0001628280-25-044686
SEC filingRecord net sales, gross profit and net income driven by 11% revenue growth and margin expansion to 29.5%.
Oil-Dri Corporation of America describes itself as a leader in developing, manufacturing and/or marketing sorbent products. These products are principally produced from hydrated aluminosilicate minerals (Fuller's Earth), which the company surface mines on leased or owned land near its manufacturing facilities in Mississippi, Georgia, Illinois, and California. The company produces both absorbent and adsorbent products, including cat litter, floor absorbents, agricultural carriers, and purification media for oils.
Oil-Dri operates through two reportable segments derived from different customer groups. The Retail and Wholesale Products Group serves mass merchandisers, farm & fleet, drugstores, pet specialty, dollar stores, grocery, online retailers, co-packagers, and distributors of industrial/automotive and sports field products. The Business to Business Products Group serves processors and refiners of edible oils, renewable diesel, petroleum-based oils, biodiesel, as well as manufacturers of animal feed and agricultural chemicals, and distributors of animal health products. Revenue share by segment is not disclosed in the Business section.
Key branded cat litter products include Cat’s Pride and Jonny Cat, with Cat's Pride offering the first EPA-approved antibacterial cat litter. The acquisition of Ultra Pet added crystal cat litter under brands like Ultra, Litter Pearls, and Cat's Pride. Industrial products include Oil-Dri branded floor absorbents and synthetic sorbents. Sports products include Pro’s Choice line for field conditioning. B2B products feature Pure-Flo, Perform, Select, Metal-X, Metal-Z, and Ultra-Clear for fluids purification, as well as Agsorb and Verge for agricultural carriers. Animal health brands include Calibrin, Varium, NeoPrime, Sorbiam, Ambio P, and Ambio S.
Cat litter and retail products reach customers through independent food brokers, a direct sales force, and distribution to major retail channels including e-commerce. Industrial products are sold via industrial, auto parts, safety, and chemical distributors. B2B products are marketed by technical sales employees, distributors, and sales agents domestically and internationally. Walmart is a significant customer, representing 19% of fiscal 2025 net sales. No B2B customer exceeds 10% of total sales. Loss of any customer other than Walmart would not be materially adverse.
In the Retail segment, Oil-Dri faces six principal competitors, two for industrial/sports and four for cat litter, with one competitor also being a customer. The B2B segment has nine principal competitors. Competition is vigorous and based on product performance, price, brand recognition, customer service, technical support, and distribution. Competitors generally have greater financial resources and market presence. The cat litter market is dominated by mineral-based products, with scoopable litters holding majority share. Silica-gel crystal litter is a growing segment.
Oil-Dri's strategy emphasizes product innovation (e.g., antibacterial cat litter, lightweight scoopable litters), a nation-wide distribution network, vertical integration through owned mines and manufacturing, and expansion into new categories via acquisitions like Ultra Pet. The company invests in research and development at the Nick Jaffee Center for Innovation, focusing on new sorbent products and processes.
As of July 31, 2025, Oil-Dri had approximately 928 employees, with 893 in the U.S. and 35 internationally. About 58 U.S. and 15 Canadian employees are unionized under collective bargaining agreements, with relations described as satisfactory. The company emphasizes a culture based on 'WE CARE' values, ethics, compliance, diversity, and safety. Compensation includes market-competitive salaries, 401(k) matching, and wellness programs.
Fiscal year 2025 marked a record year for Oil-Dri, with consolidated net sales reaching $485.6 million, an 11% increase from $437.6 million in fiscal 2024. Gross profit rose 14% to $143.1 million, outpacing revenue growth due to a 90 basis point expansion in gross margin to 29.5%. Operating income increased 32% to $68.2 million, while net income surged 37% to $54.0 million. Diluted earnings per share improved to $3.70 from $2.72 in the prior year, supported by a lower effective tax rate of 18% versus 21% in fiscal 2024. The tax rate benefit stemmed from favorable return-to-provision adjustments and tax credits.
Revenue growth was broad-based, with higher net sales across all principal product groups. Cost of goods sold increased 10% to $342.5 million, driven by a 5% rise in domestic per ton costs, particularly in materials and transportation. SG&A expenses grew only 2% due to a $2.0 million reduction in corporate unallocated expenses, partially offset by higher segment-level SG&A. Total other expenses remained flat at $2.0 million.
The Business to Business Products Group delivered standout performance, with net sales up 21% to $182.6 million. Fluids purification products, used in renewable diesel filtration, grew 19% to $110.1 million. Agricultural and horticultural product sales jumped 32% to $44.3 million as customers resumed purchasing after inventory destocking. Animal health and nutrition products increased 15% to $28.2 million. Segment operating income rose 31% to $59.8 million, with operating margin of 32.8% reflecting strong operating leverage despite a 5% increase in per ton costs.
The Retail and Wholesale Products Group net sales increased 6% to $303.0 million. Cat litter sales, which account for the majority of the segment, rose 6% to $255.9 million, driven by the introduction of crystal cat litter from the Ultra Pet acquisition (contributed $14.9 million). This growth was partially offset by a $3.7 million loss from a private label account and $3.2 million from customer bankruptcies. Industrial and sports product sales grew 4% to $47.1 million on higher pricing. Segment operating income edged up 1% to $44.1 million, as gross profit improvement was largely offset by a 12% increase in SG&A, primarily from incremental costs associated with the acquisition.
Foreign subsidiaries contributed $20.1 million in net sales, down 4% year-over-year, primarily due to the exit from China operations. Pre-tax net loss from foreign operations was $0.1 million versus income of $0.7 million in the prior year, impacted by a foreign VAT assessment.
Management emphasized strong cash flow generation, with net cash from operations of $80.2 million, up from $60.3 million in fiscal 2024. Capital expenditures were $32.5 million, supporting expanded capacity. The company amended its credit facility to increase the line of credit from $45 million to $75 million, enhancing financial flexibility. No explicit forward guidance was provided for fiscal 2026; however, the company expects to fund working capital, capital expenditures, dividends, and debt service through operating cash flow and available credit. Key strategic priorities include supporting demand for renewable diesel filtration products and integrating the Ultra Pet acquisition.
Cash and cash equivalents rose to $50.5M from $23.5M, a 115% increase, driven by strong operating cash flow of $80.2M. Total debt (current + long-term) decreased to $39.8M from $50.8M, reflecting $11M in principal repayments. Shareholders' equity grew to $259.1M from $210.6M, supported by net income of $54.0M and a $2.3M treasury stock buyback. Inventory slightly decreased to $51.6M.
No material purchase commitments were disclosed outside of operating lease obligations. Future minimum lease payments total $17.3M, with $4.7M due within one year. The company recorded a $3.8M reserve for landfill modification costs, expected to be completed in fiscal 2026.
The company returned $11.1M to shareholders via dividends ($8.7M) and share repurchases ($2.3M). Dividends per share increased 9.3% for Common Stock. Net debt decreased by $11.0M with no new borrowings. Capital expenditures of $32.6M (6.7% of sales) focused on growth and maintenance.
Two reportable segments: Retail and Wholesale Products Group (62.4% of revenue) and Business to Business Products Group (37.6%). B2B revenue grew 21.4%, while Retail grew 5.5%. Segment operating income totaled $103.9M before corporate expenses ($35.7M). Geographically, domestic operations accounted for $465.5M (95.9%) of sales, with foreign subsidiaries contributing $20.1M. Walmart represented 19% of net sales.
Operating cash flow of $80.2M exceeded net income of $54.0M, resulting in a cash conversion ratio of 1.49x, indicating strong earnings quality. Capital expenditures of $32.6M represented 40.6% of CFO, a moderate intensity. Free cash flow (implicitly CFO less capex) was $47.6M, covering dividends ($8.4M) and share repurchases ($2.3M) by 4.4x.
Working capital changes included a $7.8M increase in accounts receivable, partly offset by a $2.3M decrease in inventories and a $0.9M increase in accounts payable. Accrued expenses rose $2.4M, while other liabilities decreased $4.5M. Depreciation and amortization of $22.0M and non-cash stock compensation of $5.4M were the main non-cash add-backs.
Investing activities were dominated by capex, with only a small acquisition of $0.1M and asset sale proceeds. Financing activities saw net debt repayments of $11.0M, dividends, and share repurchases. The company ended the year with $50.5M in cash, up from $24.5M, reflecting strong cash generation.