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 - --------------------------------------------------------------------------------
TABLE OF CONTENTS Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS (MODIFIED CASH BASIS) FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996: Statements of net assets available for benefits, with supplemental information by fund 3 Statements of changes in net assets available for benefits, with supplemental information by fund 5 Notes to financial statements 7 SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED DECEMBER 31, 1997: Item 27a Schedule of assets held for investment purposes 11 Item 27d Schedule of reportable transactions 12
[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 - --------------------------------------------------------------------------------
Supplemental information ---------------------------------------------------------------------------------- Central Garden & Crabbe Dreyfus Capital Pet Company Huson Dreyfus Dreyfus Strategic Preservation Common Real Estate Appreciation S&P 500 Income Fund Stock Fund Fund Fund Index Fund Fund ----------------- ------------ ----------- ------------ ----------- --------- ASSETS: Investments at fair value: Mutual fund $ $ $102,559 $2,538,712 $5,524,009 $171,688 Common stock 7,310,074 Participant loans ---------- -------- ---------- ---------- -------- 7,310,074 102,559 2,538,712 5,524,009 171,688 Investments at contract value: Guaranteed investment contracts 4,941,215 ---------- ---------- -------- ---------- ---------- -------- Total investments 4,941,215 7,310,074 102,559 2,538,712 5,524,009 171,688 Receivables: Due from securities sold 15,800 11,998 37,511 1,234 Prior trustee 557 ---------- ---------- ---------- -------- Total receivables 16,357 11,998 37,511 1,234 Cash (9,517) (10,432) 68,905 ---------- ---------- -------- ---------- ---------- -------- Total assets 4,948,055 7,311,640 102,559 2,576,223 5,592,914 172,922 LIABILITIES: Accounts payable Total liabilities NET ASSETS AVAILABLE FOR BENEFITS $4,948,055 $7,311,640 $102,559 $2,576,223 $5,592,914 $172,922 ========== ========== =========== ============ =========== =========
Supplemental information ------------------------------------------------------------------ Heartland Templeton Value Foreign I Participant Fund Fund loans Other Total --------- --------- ----------- --------- ------------- ASSETS: Investments at fair value: Mutual fund $522,782 $189,520 $ $15,078 $ 9,064,348 Common stock 7,310,074 Participant loans 411,383 411,383 -------- -------- --------- ---------- ----------- 522,782 189,520 411,383 15,078 16,785,805 Investments at contract value: Guaranteed investment contracts 4,941,215 -------- -------- --------- ---------- ----------- Total investments 522,782 189,520 411,383 15,078 21,727,020 Receivables: Due from securities sold 761 67,304 Prior trustee 617 1,174 --------- -------- --------- ---------- ----------- Total receivables 761 617 68,478 Cash 837 (1,278) 48,515 --------- -------- --------- ------- ----------- Total assets 523,619 190,281 411,383 14,417 21,844,013 LIABILITIES: Accounts payable (9,278) (9,278) --------- -------- --------- ------- ----------- Total liabilities (9,278) (9,278) --------- -------- --------- ------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $523,619 $190,281 $411,383 $ 5,139 $21,834,735 ========= ========= ========= ======= =========== See notes to financial statements --- 3
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 - --------------------------------------------------------------------------------
Supplemental information --------------------------------------------------------------------- Central Dreyfus Garden & Short- Capital Pet Company Dreyfus Dreyfus Intermediate Preservation Common Growth & S&P 500 Government Fund Stock Fund Income Fund Index Fund Fund ---------------- ----------- ----------- ----------- ------------ ASSETS: Investments at fair value: Mutual fund $ - $ 11,634 $3,199,597 $1,740,870 $991,650 Common stock 5,145,185 Participant loans ----------- ----------- ----------- ------------ Total investments at fair value 5,156,819 3,199,597 1,740,870 991,650 Investments at contract value: Guaranteed investment contracts 3,720,056 ---------------- ----------- ----------- ----------- ------------ NET ASSETS AVAILABLE FOR BENEFITS $3,720,056 $5,156,819 $3,199,597 $1,740,870 $991,650 ================ ========== =========== =========== ============
Supplemental information ------------------------------------------------ Fidelity Magellan Participant Fund loans Other Total ----------- ----------- -------- ------------ ASSETS: Investments at fair value: Mutual fund $2,118,375 $ $27,747 $ 8,089,873 Common stock 5,145,185 Participant loans 407,516 407,516 ----------- ----------- -------- ------------ Total investments at fair value 2,118,375 407,516 27,747 13,642,574 Investments at contract value: Guaranteed investment contracts 3,720,056 ----------- ----------- -------- ------------ NET ASSETS AVAILABLE FOR BENEFITS $2,118,375 $407,516 $27,747 $17,362,630 =========== =========== ======== ===========
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 - --------------------------------------------------------------------------------
Supplemental information --------------------------------------------------------------------------- Central Garden & Crabbe Capital Pet Company Huson Dreyfus Dreyfus Preservation Common Real Estate Growth & S&P 500 Fund Stock Fund Fund Income Fund Index Fund ------------------- ----------- ----------- ----------- ----------- ADDITIONS TO NET ASSETS: Investment income: Net appreciation (depreciation) in fair value of investments $ 1,225 $1,561,731 $ (5,448) $ 311,470 $ 666,869 Interest and dividend income 255,361 2,213 13,302 27,642 147,493 ----------- ---------- -------- ----------- ---------- Total investment income 256,586 1,563,944 7,854 339,112 814,362 CONTRIBUTIONS: Employer 294,386 Participants 766,335 480,872 15,285 244,584 385,600 ----------- ---------- -------- ----------- ---------- Total contributions 766,335 775,258 15,285 244,584 385,600 ----------- ---------- -------- ----------- ---------- Total additions 1,022,921 2,339,202 23,139 583,696 1,199,962 DEDUCTIONS FROM NET ASSETS: Benefits paid to participants (1,169,300) (281,445) (1,007) (62,749) (85,974) Administrative expenses (6,876) (6,981) (71) (531) (7,184) ----------- ---------- -------- ----------- ---------- Total deductions (1,176,176) (288,426) (1,078) (63,280) (93,158) ----------- ---------- -------- ----------- ---------- NET INCREASE (DECREASE) BEFORE TRANSFERS (153,255) 2,050,776 22,061 520,416 1,106,804 NET TRANSFERS: Interfund transfers 1,233,641 104,045 80,498 (3,720,013) 2,745,240 ----------- ---------- -------- ----------- ---------- NET INCREASE (DECREASE) 1,080,386 2,154,821 102,559 (3,199,597) 3,852,044 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 3,720,056 5,156,819 3,199,597 1,740,870 Transfer from prior trustee 147,613 ----------- ---------- -------- ----------- ---------- End of year $ 4,948,055 $7,311,640 $102,559 $ - $5,592,914 =========== ========== ======== =========== ==========
Supplemental information --------------------------------------------------------------------------- Dreyfus Short- Dreyfus Intermediate Dreyfus Strategic Fidelity Templeton Government Appreciation Income Magellan Heartland Foreign I Fund Fund Fund Fund Fund Fund --------- ---------- -------- ----------- -------- -------- ADDITIONS TO NET ASSETS: Investment income: Net appreciation (depreciation) in fair value of investments $ (11,184) $ 122,666 $ 3,353 $ 290,140 $(69,845) $(29,957) Interest and dividend income 28,033 25,352 4,146 56,542 67,715 18,352 --------- ---------- -------- ----------- -------- -------- Total investment income 16,849 148,018 7,499 346,682 (2,130) (11,605) CONTRIBUTIONS: Employer Participants 76,423 102,439 37,668 200,572 39,839 35,033 --------- ---------- -------- ----------- -------- -------- Total contributions 76,423 102,439 37,668 200,572 39,839 35,033 --------- ---------- -------- ----------- -------- -------- Total additions 93,272 250,457 45,167 547,254 37,709 23,428 DEDUCTIONS FROM NET ASSETS: Benefits paid to participants (164,474) (51,215) (443) (38,293) (445) (372) Administrative expenses (175) (2,983) (135) (1,053) (306) (141) --------- ---------- -------- ----------- -------- -------- Total deductions (164,649) (54,198) (578) (39,346) (751) (513) --------- ---------- -------- ----------- -------- -------- NET INCREASE (DECREASE) BEFORE TRANSFERS (71,377) 196,259 44,589 507,908 36,958 22,915 NET TRANSFERS: Interfund transfers (920,273) 2,379,964 128,333 (2,626,283) 486,661 167,366 --------- ---------- -------- ----------- -------- -------- NET INCREASE (DECREASE) (991,650) 2,576,223 172,922 (2,118,375) 523,619 190,281 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 991,650 2,118,375 Transfer from prior trustee --------- ---------- -------- ----------- -------- -------- End of year $ - $2,576,223 $172,922 $ - $523,619 $190,281 ========= ========== ======== =========== ======== ========
Supplemental information ------------------------------------- Participant loans Other Total ADDITIONS TO NET ASSETS: Investment income: Net appreciation (depreciation) in fair value of investments $ $ (1) $ 2,841,019 Interest and dividend income 30,986 909 678,046 -------- --------- ----------- Total investment income 30,986 908 3,519,065 CONTRIBUTIONS: Employer 294,386 Participants 78,633 2,463,283 -------- --------- ----------- Total contributions 78,633 2,757,669 -------- --------- ----------- Total additions 30,986 79,541 6,276,734 DEDUCTIONS FROM NET ASSETS: Benefits paid to participants (54,287) 57,894 (1,852,110) Administrative expenses (24,895) (51,331) -------- --------- ----------- Total deductions (54,287) 32,999 (1,903,441) -------- --------- ----------- NET INCREASE (DECREASE) BEFORE TRANSFERS (23,301) 112,540 4,373,293 NET TRANSFERS: Interfund transfers 27,168 (135,148) (48,801) -------- --------- ----------- NET INCREASE (DECREASE) 3,867 (22,608) 4,324,492 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 407,516 27,747 17,362,630 Transfer from prior trustee 147,613 -------- --------- ----------- End of year $411,383 $ 5,139 $21,834,735 ======== ========= =========== See notes to financial statements.
--- 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 - --------------------------------------------------------------------------------
Supplemental information ----------------------------------------------------------- Central Garden & Capital Pet Company Dreyfus Dreyfus Preservation Common Growth & S&P 500 Fund Stock Fund Income Fund Index Fund ----------------- ------------ ------------ ------------ ADDITIONS TO NET ASSETS: Investment income: Net appreciation (depreciation) in fair value of investments $ - $2,675,788 $ (50,641) $ 182,387 Interest and dividend income 219,444 452,986 78,261 ---------------- ------------ ---------- ---------- Total investment income 219,444 2,675,788 402,345 260,648 CONTRIBUTIONS: Employer 231,189 Participants 225,991 160,366 453,704 207,263 ---------------- ---------- ---------- ---------- Total contributions 225,991 391,555 453,704 207,263 ---------------- ---------- ---------- ---------- Total additions 445,435 3,067,343 856,049 467,911 DEDUCTIONS FROM NET ASSETS: Benefits paid to participants (376,324) (163,545) (181,819) (27,957) Administrative expenses (7,023) (3,578) (5,467) (2,058) ---------------- ---------- ---------- ---------- Total deductions (383,347) (167,123) (187,286) (30,015) ---------------- ---------- ---------- ---------- NET INCREASE BEFORE TRANSFERS 62,088 2,900,220 668,763 437,896 NET TRANSFERS: Interfund transfers (290,241) 442,270 (100,344) 425,557 ---------------- ---------- ---------- ---------- NET INCREASE (DECREASE) (228,153) 3,342,490 568,419 863,453 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 3,948,209 1,814,329 2,631,178 877,417 ---------------- ---------- ---------- ---------- End of year $3,720,056 $5,156,819 $3,199,597 $1,740,870 ================ ========== ========== ==========
Supplemental information ------------------------------------------------------------------------------ Dreyfus Short- Intermediate Fidelity Government Magellan Participant Fund Fund loans Other Total ------------- ----------------- --------------- ----------- --------------- ADDITIONS TO NET ASSETS: Investment income: Net appreciation (depreciation) in fair value of investments $ (20,635) $ (114,402) $ $ $ 2,672,497 Interest and dividend income 59,118 342,978 25,252 1,447 1,179,486 ------------- ----------------- --------------- ----------- --------------- Total investment income 38,483 228,576 25,252 1,447 3,851,983 CONTRIBUTIONS: Employer 231,189 Participants 153,150 485,795 36,927 1,723,196 ------------- ----------------- --------------- ----------- --------------- Total contributions 153,150 485,795 36,927 1,954,385 ------------- ----------------- --------------- ----------- --------------- Total additions 191,633 714,371 25,252 38,374 5,806,368 DEDUCTIONS FROM NET ASSETS: Benefits paid to participants (69,269) (63,766) (23,261) (905,941) Administrative expenses (1,907) (3,375) 18,318 (5,090) ------------- ----------------- --------------- ----------- --------------- Total deductions (71,176) (67,141) (23,261) 18,318 (911,031) ------------- ----------------- --------------- ----------- --------------- NET INCREASE BEFORE TRANSFERS 120,457 647,230 1,991 56,692 4,895,337 NET TRANSFERS: Interfund transfers (126,605) (451,702) 134,669 (33,604) ------------- ----------------- --------------- ----------- --------------- NET INCREASE (DECREASE) (6,148) 195,528 136,660 23,088 4,895,337 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 997,798 1,922,847 270,856 4,659 12,467,293 ------------- ----------------- --------------- ----------- --------------- End of year $ 991,650 $2,118,375 $407,516 $ 27,747 $17,362,630 ============= ================ =============== =========== ============== See notes to financial statements.
--- 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:
1997 1996 --------------- --------------- Capital Preservation Fund $4,941,215 $3,720,056 Central Garden & Pet Company Common Stock Fund 7,310,074 5,145,185 Dreyfus Growth & Income Fund 3,199,597 Dreyfus Appreciation Fund 2,538,712 Dreyfus S&P 500 Index Fund 5,524,009 1,740,870 Dreyfus Short-Intermediate Government Fund 991,650 Fidelity Magellan Fund 2,118,375
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:
December 31, 1997 1996 ----------------- ------------------ Net assets available for benefits as listed in the financial statements $21,834,735 $17,362,630 Employer contributions receivable 352,800 294,386 Refund of excess contributions (48,000) ----------- ----------- Net assets available for benefits as listed in the Form 5500 $22,187,535 $17,609,016 =========== ===========
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: Contributions as listed in the financial statements $2,757,669 Add: Employer contributions paid in 1998 352,800 Less: Employer contributions paid in 1997 (294,386) Rollovers (reported as transfers on the Form 5500) (459,687) ---------- Contributions as listed in the Form 5500 $2,356,396 ==========
--- 10 CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN ITEM 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1997 - --------------------------------------------------------------------------------
Number of shares or Fair Asset description par value Cost value - ---------------------------------------------- --------------- ----------------- ----------------- Capital Preservation Fund 4,941,215 $ 4,941,215 $ 4,941,215 Central Garden & Pet Company Stock Fund 278,479 4,092,368 7,310,074 Crabbe Huson Real Estate Fund 8,031 108,074 102,559 Dreyfus Appreciation Fund 78,404 2,490,139 2,538,712 Dreyfus S&P 500 Index Fund 195,195 4,830,937 5,524,009 Dreyfus Strategic Income Fund 11,477 169,934 171,688 Heartland Value Fund 15,435 596,858 522,782 Templeton Foreign I Fund 19,047 215,815 189,520 Participant loans 411,383 411,383 Other 15,077 15,077 ----------- ----------- $17,871,800 $21,727,020 =========== ===========
--- 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:
Purchases --------- Identity of party involved Description Transactions Cost - ------------------------------------------ --------------- ------------ --------------- Series of transactions: Capital Preservation Fund Mutual fund 123 $4,370,151 Fidelity Magellan Fund Mutual fund 27 319,247 Dreyfus Growth & Income Fund Mutual fund 26 336,687 Dreyfus S&P 500 Index Fund Mutual fund 99 4,736,186 Central Garden & Pet Company Stock Fund Company stock 84 2,037,403 Dreyfus Short-Intermediate Mutual fund 20 200,352 Government Fund Dreyfus Liquid Asset Fund Liquidity fund 510 4,358,815 Dreyfus Appreciation Fund Mutual fund 55 2,874,743 TBC Inc. Pooled Employee Fund Liquidity fund 27 750,956 Single transactions: Fidelity Magellan Fund Mutual fund Dreyfus Growth & Income Fund Mutual fund Dreyfus Short-Intermediate Mutual fund Government Fund Dreyfus Appreciation Fund Mutual fund 1 2,397,473 Dreyfus Peoples Index Fund Mutual fund 1 3,383,453
Sales ----- Identity of party involved Transactions Amounts - ------------------------------------------ ------------ --------------- Series of transactions: Capital Preservation Fund 176 $3,222,761 Fidelity Magellan Fund 51 2,727,762 Dreyfus Growth & Income Fund 74 3,847,754 Dreyfus S&P 500 Index Fund 96 1,165,372 Central Garden & Pet Company Stock Fund 71 2,392,912 Dreyfus Short-Intermediate 57 1,180,818 Government Fund Dreyfus Liquid Asset Fund 194 4,370,781 Dreyfus Appreciation Fund 32 198,318 TBC Inc. Pooled Employee Fund 23 750,956 Single transactions: Fidelity Magellan Fund 1 2,397,473 Dreyfus Growth & Income Fund 1 3,383,453 Dreyfus Short-Intermediate 1 900,300 Government Fund Dreyfus Appreciation Fund Dreyfus Peoples Index Fund
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