Central Garden & Pet Company Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Consolidating Condensed Financial Information of Guarantor Subsidiaries

Consolidating Condensed Financial Information of Guarantor Subsidiaries

12 Months Ended

Sep. 29, 2012

Consolidating Condensed Financial Information of Guarantor Subsidiaries [Abstract]

Consolidating Condensed Financial Information of Guarantor Subsidiaries

19. 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.

Gulfstream Home & Garden, Inc.

Kaytee Products, Inc.

Matson, LLC

New England Pottery, LLC

Pennington Seed, Inc. (including Gro Tec, Inc. and All-Glass Aquarium Co., Inc.)

Pets International, Ltd.

T.F.H. Publications, Inc.

Wellmark International (including B2E Corporation and B2E Biotech LLC)

During fiscal 2012, the Company consolidated certain of its legal entities into the Parent. In fiscal years 2011 and 2010, the following were included as Guarantor Subsidiaries because they were separate legal entities at that time:

Grant Laboratories, Inc.

Interpet USA, LLC

Matthews Redwood & Nursery Supply, Inc.

Fiscal 2012 financial results reflect these entities as part of the Parent. Fiscal 2011 and 2010 financial results presented herein have been restated to reflect the current Guarantor structure.

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 Fiscal Year Ended September 29, 2012 (in thousands)
	Parent			Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	527,901		$	1,244,430	$	(72,318	)	$	1,700,013
Cost of goods sold and occupancy		383,990			874,183		(72,318	)		1,185,855

Gross profit		143,911			370,247		0			514,158
Selling, general and administrative expenses		144,171			295,566		0			439,737

Income (loss) from operations		(260	)		74,681		0			74,421
Interest – net		(40,324	)		154		0			(40,170	)
Other income (expense)		(3,764	)		4,442		0			678

Income (loss) before income taxes and noncontrolling interest		(44,348	)		79,277		0			34,929
Income taxes (tax benefit)		(15,698	)		28,514		0			12,816

Net income (loss) including noncontrolling interest		(28,650	)		50,763		0			22,113
Net income attributable to noncontrolling interest		940			0		0			940

Net income (loss) attributable to Central Garden & Pet Company before equity in undistributed income of guarantor subsidiaries		(29,590	)		50,763		0			21,173
Equity in undistributed income of guarantor subsidiaries		50,763			0		(50,763	)		0

Net income attributable to Central Garden & Pet Company	$	21,173		$	50,763	$	(50,763	)	$	21,173


	CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Fiscal Year Ended September 24, 2011 (in thousands)
	Parent			Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	500,668		$	1,244,207	$	(116,223	)	$	1,628,652
Cost of goods sold and occupancy		374,215			876,741		(116,223	)		1,134,733

Gross profit		126,453			367,466		0			493,919
Selling, general and administrative expenses		132,974			275,770		0			408,744

Income from operations		(6,521	)		91,696		0			85,175
Interest – net		(37,984	)		236		0			(37,748	)
Other income (expense)		(236	)		786		0			550

Income (loss) before income taxes and noncontrolling interest		(44,741	)		92,718		0			47,977
Income taxes (tax benefit)		(17,299	)		36,894		0			19,595

Net income (loss) including noncontrolling interest		(27,442	)		55,824					28,382
Net income attributable to noncontrolling interest		59			0		0			59

Net income (loss) attributable to Central Garden & Pet Company before equity in undistributed income of guarantor subsidiaries		(27,501	)		55,824		0			28,323
Equity in undistributed income of guarantor subsidiaries		55,824			0		(55,824	)		0

Net income attributable to Central Garden & Pet Company	$	28,323		$	55,824	$	(55,824	)	$	28,323


	CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Fiscal Year Ended September 25, 2010 (in thousands)
	Parent			Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	505,933		$	1,132,645	$	(114,930	)	$	1,523,648
Cost of goods sold and occupancy		363,410			760,002		(114,930	)		1,008,482

Gross profit		142,523			372,643		0			515,166
Selling, general and administrative expenses		132,708			261,384		0			394,092
Intangible asset impairments		0			12,000		0			12,000

Income from operations		9,815			99,259		0			109,074
Interest – net		(33,898	)		311		0			(33,587	)
Other income (expense)		(7,851	)		8,270		0			419

Income (loss ) before income taxes and noncontrolling interest		(31,934	)		107,840		0			75,906
Income taxes (tax benefit)		(11,688	)		39,798		0			28,110

Net income (loss) including noncontrolling interest		(20,246	)		68,042					47,796
Net income attributable to noncontrolling interest		1,963			0		0			1,963

Net income (loss) attributable to Central Garden & Pet Company before equity in undistributed income of guarantor subsidiaries		(22,209	)		68,042		0			45,833
Equity in undistributed income of guarantor subsidiaries		68,042			0		(68,042	)		0

Net income attributable to Central Garden & Pet Company	$	45,833		$	68,042	$	(68,042	)	$	45,833


	CONSOLIDATING CONDENSED BALANCE SHEET September 29, 2012 (in thousands)
	Parent		Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	44,662	$	3,813	$	0		$	48,475
Short term investments		22,705		0		0			22,705
Accounts receivable, net		48,339		159,328		(5,245	)		202,422
Inventories		97,017		233,015		0			330,032
Prepaid expenses and other assets		25,242		22,907		0			48,149

Total current assets		237,965		419,063		(5,245	)		651,783
Land, buildings, improvements and equipment, net		81,727		109,436		0			191,163
Goodwill		0		210,223		0			210,223
Investment in guarantors		654,362		0		(654,362	)		0
Other assets		54,910		41,468		0			96,378

Total	$	1,028,964	$	780,190	$	(659,607	)	$	1,149,547

LIABILITIES AND EQUITY
Accounts payable	$	49,894	$	82,013	$	(5,245	)	$	126,662
Accrued expenses and other liabilities		38,673		41,149		0			79,822

Total current liabilities		88,567		123,162		(5,245	)		206,484
Long-term debt		449,387		96		0			449,483
Other long-term obligations		26,127		2,570		0			28,697
Shareholders’ equity attributable to Central Garden & Pet		463,937		654,362		(654,362	)		463,937
Noncontrolling interest		946		0		0			946

Total equity		464,883		654,362		(654,362	)		464,883

Total	$	1,028,964	$	780,190	$	(659,607	)	$	1,149,547


	CONSOLIDATING CONDENSED BALANCE SHEET September 24, 2011 (in thousands)
	Unconsolidated
	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		50,300		150,704		(5,587	)		195,417
Inventories		106,348		223,198		0			329,546
Prepaid expenses and other assets		29,483		18,289		0			47,772

Total current assets		214,584		393,589		(5,587	)		602,586
Land, buildings, improvements and equipment, net		72,721		103,681		0			176,402
Goodwill		0		210,223		0			210,223
Investment in guarantors		647,626		0		(647,626	)		0
Other assets		44,398		59,394		0			103,792

Total	$	979,329	$	766,887	$	(653,213	)	$	1,093,003

LIABILITIES AND EQUITY
Accounts payable	$	40,929	$	81,182	$	(5,587	)	$	116,524
Accrued expenses and other liabilities		39,205		36,202		0			75,407

Total current liabilities		80,134		117,384		(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 Company		456,776		647,626		(647,626	)		456,776
Noncontrolling interest		6		0		0			6

Total equity		456,782		647,626		(647,626	)		456,782

Total	$	979,329	$	766,887	$	(653,213	)	$	1,093,003


	CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Fiscal Year Ended September 29, 2012 (in thousands)
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	74,405		$	65,527		$	(50,763	)	$	89,169

Additions to property		(20,736	)		(18,856	)		0			(39,592	)
Businesses acquired, net of cash acquired		0			0			0			(0	)
Return of equity method investment		0			0			0			0
Investment in short term investments		(4,885	)		0			0			(4,885	)
Investment in guarantor		(6,736	)		(44,027	)		50,763			0

Net cash provided (used) by investing activities		(32,357	)		(62,883	)		50,763			(44,477	)

Repayments on revolving line of credit		(339,000	)		0			0			(339,000	)
Borrowings on revolving line of credit		304,000			0			0			304,000
Proceeds from the issuance of long-term debt		49,312			0			0			49,312
Repayments of long-term debt		(231	)		(122	)		0			(353	)
Proceeds from issuance of common stock		2,129			0			0			2,129
Excess tax benefits from stock-based awards		1,881			0			0			1,881
Repurchase of common stock		(24,829	)		0			0			(24,829	)
Payment of financing costs		(1,715	)		0			0			(1,715	)

Net cash used in financing activities		(8,453	)		(122	)		0			(8,575	)

Effect of exchange rates on cash		434			(107	)		0			327

Net increase (decrease) in cash and cash equivalents		34,029			2,415			0			36,444
Cash and cash equivalents at beginning of year		10,633			1,398			0			12,031

Cash and cash equivalents at end of year	$	44,662		$	3,813		$	0		$	48,475


	CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Fiscal Year Ended September 24, 2011 (in thousands)
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	50,459		$	56,373		$	(55,824	)	$	51,008

Additions to property		(16,802	)		(14,761	)		0			(31,563	)
Businesses acquired, net of cash acquired		(23,403	)		(1,904	)		0			(25,307	)
Return of equity investment		3,133			0			0			3,133
Investment in short term investments		(2,500	)		0			0			(2,500	)
Investment in guarantor		(16,719	)		(39,105	)		55,824			0

Net cash provided (used) by investing activities		(56,291	)		(55,770	)		55,824			(56,237	)

Repayments on revolving line of credit		(668,000	)		0			0			(668,000	)
Borrowings on revolving line of credit		703,000			0			0			703,000
Repayments of long-term debt		(190	)		(145	)		0			(335	)
Proceeds from issuance of common stock		1,675			0			0			1,675
Excess tax benefits from stock-based awards		945			0			0			945
Repurchase of common stock		(108,727	)		0			0			(108,727	)
Payment of financing costs		(1,055	)		0			0			(1,055	)
Distribution to noncontrolling interest		(1,500	)		0			0			(1,500	)

Net cash used in financing activities		(73,852	)		(145	)		0			(73,997	)

Effect of exchange rates on cash		52			(255	)		0			(203	)

Net increase (decrease) in cash and cash equivalents		(79,632	)		203			0			(79,429	)
Cash and cash equivalents at beginning of year		90,265			1,195			0			91,460

Cash and cash equivalents at end of year	$	10,633		$	1,398		$	0		$	12,031


	CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Fiscal Year Ended September 25, 2010 (in thousands)
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	86,344		$	116,927		$	(68,042	)	$	135,229

Additions to property		(15,939	)		(8,251	)		0			(24,190	)
Businesses acquired, net of cash acquired		0			(1,756	)		0			(1,756	)
Investment in short term investments		(15,320	)		0			0			(15,320	)
Investment in guarantor		38,667			(106,709	)		68,042			0

Net cash provided (used) by investing activities		7,408			(116,716	)		68,042			(41,266	)

Repayments on revolving line of credit		(10,000	)		0			0			(10,000	)
Borrowings on revolving line of credit		10,000			0			0			10,000
Repayments of long-term debt		(407,675	)		(249	)		0			(407,924	)
Proceeds from issuance of long-term debt		400,000			0			0			400,000
Proceeds from issuance of common stock		1,294			0			0			1,294
Excess tax benefits from stock-based awards		836			0			0			836
Repurchase of common stock		(66,901	)		0			0			(66,901	)
Payment of financing costs		(12,711	)		0			0			(12,711	)
Distribution to noncontrolling interest		(2,761	)		0			0			(2,761	)

Net cash used in financing activities		(87,918	)		(249	)		0			(88,167	)

Effect of exchange rates on cash		(44	)		40			0			(4	)

Net increase (decrease) in cash and cash equivalents		5,790			2			0			5,792
Cash and cash equivalents at beginning of year		84,475			1,193			0			85,668

Cash and cash equivalents at end of year	$	90,265		$	1,195		$	0		$	91,460

- 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.

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