Release Details

Oil-Dri Announces Results for Second Quarter and First Six-Months of Fiscal 2015

March 10, 2015

CHICAGO, IL -- (Marketwired) -- 03/10/15 -- Oil-Dri Corporation of America (NYSE: ODC) today announced net sales of $64,643,000 for the second quarter ended January 31, 2015, a 7% decrease compared with net sales of $69,305,000 in the same quarter one year ago. Net income for the second quarter was $2,797,000, or $0.39 per diluted share, down from $4,281,000, or $0.60 per diluted share, in the second quarter of fiscal 2014.

Net sales for the six-month period were $130,687,000, a 2% decrease compared with net sales of $132,851,000 in the same period one year ago. Net income for the six-month period was $4,917,000, or $0.69 per diluted share, down from net income of $7,168,000 or $1.01 per diluted share, in the same period of fiscal 2014.


President and Chief Executive Officer Daniel S. Jaffee said, "Results for the second quarter and first half of fiscal 2015 are down compared to the strong sales and income of the same periods in fiscal 2014 but were better than the results of the fourth quarter of fiscal 2014 and the first quarter of fiscal 2015. New product start-up costs and intense competition in the branded cat litter market impacted the Retail and Wholesale segment results. This was partially offset by a strong year over year performance in industrial absorbent products, which are also included in the Retail and Wholesale segment.

"The trend in the cat litter category toward lightweight scoopable litter continued. All of our major branded competitors have developed lightweight products and supported their launches of these products with increased promotional and marketing activity along with price incentives.

"Lightweight litters have captured approximately 9.5% of the category, and represented approximately 225% of the year over year category growth for the six months ending January 31st, according to an independent market reporting service, as other sub-segments, primarily coarse litter, continued to decline.

"In the Business to Business segment, demand for our agricultural and fluid purification products was down in the second quarter and flat or down for the first six months, while net sales of our animal health products increased compared to the same periods a year ago.

"Our manufacturing and supply chain units made good progress incorporating the additional volume from the MFM asset purchase in November of 2013. Overall higher manufacturing and packaging costs per ton were partially offset by lower energy prices. We have yet to see lower packaging costs as a result of the drop in resin prices due to existing contractual obligations, but we expect some relief later in the year.

"Looking towards the second half of the year, we believe that sales of our new Cat's Pride Fresh & Light Ultimate Care lightweight and lightweight private label litters will gain momentum. These sales combined with projected reductions in energy costs should be positive drivers in the second half of the year."


                               SEGMENT REVIEW

                            BUSINESS TO BUSINESS
                           Second Quarter Results

    Business to               Three Month Period
 Business Products          November 1 - January 31              Change
------------------  --------------------------------------  ----------------
                           Fiscal 2015         Fiscal 2014
     Net Sales             $23,047,000$25,264,000         -9%
  Segment Income            $7,443,000$7,993,000         -7%
------------------  ------------------  ------------------  ----------------

                            BUSINESS TO BUSINESS
                              Six-Month Results

    Business to                Six-Month Period
 Business Products           August 1 - January 31               Change
------------------  --------------------------------------  ----------------
                           Fiscal 2015         Fiscal 2014
     Net Sales             $46,695,000$49,179,000         -5%
  Segment Income           $14,314,000$15,644,000         -9%
------------------  ------------------  ------------------  ----------------


The reduced sales and income in the Business to Business segment was driven by the same factors in both the second quarter and six-month periods.

There was reduced domestic demand for Pure-Flo bleaching earth product as the soybean crop was of significantly better quality than last year. This cyclical change required lower usage of Pure-Flo to achieve the desired color and clarity in the edible oil produced.

The continued trend toward the growing of crops using genetically modified seeds reduced the demand for Agsorb carriers, particularly for control of corn rootworm. However, the Business to Business segment did see increased demand for Verge engineered granules for agricultural needs.

The animal health business experienced increases in both the second quarter and six-month periods. Amlan Trading (Shenzhen) Company Ltd, our recently formed Chinese subsidiary, continued to build its sales and administrative team to position it for future growth.


                            RETAIL AND WHOLESALE
                           Second Quarter Results

 Retail and Wholesale            Three Month Period
       Products                November 1 - January 31             Change
---------------------  --------------------------------------  -------------
                              Fiscal 2015         Fiscal 2014
      Net Sales               $41,596,000$44,041,000       -6%
    Segment Income             $1,262,000$2,982,000       -58%
---------------------  ------------------  ------------------  -------------

                            RETAIL AND WHOLESALE
                              Six-Month Results

 Retail and Wholesale             Six-Month Period
       Products                 August 1 - January 31              Change
---------------------  --------------------------------------  -------------
                              Fiscal 2015         Fiscal 2014
      Net Sales               $83,992,000$83,672,000       0.4%
    Segment Income             $2,148,000$4,257,000       -50%
---------------------  ------------------  ------------------  -------------


The results of the Retail and Wholesale segment were also driven by similar factors in both the second quarter and six-month periods.

All of our major competitors have introduced their own lightweight scoopable litters, further validating the strength of the innovation that Oil-Dri was first to market three years ago. In each case, the competitive new products were introduced with robust advertising and marketing programs accompanied by trade and consumer focused price incentives. This resulted in a fight for retail shelf space that we expect to continue through the remainder of the fiscal year.

As the lightweight sub-segment continues to develop, we are seeing increased opportunity to provide high quality, lightweight private label litters for existing and new retail partners.

Some elements of our cost structure experienced favorable trends, namely natural gas cost. However, our manufacturing costs were up due to lower fixed cost absorption and increased labor, benefits and depreciation costs. We expect these increased costs to continue, but they should be better offset by revenues in the second half of the year.

A pleasant development during the quarter and half year periods was the substantial increase in both the net sales and income achieved by our nearly 75 year-old Oil-Dri industrial absorbent products.


Cash, cash equivalents, restricted cash and short-term investments at January 31, 2015, totaled $13,703,000 compared to $19,682,000 a year ago. Significant uses of cash in the six-month period included capital expenditures and regularly scheduled debt and dividend payments.

Capital expenditures for the six-month period totaled $9,920,000 which was $3,984,000 more than depreciation and amortization of $5,936,000. By comparison, capital expenditures totaled $6,782,000 in the first six months of 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. Cash provided by operating activities was $10,607,000 for the period, which was $8,207,000 higher than the $2,400,000 in the first six months of fiscal 2014. The primary reason for the change between years was the decrease in working capital.

On December 9, 2014, Oil-Dri's Board of Directors declared quarterly cash dividends of $0.20 per share of outstanding Common Stock and $0.15 per share of outstanding Class B Stock. The dividends were paid on March 6, 2015 to stockholders of record at the close of business on February 20, 2015. The Company has paid cash dividends continuously since 1974 and has increased dividends annually for the past eleven years. At the end of the second quarter, the annualized dividend yield on the Company's Common Stock was 2.6%, based on the quarter's closing stock price of $30.62 per share and the latest quarterly cash dividend of $0.20.


Jaffee continued, "The results for the balance of fiscal 2015 will be heavily dependent on the market response to the launch of our Cat's Pride Fresh & Light Ultimate Care lightweight litter and lightweight private label products.

"On the cost side, we anticipate continued lower processing fuel costs brought on by the drop in natural gas prices. Packaging cost increases should be moderated by lower resin prices.

"In the Business to Business segment, the continued rise in the value of the US Dollar has put additional competitive pressure on export sales of our bleaching earth and animal health products.

"All-in-all, we are cautiously optimistic that the second half of fiscal 2015 will build on the steady improvement of the past three quarters and deliver increases in net sales and earnings compared to the same periods last year."

Oil-Dri Corporation of America is a leading supplier of specialty sorbent products for agricultural, horticultural, fluids purification, specialty markets, industrial and automotive, and is the world's largest manufacturer of cat litter.

The Company will offer a live webcast of the second quarter earnings teleconference on Wednesday, March 11, 2015 from 10:00 am to 10:30 am, Central Time. To listen via the web, visit or An archived recording of the call and written transcripts of all teleconferences are posted on the Oil-Dri website.

"Cat's Pride," "Fresh & Light," "Pure-Flo," "Agsorb," "Verge," "Oil-Dri" are registered trademarks of Oil-Dri Corporation of America. "Fresh & Light Ultimate Care" 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.


(in thousands, except for per share amounts)
                                       Second Quarter Ended January 31,
                                                % of                 % of
                                      2015      Sales      2014      Sales
                                   ---------  --------  ---------  --------
Net Sales                          $  64,643     100.0% $  69,305     100.0%
Cost of Sales                        (49,410)     76.4%   (52,412)     75.6%
                                   ---------  --------  ---------  --------
Gross Profit                          15,233      23.6%    16,893      24.4%
Operating Expenses                   (10,952)     17.0%   (11,159)     16.1%
                                   ---------  --------  ---------  --------

Operating Income                       4,281       6.6%     5,734       8.3%
Interest Expense                        (307)      0.5%      (385)      0.6%
Other Income                             (88)     -0.1%       181       0.3%
                                   ---------  --------  ---------  --------

Income Before Income Taxes             3,886       6.0%     5,530       8.0%
Income Taxes                          (1,089)      1.7%    (1,249)      1.8%
                                   ---------  --------  ---------  --------
Net Income                         $   2,797       4.3% $   4,281       6.2%
                                   =========  ========  =========  ========

Net Income Per Share:
  Basic Common                     $    0.43$    0.65
  Basic Class B Common             $    0.32$    0.49
  Diluted                          $    0.39$    0.60

Average Shares Outstanding:
  Basic Common                         4,953                4,979
  Basic Class B Common                 2,022                2,005
  Diluted                              7,030                7,007

                                         Six Months Ended January 31,
                                                % of                 % of
                                      2015      Sales      2014      Sales
                                   ---------  --------  ---------  --------
Net Sales                          $ 130,687     100.0% $ 132,851     100.0%
Cost of Sales                       (101,685)     77.8%   (99,458)     74.9%
                                   ---------  --------  ---------  --------
Gross Profit                          29,002      22.2%    33,393      25.1%
Operating Expenses                   (21,561)     16.5%   (23,317)     17.5%
                                   ---------  --------  ---------  --------

Operating Income                       7,441       5.7%    10,076       7.6%
Interest Expense                        (689)      0.5%      (809)      0.6%
Other Income                              (1)      0.0%       156       0.1%
                                   ---------  --------  ---------  --------

Income Before Income Taxes             6,751       5.2%     9,423       7.1%
Income Taxes                          (1,834)      1.4%    (2,255)      1.7%
                                   ---------  --------  ---------  --------
Net Income                         $   4,917       3.8% $   7,168       5.4%
                                   =========  ========  =========  ========

Net Income Per Share:
  Basic Common                     $    0.75$    1.09
  Basic Class B Common             $    0.56$    0.82
  Diluted                          $    0.69$    1.01

Average Shares Outstanding:
  Basic Common                         4,951                4,967
  Basic Class B Common                 2,016                1,999
  Diluted                              7,023                6,991

(in thousands, except for per share amounts)
                                                         As of January 31,
                                                         2015        2014
                                                      ----------  ----------
Current Assets
  Cash and Cash Equivalents                           $   12,763$   12,082
  Restricted Cash                                             --         500
  Short-term Investments                                     940       7,100
  Accounts Receivable, Net                                32,255      37,022
  Inventories                                             23,661      22,734
  Prepaid Expenses                                         7,409       9,915
                                                      ----------  ----------
    Total Current Assets                                  77,028      89,353
                                                      ----------  ----------
Property, Plant and Equipment, Net                        79,702      68,959
Other Assets                                              27,584      25,548
                                                      ----------  ----------
Total Assets                                          $  184,314$  183,860
                                                      ==========  ==========

Current Liabilities
  Current Maturities of Notes Payable                 $    3,483$    3,500
  Accounts Payable                                         6,191       7,699
  Dividends Payable                                        1,313       1,242
  Accrued Expenses                                        16,733      16,686
                                                      ----------  ----------
    Total Current Liabilities                             27,720      29,127
                                                      ----------  ----------
Noncurrent Liabilities
  Notes Payable                                           15,417      18,900
  Other Noncurrent Liabilities                            34,250      27,775
                                                      ----------  ----------
    Total Noncurrent Liabilities                          49,667      46,675
                                                      ----------  ----------
Stockholders' Equity                                     106,927     108,058
                                                      ----------  ----------
Total Liabilities and Stockholders'
 Equity                                               $  184,314$  183,860
                                                      ==========  ==========

Book Value Per Share Outstanding                      $    15.33$    15.47

Acquisitions of
Property, Plant and Equipment          Second Quarter $    4,203$    3,400
                                       Year To Date   $    9,920$    6,782
Depreciation and Amortization Charges  Second Quarter $    3,016$    2,629
                                       Year To Date   $    5,936$    4,860

(in thousands)
                                                   For the Six Months Ended
                                                          January 31,
                                                       2015         2014
                                                   -----------  -----------
Net Income                                         $     4,917$     7,168
Adjustments to reconcile net income to net cash
 provided by operating activities, net of
  Depreciation and Amortization                          5,936        4,860
  Increase in Accounts Receivable                       (1,431)      (5,919)
  Decrease (Increase) in Inventories                       822       (1,347)
  (Decrease) Increase in Accounts Payable               (1,232)         381
  Decrease in Accrued Expenses                            (867)      (3,558)
  Increase in Pension and Postretirement Benefits          519          528
  Other                                                  1,943          287
                                                   -----------  -----------
    Total Adjustments                                    5,690       (4,768)
                                                   -----------  -----------
  Net Cash Provided by Operating Activities             10,607        2,400
                                                   -----------  -----------

  Capital Expenditures                                  (9,920)      (6,782)
  Acquisition of Business                                   --      (12,505)
  Restricted Cash                                          129         (500)
  Net Dispositions of Investment Securities              1,701       11,361
  Other                                                    123           16
                                                   -----------  -----------
  Net Cash Used in Investing Activities                 (7,967)      (8,410)
                                                   -----------  -----------

  Principal Payments on Long-Term Debt                  (3,500)      (3,500)
  Dividends Paid                                        (2,623)      (2,478)
  Other                                                     31           59
                                                   -----------  -----------
  Net Cash Used in Financing Activities                 (6,092)      (5,919)
                                                   -----------  -----------

Effect of exchange rate changes on cash and cash
 equivalents                                               (15)         (24)

Net Decrease in Cash and Cash Equivalents               (3,467)     (11,953)
Cash and Cash Equivalents, Beginning of Period          16,230       24,035
                                                   -----------  -----------
Cash and Cash Equivalents, End of Period           $    12,763$    12,082
                                                   ===========  ===========


Laura G. Scheland
Investor Relations Contact
Oil-Dri Corporation of America
(312) 321 1515

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