EX-99.1 2 odcf19q38kexh991.htm EXHIBIT 99.1 Exhibit

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410 N. Michigan Ave. Chicago, Illinois 60611, U.S.A

News Announcement
For Immediate Release
 
Exhibit 99.1
Oil-Dri Announces Third Quarter and First Nine-Months of Fiscal 2019 Results

CHICAGO-(June 7, 2019)-Oil-Dri Corporation of America (NYSE: ODC), producer and marketer of sorbent mineral products, today announced results for its third quarter and first nine-months of fiscal 2019.
 
Third Quarter
Year to Date
 
Ended April 30
Ended April 30
 
 
 
 
 
 
 
 
F19
F18
Change
F19
F18
Change
Consolidated Results
 
 
 
 
 
 
Net Sales
$70,885,000
$64,847,000
9%
$206,908,000
$200,387,000
3%
Net Income Attributable to Oil-Dri
$5,619,000
$3,585,000
57%
$8,812,000
$5,539,000
59%
Earnings per Diluted Share
$0.74
$0.48
54%
$1.17
$0.75
56%
Business to Business
 
 
 
 
 
 
Net Sales
$26,041,000
$24,784,000
5%
$77,825,000
$79,226,000
(2)%
Segment Operating Income
$7,454,000
$7,556,000
(1)%
$21,758,000
$26,191,000
(17)%
Retail and Wholesale
 
 
 
 
 
 
Net Sales
$44,844,000
$40,063,000
12%
$129,083,000
$121,161,000
7%
Segment Operating Income
$4,161,000
$2,223,000
87%
$6,823,000
$7,010,000
(3)%

Daniel S. Jaffee, President and CEO, stated, “Our third quarter results demonstrate progress in executing our long-term growth strategies. I am pleased with the strong revenue momentum in our Retail & Wholesale Group and the gains in our Business to Business Group. Although we continue to experience challenges caused by market conditions and increased costs, we remain focused on improving operational efficiencies and continue to lay the groundwork to capture the full value of our investments.

The Business to Business Group experienced an increase in sales of 5% in the third quarter over the prior year, led by a 13% gain of fluid purification products, mainly in our North American and Latin American markets. Other revenue increases were due to growth of engineered granules within the Agricultural sector, and coarse cat litter in the Co-Packaging division. Sales of our animal health and nutrition products declined 27% in the quarter versus the prior year. Our business in Asia, including our subsidiary in China, continues to be negatively impacted by the African Swine Fever.


 
Leslie A. Garber
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515


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Operating Income in the Business to Business sector was down 1% in the third quarter versus the prior year. Despite modest sales gains and a 12% reduction in SG&A expenses, higher manufacturing, freight and packaging costs continued to erode margins.

In the third quarter of fiscal 2019, sales in the Retail & Wholesale Group increased by 12% over the prior year. Total cat litter sales increased 15%, driven by strong demand for our Cat’s Pride Scoopable branded litter at many of our large-scale retail accounts. Both scoopable and coarse private label litter revenue rose as well, due to organic growth and the addition of several new customers. According to third-party market research data for retail sales1, our combined branded and private label unit share of the overall cat litter segment continued to climb to 15.3%, compared to 13.3% in the same period of 2018.

Operating Income in the Retail & Wholesale segment for the third quarter increased 87% over the same period last year. Increased revenues and a $2 million reduction in advertising expenses offset higher manufacturing, freight and packaging costs. To counteract ongoing cost pressures, we increased our prices on all cat litter products, effective May 1st. We expect to see the effect of this change in pricing with improved margins in our fiscal fourth quarter.

The Retail & Wholesale group continues to strategically allocate advertising dollars to enhance product sales. In addition to our ongoing digital media plan, we are improving the efficiency of promotional spending by targeting regional markets. With the recent launch of our new packaging design in May, all branded cat litter products will bear the newly designed Cat’s Pride logo. This change will provide more visual consistency throughout our product line.

Overall, I feel that we delivered solid third quarter results. I am optimistic about the future of Oil-Dri and our ability to drive enhanced returns for our shareholders.”


###
While Oil-Dri’s founding product was granular clay floor absorbents, it has since greatly diversified its portfolio. The Company’s mission to “Create Value from Sorbent Minerals” is supported by its wide array of consumer and business to business product offerings. In 2016, Oil-Dri celebrated its seventy-fifth year of business and looks forward to the next milestone.

The Company will host its third quarter teleconference on Monday, June 10, 2019 at 10:00am Central Time. Participation details are available on our website’s Events page.

2
 
Leslie A. Garber
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515


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1Based in part on data reported by Nielsen through its Nielsen Answers Core Service for the Pet Care Category for the 12 week period ended April 20, 2019, for the U.S. market. Copyright © 2019 Nielsen.

“Oil-Dri”, and “Cat’s Pride” are registered trademarks of Oil-Dri Corporation of America.

Certain statements in this press release may contain forward-looking statements that are based on our current expectations, estimates, forecasts and projections about our future performance, our business, our beliefs, and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in other press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls, and conference calls. Words such as “expect,” “outlook,” “forecast,” “would,” “could,” “should,” “project,” “intend,” “plan,” “continue,” “believe,” “seek,” “estimate,” “anticipate,” “may,” “assume,” or variations of such words and similar expressions are intended to identify such forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Such statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially including, but not limited to, the dependence of our future growth and financial performance on successful new product introductions, intense competition in our markets, volatility of our quarterly results, risks associated with acquisitions, our dependence on a limited number of customers for a large portion of our net sales and other risks, uncertainties and assumptions that are described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission. Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, intended, expected, believed, estimated, projected or planned. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except to the extent required by law, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this press release, whether as a result of new information, future events, changes in assumptions, or otherwise.





3
 
Leslie A. Garber
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515


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CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
(unaudited)
Third Quarter Ended April 30
(in thousands, except per share amounts)

2019
 
% of Sales
 
2018
 
% of Sales
Net Sales
$
70,885

 
100.0
 %
 
$
64,847

 
100.0
 %
Cost of Sales (1)
(54,051
)
 
(76.3
)%
 
(47,187
)
 
(72.8
)%
Gross Profit
16,834

 
23.7
 %
 
17,660

 
27.2
 %
Selling, General and Administrative Expenses (1)
(14,507
)
 
(20.5
)%
 
(14,366
)
 
(22.2
)%
Operating Income
2,327

 
3.3
 %
 
3,294

 
5.1
 %
Interest Expense
(141
)
 
(0.2
)%
 
(149
)
 
(0.2
)%
Other Income (1) (2)
4,518

 
6.4
 %
 
150

 
0.2
 %
Income Before Income Taxes
6,704

 
9.5
 %
 
3,295

 
5.1
 %
Income Tax (Expense) Benefit
(1,143
)
 
(1.6
)%
 
290

 
0.4
 %
Net Income
5,561

 
7.8
 %
 
3,585

 
5.5
 %
Net Loss Attributable to Noncontrolling Interest
(58
)
 
—

 
—

 
—

Net Income Attributable to Oil-Dri
$
5,619

 
7.9
 %
 
$
3,585

 
5.5
 %
Net Income Per Share: Basic Common
$
0.81

 
 
 
$
0.53

 
 
                                       Basic Class B Common
$
0.61

 
 
 
$
0.40

 
 
                                       Diluted Common
$
0.74

 
 
 
$
0.48

 
 
Avg Shares Outstanding: Basic Common
5,126

 
 
 
5,037

 
 
                                       Basic Class B Common
2,068

 
 
 
2,102

 
 
                                       Diluted Common
7,253

 
 
 
7,222

 
 
 
Nine Months Ended April 30
 
2019
 
% of Sales
 
2018
 
% of Sales
Net Sales
$
206,908

 
100.0
 %
 
$
200,387

 
100.0
 %
Cost of Sales (1)
(158,660
)
 
(76.7
)%
 
(144,095
)
 
(71.9
)%
Gross Profit
48,248

 
23.3
 %
 
56,292

 
28.1
 %
Selling, General and Administrative Expenses (1)
(42,091
)
 
(20.3
)%
 
(43,600
)
 
(21.8
)%
Operating Income
6,157

 
3.0
 %
 
12,692

 
6.3
 %
Interest Expense
(434
)
 
(0.2
)%
 
(549
)
 
(0.3
)%
Other Income (1)(2)
4,653

 
2.2
 %
 
62

 
—
 %
Income Before Income Taxes
10,376

 
5.0
 %
 
12,205

 
6.1
 %
Income Tax Expense
(1,599
)
 
(0.8
)%
 
(6,666
)
 
(3.3
)%
Net Income
8,777

 
4.2
 %
 
5,539

 
2.8
 %
Net Loss Attributable to Noncontrolling Interest
(35
)
 
—
 %
 
—

 
—
 %
Net Income Attributable to Oil-Dri
$
8,812

 
4.3
 %
 
$
5,539

 
2.8
 %
Net Income Per Share: Basic Common
$
1.27

 
 
 
$
0.82

 
 
                                       Basic Class B Common
$
0.95

 
 
 
$
0.62

 
 
                                       Diluted Common
$
1.17

 
 
 
$
0.75

 
 
Avg Shares Outstanding: Basic Common
5,108

 
 
 
5,032

 
 
                                       Basic Class B Common
2,068

 
 
 
2,099

 
 
                                       Diluted Common
7,245

 
 
 
7,217

 
 
(1) Prior year amounts have been retrospectively adjusted to conform to the current year presentation of the non-service cost components of net periodic benefit cost required by new guidance under Accounting Standards Codification (“ASC”) 715, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.
(2) For further information about amounts included in this line item, please refer to Note 7 of the Notes to Condensed Consolidated Financial Statements in our Quarterly Report on Form 10-Q for the period ended April 30, 2019.

4
 
Leslie A. Garber
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515


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CONSOLIDATED BALANCE SHEETS
 
 
 
 
(in thousands, except per share amounts)
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
As of April 30
 
 
2019
 
2018
Current Assets
 
 
 
 
Cash and Cash Equivalents
 
$
16,224

 
$
10,613

Short-term Investments
 
730

 
14,297

Accounts Receivable, Net
 
35,906

 
32,566

Inventories
 
26,738

 
23,415

Prepaid Expenses
 
7,210

 
6,241

Total Current Assets
 
86,808

 
87,132

Property, Plant and Equipment, Net
 
87,086

 
84,807

Other Assets
 
24,584

 
26,071

Total Assets
 
$
198,478

 
$
198,010

 
 
 
 
 
Current Liabilities
 
 
 
 
Current Maturities of Notes Payable
 
$
3,083

 
$
3,083

Short-term borrowing
 
0

 
6,000

Accounts Payable
 
8,608

 
7,747

Dividends Payable
 
1,689

 
1,559

Accrued Expenses
 
18,121

 
17,330

Total Current Liabilities
 
31,501

 
35,719

Noncurrent Liabilities
 
 
 
 
Notes Payable
 
3,045

 
6,099

Other Noncurrent Liabilities
 
26,417

 
27,179

Total Noncurrent Liabilities
 
29,462

 
33,278

Stockholders' Equity
 
137,515

 
129,013

Total Liabilities and Stockholders' Equity
 
$
198,478

 
$
198,010

 
 
 
 
 
Book Value Per Share Outstanding
 
$
19.16

 
$
18.09

 
 
 
 
 
Acquisitions of:
 
 
 
 
Property, Plant and Equipment
Third Quarter
$
3,963

 
$
3,683

 
Year To Date
$
10,162

 
$
10,533

Depreciation and Amortization Charges
Third Quarter
$
3,310

 
$
3,164

 
Year To Date
$
9,849

 
$
9,577





5
 
Leslie A. Garber
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515


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CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
 
(in thousands)
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
For the Nine Months Ended
 
April 30
 
2019
 
2018
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
Net Income
$
8,777

 
$
5,539

Adjustments to reconcile net income to net cash
 
 
 
provided by operating activities:
 
 
 
Depreciation and Amortization
9,849

 
9,577

(Increase) Decrease in Accounts Receivable
(2,185
)
 
35

Increase in Inventories
(4,248
)
 
(783
)
Increase (Decrease) in Accounts Payable
2,873

 
(888
)
Decrease in Accrued Expenses
(1,762
)
 
(1,198
)
Increase (Decrease) in Pension and Postretirement Benefits
1,287

 
(11,223
)
Other
773

 
1,730

Total Adjustments
6,587

 
(2,750
)
Net Cash Provided by Operating Activities
15,364

 
2,789

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
Capital Expenditures
(10,162
)
 
(10,533
)
Net Dispositions of Investment Securities
6,404

 
9,375

Other
—

 
1,766

Net Cash (Used in) Provided by Investing Activities
(3,758
)
 
608

 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
Principal Payments on Long-Term Debt
(3,083
)
 
(3,083
)
Dividends Paid
(4,967
)
 
(4,671
)
Purchase of Treasury Stock
(141
)
 
(27
)
Proceeds from short-term borrowing
—

 
6,000

Net Cash Used in Financing Activities
(8,191
)
 
(1,781
)
 
 
 
 
Effect of exchange rate changes on Cash and Cash Equivalents
52

 
(98
)
 
 
 
 
Net Increase in Cash and Cash Equivalents
3,467

 
1,518

Cash and Cash Equivalents, Beginning of Period
12,757

 
9,095

Cash and Cash Equivalents, End of Period
$
16,224

 
$
10,613



6
 
Leslie A. Garber
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515