Annual report pursuant to Section 13 and 15(d)

Business Segment Data

v3.21.2
Business Segment Data
 12 Months Ended
Sep. 25, 2021
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.
During the first quarter of fiscal year 2021, the Company began reporting the results of its outdoor cushion operations in the Pet segment as a result of a change in internal management reporting lines due to potential synergies in sourcing, manufacturing and innovation and to be consistent with the reporting of financial information used to assess performance and allocate resources. These operations were previously reported in the Garden segment and are now managed and reported in the Pet segment. All prior period segment disclosures have been recast to reflect this segment change.

The Pet segment consists of TFH Publications, IMS Trading, Four Paws Products, Central Specialty Pet (Avian and Small Animal, C&S Products and Aquatics), Segrest, K&H Pet Products, Arden, DMC, Life Sciences, Interpet, General Pet and Pet Distribution. These businesses are engaged in the manufacture, purchase, sale and delivery of internally and externally produced pet supplies, animal health and insect controls, aquariums, books, dog treats and food, as well as live fish and small animals principally to independent pet distributors, big-box retailers, regional retailer chains, e-commerce retailers, grocery stores and mass merchants. The Garden segment consists of Grass Seed, Bird Feed, Chemicals and Fertilizers, Excel Marketing, Gulfstream, Hydro-Organics, Pottery (terra-cotta), Cedarworks, Bell Nursery, Hopewell Nursery, DMO, Green Garden, D&D Commodities and Garden Distribution. Products manufactured, designed and sourced, or distributed include products found typically in the lawn and garden sections of mass merchandisers, warehouse-type clubs, home improvement centers and nurseries and include live plants; grass, vegetable, flower and herb seed; wild bird feed, bird houses and other birding accessories; terra-cotta pottery; herbicides, pesticides and insecticides. These products are sold directly to national and regional retail chains, independent garden distributors, online retailers, 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 2021 2020 2019
(in millions)
Other pet products $ 767.0  $ 821.1  $ 688.3 
Other garden products 876.6  491.7  485.9 
Other manufacturers' products 749.1 600.7 504.5 
Dog & cat products 570.9 502.1  452.1 
Wild bird 340.1 —  (1) —  (1)
Controls & fertilizer products —  (1) 279.9  252.2 
Total $ 3,303.7  $ 2,695.5  $ 2,383.0 
(1) The product category was less than 10% of our consolidated net sales in the 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: 
  Fiscal Year Ended
  September 25, 2021   September 26, 2020   September 28, 2019
(in thousands)
Net sales:
Pet segment $ 1,894,929     $ 1,678,027     $ 1,459,581 
Garden segment 1,408,755     1,017,482     923,429 
Total $ 3,303,684     $ 2,695,509     $ 2,383,010 
Operating income (loss):
Pet segment $ 208,201  $ 171,369  $ 132,496  (1)
Garden segment 138,755     115,413  92,401 
Corporate (92,460) (88,805) (72,829)
Total 254,496  197,977  152,068 
Interest expense (58,597) (44,016) (42,614)
Interest income 415     4,027     9,554 
Other income (expense), net (1,506) (4,250) 243 
Income before income taxes and noncontrolling interest 194,808     153,738     119,251 
Income tax expense 42,035     32,218     26,604 
Net income including noncontrolling interest 152,773     121,520     92,647 
Net income (loss) attributable to noncontrolling interest 1,027     844     (139)
Net income attributable to Central Garden & Pet Company $ 151,746     $ 120,676     $ 92,786 
Assets:
Pet segment $ 966,437     $ 877,901     $ 782,696 
Garden segment 1,313,899     481,401     415,573 
Corporate and eliminations 836,344     980,062     826,751 
Total $ 3,116,680     $ 2,339,364     $ 2,025,020 
Depreciation and amortization:
Pet segment $ 36,952     $ 38,116     $ 34,838 
Garden segment 33,050     10,590     9,924 
Corporate 4,725     6,653     6,066 
Total $ 74,727     $ 55,359     $ 50,828 
Expenditures for long-lived assets:
Pet segment $ 44,919     $ 31,106     $ 21,203 
Garden segment 34,043     8,177     8,658 
Corporate 1,371     3,772     1,716 
Total $ 80,333     $ 43,055     $ 31,577 
Noncontrolling interest is associated with the Garden segment.
(1) Includes a $2.5 million impairment charge in fiscal 2019.