EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact: Stuart Booth

Central Garden & Pet

925.948.3675

CENTRAL GARDEN & PET ANNOUNCES FISCAL 2010 THIRD QUARTER RESULTS

Despite Mixed Sales Results, Operating Income Continues to Improve

 

 

WALNUT CREEK, CALIFORNIA, August 4, 2010 – Central Garden & Pet Company (NASDAQ: CENT/CENTA) today announced results for its third quarter ended June 26, 2010.

The Company reported net sales of $465 million in the quarter, a decline of three percent compared to $482 million in the comparable fiscal 2009 period. The Company reported operating income of $52.6 million, an increase of two percent compared to $51.6 million in the year ago period. Net interest expense was $9.8 million compared to $5.2 million a year ago. Net income for the quarter was $25.9 million, or $0.40 per fully diluted share compared to $31.1 million or $0.44 per fully diluted share in the year ago period. Branded products sales decreased six percent to $382 million. Sales of other manufacturers’ products increased ten percent to $83 million. Depreciation and amortization was $7.2 million, the same as the year ago period. The quarter-ending leverage ratio was 2.5x compared to 2.7x a year ago.

“Despite a soft garden season, the quarter produced solid results in many areas of the company” noted William Brown, Chairman and Chief Executive Officer of Central Garden & Pet Company. “We are continuing to control costs, manage working capital and drive gross profit margin. Our goal is to grow sales and drive further margin and capital efficiency improvement across the business while developing new programs and products that make a difference for consumers.”

 

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Fiscal third quarter net sales for the Garden Products segment were $243 million, a decrease of nine percent from $267 million in the comparable fiscal 2009 period. Operating income for Garden Products was $30.1 million compared to $35.3 million in the year ago period. Branded garden products sales decreased thirteen percent to $201 million. Sales of other manufacturers’ products increased fifteen percent to $42 million. Fiscal third quarter net sales for the Pet Products segment were $222.7 million, an increase of four percent from $215 million compared to the fiscal 2009 period. Operating income for the Pet Products segment was $32.6 million, compared to $29.8 million in the year ago period. Branded pet products sales were $181.6 million, an increase of three percent compared to last year. Sales of other manufacturers’ products were $41.1 million, an increase of six percent compared to last year.

For the nine months ended June 26, 2010, the Company reported net sales of $1.18 billion compared to $1.25 billion in the comparable 2009 period, a decline of six percent. Operating income for the period was $113.7 million compared to operating income of $106.1 million in the year ago period. Net income for the nine months ended June 26, 2010 was $54.6 million compared to net income of $57.9 million in the comparable 2009 period. Earnings per diluted share were $0.83 compared to $0.82 per diluted share in the year ago period. Branded product sales declined eight percent to $970 million and sales of other manufacturers’ products increased seven percent to $206 million. Depreciation and amortization for the nine month period was $21.7 million compared to $21.9 million in the year ago period.

The Company will discuss its third quarter results on a conference call today at 4:30 p.m. EDT / 1:30 p.m. PDT. Individuals may access the call by dialing 1-888-713-4199 and passcode 4145 4989 (domestic) or 1-617-213-4861 and passcode 4145 4989 (international).

The conference call will be simultaneously broadcast over the Internet through Central’s website, http://www.central.com/ or you may link directly to the webcast on our website at http://phx.corporate-ir.net/phoenix.zhtml?c=93879&p=irol-calendar To listen to the webcast, please log on to the website prior to the scheduled call time to register and download any necessary audio software.

In order to simplify your registration process, you may pre-register at the following link:

https://www.theconferencingservice.com/prereg/key.process?key=PXPR8NGUJ. By pre-registering, you may bypass the operator and go directly to the teleconference with a unique PIN number as soon as the call begins. At the time of the call, after dialing the number and passcode mentioned above, enter your PIN for immediate access to the teleconference.


Re-play dial-in numbers for the call will be available for three weeks: 1-888-286-8010 and passcode 4325 6896 (domestic) and 1-617-801-6888 and passcode 4325 6896 (international).

Central Garden & Pet Company is a leading innovator, marketer and producer of quality branded products for the lawn & garden and pet supplies markets. Committed to new product innovation, our products are sold to specialty independent and mass retailers. Participating categories in Lawn & Garden include: Grass seed including the brands PENNINGTON®, SMART SEED™ and THE REBELS™; wild bird feed and the brands PENNINGTON® and KAYTEE®; weed and insect control and the brands AMDRO®, SEVIN®, IRONITE® and Over ‘N Out®; and decorative outdoor patio products and the brands NORCAL®, NEW ENGLAND POTTERY® and MATTHEWS FOUR SEASONS™. We also provide a host of other regional and application-specific garden brands and supplies. Participating categories in Pet include: Animal health and the brands ADAMS™ and ZODIAC®; aquatics and reptile and the brands OCEANIC®, AQUEON™ and ZILLA™; bird & small animal and the brands KAYTEE®, SUPER PET® and CRITTER TRAIL®; dog & cat and the brands TFH™, NYLABONE®, FOUR PAWS®, PINNACLE® and Avoderm®; and equine and the brands FARNAM®, BRONCO® and SUPER MASK®. We also provide a host of other application-specific Pet brands and supplies. Central Garden & Pet Company is based in Walnut Creek, California, and has approximately 5,000 employees, primarily in North America and Europe. For additional information on Central Garden & Pet Company, including access to the Company’s SEC filings, please visit the Company’s website at www.central.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks are described in the Central’s Annual Report on Form 10-K, filed November 20, 2009, and Quarterly Report on Form 10-Q, filed May 5, 2010, and other Securities and Exchange Commission filings. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.

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(Tables Follow)


Central Garden & Pet Company

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

     Three Months Ended     Nine Months Ended  
     June 26,
2010
    June 27,
2009
    June 26,
2010
    June 27,
2009
 

Net Sales

   $ 465,486      $ 482,162      $ 1,176,658      $ 1,251,129   

Cost of Goods Sold and Occupancy

     302,712        317,108        764,926        840,041   
                                

Gross Profit

     162,774        165,054        411,732        411,088   

Selling, General and Administrative

        

Expenses

     110,134        113,484        298,049        305,028   
                                

Income from Operations

     52,640        51,570        113,683        106,060   

Interest Expense

     (9,797     (5,211     (24,555     (17,846

Interest Income

     1        12        12        614   

Other Income

     42        1,161        428        80   
                                

Income Before Income Taxes and Noncontrolling Interest

     42,886        47,532        89,568        88,908   

Income Taxes

     15,860        15,371        33,026        29,498   
                                

Income Including Noncontrolling Interest

     27,026        32,161        56,542        59,410   

Net Income Attributable to Noncontrolling Interest

     1,153        1,085        1,943        1,498   
                                

Net Income Attributable to Central Garden & Pet Company

   $ 25,873      $ 31,076      $ 54,599      $ 57,912   
                                

Net Income Per Share Attributable to Central Garden & Pet Company:

        

Basic

   $ 0.41      $ 0.45      $ 0.84      $ 0.83   

Diluted

   $ 0.40      $ 0.44      $ 0.83      $ 0.82   

Weighted Average Shares Outstanding

        

Basic

     63,810        69,345        64,879        69,885   

Diluted

     64,606        70,449        65,716        70,798   


Central Garden & Pet Company

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 

     June 26,
2010
   June 27,
2009
   September  26,
2009

Assets

        

Current Assets:

        

Cash and Cash Equivalents

   $ 91,623    $ 25,390    $ 85,668

Accounts Receivable

     223,845      262,735      206,565

Inventories

     306,118      313,820      284,834

Prepaid Expenses and

        

Other Current Assets

     30,643      43,117      44,425
                    

Total Current Assets

     652,229      645,062      621,492

Property and Equipment - Net

     162,352      165,519      164,734

Goodwill

     208,630      206,873      207,749

Other Intangible Assets – Net

     99,828      104,318      103,366

Deferred Income Taxes and Other Assets

     60,668      80,539      53,584
                    

Total

   $ 1,183,707    $ 1,202,311    $ 1,150,925
                    

Liabilities and Shareholders’ Equity

        

Current Liabilities:

        

Accounts Payable

   $ 119,869    $ 117,083    $ 108,836

Accrued Expenses

     101,312      114,432      82,143

Current Portion of Long-Term Debt

     201      3,311      3,270
                    

Total Current Liabilities

     221,382      234,826      194,249

Long-Term Debt

     400,138      405,676      404,815

Other Long-Term Obligations

     4,223      4,685      4,526

Shareholders’ Equity

     557,964      557,124      547,335
                    

Total

   $ 1,183,707    $ 1,202,311    $ 1,150,925