What changed in this filing

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Item 1. Financial Statements

2023-06-08 compared with 2023-03-09 · 122 added, 109 removed, 516 unchanged (31% of the section changed)

3 unchanged sentences

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

ASSETS January 31,

ASSETS April 30,

2023 July 31,

2 unchanged sentences

Accounts receivable, net allowances of

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

$ 1,071 and $ 922 at April 30, 2023 and July 31, 2022, respectively

56,983 51,683

9 unchanged sentences

Trademarks and patents, net of accumulated amortization

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

of $ 570 and $ 524 at April 30, 2023 and July 31, 2022, respectively

Customer list, net of accumulated amortization

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

of $ 7,724 and $ 7,608 at April 30, 2023 and July 31, 2022, respectively

Deferred income taxes 4,022 3,677

7 unchanged sentences

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

LIABILITIES & STOCKHOLDERS’ EQUITY January 31,

LIABILITIES & STOCKHOLDERS’ EQUITY April 30,

2023 July 31,

8 unchanged sentences

Notes payable, net of unamortized debt issuance costs

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

of $ 182 and $ 202 at April 30, 2023 and July 31, 2022, respectively

31,818 31,798

6 unchanged sentences

Stockholders’ Equity

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

Common Stock, par value $ .10 per share, issued 8,745,523 shares at April 30, 2023

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

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

Class B Stock, par value $ .10 per share, issued 2,397,056 shares at April 30, 2023

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

3 unchanged sentences

Accumulated Other Comprehensive Loss:

Pension and postretirement benefits ( 2,255 ) ( 2,242 )

Pension and postretirement obligation (benefit) 705 ( 2,242 )

Cumulative translation adjustment ( 221 ) 59

Total Accumulated Other Comprehensive Loss ( 2,325 ) ( 2,183 )

Total Accumulated Other Comprehensive Income (Loss) 484 ( 2,183 )

Less Treasury Stock, at cost ( 3,641,427 Common and 351,641 Class B shares at

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

April 30, 2023 and 3,609,938 Common and 351,641 Class B shares at July 31, 2022)

( 80,354 ) ( 79,428 )

5 unchanged sentences

(in thousands, except for per share amounts)

For the Six Months Ended January 31,

For the Nine Months Ended April 30,

Net Sales $ 305,633 $ 255,431

Cost of Sales ( 154,882 ) ( 140,266 )

Cost of Goods Sold ( 232,840 ) ( 210,397 )

Gross Profit 72,793 45,034

Selling, General and Administrative Expenses ( 44,462 ) ( 41,054 )

Income from Operations 13,875 2,363

Loss on Impairment of Goodwill — ( 5,644 )

Income (Loss) from Operations 28,331 ( 1,664 )

Other (Expense) Income

1 unchanged sentence

Interest income 212 26

Loss on pension termination ( 4,858 ) —

Other, net ( 1,134 ) 1,734

Total Other (Expense) Income, Net ( 6,874 ) 892

Income Before Income Taxes 11,476 3,080

Income Tax Expense ( 2,400 ) ( 524 )

Income (Loss) Before Income Taxes 21,457 ( 772 )

Income Tax (Expense) Benefit ( 3,893 ) 1,195

Net Income 17,564 423

14 unchanged sentences

Basic Class B Common $ 0.6300 $ 0.6075

(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 Six Months Ended January 31,

For the Nine Months Ended April 30,

Net Income Attributable to Oil-Dri $ 17,632 $ 478

Other Comprehensive (Loss) Income:

Other Comprehensive Income (Loss):

Pension and postretirement benefits (net of tax) 2,947 79

Cumulative translation adjustment ( 280 ) ( 187 )

Other Comprehensive Loss ( 142 ) ( 41 )

Other Comprehensive Income (Loss) 2,667 ( 108 )

Total Comprehensive Income $ 20,299 $ 370

3 unchanged sentences

(in thousands, except for per share amounts)

For the Three Months Ended January 31,

For the Three Months Ended April 30,

Net Sales $ 105,425 $ 85,761

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

Cost of Goods Sold ( 77,958 ) ( 70,131 )

Gross Profit 27,467 15,630

Selling, General and Administrative Expenses ( 13,011 ) ( 14,013 )

Income from Operations 7,306 1,918

Loss on Impairment of Goodwill — ( 5,644 )

Income (Loss) from Operations 14,456 ( 4,027 )

Other (Expense) Income

1 unchanged sentence

Interest income 97 9

Loss on pension termination ( 4,858 ) —

Other, net 649 544

Total Other (Expense) Income, Net ( 4,475 ) 175

Income Before Income Taxes 5,039 2,370

Income Tax Expense ( 1,193 ) ( 409 )

Net Income 3,846 1,961

Income (Loss) Before Income Taxes 9,981 ( 3,852 )

Income Tax (Expense) Benefit ( 1,493 ) 1,719

Net Income (Loss) 8,488 ( 2,133 )

Net Loss Attributable to Noncontrolling Interest ( 47 ) ( 24 )

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

Net Income Per Share

Net Income (Loss) Attributable to Oil-Dri $ 8,535 $ ( 2,109 )

Net Income (Loss) Per Share

Basic Common $ 1.28 $ ( 0.32 )

10 unchanged sentences

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.

2 unchanged sentences

(in thousands of dollars)

For the Three Months Ended January 31,

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

For the Three Months Ended April 30,

Net Income (Loss) Attributable to Oil-Dri $ 8,535 $ ( 2,109 )

Other Comprehensive Income (Loss):

2 unchanged sentences

Other Comprehensive Income (Loss) 2,809 ( 67 )

Total Comprehensive Income $ 4,107 $ 1,968

Total Comprehensive Income (Loss) $ 11,344 $ ( 2,176 )

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

2 unchanged sentences

(in thousands, except share amounts)

For the Three Months Ended January 31

For the Three Months Ended April 30

Number of Shares

7 unchanged sentences

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

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

Net Loss — — — — ( 2,109 ) — — ( 24 ) ( 2,133 )

Other Comprehensive Loss — — — — — — ( 67 ) — ( 67 )

3 unchanged sentences

Amortization of Restricted Stock — — — 814 — — — — 814

Balance, April 30, 2022 11,080,024 ( 3,887,209 ) $ 1,108 $ 51,117 $ 175,368 $ ( 77,251 ) $ ( 4,225 ) $ ( 362 ) $ 145,755

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

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) — — — — 8,535 — — ( 47 ) 8,488

4 unchanged sentences

Amortization of Restricted Stock — — — 692 — — — — 692

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

Balance, April 30, 2023 11,142,579 ( 3,993,068 ) $ 1,114 $ 55,488 $ 190,800 $ ( 80,354 ) $ 484 $ ( 437 ) $ 167,095

For the Nine Months Ended April 30

Number of Shares

7 unchanged sentences

Amortization of Restricted Stock — — — 2,267 — — — — 2,267

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

Balance, April 30, 2022 11,080,024 ( 3,887,209 ) $ 1,108 $ 51,117 $ 175,368 $ ( 77,251 ) $ ( 4,225 ) $ ( 362 ) $ 145,755

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 — — — 2,326 — — — — 2,326

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

Balance, April 30, 2023 11,142,579 ( 3,993,068 ) $ 1,114 $ 55,488 $ 190,800 $ ( 80,354 ) $ 484 $ ( 437 ) $ 167,095

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

2 unchanged sentences

(in thousands)

For the Six Months Ended January 31,

For the Nine Months Ended April 30,

CASH FLOWS FROM OPERATING ACTIVITIES 2023 2022

3 unchanged sentences

Non-cash stock-based compensation 2,326 2,267

Loss on pension termination 4,858 —

Deferred income taxes ( 742 ) ( 1,311 )

Provision for bad debts and cash discounts 240 ( 1 )

Impairment of patents 61 323

Impairment of Goodwill — 5,644

Loss on Impairment of Fixed Assets 810 —

Loss on the disposals of property, plant and equipment 46 346

23 unchanged sentences

Effect of exchange rate changes on Cash and Cash Equivalents ( 103 ) ( 21 )

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

Net Increase (Decrease) in Cash and Cash Equivalents 13,448 ( 1,766 )

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

3 unchanged sentences

(in thousands)

For the Six Months Ended January 31,

For the Nine Months Ended April 30,

Supplemental disclosures:

18 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 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.

Operating results for the three and nine months ended April 30, 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

17 unchanged sentences

A significant part of our overall mining cost is incurred during the process of removing the overburden (non-usable material) from the mine site, thus exposing the sorbent material used in a majority of our production processes.

These stripping costs are treated as a variable inventory production cost and are included in cost of sales in the period they are incurred.

These stripping costs are treated as a variable inventory production cost and are included in cost of goods sold in the period they are incurred.

We defer and amortize the pre-production overburden removal costs during the development phase associated with opening a new mine.

35 unchanged sentences

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

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

We recorded a liability for these advance payments of $ 0.3 million and $ 0.5 million as of April 30, 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 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.

Revenue recognized during the nine months ended April 30, 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 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.

Included in current liabilities within Accrued Expenses on the unaudited Condensed Consolidated Balance Sheet is $ 2.5 million for the Georgia landfill modification reserve which began 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 $ 0.9 million and $ 0.8 million at January 31, 2023 and July 31, 2022, respectively.

The inventory obsolescence reserve was $ 0.8 million at both April 30, 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 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.

We had no cash equivalents as of April 30, 2023 and July 31, 2022.

Balances of accounts receivable and accounts payable approximated their fair values at April 30, 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 $ 31.2 million and $ 31.8 million as of January 31, 2023 and July 31, 2022, respectively, and are classified as Level 2.

The estimated fair value of notes payable, including current maturities, was $ 31.5 million and $ 31.8 million as of April 30, 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 $ 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.

Intangible amortization expense was $ 66 thousand and $ 116 thousand in the third quarter of fiscal years 2023 and 2022, respectively.

Intangible amortization expense was $ 200 thousand and $ 369 thousand in the first nine months of fiscal years 2023 and 2022, respectively.

Estimated intangible amortization for the remainder of fiscal year 2023 is $ 65 thousand.

14 unchanged sentences

$ 35,312 $ 30,085

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.

The increase in salaries, wages, commissions and employee benefits relates primarily to higher compensation expenses and annual bonus accrual for the first nine months of fiscal year 2023.

The decrease in freight cost is primarily due to decreased fuel prices and the timing of charges for international ocean freight.

Refer to Note 7 for details of the Georgia landfill modification reserve recorded 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 is higher at April 30, 2023 compared to July 31, 2022 due to an increase in accruals for income taxes, interest expense, and other contingencies offset by a reduction in other accrued expenses due to timing of purchases.

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 six months ended January 31, 2023 that would have changed this estimate.

There have been no changes during fiscal 2022 or the nine months ended April 30, 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.

In the second quarter of fiscal year 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.

There have been no changes to the reserve estimate in the third quarter of fiscal year 2023.

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

15 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 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.

We have no material finance leases, and variable costs for operating leases are immaterial for the three and nine months ended April 30, 2023.

Operating lease costs are included in Cost of Goods Sold 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 January 31, For the Six Months Ended January 31,

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

2023 2022 2023 2022

3 unchanged sentences

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

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

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

2023 2022 2023 2022

3 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities $ 552 $ 531 $ 575 $ 1,815

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:

January 31, 2023 July 31, 2022

April 30, 2023 July 31, 2022

Weighted-average remaining lease term - operating leases 7.3 years 7.7 years

Weighted-average discount rate - operating leases 4.17 % 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 January 31, 2023, (in thousands):

Thereafter 4,642

3 unchanged sentences

Pension and Postretirement Health Benefits

The Oil-Dri Corporation of America Pension Plan ("Pension Plan") is a defined benefit pension plan for eligible salaried and hourly employees.

Pension benefits are based on a formula of years of credited service and levels of compensation or stated amounts for each year of credited service.

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 no longer earn additional benefits on or after March 1, 2020.

The Oil-Dri Corporation of America Pension Plan ("Pension Plan") was a defined benefit pension plan for eligible salaried and hourly employees.

Pension benefits were based on a formula of years of credited service and levels of compensation or stated amounts for each year of credited service.

On January 9, 2020, Oil-Dri 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 was closed to new participants and existing participants no longer earned additional benefits on or after March 1, 2020.

On September 20, 2022, the Company's Board of Directors approved a resolution to terminate the Company's defined benefit pension plan.

The Company expects to complete the termination over a period of eighteen months.

On April 20, 2023, Oil-Dri settled $ 14 million of the pension obligation through the purchase of an annuity.

The remaining $ 16 million of the pension obligation was settled on April 28, 2023, via lump-sum payments.

All pension assets were remeasured immediately before settlement resulting in a net surplus amount of $ 3.6 million and net unrealized loss of $ 2.0 million included in accumulated other comprehensive income.

Upon settlement of the pension obligations Oil-Dri recognized through net income all unrealized losses resulting in a $ 2.0 million reduction to net income included in "Loss on pension termination" within "Other Income (Expense), Net".

On April 27, 2023, the Executive Committee of the Company's Board of Directors approved the distribution of the surplus to a qualified defined contribution retirement fund.

A portion of the surplus to be distributed to pension participants was irrevocably distributed to the 401(k) plan on April 28, 2023, which resulted in an additional $ 2.8 million charge to net income included in "Loss on pension termination" within "Other Income (Expense), Net".

The remaining $ 0.8 million to be held by the 401(k) plan to cover qualified future plan expenses was recognized as a prepaid asset.

A postretirement health benefits plan is also provided to domestic salaried employees who meet specific age, participation and length of service requirements at the time of retirement.

Eligible employees may elect to continue their health care coverage under the Oil-Dri Corporation of America Employee Benefits Plan until the date certain criteria are met, including attaining the age of Medicare eligibility.

We have the right to modify or terminate the postretirement health benefit plan at any time.

The postretirement health plan is an unfunded plan.

We pay insurance premiums and claims from our assets.

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

1 unchanged sentence

(in thousands)

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

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

2023 2022 2023 2022

3 unchanged sentences

Other actuarial loss 14 36 42 108

Loss on pension termination $ 4,858 $ — $ 4,858 $ —

Net periodic benefit cost $ 4,651 $ ( 343 ) $ 4,236 $ ( 1,030 )

1 unchanged sentence

(in thousands)

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

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

2023 2022 2023 2022

6 unchanged sentences

The non-service cost components of net periodic benefit cost are included in Other Income (Expense) in the line item Other, net on the unaudited Condensed Consolidated Statements of Income.

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 six months of fiscal year 2023.

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

The postretirement health plan is an unfunded plan.

We pay insurance premiums and claims from our assets.

Assumptions used in the previous calculations were as follows:

Pension Benefits Postretirement Health Benefits

For the Three and Six Months Ended January 31,

For the Three and Nine Months Ended April 30,

2023 2022 2023 2022

31 unchanged sentences

Business to Business Products Group Retail and Wholesale Products Group

For the Six Months Ended January 31,

For the Nine Months Ended April 30,

Product 2023 2022 2023 2022

6 unchanged sentences

Business to Business Products Group Retail and Wholesale Products Group

For the Three Months Ended January 31,

For the Three Months Ended April 30,

Product 2023 2022 2023 2022

8 unchanged sentences

The unallocated asset category is the remainder of our total assets.

We have refined the basis of allocation for certain of our assets as of April 30, 2023 and we have restated the allocation of assets as of July 31, 2022 presented below to enhance comparability.

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.

January 31, 2023 July 31, 2022

April 30, 2023 July 31, 2022

(in thousands)

4 unchanged sentences

Net sales and operating income for each segment are provided below.

The corporate expenses line includes certain unallocated expenses, including primarily salaries, wages and benefits, purchased services, rent, utilities and depreciation and amortization associated with corporate functions such as research and development, information systems, finance, legal, human resources and customer service.

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 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 Six Months Ended January 31,

The corporate expenses line includes certain unallocated expenses, including primarily salaries, wages and benefits, purchased services, rent, utilities and depreciation and amortization associated with corporate functions such as information systems, finance, legal, human resources and customer service.

For the Nine Months Ended April 30,

Net Sales Income

5 unchanged sentences

Corporate Expenses ( 23,463 ) ( 19,603 )

Income from Operations 13,875 2,363

Income (Loss) from Operations 28,331 ( 1,664 )

Total Other (Expense) Income, Net ( 6,874 ) 892

Income before Income Taxes 11,476 3,080

Income Tax Expense ( 2,400 ) ( 524 )

Income (Loss) before Income Taxes 21,457 ( 772 )

Income Tax (Expense) Benefit ( 3,893 ) 1,195

Net Income 17,564 423

1 unchanged sentence

Net Income Attributable to Oil-Dri $ 17,632 $ 478

For the Three Months Ended January 31,

For the Three Months Ended April 30,

Net Sales Income

5 unchanged sentences

Corporate Expenses ( 6,091 ) ( 6,630 )

Income from Operations 7,306 1,918

Income (Loss) from Operations 14,456 ( 4,027 )

Total Other (Expense) Income, Net ( 4,475 ) 175

Income before Income Taxes 5,039 2,370

Income Tax Expense ( 1,193 ) ( 409 )

Net Income 3,846 1,961

Income (Loss) before Income Taxes 9,981 ( 3,852 )

Income Tax (Expense) Benefit ( 1,493 ) 1,719

Net Income (Loss) 8,488 ( 2,133 )

Net Loss Attributable to Noncontrolling Interest ( 47 ) ( 24 )

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

Net Income (Loss) Attributable to Oil-Dri $ 8,535 $ ( 2,109 )

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

As of April 30, 2023, there were 245,209 shares available for future grants under this plan.

Restricted Stock

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 .

All of our non-vested restricted stock as of April 30, 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 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.

There were 59 thousand and 122 thousand restricted shares of Common Stock granted during the third quarter of fiscal years 2023 and 2022, respectively.

Stock-based compensation was $ 0.7 million and $ 0.8 million for the third quarter of fiscal years 2023 and 2022, respectively.

Stock-based compensation expense was $ 2.3 million for the first nine months of both fiscal years 2023 and 2022, respectively.

A summary of restricted stock transactions is shown below:

5 unchanged sentences

Forfeitures ( 24 ) $ 29.22

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

Non-vested restricted stock outstanding at April 30, 2023 348 $ 32.83

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

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

The following table summarizes the changes in accumulated other comprehensive (loss) income by component as of April 30, 2023 (in thousands):

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

2 unchanged sentences

Amounts reclassified from accumulated other comprehensive income, net of tax 2,947 — 2,947

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

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

Net current-period other comprehensive income (loss), net of tax 2,947 ( 280 ) 2,667

Balance as of April 30, 2023 $ 705 $ ( 221 ) $ 484

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 $ 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.

Total net sales to that customer, including sales to subsidiaries of that customer, were $ 56 thousand and $ 111 thousand for the third quarter of fiscal years 2023 and 2022, respectively, and were $ 183 thousand and $ 268 thousand for the first nine months of fiscal years 2023 and 2022, respectively.

Outstanding accounts receivable from that customer, and its subsidiaries, were $ 6 thousand as of both April 30, 2023, and 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 $ 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.

Total payments to this vendor for fees and cost reimbursements were $ 30 thousand and $ 64 thousand for the third quarter of fiscal years 2023 and 2022, respectively, and were $ 143 thousand and $ 629 thousand for the first nine months of fiscal years 2023 and 2022, respectively.

There were no outstanding accounts payable to that vendor as of April 30, 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