Oil-Dri fiscal 4Q profit edges up on cost cuts

Oil-Dri fiscal 4th-quarter profit edges up 3 percent on cost cuts despite sales decline

• On 5:33 pm EDT, Friday October 9, 2009

CHICAGO (AP) -- Oil-Dri Corp. of America, which makes cat litter and other absorbent products, said Friday its fiscal fourth-quarter profit rose 3 percent, helped by cost cuts.

Oil-Dri said net income rose to $2.6 million, or 35 cents per share, for the three months ended July 31. That compares with $2.5 million, or 34 cents per share, in the year-earlier period.

Sales dropped 6 percent to $55.9 million from $59.5 million.

Analysts surveyed by Thomson Reuters, on average, expected 31 cents per share on revenue of $59.9 million. Those estimates typically exclude one-time items.

"While our net sales declined in the fourth quarter, we are encouraged by our year-end results and our concerted efforts to control expenses and sell higher margin products," President and CEO Daniel S. Jaffee said in a statement. "Our balance sheet remains strong, allowing us to reduce debt and pay dividends while investing heavily in capital projects."

For the full fiscal year, Oil-Dri's net income grew 6 percent to $9.6 million, or $1.32 per share, from $9 million, or $1.25 per share, in the previous fiscal year.

Oil-Dri announced in June that Wal-Mart would dramatically reduce the number of stores carrying the company's branded cat litter products, Jaffee said.

The new store counts went into effect in August, resulting in "the loss of a material amount of branded cat litter sales and related profitability with this account," he said.

"We have received strong support from our other retail partners who see this as an opportunity to promote Cat's Pride and grow their cat litter sales," he said. "Only time will tell what the net effect of these changes will be on our top and bottom lines."

Shares of Oil-Dri rose 41 cents, or 2.7 percent, to close at $15.62.

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