Central Garden & Pet Company Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Consolidating Condensed Financial Information of Guarantor Subsidiaries

Consolidating Condensed Financial Information of Guarantor Subsidiaries

9 Months Ended

Jun. 23, 2012

Consolidating Condensed Financial Information of Guarantor Subsidiaries [Abstract]

Consolidating Condensed Financial Information of Guarantor Subsidiaries

11.

Consolidating Condensed Financial Information of Guarantor Subsidiaries

Certain 100% wholly-owned subsidiaries of the Company (as listed below, collectively the “Guarantor Subsidiaries”) have guaranteed fully and unconditionally, on a joint and several basis, the obligation to pay principal and interest on the Company’s $450 million 8.25% Senior Subordinated Notes (the “Notes”) due March 1, 2018. Certain subsidiaries and operating divisions are not guarantors of the Notes and have been included in the financial results of the Parent in the information below. These Non-Guarantor entities are not material to the Parent. Those subsidiaries that are guarantors and co-obligors of the Notes are as follows:

Farnam Companies, Inc.

Four Paws Products Ltd.

Grant Laboratories, Inc.

Gulfstream Home & Garden, Inc.

Interpet USA, LLC

Kaytee Products, Inc.

Matthews Redwood & Nursery Supply, Inc.

Matson, LLC

New England Pottery, LLC

Pennington Seed, Inc. (including Pennington Seed, Inc. of Nebraska, Gro Tec, Inc., Seeds West, Inc., All-Glass Aquarium Co., Inc. and Cedar Works, LLC.)

Pets International, Ltd.

T.F.H. Publications, Inc.

Wellmark International (including B2E Corporation and B2E Biotech LLC)

In lieu of providing separate audited financial statements for the Guarantor Subsidiaries, the Company has included the accompanying consolidating condensed financial statements based on the Company’s understanding of the Securities and Exchange Commission’s interpretation and application of Rule 3-10 of the Securities and Exchange Commission’s Regulation S-X.

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

Three Months Ended June 23, 2012

(in thousands)

(unaudited)


	Parent			Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	161,734		$	398,615	$	(26,541	)	$	533,808
Cost of products sold and occupancy		111,510			268,187		(26,541	)		353,156

Gross profit		50,224			130,428		0			180,652
Selling, general and administrative expenses		41,061			90,622		0			131,683

Income from operations		9,163			39,806		0			48,969
Interest – net		(10,727	)		32		0			(10,695	)
Other income (loss)		(4,494	)		4,596		0			102

Income (loss) before income taxes		(6,058	)		44,434		0			38,376
Income taxes (tax benefit)		(2,361	)		16,915		0			14,554

Income (loss) including noncontrolling interest		(3,697	)		27,519		0			23,822
Income attributable to noncontrolling interest		1,123			0		0			1,123

Income (loss) attributable to Central Garden & Pet Co. before equity in undistributed income of guarantor subsidiaries		(4,820	)		27,519		0			22,699
Equity in undistributed income of guarantor subsidiaries		27,519			0		(27,519	)		0

Net income attributable to Central Garden & Pet Co.	$	22,699		$	27,519	$	(27,519	)	$	22,699

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

Three Months Ended June 25, 2011

(in thousands)

(unaudited)


	Parent			Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	157,449		$	358,384	$	(31,530	)	$	484,303
Cost of products sold and occupancy		118,876			247,568		(31,530	)		334,914

Gross profit		38,573			110,816		0			149,389
Selling, general and administrative expenses		38,002			74,793		0			112,795

Income from operations		571			36,023		0			36,594
Interest – net		(9,947	)		139		0			(9,808	)
Other income (loss )		(576	)		894		0			318

Income (loss) before income taxes		(9,952	)		37,056		0			27,104
Income taxes (tax benefit)		(3,629	)		13,508		0			9,879

Income (loss) including noncontrolling interest		(6,323	)		23,548		0			17,225
Income attributable to noncontrolling interest		144			0		0			144

Income (loss) attributable to Central Garden & Pet Co. before equity in undistributed income of guarantor subsidiaries		(6,467	)		23,548		0			17,081
Equity in undistributed income of guarantor subsidiaries		23,548			0		(23,548	)		0

Net income attributable to Central Garden & Pet Co.	$	17,081		$	23,548	$	(23,548	)	$	17,081

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

Nine Months Ended June 23, 2012

(in thousands)

(unaudited)


	Parent			Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	416,119		$	952,470	$	(65,812	)	$	1,302,777
Cost of products sold and occupancy		298,413			661,090		(65,812	)		893,691

Gross profit		117,706			291,380		0			409,086
Selling, general and administrative expenses		103,123			223,052		0			326,175

Income from operations		14,583			68,328		0			82,911
Interest – net		(30,769	)		115		0			(30,654	)
Other income (expense)		(5,161	)		5,142		0			(19	)

Income (loss) before income taxes		(21,347	)		73,585		0			52,238
Income tax (tax benefit)		(7,962	)		27,678		0			19,716

Income (loss) including noncontrolling interest		(13,385	)		45,907		0			32,522
Income attributable to noncontrolling interest		1,290			0		0			1,290

Income (loss) attributable to Central Garden & Pet Co. before equity in undistributed income of guarantor subsidiaries		(14,675	)		45,907		0			31,232
Equity in undistributed income of guarantor subsidiaries		45,907			0		(45,907	)		0

Net income attributable to Central Garden & Pet Co.	$	31,232		$	45,907	$	(45,907	)	$	31,232

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

Nine Months Ended June 25, 2011

(in thousands)

(unaudited)


	Parent			Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	392,617		$	966,295	$	(107,166	)	$	1,251,746
Cost of products sold and occupancy		290,338			672,859		(107,166	)		856,031

Gross profit		102,279			293,436		0			395,715
Selling, general and administrative expenses		97,411			208,563		0			305,974

Income from operations		4,868			84,873		0			89,741
Interest – net		(28,303	)		306		0			(27,997	)
Other income (loss)		(2,611	)		2,727		0			116

Income (loss) before income taxes		(26,046	)		87,906		0			61,860
Income taxes (tax benefit)		(9,166	)		31,118		0			21,952

Income (loss) including noncontrolling interest		(16,880	)		56,788		0			39,908
Income attributable to noncontrolling interest		653			0		0			653

Income (loss) attributable to Central Garden & Pet Co. before equity in undistributed income of guarantor subsidiaries		(17,533	)		56,788		0			39,255
Equity in undistributed income of guarantor subsidiaries		56,788			0		(56,788	)		0

Net income attributable to Central Garden & Pet Co.	$	39,255		$	56,788	$	(56,788	)	$	39,255

CONSOLIDATING CONDENSED BALANCE SHEET

June 23, 2012

(in thousands)

(unaudited)


	Parent		Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	35,163	$	5,536	$	0		$	40,699
Short term investments		17,820		0		0			17,820
Accounts receivable, net		82,218		173,163		(9,601	)		245,780
Inventories		102,751		232,045		0			334,796
Prepaid expenses and other assets		18,922		27,185		0			46,107

Total current assets		256,874		437,929		(9,601	)		685,202
Land, buildings, improvements and equipment, net		78,025		107,200		0			185,225
Goodwill		0		210,223		0			210,223
Investment in guarantors		663,351		0		(663,351	)		0
Deferred income taxes and other assets		40,053		59,015		0			99,068

Total	$	1,038,303	$	814,367	$	(672,952	)	$	1,179,718


LIABILITIES AND EQUITY
Accounts payable	$	37,202	$	97,510	$	(9,601	)	$	125,111
Accrued expenses and other current liabilities		56,175		50,990		0			107,165

Total current liabilities		93,377		148,500		(9,601	)		232,276
Long-term debt		449,406		124		0			449,530
Other long-term obligations		21,086		2,392		0			23,478
Shareholders’ equity attributable to Central Garden & Pet Co.		473,138		663,351		(663,351	)		473,138
Noncontrolling interest		1,296		0		0			1,296

Total equity		474,434		663,351		(663,351	)		474,434

Total	$	1,038,303	$	814,367	$	(672,952	)	$	1,179,718

CONSOLIDATING CONDENSED BALANCE SHEET

June 25, 2011

(in thousands)

(unaudited)


	Parent		Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	10,121	$	1,112	$	0		$	11,233
Short term investments		15,320		0		0			15,320
Accounts receivable, net		79,252		185,662		(7,496	)		257,418
Inventories		114,828		228,960		0			343,788
Prepaid expenses and other assets		17,502		22,593		0			40,095

Total current assets		237,023		438,327		(7,496	)		667,854
Land, buildings, improvements and equipment, net		69,255		101,932		0			171,187
Goodwill		0		209,348		0			209,348
Investment in guarantors		707,281		0		(707,281	)		0
Other assets		24,965		82,378		0			107,343

Total	$	1,038,524	$	831,985	$	(714,777	)	$	1,155,732


LIABILITIES AND EQUITY
Accounts payable	$	37,472	$	85,404	$	(7,496	)	$	115,380
Accrued expenses and other liabilities		55,413		37,463		0			92,876

Total current liabilities		92,885		122,867		(7,496	)		208,256
Long-term debt		450,163		103		0			450,266
Other long-term obligations		2,370		1,734		0			4,104
Shareholders’ equity attributable to Central Garden & Pet Co.		492,506		707,281		(707,281	)		492,506
Noncontrolling interest		600		0		0			600

Total equity		493,106		707,281		(707,281	)		493,106

Total	$	1,038,524	$	831,985	$	(714,777	)	$	1,155,732

CONSOLIDATING CONDENSED BALANCE SHEET

September 24, 2011

(in thousands)

(unaudited)


	Parent		Guarantor Subsidiaries		Eliminations			Consolidated

ASSETS
Cash and cash equivalents	$	10,633	$	1,398	$	0		$	12,031
Short term investments		17,820		0		0			17,820
Accounts receivable, net		47,698		153,306		(5,587	)		195,417
Inventories		102,861		226,685		0			329,546
Prepaid expenses and other assets		29,077		18,695		0			47,772

Total current assets		208,089		400,084		(5,587	)		602,586
Land, buildings, improvements and equipment, net		72,505		103,897		0			176,402
Goodwill		0		210,223		0			210,223
Investment in guarantors		645,876		0		(645,876	)		0
Other assets		38,622		65,170		0			103,792

Total	$	965,092	$	779,374	$	(651,463	)	$	1,093,003


LIABILITIES AND EQUITY
Accounts payable	$	28,072	$	94,039	$	(5,587	)	$	116,524
Accrued expenses and other liabilities		37,825		37,582		0			75,407

Total current liabilities		65,897		131,621		(5,587	)		191,931
Long-term debt		435,245		85		0			435,330
Other long-term obligations		7,168		1,792		0			8,960
Shareholders’ equity attributable to Central Garden & Pet Co.		456,776		645,876		(645,876	)		456,776
Noncontrolling interest		6		0		0			6

Total equity		456,782		645,876		(645,876	)		456,782

Total	$	965,092	$	779,374	$	(651,463	)	$	1,093,003

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

Nine Months Ended June 23, 2012

(in thousands)

(unaudited)


	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	64,057		$	46,004		$	(45,907	)	$	64,154

Additions to property and equipment		(13,607	)		(13,323	)		0			(26,930	)
Investment in guarantor subsidiaries		(17,475	)		(28,432	)		45,907			0

Net cash used by investing activities		(31,082	)		(41,755	)		45,907			(26,930	)

Proceeds from issuance of long-term debt		49,288			0			0			49,288
Repayments of long-term debt		(175	)		(91	)		0			(266	)
Borrowings under revolving line of credit		304,000			0			0			304,000
Repayments under revolving line of credit		(339,000	)		0			0			(339,000	)
Repurchase of common stock		(23,151	)		0			0			(23,151	)
Proceeds from issuance of common stock		1,291			0			0			1,291
Deferred financing costs		(1,715	)		0			0			(1,715	)
Excess tax benefits from stock-based awards		938			0			0			938

Net cash used by financing activities		(8,524	)		(91	)		0			(8,615	)
Effect of exchange rate changes on cash		79			(20	)		0			59

Net decrease in cash and cash equivalents		24,530			4,138			0			28,668
Cash and cash equivalents at beginning of period		10,633			1,398			0			12,031

Cash and cash equivalents at end of period	$	35,163		$	5,536		$	0		$	40,699

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

Nine Months Ended June 25, 2011

(in thousands)

(unaudited)


	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	61,141		$	(5,856	)	$	(56,788	)	$	(1,503	)

Additions to property and equipment		(10,901	)		(9,290	)		0			(20,191	)
Businesses acquired, net of cash acquired		(23,403	)		(1,029	)		0			(24,432	)
Investment in guarantor subsidiaries		(73,372	)		16,584			56,788			0

Net cash provided (used by) investing activities		(107,676	)		6,265			56,788			(44,623	)

Repayments of long-term debt		(93	)		(128	)		0			(221	)
Proceeds from revolver		593,000			0			0			593,000
Repayments of revolver		(543,000	)		0			0			(543,000	)
Repurchase of common stock		(83,602	)		0			0			(83,602	)
Proceeds from issuance of common stock		1,436			0			0			1,436
Payment of financing costs		(1,034	)		0			0			(1,034	)
Excess tax benefits from stock-based awards		791			0			0			791
Distribution to noncontrolling interest		(1,500	)		0			0			(1,500	)

Net cash used by financing activities		(34,002	)		(128	)		0			(34,130	)

Effect of exchange rate changes on cash		394			(365	)		0			29

Net decrease in cash and cash equivalents		(80,143	)		(84	)		0			(80,227	)
Cash and cash equivalents at beginning of period		90,265			1,195			0			91,460

Cash and cash equivalents at end of period	$	10,122		$	1,111		$	0		$	11,233

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References + Details