Oil-Dri Announces Record Sales and Gross Profit for the Third Quarter and First Nine-Months of Fiscal 2024
Oil-Dri of America (NYSE: ODC) announced record sales and gross profit for Q3 and the first nine months of fiscal 2024. Q3 consolidated net sales reached $106.8 million, up 1% from the prior year. Net income for the quarter was $7.8 million, down 9% from last year, primarily due to increased SG&A expenses. Gross profit increased by 10% to $30.1 million. The company highlighted growth in fluids purification and cat litter products, as well as the acquisition of Ultra Pet Company, which is expected to drive future earnings. Year-to-date net sales were $323.9 million, a 6% increase from the previous year.
- Q3 consolidated net sales increased by 1% to $106.8 million.
- Gross profit increased by 10% to $30.1 million.
- Year-to-date net sales increased by 6% to $323.9 million.
- Fluids purification products revenue grew by 26%.
- Ultra Pet Company acquisition expected to be accretive to earnings.
- Cash and cash equivalents increased by $17.1 million to $46.8 million.
- Q3 net income decreased by 9% to $7.8 million.
- SG&A expenses increased by 51% to $19.7 million.
- Operating income decreased by 28% to $10.4 million.
- Sales from agricultural products decreased by 24%.
- Animal health business sales declined by 17%.
- Domestic industrial and sports product revenues decreased by 3%.
Insights
Oil-Dri Corporation has reported mixed results for the third quarter and first nine months of fiscal 2024. Despite achieving record sales of
The year-over-year growth in net sales reflects consistent demand in key segments like fluids purification and cat litter products. The gross profit increased by
Oil-Dri’s strategic acquisition of Ultra Pet, a supplier of silica gel-based crystal cat litter, is notable. This move is expected to bolster their market position and provide immediate accretive benefits to earnings. The financing of this acquisition through a mix of cash, notes and credit advances indicates a robust financial strategy to support growth.
For retail investors, the increase in net income for the nine-month period by
Oil-Dri's diversification into the rapidly growing crystal cat litter market is a strategic pivot worth noting. The acquisition of Ultra Pet allows Oil-Dri to tap into a higher-margin product segment that is increasingly preferred by consumers for its lightweight and efficient properties. The integration of Ultra Pet is expected to be seamless, with earnings accretion anticipated in the fourth quarter of 2024.
The market demand for fluids purification products saw a significant uptick, driven primarily by increased demand from renewable diesel, edible oil and jet fuel segments. This aligns with broader industry trends focusing on sustainability and cleaner energy sources. However, the decline in agricultural and animal health product sales reflects underlying challenges in those markets, such as high feed prices and inventory issues with key customers.
Retail and wholesale sales increased marginally by
Investors should monitor how well Oil-Dri can manage the increased SG&A expenses and integrate Ultra Pet into its operations to sustain growth and expand market share effectively.
CHICAGO, June 06, 2024 (GLOBE NEWSWIRE) -- Oil-Dri Corporation of America (NYSE: ODC), producer and marketer of sorbent mineral products, today announced results for its third quarter and first nine-months of fiscal year 2024.
| Third Quarter | Year to Date | |||||||||
| (in thousands, except per share amounts) | Ended April 30, | Ended April 30, | ||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||
| Consolidated Results | ||||||||||
| Net Sales | $ | 106,779 | $ | 105,425 | $ | 323,885 | $ | 305,633 | ||
| Net Income Attributable to Oil-Dri | $ | 7,777 | $ | 8,535 | (9)% | $ | 30,901 | $ | 17,632 | |
| Net Income Attributable to Oil-Dri Excluding Nonrecurring Events † | $ | 7,777 | $ | 13,319 | (42)% | $ | 31,363 | $ | 24,393 | |
| Diluted EPS - Common | $ | 1.07 | $ | 1.24 | (14)% | $ | 4.26 | $ | 2.58 | |
| Diluted EPS - Common, Excluding Nonrecurring Events † | $ | 1.07 | $ | 1.94 | (45)% | $ | 4.32 | $ | 3.57 | |
| Business to Business | ||||||||||
| Net Sales | $ | 36,196 | $ | 35,412 | $ | 111,591 | $ | 104,253 | ||
| Segment Operating Income | $ | 10,605 | $ | 9,803 | $ | 32,713 | $ | 24,794 | ||
| Retail and Wholesale | ||||||||||
| Net Sales | $ | 70,583 | $ | 70,013 | $ | 212,294 | $ | 201,380 | ||
| Segment Operating Income | $ | 10,872 | $ | 10,744 | $ | 34,080 | $ | 27,000 | ||
† Please refer to Reconciliation of Non-GAAP Financial Measures below for a reconciliation of Non-GAAP items to the comparable GAAP measures.
Daniel S. Jaffee, President and Chief Executive Officer, stated, “I am pleased to report we set new records for sales and gross profit for the third quarter, representing a
Consolidated Results
Consolidated net sales reached
Third quarter of fiscal 2024 consolidated gross profit was
Selling, general and administrative (“SG&A”) expenses were
In the third quarter of fiscal 2024, consolidated operating income decreased to
Total other expense, net was
Consolidated net income before taxes increased to
Cash and cash equivalents for the three-month period ending April 30, 2024 totaled
Product Group Review
The Business to Business (“B2B”) Products Group’s third quarter of fiscal 2024 revenues were
During the third quarter of fiscal 2024, SG&A costs within the B2B Products Group decreased by
Operating income for the R&W Products Group reached
The Retail and Wholesale (“R&W”) Products Group’s third quarter revenues reached
During the third quarter of fiscal 2024, SG&A expenses within the R&W Products Group increased by
Operating income for the R&W Products Group reached
Acquisition of Ultra Pet Company, Inc.
On May 1, 2024, Oil-Dri successfully completed the
Chris Lamson, Group Vice President of Retail and Wholesale, added, “The Ultra Pet business is a strong fit with Oil-Dri, as we are strategically aligned, and our cat litter products complement each other well. Both product portfolios include efficacious branded and premium private label products which are sold at a value to consumers. While our clay litter is inherently lightweight, Ultra Pet’s crystal products are even lighter in density. Consumers appreciate the lightweight attribute, as do e-commerce and brick and mortar retailers who reap many freight benefits as a result of transporting less weight. I am pleased to report that we have already begun to leverage our strong relationships within the industry to drive distribution at key retailers, and we look forward to future growth.”
Oil-Dri is committed to a seamless integration of Ultra Pet into its business. The Company expects to fully integrate the business, new teammates, and systems over the next few quarters, and earnings accretion is anticipated to occur in the fourth quarter of 2024. Ultra Pet’s financial results will be reported under the cat litter principal product within the Retail & Wholesale Products Group.
Oil-Dri’s senior leadership will discuss additional details regarding the acquisition of Ultra Pet when the Company hosts its third quarter of fiscal year 2024 earnings discussion via a live webcast on Friday, June 7, 2024 at 10:00 a.m. Central Time. Participation details and a short presentation are available on the Company’s website’s Events page.
“Oil-Dri”, “Cat’s Pride”, “Metal X”, “Metal Z”, “Sorbiam”, and “Amlan” are registered trademarks of Oil-Dri Corporation of America, and “Phylox” is a trademark of Oil-Dri Corporation of America.
About Oil-Dri Corporation of America
Oil-Dri Corporation of America is a leading manufacturer and supplier of specialty sorbent products for the pet care, animal health and nutrition, fluids purification, agricultural ingredients, sports field, industrial and automotive markets. Oil-Dri is vertically integrated which enables the Company to efficiently oversee every step of the process from research and development to supply chain to marketing and sales. With over 80 years of experience, the Company continues to fulfill its mission to Create Value from Sorbent Minerals.
Forward-Looking Statements
Certain statements in this press release may contain forward-looking statements, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, 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. Forward-looking statements can be identified by words such as “expect,” “outlook,” “forecast,” “would,” “could,” “should,” “project,” “intend,” “plan,” “continue,” “believe,” “seek,” “estimate,” “anticipate,” “may,” “assume,” “potential,” “strive,” and similar references to future periods.
Such statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially, including, but not limited to, those described in Item 1A, “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended April 30, 2024 and our most recent Annual Report on Form 10-K and from time to time in our other filings with the Securities and Exchange Commission. Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, intended, expected, believed, estimated, projected, planned or otherwise expressed in any forward-looking statements. Investors 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.
Contact:
Leslie A. Garber
Director of Investor Relations
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||
| Third Quarter Ended April 30, | |||||||||||||||
| 2024 | % of Sales | 2023 | % of Sales | ||||||||||||
| Net Sales | $ | 106,779 | 100.0 | % | $ | 105,425 | 100.0 | % | |||||||
| Cost of Goods Sold | (76,642 | ) | (71.8 | ) | % | (77,958 | ) | (73.9 | ) | % | |||||
| Gross Profit | 30,137 | 28.2 | % | 27,467 | 26.1 | % | |||||||||
| Selling, General and Administrative Expenses | (19,705 | ) | (18.5 | ) | % | (13,011 | ) | (12.3 | ) | % | |||||
| Operating Income | 10,432 | 9.8 | % | 14,456 | 13.7 | % | |||||||||
| Loss on Pension Termination | — | — | % | (4,858 | ) | (4.6 | ) | % | |||||||
| Other Expense, Net | (294 | ) | (0.3 | ) | % | 383 | 0.4 | % | |||||||
| Total Other Expense, Net | (294 | ) | (0.3 | ) | % | (4,475 | ) | (4.2 | ) | % | |||||
| Income Before Income Taxes | 10,138 | 9.5 | % | 9,981 | 9.5 | % | |||||||||
| Income Taxes Expense | (2,361 | ) | (2.2 | ) | % | (1,493 | ) | (1.4 | ) | % | |||||
| Net Income | 7,777 | 7.3 | % | 8,488 | 8.1 | % | |||||||||
| Net Loss Attributable to Noncontrolling Interest | — | — | % | (47 | ) | — | % | ||||||||
| Net Income attributable to Oil-Dri | $ | 7,777 | 7.3 | % | $ | 8,535 | 8.1 | % | |||||||
| Net Income Per Share: Basic Common | $ | 1.15 | $ | 1.28 | |||||||||||
| Basic Class B | $ | 0.87 | $ | 0.96 | |||||||||||
| Diluted Common | $ | 1.07 | $ | 1.24 | |||||||||||
| Diluted Class B | $ | 0.87 | $ | 0.95 | |||||||||||
| Avg Shares Outstanding: Basic Common | 4,912 | 4,838 | |||||||||||||
| Basic Class B | 1,980 | 1,964 | |||||||||||||
| Diluted Common | 6,892 | 5,003 | |||||||||||||
| Diluted Class B | 1,980 | 1,999 | |||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||
| Nine Months Ended April 30, | |||||||||||||||
| 2024 | % of Sales | 2023 | % of Sales | ||||||||||||
| Net Sales | $ | 323,885 | 100.0 | % | $ | 305,633 | 100.0 | % | |||||||
| Cost of Goods Sold | (231,815 | ) | (71.6 | ) | % | (232,840 | ) | (76.2 | ) | % | |||||
| Gross Profit | 92,070 | 28.4 | % | 72,793 | 23.8 | % | |||||||||
| Selling, General and Administrative Expenses | (53,317 | ) | (16.5 | ) | % | (44,462 | ) | (14.5 | ) | % | |||||
| Operating Income | 38,753 | 12.0 | % | 28,331 | 9.3 | % | |||||||||
| Loss on Pension Termination | — | — | % | (4,858 | ) | (1.6 | ) | % | |||||||
| Other Expense, Net | (1,103 | ) | (0.3 | ) | % | (2,016 | ) | (0.7 | ) | % | |||||
| Total Other Expense, Net | (1,103 | ) | (0.3 | ) | % | (6,874 | ) | (2.2 | ) | % | |||||
| Income Before Income Taxes | 37,650 | 11.6 | % | 21,457 | 7.0 | % | |||||||||
| Income Taxes Expense | (6,749 | ) | (2.1 | ) | % | (3,893 | ) | (1.3 | ) | % | |||||
| Net Income | 30,901 | 9.5 | % | 17,564 | 5.7 | % | |||||||||
| Net Loss Attributable to Noncontrolling Interest | — | — | % | (68 | ) | — | % | ||||||||
| Net Income Attributable to Oil-Dri | $ | 30,901 | 9.5 | % | $ | 17,632 | 5.8 | % | |||||||
| Net Income Per Share: Basic Common | $ | 4.59 | $ | 2.66 | |||||||||||
| Basic Class B | $ | 3.45 | $ | 1.99 | |||||||||||
| Diluted Common | $ | 4.26 | $ | 2.58 | |||||||||||
| Diluted Class B | $ | 3.45 | $ | 1.97 | |||||||||||
| Avg Shares Outstanding: Basic Common | 4,874 | 4,824 | |||||||||||||
| Basic Class B | 1,974 | 1,957 | |||||||||||||
| Diluted Common | 6,848 | 4,964 | |||||||||||||
| Diluted Class B | 1,974 | 1,984 | |||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||
| (in thousands, except per share amounts) | |||||
| As of April 30, | |||||
| 2024 | 2023 | ||||
| Current Assets | |||||
| Cash and Cash Equivalents | $ | 46,821 | $ | 29,746 | |
| Accounts Receivable, Net | 60,003 | 56,983 | |||
| Inventories, Net | 45,468 | 36,664 | |||
| Prepaid Expenses and Other Assets | 6,554 | 10,672 | |||
| Total Current Assets | 158,846 | 134,065 | |||
| Property, Plant and Equipment, Net | 127,946 | 111,128 | |||
| Other Assets | 32,360 | 25,103 | |||
| Total Assets | $ | 319,152 | $ | 270,296 | |
| Current Liabilities | |||||
| Current Maturities of Notes Payable | $ | 1,000 | $ | 1,000 | |
| Accounts Payable | 13,728 | 11,919 | |||
| Dividends Payable | 1,958 | 1,863 | |||
| Other Current Liabilities | 35,232 | 37,122 | |||
| Total Current Liabilities | 51,918 | 51,904 | |||
| Noncurrent Liabilities | |||||
| Notes Payable | 40,860 | 31,818 | |||
| Other Noncurrent Liabilities | 23,425 | 19,479 | |||
| Total Noncurrent Liabilities | 64,285 | 51,297 | |||
| Stockholders' Equity | 202,949 | 167,095 | |||
| Total Liabilities and Stockholders' Equity | $ | 319,152 | $ | 270,296 | |
| Book Value Per Share Outstanding | $ | 29.64 | $ | 24.64 | |
| Acquisitions of: | |||||
| Property, Plant and Equipment | |||||
| Third Quarter | $ | 8,171 | $ | 4,105 | |
| Year To Date | $ | 23,717 | $ | 16,745 | |
| Depreciation and Amortization Charges | |||||
| Third Quarter | $ | 4,765 | $ | 4,074 | |
| Year To Date | $ | 13,619 | $ | 11,348 | |
Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements.
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (in thousands) | |||||||
| For the Nine Months Ended | |||||||
| April 30, | |||||||
| 2024 | 2023 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net Income | $ | 30,901 | $ | 17,564 | |||
| Adjustments to reconcile net income to net cash | |||||||
| provided by operating activities: | |||||||
| Depreciation and Amortization | 13,619 | 11,348 | |||||
| Loss on Pension Termination | — | 4,858 | |||||
| Increase in Accounts Receivable | (793 | ) | (5,604 | ) | |||
| Increase in Inventories | (2,972 | ) | (1,799 | ) | |||
| (Increase) Decrease in Prepaid Expenses | (3,708 | ) | 2,298 | ||||
| (Decrease) Increase in Accounts Payable | (1,006 | ) | 255 | ||||
| (Decrease) Increase in Accrued Expenses | (3,940 | ) | 5,653 | ||||
| Other | 4,828 | 1,468 | |||||
| Total Adjustments | 6,028 | 18,477 | |||||
| Net Cash Provided by Operating Activities | 36,929 | 36,041 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital Expenditures | (23,717 | ) | (16,745 | ) | |||
| Other | 181 | 10 | |||||
| Net Cash Used in Investing Activities | (23,536 | ) | (16,735 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from Issuance of Notes Payable | 10,000 | — | |||||
| Payment of Debt Issuance costs | — | (7 | ) | ||||
| Dividends Paid | (5,848 | ) | (5,574 | ) | |||
| Purchases of Treasury Stock | (2,690 | ) | (225 | ) | |||
| Net Cash Provided by (Used In) Financing Activities | 1,462 | (5,806 | ) | ||||
| Effect of exchange rate changes on Cash and Cash Equivalents | 212 | (52 | ) | ||||
| Net Increase in Cash and Cash Equivalents | 15,067 | 13,448 | |||||
| Cash and Cash Equivalents, Beginning of Period | 31,754 | 16,298 | |||||
| Cash and Cash Equivalents, End of Period | $ | 46,821 | $ | 29,746 | |||
Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements.
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||
| (in thousands) | |||||||||||
| Third Quarter | Year to Date | ||||||||||
| Ended April 30, | Ended April 30, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| CONSOLIDATED RESULTS | |||||||||||
| GAAP: Net Income Attributable to Oil-Dri | $ | 7,777 | $ | 8,535 | $ | 30,901 | $ | 17,632 | |||
| Plus: Nonrecurring Events, Net of Tax | |||||||||||
| Landfill Modification Loss, Net of Tax | $ | — | $ | — | $ | 462 | $ | 1,977 | |||
| Pension Termination, Net of Tax | $ | — | $ | 4,784 | $ | — | $ | 4,784 | |||
| Total Nonrecurring Events, Net of Tax | $ | — | $ | 4,784 | $ | 462 | $ | 6,761 | |||
| Non-GAAP: Net Income Attributable to Oil-Dri excluding Nonrecurring Events | $ | 7,777 | $ | 13,319 | $ | 31,363 | $ | 24,393 | |||
| GAAP: Diluted EPS - Common | $ | 1.07 | $ | 1.24 | $ | 4.26 | $ | 2.58 | |||
| Plus: Nonrecurring Events, Net of Tax | $ | — | $ | 0.70 | $ | 0.06 | $ | 0.99 | |||
| Non-GAAP: Diluted EPS - Common, excluding Nonrecurring Events | $ | 1.07 | $ | 1.94 | $ | 4.32 | $ | 3.57 | |||
FAQ
What were Oil-Dri's net sales for the third quarter of fiscal 2024?
How much did Oil-Dri's gross profit increase in the third quarter of fiscal 2024?
What was Oil-Dri's net income for the third quarter of fiscal 2024?
What impact did the Ultra Pet Company acquisition have on Oil-Dri's earnings?
How much did Oil-Dri's SG&A expenses increase in the third quarter of fiscal 2024?
What drove the revenue growth for Oil-Dri in the third quarter of fiscal 2024?
What were Oil-Dri's year-to-date net sales for fiscal 2024?
How did the sales of agricultural products perform for Oil-Dri in the third quarter of fiscal 2024?
