Oil-Dri Corporation Of America Q2 Earnings Call Highlights

Oil-Dri Corporation Of America (NYSE:ODC) executives highlighted strong cash generation and operational resiliency during the company’s fiscal second-quarter 2026 earnings call, with leadership repeatedly pointing to the organization’s response to Winter Storm Fern as a key theme of the quarter.

President and CEO Dan Jaffee said the company posted “a very strong quarter,” and credited what he described as a “heroic effort” across the organization as multiple facilities dealt with storm-related outages. CFO and CIO Susan Kreh echoed that message, emphasizing that the operations team prioritized employee safety and customer service while using Oil-Dri’s broader plant network to fulfill demand.

Cash flow, balance sheet, and storm-related context

Kreh reported second-quarter EBITDA of $22 million, in line with the same quarter a year earlier. For the first six months of fiscal 2026, she said Oil-Dri generated just over $28 million in cash flows from operating activities.

Kreh also noted that strong cash generation enabled the company to build inventory ahead of January, which she said proved important in maintaining service levels while some production sites were offline due to Winter Storm Fern. She added that the company’s cash position supports continued investments in manufacturing growth and infrastructure projects.

At quarter-end, Kreh said Oil-Dri had $47 million in cash and cash equivalents and $40 million in outstanding debt (including current maturities), leaving the company with more cash than debt. She also referenced planned new product launches expected in the second half of the fiscal year.

Capital spending: modernization efforts continue

In response to a question about elevated capital expenditures over the past several years, VP of Operations Aaron Christiansen said the company is approaching completion of its fourth year of higher spending and that the program has progressed “as intended.” He said investments have addressed foundational needs including:

• Revitalizing portions of the mine fleet
• Power, air, and other critical infrastructure work
• Prioritizing core processing assets

Christiansen said management no longer views the effort as a discrete project with a fixed endpoint, describing a shift toward capital allocation that is increasingly anchored to long-term replacement cost of the asset base. He connected the investment program to the company’s ability to operate flexibly following Winter Storm Fern, saying reliability and service depend on maintaining a manufacturing network that is continually ready to perform.

Agriculture and horticulture: growth drivers and Verge demand

VP of Agriculture and President of Amlan International Wade Robey discussed performance in agriculture and horticulture, separating the business into two main segments: a “broad acre” market (grains, oilseeds, pulses) and a turf and ornamental market that uses engineered granules such as Verge.

Robey said broad acre performance is driven largely by planted acres, and he noted increases in planted acres over the last year that have helped Oil-Dri’s agricultural retail partners service more acreage. He said the company expects this to continue in line with historic patterns.

On turf and ornamental, Robey said Verge-related business has been strong and that Oil-Dri has been developing new customers and applications. He cited use cases such as insecticides and specialty fertilizers and said the company remains “very bullish” on growth in that part of the business over the next couple of years as it expands with existing customers and as those customers grow their end markets.

Consumer products: new litter launches and e-commerce focus

Vice President and General Manager of the Consumer Products Division Laura Scheland outlined several product and distribution updates. She said the company’s EPA-approved antibacterial litter has been gaining distribution during the fiscal year.

Scheland also revisited Cat’s Pride crystal litter introductions, saying the company previously launched three new crystal items with “30 days guaranteed odor control,” and that distribution has been growing. She then said Oil-Dri has expanded the crystal litter portfolio further with a new health-monitoring litter launched in the past month. Scheland described it as offering “peace of mind” to consumers, and said Oil-Dri developed a proprietary formulation designed to provide improved color indication.

Additionally, Scheland said the company expanded its Walmart pail offerings. After launching a Cat’s Pride Scoopable Pail in the fall, Oil-Dri added a Cat’s Pride Total Odor Guard Pail exclusively at Walmart during the second quarter. She also said Oil-Dri launched Cat’s Pride Max Power Pro items exclusively online in stand-up bags designed and optimized for e-commerce fulfillment.

Group Vice President of Business to Business and Strategic Growth Initiatives Chris Lamson addressed a question about co-packaged lightweight litter. While he said contractual obligations prevent the company from naming partners, Lamson described the offering as Oil-Dri’s first in the lightweight segment as a contract manufacturing item and said it was the result of a multi-year cross-functional effort with a partner.

Lamson also framed the initiative as strategic, emphasizing that Oil-Dri wants to grow the overall lightweight segment. He said lightweight has been the single biggest driver of growth in total cat litter over the last year, citing Nielsen data.

Renewable diesel, costs, and R&D: policy shifts, input trends, and AI

Vice President of Fluids Purification Bruce Patsey discussed a slowdown in renewable diesel-related sales, attributing the weakness to changes in U.S. incentives. Patsey said the blender’s tax credit (or rebate) was removed and replaced with a producer’s rebate, which disrupted customers as they determined reimbursement levels and reduced production. He also said feedstock oils changed and noted there is no longer a rebate for certain feedstocks brought into the U.S. from foreign markets, which he said required plants to adjust.

Patsey said a 45Z rebate has been put in place and suggested that as companies become more familiar with it, he expects to see growth in the renewable market in coming quarters. In a separate answer about oil and gas dynamics, he said geopolitical conflict has increased fuel costs and could temporarily boost renewable diesel demand as producers seek to produce more fuel for the market, though he cautioned that sustained higher prices could eventually pressure margins if feedstock suppliers pass along increases.

Christiansen addressed trends in manufacturing, transportation, and packaging costs. He said the year-over-year manufacturing cost comparison reflected timing and normal volatility, and noted that Winter Storm Fern caused temporary outages that created fixed cost absorption pressure and certain event-driven variable costs. He also said labor-related inputs—particularly benefits—remain an area of cost pressure, while repair costs have been stabilizing alongside the company’s reinvestment in its asset base.

On transportation, Christiansen said freight markets fluctuate but that Oil-Dri focuses on execution, carrier partnerships, network design, and operating discipline, noting on-time performance that commonly exceeds 90%. For packaging, he said input costs have been relatively stable with offsetting pressures across materials and sourcing categories, including tariffs, and added that a large portion of packaging materials are domestically sourced, making Oil-Dri less exposed to tariffs than many competitors.

Robey also addressed Amlan’s recent performance, saying the business lost a key account early in the fiscal year, which materially impacted results given the large size of accounts the unit targets globally. He said the company is working to recover the business with its distribution partner and is also broadening its customer base to mitigate the impact of any single account. Robey said the long-term outlook and attractiveness of animal nutrition and feed additive markets remain intact.

Finally, VP of Research and Development Mervyn de Souza said Oil-Dri has a “thoughtful and deliberate approach” to artificial intelligence, and that R&D is working on integrating human and artificial intelligence into day-to-day operations where relevant, including for new product development and improvements to existing products.

About Oil-Dri Corporation Of America (NYSE:ODC)

Oil-Dri Corporation of America is a specialty materials company that develops, manufactures and markets sorbent and filtration products for industrial, environmental and consumer applications. Its flagship offerings include clay- and diatomaceous earth–based cat litters, calcium silicate absorbents for spill control and cleanup, and purification media designed to remove contaminants from petroleum, chemical and food-processing streams.

Founded in 1941 and headquartered in Chicago, Illinois, the company has evolved from a single-product operation into a diversified provider of mineral- and chemical-based solutions.