Oil-Dri Corporation of America (NYSE:ODC), producer and marketer of
sorbent mineral products, announced today its second quarter and
six-month earnings of fiscal 2018.
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Second Quarter |
Year to Date |
|
Ended January 31, 2018 |
Ended January 31, 2018 |
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|
F18 |
F17 |
Change |
F18 |
F17 |
Change |
Consolidated
Results |
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|
|
|
Net Sales |
$ |
68,894,000 |
|
$ |
65,174,000 |
6% |
$ |
135,540,000 |
$ |
131,786,000 |
3% |
Net Income |
$ |
(1,096,000 |
) |
$ |
4,250,000 |
N/A |
$ |
1,954,000 |
$ |
6,259,000 |
-69% |
Earnings per Diluted
Share |
$ |
(0.15 |
) |
$ |
0.58 |
N/A |
$ |
0.26 |
$ |
0.86 |
-70% |
Business to
Business |
|
|
|
|
|
|
Net Sales |
$ |
27,355,000 |
|
$ |
23,261,000 |
18% |
$ |
54,442,000 |
$ |
50,734,000 |
7% |
Segment Operating
Income |
$ |
9,759,000 |
|
$ |
7,815,000 |
25% |
$ |
18,635,000 |
$ |
17,223,000 |
8% |
Retail and
Wholesale |
|
|
|
|
|
|
Net Sales |
$ |
41,539,000 |
|
$ |
41,913,000 |
-1% |
$ |
81,098,000 |
$ |
81,052,000 |
Flat |
Segment Operating
Income |
$ |
2,422,000 |
|
$ |
4,987,000 |
-51% |
$ |
4,787,000 |
$ |
4,480,000 |
7% |
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Daniel S. Jaffee stated, “With the recent passing of my father,
the Board of Directors has appointed me as Chairman. I am humbled
and honored to assume the role and to continue growing Oil-Dri in
my father and grandfather’s legacy.
With respect to financial results, our strategy to focus on
value-added products continued to demonstrate success. Year to date
sales were an all-time record for the first six months of a fiscal
year.
The reduction in net income detailed above was significantly
impacted by a one-time $5,091,000 tax expense adjustment to reflect
the impact on deferred income tax assets under the 2017 Tax Cut and
Jobs Act. The tax expense adjustment effectively reduced diluted
net income per share by $0.69 for the first six months of fiscal
2018.
We saw strong performances by all business to business products
and private label cat litter. Sales of our granules used for
agricultural carrier applications increased approximately 50%
during the quarter. Sales of our Amlan animal health products
increased, specifically in Latin America. Fluids purification
products sold to edible oil, petroleum and biodiesel producers also
increased in the quarter.
We launched the Cat’s Pride Litter for Good campaign late in the
quarter and are excited about the traction gained so far. Now, with
every purchase of a Cat’s Pride Fresh & Light jug, we will be
donating a pound of litter to shelters across America. To date, we
have increased our Cat’s Pride Club membership exponentially,
received thousands of shelter nominations and promised 435,178
pounds of litter donations all helping to reach our goal of
donating five million pounds of litter in 2018.
For more details on our financial results and tax adjustment,
please review the Form 10-Q that was filed today and join us for
our next earnings teleconference on March 12th. Call details are
available on our website’s ‘Events’ page.”
While Oil-Dri’s founding product was granular clay
floor absorbents, it has since greatly diversified its portfolio.
The Company’s mission to “Create Value from Sorbent Minerals” is
supported by its wide array of consumer and business to business
product offerings. In 2016, Oil-Dri celebrated its seventy-fifth
year of business and looks forward to the next milestone.
The Company will host its second quarter fiscal 2018 earnings
teleconference on Monday, March 12, 2018 and its
third quarter teleconference on Monday, June 11,
2018. Both teleconferences will commence at 10:00 am,
Central Time. Dial-in details will be communicated via web alert
approximately one week prior to the calls.
“Oil-Dri”, “Amlan”, “Cats Pride” and “Fresh & Light” are
registered trademarks of Oil-Dri Corporation of America.“ Litter
for Good” is a trademark of 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,” “may,” “assume,” or 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.
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CONSOLIDATED STATEMENTS OF INCOME |
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(in
thousands, except per share amounts) |
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|
(unaudited) |
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Second Quarter Ended January 31 |
|
2018 |
|
% of Sales |
|
2017 |
|
% of Sales |
Net
Sales |
$ |
68,894 |
|
|
100.0 |
% |
|
$ |
65,174 |
|
|
100.0 |
% |
Cost of
Sales |
(49,254 |
) |
|
(71.5 |
)% |
|
(46,049 |
) |
|
(70.7 |
)% |
Gross
Profit |
19,640 |
|
|
28.5 |
% |
|
19,125 |
|
|
29.3 |
% |
Selling,
General and Administrative Expenses |
(14,883 |
) |
|
(21.6 |
)% |
|
(13,538 |
) |
|
(20.7 |
)% |
Operating
Income |
4,757 |
|
|
6.9 |
% |
|
5,587 |
|
|
8.6 |
% |
Interest
Expense |
(199 |
) |
|
(0.3 |
)% |
|
(238 |
) |
|
(0.4 |
)% |
Other Income
(Loss) |
513 |
|
|
0.8 |
% |
|
(105 |
) |
|
(0.2 |
)% |
Income Before
Income Taxes |
5,071 |
|
|
7.4 |
% |
|
5,244 |
|
|
8.0 |
% |
Income Tax
Expense |
(6,167 |
) |
|
(9.0 |
)% |
|
(994 |
) |
|
(1.5 |
)% |
Net (Loss)
Income |
$ |
(1,096 |
) |
|
(1.6 |
)% |
|
$ |
4,250 |
|
|
6.5 |
% |
Net (Loss)
Income Per Share: |
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|
|
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|
|
Basic Common |
$ |
(0.17 |
) |
|
|
|
$ |
0.63 |
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|
Basic Class B Common |
$ |
(0.12 |
) |
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|
$ |
0.47 |
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|
Diluted Common |
$ |
(0.15 |
) |
|
|
|
$ |
0.58 |
|
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|
Average Shares
Outstanding: |
|
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|
|
|
|
|
Basic Common |
5,035 |
|
|
|
|
5,019 |
|
|
|
Basic Class B Common |
2,104 |
|
|
|
|
2,088 |
|
|
|
Diluted Common |
7,139 |
|
|
|
|
7,155 |
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Six Months Ended January 31 |
|
2018 |
|
% of Sales |
|
2017 |
|
% of Sales |
Net
Sales |
$ |
135,540 |
|
|
100.0 |
% |
|
$ |
131,786 |
|
|
100.0 |
% |
Cost of
Sales |
(96,931 |
) |
|
(71.5 |
)% |
|
(91,936 |
) |
|
(69.8 |
)% |
Gross
Profit |
38,609 |
|
|
28.5 |
% |
|
39,850 |
|
|
30.2 |
% |
Selling,
General and Administrative Expenses |
(29,936 |
) |
|
(22.1 |
)% |
|
(31,217 |
) |
|
(23.6 |
)% |
Operating
Income |
8,673 |
|
|
6.4 |
% |
|
8,633 |
|
|
6.6 |
% |
Interest
Expense |
(400 |
) |
|
(0.3 |
)% |
|
(489 |
) |
|
(0.4 |
)% |
Other Income
(Loss) |
637 |
|
|
0.5 |
% |
|
(221 |
) |
|
(0.2 |
)% |
Income Before
Income Taxes |
8,910 |
|
|
6.6 |
% |
|
7,923 |
|
|
6.0 |
% |
Income Tax
Expense |
(6,956 |
) |
|
(5.1 |
)% |
|
(1,664 |
) |
|
(1.3 |
)% |
Net
Income |
$ |
1,954 |
|
|
1.5 |
% |
|
$ |
6,259 |
|
|
4.7 |
% |
Net Income Per
Share: |
|
|
|
|
|
|
|
Basic Common |
$ |
0.29 |
|
|
|
|
$ |
0.93 |
|
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|
Basic Class B Common |
$ |
0.22 |
|
|
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|
$ |
0.70 |
|
|
|
Diluted Common |
$ |
0.26 |
|
|
|
|
$ |
0.86 |
|
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|
Average Shares
Outstanding: |
|
|
|
|
|
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|
Basic Common |
5,030 |
|
|
|
|
5,011 |
|
|
|
Basic Class B Common |
2,097 |
|
|
|
|
2,077 |
|
|
|
Diluted Common |
7,215 |
|
|
|
|
7,145 |
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CONSOLIDATED
BALANCE SHEETS |
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|
(in thousands, except
per share amounts) |
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|
(unaudited) |
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As of January 31 |
|
|
2018 |
|
2017 |
Current
Assets |
|
|
|
|
Cash and Cash Equivalents |
|
$ |
9,381 |
|
|
$ |
17,560 |
|
Short-term Investments |
|
21,894 |
|
|
7,358 |
|
Accounts Receivable, Net |
|
32,309 |
|
|
32,047 |
|
Inventories |
|
22,603 |
|
|
23,217 |
|
Prepaid Expenses (1) |
|
7,967 |
|
|
12,596 |
|
Total Current Assets |
|
94,154 |
|
|
92,778 |
|
Property, Plant
and Equipment, Net |
|
84,289 |
|
|
81,498 |
|
Other Assets
(1) |
|
27,092 |
|
|
32,298 |
|
Total
Assets |
|
$ |
205,535 |
|
|
$ |
206,574 |
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
Current Maturities of Notes Payable |
|
$ |
3,083 |
|
|
$ |
3,083 |
|
Accounts Payable |
|
8,089 |
|
|
7,316 |
|
Dividends Payable |
|
1,559 |
|
|
1,485 |
|
Accrued Expenses |
|
20,603 |
|
|
17,614 |
|
Total Current Liabilities |
|
33,334 |
|
|
29,498 |
|
Noncurrent
Liabilities |
|
|
|
|
Notes Payable |
|
6,092 |
|
|
9,147 |
|
Other Noncurrent Liabilities |
|
39,847 |
|
|
47,424 |
|
Total Noncurrent Liabilities |
|
45,939 |
|
|
56,571 |
|
Stockholders'
Equity |
|
126,262 |
|
|
120,505 |
|
Total
Liabilities and Stockholders' Equity |
|
$ |
205,535 |
|
|
$ |
206,574 |
|
|
|
|
|
|
Book Value Per
Share Outstanding |
|
$ |
17.72 |
|
|
$ |
17.00 |
|
|
|
|
|
|
Acquisitions
of: |
|
|
|
|
Property, Plant
and Equipment |
Second
Quarter |
$ |
2,805 |
|
|
$ |
2,984 |
|
|
Year To
Date |
$ |
6,850 |
|
|
$ |
7,279 |
|
Depreciation
and Amortization Charges |
Second
Quarter |
$ |
3,221 |
|
|
$ |
3,230 |
|
|
Year To
Date |
$ |
6,413 |
|
|
$ |
6,389 |
|
|
|
|
|
|
|
|
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|
(1) Prior year amounts have been retrospectively adjusted to
conform to the current year presentation of current deferred income
taxes required by new guidance under Accounting Standards
Codification (“ASC”) 740, Balance Sheet Classification of Deferred
Taxes.
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CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
(in thousands) |
|
|
|
(unaudited) |
|
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|
|
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|
For the Six Months Ended |
|
January 31 |
|
2018 |
|
2017 |
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
Net
Income |
$ |
1,954 |
|
|
$ |
6,259 |
|
Adjustments to
reconcile net income to net cash |
|
|
|
provided by
operating activities, net of acquisition: |
|
|
|
Depreciation and Amortization |
6,413 |
|
|
6,389 |
|
Decrease (Increase) in Accounts Receivable |
362 |
|
|
(1,829 |
) |
Decrease in Inventories |
75 |
|
|
11 |
|
(Decrease) Increase in Accounts Payable |
(743 |
) |
|
852 |
|
Decrease in Accrued Expenses |
(3,637 |
) |
|
(1,698 |
) |
Increase in Pension and Postretirement
Benefits |
649 |
|
|
1,001 |
|
Other (2) |
6,556 |
|
|
(1,892 |
) |
Total Adjustments |
9,675 |
|
|
2,834 |
|
Net Cash
Provided by Operating Activities |
11,629 |
|
|
9,093 |
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
|
Capital Expenditures |
(6,850 |
) |
|
(7,279 |
) |
Net Purchase of Investment Securities |
1,739 |
|
|
2,831 |
|
Other |
11 |
|
|
2 |
|
Net Cash Used
in Investing Activities |
(5,100 |
) |
|
(4,446 |
) |
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES |
|
|
|
Principal Payments on Long-Term Debt |
(3,083 |
) |
|
(3,083 |
) |
Dividends Paid |
(3,112 |
) |
|
(2,956 |
) |
Purchase of Treasury Stock |
(27 |
) |
|
(122 |
) |
Other |
— |
|
|
377 |
|
Net Cash Used
in Financing Activities |
(6,222 |
) |
|
(5,784 |
) |
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
(21 |
) |
|
68 |
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents |
286 |
|
|
(1,069 |
) |
Cash and Cash
Equivalents, Beginning of Period |
9,095 |
|
|
18,629 |
|
Cash and Cash
Equivalents, End of Period |
$ |
9,381 |
|
|
$ |
17,560 |
|
|
|
|
|
|
|
|
|
(2) Includes a $5,091 one-time adjustment to deferred tax assets
required upon enactment of the 2017 Tax Cut and Jobs Act.
Reagan B. CulbertsonInvestor
Relations ManagerOil-Dri Corporation of
AmericaInvestorRelations@oildri.com(312) 321-1515
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