Central Garden & Pet Announces Record Second Quarter Results for Fiscal 2006.WALNUT CREEK Walnut Creek, residential city (1990 pop. 60,569), Contra Costa co., W Calif., in the San Francisco Bay area; inc. 1914. It is the trade and shipping center of an extensive agricultural area where walnuts are among the major product. , Calif. -- Central Garden & Pet Company (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CENT): --Sales Increased 6%; Income from Operations Increased 15% --Branded Products, Profit Acceleration Program and Acquisitions Drive Growth --Reiterates Fiscal 2006 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Guidance of $2.80 to $2.90 per Fully 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 Central Garden & Pet Company (NASDAQ:CENT) today announced second quarter results for its fiscal year ending September September: see month. 30, 2006. For the second quarter of fiscal 2006 the Company reported 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 of $401 million, an increase of 6% from $379 million in the comparable 2005 period. Income from operations for the quarter increased 15% to $45.7 million. Net income for the quarter increased 17% to $26.2 million from $22.4 million in the year ago period. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 13% to $1.17 from $1.04 in the year ago period. Branded product sales increased 9% while sales of other manufacturers' products, as planned, declined 7%. Depreciation and amortization for the quarter was $6.0 million compared to $4.6 million in the year ago period. The results of the second quarter of fiscal 2006 include costs of $1.6 million related to the Company's previously announced profit acceleration program, $1.6 million related to the early retirement of a previous credit facility, and $1.4 million related to equity-based compensation. Also, taxes for the quarter reflect a benefit of $2.6 million related to reversal of a tax reserve no longer required. Net sales for the Garden Products segment were $214 million, a decline of 3% compared to the second quarter of fiscal 2005. Garden branded products sales were relatively flat while sales of other manufacturers' products declined 13%. The Garden Products segment operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $26.4 million in the quarter, an increase of 9% when compared to the second quarter of fiscal 2005. Net sales for the Pet Products segment were $187 million, an increase of 18% compared to the second quarter of fiscal 2005. Pet branded products sales increased 23% and sales of other manufacturers' products increased 1%. Operating income for the Pet Products segment was $25.1 million in the quarter, an increase of 6%, which includes $1.6 million of profit acceleration program costs, when compared to the second quarter of fiscal 2005. "The strength of our branded products and our ongoing profit acceleration program produced record results," commented Glenn Novotny, President and Chief Executive Officer. "We have made significant progress by completing five strategic acquisitions year to date, and we are well positioned to pursue future internal and external growth opportunities." The Company updated its fiscal 2006 guidance to account for the impact of acquisitions and its corporate financing initiatives. Net sales for the year are now projected to be between $1.55 billion and $1.57 billion, an increase of approximately $100 million when compared to previous guidance. Operating income is expected to be between $133 million and $137 million, an increase of approximately $17 million when compared to previous guidance. Net income is expected to be between approximately $65 million and $68 million, an increase of approximately $3 million when compared to previous guidance. The corresponding earnings per fully diluted share is expected to be between $2.80 and $2.90, in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with previous guidance. The fiscal year-ending Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. fully-diluted share count is expected to be approximately 23.3 million, an increase of approximately 1 million shares when compared to previous guidance reflecting the partial-year impact of the Company's 1.98 million share offering completed in March, 2006. These projected results do not include the impact from any future acquisitions. For the six months ending March 25, 2006 of fiscal 2006, the Company reported net sales of $694 million, an increase of 8% from $644 million in the comparable 2005 period. Income from operations for the period increased 13% to $55.5 million. Net income for the first six month period increased 16% to $28.8 million from $24.9 million in the year ago period. Diluted earnings per share increased 12% to $1.30 from $1.16 in the year ago period. Branded product sales increased 10% while sales of other manufacturers' products declined 1%. Depreciation and amortization for the first six month period was $11.2 million compared to $9.1 million in the year ago period. Results for the first six month period of fiscal 2006 include a benefit of $2.6 million related to a reversal of a tax reserve. The results also include costs of $3.2 million related to the Company's previously announced profit acceleration program and $1.6 million related to the early retirement of a previous credit facility. Costs related to equity-based compensation were an additional $2.5 million. The Company will discuss its second quarter results for fiscal 2006 on a conference call today at 4:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . The 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.central.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 innovator, 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. , mosquito mosquito (məskē`tō), small, long-legged insect of the order Diptera, the true flies. The females of most species have piercing and sucking mouth parts and apparently they must feed at least once upon mammalian blood before their eggs can and other 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, SuperPet, All-Glass Aquarium, Oceanic, Kent Marine, Energy Savers Unlimited, Zodiac, Pre-Strike, Altosid, 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 , Four Paws, Interpet, Breeder's Choice and Farnam. Our lawn and garden products include grass seed, wild bird food, 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, and 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. 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. , New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. Pottery, GKI/Bethlehem Lighting, Lilly Miller, Matthews Four Seasons, Cedar cedar, common name for a number of trees, mostly coniferous evergreens. The true cedars belong to the small genus Cedrus of the family Pinaceae (pine family). Works, AMDRO, Grant's, Sevin and Over'n Out. For additional information on Central Garden & Pet, including access to the Company's SEC filings, please visit the Company's website at http://www.central.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. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.
Central Garden & Pet Company
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
------------------- -------------------
March 25, March 26, March 25, March 26,
2006 2005 2006 2005
--------- --------- --------- ---------
Net Sales $401,332 $378,854 $694,063 $644,430
Cost of Goods Sold and
Occupancy 264,580 251,980 465,313 431,515
--------- --------- --------- ---------
Gross Profit 136,752 126,874 228,750 212,915
Selling, General and
Administrative
Expenses 91,018 87,198 173,241 163,723
--------- --------- --------- ---------
Income from Operations 45,734 39,676 55,509 49,192
Interest Expense (10,227) (5,610) (16,571) (10,908)
Interest Income 602 107 1,287 210
Other Income 1,803 1,974 1,852 1,654
--------- --------- --------- ---------
Income Before Income Taxes 37,912 36,147 42,077 40,148
Income Taxes 11,687 13,775 13,292 15,260
--------- --------- --------- ---------
Net Income $26,225 $22,372 $28,785 $24,888
========= ========= ========= =========
Basic Earnings Per Common
Share: 1.21 1.08 1.34 $1.20
Diluted Earnings Per Common
Share: 1.17 1.04 1.30 $1.16
Weighted Average Shares
Outstanding
Basic 21,694 20,760 21,425 20,658
Diluted 22,415 21,515 22,096 21,391
Central Garden & Pet Company
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
March 25, September 24,
2006 2005
-------------- -------------
Assets
Current Assets:
Cash & Cash Equivalents $19,147 $28,792
Accounts Receivable 289,096 184,896
Inventories 364,504 270,736
Other Current Assets 34,184 25,853
-------------- -------------
Total Current Assets 706,931 510,277
Property & Equipment - Net 130,311 110,595
Goodwill 369,209 364,847
Other Assets 378,625 70,630
-------------- -------------
Total $1,585,076 $1,056,349
============== =============
Liabilities & Shareholders' Equity
Current Liabilities:
Accounts Payable $139,051 $96,455
Accrued Expenses 79,399 68,152
Current Portion of Long-Term Debt 3,022 2,210
-------------- -------------
Total Current Liabilities 221,472 166,817
Long-Term Debt 652,790 320,854
Other Long-Term Obligations 19,812 18,500
Convertible Redeemable Preferred Stock 3,000 3,000
Shareholders' Equity 688,002 547,178
-------------- -------------
Total $1,585,076 $1,056,349
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