SEC Filing - Oil-Dri Corporation Of America

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 April 30, 1995 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 - 5,118,824 Shares (Including 332,196 Treasury Shares) Class B Stock - 2,114,694 Shares

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Financial Position ASSETS April 30 July 31 (Unaudited) 1995 1994 1994 CURRENT ASSETS Cash and Cash Equivalents $ 7,245,120 $ 8,474,756 $ 6,394,315 Investment Securities, at Cost 1,602,028 4,760,889 3,351,423 Accounts Receivable 22,686,856 20,863,356 19,854,899 Allowance for Doubtful Accounts ( 603,482) ( 242,618) ( 171,940) Inventories 10,551,549 9,916,081 11,203,008 Prepaid Expenses and Taxes 6,642,597 4,142,662 3,730,298 Total Current Assets 48,124,668 47,915,126 44,362,003 PROPERTY, PLANT AND EQUIPMENT - AT COST Cost 105,551,718 95,043,969 100,192,811 Less Accumulated Depreciation and Amortization (45,543,896) (38,186,425) (39,949,247) Total Property, Plant and Equipment, Net 60,007,822 56,857,544 60,243,564 OTHER ASSETS Excess of Investment in Subsidiaries Over Fair Value of Assets (Net of Accumulated Amortization) 4,337,514 4,469,515 4,436,334 Other 3,755,190 3,290,638 3,225,281 Total Other Assets 8,092,704 7,760,153 7,661,615 TOTAL ASSETS $116,225,194 $112,532,823 $112,267,182

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Financial Position LIABILITIES & STOCKHOLDERS EQUITY April 30 July (Unaudited) 1995 1994 1994 CURRENT LIABILITIES Current Maturities of Notes $ 597,959 $ 1,279,361 $ 1,243,479 Payable Accounts Payable - Trade 4,893,316 4,527,369 4,677,793 Dividends Payable 518,836 468,859 449,302 Accrued Expenses 9,222,145 9,530,770 9,230,664 Total Current Liabilities 15,232,256 15,806,359 15,601,238 NONCURRENT LIABILITIES Notes Payable 20,925,659 21,524,621 21,521,243 Deferred Income Taxes 325,406 754,796 323,379 Deferred Compensation 1,722,484 1,580,151 1,761,818 Other 273,706 - - Total Noncurrent Liabilities 23,247,255 23,859,568 23,606,440 Total Liabilities 38,479,511 39,665,927 39,207,678 STOCKHOLDERS EQUITY Common Stock 723,352 723,336 723,352 Paid-In Capital in Excess of Par 7,657,394 7,654,851 7,657,394 Value Retained Earnings 75,449,203 68,850,188 70,077,278 Cumulative Translation Adjustment (996,222) (1,049,054) (1,135,951) 82,833,727 76,179,321 77,322,073 Less Treasury Stock, At Cost (5,088,044) (3,312,425) (4,262,569) Total Stockholders Equity 77,745,683 72,866,896 73,059,504 TOTAL LIABILITIES & STOCKHOLDERS $116,225,194 $112,532,823 $112,267,182 EQUITY

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Income and Retained Earnings Nine Months Ended April 30 1995 1994 (Unaudited) (Unaudited) Net Sales $109,360,556 $108,274,994 Cost Of Sales 81,371,973 78,624,184 Gross Profit 27,988,583 29,650,810 Selling, General And Administrative 17,281,450 17,953,434 Expenses Operating Income 10,707,133 11,697,376 OTHER INCOME (EXPENSE) Interest Expense (1,457,217) (1,213,222) Interest Income 286,137 262,981 Foreign Exchange Gain (Loss) (4,514) 5,111 Other, Net (168,325) 85,962 (1,343,919) (859,168) Income Before Income Taxes 9,363,214 10,838,208 Income Taxes 2,430,985 2,656,933 Net Income 6,932,229 8,181,275 RETAINED EARNINGS Balance at Beginning of Year 70,077,278 62,031,814 Less Cash Dividends Declared (1,560,304) (1,362,901) Retained Earnings - April 30 $75,449,203 $68,850,188 Average Shares Outstanding 6,947,709 7,017,894 Net Income Per Share $1.00 $1.17

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Income and Retained Earnings Three Months Ended April 30 1995 1994 (Unaudited) (Unaudited) Net Sales $34,732,345 $37,270,906 vost Of Sales 26,750,874 27,998,348 Gross Profit 7,981,471 9,272,558 Selling, General And Administrative 5,411,016 5,952,705 Expenses Operating Income 2,570,455 3,319,853 OTHER INCOME (EXPENSE) Interest Expense (472,309) (409,423) Interest Income 118,797 86,135 Foreign Exchange Gain (Loss) 6,735 (431) Other, Net (99,417) 89,862 (446,194) (233,857) Income Before Income Taxes 2,124,261 3,085,996 Income Taxes 584,254 730,008 Net Income $ 1,540,007 $ 2,355,988 Average Shares Outstanding 6,928,923 7,014,995 Net Income Per Share $ 0.22 $ 0.34

OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES Consolidated Statement of Cash Flows For the Nine Months Ended April 30 1995 1994 Unaudited Unaudited CASH FLOWS FROM OPERATING ACTIVITIES Net Income $6,932,229 $8,181,275 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 5,796,844 4,748,936 Provision for bad debts 38,843 56,487 (Increase) Decrease in: Accounts Receivable (2,397,324) (2,492,384) Inventories 687,155 (1,904,614) Prepaid Expenses and Taxes (2,932,901) (1,607,148) Other Assets ( 475,768) (381,839) Increase (Decrease) in: Accounts Payable 212,120 (942,454) Accrued Expenses 15,262 1,208,227 Deferred Taxes and Noncurrent Income Taxes - (461,144) Deferred Compensation ( 39,334) 200,205 Other 273,706 - Total Adjustments 1,178,603 (1,575,728) Net Cash Used In Operating Activities 8,110,832 6,605,547 CASH FLOWS FROM INVESTING ACTIVITIES Capital Expenditures (5,464,611) (8,169,961) Purchases of Investment Securities (2,781,036) (8,014,406) Dispositions of Investment Securities 4,534,553 8,726,762 Other 19,698 295,175 Net Cash Used in Investing Activities (3,691,396) (7,162,430) CASH FLOWS FROM FINANCING ACTIVITIES Principal Payments on Long-Term Debt (1,241,104) (741,319) Proceeds from Issuance of Long-Term Debt - 5,036,745 Proceeds from Issuance of Common Stock - 697,899 Dividends Paid (1,496,951) (1,346,791) Foreign Currency Translation Adjustment (5,101) 18,493 Purchases of Treasury Stock (825,475) (944,618) Net Cash Used In Financing Activities (3,568,631) 2,720,409 Net (Decrease) in Cash and Cash Equivalents 850,805 2,163,526 Cash and Cash Equivalents, Beginning of 6,394,315 6,311,230 Year Cash and Cash Equivalents, April 30 $7,245,120 $8,474,756

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NINE MONTHS ENDED APRIL 30, 1995 COMPARED TO NINE MONTHS ENDED APRIL 30, 1994 RESULTS OF OPERATIONS Consolidated net sales for the nine months ended April 30, 1995 were $109,361,000, an increase of 1.0% over net sales of $108,275,000 in the first nine months of fiscal 1994. Net income for the first nine months of fiscal 1995 was $6,932,000 or $1.00 per share, a decrease of 15.3% from $8,181,000 or $1.17 per share earned in the nine months ended April 30, 1994. Domestic and U.S. Export Sales Domestic net sales of industrial and environmental sorbents decreased $724,000 (5.1%) from prior years levels. Sales of industrial clay sorbents decreased slightly by $229,000 (2.5%) while sales of non-clay sorbents decreased $495,000 (10.1%)from the same period last year. The non- clay sorbents market continues to exhibit increasing competition in the markets in which the Company participates. Domestic net sales of cat box absorbents increased $1,405,000 (2.7%)from the same period last year. This growth is the result of increased shipments of scoopable cat litters in both grocery and mass merchandise markets, and increased sales of coarse cat litters in the mass merchandise market, predominantly private labels. Domestic net sales of agricultural products decreased $1,016,000 (7.0%) from the same period last fiscal year due to production schedule changes at certain agricultural chemical producers. Sales of specialty absorbents, primarily fluid filtration and purification products decreased $416,000 (5.3%) from fiscal 1994 due primarily to reduced demand associated with high quality crude oil being refined and the effect of increased competition. Sales by the Companys transportation subsidiary increased $740,000 due to expansion of the fleet. Gross Margins Consolidated gross profits as a percentage of net sales for the nine months ended April 30, 1995 decreased to 25.6% from 27.4% in the first nine months of fiscal 1994. A number of factors contributed to this decline, including a) changes in sales mix towards lower margin products, particularly in the consumer market, b) increased costs of packaging materials and transportation which, due to competitive pressures, have not been fully recovered in the form of price increases, and, c) in the third quarter, reduced production, resulting in lower absorption of fixed overhead. Operating and Expenses and Interest Operating expenses as a percentage of net sales decreased to 15.8% in the nine months ended April 30, 1995 from 16.6% in the same period last year. This change reflects continued selling and administrative cost controls. Interest expense increased $244,000 due to increased average debt outstanding. Interest income increased slightly from fiscal 1994 due to interest rate increases. Taxes The Companys effective tax rate was 26.0% of income in the first nine months of fiscal 1995 as compared to 24.5% in the same period last year. This change is a result of two factors: a lower share of domestic income was subject to depletion allowances and a greater share of total income was earned by higher tax paying foreign subsidiaries.

Balance Sheet Total assets of the Company increased $3,958,000 from fiscal year end balances. Current assets increased $3,763,000 from year end due to higher accounts receivable, inventory and prepaid balances. Property, plant and equipment, net of accumulated depreciation, decreased $236,000. Total liabilities decreased $728,000 in the nine months ended April 30, 1995. Current liabilities decreased $369,000 while non-current liabilities decreased $359,000 from July 31, 1994. Outlook for the Coming Quarter The Company anticipates that sales for the last quarter of the fiscal year will not materially change from the same period in fiscal 1994. With the leveling of sales in the quarter, earnings are not anticipated to exceed those of the fourth quarter of fiscal 1994. LIQUIDITY AND CAPITAL RESOURCES The current ratio increased to 3.16 at April 30, 1995 from 2.84 at July 31, 1994. Working capital increased $4,131,000 in the nine months ended April 30, 1995 to $32,892,000. Cash provided by operations continues to be the Companys primary source of funds to finance operating needs and capital expenditures. During the first nine months of the fiscal year, balances of cash equivalents and other investments increased $851,000. Cash provided by operating activities was used to fund capital expenditures of $5,465,000, to pay dividends of $1,497,000, to reduce long-term debt by $1,241,000 and to repurchase shares of the Companys common stock at a cost of $825,000. Total cash and investment balances held by the Companys foreign subsidiaries at April 30, 1995 and 1994 were $2,898,000 and $4,276,000 respectively. THREE MONTHS ENDED APRIL 30, 1995 COMPARED TO THREE MONTHS ENDED APRIL 30, 1994 RESULTS OF OPERATIONS Consolidated net sales for the three months ended April 30, 1995 were $34,732,345 a decrease of 7.3% from net sales of $37,271,000 in the same period last year. Net income for the quarter ended April 30, 1995 was $1,540,000 or $0.22 per share, a decrease of 34.6% from net income of $2,356,000 or $0.34 per share reported in the quarter ended April 30, 1994. Domestic and U.S. Export Sales Domestic net sales of industrial and environmental sorbents decreased $543,000 (10.3%). Sales of industrial clay sorbents decreased $217,000 (6.4%). Sales of non-clay sorbents decreased $326,000 (17.2%). Domestic net sales of cat box absorbents, agricultural products and specialty absorbents decreased $1,539,000 (9.5%), $604,000 (11.5%) and $64,000 (14.0%) respectively in the third quarter of fiscal 1995 compared to the same period last year. Sales by transportation services increased $413,000 (17.3%)in the third quarter of fiscal 1995 as compared to the third quarter of fiscal 1994. The decrease in sales of cat box absorbents was related to two factors: a) changes in the timing and extent of promotional activities scheduled during this years third quarter vs. last year, and b) milder weather than during the same period last year, reducing demand for cat litter as a traction aid. Other factors contributing to these quarterly variations are substantially the same as those noted above for the first 9 months of the fiscal year.

Gross Profits Gross profit for the three months ended April 30, 1995 decreased to 23.0% of sales as compared to 24.9% in the third quarter of fiscal 1994. Operating Expenses and Interest Operating expenses decreased slightly to 15.6% of sales in the third quarter of fiscal 1995 from 16.0% in the same period last year. Interest expense in the third quarter of fiscal 1995 compared to the third quarter of fiscal 1994 increased $63,000. Interest income increased $33,000 in the same period. Taxes The Companys effective tax rate in the third quarter of fiscal 1995 was 27.5% of income as compared to 23.7% in the same period last year. FOREIGN OPERATIONS The Companys net sales by its foreign subsidiaries for the nine months ended April 30, 1995 were $8,625,000 constituting 7.9% of sales. This represents an increase of $907,000 or 11.8% from the first nine months of fiscal 1994 in which foreign subsidiary sales were $7,718,000 and constituted 7.1% of sales. This increase is primarily due to increased sales of cat box absorbents in Canada. Net incomeof the Companys foreign subsidiaries for the nine months ended April 30,1995 was $358,000 compared with $206,000 in the first nine months of fiscal 1994. Identifiable assets of the Companys foreign subsidiaries as of April 30, 1995 were $9,408,000 a slight decrease from 9,608,000 as of July 31, 1994. The Companys net sales by its foreign subsidiaries for the three months ended April 30, 1995 were $2,727,000 constituting 7.9% of sales. This represents an increase of $169,000 or 6.6% from the third quarter of fiscal 1994 in which foreign subsidiary sales were $2,558,000 and constituted 6.9% of sales. Net income of the Companys foreign subsidiaries for the three months ended April 30, 1995 was $137,100 compared with $49,000 in the third quarter of fiscal 1995.

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: June 5, 1995

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 April 30, 1995 02/01/95 to 2/28/95 28 6,949,822 194,595,016 03/01/95 to 3/01/95 1 6,946,922 6,946,922 03/02/95 to 3/02/95 1 6,945,922 6,945,922 03/03/95 to 3/05/95 3 6,943,922 20,831,766 03/06/95 to 3/06/95 1 6,942,722 6,942,722 03/07/95 to 3/07/95 1 6,936,522 6,936,522 03/08/95 to 3/09/95 2 6,934,822 13,869,644 03/10/95 to 3/13/95 4 6,932,822 27,731,288 03/14/95 to 3/14/95 1 6,932,322 6,932,322 03/15/95 to 3/15/95 1 6,931,322 6,931,322 03/16/95 to 3/19/95 4 6,929,822 27,719,288 03/20/95 to 3/20/95 1 6,928,822 6,928,822 03/21/95 to 3/21/95 1 6,928,322 6,928,322 03/22/95 to 3/22/95 1 6,927,822 6,927,822 03/23/95 to 3/23/95 1 6,927,322 6,927,322 03/24/95 to 3/26/95 3 6,911,322 20,733,966 03/27/95 to 4/30/95 35 6,901,322 241,546,270 89 616,375,258 6,925,565 Assuming exercise of options reduced by the number of shares which could have been purchased with the proceeds from exercise of such options. 3,358 6,928,923 April 30, 1995 02/01/94 to 3/21/94 49 6,998,285 342,915,965 03/22/94 to 4/30/94 40 6,999,966 279,998,640 89 622,914,605 6,999,041 Assuming exercise of options reduced by the number of shares which could have been purchased with the proceeds from exercise of such options. 15,954 7,014,995

5 9-MOS JUL-31-1995 APR-30-1995 7,245,120 1,602,028 22,686,856 (603,482) 10,551,549 48,124,668 105,551,718 (45,543,896) 116,225,194 15,232,256 20,925,659 723,352 0 0 77,022,331 116,225,194 109,360,556 109,360,556 81,371,973 102,428,327 1,343,919 38,843 1,457,217 9,363,214 2,430,985 6,932,229 0 0 0 6,932,229 1.00 1.00