Oil-Dri Corporation of America Annual Report 2014

FY2014 Annual Report · Oil-Dri Corporation of America

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Annual Report

(LETTER TO STAKEHOLDERS & FORM 10-K)

2014

Letter to Stakeholders

FISCAL 2014

Fiscal 2014 was a very challenging year for Oil-Dri. Early in our fiscal year, we acquired assets of a long-time competitor,
MFM Industries, Inc. This added thousands of tons of business overnight, which put serious pressure on our supply chain.
Our team rose to the occasion ensuring continuity of supply to our new private label customers. In addition, we faced other
challenges throughout the year that impacted our bottom line, including increased costs for mining, materials, packaging, fuel,
freight and advertising.

However, we made many strides in Fiscal 2014 that we believe
will benefit Oil-Dri for years to come. During the third
quarter, we celebrated the grand opening of our Chinese
subsidiary, Amlan Trading (Shenzhen) Company, Ltd. Half
of the world’s pigs live in China and we believe our product,
Calibrin-Z, to be the most effective bacterial and fungal toxin
binder for swine producers. We are very excited about the
long-term prospects of this investment. We also broke ground
on a capacity expansion project in Georgia for our Fluids
Purification business. We expect to finalize this capital project
during Fiscal 2015 and the added capacity will support our
growth for years to come.

Amlan Trading (Shenzhen) Company, Ltd. Ribbon Cutting Ceremony
Hua Qian, Michael McPherson, Daniel Jaffee, Dr. Ron Cravens & Jeff Turner

Lastly, we continued to invest in the dynamic growth of
Cat’s Pride Fresh & Light litter. We started the lightweight revolution
in cat litter three years ago and the market acceptance has been
phenomenal. According to a third-party market research company,
lightweight litters now account for 9% of the Scoop Segment
sales (we project this to eclipse 25% by the end of 2015) and
have accounted for 68% of the growth of the category during
the past 52 weeks. Our Fresh & Light sales were up 33% during
the year! We anticipate that as lightweight litters account for a
larger percentage of the category, retailers will want to offer their
customers a private label lightweight cat litter option.

Oil-Dri occupies a unique space in the United States, as we are the only national brand manufacturer and marketer of cat
litter with light density clay who actively seeks to grow its private label business with our retail partners. As the market moves
toward lightweight, we stand to benefit on both the branded and private label sides of our business.

The investments highlighted above had a negative impact on our earnings in Fiscal 2014, but each was made in anticipation
of benefiting the Company in the years to come. We very much appreciate the support of our loyal stakeholders and were very
pleased to reward you by raising our dividend for the 11th consecutive year.

Dividend increases are not the only area where we are proud of a streak.
For the second year in a row we were named by the Chicago Tribune as one
of the Top 100 best places to work in Chicago. We were especially proud
to be recognized for having received the highest score for ethical standards
among the thousands of companies surveyed.

Fiscal 2014 was our 74th year in business. The Jaffee Family has been the
controlling stockholder throughout Oil-Dri’s history. We added to our equity
ownership during the year as we believe the future has never looked brighter
for the Company. Thank you for being part of the Oil-Dri Team!

Daniel S. Jaffee
President & Chief Executive Officer

Board of Directors

Executive Officers

Investor Inquiries

Richard M. Jaffee
Chairman

Daniel S. Jaffee
President & Chief Executive Officer

NYSE: ODC

Daniel S. Jaffee
President & Chief Executive Officer

Thomas F. Cofsky
Vice President, Manufacturing

Joseph C. Miller
Vice Chairman,
Independent Consultant

Douglas A. Graham
Vice President, General Counsel
& Secretary

J. Steven Cole
President, Cole & Associates

Mark E. Lewry
Chief Operating Officer

Michael A. Nemeroff
President & Chief Executive Officer,
Vedder Price P.C.

Allan H. Selig
Commissioner of Major League
Baseball; President & Chairman,
Selig Lease Co.

Paul E. Suckow
Business Fellow & Adjunct Professor,
Finance & Economics,
Villanova University

Lawrence E. Washow
Chairman, First Bauxite Corporation
Board Member & Partner,
Eudora Global, LLC

Daniel T. Smith
Vice President, Chief Financial Officer

Paul D. Ziemnisky
Vice President, General Manager,
Consumer Packaged Goods

Annual Meeting

On December 9, 2014 at
9:30 am CT, Oil-Dri Corporation
of America will hold its 2014
Annual Meeting of Stockholders.

Please join us:

The Standard Club
320 South Plymouth Court
Chicago, Illinois 60604

Independent
Registered Public
Accounting Firm

Grant Thornton LLP

Please direct all investor relations
inquiries to:

Reagan B. Culbertson
Investor Relations Manager
(312) 321-1515
info@oildri.com

Oil-Dri Corporation of America
Attention: Investor Relations
410 North Michigan Avenue
Suite 400
Chicago, Illinois 60611-4213

www.oildri.com

Stockholders with inquiries
regarding stock transfers, change
of ownership, change of address
or dividend payments should
contact the company’s registrar
and transfer agent:

Computershare Investor Services
2 North LaSalle Street
Chicago, Illinois 60602-3711
(312) 360-5257

Forward-Looking
Statements

This document contains
forward-looking statements that
are based on current expectations,
estimates, forecasts and projections
about our future performance,
our business, our beliefs and our
management’s assumptions.
See page 4 for cautionary language
regarding such statements.

Amlan, Cat’s Pride, Fresh & Light and
Calibrin are registered trademarks of
Oil-Dri Corporation of America.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended July 31, 2014

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _____ to _____

___________________________

Commission File Number 001-12622

OIL-DRI CORPORATION OF AMERICA

Delaware
(State or other jurisdiction of
incorporation or organization)

36-2048898
(IRS. Employer Identification No.)

410 North Michigan Avenue, Suite 400, Chicago, Illinois 60611-4213

(312) 321-1515

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Common Stock, par value $0.10 per share

Name of Each Exchange on Which Registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:

Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act:

Yes

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days:

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).

Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act:

Large accelerated filer

Accelerated filer

Non-accelerated filer
(Do not check if a smaller reporting company)

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes

The aggregate market value of Oil-Dri’s Common Stock owned by non-affiliates as of January 31, 2014 was $167,618,000.

Number of shares of each class of Oil-Dri’s capital stock outstanding as of September 30, 2014:

Common Stock – 5,001,742 shares

Class B Stock – 2,069,994 shares

Class A Common Stock – 0 shares

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference: Oil-Dri’s Proxy Statement for its 2014 Annual Meeting of Stockholders
(“Proxy Statement”), which will be filed with the Securities and Exchange Commission (“SEC”) not later than November 28,
2014 (120 days after the end of Oil-Dri’s fiscal year ended July 31, 2014), is incorporated into Part III of this Annual Report on
Form 10-K, as indicated herein.

Item

1A.

1B.

7A.

9A.

9B.

CONTENTS

PART I

Page

Business ...................................................................................................................

Risk Factors .............................................................................................................

Unresolved Staff Comments ....................................................................................

Properties .................................................................................................................

Legal Proceedings....................................................................................................

Mine Safety Disclosure............................................................................................

PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.................................................................................

Selected Financial Data............................................................................................

Management's Discussion and Analysis of Financial Condition and Results of
Operations ................................................................................................................

Quantitative and Qualitative Disclosures About Market Risk.................................

Financial Statements and Supplementary Data........................................................

Management's Report on Internal Control Over Financial Reporting .....................

Report of Independent Registered Public Accounting Firm....................................

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure ................................................................................................................

Controls and Procedures ..........................................................................................

Other Information ....................................................................................................

PART III

Directors, Executive Officers and Corporate Governance.......................................

Executive Compensation .........................................................................................

Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters .................................................................................................

Certain Relationships and Related Transactions, and Director Independence ........

Principal Accountant Fees and Services ..................................................................

CONTENTS (CONTINUED)

Item

Page

PART IV

Exhibits and Financial Statement Schedule ................................................

Signatures ....................................................................................................

Schedule II - Valuation and Qualifying Accounts .......................................

Exhibit Index ...............................................................................................

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including those under the heading “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and those statements elsewhere in this report and other documents we file with the SEC,
contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about our future
performance, our business, our beliefs and our management’s assumptions. In addition, we, or others on our behalf, may make
forward-looking statements in press releases or written statements, or in our communications and discussions with investors and
analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Words such as “expect,”
“outlook,” “forecast,” “would,” “could,” “should,” “project,” “intend,” “plan,” “continue,” “believe,” “seek,” “estimate,”
“anticipate,” “may,” “assume,” variations of such words and similar expressions are intended to identify such forward-looking
statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Such statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ
materially, including those described in Item 1A “Risk Factors” below and other documents we file with the SEC. Should one or
more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, intended, expected, believed, estimated, projected or planned. Investors are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except to the extent required
by law, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this
report, whether as a result of new information, future events, changes in assumptions or otherwise.

TRADEMARK NOTICE

Agsorb, Amlan, Calibrin, Cat’s Pride, ConditionAde, Flo-Fre, Fresh & Light, Jonny Cat, KatKit, Oil-Dri, Pel-Unite,
Perform, Pro Mound, Pure-Flo, Rapid Dry, Select, Terra-Green, Ultra-Clear and Verge are all registered trademarks of Oil-Dri
Corporation of America or of its subsidiaries. MD-09, Pro’s Choice and Saular are trademarks of Oil-Dri Corporation of America.
Fresh Step is a registered trademark of The Clorox Company (“Clorox”).

ITEM 1 – BUSINESS

PART I

In 1969, Oil-Dri Corporation of America was incorporated in Delaware as the successor to an Illinois corporation
incorporated in 1946; the Illinois corporation was the successor to a partnership that commenced business in 1941. Except as
otherwise indicated herein or as the context otherwise requires, references to “Oil-Dri,” the “Company,” “we,” “us” or “our” refer
to Oil-Dri Corporation of America and its subsidiaries.

GENERAL BUSINESS DEVELOPMENTS

During fiscal 2014 we made substantial business investments in both of our operating segments, including the acquisition
of certain assets of MFM Industries Inc. (“MFM”), which expanded our private label cat litter business, and the opening of our
subsidiary in Shenzhen, China, which extended the presence of our animal health and nutrition products in China through a direct
sales force. See Note 3 of the Notes to the Consolidated Financial Statements for further information about the MFM acquisition.
In addition, we increased spending for trade promotions and advertising of our cat litter products and invested significantly in
capital at our plant facilities for equipment and capacity expansion. We also experienced cost increases to mine, manufacture and
transport our products during fiscal 2014. Rising costs for natural gas, freight and packaging, as well as increased mining costs
to extract clay deeper in the ground all impacted our annual results.

We believe our balance sheet remains strong at the end of fiscal 2014, even though cash, cash equivalents and short-term
investments declined. Major uses of cash included capital expenditures, the MFM acquisition, advertising, dividend payments and
debt repayments. We believe cash requirements for capital expenditures in fiscal 2015 will be comparable to fiscal 2014 due to
projects at our manufacturing facilities. Advertising and promotions spending is also anticipated to be a significant use of cash in
fiscal 2015, which we believe will be at levels similar to fiscal 2014. Our capital requirements are subject to change as business
conditions warrant and opportunities arise.

PRINCIPAL PRODUCTS

We are a leader in developing, manufacturing and/or marketing sorbent products. Our sorbent products are principally
produced from clay minerals, primarily consisting of montmorillonite and attapulgite and, to a lesser extent, other clay-like sorbent
materials, such as Antelope shale, which we refer to collectively as our “clay” or our “minerals.” Our sorbent technologies include
absorbent and adsorbent products. Absorbents, like sponges, draw liquids up into their many pores. Examples of our absorbent
clay products are Cat’s Pride and Jonny Cat branded premium cat litter, as well as other private label cat litters. We also produce
Oil-Dri branded floor absorbents, Agsorb and Verge agricultural chemical carriers and ConditionAde and Calibrin enterosorbents
used in animal feed. Adsorbent products attract impurities in liquids, such as metals and surfactants, and form low-level chemical
bonds. Examples of our adsorbent products are Oil-Dri synthetic sorbents, which are used for industrial cleanup, and Pure-Flo,
Perform and Select bleaching clay products, which act as a filtration media for edible oils, fats and tallows. Also, our Ultra-Clear
product serves as a purification aid for petroleum-based oils and by-products. Our absorbent and adsorbent products are described
in more detail below.

Agricultural and Horticultural Products

We produce a wide range of granular and powdered mineral absorbent products that are used for crop protection chemical
carriers, drying agents, bulk processing aids, growing media components and seed enhancement media. Our brands include:
Agsorb, an agricultural chemical carrier and drying agent; Verge, an engineered granule agricultural chemical carrier; Flo-Fre, a
highly absorbent microgranule flowability aid; Terra-Green, a growing media supplement; and Pel-Unite, an animal feed binder.

Agsorb and Verge carriers are used as an alternative to agricultural sprays. The clay granules absorb active ingredients
and are then delivered directly into, or on top of, the ground providing a more precise application than chemical sprays. Verge
carriers are spherical, uniform-sized granules with very low dust. Agsorb drying agent is blended into fertilizer-pesticide blends
applied by farmers to absorb moisture and improve flowability. Agsorb also acts as a flowability aid for fertilizers and chemicals
used in the lawn and garden market. Flo-Fre microgranules are used by grain processors and other large handlers of bulk products
to soak up excess moisture preventing caking. We employ technical sales people to market these products in the United States.

Animal Health and Nutrition Products

We produce, or use contract processors to produce, several products used in the livestock feed industry. Many of these
products are sold under the Amlan trademark. Calibrin and ConditionAde enterosorbent products are used in animal feed to absorb
naturally-occurring mycotoxins. These products work to improve animal health and productivity. Our MD-09 moisture manager
product is a feed additive for the reduction of wet droppings in poultry. Pel-Unite and Pel-Unite Plus products are specialized
animal feed pellet binders. These products are sold through a network of feed products distributors in the United States and through
distribution agreements with animal health and nutrition products distributors in Latin America, Africa, the Middle East and Asia.
Beginning in fiscal 2014, these products were also sold by sales people employed by our new subsidiary located in China, as
further described in Foreign Operations below.

Bleaching Clay and Purification Aid Products

We produce an array of bleaching, purification and filtration applications used by edible oil, jet fuel and other petroleum-
based product processors around the world. Bleaching clays are used by edible oil processors to adsorb soluble contaminants that
create oxidation problems. Our Pure-Flo and Perform bleaching clays remove impurities, such as trace metals, chlorophyll and
color bodies, in various types of edible oils. Perform products provide increased activity for hard-to-bleach oils. Our Select
adsorbents are used to remove contaminants in vegetable oil processing and can be used to prepare oil prior to the creation of
biodiesel fuel. Our Ultra-Clear product is used as a filtration and purification medium for jet fuel and other petroleum-based
products. These products are marketed in the United States and in international markets. The products are supported by our team
of technical sales employees as well as by agent representatives and the services of our research and development group.

Cat Litter Products

Branded products. We produce two types of mineral-based cat litter products, traditional coarse and scoopable, both of
which have absorbent and odor controlling characteristics. Scoopable litters have the additional characteristic of clumping when
exposed to moisture, allowing the consumer to selectively dispose of the used portion of the litter. Our coarse and scoopable
products are sold under our Cat’s Pride and Jonny Cat brand names. In 2011, under our Cat's Pride Fresh & Light product line,
we introduced a scoopable lightweight litter to the industry that offers superior performance with the added convenience of being
lighter to carry and pour. We subsequently expanded our Cat's Pride Fresh & Light offerings to include a flushable, paper-based
cat litter. In addition, we offer our coarse litter in a pre-packaged, disposable tray under the Cat’s Pride KatKit and Jonny Cat
brands. Moreover, we offer litter box liners under the Cat's Pride and Jonny Cat product lines.

Private label products. We also produce private label cat litters for other customers that are sold through both independent

food brokers and our sales force to major grocery, drug, dollar store, mass-merchandiser and pet outlets.

Co-packaged products. We have two long-term supply arrangements (one of which is material to our business) under
which we manufacture branded traditional litters for other marketers. Under these co-manufacturing relationships, the marketer
controls all aspects of sales, marketing, and distribution, as well as the odor control formula, and we are responsible for
manufacturing. The long-term supply agreement that is material to our business is with Clorox, under which we have the exclusive
right to supply Clorox’s requirements for Fresh Step coarse cat litter up to certain levels.

Industrial and Automotive Products

We manufacture and/or sell products made from clay, polypropylene and recycled cotton materials that absorb oil, grease,
water and other types of spills. These products are used in industrial, home and automotive environments. Our clay-based sorbent
products, such as Oil-Dri branded floor absorbent, are used for floor maintenance in industrial applications to provide a non-slip
and non-flammable surface for workers. These floor absorbents are also used in automotive repair facilities, car dealerships and
other industrial applications, as well as for home use in garages and driveways. Our Oil-Dri branded polypropylene-based and
cotton-based products are sold in various forms, such as pads, rolls, socks, booms and spill kits.

Industrial and automotive sorbent products are sold through a distribution network that includes industrial, auto parts,
safety, sanitary supply, chemical and paper distributors. These products are also sold through environmental service companies,
mass merchandisers, catalogs and the Internet.

Sports Products

Pro’s Choice sports field products are used on baseball, softball, football and soccer fields. Pro’s Choice soil conditioners
are used in field construction or as top dressing to absorb moisture, suppress dust and improve field performance. Pro Mound
6

packing clay is used to construct pitcher’s mounds and batter’s boxes. Rapid Dry drying agent is used to dry up puddles and slick
spots after rain. Sports products are used at all levels of play, including professional, college and high school and on municipal
fields. These products are sold through a network of distributors specializing in sports turf products.

BUSINESS SEGMENTS

We have two reportable operating segments for financial reporting derived from the different characteristics of our two
major customer groups: Retail and Wholesale Products Group and Business to Business Products Group. The Retail and Wholesale
Products Group customers include mass merchandisers, wholesale clubs, drugstore chains, pet specialty retail outlets, dollar stores,
retail grocery stores, distributors of industrial cleanup and automotive products, environmental service companies and sports field
product users. The Business to Business Products Group customers include: processors and refiners of edible oils, petroleum-
based oils and biodiesel fuel; manufacturers of animal feed and agricultural chemicals; distributors of animal health and nutrition
products; and marketers of consumer products. Certain financial information on both segments is contained in Note 4 of the Notes
to the Consolidated Financial Statements and is incorporated herein by reference.

We do not manage our business, allocate resources or generate revenue data by product line. Any of our products may
be sold in one or both of our operating segments. Information concerning total revenue of classes of similar products accounting
for more than 10% of consolidated revenues in any of the last three fiscal years is not separately provided because it would be
impracticable to do so.

FOREIGN OPERATIONS

Our wholly-owned subsidiary, Amlan Trading (Shenzhen) Company, Ltd., located in Shenzhen, China, is dedicated to
animal health and provides natural disease management solutions for livestock. This subsidiary sells animal health and nutrition
products under our Amlan brand name.

Our wholly-owned subsidiary, Oil-Dri Canada ULC, is a manufacturer and marketer of branded and private label cat
litter in the Canadian marketplace. Among its leading brands are Saular, Cat’s Pride and Jonny Cat. Our Canadian business also
manufactures or purchases and sells industrial granule floor absorbents, synthetic polypropylene sorbent materials and agricultural
chemical carriers.

Our wholly-owned subsidiary, Oil-Dri (U.K.) Limited, is a manufacturer and marketer of industrial floor absorbents,
bleaching earth and cat litter. These products are marketed in the United Kingdom and Western Europe. Oil-Dri (U.K.) Limited
also sells synthetic polypropylene sorbent materials, filtration units and plastic containment products.

Our wholly-owned subsidiary, Oil-Dri SARL, is a Swiss company that performs various management, customer service

and administrative functions for the international business of our domestic operations.

Our foreign operations are subject to the normal risks of doing business overseas, such as currency fluctuations, restrictions
on the transfer of funds and import/export duties. We were not materially impacted by these foreign currency fluctuations in any
of our last three fiscal years. See Item 7A “Quantitative and Qualitative Disclosures About Market Risk” for further information
about our foreign markets risks. Certain financial information about our foreign operations is contained in Note 4 of the Notes to
the Consolidated Financial Statements and is incorporated herein by reference.

CUSTOMERS

Sales to Wal-Mart Stores, Inc. (“Walmart”) and its affiliates accounted for approximately 19%, 20% and 22% of our total
net sales for the fiscal years ended July 31, 2014, 2013 and 2012, respectively. Walmart is a customer in our Retail and Wholesale
Products Group segment. There are no customers in the Business to Business Products Group with sales equal to or greater than
10% of our total sales; however, sales to Clorox (a customer in our Business to Business Products Group) and its affiliates accounted
for approximately 6% of total net sales for the fiscal year ended July 31, 2014 and 7% of total net sales for each of the fiscal years
ended July 31, 2013 and 2012. The degree of margin contribution of our significant customers in the Business to Business Products
Group varies, with certain customers having a greater effect on our operating results. The loss of any customer other than those
described in this paragraph would not be expected to have a material adverse effect on our business.

COMPETITION

Price, customer service, marketing, technical support, product quality and distribution resources are the principal methods
of competition in our markets and competition historically has been very vigorous. Some of our competitors, particularly in the
7

sale of cat litter (the largest product in our Retail and Wholesale Products Group), have substantially greater financial resources
or market presence than we do and have established brands.

In our Retail and Wholesale Products Group, we have five principal competitors, including one which is also our customer.
The overall cat litter market has been stable in recent years as household cat ownership has remained relatively constant. Scoopable
products have a majority of the cat litter market share followed by traditional coarse products. The overwhelming majority of all
cat litter is mineral based; however, cat litters based on alternative strata such as paper, various agricultural waste products and
silica gels have niche positions. There is significant competition to attract consumers of cat litter across multi-outlet channels,
including grocery, mass-merchandisers, dollar, pet and drug stores. These retailers desire product innovation and demand the best
value from their suppliers, thus they enjoy substantial negotiating leverage over their suppliers, including us. We differentiate
ourselves through our operations via nation-wide distribution, strong customer service and world class sales, marketing and research
and development teams, which gives us a potential advantage over smaller and regional manufacturers.

In the Business to Business Products Group, we have 14 principal competitors. Our agricultural chemical carrier products
have experienced competition from new engineered granular technologies in the agricultural and horticultural markets. Our
bleaching clay and fluids purification products are sold in a highly cost competitive global marketplace. Performance is a primary
competitive factor for these products. The animal health portion of this segment also operates in a global marketplace with price
and performance competition from multi-national and local competitors.

PATENTS

We have obtained or applied for patents for certain of our processes and products sold to customers in both the Retail
and Wholesale Products Group and the Business to Business Products Group. These patents expire at various times, including
fiscal 2015. We expect no material impact on our business from the expiration of patents in the upcoming year.

BACKLOG; SEASONALITY

As of July 31, 2014, 2013 and 2012, our backlog of orders were valued at approximately $7,401,000, $8,503,000 and
$4,741,000, respectively. The value of backlog orders was determined by the number of tons on backlog order and the net selling
prices. All backlog orders are expected to be filled within the next 12 months. We consider our business, taken as a whole, to be
moderately seasonal; however, business activities of certain customers (such as agricultural chemical manufacturers) are subject
to such seasonal factors as crop acreage planted, product formulation cycles and weather conditions.

EFFECTS OF INFLATION

Inflation generally affects us by increasing the cost of employee wages and benefits, transportation, processing equipment,
purchased raw materials and packaging, energy and borrowings under our credit facility. See Item 7 “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and Item 7A “Quantitative and Qualitative Disclosures About
Market Risk” below.

RESERVES

We mine our clay on leased or owned land near our manufacturing facilities in Mississippi, Georgia, Illinois and California;
we also have reserves in Nevada, Oregon and Tennessee. We estimate that our proven mineral reserves as of July 31, 2014 are
approximately 148,578,000 tons in aggregate and our probable reserves are approximately 135,371,000 tons in aggregate, for a
total of 283,949,000 tons of mineral reserves. Based on our rate of consumption during fiscal year 2014, and without regard to
any of our reserves in Nevada, Oregon and Tennessee, we consider our proven reserves adequate to supply our needs for over 40
years. Although we consider these reserves to be extremely valuable to our business, only a small portion of the reserves, those
which were acquired in acquisitions, was reflected at cost on our balance sheet.

It is our policy to attempt to add to reserves in most years, but not necessarily in every year, an amount at least equal to
the amount of reserves consumed in that year. We have a program of exploration for additional reserves and, although reserves
have been acquired, we cannot assure that additional reserves will continue to become available. Our use of these reserves, and
our ability to explore for additional reserves, are subject to compliance with existing and future federal and state statutes and
regulations regarding mining and environmental compliance. During the fiscal year ended July 31, 2014, we utilized these reserves
to produce a majority of the sorbent products that we sold.

Proven reserves are those reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches,
workings or drill holes; grade and/or quality are computed from results of detailed sampling, and (b) the sites for inspection,
8

sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral
content of reserves are well established. Probable reserves are computed from information similar to that used for proven reserves,
but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of
assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. We
employ geologists and mineral specialists who estimate and evaluate existing and potential reserves in terms of quality, quantity
and availability.

MINING OPERATIONS

We have conducted mining operations in Ripley, Mississippi since 1963, in Ochlocknee, Georgia since 1968, in Blue
Mountain, Mississippi since 1989, in Mounds, Illinois since 1998 and in Taft, California since 2002. Our clay is surface mined
on a year-round basis, generally using large earth moving scrapers, bulldozers, or excavators and off-road trucks to remove
overburden (non-usable material), and then loaded into dump trucks with backhoes or front end loaders for movement to the
processing facilities. The mining and hauling of our clay is performed by us and by independent contractors. Our current operating
mines range in distance from immediately adjacent to approximately 13 miles from the related processing plants. Processing
facilities are generally accessed from the mining areas by private roads and in some instances by public highways. Each of our
processing facilities maintains inventories of unprocessed clay of approximately one week of production requirements. See Item
2 “Properties” below for additional information regarding our mining properties and operations.

The following schedule summarizes the net book value of land and other plant and equipment for each of our manufacturing

facilities:

Ochlocknee, Georgia ....................
Ripley, Mississippi .......................
Mounds, Illinois ...........................
$
Blue Mountain, Mississippi.......... $
$
Taft, California .............................

Land &
Mineral
Rights

Plant and
Equipment

(in thousands)
8,646

1,770

1,545

878

1,506

29,059

10,212

1,506

10,538

3,203

EMPLOYEES

As of July 31, 2014, we employed 793 persons, 47 of whom were employed by our foreign subsidiaries. We believe our
corporate offices, research and development center and manufacturing facilities are adequately staffed and no material labor
shortages are anticipated. Approximately 45 of our employees in the U.S. and approximately 22 of our employees in Canada are
represented by labor unions, with whom we have entered into separate collective bargaining agreements. We consider our employee
relations to be satisfactory.

ENVIRONMENTAL COMPLIANCE

Our mining and manufacturing operations and facilities in Georgia, Mississippi, California and Illinois are required to
comply with state surface mining and environmental protection statues. These domestic locations and our Canadian operations
are subject to various federal, state and local statutes, regulations and ordinances which govern the discharge of materials, water
and waste into the environment or otherwise regulate our operations. In recent years, environmental regulation has grown
increasingly stringent, a trend that we expect will continue. We endeavor to be in compliance at all times and in all material respects
with all applicable environmental controls and regulations. As a result, expenditures relating to environmental compliance have
increased over the years; however, these expenditures have not been material. As part of our ongoing environmental compliance
activities, we incur expenses in connection with reclaiming mining sites. Historically, reclamation expenses have not had a material
effect on our cost of sales.

In addition to the environmental requirements relating to our mining and manufacturing operations and facilities, there
is increasing federal and state regulation with respect to the content, labeling, use, and disposal after use of various products that
we sell. We endeavor to be in compliance at all times and in all material respects with those regulations and to assist our customers
in that compliance.

We cannot assure that, despite all commercially reasonable efforts, we will always be in compliance in all material respects
with all applicable environmental regulations or with requirements regarding the content, labeling, use, and disposal after use of
our products; nor can we assure that from time to time enforcement of such requirements will not have a material adverse effect
on our business. See Item 1A “Risk Factors” below for a discussion of these and other risks to our business.

ENERGY

We primarily used natural gas in the processing of our clay products during fiscal 2014. We have the ability to switch
among various energy sources, including natural gas, recycled oil and coal as permitted. See Item 7A “Quantitative and Qualitative
Disclosures About Market Risk” below for more information about commodity risk with respect to our energy use.

RESEARCH AND DEVELOPMENT

At our research and development facility in Vernon Hills, Illinois, we develop new products and applications and improve
existing products. The facility’s staff (and various consultants they engage from time to time) may consist of geologists,
mineralogists and chemists. In the past several years, our research efforts have resulted in a number of new sorbent products and
processes. The facility produces prototype samples and tests new products for customer trial and evaluation. No significant research
and development was customer sponsored, and all research and development costs are expensed in the period in which incurred.
See Note 1 of the Notes to the Consolidated Financial Statements for further information about research and development expenses.

AVAILABLE INFORMATION

This Annual Report on Form 10-K, as well as our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
any amendments to all of the foregoing reports, are made available free of charge on or through the “Investor Information” section
of our website at www.oildri.com as soon as reasonably practicable after such reports are electronically filed with or furnished to
the SEC.

Information related to corporate governance at Oil-Dri, including its Code of Ethics and Business Conduct, information
concerning executive officers, directors and Board committees, and transactions in Oil-Dri securities by directors and executive
officers, is available free of charge on or through the “Investor Information” section of our website at www.oildri.com. The
information on our website in not included as a part of, nor incorporated by reference into, this Annual Report on Form 10-K.

ITEM 1A – RISK FACTORS

We seek to identify, manage and mitigate risks to our business, but risk and uncertainty cannot be eliminated or necessarily
predicted. You should consider the following factors carefully, in addition to other information contained in this Annual Report
on Form 10-K, before making an investment decision with respect to our securities.

Risks Related to our Business

Our future growth and financial performance depend in large part on successful new product introductions.

A significant portion of our net sales comes from the sale of products in mature categories, some of which have had little
or no volume growth or have had volume declines in recent fiscal years. Our future growth and financial performance will require
that we successfully introduce new products or extend existing product offerings to meet emerging customer needs, technological
trends and product market opportunities. We cannot be certain that we will achieve these goals. The development and introduction
of new products generally require substantial and effective research, development and marketing expenditures, some or all of
which may be unrecoverable if the new products do not gain market acceptance. New product development itself is inherently
risky, as research failures, competitive barriers arising out of the intellectual property rights of others, launch and production
difficulties, customer rejection and unexpectedly short product life cycles may occur even after substantial effort and expense on
our part. Even in the case of a successful launch of a new product, the ultimate benefit we realize may be uncertain if the new
product “cannibalizes” sales of our existing products beyond expected levels.

We face intense competition in our markets.

Our markets are highly competitive and we expect that both direct and indirect competition will increase in the future.
Our overall competitive position depends on a number of factors including price, customer service, marketing, technical support,
product quality and delivery. Some of our competitors, particularly in the sale of cat litter (the largest product in our Retail and
Wholesale Products Group), have substantially greater financial resources or market presence and have established brands. The
competition in the future may, in some cases, result in price reductions, reduced margins or loss of market share or product
distribution, any of which could materially and adversely affect our business, operating results and financial condition. If we fail
to compete successfully based on these or other factors, our business, financial condition and future financial results could be
materially and adversely affected.

Our periodic results may be volatile.

Our operating results have varied on a quarterly basis during our operating history and are likely to fluctuate significantly
in the future. Our expense levels are based, in part, on our expectations regarding future net sales, and many of our expenses are
fixed, particularly in the short term. We may be unable to adjust spending in a timely manner to compensate for any unexpected
revenue shortfall. Any significant shortfall of net sales in relation to our expectations could negatively affect our quarterly operating
results. Our operating results may be below the expectations of our investors as a result of a variety of factors, many of which are
outside our control. Factors that may affect our quarterly operating results include:

• fluctuating demand for our products and services;
• size and timing of sales of our products and services;
• the mix of products with varying profitability sold in a given quarter;
• changes in our operating costs including raw materials, energy, transportation, packaging, overburden removal, trade

spending and marketing, wages and other employee-related expenses such as health care costs, and other costs;

• our ability to anticipate and adapt to rapidly changing conditions;
• introduction of new products and services by us or our competitors;
• our ability to successfully implement price increases and surcharges, as well as other changes in our pricing policies or

those of our competitors;

• variations in purchasing patterns by our customers, including due to weather conditions;
• the ability of major customers and other debtors to meet their obligations to us as they come due;
• our ability to successfully manage regulatory, intellectual property, tax and legal matters;
• the incurrence of restructuring, impairment or other charges; and
• general economic conditions and specific economic conditions in our industry and the industries of our customers.

Accordingly, we believe that quarter-to-quarter comparisons of our operating results are not necessarily meaningful. Investors
should not rely on the results of one quarter as an indication of our future performance.

Acquisitions involve a number of risks, any of which could cause us not to realize the anticipated benefits.

We intend from time to time to strategically explore potential opportunities to expand our operations and reserves through
acquisitions. Identification of good acquisition candidates is difficult and highly competitive. If we are unable to identify attractive
acquisition candidates, complete acquisitions, and successfully integrate the companies, businesses or properties that we acquire,
our profitability may decline and we could experience a material adverse effect on our business, financial condition, or operating
results. Acquisitions involve a number of inherent risks, including:

• uncertainties in assessing the value, strengths, and potential profitability of acquisition candidates, and in identifying the
extent of all weaknesses, risks, contingent and other liabilities (including environmental, legacy product or mining safety
liabilities) of those candidates;

• the potential loss of key customers, management and employees of an acquired business;
• the ability to achieve identified operating and financial synergies anticipated to result from an acquisition;
• problems that could arise from the integration of the acquired business; and
• unanticipated changes in business, industry or general economic conditions that affect the assumptions underlying our

rationale for pursuing the acquisition.

Any one or more of these factors could cause us not to realize the benefits we anticipate to result from an acquisition. Moreover,
acquisition opportunities we pursue could materially affect our liquidity and capital resources and may require us to incur
indebtedness, seek equity capital or both. In addition, future acquisitions could result in our assuming more long-term liabilities
relative to the value of the acquired assets than we have assumed in our previous acquisitions.

We depend on a limited number of customers for a large portion of our net sales.

A limited number of customers account for a large percentage of our net sales, as described in Item 1 “Business” above.
The loss of, or a substantial decrease in the volume of, purchases by Walmart, Clorox or any of our other top customers would
harm our sales and profitability. In addition, an adverse change in the terms of our dealings with, or in the financial wherewithal
or viability of, one or more of our significant customers could harm our business, financial condition and results of operations.

We expect that a significant portion of our net sales will continue to be derived from a small number of customers and
that the percentage of net sales represented by these customers may increase. As a result, changes in the strategies of our largest
customers may reduce our net sales. These strategic changes may include a reduction in the number of brands or variety of products
they carry or a shift of shelf space to private label products or increased use of global or centralized procurement initiatives. In
addition, our business is based primarily upon individual sales orders placed by customers rather than contracts with a fixed
duration. Accordingly, most of our customers could reduce their purchasing levels or cease buying products from us on relatively
short notice. While we do have long-term contracts with certain of our customers, including Clorox, even these agreements are
subject to termination in certain circumstances. In addition, the degree of profit margin contribution of our significant customers
varies. If a significant customer with a more favorable profit margin was to terminate its relationship with us or shift its mix of
product purchases to lower-margin products, it would have a disproportionately adverse impact on our results of operations.

Price or trade concessions, or the failure to make them to retain customers, could adversely affect our sales and profitability.

The products we sell are subject to significant price competition. From time to time, we may need to reduce the prices
for some of our products to respond to competitive and customer pressures and to maintain market share. These pressures are
often exacerbated during an economic downturn. Any reduction in prices to respond to these pressures would reduce our profit
margins. In addition, if our sales volumes fail to grow sufficiently to offset any reduction in margins, our results of operations
would suffer. Because of the competitive environment facing many of our customers, particularly our high-volume mass
merchandiser customers, these customers have increasingly sought to obtain price reductions, specialized packaging or other
concessions from product suppliers. These business demands may relate to inventory practices, logistics or other aspects of the
customer-supplier relationship. To the extent we provide these concessions, our profit margins are reduced. Further, if we are
unable to maintain terms that are acceptable to our customers, these customers could reduce purchases of our products and increase
purchases of products from our competitors, which would harm our sales and profitability.

Increases in energy and other commodity prices would increase our operating costs, and we may be unable to pass all these
increases on to our customers in the form of higher prices and surcharges.

If our energy costs increase disproportionately to our net sales, our earnings could be significantly reduced. Increases in
our operating costs may reduce our profitability if we are unable to pass all the increases in energy and other commodity prices
on to our customers through price increases or surcharges. Sustained price increases or surcharges in turn may lead to declines in
volume, and while we seek to project tradeoffs between price increases and surcharges, on the one hand, and volume, on the other,
there can be no assurance that our projections will prove to be accurate.

We are subject to volatility in the price and availability of natural gas, as well as other sources of energy. In the past, we
have endeavored to reallocate a portion of our energy needs among different sources of energy due to seasonal supply limitations
and the higher cost of one particular fuel relative to other fuels; however, there can be no assurance that we will be able to effectively
reallocate among different fuels in the future. From time to time, we may use forward purchase contracts or financial instruments
to hedge the volatility of a portion of our energy costs. The success or failure of any such hedging transactions depends on a
number of factors, including our ability to anticipate and manage volatility in energy prices, the general demand for fuel by the
manufacturing sector, seasonality and the weather patterns throughout the United States and the world.

The prices of other commodities such as paper, plastic resins, synthetic rubber, raw materials and steel significantly
influence the costs of packaging, replacement parts and equipment we use in the manufacture of our products and the maintenance
of our facilities. As a result, increases in the prices of these commodities generally increase the costs of the related materials we
use. These increased materials costs present the same types of risks as described above with respect to increased energy costs.

Our business could be negatively affected by supply, capacity, information technology and logistics disruptions.

Supply, capacity, information technology and logistics disruptions could adversely affect our ability to manufacture,
package or transport our products. Some of our products require raw materials that are provided by a limited number of suppliers,
or are demanded by other industries or are simply not available at times. Also, some of our products are manufactured on equipment
at or near its capacity thus limiting our ability to sell additional volumes of such products until more capacity is obtained. Moreover,
disruptions or failures in our information technology or phone systems could adversely affect our communications and business
operations. In addition, an increase in truck or ocean freight costs may reduce our profitability if we are unable to pass such
increases on to our customers through price increases or surcharges, and a decrease in transportation availability may affect our
ability to deliver our products to our customers and consequently decrease customer satisfaction and future orders.

Reductions in inventory by our customers could adversely affect our sales and increase our inventory risk.

From time to time, customers in both our Retail and Wholesale Products Group and our Business to Business Products
Group have reduced inventory levels as part of managing their working capital requirements. Any reduction in inventory levels
by our customers would harm our operating results for the financial periods affected by the reductions. In particular, continued
consolidation within the retail industry could potentially reduce inventory levels maintained by our retail customers, which could
adversely affect our results of operations for the financial periods affected by the reductions.

The value of our inventory may decline as a result of surplus inventory, packaging changes driven by regulatory
requirements or market refreshment, price reductions or obsolescence. We must identify the right product mix and maintain
sufficient inventory on hand to meet customer orders. Failure to do so could adversely affect our revenue and operating results.
If circumstances change (for example, an unexpected shift in market demand, pricing or customer defaults) there could be a material
impact on the net realizable value of our inventory. We maintain an inventory valuation reserve account against diminution in the
value or saleability of our inventory; however, there is no guaranty that these arrangements will be sufficient to avoid write-offs
in excess of our reserves.

Environmental, health and safety matters create potential compliance and other liability risks.

We are subject to a variety of federal, state, local and foreign laws and regulatory requirements relating to the environment
and to health and safety matters. For example, our mining operations are subject to extensive governmental regulation on matters
such as permitting and licensing requirements, workplace safety, plant and wildlife protection, wetlands and other environmental
protection, reclamation and restoration of mining properties after mining is completed, the discharge of materials into the
environment, and the effects that mining has on groundwater quality and availability. We believe we have obtained all material
permits and licenses required to conduct our present operations. We will, however, need additional permits and renewals of permits
in the future.

The expense, liabilities and requirements associated with environmental, health and safety laws and regulations are costly
and time-consuming and may delay commencement or continuation of exploration, mining or manufacturing operations. We have
incurred, and will continue to incur, significant capital and operating expenditures and other costs in complying with environmental,
health and safety laws and regulations. In recent years, regulation of environmental, health and safety matters has grown increasingly
stringent, a trend that we expect will continue. Substantial penalties may be imposed if we violate certain of these laws and
regulations even if the violation was inadvertent or unintentional. Failure to maintain or achieve compliance with these laws and
regulations or with the permits required for our operations could result in substantial operating costs and capital expenditures, in
addition to fines and administrative, civil or criminal sanctions, third-party claims for property damage or personal injury, cleanup
and site restoration costs and liens, the issuance of injunctions to limit or cease operations, the suspension or revocation of permits
and other enforcement measures that could have the effect of limiting our operations. Under the “joint and several” liability
principle of certain environmental laws, we may be held liable for all remediation costs at a particular site and the amount of that
liability could be material. In addition, future environmental laws and regulations could restrict our ability to expand our facilities
or extract our existing reserves or could require us to acquire costly equipment or to incur other significant expenses in connection
with our business. There can be no assurance that future events, including changes in any environmental requirements and the
costs associated with complying with such requirements, will not have a material adverse effect on us.

Government regulation imposes significant costs on us, and future regulatory changes (or related customer responses to
regulatory changes) could increase those costs or limit our ability to produce and sell our products.

In addition to the regulatory matters described above, our operations are subject to various federal, state, local and foreign
laws and regulations relating to the manufacture, packaging, labeling, content, storage, distribution and advertising of our products
and the conduct of our business operations. For example, in the United States, some of our products are regulated by the Food
and Drug Administration, the Consumer Product Safety Commission and the Environmental Protection Agency and our product
claims and advertising are regulated by the Federal Trade Commission. Most states have agencies that regulate in parallel to these
federal agencies. In addition, our international sales and operations are subject to regulation in each of the foreign jurisdictions in
which we manufacture, distribute or sell our products. There is increasing federal and state regulation with respect to the content,
labeling, use, and disposal after use of various products we sell. Throughout the world, but particularly in the United States and
Europe, there is also increasing government scrutiny and regulation of the food chain and products entering or affecting the food
chain.

If we are found to be out of compliance with applicable laws and regulations in these or other areas, we could be subject
to loss of customers and to civil remedies, including fines, injunctions, recalls or asset seizures, as well as potential criminal
sanctions, any of which could have a material adverse effect on our business. Loss of or failure to obtain necessary permits and
registrations could delay or prevent us from meeting product demand, introducing new products, building new facilities or acquiring
new businesses and could adversely affect operating results. If these laws or regulations are changed or interpreted differently in
the future, it may become more difficult or expensive for us to comply. In addition, investigations or evaluations of our products
by government agencies may require us to adopt additional labeling, safety measures or other precautions, or may effectively limit
or eliminate our ability to market and sell these products. Accordingly, there can be no assurance that current or future governmental
regulation will not have a material adverse effect on our business or that we will be able to obtain or renew required governmental
permits and registrations in the future.

We are also experiencing increasing customer scrutiny of the content and manufacturing of our products, particularly our
products entering or affecting the food chain, in parallel with the increasing government regulation discussed above. Our customers
may impose product specifications or other requirements that are different from, and more onerous than, applicable laws and
regulations. As a result, the failure of our products to meet these additional requirements may result in loss of customers and
decreased sales of our products even in the absence of any actual failure to comply with applicable laws and regulations. There
can be no assurance that future customer requirements concerning the content or manufacturing of our products will not have a
material adverse effect on our business.

We depend on our mining operations for a majority of our supply of sorbent minerals.

Most of our principal raw materials are sorbent minerals mined by us or independent contractors on land that we own or
lease. While our mining operations are conducted in surface mines, which do not present many of the risks associated with deep
underground mining, our mining operations are nevertheless subject to many conditions beyond our control. Our mining operations
are affected by weather and natural disasters, such as heavy rains and flooding, equipment failures and other unexpected maintenance
problems, variations in the amount of rock and soil overlying our reserves, variations in geological conditions, fires and other
accidents, fluctuations in the price or availability of supplies and other matters. Any of these risks could result in significant damage
to our mining properties or processing facilities, personal injury to our employees, environmental damage, delays in mining or

processing, losses or possible legal liability. We cannot predict whether or the extent to which we will suffer the impact of these
and other conditions in the future.

We may not be successful in acquiring adequate additional reserves in the future.

We have an ongoing program of exploration for additional reserves on existing properties as well as through the potential
acquisition of new owned or leased properties; however, there can be no assurance that our attempts to acquire additional reserves
in the future will be successful. Our ability to acquire additional reserves in the future could be limited by competition from other
companies for attractive properties, the lack of suitable properties that can be acquired on terms acceptable to us or restrictions
under our existing or future debt facilities. We may not be able to negotiate new leases or obtain mining contracts for properties
containing additional reserves or renew our leasehold interests in properties on which operations are not commenced during the
term of the lease. Also, requirements for environmental compliance may restrict exploration or use of lands that might otherwise
be utilized as a source of reserves.

The loss of any key member of our senior management team may impede the implementation of our business plans in a timely
manner.

The execution of our business plans depends in part upon the continued service of our senior management team, who
possess unique and extensive industry knowledge and experience. The loss or other unavailability of one or more of the key
members of our senior management team could adversely impact our ability to manage our operations effectively and/or pursue
our business strategy. No company-owned life insurance coverage has been obtained on these team members.

We face risks as a result of our international sales and business operations.

We derived approximately 21% of our net sales from sales outside of the United States in the fiscal year ended July 31,
2014. Our ability to sell our products and conduct our operations outside of the United States is subject to a number of risks. Local
economic, political and labor conditions in each country could adversely affect demand for our products or disrupt our operations
in these markets, particularly when local political and economic conditions are unstable. In addition, international sales and
operations are subject to currency exchange fluctuations, fund transfer and trade restrictions and import/export duties, and
international operations are subject to foreign regulatory requirements and issues, including with respect to environmental matters.
Any of these matters could result in sudden, and potentially prolonged, changes in demand for our products. Also, we may have
difficulty enforcing agreements and collecting accounts receivable through a foreign country’s legal system.

We may incur adverse safety events or product liability claims that may be costly, create adverse publicity and may add further
governmental regulation.

If any of the products that we sell cause, or appear to cause, harm to any of our customers or to consumers, we could be
exposed to product liability lawsuits, heightened regulatory scrutiny, requirements for additional labeling, withdrawal of products
from the market, imposition of fines or criminal penalties or other governmental actions. Any of these actions could result in
material write-offs of inventory, material impairments of intangible assets, goodwill and fixed assets, material restructuring charges
and other adverse impacts on our business operations. We cannot predict with certainty the eventual outcome of any pending or
future litigation, and we could be required to pay substantial judgments or settlements against us or change our product formulations
in response to governmental action. Further, lawsuits can be expensive to defend, whether or not they have merit, and the defense
of these actions may divert the attention of our management and other resources that would otherwise be engaged in managing
our business and our reputation could suffer, any of which could harm our business.

Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business,
operating results and stock price.

Section 404 of the Sarbanes-Oxley Act and related SEC rules require that we perform an annual management assessment
of the design and effectiveness of our internal control over financial reporting and obtain an opinion from our independent registered
public accounting firm on our internal control over financial reporting. Our assessment concluded that our internal control over
financial reporting was effective as of July 31, 2014 and we obtained from our independent registered public accounting firm an
unqualified opinion on our internal control over financial reporting; however, there can be no assurance that we will be able to
maintain the adequacy of our internal control over financial reporting, as such standards are modified, supplemented or amended
from time to time in future periods. Accordingly, we cannot assure that we will be able to conclude on an ongoing basis that we
have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover,
effective internal control is necessary for us to produce reliable financial reports and is important to help prevent financial fraud.

If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors
could lose confidence in our reported financial information, and the trading price of our Common Stock could drop significantly.

Risks Related to Our Common Stock

Our principal stockholders have the ability to control matters requiring a stockholder vote and could delay, deter or prevent a
change in control of our company.

Under our Certificate of Incorporation, the holders of our Common Stock are entitled to one vote per share and the holders
of our Class B Stock are entitled to ten votes per share; the two classes generally vote together without regard to class (except that
any amendment to our Certificate of Incorporation changing the number of authorized shares or adversely affecting the rights of
Common Stock or Class B Stock requires the separate approval of the class so affected as well as the approval of both classes
voting together). As a result, the holders of our Class B Stock exert control over us and thus limit the ability of other stockholders
to influence corporate matters. Beneficial ownership of Common Stock and Class B Stock by Jaffee Investment Partnership, L.P.
and its affiliates (including Richard M. Jaffee, our Chairman, and Daniel S. Jaffee, his son and our President and Chief Executive
Officer) provides them with the ability to control the election of our Board of Directors and the outcome of most matters requiring
the approval of our stockholders, including the amendment of certain provisions of our Certificate of Incorporation and By-Laws,
the approval of any equity-based employee compensation plans and the approval of fundamental corporate transactions, including
mergers and substantial asset sales. Through their concentration of voting power, our principal stockholders may be able to delay,
deter or prevent a change in control of our company or other business combinations that might otherwise be beneficial to our other
stockholders.

We are a “controlled company” within the meaning of the New York Stock Exchange (“NYSE”) rules and, as a result, qualify
for, and intend to rely on, exemptions from certain corporate governance requirements.

We are a “controlled company” under the New York Stock Exchange Corporate Governance Standards. As a controlled
company, we may rely on exemptions from certain NYSE corporate governance requirements that otherwise would be applicable,
including the requirements:

• that a majority of the board of directors consists of independent directors;
• that we have a nominating and governance committee comprised entirely of independent directors with a written charter

addressing the committee’s purpose and responsibilities;

• that we have a compensation committee comprised entirely of independent directors with a written charter addressing the

committee’s purpose and responsibilities;

• that we include in our proxy statements certain information regarding compensation consultants and related conflicts of

interest; and

• that we conduct an annual performance evaluation of the nominating and corporate governance and compensation

committees.

We have previously relied on these exemptions, and we intend to continue to rely on them in the future. As a result, you may not
have the same benefits and information available to stockholders of NYSE-listed companies that are subject to all of the NYSE
corporate governance requirements.

The market price for our Common Stock may be volatile.

In recent periods, there has been volatility in the market price for our Common Stock. Furthermore, the market price of

our Common Stock could fluctuate substantially in the future in response to a number of factors, including the following:

• fluctuations in our quarterly operating results or the operating results of our competitors;
• changes in general conditions in the economy, the financial markets, or the industries in which we operate;
• announcements of significant acquisitions, strategic alliances or joint ventures by us, our customers or our competitors;
• introduction of new products or services;
• increases in the price of energy sources and other raw materials; and
• other developments affecting us, our industries, customers or competitors.

In addition, in recent years the stock market has experienced extreme price and volume fluctuations. This volatility has had a
significant effect on the market prices of securities issued by many companies for reasons unrelated to their operating performance.
These broad market fluctuations may materially adversely affect our Common Stock price, regardless of our operating results.
Given its relatively small public float, number of shareholders and average daily trading volume, our Common Stock may be
16

relatively more susceptible to volatility arising from any of these factors. There can be no assurance that the price of our Common
Stock will increase in the future or be maintained at its recent levels.

Future sales of our Common Stock could depress its market price.

Future sales of shares of our Common Stock could adversely affect its prevailing market price. If our officers, directors
or significant stockholders sell a large number of shares, or if we issue a large number of shares, the market price of our Common
Stock could significantly decline. Moreover, the perception in the public market that stockholders might sell shares of Common
Stock could depress the market for our Common Stock. Our Common Stock’s relatively small public float and average daily
trading volume may make it relatively more susceptible to these risks.

ITEM 1B – UNRESOLVED STAFF COMMENTS

None.

ITEM 2 – PROPERTIES

Real Property Holdings and Mineral Reserves

Land
Owned

Land
Leased

Land
Unpatented
Claims

(acres)

California ..............
Georgia .................
Illinois ...................
Mississippi ............
Nevada ..................
Oregon ..................
Tennessee..............

795

3,707

2,156

535

340

178

—

1,840

598

999

—

1,030

—

Total

1,825

5,547

680

3,155

535

340

178

Estimated
Proven
Reserves

Estimated
Probable
Reserves
(thousands of tons)

Total

15,593

60,314

3,468

11,226

24,891

—

93,253

172,257

2,976

26,292

3,000

6,000

4,367

35,423

3,468

79,004

23,316

—

3,000

7,793

3,437

1,030

12,260

148,578

135,371

283,949

The Mississippi, Georgia, Tennessee, Nevada, California and Illinois properties are primarily mineral in nature, except
our research and development facility which is included in the Illinois owned land. We mine sorbent minerals primarily consisting
of montmorillonite and attapulgite and, to a lesser extent, other clay-like sorbent materials, such as Antelope shale. We employ
geologists and mineral specialists who prepared the estimated reserves of these minerals in the table above. See also Item 1
“Business” above for further information about our reserves. The locations in the table above collectively produced approximately
857,000 tons of finished product in fiscal 2014, 794,000 tons in fiscal 2013 and 824,000 tons in fiscal 2012. Parcels of such land
are also sites of manufacturing facilities operated by us. We own approximately one acre of land in Laval, Quebec, Canada, which
is the site of the processing and packaging facility for our Canadian subsidiary.

MINING PROPERTIES

Our mining operations are conducted on land that we own or lease. The Georgia, Illinois and Mississippi mining leases
generally require that we pay a minimum monthly rent to continue the lease term. The rental payments are generally applied against
a stated royalty related to the number of unprocessed, or in some cases processed, tons of minerals extracted from the leased
property. Many of our mining leases have no stated expiration dates. Some of our leases, however, do have expiration dates ranging
from 2023 to 2097. We would not experience a material adverse effect from the expiration or termination of any of these leases.
We have a variety of access arrangements, some of which are styled as leases, for manufacturing at facilities that are not contiguous
with the related mines. We would not experience a material adverse effect from the expiration or termination of any of these
arrangements. See also Item 1 “Business” above for further information on our reserves.

Certain of our land holdings in California are represented by unpatented mining claims we lease from the Bureau of Land
Management. These leases generally give us the contractual right to conduct mining or processing activities on the land covered
by the claims. The validity of title to unpatented claims, however, is dependent upon numerous factual matters. We believe the
unpatented claims we lease are in compliance with all applicable federal, state and local mining laws, rules and regulations. Future
amendments to existing federal mining laws, however, could have a prospective effect on mining operations on federal lands and
include, among other changes, the imposition of royalty fees on the mining of unpatented claims, the elimination or restructuring
of the patent system and an increase in fees for the maintenance of unpatented claims. To the extent that future proposals may
result in the imposition of royalty fees on unpatented lands, the mining of our unpatented claims may become economically
unfavorable. We cannot predict the form that any such amendments might take or whether or when such amendments might be
adopted. In addition, the construction and operation of processing facilities on these sites would require the approval of federal,
state and local regulatory authorities. See Item 1A “Risk Factors” above for a discussion of other risks to our business related to
our mining properties.

MINING AND MANUFACTURING METHODS

Mining and Hauling

We mine clay in open-pit mines in Georgia, Mississippi, Illinois and California. The mining and hauling operations are
similar throughout the Oil-Dri locations, with the exception of California. The land to be mined is first stripped. The stripping
process involves removing the overburden and preparing the site to allow the excavators to reach the desired clay. When stripping
is completed, the excavators dig out and load the clay onto dump trucks. The trucks haul the clay directly to our processing plants
where it is dumped in a clay yard and segregated by clay type if necessary. Generally, the mine sites are in close proximity to the
processing plants; however, the maximum distance the clay is currently hauled to a plant is approximately 13 miles.

At our California mines the clay is excavated and hauled to a hopper. An initial crushing and screening operation is

performed at the mine site before the trucks are loaded for delivery to the processing plant.

Processing

The processing of our clay varies depending on the level of moisture desired in the clay after the drying process. The

moisture level is referred to as regular volatile moisture (“RVM”) or low volatile moisture (“LVM”).

RVM Clay: A front end loader is used to load the clay from the clay yard into the primary crusher. The primary crusher
reduces the clay chunks to 2.0 inches in diameter or smaller. From the crusher, the clay is transported via a belt conveyor into the
clay shed. A clay shed loader feeds the clay into a disintegrator which reduces the clay to particles 0.5 inches in diameter or smaller.
The clay then feeds directly into the RVM kiln. The RVM kiln reduces the clay’s moisture content. From the RVM kiln, the clay
moves through a series of mills and screens which further size and separate the clay into the desired particle sizes. The sized clay
is then conveyed into storage tanks. The RVM processed clay can then be packaged or processed into LVM material.

LVM Clay: RVM clay is fed from storage tanks into the LVM kiln where the moisture content is further reduced. The

clay then proceeds into a rotary cooler, then on to a screening circuit which separates the clay into the desired particle sizes.

In addition, certain other products may go through further processing or the application of fragrances and additives. For
example, certain fluid purification and animal health products are processed into a powder form. We also use a proprietary process
for our engineered granules to create spherical, uniform-sized granules.

Packaging

Once the clay has been dried to the desired level it will be sized and packaged. Our products have package sizes ranging
from bags, boxes and jugs of cat litter to railcars of agricultural products. We also package some of our products into bulk
(approximately one ton) bags or into bulk trucks. The size and delivery configuration of our finished products is determined by
customer requirements.

FACILITIES

We operate clay manufacturing and non-clay production facilities on property owned or leased by us as shown on the

map below:

Oil-Dri Corporation of America Plant Site Locations

Location

Alpharetta, Georgia
Bentonville, Arkansas
Blue Mountain, Mississippi
Chicago, Illinois
Coppet, Switzerland
Laval, Quebec, Canada
Mounds, Illinois
Ochlocknee, Georgia
Ripley, Mississippi
Shenzhen, China
Taft, California
Vernon Hills, Illinois
Wisbech, United Kingdom

Owned/Leased
Leased
Leased
Owned
Leased
Leased
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Leased

Function

Non-clay manufacturing and packaging, sales, customer service
Sales office
Manufacturing and packaging
Principal executive office
Customer service office
Non-clay manufacturing and clay and non-clay packaging, sales
Manufacturing and packaging
Manufacturing and packaging
Manufacturing and packaging
Sales office, customer service
Manufacturing and packaging
Research and development
Non-clay production and clay and non-clay packaging, sales, customer service

We have no mortgages on the real property we own. The lease for the Shenzhen, China office expires in 2015 and the
Bentonville, Arkansas office lease expires in 2016. The leases for the Alpharetta, Georgia facility and the Chicago, Illinois corporate
office space expire in 2018. The Wisbech, United Kingdom facility lease expires in 2032. The lease for the Coppet, Switzerland
office is on a year-to-year basis. We consider that our properties are generally in good condition, well maintained and suitable and
adequate to carry on our business.

ITEM 3 – LEGAL PROCEEDINGS

We are party to various legal actions from time to time that are ordinary in nature and incidental to the operation of our
business. While it is not possible at this time to determine with certainty the ultimate outcome of these lawsuits, we believe that
none of the pending proceedings will have a material adverse effect on our business or financial condition.

ITEM 4 – MINE SAFETY DISCLOSURE

Our mining operations are subject to regulation by the Mine Safety and Health Administration under authority of the
Federal Mine Safety and Health Act of 1977, as amended. Information concerning mine safety violations or other regulatory
matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation
S-K is included in Exhibit 95 to this Annual Report on Form 10-K.

PART II

ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

Our Common Stock is traded on the NYSE under the symbol ODC. There is no established trading market for our Class
B Stock. There are no shares of Class A Common Stock currently outstanding. See Note 8 of the Notes to the Consolidated Financial
Statements for a description of our Common Stock, Class B Stock and Class A Common Stock. The number of holders of record
of Common Stock and Class B Stock on September 30, 2014 were 642 and 29, respectively, as reported by our transfer agent. In
the last three years, we have not sold any securities which were not registered under the Securities Act of 1933.

The following table sets forth, for the periods indicated, the high and low sales price for our Common Stock listed on the

NYSE and dividends per share declared on our Common Stock and Class B Stock.

Common Stock
Price Range

Cash Dividends
Per Share

Low

High

Common
Stock

Class B
Stock

Fiscal 2014:

First Quarter.......................
$ 30.35
Second Quarter .................. $ 32.90
Third Quarter ..................... $ 31.24
Fourth Quarter ................... $ 28.71

$ 36.80

$ 0.1900

$ 0.1425

$ 41.74

$ 36.27

$ 34.90

0.1900

0.2000

0.1425

0.1500

Total............................

$ 0.7700

$ 0.5775

Fiscal 2013:

First Quarter....................... $ 21.26
Second Quarter .................. $ 20.82
Third Quarter ..................... $ 23.92
Fourth Quarter ................... $ 25.30

$ 23.77

$ 0.1800

$ 0.1350

$ 30.34

$ 28.52

$ 32.40

0.3600

—

0.1900

0.2700

—

0.1425

Total............................

$ 0.7300

$ 0.5475

Dividends. Our Board of Directors determines the timing and amount of any dividends. Our Board of Directors may
change its dividend practice at any time. The declaration and payment of future dividends, if any, will depend upon, among other
things, our future earnings, capital requirements, financial condition, legal requirements, contractual restrictions and other factors
that our Board of Directors deems relevant. Our Credit Agreement with Harris N.A. and our 2005 Note Agreement with The
Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company require that certain
minimum net worth and tangible net worth levels are to be maintained. To the extent that these balances are not attained, our ability
to pay dividends may be impaired. See Note 5 of the Notes to the Consolidated Financial Statements for further information about
our note agreements.

Issuer Repurchase of Equity Securities. Our Board of Directors authorized the repurchase of 250,000 shares of Common
Stock on March 11, 2011 and authorized the repurchase of an additional 250,000 shares on June 14, 2012. These authorizations
do not have a stated expiration date. As of July 31, 2014, a total of 309,613 shares of Common Stock may yet be repurchased
under these authorizations. We do not have any current authorization from our Board of Directors to repurchase shares of Class
B Stock.

The following chart summarizes our Common Stock purchases during the three months ended July 31, 2014.

ISSUER PURCHASES OF EQUITY SECURITIES 1
(b)
(a)

Total Number of
Shares Purchased

Average Price Paid
per Share

742

—

$33.21

$—

—

(d)
Maximum Number
of Shares that may
yet be Purchased
Under Plans or
Programs2

309,613

For the Three
Months Ended
July 31, 2014

May, 1 2014 to
May 31, 2014

June 1, 2014 to
June 30, 2014

July 1, 2014 to
July 31, 2014

1 The table summarizes repurchases of (and remaining authority to repurchase) shares of our Common Stock. We did not repurchase
any shares of our Class B Stock during the period covered by the table, and no shares of our Class A Common Stock are currently
outstanding. Descriptions of our Common Stock, Class B Stock and Class A Common Stock are contained in Note 8 of the Notes
to the Consolidated Financial Statements.

2 The share numbers in this column indicate the number of shares of Common Stock that may yet be repurchased under our Board
of Director authorizations described above.

Equity Compensation Plan Information. The following table presents information about compensation plans under
which our equity securities are authorized for issuance. See Note 9 of the Notes to the Consolidated Financial Statements for
further information about these stock-based compensation plans.

Equity Compensation Plan Information As Of
July 31, 2014

Plan category

Equity compensation plans approved by stockholders ......

Number of
securities to be
issued upon
exercise of
outstanding options
(in thousands)

(a)

Weighted-average
exercise price of
outstanding options

(b)

$15.43

Number of securities
remaining available
for further issuance
under equity
compensation plans
(excluding securities
reflected in column
(a)) (in thousands)

(c)

552

PERFORMANCE GRAPH

The following graph shows the annual cumulative total stockholders’ return for the five years ending July 31, 2014 on
an assumed investment of $100 on July 31, 2009 in our Common Stock, the Russell Microcap Index and the Russell 2000-Material
and Processing Economic Sector Index. Our Common Stock is included in the Russell Microcap Index and we consider the Russell
2000-Material and Processing Economic Sector Index to be our peer group. The graph assumes all dividends were reinvested. The
historical stock price performance of our Common Stock is not necessarily indicative of future stock performance.

Oil-Dri Corporation of America, Russell Microcap Index , Russell 2000-Materials & Processing Index

(Performance results through July 31, 2014)

Comparative Five-Year Total Returns

Oil-Dri Corporation
Russell Microcap

Russell 2000-Materials & Processing

2009
100.00 $
100.00 $

2010
143.96 $
115.92 $

2011
140.45 $
141.32 $

2012
154.05 $
142.53 $

2013
230.86 $
195.43 $

2014
216.17
211.58

100.00 $

123.22 $

160.32 $

150.49 $

204.26 $

225.39

$
$

This performance graph and accompanying disclosure is not soliciting material, is not deemed filed with the SEC, and
is not incorporated by reference in any of our filings under the Securities Act or the Exchange Act, whether made on, before or
after the date of this filing and irrespective of any general incorporation language in such filing.

ITEM 6 – SELECTED FINANCIAL DATA

FIVE YEAR SUMMARY OF FINANCIAL DATA

(In thousands, except for per share amounts and ratios)

2014

Fiscal Year Ended July 31,
2012

2011

2013

2010

(1,569)

(47,232)

(206,663)

—

430

12,418

59,650

$ 266,313

Summary of Operations
Net Sales.....................................................................
Cost of Sales...............................................................
Gross Profit ................................................................
Selling, General and Administrative Expenses ..........
Capacity Rationalization Charges (1).........................
Income from Operations.............................................
Other Income (Expense).............................................
Interest Income ....................................................
Interest Expense ..................................................
Foreign Exchange Gains (Losses).......................
Other, Net ............................................................
Total Other Expense, Net .............................
Income before Income Taxes .....................................
Income Taxes..............................................................
Net Income ................................................................. $
Average Shares Outstanding
Diluted.................................................................
Net Income per Share
$
Basic Common ....................................................
Basic Class B Common....................................... $
Diluted................................................................. $
Important Highlights
Total Assets.......................................................... $ 186,204
$ 18,900
Long-Term Debt..................................................
Working Capital................................................... $ 54,016
2.8
Working Capital Ratio.........................................
14.94
Book Value per Share.......................................... $
Dividends Declared ............................................. $
5,040
Dividends Declared per Common Share ............. $ 0.7700

11,337

7,004

1.27

1.17

0.96

(1,081)

(2,981)
8,356

$ 0.5775
Dividends Declared per Class B Common Share
Capital Expenditures ........................................... $ 18,566
Depreciation and Amortization ........................... $ 10,396
Net Income as a Percent of Net Sales .................
Return on Average Stockholders' Equity.............
Gross Profit as a Percent of Net Sales.................
Operating Expenses as a Percent of Net Sales ....

3.1%
8.1%
22.4%

17.7%

$ 250,583
(184,084)
66,499
(47,558)
(70)
18,871

$ 240,681
(181,676)
59,005
(47,303)
(1,623)
10,079

$ 226,755
(176,715)
50,040
(36,331)
—

$ 219,050
(169,362)
49,688
(36,139)
—

13,709

13,549

34
(1,773)
(56)
423
(1,372)
17,499
(2,913)
14,586

6,927

2.25

1.69

2.07

31
(2,060)
(196)
507
(1,718)
8,361
(2,263)
6,098

7,062

0.92

0.70

0.85

61
(2,053)
(22)
446
(1,568)
12,141
(3,090)
9,051

7,103

1.36

1.06

1.26

126
(1,345)
(213)
697
(735)
12,814
(3,356)
9,458

7,275

1.42

1.07

1.30

$ 183,559

$ 174,267

$ 173,393

$ 153,982

$
$
$

22,400

71,925

3.3

14.96
4,712
0.7300

0.5475
9,795
8,946

$
$
$

25,900

66,080

3.3

12.19
4,511
0.6900

0.5175
6,960
9,272

$
$
$

29,700

65,336

3.5

13.63
4,305
0.6500

0.4875
13,806
8,473

$
$
$

14,800

48,398

2.7

12.77
4,041
0.6100

0.4575
10,413
7,371

5.8%
15.5%
26.5%

19.0%

2.5%
6.8%
24.5%

20.3%

4.0%
9.7%
22.1%

16.0%

4.3%
10.5%
22.7%

16.5%

(1) In fiscal years 2012 and 2013, one-time charges were incurred for the relocation of production of our industrial floor absorbent
and cat litter products from our facility located in Mounds, Illinois to our plants located in Mississippi. See Note 2 of the Notes
to the Consolidated Financial Statements for further information about the production relocation charge.

ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with
the Consolidated Financial Statements and the related notes included elsewhere herein. This discussion contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-
looking statements. Factors that might cause a difference include those discussed under “Forward-Looking Statements” and in
Item 1A “Risk Factors” in this Annual Report on Form 10-K.

OVERVIEW

We develop, mine, manufacture and market sorbent products principally produced from clay minerals, primarily consisting
of montmorillonite and attapulgite and, to a lesser extent, other clay-like sorbent materials, such as Antelope shale. Our principal
products include agricultural and horticultural chemical carriers, animal health and nutrition products, cat litter, fluids purification
and filtration bleaching clays, industrial and automotive floor absorbents and sports field products. Our products are sold to two
primary customer groups, including customers who resell our products as originally produced to the end consumer and those who
use our products as part of their production process or use them as an ingredient in their final finished product. We have two
reportable operating segments based on the different characteristics of our two primary customer groups: Retail and Wholesale
Products Group and Business to Business Products Group. Each operating segment is discussed individually below. Additional
detailed descriptions of the operating segments are included in Item 1 “Business” above.

Consolidated net income was $8,356,000, or $1.17 per diluted share, for the year ended July 31, 2014, a 43% decrease
from net income of $14,586,000, or $2.07 per diluted share, for the year ended July 31, 2013. During fiscal 2014 we made substantial
business investments in both of our operating segments, including the acquisition of certain assets of MFM, which expanded our
private label cat litter business, and the opening of our subsidiary in Shenzhen, China, which extended the presence of our animal
health and nutrition products in China through a direct sales force. In addition, we increased spending for trade promotions and
advertising of our cat litter products and invested significantly in capital at our plant facilities for equipment and capacity expansion.
We also experienced cost increases to mine, manufacture and transport our products during fiscal 2014. Rising costs for natural
gas, freight and packaging, as well as increased mining costs to extract clay deeper in the ground all impacted our annual results.

We believe our balance sheet remains strong at the end of fiscal 2014, even though cash, cash equivalents and short-term
investments declined. Major uses of cash included capital expenditures, the MFM acquisition, advertising, dividend payments and
debt repayments. We believe cash requirements for capital expenditures in fiscal 2015 will be comparable to fiscal 2014 due to
projects at our manufacturing facilities. Advertising and promotions spending is also anticipated to be a significant use of cash in
fiscal 2015, but we believe at levels slightly less than in fiscal 2014. Our cash requirements are subject to change as business
conditions warrant and opportunities arise.

RESULTS OF OPERATIONS
FISCAL 2014 COMPARED TO FISCAL 2013

CONSOLIDATED RESULTS

Consolidated net sales for the year ended July 31, 2014 were $266,313,000, a 6% increase from net sales of $250,583,000
in fiscal 2013. Net sales in our Retail and Wholesale Products Group increased due to more tons sold, including additional sales
after the acquisition of MFM, and net sales in our Business to Business Products Group increased due to higher net selling prices
and a favorable product sales mix (defined as a greater proportion of sales from higher priced products).

Consolidated gross profit as a percentage of net sales in fiscal 2014 decreased to 22% from 27% in fiscal 2013. Gross
profit declined due primarily to the increased costs of packaging and freight, as described by operating segment below, and due
to higher material costs per ton, which included a 21% increase in the cost of natural gas used to operate kilns that dry our clay
during processing. Material costs also included a 4% increase in non-fuel manufacturing cost per ton, which was attributed to
higher purchased material costs, including purchased additives, fragrances and other materials required for the production of
scoopable cat litters, as well as higher costs for labor and increased mining and hauling activity. We continue to pursue operational
efficiencies as we integrate the additional volume gained through the acquisition of MFM. Our mining and hauling operations
have been impacted by the increased volume and by extraction of clay reserves that require more overburden removal. In addition,
gross profit was impacted by increased sales of private label cat litter, which generally has a lower gross profit margin than branded
cat litter.

Selling, general and administrative expenses as a percentage of net sales were 18% in fiscal 2014, compared to 19% in
fiscal 2013. The discussions of each segment's operating income below describe the changes in selling, general and administrative
expenses that were allocated to the operating segments. The remaining unallocated corporate expenses in fiscal 2014 included a
lower estimated annual discretionary incentive plan bonus accrual and lower pension expense, which were partially offset by an
increase in expense for the supplemental employee retirement plan (“SERP”). The incentive bonus expense was based on
performance targets that are established for each fiscal year and discretionary authority by our Chief Executive Officer. See Notes
10 and 11 of the Notes to the Consolidated Financial Statements for additional information about the pension plan and the SERP,
respectively.

Our effective tax rate was 26.3% of pre-tax income in fiscal 2014 compared to 16.6% in fiscal 2013. Our tax rate in fiscal
2014 was consistent with the three years preceding fiscal 2013. During fiscal 2013 we utilized domestic AMT credits, which
resulted in a lower federal income tax rate; however, in fiscal 2014 we incurred additional AMT expense. See Note 7 of the Notes
to the Consolidated Financial Statements for additional information about our income taxes.

Consolidated net income for fiscal 2014 was $8,356,000, a 43% decrease from net income of $14,586,000 in fiscal 2013.
The decrease in net income was attributed primarily to increased costs for materials, packaging, freight and advertising, which
more than offset the impact of increased sales and lower overall non-advertising selling, general and administrative costs. Segment
operating income was lower for both our Business to Business and Retail and Wholesale Products Groups as discussed below.

BUSINESS TO BUSINESS PRODUCTS GROUP

Net sales of the Business to Business Products Group for fiscal 2014 were $94,286,000, an increase of $1,317,000, or
1%, from net sales of $92,969,000 in fiscal 2013. Net sales of both fluid purification and animal health products increased, while
net sales of co-packaged cat litter and agricultural and horticultural products decreased. Net sales of fluid purification products
were approximately 7% greater than in fiscal 2013 with a 4% increase in tons sold. Sales increased primarily to edible oil processors
in both foreign and domestic markets driven by continued global growth in the demand for edible oil. Net sales of animal health
and nutrition products increased slightly in both domestic and foreign markets due primarily to a favorable product sales mix,
which offset the impact of 13% fewer tons sold. A sales decline of approximately 9% for our agricultural and horticultural products
resulted primarily from 10% fewer tons sold. Sales decreased for our agricultural chemical carrier products used by producers of
corn rootworm pesticides and other crop protection chemicals. Partially offsetting this decline was improved sales for our engineered
granule product used in the professional pesticides and agricultural markets. A small decrease in sales of our co-packaged traditional
coarse cat litter net sales was attributed primarily to 2% fewer tons sold.

The Business to Business Products Group’s operating income was $26,654,000 in fiscal 2014, a decrease of $4,085,000,
or 13%, from operating income of $30,739,000 in fiscal 2013. A combined 8% increase in materials, packaging and freight costs
per ton more than offset the higher sales described above. Material costs rose due primarily to a higher price paid for natural gas
used to operate kilns that dry our clay and increases in other non-fuel manufacturing costs. See further discussion of manufacturing
costs in “Consolidated Results” above. Packaging costs rose as the result of supplier price increases and the mix of products sold.
Freight costs increases were driven primarily by more shipments to foreign countries and cost increases in the freight industry
attributed to recent trends and regulations.

The Business to Business Products Group’s selling, general and administrative expenses in fiscal 2014 increased
approximately 18% compared to fiscal 2013 due primarily to additional personnel and other costs incurred to expand sales of our
animal health and nutrition products in foreign markets.

RETAIL AND WHOLESALE PRODUCTS GROUP

Net sales of the Retail and Wholesale Products Group for fiscal 2014 were $172,027,000, an increase of $14,413,000,
or 9%, from net sales of $157,614,000 in fiscal 2013. Net sales increased significantly for cat litter products and increased slightly
for both industrial absorbent and sports products; however, net sales decreased for our foreign subsidiaries. Our foreign subsidiaries'
net sales are described under “Foreign Operations” below. Overall cat litter net sales increased approximately 13%. The benefits
of higher sales volume was partially offset by higher trade spending (trade spending is deducted from net sales and includes
coupons, slotting and cooperative marketing programs). Our branded cat litter net sales increased approximately 10% due primarily
to more tons sold and higher selling prices that outweighed increased trade spending. Net sales of our Cat's Pride Fresh & Light
scoopable products increased approximately 33% and sales also improved for our other Cat's Pride scoopable cat litters. These
increases were partially offset by lower sales for our branded coarse litter products. Private label cat litter net sales increased
approximately 24% due in part to additional sales from the acquisition of MFM. (See Note 3 of the Notes to the Consolidated
Financial Statements for more information about the MFM acquisition.)

The Retail and Wholesale Products Group’s segment operating income for fiscal 2014 was $3,568,000, a decrease of
$6,993,000, or 66%, from operating income of $10,561,000 in fiscal 2013. A combined cost increase of approximately 4% per
ton for packaging, freight and materials and higher selling, general and administrative expenses, as discussed below, more than
offset the benefits of higher sales described above. Packaging costs were up due to the mix of products produced and commodity
price increases, including resin used in cat litter jugs and pails. The increase in freight costs were driven primarily by our service
level enhancement efforts and cost increases in the freight industry attributed to recent trends and regulations. Material costs rose
due primarily to a higher price paid for natural gas used to operate kilns that dry our clay and increases in other non-fuel
manufacturing costs. See further discussion of manufacturing costs in “Consolidated Results” above.

Selling, general and administrative expenses for the Retail and Wholesale Products Group increased approximately 15%
compared to fiscal 2013 due primarily to increased advertising expense, amortization of intangible assets acquired in the MFM
acquisition and higher sales commissions.

FOREIGN SUBSIDIARIES

Net sales by our foreign subsidiaries during fiscal 2014 were $11,246,000, a decrease of $682,000, or 6%, from net sales
of $11,928,000 during fiscal 2013. Net sales by our foreign subsidiaries represented 4% of our consolidated net sales during fiscal
year 2014. Net sales declined for our Canadian subsidiary, but increased for our United Kingdom subsidiary. In addition, our new
China subsidiary reported initial sales in the fourth quarter of fiscal 2014. Our Canadian subsidiary continued to face strong
competition for branded cat litter sales. Sales of fluids purification products provided higher sales for our United Kingdom
subsidiary.

For fiscal 2014, our foreign subsidiaries reported a net loss of $708,000, compared to a net loss of $176,000 in fiscal
2013. The increase in the net loss was primarily the result of lower sales and expenditures to commence operations for the China
subsidiary.

Identifiable assets of our foreign subsidiaries as of July 31, 2014 were $8,143,000 compared to $8,298,000 as of July 31,
2013. The decrease was primarily due to lower lower accounts receivable and net fixed assets, which were partially offset by
higher deferred income taxes.

RESULTS OF OPERATIONS
FISCAL 2013 COMPARED TO FISCAL 2012

CONSOLIDATED RESULTS

Consolidated net sales for the year ended July 31, 2013 were $250,583,000, a 4% increase from net sales of $240,681,000
in fiscal 2012. Net sales improved due primarily to: increased sales in our Business to Business Products Group; lower trade
spending in our Retail and Wholesale Products Group; higher selling prices; and a favorable product sales mix. Our Business to
Business Products Group also benefited from more tons sold.

Consolidated gross profit as a percentage of net sales in fiscal 2013 increased to 27% from 25% in fiscal 2012. Gross
profit improved due to the higher sales described above, a greater proportion of sales from higher margin products and lower costs
for packaging. Partially offsetting these positive impacts were higher freight and material costs per ton, as described by operating
segment below. Material costs were also effected by a 4% increase in the fuel cost per ton produced, primarily for natural gas used
to operate kilns that dry our clay.

Selling, general and administrative expenses as a percentage of net sales were 19% in fiscal 2013, compared to 20% in
fiscal 2012. The discussions of each segment's operating income below describe the changes in selling, general and administrative
expenses that were allocated to the operating segments, including approximately $3,000,000 lower advertising costs in the Retail
and Wholesale Products Group. The remaining unallocated corporate expenses in fiscal 2013 included a higher estimated annual
incentive plan bonus accrual. The incentive bonus expense was based on performance targets that are established for each fiscal
year. Expenses also increased for the pension plan and for research and development, but decreased for the SERP. See Notes 10
and 11 of the Notes to the Consolidated Financial Statements for additional information about the pension plan and the SERP,
respectively.

Our effective tax rate was 16.6% of pre-tax income in fiscal 2013 compared to 27.1% in fiscal 2012. During fiscal 2013,
we utilized approximately $1,369,000 of our domestic AMT attributes. We correspondingly reduced the domestic AMT valuation
allowance that had been established in prior years, which resulted in a lower federal income tax rate. See Note 7 of the Notes to
the Consolidated Financial Statements for additional information about our income taxes.

Consolidated net income for fiscal 2013 was $14,586,000, a 139% increase from net income of $6,098,000 in fiscal 2012.
Net income was positively impacted by a lower effective tax rate, higher net sales and lower advertising and promotion costs.
These positive factors more than offset increased costs for our incentive bonus, freight and materials. Segment operating income
was higher for both our Business to Business and Retail and Wholesale Products Groups as discussed below.

BUSINESS TO BUSINESS PRODUCTS GROUP

Net sales of the Business to Business Products Group for fiscal 2013 were $92,969,000, an increase of $7,513,000, or
9%, from net sales of $85,456,000 in fiscal 2012. Net sales of fluid purification products, animal health products and co-packaged
cat litter all increased, while net sales of agricultural and horticultural products decreased. Net sales of fluid purification products
were approximately 13% greater than in fiscal 2012 with an 11% increase in tons sold. Sales to edible oil, biodiesel and petroleum
oil processors improved in both foreign and domestic markets. Sales to new customers and higher sales to existing customers were
driven by global growth in edible oil production. Net sales of animal health and nutrition products increased approximately 31%
due primarily to a favorable product sales mix and 14% more tons sold. Sales of our enterosorbent animal health products increased
in both foreign and domestic markets, including both new customers and increased sales to existing customers. Our co-packaged
traditional coarse cat litter net sales increase of approximately 4% was attributed primarily to 2% more tons sold and higher selling
prices. A sales decline of approximately 7% for our agricultural and horticultural products was caused primarily by 12% fewer
tons sold. Sales decreased for products used in horticultural applications and for our engineered granule product used in the
professional pesticides and agricultural markets.

The Business to Business Products Group’s operating income was $30,739,000 in fiscal 2013, an increase of $2,096,000,
or 7%, from operating income of $28,643,000 in fiscal 2012. The benefit from improved sales described above was partially offset
by higher freight and material costs per ton. Freight cost increases of approximately 7% per ton were driven primarily by more
shipments to foreign countries, higher diesel fuel prices and other cost increases in the freight industry due to recent trends and
regulations. Material costs increased approximately 9% per ton. Certain products in the Business to Business Group received
greater fixed manufacturing cost allocations subsequent to the production relocation for certain products between our plants, as
discussed in Note 2 of the Notes to the Consolidated Financial Statements. See further discussion of manufacturing costs in
“Consolidated Results” above.

The Business to Business Products Group’s selling, general and administrative expenses in fiscal 2013 increased
approximately 5% compared to fiscal 2012 due primarily to costs incurred to expand sales of our animal health and nutrition
products in foreign markets.

RETAIL AND WHOLESALE PRODUCTS GROUP

Net sales of the Retail and Wholesale Products Group for fiscal 2013 were $157,614,000, an increase of $2,389,000, or
2%, from net sales of $155,225,000 in fiscal 2012. Net sales increased for cat litter products and for our foreign subsidiaries, but
decreased for industrial absorbent products. Our foreign subsidiaries' net sales are described under “Foreign Operations” below.
Overall cat litter net sales increased approximately 2% as the result of lower trade spending and higher selling prices, which
outweighed a 6% decline in tons sold. Our branded cat litter net sales increase of approximately 5% was attributed primarily to
approximately 59% higher sales of our Cat's Pride Fresh & Light scoopable products and reduced trade spending. These increases
were partially offset by lower sales for our other Cat's Pride scoopable and coarse litter products. Private label cat litter sales were
down approximately 3% due primarily to the continued decline in the coarse cat litter market, as well as a market trend away from
private label cat litter products. Industrial absorbents net sales were down approximately 3% with a 7% decline in tons sold.

The Retail and Wholesale Products Group’s segment operating income for fiscal 2013 was $10,561,000, an increase of
$8,463,000, from operating income of $2,098,000 in fiscal 2012. The Group's operating income was positively impacted by the
higher sales described above, by lower selling, general and administrative expenses, as discussed below, and by an approximate
1% decrease in packaging costs per ton. The Group's operating income was negatively impacted by approximately12% higher
freight costs per ton due to more shipments to customers in regions with higher freight costs, higher diesel fuel prices and other
cost increases in the freight industry due to recent trends and regulations. In addition, material costs per ton increased approximately
5% primarily as the result of more purchased additives, fragrances and other materials required for the production of scoopable
cat litters. See further discussion of manufacturing costs in “Consolidated Results” above.

Selling, general and administrative expenses for the Retail and Wholesale Products Group decreased approximately 15%
compared to fiscal 2012. We incurred substantial spending to advertise and promote our new Cat's Pride Fresh and Light cat litter
products in fiscal 2012.

FOREIGN SUBSIDIARIES

Net sales by our foreign subsidiaries during fiscal 2013 were $11,928,000, an increase of $629,000, or 6%, from net sales
of $11,299,000 during fiscal 2012. Net sales by our foreign subsidiaries represented 5% of our consolidated net sales during fiscal
year 2013. Net sales increased 16% for our United Kingdom subsidiary and 3% for our Canadian subsidiary. Bleaching earth sales
by our United Kingdom subsidiary increased primarily due to a new customer. Branded cat litter sales by our Canadian subsidiary
increased, while industrial product sales were relatively flat.

For fiscal 2013, our foreign subsidiaries reported a net loss of $176,000, compared to a net loss of $876,000 in fiscal
2012. The decrease in the net loss was primarily the result of higher sales and a reduction in overhead costs at our Canadian
subsidiary.

Identifiable assets of our foreign subsidiaries as of July 31, 2013 were $8,298,000 compared to $8,702,000 as of July 31,
2012. The decrease was primarily due to lower cash, inventories and net fixed assets, which were partially offset by higher accounts
receivable.

LIQUIDITY AND CAPITAL RESOURCES

Our principal capital requirements include funding working capital needs, purchasing and upgrading equipment, facilities
and real estate, investing in infrastructure and acquisitions. We have principally used cash generated from operations and, to the
extent needed, issuance of debt securities and borrowings under our credit facilities to fund these requirements. Cash and cash
equivalents totaled $16,230,000, $24,035,000 and $27,093,000 at July 31, 2014, 2013 and 2012, respectively.

The following table sets forth certain elements of our Consolidated Statements of Cash Flows (in thousands):

Fiscal Year Ended

July 31,
2014

July 31,
2013

July 31,
2012

Net cash provided by operating activities.....................................
Net cash used in investing activities.............................................
Net cash used in financing activities ............................................
Effect of exchange rate changes on cash and cash equivalents ....
Net (decrease) increase in cash and cash equivalents................... $ (7,805) $ (3,058) $

$ 23,366
(19,018)
(7,450)
44

$ 16,296
(15,570)
(8,372)
(159)

$ 23,339
(270)
(13,889)
28

9,208

Net cash provided by operating activities

Net cash provided by operations was $16,296,000 for fiscal 2014 compared to $23,366,000 for fiscal 2013. In addition
to net income, as adjusted for depreciation and amortization and other non-cash operating activities, the primary sources and uses
of operating cash flows for fiscal years 2014 and 2013 were as follows:

Accounts receivable, less allowance for doubtful accounts, were $151,000 lower at fiscal year-end 2014 compared to
fiscal year-end 2013. The decrease was attributed primarily to improved cash collections in the fourth quarter of fiscal 2014.
Accounts receivable, less allowance for doubtful accounts, were $920,000 higher at fiscal year-end 2013 compared to fiscal year-
end 2012. The increase was attributed primarily to higher fiscal 2013 fourth quarter sales compared to fiscal 2012 fourth quarter
sales. The change in both periods was subject to timing of sales and collections and the payment terms provided to various
customers.

Inventories were $2,966,000 higher at fiscal year-end 2014 compared to fiscal year-end 2013. Increased finished goods
and packaging inventory at fiscal year-end 2014 were the result of both higher costs and increased quantities on hand. Inventories
were $1,050,000 higher at fiscal year-end 2013 compared to fiscal year-end 2012. Increased finished goods inventory values at
fiscal year-end 2013 were attributed to higher costs. Inventories of additives and fragrances increased as the result of production
trends for certain products, including scoopable cat litter.

Prepaid expenses were $1,988,000 higher at fiscal year-end 2014 compared to fiscal year-end 2013 due primarily to an
increase in prepaid income taxes and new plant assets with a short-term expected life. Prepaid expenses were $1,416,000 lower
at fiscal year-end 2013 compared to fiscal year-end 2012 due primarily to a decrease in prepaid income taxes.

Other assets were $817,000 higher at fiscal year-end 2014 compared to fiscal year-end 2013. The increase was due to
higher cash surrender value of life insurance on former key employees and a long-term warranty obtained on certain leased plant
assets. Other assets were $1,025,000 higher at fiscal year-end 2013 compared to fiscal year-end 2012. During fiscal 2013 a joint
infrastructure project with a local government at one of our plant locations resulted in an other asset of approximately $740,000.
A higher cash surrender value of life insurance on former key employees also contributed to the increase in 2013.

Accounts payable were $187,000 higher at fiscal year-end 2014 compared to fiscal year-end 2013 due primarily to
increased costs of purchased materials, which was partially offset by lower income taxes payable. Accounts payable were $135,000
higher at fiscal year-end 2013 compared to fiscal year-end 2012 due primarily to increased income taxes payable, which was
partially offset by lower trade accounts payable. Changes in trade accounts payable in all periods are subject to normal fluctuations
in the timing of payments.

Accrued expenses were $2,586,000 lower at fiscal year-end 2014 compared to fiscal year-end 2013. Accrued expenses
for fiscal 2014 declined due primarily due to the lower discretionary annual bonus accrual. In addition, the trade promotions and
advertising accrual was lower at fiscal year-end 2014. These decreases were partially offset by a new lease obligation for assets
at our plants. Accrued expenses were $2,159,000 higher at fiscal year-end 2013 compared to fiscal year-end 2012. Accrued expenses
for fiscal 2013 were higher for both the discretionary bonus and accrued costs related to capital projects at our manufacturing
facilities. These increases were partially offset by lower accrued advertising expense. Changes in other accrued expenses in all
periods related to ongoing operations are also subject to normal fluctuations in the timing of payments.

Deferred compensation was $698,000 higher at fiscal year-end 2014 compared to fiscal year-end 2013 and was $452,000
higher at fiscal year-end 2013 compared to fiscal 2012. Employee deferrals and interest on accumulated deferred compensation
balances exceeded payouts in both years. The increase at fiscal year-end 2014 also included a higher accrual for the SERP due to
a decrease in the discount rate used and the use of an updated mortality table to actuarially value the obligation. At fiscal year-
end 2013, a higher discount rate resulted in a lower SERP accrual compared to the prior year. See Note 11 of the Notes to the
Consolidated Financial Statements for more information regarding our deferred compensation plans.

Pension and other postretirement liabilities, net of the adjustment recorded in stockholders' equity, were $2,887,000 higher
at fiscal year-end 2014 compared to fiscal year-end 2013 and were $1,896,000 lower at fiscal year-end 2013 compared to fiscal
year-end 2012. A lower discount rate and the use of an updated mortality table required for the actuarial calculation of postretirement
benefit obligations resulted in a significantly higher liability at fiscal year-end 2014. At fiscal year-end 2013, a higher discount
rate resulted in a significantly lower liability. See Note 10 of the Notes to the Consolidated Financial Statements for more information
regarding our postretirement benefit plans.

Net cash used in investing activities

Cash used in investing activities was $15,570,000 in fiscal 2014 compared to $19,018,000 in fiscal 2013. Dispositions
of investment securities were $15,821,000 greater than purchases in fiscal 2014. During fiscal 2014, some of the proceeds from
investment dispositions were used for the $12,876,000 acquisition of certain assets of MFM, plus an additional $129,000 was
classified as restricted cash held in escrow as of July 31, 2014. See Note 3 of the Notes to the Consolidated Financial Statements
for more information about the MFM acquisition. Cash used for capital expenditures of $18,566,000 in fiscal 2014 included
capacity expansion projects and mining equipment at our manufacturing facilities. Capital expenditures in fiscal 2013 of $9,795,000
included replacement and new machinery at our manufacturing facilities. Purchases and dispositions of investment securities in
both periods are also subject to variations in the timing of investment maturities.

Cash used in investing activities was $19,018,000 in fiscal 2013 compared to $270,000 in fiscal 2012. Purchases of
investment securities were $9,289,000 greater than dispositions in fiscal 2013. In fiscal 2012, dispositions of investment securities
exceeded purchases by $6,659,000. Purchases and dispositions of investment securities in both periods are subject to variations
in the timing of investment maturities. Cash used for capital expenditures of $9,795,000 in fiscal 2013 included replacement and
new machinery at our manufacturing facilities. Capital expenditures in fiscal 2012 of $6,960,000 included a new storage facility
and replacement of machinery at our manufacturing facilities.

Net cash used in financing activities

Cash used in financing activities was $8,372,000 in fiscal 2014 compared to $7,450,000 in fiscal 2013. Cash used to
purchase treasury stock was $87,000 and $175,000 in fiscal 2014 and 2013, respectively. Payments on long-term debt in fiscal
2014 were $3,500,000 compared to $3,800,000 in fiscal 2013. Dividend payments during fiscal 2014 of $4,965,000 were higher
than the $4,630,000 paid during fiscal 2013 due to a dividend rate increase. Proceeds from issuance of Common Stock and treasury
stock related to stock option exercises were $94,000 and $887,000 in fiscal 2014 and 2013, respectively.

Cash used in financing activities was $7,450,000 in fiscal 2013 compared to $13,889,000 in fiscal 2012. Cash used to
purchase treasury stock was $175,000 and $6,247,000 in fiscal 2013 and 2012, respectively. Payments on long-term debt in fiscal
2013 were $3,800,000 compared to $3,600,000 in fiscal 2012. Dividend payments during fiscal 2013 of $4,630,000 were higher
than the $4,486,000 paid during fiscal 2012 due to a dividend rate increase. Proceeds from issuance of Common Stock and treasury
stock related to stock option exercises were $887,000 and $352,000 in fiscal 2013 and 2012, respectively.

Other

Total cash and investment balances held by our foreign subsidiaries at July 31, 2014, 2013 and 2012 were $1,481,000,
$1,413,000 and $1,847,000, respectively. Cash and investment balances fluctuated due to normal business operations. See further
discussion in the “Foreign Operations” section above.

We have a $15,000,000 unsecured revolving credit agreement with BMO Harris Bank N.A. (“BMO Harris”) which will
expire on December 31, 2014. While there can be no assurance regarding the terms, timing or consummation of any successor
agreement, on or before the expiration of this agreement, we may enter into a successor credit agreement or other financing
arrangement with BMO Harris or another financing source. The credit agreement provides that we may select a variable rate based
on either BMO Harris’ prime rate or a LIBOR-based rate, plus a margin which varies depending on our debt to earnings ratio, or
a fixed rate as agreed between us and BMO Harris. The credit agreement also allows us to obtain foreign letters of credit when
necessary. At July 31, 2014, the variable rates would have been 3.25% for BMO Harris’ prime-based rate or 1.56% for LIBOR-
based rate. The credit agreement contains restrictive covenants that, among other things and under various conditions, limit our
ability to incur additional indebtedness or to dispose of assets. The agreement also requires us to maintain a minimum fixed
coverage ratio and a minimum consolidated net worth. As of July 31, 2014 and 2013, there were no outstanding borrowings under
this credit facility and we were in compliance with its covenants.

See Note 5 of the Notes to the Consolidated Financial Statements for information about our outstanding debt.

We believe that cash flow from operations, availability under our current and any successor revolving credit facility and
current cash and investment balances will provide adequate cash funds for foreseeable working capital needs, capital expenditures
at existing facilities, dividend payments and debt service obligations for at least the next 12 months. We believe cash requirements
for capital expenditures in fiscal 2015 will be comparable to fiscal 2014 due to projects at our manufacturing facilities. Advertising
and promotions spending is also anticipated to be a significant use of cash in fiscal 2015, but we believe at levels slightly less than
in fiscal 2014. Our cash requirements are subject to change as business conditions warrant and opportunities arise. We continually
evaluate our liquidity position and anticipated cash needs, as well as the financing options available to obtain additional cash
reserves. Our ability to fund operations, to make planned capital expenditures, to make scheduled debt payments and to remain
in compliance with all of the financial covenants under debt agreements, including the current credit agreement and any successor
agreements, depends on our future operating performance, which, in turn, is subject to prevailing economic conditions and to
financial, business and other factors. The timing and size of any new business ventures or acquisitions that we complete may also
impact our cash requirements.

CONTRACTUAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS

Our capital requirements are subject to change as business conditions warrant and opportunities arise. The following
tables summarize our significant contractual obligations and commercial commitments as of July 31, 2014 and the effect such
obligations are expected to have on liquidity and cash flows in future periods:

Contractual Obligations
Long-Term Debt ...................................
Interest on Long-Term Debt .................
Capital Leases.......................................
Operating Leases ..................................
Total Contractual Cash Obligations......

Total
$ 22,400,000
3,079,000
1,330,000
5,894,000
$ 32,703,000

Payments Due by Period

Less Than 1
Year
$ 3,500,000
859,000
1,330,000
1,527,000
$ 7,216,000

1 – 3 Years
$ 6,566,000
1,238,000
—
2,463,000
$ 10,267,000

4 – 5 Years
$ 6,167,000
738,000
—
1,369,000
$ 8,274,000

After 5
Years
$ 6,167,000
244,000
—
535,000
$ 6,946,000

During fiscal 2014, we made contributions of approximately $1,043,000 to our defined benefit pension plan. We have
not presented this obligation for future years in the table above because the funding requirement can vary from year to year based
on changes in the fair value of plan assets, actuarial assumptions and regulations. See Item 7A “Quantitative and Qualitative
Disclosures About Market Risk” below for certain information regarding the potential impact of financial market fluctuations on
pension plan assets and future funding contributions.

Amount of Commitment Expiration Per Period

Other Commercial Commitments

30,014,000

Total Amounts
Committed

Less Than
1 Year
$30,014,000

1 – 3 Years
$

— $

4 – 5 Years

After 5
Years

— $

—

The obligations above are open purchase orders primarily for packaging and other ingredients used in our products. The
expected timing of payments of these obligations was estimated based on current information. Timing of payments and actual
amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for
some obligations.

OFF BALANCE SHEET ARRANGEMENTS

We do not have any unconsolidated special purpose entities. As of July 31, 2014 we do not have any off-balance sheet
arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to
investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement
to which an entity unconsolidated with us is a party, under which we have: (i) any obligation arising under a guarantee contract,
derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support for such assets.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s discussion and analysis of the financial condition and results of operations are based upon our Consolidated
Financial Statements, which have been prepared in accordance with the generally accepted accounting principles of the United
States. We review our financial reporting and disclosure practices and accounting policies annually to ensure that our financial
reporting and disclosures provide accurate and transparent information relative to current economic and business environment.
We believe that of our significant accounting policies stated in Note 1 of the Notes to the Consolidated Financial Statements, the
policies listed below involve a higher degree of judgment and/or complexity. The preparation of the financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities, as well as the reported amounts of revenues and expenses during the reporting period.
Significant estimates include income taxes, promotional programs, pension accounting and allowance for doubtful accounts. Actual
results could differ from these estimates.

Income Taxes. Our effective tax rate was based on expected income, statutory tax rates and tax planning opportunities
available to us in various jurisdictions in which we operate. Significant judgment was required in determining our effective tax
rate and in evaluating our tax positions.

We determine our current and deferred taxes in accordance with ASC 740 Income Taxes. The tax effect of the expected
reversal of tax differences was recorded at rates currently enacted for each jurisdiction in which we operate. To the extent that
temporary differences will result in future tax benefit, we must estimate the timing of their reversal and whether taxable operating
income in future periods will be sufficient to fully recognize any deferred tax assets.

We maintain valuation allowances where it is likely that all or a portion of a deferred tax asset will not be realized. Changes
in valuation allowances from period to period are included in the income tax provision in the period of change. In determining
whether a valuation allowance is warranted, we take into account such factors as prior earnings history, expected future earnings
and other factors that could affect the realization of deferred tax assets. For example, certain factors, such as depletion and the
cost of fuel used in our manufacturing process, are difficult to predict and have a significant impact on our ability to use the deferred
tax benefit related to our AMT credit carryforwards. We recorded valuation allowances for income taxes of $3,973,000 and
$3,205,000 at July 31, 2014 and 2013, respectively, for the full amount of the deferred tax benefit related to our AMT credit and
foreign net operating loss carryforwards since we believe it is more likely than not that the benefit of these tax attributes will not
be realized.

In addition to valuation allowances, we provide for uncertain tax positions when such tax positions do not meet certain
recognition thresholds or measurement standards. Amounts for uncertain tax positions are adjusted when new information becomes
available or when positions are effectively settled. Our liability for unrecognized tax benefits based on tax positions related to the
current and prior fiscal years was zero at July 31, 2014 and $273,000 at July 31, 2013. See Note 7 of the Notes to the Consolidated
Financial Statements for further discussion.

Trade Promotions. We routinely commit to one-time or ongoing trade promotion programs in our Retail and Wholesale
Products Group. Promotional reserves are provided for sales incentives made directly to consumers, such as coupons, and sales
incentives made to customers, such as slotting, discounts based on sales volume, cooperative marketing programs and other
arrangements. All such trade promotion costs are netted against sales. Promotional reserves are established based on our best
estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. To estimate
trade promotion reserves, we rely on our historical experience with trade spending patterns and that of the industry, current trends
and forecasted data. While we believe our promotional reserves are reasonable and that appropriate judgments have been made,
estimated amounts could differ from future obligations. We have accrued liabilities at the end of each period for the estimated
trade spending programs. We recorded liabilities of approximately $2,044,000 and $2,173,000 for trade promotions at July 31,
2014 and 2013, respectively.

Pension and Postretirement Benefit Costs. We calculate our pension and postretirement health benefit obligations and
the related effects on results of operations using actuarial models. To measure the expense and obligations, we must make a variety
of estimates including critical assumptions for the discount rate used to value certain liabilities and the expected return on plan
assets set aside to fund these costs. We evaluate these critical assumptions at least annually. Other assumptions involving
demographic factors, such as retirement age, mortality and turnover, are evaluated periodically and are updated to reflect actual
experience. As these assumptions change from period to period, recorded pension and postretirement health benefit amounts and
funding requirements could also change. Actual results in any given year will often differ from actuarial assumptions because of
economic and other factors.

The discount rate is the rate assumed to measure the single amount that, if invested at the measurement date in a portfolio
of high-quality debt instruments, would provide the necessary future cash flows to pay the pension benefits when due. The discount
rate is subject to change each year. We refer to an applicable index and the expected duration of the benefit payments to select a
discount rate at which we believe the benefits could be effectively settled. The discount rate was the single equivalent rate that
would yield the same present value as the plan’s expected cash flows discounted with spot rates on a yield curve of investment-
grade corporate bonds. The yield curve used in fiscal 2014 was the Citigroup Pension Discount Curve and in fiscal 2013 was the
Citigroup Pension Liability Index. Our determination of pension expense or income is based on a market-related valuation of plan
assets, which is the fair market value. Our expected rate of return on plan assets is determined based on asset allocations and
historical experience. The expected long-term rate of inflation and risk premiums for the various asset categories are based on
general historical returns and inflation rates. The target allocation of assets is used to develop a composite rate of return assumption.
See Note 10 of the Notes to the Consolidated Financial Statements for additional information.

Trade Receivables. We recognize trade receivables when the risk of loss and title pass to the customer. We record an
allowance for doubtful accounts based on our historical experience and a periodic review of our accounts receivable, including a
review of the overall aging of accounts and analysis of specific accounts. A customer account is determined to be uncollectible
when we have completed our internal collection procedures, including termination of shipments, direct customer contact and
formal demand of payment. We believe our allowance for doubtful accounts is reasonable; however, the unanticipated default by
a customer with a material trade receivable could occur. We recorded an allowance for doubtful accounts of $707,000 and $641,000
at July 31, 2014 and 2013, respectively.

Inventories. We value inventories at the lower of cost (first-in, first-out) or market. Inventory costs include the cost of
raw materials, packaging supplies, labor and other overhead costs. We perform a detailed review of our inventory items to determine
34

if an obsolescence reserve adjustment is necessary. The review surveys all of our operating facilities and sales divisions to ensure
that both historical issues and new market trends are considered. The obsolescence reserve not only considers specific items, but
also takes into consideration the overall value of the inventory as of the balance sheet date. The inventory obsolescence reserve
values at July 31, 2014 and 2013 were $390,000 and $364,000, respectively.

Reclamation. During the normal course of our mining process we remove overburden and perform on-going reclamation
activities. As overburden is removed from a mine site, it is hauled to a previously mined site and used to refill older sites. This
process allows us to continuously reclaim older mine sites and dispose of overburden simultaneously, therefore minimizing the
costs associated with the reclamation process. On an annual basis we evaluate our potential reclamation liability in accordance
with ASC 410, Asset Retirement and Environmental Obligations. As of July 31, 2014 and 2013, we have recorded an estimated
net reclamation asset of $677,000 and $590,000, respectively, and a corresponding estimated reclamation liability of $1,429,000
as July 31, 2014 and $1,269,000 as of July 31, 2013. These values represent the discounted present value of the estimated future
mining reclamation costs at the production plants. The reclamation assets are depreciated over the estimated useful lives of the
various mines. The reclamation liabilities are increased based on a yearly accretion charge over the estimated useful lives of the
mines.

Accounting for reclamation obligations requires that we make estimates unique to each mining operation of the future
costs we will incur to complete the reclamation work required to comply with existing laws and regulations. Actual future costs
incurred could significantly differ from estimated amounts. Future changes to environmental laws could increase the extent of
reclamation work required. Any such increases in future costs could materially impact the amount incurred for reclamation costs.

Impairment of goodwill, trademarks and other intangible assets. We review carrying values of goodwill, trademarks
and other indefinite-lived intangible assets periodically for possible impairment in accordance ASC 350, Intangibles – Goodwill
and Other. Our impairment review requires significant judgment with respect to factors such as volume, revenue and expenses.
Impairment occurs when the carrying value exceeds the fair value. Our impairment analysis is usually performed in the first quarter
of the fiscal year and may be re-performed when deemed necessary due to indicators such as unexpected adverse economic factors,
unanticipated technological changes, competitive activities and acts by governments and courts. Our impairment analysis
performed in both the first and fourth quarters of fiscal 2014 did not indicate any impairment. We continue to monitor events,
circumstances or changes in the business that might imply a reduction in value and might lead to impairment.

NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Standards

In the first quarter of fiscal 2014 we adopted new guidance from the Financial Accounting Standard Board (“FASB”)
issued under Accounting Standard Codification (“ASC”) 220, Comprehensive Income-Reporting of Amounts Reclassified Out of
Accumulated Other Comprehensive Income. The guidance required presentation by the respective net income line items, either
on the face of the statement where net income is presented or in the notes, of information about significant amounts required to
be reclassified out of accumulated other comprehensive income (“AOCI”). We elected to present the reclassifications in the notes
to the financial statements. See Note 8 of the Notes to the Consolidated Financial Statements for additional information regarding
amounts reclassified from AOCI.

In the first quarter of fiscal 2014 we considered the FASB guidance issued under ASC 350, Testing Indefinite-Lived
Intangible Assets for Impairment, which provides the option to first assess qualitative factors to determine if the annual two-step
test for impairment must be performed. We did not elect to perform a qualitative assessment and continued to perform a quantitative
analysis to measure potential indefinite-lived intangible asset impairment. There was no impact on our Consolidated Financial
Statements as a result of this new guidance.

Recently Issued Accounting Standards and Regulations

In September 2013, the IRS released final tangible property regulations (“repair regulations”) under Sections 162(a) and
263(a) of the Internal Revenue Code, regarding the deduction and capitalization of amounts paid to acquire, produce, or improve
tangible property. The repair regulations provide guidance on the timing of deduction for tangible property and repairs. The final
regulations replace temporary regulations that were issued in March 2011 and are effective for our tax year beginning August 1,
2014, with early adoption permitted for tax years beginning January 1, 2012. We do not believe these regulations will have a
material impact on our Consolidated Financial Statements.

In May 2014, the FASB issued guidance under ASC 250, Revenue from Contract with Customers, which establishes a
single comprehensive revenue recognition model for all contracts with customers and will supersede most existing revenue
guidance. This guidance requires entities to recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange. Transition options
include either a full or modified retrospective approach and early adoption is not permitted. This guidance will be effective at the
beginning of our first quarter of fiscal 2017. We are currently evaluating the impact of the adoption of these requirement on our
Consolidated Financial Statements.

In August 2014, the FASB issued guidance under ASC 205, Presentation of Financial Statements - Going Concern, which
defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as
a going concern and to provide related footnote disclosures. This guidance will be effective for our fiscal year ended July 31, 2017.
We are currently evaluating the impact of the adoption of these requirement on our Consolidated Financial Statements.

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to interest rate risk and employ policies and procedures to manage our exposure to changes in the market
risk of our cash equivalents and short-term investments. We believe that the market risk arising from holdings of our financial
instruments is not material.

We are exposed to foreign currency fluctuation risk, primarily U.S. Dollar/British Pound, U.S. Dollar/Euro and U.S.
Dollar/Canadian Dollar, as it relates to certain accounts receivables and to our foreign operations. We are subject to translation
exposure of our foreign subsidiaries’ financial statements. In recent years, our foreign subsidiaries have not generated a substantial
portion of our consolidated net sales or net income. In addition, a small portion of our consolidated accounts receivable are
denominated in foreign currencies. During fiscal 2014, we did not enter into any hedge contracts to reduce exposure to fluctuations
in currency exchange rates. We believe that the overall foreign currency fluctuation risk is immaterial to our Consolidated Financial
Statements.

We are exposed to market risk at it relates to the investments of plan assets under our defined benefit pension plan. The
fair value of these assets is subject to change due to fluctuations in the financial markets. A lower asset value may increase our
pension expense and may increase the amount and accelerate the timing of future funding contributions.

We are exposed to regulatory risk in the fluids purification, agricultural and animal health markets, principally as a result
of the risk of increasing regulation of the food chain throughout the world, but particularly in the United States and Europe. We
actively monitor developments in this area, both directly and through trade organizations of which we are a member.

We are exposed to commodity price risk with respect to fuel. Factors that could influence the cost of natural gas used in
the kilns to dry our clay include the creditworthiness of our natural gas suppliers, the overall general economy, developments in
world events, general supply and demand for natural gas, seasonality and the weather patterns throughout the United States and
the world. We monitor fuel market trends and we may contract for a portion of our anticipated fuel needs using forward purchase
contracts to mitigate the volatility of our kiln fuel prices. As of July 31, 2014, we have purchased no natural gas contracts for our
planned kiln fuel needs for fiscal 2015. We continue to purchase natural gas at spot rates on a month to month basis.

Please also see Item 1A “Risk Factors” above for a discussion of these and other risks and uncertainties we face in our

business.

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED BALANCE SHEETS

Current Assets

ASSETS

July 31,

2014

2013

(in thousands)

Cash and cash equivalents ................................................................................................... $
Restricted cash.....................................................................................................................
Short-term investments........................................................................................................
Accounts receivable, less allowance of $707 and $641
in 2014 and 2013, respectively.......................................................................................
Inventories ...........................................................................................................................
Deferred income taxes.........................................................................................................
Prepaid repairs expense .......................................................................................................
Prepaid expenses and other assets .......................................................................................

16,230

129

2,640

30,997

24,483

1,570

3,722

3,745

24,035

—

18,459

31,148

20,723

3,986

3,458

1,563

Total Current Assets............................................................................................

83,516

103,372

Property, Plant and Equipment

Buildings and leasehold improvements...............................................................................
Machinery and equipment ...................................................................................................
Office furniture and equipment ...........................................................................................
Vehicles................................................................................................................................
Gross depreciable assets .................................................................................................
Less accumulated depreciation and amortization................................................................
Net depreciable assets.....................................................................................................
Construction in progress......................................................................................................
Land and mineral rights.......................................................................................................

Total Property, Plant and Equipment, Net..........................................................

28,557

120,081

10,244

12,099

170,981
(124,199)
46,782

11,759

16,355

74,896

28,475

112,056

9,880

11,615

162,026
(118,082)
43,944

5,845

16,266

66,055

Other Assets

Goodwill ..............................................................................................................................
Trademarks and patents, net of accumulated amortization
of $420 and $427 in 2014 and 2013, respectively..........................................................
Debt issuance costs, net of accumulated amortization
of $522 and $455 in 2014 and 2013, respectively..........................................................

Licensing agreements and non-compete agreements, net
of accumulated amortization of $1,145 and $1,861 in
2014 and 2013, respectively ............................................................................................
Customer list, net of accumulated amortization of $764 in 2014........................................
Deferred income taxes.........................................................................................................
Other ....................................................................................................................................

9,034

5,162

660

243

155
7,020
4,448

6,232

581

309

378
—
2,164

5,538

Total Other Assets...............................................................................................

27,792

14,132

Total Assets................................................................................................................................

186,204

183,559

The accompanying notes are an integral part of the Consolidated Financial Statements.

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

July 31,

2014

2013

(in thousands)

Current maturities of notes payable..................................................................................... $
Accounts payable.................................................................................................................
Dividends payable ...............................................................................................................
Accrued expenses

Salaries, wages and commissions .................................................................................
Trade promotions and advertising ................................................................................
Freight...........................................................................................................................
Other .............................................................................................................................

3,500
7,352
1,311

4,448
2,182
2,504
8,203

3,500
6,483
1,236

9,087
2,824
2,154
6,163

Total Current Liabilities......................................................................................

29,500

31,447

Noncurrent Liabilities

Notes payable ......................................................................................................................
Deferred compensation........................................................................................................
Pension and postretirement benefits....................................................................................
Other ....................................................................................................................................

Total Noncurrent Liabilities................................................................................

Total Liabilities .........................................................................................................................

18,900
9,267
22,273
1,956

52,396

81,896

22,400
8,569
16,362
1,843

49,174

80,621

Stockholders’ Equity

Common Stock, par value $.10 per share, issued 7,917,393 shares in 2014 and
7,866,560 shares in 2013 .....................................................................................................

792

787

Class B Stock, convertible, par value $.10 per share, issued 2,394,735 shares in 2014
and 2,394,487 shares in 2013 ..............................................................................................
Additional paid-in capital ....................................................................................................
Restricted unearned stock compensation.............................................................................
Retained earnings ................................................................................................................
Accumulated Other Comprehensive Income

Unrealized gain on marketable securities.....................................................................
Pension and postretirement benefits.............................................................................

Cumulative translation adjustment...............................................................................

239
33,130
(2,225)
136,039

114
(8,632)

255

Total Accumulated Other Comprehensive Income ..........................................

(8,263)

Less treasury stock, at cost (2,915,651 Common and 324,741
Class B shares in 2014 and 2,914,567 Common and
324,741 Class B shares in 2013) .....................................................................................

(55,404)

Total Stockholders’ Equity.......................................................................................................

104,308

239
31,317
(1,824)
132,750

86
(5,608)

487

(5,035)

(55,296)

102,938

Total Liabilities and Stockholders’ Equity.............................................................................

186,204

183,559

The accompanying notes are an integral part of the Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended July 31,
2013

2012

2014

(in thousands, except for per share data)

Net Sales ..........................................................................................................

266,313

250,583

240,681

Cost of Sales ....................................................................................................

(206,663)

(184,084)

(181,676)

Gross Profit .....................................................................................................

Selling, General and Administrative Expenses............................................

Capacity Rationalization Charges ................................................................

59,650

(47,232)

—

66,499

(47,558)

(70)

Income from Operations................................................................................

12,418

18,871

59,005

(47,303)

(1,623)

10,079

Other Income (Expense)

Interest income ..........................................................................................

Interest expense.........................................................................................

(1,569)

(1,773)

(2,060)

Foreign exchange loss ...............................................................................

Other, net...................................................................................................

Total Other Expense, Net...................................................................

Income Before Income Taxes.........................................................................

Income Taxes...................................................................................................

430

(1,081)

11,337

(2,981)

(56)

423

(1,372)

17,499

(2,913)

(196)

507

(1,718)

8,361

(2,263)

Net Income ......................................................................................................

8,356

14,586

6,098

Net Income Per Share

Basic Common ..........................................................................................

Basic Class B Common.............................................................................

Diluted....................................................................................................... $

1.27

0.96

1.17

2.25

1.69

2.07

Average Shares Outstanding

Basic Common ..........................................................................................

Basic Class B Common.............................................................................

Diluted.......................................................................................................

4,981

2,001

7,004

4,909

1,970

6,927

The accompanying notes are an integral part of the Consolidated Financial Statements.

0.92

0.70

0.85

5,063

1,934

7,062

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended July 31,
2013

2012

2014

(in thousands)

Net Income ......................................................................................................

8,356

14,586

6,098

Other Comprehensive Income:

Unrealized gain on marketable securities .................................................
Pension and postretirement benefits (net of tax).......................................
Cumulative translation adjustment............................................................
Other Comprehensive (Loss) Income.........................................................
Comprehensive Income (Loss) ......................................................................

28
(3,024)
(232)
(3,228)
5,128

5,983
(86)
5,911

20,497

1
(6,276)
(226)
(6,501)
(403)

The accompanying notes are an integral part of the Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Number of Shares

(in thousands)

Common
& Class B
Stock

Treasury
Stock

Common
& Class
B
Stock

Additional
Paid-In
Capital

Retained
Earnings

Restricted
Unearned
Stock
Compensation

Treasury
Stock

Accumulated
Other
Comprehensive
Income/(Loss)

Total
Stockholders’
Equity

Balance, July 31, 2011

10,123,183

(2,967,128) $

1,012

29,213

$ 121,388

(2,446) $ (49,424) $

(4,445) $

Net Income

Other Comprehensive (Loss)
Income

Dividends Declared

Purchases of Treasury Stock

Net Issuance of Stock Under

Long-Term Incentive Plans

Share-based Compensation

Amortization of Restricted Stock

(296,427)

37,917

27,250

—

448

—

6,098

—

(4,511)

—

(74)

—

(488)

—

720

—

(6,247)

463

—

(6,501)

—

Balance, July 31, 2012

10,161,100

(3,236,305) $

1,016

29,759

$ 122,901

(2,214) $ (55,208) $

(10,946) $

Net Income

Other Comprehensive (Loss)
Income

Dividends Declared

Purchases of Treasury Stock

Net Issuance of Stock Under

Long-Term Incentive Plans

Share-based Compensation

Amortization of Restricted Stock

(8,253)

99,947

5,250

—

1,289

269

—

14,586

—

(4,712)

—

(25)

—

(474)

—

864

—

(175)

—

5,911

—

95,298

6,098

(6,501)

(4,511)

(6,247)

353

720

85,308

14,586

5,911

(4,712)

(175)

887

269

864

Balance, July 31, 2013

10,261,047

(3,239,308) $

1,026

31,317

$ 132,750

(1,824) $ (55,296) $

(5,035) $

102,938

Net Income

Other Comprehensive (Loss)
Income

Dividends Declared

Purchases of Treasury Stock

Net Issuance of Stock Under

Long-Term Incentive Plans

Share-based Compensation

Amortization of Restricted Stock

(2,584)

51,081

1,500

—

1,727

—

8,356

—

(5,040)

—

(27)

—

(1,590)

—

1,189

—

(87)

(21)

—

8,356

(3,228)

—

(3,228)

(5,040)

(87)

1,189

Balance, July 31, 2014

10,312,128

(3,240,392) $

1,031

33,130

$ 136,039

(2,225) $ (55,404) $

(8,263) $

104,308

The accompanying notes are an integral part of the Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash Flows from Operating Activities
Net Income .................................................................................................................. $
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization .......................................................................
Amortization of investment (discounts) premiums ........................................
Non-cash stock compensation expense ..........................................................
Excess tax benefits for share-based payments................................................
Deferred income taxes....................................................................................
Provision for bad debts...................................................................................
Loss on the sale of property, plant and equipment.........................................
Capacity rationalization charges.....................................................................
(Increase) decrease in:
Accounts receivable.................................................................................
Inventories ...............................................................................................
Prepaid expenses .....................................................................................
Other assets..............................................................................................
Increase (decrease) in:
Accounts payable.....................................................................................
Accrued expenses ....................................................................................
Deferred compensation............................................................................
Pension and postretirement benefits........................................................
Other liabilities ........................................................................................
Total Adjustments............................................................................................
Net Cash Provided by Operating Activities .................................

Cash Flows from Investing Activities
Capital expenditures .......................................................................................
Proceeds from sale of property, plant and equipment ....................................
Acquisition of business...................................................................................
Restricted cash................................................................................................
Purchases of short-term investments ..............................................................
Dispositions of short-term investments ..........................................................
Net Cash Used in Investing Activities..........................................

2014

Year-Ended July 31
2013
(in thousands)

2012

8,356

$ 14,586

6,098

10,396
(2)
1,189
(86)
284
69
452
—

82
(2,966)
(1,988)
(817)

187
(2,586)
698
2,887
141
7,940
16,296

(18,566)
180
(12,876)
(129)
(10,391)
26,212
(15,570)

8,946
(7)
864
(268)
(398)
64
8
70

(984)
(1,050)
1,416
(1,025)

135
2,159
452
(1,896)
294
8,780
23,366

(9,795)
66
—
—
(34,439)
25,150
(19,018)

9,272
15
727
(92)
(2,568)
32
445
1,623

(1,026)
(456)
1,878
(510)

456
1,622
921
4,730
172
17,241
23,339

(6,960)
31
—
—
(17,601)
24,260
(270)

Cash Flows from Financing Activities
(3,500)
Principal payments on notes payable .............................................................
(4,965)
Dividends paid................................................................................................
(87)
Purchase of treasury stock ..............................................................................
82
Proceeds from issuance of treasury stock.......................................................
12
Proceeds from issuance of common stock......................................................
86
Excess tax benefits for share-based payments................................................
(8,372)
Net Cash Used in Financing Activities ........................................
(159)
Effect of exchange rate changes on cash and cash equivalents...................................
(7,805)
Net (Decrease) Increase in Cash and Cash Equivalents ........................................
Cash and Cash Equivalents, Beginning of Year......................................................
24,035
Cash and Cash Equivalents, End of Year................................................................ $ 16,230

The accompanying notes are an integral part of the Consolidated Financial Statements.

(3,800)
(4,630)
(175)
82
805
268
(7,450)
44
(3,058)
27,093
$ 24,035

(3,600)
(4,486)
(6,247)
31
321
92
(13,889)
28
9,208
17,885
$ 27,093

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

We are a leader in developing, manufacturing and/or marketing sorbent products. Our sorbent products are principally
produced from clay minerals. Our absorbent clay products include cat litter, industrial floor absorbents, agricultural chemical
carriers and enterosorbents used in animal feed. Our adsorbent products include synthetic sorbents, which are used for industrial
cleanup, and bleaching clay products, which are used for filtration of edible oils and for purification aid of petroleum-based oils.

PRINCIPLES OF CONSOLIDATION

The Consolidated Financial Statements include the accounts of Oil-Dri Corporation of America and its subsidiaries, all
of which are wholly-owned. All significant intercompany balances and transactions have been eliminated from the Consolidated
Financial Statements.

MANAGEMENT USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

Cash equivalents are highly liquid investments with maturities of three months or less when purchased.

SHORT-TERM INVESTMENTS

The composition of short-term investments was as follows as of July 31 (in thousands):

2014

2013

U.S. Treasury Securities........................

— $

8,999

Certificates of Deposit ..........................
Short-Term Investments........................

2,640

9,460

2,640

$ 18,459

We intend and have the ability to hold these investments to maturity; therefore, these investments are reported at amortized

cost on the Consolidated Balance Sheets.

TRADE RECEIVABLES

We recognize trade receivables when the risk of loss and title pass to the customer. We record an allowance for doubtful
accounts based on our historical experience and a periodic review of our accounts receivable, including a review of the overall
aging of accounts and analysis of specific accounts. A customer account is determined to be uncollectible when we have completed
our internal collection procedures, including termination of shipments, direct customer contact and formal demand of payment.
We retain outside collection agencies to facilitate our collection efforts. Past due status is determined based on contractual terms
and customer payment history.

INVENTORIES

We value inventories at the lower of cost (first-in, first-out) or market. We recorded inventory obsolescence reserves of
approximately $390,000 and $364,000 as of July 31, 2014 and 2013, respectively. The composition of inventories was as follows
as of July 31 (in thousands):

2014

2013

Finished goods...........................
Packaging ..................................
4,755
Other ..........................................
Inventories ................................. $ 24,483

$ 14,326

5,402

$ 12,112

4,003

4,608

$ 20,723

TRANSLATION OF FOREIGN CURRENCIES

Assets and liabilities of foreign subsidiaries, where the local currency is the functional currency, are translated at the
exchange rates in effect at period end. Income statement items are translated at the average exchange rate on a monthly basis.
Resulting translation adjustments are recorded as a separate component of stockholders’ equity.

INTANGIBLE ASSETS AND GOODWILL

We amortize most of our intangible assets on a straight-line basis over periods ranging from seven to 17 years. Our
customer list intangible asset, related to the acquisition of certain assets of MFM, is amortized at an accelerated amortization rate
in the earlier years to reflect the expected pattern of decline in the related benefits over time. Intangible amortization was $1,107,000
in fiscal 2014 and $343,000 in fiscal 2013. We have some intangible assets that were determined to have indefinite lives and are
not amortized, specifically one acquired trademark recorded at $376,000.

Our estimated intangible amortization expense for the next five fiscal years is as follows (in thousands):

2015..................... $ 1,581
2016..................... $ 1,443
2017..................... $ 1,188
2018..................... $
979
2019..................... $

792

The weighted average amortization period of our intangible assets subject to amortization is as follows (in years):

Weighted Average
Amortization Period

Trademarks and patents................................................
Debt issuance costs.......................................................
Licensing agreements and noncompete agreements ....
Customer list ................................................................
Total intangible assets subject to amortization.............

4.5

5.0
0.8
9.3
8.9

We periodically review indefinite-lived intangibles and goodwill to assess for impairment. Our review is based on cash
flow considerations and other approaches that require significant judgment with respect to volume, revenue and expenses.
Impairment occurs when the carrying value exceeds the fair value. Our impairment analysis is generally performed in the first
quarter of the fiscal year and when indicators such as unexpected adverse economic factors, unanticipated technological changes,
competitive activities and acts by governments and courts indicate that an asset may become impaired.

During fiscal 2014 a total of $3,872,000 was added to goodwill related to the MFM acquisition. See Note 3 of the

Notes to the Consolidated Financial Statements for further information.

OVERBURDEN REMOVAL AND MINING COSTS

We mine sorbent materials on property that we either own or lease as part of our overall operations. A significant part of
our overall mining cost is incurred during the process of removing the overburden from the mine site, thus exposing the sorbent
material used in a majority of our production processes. These stripping costs are treated as a variable inventory production cost
and are included in cost of sales in the period they are incurred. Stripping costs included in cost of sales were approximately
$4,179,000, $2,187,000, and $2,031,000 for the fiscal years ended July 31, 2014, 2013 and 2012, respectively. The increase in
stripping costs in fiscal 2014 reflect increased tons mined and extraction of clay reserves that required more overburden removal.
We defer and amortize the pre-production overburden removal costs associated with opening a new mine. No pre-production
overburden removal costs were deferred in the last two fiscal years.

Additionally, it is our policy to capitalize the purchase cost of land and mineral rights, including associated legal fees,
survey fees and real estate fees. The costs of obtaining mineral rights, including legal fees and drilling expenses, are also capitalized.
The amount of land and mineral rights included in land on the Consolidated Balance Sheets were approximately $13,348,000 and
$2,165,000, respectively, as of July 31, 2014 and $13,000,000 and $2,165,000, respectively, as of July 31, 2013. Pre-production
development costs on new mines and any prepaid royalties that may be offset against future royalties due upon extraction of the
mineral are also capitalized. Prepaid royalties included in prepaid expenses and other assets on the Consolidated Balance Sheets
were approximately $1,052,000 and $1,059,000 as of July 31, 2014 and 2013, respectively. No capitalized pre-production
development costs were recorded in the last two fiscal years. All exploration related costs are expensed as incurred.

RECLAMATION

We perform ongoing reclamation activities during the normal course of our overburden removal. As overburden is removed
from a mine site, it is hauled to previously mined sites and is used to refill older sites. This process allows us to continuously
reclaim older mine sites and dispose of overburden simultaneously, therefore minimizing the costs associated with the reclamation
process.

On an annual basis we evaluate our potential reclamation liability in accordance with ASC 410, Asset Retirement and
Environmental Obligations. The reclamation assets are depreciated over the estimated useful lives of the various mines. The
reclamation liabilities are increased based on a yearly accretion charge over the estimated useful lives of the mines.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are generally depreciated using the straight-line method over their estimated useful lives
which are listed below. Major improvements and betterments are capitalized, while maintenance and repairs that do not extend
the useful life of the applicable assets are expensed as incurred.

Buildings and leasehold improvements ................
Machinery and equipment

Packaging ......................................................
Processing......................................................
Mining and Other ..........................................
Office furniture, computers and equipment..........
Vehicles.................................................................

2
3
2
3

Years

-
-
-
-

25
15
12
15

Depreciation expense was $9,289,000 and $8,603,000 for fiscal 2014 and 2013, respectively.

Property, plant and equipment are reviewed for possible impairment on an annual basis. We take into consideration idle
and underutilized equipment and review business plans for possible impairment. When impairment is indicated, an impairment
charge is recorded for the difference between the carrying value of the asset and its fair market value.

TRADE PROMOTIONS

We routinely commit to one-time or ongoing trade promotion programs, primarily in our Retail and Wholesale Products
Group. All such costs are netted against sales. We have accrued liabilities at the end of each period for the estimated expenses
incurred but not yet paid for these programs. Promotional reserves are provided for sales incentives made directly to consumers,

such as coupons, and sales incentives made to customers, such as slotting, discounts based on sales volume, cooperative marketing
programs and other arrangements. We use judgment for estimates to determine our trade spending liabilities. We rely on our
historical experience with trade spending patterns and that of the industry, current trends and forecast data.

ADVERTISING

Advertising costs for the development of printed materials, television commercials, web-based digital banners, web-
based social media and sales videos are deferred and expensed upon the first use of the materials, unless such amounts are
immaterial. Costs paid for communicating advertising over a period of time, such as television air time, radio commercials and
print media advertising space, are deferred and expensed on a pro-rata basis. All other advertising costs, including participation
in industry conventions and shows and market research, are expensed when incurred. All advertising costs are part of selling,
general and administrative expenses.

Advertising expenses were approximately $8,886,000, $7,975,000, and $10,846,000 for the years ended July 31, 2014,
2013 and 2012, respectively. Advertising expenses were higher in fiscal 2012 for our Cat's Pride Fresh & Light products, which
were introduced in the fourth quarter of fiscal 2011.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Non-derivative financial instruments included in the Consolidated Balance Sheets are cash and cash equivalents, short-
term investments, cash surrender value of life insurance policies and notes payable. These instruments, except for notes payable,
were carried at amounts approximating fair value as of July 31, 2014 and 2013. The short-term investments included certificates
of deposits and, as of July 31, 2013, also included U.S. Treasury securities. We intend and have the ability to hold our short-term
investments to maturity; therefore, these investments were reported at amortized cost, which was approximately equal to fair value.
See Note 6 of the Notes to the Consolidated Financial Statements for additional information regarding the fair value of notes
payable, as well as assets and liabilities recorded at fair value.

REVENUE RECOGNITION

We recognize revenue when risk of loss and title are transferred under the terms of our sales agreements with customers
at a fixed and determinable price and collection of payment is probable. Taxes collected from customers and remitted to
governmental authorities are excluded from net sales. Sales returns and allowances are not material.

COST OF SALES

Cost of sales consists of all manufacturing costs, including depreciation and amortization related to assets used in the
manufacturing and distribution process, inbound and outbound freight, inspection costs, purchasing costs associated with materials
and packaging used in the production process and warehouse and distribution costs.

SHIPPING AND HANDLING COSTS

Shipping and handling costs are included in cost of sales and were approximately $49,456,000, $45,002,000 and

$42,095,000 for the fiscal years ended July 31, 2014, 2013 and 2012, respectively.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses include salaries, wages and benefits associated with staff outside the
manufacturing and distribution functions, all marketing related costs, any miscellaneous trade spending expenses not required to
be included in net sales, research and development costs, depreciation and amortization related to assets outside the manufacturing
and distribution process and all other non-manufacturing and non-distribution expenses.

RESEARCH AND DEVELOPMENT

Research and development costs of approximately $2,587,000, $2,620,000 and $2,006,000 were charged to expense as

incurred for the fiscal years ended July 31, 2014, 2013 and 2012, respectively.

PENSION AND POSTRETIREMENT BENEFIT COSTS

We provide a defined benefit pension plan for eligible salaried and hourly employees and we make contributions to fund
the plan. We also provide a postretirement health benefit plan to domestic salaried employees who qualify under the plan’s
provisions. The postretirement health benefit plan is unfunded. Our pension and postretirement health benefit plans are accounted
for using actuarial valuations required by ASC 715, Compensation – Retirement Benefits. The funded status of our defined pension
and postretirement health benefit plans are recognized on the Consolidated Balance Sheets. Changes in the funded status that arise
during the period but are not recognized as components of net periodic benefit cost are recognized within other comprehensive
income, net of income tax. See Note 10 of the Notes to the Consolidated Financial Statements for additional information.

STOCK-BASED COMPENSATION

We account for stock options and restricted stock issued under our long term incentive plans in accordance with ASC
718, Compensation – Stock Compensation. The fair value of stock-based compensation is determined at the grant date. The related
compensation expense is recognized over the appropriate vesting period. See Note 9 of the Notes to the Consolidated Financial
Statements for additional information.

INCOME TAXES

Deferred income tax assets and liabilities are recorded for the impact of temporary differences between the tax basis of
assets and liabilities and the amounts recognized for financial reporting purposes. Deferred tax assets are reviewed and a valuation
allowance is established if management believes that it is more likely than not that some portion of our deferred tax assets will
not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change.

In addition to existing valuation allowances, we provide for uncertain tax positions when such tax positions do not meet
the recognition thresholds or measurement standards prescribed by ASC 740, Income Taxes. Amounts for uncertain tax positions
are adjusted when new information becomes available or when positions are effectively settled. We recognize interest and penalties
accrued related to uncertain tax positions in income tax (benefit) expense.

U.S. income tax expense and foreign withholding taxes are provided on remittances of foreign earnings and on unremitted
foreign earnings that are not indefinitely reinvested. Where unremitted foreign earnings are indefinitely reinvested, no provision
for federal or state tax expense is recorded. When circumstances change and we determine that some or all of the undistributed
earnings will be remitted in the foreseeable future, a corresponding expense is accrued in the current period. See Note 7 of the
Notes to the Consolidated Financial Statements for additional information about income taxes.

NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Standards

In the first quarter of fiscal 2014 we adopted new guidance from the FASB issued under ASC 220, Comprehensive Income-
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The guidance required presentation by the
respective net income line items, either on the face of the statement where net income is presented or in the notes, of information
about significant amounts required to be reclassified out of AOCI. We elected to present the reclassifications in the notes to the
financial statements. See Note 8 of the Notes to the Consolidated Financial Statements for additional information regarding amounts
reclassified from AOCI.

Recently Issued Accounting Standards and Regulations

In September 2013, the IRS released final repair regulations under Sections 162(a) and 263(a) of the Internal Revenue
Code, regarding the deduction and capitalization of amounts paid to acquire, produce, or improve tangible property. The repair
regulations provide guidance on the timing of deduction for tangible property and repairs. The final regulations replace temporary
regulations that were issued in March 2011 and are effective for our tax year beginning August 1, 2014, with early adoption

permitted for tax years beginning January 1, 2012. We do not believe these regulations will have a material impact on our
Consolidated Financial Statements.

NOTE 2 – SPECIAL CHARGES

Capacity Rationalization Charges

In fiscal 2012 we announced the planned relocation of production of our industrial floor absorbent and cat litter products
from our facility located in Mounds, Illinois, to our plants located in Mississippi. This decision was made due to the continued
decline in the coarse cat litter market and after a comprehensive evaluation of our manufacturing operations and cost structure,
including state regulatory requirements. During fiscal 2012 we incurred a pre-tax asset write-off of $1,187,000 and severance and
other employee-related costs of $436,000. During fiscal 2013 we recorded pre-tax employee-related costs of $70,000 (net of an
adjustment to reduce the reserve estimate), which concluded our expenditures and eliminated our reserve related to this production
relocation. These costs are shown as “Capacity Rationalization Charges” on the Consolidated Statements of Operations in fiscal
years 2013 and 2012. Allocation of these expenses between operating segments is impracticable due to the shared nature of our
production facilities.

The table below shows a rollforward of the reserve included in Other Accrued Expenses on the Consolidated Balance

Sheets as of July 31, 2013.

Severance and
other employee
related costs

Reserve balance at July 31, 2012......
Charges against reserve ....................
Reserve adjustment...........................
Reserve balance at July 31, 2013......

413

(403)

(10)

—

NOTE 3 – ACQUISITION

On November 1, 2013, we acquired certain assets of MFM, a company engaged in the manufacturing, marketing and
distribution of primarily private label cat litter. MFM and its parent company, MFM Delaware, Inc., had filed for bankruptcy in
May 2013. The purchase of MFM’s cat litter business assets was a strategic business decision intended to expand our private label
cat litter business. We did not acquire any land or mineral rights nor did we operate the MFM plant. MFM’s customers’ orders
were transitioned to our existing cat litter manufacturing plants which had available capacity and were producing similar cat litter
products.

This transaction qualifies as a business combination for accounting purposes, therefore the assets acquired were recorded
at their respective estimated fair values at the date of acquisition. The excess of the purchase price over those fair values was
recorded as goodwill. The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed at
the acquisition date.

Estimated Fair
Value as of
November 1, 2013
(in thousands)

Consideration transferred:

Cash ........................................................................................ $
Contingent Consideration - Escrow .......................................
Contingent Consideration - Proceeds on land sale.................
Fair value of total consideration transferred.............................

Recognized amounts of identifiable assets acquired:

Inventories ..............................................................................
Current assets .........................................................................
Equipment ..............................................................................
Customer list ..........................................................................
Total identifiable assets.............................................................

Goodwill................................................................................... $

12,505

500
(255)
12,750

664

130

300

7,784

8,878

3,872

Contingent consideration we may owe represents our maximum obligation for expenses to be incurred to prepare and
sell the real property retained by MFM. We deposited this amount in an escrow account and we expect the full escrow amount to
be spent within a year. As of July 31, 2014, the remaining balance in escrow was $129,000. The cash held in escrow is shown as
restricted cash and the corresponding liability is included in current liabilities on the Consolidated Balance Sheets.

We may receive monies back from MFM contingent on the sale of the real property retained by MFM. The MFM purchase
agreement provides that we will receive half of the proceeds upon the sale. Although an independent appraisal was performed to
determine the fair value of the real property as of the acquisition date, MFM subsequently entered into an agreement with a third
party to sell the land at an amount substantially less than fair value in order to resolve its bankruptcy proceedings. Although that
sale was not completed as of July 31 2014, we expect the ultimate selling price to be significantly less than fair value and we have
estimated the contingent consideration we may receive based on MFM's agreed upon selling price to the third party. This contingent
receivable is included in current assets on the Consolidated Balance Sheets.

Inventories acquired included finished goods, packaging supplies and raw materials. The inventory fair value was

determined using the comparative sales method approach.

Current assets on the Consolidated Balance Sheets included a prepaid asset for MFM deposits held by packaging suppliers

to which we are entitled as of November 1, 2013.

Various machinery and equipment purchased was valued primarily using a market valuation approach; however, a cost

approach was used for certain equipment for which appropriate market comparisons were not available.

We acquired a customer list which was recorded as an intangible asset at fair value using an income valuation approach.
The valuation process estimated the present value of the anticipated benefits in excess of the returns on the contributory assets
required to realize those benefits. The value of the customer list will be amortized over a period of 10 years with an accelerated
amortization rate in the earlier years to reflect the expected pattern of decline in the related benefits over time. This customer list
is related to the Retail and Wholesale Products Group segment.

The goodwill recorded from the acquisition is primarily attributable to anticipated synergies of our product portfolios.
All of the goodwill recognized is deductible for tax purposes. This goodwill is related to the Retail and Wholesale Products Group
segment.

We incurred $355,000 of acquisition-related costs, which are included in selling, general and administrative expenses on

the Consolidated Statements of Operations.

The summarized proforma financial information below presents the combined results of operations as if the acquisition
of MFM had occurred as of August 1, 2012. MFM’s pre-acquisition results have been added to Oil-Dri’s historical results and
include certain adjustments related to the acquisition, such as amortization of intangible assets and depreciation expense. These
49

proforma results do not include any anticipated cost synergies and do not reflect the actual results of operations that would have
been achieved, nor are they indicative of future results of operations. The following proforma results are presented for comparative
purposes only (unaudited) (in thousands, except per share amounts):

For the Twelve Months
Ended July 31,

2014

2013

Proforma net sales ....................................................... $
Proforma net income ................................................... $
Proforma net income per share - Basic Common........ $
Proforma net income per share - Basic Class B .......... $
Proforma net income per share - Diluted .................... $

271,279 $
7,834 $
1.19 $
0.90 $
1.11 $

271,453
13,387
2.06
1.55
1.90

The net sales for MFM-related customers after the acquisition that are included in our Consolidated Financial Statements
for fiscal 2014 were approximately $10,100,000. The amount of net income specifically attributed to these customers cannot be
determined because MFM’s customers’ orders were fulfilled in our existing cat litter manufacturing plants and with our existing
sales team and logistics processes.

NOTE 4 – OPERATING SEGMENTS

We have two reportable operating segments: (1) Retail and Wholesale Products Group and (2) Business to Business
Products Group. 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, wholesale clubs, drugstore
chains, pet specialty retail outlets, dollar stores, retail grocery stores, distributors of industrial cleanup and automotive products,
environmental service companies and sports field product users. The Business to Business Products Group customers include:
processors and refiners of edible oils, petroleum-based oils and biodiesel fuel; manufacturers of animal feed and agricultural
chemicals; distributors of animal health and nutrition products; and marketers of consumer products.

Net sales and operating income for each segment are provided below. Revenues by product line are not provided because
it would be impracticable to do so. The accounting policies of the segments are the same as those described in the Note 1 of the
Notes to the Consolidated Financial Statements.

We do not rely on any operating segment asset allocations and we do not consider them meaningful because of the shared
nature of our production facilities; however, we have estimated the segment asset allocations below for those assets for which we
can reasonably determine. The unallocated asset category is the remainder of our total assets. The asset allocation is estimated
and is not a measure used by our chief operating decision maker about allocating resources to the operating segments or in assessing
their performance. The corporate expenses line represents certain unallocated expenses, including primarily salaries, wages and
benefits, purchased services, rent, utilities and depreciation and amortization associated with corporate functions such as research
and development, information systems, finance, legal, human resources and customer service. Corporate expenses also include
the annual incentive plan bonus accrual.

Business to Business Products.........................................................................................
Retail and Wholesale Products........................................................................................
Unallocated Assets...........................................................................................................
Total Assets.....................................................................................................................

$ 53,823
95,712
36,669
$ 186,204

2014

July 31,
Assets
2013
(in thousands)
$ 53,721
76,376
53,462
$ 183,559

2012

$ 44,250
79,658
50,359
$ 174,267

2014

Net Sales
2013

Year Ended July 31,

2012

2014

(in thousands)

Income
2013

2012

157,614

172,027

155,225

$ 94,286

$ 92,969

$ 85,456

$ 266,313

Business to Business Products .........................
Retail and Wholesale Products ........................
Total Sales.......................................................
$ 240,681
Corporate Expenses .........................................................................................................
Capacity Rationalization Charges ...................................................................................
Income from Operations...............................................................................................
Total Other Expense, Net.................................................................................................
Income before Income Taxes........................................................................................
Income Taxes..................................................................................................................
Net Income .....................................................................................................................

$ 250,583

$ 26,654

$ 30,739

$ 28,643

3,568

10,561

2,098

(17,804)
—

12,418
(1,081)
11,337
(2,981)
8,356

(22,359)
(70)
18,871
(1,372)
17,499
(2,913)
$ 14,586

(19,039)
(1,623)
10,079
(1,718)
8,361
(2,263)
6,098

The following is a summary of financial information by geographic region for the years ended July 31 (in thousands):

Sales to unaffiliated customers by:

Domestic operations ..............................

$ 255,067

$ 238,655

$ 229,382

2014

2013

2012

Foreign subsidiaries...............................

Sales or transfers between geographic areas:

Domestic operations ...............................

Income (Loss) before income taxes:

Domestic operations ..............................
Foreign subsidiaries...............................

Net Income (Loss):

Domestic operations ...............................
Foreign subsidiaries...............................

Identifiable assets:

$
$

11,246

4,285

12,209
(872)

9,064
(708)

$
$

11,928

4,624

17,744
(245)

14,762
(176)

$
$

11,299

4,440

9,382
(1,021)

6,974
(876)

Domestic operations ..............................
Foreign subsidiaries...............................

$ 178,061
8,143
$

$ 175,261
8,298
$

$ 165,565
8,702
$

Our largest customer accounted for the following percentage of consolidated net sales and net accounts receivable:

Net sales for the years ended July 31.................
Net accounts receivable as of July 31 ................

2014
19%

28%

2013

20%

30%

2012

22%

32%

NOTE 5 – NOTES PAYABLE

The composition of notes payable is as follows as of July 31 (in thousands):

2014

2013

Prudential Insurance Company of America and other parties

Payable in annual principal installments on August 1: $3,083 in each fiscal year 2016
through 2021. Interest is payable semiannually at an annual rate of 3.96%.......................

18,500

The Prudential Insurance Company of America and Prudential Retirement Insurance and
Annuity Company

Payable in annual principal installments on October 15: $3,500 in fiscal 2015; and $400
in fiscal 2016. Interest is payable semiannually at an annual rate of 5.89%.......................
Total notes payable.....................................................................................................................
Less current maturities of notes payable.............................................................................
Noncurrent notes payable...........................................................................................................

3,900

22,400
(3,500)
18,900

7,400

25,900
(3,500)
22,400

We have $18,500,000 of senior promissory notes pursuant to an agreement with The Prudential Insurance Company of
America and other parties. The notes bear interest at 3.96% per annum and mature on August 1, 2020. The proceeds of the sale
may be used to fund future principal payments of our debt, acquisitions, stock repurchases, capital expenditures and for working
capital purposes. The note agreement contains certain covenants that restrict our ability and the ability of certain of our subsidiaries
to, among other things, (i) incur liens, (ii) incur indebtedness, (iii) merge or consolidate, (iv) sell assets, (v) sell stock of those
certain subsidiaries, (vi) engage in business that would change the general nature of the business we are engaged in, and (vii) enter
into transactions other than on “arm's length” terms with affiliates.

We sold at face value $15,000,000 in senior promissory notes to The Prudential Insurance Company of America and to
Prudential Retirement Insurance and Annuity Company pursuant to a Note Agreement dated December 16, 2005. The notes bear
interest at 5.89% per annum and mature on October 15, 2015. The proceeds of the sale may be used to fund future principal
payments on debt, acquisitions, stock repurchases, and capital expenditures and for working capital purposes. The note agreement
contains certain covenants that restrict our ability to, among other things, incur additional indebtedness, dispose of assets and
merge or consolidate. The note agreement also requires a minimum fixed coverage ratio and a minimum consolidated net worth
to be maintained.

On December 21, 2011, we signed a second amendment to extend our $15,000,000 unsecured revolving credit agreement
with BMO Harris. The second amendment extends the credit agreement until December 31, 2014. The credit agreement with BMO
Harris provides that we may select a variable rate based on either BMO Harris’ prime rate or a LIBOR-based rate, plus a margin
which varies depending on our debt to earnings ratio, or a fixed rate as agreed between us and BMO Harris. At July 31, 2014, the
variable rates would have been 3.25% for the BMO Harris’ prime-based rate or 1.56% for the LIBOR-based rate. The credit
agreement contains restrictive covenants that, among other things and under various conditions, limit our ability to incur additional
indebtedness or to dispose of assets. The agreement also requires us to maintain a minimum fixed coverage ratio and a minimum
consolidated net worth. On June 21, 2012, we signed a third amendment to the credit agreement which also allows us to obtain
foreign letters of credit when necessary. As of July 31, 2014 and 2013, there were no outstanding borrowings under this credit
agreement.

Our debt agreements also contain provisions such that if we default on one debt agreement, the others will automatically
default. If we default on any guaranteed debt with a balance greater than $1,000,000, our unsecured revolving credit agreement
with BMO Harris will be considered in default. If we default on any debt with a balance greater than $5,000,000 we will also be
considered in default with the promissory notes to The Prudential Insurance Company of America and Prudential Retirement
Insurance and Annuity Company. In addition, our credit agreement with BMO Harris indirectly limits dividends by requiring us
to maintain consolidated net worth, as defined, of about $56,760,000 plus 25% of cumulative quarterly earnings from January 31,
2006.

We were in compliance with all restrictive covenants and limitations at July 31, 2014.

The following is a schedule by fiscal year of future maturities of notes payable as of July 31, 2014 (in thousands):

2015 ...................... $
2016 ......................
2017 ......................
2018 ......................
2019 ......................
Later years ............

3,500

3,483

3,083

6,168

22,400

NOTE 6 – FINANCIAL INSTRUMENTS

Fair Value

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 one of three
categories based on the lowest level of input that is significant to the fair value measurement. Categories in the hierarchy are as
follows:

Level 1:

Financial assets and liabilities whose values are based on quoted market prices in active markets for identical assets
or liabilities.

Level 2:

Financial assets and liabilities whose values are based on:

1) Quoted prices for similar assets or liabilities in active markets.

2) Quoted prices for identical or similar assets or liabilities in markets that are not active.

3) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset

or liability.

Level 3:

Financial assets and liabilities whose values are based on valuation techniques that require inputs that are both
unobservable and significant to the overall fair value measurement. These inputs may reflect estimates of the
assumptions that market participants would use in valuing the financial assets and liabilities.

The following table summarizes our financial assets and liabilities that were reported at fair value by level within the fair

value hierarchy (in thousands):

Fair Value at July 31, 2014

Fair Value at July 31, 2013

Total

Level 1

Level 2

Total

Level 1

Level 2

Assets
Cash equivalents..........................................
Marketable equity securities........................
Cash surrender value of life insurance ........

$16,230
$
117
$ 4,625

$ 16,230
$
117
$ —

$ — $ 14,918
88
$ — $
$ 4,426
$ 4,625

$ 14,918
$ —
$
88
$ —
$ — $ 4,426

Cash equivalents are classified as Level 1 of the fair value hierarchy because they were valued using quoted market prices

in active markets. These cash instruments are primarily money market mutual funds.

Marketable equity securities were valued using quoted market prices in active markets and as such are classified as Level
1 in the fair value hierarchy. These securities represent stock we own in one publicly traded company and are included in other
noncurrent assets on the Consolidated Balance Sheets.

Cash surrender value of life insurance is classified as Level 2. The value was determined by the underwriting insurance
company’s valuation models, which take into account the passage of time, mortality tables, interest rates, cash values for paid-up
additions and dividend accumulations. The cash surrender value represents the guaranteed value we would receive upon surrender

of these policies held on former key employees as of July 31, 2014 and 2013, as appropriate. The cash surrender value of life
insurance is included in other assets on the Consolidated Balance Sheets.

Short-term investments on the Consolidated Balance Sheets included certificates of deposit at July 31, 2014 and, at July
31, 2013, also included U.S. Treasury securities. We intend and have the ability to hold our short-term investments to maturity;
therefore, these investments were reported at amortized cost on the Consolidated Balance Sheets, which approximated fair value
as of July 31, 2014 and 2013, and these balances are excluded from the above table.

Accounts receivable and accounts payable balances on the Consolidated Balance Sheets approximate their fair values at
July 31, 2014 and 2013 due to the short maturity and nature of those balances; therefore, these balances are excluded from the
above table.

Notes payable on the Consolidated Balance Sheets are carried at the face amount of future maturities and are excluded
from the above table. The estimated fair value of notes payable was approximately $23,940,000 as of July 31, 2014 and $27,514,000
as of July 31, 2013. Our debt does not trade on a daily basis in an active market, therefore the fair value of notes payable was
estimated based on market observable borrowing rates currently available for debt with similar terms and average maturities and
is classified as Level 2.

Concentration of Credit Risk

Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash, short-term
investments and accounts receivable. Our cash is held in banks which are covered by the Federal Deposit Insurance Corporation;
however, our cash balances are in excess of the maximum amount that is insured. Our short-term investments are placed in
government-backed instruments and with other high quality institutions. Concentrations of credit risk with respect to accounts
receivable are subject to the financial condition of certain major customers, principally the customer referred to in Note 4 of the
Notes to the Consolidated Financial Statements. We generally do not require collateral to secure customer receivables; however,
we require letters of credit for some foreign customers or we purchase insurance to reduce our risk.

NOTE 7 – INCOME TAXES

The provision for income tax expense (benefit) consists of the following at July 31 (in thousands):

2014

2013

2012

Current

Federal............................................................ $

1,267

5,446

(252)

Foreign ...........................................................

State................................................................
Current Income Tax Total..........................

Deferred

Federal............................................................

Foreign ...........................................................

State................................................................
Deferred Income Tax Total........................
Total Income Tax Expense............................... $

308

1,638

1,381

(215)

177
1,343
2,981

578

6,043

(2,984)

(88)

(58)
(3,130)
2,913

358

(165)
(59)

2,038

(171)

455
2,322
2,263

Principal reasons for variations between the statutory federal rate and the effective rates were as follows for the years

ended July 31:

U.S. federal income tax rate.......................................................
Depletion deductions allowed for mining..................................
State income tax expense, net of federal tax expense................
Difference in effective tax rate of foreign subsidiaries..............
Empowerment zone credits........................................................
Valuation allowance increase (decrease) ...................................

Other ..........................................................................................
Effective income tax rate .........................................................

2014

34.0%

(12.2)

2.8

0.9

(0.5)

3.2

(1.9)

26.3%

2013

2012

34.0%
(9.7)
2.9
(0.8)
(0.5)
(7.8)

(1.5)
16.6%

34.0%
(16.5)
2.3

1.2
(1.7)
11.4

(3.6)
27.1%

We added approximately $693,000 to our domestic AMT credit carryforwards in fiscal 2014 based on the amount and
composition of our taxable earnings and various tax attributes. We correspondingly increased the related valuation allowance that
had been established in prior years for the full amount of the deferred tax benefit related to the AMT credits. In the prior year, we
utilized approximately $1,369,000 and correspondingly decreased the related valuation allowance, thereby significantly reducing
our effective income tax rate for fiscal 2013.

The Consolidated Balance Sheets included the following tax effects of cumulative temporary differences as of July 31

(in thousands):

2014

2013

Assets

Liabilities

Assets 1

Liabilities 1
6,868

—

207

264

303

3,386

1,289

3,290

3,733

7,651

3,375

7,332

5,741

— $

Depreciation ......................................... $
Deferred compensation ........................
Postretirement benefits .........................
Allowance for doubtful accounts .........
Deferred marketing expenses ...............
Other assets ..........................................
Accrued expenses .................................
Tax credits ............................................
Amortization.........................................
Inventories ............................................
Depletion ..............................................
Stock-based compensation ...................
Reclamation..........................................
Other assets – foreign ...........................
Valuation allowance .............................
Total deferred taxes............................ $
$
1 We identified an error in the amounts previously disclosed in this footnote in fiscal 2013 related to deferred taxes
of our United Kingdom subsidiary. The fiscal 2013 amounts reported as Other assets - foreign and Valuation allowance
were both overstated by $1,494,000 as previously reported and have been revised in the table above. The disclosure
error is considered immaterial, individually and in the aggregate, to the previously reported consolidated financial
statements as of and for the year ended July 31, 2013.

—
248
141
930
(3,973)
14,161

199
241
640
(3,205)
13,886

488
—
—
—
—
8,143

—
—
—
—
7,736

2,692

442

229

356

503

453

—

As of July 31, 2014, we had a total of approximately $3,973,000 for AMT credit and foreign net operating loss
carryforwards, which can be carried forward indefinitely or until utilized. A number of factors determine whether or not we will
be able to utilize these tax attributes. For example, certain factors, such as depletion and the cost of fuel used in our manufacturing
process, have a significant impact on our ability to use the deferred tax benefit related to our AMT credit carryforwards. In
determining whether a valuation allowance is warranted, we take into account such factors as prior earnings history, expected

future earnings and other factors that could affect the realization of deferred tax assets. We believe it is more likely than not that
we will not realize a benefit from the carryforwards; therefore, a valuation allowance has been established for the full amount of
the deferred tax benefit related to the AMT credits and the foreign net operating loss.

Our foreign subsidiary in the United Kingdom has not generated any untaxed foreign income, therefore we have not

provided for any related income taxes.

As of July 31, 2014, we had no liability for unrecognized tax benefits (“UTBs”) based on tax positions related to the
current and prior fiscal years. Reconciliations of the beginning and ending amount of UTBs were as follows for the years ended
July 31 (in thousands):

2014

2013

2012

Gross balance – beginning of year...................................
Gross decreases - tax positions from prior years .............
Gross balance – end of year .......................................... $ — $

273
(273)

273

—

273

—

273

We classify interest and penalty accruals related to UTBs as income tax expense. During fiscal 2014, we recognized no

interest and penalties and we had accrued no accrual for the payment of interest and penalties.

We are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. Our federal
income tax returns for the fiscal years ended July 31, 2011, 2012 and 2013 remain open and are currently under examination.
Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from three to five years. The state impact of any
federal income tax changes remains subject to examination by various states for a period of up to one year after formal notification
to the states. There are no material open or unsettled state, local or foreign income tax audits. We believe our accrual for tax
liabilities is adequate for all open audit years.

NOTE 8 – STOCKHOLDERS’ EQUITY

Common Stock

Our authorized capital stock at July 31, 2014 and 2013 consisted of 15,000,000 shares of Common Stock, 7,000,000
shares of Class B Stock and 30,000,000 shares of Class A Common Stock, each with a par value of $.10 per share. There are no
Class A Common Stock shares currently outstanding.

The Common Stock and Class B Stock are equal, on a per share basis, in all respects except as to voting rights, conversion
rights, cash dividends and stock splits or stock dividends. The Class A Common Stock is equal, on a per share basis, in all respects,
to the Common Stock except as to voting rights and stock splits or stock dividends. In the case of voting rights, Common Stock
is entitled to one vote per share and Class B Stock is entitled to ten votes per share, while Class A Common Stock generally has
no voting rights. Common Stock has no conversion rights and Class A Common Stock has no conversion rights. Class B Stock is
convertible on a share-by-share basis into Common Stock at any time and is subject to mandatory conversion under certain
circumstances.

Common Stock is entitled to cash dividends, as and when declared or paid, equal to at least 133.33% on a per share basis
of the cash dividend paid on Class B Stock. Class A Common Stock is entitled to cash dividends on a per share basis equal to the
cash dividend on Common Stock. Additionally, while shares of Common Stock, Class A Common Stock and Class B Stock are
outstanding, the sum of the per share cash dividend paid on shares of Common Stock and Class A Common Stock, must be equal
to at least 133.33% of the sum of the per share cash dividend paid on Class B Stock and Class A Common Stock. See Note 5 of
the Notes to the Consolidated Financial Statements regarding dividend restrictions provided in our debt agreements.

Shares of Common Stock, Class A Common Stock and Class B Stock are equal in respect of all rights to dividends (other
than cash) and distributions in the form of stock or other property (including stock dividends and split-ups) in each case in the
same ratio except in the case of a Special Stock Dividend. A Special Stock Dividend, which can be issued only once, is either a
dividend of one share of Class A Common Stock for each share of Common Stock and Class B Stock outstanding or a recapitalization,
in which half of each outstanding share of Common Stock and Class B Stock would be converted into a half share of Class A
Common Stock.

Our Board of Directors has authorized in the aggregate the repurchase of 3,666,771 shares of the Company stock since
fiscal 1991. As of July 31, 2014, 3,014,917 shares of Common Stock and 342,241 shares of Class B Stock have been repurchased

under the Board approved repurchase authorizations. Common Stock was repurchased by other transactions authorized by
management prior to the adoption of the Board’s repurchase authorizations.

Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated other comprehensive income by component as of July 31,

2014 (in thousands):

Balance as of July 31, 2013.................................. $
Other comprehensive income (loss) before
reclassifications, net of tax ...................................
Amounts reclassified from accumulated other
comprehensive income, net of tax........................
Net current-period other comprehensive income
(loss), net of tax ....................................................
Balance as of July 31, 2014 ................................ $

Unrealized
Gain on
Marketable
Securities

Pension and
Postretirement
Health
Benefits

Cumulative
Translation
Adjustment

Total
Accumulated
Other
Comprehensive
Income

(5,608)

487

(5,035)

—

28
114

(3,266)

242 a)

(3,024)
(8,632)

(232)

—

(232)
255

(3,470)

242

(3,228)
(8,263)

a) Amount is net of tax expense of $148,000. Amounts are included in the components of net periodic benefit cost for the pension
and postretirement health plans. See Note 10 of the Notes to the Consolidated Financial Statements for further information.

NOTE 9 – STOCK-BASED COMPENSATION

We determined the fair value of stock options and restricted stock issued under our long term incentive plans as of the
grant date. The fair value of restricted stock was determined by the closing market price of our Common Stock on the date of grant
multiplied by the number of shares granted. The fair value of the stock options was estimated on the date of the grant using a
Black-Scholes option valuation model that used various assumptions. The risk free interest rate was based on the U.S. Treasury
yield curve in effect at the time of grant. Expected life (estimated period of time outstanding) of a grant was determined by reference
to the vesting schedule, past exercise behavior and comparison with other reporting companies. The dividend rate at the date of
grant was used as the best estimate of future dividends. Expected volatility was determined by calculating the standard deviation
of our stock price for the five years immediately prior to the grant date. This period of time closely resembles the expected term.
All stock options issued under our plans have an exercise price equal to the closing market price of our Common Stock on the
date of grant. All options currently outstanding have a term of ten years.

STOCK OPTIONS

Our 1995 Long Term Incentive Plan (“1995 Plan”) provided for grants of both incentive and non-qualified stock options
and restricted stock. Stock options granted under the 1995 Plan generally vest 25% two years after the grant date and in each of
the three following anniversaries of the grant date. All shares of stock issued upon option exercises under this plan were from
authorized but unissued stock; all shares of restricted stock issued were from treasury stock. All remaining outstanding options
were exercised during fiscal 2014 and there were no shares available for future grants under this plan as of July 31, 2014.

The Oil-Dri Corporation of America 2006 Long Term Incentive Plan (“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 937,500. Stock options have been granted to our outside directors with a vesting
period of one year and stock options granted to employees generally vest 25% two years after the grant date and in each of the
three following anniversaries of the grant date. In addition, shares of restricted stock have been issued under the 2006 Plan as
described in the restricted stock section below. As of July 31, 2014, there were 552,304 shares available for future grants under
this plan.

The Oil-Dri Corporation of America Outside Director Stock Plan (the “Directors’ Plan”) provided for grants of stock
options to directors. Stock options have been granted to our directors with a one year vesting period. All remaining outstanding

options were exercised during fiscal 2014 and there were no shares available for future grants under this plan as of July 31, 2014.
All shares of stock issued under the Directors’ Plan were from treasury stock.

A summary of stock option transactions under the plans is shown below.

Options exercisable at July 31, 2011 ..................................
Options non-vested at July 31, 2011...................................
Options outstanding at July 31, 2011 ...............................
Exercised .....................................................................
Options outstanding and exercisable at July 31, 2012........
Exercised .....................................................................
Options outstanding and exercisable at July 31, 2013........
Exercised.....................................................................
Forfeited .....................................................................
Options outstanding and exercisable at July 31, 2014...

Number of
Shares
(in thousands)

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term
(Years)

Aggregate
Intrinsic
Value
(in thousands)

184

189
$
(42) $
147
$
(87) $
60
$
(8) $
(8) $
$
44

10.94

17.00

11.10

8.34

11.89

10.25

14.25
12.47
9.43
15.43

2.8

2.2

2.3

1.9

$
$

1,793

1,882

515

1,473

1,385

1,059
151

611

The amount of cash received from the exercise of options during the fiscal year ended July 31, 2014 was approximately
$93,000 and the related tax benefit was approximately $39,000. The amount of cash received from the exercise of options during
the fiscal year ended July 31, 2013 was approximately $2,271,000 and the related tax benefit was approximately $613,000. The
amount of cash received from the exercise of options during the fiscal year ended July 31, 2012 was approximately $866,000 and
the related tax benefit was approximately $234,000.

The following table summarizes information related to stock options outstanding and exercisable at July 31, 2014. All

outstanding stock options were exercisable as of July 31, 2014.

Options Outstanding and Exercisable by Price Range as of July 31, 2014

Range of Exercise Prices

13.51

15.01

16.51

13.51

15.00

16.50

17.00

Outstanding
and
Exercisable
(in thousands)

Weighted Average
Remaining
Contractual Life
(Years)

Weighted
Average
Exercise Price

1.9

1.6

2.3

1.9

14.82

15.37

17.00

15.43

We recognized the related compensation expense over the period from the date of grant to the date when the award is no
longer contingent on the employee providing additional service to us. We recognized no stock-based compensation expense related
to stock options during fiscal years 2014 and 2013 and recognized $4,000 expense during fiscal 2012, net of related tax effect.

As of July 31, 2014, 2013 and 2012 we had no unamortized expense associated with outstanding stock options.

RESTRICTED STOCK

All of our non-vested restricted stock as of July 31, 2014 was issued under the 2006 Plan with vesting periods from two

to five years.

A summary of restricted stock transactions under the plans is shown below.

Number of
Shares
(in thousands)

Weighted
Average
Grant Date
Fair Value

Weighted
Average
Remaining
Contractual
Term
(Years)

Unamortized
Expense
(in thousands)

Non-vested restricted stock outstanding at July 31, 2011 ......
Granted............................................................................
Vested..............................................................................
Forfeited ..........................................................................
Non-vested restricted stock outstanding at July 31, 2012 ......
Granted............................................................................
Vested..............................................................................
Forfeited ..........................................................................
Non-vested restricted stock outstanding at July 31, 2013 ......
Granted ..........................................................................
Vested..............................................................................
Forfeited .........................................................................
Non-vested restricted stock outstanding at July 31, 2014.

139

28
$
(30) $
(5) $
$

132

20
$
(34) $
(1) $
$
117
$
51
(40) $
(6) $
$

122

21.54

20.95

20.67

19.61

21.68

25.03

21.75

20.60

22.24
34.18
21.50
25.41

27.31

4.0

3.1

2.1

2.4

2,446

2,214

1,824

2,226

We recognized stock-based compensation related to restricted stock of $880,000, $631,000 and $519,000, net of

related tax effect, in fiscal 2014, 2013 and 2012, respectively. The total restricted stock compensation related tax benefit was
$309,000, $233,000 and $201,000 in fiscal 2014, 2013 and 2012, respectively.

NOTE 10 – PENSION AND OTHER POSTRETIREMENT BENEFITS

The Oil-Dri Corporation of American Pension Plan (“Pension Plan”) is a defined benefit pension plan for eligible salaried
and hourly employees. Pension benefits are based on a formula of years of credited service and levels of compensation or stated
amounts for each year of credited service.

We also provide a postretirement health benefits plan to domestic salaried employees who meet specific age, participation
and length of service requirements at the time of retirement. Eligible employees may elect to continue their health care coverage
under the Oil-Dri Corporation of America Employee Benefits Plan until the date certain criteria are met, including attaining the
age of Medicare eligibility. We have the right to modify or terminate the postretirement health benefit plan at any time.

We also maintain a 401(k) savings plan under which we match a portion of employee contributions. This plan is available
to essentially all domestic employees following a specific number of days of employment. Our contributions to this plan, and to
similar plans maintained by our foreign subsidiaries, were $814,000, $708,000 and $673,000 for the fiscal years ended July 31,
2014, 2013 and 2012, respectively.

Obligations and Funded Status

The following tables provide a reconciliation of changes in the plans’ benefit obligations, assets’ fair values and funded

status for the fiscal years ended July 31 (in thousands):

Pension Benefits

Postretirement Health
Benefits

2014

2013

2014

2013

36,866

41,839

2,441

2,585

Change in benefit obligation:
Benefit obligation, beginning of year..........................................
Service cost..................................................................................
Interest cost..................................................................................
Actuarial loss (gain) ....................................................................
Plan amendments.........................................................................
Benefits paid................................................................................
Benefit obligation, end of year ....................................................

1,425

1,761

5,379

—
(1,064)
44,367

1,751

1,544
(7,324)
—
(944)
36,866

Change in plan assets:
Fair value of plan assets, beginning of year ................................
Actual return on plan assets.........................................................
Employer contribution.................................................................
Benefits paid................................................................................
Fair value of plan assets, end of year ..........................................
Funded status, recorded in Consolidated Balance Sheets .....

22,887

1,938

1,043
(1,064)
24,804
$ (19,563)

20,108

2,514

1,209
(944)
22,887
$ (13,979)

111

110

114

—
(6)
2,770

—

6
(6)
—
(2,770)

136

96
(285)
(70)
(21)
2,441

—

21
(21)
—
(2,441)

The accumulated benefit obligation for the Pension Plan was $37,813,000 as of July 31, 2014 and $31,841,000 as of

July 31, 2013.

The following table shows amounts recognized in the Consolidated Balance Sheets as of July 31 (in thousands):

Pension Benefits

Postretirement Health
Benefits

2014

2013

2014

2013

Deferred income taxes.................................................................
Other current liabilities................................................................
Other noncurrent liabilities..........................................................
Accumulated other comprehensive income –net of tax:

6,634

$
— $

$
$ (19,563)

4,843

$
— $
$

$ (13,979)

1,017
(60)
(2,710)

898
(58)
(2,383)

Net actuarial loss ..................................................................
Prior service cost (income)...................................................
Net obligation at transition...................................................

$
$
$

8,156
$
15
$
— $

$
5,172
$
24
— $

500
$
(39)
$
— $

445
(43)
10

Benefit Costs and Amortizations

The following table shows the components of the net periodic pension and postretirement health benefit costs for the

fiscal years ended July 31 (in thousands):

Pension Cost

Postretirement Health Benefit
Cost

2014

2013

2012

2014

2013

2012

Service cost......................................................
Interest cost......................................................
Expected return on plan assets ........................
Amortization of:

Net transition obligation...........................
Prior service costs (income) .....................
Other actuarial loss...................................
Net periodic benefit cost................................

1,425

1,751

1,324

1,761

(1,715)

1,544
(1,510)

1,617
(1,480)

—

343

—

884

—

317

111

110

—

16
(6)
24

136

—

104

105

—

1,827

2,684

1,793

255

300

254

The following table shows amounts, net of tax, that are recognized in other comprehensive income for the fiscal years

ended July 31 (in thousands):

Net actuarial loss (gain)...........................................................
Prior service cost establishment due to plan amendments ......
Amortization of:

Pension Benefits

2014

$ 3,196

—

2013
$ (5,164)
—

Prior service (cost) income...............................................
Net transition obligation...................................................
Amortization of actuarial loss ..........................................
Total recognized in other comprehensive loss (income).....

(8)
—
(213)
$ 2,975

(9)
—
(548)
$ (5,721)

Postretirement
Health Benefits

2014

2013

—

(177)
(43)

4
(10)
(15)
49

—
(9)
(33)
(262)

The following table shows amortization amounts, net of tax, expected to be recognized in fiscal 2015 in accumulated

other comprehensive income (in thousands):

Amortization of:

Pension
Benefits

Postretirement
Health Benefits

Net actuarial loss................................................................
Prior service cost (income) ................................................
Total to be recognized as other comprehensive loss............

372
6
378

23
(4)
19

Cash Flows

We have funded the Pension Plan based upon actuarially determined contributions that take into account the amount
deductible for income tax purposes, the normal cost and the minimum contribution required and the maximum contribution allowed
under applicable regulations. We expect to contribute approximately $1,856,000 in fiscal 2015.

The postretirement health plan is an unfunded plan. Our policy is to pay insurance premiums and claims from our assets.

The following table shows the estimated future benefit payments (in thousands):

2015..................
$
2016..................
$
2017..................
$
2018..................
$
2019..................
$
2020-24............. $

Pension
Benefits

Postretirement
Health Benefits

1,208
1,240
1,327
1,460
1,543

9,319

$
$
$
$
$

60
87
106
116
139

1,007

Assumptions

Our pension benefit and postretirement health benefit obligations and the related effects on operations are calculated
using actuarial models. Critical assumptions that are important elements of plan expenses and asset/liability measurements include
discount rate and expected return on assets for the Pension Plan and health care cost trend for the postretirement health plan. We
evaluate these critical assumptions at least annually. Other assumptions involving demographic factors such as retirement age,
mortality and turnover are evaluated periodically and are updated to reflect our experience and to meet regulatory requirements.
Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. The assumptions
used in the previous calculations were as follows:

Discount rate for net periodic benefit costs ............................................
Discount rate for year-end obligations....................................................
Rate of increase in compensation levels for net periodic benefit costs ..
Rate of increase in compensation levels for year-end obligations..........
Long-term expected rate of return on assets...........................................

Pension Benefits
2014
2013
4.80%
3.75%
4.28%
4.80%
3.50%
3.50%
3.50%
3.50%
7.50%
7.50%

Postretirement Health
Benefits

2014
4.80%
3.87%
—
—
—

2013
3.75%
4.80%
—
—
—

The discount rate for the fiscal 2014 obligation was based on the Citigroup Pension Discount Curve (“CPDC”) to determine
separately for the Pension Plan and the postretirement health plan, the single equivalent rate that would yield the same present
value as the specific plan’s expected cash flows. In fiscal 2013, the discount rate for both plans was based on the Citigroup Pension
Liability Index (“CPLI”), which also provided a single equivalent rate but did not consider each plan's unique expected cash flow
stream. While the CPLI is considered an acceptable basis to determine discount rates, we believe the more plan-specific rates
identified using the CPDC provides a better representation of each plan's obligations and costs.

Our expected rate of return on Pension Plan assets is determined by our asset allocation, our historical long-term investment
performance, our estimate of future long-term returns by asset class (using input from our actuaries, investment managers and
investment advisors), and long-term inflation assumptions.

For fiscal 2014, the medical cost trend assumption was 8.0% . The graded trend rate is expected to decrease to an ultimate

rate of 5.0% in fiscal 2024.

The following table reflects the effect on postretirement health costs and accruals of a one-percentage point change in

the assumed health care cost trend in the fiscal year ended July 31, 2014 (in thousands):

Effect on total service and interest cost ............................
Effect on accumulated postretirement benefit obligation.

One-Percentage Point
Increase
$33
$337

One-Percentage
Point Decrease
$(28)
$(293)

Pension Plan Assets

The investment objective for the Pension Plan assets is to optimize long-term return at a moderate level of risk in order
to secure the benefit obligations to participants at a reasonable cost. To reach this goal, our investment structure includes various
asset classes, asset allocations and investment management styles that, in total, have a reasonable likelihood of producing a
sufficient level of overall diversification that balances expected return with expected risk over the long-term. The Pension Plan
does not invest directly in Company stock.

We measure and monitor the plan’s asset investment performance and the allocation of assets through quarterly investment
portfolio reviews. Investment performance is measured by absolute returns, returns relative to benchmark indices and any other
appropriate basis of comparison. The targeted allocation percentages of plan assets is shown below for fiscal 2015 and the actual
allocation as of July 31:

Asset Allocation
Cash and accrued income ..............
Fixed income .................................
Equity.............................................

Target
fiscal 2015

38%

60%

2014

27%

67%

2013

13%

25%

62%

The following table sets forth by level, within the fair value hierarchy, the Pension Plan's assets carried at fair value as

of July 31 (in thousands):

Fair Value At July 31, 2014

Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)

Total

Significant
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Asset Class
Cash and Cash Equivalents(a)..................................................
Equity securities(b):

U.S. companies...................................................................
International companies .....................................................

Equity securities - international mutual funds:
Developed market(c)............................................................
Emerging markets(d)............................................................
Commodities(e)........................................................................
Fixed Income:

U.S. Treasuries ..................................................................
Corporate bonds(f) ..............................................................
Floating rate debt(k)............................................................
Government sponsored entities(h) ......................................
Multi-strategy bond fund(i) ................................................
Other(j).....................................................................................
Total .......................................................................................

1,123

— $

10,168

2,698

2,005

351
383

3,020

1,911

838
376

856
1,075
24,804

10,168

2,698

—

—
—

—

—
—

—
—
13,989

—

2,005

351
383

3,020

1,911

838
376

856
1,075
10,815

—

—
—

—

—
—

—
—
—

Fair Value At July 31, 2013

Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)

Total

Significant
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Asset Class
Cash and Cash Equivalents(a)..................................................
Equity securities(b):

U.S. companies...................................................................
International companies .....................................................

U.S. Treasuries ..................................................................
Corporate bonds(f) ..............................................................
Emerging markets(g)...........................................................
Government sponsored entities(h) ......................................
Multi-strategy bond fund(i) ................................................
Other(j).....................................................................................
Total .......................................................................................

2,469

— $

8,962

1,901

1,741

567
379

2,694

1,998
666

320
624

8,933

1,901

—

—
7

—

—
—

566
22,887

—
13,310

—

1,741

567
372

2,694

1,998
666

320
624

566
9,577

—

—
—

—

—
—

(a) Cash and cash equivalents consists of highly liquid investments which are traded in active markets.
(b) This class represents equities traded on regulated exchanges, as well as funds that invest in a portfolio of such stocks.
(c) These mutual funds seek long-term capital growth by investing at least 80% of their assets in stocks of non- U.S. companies

that are primarily in developed markets, however the fund allows up to 20% to be invested in emerging markets.

(d) These mutual funds seek long-term capital growth by investing at least 80% of their assets in stocks of companies located

in Asia, excluding Japan.

(e) The majority of the investments in this class seek maximum real return by investing primarily in commodity-linked
derivative instruments. Assets not invested in commodity-linked instruments may be invested in inflation-indexed
securities and other fixed income instruments.

(f) This class includes bonds of U.S. and non-U.S. issuers from diverse industries.
(g) This class invests at least 80% of its net assets, plus any borrowing for investment purposes, directly in, or in derivative
instruments that provide exposure to, emerging market bonds and other debt instruments denominated in the local currency
of issue.

(h) This class represents a beneficial ownership interest in a pool of single-family residential mortgage loans. These

investments are not backed by the full faith and credit of the United States government.

(i) This class invests at least 80% of its net assets in bonds and other fixed income instruments issued by governmental or
private-sector entities. More than 50% of its net assets are invested in mortgage-backed securities. The fund may invest
up to 33 1/3% of its net assets in high-yield bonds, bank loans and assignments and credit default swaps.

(j) This class seek long-term positive returns by employing a number of arbitrage and alternative investment strategies. The
portfolio of instruments may include equities, convertible securities, debt securities, warrants, options, swaps, future
contracts, forwards or other types of derivative instruments.

(k) This fund invests at least 80% of its net assets in first- and second-lien senior floating rate debt securities that are generally
rated below investment grade. The fund may invest up to 20% of its net assets in debt securities that are lower than a
senior claim on collateral and up to 20% of its net assets in senior loans made to non-U.S. borrowers. The fund may also
include derivative instruments.

NOTE 11 – DEFERRED COMPENSATION

Oil-Dri's deferred compensation plans permit directors and certain management employees to defer portions of their
compensation and to earn interest on the deferred amounts. Participants have deferred $542,000 into these plans in each of fiscal
years 2014 and 2013. We recorded $431,000 and $412,000 of interest expense associated with these plans in fiscal years 2014
and 2013, respectively. Payments to participants were $418,000 and $465,000 in fiscal 2014 and 2013, respectively, and the total
liability recorded for deferred compensation was $8,161,000 and $7,813,000 at July 31, 2014 and 2013, respectively.

The Oil-Dri Corporation of America Annual Incentive Plan provides certain executives with the opportunity to receive
a deferred executive bonus award if certain financial goals are met. Financial targets under the provisions of the plan were not
achieved to merit an award for the fiscal year ended July 31, 2014. A total of $877,000 was awarded to certain executives for the
fiscal year ended July 31, 2013, which will vest and accrue interest over a three-year period.

Both of the above deferred compensation plans are unfunded. We fund these benefits when payments are made, and the
timing and amount of the payments are determined according to the plans' provisions and, for certain plans, according to individual
employee agreements.

The Oil-Dri Corporation of America Supplemental Executive Retirement Plan provides certain retired participants in the
Pension Plan with the amount of benefits that would have been provided under the Pension Plan but for: (1) the limitations on
benefits imposed by Section 415 of the Internal Revenue Code (“Code”), and/or (2) the limitation on compensation for purposes
of calculating benefits under the Pension Plan imposed by Section 401(a)(17) of the Code. The SERP liability is actuarially
determined at the end of each fiscal year using assumptions similar to those used for the Pension Plan, see Note 10 of the Notes
to the Consolidated Financial Statements. The SERP liability recorded at July 31, 2014 was $1,255,000, which was higher than
the $1,039,000 liability recorded at July 31, 2013 due primarily to a decrease in the discount rate used to actuarially value the
obligation at July 31, 2014. As a result of the higher SERP liability, we recorded approximately $215,000 of expense for the fiscal
year ended July 31, 2014, compared to $202,000 of income for the fiscal year ended July 31, 2013. The SERP is unfunded and
we will fund benefits when payments are made.

NOTE 12 – OTHER CONTINGENCIES

We are party to various legal actions from time to time that are ordinary in nature and incidental to the operation of our
business. 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 or financial condition.

NOTE 13 – LEASES

Our mining operations are conducted on leased or owned property. These leases generally provide us with the right to
mine as long as we continue to pay a minimum monthly rental, which is applied against the per ton royalty when the property is
mined. We also lease certain offices and production facilities. In addition, we lease vehicles, railcars, mining property and equipment,
warehouse space, data processing equipment, and office equipment. In most cases, we expect that, in the normal course of business,
leases will be renewed or replaced by other leases.

The following is a schedule by year of future minimum rental requirements under operating leases that have initial or

remaining non-cancelable lease terms in excess of one year as of July 31, 2014 (in thousands):

2015........................... $
2016........................... $
2017........................... $
2018........................... $
2019........................... $
Later years................. $

1,527
1,263
1,200
1,046
323
535

The following schedule shows the composition of total rental expense for all operating leases, including those with terms

of one month or less which were not renewed, for the fiscal years ended July 31 (in thousands):

Vehicles and Railcars.......................
Office facilities.................................
Warehouse facilities.........................
Mining properties:

Minimum......................................
Contingent ....................................
Other ................................................

2014

2013

2012

$ 1,818

$ 1,885

$ 2,029

890

235

292

162

108

844

229

320

120

133

848

252

123

302

141

$ 3,505

$ 3,531

$ 3,695

Contingent mining royalty payments are determined based on the tons of raw clay mined.

We have one capital lease for three pieces of equipment used at our manufacturing facilities. All scheduled lease payments
have been made as of July 31, 2014. The remaining obligation of $1,330,000, which is included in Other Accrued Expenses on
the Consolidated Balance Sheets, represents the purchase option price we intend to pay to obtain title to the equipment in fiscal
2015. These assets under capital lease are included on the Consolidated Balance Sheets in Machinery and Equipment for $1,523,000,
and in Accumulated Depreciation and Amortization for $32,000. Depreciation expense related to these assets is included in Cost
of Sales on the Consolidated Statements of Operations.

NOTE 14 – OTHER CASH FLOW INFORMATION

Cash payments for interest and income taxes were as follows for the fiscal years ended July 31 (in thousands):

2014

Interest ..........................
Income taxes .................

$ 1,078

$ 3,022

2013

$ 1,351

$ 5,064

2012

$ 1,607

993

NOTE 15 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

A summary of selected information for fiscal years 2014 and 2013 is as follows (in thousands, except for per share

amounts):

Fiscal 2014 Quarter Ended

October 31

January 31

April 30

July 31

Fiscal 2014

Net Sales.......................................................
Gross Profit ..................................................
Net Income ...................................................
Net Income Per Share

Basic Common ......................................
Basic Class B Common.........................
Diluted...................................................

63,546

16,500

2,887

0.44

0.33

0.41

Dividends Per Share

Common................................................ $
$
Class B ..................................................

0.1900

0.1425

Common Stock Price Range

High.......................................................
Low .......................................................

36.80

30.35

69,305

16,893

4,281

0.65

0.49

0.60

0.1900

0.1425

41.74

32.90

67,417

13,884

722

0.11

0.08

0.10

0.1900

0.1425

36.27

31.24

Fiscal 2013 Quarter Ended

October 31

January 31

April 30

64,152

16,891

3,251

0.50

0.37

0.46

Basic Common ......................................
Basic Class B Common.........................
Diluted...................................................

61,417

17,231

4,452

0.69

0.52

0.64

Dividends Per Share

Common................................................ $
$
Class B ..................................................

0.1800

0.1350

Common Stock Price Range

High.......................................................
Low .......................................................

$
$

23.77
21.26

$
$

61,122

16,269

2,146

0.33

0.25

0.31

0.3600

0.2700

30.34
20.82

$
$

NOTE 16 – SUBSEQUENT EVENTS

266,313

59,650

8,356

1.27

0.96

1.17

0.7700

0.5775

66,045

12,373

466

0.07

0.05

0.07

0.2000

0.1500

34.90

28.71

July 31

Fiscal 2013

63,892

16,108

4,737

0.73

0.55

0.67

250,583

66,499

14,586

2.25

1.69

2.07

0.7300

0.5475

— $

0.1900

0.1425

28.52
23.92

$
$

32.40
25.30

Management has evaluated subsequent events through the date the financial statements were issued. Based on our
evaluation no events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the
Notes to the Consolidated Financial Statements.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Exchange Act Rules 13a-15f. Our internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with accounting principles generally accepted in the United States of America.

Under the supervision and with the participation of our management, including our principal executive officer and principal
financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the
framework in Internal Control - Integrated Framework issued by the Committee Sponsoring Organizations of the Treadway
Commission (COSO) published in 1992. Based on our assessment, our management concluded that our internal control over
financial reporting was effective as of July 31, 2014.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our internal controls over financial reporting as of July 31, 2014 have been audited by Grant Thornton LLP, an independent

registered public accounting firm, as stated in their report which appears on the next page of this Annual Report on Form 10-K.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Oil-Dri Corporation of America

We have audited the accompanying consolidated balance sheet of Oil-Dri Corporation of America and Subsidiaries (collectively
the Company) as of July 31, 2014, and the related consolidated statement of operations, comprehensive income, stockholders’
equity and cash flows for the year then ended. We also have audited the Company’s internal control over financial reporting as of
July 31, 2014, based on criteria established in the 1992 Internal Control - Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial
statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over
financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement and whether effective internal control over financial reporting was maintained in all material
respects. Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing
such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for
our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of Oil-Dri Corporation of America and Subsidiaries as of July 31, 2014, and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of July 31, 2014, based on
criteria established in the 1992 Internal Control-Integrated Framework issued by COSO.

/s/ GRANT THORNTON LLP

Chicago, Illinois
October 10, 2014

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Oil-Dri Corporation of America:

In our opinion, the consolidated balance sheet as of July 31, 2013 and the related consolidated statements of operations,
comprehensive income, stockholders’ equity, and cash flows for each of the two years in the period ended July 31, 2013 present
fairly, in all material respects, the financial position of Oil-Dri Corporation of America and its subsidiaries at July 31, 2013 and
the results of their operations and their cash flows for each of the two years in the period ended July 31, 2013, in conformity with
accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement
schedule for each of the two years in the period ended July 31, 2013 presents fairly, in all material respects, the information set
forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial
statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

October 11, 2013

ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

ITEM 9A – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this Form 10-K. The controls evaluation was conducted under the supervision
and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).
Based upon the controls evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report,
our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed
in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the SEC, and
that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow
timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Management’s Report on Internal Control Over Financial Reporting is set forth in Part II, Item 8 of this Annual Report

on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recently completed
fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including the CEO and CFO, do not expect that our disclosure controls and procedures or our internal
control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a
control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to
their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute
assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the
Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and
that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is
based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness
to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration
in the degree of compliance with policies or procedures.

ITEM 9B – OTHER INFORMATION

None.

PART III

ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item (except as set forth below) is contained in Oil-Dri’s Proxy Statement for its 2014
annual meeting of stockholders under the captions “1. Election of Directors,” “Executive Officers,” “Section 16(a) Beneficial
Ownership Reporting Compliance,” “Director Nominations,” “Audit Committee” and “Corporate Governance Matters” and is
incorporated herein by this reference.

The Company has adopted a Code of Ethics and Business Conduct (the “Code”) which applies to all of its directors,
officers (including the Company’s Chief Executive Officer and senior financial officers) and employees. The Code imposes
significant responsibilities on the Chief Executive Officer and the senior financial officers of the Company. The Code, the
Company’s Corporate Governance Guidelines and the charter of its Audit Committee may be viewed on the Company’s website
at www.oildri.com and are available in print to any person upon request to Investor Relations, Oil-Dri Corporation of America,
410 North Michigan Avenue, Suite 400, Chicago, Illinois 60611-4213, telephone (312) 321-1515 or e-mail to info@oildri.com.
Any amendment to, or waiver of, a provision of the Code which applies to the Company’s Chief Executive Officer or senior
financial officers and relates to the elements of a “code of ethics” as defined by the SEC will also be posted on the Company’s
website. As allowed by the “controlled company” exemption to certain NYSE rules, the Company does not have a nominating/
corporate governance committee and its compensation committee does not have a charter.

ITEM 11 – EXECUTIVE COMPENSATION

The information required by this Item is contained in Oil-Dri’s Proxy Statement for its 2014 annual meeting of stockholders
under the captions “Executive Compensation,” “Report of the Compensation Committee of the Board of Directors,” “Director
Compensation,” “Compensation Committee” and “Compensation Committee Interlocks and Insider Participation” and is
incorporated herein by reference.

ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

The information required by this Item is contained in Oil-Dri’s Proxy Statement for its 2014 annual meeting of stockholders
under the captions “Principal Stockholders,” “Security Ownership of Management” and “Equity Compensation Plans” and is
incorporated herein by reference.

ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is contained in Oil-Dri’s Proxy Statement for its 2014 annual meeting of stockholders
under the captions “Certain Relationships and Related Party Transactions” and “Director Independence” and is incorporated herein
by reference.

ITEM 14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is contained in Oil-Dri’s Proxy Statement for its 2014 annual meeting of stockholders

under the caption “Auditor Fees” and is incorporated herein by reference.

ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

PART IV

(a)(1) The following consolidated financial statements are contained herein.

Consolidated Balance Sheets as of July 31, 2014 and July 31, 2013.

Consolidated Statements of Operations for the fiscal years ended July 31, 2014, July 31, 2013 and July 31,
2012.

Consolidated Statements of Comprehensive Income for the fiscal years ended July 31, 2014, July 31, 2013 and
July 31, 2012.

Consolidated Statements of Stockholders’ Equity for the fiscal years ended July 31, 2014, July 31, 2013 and
July 31, 2012.

Consolidated Statements of Cash Flows for the fiscal years ended July 31, 2014, July 31, 2013 and July 31,
2012.

Notes to Consolidated Financial Statements.

Report of Independent Registered Public Accounting Firm.

(a)(2) The following financial statement schedule is contained herein:

Schedule to Financial Statements, as follows:

Schedule II - Valuation and Qualifying Accounts, years ended July 31, 2014, July 31, 2013 and July 31, 2012.

All other schedules are omitted because they are inapplicable, not required under the instructions or the
information is included in the consolidated financial statements or notes thereto.

(a)(3) The following documents are exhibits to this Report:

Exhibit

No.
3.1

Certificate of Incorporation of Oil-Dri, as amended.

Description

SEC Document Reference
Incorporated by reference to Exhibit 4.1 to Oil-Dri’s
Registration Statement on Form S-8 (Registration No.
333-57625), filed on June 24, 1998.

3.2

By-Laws of Oil-Dri Corporation of America, as
Amended and Restated on December 5, 2006.

Incorporated by reference to Exhibit 3.1 to Oil-Dri’s (file
No. 001-12622) Current Report on Form 8-K filed on
December 11, 2006.

10.1

10.2

Memorandum of Agreement #1450 “Fresh
Step“™dated as of March 12, 2001 between A&M
Products Manufacturing Company and Oil-Dri
(confidential treatment of certain portions of this
exhibit has been granted).

Incorporated by reference to Exhibit 10(s) to Oil-Dri’s
(File No. 001-12622) Current Report on Form 8-K filed
on May 1, 2001.

First Amendment, dated as of December 13, 2002,
to Memorandum of Agreement #1450 “Fresh
Step”™dated as of March 12, 2001.

Incorporated by reference to Exhibit 10.2 to Oil-Dri’s (File
No. 001-12622) Annual Report on Form 10-K for the
fiscal year ended July 31, 2007.

Exhibit
No.
10.3

10.4

10.5

10.6

10.7

10.8

10.9

Description
Second Amendment, dated as of October 15, 2007,
to Memorandum of Agreement #1450 “Fresh
Step”™ dated as of March 12, 2001.

SEC Document Reference
Incorporated by reference to Exhibit 10.1 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended April 30, 2008.

Exclusive Supply Agreement dated May 19, 1999
between Church & Dwight Co., Inc. and Oil-Dri
(confidential treatment of certain portions of this
exhibit has been granted).

Incorporated by reference to Exhibit (10)(r) to Oil-Dri’s
(File No. 001-12622) Annual Report on Form 10-K for
the fiscal year ended July 31, 1999.

$15,000,000 Credit Agreement, dated January 27,
2006 among the Company, certain subsidiaries of
the Company and Harris N.A.

Incorporated by reference to Exhibit 10.1 to Oil-Dri’s (File
No. 001-12622) Current Report on Form 8-K filed on
February 1, 2006.

First Amendment, dated as of December 19, 2008 to
Credit Agreement dated as of January 27, 2006.

Incorporated by reference to Exhibit 10.1 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended January 31, 2009.

Second Amendment, dated as of December 21, 2011
to Credit Agreement dated as of January 27, 2006.

Incorporated by reference to Exhibit 10 to Oil-Dri’s (File
No. 001-12622) Current Report on Form 8-K filed on
December 28, 2011.

Third Amendment, dated as of June 21, 2012 to
Credit Agreement dated as of January 27, 2006.

Incorporated by reference to Exhibit 10.12 to Oil-Dri’s
(File No. 001-12622) Annual Report on Form 10-K for
the fiscal year ended July 31, 2012.

$15,000,000 Note Agreement dated as of December
16, 2005 among the Company, The Prudential
Insurance Company of America and Prudential
Retirement Insurance and Annuity Company.

Incorporated by reference to Exhibit 10.1 to Oil-Dri’s (File
No. 001-12622) Current Report on Form 8-K filed on
December 22, 2005.

10.10

First Amendment, dated as of July 12, 2006 to Note
Agreement dated as of December 16, 2005.

Incorporated by reference to Exhibit 10.9 to Oil-Dri’s (File
No. 001-12622) Annual Report on Form 10-K for the
fiscal year ended July 31, 2006.

10.11

10.12

10.13

$18,500,000 Note Agreement dated as of November
12, 2010 among Oil-Dri Corporation of America,
The Prudential Insurance Company of America,
Prudential Retirement Insurance and Annuity
Company, Forethought Life Insurance Company,
Physicians Mutual
Insurance Company and
BCBSM, Inc. dba Blue Cross and Blue Shield of
Minnesota.

Incorporated by reference to Exhibit 10.2 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended October 31, 2010.

Description
Compensation Program.*

1987 Executive Deferred

Incorporated by reference to Exhibit (10)(f) to Oil-Dri’s
(File No. 001-12622) Annual Report on Form 10-K for
the fiscal year ended July 31, 1988.

Salary Continuation Agreement dated August 1,
l989 between Richard M. Jaffee and Oil-Dri (“1989
Agreement”).*

Incorporated by reference to Exhibit (10)(g) to Oil-Dri’s
(File No. 001-12622) Annual Report on Form 10-K for
the fiscal year ended July 31, 1989.

10.14

Extension and Amendment, dated October 9, 1998,
to the 1989 Agreement.*

Incorporated by reference to Exhibit 10.12 to Oil-Dri’s
(File No. 001-12622) Annual Report on Form 10-K for
the fiscal year ended July 31, 2006.

Exhibit
No.
10.15

Description
Second Amendment, effective October 31, 2000, to
the 1989 Agreement.*

SEC Document Reference
Incorporated by reference to Exhibit 99.1 to Oil-Dri’s (File
No. 001-12622) Current Report on Form 8-K filed on
November 13, 2000.

10.16

Third Amendment, dated as of January 31, 2006, to
the 1989 Agreement.*

Incorporated by reference to Exhibit 10.1 to Oil-Dri’s (File
No. 001-12622) Current Report on Form 8-K filed on
February 13, 2006.

10.17

Fourth Amendment, dated as of October 14, 2010,
to the 1989 Agreement.*

Incorporated by reference to Exhibit 10.1 to Oil-Dri’s (File
No. 001-12622) Current Report on Form 8-K filed on
October 14, 2010.

10.18

10.19

10.20

10.21

Oil-Dri Corporation
of America Deferred
Compensation Plan, as amended and restated
effective April 1, 2003.*

Incorporated by reference to Exhibit (10)(j)(1) to Oil-Dri’s
(File No. 001-12622) Quarterly Report on Form 10-Q for
the quarter ended April 30, 2003.

First Amendment, effective as of January 1, 2007,
to Oil-Dri Corporation of America Deferred
Compensation Plan, as amended and restated
effective April 1, 2003.*

Incorporated by reference to Exhibit 10.1 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended January 31, 2008.

Second Amendment, effective as of January 1, 2008,
to Oil-Dri Corporation of America Deferred
Compensation Plan, as amended and restated
effective April 1, 2003.*

Incorporated by reference to Exhibit 10.2 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended January 31, 2008.

Oil-Dri Corporation of America 1995 Long-Term
Incentive Plan as amended and restated effective
June 9, 2000.*

Incorporated by reference to Exhibit (10)(k) to Oil-Dri’s
(File No. 001-12622) Annual Report on Form 10-K for
the fiscal year ended July 31, 2000.

10.22

Supplemental Executive Retirement Plan dated
April 1, 2003.*

Incorporated by reference to Exhibit (10)(1) to Oil-Dri’s
(File No. 001-12622) Quarterly Report on Form 10-Q for
the quarter ended April 30, 2003.

10.23

Oil-Dri Corporation of America Outside Director
Stock Plan as amended and restated effective
October 16, 1999.*

Incorporated by reference to Exhibit (10)(n) to Oil-Dri’s
(File No. 001-12622) Annual Report on Form 10-K for
the fiscal year ended July 31, 2000.

10.24

Oil-Dri Corporation of America Annual Incentive
Plan (as amended and restated effective January 1,
2008).*

Incorporated by reference to Exhibit 10.4 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended January 31, 2008.

10.25

10.26

Oil-Dri Corporation of America 2005 Deferred
Compensation Plan (as amended and restated
effective January 1, 2008)*

Incorporated by reference to Exhibit 10.3 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended January 31, 2008.

Oil-Dri Corporation of America 2006 Long Term
Incentive Plan (as amended and restated effective
July 28, 2006)*

Incorporated by reference to Appendix A to Oil-Dri’s (File
No. 001-12622) Definitive Proxy Statement on Schedule
14A filed on November 3, 2006.

Exhibit
No.
10.27

10.28

10.29

10.30

10.31

10.32

10.33

10.34

10.35

Description
First Amendment, effective as of January 1, 2008,
to Oil-Dri Corporation of America 2006 Long Term
Incentive Plan (as amended and restated effective
July 28, 2006)*

SEC Document Reference
Incorporated by reference to Exhibit 10.5 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended January 31, 2008.

Form of Oil-Dri Corporation of America 2006 Long
Term Incentive Plan Employee Stock Option
Agreement for Class A Common Stock.*

Incorporated by reference to Exhibit 10.2 to Oil-Dri’s (file
No. 001-12622) Current Report on Form 8-K filed on
December 11, 2006.

Form of Oil-Dri Corporation of America 2006 Long
Term Incentive Plan Employee Stock Option
Agreement for Common Stock.*

Incorporated by reference to Exhibit 10.3 to Oil-Dri’s (file
No. 001-12622) Current Report on Form 8-K filed on
December 11, 2006.

Form of Oil-Dri Corporation of America 2006 Long
Term Incentive Plan Employee Stock Option
Agreement for Class B Stock.*

Incorporated by reference to Exhibit 10.4 to Oil-Dri’s (file
No. 001-12622) Current Report on Form 8-K filed on
December 11, 2006.

Form of Oil-Dri Corporation of America 2006 Long
Term Incentive Plan Director Stock Option
Agreement for Common Stock.*

Incorporated by reference to Exhibit 10.5 to Oil-Dri’s (file
No. 001-12622) Current Report on Form 8-K filed on
December 11, 2006.

Form of Oil-Dri Corporation of America 2006 Long
Term Incentive Plan Restricted Stock Agreement for
Class A Common Stock.*

Incorporated by reference to Exhibit 10.6 to Oil-Dri’s (file
No. 001-12622) Current Report on Form 8-K filed on
December 11, 2006.

Form of Oil-Dri Corporation of America 2006 Long
Term Incentive Plan Restricted Stock Agreement for
Common Stock.*

Incorporated by reference to Exhibit 10.7 to Oil-Dri’s (file
No. 001-12622) Current Report on Form 8-K filed on
December 11, 2006.

Form of Oil-Dri Corporation of America 2006 Long
Term Incentive Plan Restricted Stock Agreement for
Class B Stock.*

Incorporated by reference to Exhibit 10.8 to Oil-Dri’s (file
No. 001-12622) Current Report on Form 8-K filed on
December 11, 2006.

Letter Agreement, dated as of October 10, 2011,
between Oil-Dri Corporation of America and Steven
Jay Adolph.*

Incorporated by reference to Exhibit 10.1 to Oil-Dri’s (File
No. 001-12622) Quarterly Report on Form 10-Q for the
quarter ended October 31, 2011.

11.1

Statement re: Computation of Net Income Per Share.

Filed herewith.

14.1

Code of Ethics

Available at Oil-Dri’s website at www.oildri.com or in
print upon request to Investor Relations, Oil-Dri
Corporation of America, 410 North Michigan Avenue,
Suite 400, Chicago, IL 60611-4213, telephone (312)
321-1515 or e-mail to info@oildri.com.

21.1

Subsidiaries of Oil-Dri.

23.1

Consent of
Accounting Firm

Independent Registered Public

Filed herewith.

31.1

Certifications pursuant to Rule 13a – 14(a).

Filed herewith.

Exhibit
No.
32.1

Description
Certifications pursuant to Section 1350 of the
Sarbanes-Oxley Act of 2002.

SEC Document Reference

Furnished herewith.

Mine Safety Disclosure

Filed herewith.

101.INS

XBRL Taxonomy Instance Document

Furnished herewith.

101.SCH

XBRL Taxonomy Extension Schema Document

Furnished herewith.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase
Document

Furnished herewith.

101.DEF

XBRL Taxonomy Extension Definition Linkbase
Document

Furnished herewith.

101.LAB

XBRL Taxonomy Extension Labels Linkbase
Document

Furnished herewith.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

Furnished herewith.

Management contract or compensatory plan or arrangement.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Oil-Dri has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

OIL-DRI CORPORATION OF AMERICA
(Registrant)

/s/ Daniel S. Jaffee
Daniel S. Jaffee
President and Chief Executive Officer, Director

Dated: October 10, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons

on behalf of Oil-Dri and in the capacities and on the dates indicated:

/s/ Richard M. Jaffee

October 10, 2014

Richard M. Jaffee

Chairman of the Board of Directors

/s/ Daniel S. Jaffee

October 10, 2014

Daniel S. Jaffee

President and Chief Executive Officer, Director

(Principal Executive Officer)

/s/ Daniel T. Smith

October 10, 2014

Daniel T. Smith

Vice President, Chief Financial Officer

(Principal Financial Officer)

/s/ Paula J. Krystopolski

October 10, 2014

Paula J. Krystopolski

Corporate Controller

(Controller)

/s/ J. Steven Cole

October 10, 2014

J. Steven Cole
Director

/s/ Joseph C. Miller

October 10, 2014

Joseph C. Miller
Vice Chairman of the Board of Directors

/s/ Michael A. Nemeroff

October 10, 2014

Michael A. Nemeroff
Director

/s/ Allan H. Selig

October 10, 2014

Allan H. Selig
Director

/s/ Paul E. Suckow

October 10, 2014

Paul E. Suckow
Director

/s/ Lawrence E. Washow

October 10, 2014

Lawrence E. Washow
Director

SCHEDULE II

OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

Year Ended July 31

2014

2013
(in thousands)

2012

Allowance for doubtful accounts:

Balance, beginning of year...........................
Additions ......................................................
Deductions*..................................................
Balance, end of year .....................................

641

626

607

(3)

707

62
(47)
641

32
(13)
626

* Net of recoveries.

Valuation reserve for income taxes 1:

Balance, beginning of year...........................
Additions charged to expense.......................
Balance, end of year .....................................

$ 3,205

768

$ 3,973

$ 4,061
(856)
$ 3,205

$ 3,106

955

$ 4,061

1 See Note 7 of the Notes to the Consolidated Financial Statements for further discussion of the valuation reserve for income
taxes and the reclassification of fiscal 2013 amounts to properly reflect our foreign deferred tax components.

EXHIBITS

Description

Statement Re: Computation of Net Income Per Share

Subsidiaries of Oil-Dri

Consent of Independent Registered Public Accounting Firm

Certifications by Daniel S. Jaffee, President and Chief Executive Officer and Daniel T. Smith, Vice President and
Chief Financial Officer, required by Rule 13a-14(a)

Exhibit
No.
11.1

21.1

23.1

31.1

32.1

Certifications pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002

Mine Safety Disclosure

101.INS

XBRL Taxonomy Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Labels Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase

Note:

Stockholders may receive copies of the above listed exhibits, without fee, by written request to Investor Relations,
Oil-Dri Corporation of America, 410 North Michigan Avenue, Suite 400, Chicago, Illinois 60611-4213, telephone
(312) 321-1515 or e-mail to info@oildri.com.

EXHIBIT 11.1:

OIL-DRI CORPORATION OF AMERICA
Computation of Net Income Per Share
(in thousands except for per share amounts)

Year Ended July 31,
2013

2012

2014

Net income available to stockholders ................................................................. $ 8,356
(128)
Less: Distributed and undistributed earnings allocated to nonvested stock........
Earnings available to common shareholders....................................................... $ 8,228

$14,586
(216)
$14,370

$ 6,098
(92)
$ 6,006

Shares Calculation

Average shares outstanding - Basic Common.....................................................
Average shares outstanding - Basic Class B Common .......................................
Potential Common Stock relating to stock options .............................................
Average shares outstanding - Assuming dilution................................................

4,981

2,001

22
7,004

4,909

1,970

48
6,927

5,063

1,934

65
7,062

Net Income Per Share: Basic Common............................................................ $
Net Income Per Share: Basic Class B Common .............................................. $
Net Income Per Share: Diluted ........................................................................ $

1.27

0.96

1.17

$ 2.25

$ 0.92

$ 1.69

$ 0.70

$ 2.07

$ 0.85

EXHIBIT 21.1:

SUBSIDIARIES OF OIL-DRI

Subsidiary
Amlan Trading (Shenzhen) Company, Ltd.
Blue Mountain Production Company
Mounds Management, Inc.
Mounds Production Company, LLC
ODC Acquisition Corp.
Oil-Dri Canada ULC
Oil-Dri Corporation of Georgia
Amlan International
Oil-Dri Production Company
Oil-Dri SARL
Oil-Dri (U.K.) Limited
Taft Production Company

State or Country
of Organization
China
Mississippi
Delaware
Illinois
Illinois
Canada
Georgia
Nevada
Mississippi
Switzerland
United Kingdom
Delaware

EXHIBIT 23.1:

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated October 10, 2014, with respect to the consolidated financial statements, schedule, and

internal control over financial reporting incorporated by reference in the Annual Report of Oil-Dri Corporation of America on
Form 10-K for the year ended July 31, 2014. We hereby consent to the incorporation by reference of said report in the
Registration Statements of Oil-Dri Corporation of America on Form S-8 (File No. 333-139550).

/s/ GRANT THORNTON LLP

Chicago, Illinois
October 10, 2014

EXHIBIT 23.1 (CONTINUED):

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form

(No. 333-139550) of
Oil-Dri Corporation of America of our report dated October 11, 2013 relating to the consolidated financial statements and financial
statement schedule which appears in this Form

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois
October 10, 2014

EXHIBIT 31.1:

CERTIFICATIONS PURSUANT TO RULE 13A -14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED
Certification of Principal Executive Officer
(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Daniel S. Jaffee, certify that:

I have reviewed this Annual Report on Form 10-K of Oil-Dri Corporation of America (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize
and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role

in the registrant's internal control over financial reporting.

Date:
By:

October 10, 2014
/s/ Daniel S. Jaffee
Daniel S. Jaffee

President and Chief Executive Officer

EXHIBIT 31.1 (CONTINUED):

Certification of a Principal Financial Officer
(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Daniel T. Smith, certify that:

I have reviewed this Annual Report on Form 10-K of Oil-Dri Corporation of America (the “registrant”);

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role

in the registrant's internal control over financial reporting.

Date:
By:

October 10, 2014
/s/ Daniel T. Smith
Daniel T. Smith
Vice President, Chief Financial Officer

EXHIBIT 32.1:

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION

Certification

Pursuant to 18 U.S.C. Section 1350, the undersigned officer of Oil-Dri Corporation of America (the “Company”) hereby certifies
that to the best of my knowledge the Company's Annual Report on Form 10-K for the year ended July 31, 2014 (the “Report”)
fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the
Company.

Dated: October 10, 2014
/s/ Daniel S. Jaffee
Name: Daniel S. Jaffee
Title: President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Oil-Dri Corporation of America and will
be retained by Oil-Dri Corporation of America and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350,
Chapter 63 of Title 18, United States Code) and is not being filed as part of the Report or as a separate disclosure document.

Certification

Dated: October 10, 2014
/s/ Daniel T. Smith
Name: Daniel T. Smith
Title: Vice President, Chief Financial Officer

EXHIBIT 95:

MINE SAFETY DISCLOSURE

Under section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, each
operator of a coal or other mine is required to include certain mine safety information in its periodic reports filed with the SEC.
The table below includes this mine safety information for each mine facility owned and operated by Oil-Dri Corporation of
America, or its subsidiaries, for the year ended July 31, 2014. Due to timing and other factors, our data may not agree with the
mine data retrieval system maintained by the Mine Safety and Health Administration (“MSHA”). The columns in the table represent
the total number of, and the proposed dollar assessment for, violations, citations and orders issued by MSHA during the period
upon periodic inspection of our mine facilities in accordance with the referenced sections of the Federal Mine Safety and Health
Act of 1977, as amended (the “Mine Act”), described as follows:

Section 104 Significant and Substantial Violations: Total number of violations of mandatory health or safety standards that could
significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard.

Section 104(b) Orders: Total number of orders issued due to a failure to totally abate, within the time period prescribed by
MSHA, a violation previously cited under section 104, which results in the issuance of an order requiring the mine operator to
immediately withdraw all persons from the mine.

Section 104(d) Citations and Orders: Total number of citations and orders issued for unwarrantable failure of the mine operator
to comply with mandatory health and safety standards. The violation could significantly and substantially contribute to the cause
and effect of a safety and health hazard, but the conditions do not cause imminent danger.

Section 110(b)(2) Flagrant Violations: Total number of flagrant violations defined as a reckless or repeated failure to make
reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately
caused, or reasonably could have been expected to cause, death or serious bodily injury.

Section 107(a) Imminent Danger Orders: Total number of orders issued when an imminent danger is identified which requires
all persons to be withdrawn from area(s) in the mine until the imminent danger and the conditions that caused it cease to exist.

Total Dollar Value of Proposed MSHA Assessments: Each issuance of a citation or order by MSHA results in the assessment
of a monetary penalty. The total dollar value presented includes any contested penalties.

Legal Actions Pending, Initiated or Resolved: Total number of cases pending legal action before the Federal Mine Safety and
Health Review Commission as of the last day of the reporting period or the number of such cases initiated or resolved during
the reporting period.

Legal Actions

Section 104
“Significant
and
Substantial”
Violations
(#)

Section
104(d)
Citations
and
Orders
(#)

Section
110(b)(2)
Flagrant
Violations
(#)

Section
107(a)
Imminent
Danger
Orders
(#)

Total Dollar
Value of
Proposed
MSHA
Assessments
($)

Pending
as of Last
Day of
Period
(#)

Section
104(b)
Orders
(#)

Initiated
During
Period
(#)

Resolved
During
Period
(#)

—

64,054

8,218

2,261

6,305

26,268

—

Mine location

Ochlocknee,
Georgia
Ripley,
Mississippi

Mounds, Illinois

Blue Mountain,
Mississippi

Taft, California

We had no mining-related fatalities at any of our facilities during the twelve months ended July 31, 2014. During this period we
also received no written notices from MSHA under section 104(e) of the Mine Act of (i) a pattern of violations of mandatory health
or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of coal
or other mine health or safety hazards; or (ii) the potential to have such a pattern. All legal actions pending and initiated during
the period were contests of proposed penalties.

Letter to Stakeholders

FISCAL 2014

Amlan Trading (Shenzhen) Company, Ltd. Ribbon Cutting Ceremony
Hua Qian, Michael McPherson, Daniel Jaffee, Dr. Ron Cravens & Jeff Turner

Daniel S. Jaffee
President & Chief Executive Officer

Board of Directors

Executive Officers

Investor Inquiries

Richard M. Jaffee
Chairman

Daniel S. Jaffee
President & Chief Executive Officer

NYSE: ODC

Daniel S. Jaffee
President & Chief Executive Officer

Thomas F. Cofsky
Vice President, Manufacturing

Joseph C. Miller
Vice Chairman,
Independent Consultant

Douglas A. Graham
Vice President, General Counsel
& Secretary

J. Steven Cole
President, Cole & Associates

Mark E. Lewry
Chief Operating Officer

Michael A. Nemeroff
President & Chief Executive Officer,
Vedder Price P.C.

Allan H. Selig
Commissioner of Major League
Baseball; President & Chairman,
Selig Lease Co.

Paul E. Suckow
Business Fellow & Adjunct Professor,
Finance & Economics,
Villanova University

Lawrence E. Washow
Chairman, First Bauxite Corporation
Board Member & Partner,
Eudora Global, LLC

Daniel T. Smith
Vice President, Chief Financial Officer

Paul D. Ziemnisky
Vice President, General Manager,
Consumer Packaged Goods

Annual Meeting

On December 9, 2014 at
9:30 am CT, Oil-Dri Corporation
of America will hold its 2014
Annual Meeting of Stockholders.

Please join us:

The Standard Club
320 South Plymouth Court
Chicago, Illinois 60604

Independent
Registered Public
Accounting Firm

Grant Thornton LLP

Please direct all investor relations
inquiries to:

Reagan B. Culbertson
Investor Relations Manager
(312) 321-1515
info@oildri.com

Oil-Dri Corporation of America
Attention: Investor Relations
410 North Michigan Avenue
Suite 400
Chicago, Illinois 60611-4213

www.oildri.com

Stockholders with inquiries
regarding stock transfers, change
of ownership, change of address
or dividend payments should
contact the company’s registrar
and transfer agent:

Computershare Investor Services
2 North LaSalle Street
Chicago, Illinois 60602-3711
(312) 360-5257

Forward-Looking
Statements

Amlan, Cat’s Pride, Fresh & Light and
Calibrin are registered trademarks of
Oil-Dri Corporation of America.

OIL-DRI CORPORATION OF AMERICA
410 NORTH MICHIGAN AVENUE
SUITE 400
CHICAGO, ILLINOIS 60611