Oil-Dri of America Management Discusses Q1 2013 Results - Earnings Call Transcript
December 10, 2012 2:00 PM ET
Oil-Dri of America (ODC)
Q1 2013 Earnings Call
December 10, 2012 11:00 am ET
Daniel S. Jaffee - Chief Executive Officer, President, Director and Member of Executive Committee
Daniel T. Smith - Chief Financial Officer and Vice President
Good day, ladies and gentlemen, and welcome to the First Quarter 2013 Oil-Dri Corporation of America Earnings Conference Call. My name is Shamceley, and I will be your facilitator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Dan Jaffee, President and CEO. Please proceed, sir.
Daniel S. Jaffee
Thank you, Shamceley, and welcome, everyone, to our teleconference. Joining me in the conference room here is Dan Smith, our CFO; Doug Graham, General Counsel; Ronda Williams, our immediate past Director of Investor Relations; and Reagan Culbertson, who will be assuming Ronda's role as Ronda moves into a full-time marketing role at the company. So don't fear, Ronda is staying with Oil-Dri, she's just moving on to bigger and better things. And Reagan, we're very happy to have you take over as Director of Investor Relations. So handling for the last time the Safe Harbor provision, Ronda, please.
Well, thank you. I'm going to make it a good one. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results in those periods may materially differ. In our press release and our SEC filings, we highlight a number of important risk factors, trends and uncertainties that may affect our future performance. We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in Oil-Dri stock. Thank you, Dan.
Daniel S. Jaffee
Great. Thanks, Ronda, and thank you for your wonderful job in the past few years. And we will turn it over to Dan Smith for a little play-by-play on the quarter. And then as always, we will open it up to Q&A and encourage you guys to prioritize your questions because we're going to hold it to 0.5 hours, and so let's get to the most important questions first. Dan?
Daniel T. Smith
Okay. Thanks, and good morning to everyone. Oil-Dri started the year off in a tremendously positive note. Sales were up 3% to $61.4 million for the quarter. Our EPS was up to $0.64 per diluted share for the quarter, which is an all-time quarterly record on a split adjusted basis. Last year, our EPS for the first quarter was $0.15.
Our retail wholesale team delivered tremendous profit growth on a year-over-year basis. Overall cat litter sales increased about 5% driven by mix, pricing and lower trade promotional expenditures. We were able to maintain our sales momentum we started last year while benefiting from our first quarter plan to spend less in trade promotions and advertising. We spent $1.4 million less in trade promotions and $2.6 million less in total advertising during the quarter. However, we anticipate increasing our advertising and trade promotional spending for the remainder of the fiscal year. Our overall advertising expenses for fiscal '13 will be more than historical norms but less than fiscal '12.
Our B2B group had a strong quarter. Sales increased 4% and our contribution increased 1% over a very strong first quarter a year ago. Animal health, co-packed litters, agricultural carriers all reported sales increases for the quarter. Our sales of fluid purification products are down for the quarter. Our gross profit percentage increased substantially during the quarter. The Retail and Wholesale and Business to Business groups reported solid product mix, selling price increases and less trade promotional spending, which drove our gross profit percentage to 28.1%.
Our balance sheet continues to be strong. Our cash and investments balance at the end of the quarter was $35.1 million, which was an increase of about $5.7 million from the first quarter of fiscal '12. Our cash and investments continued to substantially exceed our debt.
We continue our strong dividend payment to our stockholders, with approximately $1.2 million paid out during the quarter. Also, on December 4, we announced our intention to accelerate the payment of our fiscal third and fourth quarter dividends. A dividend of $0.36 per share of common stock and $0.27 per share of class B stock will be paid before the end of the calendar year. This payment is not a special dividend or an increase but rather an acceleration of the quarterly dividends that normally would be paid over the course of fiscal 2013.
Thanks. I will turn the meeting back over to Dan Jaffee.
Daniel S. Jaffee
Dan, thank you. Very, very positive, very exciting. And I will put any other adjectives on. I'd rather respond to the questions that our investors' mind. So Shamceley, if we could open up the Q&A line, we'll proceed.
[Operator Instructions] Your first question comes from line of Ethan Starr, private investor.
My question is this, to what extent are you still adding distribution for Cat's Pride Fresh & Light?
Daniel S. Jaffee
We are actively adding distribution. Certain new accounts have rolled in, and so you're getting -- you didn't get a full year last year, big accounts have jumped in mind towards the end of the year. Publix, for instance, was a big new added distribution towards the tail end of last year, so we'll get a full year's benefit of that. A lot of the distribution we put on last year was during our fiscal second half, so you're getting a year-over-year lapping effect now that's positive. We still have some major voids that we're looking to fill. But in those, I really don't want to comment on until they're actively on the shelves.
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