Welcome to the 2020 Annual Meeting for Oil-Dri Corporation of America. Our host for today's call is Leslie Garber, Manager of Investor Relations. At this time, all participants will be in a listen-only mode. I will now turn the call over to your host, Leslie Garber. You may begin..

Good morning. Due to the current pandemic, we are conducting this meeting virtually to ensure everyone's health and safety. By hosting this meeting via live webcast, we're able to be more inclusive, reach a greater number of our stockholders, and save cost.

On your screen, under meeting materials, you will find the meeting agenda, rules of conduct, lists of stockholders of record, and Oil-Dri's proxy statement and annual report..

Good morning, ladies and gentlemen.

I now call to order the 2020 annual meeting of stockholders of Oil-Dri Corporation of America to conduct the formal business set forth in the notice of meeting and proxy statement Commencing on October 27, 2020, a notice regarding the availability of proxy materials or a copy of the proxy materials was mailed to all Oil-Dri stockholders of record as of the close of business on October 9, 2020, which is the record date fixed by Oil-Dri's Board of Directors for the determination of stockholders entitled to notice of and to vote at the meeting.

Broadridge Financial Solutions, Inc. has delivered an affidavit confirming the foregoing. Oil-Dri has appointed Peter Sablich of CT Hagberg to serve as the inspector of election for this meeting. He is present and has taken the oath of office.

As of October 9, 2020, the record date for this meeting, there were 5,384,560 shares of Oil-Dri's common stock and 2,077,599 shares of Oil-Dri's Class B stock outstanding. Holders of our common stock are entitled to vote one -- to one vote per share.

And holders of our Class B stock are entitled to 10 votes per share, and generally vote together without regard to class. A quorum is present at this meeting if holders of a majority of our common stock in Class B stock outstanding and entitled to vote are present in person or webcast or represented by proxy.

Thus, the number of voters necessary to constitute a quorum at this meeting is 13,080,276 votes. Mr. Sablich has informed me that there are more than such number of votes represented at this meeting. Therefore, I declare there is a quorum present for purposes of transacting business. Now, I will present some matters to be voted upon.

If any stockholder would like to make a comment regarding any of our – the proposals, please submit your comments through the Ask a Question field in the web portal, and we will review any comments on the proposal themselves after all proposals have been presented. I will move to the first proposal.

As described in this proxy statement, the first item of business is the election of eight Directors. The proxy statement listed Oil-Dri's nominees for Directors, each of whom currently serves as a Director of Oil-Dri. Those nominees are Daniel S. Jaffe, Ellen-Blair Chube, Paul M. Hindsley, Michael A. Nemeroff, George C. Roeth, Allan H. Selig, Paul E.

Suckow, and Lawrence E. Washow..

Thank you, Laura. Hello, and welcome, everybody. And first and foremost, thanks for recounting the vote for us and since it went my way; I will not be making unsubstantiated claims of voter fraud or suing any of our electorates. So, I'm happy to hear we were properly voted in and I will honor the vote.

Fiscal 2020 is truly a year that none of us will ever forget and we always say here at the company that winning at Oil-Dri is a team game and this year exemplified that to an incredible level.

And I just want to make sure I thank -- start by thanking and then finish by thanking the Oil-Dri team globally, because none of this could have happened without them and it is truly my honor to be leading such a great group of people who share core values and then work every day to create value from sorbent minerals for our investors.

And this year, we have the dual charge of not just keeping everybody fiscally healthy, but also physically healthy. And so we have been virtual since March for all our non-frontline workers and then our frontline workers have been coming in every day and we do strictly adhere to all social distancing. We clean the plants three times a day.

We do a super cleaning on the weekends. And knock on wood, to date, we have had a few COVID in -- teammates who have had COVID, but to our knowledge, they didn't get it at Oil-Dri. They got it somewhere else and because of our policy of letting people stay home and recover and sequester and so forth quarantine, have not brought it into our facility.

So, I just want to thank everybody for keeping Oil-Dri fiscally and physically healthy..

Thank you, Dan and I know you love to sometimes add color on the finance stuff, so feel free to jump in. It's a privilege to be here today at our first ever virtual annual meeting on behalf of my teammates here at Oil-Dri to share the financial results of our record fiscal year in 2020 as well as our strong first quarter of fiscal 2021.

Fiscal 2020 was a record year for Oil-Dri both for net sales and that income and momentum continued to carry into the first quarter of fiscal 2021, which had the highest net sales of any of Oil-Dri's first quarters.

As I proceed through these slides, I will be sharing a look back at the past decade of performance trends as well as focusing on our first quarter results.

So, let's start by looking at 10 years of net sales growth, noting the stronger growth in the past two years, driven by our retail and wholesale products group where we are seeing the benefit of our strategic focus on the lightweight and the private label segments of the cat litter market.

Looking at the first quarter of fiscal 2021, the $76 million in first quarter net sales represents year-over-year growth of 7% and is driven by 9% growth in our retail and wholesale products group.

The company based 4% growth in our business-to-business products group, were strong sales of our agricultural products were partially offset by a year-over-year reduction in net sales of our Amlan products.

As Dan mentioned, we have made some key organizational changes in our Amlan business to better position us to serve the animal health market and Dan has refocused the team on the execution of our animal health product strategy.

Taking a 10 year look at our tons sold, you can see the downward impact as we very purposefully continue to focus on our mission of creating value through servant minerals.

We continue to review our product portfolio to weed out products that no longer achieve our mission of value creation, while developing new products that do create the additional value for our customers.

And as we look at net sales per ton, we see the 10-year impact of focusing on creating value because while volume has decreased 16% over the past 10 years, our net sales per ton has increased from $244 to $375 per time, an increase of 54%.

And that continued focus led to a net sales per ton of $383 in the first quarter of fiscal 2021, an all-time record for Oil-Dri. Right.

And not only are we driving growth in our net sales per time, we are driving even stronger growth at a 10-year compound annual growth rate of 6% in our gross profit per ton, a key profitability metrics that we use to manage the performance of our business.

In fact, the $100 gross profit per ton that we achieved in fiscal year 2020 was an all-time high for Oil-Dri, and we continued that momentum into the first quarter of fiscal 2021, delivering gross profit per ton of $102.

Next, you can see that our strong gross -- growth in gross profit per ton over the past decade has translated into an even stronger 10 year compound annual growth rate of 8.6% on net income per ton. The $25 of net income per ton is another all-time record for Oil-Dri.

Looking at our first quarter performance, gross profit of $20.3 million was $400,000 higher than the same quarter in the prior year. At the same time, our selling, general, and administrative expenses were down by $700,000, due primarily to reduce travel and related expenses and some timing shift and advertising.

With our first quarter net income attributable to Oil-Dri of $4 million, which is a 5% increase over the same quarter in the prior year, we generated a strong $20 net income per ton in the quarter.

On an earnings per basic common share basis, we came off a record year at $2.70 per share to deliver $0.57 per share in the first quarter of $0.06 per share over the first quarter last year. Next we see the 10-year delivery of dividends per share that are both predictable and growing.

The dividends per share during our first quarter rose to $0.26 from $0.25 per share marking as Dan noted earlier, 17 consecutive years of growth and the dividends we paid to our shareholders. We continue to maintain a strong balance sheet and our solid financial performance enables us to invest on multiple fronts.

In addition to the return to our shareholders through dividends, we fund new product development through R&D, we maintain our plants, and we fund cost reduction opportunities in those plants through our CapEx. And in fiscal year 2020, we repurchased 5.5 million of our outstanding shares.

From a liquidity standpoint, Oil-Dri is well-positioned with a low level of debt and with a $75 million shell financing arrangement that is already in place that should enable us to have quicker access to funding when the right investment opportunity arises.

And speaking of opportunities, with the focus and alignment on our key strategies in cat litter and animal health, and with some key investments that have been made in technology, in organizational capacity, and in leadership, combined with the strong financial performance of our business, we are eager to pursue the right investment opportunities when they become available.

And with that summary, it is my pleasure to turn this over to Molly VandenHeuvel, our Chief Operating Officer..

Thank you, Susan. Good morning, as Susan as I mentioned I'm Molly VandenHeuvel was the chief operating Chief Operating Officer at oil drive. And I also want to start the discussion with a COVID recap, and impact. Dan did summarize some of this, but I'll get into a little bit more detail. So, 2020 was a tumultuous year.

But it is time like these were the true values and the core of a company become evidence and an Oil-Dri's core is focused on keeping our teammates and our business healthy. And as you heard from Susan, we did we did keep our business very healthy. And I'll talk about how we kept our teammates healthy, and how we kept our business operations running.

So, first of all, being an essential business was a key component. We are essential through many of our applications to name a few. We're part of the food supply chain and oil purification. We supply antibiotic alternatives for animal health. And of course, cat litter is still essential for cat owners more so now that we're all inside at home.

So, we needed to make sure that we kept our business running while keeping us healthy. Our teammates have been flat out amazing and we have done what we can to support them. Their physical safety, financial health and emotional well-being have been a top of our priority list. At the start of a pandemic, we pivoted quickly.

Anyone that was not directly needed for production, worked remotely. We had a paradigm here before the pandemic, that many of these roles in the past just could not be effective remotely, such as our very important customer service representative.

But we leveraged many of our teammates, and many of our functions and many of our processes to make the adjustment and break that paradigm. And we ensured a rapid and successful transition that has reinforced to us something we say often and which Dan even said earlier, is winning at Oil-Dri is a team game.

So, for our teammates still on the front line, some of the things we have done at the production facilities and our R&D lab to keep our teammates safe, including include deep cleaning processes. So, one, you here.

So, one shown in this picture, social distancing requirements, and online video meetings even often when we're at the same location, and of course, mastering, and in most cases, this is 100% of the time, while on property. As you can see, we have some specific Oil-Dri mess that we have made.

So these actions have been successful, and we prevented any outbreak or transmission at Oil-Dri. So, through this transition, we had no major impact customer service. And in some cases, we shipped and produce in record quantities. So, not only has Oil-Dri, survive this pandemic, we worked as a team to thrive and we'll continue to do so.

Okay, so with that, let's talk a little bit about operations of state within this past year. So last year, I reviewed the sales and operations planning process, we were implementing it Oil-Dri. As a reminder, this is a holistic process and how we run the business.

It has a regular cadence of meetings each month and tools and processes to better our end-to-end and cross-functional decision-making. So, it turns out that having this foundation prior to the pandemic has been instrumental in our success this year. So, it has really helped us through the online transition and keeps us organized and focused.

And it's a tighter process for communication, data sharing, and overall resolution. So, there's a lot of things that we've implemented in the last year and I want to brag about just a few that we've implemented and I'll talk about as part of the ethanol in process. So, the first one is the first review meeting is the Portfolio Management Review.

So, we spent a lot of time on this, and we now have a very robust, robust list of potential new items for all of our divisions in various project stages. We spent a lot of time redefining the current project success criteria and ideating many new up breakthrough and gross generating product ideas for this list.

Project still must meet financial hurdles at each stage and have detailed timelines that are managed to keep us on track. We're setting ourselves up for a healthy future growth with new products solutions that create value from sorbent minerals. We also have a monthly demand process.

It's a consolidated set of demand forecasts that is forward looking in around the 12 to 18 month horizon. And it utilizes the ERP or Enterprise Resource Planning systems data E that we implemented two years ago. So, we're further leveraging that system that was implemented. That gets fed to supply the monthly basis.

We've also done a lot of improvements in the supply area. And I'm just going to give you one today is now we actually have what's called a rough cut capacity planning process and tools in place. So, this lets us lets us look at how much capacity is needed by product platform by month looking out in the 12 to 18 month horizon.

This is allowed us to see potential capacity gaps white early and then develop plans to close these gaps. This is one tool that's enabled service level improvements and better utilizes our sometimes expensive cat capacity throughout the year. So, I also want to talk about results in the operations world.

So, last year I shared I focus on our main areas in supply chain operations around the four C's, customer, cost, cash, and capability.

So, how did we do in those areas? So, the first one is customer and as you can see, that's both internal and external and the internal customer is our teammates and --- in the COVID update, we were able to continue to support our teammates through this pandemic.

For our external customers, we have new metrics that are tracking and approving against -- we are tracking improvement against including pay still rates, on time as promised and on time is ordered. And I'm very pleased to say that we saw a step change improvement in all of those measures in fiscal 2020 as compared to fiscal 2019.

Our focus on quality is also improved with many new metrics and for example, one of them that's been continually improving is our consumer complaints per million units is as is at a record low and still continuing to improve. The next area is cost.

So, how did we do in cost? The simple answer here is that we took out $5 million of costs in the supply chain in 2020, helping to improve gross profit with the bottom-line adjustment.

The not simple answer is that took an incredible amount of effort and coordination from the entire team with hundreds of savings projects completed and still hundreds underway. So, really great results in cost helping us overall. The third is cash. So, our cash and inventory position as a whole did not significantly change, has slightly reduced.

But I will say that mix and active inventory has improved considerably. We spent a lot of time right-sizing the working capital that we have, we have focused on inventory by SKU and we've reduced our obsolete inventory, improving both service and costs. And then last but not least, is capability.

So, the supply chain and operations team and Oil-Dri overall has implemented numerous processes to sustain these results and really too many to even start to list. Things like cross functional service meetings and of course, SNOP as I talked earlier.

And this has really built us a strong foundation for continual improvement in the foresees for the foreseeable future. So, with that, I'd like to hand it off to Jessica Moskowitz who is our VP and General Manager for our Consumer Products Division..

Thank you, Molly. Hello, good morning to everyone. My name is Dr. Moskowitz, and as Molly mentioned, I'm the Vice President and General Manager of the Consumer Products Division. Our consumer division continues to post strong growth in 2021, coming off of an 8% net sales growth in 2020.

Net sales were up 12% in Q1 2021 driven primarily by gains in our branded scoop cat litter and private label cat litter businesses. These games reflect continued focus again three key pillars. The first of which is creating value through vertical integration.

Our inhibited access to premium lightweight clay mines across the country drives value for wheel drive, but it also drives value for our customer partners and our pet parent consumers. Our vertical integration coupled with our 80%-plus year history and expertise in cat litter, have provided with us with a real meaningful point of difference.

Secondly, we continue to invest resources with a focus on continuous improvement and quality, ensuring that we're delighting consumers by offering them great products at a great value.

And thirdly, our team, we celebrate and embrace our role as a cat litter that cares in both the long-term -- through our decade's long commitment to giving back to animal causes, but also in the day-to-day decisions and strategies that we set as a business.

From a product perspective, on the cat litter side, we've been intensely focused on expanding and growing the lightweight portion of our business. For all of the reasons we've been talking about since we launched lightweight in 2012. Firstly, lightly cat litter addresses a key pain point for cat litter consumer.

Cat litter is traditionally a very heavy. Second, our vertical integration in lightweight materials allows us to uniquely offer this premium benefits to consumers at a value.

And thirdly, as you'll see on the right slightly not only benefits the consumer, but also the entire supply chain, meaning less weight, less freight, and ultimately less trucks on the road.

Through that focus on lightweight we continue to see growth across both our private label cat litter those be a new customer acquisition and organic growth as well as in our branded portfolio. On the branded side, we continue to focus on our best performing lightweight products.

Thanks to an impressive cross functional team effort, this year we launched two new items under our best performing formula, natural care and bacterial odor control. Both products combine a 25% lighter formula with a 10-day odor control called out by a newly formed max power badge.

We're using those wins to further fuel our growth and to help continue refine our lightweight strategy into the future. Our lightweight learning has been the impetus behind the addition of a new pillar to our strategies surrounding the launch of a new line of flushable cat litter. So, you might ask why we're really focused on flushable.

Well, let's go back to the foundation of our success in lightweight. As with lightweight, we're starting with a key consumer pinpoints, handling and disposing of cat litter. We know 30%-plus of consumers are keeping their litter box in their bathroom and with our washable cat litter; consumers can just scoop and flush.

But the reality is today most cat litters aren't flushable. So, consumers are scooping putting it in a bag, bagging up the litter, and then throwing it in the garbage.

So, for example, one consumer we spoke with was in high rise apartment, he scoops the cat litter, puts it in the bag, walks the clump to the other side of his high rise building, to then use the garbage chute.

With more consumers at home close, quarters are feeling closer and consumers recognize now more than ever the value of just scooping and flushing. Second, also like lightweight we have access to minerals that are inherently flushable, meaning that we can offer this premium benefit to consumers at a value.

And finally being flushable is better for consumers, but it also means less waste in landfills. Just as it sounds, our flushable formula was specially formulated to just scoop and flush. But consumers don't typically think of cat litter as flushable. And that's because traditional litters develop hard clumps that create blockage in a toilet pipe.

You can see that in the image on the left. Our flushable litter shown images on the right is unique in that it clumps in a Super Bowl, but dissolves once it's dispersed into a toilet pipe making it safe to flush. As we mentioned before, the consumers are beginning to see the benefits of flushable litters.

Today only about 1.4% of points of distribution are dedicated to flushable products. But 5.6% of buyers are already purchasing flushable products and 8% of consumers are actually looking for and seeking flushable products.

This clearly creates not only an opportunity for distribution upside, but also consumer pull through, velocity upside once these products start to gain distribution.

Furthermore, while survey show that 80% of consumers are seeking flexibility, we believe that the percentage in places like urban areas is much higher where there's no basement or no garage, and as flexibility becomes available and more marketed, this percentage will only go up.

Look at the 30% of consumers that already have litter box in their bathroom and don't even realize that they can flush their cat litter. We plan to support flushable with a highly targeted marketing campaign geared towards those consumers who are already looking for a flushable -- who are looking for festival alternatives.

Both the media plans as well as the creative will reflect this focus. Our media plan will be digitally focused with a combination of digital tactics like social media, video sampling, and social influencers. In our creative, we'll focus on how easy flushable cat litter is to use by just scooping and flushing. Consumers can just flush it and forget it.

Further we'll tie into the insight that many consumers are sharing small -- are sharing spaces sometimes small with their furry friends and being able to flush your cat litter leaves more time for the fun stuff.

In closing, I'd like to thank the entire division three team when we talk about growth drivers, I can't think of a more important and critical one than team.

We continue to invest to elevate our team and I'm so proud and honored to work with such a dedicated, driven, and down to earth team -- group of teammates that ultimately has helped us become the catalyst that cares. Thank you. And with that, I'll turn it over to Fred Kao from Amlan International..

Thank you, Jessica. And thank you Dan for the introduction earlier. Good morning. I'm Fred Kao. I'm the Vice President of Global Sales for Amlan.

I'm here to talk about opportunity for Oil-Dri's unique mineral to improve global food production by sharing our most exciting animal health product, and why it has so much potential to make huge impact in this 3 million -- $3 billion antibiotic world when the trend is going towards no antibiotic ever for many more countries.

China as an example started that in July of 2020. On the feature of Build in America aired in September, our CEO, Dan Jaffee emphasizes the importance of our unique mineral to capture the animal health market for years to come. I say Mother Nature puts everything on this earth and we need to survive.

And our endless international businesses are nearing the use of mineral technology to reduce and even eliminate antibiotics used to promote growth in animal protein production.

So, as we set Amlan apart, the key differentiators, not only does Amlan has the best scientists working in our innovation Centre, we have a growing portfolio and we have the most important it factors, which is our mineral technology.

We have the mineral technology that is beyond any competitors that we face in the marketplaces, please allow me to elaborate.

The value of vertical integration, let's take it a little further to know why we have the significant advantages over other similar products in the market by knowing what Oil-Dri present in this very important integrated business of animal health products.

Number one, our mining reserve, we have hundreds of years of reserve that we do not have to worry about running low on our most precious raw material. Number two, now many companies out there can say they control the raw material that we do, this is such an important factor as we're not dependent, we are independent to ensure product quality as well.

Number three, we're a mineral company, all we do are evolving around our minerals and with 80 years' experience as a mining company, all we have to do is do what we do best. Our activated mineral, not only treating the animals from its challenges, but we can actually prevent it from happening by this rough the bacterial communication.

This mode of action is called quorum sensing, which inhibits the bacteria from killing each other and take over the host. Not only does our mineral able to absorb, but they can also absorb by attention of the bacterial molecule to the solid particle or mineral.

Fourth, it binds the harmful toxins in sweet outside of the body to protect the animals, but we can actually try to prevent it from happening in the first place. And all these things are done with only our activated mineral compared to other more costly products in the market where combined additives are needed just do the same job.

So, how does it work? A simplified way of saying is our mineral acts as a magnet in the guts of the animal. So, mycotoxin, bacterial toxin, and bowel toxin are very common challenges in animal protein production. What we do is to buy our mineral with the feed and feed it to the animals, we are focusing on healthy additives can help with this.

Once fed to the animals, it absorb toxins within the dusts, squeeze the bonded toxins to the feces, all the natural advantages. When using our product customers enjoy a nice two point FCR which is called feed conversion ratio.

There's two points FCR advantages is in a nice size company, processing roughly $5 million per week means an additional profit or the saving of $3.12 million per year. By calculating the total fee saved multiplied by the price of the fee to get a total savings for additional pockets as illustrated in the slide.

How will we execute the key tactics? So, our growth strategy with Amlan; number one, identify opportunities. Number two; grow the team with strategic placement. Number three, target key players, the right customers or distributors in each country and region. Number four; align marketing initiatives with sales objectives.

Number five; accelerate growth with both new and existing product portfolio. This is just a slide showing no antibody ever that was shown before.

The key account opportunities, while Asia is so important in our growing plan as showing this slide, that is why in the last few weeks, we're able to get positive feedback from our very own variant with a number one and number two animal protein producers in the country of the Philippines received a similar response from the top five protein producers in Thailand as well.

The soon to be $70 million e-company in China just double our orders in 2021 last month. And our continually will push for no North American market just gave us our newest customer with sizeable orders in the last few weeks to kick off our key account strategy that we set up to do just a few months ago.

So growing our team, the size of the circle indicates what the percent of the key account opportunities are in the previous slide, with emphasis on getting the right person for our target area, we hired as Dr. Harold Zhou for China, Mr. Heath Vessels for North America division to boost our existing team on the ground was Ms.

Margarita Santa for Latin America and Mr. Claire with a APAC. With our plan to hire the regional director of sales in Europe, Middle East and Africa in FY 2022 to complete the sales team as our next phase of expansion in the world. The growth strategies, we're hiring, we plan to triple our size of team members in the upcoming years.

Plus, we recently acquired nice sales license from different parts of the world to pursue with our B2B sales strategy. With accelerating marketing effort and technical service related services provided to the customers. We position ourselves in the right place to grow rapidly. I'll go to market strategy.

To ensure that we are not forgetting about the small and medium farmers, we're partnering with three major animal health pharma companies in the world, in various different countries to ensure our products can reach every corner of the animal industry by selling both branded and private-label products.

The diagnostic service and biologics and once under development will only strengthen our position as we start push forward with the right sales strategy to our key accounts in the markets.

The direct sales to key accounts starting FY 2020 Amlan began targeting key accounts, medium, large, poultry and swine integrators in approximately 30 strategic countries with approximately 200 different companies.

As explained in the last slide, this is just re-emphasize what was discussed and how important it is to set up our regional business hubs to gain control of the product registration and to support our sales process going forward.

Innovation, mineral technologies, our core competency, and our competitive advantage by building upon it we’re developing natural feed additives solution for drug free protein production. With the last slide here, I'd like to show you how ready we are as we show you our long-term development and adoption process.

It can take up to 12 years just to get the product developed and out of the door, including product evaluation, meaning the trials and validation period with different users internationally. And now that one to three years of key account adoption can take the whole product acceptability to a longer than desired period of time.

So the good thing is that, we have quite a few products in the pipeline that will release continuously in upcoming years, because we know the importance of keeping something new to meet the animal, the end user and the customer's needs. Thank you very much. With that, I'll pass it back to our CEO, Dan Jaffee..

Fred, thank you and really impressed with your quick grasps of our business and we're going to turn it over to Q&A. We've got a bunch of questions about Amlan and the changes, and you answered a lot of what's out there. But Leslie, why don’t you read the questions and then we'll….

Yes. We have two related questions. I'm going to read them both together. The first one is from Robert Smith, the Centre for Performance Investing.

And he asked, where was the direction failure at Amlan? And how will your approach be different? Do you believe you will be able to accomplish substantive progress during the current fiscal year? And then the second related question is from Ethan Star, a private investor.

Aside from the pandemic, what are the biggest challenges in growing Amlan sales and why will you succeed where others have not?.

Great. Thank you. And I'm going to take the 50,000 foot. I think you heard a lot from Fred, but I'm going to emphasize what he was talking about. I'm going to analogize it to what went on with lightweight cat litter. Before we revolutionized cat litter, cat litter was denominated on a price per pound basis.

Those with the lowest price per pound were perceived to be the best value. Despite the fact that not a consumer in America or the world used it by pound, they all use it by volume.

So what that incentivized was a race to the bottom putting in the most dense materials you could actually adding rock, so that you could get your weight up, your cost down and your price per pound perceived value to be enhanced.

What we did was turn the entire category on its head to the advantage of the consumer who uses it by volume and the environment, because we were able to cut the carbon footprint by 50%, because we're able to put twice as many units on a truck and cut the number of trucks going into our retailers’ distribution centers in half.

So it's been to their advantage, too. So it's been a win, win, win for everybody except the entrenched players in the category. And it really took a couple of things. It took a contrarian mind, and it took sort of unilateral control. I mean, it just did I mean, I was in a unique position to make this happen, because I am very much a contrarian.

And I had control of the company. And so I could take a $35 million bet that we could turn a $2 billion U.S. market, and frankly, a global market on its head, which is pretty daunting. And most people, if they were betting their careers wouldn't do it, because the odds of success are low and the odds of ending up with a career limiting move are high.

But I was in that unique position. And so we did it, and you see the results, and the best is yet to come. I mean, the snowballs continues to grow. Well, over in Amlan, we were again being letting the competition define the playing field. So they were painting minerals in general as a negative.

And so our prior regime was sort of getting sucked into fighting the battle on the field that the competition wanted to fight. Well, that's not a winning strategy. The key is we want to make them come to our field. And what we control is what Fred said, we have quality all the way to the source, nobody can say that you all here from farm to table.

Well, we control it from mine to farm. And so we're the ultimate and controlling our quality. And our unique mineral is the reason why our products are working so well and do something that really nobody else in the globe is doing. Antibiotics, by definition, antibiotics is killing the bacteria. The bacteria are not the problem.

I'm reading a great book that I highly recommend called the Great Influenza, which covers the Spanish Flu of 1918, because everything that's happening today happen then and only worse.

And in the book, they literally talk about how – and this is Simon Flexner, who is the first Head of the Rockefeller Institute in New York, and they talk about how it isn't that - they figured out it isn't the bacteria, that's the problem. It's the toxins they emit. And that's exactly what our clay does, it binds the toxins.

It's an ad and absorbent it. And so when you put it in the animal's gut, it binds the toxins, which would be causing the problem. The animal excretes them out, which is, a fancy way of saying poops them out, and the animal thrives. And our dual mode of action is also what Fred talked about is quorum sensing.

These bacteria don't take over the host, until they recognize that there are enough of these bad actors in the neighborhood to cause a major problem. And so our clay actually inhibits quorum sensing and we have intellectual property around that.

And so, the integrator should be using our clay not only reactively when there's an outbreak, but prophylactically to prevent it in the first place. And so our dual mode of action is a unique reason for us to be successful. And Fred also talked about the feed conversion ratio in 2x, we have to monetize it.

Creating value from sorbent minerals means creating value for our customers, not for Oil-Dri. We get the benefit in that value creation, because there has to be enough of it for them, where they're happy to pay us a price where we can make our margin and they still win in the equation.

Well, we are doing a much better job now of making sure we communicate the value to the consumer. We communicate why our clay is not just there, but is the essential reason for our success. And then finally, focus.

I'm maniacally disciplined and focused and I got involved and immediately it occurred to me, look, yes, there's a $3 billion global opportunity around antibiotic replacement, 40% of that is in poultry. That's a $1.2 billion opportunity for this tiny little less than $300 million company. We've got Fred as a poultry expert.

He mentioned Heath and Harald, who are both poultry experts. We have a team of existing poultry experts. And yes, we have swine, and we're not going to walk away from those businesses. But clearly, Fred and his team can get sales calls and open doors at every major player around the country. And they understand how our products are used.

How the nutritionists and the decision makers are making their decisions in order to decide how to move away from antibiotics, and where do they go to. And so we're going to lean heavily into poultry, just like we're leaning heavily into lightweight, even though the majority of the category is still heavy, we are winning every day in lightweight.

And now we're going to be winning heavily in flushability. So I hope that answers your question. Really, what I'm bringing to the division, first of all, is rapid decision-making, it cuts out a layer.

So it's never going to be as good as if I'm hands on involved, because I can make the calls, working with Fred, immediately freeing up resources or working with Molly and the IC, or the supply chain, I'm getting decisions made that, frankly, were stuck in bureaucracy and we're such a little company.

It's ironic that we have bureaucracy, but we did have red tape. And I've been able to immediately cut through that just through common sense and just from decision-making power, no great genius on my own. So I feel very, very confident that you're going to see an improvement. I think Bob's question was, I won't hit it exactly. I'll paraphrase that.

Are you going to show meaningful benefits this year? And the answer is absolutely, yes. But it depends how you define it. I think we're going to be taking a step or two back, before we take about 800 steps forward. We've got to fix some things on our go-to-market strategy.

We believe our solutions, because we are basic, we are in a great position to sell the big players direct. The key to that is having the right distribution channels, so that we can sell the big players direct. And so we got to own our own licenses. We’ve got to do all the product registrations, things like that.

So we've got all sorts of work to do, so that we're in a better position to sell the biggest players directly. So we will make huge progress during fiscal 2021.

While the financial progress, it’s going to come from Jessica and the cat litter business, so that by the time 2020 to 2023, and 2024 rolled around, then the Amlan team will be coming over the hill to help save the day.

So, we're, again, always thankful that we have such a diverse business that we have everything's doing well, the ag business, and the while the Pro's Choice business has been hurt by COVID. Obviously, our sports turf, the Industrial business is doing well. Our Fluids Purification business is doing well.

So fiscal 2021 will be a solid financial year, and it will be a pivotal year for the future of Amlan..

Great..

So, Leslie, what else do we’ve got?.

Okay. We have next question from John Bair from Ascend Wealth Advisors. And he says congrats on a great year and a difficult time.

Are there any new markets in animal health outside of poultry and swine that R&D efforts are either being evaluated or being actively pursued? If so, what might they be? And how far along in the process are you to possibly launch any new products?.

Yeah, and I think I hope my competitions, listen, because I'll tell you exactly what we're going to do, so that they can afford all our efforts. John, you know me well. Great question, but I'm not going to answer it. And I think I did sort of answer you that we are really going to be leaning into poultry.

So I think being great at one species is better than being average at all species. So we're really leaning into poultry, and we're going to continue to do so. So next one, I think we had a question on the supply chain. Let's go there..

We do. Ethan Star has the next question. The $5 million in savings in the supply chain is very impressive.

Could you please give some examples of how this was achieved? And what the prospects are for any possible future savings?.

Molly, take it away..

Sure. Yes. So I look at savings in three main buckets, logistics, procurement and manufacturing. And in fiscal 2020 by far the biggest savings were in logistics. Some of that is market driven. But I will say that our VP of Logistics, J.T. Harrison really capitalized on the market last year and wrote some really great contracts for us.

But he also led a considerable amount of savings projects that either reduced miles or extra handling or additional costs. So for example, we were able to consolidate some of our ancillary warehouses, reduce mileage, handling in some extra costs. And that's the theme that's he's driven last year.

And then for logistics this year, as we read our first quarter results, we actually are going to have to offset, some -- made some pretty significant increases in the market. And so we do have some other similar type logistics savings projects where we reduce handling mileage, and improve our utilization across the board.

For manufacturing, we've really seen some overall process improvements. So Aaron Christiansen, our VP of manufacturing and that team have really put a foundational process in place, optimize the way we run our business, and will continue to do so.

And then in fiscal 2021 in the manufacturing area, we actually will be starting up some pretty significant capital that we spent that we'll see the savings for, the first we are looking at alternative energy in our cat facility, solar panels and micro-turbines. It's some pretty great projects.

And then we have some automatic and optimization in one of our jug lines, so that will be pretty significant. And then the last bucket is in procurement.

And that is getting a great focus by our procurement team to really look at opportunities to either renegotiate find different suppliers, or in some cases just redesign the product that are optimized cost. So we've seen great progress both last year too..

Great. Thank you. Leslie, next question..

Yes. Next question comes from Ethan Star.

I'm pleased with the growth in cat litter sales, what opportunities are there for continued sales growth and the addition of new retail customers?.

Great.

Jessica, you want to take this one?.

Sure. Hi, Ethan. Thanks for the question. So as we look at our business, we definitely continue to see opportunities for both customer acquisition as well as organic growth. How we look at our business in terms of change and reacting to change? Clearly, consumers are rapidly changing, and we need to make sure that we're adapting.

So we're also doing so in a very focused data driven way. So like we talked about in the presentation, we continue to be keenly focused on lightweight and flushability. And frankly, it's really about looking at what's working and what's not.

In today's world, we're very fortunate to have a lot of data and a lot of opportunities to evaluate what's working and what not.

And it sounds simple, but it's really about evaluating what's working and doubling down on that, as well as reacting to consumers and understanding how consumers are changing, and then how we can change in a way that is this really advantageous to us. And that really benefits to us and where we have a right to win.

Looking at marketing, looking at sales, understanding what's working, and then doubling down both from a resource dollars perspective, as well as investing against human resources and team against those key efforts that are really working.

We think in lightweight, there's a lot more runway in terms of growth, both again, through customer acquisition, both on the private label side as well as the branded side..

Great. Great answer. Thank you, Jessica. And we are out of questions. And I want to thank you all and I promise to finish the way I started, which is thanking the Oil-Dri teammates globally for keeping not only ourselves fiscally and physically healthy, but also our investors.

I know a lot of people rely on our dividend and appreciate our dividend and keeping Oil-Dri. So a lot of companies had to cut their dividend and some cut it just worried that things were going to happen, because they had enough debt and so forth. We entered into the pandemic. That's the part that wasn't lucky.

We've always run our business very, very fiscally soundly, and we entered into the pandemic in great financial shape. So we didn't panic. We just said, let's see how this plays out. And it played out very well. We saw a surge in cat litter. We saw continued demand in almost all businesses.

We're starting to see a weakening in our jet fuel purification business as global miles flown has gone down. And that's not a surprise. And we are cautiously optimistic that with the vaccine, which I guess is starting in the U.K. this week, which is exciting, that that starts to roll out globally. That it'll come to the U.S.

and we will see pitchers and catchers report sometime in April, maybe they'll push the season back a month. Maybe it'll be May. But then that'll mean that universities and municipalities and park districts will be doing the same. And then our Pro's Choice business will pop back sometime in the late spring, early summer of next year.

So, thank you for your continued support, and we'll look forward to talking to you after our next quarter..

That concludes today's conference. Thank you for your participation and have a pleasant day..