Exhibit 99.1
FOR IMMEDIATE RELEASE
| | |
| Contact: | | Paul Warburg |
| | Central Garden & Pet |
| | 925.948.3686 |
CENTRAL GARDEN & PET ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS FOR FISCAL 2007
WALNUT CREEK, CALIFORNIA, November 27, 2007 –Central Garden & Pet Company (NASDAQ: CENT/CENTA) today announced fourth quarter and full year results for its fiscal year ended September 29, 2007.
For the fourth quarter of fiscal 2007, the Company reported net sales of $401 million, a decline of $20 million or 5% from $421 million in the comparable 2006 period. Income from operations for the quarter decreased 53% to $10.1 million from $21.4 million in the year ago period. The net loss for the quarter was $1.7 million, or $0.02 per fully diluted share, compared to net income of $6.0 million, or $0.08 per fully diluted share, in the year ago period. Depreciation and amortization for the quarter was $8.8 million compared to $5.3 million in the year ago period. Branded product sales decreased 2% to $342 million. Sales of other manufacturers’ products declined 16% or $11.3 million to $59.5 million.
Net sales for the Garden Products segment were $180 million, a decrease of $4 million or 2% compared to the fourth quarter of fiscal 2006. Garden branded products sales increased approximately $3 million or 2% while sales of other manufacturers’ products, as anticipated, declined 23%. The Garden Products segment operating income was $2.8 million in the quarter, a decrease of $1.4 million, or 34% when compared to the fourth quarter of fiscal 2006. Net sales for the Pet Products segment were $221 million, a decrease of $16 million or 7% compared to the fourth quarter of fiscal 2006. Pet branded products sales decreased $11 million or 6% and sales of other manufacturers’ products decreased 11%. Operating income for the Pet Products segment was $17.3 million in the quarter, a decrease of $13.9 million, or 45%, when compared to the fourth quarter of fiscal 2006.
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Net sales for fiscal year 2007 were $1.67 billion, an increase of 3% from $1.62 billion in fiscal 2006. Operating income decreased 27% to $99.4 million compared to last year. Net income for the year decreased 51% to $32.3 million from $65.5 million in the prior year. Diluted earnings per share was $0.45, a 53% decrease compared to the prior year. Depreciation and amortization for the year was $30.7 million compared to $24.0 million in the prior year. Branded product sales increased 6% to $1.40 billion. Sales of other manufacturers’ products, as anticipated, declined 9% to $270.3 million. Organic sales declined 1% for the year.
“With 2007 behind us, we are looking to fiscal 2008 to reset and create a stronger and more agile company,” noted William Brown, Chairman and Chief Executive Officer of Central Garden & Pet Company. “Some of our operations are not performing well. We have significant work to do.”
The Company will discuss its fourth quarter and full year fiscal 2007 results on a conference call today at 4:30 p.m. EST. The earnings conference call will be broadcast over the Internet through Central’s website,www.central.com, or you may link directly to the webcast athttp://phx.corporate-ir.net/phoenix.zhtml?c=93879&p=irol-calendar. To listen to the call by telephone, please dial 1-888–680–0879 and passcode 3227 3384 (domestic) or 617–213–4856 and passcode 3227 3384 (international). You may bypass the operator and go directly to the teleconference by pre-registering, at any time before the call, through the link below which will provide you with a unique PIN number. At the time of the call, after dialing the number and passcode mentioned above, enter your PIN for immediate access to the teleconference.
https://www.theconferencingservice.com/prereg/key.process?key=PAXD9GGKY
Central Garden & Pet Company is a leading innovator, marketer and producer of quality branded products for the lawn & garden and pet supplies markets. Committed to new product innovation, our products are sold to specialty independent and mass retailers in the following categories: Lawn & Garden: Grass seed including the brands PENNINGTON® and THE REBELS™; wild bird feed and the brands PENNINGTON® and KAYTEE®; weed and insect control and the brands AMDRO®, SEVIN®, IRONITE® and OVER ‘N OUT™ and; decorative outdoor patio products and the brands NORCAL®, NEW ENGLAND POTTERY®, GKI/BETHLEHEM LIGHTING® and MATTHEWS FOUR SEASONS™. We also provide a host of other regional and application-specific garden brands and supplies. Pet categories
include: Animal health and the brands ADAMS™ and ZODIAC®; aquatics and reptile and the brands OCEANIC®, AQUEON™ and ZILLA™; bird & small animal and the brands KAYTEE®, SUPER PET® and CRITTER TRAIL®; dog & cat and the brands TFH™ / NYLABONE®, FOUR PAWS®, PINNACLE® and AVO-DERM® and; equine and the brands FARNAM®, BRONCO® and SUPER MASK®. We also provide a host of other application-specific pet brands and supplies. Central Garden & Pet Company is based in Walnut Creek, California, and has approximately 5,000 employees, primarily in North America and Europe. For additional information on Central Garden & Pet Company, including access to the Company’s SEC filings, please visit the Company’s website athttp://www.central.com/.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts, including future earnings guidance, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks are described in the Company’s Annual Report on Form 10-K and other Securities and Exchange Commission filings. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.
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(Tables Follow)
Central Garden & Pet Company
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Fiscal Year Ended | |
| | | September 29,
2007 | | | September 30,
2006 | | | September 29,
2007 | | | September 30,
2006 | |
Net Sales | | $ | 401,309 | | | $ | 420,774 | | | $ | 1,671,145 | | | $ | 1,621,531 | |
Cost of Goods Sold and Occupancy | | | 283,845 | | | | 285,923 | | | | 1,136,825 | | | | 1,086,219 | |
| | | | | | | | | | | | | | | | |
Gross Profit | | | 117,464 | | | | 134,851 | | | | 534,320 | | | | 535,312 | |
Selling, General and Administrative | | | | | | | | | | | | | | | | |
Expenses | | | 107,394 | | | | 113,427 | | | | 434,903 | | | | 398,510 | |
| | | | | | | | | | | | | | | | |
Income from Operations | | | 10,070 | | | | 21,424 | | | | 99,417 | | | | 136,802 | |
Interest Expense | | | (12,389 | ) | | | (11,893 | ) | | | (49,685 | ) | | | (40,677 | ) |
Interest Income | | | 281 | | | | 138 | | | | 1,538 | | | | 3,007 | |
Other Income (Expense) | | | (477 | ) | | | (140 | ) | | | 2,402 | | | | 3,083 | |
| | | | | | | | | | | | | | | | |
Income (Loss) Before Income Taxes and Minority Interest | | | (2,515 | ) | | | 9,529 | | | | 53,672 | | | | 102,215 | |
Income Tax Expense (Benefit) | | | (905 | ) | | | 3,429 | | | | 19,999 | | | | 35,791 | |
Minority Interest | | | 85 | | | | 81 | | | | 1,369 | | | | 890 | |
| | | | | | | | | | | | | | | | |
Net Income (Loss) | | $ | (1,695 | ) | | $ | 6,019 | | | $ | 32,304 | | | $ | 65,534 | |
| | | | | | | | | | | | | | | | |
Basic Earnings (Loss) Per Common Share | | $ | (0.02 | ) | | $ | 0.09 | | | $ | 0.46 | | | $ | 0.97 | |
Diluted Earnings (Loss) Per Common Share | | $ | (0.02 | ) | | $ | 0.08 | | | $ | 0.45 | | | $ | 0.95 | |
Weighted Average Shares Outstanding | | | | | | | | | | | | | | | | |
Basic | | | 71,131 | | | | 70,746 | | | | 70,824 | | | | 67,833 | |
Diluted | | | 71,131 | | | | 71,733 | | | | 72,050 | | | | 69,054 | |
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Central Garden & Pet Company
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
| | | | | | |
| | | September 29, 2007 | | September 30, 2006 |
Assets | | | | | | |
Current Assets: | | | | | | |
Cash and Cash Equivalents | | $ | 21,055 | | $ | 28,406 |
Accounts Receivable | | | 247,429 | | | 239,172 |
Inventories | | | 378,365 | | | 332,214 |
Other Current Assets | | | 38,659 | | | 34,910 |
| | | | | | |
Total Current Assets | | | 685,508 | | | 634,702 |
Property and Equipment - Net | | | 201,609 | | | 162,604 |
Goodwill and Other Assets | | | 759,705 | | | 736,517 |
| | | | | | |
Total | | $ | 1,646,822 | | $ | 1,533,823 |
| | | | | | |
Liabilities and Shareholders’ Equity | | | | | | |
Current Liabilities: | | | | | | |
Accounts Payable | | $ | 135,972 | | $ | 122,960 |
Accrued Expenses | | | 75,968 | | | 81,305 |
Current Portion of Long-Term Debt | | | 3,352 | | | 3,039 |
| | | | | | |
Total Current Liabilities | | | 215,292 | | | 207,304 |
Long-Term Debt | | | 607,171 | | | 565,410 |
Other Long-Term Obligations | | | 44,802 | | | 29,583 |
Convertible Redeemable Preferred Stock | | | 750 | | | 3,000 |
Minority Interest | | | 1,834 | | | 1,167 |
Shareholders’ Equity | | | 776,973 | | | 727,359 |
| | | | | | |
Total | | $ | 1,646,822 | | $ | 1,533,823 |
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