|
|
|
|
|
|
|
Page
|
PART I
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II
|
|
|
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
PART III
|
|
|
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
PART IV
|
|
|
Item 15.
|
•
|
our dependence upon key executives;
|
•
|
risks associated with new product introductions, including the risk that our new products will not produce sufficient sales to recoup our investment;
|
•
|
fluctuations in energy prices, fuel and related petrochemical costs;
|
•
|
Net sales for fiscal
2017
increased
$225.5 million
, or
12.3%
, to
$2,054.5 million
. Our Pet segment sales increased
15.2%
, and our Garden segment sales increased
8.2%
.
|
•
|
Gross profit for fiscal
2017
increased
$79.8 million
, or
14.4%
, to
$632.8 million
from
$553.0 million
in fiscal
2016
. Gross margin increased
60
basis points in fiscal
2017
to
30.8%
, from
30.2%
in fiscal
2016
.
|
•
|
Our operating income increased
$26.8 million
, or
20.7%
, to
$156.1 million
in fiscal
2017
, and increased as a percentage of net sales to
7.6%
from
7.1%
. Non-GAAP operating income increased
$25.2 million
, or
19.6%
.
|
•
|
Net income was
$78.8 million
, or
$1.52
per share on a fully diluted basis, compared to net income in fiscal
2016
of
$44.5 million
, or
$0.87
per share on a fully diluted basis. Non-GAAP net income increased to
$77.5 million
, or
$1.50
per share, in fiscal
2017
from
$64.4 million
, or
$1.26
per share, in fiscal
2016
.
|
•
|
Our net cash provided by operating activities was
$114.3 million
in fiscal
2017
compared to
$151.4 million
in fiscal
2016
.
|
•
|
Market Leadership Positions Built on a Strong Brand Portfolio
. We are one of the leaders in the U.S. pet supplies market and in the U.S. consumer lawn and garden supplies market. We have a diversified portfolio of brands, many of which we believe are among the leading brands in their respective U.S. market categories. The majority of our brands have been marketed and sold for more than 25 years.
|
•
|
History of Innovative New Products and Customer Service
. We continuously seek to introduce new products, both as complementary extensions of existing product lines and in new product categories. Over the last three years, we have received a number of awards for innovation, customer service and marketing.
|
•
|
Strong Relationships with Retailers
. We have developed strong relationships with major and independent retailers, as well as e-commerce retailers, through product innovation, premium brands, broad product offerings, private label programs, proprietary sales and logistics capabilities and a high level of customer service. Major retailers value the efficiency of dealing with suppliers with national scope and strong brands. We believe our ability to meet their unique needs for packaging and point of sale displays provides us with a competitive advantage. Independent retailers value our high level of customer service and broad array of premium branded products. We believe these strengths have assisted us in becoming one of the largest pet supplies vendors to PetSmart, PETCO and Wal*Mart and among the largest lawn and garden supplies vendors to Wal*Mart, Home Depot and Lowe’s, as well as a leading supplier to independent pet and garden supplies retailers in the United States.
|
•
|
Favorable Long-Term Industry Characteristics
. We believe the U.S. pet supplies market is expected to grow over the long term due to favorable demographic and leisure trends. The key demographics bolstering our markets are the growth rates in the number of millennials who now account for 35% of pet owners and account for more than half of small animal, reptile and saltwater fish owners. According to the 2017-2018 APPA National Pet Owners Survey, the number of U.S. pet owners in recent years has reached record highs, with 84.6 million, or 68% of total households owning a pet-an increase of almost five million households in two years.
|
•
|
Sales and Logistics Networks
. We are a leading supplier to independent specialty retailers for the pet and lawn and garden supplies markets through our sales and logistics networks. We believe our sales and logistics networks give us a significant competitive advantage over other suppliers. These networks provide us with key access to independent pet specialty retail stores and retail lawn and garden customers that require two-step distribution for our branded products facilitating:
|
◦
|
acquisition and maintenance of premium shelf placement;
|
◦
|
prompt product replenishment;
|
◦
|
customization of retailer programs;
|
◦
|
quick responses to changing customer and retailer preferences;
|
◦
|
rapid deployment and feedback for new products; and
|
◦
|
immediate exposure for new internally developed and acquired brands.
|
•
|
We are managing each business differentially, based on its role and its strategy within our business portfolio. We have assessed the profitability and profit growth potential of each of our businesses. All businesses will have a clear role in the portfolio and a strategy that is consistent with that role. Some of our businesses are managed to optimize topline growth, whereas others should be more focused on reducing costs and maximizing operating income. For example, businesses that have higher margins, higher profit potential and higher growth potential are strategic growth engines for us. We have aligned our resources and initiatives with these roles for each business.
|
•
|
We are seeking to acquire businesses that are accretive to our growth. Our M&A model is one of our key strengths. Since 1992, we have completed over 50 acquisitions to create a company of approximately
$2.1 billion
in sales. We are patient and disciplined value buyers, typically focused on closing manageable-sized opportunities in the garden and pet areas, which can leverage our capabilities and where we can add value through our low-cost manufacturing capabilities, operating synergies, or strong distribution network. We generally prefer to acquire businesses with proven, seasoned management teams, which are committed to stay with the acquired business after closing.
|
•
|
We will exit businesses where we cannot find a path to profitability and have exited two businesses in the past two years. We continually review our businesses to ensure they can meet our expectations and in some cases have implemented strategies to reverse sub-par performance.
|
•
|
Strong customer relationships have been a key pillar of our company. Our Customer-First mindset entails listening to our customers and being flexible, fast and principled. Partnering with our customers is a key initiative in our efforts to grow both our customers’ and our revenues and profits. A unique aspect of our business model which is of significant value to many of our customers is that in addition to our branded manufactured products, we also produce private label products and distribute products produced by third-party manufacturers. This enables us to provide a wide variety of products across multiple categories for our customers. We are also expanding our category management capabilities to provide direction fueled by consumer insights and specific customer understanding to grow our retail partners’ category sales and profits. We are expanding this capability across the Company to make recommendations around merchandising, assortment, pricing and shelving to grow our customers’ categories.
|
•
|
We are seeking to develop more differentiated and more defensible new products; and increasing our overall investment in innovation, consumer insights, and demand creation to an appropriate level for each business. We emphasize having a three-year line-of-sight on our initiatives, enabling us to best fund and allocate our resources to make sure we have the ability to deliver on our innovation goals.
|
•
|
We continuously strive to get a deeper understanding of our consumers, comprehending what products and features they desire and how they make their purchasing decisions. We are making incremental investments in people and dollars to accomplish this goal. Additionally, we are increasing our digital capabilities to better reach consumers-making sure we are listening in the right places on the internet and enhancing our search engine optimization and digital marketing communication.
|
•
|
We believe we have the opportunity to reduce our cost of goods sold and administrative spending by 1% to 2% per year. We expect these cost savings to fund growth levers on our business which provides us the opportunity to invest more in our business.
|
•
|
We have begun optimizing our supply-chain footprint, improving our operating efficiency with a continuous improvement mindset, and improving coordination by sharing best practices and aligning for scale. While we value being a decentralized company, we
|
•
|
We have 4,100 employees in approximately 80 locations. People work at Central because they love the categories in which we operate and that creates a passionate and effective group. We also have a strong leadership team representing a mix of successful entrepreneurs and classically trained CPG executives that have delivered favorable growth over the last few years. We place an emphasis on helping our employees develop their skills and focus on succession planning to ensure we can grow sustainably year-after-year.
|
Category
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
Other pet products
|
|
$
|
841.4
|
|
|
$
|
689.3
|
|
|
$
|
594.7
|
|
|
Other garden supplies
|
|
464.9
|
|
|
331.3
|
|
|
343.5
|
|
|
|||
Dog and cat products
|
|
405.0
|
|
|
326.0
|
|
|
233.0
|
|
|
|||
Garden controls and fertilizer products
|
|
343.2
|
|
|
298.8
|
|
|
286.3
|
|
|
|||
Wild bird feed
|
|
—
|
|
(1)
|
183.6
|
|
|
193.2
|
|
|
|||
Total
|
|
$
|
2,054.5
|
|
|
$
|
1,829.0
|
|
|
$
|
1,650.7
|
|
|
•
|
Nylabone is made in the United States and has a strong history of developing innovative products such as NutriDent
®
Edible Dental Brush Chews, as well as numerous other award-winning dog toys and healthy chews.
|
•
|
IMS is a manufacturer and supplier of a full-line of quality rawhide and other natural dog chews, and treats.
|
•
|
Four Paws Products include industry leaders in grooming and waste management products under the Wee Wee and Magic Coat Brands.
|
•
|
DMC, the industry-leading dog & cat bed company and supplier to many of the largest retailers for private label and branded bedding.
|
•
|
K&H is a producer of premium pet supplies and the largest marketer of heated pet products in the country.
|
•
|
TFH Publications is a globally recognized publisher of both pet books and an aquatics magazine.
|
•
|
Breeder’s Choice, featuring the Pinnacle
®
and AvoDerm
®
brands, is a manufacturer of natural pet food.
|
•
|
a sales organization operating by category and channel;
|
•
|
dedicated account teams servicing our largest customers;
|
•
|
a group of account managers focused on regional chains;
|
•
|
a geographic based group of territory managers dedicated to the independent retailer; and
|
•
|
a specialized group of account managers dedicated to the professional and equine markets.
|
•
|
dedicated sales forces represent our combined brand groups;
|
•
|
retail sales and logistics network, which provides in-store training and merchandising for our customers, especially during the prime spring and summer seasons;
|
•
|
dedicated account-managers and sales teams located near and dedicated to serve several of our largest customers; and
|
•
|
selected independent distributors who sell our brands.
|
Name
|
|
Age
|
|
Position
|
|
George C. Roeth
|
|
56
|
|
|
President & Chief Executive Officer
|
William E. Brown
|
|
76
|
|
|
Chairman of the Board
|
Nicholas Lahanas
|
|
49
|
|
|
Chief Financial Officer
|
Michael A. Reed
|
|
69
|
|
|
Executive Vice President
|
Kay M. Schwichtenberg
|
|
64
|
|
|
Executive Vice President
|
George Yuhas
|
|
65
|
|
|
General Counsel and Secretary
|
•
|
seasonality and adverse weather conditions;
|
•
|
fluctuations in prices of commodity grains and other input costs;
|
•
|
operational problems;
|
•
|
shifts in demand for lawn and garden and pet products;
|
•
|
changes in product mix, service levels, marketing and pricing by us and our competitors;
|
•
|
the effect of acquisitions; and
|
•
|
economic stability of and strength of our relationships with key retailers.
|
•
|
develop and grow brands with leading market positions;
|
•
|
grow market share;
|
•
|
maintain and expand our relationships with key retailers;
|
•
|
continually develop innovative new products that appeal to consumers;
|
•
|
implement effective marketing and sales promotion programs;
|
•
|
maintain strict quality standards;
|
•
|
deliver products on a reliable basis at competitive prices; and
|
•
|
effectively integrate acquired companies.
|
•
|
failure of the acquired business to achieve expected results, as well as the potential impairment of the acquired assets if operating results decline after an acquisition;
|
•
|
diversion of management’s attention;
|
•
|
failure to retain key personnel of the acquired business;
|
•
|
additional financing, if necessary and available, which could increase leverage and costs, dilute equity, or both;
|
•
|
the potential negative effect on our financial statements from the increase in goodwill and other intangibles;
|
•
|
the high cost and expenses of identifying, negotiating and completing acquisitions; and
|
•
|
risks associated with unanticipated events or liabilities.
|
•
|
make it more difficult for us to satisfy our obligations with respect to the terms of our indebtedness;
|
•
|
require us to dedicate a large portion of our cash flow to pay principal and interest on our indebtedness, which would reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other business activities;
|
•
|
increase our vulnerability to adverse industry conditions, including unfavorable weather conditions or commodity price increases;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;
|
•
|
restrict us from making strategic acquisitions or exploiting business opportunities;
|
•
|
place us at a competitive disadvantage compared to competitors that have less debt; and
|
•
|
limit our ability to borrow additional funds at reasonable rates, if at all.
|
Location
|
|
Type of Facility
|
|
Owned or Leased
|
Phoenix, AZ (2)
|
|
Sales and Logistics
|
|
Owned
|
Irwindale, CA
|
|
Manufacturing
|
|
Leased
|
Sacramento, CA
|
|
Sales and Logistics
|
|
Leased
|
Santa Fe Springs, CA
|
|
Sales and Logistics
|
|
Leased
|
Aurora, CO
|
|
Sales and Logistics
|
|
Leased
|
Colorado Springs, CO (2)
|
|
Sales and Logistics
|
|
Leased
|
Gibsonton, FL
|
|
Sales and Logistics
|
|
Owned
|
Lakeland, FL (2)
|
|
Manufacturing
|
|
Leased
|
Plant City, FL (2)
|
|
Manufacturing
|
|
Leased
|
Ruskin, FL
|
|
Manufacturing
|
|
Leased
|
Ruskin, FL
|
|
Sales and Logistics
|
|
Leased
|
Tampa, FL
|
|
Sales and Logistics
|
|
Leased
|
Atlanta, GA (2)
|
|
Sales and Logistics
|
|
Leased
|
Atlanta, GA
|
|
Sales and Logistics
|
|
Owned
|
Council Bluffs, IA
|
|
Manufacturing
|
|
Owned
|
Hamilton, NJ
|
|
Sales and Logistics
|
|
Leased
|
Neptune City, NJ
|
|
Manufacturing
|
|
Owned
|
Neptune City, NJ
|
|
Manufacturing
|
|
Leased
|
South Brunswick, NJ
|
|
Sales and Logistics
|
|
Leased
|
Fairfield, OH
|
|
Sales and Logistics
|
|
Leased
|
Cressona, PA
|
|
Manufacturing
|
|
Owned
|
Pottsville, PA
|
|
Sales and Logistics
|
|
Leased
|
Athens, TX
|
|
Manufacturing
|
|
Leased
|
Athens, TX (2)
|
|
Sales and Logistics
|
|
Leased
|
Dallas, TX
|
|
Manufacturing
|
|
Owned
|
Dallas, TX
|
|
Sales and Logistics
|
|
Leased
|
Algona, WA
|
|
Sales and Logistics
|
|
Leased
|
Chilton, WI
|
|
Manufacturing
|
|
Owned
|
Franklin, WI
|
|
Manufacturing
|
|
Leased
|
Franklin, WI
|
|
Manufacturing
|
|
Owned
|
Guelph, Ontario, Canada
|
|
Sales and Logistics
|
|
Leased
|
Guangzhou, China
|
|
Manufacturing
|
|
Leased
|
Shanghai, China
|
|
Sales and Logistics
|
|
Leased
|
Atlixco, Puebla, Mexico
|
|
Manufacturing
|
|
Owned
|
Dorking, Surrey, UK
|
|
Manufacturing
|
|
Leased
|
Taunton, Somerset, UK
|
|
Sales and Logistics
|
|
Leased
|
Location
|
|
Type of Facility
|
|
Owned or Leased
|
Cullman, AL
|
|
Sales and Logistics
|
|
Owned
|
Cullman, AL
|
|
Sales and Logistics
|
|
Leased
|
Roll, AZ
|
|
Manufacturing
|
|
Owned
|
Chico, CA
|
|
Manufacturing
|
|
Leased
|
El Centro, CA
|
|
Manufacturing
|
|
Owned
|
Ontario, CA
|
|
Sales and Logistics
|
|
Leased
|
Longmont, CO
|
|
Manufacturing
|
|
Owned
|
Covington, GA
|
|
Sales and Logistics
|
|
Leased
|
Eatonton, GA
|
|
Manufacturing
|
|
Owned
|
Eatonton, GA
|
|
Sales and Logistics
|
|
Leased
|
Madison, GA
|
|
Manufacturing
|
|
Leased
|
Madison, GA (2)
|
|
Manufacturing
|
|
Owned
|
Madison, GA
|
|
Sales and Logistics
|
|
Owned
|
Madison, GA
|
|
Sales and Logistics
|
|
Leased
|
Taunton, MA
|
|
Sales and Logistics
|
|
Leased
|
Laurel, MD
|
|
Sales and Logistics
|
|
Leased
|
Greenfield, MO (2)
|
|
Manufacturing
|
|
Owned
|
Greenfield, MO
|
|
Sales and Logistics
|
|
Owned
|
Neosho, MO
|
|
Manufacturing
|
|
Owned
|
Charlotte, NC
|
|
Sales and Logistics
|
|
Leased
|
Sidney, NE
|
|
Manufacturing
|
|
Owned
|
Fairfield, OH
|
|
Sales and Logistics
|
|
Leased
|
Peebles, OH
|
|
Manufacturing
|
|
Owned
|
Peebles, OH
|
|
Manufacturing
|
|
Leased
|
Albany, OR
|
|
Manufacturing
|
|
Owned
|
Lebanon, OR
|
|
Manufacturing
|
|
Owned
|
Portland, OR
|
|
Sales and Logistics
|
|
Leased
|
Easton, PA
|
|
Sales and Logistics
|
|
Leased
|
Grand Prairie, TX
|
|
Sales and Logistics
|
|
Leased
|
Kenbridge, VA
|
|
Sales and Logistics
|
|
Leased
|
Northbend, WA
|
|
Manufacturing
|
|
Leased
|
|
|
Common Stock
|
|
Class A
Common Stock
|
||||||||||||
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
Fiscal 2017
|
|
|
|
|
||||||||||||
First Quarter
|
|
$
|
34.25
|
|
|
$
|
23.21
|
|
|
$
|
31.97
|
|
|
$
|
22.27
|
|
Second Quarter
|
|
37.67
|
|
|
31.86
|
|
|
35.16
|
|
|
30.00
|
|
||||
Third Quarter
|
|
39.09
|
|
|
29.50
|
|
|
36.55
|
|
|
28.51
|
|
||||
Fourth Quarter
|
|
38.84
|
|
|
30.71
|
|
|
37.19
|
|
|
29.29
|
|
||||
Fiscal 2016
|
|
|
|
|
||||||||||||
First Quarter
|
|
$
|
17.93
|
|
|
$
|
13.35
|
|
|
$
|
18.54
|
|
|
$
|
13.65
|
|
Second Quarter
|
|
16.21
|
|
|
12.05
|
|
|
16.14
|
|
|
12.02
|
|
||||
Third Quarter
|
|
22.54
|
|
|
14.82
|
|
|
21.29
|
|
|
14.80
|
|
||||
Fourth Quarter
|
|
27.62
|
|
|
21.21
|
|
|
25.51
|
|
|
20.12
|
|
|
|
9/29/2012
|
|
9/28/2013
|
|
9/27/2014
|
|
9/26/2015
|
|
9/24/2016
|
|
9/30/2017
|
||||||
Central Garden & Pet Company
|
|
100.00
|
|
|
59.13
|
|
|
64.68
|
|
|
137.85
|
|
|
213.37
|
|
|
326.66
|
|
NASDAQ Composite
|
|
100.00
|
|
|
123.09
|
|
|
148.66
|
|
|
156.18
|
|
|
179.05
|
|
|
221.75
|
|
Dow Jones US Nondurable Household Products
|
|
100.00
|
|
|
115.26
|
|
|
131.43
|
|
|
121.32
|
|
|
150.01
|
|
|
159.45
|
|
Period
|
|
Total Number
of Shares
(or Units)
Purchased
|
|
|
Average
Price Paid
per Share
(or Unit)
|
|
Total Number of
Shares (or Units)
Purchased as
Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number
(or Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs (1)
|
||||||
June 25, 2017 - July 29, 2017
|
|
—
|
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
34,968,000
|
|
July 30, 2017 - August 26, 2017
|
|
4,897
|
|
|
(2)
|
31.75
|
|
|
—
|
|
|
34,968,000
|
|
||
August 27, 2017 - September 30, 2017
|
|
3,485
|
|
|
(2)
|
34.33
|
|
|
—
|
|
|
34,968,000
|
|
||
Total
|
|
8,382
|
|
|
|
$
|
32.82
|
|
|
—
|
|
|
$
|
34,968,000
|
|
(1)
|
During the third quarter of fiscal 2011, our Board of Directors authorized a $100 million share repurchase program. The program has no fixed expiration date and expires when the amount authorized has been used or the Board withdraws its authorization. The repurchase of shares may be limited by certain financial covenants in our credit facility that restrict our ability to repurchase our stock.
|
(2)
|
Shares purchased during the period indicated represent withholding of a portion of shares to cover taxes in connection with the vesting of restricted stock and do not reduce the dollar value of shares that may be purchased under our stock repurchase plan.
|
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
|
September 30, 2017
|
|
September 24, 2016
|
|
September 26, 2015
|
|
September 27, 2014
|
|
September 28, 2013
|
||||||||||
|
|
(in thousands, except per share amounts)
|
||||||||||||||||||
Statement of Operations Data (1):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
2,054,478
|
|
|
$
|
1,829,017
|
|
|
$
|
1,650,737
|
|
|
$
|
1,604,357
|
|
|
$
|
1,653,633
|
|
Cost of goods sold and occupancy
|
|
1,421,670
|
|
|
1,275,967
|
|
|
1,162,685
|
|
|
1,150,333
|
|
|
1,189,731
|
|
|||||
Gross profit
|
|
632,808
|
|
|
553,050
|
|
|
488,052
|
|
|
454,024
|
|
|
463,902
|
|
|||||
Selling, general and administrative expenses
|
|
476,696
|
|
|
421,864
|
|
|
389,345
|
|
|
397,811
|
|
|
416,038
|
|
|||||
Intangible asset and goodwill impairments (2)
|
|
—
|
|
|
1,828
|
|
|
7,272
|
|
|
—
|
|
|
7,709
|
|
|||||
Operating income (3)
|
|
156,112
|
|
|
129,358
|
|
|
91,435
|
|
|
56,213
|
|
|
40,155
|
|
|||||
Interest expense, net (4)
|
|
(28,062
|
)
|
|
(42,707
|
)
|
|
(39,898
|
)
|
|
(42,750
|
)
|
|
(42,970
|
)
|
|||||
Other income (expense) (5)
|
|
(1,621
|
)
|
|
(17,013
|
)
|
|
13
|
|
|
403
|
|
|
(677
|
)
|
|||||
Income (loss) before income taxes and noncontrolling interest
|
|
126,429
|
|
|
69,638
|
|
|
51,550
|
|
|
13,866
|
|
|
(3,492
|
)
|
|||||
Income tax expense (benefit)
|
|
46,699
|
|
|
24,053
|
|
|
18,535
|
|
|
4,045
|
|
|
(2,592
|
)
|
|||||
Income (loss) including noncontrolling interest
|
|
79,730
|
|
|
45,585
|
|
|
33,015
|
|
|
9,821
|
|
|
(900
|
)
|
|||||
Net income attributable to noncontrolling interest
|
|
902
|
|
|
1,071
|
|
|
1,044
|
|
|
1,017
|
|
|
1,029
|
|
|||||
Net income (loss) attributable to Central Garden & Pet
|
|
$
|
78,828
|
|
|
$
|
44,514
|
|
|
$
|
31,971
|
|
|
$
|
8,804
|
|
|
$
|
(1,929
|
)
|
Net income (loss) per share attributable to Central Garden & Pet:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.57
|
|
|
$
|
0.91
|
|
|
$
|
0.66
|
|
|
$
|
0.18
|
|
|
$
|
(0.04
|
)
|
Diluted
|
|
$
|
1.52
|
|
|
$
|
0.87
|
|
|
$
|
0.64
|
|
|
$
|
0.18
|
|
|
$
|
(0.04
|
)
|
Weighted average shares used in the computation of income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
50,230
|
|
|
48,964
|
|
|
48,562
|
|
|
48,880
|
|
|
48,094
|
|
|||||
Diluted
|
|
51,820
|
|
|
51,075
|
|
|
49,638
|
|
|
49,397
|
|
|
48,094
|
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
|
$
|
42,719
|
|
|
$
|
40,001
|
|
|
$
|
33,703
|
|
|
$
|
35,781
|
|
|
$
|
32,968
|
|
Capital expenditures
|
|
$
|
44,659
|
|
|
$
|
27,622
|
|
|
$
|
22,030
|
|
|
$
|
17,173
|
|
|
$
|
25,172
|
|
Cash provided (used) by operating activities
|
|
$
|
114,309
|
|
|
$
|
151,426
|
|
|
$
|
87,449
|
|
|
$
|
126,467
|
|
|
$
|
(28,282
|
)
|
Cash used in investing activities
|
|
$
|
(164,577
|
)
|
|
$
|
(91,195
|
)
|
|
$
|
(49,854
|
)
|
|
$
|
(35,181
|
)
|
|
$
|
(25,122
|
)
|
Cash provided (used) by financing activities
|
|
$
|
(10,392
|
)
|
|
$
|
(14,165
|
)
|
|
$
|
(68,370
|
)
|
|
$
|
(27,759
|
)
|
|
$
|
20,309
|
|
Ratio of earnings to fixed charges (6)
|
|
5.4x
|
|
|
2.6x
|
|
|
2.3x
|
|
|
1.3x
|
|
|
—
|
|
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
|
September 30, 2017
|
|
September 24, 2016
|
|
September 26, 2015
|
|
September 27, 2014
|
|
September 28, 2013
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and short term investments
|
|
$
|
32,397
|
|
|
$
|
92,982
|
|
|
$
|
47,584
|
|
|
$
|
88,666
|
|
|
$
|
32,976
|
|
Working capital (8)
|
|
462,849
|
|
|
481,077
|
|
|
446,431
|
|
|
464,050
|
|
|
455,296
|
|
|||||
Total assets (7)(8)
|
|
1,306,906
|
|
|
1,180,683
|
|
|
1,101,112
|
|
|
1,157,715
|
|
|
1,167,774
|
|
|||||
Total debt (7)
|
|
395,653
|
|
|
395,269
|
|
|
396,982
|
|
|
445,214
|
|
|
467,333
|
|
|||||
Equity
|
|
637,142
|
|
|
554,587
|
|
|
506,380
|
|
|
486,453
|
|
|
470,024
|
|
(1)
|
Fiscal years 2013, 2014, 2015 and 2016 included 52 weeks. Fiscal year 2017 included 53 weeks.
|
(2)
|
During fiscal 2016, we recognized a non-cash charge of $1.8 million related to the impairment of a certain indefinite-lived intangible asset in our Pet segment. During fiscal 2015, we recognized a non-cash charge of $7.3 million related to the impairment of certain indefinite-lived intangible assets in our Pet segment. During fiscal 2013, we recognized a non-cash charge of $7.7 million related to impairment of goodwill in our Garden segment.
|
(3)
|
During fiscal 2013, we recognized an $11.2 million charge related to certain products introduced in fiscal 2013 in our Garden segment. During fiscal 2014, we recognized a $16.9 million charge related to these products. We recognized a $4.9 million gain in fiscal 2014 from the sale of manufacturing plant assets. During fiscal 2016, we recognized a $2.4 million gain in our Pet segment from the sale of a manufacturing plant. During fiscal 2017, we recognized a $2.0 million gain in our Garden segment from the sale of a distribution facility.
|
(4)
|
During fiscal 2016, we incurred incremental expenses of $14.3 million, comprised of a call premium payment of $8.3 million, a $2.7 million payment of overlapping interest expense for 30 days and a $3.3 million non-cash charge for the write-off of unamortized deferred financing costs and discount on our 2018 Notes, as a result of the redemption of our 2018 Notes and issuance of our 2023 Notes.
|
(5)
|
During fiscal 2016, we recognized a non-cash impairment charge of $16.6 million related to our investment in two joint ventures as a result of changes in marketplace conditions, which impacted expected cash flows and the recoverability of the investment.
|
(6)
|
For the purposes of determining the ratio of earnings to fixed charges, earnings consist of income (loss) before income taxes and noncontrolling interest and after eliminating undistributed earnings of equity method investees and before fixed charges. Fixed charges consist of interest expense incurred, the portion of rental expense under operating leases deemed by management to be representative of the interest factor and amortization of deferred financing costs. For the fiscal year ended September 28, 2013, earnings were insufficient to cover fixed charges by approximately $3.2 million, and the ratio is not meaningful.
|
(7)
|
In fiscal 2016, we retrospectively adopted new accounting guidance, which requires classification of debt issuance costs as a reduction of the carrying value of the debt. In doing so, $3.2 million, $5.0 million and $5.3 million of deferred issuance costs have been reclassified from Other assets to Long-term debt in our Consolidated Balance Sheets for fiscal 2015, 2014 and 2013, respectively.
|
(8)
|
On September 30, 2017, we retrospectively adopted new accounting guidance (Accounting Standards Update 2015-17) which requires classification of deferred tax assets as non-current assets and non-current liabilities. In doing so, $31.5 million and $30.5 million of net current deferred tax assets have been reclassified to deferred taxes and other long term liabilities in our Consolidated Balance Sheets for fiscal 2016 and 2015, respectively. $34.4 million and $35.0 million of net current deferred tax assets have been partially offset by deferred tax liabilities and reclassified to other assets in our Consolidated Balance Sheets for fiscal 2014 and 2013, respectively. Working capital amounts have been changed by the amounts above for the respective years.
|
•
|
Net sales for fiscal
2017
increased
$225.5 million
, or
12.3%
, to
$2,054.5 million
. Our Pet segment sales increased
15.2%
, and our Garden segment sales increased
8.2%
.
|
•
|
Gross profit for fiscal
2017
increased
$79.8 million
, or
14.4%
, to
$632.8 million
from
$553.0 million
in fiscal
2016
. Gross margin increased
60
basis points in fiscal
2017
to
30.8%
, from
30.2%
in fiscal
2016
.
|
•
|
Our operating income increased
$26.8 million
, or
20.7%
, to
$156.1 million
in fiscal
2017
, and increased as a percentage of net sales to
7.6%
from
7.1%
. Non-GAAP operating income increased
$25.2 million
, or
19.6%
.
|
•
|
Net income was
$78.8 million
, or
$1.52
per share on a fully diluted basis, compared to net income in fiscal
2016
of
$44.5 million
, or
$0.87
per share on a fully diluted basis. Non-GAAP net income increased to
$77.5 million
, or
$1.50
per share, in fiscal
2017
from
$64.4 million
, or
$1.26
per share, in fiscal
2016
.
|
•
|
Our net cash provided by operating activities was
$114.3 million
in fiscal
2017
compared to
$151.4 million
in fiscal
2016
.
|
•
|
Asset impairment charges: we have excluded the impact of asset impairments on intangible assets and equity method investments as such non-cash amounts are inconsistent in amount and frequency. We believe that the adjustment of these charges supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance.
|
•
|
Gains on disposals of significant plant assets: we have excluded the impact of gains on the disposal of significant plant assets as these represent infrequent transactions that impact the comparability between operating periods. We believe the adjustment of these gains supplements the GAAP information with a measure that may be used to assess the sustainability of our operating performance.
|
•
|
Loss on early extinguishment of debt: we have excluded the charges associated with the refinancing of our 2018 Notes as the amount and frequency of such charges is not consistent and is significantly impacted by the timing and size of debt financing transactions.
|
•
|
Tax impact: adjustment represents the impact of the tax effect of the pre-tax non-GAAP adjustments excluded from non-GAAP net income. The tax impact of the non-GAAP adjustments is calculated based on the consolidated effective tax rate on a GAAP basis, applied to the non-GAAP adjustments, unless the underlying item has a materially different tax treatment.
|
•
|
We have also provided organic net sales, a non-GAAP measure that excludes the impact of businesses purchased or exited in the prior 12 months, because we believe it permits investors to better understand the performance of our historical business without the impact of recent acquisitions or dispositions. For fiscal 2017, we have also adjusted our organic net sales for our estimate of the impact of the extra week on our 2017 fiscal year net sales.
|
•
|
Additionally, we have provided a comparison of our free cash flow, a non-GAAP measure which may be used as an assessment of liquidity and which we use internally to evaluate our operating performance. We define free cash flow as net cash provided by operations less capital expenditures. Free cash flow does not represent cash available only for discretionary expenditures, since we have mandatory debt service requirements and other contractual and non-discretionary expenditures.
|
(1)
|
During the fourth quarter of fiscal 2016 and fiscal 2015, we recognized non-cash impairment charges in our Pet segment of $1.8 million and $7.3 million, respectively, related to the impairment of intangible assets caused by increased competition and declining volume of sales. These impairments are included within intangible asset impairment.
|
(2)
|
During fiscal 2017, we recognized a $2.0 million gain in our Garden segment from the sale of a distribution facility. During fiscal 2016, we recorded a $2.4 million gain in our Pet segment from the sale of a manufacturing plant resulting from rationalizing our facilities to reduce excess capacity. These adjustments were recorded as part of selling, general and administrative costs.
|
(3)
|
During the first quarter of fiscal 2016, we redeemed our 2018 Notes and issued senior notes due November 2023. As a result of the bond redemption, we incurred incremental expenses of $14.3 million, comprised of a call premium payment of $8.3 million, a $2.7 million payment of overlapping interest expense for 30 days 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 consolidated statements of operations.
|
(4)
|
During the fourth quarter of fiscal 2016, we recognized a non-cash impairment charge of $16.6 million related to our investment in two joint ventures as a result of changes in marketplace conditions, which impacted the expected cash flows and recoverability of the investment. The impairment is included within other income (expense).
|
|
|
GAAP to Non-GAAP Reconciliation
(in thousands) For the Fiscal Year Ended September |
||||||||||
Non-GAAP Adjustments
|
|
2017
|
|
2016
|
|
2015
|
||||||
Impairments of intangible assets
|
(1)
|
$
|
—
|
|
|
$
|
1,828
|
|
|
$
|
7,272
|
|
(Gain)/loss on disposal of plant assets
|
(2)
|
(2,050
|
)
|
|
(2,363
|
)
|
|
|
||||
Incremental expenses from note redemption and issuance
|
(3)
|
—
|
|
|
14,339
|
|
|
|
||||
Impairment of equity method investments
|
(4)
|
—
|
|
|
16,572
|
|
|
|
||||
Total non-GAAP adjustments
|
|
(2,050
|
)
|
|
30,376
|
|
|
7,272
|
|
|||
Tax effects of non-GAAP adjustments
|
|
(757
|
)
|
|
(10,492
|
)
|
|
(2,618
|
)
|
|||
Total net income impact from non-GAAP adjustments
|
|
$
|
(1,293
|
)
|
|
$
|
19,884
|
|
|
$
|
4,654
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
SG&A Expense Reconciliation
|
|
GAAP to Non-GAAP Reconciliation
(in thousands) For the Fiscal Year Ended September |
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
GAAP SG&A expense
|
|
$
|
476,696
|
|
|
$
|
421,864
|
|
|
$
|
389,345
|
|
SG&A expense impact from non-GAAP adjustments
|
(1) (2)
|
2,050
|
|
|
2,363
|
|
|
—
|
|
|||
Non-GAAP SG&A expense
|
|
$
|
478,746
|
|
|
$
|
424,227
|
|
|
$
|
389,345
|
|
GAAP SG&A expense as a percentage of net sales
|
|
23.2
|
%
|
|
23.1
|
%
|
|
24.0
|
%
|
|||
Non-GAAP SG&A expense as a percentage of net sales
|
|
23.3
|
%
|
|
23.2
|
%
|
|
24.0
|
%
|
|||
|
|
|
|
|
|
|
||||||
Operating Income Reconciliation
|
|
|
||||||||||
GAAP operating income
|
|
$
|
156,112
|
|
|
$
|
129,358
|
|
|
$
|
91,435
|
|
Total operating income impact from non-GAAP adjustments
|
(1)(2)
|
(2,050
|
)
|
|
(535
|
)
|
|
7,272
|
|
|||
Non-GAAP operating income
|
|
$
|
154,062
|
|
|
$
|
128,823
|
|
|
$
|
98,707
|
|
GAAP operating margin
|
|
7.6
|
%
|
|
7.1
|
%
|
|
5.5
|
%
|
|||
Non-GAAP operating margin
|
|
7.5
|
%
|
|
7.0
|
%
|
|
6.0
|
%
|
|||
|
|
|
|
|
|
|
||||||
Pet Segment Operating Income Reconciliation
|
|
|
||||||||||
GAAP Pet segment operating income
|
|
$
|
131,622
|
|
|
$
|
119,930
|
|
|
$
|
98,798
|
|
Total operating income impact from non-GAAP adjustments
|
(1)(2)
|
N/A
|
|
(535
|
)
|
|
7,272
|
|
||||
Non-GAAP Pet segment operating income
|
|
N/A
|
|
$
|
119,395
|
|
|
$
|
106,070
|
|
||
GAAP Pet segment operating margin
|
|
|
|
11.1
|
%
|
|
11.0
|
%
|
||||
Non-GAAP Pet operating margin
|
|
|
|
11.0
|
%
|
|
11.9
|
%
|
||||
|
|
|
|
|
|
|
||||||
Garden Segment Operating Income Reconciliation
|
|
|
||||||||||
GAAP Garden segment operating income
|
|
$
|
87,298
|
|
|
$
|
70,317
|
|
|
$
|
60,145
|
|
Total operating income impact from non-GAAP adjustments
|
(2)
|
(2,050
|
)
|
|
N/A
|
|
N/A
|
|||||
Non-GAAP Garden segment operating income
|
|
$
|
85,248
|
|
|
N/A
|
|
N/A
|
||||
GAAP Garden segment operating margin
|
|
10.8
|
%
|
|
|
|
|
|||||
Non-GAAP Garden segment operating margin
|
|
10.5
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
||||||
Interest Expense Reconciliation
|
|
|
||||||||||
GAAP interest expense
|
|
$
|
(28,209
|
)
|
|
$
|
(42,847
|
)
|
|
$
|
(40,027
|
)
|
Impact from non-GAAP adjustment
|
(3)
|
N/A
|
|
14,339
|
|
|
N/A
|
|||||
Non-GAAP interest expense
|
|
N/A
|
|
$
|
(28,508
|
)
|
|
N/A
|
|
|
GAAP to Non-GAAP Reconciliation
(in thousands, except per share amounts) For the Fiscal Year Ended September |
||||||||||
Other Income (Expense) Reconciliation
|
|
2017
|
|
2016
|
|
2015
|
||||||
GAAP other income (expense)
|
|
$
|
(1,621
|
)
|
|
$
|
(17,013
|
)
|
|
$
|
13
|
|
Impact from non-GAAP adjustment
|
(4)
|
N/A
|
|
16,572
|
|
|
N/A
|
|||||
Non-GAAP other income (expense)
|
|
N/A
|
|
$
|
(441
|
)
|
|
N/A
|
||||
|
|
|
|
|
|
|
||||||
Net Income and Diluted Net Income Per Share Reconciliation
|
|
|
||||||||||
GAAP net income attributable to Central Garden & Pet
|
|
$
|
78,828
|
|
|
$
|
44,514
|
|
|
$
|
31,971
|
|
Total non-GAAP adjustments
|
(1)(2) (3)(4)
|
(2,050
|
)
|
|
30,376
|
|
|
7,272
|
|
|||
Tax effects of non-GAAP adjustments
|
|
757
|
|
|
(10,492
|
)
|
|
(2,618
|
)
|
|||
Total net income impact from non-GAAP adjustments
|
|
(1,293
|
)
|
|
19,884
|
|
|
4,654
|
|
|||
Non-GAAP net income attributable to Central Garden & Pet
|
|
$
|
77,535
|
|
|
$
|
64,398
|
|
|
$
|
36,625
|
|
GAAP diluted net income per share
|
|
$
|
1.52
|
|
|
$
|
0.87
|
|
|
$
|
0.64
|
|
Non-GAAP diluted net income per share
|
|
$
|
1.50
|
|
|
$
|
1.26
|
|
|
$
|
0.74
|
|
Shares used in GAAP and non-GAAP diluted net earnings per share calculation
|
|
51,820
|
|
|
51,075
|
|
|
49,638
|
|
|
|
GAAP to Non-GAAP Reconciliation
For the Fiscal Year Ended September 30, 2017 |
||||||||||||||||
|
|
Consolidated
|
|
Pet Segment
|
|
Garden Segment
|
||||||||||||
|
|
|
|
Percent Change
|
|
|
|
Percent Change
|
|
|
|
Percent Change
|
||||||
Reported net sales FY 2017 (GAAP)
|
|
$
|
2,054.5
|
|
|
|
|
$
|
1,246.4
|
|
|
|
|
$
|
808.1
|
|
|
|
Reported net sales FY 2016 (GAAP)
|
|
1,829.0
|
|
|
|
|
1,081.8
|
|
|
|
|
747.2
|
|
|
|
|||
Increase in net sales
|
|
225.5
|
|
|
12.3%
|
|
164.6
|
|
|
15.2%
|
|
60.9
|
|
|
8.2%
|
|||
Effect of acquisitions and dispositions on increase in net sales
|
|
104.7
|
|
|
|
|
110.3
|
|
|
|
|
(5.6
|
)
|
|
|
|||
Increase in organic net sales
|
|
120.8
|
|
|
6.6%
|
|
54.3
|
|
|
5.0%
|
|
66.5
|
|
|
8.9%
|
|||
Estimated impact of extra week in fiscal 2017 on organic sales
|
|
32.8
|
|
|
|
|
21.4
|
|
|
|
|
11.4
|
|
|
|
|||
Organic net sales adjusted for extra week
|
|
$
|
88.0
|
|
|
4.8%
|
|
$
|
32.9
|
|
|
3.0%
|
|
$
|
55.1
|
|
|
7.4%
|
|
|
Fiscal Year Ended
|
|||||||
|
|
September 30, 2017
|
|
September 24, 2016
|
|
September 26, 2015
|
|||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold and occupancy
|
|
69.2
|
|
|
69.8
|
|
|
70.4
|
|
Gross profit
|
|
30.8
|
|
|
30.2
|
|
|
29.6
|
|
Selling, general and administrative
|
|
23.2
|
|
|
23.1
|
|
|
23.6
|
|
Intangible asset impairment
|
|
—
|
|
|
—
|
|
|
0.5
|
|
Operating income
|
|
7.6
|
|
|
7.1
|
|
|
5.5
|
|
Interest expense, net
|
|
(1.4
|
)
|
|
(2.3
|
)
|
|
(2.4
|
)
|
Other income (expense)
|
|
(0.1
|
)
|
|
(0.9
|
)
|
|
—
|
|
Income taxes
|
|
2.3
|
|
|
1.3
|
|
|
1.1
|
|
Noncontrolling interest
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
Net income (loss)
|
|
3.8
|
%
|
|
2.4
|
%
|
|
1.9
|
%
|
Category
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
Other pet products
|
|
$
|
841.4
|
|
|
$
|
689.3
|
|
|
$
|
594.7
|
|
|
Other garden supplies
|
|
464.9
|
|
|
331.3
|
|
|
343.5
|
|
|
|||
Dog and cat products
|
|
405.0
|
|
|
326.0
|
|
|
233.0
|
|
|
|||
Garden controls and fertilizer products
|
|
343.2
|
|
|
298.8
|
|
|
286.3
|
|
|
|||
Wild bird feed
|
|
—
|
|
(1)
|
183.6
|
|
|
193.2
|
|
|
|||
Total
|
|
$
|
2,054.5
|
|
|
$
|
1,829.0
|
|
|
$
|
1,650.7
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operations
|
|
$
|
114,309
|
|
|
$
|
151,426
|
|
|
$
|
87,449
|
|
Less: capital expenditures
|
|
(44,659
|
)
|
|
(27,622
|
)
|
|
(22,030
|
)
|
|||
Free cash flow
|
|
$
|
69,650
|
|
|
$
|
123,804
|
|
|
$
|
65,419
|
|
Free cash flow as a percentage of net sales
|
|
3.4
|
%
|
|
6.8
|
%
|
|
4.0
|
%
|
Contractual Obligations
|
|
Fiscal
2018
|
|
Fiscal
2019
|
|
Fiscal
2020
|
|
Fiscal
2021
|
|
Fiscal
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||
Long-term debt, including current maturities (1)
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400.0
|
|
|
$
|
400.5
|
|
Interest payment obligations (2)
|
|
24.5
|
|
|
24.5
|
|
|
24.5
|
|
|
24.5
|
|
|
24.5
|
|
|
2.0
|
|
|
124.5
|
|
|||||||
Operating leases
|
|
26.5
|
|
|
21.4
|
|
|
16.6
|
|
|
12.2
|
|
|
8.8
|
|
|
25.9
|
|
|
111.4
|
|
|||||||
Purchase commitments (3)
|
|
104.4
|
|
|
31.3
|
|
|
18.9
|
|
|
11.4
|
|
|
4.3
|
|
|
0.8
|
|
|
171.1
|
|
|||||||
Performance-based payments (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
155.8
|
|
|
$
|
77.2
|
|
|
$
|
60.1
|
|
|
$
|
48.1
|
|
|
$
|
37.6
|
|
|
$
|
428.7
|
|
|
$
|
807.5
|
|
(1)
|
Excludes $1.8 million of outstanding letters of credit related to normal business transactions. Excludes the unamortized portion of deferred financing costs associated with the 2023 Notes of $4.8 million as of September 30, 2017, which is amortizable until November 2023 and is included in the carrying value of long-term debt. See
Note 10
to the consolidated financial statements for further discussion of long-term debt.
|
(2)
|
Estimated interest payments to be made on our 2023 Notes. See
Note 10
to the consolidated financial statements for description of interest rate terms.
|
(3)
|
Contracts for purchases of grains, grass seed and pet food ingredients, used primarily to mitigate risk associated with increases in market prices and commodity availability.
|
(4)
|
Possible performance-based payments associated with prior acquisitions of businesses are not included in the above table, because they are based on future performance of the businesses acquired, which is not yet known. Performance-based payments of approximately $1.3 million were made in fiscal 2017 related to B2E, acquired in fiscal 2013, and Hydro-Organics Wholesale, Inc., acquired in fiscal 2016. Potential performance-based periods extend through 2020 for B2E and 2025 for Hydro-Organics Wholesale, Inc. Payments are capped at $1.0 million per year related to Hydro-Organics Wholesale, Inc.
|
(a)
|
The following documents are filed as part of this report:
|
(i)
|
Consolidated Financial Statements of Central Garden & Pet Company are attached to this Form 10-K beginning on page F-1:
|
(2)
|
Exhibits:
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit
Number
|
|
Exhibit
|
|
Form
|
|
File
No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
|
10-K
|
|
001-33268
|
|
3.1
|
|
12/14/2006
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
3.2
|
|
12/10/2015
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
Exhibit
Number
|
|
Exhibit
|
|
Form
|
|
File
No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
|
8-K
|
|
001-33268
|
|
4.2
|
|
3/8/2010
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
4.6
|
|
12/10/2015
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
4.5
|
|
12/2/2016
|
|
|
||
|
|
10-Q
|
|
001-33268
|
|
4.1
|
|
2/2/2017
|
|
|
||
|
|
10-Q
|
|
001-33268
|
|
4.1
|
|
8/3/2017
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
10-Q
|
|
001-33268
|
|
10.1
|
|
5/5/2016
|
|
|
||
|
|
8-K
|
|
001-33268
|
|
10.2
|
|
2/15/2012
|
|
|
||
|
|
10-K
|
|
000-20242
|
|
10/5/2001
|
|
12/9/2004
|
|
|
||
|
|
10-K
|
|
000-20242
|
|
10/5/2002
|
|
12/9/2004
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
10/4/2003
|
|
11/19/2010
|
|
|
||
|
|
10-Q
|
|
001-33268
|
|
10.1
|
|
5/4/2017
|
|
|
||
|
|
10-Q
|
|
000-20242
|
|
10/6/2001
|
|
2/3/2005
|
|
|
||
|
|
10-Q
|
|
000-20242
|
|
10/6/2002
|
|
2/3/2005
|
|
|
||
|
|
10-K/A
|
|
000-20242
|
|
10.20
|
|
1/20/1999
|
|
|
||
|
|
10-Q
|
|
000-20242
|
|
10/7/2001
|
|
8/8/2003
|
|
|
||
|
|
8-K
|
|
000-20242
|
|
10.1
|
|
4/14/2006
|
|
|
CENTRAL GARDEN & PET COMPANY
|
||
|
|
|
|
By
|
/s/ George C. Roeth
|
|
|
George C. Roeth
|
|
|
Chief Executive Officer and President
|
|
|
|
|
|
Signature
|
|
Capacity
|
|
Date
|
/s/ George C. Roeth
|
|
Director, Chief Executive Officer and President (Principal Executive Officer)
|
|
November 29, 2017
|
George C. Roeth
|
|
|
||
|
|
|
|
|
/s/ Nicholas Lahanas
|
|
Chief Financial Officer
(Principal Financial Officer) |
|
November 29, 2017
|
Nicholas Lahanas
|
|
|
||
|
|
|
||
/s/ Howard A. Machek
|
|
Senior Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
|
|
November 29, 2017
|
Howard A. Machek
|
|
|
||
|
|
|
|
|
/s/ William E. Brown
|
|
Chairman
|
|
November 29, 2017
|
William E. Brown
|
|
|
||
|
|
|
||
/s/ John B. Balousek
|
|
Director
|
|
November 29, 2017
|
John B. Balousek
|
|
|
||
|
|
|
||
/s/ Thomas J. Colligan
|
|
Director
|
|
November 29, 2017
|
Thomas J. Colligan
|
|
|
||
|
|
|
||
/s/ Brooks M. Pennington, III
|
|
Director
|
|
November 29, 2017
|
Brooks M. Pennington, III
|
|
|
||
|
|
|
||
/s/ Alfred A. Piergallini
|
|
Director
|
|
November 29, 2017
|
Alfred A. Piergallini
|
|
|
||
|
|
|
||
/s/ John R. Ranelli
|
|
Director
|
|
November 29, 2017
|
John R. Ranelli
|
|
|
||
|
|
|
||
/s/ Mary Beth Springer
|
|
Director
|
|
November 29, 2017
|
Mary Beth Springer
|
|
|
||
|
|
|
||
/s/ Andrew K. Woeber
|
|
Director
|
|
November 29, 2017
|
Andrew K. Woeber
|
|
|
||
|
|
|
|
|
Central Garden & Pet Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017 |
|
September 24,
2016 |
||||
|
|
(in thousands)
|
||||||
ASSETS
|
|
|
||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
32,397
|
|
|
$
|
92,982
|
|
Restricted cash
|
|
12,645
|
|
|
10,910
|
|
||
Accounts receivable, net
|
|
237,868
|
|
|
201,151
|
|
||
Inventories
|
|
382,101
|
|
|
362,004
|
|
||
Prepaid expenses and other
|
|
18,045
|
|
|
16,249
|
|
||
Total current assets
|
|
683,056
|
|
|
683,296
|
|
||
Plant, property and equipment, net
|
|
180,913
|
|
|
158,224
|
|
||
Goodwill
|
|
256,275
|
|
|
231,385
|
|
||
Other intangible assets, net
|
|
116,067
|
|
|
95,865
|
|
||
Other assets
|
|
70,595
|
|
|
11,913
|
|
||
Total
|
|
$
|
1,306,906
|
|
|
$
|
1,180,683
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
103,283
|
|
|
$
|
102,413
|
|
Accrued expenses
|
|
116,549
|
|
|
99,343
|
|
||
Current portion of long-term debt
|
|
375
|
|
|
463
|
|
||
Total current liabilities
|
|
220,207
|
|
|
202,219
|
|
||
Long-term debt
|
|
395,278
|
|
|
394,806
|
|
||
Deferred income taxes and other long-term obligations
|
|
54,279
|
|
|
29,071
|
|
||
Commitments and contingencies
(Note 11)
|
|
|
|
|
||||
Equity:
|
|
|
|
|
||||
Common stock
|
|
122
|
|
|
120
|
|
||
Class A common stock
|
|
380
|
|
|
374
|
|
||
Class B stock
|
|
16
|
|
|
16
|
|
||
Additional paid-in capital
|
|
396,790
|
|
|
393,297
|
|
||
Retained earnings
|
|
239,329
|
|
|
160,501
|
|
||
Accumulated other comprehensive loss
|
|
(951
|
)
|
|
(1,294
|
)
|
||
Total Central Garden & Pet shareholders’ equity
|
|
635,686
|
|
|
553,014
|
|
||
Noncontrolling interest
|
|
1,456
|
|
|
1,573
|
|
||
Total equity
|
|
637,142
|
|
|
554,587
|
|
||
Total
|
|
$
|
1,306,906
|
|
|
$
|
1,180,683
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
September 30,
2017 |
|
September 24,
2016 |
|
September 26,
2015 |
||||||
|
|
(in thousands, except per share amounts)
|
||||||||||
Net sales
|
|
$
|
2,054,478
|
|
|
$
|
1,829,017
|
|
|
$
|
1,650,737
|
|
Cost of goods sold and occupancy
|
|
1,421,670
|
|
|
1,275,967
|
|
|
1,162,685
|
|
|||
Gross profit
|
|
632,808
|
|
|
553,050
|
|
|
488,052
|
|
|||
Selling, general and administrative expenses
|
|
476,696
|
|
|
421,864
|
|
|
389,345
|
|
|||
Intangible asset impairment
|
|
—
|
|
|
1,828
|
|
|
7,272
|
|
|||
Operating income
|
|
156,112
|
|
|
129,358
|
|
|
91,435
|
|
|||
Interest expense
|
|
(28,209
|
)
|
|
(42,847
|
)
|
|
(40,027
|
)
|
|||
Interest income
|
|
147
|
|
|
140
|
|
|
129
|
|
|||
Other income (expense)
|
|
(1,621
|
)
|
|
(17,013
|
)
|
|
13
|
|
|||
Income before income taxes and noncontrolling interest
|
|
126,429
|
|
|
69,638
|
|
|
51,550
|
|
|||
Income tax expense
|
|
46,699
|
|
|
24,053
|
|
|
18,535
|
|
|||
Net income including noncontrolling interest
|
|
79,730
|
|
|
45,585
|
|
|
33,015
|
|
|||
Net income attributable to noncontrolling interest
|
|
902
|
|
|
1,071
|
|
|
1,044
|
|
|||
Net income attributable to Central Garden & Pet Company
|
|
$
|
78,828
|
|
|
$
|
44,514
|
|
|
$
|
31,971
|
|
Net income per share attributable to Central Garden & Pet Company:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.57
|
|
|
$
|
0.91
|
|
|
$
|
0.66
|
|
Diluted
|
|
$
|
1.52
|
|
|
$
|
0.87
|
|
|
$
|
0.64
|
|
Weighted average shares used in the computation of net income per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
50,230
|
|
|
48,964
|
|
|
48,562
|
|
|||
Diluted
|
|
51,820
|
|
|
51,075
|
|
|
49,638
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
September 30,
2017 |
|
September 24,
2016 |
|
September 26,
2015 |
||||||
Net income
|
|
$
|
79,730
|
|
|
$
|
45,585
|
|
|
$
|
33,015
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation
|
|
343
|
|
|
(1,458
|
)
|
|
(1,078
|
)
|
|||
Unrealized loss on securities
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Reclassification of loss on available for sale securities to net income
|
|
—
|
|
|
—
|
|
|
20
|
|
|||
Total comprehensive income
|
|
80,073
|
|
|
44,127
|
|
|
31,947
|
|
|||
Comprehensive income attributable to noncontrolling interests
|
|
902
|
|
|
1,071
|
|
|
1,044
|
|
|||
Comprehensive income attributable to Central Garden & Pet Company
|
|
$
|
79,171
|
|
|
$
|
43,056
|
|
|
$
|
30,903
|
|
|
Central Garden & Pet Company
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Class A Common
Stock |
|
Class B Stock
|
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
|
|
Non-controlling
Interest |
|
Total
|
|||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||
Balance,
September 27, 2014 |
12,437,307
|
|
|
$
|
124
|
|
|
36,887,311
|
|
|
$
|
369
|
|
|
1,652,262
|
|
|
$
|
16
|
|
|
$
|
396,586
|
|
|
$
|
86,396
|
|
|
$
|
1,232
|
|
|
$
|
484,723
|
|
|
$
|
1,730
|
|
|
$
|
486,453
|
|
Amortization of share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,378
|
|
|
—
|
|
|
—
|
|
|
6,378
|
|
|
—
|
|
|
6,378
|
|
|||||||||
Tax deficiency on exercise of stock options, net of tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(358
|
)
|
|
—
|
|
|
—
|
|
|
(358
|
)
|
|
—
|
|
|
(358
|
)
|
|||||||||
Restricted share activity
|
(12,073
|
)
|
|
—
|
|
|
156,477
|
|
|
2
|
|
|
|
|
|
|
(1,233
|
)
|
|
|
|
|
|
(1,231
|
)
|
|
|
|
(1,231
|
)
|
||||||||||||||
Issuance of common stock
|
641
|
|
|
—
|
|
|
536,827
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||||
Repurchase of common stock
|
(517,558
|
)
|
|
(5
|
)
|
|
(1,118,316
|
)
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12,727
|
)
|
|
(2,380
|
)
|
|
—
|
|
|
(15,124
|
)
|
|
—
|
|
|
(15,124
|
)
|
|||||||||
Distribution to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,680
|
)
|
|
(1,680
|
)
|
|||||||||||||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,068
|
)
|
|
(1,068
|
)
|
|
—
|
|
|
(1,068
|
)
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,971
|
|
|
—
|
|
|
31,971
|
|
|
1,044
|
|
|
33,015
|
|
|||||||||
Balance,
September 26, 2015 |
11,908,317
|
|
|
119
|
|
|
36,462,299
|
|
|
364
|
|
|
1,652,262
|
|
|
16
|
|
|
388,636
|
|
|
115,987
|
|
|
164
|
|
|
505,286
|
|
|
1,094
|
|
|
506,380
|
|
|||||||||
Amortization of share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,552
|
|
|
—
|
|
|
—
|
|
|
6,552
|
|
|
—
|
|
|
6,552
|
|
|||||||||
Tax benefit on exercise of stock options, net of tax deficiency
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,865
|
|
|
—
|
|
|
—
|
|
|
6,865
|
|
|
—
|
|
|
6,865
|
|
|||||||||
Restricted share activity
|
|
|
|
—
|
|
|
202,916
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(1,341
|
)
|
|
|
|
|
|
(1,339
|
)
|
|
|
|
(1,339
|
)
|
||||||||||||
Issuance of common stock
|
90,155
|
|
|
1
|
|
|
753,357
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
(7,415
|
)
|
|
—
|
|
|
—
|
|
|
(7,406
|
)
|
|
—
|
|
|
(7,406
|
)
|
|||||||||
Distribution to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(592
|
)
|
|
(592
|
)
|
|||||||||||||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,458
|
)
|
|
(1,458
|
)
|
|
—
|
|
|
(1,458
|
)
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,514
|
|
|
—
|
|
|
44,514
|
|
|
1,071
|
|
|
45,585
|
|
|||||||||
Balance,
September 24, 2016 |
11,998,472
|
|
|
120
|
|
|
37,418,572
|
|
|
374
|
|
|
1,652,262
|
|
|
16
|
|
|
393,297
|
|
|
160,501
|
|
|
(1,294
|
)
|
|
553,014
|
|
|
1,573
|
|
|
554,587
|
|
|||||||||
Amortization of share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,700
|
|
|
—
|
|
|
—
|
|
|
8,700
|
|
|
—
|
|
|
8,700
|
|
|||||||||
Tax benefit on exercise of stock options, net of tax deficiency
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,942
|
|
|
—
|
|
|
—
|
|
|
19,942
|
|
|
—
|
|
|
19,942
|
|
|||||||||
Restricted share activity
|
(16,764
|
)
|
|
—
|
|
|
(79,362
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,765
|
)
|
|
—
|
|
|
—
|
|
|
(7,765
|
)
|
|
—
|
|
|
(7,765
|
)
|
|||||||||
Issuance of common stock
|
178,315
|
|
|
2
|
|
|
680,526
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(17,384
|
)
|
|
—
|
|
|
—
|
|
|
(17,376
|
)
|
|
—
|
|
|
(17,376
|
)
|
|||||||||
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,019
|
)
|
|
(1,019
|
)
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
343
|
|
|
343
|
|
|
—
|
|
|
343
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,828
|
|
|
—
|
|
|
78,828
|
|
|
902
|
|
|
79,730
|
|
|||||||||
Balance,
September 30, 2017 |
12,160,023
|
|
|
$
|
122
|
|
|
38,019,736
|
|
|
$
|
380
|
|
|
1,652,262
|
|
|
$
|
16
|
|
|
$
|
396,790
|
|
|
$
|
239,329
|
|
|
$
|
(951
|
)
|
|
$
|
635,686
|
|
|
$
|
1,456
|
|
|
$
|
637,142
|
|
|
Fiscal Year Ended
|
||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 26,
2015 |
||||||
|
(in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
79,730
|
|
|
$
|
45,585
|
|
|
$
|
33,015
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
42,719
|
|
|
40,001
|
|
|
33,703
|
|
|||
Amortization of deferred financing costs
|
1,361
|
|
|
1,504
|
|
|
1,996
|
|
|||
Stock-based compensation
|
11,115
|
|
|
8,356
|
|
|
8,315
|
|
|||
Excess tax benefits from stock-based awards
|
(19,946
|
)
|
|
(6,869
|
)
|
|
(2,154
|
)
|
|||
Deferred income taxes
|
10,789
|
|
|
3,189
|
|
|
15,566
|
|
|||
Gain on sale of property and equipment
|
(2,050
|
)
|
|
(2,544
|
)
|
|
—
|
|
|||
Loss on disposal of property, plant and equipment
|
65
|
|
|
1,163
|
|
|
702
|
|
|||
Write-off of deferred financing costs
|
—
|
|
|
3,337
|
|
|
537
|
|
|||
Asset impairments
|
—
|
|
|
19,367
|
|
|
7,272
|
|
|||
Other
|
3,999
|
|
|
987
|
|
|
(69
|
)
|
|||
Changes in assets and liabilities (excluding businesses acquired):
|
|
|
|
|
|
||||||
Receivables
|
(32,419
|
)
|
|
27,444
|
|
|
(9,093
|
)
|
|||
Inventories
|
(15,885
|
)
|
|
(6,519
|
)
|
|
4,403
|
|
|||
Prepaid expenses and other assets
|
2,845
|
|
|
6,901
|
|
|
(4,325
|
)
|
|||
Accounts payable
|
(2,143
|
)
|
|
(2,793
|
)
|
|
(4,757
|
)
|
|||
Accrued expenses
|
35,018
|
|
|
11,234
|
|
|
1,485
|
|
|||
Other long-term obligations
|
(889
|
)
|
|
1,083
|
|
|
853
|
|
|||
Net cash provided by operating activities
|
114,309
|
|
|
151,426
|
|
|
87,449
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(44,659
|
)
|
|
(27,622
|
)
|
|
(22,030
|
)
|
|||
Businesses acquired, net of cash acquired
|
(103,880
|
)
|
|
(69,001
|
)
|
|
(38,384
|
)
|
|||
Escrow deposit for acquisition-related contingent consideration
|
(6,000
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from asset sales
|
8,547
|
|
|
3,911
|
|
|
—
|
|
|||
Change in restricted cash and cash equivalents.
|
(1,735
|
)
|
|
2,247
|
|
|
1,126
|
|
|||
Investment in equity method investees
|
(12,495
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from short-term investments.
|
—
|
|
|
—
|
|
|
9,997
|
|
|||
Investment in short-term investments
|
—
|
|
|
—
|
|
|
(17
|
)
|
|||
Other investing activities
|
(4,355
|
)
|
|
(730
|
)
|
|
(546
|
)
|
|||
Net cash used in investing activities
|
(164,577
|
)
|
|
(91,195
|
)
|
|
(49,854
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Repayments on revolving line of credit
|
(552,000
|
)
|
|
(419,000
|
)
|
|
(312,000
|
)
|
|||
Borrowings on revolving line of credit
|
552,000
|
|
|
419,000
|
|
|
312,000
|
|
|||
Repayments of long-term debt
|
(463
|
)
|
|
(400,307
|
)
|
|
(50,289
|
)
|
|||
Issuance of long-term debt
|
—
|
|
|
400,000
|
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
—
|
|
|
324
|
|
|
200
|
|
|||
Excess tax benefits from stock-based awards
|
19,946
|
|
|
6,869
|
|
|
2,154
|
|
|||
Repurchase of common stock, including shares surrendered for tax withholding
|
(27,556
|
)
|
|
(10,873
|
)
|
|
(18,497
|
)
|
|||
Payments of contingent consideration
|
(1,300
|
)
|
|
(2,026
|
)
|
|
—
|
|
|||
Distribution to noncontrolling interest
|
(1,019
|
)
|
|
(592
|
)
|
|
(1,680
|
)
|
|||
Payment of financing costs
|
—
|
|
|
(7,560
|
)
|
|
(258
|
)
|
|||
Net cash used by financing activities
|
(10,392
|
)
|
|
(14,165
|
)
|
|
(68,370
|
)
|
|||
Effect of exchange rate changes on cash and equivalents
|
75
|
|
|
(668
|
)
|
|
(317
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(60,585
|
)
|
|
45,398
|
|
|
(31,092
|
)
|
|||
Cash and cash equivalents at beginning of year
|
92,982
|
|
|
47,584
|
|
|
78,676
|
|
|||
Cash and cash equivalents at end of year
|
$
|
32,397
|
|
|
$
|
92,982
|
|
|
$
|
47,584
|
|
Supplemental information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
27,878
|
|
|
$
|
32,995
|
|
|
$
|
39,855
|
|
Cash paid for income taxes – net of refunds
|
10,560
|
|
|
10,399
|
|
|
3,192
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital expenditures incurred but not paid
|
3,106
|
|
|
2,743
|
|
|
2,087
|
|
|||
Liability for contingent performance based payments
|
2,830
|
|
|
2,590
|
|
|
(101
|
)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Liability for contingent consideration (a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,343
|
|
|
$
|
9,343
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,343
|
|
|
$
|
9,343
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Liability for contingent consideration (a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,113
|
|
|
$
|
5,113
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,113
|
|
|
$
|
5,113
|
|
(a)
|
The liability for contingent consideration relates to an earn-out for B2E, acquired in December 2012, future performance-based contingent payments for Hydro-Organics Wholesale, Inc., acquired in October 2015, and future performance-based contingent payment for Segrest, Inc., acquired in October 2016. 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 consolidated balance sheets.
|
|
Amount
|
||
Balance as of September 24, 2016
|
$
|
5,113
|
|
Estimated contingent performance-based consideration established at the time of acquisition
|
2,700
|
|
|
Changes in the fair value of contingent performance-based payments
|
2,830
|
|
|
Performance-based payments made
|
(1,300
|
)
|
|
Balance as of September 30, 2017
|
$
|
9,343
|
|
|
Amounts Previously Recognized as of Acquisition Date (1)
|
|
Measurement Period Adjustments
|
|
Amounts Recognized as of Acquisition Date (as Adjusted)
|
||||||
Purchase Price
|
|
|
|
|
|
||||||
Cash paid, net of cash acquired
|
$
|
54,043
|
|
|
$
|
—
|
|
|
$
|
54,043
|
|
Contingent consideration
|
6,000
|
|
|
(3,300
|
)
|
|
2,700
|
|
|||
|
$
|
60,043
|
|
|
$
|
(3,300
|
)
|
|
$
|
56,743
|
|
|
|
|
|
|
|
||||||
Allocation
|
|
|
|
|
|
||||||
Current assets, net of cash and cash equivalents acquired
|
$
|
7,403
|
|
|
$
|
(300
|
)
|
|
$
|
7,103
|
|
Fixed assets
|
7,011
|
|
|
2,242
|
|
|
9,253
|
|
|||
Other assets
|
47,704
|
|
|
(47,704
|
)
|
|
—
|
|
|||
Goodwill
|
|
|
25,890
|
|
|
25,890
|
|
||||
Other intangible assets
|
|
|
27,650
|
|
|
27,650
|
|
||||
Current liabilities
|
(2,075
|
)
|
|
|
|
(2,075
|
)
|
||||
Deferred Tax Liability
|
|
|
(11,078
|
)
|
|
(11,078
|
)
|
||||
|
$
|
60,043
|
|
|
$
|
(3,300
|
)
|
|
$
|
56,743
|
|
In thousands
|
Amounts Previously Recognized as of Acquisition Date (1)
|
|
Measurement Period Adjustments
|
|
Amounts Recognized as of Acquisition Date (as Adjusted)
|
||||||
Current assets, net of cash and cash equivalents acquired
|
$
|
41,170
|
|
|
$
|
156
|
|
|
$
|
41,326
|
|
Fixed assets
|
521
|
|
|
17
|
|
|
538
|
|
|||
Goodwill
|
—
|
|
|
15,058
|
|
|
15,058
|
|
|||
Other assets
|
33,810
|
|
|
(33,790
|
)
|
|
20
|
|
|||
Other intangible assets, net
|
—
|
|
|
18,700
|
|
|
18,700
|
|
|||
Current liabilities
|
(14,586
|
)
|
|
(40
|
)
|
|
(14,626
|
)
|
|||
Net assets acquired, less cash and cash equivalents
|
$
|
60,915
|
|
|
$
|
101
|
|
|
$
|
61,016
|
|
|
|
|
In thousands (unaudited)
|
||||||
|
|
|
Fiscal Year Ended
|
||||||
|
|
|
September 24, 2016
|
|
September 26, 2015
|
||||
Pro forma net sales
|
|
|
$
|
1,856,691
|
|
|
$
|
1,815,997
|
|
In thousands
|
Amounts Previously Recognized as of Acquisition Date (1)
|
|
Measurement Period Adjustments
|
|
Amounts Recognized as of Acquisition Date (as Adjusted)
|
||||||
Current assets, net of cash and cash equivalents acquired
|
$
|
20,458
|
|
|
$
|
315
|
|
|
$
|
20,773
|
|
Fixed assets
|
1,670
|
|
|
—
|
|
|
1,670
|
|
|||
Goodwill
|
—
|
|
|
1,365
|
|
|
1,365
|
|
|||
Other assets
|
5,356
|
|
|
(5,356
|
)
|
|
—
|
|
|||
Other intangible assets, net
|
—
|
|
|
4,510
|
|
|
4,510
|
|
|||
Current liabilities
|
(5,100
|
)
|
|
—
|
|
|
(5,100
|
)
|
|||
Net assets acquired, less cash and cash equivalents
|
$
|
22,384
|
|
|
$
|
834
|
|
|
$
|
23,218
|
|
Description
|
Balances at
Beginning
of Period
|
|
Charged/
(Credited) to
Costs and
Expenses
|
|
Asset
Write-Offs,
Less
Recoveries
|
|
Balances at
End of
Period
|
||||
Fiscal Year Ended September 26, 2015
|
25,212
|
|
|
741
|
|
|
(6,657
|
)
|
|
19,296
|
|
Fiscal Year Ended September 24, 2016
|
19,296
|
|
|
6,041
|
|
|
(4,268
|
)
|
|
21,069
|
|
Fiscal Year Ended September 30, 2017
|
21,069
|
|
|
2,921
|
|
|
(2,554
|
)
|
|
21,436
|
|
|
September 30,
2017 |
|
September 24,
2016 |
||||
Raw materials
|
$
|
116,591
|
|
|
$
|
120,786
|
|
Work in progress
|
16,394
|
|
|
17,378
|
|
||
Finished goods
|
241,420
|
|
|
217,788
|
|
||
Supplies
|
7,696
|
|
|
6,052
|
|
||
Total inventories, net
|
$
|
382,101
|
|
|
$
|
362,004
|
|
|
|
September 30,
2017 |
|
September 24,
2016 |
||||
Land
|
|
$
|
8,942
|
|
|
$
|
8,825
|
|
Buildings and improvements
|
|
131,280
|
|
|
115,965
|
|
||
Transportation equipment
|
|
7,141
|
|
|
5,574
|
|
||
Machine and warehouse equipment
|
|
221,329
|
|
|
193,525
|
|
||
Capitalized software
|
|
117,360
|
|
|
109,641
|
|
||
Office furniture and equipment
|
|
27,355
|
|
|
25,282
|
|
||
|
|
513,407
|
|
|
458,812
|
|
||
Accumulated depreciation and amortization
|
|
(332,494
|
)
|
|
(300,588
|
)
|
||
|
|
$
|
180,913
|
|
|
$
|
158,224
|
|
|
Garden Products
Segment
|
|
Pet Products
Segment
|
|
Total
|
||||||
Balance as of September 27, 2014
|
|
|
|
|
|
||||||
Goodwill
|
$
|
213,583
|
|
|
$
|
404,211
|
|
|
$
|
617,794
|
|
Accumulated impairment losses
|
(213,583
|
)
|
|
(195,978
|
)
|
|
(409,561
|
)
|
|||
|
—
|
|
|
208,233
|
|
|
208,233
|
|
|||
Additions in fiscal 2015
|
—
|
|
|
856
|
|
|
856
|
|
|||
Balance as of September 26, 2015
|
|
|
|
|
|
||||||
Goodwill
|
213,583
|
|
|
405,067
|
|
|
618,650
|
|
|||
Accumulated impairment losses
|
(213,583
|
)
|
|
(195,978
|
)
|
|
(409,561
|
)
|
|||
|
—
|
|
|
209,089
|
|
|
209,089
|
|
|||
Additions in fiscal 2016
|
5,473
|
|
|
16,823
|
|
|
22,296
|
|
|||
Balance as of September 24, 2016
|
|
|
|
|
|
||||||
Goodwill
|
219,056
|
|
|
421,890
|
|
|
640,946
|
|
|||
Accumulated impairment losses
|
(213,583
|
)
|
|
(195,978
|
)
|
|
(409,561
|
)
|
|||
|
5,473
|
|
|
225,912
|
|
|
231,385
|
|
|||
Additions in fiscal 2017
|
|
|
|
25,890
|
|
|
25,890
|
|
|||
Sale of business
|
|
|
(1,000
|
)
|
|
(1,000
|
)
|
||||
Balance as of September 30, 2017
|
|
|
|
|
|
||||||
Goodwill
|
219,056
|
|
|
446,780
|
|
|
665,836
|
|
|||
Accumulated impairment losses
|
(213,583
|
)
|
|
(195,978
|
)
|
|
(409,561
|
)
|
|||
|
$
|
5,473
|
|
|
$
|
250,802
|
|
|
$
|
256,275
|
|
|
Gross
|
|
Accumulated
Amortization
|
|
Accumulated
Impairment
|
|
Net
Carrying
Value
|
||||||||
|
|
|
(in millions)
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
||||||||
Marketing-related intangible assets – amortizable
|
$
|
16.9
|
|
|
$
|
(12.7
|
)
|
|
$
|
—
|
|
|
$
|
4.2
|
|
Marketing-related intangible assets – nonamortizable
|
62.7
|
|
|
—
|
|
|
(26.0
|
)
|
|
36.7
|
|
||||
Total
|
79.6
|
|
|
(12.7
|
)
|
|
(26.0
|
)
|
|
40.9
|
|
||||
Customer-related intangible assets – amortizable
|
91.6
|
|
|
(32.2
|
)
|
|
—
|
|
|
59.4
|
|
||||
Other acquired intangible assets – amortizable
|
22.1
|
|
|
(12.9
|
)
|
|
—
|
|
|
9.2
|
|
||||
Other acquired intangible assets – nonamortizable
|
7.8
|
|
|
—
|
|
|
(1.2
|
)
|
|
6.6
|
|
||||
Total
|
29.9
|
|
|
(12.9
|
)
|
|
(1.2
|
)
|
|
15.8
|
|
||||
Total other intangible assets
|
$
|
201.1
|
|
|
$
|
(57.8
|
)
|
|
$
|
(27.2
|
)
|
|
$
|
116.1
|
|
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
|
|
September 26, 2015
|
|
|
|
|
|
|
|
||||||||
Marketing-related intangible assets – amortizable
|
$
|
14.1
|
|
|
$
|
(10.4
|
)
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Marketing-related intangible assets – nonamortizable
|
59.6
|
|
|
—
|
|
|
(24.2
|
)
|
|
35.4
|
|
||||
Total
|
73.7
|
|
|
(10.4
|
)
|
|
(24.2
|
)
|
|
39.1
|
|
||||
Customer-related intangible assets – amortizable
|
43.3
|
|
|
(22.3
|
)
|
|
—
|
|
|
21.0
|
|
||||
Other acquired intangible assets – amortizable
|
19.3
|
|
|
(10.5
|
)
|
|
—
|
|
|
8.8
|
|
||||
Other acquired intangible assets – nonamortizable
|
7.8
|
|
|
—
|
|
|
(1.2
|
)
|
|
6.6
|
|
||||
Total
|
27.1
|
|
|
(10.5
|
)
|
|
(1.2
|
)
|
|
15.4
|
|
||||
Total other intangible assets
|
$
|
144.1
|
|
|
$
|
(43.2
|
)
|
|
$
|
(25.4
|
)
|
|
$
|
75.5
|
|
|
|
|
September 30,
2017 |
|
September 24,
2016 |
||||
|
|
(in thousands)
|
|||||||
Senior notes, interest at 6.125%, payable semi-annually, principal due November 2023
|
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Unamortized debt issuance costs
|
|
|
(4,840
|
)
|
|
(5,635
|
)
|
||
Net carrying value
|
|
|
395,160
|
|
|
394,365
|
|
||
Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, amended in April 2016
|
|
|
—
|
|
|
—
|
|
||
Other notes payable
|
|
|
493
|
|
|
904
|
|
||
Total
|
|
|
395,653
|
|
|
395,269
|
|
||
Less current portion
|
|
|
(375
|
)
|
|
(463
|
)
|
||
Long-term portion
|
|
|
$
|
395,278
|
|
|
$
|
394,806
|
|
|
(in thousands)
|
|
||
Fiscal year:
|
|
|
||
2018
|
$
|
375
|
|
|
2019
|
5
|
|
|
|
2020
|
113
|
|
|
|
2021
|
—
|
|
|
|
2022
|
—
|
|
|
|
Thereafter
|
400,000
|
|
|
|
Total
|
$
|
400,493
|
|
(1)
|
(1)
|
Debt repayments do not reflect the unamortized portion of deferred financing costs associated with the 2023 Notes of
$4.8 million
as of
September 30, 2017
, which is amortizable until November 2023 and is included in the carrying value.
|
|
Fiscal Year Ended
|
||||||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 26,
2015 |
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
32,755
|
|
|
$
|
18,592
|
|
|
$
|
2,301
|
|
State
|
3,034
|
|
|
2,140
|
|
|
643
|
|
|||
Foreign
|
121
|
|
|
110
|
|
|
25
|
|
|||
Total
|
35,910
|
|
|
20,842
|
|
|
2,969
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
11,227
|
|
|
2,796
|
|
|
14,843
|
|
|||
State
|
(1,038
|
)
|
|
463
|
|
|
625
|
|
|||
Foreign
|
600
|
|
|
(48
|
)
|
|
98
|
|
|||
Total
|
10,789
|
|
|
3,211
|
|
|
15,566
|
|
|||
Total
|
$
|
46,699
|
|
|
$
|
24,053
|
|
|
$
|
18,535
|
|
|
Fiscal Year Ended
|
|||||||
|
September 30,
2017 |
|
September 24,
2016 |
|
September 26,
2015 |
|||
Statutory federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
2.4
|
|
|
2.1
|
|
|
2.4
|
|
Other permanent differences
|
0.3
|
|
|
(1.6
|
)
|
|
(0.5
|
)
|
Adjustment of prior year accruals
|
(0.3
|
)
|
|
(0.6
|
)
|
|
(0.5
|
)
|
Credits
|
(0.6
|
)
|
|
(1.0
|
)
|
|
(0.3
|
)
|
Change in valuation allowances
|
—
|
|
|
0.5
|
|
|
—
|
|
Foreign rate differential
|
0.1
|
|
|
0.1
|
|
|
(0.1
|
)
|
Effective income tax rate (benefit)
|
36.9
|
%
|
|
34.5
|
%
|
|
36.0
|
%
|
|
September 30, 2017
|
|
September 24, 2016
|
||||||||||||
|
Deferred
Tax
Assets
|
|
Deferred
Tax
Liabilities
|
|
Deferred
Tax
Assets
|
|
Deferred
Tax
Liabilities
|
||||||||
|
(in thousands)
|
||||||||||||||
Allowance for doubtful accounts
|
$
|
7,790
|
|
|
$
|
—
|
|
|
$
|
7,634
|
|
|
$
|
—
|
|
Inventory write-downs
|
10,406
|
|
|
—
|
|
|
9,869
|
|
|
—
|
|
||||
Prepaid expenses
|
—
|
|
|
1,740
|
|
|
—
|
|
|
1,188
|
|
||||
Nondeductible reserves
|
1,485
|
|
|
—
|
|
|
1,632
|
|
|
—
|
|
||||
State taxes
|
276
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
Employee benefits
|
10,007
|
|
|
—
|
|
|
10,544
|
|
|
—
|
|
||||
Depreciation and amortization
|
—
|
|
|
84,059
|
|
|
—
|
|
|
62,778
|
|
||||
Equity loss
|
4,243
|
|
|
—
|
|
|
5,070
|
|
|
—
|
|
||||
State net operating loss carryforward
|
5,182
|
|
|
—
|
|
|
4,939
|
|
|
—
|
|
||||
Stock based compensation
|
3,097
|
|
|
—
|
|
|
2,642
|
|
|
—
|
|
||||
State credits
|
2,403
|
|
|
—
|
|
|
2,317
|
|
|
—
|
|
||||
Other
|
5,768
|
|
|
—
|
|
|
5,303
|
|
|
—
|
|
||||
Valuation allowance
|
(6,527
|
)
|
|
—
|
|
|
(6,583
|
)
|
|
—
|
|
||||
Total
|
$
|
44,130
|
|
|
$
|
85,799
|
|
|
$
|
43,386
|
|
|
$
|
63,966
|
|
|
|
||
Balance as of September 26, 2015
|
$
|
138
|
|
Increases related to prior year tax positions
|
51
|
|
|
Increases related to current year tax positions
|
66
|
|
|
Decreases related to prior year tax positions
|
—
|
|
|
Settlements
|
(1
|
)
|
|
Decreases related to lapse of statute of limitations
|
—
|
|
|
Balance as of September 24, 2016
|
$
|
254
|
|
Increases related to prior year tax positions
|
4
|
|
|
Increases related to current year tax positions
|
67
|
|
|
Decreases related to prior year tax positions
|
—
|
|
|
Settlements
|
—
|
|
|
Decreases related to lapse of statute of limitations
|
—
|
|
|
Balance as of September 30, 2017
|
$
|
325
|
|
|
Number of
Shares
(in thousands)
|
|
Weighted
Average Exercise
Price per Share
|
|
Weighted Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||
Outstanding at September 24, 2016
|
4,169
|
|
|
$
|
11.64
|
|
|
3 years
|
|
$
|
53,705
|
|
Granted
|
639
|
|
|
$
|
31.02
|
|
|
|
|
|
||
Exercised
|
(2,234
|
)
|
|
$
|
11.51
|
|
|
|
|
|
||
Canceled or expired
|
(103
|
)
|
|
$
|
11.33
|
|
|
|
|
|
||
Outstanding at September 30, 2017
|
2,471
|
|
|
$
|
16.79
|
|
|
4 years
|
|
$
|
50,420
|
|
Exercisable at September 26, 2015
|
2,910
|
|
|
$
|
10.74
|
|
|
2 years
|
|
17,226
|
|
|
Exercisable at September 24, 2016
|
1,732
|
|
|
$
|
11.46
|
|
|
2 years
|
|
22,954
|
|
|
Exercisable at September 30, 2017
|
458
|
|
|
$
|
10.80
|
|
|
2 years
|
|
12,097
|
|
|
Expected to vest after September 30, 2017
|
1,767
|
|
|
$
|
18.15
|
|
|
4 years
|
|
$
|
33,644
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value per
Share
|
|||
|
(in thousands)
|
|
|
|||
Nonvested at September 24, 2016
|
1,540
|
|
|
$
|
10.68
|
|
Granted
|
196
|
|
|
$
|
29.30
|
|
Vested
|
(567
|
)
|
|
$
|
9.94
|
|
Forfeited
|
(32
|
)
|
|
$
|
9.81
|
|
Nonvested at September 30, 2017
|
1,137
|
|
|
$
|
14.34
|
|
|
Fiscal Year Ended
September 30, 2017 |
|
Fiscal Year Ended
September 24, 2016 |
|
Fiscal Year Ended
September 26, 2015 |
|||||||||||||||||||||||||||
|
Net
Income
|
|
Shares
|
|
Per
Share
|
|
Net
Income
|
|
Shares
|
|
Per
Share
|
|
Net
Income
(Loss)
|
|
Shares
|
|
Per
Share
|
|||||||||||||||
|
(in thousands, except per share amounts)
|
|||||||||||||||||||||||||||||||
Basic EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) available to common shareholders
|
$
|
78,828
|
|
|
50,230
|
|
|
$
|
1.57
|
|
|
$
|
44,514
|
|
|
48,964
|
|
|
$
|
0.91
|
|
|
$
|
31,971
|
|
|
48,562
|
|
|
$
|
0.66
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Options to purchase common stock
|
|
|
992
|
|
|
(0.03
|
)
|
|
|
|
1,335
|
|
|
(0.02
|
)
|
|
|
|
520
|
|
|
(0.01
|
)
|
|||||||||
Restricted shares
|
|
|
598
|
|
|
(0.02
|
)
|
|
|
|
776
|
|
|
(0.02
|
)
|
|
|
|
556
|
|
|
(0.01
|
)
|
|||||||||
Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) available to common shareholders
|
$
|
78,828
|
|
|
51,820
|
|
|
$
|
1.52
|
|
|
$
|
44,514
|
|
|
51,075
|
|
|
$
|
0.87
|
|
|
$
|
31,971
|
|
|
49,638
|
|
|
$
|
0.64
|
|
|
Fiscal 2017
|
|
|
|||||||||||||||
|
1
st
Quarter
|
|
2
nd
Quarter
|
|
3
rd
Quarter
|
|
4
th
Quarter
|
|
|
|||||||||
|
(in thousands, except per share amounts)
|
|
|
|||||||||||||||
Net sales
|
$
|
419,498
|
|
|
$
|
569,924
|
|
|
$
|
574,592
|
|
|
$
|
490,464
|
|
|
|
|
Gross profit
|
120,678
|
|
|
183,529
|
|
|
183,273
|
|
|
145,328
|
|
|
|
|||||
Net income attributable to Central Garden & Pet Company
|
7,637
|
|
(1
|
)
|
34,684
|
|
|
32,248
|
|
|
4,259
|
|
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
$
|
0.15
|
|
|
$
|
0.69
|
|
|
$
|
0.64
|
|
|
$
|
0.08
|
|
|
|
|
Diluted
|
$
|
0.15
|
|
|
$
|
0.67
|
|
|
$
|
0.62
|
|
|
$
|
0.08
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
49,665
|
|
|
50,079
|
|
|
50,507
|
|
|
50,654
|
|
|
|
|||||
Diluted
|
51,810
|
|
|
51,983
|
|
|
51,825
|
|
|
51,935
|
|
|
|
|
Fiscal 2016
|
|
|
||||||||||||||||
|
1
st
Quarter
|
|
2
nd
Quarter
|
|
3
rd
Quarter
|
|
4
th
Quarter
|
|
|
||||||||||
|
(in thousands, except per share amounts)
|
|
|
||||||||||||||||
Net sales
|
$
|
359,812
|
|
|
$
|
541,249
|
|
|
$
|
514,544
|
|
|
$
|
413,412
|
|
|
|
||
Gross profit
|
99,786
|
|
|
169,339
|
|
|
163,745
|
|
|
120,180
|
|
|
|
||||||
Net income (loss) attributable to Central Garden & Pet Company
|
(8,602
|
)
|
(1
|
)
|
32,697
|
|
|
26,030
|
|
(2
|
)
|
(5,611
|
)
|
|
(3)
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.18
|
)
|
|
$
|
0.67
|
|
|
$
|
0.53
|
|
|
$
|
(0.11
|
)
|
|
|
||
Diluted
|
$
|
(0.18
|
)
|
|
$
|
0.65
|
|
|
$
|
0.51
|
|
|
$
|
(0.11
|
)
|
|
|
||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
48,566
|
|
|
48,717
|
|
|
49,120
|
|
|
49,453
|
|
|
|
||||||
Diluted
|
48,566
|
|
|
50,445
|
|
|
51,063
|
|
|
49,453
|
|
|
|
(1)
|
During the first quarter of fiscal 2016, the Company redeemed its 2018 Notes and issued senior notes due November 2023. As a result of the bond redemption, the Company incurred incremental expenses of
$14.3 million
, comprised of a call premium payment of
$8.3 million
, a
$2.7 million
payment of overlapping interest expense for
30
days and a
$3.3 million
non-cash charge for the write off of unamortized deferred financing costs and discount related to the 2018 Notes.
|
(2)
|
The Company recognized a
$2.4 million
gain in its Pet segment from the sale of a manufacturing plant resulting from rationalizing its facilities to reduce excess capacity during the third quarter of fiscal 2016.
|
(3)
|
The Company recognized a non-cash impairment charge of
$16.6 million
related to its investment in
two
joint ventures as a result of changes in marketplace conditions, and a non-cash impairment charge in its Pet segment of
$1.8 million
related to the impairment of certain indefinite-lived intangible assets due to declining sales volume during the fourth quarter of fiscal 2016.
|
Category
|
2017
|
|
2016
|
|
2015
|
|
||||||
Other pet products
|
$
|
841.4
|
|
|
$
|
689.3
|
|
|
$
|
594.7
|
|
|
Other garden supplies
|
464.9
|
|
|
331.3
|
|
|
343.5
|
|
|
|||
Dog and cat products
|
405.0
|
|
|
326.0
|
|
|
233.0
|
|
|
|||
Garden controls and fertilizer products
|
343.2
|
|
|
298.8
|
|
|
286.3
|
|
|
|||
Wild bird feed
|
—
|
|
(1)
|
183.6
|
|
|
193.2
|
|
|
|||
Total
|
$
|
2,054.5
|
|
|
$
|
1,829.0
|
|
|
$
|
1,650.7
|
|
|
|
Fiscal Year Ended
|
|
||||||||||
|
September 30, 2017
|
|
September 24, 2016
|
|
September 26, 2015
|
|
||||||
Net sales:
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
1,246,354
|
|
|
$
|
1,081,853
|
|
|
$
|
894,549
|
|
|
Garden segment
|
808,124
|
|
|
747,164
|
|
|
756,188
|
|
|
|||
Total
|
$
|
2,054,478
|
|
|
$
|
1,829,017
|
|
|
$
|
1,650,737
|
|
|
Operating income (loss):
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
131,622
|
|
|
$
|
119,930
|
|
(1)
|
$
|
98,798
|
|
(1)
|
Garden segment
|
87,298
|
|
|
70,317
|
|
|
60,145
|
|
|
|||
Corporate
|
(62,808
|
)
|
|
(60,889
|
)
|
|
(67,508
|
)
|
|
|||
Total
|
156,112
|
|
|
129,358
|
|
|
91,435
|
|
|
|||
Interest expense
|
(28,209
|
)
|
|
(42,847
|
)
|
|
(40,027
|
)
|
|
|||
Interest income
|
147
|
|
|
140
|
|
|
129
|
|
|
|||
Other income (expense)
|
(1,621
|
)
|
|
(17,013
|
)
|
(2)
|
13
|
|
|
|||
Income (loss) before income taxes and noncontrolling interest
|
126,429
|
|
|
69,638
|
|
|
51,550
|
|
|
|||
Income tax expense (benefit)
|
46,699
|
|
|
24,053
|
|
|
18,535
|
|
|
|||
Net income (loss) including noncontrolling interest
|
79,730
|
|
|
45,585
|
|
|
33,015
|
|
|
|||
Net income attributable to noncontrolling interest
|
902
|
|
|
1,071
|
|
|
1,044
|
|
|
|||
Net income (loss) attributable to Central Garden & Pet Company
|
$
|
78,828
|
|
|
$
|
44,514
|
|
|
$
|
31,971
|
|
|
Assets:
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
612,337
|
|
|
$
|
508,879
|
|
|
$
|
465,171
|
|
|
Garden segment
|
311,026
|
|
|
304,901
|
|
|
310,981
|
|
|
|||
Corporate and eliminations
|
383,543
|
|
|
366,903
|
|
|
324,960
|
|
|
|||
Total
|
$
|
1,306,906
|
|
|
$
|
1,180,683
|
|
|
$
|
1,101,112
|
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
26,044
|
|
|
$
|
22,556
|
|
|
$
|
15,885
|
|
|
Garden segment
|
6,267
|
|
|
6,098
|
|
|
5,988
|
|
|
|||
Corporate
|
10,408
|
|
|
11,347
|
|
|
11,830
|
|
|
|||
Total
|
$
|
42,719
|
|
|
$
|
40,001
|
|
|
$
|
33,703
|
|
|
Expenditures for long-lived assets:
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
38,970
|
|
|
$
|
18,939
|
|
|
$
|
17,060
|
|
|
Garden segment
|
4,948
|
|
|
4,750
|
|
|
2,432
|
|
|
|||
Corporate
|
741
|
|
|
3,933
|
|
|
2,538
|
|
|
|||
Total
|
$
|
44,659
|
|
|
$
|
27,622
|
|
|
$
|
22,030
|
|
|
(1)
|
Includes a
$1.8 million
impairment charge in fiscal 2016 and a
$7.3 million
impairment charge in fiscal 2015 to indefinite-lived intangible assets as a result of increased competition and declining sales volume.
|
(2)
|
Includes a
$16.6 million
impairment charge related to
two
equity method investments.
|
|
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
|
||||||||||||||||||
|
Fiscal Year Ended September 30, 2017
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
685,998
|
|
|
$
|
79,681
|
|
|
$
|
1,370,335
|
|
|
$
|
(81,536
|
)
|
|
$
|
2,054,478
|
|
Cost of goods sold and occupancy
|
534,682
|
|
|
60,788
|
|
|
901,959
|
|
|
(75,759
|
)
|
|
1,421,670
|
|
|||||
Gross profit
|
151,316
|
|
|
18,893
|
|
|
468,376
|
|
|
(5,777
|
)
|
|
632,808
|
|
|||||
Selling, general and administrative expenses
|
154,267
|
|
|
18,416
|
|
|
309,790
|
|
|
(5,777
|
)
|
|
476,696
|
|
|||||
Operating income (loss)
|
(2,951
|
)
|
|
477
|
|
|
158,586
|
|
|
—
|
|
|
156,112
|
|
|||||
Interest expense
|
(28,051
|
)
|
|
(294
|
)
|
|
136
|
|
|
—
|
|
|
(28,209
|
)
|
|||||
Interest income
|
146
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|||||
Other income (expense)
|
(2,379
|
)
|
|
844
|
|
|
(86
|
)
|
|
—
|
|
|
(1,621
|
)
|
|||||
Income (loss) before taxes and equity in earnings of affiliates
|
(33,235
|
)
|
|
1,028
|
|
|
158,636
|
|
|
—
|
|
|
126,429
|
|
|||||
Income tax expense (benefit)
|
(11,981
|
)
|
|
1,466
|
|
|
57,214
|
|
|
—
|
|
|
46,699
|
|
|||||
Equity in earnings of affiliates
|
100,082
|
|
|
—
|
|
|
420
|
|
|
(100,502
|
)
|
|
—
|
|
|||||
Net income (loss) including noncontrolling interest
|
78,828
|
|
|
(438
|
)
|
|
101,842
|
|
|
(100,502
|
)
|
|
79,730
|
|
|||||
Noncontrolling interest
|
—
|
|
|
902
|
|
|
—
|
|
|
—
|
|
|
902
|
|
|||||
Net income (loss) attributable to Central Garden & Pet Company
|
$
|
78,828
|
|
|
$
|
(1,340
|
)
|
|
$
|
101,842
|
|
|
$
|
(100,502
|
)
|
|
$
|
78,828
|
|
|
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
|
||||||||||||||||||
|
Fiscal Year Ended September 24, 2016
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
587,579
|
|
|
$
|
82,567
|
|
|
$
|
1,238,339
|
|
|
$
|
(79,468
|
)
|
|
$
|
1,829,017
|
|
Cost of goods sold and occupancy
|
466,543
|
|
|
62,727
|
|
|
820,573
|
|
|
(73,876
|
)
|
|
1,275,967
|
|
|||||
Gross profit
|
121,036
|
|
|
19,840
|
|
|
417,766
|
|
|
(5,592
|
)
|
|
553,050
|
|
|||||
Selling, general and administrative expenses
|
138,556
|
|
|
18,077
|
|
|
272,651
|
|
|
(5,592
|
)
|
|
423,692
|
|
|||||
Operating income (loss)
|
(17,520
|
)
|
|
1,763
|
|
|
145,115
|
|
|
—
|
|
|
129,358
|
|
|||||
Interest expense
|
(42,700
|
)
|
|
(266
|
)
|
|
119
|
|
|
—
|
|
|
(42,847
|
)
|
|||||
Interest income
|
136
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|||||
Other income (expense)
|
(16,925
|
)
|
|
(113
|
)
|
|
25
|
|
|
—
|
|
|
(17,013
|
)
|
|||||
Income (loss) before taxes and equity in earnings of affiliates
|
(77,009
|
)
|
|
1,388
|
|
|
145,259
|
|
|
—
|
|
|
69,638
|
|
|||||
Income tax expense (benefit)
|
(26,422
|
)
|
|
923
|
|
|
49,552
|
|
|
—
|
|
|
24,053
|
|
|||||
Equity in earnings of affiliates
|
95,101
|
|
|
—
|
|
|
624
|
|
|
(95,725
|
)
|
|
—
|
|
|||||
Net income including noncontrolling interest
|
44,514
|
|
|
465
|
|
|
96,331
|
|
|
(95,725
|
)
|
|
45,585
|
|
|||||
Noncontrolling interest
|
—
|
|
|
1,071
|
|
|
—
|
|
|
—
|
|
|
1,071
|
|
|||||
Net income (loss) attributable to Central Garden & Pet Company
|
$
|
44,514
|
|
|
$
|
(606
|
)
|
|
$
|
96,331
|
|
|
$
|
(95,725
|
)
|
|
$
|
44,514
|
|
|
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
|
||||||||||||||||||
|
Fiscal Year Ended September 26, 2015
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
484,310
|
|
|
$
|
100,127
|
|
|
$
|
1,146,821
|
|
|
$
|
(80,521
|
)
|
|
$
|
1,650,737
|
|
Cost of goods sold and occupancy
|
379,235
|
|
|
76,597
|
|
|
781,797
|
|
|
(74,944
|
)
|
|
1,162,685
|
|
|||||
Gross profit
|
105,075
|
|
|
23,530
|
|
|
365,024
|
|
|
(5,577
|
)
|
|
488,052
|
|
|||||
Selling, general and administrative expenses
|
124,613
|
|
|
18,329
|
|
|
259,252
|
|
|
(5,577
|
)
|
|
396,617
|
|
|||||
Operating income (loss)
|
(19,538
|
)
|
|
5,201
|
|
|
105,772
|
|
|
—
|
|
|
91,435
|
|
|||||
Interest expense
|
(39,893
|
)
|
|
(268
|
)
|
|
134
|
|
|
—
|
|
|
(40,027
|
)
|
|||||
Interest income
|
126
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|||||
Other income (expense)
|
(372
|
)
|
|
407
|
|
|
(22
|
)
|
|
—
|
|
|
13
|
|
|||||
Income (loss) before taxes and equity in earnings of affiliates
|
(59,677
|
)
|
|
5,343
|
|
|
105,884
|
|
|
—
|
|
|
51,550
|
|
|||||
Income tax expense (benefit)
|
(21,500
|
)
|
|
2,089
|
|
|
37,946
|
|
|
—
|
|
|
18,535
|
|
|||||
Equity in earnings of affiliates
|
70,148
|
|
|
—
|
|
|
2,445
|
|
|
(72,593
|
)
|
|
—
|
|
|||||
Net income including noncontrolling interest
|
31,971
|
|
|
3,254
|
|
|
70,383
|
|
|
(72,593
|
)
|
|
33,015
|
|
|||||
Noncontrolling interest
|
—
|
|
|
1,044
|
|
|
—
|
|
|
—
|
|
|
1,044
|
|
|||||
Net income attributable to Central Garden & Pet Company
|
$
|
31,971
|
|
|
$
|
2,210
|
|
|
$
|
70,383
|
|
|
$
|
(72,593
|
)
|
|
$
|
31,971
|
|
|
CONSOLIDATING CONDENSED STATEMENTS OF
COMPREHENSIVE INCOME
|
||||||||||||||||||
|
Fiscal Year Ended September 30, 2017
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
78,828
|
|
|
$
|
(438
|
)
|
|
$
|
101,842
|
|
|
$
|
(100,502
|
)
|
|
$
|
79,730
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
343
|
|
|
169
|
|
|
108
|
|
|
(277
|
)
|
|
343
|
|
|||||
Total comprehensive income (loss)
|
79,171
|
|
|
(269
|
)
|
|
101,950
|
|
|
(100,779
|
)
|
|
80,073
|
|
|||||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
902
|
|
|
—
|
|
|
—
|
|
|
902
|
|
|||||
Comprehensive income (loss) attributable to Central Garden & Pet Company
|
$
|
79,171
|
|
|
$
|
(1,171
|
)
|
|
$
|
101,950
|
|
|
$
|
(100,779
|
)
|
|
$
|
79,171
|
|
|
CONSOLIDATING CONDENSED STATEMENTS OF
COMPREHENSIVE INCOME
|
||||||||||||||||||
|
Fiscal Year Ended September 24, 2016
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
44,514
|
|
|
$
|
465
|
|
|
$
|
96,331
|
|
|
$
|
(95,725
|
)
|
|
$
|
45,585
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
(1,458
|
)
|
|
(1,132
|
)
|
|
8
|
|
|
1,124
|
|
|
(1,458
|
)
|
|||||
Total comprehensive income (loss)
|
43,056
|
|
|
(667
|
)
|
|
96,339
|
|
|
(94,601
|
)
|
|
44,127
|
|
|||||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
1,071
|
|
|
—
|
|
|
—
|
|
|
1,071
|
|
|||||
Comprehensive income (loss) attributable to Central Garden & Pet Company
|
$
|
43,056
|
|
|
$
|
(1,738
|
)
|
|
$
|
96,339
|
|
|
$
|
(94,601
|
)
|
|
$
|
43,056
|
|
|
CONSOLIDATING CONDENSED STATEMENTS OF
COMPREHENSIVE INCOME
|
||||||||||||||||||
|
Fiscal Year Ended September 26, 2015
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
31,971
|
|
|
$
|
3,254
|
|
|
$
|
70,383
|
|
|
$
|
(72,593
|
)
|
|
$
|
33,015
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized loss on securities
|
(10
|
)
|
|
—
|
|
|
|
|
|
|
|
|
(10
|
)
|
|||||
Reclassification of realized loss on securities included in net income
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||
Foreign currency translation
|
(1,078
|
)
|
|
(537
|
)
|
|
(380
|
)
|
|
917
|
|
|
(1,078
|
)
|
|||||
Total comprehensive income
|
30,903
|
|
|
2,717
|
|
|
70,003
|
|
|
(71,676
|
)
|
|
31,947
|
|
|||||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
1,044
|
|
|
—
|
|
|
—
|
|
|
1,044
|
|
|||||
Comprehensive income attributable to Central Garden & Pet Company
|
$
|
30,903
|
|
|
$
|
1,673
|
|
|
$
|
70,003
|
|
|
$
|
(71,676
|
)
|
|
$
|
30,903
|
|
|
|
CONSOLIDATING CONDENSED BALANCE SHEET
|
||||||||||||||||||
|
|
September 30, 2017
|
||||||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
|
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
19,238
|
|
|
$
|
11,693
|
|
|
$
|
1,466
|
|
|
$
|
—
|
|
|
$
|
32,397
|
|
Restricted cash
|
|
12,645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,645
|
|
|||||
Accounts receivable, net
|
|
78,692
|
|
|
5,586
|
|
|
153,590
|
|
|
—
|
|
|
237,868
|
|
|||||
Inventories
|
|
125,797
|
|
|
9,493
|
|
|
246,811
|
|
|
—
|
|
|
382,101
|
|
|||||
Prepaid expenses and other assets
|
|
6,059
|
|
|
811
|
|
|
11,175
|
|
|
—
|
|
|
18,045
|
|
|||||
Total current assets
|
|
242,431
|
|
|
27,583
|
|
|
413,042
|
|
|
—
|
|
|
683,056
|
|
|||||
Land, buildings, improvements and equipment, net
|
|
38,170
|
|
|
4,225
|
|
|
138,518
|
|
|
—
|
|
|
180,913
|
|
|||||
Goodwill
|
|
15,058
|
|
|
—
|
|
|
241,217
|
|
|
—
|
|
|
256,275
|
|
|||||
Other long term assets
|
|
61,715
|
|
|
2,376
|
|
|
146,372
|
|
|
(23,801
|
)
|
|
186,662
|
|
|||||
Intercompany receivable
|
|
36,606
|
|
|
—
|
|
|
662,137
|
|
|
(698,743
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
|
1,383,633
|
|
|
—
|
|
|
—
|
|
|
(1,383,633
|
)
|
|
—
|
|
|||||
Total
|
|
$
|
1,777,613
|
|
|
$
|
34,184
|
|
|
$
|
1,601,286
|
|
|
$
|
(2,106,177
|
)
|
|
$
|
1,306,906
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
|
$
|
36,760
|
|
|
$
|
3,076
|
|
|
$
|
63,447
|
|
|
$
|
—
|
|
|
$
|
103,283
|
|
Accrued expenses and other liabilities
|
|
54,909
|
|
|
2,391
|
|
|
59,249
|
|
|
—
|
|
|
116,549
|
|
|||||
Current portion of long term debt
|
|
—
|
|
|
—
|
|
|
375
|
|
|
—
|
|
|
375
|
|
|||||
Total current liabilities
|
|
91,669
|
|
|
5,467
|
|
|
123,071
|
|
|
—
|
|
|
220,207
|
|
|||||
Long-term debt
|
|
395,160
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
395,278
|
|
|||||
Intercompany payable
|
|
647,409
|
|
|
51,334
|
|
|
—
|
|
|
(698,743
|
)
|
|
—
|
|
|||||
Losses in excess of investment in subsidiaries
|
|
—
|
|
|
—
|
|
|
19,782
|
|
|
(19,782
|
)
|
|
—
|
|
|||||
Other long-term obligations
|
|
7,689
|
|
|
—
|
|
|
70,391
|
|
|
(23,801
|
)
|
|
54,279
|
|
|||||
Shareholders’ equity attributable to Central Garden & Pet
|
|
635,686
|
|
|
(24,073
|
)
|
|
1,387,924
|
|
|
(1,363,851
|
)
|
|
635,686
|
|
|||||
Noncontrolling interest
|
|
—
|
|
|
1,456
|
|
|
—
|
|
|
—
|
|
|
1,456
|
|
|||||
Total equity
|
|
635,686
|
|
|
(22,617
|
)
|
|
1,387,924
|
|
|
(1,363,851
|
)
|
|
637,142
|
|
|||||
Total
|
|
$
|
1,777,613
|
|
|
$
|
34,184
|
|
|
$
|
1,601,286
|
|
|
$
|
(2,106,177
|
)
|
|
$
|
1,306,906
|
|
|
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
|
5,700
|
|
|
800
|
|
|
9,749
|
|
|
—
|
|
|
16,249
|
|
|||||
Total current assets
|
271,702
|
|
|
27,403
|
|
|
384,191
|
|
|
—
|
|
|
683,296
|
|
|||||
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
|
45,832
|
|
|
2,998
|
|
|
85,701
|
|
|
(26,753
|
)
|
|
107,778
|
|
|||||
Intercompany receivable
|
32,778
|
|
|
—
|
|
|
567,374
|
|
|
(600,152
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
1,176,990
|
|
|
—
|
|
|
—
|
|
|
(1,176,990
|
)
|
|
—
|
|
|||||
Total
|
$
|
1,583,443
|
|
|
$
|
34,298
|
|
|
$
|
1,366,837
|
|
|
$
|
(1,803,895
|
)
|
|
$
|
1,180,683
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
$
|
34,096
|
|
|
$
|
3,953
|
|
|
$
|
64,364
|
|
|
$
|
—
|
|
|
$
|
102,413
|
|
Accrued expenses and other liabilities
|
47,861
|
|
|
1,411
|
|
|
50,071
|
|
|
—
|
|
|
99,343
|
|
|||||
Current portion of long term debt
|
88
|
|
|
—
|
|
|
375
|
|
|
—
|
|
|
463
|
|
|||||
Total current liabilities
|
82,045
|
|
|
5,364
|
|
|
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
|
|
|
—
|
|
|
55,768
|
|
|
(26,753
|
)
|
|
29,071
|
|
|||||
Shareholders’ equity attributable to Central Garden & Pet
|
553,014
|
|
|
(18,827
|
)
|
|
1,179,691
|
|
|
(1,160,864
|
)
|
|
553,014
|
|
|||||
Noncontrolling interest
|
—
|
|
|
1,573
|
|
|
—
|
|
|
—
|
|
|
1,573
|
|
|||||
Total equity
|
553,014
|
|
|
(17,254
|
)
|
|
1,179,691
|
|
|
(1,160,864
|
)
|
|
554,587
|
|
|||||
Total
|
$
|
1,583,443
|
|
|
$
|
34,298
|
|
|
$
|
1,366,837
|
|
|
$
|
(1,803,895
|
)
|
|
$
|
1,180,683
|
|
|
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
|
||||||||||||||||||
|
Fiscal Year Ended September 30, 2017
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(7,418
|
)
|
|
$
|
2,846
|
|
|
$
|
122,957
|
|
|
$
|
(4,076
|
)
|
|
$
|
114,309
|
|
Additions to property, plant and equipment
|
(9,419
|
)
|
|
(805
|
)
|
|
(34,435
|
)
|
|
—
|
|
|
(44,659
|
)
|
|||||
Businesses acquired, net of cash acquired, and investments in joint ventures
|
(103,880
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(103,880
|
)
|
|||||
Proceeds from asset sales
|
229
|
|
|
—
|
|
|
8,318
|
|
|
—
|
|
|
8,547
|
|
|||||
Escrow deposit for acquisition-related contingent consideration
|
(6,000
|
)
|
|
|
|
|
|
|
|
(6,000
|
)
|
||||||||
Change in restricted cash and cash equivalents
|
(1,735
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,735
|
)
|
|||||
Investment in equity method investee
|
(12,495
|
)
|
|
|
|
|
|
|
|
(12,495
|
)
|
||||||||
Other investing activities
|
(4,355
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,355
|
)
|
|||||
Intercompany investing activities
|
(3,828
|
)
|
|
—
|
|
|
(94,763
|
)
|
|
98,591
|
|
|
—
|
|
|||||
Net cash used by investing activities
|
(141,483
|
)
|
|
(805
|
)
|
|
(120,880
|
)
|
|
98,591
|
|
|
(164,577
|
)
|
|||||
Repayments on revolving line of credit
|
(552,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(552,000
|
)
|
|||||
Borrowings on revolving line of credit
|
552,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
552,000
|
|
|||||
Repayments of long-term debt
|
(89
|
)
|
|
—
|
|
|
(374
|
)
|
|
—
|
|
|
(463
|
)
|
|||||
Excess tax benefits from stock-based awards
|
19,946
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,946
|
|
|||||
Repurchase of common stock
|
(27,556
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,556
|
)
|
|||||
Payments of contingent consideration
|
—
|
|
|
—
|
|
|
(1,300
|
)
|
|
—
|
|
|
(1,300
|
)
|
|||||
Distribution to parent
|
—
|
|
|
(4,076
|
)
|
|
—
|
|
|
4,076
|
|
|
—
|
|
|||||
Distribution to noncontrolling interest
|
—
|
|
|
(1,019
|
)
|
|
—
|
|
|
—
|
|
|
(1,019
|
)
|
|||||
Intercompany financing activities
|
93,445
|
|
|
5,146
|
|
|
—
|
|
|
(98,591
|
)
|
|
—
|
|
|||||
Net cash provided (used) by financing activities
|
85,746
|
|
|
51
|
|
|
(1,674
|
)
|
|
(94,515
|
)
|
|
(10,392
|
)
|
|||||
Effect of exchange rates on cash
|
235
|
|
|
(94
|
)
|
|
(66
|
)
|
|
—
|
|
|
75
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(62,920
|
)
|
|
1,998
|
|
|
337
|
|
|
—
|
|
|
(60,585
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
82,158
|
|
|
9,695
|
|
|
1,129
|
|
|
—
|
|
|
92,982
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
19,238
|
|
|
$
|
11,693
|
|
|
$
|
1,466
|
|
|
$
|
—
|
|
|
$
|
32,397
|
|
|
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
|
||||||||||||||||||
|
Fiscal Year Ended September 24, 2016
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash (used) provided by operating activities
|
$
|
3,906
|
|
|
$
|
2,654
|
|
|
$
|
149,749
|
|
|
$
|
(4,883
|
)
|
|
$
|
151,426
|
|
Additions to property, plant and equipment
|
(4,513
|
)
|
|
(717
|
)
|
|
(22,392
|
)
|
|
—
|
|
|
(27,622
|
)
|
|||||
Payments to acquire companies, net of expenses
|
(69,001
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,001
|
)
|
|||||
Proceeds from asset sales
|
—
|
|
|
—
|
|
|
3,911
|
|
|
—
|
|
|
3,911
|
|
|||||
Change in restricted cash and cash equivalents
|
2,247
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,247
|
|
|||||
Other investing activities
|
(730
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(730
|
)
|
|||||
Intercompany investing activities
|
(83
|
)
|
|
—
|
|
|
(129,708
|
)
|
|
129,791
|
|
|
—
|
|
|||||
Net cash used by investing activities
|
(72,080
|
)
|
|
(717
|
)
|
|
(148,189
|
)
|
|
129,791
|
|
|
(91,195
|
)
|
|||||
Repayments on revolving line of credit
|
(419,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(419,000
|
)
|
|||||
Borrowings on revolving line of credit
|
419,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
419,000
|
|
|||||
Repayments of long-term debt
|
(400,286
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(400,307
|
)
|
|||||
Issuance of long-term debt
|
400,000
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
|
|||||
Proceeds from issuance of common stock
|
324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
324
|
|
|||||
Excess tax benefits from stock-based awards
|
6,869
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,869
|
|
|||||
Repurchase of common stock
|
(10,873
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,873
|
)
|
|||||
Payments of contingent consideration
|
|
|
|
|
|
|
(2,026
|
)
|
|
|
|
|
(2,026
|
)
|
|||||
Payment of deferred financing costs
|
(7,560
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,560
|
)
|
|||||
Distribution to parent
|
—
|
|
|
(4,883
|
)
|
|
—
|
|
|
4,883
|
|
|
—
|
|
|||||
Distribution to noncontrolling interest
|
—
|
|
|
(592
|
)
|
|
—
|
|
|
—
|
|
|
(592
|
)
|
|||||
Intercompany financing activities
|
127,044
|
|
|
2,747
|
|
|
—
|
|
|
(129,791
|
)
|
|
—
|
|
|||||
Net cash provided (used) by financing activities
|
115,518
|
|
|
(2,728
|
)
|
|
(2,047
|
)
|
|
(124,908
|
)
|
|
(14,165
|
)
|
|||||
Effect of exchange rates on cash
|
(1,466
|
)
|
|
464
|
|
|
334
|
|
|
—
|
|
|
(668
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
45,878
|
|
|
(327
|
)
|
|
(153
|
)
|
|
—
|
|
|
45,398
|
|
|||||
Cash and cash equivalents at beginning of year
|
36,280
|
|
|
10,022
|
|
|
1,282
|
|
|
—
|
|
|
47,584
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
82,158
|
|
|
$
|
9,695
|
|
|
$
|
1,129
|
|
|
$
|
—
|
|
|
$
|
92,982
|
|
|
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
|
||||||||||||||||||
|
Fiscal Year Ended September 26, 2015
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash (used) provided by operating activities
|
$
|
(16,823
|
)
|
|
$
|
7,372
|
|
|
$
|
103,619
|
|
|
$
|
(6,719
|
)
|
|
$
|
87,449
|
|
Additions to property, plant and equipment
|
(2,721
|
)
|
|
(405
|
)
|
|
(18,904
|
)
|
|
—
|
|
|
(22,030
|
)
|
|||||
Businesses acquired, net of cash acquired
|
(38,384
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,384
|
)
|
|||||
Change in restricted cash and cash equivalents
|
1,126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,126
|
|
|||||
Maturities of short term investments
|
9,997
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,997
|
|
|||||
Investment in short term investments
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|||||
Other investing activities
|
(546
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(546
|
)
|
|||||
Intercompany investing activities
|
(15,789
|
)
|
|
—
|
|
|
(85,963
|
)
|
|
101,752
|
|
|
—
|
|
|||||
Net cash used by investing activities
|
(46,334
|
)
|
|
(405
|
)
|
|
(104,867
|
)
|
|
101,752
|
|
|
(49,854
|
)
|
|||||
Repayments on revolving line of credit
|
(312,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(312,000
|
)
|
|||||
Borrowings on revolving line of credit
|
312,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
312,000
|
|
|||||
Repayments of long-term debt
|
(50,262
|
)
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(50,289
|
)
|
|||||
Proceeds from issuance of common stock
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|||||
Excess tax benefits from stock-based awards
|
2,154
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,154
|
|
|||||
Repurchase of common stock
|
(18,497
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,497
|
)
|
|||||
Payment of deferred financing costs
|
(258
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(258
|
)
|
|||||
Distribution to parent
|
—
|
|
|
(6,719
|
)
|
|
—
|
|
|
6,719
|
|
|
—
|
|
|||||
Distribution to noncontrolling interest
|
—
|
|
|
(1,680
|
)
|
|
—
|
|
|
—
|
|
|
(1,680
|
)
|
|||||
Intercompany financing activities
|
103,326
|
|
|
(1,574
|
)
|
|
—
|
|
|
(101,752
|
)
|
|
—
|
|
|||||
Net cash provided (used) by financing activities
|
36,663
|
|
|
(9,973
|
)
|
|
(27
|
)
|
|
(95,033
|
)
|
|
(68,370
|
)
|
|||||
Effect of exchange rates on cash
|
(697
|
)
|
|
222
|
|
|
158
|
|
|
—
|
|
|
(317
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(27,191
|
)
|
|
(2,784
|
)
|
|
(1,117
|
)
|
|
—
|
|
|
(31,092
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
63,471
|
|
|
12,806
|
|
|
2,399
|
|
|
—
|
|
|
78,676
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
36,280
|
|
|
$
|
10,022
|
|
|
$
|
1,282
|
|
|
$
|
—
|
|
|
$
|
47,584
|
|
(i)
|
An award of a neutral arbitrator selected by the parties;
or
|
(ii)
|
A final adjudication by a court of competent jurisdiction.
|
(i)
|
Based upon or attributable to [Director][Officer] gaining in fact any personal profit or advantage to which [Director][Officer] is not entitled; or
|
(ii)
|
For an accounting of profits in fact made from the purchase or sale by [Director][Officer] of securities of the Company within the meaning of Section 16 of the Securities Exchange Act of 1934 as amended, or similar provisions of any state law; or
|
(iii)
|
Resulting from [Director][Officer]’s knowing, fraudulent, dishonest or willful misconduct; or
|
(iv)
|
The payment of which by the Company under this Agreement is not permitted by applicable law; or
|
(v)
|
Which are not within the Covered Amount, i.e., which are insured in type and amount under any directors’ and officers’ liability insurance maintained by the Company from time to time.
|
(a)
|
The Company shall have no obligation to indemnify [Director][Officer] for and hold him harmless from any Loss or Expense which has been Determined to constitute an Excluded Claim.
|
(b)
|
The Company shall have no obligation to indemnify [Director][Officer] and hold him harmless for any Loss or Expense to the extent that [Director][Officer] is indemnified by the Company pursuant to the Company’s bylaws or otherwise indemnified.
|
(a)
|
Promptly after receipt by [Director][Officer] of notice of the commencement of or the threat of commencement of any action, suit or proceeding, [Director][Officer] shall, if indemnification with respect thereto may be sought from the Company under this Agreement, notify the Company of the commencement thereof.
|
(b)
|
If, at the time of the receipt of such notice, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such action, suit or proceeding to the insurers in accordance with the procedures set forth in the respective policies in favor of [Director][Officer]. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of [Director][Officer], all Losses and Expenses payable as a result of such action, suit or proceeding in accordance with the terms of such policies.
|
(c)
|
To the extent the Company does not, at the time of the commencement of or the threat of commencement of such action, suit or proceeding, have applicable directors’ and officers’ liability insurance, or if a Determination is made that any Expenses arising out of such action, suit or proceeding will not be payable under the directors’ and officers’ liability insurance then in effect, the Company shall be obligated to pay the Expenses of any such action, suit or proceeding in advance of the final disposition thereof; and the Company, if appropriate, shall be entitled to assume the defense of such action, suit or proceeding with counsel satisfactory to [Director][Officer], upon the delivery to [Director][Officer] of written notice of its election so to do. After delivery of such notice, the Company will not be liable to [Director][Officer] under this Agreement for any legal or other Expenses subsequently incurred by [Director][Officer] in connection with such defense other than reasonable Expenses of investigation,
provided that
[Director][Officer] shall have the right to employ its counsel in any such action, suit or proceeding, but the fees and expenses of such counsel incurred after delivery of notice from the Company of its assumption of such defense shall be at [Director][Officer]’s expense,
provided further that
if (i) the employment of counsel by [Director][Officer] has been previously authorized by the Company, (ii) [Director][Officer] shall have reasonably concluded that there may be a conflict of interest between the Company and [Director][Officer] in the conduct of any such defense, or (iii) the Company shall not, in fact, have employed counsel to assume the defense of such action, or (iv) [Director][Officer] necessarily had to consult with counsel or counsel had to act on [Director][Officer]’s behalf prior to the time that Company‑retained outside counsel was able to act, the fees and expenses of counsel shall be at the expense of the Company.
|
(d)
|
All payments on account of the Company’s indemnification obligations under this Agreement shall be made within sixty (60) days of [Director][Officer]’s written request therefor unless a Determination is made that the claims giving rise to [Director][Officer]’s request are Excluded Claims or otherwise not payable under this Agreement,
provided that
all payments on account of the Company’s obligations to pay Expenses under Paragraph 4(c) of this Agreement prior to the final disposition of an action, suit or proceeding shall be made within twenty (20) days of [Director][Officer]’s written request therefor and such obligation shall not be subject to any such Determination but shall be subject to Paragraph 4(e) of this Agreement.
|
(e)
|
[Director][Officer] agrees that he will reimburse the Company for all Losses and Expenses paid by the Company in connection with any action, suit or proceeding against [Director][Officer] in the event and only to the extent that a Determination shall have been made by a court in a final adjudication or by final and binding arbitration from which there is no further right of appeal that the [Director][Officer] is not entitled to be indemnified by the Company for such Expenses because the claim is an Excluded Claim or because [Director][Officer] is otherwise not entitled to payment under this Agreement.
|
(a)
|
In any action for indemnification, the burden of proving that indemnification is not required under this Agreement shall be on the Company.
|
(b)
|
In the event that any action is instituted by [Director][Officer] under this Agreement, or to enforce or interpret any of the terms of this Agreement, [Director][Officer] shall be entitled to be paid all court and arbitrator’s costs and expenses, including reasonable counsel fees, incurred by [Director][Officer] with respect to such action, unless the court or an arbitrator determines that each of the material assertions made by [Director][Officer] as a basis for such action were not made in good faith or were frivolous.
|
(c)
|
[Director][Officer] may elect to submit any action under this Agreement to final and binding arbitration. Any reference to arbitration herein shall include the rights of the parties to move to vacate or confirm an arbitrator’s award under California law.
|
RE:
|
Modification and Extension of February 27, 1998 Employment Agreement and Non‑Competition Agreement, as amended June 2, 2003, April 10, 2006, July 1, 2008, March 30, 2012 and March 1, 2014 (this "Amendment")
|
1)
|
During the period from March 1, 2016 through February 28, 2018 (the "Term"), you will continue in your role as "Director of Special Projects" for the Corporate Division of Central Garden & Pet Company (the "Company"); provided, however that the Company may terminate your employment upon ninety (90) days’ written notice. In the event of such termination, you shall be entitled to twelve (12) months’ severance payments. You may terminate the employment relationship upon ninety (90) days notice.
|
2)
|
Effective as of March 1, 2016, your base salary will be $123,000 annually. You will be expected to work a maximum of 650 hours per year (including travel time and Board Meeting time and shall not be required to relocate or commute on a regular basis from Madison, GA).
|
3)
|
The Non-Competition Agreement will terminate two years after the end of your employment with the Company.
|
4)
|
This Amendment will be governed and construed in accordance with the laws of the State of Georgia.
|
5)
|
Except as herein modified (or modified by the June 2, 2003 amendment, the April 10, 2006 amendment, the July 1, 2008 amendment, the March 30, 2012 amendment or the March 1, 2014 amendment), the terms and provisions of the Employment Agreement and Non-Competition Agreement will remain in full force and effect.
|
John R. Ranelli
|
Brooks M. Pennington, III
|
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
|
September 30,
2017 |
|
September 24,
2016 |
|
September 26,
2015 |
|
September 27,
2014 |
|
September 28,
2013 |
||||||||||
Income (loss) before income taxes, and income (loss) of equity method investees
|
|
$
|
129,977
|
|
|
$
|
70,375
|
|
|
$
|
51,675
|
|
|
$
|
14,019
|
|
|
$
|
(3,185
|
)
|
Fixed charges (1)
|
|
29,647
|
|
|
43,807
|
|
|
40,847
|
|
|
43,608
|
|
|
44,038
|
|
|||||
Earnings
|
|
159,624
|
|
|
114,182
|
|
|
92,522
|
|
|
57,627
|
|
|
40,853
|
|
|||||
Fixed charges (1)
|
|
$
|
29,647
|
|
|
$
|
43,807
|
|
|
$
|
40,847
|
|
|
$
|
43,608
|
|
|
$
|
44,038
|
|
Earnings to fixed charges excess (deficiency)
|
|
$
|
129,977
|
|
|
$
|
70,375
|
|
|
$
|
51,675
|
|
|
$
|
14,019
|
|
|
$
|
(3,185
|
)
|
Ratio of earnings to fixed charges (2)
|
|
5.4
|
|
|
2.6
|
|
|
2.3
|
|
|
1.3
|
|
|
N/M
|
|
(1)
|
Fixed charges consist of interest expense, the portion of rental expense under operating leases deemed by management to be representative of the interest factor and amortization of deferred financing costs.
|
(2)
|
For the fiscal year ended September 28, 2013, earnings were insufficient to cover fixed charges by approximately $3.2 million, and the ratio is not meaningful.
|
Name
|
State or Other
Jurisdiction of Incorporation
|
All-Glass Aquarium Co., Inc.
|
Wisconsin
|
Aquatica Tropicals
|
Delaware
|
B2E Corporation
|
New York
|
B2E Biotech, LLC
|
Delaware
|
B2E Microbials, LLC
|
Delaware
|
B2E Manufacturing, LLC
|
Delaware
|
Blue Springs Hatchery
|
Delaware
|
Farnam Companies, Inc.
|
Arizona
|
Florida Tropical Distributors
|
Delaware
|
Four Paws Products, Ltd.
|
New York
|
Four Star Microbial Products, LLC
|
Delaware
|
Gulfstream Home & Garden, Inc.
|
Florida
|
Howard Johnson's Enterprises, Inc
|
Delaware
|
Hydro-Organics Wholesale
|
California
|
IMS Comercializadora Y Fabricacion DE Calidad SA DE CV
|
Mexico
|
IMS Southern, LLC
|
Utah
|
IMS Trading, LLC
|
Utah
|
IMS Trading Mexico
|
Mexico
|
Interpet Limited
|
Foreign
|
K&H Manufacturing, LLC
|
Delaware
|
Kaytee Products, Inc.
|
Wisconsin
|
Matson, LLC
|
Washington
|
New England Pottery, LLC
|
Delaware
|
Nexgen Turf Research, LLC
|
Oregon
|
Pennington Seed, Inc.
|
Delaware
|
Pets International, Ltd.
|
Illinois
|
Segrest, Inc.
|
Delaware
|
Segrest Farms
|
Delaware
|
Sun Pet
|
Delaware
|
TFH Publications, Inc.
|
Delaware
|
Wellmark International
|
California
|
Gro Tec, Inc.
|
Georgia
|
1.
|
I have reviewed this report on Form 10-K of Central Garden & Pet Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 29, 2017
|
/s/ George C. Roeth
|
|
George C. Roeth
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this report on Form 10-K of Central Garden & Pet Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 29, 2017
|
/s/ Nicholas Lahanas
|
|
Nicholas Lahanas
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
(1)
|
such Report complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in such Report presents, in all material respects, the financial condition and results of operations of Central Garden & Pet Company.
|
November 29, 2017
|
/s/ George C. Roeth
|
|
George C. Roeth
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
(1)
|
such Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of Central Garden & Pet Company.
|
November 29, 2017
|
/s/ Nicholas Lahanas
|
|
Nicholas Lahanas
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|