Central Garden & Pet Announces Record Third Quarter Earnings for Fiscal 2005; A 20% Increase in Diluted Earnings Per Share to $1.03; Innovation, Acquisitions and Operating Margin Improvement Initiatives Drive Performance
WALNUT CREEK, Calif.--(BUSINESS WIRE)--Aug. 3, 2005--
Tightens Guidance to 10% Sales Growth and 25% EPS Growth for
Fiscal 2005; Announces Preliminary Fiscal 2006 Diluted
EPS of Approximately $3.00
Central Garden & Pet Company (Nasdaq:CENT) today announced record results for its fiscal third quarter ended June 25, 2005.
Net sales for the fiscal third quarter were $413.2 million, an increase of 10.4% from $374.4 million in the third quarter of fiscal 2004. Net income was $22.2 million for the quarter, an increase of 23.6% compared to $17.9 million in the third quarter of fiscal 2004. Fully-diluted earnings per share was $1.03, compared to $0.86 in the third quarter of fiscal 2004, an increase of 19.8%. Depreciation and amortization expense in the quarter was $5.1 million.
Net sales for the Garden Products segment were $249.8 million, an increase of 9.3% compared to the third quarter of fiscal 2004. Operating income for the Garden Products segment was $21.4 million, an increase of 28.0% compared to the third quarter of fiscal 2004. Net sales for the Pet Products segment were $163.4 million, an increase of 12.0% compared to the third quarter of fiscal 2004. Operating income for the Pet Products segment was $23.6 million, an increase of 20.0% compared to the third quarter of fiscal 2004.
"We continue to build our brands and execute our disciplined growth strategy," noted Glenn Novotny, President and Chief Executive Officer of Central Garden & Pet . "Innovative new products with higher margins and contributions from strategic acquisitions are fueling the growth of our branded products portfolio. We are also focusing on creating greater operating efficiencies that, we believe, will service our customers more effectively and generate better returns for our shareholders. We remain on track for our fiscal 2005 financial objectives and are comfortable with an approximate earnings per share estimate range of $2.50 to $2.52 and sales of approximately $1.4 billion. This represents a 25% increase in diluted earnings per share for the fiscal year. We are also announcing our preliminary fiscal 2006 diluted earnings per share guidance of approximately $3.00."
Net sales for the first nine months of fiscal 2005 were $1,057.6 million, an increase of 10.7% from $955.8 million in the comparable period of fiscal 2004. Net income was $47.1 million for the first nine months of fiscal 2005, an increase of 30.2% compared to $36.1 million in the comparable period of fiscal 2004. Fully-diluted earnings per share was $2.19 for the first nine months of fiscal 2005, compared to $1.74 in the comparable period of fiscal 2004, an increase of 25.9%.
Net sales for the Garden Products segment for the first nine months of fiscal 2005 were $579.0 million, an increase of 8.2% compared to $535.4 million in the comparable period of fiscal 2004. Operating income for the Garden Products segment in the first nine months of fiscal 2005 was $44.8 million, an increase of 10.2% compared to $40.7 million in the comparable period of fiscal 2004. Net sales for the Pet Products segment for the first nine months of fiscal 2005 were $478.6 million, an increase of 13.8% compared to $420.4 million in the comparable period of fiscal 2004. Operating income for the Pet Products segment in the first nine months of fiscal 2005 was $65.3 million, an increase of 41.2% compared to $46.2 million in the comparable period of fiscal 2004.
The Company will discuss its fiscal third quarter 2005 results on a conference call today at 4:30 p.m. ET. The conference call will be simultaneously broadcast over the Internet through Central's website, http://www.centralgardenandpet.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 and supplies, 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, decorative outdoor patio products and ant control 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, AMDRO, Grant's, Sevin, Over'n Out and Cedar Works. For additional information on Central Garden & Pet , including access to the Company's SEC filings, please visit the Company's website at http://www.centralgardenandpet.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 including, without limitation, the resolution of litigation between the Company and Hebert Axelrod. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.
(Tables Follow)
Central Garden & Pet Company
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
------------------- ---------------------
June 25, June 26, June 25, June 26,
2005 2004 2005 2004
--------- --------- ----------- ---------
Net Sales $413,193 $374,431 $1,057,623 $955,766
Cost of Goods Sold and
Occupancy 282,941 256,506 714,456 663,744
--------- --------- ----------- ---------
Gross Profit 130,252 117,925 343,167 292,022
Selling, General and
Administrative
Expenses 92,037 86,183 255,760 222,363
--------- --------- ----------- ---------
Income from
Operations 38,215 31,742 87,407 69,659
Interest Expense (6,130) (4,959) (17,038) (13,523)
Interest Income 127 89 337 411
Other Income 2,939 1,665 4,593 1,935
--------- --------- ----------- ---------
Income Before
Income Taxes 35,151 28,537 75,299 58,482
Income Taxes 12,968 10,596 28,228 22,342
--------- --------- ----------- ---------
Net Income $22,183 $17,941 $47,071 $36,140
========= ========= =========== =========
Basic Earnings Per Common
Share: $1.06 $0.89 $2.27 $1.81
Diluted Earnings Per Common
Share: $1.03 $0.86 $2.19 $1.74
Weighted Average Shares
Outstanding:
Basic 20,890 20,086 20,735 19,968
Diluted 21,603 20,974 21,454 20,753
Central Garden & Pet Company
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 25, June 26, September
2005 2004 25,
2004
----------- --------- ---------
Assets
Current Assets:
Cash and Equivalents $9,910 $18,211 $12,221
Restricted Investments 15,327 15,307 14,936
Accounts Receivable 207,108 187,360 183,979
Inventories 277,381 242,972 237,913
Prepaid Expenses and Other 21,016 10,235 15,811
----------- --------- ---------
Total Current Assets 530,742 474,085 464,860
Property & Equipment - Net 112,255 101,760 105,612
Goodwill 362,923 310,560 338,384
Deferred Income Taxes and Other Assets 69,802 56,423 51,341
----------- --------- ---------
Total $1,075,722 $942,828 $960,197
=========== ========= =========
Liabilities & Shareholders' Equity
Current Liabilities:
Accounts Payable $99,896 $106,241 $105,933
Accrued Expenses 88,524 75,403 64,948
Current Portion of Long-Term Debt 1,772 1,026 1,025
----------- --------- ---------
Total Current Liabilities 190,192 182,670 171,906
Long-Term Debt 343,669 288,450 304,775
Other Long-Term Obligations 4,182 1,564 3,720
Convertible Redeemable Preferred Stock 3,000 3,000 3,000
Shareholders' Equity 534,679 467,144 476,796
----------- --------- ---------
Total $1,075,722 $942,828 $960,197
=========== ========= =========
CONTACT: Central Garden & Pet
Paul Warburg, 925-948-3686
SOURCE: Central Garden & Pet Company
Released August 3, 2005
