CHICAGO, IL--(Marketwire - 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%."
QUARTERLY BUSINESS REVIEW
-- 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.
-- 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.
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)
Second Quarter Ended January 31,
----------------------------------
% of % of
2010 Sales 2009 Sales
--------- ----- --------- -----
Net Sales $ 54,734 100.0% $ 59,130 100.0%
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%
--------- ----- --------- -----
Operating Income 3,483 6.4% 3,571 6.0%
Interest Expense (341) 0.6% (478) 0.8%
Other Income 79 0.1% 85 0.1%
--------- ----- --------- -----
Income Before Income Taxes 3,221 5.9% 3,178 5.4%
Income Taxes (959) 1.8% (806) 1.4%
--------- ----- --------- -----
Net Income $ 2,262 4.1% $ 2,372 4.0%
========= ===== ========= =====
Net Income Per Share:
Basic Common $ 0.34 $ 0.36
Basic Class B Common $ 0.26 $ 0.27
Diluted $ 0.31 $ 0.33
Average Shares Outstanding:
Basic Common 5,206 5,131
Basic Class B Common 1,890 1,873
Diluted 7,269 7,199
Six Months Ended January 31,
----------------------------------
% of % of
2010 Sales 2009 Sales
--------- ----- --------- -----
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%
========= ===== ========= =====
Net Income Per Share*:
Basic Common $ 0.67 $ 0.70
Basic Class B Common $ 0.50 $ 0.53
Diluted $ 0.61 $ 0.64
Average Shares Outstanding:
Basic Common 5,200 5,129
Basic Class B Common 1,885 1,868
Diluted 7,259 7,196
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 January 31,
-------------------
2010 2009
--------- ---------
Current Assets
Cash and Cash Equivalents $ 20,864 $ 2,272
Investment in Treasury Securities 5,999 14,494
Accounts Receivable, net 27,210 31,399
Inventories 16,985 19,235
Prepaid Expenses 6,975 6,563
--------- ---------
Total Current Assets 78,033 73,963
--------- ---------
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
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 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
======== ========