SEC Filing - Oil-Dri Corporation Of America

CONFORMED COPY SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended October 31, 1994 Commission File Number 0-8675 OIL-DRI CORPORATION OF AMERICA (Exact name of registrant as specified in its charter) DELAWARE 36-2048898 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 410 North Michigan Avenue Chicago, Illinois 60611 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (312) 321-1515 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for at least the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Common Stock - 5,100,623 Shares (Including 283,696 Treasury Shares) Class B Stock - 2,132,895 Shares

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Financial Position ASSETS [CAPTION] October 31 July 31 (Unaudited) 1994 1993 1994 CURRENT ASSETS Cash and Cash Equivalents $ 2,248,147 $ 2,586,077 $ 6,394,315 Investment Securities, at Cost 3,586,569 5,234,971 3,351,423 Accounts Receivable 24,424,847 19,619,457 19,854,899 Allowance for Doubtful Accounts (186,038) (211,144) (171,940) Inventories 12,592,104 9,719,105 11,203,008 Prepaid Expenses and Taxes 3,879,701 3,164,016 3,730,298 Total Current Assets 46,545,330 40,112,482 44,362,003 PROPERTY, PLANT AND EQUIPMENT - AT COST Cost 102,235,020 90,304,566 100,192,811 Less Accumulated Depreciation and Amortization 41,763,672 35,623,509 39,949,247 Total Property, Plant and Equipment, Net 60,471,348 54,681,057 60,243,564 OTHER ASSETS Excess of Investment Subsidiary Over Fair Value of Assets (Net of Accumulated amortization) 4,403,394 4,527,859 4,436,334 Other 3,346,939 2,835,546 3,225,281 Total Other 7,750,333 7,363,405 7,661,615 Assets TOTAL ASSETS $114,767,011 $102,156,944 $112,267,182

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Financial Position LIABILITIES & STOCKHOLDERS EQUITY October 31 July 31 (Unaudited) 1994 1993 1994 CURRENT LIABILITIES Current Maturities of Note Payable $ 649,944 $1,017,142 $ 1,243,479 Accounts Payable - Trade 5,258,876 4,005,840 4,677,793 Income Taxes Payable - 296,812 - Dividends Payable 520,552 454,117 449,302 Accrued Expenses 9,377,605 8,505,606 9,230,664 Total Current Liabilities 15,806,977 14,279,517 15,601,238 NONCURRENT LIABILITIES Notes Payable 21,519,373 17,170,020 21,521,243 Deferred Income Taxes 326,284 1,209,486 323,379 Deferred Compensation 1,610,740 1,456,309 1,761,818 Total Noncurrent Liabilities 23,456,397 19,835,815 23,606,440 Total Liabilities 39,263,374 34,115,332 39,207,678 STOCKHOLDERS EQUITY Common Stock 723,352 720,208 723,352 Paid-In Capital in Excess of Par Value 7,657,394 7,255,015 7,657,394 Retained Earnings 72,375,658 64,151,733 70,077,278 Cumulative Translation Adjustment (954,458) (1,026,811) (1,135,951) 79,801,946 71,100,145 77,322,073 Less Treasury Stock, At Cost 4,298,309 3,058,533 4,262,569 Total Stockholders 75,503,637 68,041,612 73,059,504 Total Liabilities & Stockholders Equity $114,767,011 $102,156,944 $112,267,182

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Income and Retained Earnings Three Months Ended October 31 1994 1993 (Unaudited) (Unaudited) Net Sales $36,799,337 $33,554,070 Cost Of Sales 26,631,621 23,824,916 Gross Profit 10,167,716 9,729,154 Selling, General And Administrative Expenses 5,995,711 5,984,119 Operating Income 4,172,005 3,745,035 OTHER INCOME (EXPENSE) Interest Expense (487,535) (389,325) Interest Income 103,539 99,248 Foreign Exchange Gain (Loss) 3,369 1,233 Other, Net (21,496) (15,152) (402,123) (303,996) Income Before Income Taxes 3,769,882 3,441,039 Income Taxes 950,950 866,300 Net Income 2,818,932 2,574,739 RETAINED EARNINGS Balance at Beginning of Year 70,077,278 62,031,814 Less: Cash Dividends Declared 520,552 454,820 Retained Earnings - October 31 $72,375,658 $64,151,733 Average Shares Outstanding 6,957,700 7,027,506 Net Income Per Share $ 0.41 $ 0.37

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Cash Flows For the Three Months Ended October 31 (Unaudited) 1994 1993 Unaudited Unaudited CASH FLOWS FROM OPERATING ACTIVITIES Net Income $2,818,932 $2,574,739 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 1,821,537 1,558,384 Provision for bad debts 9,229 24,232 (Increase) Decrease in: Accounts Receivable (4,515,026) (1,231,276) Inventories (1,350,335) (1,697,586) Prepaid Expenses and Taxes (154,179) (365,412) Other Assets (97,794) (40,199) Increase (Decrease) in: Accounts Payable 595,723 (1,595,002) Income Taxes Payable - 60,945 Accrued Expenses 168,050 165,683 Deferred Compensation (151,078) 76,363 Total Adjustments (3,673,873) (3,053,748) Net Cash Used In Operating Activities ( 854,941) (479,009) CASH FLOWS FROM INVESTING ACTIVITIES Capital Expenditures (2,025,333) (2,528,594) Purchases of Investment Securities (2,116,842) (4,251,980) Dispositions of Investment Securities 1,905,413 4,610,717 Other 7,600 - Net Cash Used in Investing Activities (2,229,162) (2,169,857) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Short Term Borrowings - 362,895 Principal Payments on Long Term Debt (595,405) (684,289) Proceeds from Issuance of Common Stock - 294,935 Dividends Paid (455,483) (453,452) Foreign Currency TranslatioN Adjustment 24,563 94,350 Purchases of Treasury Stock (35,740) (690,726) Net Cash Used In Financing Activities (1,062,065) (1,076,287) Net (Decrease) in Cash and Cash Equivalents (4,146,168) (3,725,153) Cash and Cash Equivalents, Beginning of Year 6,394,315 6,311,230 Cash and Cash Equivalents, October 31 $ 2,248,147 $2,586,077

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THREE MONTHS ENDED OCTOBER 31, 1994 COMPARED TO THREE MONTHS ENDED OCTOBER 31, 1993 RESULTS OF OPERATIONS Consolidated net sales for the three months ended October 31, 1994 were $36,799,000, an increase of $3,245,000, or 9.7%, over sales of $33,554,000 in the first three months of fiscal 1994. Net income for the three months ended October 31, 1994 was $2,819,000 or $0.41 per share, an increase of 9.5% from $2,575,000 or $0.37 per share earned in the first quarter of fiscal 1994. Net sales of industrial and environmental sorbents decreased $241,000 from prior year levels. Sales of industrial clay absorbents decreased slightly in dollar volume while sales of nonclay sorbents decreased $202,000 or 13.1%, reflecting increased competition in the markets in which the Company participates. Sales of cat box absorbents increased $2,484,000 or 14.7% from fiscal 1994 first quarter results. This growth is primarily the result of sales increases in branded and private label products, both scoopable and traditional coarse litter, in both the grocery and mass merchandise markets. Sales of agricultural absorbents increased $397,000 or 9.2% from fiscal 1994. Worldwide sales of fluid filtration and purification products remained unchanged from prior year levels. Consolidated gross profit as a percentage of net sales for the three months ended October 31, 1994 decreased to 27.6% from 29.0% in the first three months of fiscal 1993. Changes in sales mix towards greater value added products was offset by increased costs of packaging materials and shipping. Operating expenses as a percentage of net sales decreased to 16.3% in the first quarter of fiscal 1995 from 17.8% in the first quarter of fiscal 1994. This change reflects continued emphasis on controlling variable costs and matching fixed overhead costs to volume. Interest expense increased $98,200 due to increased debt levels. Interest income increased slightly. The Companys effective tax rate was unchanged at 25.5% of income in the first quarter of 1995 as compared to 25.2% the first quarter of fiscal 1994. Total assets of the Company increased $2,500,000 during the three months ended October 31, 1994. Current assets increased $2,183,000 or 4.9% from fiscal year end balances reflecting increased accounts receivable and inventory balances offset against reduced cash and investments to fund increased sales. Property, plant and equipment, net of accumulated depreciation, increased $228,000. Total liabilities in the three months ended October 31, 1994 increased slightly. Current liabilities increased $206,000 or 1.3% from July 31, 1994 balances while noncurrent liabilities decreased $150,000 or 0.6% from year end. The Company expects recent sales patterns to continue in fiscal 1995. Growth is expected to come primarily from the cat box and fluid purification product lines. Consumer growth is expected to be achieved through increased distribution in the grocery industry and by maintaining the Companys strong position in the fast growing mass merchandising and warehouse club outlets. Growth of specialty adsorbents is expected to continue with increased market penetration of the Companys value-added fluid filtration and purification products. Finally, the Companys recently completed expansion of its Ripley, Mississippi manufacturing facility is expected to provide significant new capacity for the agricultural product line, relieving capacity constraints experienced during fiscal 1994.

LIQUIDITY AND CAPITAL RESOURCES The current ratio increased to 2.94 at October 31, 1994 from 2.84 at July 31, 1994. Working capital increased $1,978,000 in the three months ended October 31, 1994 to $30,738,000. Cash provided by operations continues to be the Companys primary source of funds to finance operating needs and capital expenditures. During the quarter the balances of cash, cash equivalents and other investments declined $3,911,000. This reduction in cash and investments was used to fund capital expenditures of $2,025,000, to pay dividends of $455,000 and to reduce debt by $595,000. Total cash and investment balances held by the Companys foreign subsidiaries at October 31, 1994 and 1993 were $3,501,000 and $4,408,000 respectively. FOREIGN OPERATIONS The Companys net sales by its foreign subsidiaries for the three months ended October 31, 1994 were $2,775,000 constituting 7.5% of sales. This represents a increase of $244,000 or 9.6%, primarily due to increased sales in Canada, from the first quarter of fiscal 1994 in which foreign subsidiary sales were $2,531,000 and constituted 7.5% of sales. Net income of the Companys foreign subsidiaries for the three months ended October 31, 1994 was $94,000 compared with $257,000 in the first quarter of fiscal 1994. Identifiable assets of the Companys foreign subsidiaries as of October 31, 1994 were $9,803,000 an decrease of $1,113,000 from $10,916,000 as of October 31, 1993.

Part II - Other Information Item 5. (a) Exhibits: The following documents are an exhibit to this report. Exhibit - 11 - Statement Re: Computation of per share earnings. (b) During the quarter for which this report is filed, no reports on Form 8-K were filed.

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 thereunto duly authorized. OIL-DRI CORPORATION OF AMERICA (Registrant) BY /s/ Donald J. Deegan Donald J. Deegan Director of Finance and Accounting, Chief Accounting Officer BY /s/ Richard M. Jaffee Richard M. Jaffee President Dated: December 14, 1994

INDEX TO EXHIBITS EXHIBIT NUMBER EXHIBIT TITLE SEQUENTIALLY NUMBER PAGE (11) Statement Re: Computation of Per Share 12 Earnings

Exhibit 11 OIL-DRI CORPORATION OF AMERICA Computation of Weighted Average Number of Shares Outstanding Average Shares- (Weighted Number Number of Shares) Number of Shares Weighted of Days Quarter End Period Days Outstanding Shares As Adjusted October 31, 1994 08/01/94 to 08/08/94 8 6,951,822 55,614,576 08/09/94 to 10/31/94 84 6,949,822 583,785,048 92 639,399,624 6,949,996 Assuming exercise of options reduced by the number of shares which could have been purchased with the proceeds from exercise of such options. 7,704 6,957,700 October 31, 1993 08/01/93 to 08/11/93 11 6,991,285 76,904,135 08/12/92 to 08/23/93 12 6,993,827 83,925,924 08/24/92 to 09/02/93 10 6,995,174 69,951,740 09/03/93 to 09/14/93 12 6,995,638 83,947,656 09/15/93 to 09/19/93 5 6,996,416 34,982,080 09/20/93 to 09/21/93 2 6,997,041 13,994,082 09/22/93 to 09/29/93 8 6,998,121 55,984,968 09/30/93 to 10/03/93 4 6,993,121 27,972,484 10/04/93 to 10/17/93 14 6,988,121 97,833,694 10/18/93 1 6,983,121 6,983,121 10/19/93 to 10/24/93 6 6,978,121 41,868,726 10/25/93 to 10/28/93 4 6,978,972 27,915,888 10/29/93 to 10/31/93 3 6,980,823 20,942,469 92 643,206,967 6,991,380 Assuming exercise of options reduced by the number of shares which could have been purchased with the proceeds from exercise of such options. 36,126 7,027,506

5 QTR-1 JUL-31-1994 OCT-31-1994 2,248,147 3,586,569 24,424,847 (186,038) 12,592,104 46,545,330 102,235,020 41,763,672 114,767,011 15,806,977 21,519,373 723,352 0 0 74,780,285 114,767,011 36,799,337 36,799,337 26,631,621 33,980,405 402,123 9,229 487,535 3,769,882 950,950 2,818,932 0 0 0 2,818,932 0.41 0.41