Annual report pursuant to Section 13 and 15(d)

Business Segment Data

v2.4.0.6
Business Segment Data
 12 Months Ended
Sep. 29, 2012
Business Segment Data [Abstract]  
Business Segment Data

18. Business Segment Data

The Company’s chief operating decision-makers are its Chief Executive Officer and the Chief Executive Officer and President of the Central Operating Companies. Operating segments are managed separately because each segment represents a strategic business that offers different products or services. The Company’s chief operating decision makers evaluate performance based on profit or loss from operations. The Company’s Corporate division is included in the following presentation since certain expenses of this division are not allocated separately to the two operating segments. Segment assets exclude cash equivalents, short-term investments and deferred taxes.

Management has determined that the Company has two operating segments which are also reportable segments based on the level at which the chief operating decision makers review the results of operations to make decisions regarding performance assessment and resource allocation. These operating segments are the Pet segment and the Garden segment. Substantially all of the Company’s assets and operations relate to its business in the United States.

The Pet segment consists of Four Paws Products, TFH Publications, Kaytee, Aquatics, Interpet, Pets International, Breeder’s Choice and Life Sciences. These businesses are engaged in the manufacturing, purchase, sale and delivery of internally and externally produced pet supplies, books and food principally to independent pet distributors, national and regional retail chains, grocery stores, mass merchants and bookstores. The Garden segment consists of Pennington Seed, Matthews Four Seasons, Grant’s, AMBRANDS, Lilly Miller, the Pottery Group, Gulfstream and GKI/Bethlehem Lighting. Products manufactured, designed and sourced, or distributed are products found typically in the lawn and garden sections of mass merchandisers, warehouse-type clubs, home improvement centers and nurseries and include grass seed, bird feed, clay pottery, outdoor wooden planters and trellises, herbicides and insecticides. These products are sold directly to national and regional retail chains, independent garden distributors, grocery stores, nurseries and garden supply retailers.

The Corporate division includes expenses associated with corporate functions and projects, certain employee benefits, goodwill, interest income, interest expense and intersegment eliminations.

The following table indicates each class of similar products which represented more than 10% of the Company’s consolidated net sales in the fiscal years presented (in millions).

 

                         

Category

   2012     2011     2010  

Pet supplies (excluding wild bird feed)

   $ 847.1     $ 773.1     $ 766.5  

Garden controls and fertilizer products

     281.7       260.0       255.5  

Wild bird feed

     205.1       197.5       168.9  

Other garden supplies

     185.7       212.1       196.0  

Grass seed

     180.4       185.9       136.7  
   

 

 

    

 

 

    

 

 

  

Total

   $ 1,700.0     $ 1,628.6     $ 1,523.6  
   

 

 

    

 

 

    

 

 

  

The Company’s largest customer represented approximately 17%, 16% and 17% of the total company net sales in fiscal 2012, 2011 and 2010, respectively, and represented approximately 30% of the Garden segment’s net sales in fiscal 2012, 28% in fiscal 2011 and 31% in fiscal 2010. Sales to the Company’s second largest customer represented approximately 9%, 12% and 10% of total company net sales in fiscal 2012, 2011 and 2010, respectively, and represented approximately 20% of our Garden segment’s net sales in fiscal 2012, 24% in fiscal 2011 and 22% in fiscal 2010. Sales to the Company’s third largest customer represented approximately 16% of our Garden segment’s net sales in fiscal 2012, 15% in fiscal 2011 and 18% in fiscal 2010. The Pet segment’s largest customer represented approximately 12% of our Pet segment’s net sales in both fiscal 2012 and fiscal 2011 and 11% in fiscal 2010.

 

Financial information relating to the Company’s business segments for each of the three most recent fiscal years is presented in the table below (amounts in thousands):

 

                         
    Fiscal Year Ended  
    September 29,
2012		     September 24,
2011 		    September 25,
2010 		 

Net sales:

                        

Pet segment

   $ 930,753     $ 851,307     $ 840,576  

Garden segment

     769,260       777,345       683,072  
   

 

 

    

 

 

    

 

 

  

Total

   $ 1,700,013     $ 1,628,652     $ 1,523,648  
   

 

 

    

 

 

    

 

 

  

Income (loss) from operations:

                        

Pet segment

   $ 87,650     $ 77,623     $ 97,893  (1) 

Garden segment

     40,376       50,013       52,995  

Corporate

     (53,605 )      (42,461 )      (41,814 ) 
   

 

 

    

 

 

    

 

 

  

Total

     74,421       85,175       109,074  

Interest expense

     (40,315 )      (38,044 )      (33,706 ) 

Interest income

     145       296       119  

Other income

     678       550       419  
   

 

 

    

 

 

    

 

 

  

Income before income taxes and noncontrolling interest

     34,929       47,977       75,906  

Income taxes

     12,816       19,595       28,110  
   

 

 

    

 

 

    

 

 

  

Net income including noncontrolling interest

     22,113       28,382       47,796  

Net income attributable to noncontrolling interest

     940       59       1,963  
   

 

 

    

 

 

    

 

 

  

Net income attributable to Central Garden & Pet Company

   $ 21,173     $ 28,323     $ 45,833  
   

 

 

    

 

 

    

 

 

  

Assets:

                        

Pet segment

   $ 411,059     $ 396,637     $ 385,894  

Garden segment

     341,716       350,234       323,387  

Corporate and eliminations

     396,772       346,132       421,603  
   

 

 

    

 

 

    

 

 

  

Total

   $ 1,149,547     $ 1,093,003     $ 1,130,884  
   

 

 

    

 

 

    

 

 

  

Depreciation and amortization:

                        

Pet segment

   $ 14,507     $ 14,479     $ 15,422  

Garden segment

     6,213       5,986       6,107  

Corporate

     9,705       8,101       7,340  
   

 

 

    

 

 

    

 

 

  

Total

   $ 30,425     $ 28,566     $ 28,869  
   

 

 

    

 

 

    

 

 

  

Expenditures for long-lived assets:

                        

Pet segment

   $ 15,540     $ 9,953     $ 8,216  

Garden segment

     4,138       5,902       2,984  

Corporate

     19,914       15,708       12,990  
   

 

 

    

 

 

    

 

 

  

Total

   $ 39,592     $ 31,563     $ 24,190  
   

 

 

    

 

 

    

 

 

  

  

 

Noncontrolling interest is associated with the Garden segment.

 

(1) Includes indefinite-lived intangible asset impairment of $12,000.