Annual report pursuant to Section 13 and 15(d)

Business Segment Data

v3.19.3
Business Segment Data
 12 Months Ended
Sep. 28, 2019
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, C&S Products, 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, Arden Companies 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, terra cotta pottery, 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
 
2019
 
2018
 
2017
Other pet products
 
$
613.4

 
$
606.7

 
$
603.6

Other garden products
 
560.8

 
445.7

 
377.0

Other manufacturers' products
 
504.5

 
454.3

 
409.0

Dog & cat products
 
452.1

 
445.1

 
405.1

Controls & fertilizer products
 
252.2

 
263.6

 
259.8

Total
 
$
2,383.0

 
$
2,215.4

 
$
2,054.5


See Note 4 - Concentration 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 28, 2019
 
September 29, 2018
 
September 30, 2017
 
Net sales:
 
 
 
 
 
 
Pet segment
$
1,384,686

  
$
1,340,899

  
$
1,246,354

  
Garden segment
998,324

  
874,463

  
808,124

  
Total
$
2,383,010

  
$
2,215,362

  
$
2,054,478

  
Operating income (loss):
 
 
 
 
 
 
Pet segment
$
122,727

(1)
$
140,353

 
$
131,622

 
Garden segment
102,170

  
95,551


87,298

 
Corporate
(72,829
)
 
(68,568
)
 
(62,808
)
 
Total
152,068

 
167,336

 
156,112

 
Interest expense
(42,614
)
 
(39,196
)
 
(28,209
)
 
Interest income
9,554

  
3,145

  
147

 
Other income (expense), net
243

 
(3,860
)
 
(1,621
)
 
Income before income taxes and noncontrolling interest
119,251

  
127,425

  
126,429

 
Income tax expense
26,604

  
3,305

  
46,699

 
Net income including noncontrolling interest
92,647

  
124,120

  
79,730

 
Net income (loss) attributable to noncontrolling interest
(139
)
  
526

  
902

 
Net income attributable to Central Garden & Pet Company
$
92,786

  
$
123,594

  
$
78,828

 
Assets:
 
 
 
 
 
 
Pet segment
$
734,380

  
$
683,938

  
$
612,337

  
Garden segment
463,889

  
407,483

  
311,026

  
Corporate and eliminations
826,751

  
815,788

  
383,543

  
Total
$
2,025,020

  
$
1,907,209

  
$
1,306,906

  
Depreciation and amortization:
 
 
 
 
 
 
Pet segment
$
32,803

  
$
29,889

  
$
26,044

  
Garden segment
11,959

  
8,744

  
6,267

  
Corporate
6,066

  
8,566

  
10,408

  
Total
$
50,828

  
$
47,199

  
$
42,719

  
Expenditures for long-lived assets:
 
 
 
 
 
 
Pet segment
$
20,793

  
$
26,979

  
$
38,970

  
Garden segment
9,068

  
8,016

  
4,948

  
Corporate
1,716

  
2,850

  
741

  
Total
$
31,577

  
$
37,845

  
$
44,659

  
Noncontrolling interest is associated with the Garden segment.
(1) Includes a $2.5 million impairment charge in fiscal 2019.