11-K: Annual report of employee stock purchase, savings and similar plans
Published on June 26, 1998
As filed with the Securities and Exchange Commission on June 26, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-96816
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Central Garden & Pet Company Investment Growth Plan
700 Milwaukee Avenue North
Algona, Washington 98001
B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
Central Garden & Pet Company
3697 Mt. Diablo Boulevard
Lafayette, California 94549
REQUIRED INFORMATION
1. Financial statements filed as a part of this annual report: Report
of Deloitte & Touche LLP, independent auditors, Audited Statements of Net Assets
Available for Benefits, With Supplemental Information by Fund (Modified Cash
Basis) as of December 31, 1997 and 1996, Audited Statements of Changes in Net
Assets Available for Benefits, With Supplemental Information By Fund (Modified
Cash Basis) for the Years Ended December 31, 1997 and 1996, and Notes to
Financial Statements for the Years Ended December 31, 1997 and 1996.
2. Exhibit filed as a part of this annual report: Exhibit 23-Consent
of Deloitte & Touche LLP, independent auditors.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
Date: June 25, 1998 By: /s/ Thomas Siedler
------------------
Thomas Siedler,
Controller and Chairman
of the Administrative Committee
for the Plan
2
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS (modified cash basis)
FOR THE YEARS ENDED DECEMBER 31, 1997 AND
1996, AND SUPPLEMENTAL SCHEDULES
FOR THE YEAR ENDED DECEMBER 31, 1997, AND
INDEPENDENT AUDITORS' REPORT
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITORS' REPORT
Trustees and Participants
Central Garden & Pet Company
Investment Growth Plan
We have audited the accompanying statements of net assets available for benefits
(modified cash basis) of the Central Garden & Pet Company Investment Growth Plan
(the Plan) as of December 31, 1997 and 1996, and the related statements of
changes in net assets available for benefits (modified cash basis) for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 2, these financial statements and supplemental schedules
were prepared on a modified cash basis of accounting, which is a comprehensive
basis of accounting other than generally accepted accounting principles.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1997 and 1996, and the changes in net assets available for benefits for the
years then ended on the basis of accounting described in Note 2.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules (modified
cash basis) listed in the table of contents are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental information by fund is
presented for purposes of additional analysis rather than to present information
regarding the net assets available for benefits and changes in net assets
available for benefits of the individual funds and is not a required part of the
basic financial statements. These supplemental schedules and supplemental
information by fund are the responsibility of the Plan's
management. Such schedules and supplemental information by fund have been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/S/ Deloitte & Touche LLP
May 20, 1998
---
2
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH
SUPPLEMENTAL INFORMATION BY FUND (modified cash basis)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH
SUPPLEMENTAL INFORMATION BY FUND (modified cash basis)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
See notes to financial statements.
---
4
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH SUPPLEMENTAL INFORMATION BY FUND (modified cash basis)
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
---
5
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH SUPPLEMENTAL INFORMATION BY FUND (modified cash basis)
YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
---
6
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
NOTE 1: PLAN DESCRIPTION
The following brief description of the Central Garden & Pet Company Investment
Growth Plan (the Plan) is provided for general information purposes only.
Participants should refer to the Summary Plan Description for more complete
information.
GENERAL: The Plan is a 401(k) plan sponsored by Central Garden & Pet Company
(the Company). The Plan is intended to qualify under Sections 401(a) and
401(k) of the Internal Revenue Code (IRC). The purpose of the Plan is to
provide retirement and other benefits for employees of the Company. It is
subject to the provisions of the Employee Retirement Income Security Act of
1974. Employees whose compensation is not determined by a collective
bargaining agreement become eligible to participate in the Plan at age 21 or
older after at least 1,000 hours of service in a year.
CONTRIBUTIONS: Participants of the Plan can elect to defer pretax
contributions between 1% and 15% (up to a maximum of $9,500 in both 1997 and
1996) of compensation. The Company has contributed 25% and 30% of the first
6% of compensation contributed by participants to the Plan for 1997 and 1996,
respectively. The Plan provides that the Company's Board of Directors has the
right to change or discontinue the matching contribution at any time, at its
discretion. The 1997 Company matching contribution was contributed in 1998.
VESTING: Participants are immediately vested in their voluntary contributions
plus any associated earnings. Vesting in the Company contributed portion of
participants' accounts, plus any earnings, is based on years of continuous
service. A participant is 100% vested after five years of credited service.
PARTICIPANT ACCOUNTS: Each participant's account is credited with the
participant's contributions, an allocation of the Plan's investment income
and/or losses, and the Company's contributions. Allocation of the Company's
contributions is based on the participant's salary and length of service as
discussed under Contributions.
INVESTMENT OPTIONS: The trustee function is performed by Dreyfus Trust
Company. Dreyfus Retirement Services performs the recordkeeping of the Plan.
Pursuant to the Plan investment alternatives, the participants have a choice
of eight investment options. The investment options were changed during 1997.
The investments in the funds which are no longer available were transferred to
the corresponding new fund. The following are the available Plan choices and
descriptions obtained from the investment prospectus (or Plan description for
Common Stock Fund):
Capital Preservation Fund: Seeks high level of current income and stability
-------------------------
of principal. The fund portfolio primarily consists of guaranteed
investment contracts (GICs) and other stable value investments. The
investments are fixed income investments intended to have stable principal
value.
Dreyfus S&P 500 Index Fund: Seeks to provide investment results that
--------------------------
correspond to the price and yield performance of publicly traded stocks in
the aggregate, as represented by the S&P 500.
---
7
Dreyfus Strategic Income Fund: Seeks maximum current income by investing
-----------------------------
principally in a variety of income producing securities of both foreign and
domestic companies. The fund invests primarily in a variety of debt
securities as well as short-term money market instruments.
Dreyfus Appreciation Fund, Inc.: Seeks long-term capital growth consistent
-------------------------------
with preservation of capital. This is a common stock fund investing in
larger companies that have the potential to experience above average
earnings growth.
Templeton Foreign I Fund: Seeks long-term capital growth through a
------------------------
flexible policy of investing in stocks and debt obligations of companies
and governments outside the United States.
Heartland Value Fund: Seeks to achieve long-term capital appreciation by
--------------------
investing primarily in equity securities of small companies.
Crabbe Huson Real Estate Fund: Seeks to provide shareholders capital
-----------------------------
appreciation and income. Fund portfolio consists primarily of equity
securities, real estate investment trusts and other real estate industry
companies in mortgage-backed securities.
Central Garden & Pet Company Common Stock Fund: Invests in shares of
----------------------------------------------
common stock of the Company.
PARTICIPANT LOANS: Participant loans are available to active employees for up
to 50% of an employee's account balance, with a minimum of $1,000 and a
maximum of $50,000. Loan terms are a maximum of five years or, for the
purchase of a primary residence, a maximum of ten years. Participants are
allowed only one outstanding loan at a time. Loans are secured by the
participant's account balance and bear interest at a rate commensurate with
prevailing rates at the time the loan is made as determined quarterly by the
Plan administrator. As of December 31, 1997, there were 107 such loans, with
contractual interest rates ranging between 7% to 10% and maturity dates
ranging from November 17, 1997, to July 1, 2007.
DISTRIBUTION OF BENEFITS: Upon termination of service due to death,
disability, or retirement, a participant can elect to receive a lump sum
amount equal to the value of the participant's vested interest in his or her
account.
FORFEITURES: Forfeitures are used to reduce future Company matching
contributions.
PLAN TERMINATION: Although it has not expressed any intent to do so, the
Company may completely discontinue its contributions and terminate the Plan at
any time by resolution of its Board of Directors. In the event of Plan
termination or complete discontinuance of Company contributions, the interests
of all participants will become fully vested and will be distributed to each
participant.
TAX STATUS: The Plan obtained its latest determination letter on September 1,
1995, in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the IRC. The
Plan's Administrative Committee believes that the Plan is currently designed
and being operated in compliance with the applicable requirements of the IRC.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
ADMINISTRATIVE EXPENSES: Substantially all administrative expenses associated
with the Plan are shared by the Company and the Plan.
RECLASSIFICATIONS: Certain reclassifications have been made to the 1996
balances to conform with the 1997 presentation.
---
8
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION: The Plan's financial statements are prepared on the
modified cash basis of accounting, which is based on cash receipts and
disbursements, except for the recognition of the net appreciation or
depreciation in the fair value of investments at the end of the Plan year.
INVESTMENT VALUATION AND INCOME RECOGNITION: Investments in mutual funds and
common stock are stated at fair value, which is determined by quoted market
prices. The investment contracts are stated at contract value as the
contracts are fully benefit responsive. Participant loans are carried at the
unpaid principal balance, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on a cash basis. Dividends are recorded on the
ex-dividend date.
PAYMENT OF BENEFITS: Benefits are recorded when paid.
NOTE 3: INVESTMENTS
Investments that represent 5% or more of the Plan's net assets at December 31,
1997 and 1996, are separately identified in the following table:
NOTE 4: DUE TO PARTICIPANTS WHO HAVE WITHDRAWN
As of December 31, 1997 and 1996, net assets available for benefits included
benefits of $894,304 and $1,080,471, respectively, due to participants who have
withdrawn from participation in the Plan.
NOTE 5: PARTY-IN-INTEREST TRANSACTIONS
The Plan's investments include Central Garden & Pet Company common stock,
representing party-in-interest transactions that qualify as exempt prohibited
transactions.
---
9
NOTE 6: RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits as
reported in the financial statements to the Form 5500:
The following is a reconciliation of contributions made during the year ended
December 31, 1997, as listed in the financial statements to the Form 5500:
---
10
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
ITEM 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
---
11
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
ITEM 27d SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
Reportable transactions as defined in Section 2520.103.6 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA as
follows:
---
12