Central Garden & Pet Announces Full Year and Fourth Quarter Results for Fiscal 2005; 30% Net Income Growth for the Full Year; 26% Increase in EPS for the Full Year; Announces $100 Million Share Repurchase Program

WALNUT CREEK, Calif.--(BUSINESS WIRE)--Dec. 7, 2005--Central Garden & Pet Company (Nasdaq:CENT) today announced fourth quarter and full year results for its fiscal year ended September 24, 2005 and a $100 million share repurchase program.

Net sales for fiscal 2005 were $1.4 billion, an increase of 9% from $1.3 billion in fiscal 2004. Net income for the year increased 30% to $53.8 million from $41.3 million in the prior year. Diluted earnings per share increased 26% to $2.50 from $1.99 in the prior year. Branded product sales increased 12% while sales of other manufacturers' products declined 2%. Depreciation and amortization for the year was $19.6 million compared to $18.5 million in the prior year.

For the fourth quarter of fiscal 2005 the Company reported net sales of $323 million, up 4% from $311 million in the comparable 2004 period. Net income for the quarter increased 29% to $6.7 million from $5.2 million in the year ago period. Diluted earnings per share increased 24% to $0.31 from $0.25 in the year ago period. Branded product sales increased 7% while sales of other manufacturers' products declined 6%. Depreciation and amortization for the quarter was $5.4 million compared to $4.9 million in the year ago period. The fourth quarter of fiscal 2005 results include a one-time benefit of $1.5 million related to a deferred tax adjustment, litigation expense of approximately $3 million and Sarbanes-Oxley compliance costs of approximately $3 million.

"Our commitment to investing in our business resulted in solid demand for our branded products throughout the fiscal year," noted Glenn Novotny, President and Chief Executive Officer. "We are pleased to see consumers approach their traditional spending patterns for their homes and pets, following the slow down in spending in the fourth quarter."

The Company announced Board of Director authorization to repurchase up to $100 million of its common stock. Mr. Novotny commented, "Central is committed to a balanced approach of disciplined, strategic acquisitions and periodic share repurchases to minimize the dilutive impact of employee stock options."

The Company reiterated its fiscal 2006 guidance. Net sales for the year are projected to be between $1.45 billion and $1.47 billion. Operating income is expected to be between $116 million and $119 million including the net impact of $4 million in costs associated with its previously announced consolidation of its manufacturing and distribution facilities. Net income is expected to be between approximately $63 million and $65 million including the profit acceleration program. The corresponding earnings per fully diluted share is expected to be between $2.80 and $2.90. These projected results do not include the impact from any future acquisitions.

As previously disclosed, the Company accelerated its plans to achieve a 10% operating margin by fiscal 2008. In fiscal 2006, the Company expects to incur consolidation costs associated with this program of approximately $7 million. Benefits associated with this program are expected to be approximately $3 million resulting in a net cost of approximately $4 million for the fiscal year. The Company anticipates this consolidation program will contribute an additional $7 million of operating profits in fiscal 2007 ramping up to $9 million per year starting in fiscal 2008.

The Company will discuss its fourth quarter and full year fiscal 2005 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 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

                   Consolidated Statements of Income
               (In thousands, except per share amounts)

                            Three Months Ended    Fiscal Year Ended
                           ------------------- -----------------------
                           September September  September   September
                              24,       25,        24,         25,
                             2005      2004       2005        2004
                           --------- --------- ----------- -----------

Net Sales                  $323,021  $310,760  $1,380,644  $1,266,526
Cost of Goods Sold and
 Occupancy                  223,533   218,483     937,989     882,227
                           --------- --------- ----------- -----------
  Gross Profit               99,488    92,277     442,655     384,299

Selling, General and
 Administrative Expenses     86,766    79,864     342,526     302,227
                           --------- --------- ----------- -----------

  Income from Operations     12,722    12,413     100,129      82,072

Interest Expense             (6,087)   (4,759)    (23,125)    (18,282)
Interest Income               2,128       118       2,465         529
Other Income                    (17)       88       4,576       2,023
                           --------- --------- ----------- -----------

  Income Before Income
   Taxes                      8,746     7,860      84,045      66,342

Income Taxes                  2,030     2,650      30,258      24,992
                           --------- --------- ----------- -----------

  Net Income                 $6,716    $5,210     $53,787     $41,350
                           ========= ========= =========== ===========

Basic Earnings Per Common
 Share:                        0.32     $0.26        2.58       $2.06

Diluted Earnings Per
 Common Share:                 0.31     $0.25        2.50       $1.99

Weighted Average Shares
Basic                        21,062    20,271      20,813      20,036
Diluted                      21,787    20,966      21,526      20,801

                     Central Garden & Pet Company

                 Condensed Consolidated Balance Sheets
                            (In thousands)

                                                 September   September
                                                    24,         25,
                                                   2005        2004
                                                 ----------- ---------
Current Assets:
  Cash & Cash Equivalents                           $28,792   $27,157
  Accounts Receivable                               184,896   183,979
  Inventories                                       270,736   237,913
  Other Current Assets                               25,853    15,811
                                                 ----------- ---------
  Total Current Assets                              510,277   464,860

Property & Equipment - Net                          110,595   105,612

Goodwill                                            364,847   338,384
Other Assets                                         70,630    51,341
                                                 ----------- ---------

Total                                            $1,056,349  $960,197
                                                 =========== =========

Liabilities & Shareholders' Equity
Current Liabilities:
  Accounts Payable                                  $96,455  $105,933
  Accrued Expenses                                   68,152    64,948
  Current Portion of Long-Term Debt                   2,210     1,025
                                                 ----------- ---------

  Total Current Liabilities                         166,817   171,906

Long-Term Liabilities                               320,854   304,775
Other Long-Term Obligations                          18,500     3,720
Convertible redeemable preferred stock                3,000     3,000

Shareholders' Equity                                547,178   476,796
                                                 ----------- ---------

  Total                                          $1,056,349  $960,197
                                                 =========== =========
    CONTACT: Central Garden & Pet

             Paul Warburg, 925-948-3686

    SOURCE: Central Garden & Pet Company