# Dear Stakeholder

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_ODC_2021/NYSE_ODC_2021.mmd` · pages 2-8_

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Dear Stakeholder,

We at Oil-Dri realize that achieving our profit goal is job number one. Meaning, we are 100% accountable for delivering our profit plans for the year. Therefore, by definition, fiscal 2021 was quantitatively a disappointing year. We were off to a good start, and then our supply chain was challenged by external economic factors and pressures. If misery loves company, then we certainly took solace in the fact that almost every competitor in our lines of business experienced the same dynamics in this global supply chain crisis. Standard, annual price increases would not cover the rapid inflation we experienced for resin, freight, natural gas, pallets, and other manufacturing costs. As we face these ongoing external cost pressures, the team and I continue to remedy the situation by working with our customer partners on cost saving initiatives and by taking price increases to the market, where necessary.
On the growth front, we are excited about the progress made during the year, working along the critical path necessary to commercialize several large opportunities. For example, Oil-Dri invented and patented lightweight cat litter, and we saw our lightweight litter business (branded and private label combined) grow by 19% during the year to $66 million in net sales. Third-party market research data for retail sales \( ^{1} \)  shows the total cat litter category decreased 0.1% in units for the 52-week period ending 7/17/21, thus demonstrating how Oil-Dri continues to take share. On a unit basis, our share, which includes our branded and private label offerings, grew to 16.2% of the entire category. The lightweight litter sub-category was up 6.5% in units, continuing to take share from heavyweight cat litter. We expect this trend to continue as the world increases its focus on sustainability and eco-friendly products. We see a tremendous amount of value in lightweight litter, and we believe our competitors do as well. We continue to defend our patent rights in order to preserve the value that we have created, and we are fully committed to doing so going forward.
As the global trend away from using antibiotics in the production of human food continues to gain momentum, we see a huge growth opportunity for our mineral-based feed additives. During fiscal 2021, we invested in our animal health business, Amlan International, by identifying, hiring, and onboarding 14 new teammates, many of whom came with decades of poultry experience. Our clays, selectively mined and processed, give us the foundation to deliver incredible value to our food production partners. We have identified adjuvants to add to our clay to enhance and perfect our products' performance. Some of the formulas that include the use of our mineral are patented. Our traceability back to our mines is an important point of differentiation for Oil-Dri and is highly valued by our customer partners. As we enter the new fiscal year, we are conducting tests with many major global food producers. We have invested and positioned our company so that fiscal 2022 can be the year when the dominoes start to fall, and we successfully partner with many new customers. As always, we take a long-term approach to growing our business. We were proud to be able to reward our shareholders with another dividend increase during the year, the 18th consecutive year we were able to do so. We are truly a value stock that has some exciting growth opportunities. Fiscal 2021 was certainly challenging, but important progress was made to prepare the company for success in fiscal 2022 and beyond. I encourage you to spend time on our website, www.oildri.com, where we enhanced our communication around our long time Environmental, Social and Governance ("ESG") efforts.

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DANIEL S. JAFFEE
President & Chief Executive Officer