Welcome to the 2020 Annual Meeting for Oil-Dri Corporation of America. Our host for today's call is Leslie Garber, Manager of Investor Relations. At this time, all participants will be in a listen-only mode. I will now turn the call over to your host, Leslie Garber. You may begin.

Good morning. Due to the current pandemic, we are conducting this meeting virtually to ensure everyone's health and safety. By hosting this meeting via live webcast, we're able to be more inclusive, reach a greater number of our stockholders, and save cost. On your screen, under meeting materials, you will find the meeting agenda, rules of conduct, lists of stockholders of record, and Oil-Dri's proxy statement and annual report.

Good morning, ladies and gentlemen. I now call to order the 2020 annual meeting of stockholders of Oil-Dri Corporation of America to conduct the formal business set forth in the notice of meeting and proxy statement Commencing on October 27, 2020, a notice regarding the availability of proxy materials or a copy of the proxy materials was mailed to all Oil-Dri stockholders of record as of the close of business on October 9, 2020, which is the record date fixed by Oil-Dri's Board of Directors for the determination of stockholders entitled to notice of and to vote at the meeting. Broadridge Financial Solutions, Inc. has delivered an affidavit confirming the foregoing. Oil-Dri has appointed Peter Sablich of CT Hagberg to serve as the inspector of election for this meeting. He is present and has taken the oath of office. As of October 9, 2020, the record date for this meeting, there were 5,384,560 shares of Oil-Dri's common stock and 2,077,599 shares of Oil-Dri's Class B stock outstanding. Holders of our common stock are entitled to vote one -- to one vote per share. And holders of our Class B stock are entitled to 10 votes per share, and generally vote together without regard to class. A quorum is present at this meeting if holders of a majority of our common stock in Class B stock outstanding and entitled to vote are present in person or webcast or represented by proxy. Thus, the number of voters necessary to constitute a quorum at this meeting is 13,080,276 votes. Mr. Sablich has informed me that there are more than such number of votes represented at this meeting. Therefore, I declare there is a quorum present for purposes of transacting business. Now, I will present some matters to be voted upon. If any stockholder would like to make a comment regarding any of our – the proposals, please submit your comments through the Ask a Question field in the web portal, and we will review any comments on the proposal themselves after all proposals have been presented. I will move to the first proposal. As described in this proxy statement, the first item of business is the election of eight Directors. The proxy statement listed Oil-Dri's nominees for Directors, each of whom currently serves as a Director of Oil-Dri. Those nominees are Daniel S. Jaffe, Ellen-Blair Chube, Paul M. Hindsley, Michael A. Nemeroff, George C. Roeth, Allan H. Selig, Paul E. Suckow, and Lawrence E. Washow.

Thank you, Laura. Hello, and welcome, everybody. And first and foremost, thanks for recounting the vote for us and since it went my way; I will not be making unsubstantiated claims of voter fraud or suing any of our electorates. So, I'm happy to hear we were properly voted in and I will honor the vote. Fiscal 2020 is truly a year that none of us will ever forget and we always say here at the company that winning at Oil-Dri is a team game and this year exemplified that to an incredible level. And I just want to make sure I thank -- start by thanking and then finish by thanking the Oil-Dri team globally, because none of this could have happened without them and it is truly my honor to be leading such a great group of people who share core values and then work every day to create value from sorbent minerals for our investors. And this year, we have the dual charge of not just keeping everybody fiscally healthy, but also physically healthy. And so we have been virtual since March for all our non-frontline workers and then our frontline workers have been coming in every day and we do strictly adhere to all social distancing. We clean the plants three times a day. We do a super cleaning on the weekends. And knock on wood, to date, we have had a few COVID in -- teammates who have had COVID, but to our knowledge, they didn't get it at Oil-Dri. They got it somewhere else and because of our policy of letting people stay home and recover and sequester and so forth quarantine, have not brought it into our facility. So, I just want to thank everybody for keeping Oil-Dri fiscally and physically healthy.

Thank you, Dan and I know you love to sometimes add color on the finance stuff, so feel free to jump in. It's a privilege to be here today at our first ever virtual annual meeting on behalf of my teammates here at Oil-Dri to share the financial results of our record fiscal year in 2020 as well as our strong first quarter of fiscal 2021. Fiscal 2020 was a record year for Oil-Dri both for net sales and that income and momentum continued to carry into the first quarter of fiscal 2021, which had the highest net sales of any of Oil-Dri's first quarters. As I proceed through these slides, I will be sharing a look back at the past decade of performance trends as well as focusing on our first quarter results. So, let's start by looking at 10 years of net sales growth, noting the stronger growth in the past two years, driven by our retail and wholesale products group where we are seeing the benefit of our strategic focus on the lightweight and the private label segments of the cat litter market. Looking at the first quarter of fiscal 2021, the $76 million in first quarter net sales represents year-over-year growth of 7% and is driven by 9% growth in our retail and wholesale products group. The company based 4% growth in our business-to-business products group, were strong sales of our agricultural products were partially offset by a year-over-year reduction in net sales of our Amlan products. As Dan mentioned, we have made some key organizational changes in our Amlan business to better position us to serve the animal health market and Dan has refocused the team on the execution of our animal health product strategy. Taking a 10 year look at our tons sold, you…

Thank you, Susan. Good morning, as Susan as I mentioned I'm Molly VandenHeuvel was the chief operating Chief Operating Officer at oil drive. And I also want to start the discussion with a COVID recap, and impact. Dan did summarize some of this, but I'll get into a little bit more detail. So, 2020 was a tumultuous year. But it is time like these were the true values and the core of a company become evidence and an Oil-Dri's core is focused on keeping our teammates and our business healthy. And as you heard from Susan, we did we did keep our business very healthy. And I'll talk about how we kept our teammates healthy, and how we kept our business operations running. So, first of all, being an essential business was a key component. We are essential through many of our applications to name a few. We're part of the food supply chain and oil purification. We supply antibiotic alternatives for animal health. And of course, cat litter is still essential for cat owners more so now that we're all inside at home. So, we needed to make sure that we kept our business running while keeping us healthy. Our teammates have been flat out amazing and we have done what we can to support them. Their physical safety, financial health and emotional well-being have been a top of our priority list. At the start of a pandemic, we pivoted quickly. Anyone that was not directly needed for production, worked remotely. We had a paradigm here before the pandemic, that many of these roles in the past just could not be effective remotely, such as our very important customer service representative. But we leveraged many of our teammates, and many of our functions and many of our processes to…

Thank you, Molly. Hello, good morning to everyone. My name is Dr. Moskowitz, and as Molly mentioned, I'm the Vice President and General Manager of the Consumer Products Division. Our consumer division continues to post strong growth in 2021, coming off of an 8% net sales growth in 2020. Net sales were up 12% in Q1 2021 driven primarily by gains in our branded scoop cat litter and private label cat litter businesses. These games reflect continued focus again three key pillars. The first of which is creating value through vertical integration. Our inhibited access to premium lightweight clay mines across the country drives value for wheel drive, but it also drives value for our customer partners and our pet parent consumers. Our vertical integration coupled with our 80%-plus year history and expertise in cat litter, have provided with us with a real meaningful point of difference. Secondly, we continue to invest resources with a focus on continuous improvement and quality, ensuring that we're delighting consumers by offering them great products at a great value. And thirdly, our team, we celebrate and embrace our role as a cat litter that cares in both the long-term -- through our decade's long commitment to giving back to animal causes, but also in the day-to-day decisions and strategies that we set as a business. From a product perspective, on the cat litter side, we've been intensely focused on expanding and growing the lightweight portion of our business. For all of the reasons we've been talking about since we launched lightweight in 2012. Firstly, lightly cat litter addresses a key pain point for cat litter consumer. Cat litter is traditionally a very heavy. Second, our vertical integration in lightweight materials allows us to uniquely offer this premium benefits to consumers at a value. And…

Thank you, Jessica. And thank you Dan for the introduction earlier. Good morning. I'm Fred Kao. I'm the Vice President of Global Sales for Amlan. I'm here to talk about opportunity for Oil-Dri's unique mineral to improve global food production by sharing our most exciting animal health product, and why it has so much potential to make huge impact in this 3 million -- $3 billion antibiotic world when the trend is going towards no antibiotic ever for many more countries. China as an example started that in July of 2020. On the feature of Build in America aired in September, our CEO, Dan Jaffee emphasizes the importance of our unique mineral to capture the animal health market for years to come. I say Mother Nature puts everything on this earth and we need to survive. And our endless international businesses are nearing the use of mineral technology to reduce and even eliminate antibiotics used to promote growth in animal protein production. So, as we set Amlan apart, the key differentiators, not only does Amlan has the best scientists working in our innovation Centre, we have a growing portfolio and we have the most important it factors, which is our mineral technology. We have the mineral technology that is beyond any competitors that we face in the marketplaces, please allow me to elaborate. The value of vertical integration, let's take it a little further to know why we have the significant advantages over other similar products in the market by knowing what Oil-Dri present in this very important integrated business of animal health products. Number one, our mining reserve, we have hundreds of years of reserve that we do not have to worry about running low on our most precious raw material. Number two, now many companies out there can…

Fred, thank you and really impressed with your quick grasps of our business and we're going to turn it over to Q&A. We've got a bunch of questions about Amlan and the changes, and you answered a lot of what's out there. But Leslie, why don’t you read the questions and then we'll…

Yes. We have two related questions. I'm going to read them both together. The first one is from Robert Smith, the Centre for Performance Investing. And he asked, where was the direction failure at Amlan? And how will your approach be different? Do you believe you will be able to accomplish substantive progress during the current fiscal year? And then the second related question is from Ethan Star, a private investor. Aside from the pandemic, what are the biggest challenges in growing Amlan sales and why will you succeed where others have not?

Great. Thank you. And I'm going to take the 50,000 foot. I think you heard a lot from Fred, but I'm going to emphasize what he was talking about. I'm going to analogize it to what went on with lightweight cat litter. Before we revolutionized cat litter, cat litter was denominated on a price per pound basis. Those with the lowest price per pound were perceived to be the best value. Despite the fact that not a consumer in America or the world used it by pound, they all use it by volume. So what that incentivized was a race to the bottom putting in the most dense materials you could actually adding rock, so that you could get your weight up, your cost down and your price per pound perceived value to be enhanced. What we did was turn the entire category on its head to the advantage of the consumer who uses it by volume and the environment, because we were able to cut the carbon footprint by 50%, because we're able to put twice as many units on a truck and cut the number of trucks going into our retailers’ distribution centers in half. So it's been to their advantage, too. So it's been a win, win, win for everybody except the entrenched players in the category. And it really took a couple of things. It took a contrarian mind, and it took sort of unilateral control. I mean, it just did I mean, I was in a unique position to make this happen, because I am very much a contrarian. And I had control of the company. And so I could take a $35 million bet that we could turn a $2 billion U.S. market, and frankly, a global market on its head, which is pretty…

Great.

So, Leslie, what else do we’ve got?

Okay. We have next question from John Bair from Ascend Wealth Advisors. And he says congrats on a great year and a difficult time. Are there any new markets in animal health outside of poultry and swine that R&D efforts are either being evaluated or being actively pursued? If so, what might they be? And how far along in the process are you to possibly launch any new products?

Yeah, and I think I hope my competitions, listen, because I'll tell you exactly what we're going to do, so that they can afford all our efforts. John, you know me well. Great question, but I'm not going to answer it. And I think I did sort of answer you that we are really going to be leaning into poultry. So I think being great at one species is better than being average at all species. So we're really leaning into poultry, and we're going to continue to do so. So next one, I think we had a question on the supply chain. Let's go there.

We do. Ethan Star has the next question. The $5 million in savings in the supply chain is very impressive. Could you please give some examples of how this was achieved? And what the prospects are for any possible future savings?

Molly, take it away.

Sure. Yes. So I look at savings in three main buckets, logistics, procurement and manufacturing. And in fiscal 2020 by far the biggest savings were in logistics. Some of that is market driven. But I will say that our VP of Logistics, J.T. Harrison really capitalized on the market last year and wrote some really great contracts for us. But he also led a considerable amount of savings projects that either reduced miles or extra handling or additional costs. So for example, we were able to consolidate some of our ancillary warehouses, reduce mileage, handling in some extra costs. And that's the theme that's he's driven last year. And then for logistics this year, as we read our first quarter results, we actually are going to have to offset, some -- made some pretty significant increases in the market. And so we do have some other similar type logistics savings projects where we reduce handling mileage, and improve our utilization across the board. For manufacturing, we've really seen some overall process improvements. So Aaron Christiansen, our VP of manufacturing and that team have really put a foundational process in place, optimize the way we run our business, and will continue to do so. And then in fiscal 2021 in the manufacturing area, we actually will be starting up some pretty significant capital that we spent that we'll see the savings for, the first we are looking at alternative energy in our cat facility, solar panels and micro-turbines. It's some pretty great projects. And then we have some automatic and optimization in one of our jug lines, so that will be pretty significant. And then the last bucket is in procurement. And that is getting a great focus by our procurement team to really look at opportunities to either renegotiate find different suppliers, or in some cases just redesign the product that are optimized cost. So we've seen great progress both last year too.

Great. Thank you. Leslie, next question.

Yes. Next question comes from Ethan Star. I'm pleased with the growth in cat litter sales, what opportunities are there for continued sales growth and the addition of new retail customers?

Great. Jessica, you want to take this one?

Sure. Hi, Ethan. Thanks for the question. So as we look at our business, we definitely continue to see opportunities for both customer acquisition as well as organic growth. How we look at our business in terms of change and reacting to change? Clearly, consumers are rapidly changing, and we need to make sure that we're adapting. So we're also doing so in a very focused data driven way. So like we talked about in the presentation, we continue to be keenly focused on lightweight and flushability. And frankly, it's really about looking at what's working and what's not. In today's world, we're very fortunate to have a lot of data and a lot of opportunities to evaluate what's working and what not. And it sounds simple, but it's really about evaluating what's working and doubling down on that, as well as reacting to consumers and understanding how consumers are changing, and then how we can change in a way that is this really advantageous to us. And that really benefits to us and where we have a right to win. Looking at marketing, looking at sales, understanding what's working, and then doubling down both from a resource dollars perspective, as well as investing against human resources and team against those key efforts that are really working. We think in lightweight, there's a lot more runway in terms of growth, both again, through customer acquisition, both on the private label side as well as the branded side.

Great. Great answer. Thank you, Jessica. And we are out of questions. And I want to thank you all and I promise to finish the way I started, which is thanking the Oil-Dri teammates globally for keeping not only ourselves fiscally and physically healthy, but also our investors. I know a lot of people rely on our dividend and appreciate our dividend and keeping Oil-Dri. So a lot of companies had to cut their dividend and some cut it just worried that things were going to happen, because they had enough debt and so forth. We entered into the pandemic. That's the part that wasn't lucky. We've always run our business very, very fiscally soundly, and we entered into the pandemic in great financial shape. So we didn't panic. We just said, let's see how this plays out. And it played out very well. We saw a surge in cat litter. We saw continued demand in almost all businesses. We're starting to see a weakening in our jet fuel purification business as global miles flown has gone down. And that's not a surprise. And we are cautiously optimistic that with the vaccine, which I guess is starting in the U.K. this week, which is exciting, that that starts to roll out globally. That it'll come to the U.S. and we will see pitchers and catchers report sometime in April, maybe they'll push the season back a month. Maybe it'll be May. But then that'll mean that universities and municipalities and park districts will be doing the same. And then our Pro's Choice business will pop back sometime in the late spring, early summer of next year. So, thank you for your continued support, and we'll look forward to talking to you after our next quarter.

That concludes today's conference. Thank you for your participation and have a pleasant day.