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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) February 27, 2007
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 jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
410 North Michigan Avenue
Suite 400
Chicago, Illinois 60611-4213
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 321-1515
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(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))
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
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On February 27, 2007, Oil-Dri Corporation of America (the "Registrant") issued a
press release announcing its results of operations for its second quarter ended
January 31, 2007. 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 Form 8-K, including the exhibit, shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, and it shall not be deemed incorporated by reference into any filing under
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.
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(d) Exhibits
Exhibit
Number Description of Exhibits
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99.1 Press Release of the Registrant dated February 27, 2007.
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
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Charles P. Brissman
Vice President and
General Counsel
Date: March 8, 2007
Exhibit Index
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Exhibit
Number Description of Exhibits
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99.1 Press Release of the Registrant dated February 27, 2007.
Exhibit 99.1
RELEASE: Immediate CONTACT: Ronda J. Williams
312-706-3232
OIL-DRI REPORTS SECOND QUARTER AND FIRST HALF RESULTS
CHICAGO - February 27, 2007 - Oil-Dri Corporation of America (NYSE: ODC) today
announced increased net income on decreased net sales for the second quarter
ended January 31, 2007.
The Company reported net sales of $52,873,000 for the quarter, a 2% decrease
compared with net sales of $53,963,000 in the same quarter one year ago. The
Company reported net income for the quarter of $1,963,000, or $0.28 per diluted
share, an 8% increase compared with net income of $1,867,000, or $0.26 per
diluted share, in the same quarter one year ago.
Net sales for the first six-month period were $105,002,000, a 3% increase
compared with sales of $101,752,000 in the same period one year ago. Net income
for the six-month period was $3,610,000, or $0.52 per diluted share, a 30%
increase compared with net income of $2,895,000, or $0.40 per diluted share, in
the same period last fiscal year.
SECOND QUARTER REVIEW
President and Chief Executive Officer Daniel S. Jaffee said, "This quarter we
experienced year over year income growth in our Retail and Wholesale Products
Group. In light of weak net sales in our Business-to-Business Products Group,
this demonstrates the strength of our diverse markets.
"We are encouraged with the progress we have made repairing our gross profit
margins. Despite the sales decline for the quarter, earnings grew and margins
expanded, primarily as a result of price increases implemented earlier this
year.
"Our operating cash flow for the six-month period was $7,113,000, up
significantly from $455,000 in the same period last fiscal year.
"At January 31, 2007, we became an accelerated filer for Securities and Exchange
Commission reporting purposes. As a result, we will be required to comply with
all of the requirements of Section 404 of the Sarbanes-Oxley Act as of July 31,
2007. While we will experience increased expenses over the remainder of the
fiscal year as a result of our compliance efforts, we do not expect these
expenses to have a material impact on our results of operations."
BUSINESS REVIEW
Net sales for the Company's Business-to-Business Products Group were $16,897,000
and group income was $2,851,000 for the second quarter. Net sales were
$33,782,000 and group income was $6,249,000, for the six-month period.
- continued -
Decreased sales of the Group's agricultural carriers, bleaching clays, and
animal health and nutrition products, in both units and dollars, negatively
impacted quarterly results.
Net sales for the Company's Retail and Wholesale Products Group were $35,976,000
and group income was $4,540,000 for the second quarter. Net sales were
$71,220,000 and group income was $8,089,000, for the six-month period. Price
increases drove improved sales dollars for both cat litter and industrial and
automotive products in the United States and Canada and helped repair some of
the margin damage caused a year ago by the dramatic increase in the cost of
natural gas.
FINANCIAL REVIEW
On December 5, 2006, Oil-Dri's Board of Directors declared quarterly cash
dividends of $0.12 per share of outstanding Common Stock and $0.09 per share of
outstanding Class B Stock. The dividends will be payable on March 16, 2007, to
stockholders of record at the close of business on February 9, 2007. At the
January 31, 2007 closing price of $16.36 per share and assuming cash dividends
continue at the same rate, the annual yield on the Company's Common Stock is
2.9%. The Company has paid cash dividends continuously for 32 years.
The Company did not repurchase any Common Stock in the six-month period ended
January 31, 2007.
Cash, cash equivalents and short-term investments at January 31, 2007, totaled
$28,418,000. Capital expenditures for the six-month period totaled $4,098,000,
which was $426,000 more than the period's depreciation and amortization of
$3,672,000.
LOOKING FORWARD
Jaffee said, "We are optimistic about our financial results as we head into the
final two quarters of our fiscal year. There are obvious challenges we face to
recover some of the lost sales momentum we experienced in the second quarter,
but we are confident that we will be able to get back on track."
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The Company will offer a live web cast of the second quarter earnings
teleconference on Wednesday, February 28, 2007, at 10 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 web site.
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.
OIL-DRI CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share amounts)
(unaudited)
SECOND QUARTER ENDED JANUARY 31,
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2007 % OF SALES 2006 % OF SALES
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Net Sales $ 52,873 100.0% $ 53,963 100.0%
Cost of Sales (41,376) 78.3% (43,395) 80.4%
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Gross Profit 11,497 21.7% 10,568 19.6%
Operating Expenses (8,651) 16.4% (7,742) 14.3%
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Operating Income 2,846 5.4% 2,826 5.2%
Interest Expense (641) 1.2% (539) 1.0%
Other Income 475 0.9% 262 0.5%
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Income Before Income Taxes 2,680 5.1% 2,549 4.7%
Income Taxes (717) 1.4% (682) 1.3%
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Net Income $ 1,963 3.7% $ 1,867 3.5%
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Net Income Per Share*:
Basic Common $ 0.32 $ 0.30
Basic Class B Common $ 0.23 $ 0.22
Diluted $ 0.28 $ 0.26
Average Shares Outstanding*:
Basic Common 4,871 5,007
Basic Class B Common 1,815 1,822
Diluted 6,987 7,256
SIX MONTHS ENDED JANUARY 31,
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2007 % OF SALES 2006 % OF SALES
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Net Sales $ 105,002 100.0% $ 101,752 100.0%
Cost of Sales (82,842) 78.9% (82,757) 81.3%
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Gross Profit 22,160 21.1% 18,995 18.7%
Gain on Sale of Long-Lived Assets -- -- 415 0.4%
Operating Expenses (16,812) 16.0% (15,001) 14.7%
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Operating Income 5,348 5.1% 4,409 4.3%
Interest Expense (1,258) 1.2% (969) 1.0%
Other Income 838 0.8% 512 0.5%
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Income Before Income Taxes 4,928 4.7% 3,952 3.9%
Income Taxes (1,318) 1.3% (1,057) 1.0%
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Net Income $ 3,610 3.4% $ 2,895 2.8%
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Net Income Per Share*:
Basic Common $ 0.58 $ 0.46
Basic Class B Common $ 0.43 $ 0.34
Diluted $ 0.52 $ 0.40
Average Shares Outstanding*:
Basic Common 4,861 5,005
Basic Class B Common 1,810 1,823
Diluted 6,952 7,263
* Net Income Per Share and Average Shares Outstanding for the three months and
the six months ended January 31, 2006 have been restated to reflect the
Company's five-for-four stock split, on September 8, 2006.
OIL-DRI CORPORATION OF AMERICA
CONSOLIDATED BALANCE SHEETS
(in thousands, except for per share amounts)
(unaudited)
AS OF JANUARY 31,
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2007 2006
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Current Assets
Cash, Cash Equivalents and Investments $ 28,418 $ 29,485
Accounts Receivable, net 26,920 28,165
Inventories 14,429 15,444
Prepaid Expenses 6,840 8,514
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Total Current Assets 76,607 81,608
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Property, Plant and Equipment 51,313 48,618
Other Assets 12,615 12,916
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Total Assets $ 140,535 $ 143,142
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Current Liabilities
Current Maturities of Notes Payable $ 4,080 $ 3,080
Accounts Payable 6,184 6,158
Dividends Payable 758 608
Accrued Expenses 14,588 14,951
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Total Current Liabilities 25,610 24,797
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Long-Term Liabilities
Notes Payable 31,080 35,160
Other Noncurrent Liabilities 8,610 7,850
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Total Long-Term Liabilities 39,690 43,010
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Stockholders' Equity* 75,235 75,335
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Total Liabilities and Stockholders' Equity $ 140,535 $ 143,142
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Book Value Per Share Outstanding $ 11.28 $ 11.03
Acquisitions of
Property, Plant and Equipment
Second Quarter $ 1,746 $ 1,589
Year to Date $ 4,098 $ 4,624
Depreciation and Amortization Charges
Second Quarter $ 1,848 $ 1,810
Year to Date $ 3,672 $ 3,607
* Stockholders' Equity at January 31, 2007, reflects an adjustment of $1,235,000
(net of tax) taken August 1, 2006 as part of the Company's implementation of
EITF 04-06 "Accounting for Stripping Costs Incurred during Production in the
Mining Industry".
OIL-DRI CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
FOR THE SIX MONTHS ENDED
JANUARY 31,
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CASH FLOWS FROM OPERATING ACTIVITIES 2007 2006
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Net Income $ 3,610 $ 2,895
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization 3,672 3,607
(Increase) in Accounts Receivable (1,010) (4,711)
Decrease (Increase) in Inventories 1,268 (2,758)
(Decrease) Increase in Accounts Payable (968) 1,030
(Decrease) Increase in Accrued Expenses (95) 1,283
Other 636 (891)
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Total Adjustments 3,503 (2,440)
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Net Cash Provided by Operating Activities 7,113 455
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CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (4,098) (4,624)
Net Dispositions/(Purchase) of Investment Securities 848 (8,894)
Other 30 1,000
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Net Cash Used in Investing Activities (3,220) (12,518)
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CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on Long-Term Debt (80) (80)
Dividends Paid (1,509) (1,165)
Purchase of Treasury Stock -- (1,826)
Proceeds from Issuance of Long-Term Debt -- 15,000
Other 618 1,307
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Net Cash (Used in) Provided by Financing Activities (971) 13,236
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Effect of exchange rate changes on cash and cash equivalents 43 (245)
Net Increase in Cash and Cash Equivalents 2,965 928
Cash and Cash Equivalents, Beginning of Year 6,607 5,945
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Cash and Cash Equivalents, January 31 $ 9,572 $ 6,873
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