Annual report pursuant to Section 13 and 15(d)

Business Segment Data

v3.10.0.1
Business Segment Data
 12 Months Ended
Sep. 29, 2018
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, K&H Manufacturing, Four Paws Products, TFH Publications, Kaytee, Aquatics, Interpet, IMS, Pets International, Breeder’s Choice, Life Sciences, and Segrest. 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, Bell Nursery and Gulfstream. Products manufactured, designed and sourced, grown 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, live plants, 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 inter-segment 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
2018
 
2017
 
2016
 
Other pet products
$
896.5

 
$
841.4

 
$
689.3

 
Other garden supplies
528.8

 
464.9

 
331.3

 
Dog and cat products
444.4

 
405.0

 
326.0

 
Garden controls and fertilizer products
345.7

 
343.2

 
298.8

 
Wild bird feed
—

(1)
—

(1)
183.6

 
Total
$
2,215.4

 
$
2,054.5

 
$
1,829.0

 
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 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 29, 2018
 
September 30, 2017
 
September 24, 2016
 
Net sales:
 
 
 
 
 
 
Pet segment
$
1,340,899

  
$
1,246,354

  
$
1,081,853

  
Garden segment
874,463

  
808,124

  
747,164

  
Total
$
2,215,362

  
$
2,054,478

  
$
1,829,017

  
Operating income (loss):
 
 
 
 
 
 
Pet segment
$
140,353


$
131,622

 
$
119,930

(1)
Garden segment
95,551

  
87,298


70,317

 
Corporate
(68,568
)
 
(62,808
)
 
(60,889
)
 
Total
167,336

 
156,112

 
129,358

 
Interest expense
(39,196
)
 
(28,209
)
 
(42,847
)
 
Interest income
3,145

  
147

  
140

 
Other expense
(3,860
)
 
(1,621
)
 
(17,013
)
(2)
Income before income taxes and noncontrolling interest
127,425

  
126,429

  
69,638

 
Income tax expense
3,305

  
46,699

  
24,053

 
Net income including noncontrolling interest
124,120

  
79,730

  
45,585

 
Net income attributable to noncontrolling interest
526

  
902

  
1,071

 
Net income attributable to Central Garden & Pet Company
$
123,594

  
$
78,828

  
$
44,514

 
Assets:
 
 
 
 
 
 
Pet segment
$
683,938

  
$
612,337

  
$
508,879

  
Garden segment
407,483

  
311,026

  
304,901

  
Corporate and eliminations
815,788

  
383,543

  
366,903

  
Total
$
1,907,209

  
$
1,306,906

  
$
1,180,683

  
Depreciation and amortization:
 
 
 
 
 
 
Pet segment
$
29,889

  
$
26,044

  
$
22,556

  
Garden segment
8,744

  
6,267

  
6,098

  
Corporate
8,566

  
10,408

  
11,347

  
Total
$
47,199

  
$
42,719

  
$
40,001

  
Expenditures for long-lived assets:
 
 
 
 
 
 
Pet segment
$
26,979

  
$
38,970

  
$
18,939

  
Garden segment
8,016

  
4,948

  
4,750

  
Corporate
2,850

  
741

  
3,933

  
Total
$
37,845

  
$
44,659

  
$
27,622

  
Noncontrolling interest is associated with the Garden segment.
(1)
Includes a $1.8 million impairment charge in fiscal 2016.
(2)
Includes a $16.6 million impairment charge related to two equity method investments in fiscal 2016.