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) MAY 26, 2005
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OIL-DRI CORPORATION OF AMERICA
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(Exact name of registrant as specified in its charter)
DELAWARE 0-8675 36-2048898
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
410 NORTH MICHIGAN AVENUE
SUITE 400
CHICAGO, ILLINOIS 60611-4213
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code (312) 321-1515
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(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 May 26, 2005, Oil-Dri Corporation of America (the "Registrant") issued a
press release announcing its results of operations for the third quarter and
first nine months of its fiscal year 2005. 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 Form
8-K, including the exhibit, shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, and it shall not be deemed
incorporated by reference into any filing under the Securities Act of 1933,
except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) None.
(b) None.
(c) Exhibits
Exhibit
NUMBER DESCRIPTION OF EXHIBITS
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99.1 Press Release of Registrant dated May 26, 2005.
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/ CHARLES P. BRISSMAN
--------------------------------
Charles P. Brissman
Vice President and General Counsel
Date: May 27, 2005
EXHIBIT INDEX
Exhibit
NUMBER DESCRIPTION OF EXHIBITS
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99.1 Press Release of Registrant dated May 26, 2005.
Exhibit 99.1
RELEASE: Immediate CONTACT: Ronda J. Williams
312-706-3232
OIL-DRI ANNOUNCES THIRD QUARTER RESULTS AND REVISED FULL YEAR
GUIDANCE
CHICAGO - May 26, 2005 - Oil-Dri Corporation of America (NYSE:
ODC) today announced sales of $48,249,000 for the third quarter
ended April 30, 2005, a 4% increase compared to sales of
$46,616,000 in the third quarter one year ago. The company
reported net income of $1,972,000, or $0.33 per diluted share,
compared to income of $1,824,000, or $0.30 per diluted share,
reported in the same quarter one year ago, which represents a 10%
increase in earnings per diluted share.
Sales for the nine months ended April 30, 2005, were $141,851,000
compared to sales of $140,708,000 in the same period one year
ago. Net income for the nine months was $5,398,000, or $0.91 per
diluted share, compared to income of $5,270,000, or $0.89 per
diluted share, in the same period one year ago.
THIRD QUARTER REVIEW
Dan Jaffee, President and CEO said, "While we are pleased with
our 4% sales growth, we are frustrated by the intense energy and
commodity price pressure we faced this quarter. We are diligently
working to mitigate these rising costs through improved
manufacturing processes and price increases, but the increased
expenditures for natural gas, transportation and packaging in the
quarter resulted in lower margins for the company.
"Despite these challenges, we feel positive about the direction
of our business. Our Specialty Products Group remained
significantly ahead of last year in terms of both sales and
operating income, and we are particularly pleased with the growth
in the group's Latin American business. This quarter, the Crop
Production and Horticultural Products Group enjoyed an increase
in sales over the third quarter a year ago, even with the
continued weakness in the agricultural carriers business.
"Income for the quarter was positively impacted by an 18%
decrease in operating expenses compared to the same period one
year ago. This reduction was the result of reduced incentive
compensation expense and lower discretionary spending in
advertising.
"In March, the Securities and Exchange Commission granted
non-accelerated filers like Oil-Dri an additional year to comply
with Sarbanes-Oxley Act Section 404. Oil-Dri will now be
expected to comply for its fiscal year ending July 2006.
"Beginning this quarter, we are including a cash flow statement
to further detail our quarterly performance. We hope this
additional information will be useful for investors' assessment
of our business. The management team and I are very focused on
generating free cash flow."
BUSINESS REVIEW
CONSUMER PRODUCTS GROUP - Net sales were up in the quarter
3% and up 1% for the nine-months. Operating income for the
quarter was down 8% and down 4% for the nine-months. Sales
of Cat's Pride and Jonny Cat branded cat litters were strong
in the quarter in the U.S. and Canada. The company's co-pack
business also showed sales increases. Private label
accounts experienced a slight drop year over year.
Overall, the increase in manufacturing costs, including
fuel, packaging and transportation, had a negative impact
on operating income. Strong competitor marketing also
continues to pressure sales growth.
CROP PRODUCTION AND HORTICULTURAL PRODUCTS GROUP - Net sales were
up 3% in the quarter and down 18% for the nine-month period.
Operating income in the quarter was down 27% and down 55%
year-to-date. While agricultural carrier sales continue
to be sluggish, sports turf product sales were up. The
same factors which contributed to slow agricultural sales
early in the fiscal year, mainly the increasing
acceptance of genetically-modified and treated seeds and
an irregular buying season, continued to affect the third
quarter.
-- more --
INDUSTRIAL AND AUTOMOTIVE PRODUCTS GROUP - Net sales were flat in
the quarter and up 5% in the nine-month period. Despite
increased manufacturing and packaging costs,
profitability has increased year-to-date due to price
increases. Oil-Dri branded floor absorbent volume was
down in the quarter, while synthetic absorbent products
showed a slight sales increase.
SPECIALTY PRODUCTS GROUP - Net sales were up 10% for the quarter
and up 13% for the nine-month period. Operating income in
the quarter was up 19% and up 14% year to date. Continued
focus on product mix and increased volume in the United
States and Latin America drove sales and profitability.
FINANCIAL HIGHLIGHTS
On March 15, 2005, Oil-Dri's Board of Directors declared a
regular quarterly cash dividend of $0.11 per share of Common
Stock. The dividend will be payable on June 10, 2005 to
stockholders of record at the close of business on May 8, 2005.
At the April 30, 2005 closing price of $17.50 per share and
assuming cash dividends continue at the same rate, the annual
yield on Common Stock is 2.5%.
During the quarter, the company repurchased 167,900 shares of
Common Stock at a cost of approximately $3,135,000. For the
nine-month period, Common Stock repurchases totaled $7,082,000.
Cash, cash equivalents and short-term investments at April 30,
2005, totaled $16,930,000. Operating cash flow for the
nine-month period was $7,577,000. Capital expenditures for the
nine months totaled $5,230,000, which is $405,000 less than the
depreciation and amortization of $5,635,000.
LOOKING FORWARD
"While we are confident in the steady growth of our business, we
are faced with several manufacturing cost-related challenges,
including energy, transportation and packaging," added Jaffee.
"Our business is heavily dependent on these commodities which,
under current conditions, negatively impacted our business.
Through pre-emptive measures, including corporate price
increases, manufacturing process improvements and business
evaluations, we believe we can lessen the impact of these
expenses and continue to grow our business.
"It is apparent, however, these costs will continue into the
fourth quarter and impact our previous earnings guidance for the
fiscal year. We are therefore revising our projected earnings
estimate range for fiscal year 2005 to $1.00 to $1.10 per diluted
share."
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THE COMPANY WILL OFFER A LIVE WEB CAST OF THE THIRD QUARTER
EARNINGS TELECONFERENCE ON FRIDAY MAY 27, 2005 AT 10:00AM CDT.
TO LISTEN TO THE CALL VIA THE WEB, PLEASE VISIT
WWW.STREETEVENTS.COM OR WWW.OILDRI.COM. AN ARCHIVED RECORDING OF
THE CALL WILL BE AVAILABLE FOR APPROXIMATELY 30 DAYS FOLLOWING
THE CALL AND WRITTEN TRANSCRIPTS OF ALL TELECONFERENCES ARE
POSTED ON THE OIL-DRI WEBSITE.
OIL-DRI CORPORATION OF AMERICA IS THE WORLD'S LARGEST
MANUFACTURER OF CAT LITTER AND A LEADING SUPPLIER OF SPECIALTY
SORBENT PRODUCTS FOR INDUSTRIAL, AUTOMOTIVE, AGRICULTURAL,
HORTICULTURAL AND SPECIALTY MARKETS.
JONNY CAT, CAT'S PRIDE, AGSORB, PRO'S CHOICE, CONDITIONADE,
ULTRA-CLEAR AND PURE-FLO ARE REGISTERED TRADEMARKS OF OIL-DRI
CORPORATION OF AMERICA.
THIS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS
REGARDING THE COMPANY'S EXPECTED PERFORMANCE FOR FUTURE PERIODS,
AND ACTUAL RESULTS FOR SUCH PERIODS MIGHT MATERIALLY DIFFER.
SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO UNCERTAINTIES
WHICH INCLUDE, BUT ARE NOT LIMITED TO, INTENSE COMPETITION FROM
MUCH LARGER ORGANIZATIONS IN THE CONSUMER MARKET; THE LEVEL OF
SUCCESS IN IMPLEMENTATION OF PRICE INCREASES AND SURCHARGES;
INCREASING ACCEPTANCE OF GENETICALLY MODIFIED AND TREATED SEED
AND OTHER CHANGES IN OVERALL AGRICULTURAL DEMAND; INCREASING
REGULATION OF THE FOOD CHAIN; CHANGES IN THE MARKET CONDITIONS,
THE OVERALL ECONOMY, ENERGY PRICES, AND OTHER FACTORS DETAILED
FROM TIME TO TIME IN THE COMPANY'S ANNUAL REPORT AND OTHER
REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
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)
THIRD QUARTER ENDED APRIL 30,
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2005 % OF SALES 2004 % OF SALES
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NET SALES $ 48,249 100.0% $ 46,616 100.0%
COST OF SALES 38,490 79.8% 35,548 76.3%
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GROSS PROFIT 9,759 20.2% 11,068 23.7%
OPERATING EXPENSES (6,805) -14.1% (8,304) -17.8%
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OPERATING INCOME 2,954 6.1% 2,764 5.9%
INTEREST EXPENSE (437) -0.9% (525) -1.1%
OTHER INCOME 197 0.4% (8) 0.0%
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INCOME BEFORE INCOME TAXES 2,714 5.6% 2,231 4.8%
INCOME TAXES 742 1.5% 407 0.9%
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NET INCOME $ 1,972 4.1% $ 1,824 3.9%
=========================================
NET INCOME PER SHARE:
BASIC COMMON $ 0.38 $ 0.36
BASIC CLASS B COMMON $ 0.29 $ 0.27
DILUTED $ 0.33 $ 0.30
AVERAGE SHARES OUTSTANDING:
BASIC COMMON 4,036 4,050
BASIC CLASS B COMMON 1,458 1,450
DILUTED 5,950 6,072
NINE MONTHS ENDED APRIL 30,
-----------------------------------------
2005 % OF SALES 2004 % OF SALES
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NET SALES $141,851 100.0% $140,708 100.0%
COST OF SALES 110,845 78.1% 107,469 76.4%
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GROSS PROFIT 31,006 21.9% 33,239 23.6%
LOSS ON IMPAIRED LONG-LIVED ASSETS -- -- (464) -0.3%
OPERATING EXPENSES (22,920) -16.2% (24,452) -17.4%
-----------------------------------------
OPERATING INCOME 8,086 5.7% 8,323 5.9%
INTEREST EXPENSE (1,332) -0.9% (1,589) -1.1%
OTHER INCOME 590 0.4% 350 0.2%
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INCOME BEFORE INCOME TAXES 7,344 5.2% 7,084 5.0%
INCOME TAXES 1,946 1.4% 1,814 1.3%
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NET INCOME $ 5,398 3.8% $ 5,270 3.7%
=========================================
NET INCOME PER SHARE:
BASIC COMMON $ 1.05 $ 1.03
BASIC CLASS B COMMON $ 0.79 $ 0.77
DILUTED $ 0.91 $ 0.89
AVERAGE SHARES OUTSTANDING:
BASIC COMMON 4,049 4,036
BASIC CLASS B COMMON 1,453 1,433
DILUTED 5,948 5,937
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 APRIL 30,
-----------------------
2005 2004
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CURRENT ASSETS
CASH, CASH EQUIVALENTS AND INVESTMENTS $ 16,930 $ 20,822
ACCOUNTS RECEIVABLE, NET 23,274 23,446
INVENTORIES 13,490 13,635
PREPAID EXPENSES 7,673 7,911
----------------------
TOTAL CURRENT ASSETS 61,367 65,814
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PROPERTY, PLANT AND EQUIPMENT 47,710 46,144
OTHER ASSETS 12,368 15,921
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TOTAL ASSETS $121,445 $127,879
======================
CURRENT LIABILITIES
CURRENT MATURITIES OF NOTES PAYABLE $ 3,080 $ 4,000
ACCOUNTS PAYABLE 4,782 4,828
DIVIDENDS PAYABLE 558 515
ACCRUED EXPENSES 12,702 16,667
----------------------
TOTAL CURRENT LIABILITIES $ 21,122 $ 26,010
----------------------
LONG-TERM LIABILITIES
NOTES PAYABLE 20,240 23,400
OTHER NONCURRENT LIABILITIES 6,391 5,411
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TOTAL LONG-TERM LIABILITIES 26,631 28,811
----------------------
STOCKHOLDERS' EQUITY 73,692 73,058
----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $121,445 $127,879
======================
BOOK VALUE PER SHARE OUTSTANDING $ 13.39 $ 13.36
ADDITIONS TO AND ACQUISITIONS OF
PROPERTY, PLANT AND EQUIPMENT THIRD QUARTER $ 1,266 $ 1,495
YEAR TO DATE $ 5,230 $ 3,722
DEPRECIATION AND AMORTIZATION CHARGES THIRD QUARTER $ 1,813 $ 1,985
YEAR TO DATE $ 5,635 $ 6,109
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 NINE MONTHS ENDED
APRIL 30
-------------------------
CASH FLOWS FROM OPERATING ACTIVITIES 2005 2004
-------------------------
NET INCOME $ 5,398 $ 5,270
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 5,635 6,109
DECREASE IN ACCOUNTS RECEIVABLE 915 75
INCREASE IN INVENTORIES (1,091) (1,128)
DECREASE IN ACCOUNTS PAYABLE (177) (1,732)
(DECREASE) INCREASE IN ACCRYED EXPENSES (4,040) 2,750
OTHER 937 2,368
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TOTAL ADJUSTMENTS 2,179 8,442
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NET CASH PROVIDED BY OPERATING ACTIVITIES 7,577 13,712
-------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
CAPITAL EXPENDITURES (5,230) (3,722)
OTHER 3,916 (4,343)
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NET CASH USED IN INVESTING ACTIVITIES (1,314) (8,065)
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CASH FLOWS FROM FINANCING ACTIVITIES
PRINCIPAL PAYMENTS ON LONG-TERM DEBT (4,080) (4,000)
(1,647) (1,482)
DIVIDENDS PAID
PURCHASE OF TREASURY STOCK (7,082) (1,344)
OTHER 3,909 1,279
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NET CASH USED IN FINANCING ACTIVITIES (8,900) (5,547)
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (2,637) 100
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 6,348 4,753
-------------------------
CASH AND CASH EQUIVALENTS, APRIL 30 $ 3,711 $ 4,853
=========================