What changed in this filing

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Item 1. Business

2024-10-10 compared with 2023-10-12 · 72 added, 65 removed, 252 unchanged (35% of the section changed)

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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.

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

Our principal products are described in more detail below.

Oil-Dri Corporation of America was incorporated in 1969 in Delaware as the successor to an Illinois corporation incorporated in 1946 (which was the successor to a partnership that commenced business in 1941).

For additional information on recent business developments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Part II, Item 7, incorporated herein by reference.

Oil-Dri Corporation of America was incorporated in Delaware in 1969 as the successor to an Illinois corporation incorporated in 1946 (which was the successor to a partnership that commenced business in 1941).

For additional information on recent business developments including the acquisition of Ultra Pet Company Inc., see “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Part II, Item 7, incorporated herein by reference.

P RINCIPAL P RODUCTS

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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 fiscal year 2023, 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 online retailers.

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

Private label products.

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Under the long-term supply agreement with Clorox we have the exclusive right to supply Clorox’s requirements for Fresh Step coarse cat litter up to certain levels.

Crystal litter products.

Additionally, effective May 1, 2024, as a result of the acquisition of Ultra Pet Company Inc.

("Ultra Pet") we began selling crystal cat litter made of synthetic silica-gel granules.

Similar to Oil-Dri’s clay-based lightweight litter, Ultra Pet’s crystal litter products are lightweight with superior odor control.

Crystals are 99.9% dust free and absorb up to 90% of their weight in liquid.

The product portfolio includes brands such as Ultra, Litter Pearls, and Cat's Pride, as well as many private label offerings.

These products are sold to consumers both domestically and internationally through e-commerce and brick and mortar retail stores.

Industrial and Automotive Products

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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

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

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

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

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 Retail and Wholesale Products Group customers include mass merchandisers, the farm & 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;

distributors of animal health and nutrition products.

and distributors of animal health and nutrition products.

Certain financial information on both segments is contained in Note 3 of the Notes to the Consolidated Financial Statements and is incorporated herein by reference.

F OREIGN O PERATIONS

Our foreign operations are located in Canada, which is included in the Retail and Wholesale Products Group, and the United Kingdom, China, Switzerland, Mexico and Indonesia, which are included in the Business to Business Products Group.

Our wholly-owned subsidiary, Oil-Dri Canada ULC, is a manufacturer, distributor and marketer of branded and private label cat litter in the Canadian marketplace.

Our foreign operations located in Canada and the Netherlands are included in the Retail and Wholesale Products Group, while operations in the United Kingdom, China, Switzerland, Mexico and Indonesia are included in the Business to Business Products Group.

Our wholly-owned subsidiary, Oil-Dri Canada ULC, located in Canada, is a manufacturer, distributor and marketer of branded and private label cat litter in the Canadian marketplace.

Among its leading brands are Saular, Cat’s Pride and Jonny Cat.

Our Canadian business also manufactures or purchases and sells industrial granule floor absorbents, synthetic polypropylene sorbent materials and agricultural chemical carriers.

Our wholly-owned subsidiary, Oil-Dri (U.K.) Limited, is a manufacturer, distributor and marketer of industrial floor absorbents, bleaching earth and cat litter.

Our wholly-owned subsidiary, MBA Pet BV, located in the Netherlands, which was acquired on May 1, 2024 as part of the acquisition of Ultra Pet, is a distributor of silica gel-based cat litter to the Europe region.

Our wholly-owned subsidiary, Oil-Dri (U.K.) Limited, located in the United Kingdom, is a manufacturer, distributor and marketer of bleaching earth, industrial floor absorbents and cat litter.

These products are marketed in the United Kingdom and Western Europe.

Oil-Dri (U.K.) Limited also sells synthetic polypropylene sorbent materials and plastic containment products.

Our wholly-owned subsidiary, Amlan Trading (Shenzhen) Company, Ltd., located in Shenzhen, China, is dedicated to animal health and provides natural disease management solutions for livestock.

Our wholly-owned subsidiary, Amlan Trading (Shenzhen) Company, Ltd., located in China, is dedicated to animal health and provides natural disease management solutions for livestock.

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

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.

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 wholly-owned subsidiary, Oil-Dri SARL, located in Switzerland, performs various management, customer service and administrative functions for some of the international customers of our domestic operations.

Our wholly-owned subsidiary, Agromex Importaciones, S.A de C.V, located in Mexico, sells our international animal health and nutrition products.

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

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Incorporated herein by reference are Item 1A "Risk Factors," which describes other risks that could impact our foreign operations, and Note 3 of the Notes to the Consolidated Financial Statements, which contains certain financial information about our foreign operations.

Sales to Wal-Mart Stores, Inc.

Sales to Walmart Inc.

(“Walmart”) and its affiliates accounted for approximately 20% and 19% of our total net sales for fiscal years 2024 and 2023, respectively.

Walmart is a customer in our Retail and Wholesale Products Group.

Sales to Walmart are comprised of a variety of products including but not limited to, multiple scoopable and coarse cat litter items and accessories.

Walmart is a customer in our Retail and Wholesale Products Group with whom we have a long term relationship.

There are no customers in the Business to Business Products Group with sales equal to or greater than 10% of our total sales.

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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, 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.

Cat litters based on alternative strata such as paper, various agricultural waste products and silica gels have niche positions.

Two of the principal competitors relate to our Industrial and Sports products while the other four relate to our cat litter products.

The overall cat litter market has grown in recent years, with market share of scoopable cat litter, coarse non-clumping, and crystal litter increasing in fiscal year 2024.

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

Through our acquisition of Ultra Pet, we have expanded our footprint into the silica gel-based cat litter market, which is a growing cat litter market.

Cat litters based on other alternatives, such as paper and various agricultural waste products, have niche positions.

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

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

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.

Our exceptional sales and research and development teams, as well as our being vertically integrated, gives us a further advantage over smaller and regional manufacturers.

With the acquisition of Ultra Pet and our subsequent entrance into the crystal cat litter market we continue to expand our customer offerings.

We currently have nine principal competitors in our Business to Business Products Group compared to six reported in fiscal year 2023.

This increase was due to a re-assessment of principal competitors, reflecting the growing areas of our business.

None of these competitors were new to the market.

Our bleaching clay and fluid purification products are sold in a highly cost competitive global marketplace.

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The research and development center produces prototype samples and tests new products for customer trial and evaluation.

No significant research and development was customer sponsored, and all research and development costs are expensed in the period in which incurred.

No significant research and development was customer sponsored, and all research and development costs are expensed in the period in which

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

B ACKLOG AND S EASONALITY

As of July 31, 2024 and 2023, the value of our backlog of orders were approximately $1.8 million and $3.6 million respectively.

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

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 have continued to monitor and maintain backlog at low and healthy levels reflecting mostly customer pick up delays and typical rollover orders.

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

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The risks associated with our patents (and intellectual property, generally), are discussed in Item 1A "Risk Factors."

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 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.

We mine our clay on leased or owned land near our manufacturing facilities in Mississippi, Georgia, Illinois and California and we also have reserves in Nevada and Tennessee.

We estimate that our proven mineral reserves as of July 31, 2024 were approximately 91.8 million tons in aggregate and our probable mineral reserves were approximately 132.5 million tons in aggregate, for a total of 224.3 million tons of mineral reserves.

Based on our rate of consumption during fiscal year 2024, 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 forty 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.

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The stripping, mining and hauling of our clay is performed in-house as well as by independent contractors.

Our current operating mines range in distance from immediately adjacent to approximately 11 miles from the related processing plants.

Our current operating mines range in distance from immediately adjacent to approximately eleven miles from the related processing plants.

Processing facilities are generally accessed from the mining areas by private and public roads and in some instances by public highways.

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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, 2024 (in thousands).

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

Of the mining assets, $0.9 million relates to mineral rights.

Mineral rights as of July 31, 2024 were $0.4 million and $0.5 million for our properties in Illinois and California, respectively.

Mining Assets, Net

Equipment, Net

Ochlocknee, Georgia $ 8,183 $ 4,240 $ 46,709

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Taft, California $ 384 $ 894 $ 13,901

We primarily used natural gas in the processing kilns to dry our clay products during fiscal year 2023.

We primarily use natural gas in the processing kilns to dry our clay products.

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.

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.

During fiscal years 2024 and 2023, we purchased several forward fuel contracts in Georgia and California which will cover a portion of our needs through fiscal year 2026.

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.

As part of our efforts to drive continued growth and increased profitability, we are keenly focused on building an organization that attracts and retains top talent and develops the skills necessary to drive differentiation for our business.

As of July 31, 2024, we had approximately 949 employees globally, who we refer to as our teammates, of which 892 are based in the U.S and 57 are located internationally.

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.

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“WE CARE” is an acronym for remembering our core values, which is the moral standard that we endeavor to apply to our teammates, customers, vendors, and other stakeholders.

We continuously work to reinforce these values through leading by example, training, and rewarding positive behaviors.

We continuously work to reinforce these values through leading by

example, training, and rewarding positive behaviors.

We use “WE CARE” values as a moral compass to constantly strive for continuous improvement.

These values are embedded into everything we do and are reflected in our Code of Ethics and Business Conduct, formal policies and procedures, annual training including training on workplace harassment, and a strong governance structure.

These values are embedded into everything we do and are reflected in our Code of Ethics and Business Conduct, formal policies and procedures, continuous training including training on workplace harassment, and a strong governance structure.

Our "WE CARE" values are also the basis of our formal teammate recognition process.

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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.

We have codified our compliance and ethics requirements through the Code of Ethics and Business Conduct, the Human Rights Policy, and the Whistleblower Response Policy.

Our Compliance Committee meets quarterly and is comprised of members of Oil-Dri leadership as well as the owners of our three compliance functions:

Trade, Regulatory, and Anti-Corruption.

Our Trade compliance function works to make sure we are in alignment with all applicable export laws and regulations, and screens all new international customers, distributors and/or agents against the various restricted and denied party lists before they can do business with Oil-Dri.

Our Regulatory compliance team ensures our product registrations meet the complex and multiple requirements of the various countries, as well as U.S.

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 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.

As part of the focus on addressing potential risks and ensuring a global understanding of the various applicable policies and requirements, we have also translated our Code of Ethics and Business Conduct into Mandarin and Spanish.

We have codified our compliance and ethics requirements through our Code of Ethics and Business Conduct, the Human Rights Policy, Supplier Code of Conduct and Whistleblower Response Policy.

Under the direction of the Compliance Director, the Company’s compliance program ensures adherence to the highest ethical standards and regulatory requirements, including but not limited to the Foreign Corrupt Practices Act (FCPA), the Company’s Code of Ethics and Business Conduct, Whistleblower Protection, and other applicable public company standards.

Our Board of Directors also annually attests to Oil-Dri’s Code of Ethics and Business Conduct.

The Anti-Corruption team also conducts a thorough Third-Party Due Diligence process that includes the use of compliance software.

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

The Compliance Director also conducts a thorough Third-Party Due Diligence process for new third-parties that includes the use of compliance software.

In addition, our 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.

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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.

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;

including sales teams across the globe as well as all Oil-Dri leadership personnel and other teammates in roles that support sales.

As individual hotline cases are investigated, the Company's Compliance Director 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 "WE CARE" values.

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We strive to promote a diverse and inclusive workforce for all.

Oil-Dri’s success is enhanced by striving for a workforce that reflects the diversity of the communities and countries in which we live and work.

We are committed to fostering a safe, collaborative, supporting and respectful environment that values diverse perspectives, mitigates unconscious bias and enables a culture where teammates can bring their authentic self to work.

We believe that Oil-Dri’s success is enhanced by endeavoring to attract and retain a workforce that reflects the diversity of the communities and countries in which we live and work.

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 to help our company achieve its vision and continue to grow.

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

That is why we created a Diversity, Equity and Inclusion Committee to help us live up to our "WE CARE" core values.

This committee represents a diverse group of colleagues across locations, functions and communities who are the Company’s champions for our diversity, equity, and inclusion initiatives.

The committee strives to bring awareness and understanding of human diversity as a corporate imperative by engaging teammates in pertinent conversation, training, and education.

As the committee evolves, additional programs will be introduced.

That is why we created a Diversity, Equity and Inclusion ("DEI") team to help us live up to our "WE CARE" core values.

This team represents a diverse group of colleagues across locations, functions and communities who are the Company’s champions for our diversity, equity, and inclusion initiatives.

The DEI team strives to bring awareness and understanding of human diversity as a corporate imperative by engaging teammates in pertinent conversation, training, and education through a variety of ongoing initiatives.

We believe our success largely depends upon our continued ability to attract and retain highly skilled teammates.

We have demonstrated a history of investing in our teammates by providing competitive salaries and bonuses at all levels of the Company, including a deferred compensation plan and executive deferred bonuses for our executives, and opportunities for equity ownership through our restricted stock program under our long-term incentive plan.

We have demonstrated a history of investing in our teammates by providing market competitive salaries and bonuses at all levels of the Company that are consistent with similar roles, skill levels, experience, knowledge and geographic locations where we operate.

Our executive compensation programs include a deferred compensation plan and executive deferred bonuses, as well as opportunities for equity ownership through our restricted stock program under our long-term incentive plan.

We believe this aligns the interests of our executives with those of our shareholders.

We also provide access to training and development and an attractive employment package that promotes well-being, including health care, retirement plans, and paid time off.

We support our employees’ desire to save for retirement by providing a 401(k) savings plan in which we contribute 100% of every employee dollar contributed, up to six percent (6%) of earnings and for which employees are fully vested after two (2) years of employment.

In the U.S., we support our teammates’ desire to save for retirement by providing a 401(k) savings plan in which we contribute 100% of every employee dollar contributed, up to six percent (6%) of earnings and for which employees are fully vested after two (2) years of employment.

Outside of the U.S., employees are eligible for a variety of supplemental benefits based on local market practices.

The competitive compensation and benefit package have been key to the strong retention of our employees.

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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 OSHA, the MSHA, the EPA and the Federal Trade Commission.

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 ("FDA"), the Consumer Product Safety Commission ("CPSC"), OSHA, MSHA, EPA and the Federal Trade Commission

Most states 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.

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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