Central Garden & Pet Announces Record Second Quarter Results for Fiscal 1998; Revenues Increase 51%; Net Income Up 148%.

LAFAYETTE, Calif.--(BUSINESS WIRE)--May 7, 1998--Central Garden & Pet Company (NASDAQ: CENT), the nation's leading distributor of lawn and garden and pet supplies, today announced record financial results for the fiscal second quarter ended March 28, 1998.

Net sales for the fiscal second quarter increased 51% to $356.2 million from $236.3 million in the comparable 1997 period. Net income for the fiscal second quarter was $12.4 million, or $0.39 per share on a diluted basis, compared with net income of $5.0 million, or $0.31 per share, in the comparable 1997 quarter. The weighted average number of shares outstanding for the quarter increased to 34,822,000 compared to 19,622,000 in the comparable year-ago period, which is primarily the result of secondary offerings of Central Common Stock in July and December 1997 and shares issued in connection with the acquisition of Pennington Seed.

Net sales for the first half of fiscal 1998 increased 47% to $495.0 million from $336.5 million in the comparable 1997 period. Net income for the first half of fiscal 1998 was $11.8 million, or $0.45 per share on a diluted basis, compared with net income of $3.2 million, or $0.21 per share, in the comparable 1997 period. The weighted average number of shares for the period increased to 26,254,000 compared to 15,284,000 in the comparable 1997 period.

"Central delivered another quarter of strong sales growth, in spite of difficult El Nino weather conditions in the West and Southeast. The company benefited considerably from several strategic acquisitions it completed during fiscal 1997 and the first half of fiscal 1998," said William E. Brown, Chairman and Chief Executive Officer. "During the quarter, we also took another important step in the development of our branded products business with the acquisition of Pennington Seed, a manufacturer of proprietary branded grass seed, wild bird seed, fertilizers and pesticides, as well as a major distributor of lawn and garden products. Pennington is an excellent franchise that not only adds to our growing family of brands, but also enhances our national distribution position in the lawn and garden business."

Noting that Central's business mix had become increasingly diversified over the last few years, Brown said: "Higher margin, proprietary lawn and garden and pet supply brands clearly are destined to play an increasingly important role in Central's future, and I'm pleased with our substantial progress on that front. We see significant opportunities for more robust growth. We remain confident that we can continue our acquisitions momentum while maintaining the pricing discipline that has characterized our efforts to date."

Brown concluded: "In short, we are pleased with the first half of the year and look forward to continuing to strengthen our market position and enhancing our profitability over the balance of fiscal 1998."

Central Garden & Pet Company is the leading national distributor of lawn and garden and pet supply products. Central offers customers a wide array of value-added services designed to increase the sales and profitability of both manufacturers and retailers, including inventory management, advertising and promotional programs, in-store service and display building and sales program development. Central also offers lines of proprietary branded products which include Pennington(R), Kaytee(R), TFH(R), Zodiac(R), and Four Paws(R) pet products, Island(R) aquariums, Matthews(R) redwood products and Grant's(R) ant control products.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts are forward-looking statements 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.

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                    Central Garden & Pet Company
                  Consolidated Statements of Income

                             (Unaudited)

              (in thousands, except per share amounts)

                             Six Months Ended    Three Months Ended
                            March 28,  March 29, March 28, March 29,
                             1998       1997       1998       1997
                             ----       ----       ----       ----


Net Sales                 $ 494,983  $ 336,485  $ 356,156  $ 236,341
Cost of Goods Sold
  and Occupancy             385,863    285,315    280,358    202,625
                          ---------  ---------  ---------  ---------

     Gross Profit           109,120     51,170     75,798     33,716

Selling, General and
 Administrative Expenses     86,085     42,844     52,796     23,211
                          ---------  ---------  ---------  ---------

 Income from Operations      23,035      8,326     23,002     10,505

Interest Expense - Net       (2,623)    (2,747)    (1,696)    (1,810)
                          ---------  ---------  ---------  ---------

Income before income taxes   20,412      5,579     21,306      8,695

Income Taxes                  8,572      2,348      8,947      3,657
                          ---------  ---------  ---------  ---------

     Net Income           $  11,840  $   3,231  $  12,359 $     5038
                          =========  =========  =========  =========

Net Income per Common
  Share Outstanding
  Basic                   $    0.46  $    0.22  $    0.41  $    0.34
                          =========  =========  =========  =========

  Diluted                 $    0.45  $    0.21  $    0.39  $    0.31
                          =========  =========  =========  =========

Weighted Average Shares Outstanding
   Basic                     25,734     14,712     30,151     14,950

   Diluted                   26,254     15,284     34,822     19,622

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                     Central Garden & Pet Company
                 Condensed Consolidated Balance Sheets

                              (Unaudited)

                             (in thousands)

                                        March 28,  September 27,
                                          1998         1997

Assets
Current Assets:
     Cash                            $   23,101   $  100,125
     Accounts Receivable                224,031       85,028
     Inventories                        403,036      218,796
     Other Current Assets                18,130       10,470
                                     ----------   ----------

     Total Current Assets               668,298      414,419

     Property and Equipment - net        78,773       22,688

Other Assets                            371,785      121,936
                                     ----------   ----------

Total Assets                         $1,118,856   $  559,043
                                     ==========   ==========


Liabilities & Shareholders' Equity
Current Liabilities:
     Notes Payable                   $   66,590   $       72
     Accounts Payable                   300,035      136,220
     Other Current Liabilities           41,233       24,201
                                     ----------   ----------

     Total Current Liabilities          407,858      160,493

Long-Term Liabilities                   132,680      115,200

Other Long-Term Obligations              14,906        1,543

Shareholders' Equity                    563,412      281,807
                                     ----------   ----------

Total Liabilities &
   Shareholders' Equity              $1,118,856   $  559,043
                                     ==========   ==========

CONTACT: Gregory Reams 

Central Garden & Pet

[phone]

or

Paul Verbinnen/Debbie Miller

Sard Verbinnen & Co.

[phone]