CHICAGO, Nov. 28 /PRNewswire-FirstCall/ -- Oil-Dri Corporation of America today reported net sales of $55,285,000 for its first fiscal quarter ended October 31, 2007, a 6% increase compared with net sales of $52,129,000 in the same quarter one year ago. The Company reported net income for the quarter of $2,484,000, or $0.35 per diluted share, a 51% increase compared with net income of $1,647,000, or $0.24 per diluted share, in the same quarter one year ago.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020417/ODCLOGO) First Quarter Review
President and Chief Executive Officer Daniel S. Jaffee said, "I am very pleased with the strong first quarter results, which reflect both healthy sales growth and gross margin enhancement. The combination of our focus on strategic pricing, improved manufacturing and logistic efficiencies, and procurement sourcing initiatives helped to expand our gross margin to 22.5% in the quarter. I am proud of the entire Oil-Dri Team. By constantly communicating with our business partners, we are able to meet or exceed our customers' expectations on a daily basis."
Business Review
Net sales for the Company's Retail and Wholesale Products Group were $38,368,000 and group income was $4,350,000 in the first quarter. Net sales and volume were up for the Group's private label cat litter business as a result of added distribution that began in the second half of the last fiscal year. The Group's Canadian and United Kingdom operations also contributed to increased net sales. Net sales of the Group's industrial and automotive products were down in the quarter due to lower sales of floor absorbents.
Net sales for the Company's Business-to-Business Products Group were $16,917,000 and group income was $4,001,000 in the first quarter. The Group achieved increased net sales and volume for its bleaching clay, sports turf and animal health and nutrition products. Net sales of the Group's agricultural carriers, however, continued to erode due to increasing acceptance of genetically modified seeds.
Financial Review
On October 9, 2007, Oil-Dri's Board of Directors declared quarterly cash dividends of $0.13 per share of outstanding Common Stock and $0.0975 per share of outstanding Class B Stock. The dividends will be payable on December 7, 2007 to stockholders of record at the close of business on November 23, 2007. At the October 31, 2007 closing price of $19.59 per share and assuming cash dividends continue at the same rate, the annual yield on the Company's Common Stock is 2.7%.
The Company has paid cash dividends continuously since 1974 and has increased quarterly cash dividend rates in each of the last four fiscal years.
Cash and cash equivalents totaled $5,370,000 and short-term investments totaled $22,350,000 at October 31, 2007. Capital expenditures for the first quarter totaled $2,147,000, which was $285,000 more than the depreciation and amortization of $1,862,000.
Looking Forward
Jaffee added, "On November 1, 2007, just after the close of our first quarter, we consummated a sale of California emission reduction credits to an unaffiliated third party. As a result of the sale, we expect to report a pre-tax gain in other income of approximately $500,000 in our second quarter ending January 31, 2008.
"We have been successful in delivering outstanding product quality and unsurpassed service to our customers. In return, our business partners have rewarded us with an increased share of their value added requirements. We expect this trend to continue during the second quarter, which is historically a strong quarter for our business."
The Company will offer a live webcast of the first quarter earnings teleconference on Thursday, November 29, 2007, at 10am CT. To listen to the call via the web, please visit http://www.streetevents.com/ or http://www.oildri.com/. An archived recording of the call and written transcripts of all teleconferences are posted on the Oil-Dri website.
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) Three Months Ended October 31, 2007 % of Sales 2006 % of Sales Net Sales $55,285 100.0 % $52,129 100.0 % Cost of Sales (42,855) 77.5 % (41,466) 79.5 % Gross Profit 12,430 22.5 % 10,663 20.5 % Operating Expenses (8,860) 16.0 % (8,161) 15.7 % Operating Income 3,570 6.5 % 2,502 4.8 % Interest Expense (574) 1.0 % (617) 1.2 % Other Income 430 0.8 % 363 0.7 % Income Before Income Taxes 3,426 6.2 % 2,248 4.3 % Income Taxes (942) 1.7 % (601) 1.2 % Net Income $2,484 4.5 % $1,647 3.2 % Net Income Per Share: Basic Common $0.38 $0.27 Basic Class B Common $0.31 $0.20 Diluted $0.35 $0.24 Average Shares Outstanding: Basic Common 5,004 4,852 Basic Class B Common 1,840 1,804 Diluted 7,145 6,913 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 October 31, 2007 2006 Current Assets Cash and Cash Equivalents $5,370 $8,127 Investment in Treasury Securities 22,350 16,851 Accounts Receivable, net 27,579 26,009 Inventories 17,536 15,947 Prepaid Expenses 5,757 6,791 Total Current Assets 78,592 73,725 Property, Plant and Equipment 52,054 51,880 Other Assets 12,410 12,640 Total Assets $143,056 $138,245 Current Liabilities Current Maturities of Notes Payable $8,080 $4,080 Accounts Payable 6,395 6,215 Dividends Payable 842 755 Accrued Expenses 13,705 14,519 Total Current Liabilities 29,022 25,569 Long-Term Liabilities Notes Payable 23,000 31,080 Other Noncurrent Liabilities 7,676 8,295 Total Long-Term Liabilities 30,676 39,375 Stockholders' Equity 83,358 73,301 Total Liabilities and Stockholders' Equity $143,056 $138,245 Book Value Per Share Outstanding $12.18 $11.01 Acquisitions of Property, Plant and Equipment First Quarter $2,147 $2,352 Depreciation and Amortization Charges First Quarter $1,862 $1,824 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 Three Months Ended October 31, CASH FLOWS FROM OPERATING ACTIVITIES 2007 2006 Net Income $ 2,484 $ 1,647 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and Amortization 1,862 1,824 Decrease in Accounts Receivable 295 84 (Increase) in Inventories (2,299) (250) Increase (Decrease) in Accounts Payable 296 (1,034) (Decrease) in Accrued Expenses (2,606) (164) Other (28) (68) Total Adjustments (2,480) 392 Net Cash Provided by Operating Activities 4 2,039 CASH FLOWS FROM INVESTING ACTIVITIES Capital Expenditures (2,147) (2,352) Net (Purchases) Dispositions of Investment Securities (4,208) 2,617 Other -- 30 Net Cash (Used in) Provided by Investing Activities (6,355) 295 CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on Long-Term Debt (80) (80) Dividends Paid (834) (754) Other 909 75 Net Cash Used in Financing Activities (5) (759) Effect of exchange rate changes on cash and cash equivalents (407) (55) Net (Decrease) Increase in Cash and Cash Equivalents (6,763) 1,520 Cash and Cash Equivalents, Beginning of Year 12,133 6,607 Cash and Cash Equivalents, October 31 $ 5,370 $ 8,127
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