Oil-Dri Corporation of America (ODC) 13 Oct 232023 Q4 Earnings call transcript

Thank you for standing by, and welcome to Oil-Dri Corporation of America Q4 and Fiscal Year 2023 earnings discussion. [Operator Instructions] I would now like to hand the call over to Chairman, President, CEO, Dan Jaffee. Please go ahead.

Thank you very much, and welcome, everybody.

First, we're in virtual mode, so I want to introduce who's all on the various lines ready to answer your questions. those portal. getting for you into the Thank In VP of Kreh, CFO Aaron Christiansen, and CIO, Operations; advance, Susan Dr. and provision. VP Wade Relations, of Robey, Counsel; but Lamson, through Retail not Chris us of David who Amlan Laura VP of Controller; safe Garber, our Agriculture will Group and Atkinson, VP, least, VP walk and and Leslie Strategic Investor Partnerships of President Corporate International; Wholesale; harbor General Scheland, last of Manager our

today's On affect periods. you call, may you, to those Dan, back our ask everyone. Thank performance. we a for company's in Thank our may future our joining welcome, statements evaluating those and SEC factors stock. forward-looking Dan, in factors, periods In future highlight the review it in the consider number investment Actual I'm comments trends regarding that over release differ. company's comments and any contain you you. us. in evaluating in uncertainties We and of press and filings, may Oil-Dri important performance materially results and in that turning risk

those saw scorecards And to just effort like from sure in of grandfather at due on mean, winning all We've The and we me concluded outstanding things on-time And been of XXrd recognition. and really nearly teammates the is went dad, it results, them what a the and very on to as before make to you to impossible into I collective fourth and way performance want mind XXX just generation. Susan, all customer year exciting. just learned, for to the like fiscal our a my the upgrade, scores make we're and -- the is our fiscal very recently, good. ERP the that's guys the one lessons deliveries the some proud of comments. we're I one accumulated We I over proper of is carry to -- general kudos to to Sounds team near moving which Oil-Dri next And I'd which turn record our my of 'XX. our we through perfect flawless is I in give received almost to was do. globally. top, quarter, game, plenty

to so had happen championship to the we And just year of those all deliver delivered. things

we're momentum, growth confident have lap that as to you'll going still obviously have best we've new for -- a we're I of that we and results of the that forward. what but lately And yet that. the these come, in to think fiscal year lot ever you entering have the move and very with of fiscal best fact lot a done mindful us hear we're 'XX, while good plans believe to we is we all is the that had place And

our turn Susan, I'll to you, into over you. hear So then will Susan, Q&A. And get we we and don't it

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increase is increase reported real was But highlights. the And X XX% up like over up a us the record million. year quarter an a the you million And helped XX%. it's quarter night. first to at to long. yourself million was fourth connected, up very what happy $XX.X year, exciting. I'll events. fourth you finish the back obviously, out nonrecurring What me, net But $XXX over million open you. floor for sales, in I'm go, the that was the all of the of the some Susan, time, and $XX.X happened And story we the line $XXX,XXX, in XXX%, that I'll mic I to know if $XXX and prior for up the bottom really cover XXX% back get turn to over year to

noncash an benefit very we was plan, an plan then charge and 'XX, replaced XXX(k). our with charge pension fiscal for is defined defined had remember it in in which back impairment You'll really generous contribution and a finally our future plan good we accounting closed our the

So when you're ago XXX a those events, $XX out you from increase. at a X really this what $XX an XXX% from million that's is an XXX million and nonrecurring apples-to-apples standpoint, year back year looking increase to

we Obviously, segment. report by

the and very much year-to-date our Chris XX% and XX. were up XX% got saw the their group and and his the and income XX% XXX%. up over segment then then retail And You've what XX% wholesale company a up team. and on sales similar business-to-business were by quarter, Lamson and XX% XX% and results robust to in operating led Sales

Now charge if -- back in, was X only team you he up that up impairment his and he only XXX%. put

the release read can yourself. news guys You

and great that, So appreciate don't have our on of a questions to those go of handle you team need I any me got questions. investors. to hand lot through it. the we from We've more

into to let's going about. hear I'm from Leslie, the you, hear over back it So what us to our and get Q&A investors to turn and would like

Okay.

if just on Sounds Otherwise, great. are know. you the back call, we're going to Susan, continue. us let

timing Will Investing. the What to he the Amlan Our fiscal is Robert missed there comes the 'XX? Amlan, issues for first would is, What quarter respect you question with that question fourth that were shipments current his say first Center all prospects shortfall. have include looked are Performance from affected And like from last the the in without quarter the and Smith, quarter the quarter? those issues? for

take that? can please Wade, . you

Yes. for thank the Robert, Thank and question. you, you, Leslie,

try number questions pretty a hit I'll of all quickly. to in there. of got You've them

to don't in the see Amlan space, a quarter-to-quarter. of respect we business lot seasonality our with nutrition So

areas our can sometimes or product that periodically and month-to-month American how as us volatility sometimes than to continue of in we're our pretty issues, more itself would have it We typically where in comes So cause timing long to all business question, world a Asian to show. grow Latin terms noted or we're typically, quarter-to-quarter have smooth timing in participating. markets logistics to concern the the that to get takes do we markets as see you've we your in

And times basis. so on has our quarter at an individual generally that numbers affected

Going the forward, next would we're and we move business previous year, that certainly the pick quarter quarter the in fourth that them we our and as anything forward. in of to expect continues to missed up show seeing

that your us. all believe I key to again, you question of So thank for covered And questions. I've

Perfect. Thank you.

going So combine advertising. X regarding questions next, we're to

How Smith. first you an for increase Robert The of budgeting are 'XX? What were is expenses from quarter? fourth in much the advertising fiscal

second actress. an also it relates you are to celebrity to our What over turn Chris advertising. Star, investor I'm campaign individual the part or And results Lamson seeing to Ethan from recent that from answer. the and meeting going with most to then Are return prominent And exceeding Pride expectations is for on a endorsement Cat’s results investment. the

Robert and thanks advertising The year, has and looking consumer Yes. year relative what our ahead been the this our of questions. to dollars. Ethan, for and next in majority spend overwhelming the flow to advertising of past the the business

been it. for I'm And reasons notes this these know that we spend in back X/X And there were why fiscal our from answering I at yes, roughly most I've that's QX. fiscal calls. look of for past signaling did total X spend calls, year So it. previous of I on

and knew stable really the than would chain full we and wanted it the was really to better stable. alluded One we that now. supply We're shelves service our advertise levels to be nailing

really for now which moving Litter ad Good the campaign, were is getting So and we been go, done we campaigns the from emphasizing is we've lightweight, And want basically our years the ready of in were air. the and to to advertise and our that to content on benefits for full can several shelves. which to we last hitting

we of third litter the year we of reason were support the fiscal for 'XX. into out that And launched was the fiscal it gate wanting obviously to end at the very and and antibacterial

very of Looking going that full evenly be forward around but reasons it in spend into was it much it articulated 'XX, now present X those year QX. things year, for the have in the spread X modest fiscal forward. will in the will are I on was loaded All more past than we why uptick

that think I So Robert's question. hits

and well and fun and to to we content say, the referring play candidly looking ROIs with the these dynamic. like for at constantly it's to and well did investments category extremely There -- highest experts celebrities and drive overall, influencers mix Other influencers. content the in of our with pretty us. do ROIs influencers but you're us. I in would We're Relative influencers terms time, for real --

So probably lean expect up to say I'd expect keep to those experts. category into influencers, us us

the in have question of been plant from recently next shutdowns U.S. swine comes The There poultry numerous Bair. Great. and announcements John

out have Since shipments and impact quarter in efforts? sales release, as to to the our any China of the domestic Asia noted sales end, America, health causing in sales health softness continuing improve. press Wade? animal seen timing regions, in your trends animal you Latin Backing

John, And question. that Thank you, Leslie. thank again, you, for

albeit last with yes, that upon sales world our the question you of depending part animal continuing or although area. the was the me that is start And differential to the answer And trends Let question health asked. improve.

to continuing animal as we on based the improve to continue impacts to for those regional economies, continuing and well in around effects pandemic our are So that and production of as in industry are the markets. products the we to opportunity see world lingering the see grow improve but

scrutiny profitability products the that don't longer bit these is because In penetrate to a more in expect and maybe we the we're been time like some U.S. U.S., look portfolio, depression and of the markets, little at new as a producers. begin some a a our new yes, largest lead sales. of really among they new significant commercial causes integrators with for there has What us little But and impact. couple of

and good we work see growth, to the world. continue good U.S. around will the but it, good specifically through We and in adoption testing,

a great all adoption growth we of persist markets that So interest in we yes, in bit, travel to that continue but lots see our continuing customers. to serving. visit conditions as and the we're products we and little around are hear new and and

you. Thank

I The have that are Ethan he question Aaron if asks Christiansen extent to your comes going handle And increase, to to and all? Okay. we're think what next at question. continuing from costs Star,

costs X the do Leslie, I'll to thank answer Unfortunately, continue quickly. rise. it. to cite I'm thanks things Ethan for you and happy question.

employment The and our total the index, peaked have total competitive months first is ECI in recent last right be in find compensation for X.X% as months. high up continues to X.X% are to or as compensation over national ways now, teammates. cost XX the costs Oil-Dri

cost X that's So key input.

area another The and their battle the index consumer our row. CPI. Many a in of we're months suppliers cost costs to price is X bases continuing materials Second, on inputs. material the up cost That's peg of material inputs. is in rising

Dan put reality depreciation is Much book as an go third, mathematically our earlier, the natural base. multiyear to is capital our than other the is, is we're further cost us last And the the The regulation was it and ongoing Ethan, aging impossible of our remind mining our our is It and maintain the asset now those for. of company, it as Oil-Dri strategy significantly asset factories. environmental and assets base moving both on infrastructure. and continue to alluded replace repair a and initially Ethan well expense to from through and Mining replaced capital for costs being deeper to rise, repair through the mention milling of a audience, of what I'll cost higher has base.

answered I hope Ethan. your So I question,

Aaron. to to in for increase going dramatic turn common asked from accounts shares, diluted I'm is over Robert David and what he The question Atkinson. next the Thanks, it Smith, and

see reconciliation program to those There support with the Class notice converted And been Thank B being #X although shares years. which I you'll you, our potential other to X consistent restricted an impact extremely the of we common. Robert, would you, shares we is to and added numbers those stock Leslie, the XX-K. per included you in thank earnings been share no of the that on new point unlikely, footnote like all to for have note question. prior has to than can issuances of What

Okay. Thank you.

Will going discuss to your in We there going will budget product? And product is EPA it to products overall new Or products. new the you component year? last question the new year? receive stand-alone be the about the because what to so, I'm R&D this question, approval really fiscal with current into why? be which antibacterial incorporated coming enhance for current Robert new when offerings did will is, to Bair's going Smith this And as asks, also your which Are year? combine Did other a move if meaningfully efforts. R&D this some John additive talk your will for efforts. decline marketing combine product? solely I into I'm on. read, we're marketed our

So going Wade, question, it Chris turn this the antibacterial have of about first start part he litter. cat do our I'm off? the you to first, will to Wade and answer new to talk over want then to

product you, And Thank Leslie. thank look our we contract and R&D and as research we development. We center at that -- Yes. break we Robert. innovation again, do efforts R&D add organizations buckets, would really our do you, we X at call in discovery our traditional what true then

directly do validate and performance at of second with encourage customer work our it regional products our validation or help that adoption. customers either we element of is really the The universities field that

see of or research tend a years. validation we expensive that either the and within across year discovery a that, As significant result be Because, we R&D a the work. field do pretty lot obviously, volatility more than to efforts can in

are are we're that a sometimes we be spend. products at at evaluated actually as market. with evaluations efficient but validations selling our Oftentimes, we the to the direct but introducing new field discounted the universities, customers. product price, were us as field the lot product sorts allow I those really These of move being in a Those we with do mentioned, focusing more both into as market, we validation also Currently, trials. have customer X as on into selling

the bit of R&D expense it R&D be in really our you existing X products causes would or rollout that So efficient to the given That's what And again, the some of normally we where little the year. offsets in spend allowing it's current us see. into causing volatility. a are in marketplace, us more the

turn With it Okay. Chris. that, to I'll over

Wade, thanks Thanks, John. and for the question,

the back launch. just and quick on elaborate pull So really I'll

So at clumping 'XX, antibacterial the Oil-Dri litter. launched Pride very we Cat’s end of fiscal

kills The our in sanitary further obviously, broader storage takes first to home and and really to of benefit further EPA-approved litter [ control tracking relative much then the you here -- antibacterial helps effectiveness high XX.X% The the not home. and odor this of bacteria, ] the helps the nasties, clay, only U.S. this obviously the if will, and very cat consumer the through odor-causing

I it. are and about it, can about excited retailers we're And tell you, excited

customers which where not up and is down and distribution Pride taken and Cat’s Southeast, East it virtually So distribution particularly Coast strong, only the the is distribution. but into have all of just incremental into our

really incremental to timing, That the and out of the against We launching it shelf insightful back versus or to space everything an wanted build highlight come as but to I'll category. it an it question new use against was around your the question benefit item, out gate base build launching to -- deliberate. choice opportunity on a our

deal. benefit. We against innovating further We think are, this it's we speak, as a big

think big deal. a Our customers it's

early perspective all led of research also on but we're it, very up to both the Our an positive. some consumer returns from takeaway it,

times underway. excited a you, approval, I benefit, parallel is we're I these quite states XX thing and the long further go returns point approval good tell ago, builds development We're a and really It around can be moat getting bad have about is very nice for path. you approval is through here, which about will excited us you the the driving benefit. moat not EPA a thing. build this create you their all on and which, each than I then more we'll this which, long, process We initial received like of Once also things. at months and federal federal a said, much we're well, around But our as the the gain said, item. the like lead a

Thanks, Chris.

producers or The you question from orders he poultry more is and Ethan comes answer X swine. paddle And can towards significant from please progress Star, or getting large Okay. that? Wade, making asks, Amlan of

thank is Leslie. simple Thanks, again, yes. you, Ethan. Yes. And answer The

several If largest again, already in the a recent American market the North is you key of continuing with market. That accounts the to here in North in the penetration, in to integrators look selling grow America. we're of America, at North number

we portfolio launch United to So as there in States. great our progress the continue here

we those of alternative into As our you more in poultry. look continue markets longer, us. around they're growth the been to a so species and bit expanded little have to world, little bit see we established for sales a But

now the replicated And dairy, that in sector. in market in market, market. Latin Asia aluminum beef specifically So seeing America, some in largest cattle actually dairy being the in our we're cattle the in of the are in customers

ruminant some in largest of species but another towards new operations the and cattle in we're testing moving specifically So seeing adoption Brazil. America, Latin of

to about continue that see So in us are of our the markets. and grow applicability of that, products we're them participation broad excited multi-species to solutions application the these our really allowing in

the So see and in to this progress continued way coming in expect absolutely, year. we Yes,

Right.

from says which recent Freight Next shipping Street China costs Coast routes. a highlight Ocean to a Rate question comes and John in Wall the significant drop Bair, among in Journal headlines Pressures, he article other East

So your to seeing are benefit beginning in shipping costs? or any see you

I'm going to over Aaron to it to answer. turn

happy to question. answer I'm the John, Yes,

an me inflating still talk we're stabilized. down and about come inputs, has definitely cost and cost we're earlier export both struggling domestic heard area seeing where is relief. You with where this Freight,

definitely times, a our we're the challenges most place, back in to take the our earlier so if costs relief been meet seen be to where has to is Those lead We great and to and predictable the on-time advantage back where international are chain however, it during that are place able it. have to levels, time the not supply thankful seeing not Dan customers' to to of needs. became pre-pandemic. and reduction most but That alluded and inflated have to was more, lead been we allow as historical freight improvement us more in important, us service, extreme

you. Thank Great. Perfect.

working So is see your I line Susan, to -- am going now?

Okay.

Jaffee that? So to have Dan the numbers. It's you going the I'm remind to Robert and Dan, Please quarterly seasonality answer. next take question, about want do the from me Smith.

Yes. Good question.

some individual I in products. generally, of a seasonality is into take see lot account within that portfolio you there the seasonality think you diversified of there's our our when is business not what products. Obviously,

You've got early spring while reliant the the sell months, an the fall. use field on and do is the Pros the in in which winter Choice, ball so we usage, is really the predominant summer

You've fourth then their they Purification got our the business, Fluids Blue much when year. quarter our is biggest harvest which tied could be very the so of crop, to

deliver But net-net-net, what and which relatively we've range validates portfolio, which it always further tried value our diverse together, we're do. always to tried markets flat, when and across all again put a supply you that's is nice, to of applications. wide We've

just last be much see a which year, of we great heading new. lot are were they get the in was of time So business all pretty momentum and bentonite year, very, that in over to was very to course are some our year, fortunate some up, up, it a happened that down. calcium We last calcium a

you the business to really Clorox. your question that but mic, not -- So not could model. it you came I'm question. I've too, giving Aaron, that got But see I I'm obviously, just thank in happy that a up. you it there's about your take to take and into for take consolidated seasonality would have the one. enough not across

educated on you could -- And talk me actually, you but this. Chris, have guys to

a through security For from, is And is supply are meaning put chains shelf. ERP had releases they've them. they, cyber really There's their -- problems Clorox system. that and were problem lot with this doubt wondering sold cyber around it got havoc shrunk on put the you no their fact then their that up inventories -- have the where of of some news who question coming out those they've

seem even shelves seem and the that they fixed getting are And have mode. to to be playing were orders The catch-up problems. to Happy bare. they say their pretty back

be do I on They're what us? So customer. largest will our second the think impact

So first -- in and the going I'm be But is derail time by but August, peaks we the the it's important immaterial they'll our they're material, valleys, an It very generally not which slightly obviously, think I it be to what and hit difference. to might will us. the quarter, be hoping That's September for. quarter. October,

this. you and dig questions any certainly Leslie, question, good we to the as themselves they best cover So support do there of Clorox before wish out? and head I want are out other

from And one is, going operations next of this expenditures to talked Bair. I need capital there's upgrades over But his replacements to Aaron about... you or increase And question question last significant John or do for -- take just see any one the X we're know increase already years? plant

have to Aaron but about it. a talked going resounding I'm Have answer it do But the yes. Aaron. Yeah. is Aaron

answered to already level the cycle investments, also of already XX-year higher business investments. yes, It that and investments -- continuity to alluded are a key already we multiyear for. Dan midst Dan Yes. plans ways the it's message, X- planned spending We're plan alluded savings for a to growth and which for John. to overlap than of a earlier, resounding we very intelligent capital it looking is of it. a have is built I in it already intelligently But earlier historical.

already well and and aligned John. organizationally, planned yes, on So for

message and appreciate They And require be say, the want them as capital to replacing depreciation replace this received to go replace would much assets, to it's quality continue twice and twice just value. I these we that can and that "Look, much and And healthy. to charging be these we're customers had as I our want is were that easily out thank And historic to service the assets very they put XX so based to costs. them we're to add, quantity they that we it. on into able our costing to we've because want ago. years us XX they've us And well, very supply and

are and Obviously, the listening, you is customers everyone out customers thank my in all fiscal if much. time. I our with assuming are if of we're happy the very know this together. quarter, year. listening, XX, team quarter quarter, We're It I'm teleconference. after and So happy be our first with talking ends we much we'll to be and will F are, very which at first of 'XX. the next the I forward to look you October our

So very and until then, thank your safe, be you support. be much for healthy,

This concludes today's conference participating. for call. you Thank

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