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
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