オイル・ドライ（ODC）2026年度第4四半期決算説明会：売上高とキャッシュが過去最高

主要ポイント

• オイル・ドライ・コーポレーション・オブ・アメリカ（Oil-Dri Corporation of America）は、2026年度第4四半期の売上高が過去最高を記録したことに加え、通期の売上高と純利益も過去最高を更新したと発表しました。
• 第4四半期の企業向け（BtoB）売上高は4%増の5,000万ドルと四半期としての過去最高を更新し、リテール・卸売部門の売上高は3%増の7,900万ドルに増加しました。
• 1トンあたりの国内売上原価が3%上昇したものの、売上総利益率は27.8%を維持しました。第4四半期の営業利益は前年同期比17%増加しました。
• 現金および現金同等物は5,100万ドルから45%増加し、過去最高の7,400万ドルに達しました。通期の営業活動によるキャッシュフローは8,000万ドル、EBITDAは9,300万ドルでした。
• 受託製造（コ・パッケージング）の猫砂の売上高は、軽量猫砂の需要と顧客との長期契約に支えられ、通期で47%増、第4四半期で60%増となりました。
• オイル・ドライは2つの融資枠における総借入枠を2億ドルから3億7,500万ドルに拡大し、自律的成長のための投資や買収に向けた柔軟性を高めました。

主要財務データ

業績および事業動向

製品ミックスの改善が第4四半期の売上高成長の主な要因となりました。オイル・ドライは、アニマルヘルス、農業用製品、および受託製造の猫砂の好調さを挙げました。

受託製造の猫砂は成長に大きく貢献し、売上高は2026年度通期で47%増、第4四半期で60%増となりました。経営陣によると、同社は顧客が特注製品を必要とした分野やボトルネックが存在した分野で絞り込んだ設備投資を行う一方、サプライチェーンの複数の工程で既存の能力を活用しました。同社は、この事業が自社ブランドやプライベートブランド（PB）の猫砂事業を著しく侵食しているとは捉えていません。

自社ブランドの猫砂は、棚割り手数料（スロッティング・フィー）の上昇、顧客からの投資要請、販促費の増大、および小売り業界の再編に直面しました。経営陣によると、電子商取引（EC）の普及が進む中、オイル・ドライは販売数量ベースで全米第4位の猫砂ブランドの地位を維持しました。

アムラン（Amlan）部門は、ブラジルの主要顧客の失注や世界的な関税状況による事前の圧力を乗り越え、極めて好調な第4四半期実績を達成しました。アジアでの伸び、ブラジルでの新規顧客と販売量の増加、ディストリビューターの地域的拡大、ならびに北米向け新製品が成長を牽引しました。また、経営陣はブラジルにおける特定抗菌薬の規制や、同国の肉牛フィードロット（肥育場）市場への参入にも機会を見出しています。

農業用製品の売上高は、2026年度の全四半期で前年同期比プラスを記録しました。経営陣はこの好調の要因として、大手生産者とのパートナーシップ、旺盛な作付け活動、ならびに除草剤、農薬、バイオ農薬に使用される粘土ベース担体の需要を挙げました。

流体精製部門の売上高は通期で5%減少したものの、第4四半期には四半期として最高の業績を記録しました。経営陣は通期の減少について、顧客の離脱ではなく、前年度（2025年度）の比較対象が高水準であったことと顧客需要の変動によるものだと説明しました。

経営見通し

経営陣は、アジア、ブラジル、北米での拡大に支えられ、アムランが前年比で堅調な成長を果たすと予想しています。ただし、第4四半期の極めて好調な売上ペースがそのまま持続する可能性は低いと慎重な姿勢を示しました。

オイル・ドライは、適切な長期リターンが見込めるプロジェクトがあれば、自律的成長に向けた投資を直近の水準以上に拡大する可能性があります。経営陣は事業運営チームに対し、より大規模な再投資の機会を検討するよう促していると述べました。

同社はまた、吸着性鉱物からの価値創造という注力分野を補強する買収案件についても検討する意向です。経営陣は、特定の買収規模やレバレッジ目標を設定するのではなく、規律ある企業価値評価とレバレッジ運用を強調しました。

リスクおよび注視事項

• 地政学的要因に伴う軽油価格の上昇やトラック輸送能力の低下を反映し、貨物・輸送コストが増加しました。
• 物流コストの上昇は特にリテール・卸売製品の重荷となり、同セグメントの営業利益は増収にもかかわらず5%減少しました。
• 減価償却費および無形資産償却費は第4四半期に6%増加しており、直近の投資物件が稼働を開始するにつれて、報告上の売上総利益率を圧迫し続けると予想されます。
• 自社ブランドの猫砂は、棚割りコストの高騰、販促競争の激化、小売り業界の再編、ならびに大手ブランドや新規参入企業との競争に直面しています。
• 流体精製部門の需要は、油脂の種類や原料の品質によって顧客の必要量が変動するため、引き続きボラティリティが高い可能性があります。
• アムランの第4四半期業績には反動増の影響が含まれており、同四半期の成長率をそのまま足元の巡航速度（ランレート）の前提とすることは不適切です。

アナリスト質疑応答の要点

流動性と資本配分に関して、オイル・ドライはリボルビング信用枠を33%増の1億ドルに拡大し、関連するアコーディオン機能（増額枠）を150%増の1億2,500万ドルに拡大したと発表しました。また、固定金利シェルフ登録枠を2倍の1億5,000万ドルに増額しました。2つの融資枠による合計借入枠は2億ドルから3億7,500万ドルに拡大しました。

経営陣は資本配分の優先順位を改めて表明しました。それらは、製造、機能強化、人材、研究開発への投資、配当の維持・強化、戦略的買収の推進、および長期的な価値を創出する場合の機動的な自社株買いの検討です。

受託製造の猫砂の顧客集中度および利益率について、経営陣は契約上の義務を理由に個別の顧客情報の開示を控えました。ただし、長期契約が必要な設備投資の経済性を支えていること、また分析ツールによれば他の猫砂事業との直接的な重複はほとんど見られないことを強調しました。

決算説明会文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Thank you. Good day and thank you for standing by. Welcome to the Oil-Dri Corporation of America Fourth Quarter Fiscal Year 2026 Earnings Discussion. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Daniel Jaffee, Chairman, President, and CEO. Please go ahead.

Daniel Jaffee

Thank you and welcome everybody to the fourth quarter and Fiscal Year-end 2026 teleconference. Before we get started, Leslie, will you walk us through the safe harbor and also let everyone know who's on the call so they can ask questions.

Leslie Garber

Yes, sure. Thank you, Dan. Welcome, everyone. Today on the call we have Susan Kreh, Chief Financial Officer and Chief Information Officer, Aaron Christiansen, our VP of Operations, Christopher Lamson, Group Vice President of Business to Business and Strategic Growth Initiatives, W. Wade Robey, VP of Agriculture and President of Amlan International. Laura Scheland, Vice President and General Manager of Consumer Products Division. Jonathan Blake, VP Corporate Controller. Anthony Parker, VP General Counsel and Secretary. Unfortunately not in attendance today is Bruce Pacey, Vice President of Fluid Purification, but Dan Jaffee, our CEO, will be able to answer those questions. Right now I'll read the safe harbor. On today's call, comments may contain forward-looking statements regarding the company's performance in future periods. Actual results in those periods may materially differ. In our press release and in our SEC filings, we highlight a number of important risk factors, trends, and uncertainties that may affect our future performance. We ask that you review and consider those factors in evaluating the company's comments and in evaluating any investment in Oil-Dri stock. Thank you again for joining us. Dan, I'll turn it back over to you.

Daniel Jaffee

Great, thank you, Leslie. And before I turn it over to Susan, I'd like to make some general comments. You know, my grandpa Nick used to always say, "Don't debate, demonstrate." And I was wondering, how did he get this industry started? And my sister Karen's been digging through our archives. And if you don't follow me on LinkedIn, I hope you'll go look at it, because we found some ads that he ran on the front page of newspapers that communicated the benefits of using Oil-Dri versus sawdust, which was very flammable, very strong, compelling advantage. So it was interesting that started that. And then Bud Selig, who's been on our board since 1969, his father, Ben, used to always say, "Nothing is good or bad except by comparison."

If you look at our year, many of the indices are extremely positive, but you could, if you wanted to, you could look at some of the comparison numbers and say, "Okay, well, that was sort of flat or that was slightly down." But any kind of perspective of three, four, five years and you see how great this team is performing and how well we're doing. And then finally, my dad always said, "Earnings are an an opinion, cash is a fact." And Susan will highlight this, but our cash generation has been fantastic. And that's really what fuels the growth and the health of the business. And so we've never been more happy or positive with how the company is doing. And I would say the final thing is, you know, we did give some forward guidance back in the first quarter and second quarter. We said the first part of FY '26 was going to be a tough comparison, but that we fully expected to equal or more than make up the distance in the back half. And you see the really great fourth quarter we had, which allowed us to do just that, pull ahead in many key indices, sales, net income, things like that, EBITDA, all were up for the fiscal year. So very proud of what the team has delivered and thank you for your questions. We'll spend most of the time answering them. But before we do, I'd love to turn it over to Susan so she can walk you through.

Susan Kreh

the results. Thank you Dan, and cash is a fact, and I will get into that in a minute. So, it's a pleasure to be here with all of you this morning, especially coming off the headline we released that states, "Oil-Dri delivers record annual financial results, including all-time high fourth quarter sales and historic cash generation." Leslie Garber did a really nice job in the press release of highlighting the drivers of our performance. So therefore, like Dan said, I'll keep my comments brief to allow for more time for your questions in the Q&A session. With that being said, I would like to highlight that our continued strong performance resulted in very strong financial position from which we're well positioned to grow. And keywords there being strong performance and strong financial position. So from a performance perspective, Fiscal Year 2026 demonstrated the strength of Oil-Dri's diversified product portfolio and efficient operating model. And we'll talk about cost reductions in a minute. As we stated at the onset of the Fiscal Year, and as Dan just reiterated in his opening comments, we knew the first half was going to be a challenge on a year-over-year comparative basis. We noted that although in the first half we faced a very tough comparison, we expected to achieve meaningful growth during the second half of the year, we gained incremental business and launched new products. The focus team here at Oil-Dri delivered on that forecast, achieving record full year sales and net income and closing the year with a record fourth quarter revenue. And that fourth quarter growth was broad-based across both product groups, with business-to-business sales rising 4% to a record $50 million, and retail and wholesale increasing 3% to $79 million. Improved product mix was the primary driver of the growth in the fourth quarter revenue, supported by strong growth in animal health sales, agricultural product sales, and co-packaged cat litter sales, as we had anticipated. And while net sales grew nicely in the fourth quarter compared to the prior year, gross profit as a percent of sales or gross margin was under pressure and remained steady at 27.8%. During the quarter, our gross per ton domestic cost of goods sold increased 3% over the same quarter in the prior year, primarily due to higher freight and transportation expenses, which were pressured by geopolitical impacts on diesel prices, as well as reduced capacity in the trucking industry. This pressure was especially impactful in the retail and wholesale products group, which experienced significantly higher costs to transport cat litter products, contributing to a 5% decline in segment operating income despite the higher sales. Depreciation and amortization, a non-cash component of our expenses, was also up 6% in the quarter due to the ongoing strategic investments we're making in our business. These increases were offset by the favorable mix and targeted price increases, some of which will get implemented on a lagged basis with some of our customers. In addition, cost reduction and expense management initiatives were a key to holding the margin steady at 27.8%. And while gross margins did remain steady, fourth quarter operating income increased by 17% over the same quarter in the prior year, demonstrating the resilience of the portfolio in our ability to manage through a challenging cost environment.

Now, switching gears from strong performance to strong financial position, and let's discuss cash and financial flexibility. The substantial cash generated as a result of the strong performance we just discussed enabled us to continue to invest in the business and return capital to our shareholders. Cash and cash equivalents reached an historic high of $74 million at Fiscal Year-end, up from $51 million a year ago, marking a significant 45% increase. We generated operating cash flow of $80 million and EBITDA, or earnings before interest, taxes, depreciation, and amortization, of $93 million, underscoring the growth and the cash generating power of our portfolio. And back to Dan's opening comments, cash is a fact. EBITDA is a notable metric for us as we have made the strategic decision to reinvest significantly in our business, particularly in funding infrastructure and growth opportunities in our manufacturing facilities, as well as funding the building of enterprise-wide capabilities such as data analytics and business intelligence. While those investments are funded in cash, as they are put into service, the non-cash depreciation expense that they generate puts pressure on our gross margins and will continue to do so as we have been investing steadily at this rate for about four years now. As a result of that impact on our margins, we do monitor EBITDA very closely to track the underlying performance of the business. Our cash position, together with our ability to access debt, provides strong liquidity and gives us flexibility to fund strategic priorities, manage through volatility, and pursue attractive growth opportunities while maintaining a very disciplined balance sheet. And speaking of our ability to access debt capital markets, I'd like to highlight some very recent enhancements to our financial flexibility. We have worked with two of our key financial partners to add more dry powder to our financing arsenal. We extended our variable rate revolving credit facility and increased our borrowing capacity by 33%, up to $100 million. In addition, that facility contains an accordion feature, which we have increased by 150%, up to $125 million. At the same time, we extended our fixed rate shelf facility and increased our borrowing capacity by 100%, up to $150 million. So in total, we have increased our ability to borrow under these two facilities from $200 million to $375 million, which is reflective of the continued strengthening of our financial position. Both of these were executed with favorable terms compared to our existing facilities. Both of these financing partners have been supporting Oil-Dri literally for decades. Those relationships are another key aspect of supporting our financial flexibility and our ability to fund growth. And as our financial position continues to strengthen, our capital priorities remain unchanged from what we have told you previously. First, we will continue to invest in our business, including the manufacturing and capabilities investments mentioned above, as well as investments in people and research and development to support our future growth. During Fiscal Year 2026, we invested $34 million in capital expenditures to support infrastructure capabilities and long-term growth. Second, we will continue to support our dividend. During Fiscal Year 2026, we increased our dividend not once but twice and paid out over $10 million to our shareholders. Third, we will evaluate opportunities to achieve long-term profitable growth through the pursuit of strategic acquisitions. The combination of our cash position, our strong operating cash flow, and our manageable debt profile including our enhanced access to capital markets funding, provide meaningful financial flexibility to evaluate and pursue acquisition opportunities. And as we evaluate acquisition opportunities, we will remain focused on our mission to create value from sorbent minerals, seeking businesses and capabilities that reinforce and extend that core purpose and offer a clear path to long-term value creation. And finally, we opportunistically evaluate potential value creation through share repurchases. And when it makes sense and generates long-term value, we will pursue that.

And with that, Dan, I'll turn it back over to you and Leslie for the question and answer session. I'm sure there will be a few.

Daniel Jaffee

Yep. Well, thank you, Susan, and thank you for that recap.

Leslie Garber

And Leslie, will you highlight which questions we're answering first? Yes, and as a reminder for those who are interested in asking questions, please submit your questions using the "Ask a Question" field on the webcast and click Submit. The first question we have comes from both Ethan Starr and Robert Smith. They have very similar questions. Was there a seasonal factor in Amlan's last quarter? Good numbers. What are the prospects for the run rate of $40 million being achieved in the current year? And what are the prospects for maintaining or increasing Amlan's record Q4 sales going forward? Wade, can you handle that?

Unknown Speaker

Yes, absolutely, Leslie. And thank you, Robert and Ethan, both for those questions. Amlan, actually, as you see, had an exceptional quarter for Amlan in Q4 of this past year. And it was driven by a couple of things which truly made it extraordinary. You may recall earlier in the year in previous webcasts, we talked about the loss of a key account in Brazil, and we also spoke to the impact that the tariff situation globally was having on our business and the impact specifically in a couple of key geographies like Brazil. Those things combined early in the year to lower our sales to those regions, and then we worked very hard in the course of the year to overcome that. You saw that in solid growth in Q3, and then now the exceptional growth we've seen in Q4. So obviously, logically, there was some rebound effect in the performance we saw over the course of the year. That being said, we're very bullish on the growth going forward for a couple of regions. One, we saw very strong growth consistently in Asia through the course of the year. In Latin America, we've seen not only recovery to a certain degree of that key account that we lost, but also additional growth in our business in Brazil to certain co-ops, gaining new customers and also new volume at existing customers. In addition, the regulatory agency in Brazil, MAPA, has made a number of changes, which is improving our ability to register our products and make additional claims. They've also, as many of you may have seen, have come out with new bans on certain antibiotics that are key and instrumental in the animal industry, including antibiotics like Apramycin, certain forms of Bacitracin, and Virginiamycin, which are all key antibiotics used in subtherapeutic application in animal feeds. As those products are removed in Brazil, that's going to drive alternatives, and especially natural alternatives like we offer in our Amlan portfolio. Finally, in Brazil, I would note that we're expanding our sales with new distributors into the middle and northern states including Margroso, Margroso de Sol up into Bahia, and then also in the southern states down in Rio Grande do Sul, and that is expanding our business and building our base. Finally, we're moving more aggressively into the ruminant market in Brazil. You may have heard me say earlier we sell a lot of our products into the dairy industry today, which is a form of ruminant, obviously. In Brazil, the focus has been on feedlot for beef cattle. We've completed significant research there over the course of this year and are seeing an opportunity for a lot of growth there. Finally, Robert and Ethan, we're also launching new products in North America over the last few months. Those are starting to be utilized by some of the largest of the top 10 poultry customers in the integrated industry in North America. We're excited about that. That's a product very similar to Varian that we sell in Latin America, where we have tremendous customer success, and it also is a very strong component product in our portfolio in addition to our base clays. So for all of those reasons, we're very bullish on the growth going forward. The fourth quarter was, again, exceptional. That's a rate we probably can't maintain. But we should see very good growth year over year as we continue to expand our Amlan business.

Leslie Garber

Great, thank you so much. We had a couple of similar questions come in regarding Fluids Purification, some from Robert Smith and John Baer, so I am going to summarize and ask the question. And Daniel Jaffee will answer this. Fluids Purification sales declined 5% for the full year, but delivered their strongest quarterly performance in the fourth quarter. What drove the improvement in Q4 compared to the rest of Fiscal Year '26? Dan?

Daniel Jaffee

Yep, happy to answer the question. Bruce Pacey, he did supply me with a lot of the details, so I'm fairly confident I'm on target here. It's important to note that the 5% year-over-year decline largely reflects a difficult comparison with Fiscal Year '25 when renewable diesel sales were increasing significantly as several new production facilities came online. Throughout Fiscal Year '26, demand from both edible oil and renewable diesel customers remained solid, although volumes varied as changes and oil type and feedstock quality impacted customers' needs. I think it's important to note that the decline in sales did not reflect customer losses. It was just variation in demand, which is what drove the positive fourth quarter; was a positive variation in demand. So we're very happy that we're hanging onto a customer base. I think any time a market in its earliest stages, you're going to have more volatility than when the product line gets mature. So, you know, hang in there, but we're hanging on to our customers and we'll ride the ups and have to deal with the downs as they figure out their supply and demand equation.

Leslie Garber

Thanks, Dan. The next question comes from Tyler Ventura from Diamond Hill Capital. He asks, "Co-packaged cat litter grew 47% this year and 60% in Q4, which you've identified as your single biggest gross driver in the category. Walk us through the capacity and customer concentration dynamics, specifically how many customers drive this 47% growth? What's the gross margin profile of co-package relative to your domestic branded business? And is the expansion of your lightweight offering with this partner a multi-year ramp up or approaching maturity? The reason I ask is because your domestic clay litter sales are despite Cat's Pride antibacterial posting seven straight quarters of growth, which makes me wonder if co-packaged success is partially cannibalizing your own branded distribution or if that's a separate dynamic tied to competitive promotional intensity." A lot in there. Christopher Lamson, if you could address that, that would be great.

Christopher Lamson

Sure, thanks Leslie and thanks Tyler for the question. Tyler, we are obligated under contracts with our co-man customers to not disclose a ton about the nature of those relationships. But with that being said, what I can share, we're obviously extremely pleased with the new business within lightweight and the growth that you reflected in the question. We're also, if you go back really through calls like this one and our annual shareholder meeting, we've been extremely consistent, be it me or Laura, over the last seven or eight years around how focused we are on growing the lightweight segment and that we believe lightweight segment growth is good for Oil-Dri, period. With that being said, more tactically, I would say we have some very good analytical tools that would tell us that, particularly with the folks we're supporting, with co-man relationships, there is not much, if any real interaction with those businesses. But again, we like the large brands driving lightweight and having great lightweight product, and we believe that's good for the overall development of the lightweight category and for both our private label and branded business in litter.

Regarding capacity and capital specifically, I'll say, you know, a bit of a mixed bag. We were able to leverage existing capacity in many key areas within the supply chain. And where either the customer required specific product needs that called on additional capital investment or pockets of further capital need, maybe to address a bottleneck or two, really the nature of our longer-term agreements in this area really help us feel very good about the capital that we did put in to supply, support this ongoing relationship. So thank you again for the question, and we're excited to have this business and to continue to grow with our customers in lightweight.

Leslie Garber

Thank you. The next question is from Ethan Starr. Could you please discuss the challenges and opportunities you see in growing your branded cat litter distribution and sales? Laura, will you take that?

Laura Scheland

Sure. Good morning and thanks for the question. We'll take the question in two parts. First, with respect to the challenges, some of the challenges we've seen in the past year for our branded cat litter distribution are increasing slotting costs, customer investment requirements, and other spend requirements that are rising faster than our pricing and inflation, but continue to try to stay in front of, along with retail consolidation in the brick and mortar channel. We see some historically elevated spending from large brands and competition from a number of smaller brands and new entrants. However, turning to the opportunities, all in, we remain very excited about the great opportunity for our brand. We remain the number four brand nationally in units and are dedicated to growing with innovation, standard distribution, and focus. During FY '26, we're excited to launch a number of new items and continue to focus to do so in the coming years. Another area of opportunity that we remain excited about is e-commerce. In the past year, we've grown our product and offering across different retailers and are seeing great growth in adoption from consumers.

And then on the promotional spending level, while FY '26 was a time of heightened spend, and we continue to see promotions be elevated, we're seeing indications that spending is starting to subside and staying instead at the historically high levels. So we remain diligent in managing our promotional spend in a strategic way to optimize our return on spend, but also our consumer value on an everyday basis to be kind of the best choice for our consumers. And then finally, I know the question was with respect to branded items, but a key point of differentiation for us among our branded competitors and our private label competitors is that our diversification with strong offerings in both branded and private label channels, across the non-clumping, clumping, and crystal segments. With this diversification of offerings, we're able to fill trucks to customers and optimize logistics and inventory carrying costs for our customers and fill a large range of their litter needs. And we'll continue to focus to grow both our brand and private label distribution with our strategic customers. So all in, balancing out the challenges and opportunities, we remain very excited about the future for both our branded private label products and remain committed to growing across both e-commerce and brick and mortar channels.

Leslie Garber

Thanks, Laura. The next question for Wade, this time on the Ag side of the business.

Unknown Speaker

The question is, the Ag business has delivered year-over-year sales growth in each quarter of Fiscal Year 2026. What is structurally driving this growth? Yes, thank you for that question, Leslie. There are a number of things that really drive the growth in the types of businesses that we target with this division, particularly. Just to remind the audience, our two primary channels that we go to or markets are really one on what I'll call the turf and ornamental side, which is more of engineered granules to higher-end, higher use applications for specialty products, and then more our standard carrier products, which are targeted for what I'll call broad acre or row crop agricultural applications. And in both cases, we've seen good growth in that business. We have been, I think, very fortunate and hopefully strategically smart in how we've aligned with certain leaders in those segments, working with some of the largest producers, which as they grow has allowed our business to grow as well. Kind of some of the macro events underpinning that, we've had really large plantings. If you look at the broadacre or row crop side of our business where, again, customers might blend on a herbicide or a pesticide or a bio-Ag or other bioactive product onto our clay to put on, let's say, row crops that those plantings have been very high over the course of the last 12-18 months. We saw over 95 million acres of corn planted in the U.S. this past season, about 85 million of soy. So very, very high in the range of what we typically plant, and then drives naturally more tonnage of those products that need our clay as a functional carrier into that solution. So all of those things have kind of come together to help us grow our business. Again, we have a strong competitive position. We're partnering with some of the leaders in those various sectors, and then we've seen just general growth in Ag and in the plantings that year over year have helped drive the business. So all those things have come together to help our business grow.

Leslie Garber

Thanks, Wade. The next question comes from Jens Verbrugge from Value Square Funds. He asks, "With the expanded revolver and the removal of the $100 million acquisition cap, how should we think about the size and focus of acquisitions you're considering, and what leverage would you be comfortable with? Also, if the number one capital allocation will be organic investment, should we expect CapEx to increase above the plus minus $35 million per year of the last couple of years? Any guidance on balance sheet and the usage of a bit of financial leverage would be helpful." Christopher Lamson, I'm going to have you answer that, and Susan, feel free to chime in, too.

Christopher Lamson

Sure, I'll really start out by the piece, that with the piece rather, that is M&A oriented, and then if Susan would like to chime in on the ongoing capital spending, that's great. Really, Susan alluded to this piece too, and I can tell you we're very disciplined around being mission-led, around value, creating value with sorbent minerals. And then we've really got some key strategic filters that we then, you know, run ourselves through before we engage. And then we're incredibly disciplined around remaining value-driven and where we don't believe that we can drive value and return it to folks like you, we will remove ourselves from deals. I would say in thinking about M&A, we are certainly – I'm grateful to Susan's team for the additional dry powder, maybe spelled DRI, play on words that they've provided us and obviously the cash that I think just came across in one of Tyler's questions, that the business is generating for us, but we're going to be prudent here. And I think there's 85 years of history that shows we'll be prudent relative to, you know, the leverage coming from the balance sheet.

Susan Kreh

And, hi, this is Susan. I'll just add one more thing on. Yes, I think it is lower risk to reinvest in our team and in our business because we actually know how to run this company and the operating team runs it well. So I definitely am pushing Aaron and his team to look for more opportunities that create long-term value for the shareholders and have the right returns and to think bigger than they have in the past. So it is possible that you could see some bigger reinvestment in the business at levels higher than you've seen in the past.

Leslie Garber

Great. Well, we are at time. Dan, I don't know if you have any closing remarks.

Daniel Jaffee

Closing remarks, yes. Thank you everybody, and we'll look forward to talking to you next quarter. This was a great quarter and onward and upward from here.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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