Yahoo Finance Oil-Dri Corporation of America (NYSE:ODC) Q2 2024 Earnings Call Transcript
Oil-Dri Corporation of America (NYSE:ODC) Q2 2024 Earnings Call Transcript March 9, 2024
Oil-Dri Corporation of America isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, and thank you for standing by, and welcome to Oil-Dri Corporation of America Second Quarter Fiscal 2024 Earnings Discussion via webcast. [Operator Instructions] Please note that today's conference is being recorded. I would now like to pass the call over to the President and CEO, Dan Jaffee.
Dan Jaffee: Great. Thank you. Welcome to our second quarter and six month teleconference. Joining me either in person or virtually for the call to answer your questions: Susan Kreh, our CFO and CIO; Aaron Christiansen, VP of Operations; Wade Robey, VP of Ag and President of Amlan International; Chris Lamson, Group VP of Retail and Wholesale; Laura Scheland, Chief Legal Officer and Vice President and General Manager of the Consumer Products Division; Bruce Patsey, our Vice President of Fluids Purification; and Leslie Garber, our Director of Investor Relations, who will lead us through the safe harbor.
Leslie Garber: Thank you, Dan. Welcome, everyone. 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 in 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 for joining us. Now I'm going to turn the call over to Susan Kreh.
Susan Kreh: Thank you, Leslie. And just a quick shout out to you, Leslie, you did an excellent job of highlighting records and providing color on our very positive second quarter results in the press release. So thank you, and great job. And since Leslie did such a thorough job, I'll just highlight a few key points, and then I'll be happy to answer any further questions during our Q&A session. For the quarter, consolidated net sales were up 4%, which was a record for Oil-Dri's consolidated net sales for the second quarter. This was driven in part by growth of fluids purification and cat litter products, including co-packaged items. The strong sales of co-packaged items was partially a result of a large customer restocking during the second quarter, following a first quarter disruption caused by a cyber event.In analyzing the split between pricing and volume on the quarter, higher prices across all principal products drove the improvement in net sales.
And while we did experience strong volume growth for our fluids purification products, that growth on a consolidated basis was more than offset by the purposeful shedding of some low profit volume within our Retail and Wholesale segment. Consolidated gross profit was $30.9 million for the second quarter, representing a 34% increase over the same quarter in the prior year. Our gross margins expanded to 29.3% in the second fiscal quarter from 22.6% in the second quarter of fiscal 2023. Our gross margin expansion is a result of our teammates keen focus on restoring our margins in order to fund our future. This is necessary because of the financial impact of our aging infrastructure. We have a 5-year capital plan that addresses replacing key aged and fully depreciated assets in our manufacturing facilities.
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