Central Garden & Pet Company (NASDAQ: CENT/CENTA), a leading
innovator, marketer and producer of quality branded products for
the lawn and garden and pet supplies markets, today announced
results for its first quarter ended December 25, 2010.
The Company reported first quarter net sales of $282 million, an
increase of 5 percent over the same period a year ago. Net sales
increased in both its Garden and Pet segments. The Company reported
an operating loss of $6.5 million compared to operating income of
$0.5 million in the comparable prior year period due primarily to
rising grain and other raw material prices and increased marketing
and brand building expenditures. The net loss for the quarter was
$9.6 million, or $0.16 per share compared to a net loss of $2.9
million or $0.04 per share in the year ago period. The Company
historically reports a loss in its first fiscal quarter given the
seasonal nature of the lawn and garden category.
Branded product sales increased 5 percent to $231 million. Sales
of other manufacturers’ products increased 4 percent to $51
million. Depreciation and amortization expense was $7 million in
the first quarter of 2011, consistent with the first quarter of the
prior year. Net interest expense was $8.9 million compared to $4.9
million a year ago. The quarter ending senior secured leverage
ratio, as defined in the Company’s credit agreement, was 2.7x. At
December 25, 2010, the Company’s cash and short term investment
balance was $91 million. The Company repurchased $15 million of its
common stock during the quarter under its $100 million stock
repurchase program announced in July 2010.
“Our revenues grew for both our Garden and Pet segments in a
quarter which is seasonally a slow period for the garden category,”
said Bill Brown, Chairman and Chief Executive Officer. “We were
pleased with the first quarter revenue growth, although our
quarterly results were impacted by rising input costs and our
strategic investment in brand building. Going forward, we will
continue to pursue growth opportunities and operating efficiencies
while investing in innovation and marketing. We intend to leverage
the strength of our product portfolio, our distribution network,
and the strong relationships we have with our customers in order to
deliver consistent profitable growth.”
Net sales for the Garden Products segment in the first quarter
were $95 million, an increase of 8 percent from $88 million in the
comparable fiscal 2010 period. The Garden Product segment’s
operating loss was $8.0 million compared to a loss of $6.3 million
in the first quarter of 2010. Branded product sales increased $6
million to $80 million. Sales of other manufacturers’ products
increased 10 percent to $15 million. Net sales for the Pet Products
segment were $187 million, an increase of 3 percent compared to
$182 million in the year ago period. Operating income for the Pet
Products segment was $11.4 million, compared to $17.6 million in
the comparable prior year period. Branded product sales were $151
million, an increase of $5 million compared to last year. The Pet
segment’s sales of other manufacturers’ products were $36 million
and remained flat compared to last year.
The Company will discuss its first quarter results on a
conference call today at 4:30 p.m. EST / 1:30 p.m. PST. Individuals
may access the call by dialing 1-888-679-8038 and passcode
153202907 (domestic) or 1-617-213-4850 and passcode 153202907
(international). 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.
In order to simplify your registration process, you may
pre-register at the following link:
https://www.theconferencingservice.com/prereg/key.process?key=PELV8Y7B4.
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 1504 3145 (domestic) and
1-617-801-6888 and passcode 1504 3145 (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®, and Over 'N
Out®; and decorative outdoor patio products and the brands NORCAL®,
NEW ENGLAND POTTERY®, CEDAR WORKS® 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 4,300 employees,
primarily in North America and Europe. For additional information
on Central Garden & Pet Company, including access to Central's
SEC filings, please visit Central'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, including those relating to potential
operating efficiencies, new product introductions and potential
growth opportunities 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 Annual Report on Form 10-K, filed November 19, 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 Income (Unaudited) (In thousands,
except per share amounts)
Three Months Ended
December 26, December 25, 2009 2010
Net Sales $ 269,236 $ 281,719 Cost of Goods Sold and
Occupancy 181,467 198,662
Gross Profit
87,769 83,057 Selling, General and Administrative Expenses
87,248 89,540 Income (Loss) from
Operations 521 (6,483 ) Interest Expense (4,944 ) (9,039 )
Interest Income 10 133 Other Income (Expense) 592
(406 ) Loss Before Income Tax Benefit (3,821 )
(15,795 ) Income Tax Benefit (1,402 )
(6,117 ) Loss Including Non Controlling Interest (2,419 )
(9,678 ) Net Income (Loss) Attributable Non Controlling Interest
475 (86 ) Net Loss Attributable to
Central Garden & Pet $ (2,894 ) $ (9,592 ) Basic and
Diluted Loss Per Common Share: $ (0.04 ) $ (0.16 ) Weighted
Average Shares Outstanding: Basic and Diluted 66,828 60,941
Central Garden & Pet Company Condensed Consolidated
Balance Sheets (Unaudited) (In thousands)
December 26,2009
December 25,2010
September 25,2010
Assets Current Assets: Cash and Cash Equivalents $ 91,791 $ 75,317
$ 91,460 Short Term Investments - 15,320 15,320 Accounts Receivable
128,991 130,618 192,422 Inventories 327,403 341,621 285,964 Other
Current Assets 48,023 52,610
42,733 Total Current Assets 596,208 615,486 627,899
Property and Equipment - Net 162,336 165,959 165,281
Goodwill 207,749 208,348 207,319 Other Intangible Assets – Net
102,236 85,768 86,798 Deferred Income Taxes and Other Assets
53,448 37,419 43,587
Total $ 1,121,977 $ 1,112,980 $ 1,130,884
Liabilities and Equity Current Liabilities: Accounts
Payable $ 117,635 $ 115,651 $ 112,611 Accrued Expenses 83,091
84,931 81,418 Current Portion of Long-Term Debt 3,256
147 165 Total Current
Liabilities 203,982 200,729 194,194 Long-Term Debt 404,007
400,141 400,106 Other Long-Term Obligations 4,405 4,462 4,441
Total Central Garden & Pet Company
Shareholders’ Equity
509,623 507,787 530,696 Non Controlling Interest (40 )
(139 ) 1,447 Total Equity 509,583
507,648 532,143 Total $
1,121,977 $ 1,112,980 $ 1,130,884
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