Oil-Dri Announces Record Financial Results for the Third Quarter and First

CHICAGO, June 08, 2023 (GLOBE NEWSWIRE) — Oil-Dri Corporation of America (NYSE: ODC), producer and marketer of sorbent mineral products, today announced results for its third quarter and first nine-months of fiscal year 2023.

^{* Segment net sales and operating income for nine months ended April 30, 2022 have been adjusted for a realignment of segments. See Note 11 of the unaudited Notes to the Condensed Consolidated Financial Statements in our Quarterly Report on Form 10-Q for the year ended April 30, 2023.
† Please refer to Reconciliation of Non-GAAP Financial Measures below for a reconciliation of Non-GAAP items to the comparable GAAP measures.}

Daniel S. Jaffee, President and Chief Executive Officer, stated, “We achieved outstanding third quarter results with record sales, gross profit and net income. Our team has been committed to driving profitability across all principal product lines, and I am extremely pleased with the success. Our goal has been to return gross margins to historical levels, and we made great strides during the last nine months and particularly within the third quarter. We gained 350 basis points in gross margin over the second quarter of fiscal 2023, as well as 790 basis points over the third quarter last year. We appreciate that our customers have been receptive to our pricing actions to offset inflationary headwinds. Excluding the one-time non-cash charge of $4.8 million in connection with the termination of our pension plan, we delivered approximately $13.3 million in net income. As we move forward into the final three months of our fiscal year, we will remain dedicated to revenue, volume, and profitability enhancement while implementing our strategic initiatives.”

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Consolidated Results
Consolidated net sales in the third quarter reached an all-time high of $105.4 million, a 23% increase over the prior year. This increase was driven by pricing actions taken across multiple principal products in order to improve profitability. As a result, the Company experienced sales gains within all areas of our business. Revenues from cat litter, fluids purification and agricultural products fueled a significant portion of the growth.

Third quarter consolidated gross profit was a record $27.5 million, an increase of $11.8 million, or 76%, over the third quarter of the prior year, with margin expansion to 26% in fiscal 2023 from 18% in fiscal 2022. Domestic cost of goods sold per ton increased 12% compared to the third quarter of the prior year as a result of higher per ton freight and non-fuel manufacturing costs. The implementation of several rounds of pricing actions during the last nine months helped to offset this increase.

Selling, general and administrative (“SGA”) expenses were $13.0 million during the third quarter of fiscal 2023 compared to $14.0 million for the same period last year. This $1 million, or 7%, reduction primarily reflects lower unallocated corporate expenses and the reclassification of certain trade spending charges from SG&A to net sales.

Consolidated operating income was approximately $14.5 million for the three months ended April 30, 2023, compared to a loss of $4.0 million during the same period in fiscal 2022. Last year’s operating loss includes a one-time non-cash goodwill impairment charge of $5.6 million for the Retail & Wholesale (“R&W”) Products Group. Excluding this impairment, consolidated operating income for the third quarter of fiscal 2022 was $1.6 million.

Total other (expense) income, net was $(4.5) million for the third quarter of fiscal 2023 compared to total other (expense) income, net of $0.2 million in the same period of fiscal year 2022. In April 2023, Oil-Dri settled all outstanding obligations related to its decision to terminate the Company’s pension plan. This resulted in the…