Consolidating Condensed Financial Information of Guarantor Subsidiaries

v3.20.1

Consolidating Condensed Financial Information of Guarantor Subsidiaries	6 Months Ended
	Mar. 28, 2020
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 Notes and 2028 Notes. Certain subsidiaries and operating divisions are not guarantors of the 2023 Notes and 2028 Notes. Those subsidiaries that are guarantors and co-obligors of the 2023 Notes and 2028 Notes are as follows: Arden Companies, LLC C&S Products Co., Inc. 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 and 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 Three Months Ended March 28, 2020 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 218,951    $ 35,651    $ 473,627    $ (25,000)   $ 703,229    Cost of goods sold and occupancy 167,640    33,240    318,451    (23,219)   496,112         Gross profit 51,311    2,411    155,176    (1,781)   207,117    Selling, general and administrative expenses 47,616    8,988    86,189    (1,781)   141,012         Operating income (loss) 3,695    (6,577)   68,987    —    66,105    Interest expense (10,666)   (84)   (3)   —    (10,753)   Interest income 1,409    8    —    —    1,417    Other income (expense) (361)   (668)   50    —    (979)   Income (loss) before taxes and equity in earnings (losses) of affiliates (5,923)   (7,321)   69,034    —    55,790    Income tax expense (benefit) (433)   185    12,896    —    12,648    Equity in earnings (loss) of affiliates 48,194    —    69    (48,263)   —    Net income (loss) including noncontrolling interest 42,704    (7,506)   56,207    (48,263)   43,142    Net loss attributable to noncontrolling interest —    438    —    —    438    Net income (loss) attributable to Central Garden & Pet Company $ 42,704    $ (7,944)   $ 56,207    $ (48,263)   $ 42,704    CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended March 30, 2019 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 214,042    $ 35,191    $ 449,810    $ (25,342)   $ 673,701    Cost of goods sold and occupancy 163,133    30,343    297,864    (23,690)   467,650         Gross profit 50,909    4,848    151,946    (1,652)   206,051    Selling, general and administrative expenses 47,135    10,485    87,930    (1,652)   143,898         Operating income (loss) 3,774    (5,637)   64,016    —    62,153    Interest expense (10,482)   (141)   (17)   —    (10,640)   Interest income 2,250    5    —    —    2,255    Other income (expense) 305    243    (48)   —    500    Income (loss) before taxes and equity in earnings (losses) of affiliates (4,153)   (5,530)   63,951    —    54,268    Income tax expense (benefit) (1,748)   (55)   13,349    11,546    Equity in earnings of affiliates 44,796    —    (101)   (44,695)   —    Net income (loss) including noncontrolling interest 42,391    (5,475)   50,501    (44,695)   42,722    Net income attributable to noncontrolling interest —    331    —    —    331    Net income (loss) attributable to Central Garden & Pet Company $ 42,391    $ (5,806)   $ 50,501    $ (44,695)   $ 42,391    CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS   Six Months Ended March 28, 2020 (in thousands)   Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 389,279    $ 59,488    $ 774,668    $ (37,378)   $ 1,186,057    Cost of goods sold and occupancy 299,913    56,952    525,435    (34,626)   847,674         Gross profit 89,366    2,536    249,233    (2,752)   338,383    Selling, general and administrative expenses 90,853    16,807    165,305    (2,752)   270,213         Operating income (loss) (1,487)   (14,271)   83,928    —    68,170    Interest expense (21,244)   (144)   (6)   —    (21,394)   Interest income 3,406    15    —    —    3,421    Other income (expense) (436)   69    (307)   —    (674)   Income (loss) before taxes and equity in earnings (losses) of affiliates (19,761)   (14,331)   83,615    —    49,523    Income tax expense (benefit) (4,331)   (180)   15,431    —    10,920    Equity in earnings of affiliates 53,717    —    (611)   (53,106)   —    Net income (loss) including noncontrolling interest 38,287    (14,151)   67,573    (53,106)   38,603    Net income attributable to noncontrolling interest —    316    —    —    316    Net income (loss) attributable to Central Garden & Pet Company $ 38,287    $ (14,467)   $ 67,573    $ (53,106)   $ 38,287    CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS   Six Months Ended March 30, 2019 (in thousands)   Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 387,448    $ 58,820    $ 729,644    $ (40,221)   $ 1,135,691    Cost of goods sold and occupancy 299,146    52,346    485,547    (37,581)   799,458         Gross profit 88,302    6,474    244,097    (2,640)   336,233    Selling, general and administrative expenses 90,800    17,836    157,903    (2,640)   263,899          Operating income (loss) (2,498)   (11,362)   86,194    —    72,334    Interest expense (20,979)   (255)   (20)   —    (21,254)   Interest income 4,783    9    —    —    4,792    Other income (expense) 342    27    (61)   —    308    Income (loss) before taxes and equity in earnings (losses) of affiliates (18,352)   (11,581)   86,113    —    56,180    Income tax expense (benefit) (3,836)   (311)   15,966    —    11,819    Equity in earnings (losses) of affiliates 58,710    —    (1,213)   (57,497)   —    Net income (loss) including noncontrolling interest 44,194    (11,270)   68,934    (57,497)   44,361    Net income attributable to noncontrolling interest —    167    —    —    167    Net income (loss) attributable to Central Garden & Pet Company $ 44,194    $ (11,437)   $ 68,934    $ (57,497)   $ 44,194    CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)   Three Months Ended March 28, 2020 (in thousands)   Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 42,704    $ (7,506)   $ 56,207    $ (48,263)   $ 43,142    Other comprehensive loss: Foreign currency translation (405)   (227)   (83)   310    (405)   Total comprehensive income (loss) 42,299    (7,733)   56,124    (47,953)   42,737    Comprehensive income attributable to noncontrolling interests —    438    —    —    438    Comprehensive income (loss) attributable to Central Garden & Pet Company $ 42,299    $ (8,171)   $ 56,124    $ (47,953)   $ 42,299    CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)   Three Months Ended March 30, 2019 (in thousands)   Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 42,391    $ (5,475)   $ 50,501    $ (44,695)   $ 42,722    Other comprehensive income: Foreign currency translation 212    127    35    (162)   212    Total comprehensive income (loss) 42,603    (5,348)   50,536    (44,857)   42,934    Comprehensive income attributable to noncontrolling interests —    331    —    —    331    Comprehensive income (loss) attributable to Central Garden & Pet Company $ 42,603    $ (5,679)   $ 50,536    $ (44,857)   $ 42,603    CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Six Months Ended March 28, 2020 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income $ 38,287    $ (14,151)   $ 67,573    $ (53,106)   $ 38,603    Other comprehensive income (loss): Foreign currency translation 32    70    (62)   (8)   32    Total comprehensive income (loss) 38,319    (14,081)   67,511    (53,114)   38,635    Comprehensive income attributable to noncontrolling interests —    316    —    —    316    Comprehensive income (loss) attributable to Central Garden & Pet Company $ 38,319    $ (14,397)   $ 67,511    $ (53,114)   $ 38,319    CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Six Months Ended March 30, 2019 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income $ 44,194    $ (11,270)   $ 68,934    $ (57,497)   $ 44,361    Other comprehensive loss: Foreign currency translation (62)   (2)   (60)   62    (62)   Total comprehensive income 44,132    (11,272)   68,874    (57,435)   44,299    Comprehensive income (loss) attributable to noncontrolling interests —    167    —    —    167    Comprehensive income (loss) attributable to Central Garden & Pet Company $ 44,132    $ (11,439)   $ 68,874    $ (57,435)   $ 44,132    CONSOLIDATING CONDENSED BALANCE SHEET   March 28, 2020 (in thousands)   Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 319,187    $ 11,165    $ 1,203    $ —    $ 331,555    Restricted cash 13,021    —    —    —    13,021    Accounts receivable, net 137,422    18,661    304,902    —    460,985    Inventories, net 125,002    46,241    345,964    —    517,207    Prepaid expenses and other 7,626    1,839    26,695    —    36,160    Total current assets 602,258    77,906    678,764    —    1,358,928    Property, plant and equipment, net 27,561    34,962    179,355    —    241,878    Goodwill 20,577    7,414    261,863    —    289,854    Operating lease right-of-use assets 48,013    5,916    45,169    —    99,098    Other long-term assets 48,172    4,791    133,690    (9,004)   177,649    Intercompany receivable 62,722    —    815,955    (878,677)   —    Investment in subsidiaries 1,838,475    —    —    (1,838,475)   —    Total $ 2,647,778    $ 130,989    $ 2,114,796    $ (2,726,156)   $ 2,167,407    LIABILITIES AND EQUITY Accounts payable $ 53,323    $ 22,800    $ 110,748    $ —    $ 186,871    Accrued expenses 59,861    5,216    72,646    —    137,723    Current operating lease liability 19,306    3,206    9,891    —    32,403    Current portion of long-term debt 103    —    —    —    103    Total current liabilities 132,593    31,222    193,285    —    357,100    Long-term debt 693,622    —    —    —    693,622    Operating lease long term liabilities 30,721    2,670    37,369    —    70,760    Intercompany payable 797,082    81,595    —    (878,677)   —    Losses in excess of investment in subsidiaries —    —    26,408    (26,408)   —    Other long-term obligations 747    —    60,740    (9,004)   52,483    Total Central Garden & Pet shareholders’ equity (deficit) 993,013    15,073    1,796,994    (1,812,067)   993,013    Noncontrolling interest —    429    —    —    429    Total equity 993,013    15,502    1,796,994    (1,812,067)   993,442    Total $ 2,647,778    $ 130,989    $ 2,114,796    $ (2,726,156)   $ 2,167,407    CONSOLIDATING CONDENSED BALANCE SHEET   March 30, 2019 (in thousands)   Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 322,149    $ 6,354    $ 1,221    $ —    $ 329,724    Restricted cash 10,888    —    5,227    —    16,115    Accounts receivable, net 134,251    22,844    299,034    —    456,129    Inventories, net 138,778    46,035    332,345    —    517,158    Prepaid expenses and other 8,355    1,386    23,420    —    33,161    Total current assets 614,421    76,619    661,247    —    1,352,287    Property, plant and equipment, net 29,701    36,180    151,657    —    217,538    Goodwill 20,578    7,414    253,185    —    281,177    Other long-term assets 47,512    6,273    147,035    (5,682)   195,138    Intercompany receivable 59,152    —    680,937    (740,089)   —    Investment in subsidiaries 1,688,163    —    —    (1,688,163)   —    Total $ 2,459,527    $ 126,486    $ 1,894,061    $ (2,433,934)   $ 2,046,140    LIABILITIES AND EQUITY Accounts payable $ 41,488    $ 21,833    $ 94,275    $ —    $ 157,596    Accrued expenses 55,181    6,200    75,032    —    136,413    Current portion of long-term debt 119    —    5,000    —    5,119    Total current liabilities 96,788    28,033    174,307    —    299,128    Long-term debt 692,459    —    187    —    692,646    Intercompany payable 662,927    77,163    —    (740,090)   —    Losses in excess of investment in subsidiaries —    —    26,248    (26,248)   —    Other long-term obligations 8,604    —    52,142    (5,682)   55,064    Total Central Garden & Pet shareholders’ equity (deficit) 998,749    20,737    1,641,177    (1,661,914)   998,749    Noncontrolling interest —    553    —    —    553    Total equity 998,749    21,290    1,641,177    (1,661,914)   999,302    Total $ 2,459,527    $ 126,486    $ 1,894,061    $ (2,433,934)   $ 2,046,140    CONSOLIDATING CONDENSED BALANCE SHEET   September 28, 2019 (in thousands)   Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 489,590    $ 7,308    $ 851    $ —    $ 497,749    Restricted cash 12,952    —    —    —    12,952    Accounts receivable, net 99,372    11,551    189,212    —    300,135    Inventories, net 121,344    30,826    314,027    —    466,197    Prepaid expenses and other assets 9,339    1,241    19,580    —    30,160    Total current assets 732,597    50,926    523,670    —    1,307,193    Property, plant and equipment, net 27,395    35,854    182,156    —    245,405    Goodwill 20,578    7,414    258,085    —    286,077    Other long-term assets 55,690    5,487    139,138    (13,970)   186,345    Intercompany receivable 37,544    —    879,231    (916,775)   —    Investment in subsidiaries 1,784,750    —    —    (1,784,750)   —    Total $ 2,658,554    $ 99,681    $ 1,982,280    $ (2,715,495)   $ 2,025,020    LIABILITIES AND EQUITY Accounts payable $ 47,506    $ 6,895    $ 94,845    $ —    $ 149,246    Accrued expenses and other liabilities 54,623    4,814    69,729    —    129,166    Current portion of long term debt 113    —    —    —    113    Total current liabilities 102,242    11,709    164,574    —    278,525    Long-term debt 693,037    —    —    —    693,037    Intercompany payable 858,673    58,102    —    (916,775)   —    Losses in excess of investment in subsidiaries —    —    25,567    (25,567)   —    Other long-term obligations 8,595    —    62,656    (13,970)   57,281    Total Central Garden & Pet shareholders’ equity (deficit) 996,007    29,700    1,729,483    (1,759,183)   996,007    Noncontrolling interest —    170    —    —    170    Total equity 996,007    29,870    1,729,483    (1,759,183)   996,177    Total $ 2,658,554    $ 99,681    $ 1,982,280    $ (2,715,495)   $ 2,025,020    CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS   Six Months Ended March 28, 2020 (in thousands)   Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash used by operating activities $ (25,504)   $ (19,073)   $ (47,851)   $ (230)   $ (92,658)   Additions to property, plant and equipment (4,236)   (291)   (14,960)   —    (19,487)   Investments (4,439)   —    —    —    (4,439)   Other investing activities (437)   —    —    —    (437)   Intercompany investing activities (25,179)   —    63,276    (38,097)   —    Net cash (used) provided by investing activities (34,291)   (291)   48,316    (38,097)   (24,363)   Repayments of long-term debt (59)   —    —    —    (59)   Payment of financing costs (959)   (959)   Repurchase of common stock (48,026)   —    —    —    (48,026)   Distribution to parent —    (230)   —    230    —    Distribution to noncontrolling interest —    (57)   —    —    (57)   Payment of contingent consideration liability —    —    (90)   —    (90)   Intercompany financing activities (61,589)   23,492    —    38,097    —    Net cash (used) provided by financing activities (110,633)   23,205    (90)   38,327    (49,191)   Effect of exchange rate changes on cash, cash equivalents and restricted cash 94    16    (23)   —    87    Net increase (decrease) in cash, cash equivalents and restricted cash (170,334)   3,857    352    —    (166,125)   Cash, cash equivalents and restricted cash at beginning of period 502,542    7,308    851    —    510,701    Cash, cash equivalents and restricted cash at end of period $ 332,208    $ 11,165    $ 1,203    $ —    $ 344,576    CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS   Six Months Ended March 30, 2019 (in thousands)   Parent Non-Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash (used) provided by operating activities $ (23,565)   $ (17,128)   $ (38,626)   $ —    $ (79,319)   Additions to property, plant and equipment (1,716)   (3,350)   (9,236)   —    (14,302)   Payments to acquire companies, net of cash acquired (11,137)   —    —    —    (11,137)   Investments (1,749)   —    —    —    (1,749)   Other investing activities (368)   —    —    —    (368)   Intercompany investing activities (18,788)   —    88,949    (70,161)   —    Net cash used by investing activities (33,758)   (3,350)   79,713    (70,161)   (27,556)   Repayments of long-term debt (3)   —    (36,463)   —    (36,466)   Repurchase of common stock (3,739)   —    —    —    (3,739)   Payment of contingent consideration —    —    (66)   —    (66)   Intercompany financing activities (91,005)   20,844    —    70,161    —    Net cash provided (used) by financing activities (94,747)   20,844    (36,529)   70,161    (40,271)   Effect of exchange rates on cash, cash equivalents and restricted cash (2)   (17)   (1)   —    (20)   Net increase (decrease) in cash, cash equivalents and restricted cash (152,072)   349    4,557    —    (147,166)   Cash, cash equivalents and restricted cash at beginning of period 485,109    6,005    1,891    —    493,005    Cash, cash equivalents and restricted cash at end of period $ 333,037    $ 6,354    $ 6,448    $ —    $ 345,839