Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 25, 2017 | Apr. 28, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 25, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CENT | |
Entity Registrant Name | CENTRAL GARDEN & PET CO | |
Entity Central Index Key | 887,733 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,160,023 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 37,811,221 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,652,262 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 |
Current assets: | |||
Cash and cash equivalents | $ 6,169 | $ 92,982 | $ 9,826 |
Restricted cash | 10,988 | 10,910 | 11,946 |
Accounts receivable (less allowance for doubtful accounts of $20,227, $23,759 and $21,069) | 343,202 | 201,151 | 340,526 |
Inventories | 426,385 | 362,004 | 390,754 |
Prepaid expenses and other | 54,074 | 47,759 | 50,758 |
Total current assets | 840,818 | 714,806 | 803,810 |
Land, buildings, improvements and equipment—net | 175,940 | 158,224 | 164,794 |
Goodwill | 230,385 | 231,385 | 213,753 |
Other intangible assets—net | 91,424 | 95,865 | 82,989 |
Other assets | 60,361 | 11,913 | 57,753 |
Total | 1,398,928 | 1,212,193 | 1,323,099 |
Current liabilities: | |||
Accounts payable | 141,791 | 102,413 | 133,211 |
Accrued expenses | 101,421 | 99,343 | 97,682 |
Current portion of long-term debt | 374 | 463 | 594 |
Total current liabilities | 243,586 | 202,219 | 231,487 |
Long-term debt | 495,870 | 394,806 | 496,396 |
Other long-term obligations | 64,981 | 60,581 | 62,274 |
Equity: | |||
Additional paid-in capital | 391,541 | 393,297 | 391,665 |
Accumulated earnings | 202,822 | 160,501 | 140,082 |
Accumulated other comprehensive income (loss) | (1,658) | (1,294) | (528) |
Total Central Garden & Pet Company shareholders’ equity | 593,220 | 553,014 | 531,722 |
Noncontrolling interest | 1,271 | 1,573 | 1,220 |
Total equity | 594,491 | 554,587 | 532,942 |
Total | 1,398,928 | 1,212,193 | 1,323,099 |
Common Stock | |||
Equity: | |||
Common stock | 122 | 120 | 119 |
Total equity | 122 | 120 | 119 |
Class A Common Stock | |||
Equity: | |||
Common stock | 377 | 374 | 368 |
Total equity | 377 | 374 | 368 |
Class B Common Stock | |||
Equity: | |||
Common stock | 16 | 16 | 16 |
Total equity | $ 16 | $ 16 | $ 16 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 |
Accounts receivable allowance for doubtful accounts | $ 20,227 | $ 21,069 | $ 23,759 |
Common Stock | |||
Common stock, shares outstanding (in shares) | 12,176,787 | 11,998,472 | 11,908,317 |
Class A Common Stock | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares outstanding (in shares) | 37,731,149 | 37,418,572 | 36,794,100 |
Class B Common Stock | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares outstanding (in shares) | 1,652,262 | 1,652,262 | 1,652,262 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2017 | Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 569,924 | $ 541,249 | $ 989,422 | $ 901,061 |
Cost of goods sold and occupancy | 386,395 | 371,910 | 685,215 | 631,936 |
Gross profit | 183,529 | 169,339 | 304,207 | 269,125 |
Selling, general and administrative expenses | 119,669 | 109,936 | 220,409 | 200,949 |
Operating income | 63,860 | 59,403 | 83,798 | 68,176 |
Interest expense | (6,830) | (7,096) | (13,703) | (29,241) |
Interest income | 8 | 9 | 46 | 31 |
Other expense | (965) | (88) | (1,932) | (561) |
Income before income taxes and noncontrolling interest | 56,073 | 52,228 | 68,209 | 38,405 |
Income tax expense | 20,824 | 18,793 | 25,171 | 13,593 |
Income including noncontrolling interest | 35,249 | 33,435 | 43,038 | 24,812 |
Net income attributable to noncontrolling interest | 565 | 738 | 717 | 717 |
Net income attributable to Central Garden & Pet Company | $ 34,684 | $ 32,697 | $ 42,321 | $ 24,095 |
Net income attributable to Central Garden & Pet Company | ||||
Basic (in dollars per share) | $ 0.69 | $ 0.67 | $ 0.85 | $ 0.50 |
Diluted (in dollars per share) | $ 0.67 | $ 0.65 | $ 0.82 | $ 0.48 |
Weighted average shares used in the computation of net income per share: | ||||
Basic (in shares) | 50,079 | 48,717 | 49,872 | 48,641 |
Diluted (in shares) | 51,983 | 50,445 | 51,911 | 50,558 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2017 | Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 35,249 | $ 33,435 | $ 43,038 | $ 24,812 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 144 | (459) | (364) | (692) |
Total comprehensive income | 35,393 | 32,976 | 42,674 | 24,120 |
Comprehensive income attributable to noncontrolling interest | 565 | 738 | 717 | 717 |
Comprehensive income attributable to Central Garden & Pet Company | $ 34,828 | $ 32,238 | $ 41,957 | $ 23,403 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 25, 2017 | Mar. 26, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 43,038 | $ 24,812 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Depreciation and amortization | 20,344 | 18,202 |
Amortization of deferred financing costs | 681 | 773 |
Stock-based compensation | 5,279 | 3,578 |
Excess tax benefits from stock-based awards | (13,166) | (1,181) |
Deferred income taxes | 6,530 | 7,516 |
Write-off of deferred financing costs | 0 | 3,337 |
Loss on sale of property and equipment | 40 | 8 |
Gain on sale of facility | (2,050) | |
Other | 1,085 | 25 |
Change in assets and liabilities (excluding businesses acquired): | ||
Accounts receivable | (139,319) | (111,671) |
Inventories | (63,775) | (35,220) |
Prepaid expenses and other assets | 6,919 | 1,749 |
Accounts payable | 38,041 | 27,415 |
Accrued expenses | 502 | 9,548 |
Other long-term obligations | (391) | 266 |
Net cash used by operating activities | (96,242) | (50,843) |
Cash flows from investing activities: | ||
Additions to property and equipment | (26,794) | (12,795) |
Payments to acquire companies, net of cash acquired | (60,042) | (68,901) |
Proceeds from the sale of business, facility and other assets | 8,268 | |
Change in restricted cash | (78) | 1,211 |
Investment in equity method investee | (2,000) | 0 |
Other investing activities | (1,395) | (500) |
Net cash used in investing activities | (82,041) | (80,985) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (449) | (400,145) |
Proceeds from issuance of long-term debt | 0 | 400,000 |
Borrowings under revolving line of credit | 216,000 | 280,000 |
Repayments under revolving line of credit | (115,000) | (178,000) |
Repurchase of common stock, including shares surrendered for tax withholding | (20,172) | (1,722) |
Payment of contingent consideration liability | (894) | |
Distribution to noncontrolling interest | (1,019) | (592) |
Payment of financing costs | 0 | (6,362) |
Excess tax benefits from stock-based awards | 13,166 | 1,181 |
Net cash provided by financing activities | 91,632 | 94,360 |
Effect of exchange rate changes on cash and cash equivalents | (162) | (290) |
Net decrease in cash and cash equivalents | (86,813) | (37,758) |
Cash and equivalents at beginning of period | 92,982 | 47,584 |
Cash and equivalents at end of period | 6,169 | 9,826 |
Supplemental information: | ||
Cash paid for interest | $ 13,612 | $ 18,781 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Mar. 25, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated balance sheets of Central Garden & Pet Company and subsidiaries (the “Company” or “Central”) as of March 25, 2017 and March 26, 2016 , the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income for the three and six months ended March 25, 2017 and March 26, 2016 , and the condensed consolidated statements of cash flows for the six months ended March 25, 2017 and March 26, 2016 have been prepared by the Company, without audit. In the opinion of management, the interim financial statements include all normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. For the Company’s foreign business in the UK, the local currency is the functional currency. Assets and liabilities are translated using the exchange rate in effect at the balance sheet date. Income and expenses are translated at the average exchange rate for the period. Deferred taxes are not provided on translation gains and losses because the Company expects earnings of its foreign subsidiary to be permanently reinvested. Transaction gains and losses are included in results of operations. See Note 8, Supplemental Equity Information, for further detail. Due to the seasonal nature of the Company’s garden business, the results of operations for the three and six months ended March 25, 2017 are not indicative of the operating results that may be expected for the entire fiscal year. These interim financial statements should be read in conjunction with the annual audited financial statements, accounting policies and financial notes thereto, included in the Company’s 2016 Annual Report on Form 10-K, which has previously been filed with the Securities and Exchange Commission. The September 24, 2016 balance sheet presented herein was derived from the audited financial statements. Noncontrolling Interest Noncontrolling interest in the Company’s condensed consolidated financial statements represents the 20% interest not owned by Central in a consolidated subsidiary. Since the Company controls this subsidiary, its financial statements are consolidated with those of the Company, and the noncontrolling owner’s 20% share of the subsidiary’s net assets and results of operations is deducted and reported as noncontrolling interest on the consolidated balance sheets and as net income (loss) attributable to noncontrolling interest in the consolidated statements of operations. See Note 8, Supplemental Equity Information, for additional information. Restricted Cash Restricted cash includes cash and highly liquid instruments that are used as collateral for stand-alone letter of credit agreements related to normal business transactions. These agreements require the Company to maintain specified amounts of cash as collateral in segregated accounts to support the letters of credit issued thereunder, which will affect the amount of cash the Company has available for other uses. The amount of cash collateral in these segregated accounts was approximately $11.0 million , $11.9 million and $10.9 million as of March 25, 2017 , March 26, 2016 and September 24, 2016 , respectively, and is reflected in Restricted cash on the condensed consolidated balance sheets. Derivative Instruments The Company principally uses a combination of purchase orders and various short and long-term supply arrangements in connection with the purchase of raw materials, including certain commodities. The Company may also enter into commodity futures, options and swap contracts to reduce the volatility of price fluctuations of corn, which impacts the cost of raw materials. The Company’s primary objective when entering into these derivative contracts is to achieve greater certainty with regard to the future price of commodities purchased for use in its supply chain. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. The Company does not perform the assessments required to achieve hedge accounting for commodity derivative positions. Accordingly, the changes in the values of these derivatives are recorded currently in other income (expense) in its condensed consolidated statements of operations. As of March 25, 2017 and March 26, 2016 , the Company had no outstanding derivative instruments. Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted Consolidation In February 2015, the FASB issued ASU 2015-02 (ASU 2015-02), Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation . ASU 2015-02 modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership and affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. ASU 2015-02 became effective during the Company’s first quarter of fiscal 2017, and the adoption of the standard had no impact on the Company's condensed consolidated financial statements. Stock Based Compensation In June 2014, the FASB issued ASU No. 2014-12 (ASU 2014-12), Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 became effective during the Company’s first quarter of fiscal 2017, and the adoption of the standard had no impact on the Company's condensed consolidated financial statements. Accounting Standards Not Yet Adopted Revenue Recognition In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers . This update was issued as Accounting Standards Codification Topic 606. The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On July 9, 2015, the FASB deferred the effective date of ASU 2014-09 for one year. ASU 2014-09 is now effective for the Company beginning in the first quarter of its fiscal year ending September 28, 2019. In March 2016, the FASB issued ASU 2016-08 (ASU 2016-08), Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10 (ASU 2016-10), Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . ASU 2016-10 clarifies the implementation guidance on identifying performance obligations. These ASUs apply to all companies that enter into contracts with customers to transfer goods or services. In May 2016, the FASB issued ASU No. 2016-12 (ASU 2016-12), Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients . ASU 2016-12 is intended to clarify two aspects of Topic 606: first, assessing the collectability criterion, options for the presentation of sales and similar taxes, noncash consideration, transition contract modifications, transition contract completion and secondly, technical corrections. Early adoption is permitted, but not before interim and annual reporting periods beginning after December 15, 2016. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02 (ASU 2016-02), Leases (Topic 842) . ASU 2016-02 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. ASU 2016-02 is effective for the Company in our first quarter of fiscal 2020 on a modified retrospective basis and earlier adoption is permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2016-02 on its consolidated financial statements, and it currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon the adoption of ASU 2016-02 . Stock Compensation In March 2016, the FASB issued ASU 2016-09 (ASU 2016-09), Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 simplifies the accounting for share-based payment award transactions including: income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, or the Company's first quarter of fiscal 2018. Early adoption is permitted. The Company is currently evaluating the requirements of ASU 2016-09 and has not yet determined the impact on its consolidated financial statements. Inventory Measurement In July 2015, the FASB issued ASU 2015-11 (ASU 2015-11), Simplifying the Measurement of Inventory . Under ASU 2015-11, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The standard defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016, or the Company’s first quarter of fiscal 2018. Early application is permitted and should be applied prospectively. The Company is currently evaluating the impact the adoption of ASU 2015-11 will have on its consolidated financial statements. Balance Sheet Classification of Deferred Taxes . In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes . This ASU eliminates the current requirement for entities to present deferred tax liabilities and assets as current and noncurrent in a classified statement of financial position and instead requires that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, or the Company's first quarter of fiscal 2018, and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact the adoption of ASU 2015-17 will have on its consolidated financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15) . The ASU provides additional clarification guidance on the classification of certain cash receipts and payments in the statement of cash flows. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, or the Company's first quarter of fiscal 2019, with early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2016-15 will have on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-18) . This ASU clarifies the presentation of restricted cash on the statement of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending cash balances on the statement of cash flows. ASU 2016-18 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017, or the Company's first quarter of fiscal 2019, with early adoption permitted. The Company does not expect that ASU 2016-18 will have a material impact on its condensed consolidated financial statements and related disclosures. Business Combinations In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (ASU 2017-01), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. The Company is required to apply this guidance to annual periods beginning after December 15, 2017, including interim periods within those periods, or the Company's first quarter of fiscal 2019. The Company is currently evaluating the impact the adoption of ASU 2017-01 will have on its consolidated financial statements. Goodwill In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment . The new guidance simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance will be effective for annual periods or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or the Company's first quarter of fiscal 2021. The amendment should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this amendment is not expected to have a material impact on the Company's consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 25, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC 820 establishes a single authoritative definition of fair value, a framework for measuring fair value and expands disclosure of fair value measurements. ASC 820 requires financial assets and liabilities to be categorized based on the inputs used to calculate their fair values as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability, which reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). The Company’s financial instruments include cash and equivalents, short term investments consisting of bank certificates of deposit, accounts receivable and payable, derivative instruments, short-term borrowings, and accrued liabilities. The carrying amount of these instruments approximates fair value because of their short-term nature. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 25, 2017 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 4,420 $ 4,420 Total liabilities $ 0 $ 0 $ 4,420 $ 4,420 The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 26, 2016 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 6,215 $ 6,215 Total liabilities $ 0 $ 0 $ 6,215 $ 6,215 The following table presents our financial assets and liabilities at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of September 24, 2016 : Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 5,113 $ 5,113 Total liabilities $ 0 $ 0 $ 5,113 $ 5,113 (a) The liability for contingent consideration relates to an earn-out for B2E, acquired in December 2012, and future performance-based contingent payments for Hydro-Organics Wholesale, Inc., acquired in October 2015. The fair value of the estimated contingent consideration arrangement is determined based on the Company’s evaluation as to the probability and amount of any earn-out that will be achieved based on expected future performance by the acquired entity. This is presented as part of long-term liabilities in the Company's condensed consolidated balance sheets. The following table provides a summary of the changes in fair value of the Company's Level 3 financial instruments for the periods ended March 25, 2017 and March 26, 2016 (in thousands): Amount Balance September 24, 2016 $ 5,113 Estimated contingent performance-based consideration established at the time of acquisition — Changes in the fair value of contingent performance-based payments established at the time of acquisition 201 Performance-based payments made (894 ) Balance March 25, 2017 $ 4,420 Amount Balance September 26, 2015 $ 3,625 Estimated contingent performance-based consideration established at the time of acquisition 2,590 Changes in the fair value of contingent performance-based payments established at the time of acquisition — Balance March 26, 2016 $ 6,215 Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis The Company measures certain non-financial assets and liabilities, including long-lived assets, goodwill and intangible assets, at fair value on a non-recurring basis. Fair value measurements of non-financial assets and non-financial liabilities are used primarily in the impairment analyses of long-lived assets, goodwill and other intangible assets. During the periods ended March 25, 2017 and March 26, 2016 , the Company was not required to measure any significant non-financial assets and liabilities at fair value. Fair Value of Other Financial Instruments In November 2015, the Company issued $400 million aggregate principal amount of 6.125% senior notes due November 2023 (the “2023 Notes”). The estimated fair value of the Company’s 2023 Notes as of March 25, 2017 , March 26, 2016 and September 24, 2016 was $422.4 million , $416.1 million and $430.3 million , respectively, compared to a carrying value of $394.8 million , $394.0 million and $394.4 million , respectively. |
Acquisitions
Acquisitions | 6 Months Ended |
Mar. 25, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Segrest Inc. On October 24, 2016, the Company acquired Segrest, Inc., a wholesaler of aquarium fish, for a purchase price of approximately $60.0 million , of which $6.0 million is in an escrow account managed by an independent trustee and is payable contingent upon future events. The purchase price exceeded the estimated fair value of the net tangible assets acquired by approximately $47.7 million , which is included in other assets in the Company’s condensed consolidated balance sheet as of March 25, 2017 . The Company has not yet finalized the allocation of the purchase price to the fair value of the intangible assets acquired. This acquisition is expected to strengthen the Company's position in the aquatics category and provide the opportunity for synergies with the Company's existing aquatics business. Proforma financial information has not been presented as the Segrest acquisition was not considered material to the Company's overall consolidated financial statements during the periods presented. |
Inventories, net
Inventories, net | 6 Months Ended |
Mar. 25, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, net Inventories, net of allowance for obsolescence, consist of the following (in thousands): March 25, 2017 March 26, 2016 September 24, 2016 Raw materials $ 122,029 $ 113,779 $ 120,786 Work in progress 21,636 15,267 17,378 Finished goods 273,752 252,453 217,788 Supplies 8,968 9,255 6,052 Total inventories, net $ 426,385 $ 390,754 $ 362,004 |
Goodwill
Goodwill | 6 Months Ended |
Mar. 25, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The Company tests goodwill for impairment annually, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This assessment involves the use of significant accounting judgments and estimates as to future operating results and discount rates. Changes in estimates or use of different assumptions could produce significantly different results. An impairment loss is generally recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The Company uses discounted cash flow analysis to estimate the fair value of our reporting units. The Company’s goodwill impairment analysis also includes a comparison of the aggregate estimated fair value of its reporting units to the Company’s total market capitalization. |
Other Intangible Assets
Other Intangible Assets | 6 Months Ended |
Mar. 25, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other Intangible Assets The following table summarizes the components of gross and net acquired intangible assets: Gross Accumulated Amortization Accumulated Impairment Net Carrying Value (in millions) March 25, 2017 Marketing-related intangible assets – amortizable $ 14.9 $ (11.7 ) $ — $ 3.2 Marketing-related intangible assets – nonamortizable 62.7 — (26.0 ) 36.7 Total 77.6 (11.7 ) (26.0 ) 39.9 Customer-related intangible assets – amortizable 64.3 (28.0 ) — 36.3 Other acquired intangible assets – amortizable 20.8 (12.2 ) — 8.6 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 28.6 (12.2 ) (1.2 ) 15.2 Total other intangible assets $ 170.5 $ (51.9 ) $ (27.2 ) $ 91.4 Gross Accumulated Amortization Accumulated Impairment Net Carrying Value (in millions) March 26, 2016 Marketing-related intangible assets – amortizable $ 14.1 $ (10.8 ) $ — $ 3.3 Marketing-related intangible assets – nonamortizable 63.6 — (24.2 ) 39.4 Total 77.7 (10.8 ) (24.2 ) 42.7 Customer-related intangible assets – amortizable 48.3 (23.6 ) — 24.7 Other acquired intangible assets – amortizable 20.0 (11.0 ) — 9.0 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 27.8 (11.0 ) (1.2 ) 15.6 Total other intangible assets $ 153.8 $ (45.4 ) $ (25.4 ) $ 83.0 Gross Accumulated Amortization Accumulated Impairment Net Carrying Value (in millions) September 24, 2016 Marketing-related intangible assets – amortizable $ 14.9 $ (11.3 ) $ — $ 3.6 Marketing-related intangible assets – nonamortizable 63.0 — (26.0 ) 37.0 Total 77.9 (11.3 ) (26.0 ) 40.6 Customer-related intangible assets – amortizable 65.6 (26.1 ) — 39.5 Other acquired intangible assets – amortizable 20.8 (11.6 ) — 9.2 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 28.6 (11.6 ) (1.2 ) 15.8 Total other intangible assets $ 172.1 $ (49.0 ) $ (27.2 ) $ 95.9 Other acquired intangible assets include contract-based and technology-based intangible assets. The Company evaluates long-lived assets, including amortizable and indefinite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company evaluates indefinite-lived intangible assets on an annual basis. In the fourth quarter of fiscal 2016 , the Company recognized a non-cash $1.8 million impairment charge to certain indefinite-lived intangible assets as a result of increased competition in the marketplace and declining volume of sales. Other factors indicating the carrying value of the Company’s amortizable intangible assets may not be recoverable were not present in fiscal 2016 or during the six months ended March 25, 2017 , and accordingly, no impairment testing was performed on these assets. The Company amortizes its acquired intangible assets with definite lives over periods ranging from four years to 25 years; over weighted average remaining lives of six years for marketing-related intangibles, 11 years for customer-related intangibles and 13 years for other acquired intangibles. Amortization expense for intangibles subject to amortization was approximately $1.4 million and $1.2 million for the three months ended March 25, 2017 and March 26, 2016 , respectively, and $2.9 million and $2.2 million for the six months ended March 25, 2017 and March 26, 2016 , respectively, and is classified within operating expenses in the condensed consolidated statements of operations. Estimated annual amortization expense related to acquired intangible assets in each of the succeeding five years is estimated to be approximately $5 million per year from fiscal 2017 through fiscal 2021. . |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Mar. 25, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following: March 25, 2017 March 26, 2016 September 24, 2016 (in thousands) Senior notes, interest at 6.125%, payable semi-annually, principal due November 2023 $ 400,000 $ 400,000 $ 400,000 Unamortized debt issuance costs (5,237 ) (6,032 ) (5,635 ) Net carrying value 394,763 393,968 394,365 Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, final maturity December 2018 — 102,000 — Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 101,000 — Other notes payable 481 1,022 904 Total 496,244 496,990 395,269 Less current portion (374 ) (594 ) (463 ) Long-term portion $ 495,870 $ 496,396 $ 394,806 Senior Notes and Redemption of Senior Subordinated Notes On November 9, 2015, the Company issued $400 million aggregate principal amount of 6.125% senior notes due November 2023. In December 2015, the Company used the net proceeds from the offering, together with available cash, to redeem its $400 million aggregate principal amount of 8.25% senior subordinated notes due March 1, 2018 (2018 Notes) at a price of 102.063% of the principal amount and to pay fees and expenses related to the offering. The Company incurred approximately $6.3 million of debt issuance costs in conjunction with these transactions, which included underwriter fees and legal, accounting and rating agency expenses. The debt issuance costs are being amortized over the term of the 2023 Notes. As a result of the Company’s redemption of the 2018 Notes, the Company incurred a call premium payment of $8.3 million , overlapping interest expense for 30 days of approximately $2.7 million and a $3.3 million non-cash charge for the write off of unamortized deferred financing costs and discount related to the 2018 Notes. These amounts are included in interest expense in the condensed consolidated statements of operations for the quarter ended March 26, 2016 . The 2023 Notes require semiannual interest payments on May 15 and November 15. The 2023 Notes are unconditionally guaranteed on a senior basis by each of the Company’s existing and future domestic restricted subsidiaries which are borrowers under or guarantors of Central’s senior secured revolving credit facility. The 2023 Notes are unsecured senior obligations and are subordinated to all of the Company’s existing and future secured debt, including the Company’s Credit Facility, to the extent of the value of the collateral securing such indebtedness. The Company may redeem some or all of the 2023 Notes at any time, at its option, prior to November 15, 2018 at the principal amount plus a “make whole” premium. At any time prior to November 15, 2018, the Company may also redeem, at its option, up to 35% of the original aggregate principal amount of the notes with the proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount of the notes. The Company may redeem some or all of the 2023 Notes, at its option, at any time on or after November 15, 2018 for 104.594% , on or after November 15, 2019 for 103.063% , on or after November 15, 2020 for 101.531% and on or after November 15, 2021 for 100% , plus accrued and unpaid interest. The holders of the 2023 Notes have the right to require the Company to repurchase all or a portion of the 2023 Notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence of a change of control. The 2023 Notes contain customary high yield covenants, including covenants limiting debt incurrence and restricted payments, subject to certain baskets and exceptions. The Company was in compliance with all covenants as of March 25, 2017 . Asset-Based Loan Facility Amendment On April 22, 2016, the Company entered into an amended and restated credit agreement which provides up to a $400 million principal amount senior secured asset-based revolving credit facility, with up to an additional $200 million principal amount available with the consent of the Lenders if the Company exercises the accordion feature set forth therein (collectively, the “Amended Credit Facility”). The Amended Credit Facility matures on April 22, 2021. The Company may borrow, repay and reborrow amounts under the Amended Credit Facility until its maturity date, at which time all amounts outstanding under the Amended Credit Facility must be repaid in full. As of March 25, 2017 , there were borrowings of $101.0 million outstanding and no letters of credit outstanding under the Credit Facility. There were other letters of credit of $2.6 million outstanding as of March 25, 2017 . The Amended Credit Facility is subject to a borrowing base, calculated using a formula based upon eligible receivables and inventory, minus certain reserves and subject to restrictions. As of March 25, 2017 , the borrowing base and remaining borrowing availability was $238.9 million . Borrowings under the Amended Credit Facility bear interest at an index based on LIBOR or, at the option of the Company, the Base Rate (defined as the highest of (a) the SunTrust prime rate, (b) the Federal Funds Rate plus 0.5% and (c) one-month LIBOR plus 1.00% ), plus, in either case, an applicable margin based on the Company’s consolidated senior leverage ratio. Such applicable margin for LIBOR-based borrowings fluctuates between 1.25% - 1.50% and was 1.25% as of March 25, 2017 , and such applicable margin for Base Rate borrowings fluctuates between 0.25% - 0.5% and was 0.25% as of March 25, 2017 . As of March 25, 2017 , the applicable interest rate related to Base Rate borrowings was 4.0% , and the applicable interest rate related to LIBOR-based borrowings was 2.1% . The Company incurred approximately $1.2 million of debt issuance costs in conjunction with this transaction, which included underwriter fees, legal and accounting expenses. The debt issuance costs will be amortized over the term of the Amended Credit Facility. The Amended Credit Facility contains customary covenants, including financial covenants which require the Company to maintain a minimum fixed charge coverage ratio of 1.00 :1.00 upon reaching certain borrowing levels. The Amended Credit Facility is secured by substantially all assets of the Company. The Company was in compliance with all financial covenants under the Amended Credit Facility during the quarter ended March 25, 2017 . |
Supplemental Equity Information
Supplemental Equity Information | 6 Months Ended |
Mar. 25, 2017 | |
Equity [Abstract] | |
Supplemental Equity Information | Supplemental Equity Information The following table provides a summary of the changes in the carrying amounts of equity attributable to controlling interest and noncontrolling interest for the six months ended March 25, 2017 and March 26, 2016 Controlling Interest (in thousands) Common Stock Class A Common Stock Class B Stock Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income Total Noncontrolling Interest Total Balance September 24, 2016 $ 120 $ 374 $ 16 $ 393,297 $ 160,501 $ (1,294 ) $ 553,014 $ 1,573 $ 554,587 Comprehensive income 42,321 (364 ) 41,957 717 42,674 Amortization of share-based awards 4,222 4,222 4,222 Restricted share activity (1 ) (5,501 ) (5,502 ) (5,502 ) Issuance of common stock, including net share settlement of stock options 2 4 (13,619 ) (13,613 ) (13,613 ) Tax benefit on stock option exercise, net of tax deficiency 13,142 13,142 13,142 Distribution to Noncontrolling interest (1,019 ) (1,019 ) Balance March 25, 2017 $ 122 $ 377 $ 16 $ 391,541 $ 202,822 $ (1,658 ) $ 593,220 $ 1,271 $ 594,491 Controlling Interest (in thousands) Common Stock Class A Common Stock Class B Stock Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income Total Noncontrolling Interest Total Balance September 26, 2015 $ 119 $ 364 $ 16 $ 388,636 $ 115,987 $ 164 $ 505,286 $ 1,094 $ 506,380 Comprehensive income 24,095 (692 ) 23,403 717 24,120 Amortization of share-based awards 2,986 2,986 2,986 Restricted share activity 2 (580 ) (578 ) (578 ) Issuance of common stock, including net share settlement of stock options 2 (554 ) (552 ) (552 ) Tax benefit on stock option exercise, net of tax deficiency 1,177 1,177 1,177 Distribution to Noncontrolling interest (592 ) (592 ) Other 1 1 Balance March 26, 2016 $ 119 $ 368 $ 16 $ 391,665 $ 140,082 $ (528 ) $ 531,722 $ 1,220 $ 532,942 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Mar. 25, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company recognized share-based compensation expense of $5.3 million and $3.6 million for the six months ended March 25, 2017 and March 26, 2016 , respectively, as a component of selling, general and administrative expenses. The tax benefit associated with share-based compensation expense for the six months ended March 25, 2017 and March 26, 2016 was $1.9 million and $1.3 million , respectively. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 25, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following is a reconciliation of the numerators and denominators of the basic and diluted per share computations for income from continuing operations. Three Months Ended Six Months Ended March 25, 2017 March 25, 2017 Income Shares Per Share Income Shares Per Share Basic EPS: Net income available to common shareholders $ 34,684 50,079 $ 0.69 $ 42,321 49,872 $ 0.85 Effect of dilutive securities: Options to purchase common stock 1,156 (0.01 ) — 1,273 (0.02 ) Restricted shares 748 (0.01 ) — 766 (0.01 ) Diluted EPS: — Net income available to common shareholders $ 34,684 51,983 $ 0.67 $ 42,321 51,911 $ 0.82 Three Months Ended Six Months Ended March 26, 2016 March 26, 2016 Income Shares Per Share Income Shares Per Share Basic EPS: Net income available to common shareholders $ 32,697 48,717 $ 0.67 $ 24,095 48,641 $ 0.50 Effect of dilutive securities: Options to purchase common stock 976 (0.01 ) 1,166 (0.02 ) Restricted shares 752 (0.01 ) 751 — Diluted EPS: Net income available to common shareholders $ 32,697 50,445 $ 0.65 $ 24,095 50,558 $ 0.48 Options to purchase 3.1 million shares of common stock at prices ranging from $6.43 to $31.76 per share were outstanding at March 25, 2017 , and options to purchase 6.8 million shares of common stock at prices ranging from $6.43 to $15.56 per share were outstanding at March 26, 2016 . For the three months ended March 25, 2017 , all options outstanding were included in the computation of diluted earnings per share. For the three months ended March 26, 2016 , options to purchase 1.6 million shares of common stock were outstanding but were not included in the computation of diluted earnings per share, because the option exercise prices were greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive. For the six month periods ended March 25, 2017 and March 26, 2016 , respectively, options to purchase 0.2 million and 0.7 million shares of common stock, respectively, were outstanding but were not included in the computation of diluted earnings per share, because the option exercise prices were greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive. |
Segment Information
Segment Information | 6 Months Ended |
Mar. 25, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Management has determined that the Company has two operating segments, which are also reportable segments based on the level at which the Chief Operating Decision Maker reviews the results of operations to make decisions regarding performance assessment and resource allocation. These operating segments are Pet segment and Garden segment and are presented in the table below (in thousands). Three Months Ended Six Months Ended March 25, March 26, March 25, March 26, Net sales: Pet segment $ 298,393 $ 275,328 $ 602,439 $ 523,990 Garden segment 271,531 265,921 386,983 377,071 Total net sales $ 569,924 $ 541,249 $ 989,422 $ 901,061 Operating income: Pet segment 34,645 32,409 68,051 58,604 Garden segment 46,005 44,407 48,681 41,153 Corporate (16,790 ) (17,413 ) (32,934 ) (31,581 ) Total income from operations 63,860 59,403 83,798 68,176 Interest expense - net (6,822 ) (7,087 ) (13,657 ) (29,210 ) Other expense (965 ) (88 ) (1,932 ) (561 ) Income tax expense 20,824 18,793 25,171 13,593 Income including noncontrolling interest 35,249 33,435 43,038 24,812 Net income attributable to noncontrolling interest 565 738 717 717 Net income attributable to Central Garden & Pet Company $ 34,684 $ 32,697 $ 42,321 $ 24,095 Depreciation and amortization: Pet segment $ 6,174 4,956 $ 12,004 $ 9,420 Garden segment 1,528 1,359 3,035 3,044 Corporate 2,633 2,854 5,305 5,738 Total depreciation and amortization $ 10,335 $ 9,169 $ 20,344 $ 18,202 March 25, March 26, September 24, Assets: Pet segment $ 612,189 $ 538,901 $ 508,879 Garden segment 478,919 467,026 304,901 Corporate 307,820 317,172 398,413 Total assets $ 1,398,928 $ 1,323,099 $ 1,212,193 Goodwill (included in corporate assets above): Pet segment $ 224,912 $ 210,455 $ 225,912 Garden segment 5,473 3,298 5,473 Total goodwill $ 230,385 $ 213,753 $ 231,385 |
Consolidating Condensed Financi
Consolidating Condensed Financial Information of Guarantor Subsidiaries | 6 Months Ended |
Mar. 25, 2017 | |
Condensed Financial Information of Parent Company Only 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. Certain subsidiaries and operating divisions are not guarantors of the 2023 Notes. Those subsidiaries that are guarantors and co-obligors of the 2023 Notes are as follows: Farnam Companies, Inc. Four Paws Products Ltd. Gulfstream Home & Garden, Inc. Hydro-Organics Wholesale, Inc. IMS Trading, LLC IMS Southern, LLC Kaytee Products, Inc. Matson, LLC New England Pottery, LLC Pennington Seed, Inc. (including Gro Tec, Inc. 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 and Aquatica Tropicals, Inc.) T.F.H. Publications, Inc. Wellmark International (including B2E Corporation 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 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 190,791 $ 26,092 $ 378,673 $ (25,632 ) $ 569,924 Cost of goods sold and occupancy 145,593 20,128 244,680 (24,006 ) 386,395 Gross profit 45,198 5,964 133,993 (1,626 ) 183,529 Selling, general and administrative expenses 39,347 4,874 77,074 (1,626 ) 119,669 Operating income 5,851 1,090 56,919 — 63,860 Interest expense (6,759 ) (65 ) (6 ) — (6,830 ) Interest income 7 1 — — 8 Other income (expense) (737 ) (194 ) (34 ) — (965 ) Income (loss) before taxes and equity in earnings of affiliates (1,638 ) 832 56,879 — 56,073 Income tax expense (benefit) (718 ) 448 21,094 — 20,824 Equity in earnings of affiliates 35,604 — 384 (35,988 ) — Net income including noncontrolling interest 34,684 384 36,169 (35,988 ) 35,249 Net income attributable to noncontrolling interest — 565 — — 565 Net income (loss) attributable to Central Garden & Pet Company $ 34,684 $ (181 ) $ 36,169 $ (35,988 ) $ 34,684 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 156,790 $ 30,002 $ 381,748 $ (27,291 ) $ 541,249 Cost of goods sold and occupancy 121,969 23,099 252,419 (25,577 ) 371,910 Gross profit 34,821 6,903 129,329 (1,714 ) 169,339 Selling, general and administrative expenses 33,210 5,124 73,316 (1,714 ) 109,936 Operating income 1,611 1,779 56,013 — 59,403 Interest expense (6,653 ) (68 ) (375 ) — (7,096 ) Interest income 8 1 — — 9 Other income (expense) 657 (197 ) (548 ) — (88 ) Income (loss) before taxes and equity in earnings of affiliates (4,377 ) 1,515 55,090 — 52,228 Income tax expense (benefit) (775 ) 694 18,874 — 18,793 Equity in earnings of affiliates 36,299 — 585 (36,884 ) — Net income including noncontrolling interest 32,697 821 36,801 (36,884 ) 33,435 Net income attributable to noncontrolling interest — 738 — — 738 Net income attributable to Central Garden & Pet Company $ 32,697 $ 83 $ 36,801 $ (36,884 ) $ 32,697 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Six Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 346,309 $ 40,116 $ 645,111 $ (42,114 ) $ 989,422 Cost of goods sold and occupancy 266,729 31,806 426,120 (39,440 ) 685,215 Gross profit 79,580 8,310 218,991 (2,674 ) 304,207 Selling, general and administrative expenses 75,312 8,538 139,233 (2,674 ) 220,409 Operating income 4,268 (228 ) 79,758 — 83,798 Interest expense (13,610 ) (82 ) (11 ) — (13,703 ) Interest income 45 1 — — 46 Other expense (1,340 ) (387 ) (205 ) — (1,932 ) Income (loss) before taxes and equity in earnings of affiliates (10,637 ) (696 ) 79,542 — 68,209 Income tax expense (benefit) (3,910 ) 37 29,044 — 25,171 Equity in earnings (loss) of affiliates 49,048 — (427 ) (48,621 ) — Net income (loss) including noncontrolling interest 42,321 (733 ) 50,071 (48,621 ) 43,038 Net income attributable to noncontrolling interest — 717 — — 717 Net income (loss) attributable to Central Garden & Pet Company $ 42,321 $ (1,450 ) $ 50,071 $ (48,621 ) $ 42,321 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Six Months Ended March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 293,817 $ 45,272 $ 603,912 $ (41,940 ) $ 901,061 Cost of goods sold and occupancy 232,228 36,045 402,908 (39,245 ) 631,936 Gross profit 61,589 9,227 201,004 (2,695 ) 269,125 Selling, general and administrative expenses 66,164 8,903 128,577 (2,695 ) 200,949 Operating income (loss) (4,575 ) 324 72,427 — 68,176 Interest expense (29,161 ) (80 ) — — (29,241 ) Interest income 29 2 — — 31 Other expense (178 ) (263 ) (120 ) — (561 ) Income (loss) before taxes and equity in earnings of affiliates (33,885 ) (17 ) 72,307 — 38,405 Income tax expense (benefit) (11,920 ) 197 25,316 — 13,593 Equity in earnings (loss) of affiliates 46,060 — (177 ) (45,883 ) — Net income (loss) including noncontrolling interest 24,095 (214 ) 46,814 (45,883 ) 24,812 Net income attributable to noncontrolling interest — 717 — — 717 Net income (loss) attributable to Central Garden & Pet Company $ 24,095 $ (931 ) $ 46,814 $ (45,883 ) $ 24,095 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income $ 34,684 $ 384 $ 36,169 $ (35,988 ) $ 35,249 Other comprehensive income: Foreign currency translation 144 95 20 (115 ) 144 Total comprehensive income 34,828 479 36,189 (36,103 ) 35,393 Comprehensive income attributable to noncontrolling interests — 565 — — 565 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 34,828 $ (86 ) $ 36,189 $ (36,103 ) $ 34,828 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 32,697 $ 821 $ 36,801 $ (36,884 ) $ 33,435 Other comprehensive income (loss): Foreign currency translation (459 ) (398 ) 57 341 (459 ) Total comprehensive income 32,238 423 36,858 (36,543 ) 32,976 Comprehensive loss attributable to noncontrolling interests — 738 — — 738 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 32,238 $ (315 ) $ 36,858 $ (36,543 ) $ 32,238 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 42,321 $ (733 ) $ 50,071 $ (48,621 ) $ 43,038 Other comprehensive loss: Foreign currency translation (364 ) (260 ) (30 ) 290 (364 ) Total comprehensive income (loss) 41,957 (993 ) 50,041 (48,331 ) 42,674 Comprehensive income attributable to noncontrolling interests — 717 — — 717 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 41,957 $ (1,710 ) $ 50,041 $ (48,331 ) $ 41,957 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 24,095 $ (214 ) $ 46,814 $ (45,883 ) $ 24,812 Other comprehensive income (loss): Foreign currency translation (692 ) (540 ) 7 533 (692 ) Total comprehensive income (loss) 23,403 (754 ) 46,821 (45,350 ) 24,120 Comprehensive income attributable to noncontrolling interests — 717 — — 717 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 23,403 $ (1,471 ) $ 46,821 $ (45,350 ) $ 23,403 CONSOLIDATING CONDENSED BALANCE SHEET March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 492 $ 4,764 $ 913 $ — $ 6,169 Restricted cash 10,988 — — — 10,988 Accounts receivable, net 113,600 14,366 215,236 — 343,202 Inventories 138,493 16,901 270,991 — 426,385 Prepaid expenses and other 21,933 830 31,311 — 54,074 Total current assets 285,506 36,861 518,451 — 840,818 Land, buildings, improvements and equipment, net 38,932 4,045 132,963 — 175,940 Goodwill 15,058 — 215,327 — 230,385 Other long-term assets 26,472 3,364 127,924 (5,975 ) 151,785 Intercompany receivable 44,957 — 511,319 (556,276 ) — Investment in subsidiaries 1,287,126 — — (1,287,126 ) — Total $ 1,698,051 $ 44,270 $ 1,505,984 $ (1,849,377 ) $ 1,398,928 LIABILITIES AND EQUITY Accounts payable $ 51,357 $ 11,199 $ 79,235 $ — $ 141,791 Accrued expenses 53,301 2,131 45,989 — 101,421 Current portion of long-term debt — — 374 — 374 Total current liabilities 104,658 13,330 125,598 — 243,586 Long-term debt 495,762 — 108 — 495,870 Intercompany payable 501,993 54,283 (556,276 ) — Losses in excess of investment in subsidiaries — — 20,629 (20,629 ) — Other long-term obligations 2,418 — 68,538 (5,975 ) 64,981 Total Central Garden & Pet shareholders’ equity (deficit) 593,220 (24,614 ) 1,291,111 (1,266,497 ) 593,220 Noncontrolling interest — 1,271 — — 1,271 Total equity (deficit) 593,220 (23,343 ) 1,291,111 (1,266,497 ) 594,491 Total $ 1,698,051 $ 44,270 $ 1,505,984 $ (1,849,377 ) $ 1,398,928 CONSOLIDATING CONDENSED BALANCE SHEET March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 1,820 $ 5,083 $ 2,923 $ — $ 9,826 Restricted cash 11,946 — — — 11,946 Accounts receivable, net 100,346 15,446 224,734 — 340,526 Inventories 115,644 17,043 258,067 — 390,754 Prepaid expenses and other 23,003 797 26,958 — 50,758 Total current assets 252,759 38,369 512,682 — 803,810 Land, buildings, improvements and equipment, net 47,310 3,829 113,655 — 164,794 Goodwill — — 213,753 — 213,753 Other long-term assets 54,088 3,417 84,777 (1,540 ) 140,742 Intercompany receivable 41,922 — 367,931 (409,853 ) — Investment in subsidiaries 1,098,281 — — (1,098,281 ) — Total $ 1,494,360 $ 45,615 $ 1,292,798 $ (1,509,674 ) $ 1,323,099 LIABILITIES AND EQUITY Accounts payable $ 48,693 $ 10,546 $ 73,972 $ — $ 133,211 Accrued expenses 52,837 2,029 42,816 — 97,682 Current portion of long-term debt 219 — 375 — 594 Total current liabilities 101,749 12,575 117,163 — 231,487 Long-term debt 496,001 — 395 — 496,396 Intercompany payable 359,472 50,381 — (409,853 ) — Losses in excess of investment in subsidiaries — — 16,928 (16,928 ) — Other long-term obligations 5,416 — 58,398 (1,540 ) 62,274 Total Central Garden & Pet shareholders’ equity (deficit) 531,722 (18,561 ) 1,099,914 (1,081,353 ) 531,722 Noncontrolling interest — 1,220 — — 1,220 Total equity (deficit) 531,722 (17,341 ) 1,099,914 (1,081,353 ) 532,942 Total $ 1,494,360 $ 45,615 $ 1,292,798 $ (1,509,674 ) $ 1,323,099 CONSOLIDATING CONDENSED BALANCE SHEET September 24, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 82,158 $ 9,695 $ 1,129 $ — $ 92,982 Restricted cash 10,910 — — — 10,910 Accounts receivable, net 59,617 5,156 136,378 — 201,151 Inventories 113,317 11,752 236,935 — 362,004 Prepaid expenses and other assets 20,978 817 25,964 — 47,759 Total current assets 286,980 27,420 400,406 — 714,806 Land, buildings, improvements and equipment, net 41,083 3,897 113,244 — 158,224 Goodwill 15,058 — 216,327 — 231,385 Other long-term assets 30,555 2,980 85,701 (11,458 ) 107,778 Intercompany receivable 32,778 — 567,374 (600,152 ) — Investment in subsidiaries 1,176,990 — — (1,176,990 ) — Total $ 1,583,444 $ 34,297 $ 1,383,052 $ (1,788,600 ) $ 1,212,193 LIABILITIES AND EQUITY Accounts payable $ 34,096 $ 3,953 $ 64,364 $ — $ 102,413 Accrued expenses and other liabilities 47,862 1,410 50,071 — 99,343 Current portion of long term debt 88 — 375 — 463 Total current liabilities 82,046 5,363 114,810 — 202,219 Long-term debt 394,364 — 442 — 394,806 Intercompany payable 553,964 46,188 — (600,152 ) — Losses in excess of investment in subsidiaries — — 16,126 (16,126 ) — Other long-term obligations 56 — 71,983 (11,458 ) 60,581 Total Central Garden & Pet shareholders’ equity (deficit) 553,014 (18,827 ) 1,179,691 (1,160,864 ) 553,014 Noncontrolling interest — 1,573 — — 1,573 Total equity (deficit) 553,014 (17,254 ) 1,179,691 (1,160,864 ) 554,587 Total $ 1,583,444 $ 34,297 $ 1,383,052 $ (1,788,600 ) $ 1,212,193 CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Six Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash used by operating activities $ (43,383 ) $ (7,352 ) $ (41,431 ) $ (4,076 ) $ (96,242 ) Additions to property, plant and equipment (4,357 ) (413 ) (22,024 ) — (26,794 ) Payments to acquire companies, net of cash acquired (60,042 ) — — — (60,042 ) Proceeds from sale of business, facility and other assets 2 — 8,266 — 8,268 Change in restricted cash and cash equivalents (78 ) — — — (78 ) Investment in equity method investee (2,000 ) — — (2,000 ) Other investing activities (1,395 ) — — — (1,395 ) Intercompany investing activities (14,089 ) — 50,108 (36,019 ) — Net cash provided (used) by investing activities (81,959 ) (413 ) 36,350 (36,019 ) (82,041 ) Repayments on revolving line of credit (115,000 ) — — — (115,000 ) Borrowings on revolving line of credit 216,000 — — — 216,000 Repayments of long-term debt (88 ) — (361 ) — (449 ) Excess tax benefits from stock-based awards 13,166 — — — 13,166 Repurchase of common stock (20,172 ) — — — (20,172 ) Distribution to parent — (4,076 ) — 4,076 — Distribution to noncontrolling interest — (1,019 ) — — (1,019 ) Payment of contingent consideration — — (894 ) — (894 ) Intercompany financing activities (49,895 ) 7,830 6,046 36,019 — Net cash provided by financing activities 44,011 2,735 4,791 40,095 91,632 Effect of exchange rates on cash (335 ) 99 74 — (162 ) Net decrease in cash and cash equivalents (81,666 ) (4,931 ) (216 ) — (86,813 ) Cash and cash equivalents at beginning of period 82,158 9,695 1,129 — 92,982 Cash and cash equivalents at end of period $ 492 $ 4,764 $ 913 $ — $ 6,169 CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Six Months Ended March 26, 2016 (in thousands) Parent Non-Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash used by operating activities $ (12,121 ) $ (6,240 ) $ (27,598 ) $ (4,884 ) $ (50,843 ) Additions to property, plant and equipment (2,394 ) (412 ) (9,989 ) — (12,795 ) Payments to acquire companies, net of cash acquired (60,916 ) — (7,985 ) — (68,901 ) Change in restricted cash and cash equivalents 1,211 — — — 1,211 Other investing activities (500 ) — — — (500 ) Intercompany investing activities (9,227 ) — 47,070 (37,843 ) — Net cash provided (used) by investing activities (71,826 ) (412 ) 29,096 (37,843 ) (80,985 ) Repayments of long-term debt (400,130 ) — (15 ) — (400,145 ) Borrowings under revolving line of credit 280,000 — — — 280,000 Repayments on revolving line of credit (178,000 ) — — — (178,000 ) Issuance of long-term debt 400,000 400,000 Excess tax benefits from stock-based awards 1,181 — — — 1,181 Repurchase of common stock (1,722 ) — — — (1,722 ) Distribution to parent — (4,884 ) — 4,884 — Distribution to noncontrolling interest — (592 ) — — (592 ) Payment of financing costs (6,362 ) (6,362 ) Intercompany financing activities (44,782 ) 6,939 — 37,843 — Net cash provided (used) by financing activities 50,185 1,463 (15 ) 42,727 94,360 Effect of exchange rates on cash (698 ) 250 158 — (290 ) Net increase (decrease) in cash and cash equivalents (34,460 ) (4,939 ) 1,641 — (37,758 ) Cash and cash equivalents at beginning of year 36,280 10,022 1,282 — 47,584 Cash and cash equivalents at end of year $ 1,820 $ 5,083 $ 2,923 $ — $ 9,826 |
Contingencies
Contingencies | 6 Months Ended |
Mar. 25, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company may from time to time become involved in legal proceedings in the ordinary course of business. Currently, the Company is not a party to any legal proceedings that management believes would have a material effect on the Company’s financial position or results of operations. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Mar. 25, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event K&H Manufacturing On April 28, 2017 , the Company purchased K&H Manufacturing, a producer of premium pet supplies and the largest marketer of heated pet products in the country. K&H sells branded pet products under the K&H and K&H Pet brands. The acquisition is expected to complement the Company's existing dog and cat business. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Mar. 25, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest in the Company’s condensed consolidated financial statements represents the 20% interest not owned by Central in a consolidated subsidiary. Since the Company controls this subsidiary, its financial statements are consolidated with those of the Company, and the noncontrolling owner’s 20% share of the subsidiary’s net assets and results of operations is deducted and reported as noncontrolling interest on the consolidated balance sheets and as net income (loss) attributable to noncontrolling interest in the consolidated statements of operations. See Note 8, Supplemental Equity Information, for additional information. |
Restricted Cash | Restricted Cash Restricted cash includes cash and highly liquid instruments that are used as collateral for stand-alone letter of credit agreements related to normal business transactions. These agreements require the Company to maintain specified amounts of cash as collateral in segregated accounts to support the letters of credit issued thereunder, which will affect the amount of cash the Company has available for other uses. The amount of cash collateral in these segregated accounts was approximately $11.0 million , $11.9 million and $10.9 million as of March 25, 2017 , March 26, 2016 and September 24, 2016 , respectively, and is reflected in Restricted cash on the condensed consolidated balance sheets. |
Derivative Instruments | Derivative Instruments The Company principally uses a combination of purchase orders and various short and long-term supply arrangements in connection with the purchase of raw materials, including certain commodities. The Company may also enter into commodity futures, options and swap contracts to reduce the volatility of price fluctuations of corn, which impacts the cost of raw materials. The Company’s primary objective when entering into these derivative contracts is to achieve greater certainty with regard to the future price of commodities purchased for use in its supply chain. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. The Company does not perform the assessments required to achieve hedge accounting for commodity derivative positions. Accordingly, the changes in the values of these derivatives are recorded currently in other income (expense) in its condensed consolidated statements of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted Consolidation In February 2015, the FASB issued ASU 2015-02 (ASU 2015-02), Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation . ASU 2015-02 modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership and affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. ASU 2015-02 became effective during the Company’s first quarter of fiscal 2017, and the adoption of the standard had no impact on the Company's condensed consolidated financial statements. Stock Based Compensation In June 2014, the FASB issued ASU No. 2014-12 (ASU 2014-12), Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 became effective during the Company’s first quarter of fiscal 2017, and the adoption of the standard had no impact on the Company's condensed consolidated financial statements. Accounting Standards Not Yet Adopted Revenue Recognition In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers . This update was issued as Accounting Standards Codification Topic 606. The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On July 9, 2015, the FASB deferred the effective date of ASU 2014-09 for one year. ASU 2014-09 is now effective for the Company beginning in the first quarter of its fiscal year ending September 28, 2019. In March 2016, the FASB issued ASU 2016-08 (ASU 2016-08), Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10 (ASU 2016-10), Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . ASU 2016-10 clarifies the implementation guidance on identifying performance obligations. These ASUs apply to all companies that enter into contracts with customers to transfer goods or services. In May 2016, the FASB issued ASU No. 2016-12 (ASU 2016-12), Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients . ASU 2016-12 is intended to clarify two aspects of Topic 606: first, assessing the collectability criterion, options for the presentation of sales and similar taxes, noncash consideration, transition contract modifications, transition contract completion and secondly, technical corrections. Early adoption is permitted, but not before interim and annual reporting periods beginning after December 15, 2016. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02 (ASU 2016-02), Leases (Topic 842) . ASU 2016-02 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. ASU 2016-02 is effective for the Company in our first quarter of fiscal 2020 on a modified retrospective basis and earlier adoption is permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2016-02 on its consolidated financial statements, and it currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon the adoption of ASU 2016-02 . Stock Compensation In March 2016, the FASB issued ASU 2016-09 (ASU 2016-09), Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 simplifies the accounting for share-based payment award transactions including: income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, or the Company's first quarter of fiscal 2018. Early adoption is permitted. The Company is currently evaluating the requirements of ASU 2016-09 and has not yet determined the impact on its consolidated financial statements. Inventory Measurement In July 2015, the FASB issued ASU 2015-11 (ASU 2015-11), Simplifying the Measurement of Inventory . Under ASU 2015-11, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The standard defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016, or the Company’s first quarter of fiscal 2018. Early application is permitted and should be applied prospectively. The Company is currently evaluating the impact the adoption of ASU 2015-11 will have on its consolidated financial statements. Balance Sheet Classification of Deferred Taxes . In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes . This ASU eliminates the current requirement for entities to present deferred tax liabilities and assets as current and noncurrent in a classified statement of financial position and instead requires that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, or the Company's first quarter of fiscal 2018, and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact the adoption of ASU 2015-17 will have on its consolidated financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15) . The ASU provides additional clarification guidance on the classification of certain cash receipts and payments in the statement of cash flows. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, or the Company's first quarter of fiscal 2019, with early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2016-15 will have on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-18) . This ASU clarifies the presentation of restricted cash on the statement of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending cash balances on the statement of cash flows. ASU 2016-18 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017, or the Company's first quarter of fiscal 2019, with early adoption permitted. The Company does not expect that ASU 2016-18 will have a material impact on its condensed consolidated financial statements and related disclosures. Business Combinations In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (ASU 2017-01), which requires an evaluation of whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. The Company is required to apply this guidance to annual periods beginning after December 15, 2017, including interim periods within those periods, or the Company's first quarter of fiscal 2019. The Company is currently evaluating the impact the adoption of ASU 2017-01 will have on its consolidated financial statements. Goodwill In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment . The new guidance simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance will be effective for annual periods or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or the Company's first quarter of fiscal 2021. The amendment should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this amendment is not expected to have a material impact on the Company's consolidated financial statements. |
Fair Value Measurements | ASC 820 establishes a single authoritative definition of fair value, a framework for measuring fair value and expands disclosure of fair value measurements. ASC 820 requires financial assets and liabilities to be categorized based on the inputs used to calculate their fair values as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability, which reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). The Company’s financial instruments include cash and equivalents, short term investments consisting of bank certificates of deposit, accounts receivable and payable, derivative instruments, short-term borrowings, and accrued liabilities. The carrying amount of these instruments approximates fair value because of their short-term nature. |
Goodwill | The Company tests goodwill for impairment annually, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This assessment involves the use of significant accounting judgments and estimates as to future operating results and discount rates. Changes in estimates or use of different assumptions could produce significantly different results. An impairment loss is generally recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The Company uses discounted cash flow analysis to estimate the fair value of our reporting units. The Company’s goodwill impairment analysis also includes a comparison of the aggregate estimated fair value of its reporting units to the Company’s total market capitalization. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 25, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 25, 2017 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 4,420 $ 4,420 Total liabilities $ 0 $ 0 $ 4,420 $ 4,420 The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 26, 2016 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 6,215 $ 6,215 Total liabilities $ 0 $ 0 $ 6,215 $ 6,215 The following table presents our financial assets and liabilities at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of September 24, 2016 : Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 5,113 $ 5,113 Total liabilities $ 0 $ 0 $ 5,113 $ 5,113 (a) The liability for contingent consideration relates to an earn-out for B2E, acquired in December 2012, and future performance-based contingent payments for Hydro-Organics Wholesale, Inc., acquired in October 2015. The fair value of the estimated contingent consideration arrangement is determined based on the Company’s evaluation as to the probability and amount of any earn-out that will be achieved based on expected future performance by the acquired entity. This is presented as part of long-term liabilities in the Company's condensed consolidated balance sheets. |
Summary of Changes in Fair Value of Level 3 Financial Instruments | The following table provides a summary of the changes in fair value of the Company's Level 3 financial instruments for the periods ended March 25, 2017 and March 26, 2016 (in thousands): Amount Balance September 24, 2016 $ 5,113 Estimated contingent performance-based consideration established at the time of acquisition — Changes in the fair value of contingent performance-based payments established at the time of acquisition 201 Performance-based payments made (894 ) Balance March 25, 2017 $ 4,420 Amount Balance September 26, 2015 $ 3,625 Estimated contingent performance-based consideration established at the time of acquisition 2,590 Changes in the fair value of contingent performance-based payments established at the time of acquisition — Balance March 26, 2016 $ 6,215 |
Inventories, net (Tables)
Inventories, net (Tables) | 6 Months Ended |
Mar. 25, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories, Net of Allowance for Obsolescence | Inventories, net of allowance for obsolescence, consist of the following (in thousands): March 25, 2017 March 26, 2016 September 24, 2016 Raw materials $ 122,029 $ 113,779 $ 120,786 Work in progress 21,636 15,267 17,378 Finished goods 273,752 252,453 217,788 Supplies 8,968 9,255 6,052 Total inventories, net $ 426,385 $ 390,754 $ 362,004 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 6 Months Ended |
Mar. 25, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Gross and Net Acquired Intangible Assets | The following table summarizes the components of gross and net acquired intangible assets: Gross Accumulated Amortization Accumulated Impairment Net Carrying Value (in millions) March 25, 2017 Marketing-related intangible assets – amortizable $ 14.9 $ (11.7 ) $ — $ 3.2 Marketing-related intangible assets – nonamortizable 62.7 — (26.0 ) 36.7 Total 77.6 (11.7 ) (26.0 ) 39.9 Customer-related intangible assets – amortizable 64.3 (28.0 ) — 36.3 Other acquired intangible assets – amortizable 20.8 (12.2 ) — 8.6 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 28.6 (12.2 ) (1.2 ) 15.2 Total other intangible assets $ 170.5 $ (51.9 ) $ (27.2 ) $ 91.4 Gross Accumulated Amortization Accumulated Impairment Net Carrying Value (in millions) March 26, 2016 Marketing-related intangible assets – amortizable $ 14.1 $ (10.8 ) $ — $ 3.3 Marketing-related intangible assets – nonamortizable 63.6 — (24.2 ) 39.4 Total 77.7 (10.8 ) (24.2 ) 42.7 Customer-related intangible assets – amortizable 48.3 (23.6 ) — 24.7 Other acquired intangible assets – amortizable 20.0 (11.0 ) — 9.0 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 27.8 (11.0 ) (1.2 ) 15.6 Total other intangible assets $ 153.8 $ (45.4 ) $ (25.4 ) $ 83.0 Gross Accumulated Amortization Accumulated Impairment Net Carrying Value (in millions) September 24, 2016 Marketing-related intangible assets – amortizable $ 14.9 $ (11.3 ) $ — $ 3.6 Marketing-related intangible assets – nonamortizable 63.0 — (26.0 ) 37.0 Total 77.9 (11.3 ) (26.0 ) 40.6 Customer-related intangible assets – amortizable 65.6 (26.1 ) — 39.5 Other acquired intangible assets – amortizable 20.8 (11.6 ) — 9.2 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 28.6 (11.6 ) (1.2 ) 15.8 Total other intangible assets $ 172.1 $ (49.0 ) $ (27.2 ) $ 95.9 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Mar. 25, 2017 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | Long-term debt consists of the following: March 25, 2017 March 26, 2016 September 24, 2016 (in thousands) Senior notes, interest at 6.125%, payable semi-annually, principal due November 2023 $ 400,000 $ 400,000 $ 400,000 Unamortized debt issuance costs (5,237 ) (6,032 ) (5,635 ) Net carrying value 394,763 393,968 394,365 Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, final maturity December 2018 — 102,000 — Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 101,000 — Other notes payable 481 1,022 904 Total 496,244 496,990 395,269 Less current portion (374 ) (594 ) (463 ) Long-term portion $ 495,870 $ 496,396 $ 394,806 |
Supplemental Equity Informati26
Supplemental Equity Information (Tables) | 6 Months Ended |
Mar. 25, 2017 | |
Equity [Abstract] | |
Summary of Changes in Carrying Amounts of Equity Attributable to Controlling Interest and Noncontrolling Interest | The following table provides a summary of the changes in the carrying amounts of equity attributable to controlling interest and noncontrolling interest for the six months ended March 25, 2017 and March 26, 2016 Controlling Interest (in thousands) Common Stock Class A Common Stock Class B Stock Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income Total Noncontrolling Interest Total Balance September 24, 2016 $ 120 $ 374 $ 16 $ 393,297 $ 160,501 $ (1,294 ) $ 553,014 $ 1,573 $ 554,587 Comprehensive income 42,321 (364 ) 41,957 717 42,674 Amortization of share-based awards 4,222 4,222 4,222 Restricted share activity (1 ) (5,501 ) (5,502 ) (5,502 ) Issuance of common stock, including net share settlement of stock options 2 4 (13,619 ) (13,613 ) (13,613 ) Tax benefit on stock option exercise, net of tax deficiency 13,142 13,142 13,142 Distribution to Noncontrolling interest (1,019 ) (1,019 ) Balance March 25, 2017 $ 122 $ 377 $ 16 $ 391,541 $ 202,822 $ (1,658 ) $ 593,220 $ 1,271 $ 594,491 Controlling Interest (in thousands) Common Stock Class A Common Stock Class B Stock Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income Total Noncontrolling Interest Total Balance September 26, 2015 $ 119 $ 364 $ 16 $ 388,636 $ 115,987 $ 164 $ 505,286 $ 1,094 $ 506,380 Comprehensive income 24,095 (692 ) 23,403 717 24,120 Amortization of share-based awards 2,986 2,986 2,986 Restricted share activity 2 (580 ) (578 ) (578 ) Issuance of common stock, including net share settlement of stock options 2 (554 ) (552 ) (552 ) Tax benefit on stock option exercise, net of tax deficiency 1,177 1,177 1,177 Distribution to Noncontrolling interest (592 ) (592 ) Other 1 1 Balance March 26, 2016 $ 119 $ 368 $ 16 $ 391,665 $ 140,082 $ (528 ) $ 531,722 $ 1,220 $ 532,942 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 25, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of the numerators and denominators of the basic and diluted per share computations for income from continuing operations. Three Months Ended Six Months Ended March 25, 2017 March 25, 2017 Income Shares Per Share Income Shares Per Share Basic EPS: Net income available to common shareholders $ 34,684 50,079 $ 0.69 $ 42,321 49,872 $ 0.85 Effect of dilutive securities: Options to purchase common stock 1,156 (0.01 ) — 1,273 (0.02 ) Restricted shares 748 (0.01 ) — 766 (0.01 ) Diluted EPS: — Net income available to common shareholders $ 34,684 51,983 $ 0.67 $ 42,321 51,911 $ 0.82 Three Months Ended Six Months Ended March 26, 2016 March 26, 2016 Income Shares Per Share Income Shares Per Share Basic EPS: Net income available to common shareholders $ 32,697 48,717 $ 0.67 $ 24,095 48,641 $ 0.50 Effect of dilutive securities: Options to purchase common stock 976 (0.01 ) 1,166 (0.02 ) Restricted shares 752 (0.01 ) 751 — Diluted EPS: Net income available to common shareholders $ 32,697 50,445 $ 0.65 $ 24,095 50,558 $ 0.48 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Mar. 25, 2017 | |
Segment Reporting [Abstract] | |
Financial Information Relating to Company's Business Segments | These operating segments are Pet segment and Garden segment and are presented in the table below (in thousands). Three Months Ended Six Months Ended March 25, March 26, March 25, March 26, Net sales: Pet segment $ 298,393 $ 275,328 $ 602,439 $ 523,990 Garden segment 271,531 265,921 386,983 377,071 Total net sales $ 569,924 $ 541,249 $ 989,422 $ 901,061 Operating income: Pet segment 34,645 32,409 68,051 58,604 Garden segment 46,005 44,407 48,681 41,153 Corporate (16,790 ) (17,413 ) (32,934 ) (31,581 ) Total income from operations 63,860 59,403 83,798 68,176 Interest expense - net (6,822 ) (7,087 ) (13,657 ) (29,210 ) Other expense (965 ) (88 ) (1,932 ) (561 ) Income tax expense 20,824 18,793 25,171 13,593 Income including noncontrolling interest 35,249 33,435 43,038 24,812 Net income attributable to noncontrolling interest 565 738 717 717 Net income attributable to Central Garden & Pet Company $ 34,684 $ 32,697 $ 42,321 $ 24,095 Depreciation and amortization: Pet segment $ 6,174 4,956 $ 12,004 $ 9,420 Garden segment 1,528 1,359 3,035 3,044 Corporate 2,633 2,854 5,305 5,738 Total depreciation and amortization $ 10,335 $ 9,169 $ 20,344 $ 18,202 March 25, March 26, September 24, Assets: Pet segment $ 612,189 $ 538,901 $ 508,879 Garden segment 478,919 467,026 304,901 Corporate 307,820 317,172 398,413 Total assets $ 1,398,928 $ 1,323,099 $ 1,212,193 Goodwill (included in corporate assets above): Pet segment $ 224,912 $ 210,455 $ 225,912 Garden segment 5,473 3,298 5,473 Total goodwill $ 230,385 $ 213,753 $ 231,385 |
Consolidating Condensed Finan29
Consolidating Condensed Financial Information of Guarantor Subsidiaries (Tables) | 6 Months Ended |
Mar. 25, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Consolidating Condensed Statement of Operations | CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 190,791 $ 26,092 $ 378,673 $ (25,632 ) $ 569,924 Cost of goods sold and occupancy 145,593 20,128 244,680 (24,006 ) 386,395 Gross profit 45,198 5,964 133,993 (1,626 ) 183,529 Selling, general and administrative expenses 39,347 4,874 77,074 (1,626 ) 119,669 Operating income 5,851 1,090 56,919 — 63,860 Interest expense (6,759 ) (65 ) (6 ) — (6,830 ) Interest income 7 1 — — 8 Other income (expense) (737 ) (194 ) (34 ) — (965 ) Income (loss) before taxes and equity in earnings of affiliates (1,638 ) 832 56,879 — 56,073 Income tax expense (benefit) (718 ) 448 21,094 — 20,824 Equity in earnings of affiliates 35,604 — 384 (35,988 ) — Net income including noncontrolling interest 34,684 384 36,169 (35,988 ) 35,249 Net income attributable to noncontrolling interest — 565 — — 565 Net income (loss) attributable to Central Garden & Pet Company $ 34,684 $ (181 ) $ 36,169 $ (35,988 ) $ 34,684 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 156,790 $ 30,002 $ 381,748 $ (27,291 ) $ 541,249 Cost of goods sold and occupancy 121,969 23,099 252,419 (25,577 ) 371,910 Gross profit 34,821 6,903 129,329 (1,714 ) 169,339 Selling, general and administrative expenses 33,210 5,124 73,316 (1,714 ) 109,936 Operating income 1,611 1,779 56,013 — 59,403 Interest expense (6,653 ) (68 ) (375 ) — (7,096 ) Interest income 8 1 — — 9 Other income (expense) 657 (197 ) (548 ) — (88 ) Income (loss) before taxes and equity in earnings of affiliates (4,377 ) 1,515 55,090 — 52,228 Income tax expense (benefit) (775 ) 694 18,874 — 18,793 Equity in earnings of affiliates 36,299 — 585 (36,884 ) — Net income including noncontrolling interest 32,697 821 36,801 (36,884 ) 33,435 Net income attributable to noncontrolling interest — 738 — — 738 Net income attributable to Central Garden & Pet Company $ 32,697 $ 83 $ 36,801 $ (36,884 ) $ 32,697 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Six Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 346,309 $ 40,116 $ 645,111 $ (42,114 ) $ 989,422 Cost of goods sold and occupancy 266,729 31,806 426,120 (39,440 ) 685,215 Gross profit 79,580 8,310 218,991 (2,674 ) 304,207 Selling, general and administrative expenses 75,312 8,538 139,233 (2,674 ) 220,409 Operating income 4,268 (228 ) 79,758 — 83,798 Interest expense (13,610 ) (82 ) (11 ) — (13,703 ) Interest income 45 1 — — 46 Other expense (1,340 ) (387 ) (205 ) — (1,932 ) Income (loss) before taxes and equity in earnings of affiliates (10,637 ) (696 ) 79,542 — 68,209 Income tax expense (benefit) (3,910 ) 37 29,044 — 25,171 Equity in earnings (loss) of affiliates 49,048 — (427 ) (48,621 ) — Net income (loss) including noncontrolling interest 42,321 (733 ) 50,071 (48,621 ) 43,038 Net income attributable to noncontrolling interest — 717 — — 717 Net income (loss) attributable to Central Garden & Pet Company $ 42,321 $ (1,450 ) $ 50,071 $ (48,621 ) $ 42,321 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Six Months Ended March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 293,817 $ 45,272 $ 603,912 $ (41,940 ) $ 901,061 Cost of goods sold and occupancy 232,228 36,045 402,908 (39,245 ) 631,936 Gross profit 61,589 9,227 201,004 (2,695 ) 269,125 Selling, general and administrative expenses 66,164 8,903 128,577 (2,695 ) 200,949 Operating income (loss) (4,575 ) 324 72,427 — 68,176 Interest expense (29,161 ) (80 ) — — (29,241 ) Interest income 29 2 — — 31 Other expense (178 ) (263 ) (120 ) — (561 ) Income (loss) before taxes and equity in earnings of affiliates (33,885 ) (17 ) 72,307 — 38,405 Income tax expense (benefit) (11,920 ) 197 25,316 — 13,593 Equity in earnings (loss) of affiliates 46,060 — (177 ) (45,883 ) — Net income (loss) including noncontrolling interest 24,095 (214 ) 46,814 (45,883 ) 24,812 Net income attributable to noncontrolling interest — 717 — — 717 Net income (loss) attributable to Central Garden & Pet Company $ 24,095 $ (931 ) $ 46,814 $ (45,883 ) $ 24,095 |
Consolidating Condensed Statements of Comprehensive Income (Loss) | CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income $ 34,684 $ 384 $ 36,169 $ (35,988 ) $ 35,249 Other comprehensive income: Foreign currency translation 144 95 20 (115 ) 144 Total comprehensive income 34,828 479 36,189 (36,103 ) 35,393 Comprehensive income attributable to noncontrolling interests — 565 — — 565 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 34,828 $ (86 ) $ 36,189 $ (36,103 ) $ 34,828 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 32,697 $ 821 $ 36,801 $ (36,884 ) $ 33,435 Other comprehensive income (loss): Foreign currency translation (459 ) (398 ) 57 341 (459 ) Total comprehensive income 32,238 423 36,858 (36,543 ) 32,976 Comprehensive loss attributable to noncontrolling interests — 738 — — 738 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 32,238 $ (315 ) $ 36,858 $ (36,543 ) $ 32,238 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 42,321 $ (733 ) $ 50,071 $ (48,621 ) $ 43,038 Other comprehensive loss: Foreign currency translation (364 ) (260 ) (30 ) 290 (364 ) Total comprehensive income (loss) 41,957 (993 ) 50,041 (48,331 ) 42,674 Comprehensive income attributable to noncontrolling interests — 717 — — 717 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 41,957 $ (1,710 ) $ 50,041 $ (48,331 ) $ 41,957 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 24,095 $ (214 ) $ 46,814 $ (45,883 ) $ 24,812 Other comprehensive income (loss): Foreign currency translation (692 ) (540 ) 7 533 (692 ) Total comprehensive income (loss) 23,403 (754 ) 46,821 (45,350 ) 24,120 Comprehensive income attributable to noncontrolling interests — 717 — — 717 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 23,403 $ (1,471 ) $ 46,821 $ (45,350 ) $ 23,403 |
Consolidating Condensed Balance Sheet | CONSOLIDATING CONDENSED BALANCE SHEET March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 492 $ 4,764 $ 913 $ — $ 6,169 Restricted cash 10,988 — — — 10,988 Accounts receivable, net 113,600 14,366 215,236 — 343,202 Inventories 138,493 16,901 270,991 — 426,385 Prepaid expenses and other 21,933 830 31,311 — 54,074 Total current assets 285,506 36,861 518,451 — 840,818 Land, buildings, improvements and equipment, net 38,932 4,045 132,963 — 175,940 Goodwill 15,058 — 215,327 — 230,385 Other long-term assets 26,472 3,364 127,924 (5,975 ) 151,785 Intercompany receivable 44,957 — 511,319 (556,276 ) — Investment in subsidiaries 1,287,126 — — (1,287,126 ) — Total $ 1,698,051 $ 44,270 $ 1,505,984 $ (1,849,377 ) $ 1,398,928 LIABILITIES AND EQUITY Accounts payable $ 51,357 $ 11,199 $ 79,235 $ — $ 141,791 Accrued expenses 53,301 2,131 45,989 — 101,421 Current portion of long-term debt — — 374 — 374 Total current liabilities 104,658 13,330 125,598 — 243,586 Long-term debt 495,762 — 108 — 495,870 Intercompany payable 501,993 54,283 (556,276 ) — Losses in excess of investment in subsidiaries — — 20,629 (20,629 ) — Other long-term obligations 2,418 — 68,538 (5,975 ) 64,981 Total Central Garden & Pet shareholders’ equity (deficit) 593,220 (24,614 ) 1,291,111 (1,266,497 ) 593,220 Noncontrolling interest — 1,271 — — 1,271 Total equity (deficit) 593,220 (23,343 ) 1,291,111 (1,266,497 ) 594,491 Total $ 1,698,051 $ 44,270 $ 1,505,984 $ (1,849,377 ) $ 1,398,928 CONSOLIDATING CONDENSED BALANCE SHEET March 26, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 1,820 $ 5,083 $ 2,923 $ — $ 9,826 Restricted cash 11,946 — — — 11,946 Accounts receivable, net 100,346 15,446 224,734 — 340,526 Inventories 115,644 17,043 258,067 — 390,754 Prepaid expenses and other 23,003 797 26,958 — 50,758 Total current assets 252,759 38,369 512,682 — 803,810 Land, buildings, improvements and equipment, net 47,310 3,829 113,655 — 164,794 Goodwill — — 213,753 — 213,753 Other long-term assets 54,088 3,417 84,777 (1,540 ) 140,742 Intercompany receivable 41,922 — 367,931 (409,853 ) — Investment in subsidiaries 1,098,281 — — (1,098,281 ) — Total $ 1,494,360 $ 45,615 $ 1,292,798 $ (1,509,674 ) $ 1,323,099 LIABILITIES AND EQUITY Accounts payable $ 48,693 $ 10,546 $ 73,972 $ — $ 133,211 Accrued expenses 52,837 2,029 42,816 — 97,682 Current portion of long-term debt 219 — 375 — 594 Total current liabilities 101,749 12,575 117,163 — 231,487 Long-term debt 496,001 — 395 — 496,396 Intercompany payable 359,472 50,381 — (409,853 ) — Losses in excess of investment in subsidiaries — — 16,928 (16,928 ) — Other long-term obligations 5,416 — 58,398 (1,540 ) 62,274 Total Central Garden & Pet shareholders’ equity (deficit) 531,722 (18,561 ) 1,099,914 (1,081,353 ) 531,722 Noncontrolling interest — 1,220 — — 1,220 Total equity (deficit) 531,722 (17,341 ) 1,099,914 (1,081,353 ) 532,942 Total $ 1,494,360 $ 45,615 $ 1,292,798 $ (1,509,674 ) $ 1,323,099 CONSOLIDATING CONDENSED BALANCE SHEET September 24, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 82,158 $ 9,695 $ 1,129 $ — $ 92,982 Restricted cash 10,910 — — — 10,910 Accounts receivable, net 59,617 5,156 136,378 — 201,151 Inventories 113,317 11,752 236,935 — 362,004 Prepaid expenses and other assets 20,978 817 25,964 — 47,759 Total current assets 286,980 27,420 400,406 — 714,806 Land, buildings, improvements and equipment, net 41,083 3,897 113,244 — 158,224 Goodwill 15,058 — 216,327 — 231,385 Other long-term assets 30,555 2,980 85,701 (11,458 ) 107,778 Intercompany receivable 32,778 — 567,374 (600,152 ) — Investment in subsidiaries 1,176,990 — — (1,176,990 ) — Total $ 1,583,444 $ 34,297 $ 1,383,052 $ (1,788,600 ) $ 1,212,193 LIABILITIES AND EQUITY Accounts payable $ 34,096 $ 3,953 $ 64,364 $ — $ 102,413 Accrued expenses and other liabilities 47,862 1,410 50,071 — 99,343 Current portion of long term debt 88 — 375 — 463 Total current liabilities 82,046 5,363 114,810 — 202,219 Long-term debt 394,364 — 442 — 394,806 Intercompany payable 553,964 46,188 — (600,152 ) — Losses in excess of investment in subsidiaries — — 16,126 (16,126 ) — Other long-term obligations 56 — 71,983 (11,458 ) 60,581 Total Central Garden & Pet shareholders’ equity (deficit) 553,014 (18,827 ) 1,179,691 (1,160,864 ) 553,014 Noncontrolling interest — 1,573 — — 1,573 Total equity (deficit) 553,014 (17,254 ) 1,179,691 (1,160,864 ) 554,587 Total $ 1,583,444 $ 34,297 $ 1,383,052 $ (1,788,600 ) $ 1,212,193 |
Consolidating Condensed Statement of Cash Flows | CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Six Months Ended March 25, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash used by operating activities $ (43,383 ) $ (7,352 ) $ (41,431 ) $ (4,076 ) $ (96,242 ) Additions to property, plant and equipment (4,357 ) (413 ) (22,024 ) — (26,794 ) Payments to acquire companies, net of cash acquired (60,042 ) — — — (60,042 ) Proceeds from sale of business, facility and other assets 2 — 8,266 — 8,268 Change in restricted cash and cash equivalents (78 ) — — — (78 ) Investment in equity method investee (2,000 ) — — (2,000 ) Other investing activities (1,395 ) — — — (1,395 ) Intercompany investing activities (14,089 ) — 50,108 (36,019 ) — Net cash provided (used) by investing activities (81,959 ) (413 ) 36,350 (36,019 ) (82,041 ) Repayments on revolving line of credit (115,000 ) — — — (115,000 ) Borrowings on revolving line of credit 216,000 — — — 216,000 Repayments of long-term debt (88 ) — (361 ) — (449 ) Excess tax benefits from stock-based awards 13,166 — — — 13,166 Repurchase of common stock (20,172 ) — — — (20,172 ) Distribution to parent — (4,076 ) — 4,076 — Distribution to noncontrolling interest — (1,019 ) — — (1,019 ) Payment of contingent consideration — — (894 ) — (894 ) Intercompany financing activities (49,895 ) 7,830 6,046 36,019 — Net cash provided by financing activities 44,011 2,735 4,791 40,095 91,632 Effect of exchange rates on cash (335 ) 99 74 — (162 ) Net decrease in cash and cash equivalents (81,666 ) (4,931 ) (216 ) — (86,813 ) Cash and cash equivalents at beginning of period 82,158 9,695 1,129 — 92,982 Cash and cash equivalents at end of period $ 492 $ 4,764 $ 913 $ — $ 6,169 CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Six Months Ended March 26, 2016 (in thousands) Parent Non-Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash used by operating activities $ (12,121 ) $ (6,240 ) $ (27,598 ) $ (4,884 ) $ (50,843 ) Additions to property, plant and equipment (2,394 ) (412 ) (9,989 ) — (12,795 ) Payments to acquire companies, net of cash acquired (60,916 ) — (7,985 ) — (68,901 ) Change in restricted cash and cash equivalents 1,211 — — — 1,211 Other investing activities (500 ) — — — (500 ) Intercompany investing activities (9,227 ) — 47,070 (37,843 ) — Net cash provided (used) by investing activities (71,826 ) (412 ) 29,096 (37,843 ) (80,985 ) Repayments of long-term debt (400,130 ) — (15 ) — (400,145 ) Borrowings under revolving line of credit 280,000 — — — 280,000 Repayments on revolving line of credit (178,000 ) — — — (178,000 ) Issuance of long-term debt 400,000 400,000 Excess tax benefits from stock-based awards 1,181 — — — 1,181 Repurchase of common stock (1,722 ) — — — (1,722 ) Distribution to parent — (4,884 ) — 4,884 — Distribution to noncontrolling interest — (592 ) — — (592 ) Payment of financing costs (6,362 ) (6,362 ) Intercompany financing activities (44,782 ) 6,939 — 37,843 — Net cash provided (used) by financing activities 50,185 1,463 (15 ) 42,727 94,360 Effect of exchange rates on cash (698 ) 250 158 — (290 ) Net increase (decrease) in cash and cash equivalents (34,460 ) (4,939 ) 1,641 — (37,758 ) Cash and cash equivalents at beginning of year 36,280 10,022 1,282 — 47,584 Cash and cash equivalents at end of year $ 1,820 $ 5,083 $ 2,923 $ — $ 9,826 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Restricted cash | $ 10,988,000 | $ 10,910,000 | $ 11,946,000 |
Outstanding derivative instruments | $ 0 | $ 0 | |
Subsidiaries | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Noncontrolling interest owned by the subsidiary | 20.00% |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 |
Liabilities: | |||
Total liabilities | $ 4,420 | $ 5,113 | $ 6,215 |
Liability for Contingent Consideration | |||
Liabilities: | |||
Total liabilities | 4,420 | 5,113 | 6,215 |
Level 1 | |||
Liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Level 1 | Liability for Contingent Consideration | |||
Liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Level 2 | |||
Liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Level 2 | Liability for Contingent Consideration | |||
Liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Level 3 | |||
Liabilities: | |||
Total liabilities | 4,420 | 5,113 | 6,215 |
Level 3 | Liability for Contingent Consideration | |||
Liabilities: | |||
Total liabilities | $ 4,420 | $ 5,113 | $ 6,215 |
Fair Value Measurements - Sum32
Fair Value Measurements - Summary of Changes in Fair Value of Level 3 Financial Instruments (Details) - Level 3 - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 25, 2017 | Mar. 26, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 5,113 | $ 3,625 |
Estimated contingent performance-based consideration established at the time of acquisition | 0 | 2,590 |
Changes in the fair value of contingent performance-based payments established at the time of acquisition | 201 | 0 |
Performance-based payments made | (894) | |
Ending balance | $ 4,420 | $ 6,215 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Nov. 30, 2015 | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying value of senior subordinated notes | $ 496,244,000 | $ 395,269,000 | $ 496,990,000 | |
Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying value of senior subordinated notes | 394,763,000 | 394,365,000 | 393,968,000 | |
Senior Notes | 6.125% Senior Notes Due in November 2023 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt, aggregate principal amount | $ 400,000,000 | |||
Debt instrument interest rate stated, percentage | 6.125% | |||
Debt instrument maturity period | Nov. 9, 2023 | |||
Estimated fair value of senior notes | 422,400,000 | 430,300,000 | 416,100,000 | |
Carrying value of senior subordinated notes | $ 394,800,000 | $ 394,400,000 | $ 394,000,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - Segrest Inc. - USD ($) $ in Millions | Oct. 24, 2016 | Mar. 25, 2017 |
Business Acquisition [Line Items] | ||
Business combination, purchase price | $ 60 | |
Contingent payments established at the time of acquisition | $ 6 | |
Purchase price exceeded the estimated fair value of assets acquired | $ 47.7 |
Inventories, net - Summary of I
Inventories, net - Summary of Inventories, Net of Allowance for Obsolescence (Details) - USD ($) $ in Thousands | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 122,029 | $ 120,786 | $ 113,779 |
Work in progress | 21,636 | 17,378 | 15,267 |
Finished goods | 273,752 | 217,788 | 252,453 |
Supplies | 8,968 | 6,052 | 9,255 |
Total inventories, net | $ 426,385 | $ 362,004 | $ 390,754 |
Other Intangible Assets - Compo
Other Intangible Assets - Components of Gross and Net Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | $ 170,500 | $ 172,100 | $ 153,800 |
Accumulated Amortization | (51,900) | (49,000) | (45,400) |
Accumulated Impairment | (27,200) | (27,200) | (25,400) |
Net Carrying Value | 91,424 | 95,865 | 82,989 |
Marketing-Related Intangible Assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 77,600 | 77,900 | 77,700 |
Accumulated Amortization | (11,700) | (11,300) | (10,800) |
Accumulated Impairment | (26,000) | (26,000) | (24,200) |
Net Carrying Value | 39,900 | 40,600 | 42,700 |
Other Acquired Intangible Assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 28,600 | 28,600 | 27,800 |
Accumulated Amortization | (12,200) | (11,600) | (11,000) |
Accumulated Impairment | (1,200) | (1,200) | (1,200) |
Net Carrying Value | 15,200 | 15,800 | 15,600 |
Amortizable | Marketing-Related Intangible Assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 14,900 | 14,900 | 14,100 |
Accumulated Amortization | (11,700) | (11,300) | (10,800) |
Accumulated Impairment | 0 | 0 | 0 |
Net Carrying Value | 3,200 | 3,600 | 3,300 |
Amortizable | Customer-Related Intangible Assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 64,300 | 65,600 | 48,300 |
Accumulated Amortization | (28,000) | (26,100) | (23,600) |
Accumulated Impairment | 0 | 0 | 0 |
Net Carrying Value | 36,300 | 39,500 | 24,700 |
Amortizable | Other Acquired Intangible Assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 20,800 | 20,800 | 20,000 |
Accumulated Amortization | (12,200) | (11,600) | (11,000) |
Accumulated Impairment | 0 | 0 | 0 |
Net Carrying Value | 8,600 | 9,200 | 9,000 |
Nonamortizable | Marketing-Related Intangible Assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 62,700 | 63,000 | 63,600 |
Accumulated Amortization | 0 | 0 | 0 |
Accumulated Impairment | (26,000) | (26,000) | (24,200) |
Net Carrying Value | 36,700 | 37,000 | 39,400 |
Nonamortizable | Other Acquired Intangible Assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 7,800 | 7,800 | 7,800 |
Accumulated Amortization | 0 | 0 | 0 |
Accumulated Impairment | (1,200) | (1,200) | (1,200) |
Net Carrying Value | $ 6,600 | $ 6,600 | $ 6,600 |
Other Intangible Assets - Narra
Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets, impairment charge | $ 1.8 | ||||
Amortization expense for intangibles | $ 1.4 | $ 1.2 | $ 2.9 | $ 2.2 | |
Estimated annual amortization expense related to acquired intangible assets, 2017 | 5 | 5 | |||
Estimated annual amortization expense related to acquired intangible assets, 2018 | 5 | 5 | |||
Estimated annual amortization expense related to acquired intangible assets, 2019 | 5 | 5 | |||
Estimated annual amortization expense related to acquired intangible assets, 2020 | 5 | 5 | |||
Estimated annual amortization expense related to acquired intangible assets, 2021 | $ 5 | $ 5 | |||
Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining lives of acquired intangible assets | 4 years | ||||
Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining lives of acquired intangible assets | 25 years | ||||
Marketing-Related Intangible Assets | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining lives of acquired intangible assets | 6 years | ||||
Customer-Related Intangible Assets | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining lives of acquired intangible assets | 11 years | ||||
Other Acquired Intangible Assets | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining lives of acquired intangible assets | 13 years |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-term Debt (Details) - USD ($) | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 | Nov. 09, 2015 |
Debt Instrument [Line Items] | ||||
Total | $ 496,244,000 | $ 395,269,000 | $ 496,990,000 | |
Less current portion | (374,000) | (463,000) | (594,000) | |
Long-term portion | 495,870,000 | 394,806,000 | 496,396,000 | |
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | (5,237,000) | (5,635,000) | (6,032,000) | |
Total | 394,763,000 | 394,365,000 | 393,968,000 | |
Senior Notes | Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | ||||
Debt Instrument [Line Items] | ||||
Notes | 400,000,000 | 400,000,000 | 400,000,000 | $ 400,000,000 |
Asset-based Revolving Credit Facility, 2018 | ||||
Debt Instrument [Line Items] | ||||
Total | 0 | 0 | 102,000,000 | |
Asset-based Revolving Credit Facility, 2021 | ||||
Debt Instrument [Line Items] | ||||
Total | 101,000,000 | 0 | ||
Other notes payable | ||||
Debt Instrument [Line Items] | ||||
Total | $ 481,000 | $ 904,000 | $ 1,022,000 |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt (Phantom) (Details) | 3 Months Ended | 6 Months Ended | |
Mar. 25, 2017 | Mar. 25, 2017 | Nov. 09, 2015 | |
Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, final maturity December 2018 | |||
Components of long-term debt | |||
Debt instrument maturity period | Dec. 31, 2018 | ||
Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 | |||
Components of long-term debt | |||
Debt instrument maturity period | Apr. 1, 2021 | ||
Base Rate Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 0.25% | ||
LIBOR-Based Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 1.25% | ||
Minimum | Base Rate Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, final maturity December 2018 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 0.25% | ||
Minimum | Base Rate Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 0.25% | ||
Minimum | LIBOR-Based Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, final maturity December 2018 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 1.25% | ||
Minimum | LIBOR-Based Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 1.25% | ||
Maximum | Base Rate Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, final maturity December 2018 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 0.75% | ||
Maximum | Base Rate Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 0.50% | ||
Maximum | LIBOR-Based Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, final maturity December 2018 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 1.75% | ||
Maximum | LIBOR-Based Borrowings | Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021 | |||
Components of long-term debt | |||
Applicable interest margin rate on the credit facility | 1.50% | ||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | Senior Notes | |||
Components of long-term debt | |||
Debt instrument interest rate stated, percentage | 6.125% | 6.125% | 6.125% |
Debt instrument maturity period | Nov. 1, 2023 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Apr. 22, 2016USD ($) | Dec. 26, 2015 | Nov. 09, 2015USD ($) | Mar. 25, 2017USD ($) | Mar. 26, 2016USD ($) | Mar. 25, 2017USD ($) | Mar. 26, 2016USD ($) | Sep. 24, 2016USD ($) | Dec. 31, 2015USD ($) |
Components of long-term debt | |||||||||
Interest expense | $ 6,830,000 | $ 7,096,000 | $ 13,703,000 | $ 29,241,000 | |||||
Non-cash charge | 0 | 3,337,000 | |||||||
Letter of Credit | |||||||||
Components of long-term debt | |||||||||
Letters of credit outstanding | $ 2,600,000 | $ 2,600,000 | |||||||
Asset-based Revolving Credit Facility, 2021 | |||||||||
Components of long-term debt | |||||||||
Maturity date of senior subordinated notes | Apr. 1, 2021 | ||||||||
Asset-based Revolving Credit Facility, 2021 | LIBOR-Based Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 1.25% | ||||||||
Applicable interest rate on the credit facility | 2.10% | 2.10% | |||||||
Asset-based Revolving Credit Facility, 2021 | Base Rate Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 0.25% | ||||||||
Applicable interest rate on the credit facility | 4.00% | 4.00% | |||||||
Asset-based Revolving Credit Facility, 2021 | Minimum | LIBOR-Based Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 1.25% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Minimum | Base Rate Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 0.25% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Maximum | LIBOR-Based Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 1.50% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Maximum | Base Rate Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 0.50% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Revolving Credit Facility | |||||||||
Components of long-term debt | |||||||||
Debt issuance cost | $ 1,200,000 | ||||||||
Credit facility, maximum principal amount | $ 400,000,000 | ||||||||
Credit facility, additional borrowings available | $ 200,000,000 | ||||||||
Line of credit outstanding borrowings | 101,000,000 | $ 101,000,000 | |||||||
Credit facility, available capacity | 238,900,000 | 238,900,000 | |||||||
Debt instrument fixed charge coverage ratio | 1 | ||||||||
Asset-based Revolving Credit Facility, 2021 | Revolving Credit Facility | Federal Funds Rate | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 0.50% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Revolving Credit Facility | One-Month LIBOR | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 1.00% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Revolving Credit Facility | Minimum | LIBOR-Based Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 1.25% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Revolving Credit Facility | Minimum | Base Rate Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 0.25% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Revolving Credit Facility | Maximum | LIBOR-Based Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 1.50% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Revolving Credit Facility | Maximum | Base Rate Borrowings | |||||||||
Components of long-term debt | |||||||||
Applicable interest margin rate on the credit facility | 0.50% | ||||||||
Asset-based Revolving Credit Facility, 2021 | Letter of Credit | |||||||||
Components of long-term debt | |||||||||
Letters of credit outstanding | 0 | 0 | |||||||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | |||||||||
Components of long-term debt | |||||||||
Redemption percentage | 35.00% | ||||||||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | Prior to November 15, 2018 | |||||||||
Components of long-term debt | |||||||||
Debt redemption price percentage | 106.125% | ||||||||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | On or after November 15, 2018 | |||||||||
Components of long-term debt | |||||||||
Debt redemption price percentage | 104.594% | ||||||||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | On or after November 15, 2019 | |||||||||
Components of long-term debt | |||||||||
Debt redemption price percentage | 103.063% | ||||||||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | On or after November 15, 2020 | |||||||||
Components of long-term debt | |||||||||
Debt redemption price percentage | 101.531% | ||||||||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | On or after November 15, 2021 | |||||||||
Components of long-term debt | |||||||||
Debt redemption price percentage | 100.00% | ||||||||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | Upon Change Of Control | |||||||||
Components of long-term debt | |||||||||
Debt redemption price percentage | 101.00% | ||||||||
Senior Notes, Interest at 6.125%, Payable Semi-annually, Principal Due November 2023 | Senior Notes | |||||||||
Components of long-term debt | |||||||||
Aggregate principal amount of debt | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | |||
Debt instrument interest rate stated, percentage | 6.125% | 6.125% | 6.125% | ||||||
Maturity date of senior subordinated notes | Nov. 1, 2023 | ||||||||
Debt issuance cost | $ 6,300,000 | ||||||||
Senior Subordinated Notes, Interest at 8.25%, Payable Semi-annually, Principal Due March 2018 | Senior Notes | |||||||||
Components of long-term debt | |||||||||
Aggregate principal amount of debt | $ 400,000,000 | ||||||||
Debt instrument interest rate stated, percentage | 8.25% | ||||||||
Maturity date of senior subordinated notes | Mar. 1, 2018 | ||||||||
Senior Subordinated Notes, Interest at 8.25%, Payable Semi-annually, Principal Due March 2018 | Senior Subordinated Notes | |||||||||
Components of long-term debt | |||||||||
Debt redemption price percentage | 102.063% | ||||||||
Call premium payment | $ 8,300,000 | ||||||||
One-time payment of overlapping interest expense period | 30 days | ||||||||
Interest expense | $ 2,700,000 | ||||||||
Non-cash charge | $ 3,300,000 |
Supplemental Equity Informati41
Supplemental Equity Information - Summary of Changes in Carrying Amounts of Equity Attributable to Controlling Interest and Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2017 | Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 554,587 | $ 506,380 | ||
Comprehensive income | $ 35,393 | $ 32,976 | 42,674 | 24,120 |
Amortization of share-based awards | 4,222 | 2,986 | ||
Restricted share activity | (5,502) | (578) | ||
Issuance of common stock, including net share settlement of stock options | (13,613) | (552) | ||
Tax benefit on stock option exercise, net of tax deficiency | 13,142 | 1,177 | ||
Distribution to Noncontrolling interest | (1,019) | (592) | ||
Other | 1 | |||
Ending balance | 594,491 | 532,942 | 594,491 | 532,942 |
Additional Paid In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 393,297 | 388,636 | ||
Amortization of share-based awards | 4,222 | 2,986 | ||
Restricted share activity | (5,501) | (580) | ||
Issuance of common stock, including net share settlement of stock options | (13,619) | (554) | ||
Tax benefit on stock option exercise, net of tax deficiency | 13,142 | 1,177 | ||
Ending balance | 391,541 | 391,665 | 391,541 | 391,665 |
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 160,501 | 115,987 | ||
Comprehensive income | 42,321 | 24,095 | ||
Ending balance | 202,822 | 140,082 | 202,822 | 140,082 |
Accumulated Other Comprehensive Income | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (1,294) | 164 | ||
Comprehensive income | (364) | (692) | ||
Ending balance | (1,658) | (528) | (1,658) | (528) |
Total | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 553,014 | 505,286 | ||
Comprehensive income | 41,957 | 23,403 | ||
Amortization of share-based awards | 4,222 | 2,986 | ||
Restricted share activity | (5,502) | (578) | ||
Issuance of common stock, including net share settlement of stock options | (13,613) | (552) | ||
Tax benefit on stock option exercise, net of tax deficiency | 13,142 | 1,177 | ||
Ending balance | 593,220 | 531,722 | 593,220 | 531,722 |
Noncontrolling Interest | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 1,573 | 1,094 | ||
Comprehensive income | 717 | 717 | ||
Distribution to Noncontrolling interest | (1,019) | (592) | ||
Other | 1 | |||
Ending balance | 1,271 | 1,220 | 1,271 | 1,220 |
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 120 | 119 | ||
Issuance of common stock, including net share settlement of stock options | 2 | |||
Ending balance | 122 | 119 | 122 | 119 |
Class A Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 374 | 364 | ||
Restricted share activity | (1) | 2 | ||
Issuance of common stock, including net share settlement of stock options | 4 | 2 | ||
Ending balance | 377 | 368 | 377 | 368 |
Class B Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 16 | 16 | ||
Ending balance | $ 16 | $ 16 | $ 16 | $ 16 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 25, 2017 | Mar. 26, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Tax benefit associated with share-based compensation expense | $ 1.9 | $ 1.3 |
Selling, General and Administrative Expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 5.3 | $ 3.6 |
Earnings Per Share - Earnings P
Earnings Per Share - Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2017 | Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | |
Basic EPS: | ||||
Net income available to common shareholders | $ 34,684 | $ 32,697 | $ 42,321 | $ 24,095 |
Weighted average shares, basic | 50,079 | 48,717 | 49,872 | 48,641 |
Earnings per share, basic (in dollars per share) | $ 0.69 | $ 0.67 | $ 0.85 | $ 0.50 |
Diluted EPS | ||||
Net income available to common shareholders | $ 34,684 | $ 32,697 | $ 42,321 | $ 24,095 |
Weighted average shares, diluted | 51,983 | 50,445 | 51,911 | 50,558 |
Earnings per share, diluted (in dollars per share) | $ 0.67 | $ 0.65 | $ 0.82 | $ 0.48 |
Options to purchase common stock | ||||
Effect of dilutive securities: | ||||
Effective of dilutive securities, in shares | 1,156 | 976 | 1,273 | 1,166 |
Effect of dilutive securities (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
Restricted shares | ||||
Effect of dilutive securities: | ||||
Effective of dilutive securities, in shares | 748 | 752 | 766 | 751 |
Effect of dilutive securities (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.01) | $ 0 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - $ / shares shares in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of options to purchase common stock outstanding (in shares) | 6.8 | 3.1 | 6.8 |
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares outstanding but not included in the computation of diluted earnings per share (in shares) | 1.6 | 0.2 | 0.7 |
Minimum | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Options to purchase common stock (in dollars per share) | $ 6.43 | $ 6.43 | $ 6.43 |
Maximum | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Options to purchase common stock (in dollars per share) | $ 15.56 | $ 31.76 | $ 15.56 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 6 Months Ended |
Mar. 25, 2017Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Financial
Segment Information - Financial Information Relating to Company's Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 25, 2017 | Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | Sep. 24, 2016 | |
Net sales: | |||||
Total net sales | $ 569,924 | $ 541,249 | $ 989,422 | $ 901,061 | |
Operating income: | |||||
Total income from operations | 63,860 | 59,403 | 83,798 | 68,176 | |
Interest expense - net | (6,822) | (7,087) | (13,657) | (29,210) | |
Other income (expense) | (965) | (88) | (1,932) | (561) | |
Income tax expense | 20,824 | 18,793 | 25,171 | 13,593 | |
Income including noncontrolling interest | 35,249 | 33,435 | 43,038 | 24,812 | |
Net income attributable to noncontrolling interest | 565 | 738 | 717 | 717 | |
Net income attributable to Central Garden & Pet Company | 34,684 | 32,697 | 42,321 | 24,095 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 10,335 | 9,169 | 20,344 | 18,202 | |
Assets: | |||||
Assets | 1,398,928 | 1,323,099 | 1,398,928 | 1,323,099 | $ 1,212,193 |
Goodwill (included in corporate assets above): | |||||
Goodwill | 230,385 | 213,753 | 230,385 | 213,753 | 231,385 |
Operating Segments | Pet segment | |||||
Net sales: | |||||
Total net sales | 298,393 | 275,328 | 602,439 | 523,990 | |
Operating income: | |||||
Total income from operations | 34,645 | 32,409 | 68,051 | 58,604 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 6,174 | 4,956 | 12,004 | 9,420 | |
Assets: | |||||
Assets | 612,189 | 538,901 | 612,189 | 538,901 | 508,879 |
Goodwill (included in corporate assets above): | |||||
Goodwill | 224,912 | 210,455 | 224,912 | 210,455 | 225,912 |
Operating Segments | Garden segment | |||||
Net sales: | |||||
Total net sales | 271,531 | 265,921 | 386,983 | 377,071 | |
Operating income: | |||||
Total income from operations | 46,005 | 44,407 | 48,681 | 41,153 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 1,528 | 1,359 | 3,035 | 3,044 | |
Assets: | |||||
Assets | 478,919 | 467,026 | 478,919 | 467,026 | 304,901 |
Goodwill (included in corporate assets above): | |||||
Goodwill | 5,473 | 3,298 | 5,473 | 3,298 | 5,473 |
Corporate | |||||
Operating income: | |||||
Total income from operations | (16,790) | (17,413) | (32,934) | (31,581) | |
Depreciation and amortization: | |||||
Depreciation and amortization | 2,633 | 2,854 | 5,305 | 5,738 | |
Assets: | |||||
Assets | $ 307,820 | $ 317,172 | $ 307,820 | $ 317,172 | $ 398,413 |
Consolidating Condensed Finan47
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Narrative (Details) | 6 Months Ended |
Mar. 25, 2017 | |
Senior Notes | |
Condensed Financial Statements, Captions [Line Items] | |
Senior subordinated notes, maturity year | 2,023 |
Guarantor Subsidiaries | |
Condensed Financial Statements, Captions [Line Items] | |
Collective ownership percentage on guarantor subsidiaries | 100.00% |
Consolidating Condensed Finan48
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Consolidating Condensed Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2017 | Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | $ 569,924 | $ 541,249 | $ 989,422 | $ 901,061 |
Cost of goods sold and occupancy | 386,395 | 371,910 | 685,215 | 631,936 |
Gross profit | 183,529 | 169,339 | 304,207 | 269,125 |
Selling, general and administrative expenses | 119,669 | 109,936 | 220,409 | 200,949 |
Operating income | 63,860 | 59,403 | 83,798 | 68,176 |
Interest expense | (6,830) | (7,096) | (13,703) | (29,241) |
Interest income | 8 | 9 | 46 | 31 |
Other income (expense) | (965) | (88) | (1,932) | (561) |
Income before income taxes and noncontrolling interest | 56,073 | 52,228 | 68,209 | 38,405 |
Income tax expense (benefit) | 20,824 | 18,793 | 25,171 | 13,593 |
Equity in earnings of affiliates | 0 | 0 | 0 | 0 |
Income including noncontrolling interest | 35,249 | 33,435 | 43,038 | 24,812 |
Net income attributable to noncontrolling interest | 565 | 738 | 717 | 717 |
Net income attributable to Central Garden & Pet Company | 34,684 | 32,697 | 42,321 | 24,095 |
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 190,791 | 156,790 | 346,309 | 293,817 |
Cost of goods sold and occupancy | 145,593 | 121,969 | 266,729 | 232,228 |
Gross profit | 45,198 | 34,821 | 79,580 | 61,589 |
Selling, general and administrative expenses | 39,347 | 33,210 | 75,312 | 66,164 |
Operating income | 5,851 | 1,611 | 4,268 | (4,575) |
Interest expense | (6,759) | (6,653) | (13,610) | (29,161) |
Interest income | 7 | 8 | 45 | 29 |
Other income (expense) | (737) | 657 | (1,340) | (178) |
Income before income taxes and noncontrolling interest | (1,638) | (4,377) | (10,637) | (33,885) |
Income tax expense (benefit) | (718) | (775) | (3,910) | (11,920) |
Equity in earnings of affiliates | 35,604 | 36,299 | 49,048 | 46,060 |
Income including noncontrolling interest | 34,684 | 32,697 | 42,321 | 24,095 |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Central Garden & Pet Company | 34,684 | 32,697 | 42,321 | 24,095 |
Non- Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 26,092 | 30,002 | 40,116 | 45,272 |
Cost of goods sold and occupancy | 20,128 | 23,099 | 31,806 | 36,045 |
Gross profit | 5,964 | 6,903 | 8,310 | 9,227 |
Selling, general and administrative expenses | 4,874 | 5,124 | 8,538 | 8,903 |
Operating income | 1,090 | 1,779 | (228) | 324 |
Interest expense | (65) | (68) | (82) | (80) |
Interest income | 1 | 1 | 1 | 2 |
Other income (expense) | (194) | (197) | (387) | (263) |
Income before income taxes and noncontrolling interest | 832 | 1,515 | (696) | (17) |
Income tax expense (benefit) | 448 | 694 | 37 | 197 |
Equity in earnings of affiliates | 0 | 0 | 0 | 0 |
Income including noncontrolling interest | 384 | 821 | (733) | (214) |
Net income attributable to noncontrolling interest | 565 | 738 | 717 | 717 |
Net income attributable to Central Garden & Pet Company | (181) | 83 | (1,450) | (931) |
Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 378,673 | 381,748 | 645,111 | 603,912 |
Cost of goods sold and occupancy | 244,680 | 252,419 | 426,120 | 402,908 |
Gross profit | 133,993 | 129,329 | 218,991 | 201,004 |
Selling, general and administrative expenses | 77,074 | 73,316 | 139,233 | 128,577 |
Operating income | 56,919 | 56,013 | 79,758 | 72,427 |
Interest expense | (6) | (375) | (11) | 0 |
Interest income | 0 | 0 | 0 | 0 |
Other income (expense) | (34) | (548) | (205) | (120) |
Income before income taxes and noncontrolling interest | 56,879 | 55,090 | 79,542 | 72,307 |
Income tax expense (benefit) | 21,094 | 18,874 | 29,044 | 25,316 |
Equity in earnings of affiliates | 384 | 585 | (427) | (177) |
Income including noncontrolling interest | 36,169 | 36,801 | 50,071 | 46,814 |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Central Garden & Pet Company | 36,169 | 36,801 | 50,071 | 46,814 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | (25,632) | (27,291) | (42,114) | (41,940) |
Cost of goods sold and occupancy | (24,006) | (25,577) | (39,440) | (39,245) |
Gross profit | (1,626) | (1,714) | (2,674) | (2,695) |
Selling, general and administrative expenses | (1,626) | (1,714) | (2,674) | (2,695) |
Operating income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Interest income | 0 | 0 | 0 | 0 |
Other income (expense) | 0 | 0 | 0 | 0 |
Income before income taxes and noncontrolling interest | 0 | 0 | 0 | 0 |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Equity in earnings of affiliates | (35,988) | (36,884) | (48,621) | (45,883) |
Income including noncontrolling interest | (35,988) | (36,884) | (48,621) | (45,883) |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Central Garden & Pet Company | $ (35,988) | $ (36,884) | $ (48,621) | $ (45,883) |
Consolidating Condensed Finan49
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Consolidating Condensed Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2017 | Mar. 26, 2016 | Mar. 25, 2017 | Mar. 26, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | $ 35,249 | $ 33,435 | $ 43,038 | $ 24,812 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 144 | (459) | (364) | (692) |
Total comprehensive income | 35,393 | 32,976 | 42,674 | 24,120 |
Comprehensive income attributable to noncontrolling interests | 565 | 738 | 717 | 717 |
Comprehensive income attributable to Central Garden & Pet Company | 34,828 | 32,238 | 41,957 | 23,403 |
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 34,684 | 32,697 | 42,321 | 24,095 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 144 | (459) | (364) | (692) |
Total comprehensive income | 34,828 | 32,238 | 41,957 | 23,403 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Central Garden & Pet Company | 34,828 | 32,238 | 41,957 | 23,403 |
Non- Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 384 | 821 | (733) | (214) |
Other comprehensive income (loss): | ||||
Foreign currency translation | 95 | (398) | (260) | (540) |
Total comprehensive income | 479 | 423 | (993) | (754) |
Comprehensive income attributable to noncontrolling interests | 565 | 738 | 717 | 717 |
Comprehensive income attributable to Central Garden & Pet Company | (86) | (315) | (1,710) | (1,471) |
Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 36,169 | 36,801 | 50,071 | 46,814 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 20 | 57 | (30) | 7 |
Total comprehensive income | 36,189 | 36,858 | 50,041 | 46,821 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Central Garden & Pet Company | 36,189 | 36,858 | 50,041 | 46,821 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | (35,988) | (36,884) | (48,621) | (45,883) |
Other comprehensive income (loss): | ||||
Foreign currency translation | (115) | 341 | 290 | 533 |
Total comprehensive income | (36,103) | (36,543) | (48,331) | (45,350) |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Central Garden & Pet Company | $ (36,103) | $ (36,543) | $ (48,331) | $ (45,350) |
Consolidating Condensed Finan50
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Consolidating Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 25, 2017 | Sep. 24, 2016 | Mar. 26, 2016 | Sep. 26, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 6,169 | $ 92,982 | $ 9,826 | $ 47,584 |
Restricted cash | 10,988 | 10,910 | 11,946 | |
Accounts receivable, net | 343,202 | 201,151 | 340,526 | |
Inventories | 426,385 | 362,004 | 390,754 | |
Prepaid expenses and other | 54,074 | 47,759 | 50,758 | |
Total current assets | 840,818 | 714,806 | 803,810 | |
Land, buildings, improvements and equipment, net | 175,940 | 158,224 | 164,794 | |
Goodwill | 230,385 | 231,385 | 213,753 | |
Other long-term assets | 151,785 | 107,778 | 140,742 | |
Intercompany receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total | 1,398,928 | 1,212,193 | 1,323,099 | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 141,791 | 102,413 | 133,211 | |
Accrued expenses | 101,421 | 99,343 | 97,682 | |
Current portion of long-term debt | 374 | 463 | 594 | |
Total current liabilities | 243,586 | 202,219 | 231,487 | |
Long-term debt | 495,870 | 394,806 | 496,396 | |
Intercompany payable | 0 | 0 | 0 | |
Losses in excess of investment in subsidiaries | 0 | 0 | 0 | |
Other long-term obligations | 64,981 | 60,581 | 62,274 | |
Total Central Garden & Pet shareholders’ equity (deficit) | 593,220 | 553,014 | 531,722 | |
Noncontrolling interest | 1,271 | 1,573 | 1,220 | |
Total equity | 594,491 | 554,587 | 532,942 | 506,380 |
Total | 1,398,928 | 1,212,193 | 1,323,099 | |
Parent | ||||
ASSETS | ||||
Cash and cash equivalents | 492 | 82,158 | 1,820 | 36,280 |
Restricted cash | 10,988 | 10,910 | 11,946 | |
Accounts receivable, net | 113,600 | 59,617 | 100,346 | |
Inventories | 138,493 | 113,317 | 115,644 | |
Prepaid expenses and other | 21,933 | 20,978 | 23,003 | |
Total current assets | 285,506 | 286,980 | 252,759 | |
Land, buildings, improvements and equipment, net | 38,932 | 41,083 | 47,310 | |
Goodwill | 15,058 | 15,058 | 0 | |
Other long-term assets | 26,472 | 30,555 | 54,088 | |
Intercompany receivable | 44,957 | 32,778 | 41,922 | |
Investment in subsidiaries | 1,287,126 | 1,176,990 | 1,098,281 | |
Total | 1,698,051 | 1,583,444 | 1,494,360 | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 51,357 | 34,096 | 48,693 | |
Accrued expenses | 53,301 | 47,862 | 52,837 | |
Current portion of long-term debt | 0 | 88 | 219 | |
Total current liabilities | 104,658 | 82,046 | 101,749 | |
Long-term debt | 495,762 | 394,364 | 496,001 | |
Intercompany payable | 501,993 | 553,964 | 359,472 | |
Losses in excess of investment in subsidiaries | 0 | 0 | 0 | |
Other long-term obligations | 2,418 | 56 | 5,416 | |
Total Central Garden & Pet shareholders’ equity (deficit) | 593,220 | 553,014 | 531,722 | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity | 593,220 | 553,014 | 531,722 | |
Total | 1,698,051 | 1,583,444 | 1,494,360 | |
Non- Guarantor Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 4,764 | 9,695 | 5,083 | 10,022 |
Restricted cash | 0 | 0 | 0 | |
Accounts receivable, net | 14,366 | 5,156 | 15,446 | |
Inventories | 16,901 | 11,752 | 17,043 | |
Prepaid expenses and other | 830 | 817 | 797 | |
Total current assets | 36,861 | 27,420 | 38,369 | |
Land, buildings, improvements and equipment, net | 4,045 | 3,897 | 3,829 | |
Goodwill | 0 | 0 | 0 | |
Other long-term assets | 3,364 | 2,980 | 3,417 | |
Intercompany receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total | 44,270 | 34,297 | 45,615 | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 11,199 | 3,953 | 10,546 | |
Accrued expenses | 2,131 | 1,410 | 2,029 | |
Current portion of long-term debt | 0 | 0 | 0 | |
Total current liabilities | 13,330 | 5,363 | 12,575 | |
Long-term debt | 0 | 0 | 0 | |
Intercompany payable | 54,283 | 46,188 | 50,381 | |
Losses in excess of investment in subsidiaries | 0 | 0 | 0 | |
Other long-term obligations | 0 | 0 | 0 | |
Total Central Garden & Pet shareholders’ equity (deficit) | (24,614) | (18,827) | (18,561) | |
Noncontrolling interest | 1,271 | 1,573 | 1,220 | |
Total equity | (23,343) | (17,254) | (17,341) | |
Total | 44,270 | 34,297 | 45,615 | |
Guarantor Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 913 | 1,129 | 2,923 | 1,282 |
Restricted cash | 0 | 0 | 0 | |
Accounts receivable, net | 215,236 | 136,378 | 224,734 | |
Inventories | 270,991 | 236,935 | 258,067 | |
Prepaid expenses and other | 31,311 | 25,964 | 26,958 | |
Total current assets | 518,451 | 400,406 | 512,682 | |
Land, buildings, improvements and equipment, net | 132,963 | 113,244 | 113,655 | |
Goodwill | 215,327 | 216,327 | 213,753 | |
Other long-term assets | 127,924 | 85,701 | 84,777 | |
Intercompany receivable | 511,319 | 567,374 | 367,931 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total | 1,505,984 | 1,383,052 | 1,292,798 | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 79,235 | 64,364 | 73,972 | |
Accrued expenses | 45,989 | 50,071 | 42,816 | |
Current portion of long-term debt | 374 | 375 | 375 | |
Total current liabilities | 125,598 | 114,810 | 117,163 | |
Long-term debt | 108 | 442 | 395 | |
Intercompany payable | 0 | 0 | ||
Losses in excess of investment in subsidiaries | 20,629 | 16,126 | 16,928 | |
Other long-term obligations | 68,538 | 71,983 | 58,398 | |
Total Central Garden & Pet shareholders’ equity (deficit) | 1,291,111 | 1,179,691 | 1,099,914 | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity | 1,291,111 | 1,179,691 | 1,099,914 | |
Total | 1,505,984 | 1,383,052 | 1,292,798 | |
Eliminations | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | 0 | $ 0 |
Restricted cash | 0 | 0 | 0 | |
Accounts receivable, net | 0 | 0 | 0 | |
Inventories | 0 | 0 | 0 | |
Prepaid expenses and other | 0 | 0 | 0 | |
Total current assets | 0 | 0 | 0 | |
Land, buildings, improvements and equipment, net | 0 | 0 | 0 | |
Goodwill | 0 | 0 | 0 | |
Other long-term assets | (5,975) | (11,458) | (1,540) | |
Intercompany receivable | (556,276) | (600,152) | (409,853) | |
Investment in subsidiaries | (1,287,126) | (1,176,990) | (1,098,281) | |
Total | (1,849,377) | (1,788,600) | (1,509,674) | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 0 | 0 | 0 | |
Accrued expenses | 0 | 0 | 0 | |
Current portion of long-term debt | 0 | 0 | 0 | |
Total current liabilities | 0 | 0 | 0 | |
Long-term debt | 0 | 0 | 0 | |
Intercompany payable | (556,276) | (600,152) | (409,853) | |
Losses in excess of investment in subsidiaries | (20,629) | (16,126) | (16,928) | |
Other long-term obligations | (5,975) | (11,458) | (1,540) | |
Total Central Garden & Pet shareholders’ equity (deficit) | (1,266,497) | (1,160,864) | (1,081,353) | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity | (1,266,497) | (1,160,864) | (1,081,353) | |
Total | $ (1,849,377) | $ (1,788,600) | $ (1,509,674) |
Consolidating Condensed Finan51
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Consolidating Condensed Statement of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 25, 2017 | Mar. 26, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net cash used by operating activities | $ (96,242) | $ (50,843) |
Additions to property, plant and equipment | (26,794) | (12,795) |
Payments to acquire companies, net of cash acquired | (60,042) | (68,901) |
Proceeds from the sale of business, facility and other assets | 8,268 | |
Change in restricted cash and cash equivalents | (78) | 1,211 |
Investment in equity method investee | (2,000) | 0 |
Other investing activities | (1,395) | (500) |
Intercompany investing activities | 0 | 0 |
Net cash used in investing activities | (82,041) | (80,985) |
Repayments of long-term debt | (449) | (400,145) |
Borrowings on revolving line of credit | 216,000 | 280,000 |
Repayments on revolving line of credit | (115,000) | (178,000) |
Issuance of long-term debt | 0 | 400,000 |
Excess tax benefits from stock-based awards | 13,166 | 1,181 |
Repurchase of common stock | (20,172) | (1,722) |
Distribution to parent | 0 | 0 |
Distribution to noncontrolling interest | (1,019) | (592) |
Payment of contingent consideration liability | (894) | |
Payment of financing costs | 0 | (6,362) |
Intercompany financing activities | 0 | 0 |
Net cash provided by financing activities | 91,632 | 94,360 |
Effect of exchange rates on cash | (162) | (290) |
Net decrease in cash and cash equivalents | (86,813) | (37,758) |
Cash and equivalents at beginning of period | 92,982 | 47,584 |
Cash and equivalents at end of period | 6,169 | 9,826 |
Parent | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash used by operating activities | (43,383) | (12,121) |
Additions to property, plant and equipment | (4,357) | (2,394) |
Payments to acquire companies, net of cash acquired | (60,042) | (60,916) |
Proceeds from the sale of business, facility and other assets | 2 | |
Change in restricted cash and cash equivalents | (78) | 1,211 |
Investment in equity method investee | (2,000) | |
Other investing activities | (1,395) | (500) |
Intercompany investing activities | (14,089) | (9,227) |
Net cash used in investing activities | (81,959) | (71,826) |
Repayments of long-term debt | (88) | (400,130) |
Borrowings on revolving line of credit | 216,000 | 280,000 |
Repayments on revolving line of credit | (115,000) | (178,000) |
Issuance of long-term debt | 400,000 | |
Excess tax benefits from stock-based awards | 13,166 | 1,181 |
Repurchase of common stock | (20,172) | (1,722) |
Distribution to parent | 0 | 0 |
Distribution to noncontrolling interest | 0 | 0 |
Payment of contingent consideration liability | 0 | |
Payment of financing costs | (6,362) | |
Intercompany financing activities | (49,895) | (44,782) |
Net cash provided by financing activities | 44,011 | 50,185 |
Effect of exchange rates on cash | (335) | (698) |
Net decrease in cash and cash equivalents | (81,666) | (34,460) |
Cash and equivalents at beginning of period | 82,158 | 36,280 |
Cash and equivalents at end of period | 492 | 1,820 |
Non- Guarantor Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash used by operating activities | (7,352) | (6,240) |
Additions to property, plant and equipment | (413) | (412) |
Payments to acquire companies, net of cash acquired | 0 | 0 |
Proceeds from the sale of business, facility and other assets | 0 | |
Change in restricted cash and cash equivalents | 0 | 0 |
Investment in equity method investee | 0 | |
Other investing activities | 0 | 0 |
Intercompany investing activities | 0 | 0 |
Net cash used in investing activities | (413) | (412) |
Repayments of long-term debt | 0 | 0 |
Borrowings on revolving line of credit | 0 | 0 |
Repayments on revolving line of credit | 0 | 0 |
Issuance of long-term debt | ||
Excess tax benefits from stock-based awards | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Distribution to parent | (4,076) | (4,884) |
Distribution to noncontrolling interest | (1,019) | (592) |
Payment of contingent consideration liability | 0 | |
Payment of financing costs | ||
Intercompany financing activities | 7,830 | 6,939 |
Net cash provided by financing activities | 2,735 | 1,463 |
Effect of exchange rates on cash | 99 | 250 |
Net decrease in cash and cash equivalents | (4,931) | (4,939) |
Cash and equivalents at beginning of period | 9,695 | 10,022 |
Cash and equivalents at end of period | 4,764 | 5,083 |
Guarantor Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash used by operating activities | (41,431) | (27,598) |
Additions to property, plant and equipment | (22,024) | (9,989) |
Payments to acquire companies, net of cash acquired | 0 | (7,985) |
Proceeds from the sale of business, facility and other assets | 8,266 | |
Change in restricted cash and cash equivalents | 0 | 0 |
Investment in equity method investee | ||
Other investing activities | 0 | 0 |
Intercompany investing activities | 50,108 | 47,070 |
Net cash used in investing activities | 36,350 | 29,096 |
Repayments of long-term debt | (361) | (15) |
Borrowings on revolving line of credit | 0 | 0 |
Repayments on revolving line of credit | 0 | 0 |
Issuance of long-term debt | ||
Excess tax benefits from stock-based awards | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Distribution to parent | 0 | 0 |
Distribution to noncontrolling interest | 0 | 0 |
Payment of contingent consideration liability | (894) | |
Payment of financing costs | ||
Intercompany financing activities | 6,046 | 0 |
Net cash provided by financing activities | 4,791 | (15) |
Effect of exchange rates on cash | 74 | 158 |
Net decrease in cash and cash equivalents | (216) | 1,641 |
Cash and equivalents at beginning of period | 1,129 | 1,282 |
Cash and equivalents at end of period | 913 | 2,923 |
Eliminations | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash used by operating activities | (4,076) | (4,884) |
Additions to property, plant and equipment | 0 | 0 |
Payments to acquire companies, net of cash acquired | 0 | 0 |
Proceeds from the sale of business, facility and other assets | 0 | |
Change in restricted cash and cash equivalents | 0 | 0 |
Investment in equity method investee | 0 | |
Other investing activities | 0 | 0 |
Intercompany investing activities | (36,019) | (37,843) |
Net cash used in investing activities | (36,019) | (37,843) |
Repayments of long-term debt | 0 | 0 |
Borrowings on revolving line of credit | 0 | 0 |
Repayments on revolving line of credit | 0 | 0 |
Issuance of long-term debt | ||
Excess tax benefits from stock-based awards | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Distribution to parent | 4,076 | 4,884 |
Distribution to noncontrolling interest | 0 | 0 |
Payment of contingent consideration liability | 0 | |
Payment of financing costs | ||
Intercompany financing activities | 36,019 | 37,843 |
Net cash provided by financing activities | 40,095 | 42,727 |
Effect of exchange rates on cash | 0 | 0 |
Net decrease in cash and cash equivalents | 0 | 0 |
Cash and equivalents at beginning of period | 0 | 0 |
Cash and equivalents at end of period | $ 0 | $ 0 |