POST FIN201 Unit 5.1 DB: Key Cost Capital Term: Credit Facility latest 2016 february

WD 40 ARTICLE ON APPLICATION OF LEVERAGE

DEAR SHAREHOLDERS

On March 26,2001 ,WD-40 Company (NASDAQ: WDFC) announced the acquisition of Global Household Brands, maker of such well-known products as X-14,,, 2000 Flushes, and Carpet Fresh., The acquisition represents another milestone in our creation of a new business model on which to build our fortress of brands. It furthers our successful transitioning to a global consumer products company with brands that deliver superior performance and value to end users who buy in a variety of trade channels.

How we will finance the acquisition? We have stated in the past that we would lower our dividend payout when the right opportunity came along to enhance shareholder value. Such an opportunity is here right now. A five cent (per share) quarterly dividend reduction will allow us to qualify for a more favorable credit facility for financing the Global Household Brands acquisition: a syndicated senior secured credit facility totaling $85 million and led by Union Bank of California. This is an excellent move for us — a vital investment in short- and long-term sales and earn­ings growth.'

What the acquisition means to shareholders The acquisition offers several advantages. Not only will it give us an additional $69 million in sales revenues, but it will augment and further enhance our fortress of brands model, Global Household Brands has been a star performer in the household goods sector, and its acquisition will further diversify our product portfolio and substantially reduce our concentration on one product. As a result, no brand or trade channel will be greater than 60% of our total revenues/

With this acquisition, WD-40 Company makes a big move into the household goods sector, joining the ranks of consumer goods companies, which the stock market has historically rewarded with higher price-earning (P/E) ratios.

Our goals for the coming year Consumers remain the focus of our business, and the acquisition of Global Household Brands will allow us to broaden this focus. We will leverage their considerable knowledge and expertise in the grocery channel to complement our expertise in other channels. The combined company will have two marketing groups: The Do-it-Yourselfers Group for Solvol,, Lava,, WD-40,, and 3-IN-ONE, and the Household Products Group for

2000 Flushes, Carpet Fresh, and X-14. Our distribu­tion infrastructure will expand, as well, to support our new household product platform and new brand and product launch opportunities, Increased research and development will allow the combined company to leverage our collective brands and thus create greater shareholder value in both dividends and stock price. Non-core competencies, such as the Global Household Brands manufacturing, will be sold to one of our key suppliers, maintaining the out­sourcing business model we have successfully managed over the past 48 years.'

On behalf of WD-40 Company management, I want to express my appreciation for your support and underscore our continued commitment to achieve faster and more profitable growth through strategic acquisitions such as this one. We will continue to build, defend and acquire; in so doing, we will make WD-40 Company a fortress of brands in every sense of the term.

Sincerely yours,

Gaity Ridge, President and CEO