Annual report pursuant to Section 13 and 15(d)

Consolidating Condensed Financial Information of Guarantor Subsidiaries

v3.10.0.1
Consolidating Condensed Financial Information of Guarantor Subsidiaries
12 Months Ended
Sep. 29, 2018
Condensed Financial Information Disclosure [Abstract]  
Consolidating Condensed Financial Information of Guarantor Subsidiaries
Consolidating Condensed Financial Information of Guarantor Subsidiaries
Certain 100% wholly-owned subsidiaries of the Company (as listed below, collectively the “Guarantor Subsidiaries”) have guaranteed fully and unconditionally, on a joint and several basis, the obligation to pay principal and interest on the Company’s 2023 and 2028 Notes. Certain subsidiaries and operating divisions are not guarantors of the Notes. Those subsidiaries that are guarantors and co-obligors of the Notes are as follows:
Farnam Companies, Inc.
Four Paws Products Ltd.
Gulfstream Home & Garden, Inc.
Hydro-Organics Wholesale, Inc.
IMS Trading, LLC
IMS Southern, LLC
K&H Manufacturing, LLC
Kaytee Products, Inc.
Matson, LLC
New England Pottery, LLC
Pennington Seed, Inc. (including Gro Tec, Inc., NEXGEN Turf Research, LLC and All-Glass Aquarium Co., Inc.)
Pets International, Ltd.
Segrest, Inc. (including Blue Springs Hatchery, Inc., Segrest Farms, Inc., Florida Tropical Distributors International, Inc., Sun Pet, Ltd, Aquatica Tropicals, Inc., Quality Pets, LLC, Midwest Tropicals, LLC)
T.F.H. Publications, Inc.
Wellmark International (including B2E Corporation, B2E Microbials, LLC, B2E Manufacturing, LLC, Four Star Microbial Products, LLC and B2E Biotech LLC)

In lieu of providing separate audited financial statements for the Guarantor Subsidiaries, the Company has included the accompanying consolidating condensed financial statements based on the Company’s understanding of the Securities and Exchange Commission’s interpretation and application of Rule 3-10 of the Securities and Exchange Commission’s Regulation S-X.
 
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
 
Fiscal Year Ended September 29, 2018
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net sales
$
730,439

 
$
167,584

 
$
1,397,688

 
$
(80,349
)
 
$
2,215,362

Cost of goods sold and occupancy
568,145

 
128,944

 
917,276

 
(74,379
)
 
1,539,986

Gross profit
162,294

 
38,640

 
480,412

 
(5,970
)
 
675,376

Selling, general and administrative expenses
167,849

 
33,118

 
313,043

 
(5,970
)
 
508,040

Operating income (loss)
(5,555
)
 
5,522

 
167,369

 

 
167,336

Interest expense
(38,855
)
 
(547
)
 
206

 

 
(39,196
)
Interest income
3,138

 
6

 
1

 

 
3,145

Other income (expense)
(4,269
)
 
(236
)
 
645

 

 
(3,860
)
Income (loss) before taxes and equity in earnings of affiliates
(45,541
)
 
4,745

 
168,221

 

 
127,425

Income tax expense (benefit)
(1,138
)
 
79

 
4,364

 

 
3,305

Equity in earnings of affiliates
167,997

 

 
1,133

 
(169,130
)
 

Net income including noncontrolling interest
123,594

 
4,666

 
164,990

 
(169,130
)
 
124,120

Noncontrolling interest

 
526

 

 

 
526

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

 
$
4,140

 
$
164,990

 
$
(169,130
)
 
$
123,594


 
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
 
Fiscal Year Ended September 30, 2017
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net sales
$
685,998

 
$
79,681

 
$
1,370,335

 
$
(81,536
)
 
$
2,054,478

Cost of goods sold and occupancy
534,682

 
60,788

 
901,959

 
(75,759
)
 
1,421,670

Gross profit
151,316

 
18,893

 
468,376

 
(5,777
)
 
632,808

Selling, general and administrative expenses
154,267

 
18,416

 
309,790

 
(5,777
)
 
476,696

Operating income (loss)
(2,951
)
 
477

 
158,586

 

 
156,112

Interest expense
(28,051
)
 
(294
)
 
136

 

 
(28,209
)
Interest income
146

 
1

 

 

 
147

Other income (expense)
(2,379
)
 
844

 
(86
)
 

 
(1,621
)
Income (loss) before taxes and equity in earnings of affiliates
(33,235
)
 
1,028

 
158,636

 

 
126,429

Income tax expense (benefit)
(11,981
)
 
1,466

 
57,214

 

 
46,699

Equity in earnings of affiliates
100,082

 

 
420

 
(100,502
)
 

Net income including noncontrolling interest
78,828

 
(438
)
 
101,842

 
(100,502
)
 
79,730

Noncontrolling interest

 
902

 

 

 
902

Net income (loss) attributable to Central Garden & Pet Company
$
78,828

 
$
(1,340
)
 
$
101,842

 
$
(100,502
)
 
$
78,828

 
 
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
 
Fiscal Year Ended September 24, 2016
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net sales
$
587,579

 
$
82,567

 
$
1,238,339

 
$
(79,468
)
 
$
1,829,017

Cost of goods sold and occupancy
466,543

 
62,727

 
820,573

 
(73,876
)
 
1,275,967

Gross profit
121,036

 
19,840

 
417,766

 
(5,592
)
 
553,050

Selling, general and administrative expenses
138,556

 
18,077

 
272,651

 
(5,592
)
 
423,692

Operating income (loss)
(17,520
)
 
1,763

 
145,115

 

 
129,358

Interest expense
(42,700
)
 
(266
)
 
119

 

 
(42,847
)
Interest income
136

 
4

 

 

 
140

Other income (expense)
(16,925
)
 
(113
)
 
25

 

 
(17,013
)
Income (loss) before taxes and equity in earnings of affiliates
(77,009
)
 
1,388

 
145,259

 

 
69,638

Income tax expense (benefit)
(26,422
)
 
923

 
49,552

 

 
24,053

Equity in earnings of affiliates
95,101

 

 
624

 
(95,725
)
 

Net income including noncontrolling interest
44,514

 
465

 
96,331

 
(95,725
)
 
45,585

Noncontrolling interest

 
1,071

 

 

 
1,071

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

 
$
(606
)
 
$
96,331

 
$
(95,725
)
 
$
44,514

 
CONSOLIDATING CONDENSED STATEMENTS OF
COMPREHENSIVE INCOME
 
Fiscal Year Ended September 29, 2018
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income
$
123,594

 
$
4,666

 
$
164,990

 
$
(169,130
)
 
$
124,120

Other comprehensive loss:
 
 
 
 
 
 
 
 
 
Foreign currency translation
(267
)
 
(145
)
 
(67
)
 
212

 
(267
)
Total comprehensive income
123,327

 
4,521

 
164,923

 
(168,918
)
 
123,853

Comprehensive income attributable to noncontrolling interests

 
526

 

 

 
526

Comprehensive income attributable to Central Garden & Pet Company
$
123,327

 
$
3,995

 
$
164,923

 
$
(168,918
)
 
$
123,327


 
CONSOLIDATING CONDENSED STATEMENTS OF
COMPREHENSIVE INCOME
 
Fiscal Year Ended September 30, 2017
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income (loss)
$
78,828

 
$
(438
)
 
$
101,842

 
$
(100,502
)
 
$
79,730

Other comprehensive income:

 

 

 

 

Foreign currency translation
343

 
169

 
108

 
(277
)
 
343

Total comprehensive income (loss)
79,171

 
(269
)
 
101,950

 
(100,779
)
 
80,073

Comprehensive income attributable to noncontrolling interests

 
902

 

 

 
902

Comprehensive income (loss) attributable to Central Garden & Pet Company
$
79,171

 
$
(1,171
)
 
$
101,950

 
$
(100,779
)
 
$
79,171

 
 
CONSOLIDATING CONDENSED STATEMENTS OF
COMPREHENSIVE INCOME
 
Fiscal Year Ended September 24, 2016
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net income
$
44,514

 
$
465

 
$
96,331

 
$
(95,725
)
 
$
45,585

Other comprehensive Income (loss):

 

 

 

 

Foreign currency translation
(1,458
)
 
(1,132
)
 
8

 
1,124

 
(1,458
)
Total comprehensive income (loss)
43,056

 
(667
)
 
96,339

 
(94,601
)
 
44,127

Comprehensive income attributable to noncontrolling interests

 
1,071

 

 

 
1,071

Comprehensive income (loss) attributable to Central Garden & Pet Company
$
43,056

 
$
(1,738
)
 
$
96,339

 
$
(94,601
)
 
$
43,056

 
 
CONSOLIDATING CONDENSED BALANCE SHEET
 
 
September 29, 2018
 
 
(in thousands)
 
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
474,210

 
$
6,005

 
$
1,891

 
$

 
$
482,106

Restricted cash
 
10,899

 

 

 

 
10,899

Accounts receivable, net
 
94,657

 
9,647

 
171,604

 

 
275,908

Inventories
 
123,178

 
32,556

 
272,089

 

 
427,823

Prepaid expenses and other assets
 
6,304

 
1,455

 
12,803

 

 
20,562

Total current assets
 
709,248

 
49,663

 
458,387

 

 
1,217,298

Land, buildings, improvements and equipment, net
 
33,484

 
33,840

 
150,323

 

 
217,647

Goodwill
 
20,578

 
7,414

 
253,185

 

 
281,177

Other long term assets
 
62,199

 
7,469

 
133,145

 
(11,726
)
 
191,087

Intercompany receivable
 
40,365

 

 
769,886

 
(810,251
)
 

Investment in subsidiaries
 
1,618,378

 

 

 
(1,618,378
)
 

Total
 
$
2,484,252

 
$
98,386

 
$
1,764,926

 
$
(2,440,355
)
 
$
1,907,209

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
33,122

 
$
4,759

 
$
72,378

 
$

 
$
110,259

Accrued expenses and other liabilities
 
44,142

 
4,746

 
53,695

 

 
102,583

Current portion of long term debt
 
116

 

 
6

 

 
122

Total current liabilities
 
77,380

 
9,505

 
126,079

 

 
212,964

Long-term debt
 
691,869

 

 
162

 

 
692,031

Intercompany payable
 
753,933

 
56,318

 

 
(810,251
)
 

Losses in excess of investment in subsidiaries
 

 

 
25,036

 
(25,036
)
 

Other long-term obligations
 
8,621

 

 
52,485

 
(11,726
)
 
49,380

Shareholders’ equity attributable to Central Garden & Pet
 
952,449

 
32,178

 
1,561,164

 
(1,593,342
)
 
952,449

Noncontrolling interest
 

 
385

 

 

 
385

Total equity
 
952,449

 
32,563

 
1,561,164

 
(1,593,342
)
 
952,834

Total
 
$
2,484,252

 
$
98,386

 
$
1,764,926

 
$
(2,440,355
)
 
$
1,907,209


 
CONSOLIDATING CONDENSED BALANCE SHEET
 
September 30, 2017
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS

 

Cash and cash equivalents
$
19,238

 
$
11,693

 
$
1,466

 
$

 
$
32,397

Restricted cash
12,645

 

 

 

 
12,645

Accounts receivable, net
78,692

 
5,586

 
153,590

 

 
237,868

Inventories
125,797

 
9,493

 
246,811

 

 
382,101

Prepaid expenses and other assets
6,059

 
811

 
11,175

 

 
18,045

Total current assets
242,431

 
27,583

 
413,042

 

 
683,056

Land, buildings, improvements and equipment, net
38,170

 
4,225

 
138,518

 

 
180,913

Goodwill
15,058

 

 
241,217

 

 
256,275

Other long term assets
61,715

 
2,376

 
146,372

 
(23,801
)
 
186,662

Intercompany receivable
36,606

 

 
662,137

 
(698,743
)
 

Investment in subsidiaries
1,383,633

 

 

 
(1,383,633
)
 

Total
$
1,777,613

 
$
34,184

 
$
1,601,286

 
$
(2,106,177
)
 
$
1,306,906

LIABILITIES AND EQUITY


 


 


 


 


Accounts payable
$
36,760

 
$
3,076

 
$
63,447

 
$

 
$
103,283

Accrued expenses and other liabilities
54,909

 
2,391

 
59,249

 

 
116,549

Current portion of long term debt

 

 
375

 

 
375

Total current liabilities
91,669

 
5,467

 
123,071

 

 
220,207

Long-term debt
395,160

 

 
118

 

 
395,278

Intercompany payable
647,409

 
51,334

 

 
(698,743
)
 

Losses in excess of investment in subsidiaries

 

 
19,782

 
(19,782
)
 

Other long-term obligations
7,689

 

 
70,391

 
(23,801
)
 
54,279

Shareholders’ equity attributable to Central Garden & Pet
635,686

 
(24,073
)
 
1,387,924

 
(1,363,851
)
 
635,686

Noncontrolling interest

 
1,456

 

 

 
1,456

Total equity
635,686

 
(22,617
)
 
1,387,924

 
(1,363,851
)
 
637,142

Total
$
1,777,613

 
$
34,184

 
$
1,601,286

 
$
(2,106,177
)
 
$
1,306,906

 
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
 
Fiscal Year Ended September 29, 2018
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash provided (used) by operating activities
$
(16,676
)
 
$
(1,288
)
 
$
138,463

 
$
(6,387
)
 
$
114,112

Additions to property, plant and equipment
(6,633
)
 
(1,495
)
 
(29,717
)
 

 
(37,845
)
Businesses acquired, net of cash acquired, and investments in joint ventures
(91,244
)
 

 

 

 
(91,244
)
Change in restricted cash and cash equivalents
1,746

 

 

 

 
1,746

Investment in equity method investee
(9,048
)
 
 
 
 
 
 
 
(9,048
)
Other investing activities
(2,745
)
 

 

 

 
(2,745
)
Intercompany investing activities
(3,760
)
 

 
(107,749
)
 
111,509

 

Net cash used by investing activities
(111,684
)
 
(1,495
)
 
(137,466
)
 
111,509

 
(139,136
)
Repayments on revolving line of credit
(23,000
)
 

 

 

 
(23,000
)
Borrowings on revolving line of credit
23,000

 

 

 

 
23,000

Repayments of long-term debt
(56
)
 

 
(375
)
 

 
(431
)
Issuance of long-term debt
300,000

 

 

 

 
300,000

Proceeds from issuance of common stock
195,631

 

 

 

 
195,631

Repurchase of common stock
(13,797
)
 

 

 

 
(13,797
)
Payment of deferred financing costs
(4,770
)







(4,770
)
Payments of contingent consideration

 

 
(253
)
 

 
(253
)
Distribution to parent

 
(6,387
)
 

 
6,387

 

Distribution to noncontrolling interest

 
(1,597
)
 

 

 
(1,597
)
Intercompany financing activities
106,525

 
4,984

 

 
(111,509
)
 

Net cash provided (used) by financing activities
583,533

 
(3,000
)
 
(628
)
 
(105,122
)
 
474,783

Effect of exchange rates on cash
(201
)
 
95

 
56

 

 
(50
)
Net increase (decrease) in cash and cash equivalents
454,972

 
(5,688
)
 
425

 

 
449,709

Cash and cash equivalents at beginning of year
19,238

 
11,693

 
1,466

 

 
32,397

Cash and cash equivalents at end of year
$
474,210

 
$
6,005

 
$
1,891

 
$

 
$
482,106


 
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
 
Fiscal Year Ended September 30, 2017
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash (used) provided by operating activities
$
(7,418
)
 
$
2,846

 
$
122,957

 
$
(4,076
)
 
$
114,309

Additions to property, plant and equipment
(9,419
)
 
(805
)
 
(34,435
)
 

 
(44,659
)
Businesses acquired, net of cash acquired, and investments in joint ventures
(103,880
)
 

 

 

 
(103,880
)
Proceeds from asset sales
229




8,318




8,547

Escrow deposit for acquisition related-contingent consideration
(6,000
)







(6,000
)
Change in restricted cash and cash equivalents
(1,735
)
 

 

 

 
(1,735
)
Investment in equity method investee
(12,495
)







(12,495
)
Other investing activities
(4,355
)
 

 

 

 
(4,355
)
Intercompany investing activities
(3,828
)
 

 
(94,763
)
 
98,591

 

Net cash used by investing activities
(141,483
)
 
(805
)
 
(120,880
)
 
98,591

 
(164,577
)
Repayments on revolving line of credit
(552,000
)
 

 

 

 
(552,000
)
Borrowings on revolving line of credit
552,000

 

 

 

 
552,000

Repayments of long-term debt
(89
)
 

 
(374
)
 

 
(463
)
Excess tax benefits from stock-based awards
19,946

 

 

 

 
19,946

Repurchase of common stock
(27,556
)
 

 

 

 
(27,556
)
Payments of contingent consideration





(1,300
)




(1,300
)
Distribution to parent

 
(4,076
)
 

 
4,076

 

Distribution to noncontrolling interest

 
(1,019
)
 

 

 
(1,019
)
Intercompany financing activities
93,445

 
5,146

 

 
(98,591
)
 

Net cash provided (used) by financing activities
85,746

 
51

 
(1,674
)
 
(94,515
)
 
(10,392
)
Effect of exchange rates on cash
235

 
(94
)
 
(66
)
 

 
75

Net increase (decrease) in cash and cash equivalents
(62,920
)
 
1,998

 
337

 

 
(60,585
)
Cash and cash equivalents at beginning of year
82,158

 
9,695

 
1,129

 

 
92,982

Cash and cash equivalents at end of year
$
19,238

 
$
11,693

 
$
1,466

 
$

 
$
32,397


 
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
 
Fiscal Year Ended September 24, 2016
 
(in thousands)
 
Parent
 
Non-Guarantor
Subsidiaries
 
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash (used) provided by operating activities
$
3,906

 
$
2,654

 
$
149,749

 
$
(4,883
)
 
$
151,426

Additions to property, plant and equipment
(4,513
)
 
(717
)
 
(22,392
)
 

 
(27,622
)
Payments to acquire companies, net of expenses
(69,001
)
 

 

 

 
(69,001
)
Proceeds from asset sales





3,911





3,911

Change in restricted cash and cash equivalents
2,247

 

 

 

 
2,247

Other investing activities
(730
)
 

 

 

 
(730
)
Intercompany investing activities
(83
)
 

 
(129,708
)
 
129,791

 

Net cash used by investing activities
(72,080
)
 
(717
)
 
(148,189
)
 
129,791

 
(91,195
)
Repayments on revolving line of credit
(419,000
)
 

 

 

 
(419,000
)
Borrowings on revolving line of credit
419,000

 

 

 

 
419,000

Repayments of long-term debt
(400,286
)
 

 
(21
)
 

 
(400,307
)
Issuance of long-term debt
400,000











400,000

Proceeds from issuance of common stock
324

 

 

 

 
324

Excess tax benefits from stock-based awards
6,869

 

 

 

 
6,869

Repurchase of common stock
(10,873
)
 

 

 

 
(10,873
)
Payments of contingent consideration





(2,026
)




(2,026
)
Payment of deferred financing costs
(7,560
)
 

 

 

 
(7,560
)
Distribution to parent

 
(4,883
)
 

 
4,883

 

Distribution to noncontrolling interest

 
(592
)
 

 

 
(592
)
Intercompany financing activities
127,044

 
2,747

 

 
(129,791
)
 

Net cash provided (used) by financing activities
115,518

 
(2,728
)
 
(2,047
)
 
(124,908
)
 
(14,165
)
Effect of exchange rates on cash
(1,466
)
 
464

 
334

 

 
(668
)
Net increase (decrease) in cash and cash equivalents
45,878

 
(327
)
 
(153
)
 

 
45,398

Cash and cash equivalents at beginning of year
36,280

 
10,022

 
1,282

 

 
47,584

Cash and cash equivalents at end of year
$
82,158

 
$
9,695

 
$
1,129

 
$

 
$
92,982