Central Garden & Pet Reports Second Quarter Results; Reaffirms Fiscal 2003 Earnings Guidance of $1.70-$1.80 Per Diluted Share.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)--May 1, 2003 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) today announced its financial results for the fiscal second quarter of 2003, ended March 29, 2003. 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 second quarter were $330.5 million compared with $290.7 million in the comparable fiscal 2002 period. The Company recorded net income for the quarter of $13.5 million, or $0.68 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 with a net income of $10.9 million, or $0.53 per diluted share, in the comparable year-ago period. The improved results for the second fiscal quarter of 2003 were driven by continued growth of higher margin proprietary branded product sales as well as lower 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. expenses. Partially offsetting these improvements were higher than normal grain prices, higher insurance costs and higher interest expense, due primarily to the Company's issuance of $150 million of 9 1/8% senior subordinated notes due 2013 and retirement of its 6% convertible subordinated notes. In connection with this refinancing Refinancing An extension and/or increase in amount of existing debt. , the Company incurred a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge to interest expense in the 2003 second quarter of $1.4 million. Income from operations for the second fiscal quarter of 2003 improved to $28.2 million from $21.3 million in the year-ago period. Depreciation and amortization expense for the most recent quarter totaled $4.3 million, the same as the prior year. Unusual expenses, consisting primarily of litigation expenses, were $1.3 million and $8.8 million in the second fiscal quarters of 2003 and 2002, respectively. Net sales for the first half of fiscal 2003 were $542.4 million, compared with $501.4 million in the comparable 2002 period. Net income for the first half of 2003 was $12.8 million, or $0.64 per diluted share, compared with $9.4 million, or $0.51 per diluted share, in the comparable year ago period, before the effect of adopting 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 on September September: see month. 30, 2001. In the first half of fiscal 2002, including the effect of the non-cash SFAS No. 142 accounting charge of $146.7 million, or $112.2 million after-tax, the Company reported a net loss of $102.8 million, or $4.44 per diluted share. Central continues to anticipate substantial earnings growth and reaffirms its expectation that fiscal 2003 net income will be in the range of $1.70-$1.80 per diluted share. The Company will discuss its fiscal second quarter 2003 results on an earnings conference call today at 5:30 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . 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 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. 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 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, 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 Six Months Ended
March 29, March 30, March 29, March 30,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net Sales $ 330,509 $ 290,693 $ 542,445 $ 501,352
Cost of Goods Sold and
Occupancy 231,419 199,793 382,137 348,950
---------- ---------- ---------- ----------
Gross Profit 99,090 90,900 160,308 152,402
Selling, General and
Administrative Expenses 70,916 69,589 130,170 129,210
---------- ---------- ---------- ----------
Income from
Operations 28,174 21,311 30,138 23,192
Interest Expense (6,341) (3,682) (9,184) (7,620)
Interest Income 44 14 70 41
Other Income 671 892 330 364
---------- ---------- ---------- ----------
Income Before Income
Taxes 22,548 18,535 21,354 15,977
Income Taxes 9,019 7,599 8,542 6,550
---------- ---------- ---------- ----------
Income Before Cumulative
Effect of Accounting
Change 13,529 10,936 12,812 9,427
Cumulative Effect of
Change in Accounting for
Goodwill, net of tax --- --- --- (112,237)
Net Income (Loss) $ 13,529 $ 10,936 $ 12,812 $(102,810)
========== ========== ========== ==========
Basic Earnings (Loss) Per
Common Share:
Before Cumulative
Effect of
Accounting
Change $ 0.70 $ 0.59 $ 0.67 $ 0.51
Accounting Change --- --- --- (6.08)
---------- ---------- ---------- ----------
Basic Earnings
(Loss) Per Common
Share $ 0.70 $ 0.59 $ 0.67 $ (5.57)
========== ========== ========== ==========
Diluted Earnings (Loss)
Per Common Share:
Before Cumulative
Effect of
Accounting
Change $ 0.68 $ 0.53 $ 0.64 $ 0.51
Accounting Change --- --- --- (4.95)
---------- ---------- ---------- ----------
Diluted Earnings
(Loss) Per Common
Share $ 0.68 $ 0.53 $ 0.64 $ (4.44)
========== ========== ========== ==========
Weighted Average Shares
Outstanding
Basic 19,234 18,469 19,147 18,458
Diluted 20,009 22,734 19,900 22,661
Central Garden & Pet Company
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
March March September
29, 30, 28,
2003 2002 2002
---------- ---------- ----------
Assets
Current Assets:
Cash & Cash Equivalents $ 7,007 $ 8,363 $ 10,884
Accounts Receivable 200,954 192,638 130,984
Inventories 231,438 218,293 193,159
Other Current Assets 13,926 20,464 26,096
---------- ---------- ----------
Total Current Assets 453,325 439,758 361,123
Property & Equipment - Net 99,235 105,864 100,864
Other Assets 272,936 277,435 269,970
---------- ---------- ----------
Total $ 825,496 $ 823,057 $ 731,957
========== ========== ==========
Liabilities & Shareholders' Equity
Current Liabilities:
Notes Payable $ 81,747 $ 134,260 $ 59,975
Accounts Payable 129,848 133,380 96,796
Other Current Liabilities 54,723 49,742 50,335
---------- ---------- ----------
Total Current Liabilities 266,318 317,382 207,106
Long -Term Liabilities 160,922 152,101 145,331
Other Long -Term Obligations 2,128 978 2,012
Shareholders' Equity 396,128 352,596 377,508
---------- ---------- ----------
Total $ 825,496 $ 823,057 $ 731,957
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