Annual report pursuant to Section 13 and 15(d)

Business Segment Data

v3.8.0.1
Business Segment Data
 12 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
Business Segment Data
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 operating income or loss. 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, goodwill, 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 DMC, Four Paws Products, TFH Publications, Kaytee, Aquatics, Interpet, IMS, Pets International, Breeder’s Choice, Life Sciences, Segrest and K&H Manufacturing. These businesses are engaged in the manufacturing, purchase, sale and delivery of internally and externally produced pet supplies, books , food, live fish and small animals principally to independent pet distributors, national and regional retail chains, grocery stores, mass merchants and bookstores. The Garden segment consists of Pennington Seed, Hydro Organics, AMBRANDS, Lilly Miller, the Pottery Group and Gulfstream. 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 approximately 10% or more of the Company’s consolidated net sales in the fiscal years presented (in millions).  
Category
2017
 
2016
 
2015
 
Other pet products
$
841.4

 
$
689.3

 
$
594.7

 
Other garden supplies
464.9

 
331.3

 
343.5

 
Dog and cat products
405.0

 
326.0

 
233.0

 
Garden controls and fertilizer products
343.2

 
298.8

 
286.3

 
Wild bird feed
—

(1)
183.6

 
193.2

 
Total
$
2,054.5

 
$
1,829.0

 
$
1,650.7

 
See Note 4 - Concentration of Credit Risk and Significant Customers and Suppliers for the Company’s largest customers by segment.
(1) The product category was less than 10% of the Company's consolidated net sales in the respective period.
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 30, 2017
 
September 24, 2016
 
September 26, 2015
 
Net sales:
 
 
 
 
 
 
Pet segment
$
1,246,354

  
$
1,081,853

  
$
894,549

  
Garden segment
808,124

  
747,164

  
756,188

  
Total
$
2,054,478

  
$
1,829,017

  
$
1,650,737

  
Operating income (loss):
 
 
 
 
 
 
Pet segment
$
131,622


$
119,930

(1)
$
98,798

(1)
Garden segment
87,298

  
70,317


60,145

 
Corporate
(62,808
)
 
(60,889
)
 
(67,508
)
 
Total
156,112

 
129,358

 
91,435

 
Interest expense
(28,209
)
 
(42,847
)
 
(40,027
)
 
Interest income
147

  
140

  
129

 
Other income (expense)
(1,621
)
 
(17,013
)
(2)
13

 
Income (loss) before income taxes and noncontrolling interest
126,429

  
69,638

  
51,550

 
Income tax expense (benefit)
46,699

  
24,053

  
18,535

 
Net income (loss) including noncontrolling interest
79,730

  
45,585

  
33,015

 
Net income attributable to noncontrolling interest
902

  
1,071

  
1,044

 
Net income (loss) attributable to Central Garden & Pet Company
$
78,828

  
$
44,514

  
$
31,971

 
Assets:
 
 
 
 
 
 
Pet segment
$
612,337

  
$
508,879

  
$
465,171

  
Garden segment
311,026

  
304,901

  
310,981

  
Corporate and eliminations
383,543

  
366,903

  
324,960

  
Total
$
1,306,906

  
$
1,180,683

  
$
1,101,112

  
Depreciation and amortization:
 
 
 
 
 
 
Pet segment
$
26,044

  
$
22,556

  
$
15,885

  
Garden segment
6,267

  
6,098

  
5,988

  
Corporate
10,408

  
11,347

  
11,830

  
Total
$
42,719

  
$
40,001

  
$
33,703

  
Expenditures for long-lived assets:
 
 
 
 
 
 
Pet segment
$
38,970

  
$
18,939

  
$
17,060

  
Garden segment
4,948

  
4,750

  
2,432

  
Corporate
741

  
3,933

  
2,538

  
Total
$
44,659

  
$
27,622

  
$
22,030

  
Noncontrolling interest is associated with the Garden segment.
(1)
Includes a $1.8 million impairment charge in fiscal 2016 and a $7.3 million impairment charge in fiscal 2015 to indefinite-lived intangible assets as a result of increased competition and declining sales volume.
(2)
Includes a $16.6 million impairment charge related to two equity method investments.