014 2015 CAGR 2016E 2017E 2018E 2019E 2020E 16-20 CAGRAmericas 169.9 177.4 180.5 180.8 187.3 2.47% 191.98 195.82 198.76 200.75 202.75 1.37%EMEA 125.4 116.9 136 151.4 136.8 2.20% 129.96 139.06 148.79 157.72 165.60 6.25%Asia-Pacific 41.1 48.5 52 50.8 54 7.06% 57.24 64.11 71.80 79.70 87.67 11.25%Total 336.4 342.8 368.5 383 378.1 2.96% 379.18 399.05 418.97 436.74 453.05 4.55%

49.54%36.18%

14.28%

50.63%34.27%

15.10%

Americas EMEA Asia-Pacific

44.75%

36.55%

19.35%

2015 2016E 2020E

21

Appendices – Revenue Breakdown

Date 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020ENet sales - MUP 278.76 286.48 320.88 337.83 333.31 337.07 359.47 381.77 401.77 420.18 Y/Y % Change 8.00% 2.77% 12.01% 5.28% -1.34% 1.13% 6.64% 6.20% 5.24% 4.58%Net sales - Homecare 57.65 56.30 47.67 45.17 44.84 42.15 39.62 37.25 35.01 32.91 Y/Y % Change -9.00% -2.3% -15.3% -5.2% -0.7% -6.0% -6.0% -6.0% -6.0% -6.0%Total Sales 336.41 342.78 368.55 383.00 378.15 379.23 399.09 419.01 436.78 453.09 Y/Y % Change 1.90% 7.52% 3.92% -1.27% 0.28% 5.24% 4.99% 4.24% 3.73%Cost of products sold 168.30 174.30 179.39 184.14 177.97 168.76 175.60 186.46 194.37 203.89Gross profit (loss) 168.11 168.48 189.16 198.85 200.18 210.47 223.49 232.55 242.41 249.20 Gross Margin 49.97% 49.15% 51.33% 51.92% 52.94% 55.50% 56.00% 55.50% 55.50% 55.00%

Historical & Project Sales by Product Segment

Historical % of Sales by Product Segment

2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E

Maintenance Products 82.88% 83.58% 87.06% 88.20% 88.15% 88.15% 88.89% 90.08% 91.12% 91.99%Homecare and Cleaning 17.12% 16.42% 12.94% 11.80% 11.85% 11.85% 11.11% 9.92% 8.88% 8.01%

Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

22

Appendices – Balance Sheet($ In Millions ) Historical Balance Sheet Projected Balance SheetAs of August 31, 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020ECurrent assets: Cash GR 54.04272646 56.874565 59.714028 62.24590279 64.57078726Cash and cash equivalents 56.39 69.72 53.43 57.80 53.90 73.93 94.60 116.57 139.70 163.67Short-term investments 0.53 1.03 37.52 45.05 48.60 48.60 48.60 48.60 48.60 48.60Cash and Short-tern investments 56.93 70.75 90.95 102.85 102.50 122.53 143.21 165.17 188.31 212.27Accounts Receivable, net 58.32 55.49 56.88 63.62 58.75 60.67 (1) 63.85 67.04 69.88 72.49 Inventories 17.60 29.80 32.43 34.99 32.05 30.33 (2) 31.92 33.52 34.94 36.24 Current deferred tax assets, net 4.85 5.55 5.67 5.86 5.82 5.82 5.82 5.82 5.82 5.82 Other current assets 5.45 4.53 6.21 8.34 6.13 6.13 6.13 6.13 6.13 6.13 Total current assets 143.16 166.12 192.14 215.65 205.25 225.73 251.17 277.91 305.31 333.19Property and equipment, net 8.48 9.06 8.54 9.70 11.38 14.44(3) 17.33 20.03 22.58 24.97Goodwill 95.45 95.32 95.24 95.50 96.41 96.41 96.41 96.41 96.41 96.41 Other intangible assets, net 29.93 27.69 24.29 23.67 22.96 19.93 (4) 16.91 13.89 11.13 8.87 Other assets 2.75 2.69 2.86 3.15 3.26 3.26 3.26 3.26 3.26 3.26 Total assets 279.78 300.87 323.06 347.68 339.26 359.77 385.08 411.50 438.69 466.71Current liabilities: Accounts payable 19.37 $ 21.24 $ 19.69 $ 18.03 $ 17.13 $ 18.96 (5) $ 19.95 $ 20.95 $ 21.84 $ 22.65 Accrued liabilities 15.26 16.49 16.56 18.38 15.20 17.65 (6) 18.55 19.46 20.23 20.91 Accrued payroll and related expenses 7.47 5.90 17.24 15.97 13.36 12.97 (7) 13.65 14.33 14.94 15.49 Income taxes payable 1.41 0.81 1.15 1.53 2.29 2.29 2.29 2.29 2.29 2.29 Total current liabilities 43.52 44.45 54.65 53.91 47.97 51.86 54.44 57.02 59.29 61.34 Revolving credit facility 10.72 45.00 63.00 98.00 108.00 133.00 (8) 133.00 133.00 133.00 133.00 Long-term deferred tax liabilities, net 21.81 24.01 24.01 24.25 23.15 23.15 23.15 23.15 23.15 23.15 Other long-term liabilities 2.51 1.96 1.90 2.10 2.28 2.28 2.28 2.28 2.28 2.28 Total liabilities $ 78.55 $ 115.41 $ 143.56 $ 178.27 $ 181.40 $ 210.29 $ 212.86 $ 215.45 $ 217.72 $ 219.77 Shareholders' equity: Common stock 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 Additional paid-in capital 117.02 126.21 133.24 136.21 141.65 143.23 (9) 144.81 146.38 147.96 149.54 Retained earnings 176.01 193.27 214.03 237.60 260.68 285.73 306.88 329.15 352.49 376.88 AOCI -0.36 (2.73) (5.04) 1.10 (8.72) (8.72) (8.72) (8.72) (8.72) (8.72)Treasury Stock -91.47 (131.31) (162.74) (205.52) (235.77) (270.77) (270.77) (270.77) (270.77) (270.77)Total shareholders' equity 201.23 $ 185.46 $ 179.51 $ 169.42 $ 157.86 $ 149.48 $ 172.21 $ 196.06 $ 220.97 $ 246.94 Total liabilities and shareholders' equity $ 279.78 $ 300.87 $ 323.06 $ 347.68 $ 339.26 $ 359.77 $ 385.08 $ 411.50 $ 438.69 $ 466.71

23

Appendices – Balance Sheet % of Sales($ In Millions ) Historical Balance Sheet Common Size Projected Balance Sheet Common SizeAs of August 31, 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020ECurrent assets: Cash and cash equivalents 20.16% 23.17% 16.54% 16.63% 15.89% 20.55% 24.57% 28.33% 31.85% 35.07%Short-term investments 0.19% 0.34% 11.61% 12.96% 14.33% 13.51% 12.62% 11.81% 11.08% 10.41%Accounts Receivable, net 20.85% 18.44% 17.61% 18.30% 17.32% 16.86% 16.58% 16.29% 15.93% 15.53%Inventories 6.29% 9.90% 10.04% 10.06% 9.45% 8.43% 8.29% 8.15% 7.96% 7.77%Current deferred tax assets, net 6.29% 1.84% 1.76% 1.68% 1.72% 1.62% 1.51% 1.42% 1.33% 1.25%Other current assets 1.73% 1.50% 1.92% 2.40% 1.81% 1.70% 1.59% 1.49% 1.40% 1.31%Total current assets 51.17% 55.21% 59.48% 62.03% 60.50% 62.74% 65.23% 67.54% 69.60% 71.39%Property and equipment, net 3.03% 3.01% 2.64% 2.79% 3.35% 4.01% 4.50% 4.87% 5.15% 5.35%Goodwill 34.12% 31.68% 29.48% 27.47% 28.42% 26.80% 25.04% 23.43% 21.98% 20.66%Other intangible assets, net 10.70% 9.20% 7.52% 6.81% 6.77% 5.54% 4.39% 3.38% 2.54% 1.90%Other assets 0.98% 0.89% 0.88% 0.91% 0.96% 0.91% 0.85% 0.79% 0.74% 0.70%Total assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%Current liabilities: Accounts payable 6.92% 7.06% 6.10% 5.19% 5.05% 5.27% 5.18% 5.09% 4.98% 4.85%Accrued liabilities 5.45% 5.48% 5.13% 5.29% 4.48% 4.90% 4.82% 4.73% 4.61% 4.48%Accrued payroll and related expenses 2.67% 1.96% 5.34% 4.59% 3.94% 3.60% 3.54% 3.48% 3.40% 3.32%Income taxes payable 0.51% 0.27% 0.35% 0.44% 0.67% 0.64% 0.59% 0.56% 0.52% 0.49%Total current liabilities 15.55% 14.77% 16.91% 15.51% 14.14% 14.41% 14.14% 13.86% 13.52% 13.14%Revolving credit facility 3.83% 14.96% 19.50% 28.19% 31.83% 36.97% 34.54% 32.32% 30.32% 28.50%Long-term deferred tax liabilities, net 7.80% 7.98% 7.43% 6.98% 6.82% 6.43% 6.01% 5.62% 5.28% 4.96%Other long-term liabilities 0.90% 0.65% 0.59% 0.60% 0.67% 0.63% 0.59% 0.55% 0.52% 0.49%Total liabilities 28.08% 38.36% 44.44% 51.27% 53.47% 58.45% 55.28% 52.36% 49.63% 47.09%Shareholders' equity: Common stock 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.00% 0.00% 0.00%Additional paid-in capital 41.83% 41.95% 41.24% 39.18% 41.75% 39.81% 37.60% 35.57% 33.73% 32.04%Retained earnings 62.91% 64.24% 66.25% 68.34% 76.84% 79.42% 79.69% 79.99% 80.35% 80.75%AOCI -0.13% -0.91% -1.56% 0.32% -2.57% -2.42% -2.27% -2.12% -1.99% -1.87%Treasury Stock -32.69% -43.64% -50.37% -59.11% -69.50% -75.26% -70.32% -65.80% -61.72% -58.02%Total shareholders' equity 71.92% 61.64% 55.56% 48.73% 46.53% 41.55% 44.72% 47.64% 50.37% 52.91%Total liabilities and shareholders' equity

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

24

Appendices – Cash Flow Statements

25

($ In Millions ) Historical Statement of Cash Flows Projected Statement of Cash FlowsAs of August 31, 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020EOperating activities: Net income 36.43 35.49 39.81 43.75 44.81 50.09 52.88 55.67 58.34 60.97Adjustments to net income: Depreciation and amortization 4.39 4.87 5.36 5.86 6.46 6.22 6.63 6.81 6.72 6.36Impairment of long-lived assets - - 1.08 - - - - - - - Net (gains) losses on sales of PPE 0.15 0.07 0.00 (0.04) (0.07) - - - - - Deferred income taxes 2.83 0.37 (1.00) (0.74) (1.33) - - - - - Excess tax benefits from settlements of stock-based equity awards (1.20) (0.67) (0.85) (0.83) (1.21) (1.21) (1.21) (1.21) (1.21) (1.21)Stock-based compensation 3.03 2.77 2.45 2.26 2.78 2.78 2.78 2.78 2.78 2.78Unrealized foreign currency exchange losses (gains), net 0.47 2.11 1.11 (0.07) 2.09 - - - - - Provision for bad debts 0.16 0.16 0.51 0.22 0.30 - - - - - Changes in assets and liabilities: - - - - - Trade accounts receivable (9.78) 0.23 (3.80) (5.82) (0.31) (1.92) (3.18) (3.19) (2.84) (2.61)Inventories (2.65) (12.35) (2.83) (2.24) 2.04 1.72 (1.59) (1.59) (1.42) (1.30)Other assets 2.80 (0.06) (2.00) (2.21) 1.73 0.00 0.00 0.00 0.00 0.00Accounts payable and accrued liabilities 0.66 3.21 (0.89) (0.56) (2.46) 4.28 1.90 1.90 1.66 1.49Accrued payroll and related expenses (7.80) (2.79) 10.36 (3.05) (2.72) (0.39) 0.68 0.68 0.61 0.56Income taxes payable 2.66 1.41 2.28 2.00 2.74 - - - - - Other long-term liabilities (2.15) (0.55) (0.04) 0.19 0.23 - - - - - Net cash provided by operating activities 30.01 34.25 51.57 38.73 55.06 61.58 58.90 61.87 64.64 67.05Investing activities: Purchases of property and equipment (2.88) (3.77) (2.85) (4.09) (5.78) -6.50 -6.50 -6.50 -6.50 -6.50Proceeds from sales of property and equipment 0.17 1.17 0.16 0.33 0.33 0.00 0.00 0.00 0.00 0.00Purchase of intangible assets - - - (1.80) - 0.00 0.00 0.00 0.00 0.00Acquisition of business - - - - (4.12) 0.00 0.00 0.00 0.00 0.00Purchases of short-term investments (0.52) (1.03) (38.84) (7.71) (10.58) 0.00 0.00 0.00 0.00 0.00Maturities of short-term investments - 0.51 2.00 2.76 3.19 0.00 0.00 0.00 0.00 0.00Net cash used in investing activities (3.22) (3.11) (39.53) (10.50) (16.95) (6.50) (6.50) (6.50) (6.50) (6.50)Financing activities: TS purchases and Dividends Paid (59.63) (58.07) (50.48) (62.96) (51.98) (60.05) (31.73) (33.40) (35.00) (36.58)Treasury stock purchases (41) (39.84) (31.44) (42.77) (30.26) -35.00 0.00 0.00 0.00 0.00Dividends paid (18.23) (18.23) (19.04) (20.18) (21.72) -25.05 -31.73 -33.40 -35.00 -36.58Proceeds from issuance of common stock (5.00) 7.03 4.79 1.28 2.11 0.00 0.00 0.00 0.00 0.00Excess tax benefits from settlements of stock-based equity awards (18.23) 0.67 0.85 0.83 1.21 0.00 0.00 0.00 0.00 0.00Proceeds from revolving credit facility 20.22 114.55 18.00 35.00 10.00 25.00 - - - - Repayments of revolving credit facility (41.40) (69.55) - - - 0.00 0.00 0.00 0.00 0.00Repayments of long-term debt 1.20 (10.72) - - - 0.00 0.00 0.00 0.00 0.00Net cash used in financing activities (48.93) (16.08) (26.84) (25.84) (38.66) (35.05) (31.73) (33.40) (35.00) (36.58)Effect of exchange rate changes on cash and cash equivalents 2.61 (1.73) (1.48) 1.98 (3.36) 0.00 0.00 0.00 0.00 0.00

Net (decrease) increase in cash and cash equivalents (19.54) 13.33 (16.29) 4.37 (3.91) 20.04 20.67 21.96 23.14 23.97Cash and cash equivalents at beginning of period 75.93 56.39 69.72 53.43 57.80 53.90 73.93 94.60 116.57 139.70Cash and cash equivalents at end of period 56.39 69.72 53.43 57.80 53.90 73.93 94.60 116.57 139.70 163.67

Appendices – Cash Flow % of Sales

26

($ In Millions ) Historical Statement of Cash Flows Common Size Projected Statement of Cash Flows Common SizeAs of August 31, 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020EOperating activities: Net income 10.83% 10.35% 10.80% 11.42% 11.85% 13.21% 13.25% 13.29% 13.36% 13.46%Adjustments to net income: Depreciation and amortization 1.30% 1.42% 1.45% 1.53% 1.71% 1.64% 1.66% 1.63% 1.54% 1.40%Impairment of long-lived assets 0.00% 0.00% 0.29% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Net (gains) losses on sales and disposals of property and equipment 0.05% 0.02% 0.00% -0.01% -0.02% 0.00% 0.00% 0.00% 0.00% 0.00%Deferred income taxes 0.84% 0.11% -0.27% -0.19% -0.35% 0.00% 0.00% 0.00% 0.00% 0.00%Excess tax benefits from settlements of stock-based equity awards -0.36% -0.20% -0.23% -0.22% -0.32% -0.32% -0.30% -0.29% -0.28% -0.27%Stock-based compensation 0.90% 0.81% 0.67% 0.59% 0.74% 0.73% 0.70% 0.66% 0.64% 0.61%Unrealized foreign currency exchange losses (gains), net 0.14% 0.62% 0.30% -0.02% 0.55% 0.00% 0.00% 0.00% 0.00% 0.00%Provision for bad debts 0.05% 0.05% 0.14% 0.06% 0.08% 0.00% 0.00% 0.00% 0.00% 0.00%Changes in assets and liabilities: Trade accounts receivable -2.91% 0.07% -1.03% -1.52% -0.08% -0.51% -0.80% -0.76% -0.65% -0.58%Inventories -0.79% -3.60% -0.77% -0.58% 0.54% 0.45% -0.40% -0.38% -0.33% -0.29%Other assets 0.83% -0.02% -0.54% -0.58% 0.46% 0.00% 0.00% 0.00% 0.00% 0.00%Accounts payable and accrued liabilities 0.20% 0.94% -0.24% -0.15% -0.65% 1.13% 0.48% 0.45% 0.38% 0.33%Accrued payroll and related expenses -2.32% -0.82% 2.81% -0.80% -0.72% -0.10% 0.17% 0.16% 0.14% 0.12%Income taxes payable 0.79% 0.41% 0.62% 0.52% 0.72% 0.00% 0.00% 0.00% 0.00% 0.00%Other long-term liabilities -0.64% -0.16% -0.01% 0.05% 0.06% 0.00% 0.00% 0.00% 0.00% 0.00%Net cash provided by operating activities 8.92% 9.99% 13.99% 10.11% 14.56% 16.24% 14.76% 14.77% 14.80% 14.80%Investing activities: Purchases of property and equipment -0.85% -1.10% -0.77% -1.07% -1.53% -1.71% -1.63% -1.55% -1.49% -1.43%Proceeds from sales of property and equipment 0.05% 0.34% 0.04% 0.09% 0.09% 0.00% 0.00% 0.00% 0.00% 0.00%Purchase of intangible assets 0.00% 0.00% 0.00% -0.47% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Acquisition of business 0.00% 0.00% 0.00% -1.09% 0.00% 0.00% 0.00% 0.00% 0.00%Purchases of short-term investments -0.15% -0.30% -10.54% -2.01% -2.80% 0.00% 0.00% 0.00% 0.00% 0.00%Maturities of short-term investments 0.00% 0.15% 0.54% 0.72% 0.84% 0.00% 0.00% 0.00% 0.00% 0.00%Net cash used in investing activities -0.96% -0.91% -10.73% -2.74% -4.48% -1.71% -1.63% -1.55% -1.49% -1.43%Financing activities: Treasury stock purchases -12.31% -11.62% -8.53% -11.17% -8.00% -9.23% 0.00% 0.00% 0.00% 0.00%Dividends paid -5.42% -5.32% -5.17% -5.27% -5.74% -6.61% -7.95% -7.97% -8.02% -8.08%Proceeds from issuance of common stock -1.49% 2.05% 1.30% 0.34% 0.56% 0.00% 0.00% 0.00% 0.00% 0.00%Excess tax benefits from settlements of stock-based equity awards -5.42% 0.20% 0.23% 0.22% 0.32% 0.00% 0.00% 0.00% 0.00% 0.00%Proceeds from revolving credit facility 6.01% 33.42% 4.88% 9.14% 2.64% 6.59% 0.00% 0.00% 0.00% 0.00%Repayments of revolving credit facility -12.31% -20.29% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Repayments of long-term debt 0.36% -3.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Net cash used in financing activities -14.55% -4.69% -7.28% -6.75% -10.22% -9.24% -7.95% -7.97% -8.02% -8.08%Effect of exchange rate changes on cash and cash equivalents 0.78% -0.50% -0.40% 0.52% -0.89% 0.00% 0.00% 0.00% 0.00% 0.00%Net (decrease) increase in cash and cash equivalents -5.81% 3.89% -4.42% 1.14% -1.03% 5.28% 5.18% 5.24% 5.30% 5.29%Cash and cash equivalents at beginning of period 22.57% 16.45% 18.92% 13.95% 15.29% 14.21% 18.53% 22.58% 26.69% 30.84%Cash and cash equivalents at end of period 16.76% 20.34% 14.50% 15.09% 14.25% 19.50% 23.71% 27.82% 31.99% 36.13%Cash paid for: Interest 0.29% 0.19% 0.19% 0.24% 0.31% 0.00% 0.00% 0.00% 0.00% 0.00%Income taxes, net of tax refunds received 3.40% 3.86% 4.51% 4.74% 4.08% 0.00% 0.00% 0.00% 0.00% 0.00%

Appendices – SchedulesPPE Schedule 2016E 2017E 2018E 2019E 2020EBeginning, net 11.38 14.44 17.33 20.03 22.58 CAPEX 6.50 6.50 6.50 6.50 6.50 Depreciation (3.43) (3.61) (3.79) (3.96) (4.10)Ending 14.44 17.33 20.03 22.58 24.97 Amortization Schedule 2016E 2017E 2018E 2019E 2020EBeginning 22.96 19.93 16.91 13.89 11.13 Amortization (3.03) (3.02) (3.02) (2.76) (2.26)Ending 19.93 16.91 13.89 11.13 8.87 Dividend Payout Schedule 2016E 2017E 2018E 2019E 2020EWeighted average shares outstanding 14.14 14.14 14.14 14.14 14.14Dividend 25.05 31.73 33.40 35.00 36.58 60.05 52.88 55.67 58.34 60.97Dividend + TS 31.73 33.40 35.00 36.58

27

Appendices – Beta Calculation

28

Appendices – FDSO (Treasury Method)Share Price, 1-year Average $ 87.02

Stock Options Outstanding as of 08/31/15 62,620 Weighted-Average Exercise Price $ 34.97 Cash Proceeds $2,189,821 Shares Repurchased 25,165 Restricted Stock Units (RSU) Outstanding as of 08/31/15 136,895 Weighted-Average Grant Date Fair Value $ 47.19 Cash Proceeds $6,460,075 Shares Repurchased 74,237

Market Share Units (MSU) Outstanding as of 08/31/15 57,604 Weighted-Average Grant Date Fair Value $ 57.37 Cash Proceeds $3,304,741 Shares Repurchased 37,977 Deferred Performance Units (DPU) Outstanding as of 08/31/15 30,798 Weighted-Average Grant Date Fair Value $ 75.14 Cash Proceeds $2,314,162 Shares Repurchased 26,593

Basic Shares Outstanding as of 11/30/15 14,406,219Plus: New Shares from Exercise of Options, Rights and Warrants 287,917Less: Shares Repurchased 163,971Fully Diluted Shares Outstanding 14,530,165

29

Sensitivity Analysis - WACC Calculation Risk Free Rate 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%

Market Risk Premium

3.0% 2.8% 3.2% 3.7% 4.2% 4.6% 5.1% 5.5% 6.0%4.5% 3.9% 4.4% 4.8% 5.3% 5.7% 6.2% 6.7% 7.1%6.0% 5.0% 5.5% 6.0% 6.4% 6.9% 7.3% 7.8% 8.3%7.5% 6.2% 6.6% 7.1% 7.5% 8.0% 8.5% 8.9% 9.4%9.0% 7.3% 7.7% 8.2% 8.7% 9.1% 9.6% 10.0% 10.5%

10.5% 8.4% 8.9% 9.3% 9.8% 10.3% 10.7% 11.2% 11.6%12.0% 9.5% 10.0% 10.5% 10.9% 11.4% 11.8% 12.3% 12.8%

Appendices – WACC Sensitivity

WACC AnalysisRisk Free Rate 2.00%S&P 500 Adjusted Beta 0.815Market Risk Premium 7.50%Cost Of Equity 8.11%Interest Expense $ 1,205,000 Debt Outstanding $ 108,000,000 Pretax Cost of Debt 1.12%Marginal Tax Rate 0.298After Tax Cost of Debt 0.79%Equity Financing 92.17%Debt Financing 7.83%WACC 7.54%

Cost of Debt - preferred method Interest Expense $ 1,205,000 Debt Outstanding $ 108,000,000 Pretax Cost of Debt 1.12%Marginal Tax Rate 0.298After Tax Cost of Debt 0.78%

30

Cost of Debt Calculations Using Current Credit Agreement Terms

Debt USD LIBOR - 3mo* MarginLIBOR+Margin

Outstanding Balance

Commitment Fee**

Revolving Line of Credit 0.62110% 0.85% 1.47%

$108,000,000 0.13% Pretax Cost of Debt 1.52% Marginal Tax Rate 0.298 After Tax Cost of Debt 1.07% *Source: http://www.global-rates.com/ ** applied to the portion of the total credit facility commitment that has not been borrowed

Appendices – DCF CalculationsPeriod 0.5 1.5 2.5 3.5 4.5 5.5Year 2016E 2017E 2018E 2019E 2020E Terminal Value(+) Revenue 379.18 399.05 418.97 436.74 453.05(-) COGS 170.63 179.57 188.54 196.53 203.87 (-) Operating Costs 135.74 142.69 149.66 155.62 160.83(=) Operating Profit 51.11 53.91 56.70 59.38 62.02 62.021(-) Change in NWC -3.54 5.02 5.04 4.53 4.19 0(-) Investments in Fixed Capital -6.50 -6.50 -6.50 -6.50 -6.50 0(-) Depreciation 6.22 6.63 6.81 6.72 6.36 0(=) FCF 54.37 49.02 51.98 55.07 57.69 1261.58(^) Present Value 52.43 43.96 43.34 42.70 41.60 909.64

Terminal Value with Multiple2020E EBITDA 90.61(*)Exit Multiple 19.4(=)Terminal Value 1757.82Discounted Terminal Value 1267.44

Perpetuity TerminalX(+) Sum of PVs (Fair Value) 1133.67 1311.40(-) Net Debt 108.00 108.00(+) Excess Cash 48.60 48.60(=) Equity Value 1074.27 1252.00(/) Diluted Shares Outstanding 14.53 14.53(=) Share Price $73.93 $86.17Feb 19, 2016 Price $107.79Estimated Upside -31.4% -20.1%

31

Appendices – NWC Calculations

2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020ECash (Required) 56.39 69.72 53.43 57.80 53.90 54.04 56.87 59.71 62.25 64.57 Accounts Receivable, net 58.32 55.49 56.88 63.62 58.75 60.67 63.85 67.04 69.88 72.49 Inventories 17.60 29.80 32.43 34.99 32.05 30.33 31.92 33.52 34.94 36.24 Current deferred tax assets, net 4.85 5.55 5.67 5.86 5.82 5.82 5.82 5.82 5.82 5.82 Other current assets 5.45 4.53 6.21 8.34 6.13 6.13 6.13 6.13 6.13 6.13 Total current assets 142.62 165.08 154.63 170.60 156.65 157.00 164.60 172.22 179.01 185.25

Accounts payable 19.37 21.24 19.69 18.03 17.13 18.96 19.95 20.95 21.84 22.65 Accrued liabilities 15.26 16.49 16.56 18.38 15.20 17.65 18.55 19.46 20.23 20.91 Accrued payroll and related expenses 7.47 5.90 17.24 15.97 13.36 12.97 13.65 14.33 14.94 15.49 Income taxes payable 1.41 0.81 1.15 1.53 2.29 2.29 2.29 2.29 2.29 2.29 Total current liabilities 43.52 44.45 54.65 53.91 47.97 51.86 54.44 57.02 59.29 61.34

Net Working Capital (NWC) 99.11 120.64 99.98 116.69 108.68 105.14 110.16 115.20 119.72 123.91

Change in NWC 21.53 (20.66) 16.71 (8.02) (3.54) 5.02 5.04 4.53 4.19

32

Appendices – DCF SensitivitySensitivity Analysis - Perpetuity Growth

Terminal Growth Rate $73.93 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25%

Discount Rate (WACC)

4.5% $142.00 $155.30 $171.56 $191.89 $218.03 $252.88 $301.66 5.5% $103.08 $109.82 $117.60 $126.68 $137.40 $150.27 $166.00 6.5% $ 80.57 $ 84.57 $ 89.05 $ 94.08 $ 99.79 $106.31 $113.84 7.5% $ 65.90 $ 68.51 $ 71.38 $ 74.54 $ 78.03 $ 81.90 $ 86.24 8.5% $ 55.58 $ 57.41 $ 59.38 $ 61.52 $ 63.85 $ 66.38 $ 69.16 9.5% $ 47.93 $ 49.27 $ 50.70 $ 52.23 $ 53.87 $ 55.64 $ 57.55

10.5% $ 42.04 $ 43.05 $ 44.13 $ 45.27 $ 46.48 $ 47.77 $ 49.16

Estimated Upside Terminal Growth Rate 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25%


4.5% 31.7% 44.1% 59.2% 78.0% 102.3% 134.6% 179.9%5.5% -4.4% 1.9% 9.1% 17.5% 27.5% 39.4% 54.0%6.5% -25.3% -21.5% -17.4% -12.7% -7.4% -1.4% 5.6%7.5% -38.9% -36.4% -33.8% -30.8% -27.6% -24.0% -20.0%8.5% -48.4% -46.7% -44.9% -42.9% -40.8% -38.4% -35.8%9.5% -55.5% -54.3% -53.0% -51.5% -50.0% -48.4% -46.6%

10.5% -61.0% -60.1% -59.1% -58.0% -56.9% -55.7% -54.4% Implied EV/EBITDA

Terminal Growth Rate 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25%


4.5% 23.56 25.98 28.94 32.63 37.39 43.72 52.595.5% 17.28 18.56 20.03 21.76 23.79 26.23 29.226.5% 13.64 14.43 15.32 16.32 17.45 18.74 20.237.5% 11.27 11.81 12.40 13.05 13.77 14.57 15.478.5% 9.60 9.99 10.42 10.88 11.38 11.92 12.529.5% 8.36 8.66 8.98 9.32 9.69 10.09 10.52

10.5% 7.40 7.64 7.89 8.16 8.44 8.74 9.07 33

Appendices – DCF SensitivitySensitivity Analysis - Terminal EBITDA Multiple

EV/EBITDA $86.17 13.4 15.4 17.4 19.4 21.4 23.4 25.4


4.5% $ 71.33 $ 81.56 $ 91.79 $102.02 $112.25 $122.48 $132.71 5.5% $ 68.41 $ 78.21 $ 88.01 $ 97.81 $107.61 $117.41 $127.22 6.5% $ 65.63 $ 75.03 $ 84.42 $ 93.82 $103.21 $112.60 $122.00 7.5% $ 63.00 $ 72.01 $ 81.01 $ 90.02 $ 99.03 $108.04 $117.04 8.5% $ 60.49 $ 69.13 $ 77.77 $ 86.41 $ 95.05 $103.69 $112.33 9.5% $ 58.11 $ 66.40 $ 74.69 $ 82.98 $ 91.27 $ 99.56 $107.85

10.5% $ 55.84 $ 63.80 $ 71.76 $ 79.72 $ 87.68 $ 95.64 $103.59

Estimated Upside EV/EBITDA 13.4 15.4 17.4 19.4 21.4 23.4 25.4


4.5% -37.3% -27.8% -18.3% -8.8% 0.7% 10.2% 19.7%5.5% -40.0% -30.9% -21.8% -12.7% -3.6% 5.5% 14.6%6.5% -42.6% -33.8% -25.1% -16.4% -7.7% 1.0% 9.7%7.5% -45.0% -36.6% -28.3% -19.9% -11.6% -3.2% 5.1%8.5% -47.3% -39.3% -31.3% -23.3% -15.3% -7.2% 0.8%9.5% -49.5% -41.8% -34.1% -26.5% -18.8% -11.1% -3.4%

10.5% -51.6% -44.2% -36.9% -29.5% -22.1% -14.7% -7.3%

Implied Perpetuity Growth EV/EBITDA 13.4 15.4 17.4 19.4 21.4 23.4 25.4


4.5% 0.2% 0.7% 1.0% 1.3% 1.5% 1.7% 1.9%5.5% 1.2% 1.6% 2.0% 2.2% 2.5% 2.7% 2.9%6.5% 2.2% 2.6% 2.9% 3.2% 3.5% 3.7% 3.9%7.5% 3.1% 3.5% 3.9% 4.2% 4.4% 4.6% 4.8%8.5% 4.1% 4.5% 4.9% 5.2% 5.4% 5.6% 5.8%9.5% 5.0% 5.5% 5.8% 6.1% 6.4% 6.6% 6.8%

10.5% 6.0% 6.4% 6.8% 7.1% 7.4% 7.6% 7.8% 34

Appendices – Multiples History

2/28/2

006

7/25/2

006

12/19

/2006

5/15/2

007

10/9/

2007

3/4/20

08

7/29/2

008

12/23

/2008

5/19/2

009

10/13

/2009

3/9/20

10

8/3/20

10

12/28

/2010

5/24/2

011

10/18

/2011

3/13/2

012

8/7/20

12

1/1/20

13

5/28/2

013

10/22

/2013

3/18/2

014

8/12/2

014

1/6/20

15

6/2/20

15

10/27

/2015

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

P/E

EV/EBITDA

Mul

tiple

WDFC Historical Valuation Multiples

Source: Bloomberg Data35

Historical P/E Historical EV/EBITDA 2012 2013 2014 2015 2012 2013 2014 2015

WDFC US 22.2x 22.5x 23.9x 27.4x 13.1x 13.9x 14.5x 16.9xNEU US 14.3x 18.7x 21.6x 19.4x 9.6x 11.3x 13.1x 12.4x

CHMT US 18.5x 54.2x 5.0x 13.1x 8.2x 13.8x 2.7x -ASH US 35.0x 12.0x 41.0x 14.8x 11.9x 7.2x 20.8x 11.5xALB US 14.2x 12.4x 20.2x 14.4x 11.6x 8.5x 14.0x 14.3x

UNVR US - - - 52.5x - - - 8.3xGCP US - - - 8.8x - - - 7.8xCC US - - - 4.2x - - - 7.8xPAH US - - - 10.5x - - 54.8x 8.7xEMN US 12.7x 12.5x 11.1x 9.3x 13.0x 7.1x 11.6x -DD US 13.9x 18.8x 23.2x 24.6x 10.4x 12.5x 12.9x 13.5x

MTX US 18.5x 24.9x 18.2x 10.5x 6.3x 9.6x 14.4x -Min 12.7x 12.0x 5.0x 4.2x 6.3x 7.1x 2.7x 7.8xMax 35.0x 54.2x 41.0x 52.5x 13.0x 13.8x 54.8x 14.3x

Mean 18.2x 21.9x 20.0x 16.6x 10.1x 10.0x 18.0x 10.5x

Appendices – Multiples Comparison

36

CompanyMarket Cap (M)

Adj. Beta

5Y Rev Growth

6m Return

Div. Yield

Gross Margin

EBITDA/Int. Exp.

Current EV (M) EV/Rev EV/EBITDA P/E

2016E 2017E 2016E 2017E

WDFC US $1,496.80 0.752 2.90% 17.80% 1.46% 55.60% 59.6x $1,502.00 3.2x 19.2x 18.6x 30.6x 28.3x

NEU US $3,988.10 0.842 1.10% -14.70% 1.72% 32.00% 27.2x $4,389.30 2.3x 11.6x 11.5x 17.9x 17.7x

CHMT US $1,733.70 1.252 -7.70% -9.60% 0.00% 26.40% 16.0x $1,934.70 0.9x 7.7x 6.6x 18.0x 14.1xASH US $5,812.30 0.954 -2.20% -19.60% 1.64% 33.70% 4.8x $8,810.30 1.7x 7.9x 7.6x 12.9x 11.5xALB US $5,765.00 1.541 10.80% 1.80% 2.23% 34.50% 8.6x $9,503.90 2.2x 10.5x 9.9x 14.0x 13.2x

UNVR US $1,654.10 - - -45.60% 0.00% 16.70% 1.7x $4,621.10 - 7.8x 7.9x 37.4x 10.7x

GCP US $1,115.40 - - - - - - $1,840.40 - 7.5x 7.4x 8.1x 11.0xCC US $702.20 - - -63.30% 0.77% 17.80% - $4,453.20 - 7.6x 6.6x 5.5x 4.7xPAH US $1,255.30 1.68 - -71.80% 0.00% 40.60% - $4,716.30 6.3x 8.5x 6.2x 9.5x 6.7x

EMN US $9,014.50 1.175 9.30% -19.70% 2.74% 28.40% - $16,064.50 - 7.3x 6.9x 8.7x 7.8xDD US $50,906.20 0.897 -5.80% 9.80% 2.95% 35.70% 11.0x $53,951.20 2.4x 10.8x 9.5x 19.4x 16.7x

MTX US $1,540.40 1.532 18.00% -25.30% 0.45% 25.40% - $2,600.50 1.5x 7.1x 6.7x 10.0x 9.0xMean 1.181 3.30% -21.80% 1.27% 31.50% 18.4x 2.6x 9.4x 8.8x 16.0x 12.6x

St. Deviation 0.323 8.30% 27.20% 1.05% 10.30% 18.5x 1.6x 3.3x 3.3x 9.2x 6.0xMedian 1.175 2.00% -19.60% 1.46% 32.00% 11.0x 2.2x 7.8x 7.5x 13.4x 11.2x

Appendices – Comparables

37

Appendices – DDM

Gordon Growth Model 2020E Payout/Share 3.35 Discount Rate 7.54%2019E Growth Rate 4.79%Terminal Value 121.95

2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020EDividends + Repurchases 59.63 58.07 50.48 62.96 51.98 60.05 31.73 33.40 35.00 36.58 Net Income 36.43 35.49 39.81 43.75 44.81 50.09 52.88 55.67 58.34 60.97 Payout ratio 164% 164% 127% 144% 116% 120% 60% 60% 60% 60%Payout/share 3.51 3.62 3.23 4.16 3.55 4.23 2.23 2.35 2.46 3.35

2016E 2017E 2018E 2019E 2020E TerminalDividends + Repurchases 4.23 2.23 2.35 2.46 3.35 121.95 Discount Rate (WACC) 7.54% 7.54% 7.54% 7.54% 7.54% Growth Rate 19.09% -47.14% 5.27% 4.79%PV 3.93 1.93 1.89 93.02 Sum (Value/Share) 100.77

38

2013 Q2

2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

47484950515253545556 Eurozone PMI

China PMIU.S. PMI

Period

PMI L

evel

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2,9202,9402,9602,9803,0003,0203,0403,060

Date

Mile

s (m

illio

ns)

Source: Bloomberg Data

2005

2007

2009

2011

2013

2015

22,50023,00023,50024,00024,50025,00025,50026,000

Date

$/Ve

hicl

e


Historical PMI Levels

US vehicles Miles on Public Roads

AVG US Expenditure/Vehicle

Appendices – Demand Drivers


39

Appendices – WDFC Suppliers

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

6.78%

3.70%

1.91%1.51%

0.85%0.29% 0.22% 0.13%

Company

Per

cent

age

of T

otal

Rev

enue

• Large Retailers Responsible for 15% of Sales

• Sacrifice Pricing Power• Give-up Margin Expansion Potential

• Already sell at a Premium• Difficult to grow sales from Price

Increases

• Further Pressure on performance of MUP products


40

Appendices - Counterfeiting Issue

“In addition, from time to time the Company discovers products in certain markets that are counterfeit reproductions of the Company’s products as well as products otherwise bearing an infringing trade dress.” (FY 14 10K)“

“In addition, the Company frequently discovers products in certain markets that are counterfeit reproductions of the Company’s products as well as products otherwise bearing an infringing trade dress.” (FY 15 10K)

41

Healthy Balance Sheet

High Liquidity

Strong Cash Position

$90.8 million out of $102.5 million cash held outside of the U.S. as the end of FY 15

Profitability Ratios

2015

2016 2017 2018 2019 2020

ROA 13.05% 14.33% 14.20% 13.98% 13.72% 13.47%

ROE 27.38% 32.60% 32.88% 30.23% 27.98% 26.06%

Profit Margin

11.85% 13.21% 13.25% 13.29% 13.36% 13.46%

Liquidity Ratios

2015

2016 2017 2018 2019 2020

Current Ratio

4.28 4.35 4.61 4.87 5.15 5.43

Quick Ratio 3.36 3.53 3.80 4.07 4.35 4.64

Appendices – Selected Ratios

42

Appendices – Ratios

43

44

Appendices – Ratios

We project that ROE

will decrease from

32.6% in FY16E to

20.06% in FY20E

ROE Trend 2011 -2020E

Appendices – ROE reversal

45

LT Debt/LT Capital and LT Debt/Total Equity Trend

Increasing the use of

revolving credit line for

share purchases has

negative effect on

solvency

Appendices – Solvency Trend

46

Appendices – Business Strategies

• Maximizing Sales of Flagship Product (WD-40 Multi-Use Product)

• Growing the WD-40 Specialist Product Line

• Extending Product and Revenue Base

• Attracting, Developing and Retaining Talented People

• Operating with Excellence

47

Appendices – Product Portfolio

48

WD-40 Multi-Use Product - The WD-40 multi -use product is a market leader among multi-purpose maintenance products and is sold as an aerosol spray, a non-aerosol trigger spray and in liquid form through mass retail stores, hardware stores, warehouse club stores, automotive parts outlets and industrial distributors and suppliers. The WD-40 multi-use product is sold worldwide in North, Central and South America, Asia, Australia and the Pacific Rim, Europe, the Middle East and Africa. The WD-40 multi-use product has a wide variety of consumer uses in, for example, household, marine, automotive, construction, repair, sporting goods and gardening applications, in addition to numerous industrial applications WD-40 Specialist product line – WD-40 Specialist, introduced in 2011, consists of a line of best-in-class specialty maintenance products that include penetrants, degreasers, corrosion inhibitors, lubricants and rust removers that are aimed at an expanded group of end users that currently use the WD-40 multi-use product. The Company initially launched the WD-40 Specialist product line early in fiscal year 2012 and it currently sells these products in the U.S., Canada and select countries in Latin America, Asia, Australia and Europe. WD-40 Bike product line - The WD-40 Bike product line consists of a comprehensive line of bicycle maintenance products that include wet and dry chain lubricants, heavy-duty degreasers, foaming wash and frame protectants that are designed specifically for avid cyclists, bike enthusiasts and mechanics. The Company launched this product line in the U.S. early in fiscal year 2013 and in Australia and Europe near the end of fiscal year 2014. Although the initial focus for such sales was on smaller independent bike dealers, primarily those in the U.S., distribution of WD-40 Bike products has been expanded to include certain distributors and retailers. 3-IN-ONE - The 3-IN-ONE brand consists of multi-purpose drip oil and spray lubricant products, as well as other specialty maintenance products. The drip oil is a lubricant with unique spout options that allow for precise applications to small mechanisms and assemblies, tool maintenance and threads on screws and bolts. 3-IN-ONE Oil is the 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. In addition to the drip oil line of products, the 3-IN-ONE brand also includes a professional line of products known as 3-IN-ONE Professional, which is a line of high quality, maintenance products. 3-IN-ONE products are sold primarily in the U.S., Europe, Canada, Latin America, Australia and Asia. GT85® - The GT85 brand is a multi-purpose bike maintenance product that consists of professional spray maintenance products and lubricants which are sold primarily in the bike market through the automotive and industrial channels in the U.K., with additional sales in foreign markets including those in Spain and other European countries. GT85 products are also currently sold in the United States. This brand was acquired by the Company’s U.K. subsidiary in September 2014 and it will help to build upon the Company’s strategy to develop new product categories for WD-40 Specialist and WD-40 BIKE.

Appendices – Product Portfolio

49

X-14 - The X-14 brand is a line of quality products designed for unique cleaning needs. X-14 is sold as a liquid mildew stain remover and as an automatic toilet bowl cleaner. X-14 is sold primarily in the U.S. through grocery and mass retail channels. 2000 Flushes - The 2000 Flushes brand is a line of long-lasting automatic toilet bowl cleaners which includes a variety of formulas. 2000 Flushes is sold primarily in the U.S. and Canada through grocery and mass retail channels. Carpet Fresh - The Carpet Fresh brand is a line of room and rug deodorizers sold as powder, aerosol quick-dry foam and trigger spray products. Carpet Fresh is sold primarily through grocery and mass retail channels in the U.S., the U.K. and Australia. In the U.K., these products are sold under the 1001 brand name and in Australia, they are sold under the No Vac brand name. Spot Shot - The Spot Shot brand is sold as an aerosol carpet stain remover and a liquid trigger carpet stain and odor eliminator. The brand also includes environmentally friendly products such as Spot Shot Instant Carpet Stain & Odor Eliminator™ and Spot Shot Pet Clean, which are non-toxic and biodegradable. Spot Shot products are sold primarily through grocery and mass retail channels, warehouse club stores and hardware and home center stores in the U.S. and Canada. Spot Shot products are also sold in the U.K. under the 1001 brand name. 1001 - The 1001 brand includes carpet and household cleaners and rug and room deodorizers which are sold primarily through mass retail, grocery and home center stores in the U.K. The brand was acquired in order to introduce the Company’s other homecare and cleaning product formulations under the 1001 brand and to expand the Company’s homecare and cleaning products business into the U.K. market. Lava - The Lava and Solvol brands consist of heavy-duty hand cleaner products which are sold in bar soap and liquid form through hardware, grocery, industrial, automotive and mass retail channels. Lava is sold primarily in the U.S., while Solvol is sold exclusively in Australia. Source: 2015 Annual Report

Appendices – Shareholder Structure

50Source: Bloomberg Data

Appendices – Can Cost Components

51Source: Company FY15 Investor Presentation

Appendices – WDFC vs. Benchmarks


2/19/2016 Closing Price: $107.79



14-Feb-2011 14-Feb-2012 14-Feb-2013 14-Feb-2014 14-Feb-2015 14-Feb-20160.5

0.75

1

1.25

1.5

1.75

2

2.25

2.5

2.75

3

WDFC

S5SPCH

SPX

S5HOUS

Date

$

$1 Invested in 2011

Source: Bloomberg Historical Prices

52

Documents

WDFC Presentation (1)