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Operator: Good day, and thank you for standing by. Welcome to the Q2 fiscal 2026 earnings discussion for Oil-Dri Corporation of America. At this time, participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. If you would like to ask a question during the session, please press star then 1 on your telephone. You will then hear an automatic message advising you when your hand is raised. To withdraw yourself from the queue, please press star then 1 again. I would now like to turn the conference over to your speaker for today, President and CEO, Daniel Jaffee. Please go ahead.

Daniel Jaffee: Thank you, and welcome, everybody. We are in virtual mode, so we have people dialing in from all over. We very much appreciate you getting your questions in early. That gave us a chance to develop our responses and prioritize, so thank you for doing that. With me today is Susan Kreh, our CFO and CIO; Aaron Christiansen, our VP of Operations; Christopher Lamson, Group Vice President of Business-to-Business and Strategic Growth Initiatives; Wade Robey, VP of Agriculture and President of Amlan International; Laura Scheland, Vice President and General Manager of our Consumer Products Division; Bruce Patsey, our Vice President of Fluids Purification; Mervyn de Souza, VP of Research and Development; Tony Parker, our VP, General Counsel, and Secretary; and Leslie Garber, our Director of Investor Relations. I am going to turn it over to Leslie for our Safe Harbor provision.

Leslie Garber: Good morning, everyone. I also want to note that John Blake, VP, Corporate Controller, is on the call today. 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-Dri Corporation of America stock. Thank you for joining us. Now I am turning it back over to you, Dan.

Daniel Jaffee: Great. Thank you, Leslie. As always, I am going to have a few comments, but I am really going to turn it over to the team to walk you through a lot of the details and what went on in the quarter. I am very proud of the results. We had a very, very, very strong quarter, especially given the way we navigated through the storm called Fern. I am not going to get into that too much because I know Susan is going to cover it, and Aaron is probably going to cover it. All I am going to say is it was another validation of the commitment and the caring that our global teammates have for doing everything they can to create value from sorbent minerals and help deliver value to our shareholders because we had a lot of heroic effort.

We absolutely emphasized safety first, making sure that everyone took care of their family. They were without power; they were without water for some period of time. It was really a dynamic situation, and we navigated it very, very well. I am just very proud of the team. Susan, I am going to turn it over to you to walk us through the quarter.

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Susan Kreh: Sure. Thank you, Dan. In order to preserve the most time for the Q&A portion of this call, I am going to highlight a few financial matters and then address any of your other questions during the Q&A session. During our second fiscal quarter, Oil-Dri Corporation of America continued to deliver strong financial performance. However, when I reflect back on the second quarter, what makes me so proud to be a part of this team is how everyone, especially our operations leadership, handled the situation with winter storm Fern. They played a team game and demonstrated agility in using our plant network to service our customers, and they did so while embracing the core values of our culture. Those core values shone brightly when the first thing that the operations team addressed as the magnitude of the storm impact unfolded was the safety and well-being of our teammates, followed closely by a focus on taking care of our customers, both of which are key pillars of our We Care values.

Aaron, I hope your team is listening and that they know how much the rest of us appreciate what they did to handle such a major disruption and handle it so well. Switching gears back to financial performance, I want to highlight our continued ability to generate strong cash flows. During the second quarter of our fiscal year 2026, Oil-Dri Corporation of America generated EBITDA of $22 million, which was in line with the $22 million of EBITDA generated during the same quarter a year ago. For the first six months of fiscal year 2026, Oil-Dri Corporation of America has generated cash flows from operating activities of just over $28 million. Our strong ability to generate cash was an enabler in building our inventories. The elevated levels of inventory going into January played a key role in being able to service our customers while several of our production facilities experienced outages resulting from winter storm Fern.

Our strong cash position also supports our continued investments in growth and infrastructure projects in our manufacturing facilities. We ended our fiscal second quarter with cash and cash equivalents of $47 million. Our outstanding debt at the end of the second quarter, including current maturities of notes payable, was $40 million, meaning that at this point in time, we have more cash than debt, and we are extremely well positioned to make continued investments in our business to support our strategic growth initiatives, such as a couple of the new product launches that we will see in the second half of this fiscal year. In summary, our strong financial performance and our strong cash position, coupled with our deep cultural values of being a team-based organization with a focus on our people and our customers, enabled our resiliency during a major weather-related disruption.

I will take your questions during the Q&A if you have any specific accounting or financial questions. With that, Dan, I will turn it back over to you.

Daniel Jaffee: Okay. Great. Before I open it up to the Q&A, we had a great board meeting yesterday, and I was not being facetious when I said, look. The one constant—I have been doing this job since 1995, so I have not been promoted in 31 years. You have seen a lot of dynamic growth the last three to five years, and a lot of that was seeds that were planted maybe three years before that. For the fun of it, I was clicking on my app this morning, and if you look at our one-year growth rate on the stock price, it is 36%. When I click the two, it jumps to 88%. When I click the five, it jumps to 258%. I am sincere in saying that is a direct result of the incredible work that our team does on a global basis every single day, led by the people you are hearing on this teleconference.

When you invest in Oil-Dri Corporation of America, you are investing in the team, and we have a phenomenal team. I want to thank them publicly for the incredible job they do. Leslie, I will turn it over to you now for the Q&A. Leslie, I am not hearing you.

Leslie Garber: I am here. We will now open for questions. Please submit your questions using the Ask a Question field on the webcast and click Submit. Our first question comes from John Bear from Ascend Wealth Advisors, and he asks: Several years ago, Oil-Dri Corporation of America made it known that considerable CapEx cost would be undertaken over a three- to five-year period to upgrade and modernize plant and equipment. Recognizing there are always unexpected developments that pop up, how far along is that effort? Have the major initiatives been accomplished, and can we expect that those costs will diminish over the next few years? Aaron, will you please take that?

Aaron Christiansen: Thanks, John. I appreciate the question. As we approach the completion of our fourth year of elevated capital spending, I would say the program has really progressed as intended. We have executed our plan with strong discipline, addressing some foundational areas of the business, including revitalizing portions of our mine fleet, advancing power, air, and other critical infrastructure, and prioritizing core processing assets. Really importantly, we do not view this as a discrete project with a defined endpoint. Although previously communicated as a three- to five-year endeavor, that was an initial belief. Our approach to capital allocation, ongoing, is to increasingly anchor to our long-term replacement cost of our asset base with a focus on sustaining high uptime, optimizing capacity, and consistently meeting customer service expectations.

I often say to Dan and Susan, I am the steward of our asset base and manufacturing plants. Reliability and service performance that our customers experience is directly tied to having a manufacturing network that is flexible, continually ready to perform, and that remains central to how we think about capital going forward. Susan and Dan both paid me compliments in the way we managed through winter storm Fern. I will make a direct connection to the ability to have our entire asset base ready to perform when we mashed the pedal coming out of that storm and to use our plants in a way that is flexible and somewhat atypical in the weeks that followed the storm. I hope that answers your question, John.

Leslie Garber: Perfect. The next question comes from Ethan Star, and he asks: What is the sales increase in agriculture and horticulture products, and is the increase in sales sustainable? Are you still finding new customers who want to include Verge granules in products they manufacture? I am going to turn that over to Wade.

Wade Robey: Yes. Thank you, Leslie, and thank you, Ethan, for that question and for noting the excellent performance we have seen in that division in the first half of this year. There are really two parts of the market that we serve, and I will segregate those for you quickly. The first is what I will call the broad-acre market, which would be directed at grains, oilseeds, or pulses. That is the large-scale farming side of the business that we target with the fine ag products that we sell. The second would be on the turf and ornamental side, where we focus with engineered granules like Verge. In both cases, we have seen good performance out of those segments in the first half of the year. The broad-acre side is really driven mostly by planted acres, and we have seen increases in those planted acres over the last year, which allows our ag retailer partners, who are our customers, to service more acres, and that drives sales.

That has been good growth, and we expect that to continue, kind of normal to historic patterns. On the turf and ornamental side, again, it is the engineered side of the business where we target with Verge. That has been good for us as well, and we have seen new product opportunities or new application opportunities come in, specifically with some new customers we have been developing. Those granules are used in products like insecticides or in products like specialty fertilizers for the turf and ornamental markets. Those markets have both been strong. We remain very bullish on the growth of that side of the business as well. Overall, we expect to see good performance over the next couple of years as we continue to expand with current customers and they expand their respective markets as well.

Leslie Garber: Great. Thank you. The next question comes from Robert Smith from Center for Performance Investing, and we also have a couple of other questions that are similar: Will there be new product innovation introductions of note during the second half? Which areas, and can you share any color of expectations as to their importance? As always, thank you. I am going to have Laura Scheland cover that.

Laura Scheland: Sure. Hi. Good morning. Thanks for the question. At Oil-Dri Corporation of America, we are always dedicated to innovation and improved consumer experience with our robust R&D and product development teams, as evidenced by our recent and new product launches in the past fiscal year and this fiscal year. I am excited to report on some updates there. In recent past years, we launched our EPA-approved antibacterial litter and are excited and pleased with the progress and increased distribution during this fiscal year. Also, last quarter, I reported on three new Cat’s Pride crystal items that test better than competition with 30 days’ guaranteed odor control. We are pleased with these items and performance in the market and the distribution that is growing.

I am very excited to announce a new expansion of our crystal litter portfolio just in the past month: a new health monitoring litter that provides great peace of mind to consumers. We are excited to see our proprietary health monitoring formulation that we put a lot of effort into develop—not just what is currently in market, but even improved formulations for real, vibrant color indications. In addition, last quarter, I reported on our new Cat’s Pride scoopable pail that launched in the fall at Walmart. In the second quarter, we added an additional Cat’s Pride Total Odor Guard pail exclusively at Walmart, and they are excited with that expansion of branded items. Additionally, we just launched a new line of Cat’s Pride Max Power Pro items that are exclusively online in our stand-up bags and are designed and optimized for e-commerce fulfillment.

We are really excited about the progress of our innovation geared to offer consumers the best experience and to partner with our strategic customers to satisfy their needs and desires and maximize for the growing e-commerce segment as well. Thank you.

Leslie Garber: Great. The next question comes from Curry Manikandan from Copeland Capital: Can you give more details on underlying drivers spiking in renewable diesel sales? What are the bottlenecks in Golden Passat and MCP? When can we expect it to be steady?

Bruce Patsey: Yes. I will respond to that. This is Bruce Patsey. Currently, the blender’s tax, or the blender’s rebate, was removed, and a producer’s rebate was put in place. This caused a little disruption at some of the renewable customers and actually reduced production as they were trying to figure out how much money they would get back from the federal government. We did see a slowdown. Secondly, the feedstock oils that were brought into these plants changed a little bit, and no longer is there a rebate for feedstocks that come over from China or foreign markets into the U.S. With that, the plants are adjusting. Currently, there is a 45Z rebate put in place, and as these companies start to work with that more in the future, I am sure we are going to see some growth in that renewable market in the coming quarters.

Leslie Garber: The next question comes from Ethan Star: Are you selling the co-packaged lightweight litter to the same customer you sell other co-packaged litter to, or is it being sold to multiple customers? Christopher Lamson, please address that.

Christopher Lamson: Thanks, Leslie, and thanks, Ethan, for the question. Unfortunately, our contractual obligations really do not allow us to share either the names of the brands or partners that we are working with. That being said, I would like to highlight that the revenue that you saw and that we mentioned in the press release is really a combination of a multiyear, cross-functional effort from our team and the partner to bring our first offering in the lightweight segment that is a contract manufacturing item for us. While we are really excited about the new business and the revenue and profit stream that should be created for us going forward, we are just as excited about what it does for the lightweight segment. You have heard me, and more recently Laura, talk time and time again that our strategy is about growing the lightweight segment.

We have a nice-sized pie of it, and we will continue to have that nice-sized pie, but we really want to grow that pie. We think, candidly, as much as there is a big revenue gain here, having a strong player with strong brands participating in the segment with a great product that we worked with them to develop over the last couple of years will continue to do just that. Laura would tell you that segment growth is really continuing to work. If you looked at Nielsen data, you would see that growth rates in the lightweight segment are well ahead of the rest of the segment. In fact, it is the single biggest driver of growth in total cat litter over the last year. We are both pleased about the revenue, and we are pleased about the strategic impact this will make for us for a long time.

Leslie Garber: Thank you. John Bear asked: In the recent 10-Q, you indicate that the year-over-year six-month per-ton manufacturing costs were up, but per-ton transportation and packaging costs were lower. Can you speak to the current trends in your manufacturing costs as well as transportation and packaging cost trends? Are the latter improvements due to your efficiency efforts or the macro environment? Aaron, will you please address that?

Aaron Christiansen: Yes, John, that is another thoughtful question. There are a few elements in your question; I will try to unpack them one at a time. Starting with manufacturing costs, the year-over-year comparison reflects a combination of timing and normal volatility with no single underlying driver or trend. As both Susan, Dan, and I already discussed, we experienced meaningful operational disruption late in the quarter from winter storm Fern, which included temporary production outages at multiple U.S. plants. That created some short-term fixed-cost absorption pressure as well as some variable costs that came with the event. In addition to the timing of the weather—the winter storm late in January—labor-related inputs, in particular benefits, continue to be an area of cost pressure for us, which is not uncommon in the industry.

We have seen that flow through our results. I will add here, our repair costs continue to stabilize, directly related to your prior question and the ongoing reinvestment of capital into our asset base. Turning to transportation, we operate in markets that naturally fluctuate, and recent periods reflected a more balanced freight environment. That being said, we tend to view freight performance less through the lens of spot conditions and more through execution and how we take advantage of those spot conditions. I want to thank and recognize our freight and logistics team for the great work they do to align the right carrier partnerships, network design, and operating discipline to consistently meet customer service expectations—wildly high on-time performance that commonly exceeds 90%.

Maintaining strong on-time performance while managing freight costs requires daily coordination across the organization; that remains a core operational focus for us regardless of market conditions. We would always be better than market conditions through our operational execution. On packaging input costs, inputs have been relatively stable overall, with offsetting pressures across different materials and sourcing categories, including tariffs. I will remind the audience that a very large portion of our packaging materials are domestically sourced. We are less exposed to tariff costs than many competitors. Our focus here, as elsewhere, is on structural capability—standardization, specification, diversification where appropriate—and supplier engagement and partnership.

Rather than short-term commodity movements, we are focused on long-term strategy with the right partners. Those efforts help us manage variability over time, but we do not view them as eliminating exposure to broader cost dynamics. Overall, we continue to manage the business for reliability, service, and long-term operating resilience, recognizing that cost inputs will move differently across categories and time periods.

Leslie Garber: Thanks, Aaron. We have two questions regarding Amlan, one from Ethan Star and one from Robert Smith. I am going to read one of them because Wade Robey will touch on both: Despite the rough quarter for Amlan, what progress are you making with Amlan, and do you expect sales growth for Amlan over the long term? Wade?

Wade Robey: Yes. Thank you, Leslie, and thank you to both of you for that question. I appreciate the opportunity to address the performance in the first part of the year for Amlan. As was mentioned in the press release, we did lose a key account, which has impacted our performance to date quite a bit, which is reflected in the numbers. This is really a function of the extraordinarily large size of the accounts that we target in many cases—around the world, not just in the U.S. market, but in LatAm and in Asia Pacific as well. These accounts are enormous in size. That benefits us greatly on the positive side when we gain a new account; it can hurt us on the downside if we lose an account, albeit temporarily. In this case, we did have an account loss very early in the fiscal year, and since then, we have been working very, very hard to recover that business with our distribution partner.

They are actually the seller of the products to the account directly and through our distribution network. The second thing we have been doing, which we always do, is work to broaden the base of our customers. This has the best effect long term to mitigate the impact of any single account loss. Those two actions are what we have been focusing on. None of this changes the outlook we have for the business or the excitement we have around these markets that we are targeting for Oil-Dri Corporation of America. The animal nutrition, animal feed additive markets are very large around the globe, as you know, and they tend to be high-margin, high-value markets. We are continuing the strategy, continuing our approach, and are just working hard to recover the loss that we saw early in the year.

Leslie Garber: Thank you. Next question is from Robert Smith: From what you see now, what are the headwinds and tailwinds of the oil and gas situation—first with respect to the Fluids segment and then corporate-wide? I am thinking of sustainable aviation fuels, renewables, and then costs. I am first going to have Bruce Patsey address that regarding renewable diesel and Fluids Purification, and then I am going to turn it over to Aaron Christiansen about cost. Bruce?

Bruce Patsey: Yes. Thanks for the question. The conflict that is causing increased fuel costs, obviously for us at the pump, also helps increase the margin for our end users that are using our products to make renewable diesel. We are seeing a slight uptick in orders right now, and they are trying to produce more oil to get out into the market. The tailwinds, I guess, for our end user in this case would be if this price stays up high for a long time, the suppliers of the feedstock oil are going to pass increases on to them, which will then negatively impact their margins. At this point, if it stays a 30- to 60-day issue, I think we will see an uptick with that business. That is my answer. Thank you.

Aaron Christiansen: Great. Leslie, I will speak to it from a cost perspective. Robert, I will remind you and other investors that several years ago, Oil-Dri Corporation of America resumed the practice of forward buying a portion of our consumed natural gas very mathematically and algorithmically. We purchase strips of natural gas to buffer and dollar-cost average our forward exposure. I deliberately continue to avoid the word “hedge.” We are not trying to beat the market. We are trying to dollar-cost average over time and then buy our organization time to understand where prices are going and, where appropriate, pass those costs along in the marketplace as utility costs rise over a period of time. Periods like we are experiencing right now are the points in time that our current strategy provides me great comfort, knowing that we are not exposed to substantial changes in cost short term and have time to react as we see where prices go longer term.

Leslie Garber: Thank you. We have one last question from Robert Smith: Are you already at work using artificial intelligence in the microbiology center to identify targets for new product development for your clay? Mervyn, I will turn that over to you.

Mervyn de Souza: Thanks, Leslie. I appreciate the question, Robert. I think we all know artificial intelligence has become a household term now that is in almost every walk of life, both with positive and negative outcomes. Across Oil-Dri Corporation of America and within the R&D team, as I have mentioned in the past, we have a very thoughtful and deliberate approach when it comes to the use of AI to drive us towards both increased efficiency and effectiveness. We are working on integrating both human and artificial intelligence into our day-to-day operations as they become relevant, both for new product development as well as for improving our existing products, to deliver innovative solutions to our Oil-Dri Corporation of America customers.

Leslie Garber: Wonderful. Thank you. That is the end of the Q&A portion. Dan, do you have any closing remarks?

Daniel Jaffee: Yes. I just want to thank the investors for very thoughtful and on-point questions. It shows you are long-time holders, and you have been very invested in the strategy and growth of the company over many, many years. Your knowledge of where we create value and where we have opportunities is clear by the questions you are asking. Thank you for that. Thank you to the Oil-Dri Corporation of America team. We will be looking forward to our third-quarter teleconference in around 90 days.

Operator: This does conclude today’s program. Thank you all for joining, and you may now disconnect.

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