CONFORMED COPY
(With Exhibits)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended July 31, 1995 Commission File No. 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 identifi-
incorporation or organization) cation 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
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par value $.10 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Number of Shares of each class of Registrant's common stock outstanding as
of September 29, 1995:
Common Stock - 5,162,518 shares (including 392,196 treasury shares)
Class B Stock - 2,071,000 shares
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 (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Aggregate market value of Registrant's Common Stock owned by
non-affiliates - $63,014,771 (based on the closing price on September 29,
1995).
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference:
1. Registrant's Proxy Statement for its 1995 Annual Meeting of
Stockholders (Proxy Statement), which will be filed with the
Securities and Exchange Commission not later than November 28,
1995 (120 days after the end of Registrants fiscal year ended
July 31, 1995), is incorporated into Part III of this Annual
Report on Form 10-K, as indicated herein.
2. The following portions of Registrant's 1995 Annual Report to
Stockholders ("Annual Report"), which is an exhibit to this Annual
Report on Form 10-K, are incorporated into Parts I, II and IV of
this Annual Report on Form 10-K, as indicated herein (page numbers
refer to the Annual Report):
a) Common Stock on page 34.
b) Five-Year Summary of Financial Data on page 13.
c) Management's Discussion and Analysis of Financial
Condition and Results of Operations on pages 14 to 17.
d) Consolidated Statements of Income on page 20.
e) Consolidated Statements of Stockholders' Equity on
page 21.
f) Consolidated Statements of Financial Position on
pages 18 and 19.
g) Consolidated Statements of Cash Flows on page 22.
h) Notes to Consolidated Financial Statements on pages
23 to 33.
i) Independent Auditor's Report on page 34.
j) Selected Quarterly Financial Data on page 33.
<PAGE>
PART I
Item 1. BUSINESS
Oil-Dri Corporation of America was incorporated in 1969 in Delaware as the
successor to an Illinois corporation incorporated in 1946 which was the
successor to a partnership which commenced business in 1941. Except as
otherwise indicated herein or as the context otherwise requires, references
herein to "Registrant" or to "Company" are to Oil-Dri Corporation of
America and its subsidiaries. The Registrant is a leading developer,
manufacturer and marketer of sorbent products and related services for the
consumer, industrial, environmental, agricultural and fluid purification
markets. The Registrant's products are principally produced from clay
minerals and, to a lesser extent, other sorbent materials. Consumer
products, consisting primarily of cat litter, are sold to the grocery
products industry, mass merchandising and pet specialty retail outlets.
Industrial and environmental products, consisting primarily of oil, grease
water and polypropylene sorbents, are sold to distributors of industrial
cleanup and automotive products, environmental service companies, as well
as retail outlets. Agricultural products, which include carriers for crop
protection chemicals and fertilizers, drying agents, soil conditioners,
pellet binders and flowability aids, are sold to manufacturers of
agricultural chemicals and distributors of other agricultural products.
Fluid purification products, consisting primarily of bleaching, filtration
and clarification clays, are sold to processors and refiners of edible and
petroleum-based oils.
The Registrant's sorbent technologies include absorbent and adsorbent
products. Absorbents, like sponges, draw liquids up into their many pores.
Examples of Oil-Dri's absorbent products are CAT'S PRIDE Premium Cat
Litter and other cat litters, OIL-DRI ALL PURPOSE mineral floor absorbent
and AGSORB granular agricultural chemical carriers.
Adsorbent products, like magnets, attract liquids, impurities, metals and
surfactants to themselves and form low level chemical bonds. The
Registrant's adsorbents are used for cleanup and filtration mediums. The
Registrant's adsorbent products include OIL-DRI LITE Sorbents for
industrial and environmental cleanup, PURE-FLO and PURE-FLO Supreme
Bleaching Clays for edible oils, fats and tallows, and ULTRA-CLEAR
Clarification Aids for petroleum based oils and by-products.
The Registrant has pursued a strategy of developing value-added and branded
products for consumer, industrial and environmental, agricultural and fluid
purification uses, where the Registrant's marketing and research and
development capabilities can play important roles. The Registrant's
products are sold through its specialized divisional sales staffs supported
by technical service representatives and through a network of industrial
distributors and food brokers. The Registrant maintains its own research
and development facility and staff. The Registrant's transportation
subsidiary delivers Oil-Dri products and the products of its customers and
other third parties.
Certain financial information about Registrant's foreign and domestic
operations is contained in Note 2 of Notes to Consolidated Financial
Statements on page 25 of the Annual Report and is incorporated herein by
reference.
Consumer Products
The Registrant's cat litter products, in both coarse granular and fine
granular clumping forms, are sold under the Registrant's CAT'S PRIDE and
LASTING PRIDE brand names, FRESH STEP and CONTROL brands manufactured
for The Clorox Company and private label cat litters manufactured for mass
merchandisers, wholesale clubs, drug chains, pet superstores and retail
grocery stores. These products are sold through independent food brokers
and the Registrant's representatives to major grocery outlets such as
Albertsons, Fleming Foods, Safeway, Winn Dixie, and others. LASTING PRIDE
is principally sold to mass merchandisers such as Wal-Mart, K-Mart and
others and to wholesale clubs such as Sam's.
<PAGE>
The Registrant and The Clorox Company have long-term arrangements under
which they developed FRESH STEP and CONTROL premium-priced cat litter
products. FRESH STEP and CONTROL brands, which are owned, trademarked
and marketed by The Clorox Company, both utilize the Registrant's special
low density, highly absorbent clay mineral. FRESH STEP contains
microencapsulated odor controllers which are activated by the cat.
The Registrant has a long-term exclusive right to supply The Clorox
Company's requirements for FRESH STEP and CONTROL up to certain levels.
According to independently published supermarket industry reports, FRESH
STEP was the largest dollar grossing cat litter brand sold through
grocery chains in the United States during the year ended July 16, 1995.
Traditional coarse granular clay litters once represented approximately 98%
of the market. Beginning in 1990, the cat litter market changed and
traditional course litters now compete with new, fine granule clumping
products. These clumping products have the characteristic of binding
together and expanding when moisture is introduced. The Registrant's
clumping cat litter is based on naturally occurring organic ingredients
which are biodegradable. On an industry-wide basis, clumping cat litters
have assumed market shares in excess of 39% of retail dollar sales volume
in the grocery industry and 49% of retail dollar sales volume in the mass
merchandiser industry in the 52 week period ended July 16, 1995, compared
with 38% and 48%, respectively, in a similar period last year.
Industrial and Environmental Products
Products for industrial users include the Registrant's oil, grease, and
water sorbents, which are cost effective floor maintenance products that
provide a nonslip and nonflammable surface for workers. These products are
sold to a wide range of distribution channels and have achieved a high
level of recognition. The Registrant distributes clay-based sorbents sold
in granular form and in the form of a pillow and a sock. The Registrant
also distributes non-clay sorbents including its OIL-DRI Industrial Pad
and OIL-DRI Industrial Rug, which are made of needle-punched
polypropylene.
The Registrant has added polypropylene products to its industrial sorbents
product line and also entered the marine oil spill response market through
its acquisition of Industrial Environmental Products, Inc. ("IEP") in
April, 1990. IEP was a distributor and marketer of these products,
primarily in the southeast United States. The Registrant purchases the
majority of these polypropylene materials from several unaffiliated
suppliers. The Registrant has acquired equipment affording it the
capability to cut these polypropylene products, acquired in the bulk form,
to customer specifications. The polypropylene products will collect up to
approximately 15 times their own weight in liquids and offer the added
benefit of incinerability and recyclability in accordance with
environmentally permissible methods. OIL-DRI Sorbent Booms and OIL-DRI
Sorbent Pads, which are made from meltblown polypropylene, will selectively
remove oil from the surface of any body of water. They can be used for
emergency spill response or for cleaning and maintenance. The Registrant's
needle-punched polypropylene products will adsorb oil and aqueous liquids
from industrial floors and surfaces.
The Registrant sells its industrial and environmental products through a
distributor network that includes industrial, auto parts, safety, sanitary
supply, chemical and paper distributors and environmental service
companies. The Registrant supports the efforts of the industrial
distributors with specialized divisional sales personnel.
The Registrant also produces for the consumer market OIL-DRI Automotive, a
floor absorbent for home and garage use. This product is sold through
automobile parts distributors and mass merchandisers.
<PAGE>
Agrisorbent Product Group
The Registrant produces and markets a wide range of granular and powdered
mineral absorbent products that are used with crop protection chemicals,
animal feed and fertilizers. Products include AGSORB agricultural
chemical carriers and drying agents; FLO-FRE, a highly absorbent
microgranule flowability aid; PEL-UNITE and CONDITIONADE, pelleting aids,
used in the manufacture of animal feeds, and TERRA GREEN Soil Conditioner.
The AGSORB Carriers are used as mediums of distribution for crop
protection chemicals and fertilizers. AGSORB customized carriers are
designed to reduce dust and to increase accuracy of application. The
Registrant's AGSORB Drying Agent is used to prevent clogging in
specialized farm machinery and enables farmers to evenly apply granular
fertilizers and liquid pesticides to their fields in one application. The
Registrant has also developed AGSORB as a blending agent for fertilizers
and chemicals used in the lawn and garden market.
Agricultural products are marketed in the United States by technical
salesmen employed by the Company who sell to crop protection chemical
manufacturers, feed producers and agricultural product distributors. The
Registrant's principal customers for these products include the
agricultural groups of Monsanto, DowElanco and Zeneca. The Registrant's
service programs, technical expertise and high product quality have
increased sales of these products.
Pure-Flo Product Group
Fluid purification products include PURE-FLO Bleaching Clays, ULTRA-CLEAR
clarification aids, and PURE-FLO Supreme. These products are supported by
a team of technical sales and support representatives employed by the
Company and the services of the Registrant's research and development
group. The products are marketed in the United States and international
markets.
PURE-FLO Bleaching Clays, used in the bleaching of edible oils, remove
impurities and color bodies from these oils. The primary customers for
these products are refiners of food oils. ULTRA-CLEAR Clarification Aid
is used as a filtration and purification medium for jet fuel and other
petroleum based oils. This product adsorbs unwanted moisture and other
impurities, and is primarily sold to oil refiners.
Transportation Services
Oil-Dri Transportation Company leases or contracts for approximately 130
tractors, 295 trailers, 100 covered rail hopper cars and other special use
equipment for the delivery of the Registrant's products in package and bulk
form. Through this subsidiary, the Registrant is better able to control
costs, maintain delivery schedules and assure equipment availability.
Oil-Dri Transportation Company performs transportation services for the
Registrant on outbound movements from the Registrant's production plants.
To offset costs further, Oil-Dri Transportation Company usually transports
third parties' products on return trips.
Patents
Registrant has obtained or applied for patents for certain of its processes
and products. These patents expire at various times, beginning in 1996.
Patented processes and products are not material to Registrant's overall
business.
Foreign
SAULAR, manufactured and marketed by Favorite Products Company, Ltd., the
Registrant's wholly-owned Canadian subsidiary, is a leading brand of cat
litter sold in Canada. Favorite Products Company, Ltd. also packages and
markets the SAULAR KAT-KIT which contains cat litter in a disposable tray.
Certain of the products sold in Canada are blends of clay and synthetic
sorbent materials.
<PAGE>
The Registrant's wholly-owned subsidiary in England, Oil-Dri, U.K., LTD.,
packages clay granules produced by the Registrant's domestic manufacturing
facilities and, for certain applications, blends a synthetic sorbent
material which it manufactures locally. Oil-Dri, U.K., LTD. markets these
products, primarily in the United Kingdom, as an oil and grease absorbent
and as a cat litter.
The Registrant's wholly-owned subsidiary in Switzerland, Oil-Dri S.A.,
performs various management, sales and administrative functions for the
Registrant and its foreign subsidiaries.
The Company's foreign operations are subject to the normal risks of doing
business overseas, such as currency devaluations and fluctuations,
restrictions on the transfer of funds and import/export duties. The
Registrant to date has not been materially affected by these risks.
Backlog; Seasonality
At July 31, 1995 and 1994, Registrant's backlog of orders was approximately
$2,765,000 and $2,621,000, respectively. The Registrant does not consider
its clay sorbent business, taken as a whole, to be seasonal to any material
extent. However, certain business activities of certain customers of the
Registrant's (such as agricultural) are subject to such factors as crop
acreage planted and product formulation cycles.
Customers
Sales to Wal-Mart Stores, Inc. accounted for approximately 27% of the
Registrant's net sales for the fiscal year ended July 31, 1995. Sales to
The Clorox Company accounted for approximately 9% of the Registrant's net
sales for the fiscal year ended July 31, 1995. Clorox and the Registrant
are parties to a long term supply contract. The loss of any other of
Registrant's customers would not have a materially adverse effect on the
Registrant.
Competition
Registrant has approximately seven principal competitors in the United
States, some of which have substantially greater financial resources than
the Company, which compete with the Registrant in certain markets and with
respect to certain products. Price, service and technical support, product
quality and delivery are the principal methods of competition in
Registrant's markets and competition has historically been very vigorous.
The Registrant believes that it can compete favorably in all its present
markets.
Reserves
Registrant mines sorbent materials, consisting of either Montmorillonite,
Attapulgite or diatomaceous earth on leased or owned land near its mills in
Mississippi, Georgia and Oregon, and on leased and owned land in Florida
(see "Item 2- Properties" below). The Registrant estimates that its proven
recoverable reserves of these sorbent materials aggregate approximately
169,565,000 tons. Based on its rate of consumption during the 1995 fiscal
year, Registrant considers its proven recoverable reserves adequate to
supply Registrant's needs for approximately 50 years. It is the
Registrant's policy to attempt to add to reserves each year an amount at
least equal to the amount of reserves consumed in that year. Registrant
has a program of exploration for additional reserves and, although reserves
have increased, Registrant cannot assure that such reserves will continue
to increase. The Registrant's use of these reserves will be subject to
compliance with existing and future federal and state statute regulations
regarding mining and environmental compliance and certain product
specifications. Among other things, requirements for environmental
compliance may restrict exploration or use of lands that might otherwise be
utilized as a source of reserves. During the fiscal year ended July 31,
1995, the Registrant utilized these reserves to produce substantially all
of the sorbent minerals that it sold.
<PAGE>
In April 1991, the Registrant acquired mineral reserves on approximately
709 acres in Washoe County, Nevada. The Registrant estimates that there
are 26 million tons of proven reserves of sorbent materials on this
acreage. Mining these reserves requires the approval of federal, state and
local agencies, which approvals the Registrant is in the process of
seeking. In the future, the Registrant hopes to develop facilities so as
to use these reserves as a source of supply for its West Coast customers.
However, there can be no assurance to that this will be accomplished.
Mining Operations
The Registrant has conducted mining operations in Ripley, Mississippi since
1963; in Ochlocknee, Georgia since 1971; in Christmas Valley, Oregon since
1979; and in Blue Mountain, Mississippi since 1989.
The Registrant's raw materials are open pit mined on a year round basis
generally using large earth moving scrapers and bulldozers to remove
overburden, and then loaded into dump trucks with backhoe or dragline
equipment for movement to the processing facilities. The mining and
hauling of the Registrant's clay is performed by the Registrant and by
independent contractors.
The Registrant's current operating mines range in distance from immediately
adjacent to several miles from its processing plants. Access to processing
facilities from the mining areas is generally by private road; and in some
instances public highways are utilized.
Each of the Registrant's processing facilities maintains stockpiles of
unprocessed clay of approximately one to three weeks production
requirements.
Proven reserves are those reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes; grade
and/or quality are computed from results of detailed sampling, and (b) the
sites for inspection, sampling and measurement are spaced so closely and
the geologic character is so well defined that size, shape, depth and
mineral content of reserves are well established. Probable reserves are
computed from information similar to that used for proven reserves, but the
sites for inspection, sampling, and measurement are farther apart or are
otherwise less adequately spaced. The degree of assurance, although lower
than that for proven reserves, is high enough to assume continuity between
points of observation.
The Registrant employs a staff of geologists and mineral specialists who
estimate and evaluate existing and potential reserves in terms of quality,
quantity and availability.
The following schedule summarizes, for each of the Registrant's
manufacturing facilities the net book value of land and other plant and
equipment.
<TABLE>
<CAPTION>
PLANT AND
LAND EQUIPMENT
<S> <C> <C> <C>
Ochlocknee, Georgia $1,575,730 $20,279,193
Ripley, Mississippi $1,098,951 $15,692,584
Blue Mountain, Mississippi $ 818,488 $ 8,177,141
Christmas Valley, Oregon $ 68,044 $ 658,686
</TABLE>
Employees
As of July 31, 1995, the Registrant employed 695 persons, 52 of whom were
employed by the Registrant's foreign subsidiaries. The Registrant's
corporate offices, research and development center and manufacturing
facilities are adequately staffed and no material labor shortages are
anticipated. Approximately 42 of the Registrant's employees in the U.S.
and approximately 15 of the Registrant's employees in Canada are
represented by labor unions, which have entered into separate collective
bargaining agreements with the Company. Employee relations are considered
satisfactory.
<PAGE>
Environmental Compliance
The Registrant's mining and manufacturing operations and facilities in
Georgia, Mississippi and Oregon are required to comply with state strip
mining statutes and various federal, state and local statutes, regulations
and ordinances which govern the discharge of materials, water and waste
into the environment and restrict mining on "wetlands" or otherwise
regulate the Registrant's operations. In recent years, environmental
regulation has grown increasingly stringent, a trend which the Registrant
expects will continue. The Registrant endeavors to stay in substantial
compliance with applicable environmental controls and regulations and to
work with regulators to correct any claimed deficiency. As a result,
expenditures relating to environmental compliance have increased over the
years. In the l995 fiscal year, the Registrant expended approximately
$450,000 on equipment and other aspects of environmental control and
compliance and presently expects that it will spend approximately $620,000
in the l996 fiscal year and that these costs will continue in the future.
The Registrant continues, and will continue, to incur costs in connection
with reclaiming mined out areas; these costs are treated as part of the
Registrant's mining expense.
In addition to the environmental requirements relating to mining and
manufacturing operations and facilities, there is increasing federal and
state legislation and regulation with respect to the labeling, use, and
disposal after use, of various of the Registrant's products. The
Registrant endeavors to stay in substantial compliance with that
legislation and regulation and to assist its customers in that compliance.
The Registrant cannot assure that, despite its best efforts, it will always
be in compliance with environmental legislation and regulations or with
requirements regarding the labeling, use, and disposal after use, of its
products; nor can it assure that from time to time enforcement of such
requirements will not have an adverse impact on its business.
Energy
The Registrant uses natural gas and fuel oil as energy sources for the
processing of its clay products. In prior years, the Registrant has
switched from natural gas to fuel oil during the winter months due to the
seasonal unavailability and higher cost of natural gas relative to fuel
oil. The Registrant also utilizes a significant amount of diesel fuel in
its transportation operation.
Research and Development
At the Registrant's research facility, the research and development staff
develops new products and applications and improves existing products. The
staff and various consultants consist of geologists, mineralogists and
chemists. In the past several years, the Registrant's research efforts
have resulted in a number of new sorbent products and processes including
PURE-FLO Supreme, PURE-FLO FP80, CAT'S PRIDE Scoopable, and LASTING
PRIDE. The technical center produces prototype samples and test run
quantities of new products for customer trial and evaluation.
Registrant spent approximately $1,826,000 $1,875,000 and $1,509,000 during
its fiscal years ended July 31, 1995, 1994 and 1993, respectively, for
research and development. None of such research and development was
customer sponsored, and all research and development costs are expensed in
the year in which they are incurred.
<PAGE>
Other
The Registrant holds approximately a 14% equity interest in Kamterter,
Inc., a research and development company located in Lincoln, Nebraska.
Kamterter applies biotechnology in the agricultural field and utilizes the
Registrant's clay products in a development-stage process to prime seeds.
At July 31, 1995, the Registrant's investment, at cost, in Kamterter was
approximately $717,000. Although Kamterter has a substantial negative net
worth, during the year ended February 28, 1995, and in recent interim
periods, Kamterter has begun to generate operating profits. While the
Registrant believes that Kamterter's prospects have improved, Kamterter's
future financial condition and results of operations cannot be predicted.
Item 2. PROPERTIES
Registrant's properties are generally described below:
<TABLE>
<CAPTION>
LAND HOLDINGS & MINERAL RESERVES
LAND LAND PROVEN PROBABLE
OWNED LEASED TOTAL RESERVES RESERVES TOTAL
(1,000's (1,000's (1,000's
(acres) (acres) (acres) of tons) of tons) of tons)
<S> <C> <C> <C> <C> <C> <C>
Georgia 1,282 2,004 3,286 45,185 9,836 55,021
Mississippi 2,034 1,423 3,457 116,293 123,409 239,702
Oregon 360 800 1,160 3,575 - 3,575
Florida 537 446 983 4,512 1,092 5,604
Nevada 709 - 709 23,316 2,976 26,292
Illinois 4 - 4 - - -
4,926 4,673 9,599 192,881 137,313 330,194
See "Item 1. Business-Reserves"
</TABLE>
<PAGE>
There are no mortgages on the property owned by Registrant. The
Mississippi, Georgia, Oregon and Florida land is used primarily for mining.
Parcels of such land are also sites of mills operated by Registrant. The
Illinois land is the site of Registrant's research and development
facility. The Registrant owns approximately one acre of land in Laval,
Quebec, Canada, which is the site of the processing and packaging facility
for the Registrant's Canadian subsidiary.
The Registrant's mining operations are conducted on leased or owned land.
The Georgia, Florida and Mississippi mining leases, with expiration dates
ranging from 1999 to 2053, no one of which is material, generally provide
for a lease term which continues as long as the Registrant pays a minimum
monthly rental. This rental payment is applied against a royalty related
to the number of unprocessed, or in some cases processed, tons of mineral
extracted from the leased property.
The Registrant operates mills at Ripley, Mississippi, Ochlocknee, Georgia,
Christmas Valley, Oregon, and Blue Mountain, Mississippi; production and
packaging plants at Laval, Quebec, Canada and Wisbech, United Kingdom.
Registrant's facilities at Ripley, Mississippi, Ochlocknee, Georgia,
Christmas Valley, Oregon, Laval, Quebec, Canada and Wisbech, United Kingdom
are wholly owned by Registrant and Registrant's mill at Blue Mountain,
Mississippi is owned in-part by Registrant, with the balance leased as
herein after described. Registrant is a party to leases that relate to
certain plant acquisition and expansion projects at the Registrant's mill
at Blue Mountain, Mississippi. The Blue Mountain, Mississippi lease was
entered into with the Town of Blue Mountain, Mississippi in 1988 in
connection with the issuance by the Town of $7,500,000 in aggregate
principal amount of industrial revenue bonds, ($5,000,000 of which has been
subsequently retired), full payment of which is guaranteed by the
Registrant. Upon expiration of the leases in 2008, a subsidiary of the
Registrant has the right to purchase the leased property for $100 upon full
payment of the bonds. The land on which the mill at Wisbech, United
Kingdom is located is leased pursuant to a long-term lease arrangement with
the Port Authority of Wisbech which expires in 2032.
All of Registrant's domestic mills, whether owned or leased, consist of
related steel frame, sheet steel covered or brick buildings of various
heights, with concrete floors and storage tanks. The buildings occupy
approximately 208,000 square feet at Ripley, Mississippi, 247,000 square
feet at Ochlocknee, Georgia, 18,000 square feet at Christmas Valley, Oregon
and 140,000 square feet at Blue Mountain, Mississippi. Registrant
maintains railroad siding facilities near the Ripley, Mississippi,
Ochlocknee, Georgia and Blue Mountain, Mississippi mills. Equipment at all
mills is in good condition, well maintained and adequate for current
processing levels.
All of the Registrant's foreign facilities are owned and consist of related
steel frame, sheet steel covered or brick buildings of various heights,
with concrete floors and storage tanks. The buildings occupy 22,500 square
feet at Laval, Quebec, Canada and 32,500 square feet at Wisbech, United
Kingdom.
Registrant's research and development facility is located on land in Vernon
Hills, Illinois and consists of brick buildings of approximately 19,100
square feet, including a pilot plant facility.
Registrant's principal office, consisting of approximately 20,000 square
feet in Chicago, Illinois, is presently occupied under a lease expiring on
June 30, 2008.
Item 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
<PAGE>
Item 401(b) OF REGULATION S-K. EXECUTIVE OFFICERS OF REGISTRANT
The following table gives certain information with respect to the Executive
Officers of the Registrant.
<TABLE>
<CAPTION>
Principal Occupation
Name (5) For Last Five Years Age
<S> <C> <S> <C>
Richard M. Jaffee Chief Executive Officer and 59
Chairman of the Board of
the Registrant; President from
1960 to June, 1995.
<S> <C> <S> <C> <C>
Norman B. Gershon Vice President, International 59
Operations of the Registrant;
Managing Director of Oil-Dri,
S.A., a subsidiary of the Registrant;
Vice President, European Operations of
the Registrant from 1973 to 1991.
<S> <C> <S> <C> <S> <C>
Bruce H. Sone Vice President, Consumer Products - 55
Mass Merchandising Division of
the Registrant; Vice President
and General Manager of
Consumer Products Division
of the Registrant from
1985 until 1992.
<S> <C> <S> <C> <C>
Joseph C. Miller Vice Chairman of The Board; 53
Senior Vice President
for Consumer, Industrial &
Environmental and Transportation
of the Registrant from 1993 to 1995;
Group Vice President of the
Registrant for Sales, Marketing
and Distribution, from 1990
to 1993.
<S> <C> <S> <C> <C>
Richard V. Hardin Group Vice President, Technology, 56
(1)(3) of the Registrant; Group Vice
President, New Technologies of the
Registrant from 1989 to 1991.
Herbert V.
<S> <C> <C>
Pomerantz Senior Vice President, Agricultural 55
(3)(4) and Specialty Products and Research
and Development of the Registrant;
Vice President, Polymers of Unocal
Corporation, a diversified energy
and natural gas resource company
from 1986 to 1993.
Daniel S.
<S> <C> <S> <C>
Jaffee (2) President and Chief Operating Officer 31
since June, 1995, Chief Financial Officer
since 1990, Chief Executive Officer of
Favorite Products Company, Ltd., a
subsidiary of the Company since 1990;
Group Vice President, Consumer Products
until June, 1995; Group Vice President
of Canadian Operations and Consumer
Products - Grocery 1992 until June, 1994;
Group Vice President, Domestic and
Canadian Operations from December, 1990
until August, 1992.
Louis T.
<S> <C> <S> <C> <S> <C>
Bland, Jr.(3) Assistant Secretary, Legal Counsel and 64
Director of Industrial Relations of
the Registrant; Served on the faculty
of the Lake Forest Graduate School
of Management from 1990 until Joining
the Registrant in 1991.
<S> <C> <S> <C> <C>
Donald J. Deegan Director of Finance and Accounting, Chief 33
(3) Accounting Officer of the Registrant;
Assistant Vice President, Treasury
Planning & Analysis of Household
International, a diversified financial
services company, from 1987 through 1990.
</TABLE>
<PAGE>
The term of each executive officer expires at the 1995 Annual
Meeting of the Stockholders and when his successor is elected and
qualified.
(1) Richard V. Hardin is Richard M. Jaffee's son-in-law.
(2) Daniel S. Jaffee is Richard M. Jaffee's son.
(3) Each person listed in this table is a director of the
Registrant except for Richard V. Hardin, Herbert V. Pomerantz,
Louis T. Bland and Donald J. Deegan.
(4) Herbert V. Pomerantz has resigned his employment with the
Registrant effective October 31, 1995.
<PAGE>
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY HOLDER MATTERS
Information concerning stock prices and dividends with regard to the Common
Stock of Registrant, which is traded on the New York Stock Exchange, and
information concerning dividends with regard to the Class B Stock of
Registrant, for which there is no established public trading market, and
Class A Common Stock, which is not outstanding is contained on page 34
of the Annual Report under the caption "Common Stock" and is incorporated
herein by this reference. Registrant's ability to pay dividends is limited
by the Registrant's Credit Agreement with Harris Trust and Savings Bank
dated September 21, 1994. See Note 3 of "Notes to Consolidated Financial
Statements" in the Annual Report, incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA
See the "Five Year Summary of Financial Data" on page 13 of the Annual
Report, incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 14 to 17 of the Annual Report, incorporated
herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See "Consolidated Statements of Income," "Consolidated Statements of
Stockholders' Equity," "Consolidated Statements of Financial Position,"
"Consolidated Statements of Cash Flows," "Notes to Consolidated Financial
Statements" and "Independent Auditor's Report" on pages 18 to 34 of the
Annual Report, "Five Year Summary of Financial Data" on page 13 of the
Annual Report, and "Selected Quarterly Financial Data" on page 33 of the
Annual Report, incorporated herein by reference.
Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item is (except for information in Part I,
hereof, concerning executive officers) contained in the Registrant's Proxy
Statement for its 1995 Annual Meeting of stockholders ("Proxy Statement")
under the caption "Election of Directors" and is incorporated herein by
this reference.
Item 11. EXECUTIVE COMPENSATION
The information required by this Item is contained in the Registrant's
Proxy Statement under the captions "Executive Compensation", "Compensation
Committee Report on Executive Compensation", "Compensation Committee
Interlocks and Insider Participation" and "Performance Graph" and is
incorporated herein by this reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is contained in the Registrant's
Proxy Statement under the caption "General - Principal Stockholders" and
"Election of Directors" and is incorporated herein by this reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is contained in the Registrant's
Proxy Statement under the caption "Compensation Committee Interlocks and
Insider Participation" and is incorporated herein by this reference.
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a)(1) The following financial statements are contained on pages 18 to 34
of the Annual Report and are incorporated herein by this reference:
Consolidated Statements of Financial Position as of July 31,
1995 (audited) and July 31, 1994 (audited).
Consolidated Statements of Income for the fiscal years ended
July 31, 1995 (audited), July 31, 1994 (audited) and July 31,
1993 (audited).
Consolidated Statements of Stockholders' Equity for the fiscal
years ended July 31, 1995 (audited), July 31, 1994 (audited) and
July 31, 1993 (audited).
Consolidated Statements of Cash Flows for the fiscal years ended
July 31, 1995 (audited), July 31, 1994 (audited) and July 31,
1993 (audited).
Notes to Consolidated Financial Statements.
Independent Auditor's Report.
(a)(2) The following financial statement schedules are contained
herein:
Independent Auditor's Report on Schedules.
Schedules to Financial Statements, as follows:
Schedule VIII - Valuation and Qualifying Accounts, years ended
July 31, 1995, 1994 and 1993.
(a)(3) The following documents are exhibits to this Report:
<TABLE>
<CAPTION>
<C> <S>
<F1>
(3)(a) Articles of Incorporation of
Registrant, as amended.
(3)(b) By-Laws of Registrant, as amended of June 16, 1995.
<F2>
(10)(a)2 Lease Agreement, dated as of
September 1, 1982, between Oil-Dri Corporation
of Georgia, The Thomasville Development
Authority and Continental Illinois National
Bank and Trust Company of Chicago.
<F3>
(10)(b)3 Guaranty Agreement, dated as of
September 1, 1982, between Registrant and
Continental Illinois National Bank and Trust
Company of Chicago.
<F4>
(10)(c)(1)4 Agreement ("Clorox Agreement")
dated January 12, 1981 between The Clorox
Company and Registrant, as amended.
(Confidential treatment of certain portions of
this Exhibit has been granted.)
<F5>
(10)(c)(2)5 Amendment to Clorox Agreement
dated March 3, 1989, as accepted by the
Registrant on March 20, 1989, between The
Clorox Company and the Registrant.
(Confidential treatment of certain portions of
this Exhibit has been granted.)
<F6>
(10)(c)(3)6 Amendment to Clorox Agreement
dated February 14, 1991, between The Clorox
Company and Registrant (Confidential treatment
of certain portions of this Exhibit has been
granted).
<F7>
(10)(d)7 Description of 1987 Executive
Deferred Compensation Program.*
<F8>
(10)(e)8 Salary Continuation Agreement dated
August 1, l989 between Richard M. Jaffee and
the Registrant.*
<F9>
(10)(f)9 1988 Stock Option Plan.
<F10>
(10)(g)10 Note Agreement, dated April 5, 1991,
between Registrant and the Teacher's Insurance
and Annuity Association of America regarding
$8,000,000 9.38% Senior Notes due November 15,
2001.
<F11>
(10)(h)11 Note Agreement, dated as of April
15, 1993, between Registrant and the Teacher's
Insurance and Annuity Association of America
regarding $6,500,000 7.17% Senior Notes due
August 15, 2004.
<F12>
(10)(i)12 Credit Agreement, dated as of
September 21, 1994, between Registrant and
Harris Trust and Savings Bank regarding
$5,000,000 7.78% Term Loan Note and $5,000,000
Revolving Credit Note.
<FN>
<F1> Incorporated by reference to Exhibit (3) to Registrant's Quarterly Report
on Form 10-Q for the quarter ended January 31, 1995.
<F2> Incorporated by reference to Exhibit (4)(a) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1982.
<F3> Incorporated by reference to Exhibit (4)(b) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1982.
<F4> Incorporated by reference to Exhibit 10(f) to Registrant's Registration
Statement on Form S-2 (Registration No. 2-97248) made effective on
May 29, 1985.
<F5> Incorporated by reference to Exhibit 10(e)(2) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1989.
<F6> Incorporated by reference to Exhibit 10(e)(3) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1991.
<F7> Incorporated by reference to Exhibit 10(f) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1988.
<F8> Incorporated by reference to Exhibit 10(g) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1989.
<F9> Incorporated by reference to Exhibit 4(a) to Registrant's Registration
Statement on Form S-8, filed June 30, 1989, Registration No. 33-29650.
<F10>Incorporated by reference to Exhibit 10(h) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1991.
<F11>Incorporated by reference to Exhibit 10(i) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1993.
<F12>Incorporated by reference to Exhibit 10(i) to Registrant's Annual Report
on Form 10-K for the fiscal year ended July 31, 1994.
</FN>
</TABLE>
<PAGE>
(10)(j) The Oil-Dri Corporation of America
Deferred Compensation Plan adopted November
15, 1995 and related resolution.
(11) Statement re: computation of per share
earnings.
(13) 1995 Annual Report to Stockholders of
Registrant.
(22) Subsidiaries of Registrant.
(24) Consent of Blackman Kallick Bartelstein.
(27) Financial Data Schedule.
*Management contract or compensatory plan or arrangement.
The Registrant agrees to furnish the following agreements
upon the request of the Commission:
Exhibit 4(b) Letter of Credit Agreement,
dated as of October 1, 1988 between Harris
Trust and Savings Bank and Blue Mountain
Production Company in the amount of $2,634,590
in connection with the issuance by Town of
Blue Mountain, Mississippi of Variable/Fixed
Rate Industrial Development Revenue Bonds,
Series 1988 B (Blue Mountain Production
Company Project) in the aggregate principal
amount of $2,500,000 and related Indenture of
Trust, Lease Agreement, Remarketing Agreement
and Guaranties.
(b) No reports on Form 8-K were filed by Registrant with
the Commission during the last fiscal quarter of the fiscal
year ended July 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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/ Richard M. Jaffee
Richard M. Jaffee,
Chief Executive Officer
Dated: October 20, 1995
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated:
/s/ Richard M. Jaffee October 20, 1995
Richard M. Jaffee
Chief Executive Officer
Director
/s/ Daniel S. Jaffee October 20, 1995
Daniel S. Jaffee
President and Chief Operating Officer
Director
/s/ Donald J. Deegan October 20, 1995
Donald J. Deegan
Principal Accounting
Officer
/s/ Robert D. Jaffee October 20, 1995
Robert D. Jaffee
Director
October 20, 1995
Norman B. Gershon
Director
October 20, 1995
Bruce H. Sone
Director
<PAGE>
/s/ J. Steven Cole October 20, 1995
J. Steven Cole
Director
/s/ Joseph C. Miller October 20, 1995
Joseph C. Miller
Director
Edgar D. Jannotta October 20, 1995
Director
/s/ Paul J. Miller October 20, 1995
Paul J. Miller
Director
/s/ Haydn H. Murray October 20, 1995
Haydn H. Murray
Director
/s/ Allan H. Selig October 20, 1995
Allan H. Selig
Director
<PAGE>
INDEPENDENT AUDITOR'S REPORT ON SCHEDULES
Board of Directors
Oil-Dri Corporation of America
Chicago, Illinois
In connection with our audit of the consolidated financial
statements of OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES as
of July 31, 1995 and 1994 and for each of the three years in the
period ended July 31, 1995, which report thereon dated August 25,
1995, is incorporated by reference in this Annual Report on Form
10-K, we also examined the financial statement schedules listed
in the accompanying index at Item 14(A)(2). In our opinion,
these financial statement schedules present fairly, when read in
conjunction with the related consolidated financial statements,
the financial data required to be set forth therein.
August 25, 1995
<PAGE>
EXHIBIT (3)(b)
Restated, As Amended Through: June 16, 1995
OIL-DRI CORPORATION OF AMERICA
* * * * * * * * * * * *
BY-LAWS
* * * * * * * * * * * *
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other
places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held in Illinois, at such place as may be fixed from
time to time by the board of directors, or at such other place either
within or without the State of Delaware as shall be designated from time to
time by the board of directors and stated in the notice of the meeting.
Meetings of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders commencing with the
year 1973 shall be held on the second Tuesday in December, if not a legal
holiday, and if a legal holiday, then on the next secular day following at
2:00 P.M. or at such other date and time as shall be designated from time
to time by the board of directors and stated in the notice of the meeting,
at which they shall elect by a plurality vote a board of directors, and
transact such other business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each stockholder
entitled to vote at such meeting not less than ten nor more than fifty days
before the date of the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
<PAGE>
Section 5. Special meetings of the stockholders, for any purpose
or purposes, unless otherwise prescribed by statute or by the certificate
of incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board
of directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued
and outstanding and entitled to vote. Such request shall state the purpose
or purposes of the proposed meeting.
Section 6. Written notice of a special meeting stating the place,
date and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be given not less than ten nor more than fifty
days before the date of the meeting, to each stockholder entitled to vote
at such meeting.
Section 7. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for
the transaction of business except as otherwise provided by statute or by
the certificate of incorporation. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present
or represented any business may be transacted which might have been
transacted at the meeting as originally notified. If the adjournment is
for more than thirty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
Section 8. When a quorum is present at any meeting, the vote of
the holders of a majority of the voting power of the stock present in
person or represented by proxy shall decide any question brought before
such meeting, unless the question is one upon which by express provision of
the statutes or of the certificate of incorporation, a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
Section 9. Unless otherwise specifically provided by statute,
each stockholder shall at every meeting of the stockholders be entitled to
the number of votes provided by the certificate of incorporation for each
share of the capital stock having voting power held by such stockholder.
Section 10. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act
for him by proxy, but no proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period.
Section 11. Whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken for or in connection with any
corporate action, by any provision of the statutes, the meeting and vote of
stockholders may be dispensed with if all of the stockholders who would
have been entitled to vote upon the action if such meeting were held shall
consent in writing to such corporate action being taken; or if the
certificate of incorporation authorizes the action to be taken with the
written consent of the holders of less than all of the stock who would have
been entitled to vote upon the action if a meeting were held, then on the
written consent of the stockholders having not less than such percentage of
the number of votes as may be authorized in the certificate of
incorporation; provided that in no case shall the written consent be by the
holders of stock having less than the minimum percentage of the vote
required by statute for the proposed corporate action, and provided that
prompt notice must be given to all stockholders of the taking of corporate
action without a meeting and by less than unanimous written consent.
<PAGE>
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall serve on the board
shall be not less than five nor more than thirteen. The directors shall be
elected at the annual meeting of the stockholders, except as provided in
Section 2 of this Article, and each director elected shall hold office
until his successor is elected and qualified, or until his earlier
resignation or removal. Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and any director so chosen shall hold office
until the next annual election and until his successor is duly elected and
shall qualify, or until his earlier resignation or removal. If there are
no directors in office, then an election of directors may be held in the
manner provided by statute. If, at the time of filling any vacancy or any
newly created directorship, the directors then in office shall constitute
less than a majority of the whole board (as constituted immediately prior
to any such increase), the Court of Chancery may, upon application of any
stockholder or stockholders holding at least ten percent of the total
number of the shares at the time outstanding having the right to vote for
such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors
chosen by the directors then in office.
Section 3. The business of the corporation shall be managed by
its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or
by the certificate of incorporation or by these by-laws directed or
required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. The Annual Meeting of each newly elected board of
directors shall be held immediately after the close of the Annual
Shareholders Meeting at the places fixed for the Annual Shareholders
Meeting provided a quorum shall be present. In the event such meeting is
not held immediately after such Annual Shareholders Meeting, the meeting
may be held at such time and place as shall be specified in a notice given
as hereinafter provided for special meetings of the board of directors, or
as shall be specified in a written Waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 7. Special meetings of the board may be called by the
president on two days' notice to each director, either personally or by
mail or by telegram; special meetings shall be called by the president or
secretary in like manner and on like notice on the written request of two
directors.
Section 8. At all meetings of the board a majority of the
directors shall constitute a quorum for the transaction of business and the
act of a majority of the directors present at any meeting at which there is
a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum shall not be present at any meeting of the
board of directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than the announcement at the
meeting, until a quorum shall be present.
<PAGE>
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be
taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if all members of the board or committee,
or as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the board or
committee.
COMMITTEES OF DIRECTORS
Section 10. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation.
The board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting
of the committee. In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the board of directors to act at
the meeting in the place of any such absent or disqualified member. Any
such committee, to the extent provided in the resolution, shall have and
may exercise all of the powers and authority of the board of directors in
the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority in
reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the corporation's
property and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the by-laws of
the corporation; and, unless the resolution expressly so provides, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock.
Section 11. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when required. At
all committee meetings a majority of the committee members shall constitute
a quorum for the transaction of business and the act of a majority of the
committee members present at any committee meeting at which there is a
quorum shall be the act of the committee, except as may be otherwise
specifically provided by statute or by the certificate of incorporation.
If a quorum shall not be present at any committee meeting the committee
members present thereat may adjourn the committee meeting from time to
time, without notice other than announcement at the committee meeting,
until a quorum shall be present.
COMPENSATION OF DIRECTORS
Section 12. The directors may be paid their expenses, if any, of
attendance at each meeting of the board of directors and may be paid a
fixed sum for attendance at each meeting of the board of directors or a
stated salary as director. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
<PAGE>
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of
the certificate of incorporation or of these by-laws, notice is required to
be given to any director or stockholder, such notice shall be in writing
and shall be given in person or by mail to such director or stockholder.
If mailed, such notice shall be addressed to such director or stockholder
at his address as it appears on the records of the corporation, with
postage thereon prepaid, and shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Notice to directors
may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of
these by-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
board of directors and shall be a chairman of the board, a vice-chairman of
the board, a president, such senior vice-presidents, group vice-presidents
and vice-presidents as the board may choose, a secretary and a treasurer.
The board of directors may also choose one or more assistant secretaries
and assistant treasurers. Any number of officers may be held by the same
person, unless the certificate of incorporation or these by-laws otherwise
provide.
Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a chairman of the board, a vice-
chairman of the board, president, such senior vice-presidents, group vice-
presidents, and vice-presidents as it may decide appropriate, a secretary
and a treasurer.
Section 3. The board of directors may appoint such other officers
and agents as it shall deem desirable who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. The salaries of all officers of the corporation shall
be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the board of directors. Any vacancy
occurring in any office of the corporation shall be filled by the board of
directors.
<PAGE>
THE CHAIRMAN
Section 6. The chairman of the board shall be the chief executive
officer of the corporation, shall preside at all meetings of the
stockholders and the board of directors, shall have general overall
management of the business of the corporation, shall from time to time
report to the board all matters which, in the chairman's reasonable
judgment, should be brought to the board's attention, and shall see that
all orders and resolutions of the board of directors are carried into
effect. The chairman shall have the same power as the president to sign
all documents of the corporation which the president may be authorized to
sign by these bylaws or by the board of directors. In the absence of the
president, or in the event of his inability or refusal to act, the chairman
shall exercise all powers and discharge all duties of the president, unless
the board of directors shall designate another officer to exercise such
powers and discharge such duties. The chairman shall also perform such
other duties, and exercise such other powers, as may be prescribed by these
bylaws or by the board of directors: he shall vote all shares of stock of
any other corporation standing in the name of this corporation except where
the voting thereof shall be expressly delegated by the board of directors
to some other officer or agent of the corporation, and in general shall
perform all duties incident to the office of chairman of the board and such
other duties as may be prescribed by the board of directors from time to
time.
THE VICE-CHAIRMAN
Section 7. The vice-chairman of the board shall perform such
duties, and have such powers, as may be prescribed from time to time by the
board of directors or the chairman of the board.
THE PRESIDENT
Section 8. Within the policies and objectives prescribed by the
board of directors or the chairman of the board, and under the general
supervision of the chairman of the board, the president shall be the chief
operating officer of the corporation and shall have active management of,
and shall administer and direct, all aspects of the operation of the
corporation's business. The president shall have the power to execute
bonds, mortgages and other contracts requiring a seal, under the seal of
the corporation, and other agreements, contracts and instruments, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated
by the board of directors to some other officer or agent of the
corporation. The president shall also perform all duties incident to the
office of the president and such other duties as may be prescribed by these
bylaws, by the board of directors, or by the chairman of the board, from
time to time. In the absence of the chairman of the board, or in the event
of his inability or refusal to act, the president shall exercise all powers
and discharge all duties of the chairman, unless the board of directors
shall designate another officer to exercise such powers and discharge such
duties.
THE SENIOR VICE-PRESIDENTS,
GROUP VICE-PRESIDENTS AND VICE-PRESIDENTS
Section 9. The senior vice-presidents, group vice-presidents,
and the vice-presidents shall perform such duties and have such other
powers as the board of directors or the chairman of the board may from time
to time prescribe. In the absence of the president, or in the event of his
inability or refusal to act, and, in addition, the absence of the chairman
of the board, or his inability or refusal to act, the vice-chairman or, in
his absence or his inability or refusal to act, the senior vice-president
(or, in the event there be more than one senior vice-president, the senior
vice-presidents in the order designated by the board, or in the absence of
any designation, then in the order of their election), shall perform the
duties of the president, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the president.
<PAGE>
THE SECRETARY AND ASSISTANT SECRETARY
Section 10. The secretary shall: (a) keep the minutes of the
stockholders' and of the board of directors' meetings in one or more books
provided for that purpose; and at the request of the board of directors
shall also perform like duties for the standing committees thereof when
required; (b) see that all notices are duly given in accordance with the
provisions of these by-laws or as required by law; (c) be custodian of the
corporate records; (d) keep a register of the post office address of each
stockholder which shall be furnished to the secretary by such stockholder;
(e) have general charge of the stock transfer books of the corporation;
(f) sign (unless the treasurer or other proper officer thereunto duly
authorized by the board of directors shall sign), with the chairman of the
board or the president, certificates for shares of the capital stock of the
corporation the issue of which shall have been authorized by resolution of
the board of directors, provided that the signatures of the officers of the
corporation thereon may be facsimile as provided in these by-laws; and
(g) in general perform all duties incident to the office of secretary and
such other duties as from time to time may be assigned to him or her by the
chairman of the board, the president or by the board of directors.
Section 11. The assistant secretary, or if there be more than
one, the assistant secretaries in the order determined by the board of
directors (or if there be no such determination, then in the order of their
election), shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of
the secretary and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. If required by the board of directors, the treasurer
shall give bond for the faithful discharge of his or her duties in such sum
and with such surety or sureties as the board of directors shall determine.
The treasurer (or if there is none, the chief financial officer) shall:
(a) have charge and custody of and be responsible for all funds and
securities of the corporation; receive and give receipts for moneys due
and payable to the corporation from any source whatsoever, and deposit all
such moneys in the name of the corporation in such banks, trust companies
or other depositaries as shall be selected in accordance with the
provisions of these by-laws; (b) sign (unless the secretary or other proper
officer thereunto duly authorized by the board of directors shall sign),
with the chairman of the board or the president, certificates for shares of
the capital stock of the corporation, the issue of which shall have been
authorized by resolution of the board of directors, provided that the
signatures of the officers of the corporation thereon may be facsimile as
provided in these by-laws; and (c) in general perform all the duties
incident to the office of treasurer and such other duties as from time to
time may be assigned to him or her by the chairman of the board, the
president or the board of directors.
Section 13. The assistant treasurer, or if there shall be more
than one, the assistant treasurers in the order determined by the board of
directors (or if there be no such determination, then in the order of their
election), shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of
the treasurer and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
<PAGE>
ARTICLE VI
INTERESTED DIRECTORS AND OFFICERS
Section 1. No contract or transaction between the corporation and
one or more of its directors or officers, or between the corporation and
any other corporation, partnership, association, or other organization in
which one or more of its directors or officers are directors or officers,
or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at or
participates in the meeting of the board of directors or a committee
thereof which authorizes the contract or transaction, or solely because his
or their votes are counted for such purpose, if:
(a) The material facts as to his relationship or
interest and as to the contract or transaction are disclosed or
are known to the board of directors or the committee, and the
board or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors
be less than a quorum; or
(b) The material facts as to his relationship or
interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by
vote of the stockholders; or
(c) The contract or transaction is fair as to the
corporation as of the time it is authorized, approved or ratified
by the board of directors, a committee thereof, or the
stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a
committee which authorizes the contract or transaction.
ARTICLE VII
INDEMNIFICATION
Section 1. Right to Indemnification. Each person who was or is
made a party or is threatened to be made a party to or is involved in or
called as a witness in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, and any appeal therefrom
(hereinafter, collectively a "proceeding"), by reason of the fact that he
or she, or a person of whom he or she is the legal representative, is, was
or had agreed to become a director, officer or Delegate (as defined herein)
of the corporation shall be indemnified and held harmless by the
corporation to the fullest extent permitted under the Delaware General
Corporation Law (the "DGCL"), as the same now exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the corporation to provide broader indemnification
rights than the DGCL permitted the corporation to provide prior to such
amendment) against all expenses (including, but not limited to, attorneys'
fees and expenses of litigation) and all liabilities and losses (including,
but not limited to, judgments, fines, ERISA or other excise taxes or
penalties and amounts paid or to be paid in settlement) incurred or
suffered by such person in connection therewith; provided that, except as
provided in Section 3 hereof, the corporation shall indemnify any such
person seeking indemnity in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the corporation. For purposes of
this Article, a "Delegate" is any person serving at the request of the
corporation as a director, officer, trustee, fiduciary, partner, employee
or agent of an entity or enterprise other than the corporation (including,
but not limited to, service with respect to employee benefit plans).
<PAGE>
Section 2. Expenses. Expenses, including attorneys' fees,
incurred by a person referred to in Section 1 of this Article in defending
or otherwise being involved in a proceeding shall be paid by the
corporation in advance of the final disposition of such proceeding,
including any appeal therefrom, upon receipt of an undertaking by or on
behalf of such person to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the
corporation; provided that, in connection with a proceeding (or part
thereof) initiated by such a person, except as provided in Section 3
hereof, the corporation shall pay such expenses in advance of the final
disposition only if such proceeding (or part thereof) was authorized by the
Board of Directors of the corporation. Such undertaking shall provide that
if the person to whom the expenses were advanced has commenced proceedings
in a court of competent jurisdiction to secure a determination that he or
she should be indemnified by the corporation, such person shall not be
obligated to repay the corporation during the pendency of such proceeding.
Section 3. Protection of Rights. If a claim under Section 1 is
not promptly paid in full by the corporation after a written claim has been
received by the corporation, or if expenses pursuant to Section 2 have not
been promptly advanced after a written request for such advancement
accompanied by the Undertaking has been received by the corporation, the
claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim or the advancement of expenses. If
successful, in whole or in part, in such suit, such claimant shall also be
entitled to be paid the reasonable expense thereof. It shall be a defense
to any such action (other than action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required Undertaking has been tendered to the
corporation) that the claimant has not met the standards of conduct which
make it permissible under the DGCL for the corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense
shall be on the corporation. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination that indemnification of the
claimant is proper in the circumstances because he or she has met the
applicable standard of conduct required under the DGCL, nor an actual
determination by the corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not
met such applicable standard of conduct, shall be a defense to the action
or create a presumption that claimant had not met the applicable standard
of conduct.
Section 4. Employee and Agents. The Board of Directors shall
have the authority, by resolution, to provide for such indemnification of
employees or agents of the Company as it shall deem appropriate.
Section 5. Non-Exclusivity of Rights. The rights conferred to
any person by this Article shall not be exclusive of any other right which
such person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, by-law, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 6. Insurance. The corporation may maintain insurance, at
its expense, to protect itself and any director, officer, employee, or
agent, of, or person serving in any other capacity with, the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expenses, liabilities or losses, whether or not the corporation
would have the power to indemnify such person against such expenses,
liabilities or losses under the DGCL.
Section 7. Contractual Nature. The provisions of this Article
shall be applicable to all proceedings commenced after its adoption,
whether such arise out of events, acts or omissions which occurred prior or
subsequent to such adoption, and shall continue as to a person who has
ceased to be a director, officer, or Delegate and shall inure to the
benefit of the heirs, executors and administrators of such person. This
Article shall be deemed to be a contract between the corporation and each
person who, at any time that this Article is in effect, serves or agrees to
serve in any capacity which entitles him to indemnification hereunder and
any repeal or other modification of this Article or any repeal or
modification of the DGCL or any other applicable law shall not limit any
rights of indemnification then existing or arising out of events, acts or
omissions occurring prior to such repeal or modification, including,
without limitation, the right to indemnification for proceedings commenced
after such repeal or modification to enforce this Article with regard to
acts, omissions or events arising prior to such repeal or modification.
Section 8. Severability. If this Article or any portion hereof shall
be invalidated or held to be unenforceable on any ground by any court of
competent jurisdiction, the decision of which shall not have been reversed
on appeal, such invalidity or unenforceability shall not affect the other
provisions hereof, and this Article shall be construed in all respects as
if such invalid or unenforceable provisions had been omitted therefrom.
<PAGE>
ARTICLE VIII
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the
corporation by the president or a vice-president (or by the chairman or the
vice-chairman of the board of directors, if the corporation has such
officers) and by the treasurer or an assistant treasurer or the secretary
or an assistant secretary of the corporation, certifying the number of
shares owned by him in the corporation.
Section 2. Where a certificate is countersigned (1) by a transfer
agent other than the corporation or its employee, or, (2) by a registrar
other than the corporation or its employee, any other signature on the
certificate may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon
a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent
or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to advertise the
same in such manner as it shall require and/or to give the corporation a
bond in such sum as it may direct as indemnity against any claim that may
be made against the corporation with respect to the certificate alleged to
have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the board of directors
may fix, in advance, a record date, which shall not be more than sixty nor
less than ten days before the date of such meeting, nor more than sixty
days prior to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.
<PAGE>
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares
to receive dividends, and to vote as such owner, and to hold liable for
calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
ARTICLE IX
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may
be declared by the board of directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property, or in shares
of the capital stock, subject to the provisions of the certificate of
incorporation.
Section 2. Before payment of any dividend, there may be set aside
out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think
conducive to the interest of the corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time
designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall end on July 31.
SEAL
Section 5. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the words
"Corporate Seal, Delaware." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE X
AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws
may be adopted by the board of directors at any meeting of the board.
EXHIBIT (10)(j)
THE OIL-DRI CORPORATION OF AMERICA DEFERRED COMPENSATION PLAN
ARTICLE 1 - INTRODUCTION
1.1 Purpose of Plan
Oil-Dri Corporation of America, a Delaware Corporation has adopted
the Plan set forth herein to provide a means by which certain
employees and non-employee directors may elect to defer receipt of
designated percentages or amounts of their Compensation and bonuses.
1.2 Status of Plan
The Plan is intended to be "a plan which is unfunded and is
maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees" within the meaning of Sections 201(2),
301(a)(3) and 401(a)(1) of the Employee Retirement Income Security
Act of 1974 (ERISA), and shall be interpreted and administered to
the extent possible in a manner consistent with that intent.
ARTICLE 2 - DEFINITIONS
Wherever used herein, the following terms have the meanings set forth
below, unless a different meaning is clearly required by the context:
2.1 Account means for each Participant, the bookkeeping account
established for his or her benefit under Section 5.1.
2.2 Change of Control has the meaning set forth in the Oil-Dri
Corporation of America 1995 Long-Term Incentive Plan.
2.3 Code means the Internal Revenue Code of 1986, as amended from
time to time. Reference to any section or subsection of the Code
includes reference to any comparable or succeeding provisions of any
legislation which amends, supplements or replaces such section or
subsection.
2.4 Company means Oil-Dri Corporation of America, any successor to
all or a major portion of the Company's assets or business which
assumes the obligations of the Company, and each other entity that is
affiliated with the Company which adopts the Plan with the consent of
Oil-Dri Corporation of America.
2.5 Compensation means base salary, retainer or meeting fees payable
to a Participant by the Company or an affiliate. Base salary is
determined before giving effect to Elective Deferrals and other
salary reduction amounts which are not included in the Participant's
gross income under Code sections 125, 401(k), 402(h) or 403(b).
2.6 Effective Date means the date as of which the Plan first becomes
effective, November 15, 1995.
2.7 Election Form means the participation election form as approved
and prescribed by the Plan Administrator.
2.8 Elective Deferral means the portion of Compensation which is
deferred by a Participant under Section 4.1.
<PAGE>
2.9 Eligible Employee or Director means each employee of the Company
who is at a salary grade of Grade 10 or higher at the time he or she
elects to make Elective Deferrals or a non-employee who is a member
of the Company's Board of Directors.
2.10 ERISA means the Employee Retirement Income Security Act of 1974,
as amended from time to time. Reference to any section or subsection
of ERISA includes reference to any comparable or succeeding
provisions of any legislation which amends, supplements or replaces
such section or subsection.
2.11 Insolvent means either (i) the Company is unable to pay its
debts as they become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
2.12 Participant means any individual who participates in the
Plan in accordance with Article 3.
2.13 Plan means the Oil-Dri Corporation of America Deferred
Compensation Plan and all amendments thereto.
2.14 Plan Administrator means the person, persons or entity
designated by the Company from time to time to administer the Plan.
If no such person or entity is so serving at any time, Oil-Dri
Corporation of America shall be the Plan Administrator.
2.15 Plan Year means the 12-month period beginning January 1 and
ending December 31.
2.16 Total and Permanent Disability means the inability of a
Participant to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months, and the
permanence and degree of which shall be supported by medical evidence
satisfactory to the Plan Administrator.
ARTICLE 3 - PARTICIPATION
3.1 Commencement of Participation
Any individual who elects to defer part of his or her Compensation in
accordance with Section 4.1 shall become a Participant in the Plan as
of the date such deferrals commence in accordance with Section 4.1.
<PAGE>
3.2 Continued Participation
A Participant in the Plan shall continue to be a Participant so long
as any amount remains credited to his or her Account.
ARTICLE 4 - ELECTIVE DEFERRALS
4.1 Elective Deferrals
An individual who is an Eligible Employee or Director on the
Effective Date may, by completing an Election Form and filing it with
the Plan Administrator on or before the Effective Date, elect to
defer a percentage or dollar amount of one or more payments of
Compensation, on such terms as the Plan Administrator may permit,
which are for services to be performed by the Participant in the Plan
Year immediately following the Effective Date. A Participant may, by
completing an Election Form and filing it with the Plan Administrator
on or before March 15 of any Plan Year, elect to defer a percentage
of any bonuses payable under the Oil-Dri Corporation of America
Annual Incentive Plan in such Plan Year. A Participant other than a
non-employee director may elect to defer only up to 50% of base
salary, provided that such deferral shall equal a minimum of $5,000
and up to 100% of any bonuses earned under the Oil-Dri Corporation of
America Annual Incentive Plan for any Plan Year. A Participant who
is a non-employee director may elect to defer all or any part of such
Participant's Compensation. Any individual who becomes an Eligible
Employer or Director after the Effective Date may, by completing an
Election Form and filing it with the Plan Administrator within 30
days after becoming an Eligible Employee or Director, elect to defer
a percentage or dollar amount of one or more payments of
Compensation, on such terms as the Plan Administrator may permit,
which are for services to be performed by the Participant after the
date on which the individual files the Election Form. Any Eligible
Employee or Director who has not otherwise initially elected to defer
Compensation in accordance with this paragraph 4.1 may elect to defer
a percentage or dollar amount of one or more payments of
Compensation, on such terms as the Plan Administrator may permit,
commencing with Compensation paid in the next succeeding Plan Year,
by completing an Election Form and filing it with the Plan
Administrator on or before November 15 of the year preceding such
Plan Year. A Participant's Compensation shall be reduced in
accordance with the Participant's election hereunder and amounts
deferred hereunder shall be credited to the Participant's Account as
of the date of the amounts would have been paid to the Participant
absent the deferral election. Elective Deferrals shall not be in
effect for any Participant during any period in which such
Participant is eligible to receive benefits under the Company's Long
Term Disability policy.
An election to defer a percentage or dollar amount of Compensation
for any Plan Year or any bonus payable under the Oil-Dri Corporation
of America Annual Incentive Plan, in such Plan Year shall apply for
only such Plan Year. For each succeeding Plan Year an Eligible
Employee or Director must make a new deferral election by completing
and filing with the Plan Administrator an Election Form on or before
the 15th of November preceding that Plan Year with respect to
Compensation and before the 15th of March with respect to any bonus
payable under the Oil-Dri Corporation of America Annual Incentive
Plan in such Plan Year.
<PAGE>
ARTICLE 5 - ACCOUNTS
5.1 Accounts
The Plan Administrator shall establish a bookkeeping Account for each
Participant reflecting Elective Deferrals made for the Participant's
benefit together with any adjustments for interest. As of the last
business day of the Plan Year, the Plan Administrator shall provide
the Participant, as soon as practicable after the end of such year,
with a statement of his or her Account reflecting the amounts of
deferrals, interest and distributions of such Account since the prior
statement.
5.2 Interest Credited
Each Participant's account shall be credited quarterly with interest.
The interest shall be determined by multiplying the account balance
at the end of the quarter by a rate equal to one-fourth of an annual
rate equal to the Company's short-term borrowing cost in effect at
the end of the quarter for which the calculation is made. Such
interest shall then be added to the Participant's account.
ARTICLE 6 - VESTING
6.1 General
A Participant shall be immediately vested in, i.e., shall have a
nonforfeitable right to, all Elective Deferrals, and all interest
attributable thereto, credited to his or her Account.
ARTICLE 7 - PAYMENTS
7.1 Election as to Time and Form of Payment
A Participant shall elect irrevocably on the Election Form the date
at which the Elective Deferrals (including any interest attributable
thereto) will commence to be paid to the Participant. Such date must
be at least five years following the date at which such Elective
Deferrals commence or the date of retirement, whichever occurs first.
The Participant shall also elect thereon for payments to be paid in
either:
a. a single lump sum; or
b. annual installments over a period elected by the Participant up
to 15 years, the amount of each installment to equal the balance
of his or her Account immediately prior to the installment
divided by the number of installments remaining to be paid
("Annual Installments").
Each such election will be effective only for deferrals (including
any interest attributable thereto) for the Plan Year for which it is
made. Except as provided in Sections 7.2, 7.3, 7.4, or 7.5, payment
of a Participant's Account shall be made in accordance with the
Participant's elections under this Section 7.1.
<PAGE>
7.2 Change of Control
The Plan will terminate upon a Change of Control. Immediately prior
to the consummation of a transaction resulting in a Change of Control
or, if not possible, as soon as possible following a Change of
Control, each Participant shall be paid his or her entire Account
balance in a single lump sum.
7.3. Termination of Employment Prior to Retirement Age
Upon termination of a Participant's employment for any reason other
than Total and Permanent Disability or death prior to the attainment
of the Retirement Age, which is age 55, the Participant's entire
Account shall be paid to the Participant in a single lump sum as soon
as practicable following the end of the quarter in which such
termination occurs.
7.4 Death or Total and Permanent Disability
If a Participant dies or suffers a Total and Permanent Disability
prior to the complete distribution of his or her Account, the balance
of the Account shall be paid, according to the Participant's
irrevocable election on the Election Form, to the Participant or in
the event of the Participant's death to the Participant's designated
beneficiary or beneficiaries. Payment in a single lump sum shall be
made as soon as practicable following the end of the quarter in which
death or Total and Permanent Disability occurs. Payment in annual
installments shall commence the year immediately following the year
in which death or Total and Permanent Disability occurs.
Any designation of beneficiary and form of payment to such
beneficiary shall be made by the Participant on a designation/change
of beneficiary form filed with the Plan Administrator and may be
changed by the Participant at any time by filing another
designation/change of beneficiary form containing the revised
instructions. If no beneficiary is designated or no designated
beneficiary survives the Participant, payment shall be made to the
Participant's surviving spouse, or, if none, to his or her issue per
stirpes, in a single payment. If no spouse or issue survives the
Participant payment shall be made in a single lump sum to the
Participant's estate.
7.5 Unforeseen Emergency
If a Participant suffers an unforeseen emergency, as defined herein,
the Plan Administrator, in its sole discretion, may pay to the
Participant only that portion, if any, of his or her Account which
the Plan Administrator determines is necessary to satisfy the
emergency need, including at the discretion of the Plan Administrator
any amounts necessary to pay any federal, state and local income
taxes reasonably anticipated to result from the distribution.
A Participant requesting emergency payment shall apply for the
payment in writing in a form approved by the Plan Administrator and
shall provide such additional information as the Plan Administrator
may require. For purposes of this paragraph, "unforeseen emergency"
means an immediate and heavy financial need resulting from any of the
following:
a. expenses which are not covered by insurance and which the
Participant or his or her spouse or dependent has incurred as a
result of sudden and unexpected illness or accident; or
b. expenses which are not covered by insurance and which the
Participant or his or her spouse or dependent has incurred or
must incur as a result of a casualty loss.
7.6 Taxes
All federal, state and local taxes that the Plan Administrator
determines are required to be withheld from any payments made
pursuant to this Article 7 shall be withheld.
<PAGE>
7.7 Claims Procedure
A Participant or beneficiary (a "Claimant") entitled to benefits may
file a claim for such benefits with the Plan Administrator, in such
form as permitted by the Plan Administrator. The claim will be
evaluated and a decision rendered within ninety (90) days, unless
special circumstances require an additional ninety (90) day extension
of time.
A Claimant shall be given written notice of whether the claim is
granted or denied, in whole or in part, including (1) specific
reasons for the denial, (2) references to pertinent Plan provisions
on which the denial is based, (3) a description of any additional
material or information necessary to perfect the claim and
explanation as to why necessary, and (4) the Claimant's right to seek
review of the denial.
If denied, in whole or in part, the Claimant may make a written
request for review of such denial to the Plan Administrator within 60
days after receipt of the denial, and may include pertinent
documents, issues and comments to aid the Plan Administrator. The
request will be evaluated and a decision rendered within sixty (60)
days, unless special circumstances require an additional sixty (60)
day extension of time. The written decision will specify reasons for
the decision and references to Plan provisions upon which the
decision is based.
A Claimant who fails to file a claim, or submit a request for review
of an initial claim shall have no right to review and shall have no
right to bring action in any court. The denial of the claim shall be
final and binding on all persons for all purposes.
7.8 Section 162(m) Limitations
In the event that any amount to be paid pursuant to Section 7.1, 7.3,
7.4 or 7.5 would, in the Company's judgment, result in the non-
deductibility, under Section 162(m) of the code, of any portion of
such Participant's income payable by or attributable to the Company
for the year in which such amount is to be paid, such amount shall
not be paid in such year. Such nondeductible amount shall be payable
in the following calendar year, as an addition to the annual
installment scheduled to be paid in such following calendar year, if
applicable, subject to the provisions of this Section 7.8.
<PAGE>
ARTICLE 8 - PLAN ADMINISTRATOR
8.1 Plan Administration and Interpretation
The Plan Administrator shall oversee the administration of the Plan.
The Plan Administrator shall have complete control and authority to
determine the rights and benefits and all claims, demands and actions
arising out of the provisions of the Plan of any Participant,
beneficiary, deceased Participant, or other person having or claiming
to have any interest under the Plan. The Plan Administrator shall
have complete discretion to interpret the Plan and to decide all
matters under the Plan. Such interpretation and decision shall be
final, conclusive and binding on all Participants and any person
claiming under or through any Participant, in the absence of the
clear and convincing evidence that the Plan Administrator acted
arbitrarily and capriciously. Any individual(s) serving as Plan
Administrator who is a Participant will not vote or act on any matter
relating solely to himself or herself. In such case, the Oil-Dri
Corporation of America will appoint an individual to act as Plan
Administrator to take such actions. When making a determination or
calculation, the Plan Administrator shall be entitled to rely on
information furnished by a Participant, a beneficiary or the Company.
The Plan Administrator shall have the responsibility for complying
with any reporting and disclosure requirements of ERISA.
8.2. Powers, Duties, Procedures, Etc.
The Plan Administrator shall have such powers and duties, may adopt
such rules and tables, may act in accordance with such procedures,
may appoint such officers or agents, may delegate such powers and
duties, may receive such reimbursements, and shall follow such claims
and appeal procedures with respect to the Plan as it may establish.
8.3 Information
To enable the Plan Administrator to perform its functions, the
Company shall supply full and timely information to the Plan
Administrator on all matters relating to the compensation of
Participants, their employment, retirement, death, termination of
employment, and such other pertinent facts as the Plan Administrator
may require.
8.4 Indemnification of Plan Administrator
The Company agrees to indemnify and to defend to the fullest extent
permitted by law any officer(s) or employee(s) who serve as Plan
Administrator (including any such individual, whether a present or
former employee, who formerly served as Plan Administrator) against
all liabilities, damages, costs and expenses (including attorneys'
fees and amounts paid in settlement of any claims approved by Oil-Dri
Corporation of America) occasioned by any act or omission to act in
connection with the Plan, if such act or omission is in good faith.
<PAGE>
ARTICLE 9 - AMENDMENT AND TERMINATION
9.1 Amendments
Oil-Dri Corporation of America shall have the right to amend the Plan
from time to time, subject to Section 9.3, by an instrument in
writing which has been executed on Oil-Dri Corporation of America'=s
behalf by its Chief Executive Officer or his delegate designated in
writing, with the specific approval of the board of directors.
9.2 Termination of Plan
This Plan is strictly a voluntary undertaking on the part of the
Company and shall not be deemed to constitute a contract between the
Company and any Eligible Employee or Director (or any other employee)
or a consideration for, or an inducement or condition of employment
for the performance of the services by an Eligible Employee or
Director (or other employee). Oil-Dri Corporation of America
reserves the right to terminate the Plan at any time, subject to
Section 9.3, by an instrument in writing which has been executed on
Oil-Dri Corporation of America's behalf by its Chief Executive
Officer or his delegate designated in writing, with the specific
approval of the board of directors. In addition, the Plan shall
terminate upon a Change of Control in accordance with Section 7.2.
9.3 Existing Rights
No amendment or termination of the Plan shall adversely affect the
rights of any Participant with respect to amounts that have been
credited to his or her Account prior to the date of such amendment or
termination.
ARTICLE 10 - MISCELLANEOUS
10.1 No Funding
The Plan constitutes a mere promise by the Company to make payments
in accordance with the terms of the Plan and Participants and
beneficiaries shall have the status of general unsecured creditors of
the Company. Nothing in the Plan will be construed to give any
employee or any other person rights to any specific assets of the
Company or of any other person. In all events, it is the intent of
the Company that the Plan be treated as unfunded for tax purposes and
for purposes of Title I of ERISA.
10.2 Non-assignability
None of the benefits, payments, proceeds or claims of any participant
or beneficiary shall be subject to any claim of any creditor of any
Participant or beneficiary, nor shall any Participant or beneficiary
have any right to alienate, anticipate, commute, pledge, encumber or
assign any of the benefits or payments or proceeds which he or she
may expect to receive, contingently or otherwise, under the Plan.
<PAGE>
10.3 Limitation of Participant's Rights
Nothing contained in the Plan shall confer upon any person a right to
be employed or to continue in the employ of the Company, or interfere
in any way with the right of the Company to terminate the employment
of a Participant in the Plan at any time, with or without cause.
10.4 Participants Bound
Any action with respect to the Plan taken by Oil-Dri Corporation of
America, the Plan Administrator or the Company or any action
authorized by or taken at the director of the Plan Administrator or
the Company shall be conclusive upon all Participants and
beneficiaries entitled to benefits under the Plan.
10.5 Receipt and Release
Any payment to any Participant or beneficiary in accordance with the
provisions of the Plan shall, to the extent thereof, be in
satisfaction of claims against the Company and/or, the Plan
Administrator under the Plan, and the Plan Administrator may require
such Participant or beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect. If any
Participant or beneficiary is determined by the Plan Administrator to
be incompetent by reason of physical or mental disability, including
minority, to give a valid receipt and release, the Plan Administrator
may cause payment or payments becoming due to such person to be made
to another person for his or her benefit without responsibility on
the part of the Plan Administrator or the Company to follow the
application of such funds.
10.6 Governing Law
The Plan shall be construed, administered, and governed in all
respects under and by the laws of the state of Illinois. If any
provision shall be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective.
10.7 Headings and Subheadings
Headings and subheadings in this Plan are inserted for convenience
only and are not to be considered in the construction of the
provisions thereof.
<PAGE>
WHEREAS, the Committee recommends the adoption of the new Oil-
Dri Corporation of America Deferred Compensation Plan effective
November 15, 1995;
NOW THEREFORE BE IT RESOLVED, that the Corporation hereby:
(1) Amends the Plan to prohibit deferrals under the Plan
after December 31, 1995, to terminate any Stated Deferrals made
with respect to Compensation earned after December 31, 1995 and
empowers the Administrative Committee under the Plan to take
such actions as necessary to effect such amendments; and
(2) Adopts the Oil-Dri Corporation of America Deferred
Compensation Plan effective November 15, 1995, a copy of which
is attached to these minutes as Exhibit A, and, in connection
with that adoption confirms that the annual retainer paid a
Director shall be for services rendered for the period beginning
January 1 and ending December 31 of any calendar year in which a
Director was a member of the Company's Board. If a Director
fails to serve during the entire period, there shall be no pro-
rata adjustment to the annual retainer.
<TABLE>
<CAPTION>
EXHIBIT 11
OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES
Computation of Weighted Average
Number of Shares Outstanding
Average
Shares-
(Weighted
Number Number of Shares)Number
of Shares Weighted of Days
Year End Period Days Outstanding Shares As Adjusted
<C> <C> <C> <C> <S> <C> <C> <C>
July 31, 1995 08/01/94 to 8 6,951,822 55,614,576
08/08/94
<C> <S> <C> <C> <C>
08/09/94 to 204 6,949,822 1,417,763,688
02/28/95
03/01/95 1 6,946,922 6,946,922
03/02/95 1 6,945,922 6,945,922
03/03/95 to 3 6,943,922 20,831,766
03/05/95
03/06/95 1 6,942,722 6,942,722
03/07/95 1 6,936,522 6,936,522
03/08/95 to 2 6,934,522 13,869,644
03/09/95
03/10/95 to 4 6,932,822 27,731,288
03/13/95
03/14/95 1 6,932,322 6,932,322
03/15/95 1 6,931,322 6,931,322
03/16/95 to 4 6,929,822 27,719,288
03/19/95
03/20/95 1 6,928,822 6,928,822
03/21/95 1 6,928,322 6,928,322
03/22/95 1 6,927,822 6,927,822
03/23/95 1 6,927,322 6,927,322
03/24/95 to 3 6,911,322 20,733,966
03/26/95
03/27/95 to 127 6,901,322 876,467,894
07/31/95
<C> <C> <C>
365 2,530,080,130 6,931,726
Assuming exercise of option reduced by
the number of shares could have been
<S> <C>
purchased with the proceeds from exercise 4,249
<S> <C>
of such options 6,935,975
<C> <C> <C> <C> <S> <C> <C> <C>
July 31, 1994 08/01/93 to 2 6,991,285 13,982,570
08/02/93
08/03/93 to 9 6,991,285 62,921,565
08/11/93
08/12/93 to 4 6,993,827 27,975,308
08/15/93
08/16/93 to 8 6,993,827 55,950,616
08/23/93
08/24/93 to 10 6,995,174 69,951,740
09/02/93
09/03/94 to 12 6,995,638 83,947,656
09/14/93
09/15/93 to 5 6,996,416 34,982,080
09/19/93
09/20/93 to 2 6,997,041 13,994,082
09/21/93
09/22/93 to 8 6,998,121 55,984,968
09/29/93
09/30/93 to 4 6,993,121 27,972,484
10/03/93
10/04/93 to 14 6,988,121 97,833,694
10/17/93
10/18/93 to 1 6,983,121 6,983,121
10/18/93
10/19/93 to 6 6,978,121 41,868,726
10/24/93
10/25/93 to 4 6,978,972 27,915,888
10/28/93
10/29/93 to 3 6,980,823 20,942,469
10/31/93
11/01/93 to 2 6,980,821 13,961,642
11/02/93
11/03/93 to 1 6,980,871 6,980,871
11/03/93
11/04/93 to 5 6,981,827 34,909,135
11/08/93
11/09/93 to 14 6,983,722 97,772,108
11/22/93
11/23/93 to 4 6,983,872 27,935,488
11/26/93
11/27/93 to 2 6,984,316 13,968,632
11/28/93
11/29/93 to 1 6,988,551 6,988,551
11/29/93
11/30/93 to 3 6,993,160 20,979,480
12/02/93
<C> <S> <C> <C> <C>
12/03/93 to 35 6,994,198 244,796,930
01/06/94
01/07/94 to 3 6,995,338 20,986,014
01/09/94
01/10/94 to 14 6,997,473 97,964,622
01/23/94
01/24/94 to 57 6,998,285 398,902,245
03/21/94
03/22/94 to 43 6,999,966 300,998,538
04/30/94
05/04/94 to 27 6,999,966 188,999,082
05/30/94
05/31/94 to 1 6,999,066 6,999,066
05/31/94
06/01/94 to 6 6,997,866 41,987,196
06/06/94
06/07/94 to 1 6,996,666 6,996,666
06/07/94
06/08/94 to 1 6,996,466 6,996,466
06/08/94
06/09/94 to 5 6,983,466 34,917,330
06/13/94
06/14/94 to 1 6,976,866 6,976,866
06/14/94
06/15/94 to 6 6,971,666 41,829,996
06/20/94
06/21/94 to 20 6,971,822 139,436,440
07/10/94
07/11/94 to 3 6,961,822 20,885,466
07/13/94
07/14/94 to 18 6,951,822 125,132,796
07/31/94
<C> <C> <C>
365 2,551,508,593 6,990,435
Assuming exercise of option reduced by
the number of shares could have been
<S> <C>
purchased with the proceeds from exercise 20,289
<S> <C>
of such options 7,010,724
<C> <C> <C> <C> <S> <C> <C> <C>
July 31, 1993 08/01/92 to 9 6,992,793 62,935,137
08/09/92
08/10/92 to 14 6,993,845 97,913,830
08/23/92
08/24/92 to 99 6,993,859 692,392,041
11/30/92
12/01/92 to 3 6,998,547 20,995,641
12/03/93
12/04/92 to 12 6,999,619 83,995,428
12/15/93
12/16/92 to 20 7,001,911 140,038,220
01/04/93
01/05/93 1 7,002,061 7,002,061
01/06/93 to 8 7,002,379 56,019,032
01/13/93
01/14/93 to 22 7,003,291 154,072,402
02/04/93
02/05/93 to 12 7,003,575 84,042,900
02/16/93
02/17/93 1 7,005,696 7,005,696
02/18/93 to 8 7,003,696 56,029,568
02/25/93
02/26/93 to 21 6,995,696 146,909,616
03/18/93
03/19/93 to 14 6,996,996 97,957,944
04/01/93
04/02/93 to 11 6,997,830 76,976,130
04/12/93
04/13/93 to 6 6,987,830 41,926,980
04/18/93
04/19/93 to 31 6,989,219 216,665,789
05/19/93
05/20/93 to 55 6,989,797 384,438,835
07/13/93
07/14/93 to 12 6,990,729 83,888,748
07/25/93
07/26/93 to 6 6,991,285 41,947,710
07/31/93
<C> <C> <C>
365 2,553,153,708 6,994,942
Assuming exercise of option reduced by
the number of shares could have been
<S> <C>
purchased with the proceeds from exercise 36,174
<S> <C>
of such options 7,031,116
<C> <C> <C> <C> <S> <C> <C> <C>
July 31, 1992 08/01/91 to 12 7,012,370 84,148,440
08/12/91
08/13/91 to 8 7,002,370 56,018,960
08/20/91
08/21/91 to 2 6,992,370 13,984,740
08/22/91
08/23/91 to 21 6,992,891 146,850,871
09/12/91
09/13/91 to 91 6,995,091 636,553,281
12/12/91
12/13/91 to 42 6,996,075 293,835,150
01/23/92
01/24/92 to 7 6,989,409 48,925,863
01/30/92
01/31/93 to 5 6,989,379 34,946,895
02/04/92
02/05/92 to 30 6,991,379 209,741,370
03/95/92
<C> <S> <C> <C> <C>
03/06/92 to 148 6,992,793 1,034,933,364
<C> <C> <C>
366 2,559,938,774 6,994,369
Assuming exercise of option reduced by
the number of shares could have been
<S> <C>
purchased with the proceeds from exercise 31,931
<S> <C>
of such options 7,026,300
<C> <C> <C> <C> <S> <C> <C> <C>
July 31, 1991 08/01/90 to 48 6,998,154 335,911,392
09/17/90
09/18/90 to 88 6,998,869 615,900,472
12/14/90
12/15/90 to 25 6,999,795 174,994,875
01/08/91
01/09/91 to 21 7,000,374 147,007,854
01/29/91
01/30/91 to 7 7,000,704 49,004,928
02/05/91
02/06/91 to 5 7,001,037 35,005,185
02/10/91
02/11/91 to 2 7,001,027 14,002,054
02/12/91
02/13/91 to 6 7,002,411 42,014,466
02/18/91
02/19/91 1 7,002,681 7,002,681
02/20/91 to 3 7,003,681 21,011,043
02/22/91
02/23/91 to 34 7,003,831 238,130,254
03/28/91
03/29/91 to 10 7,004,843 70,048,430
04/07/91
04/08/91 to 2 7,006,405 14,012,810
04/09/91
04/10/91 to 19 7,006,698 133,127,262
04/28/91
04/29/91 to 16 7,008,363 112,133,808
05/14/91
05/15/91 to 29 7,009,082 203,263,378
06/12/91
06/13/91 to 4 7,012,248 28,048,992
06/16/91
06/17/91 to 35 7,015,518 245,543,130
07/21/91
07/22/91 1 7,016,884 7,016,884
07/23/91 to 9 7,017,370 63,156,330
07/31/91
<C> <C> <C>
365 2,556,336,228 7,003,661
Assuming exercise of option reduced by
the number of shares could have been
<S> <C>
purchased with the proceeds from exercise 51,129
<S> <C>
of such options 7,054,790
</TABLE>
OIL-DRI CORPORATION OF AMERICA
CREATING
VALUE
THROUGH
INNOVATION
1995 ANNUAL REPORT
<PAGE>
NATIONAL FAMILY BUSINESS OF THE YEAR
Oil-Dri Corporation of America is
very proud to have been named the
National Family Business of the Year.
Oil-Dri was first awarded the
Illinois Family Business of the Year
title by the Illinois Association of
Family Businesses and the Loyola
University Chicago Family Business
Center. The national program was
sponsored by Massachusetts Mutual and
included hundreds of regional
winners. Oil-Dri won in the large
business category for companies with
more than 250 employees.
Winners were chosen based on five key
criteria:
The success of the business
The positive links it has built
between family and business
Multiple generation family business involvement
Contributions to community and industry
Innovative business practices or strategies
Oil-Dri is a publicly traded
company with a very special
combination of business and family
practices. The Jaffee family is
represented by eight family members
and an additional 65 families are
represented by two or more members at
Oil-Dri. All of Oil-Dri's employees
in the United States, Canada,
England, Switzerland and our
representatives around the globe, are
part of the success of the
organization. Everyone works
together to make a difference in the
quality of our products, our services
and our organization.
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
1995 1994 Change
<S> <C> <C> <C> <C>
Net Sales* $152,899,109 $147,146,793 +3.9%
<S> <C> <C> <S><C>
Income from Operations $12,841,947 $14,428,277 -11.0%
<S> <C> <C> <S><C>
Income before Income Taxes $11,147,425 $13,159,384 -15.3%
<S> <C> <C> <S><C>
Net Income $ 8,002,828 $ 9,852,200 -18.8%
<S> <C> <C> <C> <C> <S><C>
Net Income per Share $ 1.15 $ 1.41 -18.4%
<S> <C> <C> <S><C>
Net Income as a Percentage of 5.2% 6.7% -1.5%
Sales
<S> <C> <C> <C> <S><C>
Return on Average Stockholders' 10.6% 14.1% -3.5%
Equity
<S> <C> <C> <C>
Working Capital $33,074,318 $29,337,449 +$ 3,736,869
<S> <C> <C> <C> <C>
Stockholders' Equity $78,338,383 $73,059,504 +$5,278,879
<S> <C> <C> <C> <C> <C>
Book Value per Share $ 11.35 $ 10.51 +8.0%
<S> <C> <C> <S><C>
Average Shares Outstanding 6,935,975 7,010,724 -1.1%
<S> <C> <C> <C> <C>
Dividends Declared $ 2,046,644 $ 1,806,736 +13.3%
<S> <C> <C> <S><C>
Capital Expenditures $ 7,032,064 $13,559,232 -48.1%
<S> <C> <C> <C>
Depreciation and Amortization $ 7,808,496 $ 6,798,038 +14.9%
<S> <C> <C> <S><C>
Long-Term Debt $20,422,265 $21,521,243 -5.1%
</TABLE>
<TABLE>
<CAPTION>
SALES TRENDS* (millions of dollars)
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Consumer Products $82.9 $77.0 $73.3 $65.2 $53.7
<S> <C> <C> <C> <C> <C>
Industrial and Environmental 18.9 19.9 19.0 19.1 18.6
Products
<S> <C> <C> <C> <C> <C>
Agrisorbents Product Group 16.6 18.3 18.4 14.9 10.7
<S> <C> <C> <C> <C> <C>
Pure-Flo Product Group 13.0 13.2 10.1 6.1 5.8
<S> <C> <C> <C> <C> <C>
Foreign Subsidiaries 12.2 11.2 12.4 11.0 10.5
<S> <C> <C> <C> <C> <C>
Transportation Services 9.3 7.5 7.7 8.3 6.7
<C> <C> <C> <C> <C>
$152.9 $147.1 $140.9 $124.6 $106.0
</TABLE>
*Net sales and selling, general and administrative expenses reflect the
reclassification of trade marketing costs. See Note 1 to consolidated
financial statements.
<TABLE>
<CAPTION>
Land Holdings & Mineral Reserves
Land Owned Land Leased Total Proven
(acres) (acres) (acres) Reserves
(1,000's of
tons)
<S> <C> <C> <C> <C>
Georgia 1,282 2,004 3,286 45,185
Mississippi 2,034 1,423 3,457 116,293
Oregon 360 800 1,160 3,575
Florida 537 446 983 4,512
Nevada 709 - 709 23,316
Illinois 4 - 4 -
4,926 4,673 9,599 192,881
</TABLE>
<PAGE>
DIVISIONAL REVIEW
Consumer Products
Oil-Dri manufactures approximately 25% of all the cat litter sold in the
United States, an estimated $720,000,000 retail market. The introduction
of Cat's Pride Kat Kit disposable cat litter tray and the launching of the
Cat's Pride Scoopable "Stretch Jug" should increase Oil-Dri's share of
this market.
Industrial & Environmental Products
A comprehensive line of Oil-Dri Lite sorbents and Oil-Dri floor absorbents
distinguishes Oil-Dri Corporation as a quality supplier of industrial
maintenance products. The division is also working on innovative products
for the home mechanic.
Agrisorbents Product Group
The Agrisorbents Product Group offers agricultural chemical formulators
the highest quality carriers for their crop protection products. Global
expansion of carriers and animal feed and nutrition products will provide
growth opportunities in the future.
Pure-Flo Product Group
A combination of unique minerals and proprietary processes gives the Pure-
Flo Product Group a technological edge in the fluid purification market.
International expansion of existing product lines and development of new
value-added products will build incremental sales.
PRIMARY RESOURCES
Research & Development
The most dynamic source of Oil-Dri's growth over the last fifty-four years
has been from product innovations. Developments that can improve a
refining process, increase a crop yield or keep a cat box fresher longer
have all been generated by the scientific staff of the Nick Jaffee Sorbent
Technologies Laboratory. Teams of scientists and technicians address the
issues of each marketing group, manufacturing, environmental regulation
and quality control.
Manufacturing and Raw Materials Development
Oil-Dri Corporation operates six production facilities in the United
States. These plants are located near reserves of quality clay minerals.
Attapulgite and montmorillonite are mined in the Southeast. Diatomaceous
earth is mined in Oregon. Oil-Dri's facilities in Wisbech, United Kingdom
and Quebec, Canada produce synthetic absorbents. The characteristics of
our mineral reserves and the efficiency of our facilities allow Oil-Dri to
produce high quality products at competitive prices.
Oil-Dri Transportation Company
Committed to providing logistics and transportation solutions that go
beyond just moving products, Oil-Dri Transportation can customize
transportation packages for our customers. Oil-Dri operates an extensive
fleet of carriers and, in addition to over-the-road, can arrange rail
or overseas shipping for any customer. Service and safety are the
priorities of Oil-Dri Transportation.
<PAGE>
LETTER TO THE SHAREHOLDERS
Creative Value Through Innovation
Fiscal 1995 has been a challenging year for Oil-Dri. We have accomplished
a great deal including start-up of a new management information system,
completion of a major plant expansion and implementation of a senior
management reorganization and succession plan. These projects and the
exciting new products developed for launch in fiscal 1996 place the
Company in an extremely strong position. As our business grows in both
size and complexity, we strive to create value through innovation.
This year's financial results did not reflect the qualitative successes of
the year. Sales volumes did not meet expectations, and, in order to keep
inventories in balance, production levels were reduced in the second half
by approximately 20%. While each of our business units expanded
distribution, lower usage rates in the agricultural and fluid purification
businesses and a shift towards lower priced private labels in consumer
products combined to reduce overall sales growth. Cost increases in
packaging and transportation reduced profit margins, and we experienced an
increase in our income tax rate. Due to the competitive nature of our
businesses, we were not able to completely recover these cost increases
through increased prices.
Sales for the year ended July 31, 1995, were $152,899,000, up 4% versus
last year's sales of $147,147,000. Current and prior year's sales reflect
a reclassification of trade marketing costs to selling expenses. This
classification is common among companies in consumer products industries
and reflects Oil-Dri's continued and planned growth in this area. Trade
marketing costs were previously classified as a reduction of revenues. The
reclassification increases sales, gross profits and selling expenses, each
by the same amount, and has no effect on reported income from operations,
net income or net income per share. The reclassification will primarily
affect reported sales of the consumer division. Net income was $8,003,000,
off 19% from the $9,852,000 earned a year ago. Income per share was $1.15
versus last year's $1.41.
While we were disappointed with sales and earnings for the year, our cash
position, current ratio, balance sheet, infrastructure and organization
are all very strong, and the qualitative successes of the past twelve
months leave us well prepared to meet the opportunities and challenges of
the coming years. Innovations in our products and our programs should
allow us to deliver significant value to our customers and give us the
competitive edge needed to distinguish ourselves in the future.
HIGHLIGHTS FOR THE YEAR
Since the start of fiscal 1995, Oil-Dri has been operating a new, state-of-
the-art computer system. A significant, multi-year capital expenditure,
this internally designed management information system will lead us into
an age ever more dependent on the effective processing of data. All our
departments are discovering improved methods of managing information
available through this database system. This investment should provide the
support required for the Company's continued growth.
A $6,000,000 expansion of our Ripley, Mississippi production facility was
completed on time and on budget. The project has increased our Agsorb
capacity by 40% and provided the flexibility to produce floor absorbents
and cat litters at this plant if demand requires it.
Oil-Dri Production Company in Christmas Valley, Oregon received that
state's Outstanding Reclamation Award. In addition, plant personnel
completed five years without a lost time accident.
<PAGE>
The Company has implemented a new senior management organizational
structure and succession plan. Dan Jaffee has accepted the
responsibilities of president and chief operating officer as of August 1,
1995. Since coming to Oil-Dri from Price Waterhouse in 1987, Dan has led
the turnaround of our Canadian subsidiary, Favorite Products, Ltd., and
managed the Consumer Division, Data Processing, Manufacturing, and the
Finance and Accounting groups.
Under the management of Tom Cofsky, the Logistics, Quality and Service
Group was established to support our dedication to continuous improvement
and our commitment to deliver quality products and services that exceed
the expectations of our customers.
Fiscal 1995 marked the twenty-fourth consecutive year Oil-Dri has paid
dividends to shareholders. During the year, the Company also spent
$825,000 to purchase 50,500 shares of its own stock on the open market.
Our current ratio is 3.1 to 1 and our book value has increased to $11.35.
The Company's research and geological study continues and our body of
proven mineral reserves has reached 193 million tons. These mineral
resources are the core of our business and, we believe, the highest
quality collection of their kind in the industry. These reserves are an
important asset of the Company.
Oil-Dri was chosen the National Family Business of the Year from hundreds
of family businesses nominated all over the country. We are very proud of
this award because it acknowledges the ethics and values of the entire
Company including the more than 65 families that are represented by two or
more members working at Oil-Dri.
LOOKING FORWARD
The past year has been a building block in the Company's history.
Innovative technologies that promise to deliver increased sales to our
consumer, agricultural and fluid purification divisions were developed
during the year. Fiscal 1996 roll-out of these products will involve
investment in marketing support and advertising, particularly in the
consumer products group. These introductory expenses will reduce earnings
in the coming year, but ultimately these investments should deliver
greater earnings. These developments are discussed at length in the
following pages.
I would like to thank all those who have supported Oil-Dri; our
shareholders, directors, customers and employees have all played key roles
in Oil-Dri's history and will be equally important in our future. I am
pleased to have the opportunity to work with the next generation as we
enter what will be an exciting and dynamic time for Oil-Dri.
Sincerely,
Richard M. Jaffee
Chairman and Chief Executive Officer
<PAGE>
CONSUMER PRODUCTS
Oil-Dri's dollar share of the cat litter category has continued to grow
throughout the last twelve months, reflecting the increased distribution
gained over the course of the year. In the last reported quarter of
fiscal 1995, Oil-Dri's cat litter sales were up 17%, outpacing category
growth of approximately 8%.
Despite a sales mix that leaned toward less expensive, coarse cat litters,
private labels and large package units, sales for the consumer division
were up 8% for the year. Heightened competition for shelf space and
promotions was also a challenge and prevented us from recovering all the
increased costs in packaging and transportation seen throughout the year.
The consumer division has created value through innovation and the
introduction of the Cat's Pride Kat Kit, a disposable cat litter tray.
This product offers consumers a practically "touchless" system for the
ultimate convenience in cat box care. Cat's Pride Kat Kit has created a
great deal of interest among the trade, and national roll out of this
product is scheduled for fiscal 1996.
Our Cat's Pride Scoopable "Stretch Jug" will also be launched in fiscal
1996. This package redesign will offer consumers 40% more cat litter than
our competitors, at the same approximate cost. Cat's Pride Scoopable is
lighter in density, giving consumers more scoops per pound. The "Stretch
Jug" will leverage this important competitive advantage and deliver more
value to consumers.
As part of the Cat's Pride Kat Kit and Cat's Pride Scoopable "Stretch Jug"
introductions, we will be changing the focus of our marketing spending as
well. Due to the uniqueness of these products we are investing in
substantial advertising campaigns that will create awareness and drive
consumer pull-through. This is a different strategy than the division has
used in the past, but the potential growth opportunities these products
provide should make this a profitable investment in the long term,
returning significant growth for a fraction of what some of our
competitors have paid for their national brand businesses. In the next
year, these product introductions should deliver increases in sales.
However, due to the additional spending associated with new product
introductions, earnings for the division are expected to be down.
The consumer division has been strengthened with the addition of Steve
Levy as general manager and Jim VanVliet as director of marketing. Both
have a wealth of experience in the cat litter industry and in marketing
major consumer brands. Their outlook, combined with our existing consumer
team, will bring a fresh perspective to the value of our brands and their
marketability.
<PAGE>
INDUSTRIAL & ENVIRONMENTAL PRODUCTS
Sales and marketing of all our industrial products, both clays and
polypropylene sorbents, are being consolidated under the management of
Wade Bradley, the division's new general manager. Relocation of all
activities to Alpharetta, Georgia will improve service to customers and
assist in controlling operational costs.
Overall sales for the division were down 5% for the year due to increased
competition. The division's goals are to streamline operations and reduce
costs while increasing sales of value-added and more profitable sorbents.
Although this is our most mature market, we expect improved performance
and contribution.
While Oil-Dri is the best known name in industrial clay floor absorbents,
innovation and service must be continuously improved to build our complete
sorbent business. Value-added products will be the growth drivers in this
business. Targeting automotive outlets, mass merchandisers and
wholesalers, the division is working on consumer packaging of both Oil-Dri
floor absorbents and Oil-Dri Lite products. Oil-Dri Concentrated floor
absorbent is now sold through major wholesalers and provides a highly
absorbent cleaning product for the home mechanic.
A newly established inside sales group will work with our existing sales
force to manage accounts and increase productivity while reducing the cost
of outside sales calls. Management of this sales force will focus on the
profitability of each territory and the measurable activity of inside
sales.
The division has also opened a new sorbent converting plant in Alpharetta.
The plant's multiple production lines are equipped to handle meltblown
polypropylene product rewinding, sheeting and stacking. Custom orders can
be quickly converted to meet specific sorbent applications. The expansion
of the division's meltblown polypropylene operations reflects Oil-Dri's
commitment to the industry.
<PAGE>
AGRISORBENTS PRODUCT GROUP
Agsorb carriers are the leading clay carrier in the agrichemical industry.
Agsorb products are known for their quality and consistency and are
regarded as the industry standard. In 1994, demand for Agsorb carriers was
so high, the Agrisorbents Product Group was forced to turn away some
volume. This past year, our customers used considerably lower volumes of
Agsorb carriers due to reduced planting, surplus inventories and higher
chemical loading of certain crop protection products. These issues
combined to reduce divisional sales by 9%.
While demand for Agsorb carriers changes seasonally, we anticipate
increases in 1996. These demand increases will come, in part, from two of
our customers' successful EPA registration of new insecticides specified
for use with Agsorb granule carriers. The Agrisorbents Product Group
continues to promote value and service to our agricultural chemical
customers, and the Ripley plant expansion will provide enough capacity to
meet any fluctuations in demand.
New uses for Agsorb carriers are expanding in both geography and
application. A special grade of Agsorb is being used by a major producer
of agricultural products in Japan for distribution of a biotechnology-
based innoculant. This biotechnology promotes growth and yield in flowers,
fruits, vegetables and other plants. Agsorb carriers provide an easy- to-
use distribution medium for the innoculant. The product has been
introduced to the Japanese consumer market for home garden care.
Under the guidance of Chuck Boland, the new general manager, the division
will place increased emphasis on the animal health and nutrition industry.
Approximately $2 billion worth of animal health and nutrition products
were used in the animal feed industry in 1994, and this figure is growing
at approximately 5% annually.
Conditionade, our newest animal feed pelleting product, improves quality
in feed pellets and allows feed processors to handle high fat content
feeds with less difficulty. This product has gained wide acceptance by
animal health nutritionists.
Our research and development group will focus on creating additional value-
added products for this market, and the Agrisorbents Product Group is
concentrating more of their sales and marketing efforts on the animal
health and nutrition markets.
<PAGE>
PURE-FLO PRODUCT GROUP
The Pure-Flo Product Group has broken new ground in the bleaching and
clarification of oils. Extremely active raw minerals, innovative
technologies and unsurpassed technical support are all combined to offer
refiners of oils, both edible and petroleum, the opportunity to improve
their own processes and products. The Pure-Flo Product Group has
successfully expanded distribution of Pure-Flo bleaching clays and Ultra-
Clear clarification aids on a worldwide basis with customers in over 45
countries.
The exceptional quality of the crude vegetable oils being refined last
year greatly reduced consumption of bleaching clay. A number of major
customers were able to cut their bleaching clay requirements by more than
half. Sales to Malaysia, our largest foreign market, were also negatively
impacted by poor growing conditions and trade restrictions. To offset
reversals in more traditional markets, the division expanded its global
presence by adding new customers in Europe, Asia and Latin America. This
expansion is particularly positive in light of increased competition.
Competition was a key factor in Mexico, where the devaluation of the peso
made it virtually impossible to compete with local producers. Overall,
divisional sales were flat.
Growth opportunities in the upcoming year are exciting. The Pure-Flo
Product Group successfully introduced three new products at the end of
fiscal 1995. These higher value products should increase sales and
contribute to the division's profitability in fiscal 1996.
Pure-Flo FP80 adsorbent was developed for use in food processing
applications. Pure-Flo FP80 removes contaminating enzymes that soften
pickles while they are in the brine tanks. Typically, with over 4000
gallons of brine and 26 tons of pickles per tank, the contamination of
one tank can be very expensive. Pure-Flo FP80 can eliminate these costs if
used as both a preventative treatment and in the recovery of contaminated
brine tanks.
Renew L80 is being used as a filter medium in the growing residential
water purification market. Renew L80 removes metal ions, such as lead, and
other impurities from tap water. This is the first of several potential
applications for Renew products.
Select 350 adsorbent has been developed for use in the refining of edible
oils to replace an expensive water wash centrifuge process. Used upstream
from Pure-Flo bleaching clays, Select 350 improves overall oil quality and
can eliminate the waste stream generated by traditional water wash methods
of removing soaps, metals and phospholipids.
Fielden Fraley, the general manager of the division, and Nick Gershon, the
vice-president in charge of international activities, will focus on
several opportunities: global expansion of our core fluid purification
products, development of next generation adsorbents for existing fluid
purification applications, and development of new products for
applications in petroleum, petrochemical, food and beverage markets.
<PAGE>
A HISTORICAL PERSPECTIVE
In 1985...
The Dow Jones Average closed at a new record, 1553.10.
Ronald Reagan began his second term.
The Coca-Cola Company shocked the public with the introduction of a new
formula for Coke*. The public responded so forcefully, that the company
was forced to reintroduce the traditional 99-year-old recipe for the
famous soft drink.
And...
Oil-Dri recorded record sales of $46,000,000.
Fresh Step**, one of the cat litters Oil-Dri manufacturers for The Clorox
Company, had its first year of national distribution.
Oil-Dri acquired the Anshutz Mineral Company's plant facilities and
mineral reserves.
The market capital of Oil-Dri reached almost $60,000,000.
Since 1985 Oil-Dri's sales and income have more than tripled. Mineral
reserves have increased five fold, from 38 to 193 million tons. The
employee count has grown from 400 to 700. This growth is the result of
constant innovation and a commitment to continuous improvement.
*Coke is a registered trademark of The Coca-Cola Company.
**Fresh Step is a registered trademark of The Clorox Company.
<PAGE>
<TABLE>
<CAPTION>
Five Year Summary of Financial Data
Year Ended July 31
SUMMARY OF OPERATIONS 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Net Sales* $152,899,109 $147,146,793 $140,866,110 $124,584,756 $106,053,920
Cost of Sales 108,268,431 102,456,815 97,396,563 85,116,335 74,370,331
Gross Profit 44,630,678 44,689,978 43,469,547 39,468,421 31,683,589
Selling, General and
<S> <C> <C> <C> <C> <C> <C>
Administrative Expenses* 31,788,731 30,261,701 29,420,831 28,835,931 21,646,725
<S> <C> <C> <C> <C> <C>
Income from Operations 12,841,947 14,428,277 14,048,716 10,632,490 10,036,864
Other Income (Expense)
<S> <C> <C> <C> <C> <C>
Interest Income 448,268 440,796 451,519 514,756 601,608
<S> <C> <C> <C> <C> <C>
Interest Expense (1,751,666) (1,751,839) (1,728,817) (1,884,166) (1,363,039)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Foreign Exchange (Losses) ( 5,463) 3,009 ( 87,655) 63,471 ( 22,636)
Gains
<S> <C> <C> <C> <C> <C>
Amortization of Goodwill ( 132,048) ( 132,001) ( 131,799) ( 131,079) ( 131,079)
<S> <C> <C> <C> <C> <C> <C>
Other, Net ( 253,613) 171,142 ( 298,485) 15,198 50,178
<S> <C> <C> <C> <C> <C> <C>
Total Other Expense, Net (1,694,522) (1,268,893) (1,795,237) (1,421,820) ( 864,968)
<S> <C> <C> <C> <C> <C>
Income before Income Taxes 11,147,425 13,159,384 12,253,479 9,210,670 9,171,896
<S> <C> <C> <C> <C> <C>
Income Taxes 3,144,597 3,307,184 2,833,837 2,110,262 2,092,130
<S> <C> <C> <C> <C> <C>
Net Income $8,002,828 $ 9,852,200 $ 9,419,642 $7,100,408 $7,079,766
<S> <C> <C> <C> <C> <C>
Average Shares Outstanding 6,935,975 7,010,724 7,031,116 7,026,300 7,054,709
<S> <C> <C> <C> <C> <C>
Net Income per Share $1.15 $1.41 $1.34 $1.01 $1.00
Important Highlights
<S> <C> <C> <C> <C> <C>
Total Assets $116,987,683 $112,267,182 $102,116,632 $95,017,573 $89,393,673
<S> <C> <C> <C> <C> <C>
Long-Term Debt $ 20,422,265 $ 21,521,243 $ 17,765,941 $18,831,133 $20,175,930
<S> <C> <C> <C> <C> <C>
Working Capital $ 33,074,318 $ 29,337,449 $ 26,043,415 $24,358,769 $24,763,055
<S> <C> <C> <C> <C> <C>
Working Capital Ratio 3.1 3.0 2.7 2.8 3.4
<S> <C> <C> <C> <C> <C>
Capital Expenditures $ 7,032,064 $ 13,559,232 $ 9,158,173 $ 8,039,979 $10,415,543
<S>
Depreciation and
<S> <C> <C> <C> <C> <C>
Amortization $ 7,808,496 $ 6,798,038 $ 5,834,854 $ 5,407,341 $ 4,830,835
<S> <C> <C> <C> <C> <C>
Long-Term Debt to Equity 26.1% 29.5% 26.7% 31.6% 36.9%
Ratio
Net Income as a Percent of
<S> <C> <C> <C> <C> <C> <C>
Net Sales* 5.2% 6.7% 6.7% 5.7% 6.7%
Return on Average
<S> <C> <C> <C> <C> <C> <C>
Stockholders' Equity 10.6% 14.1% 14.9% 12.4% 13.7%
Gross Profit as a Percent of
<S> <C> <C> <C> <C> <C> <C>
Net Sales* 29.2% 30.4% 30.9% 31.7% 29.9%
Operating Expenses as a
<S> <C> <C> <C> <C> <C> <C>
Percent of Net Sales* 20.8% 20.6% 20.9% 23.1% 20.4%
</TABLE>
*Net sales and selling, general and administrative expenses reflect the
reclassification of trade marketing costs. See Note 1 to consolidated
financial statements.
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Fiscal 1995 Compared to Fiscal 1994
Consolidated net sales for the year ended July 31, 1995 were $152,899,000,
an increase of 3.9% over net sales of $147,147,000 in fiscal 1994. Net
income for fiscal 1995 was $8,003,000 or $1.15 per share, decreasing 18.8%
from net income of $9,852,000 or $1.41 per share in fiscal 1994. Current
and prior year's sales figures reflect a reclassification of trade
marketing costs to selling expenses. This classification is commonly used
by companies in consumer products industries and reflects the Company's
continued and planned growth in this area. Trade marketing costs were
previously classified as a reduction of revenues. The reclassification
increases sales, gross profits and selling expenses, each by the same
amount, and has no effect on reported income from operations, net income
or net income per share. The reclassification will primarily affect
reported sales of the consumer division.
Sales increases were primarily the result of increased unit shipments and
slightly increased average sales per unit due to changes in product sales
mix. Net sales of industrial and environmental sorbents, consisting of
clay and non-clay products, decreased $1,043,000 or 5.2% from prior year
levels due to decreased unit shipments of clay products. Net sales of
industrial clay products fell $611,000 or 4.3% from prior year levels.
Sales of non-clay sorbents decreased $432,000 or 7.5%, reflecting
increased competition in the markets in which the Company participates.
Net sales of cat box absorbents increased $5,871,000 or 7.6% above fiscal
1994 levels. This growth was driven by unit sales increases of private
label litters in the mass merchandising distribution channel and increased
grocery market penetration. Net sales of agricultural carriers and
absorbents decreased $1,719,000 or 9.4% from the prior fiscal year due to
decreased unit shipments caused by reduced planting, inventory carryover
and higher chemical loading of crop protection products. Net sales of
fluid purification absorbents remained flat versus fiscal 1994. The high
quality of domestic crude vegetable oils and adverse growing conditions in
certain foreign markets reduced consumption of the Company's bleaching
earth products. Sales of transportation services increased $1,825,000 or
24.3% from fiscal 1994 levels due to increased fleet size and backhaul
revenue.
Consolidated gross profit as a percentage of net sales decreased to 29.2%
of net sales in fiscal 1995 from 30.4% in fiscal 1994. This decrease was
principally due to increased packaging and shipping costs and a shift in
mix in the consumer business towards private label litters.
Operating expenses as a percentage of net sales increased slightly to
20.8% of net sales in fiscal 1995 from 20.6% of net sales in fiscal 1994.
This change reflects managements continued focus on controlling overhead
costs while expanding sales and marketing efforts.
Interest expense and interest income remained substantially unchanged in
fiscal 1995.
The Company's effective income tax rate increased to 28.2% of income in
fiscal 1995 from 25.1% in the prior fiscal year. The provision for income
tax expense for the fourth quarter and year ended July 31, 1995 includes a
charge of $263,000 reflecting a change in the estimated amounts of
depletion deductions and temporary differences between financial reporting
and tax reporting for the year ended July 31, 1994.
<PAGE>
Total assets of the Company increased $4,721,000 or 4.2% during the year
ended July 31, 1995. Current assets increased $4,383,000 or 9.9% from
prior fiscal year-end balances due to higher accounts receivable and
prepaid balances. Inventory balances decreased somewhat, primarily
because a capacity expansion at the Company's Ripley, Mississippi facility
has been completed, reducing overall inventory needs.
Property, plant and equipment, net of accumulated depreciation and
amortization, decreased $784,000 or 1.3%. Investments in property, plant
and equipment included expenditures for increased productivity, major
capacity enhancements, pollution control, and equipment upgrades.
As of July 31, 1995, the Company has invested approximately $717,000 in
Kamterter, Inc., a company that researches and applies biotechnology in
the agricultural field. This investment, recorded at cost, represents a
14% equity interest in Kamterter. During the year ended February 28,
1995, and in recent interim periods, Kamterter has begun to generate
operating profits. While the Company believes that Kamterter's prospects
have improved, Kamterter's future financial condition and results of
operation cannot be predicted.
Total liabilities decreased $558,000 or 1.4% in the year ended July 31,
1995 due primarily to debt reduction.
The Company expects increased sales in fiscal 1996, primarily in the
consumer grocery markets due to increased distribution and the
introduction of new products and package sizes. Consolidation of cat box
absorbent manufacturers has continued over the past year, and increased
competition in the grocery and mass merchandising industry is expected.
Moderate sales growth is also expected in the Company's fluid purification
and agricultural lines as new filtration, agricultural carrier and animal
feed products are commercialized. Sales in the industrial and
transportation lines are expected to continue at levels similar to those
achieved in fiscal 1995. The Company expects earnings to be some what
lower in fiscal 1996 due to costs associated with new product
introductions in the consumer market. These costs include substantial
consumer advertising, slotting allowances and introductory promotional
programs.
Liquidity and Capital Resources
In fiscal 1995, the current ratio increased to 3.1 from 3.0 as of July 31,
1994. Working capital increased $3,737,000 or 12.7% for the year ended
July 31, 1995. Cash provided by operations continued to be the Company's
primary source of funds to finance operating needs and capital
expenditures. In fiscal 1995 net cash flows from operating activities
increased 25.4% to $12,317,000. This cash was used to fund capital
expenditures of $7,032,000, pay Company dividends of $1,983,000 and
repurchase shares of the Company's Common Stock at a cost of $825,000.
The Company may continue to repurchase its Common Stock from time to time.
As of July 31, 1995, total consolidated cash and investments were
$11,162,000, up 14.5% from $9,746,000 as of July 31, 1994. Of this
amount, balances held by the Company's foreign subsidiaries as of July 31,
1995 and 1994 were $3,296,000 and $3,220,000, respectively.
The Company's long-term debt as of July 31, 1995 decreased $1,099,000 or
5.1% from fiscal 1994 balances, primarily due to scheduled debt
repayments. Long-term debt to equity decreased to 26.1% from 29.5% as of
July 31, 1994.
The Company's line-of-credit arrangements are discussed in Note 3 to the
consolidated financial statements. During the year ended July 31, 1995
there were no borrowings under the line of credit. Management believes
that funds generated from operations and available borrowing capacity are
adequate to meet the Company's cash needs for fiscal 1996.
<PAGE>
Proceeds from issuance of common stock were directly related to activities
in the Company's stock option plans. In fiscal year 1995 no shares were
issued under option plans. During fiscal year 1994, options for 50,641
shares were exercised, creating an additional $163,800 of stockholders'
equity.
Fiscal 1994 Compared to Fiscal 1993
Consolidated net sales for the year ended July 31, 1994 were $147,147,000,
an increase of 4.5% over net sales of $140,866,000 in fiscal 1993. Net
income for fiscal 1994 was $9,852,000 or $1.41 per share, increasing 4.6%
from net income of $9,420,000 or $1.34 per share in fiscal 1993.
Sales increases were primarily the result of increased unit shipments and
increased sales per unit due to changes in product sales mix. Net sales
of industrial and environmental sorbents, consisting of clay and non-clay
products, increased $987,000 or 5.2% from prior year levels due to
increased unit shipments of clay products. Net sales of industrial
clay products rose $1,504,000 or 11.9% from prior year levels. Mass
merchandisers and warehouse clubs increased their importance as
distribution outlets for traditional clay floor absorbents. Increased
sales in this area were due in part to the Company's strong position in
these growing distribution channels. Sales of non-clay sorbents decreased
$517,000 or 8.2%, reflecting increased competition in the markets in which
the Company participates.
Net sales of cat box absorbents increased $3,668,000 or 5.0% above fiscal
1993 levels. This growth was driven by unit sales increases of scoopable
cat litters in the mass merchandising and wholesale club markets. Net
sales of agricultural carriers and absorbents remained unchanged from
the prior fiscal year. While demand for these products was strong, capacity
limitations and weather related difficulties prevented the Company from
meeting customer demand. Net sales of fluid purification absorbents
increased $3,040,000 or 30.0% versus fiscal 1993 due to the
increased global market penetration of PURE-FLO Supreme. Sales of
transportation services decreased $200,000 or 2.6% from fiscal 1993
levels. This reduction was due to the national shortage of qualified over
the road drivers and longer running times due to weather conditions.
Consolidated gross profit as a percentage of net sales decreased slightly
to 30.4% of net sales in fiscal 1994 from 30.9% in fiscal 1993. This
decline was principally due to increased material and shipping costs.
Severe winter storms, particularly in the Northeast United States,
stimulated sales of cat box absorbents and floor absorbents for use as
traction aids. This unusually high demand reduced inventory levels while
weather related manufacturing and delivery disruptions occurred. In order
to meet customer needs, large quantities of semi-finished product were
purchased at high costs. These purchases, combined with additional
finishing costs, overtime labor and increased shipping charges adversely
affected cost of goods sold. Finally, to overcome certain capacity
limitations, meet shipping commitments and retain customer goodwill, the
Company shifted production between manufacturing facilities, the effect of
which was to increase production and shipping costs. As discussed below,
the Company expanded plant capacity and increased inventory to address
these matters.
Operating expenses as a percentage of net sales decreased to 20.6% of net
sales in fiscal 1994 from 20.9% of net sales in fiscal 1993. This change
reflects management's continued focus on controlling overhead costs.
Interest expense increased $23,000 due to higher average debt levels
netted against lower interest rates achieved through debt restructuring in
fiscal 1993. Interest income decreased $11,000.
<PAGE>
The Company's effective tax rate was 25.1% of income in fiscal 1994
compared to 23.1% in the prior fiscal year. This increase was the result
of reduced depletion deductions related to mining activities and the
elimination of amortization of investment credits which benefited prior
years.
Total assets of the Company increased $10,151,000 or 9.9% during the year
ended July 31, 1994. Current assets increased $3,335,000 or 8.1% from
prior fiscal year-end balances due to higher accounts receivable balances
from increased sales. In addition, inventory balances increased as a
result of a new inventory management initiative designed to minimize
product shortages discussed above.
Property, plant and equipment, net of accumulated depreciation and
amortization, increased $6,513,000 or 12.1%. Investments in property,
plant and equipment included expenditures for increased productivity,
major capacity enhancements, pollution control, and equipment upgrades.
As of July 31, 1994, the Company had invested approximately $717,000 in
Kamterter, Inc., a company which researches and applies biotechnology in
the agricultural field. This investment, recorded at cost, represents a
14% equity interest in Kamterter. Current operating losses had increased
Kamterter's negative net worth.
Total liabilities increased $3,534,000 or 9.9% in the year ended July 31,
1994. In April 1993, the Company entered into a $5,000,000 fixed-rate
term loan agreement with Harris Trust and Savings Bank. These proceeds
were used to fund capital expenditures, including a major capacity
increase of the Company's Ripley, Mississippi facility. Current
liabilities increased $41,000.
Foreign Subsidiaries
Net sales by foreign subsidiaries during fiscal 1995 were $12,248,000
constituting 8.0% of sales. This amount represented an increase of
$1,000,000 from fiscal 1994, in which foreign sales were $11,248,000 and
constituted 7.6% of sales. The increase in foreign subsidiary sales
resulted from increased market share in Canadian cat litter markets and
price increases at the Company's United Kingdom subsidiary. Net income of
the Company's foreign subsidiaries during fiscal 1995 was $763,000, as
compared with $403,000 in fiscal 1994. Identifiable assets of the
Company's foreign subsidiaries as of July 31, 1995 were $9,571,000, a
slight decrease from fiscal 1994 year-end balances.
Net sales made by the Company's foreign subsidiaries for the year ended
July 31, 1994 were $11,248,000, constituting 7.6% of sales. This amount
represented a decrease of $1,185,000 or 9.5% from fiscal 1993, in which
foreign subsidiary sales were $12,433,000 and constituted 8.8% of sales.
Net income of the Company's foreign subsidiaries during fiscal 1994 was
$403,000, as compared to $617,000 in fiscal 1993. This decrease was
principally due to the decline in value of the Canadian dollar and British
pound versus the U.S. dollar. The identifiable assets of the Company's
foreign subsidiaries as of July 31, 1994 were $9,608,000, a decrease of
15% from fiscal 1993 year-end balances, also due to the falling Canadian
dollar.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Financial Position
1995 1994
ASSETS
Current Assets
<S> <C> <C> <C> <C>
Cash and cash equivalents (Note 1) $ 8,829,667 $ 6,394,315
Investment securities, at cost, which
approximates market 2,332,665 3,351,423
Accounts receivable 21,529,168 19,854,899
Less allowance for doubtful accounts ( 180,602) ( 171,940)
Inventories (Note 1) 10,917,099 11,203,008
Prepaid expenses 5,317,169 3,730,298
Total Current Assets 48,745,166 44,362,003
Property, Plant and Equipment, at Cost (Notes 1 and 3)
<S> <C> <C>
Buildings and leasehold improvements 15,335,526 14,742,017
Machinery and equipment 76,721,765 65,563,903
Office furniture and equipment 7,831,961 7,341,440
Vehicles 117,906 114,246
100,007,158 87,761,606
Less accumulated depreciation and (47,498,516) (39,949,247)
amortization
<C> <C>
52,508,642 47,812,359
Construction in progress 1,289,855 6,836,910
Land and mineral rights 5,660,898 5,594,295
Total Property, Plant and 59,459,395 60,243,564
Equipment, Net
Other Assets
Goodwill (Net of accumulated
amortization of
$1,073,404 in 1995 and $941,356 in 4,304,286 4,436,334
1994)(Note 9)
Deferred income taxes (Note 4) 484,324 -
Other 3,994,512 3,225,281
Total Other Assets 8,783,122 7,661,615
Total Assets $116,987,683 $112,267,182
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
JULY 31
1995 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
<S> <C> <C>
Current maturities of notes payable $ 1,097,976 $ 1,243,479
(Note 3)
Accounts payable 4,710,251 4,677,793
Dividends payable 511,166 449,302
Accrued expenses
Salaries, wages and commissions 2,362,102 3,180,455
Trade promotions and advertising 4,272,740 3,257,985
Freight 747,042 838,760
Other 1,969,571 1,376,780
Total Current Liabilities 15,670,848 15,024,554
Noncurrent Liabilities
<S> <C> <C> <C> <C>
Notes payable (Note 3) 20,422,265 21,521,243
Deferred income taxes (Note 4) - 323,379
Deferred compensation (Note 5) 1,778,075 1,761,818
Other 778,112 576,684
Total Noncurrent Liabilities 22,978,452 24,183,124
Total Liabilities 38,649,300 39,207,678
Stockholders' Equity
<S> <C> <C> <C> <C>
Common and Class B stock (Note 6) 723,352 723,352
Paid-in capital in excess of par value 7,657,394 7,657,394
Retained earnings 76,033,462 70,077,278
Cumulative translation adjustments ( 987,781) (1,135,951)
(Note 1)
<C> <C>
83,426,427 77,322,073
Less treasury stock, at cost (Note 6) ( 5,088,044) ( 4,262,569)
Total Stockholders' Equity 78,338,383 73,059,504
Total Liabilities and Stockholders' $116,987,683 $112,267,182
Equity
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Income
Year Ended July 31
1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Sales (Note 1) $152,899,109 $147,146,793 $140,866,110
Cost of Sales 108,268,431 102,456,815 97,396,563
Gross Profit 44,630,678 44,689,978 43,469,547
Selling, General and Administrative
Expenses (Note 1) 31,788,731 30,261,701 29,420,831
Income from Operations 12,841,947 14,428,277 14,048,716
Other Income (Expense)
Interest income 448,268 440,796 451,519
Interest expense (1,751,666) (1,751,839) (1,728,817)
Foreign exchange (losses) gains ( 5,463) 3,009 ( 87,655)
Amortization of goodwill (Note 9) ( 132,048) ( 132,001) ( 131,799)
Other, net ( 253,613) 171,142 ( 298,485)
Total Other Expense, Net (1,694,522) (1,268,893) (1,795,237)
Income before Income Taxes 11,147,425 13,159,384 12,253,479
Income Taxes (Note 4) 3,144,597 3,307,184 2,833,837
Net Income $ 8,002,828 $ 9,852,200 $ 9,419,642
Average Shares Outstanding (Note 6) 6,935,975 7,010,724 7,031,116
Net Income Per Share (Note 6) $ 1.15 $ 1.41 $ 1.34
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Stockholders' Equity
Paid-In
Capital In
Shares Excess of Retained
Common Class B Amount Par Value Earnings
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, July 31, 1992 4,978,919 2,173,755 $ 715,267 $ 6,592,064 $54,291,066
Net income - - - - 9,419,642
Dividends declared - - - - (1,678,894)
Issuance of stock under option
plans (Note 7) 28,095 - 2,810 349,014 -
Awards of stock to employees 1,072 - 107 21,026 -
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, July 31, 1993 5,008,086 2,173,755 718,184 6,962,104 62,031,814
Net income - - - - 9,852,200
Dividends declared - - - - ( 1,806,736)
Issuance of stock under option
plans (Note 7) 50,641 - 5,064 673,988 -
Awards of stock to employees 1,036 - 104 20,916 -
Reissuance of treasury shares - - - 386 -
Conversion of Class B Stock to
Common Stock (Note 6) 40,860 ( 40,860) - - -
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, July 31, 1994 5,100,623 2,132,895 723,352 7,657,394 70,077,278
Net income - - - - 8,002,828
Dividends declared - - - - (2,046,644)
Conversion of Class B Stock to
Common Stock (Note 6) 18,201 ( 18,201) - - -
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, July 31, 1995 5,118,824 2,114,694 $ 723,352 $7,657,394 $76,033,462
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Year Ended July 31
1995 1994 1993
Cash Flows from Operating
Activities
<S> <C> <C> <C>
Net income $ 8,002,828 $ 9,852,200 $ 9,419,642
Adjustments to reconcile net income
to net cash provided by operating
activities
<S> <C> <C> <C>
Depreciation and 7,808,496 6,798,038 5,834,854
amortization
Provision for bad debts 51,013 4,744 72,890
(Increase) decrease in
<S> <C> <C> <C>
Accounts receivable (1,680,287) (1,502,865) (2,827,243)
Inventories 319,844 (3,186,879) (1,156,110)
Prepaid expenses and taxes (1,608,299) (1,114,801) 1,149,110
Other assets ( 731,846) ( 473,484) ( 512,544)
Increase (decrease) in
Accounts payable 774,083 (916,395) 1,335,395
Income taxes payable - - ( 2,974)
Accrued expenses ( 32,319) 627,825 1,269,804
Deferred income taxes ( 804,004) (946,058) ( 808,092)
Deferred investment tax - - ( 114,816)
credits
Deferred compensation 16,257 381,872 314,690
Other 201,428 300,336 263,223
Total Adjustments 4,314,366 ( 27,667) 4,818,187
Net Cash Provided by
Operating Activities 12,317,194 9,824,533 14,237,829
Cash Flows from Investing Activities
<S> <C> <C>
Capital expenditures ( 7,032,064)(13,559,232) (9,158,173)
Purchases of investment ( 3,691,201)(11,750,654) (11,084,764)
securities
Dispositions of investment
<S> <C> <C> <C>
securities 4,722,543 13,910,258 8,126,841
Other 159,709 399,295 ( 28,422)
Net Cash Used in Investing
<S> <C> <C>
Activities (5,841,013)(11,000,333) (12,144,518)
</TABLE>
(Continued)
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
(Continued)
Year Ended July 31
1995 1994 1993
Cash Flows from Financing Activities
<S> <C> <C> <C>
Principal payments on long-term (1,244,481) (743,834) (8,408,802)
debt
Proceeds from issuance of long-term - 5,000,000 6,510,720
debt
Proceeds from issuance of Common - 700,458 372,957
Stock
Net payments of loan issuance - - ( 43,047)
costs
Dividends paid (1,983,291) (1,804,002) (1,613,106)
Purchase of treasury stock ( 825,475) (1,894,762) ( 668,205)
Other 12,418 1,025 ( 210,980)
Net Cash (Used in)
Provided by (4,040,829) 1,258,885 (4,060,463)
Financing Activities
Net Increase (Decrease) in Cash
and Cash Equivalents 2,435,352 83,085 (1,967,152)
Cash and Cash Equivalents,
Beginning of Year 6,394,315 6,311,230 8,278,382
Cash and Cash Equivalents,
End of Year $8,829,667 $6,394,315 $6,311,230
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
Notes to Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Oil-Dri
Corporation of America and its wholly owned subsidiaries. All
intercompany balances and transactions have been eliminated.
No provision has been made for possible income taxes which may be paid on
the distribution of approximately $6,759,000 and $6,576,000 as of July 31,
1995 and 1994, respectively, of the retained earnings of foreign
subsidiaries, as substantially all such amounts are intended to be
indefinitely invested in these subsidiaries or no additional income taxes
would be incurred when such earnings are distributed. It is not
practicable to determine the amount of income taxes or withholding taxes
that would be payable upon the remittance of assets that represent those
earnings.
Revenue Recognition
Revenues from sales of products and transportation services are recognized
upon shipment.
Income Taxes
Deferred income taxes reflect the impact of temporary differences between
the assets and liabilities recognized for financial reporting purposes and
amounts recognized for tax purposes.
Interest Rate Derivative Instruments
Interest differentials on a swap contract (Note 3) are recorded as
interest expense in the contract period incurred. The Company recognized
additional interest expense of $58,900, $98,300 and $103,100 in fiscal
years 1995, 1994 and 1993, respectively, as a result of this contract.
Reclassification
During the year ended July 31, 1995, trade marketing costs, previously
accounted for as a reduction of sales, were reclassified as selling,
general and administrative expenses. Significant items reclassified
include the costs of vendor cooperative advertising programs, vendor
incentive programs and slotting allowances. The presentation is common in
the consumer products industry. The reclassification increased reported
net sales, gross profits and selling, general and administrative expenses
by the same amount, and had no effect on reported income from operations,
net income or net income per share. The effect on previously reported
quarterly net sales and gross profits has been reflected in Note 12.
Total amounts reclassified for the years ended July 31, 1995, 1994 and
1993 were $9,257,351, $7,337,209 and $6,106,527, respectively.
Certain other items in prior year financial statements have been
reclassified to conform to the presentation used in fiscal 1995.
<PAGE>
Notes to Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Translation of Foreign Currencies
Assets and liabilities of foreign subsidiaries are translated at the
current exchange rate. Income statement items are translated at the
average exchange rate on a monthly basis. Resulting translation
adjustments are recorded as a separate component of stockholders' equity.
Changes in the cumulative translation adjustments account are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <S> <C> <C> <C>
Balance, at beginning of year $(1,135,951) $( 901,783) $(243,537)
Translation adjustments resulting
<S> <C> <C> <C>
from exchange rate changes and 148,170 ( 234,168) (658,246)
intercompany transactions
<S> <C> <S> <C> <C> <C> <C>
Balance, at end of year $( 987,781) $(1,135,951) $(901,783)
</TABLE>
Cash and Cash Equivalents
Cash and cash equivalents are highly liquid investments with maturities of
three months or less when purchased. The carrying amount approximates
fair value.
Inventories
The composition of inventories is as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Finished goods $ 6,849,536 $ 5,257,765
Bags 2,575,259 3,431,828
Supplies 1,272,443 2,329,938
Fuel oil 219,861 183,477
$10,917,099 $11,203,008
</TABLE>
Inventories are valued at the lower of cost (first-in, first-out) or
market.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash investments and
accounts receivable. The Company places its cash investments in
government backed instruments, both foreign and domestic, and with other
high quality institutions. Concentrations of credit risk with respect to
accounts receivable are subject to the financial condition of certain
major customers, principally those referred to in Note 2.
The Company generally does not require collateral to secure customer
receivables.
<PAGE>
Notes to Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property, Plant and Equipment
Property, plant and equipment expenditures are generally depreciated using
the straight-line method over their estimated useful lives as follows:
<TABLE>
<CAPTION>
Years
<S> <C>
Buildings and leasehold improvements 5-30
Machinery and equipment 3-15
Office furniture and equipment 2-10
Vehicles 2-8
</TABLE>
Research and Development
Research and development costs of $1,826,000 in 1995, $1,875,000 in 1994
and $1,509,000 in 1993 were charged to expense as incurred.
Advertising Costs
The Company defers recognition of advertising production costs until the
first time the advertising takes place.
NOTE 2 - BUSINESS AND GEOGRAPHIC REGION INFORMATION
The Company develops, manufactures and markets sorbent products and
technologies for use in industry, home and agriculture. The Company
operates in the United States, Switzerland, Canada and the United Kingdom
and exports goods worldwide.
The Company had sales in excess of 10% of total sales to one unaffiliated
customer in 1995 and 1994 and two unaffiliated customers in 1993.
Accounts receivable related to these major customers amounted to
$5,083,000, $4,845,000 and $7,050,000 as of July 31, 1995, 1994 and 1993,
respectively.
The sales to these customers were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
(Thousands of Dollars)
<S> <C> <C> <C>
Amount $40,884 $35,848 $29,158
Percent of net sales 27% 24% 21%
Amount - - $15,329
Percent of net sales - - 11%
sales
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
NOTE 2 - BUSINESS AND GEOGRAPHIC REGION INFORMATION (Continued)
The following is a summary of financial information by geographic region:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JULY 31
(Thousands of Dollars)
1995 1994 1993
Sales to unaffiliated customers:
<S> <C> <C> <C>
Domestic $140,651 $135,899 $128,433
Foreign subsidiaries 12,248 11,248 12,433
Export sales:
Domestic $ 4,067 $ 8,252 $ 6,162
Sales or transfers between
geographic areas:
Domestic $ 3,233 $ 3,891 $ 3,741
Income before income taxes:
Domestic $ 10,094 $ 12,257 $ 11,441
Foreign subsidiaries 1,053 902 812
Net Income:
Domestic $ 7,240 $ 9,449 $ 8,803
Foreign subsidiaries 763 403 617
Identifiable assets:
Domestic $107,417 $102,659 $ 90,816
Foreign subsidiaries 9,571 9,608 11,301
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to Consolidated Financial Statements
NOTE 3 - NOTES PAYABLE
The composition of notes payable is as follows:
1995 1994
<S>
Thomasville Payroll Development Authority
Payable in annual principal installments of
$592,593 for the years 1994 to 1995,
inclusive. Interest is payable semiannually
<S> <C> <S> <C> <C> <S> <C>
at a rate of 68% of the prime rate. $ - $ 592,593
Town of Blue Mountain, Mississippi
Principal payable on October 1, 2008.
Interest payable monthly at a variable
interest rate set weekly based on market
conditions for similar instruments. The
average rates were 4.00% and 2.80% in 1995 and
1994, respectively. Payment of these bonds by
the Company is guaranteed by a letter of credit
issued by Harris Trust and Savings Bank. In
May 1991 the Company entered into a seven-year
interest rate swap contract. Under this
agreement, the Company receives a
floating interest rate based on LIBOR and
<S> <C> <C> <C>
pays interest at a fixed rate of 6.53%. 2,500,000 2,500,000
Teachers Insurance and Annuity Association of
America Payable in annual principal
installments on November 15; $500,000 for
the years 1995 and 1996; $1,500,000 for 1997;
$1,800,000 for 1998; $1,200,000 for 2000;
$1,100,000 for 2001; and $1,000,000 for
2002. Interest is payable semiannually at
<S> <C> <C> <C>
an annual rate of 9.38%. 7,100,000 7,600,000
Teachers Insurance and Annuity Association
of America Payable in annual principal
installments, the first payment due
August 15, 2001; $500,000 for 2002;
$1,000,000 for 2003; $2,500,000 for 2004;
and $2,500,000 for 2005. Interest is payable
<S> <C> <C> <C>
semiannually at an annual rate of 7.17%. 6,500,000 6,500,000
Harris Trust and Savings Bank
Payable in annual principal installments,
the first payment due June 20, 1996;
$500,000 for 1996; $1,950,000 for 1999;
$900,000 for 2000; $650,000 for years
2001 and 2002; and $350,000 for 2003.
Interest is payable quarterly at an annual
<S> <C> <C> <C>
rate of 7.78%. 5,000,000 5,000,000
<S> <C> <C>
Other 420,241 572,129
<C> <C>
21,520,241 22,764,722
<S> <C> <C>
Less current maturities of notes payable (1,097,976) (1,243,479)
<C> <C>
$20,422,265 $21,521,243
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
NOTE 3 - NOTES PAYABLE (Continued)
During fiscal 1995 the Company executed a Credit Agreement with Harris
Trust and Savings Bank which replaced the Term Note Agreement dated April
20, 1994. In addition to providing continued term financing, the Credit
Agreement provides for a $5,000,000 committed unsecured revolving line of
credit which expires on August 1, 1999, at certain short term rates.
The agreements the Town of Blue Mountain, Mississippi, Teachers Insurance
and Annuity Association of America and Harris Trust and Savings Bank
impose working capital requirements, dividend and financing limitations,
minimum tangible net worth requirements and other restrictions. The
Company's Credit Agreement with the Harris Trust and Savings Bank
indirectly restricts dividends by requiring the Company to maintain
tangible net worth, as defined, in the amount of $50,000,000 plus 25% of
cumulative annual earnings from July 31, 1994.
The Thomasville Payroll Development Authority and the Town of Blue
Mountain, Mississippi acquired, in prior years, substantially all of the
assets of certain plant expansion projects, issued long-term bonds to
finance the purchase and leased the projects to the Company and various of
its subsidiaries (with the Company and various of its wholly owned
subsidiaries as guarantors) at rentals sufficient to pay the debt service
on the bonds.
The following is a schedule by year of future maturities of notes payable
as of July 31, 1995:
<TABLE>
<CAPTION>
Year Ending July 31:
<C> <C>
1997 $ 1,582,265
1998 1,880,000
1999 2,030,000
2000 2,180,000
2001 1,750,000
<S> <C>
Later years 11,000,000
<C>
$20,422,265
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
NOTE 4 - INCOME TAXES
The provision for income tax expense consists of the following:
<TABLE>
<CAPTION>
1995 1994 1993
Current
Federal, net of amortization of
<S> <C> <C> <C>
investment tax credits $2,756,283 $3,221,911 $2,522,761
Foreign 292,664 163,897 206,923
State 670,780 866,281 685,922
3,719,727 4,252,089 3,415,606
Deferred
<S> <C> <C> <C>
Federal ( 535,093) ( 855,699) ( 465,865)
Foreign ( 2,142) 1,153 ( 11,833)
State ( 37,895) ( 90,359) ( 104,071)
( 575,130) ( 944,905) ( 581,769)
<S> <C> <C> <C>
Total income tax provision $3,144,597 $3,307,184 $2,833,837
</TABLE>
The components of the deferred tax (benefit) provisions occurring as a
result of transactions being reported in different years for financial and
tax reporting are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C> <C> <C>
Depreciation $( 286,291) $( 304,437) $( 479,415)
Deferred compensation ( 6,308) ( 148,242) ( 125,876)
Postretirement benefits ( 16,531) ( 129,081) -
Trade promotions and advertising 45,378 112,578 ( 102,000)
Accrued expenses ( 48,530) ( 164,694) ( 70,603)
Other, net ( 175,000) ( 270,990) 196,125
Alternative minimum tax ( 87,848) ( 40,039) -
Total $( 575,130) $( 944,905) $( 581,769)
</TABLE>
The provision for income tax expense for the fourth quarter and year ended
July 31, 1995 includes a charge of $263,000 reflecting a change in the
estimated amounts of depletion deductions and temporary differences
between financial reporting and tax reporting for the year ended July 31,
1994.
<PAGE>
Notes to Consolidated Financial Statements
NOTE 4 - INCOME TAXES (Continued)
Principal reasons for variations between the statutory federal rate and
the effective rates were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S><C> <S> <C> <C> <C>
U.S. federal statutory income tax rate 34.00% 34.00% 34.00%
Depletion deductions allowed for mining (12.24) (12.48) (13.86)
State income taxes, net of federal
tax benefit 5.68 4.42 4.75
Amortization of investment credits - - ( .94)
Difference in effective tax rate of
foreign subsidiaries ( 0.61) ( 0.16) ( 0.66)
Other 1.38 ( 0.65) ( 0.16)
28.21% 25.13% 23.13%
</TABLE>
The consolidated balance sheet as of July 31, 1995 and 1994 included the
following tax effects of cumulative temporary differences:
<PAGE>
<TABLE>
<CAPTION>
1995 1994
Assets Liabilities Assets Liabilities
<S> <C> <S><C> <C> <S><C>
Depreciation $ - $1,552,223 $ - $1,768,521
Deferred compensation 689,893 - 680,062 -
Postretirement benefits 218,406 - 131,535 -
Trade promotions and 179,662 - 223,880 -
advertising
Accrued expenses 377,368 - 330,754 -
Foreign tax credits 363,685 - - -
Other 207,533 - 78,911 -
</TABLE>
$2,036,547 $1,552,223 $1,445,142 $1,768,521
NOTE 5 - DEFERRED COMPENSATION
The Company maintains a deferred compensation plan which permits directors
and certain management employees to defer portions of their compensation
and earn a guaranteed interest rate on the deferred amounts. The
compensation, which has been deferred since the plan's inception, has been
accrued as well as interest thereon. The Company has purchased whole life
insurance contracts on some participants to partially fund the plan.
<PAGE>
Notes to Consolidated Financial Statements
NOTE 6 - STOCKHOLDERS' EQUITY
On December 13, 1994, the stockholders of the Company approved an
amendment to the Company's Certificate of Incorporation authorizing
30,000,000 shares of a new class of common stock, par value $.10, which
has been designated as Class A Common Stock, in addition to the currently
authorized 15,000,000 shares of Common Stock and 7,000,000 shares of Class
B Stock, each with a par value of $.10. There are no Class A shares
currently outstanding.
The Common Stock and Class B Stock are equal, on a per share basis, in all
respects except as to voting rights, conversion rights, cash dividends and
stock splits or stock dividends. The Class A Common Stock is equal, on a
per share basis, in all respects, to the Common Stock except as to voting
rights and stock splits or stock dividends. In the case of voting rights,
Common Stock is entitled to one vote per share and Class B Stock is
entitled to ten votes per share, while Class A Common Stock generally has
no voting rights. Common Stock and Class A Common Stock have no
conversion rights. Class B Stock is convertible on a share-for-share
basis into Common Stock at any time and is subject to mandatory conversion
under certain circumstances.
Common Stock is entitled to cash dividends, as and when declared or paid,
equal to 133 1/3% on a per share basis of the cash dividend paid on Class
B Stock. Class A Common Stock is entitled to cash dividends on a per share
basis equal to the cash dividend on Common Stock. Additionally, while shares of
Common Stock, Class A Common Stock and Class B Stock are outstanding, the
sum of the per share cash dividend paid on shares of Common Stock and
Class A Common Stock, must be equal to at least 133 1/3% of the sum of the
per share cash dividend paid on Class B Stock and Class A Common Stock.
See Note 3 regarding dividend restrictions.
Shares of Common Stock, Class A Common Stock and Class B Stock are equal
in respect of all rights to dividends (other than cash) and distributions
in the form of stock or other property (including stock dividends and
split-ups) in each case in the same ratio except in the case of a Special
Stock Dividend. The Special Stock Dividend, which can be issued only
once, is either a dividend of one share of Class A Common Stock for each
share of Common Stock and Class B Stock outstanding or a recapitalization,
in which half of each outstanding share of Common Stock and Class B Stock
would be converted into a half share of Class A Common Stock.
All per share amounts included in the financial statements and notes
reflect the dilutive effect of all common stock equivalents. See Note 7
for information regarding common stock equivalents.
The following reflects the changes in treasury stock (common) over the
last three years:
<TABLE>
Shares Amount
<S> <C> <C> <C> <C> <C>
Balance, July 31, 1992 159,881 $1,699,602
Purchased during fiscal 1993 30,675 668,205
<S> <C> <C> <C> <C> <C>
Balance, July 31, 1993 190,556 2,367,807
Purchased during fiscal 1994 91,190 1,895,364
Reissued during fiscal 1994 (50) (602)
<S> <C> <C> <C> <C> <C>
Balance, July 31, 1994 281,696 4,262,569
Purchased during fiscal 1995 50,500 825,475
<S> <C> <C> <C> <C> <C>
Balance, July 31, 1995 332,196 $5,088,044
</TABLE>
<PAGE>
NOTE 7 - STOCK OPTION PLANS
The Company maintained two stock option plans, the 1988 Option Plan and
the 1981 Option Plan. Under the 1988 Option Plan, a total of 312,500
shares of Common Stock and 312,500 stock appreciation rights were made
available for issuance. No stock appreciation rights were granted. The
options are exercisable one year after the date granted. The plan
expires on June 8, 1998.
The options available under the 1981 Option Plan were exercisable one
year after the grant by employees who have been employed for at least
three years; however, initially only 50% of the options could be
exercised without restriction. The balance of the options were
exercisable upon attainment of certain earnings levels. An earnings
level was attained in fiscal year 1986 and subsequent years that allowed
for exercise of another 25% of the options. Consequently, 75% of the
total outstanding options were considered common stock equivalents
through July 31, 1994. The remaining 25% of the options expired during
fiscal 1994. The plan expired on October 31, 1991.
<PAGE>
Notes to Consolidated Financial Statements
NOTE 7 - STOCK OPTION PLANS (Continued)
A summary of option transactions under the plans follows:
<TABLE>
<CAPTION>
1981 Option Plan 1988 Option Plan
Number of Shares Number of Shares
(Weighted Average Option Price) (Weighted Average Option Price)
1995 1994 1993 1995 1994 1993
<S> <C> <S> <C> <C> <C> <C> <C>
Outstanding, - 61,150 85,919 138,659 158,785 162,872
<S> <C> <C> <C> <C> <C>
Beginning of Year - $(10.80) $(10.80) $(19.61) $(19.17) $(18.96)
<S> <C> <C> <C>
Granted - - - 197,250 4,000 5,000
<S> <C> <C> <C>
- - - $(19.22) $(23.00) $(22.38)
<S> <C> <C> <S> <C> <C>
Exercised - 29,515 20,882 - 21,126 7,213
<S> <C> <C> <S><C> <C>
- $(10.80) $(10.80) - $(17.05) $(17.51)
<S> <C> <S> <C> <C> <C> <C> <C>
Canceled/terminated - 31,635 3,887 68,500 3,000 1,874
<S> <C> <C> <C> <C> <C>
- $(10.80) $(10.80) $(22.21) $(19.00) $(15.60)
<S> <C> <S> <C> <C> <C> <C>
Outstanding, - - 61,150 267,409 138,659 158,785
<S> <C> <C> <C> <C>
End of Year - - $(10.80) $(18.66) $(19.61) $(19.17)
</TABLE>
The company has reserved 5,520 shares of Common Stock for future grants
and issuances under the 1988 Option Plan.
As of July 31, 1995, a total of 267,409 options are exercisable under the
1988 Option Plan.
<TABLE>
<CAPTION>
Combined Plans
Number of Shares
(Weighted Average Option Price)
1995 1994 1993
<S> <C> <S> <C> <C> <C>
Outstanding, Beginning of Year 138,659 219,935 248,791
<C> <C> <C>
$(19.61) $(16.84) $(16.14)
<S> <C> <C> <C>
Granted 197,250 4,000 5,000
<C> <C> <C>
$(19.22) $(23.00) $(22.38)
<S> <C> <C>
Exercised - 50,641 28,095
- $(13.41) $(12.39)
<S> <C> <C> <C> <C>
Canceled/terminated 68,500 34,635 5,761
$(22.21) $(11.51) $(12.36)
<S> <C> <S> <C> <C> <C>
Outstanding, End of Year 267,409 138,659 219,935
$(18.66) $(19.61) $(16.84)
</TABLE>
NOTE 8 - EMPLOYEE BENEFIT PLANS
The Company and its subsidiaries have defined benefit pension plans for
eligible salaried and hourly employees. Benefits are based on a formula
of years of credited service and levels of compensation or stated amounts
for each year of credited service. The assets of these plans are invested
in various high quality marketable securities.
<PAGE>
Notes to Consolidated Financial Statements
NOTE 8 - EMPLOYEE BENEFIT PLANS (Continued)
The net periodic pension cost for the years ended July 31, 1995, 1994 and
1993 consists of the following:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost $326,650 $325,626 $308,012
Interest cost on projected benefit
obligations 384,901 358,027 325,735
(Earnings) losses on plan assets (836,171) 80,058 (641,108)
Net amortization and deferral 495,586 (422,948) 344,700
Net pension cost $370,966 $340,763 $337,339
</TABLE>
<TABLE>
<CAPTION>
The funded status of the plans at July 31 is as follows:
1995 1994
Actuarial Present Value of Benefit
Obligations
Accumulated benefit obligations
<S> <C> <C>
Vested $4,076,780 $3,623,589
Nonvested 491,222 337,493
Total Accumulated Benefit Obligations $4,568,002 $3,961,082
<S> <C> <C>
Projected benefit obligations $5,989,916 $5,532,033
Plan Assets at Fair Value 5,334,851 4,426,791
Deficiency of plan assets over projected
benefit obligations (655,065) (1,105,242)
Unrecognized net (gain) loss (197,423) 317,405
Unrecognized prior service cost 614,402 691,721
Unrecognized net excess plan assets as of
August 1, 1987 being recognized
principally over 21 years (344,424) (371,048)
Adjustment required to recognize minimum (183,547) (190,784)
liability
Accrued pension included in
Noncurrent liabilities - other $ (766,057) $ (657,948)
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
NOTE 8 - EMPLOYEE BENEFIT PLANS (Continued)
Assumptions used in the previous calculations are as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Discount rate 7.25% 7.25%
Rate of increase in compensation
levels 5.00% 5.00%
Long-term expected rate of return on
assets 8.00% 8.00%
</TABLE>
The Company has funded the plans based upon actuarially determined
contributions that take into account the amount deductible for income tax
purposes and the minimum contribution required under the Employee
Retirement Income Security Act of 1974 (ERISA), as amended.
For the years ended July 31, 1995, 1994 and 1993, the Company maintained a
profit sharing/401(k) savings plan under which the Company matches a
portion of employee contributions. The plan is available to essentially
all employees who have completed one year of continuous service and are at
least 21 years of age. Total contributions by the Company for the years
ended July 31, 1995, 1994 and 1993 were $73,504, $74,476 and $74,767,
respectively.
Postretirement Benefits
In addition to providing pension benefits, the Company provides certain
medical benefits, until a participant attains age 65, to domestic salaried
employees who elect early retirement and meet minimum age, service and
other requirements. The Company reserves the right to amend or terminate
this plan at any time. The plan is contributory and contains cost-sharing
features such as deductibles and coinsurance.
SFAS No. 106 "Employers" Accounting for Postretirement Benefits Other Than
Pensions requires, among other things, the accrual of retirement benefit
costs over the active service period of employees to the date of full
eligibility for these benefits. The new standard requires that the
accumulated plan benefit obligation existing at the date of adoption
(transition obligation) either be recognized immediately or deferred and
amortized over future periods.
Effective August 1, 1993 the Company adopted the new standard and is
amortizing the resulting transition obligation over 20 years. The
adoption of this standard does not have a material effect on the
consolidated results of operations or financial position of the Company.
NOTE 9 - ACQUISITIONS
The excess of the Company's original investment over the fair value of the
net assets acquired at the date of acquisition is being amortized by the
straight-line method over 40 years.
<PAGE>
Notes to Consolidated Financial Statements
NOTE 10 - LEASES
The Company's mining operations are conducted on leased and owned
property. These leases generally provide the Company with the right to
mine as long as the Company continues to pay a minimum monthly rental,
which is applied against the per ton royalty when the property is mined.
The Company leases its corporate offices (approximately 20,000 square
feet) in Chicago, Illinois and additional office facilities in Europe.
The office space in Chicago is subject to leases expiring in 2008. Office
facilities in Europe are leased on a year-to-year basis.
In addition, the Company leases vehicles, data processing and other office
equipment. In most cases, the Company expects that, in the normal course
of business, leases will be renewed or replaced by other leases.
The following is a schedule by year of future minimum rental requirements
under operating leases that have initial or remaining noncancelable lease
terms in excess of one year as of July 31, 1995:
<TABLE>
<CAPTION>
Year Ending July 31:
<C> <C>
1996 $ 3,453,000
1997 2,483,000
1998 1,578,000
1999 1,185,000
2000 773,000
Later years 3,850,000
<C>
$13,322,000
</TABLE>
The following schedule shows the composition of total rental expense for
all operating leases, including those with terms of one month or less
which were not renewed:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Transportation equipment $3,439,000 $2,710,000 $2,758,000
Office facilities 373,000 184,000 190,000
Mining properties
Minimum 180,000 196,000 193,000
Contingent 162,000 183,000 180,000
Other 649,000 565,000 358,000
$4,803,000 $3,838,000 $3,679,000
</TABLE>
Notes to Consolidated Financial Statements
NOTE 11 - OTHER CASH FLOW INFORMATION
Cash payments for interest and income taxes were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Interest $1,750,054 $1,390,014 $1,534,795
<S> <C> <C> <C>
Income Taxes $4,013,110 $5,624,987 $3,528,503
</TABLE>
NOTE 12 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
A summary of selected information for 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
Fiscal 1995 Quarter Ended
(Thousands Except per Share Amounts)
Oct. 31 Jan. 31 April 30 July 31 Total
<S> <C> <C> <C> <C> <C>
Net Sales $39,025 $40,157 $37,179 $36,538 $152,899
Gross Profit 12,394 12,168 10,328 9,741 44,631
Net Income 2,819 2,573 1,540 1,071 8,003
Net Income Per Share $ 0.41 $ 0.37 $ 0.22 $ 0.15 $ 1.15
</TABLE>
<TABLE>
<CAPTION>
Fiscal 1994 Quarter Ended
(Thousands Except per Share Amounts)
Oct. 31 Jan. 31 April 30 July 31 Total
<S> <C> <C> <C> <C> <C>
Net Sales $35,187 $39,178 $39,380 $33,402 $147,147
Gross Profit 11,362 12,377 11,381 9,570 44,690
Net Income 2,575 3,251 2,356 1,670 9,852
Net Income Per Share $ .37 $ .46 $ .34 $ .24 $ 1.41
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Stockholders and Board of Directors
Oil-Dri Corporation of America
We have audited the consolidated statements of financial position of
OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES as of July 31, 1995
and 1994, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the
period ended July 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES as of July 31, 1995
and 1994, and the results of their operations and their cash flows for
each of the three years in the period ended July 31, 1995, in
conformity with generally accepted accounting principles.
BLACKMAN KALLICK BARTELSTEIN, LLP
Chicago, Illinois
August 25, 1995
<PAGE>
Common Stock
On December 20, 1993, the Common Stock of the Company began trading on the
New York Stock Exchange under the ticker symbol ODC. Prior to December
20, 1993, the Common Stock was quoted in the NASDAQ National Market System
under the ticker symbol OILC. The following table sets forth the closing
high and low prices as quoted on the New York Stock Exchange and the
NASDAQ National Market System for the period indicated. NASDAQ National
Market System prices reflect interdealer prices without retail mark-up,
mark-down or commissions, and may not necessarily reflect actual
transactions.
The number of holders of record of Common Stock on July 31, 1995 was 1,317.
There is no established public trading market for the Class B Stock.
The number of holders of record of Class B Stock on July 31, 1995 was 22.
<TABLE>
<CAPTION>
Dividends
Amount Per Share
Date Paid Common Class B
<S> <C> <C> <C>
Quarterly 09/16/94 $0.07 $0.0525
Quarterly 12/16/94 $0.08 $0.06
Quarterly 03/17/95 $0.08 $0.06
Quarterly 06/16/95 $0.08 $0.06
</TABLE>
<TABLE>
<CAPTION>
Market
Prices
Fiscal 1995 Closing Prices
High Low
<C> <S> <C> <C>
1st Quarter 20 17 3/8
2nd Quarter 19 1/8 16 3/4
3rd Quarter 18 3/8 15 7/8
4th Quarter 16 7/8 14 1/8
</TABLE>
<TABLE>
<CAPTION>
Market
Prices
Fiscal 1994 Closing Prices
High Low
<C> <S> <C> <C>
1st Quarter 25 19 3/4
2nd Quarter 23 3/8 18 3/4
3rd Quarter 23 1/8 19 3/8
4th Quarter 21 1/2 17 7/8
</TABLE>
<PAGE>
Board of Directors
Officers
Senior Management
Board of Directors
Richard M. Jaffee, Chairman and Chief Executive Officer
Daniel S. Jaffee, President and Chief Operating Officer
Robert D. Jaffee, Chairman - Amco Corporation
J. Steven Cole, President - Cole & Associates & Sav-A-Life Systems, Inc.
Norman B. Gershon, Vice-President
Edgar D. Jannotta, Senior Partner - William Blair & Company
Joseph C. Miller, Vice-Chairman
Paul J. Miller, Partner - Sonnenschein Nath & Rosenthal
Haydn H. Murray, Professor Emeritus of Geology - Indiana University
Allan H. Selig, President - Milwaukee Brewers Baseball Club, Inc., Selig
Executive Leasing, Inc., Chairman of the Executive Council of Major League
Baseball
Bruce H. Sone, Vice-President
Corporate Officers
Richard M. Jaffee, Chairman and Chief Executive Officer
Daniel S. Jaffee, President and Chief Operating Officer
Joseph C. Miller, Vice-Chairman
Herbert V. Pomerantz, Senior Vice-President - Agrisorbents and Pure-Flo
Product Groups and Research & Development
Richard V. Hardin, Group Vice-President - Technology
Bruce H. Sone, Vice-President - Consumer Products - Mass Merchandising
James T. Davis, Vice-President - Manufacturing
Norman B. Gershon, Vice-President - International Operations, Managing
Director - Oil-Dri S.A.
Louis T. Bland, Jr., Secretary
Donald J. Deegan, Director - Finance & Accounting
Richard L. Pietrowski, Treasurer
Albert L. Swerdlik, Secretary Emeritus
Heidi M. Jaffee, Assistant Secretary
Senior Management
Elwyn J. Allbritton, Vice-President - Operational Development
Charles M. Boland, General Manager - Agrisorbents Product Group
Wade R. Bradley, General Manager - Industrial & Environmental Product Group
Karen Jaffee Cofsky, Manager - Human Resources
Thomas F. Cofsky, General Manager - Logistics, Quality and Service
Sam J. Colello, Director - Information Systems
B. Fielden Fraley, General Manager - Pure-Flo Product Group
Fred G. Heivilin, Vice-President - Raw Materials Development
Richard D. Johnsonbaugh, Eastern Regional Manager - Manufacturing
Steven M. Levy, General Manager - Consumer Products Group
William F. Moll, Vice-President - Research & Development
Dennis E. Peterson, President - Oil-Dri Transportation Company
V.R. Roskam, Vice-President - Agrisorbents Product Group
William O. Thompson, Western Regional Manager - Manufacturing
<PAGE>
Corporate Headquarters
Oil-Dri Corporation of America
410 North Michigan Avenue, Suite 400
Chicago, Illinois 60611
(312) 321-1515
Listing Ticker Symbol
New York Stock Exchange ODC
Registrar/Transfer Agent
Harris Trust and Savings Bank
311 West Monroe
Chicago, Illinois 60606
(312)461-3324
Independent Public Accountants
Blackman Kallick Bartelstein, LLP
Legal Counsel
Sonnenschein Nath & Rosenthal
Subsidiaries
Oil-Dri Corporation of Georgia Oil-Dri (U.K.) Limited
Georgia United Kingdom
Oil-Dri Production Company Oil-Dri Corporation of Nevada
Mississippi/Oregon Nevada
Oil-Dri Transportation Company Blue Mountain Production Company
Georgia Mississippi
Oil-Dri S.A. Favorite Products Company, Ltd.
Switzerland Quebec, Canada
<PAGE>
EXHIBIT 22
SUBSIDIARIES OF THE COMPANY
State or Country
Subsidiary of Incorporation
Oil-Dri Corporation of Georgia Georgia
Oil-Dri Production Company Mississippi
Oil-Dri Transportation Company Delaware
Oil-Dri, S.A Switzerland
Favorite Products Company, Ltd. Canada
Blue Mountain Production Co. Mississippi
Oil-Dri (U.K.) Limited United Kingdom
Ochlocknee Holding Co., S.A. Spain
Ochlocknee Mining Co., S.A. Spain
Oil-Dri Corporation of Nevada Nevada
<PAGE>
EXHIBIT 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of
our reports and to all references to our Firm included in or by
incorporation by reference made a part of the Annual Report on Form
10-K of Oil-Dri Corporation of America for the fiscal year ended July
31, 1995 and the Registration Statement of Form S-8 relating to the
Oil-Dri Corporation of America Stock Option Plan.
October 20, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<CASH> 8,829,667
<SECURITIES> 2,332,665
<RECEIVABLES> 21,529,168
<ALLOWANCES> (180,602)
<INVENTORY> 10,917,099
<CURRENT-ASSETS> 48,745,166
<PP&E> 106,957,911
<DEPRECIATION> (47,498,516)
<TOTAL-ASSETS> 116,987,683
<CURRENT-LIABILITIES> 15,670,848
<BONDS> 20,422,265
<COMMON> 723,352
0
0
<OTHER-SE> 77,615,031
<TOTAL-LIABILITY-AND-EQUITY> 116,987,683
<SALES> 152,899,109
<TOTAL-REVENUES> 152,899,109
<CGS> 108,268,431
<TOTAL-COSTS> 108,268,431
<OTHER-EXPENSES> 31,680,574
<LOSS-PROVISION> 51,013
<INTEREST-EXPENSE> 1,751,666
<INCOME-PRETAX> 11,147,425
<INCOME-TAX> 3,144,597
<INCOME-CONTINUING> 8,002,828
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,002,828
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 1.15
</TABLE>
