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Oil-Dri Announces Second Quarter and Year to Date Fiscal 2018 Results

Company Release - 3/9/2018 4:06 PM ET

CHICAGO, March 09, 2018 (GLOBE NEWSWIRE) -- Oil-Dri Corporation of America (NYSE:ODC), producer and marketer of sorbent mineral products, announced today its second quarter and six-month earnings of fiscal 2018.

 Second QuarterYear to Date
 Ended January 31, 2018Ended January 31, 2018
Consolidated Results      
Net Sales$68,894,000 $65,174,0006%$135,540,000$131,786,0003%
Net Income$(1,096,000)$4,250,000N/A$1,954,000$6,259,000-69%
Earnings per Diluted Share$(0.15)$0.58N/A$0.26$0.86-70%
Business to Business      
Net Sales$27,355,000 $23,261,00018%$54,442,000$50,734,0007%
Segment Operating Income$9,759,000 $7,815,00025%$18,635,000$17,223,0008%
Retail and Wholesale      
Net Sales$41,539,000 $41,913,000-1%$81,098,000$81,052,000Flat
Segment Operating Income$2,422,000 $4,987,000-51%$4,787,000$4,480,0007%

Daniel S. Jaffee stated, “With the recent passing of my father, the Board of Directors has appointed me as Chairman. I am humbled and honored to assume the role and to continue growing Oil-Dri in my father and grandfather’s legacy.

With respect to financial results, our strategy to focus on value-added products continued to demonstrate success. Year to date sales were an all-time record for the first six months of a fiscal year.

The reduction in net income detailed above was significantly impacted by a one-time $5,091,000 tax expense adjustment to reflect the impact on deferred income tax assets under the 2017 Tax Cut and Jobs Act. The tax expense adjustment effectively reduced diluted net income per share by $0.69 for the first six months of fiscal 2018.

We saw strong performances by all business to business products and private label cat litter. Sales of our granules used for agricultural carrier applications increased approximately 50% during the quarter. Sales of our Amlan animal health products increased, specifically in Latin America. Fluids purification products sold to edible oil, petroleum and biodiesel producers also increased in the quarter.

We launched the Cat’s Pride Litter for Good campaign late in the quarter and are excited about the traction gained so far. Now, with every purchase of a Cat’s Pride Fresh & Light jug, we will be donating a pound of litter to shelters across America. To date, we have increased our Cat’s Pride Club membership exponentially, received thousands of shelter nominations and promised 435,178 pounds of litter donations all helping to reach our goal of donating five million pounds of litter in 2018.

For more details on our financial results and tax adjustment, please review the Form 10-Q that was filed today and join us for our next earnings teleconference on March 12th. Call details are available on our website’s ‘Events’ page.”

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 second quarter fiscal 2018 earnings teleconference on Monday, March 12, 2018 and its third quarter teleconference on Monday, June 11, 2018. Both teleconferences will commence at 10:00 am, Central Time. Dial-in details will be communicated via web alert approximately one week prior to the calls.

“Oil-Dri”, “Amlan”, “Cats Pride” and “Fresh & Light” are registered trademarks of Oil-Dri Corporation of America.“ Litter for Good” is a trademark 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.

(in thousands, except per share amounts)      
 Second Quarter Ended January 31
 2018 % of Sales 2017 % of Sales
Net Sales$68,894  100.0% $65,174  100.0%
Cost of Sales(49,254) (71.5)% (46,049) (70.7)%
Gross Profit19,640  28.5% 19,125  29.3%
Selling, General and Administrative Expenses(14,883) (21.6)% (13,538) (20.7)%
Operating Income4,757  6.9% 5,587  8.6%
Interest Expense(199) (0.3)% (238) (0.4)%
Other Income (Loss)513  0.8% (105) (0.2)%
Income Before Income Taxes5,071  7.4% 5,244  8.0%
Income Tax Expense(6,167) (9.0)% (994) (1.5)%
Net (Loss) Income$(1,096) (1.6)% $4,250  6.5%
Net (Loss) Income Per Share:       
Basic Common$(0.17)   $0.63   
Basic Class B Common$(0.12)   $0.47   
Diluted Common$(0.15)   $0.58   
Average Shares Outstanding:       
Basic Common5,035    5,019   
Basic Class B Common2,104    2,088   
Diluted Common7,139    7,155   
 Six Months Ended January 31
 2018 % of Sales 2017 % of Sales
Net Sales$135,540  100.0% $131,786  100.0%
Cost of Sales(96,931) (71.5)% (91,936) (69.8)%
Gross Profit38,609  28.5% 39,850  30.2%
Selling, General and Administrative Expenses(29,936) (22.1)% (31,217) (23.6)%
Operating Income8,673  6.4% 8,633  6.6%
Interest Expense(400) (0.3)% (489) (0.4)%
Other Income (Loss)637  0.5% (221) (0.2)%
Income Before Income Taxes8,910  6.6% 7,923  6.0%
Income Tax Expense(6,956) (5.1)% (1,664) (1.3)%
Net Income$1,954  1.5% $6,259  4.7%
Net Income Per Share:       
Basic Common$0.29    $0.93   
Basic Class B Common$0.22    $0.70   
Diluted Common$0.26    $0.86   
Average Shares Outstanding:       
Basic Common5,030    5,011   
Basic Class B Common2,097    2,077   
Diluted Common7,215    7,145   


(in thousands, except per share amounts)    
  As of January 31
  2018 2017
Current Assets    
Cash and Cash Equivalents $9,381  $17,560 
Short-term Investments 21,894  7,358 
Accounts Receivable, Net 32,309  32,047 
Inventories 22,603  23,217 
Prepaid Expenses (1) 7,967  12,596 
Total Current Assets 94,154  92,778 
Property, Plant and Equipment, Net 84,289  81,498 
Other Assets (1) 27,092  32,298 
Total Assets $205,535  $206,574 
Current Liabilities    
Current Maturities of Notes Payable $3,083  $3,083 
Accounts Payable 8,089  7,316 
Dividends Payable 1,559  1,485 
Accrued Expenses 20,603  17,614 
Total Current Liabilities 33,334  29,498 
Noncurrent Liabilities    
Notes Payable 6,092  9,147 
Other Noncurrent Liabilities 39,847  47,424 
Total Noncurrent Liabilities 45,939  56,571 
Stockholders' Equity 126,262  120,505 
Total Liabilities and Stockholders' Equity $205,535  $206,574 
Book Value Per Share Outstanding $17.72  $17.00 
Acquisitions of:    
Property, Plant and EquipmentSecond Quarter$2,805  $2,984 
 Year To Date$6,850  $7,279 
Depreciation and Amortization ChargesSecond Quarter$3,221  $3,230 
 Year To Date$6,413  $6,389 

(1)Prior year amounts have been retrospectively adjusted to conform to the current year presentation of current deferred income taxes required by new guidance under Accounting Standards Codification (“ASC”) 740, Balance Sheet Classification of Deferred Taxes.

(in thousands)   
 For the Six Months Ended
 January 31
 2018 2017
Net Income$1,954  $6,259 
Adjustments to reconcile net income to net cash   
provided by operating activities, net of acquisition:   
Depreciation and Amortization6,413  6,389 
Decrease (Increase) in Accounts Receivable362  (1,829)
Decrease in Inventories75  11 
(Decrease) Increase  in Accounts Payable(743) 852 
Decrease in Accrued Expenses(3,637) (1,698)
Increase in Pension and Postretirement Benefits649  1,001 
Other (2)6,556  (1,892)
Total Adjustments9,675  2,834 
Net Cash Provided by Operating Activities11,629  9,093 
Capital Expenditures(6,850) (7,279)
Net Purchase of Investment Securities1,739  2,831 
Other11  2 
Net Cash Used in Investing Activities(5,100) (4,446)
Principal Payments on Long-Term Debt(3,083) (3,083)
Dividends Paid(3,112) (2,956)
Purchase of Treasury Stock(27) (122)
Other  377 
Net Cash Used in Financing Activities(6,222) (5,784)
Effect of exchange rate changes on cash and cash equivalents(21) 68 
Net Increase (Decrease) in Cash and Cash Equivalents286  (1,069)
Cash and Cash Equivalents, Beginning of Period9,095  18,629 
Cash and Cash Equivalents, End of Period$9,381  $17,560 

(2) Includes a $5,091 one-time adjustment to deferred tax assets required upon enactment of the 2017 Tax Cut and Jobs Act.

Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
(312) 321-1515

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Source: Oil-Dri Corporation Of America
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