Oil-Dri Corporation of America (ODC) 2025 Q2 法說會逐字稿

Good day and thank you for standing by. Welcome to the Q2 fiscal 2025 earnings discussion via webcast conference call. (Operator Instructions). Please be advised that today's conference is being recorded.

您好，感謝您的支持。歡迎透過網路電話會議參加 2025 財年第二季財報討論。（操作員指令）。請注意，今天的會議正在錄音。

I would now like to hand the conference over to your speaker today, Daniel Jaffee, President and CEO of Oil-Dri. Please go ahead.

現在，我想將會議交給今天的發言人、Oil-Dri 總裁兼執行長 Daniel Jaffee。請繼續。

Thank you and good morning, everyone. And welcome to our second quarter in six-month investor teleconference. Joining me via the web and all sorts of different ways. We're all in different rooms, but we will function as a team like we always do.

謝謝大家，早安。歡迎參加我們六個月投資者電話會議的第二季。透過網路和各種不同的方式加入我。我們都在不同的房間裡，但我們會像往常一樣作為一個團隊運作。

Susan Kreh, CFO and CIO, Aaron Christiansen, VP of operations, Christopher Lamson, group VP of retail and wholesale, Laura Scheland, Vice President and General Manager of our consumer products division, Bruce Patsey, VP of fluids purification, joining us this time is Heath Wessels, our Vice President of sales for the Americas Amlan International. He will be sitting in for Wade Roby, who is traveling internationally and unable to attend today's call. So he, thank you for joining us. And then also Tony Parker, our Vice President and General Counsel and Secretary.

財務長兼資訊長 Susan Kreh、營運副總裁 Aaron Christiansen、零售與批發集團副總裁 Christopher Lamson、消費品部門副總裁兼總經理 Laura Scheland、流體淨化副總裁 Bruce Patsey，本次與我們一起參加的還有美洲 Amlan International 銷售副總裁 Heath Wessels。他將代替正在國際旅行且無法參加今天的電話會議的韋德·羅比 (Wade Roby) 出席會議。所以，感謝您加入我們。還有我們的副總裁、總法律顧問兼秘書托尼·帕克 (Tony Parker)。

And as always, Leslie Garber, director of investor relations.

和往常一樣，投資者關係總監 Leslie Garber。

Good morning, everyone. 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.

大家早安。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會有重大差異。在我們的新聞稿和美國證券交易委員會文件中，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以及評估對 Oil-Dri 股票的任何投資時審查並考慮這些因素。

Thank you for joining us. And I'll turn the call back to Dan.

感謝您加入我們。我會把電話轉回給丹。

Great, thank you. And I heard a great quote recently that said, If you're the smartest person in the room, you're in the wrong room. Well, I'm in the right room. I'm surrounded by very smart and talented people on my team who make this happen, and you're seeing incredible results.

太好了，謝謝。最近我聽到一句很有趣的話：如果你是房間裡最聰明的人，那你就進錯房間了。嗯，我來對房間了。我的團隊裡有很多非常聰明、有才華的人，他們讓這個目標成為現實，你們也看到了令人難以置信的成果。

And they're really going to do the majority of the speaking today as well they should because they're doing the majority of the work. So it's only fair, but I do want to start with some 50,000. Comments and I'll TRY not to get too detailed because I know that there could be a lot of numbers flying around, but if you follow me at all on LinkedIn, you'll see one of the themes of Oil-Dri is we like to play what we miney ball. It's our spin on Moneyball and it's all about our teammates who are turning data into dollars.

他們今天確實會發表大部分演講，這是他們應該做的，因為他們完成了大部分工作。所以這很公平，但我確實想從 50,000 左右開始。評論，我會盡量不講得太詳細，因為我知道可能會有很多數字，但如果你在 LinkedIn 上關注我，你會看到 Oil-Dri 的主題之一是我們喜歡玩我們自己喜歡的球。這是我們對《點球成金》的詮釋，它講述的是我們的隊友如何將數據轉化為金錢的故事。

And of course, Susan and I just stole your tagline. So sorry about that, couldn't help it, but Here's what's amazing about this quarter. So in 2025, the quarter we just closed, our tonnage was 30% less than our all-time record, which was set back in '06, but in that very quarter back in '06, we only did $51 million in sales. So we two asked our sales on 30% less tonnage.

當然，蘇珊和我剛剛偷了你的標語。對此我深感抱歉，沒辦法，但這就是本季令人驚奇的事。因此，在 2025 年，也就是我們剛結束的那個季度，我們的噸位比我們在 2006 年創下的歷史最高紀錄低了 30%，但就在 2006 年那個季度，我們的銷售額僅為 5,100 萬美元。因此我們兩家要求銷售人員將噸位降低 30%。

And again, if you had the news releases, you'd see we only made $9.8 million in gross profit back in '06. And we made $75 million this quarter. So you're talking about 7.5 times the gross profit on 30% less tonnage, and that is [Minyball]. We are selling a non-renewable resource, and we focus every day on turning data into dollars, and it's working. So I'm going to turn it over to Susan. I stole some of your thunder, but I got to keep you on your toes.

再說一次，如果你有新聞稿，你會發現我們在 2006 年只賺了 980 萬美元的毛利。本季我們的獲利為 7,500 萬美元。所以你說的是噸位減少 30% 的情況下毛利是原來的 7.5 倍，也就是說[迷你球]。我們銷售的是不可再生資源，我們每天致力於將數據轉化為美元，而且它正在發揮作用。所以我要把它交給蘇珊。我竊取了你的一些風頭，但我必須讓你保持警惕。

Thanks, Dan. It's a pleasure to be here this morning. In order to preserve the most time for questions, I'm just going to highlight a few financial matters, and then I'll address any of your other questions in the Q&A portion of this call.

謝謝，丹。我很高興今天早上來到這裡。為了節省盡可能多的時間來回答問題，我只會強調幾個財務問題，然後在本次電話會議的問答部分回答你們任何其他的問題。

During the second quarter of fiscal 2025, Oil-Dri continued to experience growth momentum in some of the key strategic areas of our business, as sales grew at double digit rates in our fluids purification, animal health products groups, and we continued to successfully integrate our crystal cat litter products. The growth in these high value-added products provided a positive boost in our product mix, which, when combined with our pricing initiatives, drove our gross margin growth up 11% year-over-year.

在 2025 財年第二季度，Oil-Dri 在我們業務的一些關鍵策略領域繼續保持成長勢頭，因為我們的液體淨化、動物保健產品組的銷售額以兩位數的速度增長，並且我們繼續成功整合我們的水晶貓砂產品。這些高附加價值產品的成長為我們的產品組合提供了積極的推動，與我們的定價舉措相結合，推動我們的毛利率年增11％。

The addition and growth of our crystal cat lit litter products has had an impact on our effective tax rate because we do not get a depletion deduction for these highly value-added products. For the second quarter of fiscal year 2025, we used an estimated effective tax rate of 21% compared to an effective tax rate of 16% for the second quarter of fiscal 2024.

我們的水晶貓砂產品的增加和成長對我們的有效稅率產生了影響，因為我們沒有獲得這些高附加價值產品的損耗扣除。對於 2025 財年第二季度，我們使用的預期有效稅率為 21%，而 2024 財年第二季的有效稅率為 16%。

Now we adjust our estimate of this rate every quarter based on expected annual taxable income and our assessment of various tax adjustments, including depletion and discrete items. Bottom line, our diluted earnings per common share of $0.89 reflects a 5% increase year-over-year in the quarter after updating the prior year's number to reflect our stock split. And to recap that split on October 9, 2024, we announced that our board of directors approved a two for one split in the form of a stock dividend.

現在，我們根據預期年度應稅收入以及對各種稅收調整（包括耗竭和單項項目）的評估，每季調整對該稅率的估計。底線是，我們的每股普通股攤薄收益為 0.89 美元，在更新了上年同期的數字以反映我們的股票分割後，本季同比增長 5%。為了回顧 2024 年 10 月 9 日的拆分，我們宣布董事會批准以股票紅利的形式進行二拆一拆分。

Stockholders of record as of the close of business on December 20, 2024, received the distribution of one additional share of common stock per share for each share of common stock held by such stockholder. And one additional share of Class B stock for each share of Class B stock held by such stockholder as of that record date. The additional shares were distributed on January 3, 2025, and our stock began trading on a post-split basis on January 6, 2025, so during this quarter.

截至 2024 年 12 月 20 日營業結束時登記在冊的股東，其持有的每一股普通股均可獲得一股額外普通股的分配。並且，該股東於該登記日持有的每一股 B 類股票將額外獲得一股 B 類股票。額外股份於 2025 年 1 月 3 日分配，我們的股票於 2025 年 1 月 6 日（即本季）開始以分割後基礎進行交易。

Our financials have been updated to reflect that stock split. Our profitable growth during the second quarter led to an increase in cash generation, which was then invested in our strategic initiatives and our manufacturing facilities. And it was also used to support our high service levels to our customers through the building of targeted inventories. During the second quarter of fiscal 2025 we generated $22 million of EBITDA.

我們的財務狀況已更新，以反映該股票分割。我們第二季的獲利成長帶來了現金創造量的增加，這些現金被投資於我們的策略計畫和製造設施。並且它還透過建立有針對性的庫存來支持我們向客戶提供高水準的服務。在 2025 財年第二季度，我們創造了 2,200 萬美元的 EBITDA。

And if you're interested, you can refer to our press release for the reconciliation of that number to net income. After supporting our operations and paying our dividends, some of this cash was used to pay off the remaining $5 million of short-term debt on our revolving credit facility. Initially borrowed to partially finance the acquisition of our ultra pet crystals cat litter business.

如果您有興趣，可以參閱我們的新聞稿，以了解該數字與淨收入的核對。在支持我們的營運和支付股息後，部分現金被用來償還循環信貸額度中剩餘的 500 萬美元短期債務。最初借款是為了部分資助收購我們的超級寵物水晶貓砂業務。

As of the end of the quarter, the credit facility is undrawn and available for potential growth financing opportunities. And one topic that I would mention finally before I turn it back over to Dan, is our continuing monitoring of the potential impact of tariffs on our business. We are closely watching this continuously evolving situation. It seems like it changes every day.

截至本季末，信貸額度尚未提取，可用於潛在的成長融資機會。在把話題轉回給丹之前，我最後想提到的一個主題是，我們將繼續監控關稅對我們業務的潛在影響。我們正密切關注這場不斷演變的局勢。好像每天都會改變。

While we do anticipate some challenges, we believe that because most of our operations and sales are located within the United States, along with the fact that we have a vertically integrated business model, our direct exposure is limited. We have also already taken a number of actions and are engaged in ongoing discussions with our business partners. With whom we will work to minimize the effect of tariffs on our business.

雖然我們確實預計會面臨一些挑戰，但我們相信，由於我們的大部分業務和銷售都位於美國境內，再加上我們擁有垂直整合的業務模式，因此我們的直接風險敞口有限。我們也已經採取了一系列行動，並正在與我們的業務夥伴進行持續討論。我們將與其合作，盡量減少關稅對我們業務的影響。

We remain committed to maintaining strong operational efficiency, and we continue to monitor the situation to make any necessary adjustments in real time. As always, our primary focus is on delivering value to our customers and our stockholders, and we're confident in our ability to navigate these external factors to achieve these goals.

我們將繼續致力於保持強大的營運效率，並持續監控情況以即時做出任何必要的調整。像往常一樣，我們的主要關注點是為客戶和股東提供價值，我們相信我們有能力駕馭這些外部因素來實現這些目標。

And with that, Dan, I will turn it back over to you and I will take any other questions that have come up in the Q&A section.

丹，接下來我將把時間交還給您，並在問答環節回答您提出的任何其他問題。

Okay, great, thank you. And before I open it up to Q&A, I just want a special shout out to Susan, who during the quarter was named CFO of the year for midsize public companies in the city of Chicago, a richly deserved award, and as she always rightly points out, it's a team, but she's leading the team and I was going to be stunned if she didn't win, and she did win. So congratulations to Susan and at this point in time then, I will open it up for Q&A. Leslie, you're going to read the questions and then we'll have our relevant teammate answer them.

好的，太好了，謝謝。在我開始問答環節之前，我想特別感謝蘇珊，她在本季度被評為芝加哥中型上市公司年度首席財務官，這是她當之無愧的獎項，正如她一直正確指出的那樣，這是一個團隊，但她領導著這個團隊，如果她沒有獲獎我會感到非常震驚，而她確實獲獎了。所以祝賀蘇珊，現在我將開始問答環節。Leslie，你先閱讀這些問題，然後我們會讓相關的隊友來回答。

So for everyone, please, submit your questions using the ask a question field on the web t and click submit. So our first question comes from Ethan Star how is Ultra Pet doing? Are the number of shelf placements continuing to increase? How is retail sell through? So Chris Lamson, I'll have you answer that one.

因此，對於所有人，請使用網路上的提問欄位提交您的問題，然後按一下「提交」。我們的第一個問題來自 Ethan Star，Ultra Pet 的狀況如何？貨架擺放的數量是否持續增加？零售銷售情況如何？那麼 Chris Lamson，我讓你來回答這個問題。

Good morning, Ethan, and thanks for checking in on Ultra Pet and Ultra pet acquisition. So, we remain really extremely pleased with the Ultra Pet business. In fact, I can share that our acquisition economics are essentially exactly aligned.

早安，Ethan，感謝您關注 Ultra Pet 和 Ultra pet acquisition。因此，我們對 Ultra Pet 業務仍然非常滿意。事實上，我可以分享的是，我們的收購經濟基本上是完全一致的。

In fact, I chuckle a little bit. Leslie was our financial person on the deal, and she may be the most amazing forecasters. They're really extremely well aligned with the business case acquisition to date, from a bottom-line perspective. Regarding those distribution builds that you allude to, the majority of our retail customers really reset their shelves in the fall going into winter. So we're back into the selling cycle.

事實上，我有點笑了。萊斯利是我們這筆交易的財務人員，她可能是最出色的預測者。從底線角度來看，它們與迄今為止的商業案例收購確實極為一致。關於您提到的那些分銷版本，我們的大多數零售客戶實際上在秋季進入冬季時重新設置了貨架。因此我們又回到了銷售週期。

We don't expect much in the way of further major distribution gains like we experienced a few months ago, in the immediate term, but we're pushing to achieve those strong results again this next fall. And really, we're pleased with the early reads that we're getting from customers in terms of adding further distribution, both further distribution with existing customers and getting distribution with new customers. Velocities vary a bit by customer, but I'd say as we look across those velocities, the items that we got in most recently are doing well. Shelf space going forward. Thank you.

我們並不期望短期內能夠取得像幾個月前那樣的大幅分銷成長，但我們正在努力在明年秋季再次取得同樣強勁的業績。事實上，我們對從客戶那裡獲得的早期讀數感到滿意，這些讀數表明我們在增加進一步分銷方面，包括向現有客戶進一步分銷以及向新客戶分銷。速度因客戶而異，但我想說，當我們回顧這些速度時，我們最近收到的物品表現良好。貨架空間不斷擴大。謝謝。

Thank you. The next question comes from Robert Smith, for the Center for Performance Investing. And he has a question on fluids purification in terms of the US versus international demand. What is the competitive treatment landscape and what are the puts and takes over the next 6 months? Bruce, I'm going to have you take that one.

謝謝。下一個問題來自績效投資中心的羅伯特‧史密斯。他對美國和國際液體淨化需求提出了一個問題。競爭性治療格局如何？未來 6 個月的利弊如何？布魯斯，我要你拿著這個。

Sure, Robert, thanks for the question. Both North America and Europe are probably the two leading regions that produce renewable diesel fuel, and today the business is strong in both those regions. As we look out for six months, we expect use of absorbances in this market to stay stable. And there'll be some growth as we move forward as some new plants come on, but at this point, the landscape is Its competitive, but both regions are doing well.

當然，羅伯特，謝謝你的提問。北美和歐洲可能是生產再生柴油的兩個主要地區，目前這兩個地區的業務都很強勁。展望未來六個月，我們預期該市場的吸光度使用將保持穩定。隨著一些新工廠的建成，我們將繼續前進，並將出現一些增長，但目前，情況競爭激烈，但兩個地區都表現良好。

Great, thank you. We actually received many questions on the Amlan business, so I'm going to consolidate them. So as it relates to the Amlan, is the level of sales that Amlan achieved in the second quarter sustainable going forward? And can you elaborate on the drivers behind this performance and what were the geographical strengths? So I'm going to have Heath answer that for us.

太好了，謝謝。我們實際上收到了很多關於 Amlan 業務的問題，所以我將對它們進行整理。那麼就 Amlan 而言，Amlan 在第二季實現的銷售水準在未來是否可持續？您能否詳細說明這項表現背後的驅動因素以及地理優勢是什麼？所以我請希思來回答我們這個問題。

So I always excited to talk about Amlan and our growth and the team that we're building in animal health at Oil Dry. And so what I would tell you is if you look back to March of last year. So March of 2024, you start to see our business really start to take off and our sales start to increase. So we've been really excited with the sales volumes we've had.

因此我總是很高興談論 Amlan 和我們的成長以及我們在 Oil Dry 在動物保健領域建立的團隊。所以我要告訴你的是，如果你回顧去年三月。因此到 2024 年 3 月，您將開始看到我們的業務真正開始起飛，銷售額開始成長。因此，我們對於目前的銷售量感到非常興奮。

I will tell you I give that credit to not only our sales and technical teams but also our supply chain, the product quality has been really good, the performance of the product once it gets to the customer has been solid, adding value to their business. And really what we're seeing is that our technical teams are able to go in and add value to our customer relationships as well. So hey, excited about what we've seen in Q2, really excited about the commitment that Oil-Dri has to animal health and animal business moving forward.

我要說的是，我不僅將這份榮譽歸功於我們的銷售和技術團隊，也歸功於我們的供應鏈，產品品質一直非常好，產品到達客戶手中後的性能一直很穩定，為他們的業務增加了價值。我們真正看到的是，我們的技術團隊也能夠為我們的客戶關係增添價值。所以，嘿，我們對第二季度看到的表現感到興奮，並對 Oil-Dri 對動物健康和動物業務未來的承諾感到非常興奮。

Great, thank you. Next question is from John Baer, Atson Wealth Advisors. And he asks, he notes, you noted several times in the press release of significant investment in manufacturing infrastructure on a percentage completion basis of what you have targeted, how far along are you in those efforts?

太好了，謝謝。下一個問題來自 Atson Wealth Advisors 的 John Baer。他問道，您在新聞稿中多次提到對製造業基礎設施進行了大量投資，並按照所設定的目標完成百分比計算，這些努力目前進展如何？

Over what time period have you projected to get those upgrades done? And what are you seeing as far as costs involved to do so? Have you considered any pre-buying of materials equipment to head off inflationary pressure? So I'm going to turn that over to Aaron Christensen.

您預計在什麼時間內完成這些升級？您認為這樣做需要花費多少成本？您是否考慮過預先購買材料設備以抵禦通膨壓力？因此我將把這個任務交給 Aaron Christensen。

John, happy to answer your question. Difficult one to answer directly. I'll take it in some general terms. First, we envisioned a long term sustained commitment to reinvesting back in our manufacturing base, actually looking at replacement asset value and proportioning a percentage of our capital plan every year to sustaining the asset base. So it's a long-term commitment, John.

約翰，很高興回答你的問題。很難直接回答。我將用一般的術語來理解這一點。首先，我們設想長期持續地致力於對我們的製造基地進行再投資，實際上是著眼於替換資產的價值，並每年按一定比例從我們的資本計劃中拿出一部分來維持資產基礎。所以這是一個長期的承諾，約翰。

Ongoing, we're also continually looking at where there's overlap between needs for infrastructure replacement but also adding capacity or cost compression. I think, I presented maybe a year ago or so a similar specific piece of work that was just completed in December where we were able to revitalize the heart of one of our factories that produces our agricultural products. And at the same time adds significant capacity. The last piece of your question, we definitely look at places to afford buy equipment.

持續進行中，我們也持續關注基礎設施更換需求與增加容量或壓縮成本之間的重疊之處。我想，大概在一年前，我曾提出過一項類似的具體工作，該工作剛剛在 12 月完成，我們能夠振興我們生產農產品的工廠之一的核心部分。同時也增加了顯著的容量。你問題的最後一部分，我們肯定會尋找能負擔得起設備的地方。

Unfortunately for us, there are not a lot of opportunities given that a lot of the construction costs are a very large portion of the capital costs, it's really difficult to pre-buy construction services. So I hope I've answered your question.

不幸的是，我們的機會不多，因為許多建築成本佔了資本成本的很大一部分，所以預先購買建築服務確實很困難。我希望我已經回答了你的問題。

Great. We have a question from Tyler Ventura from Diamond Hill Capital. And he says, given your continued investment in manufacturing infrastructure while paying down debt and maintaining dividends. What are your capital allocation priorities for the remainder of fiscal 2025 and beyond? Are there any additional M&A opportunities you're considering complementing your organic growth strategy? I'm going to have Susan Kreh take that.

偉大的。我們收到了來自 Diamond Hill Capital 的 Tyler Ventura 的問題。他說，考慮到你在償還債務和維持股息的同時持續對製造業基礎設施進行投資。您在 2025 財年剩餘時間及以後的資本配置重點是什麼？您是否正在考慮其他併購機會來補充您的有機成長策略？我要讓 Susan Kreh 接手這個。

Absolutely, and thanks for the question. I mean let's start with 2025, we're halfway through the year. We had the priority to pay down our revolving credit facility, which we've done across the first two quarters, to open up additional financing capacity because we are always opportunistically looking at opportunities to add to our portfolio. So I think that gets to the M&A aspect of your question. Yes, we are open to that. We want something that is the right fit for our business.

當然，感謝您的提問。我的意思是，讓我們從 2025 年開始，現在已經過了一半。我們優先償還循環信貸額度，我們已經在前兩個季度完成了這項工作，以開闢額外的融資能力，因為我們總是在尋找機會來擴大我們的投資組合。所以我認為這涉及到你問題的併購方面。是的，我們對此持開放態度。我們想要一些適合我們業務的東西。

And we're very careful in assessing those opportunities. And of course, we've had the success with the ultra-pet crystal cat litters, and as Chris, mentioned, that is right on target based on the business case that we established for that acquisition. They look to the rest of the year; there's continued funding for Aaron and his team and the plants to fund some strategic growth initiatives. So that we've got capacity to grow beyond FY '26, and that's how we're looking at it for now.

我們非常謹慎地評估這些機會。當然，我們在超級寵物水晶貓砂方面取得了成功，正如克里斯所提到的，根據我們為此次收購建立的商業案例，這完全符合目標。他們展望今年剩餘的時間；我們將持續為 Aaron 和他的團隊以及工廠提供資金，以資助一些策略性成長計劃。因此，我們有能力在26財年之後繼續成長，這就是我們目前的看法。

Right. We have a question from Ethan Starr. Are there any actions by the Trump administration that would either positively or negatively affect the renewable diesel market? Bruce, you take that?

正確的。伊森·斯塔爾 (Ethan Starr) 向我們提出了一個問題。川普政府採取的任何行動會對再生柴油市場產生正面或負面的影響嗎？布魯斯，你收到了嗎？

Yes, I think, as far as the renewable diesel market today, these plants that have come on are new. So they're going to continue to produce there'll be ups and downs in terms of the credits that they get from the government, which will help those companies be more profitable or less profitable. But the competitive landscape is they're going to continue to produce, and this industry is going to be stable as we move forward in the years to come.

是的，我認為，就當今的再生柴油市場而言，這些新建的工廠都是新的。因此，他們將繼續生產，他們從政府獲得的信貸將有起伏，這將有助於這些公司增加或減少利潤。但競爭格局是他們將繼續生產，並且在未來幾年內這個產業將會保持穩定。

Okay. Next question is from Robert Smith. Headwinds from cost of natural gas, rising prices, any actionable offsets? Aaron, you take that one.

好的。下一個問題來自羅伯特史密斯。天然氣成本和價格上漲帶來的阻力有哪些，有什麼可行的抵銷措施嗎？亞倫，你拿著這個。

Robert, we don't actually view the rising cost of natural gas as a headwind. I'll kind of take the opportunity to remind our shareholders that we do forward purchase natural gas for a reasonable percentage of our gas consumption needs. It helps buffer and anchor prices. In addition, we monitor markets multiple years ahead. And evaluate our pricing and financial models based on where we expect natural gas to go.

羅伯特，我們其實並不認為天然氣成本的上升是個阻力。我想藉此機會提醒我們的股東，我們確實會提前購買一定比例的天然氣來滿足我們的天然氣消費需求。它有助於緩衝和穩定價格。此外，我們也會監控未來幾年的市場。並根據我們對天然氣去向的預期來評估我們的定價和財務模型。

Nothing that is currently underway with the mild to modest rise in natural gas prices was unexpected and unplanned for both in our forward purchases that go out as far as five years, as well as the way we financially model gas prices.

當前天然氣價格小幅上漲的趨勢並不出乎意料，也並非我們計劃外的，無論是我們遠期五年的採購計劃，還是我們對天然氣價格的財務模型。

Okay, thank you. John Baer has a question. You noted softer sales of cat litter and industrial floor absorbent products for the Canadian subsidiary. Is your view that this is a seasonal issue or is more related to economic pressures in Canada that could become more prolonged due to the trade arguments now underway? Chris, will you take that?

好的，謝謝。約翰貝爾有一個問題。您注意到加拿大子公司的貓砂和工業地板吸水產品的銷售疲軟。您認為這是一個季節性問題，還是與加拿大的經濟壓力有關，而且由於目前正在進行的貿易爭論，這種問題可能會變得更加長期？克里斯，你願意接受嗎？

Yes, I would say first relative to the quarter, there were some unique challenges, some of them were actually weather based, some of them were timing with retailer based. In fact, we had a new distribution going into a major retailer in Canada, a very major retailer that was intended to ship in the second quarter and has shifted to the third quarter. In fact, it shipped this past week.

是的，我想說，首先相對於本季而言，存在一些獨特的挑戰，其中一些實際上是基於天氣的，一些是基於零售商的時間表的。事實上，我們已經與加拿大一家大型零售商進行了新的分銷，這家非常大的零售商原計劃在第二季度發貨，但現在已轉移到第三季。事實上，它已於上週發貨。

So I would not say that there is, anything particularly systemic there. In general, our, -- we do, fill our, litter in Canada and have a facility near Montreal. That gives us actually a unique opportunity relative to most of the players in the category to speak to, made in Canada, which is, quite popular up there as I'm sure you've have gathered and may have driven your questions.

所以我不會說那裡存在任何特別系統性的東西。一般來說，我們的垃圾是在加拿大處理的，我們在蒙特婁附近有一個設施。與該類別中的大多數參與者相比，這實際上為我們提供了一個獨特的機會，可以與加拿大製造的產品進行交談，這種產品在加拿大很受歡迎，我相信您已經了解並可能已經提出了您的問題。

In general, relative to what's going on relative to the tariffs our friends to the north, we see this as a bit of an opportunity, and the team's working on how to highlight, where our product is manufactured. To be clear, its US clay coming north of the border that is not currently impacted by tariffs, but ultimately finished and manufactured in Canada and we're going to celebrate that.

總的來說，相對於我們北方朋友的關稅情況，我們認為這是一個機會，團隊正在研究如何突出我們的產品產地。需要明確的是，來自美國邊境以北的黏土目前不受關稅影響，而是最終在加拿大完成和製造，我們要為此慶祝。

Right. Okay, thank you. Tyler Ventura has another question. He asked, you've received 10 consecutive quarters of margin expansion despite rising input costs. What specific operational improvements or pricing strategies have been most effective and how sustainable?

正確的。好的，謝謝。泰勒·文圖拉還有另一個問題。他問道，儘管投入成本上升，但你們的利潤率已連續 10 個季度擴大。哪些具體的營運改善或定價策略最有效且可持續？

Do you view today's margins in the context of past company history and looking ahead to the new normal? So I'm going to have both Aaron Christensen and Chris Lamson add some comments on that question. Aaron, do you want to go first in terms of operational improvements?

您是否根據公司過去的發展歷史並展望新常態來看待今天的利潤率？因此我將讓 Aaron Christensen 和 Chris Lamson 對這個問題發表一些評論。亞倫，你想先談談營運改善的問題嗎？

Yes, I mean, I loosely alluded to it earlier. We're constantly looking at ways to use our reinvestment and capital plan to drive cost compression and operational efficiency. And there are definitely are those, so we find places where we're reinvesting back in our facilities to drive cost compression and capacity at the same time to provide our commercial teams the opportunity to sell more.

是的，我的意思是，我之前曾經稍微提到過這一點。我們一直在尋找方法利用我們的再投資和資本計劃來壓縮成本並提高營運效率。這些肯定是有的，所以我們找到了重新投資於我們設施的地方，以同時壓縮成本和提高產能，為我們的商業團隊提供銷售更多產品的機會。

Chris will talk there in a second and then I'll close with before handing the baton to Chris, look in addition, our manufacturing team every single day is looking for ways to make tomorrow better than today through traditional manufacturing operational efficiency improvement.

克里斯馬上就會講這個話題，然後在把接力棒交給克里斯之前，我會結束演講，此外，我們的製造團隊每天都在尋找方法，透過傳統製造營運效率的提高，讓明天比今天更好。

Yes, I'll just chime in, then that, kind of the other half of that equation, and I will say and I've emphasized this a number of times, I think Aaron and his team, even coming out of the supply chain malaise that was. On the back end of COVID have really enabled us to sell when your service levels, say in our, division or our consumables division up against the retailer north of 99%, it's a heck of a lot easier to have a pricing conversation with the retailers.

是的，我只是想插嘴一下，那麼，這就是這個等式的另一半，我會說，我已經強調過很多次了，我認為 Aaron 和他的團隊甚至擺脫了供應鏈困境。在 COVID 的後端，當您的服務水平（例如在我們的部門或消耗品部門）與零售商相比超過 99% 時，我們確實能夠實現銷售，與零售商進行定價對話要容易得多。

So that's brass tacks relative to, really creating value from sorbent minerals and playing mining ball as Dan talked about at the beginning. I'd say there's, really kind of three buckets that we work against that's driving some of that margin improvement or a big contributor to that margin improvement. So the pricing opportunities that you talk about specifically, Heath alluded to it we really work to understand the value that we're creating for our customers and on certain of our businesses, our consumers as well.

所以這就是相對於實際問題，真正從吸附劑礦物中創造價值，並像丹一開始所說的那樣，進行採礦。我想說，我們實際上致力於推動利潤率提高的三個方面，或者說，這是利潤率提高的一個重要因素。因此，希思提到，您特別談到的定價機會確實努力去了解我們為客戶、某些業務以及消費者創造的價值。

That may be understanding the value of substitutes that that would be a good example in our ag business, for instance. In the litter business, if you double click on that, you've got a dynamic where, really the category is not terribly elastic. People are not going to get rid of their cats nor their cats going to the bathroom less because cat litter got more expensive, right?

這或許就是理解替代品的價值，例如，這在我們的農業業務中就是一個很好的例子。在垃圾產業，如果你雙擊它，你就會得到一個動態，實際上這個類別的彈性並不大。人們不會因為貓砂變貴了而拋棄貓，也不會讓貓減少上廁所的次數，對嗎？

But fundamentally, especially as a value player, our value gaps versus our competitors are key. We study the heck out of those. We understand how our business reacts when those gaps change, and we make adjustments in our pricing strategies to really optimize value there. Dan really talked about at the beginning that a big piece of playing miny ball is really driving the mix and driving the strategic businesses.

但從根本上來說，特別是作為價值參與者，我們與競爭對手的價值差距是關鍵。我們對這些進行了深入研究。我們了解當這些差距發生變化時我們的業務如何反應，並且我們會調整定價策略以真正優化價值。丹在一開始就說過，玩 Miny Ball 的很大一部分實際上是推動組合和推動策略業務。

And Susan, hit on exactly that. It's our fluids purification business, our amm business, and our lightweight litter business specifically, which now includes crystals. One of the reasons we bought crystals, as I've told you before, is because it's lightweight. And all those businesses create additional value for our consumers and ultimately create additional value for us.

蘇珊正是這麼做的。這是我們的液體淨化業務、我們的 amm 業務，特別是我們的輕質垃圾業務，現在包括晶體。正如我之前所說的，我們購買水晶的原因之一是它很輕。所有這些業務都為我們的消費者創造了額外的價值，並最終為我們創造了額外的價值。

And then lastly, I'd say even within the business units, our sales teams have become very adept at understanding margin structure and where we can drive the most value, and they're out managing the mix with their prospective customers. So three key components there and a lot of focus being put against all three.

最後，我想說，即使在業務部門內，我們的銷售團隊也已經非常善於理解利潤結構以及我們可以在哪裡創造最大價值，並且他們正在與潛在客戶一起管理組合。所以有三個關鍵組成部分，並且對這三個組成部分給予了極大關注。

Thank you. All right, we have a question from Bill Anderson at Bard Associates. And he asked, is lightweight cat litter still gaining share? And I'm going to have Laura Shilan answer that one. Sure.

謝謝。好的，我們有一個來自 Bard Associates 的 Bill Anderson 的問題。他還問道，輕質貓砂的市佔率是否還在成長？我將讓勞拉·希蘭 (Laura Shilan) 來回答這個問題。當然。

Hi Bill, thanks for the question. On the lightweight cat litter, we're really pleased that the lightweight segment is growing. There's some new products and a lot of promo activity and which is really helping the segment grow. Our share has declined slightly, excuse me, but a little chip in the short time out of our share is good for our long-term strategy of growing the segment, I think as Chris kind of explained during our annual meeting presentation.

你好，比爾，謝謝你的提問。就輕質貓砂而言，我們非常高興看到輕質貓砂市場正在成長。有一些新產品和大量促銷活動，確實有助於該領域的成長。我們的份額略有下降，對不起，但短時間內份額略有下降對我們擴大該領域的長期戰略是有利的，我認為正如克里斯在我們的年度會議演示中所解釋的那樣。

We'd always prefer to have a slightly smaller share of a larger pie, and as we see the lightweight segment growing, it's a great opportunity for both our branded and private label products and feel great about the fundamentals of our clay business.

我們始終希望在更大的市場中佔有較小的份額，而且隨著輕量級細分市場的不斷增長，這對於我們的品牌產品和自有品牌產品來說都是一個很好的機會，我們對我們的粘土業務的基本面感到非常滿意。

Great. Next question is from John Baer. You noted strategic investment in data analytics. Can you elaborate on what that means? For example, are those expenditures internal for AI applications or alternatively engaging third parties in those efforts? Susan?

偉大的。下一個問題來自約翰·貝爾。您提到了對數據分析的策略性投資。能詳細說明一下這是什麼意思嗎？例如，這些支出是用於人工智慧應用的內部支出，還是讓第三方參與這些工作？蘇珊？

Absolutely. Thanks for the question, John. And you heard Dan talk a little bit about this at the beginning as we evolve our game of mighty ball, as we call it here at Oil Dry. We realize that there's more value if we can turn data into dollars. And so what that looks like is a multi-year effort that has really kicked off in earnest here in fiscal 2025. It involves investments in people and skill sets and involves investments in platforms and investments in tools that make it easy to mine the data.

絕對地。謝謝你的提問，約翰。我們在 Oil Dry 公司改進了我們的強力球 (mighty ball) 遊戲，你們一開始就聽到丹談到了這一點。我們意識到如果能夠將數據轉化為美元，那麼將會帶來更大的價值。這看起來是一項多年的努力，並於 2025 財年真正正式啟動。它涉及對人力和技能的投資，也涉及對平台的投資以及對易於挖掘數據的工具的投資。

To your question about internal versus external, it's actually made up of both of those components. We are adding a new leader of data analytics to our company starting next week actually. So excited about that but we also use third party offshoring to help build out some of what we're doing here. So it's a combination that will. Move across fiscal '25 and fiscal '26.

對於您關於內部與外部的問題，它實際上是由這兩個部分組成的。實際上，從下週開始我們將為公司增添一位新的數據分析主管。我們對此感到非常興奮，但我們也使用第三方離岸外包來幫助完成我們在這裡所做的一些工作。因此，這是一個可行的組合。跨越 25 財年和 26 財年。

Great. Okay, Susan, I'm actually going to have you answer the next question from John Beer. What are you seeing as far as customer payment trends for your accounts receivable? Do you see any slowdown or stress on customers to pay as expected, any easing of reorder volumes by customers?

偉大的。好的，蘇珊，我實際上要讓你回答約翰比爾的下一個問題。就您的應收帳款客戶付款趨勢而言，您看到什麼？您是否發現客戶以預期付款的速度有所放緩或壓力，客戶的重新訂購量是否有所減少？

So I do see a shift in our trends in that as we sell more in in certain businesses, especially those outside the US, as they become a bigger part of our portfolio, our day sales outstanding tend to be a bit higher. But if I turn that on its head and say, well, what about our percent current. That is actually as strong as it's been and that continues to trend even more favorably. So no, I don't see any stress, just a change in the actual overall trend. Great.

因此，我確實看到了我們的趨勢發生了變化，隨著我們在某些​​業務中的銷售增加，特別是美國以外的業務，隨著它們成為我們投資組合中更大的一部分，我們的應收日銷售額往往會更高一些。但如果我反過來想，那麼我們的電流百分比又如何呢？事實上，這一表現和以往一樣強勁，並且持續呈現更有利的趨勢。所以，我沒有看到任何壓力，只是實際整體趨勢改變了。偉大的。

Okay. Next one from Tyler Ventura. In a recessionary environment, do you expect your litter brands to take share on consumers trading down in price, or are consumer habits and brand loyalty pretty resilient for the category overall? Laura?

好的。下一個是泰勒·文圖拉 (Tyler Ventura)。在經濟衰退的環境下，您是否預期您的貓砂品牌能夠在降價消費者中佔有一席之地，或者消費者習慣和品牌忠誠度對於整個貓砂類別而言是否具有很強的彈性？勞拉？

Sure, Tyler, thanks for the question. We don't see the trend in the trade down of brands, but we see the trade down in channels, which is where our products perform really well. As Chris mentioned, we kind of always are focused on our value proposition for consumers. And our branded and private label products are well poised in the value channels, to set us up for success in our special environment.

當然，泰勒，謝謝你的提問。我們沒有看到品牌消費降級的趨勢，但我們看到通路消費降級，而這正是我們的產品表現非常好的領域。正如克里斯所提到的，我們始終專注於我們為消費者提供的價值主張。我們的品牌和自有品牌產品在價值管道中佔據有利地位，為我們在特殊環境中取得成功奠定了基礎。

Great. Okay, we have time for one last question, and this is again from Tyler Ventura. How large, -- sorry, let me go back. The food purification business is benefiting from new renewable diesel plants in North America. How large is this market opportunity and what competitive advantages does Oil-Dri possess in this space and what investments might be needed to fully capitalize on this growth?

偉大的。好的，我們還有時間問最後一個問題，這個問題再次來自泰勒文圖拉 (Tyler Ventura)。多大啊——抱歉，讓我回去吧。食品淨化業務受益於北美新的再生柴油工廠。這個市場機會有多大，Oil-Dri 在這個領域擁有哪些競爭優勢，以及可能需要哪些投資才能充分利用這個成長？

Thank you for the question, Tyler. This market will continue to grow over the next 3 to 5 years as more plants come on. You'll also see some business, I think, in Latin America will start to get into this market later in '26 and '27. Our unique mineral really efficiently removes metals and contaminants that the customer wants removed to protect downstream catalyst beds.

謝謝你的提問，泰勒。隨著更多工廠的建成，未來 3 至 5 年該市場將持續成長。我認為，您還會看到拉丁美洲的一些企業將在26年和27年開始進入這個市場。我們獨特的礦物確實能有效去除客戶想要去除的金屬和污染物，以保護下游的催化劑床。

And in addition, we've built capacity to take advantage of the future growth. So right now as we sit today, we're in a very good place and if the market continues to grow in three to five years, we may have to look at expanding our operation, but at this point we're in a very good position to service the market.

此外，我們也建立了利用未來成長的能力。所以現在我們處於一個非常好的位置，如果市場在三到五年內繼續成長，我們可能必須考慮擴大我們的業務，但目前我們處於一個非常好的位置來服務市場。

And I'll just add to that because I can't help myself because of some recent investments that Aaron and his team have made.

我只是想補充一點，因為 Aaron 和他的團隊最近進行了一些投資，我忍不住要補充一點。

Yes, we prepared for this market.

是的，我們為這個市場做好了準備。

Okay. So we are out of time. Dan, do you want to conclude with any last-minute remarks?

好的。所以我們已經沒有時間了。丹，你想最後做點什麼評論嗎？

No, just again, the team is functioning at a very high level. It was great for me to sit back and listen to you guys’ field all the questions. I am Mr. Irrelevant just call me Brock Purdy if you want. Those who sports fans will know what I'm talking about. So great job team. Great job Oil-Drian. Thank you, our long-term shareholders, and we will be back at you in another 90 days. So be well, thanks.

不，再說一遍，球隊的運作水準非常高。我很高興能坐下來聽你們回答所有的問題。我是“無關先生”，如果你願意的話，就叫我布洛克·普爾迪吧。那些體育迷就會知道我在說什麼。團隊做得太棒了。Oil-Drian 幹得好。謝謝我們的長期股東，90天後我們將再次回來。所以祝你一切順利，謝謝。

This concludes today's conference call. Thank you for participating and you may now disconnect. Everyone, have a great day.

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。祝大家有個愉快的一天。