CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended October 31, 1995 Commission File Number 0-8675
OIL-DRI CORPORATION OF AMERICA
(Exact name of registrant as specified in its charter)
DELAWARE 36-2048898
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
410 North Michigan Avenue
Chicago, Illinois 60611
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 321-1515
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for at least the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.
Common Stock - 5,162,518 Shares (Including 420,596 Treasury Shares)
Class B Stock - 2,071,000 Shares
<PAGE>
<TABLE>
<CAPTION>
OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES
Consolidated Statement of Financial Position
ASSETS
October 31 July 31
(Unaudited)
1995 1994 1995
CURRENT ASSETS
<S> <C> <C> <C>
Cash and Cash Equivalents $ 7,481,401 $ 2,248,147 $ 8,829,667
Investment Securities, at Cost 1,427,000 3,586,569 2,332,665
Accounts Receivable 23,986,378 24,424,847 21,529,168
Allowance for Doubtful Accounts (202,734) (186,038) (180,602)
Inventories 11,920,535 12,592,104 10,917,099
Prepaid Expenses and Taxes 5,232,141 3,870,540 5,317,169
Total Current Assets 49,844,721 46,536,169 48,745,166
PROPERTY, PLANT AND EQUIPMENT - AT COST
<S> <C> <C> <C>
Cost 107,750,187 102,235,020 106,957,911
Less Accumulated Depreciation and
Amortization 49,425,032 41,763,672 47,498,516
Total Property, Plant
and Equipment, Net 58,325,155 60,471,348 59,459,395
OTHER ASSETS
Goodwill(Net of Accumulated
<S> <C> <C> <C> <C>
amortization) 4,271,346 4,403,394 4,304,286
Deferred Income Taxes 485,668 - 484,324
Other 4,091,076 3,346,939 3,994,512
Total Other 8,848,090 7,750,333 8,783,122
Assets
TOTAL ASSETS $117,017,966 $114,757,850 $116,987,683
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES
Consolidated Statement of Financial Position
LIABILITIES & STOCKHOLDERS' EQUITY
October 31 July 31
(Unaudited)
1995 1994 1995
CURRENT LIABILITIES
<S> <C> <C> <C>
Current Maturities of Notes $1,356,042 $ 649,944 $1,097,976
Payable
Accounts Payable - Trade 5,609,047 5,258,876 4,710,251
Dividends Payable 517,014 520,552 511,166
Accrued Expenses 8,482,087 9,377,605 9,351,455
Total Current Liabilities 15,964,190 15,806,977 15,670,848
NONCURRENT LIABILITIES
Notes Payable 20,421,579 21,519,373 20,422,265
Deferred Income Taxes - 326,284 -
Deferred Compensation 1,854,310 1,610,740 1,778,075
Other 946,154 - 778,112
Total Noncurrent Liabilities 23,222,043 23,456,397 22,978,452
Total Liabilities 39,186,233 39,263,374 38,649,300
STOCKHOLDERS EQUITY
<S> <C> <C> <C>
Common Stock 723,352 723,352 723,352
Paid-In Capital in Excess of Par
Value 7,657,394 7,657,394 7,657,394
Retained Earnings 76,919,725 72,366,497 76,033,462
Cumulative Translation Adjustment (1,010,660) (954,458) (987,781)
84,289,811 79,792,785 83,426,427
Less Treasury Stock, At Cost 6,458,078 4,298,309 5,088,044
Total Stockholders'Equity 77,831,733 75,494,476 78,338,383
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $117,017,966 $114,757,850 $116,987,683
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES
Consolidated Statement of Income and Retained Earnings
Three Months Ended October 31
1995 1994
(Unaudited) (Unaudited)
<S> <C> <C>
Net Sales $39,307,934 $39,025,208
Cost Of Sales 27,648,886 26,631,621
Gross Profit 11,659,048 12,393,587
Selling, General And Administrative
Expenses 9,312,281 8,221,582
Operating Income 2,346,767 4,172,005
OTHER INCOME (EXPENSE)
<S> <C> <C>
Interest Expense (490,161) (487,535)
Interest Income 152,594 103,539
Foreign Exchange Gain (Loss) (3,593) 3,369
Other, Net (54,426) (21,496)
(395,586) (402,123)
Income Before Income Taxes 1,951,181 3,769,882
Income Taxes 538,293 950,950
Net Income 1,412,888 2,818,932
RETAINED EARNINGS
<S> <C> <C>
Balance at Beginning of Year 76,024,301 70,077,278
Less: Cash Dividends Declared 517,464 529,713
<S> <C> <C> <C> <C>
Retained Earnings - October 31 $76,919,725 $72,366,497
Average Shares Outstanding $ 6,840,079 $ 6,957,700
Net Income Per Share $ 0.21 $ 0.41
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OIL-DRI CORPORATION OF AMERICA & SUBSIDIARIES
Consolidated Statement of Cash Flows
For the Three Months Ended October 31 (Unaudited)
1995 1994
Unaudited Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Income $1,412,888 $2,818,932
Adjustments to Reconcile Net Income to
Net Cash
Provided by Operating Activities:
Depreciation and Amortization 2,019,766 1,821,537
Provision for bad debts 28,735 9,229
(Increase) Decrease in:
Accounts Receivable (2,468,662) (4,515,026)
Inventories (1,016,138) (1,350,335)
Prepaid Expenses and Taxes 71,742 (154,179)
Other Assets (91,996) (97,794)
Increase (Decrease) in:
Accounts Payable 160,589 595,723
Accrued Expenses (104,528) 168,050
Other 168,042 -
Deferred Compensation 76,235 (151,078)
Total Adjustments (1,156,215) (3,673,873)
Net Cash Used In Operating Activities 256,673 ( 854,941)
CASH FLOWS FROM INVESTING ACTIVITIES
<S> <C> <C>
Capital Expenditures (863,670) (2,025,333)
Purchases of Investment Securities - (2,116,842)
Dispositions of Investment Securities 914,428 1,905,413
Other - 7,600
Net Cash Used in Investing Activities 50,758 (2,229,162)
CASH FLOWS FROM FINANCING ACTIVITIES
<S> <C> <S>
Proceeds from Short Term Borrowings 257,380 -
Principal Payments on Long Term Debt - (595,405)
Dividends Paid (519,286) (455,483)
Foreign Currency Translation
Adjustment (23,757) 24,563
Purchases of Treasury Stock (1,370,034) (35,740)
Net Cash Used In Financing Activities (1,655,697) (1,062,065)
Net (Decrease) in Cash and Cash
<S> <C> <C>
Equivalents (1,348,266) (4,146,168)
Cash and Cash Equivalents, Beginning of
Year $ 8,829,667 6,394,315
Cash and Cash Equivalents, October 31 $ 7,481,401 $ 2,248,147
</TABLE>
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED OCTOBER 31, 1995 COMPARED TO THREE
MONTHS ENDED OCTOBER 31, 1994
RESULTS OF OPERATIONS
Consolidated net sales for the three months ended October 31, 1995 were
$39,308,000, an increase of $283,000, or 0.7%, over sales of $39,025,000 in
the first three months of fiscal 1995. Net income for the three months
ended October 31, 1995 was $1,413,000 or $0.21 per share, a decrease of
49.9% from $2,819,000 or $0.41 per share earned in the first quarter of
fiscal 1995.
Sales of industrial and environmental sorbents increased $119,000 from
prior year first quarter levels. Sales of industrial clay absorbents
increased $272,000 or 8.5%. Sales of nonclay sorbents decreased $153,000
or 11.3%, reflecting increased competition in the markets in which the
Company participates. Sales of cat box absorbents increased $192,000 or
0.9% from fiscal 1995 first quarter results. This growth is the result of
sales increases in branded and private label products in both the grocery
and mass merchandise markets, offset by decreased contract packaging
activity. Sales of agricultural absorbents decreased $339,000 or 7.4%
from the comparable period in fiscal 1995 due to production rescheduling by
several key customers. Worldwide sales of fluid filtration and
purification products increased $105,000 or 3.2% from prior year first
quarter levels. Sales of transportation services increased $463,000 or
23.2% from the first quarter of fiscal 1995 due to increased fleet size.
Consolidated gross profit as a percentage of net sales for the three months
ended October 31, 1995 decreased to 29.7% from 31.8% in the first three
months of fiscal 1994. Changes in sales mix and increased costs of
packaging materials and freight contributed to this decline.
Operating expenses as a percentage of net sales increased to 23.7% in the
first quarter of fiscal 1996 from 21.1% in the first quarter of fiscal
1995. This increase reflects the additional costs of television and print
advertising and couponing associated with new product introductions.
Interest expense increased slightly while interest income increased
$49,100.
The Company's effective tax rate was 27.6% of income in the first quarter
of 1996 as compared to 25.2% the first quarter of fiscal 1995.
Total assets of the Company remained unchanged during the three months
ended October 31, 1995. Current assets increased $1,100,000 or 2.3% from
fiscal year end balances reflecting increased accounts receivable and
inventory balances offset against reduced cash and investments to fund
increased sales. Property, plant and equipment, net of accumulated
depreciation, decreased $1,134,000.
Total liabilities in the three months ended October 31, 1995 increased
$537,000. Current liabilities increased $293,000 or 1.9% from July 31,
1995 balances while noncurrent liabilities increased $244,000 or 1.1% from
year end.
The Company anticipates sales growth, primarily from branded and private
label cat box absorbent products, as new product introductions take hold.
The Company continues to anticipate that earnings over the remainder of
fiscal 1996 will be lower than those of fiscal 1995, principally due to the
cost of new product introductions in the consumer market. Actual results
may be materially lower than those reflected in these foward-looking
statements, due primarily to increased competition in the grocery and mass
merchandising markets.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The current ratio remained unchanged at 3.1 at October 31, 1995 compared to
July 31, 1995. Working capital increased $806,000 in the three months
ended October 31, 1995 to $33,881,000. Cash provided by operations
continues to be the Company's primary source of funds to finance operating
needs and capital expenditures. During the quarter the balances of cash,
cash equivalents and other investments declined $2,254,000. This reduction
in cash and investments was primarily used to fund capital expenditures of
$864,000, to pay dividends of $519,000 and repurchase shares of the
Company's Common Stock of $1,370,000. Total cash and investment balances
held by the Company's foreign subsidiaries at October 31, 1995 and 1994
were $2,348,000 and $3,501,000 respectively.
FOREIGN OPERATIONS
The Company's net sales by its foreign subsidiaries for the three months
ended October 31, 1995 were $2,908,000 constituting 7.4% of sales. This
represents a decrease of $64,000 or 2.1%, from the first quarter of fiscal
1995 in which foreign subsidiary sales were $2,972,000 and constituted 7.6%
of sales. Net income of the Company's foreign subsidiaries for the three
months ended October 31, 1995 was $143,000 compared with $94,000 in the
first quarter of fiscal 1995. Identifiable assets of the Company's foreign
subsidiaries as of October 31, 1995 were $9,175,000 a decrease of $628,000
from $9,803,000 as of October 31, 1994.
<PAGE>
Part II - Other Information
Item 5. (a) Exhibits: The following documents are an exhibit to
this report.
Exhibit - 11 - Statement Re: Computation of per share
earnings.
(b) During the quarter for which this report is filed, no
reports on Form 8-K were filed.
<PAGE>
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 thereunto duly authorized.
OIL-DRI CORPORATION OF AMERICA
(Registrant)
BY /s/ Donald J. Deegan
Donald J. Deegan
Director of Finance and Accounting,
Chief Accounting Officer
BY /s/ Daniel S. Jaffee
Daniel S. Jaffee
President
Dated: December 14, 1995
<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
OIL-DRI CORPORATION OF AMERICA
Computation of Weighted Average Number
of Shares Outstanding
Average
Shares-
(Weighted
Number Number of Shares)Number
of Shares Weighted of Days
Quarter End Period Days Outstanding Shares As Adjusted
<C> <C> <C> <S> <C> <C> <C>
October 31, 08/01/95 to 8 6,901,322 55,210,576
1995 08/08/95
08/09/95 to 63 6,841,322 431,003,286
10/10/95
10/11/95 to 1 6,814,922 6,814,922
10/11/95
10/12/95 to 20 6,812,922 136,258,450
10/31/95
92 629,287,224 6,840,079
0
6,840,079
<C> <C> <C> <S> <C> <C> <C>
October 31, 08/01/94 to 8 6,951,822 55,614,576
1994 08/08/94
08/09/94 to 84 6,949,822 583,785,048
10/31/94
92 639,399,624 6,949,996
Assuming exercise of options reduced by the number of shares
which could have been purchased with the proceeds from
exercise of such options.
7,704
6,957,700
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> OCT-31-1995
<CASH> 7,481,401
<SECURITIES> 1,427,000
<RECEIVABLES> 23,986,378
<ALLOWANCES> (202,734)
<INVENTORY> 11,920,535
<CURRENT-ASSETS> 49,844,721
<PP&E> 107,750,187
<DEPRECIATION> (49,425,032)
<TOTAL-ASSETS> 117,017,966
<CURRENT-LIABILITIES> 15,964,190
<BONDS> 20,421,579
<COMMON> 723,352
0
0
<OTHER-SE> 77,108,381
<TOTAL-LIABILITY-AND-EQUITY> 117,017,966
<SALES> 39,307,934
<TOTAL-REVENUES> 39,307,934
<CGS> 27,648,886
<TOTAL-COSTS> 27,648,886
<OTHER-EXPENSES> 9,188,971
<LOSS-PROVISION> 28,735
<INTEREST-EXPENSE> 490,161
<INCOME-PRETAX> 1,951,181
<INCOME-TAX> 538,293
<INCOME-CONTINUING> 1,412,888
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,412,888
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.21
</TABLE>
