Oil-Dri Corporation of America (ODC) has reported a 62.95 percent plunge in profit for the quarter ended Oct. 31, 2016. The company has earned $2.01 million, or $0.28 a share in the quarter, compared with $5.42 million, or $0.75 a share for the same period last year.

Revenue during the quarter went down marginally by 1.74 percent to $66.61 million from $67.80 million in the previous year period. Gross margin for the quarter expanded 65 basis points over the previous year period to 31.11 percent. Total expenses were 95.43 percent of quarterly revenues, up from 88.53 percent for the same period last year. That has resulted in a contraction of 690 basis points in operating margin to 4.57 percent.

Operating income for the quarter was $3.05 million, compared with $7.78 million in the previous year period.

President and chief executive officer, Daniel S. Jaffee said, "While overall results are down, both our business groups have strong positive momentum. Third party market research data from the latest twelve-week period (ending November 6, 2016) indicates that scanned sales of Cat's Pride Fresh & Light Ultimate Care are up 42% over the prior year, leading the growth of the Lightweight litter segment. However, the positive market results came with a cost. Our Retail & Wholesale’s segment reported a loss for the quarter due to the $6 million planned promotional spending primarily in support of Fresh & Light Ultimate Care products. In addition, sales of our Retail and Wholesale products were down in the period due to our decision to discontinue business with low margin customers. Product trials of Varium, our new non-antibiotic growth promoter for poultry, have exceeded our expectations thus far."

Cash flow from investing activities was $0.53 million for the quarter as against cash outgo of $2.96 million in the last year period.

The company has spent $4.55 million cash to carry out financing activities during the quarter as against cash outgo of $4.68 million in the last year period.

Cash and cash equivalents stood at $15.99 million as on Oct. 31, 2016, down 23.89 percent or $5.02 million from $21.01 million on Oct. 31, 2015.

Working capital increases marginally

Oil-Dri Corporation of America has recorded an increase in the working capital over the last year. It stood at $58.67 million as at Oct. 31, 2016, up 2.26 percent or $1.30 million from $57.37 million on Oct. 31, 2015. Current ratio was at 3.15 as on Oct. 31, 2016, up from 3 on Oct. 31, 2015.

Cash conversion cycle (CCC) has decreased to 60 days for the quarter from 77 days for the last year period. Days sales outstanding were almost stable at 43 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 24 days for the quarter compared with 42 days for the previous year period. At the same time, days payable outstanding was almost stable at 7 days for the quarter, when compared with the previous year period.