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Jul 31, 2020
Oil-Dri Q4 2020 Earnings Report
Oil-Dri reported record fourth quarter net income and EPS, despite a decrease in net sales.
Key Takeaways
Oil-Dri Corporation of America announced its fourth quarter results for fiscal year 2020, which included a record quarterly net income attributable to Oil-Dri of $5.886 million, despite an 8% decrease in consolidated net sales compared to the prior year. The increase in net income was largely driven by a one-time pre-tax gain of $13 million from an intellectual property license agreement. The company's Retail and Wholesale Group experienced a 9% decrease in revenues, while the Business to Business Group saw a 5% decrease. However, e-commerce business experienced double-digit sales growth.
Net sales decreased by 8% compared to the previous year, totaling $64.844 million.
Net income attributable to Oil-Dri increased by 55% to $5.886 million, a quarterly record.
Earnings per common diluted share increased by 54% to $0.83.
The company entered into a confidential license agreement in exchange for a one-time lump sum payment which helped the fourth quarter results.
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
Oil-Dri anticipates that advertising costs for fiscal year 2021 will be comparable to fiscal year 2020 and that the company is positioned for a successful and healthy fiscal year 2021.
Positive Outlook
- Ongoing momentum in the combined net sales for the third and fourth quarters, reflecting a 7% increase over the same quarters in the prior year.
- Double-digit sales growth for the e-commerce business in the fourth quarter compared to the same period last year.
- Revenues from cat litter within the Canadian subsidiary demonstrated a 20% increase over the prior year.
- Expect advertising costs for the upcoming fiscal 2021 to be comparable to fiscal 2020.
- Company entered into an amended and restated note purchase and private shelf agreement, providing the ability to request additional financing in the future to grow the business, if needed.
Challenges Ahead
- Consolidated net sales in the fourth quarter declined by 8% compared to last year.
- Weaker demand for products within all areas of the business, except for our animal health products, resulted in decrease in sales.
- Sales of agricultural products declined by 10% versus the prior year due to COVID-19 related demand delays.
- Sales of fluid purification products also declined this quarter by 6% compared to the fourth quarter in the prior year.
- Industrial and sports products were negatively impacted by COVID-19.