Central Garden & Pet Announces Fourth Quarter and Full Year Results for Fiscal 2002.Business Editors LAFAYETTE Lafayette (lä'fēĕt`, lăf'ēĕt`). 1 City (1990 pop. 23,501), Contra Costa co., NW Calif., a residential suburb in the San Francisco–Oakland area; settled 1848, inc. 1968. , Calif.--(BUSINESS WIRE)--Dec. 12, 2002 Central Garden & Pet Company (Nasdaq:CENT) 4Q 2002 Net Income of $0.04 Per Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. Share Compared to Loss of $0.74 in 2001 Fiscal 2002 Net Income Before SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142 Accounting Charge of $1.44 Per Diluted Share Compared to a Loss of $0.39 in 2001 Provides Guidance for Fiscal 2003 Net Income in the Range of $1.70-$1.80 Per Diluted Share Central Garden & Pet Company (Nasdaq:CENT) today announced financial results for the fiscal fourth quarter and full year ended September September: see month. 28, 2002. Net income for the fiscal fourth quarter increased to $751,000, or $0.04 per diluted share, from a loss of $13.7 million, or $0.74 per diluted share, in the comparable 2001 period. The improved earnings were driven by continued growth of our higher margin proprietary branded product sales, significant cost reductions, including unusual expenses, the elimination of goodwill amortization and lower interest expense. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the 2002 quarter were $240.8 million compared to $246.3 million in the year-ago period. Sales declined slightly due to lower sales of other manufacturers' products, partially offset by increases in our branded product sales. "During the past several years, we have transitioned to a leading marketer and producer of branded products from a traditional pet and lawn and garden supplies distributor," said William Brown William Brown (or Browne) may refer to (some of whom were also called 'Bill'): Politicians
Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. improved from 13.6% in fiscal 1996 to 29.7% in fiscal 2002. We are pleased with our progress and profitability in 2002 and our prospects for 2003 and beyond." Fiscal 2002 fourth quarter results do not include goodwill amortization due to the Company's adoption of Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). Statement No. 142 ("SFAS No. 142"), effective September 30, 2001. Fourth quarter 2001 results included $3.0 million of goodwill amortization. The results for the fourth quarter of fiscal 2002 included $2.1 million of expense items which management regards as unusual, primarily related to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. costs. The fourth quarter of fiscal 2001 included $16.6 million of unusual expense items, principally associated with the downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing of the Company's lower margin distribution business and litigation costs. Results for the fourth fiscal quarters of 2002 and 2001 included depreciation and amortization of $4.8 million and $7.0 million, respectively. Net income for fiscal year 2002 before the effect of SFAS No. 142 was $28.5 million, or $1.44 per diluted share, compared to a loss of $7.1 million, or $0.39 per diluted share, in fiscal year 2001. The improved earnings for the year were attributable to growth of our higher margin branded product sales, significant cost reductions, including unusual expenses, the elimination of approximately $11 million of goodwill amortization, increased other income, and reduced interest expense. As previously reported, Central adopted SFAS No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " for the fiscal year beginning September 30, 2001. As a result, the Company recorded a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. to write down goodwill of $146.7 million, or $112.2 million after-tax. Including the effect of the accounting charge, the Company reported a net loss of $83.7 million, or $3.44 per diluted share, for fiscal year 2002. Net sales declined slightly from $1.12 billion in fiscal year 2001 to $1.08 billion in fiscal year 2002 due to fewer sales of other manufacturers' products. The weighted average number of diluted shares outstanding was 19.1 million for the quarter and 23.0 million for fiscal year 2002. Diluted shares outstanding for the fiscal year 2002 include the Company's convertible securities, as the assumed conversion is dilutive in the full year 2002 period but the securities are excluded in the fourth quarter of 2002 and fiscal 2001 as their inclusion would be anti-dilutive in those periods. Central anticipates substantial earnings growth in fiscal 2003. The Company's expectation for fiscal 2003 is that net income will be in the range of $1.70-$1.80 per diluted share. The Company will discuss this earnings guidance and its fourth quarter and fiscal 2002 results on an earnings conference call today at 5:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . The earnings conference call will be simultaneously broadcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through Central's website, http://www.centralgardenandpet.com. To listen to the webcast, please log on to the website prior to the scheduled call time to register and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. any necessary audio software. Central Garden & Pet Company is a leading marketer and producer of quality branded products for the pet and lawn and garden supplies markets. Our pet products include pet bird and small animal food, aquarium aquarium, name for any supervised exhibit of aquatic animals and plants. Aquariums are known to have been constructed in ancient Rome, Egypt, and Asia. Goldfish have been bred in China for several hundred years and are still the most commonly kept fish in home products, flea, tick tick: see mite. tick Any of some 825 parasitic arachnid species (suborder Ixodida, order Parasitiformes), found worldwide. Adults may be slightly more than an inch (30 mm) long, but most species are much smaller. and pest control pest control n → control m de plagas pest control n → lutte f contre les nuisibles pest control pest n products, edible bones, cages, carriers, pet books, and other dog, cat, reptile and small animal products. These products are sold under a number of brand names, including Kaytee, All-Glass Aquarium, Zodiac, Nylabone, TFH TFH Technische Fachhochschule (German: Engeneering College/University) TFH 24 Hours (Movie) TFH Thread from Hell (newsgroups) TFH Tinfoil Hat TFH Thanks For Helping and Four Paws. Our lawn and garden products include grass seed, wild bird seed, weed weed, common term for any wild plant, particularly an undesired plant, growing in cultivated ground, where it competes with crop plants for soil nutrients and water. and insect control products, decorative outdoor patio patio In Spanish and Latin American architecture, a courtyard open to the sky within a building. A Spanish development of the Roman atrium, it is comparable to the Italian cortile but provides more seclusion, possibly due to Moorish custom. The patio of the contemporary U.S. products and ant control products. These products are sold under a number of brand names, including Pennington, Norcal Pottery pottery, the baked-clay wares of the entire ceramics field. For a description of the nature of the material, see clay. Types of Pottery It usually falls into three main classes—porous-bodied pottery, stoneware, and porcelain. , Lilly Miller, Matthews Four Seasons, AMDRO and Grant's. For additional information on Central Garden & Pet, including access to the Company's SEC filings, please visit the Company's website at http://www.centralgardenandpet.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements contained in this release which are not historical facts, including future earnings guidance, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks are described in the Company's Securities and Exchange Commission filings, including, without limitation, the resolution of the litigation between the Company and The Scotts Company; the success of and the costs associated with the realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of the Company's lawn and garden distribution operations; any liabilities to which the Company may become subject as a result of the August 2, 2000 fire at its Phoenix distribution center; and the impact of any other outstanding or potential litigation. As previously announced, Central has instructed its financial advisors to study alternatives for maximizing shareholder value, including among others, asset sales and new strategic alliances.
Central Garden & Pet Company
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Fiscal Year Ended
------------------ -----------------
September September September September
28, 29, 28, 29,
2002 2001 2002 2001
--------- --------- ----------- -----------
Net Sales $240,819 $246,268 $1,077,780 $1,122,999
Cost of Goods Sold and
Occupancy 173,856 181,851 757,437 811,186
--------- --------- ----------- -----------
Gross Profit 66,963 64,417 320,343 311,813
Selling, General and
Administrative
Expenses 63,655 81,208 267,579 297,751
--------- --------- ----------- -----------
Income (Loss)
from Operations 3,308 (16,791) 52,764 14,062
Interest Expense (3,382) (5,263) (14,745) (23,247)
Interest Income 63 57 137 164
Other Income 777 567 5,548 1,631
--------- --------- ----------- -----------
Income (Loss) Before
Income Taxes 766 (21,430) 43,704 (7,390)
Income Taxes 15 (7,741) 15,159 (247)
--------- --------- ----------- -----------
Income (Loss) Before
Cumulative
Effect of Accounting
Change $751 $(13,689) $28,545 $(7,143)
Cumulative Effect of Change
in
Accounting for
Goodwill, net
of tax ---- ---- (112,237) ----
--------- --------- ----------- -----------
Net Income (Loss) $751 $(13,689) $(83,692) $(7,143)
========= ========= =========== ===========
Basic Earnings (Loss) Per
Common Share:
Before Cumulative
Effect of
Accounting Change $0.04 $(0.74) $1.54 $(0.39)
Accounting Change ---- ---- (6.04) ----
--------- --------- ----------- -----------
Basic Earnings
(Loss) Per
Common Share $0.04 $(0.74) $(4.50) $(0.39)
========= ========= =========== ===========
Diluted Earnings (Loss) Per
Common Share:
Before Cumulative
Effect of
Accounting Change $0.04 $(0.74) $1.44 $(0.39)
Accounting Change ---- ---- (4.88) ----
--------- --------- ----------- -----------
Diluted Earnings
(Loss) Per
Common Share $0.04 $(0.74) $(3.44) $(0.39)
========= ========= =========== ===========
Weighted Average Shares
Outstanding
Basic 18,820 18,433 18,581 18,402
Diluted 19,141 18,443 23,009 18,402
Central Garden & Pet Company
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
September 28, September 29,
2002 2001
------------- -------------
Assets
Current Assets:
Cash & Cash Equivalents $10,884 $8,292
Accounts Receivable 130,984 141,791
Inventories 193,159 217,902
Other Current Assets 26,096 35,776
--------------- --------------
Total Current Assets 361,123 403,761
Property & Equipment - Net 100,864 108,798
Other Assets 269,970 404,067
--------------- --------------
Total $731,957 $916,626
=============== ==============
Liabilities & Shareholders' Equity
Current Liabilities:
Notes Payable $59,975 $119,423
Accounts Payable 96,796 127,884
Other Current Liabilities 50,335 45,464
--------------- --------------
Total Current Liabilities 207,106 292,771
Long -Term Liabilities 145,331 151,623
Other Long -Term Obligations 2,012 16,917
Shareholders' Equity 377,508 455,315
--------------- --------------
Total $731,957 $916,626
=============== ==============
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