☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



o☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to ______________



~~Delaware~~ ~~(State or other jurisdiction of incorporation or~~ ~~organization)~~		~~36-2048898~~ ~~(I.R.S. Employer~~ (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

~~410 North Michigan Avenue, Suite 400~~ ~~Chicago, Illinois~~ ~~(Address of principal executive offices)~~		~~60611-4213~~ ~~(Zip Code)~~

410 North Michigan Avenue, Suite 400 60611-4213

Chicago, Illinois (Zip Code)

(Address of principal executive offices)

The registrant's telephone number, including area code: (312) 321-1515

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for at least the past 90 days. Yes x☒ No o☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x☒ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large ~~accelerated filer~~ Accelerated Filer o

Accelerated ~~filer~~ Filer x

Non-accelerated ~~filer~~ Filer o

Smaller ~~reporting company~~ oReporting Company x

Emerging ~~growth company~~ Growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No x☒

Securities registered pursuant to Section 12(b) of the Act:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of ~~January~~October 31, ~~2018~~.2023.

Common Stock – ~~5,138,458~~5,132,405 Shares and Class B Stock – ~~2,178,937~~2,170,415 Shares

CONTENTS




	PART I – FINANCIAL INFORMATION
		Page
Item 1:	Financial Statements	3

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results Of Operations	2021

~~Item 3:~~	~~Quantitative and Qualitative Disclosures About Market Risk~~	27

Item 4:	Controls and Procedures	2825

	PART II – OTHER INFORMATION

Item 1:1A:	Risk Factors	~~Legal Proceedings~~26	29

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 4:	Mine Safety Disclosures	2927



Item 6:	Exhibits	3028

	Signatures	3129

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including, but not limited to, those under the heading ~~“Management’s~~"Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations," and those statements elsewhere in this report and other documents that we file with the Securities and Exchange Commission ~~(“SEC”~~("SEC"), contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about our future performance, our business, our beliefs and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Words such as “expect,” “outlook,” “forecast,” “would,” “could,” “should,” “project,” “intend,” “plan,” “continue,” “believe,” “seek,” “estimate,” “anticipate,” “may,” “assume,”"expect," "outlook," "forecast," "would," "could," "should," "project," "intend," "plan," "continue," "believe," "seek," "estimate," "anticipate," "may," "assume," "potential," "strive," and variations of such words and similar expressions are intended to identify such forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Such statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially, including, but not limited to, those described herein and in Item 1A, ~~Risk Factors, of~~"Risk Factors", in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2017~~.2023, and from time to time in our filings with the SEC. Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, intended, expected, believed, estimated, projected or planned. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except to the extent required by law, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

TRADEMARK NOTICE

~~Cat’s Pride, Fresh & Light and Oil-Dri are~~"Oil-Dri" is a registered ~~trademarks~~trademark of Oil-Dri Corporation of America.

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Balance Sheet

~~(in thousands, except share and per share amounts)~~(Unaudited)


(in thousands, except for share and per share amounts)
ASSETS	October 31, 2023		July 31, 2023
Current Assets
Cash and cash equivalents	$	29,579	$	31,754
Accounts receivable, net allowances of $1,115 and $1,087 at October 31, 2023 and July 31, 2023, respectively	60,663		59,287
Inventories, net	43,832		42,612
Prepaid expenses	2,692		2,854
Total Current Assets	136,766		136,507

Property, Plant and Equipment
Cost	308,564		303,871
Less accumulated depreciation and amortization	(185,348)		(182,999)
Total Property, Plant and Equipment, Net	123,216		120,872

Other Assets
Goodwill	3,618		3,618
Trademarks and patents, net of accumulated amortization of $581 and $578 at October 31, 2023 and July 31, 2023, respectively	1,427		1,399
Customer list, net of accumulated amortization of $7,785 and $7,763 at October 31, 2023 and July 31, 2023, respectively	—		22
Deferred income taxes	7,028		7,201
Operating lease right-of-use assets	8,944		9,386
Other	7,769		7,230
Total Other Assets	28,786		28,856

Total Assets	$	288,768	$	286,235

(unaudited)
ASSETS January 31,
2018 July 31,
2017
Current Assets
Cash and cash equivalents $ 9,381
$ 9,095
Short-term investments 21,894
23,576
Accounts receivable, less allowance of
$901 and $748 at January 31, 2018 and July 31, 2017, respectively 32,309
32,750
Inventories 22,603
22,615
Prepaid repairs expense 3,827
3,890
Prepaid expenses and other assets 4,140
2,304
Total Current Assets 94,154
94,230

Property, Plant and Equipment

Cost 229,957
224,444
Less accumulated depreciation and amortization (145,668 ) (140,411 )
Total Property, Plant and Equipment, Net 84,289
84,033

Other Assets

Goodwill 9,034
9,034
Trademarks and patents, net of accumulated amortization
of $251 and $238 at January 31, 2018 and July 31, 2017, respectively 1,300
1,223
Customer list, net of accumulated amortization
of $5,070 and $4,601 at January 31, 2018 and July 31, 2017, respectively 2,715
3,184
Deferred income taxes 9,106
14,396
Other 4,937
6,475
Total Other Assets 27,092
34,312

Total Assets $ 205,535
$ 212,575

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Balance Sheet (continued)

~~(in thousands, except share and per share amounts)~~(Unaudited)


(in thousands, except for share and per share amounts)
LIABILITIES & STOCKHOLDERS’ EQUITY	October 31, 2023		July 31, 2023
Current Liabilities
Current maturities of notes payable	$	1,000	$	1,000
Accounts payable	14,867		17,101
Dividends payable	1,953		1,927
Operating lease liabilities	1,872		1,872
Accrued expenses	32,613		36,868
Total Current Liabilities	52,305		58,768

Noncurrent Liabilities
Notes payable, net of unamortized debt issuance costs of $158 and $173 at October 31, 2023 and July 31, 2023, respectively	30,842		30,827
Deferred compensation	5,024		4,512
Long-term operating lease liabilities	8,345		8,810
Other	6,336		6,242
Total Noncurrent Liabilities	50,547		50,391

Total Liabilities	102,852		109,159

Stockholders’ Equity
Common Stock, par value $.10 per share, issued 8,807,223 shares at October 31, 2023 and 8,750,223 shares at July 31, 2023	881		875
Class B Stock, par value $.10 per share, issued 2,522,056 shares at October 31, 2023 and 2,397,056 shares at July 31, 2023	252		240
Additional paid-in capital	56,746		55,624
Retained earnings	209,585		200,796





Accumulated other comprehensive income	563		748
Less Treasury Stock, at cost (3,674,818 Common and 351,641 Class B shares at October 31, 2023 and 3,658,989 Common and 351,641 Class B shares at July 31, 2023)	(82,111)		(81,207)
Total Stockholders’ Equity	185,916		177,076

Total Liabilities & Stockholders’ Equity	$	288,768	$	286,235

(unaudited)
LIABILITIES & STOCKHOLDERS’ EQUITY January 31,
2018 July 31,
2017
Current Liabilities
Current maturities of notes payable $ 3,083
$ 3,083
Accounts payable 8,089
9,594
Dividends payable 1,559
1,553
Accrued expenses:
Salaries, wages and commissions 5,724
7,459
Deferred compensation 5,996
458
Trade promotions and advertising 1,074
2,253
Freight 950
1,606
Other 6,859
6,948
Total Current Liabilities 33,334
32,954

Noncurrent Liabilities

Notes payable, net of unamortized debt issuance costs
of $75 and $89 at January 31, 2018 and July 31, 2017, respectively
6,092
9,161
Deferred compensation 6,281
11,537
Pension and postretirement benefits 29,392
29,161
Other 4,174
3,725
Total Noncurrent Liabilities 45,939
53,584

Total Liabilities 79,273
86,538

Stockholders’ Equity

Common Stock, par value $.10 per share, issued 8,049,050 shares at January 31, 2018
and 8,015,166 shares at July 31, 2017 805
802
Class B Stock, par value $.10 per share, issued 2,503,678 shares at January 31, 2018
and 2,513,512 shares at July 31, 2017 250
251
Additional paid-in capital 37,253
36,242
Retained earnings 153,571
154,735
Accumulated other comprehensive loss:

Pension and postretirement benefits (9,909 ) (10,327 )
Cumulative translation adjustment 105
35
Total accumulated other comprehensive loss (9,804 ) (10,292 )
Less Treasury Stock, at cost (2,910,592 Common and 324,741 Class B shares at
January 31, 2018 and 2,907,370 Common and 324,741 Class B shares at July 31, 2017) (55,813 ) (55,701 )
Total Stockholders’ Equity 126,262
126,037

Total Liabilities & Stockholders’ Equity $ 205,535
$ 212,575

~~The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.~~

~~OIL-DRI CORPORATION OF AMERICA~~

~~Condensed Consolidated Statements of Income and Retained Earnings~~

~~(in thousands, except for per share amounts)~~

(unaudited)
For the Six Months Ended January 31,
2018 2017

Net Sales $ 135,540
$ 131,786
Cost of Sales (96,931 ) (91,936 )
Gross Profit 38,609
39,850
Selling, General and Administrative Expenses (29,936 ) (31,217 )
Income from Operations 8,673
8,633

Other Income (Expense)

Interest expense (400 ) (489 )
Interest income 119
16
Other, net 518
(237 )
Total Other Income (Expense), Net 237
(710 )

Income Before Income Taxes 8,910
7,923
Income Tax Expense (6,956 ) (1,664 )
Net Income 1,954
6,259

Retained Earnings:
Balance at beginning of period 154,735
149,945
Cash dividends declared and treasury stock issuances (3,118 ) (2,964 )
Balance at End of Period $ 153,571
$ 153,240

Net Income Per Share
Basic Common $ 0.29
$ 0.93
Basic Class B Common $ 0.22
$ 0.70
Diluted Common $ 0.26
$ 0.86
Average Shares Outstanding
Basic Common 5,030
5,011
Basic Class B Common 2,097
2,077
Diluted Common 7,215
7,145
Dividends Declared Per Share
Basic Common $ 0.4600
$ 0.4400
Basic Class B Common $ 0.3460
$ 0.3300

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Statements of ~~Comprehensive Income~~Operations

~~(in thousands of dollars)~~(Unaudited)



(in thousands, except for per share amounts)	For the Three Months Ended October 31,
	2023		2022

Net Sales	$	111,438	$	98,539
Cost of Goods Sold	(80,447)		(76,229)
Gross Profit	30,991		22,310
Selling, General and Administrative Expenses	(17,835)		(15,741)

Income from Operations	13,156		6,569

Other (Expense) Income
Interest expense	(361)		(364)
Interest income	175		56

Other, net	(140)		176
Total Other Expense, Net	(326)		(132)

Income Before Income Taxes	12,830		6,437
Income Tax Expense	(2,088)		(1,207)
Net Income	10,742		5,230
Net Loss Attributable to Noncontrolling Interest	—		(11)
Net Income Attributable to Oil-Dri	$	10,742	$	5,241

Net Income Per Share
Basic Common	$	1.61	$	0.80
Basic Class B Common	$	1.21	$	0.60
Diluted Common	$	1.50	$	0.78
Diluted Class B Common	$	1.21	$	0.59
Average Shares Outstanding
Basic Common	4,827		4,804
Basic Class B Common	1,967		1,942
Diluted Common	6,794		4,913
Diluted Class B Common	1,967		1,963
Dividends Declared Per Share
Basic Common	$	0.290	$	0.280
Basic Class B Common	$	0.218	$	0.210

(unaudited)
For the Six Months Ended January 31,
2018 2017

Net Income $ 1,954
$ 6,259

Other Comprehensive Income:
Pension and postretirement benefits (net of tax) 418
578
Cumulative translation adjustment 70
49
Other Comprehensive Income 488
627
Total Comprehensive Income $ 2,442
$ 6,886

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Statements of Comprehensive Income ~~and Retained Earnings~~

~~(in thousands, except for per share amounts)~~(Unaudited)


(in thousands)	For the Three Months Ended October 31,
	2023		2022

Net Income Attributable to Oil-Dri	$	10,742	$	5,241

Other Comprehensive Loss:

Pension and postretirement benefits (net of tax)	(19)		(8)
Cumulative translation adjustment	(166)		(385)
Other Comprehensive Loss	(185)		(393)
Total Comprehensive Income	$	10,557	$	4,848

(unaudited)
For the Three Months Ended January 31,
2018 2017

Net Sales $ 68,894
$ 65,174
Cost of Sales (49,254 ) (46,049 )
Gross Profit 19,640
19,125
Selling, General and Administrative Expenses (14,883 ) (13,538 )
Income from Operations 4,757
5,587

Other Income (Expense)

Interest expense (199 ) (238 )
Interest income 65
8
Other, net 448
(113 )
Total Other Income (Expense), Net 314
(343 )

Income Before Income Taxes 5,071
5,244
Income Tax Expense (6,167 ) (994 )
Net (Loss) Income (1,096 ) 4,250

Net (Loss) Income Per Share
Basic Common $ (0.17 ) $ 0.63
Basic Class B $ (0.12 ) $ 0.47
Diluted Common $ (0.15 ) $ 0.58
Average Shares Outstanding
Basic Common 5,035
5,019
Basic Class B 2,104
2,088
Diluted Common 7,139
7,155
Dividends Declared Per Share
Basic Common $ 0.2300
$ 0.2200
Basic Class B $ 0.1730
$ 0.1650

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

OIL-DRI CORPORATION OF AMERICA

~~Condensed~~ Consolidated Statements of ~~Comprehensive Income~~Stockholders' Equity

~~(in thousands of dollars)~~(Unaudited)


	For the Three Months Ended October 31
	(in thousands, except share amounts)
	Number of Shares
	Common & Class B Stock	Treasury Stock	Common & Class B Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Non-controlling Interest		Total Stockholders' Equity
Balance, July 31, 2022	11,083,824	(3,961,579)	$	1,108	$	52,467	$	178,754	$	(79,428)	$	(2,183)	$	(369)	$	150,349
Net Income (Loss)	—	—	—		—		5,241		—		—		(11)		5,230
Other Comprehensive Loss	—	—	—		—		—		—		(393)		—		(393)
Dividends Declared	—	—	—		—		(1,860)		—		—		—		(1,860)
Purchases of Treasury Stock	—	(3,360)	—		—		—		(92)		—		—		(92)
Net issuance of stock under long-term incentive plans	38,850	(4,000)	4		124		—		(128)		—		—		—
Amortization of Restricted Stock	—	—	—		794		—		—		—		—		794
Balance, October 31, 2022	11,122,674	(3,968,939)	$	1,112	$	53,385	$	182,135	$	(79,648)	$	(2,576)	$	(380)	$	154,028

Balance, July 31, 2023	11,147,279	(4,010,630)	$	1,115	$	55,624	$	200,796	$	(81,207)	$	748	$	—	$	177,076
Net Income (Loss)	—	—	—		—		10,742		—		—		—		10,742
Other Comprehensive Loss	—	—	—		—		—		—		(185)		—		(185)
Dividends Declared	—	—	—		—		(1,953)		—		—		—		(1,953)
Purchases of Treasury Stock	—	(15,329)	—		—		—		(872)		—		—		(872)
Net issuance of stock under long-term incentive plans	182,000	(500)	18		14		—		(32)		—		—		—
Amortization of Restricted Stock	—	—	—		1,108		—		—		—		—		1,108
Balance, October 31, 2023	11,329,279	(4,026,459)	$	1,133	$	56,746	$	209,585	$	(82,111)	$	563	$	—	$	185,916

(unaudited)
For the Three Months Ended January 31,
2018 2017

Net (Loss) Income $ (1,096 ) $ 4,250

Other Comprehensive Income:
Pension and postretirement benefits (net of tax) 237
309
Cumulative translation adjustment 144
63
Other Comprehensive Income 381
372
Total Comprehensive (Loss) Income $ (715 ) $ 4,622

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Statements of Cash Flows

~~(in thousands)~~

(Unaudited)

(unaudited)
For the Six Months Ended January 31,
CASH FLOWS FROM OPERATING ACTIVITIES 2018 2017
Net Income $ 1,954
$ 6,259
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 6,413
6,389
Amortization of investment net discount (57 ) (5 )
Stock-based compensation 770
777
Excess tax benefits for share-based payments —
(207 )
Deferred income taxes 5,312
354
Provision for bad debts and cash discounts 155
131
Loss on the sale of fixed assets 31
276
Life insurance benefits (334 ) —
(Increase) Decrease in assets:

Accounts receivable 362
(1,829 )
Inventories 75
11
Prepaid expenses (51 ) (3,784 )
Other assets 55
(156 )
Increase (Decrease) in liabilities:

Accounts payable (743 ) 852
Accrued expenses (3,637 ) (1,698 )
Deferred compensation 268
487
Pension and postretirement benefits 649
1,001
Other liabilities 407
235
Total Adjustments 9,675
2,834
Net Cash Provided by Operating Activities 11,629
9,093

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures (6,850 ) (7,279 )
Proceeds from sale of property, plant and equipment 11
2
Purchases of short-term investments (24,101 ) (11,555 )
Dispositions of short-term investments 25,840
14,386
Net Cash Used in Investing Activities (5,100 ) (4,446 )

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments on notes payable (3,083 ) (3,083 )
Dividends paid (3,112 ) (2,956 )
Purchase of treasury stock (27 ) (122 )
Proceeds from issuance of common stock —
170
Excess tax benefits for share-based payments —
207
Net Cash Used in Financing Activities (6,222 ) (5,784 )
Effect of exchange rate changes on cash and cash equivalents (21 ) 68
Net Increase (Decrease) in Cash and Cash Equivalents 286
(1,069 )
Cash and Cash Equivalents, Beginning of Period 9,095
18,629
Cash and Cash Equivalents, End of Period $ 9,381
$ 17,560


(in thousands)	For the Three Months Ended October 31,
CASH FLOWS FROM OPERATING ACTIVITIES	2023		2022
Net Income	$	10,742	$	5,230
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,368		3,523

Non-cash stock-based compensation	1,108		794

Deferred income taxes	174		168
Provision for bad debts and cash discounts	28		55



Accretion of Asset Retirement Obligation	53		40
Loss on the disposals of property, plant and equipment	26		54

(Increase) Decrease in assets:
Accounts receivable	(1,487)		(1,622)
Inventories	(1,374)		(5,202)
Prepaid expenses	154		59
Other assets	341		443
Increase (Decrease) in liabilities:
Accounts payable	(1,289)		1,854
Accrued expenses	(4,365)		(1,601)
Deferred compensation	512		(400)

Other liabilities	(427)		(581)
Total Adjustments	(2,178)		(2,416)
Net Cash Provided by Operating Activities	8,564		2,814

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(8,064)		(6,737)



Net Cash Used in Investing Activities	(8,064)		(6,737)

CASH FLOWS FROM FINANCING ACTIVITIES



Dividends paid	(1,927)		(1,851)
Purchases of treasury stock	(872)		(92)

Net Cash Used in Financing Activities	(2,799)		(1,943)
Effect of exchange rate changes on Cash and Cash Equivalents	124		38
Net Decrease in Cash and Cash Equivalents	(2,175)		(5,828)
Cash and Cash Equivalents, Beginning of Period	31,754		16,298
Cash and Cash Equivalents, End of Period	$	29,579	$	10,470

~~OIL-DRI CORPORATION OF AMERICA~~

~~Condensed Consolidated Statements of Cash Flows - Continued~~

~~(in thousands)~~

(unaudited)
For the Six Months Ended January 31,
2018 2017
Supplemental disclosure of non-cash investing and financing activities:
Capital expenditures accrued, but not paid $ 890
$ 657
Cash dividends declared and accrued, but not paid $ 1,559
$ 1,485

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

OIL-DRI CORPORATION OF AMERICA

Condensed Consolidated Statements of Cash Flows - Continued

(Unaudited)


(in thousands)	For the Three Months Ended October 31,
	2023		2022
Supplemental disclosures:
Other cash flows:

Income tax payments (refunds)	12		(87)
Non-cash investing and financing activities:
Capital expenditures accrued, but not paid	$	3,532	$	1,381
Cash dividends declared and accrued, but not paid	$	1,953	$	1,860

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

/OIL-DRI CORPORATION OF AMERICA

Notes To Condensed Consolidated Financial Statements

(Unaudited)

1.BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“("U.S. ~~GAAP”~~GAAP") for interim financial information and in compliance with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The financial statements and the related notes are condensed and should be read in conjunction with the Consolidated Financial Statements and related notes for the fiscal year ended July 31, ~~2017~~2023 included in our Annual Report on Form 10-K filed with the SEC.

The unaudited Condensed Consolidated Financial Statements include the accounts of Oil-Dri Corporation of America and its subsidiaries. All significant intercompany transactions are eliminated. Except as otherwise indicated herein or as the context otherwise requires, references to ~~“Oil-Dri,”~~"Oil-Dri," the ~~“Company,” “we,” “us”~~"Company," "we," "us" or ~~“our”~~"our" refer to Oil-Dri Corporation of America and its subsidiaries.

The unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals and reclassifications which are, in the opinion of management, necessary for a fair presentation of the statements contained herein. ~~In addition, certain prior year reclassifications were made to conform to the current year presentation.~~ Operating results for the three ~~and six~~ months ended ~~January~~October 31, ~~2018~~2023 are not necessarily an indication of the results that may be expected for the fiscal year ending July 31, ~~2018~~.2024.

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These immaterial reclassifications had no effect on the previously reported net income.

Management Use of Estimates

The preparation of the unaudited Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires ~~the use of~~management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period, as well as the related disclosures. ~~See Note 10 for additional discussion regarding tax legislation enacted by the U.S. government in December 2017, the impact of which may affect the estimates~~Estimates and assumptions ~~used to determine the expected~~about future ~~tax consequences of~~ events ~~recognized in our consolidated financial statements.~~cannot be made with certainty. All of our estimates and assumptions are revised periodically. Actual results could differ from these estimates.

Summary of Significant Accounting Policies

~~Except as described herein, our~~Our significant accounting policies, which are ~~detailed~~summarized in detail in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2017,~~2023, have not materially changed. However, the unaudited Condensed Consolidated Financial Statements reflect changes required upon adoption of new accounting guidance, as described in Note 2, and the effects of changes from recent U.S. tax legislation, as described in Note 10. The following is a description of certain of our significant accounting ~~policies.~~policies:

~~Revenue Recognition.~~Trade Receivables. We recognize ~~revenue~~trade receivables when ~~risk~~control of ~~loss and title~~finished products are transferred ~~under the terms of~~to our sales agreements with customers at a fixed and determinable price and collection of payment is probable. Trade promotion reserves are provided for sales incentives made directly to consumers, such as coupons, and sales incentives made to customers, such as slotting, discounts based on sales volume, cooperative marketing programs and other arrangements. Such trade promotion costs are netted against sales. Sales returns and allowances are not material.

~~Selling, General and Administrative Expenses.~~ Selling, general and administrative expenses include salaries, wages and benefits associated with staff outside the manufacturing and distribution functions, all marketing related costs, any miscellaneous trade spending expenses not required to be included in net sales, research and development costs, depreciation and amortization related to assets outside the manufacturing and distribution process and all other non-manufacturing and non-distribution expenses.

~~Trade Receivables.~~customers. We record an allowance for ~~doubtful accounts~~credit losses based on our ~~historical experience~~expectations and a periodic review of our accounts receivable, including a review of the overall aging of accounts, consideration of customer credit risk and analysis of facts and circumstances about specific ~~customer~~ accounts. A customer account is determined to be uncollectible when it is probable that a loss will be incurred after we have completed our internal collection procedures, including termination of shipments, direct customer contact and formal demand of payment. We retain outside collection agencies to facilitate our collection efforts. Past due status is determined based on contractual terms and customer payment history.

Property, Plant and Equipment. Property, plant and equipment includes depreciable assets such as building, machinery, equipment, furniture, and vehicles. These assets are depreciated using the straight-line method over their estimated useful lives. Major improvements are capitalized, while maintenance and repairs that do not extend the useful life of the applicable assets are expensed as incurred. Interest expense may also be capitalized for assets that require a period of time to get them ready for their intended use.

~~Overburden Removal~~These assets are carried at cost on the Consolidated Balance Sheets and are reviewed for possible impairment on an annual basis or when circumstances indicate impairment that an asset may become impaired. We take into consideration idle and underutilized equipment and review business plans for possible impairment. When impairment is indicated, an impairment charge is recorded for the difference between the carrying value of the asset and its fair market value.

Capital parts are long-lived spare parts that are recorded net of a valuation reserve based on aging. The capital parts reserve was $1.7 million as of October 31, 2023 and $2.0 million as of July 31, 2023.

Land, Mining ~~Costs.~~Property and Mineral Rights. We surface mine sorbent materials on property that we either own or lease as part of our overall operations. A significant part of our overall mining cost is incurred during the process of removing the overburden (non-usable material) from the mine site, thus exposing the sorbent material used in a majority of our production processes. These stripping costs are treated as a variable inventory production cost and are included in cost of ~~sales~~goods sold in the period they are incurred. We defer and amortize the pre-production overburden removal costs during the development phase associated with opening a new mine.

Additionally, it is our policy to capitalize the purchase cost of land and mineral rights, including associated legal fees, survey fees and real estate fees. The costs of obtaining mineral patents, including legal fees and drilling expenses, are also capitalized. Pre-production development costs on new mines and any prepaid royalties that may be offset against future royalties due upon extraction of the minerals are also capitalized. All exploration related costs are expensed as incurred.

Reclamation. We perform ongoing reclamation activities during the normal course of our overburden removal. As overburden is removed from a mine site, it is hauled to previously mined sites and is used to refill older sites. This process allows us to continuously reclaim older mine sites and dispose of overburden simultaneously, therefore minimizing the costs associated with the reclamation process.

On an annual basis we evaluate our potential reclamation liability in accordance with ASC 410, Asset Retirement and Environmental Obligations. The reclamation assets are depreciated over the estimated useful lives of the various mines. The reclamation liabilities are increased based on a yearly accretion charge over the estimated useful lives of the mines.

Leases. ASC 842, Leases, provides that a contract is, or contains, a lease if it conveys the right to control the use of an identified asset and, accordingly, a lease liability and a related right-of-use ("ROU") asset is recognized at the commencement date on our consolidated balance sheet. As provided in ASC 842, we have elected not to apply these measurement and recognition requirements to short-term leases (i.e., leases with a term of 12 months or less). Short-term leases will not be recorded as ROU assets or lease liabilities on our consolidated balance sheet, and the related lease payments will be recognized in net earnings on a straight-line basis over the lease term. For leases other than short-term leases, the lease liability is equal to the present value of unpaid lease payments over the remaining lease term. The lease term may reflect options to extend or terminate the lease when it is reasonably certain that such options will be exercised. To determine the present value of the lease liability, we used an incremental borrowing rate, which is defined as the rate of interest we would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments. The ROU asset is based on the corresponding lease liability adjusted for certain costs such as initial direct costs, prepaid lease payments and lease incentives received. Both operating and finance lease ROU assets are reviewed for impairment, consistent with other long-lived assets, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. After a ROU asset is impaired, any remaining balance of the ROU asset is amortized on a straight-line basis over the shorter of the remaining lease term or the estimated useful life. After the lease commencement date, we evaluate lease modifications, if any, that could result in a change in the accounting for leases.

Certain of our leases provide for variable lease payments that vary due to changes in facts and circumstances occurring after the commencement date, other than the passage of time. Variable lease payments that are dependent on an index or rate (e.g., Consumer Price Index) are included in the initial measurement of the lease liability and the ROU asset. Variable lease payments that are not known at the commencement date and are determinable based on the performance or use of the underlying asset, are expensed as incurred. Our variable lease payments primarily include common area maintenance charges based on the percentage of the total square footage leased and the usage of assets, such as photocopiers.

Some of our contracts may contain lease components as well as non-lease components, such as an agreement to purchase services. As allowed under ASC 842, we have elected not to separate the lease components from non-lease components for all asset classes and we will not allocate the contract consideration to these components. This policy was applied to all existing leases upon adoption of ASC 842 and will be applied to new leases on an ongoing basis.

Revenue Recognition. We recognize revenue when performance obligations under the terms of the contracts with customers are satisfied. Our performance obligation generally consists of the promise to sell finished products to wholesalers, distributors and retailers or consumers and our obligations have an original duration of one year or less. Control of the finished products are transferred upon shipment to, or receipt at, customers' locations, as determined by the specific terms of the contract. We have completed our performance obligation when control is transferred and we recognize revenue accordingly. Taxes collected from

customers and remitted to governmental authorities are excluded from net sales. Sales returns are not material nor are warranties and any related obligations.

We have an unconditional right to consideration under the payment terms specified in the contract upon completion of the

performance obligation. We may require certain customers to provide payment in advance of product shipment. We recorded a

liability for these advance payments of $0.1 million as of October 31, 2023, and no liability as of July 31, 2023. This liability is reported in Other within Accrued Expenses on the unaudited Condensed Consolidated Balance Sheet. There was no revenue recognized during the three months ended October 31, 2023, that was included in the liability for advance payments at the beginning of the period.

We routinely commit to one-time or ongoing trade promotion programs directly with consumers, such as coupon programs, and with customers, such as volume discounts, cooperative marketing and other arrangements. We estimate and accrue the expected costs of these programs. These costs are considered variable consideration under ASC 606, Revenue from Contracts with Customers, and are netted against sales when revenue is recorded. The accruals are based on our best estimate of the amounts necessary to settle future and existing obligations on products sold as of the balance sheet date. To estimate these accruals, we rely on our historical experience of trade spending patterns and that of the industry, current trends and forecasted data.

Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") include salaries, wages and benefits associated with staff outside the manufacturing and distribution functions, all marketing related costs, any miscellaneous trade spending expenses not required to be included in net sales, research and development costs, depreciation and amortization related to assets outside the manufacturing and distribution process and all other non-manufacturing and non-distribution expenses.

Other Current and Noncurrent Liabilities. Other liabilities include the accruals for general expenses not yet paid, cash collected not yet vouchered, legal reserves, postretirement health benefit obligations, and reclamation liability accrual. Current liabilities are due to be paid within the next 12 months. Included in Other noncurrent liabilities on the unaudited Condensed Consolidated Balance Sheet is $4.5 million for the reclamation liability and $1.8 million for postretirement health benefits as of October 31, 2023.

Earnings Per Share. We utilize the two-class method to report our earnings per share ("EPS"). The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and participation rights in undistributed earnings. Common Stock is entitled to cash dividends equal to at least 133.33% on a per share basis of the cash dividend paid on Class B Stock. In computing earnings per share, the Company has allocated dividends declared to Common and Class B shares based on amounts actually declared for each class of stock and 33.33% more of the undistributed earnings have been allocated to Common Stock than to the Class B shares on a per share basis. Common Stock is entitled to one vote per share and Class B Stock is entitled to ten votes per share. Common Stock have no conversion rights. Class B Stock is convertible on a share-by-share basis into Common Stock at any time and is subject to mandatory conversion under certain circumstances. Basic EPS is computed by dividing net earnings, reduced for any distributed and undistributed earnings allocated to unvested restricted shares, by the weighted-average number of shares outstanding during the period for each class of share. Diluted EPS, for each class of common stock, is computed by dividing net earnings by the weighted-average number of common shares and potential common shares outstanding during the period. Dilution for common stock takes into consideration the effect of both unvested restricted shares and convertible Class B shares, if the effect is dilutive. Dilution for Class B takes into consideration the effect of unvested restricted shares, if the effect is dilutive. Below is a reconciliation of the calculation of basic and diluted EPS.


	For the Three Months Ended October 31, 2023
	(in thousands, except for per share data)
	Total		Common		Class B
Net income	$	10,742	$	8,236	$	2,506
Distributed and undistributed earnings on restricted shares	(570)		(453)		(117)
Income available to stockholders	$	10,172	$	7,783	$	2,389

Net Income (Numerator)			$	7,783	$	2,389
Weighted Average Shares Outstanding (Denominator)			4,827		1,967
Basic EPS			$	1.61	$	1.21

Effect of dilution - Net Income (1)			$	2,389	$	—
Net income assuming dilution (Numerator)			$	10,172	$	2,389

Effect of dilution - Shares (1)			1,967		$	—
Shares assuming dilution (Denominator)			6,794		$	1,967
Diluted EPS			$	1.50	$	1.21
(1) The impact of unvested restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS

2.NEW ACCOUNTING PRONOUNCEMENTS AND REGULATIONS

~~Recently Issued Pronouncements~~

~~In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance under Accounting Standards Codification (“ASC”) 606,~~ ~~Revenue from Contracts with Customers~~, which establishes a single comprehensive revenue recognition model for all contracts with customers and will supersede most existing revenue guidance. This guidance was subsequently amended several times to further clarify the principles for recognizing revenue. The guidance requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange. Oil-Dri's revenue is generated from the sale of finished goods to customers. Those sales predominantly contain a single delivery obligation. Under Oil-Dri's current accounting policy, revenue is recognized at a single point in time when ownership, risks and rewards transfer. We are currently in the process of performing a comprehensive evaluation of the revenue requirements, including the impact on how we record certain incentives and advertising arrangements, as well as significant new disclosure requirements. We plan to adopt the standard at the beginning of our first quarter of fiscal year 2019. Transition options to implement this guidance include either a full or modified retrospective approach and early adoption is permitted. We expect to use the modified retrospective implementation method.

~~In January 2016, the FASB issued guidance under ASC 825,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities.~~ This guidance addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The provisions relevant to us at this time require the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, as well as eliminates the requirement to disclose the method and significant assumptions used to estimate the fair value in such disclosure. This guidance is effective for our first quarter of fiscal year 2019 and early adoption is generally not permitted. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements.

~~In February 2016, the FASB issued guidance under ASC 842,~~ ~~Leases~~, which provides that, for leases with a term greater than 12 months, a lessee must recognize in the statement of financial position both a liability to make lease payments and an asset representing its right to use the underlying asset. Other requirements describe expense recognition, as well as financial statement presentation and disclosure. This guidance is effective for our first quarter of fiscal year 2020 using a modified retrospective approach, which includes a number of optional practical expedients. Early adoption is permitted. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements.

~~In June 2016, the FASB issued guidance under ASC 326,~~ ~~Financial Instruments-Credit Losses~~, which requires companies to utilize an impairment model for most financial assets measured at amortized cost and certain other financial instruments, which include trade and other receivables, loans and held-to-maturity debt securities, to record an allowance for credit risk based on expected losses rather than incurred losses. In addition, this new guidance changes the recognition method for credit losses on available-for-sale debt securities, which can occur as a result of market and credit risk, as well as additional disclosures. In general, this guidance will require modified retrospective adoption for all outstanding instruments that fall under this guidance. This guidance is effective for our first quarter of fiscal year 2021. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements.

~~In March 2017, the FASB issued guidance under ASC 715,~~ ~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,~~ ~~which requires presenting the service cost component of net periodic benefit cost in the~~

same income statement line item(s) as other employee compensation costs arising from services rendered during the period. This standard also requires that other components of the net periodic benefit cost be presented separately from the line item(s) that includes service costs and outside of any subtotal of operating income, if one is presented, on a retrospective basis. Additionally, the new guidance limits the components that are eligible for capitalization in assets to only the service cost component. The new guidance is effective for our first quarter of fiscal year 2019, with early adoption permitted. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements.

~~In February 2018, the FASB issued guidance under ASC 220,~~ ~~Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.~~ Current U.S. GAAP requires deferred tax liabilities and assets to be adjusted for a change in tax laws or rates with the effect included in income from continuing operations, even when the deferred taxes being remeasured were established through other comprehensive income. As a result, a disproportionate tax effect may remain in accumulation other comprehensive Income. The new guidance under ASC 220 provides an option to reclassify from accumulated other comprehensive income to retained earnings these stranded tax effects resulting from the Tax Cuts and Jobs Act (the “2017 Tax Act”), which was enacted on December 22, 2017. This guidance is effective for our first quarter of fiscal year 2019, with early adoption permitted. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements. See Note 10 for further information about the impact of the 2017 Tax Act.

There have been no ~~other~~new accounting pronouncements adopted in the period or issued but not yet adopted by us which are expected to have a material impact on our Consolidated Financial Statements.

~~Recently Adopted Pronouncements~~

~~In the first quarter of fiscal year 2018, we adopted the FASB guidance under ASC 718,~~ ~~Compensation-Stock Compensation~~ that simplified several aspects of the accounting for share-based payment transactions, including accounting for income taxes and classification of excess tax benefits in the statement of cash flows. As a result of implementing this guidance, we recognized $14,000 and $157,000 of excess tax benefits as a reduction of income tax expense for the second quarter and first six months of fiscal year 2018, respectively, rather than in Stockholders' Equity on the unaudited Condensed Consolidated Balance Sheet, and classified in operating activities on the unaudited Condensed Consolidated Statements of Cash Flows. These changes have been applied prospectively in accordance with the guidance and prior period presentations have not been adjusted. The adoption resulted in approximately a 0% and 2% benefit to our effective tax rate for the second quarter and first six months of fiscal year 2018, respectively. In addition, we excluded the excess tax benefits from the assumed proceeds available to repurchase shares under the treasury stock method for the computation of diluted earnings per share. This change did not have a material impact on our diluted earnings per share for the second quarter or first six months of fiscal year 2018. The guidance allows for a policy election to either use estimated forfeitures or account for them as they occur to determine the amount of compensation cost to be recognized each period. We have elected to continue to account for forfeitures on an estimated basis. No other material changes resulted from the adoption of this standard.

3.INVENTORIES

~~In the first quarter of fiscal year 2018, we adopted the FASB guidance under ASC 740,~~ ~~Balance Sheet Classification of Deferred Taxes,~~ which required deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. Prior periods presented were also restated. We reclassified $2,787,000 from Total Current Assets to Total Other Assets on the unaudited Condensed Consolidated Balance Sheet as of July 31, 2017.

~~In the first quarter of fiscal year 2018, we adopted the FASB guidance under ASC 330,~~ ~~Simplifying the Measurement of Inventory.~~ The new guidance required inventory to be measured at the lower of cost and net realizable value, which is defined as the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. Adoption of this guidance did not have a material impact on our unaudited Condensed Consolidated Financial Statements.

3.~~INVENTORIES~~

The composition of inventories is as follows (in thousands):


	January 31, 2018		July 31, 2017			October 31, 2023		July 31, 2023
Finished goods	$	14,037	$	14,704	Finished goods	$	23,734	$	21,943
Packaging	5,635		4,988		Packaging	7,434		8,007
Spare parts, net					Spare parts, net	6,379		5,981
Other	2,931		2,923		Other	6,285		6,681
Total Inventories	$	22,603	$	22,615	Total Inventories	$	43,832	$	42,612

Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Inventory costs include the cost of raw materials, packaging supplies, labor, and other overhead costs. ~~We perform a detailed review of our inventory items to determine if an obsolescence reserve adjustment~~Included in Other is necessary. The review surveys all of our operating facilities and sales groups to ensure that both historical issues and new market trends are considered. The obsolescence reserve not only considers specific items, but also takes into consideration the ~~overall value of the inventory as of the balance sheet date. The~~ inventory obsolescence reserve ~~values at~~ ~~January~~of $0.7 million as of October 31, ~~2018~~2023, and $0.8 million as of July 31, ~~2017~~ ~~were $1,080,000~~2023. Spare parts in inventory are recorded net of a valuation reserve based on aging. The spare parts reserve was $3.0 million as of October 31, 2023, and ~~$619,000, respectively.~~$2.9 million as of July 31, 2023.

4.FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized into categories based on the lowest level of input that is significant to the fair value measurement. The categories in the fair value hierarchy are as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs for similar assets or liabilities or valuation models whose inputs are observable, directly or indirectly.

Level 3: Unobservable inputs.

Cash equivalents ~~of $3,281,000 and $3,814,000 as of January 31, 2018 and July 31, 2017, respectively, were classified as Level 1. These cash instruments~~ are primarily money market mutual funds ~~and are included in cash and~~classified as Level 1. We had $15.4 million cash equivalents ~~on the unaudited Condensed Consolidated Balance Sheet.~~

Short-term investments included U.S. Treasury securities and certificates of deposit. We intend and have the ability to hold our short-term investments to maturity; therefore, these investments were reported at amortized cost, which approximated fair value as of ~~January~~October 31, ~~2018~~2023 and July 31, ~~2017.~~2023.

~~Accounts~~Balances of accounts receivable and accounts payable ~~balances~~ approximated their fair values at ~~January~~October 31, ~~2018~~2023 and July 31, ~~2017~~2023 due to the short maturity and nature of those balances.

Notes payable are reported at the face amount of future maturities. The estimated fair value of notes payable, including current maturities, was ~~$9,680,000~~$29.0 million and ~~$13,001,000~~$29.7 million as of ~~January~~October 31, ~~2018~~2023 and July 31, 2017, respectively. Our debt does not trade on a daily basis in an active market, therefore the fair value estimate is based on market observable borrowing rates currently available for debt with similar terms2023, respectively, and ~~average maturities and is~~are classified as Level 2. The fair value was estimated using the exit price notion by discounting future cash flows based on an observable market rate.

We apply fair value techniques on at least an annual basis associated with: (1) valuing potential impairment loss related to goodwill, trademarks and other indefinite-lived intangible assets and (2) valuing potential impairment loss related to long-lived assets. See Note 5 of the Notes to the unaudited Condensed Consolidated Financial Statements for further information about goodwill and other intangible assets.

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Intangible ~~amortization expense was $253,000~~assets, other than goodwill, include trademarks, patents, and $307,000 in the second quarter of fiscal years 2018 and 2017, respectively. Intangible amortization expense was $507,000 and $612,000 for the first six months of fiscal years 2018 and 2017, respectively.customer lists. Estimated intangible amortization for ~~the remainder of~~ fiscal year ~~2018~~2024 is ~~$510,000.~~$0.1 million. Estimated intangible amortization for each of the next five fiscal years is ~~as follows (in thousands):~~

2019 $ 835
2020 $ 666
2021 $ 482
2022 $ 332
2023 $ 200

$0.1 million. We have one acquired trademark recorded at a cost of ~~$376,000~~$0.4 million that was determined to have an indefinite life and is not amortized.

~~We performed our annual goodwill impairment analysis in the fourth quarter of fiscal year 2017 and no impairment was identified.~~ There have been no triggering events in fiscal years 2024 or 2023 that would indicate a new impairment analysis is needed.

6. ACCRUED EXPENSES

Accrued expenses is as follows (in thousands):


	October 31, 2023		July 31, 2023
Salaries, Wages, Commissions and Employee Benefits	$	9,556	$	19,054
Freight	3,016		3,078
Georgia Landfill Modification Reserve	2,469		2,469
Income Tax	2,359		521
Trade Promotions and Advertising	2,352		2,292
Real Estate Tax	1,508		1,038
Other	11,353		8,416
	$	32,613	$	36,868

7.OTHER CONTINGENCIES

We are party to various legal actions from time to time that are ordinary in nature and incidental to the operation of our business, including ongoing litigation. While it is not possible at this time to determine with certainty the ultimate outcome of these or other lawsuits, we believe that none of the pending proceedings will have a material adverse effect on our business, financial condition, results of operations or cash flows.

In the second quarter of fiscal year 2023, we recorded a reserve of $2.5 million for anticipated modification costs that we expect to incur to address capacity issues at our sole landfill located in Ochlocknee, Georgia. Reserves are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. The amount of the reserve represents management’s best estimate of the costs for the modification with respect to this matter. There have been no changes to the reserve estimate in the first quarter of fiscal year 2024. Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards, and emerging technologies for handling site modification. Consequently, it is reasonably possible that modification costs in excess of amounts accrued could have a material impact on the Company’s results of operations, financial condition and cash flows.

8. DEBT

We are party to an Amended and Restated Note Purchase and Private Shelf Agreement (as amended, the "Note Agreement") with PGIM, Inc. ("Prudential") and certain existing noteholders and purchasers affiliated with Prudential named therein. Pursuant to the Note Agreement on May 15, 2021 we issued $10 million in aggregate principal amount of our 3.95% Series B Senior Notes due May 15, 2030, of which $7 million aggregate principal amount remained outstanding as of October 31, 2023. On December 16, 2021, under the Note Agreement we issued an additional $25 million in aggregate principal amount of our 3.25% Series C Senior Notes due December 16, 2031, all of which remained outstanding as of October 31, 2023. The Amended Note Agreement also provides us with the ability to request, from time to time, that Prudential affiliate(s) purchase, at Prudential’s discretion and on an uncommitted basis, additional senior unsecured notes of Oil-Dri (the “Shelf Notes,” and collectively with the Series A Notes, Series B Notes, and Series C Notes, the “Notes”) in an aggregate principal amount of up to $75 million minus the aggregate principal amount of Notes then outstanding and Shelf Notes that have been accepted for purchase. Interest payable on any Shelf Note agreed to be purchased under the Note Agreement will be at a rate determined by Prudential and will mature no more than fifteen years after the date of original issue of such Shelf Note.

On August 30, 2022, we entered into Amendment No. 3 (the "Third Amendment") to the Note Agreement. The Third Amendment modified the existing fixed charge coverage financial covenant and replaced the existing consolidated debt financial covenant with a maximum debt to earnings ratio and effected certain changes consistent with the Sixth Amendment to the Credit Agreement (defined below), including modifying the method for calculating consolidated EBITDA and the excess leverage fee.

On September 21, 2023, the Company entered into Amendment No. 4 (the “Fourth Amendment”) to the Note Agreement. The Fourth Amendment extended the time frame for issuing and selling Shelf Notes to September 21, 2026.

We are party to the Credit Agreement, dated as of January 27, 2006 (as previously amended, the "Credit Agreement"), among us, BMO Harris Bank N.A (“BMO”), and certain of our domestic subsidiaries. The agreement provides for a $45 million unsecured revolving credit facility, including a maximum of $10 million for letters of credit.

The Credit Agreement contains restrictive covenants that, among other things and under various conditions, limit our ability to incur additional indebtedness or to dispose of assets. On August 30, 2022, we entered into the Sixth Amendment to the Credit Agreement (the "Sixth Amendment").The Sixth Amendment extended the facility termination date to August 30, 2027; replaced the LIBOR-based reference rate with an adjusted term Secured Overnight Financing Rate ("SOFR"); revised the method for calculating consolidated EBITDA and consolidated debt for purposes of the Credit Agreement; modified certain restrictive covenants, including increasing the unsecured indebtedness basket from $50 million to $75 million; and revised the existing financial covenants by replacing the consolidated debt covenant with a covenant to maintain a maximum debt to earnings ratio, lowering the minimum fixed charge coverage ratio level and revising the method for calculating the fixed charge coverage ratio. As of October 31, 2023, and July 31, 2023, we were in compliance with the covenants. There were no borrowings during the first quarter of fiscal year 2024. However, we had $1.0 million of letters of credit outstanding as of October 31, 2023 and July 31, 2023 under this agreement.

The Credit Agreement states that we may select a variable interest rate based on either the BMO Harris prime rate or an adjusted SOFR-based rate, plus a margin that varies depending on our debt to earnings ratio, or a fixed rate as agreed between us and BMO Harris. As of October 31, 2023, the variable rates would have been 8.50% for the BMO Harris prime-based rate or 5.38% for the adjusted SOFR-based rate.

9. LEASES

We have operating leases primarily for real estate properties, including corporate headquarters, customer service and sales offices, manufacturing and packaging facilities, warehouses, and research and development facilities, as well as for rail tracks, railcars and office equipment. Certain of our leases for a shared warehouse and office facility, rail track and railcars have options to extend which we are reasonably certain we will exercise and, accordingly, have been considered in the lease term used to recognize our ROU assets and lease liabilities. To determine the present value of the lease liability, we use an incremental borrowing rate, which is defined as the rate of interest that the Company would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments. Further information about our accounting policy for leases is included in Note 1 of the Notes to the unaudited Condensed Consolidated Financial Statements.

We have no material finance leases, and variable costs for operating leases are immaterial for the three months ended October 31, 2023. Operating lease costs are included in Cost of Goods Sold or SG&A expenses based on the nature of the lease. The following table summarizes total lease costs for our operating leases (in thousands):


	For the Three Months Ended October 31,

	2023		2022
Operating Lease Cost
Operating lease cost	$	546	$	696
Short-term operating lease cost	2		1

Supplemental cash flow information related to leases was as follows (in thousands):


	For the Three Months Ended October 31,

	2023		2022
Other Information
Cash paid for amounts included in the measurement of operating lease liabilities:	$	461	$	595
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—	$	21

Operating lease ROU assets and operating lease liabilities are separately presented on the unaudited Condensed Consolidated Balance Sheet, excluding leases with an initial term of twelve months or less. Other supplemental balance sheet information related to leases was as follows:


	October 31, 2023	July 31, 2023









Weighted-average remaining lease term - operating leases	7.1 years	7.7 years


Weighted-average discount rate - operating leases	4.19%	4.03%

The following table summarizes scheduled minimum future lease payments due within twelve months for operating leases with terms longer than one year for which cash flows are fixed and determinable as of October 31, 2023, (in thousands):




2024	$	1,686
2025	2,167
2026	1,848
2027	1,432
2028	883
Thereafter	3,825
Total	11,841
Less: imputed interest	(1,624)
Net lease obligation	$	10,217

10.PENSION AND OTHER POSTRETIREMENT BENEFITS

The ~~components~~Oil-Dri Corporation of ~~net periodic~~America Pension Plan ("Pension Plan") was a defined benefit pension plan for eligible salaried and hourly employees. Pension benefits were based on a formula of years of credited service and levels of compensation or stated amounts for each year of credited service. On January 9, 2020, Oil-Dri amended the Pension Plan to freeze participation, all future benefit accruals and accrual of benefit service, including consideration of compensation increases, effective March 1, 2020. Consequently, the Pension Plan was closed to new participants and existing participants no longer earned additional benefits on or after March 1, 2020. On September 20, 2022, the Company's Board of Directors approved a resolution to terminate the Company's defined benefit pension plan. The pension obligations were fully settled in April 2023.

A postretirement health benefits plan is also provided to domestic salaried employees who meet specific age, participation and length of service requirements at the time of retirement. Eligible employees may elect to continue their health care coverage under the Oil-Dri Corporation of America Employee Benefits Plan until the date certain criteria are met, including attaining the age of Medicare eligibility. We have the right to modify or terminate the postretirement health benefit ~~costs were as follows:~~

Pension Benefits
(in thousands)
For the Three Months Ended January 31, For the Six Months Ended January 31,
2018 2017 2018 2017
Service cost $ 438
$ 446
$ 862
$ 913
Interest cost 517
474
1,014
931
Expected return on plan assets (485 ) (411 ) (971 ) (887 )
Amortization of:
  Prior service costs —
—
1
1
  Other actuarial loss 354
485
641
914
Net periodic benefit cost $ 824
$ 994
$ 1,547
$ 1,872

Postretirement Health Benefits
(in thousands)
For the Three Months Ended January 31, For the Six Months Ended January 31,
2018 2017 2018 2017
Service cost $ 25
$ 33
$ 54
$ 63
Interest cost 19
21
43
39
Amortization of:
  Prior service costs (1 ) (1 ) (3 ) (3 )
  Other actuarial (gain) loss (5 ) 14
—
20
Net periodic benefit cost $ 38
$ 67
$ 94
$ 119

plan at any time. The postretirement health plan is an unfunded plan. We pay insurance premiums and claims from our assets.

The components of net periodic pension ~~plan is funded based upon actuarially determined contributions that take into account~~and postretirement health benefit costs were as follows:


		Pension Benefits
		(in thousands)
	For the Three Months Ended October 31,
			2023		2022
Interest cost			$	—	$	335
Expected return on plan assets			—		(558)
Amortization of:
Other actuarial loss			—		9

Net periodic benefit cost			$	—	$	(214)

		Postretirement Health Benefits
		(in thousands)
	For the Three Months Ended October 31,
			2023		2022
Service cost			$	19	$	22
Interest cost			22		20
Amortization of:
Other actuarial loss			(24)		(18)
Prior service costs			(2)		(2)
Net periodic benefit cost			$	15	$	22

The non-service cost components of net periodic benefit cost are included in Other Income (Expense) in the ~~amount deductible for income tax purposes,~~line item Other, net on the ~~normal cost and the minimum contribution required and the maximum contribution allowed under applicable regulations.We contributed $435,000 and $770,000 to our pension plan during the second quarter and first six months~~unaudited Condensed Consolidated Statements of ~~fiscal year 2018, respectively. We estimate contributions will be $1,372,000~~Income.

The discount rate for the remainder of fiscal year 2018. See Item 3. “Quantitative and Qualitative Disclosures About Market Risk” for a discussion of the potential impact of financial market fluctuations on pension plan assets and future funding contributions.

~~Assumptions~~net periodic benefit cost used in the ~~previous calculations were as follows:~~

Pension Benefits Postretirement Health Benefits
For the Three and Six Months Ended January 31,
2018 2017 2018 2017
Discount rate for net periodic benefit cost 3.75 % 3.36 % 3.26 % 2.71 %
Rate of increase in compensation levels 3.50 % 3.50 % —
—
Long-term expected rate of return on assets 7.00 % 7.00 % —
—

calculation of the postretirement health benefits was 4.90% and 3.82% for the three months ended October 31, 2023, and 2022, respectively. The medical cost trend assumption for postretirement health benefits was ~~7.20%~~8.20%. The graded trend rate is expected to decrease to an ultimate rate of ~~4.50%~~4.90% in fiscal year ~~2036~~.2044.

7.11. OPERATING SEGMENTS

We have two operating segments: (1) Retail and Wholesale Products Group and (2) Business to Business Products Group. These operating segments are managed separately and each segment's major customers have different characteristics. The Retail and Wholesale Products Group customers ~~include:~~include mass ~~merchandisers; wholesale clubs;~~merchandisers, the farm and fleet channel, drugstore ~~chains;~~chains, pet specialty retail ~~outlets;~~outlets, dollar ~~stores;~~stores, retail grocery ~~stores;~~stores, distributors of industrial cleanup and automotive ~~products;~~products, environmental service ~~companies; and~~companies, sports field product ~~users.~~users and marketers of consumer products. The Business to Business Products Group customers include: processors and refiners of edible oils, renewable diesel, petroleum-based oils and biodiesel fuel; manufacturers of animal feed and agricultural chemicals; and distributors of animal health and nutrition ~~products; and marketers of consumer~~ products.

Our operating segments are also our reportable segments. ~~Net sales and operating income for each segment are provided below. Revenues by product line are not provided because it would be impracticable to do so.~~ The accounting policies of the segments are the same as those described in Note 1 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2017~~.2023.

Net sales for our principal products by segment are as follows (in thousands):


	Business to Business Products Group				Retail and Wholesale Products Group
	For the Three Months Ended October 31,
Product	2023		2022		2023		2022
Cat Litter	$	—	$	—	$	60,861	$	54,198
Industrial and Sports	—		—		11,416		$	10,654
Agricultural and Horticultural	10,315		10,003		—		—
Bleaching Clay and Fluids Purification	22,406		18,229		—		$	—
Animal Health and Nutrition	6,440		5,455		—		—
Net Sales	$	39,161	$	33,687	72,277		$	64,852

We do not rely on any segment asset allocations and we do not consider them meaningful because of the shared nature of our production facilities; however, we have estimated the segment asset allocations below for those assets for which we can reasonably determine. The unallocated asset category is the remainder of our total assets. The asset allocation is estimated and is not a measure used by our chief operating decision maker about allocating resources to the operating segments or in assessing their performance.


	Assets
	October 31, 2023		July 31, 2023
	(in thousands)
Business to Business Products Group	$	86,596	$	84,424
Retail and Wholesale Products Group	140,819		136,262
Unallocated Assets	61,353		65,549
Total Assets	$	288,768	$	286,235

Net sales and operating income for each segment are provided below. The corporate expenses line includes certain unallocated expenses, including primarily salaries, wages and benefits, purchased services, rent, utilities and depreciation and amortization associated with corporate functions such as ~~research and development,~~ information systems, finance, legal, human resources and customer service. ~~Corporate expenses also include the estimated annual incentive plan bonus accrual.~~


	For the Three Months Ended October 31,
	Net Sales				Income
	2023		2022		2023		2022
	(in thousands)
Business to Business Products Group	$	39,161	$	33,687	$	11,123	$	7,257
Retail and Wholesale Products Group	$	72,277	64,852		$	11,331	7,574
Net Sales	$	111,438	$	98,539
Corporate Expenses					(9,298)		(8,262)
Income from Operations					13,156		6,569
Total Other Expenses, Net					(326)		(132)
Income before Income Taxes					12,830		6,437
Income Tax Expense					(2,088)		(1,207)
Net Income					10,742		5,230
Net Loss Attributable to Noncontrolling Interest					—		(11)
Net Income Attributable to Oil-Dri					$	10,742	$	5,241

Assets
January 31, 2018 July 31, 2017
(in thousands)
Business to Business Products $ 62,698
$ 65,337
Retail and Wholesale Products 90,071
90,508
Unallocated Assets 52,766
56,730
Total Assets $ 205,535
$ 212,575

For the Six Months Ended January 31,
Net Sales Income
2018 2017 2018 2017
(in thousands)
Business to Business Products $ 54,442
$ 50,734
$ 18,635
$ 17,223
Retail and Wholesale Products 81,098
81,052
4,787
4,480
Total Sales $ 135,540
$ 131,786

Corporate Expenses (14,749 ) (13,070 )
Income from Operations 8,673
8,633
Total Other Income (Expense), Net 237
(710 )
Income before Income Taxes 8,910
7,923
Income Tax Expense (6,956 ) (1,664 )
Net Income $ 1,954
$ 6,259

For the Three Months Ended January 31,
Net Sales Income (Loss)
2018 2017 2018 2017
(in thousands)
Business to Business Products $ 27,355
$ 23,261
$ 9,759
$ 7,815
Retail and Wholesale Products 41,539
41,913
2,422
4,987
Total Sales $ 68,894
$ 65,174

Corporate Expenses (7,424 ) (7,215 )
Income from Operations 4,757
5,587
Total Other Income (Expense), Net 314
(343 )
Income before Income Taxes 5,071
5,244
Income Tax Expense (6,167 ) (994 )
Net (Loss) Income $ (1,096 ) $ 4,250

8.12.STOCK-BASED COMPENSATION

The Oil-Dri Corporation of America 2006 Long Term Incentive Plan, as amended (the ~~“2006 Plan”~~"2006 Plan"), permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and cash-based awards. Our employees and outside directors are eligible to receive grants under the 2006 Plan. The total number of shares of stock subject to grants under the 2006 Plan may not exceed ~~937,500.~~1,219,500. As of October 31, 2023, there were 120,805 Common Stock or Class B shares available for future grants under this plan.

~~Stock Options~~

No stock options were granted during the first six months of either fiscal year 2017 or 2018. There were no stock options outstanding at the end of fiscal year 2017. The amount of cash received from the exercise of stock options during the first six months of fiscal year 2017 was $170,000 and the related tax benefit was $80,000.

Restricted Stock

All of our non-vested restricted stock as of ~~January~~October 31, ~~2018~~2023 was issued under the 2006 Plan with vesting periods generally between ~~two years~~one and five ~~years~~.years. We ~~determine~~determined the fair value of restricted stock as of the grant date. We recognize the related compensation expense over the period from the date of grant to the date the shares vest.

~~No restricted stock was granted during the second quarter of fiscal year 2018. During the second quarter of fiscal year 2017, 18,000~~There were 57 thousand and 40 thousand restricted shares of Common Stock ~~were granted. Stock-based compensation expense related to non-vested restricted stock for~~granted during the ~~second~~first quarter of fiscal years ~~2018~~2024 and ~~2017 was $426,000~~2023, respectively. There were 125 thousand restricted shares of Class B shares granted during the first quarter of fiscal year 2024 and ~~$346,000, respectively.~~none in fiscal year 2023. Stock-based compensation ~~expense related to non-vested restricted stock~~was $0.8 million for the first ~~six months~~quarter of fiscal years ~~2018~~2024 and ~~2017 was $928,000 and $777,000,~~2023, respectively.

A summary of restricted stock transactions is shown below:


	Restricted Shares (in thousands)	Weighted Average Grant Date Fair Value
Non-vested restricted stock outstanding at July 31, 2023	348	$	32.95
Granted	182	$	62.29
Vested	(57)	$	36.89
Forfeitures	(1)	$	64.00
Non-vested restricted stock outstanding at October 31, 2023	472	$	43.75

Restricted Shares
(in thousands)
Weighted Average Grant Date Fair Value
Non-vested restricted stock outstanding at July 31, 2017 185
$ 30.96
Granted 24
$ 42.76
Vested (28 ) $ 29.88
Forfeitures (3 ) $ 32.74
Non-vested restricted stock outstanding at January 31, 2018 178
$ 32.70

9.13. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table summarizes the changes in accumulated other comprehensive (loss) income by component as of ~~January~~October 31, ~~2018~~2023 (in thousands):


	Pension and Postretirement Health Benefits		Cumulative Translation Adjustment		Total Accumulated Other Comprehensive (Loss) Income
Balance as of July 31, 2023	$	1,012	$	(264)	$	748
Other comprehensive loss before reclassifications, net of tax	—		(166)		(166)
Amounts reclassified from accumulated other comprehensive income, net of tax	(19)		—		(19)
Net current-period other comprehensive loss, net of tax	(19)		(166)		(185)
Balance as of October 31, 2023	$	993	$	(430)	$	563

Pension and Postretirement Health Benefits Cumulative Translation Adjustment Total Accumulated Other Comprehensive (Loss) Income
Balance as of July 31, 2017 $ (10,327 ) $ 35
$ (10,292 )
Other comprehensive income before reclassifications, net of tax —
70
70
Amounts reclassified from accumulated other comprehensive income, net of tax 418
a) —
418
Net current-period other comprehensive income, net of tax 418
70
488
Balance as of January 31, 2018 $ (9,909 ) $ 105
$ (9,804 )

~~a) Amount is net of tax expense of~~ ~~$221,000. Amount is included in the components of net periodic benefit cost for the pension and postretirement health plans. See Note 6 for further information.~~

~~10. INCOME TAXES~~

On December 22, 2017, the U.S. government enacted the the 2017 Tax Act. The 2017 Tax Act included a number of changes to existing U.S. tax laws that impact us, most notably a reduction of the U.S. corporate income tax rate and acceleration of depreciation for certain assets placed into service after September 27, 2017, as well as prospective changes, including repeal of the domestic manufacturing deduction and capitalization of research and development expenditures.

Staff Accounting Bulletin No. 118 (“SAB 118”), provided further SEC staff guidance for the application of ASC 740, “Income Taxes,” in the reporting period in which the 2017 Tax Act was signed into law. SAB 118 provides that companies (i) should record the effects of the changes from the 2017 Tax Act for which the accounting is complete (not provisional), (ii) should record provisional amounts for the effects of the changes for which the accounting is not complete, and for which reasonable estimates can be determined, in the period they are identified, and (iii) should not record provisional amounts if reasonable estimates cannot be made for the effects of the changes, and should continue to apply guidance based on the tax law in effect prior to the enactment on December 22, 2017. SAB 118 also established a one-year measurement period (through December 22, 2018) where provisional amounts could be subject to adjustment, and requires certain qualitative and quantitative disclosures related to provisional amounts and accounting during the measurement period.

In accordance with ASC 740 and SAB 118, we remeasured our U.S. net deferred tax assets at the reduced U.S. federal corporate tax rate and recognized a provisional charge of $5,091,000 as a discrete item in the provision for income taxes for the three and six months ended January 31, 2018. The measurement of deferred income taxes, as shown in Other Assets on the unaudited Condensed Consolidated Balance Sheet, is provisional. The final remeasurement cannot be determined until the underlying temporary differences are known, rather than estimated.

The 2017 Tax Act also reduced the U.S. federal corporate tax rate from 35.0%% to 21.0% for all corporations effective January 1, 2018. For fiscal year companies, the change in law requires the application of a blended rate for each quarter of the fiscal year of enactment. We will apply a blended tax rate of 26.9% for the fiscal year ending July 31, 2018. Thereafter, the applicable statutory rate is 21.0%. In addition, the 2017 Tax Act included a one-time transition tax on cumulative unrepatriated foreign earnings. Based on information available, we estimate our unrepatriated foreign earnings represent a cumulative loss and therefore no additional income tax expense was recorded related to this provision of the 2017 Tax Act.

We are continuing to analyze the impact of the 2017 Tax Act. As such, our financial results reflect reasonable estimates of items for which the income tax effects of the 2017 Tax Act have not been completed as of January 31, 2018. Adjustments to the provisional charges will be recorded as discrete items in the provision for income taxes in the period in when those adjustments become reasonably estimable and/or the accounting is complete. We will complete our analysis no later than December 22, 2018.

~~11.~~14. RELATED PARTY TRANSACTIONS

One member of our Board ~~of Directors~~ is currently the President and Chief Executive Officer of a ~~customer~~vendor of ours. That customer was a customer of ours before the board member joined that customer and before he became a member of our Board of Directors. Total net sales to that customer, including sales to subsidiaries of that customer, were ~~$77,000~~ ~~and~~ ~~$100,000~~ ~~for the second quarters of fiscal years~~ ~~2018~~ ~~and~~ ~~2017~~, respectively, and were $163,000 and $178,000 for the first six months of fiscal years 2018 and 2017, respectively. Outstanding accounts receivable from that customer, and its subsidiaries, were $16,000 as of January 31, 2018. There were no outstanding amounts due as of July 31, 2017.

One member of our Board of Directors, and of the Compensation Committee of our Board of Directors, is the President and Chief Executive Officer as well as a director and shareholder of a law firm that regularly provides services to us. Total payments to ~~that~~this vendor for fees and cost reimbursements were ~~$53,000 and $54,000 for the second quarters of fiscal years 2018 and 2017, respectively, and were $116,000 and $68,000~~$0.1 million for the first ~~six~~three months of fiscal years ~~2018~~2024 and ~~2017, respectively. Outstanding~~2023. There were no outstanding accounts payable to that vendor ~~were $13,000 and $19,000~~ as of ~~January~~October 31, ~~2018 and~~2023, or July 31, ~~2017, respectively.~~2023.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and the related notes included herein and our Consolidated Financial Statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2017~~.2023. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed under ~~“Forward-Looking Statements”~~"Forward-Looking Statements" and Item 1A, Risk Factors of our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2017~~.2023.

We develop, mine, manufacture and market sorbent products principally produced from clay minerals, primarily consisting of calcium bentonite, attapulgite and ~~to a lesser extent, other clay-like sorbent materials.~~diatomaceous shale. Our principal products include agricultural and horticultural chemical carriers, animal health and nutrition products, ~~bleaching clay and~~cat litter, fluid purification ~~aids, cat litter,~~and filtration bleaching clays, industrial and automotive floor absorbents and sports field products. Our products are sold to two primary customer groups, including customers who resell our products as originally produced to the end consumer and ~~those~~other customers who use our products as part of their production process or use them as an ingredient in their final finished product. We have two reportable operating segments based on the different characteristics of our two primary customer groups: the Retail and Wholesale Products Group ("Retail and Wholesale" or "R&W") and the Business to Business Products Group ("Business to Business" or "B2B"), as described in Note 11 of the Notes to the unaudited Condensed Consolidated Financial Statements. Each operating segment is discussed individually below.

RESULTS OF OPERATIONS

In the first quarter of fiscal year 2024 consolidated net sales reached a new all-time high with top line growth in both the Retail and Wholesale Products Group and the Business to Business Products ~~Group,~~Group. Within Retail & Wholesale, pricing actions to improve profitability drove the increase in net sales. Within Business to Business, revenue growth was driven by higher prices coupled with increased volumes. Consolidated net sales increased $12.9 million or 13% in the first quarter of fiscal year 2024 compared to the first quarter of fiscal year 2023. Consolidated income from operations in the first quarter of fiscal year 2024 increased $6.6 million or 100% when compared to the same period in fiscal year 2023.

Although expenses continued to increase, consolidated net income for the three months ended October 31, 2023, was $10.7 million, compared to $5.2 million in the three months ended October 31, 2022.

Our Consolidated Balance Sheets as ~~described~~of October 31, 2023, and our Consolidated Statements of Cash Flows for the first quarter of fiscal year 2024 show a decrease in ~~Note 7 of~~total cash and cash equivalents from fiscal year-end 2023. The decrease is driven mostly by capital expenditures on property, plant & equipment and dividend payments offset by increases in cash from operations. Refer to the ~~Notes to Condensed Consolidated Financial Statements.~~"Liquidity and Capital Resources" section below.

~~RESULTS OF OPERATIONS~~

~~SIX~~THREE MONTHS ENDED ~~JANUARY~~OCTOBER 31, ~~2018~~2023 COMPARED TO

~~SIX~~THREE MONTHS ENDED ~~JANUARY~~OCTOBER 31, ~~2017~~2022

CONSOLIDATED RESULTS

Consolidated net sales for the ~~six~~three months ended ~~January~~October 31, ~~2018~~2023, were ~~$135,540,000~~,$111.4 million, a 13% increase compared to net sales of ~~$131,786,000~~$98.5 million for the ~~six~~three months ended ~~January~~October 31, ~~2017~~.2022. Net sales ~~were up~~increased for both our ~~Business~~R&W and B2B products groups, primarily due to ~~Business Products Group~~price increases implemented across both product groups and ~~were flat for~~volume growth in our ~~Retail and Wholesale Products Group. Both operating segments also reported higher operating income, as discussed further below.~~B2B products group.

Consolidated ~~net income for~~gross profit in the first ~~six months~~quarter of fiscal year ~~2018~~2024 was ~~$1,954,000, a 69% decrease~~$31.0 million, an increase of $8.7 million, or 39%, from ~~net income~~gross profit of ~~$6,259,000 for~~$22.3 million in the first ~~six months~~quarter of fiscal year ~~2017~~. The reduction in net income was significantly impacted by a one-time $5,091,000 tax expense adjustment recorded in the second quarter of fiscal 2018 to reflect the impact on deferred income tax assets under the 2017 Tax Act. Diluted net income per share was $0.26 for the first six months of fiscal year ~~2018, compared to $0.86 for the first six months of fiscal year~~ ~~2017. The tax expense adjustment effectively reduced diluted net income per share by $0.69 for the first six months of fiscal year 2018.~~

~~Consolidated~~2023. Our gross margin (defined as gross profit as a percentage of net ~~sales for~~sales) in the first ~~six months~~quarter of fiscal year ~~2018~~ ~~was 28.5%, compared~~2024 increased to ~~30.2% for~~28% from 23% in the ~~first six months~~same period of fiscal year ~~2017. Gross profit~~2023. Our domestic cost of goods sold per ton increased 11%, driven primarily by per ton increases in ~~fiscal year 2018 was negatively impacted by higher natural gas and other~~non-fuel manufacturing, ~~costs, as well as by increased~~ freight, and packaging ~~costs. The cost of~~offset by lower per ton natural gas ~~per manufactured ton was approximately 11% higher than the prior year. Other~~costs. Non-fuel manufacturing costs per ton ~~produced were up approximately 8%~~increased 15% during the first quarter of fiscal year 2024 compared to first quarter of fiscal year 2023, mainly due to higher per ton costs of labor, repairs and

replacement of assets, and depreciation, offset by a decrease in the per ton cost of purchased materials. Domestic freight costs per ton increased 14% in the first quarter of fiscal year 2024 compared to the same period ~~in the prior~~of fiscal year ~~including higher expenses for salaries, wages, repairs~~2023 due to a significant customer in our cat litter business that altered shipping terms in January 2023 from collect to delivered which increased our overall freight cost. Excluding the impact of this specific customer, per ton domestic freight costs would have decreased 3% quarter over quarter. Ocean freight costs have also decreased due to both lower rates and ~~depreciation. Freight~~export fees. However, our overall freight costs can vary between periods depending on the mix of products sold and the geographic distribution of our customers. Packaging costs per ton increased ~~approximately 5% due primarily to rising rates as demand for freight services exceeded capacity. Packaging costs were approximately 10% higher~~2% in the first quarter of fiscal year 2024 compared to the ~~prior~~same period of fiscal ~~year. Significant amounts~~year 2023. Many of our contracts for packaging purchases are subject to ~~contractual~~periodic price adjustments, ~~throughout the year based on~~which trail changes in underlying commodity ~~prices, including both resin and paper-based packaging. The impact~~prices. Per ton cost of ~~these higher costs was partially offset by increased selling prices and~~natural gas decreased 55% in the first quarter of fiscal year 2024 compared to the same period of fiscal year 2023 due to a ~~favorable product sales mix.~~decrease in natural gas prices.

Total ~~selling, general and administrative~~SG&A expenses ~~were 4% lower~~of $17.8 million for the first ~~six months~~quarter of fiscal year ~~2018~~2024 were higher by $2.1 million, or 13%, compared to $15.7 million for the first ~~six months~~quarter of fiscal year ~~2017. The decrease was~~2023. Unallocated corporate expenses were higher by $1.0 million, or 13%, driven by ~~lower advertising expense in the Retail~~higher compensation-related expenses, including salaries and ~~Wholesale Products Group.~~bonus accruals. The discussion of the segments' operating incomes below ~~describe~~describes the changes in ~~the selling, general and administrative~~SG&A expenses that were allocated to the operating segments. ~~The remaining unallocated corporate~~

Total other expenses inwere $0.3 million for the first ~~six months~~quarter of fiscal year ~~2018 included higher costs for research and development, implementation of our new~~ ~~enterprise resource planning software and outside legal fees associated with ongoing litigation, as described further in Part II. Item 1.~~ “~~Legal Proceedings~~” ~~of this Quarterly Report on Form 10-Q. These higher corporate expenses were partially offset by~~ ~~a lower estimated annual incentive bonus accrual~~2024 compared to $0.1 million in the ~~prior year. The incentive bonus accruals~~same period of fiscal year 2023.

Consolidated net income before taxes for the first quarter of fiscal year 2024 was $12.8 million compared to $6.4 million for the first quarter of fiscal year 2023. Results for the first quarter of fiscal year 2024 were ~~based on performance targets established for each fiscal year.~~driven by the factors discussed above.

~~Tax~~We had a tax expense for the first ~~six months~~quarter of fiscal year ~~2018 was $6,956,000,~~2024 of $2.1 million compared to ~~$1,664,000~~$1.2 million for the first ~~six months~~quarter of fiscal year ~~2017. Excluding the one-time $5,091,000~~2023. Our tax expense ~~adjustment to reflect the provisions of the 2017 Tax Act, the effective tax rate for the first six months of fiscal year 2018 would have been 21%, the same as the first six months of fiscal year 2017.~~was driven primarily by higher net income. We used an estimated annual effective tax rate ("ETR") of 16% in determining our ~~quarterly~~ provision for income taxes, which is based on expected annual taxable income and the assessment of various tax deductions, including depletion. In addition, the effective tax rate for the first six months of fiscal year 2018 included a reduction of approximately 2% under new accounting guidance for the recognition of excess tax benefits for share-based compensation. See Notes 2 and 10 of the Notes to Condensed Consolidated Financial Statements for more information about new accounting pronouncements and income taxes, respectively.income.

BUSINESS TO BUSINESS PRODUCTS GROUP

Net sales of the Business to Business Products Group for the first ~~six months~~quarter of fiscal year ~~2018~~2024 were ~~$54,442,000,~~$39.2 million, an increase of ~~$3,708,000,~~$5.5 million, or 7%16%, from net sales of ~~$50,734,000~~$33.7 million for the first ~~six months~~quarter of fiscal year ~~2017. Net sales~~2023, with increases across all three of our ~~traditional and engineered agricultural chemical granules increased approximately 19% due primarily to new customers and higher sales to existing customers.~~principal product lines within this group. Net sales of our fluids purification products ~~were up approximately 6%. Sales~~ increased ~~due~~$4.2 million, or 23%, compared to ~~normal ordering fluctuations~~the first quarter of ~~petroleum~~the prior fiscal year. The increase in net sales was primarily driven by new customers in the renewable diesel business in North America, as well as continued demand for our products used in the filtration of edible oil and ~~biodiesel processors.~~to a lesser extent pricing. Net sales increased in North America, our subsidiary in the UK, and the region including Europe, Middle East, and Africa ("EMEA"), partially offset by a decrease in Latin America and Asia when compared to the first quarter of fiscal year 2023. Net sales of our animal health and nutrition products ~~were 2% higher than~~increased $1.0 million, or 18%, during the first ~~six months~~quarter of fiscal year ~~2017,~~2024 compared to the same period of fiscal year 2023. The increase in net sales was driven by ~~increased sales in Latin America. Lower sales of animal health and nutrition products by~~North America, our subsidiary in China, and Asia, partially offset ~~this increase, as described~~by a reduction in ~~“Foreign Operations” below. Sales~~net sales from all other regions. North America sales increased due to a combination of ~~our co-packaged cat litter were down slightly~~higher prices and stronger demand by existing customers when compared to the ~~prior year.~~first quarter of fiscal year 2023. Net sales of our subsidiary in China were driven by the sell off of existing inventory, as discussed further in the "Foreign Operations" section below. Net sales of our agricultural and horticultural chemical carrier products increased $0.3 million, or 3%, for the first quarter of fiscal year 2024 compared to the same period in fiscal year 2023. This is a result of strategic price increases and favorable mix of products.

~~Selling, general and administrative~~SG&A expenses for the Business to Business Products Group ~~were approximately 2% lower due primarily~~decreased 7% or $0.3 million in the first months of fiscal year 2024 compared to ~~lower costs~~the same period of the prior fiscal year. The decrease is mainly driven by a decrease in allocated technical service support cost from the Innovation Center and Microbiology Lab, offset by an increase in compensation, including bonus and travel-related expenses, paid to ~~promote our animal health~~teammates and ~~nutrition products.~~consultants.

The Business to Business Products Group’s operating income for the first ~~six months~~quarter of fiscal year ~~2018~~2024 was ~~$18,635,000,~~$11.1 million, an increase of ~~$1,412,000,~~$3.9 million, or 8%53%, from operating income of ~~$17,223,000~~$7.3 million for the first ~~six months~~quarter of fiscal year ~~2017. Higher~~2023. The increase in operating income was mostly driven by higher net sales and lower selling, general and administrative expenses more than offset increased natural gas, manufacturing, freight and packaging costs. See “Consolidated Results” above for further discussion of manufacturing, freight and packaging costs.across all business within this segment as discussed above.

RETAIL AND WHOLESALE PRODUCTS GROUP

Net sales of the Retail and Wholesale Products Group for the first ~~six months~~quarter of fiscal year ~~2018~~2024 were $72.3 million, an increase of ~~$81,098,000 were essentially flat with~~$7.4 million, or 11%, from net sales of ~~$81,052,000~~$64.9 million for the same period of fiscal year 2023 mainly driven by higher net sales of cat litter offset partially by a decline in our co-packaged cat litter business. Total global cat litter net sales for the first ~~six months~~quarter of fiscal year ~~2017. Total~~2024 increased $6.7 million, or 12%, compared to the first quarter of fiscal year 2023 driven mostly by pricing. Domestic cat litter net sales were ~~even~~$55.0 million, an increase of $8.2 million from the first quarter of fiscal year 2023 due to pricing. Net sales increased across all products except for private label heavy weight litter, with the ~~first six months of the prior year. Branded litter sales were negatively impacted~~greatest increase driven by ~~a change in the mix and amount of products sold to a major customer. However, higher e-commerce~~ sales of ~~our~~ branded ~~litter~~light weight scoopable and ~~litter box liners lessened the overall decline. Private~~private label coarse litters. Net sales ~~declined due primarily to the loss~~ of ~~a customer. Sales of our private label lightweight scoopable~~co-packaged cat litter ~~continued to grow~~products decreased $1.6 million compared to the same period in fiscal year 2023. This decrease was primarily driven by a cyberattack on our customer which prevented them from placing and receiving orders during the first quarter of ~~the prior~~fiscal year ~~due primarily to new distribution and increased sales to current customers.~~

2024. Net sales of cat litter by our subsidiary in Canada increased period over period, as discussed in "Foreign Operations" below. Net sales of our global industrial and ~~automotive absorbent~~sports products ~~were flat~~increased $0.8 million, or 7%, compared to the first ~~six months~~quarter of fiscal year ~~2017. Six month~~2023, primarily driven by increased demand of our synthetic absorbent products and higher prices of our clay-based floor absorbent products. This was further supplemented by an increase in net sales ~~for our subsidiary in the United Kingdom were higher, while sales for~~of industrial products by our subsidiary in Canada ~~were slightly lower than~~as discussed further in the ~~prior year. See “Foreign Operations” below for further discussion about the sales and types of products sold by these foreign subsidiaries.~~"Foreign Operations" section below.

~~Selling, general and administrative~~SG&A expenses for the Retail and Wholesale Products Group were ~~20% lower~~$1.2 million, or 32%, higher during the first quarter of fiscal year 2024 compared to the first ~~six months~~quarter of fiscal year ~~2017. The decrease was driven by approximately $2,100,000 lower~~2023, primarily due to advertising ~~expense to promote our Fresh & Light lightweight cat litter.~~spend. We ~~plan to continue promoting lightweight litter through the remainder of fiscal year 2018 and we expect~~anticipate total advertising expense ~~for the full year of fiscal year 2018 to be less than~~ in fiscal year ~~2017.~~2024 to be higher than fiscal year 2023, however spread more evenly throughout the year.

The Retail and Wholesale Products Group's operating income for the first ~~six~~three months of fiscal year ~~2018~~2024 was ~~$4,787,000,~~$11.3 million, an increase of ~~$307,000,~~$3.8 million, or 7%50%, from operating income of ~~$4,480,000~~$7.6 million for the ~~first six months~~same period of fiscal year ~~2017. The reduction~~2023. This was driven primarily by the increase in ~~selling, general and administrative expenses,~~gross margins due to price increases, partially offset by higher cost of goods sold as discussed ~~above, more than offset increased natural gas, manufacturing, freight and packaging costs. See “Consolidated Results” above for further discussion of manufacturing, freight and packaging costs.~~above.

Foreign operations include our ~~subsidiaries~~subsidiary in Canada, ~~and the United Kingdom,~~ which ~~are included~~is reported in the Retail and Wholesale Products Group, and our ~~subsidiary~~subsidiaries in the UK, Mexico, China and Indonesia, which ~~is included~~are reported in the Business to Business Products Group. Net sales by our foreign subsidiaries during the first ~~six months~~quarter of fiscal year ~~2018~~2024 were ~~$6,047,000, a 7% decrease~~$7.0 million, an increase of 21%, compared to net sales of ~~$6,475,000~~$5.8 million during the first ~~six months~~quarter of fiscal year ~~2017. This decrease was driven by approximately 22% fewer tons~~2023. All of ~~animal health~~our foreign operations, with the exception of our subsidiaries in Mexico and ~~nutrition products sold by~~Indonesia, experienced an increase in net sales during the first quarter of fiscal year 2024 compared to the same period of fiscal year 2023. Net sales of our subsidiary in China ~~primarily as~~increased $0.9 million, or 117%, during the ~~result~~first quarter of ~~lower~~fiscal year 2024 compared to the same period of fiscal year 2023 due to the sell off of all existing inventory to the new master distributor. Future sales to China will be directly though the ~~succeeding business after~~

~~the merger of two customers. Partially offsetting these lower sales were increased~~Company and not through our subsidiary in China. Net sales of ~~fluids purification products by~~ our subsidiary in the United ~~Kingdom. Sales~~Kingdom in the first quarter of fiscal year 2024 increased by $0.4 million, or 87%, compared to net sales in the first quarter of fiscal year 2023. The increase is driven by a combination of higher demand of edible oil filtration products and price increases. Total net sales of our subsidiary in Canada ~~were essentially even with~~during this period increased by $0.2 million, or 6%, compared to the same period in fiscal year 2023 driven by higher net sales of floor absorbents and private label cat litter. The increase in floor absorbent sales was driven by a combination of higher volume and pricing while the increase in cat litter sales was mainly due to price increases instituted in response to rising costs. Net sales of our subsidiary in Mexico decreased during the first quarter of fiscal year 2024 compared to the same period of ~~the prior year.~~fiscal year 2023 by $0.2 million, or 26%. Net sales by our foreign subsidiaries represented ~~4% and 5%~~6% of our consolidated net sales ~~during~~in the first ~~six months~~quarter of both fiscal ~~years 2018~~year 2024 and ~~2017, respectively.~~2023.

Our foreign subsidiaries reported net income of ~~$635,000~~$0.6 million for the first ~~six months~~quarter of fiscal ~~2018~~year 2024, compared to $0.5 million in the first quarter of fiscal year 2023. The increase in net income ~~of $298,000 for~~in the first ~~six months~~quarter of fiscal ~~2017. The improved profitability~~year 2024 was primarily driven ~~primarily~~ by ~~both a favorable product sales mix~~price and ~~positive changes~~volume increases in ~~foreign currency exchange rates.~~Canada and the UK.

Identifiable assets of our foreign subsidiaries as of ~~January~~October 31, ~~2018~~2023, were ~~$8,343,000,~~$11.8 million, compared to ~~$7,822,000~~$14.6 million as of ~~January~~July 31, ~~2017. The increase was due primarily to higher cash, cash equivalents and accounts receivable.~~2023.

~~THREE MONTHS ENDED~~ ~~JANUARY 31, 2018~~ ~~COMPARED TO~~

~~THREE MONTHS ENDED~~ ~~JANUARY 31, 2017~~

~~CONSOLIDATED RESULTS~~

~~Consolidated net sales for the three months ended~~ ~~January 31, 2018~~ ~~were~~ ~~$68,894,000, compared to~~ ~~$65,174,000~~ ~~for the three months ended~~ ~~January 31, 2017~~. Net sales were up for the Business to Business Products Group, but were down for the Retail and Wholesale Products Group. Second quarter operating income increased for the Business to Business Products Group, but decreased for the Retail and Wholesale Products Group, as discussed further below.

~~A consolidated net loss of $1,096,000 was reported for the~~ ~~second~~ ~~quarter of fiscal year~~ ~~2018, compared to net income of~~ ~~$4,250,000~~ ~~for the~~ ~~second~~ ~~quarter of fiscal year~~ ~~2017~~. The results for the second quarter of fiscal 2018 were significantly impacted by a one-time $5,091,000 tax expense adjustment to reflect the impact on deferred income tax assets under the 2017 Tax Act. A diluted net loss per share of $0.15 was reported for the second quarter of fiscal year ~~2018, compared to diluted net income per share of~~ ~~$0.58~~ ~~for the~~ ~~second~~ ~~quarter of fiscal year~~ ~~2017. The tax expense adjustment effectively reduced diluted net income per share by $0.69 for the~~ ~~second~~ ~~quarter of fiscal year 2018.~~

~~Consolidated gross profit as a percentage of net sales for the~~ ~~second~~ ~~quarter of fiscal year~~ ~~2018~~ ~~was~~ ~~28.5%, which was slightly lower than the 29.3% for the~~ ~~second~~ ~~quarter of fiscal year~~ ~~2017~~. Gross profit was negatively impacted by higher natural gas and other manufacturing costs, as well as by increased freight and packaging costs. The cost per manufactured ton for natural gas used to operate kilns that dry our clay was approximately 11% higher in the second quarter of fiscal year 2018 compared to the second quarter of fiscal year 2017. Other manufacturing costs per ton produced were up approximately 9%, including higher expenses for salaries, wages, benefits, repairs and depreciation. Freight costs per ton increased approximately 10% due primarily to rising rates as demand for freight services exceeded capacity. Packaging costs were approximately 7% higher compared to the second quarter of the prior fiscal year. Significant amounts of our packaging purchases are subject to contractual price adjustments throughout the year based on underlying commodity prices, including both resin and paper-based packaging. The impact of these higher costs was partially offset by increased selling prices and a favorable product sales mix.

~~Total selling, general and administrative expenses were 10% higher for the~~ ~~second~~ ~~quarter of fiscal year 2018 compared to the~~ ~~second~~ quarter of fiscal year 2017. The discussion below describes the selling, general and administrative expenses allocated to the operating segments, particularly higher advertising expense in the Retail and Wholesale Products Group. The remaining unallocated corporate expenses in the second quarter of fiscal year 2018 included higher costs for research and development, implementation of our new ~~enterprise resource planning software and outside legal fees associated with ongoing litigation, as described further in Part II. Item 1.~~ “~~Legal Proceedings~~” ~~of this Quarterly Report on Form 10-Q. These higher corporate expenses were partially offset by a lower~~ estimated annual incentive bonus accrual for the second quarter of fiscal year 2018 compared to the same period of fiscal year 2017. The bonus accruals were based on performance targets established for each fiscal year.

Tax expense for the second quarter of fiscal year 2018 was $6,167,000, compared to $994,000 for the second quarter of fiscal year 2017. Excluding the one-time $5,091,000 tax expense adjustment to reflect the provisions of the 2017 Tax Act, the effective tax rate for the second quarter of fiscal year 2018 would have been 21%, compared to 19% for the same period of the prior year. We used an estimated annual effective tax rate in determining our quarterly provision for income taxes, which is based on expected annual taxable income and the assessment of various tax deductions, including depletion. See Note 10 of the Notes to Condensed Consolidated Financial Statements for more information about income taxes.

~~BUSINESS TO BUSINESS PRODUCTS GROUP~~

~~Net sales of the Business to Business Products Group for the~~ ~~second~~ ~~quarter of fiscal year 2018 were $27,355,000, an increase of $4,094,000, or 18%, from net sales of $23,261,000 for the~~ ~~second~~ quarter of fiscal year 2017. Net sales of our traditional and engineered granules used as agricultural chemical carriers increased approximately 50% due primarily to new customers and higher sales to existing customers. Net sales of fluids purification products were up approximately 12%, including increased sales to edible oil producers and higher sales to petroleum oil and biodiesel processors due to normal ordering fluctuations. Net sales of our animal health and nutrition products were approximately 15% higher than the ~~second~~ quarter of the prior year, driven primarily by sales in Latin America. Sales of animal health and nutrition products by our subsidiary in China are described in “Foreign Operations” below. Sales of our co-packaged cat litter were slightly lower than the prior year.

~~Selling, general and administrative expenses for the Business to Business Products Group were 5% higher compared to the~~ ~~second~~ ~~quarter of fiscal year 2017. Expenditures increased for travel and advertising costs to promote our products.~~

The Business to Business Products Group’s operating income for the second quarter of fiscal year 2018 was $9,759,000, an increase of $1,944,000, or 25%, from operating income of $7,815,000 in the second quarter of fiscal year 2017. Higher sales more than offset increased natural gas, manufacturing, freight, packaging and selling, general and administrative costs. See “Consolidated Results” above for further discussion of manufacturing, freight and packaging costs.

~~RETAIL AND WHOLESALE PRODUCTS GROUP~~

Net sales of the Retail and Wholesale Products Group for the second quarter of fiscal year 2018 were $41,539,000, a small decrease of $374,000, or 1%, from net sales of $41,913,000 for the second quarter of fiscal year 2017. Total cat litter net sales were slightly lower compared to the second quarter of fiscal year 2017. Lower sales of branded litters were partially offset by higher sales of private label litter. Branded litter sales were negatively impacted by a change in the mix and amount of products sold to a major customer. However, growth in e-commerce sales lessened the overall branded litter decline. Sales of our private label lightweight scoopable litter continued to grow compared to the same quarter of the prior year, due primarily to new distribution and increased sales to current customers. Private label coarse sales declined to a lesser extent due to the loss of a customer.

Net sales of industrial and automotive absorbent products were also slightly lower compare to the second quarter of fiscal year 2017. Sales for our subsidiary in the United Kingdom were slightly higher, while sales for our subsidiary in Canada were lower than the second quarter of the prior year. See “Foreign Operations” below for further discussion about the sales and types of products sold by these foreign subsidiaries.

Selling, general and administrative expenses for the Retail and Wholesale Products Group were 27% higher compared to the second quarter of fiscal year 2017. The increase was driven by approximately $1,100,000 higher advertising expense to promote our Fresh & Light lightweight cat litter. We plan to continue promoting lightweight litter through the remainder of fiscal year 2018; however, we expect advertising expense for the full year of fiscal year 2018 to be less than in fiscal year 2017.

The Retail and Wholesale Products Group's operating income for the second quarter of fiscal year 2018 was $2,422,000, a decrease of $2,565,000, or 51%, compared to operating income of $4,987,000 for the second quarter of fiscal year 2017. The decrease in operating income was driven by increased natural gas, manufacturing, freight and packaging costs, as well as the higher selling, general and administrative expenses discussed above. See “Consolidated Results” above for further discussion of manufacturing, freight and packaging costs.

~~FOREIGN OPERATIONS~~

Foreign operations include our subsidiaries in Canada and the United Kingdom, which are included in the Retail and Wholesale Products Group, and our subsidiary in China, which is included in the Business to Business Products Group. Net sales by our foreign subsidiaries during the ~~second~~ ~~quarter of fiscal year~~ ~~2018~~ ~~were~~ ~~$3,110,000, a~~ 6%~~decrease~~ ~~compared to net sales of~~ ~~$3,324,000~~ ~~in the~~ ~~second~~ ~~quarter of fiscal year~~ ~~2017~~. This decrease was driven by approximately 13% fewer tons of animal health and nutrition products sold by our subsidiary in China, primarily as the result of lower sales to the succeeding business after the merger of two customers. Sales were also lower for cat litter and industrial absorbent products sold by our subsidiary in Canada. Partially offsetting these lower sales were increased sales of fluids purification products by our subsidiary in the United Kingdom. Net sales by our foreign subsidiaries represented approximately 5% of consolidated net sales during the ~~second~~ ~~quarters of both fiscal years 2018 and 2017.~~

Our foreign subsidiaries reported net income of $436,000 for the second quarter of fiscal year 2018 compared to net income of $267,000 for the second quarter of fiscal year 2017. The improved profitability was driven primarily by both a favorable product sales mix and positive changes in foreign currency exchange rates.

LIQUIDITY AND CAPITAL RESOURCES

Our principal liquidity needs are to fund our capital requirements, ~~include:~~including funding working capital needs; purchasing and upgrading equipment, facilities, information systems, and real estate; supporting new product development; investing in infrastructure; repurchasing ~~Common Stock;~~stock; paying dividends; and, from time to time, business ~~acquisitions.~~acquisitions, and funding our debt service

requirements. During the first ~~six~~ ~~months~~quarter of fiscal year ~~2018~~,2024, we principally ~~used~~funded these short and long-term capital requirements using cash from current operations as well as cash generated in fiscal year 2023 from borrowings under our Series C Notes.

We currently anticipate cash flows from operations and our available sources of liquidity will be sufficient to ~~fund these~~meet our cash requirements. ~~We also have~~In addition, we are actively monitoring the ~~ability to borrow under~~timing and collection of our ~~revolving credit agreement with BMO Harris Bank N.A. (“BMO Harris”), as described further below, however we have not borrowed under the credit agreement in recent years.~~

accounts receivable.

The following table sets forth certain elements of our unaudited Condensed Consolidated Statements of Cash Flows (in thousands):

For the Six Months Ended January 31,
2018 2017
Net cash provided by operating activities $ 11,629
$ 9,093
Net cash used in investing activities (5,100 ) (4,446 )
Net cash used in financing activities (6,222 ) (5,784 )
Effect of exchange rate changes on cash and cash equivalents (21 ) 68
Net increase (decrease) in cash and cash equivalents $ 286
$ (1,069 )

Net cash provided by operating activities

Both net income and the adjustment to net income for deferred income taxes reflect a one-time, non-cash $5,091,000 adjustment recorded in the second quarter of fiscal 2018 to reflect the provisions of the 2017 Tax Act. See Note 10 of the Notes to Condensed Consolidated Financial Statements for more information about income taxes.

In addition to net income, as adjusted for depreciation and amortization and other non-cash operating activities, the primary sources and uses of operating cash flows for the first ~~six~~ ~~months~~quarter of fiscal years ~~2018~~ ~~and~~ ~~2017~~2024 were as follows:

Accounts receivable, less allowance for doubtful accounts, ~~decreased $517,000~~increased $1.5 million in the first ~~six months~~quarter of fiscal year ~~2018 compared to an~~2024. The increase ~~of $1,698,000 in the first six months of fiscal year 2017. The change~~ in accounts receivable ~~balances reflected differences in~~was driven primarily by higher net sales as sales prices increased, offset by the level and timing of ~~sales and~~ collections ~~as well as the~~due to payment ~~terms provided to various customers.~~terms.

~~Prepaid expenses~~Inventory increased ~~$51,000~~by $1.4 million in the first ~~six months~~quarter of fiscal year ~~2018 compared~~2024 due to ~~an increase~~a combination of ~~$3,784,000 in~~rising costs, specifically due to labor and repairs and the ~~first six months~~building of ~~fiscal year 2017. Prepayments of annual insurance premiums~~inventory levels for anticipated seasonal demand and ~~computer software licenses contributed~~ to the increase in both fiscal years. The increase in the first six months of fiscal year 2018 was moderated by a decrease in prepaid advertising expense, but higher prepaid advertising expenses contributed to the increase in the first six months of fiscal year 2017.avoid any potential supply chain disruptions.

Accounts payable decreased ~~$743,000~~by $1.3 million in the first ~~six months~~quarter of fiscal year ~~2018 compared to an increase of $852,000 in the first six months of fiscal year 2017. Trade and freight payable varied in both periods~~2024. The decrease is mainly due to the timing of payments, ~~fluctuations in the~~ cost of goods and services we ~~purchased,~~purchase, production volume levels and vendor payment terms. ~~Current accrued estimated income taxes are also included in accounts payable balances for both years.~~

Accrued expenses decreased ~~$3,637,000~~$4.4 million in the first ~~six months~~quarter of fiscal year ~~2018 compared~~2024. The decrease is mainly due to ~~a decrease~~the payout of ~~$1,698,000~~annual bonuses offset by an increase in the ~~first six months of fiscal year 2017. The payout of the prior fiscal year's discretionary incentive bonus drove lower accrued salaries in the first six months of both fiscal years 2018~~income tax liability and ~~2017. Accrued plant~~other miscellaneous expenses ~~fluctuated in the first six months of both fiscal years~~which fluctuate due to timing of payments, changes in the cost of goods and services we ~~purchased,~~purchase, production volume levels and vendor payment terms. ~~In addition, accrued trade promotions and advertising varied due to the timing of marketing programs.~~

Net cash used in investing activities

Cash used in investing activities ~~was $5,100,000~~of $8.1 million in the first ~~six months~~quarter of fiscal year ~~2018 compared to cash used in investing activities of $4,446,000 in~~2024 was driven by capital expenditures. During the first ~~six months~~quarter of fiscal year ~~2017. Cash used~~2024 we expanded our plant equipment and improved our facilities to support increased demand for ~~capital expenditures was $6,850,000 and $7,279,000 in the first six months of fiscal years 2018 and 2017, respectively. Capital expenditures in both periods included spending for an~~our products.

enterprise resource planning system implementation, as well as equipment additions and replacement at our manufacturing facilities. Net dispositions of short-term investments provided cash of $1,739,000 and $2,831,000 in the first six months of fiscal years 2018 and 2017, respectively. Purchases and dispositions of investment securities in both periods are impacted by variations in the timing of investment maturities, the operating cash needs of the Company and the availability of investment options.

Net cash used in financing activities

Cash used in financing activities ~~was $6,222,000~~of $2.8 million in the first ~~six months~~quarter of fiscal year ~~2018 compared to cash~~2024 was primarily used in financing activities of $5,784,000 in the first six months of fiscal year 2017. Scheduled payments on long-term debt were $3,083,000 in the first six months of both fiscal years 2018 and 2017. Dividend payments in the first six months of fiscal year 2018 were $3,112,000 compared to $2,956,000 paid during the same period of fiscal year 2017 due to afor dividend ~~increase.~~payments.

Total cash ~~and investment~~ balances held by our foreign subsidiaries of ~~$2,000,000~~$4.0 million as of ~~January~~October 31, ~~2018~~ ~~were higher than the~~ ~~January~~2023, decreased compared to $5.2 million as of July 31, ~~2017~~ ~~balances of $1,653,000.~~2023. See further discussion in ~~“Foreign Operations”~~"Foreign Operations" above.

We have a $25,000,000 unsecured revolving credit agreement with BMO Harris which expires on December 4, 2019. The agreement also provides for a maximum of $5,000,000 for foreign letters of credit. Under the agreement we may select a variable interest rate based on either the BMO Harris prime rate or a LIBOR-based rate, plus a margin which varies depending on our debt to earnings ratio, or a fixed rate as agreed between us and BMO Harris. At January 31, 2018, the variable rates would have been 4.50% for the BMO Harris prime-based rate or 2.73% for the LIBOR-based rate. The credit agreement contains restrictive covenants that, among other things and under various conditions, limit our ability to incur additional indebtedness or to dispose of assets. The agreement also requires us to maintain a minimum fixed coverage ratio and a minimum consolidated net worth. We did not borrow under the credit agreement during the six months ended January 31, 2018 and 2017, and we were in compliance with its covenants.

As of ~~January~~October 31, ~~2018~~,2023, we had remaining authority to repurchase ~~300,822~~407,150 shares of Common Stock and 262,092 shares of Class B Stock under a repurchase plan approved by our Board of ~~Directors. These repurchases~~Directors (the "Board"). Repurchases may be made on the open market (pursuant to Rule 10b5-1 plans or otherwise) or in negotiated transactions. The timing, number and ~~number~~manner of ~~shares repurchased~~share repurchases will be determined by our ~~management.~~management pursuant to the repurchase plan approved by our Board.

We believe that cash flow from operations, availability under our Note Agreement and revolving credit facility under our Credit Agreement, current cash ~~and investment~~ balances and our ability to obtain other financing, if necessary, will provide ~~adequate cash funds~~sufficient liquidity for foreseeable working capital needs, capital expenditures at existing facilities, deferred compensation payouts, dividend payments and debt service obligations for at least the next 12 months. See Note 8 of the Notes to the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. We ~~plan to continue promoting our lightweight products, although we~~ expect ~~advertising expense in fiscal year 2018 to be less than in fiscal year 2017. We anticipate that our~~ capital expenditures in fiscal year ~~2018 will~~2024 to be ~~higher~~greater than in fiscal year ~~2017, including costs related to our enterprise resource planning software implementation.~~ ~~In addition, approximately $5,996,000 of deferred compensation is payable within the next year.~~2023. We do not believe that these increased ~~cash outflows~~capital expenditures will dramatically impact our cash position; however, our cash requirements are subject to change as business conditions warrant and opportunities arise.

We continually evaluate our liquidity position and anticipated cash needs, as well as the financing options available to obtain additional cash reserves. Our ability to fund operations, to make planned capital expenditures, to make scheduled debt payments and to remain in compliance with all financial covenants under debt agreements, including, but not limited to, the current credit agreement, depends on our future operating performance, which, in turn, is subject to prevailing economic conditions and to financial, business and other factors. The timing and size of any new business ventures or acquisitions that we complete may also impact our cash requirements.

~~The following tables summarize our contractual obligations and commercial commitments (in thousands) as of~~ ~~January 31, 2018~~ ~~for the time-frames indicated.~~

~~CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS~~

Payments Due by Period
Contractual Obligations Total Less Than 1 Year 1 – 3 Years 4 – 5 Years After 5 Years
Notes Payable $ 9,250
$ 3,083
$ 6,167
$ —
$ —
Interest on Notes Payable 733
366
367
—
—
Operating Leases 15,437
2,099
3,105
2,024
8,209
Total Contractual Cash Obligations $ 25,420
$ 5,548
$ 9,639
$ 2,024
$ 8,209

We made total contributions to our defined benefit pension plan of $770,000 during the first six months of fiscal year 2018. We estimate contributions of approximately $1,372,000 will be made during the remainder of fiscal year 2018. We have not presented this obligation for future years in the table above because the funding requirement can vary from year to year based on changes in the fair value of plan assets and actuarial assumptions. See “Item 3. Quantitative and Qualitative Disclosures About Market Risk” below for a discussion of the potential impact of financial market fluctuations on pension plan assets and future funding contributions.

Amount of Commitment Expiration Per Period
Total Less Than 1 Year 1 – 3 Years 4 – 5 Years After 5 Years
Other Commercial Commitments $ 25,263
$ 25,263
$ —
$ —
$ —

The other commercial commitments in the table above represent open purchase orders, including blanket purchase orders, for items such as packaging, additives and pallets used in the normal course of operations. The expected timing of payments for these obligations is estimated based on current information. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services, or changes to agreed-upon amounts for some obligations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

This discussion and analysis of financial condition and results of operations is based on our unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP for interim financial information and in compliance with instructions to Form 10-Q and Article 10 of Regulation S-X. The preparation of these financial statements requires the use of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses and related disclosures. In preparing these financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements. Estimates and assumptions are revised periodically. Actual results could differ from these estimates. See the information concerning our critical accounting policies included under ~~“Management’s~~"Management’s Discussion of Financial Condition and Results of ~~Operations”~~Operations" in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2017~~.2023.

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

We are exposed to interest rate risk and employ policies and procedures to manage our exposure to changes in the market risk of our cash equivalents and short-term investments. We believe that the market risk arising from holdings of our financial instruments is not material.

We are exposed to foreign currency fluctuation risk, primarily the U.S. Dollar relative to the British Pound, Euro, Canadian Dollar and Chinese Yuan. This risk is related to our foreign subsidiaries' financial results, to certain accounts receivable and to our ability to sell in foreign markets. We are subject to the impact of currency fluctuation upon translation of our foreign subsidiaries’ financial statements from local currencies to U.S. Dollars. In recent years, our foreign subsidiaries have not generated a substantial portion of our consolidated net sales or net income. In addition, the portion of our consolidated accounts receivable denominated in foreign currencies has not been significant. Finally, foreign sales of our products may be influenced by the relative strength of the U.S. dollar compared to various other currencies, which makes our products relatively more or less expensive than our foreign competitors' products in local marketplaces. Foreign currency fluctuations had some bearing on our operating results in the first six months of fiscal year 2018; however, historically the overall foreign currency fluctuation risk has not been material to our Consolidated Financial Statements. During the first six months of fiscal year 2018, we did not enter into any hedge contracts to offset any adverse effect of changes in currency exchange rates.

We are exposed to market risk as it relates to the investments of plan assets under our defined benefit pension plan. The fair value of these assets is subject to change due to fluctuations in the financial markets. A lower asset value may increase our pension expense and may increase the amount and accelerate the timing of future funding contributions.

We are exposed to regulatory risk in the fluid purification, animal health and agricultural markets, principally as a result of the risk of increasing regulation of the food chain throughout the world, but particularly in the United States and Europe. We actively monitor developments in this area, both directly and through trade organizations of which we are a member.

We are exposed to commodity price risk with respect to fuel. Factors that could influence the cost of natural gas used in the kilns to dry our clay include the creditworthiness of our natural gas suppliers, the overall general economy, developments in world events, general supply and demand for natural gas, seasonality and the weather patterns throughout the United States and the world. We monitor fuel market trends and, consistent with our past practice, we may contract for a portion of our anticipated fuel needs using forward purchase contracts to mitigate the volatility of our kiln fuel prices. As of January 31, 2018, we have not purchased any natural gas contracts for our planned kiln fuel needs for the remainder of fiscal year 2018.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the ~~“Exchange Act”~~"Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q. The controls evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer ~~(“CEO”~~("CEO") and Chief Financial Officer ~~(“CFO”~~("CFO"). Based upon the controls evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the SEC, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

We have not experienced any material impact to our internal controls over financial reporting despite the fact that many of our employees are still working remotely. We are continually monitoring and assessing the effects of a hybrid work model on our internal controls to minimize the impact to their design and operating effectiveness.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the fiscal quarter ended ~~January~~October 31, ~~2018~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including the CEO and CFO, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II – OTHER INFORMATION

Items ~~1A, 2,~~1, 3 and 5 of this Part II are either inapplicable or are answered in the negative and are omitted pursuant to the instructions to Part II.

ITEM ~~1. LEGAL PROCEEDINGS~~1A. RISK FACTORS

~~Below is a supplement~~The Company's operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in the ~~description~~Company's Annual Report on Form 10-K for the year ended July 31, 2023. There have been no material changes to our risk factors since the Company's Annual Report on Form 10-K for the year ended July 31, 2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended October 31, 2023, we did not sell any securities which were not registered under the Securities Act of ~~the litigation under Item 3, “Legal Proceedings,”~~1933, as amended. The following chart summarize our Common Stock and Class B stock purchases during this period. There are no shares of our Class A Common Stock currently outstanding.

ISSUER PURCHASES OF EQUITY SECURITIES1, 2

Total Number of Shares Purchased3

Maximum Number of Shares that may yet be Purchased Under Plans or Programs4

1 The table summarizes repurchases of (and remaining authority to repurchase) shares of our Common Stock and Class B Stock. No shares of our Class A Common Stock are currently outstanding. Descriptions of our Common Stock, Class B Stock and Class A Common Stock are contained in Exhibit 4.1 of the Annual Report on Form 10-K for the fiscal year ended July 31, ~~2017.~~2023

~~On February 3, 2015, we brought suit~~2 The figures in the ~~United States District Court for~~table reflect transactions according to the ~~Northern District~~settlement dates. For purposes of Illinois, Eastern Division, against Nestlé Purina PetCare Company (“Nestlé”) seeking monetary damages and injunctive relief based on Nestlé’s alleged infringement of a patent held by us. Discoveryour unaudited consolidated financial statements included in this ~~case~~Form 10-Q, the impact of these repurchases is ~~proceeding.~~recorded according to the settlement dates.

~~Additionally, Nestlé filed a petition for Inter Partes Review (“IPR”) with~~3 All 15,329 shares were surrendered by employees to pay taxes related to restricted stock awards.

4 Our Board of Directors authorized the ~~Patent Trial and Appeal Board (“PTAB”)~~repurchase of ~~the United States Patent and Trademark Office to challenge certain~~250,000 shares of ~~the claims in our patent. The PTAB agreed to consider Nestlé’s petition, but~~Common Stock on June ~~20, 2016, issued~~14, 2012 and an ~~order stating~~additional 750,000 shares of Common Stock on March 11, 2019. These authorizations do not have a stated expiration date. The share numbers in this column indicate the number of shares of Common Stock that Nestlé had not shown by a preponderance of the evidence that any of the challenged claims in our patent are unpatentable. In July 2016, Nestlé filed a motion for reconsideration of the PTAB’s decision, which was denied in February 2017. Nestlé timely filed an appeal of the PTAB’s decision to the U.S. Court of Appeals for the Federal Circuit. In November 2017, Nestlé filed a motion in that Court to remand the case to the PTAB for consideration of additional evidence that it claims should have been provided to the PTAB. In December 2017, the Court declined the request for an immediate remand and deferred Nestlé's motion until the case is assigned to its hearing panel. Briefing is now complete.

Due to the nature and current legal standing of the litigation with Nestlé, we cannot estimate the possible damages, if any, and the total expense associated with the lawsuits. Although no assurances canmay yet be ~~given as to the results of the lawsuits, based~~repurchased under these authorizations. Repurchases may be made on the ~~present status, management does not believe that such results~~open market (pursuant to Rule 10b5-1 plans or otherwise) or in negotiated transactions. The timing, number and manner of share repurchases will ~~have a material adverse effect on our financial condition or results of operations.~~be determined by management.

ITEM 4. MINE SAFETY DISCLOSURES

Our mining operations are subject to regulation by the Mine Safety and Health Administration under authority of the Federal Mine Safety and Health Act of 1977, as amended. Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Exhibit
No.

Description

SEC Document Reference

~~Exhibit~~

~~No.~~

10.1

~~Description~~

~~SEC Document Reference~~

~~By-Laws of~~Amendment No. 4 to Amended and Restated Note Purchase and Private Shelf Agreement, dated September 21, 2023 among Oil-Dri Corporation of America, ~~as Amended~~PGIM, Inc. and ~~Restated~~existing note holders named therein.

Incorporated by reference to Exhibit 10.1 to Oil-Dri's (file No. 001-12622) Current Report on ~~December 12, 2017~~

~~Filed herewith.~~Form 8-K filed on September 22, 2023.

1131

~~Statement re: Computation of Earnings per Share~~.

~~Filed herewith.~~

Certifications pursuant to Rule 13a–14(a)..

Filed herewith.

Certifications pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002.

Furnished herewith.

Mine Safety Disclosures.

Filed herewith.

~~101.INS~~101.SCH

~~XBRL Taxonomy Instance Document~~

~~Filed herewith.~~

~~101.SCH~~

XBRL Taxonomy Extension Schema Document

Filed herewith.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith.

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document

Filed herewith.

~~101.PRE~~

~~XBRL Taxonomy Extension Presentation Linkbase~~

~~Filed herewith.~~

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~

~~OIL-DRI CORPORATION OF AMERICA~~

BY ~~/s/ Daniel S. Jaffee~~

~~Daniel S. Jaffee~~

~~Chairman, President and Chief Executive Officer~~

BY ~~/s/ Daniel T. Smith~~

~~Vice President and Chief Financial Officer~~

~~Dated:~~ ~~March 9, 2018~~

~~Exhibit No.~~

~~Description~~

101.PRE

~~By-Laws of Oil-Dri Corporation of America, as Amended and Restated on December 12, 2017~~

~~Statement re: Computation of Earnings per Share.~~

~~Certifications pursuant to Rule 13a–14(a).~~

~~Certifications pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002.~~

~~Mine Safety Disclosures~~

~~101.INS~~

~~XBRL Taxonomy Instance Document~~

~~101.SCH~~

~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~

~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~

~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~

~~XBRL Taxonomy Extension Labels Linkbase Document~~

~~101.PRE~~

XBRL Taxonomy Extension Presentation Linkbase

Filed herewith.

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101

Filed herewith.

Note: Stockholders may receive copies of the above listed exhibits, without fee, by written request to Investor Relations, Oil-Dri Corporation of America, 410 North Michigan Avenue, Suite 400, Chicago, Illinois 60611-4213, by telephone at (312) 321-1515 or by e-mail to info@oildri.com.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OIL-DRI CORPORATION OF AMERICA

BY /s/ Daniel S. Jaffee

Chairman, President and Chief Executive Officer

BY /s/ Susan M. Kreh

Chief Financial Officer

Dated: December 11, 2023


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	ODC	New York Stock Exchange



x			~~Quarterly Report Pursuant to Section 13 or 15(d)~~ ~~of the~~ ~~Securities Exchange Act of 1934~~ ~~For the Quarterly Period Ended January 31, 2018~~



	(unaudited)
	For the Six Months Ended January 31,
	2018			2017

Net Sales	$	135,540		$	131,786
Cost of Sales	(96,931		)	(91,936		)
Gross Profit	38,609			39,850
Selling, General and Administrative Expenses	(29,936		)	(31,217		)
Income from Operations	8,673			8,633

Other Income (Expense)
Interest expense	(400		)	(489		)
Interest income	119			16
Other, net	518			(237		)
Total Other Income (Expense), Net	237			(710		)

Income Before Income Taxes	8,910			7,923
Income Tax Expense	(6,956		)	(1,664		)
Net Income	1,954			6,259

Retained Earnings:
Balance at beginning of period	154,735			149,945
Cash dividends declared and treasury stock issuances	(3,118		)	(2,964		)
Balance at End of Period	$	153,571		$	153,240

Net Income Per Share
Basic Common	$	0.29		$	0.93
Basic Class B Common	$	0.22		$	0.70
Diluted Common	$	0.26		$	0.86
Average Shares Outstanding
Basic Common	5,030			5,011
Basic Class B Common	2,097			2,077
Diluted Common	7,215			7,145
Dividends Declared Per Share
Basic Common	$	0.4600		$	0.4400
Basic Class B Common	$	0.3460		$	0.3300



	(unaudited)
	For the Three Months Ended January 31,
	2018			2017

Net Sales	$	68,894		$	65,174
Cost of Sales	(49,254		)	(46,049		)
Gross Profit	19,640			19,125
Selling, General and Administrative Expenses	(14,883		)	(13,538		)
Income from Operations	4,757			5,587

Other Income (Expense)
Interest expense	(199		)	(238		)
Interest income	65			8
Other, net	448			(113		)
Total Other Income (Expense), Net	314			(343		)

Income Before Income Taxes	5,071			5,244
Income Tax Expense	(6,167		)	(994		)
Net (Loss) Income	(1,096		)	4,250

Net (Loss) Income Per Share
Basic Common	$	(0.17	)	$	0.63
Basic Class B	$	(0.12	)	$	0.47
Diluted Common	$	(0.15	)	$	0.58
Average Shares Outstanding
Basic Common	5,035			5,019
Basic Class B	2,104			2,088
Diluted Common	7,139			7,155
Dividends Declared Per Share
Basic Common	$	0.2300		$	0.2200
Basic Class B	$	0.1730		$	0.1650



	Pension Benefits				Postretirement Health Benefits
	For the Three and Six Months Ended January 31,
	2018		2017		2018		2017
Discount rate for net periodic benefit cost	3.75	%	3.36	%	3.26	%	2.71	%
Rate of increase in compensation levels	3.50	%	3.50	%	—		—
Long-term expected rate of return on assets	7.00	%	7.00	%	—		—



					Assets
					January 31, 2018			July 31, 2017
					(in thousands)
Business to Business Products					$	62,698		$	65,337
Retail and Wholesale Products					90,071			90,508
Unallocated Assets					52,766			56,730
Total Assets					$	205,535		$	212,575

	For the Six Months Ended January 31,
	Net Sales				Income
	2018		2017		2018			2017
	(in thousands)
Business to Business Products	$	54,442	$	50,734	$	18,635		$	17,223
Retail and Wholesale Products	81,098		81,052		4,787			4,480
Total Sales	$	135,540	$	131,786
Corporate Expenses					(14,749		)	(13,070		)
Income from Operations					8,673			8,633
Total Other Income (Expense), Net					237			(710		)
Income before Income Taxes					8,910			7,923
Income Tax Expense					(6,956		)	(1,664		)
Net Income					$	1,954		$	6,259




	For the Three Months Ended January 31,
	Net Sales				Income (Loss)
	2018		2017		2018			2017
	(in thousands)
Business to Business Products	$	27,355	$	23,261	$	9,759		$	7,815
Retail and Wholesale Products	41,539		41,913		2,422			4,987
Total Sales	$	68,894	$	65,174
Corporate Expenses					(7,424		)	(7,215		)
Income from Operations					4,757			5,587
Total Other Income (Expense), Net					314			(343		)
Income before Income Taxes					5,071			5,244
Income Tax Expense					(6,167		)	(994		)
Net (Loss) Income					$	(1,096	)	$	4,250



	Payments Due by Period
Contractual Obligations	Total		Less Than 1 Year		1 – 3 Years		4 – 5 Years		After 5 Years
Notes Payable	$	9,250	$	3,083	$	6,167	$	—	$	—
Interest on Notes Payable	733		366		367		—		—
Operating Leases	15,437		2,099		3,105		2,024		8,209
Total Contractual Cash Obligations	$	25,420	$	5,548	$	9,639	$	2,024	$	8,209