CENT Central Garden and Pet Co

Central Garden & Pet Company (NASDAQ: CENT)(NASDAQ: 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.”

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 SEEDTM 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.

Central Garden & Pet Company

             

Condensed Consolidated Statements of Operations

 

(Unaudited)

(In thousands, except per share amounts)

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