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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
October 12, 2018
 
Oil-Dri Corporation of America
(Exact name of registrant as specified in its charter) 
 
Delaware
 
001-12622
 
36-2048898
(State or other jurisdiction of
incorporation)
 
(Commission File
Number)
 
(IRS Employer
Identification No.)
 
410 North Michigan Avenue
Suite 400
Chicago, Illinois
 
60611-4213
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code
(312) 321-1515
 
 
(Former name or former address, if changed since last report.) 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 





 
Item 2.02
Results of Operations and Financial Condition.
 
On October 12, 2018, Oil-Dri Corporation of America (the “Registrant”) issued a press release announcing its results of operations for its fourth quarter and fiscal year ended July 31, 2018. A copy of the press release is attached as Exhibit 99.1 and the information contained therein is incorporated herein by reference. The information contained in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), and it shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 
Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits
Exhibit
 
 
Number
 
Description of Exhibits
 
 
 
99.1

 
Press Release of the Registrant dated October 12, 2018






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
OIL-DRI CORPORATION OF AMERICA
 
 
 
 
By:
/s/   Laura G. Scheland
 
 
 
Laura G. Scheland
 
 
Vice President and General Counsel
 
Date: October 12, 2018






Exhibit Index
 
Exhibit
 
 
Number
 
Description of Exhibits
 
 
 
99.1

 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit

395334820_oildrilogo_imagea14.gif
410 N. Michigan Ave. Chicago, Illinois 60611, U.S.A

News Announcement
For Immediate Release
 
Exhibit 99.1

Oil-Dri Announces Fourth Quarter and Fiscal 2018 Results

CHICAGO-(October 12, 2018)-Oil-Dri Corporation of America (NYSE: ODC), producer and marketer of sorbent mineral products, announced today its fourth quarter and fiscal year 2018 earnings.

 
Fourth Quarter
Fiscal Year
 
Ended July 31, 2018
Ended July 31, 2018
 
 
 
 
 
 
 
 
F18
F17
Change
F18
F17
Change
Consolidated Results
 
 
 
 
 
 
Net Sales
$65,613,000
$65,776,000
—%
$266,000,000
$262,307,000
1%
Net Income Attributable to Oil-Dri
$2,701,000
$1,322,000
104%
$8,240,000
$10,792,000
(24)%
Earnings per Diluted Share
$0.36
$0.18
100%
$1.11
$1.47
(24)%
Business to Business
 
 
 
 
 
 
Net Sales
$25,817,000
$25,526,000
1%
$105,043,000
$100,419,000
5%
Segment Operating Income
$8,929,000
$8,310,000
7%
$35,120,000
$33,343,000
5%
Retail and Wholesale
 
 
 
 
 
 
Net Sales
$39,796,000
$40,250,000
(1)%
$160,957,000
$161,888,000
(1)%
Segment Operating Income
$(35,000)
$779,000
N/A
$6,975,000
$6,775,000
3%


Daniel S. Jaffee stated, “Every fiscal year we are finding new and better ways to deliver on our mission to Create Value From Sorbent Minerals. In fiscal 2018, our consolidated results were negatively impacted by a one-time tax expense increase of approximately $0.54 per diluted share and incremental spending for our new enterprise resource planning (ERP) system. However, we are confident this short-term system investment will yield positive long-term results.

We continued to experience exciting sales growth in value-added areas of our business, such as our animal health products, lightweight cat litter, agricultural products and our fluids purification products. However, consolidated gross profit decreased due primarily to higher freight, packaging and non-fuel manufacturing costs.


 
Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515



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Total cash, cash equivalents and short-term investments decreased $12,790,000 from fiscal 2017. The attached financial statements reflect the results of both routine operating activities and significant non-recurring investments in the business, including an incremental $11,500,000 pension contribution and capital expense spending for the implementation of the ERP system.

The investment in “going live” August 1st on our new system is anticipated to have a negative impact on first quarter cash flow, sales and profitability. We expect that the new system, when fully implemented, will enable us to support the future growth of our business. I am very proud of the way our team has stepped-up to minimize the impact to our customers.

Sales increased for all of our Business to Business product groups in the year. Growth originated from Agsorb agricultural chemical carrier granules, Ultra-Clear clarification media for petroleum oil and Amlan livestock intestinal-health products, including Varium and Calibrin-Z.

Overall cat litter sales decreased 1% compared to fiscal 2017. However, sales of private label lightweight scoopable litter increased 71% to $8.4 million for the fiscal year. This increase was driven by new distribution and increased sales to current customers, including e-commerce.

In fiscal 2019, we are excited to have a major TV brand integration in connection with our Litter for Good campaign that will drive awareness and purchases of our Cat’s Pride Fresh & Light products. We expect our overall advertising expense in 2019 to be flat with fiscal 2018.

For more details on our financial results, please review the Form 10-K that was filed today and join us for our next earnings teleconference on Monday, October 15th. Call details are available on our website’s ‘Events’ page.”




2
 
Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515



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FIVE-YEAR SUMMARY
(Key Metrics as of July 31)
 
 
 
Fiscal 2018

 
Fiscal 2017

 
Fiscal 2016

 
Fiscal 2015

 
Fiscal 2014

Cash, cash equivalents and short-term investments
 
$
19,881,000

 
$
32,671,000

 
$
28,813,000

 
$
22,328,000

 
$
18,999,000

Net cash provided by operations
 
$
10,612,000

 
$
26,949,000

 
$
25,171,000

 
$
26,976,000

 
$
16,296,000

Cash, cash equivalents and short-term investments less notes payable
 
$
10,691,000

 
$
20,427,000

 
$
13,515,000

 
$
3,574,000

 
$
(3,158,000
)
Net Income attributable to Oil-Dri
 
$
8,240,000

 
$
10,792,000

 
$
13,613,000

 
$
11,368,000

 
$
8,356,000

Net income per diluted share
 
$
1.11

 
$
1.47

 
$
1.87

 
$
1.59

 
$
1.17

Return on average stockholders’ equity
 
6.4
%
 
8.9
%
 
12.0
%
 
10.6
%
 
8.1
%
Capital expenditures
 
$
15,074,000

 
$
14,763,000

 
$
10,684,000

 
$
15,859,000

 
$
18,566,000

Dividends paid
 
$
6,230,000

 
$
5,926,000

 
$
5,600,000

 
$
5,247,000

 
$
4,965,000

Dividends paid per Common Stock share
 
$
0.92

 
$
0.88

 
$
0.84

 
$
0.80

 
$
0.76



###

While Oil-Dri’s founding product was granular clay floor absorbents, it has since greatly diversified its portfolio. The Company’s mission to Create Value from Sorbent Minerals is supported by its wide array of consumer and business to business product offerings. In 2016, Oil-Dri celebrated its seventy-fifth year of business and looks forward to the next milestone.

The Company will host its fourth quarter fiscal 2018 earnings teleconference on Monday, October 15, 2018 at 10:00am Central Time, and its first quarter fiscal 2019 earnings teleconference on Monday, December 10, 2018 at 10:00 am Central Time. All teleconference dial-in details will be communicated via web alert approximately one week prior to each call.

Oil-Dri will host its Annual Meeting of Stockholders on Tuesday, December 11, 2018 at 9:30 am Central Time. The meeting will be held at The University of Chicago Booth School of Business, Gleacher Center, 450 Cityfront Plaza Drive, Chicago, IL 60611. The record date for voting eligibility at the Annual Meeting is October 15, 2018.


3
 
Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515



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“Oil-Dri”, “Agsorb”, “Amlan”, “Calibrin”, “Cat’s Pride”, “Ultra-Clear”, and “Varium” are registered trademarks of Oil-Dri Corporation of America. “Litter for Good” is a trademark of Oil-Dri Corporation of America.

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,” “may,” “assume,” or 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.


4
 
Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515



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CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
(quarter unaudited)
(in thousands, except per share amounts)
 
Fourth Quarter Ended July 31,
 
2018
 
% of Sales

 
2017
 
% of Sales

Net Sales
$
65,613

 
100.0
 %
 
$
65,776

 
100.0
 %
Cost of Sales
(49,963
)
 
(76.1
)%
 
(49,695
)
 
(75.6
)%
Gross Profit
15,650

 
23.9
 %
 
16,081

 
24.4
 %
Selling, General and Administrative Expenses
(12,767
)
 
(19.5
)%
 
(13,230
)
 
(20.1
)%
Operating Income
2,883

 
4.4
 %
 
2,851

 
4.3
 %
Interest Expense
(127
)
 
(0.2
)%
 
(166
)
 
(0.3
)%
Other (Loss) Income
(95
)
 
(0.1
)%
 
169

 
0.3
 %
Income Before Income Taxes
2,661

 
4.1
 %
 
2,854

 
4.3
 %
Income Tax Benefit (Expense)
22

 
 %
 
(1,532
)
 
(2.3
)%
Net Income
2,683

 
4.1
 %
 
1,322

 
2.0
 %
Net Loss Attributable to Noncontrolling Interests
(18
)
 

 

 

Net Income Attributable to Oil-Dri
$
2,701

 
4.1
 %
 
$
1,322

 
2.0
 %
Net Income Per Share:
 
 
 
 
 
 
 
Basic Common
$
0.40

 
 
 
$
0.20

 
 
Basic Class B Common
$
0.30

 
 
 
$
0.15

 
 
Diluted Common
$
0.36

 
 
 
$
0.18

 
 
Average Shares Outstanding:
 
 
 
 
 
 
 
Basic Common
5,049

 
 
 
5,024

 
 
Basic Class B Common
2,091

 
 
 
2,088

 
 
Diluted Common
7,239

 
 
 
7,179

 
 
 
Twelve Months Ended July 31,
 
2018
 
% of Sales

 
2017
 
% of Sales

Net Sales
$
266,000

 
100.0
 %
 
$
262,307

 
100.0
 %
Cost of Sales
(193,998
)
 
(72.9
)%
 
(188,595
)
 
(71.9
)%
Gross Profit
72,002

 
27.1
 %
 
73,712

 
28.1
 %
Selling, General and Administrative Expenses
(57,332
)
 
(21.6
)%
 
(58,482
)
 
(22.3
)%
Operating Income
14,670

 
5.5
 %
 
15,230

 
5.8
 %
Interest Expense
(676
)
 
(0.3
)%
 
(888
)
 
(0.3
)%
Other Income
872

 
0.3
 %
 
203

 
0.1
 %
Income Before Income Taxes
14,866

 
5.6
 %
 
14,545

 
5.6
 %
Income Tax Expense
(6,644
)
 
(2.5
)%
 
(3,753
)
 
(1.4
)%
Net Income
8,222

 
3.1
 %
 
10,792

 
4.2
 %
Net Loss Attributable to Noncontrolling Interests
(18
)
 
 %
 

 
 %
Net Income Attributable to Oil-Dri
$
8,240

 
3.1
 %
 
$
10,792

 
4.2
 %
Net Income Per Share:
 
 
 
 
 
 
 
Basic Common
$
1.22

 
 
 
$
1.60

 
 
Basic Class B Common
$
0.91

 
 
 
$
1.20

 
 
Diluted Common
$
1.11

 
 
 
$
1.47

 
 
Average Shares Outstanding:
 
 
 
 
 
 
 
Basic Common
5,036

 
 
 
5,017

 
 
Basic Class B Common
2,097

 
 
 
2,083

 
 
Diluted Common
7,222

 
 
 
7,158

 
 

5
 
Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515



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CONSOLIDATED BALANCE SHEETS
 
 
 
 
(in thousands, except per share amounts)
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
As of July 31,
 
 
2018
 
2017
Current Assets
 
 
 
 
Cash and Cash Equivalents
 
$
12,757

 
$
9,095

Short-term Investments
 
7,124

 
23,576

Accounts Receivable, Net
 
33,602

 
32,750

Inventories
 
22,521

 
22,615

Prepaid Expenses (1)
 
7,010

 
6,194

Total Current Assets
 
83,014

 
94,230

Property, Plant and Equipment, Net
 
86,706

 
84,033

Other Assets (1)
 
24,962

 
34,312

Total Assets
 
$
194,682

 
$
212,575

 
 
 
 
 
Current Liabilities
 
 
 
 
Current Maturities of Notes Payable
 
$
3,083

 
$
3,083

Accounts Payable
 
6,543

 
9,594

Dividends Payable
 
1,627

 
1,553

Accrued Expenses
 
19,696

 
18,724

Total Current Liabilities
 
30,949

 
32,954

Noncurrent Liabilities
 
 
 
 
Notes Payable
 
6,107

 
9,161

Other Noncurrent Liabilities
 
25,741

 
44,423

Total Noncurrent Liabilities
 
31,848

 
53,584

Stockholders' Equity
 
131,885

 
126,037

Total Liabilities and Stockholders' Equity
 
$
194,682

 
$
212,575

 
 
 
 
 
Book Value Per Share Outstanding
 
$
18.49

 
$
17.75

 
 
 
 
 
Acquisitions of:
 
 
 
 
Property, Plant and Equipment
Fourth Quarter
$
4,541

 
$
4,345

 
Year To Date
$
15,074

 
$
14,763

Depreciation and Amortization Charges
Fourth Quarter
$
3,179

 
$
3,219

 
Year To Date
$
12,756

 
$
12,772


(1) Prior year amounts have been retrospectively adjusted to conform to the current year presentation of current deferred income taxes required by new guidance under Accounting Standards Codification (ASC) 740, Balance Sheet Classification of Deferred Taxes.


6
 
Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515



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CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
 
(in thousands)
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
For the Twelve Months Ended
 
July 31,
 
2018
 
2017
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
Net Income
$
8,222

 
$
10,792

Adjustments to reconcile net income to net cash
 
 
 
provided by operating activities, net of acquisition:
 
 
 
Depreciation and Amortization
12,756

 
12,772

     (Increase) in Accounts Receivable
(522
)
 
(2,331
)
     Decrease in Inventories
225

 
666

     (Decrease) Increase in Accounts Payable
(2,436
)
 
2,423

     Increase (Decrease) in Accrued Expenses
771

 
(845
)
     (Decrease) Increase in Pension and Postretirement Benefits
(11,048
)
 
209

Other
2,644

 
3,263

Total Adjustments
2,390

 
16,157

Net Cash Provided by Operating Activities
10,612

 
26,949

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
Capital Expenditures
(15,074
)
 
(14,763
)
Net Purchase of Investment Securities
16,581

 
(13,345
)
Other
1,065

 
64

Net Cash Provided by (Used in) Investing Activities
2,572

 
(28,044
)
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
Principal Payments on Long-Term Debt
(3,083
)
 
(3,083
)
Dividends Paid
(6,230
)
 
(5,926
)
Purchase of Treasury Stock
(26
)
 
(135
)
Other

 
594

Net Cash (Used in) Financing Activities
(9,339
)
 
(8,550
)
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
(183
)
 
111

 
 
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
3,662

 
(9,534
)
Cash and Cash Equivalents, Beginning of Period
9,095

 
18,629

Cash and Cash Equivalents, End of Period
$
12,757

 
$
9,095



7
 
Reagan B. Culbertson
Investor Relations Manager
Oil-Dri Corporation of America
InvestorRelations@oildri.com
(312) 321-1515

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