Oil-Dri Announces Record High Fourth Quarter Earnings per Share and Strong Fiscal 2015 Results
CHICAGO, IL -- (Marketwired) -- 10/09/15 -- Oil-Dri Corporation of America (NYSE: ODC) today announced income for the fourth quarter of fiscal 2015 of $5,066,000, or $0.71 in diluted earnings per share, compared to net income of $466,000, or $0.07 in diluted earnings per share, in the prior year. Net sales in the quarter of $65,519,000 decreased by 1% compared to net sales of $66,045,000 in the prior year. Quarterly income was the highest ever, surpassing a record quarter in 2013 that was also positively impacted by an Alternative Minimum Tax (AMT) adjustment.
Net income for the fiscal year was $11,368,000, or $1.59 in diluted earnings per share, compared to net income of $8,356,000, or $1.17 in diluted earnings per share in the prior year, making 2015 the second best year in company history. Net sales in the 2015 fiscal year of $261,402,000 decreased 2% compared to net sales of $266,313,000 in the prior year.
In addition to benefiting from an improved gross profit margin, net income and earnings per share for both the quarter and the fiscal year were increased by the utilization of approximately $1,658,000 of domestic AMT attributes. This reduced the domestic AMT valuation allowance that had been established in prior years. As a result, the Company's federal income tax rate was 19.8% in fiscal 2015, compared to 26.3% in fiscal 2014. The tax rate is expected to return to historic levels in fiscal 2016.
BUSINESS REVIEW
President and Chief Executive Officer Daniel S. Jaffee said, "Results from the fourth quarter were a remarkable turnaround from the third quarter. Earnings per share, gross profit margin and cash generated from operations all increased. A combination of increased sales of our high margin value added products, and the continued downward pressure of energy costs and commodities in general, worked in our favor.
"Overall, we are extremely pleased with the income record we have set for the quarter, our strong year-end results, and 2015's tangible accomplishments:
- Cat's Pride Fresh & Light® represents 15% of the lightweight litter segment, and the lightweight litter category continues to grow and now represents 17.5% of the scoopable segment according to a third party market research company.
- We now supply or have commitments from over 20 major accounts for their private label lightweight products.
- Our Industrial products business delivered a very strong year and introduced Snow & Go™, a winter traction aid and ice melt product, nationally.
- Demand is high for our Verge® engineered granules.
- Changes were made within our senior management team, including my role. In order to ensure continued growth of our lightweight products, I have taken on direct management of our Consumer business. Succession planning has also paid off as various key managers retired and internal teammates filled their roles. Lastly, outside recruiting has enabled us to bring a fresh perspective to our manufacturing and operations.
| SEGMENT REVIEW | |||||||
| BUSINESS TO BUSINESS | |||||||
| Fourth Quarter Results | |||||||
| Three Month Period | |||||||
| May 1 - July 31 | Change | ||||||
| Fiscal 2015 | Fiscal 2014 | ||||||
| Net Sales | $23,777,000 | $22,637,000 | 5% | ||||
| Segment Income | $8,416,000 | $5,674,000 | 48% | ||||
| Fiscal Year Results | |||||||
| Twelve Month Period | |||||||
| August 1 - July 31 | Change | ||||||
| Fiscal 2015 | Fiscal 2014 | ||||||
| Net Sales | $92,326,000 | $94,286,000 | -2% | ||||
| Segment Income | $29,406,000 | $26,654,000 | 10% | ||||
Results of the Business to Business segment were driven by similar factors in both the fourth quarter and the fiscal year. For the fiscal year, sales of our animal health and nutrition products increased by approximately 18% and sales of our agricultural and horticultural products increased approximately 12% over fiscal 2014.
Net sales and units sold for fluid purification products were both down approximately 10% compared to fiscal year 2014. Sales in foreign markets were negatively impacted by the strength of the U.S. Dollar relative to various foreign currencies, which effectively increased the price of our product compared to foreign competitors' products. Additionally, sales were negatively impacted by natural variations in the quality and other characteristics of certain seed and bean crops.
Net sales of our co-packaged coarse cat litter decreased approximately 7% and reflect the continued decline in the coarse litter market.
| RETAIL AND WHOLESALE | |||||||
| Fourth Quarter Results | |||||||
| Three Month Period | |||||||
| May 1 - July 31 | Change | ||||||
| Fiscal 2015 | Fiscal 2014 | ||||||
| Net Sales | $41,742,000 | $43,408,000 | -4% | ||||
| Segment Income | $2,685,000 | $5,000 | Not Meaningful | ||||
| Fiscal Year Results | |||||||
| Twelve Month Period | |||||||
| August 1 - July 31 | Change | ||||||
| Fiscal 2015 | Fiscal 2014 | ||||||
| Net Sales | $169,076,000 | $172,027,000 | -2% | ||||
| Segment Income | $5,206,000 | $3,568,000 | 46% | ||||
Results of the Retail and Wholesale Products segment were also driven by similar factors in both the fourth quarter and fiscal year. Net sales of branded and generic floor absorbent increased approximately 7% over fiscal 2014 due primarily to increased volume. Private label cat litter sales increased approximately 10% compared to fiscal 2014, due in part to recently added customers of our new lightweight private label product.
A reduction of promotional and advertising spending during the fourth quarter contributed to a large increase of Segment Income in both periods.
Cat litter sales were down primarily due to our competitors' introduction of new products, which were accompanied by increased advertising and aggressive price discounts.
FINANCIAL REVIEW
Cash, cash equivalents, restricted cash and short-term investments at July 31, 2015, totaled $22,328,000 compared to $18,999,000 a year ago. Significant uses of cash in the current period included capital expenditures and regularly scheduled debt and dividend payments.
Cash provided by operating activities was $26,976,000 for the fiscal year, which was $10,680,000 higher than the $16,296,000 in fiscal 2014. Cash increased in the year due to income, non-cash items such as depreciation, and the management of working capital.
Capital expenditures for the fiscal year totaled $15,859,000 which was $3,865,000 more than depreciation and amortization of $11,994,000. By comparison, capital expenditures totaled $18,566,000 in fiscal 2014. Capital expenditures were made for new processing and packaging equipment as well as replacements for existing plant and equipment that has exceeded its useful life.
On June 11, 2015, Oil-Dri's Board of Directors declared quarterly cash dividends of $0.21 per share of outstanding Common Stock and $0.1575 per share of outstanding Class B Stock. The dividends were paid on September 4, 2015 to stockholders of record at the close of business on August 21, 2015. The Company has paid cash dividends continuously since 1974 and has increased dividends annually for the past twelve years. At the end of the fourth quarter, the annualized dividend yield on the Company's Common Stock was 3.2%, based on the closing stock price on July 31, 2015 of $26.26 per share and the latest quarterly cash dividend of $0.21 per share.
LOOKING FORWARD
President and Chief Executive Officer Daniel Jaffee continued, "Looking toward fiscal 2016, each segment of our business has started on a strong note and is contributing to our bottom line.
On the consumer side, our Fresh & Light lightweight cat litter brand is growing. According to a third party market research company, it is up 13% in the latest period reported. Throughout fiscal 2016, we plan to focus our energies on both our branded and private label lightweight offerings.
"In our Business to Business segment, our animal health business, Amlan International, will launch two new products that improve the intestinal health of livestock to achieve growth."
| FIVE-YEAR SUMMARY | |||||||||||||||
| Key Metrics as of July 31, | |||||||||||||||
| Fiscal 2015 | Fiscal 2014 | Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||||
| Cash, cash equivalents, restricted cash and short-term investments | $ | 22,328,000 | $ | 18,999,000 | $ | 42,494,000 | $ | 36,256,000 | $ | 33,722,000 | |||||
| Net cash provided by operations | $ | 26,976,000 | $ | 16,296,000 | $ | 23,366,000 | $ | 23,339,000 | $ | 13,108,000 | |||||
| Cash, cash equivalents, restricted cash and short-term investments less notes payable | $ | 3,428,000 | $ | (3,401,000 | ) | $ | 16,594,000 | $ | 6,556,000 | $ | 422,000 | ||||
| Net Income | $ | 11,368,000 | $ | 8,356,000 | $ | 14,586,000 | $ | 6,098,000 | $ | 9,051,000 | |||||
| Net income per diluted share | $ | 1.59 | $ | 1.17 | $ | 2.07 | $ | 0.85 | $ | 1.26 | |||||
| Return on average stockholders' equity | 10.6% | 8.1% | 15.5% | 6.8% | 9.7% | ||||||||||
| Capital expenditures | $ | 15,859,000 | $ | 18,566,000 | $ | 9,795,000 | $ | 6,960,000 | $ | 13,806,000 | |||||
| Dividends paid | $ | 5,247,000 | $ | 4,965,000 | $ | 4,630,000 | $ | 4,486,000 | $ | 4,218,000 | |||||
| Dividends paid per Common Stock share | $ | 0.80 | $ | 0.76 | $ | 0.72 | $ | 0.68 | $ | 0.64 | |||||
Oil-Dri Corporation of America is a leading supplier of specialty sorbent products for agricultural, horticultural, fluids purification, specialty, industrial and automotive markets and is a leading manufacturer of cat litter.
The Company will offer a live webcast of the fourth quarter earnings teleconference on Tuesday, October 13, 2015 from 10:00 am to 10:30 am, Central Time. To listen via the web, visit www.streetevents.com or www.oildri.com. An archived recording of the call and written transcripts of all teleconferences are posted on the Oil-Dri website.
"Oil-Dri," "Cat's Pride," "Fresh & Light" and "Verge" are a registered trademarks of Oil-Dri Corporation of America. "Snow & Go" 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," 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.
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||
| (in thousands, except for per share amounts) | ||||||||||||||
| (unaudited) | ||||||||||||||
| Fourth Quarter Ended July 31 | ||||||||||||||
| 2015 | % of Sales | 2014 | % of Sales | |||||||||||
| Net Sales | $ | 65,519 | 100.0 | % | $ | 66,045 | 100.0 | % | ||||||
| Cost of Sales | (48,797 | ) | 74.5 | % | (53,672 | ) | 81.3 | % | ||||||
| Gross Profit | 16,722 | 25.5 | % | 12,373 | 18.7 | % | ||||||||
| Operating Expenses | (10,919 | ) | 16.7 | % | (11,021 | ) | 16.7 | % | ||||||
| Operating Income | 5,803 | 8.9 | % | 1,352 | 2.0 | % | ||||||||
| Interest Expense | (309 | ) | 0.5 | % | (383 | ) | 0.6 | % | ||||||
| Other Income | 22 | -- | % | 82 | 0.1 | % | ||||||||
| Income Before Income Taxes | 5,516 | 8.4 | % | 1,051 | 1.6 | % | ||||||||
| Income Taxes | (450 | ) | 0.7 | % | (585 | ) | 0.9 | % | ||||||
| Net Income | $ | 5,066 | 7.7 | % | $ | 466 | 0.7 | % | ||||||
| Net Income Per Share: | ||||||||||||||
| Basic Common | $ | 0.77 | $ | 0.07 | ||||||||||
| Basic Class B Common | $ | 0.58 | $ | 0.05 | ||||||||||
| Diluted | $ | 0.71 | $ | 0.07 | ||||||||||
| Average Shares Outstanding: | ||||||||||||||
| Basic Common | 4,963 | 5,002 | ||||||||||||
| Basic Class B Common | 2,023 | 2,002 | ||||||||||||
| Diluted | 7,050 | 7,022 | ||||||||||||
| Twelve Months Ended July 31 | ||||||||||||||
| 2015 | % of Sales | 2014 | % of Sales | |||||||||||
| Net Sales | $ | 261,402 | 100.0 | % | $ | 266,313 | 100.0 | % | ||||||
| Cost of Sales | (201,245 | ) | 77.0 | % | (206,663 | ) | 77.6 | % | ||||||
| Gross Profit | 60,157 | 23.0 | % | 59,650 | 22.4 | % | ||||||||
| Operating Expenses | (45,004 | ) | 17.2 | % | (47,232 | ) | 17.7 | % | ||||||
| Operating Income | 15,153 | 5.8 | % | 12,418 | 4.7 | % | ||||||||
| Interest Expense | (1,327 | ) | 0.5 | % | (1,569 | ) | 0.6 | % | ||||||
| Other Income | 343 | 0.1 | % | 488 | 0.2 | % | ||||||||
| Income Before Income Taxes | 14,169 | 5.4 | % | 11,337 | 4.3 | % | ||||||||
| Income Taxes | (2,801 | ) | 1.1 | % | (2,981 | ) | 1.1 | % | ||||||
| Net Income | $ | 11,368 | 4.3 | % | $ | 8,356 | 3.1 | % | ||||||
| Net Income Per Share: | ||||||||||||||
| Basic Common | $ | 1.73 | $ | 1.27 | ||||||||||
| Basic Class B Common | $ | 1.30 | $ | 0.96 | ||||||||||
| Diluted | $ | 1.59 | $ | 1.17 | ||||||||||
| Average Shares Outstanding: | ||||||||||||||
| Basic Common | 4,955 | 4,981 | ||||||||||||
| Basic Class B Common | 2,019 | 2,001 | ||||||||||||
| Diluted | 7,037 | 7,004 | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (in thousands, except for per share amounts) | ||||||||||
| (unaudited) | ||||||||||
| As of July 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Current Assets | ||||||||||
| Cash and Cash Equivalents | $ | 20,138 | $ | 16,230 | ||||||
| Restricted Cash | -- | 129 | ||||||||
| Short-term Investments | 2,190 | 2,640 | ||||||||
| Accounts Receivable, Net | 31,466 | 30,997 | ||||||||
| Inventories | 21,369 | 24,483 | ||||||||
| Prepaid Expenses | 7,480 | 9,037 | ||||||||
| Total Current Assets | 82,643 | 83,516 | ||||||||
| Property, Plant and Equipment, Net | 79,655 | 74,896 | ||||||||
| Other Assets | 27,733 | 27,792 | ||||||||
| Total Assets | $ | 190,031 | $ | 186,204 | ||||||
| Current Liabilities | ||||||||||
| Current Maturities of Notes Payable | $ | 3,483 | $ | 3,500 | ||||||
| Accounts Payable | 7,428 | 7,352 | ||||||||
| Dividends Payable | 1,376 | 1,311 | ||||||||
| Accrued Expenses | 16,601 | 17,337 | ||||||||
| Total Current Liabilities | 28,888 | 29,500 | ||||||||
| Noncurrent Liabilities | ||||||||||
| Notes Payable | 15,417 | 18,900 | ||||||||
| Other Noncurrent Liabilities | 35,198 | 33,496 | ||||||||
| Total Noncurrent Liabilities | 50,615 | 52,396 | ||||||||
| Stockholders' Equity | 110,528 | 104,308 | ||||||||
| Total Liabilities and Stockholders' Equity | $ | 190,031 | $ | 186,204 | ||||||
| Book Value Per Share Outstanding | $ | 15.85 | $ | 14.94 | ||||||
| Acquisitions of: | ||||||||||
| Property, Plant and Equipment | Fourth Quarter | $ | 1,914 | $ | 5,275 | |||||
| Year To Date | $ | 15,859 | $ | 18,566 | ||||||
| Depreciation and Amortization Charges | Fourth Quarter | $ | 3,039 | $ | 2,789 | |||||
| Year To Date | $ | 11,994 | $ | 10,396 | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (in thousands) | ||||||||||
| (unaudited) | ||||||||||
| For the Twelve Months Ended | ||||||||||
| July 31 | ||||||||||
| 2015 | 2014 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
| Net Income | $ | 11,368 | $ | 8,356 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition: | ||||||||||
| Depreciation and Amortization | 11,994 | 10,396 | ||||||||
| (Increase) Decrease in Accounts Receivable | (646 | ) | 82 | |||||||
| Decrease (Increase) in Inventories | 3,114 | (2,966 | ) | |||||||
| Increase in Accounts Payable | 571 | 187 | ||||||||
| Decrease in Accrued Expenses | (697 | ) | (2,586 | ) | ||||||
| Increase in Pension and Postretirement Benefits | 814 | 2,887 | ||||||||
| Other | 458 | (60 | ) | |||||||
| Total Adjustments | 15,608 | 7,940 | ||||||||
| Net Cash Provided by Operating Activities | 26,976 | 16,296 | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
| Capital Expenditures | (15,859 | ) | (18,566 | ) | ||||||
| Acquisition of Business | -- | (12,876 | ) | |||||||
| Restricted Cash | 129 | (129 | ) | |||||||
| Net Dispositions of Investment Securities | 451 | 15,821 | ||||||||
| Other | 1,033 | 180 | ||||||||
| Net Cash Used in Investing Activities | (14,246 | ) | (15,570 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
| Principal Payments on Long-Term Debt | (3,500 | ) | (3,500 | ) | ||||||
| Dividends Paid | (5,247 | ) | (4,965 | ) | ||||||
| Purchase of Treasury Stock | (122 | ) | (87 | ) | ||||||
| Other | 126 | 180 | ||||||||
| Net Cash Used in Financing Activities | (8,743 | ) | (8,372 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (79 | ) | (159 | ) | ||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | 3,908 | (7,805 | ) | |||||||
| Cash and Cash Equivalents, Beginning of Period | 16,230 | 24,035 | ||||||||
| Cash and Cash Equivalents, End of Period | $ | 20,138 | $ | 16,230 | ||||||
Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
reagan.culbertson@oildri.com
(312) 706 3256
Source: Oil-Dri Corporation of America