Oil-Dri Corporation of America (ODC) 2004 Q1 法說會逐字稿

At this time I would like to welcome everyone to the Oil-Dri Corporation first-quarter earnings teleconference. (OPERATOR INSTRUCTIONS). Thank you, Mr. Dan Jaffee, you may begin your conference.

Thank you, and thanks for joining us here right before the Thanksgiving holiday. I'm sure the timing is somewhat less than what could be desired, but I do appreciate your participation here. As usual, we will do a little bit of a recap and try and put some flavor into the earnings release. And then we will spend most of our time in the Q&A session and are basically available for the next hour, leaving a little time for a wrap-up. I do want to start with the safe harbor comments from Ronda.

I just wanted to remind everyone listening that this teleconference contains certain forward-looking statements regarding the Company's expected performance for future periods, and actual results for such periods may materially differ. Those forward-looking statements that we are speaking of are available for you to read at the end of our news release and also our other public filings. Thank you.

Thanks Ronda. Retrospectively, our forward-looking statements certainly looked pretty good here in this quarter as we were looking ahead from last quarter and the quarters before. The momentum that we built repairing the margins in the business continued in a large way (inaudible) the quarter. And before I turn it over to Jeff Libert, our CFO, I just want to make some comments highlighting that. Because of all the positive things that went on in the quarter, that one was the culmination of a lot of good work on the top line and on controlling our costs.

Looking back a little bit, you can see that for the whole fiscal year of 2001 our gross margins were 18 percent even. They rose to 19.1 percent in 2002 and rose 20.6 percent in 2003, with the first-quarter being 20.5 percent. And for the first-quarter of '04, we were able to deliver 23 (technical difficulty) we were able to rise those to 23.5 percent in the first-quarter of '04. And this is particularly gratifying in light of the fact that the tidal wave of fuel cost that we saw coming did materialize.

We saw our fuel costs go up over 30 percent in the quarter, (inaudible) a significant dollar amount. And as we had shown in both our Q's and K's and also in our verbal presentations in these calls, our forward buy contracts expired 7/31, and we (indiscernible) we were going to have a dramatic increase in fuel starting April 1. And as I said, that happened. But because we were able to manage that event versus getting the broadside by it, we were able to do a couple of things -- number one was implement the price increase program. (inaudible) our only concern, and frankly, it wasn't a strong one of mine but it was of some of our general managers, was that by raising prices we would hurt our volume.

So from the quarter now we did not see that happen. We showed a 23 percent increase in sales, which a little over half was due to the Taft acquisition but the other half was from our core business. So clearly, we did not hurt our volume with the price increases, but what it allowed us to do was to deflect the shot we took from this fuel increase. And then at the same time, Tom Cofsky, our VP of Manufacturing, and his team, continued to deliver a real tangible result in terms of improving our efficiencies and our processes and taking a lot of money out of our cost of goods sold that we do control. We don't control the cost of natural gas but we do control a lot of our other inputs, and they did a phenomenal job and have continued to do so. And really we expect that the best is yet to come on that side of the equation.

So, you had a favorable sales mix, you had price increases on the top side, you had cost control on the cost of goods line. So what you saw was a pretty dramatic expansion of our gross margins (inaudible) external inputs. So that felt really good in the quarter. So I have probably stolen a lot of Jeff Libert's thunder, but I really felt like that needed special emphasis. Jeff, I'm going to turn it over to you for a recap.

Okay. Thanks Dan. There's plenty of thunder to go around here. To recap of the results of the Company for the quarter, as (indiscernible) says, our sales increased 23 percent for the quarter; that's something we are very proud of. Our net income increased to 1,718,000 in the quarter versus 411,000 a year ago. So a phenomenal increase, off the charts as a percentage. In the quarter last year, (indiscernible) sometimes we have some onetime things that go either positively or negatively. In the quarter last year, we had included a gain of 139,000 on the sale of some mineral rights. Pre-tax income was 2,420,000 this year, and with the gain a year ago, pre-tax would have been $46,000.

Gross profit, as Dan had mentioned, is up 223.5 percent from 20.5 percent a year ago, and the reasons why echo on some of the things we have talked about in the past. And some of them are new, as Dan has stated. Predominantly, principally we've got -- the Jonny Cat acquisition continues to perform. We acquired the business early last December, and we have not (indiscernible) that acquisition, and so as a result, we saw significant increases in our consumer sales. And these are profitable sales. So we saw some expansion of margin as this business is primarily a branded one, and it carries higher margins.

Also, we saw strong increases in our Ag Chem business. And I will talk about that a little bit further when I get into the segment discussion. As Dan mentioned, we have increased prices selectively across all of our businesses, and we have really taken the time and effort to really understand where we have pressing leverage and where the market cannot bear the price increases. And we have taken increases accordingly and been very successful and lost very little volume as a result. Overall, our average price per ton increased by 8 percent quarter to quarter. And that is really a result of increases but also a better mix, led by the acquisition as we talked about before, and also some of our other segments like Ag Chem which carry higher prices -- those products did very well.

The remainder of our business continued to perform strong. All business units continued to execute according to plan and saw strong results. As Dan mentioned, we have seen profit improvement within our manufacturing group. There is an emphasis that we have had for the past 18 months or so on really measuring and looking at where we are inefficient and correcting things and eliminating headcount where it is possible. And we have seen significant improvement there and cost reductions. As Dan mentioned, we saw increased fuel (indiscernible). This is all in spite of increased fuel expenses -- $620,000 quarter to quarter was the increase. So that's a big number to overcome and we were able to do it successfully. Additionally, Dan did not mention, is that during the quarter we saw $120,000 worth of expense related to closure of our (ph) Valley plant, which happened late last fiscal year and some of the expenses blew over into this year. So these results are particularly -- we feel very positive about them in light of some of the things that we had overcome.

Going around the Company into our segments -- we discussed consumer a little while ago, but sales were up 28 percent for the quarter, primarily due to the Jonny Cat acquisition but also some increased sales in our core business pre Jonny Cat. So we're very proud of that performance. We're also seeing significant increases in our Canadian business in our private-label dog treat sales contributing to the overall increase. In our crop production and horticultural products segment, sales were up a whopping 42 percent for the quarter. And the reason behind that is primarily that our Ag Chem products continued to sell well; they were up 34 percent for the quarter.

We continued to see a strengthening ag economy. And what tends to happen when there's a strong ag economy is we (indiscernible) is very busy during our second and third quarters, as these are the primary times when our customers formulate their products. In strong years as we're seeing now, a lot of production gets pushed forward or back into our first and fourth quarters. So whereas last year was a relatively weak quarter, this particular first quarter was a very strong one. So we are the beneficiaries of that. Additionally, in our Ag group (indiscernible) group, (indiscernible) sales were up 53 percent for the year. We continue to see the markets expand and we continue to see our shares of that market expand. So we are very encouraged by that. While we continue to see this business being strong for the rest of the year, this obviously is a tremendous increase in sales, and I would not expect to see the same quarter over quarter increase going all four quarters of this year.

On the industrial side we are up 13 percent for the quarter, and that is largely a part of our -- as a result of our acquisition. We're continuing to focus on the business that we have acquired on the West Coast. And we're very bullish about our prospects there as we continue to make inroads into the West Coast market, enabled by the fact that we now have a facility that could support that market. In our specialty group, sales were flat in the quarter. And as we have talked about in previous teleconferences, our (indiscernible) business continues to be under pressure in Western Europe (indiscernible) a very competitive market. However, we have been successful in offsetting these losses with gains in other geographies. So we have not seen sales increase significantly there, but we continue to do battle in the marketplace and a very difficult environment.

Additionally, we are continuing to see incremental sales in our animal health and nutrition business. We are into the poultry (indiscernible) season, and we are seeing early and good strong early season sales in that business. One thing we have talked about in previous teleconferences is the strength of our balance sheet, and I continue to express how strong it is. While we always talk about how well we are doing with cash and cash related investments, this time we're not seeing growth there; we're actually down by $6 million from year end. However, this is really reflective of 2 factors -- one is, we've continued to (indiscernible) pay down debt. From a year ago, we've paid down $4 million of debt, and in this quarter we made a payment of $2.5 million. So while our cash balances declined somewhat, our debt capacity has improved.

Additionally, our strong quarter has really increased or shifted our working capital structure. Our receivables during the quarter increased by $4.4 million, and that is related to a factor of timing, as we have receivables outstanding for our very large quarter. Our commitment to managing our balance sheet is very strong. Our days outstanding of receivables is actually down 2 days from a year ago, and our inventory turns has been improving over recent years and it continues to remain about the same as we were a year ago (inaudible) time. We have also continued to focus on efficient managing of our capital expenditures. As our release says, we actually underspent depreciation by $1 million for the quarter, and barring any major investments, I would foresee us continuing to underspend our depreciation. We feel strong enough about our balance sheet that during the quarter we were able to increase our dividend by a penny per share, and we continue our stock buyback program. During the quarter we bought back $440,000 worth of stock. So I feel very good about the direction we're taking both from an income statement and a balance sheet and our cash flow. So it's a very pleasant news to announce to the teleconference today.

Thank you. Excellent, excellent recap of a great quarter. So it's always fun to deliver good news. At this time, I would like to open it up to questions and answers, as we do like to respond specifically to any issues that we have either left cloudy or things that you just -- concerning you particularly. So let's open it up to the Q&A part of our call.

(OPERATOR INSTRUCTIONS). Ethan Starr (ph), private investor.

Good morning, and congratulations on a great quarter. I understand you're making some changes to the Jonny Cat litterbox liners in a variety of ways. I'm wondering, it's a relatively small product as far as revenues go, I would think. Would these changes have the potential to really add a decent boost to the earnings generated from the product?

You know, our goal -- when we got that block of business from the Jonny Cat acquisition it was not very profitable. Our goal is to try and get the margins up to some level that we can support it, and we do feel we have achieved that. None of that showed up the first quarter results; it should start showing up as we move forward. What it has done is it's allowed us to get a better payback and some (indiscernible) dollars. I think it would be a fair expectation to see us try and grow our liner business.

What about increasing distribution of the product to like Wal-Mart and Target and chain drugstores?

It's certainly -- the growth in sales I would think would come mostly in the form of increased distribution. To the extent you don't see it out there now, hopefully you will in the future. I can tell you it is the number one selling line in America. It's roughly a 35 share; I've got all the IRI data on liners now that we have a liner business, and actually for the 12 week period ending, it had a 39 share of the (indiscernible) liner business. So it definitely is the number one player out there, but it has not had nearly as strong a presence in mass or drug. So we're certainly trying to get it in the hands of as many retailers so we can get it in the hands of as many consumers as possible.

Does the product offer any potential to converting purchasers who use other litter brands to an Oil-Dri litter product?

I think so. I think from your question you probably think so, too. And yes, I would think that cross couponing back and forth would make a lot of sense, because, obviously, people that use liners are using litter. And people who use litter are potential liner users. So I think there is a lot of cross couponing potential there.

My next question is this -- I know you run a tight ship and are always looking for ways to save money, but I'm wondering if it's possible to do anything else to reduce your shipping and freight costs? For example, would increasing the proportion of your shipments sent by rail save additional money?

Certainly we dedicate a lot of our energy towards doing exactly what you said. Dave Weiske is our Vice President of Logistics. We are very proud to have him on our (inaudible) does a great job on that front, because we recognize (inaudible) single largest component of our delivered cost of goods is freight. And so we do all of that. You can't imagine all the different ways other than carrier pigeon that we get product from our plants to our customers. We use rail (indiscernible), all sorts of different ways. And you are right on, but I would say he's going to keep doing what he's doing and keep putting dollars to the bottom-line, but there's nothing on the horizon that I see that's going to dramatically change the freight equation of our business. But I will tell you as an investor, that's also a good thing. Because you don't have to necessarily, on your list of things to worry about, worrying that someone from some remote market is going to invent something at a cheap cost and then dump it into our market (ph) freight is the single largest piece of the cost of goods sold -- it takes a way that fear dramatically.

Okay, great. Also regarding the freight, I see there's no rail siding at the past plant. Do you have any plans to build a rail siding at the past plant?

I think in the history of that there was. I think it went unserviced, and it's some huge number. We are talking like $15 million. So no, there's no project we could ever see that would pay that back.

$15 million to build a rail siding?

Not just the siding; it's to get the track to Taft.

Okay. I didn't realize there was no track there.

There was at one point but it has gone completely unserviced, and you would have to put in miles of rail to get (inaudible) on the rail side.

Next question, what growth potential does your plant in England offer and how does it fit into Oil-Dri's strategic plan?

I would just say not material. Not something you should be worried about at the moment. It would be great if at some point it is, but right now we are sticking -- they're doing well, they're delivering good results, but not a major area of growth in the next six to 18 months.

I have more questions but I will get back in the queue.

(OPERATOR INSTRUCTIONS). Robert J. Smith (ph) Centers for Performance (ph).

Good morning. Thanks for the good numbers.

What about the dividend increase?

How about that? I am impressed and I am glad you guys saw the importance of dividends early on, and I encouraged it and I'm glad you came through.

Absolutely.

I think it has helped the price of the stock.

It certainly is a real indication from the managers and the Board that we just see a lot of good things on the horizon.

Can you give us an overview of the new products? On the last conference call there was quite some emphasis on at least delighting upon some of the new products and what the potentials might be?

And again, I'm going to talk about them very generically, not because I'm trying to hide anything from you but just because I would rather have whatever potential competition there would be in these areas find out about it from other avenues. We are still in tests with four major players in this new application, and we have passed all hurdles since the (inaudible), have not run into any snags. It is going to be a time-consuming process. We are not expecting this new product to have any impact positively on this fiscal year which ends July 31st, but we are keeping our fingers and toes crossed that maybe by the fourth quarter of this year we'll be able to give you some guidance in terms of numbers and what it could mean to fiscal '05. So it is not in our numbers at all for this year, but we would sure hope that it would have a material impact on '05.

Just a question of the market size and the potential penetration?

Bob, I would prefer not to get into that right now. It's too nebulous. All it is going to do is get me in trouble. So, (indiscernible) profitable.

So that's one; others around?

Yes, absolutely. Steve Azarelo (ph) and his team out of the innovation center have a whole pipeline full of ideas, all of them pretty much using our selected strands of our clay, of our ores from various locations, processing them in unique ways and then having them to kind of really neat things. So for all of the value-added high margin potentially patentable ideas, and so we are very very optimistic. I mean, again, the whole renovation we have done out there at the innovation center has done nothing but hurt the bottom-line thus far, (indiscernible) spending out there by 25 percent or up to $2.5 million a year, and yet we are so excited that we're able to deliver great results now without his help. And you know he's going to be a big contributor in '05 and beyond, I'm confident of it.

Does any of your R&D work touch upon the broad area of nanotechnology?

No.

What can you tell us about the Poultry Guard situation?

Poultry Guard is doing great. As we mentioned last time, we're getting a lot of use of it outside of what we thought was the traditional season. And it is for a variety of reasons; it's for the control of this horizontal transmission of pathogens; it's for benefits other than just purely the ammonia control. So we actually had a very nice first quarter, both in terms of absolute dollars but also against the prior year. That one is getting back on its growth curve and is turning out to be a nice opportunity.

Can you give us kind of a feel for what it might show this year?

No, I just traded e-mails with the general manager, because he was up so much and when someone sneaks their plan by that much in the first quarter I compliment them, but I also say, how come you did not know this was coming? So I love to see the great year-over-year increases; I just wish I didn't see the great actual to budget increases. I wish (indiscernible) had seen it coming. He gave me a lot of good reasons why he did not see it coming, and I said do you feel like we need to change our plan for the year, and he said not this early in the year. So while we showed big increases and it's going to be a profitable business, it was barely breakeven last year. Really when you allocate any corporate overhead to it, it was a loser. It was a big loser prior to that. My hope is that this year on a fully allocated basis, we'll actually turn a profit on Poultry Guard so that maybe by '05 we'll be in a position to tell you whether it will actually it mean to the bottom-line. Right now, it's a breakeven to marginally profitable business when you allocate (indiscernible).

Ken Turner (ph), anything new on there?

Nope. Nothing to report on (indiscernible) Turner.

I wish you well and look forward to sharing the next quarter.

Thank you.

Ethan Starr, private investor.

It's been about almost a year since you closed on the Taft and Jonny Cat acquisition, and it sounds like the acquisition is fully integrated and the financials all understood. I am just wondering if you can give us a little more update on how the new Jonny Cat products are doing and if you're doing a lot of private-label work there?

Jeff, do you want to handle this? I'm happy to -- we are in different locations, just so you guys know that. I'm actually in Boston for the holidays, and Jeff and Ronda and Charlie are back in Chicago. So through the wonders of modern technology you may not have figured that out.

Regarding Jonny Cat and the new products, we really introduced one to the market so far, and that is the Jonny Cat cat kit. And it has good distribution in the West Coast and we are seeing reordering and the product is moving. In terms of its ultimate success, the jury is still out; it's still a little bit too fresh. And the second part of your question, Ethan, was related to private-label. We have gotten some private-label business out of the Taft plants. It's really just in a startup right now. When we closed our Christmas Valley facility, we moved a substantial portion of that business down to Taft which was private-label, and much of the volume was. So we are doing some private-label out of Taft, it's still primarily a Jonny Cat plant, but we continued to work on our cost structure and try to reduce our costs so we can be more competitive on a private-label basis.

Okay, great. Perhaps it's a little early to ask this next question, but I've read in the business media lately the whole thing with Wal-Mart's effort to move to radio frequency ID for managing logistics and inventory, and I'm wondering what the potential cost and benefits to Oil-Dri are in this system?

You want me to address that?

Yes, Jeff, you take that one.

Our FID is something that we have been following very carefully, and it is really too premature to say what it will mean to us, because really Wal-Mart has picked their top 50 or 100 suppliers. And they're really doing this on an experimental basis, with the goal of being up and ready by sometime in 2005. Like any new technology it's always highly speculative, but we continue to stay close to it. We don't want to be leaders necessarily in this area, because we want other people to debug the technology so the cost can be to a point where we can afford to do it. But it is a big initiative in the consumer products area, with the world's largest supplier of retail goods. We want to stay right on top of it, but not being a leader, being in a close follow-up position.

Also, how much of the cost of the Taft acquisition was allocated to the (indiscernible) reserves you acquired there? Do you have a figure for that?

I honestly don't have a number off the top of my head. Some percentage of it; probably less than 20 percent.

Okay, thanks. How many shares -- I missed the information on the buyback for the last quarter.

Yes. We bought back 3500 shares -- 35,000 shares rather, and we spent about $440,000.

35,000 shares, $440,000. Let's see -- on the revision of the earnings estimate for this year. Obviously, you seem a little cautious as far as revising the lower end upward, but not revising the top end? Is that part (indiscernible) your caution due to fuel cost?

Jeff, I will take this one. We anticipated that you guys (inaudible). And it's really a signal of two things -- number one, we are not in the quarterly earnings gain, in terms of estimating quarters. So yes, we had a great quarter, but all it did was make us a little more confident that we can zero into our annual number. But we know that the Jonny Cat acquisition is going to get lapped in December, that was half our growth in this quarter. And we know that we want to have enough ammunition in our artillery to go after some opportunities in the back half of the year, and yet still deliver on our overall projections. So do I feel more confident about our range now than I did three months ago? Absolutely. That was sort of signaled with the tightening, but that I want to put my neck a little further out when last year we made 54 cents, and I didn't want to be in a position of apologizing for making 80 cents or something this year. 80 and 85, I really don't ever want to be in that position. That will be a 60 percent increase, and it will be -- given us enough ability to go out and really go after some growth opportunities to make sure that '05, '06, and '07 look good. So that is really what that was all about. We gave it a lot of discussion, and that's sort of how we (indiscernible).

Okay. You mentioned the word opportunities there in the back half of the year. Is that possibly meaning an acquisition perhaps?

I am going to leave it nebulous for now, just because it will accrue to all of our benefits if and when it happens, rather than signaling too hard and letting anyone preemptive. So let's just leave it nebulous for now but say that we do expect to make some strategic moves in the back half of the year.

Okay, well, I will look forward to those. Regarding the potential large new product that was discussed a little earlier, and I know this is getting way ahead of things -- but if you need to increase plant capacity, if you do so what (indiscernible) product you need to increase plant capacity to make more of it. That's something you would certainly undertake?

Yes. But before we do that we would rationalize our existing capacity, meaning we currently sell a million tons a year. Well, if we needed a lot of capacity and we didn't have access, we would start looking at the bottom end of what is using up that capacity first rather than putting in a lot of capacity in the industry, especially -- who knows, this is a new idea. And while we would love to think it's going to last for the next 20 years, if it turns out not to we will feel real dumb, if we built new plants to support it and then those plants are sitting idle what we're still doing all the old stuff too, so we are going to be doing a real balancing act of trying to supply the new tiger as we try and weed out some of the weaker links in our chain on the bottom and. So, I would not foresee a big influx of capital going towards capacity, so we really have tapped out that gain.

Could you please expand on the whole Cat's Pride sales increase? You mentioned there was some promotional activity that increased sales (indiscernible) a lot of accounts?

Jeff, I don't know if you want to take that one? I can take it.

Why don't you take it, Dan?

Okay, I will take that one. That one is a continuing of our strategy that we communicated on one of these calls -- it wasn't the last one, it was probably two or three ago -- which is trying to look at our business regionally, and by channel, focus on those customers that really have a bond with Oil-Dri. So we really aren't (indiscernible) anymore. We are doing more and more business with the better and better accounts and the people that we see are winning the races in the United States. So that strategy is really paying off. Our shares dipped when we implemented this maybe a year or two ago; now we have lapped all that. We are only in distribution with accounts we want to be in distribution with, and we are (indiscernible) we get a good payback. That's how -- it was one of the reasons we chose those accounts, because when we were spending promotional money we're getting performance whereas other accounts it seems we spent our promotional money and it never did anything to our performance. So now we're getting a real payback on our advertising and trade dollars, and it is paying off for us. And that is what you're seeing in the quarter.

A follow-up from Robert J. Smith.

You more or less said that you borrowed something from the next quarter in Ag because of the (indiscernible). Is that -- play any meaningful role in the question of looking at the year as a whole?

Let me answer that one, Dan. Just to clarify -- no, I did not state that we borrowed anything from the second quarter. What I have said was typically during our second quarter, we're at capacity. So it's really hard to beat that number, because it's hard to beat 100 percent of capacity. And when we have strong years, a lot of the demand spills over into the first quarter. So I'm not saying that we're going to see any sort of shift of income between the second and first quarter because of ordering patterns, although our Ag Chem business is really dominated by a few large companies. And there's always a potential for that. But I have know reason to believe that's (indiscernible) expecting for this year.

Okay. Thanks for the clarification. Just circling back to (indiscernible). Is the operation itself -- does it have the necessary capital to proceed?

Jeff, and I learned this from you -- I don't -- you want to take that one; I'm happy to if you don't.

I will take that one. You know, (indiscernible) is really, as we have talked about before on these teleconferences, it's really 2 businesses -- it's really an operating business that is one that (indiscernible) and coat seeds, and that is a cash positive business. And then there's the research and development side, and John Eastin, who owns -- the biggest shareholder of Cantor and (indiscernible) business, he really has -- he's bullish on the prospects of what the technology can do. And so they have spent money to fund the R&D side, funding it from the operating side, and sometimes in excess of what their earnings have been. Now, they would always have the potential to cut that R&D back. So in terms of whether they have got enough cash to keep going, certainly, the control is within that businesses hands. They can always cut back the R&D side and remain a viable entity as long as they have a good strong coating and (indiscernible) business.

And again, your percentage interest is what?

It's somewhere around 20 or 21 percent.

Thanks again, and happy holidays also.

At this time there are no further questions.

Thank you. And thanks, everybody, for your participation. I know a lot of people actually just hook up on the Web and can click and listen, so I appreciate your questions because they'll get to hear the benefit of your questions and then the answers. Obviously, we are proud of what has happened. Again, though, we feel like we are just what we call a major victory on a road to a championship. In no way are we declaring any kind of victory here; we're still very mindful that if we take our eye off of our core business that we're going to end up back in the (indiscernible), and we are absolutely loathe to let that happen. So I don't want you to hear any (indiscernible) or cockiness on our part, because there is none. You can talk to my troops and they'll reaffirm that. So we are very conscious on delivering our short-term -- meeting or exceeding your short-term expectations, while allowing us to invest enough to guarantee or at least improve the possibility that '05, '06, and '07 looked equally as good in comparison. So we're -- we're on a good run here. We appreciate your patience and support, and fortunately, the stock market is (indiscernible) in our evaluation, or is validating that we are clearly moving in the right direction as the stock has been moving forward. So thank you. We have our annual meeting next week. I don't expect any of you guys will be there, (indiscernible) you're always welcome if you're ever in town. (indiscernible) the next time we'll talk will be next quarter. So thanks, and happy holidays.

Thank you for participating in today's Oil-Dri Corporation first quarter earnings teleconference.