Central Garden & Pet Announces First Quarter Earnings for Fiscal 2006; Sales Increased 10%; Organic Sales Increased 5%
February 01 2006 - 3:01PM
Business Wire
Earnings Per Share of 12 Cents Including Restructuring and Equity
Compensation Costs of 7 Cents Re-Affirms Fiscal 2006 Guidance
Central Garden & Pet Company (Nasdaq:CENT) today announced
results for its fiscal first quarter ended December 24, 2005. Net
sales for the fiscal first quarter were $293 million, an increase
of 10% from $266 million in the first quarter of fiscal 2005.
Organic sales increased 5% in the quarter. Sales of branded
products were $228 million, an increase of 11%. Sales of other
manufacturers' products were $65 million, an increase of 6%. Net
income was $2.6 million for the quarter compared to net income of
$2.5 million in the first quarter of fiscal 2005. Fully-diluted
earnings per share was $0.12, unchanged when compared to the first
quarter of fiscal 2005. The Company recognized $1.6 million in
costs associated with its previously announced profit acceleration
program and $1 million associated with expensing equity
compensation. Depreciation and amortization in the quarter was $5.2
million. Net sales for the Garden Products segment were $126
million, an increase of 15.4% compared to the first quarter of
fiscal 2005. The Garden Products segment operating loss was $0.5
million in the quarter, an improvement of $0.3 million, which
includes $1.2 million of restructuring costs, when compared to the
first quarter of fiscal 2005. Net sales for the Pet Products
segment were $167 million, an increase of 6.6% compared to the
first quarter of fiscal 2005. Operating income for the Pet Products
segment improved $0.5 million to $18.6 million, which includes
restructuring costs of $0.4 million when compared to the prior
year. "Fiscal 2006 is off to a solid start," noted Glenn Novotny,
President and Chief Executive Officer of Central Garden and Pet.
"Sales were strong, we created operating leverage through our
strategic business unit alignment initiative, and we invested in
the future through the completion of a strategic acquisition." The
Company reiterated its fiscal 2006 guidance of approximately $1.46
billion in sales and an earnings range of $2.80 to $2.90 per fully
diluted share which includes the net impact of $4 million in
pre-tax costs associated with its previously announced
consolidation of its manufacturing and distribution facilities and
pre-tax costs of approximately $5 million related to equity
compensation. This guidance does not include any potential impact
from the recently announced Farnam Companies acquisition expected
to close in the Company's fiscal second quarter. "We are excited
about 2006 and the future," concluded Mr. Novotny. "Our garden
brands are well positioned with key retailers for the garden season
and our pet brands are launching a series of innovative new
products at the Global Pet Expo in March. In addition, we believe
we have strategically positioned the Company as a leader in the
animal health category. The combination of Wellmark International
with the recently acquired intellectual property assets of Shirlo
Inc. and the pending acquisition of Farnam, will give us a leading
brand position in the equine marketplace and an excellent portfolio
of active ingredients and technologies for the broader animal
health category." The Company will discuss its fiscal first quarter
2006 results on a conference call today at 4:30 p.m. EST. The
conference call will be simultaneously broadcast over the Internet
through Central's website, http://www.central.com/. 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.
Central Garden & Pet Company is a leading innovator, marketer
and producer of quality branded products for the pet and lawn and
garden supplies markets. Our pet products include pet bird and
small animal food, aquarium products, flea, tick, mosquito and
other pest control products, edible bones, cages, carriers, pet
books, and other dog, cat, reptile and small animal products. These
products are sold under a number of brand names, including Kaytee,
Super Pet, All-Glass Aquarium, Oceanic, Kent Marine, Energy Savers
Unlimited, Zodiac, Pre-Strike, Altosid, Nylabone, TFH, Four Paws
and Interpet. Our lawn and garden products include grass seed, wild
bird food, weed and insect control products, and decorative outdoor
patio products. These products are sold under a number of brand
names, including Pennington, Norcal Pottery, New England Pottery,
GKI/Bethlehem Lighting, Lilly Miller, Matthews Four Seasons, Cedar
Works, AMDRO, Grant's, Sevin and Over'n Out. For additional
information on Central Garden & Pet, including access to the
Company's SEC filings, please visit the Company's website at
http://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, including future
earnings guidance, 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
Company's Form 10-K 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. -0- *T Central Garden & Pet Company
Condensed Consolidated Statements of Income (Unaudited) (In
thousands, except per share amounts) Three Months Ended December
24, December 25, 2005 2004 ------------ ------------- Net Sales
$292,731 $265,576 Cost of Goods Sold and Occupancy 200,733 179,535
------------ ------------- Gross Profit 91,998 86,041 Selling,
General and Administrative Expenses 82,223 76,525 ------------
------------- Income from Operations 9,775 9,516 Interest Expense
(6,344) (5,298) Interest Income 685 103 Other Income / (Expense) 49
(320) ------------ ------------- Income Before Income Taxes 4,165
4,001 Income Taxes 1,605 1,485 ------------ ------------- Net
Income $2,560 $2,516 ============ ============= Basic Earnings Per
Common Share: $0.12 $0.12 Diluted Earnings Per Common Share: $0.12
$0.12 Weighted Average Shares Outstanding Basic 21,335 20,539
Diluted 21,826 21,264 Central Garden & Pet Company Condensed
Consolidated Balance Sheets (Unaudited) (In thousands) December 24,
December 25, 2005 2004 ------------ ------------ Assets Current
Assets: Cash & Cash Equivalents $12,913 $14,100 Restricted
Investments 15,066 Accounts Receivable 155,908 143,656 Inventories
322,775 288,192 Other Current Assets 28,201 18,718 ------------
------------ Total Current Assets 519,797 479,732 Property &
Equipment - Net 114,972 106,893 Goodwill 364,732 340,088 Other
Assets 83,434 50,292 ------------ ------------ Total $1,082,935
$977,005 ============ ============ Liabilities & Shareholders'
Equity Current Liabilities: Accounts Payable $119,837 $119,018
Accrued Expenses 66,187 69,448 Current Portion of Long-Term Debt
1,772 1,025 ------------ ------------ Total Current Liabilities
187,796 189,491 Long-Term Debt 321,556 294,296 Other Long-Term
Obligations 19,411 3,967 Convertible Redeemable Preferred Stock
3,000 3,000 Shareholders' Equity 551,172 486,251 ------------
------------ Total $1,082,935 $977,005 ============ ============ *T
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