Oil-Dri Corporation of America (ODC) 2023 Q2 法說會逐字稿

Thank you for standing by, and welcome to Oil-Dri's Q2 Fiscal Year 2023 Investor Conference Call. (Operator Instructions)

感謝您的支持，歡迎來到 Oil-Dri 2023 財年第二季度投資者電話會議。 （操作員說明）

I would now like to hand the call over to Chairman, President and CEO, Dan Jaffee. Please go ahead.

我現在想將電話轉交給董事長、總裁兼首席執行官 Dan Jaffee。請繼續。

Thank you very much, and welcome, everyone, to our second quarter and first 6 months of fiscal 2023 investor teleconference. With me today virtually is Susan Kreh, our CFO; Aaron Christiansen, VP of Operations; Chris Lamson, Group Vice President of Retail and Wholesale; Laura Scheland, VP of Strategic Partnerships and General Counsel; David Atkinson, VP Controller; and Leslie Garber, Manager of Investor Relations.

非常感謝並歡迎大家參加我們 2023 財年第二季度和前 6 個月的投資者電話會議。今天和我在一起的實際上是我們的首席財務官 Susan Kreh；運營副總裁 Aaron Christiansen；零售和批發集團副總裁 Chris Lamson；戰略合作夥伴關係副總裁兼總法律顧問 Laura Scheland；副總裁 David Atkinson；和投資者關係經理 Leslie Garber。

I would like everyone to know you'll see that Wade Robey is not on the call today. Our Animal Health team is currently at the VIV, V-I-V, show in Asia. It's in Bangkok, Thailand. And I'm getting texts and videos. It's going very well. But due to the time change and their commitments, we will be answering any questions that we can related to Amlan and our Animal Health business, but if there are questions that are better answered by Wade, we will save those for the third quarter earnings teleconference when he will be back on the call. And again, Wade is our President of Amlan International.

我希望每個人都知道，您會看到 Wade Robey 今天沒有接聽電話。我們的動物保健團隊目前正在亞洲參加 VIV、V-I-V 展會。它在泰國曼谷。我收到短信和視頻。進展順利。但由於時間的變化和他們的承諾，我們將回答任何與 Amlan 和我們的動物保健業務相關的問題，但如果有 Wade 能更好地回答的問題，我們將把這些問題留到第三季度的收益電話會議上他什麼時候回來接聽電話。再次強調，Wade 是我們 Amlan International 的總裁。

So Leslie, please walk us through the safe harbor.

所以萊斯利，請帶我們穿過安全港。

Great. Thank you, Dan, and welcome, everyone.

偉大的。謝謝丹，歡迎大家。

On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results in those periods may materially differ. In our press release and in our SEC filings, we highlight a number of important risk factors, trends and uncertainties that may affect our future performance. We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in Oil-Dri stock. Thank you for joining us. Dan?

在今天的電話會議上，評論可能包含有關公司未來業績的前瞻性陳述。這些時期的實際結果可能存在重大差異。在我們的新聞稿和提交給美國證券交易委員會的文件中，我們強調了一些可能影響我們未來業績的重要風險因素、趨勢和不確定性。我們要求您在評估公司的評論和評估對 Oil-Dri 股票的任何投資時審查和考慮這些因素。感謝您加入我們。擔？

Great. Before I turn it over to Susan Kreh for her to walk us through the financials, just some general 50,000-foot comments that are highlighted in the release but are worth rementioning.

偉大的。在我將它交給 Susan Kreh 讓她帶我們了解財務之前，只有一些一般性的 50,000 英尺評論在新聞稿中突出顯示但值得再次提及。

So first of all, very excited. We broke $100 million for the quarter. We're at $200 million through the halfway point in revenues, which is great. You can see that we have -- had improved margins. We only made 17.3% last year in the quarter, now 22.6%. But the point being from first quarter to second quarter, relatively flat around the 22.5% margin. And we are very mindful that we need to get back to historic norms of 27%, 28%. We still have pricing action and, fortunately, some costs are starting to come down. You'll hear about those.

所以首先，非常興奮。我們在本季度突破了 1 億美元。我們在收入的中點達到 2 億美元，這很棒。你可以看到我們已經 - 提高了利潤率。去年這個季度我們只賺了 17.3%，現在是 22.6%。但重點是從第一季度到第二季度，利潤率在 22.5% 左右相對持平。我們非常清楚，我們需要回到 27%、28% 的歷史標準。我們仍然有定價行動，幸運的是，一些成本開始下降。你會聽到這些。

And so we do feel confident that we will continue to show sequential margin improvement going forward, and we're very much living our mission of creating value from sorbent minerals.

因此，我們確實有信心，我們將繼續展示未來連續的利潤率改善，並且我們非常履行我們的使命，即從吸附劑礦物中創造價值。

So I don't want to steal too much of the thunder, so I'll turn it over to Susan to walk us through the financials.

所以我不想偷太多風頭，所以我會把它交給蘇珊，讓我們了解一下財務狀況。

Thank you, Dan. As a reminder from our last quarterly call, our investors have asked us to reserve more of the time on this investor call for questions and to spend less of the call on formal comments. So we understand that you've read the materials or we'll assume that, that we published. So I'll just make a few brief comments on the quarter.

謝謝你，丹。作為我們上次季度電話會議的提醒，我們的投資者要求我們在這次投資者電話會議上預留更多的時間來提問，並減少在電話會議上花在正式評論上的時間。因此，我們知道您已經閱讀了我們發布的材料，或者我們假設已經閱讀了這些材料。所以我只會對這個季度做一些簡短的評論。

First of all, as Dan highlighted, net sales of $102 million represent an all-time record quarter for Oil-Dri and a 17% increase over the same period in the prior year. This increase was driven by pricing actions across multiple products in order to cover the input cost increases that Oil-Dri has had to absorb.

首先，正如 Dan 強調的那樣，1.02 億美元的淨銷售額是 Oil-Dri 的歷史最高季度，比去年同期增長 17%。這一增長是由多種產品的定價行動推動的，目的是為了彌補 Oil-Dri 不得不承受的投入成本增加。

Overall, pricing was up 19% in the quarter compared to the same period last year, and the pricing increase was offset by a 2% decrease in volume, primarily attributable to low-margin products in our consumer catheter business. The strong year-over-year performance in pricing drove a significant 48% improvement in gross margin dollars.

總體而言，本季度定價與去年同期相比上漲了 19%，定價上漲被銷量下降 2% 所抵消，這主要歸因於我們消費導管業務中的低利潤產品。定價方面強勁的同比表現推動毛利率顯著提高 48%。

That being said, and as Dan pointed out in his opening comments, our gross margin percent of 22.6% remained flat with the first quarter of fiscal 2023. So we still have some work to do in pricing in order to cover our costs and return to pre-pandemic gross margin levels.

話雖這麼說，正如 Dan 在開場評論中指出的那樣，我們 22.6% 的毛利率與 2023 財年第一季度持平。因此，我們在定價方面仍有一些工作要做，以支付我們的成本並返回到大流行前的毛利率水平。

During the quarter, we booked a onetime charge of $1.977 billion net of tax to establish a reserve.

本季度，我們計入了 19.77 億美元的稅後一次性費用以建立儲備金。

I thought I would provide a little bit of the back story here. And if you have further questions, we have Dave Atkinson, our Vice President, Corporate Controller on the line; as well as Aaron Christiansen, our VP of Operations, who have in-depth knowledge around this matter.

我想我會在這裡提供一些背景故事。如果您還有其他問題，請聯繫我們的副總裁兼公司財務總監戴夫·阿特金森 (Dave Atkinson)；以及我們的運營副總裁 Aaron Christiansen，他對此事有深入的了解。

But to go back, in 1996, Oil-Dri began operating a landfill at our Ochlocknee, Georgia plant, in order to dispose off waste generated at the plant to avoid using public landfills. This space is primarily unusable clay discarded during processing, along with some packaging in lumber. This is actually the only landfill that the company operates.

但回顧一下，1996 年，Oil-Dri 開始在我們佐治亞州 Ochlocknee 的工廠運營垃圾填埋場，以處理工廠產生的廢物，避免使用公共垃圾填埋場。這個空間主要是在加工過程中丟棄的無法使用的粘土，以及一些木材包裝。這實際上是該公司經營的唯一垃圾填埋場。

In 2018, our regular monitoring and permit renewal activity identified that the landfill exceeded its permitted expense in heights and area. We self-identified this issue and reported it to the Georgia Environmental Protection division. A task force made up of Oil-Dri leaders was created with the directive signed viable sales outlets for this waste material. However, this met with little success.

2018 年，我們的定期監測和許可證更新活動發現垃圾填埋場的高度和麵積超出了允許的費用。我們自行確定了這個問題並將其報告給了佐治亞州環境保護部門。一個由 Oil-Dri 領導人組成的工作組成立了，並為這種廢料簽署了可行的銷售渠道。然而，這收效甚微。

So fast forward to September 14, 2022, the Georgia Environmental Protection division, (inaudible) to Oil-Dri, noting that the landfill was overfilled and that Oil-Dri was being required to provide a work plan to relocate the overflow -- overfill in the current cells within the permitted landfill boundaries.

快進到 2022 年 9 月 14 日，佐治亞州環境保護部門（聽不清）向 Oil-Dri 指出，垃圾填埋場已被過度填埋，並且要求 Oil-Dri 提供重新安置溢出物的工作計劃——過度填埋允許的垃圾填埋場邊界內的當前單元格。

The Oil-Dri team engaged outside consultants to advise on the preparation of a response to the Georgia Environmental Protection division, and to develop viable plans for modification of the landfill.

Oil-Dri 團隊聘請了外部顧問，就如何準備對佐治亞州環境保護部門的回應提出建議，並製定可行的垃圾填埋場改造計劃。

In the second quarter, Oil-Dri determined its only viable option was to begin excavating new landfill cells within the permitted extent and to relocate the overfill into those new cells. This plan is expected to take up to 2 years and is currently estimated to cost $2.5 million before tax or $1.977 billion net of tax, and that is the amount that was booked in the quarter.

在第二季度，Oil-Dri 確定其唯一可行的選擇是開始在允許的範圍內挖掘新的垃圾填埋場單元並將溢出物重新安置到這些新單元中。該計劃預計需要長達 2 年的時間，目前估計稅前成本為 250 萬美元或稅後成本為 19.77 億美元，這是本季度入賬的金額。

So those being the most -- 2 most notable results, the strong pricing and the onetime accrual in our very strong quarter.

所以那些是最 - 2個最顯著的結果，強勁的定價和我們非常強勁的季度的一次性應計。

With that, Dan, I'll turn it back over to you.

有了這個，丹，我會把它還給你。

Great. Thank you. And Leslie, let's go through the questions. We appreciate it. We had a lot of good questions come in, and we'll cover as many of them as we can.

偉大的。謝謝。萊斯利，讓我們來完成這些問題。我們很感激。我們收到了很多很好的問題，我們將盡可能多地回答這些問題。

(Operator Instructions) So we have a few in the queue already. The first one comes from Brad Evans at Heartland Funds. He says, I'm hearing from multiple players that private label is taking share from branded players across categories based on widening price gaps and struggling consumer finances. What are you seeing on private label demand And how that might be helping or hurting your branded product shelf space with your retail partners.

（操作員說明）所以我們已經有一些人在排隊了。第一個來自 Heartland Funds 的 Brad Evans。他說，我從多個參與者那裡聽說，由於價格差距不斷擴大和消費者財務狀況不佳，自有品牌正在從各個類別的品牌參與者那里奪取份額。您對自有品牌需求有何看法，以及這可能如何幫助或損害您與零售合作夥伴的品牌產品貨架空間。

Chris, do you want to address that?

克里斯，你想解決這個問題嗎？

Sure. And thanks, Leslie, and thanks, Brad. And Brad, you're hearing, right? That is, I think, a broader trend in fast-moving consumer goods and definitely holds true in litter as well from a total category perspective. And we've been asked this question kind of in different forms, probably over the last 3 quarters. The answer really remains the same, and I'll talk about it from a category perspective first and then how it impacts us at Oil-Dri in our consumer litter business.

當然。謝謝，萊斯利，謝謝布拉德。布拉德，你聽到了，對吧？也就是說，我認為，這是快速消費品的更廣泛趨勢，從整個類別的角度來看，垃圾也絕對適用。可能在過去 3 個季度裡，我們被以不同的形式問過這個問題。答案確實是一樣的，我將首先從類別的角度來談談它，然後再談談它如何影響我們 Oil-Dri 的消費垃圾業務。

Really, we're seeing -- again, you're right, we're seeing a bifurcation in the market where private label and value brands are gaining share. And by bifurcation, I also mean the upper end of the market is gaining share as well. So crystal alternatives are doing very well as well. Getting squeezed in the middle is really -- and we saw probably most significantly in this last quarter, private label gain share well ahead of the big 3 consumer brands in the category.

真的，我們看到——再一次，你是對的，我們看到市場出現分歧，私人品牌和價值品牌正在獲得份額。所謂分叉，我的意思是高端市場也在增加份額。因此，水晶替代品也表現出色。真的被擠在中間——我們可能在上個季度看到最明顯的是，自有品牌在該類別中的份額遠遠領先於三大消費品牌。

I would also note and maybe a new trend consistent with price value, the course segments or the non-scoopable segment which has been on a slow decline in favor of scoopable and alternatives over many, many, many years, actually showed a modest uptick relative to scoop. So actually the segment gained a slight amount of share over the last quarter. So lots of signs pointing to the consumer with -- in the face of inflation being very price value sensitive and cash outlay sensitive.

我還要指出，也許是與價格價值一致的新趨勢，課程細分或不可搶購的細分市場在很多很多年裡一直在緩慢下降以支持搶購和替代品，實際上相對而言顯示出適度的上升舀。因此，實際上該細分市場在上個季度獲得了少量份額。如此多的跡象表明，面對通貨膨脹，消費者對價格價值和現金支出非常敏感。

For us, the question may have been framed a little bit of, hey, could that be hurting you. The short answer is no. It's not. So it's not from a standpoint of value brands. We're also benefiting along with private label. And it's not from the perspective of -- we still have a decent size of business in course. And finally, it's also not hurting us and in fact, helping us from the perspective of -- we've got a strong and growing and premium private label lightweight business that we feel very good about, and it is experiencing tailwinds just as the rest of private label is in the segment. So across the board, these trends have -- are providing, I'd call them, modest to solid tailwinds that we don't see letting up.

對我們來說，這個問題可能有點像，嘿，這會不會傷害到你。最簡潔的答案是不。它不是。所以這不是從價值品牌的角度來看。我們也與自有品牌一起受益。這不是從——我們當然還有相當大的業務規模的角度來看的。最後，它也沒有傷害我們，事實上，從以下角度幫助我們——我們擁有一個強大的、不斷增長的、優質的自有品牌輕量級業務，我們對此感覺非常好，它和其他公司一樣正在經歷順風自有品牌在細分市場中。因此，從整體上看，這些趨勢已經——我稱之為，正在提供我們認為不會減弱的適度到穩固的順風。

Back to you, Leslie.

回到你身邊，萊斯利。

Great. Thank you. Okay. The next question comes from Robert Smith from the Center for Performance Investing. I'm actually going to combine 2 of his questions. Are you capable of reaching $40 million in revenues for Amlan this fiscal year? And what are the parameters for pricing Amlan products? And then his second submission was what is the reasonable gross target range for Amlan over the next several years?

偉大的。謝謝。好的。下一個問題來自績效投資中心的羅伯特史密斯。我實際上要結合他的兩個問題。您能否在本財年為 Amlan 實現 4000 萬美元的收入？ Amlan 產品的定價參數是什麼？然後他的第二份報告是未來幾年 Amlan 的合理總目標範圍是多少？

Dan, do you want to take that?

丹，你要拿那個嗎？

Sure. So the blunt answer is no. We are not going to make $40 million this year. At the midway point, we're up a good 30%. We feel we'll finish the year up about 33%. And last year, we did about $21 million. We think we can do about $28 million. Well, our running rate be in the 30s. We sure hope so. Still showing growth, but it's a long cycle and they're slow to move in and they're slow to move out, but we're still gaining, obviously, as we move forward.

當然。所以直截了當的答案是否定的。我們今年不會賺到 4000 萬美元。在中間點，我們上漲了 30%。我們認為我們將在今年結束時增長約 33%。去年，我們做了大約 2100 萬美元。我們認為我們可以做大約 2800 萬美元。好吧，我們的運行率在 30 多歲。我們當然希望如此。仍然顯示出增長，但這是一個漫長的周期，他們進進出出的速度很慢，但顯然，隨著我們的前進，我們仍在獲益。

Our pricing is very simple. It's value pricing. So we're replacing antibiotics and we price our products so that they are of a significant value to our customer as they use our products to do all sorts of beneficial things, live birth rate and obviously, less mortality, weight gain, all the different metrics that they use and then we try and share in that value.

我們的定價非常簡單。是價值定價。因此，我們正在更換抗生素，我們為我們的產品定價，以便它們對我們的客戶具有重要價值，因為他們使用我們的產品來做各種有益的事情，活產率，顯然，死亡率降低，體重增加，所有不同他們使用的指標，然後我們嘗試分享該價值。

Regarding going further out, Bob, your guess would be as good as mine at this point. it's so dependent. It's like I've said all along, I'm amazed that we are hitting some singles here or doubles being up 33% but it's pretty much a business of grand slams or strike outs, and we're still in the testing phase on a lot of major customers. We're getting a lot of activity. We had a great show in Atlanta I'm hearing feedback. We're having a great show in Bangkok. So we are still very bullish on it. And in the meantime, all of our other businesses are also doing well. So it's sort of a good time to the Oil-Dri.

關於更進一步，鮑勃，你的猜測在這一點上和我的一樣好。它是如此依賴。就像我一直說的那樣，我很驚訝我們在這裡擊中了一些單打或雙打上升了 33%，但這幾乎是大滿貫或三振出局的業務，我們仍處於測試階段很多大客戶。我們有很多活動。我們在亞特蘭大有一場精彩的演出，我聽到了反饋。我們在曼谷有一場精彩的演出。所以我們仍然非常看好它。與此同時，我們所有其他業務也表現良好。所以現在是去 Oil-Dri 的好時機。

Great. The next question comes from Ethan Star, a private investor, and he asks, are you expanding your capacity to manufacture Amlan products? If so, if the previous capacity was x, what will the new capacity be as a multiple of x?

偉大的。下一個問題來自私人投資者 Ethan Star，他問道，您是否正在擴大生產 Amlan 產品的能力？如果是這樣，如果以前的容量是 x，新容量是 x 的倍數是多少？

Aaron, do you want to field that?

亞倫，你想上場嗎？

Ethan, I'm happy to field your question. I believe we've provided a similar update in past quarters. So it's a great opportunity to update on the work. Simple answer is we already have and are continuing to invest in added capacity in front of the Amlan growth. A large appropriation was made in the prior fiscal year '22 and in fiscal '23 to add capacity in at least one of our facilities for Amlan.

Ethan，很高興回答您的問題。我相信我們在過去幾個季度提供了類似的更新。所以這是一個很好的機會來更新工作。簡單的答案是我們已經擁有並將繼續投資於 Amlan 增長之前的額外產能。在上一財政年度 '22 和 '23 財政年度進行了大筆撥款，以增加我們至少一個 Amlan 設施的產能。

Approximately 2/3 of that work is complete. The remaining 1/3 will take place in front of the anticipated Amlan growth curve, timing is to be determined. We would prefer for a number of reasons to not devote the details of the size of the capital allocation and specifics of the capacity that is added, but I can assure you we have a very well-put together plan to have capacity in front of the Amlan growth.

大約 2/3 的工作已經完成。剩下的 1/3 將在預期的 Amlan 增長曲線之前進行，時間待定。出於多種原因，我們寧願不詳細說明資本分配的規模和新增產能的具體細節，但我可以向你保證，我們有一個非常周密的計劃，在阿姆蘭成長。

Great. Thanks, Aaron. The next question is from Eric Cinnamond from Palm Valley Capital. And he asks, there was a time when Oil-Dri hedged half of its natural gas use. Given the sharp decline in natural gas prices, has there been any consideration of reimplementing the natural gas hedging program?

偉大的。謝謝，亞倫。下一個問題來自 Palm Valley Capital 的 Eric Cinnamond。他問道，曾經有一段時間 Oil-Dri 對沖了一半的天然氣使用。鑑於天然氣價格大幅下跌，是否有考慮重新實施天然氣套期保值計劃？

Aaron, do you want to take that one also?

亞倫，你也想拿那個嗎？

Yes. Eric, that's a great question. I'll start with saying, yes. Oil-Dri has reenacted the purchase of buying natural gas forward. I do want to speak to the word hedge that's inferred in your question. We don't think of it as a means to beat the market we are purchasing natural gas in a very conservative and algorithmic way to average price over time.

是的。埃里克，這是一個很好的問題。我會先說，是的。 Oil-Dri 已重新制定購買天然氣遠期合約。我確實想談談在你的問題中推斷出的對沖這個詞。我們不認為這是擊敗市場的一種手段，我們以非常保守和算法的方式購買天然氣，以隨著時間的推移平均價格。

It provides our businesses a better visibility to allow for pricing decisions and takes volatility out of the cost structure. Our purchase strategy will have no more than 40% of the required volume in a given month that's bought in a mechanism that has gas secured forward.

它為我們的業務提供了更好的可見性，以便進行定價決策並消除成本結構的波動性。我們的購買策略將在給定月份內購買不超過 40% 的所需數量，這些數量是通過具有遠期天然氣擔保的機制購買的。

Great. Okay. The next question is from Bill Patterson, individual investor, and he asks, how much stock has been repurchased by the company year-to-date and how much left under authorization. Susan?

偉大的。好的。下一個問題來自個人投資者比爾帕特森，他問，公司年初至今回購了多少股票，還有多少股票在授權中。蘇珊？

Yes, sure. Bill, thanks for the question. We've actually made no open market share repurchases year-to-date. However, we have repurchased 7,493 shares at a cost of 225,000 that were surrendered by employees to pay taxes related to restricted stock awards. So that's the only activity we've had in that category. As far as what's left outstanding, we have authorization to repurchase 429,033 shares left under our current authorization.

是的，當然。比爾，謝謝你的提問。今年迄今為止，我們實際上沒有進行任何公開市場份額回購。但是，我們以 225,000 股的成本回購了 7,493 股員工交出的股份，以繳納與限制性股票獎勵相關的稅款。所以這是我們在該類別中進行的唯一活動。至於未償還的，我們有權回購我們目前授權剩餘的 429,033 股。

The next question is from Ethan Star. Recently, there's been an increase in expenses to support strategic initiatives, including money spent on outside services. Could you please discuss these strategic initiatives and how they will make a difference?

下一個問題來自 Ethan Star。最近，支持戰略計劃的費用有所增加，包括花在外部服務上的錢。您能否討論一下這些戰略舉措以及它們將如何發揮作用？

Dan, do you want to talk about some of the B2B?

丹，你想談談一些 B2B 嗎？

Yes, I'll take the B2B, and then I'll turn it over to Chris for the retail and wholesale. And as I alluded to in one of my answers, it is a good time to be Oil-Dri. We have winning strategies in each of our major business units. And so you know about Amlan, and it is winning, it is growing. We're continuing to attract global talent. We just hired a person to take over Latin America for us. We hired him from Tyson's Cobb. He's joining his fellow Cobb teammates.

是的，我會接受 B2B，然後我會把它交給 Chris 進行零售和批發。正如我在其中一個回答中提到的那樣，現在是成為 Oil-Dri 的好時機。我們在每個主要業務部門都有製勝戰略。所以你知道 Amlan，它正在獲勝，它正在成長。我們將繼續吸引全球人才。我們剛剛聘請了一個人來為我們接管拉丁美洲。我們從 Tyson's Cobb 聘請了他。他加入了他的 Cobb 隊友。

We have a whole new team there. And -- but he's very talented, very successful, and we're excited about the impact he's going to have on our business south of the border and all the way south through Latin and Central and South America.

我們在那裡有一個全新的團隊。而且 - 但他非常有才華，非常成功，我們很高興他將對我們邊境以南的業務產生影響，並一直向南穿過拉丁美洲和中美洲和南美洲。

And so our strategies are working in Amlan. We are continuing to leverage our clay as our unique sustainable competitive advantage, and it's what gives us traceability and quality all the way to the mine.

因此，我們的策略在 Amlan 發揮了作用。我們將繼續利用我們的粘土作為我們獨特的可持續競爭優勢，這使我們在通往礦山的整個過程中都具有可追溯性和質量。

Then over in our next largest B2B business, it's in the fluids purification side and the trend towards renewable diesel is great for us, and specifically, it's in our backyard, a lot of new plants opening up in the United States, and they use our clay to remove trace metals. And the beauty of it is they're buying oil that's already been refined many a times by our clay to remove other things.

然後在我們的下一個最大的 B2B 業務中，它是在流體淨化方面，可再生柴油的趨勢對我們來說很好，特別是在我們的後院，許多新工廠在美國開業，他們使用我們的粘土去除痕量金屬。它的美妙之處在於，他們購買的油已經用我們的粘土提煉過多次，以去除其他物質。

And then when they get the oil, they then need to use another one our products as a final polishing step. And so that strategy is working very well. The ag business is continuing to grow our -- specifically tailored spherical granules, our Verge granules, which has been a big investment over the years. We are basically sold out and putting in more capacity there. And that's all very much in line with creating value from sorbent minerals.

然後當他們得到油時，他們需要使用我們的另一種產品作為最後的拋光步驟。因此，該策略運作良好。 ag 業務正在繼續發展我們的 - 特別定制的球形顆粒，我們的 Verge 顆粒，多年來一直是一項巨大的投資。我們基本上已經賣光了，並在那裡投入更多的產能。而這一切都非常符合從吸著性礦物中創造價值。

So our strategies are working on B2B. And we've got some exciting strategies over on the consumer side as well that I'll let Chris talk about.

所以我們的策略是針對 B2B 的。我們在消費者方面也有一些令人興奮的策略，我會讓克里斯談談。

And I think we highlighted these in a -- put a pretty good spotlight on them in the shareholder meeting or annual meeting last time around. But we continue to be extremely excited about the lightweight segment of the catheter category and what our unique mineral does within that category and the strong performance that drives within the category, but we really see it as our role to do everything we can to ignite the lightweight segment. We've talked this before, it's just below 20% of the overall scoopable segment.

而且我認為我們在上次股東大會或年會上強調了這些 - 對它們進行了很好的關注。但我們仍然對導管類別的輕量級部分以及我們獨特的礦物在該類別中的作用以及在該類別中驅動的強大性能感到非常興奮，但我們確實認為我們的角色是盡我們所能來點燃輕量化段。我們之前談過這個，它只佔整體可挖取部分的 20% 以下。

But if you look up to Canada, it's well above 50% now. And the opportunity to move the U.S. in that direction is obviously enormous to Oil-Dri. It's enormous from an environmental benefit. You take upwards of 30,000 truckloads a year off the roads in the U.S. So we're doing a number of things, really, what I think of as kind of a 360-degree consumer approach to get there.

但如果你看看加拿大，現在已經遠遠超過 50%。將美國推向這個方向的機會對 Oil-Dri 來說顯然是巨大的。這是巨大的環境效益。在美國，每年有超過 30,000 輛卡車從道路上運走。所以我們正在做很多事情，真的，我認為這是一種 360 度消費者方法來實現這一目標。

In the short term, and you'll see this over the next -- over the back half of the year, we're totally focusing our consumer demand spend on the lightweight segment really shifting from previously where we focused on litter for good. That's probably the closest and most tangible thing that you'll be able to see play out in the marketplace again over the next -- over the coming months through the end of the fiscal year and beyond.

在短期內，你會在下半年看到這一點——在今年下半年，我們將消費者的需求支出完全集中在輕量化領域，真正從之前我們專注於垃圾的領域轉變。這可能是您在接下來的幾個月到本財年末及以後能夠再次在市場上看到的最接近和最有形的東西。

In addition to that, we're extremely focused on and Dan says it well, if the product performed as well as heavyweight, why wouldn't everybody -- who's going to choose heavyweight. Who's going to want to log 50% more weight up the stairs of their apartment building, really nobody. Our product performs well. Can it perform better? Yes, and we're extremely focused on our IP against that product performance improvement.

除此之外，我們非常關注並且 Dan 說得很好，如果產品的性能和重量級一樣好，為什麼每個人都不會選擇重量級。誰會想要在公寓樓的樓梯上多舉 50% 的重量，真的沒有人。我們的產品表現良好。它能表現得更好嗎？是的，我們非常專注於我們的知識產權以提高產品性能。

And candidly, we'd be under and (inaudible) and a little more bailed, but we would be interested in helping other players in the category ignite lightweight as well, so through selling innovation, for instance. Now that clearly is further out.

坦率地說，我們會受到（聽不清）和更多的保釋，但我們也有興趣幫助該類別中的其他參與者點燃輕量級，例如通過銷售創新。現在這顯然更遠了。

So a ton of effort focused on growing lightweight and sort of pun intended. We do see what's happened in the Canadian market as a bit of our north star.

因此，大量的努力集中在增加輕量級和雙關語意味上。我們確實將加拿大市場上發生的事情視為我們的北極星。

Great. Thanks, Chris. So we have 2 remaining questions in the queue, but they are really best answered by Wade Robey, our President of Amlan International. And as we mentioned before, he is not on the call this quarter. So we're going to save those for next quarter when he is in attendance. And Dan, I'm just going to turn it back to you for any closing remarks.

偉大的。謝謝，克里斯。所以我們還有 2 個問題需要排隊，但最好由我們的 Amlan International 總裁 Wade Robey 回答。正如我們之前提到的，他本季度沒有接聽電話。因此，當他出席時，我們將在下個季度保存這些內容。丹，我只是想把它轉回給你任何結束語。

Great. Well, thank you, and thanks to the Oil-Dri team and for our loyal shareholders. It was a very good quarter. We believe we have a lot of positive momentum heading into the third and then finally into the fourth quarters of this fiscal year. And as always, we look to the long term. So we are making investments that may or may not pay out this year. But we're confident they will pay out in the long run. And we're benefiting this year from investments that were made years ago that are starting to come to fruition. So thank you for your patience.

偉大的。好吧，謝謝你，也感謝 Oil-Dri 團隊和我們忠實的股東。這是一個非常好的季度。我們相信，進入本財年的第三季度，然後最終進入第四季度，我們有很多積極的勢頭。一如既往，我們著眼於長遠。因此，我們正在進行今年可能會或可能不會支付的投資。但我們相信，從長遠來看，他們會付出代價。今年，我們從多年前開始取得成果的投資中受益。感謝您的耐心等待。

And I think you know we've got the -- what the next Board meeting is in March, but then in the June Board meeting is when we will discuss any kind of dividend action. But we're certainly proud of our record of increased dividends, and I'm sure dividend increase will be a hot topic of conversation at our June meeting. So thank you for your support, and we will talk to you again in about 3 months.

而且我想你知道我們已經知道 - 下一次董事會會議是在 3 月份，但是在 6 月份的董事會會議上我們將討論任何類型的股息行動。但我們當然為我們增加股息的記錄感到自豪，而且我相信增加股息將成為我們 6 月會議上的熱門話題。所以感謝您的支持，我們將在大約 3 個月後再次與您聯繫。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。