ODC - Earnings call transcript Q2 2022 | Oil-Dri Corporation of America

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Operator

Thank you for standing by. Welcome to Oil-Dri Corporation's Second Quarter Fiscal Year 2022 Investor Teleconference. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. I would now like to hand the call over to Dan Jaffee, President and CEO. ahead. go Please

Dan Jaffee

Jessica much. Vice me very COO; our six-month Products and first Garber, Lamson, Manager Parker, and Thank our President Amlan of Marketing Leslie are and Welcome Susan We Consumer President Wholesale; Retail of of today Vice Amlan Fred VandenHeuvel, of Vice for Kreh, Secretary; our Sales teleconference. Manager Counsel President Group General International; Kao, you Dr. Division; President to Assistant Moskowitz, CFO; Development; Chris Leslie, of walk Tony Assistant Relations. our Global Wade General and Robey, Safe will Vice through us Investor Product Harbor. and you Molly the

Leslie Garber

risk in ask Welcome, stock. comments our call, our evaluating uncertainties for in On today’s results number Dan. factors, the company’s differ. investment forward-looking that those and of comments review periods you, may and us. factors joining statements we our filings, everyone. evaluating you in periods. affect company’s and those Oil-Dri future press in release materially you consider that Actual contain any Thank a performance may trends highlight in In SEC may important regarding We Thank in the performance. future and

Dan Jaffee

Thank you.

very Mrs. how to of the what over for I war, play team. Lincoln? is and on, we're I some shortage a labor global the 'XX XX,XXX all you can this just times. with. Before very Oil-Dri when dynamic the foot going 'XX it factor to prepared want that, dealing than turn and literally the comments. supply had for I'm It's one tell chain I that's Susan, pandemic, to proud crunch back in other then was goes been give inflation. you But It no

being them, and tell on are I well. we we doing are a very curve graded As

are seemingly XX% we shelves, that's quarter. by product you are, we But doing our growth guys and to can fact sales in in certain worse product. really go delivered lines. that some the organic there’s You the thinning than other see can exemplified the Yes, the

Just we're inflation a in a see you with we're catching at highlights. our it turn through a over keep it. fantastic soon. left to have don't We're the but falling this like the job rational by team. good We're some keeping And a getting price not us take moving knife and read just up going you price passing we're it's just understand I'm right, highlights. market to just news for so through point to increases abating K, cost and assuming we're this Obviously, Q The And time. increases, going target. is, customers chasing and I it's the anytime in happening. Susan, increases. our and the guys

Susan Kreh

Dan. going Thanks, more to leave a time bit for it in change to little We're up order this questions. time

second our growth taking during couple So just the and wholesale highlights. Amlan, quarter. benefit exciting our the Dan But key it results, highlight second We for a particular of an for health was for the coming record second cost look a well. pressure. our at through strategies an retail continuing quarter the financials. all-time all-time and as A mentioned the see of company was and business, animal quarter record quarter

we're are the chasing So our strategies mentioned, cost. working. And Dan

major to on questions and costs. in on be projection, our be pricing really rational want to but marketplace embedded based do lot looking. reset has our forward by We a that most get definition, that. about in backward a the that's set economic customer And us of of We're one based backward around have don't a want a a clause little But contract. tends that's indicator customers to pricing factually So and pricing based. looking. bit pricing We major

rate. an continue at So because to continue chase to costs move the it we unprecedented

tighter, our for business several and cost to for and as litter little switch fact, businesses. continue are as Now I And allocation. these to That processes product our capital our market can. we've much see quickly we increases. sports into X more here and and them better wanted in the domestic April you us announced And to work monitor said, market we a to cat quickly with these being going bit

a During XX-year million interest of the rate note for issued at X.XX%. an $XX quarter, we annual

nice, a So rate. nice

X XX. We each repayment have through that million that note set we make in $X so years

One but we our growth. multiple this, support took of out primary and reasons, there's the reasons it's to

if think paying actually to before road, And we're the other plants repayment our time that them gives initiatives be schedule our make us start back to about which you pursuing. accretive in So to scheduled we in for principal. and become have investments down the

near term, we're build. inventory So opportunistic growth us. our for it very, placement was a supporting the but very In through nice

spending also growth. as our are the newer XX customers to increase continues had the plants. year spent million in you chain. more million, in if second rate opportunities and as and increase Year-to-date, in the capacity you saw products the there some investments times also We're in we to these on chance with the many run to for of the we're continue in investing a our as our investment So levels sales a that little we of XX.X plants inventory during our run plant And that's inventory annual volume supply anticipate in have us that half of to constraints the XX rate. disruptions or Normally, push making for runs our when up capital order offers run read a go our million in we higher. serve to so that businesses in prices rate both opportunities XX-K, better

thing. one that's So

and And to continue done to tune to we've opportunistically repurchase During the say, dilution. is we continued right our our shares repurchase as X.X shares before The that quarter, the million. pricing we've also now. of said to offset we've favorable pretty we'll of Year-to-date, stock. as

up you we and can it those highlights. open the So I'll to some are it for just Dan, of questions. back hand

Dan Jaffee

of thank And Yes, who all, questions submitted people in I want you. thank advance. to first

And so to Leslie, a I give you, go do you're through. questions? they encourage bunch online, us we how But if have

Leslie Garber

There's it a submit if you able see away. And Q&A be field. the right that your we'll it in to push should submit question to be you bit, then quickly field, able and

Dan Jaffee

Great.

XX minutes be So, and we've used we'll been we're luck. going able final to up to Q&A. We've be able well, XX good the so to minutes dedicate -- listening, only

that the So through Leslie, go let's questions were submitted.

Leslie Garber

Okay.

to really [ph], to going investor. question. prospects very submitted a that coming? are question. shipping It's you are of was What optimistic tsunami the major your I'm the spoke for Amlan and Star International optimistically still a So results very Amlan customers seeing? two-part is a kinds you sent first private question Ethan read that first companies the quarter, sophisticated. by about Last And your are

Dan Jaffee

Ethan, thank where you I'm be I that I'm forward-looking comment. will a for are sure happy more there tell be your Tsunami, But with not going at. could you, we question. because I couldn't

progress. a are of lot making We

We clay, this a as the you, We're design. to antibiotics mineral, And take we putting we from had performance booth more record players food new are the in our for clays process nature clay the with quarter all Atlanta. by been our replacement positive. focus, of can natural, And the they had accounts. selectively in had team and We together get as which our finish show we have with tell in things. has every our that a We it. We getting I production. into been we We traction. do contacts put we the have we say, IPPE we And all said, U.S., solution as Amlan. the coast then it major clay. major minerals very specific really the carefully to coast by lead believe down with all producer, we work. couldn't non-antibiotic our And best, absolute mine to and on

about excited in couldn't very it, with point at, we're be we're happier time. at So this where

part go two. Let's to

Leslie Garber

IPPE please you for seeing already? product explain Are United States? Amlan's at So strategy how a is And part presence make the two orders Amlan's did could you difference?

Dan Jaffee

take love to that. I'd covered head Yes, Robey But some on. I of Wade it

Wade Robey

thank Dan. Ethan, you, you, for that And question. Thank Yes.

meet As pandemic with and animal meat we to our XX,XXX U.S. of at registered January rollout year. about in IPPE for our to exhibitors, that, the great Amlan Even did over a show we X,XXX this Dan a had show attendees. double with customers. poultry, was the so Normally, and technology largest the demonstrate food. it's just It's mentioned, the opportunity world's there

also We're in some integrators after of Dan as States. we're the U.S. in the in well. dairy taking orders As already beginning side trials in of last to United field the largest the with poultry That's the make sales six, industry. nine months the mentioned,

strategy, really the products. we So really in interest same it's species our When the as look world. cross look around our you at

products, helping promote for through generalized productivity, to Our animal the that helping animal a to good non-antibiotic, mentioned, maintain benefits the the provide that to ecology microbial they Dan in ensure non-pharmaceutical so tract range doing growth. production as of optimum performance gastrointestinal and the economic health, animal, benefits and are of improve the

Our product branded customers. that by well accepted it's launching product line line been And sale for new very here. a is in our the U.S. we're

Dan Jaffee

was from on a I'd we but I sales Hey, felt greater. know impact actually down, what, that love the Wade, perspective. was Fred, great. equal know And attendance you or perspective IPPE the your

from So you. to I'd love hear

Fred Kao

because the Dan. and of interest, down was had Yes, a of that's right? for morning question. Attendance COVID. thanks lot Good we true. Yes,

though very into not And people we America, intend across and but However, North the on the have of specific even in asking I that was up come our high had as level show a we customers the specific surprised a did just to lot [indiscernible] well. And got don't lot had show America specifically people believe interest show, that so they attending just interest us. of world, questions our not I booth, just but our product. South interests just join the and

absolutely the very entire The attended, very show was not was time. So, booth right. Dan, our well you're very, but busy

Dan Jaffee

Russia. question, Great. wanted And to the next forgot and boycott I up to, of think to our I I the before at start, open of support mention the that we

know. So want I you let to just

that much to we all and unity scheme it's trying We let We've you in help situation business, material did a but the never and supporting things. a not shipments Ukraine, done suspended Leslie? our of I'll what's show in will we be grand to have boycott. horrific as that of know Russia.

Leslie Garber

lower much next a The rather price cat that question press is litter more your high increase. is correct, lines Bair you Ascend think spend, increased demand indicates I do the higher Thanks. new at pet surge increase penetration? attribute a product your not Okay. given customers, just comes your as than lightweight what stay Wealth passed would asks, up. release is or from cat If Advisors. the home, a He products advertising John if sales from for for get unifying to cat litter largely that market

Christopher Lamson

Yes.

take this So I'll Thanks, Chris. that John. is question.

So distribution. really, about it's

you of where retailers So categories, really market actually we're see a growing points this across distribution up. distribution, in tightening where are

points but of by our total down distribution points of Nielsen category, tracked as the distribution So in are up. are

more our maybe that are As winning, growing, where share most traffic of even importantly, are importantly where with retailers retailers they're okay, distribution growing is points themselves. so or

game we're with winning winning, sort are retailers. retailers or said in differently, So that of [ph]

half question? The that second of

Dan Jaffee

partnered be Ethan's with question? Will

Leslie Garber

Okay, right.

light cat from what private brands? do switching see second Cat's litter the new So as priced the is customers Ethan What inflationary of business Star. to environment, part label in to brands such extent in you are area? you or lower And the Pride adding

Christopher Lamson

this per just begin times market, the second question, if the the value-oriented of look end point, And and at to label the the So also that most to basis data private that think a about don't then use private at would label are know. at the going you don't brands call, brands to get we unprecedented we're a alternatives premium tailwind the of that half a Again, huge in upper to recent Dan prepared as growing. on such yes, are I think value I and talked say, really show price are growing quarter this modestly. share market,

market. the So in a bit effect of a barbell

So in growth but we to are an that to extent point. value, not seeing this modest extraordinary

Leslie Garber

Perfect.

Dan Jaffee

Great you little add anything I you don't by if color want then, to Jessica, play. to Jessica, to want play And a Chris' answer, but add. know

Jessica Moskowitz

he think Thanks. I No, covered it.

Dan Jaffee

Okay, great.

Leslie Garber

question next is The Bair. Okay, great. from John

spending references to are on XX-Q production equipment may year? new of manufacturing age CapEx Your capabilities meet demand. Do you this of equipment, your availability capabilities parts, strained limit increased to repair product due anticipate and

Dan Jaffee

Molly?

Molly VandenHeuvel

Yes.

alluded partly Susan in And to this current we've question. increase been the for required and the business don't year. expect this, Thanks to because Molly. but is this So as investing this really capital significantly I year

So mentioned, growth and you whether that business for be cost but repairs, as also reduction.

that last which for relatively we'll doing investments plus year So this flat. our keep be year, this capital coming should

growth business current similar inflationary some investment equipment, Our seeing are year, also something it parts meet expect next but land demand, and we I but we're is to year. seeing see pressures And growth. this to on so

Dan Jaffee

you. Thank Great.

Leslie Garber

question a on to Amlan Recognizing in the the growing respiratory avian Is Great. uptick John United avian also intestinal number is Bair. flu? address there product is from The than products to any issue, States? has due next interest R&D flu avian issue there that and recent of been rather focus outbreaks flu in any an

Dan Jaffee

Wade?

Wade Robey

Yes, John, that. thank you for

could. things, if of couple So a I

issue. indicated, you respiratory as First, avian a is flu appropriately

product mitigating current line be condition. would not treating effective that in or our So

are systemically. don't products absorbed animal not the by work Our and

is tie or has us suppressive frankly. become AI the So benefit flocks in or there's depopulating with of infected opportunity AI. for with Really, the In no that really option destroying effect AI. there market general, on a to only

total do is those in you at a movement as year, poultry birds the produced the companies try per times of see replace hatch. number net So to result new with downward

there our we company a or not products type of work or be no, diseases. products. would for also won't direct that respiratory We're pharmaceutical drug application so don't vaccines company, developing anticipate antiviral So any

Dan Jaffee

Thank you. Well said.

Leslie Garber

John sales Bair. it progress to market? you relates the next question as speak the product to Okay, great. Amlan swine The of U.S. from is Can

Dan Jaffee

plenty going. not in my together of can be know, the away Fred, has put XX% reputation It's for understanding, up animals. other U.S. opportunities This heavily we've -- it's will and say in or get some we is be poultry. the to that's and Oil-Dri simple. Yes. about poultry poultry, We're opportunity -- would and to contacts, incredible on focusing turn big in team may Wade there I in you the don't and running But

you heavily So have? comment leaning really we're into any Fred, poultry.

Fred Kao

earlier, business I'd because at Wade market. is; something, and as butter like where are other We're the Dan. Like same overlooking now time, and markets mentioned Yes, we add not. the [indiscernible] to poultry well. but our are we doing some in bread that's swine We dairy still

swine is China opportunity. dairy all. huge so a As opportunity we That's is discussed,

Dan Jaffee

targeted the this the to question in But U.S., was specifically United States.

Fred Kao

opportunity the for want that in the Wade we is of market. not well, chunk say earlier, trying to alone. at the poultry Yes, big us do swine U.S. so mentioned in and lot opportunities other the up U.S. sales on and opportunity to has and dairy we not the market focusing are poultry only that's same in have a like opened are do a business more in U.S. as [indiscernible] looking we poultry there. I just focus

primary a poultry are focus. also targeting as We

Dan Jaffee

Okay, for Well John. good. Thank said. the you question,

Leslie Garber

Okay.

associated lithium special are clay Do for for the Next USGS deposits EV discuss There in reports have extraction deposits. from association in battery lithium your clay several might lend any themselves Bair. market? bulletins, them is of John that question which

Dan Jaffee

mineral of Dr. are saffronites as phases their be sent high contain I well for mineralogy. been lithium deposits located lithium known lithium hectorites economic So metal. a Illinois mineral clays a the There me a western bentonite with U.S. of he not trace conceivable question smectite He's Mississippi, value structure. with us contain clay part any the and in back. that California. trace in deposits clay [ph] has and some any of a for our as to lithium-bearing that concentration These source Unfortunately, attapulgite forever. are fairly in both do PhD Georgia this calcium Marc would And friend who clay answered

of parties and available source he's compared However, technical domestic of teasing silicate the many -- lithium especially very parts because abundance answer, metal for very, such and currently Marc, in if and the no, current salts rock he's mitzvahs Marc. the world. you this is you bar lithium need for I'm Great deposits as mined entertainment, of economic viability clays a brine low significant and with very

hearing for stuff? You from I but know answer. your know love Holy do your you Thank Cow, you you,

Leslie Garber

question have product? based [ph]. advertised I reaction He changing you. litter of next And Oil-Dri Thank to lately asks, named litter to seen health the that it? uses the Great. on comes the purports Pretty Have colors The have cat a heard this the track Lawrence any Kitty Richards of cats does product color their of from after you box.

Dan Jaffee

indicator guys greater an So -- we've of that product years. you is worked time this using litter in, the round cost it all yes, can. really what to specific benefit. is the the for you be heard jump take of for on of problem, sensitive than The in I'll cost very it. problem part could a year and We've want

it's If Walmart. you look, think retailing at I for $XX.XX

our provide at to that confirm then you can they compare material, is that. X.XX. You Jessica, think about volume same But I CPS of which the opening both jug,

target the So cost. when you almost [ph], it's Xx

at so $X,XXX infection. figure of your And maybe the you'd a be to even the try spending and year, tract hundreds, more out cat end urinary had if

if off better an cat vet. to issue, him has the You're take the

It'd never it. that of kind a every litter standpoint doing indicators put have a in point even So It's health when test no worthwhile you benefit to There's good. day a we it's be day. single those every like cost very from expensive. feel taking just seen to

not you Jessica, as I very don’t comments? you have a expensive. know fan, tell, if So can any

Jessica Moskowitz

on build can I Yes, that.

the of market see overall is make -- said, consistent with need that what time we strategic the our pursuing look you we [ph] of strategy and obviously innovation, aligns with keep much lightweight. you and continue like consumers on to very at Dan, size but with need we for appeal evaluate think as innovation sure the at I pulse a it same to Oil-Dri that we and the always long-term to

would Dan see that's echo these things said and it. where future what market to them grow. obviously we opportunities and So I just And and for and yes, look to see continue can

Dan Jaffee

you. Thank

Leslie Garber

Great.

are Our you doing United comes previously next Canada growth In to? new sold How question customers litter from the the business Star. cat opportunities? adding is are that in States, not and the what Ethan had litter for cat you

Dan Jaffee

And share growth So litter actually slightly ahead in where really Canada up there. brand we're strong the leading market, U.S. is the great, lines, doing a top the lightweight in of it's

product lightweight private gone board we're with and positioned our growth so and has seeing we're this the across And that business so well very grow, particularly to label today.

tests Second half said, our customers think of I forward expanding That from is we've distribution is few as a -- tests mentioned well. of that. going we the optimistic about growth U.S. at various are performing on that majority at those really question, in existing the we're performing have I the customers. well earlier, based stemmed distribution growth We're

Leslie Garber

questions. don't great. have more any Okay, We

Dan Jaffee

I'll I'll ask a and question, then answer it.

mentioned we've great. our is which source which hit supply think before, the is U.S., earths, to bleaching is is for but starting But happening I another this to hurry. in exceed what in a renewable is So is diesel demand going demand

great. the incremental we way, or the demand the in whether side, either earths, just for which support U.S. of and Cargill on continue get to business fluids so And ADM lot bleaching is our a there's coming diesel purification renewable

long-term they're where or where then with partners we've we're Moneyball can value And like supply will customers they that to fuel we whatever them are purifying. continue an we always the acceptable to oil make margin play purify so into lean need to done, those and going

usually his Patsey grows And an because renewable really business this now a with in oil for when X% exciting layer the so by time you X%, population. diesel, But Bruce edible it's really it's and year exciting. division,

to you hit. looking as we're to So format. love Moneyball guys. this definitely questions. thank I good. Well, the appreciate Well, thing your play starts listen, I

our doing tell the is optimism to moving our get consumers, price you, We're they're to target the margins, with We're just their their keep able it's We're a get obviously. market. those can a trying You partners BXB, will it. chasing a retails along. can not get increases. so tell lot pass closely can they with of We're going we business. that good for if they news can they have and to I rational we're happy up, work a

And back and PPI so it's the month, 'XX like levels keep doesn't either. -- to dating setting CPI 'XX, seem but abating it record to Every 'XX. the

a thing is this first So in time years. XX

appreciate So dynamic investors. these cash of very loyal I'm And proud we're generate I and again, times, are our do but the there. long-term well to team. continuing Oil-Dri

all be a definitely with growth of of potential, hopefully a often. fantastic. that then so a on And certainly, chunk dividend. on protecting And But happen we're doesn't side that big focused getting value growth we're the value which top it stock and would organic

window to and think not this got So I the be by stock again. be not in lot We did price saying, yield repurchase close and bank, last back window. earning the our And think stock that we'll the open news sitting crazy shares our buy we open referenced release. continuing if a will program. just we in it cash The I dividend we'd if whole

So I'm that there. be opportunistic we will sure

So thank again We'll in months. three you, you to talk everybody.

Operator

concludes participating. call. you This conference for Thank today's

You may now disconnect.

Oil-Dri Corporation of America (ODC) 14 Mar 222022 Q2 Earnings call transcript