Q4 2023 Oil-Dri Corporation of America Earnings Call

October 13, 2023

Yeah.

Speaker 1: Thank you for standing by and welcome to Oil Dry Corporation of America Q4 and Fiscal Year 2023 earnings discussion. At this time, all participants are in a listen the only mode.

Thank you for standing by and welcome to oil Dry Corporation of America, Q4, and fiscal year 2023 earnings discussion at this time all participants are in a listen only mode.

Speaker 1: After the speaker presentation, there will be a question and answer session. I would now like to hand the call over to Chairman, President, CEO , Dan Jaffe. Please go ahead.

After the speaker presentation, there will be a question and answer session I would now like to hand, the call over to chairman President and CEO Dan Jaffee. Please go ahead.

Thank you very much and welcome everybody first are wearing virtual mode. So I want to introduce who's all on the various lines ready to answer your questions. Thank you for getting those into the portal and advance Susan Craig <unk>, CFO and CIO, Aaron Christiansen VP of operations Doctor weighed Roby VP of.

Speaker 2: Thank you very much and welcome everybody. First, we're in virtual mode. So I want to introduce who's all on the various lines ready to answer your questions. Thank you for getting those into the portal in advance. Susan Kray CFO and CIO Aaron Christensen, VP of Operations, Dr. Wade Roby, VP of Agriculture and President of Amlan International.

Roger and President of Amlin International Crystal lamps, and Bruce B group VP of retail and wholesale.

Speaker 2: Chris Lamson, Group BP of Retail and Wholesale.

Speaker 2: Laura Schiehland, VP of Strategic Partnerships and General Counsel, David Atkinson, VP Corporate Controller, and last but not least, Leslie Garber, our Manager of Investor Relations who will walk us through our safe harbor.

Laura Sheelen VP of strategic partnerships and General Counsel, David Atkinson, VP, corporate controller, and last but not least Leslie Garber, our manager of Investor Relations, who will walk us through our safe Harbor provision.

Speaker 3: Thank you, Dan, and welcome everyone. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results in those periods may materially differ. In our press release and in our SEC filings, we highlight a number of important risk factors, trends, and uncertainties that may affect our future performance.

Thank you Dan and welcome everyone on today's call comments may contain forward looking statements regarding the company's performance in future periods actual results in those periods may materially differ in our press release and in our SEC filings, we highlight a number of important risk factors trends and uncertain.

Keith that may affect our future performance, we ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in oil dry stock. Thank you for joining us.

Speaker 3: We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in oil drive stock. Thank you for joining us. Dan, I'm.

Dan I'm, turning it back over to you.

Speaker 2: Sounds good. And before I turn it over to Susan, I'd like to make some general comments. We just concluded our 83rd fiscal year. And one of the things we're very proud of is our accumulated lessons learned. And we'd like to carry them on from my grandfather to my dad to me and on into the next generation.

Sounds good and before I turn it over to Susan I'd like to make some general comments, we just concluded our 83rd fiscal year.

And one of the things, we're very proud of our accumulated lesson learned and we'd like to carry the mine from my grandfather, My Dad to me.

And the next generation and one of those is winning at oil dry is a team game and Thats. What you guys saw in fiscal 'twenty three the outstanding results of our record performance was all due to the collective effort of our nearly 900 teammates globally.

Speaker 2: And one of those is winning at oil dry as a team game. And that's what you guys saw.

Speaker 2: The outstanding results, the record performance was all due to the collective effort of our nearly 900 teammates globally.

Speaker 2: And I just want to make sure I give them proper recognition.

And I just want to make sure I give them proper recognition I mean, just recently, we went through a flawless ERP upgrade which is almost impossible to do.

Speaker 2: Just recently we went through a flawless ERP upgrade, which is almost impossible to do. We've been in the fourth quarter, we're near perfect scores for on-time deliveries and on our customer scorecards, really received plenty of kudos, moving all the way to the top, which was very exciting.

We've been in the fourth quarter were near perfect scores for on time deliveries and on our customers' scorecards really received plenty of kudos moving all the way to the top which is very exciting and so all of those things have to happen to deliver the championship year, We just delivered and we're obviously.

Speaker 2: And so all of those things had to happen to deliver, you know, the championship year we just delivered. And we're obviously entering the new fiscal year with a lot of momentum, but mindful of the fact, you know, what have you done for us lately that we're gonna have to lap these results as we move forward. And I think you'll hear that we're all very confident that we have a lot of good growth plans in place and that fiscal 23, while the best we've ever had, is the best is still yet to come.

Entering the new fiscal year with a lot of momentum, but mindful of the fact, what have you done for us lately that we're going to have to lap. These results as we move forward and I think you'll hear that we're all very confident that we have a lot of good growth plans in place and that fiscal 'twenty three while the best we've ever had.

That is still yet to come and we believe that so Susan I'll turn it over to you and then we will.

Speaker 4: So Susan, I'll turn it over to you, and then we will get into our Q&A.

Get into our Q&A.

Okay.

And Susan we don't hear you. So you may be on mute.

Susan can you hear us.

I Wonder if Susan got disconnected.

Speaker 2: I'll go, you know me, I like open mic night. I'll cover some of the highlights. And Susan, if you get yourself back connected, I'm happy to turn the floor over to you. But the fourth quarter was a record $107 million in net sales up 15% over the prior year. You know, and that helped us finish the year for over 400 million for the first time, 413,021 up 18%.

I'll go with me.

I'd like to open Mic nights.

I'll cover some of the highlights and Susan if you get yourself back connected I'm happy to turn the floor over to you but.

But the fourth quarter was a record $107 million in net sales up 15% over the prior year and that helped us finish the year for over 400 million for the first time for $13 21 up 18%.

All year long and obviously, it's really what happened at the bottom line that was very exciting what we reported was an increase in the fourth quarter of 129% up to $11 9 million and a 421% increase up to 29 and a half million dollars, but the real story is to back out the <unk>.

Speaker 2: all year long. And you know, obviously, it's really what happened at the bottom line that was very exciting. What we reported was an increase in the fourth quarter of 129% up to 11.9 million.

Speaker 2: and a 421% increase up to $29.5 million. But the real story is to back out the two non-recurring events. You remember we had an impairment charge back in fiscal 22, which was an accounting non-cash.

Unknown Executive: Thank you for standing by and welcome to Oil-Dri Corporation of America Q4 in fiscal year 2023 earnings discussion at this time all participants are an A-list in the only mode. After the speaker presentation, there will be a question and answer session.

Two nonrecurring events you will remember we had an impairment charge back in fiscal 'twenty, two which was an accounting noncash charge and then really good for our future as we finally closed our defined benefit plan.

Speaker 2: charge. And then really good for our future is we finally closed our defined benefit plan.

Speaker 2: our pension plan and replaced it with a very generous defined contribution plan in the 401k. So when you back out those two non-recurring events what you're really looking at from an apples to apples standpoint is an increase from 10 million 136 a year ago to 36 million 469 this year and you know that's a 260 increase.

Our pension plan and replaced it with a very generous defined contribution plan in the 401K. So when you back out those two nonrecurring events, what youre really looking at from an apples to apples standpoint is an increase from $10 million 136, a year ago to 36 million and $4 69 this year.

Daniel Jaffee: I would now like to hand the call over to Chairman, President CEO Dan Jaffee. Please go ahead. Thank you very much and welcome everybody. First, we're in virtual mode, so I want to introduce who's all on the various lines ready to answer your questions. Thank you for getting those into the portal. In advance, Susan Kreh, CFO and CIO, Aaron Christiansen, VP of Operations, Dr. Wade Robey, VP of Agriculture, and President of Amlin International.

And that's a 260% increase obviously, we report by segment, you've got a business to business segment and their results were very much similar.

Speaker 2: Obviously, we report by segment. You've got our business-to-business segment, And their results...

Speaker 2: very much similar to what the company saw sales up 18% in the quarter 26% year to date and then operating income up 63% and 50 and then over on the retail and wholesale group led by Chris Lamson and his team sales were up 14 and 15% and 67% and a robust 478%. Now if you put that impairment charge back in he was up only two he and his team up only 204%.

To what the company saw sales up 18% in the quarter, 26% year to date.

Susan Kreh: Chris Lamson, Group VP of Retail and Wholesale, Laura Scheland, VP of Strategic Partnerships and General Counsel, David Atkinson, VP Corporate Controller, and last but not least, Leslie Garber, our Manager of Investor Relations, who will walk us through our safe harbor presentation. Thank you, Dan, and welcome everyone. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results in those periods may materially differ. In our press release and in our SEC filings, we highlight a number of important risk factors, trends, and uncertainties that may affect our future performance. We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in oil-dried stock. Thank you for joining us. Dan, I'm turning it back over to you.

Leslie Garber: Chris Lamson, Group VP of Retail and Wholesale, Laura Scheland, VP of Strategic Partnerships and General Counsel, David Atkinson, VP Corporate Controller, and last but not least, Leslie Garber, our Manager of Investor Relations, who will walk us through our safe harbor presentation. Thank you, Dan, and welcome everyone. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods.

And then operating income up 63% and 50 and then over on the retail and wholesale group led by Chris Lambson and his team.

Sales were up 14% and 15% and 67% and a robust 478% now if you put that impairment charge back in he was up only two he and his team up only 204%.

Leslie Garber: Actual results in those periods may materially differ. In our press release and in our SEC filings, we highlight a number of important risk factors, trends, and uncertainties that may affect our future performance. We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in oil-dried stock.

Speaker 2: You know, you guys can read the the news release yourself, so you don't need me to go through any more of it. We've got a lot of great questions from our investors. I appreciate that. And we have the team on hand to handle those questions. So Leslie, I'm going to turn it back over to you. And let's get into the q&a and hear what our investors would like to hear from us.

You guys can read the news release yourself. So you don't need me to go through any more of it we've got a lot of great questions from our investors I appreciate that and we have the team on hand to handle those questions. So lovely I'm going to turn it back over to you and let's get into the Q&A and hear what our investors would like to hear from us about.

Speaker 3: Okay, sounds great. Susan, if you are back on the call, let us know.

Okay sounds great.

Daniel Jaffee: Thank you for joining us. Dan, I'm turning it back over to you. Sounds good, and before I turn it over to Susan, I'd like to make some general comments. We just concluded our 83rd fiscal year. And one of the things we're very proud of is our accumulated lessons learned, and we'd like to carry them on from my grandfather, to my dad, to me, and on to the next generation. And one of those is winning at Oil Dry as a team game, and that's what you guys saw on fiscal 23.

And then if you are back on the call let us know.

Speaker 3: Otherwise, we are just going to continue. Our first question comes from Robert Smith, and he is from the Center for Performance Investing. His first question is, with respect to Amlan, you say there were timing issues that affected the fourth quarter shortfall. What would the quarter have looked like without those issues? Will the current quarter include all the shipments that missed the last quarter? What are the prospects for Amlan in fiscal 24? Thanks. Wade, can you please...

Otherwise, we're just going to continue.

Daniel Jaffee: Sounds good, and before I turn it over to Susan, I'd like to make some general comments. We just concluded our 83rd fiscal year. And one of the things we're very proud of is our accumulated lessons learned, and we'd like to carry them on from my grandfather, to my dad, to me, and on to the next generation. And one of those is winning at Oil Dry as a team game, and that's what you guys saw on fiscal 23.

Our first question comes from Robert Smith, and he is from the center for performance investing and his first question is with respect to Amlin you say there were timing issues that affected the fourth quarter shortfall what would the quarter have looked like without those issues will the current quarter include all the shipments that missed the last.

What are the prospects for amarin in fiscal 'twenty four.

Daniel Jaffee: The outstanding results, the record performance, was all due to the collective effort of our nearly 900 teammates globally. And I just want to make sure I give them proper recognition. I mean, just recently we went through a flawless ERP upgrade, which is almost impossible to do. We've been in the fourth quarter. We're near perfect scores for on-time deliveries, and on our customer scorecards really received plenty of kudos moving all the way to the top, which was very exciting.

Can you please take that.

Speaker 5: Yes, thank you, Leslie. And thank you, Robert, for the question. You've got a number of questions in there. I'll try to hit all of them pretty quickly.

Yes, Thank you Leslie and thank you Robert for the further question you've got a number of questions in there I'll try to try to hit all of them pretty quickly.

Speaker 5: So with respect to our business in the animal nutrition space, we don't see a lot of seasonality quarter to quarter. So typically we're pretty smooth as we continue to grow.

So with respect to our business and the animal nutrition.

Base, we don't see a lot of seasonality.

For the quarter. So typically we're pretty smooth as we continue to grow.

Speaker 5: In all the world areas where we're participating, we do sometimes see timing issues as you've noted in your question. We have a logistics timing.

World areas, where we're participating we do sometimes see timing issues as you've noted in your question we have.

Logistics.

Daniel Jaffee: And so all of those things had to happen to deliver, you know, the championship year we just delivered. And we're obviously entering the new fiscal year with a lot of momentum, but mindful of the fact, you know, what have you done for us lately that we're going to have to lap these results as we move forward. And I think you'll hear that we're all very confident that we have a lot of good growth plans in place, and that fiscal 23, while the best we've ever had, is the best is still yet to come.

Timing concern that comes in periodically in terms of how long it takes product to get to our Asian markets or to our Latin American markets and that can sometimes cause us month to month or quarter to quarter to have more volatility than the business itself would typically show and so that generally has affected our numbers at times on an individual quarter basis.

Speaker 5: concern that comes in periodically in terms of how long it takes product to get to our Asian markets or to our Latin American markets.

Speaker 5: And that can sometimes cause us month to month or quarter to quarter to have more volatility than the business itself would typically show. So that generally has affected our numbers at times on an individual quarter.

Speaker 5: Going forward, certainly anything that we missed in the fourth quarter of the previous year, we would expect them to pick up and show in the next quarter. And we're seeing that as our business continues to move forward. So I believe I've covered all of your key questions and again, thank you for that question to us.

Going forward certainly anything that we missed in the fourth quarter of the previous year, we would expect them to pick up and show in the next quarter and we're seeing that as our business continues to move forward. So I believe I've covered all of your key questions and again. Thank you for that for that question to us.

Daniel Jaffee: And then we believe that. So Susan, I'll turn it over to you, and then we will get into our Q&A. And Susan, we don't hear you. So you may be on mute. Susan? Susan, can you hear us? I wonder if Susan got disconnected. I'll go, you know me, I like open mic tonight. I'll cover some of the highlights and Susan if you get yourself back connected, I'm happy to turn the floor over to you.

Perfect. Thank you.

Speaker 3: The next we're going to combine two questions regarding advertising. The first is from Robert Smith. What were advertising expenses in the fourth quarter? How much of an increase are you budgeting for fiscal 24?

The next we're going to combine two questions regarding advertising. The first is from Robert Smith, what we're advertising expenses in the fourth quarter, how much of an increase are you budgeting for fiscal 'twenty four.

Speaker 3: And then the second part is from Ethan Star, an individual investor, and it also relates to advertising. What results are you seeing from the most recent Cap's Pride celebrity endorsement campaign with a prominent actress?

And then the second part is from Ethan Starr, an individual investor and it also relates to advertising what results are you seeing from the most recent celebrity endorsement campaign with a prominent acura are the results meeting or exceeding your expectations for a return on investment and I'm going to turn that over to Chris Lamson to anthrax.

Daniel Jaffee: But the fourth quarter was a record $107 million in net sales up 15% over the prior year, you know, and that helped us finish the year for over 400 million for the first time, 413-021, up 18% all year long, and you know obviously it's really what happened at the bottom line that was very exciting. What we reported was an increase in the fourth quarter of 129% up to 11.9 million, and a 421% increase up to 29 and a half million.

Speaker 3: Are the results meeting or exceeding your expectations for return on investment?

Speaker 5: Yeah, good morning, Robert and Ethan. Thanks for the thanks for the questions. The relative to advertise.

Yes, good morning, Robert and Nathan Thanks for the thanks for the questions.

The relative to advertising in this past year and the flow of our spend and looking ahead to next year.

Speaker 5: past year and the flow of our spend and looking ahead to next year. The consumer business spends the overwhelming majority of our advertising dollars so that's why I'm answering it. And yet we did spend roughly two-thirds of our total fiscal.

The consumer business the overwhelming majority of our advertising dollars. So that's why I'm answering it and yes, we did spend roughly two thirds of our total fiscal spend in Q4.

Speaker 5: spend in Q4. I look back at notes from previous calls. I know I've been signaling that for most of this past fiscal year on these calls. There were three reasons for it. One was we really wanted to advertise to full shelves and we knew that the supply chain would be stable. Dan alluded to it, better than stable. We're really nailing our service levels now. So we wanted to advertise to full shelves.

I look back at notes from previous calls I know I've been signaling that.

Daniel Jaffee: But the real story is the backouts, the two non-recurring events you remember we had an impairment charge back in fiscal 22, which was an accounting non-cash charge, and then really good for our future is we finally closed our defined benefit plan, our pension plan, and replaced it with a very generous defined contribution plan in the 401K. So when you back out those two non-recurring events, what you're really looking at from an apples to apples standpoint is an increase from $10 million 136 a year ago to $36 million 469 this year, and you know that's a 260% increase.

For most of this past fiscal year on these on these calls there are three reasons for it.

One was we really wanted to advertise the full shelves and we knew that the.

The supply chain would be stable, Dan alluded to it in a better than stable.

We're really nailing our service levels now so we wanted to advertise to full shelves.

Speaker 5: And we were moving our ad campaigns from our Litter for Good campaign, which we've been on for the last several years, to really emphasizing the benefits of lightweight.

And we are moving our AD campaigns from our litter for good campaign, which which we've been on for the last several years to really emphasizing the benefits of lightweight.

Speaker 6: And we were basically getting that content in the can and ready to go, which is now done and is hitting the air. And the third reason for it was we launched antibacterial litter at the very end of the fiscal year. And we were wanting to support that out of the gate and obviously into fiscal 24.

And we were basically getting that content Mccann and ready to go which is which is now done and is hitting the air and the third reason for it was we launched anti bacterial litter the very end of the fiscal year.

Daniel Jaffee: Obviously we report by segment, you've got our business to business segment, and their results were very much similar to what the company saw sales up 18% in the quarter, 26% year-to-date, and then operating income up 63% and 50, and then over on the retail and wholesale group led by Chris Lampson and his team, sales were up 14 and 15% and 67% and a robust 478%. Now if you put that in impairment charge back in, he was up only to he and his team up only 204%.

We were wanting to support that out of the gate and obviously into fiscal 'twenty four looking.

Speaker 6: Looking forward on fiscal 24, we will have modest uptick in spend on the full year, but it will be spread much more evenly than it was in the past year for the very three reasons that I articulated around why it was loaded in Q4. All three of those things are now present.

Looking forward on into fiscal 'twenty, four we will have modest uptick in spend on the full year, but it will be spread much more evenly than it was in the past year for the very three reasons that I.

Articulated around why it was loaded in Q4, all three of those things are not present going forward.

Speaker 6: So I think that it's Robert's question relative to influencers and our investments and content with celebrities and influencers.

So I think that it's Roberts question relative to Influencers and.

Daniel Jaffee: You know you guys can read the news release yourself so you don't need me to go through any more of it. We've got a lot of great questions from our investors. I appreciate that, and we have the team on hand to handle those questions. So Leslie, I'm going to turn it back over to you, and let's get into the Q&A and hear what our investors would like to hear from us about. Okay, sounds great. Susan, if you are back on the call, let us know. Otherwise, we're just going to continue.

Leslie Garber: You know you guys can read the news release yourself so you don't need me to go through any more of it. We've got a lot of great questions from our investors. I appreciate that, and we have the team on hand to handle those questions. So Leslie, I'm going to turn it back over to you, and let's get into the Q&A and hear what our investors would like to hear from us about.

Our investments in.

Content with celebrities and Influencers I would say overall, we like Influencers. We're looking at these rois constantly in real time that pretty dynamic.

Leslie Garber: Okay, sounds great. Susan, if you are back on the call, let us know. Otherwise, we're just going to continue.

Speaker 6: influencers. We're looking at these ROI constantly in real time, the pretty dynamic.

Speaker 6: and it's fun to play with the mix candidly and drive the highest ROI's. The content you're referring to did well for us. Other category experts in terms of influencers do extremely well for us. So expect us to keep up influencers, I'd say. Expect us to probably lean into those categories.

They're there and it's fun to play with the mix candidly and drive the highest rois.

The content, you're referring to did well for us other category experts in terms of Influencers do extremely well for us So expect us to keep up Influencers I'd say expect us to probably lean into those category experts.

Leslie Garber: Our first question comes from Robert Smith, and he is from the Center for Performance Investing, and his first question is with respect to Amlin, you say there were timing issues that affected the fourth quarter shortfall.

Wade Robey: Our first question comes from Robert Smith, and he is from the Center for Performance Investing, and his first question is with respect to Amlin, you say there were timing issues that affected the fourth quarter shortfall. What would the quarter have looked like without those issues, will the current quarter include all the shipments that missed the last quarter? What are the prospects for Amlin in fiscal 24?

Speaker 3: Right, thank you. The next question comes from John Bear. There have been numerous announcements recently of poultry and swine plant shutdowns in the US. Since quarter-and, have you seen any impact your domestic sales effort? Backing out the timing of shipments, causing softness in animal health sales in Latin America, Asia and China regions as noted in the press release, our animal health sales friends continuing to improve. The next question comes from John Bear.

Alright, thank you.

The next question comes from John Bair.

There have been numerous announcements recently of poultry and swine plant shutdowns in the U S.

Wade Robey: What would the quarter have looked like without those issues, will the current quarter include all the shipments that missed the last quarter? What are the prospects for Amlin in fiscal 24?

Quarter Al have you seen any impact to your domestic sales effort backing out the timing of shipments carbon softness in animal health sales in Latin America, Asia, and China regions as noted in the press release, our animal health sales trends continuing to improve.

Wade Robey: Thanks. Wade, can you please take that? Yes, thank you, Leslie. And thank you, Robert, for the question. You've got a number of questions in there, and I'll try to hit all of them pretty quickly. So with respect to our business in the animal nutrition space, we don't see a lot of feet in the valley quarter to quarter. So typically, we're pretty smooth as we continue to grow in all the world areas where we're participating.

Wayne.

Speaker 5: Thank you, Leslie, and again, thank you, John , for that question. Let me start with the last question, part of the question that you asked, and that was our animal health and sales trends continuing to improve. And the answer is yes, although I'll be at a differential depending upon the world area. So we are continuing to see impacts in the animal production industry around the world based on.

Thank you Leslie and again, thank you John for that question and let me let me start with the last question or part of the question that you asked and that was our animal health sales trends continuing to improve and the answer is yes, although albeit.

Wade Robey: We do sometimes see timing issues, as you've noted in your question. We have a logistics timing concern that comes in periodically in terms of how long it takes product to get to our Asian markets or to our Latin American markets. And that can sometimes cause us month to month or quarter to quarter to have more volatility than the business itself would typically show. And so that generally has affected our numbers at times on an individual quarter basis.

Differential depending upon the world area. So we are continuing to see impacts in the animal production industry around the world based on lingering effects of the pandemic as well as regional economies, but we are continuing to see that improve and the opportunity for our products to continue to improve and grow in those and those mark.

Speaker 5: lingering effects of the pandemic as well as regional economies.

Speaker 5: But we are continuing to see that improve and the opportunity for our products to continue to improve and grow in those more.

<unk>.

Speaker 5: In the US, yes, there there has been some depression of

In the U S. Yes, there has been some depression of profits.

Speaker 5: profitability among some of the largest integrators and producers.

Profitability among some of the largest integrators and producers what that really causes us a little bit more scrutiny as they look at new products and maybe a little longer lead time for us to penetrate and begin commercial sales, but because we're new in a couple of these markets like the U S with our new portfolio, we don't expect a significant impact.

Wade Robey: Going forward, certainly anything that we missed in the fourth quarter of the previous year, we would expect them to pick up and show in the next quarter. And we're seeing that as our business continues to move forward. So I believe I've covered all of your key questions. And again, thank you for that, for that question to us.

Speaker 5: What that really causes is a little bit more scrutiny as they look at new products and maybe a little longer lead time for us to penetrate and begin commercial sales. But because we're new in a couple of these markets, like the US with our new portfolio, we don't expect a significant impact. We'll work through it and we continue to see good testing, good adoption and good growth.

We will work through it and we continue to see good testing good adoption and good growth specifically in the U S, but around the world. So.

Unknown Executive: Perfect, thank you.

Chris Lamson: The next we're going to combine two questions regarding advertising. The first is from Robert Smith, what we're advertising expenses in the fourth quarter, how much of an increase are you budgeting for fiscal 24. And then the second part is from Ethan star an individual investor and it also relates to advertising what results are you seeing from the most recent past pride celebrity endorsement campaign with a prominent actress are the results meeting or exceeding expectations for return on investment.

Christopher Lamson: The next we're going to combine two questions regarding advertising. The first is from Robert Smith, what we're advertising expenses in the fourth quarter, how much of an increase are you budgeting for fiscal 24. And then the second part is from Ethan star an individual investor and it also relates to advertising what results are you seeing from the most recent past pride celebrity endorsement campaign with a prominent actress are the results meeting or exceeding expectations for return on investment.

Speaker 5: specifically in the US but around the world.

Speaker 5: Yes, conditions are continuing to persist a little bit and we hear that as we travel around and visit customers.

Yes conditions are continuing to persist a little bit and we hear that as we travel around and visit customers, but we continue to see great interest in our products and lots of new adoption and growth in all the markets that we're serving.

Speaker 5: But we continue to see great interest in our products and lots of new adoption and growth in all the markets that we're serving.

Speaker 3: Thank you. Okay, the next question comes from Ethan Star, and he asks to what extent are your costs continuing to increase if at all? And I think we're gonna have Aaron Kertzchen send handle that question.

Thank you.

Okay. The next question comes from Ethan Star and he asked to what extent are your costs continuing to increase if at all and I think we're going to have Aaron Christiansen handle that question.

Chris Lamson: And I'm going to turn that over to Chris Lampson to answer. Yeah, good morning, Robert and Ethan. Thanks for the thanks for the questions. The relative advertising and this past year and the flow of our spend and what looking ahead to next year, the consumer business, the overwhelming majority of our advertising dollars. So that's why I'm answering it. And yet we did spend roughly two thirds of our total fiscal spend in Q4. I looked back at notes from previous calls. I know I've been signaling that for most of this past fiscal year on these on these calls.

Christopher Lamson: And I'm going to turn that over to Chris Lampson to answer. Yeah, good morning, Robert and Ethan. Thanks for the thanks for the questions. The relative advertising and this past year and the flow of our spend and what looking ahead to next year, the consumer business, the overwhelming majority of our advertising dollars. So that's why I'm answering it. And yet we did spend roughly two thirds of our total fiscal spend in Q4. I looked back at notes from previous calls. I know I've been signaling that for most of this past fiscal year on these on these calls.

Speaker 7: Leslie, thank you, and Ethan, thanks for the question. I'm happy to answer it. Unfortunately, costs do continue to rise. I'll cite four things quickly. The first is the ECI or Employment Cost Index.

Leslie Thank you in the east and thanks for the question I'm happy to answer it.

Unfortunately cost do continue to rise.

Four things quickly.

The first is the ECA or employment cost index.

Speaker 7: Right now national compensation costs are up 4.5% over the last 12 months and have peaked as high as 5.5 in recent months. Well-dried continues to find ways to be competitive and total compensation for our teammates. So that's one key cost input. Second is the cost of materials and material input.

Right now National Conference total compensation costs are up four 5% over the last 12 months.

Peak as high as five and a half in recent months, while dry continues to find ways to be competitive in total compensation for our teammates.

So that's one key cost input.

Chris Lamson: Number three reasons for it. One was we really wanted to advertise the full shelves and we knew that the supply chain would be stable, Dan alluded to it, and better than stable. We're really nailing our service levels now. So we wanted to advertise to full shelves. And we were moving our ad campaigns from our litter for good campaign, which which we've been on for the last several years to really emphasizing the benefits of lightweight.

Christopher Lamson: Number three reasons for it. One was we really wanted to advertise the full shelves and we knew that the supply chain would be stable, Dan alluded to it, and better than stable. We're really nailing our service levels now. So we wanted to advertise to full shelves. And we were moving our ad campaigns from our litter for good campaign, which which we've been on for the last several years to really emphasizing the benefits of lightweight.

<unk>.

Is the cost of materials and material inputs. The consumer price index is up nine months in a row.

Speaker 7: consumer price index is up nine months in a row. Many of our suppliers and material bases peg their costs on the CPI. That's another area we're continuing to battle rising cost inputs. The third, and Dan alluded to it earlier, Ethan, is our ongoing repairable through expense and capital of our asset.

Many of our suppliers and material basis peg their cost on the CPI. That's another area, we're continuing to battle.

Rising cost inputs.

Third and Dan alluded to it earlier Ethan.

Is our ongoing repair both through expense and capital of our asset base oil dry has an aging infrastructure much of our asset base is now being replaced through a multi year capital strategy.

Chris Lamson: And we were basically getting that content in the can and ready to go, which is which is now done and is hitting the air. And the third reason for it was we launched antibacterial litter the very end of the fiscal year. And we were wanting to support that out of the gate and obviously into fiscal 24 looking forward on into fiscal 24. We will have modest up to consent on the full year, but it will be spread much more evenly than it was in the past year for the very three reasons that I articulated around why it was loaded in Q4 all three of those things.

Christopher Lamson: And we were basically getting that content in the can and ready to go, which is which is now done and is hitting the air. And the third reason for it was we launched antibacterial litter the very end of the fiscal year. And we were wanting to support that out of the gate and obviously into fiscal 24 looking forward on into fiscal 24. We will have modest up to consent on the full year, but it will be spread much more evenly than it was in the past year for the very three reasons that I articulated around why it was loaded in Q4 all three of those things.

Speaker 7: Oil dry has an aging infrastructure. Much of our asset base is now being replaced through a multi-year capital strategy. The cost to both repair and replace those assets is significantly higher than what was initially put on the book.

Costs are both repair and replace those assets is significantly higher than where it was initially put on the books for.

Speaker 7: It is mathematically impossible for us to maintain our depreciation base. And the last I'll mention Ethan is, remind the audience, reminding a new company, mining costs continue to rise, the cost of environmental and other regulation, as well as the natural reality of moving deeper and further from our factories. So,

It is mathematically impossible for us to maintain our depreciation base.

And the last I'll mention Ethan is remind the audience of our mining and milling company mining costs continue to rise.

Cost of environmental and other regulation as well as the natural reality of moving deeper and further from our factories.

Chris Lamson: Forward. So I think that it's Robert's question relative to influencers and our investments and content with celebrities and influencers. I would say overall we like influencers. We're looking at these ROI constantly in real time, the pretty dynamic. And it's fun to play with sex candidly and drive the highest ROI's. The content you're referring to did well for us. Other category experts in terms of influencers do extremely well for us. So expect us to keep up influencers, I'd say expect us to probably lean into those category experts. Right, thank you.

Christopher Lamson: Forward. So I think that it's Robert's question relative to influencers and our investments and content with celebrities and influencers. I would say overall we like influencers. We're looking at these ROI constantly in real time, the pretty dynamic. And it's fun to play with sex candidly and drive the highest ROI's. The content you're referring to did well for us. Other category experts in terms of influencers do extremely well for us. So expect us to keep up influencers, I'd say expect us to probably lean into those category experts. Right, thank you.

I Hope I answered your question Ethan.

Speaker 3: Thanks, Erin. The next question is from Robert Smith, and he asks, what accounts for the dramatic increase in diluted common shares, and I'm going to turn that over to David at.

Thanks Darrin.

The next question is from Robert Smith, and he asks what accounts for the dramatic increase in diluted common shares and I'm going to turn that over to David Atkins Fad.

Speaker 8: Thank you Leslie and thank you Robert for the question. Well I would like to point to is a notice we added an earnings per share reconciliation to note one. Although extremely unlikely we included the potential impact of all of our class B share at the Incomerated Department. There have been no issuances in the new share of those that support the restricted stock program which has been consistent prior years and you can see those numbers in foot yo

Thank you Leslie and thank you Robert for the question.

I would like to point to is you'll notice a or we entered in an earnings per share reconciliation to note one although extremely unlikely. We included the potential impact of all of our class b shares being converted to common.

There have been no issuance of new shares other than those that support the restricted stock program, which has been consistent with prior years and you can see those numbers in putting on number eight on the 10-K.

John Bear: The next question comes from John Bear. There have been numerous announcements recently of poultry and swine plant shutdowns in the U.S.

Okay.

Speaker 3: Okay, thank you. We will move on. Robert Smith asks, discuss your R&D efforts. Other new products coming in.

We will move on.

Robert Smith ask discuss your R&D effort other new products coming in into the current fiscal year and what is the R&D budget for the current year did it really declined meaningfully last year and if so why.

Wade Robey: Since quarter and have you seen any impact to your domestic sales efforts? Backing out the timing of shipments causing softness in animal health sales in Latin America, Asia and China regions as noted in the press release, our animal health sales friends continuing to improve. Wade? Thank you, Leslie. And again, thank you, John, for that question.

Speaker 3: the current fiscal year. And what is the R&D budget for the current year? Did it really decline meaningfully last year? And it's so wide. I'm also going to combine this because we're going to talk about some new products. I'm going to combine this question with John Behr's question, which I will read.

I'm also going to combine that because we're going to talk about some new products I'm going to combine this question.

Wade Robey: Wade? Thank you, Leslie. And again, thank you, John, for that question.

With John <unk> question, which I will read.

Wade Robey: Let me start with the last question or part of the question that you asked. And that was our animal health and sales friends continuing to improve. And the answer is yes, although I'll be at differential depending upon the world area. So we are continuing to see impacts in the animal production industry around the world based on lingering effects of the pandemic, as well as regional economies. But we are continuing to see that improve and the opportunity for our products to continue to improve and grow in those in those markets.

Speaker 3: which is when did you receive EPA approval for your new antibacterial product? Will this be marketed solely as a new standalone product or will the additive component be incorporated into your other product offerings to enhance your overall marketing efforts? So first I'm gonna have Wade answer the first part of the question and then he will turn it over to Chris to talk about our new antibacterial cat litter. Wade, do you wanna start us off?

Which is when did you receive EPA approval for your new antibacterial product will this be marketed solely as a new standalone product or will be additive component being incorporated into your other product offerings to enhance our overall marketing effort. So first I'm going to have Wade answer. The first part of the question and then he will turn it over.

To Chris to talk about our new anti bacterial cat litter.

Do you want to start us off.

Speaker 5: Yeah, thank you, Leslie. And again, thank you, Robert. We look at R&D effort trillion in two buckets, what we would call traditional R&D that we do at Innovation Center, and then at Contract Research Organizations as we do true discovery and product development. The second element of it is really our field validation work that we either do directly with customers or at regional universities.

Yes, Thank you Leslie and again, thank you Robert.

We broker we look at our R&D efforts really in two buckets, what we what we would call traditional R&D that we do earn at our innovation Center and then.

Wade Robey: In the U.S, yes, there has been some depression of profitability among some of the largest integrators and producers. What that really causes is a little bit more scrutiny as they look at new products and maybe a little longer lead time for us to penetrate and begin commercial sales. But because we're new in a couple of these markets, like the U.S, with our new portfolio, we don't expect a significant impact. We'll work through it and we continue to see good testing, good adoption and good growth, specifically in the U.S, but around the world.

Contract research organizations as we do true discovery and product development. The second element of it is really our field validation work that we either do directly with customers or at regional universities that help validate the performance of our products and encourage customer adoption as a <unk>.

Speaker 5: that help validate the performance of our products and encourage customer adoption.

Speaker 5: As a result of that, we can see pretty significant volatility either within a year or across years.

Of that we can see pretty significant volatility either with any year or across years, because obviously the R&D efforts that we do.

Wade Robey: So yes, conditions are continuing to persist a little bit and we hear that as we travel around and visit customers. But we continue to see great interest in our products and lots of new adoption and growth in all the markets that we're serving.

Speaker 5: because obviously the R&D efforts that we do in research and discovery tend to be a lot more expensive than the field validation work. Currently we're really focusing on field validation as we have two new products that we're introducing into the market. Those are being evaluated both at universities, as I mentioned, but also in direct customer trials.

Research and discovery tend to be a lot more expensive than the field validation work.

Unknown Executive: Thank you.

Currently we are really focusing on field validation as we have two new products that were.

Introducing into the market those are being evaluated both the universities as I mentioned, but also indirect customer trials. These sorts of evaluations allow us to be a lot more efficient with our spend oftentimes, we're actually selling the product as we as we move into the market, sometimes at a discounted price but.

Aaron Christiansen: Okay, the next question comes from Ethan Star and he asks, to what extent are your costs continuing to increase if at all? And I think we can have Aaron Christiansen handle that question. Leslie, thank you and Ethan, thanks for the question. I'm happy to answer it. Unfortunately, the first is the ECI or employment cost index. Right now, national total compensation costs are up 4.5% over the last 12 months and have peaked as high as 5.5 in recent months.

Speaker 5: these sorts of evaluations allow us to be a lot more efficient with our spend.

Speaker 5: Oftentimes we're actually selling the product as we as we move it to the market. Sometimes at a discounted price, but

Speaker 5: selling the product as we do those field validations with customers. So it really offsets some of the R&D expense that you would normally see. That's what causes our volatility. And again, given where we are in the rollout of the existing two products into the marketplace, it's causing us or allowing us to be a little bit more efficient in R&D spend in the current year. Okay, with that, I'll turn it over to Chris. Thanks, Wade. And...

Selling the product as we do those field validation with customers. So it really offset some of the R&D expense that you would normally see and thats what causes our volatility and again, given where we are in the rollout of the existing two products into the marketplace, it's causing us are allowing us to be a little bit more efficient in R&D spend in the current year.

Aaron Christiansen: Unfortunately, the first is the ECI or employment cost index. Right now, national total compensation costs are up 4.5% over the last 12 months and have peaked as high as 5.5 in recent months. Well-drive continues to find ways to be competitive and total compensation for our teammates. So that's one key cost input.

Okay with that I'll turn it over to Chris.

Aaron Christiansen: Well-drive continues to find ways to be competitive and total compensation for our teammates. So that's one key cost input. Second is the cost of materials and material inputs. The consumer price index is up nine months in a row. Many of our suppliers and material bases pegged their costs on the CPI. That's another area we're continuing to battle rising cost inputs. The third and then alluded to it earlier, Ethan, is our ongoing repair, both through expense and capital of our assets.

Okay.

Thanks, Wade and thanks for the question John .

Aaron Christiansen: Second is the cost of materials and material inputs. The consumer price index is up nine months in a row. Many of our suppliers and material bases pegged their costs on the CPI. That's another area we're continuing to battle rising cost inputs.

So I'll pull back really quick and just elaborate on the launch.

Speaker 6: Pull back really quick and just elaborate on the launch. So at the very end of fiscal 23, we launched a well dry cat's pride anti-bacterial clumping litter. The first and only EPA approved anti-bacterial litter here in the US. The story's killed 99.9% of odor causing bacteria. And it helps, obviously, further. I yourself don't believe it. And this is anybody we'll let go?

So at the very end of fiscal 2003, we launched oil dry cat's pride anti bacterial clumping litter, the first and only EPA approved anti bacterial later here in the U S.

Historic kills 99 point.

Aaron Christiansen: The third and then alluded to it earlier, Ethan, is our ongoing repair, both through expense and capital of our assets. Well-Dri has an aging infrastructure. Much of our asset base is now being replaced through multi-year capital strategy. The costs are both repair and replace those assets is significantly higher than what it was initially put on the book for. It is mathematically impossible for us to maintain our depreciation base.

9% of odor, causing bacteria.

And.

It helps obviously further.

Aaron Christiansen: Well-Dri has an aging infrastructure. Much of our asset base is now being replaced through multi-year capital strategy. The costs are both repair and replace those assets is significantly higher than what it was initially put on the book for. It is mathematically impossible for us to maintain our depreciation base. And the last I'll mention Ethan is reminding the audience, reminding a whole company, mining costs continue to rise, the cost of environmental and other regulation, as well as the natural reality of moving deeper and further from our factories. So I'll by answered your question Ethan. Thanks Aaron.

Speaker 6: the highly the high effectiveness of our clay. This really helps further relative to odor control and obviously the broader family at your home and the consumer very much takes this benefit to the cat not tracking nasties, if you will, through the home.

Yes.

The highly the high effectiveness of our clay.

Really helps further relative to odor control and then obviously the broader sanitary helm.

Consumer very much takes.

It takes this benefit to the cap not tracking.

Nasties, if you will through the home.

Speaker 5: And we're excited about it and I can tell you retailers are excited about it. So, you know, where cat's pride is particularly strong, which is up and down the East Coast, and then to the southeast, virtually all of our customers have taken it into distribution, and not only just distribution, but incremental distribution.

And we're excited about it and I can value retailers are excited about it. So we're cat's pride is particularly strong which is up and down the east coast and then to the southeast virtually all of our customers have taken it into distribution and not only just distribution, but incremental distribution.

Aaron Christiansen: And the last I'll mention Ethan is reminding the audience, reminding a whole company, mining costs continue to rise, the cost of environmental and other regulation, as well as the natural reality of moving deeper and further from our factories. So I'll by answered your question Ethan. Thanks Aaron.

Speaker 6: I'll come back to your question on timing, but insightful question around launching it against, you know, everything or launching it against the base versus an incremental item.

I'll come back to your question on timing, but insightful question around launching it again.

David Atkinson: The next question is from Robert Smith and he asks what accounts for the dramatic increase in diluted common shares and I'm going to turn that over to David Atkinson. Thank you Leslie and thank you Robert for the question. What I would like to point to is a notice that we added an earnings per share reconciliation to note one. Although extremely unlikely, we included the potential impact of all of our class B shares being converted to common.

Everything or launching it against the base versus incremental item that choice out of the gate was deliberate we wanted to build use it as an opportunity to build out our shelf space and really highlight a new benefit.

Speaker 6: That choice out of the gate was deliberate. We wanted to build use it as an opportunity to build out our shelf space and really highlight a new benefit to the category.

To the category.

Speaker 6: We are, as we speak, innovating further against this benefit. We think it's a big deal. Our customers think it's a big deal. Our consumer returns on it.

As we speak innovating further against this benefit we think it's a big deal our customers think it is a big deal or consumer returns on it.

David Atkinson: There have been no issuances in new shares other than those that support the restricted stock program which has been consistent prior years and you can see those numbers and put on number eight on the 10K. Okay thank you.

Speaker 6: both from an early takeaway perspective, but also from the research led up to it, we're all very positive. I will tell you the EPA process is quite long.

Both from a early takeaway perspective, but also from the research led up to it were all very positive.

I will tell you the EPA process is quite long.

Speaker 6: which is a good thing and a bad thing. It builds a really nice moat around us driving this benefit. We received federal approval at this point more than 18 months ago. You then, and these cannot be parallel paths, once you have federal approval, you go through all each of the space and gain their approval as well.

Which is a good thing and a bad thing.

Unknown Executive: We will move on.

It builds a really nice moat around us driving this benefit.

Robert Smith: Robert Smith asks discuss your R&D efforts. Other new products coming in into the current fiscal year and what is the R&D budget for the current year? Did it really decline meaningfully last year and it's so why? I'm also going to combine this because we're going to talk about some new products. I'm going to combine this question with John Bears question which I will read which is when did you receive EPA approval for your new antibacterial product?

David Atkinson: Robert Smith asks discuss your R&D efforts. Other new products coming in into the current fiscal year and what is the R&D budget for the current year? Did it really decline meaningfully last year and it's so why? I'm also going to combine this because we're going to talk about some new products. I'm going to combine this question with John Bears question which I will read which is when did you receive EPA approval for your new antibacterial product?

We received federal approval at this point more than 18 months ago. You then and these cannot be parallel path once you're a federal approval you go through all each each of the states and gain their approval as well.

Speaker 6: which like I said, builds a moat around things, but we'll also...

Which like I said build a moat around things, but we'll also.

Speaker 6: create long lead times for our further development here, which, like I said, is very much fun.

Create long lead times for our further development here.

Like I said is very much underway.

Robert Smith: Will this be marketed solely as a new standalone product or will the additive component be incorporated into your other product offerings to enhance your overall marketing efforts? So first I'm going to have Wade answer the first part of the question and then he will turn it over to Chris to talk about our new antibacterial cat litter. Wade do you want to start us off? Yeah thank you Leslie and again thank you Robert.

David Atkinson: Will this be marketed solely as a new standalone product or will the additive component be incorporated into your other product offerings to enhance your overall marketing efforts? So first I'm going to have Wade answer the first part of the question and then he will turn it over to Chris to talk about our new antibacterial cat litter. Wade do you want to start us off? Yeah thank you Leslie and again thank you Robert.

Speaker 6: We're excited about the benefit and we're excited about the initial return.

We're excited about the benefit and more excited about the initial returns we're getting on the item.

Speaker 3: Thanks, Chris. Okay, the question comes from Ethan Star, and he asks, is Amelie making progress towards getting one or more significant orders from large producers of cattle, poultry, or swine? And Wade, can you please answer that?

Thanks, Chris.

Okay question comes from Ethan Star and he asks.

And we're making progress towards getting one or more significant orders from large producers of paddle poultry our swine.

Wade can you please answer that.

Speaker 5: Yes, thanks Leslie and again thank you Ethan. The simple answer is yes if you look at the market in North America we're already selling to several of the largest integrators in the North American market.

Robert Smith: We breaker we look at our R&D effort trillion in two buckets what we what we would call traditional R&D that we do at an innovation center and then at contract research organizations as we do true discovery and product development. The second element of it is really our field validation work that we either do directly with customers or at regional universities that help validate the performance of our of our products and encourage customer adoption.

David Atkinson: We breaker we look at our R&D effort trillion in two buckets what we what we would call traditional R&D that we do at an innovation center and then at contract research organizations as we do true discovery and product development. The second element of it is really our field validation work that we either do directly with customers or at regional universities that help validate the performance of our of our products and encourage customer adoption.

Yes, Thanks, Leslie and again, thank you Ethan.

The simple answer is yes, if you look at.

Market in North America, we're already selling to several of the largest integrators in the North American market.

Speaker 5: That is continuing to grow with recent penetration, again, in a number of the key accounts here in North America. So great progress there as we continue to launch our portfolio here in the United States.

That is continuing to grow with recent penetration again in a number of the key accounts here in North America. So great progress there as we continue to launch our portfolio here in the United States as you look around the world.

Speaker 5: As you look around the world, we have been in those markets a little bit longer and so they're a little bit more established for us.

Robert Smith: As a result of that we can see pretty significant volatility either within a year or across years because obviously the R&D efforts that we do in research and discovery tend to be a lot more expensive than the field validation work. Currently we're really focusing on field validation as we have two new products that we're introducing into the market. Those are being evaluated both at universities as I mentioned but also in direct customer trials.

David Atkinson: As a result of that we can see pretty significant volatility either within a year or across years because obviously the R&D efforts that we do in research and discovery tend to be a lot more expensive than the field validation work. Currently we're really focusing on field validation as we have two new products that we're introducing into the market. Those are being evaluated both at universities as I mentioned but also in direct customer trials.

We have been in those markets, a little bit longer and so there are a little bit more established for us, but we continue to see expanded.

Speaker 5: But we continue to see expanded growth of our sales into alternative species to poultry.

Growth of our sales into alternative species to poultry.

Speaker 5: So in the room and market specifically in dairy, some of our largest customers in Asia are actually in the dairy sector. And we're seeing that being replicated now in Latin America in the cattle market and the beef cattle market. So another room and its species.

In the ruminant market, specifically in dairy some of our largest customers in Asia are actually in the dairy sector and we're seeing that being replicated now in Latin America in the cattle market in the beef cattle market. So another ruminant species, but we're seeing new testing and moving towards adoption of some of the largest <unk>.

Robert Smith: These sorts of evaluations allow us to be a lot more efficient with our spend. Oftentimes we're actually selling the product as we as we move it to the market. Sometimes at a discounted price but selling the product as we do those field validations with customer. It really offsets some of the R&D expense that you would normally see. That's what causes our volatility and again given where we are in the rollout of the existing two products into the marketplace. It's causing us or allowing us to be a little bit more efficient in R&D spend in the current year.

David Atkinson: These sorts of evaluations allow us to be a lot more efficient with our spend. Oftentimes we're actually selling the product as we as we move it to the market. Sometimes at a discounted price but selling the product as we do those field validations with customer. It really offsets some of the R&D expense that you would normally see. That's what causes our volatility and again given where we are in the rollout of the existing two products into the marketplace. It's causing us or allowing us to be a little bit more efficient in R&D spend in the current year.

Speaker 5: But we're seeing new testing and moving towards adoption or some of the largest cattle operations in Latin America, specifically in Brazil. So we're excited about that. Continue to see the broad multi-species applicability of our products.

Cattle operations in Latin America, specifically in Brazil. So we're excited about that continue to see the broad multi species flexibility of our products and the application of them in solutions that are really allowing us to grow our participation in these in these market. So.

Speaker 5: and the application of them in solutions that are really allowing us to grow our participation in these markets.

Speaker 5: Yes, absolutely, and we expect to see continued progress in this way in the coming year.

Yes, absolutely and we expect to see continued progress in this way in the coming year.

Wade Robey: Okay, with that, I'll turn it over to Chris. Thanks, Wade, and thanks for the question, John. So I'll pull back really quick and just elaborate on the launch. So at the very end of fiscal 23, we launched Oil-Dri cat's pride antibacterial clumping litter. The first and only EPA approved antibacterial litter here in the U.S. The story skills 99.9% of odor causing bacteria and it helps, obviously, further the high effectiveness of our clay.

Christopher Lamson: Okay, with that, I'll turn it over to Chris. Thanks, Wade, and thanks for the question, John.

Great. Thank you.

Speaker 3: Great, thank you. Next question comes from John Bear, and he says, a recent article in the Wall Street Journal had lines, Ocean Freight Rates Pressure, which highlight a significant drop in East Coast to China shipping costs among other routes. So are you seeing or beginning to see any benefit in your shipping costs? I'm going to turn that over to Erin to answer.

Next question comes from John Bair, and he says a recent article in the Wall Street Journal headlined.

<unk> freight rate pressures, which highlight a significant drop in the east coast of China shipping costs. Among other routes. So are you seeing are beginning to see any benefit in your shipping costs.

Christopher Lamson: So I'll pull back really quick and just elaborate on the launch. So at the very end of fiscal 23, we launched Oil-Dri cat's pride antibacterial clumping litter. The first and only EPA approved antibacterial litter here in the U.S. The story skills 99.9% of odor causing bacteria and it helps, obviously, further the high effectiveness of our clay. This really helps further relative to odor control and then obviously the broader sanitary home and the consumer very much takes, takes this benefit to the cat not tracking nasties, if you will, through the home.

Wade Robey: This really helps further relative to odor control and then obviously the broader sanitary home and the consumer very much takes, takes this benefit to the cat not tracking nasties, if you will, through the home. And we're excited about it and I can tell you retailers are excited about it. So, you know, where cat's pride is particularly strong, which is up and down the east coast and then to the southeast, virtually all of our customers have taken it into distribution and not only just distribution but incremental distribution.

Christopher Lamson: And we're excited about it and I can tell you retailers are excited about it. So, you know, where cat's pride is particularly strong, which is up and down the east coast and then to the southeast, virtually all of our customers have taken it into distribution and not only just distribution but incremental distribution.

And I'll turn it over to Aaron to answer.

Speaker 7: Yeah, John , I'm happy to answer the question you heard me earlier talk about where we're still struggling with inflating cost inputs. This definitely is an area where we're seeing cost relief.

Yes, John I'm happy to answer the question you heard me earlier talk about where were still struggling with.

Inflating cost inputs. This definitely is an area, where we're seeing cost relief.

Speaker 7: Freight, both domestic and export has come down and stabilized. We are seeing that and have been able to take advantage of it. That was the place, however, where it became the most extreme and most inflated during the supply chain challenges and pre-pandemic. Those costs are not back to historical levels, but we have definitely seen relief.

Freight both domestic and export has come down and stabilize.

We are seeing that I haven't been able to take advantage of it.

That was the place however, where it became the most extreme and most inflated during the supply chain challenges and pre pandemic those costs are not back to historical levels, but we definitely see relief.

Speaker 7: As important, if not more so to us, has been the improvement in reduction in lead times. Dan alluded earlier to our great service. We're thankful to be back to a place where international freight is more predictable in lead time to allow us to meet our customers on time.

As important if not more so to us has been the improvement and reduction in lead times and alluded earlier to our great service.

Thankful to be back to a place where international freight is more predictable and lead time to allow us to meet our customers on time needs.

Speaker 3: Perfect. Great. Thank you. So I am going to see Susan. Is your line working now?

Perfect.

Wade Robey: I'll come back to your question on timing, but insightful question around launching it against, you know, everything or launching it against the base versus an incremental item. That choice out of the gate was deliberate. We wanted to build use it as an opportunity to build out our shelf space and really highlight a new benefit to the category. We are, as we speak, innovating further against this benefit. We think it's a big deal.

Christopher Lamson: I'll come back to your question on timing, but insightful question around launching it against, you know, everything or launching it against the base versus an incremental item. That choice out of the gate was deliberate. We wanted to build use it as an opportunity to build out our shelf space and really highlight a new benefit to the category. We are, as we speak, innovating further against this benefit. We think it's a big deal. Our customers think it's a big deal. Our consumer returns on it both from a early takeaway perspective but also some of the research led up to it. We're all very positive.

Great. Thank you so I'm going to do.

Susan Your line working now.

Speaker 3: Okay, so the next question I'm going to have Dan Jaffe answers from Robert Smith. Please remind me about the seasonality and the quarterly numbers. Dan, do you want to take that?

Okay. So the next question I'm going to have Dan Jaffee answers from Robert Smith.

Please remind me about the seasonality in our quarterly numbers and you want to take that.

Speaker 2: Yeah, good question. I think what you see is that generally, there's not a lot of seasonality in our business when you take into account our diversified portfolio of products. Obviously, there is some seasonality within the individual products. You've got the pros choice, which is reliant on ball field.

Yes.

Good question I think what you see is that generally there is not a lot of seasonality in our business. When you take into account our diversified portfolio of products. Obviously there is there is some seasonality within the individual products you've got the approach choice, which is reliant on ball field usage. So.

Wade Robey: Our customers think it's a big deal. Our consumer returns on it both from a early takeaway perspective but also some of the research led up to it. We're all very positive. I will tell you the EPA process is quite long, which is a good thing and a bad thing. It builds a really nice moat around us driving this benefit. We received federal approval at this point more than 18 months ago. You then and these cannot be parallel paths.

Christopher Lamson: I will tell you the EPA process is quite long, which is a good thing and a bad thing. It builds a really nice moat around us driving this benefit. We received federal approval at this point more than 18 months ago. You then and these cannot be parallel paths. Once you have federal approval, you go through all each of the space and gain their approval as well, which, like I said, builds a moat around things but we'll also create long lead times for our further development here, which like I said, is very much underway. We're excited about the benefit and we're excited about the initial returns we're getting on the item.

Speaker 2: So while we do an early foul in the winter months, really the predominant uses in the spring.

While we do an early sell in the winter months really the predominant users in the spring.

Speaker 2: the summer and the fall. You've then got our Bluewood's Purification business, which is very much tied to when they harvest the crop. So, you know, their fourth quarter could be our biggest of the year.

The summer and the fall you've then got our blue fluids purification business, which is very much tied to when they harvest the crop. So therefore quarter it could be our biggest of the year, but net net net net when you put it all together, we're relatively flat, which is nice which again further validates our diverse portfolio and.

Wade Robey: Once you have federal approval, you go through all each of the space and gain their approval as well, which, like I said, builds a moat around things but we'll also create long lead times for our further development here, which like I said, is very much underway. We're excited about the benefit and we're excited about the initial returns we're getting on the item.

Speaker 2: But net, net, net, net, when you put it all together, we're relatively flat, which is nice, which again further validates our diverse portfolio. And that's what we've always tried to do. We've always tried to...

That's what we've always tried to do.

Always drive.

Speaker 2: supply markets and deliver value across a wide range of applications. So that over the course of a year, some are up, some are down. We just happen to get very fortunate that last year they pretty much were all up, which was very, it was a great time to be in our calcium vet night business last year. And we see a lot of momentum heading...

The supply markets and deliver value across a wide range of applications. So that over the course of a year. Some are up some are down we just happen to get very fortunate that last year. They pretty much were all up which was very it was a great time to be in our calcium bentonite business last year, and we see a lot of momentum heading in.

Chris Lamson: Thanks, Chris.

Unknown Executive: Thanks, Chris. Okay.

Unknown Executive: Okay.

Ethan Star: The question comes from Ethan Star and he asks, is Amlin making progress towards getting one or more significant orders from large producers of paddle, poultry, or swine? And Wade, can you please answer that? Yes. Thanks, Leslie. Again, thank you, Ethan.

Wade Robey: The question comes from Ethan Star and he asks, is Amlin making progress towards getting one or more significant orders from large producers of paddle, poultry, or swine? And Wade, can you please answer that? Yes. Thanks, Leslie. Again, thank you, Ethan. The simple answer is yes. If you look at the market in North America, we're already selling to several of the largest integrators in the North American market. That is continuing to grow with recent penetration again and a number of the key accounts here in North America.

Speaker 2: So thank you for your question, but there's really not enough seasonality across the consolidated business that you would have to.

So.

So thank you for your question, but there's really not enough seasonality across the consolidated business that you would have to take that into your model I see a question just came in about Clorox I'm happy to take that one Aaron obviously, you could take it too, but I've got the mic and I'm not giving it up.

Speaker 2: take that into your model. I see a question just came in about Clorox. I'm happy to take that one. Aaron, obviously you could take it too, but I've got the mic and I'm not giving it up. And Chris, actually you could talk. But you guys have educated me on this. For those of you wondering where this question is coming from, they've put out, they meaning Clorox have put out a lot of newsroom.

Wade Robey: The simple answer is yes. If you look at the market in North America, we're already selling to several of the largest integrators in the North American market. That is continuing to grow with recent penetration again and a number of the key accounts here in North America. So great progress there as we continue to launch our our portfolio here in the United States. As you look around the world, we have been in those markets a little bit longer and so they're a little bit more established for us, but we continue to see expanded growth of our sales into alternative species to poultry.

Yes, and Chris actually you could you could talk to what you guys have educated me on this for those of you wondering where this question is coming from.

Put out they meaning clorox have put out a lot of news releases around the fact that they've had some cyber problem cyber security problems with their.

Speaker 2: around the fact that they've had some cyber problems, cyber security problems with their

Wade Robey: So great progress there as we continue to launch our our portfolio here in the United States. As you look around the world, we have been in those markets a little bit longer and so they're a little bit more established for us, but we continue to see expanded growth of our sales into alternative species to poultry. So in the room in a market specifically in dairy, some of our largest customers in Asia are actually in the dairy sector and we're seeing that being replicated now in Latin America in the cattle market and the beef cattle market.

Speaker 2: ERP system and it is it is wreak havoc on them. There's no doubt that their supply chains then got

ERP system and it is it is recap them there is no doubt that their supply chains than got.

Speaker 2: their inventories were sold through and the shelves were getting pretty bare Happy to say that they they they seem to fix their problems the orders are back and they seem to be even playing ketchup mode So you know, what do I think the the impact will be on us? There are second largest customers. So obviously they're very important

Shrunk their inventories were sold through and the shelves were getting pretty bare.

Wade Robey: So in the room in a market specifically in dairy, some of our largest customers in Asia are actually in the dairy sector and we're seeing that being replicated now in Latin America in the cattle market and the beef cattle market. So another room in its species. But we're seeing new testing and moving towards adoption or some of the largest cattle operations in Latin America specifically in Brazil. So we're excited about that.

To say that they seemed to fix their problems. The orders are back and they seem to be even playing catch up mode. So what do I think the impact will be on us.

Wade Robey: So another room in its species. But we're seeing new testing and moving towards adoption or some of the largest cattle operations in Latin America specifically in Brazil. So we're excited about that. Continue to see the broad multi-species applicability of our products and the application of them in solutions that are really allowing us to grow our participation in these markets. So yes absolutely and we expect to see continued progress in this way in the coming year. Great, thank you.

They are our second largest customer so obviously they are very important to us.

Speaker 2: But I think in the first quarter, which is August of September and October , by the time we hit the peaks in the valleys, it'll generally be, it'll be an immaterial difference. That's what I'm hoping for. It might be slightly material, but it's not going to derail our quarters. So good question, and we do certainly support and wish clocks the best as they dig themselves out of.

But I think in the first quarter, which is August September and October by the time, we hit the peaks and the valleys they'll generally be it'll be an immaterial difference that's what I'm, hoping for it might be slightly material, but it's not going to derail our quarter. So good question and we do certainly support and wish Clorox is the best.

Wade Robey: Continue to see the broad multi-species applicability of our products and the application of them in solutions that are really allowing us to grow our participation in these markets. So yes absolutely and we expect to see continued progress in this way in the coming year.

Dig themselves out of this.

Unknown Executive: Great, thank you.

Speaker 3: Lovely. Are there any other questions you want to cover before I head out? There's just water. We're going to take this one last question from John Bear and do you see any significant increase or need to increase capital expenditures for upgrades or replacements of plant operations over the next three years? And I know Aaron's. I'm going to stop it out of Aaron.

Obviously are there any other questions you want to cover before I.

In closing I would just what we're going to take this one last question from John Bair and his question is do you see any significant increase or need to increase capital expenditures for upgrades or replacements of plant operations over the next three years.

John Bear: Next question comes from John Bear, and he says a recent article in the Wall Street Journal had lines, ocean freight race pressures, which highlight a significant drop in East Coast to China shipping costs among other routes. So are you seeing or beginning to see any benefit in your shipping costs?

Aaron Christiansen: Next question comes from John Bear, and he says a recent article in the Wall Street Journal had lines, ocean freight race pressures, which highlight a significant drop in East Coast to China shipping costs among other routes. So are you seeing or beginning to see any benefit in your shipping costs?

And I know Eric.

Aaron.

Speaker 2: Yeah, have Aaron do it, but the answer is a resounding yes, but Aaron, you know, talk about

But the answer is a resounding, yes, but aaron talked about it yes.

Speaker 7: Yeah, Dan already answered the key message, which is a resounding yes, John . But it's also already planned for. Dan alluded to it earlier, and I alluded to it earlier. We are already in the midst of a multi-year cycle.

Aaron Christiansen: I'm going to turn it over to Aaron to answer. Yeah, John, I'm happy to answer the question. You heard my earlier talk about where we're still struggling with inflating cost inputs. This definitely is an area where we're seeing cost relief freight, both domestic and export has come down and stabilized. We are seeing that and it will take advantage of it. That was the place, however, where it became the most extreme and most inflated during the supply chain challenges and pre pandemic, those costs are not back to historical levels, but we've definitely seen relief.

As Dan already answered the key message, which is a resounding yes John .

But it's also already planned for Dan alluded to it earlier and I alluded to it earlier, we are already in the midst of a multi year cycle.

Speaker 7: of a higher level of capital spending that historical. We already have a very intelligently built five to 10 year plan. The plan's for it. We're looking for intelligent ways to overlap business continuity investments, growth investments, and savings investments.

Of a higher level of capital spending the historical.

It is we already have a very intelligently built five to 10 year plan.

The plans for it we're looking for intelligent ways to overlap business continuity investments growth investments and savings investments, so, yes, and already well planned for and aligned on organizationally John .

Speaker 7: So yes, and already well planned for an aligned on organizationally just.

Aaron Christiansen: As important, if not more so to us, has been the improvement in reduction in lead times and alluded earlier to our great service, we're thankful to be back to a place where international freight is more predictable and lead time to allow us to meet our customers on time needs.

Unknown Executive: As important, if not more so to us, has been the improvement in reduction in lead times and alluded earlier to our great service, we're thankful to be back to a place where international freight is more predictable and lead time to allow us to meet our customers on time needs. Perfect. Great, thank you.

Speaker 2: And I would add, you know, I just want to thank our customers because we've had to go out to them and say, look, this depreciation that we're charging is based on historic costs. And as we're replacing these assets, it's costing twice, easily, twice as much to replace these assets that were put into service 15 and 20 years ago.

And I would add I just want to thank our customers because we've had to go out to them and say look this depreciation that we're charging is based on historic cost and as we're replacing these assets. It's costing twice easily twice as much to replace these assets that were put into service 2015, and 20 years ago and they want us.

Speaker 2: And they want us to be healthy. They want us to be able to replace our capital so that we can continue to supply them the quality and quantity that they require and value.

Unknown Executive: Perfect. Great, thank you.

To be healthy they want us to be be able to replace our capital. So that we can continue to supply them the quality and quantity that they require and value and they've received the message very well and we very much appreciate it. So my customers are listening if our customers are listening. Thank you very much.

Unknown Executive: So I am going to see Susan, is your line working now?

Daniel Jaffee: So I am going to see Susan, is your line working now? Okay, so the next question I'm going to have Dan Jaffe answers from Robert Smith. Please remind me about the seasonality and the quarterly numbers. Dan, do you want to take that? Yeah, good question. I think what you see is that generally, there's not a lot of seasonality in our business when you take into account our diversified portfolio of products. Obviously, there is, there is some seasonality within the individual products.

Daniel Jaffee: Okay, so the next question I'm going to have Dan Jaffe answers from Robert Smith. Please remind me about the seasonality and the quarterly numbers. Dan, do you want to take that? Yeah, good question. I think what you see is that generally, there's not a lot of seasonality in our business when you take into account our diversified portfolio of products. Obviously, there is, there is some seasonality within the individual products. You've got the pros choice, which is, you know, rely on ball field usage.

Speaker 2: and they've received the message very well and we very much appreciate it.

Speaker 2: So my customers are listening. If our customers are listening, thank you very much. Obviously we're all in this together. We're out of time. I am assuming everyone is happy with the quarter, happy with the fiscal year. I know the team and I are. And we very much look forward to talking to you after our first quarter, which ends October 31st. And we'll be at our next telecom, so it'll be the first quarter of F-24. So until then, be safe, be healthy, and thank you very much for your support. Thank you very much.

Obviously, we're all in this together we're out of time.

I'm, assuming everyone is happy with the quarter happy with the fiscal year I know the team in IR and we very much look forward to talking to you. After our first quarter, which ends October 31, and will be at our next teleconference will be the first quarter about 24, so until then.

Daniel Jaffee: You've got the pros choice, which is, you know, rely on ball field usage. So while we do an early sell in the winter months, really the predominant uses in the spring, the summer and the fall, you've then got our blue fluid purification business, which is very much tied to when they harvest the crop. So, you know, their fourth quarter could be our biggest of the year. But net, net, net, net, when you put it all together, we're relatively flat, which is nice, which again further validates our diverse portfolio.

Daniel Jaffee: So while we do an early sell in the winter months, really the predominant uses in the spring, the summer and the fall, you've then got our blue fluid purification business, which is very much tied to when they harvest the crop. So, you know, their fourth quarter could be our biggest of the year. But net, net, net, net, when you put it all together, we're relatively flat, which is nice, which again further validates our diverse portfolio.

Safe be healthy and thank you very much for your support.

Speaker 1: This concludes today's conference call. Thank you for participating. You may now disconnect.

Okay.

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

You may now disconnect.

Daniel Jaffee: And that's what we've always tried to do. We've always tried to, you know, supply markets and deliver value across a wide range of applications. So that over the course of a year, summer up, summer down, we just happen to get very fortunate that last year, they pretty much were all up, which was very, it was a great time to be in our calcium vet night business last year. And we see a lot of momentum heading in new. So, so thank you for your question.

Okay.

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Daniel Jaffee: But there's really not enough seasonality across the consolidated business that you would have to take that into your model. I see a question just came in about clocks. I'm happy to take that one. Aaron, obviously, you could take it too, but I've got the mic and I'm not giving it up. And Chris, actually, you could talk to, but you guys have educated me on this for those of you are wondering where this question is coming from.

Yes.

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Daniel Jaffee: They've put out, they mean chlorox have put out a lot of news releases around the fact that they've had some cyber problems, cyber security problems with their. ERP system, and it is wreak havoc on them. There's no doubt that their supply chains then got shrunk, or their inventories were sold through, and the shelves were getting pretty bare. Happy to say that they seem to go fix their problems. The orders are back, and they seem to be even playing ketchup modes.

Yes.

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Daniel Jaffee: So what do I think the impact will be on us? There are second largest customers, so obviously they're very important to us. But I think in the first quarter, which is August September and October, by the time we hit the peaks in the valleys, they'll generally be, it'll be an immaterial difference. That's what I'm hoping for. It might be slightly material, but it's not going to derail our quarters. So good question, and we do certainly support and wish Chlorox the best as they dig themselves out of this. Lovely.

Unknown Executive: Lovely.

Okay.

Great.

Yes.

Okay.

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Unknown Executive: Are there any other questions you want to cover before I head out?

Sure.

Okay.

Aaron Christiansen: We're going to take this one last question from John Bear, and his question is, do you see any significant increase or need to increase capital expenditures for upgrades or replacements of plant operations over the next three years? And I know Aaron's going to stop it out of Aaron. Yeah, have Aaron do it, but the answer is a resounding yes, but Aaron, you know, talk about it. Yeah, Dan already answered the key message, which is a resounding yes, John.

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Aaron Christiansen: But it's also already planned for. Dan alluded to it earlier, and I alluded to it earlier, we are already in the midst of a multi-year cycle of a higher level of capital spending that historical. We already have a very intelligently built five to ten-year plan that plans for it. We're looking for intelligent ways to overlap business continuity investments, growth investments, and savings investments. So yes, and already well planned for and aligned on organizationally, John.

Yes.

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Aaron Christiansen: And I would add, you know, I just want to thank our customers because we've had to go out to them and say, look, this depreciation that we're charging is based on historic cost, and as we're replacing these assets, it's costing twice easily, twice as much to replace these assets that were put into service 15 and 20 years ago. And they want us to be healthy, they want us to be, you know, be able to replace our capital so that we can continue to supply them the quality and quantity that they require and value. And they've received the message very well, and we very much appreciate it. So if my customers are listening, if our customers are listening, thank you very much. Obviously, we're all in this together.

Unknown Executive: We're out of time. I am assuming everyone is happy with the quarter, happy with the fiscal year. I know the team and I are. And we very much look forward to talking to you after our first quarter, which ends October 31st, and we'll be at our next teleconference. We'll be the first quarter of F24. So until then, be safe, be healthy, and thank you very much for your support.

Daniel Jaffee: We're out of time. I am assuming everyone is happy with the quarter, happy with the fiscal year. I know the team and I are. And we very much look forward to talking to you after our first quarter, which ends October 31st, and we'll be at our next teleconference. We'll be the first quarter of F24. So until then, be safe, be healthy, and thank you very much for your support.

Unknown Executive: This concludes today's conference call. Thank you for participating.

Unknown Executive: You may now disconnect. Daniel Jaffee, David Atkinson, Aaron Christiansen, David Atkinson[inaudible] David Atkinson, David Atkinson, David[inaudible] David Atkinson, David Atkinson[inaudible] Atkinson, David Atkinson,[inaudible] David Atkinson, David Atkinson[inaudible] Atkinson, David Atkinson . . Daniel Jaffee, David Atkinson, David Atkinson, David Atkinson, David Atkinson, David Atkinson[inaudible] David Atkinson, David Atkinson, David Atkinson,[inaudible] speaker presentation, there will be a question and answer session.

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Speaker 1: Thank you for standing by and welcome to Oil Dry Corporation of America Q4 in fiscal year 2023 earnings discussion. At this time all participants are na-listened the only most.

Thank you for standing by and welcome to oil Dry Corporation of America, Q4, and fiscal year 2023 earnings discussion at this time all participants are in a listen only mode.

Speaker 1: After the speaker presentation, there will be a question and answer session. I would now like to hand the call over to Chairman, President CEO Dan Jaffe. Please, go ahead.

After the Speakers' presentation, there will be a question and answer session.

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

Speaker 2: Thank you very much and welcome everybody. First, we're in virtual mode, so I want to introduce who's all on the various lines ready to answer your questions. Thank you for getting those into the portal. In advance, Susan Cray, CFO and CIO, Aaron Creshenson, VP of Operations, Dr. Wade Roby, VP of Agriculture and President of Amlin International.

Thank you very much and welcome everybody first we're in virtual mode. So I want to introduce who's all on the various lines ready to answer your questions. Thank you for getting those into the portal and advance Susan Kreh, CFO and CIO, Aaron Christiansen VP of operations, Dr. Wade <unk> VP of agriculture.

<unk> and president of Amlin International Chris Lamson, Goosby group VP of retail and wholesale Laura Sheelen VP of strategic partnerships and General Counsel, David Atkinson, VP corporate controller, and last but not least Leslie Garber, our manager of Investor Relations, who will walk us through our safe Harbor.

Speaker 2: Chris Lampson, Grooseby, Group BP of Retail and Wholesale

Speaker 2: Laura Sheelan, VP of Strategic Partnerships and General Counsel. David Ackinson, VP Corporate Controller, and last but not least, Leslie Garber, our Manager of Investor Relations, who will walk us through our safe harbor.

<unk>.

Speaker 3: Thank you, Dan, and welcome everyone. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results in those periods may materially differ. In our press release and in our SEC filing, we highlight a number of important risk factors, trends, and uncertainties that may affect our future performance.

Speaker 3: We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in oil-dried stock. Thank you for joining us. Danem.

And I'm turning it back over to you.

Speaker 2: Sounds good and before I turn it over to Susan, I'd like to make some general comments. We just concluded our 83rd fiscal year. And one of the things we're very proud of is our accumulated lessons learned. We'd like to carry the mind from my grandfather, to my dad, to me, and on to the next generation.

Sounds good and before I turn it over to Susan I would like to make some general comments, we just concluded our 83rd fiscal year.

And one of the things we're very proud of is our accumulated lesson learned and we'd like to carry demand from my grandfather, My dad to me and add into the next generation and one of those is winning at oil dry is a team game and Thats. What you guys saw in fiscal 'twenty three the outstanding results of record performance.

Speaker 2: And one of those is winning at Oil Dry as a team game and that's what you guys saw.

Speaker 2: The outstanding results the record performance was all due to the collective effort of our nearly 900 teammates globally.

Was all due to the collective effort of our nearly 900 teammates globally.

Speaker 2: And I just want to make sure I give them proper recognition.

And I just want to make sure I give them proper recognition I mean, just recently, we went through a flawless ERP upgrade which is almost impossible to do.

Speaker 2: And just recently we went through a flawless ERP upgrade, which is almost impossible to do. We've been in the fourth quarter, we're near perfect scores for on-time deliveries and on our customer score cards, really received plenty of kudos moving all the way to the top, which was very exciting.

We've been in the fourth quarter were near perfect score for on time deliveries and on our customers' scorecards really received plenty of kudos moving all the way to the top which is very exciting and so all of those things have to happen to deliver the championship year, We just delivered and we're obviously entering.

The new fiscal year with a lot of momentum, but mindful of the fact, what have you done for us lately that we're going to have to lap. These results as we move forward and I think you'll hear that we're all very confident that we have a lot of good growth plans in place and that fiscal 'twenty three while the best we've ever had the best is still yet to come in.

And we believe that so Susan I'll turn it over to you and then we will.

Speaker 4: So, Susan, I'll turn it over to you, and then we will get into our Q&A. Okay.

Get into our Q&A.

And Susan we don't hear you. So you may be on mute.

Susan can you hear us.

I Wonder if Susan got disconnected.

Okay.

Speaker 2: I'll go, you know me, I like open mic night. I'll cover some of the highlights and Susan, if you get yourself back connected, I'm happy to turn the floor over to you. But the fourth quarter was a record, $107 million and net sales up 15% over the prior year. You know, and that helped us finish the year for over 400 million for the first time, 413-021, up 18%. And I'll go, you know, I'm happy to turn the floor over to you.

I'll go with me all right.

Open Mic nights.

I'll cover some of the highlights and Susan if you get yourself back connected I'm happy to turn the floor over to you.

But the fourth quarter was a record $107 million in net sales up 15% over the prior year and that helped us finish the year for over 400 million for the first time for $13 21 up 18%.

Speaker 2: all year long and you know obviously it's really what happened at the bottom line that was very exciting what we reported was an increase in the fourth quarter of 129 percent up to 11.9 million

Speaker 2: and a 421% increase up to 29 and a half million. But the real story is the back out the two non-recurring events you remember, we had an impairment charge back in fiscal 22, which was an accounting non-cash charge. And then really good for our future is we finally closed our defined benefit.

Speaker 2: our pension plan and replaced it with a very generous defined contribution plan in the 401k when you back out those two non-recurring events what you're really looking at from an apples apples standpoint is an increase from 10 million 136 a year ago to 36 million 469 this year and you know that's a 260 percent increase

Unknown Executive: You may now disconnect.

Daniel Jaffee: I would now like to hand the call over to Chairman, President CEO Dan Jaffe. Please, go ahead. Thank you very much and welcome everybody.

Our pension plan and replaced it with a very generous defined contribution plan in the 401K. So when you back out those two non recurring events, what youre really looking at from an apples to apples standpoint is an increase from $10 million 136, a year ago to 36 million $4 69 this year.

Unknown Executive: Daniel Jaffee, David Atkinson, Aaron Christiansen, David Atkinson[inaudible] David Atkinson, David Atkinson, David[inaudible] David Atkinson, David Atkinson[inaudible] Atkinson, David Atkinson,[inaudible] David Atkinson, David Atkinson[inaudible] Atkinson, David Atkinson .

Leslie Garber: First, we're in virtual mode. So I want to introduce who's all on the various lines ready to answer your questions. Thank you for getting those into the portal. In advance, Susan Cray, CFO and CIO Aaron Creshenson, VP of operations. Dr. Wade Roby, VP of agriculture and president of Amlin International, Chris Lampson, Group VP of retail and wholesale. Laura Sheeland, VP of strategic partnerships and general council. David Atkinson, VP Corporate Controller and last but not least, Leslie Garber, our manager of investor relations who will walk us through our safe harbor.

Unknown Executive: Daniel Jaffee, David Atkinson, David Atkinson, David Atkinson, David Atkinson, David Atkinson[inaudible] David Atkinson, David Atkinson, David Atkinson,[inaudible] speaker presentation, there will be a question and answer session.

And that's a 260% increase obviously, we report by segment, you've got a business to business segment and their results were very much similar to.

Speaker 2: Obviously we report by segment. You've got our business to business segment and their results

Speaker 2: very much similar to what the company saw sales up 18% in the quarter, 26% year to date, and then operating income up 63% and 50. And then over on the retail and wholesale group led by Chris Lampson and his team, sales were up 14 and 15% and 67% and a robust 478%. Now, if you put that impairment charge back in, he was up only to, he and his team up only 204%.

To what the company saw sales up 18% in the quarter, 26% year to date.

Operating income up 63% and 50 and then over on the retail and wholesale group led by Chris Lambson and his team.

Sales were up 14% and 15% and 67% and a robust 478% now if you put that impairment charge back in he was up only two he and his team up only 204%.

Leslie Garber: David Atkinson, VP Provision. Thank you, Dan, and welcome everyone. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results in those periods may materially differ. In our press release and in our SEC filing, we highlight a number of important risk factors, trends, and uncertainties that may affect our future performance. We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in oil-dried stock. Thank you for joining us. Dan, I'm turning it back over to you.

Daniel Jaffee: I would now like to hand the call over to Chairman, President CEO Dan Jaffe. Please, go ahead. Thank you very much and welcome everybody.

Susan Kreh: First, we're in virtual mode. So I want to introduce who's all on the various lines ready to answer your questions. Thank you for getting those into the portal. In advance, Susan Cray, CFO and CIO Aaron Creshenson, VP of operations. Dr. Wade Roby, VP of agriculture and president of Amlin International, Chris Lampson, Group VP of retail and wholesale. Laura Sheeland, VP of strategic partnerships and general council. David Atkinson, VP Corporate Controller and last but not least, Leslie Garber, our manager of investor relations who will walk us through our safe harbor.

Susan Kreh: David Atkinson, VP Provision. Thank you, Dan, and welcome everyone. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results in those periods may materially differ. In our press release and in our SEC filing, we highlight a number of important risk factors, trends, and uncertainties that may affect our future performance. We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in oil-dried stock. Thank you for joining us. Dan, I'm turning it back over to you.

Speaker 2: You know, you guys can read the news release yourself, so you don't need me to go through any more of it. We've got a lot of great questions from our investors. I appreciate that, and we have the team on hand to handle those questions. So, Leslie, I'm gonna turn it back over to you, and let's get into the Q&A and hear what our investors would like to hear from us.

Speaker 3: Okay, sounds great. Susan, if you are back on the call, let us know.

Okay sounds great Susie.

Susan if you are back on the call let us know.

Daniel Jaffee: Sounds good, and before I turn it over to Susan, I'd like to make some general comments. We just concluded our 83rd fiscal year, and one of the things we're very proud of is our accumulated lessons learned, and we'd like to carry the mind from my grandfather, to my dad, to me, and on into the next generation. And one of those is winning at Oil-Dri as a team game, and that's what you guys saw on fiscal 23.

Speaker 3: Otherwise, we're just going to continue. Our first question comes from Robert Smith, and he is from the Center for Performance Investing. His first question is with respect to Amlin, you say there were timing issues that affected the fourth quarter shortfall. What would the quarter have looked like without those issues? Will the current quarter include all the shipments that missed the last quarter? What are the prospects for Amlin in fiscal 24? Thanks. Wade, can you please

Otherwise, we're just going to continue.

Our first question comes from Robert Smith, and he is from the center for performance investing and his first question is with respect to Ameren you say there were timing issues that affected the fourth quarter shortfall.

The quarter have looked like without those issues will the current quarter include all of the shipments that missed the last quarter what are the prospects for aniline in fiscal 'twenty four. Thanks Wade can you please take that.

Daniel Jaffee: The outstanding results the record performance was all due to the collective effort of our nearly 900 teammates globally, and I just want to make sure I give them proper recognition. I mean, just recently we went through a flawless ERP upgrade, which is almost impossible to do. We've been in the fourth quarter. We're near perfect scores for on-time deliveries, and on our customer score cards really received plenty of kudos moving all the way to the top, which was very exciting.

Speaker 5: Yes, thank you, Leslie, and thank you, Robert, for the question. You've got a number of questions in there, and I'll try to hit all of them pretty quickly.

Yes, Thank you Leslie and thank you Robert for the for the question you've got a number of questions in there I'll try to try to hit all of them pretty quickly.

Speaker 5: So with respect to our business in the animal nutrition space, we don't see a lot of sea and the valley quarter to quarter. So typically we're pretty smooth as we continue to grow.

So with respect to our business in the animal nutrition.

We don't see a lot of seasonality.

Order to quarter. So typically we're pretty smooth as we continue to grow and.

Speaker 5: in all the world areas where we're participating. We do sometimes see timing issues, as you've noted in your question. We have logistics timing.

The other world areas, where we're participating we do sometimes see timing issues as you've noted in your question we have.

Daniel Jaffee: And so all of those things had to happen to deliver the championship year we just delivered. And we're obviously entering the new fiscal year with a lot of momentum, but mindful of the fact, what have you done for us lately? That we're going to have to lap these results as we move forward. And I think you'll hear that we're all very confident that we have a lot of good growth plans in place, and that fiscal 23, while the best we've ever had, the best is still yet to come, and then we believe that.

Logistics.

Timing.

Speaker 5: concern that comes in periodically in terms of how long it takes product to get to our Asian markets or to our Latin American markets.

And that comes in periodically in terms of how long it takes product to get to our Asian markets or to our Latin American markets and that can sometimes cause us month to month or quarter to quarter to have more volatility than the business itself would typically show and so that generally has affected our numbers at times on an individual quarter basis.

Speaker 5: and that can sometimes cause us month to month or quarter to quarter to have more volatility than the business itself would typically show. And so that generally has effect that are numbers at times on an individual quarter.

Unknown Executive: So Susan, I'll turn it over to you, and then we will get into our Q&A. And Susan, we don't hear you, so you may be on mute. Susan, can you hear us? I wonder if Susan got disconnected.

Daniel Jaffee: So Susan, I'll turn it over to you, and then we will get into our Q&A. And Susan, we don't hear you, so you may be on mute. Susan, can you hear us? I wonder if Susan got disconnected. I'll go, if you hear me, I'd like to open Mike night. I'll cover some of the highlights, and Susan, if you get yourself back connected, I'm happy to turn the floor over to you. But the fourth quarter was a record, $107 million in net sales, up 15% over the prior year, and that helped us finish the year for over 400 million for the first time, 413, 021, up 18% all year long.

Perfect. Thank you.

Speaker 3: The next we're going to combine two questions regarding advertising. The first is from Robert Smith. What we're advertising expenses in the fourth quarter. How much of an increase are you budgeting for fiscal 24?

Speaker 3: And then the second part is from Ethan Star, an individual investor, and it also relates to advertising. What results are you seeing from the most recent cap-pride celebrity endorsement campaign with a prominent actress? Are the results meeting or exceeding your expectations for return on investment? And I'm going to turn that over to Chris.

And then the second part is from Ethan Starr, an individual investor and it also relates to advertising what results are you seeing from the most recent past.

Daniel Jaffee: I'll go, if you hear me, I'd like to open Mike night. I'll cover some of the highlights, and Susan, if you get yourself back connected, I'm happy to turn the floor over to you. But the fourth quarter was a record, $107 million in net sales, up 15% over the prior year, and that helped us finish the year for over 400 million for the first time, 413, 021, up 18% all year long.

Celebrity endorsement campaign with a prominent acura are the results meeting or exceeding your expectations for a return on investment and I'm going to turn that over to Chris Lamson to anthrax.

Speaker 6: Yeah, good morning, Robert and Ethan. Thanks for the questions. The relative advertised.

Yes, good morning, Robert Nathan Thanks for the thanks for the questions.

The relative to advertising in this past year and the flow of our spend and looking ahead to next year.

Speaker 6: past year and the flow of our spend and what looking ahead to next year. The consumer business, the overwhelming majority of our advertising dollars. So that's why I'm answering it. And yet we did spend roughly two thirds of our total fiscal.

The consumer business the overwhelming majority of our advertising dollars. So that's why I'm answering it and yes. We did it's been roughly two thirds of our total fiscal spend in Q4.

Daniel Jaffee: And obviously, it's really what happened at the bottom line that was very exciting. What we reported was an increase in the fourth quarter of 129% up to 11.9 million, and a 421% increase up to 29 and a half million. But the real story is the back-out, the two non-recurring events you remember we had an impairment charge back in fiscal 22, which was an accounting non-cash charge. And then really good for our future is we finally closed our defined benefits.

Speaker 6: spend in Q4. I looked back at notes from previous calls. I know I'd been signaling that for most of this past fiscal year on these calls. There were three reasons for it. One was we really wanted to advertise the full shelves and we knew that the supply chain would be stable, damn alluded to it, and better than stable. We're really nailing our service levels now, so we wanted to advertise the full shelves.

I look back at it notes from previous calls I know I've been signaling that.

Daniel Jaffee: Plan, our pension plan and replaced it with a very generous defined contribution plan in the 401K. So when you back out those two non-recurring events, what you're really looking at from an Apple's Apple standpoint is an increase from 10 million 136 a year ago to 36 million 469 this year, and you know, that's a 260 percent increase. Obviously, we report by segment, you've got our business to business segment and their results were very much similar to what the company saw, sales up 18 percent in the quarter, 26 percent year-to-date, and then operating income up 63 percent and 50, and then over on the retail and wholesale group led by Chris Lamson and his team, sales were up 14 and 15 percent and 67 percent and a robust 478 percent.

For most of this past fiscal year on these on these calls there were three reasons for it.

One was we really wanted to advertise the full shelves and we knew that the supply chain will be stable, Dan alluded to it in a better than stable.

We're really nailing our service levels now so we want to advertise to fill shelves.

Speaker 6: And we were moving our ad campaigns from our litter for good campaign, which we've been on for the last several years to really emphasizing the benefits of lightweight.

And we are moving our AD campaigns from our litter for good campaign, which which we've been on for the last several years to really emphasizing the benefits of of lightweight.

Speaker 6: and we were basically getting that content in the can and ready to go, which is now done and is hitting the air. And the third reason for it was we launched anti-bacterial litter, the very end of the fiscal year, and we were wanting to support that out of the gate and obviously into

We were wanting to support that out of the gate and obviously into fiscal 'twenty four looking.

Speaker 6: Looking forward on into fiscal 24, we will have modest uptick and spend on the full year, but it will be spread much more evenly than it was in the past year for the very three reasons that I articulated around why it was loaded in Q4. All three of those things you might present to us.

Looking forward into fiscal 'twenty, four we will have modest uptick in spend on the full year, but it will be spread much more evenly than it was in the past year for the very three reasons that I articulated around why it was loaded in Q4, all three of those things are now present going forward.

Daniel Jaffee: Now if you put that impairment charge back in, he was up only to he and his team up only 204 percent. You know, you guys can read the news release yourself, so you don't need me to go through any more of it. We've got a lot of great questions from our investors. I appreciate that and we have the team on hand to handle those questions.

Speaker 6: So I think that it's Robert's question relative to influencers and our investments and contentless celebrities and influencers.

So I think that it's Roberts question relative to Influencers and.

Leslie Garber: You know, you guys can read the news release yourself, so you don't need me to go through any more of it. We've got a lot of great questions from our investors. I appreciate that and we have the team on hand to handle those questions.

Our investments in.

Content with celebrities and Influencers I would say overall, we like Influencers. We're looking at these rois constantly in real time, a pretty dynamic.

Speaker 6: We're looking at these ROI constantly in real time, the pretty dynamic.

Leslie Garber: So, Leslie, I'm going to turn it back over to you, and let's get into the Q&A and hear what our investors would like to hear from us about. Okay, sounds great. Susan, if you are back on the call, let us know. Otherwise, we're just going to continue.

Speaker 6: They're and it's fun to play with the mix candidly and drive the highest ROI's. The content you're referring to did well for us. Other category experts in terms of influencers do extremely well for us. So expect us to keep up influencers, I'd say expect us to probably lean into those categories.

They're there and it's fun to play with the mix candidly and drive the highest rois.

Wade Robey: Our first question comes from Robert Smith and he is from the Center for Performance Investing, and his first question is with respect to Amlin, you say there were timing issues that affected the fourth quarter shortfall. What would the quarter have looked like without those issues? Will the current quarter include all the shipments that missed the last quarter? What are the prospects for Amlin in fiscal 24? Thanks. Wade, can you please take that?

Speaker 3: Right, thank you. The next question comes from John Bear. There have been numerous announcements recently of poultry and swine plant shutdowns in the US. Since quarter-and, have you seen any impact your domestic sales effort? Backing out the timing of shipment, causing softness in animal health sales in Latin America, Asia and China regions as noted in the press release, our animal health sales friends continuing to improve.

Alright, thank you.

The next question comes from John Bair.

There have been numerous announcements recently of poultry and swine plant shutdowns in the U S.

Quarter Al have you seen any impact to your domestic sales effort backing out the timing of shipments, causing softness in animal health sales in Latin America, Asia, and China regions as noted in the press release, our animal health sales trends continuing to improve.

Wade Robey: Yes, thank you, Leslie, and thank you, Robert, for the question. You've got a number of questions in there and I'll try to hit all of them pretty quickly. So, with respect to our business in the animal nutrition space, we don't see a lot of seasonality quarter to quarter. So, typically, we're pretty smooth as we continue to grow in all the world areas where we're participating. We do sometimes see timing issues, as you've noted in your question.

Wayne.

Speaker 5: Thank you, Leslie. And again, thank you, John , for that question. Let me, let me start with the last question or part of the question that you asked. And that was our animal health and sales trends continuing to improve. And the answer is yes, although I'll be at differential depending upon the world area. So we are continuing to see impacts in the animal production industry around the world based on lingering effects of the pandemic as well as regional economies.

Thank you Leslie and again, thank you John for that question. Let me, let me start with the last question or part of the question that you asked and that was our animal health sales trends continuing to improve and the answer is yes, although albeit.

Wade Robey: We have a logistics timing concern that comes in periodically in terms of how long it takes product to get to our Asian markets or to our Latin American markets. And that can sometimes cause us month to month or quarter to quarter to have more volatility than the business itself would typically show. And so, that generally has affected our numbers at times on an individual quarter basis. Going forward, certainly anything that we missed in the fourth quarter of the previous year, we would expect them to pick up and show in the next quarter. And we're seeing that as our business continues to move forward. So, I believe I've covered all of your key questions. And again, thank you for that question to us. Perfect.

Speaker 5: But we are continuing to see that improve and the opportunity for our products to continue to improve and grow in those markets.

Unknown Executive: Thank you.

Speaker 5: In the US, yes, there there have been some depression of

In the U S. Yes, there has been some depression of profitability.

Speaker 5: profitability among some of the largest integrators and producers.

Profitability amongst some of the largest integrators and producers what that really causes us a little bit more scrutiny as they look at new products and maybe a little longer lead time for us to penetrate and begin commercial sales, but because we are new in a couple of these markets like the U S with our new portfolio, we don't expect a significant impact.

Speaker 5: What that really causes is a little bit more scrutiny as they look at new products and maybe a little longer lead time for us to penetrate and begin commercial sales.

Speaker 5: But because we're new in a couple of these markets, like the US with our new portfolio, we don't expect a significant impact. We'll work through it and we continue to see good testing, good adoption and good growth.

We will work through it and we continue to see good testing good adoption and good growth specifically in the U S, but around the world. So.

Chris Lamson: The next we're going to combine two questions regarding advertising. The first is from Robert Smith. What we're advertising expenses in the fourth quarter. How much of an increase are you budgeting for fiscal 24? And then the second part is from Ethan Star, an individual investor. And it also relates to advertising. What results are you seeing from the most recent cap-pride celebrity endorsement campaign with a prominent actress? Are the results meeting or exceeding your expectations for return on investments?

Christopher Lamson: The next we're going to combine two questions regarding advertising. The first is from Robert Smith. What we're advertising expenses in the fourth quarter. How much of an increase are you budgeting for fiscal 24? And then the second part is from Ethan Star, an individual investor. And it also relates to advertising. What results are you seeing from the most recent cap-pride celebrity endorsement campaign with a prominent actress? Are the results meeting or exceeding your expectations for return on investments?

Speaker 5: specifically in the US but around the world.

Speaker 5: Yes, conditions are continuing to persist a little bit and we hear that as we travel around and visit customers.

Speaker 5: But we continue to see great interest in our products and lots of new adoption and growth in all the markets that we're serving.

Okay.

Speaker 3: Thank you. Okay, the next question comes from Ethan Star, and he asks, to what extent are your costs continuing to increase if at all? And I think we're going to have Aaron Kertzchen then handle that question.

Thank you.

Okay. The next question comes from Ethan Star and he asked to what extent are your costs continuing to increase if at all and I think we're going to have Aaron Christiansen handle that question.

Chris Lamson: And I'm going to turn that over to Chris Lamson Thank you very much, Sarah. Yeah, good morning, Robert and Ethan, thanks for the, thanks for the questions. The relative advertising and the past year and the flow of our spend and what looking ahead to next year, the consumer business, the overwhelming majority of our advertising dollars, so that's why I'm answering it. And yet we did spend roughly two thirds of our total fiscal spend in Q4.

Christopher Lamson: And I'm going to turn that over to Chris Lamson Thank you very much, Sarah. Yeah, good morning, Robert and Ethan, thanks for the, thanks for the questions. The relative advertising and the past year and the flow of our spend and what looking ahead to next year, the consumer business, the overwhelming majority of our advertising dollars, so that's why I'm answering it. And yet we did spend roughly two thirds of our total fiscal spend in Q4.

Speaker 7: Leslie, thank you and Ethan, thanks for the question. I'm happy to answer it. Unfortunately, costs do continue to rise. I'll cite four things quickly. The first is the ECI or employment cost index.

Listen we thank you in the east and thanks for the question I'm happy to answer it.

Unfortunately cost do continue to rise.

Four things quickly.

The first is the ECA or employment cost index.

Speaker 7: Right now national compensation cost are up 4.5% over the last 12 months and have peaked as high as 5.5 in recent months. Well-dried continues to find ways to be competitive and total compensation for our teammates. So that's one key cost input. Second is the cost of materials and material input.

Right now National Conference total compensation costs are up four 5% over the last 12 months.

Peak as high as five five in recent months, while dry continues to find ways to be competitive in total compensation for our teammates.

Chris Lamson: I look back at notes from previous these calls. I know I'd been signaling that for most of this past fiscal year on these calls. There were three reasons for it. One was we really wanted to advertise the full shelves and we knew that the supply chain would be stable, damn alluded to it, and better than stable. We're really nailing our service levels now, so we wanted to advertise the full shelves. And we were moving our ad campaigns from our litter for good campaign, which we've been on for the last several years to really emphasizing the benefits of lightweight.

Christopher Lamson: I look back at notes from previous these calls. I know I'd been signaling that for most of this past fiscal year on these calls. There were three reasons for it. One was we really wanted to advertise the full shelves and we knew that the supply chain would be stable, damn alluded to it, and better than stable. We're really nailing our service levels now, so we wanted to advertise the full shelves. And we were moving our ad campaigns from our litter for good campaign, which we've been on for the last several years to really emphasizing the benefits of lightweight.

So that's one key cost input second.

Chris Lamson: And we were basically getting that content in the can and ready to go, which is now done and is hitting the air. And the third reason for it was we launched anti-bacterial litter at the very end of the fiscal year. And we were wanting to support that out of the gate and obviously into fiscal 24. Looking forward into fiscal 24, we will have modest uptick and spend on the full year, but it will be spread much more evenly than it was in the past year for the very three reasons that I articulated around why it was loaded in Q4.

Christopher Lamson: And we were basically getting that content in the can and ready to go, which is now done and is hitting the air. And the third reason for it was we launched anti-bacterial litter at the very end of the fiscal year. And we were wanting to support that out of the gate and obviously into fiscal 24. Looking forward into fiscal 24, we will have modest uptick and spend on the full year, but it will be spread much more evenly than it was in the past year for the very three reasons that I articulated around why it was loaded in Q4.

Is the cost of materials and material inputs. The consumer price index is up nine months in a row.

Speaker 7: consumer price index is up nine months in a row. Many of our suppliers and material bases peg their costs on the CPI. That's another area we're continuing to battle rising cost inputs. The third and Dan alluded to it earlier, Ethan, is our ongoing repair, both through expense and capital of our asset.

Many of our suppliers and material bases peg their costs on the CPI. That's another area, we're continuing to battle.

Rising cost inputs.

The third and Dan alluded to it earlier Ethan is our ongoing repair both through expense and capital of our asset base oil dry has an aging infrastructure much of our asset base is now being replaced or our multiyear capital strategy. The cost are both repair and replace those asset.

Speaker 7: Well, Drei has an aging infrastructure. Much of our asset base is now being replaced through a multi-year capital strategy. The costs are both repair and replace those assets is significantly higher than what was initially put on the book.

<unk> is significantly higher than where it was initially put on the books for.

Speaker 7: It is mathematically impossible for us to maintain our depreciation base. And the last I'll mention Ethan is...

It is mathematically impossible for us to maintain our depreciation base.

The last I'll mention Eton is.

Speaker 7: Remind the audience, reminding a new company, mining costs continue to rise, the cost of environmental and other regulation, as well as the natural reality of moving deeper and further from our factories. So I'll...

To remind the audience reminding and no one company mining costs continue to rise.

The cost of environmental and other regulation as well as the natural reality of moving deeper and further from our factories. So I hope I answered your question Ethan.

Chris Lamson: All three of those things you now present so I'm forward. So I think that it's Robert's question relative to influencers and our investments and content with celebrities and influencers. I would say overall we like influencers. We're looking at these ROI constantly in real time, the pretty dynamic. They're there and it's fun to play with the mix candidly and drive the highest ROI. The content you're referring to did well for us. Other category experts in terms of influencers do extremely well for us. So expect us to keep up influencers. I'd say expect us to probably lean into those category experts.

Christopher Lamson: All three of those things you now present so I'm forward. So I think that it's Robert's question relative to influencers and our investments and content with celebrities and influencers. I would say overall we like influencers. We're looking at these ROI constantly in real time, the pretty dynamic. They're there and it's fun to play with the mix candidly and drive the highest ROI. The content you're referring to did well for us. Other category experts in terms of influencers do extremely well for us. So expect us to keep up influencers. I'd say expect us to probably lean into those category experts.

Chris Lamson: Right, thank you.

Unknown Executive: Right, thank you.

Speaker 3: Thanks, Erin. The next question is from Robert Smith, and he asked what accounts for the dramatic increase in diluted common shares, and I'm going to turn that over to David at...

Thanks Darrin.

The next question is from Robert Smith.

What accounts for the dramatic increase in diluted common shares and I'm going to turn that over to David <unk>.

Speaker 8: Thank you Leslie and thank you Robert for the question. What I would like to point to is you'll notice a we added an earnings per share reconciliation to know one. Although extremely unlikely we included the potential impact of all of our class B share at the Incomerated Department. There have been no issuances in new shares other than those that support the restricted stock program which has been consistent prior years and you can see those numbers in put on number eight on the 10K.

Thank you Leslie and thank you Robert for the question.

What I would like to point to is you'll notice we added in earnings per share reconciliation to note one although extremely unlikely. We included the potential impact of all of our class B shares being converted to common there've been no issuance of new shares other than those that support the restricted stock program, which has been consistent with prior years and you can see that.

Is that number.

Number eight on the 10-K.

John Bear: The next question comes from John Bear. There have been numerous announcements recently of poultry and swine plant shutdowns in the U.S. Since quarter and have you seen any impact your domestic sales efforts backing out the timing of shipments causing softness and animal health sales in Latin America, Asian, China regions as noted in the press release are animal health sales friends continuing to improve. Wade. Thank you, Leslie and again, thank you, John, for that question.

Yes.

Speaker 3: Okay, thank you. We will move on. Robert Smith asks, discuss your R&D efforts. Other new products coming in.

Okay.

We will move on.

Robert Smith ask discuss your R&D effort other new products coming in into the current fiscal year and what is the R&D budget for the current year did it really declined last year and if so why I'm also going to combine that because we're going to talk about some new products I'm going to combine this question.

With John Bears question, which I will read.

John Bear: Let me let me start with the last question or part of the question that you asked and that was our animal health and sales friends continuing to improve. And the answer is yes, although I'll be a differential depending upon the world area. So we are continuing to see impacts in the animal production industry around the world based on lingering effects of the pandemic as well as regional economies. But we are continuing to see that improve and the opportunity for our products to continue to improve and grow in those in those markets in the U.S.

Which is when did you received EPA approval for your new antibacterial product will this be marketed solely as a new standalone product or will be additive component being incorporated into your other product offerings to enhance our overall marketing effort.

First I'm going to have Wade answer the first part of the question and then he will turn it over to Chris to talk about our new anti bacterial cat litter Wade do you want to start us off.

Speaker 5: Yeah, thank you, lethally. And again, thank you, Robert. We brick our, we look at our R&D effort trillion in two buckets, what we would call traditional R&D that we do at an innovation center, and then at contract research organizations as we do true discovery and product development.

Yes, Thank you Leslie and again, thank you Robert.

We broker we look at our R&D efforts really in two buckets, what we what we would call traditional R&D that we do earn at our innovation Center and then.

John Bear: Yes, there, there has been some depression of profitability among some of the largest integrators and producers. What that really causes is a little bit more scrutiny as they look at new products and maybe a little longer lead time for us to penetrate and begin commercial sales. But because we're new in a couple of these markets like the U.S, with our new portfolio, we don't expect a significant impact. We'll work through it and we continue to see good testing, good adoption and good growth specifically in the U.S, but but around the world.

Contract research organizations as we do true discovery and product development. The second element of it is really our field validation work that we either do directly with customers or at regional universities that help validate the performance of all of our products and to encourage customer adoption as a.

Speaker 5: The second element of it is really our field validation work that we either do directly with customers or at regional universities.

Speaker 5: that help validate the performance of our products and encourage customer adoption.

Speaker 5: As a result of that, we can see pretty significant volatility either within a year or across years.

Result of that we can see pretty significant volatility either within a year or across years.

John Bear: So yes, conditions are continuing persist a little bit and we hear that as we travel around and visit customers, but we continue to see great interest in our products and lots of new adoption and growth in all the markets that we're serving.

Because obviously the R&D efforts that we do in.

Research and discovery tend to be a lot more expensive than the field validation work currently we're really focusing on field validation as we have two new products that were.

Wade Robey: Thank you.

Unknown Executive: Okay, the next question comes from Ethan Star and he asks, to what extent are your costs continuing to increase if at all? And I think we're going to have Aaron Christiansen handle that question. Leslie, thank you and Ethan, thanks for the question. I'm happy to answer it. Unfortunately, costs do continue to rise. I'll cite four things quickly. The first is the ECI or employment cost index. Right now, national compensation costs are up four and a half percent over the last 12 months and have peaked as high as five and a half in recent months.

Wade Robey: Okay, the next question comes from Ethan Star and he asks, to what extent are your costs continuing to increase if at all? And I think we're going to have Aaron Christiansen handle that question. Leslie, thank you and Ethan, thanks for the question. I'm happy to answer it. Unfortunately, costs do continue to rise. I'll cite four things quickly. The first is the ECI or employment cost index. Right now, national compensation costs are up four and a half percent over the last 12 months and have peaked as high as five and a half in recent months.

Speaker 5: These sorts of evaluations allow us to be a lot more efficient with our spend.

Speaker 5: Oftentimes we're actually selling the product as we as we move it to the market sometimes at a discounted price, but

Speaker 5: selling the product as we do those field validations with customers. So it really offsets some of the R&D expense that you would normally see. That's what causes our raw utility. And again, given where we are in the rollout of the existing two products into the marketplace, it's causing us or allowing us to be a little bit more efficient in R&D spend in the current year. Okay. With that, I'll turn it over to Chris. Thanks, Wade. And...

Unknown Executive: Well, drive continues to find ways to be competitive and total compensation for our teammates. So that's one key cost input. Second is the cost of materials and material inputs. The consumer price index is up nine months in a row. Many of our suppliers and material bases pegged their costs on the CPI. That's another area we're continuing to battle rising cost inputs. The third and Dan alluded to it earlier, Ethan, is our ongoing repair, both through expense and capital of our asset base.

Wade Robey: Well, drive continues to find ways to be competitive and total compensation for our teammates. So that's one key cost input. Second is the cost of materials and material inputs. The consumer price index is up nine months in a row. Many of our suppliers and material bases pegged their costs on the CPI. That's another area we're continuing to battle rising cost inputs. The third and Dan alluded to it earlier, Ethan, is our ongoing repair, both through expense and capital of our asset base.

Selling the product as we do those field validation with customers. So it really offset some of the R&D expense that you would normally see that's what causes that volatility and again, given where we are in the rollout of the existing two products into the marketplace, it's causing us are allowing us to be a little bit more efficient in R&D spend in the current year.

Okay with that I'll turn it over to Chris.

Yes.

Thanks, Wade and thanks for that.

<unk> John .

So.

Speaker 6: Pull back really quick and just elaborate on the launch. So at the very end of fiscal 23, we launched a well dry cat's pride anti-bacterial clumping litter. The first and only EPA approved anti-bacterial litter here in the US. The story kills 99.9% of odor coughing bacteria. And it helps, obviously, further. You know.

Pull back really quick and just elaborate on the launch.

So at the very end of fiscal 2003, we launched oil dry cat's pride anti bacterial clumping litter, the first and only EPA approved anti bacterial later here in the U S.

The storage kills 99.9.

9% of odor, causing bacteria.

And.

It helps obviously further.

Unknown Executive: Well, drive has an aging infrastructure. Much of our asset base is now being replaced through multi-year capital strategy. The cost of both repair and replace those assets is significantly higher than what was initially put on the book for. It is mathematically impossible for us to maintain our depreciation base. And the last I'll mention Ethan is remind the audience, reminding a million company, mining costs continue to rise, the cost of environmental and other regulation, as well as the natural reality of moving deeper and further from our factories. So, oh, by answering your question, Ethan.

Wade Robey: Well, drive has an aging infrastructure. Much of our asset base is now being replaced through multi-year capital strategy. The cost of both repair and replace those assets is significantly higher than what was initially put on the book for. It is mathematically impossible for us to maintain our depreciation base. And the last I'll mention Ethan is remind the audience, reminding a million company, mining costs continue to rise, the cost of environmental and other regulation, as well as the natural reality of moving deeper and further from our factories. So, oh, by answering your question, Ethan.

Speaker 8: The highly, the high effectiveness of our clay, this really helps further relative to odor control. And then obviously the broader sanitary home and the consumer very much takes this benefit to the cat knock tracking nasties, if you will, through the home.

The highly the high effectiveness of our clay.

Really helps further relative to odor control and then obviously the broader sanitary home and the consumer very much takes.

It takes this benefit to the cap not tracking.

Nasties, if you will through the home.

Speaker 8: And we're excited about it, and I can tell you retailers are excited about it. So, you know, where cat's pride is particularly strong, which is up and down the East Coast, and then to the southeast, virtually all of our customers have taken it into distribution, and not only just distribution, but incremental distribution.

And we're excited about it and I can value retailers are excited about it. So we're cat's pride is particularly strong which is up and down the east coast and then to the southeast virtually all of our customers have taken that into distribution and not only just distribution, but incremental distribution.

Speaker 8: I'll come back to your question on timing, but insightful question around launching it against, everything or launching it against the base versus an incremental item.

I'll come back to your question on timing, but insightful question around launching it against everything or launching it against the base versus incremental item that choice out of the gate was deliberate we wanted to build use it as an opportunity to build out our shelf space.

Aaron Christiansen: Thanks, Aaron.

David Atkinson: The next question is from Robert Smith and he asks, what accounts for the dramatic increase in diluted common shares, and I'm going to turn that over to David Atkinson. Thank you, Leslie. Thank you, Robert, for the question. Well, I would like to point to is a notice a we added an earnings for share reconciliation to know one, although extremely unlikely, we included the potential impact of all of our class B share it being converted to common. There have been no issuances new shares other than those that support the restricted stock program, which has been consistent prior years and you can see those numbers and put on number eight on the 10K. Okay.

Speaker 8: That choice out of the gate was deliberate. We wanted to build, use it as an opportunity to build out our shelf space and really highlight a new benefit to the categories.

Unknown Executive: Thank you.

Unknown Executive: We will move on.

And really highlight a new benefit.

To the categories we offer.

Speaker 8: We are, as we speak, innovating further against this benefit. We think it's a big deal. Our customers think it's a big deal. Our consumer returns on it.

As we speak innovating further against this benefit we think it's a big deal our customers think it is a big deal or consumer returns on it.

Speaker 6: early takeaway perspective, but also from the research led up to it, we're all very positive. I will tell you the EPA process is quite long.

Both from a early takeaway perspective, but also from the research led up to it were all very positive.

I will tell you the EPA process is quite long.

Speaker 8: which is a good thing and a bad thing. It builds a really nice moat around us driving this benefit. We received federal approval at this point more than 18 months ago. You then, and these cannot be parallel paths, once you have federal approval, you go through each of the states and gain their approval as well.

As a good thing and a bad thing.

It builds a really nice moat around us driving this benefit.

Robert Smith: Robert Smith asks, discuss your R&D efforts, other new products coming in into the current fiscal year. And what is the R&D budget for the current year? Did it really decline meaningfully last year and it's so why? I'm also going to combine this because we're going to talk about some new products.

Wade Robey: Robert Smith asks, discuss your R&D efforts, other new products coming in into the current fiscal year. And what is the R&D budget for the current year? Did it really decline meaningfully last year and it's so why? I'm also going to combine this because we're going to talk about some new products. I'm going to combine this question with John Bears question, which I will read, which is when did you receive EPA approval for your new antibacterial product will this be marketed solely as a new standalone product or will the additive component be incorporated into your other product offerings to enhance your overall marketing efforts.

We received federal approval at this point more than 18 months ago. You then and these cannot be parallel path once you're a federal approval you go through all of those each each of the states and gain their approval as well.

Speaker 8: which like I said, build the moat around things, but we'll also...

Which like I said build the moat around things, but we'll also.

Wade Robey: I'm going to combine this question with John Bears question, which I will read, which is when did you receive EPA approval for your new antibacterial product will this be marketed solely as a new standalone product or will the additive component be incorporated into your other product offerings to enhance your overall marketing efforts. So first I'm going to have Wade answer the first part of the question and then he will turn it over to Chris to talk about our new antibacterial cat litter.

Speaker 8: create long lead times for our further development here, which like I said is very much fun.

Create long lead times for our further development here, which which like I said is very much underway.

Speaker 6: We're excited about the benefit and we're excited about the initial return.

We're excited about the benefit and more excited about the initial returns we're getting on the item.

Speaker 3: Thanks, Chris. Okay, the question comes from Ethan Star and he asks, is Amel making progress towards getting one or more significant orders from large producers of paddle, poultry or swine? And Wade, can you please answer that?

Thanks, Chris.

Wade Robey: So first I'm going to have Wade answer the first part of the question and then he will turn it over to Chris to talk about our new antibacterial cat litter. Wade, you want to start us off? Yeah, thank you, Leslie, and again, thank you, Robert. We breaker, we look at our R&D effort really in two buckets. What we would call traditional R&D that we do at Innovation Center and then at Contract Research Organizations as we do true discovery and product development.

Okay.

<unk> comes from Ethan Star.

Yes.

And we're making progress towards getting one or more significant orders from large producers of paddle poultry our swine.

Wade Robey: Wade, you want to start us off? Yeah, thank you, Leslie, and again, thank you, Robert. We breaker, we look at our R&D effort really in two buckets. What we would call traditional R&D that we do at Innovation Center and then at Contract Research Organizations as we do true discovery and product development. The second element of it is really our field validation work that we either do directly with customers or at regional universities that help validate the performance of our products and encourage customer adoption.

Wade can you please answer.

Speaker 5: Yes, thanks Leslie and again thank you, Ethan. The simple answer is yes, if you look at the market in North America, we're already selling to several of the largest integrators in the North American market.

Wade Robey: The second element of it is really our field validation work that we either do directly with customers or at regional universities that help validate the performance of our products and encourage customer adoption. As a result of that, we can see pretty significant volatility either within a year or across years because obviously the R&D efforts that we do in research and discovery tend to be a lot more expensive than the field validation work.

Yes, Thanks, Leslie and again, thank you Ethan.

The simple answer is yes, if you look at.

Market in North America, we're already selling to several of the largest integrators in the North American market.

That is continuing to grow with recent penetration again in a number of key accounts here in North America. So great progress there as we continue to launch our portfolio here in the United States as you look around the world.

Speaker 5: As you look around the world, we have been in those markets a little bit longer and so they're a little bit more established for us.

Wade Robey: As a result of that, we can see pretty significant volatility either within a year or across years because obviously the R&D efforts that we do in research and discovery tend to be a lot more expensive than the field validation work. Currently, we're really focusing on field validation as we have two new products that we're introducing into the market. Those are being evaluated both at universities as I mentioned but also in direct customer trials.

We have been in those markets, a little bit longer and so there are a little bit more established for us, but we continue to see expanded.

Speaker 5: But we continue to see expanded growth of our sales into alternative species to poultry.

Growth of our sales into alternative species to poultry.

Speaker 5: So in the room and a market specifically in dairy, some of our largest customers in Asia are actually in the dairy sector. And we're seeing that being replicated now in Latin America in the cattle market and the beef cattle market. So another room and its species.

So in the ruminant market specifically in dairy some of our largest customers in Asia are actually in the dairy sector and we're seeing that being replicated now in Latin America in the cattle market in the beef cattle market. So another ruminant species, but we're seeing new testing and moving towards adoption of some of the largest <unk>.

Wade Robey: These sorts of evaluations allow us to be a lot more efficient with our spend. Oftentimes, we're actually selling the product as we as we move it to the market. Sometimes at a discounted price, but selling the product as we do those field validations with customer. So it really offsets some of the R&D expense that you would normally see. That's what causes our volatility and again, given where we are in the rollout of the existing two products into the marketplace, it's causing us or allowing us to be a little bit more efficient in R&D spend in the current year.

Wade Robey: Currently, we're really focusing on field validation as we have two new products that we're introducing into the market. Those are being evaluated both at universities as I mentioned but also in direct customer trials. These sorts of evaluations allow us to be a lot more efficient with our spend. Oftentimes, we're actually selling the product as we as we move it to the market. Sometimes at a discounted price, but selling the product as we do those field validations with customer.

Speaker 5: but we're seeing new testing and moving towards adoption are some of the largest cattle operations in Latin America, specifically in Brazil. So we're excited about that. Continue to see the broad multi-species applicability of our products.

Cattle operations in Latin America, specifically in Brazil. So we're excited about that continue to see the broad multi species applicability of our products and the application of them in solutions that are really allowing us to grow our participation in these in these markets. So.

Speaker 5: and the application of them in solutions that are really allowing us to grow our participation in these markets.

Wade Robey: So it really offsets some of the R&D expense that you would normally see. That's what causes our volatility and again, given where we are in the rollout of the existing two products into the marketplace, it's causing us or allowing us to be a little bit more efficient in R&D spend in the current year.

Speaker 5: Yes, absolutely, and we expect to see continued progress in this way in the coming year.

Yes, absolutely and we expect to see continued progress in this way in the coming year.

Speaker 3: Great, thank you. Next question comes from John Bear, and he says a recent article in the Wall Street Journal had lines, Ocean Freight Rates Pressure, which highlight a significant drop in East Coast to China shipping costs among other routes. So are you seeing or beginning to see any benefit in your shipping costs? I'm going to turn it over to Erin to answer.

Great. Thank you.

Chris Lamson: Okay, with that, I'll turn it over to Chris. Thanks, Wade, and thanks for the question, John. So I'll pull back really quick and just elaborate on the launch. So at the very end of fiscal 23, we launched, we'll dry cats, pride, anti-bacterial clumping litter. The first and only EPA approved anti-bacterial litter here in the US. The storage kills 99.9% of odor coughing bacteria and helps, obviously, further the high effectiveness of our clay.

Christopher Lamson: Okay, with that, I'll turn it over to Chris. Thanks, Wade, and thanks for the question, John. So I'll pull back really quick and just elaborate on the launch. So at the very end of fiscal 23, we launched, we'll dry cats, pride, anti-bacterial clumping litter. The first and only EPA approved anti-bacterial litter here in the US. The storage kills 99.9% of odor coughing bacteria and helps, obviously, further the high effectiveness of our clay.

Next question comes from John Bair, and he says a recent article in the Wall Street Journal headlines.

Chris Lamson: This really helps further relative to odor control and obviously the broader sanitary home and the consumer very much takes this benefit to the cat not tracking nasties, if you will, through the home. And we're excited about it and I can tell you retailers are excited about it. So, you know, where cat pride is particularly strong, which is up and down the east coast and then to the southeast, virtually all of our customers have taken it into distribution and not only just distribution, but incremental distribution.

Christopher Lamson: This really helps further relative to odor control and obviously the broader sanitary home and the consumer very much takes this benefit to the cat not tracking nasties, if you will, through the home. And we're excited about it and I can tell you retailers are excited about it. So, you know, where cat pride is particularly strong, which is up and down the east coast and then to the southeast, virtually all of our customers have taken it into distribution and not only just distribution, but incremental distribution.

Ocean freight rates pressured, which highlight a significant drop in east coast of China shipping costs. Among other routes. So are you seeing are beginning to see any benefit in your shipping costs.

And I'll turn it over to Aaron to answer.

Speaker 7: Yeah, John , I'm happy to answer the question you heard my earlier talk about where we're still struggling with inflating cost inputs. This definitely is an area where we're seeing cost relief.

Yes, John I'm happy to answer the question you heard me earlier talk about where were still struggling with.

Inflating cost inputs. This definitely is an area, where we're seeing cost relief.

Speaker 7: Freight, both domestic and export has come down and stabilized. We are seeing that and it will take advantage of it. That was the place, however, where it became the most extreme and most inflated during the supply chain challenges and pre-pandemic. Those costs are not back to historical levels, but we have definitely seen relief.

Freight both domestic and export has come down and stabilize.

We are seeing that it had been and we will take advantage of it.

Speaker 7: As important, if not more so to us, has been the improvement in reduction in lead times. Dan alluded earlier to our great service. We're thankful to be back to a place where international freight is more predictable and lead time to allow us to meet our customers on time needs.

As important if not more so to us has been the improvement and reduction in lead times, Stan alluded earlier to our great service.

Thankful to be back to a place where international freight is more predictable and lead time to allow us to meet our customers on time needs.

Perfect.

Chris Lamson: I'll come back to your question on timing, but insightful question around launching it against, you know, everything are launching it against the base versus an incremental item. That choice out of the gate was deliberate. We wanted to build use it as an opportunity to build out our shelf space and really highlight a new benefit to the category. We are, as we speak, innovating further against this benefit. We think it's a big deal.

Christopher Lamson: I'll come back to your question on timing, but insightful question around launching it against, you know, everything are launching it against the base versus an incremental item. That choice out of the gate was deliberate. We wanted to build use it as an opportunity to build out our shelf space and really highlight a new benefit to the category. We are, as we speak, innovating further against this benefit. We think it's a big deal.

Speaker 3: Um, great. Thank you. So I am going to see Susan. Is your line working now?

Great. Thank you so I'm going to do.

Susan Your line working now.

Speaker 3: So the next question I'm going to have Dan Jaffee answer is from Robert Smith. Please remind me about the seasonality and the quarterly numbers. Dan, do you want to take that?

Okay. So the next question I'm going to have Dan Jaffee answers from Robert Smith.

Please remind me about the seasonality in our quarterly numbers and you want to take that.

Yes.

Good question I think what you see is that generally there is not a lot of seasonality in our business. When you take into account our diversified portfolio of products. Obviously there is.

Chris Lamson: Our customers think it's a big deal. Our consumer returns on it, both from an early takeaway perspective, but also from the research led up to it, we're all very positive. I will tell you, the EPA process is quite long, which is a good thing and a bad thing. It builds a really nice moat around us driving this benefit. We received federal approval at this point more than 18 months ago. You then, and these cannot be parallel paths, once you have federal approval, you go through all each of the states and gain their approval as well, which like I said, build the moat around things, but we'll also create long lead times for our further development here, which, like I said, is very much underway. We're excited about the benefit and we're excited about the initial returns we're getting on the item.

Christopher Lamson: Our customers think it's a big deal. Our consumer returns on it, both from an early takeaway perspective, but also from the research led up to it, we're all very positive. I will tell you, the EPA process is quite long, which is a good thing and a bad thing. It builds a really nice moat around us driving this benefit. We received federal approval at this point more than 18 months ago. You then, and these cannot be parallel paths, once you have federal approval, you go through all each of the states and gain their approval as well, which like I said, build the moat around things, but we'll also create long lead times for our further development here, which, like I said, is very much underway. We're excited about the benefit and we're excited about the initial returns we're getting on the item.

Unknown Executive: Thanks, Chris.

Christopher Lamson: Thanks, Chris.

Unknown Executive: Okay.

There is some seasonality within the individual products, you've got the <unk> choice, which is reliant on ball field usage. So while we do an early sell in the winter months really the predominant uses in the spring.

Speaker 2: So while we do an early foul in the winter months, really the predominant uses them to spring.

Speaker 2: the summer and the fall you've then got our blue fluid purification business which is very much tied to when they harvest the crop so you know their fourth quarter could be our biggest of the year

Net net when you put it all together, we're relatively flat, which is nice which again further.

<unk>, our diverse portfolio and that's what we've always tried to do.

We've always tried to.

Speaker 2: supply markets and deliver value across a wide range of applications. So that over the course of a year, some are up, some are down. We just happen to get very fortunate that last year they pretty much were all up, which was very, it was a great time to be in our calcium betnite business last year. And we see a lot of momentum ahead of...

The supply markets and deliver value.

It's a wide range of applications. So that over the course of the year. Some are up some are down we just happen to get very fortunate that last year. They pretty much were all up which was very it was a great time to be in our calcium bentonite business last year, and we see a lot of momentum heading a new so.

Ethan Star: The question comes from Ethan Starr, and he asks, is Amlin making progress towards getting one or more significant orders from large producers of paddle, poultry or swine? And Wade, can you please answer that? Yes. Thanks, Leslie. And again, thank you, Ethan. The simple answer is yes. If you look at the market in North America, we're already selling to several of the largest integrators in the North American market. That is continuing to grow with recent penetration, again, and a number of the key accounts here in North America.

Wade Robey: The question comes from Ethan Starr, and he asks, is Amlin making progress towards getting one or more significant orders from large producers of paddle, poultry or swine? And Wade, can you please answer that? Yes. Thanks, Leslie. And again, thank you, Ethan. The simple answer is yes. If you look at the market in North America, we're already selling to several of the largest integrators in the North American market. That is continuing to grow with recent penetration, again, and a number of the key accounts here in North America.

Speaker 2: So thank you for your question, but there's really not enough seasonality across the consolidated business that you would have to.

So thank you for your question, but theres really not much seasonality across the consolidated business that you would have to take that into your model.

Speaker 2: take that into your model. I see a question just came in about clocks. I'm happy to take that one. Aaron, obviously you could take it too, but I've got the mic and I'm not giving it up.

A question just came in about Clorox I'm happy to take that one Aaron obviously, you could take it too, but I've got the mic and I am not giving it up.

Speaker 2: And Chris, actually, you could talk to, but you guys have educated me on this. For those of you wondering where this question is coming from, they've put out, they mean in chloroxic, put out a lot of news, really.

And Chris actually you could you could talk to what you guys are educated and it's for those of you wondering where this question is coming from they put out they meaning clorox have put out a lot of news releases around the fact that they've had some cyber.

Speaker 2: around the fact that they've had some cyber problems, cyber security problems with their

Ethan Star: So great progress there as we continue to launch our portfolio here in the United States. As you look around the world, we have been in those markets a little bit longer, and so they're a little bit more established for us, but we continue to see expanded growth of our sales into alternative species to poultry. So in the ruminum market specifically in dairy, some of our largest customers in Asia are actually in the dairy sector.

Wade Robey: So great progress there as we continue to launch our portfolio here in the United States. As you look around the world, we have been in those markets a little bit longer, and so they're a little bit more established for us, but we continue to see expanded growth of our sales into alternative species to poultry. So in the ruminum market specifically in dairy, some of our largest customers in Asia are actually in the dairy sector.

<unk> cyber security problems with their.

Speaker 2: ERP system and it is it is wreak havoc on them. There's no doubt that their supply chains then got

ERP system and it is it is recap them there is no doubt that their supply chains.

Got.

Speaker 2: They're in the front there. Their inventories were sold through and the shelves were getting pretty bare. Happy to say that they they they seem to fix their problems. The orders are back and they seem to be even playing ketchup mode So you know, what do I think the the impact will be on us? There are second largest customers. So obviously they're very important

Shrunk their inventories were sold through and the shelves were getting pretty bare happy.

Happy to say that they seem to fix their problems. The orders are back and they seem to be even playing catch up mode. So.

Ethan Star: And we're seeing that being replicated now in Latin America in the cattle market and the beef cattle market, so another ruminant species. But we're seeing new testing and moving towards adoption are some of the largest cattle operations in Latin America, specifically in Brazil. So we're excited about that continue to see the broad multi species applicability of our products and the application of them in solutions that are really allowing us to grow our participation in these in these markets. So yes, absolutely, and we expect to see continued progress in this way in the coming year.

Wade Robey: And we're seeing that being replicated now in Latin America in the cattle market and the beef cattle market, so another ruminant species. But we're seeing new testing and moving towards adoption are some of the largest cattle operations in Latin America, specifically in Brazil. So we're excited about that continue to see the broad multi species applicability of our products and the application of them in solutions that are really allowing us to grow our participation in these in these markets. So yes, absolutely, and we expect to see continued progress in this way in the coming year.

Do I think the impact will be on us.

Our second largest customers. So obviously they are very important to us.

Wade Robey: Great, thank you.

Unknown Executive: Great, thank you.

Speaker 2: But I think in the first quarter, which is August of September and October , by the time we hit the peaks and the valleys, they'll generally be, it'll be an immaterial difference. That's what I'm hoping for. It might be slightly material, but it's not going to derail our quarters. So good question, and we do certainly support and wish Clorox the best as they dig themselves out of.

But I think in the first quarter, which is August September and October by the time, we hit the peaks and valleys they'll generally be it'll be an immaterial difference that's what I'm, hoping for it might be slightly material, but it's not going to derail our quarter. So good question and we do certainly support and wish Clorox the best.

They dig themselves out of this.

Speaker 3: Lovely. Are there any other questions you want to cover before I head out? I'm closing it up. There's just one. We're going to take this one last question from John Bear. And his question is, do you see any significant increase or need to increase capital expenditures for upgrades or replacements of plant operations over the next three years? And I know Aaron's talked about- I'm going to stop it out of Aaron.

Lastly are there any other questions you want to cover before I Hello.

Those are all just what we're going to take this one last question from John Bair and his question is do you see any significant increase or need to increase capital expenditures for upgrades or replacements of plant operations over the next three years.

Aaron Christiansen: Next question comes from John Bear, and he says a recent article in the Wall Street Journal had lines ocean freight rates pressures, which highlight a significant drop in East Coast to China shipping costs among other routes. So are you seeing or beginning to see any benefit in your shipping costs? I'm going to turn it over to Aaron to answer. Yeah, John, I'm happy to answer the question you heard me earlier talk about where we're still struggling with inflating cost inputs.

And I know Eric.

Aaron.

Speaker 2: Yeah, I have Aaron do it, but the answer is a resounding yes, but Aaron you know talk about

But the answer is a resounding, yes, but erin talked about it yes.

Dan I already answered the key message, which is a resounding yes John .

But it's also already planned for Dan alluded to it earlier and I alluded to it earlier, we are already in the midst of a multi year cycle.

Aaron Christiansen: This definitely is an area where we're seeing cost relief. Freight both domestic and export has come down and stabilized. We are seeing that and then we'll take advantage of it. That was the place, however, where it became the most extreme and most inflated during the supply chain challenges and pre pandemic those costs are not back to historical levels, but we've definitely seen relief. As important, if not more so to us, has been the improvement in reduction in lead times and alluded earlier to our great service. We're thankful to be back to a place where international freight is more predictable and lead time to allow us to meet our customers on time needs.

Of a higher level of capital spending the historical.

Unknown Executive: Great, thank you.

It is we already have a very intelligently built five to 10 year plan.

Speaker 7: So yes, and already well planned for an aligned on organizationally just.

Speaker 2: And they want us to be healthy. They want us to be able to replace our capital so that we can continue to supply them the quality and quantity that they require and value.

Daniel Jaffee: So I am going to see, Susan, is your line working now? Okay, so the next question I'm going to have Dan Jaffee answer is from Robert Smith. Please remind me about the seasonality and accordingly numbers. Dan, do you want to take that? Yeah, good question. I think what you see is that generally there's not a lot of seasonality in our business when you take into account our diversified portfolio of products. Obviously there is, there is some seasonality within the individual products.

Unknown Executive: Great, thank you. So I am going to see, Susan, is your line working now?

Daniel Jaffee: Okay, so the next question I'm going to have Dan Jaffee answer is from Robert Smith. Please remind me about the seasonality and accordingly numbers. Dan, do you want to take that? Yeah, good question. I think what you see is that generally there's not a lot of seasonality in our business when you take into account our diversified portfolio of products. Obviously there is, there is some seasonality within the individual products. You've got the pros choice, which is, you know, rely on ball field usage.

Speaker 2: and they've received the message very well and we very much appreciate it.

Speaker 2: So my customers are listening, if our customers are listening, thank you very much. Obviously we're all in this together.

All in this together we're out of time I am assuming everyone is happy with the quarter happy with the fiscal year I know the team and I are and we very much look forward to talking to you after our first quarter.

Speaker 2: We're out of time. I am assuming everyone is happy with the quarter, happy with the fiscal year. I know the team and I are. And we very much look forward to talking to you after our first quarter, which ends October 31st, and we'll be at our next telecom, and so it'll be the first quarter of F-24. So until then, be safe, be healthy, and thank you very much for your support.

Which ends October 31, and we will be at our next teleconference will be the first quarter about 24, so until then.

Daniel Jaffee: You've got the pros choice, which is, you know, rely on ball field usage. So while we do an early sell in the winter months, really the predominant uses in the spring, the summer and the fall, you've then got our fluid purification business, which is very much tied to when they harvest the crop. So, you know, their fourth quarter could be our biggest of the year. But net, net, net, net, when you put it all together, we're relatively flat, which is nice, which again further validates our diverse portfolio.

Daniel Jaffee: So while we do an early sell in the winter months, really the predominant uses in the spring, the summer and the fall, you've then got our fluid purification business, which is very much tied to when they harvest the crop. So, you know, their fourth quarter could be our biggest of the year. But net, net, net, net, when you put it all together, we're relatively flat, which is nice, which again further validates our diverse portfolio.

Be safe be healthy and thank you very much for your support.

Speaker 1: This concludes today's conference call. Thank you for participating. You may now disconnect.

Okay.

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

Daniel Jaffee: And that's what we've always tried to do. We've always tried to, you know, supply markets and deliver value across a wide range of applications so that over the course of a year, some are up, some are down, we just happen to get very fortunate that last year, they pretty much were all up, which was very, it was a great time to be in our calcium vet night business last year. And we see a lot of momentum heading in new. So thank you for your question. But not, there's really not enough seasonality across the consolidated business that you would have to take that into your model.

Daniel Jaffee: I see a question just came in about clocks. I'm happy to take that one. Aaron, obviously you could take it too, but I've got the mic and I'm not giving it up. And Chris, actually, you could talk to, but you guys have educated me on this. For those of you wondering where this question is coming from, they've put out, they mean chloroxic, have put out a lot of news releases around the fact that they've had some cyber problems, cyber security problems with their ERP system.

Daniel Jaffee: And it is, it is wreak havoc on them. There's no doubt that their supply chains then got shrunk or their inventories were sold through and the shelves were getting pretty bare. Happy to say that they, they, they seem to fix their problems. The orders are back and they seem to be even playing ketchup mode. So, you know, what do I think the, the impact will be on us. There are second largest customers.

Daniel Jaffee: So obviously they're very important to us. But I think in the first quarter, which is August September and October, by the time we hit the peaks and the valleys, they'll generally be, it'll be an immaterial difference. That's what I'm hoping for. It might be slightly material, but it's not going to derail our quarter. So good question. And we do certainly support and wish chloroxic the best as they dig themselves out of this.

Unknown Executive: Lovely.

Unknown Executive: Are there any other questions you want to cover before I head out?

Unknown Executive: Are there any other questions you want to cover before I head out? We're going to take this one last question from John Bear and his question is, do you see any significant increase or need to increase capital expenditures for upgrades or replacements of plant operations over the next three years? And I know Aaron. Yeah, have Aaron do it, but the answer is a resounding yes, but Aaron, you know, talk about it.

Unknown Executive: Yeah, Dan already answered the key message, which is a resounding yes, John, but it's also already planned for Dan alluded to it earlier and I alluded to it earlier, we are already in the midst of the multi-year cycle of a higher level of capital spending that historical. It is, we already have a very intelligently built five to ten-year plan, the plans for it, we're looking for intelligent ways to overlap business continuity investments, growth investments and savings investments.

Unknown Executive: So yes, and already well planned for and aligned on organizationally, John. And I would add, you know, I just want to thank our customers because we've had to go out to them and say, look, this appreciation that we're charging is based on historic cost and as we're replacing these assets, it's costing twice easily. Twice as much to replace these assets that were put into service 15 and 20 years ago, and they want us to be healthy, they want us to be, you know, be able to replace our capital so that we can continue to supply them the quality and quantity that they require and value. And they've received the message very well and we very much appreciate it. So if my customers are listening, if our customers are listening, thank you very much. Obviously, we're all in this together.

Daniel Jaffee: We're out of time. I am assuming everyone is happy with the quarter happy with the fiscal year. I know the team and I are. And we very much look forward to talking to you after our first quarter, which ends October 31st, and we'll be at our next teleconference will be the first quarter of F 24.

Daniel Jaffee: So until then, be safe, be healthy and thank you very much for your support.

Unknown Executive: This concludes today's conference call. Thank you for participating.

Unknown Executive: You may now disconnect.

Q4 2023 Oil-Dri Corporation of America Earnings Call

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