Annual report pursuant to Section 13 and 15(d)

Business Segment Data

v2.4.0.8
Business Segment Data
12 Months Ended
Sep. 28, 2013
Segment Reporting [Abstract]  
Business Segment Data

19. Business Segment Data

The Company’s chief operating decision maker is its Chief Executive Officer. Operating segments are managed separately because each segment represents a strategic business that offers different products or services. The Company’s chief operating decision maker evaluates 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 maker reviews 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, 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

   2013      2012      2011  

Pet supplies (excluding wild bird feed)

   $ 807.4       $ 847.1       $ 773.1   

Garden controls and fertilizer products

     274.9         281.7         260.0   

Wild bird feed

     210.8         205.1         197.5   

Other garden supplies

     183.5         185.7         212.1   

Grass seed

     177.0         180.4         185.9   
  

 

 

    

 

 

    

 

 

 

Total

   $ 1,653.6       $ 1,700.0       $ 1,628.6   
  

 

 

    

 

 

    

 

 

 

The Company’s largest customer represented approximately 16%, 17% and 16% of the total company net sales in fiscal 2013, 2012 and 2011, respectively, and represented approximately 30% of the Garden segment’s net sales in fiscal 2013 and fiscal 2012, and 28% in fiscal 2011. Sales to the Company’s second largest customer represented approximately 18% of our Garden segment’s net sales in fiscal 2013, 16% in fiscal 2012 and 15% in fiscal 2011. Sales to the Company’s third largest customer represented approximately 8%, 9% and 12% of total company net sales in fiscal 2013, 2012 and 2011, respectively, and represented approximately 17% of our Garden segment’s net sales in fiscal 2013, 20% in fiscal 2012 and 24% in fiscal 2011. The Pet segment’s largest customer represented approximately 11% of our Pet segment’s net sales in fiscal 2013 and 12% in both fiscal 2012 and fiscal 2011.

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

 

     Fiscal Year Ended  
     September 28,
2013
    September 29,
2012
    September 24,
2011
 

Net sales:

      

Pet segment

   $ 888,228      $ 930,753      $ 851,307   

Garden segment

     765,405        769,260        777,345   
  

 

 

   

 

 

   

 

 

 

Total

   $ 1,653,633      $ 1,700,013      $ 1,628,652   
  

 

 

   

 

 

   

 

 

 

Income (loss) from operations:

      

Pet segment

   $ 95,451      $ 87,650      $ 77,623   

Garden segment

     8,286  (1)      40,376        50,013   

Corporate

     (63,582     (53,605     (42,461
  

 

 

   

 

 

   

 

 

 

Total

     40,155        74,421        85,175   

Interest expense

     (43,112     (40,315     (38,044

Interest income

     142        145        296   

Other income (expense)

     (677     678        550   
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes and noncontrolling interest

     (3,492     34,929        47,977   

Income tax expense (benefit)

     (2,592     12,816        19,595   
  

 

 

   

 

 

   

 

 

 

Net income (loss) including noncontrolling interest

     (900     22,113        28,382   

Net income attributable to noncontrolling interest

     1,029        940        59   
  

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Central Garden & Pet Company

   $ (1,929   $ 21,173      $ 28,323   
  

 

 

   

 

 

   

 

 

 

Assets:

      

Pet segment

   $ 425,988      $ 411,059      $ 396,637   

Garden segment

     388,581        341,716        350,234   

Corporate and eliminations

     346,591        396,772        346,132   
  

 

 

   

 

 

   

 

 

 

Total

   $ 1,161,160      $ 1,149,547      $ 1,093,003   
  

 

 

   

 

 

   

 

 

 

Depreciation and amortization:

      

Pet segment

   $ 15,753      $ 14,507      $ 14,479   

Garden segment

     6,410        6,213        5,986   

Corporate

     10,805        9,705        8,101   
  

 

 

   

 

 

   

 

 

 

Total

   $ 32,968      $ 30,425      $ 28,566   
  

 

 

   

 

 

   

 

 

 

Expenditures for long-lived assets:

      

Pet segment

   $ 9,694      $ 15,540      $ 9,953   

Garden segment

     7,496        4,138        5,902   

Corporate

     7,982        19,914        15,708   
  

 

 

   

 

 

   

 

 

 

Total

   $ 25,172      $ 39,592      $ 31,563   
  

 

 

   

 

 

   

 

 

 

 

Noncontrolling interest is associated with the Garden segment.

 

(1) Includes goodwill impairment of $7.7 million and an $11.2 million charge related to certain new products introduced in fiscal 2013.