Annual report pursuant to Section 13 and 15(d)

Business Segment Data

v3.3.1.900
Business Segment Data
 12 Months Ended
Sep. 26, 2015
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, 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 Four Paws Products, TFH Publications, Kaytee, Aquatics, Interpet, IMS, 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 approximately 10% or more of the Company’s consolidated net sales in the fiscal years presented (in millions).

 

Category

    2015      2014      2013  

Pet supplies (excluding wild bird feed)

    $ 827.7       $ 774.2       $ 807.4   

Garden controls and fertilizer products

      286.3         262.5         274.9   

Wild bird feed

      193.2         202.1         210.8   

Other garden supplies

      181.4         182.5         183.5   

Grass seed

      162.1         183.1         177.0   
  

 

 

     

 

 

     

 

 

  

Total

    $ 1,650.7       $ 1,604.4       $ 1,653.6   
  

 

 

     

 

 

     

 

 

  

See Note 5 – Concentrations of Credit Risk and Significant Customers and Suppliers, for the Company’s largest customers by segment.

 

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 26,
2015		     September 27,
2014		     September 28,
2013		  

Net sales:

       

Pet segment

    $ 894,549      $ 845,505      $ 888,228   

Garden segment

      756,188        758,852        765,405   
  

 

 

    

 

 

    

 

 

  

Total

    $ 1,650,737      $ 1,604,357      $ 1,653,633   
  

 

 

    

 

 

    

 

 

  

Income (loss) from operations:

       

Pet segment

    $ 98,798  (1)    $ 88,077      $ 95,451   

Garden segment

      60,145        41,020  (2)      8,286  (3) 

Corporate

      (67,508 )      (72,884 )      (63,582 ) 
  

 

 

    

 

 

    

 

 

  

Total

      91,435        56,213        40,155   

Interest expense

      (40,027 )      (42,844 )      (43,112 ) 

Interest income

      129        94        142   

Other income (expense)

      13        403        (677 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes and noncontrolling interest

      51,550        13,866        (3,492 ) 

Income tax expense (benefit)

      18,535        4,045        (2,592 ) 
  

 

 

    

 

 

    

 

 

  

Net income (loss) including noncontrolling interest

      33,015        9,821        (900 ) 

Net income attributable to noncontrolling interest

      1,044        1,017        1,029   
  

 

 

    

 

 

    

 

 

  

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

    $ 31,971      $ 8,804      $ (1,929 ) 
  

 

 

    

 

 

    

 

 

  

Assets:

       

Pet segment

    $ 465,171      $ 414,279      $ 425,988   

Garden segment

      310,981        337,461        388,581   

Corporate and eliminations

      358,602        396,987        346,591   
  

 

 

    

 

 

    

 

 

  

Total

    $ 1,134,754      $ 1,148,727      $ 1,161,160   
  

 

 

    

 

 

    

 

 

  

Depreciation and amortization:

       

Pet segment

    $ 15,885      $ 17,256      $ 15,753   

Garden segment

      5,988        6,793        6,410   

Corporate

      11,830        11,732        10,805   
  

 

 

    

 

 

    

 

 

  

Total

    $ 33,703      $ 35,781      $ 32,968   
  

 

 

    

 

 

    

 

 

  

Expenditures for long-lived assets:

       

Pet segment

    $ 17,060      $ 8,561      $ 9,694   

Garden segment

      2,432        5,541        7,496   

Corporate

      2,538        3,071        7,982   
  

 

 

    

 

 

    

 

 

  

Total

    $ 22,030      $ 17,173      $ 25,172   
  

 

 

    

 

 

    

 

 

  

 

Noncontrolling interest is associated with the Garden segment.

 

(1) Includes a $7.3 million impairment charge to indefinite-lived intangible assets as a result of increased competition and declining sales volume.
(2) Includes a $16.9 million charge related to certain products introduced in fiscal and a $4.9 million gain from the sale of manufacturing plant assets.
(3) Includes goodwill impairment of $7.7 million and an $11.2 million charge related to certain products introduced in fiscal 2013.