CHICAGO, IL--(Marketwire - Dec 8, 2011) - Oil-Dri Corporation of America (
First Quarter Business Review
President and Chief Executive Officer Daniel S. Jaffee said, "This quarter's results reflect increased net sales of higher margin products combined with significant promotional spending to support our newly introduced Cat's Pride Fresh & Light cat litter.
"Business to Business products showed significant sales and income growth which helped to defray advertising and promotional costs for Cat's Pride Fresh & Light. During the quarter advertising and promotional expenses were nearly $3,000,000 more than those same expenditures one year ago. We are pleased with the initial positive retailer and consumer response to our new litter and expect distribution to grow for this product throughout the balance of the fiscal year."
First Quarter Segment Review
| Business to Business | First Quarter | |||||
| Fiscal 2012 | Fiscal 2011 | |||||
| Net Sales | $ | 20,934,000 | $ | 19,045,000 | ||
| Segment Income | $ | 7,440,000 | $ | 5,288,000 | ||
Net sales for the Company's Business to Business products were up 10% from one year ago driven by a higher average net selling price which offset the Group's volume decrease. Group income was up 41% in the quarter due to increased product sales. Net sales of fluids purification and animal health products increased, agricultural carriers were flat, and co-packaged cat litters were down. The Group benefited from net sales and volume growth of fluids purification products sold to vegetable oil and petroleum refineries, and increased sales and volume of animal health products for livestock production. Sales of co-packaged cat litters declined as the market for cat litter continues to shift from traditional coarse litter to scoopable litter.
| Retail and Wholesale | First Quarter | ||||||
| Fiscal 2012 | Fiscal 2011 | ||||||
| Net Sales | $ | 38,648,000 | $ | 37,240,000 | |||
| Segment Income | $ | (1,219,000 | ) | $ | 3,066,000 | ||
Net sales for the Company's Retail and Wholesale products for the first quarter were up 4% due to the launch of Cat's Pride Fresh & Light and the benefit of increased sales of Cat's Pride scoopable litters. These sales more than overcame the decline in coarse cat litter and private label accounts. Group income was down due to heavy advertisement and promotional spending for Cat's Pride Fresh & Light cat litters. Industrial floor absorbents and sports field products realized increased net sales in the quarter. The Company's foreign subsidiaries sales were down significantly due to strong competition.
Financial Review
On October 18, 2011, Oil-Dri's Board of Directors declared quarterly cash dividends of $0.17 per share of outstanding Common Stock and $0.1275 per share of outstanding Class B Stock. The dividends were payable December 2, 2011 to stockholders of record at the close of business on November 18, 2011. The Company has paid cash dividends continuously since 1974 and has increased dividends annually for the past eight years.
At the end of the first quarter, the annualized dividend yield on the Company's Common Stock was 3.4%, based on the quarter's stock closing price of $20.05 per share and the latest cash quarterly dividend of $0.17.
Cash, cash equivalents and short-term investments at October 31, 2011, totaled $29,390,000. Capital expenditures for the first quarter totaled $1,611,000, which was $734,000 less than the quarter's depreciation and amortization of $2,345,000.
Looking Forward
Jaffee continued, "We are focused on building brand awareness of Cat's Pride Fresh & Light by optimizing our promotional activity for our target audience and closely monitoring these expenses. Our sales team is energized by the positive response we have received from our retail partners.
"While increased distribution is expected in the remaining fiscal quarters, we expect the introduction of Cat's Pride Fresh & Light to negatively impact consolidated earnings compared with those reported in fiscal 2011."
The Company will offer a live webcast of the first quarter earnings teleconference on Friday, December 9, 2011 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.
Cat's Pride is a registered trademark of Oil-Dri Corporation of America. Fresh & Light is a trademark 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.
| O I L - D R I C O R P O R A T I O N O F A M E R I C A | |||||||||||||||
| Consolidated Statements of Income | |||||||||||||||
| (in thousands, except for per share amounts) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Three Months Ended October 31, | |||||||||||||||
| 2011 | % of Sales | 2010 | % of Sales | ||||||||||||
| Net Sales | $ | 59,582 | 100.0 | % | $ | 56,285 | 100.0 | % | |||||||
| Cost of Sales | (45,379 | ) | 76.2 | % | (43,077 | ) | 76.5 | % | |||||||
| Gross Profit | 14,203 | 23.8 | % | 13,208 | 23.5 | % | |||||||||
| Operating Expenses | (12,407 | ) | 20.8 | % | (9,386 | ) | 16.7 | % | |||||||
| Operating Income | 1,796 | 3.0 | % | 3,822 | 6.8 | % | |||||||||
| Interest Expense | (524 | ) | 0.9 | % | (411 | ) | 0.7 | % | |||||||
| Other Income | 201 | 0.3 | % | 69 | 0.1 | % | |||||||||
| Income Before Income Taxes | 1,473 | 2.5 | % | 3,480 | 6.2 | % | |||||||||
| Income Taxes | (398 | ) | 0.7 | % | (961 | ) | 1.7 | % | |||||||
| Net Income | $ | 1,075 | 1.8 | % | $ | 2,519 | 4.5 | % | |||||||
| Net Income Per Share: | |||||||||||||||
| Basic Common | $ | 0.16 | $ | 0.38 | |||||||||||
| Basic Class B Common | $ | 0.12 | $ | 0.30 | |||||||||||
| Diluted | $ | 0.15 | $ | 0.35 | |||||||||||
| Average Shares Outstanding: | |||||||||||||||
| Basic Common | 5,114 | 5,086 | |||||||||||||
| Basic Class B Common | 1,920 | 1,897 | |||||||||||||
| Diluted | 7,100 | 7,123 | |||||||||||||
| O I L - D R I C O R P O R A T I O N O F A M E R I C A | |||||||||
| Consolidated Balance Sheets | |||||||||
| (in thousands, except for per share amounts) | |||||||||
| (unaudited) | |||||||||
| As of October 31, | |||||||||
| 2011 | 2010 | ||||||||
| Current Assets | |||||||||
| Cash and Cash Equivalents | $ | 21,000 | $ | 16,099 | |||||
| Investment in Short-term Securities | 8,390 | 3,854 | |||||||
| Accounts Receivable, net | 31,294 | 28,037 | |||||||
| Inventories | 22,263 | 17,296 | |||||||
| Prepaid Expenses | 8,932 | 8,761 | |||||||
| Total Current Assets | 91,879 | 74,047 | |||||||
| Property, Plant and Equipment | 67,285 | 62,091 | |||||||
| Other Assets | 13,354 | 15,205 | |||||||
| Total Assets | $ | 172,518 | $ | 151,343 | |||||
| Current Liabilities | |||||||||
| Current Maturities of Notes Payable | $ | 3,800 | $ | 4,100 | |||||
| Accounts Payable | 6,621 | 6,424 | |||||||
| Dividends Payable | 1,132 | 1,061 | |||||||
| Accrued Expenses | 15,921 | 13,936 | |||||||
| Total Current Liabilities | 27,474 | 25,521 | |||||||
| Long-Term Liabilities | |||||||||
| Notes Payable | 27,400 | 12,700 | |||||||
| Other Noncurrent Liabilities | 22,264 | 20,971 | |||||||
| Total Long-Term Liabilities | 49,664 | 33,671 | |||||||
| Stockholders' Equity | 95,380 | 92,151 | |||||||
| Total Liabilities and Stockholders' Equity | $ | 172,518 | $ | 151,343 | |||||
| Book Value Per Share Outstanding | $ | 13.56 | $ | 13.20 | |||||
| Acquisitions of | |||||||||
| Property, Plant and Equipment | |||||||||
| First Quarter | $ | 1,611 | $ | 1,638 | |||||
| Depreciation and Amortization Charges | |||||||||
| First Quarter | $ | 2,345 | $ | 2,054 | |||||
| O I L - D R I C O R P O R A T I O N O F A M E R I C A | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| For the Three Months Ended | ||||||||
| October 31, | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | 2011 | 2010 | ||||||
| Net Income | $ | 1,075 | $ | 2,519 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and Amortization | 2,345 | 2,054 | ||||||
| (Increase) in Accounts Receivable | (2,102 | ) | (897 | ) | ||||
| (Increase) in Inventories | (3,033 | ) | (1,273 | ) | ||||
| Increase in Accounts Payable | 449 | 55 | ||||||
| Increase (Decrease) in Accrued Expenses | 539 | (2,830 | ) | |||||
| Other | 1,104 | (92 | ) | |||||
| Total Adjustments | (698 | ) | (2,983 | ) | ||||
| Net Cash Provided by (Used in) Operating Activities | 377 | (464 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Capital Expenditures | (1,611 | ) | (1,638 | ) | ||||
| Net Dispositions of Investment Securities | 7,435 | 2,001 | ||||||
| Other | 10 | 110 | ||||||
| Net Cash Provided by Investing Activities | 5,834 | 473 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Principal Payments on Long-Term Debt | (2,100 | ) | (1,500 | ) | ||||
| Dividends Paid | (1,130 | ) | (1,043 | ) | ||||
| Purchase of Treasury Stock | -- | (511 | ) | |||||
| Other | 7 | 420 | ||||||
| Net Cash (Used in) Financing Activities | (3,223 | ) | (2,634 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 127 | (38 | ) | |||||
| Net Increase (Decrease) in Cash and Cash Equivalents | 3,115 | (2,663 | ) | |||||
| Cash and Cash Equivalents, Beginning of Year | 17,885 | 18,762 | ||||||
| Cash and Cash Equivalents, October 31 | $ | 21,000 | $ | 16,099 | ||||