11-K 1 d11k.txt FORM 11-K As filed with the Securities and Exchange Commission on June 29, 2001 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 OR [_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 33-96816 A. Full title of the plan and the address of the plan: Central Garden & Pet Company Investment Growth Plan 3697 Mt. Diablo Boulevard Lafayette, California 94549 B. Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: Central Garden & Pet Company 3697 Mt. Diablo Boulevard Lafayette, California 94549 REQUIRED INFORMATION 1. Financial statements filed as a part of this annual report: Report of Deloitte & Touche LLP, independent auditors, Audited Statements of Net Assets Available for Benefits, With Supplemental Information (Modified Cash Basis) as of December 31, 2000 and 1999, Audited Statement of Changes in Net Assets Available for Benefits, With Supplemental Information (Modified Cash Basis) for the Year Ended December 31, 2000, and Notes to Financial Statements for the Year Ended December 31, 2000. 2. Exhibit filed as part of this annual report: Exhibit 23 - Consent of Deloitte and Touche LLP, independent auditors. SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN Date: June 29, 2001 By: /s/ Elaine Fabbri ------------------------------------ Elaine Fabbri Director of Benefits and Compensation CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN Financial Statements (Modified Cash Basis) as of December 31, 2000 and 1999 and for the Year Ended December 31, 2000, Supplemental Schedule as of December 31, 2000, and Independent Auditors' Report CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN TABLE OF CONTENTS --------------------------------------------------------------------------------
Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS (MODIFIED CASH BASIS): Statements of Net Assets Available for Benefits as of December 31, 2000 and 1999 2 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2000 3 Notes to Financial Statements 4-7 SUPPLEMENTAL SCHEDULE: Schedule of Assets Held for Investment Purposes as of December 31, 2000 8
[LETTERHEAD OF DELOITTE & TOUCHE] INDEPENDENT AUDITORS' REPORT Trustees and Participants Central Garden & Pet Company Investment Growth Plan We have audited the accompanying statements of net assets available for benefits (modified cash basis) of the Central Garden & Pet Company Investment Growth Plan (the "Plan") as of December 31, 2000 and 1999, and the related statement of changes in net assets available for benefits (modified cash basis) for the year ended December 31, 2000. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform our 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note 2, these financial statements and supplemental schedule were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2000 and 1999, and the changes in net assets available for benefits for the year ended December 31, 2000 on the basis of accounting described in Note 2. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule listed in the table of contents is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the basic 2000 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Deloitte & Touche LLP June 18, 2001 CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (MODIFIED CASH BASIS) DECEMBER 31, 2000 AND 1999 -------------------------------------------------------------------------------- 2000 1999 ASSETS: Investments at fair value: Mutual funds $26,089,128 $ 2,963 Common stock 2,447,614 3,886,458 Participant loans 1,096,106 432,474 ----------- ----------- Total 29,632,848 4,321,895 Investments at contract value: Investment contract with insurance company 11,665,059 7,313,212 ----------- ----------- Total investments 41,297,907 11,635,107 Cash - 12,566,231 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $41,297,907 $24,201,338 =========== =========== See notes to financial statements. -2- CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (MODIFIED CASH BASIS) YEAR ENDED DECEMBER 31, 2000 ------------------------------------------------------------------------------- ADDITIONS: Investment income (loss): Net depreciation in fair value of investments $(4,563,577) Interest and dividend income 1,835,244 ----------- Total investment loss (2,728,333) ----------- Contributions: Employer 464,699 Participant 4,024,144 ----------- Total contributions 4,488,843 ----------- Net additions 1,760,510 ----------- DEDUCTIONS: Benefits paid to participants 5,249,539 Fees 8,670 ----------- Total deductions 5,258,209 ----------- TRANSFERS IN FROM MERGED PLANS: Wellmark International Investment Growth Plan 12,131,037 Kaytee Products, Incorporated 401(k) Retirement Savings Plan 8,463,231 ----------- Total assets transferred in 20,594,268 ----------- NET INCREASE 17,096,569 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 24,201,338 ----------- End of year $41,297,907 =========== See notes to financial statements. -3- CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2000 -------------------------------------------------------------------------------- 1. PLAN DESCRIPTION The following brief description of the Central Garden & Pet Company Investment Growth Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan Document for more complete information. General - The Plan is a defined contribution plan sponsored by Central Garden & Pet Company (the "Company"). The Plan is intended to qualify under Sections 401(a) and 401(k) of the Internal Revenue Code ("IRC"). The purpose of the Plan is to provide retirement and other benefits for employees of the Company. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Employees whose compensation is not determined by a collective bargaining agreement become eligible to participate in the Plan at age 21 or older after at least 1,000 hours of service in a year. Plan Mergers - In March 2000, the net assets available for benefits of the Wellmark International, Inc. Investment Growth Plan and Kaytee Products, Incorporated 401(k) Retirement Savings Plan were merged into the Plan (see Note 7). Contributions - Participants of the Plan can elect to defer pretax contributions between 1% and 15% of compensation, up to a maximum of $10,500 in 2000 and $10,000 in 1999, as allowed by the IRC. For the year ended December 31, 1999, the Company made a discretionary matching contribution equal to 25% of the first 6% of compensation contributed to the Plan. The Company's matching contribution for the year ended December 31, 1999 was paid in 2000, and consisted of 44,414 shares of Company stock, valued at $417,355. As allowed under the Plan, the Company also made a $47,344 cash discretionary profit sharing contribution that was paid in 2000. In February 2001, the Company's board of directors adopted an amendment to commit the Company to a fixed match of 25% of the first 8% of compensation contributed to the Plan, retroactive to the year ended December 31, 2000. The Company's matching contribution for the year ended December 31, 2000 was paid in 2001 and consisted of $821,316 of cash. The Company did not elect to contribute a discretionary profit sharing contribution for year ended December 31, 2000. Vesting - Participants are immediately vested in their voluntary contributions plus any associated earnings. Vesting in the Company matching contributions, plus any earnings thereon, is based on years of continuous service. A participant is 100% vested after five years of credited service. Participant Accounts - Each participant's account is credited with the participant's contributions, an allocation of the Plan's investment income and/or losses, and the Company's contributions. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the vested account. Participant Loans - Participant loans are available to active employees for up to 50% of an employee's account balance, with a minimum borrowing of $500 and a maximum of $50,000. Loan terms are a -4- maximum of five years or, for the purchase of a primary residence, a maximum of ten years. Participants are allowed only one outstanding loan at a time. Loans are secured by the participant's account balance and bear interest at a rate commensurate with prevailing rates at the time the loan is made as determined by the Plan administrator. Payment of Benefits - Upon termination of service for any reason, including death and disability, participants with vested account values of less than $5,000 will be required to receive a lump-sum distribution of such amounts. If the value of the vested portion of the vested accounts exceeds $5,000, the terminated participant can elect to receive his or her distribution immediately or at any time prior to attaining the normal retirement age as defined by the plan (age 65). When a participant attains the normal retirement age, the participant can withdraw all or any portion of his or her accounts under the plan without restriction. Forfeitures - Forfeitures are used to reduce future Company matching contributions. Total forfeitures during 2000 were $38,604. Plan Termination - Although it has not expressed any intent to do so, the Company may completely discontinue its contributions and terminate the Plan at any time by resolution of its Board of Directors. In the event of Plan termination or complete discontinuance of Company contributions, each Plan participant will become fully vested in his or her account. Tax Status - The Plan obtained its latest determination letter on September 1, 1995, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the IRC. The Plan's Administrative Committee believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan's financial statements. Reclassifications - Certain prior year amounts have been reclassified to conform with the current year presentation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying financial statements have been prepared on the modified cash basis under which certain revenues are recognized when received, disbursements are recognized when made and contributions are recorded as received. Additionally, investments are reflected at fair value. Accordingly, the financial statements are not intended to present net assets of the Plan in conformity with accounting principles generally accepted in the United States of America. Use of Estimates - The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Investment Valuation and Income Recognition - Investments in mutual funds and common stock are stated at fair value, which is determined by quoted market prices. The benefit responsive investment contract is stated at contract value (see Note 5). Purchases and sales of securities are recorded on a trade-date basis. Participant loans are carried at the unpaid principal balance, which approximates fair value. -5- 3. INVESTMENTS Investments that represent 5% or more of the Plan's net assets at December 31, 2000 and 1999, are separately identified in the following table:
2000 1999 --------------------------- ---------------------------- Number of Number of Value Shares Value Shares Aetna Fixed Account $11,665,059 N/A $ - - Aetna Index Plus Large Cap Fund 10,597,619 617,936.989 - - Aetna Growth and Income Fund 4,663,531 375,485.572 - - Central Garden & Pet Company Common Stock Fund* 2,447,614 356,017.000 3,886,458 374,598.000 Pioneer Equity Income Fund 2,217,931 79,695.669 - - LaSalle Capital Preservation Fund - - 7,313,212 N/A
*Nonparticipant-directed During the year ended December 31, 2000, the Plan's investments, including gains and losses on investments bought and sold, as well as held during the year, depreciated in value by $4,563,677 as follows: Mutual funds $ 3,162,187 Common stock 1,401,390 ----------- Total $ 4,563,577 =========== 4. NONPARTICIPANT-DIRECTED INVESTMENTS The Plan's nonparticipant-directed investments consist entirely of Central Garden & Pet Company common stock. The fair market value of such investments was $2,447,614 and $3,886,458 at December 31, 2000 and 1999, respectively. Information about the significant components of the changes in net assets relating to the nonparticipant-directed investments for the year ended December 31, 2000 is as follows: Employer contributions $ 417,355 Participant contributions 390,350 Net depreciation in fair market value (1,316,987) Benefits paid to participants (229,860) Transfers to participant-directed investments (698,693) Fees and other expenses (1,009) ----------- Total $(1,438,844) =========== 5. INVESTMENT CONTRACT WITH INSURANCE COMPANY In 2000, the Plan began offering the Aetna Fixed Account, a benefit- responsive investment contract, as an investment option to Plan participants. As of December 31, 2000, the Plan had $11,665,059 invested in this fund. -6- Aetna Financial Services ("Aetna") maintains the contributions to this fund in a general account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The contract is included in the financial statements at contract value as reported to the Plan by Aetna. Contract value represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The average yield and crediting interest rates was approximately 5.6% for 2000. The crediting interest rate is determined on a monthly basis by an actuarial formula as designated by Aetna. The crediting interest rate is subject to a guaranteed minimum floor as defined on an annual basis by Aetna. The floor rate is currently set at 5.1% 6. PARTY-IN-INTEREST TRANSACTIONS The Plan's investments include Central Garden & Pet Company common stock and Aetna Investment Funds, representing party-in-interest transactions that qualify as exempt prohibited transactions. 7. MERGER WITH WELLMARK INTERNATIONAL, INC. INVESTMENT GROWTH PLAN AND KAYTEE PRODUCTS, 401(k) RETIREMENT SAVINGS PLAN Effective January 1, 2000, the Board of Directors adopted an amended and restated Central Garden & Pet Investment Growth Plan (the "Plan"). Such amendment included the adoption of the Plan by other subsidiaries of Central Garden & Pet Company and the merger of plans of other subsidiaries into the Plan, at the discretion of management. As of March 1, 2000, Wellmark International, Inc. and Kaytee Products, Inc., wholly-owned subsidiaries of Central Garden & Pet Company, became sponsoring employers of the Plan, and the Wellmark International, Inc. Investment Growth Plan and Kaytee Products, Inc. 401(k) Retirement Savings Plan were merged into the Plan effective March 2, 2000 and March 16, 2000, respectively. In conjunction with the amendment and restatement, the Board of Directors further approved the appointment of Fleet National Bank as successor trustee of the Plan, replacing the prior trustee, Dreyfus Trust Company; and the appointment of Aetna Financial Services as successor recordkeeper of the Plan, replacing the prior recordkeeper, Dreyfus Retirement Services. These trustee and recordkeeper changes were adopted effective January 1, 2000. Effective August 1, 2000, Aetna Financial Services was appointed as successor trustee of the plan, replacing Fleet National Bank. ****** -7- CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 2000 --------------------------------------------------------------------------------
Number of Current Identity Description Shares Value Central Garden & Pet Company Stock Fund/(1)(2)/ Common stock 356,017.000 $ 2,447,614 Aetna Investment Funds:/(1)/ Fixed Account Investment contract with insurance company, minimum interest at 5.1%, matures December 31, 2001 N/A 11,665,059 Money Market Fund Money market account 39,801.380 39,801 Ascent Fund Mutual fund 4,161.171 48,311 Crossroads Fund Mutual fund 1,229.003 13,851 Legacy Fund Mutual fund 10,701.618 110,548 Growth and Income Fund Mutual fund 375,485.572 4,663,531 Index Plus Large Cap Fund Mutual fund 617,936.989 10,597,619 Small Company Fund Mutual fund 120,082.536 1,653,536 International Fund Mutual fund 130,139.392 1,365,162 Pioneer Equity Income Fund Mutual fund 79,695.669 2,217,931 INVESCO Dynamics Fund Mutual fund 65,058.452 1,546,439 Janus Balanced Fund Mutual fund 94,344.257 2,003,872 Massachusetts Investors Growth Fund Mutual fund 51,484.603 882,446 Oppenheimer High Yield Fund Mutual fund 10,229.402 109,659 Oppenheimer Global Fund Mutual fund 15,787.514 836,422 Participant Loans/(1)/ 245 loans, bearing interest at 7.0% to 10.5%, maturing through 2010 N/A 1,096,106 ----------- Total Investments $41,297,907 ===========
/(1)/Party-in-interest, as defined by ERISA. /(2)/Nonparticipant-directed -8-