WD-40 Company Valuation- Final3

8/2/2019 WD-40 Company Valuation- Final3

1/36

WD-40 Company ValuationSecurity Analysis Project

December 13, 2011Finance 333_001

Brinsfield, JamesDougherty, Kenneth

Raja, KevinRojas, Orlando


2/36

BDRR & Associates, LLC.

2 | P a g e

Table of Contents Section I: Business Environment ................................................................................................................................ 3

Business Lines ...................................................................................................................................................... 3

Breakdown of Sales, Revenue, and Assets ........................................................................................................... 5

Macro-economic Overview .................................................................................................................................. 7

Industry Outlook ................................................................................................................................................... 9

Firm Position ........................................................................................................................................................ 9

Economic Advantages ........................................................................................................................................ 12

Summary ............................................................................................................................................................. 15

Section II: Valuation ................................................................................................................................................. 16

CAPM and WACC ............................................................................................................................................. 16

Risk-free Rate .......................................................................................................................................... 16

Market Risk Premium .............................................................................................................................. 17

Required Rate Calculation ....................................................................................................................... 17

Dividend Discount Model ................................................................................................................................... 18

Discounted Cash Flow ........................................................................................................................................ 18

Industry Comparison .......................................................................................................................................... 19

Orlandos Section ............................................................................................................................................... 19

Section III: Valuation Conclusion ............................................................................................................................ 22

Intrinsic Value .................................................................................................................................................... 22

Return Estimate .................................................................................................................................................. 22

Recommendation ................................................................................................................................................ 23

Section IV: Appendix ................................................................................................................................................ 25

Balance Sheet ..................................................................................................................................................... 26

Income Statement ............................................................................................................................................... 28

Dividend Discount Model ................................................................................................................................... 30

P/E Regression .................................................................................................................................................... 31

WACC Computation .......................................................................................................................................... 32

Discounted Cash Flow Model ............................................................................................................................ 33DCF: Intrinsic Valuation Computation ............................................................................................................... 34

Industry Comparison .......................................................................................................................................... 35

Orlandos Excel .................................................................................................................................................. 36

Section V: References ................................................................................................................................................ 37


3/36


3 | P a g e

SECTION I: BUSINESS ENVIRONMENT

A. Business Lines

WD-40 is a company with two distinct business lines: multi-purpose maintenance products and

homecare and cleaning products. For much of the companys life, its sole business line was multi -

purpose maintenance products until it acquired Global Household Brands, a homecare and

cleaning products business. It did this in 2001 in order to become more diverse and reach out into

new markets.

Even though the company now has several homecare and cleaning products, a vast majority of its

business comes from its multi-purpose maintenance products. 80% of its sales came from its multi-

purpose maintenance products in 2010 (Standard & Poors, 2011).

Multi-Purpose Maintenance Products

The multi-purpose maintenance products it sells are WD-40, 3-IN-ONE, and Blue Works. These

products purposes are to help maintain machinery and equipment to ensure a long useful life

through lubrication, rust prevention, cleaner, and moisture displacement.

In the letter to shareholders, one of WD- 40s strategic initiatives is to increase its market share in

the multi-purpose maintenance products sector. It states that during the next two years it is rolling

out several new products. This initiative is to fill gaps in the market and get access to different

distribution channels. Its newest product, Blue Works, is silicone based which gave it access to

food grade market distribution channels, a channel that was inaccessible until now (WD-40

Company, 2010).


4/36


4 | P a g e

Homecare and Cleaning Products

The homecare and cleaning products it sells are X-14, 2000 Flushes, Carpet Fresh, Spot Shot,

1001, Lava, and Solvol. The products range from heavy-duty hand cleaners from its brands Lava

and Solvol; carpet deodorizers and stain removers from its brands Spot Shot, Carpet Fresh, No

Vac, and 1001; and toilet and hard surface cleaners from its brands X-14 and 2000 Flushes.

Global Products

Many of the companys brands were attained during acquisitions which lead to new distribution

channels and markets. Products from WD-40 Company can be found worldwide because of acquisitions of global companies and products. Sales outside of the US accounted for 60% of total

sales (Kaplan, 2011). This proves that the companys products are very successful in international

markets. It also proves that the different brands travel through the right distribution channels to

maximize exposure. Its products travel through industrial, hardware, grocery, warehouse club,

home center, automotive, and mass retail distribution channels (WD-40 Company, 2010).


5/36


5 | P a g e

B. Breakdown of Sales, Revenue, and Assets

The following table summarizes operating data for WD-40 operations (in thousands, except

percentages and per share amounts):

Net Sales: 2010 2009 Dollars PercentMulti-purpose maintence $258,095 $225,098 $32,997 15%Homecare and cleaning $63,421 $66,904 ($3,483) -5%

Total net sales $321,516 $292,002 $29,514 10%Cost of products sold $156,210 $147,469 $8,741 6%

Gross profit $165,306 $144,533 $20,773 14%Operating expenses $110,108 $104,688 $5,420 5%

Ops income $55,198 $39,845 $15,353 39%Net income $36,095 $26,287 $9,808 37%Earnings per common share - diluted $2.2 $1.58 $0.57 36%

Fiscal Year Ended August 31,Change Prior Year

Net Sales by Segment

The following table summarizes net sales by segment (in thousands, except percentages):

2010 2009 Dollars Percent$179,867 $168,381 $11,486 7%$110,367 $97,518 $12,849 13%$31,238 $26,103 $5,135 20%

$323,482 $294,011 $29,470 10%


AmericasEurope

Asia-Pacific


6/36


6 | P a g e

Americas

The following table summarizes net sales by product line for the Americas segment (in thousands,

except percentages):

2010 2009 Dollars Percent$129,834 $115,095 $14,739 13%$50,033 $53,286 ($3,253) -6%

$181,877 $170,390 $11,486 7%

56% 58%

Multi-purpose maintenance productsHomecare and cleaning products

% of consolidate d ne t s ale s


Europe

The following table summarizes net sales by product line for the Europe segment (in thousands,

except percentages):

2010 2009 Dollars Percent$102,195 $88,153 $14,042 16%

$8,172 $9,365 ($1,193) -13%$112,377 $99,527 $12,849 13%

34% 33%



% of consolidate d ne t s ale s

Asia-Pacific

The following table summarizes net sales by product line for the Asia-Pacific segment (in

thousands, except percentages):


7/36


7 | P a g e

2010 2009 Dollars Percent$26,066 $21,850 $4,216 19%$5,216 $4,253 $963 23%

$33,292 $28,112 $5,179 18%

10% 9%% of consolidate d ne t s ale s



C. Macro-economic Overview

WD- 40s products ranging from carpet cleaner, heavy duty cleaner and multi -purpose lubricants

which places them in the household product industry. According to Seidman from Value Line,

Household Products equities can be classified as defensive investments. Seidman explains how

companies in the household product industry have the ability to provide solid downside

protection in challenging periods, while performing well during great economic times. Seidman

also includes that the industry is mature, and sales and earnings streams are relatively steady

through the business cycle placing WD -40 in a great financial position.

In tough economic times, consumers will not stop purchasing household products, but look for

products with the highest value. Brav erman states The household products area remains very

competitive, in our view, given the maturity of the industry in developed countries, and with

various companies vying to capture market share in developing markets. One of the methods for

expanding in such a competitive industry will be value, and tapping into the international market.

Braverman later goes to conclude that economic growth and changing lifestyles in developing

international markets should provide growth opportunities. Reassuring that international


8/36


8 | P a g e

expenditure is imperative to grow as a company. Seidman says, the largest household product

companies have long histories of acquisition and divestitures which is visible by the line of

products WD-40 carries and has acquired over the past years.

In the year 2010, 44% of WD- 40s sales came from the international market. Overseas expansion

has given the opportunity to the WD-40 company to push sales and earnings higher than previous

years. Seidman states, North America, Europe and the Asia/Pacific regions are the largest, most

attractive markets, but they are generally mature and highly competitive giving US based

companies reason to expand internationally. A drawback for international expansion for any

industry according to Seidman is at any given time, changes to foreign currency exchange rates

will either support or restrain reported sales and earnings growth. Too, companies with foreign

production assets are subject to local political risk. Braverman expects emerging internation al

markets demand for consumer products will raise, how do domestic companies gain foreign

attention? Braverman believes that a number of companies continue to control costs effectively

and are looking for additional ways to operate more efficiently whi ch has been stated by Seidman

as well to be succeed in the household product industry. Braverman states In the long run, partly

due to the slow growth seen in developed markets, we think large multinationals will continue to

seek growth opportunities in developing and emerging markets.

Throughout the current year, the S&P Household Products index rose 4.3% compared to the

3.5% drop for the S&P 1500 index as said by Braverman . As found in WD- 40s annual report,

part of WD- 40s strategic plan for the upcoming quarters are to target Mexico and Brazil in the

Americas market. In Europe, Russia and Turkey are the main countries to be seen with most

growth opportunities. In Asia / Pacific, WD-40 plans to expand in China, India, Vietnam, and


9/36


10/36


10 | P a g e

products which includes its WD-40 brand and Homecare and Clean Products like the X-14

mildew cleaner. Its 2010 revenue was $322 million compared to Clorox and Kimberly-Clark

which had revenue of $5,231 million and 19,746 million. (S&P) But given its small size, WD-40 is

more adaptable then its larger competitors and with its growing international sales it should

increase its revenues. 60% of its sales through May have been international with Europe being the

biggest while Asia/Pacific sales are not trailing too far behind. (S&P)

One of the benefits that WD has over the big boys is that it has very little in equipment and factory

cost. To produce its products it partners with third-parties so it has very little equipment and

factory cost. This allows them to invest more in R&D then the others since it does not have toworry about managing the factories that product its products. This also allows them to minimize

cost since it can switch the manufactures for its products as needed. Currently Clorox operates over

38 manufacturing facilities and Kimberly-Clark owns over 112 worldwide. (Mergent) This makes

these companies inflexible in the fast moving world market.

Some of the risk factors for the company are the cost of its raw materials which could increase the

cost of the final product. If it were to rise too much, sales would suffer. Its reliance of third-party

manufactures could cause problems with logistics and if its relations with the third-party were to go

sour, the company could run into problems manufacturing its product.

Kimberly-Clark has four business segments Personal Care, Consumer Tissue, Professional/other

and Healthcare. Combined they create total revenues of $19,737,000 thousand for 2010 with

personal care being the biggest. Kimberly-Clark is currently facing the problem of rising operating

costs and tightening supply of oil-based materials. For the rest of the year its margins may be tight

even with the discretionary spending cuts. Clorox recently faced a forced acquisition attempt by

Carl Icahn in which he offered up to $80 a share to buy the company outright. He also attempted


11/36


11 | P a g e

to have Clorox auctioned off but this attempt failed. (Valueline) Its total revenue totaled to

$5,534,000 for 2010 with its four segments of Cleaning, Household, Lifestyle and International

with international being the biggest. For all the companies the Americas being the biggest although

for Clorox most of its revenues come from the USA while the other two have a more international

spin to its revenues. Since 2011, numbers for Clorox show that its revenues decreased this year to

$5,231,000 from its 2010 numbers. (Mergent)

(Annual Report)

Above are the currents strategic initiatives for WD-40 Competition is strong in the developed

market but there are still growing opportunities in the international and developing markets. It is

currently in over 160 countries worldwide and is continuing to expand operations in many of

those countries WD-40 is also actively looking for acquisitions to acquire new products and create

new business opportunities. (S&P)


12/36


12 | P a g e

F. Economic Advantages

WD-40 Company is one of the smallest companies in the specialty chemicals industry. It must

directly compete with large companies like Mosaic Co., Johnson Matthey PLC, and Croda

International PLC. WD-40 Company has a market capitalization of $633.37 million, whereas

Mosaic Co., Johnson Matthey PLC, and Croda International PLC market capitalizations of 22.24,

3.85, and 2.39 billion, respectively. This means that WD-40 is from 3 to 35 times smaller than its

main competitors.

Although it may not have as much power over distributors and retailers as its competitors, it use its

existing products, innovations to those products, global expansion, and business contracts to its

advantage.

Innovations

WD-40 Company is seen as a mature company selling mature products; however, it is constantly

reinventing its mature products. The company has created a special product development team,

dubbed Team Tomorrow, to help create, reinvent, and test products. In 2010, the company

invested $5.3 million on research and development (WD-40 Company, 2010).This was an increase

of 10.42% and 47.22% from 2009 and 2008, respectively.

The WD-40 lubrication was scrutinized for dropping the red straw delivery system on their aerosol

cans. Most recently, Team Tomorrow took the criticisms and developed a Smart Straw delivery

system which allows the user to choose between a straw or spray delivery. This is consistent with


13/36


13 | P a g e

their belief that innovation and renovation are important to long - term growth of its brands

(WD-40 Company, 2010).

Contracts

WD-40 Company does not actually produce any of its products. This allows it to free up cash that

would have otherwise been invested in manufacturing assets. The company uses a limited number

of third-party manufacturers to produce all of its products. The company admits that this adds risk

to the operation because it cannot control the third-party manufacturers management. If there are

disagreements or changes to the contracts, this could significantly impact the company.

The company works with the raw materials suppliers throughout the supply chain to ensure the

lowest cost burden to the consumer. Originally, WD-40 Company entered into short-term

contracts with its supplier no longer than half a year, but in order to support innovation and new

products, the company has looked into other sources of manufacturing (WD-40 Company, 2010).

A WD-40 Company press release states, that it have entered into a three year credit agreement

with Bank of America. This agreement is allowing the company access to $75 million dollars

(WD-40 Company, 2011). The extra money will help the company continue to grow and aid in

their share buyback action. Any contract that gives access to capital is an economic advantage over

the competition. Even large companies can be revoked credit, so the fact that it is seen as

creditworthy means that Bank of America does not foresee the WD-40 Company undergoing

financial difficulty any time soon.

Global Expansion and Business Relationships

One the main strategies that WD-40 Company is adamant about is developing its business

through acquisitions, joint ventures and/or other strategic partnerships (WD-40 Company, 2010).


14/36


14 | P a g e

Acquisitions have been a clear strategy since the turn of the century. In 2001, the company

acquired Global Household Brands, which included brands such as 2000 Flushes and Carpet Fresh.

These acquisitions were made to diversify their business from solely multi-purpose maintenance

products to the addition of homecare and cleaning products.

The brand acquisitions have helped the company get into new markets. The acquired brands

carved a way in existing distribution channels for the companys root products. This is somewhat

alarming because in a span of eight years, WD-40 Company acquired eight brands and no brands

have been acquired since 2004. So either it does not have the financial strength or it is no longer

following one of its core strategies. It could also indicate that the company has shifted from

acquiring products/ companies to developing them in house.

According to the annual report, sales to Wal-Mart Stores accounts for roughly 10% of total net

sales which is roughly $29.2 million (WD-40 Company, 2010). This business relationship is helpful

because having a familiarity with Wal- Mart customers mean s that WD-40 Company products are

entitled to shelf space when needed. Being a stable part of Wal- Marts inventory can keep other

competitors from gaining access to them.

Industry Regulation Requirements

WD-40 is in an industry where regulations are imposed to protect the environment. The

California Air Resources Board, has passed a law that prevents the selling of any product that has

volatile organic compounds (VOC) above a certain amount. The current limit is at 50% VOCs but

by December 31, 2015, the VOCs need to be reduced to 10% (Standards for Consumer Products,

2007). Specifically, this is targeted towards aerosols. WD-40 Company has several products that

will be affected by the change including Spot Shot, Carpet Fresh, and No Vac.


15/36


15 | P a g e

The company has been able to meet regulatory requirements without financial strain (WD-40

Company, 2010). A 40% change in a component of any product is a huge undertaking and the fact

that it is able to reformulate several products without financial strain is impressive. Larger

companies may or may not be able to achieve this new standard which already puts WD-40

Company in front of others.

Patents

According to the US Patent Office, WD-40 Company has 10 patents, ranging from bottles to

liquid dispensers. Even though the company has several patents, its primary strategy is to gain sales

through its brand names. Since the brand names are essential to the companys strategy, it relies on

trademarks as a legal guarantee throughout the world on their ten major brands (WD-40

Company, 2010).

G. Summary

Despite experts outlook on the household products industry , WD-40 Company is finding ways of

staying competitive. Since 2009, the comp anys total net sales grew by 10% or $29.5 million. The

general economic conditions will keep consumers price-sensitive on household products. An asset-

light organizational structure, third-party manufacturing, acquiring global brands to improve

distribution channels, and product innovations are key strategies that are making the difference in

these bleak economic times.


16/36


16 | P a g e

SECTION II: VALUATION

Capital Asset Pricing Model (CAPM) and

Weighted Average Cost of Capital (WACC)

It is necessary to calculate the firms intrinsic value to determine many things, but most

importantly, whether the firm will yield a positive return for the investor. Intrinsic value can be

computed by many different models, which will give different results. It is vital to not base any

large investment in solely one model, which is why our team has conducted several tests through

various models.

Capital Asset Pricing Model

The CAPM takes the time value of money and balances it with WD- 40 Companys risk. The

required rate of return is calculated by taking the riskiness of the security ( ) and multiplying it by

the market risk premium (R m-R f ). Then you take the risk adjusted market premium and add the

risk-free rate (R f ). The CAPM formula is R rr = R f + (R m-R f ).

Risk-free Rate

The risk-free rate that our analysts used was the 10-Year interest rate of the Treasury Note as of

November 7 th according to Yahoo! Finance. The adjusted closing price for November 7th was

1.99% . The 10-Year Treasury Note was used instead of the 30-Year because it reflects the shorter

time period that we are sampling and provides a more accurate risk-free rate.

Market Risk Premium


17/36


17 | P a g e

Market risk premiums are difficult to calculate which is why we used the industry standard market

risk premium source. The market risk premium was defined in the Market Risk Premium Survey

by Pablo Fernandez. The average Market Risk Premium was 5.5% for the United States in 2011.

Beta

Beta is the risk factor which either amplifies or muffles the market risk premium in the CAPM

model. By itself beta measures the volatility of the security compared to the market. We defined

the market as the S&P 500. We used the adjusted monthly return of the S&P 500 and WD-40

Company from November 2006 to November 2011. The beta came out to 0.6864 which does not

fall far from Yahoo! Finance beta of 0.55.

Required Rate Calculation

R rr = R f + (R m-R f )

1.99 + 0.6864(5.5) = 5.77% .

Weighted Average Cost of Capital

The required rate has many functions including being used to calculate the Weighted Average Cost

of Capital. Our team took the total debt and divided it by the total value and multiplied it by the

cost of debt multiplied by after-tax rate. Then we took the CAPM amount and divided it by the

total value and multiplied it by the cost of equity. These items added gave us the WACC, which

comes out to 5.6%.

Dividend Discount Model


18/36


18 | P a g e

Growth Rate in Discounted Cash Flow Model

I am assuming a growth rate of 3% as the growth rate for the previous 5 years has been 3.18% and

the outlook for the growth is expected to stay right around 3% this according to the Valueline

Investment Survey.

DDM Valuation

When using the Dividend Discount Model, several assumptions that must be made. These include

interest rates will staying constant, dividends growing indefinitely and the payments will be

consistent. This also includes that WD-40 Company has a growth pattern that stays constant.

Discounted Cash Flow Model

Growth Rate in Discounted Cash Flow Model

The growth in sales used in the DCF model was derived from Value Line. The Value Line report

estimated the growth in sales would be 5% for 2012. After taking that into consideration, we

looked into the past sales growth. The past sales growth has fluctuated severely from as high as 10%

to as low as -7.9%. This volatility keeps us from expecting high growth rates in sales in the coming

five years.

WD-40 Company is a mature company and will not experience high growth rates, unless the firm

continues to acquire other companies, which it has not done recently.

All of this influenced our estimates of growth rate in sales for the next five years. We estimate that

the companys sales growth rat e will peak in 2013 at 7% and steadily decrease to 4.5% indefinitely.


19/36


19 | P a g e

DCF Valuation

These assumptions for growth except for sales falls compared to the historical averages. This is

because we want to stay conservative. The company is faced with very large multinational

corporations. Since WD-40 Company is starting to venture in international markets, where other

very large competitors products are, we can assume that growth will be harder to attain.

We calculated the free cash flow directly from the compan ys financial statements that we obtained

from the SECs EDGAR database. We calculated CAPEX and Working Capital directly from the

balance sheets. The forecasted Free Cash Flows were discounted at N+.8333. This number was

found by dividing the number of months between November 1 st and August 31 (Fiscal Year) to

come up with .8333 to give an accurate PV Factor.

Industry Comparison

The companies used for the industry comparison are as follows:

Proctor & Gamble (PG)

Colgate-Palmolive (CL)

Kimberly-Clark (KMB)

Clorox (CLX)

Church & Dwight (CHD)

Energizer Holdings (ENR)

Table 1: Industry Competition


20/36


20 | P a g e

Company NameP/E

RatioGrowth Beta PoR PEG

RatioEPS

PROCTER & GAMBLE CO. (THE) 15.92 9.3 0.47 50.94 1.71 3.94

COLGATE-PALMOLIVE CO. 17.56 9.7 0.46 43.90 1.81 4.98

KIMBERLY-CLARK CORP. 16.65 8.9 0.38 64.94 1.87 4.19

CLOROX CO. (THE) 18.56 8.8 0.41 66.82 2.11 3.47

CHURCH & DWIGHT CO., INC. 21.37 9.6 0.38 32.05 2.23 2.01

ENERGIZER HOLDINGS, INC. 18.60 12.5 1.38 0 1.49 3.72

Comparable Average 18.11 9.80 0.58 43.11 1.87 3.72

Comparable Median 18.06 9.45 0.44 47.42 1.84 3.83

WD-40 19.69 5.58 0.53 55.00 3.53 2.14

Data obtained from S&P and Yahoo Finance on 11/10/11

WDFC P/E is on the high end of its competitors but not the highest. Its growth is quite low at

5.58 compared to the others. This could be because it is in a very specific industry while the others

are larger with more products and are in the more general consumer staples industry. There PEG

ratio is one of the highest in the industry at 3.53 which shows that investors believe that WD-40

could possibly be overvalued since it is more than a full point above that average.

Table 2: P/E Regression

Expected Value Coefficients Factor Component

Intercept 76.00 1.00 76.00

Growth -5.26 5.58 -29.32

Beta 5.88 0.53 3.11

PoR -0.23 55.00 -12.50


21/36


21 | P a g e

Exp. P/E 37.29

Exp. Value $ 80.18

P/E Ind $ 38.83

PEG Ind $ 33.64

P/E Regression Assumptions

The Expected P/E will be 37.29

Expected Value at $80.18

The Beta, Growth, and POR used for my regression were acquired through the Dividend

Discount Model. The expected P/E is quite high based on the current P/E of 19.69 and the

industry average is at 18.11. Also the regression put the value of WDFC at $80.18 which is about

double their current stock price. This growth would be hard to attain because WD-40 is a

relatively small company in a market filled with huge multination companies as you can see above

from the Industry Competition table.

DFC Forecast Assumptions

Gross Margin 48 %As sales increases slightly we will assume the company will have to allowfor more operating expenses.

SGA/Sales 25.5% As sales increases, this will result in a slightly lower ratio.

Operating Margin 20% With the Gross Margin and SGA/Sales shrinking the operating margin willtoo become smaller.

CAPEX/Sales 3% We will only see a minute deviation from the historical data.

Tax Rate 33% The tax rate was calculated from the past 6 years tax rate.


22/36


22 | P a g e

The Terminal FCF equaled the 2016 Cash Flow multiplied by the growth rate divided by the

difference in the discount rate and the growth rate. This was then discounted that the previous

years discount rate.

The present value of the firm was the sum of all the discounted FCFs plus the terminal FCF

divided by the previous years discount rate. The value of the firm could then be found by adding

the value of marketable securities and subtracting the market value of debt.

The intrinsic Value of WD-40 Company based on the Discount Cash Flow Approach is $96.51

which is 127.95% higher than the current price of $42.34. This is a very clear indication that the

stock is seriously undervalued and needs to be bought immediately.

SECTION III: VALUATION CONCLUSION

A. Intrinsic Value

The valuation models gave valuations ranging from $42.26 to $96.51. Our team has decided to use

the Dividend Discount Model to give the intrinsic value for WDFC. We chose this model because

it provides the best estimate towards the companys true value and it bases its value off of more

metrics which we can assume gives a more accurate valuation. The Dividend Discount Model gave

us an intrinsic value of $42.26. The last closing stock price was $39.82 (12/12/2011), which means

that the stock is under-valued by $2.44.


23/36


23 | P a g e

B. Return Estimate

As of December 12, 2011, the closing price of the stock was $39.82. This means that if one were to

invest in the stock that they would experience a positive return of 6.13%, based on our models. If

an investor were to purchase $1 million of WDFC, the investment would net a positive

$61,275.74. The mispricing of the stock must be more permanent in nature because of the efficient

market hypothesis. Our team believes that the market is semi-strong. We understand that all of the

information we gathered is public and that the market adjusts immediately to any new information,

so the stock price should have gone up to our intrinsic value already. Since the 200-day moving

average of the security is $41.42 and our intrinsic value is $42.26, than that means that the security

is permanently mispriced. Until the market realizes that it is mispriced and corrects to our intrinsic

price, there is time to invest and make a profit.

C. Recommendation

Our recommendation is to buy WDFC because it is under-valued. After utilizing various valuation

models to find the intrinsic value, we have found them all to come to that same conclusion. The

DDM shows that the intrinsic value should be $42.12. The P/E Model shows that the intrinsic

value should be $80.18. The DCF Model shows that the intrinsic value should be $96.51. Every

valuation model shows WDFC as being undervalued.

WD-40 Company does not own manufacturing plants so its capital expenditure is low and it does

not need many employees. The company needs employees for corporate and research and


24/36


24 | P a g e

development because all it does is develops a products and then outsources the manufacturing to a

third-party. The company has only 334 employees, so there are very little payroll costs. On the

other hand, WD- 40s competitors have thousands of employees. Church & Dwight has 3,600 and

Clorox has over 8,100. This asset-light strategy means that WD-40 Company can operate with 24

times fewer employees than Clorox and Clorox is not 24 times larger. No employees mean more

of the revenues can be put back into the company or given to the investors as dividends. Combine

that with the cost savings it gets from not having to run a plant and it adds up to a sizable amount.

Buy

WD-40 Company is growing faster than the industry, year over year. Year over year, the

companys quarterly revenue growth is 12.5% compared to an indus try average of 7.8%. Since

WD-40 Company is smaller than its competitors, it is easier for the firm to experience a higher

growth rate. Company is an established company, the best of both worlds are found; growth

potential of a small company with the stability of an established company.


25/36


25 | P a g e

Appendix


26/36


26 | P a g e

Balance Sheet 2002-2006 from S.E.C. Edgar Database

Fiscal Year Ended August 31 2002 2003 2004 2005 2006Assets

Current assets:

Cash and cash equivalents 11,091$ 41,971$ 29,433$ 37,120$ 45,206$Short-term investments 0 0 0 0 0Trade accounts receivable 43,754 41,925 40,643 44,487 44,491Product held at contract packagers 2,135 1,704 1,975 1,814 1,385Inventories 6,143 4,709 6,322 8,041 15,269Current deferred tax assets, net 2,400 2,387 2,830 2,946 4,331Assets held for sale 0 0 0 0 0Other current assets 2,140 2,565 3,026 6,784 4,858

Total current assets 67,663 95,261 84,229 101,192 115,540

Property and equipment, net 6,196 6,523 7,081 8,355 8,940Goodwill 92,725 92,267 95,832 95,858 96,118Other intangible assets, net 36,650 35,700 43,428 42,884 42,722Investment in related party 5,402 642 932 1,112 972Other assets 6,409 6,265 5,273 4,852 4,183

Total assets 215,045$ 236,658$ 236,775$ 254,253$ 268,475$

Liabilities and Shareholders EquityCurrent liabili ties:Accounts payable 15,871$ 14,772$ 11,910$ 13,671$ 11,287$Accounts payable to related party 0 0 1,926 1,945 463Accrued liabilities 11,873 11,999 12,151 14,058 11,678Current portion of long-term debt 0 10,000 10,000 10,714 10,714Accrued payroll and related expenses 5,724 5,122 3,935 3,828 7,485

Income taxes payable 1,495 2,780 2,613 2,484 2,040Revolving line of credit 299 0 0 0 0

Total current liabilities 35,262 44,673 42,535 46,700 43,667

Long-term debt 95,000 85,000 75,000 64,286 53,571Deferred and other long-term liabilities 1,605 1,781 1,969 1,838 1,895Long-term deferred tax liabilities, net 4,853 11,363 13,611

Total liabilitie s 131,867 131,454 124,357 124,187 112,744

Shareholders equity:Common stock 16 17 17 17 17

Additional paid-in capital 34,400 40,607 49,616 52,990 62,322Unearned stock-based compensation 0 0 0 -136 0Retained earnings 48,699 64,068 76,152 89,983 103,335Accumulated other comprehensive loss 63 512 1,659 2,238 5,083Common stock held in treasury, at cost 0 0 -15,026 -15,026 -15,026

Total shareholders equity 83,178 105,204 112,418 130,066 155,731

Total liabilities and shareholders equity 215,045$ 236,658$ 236,775$ 254,253$ 268,475$


27/36


27 | P a g e

Balance Sheet 2007-2011 from S.E.C. Edgar Database

Fiscal Year Ended August 31 2007 2008 2009 2010 2011Assets

Current assets:

Cash and cash equivalents 61,078$ 41,983$ 45,956$ 75,928$ 56,393$Short-term investments 0 0 0 0 533Trade accounts receivable 47,204 49,271 48,061 47,846 58,324Product held at contract packagers 1,447 2,453 1,797 0 0Inventories 13,208 18,280 15,858 14,573 17,604Current deferred tax assets, net 4,145 4,045 4,369 4,747 4,849Assets held for sale 0 0 0 0 879Other current assets 3,489 3,453 4,736 7,314 4,574

Total current assets 130,571 119,485 120,777 150,408 143,156

Property and equipment, net 8,811 11,309 10,930 9,322 8,482Goodwill 96,409 95,909 95,424 95,235 95,452Other intangible assets, net 42,543 39,992 32,205 31,272 29,933Investment in related party 1,015 435 0 0 0Other assets 3,837 3,543 3,281 2,871 2,754

Total assets 283,186$ 270,673$ 262,617$ 289,108$ 279,777$

Liabilities and Shareholders EquityCurrent liabili ties:Accounts payable 21,854$ 22,985$ 12,529$ 18,943$ 19,373$Accounts payable to related party 1,506 547 0 0 0Accrued liabilities 12,780 13,143 15,233 14,382 15,258Current portion of long-term debt 10,714 10,714 10,714 10,714 10,715Accrued payroll and related expenses 6,906 6,084 7,168 14,265 7,471

Income taxes payable 97 1,090 2,570 1,516 1,413Revolving line of credit 0 0 0 0 0

Total current liabilities 53,857 54,563 48,214 59,820 54,230

Long-term debt 42,857 32,143 21,429 10,715 0Deferred and other long-term liabilities 2,195 3,099 3,159 4,635 2,508Long-term deferred tax liabilities, net 16,005 16,876 16,868 17,414 21,813

Total liabilities 114,914 106,681 89,670 92,584 78,551

Shareholders e quity:Common stock 18 18 18 18 19

Additional paid-in capital 74,836 82,647 86,729 93,101 117,022Unearned stock-based compensation 0 0 0 0 0Retained earnings 118,260 128,627 138,367 157,805 176,008Accumulated other comprehensive loss 7,504 2,766 -2,101 -4,334 -358Common stock held in treasury, at cost -32,346 -50,066 -50,066 -50,066 -91,465

Total shareholders equity 168,272 163,992 172,947 196,524 201,226

Total liabilities and shareholders equity 283,186$ 270,673$ 262,617$ 289,108$ 279,777$


28/36


28 | P a g e

Income Statement 2002-2006 from S.E.C. Edgar Database

Fiscal Year Ended August 31 2002 2003 2004 2005 2006

Net sales 216,764$ 238,140$ 242,467$ 263,227$ 286,916$

Cost of products sold 108,153 115,928 116,944 133,833 148,516

Gross profit 108,611 122,212 125,523 129,394 138,400

Operating expenses:Selling, general and administrative 50,718 54,061 58,311 63,529 71,767Advertising and sales promotion 15,242 17,449 21,539 17,893 20,079Amortization of definite-lived intangible assets 0 879 0 0 532Impairment of indefinite-lived intangible assets 285 71 224 552 0

Total operating expenses 66,245 72,460 80,074 81,974 92,378

Income from operations 42,366 49,752 45,449 47,420 46,022

Interest income 0 0 0 0 0Interest expense -5,791 -6,740 -6,387 -5,133 -3,503Loss on early extinguishment of debt -1,032 0 0 0 0Other income (expense), net 268 383 -209 578 339

Income before income taxes 35,811 43,395 38,853 42,865 42,858Tax rate 31.1% 34.0% 34.0% 35.1% 34.4%

Provision for income taxes 11,135 14,754 13,210 15,067 14,746

Net income 24,676$ 28,641$ 25,643$ 27,798$ 28,112$

Earnings per common share:

Basic 1.54$ 1.73$ 1.52$ 1.67$ 1.67$Diluted 1.53$ 1.71$ 1.50$ 1.65$ 1.66$

Shares used in per share calculations:Basic 15,978 16,581 16,905 16,629 16,784Diluted 16,154 16,758 17,118 16,807 16,912


29/36


29 | P a g e

Income Statement 2007-2011 from S.E.C. Edgar Database

Fiscal Year Ended August 31 2007 2008 2009 2010 2011

Net sales 307,816$ 317,118$ 292,002$ 321,516$ 336,409$

Cost of products sold 158,954 168,848 147,469 156,210 168,297

Gross profit 148,862 148,270 144,533 165,306 168,112

Operating expenses:Selling, general and administrative 78,520 83,800 78,051 87,323 87,311Advertising and sales promotion 20,743 19,837 19,459 22,061 25,132Amortization of definite-lived intangible assets 583 597 468 724 1,537Impairment of indefinite-lived intangible assets 0 1,340 6,710 0 0

Total operating expenses 99,846 105,574 104,688 110,108 113,980

Income from operations 49,016 42,696 39,845 55,198 54,132

Interest income 0 0 428 174 228Interest expense -2,018 -1,679 -2,492 -1,726 -1,076Loss on early extinguishment of debt 0 0 0 0 0Other income (expense), net 177 982 543 -89 247

Income before income taxes 47,175 41,999 38,324 53,557 53,531Tax rate 33.2% 34.2% 31.4% 32.6% 31.9%

Provision for income taxes 15,641 14,377 12,037 17,462 17,098

Net income 31,534$ 27,622$ 26,287$ 36,095$ 36,433$

Earnings per common share:

Basic 1.85$ 1.66$ 1.59$ 2.17$ 2.16$Diluted 1.83$ 1.64$ 1.58$ 2.15$ 2.14$

Shares used in per share calculations:Basic 17,077 16,637 16,503 16,606 16,803Diluted 17,271 16,815 16,656 16,725 16,982


30/36


30 | P a g e

Dividend Discount Model (DDM)

2 0 1 1

2 0 1 0

2 0 0 9

2 0 0 8

2 0 0 7

2 0 0 6

2 0 0 5

2 0 0 4

2 0 0 3

2 0 0 2

2 0 0 1

5 - Y r G r o w t h

F C F

7 . 6 1

$

1 7 .2 6

$

1 2 .4 5

$

9 . 9 6

$

1 3 . 3 6

$

1 . 6 6

$

8 .2 8

$

7 .7 0

$

9 .7 2

$

1 2 . 0 6

$

2 . 0 8

$

3 5 . 6 6 %

C F

6 0 . 5 3

$

6 0 .2 6

$

4 5 . 0 1

$

4 8 .1 0

$

5 5 . 5 2

$

5 1 .7 5

$

5 1 . 5 6

$

4 8 . 8 3

$

5 2 .2 5

$

4 4 .7 4

$

3 7 . 5 0

$

3 .1 8 %

S a l e s

3 3 6 .4 1

$

3 2 1 . 5 2

$

2 9 2 . 0 0

$

3 1 7 .1 2

$

3 0 7 . 8 2

$

2 8 6 . 9 2

$

2 6 3 .2 3

$

2 4 2 .4 7

$

2 3 8 .1 4

$

2 1 6 .7 6

$

1 7 4 . 5 8

$

3 .2 3 %

R OE

1 7 . 6 %

1 9 . 6 %

1 6 . 0 %

1 6 . 6 %

1 9 . 5 %

1 9 .7 %

2 2 . 9 %

2 3 . 6 %

3 0 .4 %

3 5 .7 %

2 9 . 5 %

-

E a r n i n g s

2 .1 4

$

2 .1 5

$

1 . 5 8

$

1 . 6 9

$

1 . 8 3

$

1 . 6 6

$

1 . 6 5

$

1 . 5 0

$

1 .7 1

$

1 . 5 3

$

1 . 0 2

$

5 .2 1 %

D i v

1 . 0 8

$

1 . 0 2

$

1 . 0 0

$

1 . 0 0

$

1 . 0 0

$

0 . 8 8

$

0 . 8 6

$

0 . 8 0

$

0 . 8 0

$

0 . 9 4

$

0 . 9 4

$

4 .1 8 %

P o R

5 0 .4 7 %

4 7 .4 4 %

6 3 .2 9 %

5 9 .1 7 %

5 4 . 6 4 %

5 3 . 0 1 %

5 2 .1 2 %

5 3 . 3 3 %

4 6 .7 8 %

6 1 .4 4 %

9 2 .1 6 %

5 -Y e ar A v

er a g eP

oR

5 5 . 0 0 %

E P S B

a s e

4 2 .2 6

$

2 . 5 %

3 . 0 %

3 . 5 %

R f

2 . 0 7 %

k

6 .2 7 2 9 0 0 %

5 .2 1 %

3 6 . 7 6

$

4 0 . 9 6

$

4 6 . 6 8

$

B e t a

0 . 5 3

g

3 . 0 %

5 . 5 8 %

3 7 . 9 0

$

4 2 .2 6

$

4 8 .1 8

$

A v er a g e

E ( R M ) -

R f

7 . 9 3 %

E

2 .1 4

$

8 . 0 3 %

4 6 . 4 2

$

5 1 . 9 0

$

5 9 . 3 5

$

4 2 .1 2

$

E ( R M )

1 0 . 0 0 %

Mk t P x

4 3 .4 2

$

a s o f 1 1 / 7 / 1 1

c l o s e

E P

S Gr ow

t h

5 . 5 8 %

5 .2 1 %

D i v

V a l u e

8 . 0 3 %

1

1 .1 4

$

1 . 0 7

$

5 . 5 8 %

2

1 .2 0

$

1 . 0 7

$

3

1 .2 7

$

1 . 0 6

$

A s s u m p t i o n s :

4

1 . 3 4

$

1 . 0 5

$

t h a t i n t e r e s t r a t e s w i l l b e c o n s t a n t

5

1 .4 2

$

1 . 0 5

$

h a t d i v i d e n d s w i l l g r o w i n d e f i n i t e l y

6

1 . 5 0

$

1 . 0 4

$

t h a t WD

F C h a s a c o n s t a n t g r o w t h p a t t e r n

7

1 . 5 8

$

1 . 0 3

$

t h a t d i v i d e n d p a y m e n t s w i l l b e c o n s i s t e n t

8

1 . 6 7

$

1 . 0 2

$

9

1 .7 6

$

1 . 0 2

$

1 0

1 . 8 6

$

1 . 0 1

$

1 1

-

$

3 1 . 8 4

$

P x

4 2 .2 6

$

L T g

S T

g

H i s t or i c al Gr ow

t h

S u s t ai n a b l e Gr ow

t h

F or e c a s t e d Gr ow

t h


31/36


31 | P a g e

P/E Regression

R e g r e s s i o n S t a t i s t i c s

M u l t i p l e

R

0 . 7 1 0 2

R S q u a r e

0 . 5 0 4 4

A d j u s t e d R S q u a r e

- 0 .2 3 9 0

S t a n d a r d E r r o

r

2 .1 2 9 0

O b s e r v a t i o n s

6

A N O V A

d f

S S

M S

F

S i g n i f i c a n c e F

R e g r e s s i o n

3

9 .2 2 5 2

3 . 0 7 5 1

0 . 6 7 8 5

0 . 6 4 1 8

R e s i d u a l

2

9 . 0 6 5 0

4 . 5 3 2 5

T o t a l

5

1 8 .2 9 0 2

C o e f f i c i e n t s

S t a n d a r d E r r o r

t S t a t

P - v a l u e

L o w e r 9 5 %

U p p e r 9 5 %

L o w e r 9 5 . 0 %

U p p e r 9 5 . 0 %

I n t e r c e p t

7 6 . 0 0 0

9 7 . 7 0 0

0 . 7 7 8

0 . 5 1 8

- 3 4 4 . 3 7 0

4 9 6 . 3 7 0

- 3 4 4 . 3 7 0

4 9 6 . 3 7 0

G r o w t h

- 5 .2 5 5

1 0 . 0 6 8

- 0 . 5 2 2

0 . 6 5 4

- 4 8 . 5 7 4

3 8 . 0 6 3

- 4 8 . 5 7 4

3 8 . 0 6 3

B e t a

5 . 8 7 6

2 1 . 0 5 8

0 .2 7 9

0 . 8 0 6

- 8 4 . 7 2 9

9 6 . 4 8 0

- 8 4 . 7 2 9

9 6 . 4 8 0

P o R

- 0 .2 2 7

0 .2 6 1

- 0 . 8 7 2

0 . 4 7 5

-1 . 3 4 9

0 . 8 9 4

-1 . 3 4 9

0 . 8 9 4

E x p e c t

e d V

al u e

C o ef f i c i en t s

F a c t or

C om p on en t

I n t er c e p t

7 6 . 0 0

1 . 0 0

7 6 . 0 0

Gr ow

t h

- 5 .2 6

5 . 5 8

-2 9 . 3 2

B e t a

5 . 8 8

0 . 5 3

3 .1 1

P oR

- 0 .2 3

5 5 . 0 0

-1 2 . 5 0

E x

p.P / E

3 7 .2 9

E x p.V

al u e

8 0 .1 8

$

P

/ E I n d

3 8 . 8 3

P E

GI n d

3 3 . 6 4

$

P / E R e g r e s s i o n A s s u m p t i o n s

T h eE x p

e c t e d P / E w i l l b e 3 7 .2 9

E x p e c t e d V a l u e a t 8 0 .1 8


32/36


32 | P a g e

Calculation of the Weighted Average Cost of Capital (WACC)

Beta 0.6864

Risk-free rate 1.999%Market Risk Premium 5.5%Beta 0.6864Cost of Equity 5.77%

Cost of Debt 2005 2006 2007 2008 2009 2010 2011Long-term Debt 64,286 53,571 42,857 32,143 21,429 10,715 0Short-term Debt 10,714 10,714 10,714 10,714 10,714 10,714 10,715Total Debt 75,000 64,285 53,571 42,857 32,143 21,429 10,715

Interest Expense 2,018 1,679 2,492 1,726 1,076

3-Year Rolling Avg 3.14% 3.13% 5.81% 5.37% 5.02%Weight 4% 7% 12% 27% 50%

0.13% 0.22% 0.70% 1.45% 2.51%

Total Debt 21,429Total Equity 277167.3Total Value 298,596Tax Rate 32.96%WACC 5.60%

Linear Trend Function

CAPM

Weighted Average Cost of Debt

Weighted Average Cost of Capital

5.00%


33/36


33 | P a g e

Discounted Cash Flow Model

Actual Data

Forecasted Data

Ratios 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Sales Growth 9.9% 1.8% 8.6% 9.0% 7.3% 3.0% -7.9% 10.1% 4.6%Gross Margin 50.1% 51.3% 51.8% 49.2% 48.2% 48.4% 46.8% 49.5% 51.4% 50.0%SGA/Sales 23.4% 22.7% 24.0% 24.1% 25.0% 25.5% 26.4% 26.7% 27.2% 26.0%Operating Margin 26.7% 28.6% 27.7% 25.0% 23.2% 22.9% 20.3% 22.8% 24.3% 24.0%Capex/Sales 0.0% 2.7% 2.9% 3.2% 3.1% 2.9% 3.6% 3.7% 2.9% 2.5%

Finanacial StatementsSales 216,764.00$ 238,140.00$ 242,467.00$ 263,227.00$ 286,916.00$ 307,816.00$ 317,118.00$ 292,002.00$ 321,516.00$ 336,409.00$COGS 108,153.00$ 115,928.00$ 116,944.00$ 133,833.00$ 148,516.00$ 158,954.00$ 168,848.00$ 147,469.00$ 156,210.00$ 168,297.00$Gross Profit 108,611.00$ 122,212.00$ 125,523.00$ 129,394.00$ 138,400.00$ 148,862.00$ 148,270.00$ 144,533.00$ 165,306.00$ 168,112.00$SGA 50,718.00$ 54,061.00$ 58,311.00$ 63,529.00$ 71,767.00$ 78,520.00$ 83,800.00$ 78,051.00$ 87,323.00$ 87,311.00$Operating Income 42,366.00$ 49,752.00$ 45,449.00$ 47,420.00$ 46,022.00$ 49,016.00$ 42,696.00$ 39,845.00$ 55,198.00$ 54,132.00$Tax Rate 31.09% 34.00% 34.00% 35.15% 34.41% 33.16% 34.23% 31.41% 32.60% 31.94%

CAPEX 6,523.00$ 7,081.00$ 8,355.00$ 8,940.00$ 8,811.00$ 11,309.00$ 10,930.00$ 9,322.00$ 8,482.00$Working Capital -$ 27,888.00$ (8,894.00)$ 13,512.00$ 17,381.00$ 4,841.00$ (11,792.00)$ 7,641.00$ 18,025.00$ (1,661.00)$

Free Cash Flow -$ 54,201.66$ (13,866.64)$ 44,802.92$ 25,116.37$ 11,413.61$ 138.40$ 35,833.28$ 38,262.96$ 8,674.04$PV FactorPV-FCF

ACTUAL

Ratios 2012 2013 2014 2015 2016 TERMINAL 6 Year Historical Aver recasted AveragSales Growth 5.0% 7.0% 6.0% 5.0% 4.5% 4.5% Sales Growth 4.4% 5.5%Gross Margin 48.0% 48.0% 48.0% 48.0% 48.0% 48.0% Gross Margin 49.0% 48.0%SGA/Sales 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% SGA/Sales 26.1% 25.5%Operating Margin 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% Operating Margin 22.9% 20.0%Capex/Sales 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% CAPEX/Sales 3.1% 3.0%

Tax Rate 33.0% 33.0%Finanacial StatementsSales 353,229.45$ 377,955.51$ 400,632.84$ 420,664.48$ 439,594.39$ 459,376.13$COGS -$ -$ -$ -$ -$Gross Profit 169,550.14$ 181,418.65$ 192,303.76$ 201,918.95$ 211,005.31$ 220,500.54$SGA 90,073.51$ 96,378.66$ 102,161.37$ 107,269.44$ 112,096.57$ 117,140.91$Operating Income 70,645.89$ 75,591.10$ 80,126.57$ 84,132.90$ 87,918.88$ 91,875.23$Tax Rate 33.0% 33.0% 33.0% 33.0% 33.0% 33.0%

CAPEX 10,597$ 11,339$ 12,019$ 12,620$ 13,188$ 13,781$Working Capital (1,744.05)$ (1,866.13)$ (1,978.10)$ (2,077.01)$ (2,170.47)$ (2,268.14)$

Free Cash Flow 36,682.59$ 39,217.15$ 41,587.62$ 43,685.66$ 45,661.41$ 47,716.17$PV Factor 1.05 1.11 1.17 1.23 1.30 1.30PV-FCF 35,054.08$ 35,488.59$ 35,637.80$ 35,450.29$ 35,088.46$ 36,667.44$

FORCAST


34/36


34 | P a g e

DCF: Intrinsic Valuation Computation

Terminal FCF Rate 3.0%

Dsicount Rate 5.60%

Terminal FCF Value 1,834,900.10$Present Value 1,410,026.90$

ValuationSum of Discounted FCF's 176,719.21$P.V. of perpetuity 1,410,026.90$

Value of firm 1,586,746.11$Less: Market value debt 21,429.00$Plus: Value of Cash 56,393.00$

Private Market Value 1,621,710.11$Shares outstanding 16,803

Intrinsic Value 96.51$

Current Price 42.34$Return Prospects 127.95%


35/36


35 | P a g e

Industry Comparison

Company Name P/E Ratio Growth Beta PoR PEG Ratio EPS

PROCTER & GAMBLE CO. (THE) 15.92 9.3 0.47 50.94 1.71 3.94

COLGATE-PALMOLIVE CO. 17.56 9.7 0.46 43.90 1.81 4.98KIMBERLY-CLARK CORP. 16.65 8.9 0.38 64.94 1.87 4.19CLOROX CO. (THE) 18.56 8.8 0.41 66.82 2.11 3.47CHURCH & DWIGHT CO., INC. 21.37 9.6 0.38 32.05 2.23 2.01ENERGIZER HOLDINGS, INC. 18.60 12.5 1.38 0 1.49 3.72

Comparables Average 18.11 9.80 0.58 43.11 1.87 3.72

Comparables Median 18.06 9.45 0.44 47.42 1.84 3.83

WD-40 19.69 5.58 0.53 55.00 3.53 2.14

Company Name DY % Clos ing Px Ticker EV EBITDA EV / EBITDA

PROCTER & GAMBLE CO. (THE) 3.2 62.72$ PG 208,300,000,000$ 18,540,000,000$ 11.24COLGATE-PALMOLIVE CO. 2.5 87.45$ CL 47,460,000,000$ 4,290,000,000$ 11.06KIMBERLY-CLARK CORP. 3.9 69.77$ KMB 33,900,000,000$ 3,870,000,000$ 8.76CLOROX CO. (THE) 3.6 64.41$ CLX 10,990,000,000$ 1,070,000,000$ 10.27CHURCH & DWIGHT CO., INC. 1.5 42.95$ CHD 6,220,000,000$ 537,410,000$ 11.57ENERGIZER HOLDINGS, INC. 69.19$ ENR 6,810,000,000$ 698,470,000$ 9.75

Comparables Average 2.94 66.08$ - 52,280,000,000$ 4,834,313,333$ 10.44$

Comparables Median 3.20 66.80 - 22,445,000,000$ 2,470,000,000$ 10.67


36/36


SECTION IV: REFERENCES

1. Kaplan, J.H. (2011, September 30). WD-40 Company. Retrieved September 23, 2011, fromValueLine Investment Survey Online database.

2. Kwon, E. (2011, September 28). WD-40 Co . Standard & Poor's Stock Reports.Retrieved September 28, 2011, from Standard & Poors NetAdvantage database.

3. Standards for Consumer Products. 17 C.S.R. 94509 (2007). Retrieved fromhttp://www.arb.ca.gov/enf/title17_94509.pdf

4. The United States Patent and Trademark Office. (2011, September). USPTO Patent Full-Textand Image Database. Retrieved September 28, 2011, from

http://patft.uspto.gov/netacgi/nphParser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.htm&r=0&p=1&f=S&l=50&Query=an%2FWd-40&d=PTXT

5. WD-40 Company . (n.d.). Retrieved September 10, 2011, from Mergent Online database.

6. WD-40 Company. (2010). Annual Report. Retrieved September 23, 2011, fromhttp://www.envisionreports.com/WDFC/2010/11805OC10E/c28995e0fdab4d5a94fbc6b89a2b6045/WD-40_ARandNotice_10-25-10_Preflighted_SECURED.pdf

7. WD-40 Company. (2011). WD-40 Company Announces New Three-year Credit AgreementWith Bank of America [Press release]. Retrieved September 23, 2011, from

http://investor.wd40company.com/phoenix.zhtml?c=104082&p=irol-newsArticle&ID=1575224&highlight=

8. WD 40 Stock Report . (2011, December 10). Retrieved October 10, 2011, from S&P database.9. Yahoo! Finance. (2011 [A], November 23). WD-40 Company. (WDFC). Retrieved

November 23, 2011, from http://finance.yahoo.com/q/ae?s=WDFC+Analyst+Estimates

10. Yahoo! Finance. (2011 [B], December 12). WD-40 Company. (WDFC). RetrievedDecember 12, 2011, from http://finance.yahoo.com/q/co?s=WDFC

WD-40 Company Valuation- Final3

Documents

Transcript of WD-40 Company Valuation- Final3