Oil-Dri Announces Record Sales and Gross Profit for the Third Quarter and First Nine-Months of Fiscal 2024

Core Insights - Oil-Dri Corporation reported record sales and gross profit for the third quarter of fiscal 2024, with net sales increasing by 1% to $106.8 million and gross profit rising by 10% to $30.1 million compared to the previous year [2][5][23]. Financial Performance - Consolidated net income attributable to Oil-Dri decreased by 9% to $7.8 million in the third quarter, while year-to-date net income increased by 75% to $30.9 million [4][8]. - Diluted earnings per share (EPS) for the third quarter was $1.07, down 14% from $1.24 in the prior year, but year-to-date diluted EPS increased by 65% to $4.26 [4][42]. - Selling, general and administrative (SG&A) expenses rose by 51% to $19.7 million in the third quarter, primarily due to increased compensation and advertising costs related to the acquisition of Ultra Pet Company [6][12]. Segment Performance - The Business to Business (B2B) Products Group saw revenues of $36.2 million, a 2% increase driven by higher prices and improved product mix, despite lower volumes [27]. - The Retail and Wholesale (R&W) Products Group's revenues reached $70.6 million, a 1% increase, supported by higher prices of domestic and co-packaged cat litter products [11][30]. - Operating income for the R&W Products Group increased by 1% to $10.9 million, attributed to higher prices and improved product mix [28][30]. Acquisition Details - Oil-Dri completed the acquisition of Ultra Pet Company for $46 million, which is expected to enhance its position in the cat litter market and contribute to earnings in the fourth quarter of fiscal 2024 [31][32]. - The integration of Ultra Pet is anticipated to be seamless, with financial results reported under the cat litter principal product within the R&W Products Group [32]. Market Trends - The increase in gross margins to 28% from 26% year-over-year was driven by higher selling prices and an improved product mix, marking seven consecutive quarters of gross margin expansion [23]. - The company noted a decline in sales from agricultural, animal health, and industrial & sports products, indicating challenges in those segments [5][27].