What changed in this filing

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Item 1. Business

2023-10-12 compared with 2022-10-13 · 48 added, 53 removed, 269 unchanged (27% of the section changed)

9 unchanged sentences

Adsorbent products attract impurities in liquids, such as metals and surfactants, and form low-level chemical bonds.

Examples of our adsorbent products are our Ultra-Clear clarification clays.

Our Pure-Flo, Supreme, Perform and Select bleaching clay products act as purification media for edible and non-edible oils.

Examples of our adsorbent products include Ultra-Clear, Pure-Flo, Supreme, Perform, Select, Metal-X and Metal-Z which act as purification mediums for edible and non-edible oils.

We also sell nonclay-based products, such as our Oil-Dri synthetic sorbents used for automotive, industrial and marine cleanup as well as plastic cat litter box liners.

23 unchanged sentences

The sales force for our subsidiaries located in China, Mexico and Indonesia also sells these products, as further described in Foreign Operations below.

Bleaching Adsorbent Products

We produce an array of adsorbent products for bleaching, purification and filtration applications that are used around the world by edible oil processors, as well as by refiners of jet fuel and other petroleum-based products.

Fluids Purification Products

Bleaching clays are used by edible oil processors to adsorb soluble contaminants that promote oxidation problems.

14 unchanged sentences

Our Cat's Pride litters created the lightweight segment of the scoopable litter market.

Late this fiscal year, we launched Cat’s Pride Antibacterial Clumping Litter which is the first and only Environmental Protection Agency (“EPA”) approved antibacterial cat litter in the United States.

In addition, we offer our non-clumping litter in a pre-packaged, disposable tray under the Cat’s Pride KatKit brand.

Moreover, we offer litter box liners under the Cat's Pride and Jonny Cat product lines.

These products are sold through independent food brokers and by our sales force to major grocery, drug, dollar store, mass-merchandiser and pet outlets, as well as through e-commerce.

These products are sold through independent food brokers and by our sales force to major grocery, drug, dollar store, mass-merchandiser and pet outlets, as well as through online retailers.

Private label products.

2 unchanged sentences

Co-packaged products.

We have a long-term supply arrangement with A&M Products Manufacturing Company, a subsidiary of The Clorox Company ("Clorox") (which is material to our business) under which we manufacture branded non-clumping litters.

We have a long-term supply arrangement with A&M Products Manufacturing Company, a subsidiary of The Clorox Company ("Clorox"), under which we manufacture branded non-clumping litters.

Under this co-manufacturing relationship, the marketer controls all aspects of sales, marketing, and distribution, as well as the odor control formula, and we are responsible for manufacturing.

13 unchanged sentences

Pro Mound packing clay is used to construct pitcher’s mounds, catcher's stations and batter’s boxes.

Rapid Dry drying agent is used to wick away excess water from the infield.

Rapid Dry drying agent is used to wick away excess water from the

Sports products are used at all levels of play, including professional, college and high school and on municipal fields.

3 unchanged sentences

the Retail and Wholesale Products Group and the Business to Business Products Group.

The Retail and Wholesale Products Group customers include mass merchandisers, wholesale clubs, drugstore chains, pet specialty retail outlets, dollar stores, retail grocery stores, direct customers through e-commerce, distributors of industrial cleanup and automotive products, environmental service companies and users of sports field products and sports turf materials.

The Business to Business Products Group customers include processors and refiners of edible oils, petroleum-based oils and biodiesel fuel;

The Retail and Wholesale Products Group customers include mass merchandisers, the farm and fleet channel, drugstore chains, pet specialty retail outlets, dollar stores, retail grocery stores, online retailers, co-packaged products customers, distributors of industrial cleanup and automotive products, environmental service companies and users of sports field products and sports turf materials.

The Business to Business Products Group customers include processors and refiners of edible oils, renewable diesel, petroleum-based oils and biodiesel fuel;

manufacturers of animal feed and agricultural chemicals;

11 unchanged sentences

This subsidiary sells animal health and nutrition products under our Amlan brand name and under private label arrangements.

PT Amlan Perdagangan Internasional, another of our wholly-owned subsidiaries, is located in Indonesia and also distributes our animal health and nutrition products.

Our wholly-owned subsidiary, PT Amlan Perdagangan Internasional, located in Indonesia also distributes our animal health and nutrition products.

Our wholly-owned subsidiary, Oil-Dri SARL, is a Swiss company that performs various management, customer service and administrative functions for some of the international customers of our domestic operations.

We own a 78.4% interest in a distributor in Mexico, Agromex Importaciones, S.A de C.V.

This distributor sells, among other products, our animal health and nutrition products.

Effective May 12, 2023 we acquired the remaining equity of Agromex Importaciones, S.A de C.V, which is now a wholly-owned subsidiary.

Previously we owned 78.4% of the equity of this entity.

This Mexican subsidiary sells our international animal health and nutrition products.

Our foreign operations are subject to the normal risks of doing business in non-U.S.

1 unchanged sentence

however, historically our operating results have not been materially impacted by these factors.

Incorporated herein by reference are Item 1A.

Risk Factors, which describes other risks that could impact our foreign operations, and Note 2 of the Notes to the Consolidated Financial Statements, which contains certain financial information about our foreign operations.

Incorporated herein by reference are Item 1A "Risk Factors", which describes other risks that could impact our foreign operations, and Note 2 of the Notes to the Consolidated Financial Statements, which contains certain financial information about our foreign operations.

Sales to Wal-Mart Stores, Inc.

8 unchanged sentences

These competitors may be able to spend more aggressively on advertising and promotional activities, introduce competing products more quickly and respond more effectively to changing business and economic conditions than us.

We have six principal competitors in our Retail and Wholesale Products Group, including one of which is also our customer.

We have six principal competitors in our Retail and Wholesale Products Group, one of which is also our customer.

Two of the principal competitors relate to our Industrial and Sports products.

The overall cat litter market has grown in recent years.

The overall cat litter market has grown in recent years, with market share of both scoopable cat litter and coarse non-clumping litter increasing in fiscal year 2023.

The overwhelming majority of all cat litter is mineral based, including both scoopable and coarse non-clumping litters.

1 unchanged sentence

Scoopable products have a majority of the cat litter market share followed by coarse non-clumping litters.

The market share for scoopable cat litter and coarse non-clumping litter share decreased slightly during fiscal year 2022.

There is significant competition to attract cat litter consumers across multi-outlet channels, including grocery, mass-merchandiser, dollar, pet and drug stores, as well as through e-commerce.

Competition for the scoopable litter market has been particularly intense with new product offerings and increased advertising and promotions by our competitors and by us.

There is significant competition to attract cat litter consumers across multi-outlet channels, including grocery, mass-merchandiser, dollar, pet and drug stores, as well as through online retailers.

Competition for the scoopable litter market continues to be impacted by new product offerings and increased advertising and promotions by our competitors and by us.

We provide our customers with product innovation, a nation-wide distribution network and strong customer service.

Our exceptional sales and research and development teams give us a further advantage over smaller and regional manufacturers.

Our exceptional sales and research and development teams, as well as vertical integration give us a further advantage over smaller and regional manufacturers.

We have six principal competitors in our Business to Business Products Group.

12 unchanged sentences

See Note 1 of the Notes to the Consolidated Financial Statements for further information about research and development expenses.

As of July 31, 2022 and 2021, the value of our backlog of orders were approximately $6,622,000 and $3,729,000 respectively.

As of July 31, 2023 and 2022, the value of our backlog of orders were approximately $3.6 million and $6.6 million respectively.

Certain customers place orders for a full year of orders with future requested ship dates.

1 unchanged sentence

This value was determined by the number of tons on backlog order and the net selling prices.

In previous periods, we reported backlog values based on the broader definition of backlog as purchase orders that we have received from customers and that we have accepted, but that have not yet shipped.

By increasing personnel, expanding production shifts, optimizing equipment, and utilizing alternative modes of transportation, we have been able to reduce our backlog over fiscal year 2023.

We consider our business, taken as a whole, to be moderately seasonal;

9 unchanged sentences

We mine our clay on leased or owned land near our manufacturing facilities in Mississippi, Georgia, Illinois and California;

we also have reserves in Nevada, Oregon and Tennessee.

We estimate that our proven mineral reserves as of July 31, 2022 were approximately 101,393,000 tons in aggregate and our probable reserves were approximately 176,352,000 tons in aggregate, for a total of 277,745,000 tons of mineral reserves.

Based on our rate of consumption during fiscal year 2022, and without regard to any of our reserves in Nevada, Oregon and Tennessee, we consider our proven and probable reserves adequate to supply our needs for over 40 years.

we also have reserves in Nevada and Tennessee.

We estimate that our proven mineral reserves as of July 31, 2023 were approximately 92.1 million tons in aggregate and our probable reserves were approximately 138.5 million tons in aggregate, for a total of 230.6 million tons of mineral reserves.

Based on our rate of consumption during fiscal year 2023, and without regard to any of our reserves in Nevada or Tennessee, we consider our proven and probable reserves adequate to supply our needs for over 40 years.

Although we consider these reserves to be extremely valuable to our business, only a small portion of the reserves, those which were acquired in acquisitions, are reflected at cost on our balance sheet.

19 unchanged sentences

The following schedule summarizes the net book value of land and other plant and equipment for each of our manufacturing facilities as of July 31, 2023 (in thousands).

Of the land and mineral rights, $2,165 relates to mineral rights.

Mineral rights as of July 31, 2022 were $1,205, $835 and $125 for our properties in Illinois, California, and Georgia, respectively.

Of the land and mineral rights, $2.2 million relates to mineral rights.

Mineral rights as of July 31, 2023 were $1.2 million, $0.8 million and $0.1 million for our properties in Illinois, California, and Georgia, respectively.

Land & Mineral Rights Plant and

6 unchanged sentences

We monitor gas market trends and we may contract for a portion of our anticipated fuel needs using forward purchase contracts to mitigate the volatility of our kiln fuel prices.

We do not have any forward purchase contracts as of the fiscal year ended July 31, 2022.

H UMAN CAPITAL MANAGEMENT AND RESOURCES

During fiscal year 2022, we had approximately 869 employees, who we refer to as our teammates.

119, 15, and 688 of our U.S.

During fiscal year ended July 31, 2023, we purchased several forward fuel contracts to cover a portion of our fuel needs in Georgia and California.

H UMAN CAPITAL MANAGEMENT

During fiscal year 2023, we had approximately 884 employees, who we refer to as our teammates of which 121, 18, and 704 of our U.S.

teammates work in our corporate functions, research and development and manufacturing, respectively.

In addition, 41 of our teammates are employed by our foreign subsidiaries in corporate and manufacturing functions.

We believe our corporate offices, research and development center and manufacturing facilities are currently adequately staffed but there is no guarantee that, given the current state of the on-going novel coronavirus pandemic ("the coronavirus" or "COVID-19") and macro-economic environment, that this will always be possible.

We believe our corporate offices, research and development center and manufacturing facilities are currently adequately staffed but there is no guarantee that this will always be possible.

Approximately 71 of our teammates in the U.S.

14 unchanged sentences

Oil-Dri’s ethical culture is one of our greatest strengths and areas of emphasis by our Board of Directors and management team.

Our CEO is frequently asked to speak on this topic at local business schools, including the Kellogg School of Management at Northwestern, and Marquette University.

Our CEO is asked to speak on this topic at local business schools, including the Kellogg School of Management at Northwestern, and Marquette University.

Our CEO’s continued messaging to all Oil-Dri teammates about the importance of our ethical culture helps maintain a strong tone at the top for our entire organization.

5 unchanged sentences

states, in which we do business.

Our Anti-Corruption compliance team works with Human Resources to address potential risks related to compliance with anti-corruption regulations in various jurisdictions, including by ensuring that teammates attest to Oil-Dri’s Code of Ethics and Business Conduct, which was updated in 2021, and that the Company’s Code of Ethics and Business Conduct provides appropriate tools and guidance to the Company’s teammates.

Our Anti-Corruption compliance team works with Human Resources to address potential risks related to compliance with anti-corruption regulations in various jurisdictions, including by ensuring that teammates attest to Oil-Dri’s Code of Ethics and Business Conduct, which was updated in fiscal year 2021, and that the Company’s Code of Ethics and Business Conduct provides appropriate tools and guidance to the Company’s teammates.

These two groups also work together to make sure teammates understand the specific requirements around conflicts of interest, including any disclosures where relevant.

3 unchanged sentences

Third parties are selected for this process based on a risk analysis that includes potential interaction with government officials as well as the Corruption Perception Index published by Transparency International (an international non-profit) of the countries in which they do business.

In addition, distributors and agents agreements include a mandatory anti-corruption regulatory compliance section.

In addition, distributor and agent agreements include a mandatory anti-corruption regulatory compliance section.

Oil-Dri has strong policies and procedures in place for anti-corruption and conflicts of interest.

This includes training and attestation requirements where appropriate.

Oil-Dri is committed to whistleblower protection and uses a third-party anonymous hotline where teammates across the globe can reach out via phone or internet with any concerns they may have and be ensured of anonymity in reporting if they so desire.

Oil-Dri is committed to whistleblower protection and uses a third-party anonymous hotline available on our website, where teammates or third parties across the globe can reach out via phone or internet with any concerns they may have and be ensured of anonymity in reporting if they so desire.

The Company has documented and implemented procedures to ensure the protection of whistleblowers' employment status as well as protection from harassment in the workplace.

Our anti-corruption training emphasizes the necessity of whistleblower procedures, protection, and zero tolerance for retaliation.

This training is given within the first few months of hire to all new teammates in international locations, and to those with sales and/or leadership roles that interact with customers and/or teammates outside the U.S.

This training is given within the first few months of hire to new teammates with sales and/or leadership roles that interact with customers and/or teammates outside the U.S.

Additionally, anti-corruption training is repeated annually at our Global Sales Meeting for all attending teammates;

these are sales teams across the globe as well as all Oil-Dri leadership personnel.

Sales teams that have an international focus receive additional training at this meeting, which allows for more small group discussion and a chance to ask about individual compliance risks and experiences.

As individual hotline cases are investigated, the Company's Compliance Department works with Human Resources and any other teammates involved in the investigation to ensure confidentiality is maintained and whistleblowers are protected;

our compliance training emphasizes that this is not only required by law, but clearly fits with our WECARE values.

our compliance training emphasizes that this is not only required by law, but clearly fits with our "WE CARE" values.

All cases are investigated to conclusion, with follow up provided, where possible, on an anonymous basis back to the whistleblower through the anonymous third-party hotline.

5 unchanged sentences

We embrace all people, regardless of race, sex, gender identity, age, religion, nationality, physical ability or sexual orientation.

Diverse perspectives are encouraged and needed in order help our company achieve its vision and continue to grow.

Diverse perspectives are encouraged and needed in order to help our company achieve its vision and continue to grow.

We are committed to cultivating and preserving a culture of inclusion.

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The success of our business is fundamentally connected to the well-being of our teammates.

As such, the health and wellness of our teammates is a top priority of ours.

As such, the health and wellness of our teammates is a top priority.

We offer robust and generous benefit programs to those who qualify, which include, but are not limited to, health, prescription drug, dental, life insurance and disability insurance.

5 unchanged sentences

Workplace Flexibility

During fiscal year 2022, Oil-Dri established a hybrid work environment for non-manufacturing teammates with the option for some positions to be 100% remote.

During fiscal year 2023, Oil-Dri continued a hybrid work environment for non-manufacturing teammates with the option for some positions to be 100% remote.

Oil-Dri offers a wide range of employment opportunities including full and part-time positions which support our Work/Life Balance values.

17 unchanged sentences

We are committed to operating in a manner that protects the health and safety of our workforce and our communities and ensures decisions are consistent with a long-term view of sustainability and stewardship.

Through our corporate safety department, we implemented a safety auditing program for adherence to local, state and federal safety standards and regulations including MSHA and OSHA.

Through our corporate safety department, we implemented a safety auditing program for adherence to local, state and federal safety standards and regulations including those of the Mine Safety and Health Administration ("MSHA") and the Occupational Safety and Health Administration ("OSHA").

These audits are conducted annually for global operations by third-party consultants enforcing a rigorous assessment of regulatory standards, internal procedures and program performance.

2 unchanged sentences

We continually increase the rigor and level of scrutiny to drive continuous improvement in our operations.

In response to COVID-19, we implemented significant safety changes which comply with government regulations.

This included work from home arrangements for our teammates who can perform their jobs offsite and additional safety measures (including, among other actions, the provision of PPE and implementation of vigorous cleaning and sanitation protocols) for teammates continuing critical on-site work.

G OVERNMENT AND E NVIRONMENTAL R EGULATION AND C OMPLIANCE

We are subject to a variety of federal, state, local and foreign laws and regulatory requirements relating to the environment and to health and safety matters.

In particular, our mining and manufacturing operations and facilities in Georgia, Mississippi, California and Illinois are required to comply with state surface mining and environmental protection statutes as well as the workplace safety requirements of the Mine Safety and Health Administration (“MSHA”).

These domestic locations and our Canadian operations are subject to various federal, state and local statutes, regulations, ordinances, building codes, and permitting and licensing requirements which govern the discharge, storage and disposal of materials, water and waste into the environment, maintenance of our locations or otherwise regulate our operations.

These domestic locations and our Canadian operations are subject to various federal, state, provincial and local statutes, regulations, ordinances, building codes, and permitting and licensing requirements which govern the discharge, storage and disposal of materials, water and waste into the environment, maintenance of our locations or otherwise regulate our operations.

In recent years, regulation and enforcement have grown increasingly stringent, a trend that we expect will continue.

3 unchanged sentences

As part of our ongoing environmental compliance activities, we incur expenses in connection with reclaiming mining sites.

Historically, reclamation expenses have not had a material effect on our cost of sales.

Historically, reclamation expenses have not had a material effect on our cost of goods sold.

In addition to the environmental, health and safety requirements related to our mining and manufacturing operations and facilities, there has been increased federal, state and international regulation with respect to the content, labeling, use, packaging, registration, trade compliance, advertising, and disposal of products that we sell.

For example, in the United States, some of our operations, products, product claims, labeling and advertising are regulated by the Food and Drug Administration, the Consumer Product Safety Commission, the Occupational Safety and Health Administration, the Mine Safety and Health Administration, the Environmental Protection Agency and the Federal Trade Commission.

Most states have agencies that regulate in parallel to these federal agencies.

For example, in the United States, some of our operations, products, product claims, labeling and advertising are regulated by the Food and Drug Administration, the Consumer Product Safety Commission, the OSHA, the MSHA, the EPA and the Federal Trade Commission.

have agencies that regulate in parallel to these federal agencies.

In addition, our international sales and operations are subject to regulation in each of the foreign jurisdictions in which we manufacture, distribute or sell our products.

5 unchanged sentences

Additionally, we could be required to alter our operations in order to comply with any new standards or requirements under environmental laws or regulations.

See Item 1A “Risk Factors” below for a discussion of the impact of government regulations on our business and other risks to our business.

See Item 1A “Risk Factors - Risks Related to Regulatory Compliance” below for a discussion of the impact of government regulations on our business and other risks to our business.

A VAILABLE I NFORMATION

This Annual Report on Form 10-K, as well as our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to all of the foregoing reports, are made available free of charge on or through the “Investor Information” section of our website at www.oildri.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.

Information related to corporate governance at Oil-Dri, including its Code of Ethics and Business Conduct, information concerning executive officers, directors and Board committees, and transactions in Oil-Dri securities by directors and executive officers, is available free of charge on or through the “Investor Information” section of our website at www.oildri.com.

This Annual Report on Form 10-K, as well as our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to all of the foregoing reports, are made available free of charge on or through the “Investors” section of our website at www.oildri.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.

The information on our website in not included as a part of, nor incorporated by reference into, this Annual Report on Form 10-K.

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-K

Item 1. Business