Good morning and welcome to Oil-Dri Corporation of America's 2023 Annual Meeting of Stockholders. My name is Leslie Garber and I am the Director of Investor Relations at Oil Dri.

We're conducting this meeting virtually, a format which enables greater stockholder attendance and participation, improved efficiency, and increases our ability to communicate with stockholders and reduces costs.

On your screen under meeting materials, you will find the meeting agenda, rules of contact, list of stockholders of record, and Oil-Dri's proxy statement and annual report. During the meeting today, we will be covering the election of directors and four other proposals.

Next will be the business presentations and financial review followed by time for Q&A. We ask that you submit your questions online under the Ask a Question field on your screen. Only stockholders of record are able to ask questions during the meeting. Stockholders will also be able to vote online by clicking the Vote Here button on your screen.

Now it is my pleasure to introduce Laura Scheland, our Chief Legal Officer and the Vice President and General Manager of the Consumer Products Division. She will conduct a formal portion of today's meeting..

Good morning ladies and gentlemen. I now call the order of the 2023 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 30, 2023, 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 16th, 2023, 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 this meeting.

Broadridge Financial Solutions Inc. has delivered an affidavit confirming the foregone. Oil-Dri has appointed Peter Sablich of CT Hagberg LLC to serve as the Inspector of Election for this meeting. He is present on the webcast and has taken the oath of office.

As of October 16, 2023 the record date for this meeting, there were 5,108,734 shares of Oil-Dri's common stock and 2,170,415 shares of Oil-Dri's Class B stock outstanding.

Holders of our common stock are entitled 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 and Class B stock outstanding are present in person or represented by proxy.

Thus, the number of votes necessary to constitute a quorum at this meeting is 13,416,505 votes. Mr. Sablich has informed me that there are more than such numbers of votes represented at this meeting. Therefore, I declare there is a quorum present for purposes of transacting business. Now, I will present the matters to be voted upon.

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

As described in the proxy statement, the first item of business is the election of nine Directors. The proxy statement listed Oil-Dri's nominees for Director, each of whom currently serves as a Director of Oil-Dri. Those nominees are Daniel S. Jaffee, Ellen-Blair Chube, Paul M. Hindsley, Michael A. Nemeroff, George C. Roeth, Amy L. Ryan, Patricia J.

Schmeda, Allan H. Selig, and Lawrence E. Washow. The second item of business is the ratification of the appointment of Grant Thornton LLP as Oil-Dri's independent auditor for the fiscal year ended July 31, 2024.

The Audit Committee of the Board of Directors of Oil-Dri has appointed Grant Thornton to serve as the company's independent auditor for fiscal year 2024 and has directed that appointment to be submitted for ratification by the stockholders at this meeting.

The third item of business is the approval on an advisory basis of the compensation of the named executive officers as described in the proxy statement.

The fourth item of business is to select on an advisory basis the frequency for which future advisory votes will be held on the compensation of the named executive officers described in the proxy statement. Stockholders may choose whether they prefer we seek a vote every one, two, or three years, or they may abstain from voting.

The fifth item of business is the approval of the amended and restated Oil-Dri Corporation of America 2006 Long-Term Incentive Plan, which increases the number of shares of stock authorized for issuance [indiscernible] and increases the maximum individual grant size, among other modifications.

At this time, we will check for and review any comments on the proposals that have been submitted. It looks like no comments have been received, so we will proceed with opening the polls. It is 9.35 a.m. on December 13, 2023, and the polls are now open.

Any stockholder who hasn't yet voted or wishes to change their vote may do so by clicking on the Vote Here button on your screen. Stockholders who have sent in proxies or voted via telephone or Internet and who do not wish to change their vote do not need to take any further action.

While we allow some time for stockholders who haven't already done so to complete their voting, I'd like to remind you that the business presentations and any other commentary by any of Oil-Dri's employees today may contain forward-looking statements of expected future performance.

Any such forward-looking statements are subject to certain risks, uncertainties, and assumptions that could cause actual results to differ materially. We highlight a number of important risk factors that may affect our future performance in our SEC filing, including our annual report for the fiscal year ended July 31, 2023.

We urge you to review and consider those risk factors carefully in evaluating the company's comments and evaluating any investment in Oil-Dri stocks. Copies of our SEC filings are available through the company or online. All right. One last minute to finish voting. Okay. At this point, the polls are closed.

And I will now report the preliminary results of the voting. We will be reporting the final vote results in a Form 8-K to be filed within four business days. As described in the proxy statement, a director may only be elected by a plurality of vote cast. The nine nominees who received the largest number of votes will be elected.

We have been informed by the Inspector of Election that the preliminary vote report shows that the nine candidates nominated by Oil-Dri received the largest number of votes.

Regarding the second item of business, an affirmative majority of votes represented at this meeting is necessary for ratification of the appointment of Grant Thornton as Oil-Dri's Independent Auditor for the fiscal year ending July 31, 2024.

We have been informed by the Inspector of Elections that the preliminary vote report shows that such ratification received more than a majority of the votes represented at this meeting.

Regarding the third item of business, an affirmative majority of votes represented at this meeting is needed to improve on an advisory and non-binding basis the executive compensation of the named executive officers, as disclosed in the proxy statement.

We have been informed by the Inspector of Election that the preliminary vote report shows that such approval received more than a majority of the votes represented at this meeting.

On the fourth item of business, which is the non-binding advisory vote on the frequency of future advisory votes on executive compensation, the frequency every one, two, or three years receiving the greatest number of votes cast will be considered to be the recommendation of the stockholders.

We have been informed by the Inspector of Election that the preliminary vote report shows that three years received the greatest number of votes cast at this meeting.

Regarding the fifth and final item of business, an affirmative majority of votes represented at this meeting is needed to approve the amended and recreated Oil-Dri Corporation of America's 2006 Long-Term Incentive Plan.

We have been informed by the Inspector of Election that the preliminary vote shows that such approval received more than a majority of the votes represented at this meeting. This completes the business to be conducted at this meeting.

There being no further business to come before the meeting, the 2023 Annual Meeting of Stockholders of Oil-Dri Corporation of America is now adjourned. I am now happy to introduce Dan Jaffee, our President and Chief Executive Officer for our business presentations and financial review..

Thank you Laura, and welcome everyone to the business section. We've got a great line of presentations for you today. Fiscal 2023 was our 83rd year in business, and it was our best. And fiscal 2024 will be our 84th, and we're off to a great start, and you'll hear all about that coming up.

And investment in Oil-Dri is truly an investment in our people and I cannot over emphasize how great our team is and how appreciative I am for their work. I mean, it's the most talented, most cohesive, most positive team I've ever seen in business.

And I think most of our teammates feel the exact same way and that's a direct correlation to the results you're seeing. It's not a coincidence. So I would like to highlight a few of the teammates who made the biggest contribution. No, I'm kidding. It's really people that were promoted during the year.

Everybody made a big contribution, which is why we call everyone a teammate, because we're all on the same team. But this just highlights some of the people that during the year were promoted, took on new challenges, and are adding value in a new area.

First and foremost, Laura Scheland, who, as you saw, has the longest title in Corporate America, Chief Legal Officer, Vice President and General Manager of the Consumer Products Division, an all-around great person.

Currently at Oil-Dri, she oversees our legal affairs, but also is grabbing the reins of our largest division, which is the cat litter business, the consumer products division.

You can see, she comes to us with a wealth of background and experience, but aside from being a lawyer, she was actually an accounting major back at Notre Dame, and so it clearly has a strong business background. She's been with us now 10 years, has continued to get promoted.

And as Michael Nemeroff, one of our board directors says, when she was at better price, she was absolutely one of the all-time best associates. So, Laura, congratulations on your promotion and thank you for taking on new challenges. Her move up created room for Tony Parker to jump up into the role of Vice President of Legal.

He will oversee the entire legal, well, most of the legal department, I think, but including advising on corporate matters, intellectual property, litigation, and employment issues. I received his [JD] (ph) from Northern Illinois. You can see, he's been with us five years and was a Chick-Evans scholar back in college, which I think is very impressive.

And in fact, it's gotten me to where I now support them every year, because it's really a cool thing. And congratulations to Tony for the great career he's put together, and thank him for taking on new challenges going forward. We're in great shape in the legal area.

And last but not least, Jacob Smith rejoined the team, and he is our Vice President of Finance and Treasury. He has oversight over all of our treasury, corporate, and divisional finance and accounts receivable. He went to double Indiana, double Hoosier undergrad, finance and accounting with an MBA also from Indiana.

A total experience with us is five years. Before that, he was with Pepsi. So please recognize and congratulate Jacob Smith on his new role. I don't want to steal any of Susan Kreh's thunder, especially since last [indiscernible] to cover her entire presentation.

So I'm going to turn it over to Susan for a financial review of the fiscal year and the first quarter..

Thank you, Dan. It's not open mic night to today..

It is not. I'm not bummed..

It's truly a privilege to be here today to share some highlights of our fiscal year 2023, which was an all-time record year for Oil-Dri, as well as to share some highlights for the first quarter of fiscal 2024, where we continue to see momentum as the team, and Dan mentioned, it's a really strong team, delivers double-digit net sales growth across the board and doubles net income over the first quarter of fiscal 2023.

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

As you're reviewing the trends, you will note that the global pandemic had a significant impact not on our top line or on our sales, but on Oil-Dri’s earnings as the costs associated with the disruptions in the global supply chain gets faster than we were able to pass on in pricing.

You will see that not only have we recovered, but we emerged stronger than ever, spurred by a tailwind of growth in high-value products, such as lightweight cat litter, specialty products which include edible oils and renewable diesel, and animal health and nutrition products.

That recovery in growth resulted from our team's focus on our growth strategies even during tough economic times that were incurred during the pandemic. Under Dan's guidance, our team stayed focused on our long-term goals, while successfully navigating the short-term challenges presented by the supply chain.

And we are benefiting from that long-term focus today. Now, I don't want to steal the thunder, even though I'm going to just a little, but I will share the highlights. In a few minutes, Chris Lampson will discuss the successful launch of our Cat’s Pride Antibacterial Clumping Litter. Dr.

Wade Robey will share some of the highlights that drove the double-digit growth in our animal health products. And Bruce Patsey joins us this morning to brief us on the renewable diesel market and the opportunities that presents to Oil-Dri.

Next, I'll move through the financial section of this morning's presentation quickly, highlighting some key events and performance metrics, primarily focusing on the first quarter of fiscal 2024. But first, let's dive a little deeper and look at where the growth is coming from.

You will note that all five of our principal product groups have turned in double-digit compound annual growth rates over the past three years. Inside the retail and wholesale segment, we achieved cat litter growth of over 13%, and industrial and sports growth of over 17%.

And within our higher margin business to business segment, we achieved compound annual growth rates of 24%, for agricultural and horticultural products, growth of over 21% for our bleaching, clay, and fluids purification products, and 15.5% growth for our animal health and nutrition products.

In other words, we are firing on all cylinders and growing significantly in all product groups. We've experienced five years of sales growth, even throughout the pandemic, as people adopted animals as they were working from home, and that continues to grow into fiscal 2024.

And you see the nice growth to $111 million, a record for sales in our first quarter of 2024. When we look at tons sold, we see the impact in fiscal 2023 of a specific decision we made to shed some low to no margin business inside our consumer division. And that actually helps with profitability.

And as we look at Q1 here in fiscal 2024, you'll see that we are actually below the prior year in terms of tons sold. And we were impacted there by a very large customer that had an outage as a result of a ransomware attack. That customer is back online in the second quarter and pretty much back to business as usual.

If I look at net sales per ton, you can see the impact of the pricing initiatives that were obviously very significant and are help driving our profitability today. And we continue to see the benefit of that into Q1 where our net sales per ton have risen to $563 per ton. A remarkable story and excellent work on the part of our sales teams.

If I go to gross profit per ton, you see what I said in my opening comments, coming through the pandemic, the impact of the increasing cost to supply, but that we've recouped a lot of that and today find ourselves at $156 per ton, an all-time records.

We still have a little more work to do as our gross margin percent is climbing back up to 27.8%, but not quite at the levels it was prior to 2019. So the teams are focused on profitability, focused on serving the right business, and we continue to see the benefit of that focus.

If I look at net income per ton, I would just point out that in fiscal 2023, we had a non-recurring charge related to the termination of our pension. It's a defined benefit pension plan. And that was $4.6 million net of taxes.

That actually positions us nicely because we no longer have the volatility of a defined benefit plan with respect to either the pension liability or actually the related assets that go along with that. So that actually makes our debt capacity even better as we look forward and think about what we might want to do in the area of acquisitions.

Again, that net income per ton in Q1 rising to $54, more than double what we saw in the same quarter of last year. Earnings per basic common share, you see the strong benefit of the first quarter here, again, more than double what we posted in the first quarter of last year at $1.61 per share.

And you see our continued commitment to our dividends at $0.29 per share here in Q1 versus $0.28 last year and 20 years of continuously increasing the dividends of Oil-Dri and returning to our shareholders. If we look at our significant cash outlays, and we'll be hearing from Aaron Christiansen pretty soon, our VP of Operations.

We are making some very specific investments, both in growth and in replacing aged assets inside our manufacturing and mining facilities. You see that's the biggest piece of the pie, and it's a priority for us as we are performing well and reinvesting in the business.

We also see a significant investment in working capital in fiscal 2023 as the business is growing and actually growing outside the U.S. We see the need to build our working capital in specifically inventories and receivables in order to support our customers. Net debt, that's a really nice position to be.

As far as net debt, meaning, we have a lot of dry capacity and a lot of debt capacity available to us moving forward to pursue strategic initiatives. And here's the one that's, I think, making everybody smile these days, and that is our share price.

And the stock, obviously, after we released earnings the other day was received favorably and we saw a bump at that point in time as well. Free cash flow is -- continues to be good and we will focus on cash and move on from there. And then I'll just conclude with a couple of highlights here. We are going to hear about our innovative products.

You're going to hear our commitment to grow the business using the cash that we are generating in order to not only invest in growth assets, but also potentially have some dry powder for any potential strategic acquisitions that may come along.

There's also been a significant investment in alternative energy in our past California plans that I'm really excited about. It's up, it's operational. Early indications are that, it will be even more beneficial from a financial standpoint than we originally thought when we made the investment on booking at Aaron.

And with that, that's a good segue to turn this over to Aaron Christiansen, our VP of Operations..

Thank you, Susan. I'm really excited to have a chance again this year to talk to our shareholders for a brief minute. Much like last year, I'm going to speak exclusively to the multi-year continued commitment in capital reinvestment in our business.

A reminder, and I shared a similar message a year ago, Oil-Dri is continually looking for ways to invest in business continuity through the reestablishment of our aging asset base, looking for savings opportunities and growth opportunities.

We also are continually looking for unique ways to invest in working conditions for our teammates, our mineral reserves, which is the lifeblood of our business and our facilities themselves. Shown here is the past five-year trend for capital reinvestment. Susan alluded to this earlier.

Fiscal 2023 was the highest year of capital expenditure in Oil-Dri's history, investing approximately $24 million in capital. Fiscal 2024 and beyond are anticipated being at or above these levels. Oil-Dri is committed in the years ahead, as Susan alluded to, to reinvesting in our business, for our consumers and our shareholders.

I'm going to talk through three specific investments that have been made and completed or will be made in the year ahead to give our shareholders some insight into the array of things Oil-Dri is spending capital into. Susan just alluded to this one. We have invested in a series of alternative energy technologies in our Taft, California plant.

I've had a chance to talk with this multiple times over the past quarterly and annual meetings. It has been a long journey to get to the point we are now. It is now fully operational.

It's a combination of LED lighting, some power monitoring technology, and the two primary solutions, which are a combination of PV solar and natural gas-fired turbine generators that use natural gas to generate our own electricity.

These technologies do not make us energy independent, but do deliver a very large percentage of both instantaneous demand and monthly usage. We are really excited to bring them to life. And as Susan alluded to early indications just in the past months are extraordinarily encouraging.

We will continue to look for places that we can reapply similar technology in our other facilities as it makes good business sense. The next investment I'd like to talk about is an investment in our agricultural products and capacity. Over the last number of years, Oil-Dri has made capacity investments in our spherical, more premium verge products.

This is an investment being made in our more traditional, angular, exhort products. The capital has been appropriated, detailed engineering is underway, and sometime in late fiscal 2024 or early fiscal 2025, capacity will come online.

The uniqueness in this investment is that debottleneck constrain production operations in one of our plants that finds a unique way to add capacity for growth, deliver some cost compression, and rehabilitate old technology in an aging part of one of our primary producing plants.

We are very excited to be adding capacity to support this piece of business. The last series of investments I'll talk to, which is a preview of what Bruce will be speaking to later today, is a series of investments being made in our fluids purification business, largely to support renewable diesel.

Also appropriated and well along the way, we're making investments to debottleneck the core part of our milling operation, but also add rail infrastructure to be able to move product more effectively and efficiently in and out of the plant.

Rail infrastructure investments come online this coming February soon and sometime likely no later than the fourth quarter of this year capacity will come online to support more sales or top and bottom line growth. We are very excited to deliver growth opportunities for our bleaching [earth] (ph) and fluids purification business.

With that being said, I'd like to hand the baton to our Group Vice President of Retail and Wholesale, Chris Lamson..

Thanks, Aaron, and good morning, everyone. Good to be back with you again this year and talking about exactly what we talked about last year, relative to the lightweight business. And hopefully you feel good about that. Hopefully that demonstrates strategic consistency. Last year, I think we were talking, it was more of a tell than a show.

We were really talking about some shifts in strategic plans to further accelerate our growth in lightweight. This year will be more show than tell. We've activated a number of those plans and we're excited to give you a better feel for you today by showing them.

We've started, I think, over the last several years with a few slides to just ground you in what's been very solid growth across our litter business. So this gives you a picture of our domestic cat litter business as a whole with strong growth just over 10% approach at 11%. And I think the consistency of the growth is worth calling your attention to.

Then shifting to our lightweight litter business, you saw an 11% compounded growth on the previous slide. Here you see 17% growth and if you pay particular attention to this last year.

First, I'm wondering why some of our long-term shareholders didn't go out and buy $100,000 more in litter, so we could have hit triple digits there and gotten to $100 million. Help a guy out. But in all seriousness, about 30% growth year-over-year on the lightweight business, which speaks to, I think, some of that strategic consistency.

Now, it should come as no surprise given that kind of growth, given that 30% growth, that we're growing share within the lightweight segment. We actually grew share overall within cat litter over the past year. So the first two bars really -- first two charts really represent that.

So growth in overall share of lightweight and then significant growth in private label light weight approaching about 80%. But we always need something to work on, which is, we really do believe, and in fact, these are dollar shares, but we're the unit share leader in lightweight litter. It's incumbent upon us to grow the lightweight segment.

It's Really what most of the presentation is about.

And I know my boss is pretty passionate about this topic because, Dan, you want to?.

Yes, because what the market is saying is that, 15% of the category has moved-ish to lightweight. Now, we know that over half the category in Canada has moved to lightweight, and we actually don't believe that Canadian cats or Canadian consumers are that much different from their U.S. counterparts.

So there's some disconnect there and we can talk about that and Chris has talked about it. But if you just look mathematically and say, okay, so 15% like lightweight, does that mean that 85% of consumers, all things being equal? And we know the consumer in cat litter tends to be women 25 to 54 years of age.

So you're saying women in general prefer a product that's two to times times heavier. And I think the operative word is, all things being equal. The fact is, it's not equal. They're either able to get a better value. We have competitors that have decided to charge 30% to 40% more for lightweight. Well, that's a big hit on an annual budget.

So there are consumers that says, for that delta, I'm taking home the heavier product. We have competitors who have launched somewhat inferior products, or they're good products, but they're really not that light. So there really isn't all things being equal. The consumer doesn't have that. And so we have launched Project Utopia and that's our goal.

Our goal is to give the consumer what they want, what the efficacy they want, at a price point that they believe there's real value at. And at that point, we believe they'll choose lightweight.

So I'll turn it back to you, because we can tell I'm very passionate about this, because I don't believe that all things being equal, consumers prefer three times the weight. And by the way, the carbon footprint is three times worse because we weigh out trucks.

So if we can get the consumer what they want, it'll actually help the environment in a big way..

So really a perfect setup. The rest of the presentation is really how do we further stimulate growth and it's like 60 plus up in Canada. So how do we transform the US category? [Multiple Speakers] I shouldn't have told you. So how do we get there? It is clearly a journey. It's one that I think, really the top box there is the top box for a reason.

It's going to take significant innovation. Dan gave you our internal project name, which is Project Utopia. And it is sort of what it implies. It is all about removing the barriers that Dan spoke to. Be them value barriers that we control. Be them quality and performance barriers.

But we have exemplified that we, as a smaller player in the category, can bring breakthrough innovation. We did it in 2011 with lightweight litter. We believe this year we launched just within the last quarter, in the last fiscal year, significant innovation.

Our customers are telling us a significant innovation in the first and only EPA approved antibacterial cat litter. We'll talk more about that. The second piece of the platform, if you will, is really making sure lightweight and the benefits of lightweight are at the center of our consumer message. We'll show you some of that here in a minute.

And then finally, and with I think a lot of consistency, a lot of the same benefits that Dan just spoke of around the carbon footprint, the ability to handle, the ability to fill trucks in a more effective way, and growing consumer need for lightweight are all at the center of our message, by our retailers and they're listening and candidly driving the lightweight business with us.

So those are really the three platforms. All three of those we talked about last year. What we're going to show you on the next couple of slides is what [indiscernible]. So first, going a little bit deeper on the new antibacterial clumping litter.

So it's the Environmental Protection Agency that actually approves or gives you the right to say that your product -- your surface cleaner for instance, is either antibacterial or disinfectant. They put you through, appropriately, a rigorous process to be able to process.

That process takes a year to two years with the federal government and then another year or two years with state government. So, one takeaway there is, scrutiny has got to work. The other takeaway is, we've got a heck of a moat built around this business. Is there consumer need? You bet.

I mean, there's two real key consumer drivers in this category, in the scoop category in particular. It's clump strength, but really odor control. And they go one, two, depending on when you run the consumer study, right? So talk about order control for a long time and controlling odor-causing bacteria.

This is the first and only product that can say that we actually kill those odor-causing bacteria. And I'll tell you, the response from customers has been fantastic. Really what you're looking at is a good look at the customers that brought this in as immediately as they could.

The couple of really large customers on this page that brought the product in even off their shelf change cycle. They were that enthused about it. So really the prevailing word we got on this back from consumers is thanks for bringing real innovation. Thanks for bringing real product innovation and not just consumer noise.

Next piece, and this is again a bit of a shift for us. We've had and continue to have a fantastic social good campaign called Litter for Good where we donate, let's just say, a ton of product to shelters that are very much in need and very much appreciated. So we've been talking about as it relates to our Cat's Bride, Litter for Good, for some time.

We have shifted now to really talk about the lightweight, the benefits of lightweight litter. And we're doing it across, as you would expect, a variety of media channels in a 360 degree way. Some traditional television, I tell you not much, candidly.

Digital TV, I'm going to give you a couple of examples here in a minute, share some media from that digital TV. Banner ads like you see pictured here. And really this is a -- we're very active here in terms of measuring our ROIs and shifting media around. But the real key is the messaging that we're driving in terms of lightweight litter.

Because again, we are the share leader within -- from a unit perspective, from a volume perspective, without lightweight we're not driving this message to it. So Nick, if you wouldn't mind sharing the couple shots of media, you're going to see our base media and then our -- some of the media supporting our new antibacterial operation.

[Video Presentation].

Back to you, Chris..

Thanks, Nick. Finally, we'll wrap up. And a little bit difficult to depict for you our sales folks in selling with fires. We did think we'd talk about what has been really extraordinary results here in terms of distribution, in particular.

So as you look across our lightweight business and that 80 share on the private label side, we can now say that over 50% of all outlets, individual doors that sell cat litters, sell Oil-Dri private label light weight cat litters. Which is fairly remarkable.

Some of the doors and probably the majority of the doors that don't are actually doors that just don't sell private label [indiscernible] or at least lightweight cat litter period. We've also really experienced over the last couple of years.

I think, as we've talked before on calls about great progress relative to getting our price value relationship right. We've done that particularly well in e-comm, and you can see that since 2021, we've actually just a little more than doubled our share on Amazon.

And then finally, really solid new distribution gains, particularly around private label new doors. So brand new outlets. And then, as it relates to the brand, what we've seen, and actually saw this question pop up, go ahead and practically address it.

Really on the branded side, it's been a story more of expanded distribution, where we already have distribution, particularly behind the antibacterial innovation where almost all of those new doors were incremental distribution. Said differently. We didn't lose anything. We just gained.

So really, just to wrap it up, this story begins with us innovating in this category back in 2011. Retailers responded to gain distribution. We level up on consumer messaging that hits the mark and is driving strong ROI's. That drives further distribution, fuels further innovation that Dan alluded to.

Where -- yes, we did drive true innovation around antibacterial, but we're focused over the long term on removing any and all barriers to lightweighting. And they're chasing that market. So with that, I will turn it over to Bruce Patsey, who we love to call Bruce almighty..

Yeah. Very funny. Chris, thanks very much. I appreciate it. It's exciting to see all the growth in your market. I'm Bruce Patsey, the Vice President of Fluids Purification Group, and one of the items I'll be talking about, a new market opportunity, as you've heard about, renewable diesel in this presentation.

Our filtration unit, we sell the three main categories of business. So we sell into vegetable oil business, and we sell into jet fuel processing, where we're adding a small granule to clean up jet fuel before it goes to the yard to be put in the plane. And then lastly, we sell into biofuels market, which is both renewable and biodiesel market.

And we sell a couple of new absorbents, metal X and metal Z, into this marketplace. And it's where we're seeing a lot of growth in our business. If you take a look over the last five years of our business, you'll find that in fiscal 2022 and 2023 we've seen significant growth in our business, and a lot of that is tied to the renewable diesel business.

And also we've picked up some new vegetable oil customers in that timeline as well, which has been very exciting for our business. What is renewable diesel? Well, renewable diesel is an advanced biofuel that's derived from vegetable oils, natural fats and greases.

It burns cleaner than diesel, regular oil diesel fuel from the ground and emits less carbon dioxide than petroleum diesel, which is a big driver in why this industry is really starting to grow so fast. How is it different from biodiesel? Biodiesel has been around for a while.

A renewable diesel is chemically the same as petroleum diesel, and you can blend it in at 100% right into diesel fuel. So that's driving a lot of oil companies that make mineral oil. They're putting in renewable diesel plants next to these facilities and they're just bringing the oil in and mixing it together.

Biodiesel is chemically different than petroleum diesel. And you can only blend that in at 10% or 15%, which you've seen at the pumps and that for trucks and that. So it's a different type of fuel.

Metal X and Metal Z are the two products I mentioned for this market that we brought in and it's a powder mineral and they put it into the oil and they slurry it to make contact with these contaminants that we're trying to remove.

And again, the main thing is, it's trying to take out are trace metals, calcium, magnesium, sodium, things like that that are in the oil, as well as pull out organic and inorganic phosphorous.

And why are they pulling these out of the oil, and why do they need this in their processes? Because downstream when they convert the fat into diesel fuel or renewable diesel fuel, the catalyst is very expensive, and these trace metals and phosphorus can actually reduce the life of the catalyst.

So they try to remove these before the oil gets to that part of the process. Optimized production efficiency. So our products really do help in the production capacity of these plants because they allow the oil to go through the mineral very fast and much faster than a lot of our competitors.

And what does that mean? Because when the clay is slurried as a powder, they take it out in a filter press. As the clay builds on the screens of the filter press, the oil is pushed through that clay. If the clay doesn't let the oil go through very easy, it slows production.

Our clay allows the oil to go through fast, which helps these big companies to produce a lot of oil. Here's the driver growth that you can see in this market. So by 2030, approximately, they're trying to get to 7.4 billion gallons of renewable diesel in the marketplace. And today there are right around 4.1 billion gallons in this market.

So you can see there's a lot of growth happening. There is going to have to happen in order to get to these volumes in this industry. Benefits of renewable fuels? First, there's government incentives. Just for an example, in January 1 of 2025, there's going to be approximately a $1 tax credit for every gallon of non-aviation fuel produced.

I mean, that's very significant. The amount of money that are going to these plants really helps these companies to actually build the facilities. So the government's behind this industry, which is key. Reduction in CO2 gas. So up to 80% is reduced in greenhouse gas emissions when you drop this fuel into the marketplace.

So again, that's – there's big drivers. Everyone knows that CO2 is a concern with the warming of the planet. So anything we can do in that area will help. And this is a big driver for this industry. Repurposing of existing refineries. So some of the refineries in the past have been shut down or reduced because of environmental reasons.

These big oil companies can now actually put in these facilities that will be able to use the same land and some shared equipment to produce the renewable diesel. And then overall, cleaner burning fuel.

There's not any sulfur or oxygen and different aromatics that are in this oil so that when it burns, it burns cleaner when you're talking about renewable diesel. As we look forward, the new renewable diesel plants are going to be coming on in 2024 to 2030.

There are some already in the marketplace producing, and you can see that in the growth of our business. There's more coming on in the next six years.

Continued growth in the vegetable oil market; one, to meet the needs of this renewable diesel industry, but also as we -- there's more and more people on the planet, people have to eat, and there's growth in the need for vegetable oil processing. Increased growth in our core market. And what is our core market? Well, North America is our core market.

That's where our plant's located. So this is really positive for the profitability of our business, that we can sell competitively and maximize our profits in our core market.

And then experience sales team, I've been general manager for 20 years in this business and most of the sales people that are out there today are still the same people that were with me back in 2004. And we bring a lot of value to these refineries. We know how to process the oil.

We can help them reduce the amount of consumption of clay and improve their economics of their plants. And then improvement of manufacturing. Aaron talked about the infrastructure with the improve for rail car movement at our plant where we've got rail cars on order to meet the demand of this market and then increase capacity for milling.

So I think the future is very bright for our business and we really look forward to the rest of fiscal 2024 and beyond. With that, I'm going to turn it over to Wade Robey, who is the current Vice President of our Agricultural Division and the President of Amlan International. So Wade, take it away..

Yeah, thank you, Bruce, and good morning, everyone. It's my privilege this morning to talk to you about our Amlan International business. Amlan is the Animal Nutrition and Health Business of Oil-Dri Corporation of America.

I'm going to start this morning with an overview of our portfolio just to level set everyone and help everyone understand how we go to market around the world. We have a unique set of branded items that we sell in North America. We launched these just a couple of years ago, which I'll show you on a subsequent graph.

But we address this market with a number of different products that are designed to improve the productivity of animals to help them reach their potential, and really help the economics of production.

When we look internationally, we have an opportunity to target very specific segments of the market, so we organize our products a little bit differently, and we brand them differently, and promote them differently in the market.

So under our disease prevention sector, we have a couple of new products we've launched, a product called [NutriPath] (ph) that we'll discuss a little bit later in a product spotlight.

And also a product called [indiscernible] or [indiscernible] Fusion, which is a natural anticoxidial product that can work either individually or synergistically in a bio shuttle program with other anticoxidials, whether they be chemicals or antibiotics or even anticoxidial vaccines.

We also have products that target just general productivity or feed efficiency in animals. That's our varium and our neoprime products. And then lastly, our Cadillac products for biotoxin control, Calibran Z and Calibran A.

As you look at our performance over the last five years from 2019, obviously moving through the pandemic, we've seen nice growth in the Amelin business with a compounded annual growth rate of 11.3%.

Coming out of the pandemic, as we started to return to more normal business in 2022, we saw very sharp growth of 18% year-over-year, and then 17% last year with the fiscal year ending at the end of July.

Now this was in spite of not only the pandemic and interruptions in the logistics that we saw around the world and the ability to serve markets, but also pretty significant disease outbreaks with African swine fever and avian influenza, which is still persistent, especially in the United States.

So we've seen a very nice growth through that period, and we expect to accelerate that into the future. You can see on this chart, sorbent listed at the bottom of the x-axis. We launched that North American portfolio as we started into 2022. So really our North American sales started in significant measure there.

And we're seeing the reflection of that now in fiscal year 2023. And we expect to see that accelerate even more into the future. If you look at our sales by region, this again is FY 2023 versus FY 2022. You see again my mention of a launch in North America and the very rapid growth of the North American market.

We expect the North American market to be our largest market in just a couple of years, which is consistent with other feed additive markets we see with other suppliers to this industry. Latin America grew very strongly as well, driven especially by Brazil, which is a major exporter of broiler meat. Our Mexico business grew well.

We also at the same time in 2023 completed the final acquisition of [Agra-Mex] (ph), which is our Mexican operation. That business is now completely run by Oil-Dri Amlan and we expect very strong growth going forward in Mexico as we continue to sell direct to key producers there. In China, we saw a downturn. Some of that was due to market conditions.

Some of that was due to a pretty significant restructuring we did of the China business. We had previously gone to market direct in China with a very large staff, with a very large suite of distribution partners. We've now narrowed that significantly.

We've got a couple of representatives now in China running that business and working with a single master distributor, which helps us address that market more efficiently with less risk, less financial risk to the company. And then finally, Asia still grew 2% in spite of lingering effects of the pandemic.

And again, pretty significant downturns caused by African swine fever, which caused pretty severe depopulations in the swine herds.

So why are consumers interested in Amlan products? Why do we see the growth that we're seeing in our business? It really is a global move by consumers to desire what we'll call clean food or food that is produced more naturally and more sustainably without the use of pharmaceuticals, without the use of harsh chemicals.

Amlan's products fit very naturally, very nicely within that demand. Our products are based on Oil-Dri’s natural mineral sources that really offer a broad range of efficacies to our customers but bring them in a natural way. It allows producers to grow animals without the use of pharmaceuticals in many cases.

So we are the right product at the right place in the right time. When you look at the market or the overall opportunity in spite of the pandemic, in spite of the conditions of avian influenza, African swine fever, as I mentioned, it is an enormously large market.

You can see in the graph on the left that the broiler and swine markets dominate, but the ruminant market, pets, aquaculture, both finfish and crustaceans, are also significant markets as well and growing rapidly. The graph represents the curve from 2017 to 2022. As we look forward, we expect the market to grow about 3.5% annually.

And we expect pet, aqua, and swine to lead as we look towards 2030. One of the markets we target very directly is in toxin control. On the left side of this chart, you see that the micro toxin market that we're targeting or the control market is about $1 billion in 2022. It's growing at about a 5% CAGR.

And mycotoxins really touch all species from poultry all the way to companion animals, crustaceans to dairy cattle and the quality of milk. So the need to control mycotoxins is urgent for our customers and it ensures that we have the highest quality milk, meat and eggs for producers.

As you look at the right side of this chart, you can see how the toxin control market is kind of laid out. Broilers and layers of the poultry side is the largest segment followed by swine, ruminants, aqua, and then companion animals. We expect companion animals to grow significantly in the future and it will be a growth opportunity for Amlan.

How do we work? Our technology is really based on absorption science or the absorption -- adsorption of toxins to our clay mineral substrate. You can see on the left side of this chart that only 1 kilogram of our Amlan mineral, once processed has 60 soccer fields of surface area for binding in the intestines of the animal.

So it's a tremendously porous material that allows toxins to bind to the surface in absorption or be absorbed into the inside of the matrix and being trained and removed. So it's a highly effective natural protectant for the animal that allows them to reach their potential. Here's a product spotlight of a new product we just launched this last year.

It's a product called [Neutropet] (ph).

We also have a similar product we're promoting in the United States, but our international product, Neutropet, it's based on our clay mineral, but it also includes additional compounds and formulation, or adjuvants if I could say, that help directly neutralize pathogenic organisms like salmonella, like campylobacter, like clostridium.

It's a product that producers can use when they don't want to use antibiotics or when resistance has grown and they can substitute a natural product in their portfolio to address pathogens in the field. So we're very excited about Neutropet. We believe it will be a significant product in our portfolio going forward.

So overall, why are we excited about this business? Why do we believe we'll win not only for Oil-Dri, but also for our customers? It's the selectivity. It's the uniqueness of our mineral. We source it and mine it in a proprietary way, process it in a way that really broadens its efficacy or utility in animal rations. We're vertically integrated.

We control the mining to the delivery of the product to our customers and the support of those products in the field with a global technical service team. So we're able to ensure the quality, the consistency, the value, the ROI for our customers. And lastly, our diverse business portfolio. We have 80 years of experience in mineral science.

As Bruce and Chris mentioned earlier, we sell in a variety of industries. So we have a lot of utility from what is a natural product that brings tremendous value to the market. We also have the stability of our company and the leadership we've had over those 80 years, which really allows us to plan, develop, to invest for the long term.

So we're excited about this business and excited about the growth that will come in the animal nutrition and health sector. So with that, thank you for your attention and I'll hand it back to Leslie Garber, our Director of Investor Relations..

Great. Thanks, Wade. Thank you all for listening to our presentation. I will now open up the floor to questions. [Operator Instructions] I will now read the first question. It comes from Ethan Starr, an individual investor.

And he asks, what are the prospects for significant revenue growth for Amlan's products, and when might that happen?.

Thank you, Ethan. I appreciate the question. And I would argue that it's already happening. We're seeing tremendous growth in this business. There are markets like North America that we are really have only been in for about a year and a half now.

So we obviously expect North America to continue to grow very rapidly and at the highest CAGR of any of our business. We also are seeing pretty significant rebound now in Asia as those economies recover and again a continually strong performance in LATAM.

So we expect the next couple of years to be reflective of what we've seen over the last year with strong growth in this business and continued use of our products by all species within these industries..

Thank you.

Our next question comes from John Bear from Ascend Wealth and Advisors, and he asks, do you plan to increase advertising spending at a comparable rate as was seen in fiscal 2023 and in first quarter of 2024? Is your primary focus on retail consumer or B2B, and what product lines are you primarily focusing on? Chris?.

Thanks, Leslie, and thanks, John. The strong majority of the advertising spending that you see goes against the consumer business. That's not to say that the B2B business doesn't really kind of scale their sales platforms through some really good marketing as well. But the majority within consumer and I think we've spoken to this in the past.

We spent pretty heavily in Q4. We hadn't been spending prior to that for a couple of good reasons. Primarily, we were in kind of a bit of a global supply malaise. We came out of that and started spending in Q4 against the new platforms that you just saw. I was a little happy as we were playing some catch-up.

Q1 this year is pretty predictive of what you'll see going forward and at the level as we look at our ROIs we like..

Great, thank you. The next question comes from Robert Smith [indiscernible] Performance Investing.

And he asks, since R&D is the lifeblood of future long-term growth, do you plan a commensurate increase in this area to reflect your new earnings level? Also, in this respect, how do you measure its productivity?.

Thank you, Bob, for your question. And yes, I mean, R&D is the lifeblood of our future and our past and our present growth. So our mission statement, as you long-time investors know, is creating value from sorbent minerals.

And layered on top of that is a real commitment to playing what we call [miny] (ph) ball, which is our version of money ball, which is getting the data and trying to make fact-based decisions on where do we have a competitive advantage and where do our customers value us the most and trying to lean into there and likewise then walking away from things where we just don't provide the value and frankly there could be another supplier somewhere who could better serve that customer.

And the only way to then hang on to those customers is through low margins, which isn't healthy for the long term. So how do we measure it is ultimately through the value that we're deriving from the minerals we're selling. So you've heard me talk about this before, but it's really startling and well worth repeating.

Back in 2001 when the company was not doing very well, we maxed out with over a million tons sold, but our average selling price was just $156 a ton, so we generated $161 million in sales, and our gross profit was only $28 a ton, so we had $29 million of gross profit. This last full fiscal year in 2023 we grew from that $161 million to $413 million.

Our gross profit per ton jumped from $28 to $127 a ton. So almost 6 times -- well, 5 times the growth. And remember, we did a million tons back in 2001. We only did 811,000 tons 20 something years later. And that's this commitment to value based selling.

So a lot of times you guys see less -- I mean our top line is growing anyway, but a lot of times you see it as maybe not as good as it could be, but it's really a conscious decision to walk away from unprofitable business.

And to put this momentum in perspective, so while that was a record for us in F 2023, average selling price of $509 a ton up from $156 20 years ago, it was $562 in the first quarter. And again, that GP per ton from $28 a ton up to $127 was $156 in the first quarter. So that's how we measure it. I mean, we are clearly creating value.

Yes, we believe, and we believe there's many different ways to achieve that value. It is through products, pricing, and performance, but it's also very much with the service that we provide.

So we know that all close to a thousand teammates globally are helping contribute towards delivering value to our customers every day, and we're very appreciative of that, and our customers are too. So thanks for a great question and we take this very, very seriously..

Okay, the next question is from John Bear. He says Amlan International's top line growth was attributed to the sale of existing inventory to the company's master distributor in China.

How does this affect current and projected near-term sales to this master distributor as they sell down the inquired inventory? Wade?.

Yeah, thank you, Leslie, and thank you, John. Yeah, This was an activity that happened specifically in China with the establishment of our master distributor.

Obviously, this was a big part of the restructuring of the business, and important for us to conclude to be able to move that product from Amlan ownership in China to that distributor for sale in the market.

As you might imagine, in those warehouses that we maintained, we had a mix of products, and we also had some products to some of our largest customers that were in fairly low inventory.

So that master distributor, while selling down the products currently, is also already ordering various of the products that are replenishing what they need to service the market. And we're seeing some of our key customers there, especially in the dairy sector, grow so significantly that is exceeding our expectations.

So we expect all that volume to be consumed this year, fairly early in the year, and we're seeing orders already to replace that transfer of inventory..

Thank you. The next question is from Ethan Starr. Last quarter there was mention of two new Amlan products.

Are you able to tell us more about those at present?.

Yes, Ethan, thank you. And as we've talked about in other sessions, the sale cycle can be fairly long in this industry. Those two products were launched this past year. They are both in trials currently. The first one I'll mention is the [indiscernible] product, which we sell internationally as a natural anti-coxidial.

It's actually been in direct field trials now for about seven months with one of the largest integrators in the world. That trial is performing well. We hope for it to conclude sometime in the spring. They're going to basically run a full year trial utilizing the product.

So while that's a little bit lengthier than sometimes happened, it is indicative of a long sale cycle. The second product in Neutropet, we sell a similar product in the United States called [Amsher] (ph). That product is entering trials right now.

We expect a little bit shorter cycle with that, and we hope to have sales sometime in the springtime of that product to some of the largest U.S. Integrators. So excited about those products, but we are still working through field trials on both of them. That will conclude shortly..

Okay. Thank you. We have another question from John Baer.

Any comments on the company's pursuit of an outlook on the M&A landscape?.

Thanks, John, for your question. And look, capital allocation is a major focus for the management team and the board of directors. And as we continue to repair our margins, we are generating cash, which is great. And then how are we going to use that cash? First and foremost, it's investing in our people, in our plants, in our processes.

As we're delivering more value and as our customers are demanding more value, it puts more pressure on our processes. So what was acceptable five years ago from a quality standpoint will not be acceptable in five years, and we have to stay ahead of that curve. So clearly reinvesting in our plants and our people is number one.

Obviously maintaining and growing the dividend is a major use of our capital. We've raised the dividend 20 years in a row.

And as I somewhat facetiously, but not totally always joke, my sisters, I like to be invited to family picnics and so forth, so keeping that dividend healthy and growing is important to me and my sisters and all shareholders, seriously. And so, very proud of our record there and want to keep that up.

Stock buybacks could be a piece of the equation, and certainly we have an authorization to do that if and when we feel it's opportunistic and the use of cash is right for that. And then finally is our M&A activity, and that one will be very narrowly focused on our mission, creating value from sorbent minerals.

So you will not be seeing us get into semiconductors or anything like that any time soon. So when opportunities come up within that mission, we will be very aggressive, and we have been.

We have made numerous acquisitions over the years, and we will continue to vet them as they come forward and fortunately have a lot of debt capacity if we needed it and are generating cash. So yes, M&A will definitely be a part of our growth strategy, but it's not like we're going to make deals just to make deals.

So we will be very opportunistic and they will be bolt-ons. They will not be tangential jumps into different areas that we're not familiar with..

Okay. One more from John Baer.

He asks, what gives you confidence that the B2B sales trend seen in quarter one of fiscal 2024 can or will continue throughout fiscal 2024? Bruce, do you want to take that?.

Sure. And very good question. Thank you for the question. As I talked about the renewable diesel business, these plants are very large. And they're pulling in a lot of different type of oils and different feedstock oils.

Vegetable oil being one of them and soybeans is a big crop that is going to continue to grow to feed this industry and just to feed the general growth of the vegetable oil industry. As they produce oil from soybeans they produce a lot of protein that gets sold into the different applications for feeding animals.

So all of our B2B businesses relate to the ag industry. And with all this growth that's going on in the marketplace, it's clear that there's going to be continued growth in our businesses through this fiscal year and beyond based on what's happening right now and the growth of this business..

Great. Thank you, Bruce. And before we conclude, just general comments on the economy and how it relates to our ability to compete. I'm reading the articles, and inflation, while it is toning down, is still well north of where the Fed wants it to be. Most recent CPI was up for a little over 4%. They're always targeting for 2%.

And so while it's slowing down and the slope is getting less, it still is here. And so we will have to continue to be focused and diligent on making sure that we pass along the cost increases as we incur them that are outside of our control. We are doing very well with our own efficiency.

But there are plenty of things that are outside of our control that would impair our ability to give our customers the value and the quality and the service that they demand and that they deserve. So just mindful of that. And we'll see how it goes going forward. I am very happy that I don't see a recession.

I would have predicted one and I would have been wrong, but I'm glad to be wrong on that front. So thank you very much.

As you can see, the fiscal 2023 was literally our best fiscal year ever, and we're off to a great start in fiscal 2024 and while this is a forward-looking statement I will just say I hope fiscal 2024 turns out to be even better than fiscal 2023.

Let's keep our fingers crossed, but hope isn't a strategy and what is a strategy is everyone pulling together all thousand of us to make it happen and I'm very supportive and confident of the team. So thank you for your support as a loyal shareholder. And we'll look forward to talking to you again after the second quarter..

The meeting has now concluded. The meeting has now concluded. Thank you for joining and have a pleasant day..