UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported) | October 11, 2013 |
| Oil-Dri Corporation of America |
| (Exact name of registrant as specified in its charter) |
| Delaware | 001-12622 | 36-2048898 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
410 North Michigan Avenue Suite 400 Chicago, Illinois |
60611-4213 | |
| (Address of principal executive offices) | (Zip Code) |
| Registrant’s telephone number, including area code | (312) 321-1515 |
|
(Former name or former address, if changed since last report.)
| |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On October 11, 2013, Oil-Dri Corporation of America (the “Registrant”) issued a press release announcing its results of operations for its fourth quarter and fiscal year ended July 31, 2013. A copy of the press release is attached as Exhibit 99.1 and the information contained therein is incorporated herein by reference. The information contained in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), and it shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit | ||
| Number | Description of Exhibits | |
| 99.1 | Press Release of the Registrant dated October 11, 2013 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| OIL-DRI CORPORATION OF AMERICA | |||
| By: | /s/ Douglas A. Graham | ||
| Douglas A. Graham | |||
| Vice President and General Counsel | |||
Date: October 15, 2013
Exhibit Index
| Exhibit | ||
| Number | Description of Exhibits | |
| 99.1 | Press Release of the Registrant dated October 11, 2013 |
410 N. Michigan Ave. Chicago, Illinois 60611, U.S.A
News Announcement
For Immediate Release
Exhibit 99.1
Oil-Dri Announces Fourth Quarter and Record Fiscal Year End Results
CHICAGO—(October 11, 2013)—Oil-Dri Corporation of America (NYSE: ODC) today announced net sales of $63,892,000 for the fourth quarter ended July 31, 2013, a 4.5% increase compared with net sales of $61,116,000 in the same quarter one year ago. Net income for the quarter was a record $4,737,000 or $0.67 per diluted share, compared to a net loss of $108,000, or $0.02 per diluted share, for the same quarter a year ago. The loss in the fourth quarter of fiscal 2012 was due to the one-time charge incurred for the relocation of course clay production from our Mounds, Illinois plant to our plants in Mississippi.
The Company reported record net sales and record earnings for the fiscal year ended July 31, 2013. Net sales were $250,583,000, a 4.1% increase compared to net sales of $240,681,000 for fiscal 2012. Net income for the fiscal year was $14,586,000 or $2.07 per diluted share, up 143.5% from net income of $6,098,000, or $0.85 per diluted share, for fiscal 2012.
Business Review
President and Chief Executive Officer Daniel S. Jaffee said, “We had a strong fourth quarter and full year. Despite an approximate 10% rise in freight costs, both business segments expanded gross profit and reported record earnings for the year.
“The Business to Business segment’s results for both the quarter and fiscal year were positively affected by sales of Fluid Purification’s Pure-Flo bleaching earth products used to refine vegetable oils and by sales of Amlan International’s Calibrin products used in livestock and poultry production. This increase in demand is tied to the growth in human food consumption.
“While net sales in the Retail and Wholesale segment were down for the fourth quarter, the product mix was favorable and expanded gross profit margins. We invested in marketing support for the Cat’s Pride Fresh & Light brand, although at reduced levels from fiscal 2012. We are encouraged by the 59% year over year growth of Fresh & Light sales from fiscal 2012 to fiscal 2013 and in particular, by the 43% rate of repeat purchases.”
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256
Segment Review
| Business to Business Products |
Fourth Quarter May 1 – July 31 |
Change | |
| Fiscal 2013 | Fiscal 2012 | ||
| Net Sales | $24,947,000 | $21,289,000 | 17.2% |
| Segment Income | $8,158,000 | $7,725,000 | 5.6% |
| Business to Business Products |
Fiscal Year August 1 – July 31 |
Change | |
| Fiscal 2013 | Fiscal 2012 | ||
| Net Sales | $92,969,000 | $85,456,000 | 8.8% |
| Segment Income | $30,739,000 | $28,643,000 | 7.3% |
Net sales for the Company’s Business to Business segment for the fourth quarter were up $3,658,000 or 17.2% and segment income was up $433,000 or 5.6% from the prior year period. These increases were driven by volume growth of both Pure-Flo bleaching clay products for vegetable oil purification and Calibrin toxin binders for animal health, in overseas markets. Net sales of co-packaged coarse cat litters were up slightly while sales of agricultural products declined in the fourth quarter.
Net sales of Business to Business products for the fiscal year were up $7,513,000 or 8.8% and segment income for the year was up $2,096,000 or 7.3% from the same period one year ago. These increases were driven by volume growth of bleaching clays and animal health products. The increase of net sales in the segment can be partially attributed to the continued strong growth of Calibrin-Z as a broad-spectrum toxin binder. Segment sales were partially offset by a decline in the horticulture markets.
2
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256
|
Retail and Wholesale Products |
Fourth Quarter May 1 – July 31 |
Change | ||
| Fiscal 2013 | Fiscal 2012 | |||
| Net Sales | $38,945,000 | $39,827,000 | (2.2%) | |
| Segment Income | $1,137,000 | ($181,000) | ||
|
Retail and Wholesale Products |
Fiscal Year August 1 – July 31 |
Change | |
| Fiscal 2013 | Fiscal 2012 | ||
| Net Sales | $157,614,000 | $155,225,000 | 1.5% |
| Segment Income | $10,561,000 | $2,098,000 | 403.4% |
Net sales for the company’s Retail and Wholesale Products for the fourth quarter were down $882,000 or 2.2% while segment income was up $1,318,000 from the prior year period. In the fourth quarter, the Company invested by expanding the sales team and hosting Free Litter Caturday, a large promotional event where over 1 million pounds of product was given away to gain consumer trial. Net sales by our foreign subsidiaries and our Industrial and Automotive division were up significantly from the same quarter one year ago.
Net sales of Retail and Wholesale products for the fiscal year were up $2,389,000 or 1.5% from one year ago, while segment income for the year was up $8,463,000 or 403.4%, due to a favorable product mix, which increased gross profit as well as lower advertising costs compared to the costs incurred for the launch of Cat’s Pride Fresh & Light in the previous fiscal year.
Financial Review
Net income and earnings per share for both the quarter and the fiscal year were significantly impacted by the utilization of approximately $1,369,000 of domestic Alternative Minimum Tax (AMT) attributes. We reduced the domestic AMT valuation allowance that had been established in prior years. This resulted in a reduction of our federal income tax rate to 16.6% in fiscal 2013 compared to 27.1% in fiscal 2012. We expect our tax rate to return to historic levels in fiscal 2014.
Cash, cash equivalents and short-term investments at July 31, 2013, totaled $42,494,000, which was $6,238,000 or 17.2% more than the $36,256,000 at July 31, 2012. Cash, cash equivalents and short-term investments were up primarily due to the increase of net income in the fiscal year.
3
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256
Capital expenditures for the fiscal year totaled $9,795,000, which was $849,000 more than depreciation and amortization of $8,946,000. Capital expenditures were made for equipment replacement and new machinery at our manufacturing facilities. By comparison, capital expenditures totaled $6,960,000 in fiscal 2012.
Net cash provided by operating activities was $23,366,000 for the fiscal year compared to $23,339,000 for fiscal 2012, an increase of $27,000.
On June 11 2013, Oil-Dri’s Board of Directors declared an increased quarterly cash dividend of $0.19 per share of outstanding Common Stock and $0.1425 per share of outstanding Class B Stock. The dividends were paid on August 30, 2013 to stockholders of record at the close of business on August 16, 2013. The Company has paid cash dividends continuously since 1974 and has increased dividends annually for the past ten years.
At the end of the fourth quarter, the annualized dividend yield on the Company’s Common Stock was 2.4%, based on the quarter’s closing stock price of $31.86 per share and an annual cash dividend of $0.76. The Company paid $0.72 per share of Common Stock in fiscal 2013, which included an accelerated payment for the third and fourth quarters of fiscal 2013, which was paid on December 28, 2013.
Looking Forward
President and CEO Jaffee continued, “Over the course of fiscal 2014, we will continue to invest in our business and expect to see the benefit of these investments in fiscal 2015 and beyond. Plans are underway to expand capacity at our Georgia Powders facility in order to accommodate the increasing demand of our Fluids Purification products, Pure-Flo bleaching earths. Additionally, we have applied for a business license in China, with plans of opening an office and intensifying our sales growth of animal health products in the region.
“In the Retail and Wholesale segment, we are pleased with the positive acceptance of our Free Litter Caturday program and the strengthened relationships with our retail accounts. We anticipate strong top-line growth in fiscal 2014, driven by innovation and investment. Advertising and promotional spending for Cat’s Pride is expected to be greater than fiscal 2013, with a focus on maximizing our return from these expenditures. We will continue to invest in our sales and marketing organization. Cat’s Pride Fresh & Light commercials are back on TV and will focus on our Cat’s Pride family of products, including our newly announced All Day Odor Control, a 40% lighter, Fresh & Light product.”
4
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256
Five-Year Summary of Financial Data
Key Metrics as of July 31,
| Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | Fiscal 2010 | Fiscal 2009 | |
|
Cash, cash equivalents and investments |
$42,494,000 |
$36,256,000 |
$33,722,000 |
$24,621,000 |
$19,837,000 |
| Net cash provided by operations |
$23,895,000 |
$23,339,000 |
$13,108,000 |
$26,216,000 |
$15,814,000 |
|
Cash, cash equivalents and investments less notes payable |
$16,594,000 |
$6,556,000 |
$422,000 |
$6,321,000 |
($1,663,000) |
|
Net Income |
$14,586,000 |
$6,098,000 |
$9,051,000 |
$9,458,000 |
$9,586,000 |
|
*Net income per diluted share |
$2.07 |
$0.85 |
$1.26 |
$1.30 |
$1.33 |
| Return on average stockholders’ equity |
15.5% |
6.8% |
9.7% |
10.5% |
10.8% |
|
Capital expenditures |
$10,324,000 |
$6,960,000 |
$13,806,000 |
$10,413,000 |
$15,253,000 |
|
Dividends paid |
$4,630,000 |
$4,486,000 |
$4,218,000 |
$3,992,000 |
$3,684,000 |
| Dividends paid per Common Stock share |
$0.72 |
$0.68 |
$0.64 |
$0.60 |
$0.56 |
###
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 fourth quarter earnings teleconference on Tuesday, October 15, 2013 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. Please note, due to the federal holiday on Monday, we will hold the earnings teleconference on Tuesday, October 15th.
The Company will host its Annual Meeting of Stockholders on Tuesday, December 10, 2013 starting at 9:30 am, Central Time. The meeting will be held at The Standard Club, 320 South Plymouth Court, Chicago, Illinois 60604. The record date for voting eligibility at the Annual Meeting is October 18, 2013.
5
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256
Cat’s Pride, Fresh & Light, Calibrin, Amlan, and Pure-Flo are registered trademarks of Oil-Dri Corporation of America.
Free Litter Caturday, Fluids Purification and All Day Odor Control are 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,” 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.
6
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256
| Consolidated Statements of Income | ||||||||||||||||
| (in thousands, except for per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Fourth Quarter Ended July 31, | ||||||||||||||||
| 2013 | % of Sales | 2012 | % of Sales | |||||||||||||
| Net Sales | $ | 63,892 | 100.0 | % | $ | 61,116 | 100.0 | % | ||||||||
| Cost of Sales | (47,784 | ) | 74.8 | % | (45,573 | ) | 74.6 | % | ||||||||
| Gross Profit | 16,108 | 25.2 | % | 15,543 | 25.4 | % | ||||||||||
| Operating Expenses | (11,695 | ) | 18.3 | % | (13,428 | ) | 22.0 | % | ||||||||
| Capacity Rationalization Charges | - | 0.0 | % | (1,623 | ) | 0.0 | % | |||||||||
| Operating Income | 4,413 | 6.9 | % | 492 | 0.8 | % | ||||||||||
| Interest Expense | (399 | ) | 0.6 | % | (503 | ) | 0.8 | % | ||||||||
| Other Expenses | (44 | ) | -0.1 | % | (14 | ) | 0.0 | % | ||||||||
| Income (Loss) Before Income Taxes | 3,970 | 6.2 | % | (25 | ) | 0.0 | % | |||||||||
| Income Taxes | 767 | -1.2 | % | (83 | ) | 0.1 | % | |||||||||
| Net Income (Loss) | $ | 4,737 | 7.4 | % | $ | (108 | ) | -0.2 | % | |||||||
| Net Income (Loss) Per Share: | ||||||||||||||||
| Basic Common | $ | 0.73 | $ | (0.02 | ) | |||||||||||
| Basic Class B Common | $ | 0.55 | $ | (0.01 | ) | |||||||||||
| Diluted | $ | 0.67 | $ | (0.02 | ) | |||||||||||
| Average Shares Outstanding: | ||||||||||||||||
| Basic Common | 4,938 | 4,903 | ||||||||||||||
| Basic Class B Common | 1,980 | 1,938 | ||||||||||||||
| Diluted | 6,951 | 6,901 | ||||||||||||||
| Twelve Months Ended July 31, | ||||||||||||||||
| 2013 | % of Sales | 2012 | % of Sales | |||||||||||||
| Net Sales | $ | 250,583 | 100.0 | % | $ | 240,681 | 100.0 | % | ||||||||
| Cost of Sales | (184,084 | ) | 73.5 | % | (181,676 | ) | 75.5 | % | ||||||||
| Gross Profit | 66,499 | 26.5 | % | 59,005 | 24.5 | % | ||||||||||
| Operating Expenses | (47,558 | ) | 19.0 | % | (47,303 | ) | 19.7 | % | ||||||||
| Capacity Rationalization Charges | (70 | ) | 0.0 | % | (1,623 | ) | 0.0 | % | ||||||||
| Operating Income | 18,871 | 7.5 | % | 10,079 | 4.2 | % | ||||||||||
| Interest Expense | (1,773 | ) | 0.7 | % | (2,060 | ) | 0.9 | % | ||||||||
| Other Income | 401 | 0.2 | % | 342 | 0.1 | % | ||||||||||
| Income Before Income Taxes | 17,499 | 7.0 | % | 8,361 | 3.5 | % | ||||||||||
| Income Taxes | (2,913 | ) | 1.2 | % | (2,263 | ) | 0.9 | % | ||||||||
| Net Income | $ | 14,586 | 5.8 | % | $ | 6,098 | 2.5 | % | ||||||||
| Net Income Per Share: | ||||||||||||||||
| Basic Common | $ | 2.25 | $ | 0.92 | ||||||||||||
| Basic Class B Common | $ | 1.69 | $ | 0.70 | ||||||||||||
| Diluted | $ | 2.07 | $ | 0.85 | ||||||||||||
| Average Shares Outstanding: | ||||||||||||||||
| Basic Common | 4,909 | 5,063 | ||||||||||||||
| Basic Class B Common | 1,970 | 1,934 | ||||||||||||||
| Diluted | 6,927 | 7,062 |
| |||||||||||||
7
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256
| Consolidated Balance Sheets | ||||||||||
| (in thousands, except for per share amounts) | ||||||||||
| (unaudited) | ||||||||||
| As of July 31, | ||||||||||
| 2013 | 2012 | |||||||||
| Current Assets | ||||||||||
| Cash and Cash Equivalents | $ | 24,035 | $ | 27,093 | ||||||
| Short-term Investments | 18,459 | 9,163 | ||||||||
| Accounts Receivable, net | 31,148 | 30,225 | ||||||||
| Inventories | 20,723 | 19,673 | ||||||||
| Prepaid Expenses | 9,007 | 9,048 | ||||||||
| Total Current Assets | 103,372 | 95,202 | ||||||||
| Property, Plant and Equipment, Net | 66,055 | 64,453 | ||||||||
| Other Assets | 14,132 | 14,612 | ||||||||
| Total Assets | $ | 183,559 | $ | 174,267 | ||||||
| Current Liabilities | ||||||||||
| Current Maturities of Notes Payable | $ | 3,500 | $ | 3,800 | ||||||
| Accounts Payable | 6,483 | 6,700 | ||||||||
| Dividends Payable | 1,236 | 1,154 | ||||||||
| Accrued Expenses | 20,228 | 17,468 | ||||||||
| Total Current Liabilities | 31,447 | 29,122 | ||||||||
| Noncurrent Liabilities | ||||||||||
| Notes Payable | 22,400 | 25,900 | ||||||||
| Other Noncurrent Liabilities | 26,774 | 33,937 | ||||||||
| Total Noncurrent Liabilities | 49,174 | 59,837 | ||||||||
| Stockholders' Equity | 102,938 | 85,308 | ||||||||
| Total Liabilities and Stockholders' Equity | $ | 183,559 | $ | 174,267 | ||||||
| Book Value Per Share Outstanding | $ | 14.96 | $ | 12.19 | ||||||
| Acquisitions of: | ||||||||||
| Property, Plant and Equipment | Fourth Quarter | $ | 2,519 | $ | 1,508 | |||||
| Year to Date | $ | 10,324 | $ | 6,960 | ||||||
| Depreciation and Amortization Charges | Fourth Quarter | $ | 2,251 | $ | 2,332 | |||||
| Year to Date | $ | 8,946 | $ | 9,272 | ||||||
8
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256
| Consolidated Statements of Cash Flows | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| For the Twelve Months Ended | ||||||||
| July 31, | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | 2013 | 2012 | ||||||
| Net Income | $ | 14,586 | $ | 6,098 | ||||
| Adjustments to reconcile net income to net cash | ||||||||
| provided by operating activities: | ||||||||
| Depreciation and Amortization | 8,946 | 9,272 | ||||||
| Capacity Rationalization Plan Charges | 70 | 1,623 | ||||||
| Increase in Accounts Receivable | (984 | ) | (1,026 | ) | ||||
| Increase in Inventories | (1,050 | ) | (456 | ) | ||||
| Increase in Accounts Payable | 135 | 456 | ||||||
| Increase in Accrued Expenses | 2,159 | 1,622 | ||||||
| (Decrease) Increase in Pension and Postretirement Benefits | (1,896 | ) | 4,730 | |||||
| Other | 1,400 | 1,020 | ||||||
| Total Adjustments | 8,780 | 17,241 | ||||||
| Net Cash Provided by Operating Activities | 23,366 | 23,339 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Capital Expenditures | (9,795 | ) | (6,960 | ) | ||||
| Net (Purchases) Dispositions of Investment Securities | (9,289 | ) | 6,659 | |||||
| Other | 66 | 31 | ||||||
| Net Cash Used in Investing Activities | (19,018 | ) | (270 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Principal Payments on Long-Term Debt | (3,800 | ) | (3,600 | ) | ||||
| Dividends Paid | (4,630 | ) | (4,486 | ) | ||||
| Purchase of Treasury Stock | (175 | ) | (6,247 | ) | ||||
| Other | 1,155 | 444 | ||||||
| Net Cash Used in Financing Activities | (7,450 | ) | (13,889 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 44 | 28 | ||||||
| Net (Decrease) Increase in Cash and Cash Equivalents | (3,058 | ) | 9,208 | |||||
| Cash and Cash Equivalents, Beginning of Year | 27,093 | 17,885 | ||||||
| Cash and Cash Equivalents, End of Year | $ | 24,035 | $ | 27,093 | ||||
9
Investor Relations Contact
Reagan
Culbertson
reagan.culbertson@oildri.com
(312) 706 3256