x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended April 30, 2018 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to ______________ |
Delaware (State or other jurisdiction of incorporation or organization) | 36-2048898 (I.R.S. Employer Identification No.) | |
410 North Michigan Avenue, Suite 400 Chicago, Illinois (Address of principal executive offices) | 60611-4213 (Zip Code) |
Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o |
PART I – FINANCIAL INFORMATION | ||
Page | ||
Item 1: | ||
Item 2: | ||
Item 3: | ||
Item 4: | ||
PART II – OTHER INFORMATION | ||
Item 1: | ||
Item 4: | ||
Item 6: | ||
(unaudited) | |||||||
ASSETS | April 30, 2018 | July 31, 2017 | |||||
Current Assets | |||||||
Cash and cash equivalents | $ | 10,613 | $ | 9,095 | |||
Short-term investments | 14,297 | 23,576 | |||||
Accounts receivable, less allowance of $931 and $748 at April 30, 2018 and July 31, 2017, respectively | 32,566 | 32,750 | |||||
Inventories | 23,415 | 22,615 | |||||
Prepaid repairs expense | 3,839 | 3,890 | |||||
Prepaid expenses and other assets | 2,402 | 2,304 | |||||
Total Current Assets | 87,132 | 94,230 | |||||
Property, Plant and Equipment | |||||||
Cost | 232,678 | 224,444 | |||||
Less accumulated depreciation and amortization | (147,871 | ) | (140,411 | ) | |||
Total Property, Plant and Equipment, Net | 84,807 | 84,033 | |||||
Other Assets | |||||||
Goodwill | 9,034 | 9,034 | |||||
Trademarks and patents, net of accumulated amortization of $259 and $238 at April 30, 2018 and July 31, 2017, respectively | 1,306 | 1,223 | |||||
Customer list, net of accumulated amortization of $5,305 and $4,601 at April 30, 2018 and July 31, 2017, respectively | 2,480 | 3,184 | |||||
Deferred income taxes | 8,272 | 14,396 | |||||
Other | 4,979 | 6,475 | |||||
Total Other Assets | 26,071 | 34,312 | |||||
Total Assets | $ | 198,010 | $ | 212,575 |
(unaudited) | |||||||
LIABILITIES & STOCKHOLDERS’ EQUITY | April 30, 2018 | July 31, 2017 | |||||
Current Liabilities | |||||||
Current maturities of notes payable | $ | 3,083 | $ | 3,083 | |||
Short-term borrowing | 6,000 | — | |||||
Accounts payable | 7,747 | 9,594 | |||||
Dividends payable | 1,559 | 1,553 | |||||
Accrued expenses: | |||||||
Salaries, wages and commissions | 7,886 | 7,917 | |||||
Trade promotions and advertising | 1,052 | 2,253 | |||||
Freight | 1,468 | 1,606 | |||||
Other | 6,924 | 6,948 | |||||
Total Current Liabilities | 35,719 | 32,954 | |||||
Noncurrent Liabilities | |||||||
Notes payable, net of unamortized debt issuance costs of $68 and $89 at April 30, 2018 and July 31, 2017, respectively | 6,099 | 9,161 | |||||
Deferred compensation | 6,266 | 11,537 | |||||
Pension and postretirement benefits | 17,282 | 29,161 | |||||
Other | 3,631 | 3,725 | |||||
Total Noncurrent Liabilities | 33,278 | 53,584 | |||||
Total Liabilities | 68,997 | 86,538 | |||||
Stockholders’ Equity | |||||||
Common Stock, par value $.10 per share, issued 8,050,050 shares at April 30, 2018 and 8,015,166 shares at July 31, 2017 | 805 | 802 | |||||
Class B Stock, par value $.10 per share, issued 2,503,678 shares at April 30, 2018 and 2,513,512 shares at July 31, 2017 | 250 | 251 | |||||
Additional paid-in capital | 38,022 | 36,242 | |||||
Retained earnings | 157,862 | 154,735 | |||||
Accumulated other comprehensive loss: | |||||||
Pension and postretirement benefits | (11,935 | ) | (10,327 | ) | |||
Cumulative translation adjustment | (60 | ) | 35 | ||||
Total accumulated other comprehensive loss | (11,995 | ) | (10,292 | ) | |||
Less Treasury Stock, at cost (2,913,592 Common and 324,741 Class B shares at April 30, 2018 and 2,907,370 Common and 324,741 Class B shares at July 31, 2017) | (55,931 | ) | (55,701 | ) | |||
Total Stockholders’ Equity | 129,013 | 126,037 | |||||
Total Liabilities & Stockholders’ Equity | $ | 198,010 | $ | 212,575 |
(unaudited) | |||||||
For the Nine Months Ended April 30, | |||||||
2018 | 2017 | ||||||
Net Sales | $ | 200,387 | $ | 196,531 | |||
Cost of Sales | (144,035 | ) | (138,900 | ) | |||
Gross Profit | 56,352 | 57,631 | |||||
Selling, General and Administrative Expenses | (44,565 | ) | (45,252 | ) | |||
Income from Operations | 11,787 | 12,379 | |||||
Other Income (Expense) | |||||||
Interest expense | (549 | ) | (722 | ) | |||
Interest income | 199 | 38 | |||||
Other, net | 768 | (4 | ) | ||||
Total Other Income (Expense), Net | 418 | (688 | ) | ||||
Income Before Income Taxes | 12,205 | 11,691 | |||||
Income Tax Expense | (6,666 | ) | (2,221 | ) | |||
Net Income | 5,539 | 9,470 | |||||
Retained Earnings: | |||||||
Balance at beginning of period | 154,735 | 149,945 | |||||
Cash dividends declared and treasury stock issuances | (4,676 | ) | (4,449 | ) | |||
Reclassification to retained earnings upon adoption of accounting standard (a) | $ | 2,264 | $ | — | |||
Balance at End of Period | $ | 157,862 | $ | 154,966 | |||
Net Income Per Share | |||||||
Basic Common | $ | 0.82 | $ | 1.41 | |||
Basic Class B Common | $ | 0.62 | $ | 1.06 | |||
Diluted Common | $ | 0.75 | $ | 1.29 | |||
Average Shares Outstanding | |||||||
Basic Common | 5,032 | 5,015 | |||||
Basic Class B Common | 2,099 | 2,081 | |||||
Diluted Common | 7,217 | 7,151 | |||||
Dividends Declared Per Share | |||||||
Basic Common | $ | 0.6900 | $ | 0.6600 | |||
Basic Class B Common | $ | 0.5175 | $ | 0.4950 |
(unaudited) | |||||||
For the Nine Months Ended April 30, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 5,539 | $ | 9,470 | |||
Other Comprehensive (Loss) Income: | |||||||
Pension and postretirement benefits (net of tax) | (1,608 | ) | 867 | ||||
Cumulative translation adjustment | (95 | ) | (51 | ) | |||
Other Comprehensive (Loss) Income | (1,703 | ) | 816 | ||||
Total Comprehensive Income | $ | 3,836 | $ | 10,286 |
(unaudited) | |||||||
For the Three Months Ended April 30, | |||||||
2018 | 2017 | ||||||
Net Sales | $ | 64,847 | $ | 64,745 | |||
Cost of Sales | (47,104 | ) | (46,964 | ) | |||
Gross Profit | 17,743 | 17,781 | |||||
Selling, General and Administrative Expenses | (14,629 | ) | (14,035 | ) | |||
Income from Operations | 3,114 | 3,746 | |||||
Other Income (Expense) | |||||||
Interest expense | (149 | ) | (233 | ) | |||
Interest income | 80 | 22 | |||||
Other, net | 250 | 233 | |||||
Total Other Income, Net | 181 | 22 | |||||
Income Before Income Taxes | 3,295 | 3,768 | |||||
Income Tax Benefit (Expense) | 290 | (557 | ) | ||||
Net Income | 3,585 | 3,211 | |||||
Net Income Per Share | |||||||
Basic Common | $ | 0.53 | $ | 0.48 | |||
Basic Class B | $ | 0.40 | $ | 0.36 | |||
Diluted Common | $ | 0.48 | $ | 0.44 | |||
Average Shares Outstanding | |||||||
Basic Common | 5,037 | 5,022 | |||||
Basic Class B | 2,102 | 2,088 | |||||
Diluted Common | 7,222 | 7,164 | |||||
Dividends Declared Per Share | |||||||
Basic Common | $ | 0.2300 | $ | 0.2200 | |||
Basic Class B | $ | 0.1725 | $ | 0.1650 |
(unaudited) | |||||||
For the Three Months Ended April 30, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 3,585 | $ | 3,211 | |||
Other Comprehensive (Loss) Income: | |||||||
Pension and postretirement benefits (net of tax) | (2,026 | ) | 289 | ||||
Cumulative translation adjustment | (165 | ) | (100 | ) | |||
Other Comprehensive (Loss) Income | (2,191 | ) | 189 | ||||
Total Comprehensive Income | $ | 1,394 | $ | 3,400 |
(unaudited) | |||||||
For the Nine Months Ended April 30, | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | 2018 | 2017 | |||||
Net Income | $ | 5,539 | $ | 9,470 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 9,577 | 9,553 | |||||
Amortization of investment net discount | (96 | ) | (16 | ) | |||
Stock-based compensation | 1,172 | 1,137 | |||||
Excess tax benefits for share-based payments | — | (228 | ) | ||||
Deferred income taxes | 6,242 | 531 | |||||
Provision for bad debts and cash discounts | 185 | 32 | |||||
Loss on the sale of fixed assets | 34 | 292 | |||||
Life insurance benefits | (340 | ) | — | ||||
(Increase) Decrease in assets: | |||||||
Accounts receivable | 35 | (1,665 | ) | ||||
Inventories | (783 | ) | (617 | ) | |||
Prepaid expenses | (42 | ) | (1,171 | ) | |||
Other assets | (32 | ) | (669 | ) | |||
Increase (Decrease) in liabilities: | |||||||
Accounts payable | (888 | ) | 1,848 | ||||
Accrued expenses | (1,198 | ) | 627 | ||||
Deferred compensation | (5,272 | ) | 518 | ||||
Pension and postretirement benefits | (11,223 | ) | 1,133 | ||||
Other liabilities | (121 | ) | 258 | ||||
Total Adjustments | (2,750 | ) | 11,563 | ||||
Net Cash Provided by Operating Activities | 2,789 | 21,033 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Capital expenditures | (10,533 | ) | (10,418 | ) | |||
Proceeds from sale of property, plant and equipment | 19 | 60 | |||||
Purchases of short-term investments | (29,035 | ) | (33,006 | ) | |||
Dispositions of short-term investments | 38,410 | 24,506 | |||||
Proceeds from life insurance | 1,747 | — | |||||
Net Cash Provided by (Used in) Investing Activities | 608 | (18,858 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Principal payments on notes payable | (3,083 | ) | (3,083 | ) | |||
Dividends paid | (4,671 | ) | (4,441 | ) | |||
Purchase of treasury stock | (27 | ) | (135 | ) | |||
Proceeds from issuance of common stock | — | 170 | |||||
Proceeds from short-term borrowing | 6,000 | — | |||||
Excess tax benefits for share-based payments | — | 228 | |||||
Net Cash Used in Financing Activities | (1,781 | ) | (7,261 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (98 | ) | 60 | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | 1,518 | (5,026 | ) | ||||
Cash and Cash Equivalents, Beginning of Period | 9,095 | 18,629 | |||||
Cash and Cash Equivalents, End of Period | $ | 10,613 | $ | 13,603 |
(unaudited) | |||||||
For the Nine Months Ended April 30, | |||||||
2018 | 2017 | ||||||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Capital expenditures accrued, but not paid | $ | 688 | $ | 554 | |||
Cash dividends declared and accrued, but not paid | $ | 1,559 | $ | 1,485 |
April 30, 2018 | July 31, 2017 | ||||||
Finished goods | $ | 15,133 | $ | 14,704 | |||
Packaging | 5,693 | 4,988 | |||||
Other | 2,589 | 2,923 | |||||
Total Inventories | $ | 23,415 | $ | 22,615 |
2019 | $ | 835 | |
2020 | $ | 666 | |
2021 | $ | 479 | |
2022 | $ | 332 | |
2023 | $ | 200 |
Pension Benefits | |||||||||||||||
(in thousands) | |||||||||||||||
For the Three Months Ended April 30, | For the Nine Months Ended April 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Service cost | $ | 431 | $ | 456 | $ | 1,293 | $ | 1,369 | |||||||
Interest cost | 503 | 465 | 1,517 | 1,396 | |||||||||||
Expected return on plan assets | (656 | ) | (443 | ) | (1,627 | ) | (1,330 | ) | |||||||
Amortization of: | |||||||||||||||
Prior service costs | 1 | 1 | 2 | 2 | |||||||||||
Other actuarial loss | 314 | 457 | 955 | 1,371 | |||||||||||
Net periodic benefit cost | $ | 593 | $ | 936 | $ | 2,140 | $ | 2,808 | |||||||
Postretirement Health Benefits | |||||||||||||||
(in thousands) | |||||||||||||||
For the Three Months Ended April 30, | For the Nine Months Ended April 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Service cost | $ | 26 | $ | 31 | $ | 80 | $ | 94 | |||||||
Interest cost | 20 | 20 | 63 | 59 | |||||||||||
Amortization of: | |||||||||||||||
Prior service costs | (2 | ) | (2 | ) | (5 | ) | (5 | ) | |||||||
Other actuarial (gain) loss | — | 11 | — | 31 | |||||||||||
Net periodic benefit cost | $ | 44 | $ | 60 | $ | 138 | $ | 179 |
Pension Benefits | Postretirement Health Benefits | ||||||||||
For the Three and Nine Months Ended April 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Discount rate for net periodic benefit cost | 3.75 | % | 3.36 | % | 3.26 | % | 2.71 | % | |||
Rate of increase in compensation levels | 3.50 | % | 3.50 | % | — | — | |||||
Long-term expected rate of return on assets | 7.00 | % | 7.00 | % | — | — |
Assets | |||||||||||||||
April 30, 2018 | July 31, 2017 | ||||||||||||||
(in thousands) | |||||||||||||||
Business to Business Products | $ | 61,134 | $ | 65,337 | |||||||||||
Retail and Wholesale Products | 90,065 | 90,508 | |||||||||||||
Unallocated Assets | 46,811 | 56,730 | |||||||||||||
Total Assets | $ | 198,010 | $ | 212,575 | |||||||||||
For the Nine Months Ended April 30, | |||||||||||||||
Net Sales | Income | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Business to Business Products | $ | 79,226 | $ | 74,893 | $ | 26,191 | $ | 25,033 | |||||||
Retail and Wholesale Products | 121,161 | 121,638 | 7,010 | 5,996 | |||||||||||
Total Sales | $ | 200,387 | $ | 196,531 | |||||||||||
Corporate Expenses | (21,414 | ) | (18,650 | ) | |||||||||||
Income from Operations | 11,787 | 12,379 | |||||||||||||
Total Other Income (Expense), Net | 418 | (688 | ) | ||||||||||||
Income before Income Taxes | 12,205 | 11,691 | |||||||||||||
Income Tax Expense | (6,666 | ) | (2,221 | ) | |||||||||||
Net Income | $ | 5,539 | $ | 9,470 |
For the Three Months Ended April 30, | |||||||||||||||
Net Sales | Income (Loss) | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Business to Business Products | $ | 24,784 | $ | 24,159 | $ | 7,556 | $ | 7,810 | |||||||
Retail and Wholesale Products | 40,063 | 40,586 | 2,223 | 1,516 | |||||||||||
Total Sales | $ | 64,847 | $ | 64,745 | |||||||||||
Corporate Expenses | (6,665 | ) | (5,580 | ) | |||||||||||
Income from Operations | 3,114 | 3,746 | |||||||||||||
Total Other Income, Net | 181 | 22 | |||||||||||||
Income before Income Taxes | 3,295 | 3,768 | |||||||||||||
Income Tax Benefit (Expense) | 290 | (557 | ) | ||||||||||||
Net Income | $ | 3,585 | $ | 3,211 |
Restricted Shares (in thousands) | Weighted Average Grant Date Fair Value | |||||
Non-vested restricted stock outstanding at July 31, 2017 | 185 | $ | 30.96 | |||
Granted | 25 | $ | 42.58 | |||
Vested | (28 | ) | $ | 29.88 | ||
Forfeitures | (6 | ) | $ | 36.41 | ||
Non-vested restricted stock outstanding at April 30, 2018 | 176 | $ | 32.62 |
Pension and Postretirement Health Benefits | Cumulative Translation Adjustment | Total Accumulated Other Comprehensive (Loss) Income | |||||||||
Balance as of July 31, 2017 | $ | (10,327 | ) | $ | 35 | $ | (10,292 | ) | |||
Other comprehensive income before reclassifications, net of tax | — | (95 | ) | (95 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | 656 | (a) | — | 656 | |||||||
Reclassification to retained earnings upon adoption of accounting standard | $ | (2,264 | ) | (b) | $ | — | $ | (2,264 | ) | ||
Net current-period other comprehensive income, net of tax | (1,608 | ) | (95 | ) | (1,703 | ) | |||||
Balance as of April 30, 2018 | $ | (11,935 | ) | $ | (60 | ) | $ | (11,995 | ) |
For the Nine Months Ended April 30, | |||||||
2018 | 2017 | ||||||
Net cash provided by operating activities | $ | 2,789 | $ | 21,033 | |||
Net cash provided by (used in) investing activities | 608 | (18,858 | ) | ||||
Net cash used in financing activities | (1,781 | ) | (7,261 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (98 | ) | 60 | ||||
Net increase (decrease) in cash and cash equivalents | $ | 1,518 | $ | (5,026 | ) |
Payments Due by Period | |||||||||||||||||||
Contractual Obligations | Total | Less Than 1 Year | 1 – 3 Years | 4 – 5 Years | After 5 Years | ||||||||||||||
Notes Payable | $ | 9,250 | $ | 3,083 | $ | 6,167 | $ | — | $ | — | |||||||||
Interest on Notes Payable | 549 | 305 | 244 | — | — | ||||||||||||||
Operating Leases | 15,606 | 2,149 | 3,229 | 2,218 | 8,010 | ||||||||||||||
Total Contractual Cash Obligations | $ | 25,405 | $ | 5,537 | $ | 9,640 | $ | 2,218 | $ | 8,010 |
Amount of Commitment Expiration Per Period | |||||||||||||||||||
Total | Less Than 1 Year | 1 – 3 Years | 4 – 5 Years | After 5 Years | |||||||||||||||
Other Commercial Commitments | $ | 30,500 | $ | 30,500 | $ | — | $ | — | $ | — |
Exhibit No. | Description | SEC Document Reference | ||
11 | Filed herewith. | |||
31 | Filed herewith. | |||
32 | Furnished herewith. | |||
95 | Filed herewith. | |||
101.INS | XBRL Taxonomy Instance Document | Filed herewith. | ||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith. | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith. | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith. | ||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | Filed herewith. | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | Filed herewith. |
Exhibit No. | Description | ||
11 | |||
31 | |||
32 | |||
95 | |||
101.INS | XBRL Taxonomy Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
For the Three Months Ended April 30, | For the Nine Months Ended April 30, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Net income available to stockholders | $ | 3,585 | $ | 3,211 | $ | 5,539 | $ | 9,470 | |||||
Less: Distributed and undistributed earnings allocated to non-vested restricted stock | (84 | ) | (76 | ) | (130 | ) | (222 | ) | |||||
Earnings available to common shareholders | $ | 3,501 | $ | 3,135 | $ | 5,409 | $ | 9,248 | |||||
Shares Calculation | |||||||||||||
Average shares outstanding - Basic Common | 5,037 | 5,022 | 5,032 | 5,015 | |||||||||
Average shares outstanding - Basic Class B Common | 2,102 | 2,088 | 2,099 | 2,081 | |||||||||
Potential Common Stock relating to stock options and non-vested restricted stock | 83 | 54 | 86 | 55 | |||||||||
Average shares outstanding - Assuming dilution | 7,222 | 7,164 | 7,217 | 7,151 | |||||||||
Net Income Per Share: Basic Common | $ | 0.53 | $ | 0.48 | $ | 0.82 | $ | 1.41 | |||||
Net Income Per Share: Basic Class B Common | $ | 0.40 | $ | 0.36 | $ | 0.62 | $ | 1.06 | |||||
Net Income Per Share: Diluted Common | $ | 0.48 | $ | 0.44 | $ | 0.75 | $ | 1.29 |
I. | I, Daniel S. Jaffee, certify that: |
1. | I have reviewed this quarterly report on Form 10-Q of Oil-Dri Corporation of America (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | June 8, 2018 |
By: | /s/ Daniel S. Jaffee |
Daniel S. Jaffee Chairman, President and Chief Executive Officer |
I. | I, Daniel T. Smith, certify that: |
1. | I have reviewed this quarterly report on Form 10-Q of Oil-Dri Corporation of America (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | June 8, 2018 |
By: | /s/ Daniel T. Smith |
Daniel T. Smith Vice President and Chief Financial Officer |
Dated: | June 8, 2018 |
/s/ Daniel S. Jaffee | |
Name: Daniel S. Jaffee Title: Chairman, President and Chief Executive Officer |
Dated: | June 8, 2018 |
/s/ Daniel T. Smith | |
Name: Daniel T. Smith Title: Vice President and Chief Financial Officer |
Legal Actions | |||||||||
Mine location | Section 104 “Significant and Substantial” Violations | Section 104(b) Orders | Section 104(d) Citations and Orders | Section 110(b)(2)Flagrant Violations | Section 107(a) Imminent Danger Orders | Total Dollar Value of Proposed MSHA Assessments | Pending as of Last Day of Period | Initiated During Period | Resolved During Period |
(#) | (#) | (#) | (#) | (#) | ($) | (#) | (#) | (#) | |
Ochlocknee, Georgia | 1 | — | — | — | — | 1,210 | — | — | — |
Ripley, Mississippi | — | — | — | — | — | — | 2 | — | — |
Mounds, Illinois | 1 | — | — | — | — | 1,993 | — | — | — |
Blue Mountain, Mississippi | — | — | — | — | — | — | — | — | — |
Taft, California | 4 | — | — | — | — | 15,076 | — | — | — |
Document and Entity Information |
9 Months Ended |
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Apr. 30, 2018
shares
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Entity Information | |
Entity Registrant Name | Oil-Dri Corp of America |
Entity Central Index Key | 0000074046 |
Current Fiscal Year End Date | --07-31 |
Entity Filer Category | Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Apr. 30, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Common Stock | |
Entity Information | |
Entity Common Stock, Shares Outstanding | 5,136,458 |
Common Class B | |
Entity Information | |
Entity Common Stock, Shares Outstanding | 2,178,937 |
Condensed Consolidated Balance Sheet Parenthetical - USD ($) $ in Thousands |
Apr. 30, 2018 |
Jul. 31, 2017 |
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Current Assets | ||
Allowance for doubtful accounts | $ 931 | $ 748 |
Other Assets | ||
Accumulated amortization of trademarks and patents | 259 | 238 |
Accumulated amortization of customer lists | 5,305 | 4,601 |
Noncurrent Liabilities | ||
Net unamortized debt issuance costs | $ 68 | $ 89 |
Common Stock | ||
Stockholder's Equity | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares issued | 8,050,050 | 8,015,166 |
Treasury stock, common shares | 2,913,592 | 2,907,370 |
Common Class B | ||
Stockholder's Equity | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares issued | 2,503,678 | 2,513,512 |
Treasury stock, common shares | 324,741 | 324,741 |
Condensed Consolidated Statements of Income and Retained Earnings - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
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Apr. 30, 2018 |
Apr. 30, 2017 |
Apr. 30, 2018 |
Apr. 30, 2017 |
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Net Sales | $ 64,847 | $ 64,745 | $ 200,387 | $ 196,531 | ||
Cost of Sales | (47,104) | (46,964) | (144,035) | (138,900) | ||
Gross Profit | 17,743 | 17,781 | 56,352 | 57,631 | ||
Selling, General and Administrative Expenses | (14,629) | (14,035) | (44,565) | (45,252) | ||
Income from Operations | 3,114 | 3,746 | 11,787 | 12,379 | ||
Other Income (Expense) | ||||||
Interest expense | (149) | (233) | (549) | (722) | ||
Interest income | 80 | 22 | 199 | 38 | ||
Other, net | 250 | 233 | 768 | (4) | ||
Total Other Income (Expense), Net | 181 | 22 | 418 | (688) | ||
Income Before Income Taxes | 3,295 | 3,768 | 12,205 | 11,691 | ||
Income Tax Benefit (Expense) | 290 | (557) | (6,666) | (2,221) | ||
Net Income | 3,585 | 3,211 | 5,539 | 9,470 | ||
Retained Earnings: | ||||||
Balance at beginning of period | 154,735 | 149,945 | ||||
Cash dividends declared and treasury stock issuances | (4,676) | (4,449) | ||||
Reclassification to retained earnings upon adoption of accounting standard | [1] | 2,264 | ||||
Balance at End of Period | $ 157,862 | $ 154,966 | $ 157,862 | $ 154,966 | ||
Net Income Per Share | ||||||
Diluted Common (in dollars per share) | $ 0.48 | $ 0.44 | $ 0.75 | $ 1.29 | ||
Average Shares Outstanding | ||||||
Diluted Common (in shares) | 7,222 | 7,164 | 7,217 | 7,151 | ||
Common Stock | ||||||
Net Income Per Share | ||||||
Basic Common (in dollars per share) | $ 0.53 | $ 0.48 | $ 0.82 | $ 1.41 | ||
Average Shares Outstanding | ||||||
Basic Common (in shares) | 5,037 | 5,022 | 5,032 | 5,015 | ||
Dividends Declared Per Share (in dollars per share) | $ 0.2300 | $ 0.2200 | $ 0.6900 | $ 0.6600 | ||
Common Class B | ||||||
Net Income Per Share | ||||||
Basic Common (in dollars per share) | $ 0.40 | $ 0.36 | $ 0.62 | $ 1.06 | ||
Average Shares Outstanding | ||||||
Basic Common (in shares) | 2,102 | 2,088 | 2,099 | 2,081 | ||
Dividends Declared Per Share (in dollars per share) | $ 0.1725 | $ 0.1650 | $ 0.5175 | $ 0.4950 | ||
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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Apr. 30, 2018 |
Apr. 30, 2017 |
Apr. 30, 2018 |
Apr. 30, 2017 |
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Net Income | $ 3,585 | $ 3,211 | $ 5,539 | $ 9,470 |
Other Comprehensive (Loss) Income: | ||||
Pension and postretirement benefits (net of tax) | 2,026 | (289) | 1,608 | (867) |
Cumulative translation adjustment | (165) | (100) | (95) | (51) |
Other Comprehensive (Loss) Income | (2,191) | 189 | (1,703) | 816 |
Total Comprehensive Income | $ 1,394 | $ 3,400 | $ 3,836 | $ 10,286 |
Basis of Statement Presentation |
9 Months Ended |
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Apr. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Statement Presentation | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in compliance with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The financial statements and the related notes are condensed and should be read in conjunction with the Consolidated Financial Statements and related notes for the fiscal year ended July 31, 2017 included in our Annual Report on Form 10-K filed with the SEC. The unaudited Condensed Consolidated Financial Statements include the accounts of Oil-Dri Corporation of America and its subsidiaries. All significant intercompany transactions are eliminated. Except as otherwise indicated herein or as the context otherwise requires, references to “Oil-Dri,” the “Company,” “we,” “us” or “our” refer to Oil-Dri Corporation of America and its subsidiaries. The unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal recurring accruals and reclassifications which are, in the opinion of management, necessary for a fair presentation of the statements contained herein. In addition, certain prior year reclassifications were made to conform to the current year presentation. Operating results for the three and nine months ended April 30, 2018 are not necessarily an indication of the results that may be expected for the fiscal year ending July 31, 2018. Management Use of Estimates The preparation of the unaudited Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period, as well as the related disclosures. See Note 10 for additional discussion regarding tax legislation enacted by the U.S. government in December 2017, the impact of which may affect the estimates and assumptions used to determine the expected future tax consequences of events recognized in our consolidated financial statements. All of our estimates and assumptions are revised periodically. Actual results could differ from these estimates. Summary of Significant Accounting Policies Except as described herein, our significant accounting policies, which are detailed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2017, have not materially changed. However, the unaudited Condensed Consolidated Financial Statements reflect changes required upon adoption of new accounting guidance, as described in Note 2, and the effects of changes from recent U.S. tax legislation, as described in Note 10. The following is a description of certain of our significant accounting policies. Revenue Recognition. We recognize revenue when risk of loss and title are transferred under the terms of our sales agreements with customers at a fixed and determinable price and collection of payment is probable. Trade promotion reserves are provided for sales incentives made directly to consumers, such as coupons, and sales incentives made to customers, such as slotting, discounts based on sales volume, cooperative marketing programs and other arrangements. Such trade promotion costs are netted against sales. Sales returns and allowances are not material. Selling, General and Administrative Expenses. Selling, general and administrative expenses include salaries, wages and benefits associated with staff outside the manufacturing and distribution functions, all marketing related costs, any miscellaneous trade spending expenses not required to be included in net sales, research and development costs, depreciation and amortization related to assets outside the manufacturing and distribution process and all other non-manufacturing and non-distribution expenses. Trade Receivables. We record an allowance for doubtful accounts based on our historical experience and a periodic review of our accounts receivable, including a review of the overall aging of accounts, consideration of customer credit risk and analysis of facts and circumstances about specific customer accounts. A customer account is determined to be uncollectible when it is probable that a loss will be incurred after we have completed our internal collection procedures, including termination of shipments, direct customer contact and formal demand of payment. Overburden Removal and Mining Costs. We mine sorbent materials on property that we either own or lease as part of our overall operations. A significant part of our overall mining cost is incurred during the process of removing the overburden (non-usable material) from the mine site, thus exposing the sorbent material used in a majority of our production processes. These stripping costs are treated as a variable inventory production cost and are included in cost of sales in the period they are incurred. We defer and amortize the pre-production overburden removal costs associated with opening a new mine. Additionally, it is our policy to capitalize the purchase cost of land and mineral rights, including associated legal fees, survey fees and real estate fees. The costs of obtaining mineral patents, including legal fees and drilling expenses, are also capitalized. Pre-production development costs on new mines and any prepaid royalties that may be offset against future royalties due upon extraction of the minerals are also capitalized. All exploration related costs are expensed as incurred. We perform ongoing reclamation activities during the normal course of our overburden removal. As overburden is removed from a mine site, it is hauled to previously mined sites and is used to refill older sites. This process allows us to continuously reclaim older mine sites and dispose of overburden simultaneously, therefore minimizing the costs associated with the reclamation process. |
New Accounting Pronouncements |
9 Months Ended |
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Apr. 30, 2018 | |
NEW ACCOUNTING PRONOUNCEMENTS [Abstract] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS AND REGULATIONS Recently Issued Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, which establishes a single comprehensive revenue recognition model for all contracts with customers and will supersede most existing revenue guidance. This guidance was subsequently amended several times to further clarify the principles for recognizing revenue. The guidance requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange. Oil-Dri's revenue is generated from the sale of finished goods to customers. Those sales predominantly contain a single delivery obligation. Under Oil-Dri's current accounting policy, revenue is recognized at a single point in time when ownership, risks and rewards transfer. We are currently in the process of performing a comprehensive evaluation of the revenue requirements, including the impact on how we record certain incentives and advertising arrangements, as well as significant new disclosure requirements. We plan to adopt the standard at the beginning of our first quarter of fiscal year 2019. Transition options to implement this guidance include either a full or modified retrospective approach and early adoption is permitted. We expect to use the modified retrospective implementation method. In January 2016, the FASB issued guidance under ASC 825, Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The provisions relevant to us at this time require the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, as well as eliminates the requirement to disclose the method and significant assumptions used to estimate the fair value in such disclosure. This guidance is effective for our first quarter of fiscal year 2019 and early adoption is generally not permitted. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements. In February 2016, the FASB issued guidance under ASC 842, Leases, which provides that, for leases with a term greater than 12 months, a lessee must recognize in the statement of financial position both a liability to make lease payments and an asset representing its right to use the underlying asset. Other requirements describe expense recognition, as well as financial statement presentation and disclosure. This guidance is effective for our first quarter of fiscal year 2020 using a modified retrospective approach, which includes a number of optional practical expedients. Early adoption is permitted. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements. In June 2016, the FASB issued guidance under ASC 326, Financial Instruments-Credit Losses, which requires companies to utilize an impairment model for most financial assets measured at amortized cost and certain other financial instruments, which include trade and other receivables, loans and held-to-maturity debt securities, to record an allowance for credit risk based on expected losses rather than incurred losses. In addition, this new guidance changes the recognition method for credit losses on available-for-sale debt securities, which can occur as a result of market and credit risk, as well as additional disclosures. In general, this guidance will require modified retrospective adoption for all outstanding instruments that fall under this guidance. This guidance is effective for our first quarter of fiscal year 2021. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements. In March 2017, the FASB issued guidance under ASC 715, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires presenting the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. This standard also requires that other components of the net periodic benefit cost be presented separately from the line item(s) that includes service costs and outside of any subtotal of operating income, if one is presented, on a retrospective basis. Additionally, the new guidance limits the components that are eligible for capitalization in assets to only the service cost component. The new guidance is effective for our first quarter of fiscal year 2019, with early adoption permitted. We are currently evaluating the impact of the adoption of this requirement on our Consolidated Financial Statements. There have been no other accounting pronouncements issued but not yet adopted by us which are expected to have a material impact on our Consolidated Financial Statements. Recently Adopted Pronouncements In the first quarter of fiscal year 2018, we adopted the FASB guidance under ASC 718, Compensation-Stock Compensation that simplified several aspects of the accounting for share-based payment transactions, including accounting for income taxes and classification of excess tax benefits in the statement of cash flows. As a result of implementing this guidance, we recognized $9,000 and $166,000 of excess tax benefits as a reduction of income tax expense for the third quarter and first nine months of fiscal year 2018, respectively, rather than in Stockholders' Equity on the unaudited Condensed Consolidated Balance Sheet, and classified in operating activities on the unaudited Condensed Consolidated Statements of Cash Flows. These changes have been applied prospectively in accordance with the guidance and prior period presentations have not been adjusted. The adoption resulted in approximately a 0% and 1% benefit to our effective tax rate for the third quarter and first nine months of fiscal year 2018, respectively. In addition, we excluded the excess tax benefits from the assumed proceeds available to repurchase shares under the treasury stock method for the computation of diluted earnings per share. This change did not have a material impact on our diluted earnings per share for the third quarter or first nine months of fiscal year 2018. The guidance allows for a policy election to either use estimated forfeitures or account for them as they occur to determine the amount of compensation cost to be recognized each period. We have elected to continue to account for forfeitures on an estimated basis. No other material changes resulted from the adoption of this standard. In the first quarter of fiscal year 2018, we adopted the FASB guidance under ASC 740, Balance Sheet Classification of Deferred Taxes, which required deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. Prior periods presented were also restated. We reclassified $2,787,000 from Total Current Assets to Total Other Assets on the unaudited Condensed Consolidated Balance Sheet as of July 31, 2017. In the first quarter of fiscal year 2018, we adopted the FASB guidance under ASC 330, Simplifying the Measurement of Inventory. The new guidance required inventory to be measured at the lower of cost and net realizable value, which is defined as the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. Adoption of this guidance did not have a material impact on our unaudited Condensed Consolidated Financial Statements. In the third quarter of fiscal year 2018, we early adopted the FASB guidance under ASC 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Current U.S. GAAP requires deferred tax liabilities and assets to be adjusted for a change in tax laws or rates with the effect included in income from continuing operations, even when the deferred taxes being remeasured were established through other comprehensive income. As a result, a disproportionate tax effect may remain in accumulated other comprehensive income. The new guidance under ASC 220 provided an option to reclassify from accumulated other comprehensive income to retained earnings the stranded tax effects that resulted from the Tax Cuts and Jobs Act (the “2017 Tax Act”), which was enacted on December 22, 2017. Upon adoption of the guidance, we reclassified $2,264,000 from accumulated other comprehensive income to retained earnings on the unaudited Condensed Consolidated Balance Sheet as of April 30, 2018. See Notes 9 and 10 for further information about our accumulated other comprehensive income and about the impact of the 2017 Tax Act, respectively. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES The composition of inventories is as follows (in thousands):
Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Inventory costs include the cost of raw materials, packaging supplies, labor and other overhead costs. We performed a detailed review of our inventory items to determine if an obsolescence reserve adjustment was necessary. The review surveyed all of our operating facilities and sales groups to ensure that both historical issues and new market trends were considered. The obsolescence reserve not only considered specific items, but also took into consideration the overall value of the inventory as of the balance sheet date. The inventory obsolescence reserve values at April 30, 2018 and July 31, 2017 were $1,136,000 and $619,000, respectively. The reserve increased due to higher levels of discontinued, slow moving and unsaleable inventory. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized into categories based on the lowest level of input that is significant to the fair value measurement. The categories in the fair value hierarchy are as follows: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs for similar assets or liabilities or valuation models whose inputs are observable, directly or indirectly. Level 3: Unobservable inputs. Cash equivalents of $4,248,000 and $3,814,000 as of April 30, 2018 and July 31, 2017, respectively, were classified as Level 1. These cash instruments are primarily money market mutual funds and are included in cash and cash equivalents on the unaudited Condensed Consolidated Balance Sheet. Short-term investments included U.S. Treasury securities and certificates of deposit. We intend and have the ability to hold our short-term investments to maturity; therefore, these investments were reported at amortized cost, which approximated fair value as of April 30, 2018 and July 31, 2017. Balances of accounts receivable and accounts payable approximated their fair values at April 30, 2018 and July 31, 2017 due to the short maturity and nature of those balances. Short-term borrowings of $6,000,000 in the third quarter of fiscal year 2018 are anticipated to be repaid in the fourth quarter of this year. These borrowings were reported at face amount, which approximated their fair value at April 30, 2018, due to the short maturity period. Notes payable are reported at the face amount of future maturities. The estimated fair value of notes payable, including current maturities, was $9,491,000 and $13,001,000 as of April 30, 2018 and July 31, 2017, respectively. Our debt does not trade on a daily basis in an active market, therefore the fair value estimate is based on market observable borrowing rates currently available for debt with similar terms and average maturities and is classified as Level 2. We apply fair value techniques on at least an annual basis associated with: (1) valuing potential impairment loss related to goodwill, trademarks and other indefinite-lived intangible assets and (2) valuing potential impairment loss related to long-lived assets. See Note 5 for further information about goodwill and other intangible assets. |
Goodwill and Other Intangibles (Notes) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Intangible amortization expense was $255,000 and $306,000 in the third quarter of fiscal years 2018 and 2017, respectively. Intangible amortization expense was $762,000 and $918,000 for the first nine months of fiscal years 2018 and 2017, respectively. Estimated intangible amortization for the remainder of fiscal year 2018 is $255,000. Estimated intangible amortization for the next five fiscal years is as follows (in thousands):
We have one acquired trademark recorded at a cost of $376,000 that was determined to have an indefinite life and is not amortized. We performed our annual goodwill impairment analysis in the fourth quarter of fiscal year 2017 and no impairment was identified. There have been no triggering events that would indicate a new impairment analysis is needed. |
Pension and Other Postretirement Benefits |
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Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits Disclosure | PENSION AND OTHER POSTRETIREMENT BENEFITS The components of net periodic pension and postretirement health benefit costs were as follows:
The postretirement health plan is an unfunded plan. We pay insurance premiums and claims from our assets. The pension plan is funded based upon actuarially determined contributions that take into account the amount deductible for income tax purposes, the normal cost and the minimum contribution required and the maximum contribution allowed under applicable regulations. We contributed $12,435,000 and $13,204,000 to our pension plan during the third quarter and first nine months of fiscal year 2018, respectively. In the third quarter of fiscal year 2018, we made an $11,500,000 voluntary contribution in excess of the minimum required contribution. This contribution was made within eight and one-half months after the end of our fiscal year 2017 and therefore was deductible for our 2017 tax year. We received a greater tax benefit for this deduction in our 2017 tax year compared to the the benefit we would have received if the contribution were attributed to our 2018 tax year. See Note 10 for further discussion of the tax rates and other changes enacted by the 2017 Tax Act. This voluntary contribution also improved our funded status and contributed to a lower net periodic benefit expense for the third quarter and first nine months of fiscal year 2018 compared to the same periods in the prior year. We have no minimum funding requirements for the remainder of fiscal year 2018. See Item 3. “Quantitative and Qualitative Disclosures About Market Risk” for a discussion of the potential impact of financial market fluctuations on pension plan assets and future funding contributions. Assumptions used in the previous calculations were as follows:
The medical cost trend assumption for postretirement health benefits was 7.20%. The graded trend rate is expected to decrease to an ultimate rate of 4.50% in fiscal year 2036. |
Operating Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segment Disclosure | OPERATING SEGMENTS We have two operating segments: (1) Retail and Wholesale Products Group and (2) Business to Business Products Group. These operating segments are managed separately and each segment's major customers have different characteristics. The Retail and Wholesale Products Group customers include: mass merchandisers; wholesale clubs; drugstore chains; pet specialty retail outlets; dollar stores; retail grocery stores; distributors of industrial cleanup and automotive products; environmental service companies; and sports field product users. The Business to Business Products Group customers include: processors and refiners of edible oils, petroleum-based oils and biodiesel fuel; manufacturers of animal feed and agricultural chemicals; distributors of animal health and nutrition products; and marketers of consumer products. Our operating segments are also our reportable segments. Net sales and operating income for each segment are provided below. Revenues by product line are not provided because it would be impracticable to do so. The accounting policies of the segments are the same as those described in Note 1 of the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended July 31, 2017. We do not rely on any segment asset allocations and we do not consider them meaningful because of the shared nature of our production facilities; however, we have estimated the segment asset allocations below for those assets for which we can reasonably determine. The unallocated asset category is the remainder of our total assets. The asset allocation is estimated and is not a measure used by our chief operating decision maker about allocating resources to the operating segments or in assessing their performance. The corporate expenses line includes certain unallocated expenses, including primarily salaries, wages and benefits, purchased services, rent, utilities and depreciation and amortization associated with corporate functions such as research and development, information systems, finance, legal, human resources and customer service. Corporate expenses also include the estimated annual incentive plan bonus accrual.
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Stock-Based Compensation |
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Apr. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments | STOCK-BASED COMPENSATION The Oil-Dri Corporation of America 2006 Long Term Incentive Plan (the “2006 Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and cash-based awards. Our employees and outside directors are eligible to receive grants under the 2006 Plan. The total number of shares of stock subject to grants under the 2006 Plan may not exceed 937,500. Stock Options No stock options were granted during the first nine months of either fiscal year 2017 or 2018. There were no stock options outstanding at the end of fiscal year 2017. The amount of cash received from the exercise of stock options during the first nine months of fiscal year 2017 was $170,000 and the related tax benefit was $80,000. Restricted Stock All of our non-vested restricted stock as of April 30, 2018 was issued under the 2006 Plan with vesting periods between two years and five years. We determine the fair value of restricted stock as of the grant date. We recognize the related compensation expense over the period from the date of grant to the date the shares vest. There were 1,000 restricted shares of Common Stock granted during the third quarter of fiscal year 2018. No restricted stock was granted during the third quarter of fiscal year 2017. Stock-based compensation expense related to non-vested restricted stock for the third quarter of fiscal years 2018 and 2017 was $410,000 and $360,000, respectively. Stock-based compensation expense related to non-vested restricted stock for the first nine months of fiscal years 2018 and 2017 was $1,338,000 and $1,137,000, respectively. A summary of restricted stock transactions is shown below:
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Accumulated Other Comprehensive (Loss) Income (Notes) |
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Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (Loss) Income | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The following table summarizes the changes in accumulated other comprehensive (loss) income by component as of April 30, 2018 (in thousands):
(a) Amount is net of tax expense of $296,000. Amount is included in the components of net periodic benefit cost for the pension and postretirement health plans. See Note 6 for further information. (b) In the third quarter of fiscal year 2018, we early adopted guidance under ASC 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This guidance allowed the stranded tax effects resulting from the change in the U.S. federal corporate income tax rate under the 2017 Tax Act to be reclassified from accumulated other comprehensive income to retained earnings. See Note 2 for further information. |
Income Taxes (Notes) |
9 Months Ended |
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Apr. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, the U.S. government enacted the the 2017 Tax Act. The 2017 Tax Act included a number of changes to existing U.S. tax laws that impact us, most notably a reduction of the U.S. corporate income tax rate and acceleration of depreciation for certain assets placed into service after September 27, 2017, as well as prospective changes, including repeal of the domestic manufacturing deduction and capitalization of research and development expenditures. The SEC Staff Accounting Bulletin No. 118 (“SAB 118”), which was codified by the FASB in March 2018, provided guidance for the application of ASC 740, Income Taxes, as it relates to the 2017 Tax Act. The guidance provides that companies (i) should record the effects of the changes from the 2017 Tax Act for which the accounting is complete (not provisional), (ii) should record provisional amounts for the effects of the changes for which the accounting is not complete, and for which reasonable estimates can be determined, in the period they are identified, and (iii) should not record provisional amounts if reasonable estimates cannot be made for the effects of the changes, and should continue to apply guidance based on the tax law in effect prior to the enactment on December 22, 2017. The guidance established a one-year measurement period (through December 22, 2018) where provisional amounts could be subject to adjustment, and requires certain qualitative and quantitative disclosures related to provisional amounts and accounting during the measurement period. In accordance with ASC 740 and SAB 118, we remeasured our U.S. net deferred tax assets at the reduced U.S. federal corporate tax rate and a provisional charge was recognized as a discrete item in the provision for income taxes in the second quarter of fiscal 2018. In the third quarter of fiscal 2018, this provisional charge was reduced, primarily as the result of a tax deductible contribution we made to our pension plan in excess of the minimum required amount. (See Note 6 for further information about our pension plan.) A provisional tax benefit of $1,095,000 was recognized as a discrete item in the provision for income taxes in the third quarter of fiscal 2018 and a net provisional tax charge of $3,996,000 was recognized for the nine months ended April 30, 2018. The measurement of deferred income taxes, as shown in Other Assets on the unaudited Condensed Consolidated Balance Sheet, is provisional. The final remeasurement cannot be determined until the underlying temporary differences are known, rather than estimated. The 2017 Tax Act also reduced the U.S. federal corporate tax rate from 35.0% to 21.0% for all corporations effective January 1, 2018. For fiscal year companies, the change in law requires the application of a blended rate for each quarter of the fiscal year of enactment. We will apply a blended tax rate of 26.9% for the fiscal year ending July 31, 2018. Thereafter, the applicable statutory rate is 21.0%. In addition, the 2017 Tax Act included a one-time transition tax on cumulative unrepatriated foreign earnings. Based on information available, we estimate our unrepatriated foreign earnings represent a cumulative loss and therefore no additional income tax expense was recorded related to this provision of the 2017 Tax Act. We are continuing to analyze the impact of the 2017 Tax Act. As such, our financial results reflect reasonable estimates of items for which the income tax effects of the 2017 Tax Act have not been completed as of April 30, 2018. Adjustments to the provisional charges will be recorded as discrete items in the provision for income taxes in the period in when those adjustments become reasonably estimable and/or the accounting is complete. We will complete our analysis no later than December 22, 2018. |
Related Party Transactions (Notes) |
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Apr. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure | RELATED PARTY TRANSACTIONS One member of our Board of Directors is the President and Chief Executive Officer of a customer of ours. That customer was a customer of ours before the board member joined that customer and before he became a member of our Board of Directors. Total net sales to that customer, including sales to subsidiaries of that customer, were $150,000 and $142,000 for the third quarters of fiscal years 2018 and 2017, respectively, and were $313,000 and $320,000 for the first nine months of fiscal years 2018 and 2017, respectively. Outstanding accounts receivable from that customer, and its subsidiaries, were $30,000 as of April 30, 2018. There were no outstanding amounts due as of July 31, 2017. One member of our Board of Directors, and of the Compensation Committee of our Board of Directors, is the President and Chief Executive Officer as well as a director and shareholder of a law firm that regularly provides services to us. Total payments to that vendor for fees and cost reimbursements were $67,000 and $9,000 for the third quarters of fiscal years 2018 and 2017, respectively, and were $183,000 and $77,000 for the first nine months of fiscal years 2018 and 2017, respectively. Outstanding accounts payable to that vendor were $0 and $19,000 as of April 30, 2018 and July 31, 2017, respectively. |
Basis of Statement Presentation Level 2 (Policies) |
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Apr. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue Recognition | We recognize revenue when risk of loss and title are transferred under the terms of our sales agreements with customers at a fixed and determinable price and collection of payment is probable. Trade promotion reserves are provided for sales incentives made directly to consumers, such as coupons, and sales incentives made to customers, such as slotting, discounts based on sales volume, cooperative marketing programs and other arrangements. Such trade promotion costs are netted against sales. Sales returns and allowances are not material. |
Selling, General and Administrative Expenses | Selling, general and administrative expenses include salaries, wages and benefits associated with staff outside the manufacturing and distribution functions, all marketing related costs, any miscellaneous trade spending expenses not required to be included in net sales, research and development costs, depreciation and amortization related to assets outside the manufacturing and distribution process and all other non-manufacturing and non-distribution expenses. |
Trade Receivable | We record an allowance for doubtful accounts based on our historical experience and a periodic review of our accounts receivable, including a review of the overall aging of accounts, consideration of customer credit risk and analysis of facts and circumstances about specific customer accounts. A customer account is determined to be uncollectible when it is probable that a loss will be incurred after we have completed our internal collection procedures, including termination of shipments, direct customer contact and formal demand of payment. |
Overburden Removal and Mining Costs | We mine sorbent materials on property that we either own or lease as part of our overall operations. A significant part of our overall mining cost is incurred during the process of removing the overburden (non-usable material) from the mine site, thus exposing the sorbent material used in a majority of our production processes. These stripping costs are treated as a variable inventory production cost and are included in cost of sales in the period they are incurred. We defer and amortize the pre-production overburden removal costs associated with opening a new mine. Additionally, it is our policy to capitalize the purchase cost of land and mineral rights, including associated legal fees, survey fees and real estate fees. The costs of obtaining mineral patents, including legal fees and drilling expenses, are also capitalized. Pre-production development costs on new mines and any prepaid royalties that may be offset against future royalties due upon extraction of the minerals are also capitalized. All exploration related costs are expensed as incurred. |
Reclamation | We perform ongoing reclamation activities during the normal course of our overburden removal. As overburden is removed from a mine site, it is hauled to previously mined sites and is used to refill older sites. This process allows us to continuously reclaim older mine sites and dispose of overburden simultaneously, therefore minimizing the costs associated with the reclamation process. |
Inventories Level 2 (Policies) |
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Apr. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Inventory costs include the cost of raw materials, packaging supplies, labor and other overhead costs. We performed a detailed review of our inventory items to determine if an obsolescence reserve adjustment was necessary. The review surveyed all of our operating facilities and sales groups to ensure that both historical issues and new market trends were considered. The obsolescence reserve not only considered specific items, but also took into consideration the overall value of the inventory as of the balance sheet date. |
Fair Value Measurements Fair Value Measurements (Policies) |
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Apr. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement, Policy | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized into categories based on the lowest level of input that is significant to the fair value measurement. The categories in the fair value hierarchy are as follows: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs for similar assets or liabilities or valuation models whose inputs are observable, directly or indirectly. Level 3: Unobservable inputs. |
Operating Segments Level 2 (Policies) |
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Apr. 30, 2018 | |
Segment Reporting [Abstract] | |
Operating Segments | We have two operating segments: (1) Retail and Wholesale Products Group and (2) Business to Business Products Group. These operating segments are managed separately and each segment's major customers have different characteristics. The Retail and Wholesale Products Group customers include: mass merchandisers; wholesale clubs; drugstore chains; pet specialty retail outlets; dollar stores; retail grocery stores; distributors of industrial cleanup and automotive products; environmental service companies; and sports field product users. The Business to Business Products Group customers include: processors and refiners of edible oils, petroleum-based oils and biodiesel fuel; manufacturers of animal feed and agricultural chemicals; distributors of animal health and nutrition products; and marketers of consumer products. Our operating segments are also our reportable segments. Net sales and operating income for each segment are provided below. Revenues by product line are not provided because it would be impracticable to do so. The accounting policies of the segments are the same as those described in Note 1 of the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended July 31, 2017. |
Inventories Level 3 (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | The composition of inventories is as follows (in thousands):
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Goodwill and Other Intangibles (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated intangible amortization for the next five fiscal years is as follows (in thousands):
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Pension and Other Postretirement Benefits (Tables) |
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Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic pension and postretirement health benefit costs were as follows:
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Schedule of Assumptions Used | Assumptions used in the previous calculations were as follows:
The medical cost trend assumption for postretirement health benefits was 7.20%. The graded trend rate is expected to decrease to an ultimate rate of 4.50% in fiscal year 2036. |
Operating Segments (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segments Information |
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Transactions | A summary of restricted stock transactions is shown below:
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Accumulated Other Comprehensive (Loss) Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (Loss) Income by Component | The following table summarizes the changes in accumulated other comprehensive (loss) income by component as of April 30, 2018 (in thousands):
(a) Amount is net of tax expense of $296,000. Amount is included in the components of net periodic benefit cost for the pension and postretirement health plans. See Note 6 for further information. (b) In the third quarter of fiscal year 2018, we early adopted guidance under ASC 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This guidance allowed the stranded tax effects resulting from the change in the U.S. federal corporate income tax rate under the 2017 Tax Act to be reclassified from accumulated other comprehensive income to retained earnings. See Note 2 for further information. |
New Accounting Pronouncements Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Apr. 30, 2018 |
Apr. 30, 2018 |
Jul. 31, 2017 |
|
New Accounting Pronouncements or Change in Accounting Principle | |||
Reclassification to retained earnings upon adoption of accounting standard | $ 2,264,000 | ||
Improvements to Employee Share-Based Payment Accounting ASU 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Excess tax benefit from share-based compensation | $ 9,000 | $ 166,000 | |
Impact on effective tax rate of adoption, percent | 0.00% | 1.00% | |
Balance Sheet Classification of Deferred Taxes ASU 2015-17 | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Deferred income taxes, current | $ 2,787,000 |
Inventories (Details) - USD ($) $ in Thousands |
Apr. 30, 2018 |
Jul. 31, 2017 |
---|---|---|
Inventory | ||
Finished goods | $ 15,133 | $ 14,704 |
Packaging | 5,693 | 4,988 |
Other | 2,589 | 2,923 |
Total Inventories | $ 23,415 | $ 22,615 |
Inventories Narrative (Details) - USD ($) |
Apr. 30, 2018 |
Jul. 31, 2017 |
---|---|---|
Inventory | ||
Inventory obsolescence reserve | $ 1,136,000 | $ 619,000 |
Fair Value Measurements Narrative (Details) - USD ($) |
Apr. 30, 2018 |
Jul. 31, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term borrowing | $ 6,000,000 | $ 0 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash Equivalents | 4,248,000 | 3,814,000 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Notes Payable, Fair Value | $ 9,491,000 | $ 13,001,000 |
Goodwill and Other Intangibles (Details) $ in Thousands |
Apr. 30, 2018
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Future Amortization Expense | |
2019 | $ 835 |
2020 | 666 |
2021 | 479 |
2022 | 332 |
2023 | $ 200 |
Goodwill and Other Intangibles Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Apr. 30, 2018 |
Apr. 30, 2017 |
Apr. 30, 2018 |
Apr. 30, 2017 |
Jul. 31, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization of intangible assets | $ 255,000 | $ 306,000 | $ 762,000 | $ 918,000 | |
Amortization expense for remainder of current fiscal year | 255,000 | 255,000 | |||
Indefinite-lived trademarks | $ 376,000 | $ 376,000 | |||
Goodwill impairment loss | $ 0 |
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2018 |
Apr. 30, 2017 |
Apr. 30, 2018 |
Apr. 30, 2017 |
|
Pension Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Service cost | $ 431 | $ 456 | $ 1,293 | $ 1,369 |
Interest cost | 503 | 465 | 1,517 | 1,396 |
Expected return on plan assets | (656) | (443) | (1,627) | (1,330) |
Amortization of Prior service costs | 1 | 1 | 2 | 2 |
Amortization of Other actuarial (gain) loss | 314 | 457 | 955 | 1,371 |
Net periodic benefit cost | 593 | 936 | 2,140 | 2,808 |
Postretirement Health Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Service cost | 26 | 31 | 80 | 94 |
Interest cost | 20 | 20 | 63 | 59 |
Amortization of Prior service costs | (2) | (2) | (5) | (5) |
Amortization of Other actuarial (gain) loss | 0 | 11 | 0 | 31 |
Net periodic benefit cost | $ 44 | $ 60 | $ 138 | $ 179 |
Pension and Other Postretirement Benefits Assumptions (Details) |
9 Months Ended | |
---|---|---|
Apr. 30, 2018 |
Apr. 30, 2017 |
|
Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||
Discount rate for net periodic benefit cost | 3.75% | 3.36% |
Rate of increase in compensation levels | 3.50% | 3.50% |
Long-term expected rate of return on assets | 7.00% | 7.00% |
Postretirement Health Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||
Discount rate for net periodic benefit cost | 3.26% | 2.71% |
Rate of increase in compensation levels | 0.00% | 0.00% |
Long-term expected rate of return on assets | 0.00% | 0.00% |
Pension and Other Postretirement Benefits Narrative (Details) |
3 Months Ended | 9 Months Ended |
---|---|---|
Apr. 30, 2018
USD ($)
|
Apr. 30, 2018
USD ($)
|
|
Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||
Employer contributions | $ 12,435,000 | $ 13,204,000 |
Voluntary contribution in excess of minimum required | 11,500,000 | |
Estimated contributions in remainder of current fiscal year | $ 0 | $ 0 |
Postretirement Health Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||
Medical Cost Trend Assumption | 7.20% | 7.20% |
Ultimate Health Care Cost Trend Rate | 4.50% | 4.50% |
Year that Rate Reaches Ultimate Trend Rate | 2036 |
Operating Segments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Apr. 30, 2018 |
Apr. 30, 2017 |
Apr. 30, 2018 |
Apr. 30, 2017 |
Jul. 31, 2017 |
|
Segment Reporting Information | |||||
Assets | $ 198,010 | $ 198,010 | $ 212,575 | ||
Total Sales | 64,847 | $ 64,745 | 200,387 | $ 196,531 | |
Corporate Expenses | (6,665) | (5,580) | (21,414) | (18,650) | |
Income from Operations | 3,114 | 3,746 | 11,787 | 12,379 | |
Total Other Income (Expense), Net | 181 | 22 | 418 | (688) | |
Income before Income Taxes | 3,295 | 3,768 | 12,205 | 11,691 | |
Income Tax Benefit (Expense) | 290 | (557) | (6,666) | (2,221) | |
Net Income | 3,585 | 3,211 | 5,539 | 9,470 | |
Business to Business Products | |||||
Segment Reporting Information | |||||
Assets | 61,134 | 61,134 | 65,337 | ||
Segment Net Sales | 24,784 | 24,159 | 79,226 | 74,893 | |
Segment Income | 7,556 | 7,810 | 26,191 | 25,033 | |
Retail and Wholesale Products | |||||
Segment Reporting Information | |||||
Assets | 90,065 | 90,065 | 90,508 | ||
Segment Net Sales | 40,063 | 40,586 | 121,161 | 121,638 | |
Segment Income | 2,223 | $ 1,516 | 7,010 | $ 5,996 | |
Unallocated Assets | |||||
Segment Reporting Information | |||||
Assets | $ 46,811 | $ 46,811 | $ 56,730 |
Operating Segments Narrative (Details) |
9 Months Ended |
---|---|
Apr. 30, 2018
segment
| |
Segment Reporting Information | |
Number of Reportable Segments | 2 |
Stock-Based Compensation Summary of Restricted Stock Transactions (Details) - Restricted Stock shares in Thousands |
9 Months Ended |
---|---|
Apr. 30, 2018
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award | |
Non-vested restricted stock outstanding, beginning balance | shares | 185 |
Granted, number of shares | shares | 25 |
Vested, number of shares | shares | (28) |
Forfeitures, number of shares | shares | (6) |
Non-vested restricted stock outstanding, ending balance | shares | 176 |
Non-vested restricted stock outstanding, weighted average grant date fair value, beginning balance | $ / shares | $ 30.96 |
Granted, weighted average grant date fair value | $ / shares | 42.58 |
Vested, weighted average grant date fair value | $ / shares | 29.88 |
Forfeitures, weighted average grant date fair value | $ / shares | 36.41 |
Non-vested restricted stock outstanding, weighted average grant date fair value, ending balance | $ / shares | $ 32.62 |
Accumulated Other Comprehensive (Loss) Income Narrative (Details) |
9 Months Ended |
---|---|
Apr. 30, 2018
USD ($)
| |
Accumulated Other Comprehensive Income | |
Tax for reclassification adjustment from AOCI for pension and other postretirement benefits | $ 296,000 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 5 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|---|---|
Apr. 30, 2018 |
Dec. 31, 2017 |
Jul. 31, 2018 |
Apr. 30, 2018 |
Jul. 31, 2019 |
Jul. 31, 2018 |
|
Income Tax | ||||||
Provisional Charge Related To Remeasurement Of Deferred Tax Assets Due to 2017 Tax Act | $ 1,095,000 | $ 3,996,000 | ||||
Federal Statutory Income Tax Rate | 35.00% | |||||
Provisional Charge Related To Cumulative Unrepatriated Foreign Earnings Due to 2017 Tax Act | $ 0 | |||||
Forecast | ||||||
Income Tax | ||||||
Federal Statutory Income Tax Rate | 21.00% | 21.00% | ||||
Federal Blended Statutory Income Tax Rate | 26.90% |
Related Party Transactions (Details) - Director [Member] - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Apr. 30, 2018 |
Apr. 30, 2017 |
Apr. 30, 2018 |
Apr. 30, 2017 |
Jul. 31, 2017 |
|
Related Party Transaction | |||||
Net sales to related party | $ 150,000 | $ 142,000 | $ 313,000 | $ 320,000 | |
Accounts receivable from related party | 30,000 | 30,000 | $ 0 | ||
Payments to related party | 67,000 | $ 9,000 | 183,000 | $ 77,000 | |
Accounts payable to related party | $ 0 | $ 0 | $ 19,000 |
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