What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-10-09 compared with 2024-10-10 · 273 added, 285 removed, 689 unchanged (45% of the section changed)

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of $ 9,278 and $ 8,149 in 2025 and 2024, respectively

18,907 20,036

Deferred income taxes 1,291 1,537

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Year Ended July 31,

2025 2024 2023

(in thousands, except for per share data)

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Basic Common Stock

9,889 9,771 9,651

Basic Class B Stock

3,994 3,952 3,917

Diluted Common Stock

13,883 13,723 13,568

Diluted Class B Stock

3,994 3,952 3,917

Dividends Declared Per Share

0.645 0.590 0.565

Class B Stock

0.485 0.444 0.424

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

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Year Ended July 31,

2025 2024 2023

(in thousands)

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Dividends Declared — — $ — $ — $ ( 7,509 ) $ — $ — $ — $ ( 7,509 )

Purchases of Treasury Stock — ( 25,055 ) $ — $ — $ — $ ( 1,078 ) $ — $ — $ ( 1,078 )

Net Issuance of Stock Under Long-Term Incentive Plan 63,455 ( 23,996 ) $ 7 $ 695 $ — $ ( 701 ) $ — $ — $ 1

Amortization of Restricted Stock — — $ — $ 3,147 $ — $ — $ — $ — $ 3,147

Contributions from noncontrolling interests — — $ — $ ( 685 ) $ — $ — $ — $ 437 $ ( 248 )

Balance, July 31, 2023 19,610,720 ( 5,176,325 ) $ 1,961 $ 54,778 $ 200,796 $ ( 81,207 ) $ 748 $ — $ 177,076

Net income (loss) — — — — 39,426 — — — 39,426

Other comprehensive income — — — — — — 21 — 21

Dividends declared

— — — — ( 7,975 ) — — — ( 7,975 )

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Amortization of restricted stock — — — 4,819 — — — — 4,819

Contributions from noncontrolling interests — — — ( 685 ) — — — 437 ( 248 )

Balance, July 31, 2024 19,825,170 ( 5,230,529 ) $ 1,982 $ 60,031 $ 232,247 $ ( 84,441 ) $ 769 $ — $ 210,588

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Year-Ended July 31,

2025 2024 2023

(in thousands)

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240 1,697 ( 4,431 )

Net (decrease) increase to provision for bad debts and cash discounts

Net increase (decrease) to provision for bad debts and cash discounts 559 ( 153 ) 284

Loss on impairment of patent applications 49 — 61

Accretion for asset retirement obligation 190 211 161

Loss on impairments and disposals of property, plant and equipment 314 1,044

(Gain) loss on sale of fixed assets

( 31 ) 314 1,044

(Increase) decrease in:

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Cash Flows from Financing Activities

Proceeds from long-term debt 20,000 —

Proceeds from issuance of notes payable — 20,000 $ —

Principal payments on notes payable ( 11,000 ) ( 1,000 ) ( 1,000 )

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Purchase of treasury stock ( 2,349 ) ( 2,778 ) ( 1,078 )

Net Cash Provided by (Used in) Financing Activities 8,326 ( 9,518 )

Net Cash (Used in) Provided by Financing Activities ( 21,744 ) 8,326 ( 9,518 )

Effect of exchange rate changes on cash and cash equivalents 64 204 ( 223 )

Net (Decrease) Increase in Cash and Cash Equivalents ( 7,273 ) 15,456

Net Increase (Decrease) in Cash and Cash Equivalents 25,977 ( 7,273 ) 15,456

Cash, Cash Equivalents and Restricted Cash, Beginning of Year

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Year-Ended July 31,

2025 2024 2023

(in thousands)

Supplemental disclosure:

Reconciliation of cash, cash equivalents and restricted cash

Cash and cash equivalents

Restricted Cash:

Beginning balance $ 1,000 $ — —

(Decrease) increase to restricted cash

$ ( 885 ) $ 1,000 —

Restricted cash in prepaid expenses and other assets

Final settlement of acquisition of Ultra Pet $ ( 115 ) $ — —

Ending balance $ — $ 1,000 —

Other cash flows:

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Noncash investing and financing activities:

Capital expenditures accrued, but not paid $ 7,892 $ 4,279

Change in capital expenditures in accounts payable

$ 876 458 326

Change in capital expenditures in accrued expenses $ ( 1,553 ) $ 3,380 $ 357

Cash dividends declared and accrued, but not paid $ 2,444 $ 2,096 $ 1,927

Increase in reclamation asset and liability $ 926 $ 79 $ 522

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

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

M ANAGEMENT U SE OF E STIMATES

M ANAGEMENT'S U SE OF E STIMATES

The preparation of financial statements in conformity with U.S.

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The following table provides a reconciliation of cash, cash equivalents and restricted cash as of July 31, 2025, and 2024 reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows (in thousands):

2025 2024 2023

Cash and cash equivalents

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T RADE R ECEIVABLES

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

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

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

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Past due status is determined based on contractual terms and customer payment history.

We also include an allowance for expected cash discounts to be taken.

We also include an allowance for expected cash discounts to be taken by our customers.

The composition of inventories was as follows as of July 31 (in thousands):

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The obsolescence reserve not only considers specific items but also takes into consideration the overall value of the inventory as of the balance sheet date.

We recorded inventory reserves of approximately $ 3.8 million as of July 31, 2024, and $ 3.6 million as of July 31, 2023.

We recorded inventory reserves of $ 3.7 million as of July 31, 2025, and $ 3.8 million as of July 31, 2024.

The other category of inventories includes a variety of items including clay, additives, fragrances and other supplies.

Spare parts in inventory is recorded net of a valuation reserve based on aging.

Spare parts in inventory are recorded net of a valuation reserve based on aging.

T RANSLATION OF F OREIGN C URRENCIES

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We amortize customer lists and patents on a straight-line basis over periods ranging from 18 to 20 years.

During fiscal year 2024 we recorded additions of intangible assets of $ 37.4 million related to the acquisition of Ultra Pet, the components of which are customer list of $ 20.4 million amortized over a useful life of 18 years, $ 5.2 million of trade name and $ 11.8 million of goodwill.

Intangible amortization was $ 0.5 million in fiscal year 2024 and $ 0.3 million in fiscal year 2023.

During fiscal year 2024 we recorded additions of intangible assets of $ 37.4 million related to the acquisition of Ultra Pet, the components of which were customer list of $ 20.4 million amortized over a useful life of 18 years, $ 5.2 million of trade name and $ 11.8 million of goodwill.

During fiscal year 2025, certain measurement period adjustments were made to goodwill resulting in a $ 0.6 million increase to goodwill.

Intangible amortization was $ 1.2 million, $ 0.5 million, and $ 0.3 million in fiscal years 2025, 2024, and 2023 respectively.

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

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Total intangible assets subject to amortization 16.6

Trademarks and trade names acquired through acquisition were determined to have indefinite lives.

We had $ 5.6 million and $ 0.4 million of indefinite life trademarks and trade names as of July 31, 2024 and 2023, respectively.

Trademarks and trade names acquired through acquisitions were determined to have indefinite lives.

We had $ 5.6 million in indefinite life trademarks and trade names as of both July 31, 2025, and 2024.

Goodwill by operating segment was as follows as of July 31 (in thousands):

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Impairment occurs when the carrying value exceeds the fair value.

We performed our impairment assessment and identified no triggering events in that would indicate the need for impairment of indefinite intangible assets or goodwill in either 2024 or 2023.

We performed our impairment assessment and identified no triggering events that indicate the need for impairment of indefinite intangible assets or goodwill in either 2025 or 2024.

P ROPERTY , P LANT AND E QUIPMENT

Property, plant and equipment are depreciated using the straight-line method over their estimated useful lives which are listed below.

Depreciation expense was $ 18.8 million and $ 15.3 million in fiscal years 2024 and 2023, respectively.

Property, plant and equipment are depreciated using the straight-line method over their estimated useful lives.

The useful lives for most of our depreciable assets range from 2 to 25 years, with some buildings ranging up to 30 years.

Depreciation expense was $ 20.8 million, $ 18.8 million, and $ 15.3 million in fiscal years 2025, 2024, and 2023 respectively.

Major improvements and betterments are capitalized, while maintenance and repairs that do not extend the useful life or increase functionality of the applicable assets are expensed as incurred.

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There was no capitalized interest in fiscal years 2025 and 2024.

Buildings and leasehold improvements 3 - 40

Machinery and equipment

Packaging 2 - 20

Processing 2 - 25

Mining and other 2 - 15

Office furniture and equipment 2 - 15

Vehicles 2 - 15

Capital parts 3 - 7

Property, plant and equipment are carried at cost on the Consolidated Balance Sheets and are reviewed for possible impairment on an annual basis or when circumstances indicate that an asset may be impaired.

Property, plant and equipment are carried at cost on the Consolidated Balance Sheets and are reviewed for possible impairment when circumstances indicate that an asset may be impaired.

We take into consideration idle and underutilized equipment and review business plans for possible impairment.

When impairment is indicated, an impairment charge is recorded for the difference between the carrying value of the asset and its fair market value.

In fiscal year 2024, we recognized $ 0.1 million in impairment for fixed assets no longer in use, and $ 0.9 million in fiscal year 2023.

In fiscal year 2025, we recognized no impairment for fixed assets no longer in use.

We recognized impairment for fixed assets of $ 0.1 million in fiscal year 2024 and $ 0.9 million in fiscal year 2023.

Impairment is included in cost of goods sold on the Consolidated Statement of Operations.

L AND AND M INING A SSETS

Our mining assets include mining properties, mineral rights and reclamation asset.

Our mining assets include mining properties, mineral rights and reclamation assets.

We surface mine sorbent minerals on property that we either own or lease.

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Pre-production overburden removal costs associated with opening a new mine during the development phase are deferred.

There were no capitalized pre-production costs incurred in fiscal year 2024.

In fiscal year 2023, $ 0.1 million of pre-production costs, including overburden removal costs, were capitalized.

There was no capitalized pre-production costs incurred in either fiscal year 2025 or 2024.

Capitalized development costs are amortized when the sorbent material is removed from the mine and used to produce product for sale.

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Stripping costs incurred during production are treated as a variable inventory production cost and are included in cost of goods sold.

Stripping costs included in cost of goods sold were approximately $ 5.4 million and $ 4.0 million for fiscal years 2024 and 2023, respectively.

Stripping costs included in cost of goods sold were approximately $ 4.7 million, $ 5.4 million, and $ 4.0 million for fiscal years 2025, 2024, and 2023, respectively.

Additionally, it is our policy to capitalize the purchase cost of land and mineral rights, including associated legal, survey, and real estate fees.

The costs of obtaining mineral rights, including legal fees and drilling expenses, are also

The costs of obtaining mineral rights, including legal fees and drilling expenses, are also capitalized.

As of both fiscal years ending July 31, 2025, and July 31, 2024, we had $ 13.5 million of land and $ 2.2 million of gross mineral rights.

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As overburden is removed from a mine site, it is hauled to previously mined sites and is used to refill the older sites.

This process allows us to continuously reclaim older mine sites and dispose of overburden simultaneously, therefore minimizing the costs associated with the reclamation process.

This process allows us to

continuously reclaim older mine sites and dispose of overburden simultaneously, therefore minimizing the costs associated with the reclamation process.

On an annual basis we evaluate our potential reclamation liability in accordance with ASC 410, Asset Retirement and Environmental Obligations.

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Reclamation liabilities are increased based on a yearly accretion charge over the estimated useful lives of the mines.

We recorded an estimated net reclamation asset of $ 2.2 million as of both July 31, 2024 and 2023, and a corresponding estimated reclamation liability of $ 4.8 million as of July 31, 2024 and $ 4.5 million as of July 31, 2023.

We recorded an estimated net reclamation asset of $ 3.1 million as of July 31, 2025, and $ 2.2 million as of July 31, 2024, and a corresponding estimated reclamation liability of $ 5.9 million as of July 31, 2025, and $ 4.8 million as of July 31, 2024.

These values represent the discounted present value of the estimated future mining reclamation and landfill closure costs at the production plants.

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We rely on our historical experience of trade spending patterns and that of the industry, current trends and forecast data to record estimates of our trade spending liabilities.

Advertising costs for the development of printed materials, television commercials, web-based digital banners, web-based social media and sales videos are deferred and expensed upon the first use of the materials.

Costs paid for communicating advertising over a period of time, such as television air time, radio commercials and print media advertising space, are deferred and expensed on a pro-rata basis.

All other advertising costs, including participation in industry conventions and shows and market research, are expensed when incurred.

All advertising costs are part of selling, general and administrative expenses.

Advertising expenses were approximately $ 9.1 million and $ 7.4 million in fiscal years 2024 and 2023, respectively.

F AIR V ALUE OF F INANCIAL I NSTRUMENTS

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

recorded a liability of $ 0.2 million as of July 31, 2024 for these advance payments.

There is no liability for advance payments as of July 31, 2023.

We recorded a liability of $ 0.3 million as of July 31, 2025, for these advance payments.

There is $ 0.2 million liability for advance payments as of July 31, 2024.

This liability is reported in Other Accrued Expenses on the Consolidated Balance Sheets.

There is no revenue recognized during fiscal year 2024 that was included in the liability for advance payments at the beginning of the year.

There is $ 0.2 million revenue recognized during fiscal year 2025 that was included in the liability for advance payments at the beginning of the year.

C OST OF G OODS S OLD

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S HIPPING AND H ANDLING C OSTS

Shipping and handling costs are included in cost of goods sold and were approximately $ 59.2 million and $ 57.4 million for fiscal years 2024 and 2023, respectively.

Shipping and handling costs are included in cost of goods sold and were approximately $ 64.9 million, $ 59.2 million, and $ 57.4 million for fiscal years 2025, 2024, and 2023, respectively.

S ELLING , G ENERAL AND A DMINISTRATIVE E XPENSES

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

Costs paid for communicating advertising over a period of time, such as television air time, radio commercials and print media advertising space, are deferred and expensed on a pro-rata basis.

All other advertising costs, including participation in industry conventions and shows and market research, are expensed when incurred.

All advertising costs are part of selling, general and administrative expenses.

Advertising expenses were approximately $ 7.6 million, $ 9.0 million, $ 7.3 million in fiscal years 2025, 2024, and 2023, respectively.

R ESEARCH AND D EVELOPMENT

Research and development costs of approximately $ 2.1 million and $ 1.2 million were charged to expense as incurred for fiscal years 2024 and 2023, respectively, and are recorded in selling, general and administrative expenses.

P ENSION AND P OSTRETIREMENT B ENEFIT C OSTS

We historically provided a defined benefit pension plan for eligible salaried and hourly employees and we made contributions to fund the plan.

We also provide a postretirement health benefit plan to domestic salaried employees who qualify under the plan’s provisions.

The postretirement health benefit plan is unfunded.

Our pension and postretirement health benefit plans are accounted for using actuarial valuations required by ASC 715, Compensation – Retirement Benefits .

The funded status of our defined pension and postretirement health benefit plans are recognized on the Consolidated Balance Sheets.

Changes in the funded status that arise during the period but are not recognized as components of net periodic benefit cost are recognized within other comprehensive income, net of income tax.

In fiscal year 2023 we terminated the pension plan.

See Note 9 of the Notes to the Consolidated Financial Statements for additional information.

Research and development costs of approximately $ 2.4 million, $ 2.1 million, and $ 1.2 million were charged to expense as incurred for fiscal years 2025, 2024, and 2023, respectively, and are recorded in selling, general and administrative expenses.

S TOCK -B ASED C OMPENSATION

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See Note 6 of the Notes to the Consolidated Financial Statements for additional information about income taxes.

S TOCK S PLIT

On October 9, 2024, we announced that our Board approved a two -for-one stock split in the form of a stock dividend.

Stockholders of record as of the close of business on December 20, 2024 received a distribution of one additional share of Common Stock, for each share of Common Stock held by such stockholder and one additional share of Class B Stock for each share of Class B Stock held by such stockholder as of the record date.

The additional shares were distributed on January 3, 2025, and our Common Stock began trading on a post-split basis on January 6, 2025.

The stock split did not affect the par value of the Common Stock or Class B Stock, however, in order to implement the stock split, we amended our Certificate of Incorporation on December 11, 2024 to increase the number of authorized shares of Common Stock from 15 million to 30 million.

Proportionate adjustments were made to the number of shares that remain available for issuance pursuant to the 2006 Plan, as well as to the outstanding awards under the 2006 Plan.

Unless noted, all Common Stock and Class B Stock share and per share amounts contained in the Condensed Consolidated Financial Statements have been retroactively adjusted, where applicable, to reflect the stock split.

The impact on the Condensed Consolidated Balance Sheet and Condensed Consolidated Statements of Stockholders' Equity herein was an increase of $ 0.8 million to Common Stock and Class B Stock, with an offsetting decrease in Additional Paid-In-Capital, which has been retroactively adjusted as if the stock split had occurred at the beginning of the earliest period presented.

The change in treasury shares reflects the stock split on shares held by wholly owned subsidiaries which are presented as treasury shares on a consolidated basis.

E ARNINGS P ER S HARE

We utilize the two-class method to report our earnings per share ("EPS").

The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and participation rights in undistributed earnings.

The two-class method is an earnings allocation formula that determines EPS for each class of common stock according to dividends declared and participation rights in undistributed earnings.

Common Stock is entitled to cash dividends equal to at least 133.33 % on a per share basis of the cash dividend paid on Class B Stock.

In computing earnings per share, the Company has allocated dividends declared to shares of Common Stock and Class B Stock based on amounts actually declared for each class of stock and 33.33 % more of the undistributed earnings have been allocated to shares of Common Stock than to shares of Class B Stock on a per share basis.

In computing EPS, the Company has allocated dividends declared to shares of Common Stock and Class B Stock based on amounts declared for each class of stock and 33.33 % more of the undistributed earnings have been allocated to shares of Common Stock than to shares of Class B Stock on a per share basis.

Common Stock is entitled to one vote per share and Class B Stock is entitled to ten votes per share.

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Basic EPS is computed by dividing net earnings, reduced for any distributed and undistributed earnings allocated to unvested restricted shares, by the weighted-average number of shares outstanding during the period for each class of common stock.

Diluted EPS, for each class of common stock, is computed by dividing net earnings by the weighted-average number of common shares and potential common shares outstanding during the period.

Dilution for Common Stock takes into consideration the effect of both unvested restricted shares and convertible shares of Class B Stock, if the effect is dilutive.

Dilution for Class B Stock takes into consideration the effect of unvested restricted shares, if the effect is dilutive.

Diluted EPS for Common Stock is derived utilizing the most dilutive result of the if-converted, treasury stock and two-class methods.

In our case, the if-converted method is more dilutive than the two-class method and because our unvested restricted stock participates in dividends and is therefore anti-dilutive the treasury stock method does not apply.

For Class B Stock, diluted EPS is derived utilizing the two-class method since, as with our Common Stock, our unvested restricted stock participates in dividends and is therefore anti-dilutive, making the treasury stock method inapplicable.

The reverse treasury stock method is also inapplicable to both classes as we have no obligation to repurchase our Common Stock or Class B Stock.

In both the if-converted and two-class methods, diluted EPS is computed by dividing net earnings by the weighted-average number of shares and potential shares outstanding during the period, taking into consideration different potential shares outstanding based on the method used.

Dilution for Common Stock takes into consideration the effect of both unvested restricted shares and convertible shares of Class B Stock, unless such shares are anti-dilutive, in which case they are not considered.

Dilution for Class B Stock takes into consideration the effect of unvested restricted shares, unless such shares are anti-dilutive, in which case they are not considered.

Below is a reconciliation of the calculation of basic and diluted EPS.

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Diluted EPS $ 3.70 $ 3.00

(1) The impact of 158,861 shares of unvested Common Stock and 54,370 shares of unvested Class B Stock, restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS.

(1) The impact of 275,327 shares of unvested Common Stock and 139,484 shares of unvested Class B Stock, restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS for the year ended July 31, 2025

For the year ended July 31, 2024

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Diluted EPS $ 2.72 $ 2.20

(2) The impact of 157,032 shares of unvested Common Stock and 35,695 shares of unvested Class B Stock, restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS.

(2) The impact of 317,722 shares of unvested Common Stock and 108,740 shares of unvested Class B Stock, restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS for the year ended July 31, 2024.

For the year ended July 31, 2023

(in thousands, except for per share data)

Total Common Class B

Net income $ 29,551 $ 22,712 $ 6,839

Distributed and undistributed earnings on restricted shares ( 1,518 ) ( 1,232 ) ( 286 )

Income available to stockholders $ 28,033 $ 21,480 $ 6,553

Net Income (Numerator) $ 21,480 $ 6,553

Weighted Average Shares Outstanding (Denominator) 9,651 3,917

Basic EPS $ 2.23 $ 1.67

Effect of dilution - Net Income (2)

Net income assuming dilution (Numerator) $ 28,033 $ 6,553

Effect of dilution - Shares (2)

Shares assuming dilution (Denominator) 13,568 $ 3,917

Diluted EPS $ 2.07 $ 1.67

(2) The impact of 314,064 shares of unvested Common Stock and 71,390 shares of unvested Class B Stock, restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS for the year ended July 31, 2023

N EW A CCOUNTING P RONOUNCEMENTS

Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" ("ASU 2023-07").

These amendments primarily require enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

In addition, ASU No.

2023-07 also requires all annual disclosures currently required by Topic 280 to be included in interim periods.

These amendments are to be applied retrospectively for all periods presented in the financial statements and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Refer to Note 3 - Operating Segments of this Form 10-K for the enhanced disclosures added as a result of the adoption of ASU 2023-07.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

In December 2023, the FASB issued ASU No.

2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures." These amendments primarily require enhanced disclosures and disaggregation of income tax information by jurisdiction in the annual income tax reconciliation and quantitative disclosures regarding income taxes paid.

Improvements to Income Tax Disclosures" ("ASU 2023-09").

These amendments primarily require enhanced disclosures and disaggregation of income tax information by jurisdiction in the annual income tax reconciliation and quantitative disclosures regarding income taxes paid.

These amendments are to be applied prospectively, with the option to apply the standard retrospectively, for annual periods beginning after December 15, 2024.

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In November 2024, the FASB issued ASU No.

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures." These amendments primarily require enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

In addition, ASU No.

2023-07 also requires all annual disclosures currently required by Topic 280 to be included in interim periods.

We are currently evaluating the impact that the adoption of this guidance will have on our disclosures.

Recently Adopted Accounting Standards

There have been no new accounting pronouncements adopted in the period .

2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses" ("ASU 2024-03").

The pronouncement expands the disclosure requirements for expenses, specifically by providing more detailed information about the types of expenses in commonly presented expense captions.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

We are currently evaluating the impact that ASU 2024-03 will have on the Company's consolidated financial statement disclosures.

NOTE 2 – ACQUISITION

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Ultra Pet became a wholly owned and consolidated subsidiary of Oil-Dri within the Retail and Wholesale Products Group operating segment, upon the closing of the acquisition on May 1, 2024.

The purchase was financed through cash on hand, a $ 10 million advance under the Credit Agreement, and the issuance of $ 10 million in aggregate principal amount of 6.47 % Series D Senior Notes due April 30, 2033 pursuant to the shelf facility

provisions of the Note Agreement.

Debt issuance costs of $ 0.1 million were deferred and are being amortized over the life of the note.

During fiscal year 2025, the 10 million advance under the Credit Agreement was repaid in full.

Refer to Note 4 of the Consolidated Financial Statements for additional details regarding the debt used in funding the acquisition.

As of July 31, 2024, the Company has completed a preliminary assessment to assign fair values to all tangible and intangible assets acquired and liabilities assumed.

However, the preliminary purchase price allocation will be subject to further refinement and may change over the measurement period, particularly as it relates to inventory and tax related balances.

These changes may relate to the allocation of purchase consideration to all tangible and intangible assets acquired and identified liabilities assumed.

The following table summarizes the consideration paid and the assets acquired and liabilities assumed at the acquisition date.

As of July 31, 2025, the Company has completed the assessment to assign fair values to all tangible and intangible assets acquired and liabilities assumed.

During fiscal year 2025, goodwill increased $ 0.6 million as a result of measurement period adjustments to inventory, accounts receivable, deferred tax and other assets and to account for the final purchase price adjustments.

The following table summarizes the final consideration paid and fair value of the assets acquired, and liabilities assumed at the acquisition date.

Consideration (in thousands)

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Total $ 44,413

Various fair value methodologies were used for the valuation of identifiable intangibles including the 'excess earnings method' used for the valuation of the customer list and 'relief from royalty' method use for the valuation of the trade name.

Our fair value was based on the projected financial information and unobservable inputs including revenue growth rate, weighted average cost of capital, royalty rate, and customer attrition rates.

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Ultra Pet contributed net sales of $ 4.8 million and pre-tax income of $ 0.2 million for the period from May 1, 2024, to July 31, 2024, net of acquisition adjustments including non-cash inventory fair value step up amortization included in cost of goods sold and customer list amortization included in SG&A.

The total fair value step up adjustment to inventory was $ 0.8 million of which $ 0.4 million was amortized in fiscal year 2024.

The total fair value step up adjustment to inventory was $ 0.8 million of which $ 0.4 million was amortized in fiscal year 2024 and the remainder in fiscal year 2025.

The following unaudited pro forma summary presents consolidated information of Oil-Dri as if the business combination had occurred on August 1, 2022.

(unaudited) Pro forma year ended July 31,

(unaudited- in thousands)

Pro forma year ended July 31,

Net Sales $ 455,139 $ 435,093

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These pro forma amounts above have been calculated after applying Oil-Dri’s accounting policies and adjusting the results of Ultra Pet, including the following adjustments:

(unaudited) Pro forma year ended July 31,

(unaudited- in thousands)

Pro forma year ended July 31,

Acquisition related expenses (a) $ 1,172 $ —

Interest expense (b) $( 1,158 ) $( 1,323 )

$( 1,158 ) $( 1,323 )

Customer list amortization (c) $( 850 ) $( 1,133 )

$( 850 ) $( 1,133 )

Inventory step up adjustment (d) $ 449 $( 783 )

$ 449 $( 783 )

(a) Adjustment for acquisition related expenses reflects the reversal of legal and other professional fees and integration costs incurred in fiscal year 2024.

These expenses are included in general and administrative expense on Oil-Dri consolidated income statement.

(b) Interest expense adjustments reflects higher interest expense associated with financing the Ultra Pet acquisition assuming financing occurred August 1, 2022.

(c) Customer list amortization adjustment reflects additional amortization assuming amortization began at August 1, 2022.

(b) Interest expense adjustments reflect higher interest expense associated with financing the Ultra Pet acquisition assuming financing occurred August 1, 2022.

(c) Customer list amortization adjustment reflects additional amortization assuming amortization began on August 1, 2022.

(d) Inventory step up adjustment reflects the reversal of the amortization recognized in fiscal year 2024 and recognition of the full step up adjustment in fiscal year 2023.

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Given the similar nature of products and customers, sales of our silica gel based crystal litter are included with our cat litter products and reported as part of the Retail and Wholesale products group segment.

The Business to Business Products Group customers include:

processors and refiners of edible oils, renewable diesel, petroleum-based oils and biodiesel fuel;

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;

and distributors of animal health and nutrition products.

Our operating segments are also our reportable segments.

The accounting policies of the segments are the same as those described in Note 1 of the Notes to the Consolidated Financial Statements.

Net sales for our principal products by segment are as follows (in thousands):

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Net Sales $ 182,596 $ 150,471 $ 142,395 $ 302,976 $ 287,116 $ 270,626

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

The accounting policies of the segments are the same as those described in the Note 1 of the Notes to the Consolidated Financial Statements.

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

however, we have estimated the segment asset allocations below for those assets for which we can reasonably determine.

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

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.

As of July 31,

(in thousands)

Business to Business Products $ 92,300 $ 84,424

Retail and Wholesale Products 200,187 136,262

Unallocated assets 62,118 65,549

Total Assets $ 354,605 $ 286,235

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

The corporate expenses line in the table below represents 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.

Our chief operating decision maker (“CODM”) is our President and CEO.

The CODM regularly reviews net sales, gross profit, and operating income by segment to assess profitability and assist in the allocation of resources.

Net sales and operating income for each segment are provided below, along with the Significant Segment Expense categories that are regularly provided and used by the CODM when assessing segment profitability and the allocation of resources.

The significant amounts within the segment operating expenses include cost of goods sold, compensation and benefits, and advertising.

The other operating expenses in the table below is comprised of all other SG&A expenses which include but are not limited to travel, research & development, technical service support, and amortization of intangibles.

Our CODM reviews the performance of each segment regularly by analyzing financial results in conjunction with our internal financial forecasts.

The corporate expenses line in the table below represents 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.

Corporate expenses also include the annual incentive plan bonus accrual.

We have recast 2023 segment income to conform with current year presentation.

Year Ended July 31, 2025

Net Sales Income

2024 2023 2024 2023

(in thousands)

Business to Business Products $ 150,471 $ 142,395 $ 45,589 $ 37,678

Retail and Wholesale Products 287,116 270,626 43,804 33,791

(in thousands) Business to Business Products Group

Retail and Wholesale Products Group

Net Sales $ 182,596 $ 302,976 $ 485,572

Cost of Goods Sold ( 106,691 ) ( 235,798 ) ( 342,489 )

Gross Profit 75,905 67,178 143,083

Compensation and Benefits ( 8,748 ) ( 8,366 ) ( 17,114 )

Advertising ( 1,115 ) ( 6,439 ) ( 7,554 )

Other Operating Expenses ( 6,246 ) ( 8,236 ) ( 14,482 )

Operating Income 59,796 44,137 103,933

Corporate Expenses ( 35,713 )

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Total Other Expense, Net ( 2,009 )

( 1,994 ) ( 6,362 )

Income Before Income Taxes $ 66,211

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Net Income $ 53,996

Year Ended July 31, 2024

(in thousands) Business to Business Products Group

Retail and Wholesale Products Group

Net Sales $ 150,471 $ 287,116 $ 437,587

Cost of Goods Sold ( 89,789 ) ( 222,704 ) ( 312,493 )

Gross Profit 60,682 64,412 125,094

Compensation and Benefits ( 9,109 ) ( 6,645 ) ( 15,754 )

Advertising ( 891 ) ( 8,148 ) ( 9,039 )

Other Operating Expenses ( 5,093 ) ( 5,815 ) ( 10,908 )

Operating Income 45,589 43,804 89,393

Corporate Expenses ( 37,748 )

Income from Operations 51,645

Total Other Expense, Net ( 1,994 )

Income Before Income Taxes $ 49,651

Income Tax Expense $ ( 10,225 )

Net Income $ 39,426

Year Ended July 31, 2023

(in thousands) Business to Business Products Group

Retail and Wholesale Products Group

Net Sales $ 142,395 $ 270,626 $ 413,021

Cost of Goods Sold ( 89,857 ) ( 219,937 ) ( 309,794 )

Gross Profit 52,538 50,689 103,227

Compensation and Benefits ( 8,340 ) ( 5,577 ) ( 13,917 )

Advertising ( 984 ) ( 6,363 ) ( 7,347 )

Other Operating Expenses ( 5,537 ) ( 4,957 ) ( 10,494 )

Operating Income 37,677 33,792 71,469

Corporate Expenses ( 30,429 )

Income from Operations 41,040

Total Other Expense, Net ( 6,362 )

Income Before Income Taxes 34,678

Income Tax Expense ( 5,195 )

Net Income $ 29,483

Net Loss Attributable to Noncontrolling Interest $ ( 68 )

Net Income Attributable to Oil-Dri $ 29,551

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

however, we have estimated the segment asset allocations below for those assets for which we can reasonably determine.

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

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.

As of July 31,

(in thousands)

Business to Business Products $ 104,857 $ 92,300

Retail and Wholesale Products 200,644 200,187

Unallocated assets 86,176 62,118

Total Assets $ 391,677 $ 354,605

The following is a summary by fiscal year of financial information by geographic region (in thousands):

2025 2024 2023

Sales to unaffiliated customers by:

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Foreign subsidiaries $ — $ — $ 69

Income before income taxes:

Income (Loss) before income taxes:

Domestic operations $ 66,285 $ 48,995 $ 33,686

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The percentage of consolidated net sales and net accounts receivable attributed to Walmart are shown in the table below:

2025 2024 2023

Net sales for the years ended July 31 19 % 20 % 19 %

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Interest is payable semi-annually at an annual rate of 6.47 % [Series D]

10,000 10,000

Seventh Amendment to Credit Agreement.

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Long-term debt $ 38,817 $ 49,774

We are party to an Amended and Restated Note Purchase and Private Shelf Agreement (as amended, the "Note Agreement") with PGIM, Inc.

("Prudential") and certain existing noteholders and purchasers affiliated with Prudential named therein.

Pursuant to the Note Agreement on May 15, 2020 we issued $ 10 million in aggregate principal amount of our 3.95 % Series B Senior Notes due May 15, 2030 , of which $ 6 million aggregate principal amount remained outstanding as of July 31, 2024.

On December 16, 2021 , under the Note Agreement we issued an additional $ 25 million in aggregate principal amount of our 3.25 % Series C Senior Notes due December 16, 2031 , all of which remained outstanding as of July 31, 2024.

On April 30, 2024 , we issued $ 10 million in aggregate principal amount of our 6.47 % Series D Senior Notes due April 30, 2033 , all of which remained outstanding as of July 31, 2024.

The Amended Note Agreement also provides us with the ability to request, from time to time, that Prudential affiliate(s) purchase, at Prudential’s discretion and on an uncommitted basis, additional senior unsecured notes of Oil-Dri (the “Shelf Notes,” and collectively with the Series A Notes, Series B Notes, Series C Notes, and Series D Notes, the “Notes”) in an aggregate principal amount of up to $ 75 million minus the aggregate principal amount of Notes then outstanding and Shelf Notes that have been accepted for purchase.

We are party to the Note Agreement with Prudential and certain existing noteholders and purchasers affiliated with Prudential named therein.

Pursuant to the Note Agreement, (i) on May 15, 2020 , we issued $ 10 million in aggregate principal amount of our 3.95 % Series B Senior Notes due May 15, 2030 (the "Series B Senior Notes"), of which $ 5 million aggregate principal amount remained outstanding as of July 31, 2025, (ii) on December 16, 2021 , we issued an additional $ 25 million in aggregate principal amount of our 3.25 % Series C Senior Notes due December 16, 2031 (the "Series C Senior Notes"), all of which remained outstanding as of July 31, 2025, and (iii) on April 30, 2024 we issued $ 10 million in aggregate principal amount of our 6.47 % Series D Senior Notes due April 30, 2033 (the "Series D Senior Notes"), all of which remained outstanding as of July 31, 2025.

The Note Agreement also provides us with the ability to request, from time to time until September 30, 2029 , that Prudential affiliate(s) purchase, at Prudential’s discretion and on an uncommitted basis, additional senior unsecured notes of Oil-Dri (the “Shelf Notes,” and collectively with the Series B Senior Notes, Series C Senior Notes, and Series D Senior Notes, the “Notes”) in an aggregate principal amount of up to $ 75 million minus the aggregate principal amount of Notes then outstanding and Shelf Notes that have been accepted for purchase.

Interest payable on any Shelf Note agreed to be purchased under the Note Agreement will be at a rate determined by Prudential and will mature no more than fifteen years after the date of original issue of such Shelf Note.

On August 30, 2022, we entered into Amendment No.

3 (the "Third Amendment") to the Note Agreement.

The Third Amendment modified the existing fixed charge coverage financial covenant and replaced the existing consolidated debt financial covenant with a maximum debt to earnings ratio and effected certain changes consistent with the Sixth Amendment to the Credit Agreement (defined below), including modifying the method for calculating consolidated EBITDA and the excess leverage fee.

On September 21, 2023, the Company entered into Amendment No.

4 (the “Fourth Amendment”) to the Note Agreement.

The Fourth Amendment extended the time frame for issuing and selling Shelf Notes to September 21, 2026.

The following is a schedule by fiscal year of future principal maturities of notes payable as of July 31, 2025 (in thousands):

We are party to 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.

The agreement provides for a $ 45 million unsecured revolving credit facility, including a maximum of $ 10 million for letters of credit.

We are party to the Credit Agreement with BMO Harris, which provides for a $ 75 million unsecured revolving credit facility, including a maximum of $ 20 million for letters of credit.

The Credit Agreement contains restrictive covenants that, among other things and under various conditions, limit our ability to incur additional indebtedness or to dispose of assets.

On August 30, 2022, we entered into the Sixth Amendment to the Credit Agreement (the "Sixth Amendment").

The Sixth Amendment extended the facility termination date to August 30, 2027 ;

replaced the LIBOR-based reference rate with an adjusted term Secured Overnight Financing Rate ("SOFR");

revised the method for calculating consolidated EBITDA and consolidated debt for purposes of the Credit Agreement;

modified certain restrictive covenants, including increasing the unsecured indebtedness basket from $ 50 million to $ 75 million;

and revised the existing financial covenants by replacing the consolidated debt covenant with a covenant to maintain a maximum debt to earnings ratio, lowering the minimum fixed charge coverage ratio level and revising the method for calculating the fixed charge coverage ratio.

On April 16, 2024, we entered into the Seventh Amendment to the Credit Agreement (the “Seventh Amendment”).

The Seventh Amendment amends the Credit Agreement to, among other things, revise the method for calculating consolidated EBITDA for purposes of financial covenant compliance under the Credit Agreement, provide specific conditions precedent to advance funds for the acquisition of Ultra Pet, and modify certain covenants and other provisions to permit certain indebtedness and liens of Ultra Pet and facilitate the acquisition.

As of July 31, 2024, and 2023, we were in compliance with the covenants.

As of July 31, 2024 we had $ 10 million drawn at a 6.66 % interest rate, $ 2.9 million in outstanding letters of credit and $ 32.1 million remaining available under the revolving credit facility.

As of July 31, 2023 we had $ 1 million in outstanding letters of credit and $ 44.0 million remaining available under the revolving credit facility.

The Credit Agreement states that we may select a variable interest rate based on either the BMO Harris prime rate or an adjusted SOFR-based rate, plus a margin that varies depending on our debt to earnings ratio, or a fixed rate as agreed between us and BMO Harris.

As of July 31, 2024, the variable rates would have been 8.50 % for the BMO Harris prime-based rate or 6.49 % for the adjusted SOFR-based rate.

These restrictive covenants include certain financial covenants such as a covenant to maintain a maximum debt to earnings ratio and to maintain a certain fixed charge coverage ratio.

On September 30, 2024, the Company entered into the Eighth Amendment to Credit Agreement (the “Eighth Amendment”).

The Eighth Amendment amends the Credit Agreement to, among other things:

(i) increase the amount the Company may borrow from BMO Harris from time to time pursuant to its revolving line of credit from up to $ 45 million to up to $ 75 million;

(ii) increase the aggregate maximum amount of letters of credit from up to $ 10 million to up to $ 20 million;

(iii) add an accordion provision to allow the Company to increase the revolving line of credit by up to an additional $ 50 million, subject to the terms and conditions set forth in the Eighth Amendment;

(iv) extend the termination date to September 30, 2029 ;

and (v) increase certain restrictive covenant thresholds, including but not limited to, an increase to the permitted acquisitions threshold in the restricted covenants from a cumulative total of $ 45 million to $ 100 million.

As of July 31, 2025, and July 31, 2024, we were in compliance with the restrictive covenants under the Credit Agreement.

During fiscal year 2025, there were no new borrowings;

however, we elected to pay down $ 10 million of our borrowings under the Credit Agreement.

As of July 31, 2025, we do not have any outstanding borrowings under the Credit Agreement.

We had $ 3.0 million of letters of credit outstanding under the Credit Agreement as of July 31, 2025, and $ 2.9 million as of July 31, 2024.

The Credit Agreement states that we may select a variable interest rate based on either the Bank of Montreal ("BMO") prime rate or an adjusted SOFR-based rate, plus a margin that varies depending on our debt to earnings ratio, or a fixed rate as agreed between us and BMO.

As of July 31, 2025, the variable rates would have been 7.50 % for the BMO prime-based rate or 5.55 % for the adjusted SOFR-based rate.

NOTE 5 – FINANCIAL INSTRUMENTS

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Unobservable inputs.

Cash equivalents are classified as Level 1 of the fair value hierarchy because they are valued using quoted market

prices in active markets.

These cash instruments are primarily money market funds and are included in cash and cash

equivalents on the Consolidated Balance Sheets.

Cash equivalents are classified as Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

These cash instruments are primarily money market funds and are included in cash and cash equivalents on the Consolidated Balance Sheets.

We had $ 35.3 million cash equivalents as of July 31, 2025, and had $ 3.0 million cash equivalents as of July 31, 2024.

Balances of accounts receivable, short-term investments and accounts payable approximated their fair values at July 31, 2024 and July 31, 2023 due to the short maturity and nature of those balances.

Balances of accounts receivable, short-term investments and accounts payable approximated their fair values on July 31, 2025, and July 31, 2024, due to the short maturity and nature of those balances.

Debt is reported at outstanding face value, less unamortized debt issuance costs.

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The provision for income tax expense by fiscal year consists of the following (in thousands):

2025 2024 2023

Federal $ 8,790 $ 6,059 $ 7,503

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Principal reasons for variations between the statutory federal rate and the effective rates by fiscal year were as follows:

2025 2024 2023

federal income tax rate 21.0 % 21.0 % 21.0 %

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Effective income tax rate 18.4 % 20.6 % 15.0 %

effective tax rate for the year ended July 31, 2024 and July 31, 2023 were 20.6 % and 15.0 %, respectively, based on income before taxes.

The items contributing to a higher effective tax rate in fiscal 2024 were a higher net income and certain permanent items.

The combination of tax credits claimed in fiscal year 2025 contributed to a reduction in the effective tax rate when compared to fiscal year 2024.

The Consolidated Balance Sheets included the following tax effects of cumulative temporary differences as of July 31 (in thousands):

6 unchanged sentences

Federal & State NOL carryforward

2,470 — 2,975 —

Stock-based compensation 2,214 — 1,894 —

8 unchanged sentences

Depletion — 121 — 141

Goodwill 109 — — 24

Allowance for credit losses

Deferred marketing expenses — 33 — 11

Other liabilities — 428 — 33

Tax credits — — 301 —

Other liabilities - foreign — — 8 17

1 unchanged sentence

Total deferred taxes $ 17,610 $ 16,319 $ 18,513 $ 16,968

Deferred tax assets for postretirement benefits were affected by the termination of our pension plan.

See Note 9 of the Notes to the Consolidated Financial Statements for further information about postretirement benefits.

Deferred tax assets and liabilities related to leases decrease as leases expire.

Deferred tax assets for accrued expenses reflected a higher accrual for the annual discretionary bonus.

We recorded a valuation allowance of $ 2.8 million and $ 2.5 million as of July 31, 2025 and July 31, 2024, respectively, for the amount of the deferred tax benefit related to our foreign net operating loss carryforwards and certain state net operating loss carryforwards since we believe it is unlikely we will realize the benefit of these tax attributes in the future.

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Foreign and U.S.

state jurisdictions have statutes of limitations generally ranging from three to five years .

state jurisdictions have statutes of limitations generally ranging from 3 to 5 years.

The state impact of any federal income tax changes remains subject to examination by various states for a period of up to one year after formal notification to the states.

There are a limited number of

open state and local income tax audits in which no material issues have been preliminarily identified.

There are a limited number of open state and local income tax audits in which no material issues have been preliminarily identified.

There are no material open or unsettled foreign income tax audits.

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The following table summarizes the changes in accumulated other comprehensive income by component (in thousands):

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

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

Balance as of July 31, 2023 $ 1,012 $ ( 264 ) $ 748

Other comprehensive income (loss) before reclassifications, net of tax 1,736 a) ( 323 ) 1,413

Other comprehensive income (loss) before reclassifications, net of tax 150 ( 43 ) 107

Amounts reclassified from accumulated other comprehensive income, net of tax ( 86 ) — ( 86 )

Curtailment/Settlement on Pension Plan 1,554 b) — 1,554

Net current-period other comprehensive income (loss), net of tax 64 ( 43 ) 21

4 unchanged sentences

Balance as of July 31, 2025 $ 1,205 $ ( 236 ) $ 969

a) Amount is net of $ 0.4 million of tax in fiscal years 2023.

b) Amount is net of $ 0.5 million of tax in fiscal year 2023.

Amount is included in the components of net periodic benefit cost for the pension and postretirement health plans.

See Note 9 of the Notes to the Consolidated Financial Statements for further information about pension and postretirement health benefits.

NOTE 8 – STOCK-BASED COMPENSATION

The Oil-Dri Corporation of America 2006 Long Term Incentive Plan, as amended (the “2006 Plan”), permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and cash-based awards.

The 2006 Plan permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and cash-based awards.

Our employees and outside directors are eligible to receive grants under the 2006 Plan.

4 unchanged sentences

The fair value of restricted stock was determined by the closing market price of our Common Stock on the date of grant multiplied by the number of shares granted.

Fair value of shares vested in fiscal year 2024 and 2023 is $ 9.8 million and $ 2.2 million, respectively as of their vesting dates.

Fair value of shares vested in fiscal years 2025, 2024, and 2023 is $ 6.6 million, $ 9.8 million, and $ 2.2 million, respectively as of their vesting dates.

A summary of restricted stock transactions under the plans is shown below.

12 unchanged sentences

Non-vested restricted stock outstanding at July 31, 2024 795 $ 24.82 3.4 $ 13,360

Stock-based compensation for restricted stock of $ 3.7 million and $ 2.4 million, net of related tax effect, was recognized in fiscal years 2024 and 2023, respectively.

The total restricted stock compensation related tax benefit was $ 1.2 million and $ 0.8 million in fiscal years 2024 and 2023, respectively.

NOTE 9 – PENSION AND OTHER POSTRETIREMENT BENEFITS

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

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 $ 1.9 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 $ 1.9 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.

During fiscal year 2024 we did not have an active pension plan, therefore there was no accumulated benefit obligation for the Pension Plan as of July 31, 2024 or July 31, 2023.

A postretirement health benefits plan is 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.

A 401(k) savings plan is maintained under which we match a portion of employee contributions.

This plan is available to essentially all domestic employees following a specific number of days of employment.

Our contributions to this plan, and to similar plans maintained by our foreign subsidiaries, were $ 3.9 million and $ 3.2 million for fiscal years 2024 and 2023, respectively.

Obligations and Funded Status

The following tables provide a reconciliation of changes in the plan's benefit obligations, asset fair values and funded status by fiscal year (in thousands):

Postretirement Health Benefits

Change in benefit obligation :

Benefit obligation, beginning of year $ 1,853 $ 2,119

Service cost 74 84

Interest cost 83 73

Actuarial gain ( 200 ) ( 429 )

Benefits paid ( 25 ) 6

Benefit obligation, end of year 1,785 1,853

Change in plan assets:

Fair value of plan assets, beginning of year — —

Employer contribution 25 6

Benefits paid ( 25 ) ( 6 )

Fair value of plan assets, end of year — —

Funded status, recorded in Consolidated Balance Sheets $ ( 1,785 ) $ ( 1,853 )

See “Cash Flows” below for further information about employer contributions and benefits payments.

The following table shows amounts recognized in the Consolidated Balance Sheets as of July 31 (in thousands):

Postretirement Health

Deferred income taxes $ 454 $ 478

Other current liabilities $ ( 125 ) $ ( 100 )

Other noncurrent liabilities $ ( 1,660 ) $ ( 1,753 )

Accumulated other comprehensive loss – net of tax:

Net actuarial gain $ ( 1,076 ) $ ( 1,012 )

Benefit Costs and Amortizations

The following table shows the components of the net periodic postretirement health benefit costs by fiscal year (in thousands):

Postretirement Health Benefit Cost

Service cost $ 74 $ 84

Interest cost 83 73

Amortization of:

Prior service income ( 6 ) ( 6 )

Other actuarial gain ( 107 ) ( 83 )

Net periodic benefit cost $ 44 $ 68

Service cost is recorded in Other, net within Other Income (Expense) in the Consolidated Statements of Operations.

The following table shows amounts, net of tax, that are recognized in other comprehensive income by fiscal year (in thousands):

Postretirement Health Benefits

Net actuarial gain $ ( 150 ) $ ( 324 )

Amortization of:

Prior service income 5 5

Amortization of actuarial loss 81 63

Total recognized in other comprehensive income $ ( 64 ) $ ( 256 )

The postretirement health plan is an unfunded plan.

Our policy is to pay health insurance premiums and claims from our assets.

The following table shows the estimated future benefit payments by fiscal year (in thousands):

Postretirement

Health Benefits

2030-2034 $ 809

Our postretirement health benefit obligations and the related effects on operations are calculated using actuarial models.

Critical assumptions that are important elements of plan expenses and asset/liability measurements include discount rate and health care cost trend for the postretirement health plan.

We evaluate these critical assumptions at least annually.

Other assumptions involving demographic factors such as retirement age, mortality and turnover are evaluated periodically and are updated to reflect our experience and to meet regulatory requirements.

Actual results in any given year will often differ from actuarial assumptions because of economic and other factors.

The discount rate was based on the FTSE Pension Discount Curve to determine the single equivalent rate that would yield the same present value as the specific plan’s expected cash flows.

The discount rates for net periodic benefit costs were 4.90 % and 3.82 % in fiscal years 2024 and 2023, respectively.

The discount rates for year-end obligations were 5.03 % and 4.90 % as of July 31, 2024 and 2023, respectively.

For fiscal year 2024, the medical cost trend assumption used for the postretirement health benefit cost was 7.9 %.

The graded trend rate is expected to decrease to an ultimate rate of 4.9 % in fiscal year 2044 .

Granted 143 $ 38.29

Vested ( 183 ) $ 20.17

Forfeited ( 27 ) $ 27.76

Non-vested restricted stock outstanding at July 31, 2025 728 $ 28.52 3.0 $ 12,713

Stock-based compensation for restricted stock of $ 4.1 million, $ 3.7 million, and $ 2.4 million, net of related tax effect, was recognized in fiscal years 2025, 2024, and 2023, respectively.

The total restricted stock compensation related tax benefit was $ 1.3 million, $ 1.2 million, and $ 0.8 million in fiscal years 2025, 2024, 2023, respectively.

NOTE 9 – DEFERRED COMPENSATION

Oil-Dri's deferred compensation plans permit directors and certain management employees to defer portions of their compensation and to earn interest on the deferred amounts.

Participants deferred $ 0.3 million and $ 0.6 million into these plans in fiscal years 2024 and 2023, respectively.

We recorded $ 0.2 million of interest expense associated with these plans in both fiscal years 2024 and 2023.

Payments to participants were $ 0.4 million and $ 0.9 million in fiscal years 2024 and 2023, respectively, and the total liability recorded for deferred compensation was $ 5.0 million and $ 4.6 million as of July 31, 2024 and 2023, respectively.

Participants deferred $ 0.6 million, $ 0.3 million, and $ 0.6 million into these plans in fiscal years 2025, 2024, and 2023, respectively.

We recorded interest expense of $ 0.3 million, $ 0.2 million, and $ 0.2 million related to these plans in fiscal years 2025, 2024, and 2023, respectively.

Payments to participants were $ 0.2 million, $ 0.4 million, and $ 0.9 million in fiscal years 2025, 2024, and 2023, respectively, and the total liability recorded for deferred compensation was $ 5.6 million, $ 5.0 million, and $ 4.6 million as of July 31, 2025, 2024, and 2023, respectively.

The Oil-Dri Corporation of America Annual Incentive Plan provides certain executives with the opportunity to receive a deferred executive bonus award if certain financial goals are met.

Deferred executive bonus awards of $ 1.9 million and $ 1.4 million were awarded for fiscal year 2024 and fiscal year 2023, respectively as financial targets under the provisions of the plan were achieved.

Deferred executive bonus awards of $ 1.4 million, $ 1.9 million, and $ 1.4 million were awarded for fiscal years 2025, 2024, and 2023, respectively as financial targets under the provisions of the plan were achieved.

These awards will vest and accrue interest over a 3-year period.

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NOTE 10 - ACCRUED EXPENSES

Accrued expenses is as follows (in thousands):

Accrued expenses are as follows (in thousands):

2025 July 31,

1 unchanged sentence

Payables 13,036 11,586

Freight 2,928 3,078

Trade promotions and advertising 3,105 2,743

Freight 2,700 2,928

Taxes 2,249 1,736

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While it is not possible at this time to determine with certainty the ultimate outcome of these or other lawsuits, we believe that none of the pending proceedings will have a material adverse effect on our business, financial condition, results of operations or cash flows.

In the second quarter of fiscal year 2023, we recorded a reserve of $ 2.5 million for anticipated modification costs that we expected to incur to address capacity issues at our sole landfill located in Ochlocknee, Georgia.

In fiscal year 2023, we recorded a reserve of $ 2.5 million for anticipated modification costs that we expected 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 represented management’s best estimate of the costs for the modification with respect to this matter, at the time.

During fiscal year 2024, work began on the modifications and we recorded an additional reserve of $ 0.6 million to reflect an update to our best estimate.

This has been offset by $ 1.9 million of payments made to date.

Work began on the modifications during fiscal year 2024.

We increased the total estimated cost by $ 0.6 million and $ 0.7 million in fiscal years 2024 and 2025, respectively, resulting in a total $ 3.8 million expense related to this matter.

The modification work is expected to be completed during fiscal year 2026.

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

Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing government 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.

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We have operating leases primarily for real estate properties, including corporate headquarters, customer service and sales offices, manufacturing and packaging facilities, warehouses, and research and development facilities, as well as for rail tracks, railcars and office equipment.

Certain of our leases for a shared warehouse and office facility, rail track and railcars have options to extend which we are reasonably certain we will exercise and, accordingly, have been considered in the lease term used to recognize our ROU assets and lease liabilities.

Our leases for a shared warehouse, office facility, and railcars have options to extend which we are reasonably certain we will exercise and, accordingly, have been considered in the lease term used to recognize our ROU assets and lease liabilities.

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

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For the Twelve Months Ended July 31,

2025 2024 2023

Operating lease cost $ 5,320 $ 3,791 $ 2,640

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For the Twelve Months Ended July 31,

2025 2024 2023

Other Information

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For the Twelve Months Ended July 31,

Weighted-average remaining lease term - operating leases 5.4 years 7.7 years

2025 2024 2023

Weighted-average remaining lease term - operating leases 4.8 years 5.4 years 7.7 years

Weighted-average discount rate - operating leases 5.12 % 5.10 % 4.03 %

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NOTE 13 – RELATED PARTIES

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

Total payments to this vendor for fees and cost reimbursements were $ 2.0 million and $ 0.2 million for fiscal years 2024 and 2023, respectively.

There were $ 0.1 million of outstanding fees due to that vendor as of July 31, 2024.

There were no outstanding amounts due to that vendor as of July 31, 2023.

One member of our Board of Directors retired from the role of President and Chief Executive Officer of a customer of ours on September 28, 2019 and is currently party to a post-employment consulting agreement with the customer.

Total sales to that customer, including sales to subsidiaries of that customer, were $ 0.2 million for both fiscal year 2024 and 2023.

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 $ 1.6 million, $ 2.0 million, and $ 0.2 million for fiscal years 2025, 2024, and 2023, respectively.

There were no outstanding fees due to that vendor as of July 31, 2025.

There were $ 0.1 million outstanding amounts due to that vendor as of July 31, 2024.

One member of our Board retired from the role of President and Chief Executive Officer of a customer of ours on September 28, 2019, and was party to a post-employment consulting agreement with the customer until September 30, 2025.

Total sales to that customer, including sales to subsidiaries of that customer, were $ 0.4 million for fiscal year 2025 and $ 0.2 million for both fiscal year 2024 and 2023.

There were no outstanding amounts due from that customer as of July 31, 2025, or 2024.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

of Directors and Shareholders

Board of Directors and Shareholders

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Opinions on the financial statements and internal control over financial reporting

We have audited the accompanying consolidated balance sheets of Oil-Dri Corporation of America (a Delaware corporation) and subsidiaries (the “Company”) as of July 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended July 31, 2024, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheets of Oil-Dri Corporation of America (a Delaware corporation) and subsidiaries (the “Company”) as of July 31, 2025 and 2024, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended July 31, 2025, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of July 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended July 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended July 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

Basis for opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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We believe that our audits provide a reasonable basis for our opinions.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of Ultra Pet Company Inc.

(“Ultra Pet”), a wholly-owned subsidiary, whose financial statements reflect total assets and net sales constituting 3% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended July 31, 2024.

As indicated in Management’s Report, Ultra Pet, was acquired during 2024.

Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of Ultra Pet.

Emphasis of matter

As discussed in Note 3 to the consolidated financial statements, the Company has adopted new accounting guidance in 2025 related to the accounting for the adoption of Accounting Standards Update ("ASU") No.

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" ("ASU 2023-07").

The amendments in ASU 2023-07 were applied retrospectively for all periods presented in the financial statements.

Our opinion is not modified with respect to this matter.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisition of Ultra Pet Company Inc.

- Valuation of Trade Name and Customer List Intangible Assets

As described further in Note 2 to the financial statements, the Company acquired Ultra Pet Company Inc.

(“Ultra Pet”), on May 1, 2024 for a total purchase price of approximately $44.3 million, net of cash acquired.

The Company has recorded, on a preliminary basis, the assets acquired and liabilities assumed based on their estimated fair values, including customer list and trade name intangible assets of $20.4 million and $5.2 million, respectively.

We identified the valuation of acquired Ultra Pet customer list and trade name intangible assets as a critical audit matter.

The principal considerations for our determination that the valuation of acquired Ultra Pet customer list and trade name intangible assets is a critical audit matter are (i) the significant judgment by management when determining assumptions used in the fair value measurement of acquired intangible assets (ii) the high degree of auditor judgment and subjectivity in performing procedures and evaluating management’s significant assumptions relating to the projected financial information including revenue growth rate, weighted average cost of capital (WACC), royalty rate, and customer attrition rates and (iii) the audit effort involved the use of professionals with specialized skills and knowledge.

Our audit procedures related to the valuation of the acquired customer list and trade name intangible assets included the following, among others:

• we tested the design and operating effectiveness of the controls over the Company’s acquisition and valuation process, including review of the valuation model, significant assumptions used, and the completeness and accuracy of the underlying data used

• we tested the projected financial information including forecasted revenue growth rate by assessing the reasonableness of management’s forecasts compared to historical results and forecasted industry trends

• with the assistance of our valuation specialists, we assessed the assumptions and methodologies used in developing the WACC, royalty rate, and customer attrition rates by developing a range of independent estimates and comparing those to the rates selected by management.

Critical audit matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

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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 8. Financial Statements and Supplementary Data