Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 24, 2017 | Jul. 25, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 24, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
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 | 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 | 37,962,372 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,652,262 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 |
Current assets: | |||
Cash and cash equivalents | $ 14,473 | $ 92,982 | $ 40,000 |
Restricted cash | 10,999 | 10,910 | 12,029 |
Accounts receivable (less allowance for doubtful accounts of $21,277, $25,429 and $21,069) | 279,504 | 201,151 | 241,954 |
Inventories | 383,449 | 362,004 | 361,813 |
Deferred taxes, prepaid expenses and other | 51,964 | 47,759 | 45,075 |
Total current assets | 740,389 | 714,806 | 700,871 |
Land, buildings, improvements and equipment—net | 177,784 | 158,224 | 159,430 |
Goodwill | 230,385 | 231,385 | 233,011 |
Other intangible assets—net | 90,004 | 95,865 | 95,070 |
Other assets | 113,185 | 11,913 | 28,525 |
Total | 1,351,747 | 1,212,193 | 1,216,907 |
Current liabilities: | |||
Accounts payable | 106,408 | 102,413 | 96,906 |
Accrued expenses | 112,091 | 99,343 | 102,953 |
Current portion of long-term debt | 375 | 463 | 530 |
Total current liabilities | 218,874 | 202,219 | 200,389 |
Long-term debt | 435,074 | 394,806 | 394,603 |
Deferred taxes and other long-term obligations | 68,792 | 60,581 | 63,975 |
Equity: | |||
Additional paid-in capital | 392,995 | 393,297 | 390,270 |
Accumulated earnings | 235,070 | 160,501 | 166,112 |
Accumulated other comprehensive income (loss) | (1,487) | (1,294) | (805) |
Total Central Garden & Pet Company shareholders’ equity | 627,095 | 553,014 | 556,084 |
Noncontrolling interest | 1,912 | 1,573 | 1,856 |
Total equity | 629,007 | 554,587 | 557,940 |
Total | 1,351,747 | 1,212,193 | 1,216,907 |
Common Stock | |||
Equity: | |||
Common stock | 122 | 120 | 120 |
Total equity | 122 | 120 | 120 |
Class A Common Stock | |||
Equity: | |||
Common stock | 379 | 374 | 371 |
Total equity | 379 | 374 | 371 |
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 | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 |
Accounts receivable allowance for doubtful accounts | $ 21,277 | $ 21,069 | $ 25,429 |
Common Stock | |||
Common stock, shares outstanding (in shares) | 12,160,023 | 11,998,472 | 11,998,472 |
Class A Common Stock | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares outstanding (in shares) | 37,933,970 | 37,418,572 | 37,197,569 |
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 - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2017 | Jun. 25, 2016 | Jun. 24, 2017 | Jun. 25, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 574,592 | $ 514,544 | $ 1,564,014 | $ 1,415,605 |
Cost of goods sold and occupancy | 391,319 | 350,799 | 1,076,534 | 982,735 |
Gross profit | 183,273 | 163,745 | 487,480 | 432,870 |
Selling, general and administrative expenses | 125,340 | 115,560 | 345,749 | 316,509 |
Operating income | 57,933 | 48,185 | 141,731 | 116,361 |
Interest expense | (7,273) | (6,964) | (20,976) | (36,205) |
Interest income | 53 | 43 | 99 | 74 |
Other income (expense) | 1,626 | 318 | (306) | (243) |
Income before income taxes and noncontrolling interest | 52,339 | 41,582 | 120,548 | 79,987 |
Income tax expense | 19,450 | 14,916 | 44,621 | 28,509 |
Income including noncontrolling interest | 32,889 | 26,666 | 75,927 | 51,478 |
Net income attributable to noncontrolling interest | 641 | 636 | 1,358 | 1,353 |
Net income attributable to Central Garden & Pet Company | $ 32,248 | $ 26,030 | $ 74,569 | $ 50,125 |
Net income attributable to Central Garden & Pet Company | ||||
Basic (in dollars per share) | $ 0.64 | $ 0.53 | $ 1.49 | $ 1.03 |
Diluted (in dollars per share) | $ 0.62 | $ 0.51 | $ 1.44 | $ 0.99 |
Weighted average shares used in the computation of net income per share: | ||||
Basic (in shares) | 50,507 | 49,120 | 50,084 | 48,801 |
Diluted (in shares) | 51,825 | 51,063 | 51,769 | 50,743 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2017 | Jun. 25, 2016 | Jun. 24, 2017 | Jun. 25, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Income including noncontrolling interest | $ 32,889 | $ 26,666 | $ 75,927 | $ 51,478 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 172 | (277) | (193) | (969) |
Total comprehensive income | 33,061 | 26,389 | 75,734 | 50,509 |
Comprehensive income attributable to noncontrolling interest | 641 | 636 | 1,358 | 1,353 |
Comprehensive income attributable to Central Garden & Pet Company | $ 32,420 | $ 25,753 | $ 74,376 | $ 49,156 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 24, 2017 | Jun. 25, 2016 | |
Cash flows from operating activities: | ||
Income including noncontrolling interest | $ 75,927 | $ 51,478 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Depreciation and amortization | 31,374 | 29,286 |
Amortization of deferred financing costs | 1,021 | 1,164 |
Stock-based compensation | 8,189 | 6,069 |
Excess tax benefits from stock-based awards | (17,205) | (4,726) |
Deferred income taxes | 10,420 | 12,305 |
Write-off of deferred financing costs | 0 | 3,337 |
Loss on sale of property and equipment | 96 | 788 |
Gain on sale of facility | (2,050) | (2,544) |
Other | 1,241 | 190 |
Change in assets and liabilities (excluding businesses acquired): | ||
Accounts receivable | (74,234) | (13,236) |
Inventories | (17,347) | (5,928) |
Prepaid expenses and other assets | 11,774 | 6,493 |
Accounts payable | 2,901 | (8,027) |
Accrued expenses | 10,629 | 14,812 |
Other long-term obligations | (88) | (1,878) |
Net cash provided by operating activities | 42,648 | 89,583 |
Cash flows from investing activities: | ||
Additions to property and equipment | (37,087) | (19,486) |
Payments to acquire companies, net of cash acquired | (106,821) | (68,901) |
Proceeds from the sale of business, facility and other assets | 8,301 | 3,899 |
Change in restricted cash | (89) | 1,129 |
Investment in equity method investee | (11,495) | 0 |
Other investing activities | (2,735) | (550) |
Net cash used in investing activities | (149,926) | (83,909) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (456) | (400,230) |
Proceeds from issuance of long-term debt | 0 | 400,000 |
Borrowings under revolving line of credit | 456,000 | 419,000 |
Repayments under revolving line of credit | (416,000) | (419,000) |
Proceeds from issuance of common stock | 0 | 280 |
Repurchase of common stock, including shares surrendered for tax withholding | (25,654) | (9,429) |
Payment of contingent consideration liability | (1,222) | 0 |
Distribution to noncontrolling interest | (1,019) | (592) |
Payment of financing costs | 0 | (7,560) |
Excess tax benefits from stock-based awards | 17,205 | 4,726 |
Net cash provided (used) by financing activities | 28,854 | (12,805) |
Effect of exchange rate changes on cash and cash equivalents | (85) | (453) |
Net decrease in cash and cash equivalents | (78,509) | (7,584) |
Cash and equivalents at beginning of period | 92,982 | 47,584 |
Cash and equivalents at end of period | 14,473 | 40,000 |
Supplemental information: | ||
Cash paid for interest | $ 27,075 | $ 32,440 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 24, 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 June 24, 2017 and June 25, 2016 , the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income for the three and nine months ended June 24, 2017 and June 25, 2016 , and the condensed consolidated statements of cash flows for the nine months ended June 24, 2017 and June 25, 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 nine months ended June 24, 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 , $12.0 million and $10.9 million as of June 24, 2017 , June 25, 2016 and September 24, 2016 , respectively, and is reflected in Restricted cash on the condensed consolidated balance sheets. 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. 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. In May 2017, the FASB issued ASU 2017-09 (ASU 2017-09), Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which provides clarity on which changes to the terms or conditions of share-based payment awards require an entity to apply the modification accounting provisions required in Topic 718. The standard is effective for all entities for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company does not expect the adoption of this ASU will have a material 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 does not expect the adoption of ASU 2015-11 will have a material impact on its condensed consolidated financial statements and related disclosures. 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. The standard allows for either a retrospective or prospective transition method and is not expected to have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. A s of June 24, 2017 , June 25, 2016 and September 24, 2016 , net current deferred tax assets classified within deferred taxes, prepaid expenses and other current assets were $30.4 million , $29.7 million and $31.5 million , respectively. 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 Company will adopt this guidance in its fourth quarter of fiscal 2017 as part of its annual goodwill impairment testing. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 24, 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 June 24, 2017 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 4,095 $ 4,095 Total liabilities $ 0 $ 0 $ 4,095 $ 4,095 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 June 25, 2016 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 6,355 $ 6,355 Total liabilities $ 0 $ 0 $ 6,355 $ 6,355 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 June 24, 2017 and June 25, 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 204 Performance-based payments (1,222 ) Balance June 24, 2017 $ 4,095 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 140 Balance June 25, 2016 $ 6,355 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 June 24, 2017 and June 25, 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 June 24, 2017 , June 25, 2016 and September 24, 2016 was $430.5 million , $417 million and $430.3 million , respectively, compared to a carrying value of $395.0 million , $394.2 million and $394.4 million , respectively. |
Acquisitions
Acquisitions | 9 Months Ended |
Jun. 24, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 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, for a purchase price of approximately $48.0 million . The purchase price exceeded the estimated fair value of the net tangible assets acquired by approximately $41.8 million , which is included in other assets in the Company’s condensed consolidated balance sheet as of June 24, 2017 . The Company has not yet finalized the allocation of the purchase price to the fair value of the intangible assets acquired. 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. 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 June 24, 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 and K&H acquisitions were not considered material to the Company's overall consolidated financial statements during the periods presented. |
Inventories, net
Inventories, net | 9 Months Ended |
Jun. 24, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, net Inventories, net of allowance for obsolescence, consist of the following (in thousands): June 24, 2017 June 25, 2016 September 24, 2016 Raw materials $ 118,097 $ 110,095 $ 120,786 Work in progress 16,573 16,604 17,378 Finished goods 243,053 225,814 217,788 Supplies 5,726 9,300 6,052 Total inventories, net $ 383,449 $ 361,813 $ 362,004 |
Goodwill
Goodwill | 9 Months Ended |
Jun. 24, 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 | 9 Months Ended |
Jun. 24, 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) June 24, 2017 Marketing-related intangible assets – amortizable $ 14.9 $ (11.9 ) $ — $ 3.0 Marketing-related intangible assets – nonamortizable 62.7 — (26.0 ) 36.7 Total 77.6 (11.9 ) (26.0 ) 39.7 Customer-related intangible assets – amortizable 64.3 (29.0 ) — 35.3 Other acquired intangible assets – amortizable 20.8 (12.4 ) — 8.4 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 28.6 (12.4 ) (1.2 ) 15.0 Total other intangible assets $ 170.5 $ (53.3 ) $ (27.2 ) $ 90.0 Gross Accumulated Amortization Accumulated Impairment Net Carrying Value (in millions) June 25, 2016 Marketing-related intangible assets – amortizable $ 14.9 $ (11.1 ) $ — $ 3.8 Marketing-related intangible assets – nonamortizable 63.0 — (24.2 ) 38.8 Total 77.9 (11.1 ) (24.2 ) 42.6 Customer-related intangible assets – amortizable 62.1 (25.8 ) — 36.3 Other acquired intangible assets – amortizable 20.8 (11.2 ) — 9.6 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 28.6 (11.2 ) (1.2 ) 16.2 Total other intangible assets $ 168.6 $ (48.1 ) $ (25.4 ) $ 95.1 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 nine months ended June 24, 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 $2.7 million for the three months ended June 24, 2017 and June 25, 2016 , respectively, and $4.3 million and $4.9 million for the nine months ended June 24, 2017 and June 25, 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 | 9 Months Ended |
Jun. 24, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following: June 24, 2017 June 25, 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 (5,039 ) (5,834 ) (5,635 ) Net carrying value 394,961 394,166 394,365 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 40,000 — — Other notes payable 488 967 904 Total 435,449 395,133 395,269 Less current portion (375 ) (530 ) (463 ) Long-term portion $ 435,074 $ 394,603 $ 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 nine months ended June 25, 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 June 24, 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 June 24, 2017 , there were borrowings of $40.0 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 June 24, 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 June 24, 2017 , the borrowing base and remaining borrowing availability was $360.0 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 June 24, 2017 , and such applicable margin for Base Rate borrowings fluctuates between 0.25% - 0.5% , and was 0.25% as of June 24, 2017 . As of June 24, 2017 , the applicable interest rate related to Base Rate borrowings was 4.5% , and the applicable interest rate related to LIBOR-based borrowings was 2.3% . 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 June 24, 2017 . |
Supplemental Equity Information
Supplemental Equity Information | 9 Months Ended |
Jun. 24, 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 nine months ended June 24, 2017 and June 25, 2016 Controlling Interest (in thousands) Common Stock Class A Common Stock Class B Stock Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) 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 74,569 (193 ) 74,376 1,358 75,734 Amortization of share-based awards 6,377 6,377 6,377 Restricted share activity, including net share settlement (1 ) (7,491 ) (7,492 ) (7,492 ) Issuance of common stock, including net share settlement of stock options 2 6 (16,358 ) (16,350 ) (16,350 ) Tax benefit on stock option exercise, net of tax deficiency 17,170 17,170 17,170 Distribution to Noncontrolling interest (1,019 ) (1,019 ) Balance June 24, 2017 $ 122 $ 379 $ 16 $ 392,995 $ 235,070 $ (1,487 ) $ 627,095 $ 1,912 $ 629,007 Controlling Interest (in thousands) Common Stock Class A Common Stock Class B Stock Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Noncontrolling Interest Total Balance September 26, 2015 $ 119 $ 364 $ 16 $ 388,636 $ 115,987 $ 164 $ 505,286 $ 1,094 $ 506,380 Comprehensive income 50,125 (969 ) 49,156 1,353 50,509 Amortization of share-based awards 4,796 4,796 4,796 Restricted share activity, including net share settlement 1 (1,230 ) (1,229 ) (1,229 ) Issuance of common stock, including net share settlement of stock options 1 6 (6,654 ) (6,647 ) (6,647 ) Tax benefit on stock option exercise, net of tax deficiency 4,722 4,722 4,722 Distribution to Noncontrolling interest (592 ) (592 ) Other 1 1 Balance June 25, 2016 $ 120 $ 371 $ 16 $ 390,270 $ 166,112 $ (805 ) $ 556,084 $ 1,856 $ 557,940 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jun. 24, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company recognized share-based compensation expense of $8.2 million and $6.1 million for the nine months ended June 24, 2017 and June 25, 2016 , respectively, as a component of selling, general and administrative expenses. The tax benefit associated with share-based compensation expense for the nine months ended June 24, 2017 and June 25, 2016 was $3.0 million and $2.2 million , respectively. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 24, 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 Nine Months Ended June 24, 2017 June 24, 2017 Income Shares Per Share Income Shares Per Share Basic EPS: Net income available to common shareholders $ 32,248 50,507 $ 0.64 $ 74,569 50,084 $ 1.49 Effect of dilutive securities: Options to purchase common stock 810 (0.01 ) — 1,080 (0.03 ) Restricted shares 508 (0.01 ) — 605 (0.02 ) Diluted EPS: — Net income available to common shareholders $ 32,248 51,825 $ 0.62 $ 74,569 51,769 $ 1.44 Three Months Ended Nine Months Ended June 25, 2016 June 25, 2016 Income Shares Per Share Income Shares Per Share Basic EPS: Net income available to common shareholders $ 26,030 49,120 $ 0.53 $ 50,125 48,801 $ 1.03 Effect of dilutive securities: Options to purchase common stock 1,211 (0.01 ) 1,201 (0.03 ) Restricted shares 732 (0.01 ) 741 (0.01 ) Diluted EPS: Net income available to common shareholders $ 26,030 51,063 $ 0.51 $ 50,125 50,743 $ 0.99 Options to purchase 2.7 million shares of common stock at prices ranging from $6.43 to $31.76 per share were outstanding at June 24, 2017 , and options to purchase 4.5 million shares of common stock at prices ranging from $6.43 to $15.56 per share were outstanding at June 25, 2016 . For the three months ended June 24, 2017 , options to purchase 0.6 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 three months ended June 25, 2016 , all options outstanding were included in the computation of diluted earnings per share. For the nine month period ended June 24, 2017 , options to purchase 0.6 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 nine month period ended June 25, 2016 , all options outstanding were included in the computation of diluted earnings per share. |
Segment Information
Segment Information | 9 Months Ended |
Jun. 24, 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 Nine Months Ended June 24, June 25, June 24, June 25, Net sales: Pet segment $ 313,437 $ 287,213 $ 915,876 $ 811,203 Garden segment 261,155 227,331 648,138 604,402 Total net sales $ 574,592 $ 514,544 $ 1,564,014 $ 1,415,605 Operating income: Pet segment 36,092 38,759 104,143 97,363 Garden segment 38,369 26,452 87,050 67,605 Corporate (16,528 ) (17,026 ) (49,462 ) (48,607 ) Total income from operations 57,933 48,185 141,731 116,361 Interest expense - net (7,220 ) (6,921 ) (20,877 ) (36,131 ) Other income (expense) 1,626 318 (306 ) (243 ) Income tax expense 19,450 14,916 44,621 28,509 Income including noncontrolling interest 32,889 26,666 75,927 51,478 Net income attributable to noncontrolling interest 641 636 1,358 1,353 Net income attributable to Central Garden & Pet Company $ 32,248 $ 26,030 $ 74,569 $ 50,125 Depreciation and amortization: Pet segment $ 6,794 6,700 $ 18,798 $ 16,120 Garden segment 1,651 1,542 4,686 4,586 Corporate 2,585 2,842 7,890 8,580 Total depreciation and amortization $ 11,030 $ 11,084 $ 31,374 $ 29,286 June 24, June 25, September 24, Assets: Pet segment $ 622,567 $ 523,281 $ 508,879 Garden segment 368,365 327,768 304,901 Corporate 360,815 365,858 398,413 Total assets $ 1,351,747 $ 1,216,907 $ 1,212,193 Goodwill (included in corporate assets above): Pet segment $ 224,912 $ 229,713 $ 225,912 Garden segment 5,473 3,298 5,473 Total goodwill $ 230,385 $ 233,011 $ 231,385 |
Consolidating Condensed Financi
Consolidating Condensed Financial Information of Guarantor Subsidiaries | 9 Months Ended |
Jun. 24, 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 K&H Manufacturing, 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 June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 184,719 $ 29,067 $ 387,333 $ (26,527 ) $ 574,592 Cost of goods sold and occupancy 142,533 20,636 252,678 (24,528 ) 391,319 Gross profit 42,186 8,431 134,655 (1,999 ) 183,273 Selling, general and administrative expenses 39,234 5,476 82,629 (1,999 ) 125,340 Operating income 2,952 2,955 52,026 — 57,933 Interest expense (7,213 ) (54 ) (6 ) — (7,273 ) Interest income 53 — — — 53 Other income 1,064 86 476 — 1,626 Income (loss) before taxes and equity in earnings of affiliates (3,144 ) 2,987 52,496 — 52,339 Income tax expense (benefit) (1,178 ) 1,096 19,532 — 19,450 Equity in earnings of affiliates 34,214 — 1,302 (35,516 ) — Net income including noncontrolling interest 32,248 1,891 34,266 (35,516 ) 32,889 Net income attributable to noncontrolling interest — 641 — — 641 Net income attributable to Central Garden & Pet Company $ 32,248 $ 1,250 $ 34,266 $ (35,516 ) $ 32,248 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 162,751 $ 28,052 $ 350,013 $ (26,272 ) $ 514,544 Cost of goods sold and occupancy 128,517 18,274 228,343 (24,335 ) 350,799 Gross profit 34,234 9,778 121,670 (1,937 ) 163,745 Selling, general and administrative expenses 36,826 5,380 75,291 (1,937 ) 115,560 Operating income (loss) (2,592 ) 4,398 46,379 — 48,185 Interest expense (6,904 ) (53 ) (7 ) — (6,964 ) Interest income 42 1 — — 43 Other income (expense) (108 ) (146 ) 572 — 318 Income (loss) before taxes and equity in earnings of affiliates (9,562 ) 4,200 46,944 — 41,582 Income tax expense (benefit) (3,517 ) 1,552 16,881 — 14,916 Equity in earnings of affiliates 32,075 — 2,148 (34,223 ) — Net income including noncontrolling interest 26,030 2,648 32,211 (34,223 ) 26,666 Net income attributable to noncontrolling interest — 636 — — 636 Net income attributable to Central Garden & Pet Company $ 26,030 $ 2,012 $ 32,211 $ (34,223 ) $ 26,030 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Nine Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 531,028 $ 69,183 $ 1,032,444 $ (68,641 ) $ 1,564,014 Cost of goods sold and occupancy 409,262 52,442 678,798 (63,968 ) 1,076,534 Gross profit 121,766 16,741 353,646 (4,673 ) 487,480 Selling, general and administrative expenses 114,546 14,014 221,862 (4,673 ) 345,749 Operating income 7,220 2,727 131,784 — 141,731 Interest expense (20,823 ) (136 ) (17 ) — (20,976 ) Interest income 98 1 — — 99 Other income (expense) (276 ) (301 ) 271 — (306 ) Income (loss) before taxes and equity in earnings of affiliates (13,781 ) 2,291 132,038 — 120,548 Income tax expense (benefit) (5,088 ) 1,133 48,576 — 44,621 Equity in earnings of affiliates 83,262 — 875 (84,137 ) — Net income including noncontrolling interest 74,569 1,158 84,337 (84,137 ) 75,927 Net income attributable to noncontrolling interest — 1,358 — — 1,358 Net income (loss) attributable to Central Garden & Pet Company $ 74,569 $ (200 ) $ 84,337 $ (84,137 ) $ 74,569 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Nine Months Ended June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 456,568 $ 73,324 $ 953,925 $ (68,212 ) $ 1,415,605 Cost of goods sold and occupancy 360,745 54,319 631,251 (63,580 ) 982,735 Gross profit 95,823 19,005 322,674 (4,632 ) 432,870 Selling, general and administrative expenses 102,990 14,283 203,868 (4,632 ) 316,509 Operating income (loss) (7,167 ) 4,722 118,806 — 116,361 Interest expense (36,065 ) (133 ) (7 ) — (36,205 ) Interest income 71 3 — — 74 Other income (expense) (286 ) (409 ) 452 — (243 ) Income (loss) before taxes and equity in earnings of affiliates (43,447 ) 4,183 119,251 — 79,987 Income tax expense (benefit) (15,437 ) 1,749 42,197 — 28,509 Equity in earnings of affiliates 78,135 — 1,971 (80,106 ) — Net income including noncontrolling interest 50,125 2,434 79,025 (80,106 ) 51,478 Net income attributable to noncontrolling interest — 1,353 — — 1,353 Net income attributable to Central Garden & Pet Company $ 50,125 $ 1,081 $ 79,025 $ (80,106 ) $ 50,125 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income $ 32,248 $ 1,891 $ 34,266 $ (35,516 ) $ 32,889 Other comprehensive income: Foreign currency translation 172 116 19 (135 ) 172 Total comprehensive income 32,420 2,007 34,285 (35,651 ) 33,061 Comprehensive income attributable to noncontrolling interests — 641 — — 641 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 32,420 $ 1,366 $ 34,285 $ (35,651 ) $ 32,420 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 26,030 $ 2,648 $ 32,211 $ (34,223 ) $ 26,666 Other comprehensive income (loss): Foreign currency translation (277 ) (233 ) 25 208 (277 ) Total comprehensive income 25,753 2,415 32,236 (34,015 ) 26,389 Comprehensive loss attributable to noncontrolling interests — 636 — — 636 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 25,753 $ 1,779 $ 32,236 $ (34,015 ) $ 25,753 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Nine Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 74,569 $ 1,158 $ 84,337 $ (84,137 ) $ 75,927 Other comprehensive loss: Foreign currency translation (193 ) (144 ) (11 ) 155 (193 ) Total comprehensive income (loss) 74,376 1,014 84,326 (83,982 ) 75,734 Comprehensive income attributable to noncontrolling interests — 1,358 — — 1,358 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 74,376 $ (344 ) $ 84,326 $ (83,982 ) $ 74,376 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Nine Months Ended June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 50,125 $ 2,434 $ 79,025 $ (80,106 ) $ 51,478 Other comprehensive income (loss): Foreign currency translation (969 ) (773 ) 32 741 (969 ) Total comprehensive income (loss) 49,156 1,661 79,057 (79,365 ) 50,509 Comprehensive income attributable to noncontrolling interests — 1,353 — — 1,353 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 49,156 $ 308 $ 79,057 $ (79,365 ) $ 49,156 CONSOLIDATING CONDENSED BALANCE SHEET June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 929 $ 10,118 $ 3,426 $ — $ 14,473 Restricted cash 10,999 — — — 10,999 Accounts receivable, net 92,703 9,842 176,959 — 279,504 Inventories 127,307 10,567 245,575 — 383,449 Prepaid expenses and other 19,670 1,059 31,235 — 51,964 Total current assets 251,608 31,586 457,195 — 740,389 Land, buildings, improvements and equipment, net 37,823 4,065 135,896 — 177,784 Goodwill 15,058 — 215,327 — 230,385 Other long-term assets 34,273 3,200 167,858 (2,142 ) 203,189 Intercompany receivable 36,783 — 601,317 (638,100 ) — Investment in subsidiaries 1,369,307 — — (1,369,307 ) — Total $ 1,744,852 $ 38,851 $ 1,577,593 $ (2,009,549 ) $ 1,351,747 LIABILITIES AND EQUITY Accounts payable $ 34,562 $ 7,832 $ 64,014 $ — $ 106,408 Accrued expenses 57,235 2,632 52,224 — 112,091 Current portion of long-term debt — — 375 — 375 Total current liabilities 91,797 10,464 116,613 — 218,874 Long-term debt 434,962 — 112 — 435,074 Intercompany payable 588,378 49,722 (638,100 ) — Losses in excess of investment in subsidiaries — — 19,327 (19,327 ) — Other long-term obligations 2,620 — 68,314 (2,142 ) 68,792 Total Central Garden & Pet shareholders’ equity (deficit) 627,095 (23,247 ) 1,373,227 (1,349,980 ) 627,095 Noncontrolling interest — 1,912 — — 1,912 Total equity (deficit) 627,095 (21,335 ) 1,373,227 (1,349,980 ) 629,007 Total $ 1,744,852 $ 38,851 $ 1,577,593 $ (2,009,549 ) $ 1,351,747 CONSOLIDATING CONDENSED BALANCE SHEET June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 30,477 $ 8,675 $ 848 $ — $ 40,000 Restricted cash 12,029 — — — 12,029 Accounts receivable, net 74,162 9,395 158,397 — 241,954 Inventories 105,440 9,037 247,336 — 361,813 Prepaid expenses and other 20,543 1,039 23,493 — 45,075 Total current assets 242,651 28,146 430,074 — 700,871 Land, buildings, improvements and equipment, net 43,475 3,877 112,078 — 159,430 Goodwill 18,858 — 214,153 — 233,011 Other long-term assets 37,139 3,294 84,702 (1,540 ) 123,595 Intercompany receivable 31,005 — 478,780 (509,785 ) — Investment in subsidiaries 1,130,148 — — (1,130,148 ) — Total $ 1,503,276 $ 35,317 $ 1,319,787 $ (1,641,473 ) $ 1,216,907 LIABILITIES AND EQUITY Accounts payable $ 26,818 $ 6,210 $ 63,878 $ — $ 96,906 Accrued expenses 48,981 2,290 51,682 — 102,953 Current portion of long-term debt 154 — 376 — 530 Total current liabilities 75,953 8,500 115,936 — 200,389 Long-term debt 394,164 — 439 — 394,603 Intercompany payable 468,039 41,746 — (509,785 ) — Losses in excess of investment in subsidiaries — — 14,780 (14,780 ) — Other long-term obligations 9,036 — 56,479 (1,540 ) 63,975 Total Central Garden & Pet shareholders’ equity (deficit) 556,084 (16,785 ) 1,132,153 (1,115,368 ) 556,084 Noncontrolling interest — 1,856 — — 1,856 Total equity (deficit) 556,084 (14,929 ) 1,132,153 (1,115,368 ) 557,940 Total $ 1,503,276 $ 35,317 $ 1,319,787 $ (1,641,473 ) $ 1,216,907 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 Nine Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash provided (used) by operating activities $ (14,968 ) $ 2,482 $ 59,210 $ (4,076 ) $ 42,648 Additions to property and equipment (6,811 ) (557 ) (29,719 ) (37,087 ) Payments to acquire companies, net of cash acquired (106,821 ) — — (106,821 ) Proceeds from sale of business, facility and other assets — — 8,301 — 8,301 Change in restricted cash and cash equivalents (89 ) — — (89 ) Investment in equity method investee (11,495 ) — — (11,495 ) Other investing activities (2,735 ) — — — (2,735 ) Intercompany investing activities (4,005 ) — (33,943 ) 37,948 — Net cash used by investing activities (131,956 ) (557 ) (55,361 ) 37,948 (149,926 ) Repayments on revolving line of credit (416,000 ) — — — (416,000 ) Borrowings under revolving line of credit 456,000 — — — 456,000 Repayments under long-term debt (88 ) — (368 ) — (456 ) Excess tax benefits from stock-based awards 17,205 — — — 17,205 Repurchase of common stock (25,654 ) — — — (25,654 ) Distribution to parent (4,076 ) — 4,076 — Distribution to noncontrolling interest (1,019 ) — — (1,019 ) Payment of contingent consideration liability — (1,222 ) — (1,222 ) Intercompany financing activities 34,414 3,534 (37,948 ) — Net cash provided (used) by financing activities 65,877 (1,561 ) (1,590 ) (33,872 ) 28,854 Effect of exchange rate changes on cash and cash equivalents (182 ) 59 38 — (85 ) Net decrease in cash and cash equivalents (81,229 ) 423 2,297 — (78,509 ) Cash and cash equivalents at beginning of period 82,158 9,695 1,129 — 92,982 Cash and cash equivalents at end of period $ 929 $ 10,118 $ 3,426 $ — $ 14,473 CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Nine Months Ended June 25, 2016 (in thousands) Parent Non-Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash used by operating activities $ 4,127 $ 6,082 $ 84,258 $ (4,884 ) $ 89,583 Additions to property, plant and equipment (1,876 ) (577 ) (17,033 ) — (19,486 ) Payments to acquire companies, net of cash acquired (60,916 ) — (7,985 ) — (68,901 ) Change in restricted cash and cash equivalents 1,129 — — — 1,129 Proceeds from sale of plant assets 3,899 3,899 Other investing activities (550 ) (550 ) Intercompany investing activities 1,689 — (63,778 ) 62,089 — Net cash provided (used) by investing activities (60,524 ) (577 ) (84,897 ) 62,089 (83,909 ) Repayments of long-term debt (400,208 ) — (22 ) — (400,230 ) Borrowings under revolving line of credit 419,000 — — — 419,000 Repayments under revolving line of credit (419,000 ) — — — (419,000 ) Issuance of long-term debt 400,000 — — — 400,000 Excess tax benefits from stock-based awards 4,726 — — — 4,726 Repurchase of common stock (9,429 ) — (9,429 ) Proceeds from issuance of common stock 280 — — — 280 Distribution to parent — (4,884 ) — 4,884 — Distribution to noncontrolling interest (592 ) (592 ) Payment of financing costs (7,560 ) — (7,560 ) Intercompany financing activities 63,786 (1,697 ) — (62,089 ) — Net cash provided (used) by financing activities 51,595 (7,173 ) (22 ) (57,205 ) (12,805 ) Effect of exchange rates on cash (1,001 ) 321 227 — (453 ) Net increase (decrease) in cash and cash equivalents (5,803 ) (1,347 ) (434 ) — (7,584 ) Cash and cash equivalents at beginning of year 36,280 10,022 1,282 — 47,584 Cash and cash equivalents at end of year $ 30,477 $ 8,675 $ 848 $ — $ 40,000 |
Contingencies
Contingencies | 9 Months Ended |
Jun. 24, 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. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Jun. 24, 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 , $12.0 million and $10.9 million as of June 24, 2017 , June 25, 2016 and September 24, 2016 , respectively, and is reflected in Restricted cash on the condensed consolidated balance sheets. |
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. 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. In May 2017, the FASB issued ASU 2017-09 (ASU 2017-09), Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which provides clarity on which changes to the terms or conditions of share-based payment awards require an entity to apply the modification accounting provisions required in Topic 718. The standard is effective for all entities for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company does not expect the adoption of this ASU will have a material 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 does not expect the adoption of ASU 2015-11 will have a material impact on its condensed consolidated financial statements and related disclosures. 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. The standard allows for either a retrospective or prospective transition method and is not expected to have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. A s of June 24, 2017 , June 25, 2016 and September 24, 2016 , net current deferred tax assets classified within deferred taxes, prepaid expenses and other current assets were $30.4 million , $29.7 million and $31.5 million , respectively. 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 Company will adopt this guidance in its fourth quarter of fiscal 2017 as part of its annual goodwill impairment testing. |
Fair Value Measurement | 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) | 9 Months Ended |
Jun. 24, 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 June 24, 2017 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 4,095 $ 4,095 Total liabilities $ 0 $ 0 $ 4,095 $ 4,095 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 June 25, 2016 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Liability for contingent consideration (a) $ 0 $ 0 $ 6,355 $ 6,355 Total liabilities $ 0 $ 0 $ 6,355 $ 6,355 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 June 24, 2017 and June 25, 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 204 Performance-based payments (1,222 ) Balance June 24, 2017 $ 4,095 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 140 Balance June 25, 2016 $ 6,355 |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended |
Jun. 24, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories, Net of Allowance for Obsolescence | Inventories, net of allowance for obsolescence, consist of the following (in thousands): June 24, 2017 June 25, 2016 September 24, 2016 Raw materials $ 118,097 $ 110,095 $ 120,786 Work in progress 16,573 16,604 17,378 Finished goods 243,053 225,814 217,788 Supplies 5,726 9,300 6,052 Total inventories, net $ 383,449 $ 361,813 $ 362,004 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 9 Months Ended |
Jun. 24, 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) June 24, 2017 Marketing-related intangible assets – amortizable $ 14.9 $ (11.9 ) $ — $ 3.0 Marketing-related intangible assets – nonamortizable 62.7 — (26.0 ) 36.7 Total 77.6 (11.9 ) (26.0 ) 39.7 Customer-related intangible assets – amortizable 64.3 (29.0 ) — 35.3 Other acquired intangible assets – amortizable 20.8 (12.4 ) — 8.4 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 28.6 (12.4 ) (1.2 ) 15.0 Total other intangible assets $ 170.5 $ (53.3 ) $ (27.2 ) $ 90.0 Gross Accumulated Amortization Accumulated Impairment Net Carrying Value (in millions) June 25, 2016 Marketing-related intangible assets – amortizable $ 14.9 $ (11.1 ) $ — $ 3.8 Marketing-related intangible assets – nonamortizable 63.0 — (24.2 ) 38.8 Total 77.9 (11.1 ) (24.2 ) 42.6 Customer-related intangible assets – amortizable 62.1 (25.8 ) — 36.3 Other acquired intangible assets – amortizable 20.8 (11.2 ) — 9.6 Other acquired intangible assets – nonamortizable 7.8 — (1.2 ) 6.6 Total 28.6 (11.2 ) (1.2 ) 16.2 Total other intangible assets $ 168.6 $ (48.1 ) $ (25.4 ) $ 95.1 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) | 9 Months Ended |
Jun. 24, 2017 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | Long-term debt consists of the following: June 24, 2017 June 25, 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 (5,039 ) (5,834 ) (5,635 ) Net carrying value 394,961 394,166 394,365 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 40,000 — — Other notes payable 488 967 904 Total 435,449 395,133 395,269 Less current portion (375 ) (530 ) (463 ) Long-term portion $ 435,074 $ 394,603 $ 394,806 |
Supplemental Equity Informati25
Supplemental Equity Information (Tables) | 9 Months Ended |
Jun. 24, 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 nine months ended June 24, 2017 and June 25, 2016 Controlling Interest (in thousands) Common Stock Class A Common Stock Class B Stock Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) 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 74,569 (193 ) 74,376 1,358 75,734 Amortization of share-based awards 6,377 6,377 6,377 Restricted share activity, including net share settlement (1 ) (7,491 ) (7,492 ) (7,492 ) Issuance of common stock, including net share settlement of stock options 2 6 (16,358 ) (16,350 ) (16,350 ) Tax benefit on stock option exercise, net of tax deficiency 17,170 17,170 17,170 Distribution to Noncontrolling interest (1,019 ) (1,019 ) Balance June 24, 2017 $ 122 $ 379 $ 16 $ 392,995 $ 235,070 $ (1,487 ) $ 627,095 $ 1,912 $ 629,007 Controlling Interest (in thousands) Common Stock Class A Common Stock Class B Stock Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Noncontrolling Interest Total Balance September 26, 2015 $ 119 $ 364 $ 16 $ 388,636 $ 115,987 $ 164 $ 505,286 $ 1,094 $ 506,380 Comprehensive income 50,125 (969 ) 49,156 1,353 50,509 Amortization of share-based awards 4,796 4,796 4,796 Restricted share activity, including net share settlement 1 (1,230 ) (1,229 ) (1,229 ) Issuance of common stock, including net share settlement of stock options 1 6 (6,654 ) (6,647 ) (6,647 ) Tax benefit on stock option exercise, net of tax deficiency 4,722 4,722 4,722 Distribution to Noncontrolling interest (592 ) (592 ) Other 1 1 Balance June 25, 2016 $ 120 $ 371 $ 16 $ 390,270 $ 166,112 $ (805 ) $ 556,084 $ 1,856 $ 557,940 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 24, 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 Nine Months Ended June 24, 2017 June 24, 2017 Income Shares Per Share Income Shares Per Share Basic EPS: Net income available to common shareholders $ 32,248 50,507 $ 0.64 $ 74,569 50,084 $ 1.49 Effect of dilutive securities: Options to purchase common stock 810 (0.01 ) — 1,080 (0.03 ) Restricted shares 508 (0.01 ) — 605 (0.02 ) Diluted EPS: — Net income available to common shareholders $ 32,248 51,825 $ 0.62 $ 74,569 51,769 $ 1.44 Three Months Ended Nine Months Ended June 25, 2016 June 25, 2016 Income Shares Per Share Income Shares Per Share Basic EPS: Net income available to common shareholders $ 26,030 49,120 $ 0.53 $ 50,125 48,801 $ 1.03 Effect of dilutive securities: Options to purchase common stock 1,211 (0.01 ) 1,201 (0.03 ) Restricted shares 732 (0.01 ) 741 (0.01 ) Diluted EPS: Net income available to common shareholders $ 26,030 51,063 $ 0.51 $ 50,125 50,743 $ 0.99 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jun. 24, 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 Nine Months Ended June 24, June 25, June 24, June 25, Net sales: Pet segment $ 313,437 $ 287,213 $ 915,876 $ 811,203 Garden segment 261,155 227,331 648,138 604,402 Total net sales $ 574,592 $ 514,544 $ 1,564,014 $ 1,415,605 Operating income: Pet segment 36,092 38,759 104,143 97,363 Garden segment 38,369 26,452 87,050 67,605 Corporate (16,528 ) (17,026 ) (49,462 ) (48,607 ) Total income from operations 57,933 48,185 141,731 116,361 Interest expense - net (7,220 ) (6,921 ) (20,877 ) (36,131 ) Other income (expense) 1,626 318 (306 ) (243 ) Income tax expense 19,450 14,916 44,621 28,509 Income including noncontrolling interest 32,889 26,666 75,927 51,478 Net income attributable to noncontrolling interest 641 636 1,358 1,353 Net income attributable to Central Garden & Pet Company $ 32,248 $ 26,030 $ 74,569 $ 50,125 Depreciation and amortization: Pet segment $ 6,794 6,700 $ 18,798 $ 16,120 Garden segment 1,651 1,542 4,686 4,586 Corporate 2,585 2,842 7,890 8,580 Total depreciation and amortization $ 11,030 $ 11,084 $ 31,374 $ 29,286 June 24, June 25, September 24, Assets: Pet segment $ 622,567 $ 523,281 $ 508,879 Garden segment 368,365 327,768 304,901 Corporate 360,815 365,858 398,413 Total assets $ 1,351,747 $ 1,216,907 $ 1,212,193 Goodwill (included in corporate assets above): Pet segment $ 224,912 $ 229,713 $ 225,912 Garden segment 5,473 3,298 5,473 Total goodwill $ 230,385 $ 233,011 $ 231,385 |
Consolidating Condensed Finan28
Consolidating Condensed Financial Information of Guarantor Subsidiaries (Tables) | 9 Months Ended |
Jun. 24, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Consolidating Condensed Statement of Operations | CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 184,719 $ 29,067 $ 387,333 $ (26,527 ) $ 574,592 Cost of goods sold and occupancy 142,533 20,636 252,678 (24,528 ) 391,319 Gross profit 42,186 8,431 134,655 (1,999 ) 183,273 Selling, general and administrative expenses 39,234 5,476 82,629 (1,999 ) 125,340 Operating income 2,952 2,955 52,026 — 57,933 Interest expense (7,213 ) (54 ) (6 ) — (7,273 ) Interest income 53 — — — 53 Other income 1,064 86 476 — 1,626 Income (loss) before taxes and equity in earnings of affiliates (3,144 ) 2,987 52,496 — 52,339 Income tax expense (benefit) (1,178 ) 1,096 19,532 — 19,450 Equity in earnings of affiliates 34,214 — 1,302 (35,516 ) — Net income including noncontrolling interest 32,248 1,891 34,266 (35,516 ) 32,889 Net income attributable to noncontrolling interest — 641 — — 641 Net income attributable to Central Garden & Pet Company $ 32,248 $ 1,250 $ 34,266 $ (35,516 ) $ 32,248 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 162,751 $ 28,052 $ 350,013 $ (26,272 ) $ 514,544 Cost of goods sold and occupancy 128,517 18,274 228,343 (24,335 ) 350,799 Gross profit 34,234 9,778 121,670 (1,937 ) 163,745 Selling, general and administrative expenses 36,826 5,380 75,291 (1,937 ) 115,560 Operating income (loss) (2,592 ) 4,398 46,379 — 48,185 Interest expense (6,904 ) (53 ) (7 ) — (6,964 ) Interest income 42 1 — — 43 Other income (expense) (108 ) (146 ) 572 — 318 Income (loss) before taxes and equity in earnings of affiliates (9,562 ) 4,200 46,944 — 41,582 Income tax expense (benefit) (3,517 ) 1,552 16,881 — 14,916 Equity in earnings of affiliates 32,075 — 2,148 (34,223 ) — Net income including noncontrolling interest 26,030 2,648 32,211 (34,223 ) 26,666 Net income attributable to noncontrolling interest — 636 — — 636 Net income attributable to Central Garden & Pet Company $ 26,030 $ 2,012 $ 32,211 $ (34,223 ) $ 26,030 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Nine Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 531,028 $ 69,183 $ 1,032,444 $ (68,641 ) $ 1,564,014 Cost of goods sold and occupancy 409,262 52,442 678,798 (63,968 ) 1,076,534 Gross profit 121,766 16,741 353,646 (4,673 ) 487,480 Selling, general and administrative expenses 114,546 14,014 221,862 (4,673 ) 345,749 Operating income 7,220 2,727 131,784 — 141,731 Interest expense (20,823 ) (136 ) (17 ) — (20,976 ) Interest income 98 1 — — 99 Other income (expense) (276 ) (301 ) 271 — (306 ) Income (loss) before taxes and equity in earnings of affiliates (13,781 ) 2,291 132,038 — 120,548 Income tax expense (benefit) (5,088 ) 1,133 48,576 — 44,621 Equity in earnings of affiliates 83,262 — 875 (84,137 ) — Net income including noncontrolling interest 74,569 1,158 84,337 (84,137 ) 75,927 Net income attributable to noncontrolling interest — 1,358 — — 1,358 Net income (loss) attributable to Central Garden & Pet Company $ 74,569 $ (200 ) $ 84,337 $ (84,137 ) $ 74,569 CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Nine Months Ended June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net sales $ 456,568 $ 73,324 $ 953,925 $ (68,212 ) $ 1,415,605 Cost of goods sold and occupancy 360,745 54,319 631,251 (63,580 ) 982,735 Gross profit 95,823 19,005 322,674 (4,632 ) 432,870 Selling, general and administrative expenses 102,990 14,283 203,868 (4,632 ) 316,509 Operating income (loss) (7,167 ) 4,722 118,806 — 116,361 Interest expense (36,065 ) (133 ) (7 ) — (36,205 ) Interest income 71 3 — — 74 Other income (expense) (286 ) (409 ) 452 — (243 ) Income (loss) before taxes and equity in earnings of affiliates (43,447 ) 4,183 119,251 — 79,987 Income tax expense (benefit) (15,437 ) 1,749 42,197 — 28,509 Equity in earnings of affiliates 78,135 — 1,971 (80,106 ) — Net income including noncontrolling interest 50,125 2,434 79,025 (80,106 ) 51,478 Net income attributable to noncontrolling interest — 1,353 — — 1,353 Net income attributable to Central Garden & Pet Company $ 50,125 $ 1,081 $ 79,025 $ (80,106 ) $ 50,125 |
Consolidating Condensed Statements of Comprehensive Income (Loss) | CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income $ 32,248 $ 1,891 $ 34,266 $ (35,516 ) $ 32,889 Other comprehensive income: Foreign currency translation 172 116 19 (135 ) 172 Total comprehensive income 32,420 2,007 34,285 (35,651 ) 33,061 Comprehensive income attributable to noncontrolling interests — 641 — — 641 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 32,420 $ 1,366 $ 34,285 $ (35,651 ) $ 32,420 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 26,030 $ 2,648 $ 32,211 $ (34,223 ) $ 26,666 Other comprehensive income (loss): Foreign currency translation (277 ) (233 ) 25 208 (277 ) Total comprehensive income 25,753 2,415 32,236 (34,015 ) 26,389 Comprehensive loss attributable to noncontrolling interests — 636 — — 636 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 25,753 $ 1,779 $ 32,236 $ (34,015 ) $ 25,753 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Nine Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 74,569 $ 1,158 $ 84,337 $ (84,137 ) $ 75,927 Other comprehensive loss: Foreign currency translation (193 ) (144 ) (11 ) 155 (193 ) Total comprehensive income (loss) 74,376 1,014 84,326 (83,982 ) 75,734 Comprehensive income attributable to noncontrolling interests — 1,358 — — 1,358 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 74,376 $ (344 ) $ 84,326 $ (83,982 ) $ 74,376 CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Nine Months Ended June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 50,125 $ 2,434 $ 79,025 $ (80,106 ) $ 51,478 Other comprehensive income (loss): Foreign currency translation (969 ) (773 ) 32 741 (969 ) Total comprehensive income (loss) 49,156 1,661 79,057 (79,365 ) 50,509 Comprehensive income attributable to noncontrolling interests — 1,353 — — 1,353 Comprehensive income (loss) attributable to Central Garden & Pet Company $ 49,156 $ 308 $ 79,057 $ (79,365 ) $ 49,156 |
Consolidating Condensed Balance Sheet | CONSOLIDATING CONDENSED BALANCE SHEET June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 929 $ 10,118 $ 3,426 $ — $ 14,473 Restricted cash 10,999 — — — 10,999 Accounts receivable, net 92,703 9,842 176,959 — 279,504 Inventories 127,307 10,567 245,575 — 383,449 Prepaid expenses and other 19,670 1,059 31,235 — 51,964 Total current assets 251,608 31,586 457,195 — 740,389 Land, buildings, improvements and equipment, net 37,823 4,065 135,896 — 177,784 Goodwill 15,058 — 215,327 — 230,385 Other long-term assets 34,273 3,200 167,858 (2,142 ) 203,189 Intercompany receivable 36,783 — 601,317 (638,100 ) — Investment in subsidiaries 1,369,307 — — (1,369,307 ) — Total $ 1,744,852 $ 38,851 $ 1,577,593 $ (2,009,549 ) $ 1,351,747 LIABILITIES AND EQUITY Accounts payable $ 34,562 $ 7,832 $ 64,014 $ — $ 106,408 Accrued expenses 57,235 2,632 52,224 — 112,091 Current portion of long-term debt — — 375 — 375 Total current liabilities 91,797 10,464 116,613 — 218,874 Long-term debt 434,962 — 112 — 435,074 Intercompany payable 588,378 49,722 (638,100 ) — Losses in excess of investment in subsidiaries — — 19,327 (19,327 ) — Other long-term obligations 2,620 — 68,314 (2,142 ) 68,792 Total Central Garden & Pet shareholders’ equity (deficit) 627,095 (23,247 ) 1,373,227 (1,349,980 ) 627,095 Noncontrolling interest — 1,912 — — 1,912 Total equity (deficit) 627,095 (21,335 ) 1,373,227 (1,349,980 ) 629,007 Total $ 1,744,852 $ 38,851 $ 1,577,593 $ (2,009,549 ) $ 1,351,747 CONSOLIDATING CONDENSED BALANCE SHEET June 25, 2016 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ 30,477 $ 8,675 $ 848 $ — $ 40,000 Restricted cash 12,029 — — — 12,029 Accounts receivable, net 74,162 9,395 158,397 — 241,954 Inventories 105,440 9,037 247,336 — 361,813 Prepaid expenses and other 20,543 1,039 23,493 — 45,075 Total current assets 242,651 28,146 430,074 — 700,871 Land, buildings, improvements and equipment, net 43,475 3,877 112,078 — 159,430 Goodwill 18,858 — 214,153 — 233,011 Other long-term assets 37,139 3,294 84,702 (1,540 ) 123,595 Intercompany receivable 31,005 — 478,780 (509,785 ) — Investment in subsidiaries 1,130,148 — — (1,130,148 ) — Total $ 1,503,276 $ 35,317 $ 1,319,787 $ (1,641,473 ) $ 1,216,907 LIABILITIES AND EQUITY Accounts payable $ 26,818 $ 6,210 $ 63,878 $ — $ 96,906 Accrued expenses 48,981 2,290 51,682 — 102,953 Current portion of long-term debt 154 — 376 — 530 Total current liabilities 75,953 8,500 115,936 — 200,389 Long-term debt 394,164 — 439 — 394,603 Intercompany payable 468,039 41,746 — (509,785 ) — Losses in excess of investment in subsidiaries — — 14,780 (14,780 ) — Other long-term obligations 9,036 — 56,479 (1,540 ) 63,975 Total Central Garden & Pet shareholders’ equity (deficit) 556,084 (16,785 ) 1,132,153 (1,115,368 ) 556,084 Noncontrolling interest — 1,856 — — 1,856 Total equity (deficit) 556,084 (14,929 ) 1,132,153 (1,115,368 ) 557,940 Total $ 1,503,276 $ 35,317 $ 1,319,787 $ (1,641,473 ) $ 1,216,907 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 Nine Months Ended June 24, 2017 (in thousands) Parent Non- Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash provided (used) by operating activities $ (14,968 ) $ 2,482 $ 59,210 $ (4,076 ) $ 42,648 Additions to property and equipment (6,811 ) (557 ) (29,719 ) (37,087 ) Payments to acquire companies, net of cash acquired (106,821 ) — — (106,821 ) Proceeds from sale of business, facility and other assets — — 8,301 — 8,301 Change in restricted cash and cash equivalents (89 ) — — (89 ) Investment in equity method investee (11,495 ) — — (11,495 ) Other investing activities (2,735 ) — — — (2,735 ) Intercompany investing activities (4,005 ) — (33,943 ) 37,948 — Net cash used by investing activities (131,956 ) (557 ) (55,361 ) 37,948 (149,926 ) Repayments on revolving line of credit (416,000 ) — — — (416,000 ) Borrowings under revolving line of credit 456,000 — — — 456,000 Repayments under long-term debt (88 ) — (368 ) — (456 ) Excess tax benefits from stock-based awards 17,205 — — — 17,205 Repurchase of common stock (25,654 ) — — — (25,654 ) Distribution to parent (4,076 ) — 4,076 — Distribution to noncontrolling interest (1,019 ) — — (1,019 ) Payment of contingent consideration liability — (1,222 ) — (1,222 ) Intercompany financing activities 34,414 3,534 (37,948 ) — Net cash provided (used) by financing activities 65,877 (1,561 ) (1,590 ) (33,872 ) 28,854 Effect of exchange rate changes on cash and cash equivalents (182 ) 59 38 — (85 ) Net decrease in cash and cash equivalents (81,229 ) 423 2,297 — (78,509 ) Cash and cash equivalents at beginning of period 82,158 9,695 1,129 — 92,982 Cash and cash equivalents at end of period $ 929 $ 10,118 $ 3,426 $ — $ 14,473 CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Nine Months Ended June 25, 2016 (in thousands) Parent Non-Guarantor Subsidiaries Guarantor Subsidiaries Eliminations Consolidated Net cash used by operating activities $ 4,127 $ 6,082 $ 84,258 $ (4,884 ) $ 89,583 Additions to property, plant and equipment (1,876 ) (577 ) (17,033 ) — (19,486 ) Payments to acquire companies, net of cash acquired (60,916 ) — (7,985 ) — (68,901 ) Change in restricted cash and cash equivalents 1,129 — — — 1,129 Proceeds from sale of plant assets 3,899 3,899 Other investing activities (550 ) (550 ) Intercompany investing activities 1,689 — (63,778 ) 62,089 — Net cash provided (used) by investing activities (60,524 ) (577 ) (84,897 ) 62,089 (83,909 ) Repayments of long-term debt (400,208 ) — (22 ) — (400,230 ) Borrowings under revolving line of credit 419,000 — — — 419,000 Repayments under revolving line of credit (419,000 ) — — — (419,000 ) Issuance of long-term debt 400,000 — — — 400,000 Excess tax benefits from stock-based awards 4,726 — — — 4,726 Repurchase of common stock (9,429 ) — (9,429 ) Proceeds from issuance of common stock 280 — — — 280 Distribution to parent — (4,884 ) — 4,884 — Distribution to noncontrolling interest (592 ) (592 ) Payment of financing costs (7,560 ) — (7,560 ) Intercompany financing activities 63,786 (1,697 ) — (62,089 ) — Net cash provided (used) by financing activities 51,595 (7,173 ) (22 ) (57,205 ) (12,805 ) Effect of exchange rates on cash (1,001 ) 321 227 — (453 ) Net increase (decrease) in cash and cash equivalents (5,803 ) (1,347 ) (434 ) — (7,584 ) Cash and cash equivalents at beginning of year 36,280 10,022 1,282 — 47,584 Cash and cash equivalents at end of year $ 30,477 $ 8,675 $ 848 $ — $ 40,000 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Restricted cash | $ 10,999 | $ 10,910 | $ 12,029 |
Net current deferred tax assets | $ 30,400 | $ 31,500 | $ 29,700 |
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 | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 |
Liabilities: | |||
Total liabilities | $ 4,095 | $ 5,113 | $ 6,355 |
Liability for contingent consideration | |||
Liabilities: | |||
Total liabilities | 4,095 | 5,113 | 6,355 |
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 | 4,095 | 5,113 | 6,355 |
Level 3 | Liability for contingent consideration | |||
Liabilities: | |||
Total liabilities | $ 4,095 | $ 5,113 | $ 6,355 |
Fair Value Measurements - Sum31
Fair Value Measurements - Summary of Changes in Fair Value of Level 3 Financial Instruments (Details) - Level 3 - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 24, 2017 | Jun. 25, 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 | 204 | 140 |
Performance-based payments | (1,222) | |
Ending balance | $ 4,095 | $ 6,355 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Nov. 30, 2015 | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying value of senior subordinated notes | $ 435,449,000 | $ 395,269,000 | $ 395,133,000 | |
Senior notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying value of senior subordinated notes | 394,961,000 | 394,365,000 | 394,166,000 | |
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 | 430,500,000 | 430,300,000 | 417,000,000 | |
Carrying value of senior subordinated notes | $ 395,000,000 | $ 394,400,000 | $ 394,200,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | Apr. 28, 2017 | Oct. 24, 2016 | Jun. 24, 2017 |
K&H Manufacturing | |||
Business Acquisition [Line Items] | |||
Business combination, purchase price | $ 48 | ||
Purchase price exceeded the estimated fair value of assets acquired | $ 41.8 | ||
Segrest Inc. | |||
Business Acquisition [Line Items] | |||
Business combination, purchase price | $ 60 | ||
Purchase price exceeded the estimated fair value of assets acquired | $ 47.7 | ||
Contingent payments established at the time of acquisition | $ 6 |
Inventories, net - Summary of I
Inventories, net - Summary of Inventories, Net of Allowance for Obsolescence (Details) - USD ($) $ in Thousands | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 118,097 | $ 120,786 | $ 110,095 |
Work in progress | 16,573 | 17,378 | 16,604 |
Finished goods | 243,053 | 217,788 | 225,814 |
Supplies | 5,726 | 6,052 | 9,300 |
Total inventories, net | $ 383,449 | $ 362,004 | $ 361,813 |
Other Intangible Assets - Compo
Other Intangible Assets - Components of Gross and Net Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | $ 170,500 | $ 172,100 | $ 168,600 |
Accumulated Amortization | (53,300) | (49,000) | (48,100) |
Accumulated Impairment | (27,200) | (27,200) | (25,400) |
Net Carrying Value | 90,004 | 95,865 | 95,070 |
Marketing-related intangible assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 77,600 | 77,900 | 77,900 |
Accumulated Amortization | (11,900) | (11,300) | (11,100) |
Accumulated Impairment | (26,000) | (26,000) | (24,200) |
Net Carrying Value | 39,700 | 40,600 | 42,600 |
Other acquired intangible assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 28,600 | 28,600 | 28,600 |
Accumulated Amortization | (12,400) | (11,600) | (11,200) |
Accumulated Impairment | (1,200) | (1,200) | (1,200) |
Net Carrying Value | 15,000 | 15,800 | 16,200 |
Amortizable | Marketing-related intangible assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 14,900 | 14,900 | 14,900 |
Accumulated Amortization | (11,900) | (11,300) | (11,100) |
Accumulated Impairment | 0 | 0 | 0 |
Net Carrying Value | 3,000 | 3,600 | 3,800 |
Amortizable | Customer-related intangible assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 64,300 | 65,600 | 62,100 |
Accumulated Amortization | (29,000) | (26,100) | (25,800) |
Accumulated Impairment | 0 | 0 | 0 |
Net Carrying Value | 35,300 | 39,500 | 36,300 |
Amortizable | Other acquired intangible assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 20,800 | 20,800 | 20,800 |
Accumulated Amortization | (12,400) | (11,600) | (11,200) |
Accumulated Impairment | 0 | 0 | 0 |
Net Carrying Value | 8,400 | 9,200 | 9,600 |
Nonamortizable | Marketing-related intangible assets | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross | 62,700 | 63,000 | 63,000 |
Accumulated Amortization | 0 | 0 | 0 |
Accumulated Impairment | (26,000) | (26,000) | (24,200) |
Net Carrying Value | 36,700 | 37,000 | 38,800 |
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 | 9 Months Ended | |||
Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 | Jun. 24, 2017 | Jun. 25, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets, impairment charge | $ 1.8 | ||||
Amortization expense for intangibles | $ 1.4 | $ 2.7 | $ 4.3 | $ 4.9 | |
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 ($) | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 | Nov. 09, 2015 |
Debt Instrument [Line Items] | ||||
Total | $ 435,449,000 | $ 395,269,000 | $ 395,133,000 | |
Less current portion | (375,000) | (463,000) | (530,000) | |
Long-term portion | 435,074,000 | 394,806,000 | 394,603,000 | |
Senior notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | (5,039,000) | (5,635,000) | (5,834,000) | |
Total | 394,961,000 | 394,365,000 | 394,166,000 | |
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, 2021 | ||||
Debt Instrument [Line Items] | ||||
Total | 40,000,000 | 0 | 0 | |
Other notes payable | ||||
Debt Instrument [Line Items] | ||||
Total | $ 488,000 | $ 904,000 | $ 967,000 |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt (Phantom) (Details) | 3 Months Ended | 9 Months Ended | |
Jun. 24, 2017 | Jun. 24, 2017 | Nov. 09, 2015 | |
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 | ||
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% | ||
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% | ||
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% | ||
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% | ||
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% | ||
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 ($) | Dec. 26, 2015 | Nov. 09, 2015USD ($) | Jun. 24, 2017USD ($) | Jun. 25, 2016USD ($) | Jun. 24, 2017USD ($) | Jun. 25, 2016USD ($) | Sep. 24, 2016USD ($) | Dec. 31, 2015USD ($) |
Components of long-term debt | |||||||||
Interest expense | $ 7,273,000 | $ 6,964,000 | $ 20,976,000 | $ 36,205,000 | |||||
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 | 2.30% | 2.30% | |||||||
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 | 4.50% | 4.50% | |||||||
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 | $ 1,200,000 | |||||||
Credit facility, maximum principal amount | $ 400,000,000 | ||||||||
Credit facility, additional borrowings available | $ 200,000,000 | ||||||||
Line of credit outstanding borrowings | 40,000,000 | 40,000,000 | |||||||
Credit facility, available capacity | 360,000,000 | 360,000,000 | |||||||
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 Informati40
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 | 9 Months Ended | ||
Jun. 24, 2017 | Jun. 25, 2016 | Jun. 24, 2017 | Jun. 25, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 554,587 | $ 506,380 | ||
Comprehensive income | $ 33,061 | $ 26,389 | 75,734 | 50,509 |
Amortization of share-based awards | 6,377 | 4,796 | ||
Restricted share activity, including net share settlement | (7,492) | (1,229) | ||
Issuance of common stock, including net share settlement of stock options | (16,350) | (6,647) | ||
Tax benefit on stock option exercise, net of tax deficiency | 17,170 | 4,722 | ||
Distribution to Noncontrolling interest | (1,019) | (592) | ||
Other | 1 | |||
Ending balance | 629,007 | 557,940 | 629,007 | 557,940 |
Total | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 553,014 | 505,286 | ||
Comprehensive income | 74,376 | 49,156 | ||
Amortization of share-based awards | 6,377 | 4,796 | ||
Restricted share activity, including net share settlement | (7,492) | (1,229) | ||
Issuance of common stock, including net share settlement of stock options | (16,350) | (6,647) | ||
Tax benefit on stock option exercise, net of tax deficiency | 17,170 | 4,722 | ||
Ending balance | 627,095 | 556,084 | 627,095 | 556,084 |
Additional Paid In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 393,297 | 388,636 | ||
Amortization of share-based awards | 6,377 | 4,796 | ||
Restricted share activity, including net share settlement | (7,491) | (1,230) | ||
Issuance of common stock, including net share settlement of stock options | (16,358) | (6,654) | ||
Tax benefit on stock option exercise, net of tax deficiency | 17,170 | 4,722 | ||
Ending balance | 392,995 | 390,270 | 392,995 | 390,270 |
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 160,501 | 115,987 | ||
Comprehensive income | 74,569 | 50,125 | ||
Ending balance | 235,070 | 166,112 | 235,070 | 166,112 |
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (1,294) | 164 | ||
Comprehensive income | (193) | (969) | ||
Ending balance | (1,487) | (805) | (1,487) | (805) |
Noncontrolling Interest | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 1,573 | 1,094 | ||
Comprehensive income | 1,358 | 1,353 | ||
Distribution to Noncontrolling interest | (1,019) | (592) | ||
Other | 1 | |||
Ending balance | 1,912 | 1,856 | 1,912 | 1,856 |
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 | 1 | ||
Ending balance | 122 | 120 | 122 | 120 |
Class A Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 374 | 364 | ||
Restricted share activity, including net share settlement | (1) | 1 | ||
Issuance of common stock, including net share settlement of stock options | 6 | 6 | ||
Ending balance | 379 | 371 | 379 | 371 |
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 | 9 Months Ended | |
Jun. 24, 2017 | Jun. 25, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Tax benefit associated with share-based compensation expense | $ 3 | $ 2.2 |
Selling, general and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 8.2 | $ 6.1 |
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 | 9 Months Ended | ||
Jun. 24, 2017 | Jun. 25, 2016 | Jun. 24, 2017 | Jun. 25, 2016 | |
Basic EPS: | ||||
Net income available to common shareholders | $ 32,248 | $ 26,030 | $ 74,569 | $ 50,125 |
Weighted average shares, basic | 50,507 | 49,120 | 50,084 | 48,801 |
Earnings per share, basic (in dollars per share) | $ 0.64 | $ 0.53 | $ 1.49 | $ 1.03 |
Diluted EPS | ||||
Net income available to common shareholders | $ 32,248 | $ 26,030 | $ 74,569 | $ 50,125 |
Weighted average shares, diluted | 51,825 | 51,063 | 51,769 | 50,743 |
Earnings per share, diluted (in dollars per share) | $ 0.62 | $ 0.51 | $ 1.44 | $ 0.99 |
Options to purchase common stock | ||||
Effect of dilutive securities: | ||||
Effective of dilutive securities (in shares) | 810 | 1,211 | 1,080 | 1,201 |
Effect of dilutive securities (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.03) |
Restricted shares | ||||
Effect of dilutive securities: | ||||
Effective of dilutive securities (in shares) | 508 | 732 | 605 | 741 |
Effect of dilutive securities (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.01) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - $ / shares shares in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 24, 2017 | Jun. 24, 2017 | Jun. 25, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of options to purchase common stock outstanding (in shares) | 2.7 | 2.7 | 4.5 |
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) | 0.6 | 0.6 | |
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) | $ 31.76 | $ 31.76 | $ 15.56 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Jun. 24, 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 | 9 Months Ended | |||
Jun. 24, 2017 | Jun. 25, 2016 | Jun. 24, 2017 | Jun. 25, 2016 | Sep. 24, 2016 | |
Net sales: | |||||
Total net sales | $ 574,592 | $ 514,544 | $ 1,564,014 | $ 1,415,605 | |
Operating income: | |||||
Total income from operations | 57,933 | 48,185 | 141,731 | 116,361 | |
Interest expense - net | (7,220) | (6,921) | (20,877) | (36,131) | |
Other income (expense) | 1,626 | 318 | (306) | (243) | |
Income tax expense | 19,450 | 14,916 | 44,621 | 28,509 | |
Income including noncontrolling interest | 32,889 | 26,666 | 75,927 | 51,478 | |
Net income attributable to noncontrolling interest | 641 | 636 | 1,358 | 1,353 | |
Net income attributable to Central Garden & Pet Company | 32,248 | 26,030 | 74,569 | 50,125 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 11,030 | 11,084 | 31,374 | 29,286 | |
Assets: | |||||
Assets | 1,351,747 | 1,216,907 | 1,351,747 | 1,216,907 | $ 1,212,193 |
Goodwill (included in corporate assets above): | |||||
Goodwill | 230,385 | 233,011 | 230,385 | 233,011 | 231,385 |
Operating segments | Pet segment | |||||
Net sales: | |||||
Total net sales | 313,437 | 287,213 | 915,876 | 811,203 | |
Operating income: | |||||
Total income from operations | 36,092 | 38,759 | 104,143 | 97,363 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 6,794 | 6,700 | 18,798 | 16,120 | |
Assets: | |||||
Assets | 622,567 | 523,281 | 622,567 | 523,281 | 508,879 |
Goodwill (included in corporate assets above): | |||||
Goodwill | 224,912 | 229,713 | 224,912 | 229,713 | 225,912 |
Operating segments | Garden segment | |||||
Net sales: | |||||
Total net sales | 261,155 | 227,331 | 648,138 | 604,402 | |
Operating income: | |||||
Total income from operations | 38,369 | 26,452 | 87,050 | 67,605 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 1,651 | 1,542 | 4,686 | 4,586 | |
Assets: | |||||
Assets | 368,365 | 327,768 | 368,365 | 327,768 | 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 | (16,528) | (17,026) | (49,462) | (48,607) | |
Depreciation and amortization: | |||||
Depreciation and amortization | 2,585 | 2,842 | 7,890 | 8,580 | |
Assets: | |||||
Assets | $ 360,815 | $ 365,858 | $ 360,815 | $ 365,858 | $ 398,413 |
Consolidating Condensed Finan46
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Narrative (Details) | 9 Months Ended |
Jun. 24, 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 Finan47
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Consolidating Condensed Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2017 | Jun. 25, 2016 | Jun. 24, 2017 | Jun. 25, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | $ 574,592 | $ 514,544 | $ 1,564,014 | $ 1,415,605 |
Cost of goods sold and occupancy | 391,319 | 350,799 | 1,076,534 | 982,735 |
Gross profit | 183,273 | 163,745 | 487,480 | 432,870 |
Selling, general and administrative expenses | 125,340 | 115,560 | 345,749 | 316,509 |
Operating income | 57,933 | 48,185 | 141,731 | 116,361 |
Interest expense | (7,273) | (6,964) | (20,976) | (36,205) |
Interest income | 53 | 43 | 99 | 74 |
Other income (expense) | 1,626 | 318 | (306) | (243) |
Income before income taxes and noncontrolling interest | 52,339 | 41,582 | 120,548 | 79,987 |
Income tax expense (benefit) | 19,450 | 14,916 | 44,621 | 28,509 |
Equity in earnings of affiliates | 0 | 0 | 0 | 0 |
Income including noncontrolling interest | 32,889 | 26,666 | 75,927 | 51,478 |
Net income attributable to noncontrolling interest | 641 | 636 | 1,358 | 1,353 |
Net income attributable to Central Garden & Pet Company | 32,248 | 26,030 | 74,569 | 50,125 |
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 184,719 | 162,751 | 531,028 | 456,568 |
Cost of goods sold and occupancy | 142,533 | 128,517 | 409,262 | 360,745 |
Gross profit | 42,186 | 34,234 | 121,766 | 95,823 |
Selling, general and administrative expenses | 39,234 | 36,826 | 114,546 | 102,990 |
Operating income | 2,952 | (2,592) | 7,220 | (7,167) |
Interest expense | (7,213) | (6,904) | (20,823) | (36,065) |
Interest income | 53 | 42 | 98 | 71 |
Other income (expense) | 1,064 | (108) | (276) | (286) |
Income before income taxes and noncontrolling interest | (3,144) | (9,562) | (13,781) | (43,447) |
Income tax expense (benefit) | (1,178) | (3,517) | (5,088) | (15,437) |
Equity in earnings of affiliates | 34,214 | 32,075 | 83,262 | 78,135 |
Income including noncontrolling interest | 32,248 | 26,030 | 74,569 | 50,125 |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Central Garden & Pet Company | 32,248 | 26,030 | 74,569 | 50,125 |
Non- Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 29,067 | 28,052 | 69,183 | 73,324 |
Cost of goods sold and occupancy | 20,636 | 18,274 | 52,442 | 54,319 |
Gross profit | 8,431 | 9,778 | 16,741 | 19,005 |
Selling, general and administrative expenses | 5,476 | 5,380 | 14,014 | 14,283 |
Operating income | 2,955 | 4,398 | 2,727 | 4,722 |
Interest expense | (54) | (53) | (136) | (133) |
Interest income | 0 | 1 | 1 | 3 |
Other income (expense) | 86 | (146) | (301) | (409) |
Income before income taxes and noncontrolling interest | 2,987 | 4,200 | 2,291 | 4,183 |
Income tax expense (benefit) | 1,096 | 1,552 | 1,133 | 1,749 |
Equity in earnings of affiliates | 0 | 0 | 0 | 0 |
Income including noncontrolling interest | 1,891 | 2,648 | 1,158 | 2,434 |
Net income attributable to noncontrolling interest | 641 | 636 | 1,358 | 1,353 |
Net income attributable to Central Garden & Pet Company | 1,250 | 2,012 | (200) | 1,081 |
Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 387,333 | 350,013 | 1,032,444 | 953,925 |
Cost of goods sold and occupancy | 252,678 | 228,343 | 678,798 | 631,251 |
Gross profit | 134,655 | 121,670 | 353,646 | 322,674 |
Selling, general and administrative expenses | 82,629 | 75,291 | 221,862 | 203,868 |
Operating income | 52,026 | 46,379 | 131,784 | 118,806 |
Interest expense | (6) | (7) | (17) | (7) |
Interest income | 0 | 0 | 0 | 0 |
Other income (expense) | 476 | 572 | 271 | 452 |
Income before income taxes and noncontrolling interest | 52,496 | 46,944 | 132,038 | 119,251 |
Income tax expense (benefit) | 19,532 | 16,881 | 48,576 | 42,197 |
Equity in earnings of affiliates | 1,302 | 2,148 | 875 | 1,971 |
Income including noncontrolling interest | 34,266 | 32,211 | 84,337 | 79,025 |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Central Garden & Pet Company | 34,266 | 32,211 | 84,337 | 79,025 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | (26,527) | (26,272) | (68,641) | (68,212) |
Cost of goods sold and occupancy | (24,528) | (24,335) | (63,968) | (63,580) |
Gross profit | (1,999) | (1,937) | (4,673) | (4,632) |
Selling, general and administrative expenses | (1,999) | (1,937) | (4,673) | (4,632) |
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 | (35,516) | (34,223) | (84,137) | (80,106) |
Income including noncontrolling interest | (35,516) | (34,223) | (84,137) | (80,106) |
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Central Garden & Pet Company | $ (35,516) | $ (34,223) | $ (84,137) | $ (80,106) |
Consolidating Condensed Finan48
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Consolidating Condensed Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2017 | Jun. 25, 2016 | Jun. 24, 2017 | Jun. 25, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | $ 32,889 | $ 26,666 | $ 75,927 | $ 51,478 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 172 | (277) | (193) | (969) |
Total comprehensive income | 33,061 | 26,389 | 75,734 | 50,509 |
Comprehensive income attributable to noncontrolling interests | 641 | 636 | 1,358 | 1,353 |
Comprehensive income attributable to Central Garden & Pet Company | 32,420 | 25,753 | 74,376 | 49,156 |
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 32,248 | 26,030 | 74,569 | 50,125 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 172 | (277) | (193) | (969) |
Total comprehensive income | 32,420 | 25,753 | 74,376 | 49,156 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Central Garden & Pet Company | 32,420 | 25,753 | 74,376 | 49,156 |
Non- Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 1,891 | 2,648 | 1,158 | 2,434 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 116 | (233) | (144) | (773) |
Total comprehensive income | 2,007 | 2,415 | 1,014 | 1,661 |
Comprehensive income attributable to noncontrolling interests | 641 | 636 | 1,358 | 1,353 |
Comprehensive income attributable to Central Garden & Pet Company | 1,366 | 1,779 | (344) | 308 |
Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 34,266 | 32,211 | 84,337 | 79,025 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 19 | 25 | (11) | 32 |
Total comprehensive income | 34,285 | 32,236 | 84,326 | 79,057 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Central Garden & Pet Company | 34,285 | 32,236 | 84,326 | 79,057 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | (35,516) | (34,223) | (84,137) | (80,106) |
Other comprehensive income (loss): | ||||
Foreign currency translation | (135) | 208 | 155 | 741 |
Total comprehensive income | (35,651) | (34,015) | (83,982) | (79,365) |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Central Garden & Pet Company | $ (35,651) | $ (34,015) | $ (83,982) | $ (79,365) |
Consolidating Condensed Finan49
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Consolidating Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 24, 2017 | Sep. 24, 2016 | Jun. 25, 2016 | Sep. 26, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 14,473 | $ 92,982 | $ 40,000 | $ 47,584 |
Restricted cash | 10,999 | 10,910 | 12,029 | |
Accounts receivable, net | 279,504 | 201,151 | 241,954 | |
Inventories | 383,449 | 362,004 | 361,813 | |
Prepaid expenses and other | 51,964 | 47,759 | 45,075 | |
Total current assets | 740,389 | 714,806 | 700,871 | |
Land, buildings, improvements and equipment, net | 177,784 | 158,224 | 159,430 | |
Goodwill | 230,385 | 231,385 | 233,011 | |
Other long-term assets | 203,189 | 107,778 | 123,595 | |
Intercompany receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total | 1,351,747 | 1,212,193 | 1,216,907 | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 106,408 | 102,413 | 96,906 | |
Accrued expenses | 112,091 | 99,343 | 102,953 | |
Current portion of long-term debt | 375 | 463 | 530 | |
Total current liabilities | 218,874 | 202,219 | 200,389 | |
Long-term debt | 435,074 | 394,806 | 394,603 | |
Intercompany payable | 0 | 0 | 0 | |
Losses in excess of investment in subsidiaries | 0 | 0 | 0 | |
Other long-term obligations | 68,792 | 60,581 | 63,975 | |
Total Central Garden & Pet shareholders’ equity (deficit) | 627,095 | 553,014 | 556,084 | |
Noncontrolling interest | 1,912 | 1,573 | 1,856 | |
Total equity (deficit) | 629,007 | 554,587 | 557,940 | 506,380 |
Total | 1,351,747 | 1,212,193 | 1,216,907 | |
Parent | ||||
ASSETS | ||||
Cash and cash equivalents | 929 | 82,158 | 30,477 | 36,280 |
Restricted cash | 10,999 | 10,910 | 12,029 | |
Accounts receivable, net | 92,703 | 59,617 | 74,162 | |
Inventories | 127,307 | 113,317 | 105,440 | |
Prepaid expenses and other | 19,670 | 20,978 | 20,543 | |
Total current assets | 251,608 | 286,980 | 242,651 | |
Land, buildings, improvements and equipment, net | 37,823 | 41,083 | 43,475 | |
Goodwill | 15,058 | 15,058 | 18,858 | |
Other long-term assets | 34,273 | 30,555 | 37,139 | |
Intercompany receivable | 36,783 | 32,778 | 31,005 | |
Investment in subsidiaries | 1,369,307 | 1,176,990 | 1,130,148 | |
Total | 1,744,852 | 1,583,444 | 1,503,276 | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 34,562 | 34,096 | 26,818 | |
Accrued expenses | 57,235 | 47,862 | 48,981 | |
Current portion of long-term debt | 0 | 88 | 154 | |
Total current liabilities | 91,797 | 82,046 | 75,953 | |
Long-term debt | 434,962 | 394,364 | 394,164 | |
Intercompany payable | 588,378 | 553,964 | 468,039 | |
Losses in excess of investment in subsidiaries | 0 | 0 | 0 | |
Other long-term obligations | 2,620 | 56 | 9,036 | |
Total Central Garden & Pet shareholders’ equity (deficit) | 627,095 | 553,014 | 556,084 | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity (deficit) | 627,095 | 553,014 | 556,084 | |
Total | 1,744,852 | 1,583,444 | 1,503,276 | |
Non- Guarantor Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 10,118 | 9,695 | 8,675 | 10,022 |
Restricted cash | 0 | 0 | 0 | |
Accounts receivable, net | 9,842 | 5,156 | 9,395 | |
Inventories | 10,567 | 11,752 | 9,037 | |
Prepaid expenses and other | 1,059 | 817 | 1,039 | |
Total current assets | 31,586 | 27,420 | 28,146 | |
Land, buildings, improvements and equipment, net | 4,065 | 3,897 | 3,877 | |
Goodwill | 0 | 0 | 0 | |
Other long-term assets | 3,200 | 2,980 | 3,294 | |
Intercompany receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total | 38,851 | 34,297 | 35,317 | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 7,832 | 3,953 | 6,210 | |
Accrued expenses | 2,632 | 1,410 | 2,290 | |
Current portion of long-term debt | 0 | 0 | 0 | |
Total current liabilities | 10,464 | 5,363 | 8,500 | |
Long-term debt | 0 | 0 | 0 | |
Intercompany payable | 49,722 | 46,188 | 41,746 | |
Losses in excess of investment in subsidiaries | 0 | 0 | 0 | |
Other long-term obligations | 0 | 0 | 0 | |
Total Central Garden & Pet shareholders’ equity (deficit) | (23,247) | (18,827) | (16,785) | |
Noncontrolling interest | 1,912 | 1,573 | 1,856 | |
Total equity (deficit) | (21,335) | (17,254) | (14,929) | |
Total | 38,851 | 34,297 | 35,317 | |
Guarantor Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 3,426 | 1,129 | 848 | 1,282 |
Restricted cash | 0 | 0 | 0 | |
Accounts receivable, net | 176,959 | 136,378 | 158,397 | |
Inventories | 245,575 | 236,935 | 247,336 | |
Prepaid expenses and other | 31,235 | 25,964 | 23,493 | |
Total current assets | 457,195 | 400,406 | 430,074 | |
Land, buildings, improvements and equipment, net | 135,896 | 113,244 | 112,078 | |
Goodwill | 215,327 | 216,327 | 214,153 | |
Other long-term assets | 167,858 | 85,701 | 84,702 | |
Intercompany receivable | 601,317 | 567,374 | 478,780 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total | 1,577,593 | 1,383,052 | 1,319,787 | |
LIABILITIES AND EQUITY | ||||
Accounts payable | 64,014 | 64,364 | 63,878 | |
Accrued expenses | 52,224 | 50,071 | 51,682 | |
Current portion of long-term debt | 375 | 375 | 376 | |
Total current liabilities | 116,613 | 114,810 | 115,936 | |
Long-term debt | 112 | 442 | 439 | |
Intercompany payable | 0 | 0 | ||
Losses in excess of investment in subsidiaries | 19,327 | 16,126 | 14,780 | |
Other long-term obligations | 68,314 | 71,983 | 56,479 | |
Total Central Garden & Pet shareholders’ equity (deficit) | 1,373,227 | 1,179,691 | 1,132,153 | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity (deficit) | 1,373,227 | 1,179,691 | 1,132,153 | |
Total | 1,577,593 | 1,383,052 | 1,319,787 | |
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 | (2,142) | (11,458) | (1,540) | |
Intercompany receivable | (638,100) | (600,152) | (509,785) | |
Investment in subsidiaries | (1,369,307) | (1,176,990) | (1,130,148) | |
Total | (2,009,549) | (1,788,600) | (1,641,473) | |
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 | (638,100) | (600,152) | (509,785) | |
Losses in excess of investment in subsidiaries | (19,327) | (16,126) | (14,780) | |
Other long-term obligations | (2,142) | (11,458) | (1,540) | |
Total Central Garden & Pet shareholders’ equity (deficit) | (1,349,980) | (1,160,864) | (1,115,368) | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity (deficit) | (1,349,980) | (1,160,864) | (1,115,368) | |
Total | $ (2,009,549) | $ (1,788,600) | $ (1,641,473) |
Consolidating Condensed Finan50
Consolidating Condensed Financial Information of Guarantor Subsidiaries - Consolidating Condensed Statement of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 24, 2017 | Jun. 25, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided (used) by operating activities | $ 42,648 | $ 89,583 |
Additions to property and equipment | (37,087) | (19,486) |
Payments to acquire companies, net of cash acquired | (106,821) | (68,901) |
Proceeds from sale of business, facility and other assets | 8,301 | 3,899 |
Change in restricted cash and cash equivalents | (89) | 1,129 |
Investment in equity method investee | (11,495) | 0 |
Other investing activities | (2,735) | (550) |
Intercompany investing activities | 0 | 0 |
Net cash used in investing activities | (149,926) | (83,909) |
Repayments on revolving line of credit | (416,000) | (419,000) |
Borrowings under revolving line of credit | 456,000 | 419,000 |
Repayments under long-term debt | (456) | (400,230) |
Issuance of long-term debt | 0 | 400,000 |
Excess tax benefits from stock-based awards | 17,205 | 4,726 |
Repurchase of common stock | (25,654) | (9,429) |
Proceeds from issuance of common stock | 0 | 280 |
Distribution to parent | 0 | 0 |
Distribution to noncontrolling interest | (1,019) | (592) |
Payment of contingent consideration liability | (1,222) | 0 |
Payment of financing costs | 0 | (7,560) |
Intercompany financing activities | 0 | 0 |
Net cash provided (used) by financing activities | 28,854 | (12,805) |
Effect of exchange rate changes on cash and cash equivalents | (85) | (453) |
Net decrease in cash and cash equivalents | (78,509) | (7,584) |
Cash and equivalents at beginning of period | 92,982 | 47,584 |
Cash and equivalents at end of period | 14,473 | 40,000 |
Parent | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided (used) by operating activities | (14,968) | 4,127 |
Additions to property and equipment | (6,811) | (1,876) |
Payments to acquire companies, net of cash acquired | (106,821) | (60,916) |
Proceeds from sale of business, facility and other assets | 0 | |
Change in restricted cash and cash equivalents | (89) | 1,129 |
Investment in equity method investee | (11,495) | |
Other investing activities | (2,735) | (550) |
Intercompany investing activities | (4,005) | 1,689 |
Net cash used in investing activities | (131,956) | (60,524) |
Repayments on revolving line of credit | (416,000) | (419,000) |
Borrowings under revolving line of credit | 456,000 | 419,000 |
Repayments under long-term debt | (88) | (400,208) |
Issuance of long-term debt | 400,000 | |
Excess tax benefits from stock-based awards | 17,205 | 4,726 |
Repurchase of common stock | (25,654) | (9,429) |
Proceeds from issuance of common stock | 280 | |
Distribution to parent | 0 | |
Distribution to noncontrolling interest | ||
Payment of contingent consideration liability | ||
Payment of financing costs | (7,560) | |
Intercompany financing activities | 34,414 | 63,786 |
Net cash provided (used) by financing activities | 65,877 | 51,595 |
Effect of exchange rate changes on cash and cash equivalents | (182) | (1,001) |
Net decrease in cash and cash equivalents | (81,229) | (5,803) |
Cash and equivalents at beginning of period | 82,158 | 36,280 |
Cash and equivalents at end of period | 929 | 30,477 |
Non- Guarantor Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided (used) by operating activities | 2,482 | 6,082 |
Additions to property and equipment | (557) | (577) |
Payments to acquire companies, net of cash acquired | 0 | 0 |
Proceeds from 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 | |
Intercompany investing activities | 0 | 0 |
Net cash used in investing activities | (557) | (577) |
Repayments on revolving line of credit | 0 | 0 |
Borrowings under revolving line of credit | 0 | 0 |
Repayments under long-term debt | 0 | 0 |
Issuance of long-term debt | 0 | |
Excess tax benefits from stock-based awards | 0 | 0 |
Repurchase of common stock | 0 | |
Proceeds from issuance of common stock | 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 | 0 | |
Intercompany financing activities | 3,534 | (1,697) |
Net cash provided (used) by financing activities | (1,561) | (7,173) |
Effect of exchange rate changes on cash and cash equivalents | 59 | 321 |
Net decrease in cash and cash equivalents | 423 | (1,347) |
Cash and equivalents at beginning of period | 9,695 | 10,022 |
Cash and equivalents at end of period | 10,118 | 8,675 |
Guarantor Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided (used) by operating activities | 59,210 | 84,258 |
Additions to property and equipment | (29,719) | (17,033) |
Payments to acquire companies, net of cash acquired | (7,985) | |
Proceeds from sale of business, facility and other assets | 8,301 | 3,899 |
Change in restricted cash and cash equivalents | 0 | |
Investment in equity method investee | ||
Other investing activities | 0 | |
Intercompany investing activities | (33,943) | (63,778) |
Net cash used in investing activities | (55,361) | (84,897) |
Repayments on revolving line of credit | 0 | 0 |
Borrowings under revolving line of credit | 0 | 0 |
Repayments under long-term debt | (368) | (22) |
Issuance of long-term debt | 0 | |
Excess tax benefits from stock-based awards | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Proceeds from issuance of common stock | 0 | |
Distribution to parent | 0 | 0 |
Distribution to noncontrolling interest | 0 | |
Payment of contingent consideration liability | (1,222) | |
Payment of financing costs | ||
Intercompany financing activities | 0 | |
Net cash provided (used) by financing activities | (1,590) | (22) |
Effect of exchange rate changes on cash and cash equivalents | 38 | 227 |
Net decrease in cash and cash equivalents | 2,297 | (434) |
Cash and equivalents at beginning of period | 1,129 | 1,282 |
Cash and equivalents at end of period | 3,426 | 848 |
Eliminations | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided (used) by operating activities | (4,076) | (4,884) |
Additions to property and equipment | 0 | |
Payments to acquire companies, net of cash acquired | 0 | 0 |
Proceeds from 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 | |
Intercompany investing activities | 37,948 | 62,089 |
Net cash used in investing activities | 37,948 | 62,089 |
Repayments on revolving line of credit | 0 | 0 |
Borrowings under revolving line of credit | 0 | 0 |
Repayments under long-term debt | 0 | 0 |
Issuance of long-term debt | 0 | |
Excess tax benefits from stock-based awards | 0 | 0 |
Repurchase of common stock | 0 | |
Proceeds from issuance of common stock | 0 | |
Distribution to parent | 4,076 | 4,884 |
Distribution to noncontrolling interest | 0 | |
Payment of contingent consideration liability | 0 | |
Payment of financing costs | ||
Intercompany financing activities | (37,948) | (62,089) |
Net cash provided (used) by financing activities | (33,872) | (57,205) |
Effect of exchange rate changes on cash and cash equivalents | 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 |