Central Garden & Pet Announces Fiscal Third Quarter Results
Reports Third Quarter Sales of $467 Million and Earnings Per Fully Diluted Share of 22 Cents
WALNUT CREEK, Calif.--(BUSINESS WIRE)--
Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) today announced results for its third quarter ended June 30, 2007.
The Company reported net sales of $467 million, a decrease of eight percent from $507 million in the comparable fiscal 2006 period. Income from operations for the quarter was $37.2 million versus $59.9 million in the year ago period. The Company reported net income for the quarter of $15.5 million, or $0.22 per fully diluted share, compared to net income of $30.7 million, or $0.43 per fully diluted share, in the year ago period. Operating results for the third quarter of fiscal 2006 included a pre-tax net gain of $9.0 million, or $0.08 per fully diluted share, comprised of a $9.9 million gain from the Axelrod litigation settlement less expenses of approximately $0.9 million associated with accelerated brand building and other strategic opportunities. Branded product sales decreased 7%. Sales of other manufacturers' products decreased 13%. Depreciation and amortization for the quarter was $7.6 million compared to $7.5 million in the year ago period.
"2007 has been a challenging year for the Company, and the results we announced today reflect the lowered expectations we discussed in early June," said Glenn Novotny, President and Chief Executive Officer of Central Garden & Pet. "As we noted then, an extraordinary rise in grain prices and unfavorable weather conditions across the United States created a 'perfect storm'."
"This year's performance notwithstanding, we have a good business. We are fundamentally optimistic about a rebound in 2008 given the steps we are taking during this challenging time to reduce costs and adjust buying and pricing strategies. These and other initiatives are designed to enable us to react more quickly to dynamics in the marketplace. Our objective is to be more agile and better positioned for improved and more consistent performance for our shareholders in fiscal 2008 and beyond," Novotny continued.
Net sales for the Garden Products segment were $227 million versus $279 million in the comparable fiscal 2006 period. Garden Products income from operations was $16.1 million versus $27.4 million in the year ago period. Branded product sales decreased 19%. Sales of other manufacturers' products declined 17%. Net sales for the Pet Products segment were $240 million versus $228 million in the comparable fiscal 2006 period. Pet Products income from operations was $29.9 million versus $29.6 million in the year ago period. Branded product sales increased 8%. Sales of other manufacturers' products declined 7%.
For the nine months ending June 30, 2007 of fiscal 2007, the Company reported net sales of $1.27 billion, an increase of 6% from $1.20 billion in the comparable 2006 period. Income from operations for the period was $89.3 million versus $115.4 million in the comparable period. Net income for the nine month period was $34.0 million compared to $59.5 million in the year ago period. Diluted earnings per share was $0.47 compared to $0.87 in the year ago period. Branded product sales increased 9% while sales of other manufacturers' products declined 7%. Depreciation and amortization for the nine month period was $21.9 million compared to $18.6 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 1-866-700-7441 and passcode 90967355 (domestic) or 1-617-213-8839 and passcode 90967355 (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.
Re-play dial-in numbers for the call will be available for three weeks: 1-888-286-8010 and passcode 98677760 (domestic) and 1-617-801-6888 and passcode 98677760 (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 in the following categories: Lawn & Garden: Grass seed including the brands PENNINGTON(R) and THE REBELS(TM); wild bird feed and the brands PENNINGTON(R) and KAYTEE(R); weed and insect control and the brands AMDRO(R), SEVIN(R), IRONITE(R) and Over 'N Out and; decorative outdoor patio products and the brands NORCAL(R), NEW ENGLAND POTTERY(R) and MATTHEWS FOUR SEASONS(TM). We also provide a host of other regional and application-specific garden brands and supplies. Pet categories include: Animal health and the brands ADAMS(TM) and ZODIAC(R); aquatics and reptile and the brands OCEANIC(R), AQUEON(TM) and RZILLA(TM); bird & small animal and the brands KAYTEE(R), SUPER PET(R) and CRITTER TRAIL(R); dog & cat and the brands TFH(TM) / NYLABONE(R), FOUR PAWS(R), PINNACLE(R) and Avoderm and; equine and the brands FARNAM(R), BRONCO(R) and SUPER MASK(R). We also provide a host of other application-specific pet brands and supplies. Central Garden & Pet 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, 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, 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 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 30, June 24, June 30, June 24,
2007 2006 2007 2006
---------- ---------- ----------- -----------
Net Sales $ 466,778 $ 506,694 $1,269,836 $1,200,757
Cost of Goods Sold and
Occupancy 315,638 334,983 852,980 800,296
---------- ---------- ----------- -----------
Gross Profit 151,140 171,711 416,856 400,461
Selling, General and
Administrative Expenses 113,948 111,842 327,509 285,083
---------- ---------- ----------- -----------
Income from Operations 37,192 59,869 89,347 115,378
Interest Expense (13,198) (12,213) (37,296) (28,784)
Interest Income 292 1,582 1,257 2,869
Other Income 1,194 1,371 2,879 3,223
---------- ---------- ----------- -----------
Income Before Income
Taxes and Minority
Interest 25,480 50,609 56,187 92,686
Income Taxes 9,495 19,070 20,904 32,362
Minority Interest 470 809 1,284 809
---------- ---------- ----------- -----------
Net Income $ 15,515 $ 30,730 $ 33,999 $ 59,515
========== ========== =========== ===========
Basic Earnings Per Common
Share: $ 0.22 $ 0.44 $ 0.48 $ 0.90
Diluted Earnings Per
Common Share: $ 0.22 $ 0.43 $ 0.47 $ 0.87
Weighted Average Shares
Outstanding
Basic 70,910 70,131 70,730 66,180
Diluted 72,048 72,198 72,066 68,190
Earnings per share have been restated to reflect the Class A common
stock dividend issued February 2007.
Central Garden & Pet Company
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 30, September 30,
2007 2006
------------- -------------
Assets
Current Assets:
Cash and Cash Equivalents $ 15,815 $ 28,406
Accounts Receivable 276,858 239,172
Inventories 381,748 332,214
Other Current Assets 42,196 34,910
------------- -------------
Total Current Assets 716,617 634,702
Property and Equipment - Net 196,653 162,604
Goodwill 566,665 557,820
Deferred Income Taxes and Other Assets 180,516 178,697
------------- -------------
Total $ 1,660,451 $ 1,533,823
============= =============
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts Payable $ 139,715 $ 122,960
Accrued Expenses 96,827 81,305
Current Portion of Long-Term Debt 3,347 3,039
------------- -------------
Total Current Liabilities 239,889 207,304
Long-Term Debt 612,988 565,410
Other Long-Term Obligations 28,853 29,583
Convertible Redeemable Preferred Stock 750 3,000
Minority Interest 1,749 1,167
Shareholders' Equity 776,222 727,359
------------- -------------
Total $ 1,660,451 $ 1,533,823
============= =============
Source: Central Garden & Pet
Released August 8, 2007
