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) December
9, 2008
Oil-Dri
Corporation of America
(Exact
name of registrant as specified in its charter)
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Delaware
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0-8675
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36-2048898
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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410
North Michigan Avenue
Suite
400
Chicago,
Illinois
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60611-4213
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(Address
of principal executive offices)
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(Zip
Code)
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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 December 9, 2008, Oil-Dri
Corporation of America (the “Registrant”) issued a press release announcing its
results of operations for its first quarter ended October 31, 2008. 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 8.01 Other Events.
Also on December 9, 2008, the
Registrant’s Board of Directors declared quarterly cash dividends of $0.14 per
share of the Registrant’s Common Stock and $0.105 per share of the Registrant’s
Class B Stock. The dividends will be payable on March 6, 2009, to
stockholders of record at the close of business on February 20,
2009. A copy of the Registrant’s press release announcing these
matters is attached as Exhibit 99.2 and the information contained therein is
incorporated herein by reference.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
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Exhibit
Number
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Description of Exhibits
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99.1
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Press
Release dated December 9, 2008 (Quarterly Earnings)
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99.2
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Press
Release dated December 9, 2009 (Cash
Dividends)
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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.
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OIL-DRI
CORPORATION OF AMERICA
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||
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By:
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/s/
Charles P. Brissman
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Charles
P. Brissman
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Vice
President and General
Counsel
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Date: December
9, 2008
Exhibit
Index
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Number
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Description of Exhibits
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99.1
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Press
Release dated December 9, 2008 (Quarterly Earnings)
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99.2
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Press
Release dated December 9, 2008 (Cash
Dividends)
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 |
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Exhibit
99.1
News
Release
Release: Immediate Contact: Ronda
J.
Williams 312-706-3232
Oil-Dri
Announces First Quarter Results
CHICAGO
– (December 9, 2008) – Oil-Dri Corporation of America (NYSE: ODC) today
announced that despite record first quarter net sales, significant
increases in the cost of goods, primarily transportation and energy costs,
resulted in lower earnings compared to the first quarter one year
ago.
Net
sales for the first quarter were $63,128,000, a 14% increase compared with
sales of $55,285,000 in the same quarter one year ago. The
Company reported net income for the quarter of $2,246,000, or $0.31 per
diluted share, an 11% decrease compared with net income of $2,484,000, or
$0.35 per diluted share, in the same quarter one year ago.
First
Quarter Review
President
and Chief Executive Officer Daniel S. Jaffee said, “We saw record net
sales but reduced gross profit margins in the first
quarter. Increased costs for manufacturing, packaging, delivery
and energy brought the gross profit margin in the quarter to 19.6%, down
from 22.5% gross profit margin reported one year ago.
“We
were successful in implementing price increases in both product groups but
not enough to cover the tremendous cost increases
experienced. On a quarter-to-quarter basis, kiln fuel was 46%
greater in this period than one year ago. Similar increases
were absorbed for delivery costs and other energy and energy-related
materials.”
Business
Review
Net
sales for the Company’s Retail and Wholesale Products Group were
$42,483,000 and group income was $3,162,000, a decrease of 27% in the
first quarter. Sales of private label cat litter were strong in
both units and dollars. Industrial and automotive products also
experienced increased unit shipments and dollar sales from new customers
acquired through a small strategic asset acquisition last
quarter. Gross margins for the Group tightened dramatically due
to increased materials, freight and packaging
costs. Manufacturing and processing costs for the Group have
outpaced its ability to implement and benefit from price
increases.
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Net sales
for the Company’s Business-to-Business Products Group were $20,645,000, and
group income was $4,426,000, an increase of 11% in the first
quarter. Sales of the Group’s bleaching clays, agricultural carriers
and co-packaged cat litter products increased in both units and
dollars. Higher marketing and promotional spending offset increased
net sales of the Group’s animal health and nutrition products. While
the Group benefited from increased unit shipments and dollar sales, higher
materials and freight costs decreased gross margins in the quarter.
During
the quarter, the Group launched and obtained regulatory approval in several
important foreign countries for Calibrin-A and Calibrin-Z enterosorbents for
mycotoxin binding. Early work is ongoing to educate our distributors
and customers about the products’ highly effective performance.
Financial
Review
On
October 15, 2008, Oil-Dri’s Board of Directors declared quarterly cash dividends
of $0.14 per share of outstanding Common Stock and $0.105 per share of
outstanding Class B Stock. The dividends were paid on December 5,
2008 to stockholders of record at the close of business on November 21,
2008. At the October 31, 2008 stock closing price of $16.55 per share
and assuming cash dividends continue at the same rate, the annual yield on the
Company’s Common Stock is 3.38%.
The
Company has paid cash dividends continuously since 1974. The
Company’s Board of Directors has increased dividends annually for the past five
years.
During
the quarter, the Company repurchased 40,834 shares of Common Stock at an average
price of $15.78 per share. Cash, cash
equivalents and short-term investments at October 31, 2008, totaled
$16,771,000. Capital expenditures for the quarter totaled $3,552,000,
which was $1,667,000 more than depreciation and amortization of
$1,885,000.
During
the quarter, the Company reported a $486,000 reduction to Other Income as
compared to the first quarter of fiscal 2008. This reduction was
driven by reduced interest income and increased foreign currency exchange
losses.
Looking
Forward
Jaffee
continued, “During the past several months, energy and other commodity prices
have reversed direction and come down sharply. We anticipate some
lower costs in the balance of the year; however, these savings will be moderated
by our natural gas forward buying program under which we have already contracted
for a substantial portion of our planned kiln fuel needs for fiscal
2009.”
###
The
Company will offer a live webcast of the first quarter earnings teleconference
on Wednesday, December 10, 2008, from 10:00 a.m. – 10:30 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 and written transcripts of all teleconferences
are posted on the Oil-Dri website.
Oil-Dri
Corporation of America is a leading supplier of specialty sorbent products for
agricultural, horticultural, fluids purification, specialty markets, animal
health and nutrition, industrial and automotive, and is the world’s largest
manufacturer of cat litter.
Calibrin-A
and Calibrin-Z are trademarks of the 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,” “believe”, “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.
OIL-DRI CORPORATION OF AMERICA
Consolidated
Statements of Income
(in
thousands, except for per share amounts)
(unaudited)
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Three Months Ended October 31,
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||||||||||||||||
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2008
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% of Sales
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2007
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% of Sales
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Net
Sales
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$ | 63,128 | 100.0 | % | $ | 55,285 | 100.0 | % | ||||||||
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Cost
of Sales
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(50,752 | ) | 80.4 | % | (42,855 | ) | 77.5 | % | ||||||||
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Gross
Profit
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12,376 | 19.6 | % | 12,430 | 22.5 | % | ||||||||||
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Operating
Expenses
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(8,738 | ) | 13.8 | % | (8,860 | ) | 16.0 | % | ||||||||
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Operating
Income
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3,638 | 5.8 | % | 3,570 | 6.5 | % | ||||||||||
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Interest
Expense
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(505 | ) | 0.8 | % | (574 | ) | 1.0 | % | ||||||||
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Other
Income
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(56 | ) | (0.1 | %) | 430 | 0.8 | % | |||||||||
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Income
Before Income Taxes
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3,077 | 4.9 | % | 3,426 | 6.2 | % | ||||||||||
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Income
Taxes
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(831 | ) | 1.3 | % | (942 | ) | 1.7 | % | ||||||||
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Net
Income
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$ | 2,246 | 3.6 | % | $ | 2,484 | 4.5 | % | ||||||||
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Net
Income Per Share:
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||||||||||||||||
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Basic
Common
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$ | 0.34 | $ | 0.38 | ||||||||||||
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Basic
Class B Common
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$ | 0.27 | $ | 0.31 | ||||||||||||
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Diluted
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$ | 0.31 | $ | 0.35 | ||||||||||||
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Average
Shares Outstanding:
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||||||||||||||||
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Basic
Common
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5,128 | 5,004 | ||||||||||||||
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Basic
Class B Common
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1,862 | 1,840 | ||||||||||||||
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Diluted
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7,245 | 7,145 | ||||||||||||||
OIL-DRI CORPORATION OF AMERICA
Consolidated
Balance Sheets
(in
thousands, except for per share amounts)
(unaudited)
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As of October 31,
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||||||||
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2008
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2007
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Current
Assets
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||||||||
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Cash
and Cash Equivalents
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$ | 1,308 | $ | 5,370 | ||||
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Investment
in Treasury Securities
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15,463 | 22,350 | ||||||
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Accounts
Receivable, net
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32,763 | 27,579 | ||||||
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Inventories
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19,833 | 17,536 | ||||||
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Prepaid
Expenses
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6,269 | 5,757 | ||||||
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Total
Current Assets
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75,636 | 78,592 | ||||||
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Property,
Plant and Equipment
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52,777 | 52,054 | ||||||
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Other
Assets
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14,729 | 12,410 | ||||||
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Total
Assets
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$ | 143,142 | $ | 143,056 | ||||
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Current
Liabilities
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||||||||
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Current
Maturities of Notes Payable
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$ | 1,700 | $ | 8,080 | ||||
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Accounts
Payable
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7,365 | 6,395 | ||||||
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Dividends
Payable
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917 | 842 | ||||||
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Accrued
Expenses
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13,837 | 13,705 | ||||||
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Total
Current Liabilities
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23,819 | 29,022 | ||||||
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Long-Term
Liabilities
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Notes
Payable
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21,300 | 23,000 | ||||||
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Other
Noncurrent Liabilities
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10,123 | 7,676 | ||||||
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Total
Long-Term Liabilities
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31,423 | 30,676 | ||||||
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Stockholders'
Equity
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87,900 | 83,358 | ||||||
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Total
Liabilities and Stockholders' Equity
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$ | 143,142 | $ | 143,056 | ||||
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Book
Value Per Share Outstanding
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$ | 12.58 | $ | 12.18 | ||||
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Acquisitions
of Property,
Plant and Equipment First
Quarter
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$ | 3,552 | $ | 2,147 | ||||
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Depreciation
and Amortization Charges First Quarter
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$ | 1,885 | $ | 1,862 | ||||
Consolidated
Statements of Cash Flows
(in
thousands)
(unaudited)
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For the Three Months Ended
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||||||||
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October 31,
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||||||||
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2008
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2007
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CASH FLOWS FROM OPERATING ACTIVITIES
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||||||||
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Net
Income
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$ | 2,246 | $ | 2,484 | ||||
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Adjustments to reconcile net
income to net cash provided by operating
activities:
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||||||||
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Depreciation
and Amortization
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1,885 | 1,862 | ||||||
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(Increase)
Decrease in Accounts Receivable
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(1,417 | ) | 295 | |||||
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(Increase)
in Inventories
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(2,089 | ) | (2,299 | ) | ||||
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(Decrease)
Increase in Accounts Payable
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(118 | ) | 296 | |||||
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(Decrease)
in Accrued Expenses
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(2,274 | ) | (2,606 | ) | ||||
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Other
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(815 | ) | (28 | ) | ||||
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Total
Adjustments
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(4,828 | ) | (2,480 | ) | ||||
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Net
Cash (Used in) Provided by Operating Activities
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(2,582 | ) | 4 | |||||
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CASH
FLOWS FROM INVESTING ACTIVITIES
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||||||||
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Capital
Expenditures
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(3,552 | ) | (2,147 | ) | ||||
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Net
Dispositions (Purchases) of Investment Securities
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5,528 | (4,208 | ) | |||||
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Other
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8 | -- | ||||||
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Net
Cash Provided by (Used in) Investing Activities
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1,984 | (6,355 | ) | |||||
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CASH
FLOWS FROM FINANCING ACTIVITIES
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||||||||
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Principal
payments on Long-Term Debt
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(4,080 | ) | (80 | ) | ||||
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Dividends
Paid
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(919 | ) | (834 | ) | ||||
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Purchase
of Treasury Stock
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(644 | ) | -- | |||||
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Other
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(124 | ) | 909 | |||||
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Net
Cash Used in Financing Activities
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(5,767 | ) | (5 | ) | ||||
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Effect
of exchange rate changes on cash and cash equivalents
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825 | (407 | ) | |||||
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Net
(Decrease) in Cash and Cash Equivalents
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(5,540 | ) | (6,763 | ) | ||||
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Cash
and Cash Equivalents, Beginning of Year
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6,848 | 12,133 | ||||||
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Cash
and Cash Equivalents, October 31
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$ | 1,308 | $ | 5,370 | ||||
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Exhibit
99.2
News Release
Release: Immediate Contact: Ronda
J.
Williams 312-706-3232
Oil-Dri
Board of Directors Declares Dividends
CHICAGO
– December 9, 2008 – The Board of Directors of Oil-Dri Corporation of
America (NYSE: ODC) today declared quarterly cash dividends of $0.14 per
share of the Company’s Common Stock and $0.105 per share of the Company’s
Class B Stock.
The
dividends will be payable on March 6, 2009, to stockholders of record at
the close of business on February 20, 2009. The Company has
paid cash dividends continuously since 1974.
###
Oil-Dri
Corporation of America is a leading supplier of specialty sorbent products
for industrial, automotive, agricultural, horticultural and specialty
markets and the world’s largest manufacturer of cat
litter.
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