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Apr 30, 2020
Oil-Dri Q3 2020 Earnings Report
Oil-Dri's Q3 2020 results were announced, marked by record net sales and increased operating income, driven by high demand for cat litter and resilient business-to-business operations.
Key Takeaways
Oil-Dri Corporation of America reported record net sales of $76.3 million for the third quarter of fiscal 2020, an 8% increase compared to the same period last year. This growth was primarily driven by high demand for cat litter due to the COVID-19 pandemic and strong performance in the Business to Business Group. Consolidated operating income increased by 145% to $5.7 million, while diluted earnings per share were $0.61.
Record quarterly consolidated net sales reached $76.3 million, an 8% increase year-over-year.
Consolidated gross margins improved to 28% due to lower freight and natural gas costs.
Operating income grew by 145% to $5.7 million, driven by increased sales and lower costs.
Retail and Wholesale Products Group experienced record sales, with a 20% increase in domestic cat litter revenues due to COVID-19 related demand.
Oil-Dri
Oil-Dri
Oil-Dri Revenue by Segment
Revenue by Segment
Business to Business Revenue
CapyFin.comRetail and Wholesale Revenue
CapyFin.com Forward Guidance
The company did not provide specific forward guidance, but expects advertising costs for the full fiscal year to be higher than last year.
Positive Outlook
- Company is adapting to the evolving situation and working hard to keep business running to meet the changing needs of customers.
- Manufacturing facilities remained open, and the company continues to operate to keep pace with demand.
- The company achieved record quarterly consolidated net sales.
- Business to Business Group’s diversified product portfolio proved to be resilient.
- Consolidated gross margins rose due to lower freight and natural gas costs.
Challenges Ahead
- Sales to pork producers within China remained soft as a result of the continued spread of the African swine fever within some areas of the country.
- Revenues from fluid purification products declined due to lower demand from edible oil producers due to worldwide COVID-19 closures of restaurants and schools.
- Local pricing competition in foreign markets caused by unfavorable exchange rates and the closure of a domestic biodiesel processing plant also contributed to the decline in revenues from fluid purification products.
- Decreased demand of industrial and sports products due to COVID-19 offset some of the sales gains within the Retail and Wholesale Products Group.
- Higher incentive bonus accruals and other compensation and benefits costs accounted for the increase in SG&A expenses over the prior year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income