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
September 24, 2003
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Date of Report (Date of earliest event
reported)
Oil-Dri Corporation of America
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(Exact name of registrant as specified
in its charter)
Delaware 0-8675 36-2048898
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
410 North Michigan Avenue
Suite 400
Chicago, Illinois 60611-4213
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(Address of principal (Zip Code)
executive offices)
(312) 321-1515
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Registrant's telephone number
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits: The following document is attached as an exhibit to this report:
Exhibit
NUMBER DESCRIPTION
99 Press Release dated September 24, 2003.
ITEM 9. REGULATION FD DISCLOSURE
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On September 24, 2003, the Registrant issued a press release announcing its
fourth quarter and full fiscal year results of operations for its fiscal year
ended July 31, 2003. A copy of the press release is attached as Exhibit 99. This
information is being provided under both Items 9 and 12, as suggested by the
Commission in Release 33-8216, though it is required to be provided only under
Item 12.
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/ CHARLES P. BRISSMAN
--------------------------------
Charles P. Brissman
Vice President and General Counsel
Date: September 25, 2003
RELEASE:Immediate CONTACT: Ronda J. Williams
312-706-3232
OIL-DRI CORPORATION OF AMERICA REPORTS FOURTH QUARTER AND YEAR
END EARNINGS
CHICAGO - September 24, 2003- Oil-Dri Corporation of America (NYSE:
ODC) today announced sales of $44,730,000 for the fourth quarter
ended July 31, 2003, 14% greater than sales of $39,281,000 for the
fourth quarter one year ago. The company reported net income of
$476,000 or $0.08 per fully diluted share in the fourth quarter
compared to a net loss of $1,939,000 or a loss of $0.34 per fully
diluted share in the same quarter one year ago.
Sales for fiscal year 2003 were $173,041,000, a 7% increase from
sales of $162,345,000 for fiscal year 2002. Net income for the
fiscal year was $3,083,000 or $0.54 per fully diluted share, a
significant improvement from a net loss of $1,094,000 or a loss of
$0.19 per fully diluted share for fiscal 2002.
Fourth quarter pre-tax income of $511,000 includes a write-off of
$573,000 associated with the Christmas Valley, Ore., plant closing.
Excluding this item, the company earned pre-tax income of $1,084,000.
In the same quarter a year ago, the company reported a pre-tax loss
of $2,763,000, which included a $168,000 gain from a land sale and
the $3,213,000 write-off associated with the company's decision not
to proceed with the Reno, Nev., project. Excluding these items the
company earned pre-tax income of $282,000.
Fiscal year 2003 pre-tax income of $4,342,000 includes gains from
sales of real estate and mineral rights totaling $449,000, and a
payment of $675,000 from a customer who failed to meet minimum
purchase requirements under a supply agreement. It also includes a
$385,000 asset write off, a $350,000 goodwill write down associated
with an equity investment in Kamterter and the Christmas Valley
plant asset write off of $573,000. Excluding all of these items the
company earned pre-tax income of $4,526,000 for fiscal 2003.
Fiscal year 2002 pre-tax loss of $1,559,000 included gains from the
sale of land and mineral rights of $937,000 and $3,213,000 of Reno
plant cost write-offs. Excluding these items the company earned
pre-tax income of $717,000 for last fiscal year.
The company's year-to-date effective tax rate has been adjusted
from 32% in the third quarter to 29% at fiscal year end, resulting
in a fourth quarter effective tax rate of 6.9%.
YEAR-IN-REVIEW
"Several factors contributed to this year's success," stated
President and Chief Executive Officer, Daniel S. Jaffee. "The list of
accomplishments demonstrates progress in all areas of the business
and we feel positive about the results. Three areas, in particular,
led the way for a successful and profitable year. This year we were
able to:
o Strengthen the company's national manufacturing and
distribution by acquiring the Jonny Cat(R) cat litter brand as
well as the manufacturing and mining facilities in Taft,
Calif.
o Increase profitability through the geographic reorganization
strategy with the Wal-Mart Company to supply Special Kitty(R)
cat litter.
o Increase sales and profitability from the company's core
businesses, in particular, Pro's Choice(R) sports field
products, specialty product Pure Flo(R) bleaching earth and
the Oil-Dri Canada operations.
"We were poised this fiscal year to invest in a very strategic
acquisition. The purchase of the Jonny Cat brand and the associated
mining and manufacturing facilities in Taft, Calif., opened the
door for many more business opportunities. Our investment in an
established brand and facilities in a key geographic location
positioned the company for future growth and, paved the way for a
growing and successful year for our stakeholders.
"Our ability to integrate that strategic acquisition while
generating cash and reducing long-term debt is also noteworthy. At
July 31, 2003, cash, cash equivalents and short-term investments
totaled $16,670,000, an increase of $434,000 during the fiscal
year. Additionally, long-term debt was reduced by $2,850,000 and
dividends of $1,883,000 were paid during the year.
Continued
YEAR-END BUSINESS REVIEW
o Sales for the CONSUMER PRODUCTS GROUP were up in the quarter
by 15% and 4% for the year. The Jonny Cat acquisition, a major
stimulus for growth, offset the reduction in sales brought
about by the Wal-Mart geographic reorganization implemented in
June 2002. Oil-Dri Canada and Phoebe Products also contributed
to increased sales for the Consumer Products Group this year.
Market research for Jonny Cat line extensions continues and
results are expected throughout fiscal 2004. The new Jonny Cat
Kat Kit is currently in the West Coast market place. Initial
sales are promising.
o The CROP PRODUCTION AND HORTICULTURAL PRODUCTS GROUP
experienced significant sales growth in the quarter at 36% and
27% for the year. Pro's Choice sports field products used in
construction and maintenance of sports fields outpaced prior
year sales. Agsorb(R) traditional agricultural carriers and
Flo Fre(R) processing aids also contributed favorably.
o Sales for the INDUSTRIAL AND AUTOMOTIVE PRODUCTS GROUP were up
15% for the quarter and 8% for the year. Sales growth was
primarily facilitated by strong synthetic sorbent sales along
with newly acquired business from the Taft, Calif., facility.
New sales initiatives for fiscal 2004 are in place to expand
distribution on the West Coast.
o The SPECIALTY PRODUCTS GROUP sales were flat for the quarter
and up 2% for the year. Reduced sales from Western Europe were
offset by increased demand in other international markets.
Continued focus on geographic expansion is necessary for
future growth and long-term success. Sales from Animal Health
and Nutrition products, PelUnite Plus pellet binder and
Poultry Guard litter amendment were up for the year.
FINANCIAL OVERVIEW
On June 10, 2003, Oil-Dri's Board of Directors declared a regular
quarterly cash dividend of $0.09 per share of Common Stock. The
dividend was paid on September 12, 2003 to shareholders of record
at the close of business August 8, 2003. The company has paid cash
dividends for 26 consecutive years. The company currently pays
dividends of $0.36 per share of Common Stock. At a July 31, 2003
closing price of $11.95 and assuming cash dividends continue at the
same rate, the annual yield is 3.0%.
During the fiscal year the company repurchased 144,600 shares of
stock, under the stock repurchase program, at an average price of
$10.34 per share. The company has 302,010 shares remaining under
the current stock purchase authorization.
Cash, cash equivalents and short-term investments at July 31, 2003,
totaled $16,667,000. Operating cash flow for the fiscal year was a
positive $17,489,000. Capital expenditures for the fiscal year
totaled $9,476,000, which includes acquisition expenditures of
$4,594,000 and normal capital expenditures of $4,882,000, which is
$942,000 more than the depreciation and amortization of $8,534,000.
Excluding the acquisition expenditures, fiscal year capital
expenditures totaled $4,882,000, which is $3,652,000 less than the
depreciation and amortization of $8,534,000.
LOOKING FORWARD
Jaffee added, "Our task now is to build upon the momentum of fiscal
2003. We've had many accomplishments this year and must capitalize
on the foundation laid.
"Energy, a major cost element of our business, is an area where we
are focusing significant attention. We are attempting to deal with
fluctuating prices and rising costs of natural gas and fuel oil by
implementing our forward purchasing program. Longer term, we are
intensifying our efforts to use alternative fuels in our
manufacturing processes.
"During the year we also reorganized our research and development
facility by focusing our efforts on innovation and organizing a
team to meet the demands of market growth. The people at our
research and development center, renamed the Nick Jaffee Center for
Innovation, led by Vice President Steve Azzarello, will be the
catalyst to accelerate growth in Oil-Dri's new product development.
I am optimistic about the possibilities and the added value that
this reorganization brings.
Continued
"It is always gratifying to tell our shareholders about the
company's tangible successes. We commit to build upon the progress
we've made this year and feel very positive about the year ahead.
Having met our earnings estimates for fiscal 2003, I am optimistic
that we can again reach our per share earnings estimate range for
fiscal 2004 of $0.70 to $0.85."
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THE COMPANY WILL OFFER A LIVE WEB CAST OF THE FOURTH QUARTER
EARNINGS TELECONFERENCE ON THURSDAY, SEPTEMBER 25, 2003 AT 10:00
A.M. CST. TO LISTEN TO THE CALL VIA THE WEB, PLEASE VISIT
WWW.STREETEVENTS.COM OR WWW.OILDRI.COM. AN ARCHIVED RECORDING OF
THE CALL WILL BE AVAILABLE FOR APPROXIMATELY 30 DAYS AFTER THE CALL
AND WRITTEN TRANSCRIPTS OF ALL TELECONFERENCES ARE POSTED ON THE
OIL-DRI WEB SITE.
OIL-DRI CORPORATION OF AMERICA IS THE WORLD'S LARGEST MANUFACTURER
OF CAT LITTER AND A LEADING SUPPLIER OF SPECIALTY SORBENT PRODUCTS
FOR INDUSTRIAL, AUTOMOTIVE, AGRICULTURAL, HORTICULTURAL, SPORTS
FIELDS AND SPECIALTY MARKETS.
THIS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS REGARDING
THE COMPANY'S EXPECTED PERFORMANCE FOR FUTURE PERIODS, AND ACTUAL
RESULTS FOR SUCH PERIODS MIGHT MATERIALLY DIFFER. SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO UNCERTAINTIES WHICH
INCLUDE, BUT ARE NOT LIMITED TO, COMPETITIVE FACTORS IN THE
CONSUMER MARKET; THE LEVEL OF SUCCESS IN IMPLEMENTATION OF PRICE
INCREASES AND SURCHARGES; CHANGES IN OVERALL AGRICULTURAL DEMAND;
INCREASING REGULATION OF THE FOOD CHAIN; CHANGES IN THE MARKET
CONDITIONS, THE OVERALL ECONOMY, ENERGY PRICES, AND OTHER FACTORS
DETAILED FROM TIME TO TIME IN THE COMPANY'S ANNUAL REPORT AND OTHER
REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
O I L - D R I C O R P O R A T I O N O F A M E R I C A
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share amounts)
(unaudited)
FOURTH QUARTER ENDED JULY 31,
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2003 % OF SALES 2002 % OF SALES
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NET SALES $ 44,730 100.0% $ 39,281 100.0%
COST OF SALES 36,393 81.4% 31,275 79.6%
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GROSS PROFIT 8,337 18.6% 8,006 20.4%
LOSS ON IMPAIRED LONG-LIVED
ASSETS -- -- (3,213) -8.2%
OPERATING EXPENSES (7,263) -16.2% (7,133) -18.2%
---------------------------------------
OPERATING INCOME (LOSS) 1,074 2.4% (2,340) -6.0%
INTEREST EXPENSE (408) -0.9% (635) -1.5%
OTHER INCOME (EXPENSE) (155) -0.3% 212 0.5%
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INCOME (LOSS) BEFORE INCOME
TAXES 511 1.2% (2,763) -7.0%
INCOME TAXES (BENEFIT) 35 0.1% (824) -2.1%
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NET INCOME (LOSS) $ 476 1.1% $ (1,939) -4.9%
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NET INCOME PER SHARE:
BASIC $ 0.09 $ (0.35)
DILUTIVE $ 0.08 $ (0.34)
AVERAGE SHARES OUTSTANDING:
BASIC 5,499 5,615
DILUTIVE 5,710 5,716
TWELVE MONTHS ENDED JULY 31,
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2003 % OF SALES 2002 % OF SALES
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NET SALES $173,041 100.0% $162,345 100.0%
COST OF SALES 137,413 79.4% 131,265 80.9%
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GROSS PROFIT 35,628 20.6% 31,080 19.1%
OTHER CONTRACTUAL INCOME 675 0.4% -- --
LOSS ON IMPAIRED LONG-LIVED
ASSETS -- -- (3,213) -2.0%
OPERATING EXPENSES (29,686) -17.2% (27,878) -17.1%
---------------------------------------
OPERATING INCOME (LOSS) 6,617 3.8% (11) 0.0%
INTEREST EXPENSE (2,361) -1.4% (2,575) -1.7%
GAIN ON THE SALE OF MINERAL
RIGHTS 139 0.1% 769 0.5%
OTHER INCOME (EXPENSE) (53) 0.0% 258 0.2%
---------------------------------------
INCOME (LOSS) BEFORE INCOME
TAXES 4,342 2.5% (1,559) -1.0%
INCOME TAXES (BENEFIT) 1,259 0.7% (465) -0.3%
---------------------------------------
NET INCOME (LOSS) $ 3,083 1.8% $ (1,094) -0.7%
=======================================
NET INCOME PER SHARE:
BASIC $ 0.55 $ (0.19)
DILUTIVE $ 0.54 $ (0.19)
AVERAGE SHARES OUTSTANDING:
BASIC 5,574 5,614
DILUTIVE 5,708 5,671
O I L - D R I C O R P O R A T I O N O F A M E R
I C A
CONSOLIDATED BALANCE SHEETS
(in thousands, except for per share amounts)
(unaudited)
AS OF JULY 31,
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2003 2002
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CURRENT ASSETS
CASH, CASH EQUIVALENTS AND
INVESTMENTS $ 16,670 $ 16,236
ACCOUNTS
RECEIVABLE, NET 23,765 21,415
INVENTORIES 12,819 11,798
PREPAID EXPENSES 5,900 7,070
OTHER CURRENT ASSETS 3 1,025
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TOTAL CURRENT ASSETS 59,157 57,544
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PROPERTY, PLANT AND EQUIPMENT 49,026 48,622
OTHER ASSETS 18,640 18,869
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TOTAL ASSETS $126,823 $125,035
===================
CURRENT LIABILITIES
CURRENT MATURITIES OF NOTES PAYABLE $ 4,000 $ 2,850
ACCOUNTS PAYABLE 6,856 5,121
DIVIDENDS PAYABLE 461 473
ACCRUED EXPENSES 13,917 11,448
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TOTAL CURRENT LIABILITIES 25,234 19,892
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LONG-TERM LIABILITIES
NOTES PAYABLE 27,400 31,400
OTHER NONCURRENT LIABILITIES 5,175 4,672
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TOTAL LONG-TERM LIABILITIES 32,575 36,072
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STOCKHOLDERS' EQUITY 69,014 69,071
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $126,823 $125,035
===================
BOOK VALUE PER SHARE OUTSTANDING $ 12.38 $ 12.30
ADDITIONS TO AND ACQUISITIONS OF
PROPERTY, PLANT AND
EQUIPMENT FOURTH QUARTER $ 2,225 $ 1,159
YEAR TO DATE $ 9,476 $ 4,096
DEPRECIATION AND $ $
AMORTIZATION CHARGES FOURTH QUARTER $ 1,865 $ 2,161
YEAR TO DATE $ 8,534 $ 8,785