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) SEPTEMBER 22, 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 jurisdiction (Commission File (IRS Employer
of incorportion) Number) Identification No.)
410 NORTH MICHIGAN AVENUE
SUITE 400
CHICAGO, ILLINOIS 60611-4213
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(Address of principal executive offices) (Zip Code)
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 September 22, 2005, Oil-Dri Corporation of America (the "Registrant") issued
a press release announcing its fourth quarter and full fiscal year results of
operations for its fiscal year ended July 31, 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 September 22, 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
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Charles P. Brissman
Vice President and General Counsel
Date: September 23, 2005
EXHIBIT INDEX
Exhibit
NUMBER DESCRIPTION OF EXHIBITS
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99.1 Press Release of Registrant dated September 22, 2005.
Exhibit 99.1
RELEASE:Immediate CONTACT: Ronda J. Williams
312-706-3232
OIL-DRI REPORTS FOURTH QUARTER AND YEAR-END RESULTS
CHICAGO - September 22, 2005 - Oil-Dri Corporation of America
(NYSE: ODC) today announced sales of $46,017,000 for the fourth
quarter ended July 31, 2005 compared to sales of $44,803,000 in the
same quarter one year ago. The company reported net income of
$1,142,000 or $0.19 per diluted share in the fourth quarter. In the
fourth quarter one year ago, the Company recorded a pre-tax charge
of $1,250,000 and incurred approximately $700,000 of additional
legal expenses associated with patent infringement litigation.
These pre-tax costs reduced last year's fourth quarter net income
resulting in a net loss of $237,000 or a loss of $0.04 per diluted
share.
Sales for fiscal year 2005 were $187,868,000, compared to sales of
$185,511,000 for fiscal year 2004. Net income for the fiscal year
was $6,540,000 or $1.10 per diluted share, a 30% increase over net
income of $5,033,000 or $0.84 per diluted share for fiscal year 2004.
FISCAL 2005 IN REVIEW
Daniel Jaffee, Oil-Dri President and CEO said, "We are quite
pleased with our year-end results in spite of the unanticipated and
unprecedented increases in the cost of energy, packaging materials
and delivery costs.
"During the year the Board of Directors increased the dividend by
10% for the second year in a row and authorized an additional
500,000 shares for repurchase in our Common Stock buy-back program.
The company has repurchased 727,906 shares of Common Stock over the
past three years. We are also very pleased with the continued
improvement in other key metrics as indicated below:
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KEY METRICS F'05 F'04 F'03 F'02 F'01
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Return on average 5.2% 3.9% 2.4% (0.9%) 0.7%
total assets
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Return on average 9.0% 7.1% 4.5% (1.6%) 1.3%
stockholders'
equity
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Cash, cash $19,435,000 $23,069,000 $16,670,000 $16,236,000 $5,701,000
equivalents
& investments
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Notes payable $23,320,000 $27,400,000 $31,400,000 $34,250,000 $36,406,000
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Notes payable $3,885,000 $4,331,000 $14,730,000 $18,014,000 $30,705,000
minus cash
and equivalents
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Net income $1.10 $0.84 $0.54 ($0.19) $0.16
(loss) per
diluted share
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Stock price at $18.03 $16.39 $11.95 $7.50 $8.00
July 31,
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"We are concerned about the reduction in gross margins compared
with last year which is attributable to increased energy costs and
other manufacturing components. Now more than ever, it is
imperative that we efficiently manage manufacturing costs and sell
higher margin products in our profitable regions.
"This year we also absorbed significant expense associated with our
Sarbanes-Oxley section 404 readiness efforts. The documentation and
testing process is time consuming and very costly and are
particularly significant to a company of our size. We were pleased
that the SEC Advisory Committee on Smaller Public Companies, of
which our Chairman, Richard Jaffee is a member, recommended another
year's delay of the implementation of section 404. We hope
additional relief will ultimately be granted.
"On July 1, 2005, Oil-Dri joined the Russell Microcap Index. This
newly launched index is comprised of the smallest 1,000 securities
in the small-cap Russell 2000 Index along with the next smallest
1,000 companies, based on ranking of all U.S. equities by market
capitalization. Our inclusion in this new index will offer a
barometer to compare performance against the microcap marketplace
of stocks."
-more-
YEAR-END BUSINESS REVIEW
The CONSUMER PRODUCTS GROUP increased sales in the quarter by
2% and 1% for the fiscal year. Operating income was flat in
the fourth quarter and down 3% for the year. Branded business
was up primarily due to new product rollouts while strong
competition negatively affected private label sales.
Scoopable litter sales were up, while coarse litter sales
slightly declined reflecting general cat litter market
trends. Favorable sales mix and lower expenses, however,
helped alleviate rising production and packaging costs.
The increase in sales primarily came from Oil-Dri Canada,
co-manufactured businesses and non-grocery outlets.
During the year new consumer websites for Jonny Cat and Cat's
Pride were developed to promote the brands. Consumers can
visit the websites at WWW.JONNYCAT.COM and WWW.CATSPRIDE.COM.
Sales for the CROP PRODUCTION AND HORTICULTURAL PRODUCTS GROUP
were up 7% in the quarter but down 14% for the year. Operating
income in the quarter was down 82% and down 57% for the year.
Throughout the year Agsorb carrier sales were negatively
affected by the increasing acceptance of genetically modified
seed and seed treatments for corn rootworm as well as inventory
carryover from aggressive customer purchasing last year.
The sales downturn, however, did not continue in the fourth
quarter. Pro's Choice sports field products increased sales
for the year helping to offset decreased sales of Agsorb
and Flo-Fre. Higher manufacturing and freight costs
negatively impacted income for all product lines within
the group.
INDUSTRIAL AND AUTOMOTIVE PRODUCTS GROUP sales were up 1% for
the quarter and up 4% for the year. The group reported an
operating loss for the quarter and year. Price increases
primarily contributed to increased sales of both floor
absorbent and synthetic sorbents. Manufacturing and freight
costs greatly effected margins.
Sales for the SPECIALTY PRODUCTS GROUP were up 6% in the
quarter and up 11% for the fiscal year. Operating income was
up 5% in the quarter and up 12% for the year. ConditionAde
binder in Latin America and Asia strongly contributed to the
group's sales growth. Pure-Flo bleaching earth sales were also
up in the U.S. and abroad.
FINANCIAL REVIEW
On June 9, 2005, Oil-Dri's Board of Directors declared a regular
quarterly cash dividend of $0.11 per share on the company's Common
Stock. The dividend was paid on September 9, 2005 to stockholders
of record at the close of business on August 5, 2005. At the July
31, 2005 closing price of $18.03 and assuming cash dividends
continue at the same rate, the annual yield on the company's Common
Stock is 2.4%.
During the fiscal year, the company repurchased 463,800 shares of
Common Stock, at an average price of $17.46 per share. The company
has 218,704 shares remaining under its current repurchase
authorization.
Cash, cash equivalents and short-term investments at July 31, 2005,
totaled $19,435,000. Operating cash flow was $12,810,000 for the
fiscal year. Capital expenditures for the fiscal year totaled
$7,311,000, which was $118,000 less than the depreciation and
amortization of $7,429,000. Debt repayments for the year totaled
$4,080,000.
LOOKING FORWARD
Jaffee added, "Last week, we sold water rights we owned in northern
Nevada to an unaffiliated party. We were pleased to liquidate these
non-strategic assets, and expect to record non-recurring income of
approximately $0.04 per share in our first quarter ending October
31, 2005 as a result of the transaction.
"For the past three years we have focused our R&D efforts on new
product development. These efforts have been successful in
establishing line extensions for our Jonny Cat cat litter brand,
revitalizing our consumer packaging, and qualifying
business-to-business opportunities. As we move into the next fiscal
year, we will begin to capitalize on emerging and new
business-to-business markets by creating a new product group.
"Steve Azzarello was named Vice President and General Manager
heading the new Precision Products Group. He will oversee the
animal health and nutrition product lines including ConditionAde
binder, Poultry Guard litter amendment, PelUnite Plus pellet binder
and all new business-to-business products. This transition is a
natural progression as we strive to grow our specialized
businesses.
"Beginning fiscal 2006, we will no longer provide annual earnings
per share guidance. We will continue to discuss value drivers,
strategic initiatives and significant operating issues in our
quarterly news releases and teleconferences. We value our investors
and believe these changes will allow us to better focus on
communicating our long-term business strategies.
-more-
"Finally, our hearts go out to the many families who have been
displaced by Hurricane Katrina. We have many employees whose family
and friends have suffered from this disaster. Oil-Dri and its
employees, through a matching funds program, have made
contributions to assisting charitable organizations in hopes of
providing some relief for the victims. We will continue to keep
everyone affected by this disaster in our thoughts."
###
THE COMPANY WILL OFFER A LIVE WEB CAST OF THE FOURTH QUARTER
EARNINGS TELECONFERENCE ON FRIDAY, SEPTEMBER 23, 2005 AT 10:00AM
CENTRAL TIME. TO LISTEN TO THE CALL VIA THE WEB, PLEASE VISIT
WWW.STREETEVENTS.COM OR WWW.OILDRI.COM. AN ARCHIVED WEBCAST OF THE
CALL WILL BE AVAILABLE FOR APPROXIMATELY 30 DAYS AFTER THE CALL AND
WRITTEN TRANSCRIPTS OF ALL TELECONFERENCES ARE POSTED ON THE
OIL-DRI WEB SITE.
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JONNY CAT, CAT'S PRIDE, PRO'S CHOICE, AGSORB, FLO-FRE,
CONDITIONADE, PELUNITE PLUS, POULTRY GUARD AND PURE-FLO ARE ALL
REGISTERED TRADEMARKS OF OIL-DRI CORPORATION OF AMERICA. RUSSELL
MICROCAP(TM) INDEX IS A TRADEMARK OF FRANK RUSSELL COMPANY.
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.
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, VOLATILITY IN THE PRICE AND AVAILABILITY OF NATURAL GAS,
FUEL OIL AND OTHER ENERGY SOURCES, AND OTHER FACTORS DETAILED FROM
TIME TO TIME IN THE COMPANY'S ANNUAL REPORT AND OTHER REPORTS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION.
OIL - DRI CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share amounts)
(unaudited)
FOURTH QUARTER ENDED JULY 31,
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% OF % OF
2005 SALES 2004 SALES
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NET SALES $ 46,017 100.0% $ 44,803 100.0%
COST OF SALES 36,668 79.7% 34,794 77.7%
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GROSS PROFIT 9,349 20.3% 10,009 22.3%
OTHER CONTRACTUAL INCOME AND
NONRECURRING CHARGES -- -- (1,250) -2.8%
OPERATING EXPENSES (7,550) -16.4% (8,523) -19.0%
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OPERATING INCOME 1,799 3.9% 236 0.5%
INTEREST EXPENSE (426) -0.9% (490) -1.1%
OTHER INCOME 215 0.5% 101 0.3%
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INCOME (LOSS) BEFORE INCOME TAXES 1,588 3.5% (153) -0.3%
INCOME TAXES 446 1.0% 84 0.2%
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NET INCOME (LOSS) $ 1,142 2.5% $ (237) -0.5%
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NET INCOME PER SHARE:
BASIC COMMON $0.22 $(0.04)
BASIC CLASS B COMMON $0.17 $(0.04)
DILUTED $0.19 $(0.04)
AVERAGE SHARES OUTSTANDING:
BASIC COMMON 4,005 4,050
BASIC CLASS B COMMON 1,458 1,450
DILUTED 5,892 5,500
TWELVE MONTHS ENDED JULY 31,
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% OF % OF
2005 SALES 2004 SALES
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NET SALES $187,868 100.0% $185,511 100.0%
COST OF SALES 147,513 78.5% 142,263 76.7%
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GROSS PROFIT 40,355 21.5% 43,248 23.3%
OTHER CONTRACTUAL INCOME AND
NONRECURRING CHARGES -- -- (1,250) -0.7%
LOSS ON IMPAIRED LONG-LIVED ASSETS -- -- (464) -0.2%
OPERATING EXPENSES (30,470) -16.2% (32,975) -17.8%
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OPERATING INCOME 9,885 5.3% 8,559 4.6%
INTEREST EXPENSE (1,758) -0.9% (2,079) -1.1%
OTHER INCOME 805 0.4% 451 0.2%
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INCOME BEFORE INCOME TAXES 8,932 4.8% 6,931 3.7%
INCOME TAXES 2,392 1.3% 1,898 1.0%
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NET INCOME $ 6,540 3.5% $ 5,033 2.7%
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NET INCOME PER SHARE:
BASIC COMMON $1.28 $0.98
BASIC CLASS B COMMON $0.96 $0.74
DILUTED $1.10 $0.84
AVERAGE SHARES OUTSTANDING:
BASIC COMMON 4,038 4,040
BASIC CLASS B COMMON 1,454 1,437
DILUTED 5,964 5,962
OIL - DRI CORPORATION OF AMERICA
CONSOLIDATED BALANCE SHEETS
(in thousands, except for per share amounts)
(unaudited)
AS OF JULY 31,
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2005 2004
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CURRENT ASSETS
CASH, CASH EQUIVALENTS AND INVESTMENTS $ 19,435 $ 23,069
ACCOUNTS RECEIVABLE, NET 23,611 24,169
INVENTORIES 12,686 12,399
PREPAID EXPENSES 7,364 8,344
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TOTAL CURRENT ASSETS 63,096 67,981
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PROPERTY, PLANT AND EQUIPMENT 47,898 47,802
OTHER ASSETS 12,577 13,092
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TOTAL ASSETS $123,571 $128,875
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CURRENT LIABILITIES
CURRENT MATURITIES OF NOTES PAYABLE $ 3,080 $ 4,080
ACCOUNTS PAYABLE 5,228 5,701
DIVIDENDS PAYABLE 559 513
ACCRUED EXPENSES 13,667 16,742
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TOTAL CURRENT LIABILITIES 22,534 27,036
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LONG-TERM LIABILITIES
NOTES PAYABLE 20,240 23,320
OTHER NONCURRENT LIABILITIES 6,943 6,261
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TOTAL LONG-TERM LIABILITIES 27,183 29,581
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STOCKHOLDERS' EQUITY 73,854 72,258
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $123,571 $128,875
=====================
BOOK VALUE PER SHARE OUTSTANDING $13.45 $13.19
ADDITIONS TO AND ACQUISITIONS OF
PROPERTY, PLANT AND EQUIPMENT FOURTH QUARTER $2,081 $2,345
YEAR TO DATE $7,311 $6,067
DEPRECIATION AND AMORTIZATION CHARGES FOURTH QUARTER $1,794 $1,948
YEAR TO DATE $7,429 $8,057
OIL - DRI CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
FOR THE TWELVE
MONTHS ENDED
JULY 31
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CASH FLOWS FROM OPERATING ACTIVITIES 2005 2004
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NET INCOME $ 6,540 $ 5,033
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATION ACTIVITIES:
DEPRECIATION AND AMORTIZATION 7,429 8,057
DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE 531 (615)
(INCREASE) DECREASE IN INVENTORIES (287) 108
(DECREASE) IN ACCOUNTS PAYABLE (26) (823)
(DECREASE) INCREASE IN ACCRUED EXPENSES (3,074) 2,825
OTHER 1,697 3,700
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TOTAL ADJUSTMENTS 6,270 13,252
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NET CASH PROVIDED BY OPERATING ACTIVITIES 12,810 18,285
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CASH FLOWS FROM INVESTING ACTIVITIES
CAPITAL EXPENDITURES (7,311) (6,067)
OTHER 3,736 (4,361)
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NET CASH USED IN INVESTING ACTIVITIES (3,575) (10,428)
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CASH FLOWS FROM FINANCING ACTIVITIES
PRINCIPAL PAYMENTS ON LONG-TERM DEBT (4,080) (4,000)
DIVIDENDS PAID (2,206) (1,998)
PURCHASE OF TREASURY STOCK (8,214) (1,824)
OTHER 4,862 1,560
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NET CASH USED IN FINANCING ACTIVITIES (9,638) (6,262)
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NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (403) 1,595
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 6,348 4,753
----------------------
CASH AND CASH EQUIVALENTS, JULY 31 $ 5,945 $ 6,348
======================