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)
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March
10, 2010
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|
Oil-Dri
Corporation of America
|
|
(Exact
name of registrant as specified in its
charter)
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|
Delaware
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001-12622
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36-2048898
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||
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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.)
|
|
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
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(312)
321-1515
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(Former
name or former address, if changed since last
report.)
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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 March
10, 2010, Oil-Dri Corporation of America (the “Registrant”) issued a press
release announcing its results of operations for its second quarter and
six-month period ended January 31, 2010. 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
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Exhibit
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||
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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 March 10,
2010
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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: March
10, 2010
Exhibit
Index
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Exhibit
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||
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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 March 10,
2010
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 |
Exhibit
99.1
News
Release
Release:
Immediate
Contact:
Ronda J. Williams
&
#160;312-706-3232
Oil-Dri
Announces Second Quarter and Six-Month Results
CHICAGO
– (March 10, 2010) – Oil-Dri Corporation of America (NYSE: ODC) reported
net sales for the second quarter of $54,734,000, a 7% decrease compared
with net sales of $59,130,000 for the same quarter of the previous
year. Net income for the second quarter was $2,262,000, or
$0.31 per diluted share, a 6% decrease compared with net income of
$2,372,000, or $0.33 per diluted share in the same quarter one year
ago.
Net
sales for the six-month period were $108,138,000, a 12% decrease compared
with net sales of $122,258,000 for the same period one year
ago. Net income for the six-month period was $4,456,000, or
$0.61 per diluted share, a 5% decrease compared with net income of
$4,618,000, or $0.64 per diluted share, in the same period one year
ago.
Second
Quarter Review
President
and Chief Executive Officer Daniel S. Jaffee said, “While we continue to
experience the effects of Walmart’s plan to focus on a reduced number of
brands, the overall business is healthy, showing substantial cash
generation, improved margins and income growth in our Business to Business
Products Group.
“By
focusing on profitable markets, we have experienced significant growth in
our bleaching clay and animal health products. We have also
benefited from lower production costs. The combination of these
two factors improved our gross profit margin in the quarter from 20% to
23%.”
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Quarterly
Business Review
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|
·
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Net
sales for the Company’s Business to Business Products Group were
$36,133,000 and group income was $9,426,000 for the six-month
period. Net sales for the quarter were $18,563,000 and group
income was $4,917,000. Net sales and unit volume were up for
Pure-Flo bleaching clays and Calibrin enterosorbents. Net sales
and unit volume were down for agricultural chemical carriers, flowability
aids and co-packaged cat litter products due to weaker demand and
competitive pricing.
|
|
|
·
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Net sales for the Company’s
Retail and Wholesale Products Group were $72,005,000 and group income was
$6,332,000 for the six-month period. Net sales for the quarter
were $36,171,000 and group income was $3,116,000. Net sales and
unit volume were down for Cat’s Pride branded cat litter products
primarily due to Walmart’s decision to reduce distribution of those
products. These declines were partially offset by 34% unit
growth of Cat’s Pride Scoopable cat litter in our grocery retail partners
based on market data provided by Information Resources, Inc. for the
12-week period ending January 31, 2010. Net sales and unit
volume were down for industrial and automotive products due to lower
demand.
|
Financial
Review
On
December 8, 2009, Oil-Dri’s Board of Directors declared quarterly cash dividends
of $0.15 per share of outstanding Common Stock and $0.1125 per share of
outstanding Class B Stock. The dividends were paid March 5, 2010 to
stockholders of record at the close of business on February 19,
2010.
At the
January 31, 2010 closing price of $15.88 per share and assuming cash dividends
continue at the same rate, the annual yield on the Company’s Common Stock is
3.8%. The Company has paid cash dividends continuously since 1974 and
has increased dividends annually for the last seven years.
During
the quarter the Company repurchased 34,000 shares of Common Stock at an average
price of $15.83 per share. The Company’s current repurchase
authorization has 238,243 shares of Common Stock remaining.
Cash,
cash equivalents and short-term investments at January 31, 2010 totaled
$26,863,000. Capital expenditures for the fiscal year totaled
$4,818,000, which was $1,107,000 more than the fiscal year’s depreciation and
amortization of $3,711,000. During
the second quarter, the Company acquired approximately 800 acres of land in the
vicinity of its Thomas County, Georgia production plant. These
purchases totaled $2,300,000. The Company believes that this land
contains high quality mineral reserves.
The
effective tax rate for the first six months of fiscal 2010 was 29% compared with
26% for the same period in fiscal 2009. The increase in the rate is
based on the Company’s projected level and composition of income. The
percentage of income attributable to new higher margin Business to Business
products is greater this fiscal year.
Cash
provided by operations was $13,763,000 for the six-month period primarily due to
improvements in our working capital commensurate with our net sales
declines.
Looking
Forward
Jaffee
continued, “We are pleased that orders have been received from Walmart
reinstating our Cat’s Pride Scoopable and Cat’s Pride Complete cat litter
products in a limited number of stores. While the new store count
overall remains materially reduced from our store count at the end of fiscal
year 2009, we believe that gaining these stores is recognition that Walmart
shoppers are loyal to our Cat’s Pride brand. Our customers will begin
to see Cat’s Pride Scoopable and Cat’s Pride Complete in the reinstated Walmart
stores during the third quarter.”
“The
Producer Price Index is up 5% versus last year, so manufacturers’ costs are on
the rise. We are hopeful that we can continue to manage these costs
going forward in the second half of fiscal 2010.”
###
The
Company will offer a live webcast of the second quarter earnings teleconference
on March 12, 2010 from 10:00 a.m. to 10:30 a.m., Chicago Time. 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.
Calibrin,
Cat’s Pride, and Pure-Flo, and are all registered trademarks of Oil-Dri
Corporation of America.
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.
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.
Consolidated
Statements of Income
(in
thousands, except for per share amounts)
(unaudited)
|
Second
Quarter Ended January 31,
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||||||||||||||||
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2010
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%
of Sales
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2009
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%
of Sales
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|||||||||||||
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Net
Sales
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$ | 54,734 | 100.0 | % | $ | 59,130 | 100.0 | % | ||||||||
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Cost
of Sales
|
(42,064 | ) | 76.9 | % | (47,217 | ) | 79.9 | % | ||||||||
|
Gross
Profit
|
12,670 | 23.1 | % | 11,913 | 20.1 | % | ||||||||||
|
Operating
Expenses
|
(9,187 | ) | 16.8 | % | (8,342 | ) | 14.1 | % | ||||||||
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Operating
Income
|
3,483 | 6.4 | % | 3,571 | 6.0 | % | ||||||||||
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Interest
Expense
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(341 | ) | 0.6 | % | (478 | ) | 0.8 | % | ||||||||
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Other
Income
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79 | 0.1 | % | 85 | 0.1 | % | ||||||||||
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Income
Before Income Taxes
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3,221 | 5.9 | % | 3,178 | 5.4 | % | ||||||||||
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Income
Taxes
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(959 | ) | 1.8 | % | (806 | ) | 1.4 | % | ||||||||
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Net
Income
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$ | 2,262 | 4.1 | % | $ | 2,372 | 4.0 | % | ||||||||
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Net
Income Per Share:
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||||||||||||||||
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Basic
Common
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$ | 0.34 | $ | 0.36 | ||||||||||||
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Basic
Class B Common
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$ | 0.26 | $ | 0.27 | ||||||||||||
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Diluted
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$ | 0.31 | $ | 0.33 | ||||||||||||
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Average
Shares Outstanding:
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||||||||||||||||
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Basic
Common
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5,206 | 5,131 | ||||||||||||||
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Basic
Class B Common
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1,890 | 1,873 | ||||||||||||||
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Diluted
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7,269 | 7,199 | ||||||||||||||
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Six
Months Ended January 31,
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||||||||||||||||
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2010
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%
of Sales
|
2009
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%
of Sales
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|||||||||||||
|
Net
Sales
|
$ | 108,138 | 100.0 | % | $ | 122,258 | 100.0 | % | ||||||||
|
Cost
of Sales
|
(83,145 | ) | 76.9 | % | (97,969 | ) | 80.1 | % | ||||||||
|
Gross
Profit
|
24,993 | 23.1 | % | 24,289 | 19.9 | % | ||||||||||
|
Operating
Expenses
|
(18,158 | ) | 16.8 | % | (17,080 | ) | 14.0 | % | ||||||||
|
Operating
Income
|
6,835 | 6.3 | % | 7,209 | 5.9 | % | ||||||||||
|
Interest
Expense
|
(715 | ) | 0.7 | % | (983 | ) | 0.8 | % | ||||||||
|
Other
Income
|
156 | 0.1 | % | 29 | 0.0 | % | ||||||||||
|
Income
Before Income Taxes
|
6,276 | 5.8 | % | 6,255 | 5.1 | % | ||||||||||
|
Income
Taxes
|
(1,820 | ) | 1.7 | % | (1,637 | ) | 1.3 | % | ||||||||
|
Net
Income
|
$ | 4,456 | 4.1 | % | $ | 4,618 | 3.8 | % | ||||||||
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Net
Income Per Share*:
|
||||||||||||||||
|
Basic
Common
|
$ | 0.67 | $ | 0.70 | ||||||||||||
|
Basic
Class B Common
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$ | 0.50 | $ | 0.53 | ||||||||||||
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Diluted
|
$ | 0.61 | $ | 0.64 | ||||||||||||
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Average
Shares Outstanding:
|
||||||||||||||||
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Basic
Common
|
5,200 | 5,129 | ||||||||||||||
|
Basic
Class B Common
|
1,885 | 1,868 | ||||||||||||||
|
Diluted
|
7,259 | 7,196 | ||||||||||||||
Consolidated
Balance Sheets
(in
thousands, except for per share amounts)
(unaudited)
|
As
of January 31,
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||||||||
|
2010
|
2009
|
|||||||
|
Current
Assets
|
||||||||
|
Cash
and Cash Equivalents
|
$ | 20,864 | $ | 2,272 | ||||
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Investment
in Treasury Securities
|
5,999 | 14,494 | ||||||
|
Accounts
Receivable, net
|
27,210 | 31,399 | ||||||
|
Inventories
|
16,985 | 19,235 | ||||||
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Prepaid
Expenses
|
6,975 | 6,563 | ||||||
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Total
Current Assets
|
78,033 | 73,963 | ||||||
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Property,
Plant and Equipment
|
60,370 | 55,196 | ||||||
|
Other
Assets
|
15,463 | 14,432 | ||||||
|
Total
Assets
|
$ | 153,866 | $ | 143,591 | ||||
|
Current
Liabilities
|
||||||||
|
Current
Maturities of Notes Payable
|
$ | 4,500 | $ | 1,700 | ||||
|
Accounts
Payable
|
5,450 | 6,330 | ||||||
|
Dividends
Payable
|
997 | 921 | ||||||
|
Accrued
Expenses
|
15,053 | 13,327 | ||||||
|
Total
Current Liabilities
|
26,000 | 22,278 | ||||||
|
Long-Term
Liabilities
|
||||||||
|
Notes
Payable
|
16,800 | 21,300 | ||||||
|
Other
Noncurrent Liabilities
|
18,819 | 10,380 | ||||||
|
Total
Long-Term Liabilities
|
35,619 | 31,680 | ||||||
|
Stockholders'
Equity
|
92,247 | 89,633 | ||||||
|
Total
Liabilities and Stockholders' Equity
|
$ | 153,866 | $ | 143,591 | ||||
|
Book
Value Per Share Outstanding
|
$ | 13.02 | $ | 12.81 | ||||
|
Acquisitions
of Property, Plant and
Equipment Second
Quarter
|
$ | 3,491 | $ | 4,205 | ||||
|
Year
to Date
|
$ | 4,818 | $ | 7,757 | ||||
|
Depreciation
and Amortization
Charges Second
Quarter
|
$ | 1,822 | $ | 1,799 | ||||
|
Year to Date
|
$ | 3,711 | $ | 3,684 | ||||
Consolidated
Statements of Cash Flows
(in
thousands)
(unaudited)
|
For
the Six Months Ended
|
||||||||
|
January
31,
|
||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
2010
|
2009
|
||||||
|
Net
Income
|
$ | 4,456 | $ | 4,618 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation
and Amortization
|
3,711 | 3,684 | ||||||
|
Decrease
(Increase) in Accounts Receivable
|
1,842 | (89 | ) | |||||
|
Decrease
(Increase) in Inventories
|
810 | (1,491 | ) | |||||
|
Increase
(Decrease) in Accounts Payable
|
285 | (972 | ) | |||||
|
Increase
(Decrease) in Accrued Expenses
|
783 | (2,784 | ) | |||||
|
Other
|
1,876 | (1,020 | ) | |||||
|
Total
Adjustments
|
9,307 | (2,672 | ) | |||||
|
Net
Cash Provided by Operating Activities
|
13,763 | 1,946 | ||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
|
Capital
Expenditures
|
(4,818 | ) | (7,757 | ) | ||||
|
Net
Dispositions of Investment Securities
|
2,005 | 6,531 | ||||||
|
Other
|
337 | 11 | ||||||
|
Net
Cash Used in Investing Activities
|
(2,476 | ) | (1,215 | ) | ||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Principal
payments on Long-Term Debt
|
(200 | ) | (4,080 | ) | ||||
|
Dividends
Paid
|
(1,991 | ) | (1,838 | ) | ||||
|
Purchase
of Treasury Stock
|
(538 | ) | (649 | ) | ||||
|
Other
|
463 | 162 | ||||||
|
Net
Cash Used in Financing Activities
|
(2,266 | ) | (6,405 | ) | ||||
|
Effect
of exchange rate changes on cash and cash equivalents
|
4 | 1,098 | ||||||
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
9,025 | (4,576 | ) | |||||
|
Cash
and Cash Equivalents, Beginning of Year
|
11,839 | 6,848 | ||||||
|
Cash
and Cash Equivalents, January 31
|
$ | 20,864 | $ | 2,272 | ||||