Q3 2024 Oil-Dri Corporation of America Earnings Call Transcript
Key Points
- Oil-Dri Corp of America (ODC) achieved a record net income of $30.901 million through nine months, surpassing the previous fiscal year's record of $20.551 million.
- The company reported its 12th consecutive quarter of year-over-year sales growth, with consolidated net sales reaching $106.8 million, a 1% increase over the prior year.
- Gross profit for the third quarter increased by 10% to $30.1 million, with gross margins expanding to 28% from 26% in the prior year.
- The acquisition of Ultra Pet is expected to be accretive from day one, enhancing Oil-Dri's position in the rapidly growing crystal cat litter segment.
- Year-over-year cash and cash equivalents increased substantially from $29.7 million to $46.8 million, providing ample financial flexibility for future growth opportunities.
- Consolidated net sales growth was partially offset by lower volumes, indicating potential challenges in maintaining sales momentum.
- Domestic cost of goods sold per ton increased by 3%, driven by higher labor, repair, depreciation, and freight costs.
- Selling, general, and administrative expenses rose significantly by $6.7 million, reflecting higher compensation, advertising expenses, and transaction costs related to the Ultra Pet acquisition.
- Advertising expenses are expected to be higher for the full year of fiscal 2024 compared to fiscal 2023, indicating increased marketing costs.
- The integration of Ultra Pet will incur additional expenses during the fourth quarter of fiscal 2024, which may impact short-term profitability.
Good day, and thank you for standing by. Welcome to the third fiscal '24 earnings discussion. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speakers today, Dan Jaffee, President and CEO. Please go ahead.
Great. Thank you, and welcome, everybody.
With me today in a variety of different places through the miracle of modern science, we have Susan Kreh, CFO and CIO; Aaron Christiansen, VP of Operations; Wade Robey, VP of Ag and President of Amlan International; Chris Lamson, Group VP of Retail and Wholesale; Laura Scheland, Chief Legal Officer and Vice President and General Manager of the Consumer Products Division; Bruce Patsey, VP of our Fluids Purification Group; and Leslie Garber, Director of Investor Relations. And she will walk us through the Safe Harbor provision.
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