Financial Analysis

"DEBT We are party to an Amended and Restated Note Purchase and Private Shelf Agreement (as amended, the ""Note Agreement"") with PGIM, Inc. (""Prudential"") and certain existing noteholders and purchasers affiliated with Prudential named therein. Pursuant to the Note Agreement, (i) on May 15, 2020, we issued $10 million in aggregate principal amount of our 3.95% Series B Senior Notes due May 15, 2030 (the ""Series B Senior Notes""), of which $5 million aggregate principal amount remained outstanding as of April 30, 2026, (ii) on December 16, 2021, we issued an additional $25 million in aggregate principal amount of our 3.25% Series C Senior Notes due December 16, 2031 (the ""Series C Senior Notes""), all of which remained outstanding as of April 30, 2026, and (iii) on April 30, 2024 we issued $10 million in aggregate principal amount of our 6.47% Series D Senior Notes due April 30, 2033 (the ""Series D Senior Notes""), all of which remained outstanding as of April 30, 2026. The Note Agreement also provides us with the ability to request, from time to time until September 21, 2026, that Prudential affiliate(s) purchase, at Prudentials discretion and on an uncommitted basis, additional senior unsecured notes of Oil-Dri (the Shelf Notes, and collectively with the Series B Senior Notes, Series C Senior Notes, and Series D Senior Notes, the Notes) in an aggregate principal amount of up to $75 million minus the aggregate principal amount of Notes then outstanding and Shelf Notes t …

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Net sales for our principal products by segment are as follows (in thousands): Business to Business Products Group Retail and Wholesale Products Group For the Nine Months Ended April 30, Product 2026 2025 2026 2025 Cat Litter $ $ $ 198,895 $ 190,656 Industrial and Sports 35,553 35,195 Agricultural and Horticultural 36,615 32,396 Fluids Purification 77,180 82,384 Animal Health & Nutrition 16,309 19,729 Net Sales $ 130,104 $ 134,509 $ 234,448 $ 225,851 Business to Business Products Group Retail and Wholesale Products Group For the Three Months Ended April 30, Product 2026 2025 2026 2025 Cat Litter $ $ $ 69,219 $ 59,743 Industrial and Sports 13,269 13,080 Agricultural and Horticultural 12,442 11,639 Fluids Purification 25,040 25,269 Animal Health & Nutrition 6,359 5,770 Net Sales $ 43,841 $ 42,678 $ 82,488 $ 72,823 …

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STOCK-BASED COMPENSATION The 2006 Plan permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and cash-based awards. Our employees and outside directors are eligible to receive grants under the 2006 Plan. The total number of shares of stock subject to grants under the 2006 Plan may not exceed 3,439,000. As of April 30, 2026, there were 1,074,344 shares of Common Stock or Class B Stock available for future grants under this plan. Restricted Stock All of our non-vested restricted stock as of April 30, 2026 was issued under the 2006 Plan with vesting periods generally between one and five years. We determined the fair value of restricted shares as of the grant date. We recognize the related compensation expense over the period from the date of grant to the date the shares vest. There were 73,400 and 135,850 restricted shares of Common Stock granted during the nine months ended April 30, 2026, and 2025, respectively. There were no restricted shares of Class B Stock granted during the nine months ended April 30, 2026, and 2025. Stock-based compensation expense was $1.0 million for the three months ended April 30, 2026, and 2025, and was $3.1 million and $2.9 million for the nine months ended April 30, 2026, and 2025, respectively. A summary of restricted stock transactions is shown below: Restricted Shares (in thousands) Weighted Average Grant Date Fair Value (per share) Non-vested restricte …

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FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized into categories based on the lowest level of input that is significant to the fair value measurement. The categories in the fair value hierarchy are as follows: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs for similar assets or liabilities or valuation models whose inputs are observable, directly or indirectly. Level 3: Unobservable inputs. Cash equivalents are classified as Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. These cash instruments are primarily money market funds and are included in cash and cash equivalents on the unaudited Condensed Consolidated Balance Sheet. We had $46.2 million in cash equivalents as of April 30, 2026, and $35.3 million in cash equivalents as of July 31, 2025. Balances of accounts receivable, short-term investments and accounts payable approximated their fair values as of April 30, 2026, and July 31, 2025, due to the short maturity and nature of those balances. Debt is reported at outstanding face value, less unamortized debt issuance costs. The estimated fair value of debt, including current maturities, was $40.7 million and $40.3 million as of …

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INTANGIBLE ASSETS AND GOODWILL Our intangible assets are mainly comprised of customer lists, patents, trademarks, trade names and goodwill. We amortize customer lists on a straight-line basis over a useful life of 18 years and patents on a straight-line basis over periods ranging from 7 to 20 years. Estimated intangible amortization for fiscal year 2026 is $1.2 million. Estimated intangible amortization for each of the next five fiscal years is $1.2 million. Trademarks and trade names acquired via acquisitions, with a carrying value of $5.6 million, were determined to have an indefinite life and are not amortized. There have been no triggering events in fiscal years 2026 or 2025 that would indicate a new impairment analysis is needed.

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OTHER CONTINGENCIES We are party to various legal actions that arise from time to time that are ordinary in nature and incidental to the operation of our business, including ongoing litigation. While it is not possible at this time to determine with certainty the ultimate outcome of these or other lawsuits, we believe that none of the pending proceedings will have a material adverse effect on our business, financial condition, results of operations or cash flows. In fiscal year 2023, we recorded a reserve of $2.5 million for anticipated modification costs that we expected to incur to address capacity issues at our sole landfill located in Ochlocknee, Georgia. Reserves are recorded when it is probable that a liability has been incurred, and the amount of the liability can be reasonably estimated. The amount of the reserve represented managements best estimate of the costs for the modification with respect to this matter, at the time. Work began on the modifications during fiscal year 2024. We increased the total estimated cost by $0.6 million and $0.7 million in fiscal years 2024 and 2025, respectively. In fiscal year 2026, we decreased the total estimated cost by $0.2 million resulting in a total $3.6 million expense related to this matter. The modification work is expected to be completed during fiscal year 2026 and, as inherent uncertainties exist in these estimates, we will monitor through the completion of the modification but do not expect that remaining costs in excess …

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LEASES We have operating leases primarily for real estate properties, including corporate headquarters, customer service and sales offices, manufacturing and packaging facilities, warehouses, and research and development facilities, as well as for rail tracks, railcars and office equipment. Certain of our leases for a shared warehouse and office facility, rail track and railcars have options to extend which we are reasonably certain we will exercise and, accordingly, have been considered in the lease term used to recognize our ROU assets and lease liabilities. To determine the present value of the lease liability, we use an incremental borrowing rate, which is defined as the rate of interest that the Company would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments. Further information about our accounting policy for leases is included in Note 1 of the Notes to the unaudited Condensed Consolidated Financial Statements. We have no material finance leases, and variable costs for operating leases are immaterial for the nine months ended April 30, 2026. Operating lease costs are included in Cost of Goods Sold or SG&A expenses in the unaudited Condensed Consolidated Statements of Operations based on the nature of the lease. The following table summarizes total lease costs for our operating leases (in thousands): For the Three Months Ended April 30, For the Nine Months Ended April 30, 2026 …

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"Recently Adopted Accounting Standards In November 2023, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") No. 2023-07, ""Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures"" (""ASU 2023-07""). These amendments primarily require enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. In addition, ASU No. 2023-07 also requires all annual disclosures currently required by Topic 280 to be included in interim periods. These amendments are to be applied retrospectively for all periods presented in the financial statements and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Refer to Note 10 - Operating Segments of this Form 10-Q for the enhanced disclosures added as a result of the adoption of ASU 2023-07. Recently Issued Accounting Standards Not Yet Adopted In December 2023, the FASB issued ASU No. 2023-09, ""Income Taxes (Topic 740): Improvements to Income Tax Disclosures."" These amendments primarily require enhanced disclosures and disaggregation of income tax information by jurisdiction in the annual income tax reconciliation and quantitative disclosures regarding income taxes paid. These amendments are to be applied prospectively, with the option to apply th …

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RELATED PARTY TRANSACTIONS One member of our Board is currently the President and Chief Executive Officer of one of our vendors. Total payments to this vendor for fees and cost reimbursements were $0.1 million and $0.5 million for the three months ended April 30, 2026 and April 30, 2025, respectively, and $0.8 million and $1.0 million for the first nine months of fiscal years 2026, and 2025, respectively. There were no outstanding accounts payable due to that vendor as of either April 30, 2026, or July 31, 2025. One member of our Board retired from the role of President and Chief Executive Officer of a customer of ours on September 28, 2019, and was party to a post-employment consulting agreement with the customer until September 30, 2025. Total sales to that customer, including sales to its subsidiaries, were $0.1 million for both the three months ended April 30, 2026, and April 30, 2025, and $0.2 million and $0.3 million for the first nine months of fiscal years 2026 and 2025, respectively. There were no outstanding amounts due from that customer as of either April 30, 2026, or July 31, 2025.

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OPERATING SEGMENTS We have two reportable operating segments: (1) Retail and Wholesale Products Group and (2) Business to Business Products Group. The Retail and Wholesale Products Group is comprised of our Cat Litter and Industrial and Sports Products and the Business to Business Products Group is comprised of our Agricultural and Horticultural, Fluids Purification, and Animal Health & Nutrition Products. These operating segments are managed separately, and each segment's major customers have different characteristics. The Retail and Wholesale Products Group customers include mass merchandisers, the farm and fleet channel, drugstore chains, pet specialty retail outlets, dollar stores, retail grocery stores, distributors of industrial cleanup and automotive products, environmental service companies, sports field product users and marketers of consumer products. The Business to Business Products Group customers include processors and refiners of edible oils, renewable diesel, petroleum-based oils and biodiesel fuel; manufacturers of animal feed and agricultural chemicals; and distributors of animal health and nutrition products. Our operating segments are also our reportable segments. The accounting policies of the segments are the same as those described in Note 1 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025. Net sales for our principal products by segment are as follows (in thousa …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing