SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Level 1 (Notes)

12 Months Ended

Jul. 31, 2025

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Summary Of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

    We are a leader in developing, manufacturing and/or marketing sorbent products. Our sorbent products are principally produced from clay minerals. Our absorbent clay products include cat litter, industrial floor absorbents, agricultural chemical carriers and animal feed additives. Our adsorbent products include bleaching clays, which are used for filtration of edible oils, pre-treatment of renewable diesel, and for purification of petroleum-based oils. We also sell synthetic sorbents, which are used for industrial cleanup and cat litter.

PRINCIPLES OF CONSOLIDATION

The Consolidated Financial Statements include the accounts of Oil-Dri Corporation of America and its subsidiaries. All significant intercompany balances and transactions have been eliminated from the Consolidated Financial Statements.

RECLASSIFICATION

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

MANAGEMENT'S USE OF ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period as well as the related disclosures. Estimates and assumptions about future events cannot be made with certainty. All of our estimates and assumptions are revised periodically. Actual results could differ from these estimates.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash equivalents are highly liquid investments with maturities of three months or less.

The following table provides a reconciliation of cash, cash equivalents and restricted cash as of July 31, 2025, and 2024 reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows (in thousands):

	2025		2024		2023
Cash and cash equivalents	$	50,458	$	23,481	$	31,754
Restricted cash included in prepaid expenses and other assets	—		1,000		—
Cash, cash equivalents, and restricted cash	$	50,458	$	24,481	$	31,754

 TRADE RECEIVABLES

We recognize trade receivables when control of finished products is transferred to our customers. We record an allowance for credit losses based on our expectations and a periodic review of our accounts receivable, including a review of the overall aging of accounts, consideration of customer credit risk and analysis of facts and circumstances about specific accounts. A customer account is determined to be uncollectible when it is probable that a loss will be incurred after we have completed our internal collection procedures, including termination of shipments, direct customer contact and formal demand of payment. We retain outside collection agencies to facilitate our collection efforts. Past due status is determined based on contractual terms and customer payment history. We also include an allowance for expected cash discounts to be taken by our customers.

INVENTORIES

The composition of inventories was as follows as of July 31 (in thousands):

	2025		2024
Finished goods	$	29,401	$	31,772
Packaging	8,114		8,995
Spare parts	6,822		$	7,059
Other	7,257		6,410
Inventories, net	$	51,594	$	54,236

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 considers specific items but also takes into consideration the overall value of the inventory as of the balance sheet date. We recorded inventory reserves of $3.7 million as of July 31, 2025, and $3.8 million as of July 31, 2024. The other category of inventories includes a variety of items including clay, additives, fragrances and other supplies. Spare parts in inventory are recorded net of a valuation reserve based on aging.

TRANSLATION OF FOREIGN CURRENCIES

Assets and liabilities of foreign subsidiaries, where the local currency is the functional currency, are translated to U.S. dollars at the exchange rates in effect at period end. Income statement items are translated at the average exchange rate on a monthly basis. Resulting translation adjustments are recorded as a separate component of stockholders’ equity.

INTANGIBLES AND GOODWILL

Our intangible assets are mainly comprised of customer lists, patents, trademarks, trade names and goodwill. We amortize customer lists and patents on a straight-line basis over periods ranging from 18 to 20 years. During fiscal year 2024 we recorded additions of intangible assets of $37.4 million related to the acquisition of Ultra Pet, the components of which were customer list of $20.4 million amortized over a useful life of 18 years, $5.2 million of trade name and $11.8 million of goodwill. During fiscal year 2025, certain measurement period adjustments were made to goodwill resulting in a $0.6 million increase to goodwill.

Intangible amortization was $1.2 million, $0.5 million, and $0.3 million in fiscal years 2025, 2024, and 2023 respectively.

Our estimated intangible amortization expense for the next five fiscal years is as follows (in thousands):

2026	$	1,217
2027	$	1,217
2028	$	1,217
2029	$	1,217
2030	$	1,217

    The remaining weighted average amortization period of our intangibles subject to amortization is as follows (in years):

	Weighted Average Amortization Period
Patents	8.8
Customer list	16.8
Total intangible assets subject to amortization	16.6

Trademarks and trade names acquired through acquisitions were determined to have indefinite lives. We had $5.6 million in indefinite life trademarks and trade names as of both July 31, 2025, and 2024.

Goodwill by operating segment was as follows as of July 31 (in thousands):

	2025		2024
Business to Business	3,618		3,618
Retail and Wholesale	$	12,399	11,825
Total	$	16,017	$	15,443

We review indefinite-lived intangibles and goodwill to assess for impairment on the first day of our fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We also perform a review for indicators of impairment each quarter to assess whether an interim impairment review is required for any reporting unit. Our review entails a qualitative analysis of triggering events and, if identified, a further analysis is performed based on cash flow considerations and other approaches that require significant judgment with respect to volume, revenue, expenses and allocations. Impairment occurs when the carrying value exceeds the fair value. We performed our impairment assessment and identified no triggering events that indicate the need for impairment of indefinite intangible assets or goodwill in either 2025 or 2024.

 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are depreciated using the straight-line method over their estimated useful lives. The useful lives for most of our depreciable assets range from 2 to 25 years, with some buildings ranging up to 30 years. Depreciation expense was $20.8 million, $18.8 million, and $15.3 million in fiscal years 2025, 2024, and 2023 respectively. Major improvements and betterments are capitalized, while maintenance and repairs that do not extend the useful life or increase functionality of the applicable assets are expensed as incurred. Interest expense may also be capitalized for assets that require a period of time to get them ready for their intended use. There was no capitalized interest in fiscal years 2025 and 2024.

Property, plant and equipment are carried at cost on the Consolidated Balance Sheets and are reviewed for possible impairment when circumstances indicate that an asset may be impaired. We take into consideration idle and underutilized equipment and review business plans for possible impairment. When impairment is indicated, an impairment charge is recorded for the difference between the carrying value of the asset and its fair market value. In fiscal year 2025, we recognized no impairment for fixed assets no longer in use. We recognized impairment for fixed assets of $0.1 million in fiscal year 2024 and $0.9 million in fiscal year 2023. Impairment is included in cost of goods sold on the Consolidated Statement of Operations.

LAND AND MINING ASSETS

Our mining assets include mining properties, mineral rights and reclamation assets. We surface mine sorbent minerals on property that we either own or lease. A significant part of our mining cost is incurred during the process of removing the overburden from the mine site, thus exposing the sorbent material used in a majority of our production processes. Pre-production overburden removal costs associated with opening a new mine during the development phase are deferred. There was no capitalized pre-production costs incurred in either fiscal year 2025 or 2024. Capitalized development costs are amortized when the sorbent material is removed from the mine and used to produce product for sale. At the end of fiscal year 2025, the amount of development costs that are being amortized is $3.5 million. Stripping costs incurred during production are treated as a variable inventory production cost and are included in cost of goods sold. Stripping costs included in cost of goods sold were approximately $4.7 million, $5.4 million, and $4.0 million for fiscal years 2025, 2024, and 2023, respectively.

Additionally, it is our policy to capitalize the purchase cost of land and mineral rights, including associated legal, survey, and real estate fees. The costs of obtaining mineral rights, including legal fees and drilling expenses, are also capitalized. As of both fiscal years ending July 31, 2025, and July 31, 2024, we had $13.5 million of land and $2.2 million of gross mineral rights. Any prepaid royalties that may be offset against future royalties due upon extraction of the mineral are also capitalized. Prepaid royalties included in current prepaid expenses and in non-current other assets on the Consolidated Balance Sheets were approximately $2.4 million as of July 31, 2025, and $2.3 million as of July 31, 2024.

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 the older sites. This process allows us to

continuously reclaim older mine sites and dispose of overburden simultaneously, therefore minimizing the costs associated with the reclamation process.

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

We recorded an estimated net reclamation asset of $3.1 million as of July 31, 2025, and $2.2 million as of July 31, 2024, and a corresponding estimated reclamation liability of $5.9 million as of July 31, 2025, and $4.8 million as of July 31, 2024. These values represent the discounted present value of the estimated future mining reclamation and landfill closure costs at the production plants. Additional mining activity, disturbance of land, and higher costs account for a majority of the increase in the reclamation liability.

TRADE PROMOTIONS

    We routinely commit to one-time or ongoing trade promotion programs, primarily in our Retail and Wholesale Products Group. All such costs are netted against sales. We have accrued liabilities at the end of each period for the estimated expenses incurred but not yet paid for these programs. Promotional reserves are provided for sales incentives made directly to consumers, such as coupons, and sales incentives made to customers, including slotting, discounts based on sales volume, cooperative marketing programs and other arrangements. We rely on our historical experience of trade spending patterns and that of the industry, current trends and forecast data to record estimates of our trade spending liabilities.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Non-derivative financial instruments included in the Consolidated Balance Sheets are cash and cash equivalents, short-term investments, credit facilities, and notes payable. These instruments, except for debt, were carried at amounts approximating fair value as of July 31, 2025, and 2024. See Note 5 of the Notes to the Consolidated Financial Statements for additional information regarding the fair value of our financial instruments, including notes payable.

REVENUE RECOGNITION

We recognize revenue when performance obligations under the terms of the contracts with customers are satisfied. Our performance obligation generally consists of the promise to sell finished products to wholesalers, distributors, retailers or consumers and our obligations have an original duration of one year or less. Control of the finished products are transferred upon shipment to, or receipt at, customers' locations, as determined by the specific terms of the contract. We have completed our performance obligation when control is transferred, and we recognize revenue accordingly. Taxes collected from customers and remitted to governmental authorities are excluded from net sales. Sales returns are not material nor are warranties or any related obligations.

    We have an unconditional right to consideration under the payment terms specified in the contract upon completion of the performance obligation. We may require certain customers to provide payment in advance of product shipment. We recorded a liability of $0.3 million as of July 31, 2025, for these advance payments. There is $0.2 million liability for advance payments as of July 31, 2024. This liability is reported in Other Accrued Expenses on the Consolidated Balance Sheets. There is $0.2 million revenue recognized during fiscal year 2025 that was included in the liability for advance payments at the beginning of the year.

COST OF GOODS SOLD

Cost of goods sold consists of all manufacturing costs, including depreciation and amortization related to assets used in the manufacturing and distribution process, inbound and outbound freight, inspection costs, purchasing costs associated with materials and packaging used in the production process and warehouse and distribution costs. Natural gas forward contracts are accounted for as normal purchases.

SHIPPING AND HANDLING COSTS

Shipping and handling costs are included in cost of goods sold and were approximately $64.9 million, $59.2 million, and $57.4 million for fiscal years 2025, 2024, and 2023, respectively.

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.

ADVERTISING

Advertising costs for the development of printed materials, television commercials, web-based digital banners, web-based social media and sales videos are deferred and expensed upon the first use of the materials. Costs paid for communicating advertising over a period of time, such as television air time, radio commercials and print media advertising space, are deferred and expensed on a pro-rata basis. All other advertising costs, including participation in industry conventions and shows and market research, are expensed when incurred. All advertising costs are part of selling, general and administrative expenses. Advertising expenses were approximately $7.6 million, $9.0 million, $7.3 million in fiscal years 2025, 2024, and 2023, respectively.

RESEARCH AND DEVELOPMENT

Research and development costs of approximately $2.4 million, $2.1 million, and $1.2 million were charged to expense as incurred for fiscal years 2025, 2024, and 2023, respectively, and are recorded in selling, general and administrative expenses.

STOCK-BASED COMPENSATION

We account for stock options and restricted stock issued under our long-term incentive plans in accordance with ASC 718, Compensation – Stock Compensation. The fair value of stock-based compensation is determined at the grant date. The related compensation expense is recognized over the appropriate vesting period. Forfeitures are recognized as they occur. See Note 8 of the Notes to the Consolidated Financial Statements for additional information.

INCOME TAXES

Deferred income tax assets and liabilities are recorded for the impact of temporary differences between the tax basis of assets and liabilities and the amounts recognized for financial reporting purposes. Deferred tax assets are reviewed, and a valuation allowance is established if management believes that it is more likely than not that some portion of our deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change.

In addition to existing valuation allowances, we provide for uncertain tax positions, if necessary, when such tax positions do not meet the recognition thresholds or measurement standards prescribed by ASC 740, Income Taxes. Amounts for uncertain tax positions are adjusted when new information becomes available or when positions are effectively settled. We recognize interest and penalties accrued related to uncertain tax positions in income tax expense.

U.S. income tax expense and foreign withholding taxes are provided on remittances of foreign earnings and on unremitted foreign earnings that are not indefinitely reinvested. Where unremitted foreign earnings are indefinitely reinvested, no provision for federal or state tax expense is recorded. When circumstances change and we determine that some or all of the undistributed earnings will be remitted in the foreseeable future, a corresponding expense is accrued in the current period. See Note 6 of the Notes to the Consolidated Financial Statements for additional information about income taxes.

STOCK SPLIT

On October 9, 2024, we announced that our Board approved a two-for-one stock split in the form of a stock dividend. Stockholders of record as of the close of business on December 20, 2024 received a distribution of one additional share of Common Stock, 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 the record date. The additional shares were distributed on January 3, 2025, and our Common Stock began trading on a post-split basis on January 6, 2025.

The stock split did not affect the par value of the Common Stock or Class B Stock, however, in order to implement the stock split, we amended our Certificate of Incorporation on December 11, 2024 to increase the number of authorized shares of Common Stock from 15 million to 30 million. Proportionate adjustments were made to the number of shares that remain available for issuance pursuant to the 2006 Plan, as well as to the outstanding awards under the 2006 Plan.

Unless noted, all Common Stock and Class B Stock share and per share amounts contained in the Condensed Consolidated Financial Statements have been retroactively adjusted, where applicable, to reflect the stock split. The impact on the Condensed Consolidated Balance Sheet and Condensed Consolidated Statements of Stockholders' Equity herein was an increase of $0.8 million to Common Stock and Class B Stock, with an offsetting decrease in Additional Paid-In-Capital, which has been retroactively adjusted as if the stock split had occurred at the beginning of the earliest period presented. The change in treasury shares reflects the stock split on shares held by wholly owned subsidiaries which are presented as treasury shares on a consolidated basis.

EARNINGS PER SHARE

We utilize the two-class method to report our earnings per share ("EPS"). The two-class method is an earnings allocation formula that determines EPS for each class of common stock according to dividends declared and participation rights in undistributed earnings. Common Stock is entitled to cash dividends equal to at least 133.33% on a per share basis of the cash dividend paid on Class B Stock. In computing EPS, the Company has allocated dividends declared to shares of Common Stock and Class B Stock based on amounts declared for each class of stock and 33.33% more of the undistributed earnings have been allocated to shares of Common Stock than to shares of Class B Stock on a per share basis. Common Stock is entitled to one vote per share and Class B Stock is entitled to ten votes per share. Common Stock have no conversion rights. Class B Stock is convertible by the holders thereof on a share-by-share basis into Common Stock at any time and is subject to mandatory conversion under certain circumstances. Basic EPS is computed by dividing net earnings, reduced for any distributed and undistributed earnings allocated to unvested restricted shares, by the weighted-average number of shares outstanding during the period for each class of common stock. Diluted EPS for Common Stock is derived utilizing the most dilutive result of the if-converted, treasury stock and two-class methods. In our case, the if-converted method is more dilutive than the two-class method and because our unvested restricted stock participates in dividends and is therefore anti-dilutive the treasury stock method does not apply. For Class B Stock, diluted EPS is derived utilizing the two-class method since, as with our Common Stock, our unvested restricted stock participates in dividends and is therefore anti-dilutive, making the treasury stock method inapplicable. The reverse treasury stock method is also inapplicable to both classes as we have no obligation to repurchase our Common Stock or Class B Stock. In both the if-converted and two-class methods, diluted EPS is computed by dividing net earnings by the weighted-average number of shares and potential shares outstanding during the period, taking into consideration different potential shares outstanding based on the method used. Dilution for Common Stock takes into consideration the effect of both unvested restricted shares and convertible shares of Class B Stock, unless such shares are anti-dilutive, in which case they are not considered. Dilution for Class B Stock takes into consideration the effect of unvested restricted shares, unless such shares are anti-dilutive, in which case they are not considered.

Below is a reconciliation of the calculation of basic and diluted EPS.

	For the year ended July 31, 2025
	(in thousands, except for per share data)
	Total		Common		Class B
Net income	$	53,996	$	41,173	$	12,823
Distributed and undistributed earnings on restricted shares	(2,580)		(1,732)		(848)
Income available to stockholders	$	51,416	$	39,441	$	11,975
Net Income (Numerator)			$	39,441	$	11,975
Weighted Average Shares Outstanding (Denominator)			9,889		3,994
Basic EPS			$	3.99	$	3.00
Effect of dilution - Net Income (1)			$	11,975	$	—
Net income assuming dilution (Numerator)			$	51,416	$	11,975
Effect of dilution - Shares (1)			3,994		$	—
Shares assuming dilution (Denominator)			13,883		$	3,994
Diluted EPS			$	3.70	$	3.00
(1) The impact of 275,327 shares of unvested Common Stock and 139,484 shares of unvested Class B Stock, restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS for the year ended July 31, 2025

	For the year ended July 31, 2024
	(in thousands, except for per share data)
	Total		Common		Class B
Net income	$	39,426	$	29,981	$	9,445
Distributed and undistributed earnings on restricted shares	(2,165)		(1,410)		(755)
Income available to stockholders	$	37,261	$	28,571	$	8,690
Net Income (Numerator)			$	28,571	$	8,690
Weighted Average Shares Outstanding (Denominator)			9,771		3,952
Basic EPS			$	2.92	$	2.20
Effect of dilution - Net Income (2)			$	8,690	$	—
Net income assuming dilution (Numerator)			$	37,261	$	8,690
Effect of dilution - Shares (2)			3,952		$	—
Shares assuming dilution (Denominator)			13,723		$	3,952
Diluted EPS			$	2.72	$	2.20
(2) The impact of 317,722 shares of unvested Common Stock and 108,740 shares of unvested Class B Stock, restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS for the year ended July 31, 2024.

	For the year ended July 31, 2023
	(in thousands, except for per share data)
	Total		Common		Class B
Net income	$	29,551	$	22,712	$	6,839
Distributed and undistributed earnings on restricted shares	(1,518)		(1,232)		(286)
Income available to stockholders	$	28,033	$	21,480	$	6,553
Net Income (Numerator)			$	21,480	$	6,553
Weighted Average Shares Outstanding (Denominator)			9,651		3,917
Basic EPS			$	2.23	$	1.67
Effect of dilution - Net Income (2)			$	6,553	$	—
Net income assuming dilution (Numerator)			$	28,033	$	6,553
Effect of dilution - Shares (2)			3,917		$	—
Shares assuming dilution (Denominator)			13,568		$	3,917
Diluted EPS			$	2.07	$	1.67
(2) The impact of 314,064 shares of unvested Common Stock and 71,390 shares of unvested Class B Stock, restricted stock was anti-dilutive therefore not included in the calculation of diluted EPS for the year ended July 31, 2023

NEW ACCOUNTING PRONOUNCEMENTS

 
Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). These amendments primarily require enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. In addition, ASU No. 2023-07 also requires all annual disclosures currently required by Topic 280 to be included in interim periods. These amendments are to be applied retrospectively for all periods presented in the financial statements and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Refer to Note 3 - Operating Segments of this Form 10-K for the enhanced disclosures added as a result of the adoption of ASU 2023-07.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). These amendments primarily require enhanced disclosures and disaggregation of income tax information by jurisdiction in the annual income tax reconciliation and quantitative disclosures regarding income taxes paid. These amendments are to be applied prospectively, with the option to apply the standard retrospectively, for annual periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact that the adoption of this guidance will have on our disclosures.

In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"). The pronouncement expands the disclosure requirements for expenses, specifically by providing more detailed information about the types of expenses in commonly presented expense captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact that ASU 2024-03 will have on the Company's consolidated financial statement disclosures.