Central Garden & Pet Announces Record Second Quarter Earnings for Fiscal 2005; A 14% Increase in Earnings Per Share to $1.04; Innovation, Acquisitions and Margin Expansion Initiatives Drive Performance
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WALNUT CREEK, Calif.--(BUSINESS WIRE)--May 4, 2005-- Re-Affirms Guidance
of 10% Sales Growth and 25% EPS Growth for Fiscal 2005
Central Garden & Pet Company (Nasdaq:CENT) today announced record results for its fiscal second quarter ended March 26, 2005. Net sales for the fiscal second quarter were $378.9 million, an increase of 5.5% from $359.0 million in the second quarter of fiscal 2004. Net income was $22.4 million for the quarter, an increase of 19% compared to $18.8 million in the second quarter of fiscal 2004. Fully-diluted earnings per share was $1.04, compared to $0.91 in the second quarter of fiscal 2004, an increase of 14.3%. Depreciation and amortization in the quarter was $4.6 million. Net sales for the Garden Products segment were $220.4 million, an increase of 3.0% compared to the second quarter of fiscal 2004. Operating income for the Garden Products segment was $24.2 million, a decline of 9.9% compared to the second quarter of fiscal 2004. Net sales for the Pet Products segment were $158.4 million, an increase of 9.2% compared to the second quarter of fiscal 2004. Operating income for the Pet Products segment was $23.6 million, an increase of 50.3% compared to the second quarter of fiscal 2004. "We continue to post solid overall results," noted Glenn Novotny, President and Chief Executive Officer of Central Garden & Pet. "Our commitment to new product innovation, growth and development of strategic acquisitions, and incremental sales and operating leverage opportunities continue to drive margins and returns for shareholders. We believe we are on our way to achieving our outlined sales growth of approximately 10% and earnings per share growth of approximately 25% for fiscal 2005." The Company reiterated its fiscal 2005 guidance of approximately $1.4 billion in sales and an earnings range of $2.44 to $2.54 per fully diluted share. Included in this guidance is the contribution from Gulfstream Home & Garden, acquired in February 2005. Net sales for the first six months of fiscal 2005 were $644.4 million, an increase of 10.9% from $581.3 million in the comparable period of fiscal 2004. Net income was $24.9 million for the first six months of fiscal 2005, an increase of 36.8% compared to $18.2 million in the comparable period of fiscal 2004. Fully-diluted earnings per share was $1.16 for the first six months of fiscal 2005, compared to $0.88 in the comparable period of fiscal 2004, an increase of 31.8%. Net sales for the Garden Products segment for the first six months of fiscal 2005 were $329.3 million, an increase of 7.3% compared to $306.8 million in the comparable period of fiscal 2004. Operating income for the Garden Products segment in the first six months of fiscal 2005 was $23.4 million, a decline of 2.5% compared to $24.0 in the comparable period of fiscal 2004. Net sales for the Pet Products segment for the first six months of fiscal 2005 were $315.2 million, an increase of 14.8% compared to $274.5 in the comparable period of fiscal 2004. Operating income for the Pet Products segment in the first six months of fiscal 2005 was $41.7 million, an increase of 56.8% compared to $26.6 million in the comparable period of fiscal 2004. The Company will discuss its fiscal second 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, 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, 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 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.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 Six Months Ended
------------------- -------------------
March 26, March 27, March 26, March 27,
2005 2004 2005 2004
--------- --------- --------- ---------
Net Sales $378,854 $358,985 $644,430 $581,335
Cost of Goods Sold and
Occupancy 251,980 246,959 431,515 407,238
--------- --------- --------- ---------
Gross Profit 126,874 112,026 212,915 174,097
Selling, General and
Administrative
Expenses 87,198 77,669 163,723 136,180
--------- --------- --------- ---------
Income from Operations 39,676 34,357 49,192 37,917
Interest Expense (5,610) (4,459) (10,908) (8,564)
Interest Income 107 123 210 322
Other Income 1,974 985 1,654 270
--------- --------- --------- ---------
Income Before Income Taxes 36,147 31,006 40,148 29,945
Income Taxes 13,775 12,162 15,260 11,746
--------- --------- --------- ---------
Net Income $22,372 $18,844 $24,888 $18,199
========= ========= ========= =========
Basic Earnings Per Common
Share: $1.08 $0.94 $1.20 $0.91
Diluted Earnings Per Common
Share: $1.04 $0.91 $1.16 $0.88
Weighted Average Shares
Outstanding:
Basic 20,760 20,030 20,658 19,939
Diluted 21,515 20,803 21,391 20,646
Central Garden & Pet Company
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
March March September
26, 27, 25,
2005 2004 2004
----------- --------- ---------
Assets
Current Assets:
Cash and Equivalents $10,701 $12,568 $12,221
Restricted Investments 15,195 15,179 14,936
Accounts Receivable 237,044 225,381 183,979
Inventories 304,722 252,614 237,913
Prepaid Expenses and Other 21,919 10,766 15,811
----------- --------- ---------
Total Current Assets 589,581 516,508 464,860
Property & Equipment - Net 106,956 101,347 105,612
Goodwill 339,792 281,108 338,384
Deferred Income Taxes and Other Assets 70,803 54,374 51,341
----------- --------- ---------
Total $1,107,132 $953,337 $960,197
=========== ========= =========
Liabilities & Shareholders' Equity
Current Liabilities:
Accounts Payable $137,791 $133,543 $105,933
Accrued Expenses 82,613 55,663 64,948
Current Portion of Long-Term Debt 1,750 1,027 1,025
----------- --------- ---------
Total Current Liabilities 222,154 190,233 171,906
Long-Term Liabilities 366,950 311,296 304,775
Other Long-Term Obligations 4,189 1,580 3,720
Convertible Redeemable Preferred Stock 3,000 3,000 3,000
Shareholders' Equity 510,839 447,228 476,796
----------- --------- ---------
Total $1,107,132 $953,337 $960,197
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Released May 4, 2005
