What changed in this filing

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Item 1. Financial Statements

2021-12-07 compared with 2021-06-08 · 102 added, 202 removed, 430 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

ASSETS April 30,

ASSETS October 31,

2021 July 31,

2 unchanged sentences

Accounts receivable, less allowance of

$993 and $1,078 at April 30, 2021 and July 31, 2020, respectively 39,088 34,911

$ 1,262 and $ 1,174 at October 31, 2021 and July 31, 2021, respectively

43,082 40,923

Inventories 28,692 23,598

8 unchanged sentences

Other intangibles, net of accumulated amortization

of $540 and $457 at April 30, 2021 and July 31, 2020, respectively 1,761 1,566

of $ 421 and $ 385 at October 31, 2021 and July 31, 2021, respectively

Customer list, net of accumulated amortization

of $7,212 and $6,887 at April 30, 2021 and July 31, 2020, respectively 573 898

of $ 7,392 and $ 7,321 at October 31, 2021 and July 31, 2021, respectively

Deferred income taxes 1,895 2,096

7 unchanged sentences

(in thousands, except share and per share amounts)

LIABILITIES & STOCKHOLDERS’ EQUITY April 30,

LIABILITIES & STOCKHOLDERS’ EQUITY October 31,

2021 July 31,

8 unchanged sentences

Notes payable, net of unamortized debt issuance costs

of $129 and $150 at April 30, 2021 and July 31, 2020, respectively 8,871 8,848

of $ 116 and $ 122 at October 31, 2021 and July 31, 2021, respectively

Deferred compensation 4,612 4,370

5 unchanged sentences

Stockholders’ Equity

Common Stock, par value $.10 per share, issued 8,545,561 shares at April 30, 2021

Common Stock, par value $ .10 per share, issued 8,635,968 shares at October 31, 2021

and 8,561,311 shares at July 31, 2021

Class B Stock, par value $.10 per share, issued 2,397,056 shares at April 30, 2021

Class B Stock, par value $ .10 per share, issued 2,397,056 shares at October 31, 2021

and 2,397,056 shares at July 31, 2021

7 unchanged sentences

Less Treasury Stock, at cost ( 3,266,869 Common and 351,641 Class B shares at

April 30, 2021 and 3,090,230 Common and 335,816 Class B shares at July 31, 2020) ( 65,948 ) ( 62,269 )

October 31, 2021 and 3,192,702 Common and 346,491 Class B shares at July 31, 2021)

( 68,922 ) ( 66,154 )

Total Stockholders’ Equity 156,301 159,232

4 unchanged sentences

(in thousands, except for per share amounts)

For the Nine Months Ended April 30,

For the Three Months Ended October 31,

Net Sales $ 82,460 $ 76,097

11 unchanged sentences

Net Income 595 3,949

Net Loss Attributable to Noncontrolling Interest ( 87 ) ( 155 )

Net Income Attributable to Oil-Dri 10,510 13,014

Net Income Per Share (1)

Basic Common $ 1.52 $ 1.85

Basic Class B Common $ 1.14 $ 1.39

Diluted Common $ 1.49 $ 1.82

Diluted Class B Common $ 1.11 $ 1.37

Average Shares Outstanding

Basic Common 5,144 5,152

Basic Class B Common 1,928 2,042

Diluted Common 5,256 5,243

Diluted Class B Common 1,969 2,067

Dividends Declared Per Share

Basic Common $ 0.7800 $ 0.7500

Basic Class B Common $ 0.5850 $ 0.5625

(1) Our Form 10-Q for the nine months ended April 30, 2021 and 2020 reflects a change in presentation for net income per share.

We have historically disclosed net income per share for our diluted Common and Class B Common shares in total.

As we have two classes of common shares, we have elected to change our net income per share presentation to reflect net income per share for both of our classes of common shares - our diluted Common shares and our diluted Class B Common shares.

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Statements of Comprehensive Income

(in thousands of dollars)

For the Nine Months Ended April 30,

Net Income Attributable to Oil-Dri $ 10,510 $ 13,014

Other Comprehensive Income:

Pension and postretirement benefits (net of tax) 494 5,674

Cumulative translation adjustment 520 ( 230 )

Other Comprehensive Income 1,014 5,444

Total Comprehensive Income $ 11,524 $ 18,458

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Statements of Income

(in thousands, except for per share amounts)

For the Three Months Ended April 30,

Net Sales $ 76,255 $ 76,256

Cost of Sales ( 59,732 ) ( 54,871 )

Gross Profit 16,523 21,385

Selling, General and Administrative Expenses ( 14,592 ) ( 15,685 )

Income from Operations 1,931 5,700

Other Income (Expense)

Interest expense ( 186 ) ( 108 )

Interest income 14 48

Other, net 403 ( 43 )

Total Other Income (Expense), Net 231 ( 103 )

Income Before Income Taxes 2,162 5,597

Income Tax Benefit (Expense) 24 ( 947 )

Net Income 2,186 4,650

Net (Loss) Income Attributable to Noncontrolling Interest ( 41 ) 2

Net Income (Loss) Attributable to Noncontrolling Interest 10 ( 35 )

Net Income Attributable to Oil-Dri 585 3,984

12 unchanged sentences

Basic Class B Common $ 0.2025 $ 0.1950

(1) Our Form 10-Q for the three months ended April 30, 2021 and 2020 reflects a change in presentation for net income per share.

We have historically disclosed net income per share for our diluted Common and Class B Common shares in total.

(1) See Note 1 of the Notes to the unaudited Condensed Consolidated Financial Statements for further information about amounts included in this line item

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands of dollars)

For the Three Months Ended April 30,

For the Three Months Ended October 31,

Net Income Attributable to Oil-Dri $ 585 $ 3,984

Other Comprehensive Income:

Other Comprehensive (Loss) Income:

Pension and postretirement benefits (net of tax) 27 128

Cumulative translation adjustment ( 34 ) 272

Other Comprehensive Income (Loss) 277 ( 6 )

Other Comprehensive (Loss) Income ( 7 ) 400

Total Comprehensive Income $ 578 $ 4,384

3 unchanged sentences

(in thousands, except share amounts)

For the Three Months Ended April 30

Number of Shares

Stock Treasury

Stock Additional

Capital Retained

Earnings Treasury

Stock Accumulated

Comprehensive

Loss Non-Controlling Interest Total

Stockholders’

Balance, January 31, 2020 10,881,155 ( 3,269,059 ) $ 1,088 $ 43,149 $ 169,590 $ ( 57,138 ) $ ( 9,589 ) $ ( 171 ) $ 146,929

Net Income — — — — 4,648 — — 2 4,650

Other Comprehensive Loss — — — — — — ( 6 ) — ( 6 )

Dividends Declared — — — — ( 1,734 ) — — — ( 1,734 )

Purchases of Treasury Stock — ( 127,770 ) — — — ( 4,097 ) — — ( 4,097 )

Net issuance of stock under long-term incentive plans 2,000 ( 2,800 ) — 88 — ( 87 ) — — 1

Amortization of Restricted Stock — — — 770 — — — — 770

Contributions from noncontrolling interests (1) — — — 142 — — — — 142

Balance, April 30, 2020 10,883,155 ( 3,399,629 ) $ 1,088 $ 44,149 $ 172,504 $ ( 61,322 ) $ ( 9,595 ) $ ( 169 ) $ 146,655

Balance, January 31, 2021 10,937,617 ( 3,507,783 ) $ 1,094 $ 46,890 $ 181,265 $ ( 65,071 ) $ ( 11,517 ) $ ( 220 ) $ 152,441

Net Income (Loss) — — — — 2,227 — — ( 41 ) 2,186

Other Comprehensive Income — — — — — — 277 — 277

Dividends Declared — — — — ( 1,789 ) — — — ( 1,789 )

Purchases of Treasury Stock — ( 21,159 ) — — — ( 736 ) — — ( 736 )

Net issuance of stock under long-term incentive plans 5,000 ( 4,350 ) — 142 — ( 141 ) — — 1

Amortization of Restricted Stock — — — 559 — — — — 559

Balance, April 30, 2021 10,942,617 ( 3,533,292 ) 1,094 47,591 181,703 ( 65,948 ) ( 11,240 ) ( 261 ) 152,939

For the Nine Months Ended April 30

For the Three Months Ended October 31

Number of Shares

7 unchanged sentences

Amortization of Restricted Stock — — — 784 — — — — 784

Contributions from noncontrolling interests (1) — — — 142 — — — — 142

Balance, April 30, 2020 10,883,155 ( 3,399,629 ) $ 1,088 $ 44,149 $ 172,504 $ ( 61,322 ) $ ( 9,595 ) $ ( 169 ) $ 146,655

Balance, October 31, 2020 10,919,617 ( 3,453,239 ) $ 1,092 $ 45,779 $ 178,761 $ ( 63,253 ) $ ( 11,854 ) $ ( 209 ) $ 150,316

Balance, July 31, 2021 10,958,367 ( 3,539,193 ) $ 1,096 $ 48,271 $ 180,443 $ ( 66,154 ) $ ( 4,117 ) $ ( 307 ) $ 159,232

Net Income (Loss) — — — — 10,510 — — ( 87 ) 10,423

Other Comprehensive Income — — — — — — 1,014 — 1,014

Net Income — — — — 585 — — 10 595

Other Comprehensive Loss — — — — — — ( 7 ) — ( 7 )

Dividends Declared — — — — ( 1,864 ) — — — ( 1,864 )

2 unchanged sentences

Amortization of Restricted Stock — — — 636 — — — — 636

Balance, April 30, 2021 10,942,617 ( 3,533,292 ) $ 1,094 $ 47,591 $ 181,703 $ ( 65,948 ) $ ( 11,240 ) $ ( 261 ) $ 152,939

(1) On April 1, 2020 we increased our interest in one of our non-wholly owned subsidiaries from 52.0 % to 78.4 % for approximately $ 724,000 when that subsidiary issued shares through a capital call.

Certain other noncontrolling interest holders also purchased shares but to a lesser extent, thereby diluting their collective ownership from 48.0 % to 21.6 %.

Balance, October 31, 2021 11,033,024 ( 3,618,510 ) $ 1,103 $ 49,377 $ 179,164 $ ( 68,922 ) $ ( 4,124 ) $ ( 297 ) $ 156,301

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

For the Nine Months Ended April 30,

For the Three Months Ended October 31,

CASH FLOWS FROM OPERATING ACTIVITIES 2021 2020

2 unchanged sentences

Depreciation and amortization 3,456 3,504

Stock-based compensation 1,849 2,549

Non-cash stock-based compensation 636 784

Deferred income taxes 200 714

Provision for bad debts and cash discounts 89 ( 60 )

Loss on the sale of fixed assets 10 102

Curtailment gain on SERP Plan — ( 1,296 )

Loss (Gain) on the disposals of property, plant and equipment 34 ( 1 )

(Increase) Decrease in assets:

10 unchanged sentences

Total Adjustments ( 1,191 ) ( 7,384 )

Net Cash Provided by Operating Activities 8,340 22,269

Net Cash Used in Operating Activities ( 596 ) ( 3,435 )

CASH FLOWS FROM INVESTING ACTIVITIES

3 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments on notes payable — ( 3,082 )

Dividends paid ( 1,865 ) ( 1,803 )

Purchases of treasury stock ( 2,291 ) ( 978 )

Contributions from noncontrolling interests — 142

Net Cash Used in Financing Activities ( 4,156 ) ( 2,781 )

6 unchanged sentences

(in thousands)

For the Nine Months Ended April 30,

For the Three Months Ended October 31,

Supplemental disclosure of non-cash investing and financing activities:

15 unchanged sentences

The unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals and reclassifications which are, in the opinion of management, necessary for a fair presentation of the statements contained herein.

Operating results for the three and nine months ended April 30, 2021 are not necessarily an indication of the results that may be expected for the fiscal year ending July 31, 2021.

Operating results for the three months ended October 31, 2021 are not necessarily an indication of the results that may be expected for the fiscal year ending July 31, 2022.

Reclassification

1 unchanged sentence

These immaterial reclassifications had no effect on the previously reported net income.

Immaterial Correction of an Error in Previously Issued Financial Statements

Subsequent to the issuance of our Annual Report on Form 10-K for the fiscal year ended July 31, 2020, we identified an error in our historical financial statements related to the classification of certain costs as selling, general and administrative expenses relating to the production of our inventory that should be classified as cost of sales.

These costs generally relate to our annual discretionary bonus and 401(k) employer match for our manufacturing employees, employee salaries for individuals in our support functions that spend a portion of their time related to our manufacturing operations such as IT, and other costs mostly related to consultants and outside services.

In accordance with FASB Accounting Standards Codification 250, Accounting Changes and Error Corrections , we evaluated the materiality of the error from both a quantitative and qualitative perspective, and concluded that the error was immaterial to our prior period interim and annual financial statements.

Since the error was not material to any prior period interim or annual financial statements, no amendments to previously filed interim or annual periodic reports are required.

Consequently, we have adjusted for these errors by revising our historical condensed consolidated financial statements presented herein.

The revision to our historical condensed consolidated financial statements did not result in any impact to our consolidated net income.

The effects of the corrections to each of the individual affected line items in our unaudited Condensed Consolidated Statements of Income were as follows (in thousands):

For the Three Months Ended October 31, 2020

As Previously Reported Corrections As Corrected

Cost of Sales $ ( 55,793 ) $ ( 1,524 ) $ ( 57,317 )

Selling, General and Administrative Expenses $ ( 15,127 ) $ 1,524 $ ( 13,603 )

The related impacts to Inventory in our unaudited Condensed Consolidated Balance Sheet were not considered material and hence, were not adjusted.

The effects of the corrections to our Notes to the unaudited Condensed Consolidated Financial Statements for Operating Segments were as follows (in thousands):

For the Three Months Ended October 31, 2020

As Previously Reported

Corrections As Corrected

Business to Business Products $ 8,196 $ ( 596 ) $ 7,600

Retail and Wholesale Products $ 4,478 $ ( 928 ) $ 3,550

Corporate Expenses $ ( 7,497 ) $ 1,524 $ ( 5,973 )

Management Use of Estimates

1 unchanged sentence

GAAP requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period, as well as the related disclosures.

Estimates and assumptions about future events cannot be made with certainty, including the potential impacts and duration of the recent novel coronavirus pandemic (“the coronavirus” or “COVID-19”) and its aftermath.

Estimates and assumptions about future events cannot be made with certainty, including the potential impacts and duration of the novel coronavirus pandemic (“the coronavirus” or “COVID-19”) and its aftermath.

All of our estimates and assumptions are revised periodically.

4 unchanged sentences

Trade Receivables.

We recognize trade receivables when control of finished products are transferred to our customers.

We record an allowance for doubtful accounts based on our historical experience and a periodic review of our accounts receivable, including a review of the overall aging of accounts, consideration of customer credit risk and analysis of facts and circumstances about specific customer accounts.

18 unchanged sentences

To determine the present value of the lease liability, we used an incremental borrowing rate, which is defined as the rate of interest we would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments.

The ROU asset is based on the corresponding lease liability adjusted for certain costs such as initial direct costs, prepaid lease payments and lease incentives received.

The ROU asset is based on the corresponding lease liability adjusted for certain costs such as initial direct costs, prepaid lease payments

and lease incentives received.

Both operating and finance lease ROU assets are reviewed for impairment, consistent with other long-lived assets, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

13 unchanged sentences

We have completed our performance obligation when control is transferred and we recognize revenue accordingly.

Taxes collected from customers and remitted to governmental authorities are excluded from net sales.

Sales returns are not material nor are warranties and any related obligations.

We have an unconditional right to consideration under the payment terms specified in the contract upon completion of the performance obligation.

We may require certain customers to provide payment in advance of product shipment.

We recorded a liability for these advance payments of $ 405,000 and $ 247,000 as of April 30, 2021 and July 31, 2020, respectively.

We recorded a liability for these advance payments of $ 539,000 and $ 256,000 as of October 31, 2021 and July 31, 2021, respectively.

This liability is reported in Other within Accrued Expenses on the unaudited Condensed Consolidated Balance Sheet.

Revenue recognized during the nine months ended April 30, 2021 that was included in the liability for advance payments at the beginning of the period was $ 217,000 .

Revenue recognized during the three months ended October 31, 2021 that was included in the liability for advance payments at the beginning of the period was $ 157,000 .

We routinely commit to one-time or ongoing trade promotion programs directly with consumers, such as coupon programs, and with customers, such as volume discounts, cooperative marketing and other arrangements.

4 unchanged sentences

Selling, General and Administrative Expenses.

and amortization related to assets outside the manufacturing and distribution process and all other non-manufacturing and non-distribution expenses.

Selling, general and administrative expenses (“SG&A”) include salaries, wages and benefits associated with staff outside the manufacturing and distribution functions, all marketing related costs, any miscellaneous trade spending expenses not required to be included in net sales, research and development costs, depreciation and amortization related to assets outside the manufacturing and distribution process and all other non-manufacturing and non-distribution expenses.

Other Current and Noncurrent Liabilities.

3 unchanged sentences

The $ 2,300,000 will be paid equally in the fourth quarters of calendar years 2021 and 2022;

$ 1,150,000 in 2021 and $ 1,150,000 in 2022.

The current portion of the accrual for these payroll taxes is included in Other within Accrued Expenses and the noncurrent portion of the accrual is included in Other within Noncurrent Liabilities on the unaudited Condensed Consolidated Balance Sheet.

NEW ACCOUNTING PRONOUNCEMENTS AND REGULATIONS

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued guidance under ASC 740, Income Taxes , which simplifies the accounting for income taxes.

The guidance removes several specific exceptions to the general principles in ASC 740 and clarifies and makes amendments to improve consistent application of and simplify existing accounting for other areas in ASC 740.

The adoption of this guidance on August 1, 2021 was not material to our unaudited Condensed Consolidated Financial Statements.

Recently Issued Pronouncements

4 unchanged sentences

We are currently evaluating the potential effects of the adoption of this guidance on our Consolidated Financial Statements.

In December 2019, the FASB issued guidance under ASC 740, Income Taxes , which simplifies the accounting for income taxes.

This guidance is effective for our first quarter of fiscal year 2022, with early adoption permitted.

We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements.

In June 2016, the FASB issued guidance under ASC 326, Financial Instruments-Credit Losses , which requires companies to utilize an impairment model for most financial assets measured at amortized cost and certain other financial instruments, which include trade and other receivables, loans and held-to-maturity debt securities, to record an allowance for credit risk based on expected losses rather than incurred losses.

12 unchanged sentences

Inventory costs include the cost of raw materials, packaging supplies, labor and other overhead costs.

We performed a detailed review of our inventory items to determine if an obsolescence reserve adjustment was necessary.

The review surveyed all of our operating facilities and sales groups to ensure that both historical issues and new market trends were considered.

The obsolescence reserve not only

considered specific items, but also took into consideration the overall value of the inventory as of the balance sheet date.

The inventory obsolescence reserve values at April 30, 2021 and July 31, 2020 were $ 746,000 and $ 926,000 , respectively.

The obsolescence reserve decreased due to better management of inventory.

The other category of inventories includes a variety of items including clay, additives, fragrances and other supplies and decreased from July 31, 2020 due to increased production.

Conversely, packaging inventories increased from July 31, 2020 due to anticipated sales demand as well as an increase in the cost of packaging.

The inventory obsolescence reserve values at October 31, 2021 and July 31, 2021 were $ 621,000 and $ 641,000 , respectively.

Inventories, in all categories, have increased due to a combination of rising costs and building inventory levels for anticipated demand.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

Cash equivalents are primarily money market mutual funds classified as Level 1.

We had no cash equivalents as of April 30, 2021 and $ 6,000 of cash equivalents as of July 31, 2020.

The $ 6,000 as of July 31, 2020 is included in cash and cash equivalents on the Condensed Consolidated Balance Sheet.

Balances of accounts receivable and accounts payable approximated their fair values at April 30, 2021 and July 31, 2020 due to the short maturity and nature of those balances.

We had no cash equivalents as of October 31, 2021 and July 31, 2021.

Balances of accounts receivable and accounts payable approximated their fair values at October 31, 2021 and July 31, 2021 due to the short maturity and nature of those balances.

Notes payable are reported at the face amount of future maturities.

The estimated fair value of notes payable, including current maturities, was $ 11,384,000 and $ 11,631,000 as of April 30, 2021 and July 31, 2020, respectively, and are classified as Level 2.

The estimated fair value of notes payable, including current maturities, was $ 10,266,000 and $ 10,231,000 as of October 31, 2021 and July 31, 2021, respectively, and are classified as Level 2.

The fair value was estimated using the exit price notion of fair value.

4 unchanged sentences

Intangible assets, other than goodwill, include trademarks, patents, customer lists and product registrations.

Intangible amortization expense was $ 146,000 and $ 184,000 in the third quarter of fiscal years 2021 and 2020, respectively.

Intangible amortization expense was $ 451,000 and $ 600,000 in the first nine months of fiscal years 2021 and 2020.

Intangible amortization expense was $ 115,000 and $ 155,000 in the first three months of fiscal years 2022 and 2021, respectively.

Estimated intangible amortization for the remainder of fiscal year 2022 is $ 370,000 .

14 unchanged sentences

The decrease in salaries, wages, commissions and employee benefits relates primarily to the payment of annual discretionary bonuses during the first quarter of fiscal year 2022.

The accrual for trade promotions and advertising is lower at April 30, 2021 than at July 31, 2020 due to a shift in timing of advertising programs and expense.

Freight rates increased during the nine months ended April 30, 2021 resulting in a higher accrual at April 30, 2021.

Accrued real estate tax at April 30, 2021 is lower than at July 31, 2020 due to timing of payments as well as an adjustment to account for lower real estate taxes for one of our facilities.

The accrual for other is higher at October 31, 2021 than July 31, 2021 due to an increase in professional fees, accrual for rising natural gas costs and timing of certain plant accruals.

OTHER CONTINGENCIES

4 unchanged sentences

Although we believe this claim to be without merit, as of July 31, 2020, we have determined a reasonable estimate of this liability within a range, with no amount within that range being a better estimate than any other amount, and have therefore recorded that estimate in Other within Accrued expenses.

There have been no changes during the nine months ended April 30, 2021 that would have changed this estimate.

There have been no changes during fiscal 2021 or the three months ended October 31, 2021 that would have changed this estimate.

We believe that any loss related to this matter is unlikely to be material.

6 unchanged sentences

Further information about our accounting policy for leases is included in Note 1 of the Notes to the unaudited Condensed Consolidated Financial Statements.

We have no material finance leases, and variable costs for operating leases are immaterial for the third quarter of fiscal year 2021.

We have no material finance leases, and variable costs for operating leases are immaterial for the first quarter of fiscal year 2022.

Operating lease costs are included in Cost of Sales or SG&A expenses based on the nature of the lease.

The following table summarizes total lease costs for our operating leases (in thousands):

For the Three Months Ended April 30, For the Nine Months Ended April 30,

2021 2020 2021 2020

For the Three Months Ended October 31,

Operating Lease Cost

2 unchanged sentences

Supplemental cash flow information related to leases was as follows (in thousands):

For the Three Months Ended April 30, For the Nine Months Ended April 30,

2021 2020 2021 2020

For the Three Months Ended October 31,

Other Information

3 unchanged sentences

Other supplemental balance sheet information related to leases was as follows:

April 30, 2021 July 31, 2020

October 31, 2021 July 31, 2021

Weighted-average remaining lease term - operating leases 9.2 years 9.1 years

Weighted-average discount rate - operating leases 3.88 % 3.88 %

The following table summarizes scheduled minimum future lease payments due within twelve months for operating leases with terms longer than one year for which cash flows are fixed and determinable as of April 30, (in thousands):

Thereafter 5,354

6 unchanged sentences

On January 9, 2020, we amended the Pension Plan to freeze participation, all future benefit accruals and accrual of benefit service, including consideration of compensation increases, effective March 1, 2020.

Consequently, the Pension Plan is closed to new participants and current participants will no longer earn additional benefits on or after March 1, 2020.

Consequently, the Pension Plan is closed to new participants and current participants no longer earn additional benefits on or after March 1, 2020.

On May 4, 2021 we purchased a pension annuity which settled $ 8.5 million of projected benefit obligations and recognized a settlement loss of approximately $ .6 million due to the annuity purchase.

The components of net periodic pension and postretirement health benefit costs were as follows:

1 unchanged sentence

(in thousands)

For the Three Months Ended April 30, For the Nine Months Ended April 30,

2021 2020 2021 2020

Service cost $ — $ 122 $ — $ 973

For the Three Months Ended October 31,

Interest cost 268 —

5 unchanged sentences

(in thousands)

For the Three Months Ended April 30, For the Nine Months Ended April 30,

2021 2020 2021 2020

For the Three Months Ended October 31,

Service cost $ 33 $ 35

2 unchanged sentences

Prior service costs ( 1 ) ( 1 )

Other actuarial loss 1 — 3 —

Net periodic benefit cost $ 48 $ 47

1 unchanged sentence

The Pension Plan is funded based upon actuarially determined contributions that take into account the amount deductible for income tax purposes, the normal cost and the minimum contribution required and the maximum contribution allowed under applicable regulations.

We were not required to make, and did no t voluntarily make, a contribution to the Pension Plan during the first nine months of fiscal year 2021.

We were not required to make, and did no t voluntarily make, a contribution to the Pension Plan during the first three months of fiscal year 2022.

We have no minimum funding requirements for the remainder of fiscal year 2022.

3 unchanged sentences

Pension Benefits Postretirement Health Benefits

For the Three and Nine Months Ended April 30,

For the Three Months Ended October 31,

2021 2020 2021 2020

5 unchanged sentences

Supplemental Executive Retirement Plan

The Oil-Dri Corporation of America Supplemental Executive Retirement Plan (“SERP”) provides certain retired participants in the Pension Plan with the amount of benefits that would have been provided under the Pension Plan but for:

The Oil-Dri Corporation of America Supplemental Executive Retirement Plan (“SERP”) provided certain retired participants in the Pension Plan with the amount of benefits that would have been provided under the Pension Plan but for:

(1) the limitations on benefits imposed by Section 415 of the Internal Revenue Code (“Code”) and/or (2) the limitation on compensation for purposes of calculating benefits under the Pension Plan imposed by Section 401(a)(17) of the Code.

The SERP liability is actuarially determined at the end of each fiscal year using assumptions similar to those used for the Pension Plan.

The SERP is unfunded and benefits will be funded when payments are made.

The SERP liability was actuarially determined at the end of each fiscal year using assumptions similar to those used for the Pension Plan.

On January 9, 2020, we amended the SERP to freeze participation and any excess benefit, supplemental benefit or additional benefit effective March 1, 2020.

Consequently, the SERP is closed to new participants and current participants no longer earn additional benefits on or after March 1, 2020.

The SERP was terminated effective June 30, 2020.

Any payment of benefits that would otherwise have been payable pursuant to the SERP plan on or after June 30, 2021 will instead be paid to each participant in the form of one lump sum, with such lump sum payment payable no earlier than June 30, 2021 and no later than June 8, 2022.

Consequently, the SERP was closed to new participants and current participants no longer earned additional benefits on or after March 1, 2020.

The SERP was terminated effective June 30, 2020 and all participants were paid in the form of one lump sum in July 2021.

OPERATING SEGMENTS

22 unchanged sentences

Business to Business Products Group Retail and Wholesale Products Group

For the Nine Months Ended April 30,

Product 2021 2020 2021 2020

Cat Litter $ 10,826 $ 11,026 $ 121,820 $ 116,010

Industrial and Sports — — 23,477 22,906

Agricultural and Horticultural 18,665 16,518 — —

Bleaching Clay and Fluids Purification 37,577 37,142 1,457 1,835

Animal Health and Nutrition 13,030 12,946 — —

Net Sales $ 80,098 $ 77,632 $ 146,754 $ 140,751

Business to Business Products Group Retail and Wholesale Products Group

For the Three Months Ended April 30,

For the Three Months Ended October 31,

Product 2021 2020 2021 2020

9 unchanged sentences

The asset allocation is estimated and is not a measure used by our chief operating decision maker about allocating resources to the operating segments or in assessing their performance.

April 30, 2021 July 31, 2020

October 31, 2021 July 31, 2021

(in thousands)

6 unchanged sentences

Corporate expenses also include the estimated annual incentive plan bonus accrual.

For the Nine Months Ended April 30,

In addition, Income from our Business to Business and Retail and Wholesale Products as well as Corporate Expenses for the three months ended October 31, 2020 were adjusted for an immaterial correction of an error.

See Note 1 of the Notes to the unaudited Condensed Consolidated Financial Statements.

For the Three Months Ended October 31,

Net Sales Income

10 unchanged sentences

Net Income 595 3,949

Net Loss Attributable to Noncontrolling Interest ( 87 ) ( 155 )

Net Income Attributable to Oil-Dri $ 10,510 $ 13,014

For the Three Months Ended April 30,

Net Sales Income

2021 2020 2021 2020

(in thousands)

Business to Business Products Group $ 26,293 $ 26,683 $ 7,146 $ 8,198

Retail and Wholesale Products Group 49,962 49,573 2,898 6,412

Net Sales $ 76,255 $ 76,256

Corporate Expenses ( 8,113 ) ( 8,910 )

Income from Operations 1,931 5,700

Total Other Income (Expense), Net 231 ( 103 )

Income before Income Taxes 2,162 5,597

Income Tax Benefit (Expense) 24 ( 947 )

Net Income 2,186 4,650

Net (Loss) Income Attributable to Noncontrolling Interest ( 41 ) 2

Net Income (Loss) Attributable to Noncontrolling Interest 10 ( 35 )

Net Income Attributable to Oil-Dri $ 585 $ 3,984

3 unchanged sentences

The total number of shares of stock subject to grants under the 2006 Plan may not exceed 1,219,500 .

As of April 30, 2021, there were 356,446 shares available for future grants under this plan.

As of October 31, 2021, there were 305,855 shares available for future grants under this plan.

Restricted Stock

All of our non-vested restricted stock as of April 30, 2021 was issued under the 2006 Plan with vesting periods generally between one and five years .

All of our non-vested restricted stock as of October 31, 2021 was issued under the 2006 Plan with vesting periods generally between one and five years .

We determined the fair value of restricted stock as of the grant date.

We recognize the related compensation expense over the period from the date of grant to the date the shares vest.

There were 5,000 and 2,000 restricted shares of Common Stock granted during the third quarter of fiscal years 2021 and 2020, respectively.

Stock-based compensation expense was $ 559,000 and $ 770,000 for the third quarter of fiscal years 2021 and 2020, respectively.

Stock-based compensation expense was $ 1,849,000 and $ 2,549,000 for the first nine months of fiscal years 2021 and 2020, respectively.

There were 75,000 and 33,000 restricted shares of Common Stock granted during the first quarter of fiscal years 2022 and 2021, respectively.

Stock-based compensation expense was $ 636,000 and $ 784,000 for the first quarter of fiscal years 2022 and 2021, respectively.

A summary of restricted stock transactions is shown below:

5 unchanged sentences

Forfeitures ( 14 ) $ 35.21

Non-vested restricted stock outstanding at April 30, 2021 354 $ 33.91

Non-vested restricted stock outstanding at October 31, 2021 389 $ 33.88

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table summarizes the changes in accumulated other comprehensive (loss) income by component as of April 30, 2021 (in thousands):

The following table summarizes the changes in accumulated other comprehensive (loss) income by component as of October 31, 2021 (in thousands):

Pension and Postretirement Health Benefits Cumulative Translation Adjustment Total Accumulated Other Comprehensive (Loss) Income

3 unchanged sentences

Net current-period other comprehensive income, net of tax 27 ( 34 ) ( 7 )

Balance as of April 30, 2021 $ ( 11,500 ) $ 260 $ ( 11,240 )

Balance as of October 31, 2021 $ ( 4,401 ) $ 277 $ ( 4,124 )

(a) Amount is net of tax expense of $ 8,550 .

3 unchanged sentences

One member of our Board of Directors (the “Board”) retired from the role of President and Chief Executive Officer of a customer of ours in September 2019 and is currently party to a post-employment agreement with the customer.

Total net sales to that customer, including sales to subsidiaries of that customer, were $ 72,000 and $ 103,000 for the third quarter of fiscal years 2021 and 2020, respectively, and were $ 253,000 and $ 263,000 for the first nine months of fiscal years 2021 and 2020, respectively.

Outstanding accounts receivable from that customer, and its subsidiaries, were $ 10,000 at April 30, 2021.

There were no outstanding accounts receivable from that customer, and its subsidiaries, as of July 31, 2020.

Total net sales to that customer, including sales to subsidiaries of that customer, were $ 75,000 and $ 110,000 for the first three months of fiscal years 2022 and 2021, respectively.

Outstanding accounts receivable from that customer, and its subsidiaries, were $ 39,000 as of October 31, 2021 and $ 4,000 as of July 31, 2021.

One member of our Board is currently the President and Chief Executive Officer of a vendor of ours.

Total payments to this vendor for fees and cost reimbursements were $ 72,000 and $ 119,000 for the third quarter of fiscal years 2021 and 2020, respectively and were $ 273,000 and $ 182,000 for the first nine months of fiscal years 2021 and 2020, respectively.

There were no outstanding accounts payable to that vendor as of April 30, 2021 or July 31, 2020.

SUBSEQUENT EVENTS

On May 4, 2021 we purchased a pension annuity which settled $ 8.5 million of projected benefit obligations.

We recognized a settlement loss of approximately $ .6 million due to the annuity purchase.

Total payments to this vendor for fees and cost reimbursements were $ 215,000 and $ 92,000 for the first three months of fiscal years 2022 and 2021, respectively.

There were no outstanding accounts payable to that vendor as of October 31, 2021 or July 31, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements