Annual report pursuant to Section 13 and 15(d)

Business Segment Data

v3.5.0.2
Business Segment Data
 12 Months Ended
Sep. 24, 2016
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 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, 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
2016
 
2015
 
2014
 
Other pet products
$
689.3

 
$
594.7

 
$
774.2

 
Garden controls and fertilizer products
298.8

 
286.3

 
262.5

 
Wild bird feed
183.6

 
193.2

 
202.1

 
Grass seed
(1)

 
(1)

 
183.1

 
Other garden supplies
331.3

 
343.5

 
182.5

 
Dog and cat products
326.0

 
233.0

 
(1)

 
Total
$
1,829.0

 
$
1,650.7

 
$
1,604.4

 

(1) The product category was less than 10% of our consolidated net sales in the respective period.
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 24, 2016
 
September 26, 2015
 
September 27, 2014
 
Net sales:
 
 
 
 
 
 
Pet segment
$
1,081,853

  
$
894,549

  
$
845,505

  
Garden segment
747,164

  
756,188

  
758,852

  
Total
$
1,829,017

  
$
1,650,737

  
$
1,604,357

  
Operating income (loss):
 
 
 
 
 
 
Pet segment
$
119,930

(1)
$
98,798

(1)
$
88,077

  
Garden segment
70,317

  
60,145


41,020

(2)
Corporate
(60,889
)
 
(67,508
)
 
(72,884
)
 
Total
129,358

 
91,435

 
56,213

 
Interest expense
(42,847
)
 
(40,027
)
 
(42,844
)
 
Interest income
140

  
129

  
94

 
Other income (expense)
(17,013
)
(3)
13

  
403

 
Income (loss) before income taxes and noncontrolling interest
69,638

  
51,550

  
13,866

 
Income tax expense (benefit)
24,053

  
18,535

  
4,045

 
Net income (loss) including noncontrolling interest
45,585

  
33,015

  
9,821

 
Net income attributable to noncontrolling interest
1,071

  
1,044

  
1,017

 
Net income (loss) attributable to Central Garden & Pet Company
$
44,514

  
$
31,971

  
$
8,804

 
Assets:
 
 
 
 
 
 
Pet segment
$
508,879

  
$
465,171

  
$
414,279

  
Garden segment
304,901

  
310,981

  
337,461

  
Corporate and eliminations
398,413

  
355,445

  
396,987

  
Total
$
1,212,193

  
$
1,131,597

  
$
1,148,727

  
Depreciation and amortization:
 
 
 
 
 
 
Pet segment
$
22,556

  
$
15,885

  
$
17,256

  
Garden segment
6,098

  
5,988

  
6,793

  
Corporate
11,347

  
11,830

  
11,732

  
Total
$
40,001

  
$
33,703

  
$
35,781

  
Expenditures for long-lived assets:
 
 
 
 
 
 
Pet segment
$
18,939

  
$
17,060

  
$
8,561

  
Garden segment
4,750

  
2,432

  
5,541

  
Corporate
3,933

  
2,538

  
3,071

  
Total
$
27,622

  
$
22,030

  
$
17,173

  
___________________________ 
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 $16.9 million charge related to certain products introduced in fiscal 2013 and a $4.9 million gain from the sale of manufacturing plant assets.
(3)
Includes a $16.6 million impairment charge related to two equity method investments.