Executive Summary

Record Q3: Net sales $115.5M (+8% y/y), gross margin 28.6% (+40 bps y/y), operating income $13.9M (+33% y/y), diluted EPS $0.80 (+51% y/y). EBITDA rose 35% to $20.2M, marking 11th consecutive y/y gross margin expansion and 16th consecutive y/y sales growth .
Mix and execution drove B2B strength: Ag carriers hit a quarterly high ($11.6M, +43% y/y) as inventory normalization resumed; Fluids purification grew with U.S. renewable diesel capacity expansion (+13% y/y). R&W grew 3% aided by Ultra Pet crystals, while clay litter declined on lost private-label distribution, bankruptcies, and competitive promotions .
Capital allocation: Board raised the quarterly dividend ~16% to $0.18 (Common) and $0.135 (Class B), the 22nd consecutive year of dividend growth; cash rose to $36.5M; long-term debt declined vs FY24. Management remains disciplined on capex and M&A .
Outlook/tone: Advertising spend expected below FY24; full-year ETR guided to ~19% (vs 20.5% last year). Management highlighted synergy realization at Ultra Pet and ongoing growth vectors (renewable diesel filtration, lightweight/crystal litter), while acknowledging crystal tariff headwinds and clay-litter competitiveness .
Estimates: S&P Global shows minimal/absent consensus coverage for EPS and revenue, limiting beat/miss framing. We expect estimate recalibration around segment mix (B2B outperformance vs R&W clay softness) and normalized margins as costs (transport/materials) rose sequentially in Q3 . Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

Record third-quarter results: “highest third quarter net sales, gross profit and net income on record,” supported by crystals and strong demand in ag and renewable diesel products .
B2B momentum: Ag carriers reached an all-time quarterly high ($11.6M, +43% y/y) and Fluids purification grew 13% y/y on U.S. renewable diesel capacity; B2B operating income +26% y/y to $13.4M .
Capital returns/confidence: 16% dividend increase reflects “strong financial position and confidence in the Company’s future” plus robust operating cash flow ($55M YTD) enabling debt reduction and reinvestment .

What Went Wrong

Clay litter headwinds: Domestic clay-based litter revenue fell 6% y/y on reduced private-label distribution, several customer bankruptcies, and stepped-up competitor promotions; R&W operating income fell 11% y/y despite higher sales .
Cost inflation and mix: Domestic per-ton COGS rose 5% y/y; per-ton material and transport costs up 7% and 8%, respectively, partially offset by lower packaging; this contributed to sequential gross margin normalization vs Q1 .
Crystal tariffs/volatility: Crystal (silica gel) tariff pressure requires “surgical pricing” and synergy offsets; Amlan’s quarter was flat y/y amid tariff/logistics-driven order volatility, though YTD performance met targets .

Financial Results

Consolidated trend (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$127.945	$116.914	$115.501
Gross Margin %	31.9%	29.5%	28.6%
Operating Income ($M)	$21.190	$17.482	$13.904
Operating Margin %	16.6%	15.0%	12.0%
EBITDA ($M)	$26.167	$22.216	$20.248
Diluted EPS - Common ($)	$2.25	$0.89	$0.80

Notes: Q3 y/y growth: revenue +8%, diluted EPS +51%; sequential margins normalized from unusually strong Q1 (mix and costs) .

Segment performance (oldest → newest)

Segment	Metric	Q1 2025	Q2 2025	Q3 2025
Business to Business	Net Sales ($M)	$48.415	$43.416	$42.678
	Operating Income ($M)	$17.110	$14.322	$13.382
Retail & Wholesale	Net Sales ($M)	$79.530	$73.498	$72.823
	Operating Income ($M)	$13.377	$11.328	$9.709

Product mix – Q3 2025 vs Q3 2024

Product (Q3)	Q3 2024 ($M)	Q3 2025 ($M)	y/y
Cat Litter (R&W)	$58.170	$59.743	+3%
Industrial & Sports (R&W)	$12.413	$13.080	+5%
Ag & Horticultural (B2B)	$8.113	$11.639	+43%
Fluids Purification (B2B)	$22.322	$25.269	+13%
Animal Health & Nutrition (B2B)	$5.761	$5.770	~0%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Dividend per Share	Quarterly (Aug 2025 payable)	$0.155 (Common); $0.1165 (Class B) declared in Q3	$0.18 (Common); $0.135 (Class B), payable Aug 22, 2025 (record Aug 8)	Raised ~16%
Advertising Expense	FY 2025	n/a	FY25 total advertising expected lower than FY24	Lowered
Effective Tax Rate	FY 2025	FY24 ~20.5%	FY25 ~19% (full-year estimate)	Lowered
Capital Expenditures	FY 2025–FY 2026	n/a	~$32M in FY25 and ~another $32M in FY26 (plan)	New plan disclosure

No formal revenue/EPS guidance provided in Q3 materials. Management reiterated focus on strategic growth, execution, and disciplined capital allocation .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 FY25)	Current Period (Q3 FY25)	Trend
Renewable diesel/Fluids purification	Q1: record Fluids $30.1M; demand from new plants . Q2: Fluids +17% y/y to $26.5M .	Q3: Fluids +13% y/y; new U.S. plants won; outperformed broader market .	Sustained growth; share gains as capacity ramps.
Lightweight/Crystal litter strategy	Q1: Ultra Pet added; distribution expanding . Q2: +$4.4M crystals; synergy progress .	Q3: Ultra synergy/cost saves exceeded plan; distribution up y/y; tariff mitigation via pricing+synergies .	Executing; tariff management required.
Clay litter competitive environment	Q1: Coarse litter +78%; cyber event in prior year affected comps . Q2: Clay up 2% ex co-pack; antibacterial litter strong .	Q3: Domestic clay -6% y/y; lost private-label account; bankruptcies; competitor promotions .	Near-term pressure; pursuing new private-label wins.
Amlan (Animal Health)	Q1: slightly down overall; China channel transition; LatAm/NA growth . Q2: +82% y/y to $7.7M .	Q3: flat y/y; volatility from tariffs/logistics, but YTD on plan .	Mixed; working through volatility.
Cost inflation & logistics	Q1: COGS/ton flat y/y . Q2: COGS/ton +11% y/y .	Q3: COGS/ton +5% y/y; material +7%, transport +8%, packaging -5% .	Costs moderating vs Q2; still elevated vs prior year.
AI/Technology	Not highlighted.	Early AI journey; augmenting teams; roadmap includes expense control and CX/AP uses .	New initiative.
Natural gas & energy	Not highlighted.	Hedging approach; alternatives evaluated but uneconomic; ongoing efficiency projects .	Risk managed; no near-term fuel switch.
Capital allocation	Q1/Q2: Paid down revolver; disciplined capex .	16% dividend hike; ~$32M capex plan this year and next; M&A “dry powder” .	Confidence in cash generation, reinvestment.

Management Commentary

CEO (press release): “The strength of our diverse product portfolio helped us achieve our highest third quarter net sales, gross profit and net income on record... combination of our recently acquired crystal cat litter business along with significant demand for agricultural and renewable diesel products” .
CFO (call): “Net cash provided by operating activities was $55 million YTD... our belief in the sustainability of that cash flow generation inspired us to raise the dividend 16%” and capital allocation priorities remain investment, M&A, dividend, opportunistic buybacks .
R&W lead (call): Ultra Pet update—“stronger-than-expected cost synergies,” closed expensive 3rd-party warehouses; tariff headwinds managed via “surgical pricing” and synergy offsets; distribution up significantly y/y; pursuing private label crystals .
CEO (call closing): Long-term focus (“tortoise”) with 40+ years reserves per product line; sustained reinvestment in R&D and capital underpinning growth .

Q&A Highlights

Amlan volatility: Flat y/y quarter due to tariff/logistics dynamics; deeper distributor collaboration; YTD on plan, expecting steady finish .
Renewable diesel: Outperformed the market as new plants came online and ODC secured wins; incremental vegetable oil customers added .
Clay private-label dynamics: Lost a significant account; management pursuing 4–5 national retailers and expects lightweight private label momentum to continue .
Crystal tariffs: Exposure limited (<5% of total ODC sales); mitigating via synergies and calibrated pricing while preserving consumer value positioning .
Energy costs: Hedging in place; alternatives assessed but uneconomic; continuous process improvements to optimize fuel usage .
AI: Early-stage adoption to augment teams; roadmap includes cost controls and customer-facing efficiencies .

Estimates Context

Wall Street consensus: S&P Global showed no published quarterly EPS or revenue consensus for Q3 2025 (and adjacent quarters), with database reflecting actuals only; thus, we cannot frame beats/misses versus consensus. Values retrieved from S&P Global.*
Implications: Given sustained B2B outperformance and continued clay-litter pressure, we expect any emerging estimates to reflect mix-led growth, moderating but healthy gross margins (vs an exceptional Q1), and disciplined opex/advertising spend .

Key Takeaways for Investors

Mix-led growth durable: Renewable diesel filtration and ag carriers continue to drive B2B, supporting resilient margins and cash generation even as R&W navigates clay-litter pressures .
Crystal strategy on track: Ultra synergy realization, distribution expansion, and private-label pipeline offset tariff headwinds; overall crystal exposure remains limited for ODC .
Clay-litter reset: Expect near-term noise from competitive promotions and customer consolidation; management targeting new private-label wins and leaning into faster-growing lightweight segment .
Margin normalization: After an exceptional Q1, Q3 margin levels reflect cost mix (materials/transport) and segment mix; ongoing efficiency and lower advertising should help protect profitability .
Strong balance sheet and returns: Higher dividend (16% raise), rising cash, and reduced revolver usage underscore confidence in cash flow and reinvestment capacity, including capex (~$32M per year) and selective M&A .
Watch catalysts: Additional renewable diesel capacity wins, private-label lightweight placements, crystal tariff policy developments, and energy cost trajectory (natural gas) .
Risk checks: Competitive intensity in clay, FX (Canada), VAT/other regulatory items, and logistics could influence quarterly volatility, though YTD execution remains solid .

Sources

Q3 FY25 press release and exhibits: financials, segment/product details, costs, cash/debt, non-GAAP reconciliation .
Q3 FY25 8-K (Item 2.02; dividend 99.2): confirms press release; dividend increase and schedule .
Q3 FY25 10-Q: consolidated/segment tables, product sales by segment, cost commentary, liquidity, debt, mine safety .
Q3 FY25 earnings call transcript: strategy, capital allocation, tariffs, AI, natural gas, Ultra Pet synergies, Q&A .
Prior quarters for trend: Q2 FY25 press release ; Q1 FY25 press release .

Estimates note

S&P Global consensus coverage for ODC’s quarterly EPS/revenue was unavailable; database reflected actuals only. Values retrieved from S&P Global.*

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