Oil-Dri Announces Second Quarter and Six-Month Results


CHICAGO, IL--(Marketwire - March 10, 2011) - Oil-Dri Corporation of America (NYSE: ODC) today announced net sales for the second quarter of $57,201,000, a 5% increase compared with net sales of $54,734,000 for the same quarter of the previous year. Net income for the second quarter was $1,777,000, or $0.25 per diluted share, a 19% decrease compared with net income of $2,262,000, or $0.31 per diluted share, in the same quarter one year ago.

Net sales for the six-month period were $113,486,000, a 5% increase compared with net sales of $108,138,000 in the same period one year ago. The Company reported net income for the six-month period of $4,296,000, or $0.60 per diluted share, a 2% decrease compared with net income of $4,456,000, or $0.61 per diluted share, in the same period one year ago.

SECOND QUARTER REVIEW

President and Chief Executive Officer Daniel S. Jaffee said, "This quarter's net sales reflect increased shipments of scoopable cat litter, industrial floor absorbents, fluids purification and animal health products. In spite of increased sales of higher margin products, higher costs put pressure on our quarterly gross margins resulting in reduced net income compared with the same quarter in the previous year. These costs included higher freight, packaging and materials, employee benefits costs for health care, as well as increased spending for new product market research and advertising. Our foreign subsidiaries' results also negatively impacted the quarter and six month period. We are disappointed with these results and are working diligently to raise our prices to offset the external cost increases we have experienced."

BUSINESS REVIEW

Net sales for the Company's Business to Business Products Group in the second quarter were $17,981,000 and group income was $4,513,000. Net sales for the six-month period were $37,026,000 and group income was $9,801,000. The Group primarily benefited from increased sales and unit volume of fluids purification and animal health products to foreign markets. These gains were partially offset by net sales and unit volume declines of agricultural chemical carriers and co-packaged products. Higher operating costs for freight, materials and packaging negatively impacted the Group's gross margins in the quarter.

Net sales for the Company's Retail and Wholesale Products Group in the second quarter were $39,220,000 and group income was $2,600,000. Net sales for the six-month period were $76,460,000 and group income was $5,666,000. Net sales and unit volume were up for branded cat litters, industrial absorbents and sports turf products. The Group continued to benefit from increased unit volume of branded cat litter to a major customer. Unit volume and price increases of industrial and sports products also helped to bolster net sales for the Group during the quarter. Higher operating costs for freight, materials and packaging, negatively impacted the Group's gross margins in the quarter.

FINANCIAL REVIEW

Cash, cash equivalents and short-term investments at January 31, 2011 totaled $40,657,000. Capital expenditures for the fiscal year totaled $4,773,000, which was $591,000 more than the fiscal year's depreciation and amortization of $4,182,000.

On December 14, 2010, Oil-Dri's Board of Directors declared quarterly cash dividends of $0.16 per share of outstanding Common Stock and $0.12 per share of outstanding Class B Stock. The dividends will be paid on March 11, 2011 to stockholders of record at the close of business on February 25, 2011.

At the end of the second quarter, the annualized dividend yield on the Company's Common Stock was 3.4%, based on the quarter's stock closing price of $19.08 per share and the latest cash quarterly dividend of $0.16. The Company has paid cash dividends continuously since 1974 and has increased dividends annually for the past seven years.

During the second quarter, the Company repurchased 78,848 shares of Common Stock at an average price of $21.35 per share. At the end of the second quarter, the Company's repurchase authorization had 131,095 shares of Common Stock remaining.

LOOKING FORWARD

Jaffee continued, "We are pleased with the continued increase of distribution of our Cat's Pride cat litter to a major customer. While the new store count remains materially reduced from the store count at the end of fiscal 2009, we are focused on managing this business profitably as we regain distribution points. We recently received product registration of Calibrin-A enterosorbents in a major international market and are optimistic about growth in that area.

"In the second half of the fiscal year we expect to see increased capital expenditures for new product initiatives. We also are focused on managing operational costs as we have seen aggressive increases in freight, packaging and materials in the past quarter."

The Company will offer a live webcast of the second quarter earnings teleconference on March 11, 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.

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
                                          2011     Sales    2010     Sales
                                        ---------  -----  ---------  -----
Net Sales                               $  57,201  100.0% $  54,734  100.0%
Cost of Sales                             (44,709)  78.2%   (42,064)  76.9%
                                        ---------  -----  ---------  -----
Gross Profit                               12,492   21.8%    12,670   23.1%
Operating Expenses                         (9,438)  16.5%    (9,187)  16.8%
                                        ---------  -----  ---------  -----

Operating Income                            3,054    5.3%     3,483    6.4%
Interest Expense                             (534)   0.9%      (341)   0.6%
Other Income                                   34    0.1%        79    0.1%
                                        ---------  -----  ---------  -----

Income Before Income Taxes                  2,554    4.5%     3,221    5.9%
Income Taxes                                 (777)   1.4%      (959)   1.8%
                                        ---------  -----  ---------  -----
Net Income                              $   1,777    3.1% $   2,262    4.1%
                                        =========  =====  =========  =====


Net Income Per Share:
                 Basic Common           $    0.27         $    0.34
                 Basic Class B Common   $    0.20         $    0.26
                 Diluted                $    0.25         $    0.31

Average Shares Outstanding:
                 Basic Common               5,079             5,206
                 Basic Class B Common       1,908             1,890
                 Diluted                    7,097             7,269


                                           Six Months Ended January 31,
                                        ----------------------------------
                                                   % of              % of
                                          2011     Sales    2010     Sales
                                        ---------  -----  ---------  -----
Net Sales                               $ 113,486  100.0% $ 108,138  100.0%
Cost of Sales                             (87,786)  77.4%   (83,145)  76.9%
                                        ---------  -----  ---------  -----
Gross Profit                               25,700   22.6%    24,993   23.1%
Operating Expenses                        (18,824)  16.6%   (18,158)  16.8%
                                        ---------  -----  ---------  -----

Operating Income                            6,876    6.1%     6,835    6.3%
Interest Expense                             (945)   0.8%      (715)   0.7%
Other Income                                  103    0.1%       156    0.1%
                                        ---------  -----  ---------  -----

Income Before Income Taxes                  6,034    5.3%     6,276    5.8%
Income Taxes                               (1,738)   1.5%    (1,820)   1.7%
                                        ---------  -----  ---------  -----
Net Income                              $   4,296    3.8% $   4,456    4.1%
                                        =========  =====  =========  =====


Net Income Per Share:
                 Basic Common           $    0.65         $    0.67
                 Basic Class B Common   $    0.49         $    0.50
                 Diluted                $    0.60         $    0.61

Average Shares Outstanding:
                 Basic Common               5,082             5,200
                 Basic Class B Common       1,902             1,885
                 Diluted                    7,112             7,259





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,
                                                        -------------------
                                                          2011      2010
                                                        --------- ---------

Current Assets
           Cash and Cash Equivalents                    $  19,282 $  20,864
           Investment in Short-term Securities             21,375     5,999
           Accounts Receivable, net                        26,976    27,210
           Inventories                                     17,254    16,985
           Prepaid Expenses                                 8,765     6,975
                                                        --------- ---------
                           Total Current Assets            93,652    78,033
                                                        --------- ---------
Property, Plant and Equipment                              63,045    60,370
Other Assets                                               15,364    15,463
                                                        --------- ---------
Total Assets                                            $ 172,061 $ 153,866
                                                        ========= =========

Current Liabilities
           Current Maturities of Notes Payable          $   4,100 $   4,500
           Accounts Payable                                 7,687     5,450
           Dividends Payable                                1,059       997
           Accrued Expenses                                14,503    15,053
                                                        --------- ---------
                           Total Current Liabilities       27,349    26,000
                                                        --------- ---------
Long-Term Liabilities
           Notes Payable                                   31,200    16,800
           Other Noncurrent Liabilities                    21,638    18,819
                                                        --------- ---------
                           Total Long-Term Liabilities     52,838    35,619
                                                        --------- ---------
Stockholders' Equity                                       91,874    92,247
                                                        --------- ---------
Total Liabilities and Stockholders' Equity              $ 172,061 $ 153,866
                                                        ========= =========

Book Value Per Share Outstanding                        $   13.15 $   13.02

Acquisitions of
           Property, Plant and Equipment
                                        Second Quarter  $   3,135 $   3,491
                                        Year to Date    $   4,773 $   4,818

           Depreciation and Amortization Charges
                                        Second Quarter  $   2,128 $   1,822
                                        Year to Date    $   4,182 $   3,711





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                      2011      2010
                                                        --------  --------

Net Income                                              $  4,296  $  4,456

Adjustments to reconcile net income to net cash
 provided by operating activities:
    Depreciation and Amortization                          4,182     3,711
    Decrease in Accounts Receivable                          167     1,842
    (Increase) Decrease in Inventories                    (1,231)      810
    Increase in Accounts Payable                           1,468       285
    (Decrease) Increase in Accrued Expenses               (2,263)      783
    Other                                                    637     1,876
                                                        --------  --------
        Total Adjustments                                  2,960     9,307
                                                        --------  --------
    Net Cash Provided by Operating Activities              7,256    13,763
                                                        --------  --------

CASH FLOWS FROM INVESTING ACTIVITIES
    Capital Expenditures                                  (4,773)   (4,818)
    Net (Purchases) Dispositions of Investment
     Securities                                          (15,525)    2,005
    Other                                                    131       337
                                                        --------  --------
    Net Cash Used in Investing Activities                (20,167)   (2,476)
                                                        --------  --------

CASH FLOWS FROM FINANCING ACTIVITIES
    Principal Payments on Long-Term Debt                  (1,500)     (200)
    Dividends Paid                                        (2,103)   (1,991)
    Purchase of Treasury Stock                            (2,194)     (538)
    Proceeds from Issuance of Long-Term Debt              18,500        --
    Other                                                    814       463
                                                        --------  --------
    Net Cash Provided by (Used in) Financing Activities   13,517    (2,266)
                                                        --------  --------

Effect of exchange rate changes on cash and cash
 equivalents                                                 (86)        4

Net Increase in Cash and Cash Equivalents                    520     9,025
Cash and Cash Equivalents, Beginning of Year              18,762    11,839
                                                        --------  --------
Cash and Cash Equivalents, January 31                   $ 19,282  $ 20,864
                                                        ========  ========