What changed in this filing

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Item 1. Financial Statements

2023-03-09 compared with 2022-12-06 · 181 added, 69 removed, 444 unchanged (36% of the section changed)

3 unchanged sentences

(in thousands, except for share and per share amounts)

ASSETS October 31,

ASSETS January 31,

2023 July 31,

1 unchanged sentence

Cash and cash equivalents $ 13,951 $ 16,298

Accounts receivable, less allowance of

$ 882 and $ 922 at October 31, 2022 and July 31, 2022, respectively

Accounts receivable, net allowances of

$ 1,037 and $ 922 at January 31, 2023 and July 31, 2022, respectively

57,179 51,683

9 unchanged sentences

Trademarks and patents, net of accumulated amortization

of $ 527 and $ 524 at October 31, 2022 and July 31, 2022, respectively

of $ 550 and $ 524 at January 31, 2023 and July 31, 2022, respectively

Customer list, net of accumulated amortization

of $ 7,647 and $ 7,608 at October 31, 2022 and July 31, 2022, respectively

of $ 7,685 and $ 7,608 at January 31, 2023 and July 31, 2022, respectively

Deferred income taxes 3,511 3,677

7 unchanged sentences

(in thousands, except for share and per share amounts)

LIABILITIES & STOCKHOLDERS’ EQUITY October 31,

LIABILITIES & STOCKHOLDERS’ EQUITY January 31,

2023 July 31,

8 unchanged sentences

Notes payable, net of unamortized debt issuance costs

of $ 200 and $ 202 at October 31, 2022 and July 31, 2022, respectively

of $ 191 and $ 202 at January 31, 2023 and July 31, 2022, respectively

31,809 31,798

6 unchanged sentences

Stockholders’ Equity

Common Stock, par value $ .10 per share, issued 8,725,618 shares at October 31, 2022

Common Stock, par value $ .10 per share, issued 8,744,223 shares at January 31, 2023

and 8,686,768 shares at July 31, 2022

Class B Stock, par value $ .10 per share, issued 2,397,056 shares at October 31, 2022

Class B Stock, par value $ .10 per share, issued 2,397,056 shares at January 31, 2023

and 2,397,056 shares at July 31, 2022

7 unchanged sentences

Less Treasury Stock, at cost ( 3,624,677 Common and 351,641 Class B shares at

October 31, 2022 and 3,609,938 Common and 351,641 Class B shares at July 31, 2022)

January 31, 2023 and 3,609,938 Common and 351,641 Class B shares at July 31, 2022)

( 79,886 ) ( 79,428 )

5 unchanged sentences

(in thousands, except for per share amounts)

For the Three Months Ended October 31,

For the Six Months Ended January 31,

Net Sales $ 200,208 $ 169,670

3 unchanged sentences

Income from Operations 13,875 2,363

Other Income (Expense)

Other (Expense) Income

Interest expense ( 731 ) ( 490 )

5 unchanged sentences

Net Income 9,076 2,556

Net (Loss) Income Attributable to Noncontrolling Interest ( 11 ) 10

Net Loss Attributable to Noncontrolling Interest ( 21 ) ( 31 )

Net Income Attributable to Oil-Dri $ 9,097 $ 2,587

12 unchanged sentences

Basic Class B Common $ 0.4200 $ 0.4050

(1) The effect of Basic Common potential common stock equivalents related to non-vested restricted stock of 6 thousand shares was excluded from the computation of average diluted shares outstanding for the three months ended October 31, 2022 as inclusion would have been anti-dilutive.

(1) The effect of Basic Common potential common stock equivalents related to non-vested restricted stock of $ 7 thousand shares was excluded from the computation of average diluted shares outstanding for the six months ended January 31, 2023, as inclusion would have been anti-dilutive.

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

2 unchanged sentences

(in thousands)

For the Three Months Ended October 31,

For the Six Months Ended January 31,

Net Income Attributable to Oil-Dri $ 9,097 $ 2,587

6 unchanged sentences

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Statements of Operations

(in thousands, except for per share amounts)

For the Three Months Ended January 31,

Net Sales $ 101,669 $ 87,210

Cost of Sales ( 78,653 ) ( 71,624 )

Gross Profit 23,016 15,586

Selling, General and Administrative Expenses ( 15,710 ) ( 13,668 )

Income from Operations 7,306 1,918

Other (Expense) Income

Interest expense ( 367 ) ( 313 )

Interest income 59 8

Other, net ( 1,959 ) 757

Total Other (Expense) Income, Net ( 2,267 ) 452

Income Before Income Taxes 5,039 2,370

Income Tax Expense ( 1,193 ) ( 409 )

Net Income 3,846 1,961

Net Loss Attributable to Noncontrolling Interest ( 10 ) ( 41 )

Net Income Attributable to Oil-Dri $ 3,856 $ 2,002

Net Income Per Share

Basic Common $ 0.58 $ 0.29

Basic Class B Common $ 0.44 $ 0.22

Diluted Common (1) $ 0.56 $ 0.28

Diluted Class B Common $ 0.43 $ 0.22

Average Shares Outstanding

Basic Common 4,829 5,077

Basic Class B Common 1,964 1,939

Diluted Common (1) 4,965 5,186

Diluted Class B Common 1,985 1,965

Dividends Declared Per Share

Basic Common $ 0.2800 $ 0.2700

Basic Class B Common $ 0.2100 $ 0.2025

(1) The effect of Basic Common potential common stock equivalents related to non-vested restricted stock of 1 thousand shares was excluded from the computation of average diluted shares outstanding for the three months ended January 31, 2023, as inclusion would have been anti-dilutive.

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

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Statements of Comprehensive (Loss) Income

(in thousands of dollars)

For the Three Months Ended January 31,

Net Income Attributable to Oil-Dri $ 3,856 $ 2,002

Other Comprehensive Income (Loss):

Pension and postretirement benefits (net of tax) ( 5 ) 26

Cumulative translation adjustment 256 ( 60 )

Other Comprehensive Income (Loss) 251 ( 34 )

Total Comprehensive Income $ 4,107 $ 1,968

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

OIL-DRI CORPORATION OF AMERICA

Consolidated Statements of Stockholders' Equity

(in thousands, except share amounts)

For the Three Months Ended October 31

For the Three Months Ended January 31

Number of Shares

Stock Treasury

Stock Additional

Capital Retained

Earnings Treasury

Stock Accumulated

Comprehensive

Loss Non-Controlling Interest Total

Stockholders’

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

Net Income (Loss) — — — — 2,002 — — ( 41 ) 1,961

Other Comprehensive Loss — — — — — — ( 34 ) — ( 34 )

Dividends Declared — — — — ( 1,844 ) — — — ( 1,844 )

Purchases of Treasury Stock — ( 113,236 ) — — — ( 3,910 ) — — ( 3,910 )

Net issuance of stock under long-term incentive plans 32,000 ( 850 ) 4 26 — ( 30 ) — — —

Amortization of Restricted Stock — — — 817 — — — — 817

Balance, January 31, 2022 11,065,024 ( 3,732,596 ) $ 1,107 $ 50,220 $ 179,322 $ ( 72,862 ) $ ( 4,158 ) $ ( 338 ) $ 153,291

Balance, October 31, 2022 11,122,674 ( 3,968,939 ) $ 1,112 $ 53,385 $ 182,135 $ ( 79,648 ) $ ( 2,576 ) $ ( 380 ) $ 154,028

Net Income (Loss) — — — — 3,856 — — ( 10 ) 3,846

Other Comprehensive Income — — — — — — 251 — 251

Dividends Declared — — — — ( 1,858 ) — — — ( 1,858 )

Purchases of Treasury Stock — ( 4,133 ) — — — ( 133 ) — — ( 133 )

Net issuance of stock under long-term incentive plans 18,605 ( 3,246 ) 2 103 — ( 105 ) — — —

Amortization of Restricted Stock — — — 840 — — — — 840

Balance, January 31, 2023 11,141,279 ( 3,976,318 ) $ 1,114 $ 54,328 $ 184,133 $ ( 79,886 ) $ ( 2,325 ) $ ( 390 ) $ 156,974

For the Six Months Ended January 31

Number of Shares

Common & Class B Stock Treasury Stock Common & Class B Stock Additional Paid-In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Non-controlling Interest Total Stockholders' Equity

6 unchanged sentences

Amortization of Restricted Stock — — — 1,453 — — — — 1,453

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

Balance, January 31, 2022 11,065,024 ( 3,732,596 ) $ 1,107 $ 50,220 $ 179,322 $ ( 72,862 ) $ ( 4,158 ) $ ( 338 ) $ 153,291

Balance, July 31, 2022 11,083,824 ( 3,961,579 ) $ 1,108 $ 52,467 $ 178,754 $ ( 79,428 ) $ ( 2,183 ) $ ( 369 ) $ 150,349

5 unchanged sentences

Amortization of Restricted Stock — — — 1,634 — — — — 1,634

Balance, October 31, 2022 11,122,674 ( 3,968,939 ) $ 1,112 $ 53,385 $ 182,135 $ ( 79,648 ) $ ( 2,576 ) $ ( 380 ) $ 154,028

Balance, January 31, 2023 11,141,279 ( 3,976,318 ) $ 1,114 $ 54,328 $ 184,133 $ ( 79,886 ) $ ( 2,325 ) $ ( 390 ) $ 156,974

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

2 unchanged sentences

(in thousands)

For the Three Months Ended October 31,

For the Six Months Ended January 31,

CASH FLOWS FROM OPERATING ACTIVITIES 2023 2022

18 unchanged sentences

Total Adjustments 5,822 ( 2,495 )

Net Cash Provided by (Used in) Operating Activities 3,668 ( 596 )

Net Cash Provided by Operating Activities 14,898 61

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures ( 13,285 ) ( 10,574 )

Proceeds from sale of property, plant and equipment 5 —

Net Cash Used in Investing Activities ( 13,280 ) ( 10,574 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of notes payable — 25,000

Payment of debt issuance costs — ( 114 )

Dividends paid ( 3,711 ) ( 3,728 )

Purchases of treasury stock ( 225 ) ( 6,201 )

Net Cash Used in Financing Activities ( 1,943 ) ( 4,156 )

Net Cash (Used in) Provided by Financing Activities ( 3,936 ) 14,957

Effect of exchange rate changes on Cash and Cash Equivalents ( 29 ) ( 26 )

Net Decrease in Cash and Cash Equivalents ( 5,828 ) ( 11,536 )

Net (Decrease) Increase in Cash and Cash Equivalents ( 2,347 ) 4,418

Cash and Cash Equivalents, Beginning of Period 16,298 24,591

3 unchanged sentences

(in thousands)

For the Three Months Ended October 31,

For the Six Months Ended January 31,

Supplemental disclosures:

Interest payments, net of amounts capitalized $ 567 $ 178

Income tax (refunds) payments $ ( 87 ) $ 15

Income tax payments $ 1,323 $ 155

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 months ended October 31, 2022 are not necessarily an indication of the results that may be expected for the fiscal year ending July 31, 2023.

Operating results for the three and six months ended January 31, 2023 are not necessarily an indication of the results that may be expected for the fiscal year ending July 31, 2023.

Management Use of Estimates

55 unchanged sentences

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

We recorded a liability for these advance payments of $ 0.5 million at both October 31, 2022 and July 31, 2022.

We recorded a liability for these advance payments of $ 0.2 million and $ 0.5 million as of January 31, 2023 and July 31, 2022, respectively.

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

Revenue recognized during the three months ended October 31, 2022 that was included in the liability for advance payments at the beginning of the period was $ 0.3 million.

Revenue recognized during the six months ended January 31, 2023 that was included in the liability for advance payments at the beginning of the period was $ 0.1 million.

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.

8 unchanged sentences

Current liabilities are due to be paid within the next 12 months.

Included in current Other within Accrued Expenses on the unaudited Condensed Consolidated Balance Sheet is the remaining $ 1.2 million accrual for payroll taxes which were originally deferred as a result of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) which was signed into U.S.

Noncurrent other liabilities is primarily comprised of our reclamation liability.

Included in current liabilities within Accrued Expenses on the unaudited Condensed Consolidated Balance Sheet is $ 2.5 million for the Georgia landfill modification reserve as modification efforts are expected to begin in the third quarter of fiscal year 2023, refer to Note 7 for further details.

NEW ACCOUNTING PRONOUNCEMENTS AND REGULATIONS

13 unchanged sentences

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

The inventory obsolescence reserve was $ 0.8 million at both October 31, 2022 and July 31, 2022.

The inventory obsolescence reserve was $ 0.9 million and $ 0.8 million at January 31, 2023 and July 31, 2022, respectively.

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

7 unchanged sentences

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

We had no cash equivalents as of October 31, 2022 and July 31, 2022.

Balances of accounts receivable and accounts payable approximated their fair values at October 31, 2022 and July 31, 2022 due to the short maturity and nature of those balances.

We had no cash equivalents as of January 31, 2023 and July 31, 2022.

Balances of accounts receivable and accounts payable approximated their fair values at January 31, 2023 and July 31, 2022 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 $ 30.1 million and $ 31.8 million as of October 31, 2022 and July 31, 2022, respectively, and are classified as Level 2.

The estimated fair value of notes payable, including current maturities, was $ 31.2 million and $ 31.8 million as of January 31, 2023 and July 31, 2022, 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 $ 0.1 million in both the first three months of fiscal years 2023 and 2022.

Estimated intangible amortization for the remainder of fiscal year 2023 is $ 0.2 million.

Intangible amortization expense was $ 67 thousand and $ 138 thousand in the second quarter of fiscal years 2023 and 2022, respectively.

Intangible amortization expense was $ 134 thousand and $ 253 thousand in the first six months of fiscal years 2023 and 2022, respectively.

Estimated intangible amortization for the remainder of fiscal year 2023 is $ 131 thousand.

Estimated intangible amortization for the next five fiscal years is as follows (in thousands):

2 unchanged sentences

As a result, we identified goodwill impairment of $ 5.6 million which left no remaining goodwill in the Retail and Wholesale Products Group reporting unit and no impairment was identified for the Business to Business Products Group.

We are not aware of any triggering events in the first quarter of fiscal year 2023 that would indicate a new impairment analysis is needed.

There have been no triggering events in fiscal year 2023 that would indicate a new impairment analysis is needed.

ACCRUED EXPENSES

2 unchanged sentences

Salaries, Wages, Commissions and Employee Benefits $ 13,780 $ 13,439

Trade promotions and advertising 1,238 1,180

Freight 4,356 4,022

Georgia Landfill Modification Reserve 2,500 —

Trade Promotions and Advertising 1,971 1,180

Real Estate Tax 317 1,006

1 unchanged sentence

$ 33,785 $ 30,085

The decrease in salaries, wages, commissions and employee benefits relates primarily to the payment of annual bonuses during the first quarter of fiscal year 2023.

Real estate tax increased with regular accruals of property tax for various locations including plants and is offset by payments typically made in the second quarter of the fiscal year.

The increase in freight cost is primarily due to increase in fuel prices, tight truck capacity, ongoing driver shortages, and supply chain issues.

The accrual for other is lower at October 31, 2022 than July 31, 2022 due to a decrease in the legal accrual offset by increases in other payables due to rising costs and timing of certain purchases and expenses.

The change in salaries, wages, commissions and employee benefits relates primarily to the payment of annual bonuses during the first quarter of fiscal year 2023 offset by the increase in labor costs and bonus accrual for the first six months of fiscal year 2023.

The increase in freight cost is primarily due to increased fuel prices, export fees and demurrage charges for international ocean freight.

Refer to Note 7 for details of the Georgia landfill modification reserve recorded for the first time in the second quarter of fiscal year 2023.

Trade promotions and advertising accruals have increased with marketing spend due to timing.

Real estate tax decreased due to the timing of payments which typically occur in the second quarter of the fiscal year.

Other is higher at January 31, 2023 compared to July 31, 2022 due to an increase in accruals for cash received in advance, account receivable credits, and other accrued expenses due to timing of purchases and rising costs offset by a reduction in professional fees.

OTHER CONTINGENCIES

4 unchanged sentences

Although we believe this claim to be without merit, as of July 31, 2020, we 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 therefore recorded that estimate in Other within Accrued expenses.

There have been no changes during fiscal 2022 or the three months ended October 31, 2022 that would have changed this estimate.

There have been no changes during fiscal 2022 or the six months ended January 31, 2023 that would have changed this estimate.

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

2 unchanged sentences

The actual outcome could differ materially from management’s estimates.

In the three months ended January 31, 2023, we recorded a reserve of $ 2.5 million for anticipated modification costs that we expect to incur to address capacity issues at our sole landfill located in Ochlocknee, Georgia.

Reserves are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.

The amount of the reserve represents management’s best estimate of the costs for the modification with respect to this matter.

Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards, and emerging technologies for handling site modification.

Consequently, it is reasonably possible that modification costs in excess of amounts accrued could have a material impact on the Company’s results of operations, financial condition and cash flows.

On August 30, 2022, we entered into (i) the Sixth Amendment to Credit Agreement (the "Sixth Amendment"), which amends the Credit Agreement, dated as of January 27, 2006 (as previously amended, the "Credit Agreement"), among us, BMO Harris Bank N.A (“BMO”), and certain of our domestic subsidiaries;

13 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 three months ended October 31, 2022.

We have no material finance leases, and variable costs for operating leases are immaterial for the three and six months ended January 31, 2023.

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 October 31,

For the Three Months Ended January 31, For the Six Months Ended January 31,

2023 2022 2023 2022

Operating Lease Cost

2 unchanged sentences

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

For the Three Months Ended October 31,

For the Three Months Ended January 31, For the Six Months Ended January 31,

2023 2022 2023 2022

Other Information

Cash paid for amounts included in the measurement of operating lease liabilities:

$ 585 $ 636 $ 1,180 $ 1,197

Right-of-use assets obtained in exchange for new operating lease liabilities $ — $ 1,042 $ 23 $ 1,283

We have no new leases in the three months ended January 31, 2023.

Operating lease ROU assets and operating lease liabilities are separately presented on the unaudited Condensed Consolidated Balance Sheet, excluding leases with an initial term of twelve months or less.

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

October 31, 2022 July 31, 2022

January 31, 2023 July 31, 2022

Weighted-average remaining lease term - operating leases 7.6 years 7.7 years

Weighted-average discount rate - operating leases 3.90 % 3.91 %

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 October 31, (in thousands):

Thereafter 4,577

12 unchanged sentences

(in thousands)

For the Three Months Ended October 31,

For the Three Months Ended January 31, For the Six Months Ended January 31,

2023 2022 2023 2022

Interest cost $ 338 $ 266 $ 673 $ 534

5 unchanged sentences

(in thousands)

For the Three Months Ended October 31,

For the Three Months Ended January 31, For the Six Months Ended January 31,

2023 2022 2023 2022

Service cost $ 20 $ 28 $ 42 $ 61

6 unchanged sentences

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 three months of fiscal year 2023.

We were not required to make, and did no t voluntarily make, a contribution to the Pension Plan during the first six months of fiscal year 2023.

We have no minimum funding requirements for the remainder of fiscal year 2023.

3 unchanged sentences

Pension Benefits Postretirement Health Benefits

For the Three Months Ended October 31,

For the Three and Six Months Ended January 31,

2023 2022 2023 2022

22 unchanged sentences

and sports field product users;

and marketers of consumer products.

The Business to Business Products Group customers include:

1 unchanged sentence

manufacturers of animal feed and agricultural chemicals;

distributors of animal health and nutrition products;

and marketers of consumer products.

and distributors of animal health and nutrition products.

Our operating segments are also our reportable segments.

2 unchanged sentences

Business to Business Products Group Retail and Wholesale Products Group

For the Three Months Ended October 31,

For the Six Months Ended January 31,

Product 2023 2022 2023 2022

5 unchanged sentences

Net Sales $ 68,841 $ 53,262 131,367 $ 116,408

Business to Business Products Group Retail and Wholesale Products Group

For the Three Months Ended January 31,

Product 2023 2022 2023 2022

Cat Litter $ — $ — $ 56,382 $ 49,937

Industrial and Sports — — 10,133 8,820

Agricultural and Horticultural 9,785 7,311 — —

Bleaching Clay and Fluids Purification 19,012 15,555 — —

Animal Health and Nutrition 6,357 5,587 — —

Net Sales $ 35,154 $ 28,453 $ 66,515 $ 58,757

We do not rely on any segment asset allocations and we do not consider them meaningful because of the shared nature of our production facilities;

2 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.

October 31, 2022 July 31, 2022

January 31, 2023 July 31, 2022

(in thousands)

6 unchanged sentences

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

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, 2021 were adjusted for a change in management organization.

In addition, Income from our Business to Business and Retail and Wholesale Products as well as Corporate Expenses for the three and six months ended January 31, 2022 were adjusted for a change in management organization.

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

For the Three Months Ended October 31,

For the Six Months Ended January 31,

Net Sales Income

10 unchanged sentences

Net Income 9,076 2,556

Net (Loss) Income Attributable to Noncontrolling Interest ( 11 ) 10

Net Loss Attributable to Noncontrolling Interest ( 21 ) ( 31 )

Net Income Attributable to Oil-Dri $ 9,097 $ 2,587

For the Three Months Ended January 31,

Net Sales Income

2023 2022 2023 2022

(in thousands)

Business to Business Products Group $ 35,154 $ 28,453 $ 7,734 $ 6,424

Retail and Wholesale Products Group 66,515 58,757 8,682 2,092

Net Sales $ 101,669 $ 87,210

Corporate Expenses ( 9,110 ) ( 6,598 )

Income from Operations 7,306 1,918

Total Other (Expense) Income, Net ( 2,267 ) 452

Income before Income Taxes 5,039 2,370

Income Tax Expense ( 1,193 ) ( 409 )

Net Income 3,846 1,961

Net Loss Attributable to Noncontrolling Interest ( 10 ) ( 41 )

Net Income Attributable to Oil-Dri $ 3,856 $ 2,002

STOCK-BASED COMPENSATION

2 unchanged sentences

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

As of October 31, 2022, there were 239,985 shares available for future grants under this plan.

As of January 31, 2023, there were 229,759 shares available for future grants under this plan.

Restricted Stock

All of our non-vested restricted stock as of October 31, 2022 was issued under the 2006 Plan with vesting periods generally between one and five years .

All of our non-vested restricted stock as of January 31, 2023 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 40,000 and 75,000 restricted shares of Common Stock granted during the first quarter of fiscal years 2023 and 2022, respectively.

Stock-based compensation expense was $ 0.8 million and $ 0.6 million for the first quarter of fiscal years 2023 and 2022, respectively.

There were 57,000 and 107,000 restricted shares of Common Stock granted during the second quarter of fiscal years 2023 and 2022, respectively.

Stock-based compensation expense was $ 1.6 million and $ 1.5 million for the second quarter of fiscal years 2023 and 2022, respectively.

A summary of restricted stock transactions is shown below:

5 unchanged sentences

Forfeitures ( 7 ) $ 32.19

Non-vested restricted stock outstanding at October 31, 2022 376 $ 32.58

Non-vested restricted stock outstanding at January 31, 2023 363 $ 32.57

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table summarizes the changes in accumulated other comprehensive (loss) income by component as of October 31, 2022 (in thousands):

The following table summarizes the changes in accumulated other comprehensive (loss) income by component as of January 31, 2023 (in thousands):

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

3 unchanged sentences

Net current-period other comprehensive loss, net of tax ( 13 ) ( 129 ) ( 142 )

Balance as of October 31, 2022 $ ( 2,250 ) $ ( 326 ) $ ( 2,576 )

Balance as of January 31, 2023 $ ( 2,255 ) $ ( 70 ) $ ( 2,325 )

RELATED PARTY TRANSACTIONS

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 $ 55,158 and $ 75,296 for the first quarter of fiscal years 2023 and 2022 respectively.

Outstanding accounts receivable from that customer, and its subsidiaries, were $ 863 as of October 31, 2022 and $ 5,608 as of July 31, 2022.

Total net sales to that customer, including sales to subsidiaries of that customer, were $ 71,768 and 81,210 for the second quarter of fiscal years 2023 and 2022 respectively and were $ 126,926 and $ 156,476 for the first six months of fiscal years 2023 and 2022 respectively.

Outstanding accounts receivable from that customer, and its subsidiaries, were $ 8,661 as of January 31, 2023 and $ 5,608 as of July 31, 2022.

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 $ 62,360 and $ 215,418 for the first quarter of fiscal years 2022 and 2021 respectively .

There were no outstanding accounts payable to that vendor as of October 31, 2022 or July 31, 2022.

Total payments to this vendor for fees and cost reimbursements were $ 49,916 and $ 349,773 for the second quarter of fiscal years 2023 and 2022 respectively and were $ 112,276 and $ 565,191 for the first six months of fiscal years 2023 and 2022 respectively.

There were no outstanding accounts payable to that vendor as of January 31, 2023 or July 31, 2022.

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