|
|
|
|
|
|
|
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.
|
||
Item 16.
|
•
|
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;
|
•
|
Gross profit for fiscal
2018
increased
$42.6 million
, or
6.7%
, to
$675.4 million
. Gross margin declined
30
basis points in fiscal
2018
to
30.5%
, from
30.8%
in fiscal
2017
.
|
•
|
Our operating income increased
$11.2 million
, or
7.2%
, to
$167.3 million
in fiscal
2018
, and as a percentage of net sales was flat compared to the prior year at
7.6%
. Non-GAAP operating income increased
$13.2 million
, or
8.6%
.
|
•
|
Net income for fiscal 2018 was
$123.6 million
, or
$2.32
per share on a fully diluted basis, compared to net income in fiscal
2017
of
$78.8 million
, or
$1.52
per share on a fully diluted basis.
|
•
|
Non-GAAP net income increased to
$102.1 million
, or
$1.91
per share, in fiscal
2018
from
$77.5 million
, or
$1.50
per share, in fiscal
2017
.
|
•
|
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 30 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 two 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 brick & mortar retailers, as well as e-commerce retailers providing them broad product offerings including new product innovation, premium brands, 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 Walmart and among the largest lawn and garden supplies vendors to Walmart, Home Depot and Lowe’s, and the club and mass merchandise channels, 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 will 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 households, or 68%, owning a pet. In addition, many pet supplies products (e.g., toys, pest control, grooming supplies, beds and collars, etc.) are routinely consumed and replenished. Also, as many as 82% of dog owners and 65% of cat owners regularly purchase some type of treat.
|
•
|
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 facilitating:
|
◦
|
acquisition and maintenance of 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 clearly articulated strategies that define the role of each business within our portfolio. We have assessed the profitability and growth potential of each of our businesses. All businesses have a clear role in the portfolio and a strategy that is consistent with that role. Some of our businesses are managed to optimize top-line growth, whereas others are more focused on reducing costs and maximizing operating income. We have three-year pipelines in both innovation activities and cost savings initiatives to make sure we have the pieces in place to deliver the organic growth targeted for our businesses.
|
•
|
We are building out our portfolio in attractive, broadly-defined Pet & Garden markets. We seek 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
$2.2 billion
in sales. In the last two years, we have acquired four new businesses including our entry into the live plant business. We consider this to be an attractive, fragmented category in the garden industry. We are patient and disciplined value buyers, typically focused on manageable-sized opportunities in the garden and pet areas. However, we are open to any business which can leverage our capabilities and allow us to 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 have been successful in growing our acquisitions organically after acquiring them into our portfolio. We are also committed to exiting businesses where we cannot find a path to profitability and have done so in the past. We continually review our businesses to ensure they can meet our expectations and, in some cases, have implemented strategies to reverse sub-par performance.
|
•
|
We are building on our strong customer relationships by developing and executing winning category growth strategies. We produce both branded products and private label products for our customers as well as distribute third party brands that gives our retail partners an unparalleled breadth of selection of premium and value products. Importantly, we are reinvesting some of our annual cost savings in order to ensure sufficient demand creation investment to drive sustainable organic growth and build share.
|
•
|
To grow, we are also seeking to develop more differentiated and more defensible new products. We are doing so by continuously striving to get a deeper understanding of our consumers, comprehending what products and features they desire and how they make their purchase decisions. We are increasing our overall investment in consumer insights and research and development in order to achieve our innovation goals with a strong pipeline of new products.
|
•
|
We are freeing up our businesses in e-commerce by ensuring we have the right policies, products, and programs to allow all channels to compete effectively. We recognize that consumers are increasingly researching, if not buying products on-line, and hence we are advancing our digital capabilities. One key area is in marketing communication where we are working to better reach consumers at key points in their path to purchase with advanced capabilities in search engine optimization, reputation management and social listening to name a few. Concurrently, we are optimizing our supply chain for high-demand e-commerce items to ensure customer and consumer availability requirements are met at optimal cost. Finally, we are also expanding our data analytics capability to improve and accelerate business insight. In a marketplace that is moving very quickly, fast decision-making is important to gaining a competitive advantage.
|
•
|
Optimizing our supply chain footprint is a priority as we seek to become more efficient and cost-effective. Having the right facilities in the right locations is critical to both lowering costs and enabling our businesses to meet the growth demands of our existing and new customers, from both our legacy and acquired businesses. In addition, while we value being a decentralized company, we believe we have significant opportunities to improve our performance by driving processes and programs to allow us to align for scale and share best practices. The initiatives, along with our systematic cost savings programs being driven by each business unit, should enable the overall company to reduce our cost of goods sold and administrative spending by 1% to 2% annually. We expect these cost savings will enable us to continue to invest more in our businesses to fuel growth.
|
•
|
We have approximately 5,400 employees in over 95 locations. We believe 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 consumer products 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
|
|
2018
|
|
2017
|
|
2016
|
|
|||||||
Other pet products
|
|
$
|
896.5
|
|
|
$
|
841.4
|
|
|
|
$
|
689.3
|
|
|
Other garden supplies
|
|
528.8
|
|
|
464.9
|
|
|
|
331.3
|
|
|
|||
Dog and cat products
|
|
444.4
|
|
|
405.0
|
|
|
326.0
|
|
|
||||
Garden controls and fertilizer products
|
|
345.7
|
|
|
343.2
|
|
|
|
298.8
|
|
|
|||
Wild bird feed
|
|
—
|
|
(1)
|
—
|
|
(1
|
)
|
183.6
|
|
|
|||
Total
|
|
$
|
2,215.4
|
|
|
$
|
2,054.5
|
|
|
|
$
|
1,829.0
|
|
|
•
|
Nylabone is predominately made in the United States and has a strong history of developing innovative products such as NutriDent
®
Edible Dental Brush Chews, Nubz
®
and Healthy Edibles
®
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 largely under the Cadet
®
and Farm to Paws
™
brands.
|
•
|
Four Paws Products include industry leaders in grooming and waste management products under the Wee Wee
®
and Magic Coat
®
brands.
|
•
|
Pet Home Essentials combines our acquisition of DMC, the industry-leading dog & cat bed company and supplier to many of the largest retailers for private label and branded bedding, and our acquisition of K&H, 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 for our own brands, other parties and private label.
|
•
|
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
|
|
57
|
|
|
President & Chief Executive Officer
|
Nicholas Lahanas
|
|
50
|
|
|
Chief Financial Officer
|
William Lynch
|
|
58
|
|
|
Senior Vice President of Operations
|
Kay M. Schwichtenberg
|
|
65
|
|
|
Executive Vice President
|
George Yuhas
|
|
66
|
|
|
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;
|
•
|
maintain or 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 acquisition;
|
•
|
diversion of management’s attention;
|
•
|
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;
|
•
|
difficulties in integrating the operations, systems, technologies, products and personnel of acquired companies;
|
•
|
initial dependence on unfamiliar supply chains or relatively small supply partners;
|
•
|
the potential loss of key employees, customers, distributors, vendors and other business partners of the companies we acquire after the acquisition;
|
•
|
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
|
Surprise, AZ
|
|
Manufacturing
|
|
Leased
|
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
|
West Haven, CT (2)
|
|
Sales and Logistics
|
|
Owned
|
Gibsonton, FL
|
|
Sales and Logistics
|
|
Owned
|
Lakeland, FL (2)
|
|
Manufacturing
|
|
Leased
|
Plant City, FL (2)
|
|
Manufacturing
|
|
Leased
|
Ruskin, FL
|
|
Manufacturing
|
|
Leased
|
Ruskin, FL (3)
|
|
Sales and Logistics
|
|
Leased
|
Tampa, FL
|
|
Sales and Logistics
|
|
Leased
|
Atlanta, GA (2)
|
|
Sales and Logistics
|
|
Leased
|
Atlanta, GA
|
|
Sales and Logistics
|
|
Owned
|
Norcross, GA
|
|
Sales and Logistics
|
|
Leased
|
Council Bluffs, IA
|
|
Manufacturing
|
|
Owned
|
Elgin, IL
|
|
Sales and Logistics
|
|
Leased
|
Wichita, KS
|
|
Sales and Logistics
|
|
Leased
|
Taylor, MI
|
|
Sales and Logistics
|
|
Leased
|
Burnsville, MN
|
|
Sales and Logistics
|
|
Leased
|
Hazelwood, MO
|
|
Sales and Logistics
|
|
Leased
|
Riverside, MO
|
|
Sales and Logistics
|
|
Leased
|
Hamilton, NJ
|
|
Sales and Logistics
|
|
Leased
|
Neptune City, NJ
|
|
Manufacturing
|
|
Owned
|
South Brunswick, NJ
|
|
Sales and Logistics
|
|
Leased
|
Fairfield, OH
|
|
Sales and Logistics
|
|
Leased
|
Vandalia, OH
|
|
Sales and Logistics
|
|
Leased
|
Sulphur, OK
|
|
Sales and Logistics
|
|
Owned
|
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
|
|
Owned
|
Milwaukee, WI
|
|
Sales and Logistics
|
|
Leased
|
Mississauga, Ontario, Canada
|
|
Sales and Logistics
|
|
Leased
|
Guangzhou, China
|
|
Sales and Logistics
|
|
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
|
Newark, DE
|
|
Sales and Logistics
|
|
Leased
|
Covington, GA (2)
|
|
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
|
Elkridge, MD
|
|
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
|
Emporia, VA
|
|
Sales and Logistics
|
|
Leased
|
Kenbridge, VA
|
|
Sales and Logistics
|
|
Leased
|
Northbend, WA
|
|
Manufacturing
|
|
Leased
|
|
|
9/28/2013
|
|
9/27/2014
|
|
9/26/2015
|
|
9/24/2016
|
|
9/30/2017
|
|
9/29/2018
|
||||||
Central Garden & Pet Company
|
|
100.00
|
|
|
109.39
|
|
|
233.14
|
|
|
360.88
|
|
|
552.49
|
|
|
512.66
|
|
NASDAQ Composite
|
|
100.00
|
|
|
120.77
|
|
|
126.88
|
|
|
145.46
|
|
|
180.15
|
|
|
225.49
|
|
Dow Jones US Nondurable Household Products
|
|
100.00
|
|
|
114.03
|
|
|
105.26
|
|
|
130.14
|
|
|
138.33
|
|
|
135.10
|
|
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)
|
||||||
July 1, 2018 - August 4, 2018
|
|
2,753
|
|
|
|
$
|
40.01
|
|
|
—
|
|
|
$
|
34,968,000
|
|
August 5, 2018 - September 1, 2018
|
|
2,980
|
|
|
(2)
|
36.34
|
|
|
—
|
|
|
34,968,000
|
|
||
September 2, 2018 - September 29, 2018
|
|
2,008
|
|
|
(2)
|
36.96
|
|
|
—
|
|
|
34,968,000
|
|
||
Total
|
|
7,741
|
|
|
|
$
|
37.81
|
|
|
—
|
|
|
$
|
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 29, 2018
|
|
September 30, 2017
|
|
September 24, 2016
|
|
September 26, 2015
|
|
September 27, 2014
|
||||||||||
|
|
(in thousands, except per share amounts)
|
||||||||||||||||||
Statement of Operations Data (1):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
2,215,362
|
|
|
$
|
2,054,478
|
|
|
$
|
1,829,017
|
|
|
$
|
1,650,737
|
|
|
$
|
1,604,357
|
|
Cost of goods sold and occupancy
|
|
1,539,986
|
|
|
1,421,670
|
|
|
1,275,967
|
|
|
1,162,685
|
|
|
1,150,333
|
|
|||||
Gross profit
|
|
675,376
|
|
|
632,808
|
|
|
553,050
|
|
|
488,052
|
|
|
454,024
|
|
|||||
Selling, general and administrative expenses
|
|
508,040
|
|
|
476,696
|
|
|
421,864
|
|
|
389,345
|
|
|
397,811
|
|
|||||
Intangible asset and goodwill impairments (2)
|
|
—
|
|
|
—
|
|
|
1,828
|
|
|
7,272
|
|
|
—
|
|
|||||
Operating income (3)
|
|
167,336
|
|
|
156,112
|
|
|
129,358
|
|
|
91,435
|
|
|
56,213
|
|
|||||
Interest expense, net (4)
|
|
(36,051
|
)
|
|
(28,062
|
)
|
|
(42,707
|
)
|
|
(39,898
|
)
|
|
(42,750
|
)
|
|||||
Other income (expense) (5)
|
|
(3,860
|
)
|
|
(1,621
|
)
|
|
(17,013
|
)
|
|
13
|
|
|
403
|
|
|||||
Income before income taxes and noncontrolling interest
|
|
127,425
|
|
|
126,429
|
|
|
69,638
|
|
|
51,550
|
|
|
13,866
|
|
|||||
Income tax expense (6)
|
|
3,305
|
|
|
46,699
|
|
|
24,053
|
|
|
18,535
|
|
|
4,045
|
|
|||||
Income including noncontrolling interest
|
|
124,120
|
|
|
79,730
|
|
|
45,585
|
|
|
33,015
|
|
|
9,821
|
|
|||||
Net income attributable to noncontrolling interest
|
|
526
|
|
|
902
|
|
|
1,071
|
|
|
1,044
|
|
|
1,017
|
|
|||||
Net income attributable to Central Garden & Pet (6)
|
|
$
|
123,594
|
|
|
$
|
78,828
|
|
|
$
|
44,514
|
|
|
$
|
31,971
|
|
|
$
|
8,804
|
|
Net income per share attributable to Central Garden & Pet (6):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
2.39
|
|
|
$
|
1.57
|
|
|
$
|
0.91
|
|
|
$
|
0.66
|
|
|
$
|
0.18
|
|
Diluted
|
|
$
|
2.32
|
|
|
$
|
1.52
|
|
|
$
|
0.87
|
|
|
$
|
0.64
|
|
|
$
|
0.18
|
|
Weighted average shares used in the computation of income per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
51,716
|
|
|
50,230
|
|
|
48,964
|
|
|
48,562
|
|
|
48,880
|
|
|||||
Diluted
|
|
53,341
|
|
|
51,820
|
|
|
51,075
|
|
|
49,638
|
|
|
49,397
|
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
|
$
|
47,199
|
|
|
$
|
42,719
|
|
|
$
|
40,001
|
|
|
$
|
33,703
|
|
|
$
|
35,781
|
|
Capital expenditures
|
|
$
|
37,845
|
|
|
$
|
44,659
|
|
|
$
|
27,622
|
|
|
$
|
22,030
|
|
|
$
|
17,173
|
|
Cash provided by operating activities
|
|
$
|
114,112
|
|
|
$
|
114,309
|
|
|
$
|
151,426
|
|
|
$
|
87,449
|
|
|
$
|
126,467
|
|
Cash used in investing activities
|
|
$
|
(139,136
|
)
|
|
$
|
(164,577
|
)
|
|
$
|
(91,195
|
)
|
|
$
|
(49,854
|
)
|
|
$
|
(35,181
|
)
|
Cash provided (used) by financing activities
|
|
$
|
474,783
|
|
|
$
|
(10,392
|
)
|
|
$
|
(14,165
|
)
|
|
$
|
(68,370
|
)
|
|
$
|
(27,759
|
)
|
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
|
September 29, 2018
|
|
September 30, 2017
|
|
September 24, 2016
|
|
September 26, 2015
|
|
September 27, 2014
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and short term investments
|
|
$
|
482,106
|
|
|
$
|
32,397
|
|
|
$
|
92,982
|
|
|
$
|
47,584
|
|
|
$
|
88,666
|
|
Working capital
|
|
1,004,334
|
|
|
462,849
|
|
|
481,077
|
|
|
446,431
|
|
|
464,050
|
|
|||||
Total assets
|
|
1,907,209
|
|
|
1,306,906
|
|
|
1,180,683
|
|
|
1,101,112
|
|
|
1,157,715
|
|
|||||
Total debt (7)
|
|
692,153
|
|
|
395,653
|
|
|
395,269
|
|
|
396,982
|
|
|
445,214
|
|
|||||
Equity (8)
|
|
952,834
|
|
|
637,142
|
|
|
554,587
|
|
|
506,380
|
|
|
486,453
|
|
(1)
|
Fiscal years 2014, 2015, 2016 and 2018 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.
|
(3)
|
During fiscal 2014, we recognized a $16.9 million charge related to certain products introduced in fiscal 2013 in our Garden segment. 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 issued $400 million aggregate principal amount of 6.125% Senior Notes due November 2023 and 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)
|
Income tax expense was impacted by a fiscal 2018 tax benefit of $21.5 million from the revaluation of our deferred tax assets and liabilities as a result of the Tax Reform Act .
|
(7)
|
In December 2017, we issued $300 million aggregate principal amount of 5.125% senior notes due February 2028.
|
(8)
|
During the fourth quarter of fiscal 2018, we issued 5,550,000 shares of Class A common stock at a public offering price of $37.00 per share and received net proceeds of approximately $196 million.
|
•
|
Net sales for fiscal
2018
increased
$160.9 million
, or
7.8%
, to
$2,215.4 million
. Our Pet segment sales increased
7.6%
, and our Garden segment sales increased
8.2%
.
|
•
|
Gross profit for fiscal
2018
increased
$42.6 million
, or
6.7%
, to
$675.4 million
. Gross margin declined
30
basis points in fiscal
2018
to
30.5%
, from
30.8%
in fiscal
2017
.
|
•
|
Our operating income increased
$11.2 million
, or
7.2%
, to
$167.3 million
in fiscal
2018
, and as a percentage of net sales was flat compared to the prior year at
7.6%
. Non-GAAP operating income increased
$13.2 million
, or
8.6%
.
|
•
|
Net income for fiscal 2018 was
$123.6 million
, or
$2.32
per share on a fully diluted basis, compared to net income in fiscal
2017
of
$78.8 million
, or
$1.52
per share on a fully diluted basis.
|
•
|
Non-GAAP net income increased to
$102.1 million
, or
$1.91
per share, in fiscal
2018
from
$77.5 million
, or
$1.50
per share, in fiscal
2017
.
|
|
|
Fiscal Year Ended
|
|||||||
|
|
September 29, 2018
|
|
September 30, 2017
|
|
September 24, 2016
|
|||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold and occupancy
|
|
69.5
|
|
|
69.2
|
|
|
69.8
|
|
Gross profit
|
|
30.5
|
|
|
30.8
|
|
|
30.2
|
|
Selling, general and administrative
|
|
22.9
|
|
|
23.2
|
|
|
23.1
|
|
Intangible asset impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
Operating income
|
|
7.6
|
|
|
7.6
|
|
|
7.1
|
|
Interest expense, net
|
|
(1.6
|
)
|
|
(1.4
|
)
|
|
(2.3
|
)
|
Other income (expense)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.9
|
)
|
Income taxes
|
|
0.2
|
|
|
2.3
|
|
|
1.3
|
|
Noncontrolling interest
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Net income (loss)
|
|
5.6
|
%
|
|
3.8
|
%
|
|
2.4
|
%
|
Category
|
|
2018
|
|
2017
|
|
2016
|
|
||||||
Other pet products
|
|
$
|
896.5
|
|
|
$
|
841.4
|
|
|
$
|
689.3
|
|
|
Other garden supplies
|
|
528.8
|
|
|
464.9
|
|
|
331.3
|
|
|
|||
Dog and cat products
|
|
444.4
|
|
|
405.0
|
|
|
326.0
|
|
|
|||
Garden controls and fertilizer products
|
|
345.7
|
|
|
343.2
|
|
|
298.8
|
|
|
|||
Wild bird feed
|
|
—
|
|
(1)
|
—
|
|
(1)
|
183.6
|
|
|
|||
Total
|
|
$
|
2,215.4
|
|
|
$
|
2,054.5
|
|
|
$
|
1,829.0
|
|
|
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
|
|
|
•
|
Tax reform impacts: We have excluded the transitional impact of the Tax Reform Act as the remeasurement of our deferred tax assets and liabilities does not reflect the ongoing impact of the lower U.S. statutory rate on our current year or future earnings.
|
•
|
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 2018, 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.
|
(1)
|
Transitional impact of U.S. Tax Reform: As a result of the Tax Reform Act, during fiscal 2018, we recorded a tax benefit of $21.5 million, of which $16.3 million was recorded in the first quarter and $5.2 million in the fourth quarter, due to the remeasurement of its deferred tax assets and liabilities. We have excluded only this transitional impact and have not included in the adjustment the ongoing impact of the lower U.S. statutory rate on our current year earnings.
|
(2)
|
During the fourth quarter of fiscal 2016, we recognized a non-cash impairment charge in our Pet segment of $1.8 million related to the impairment of intangible assets caused by increased competition and declining volume of sales. This impairment is included within intangible asset impairment.
|
(3)
|
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.
|
(4)
|
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.
|
(5)
|
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
|
|
2018
|
|
2017
|
|
2016
|
||||||
Impairments of intangible assets
|
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,828
|
|
(Gain)/loss on disposal of plant assets
|
(3)
|
|
|
(2,050
|
)
|
|
(2,363
|
)
|
||||
Incremental expenses from note redemption and issuance
|
(4)
|
—
|
|
|
—
|
|
|
14,339
|
|
|||
Impairment of equity method investments
|
(5)
|
—
|
|
|
—
|
|
|
16,572
|
|
|||
Total non-GAAP adjustments
|
|
—
|
|
|
(2,050
|
)
|
|
30,376
|
|
|||
Tax effects of non-GAAP adjustments
|
(1)
|
—
|
|
|
(757
|
)
|
|
(10,492
|
)
|
|||
Tax effect of revaluation of deferred tax amounts
|
(1)
|
$
|
(21,485
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Total net income impact from non-GAAP adjustments
|
|
$
|
21,485
|
|
|
$
|
(1,293
|
)
|
|
$
|
19,884
|
|
SG&A Expense Reconciliation
|
|
GAAP to Non-GAAP Reconciliation
(in thousands) For the Fiscal Year Ended September |
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
GAAP SG&A expense
|
|
$
|
508,040
|
|
|
$
|
476,696
|
|
|
$
|
421,864
|
|
SG&A expense impact from non-GAAP adjustments
|
(2) (3)
|
—
|
|
|
2,050
|
|
|
2,363
|
|
|||
Non-GAAP SG&A expense
|
|
$
|
508,040
|
|
|
$
|
478,746
|
|
|
$
|
424,227
|
|
GAAP SG&A expense as a percentage of net sales
|
|
22.9
|
%
|
|
23.2
|
%
|
|
23.1
|
%
|
|||
Non-GAAP SG&A expense as a percentage of net sales
|
|
22.9
|
%
|
|
23.3
|
%
|
|
23.2
|
%
|
|||
|
|
|
|
|
|
|
||||||
Operating Income Reconciliation
|
|
|
||||||||||
GAAP operating income
|
|
$
|
167,336
|
|
|
$
|
156,112
|
|
|
$
|
129,358
|
|
Total operating income impact from non-GAAP adjustments
|
(2)(3)
|
—
|
|
|
(2,050
|
)
|
|
(535
|
)
|
|||
Non-GAAP operating income
|
|
$
|
167,336
|
|
|
$
|
154,062
|
|
|
$
|
128,823
|
|
GAAP operating margin
|
|
7.6
|
%
|
|
7.6
|
%
|
|
7.1
|
%
|
|||
Non-GAAP operating margin
|
|
7.6
|
%
|
|
7.5
|
%
|
|
7.0
|
%
|
|||
|
|
|
|
|
|
|
||||||
Pet Segment Operating Income Reconciliation
|
|
|
||||||||||
GAAP Pet segment operating income
|
|
$
|
140,353
|
|
|
$
|
131,622
|
|
|
$
|
119,930
|
|
Total operating income impact from non-GAAP adjustments
|
(2)(3)
|
—
|
|
|
—
|
|
|
(535
|
)
|
|||
Non-GAAP Pet segment operating income
|
|
$
|
140,353
|
|
|
$
|
131,622
|
|
|
$
|
119,395
|
|
GAAP Pet segment operating margin
|
|
10.5
|
%
|
|
10.6
|
%
|
|
11.1
|
%
|
|||
Non-GAAP Pet operating margin
|
|
10.5
|
%
|
|
10.6
|
%
|
|
11.0
|
%
|
|||
|
|
|
|
|
|
|
||||||
Garden Segment Operating Income Reconciliation
|
|
|
||||||||||
GAAP Garden segment operating income
|
|
$
|
95,551
|
|
|
$
|
87,298
|
|
|
$
|
70,317
|
|
Total operating income impact from non-GAAP adjustments
|
(3)
|
—
|
|
|
(2,050
|
)
|
|
—
|
|
|||
Non-GAAP Garden segment operating income
|
|
$
|
95,551
|
|
|
$
|
85,248
|
|
|
$
|
70,317
|
|
GAAP Garden segment operating margin
|
|
10.9
|
%
|
|
10.8
|
%
|
|
9.4
|
%
|
|||
Non-GAAP Garden segment operating margin
|
|
10.9
|
%
|
|
10.5
|
%
|
|
9.4
|
%
|
|||
|
|
|
|
|
|
|
||||||
Interest Expense Reconciliation
|
|
|
||||||||||
GAAP interest expense
|
|
$
|
(39,196
|
)
|
|
$
|
(28,209
|
)
|
|
$
|
(42,847
|
)
|
Impact from non-GAAP adjustment
|
(4)
|
—
|
|
|
—
|
|
|
14,339
|
|
|||
Non-GAAP interest expense
|
|
$
|
(39,196
|
)
|
|
$
|
(28,209
|
)
|
|
$
|
(28,508
|
)
|
|
|
GAAP to Non-GAAP Reconciliation
(in thousands, except per share amounts) For the Fiscal Year Ended September |
||||||||||
Other Income (Expense) Reconciliation
|
|
2018
|
|
2017
|
|
2016
|
||||||
GAAP other income (expense)
|
|
$
|
(3,860
|
)
|
|
$
|
(1,621
|
)
|
|
$
|
(17,013
|
)
|
Impact from non-GAAP adjustment
|
(5)
|
—
|
|
|
—
|
|
|
16,572
|
|
|||
Non-GAAP other income (expense)
|
|
$
|
(3,860
|
)
|
|
$
|
(1,621
|
)
|
|
$
|
(441
|
)
|
|
|
|
|
|
|
|
||||||
Net Income and Diluted Net Income Per Share Reconciliation
|
|
|
||||||||||
GAAP net income attributable to Central Garden & Pet
|
|
$
|
123,594
|
|
|
$
|
78,828
|
|
|
$
|
44,514
|
|
|
|
|
|
|
|
|
||||||
Total non-GAAP adjustments
|
(2)(3) (4)(5)
|
—
|
|
|
(2,050
|
)
|
|
30,376
|
|
|||
Tax effects of non-GAAP adjustments
|
|
—
|
|
|
757
|
|
|
(10,492
|
)
|
|||
Tax effect of revaluation of deferred tax amounts
|
(1)
|
(21,485
|
)
|
|
—
|
|
|
—
|
|
|||
Total net income impact from non-GAAP adjustments
|
|
(21,485
|
)
|
|
(1,293
|
)
|
|
19,884
|
|
|||
Non-GAAP net income attributable to Central Garden & Pet
|
|
$
|
102,109
|
|
|
$
|
77,535
|
|
|
$
|
64,398
|
|
GAAP diluted net income per share
|
|
$
|
2.32
|
|
|
$
|
1.52
|
|
|
$
|
0.87
|
|
Non-GAAP diluted net income per share
|
|
$
|
1.91
|
|
|
$
|
1.50
|
|
|
$
|
1.26
|
|
Shares used in GAAP and non-GAAP diluted net earnings per share calculation
|
|
53,341
|
|
|
51,820
|
|
|
51,075
|
|
|
|
GAAP to Non-GAAP Reconciliation
For the Fiscal Year Ended September 29, 2018 |
||||||||||||||||
|
|
Consolidated
|
|
Pet Segment
|
|
Garden Segment
|
||||||||||||
|
|
|
|
Percent Change
|
|
|
|
Percent Change
|
|
|
|
Percent Change
|
||||||
Reported net sales FY 2018 (GAAP)
|
|
$
|
2,215.4
|
|
|
|
|
$
|
1,340.9
|
|
|
|
|
$
|
874.5
|
|
|
|
Reported net sales FY 2017 (GAAP)
|
|
2,054.5
|
|
|
|
|
1,246.4
|
|
|
|
|
808.1
|
|
|
|
|||
Increase in net sales
|
|
160.9
|
|
|
7.8%
|
|
94.5
|
|
|
7.6%
|
|
66.4
|
|
|
8.2%
|
|||
Effect of acquisitions and dispositions on increase in net sales
|
|
140.3
|
|
|
|
|
56.2
|
|
|
|
|
84.1
|
|
|
|
|||
Increase (decrease) in organic net sales
|
|
20.6
|
|
|
1.0%
|
|
38.3
|
|
|
3.1%
|
|
(17.7
|
)
|
|
(2.2)%
|
|||
Estimated impact of extra week in fiscal 2017 on organic sales
|
|
32.8
|
|
|
|
|
21.4
|
|
|
|
|
11.4
|
|
|
|
|||
Organic net sales adjusted for extra week
|
|
$
|
53.4
|
|
|
2.6%
|
|
$
|
59.7
|
|
|
4.8%
|
|
$
|
(6.3
|
)
|
|
(0.8)%
|
|
|
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
|
%
|
Contractual Obligations
|
|
Fiscal
2019
|
|
Fiscal
2020
|
|
Fiscal
2021
|
|
Fiscal
2022
|
|
Fiscal
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||
Long-term debt, including current maturities (1)
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
700.0
|
|
|
$
|
700.6
|
|
Interest payment obligations (2)
|
|
39.9
|
|
|
39.9
|
|
|
39.9
|
|
|
39.9
|
|
|
39.9
|
|
|
70.0
|
|
|
269.5
|
|
|||||||
Operating leases
|
|
32.9
|
|
|
27.4
|
|
|
18.4
|
|
|
12.4
|
|
|
6.7
|
|
|
22.6
|
|
|
120.4
|
|
|||||||
Purchase commitments (3)
|
|
88.6
|
|
|
35.0
|
|
|
23.3
|
|
|
15.7
|
|
|
10.1
|
|
|
0.4
|
|
|
173.1
|
|
|||||||
Performance-based payments (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
161.5
|
|
|
$
|
102.6
|
|
|
$
|
81.7
|
|
|
$
|
68.1
|
|
|
$
|
56.7
|
|
|
$
|
793.0
|
|
|
$
|
1,263.6
|
|
(1)
|
Excludes $3.3 million of outstanding letters of credit related to normal business transactions. Debt repayments do not reflect the unamortized portion of deferred financing costs associated with the 2023 Notes and 2028 Notes of
$8.4 million
as of
September 29, 2018
, of which,
$4.0 million
is amortizable until November 2023, and
$4.4 million
is amortizable until February 2028 and is included in the carrying value of the 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 and 2028 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 $0.3 million were made in fiscal 2018 related to Hydro-Organics Wholesale, Inc. Potential performance-based periods extend through fiscal 2019 for Bell Nursery, fiscal 2020 for Segrest, fiscal 2020 for B2E and fiscal 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
|
|
Filed, Not Furnished
|
|
|
10-K
|
|
001-33268
|
|
3.1
|
|
12/14/2006
|
|
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
3.2
|
|
12/10/2015
|
|
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
4.1
|
|
11/29/2017
|
|
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
4.2
|
|
11/29/2017
|
|
|
|
|
Exhibit
Number
|
|
Exhibit
|
|
Form
|
|
File
No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
Filed, Not Furnished
|
|
|
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
|
|
|
|
|
||
4.8
|
|
|
8-K
|
|
001-33268
|
|
4.1
|
|
12/14/2017
|
|
|
|
|
|
4.9
|
|
|
8-K
|
|
011-33268
|
|
4.2
|
|
12/14/2017
|
|
|
|
|
|
|
|
10-K
|
|
011-33268
|
|
10.1
|
|
11/29/2017
|
|
|
|
|
||
|
|
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
|
|
|
|
|
Exhibit
Number
|
|
Exhibit
|
|
Form
|
|
File
No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
Filed, Not Furnished
|
|
|
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
|
|
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
10/7/2002
|
|
11/26/2008
|
|
|
|
|
||
|
|
10-Q
|
|
001-33268
|
|
10.1
|
|
2/7/2013
|
|
|
|
|
||
|
|
10-Q
|
|
001-33268
|
|
10.1
|
|
2/5/2015
|
|
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
10.2
|
|
11/29/2017
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
|
|
||
|
|
8-K
|
|
000-20242
|
|
10.1
|
|
10/14/2005
|
|
|
|
|
||
|
|
8-K
|
|
000-20242
|
|
10.2
|
|
10/14/2005
|
|
|
|
|
||
|
|
10-K
|
|
001-33268
|
|
10.24
|
|
12/10/2015
|
|
|
|
|
||
|
|
8-K
|
|
011-33268
|
|
10.25
|
|
5/6/2016
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
|
|
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 28, 2018
|
George C. Roeth
|
|
|
||
|
|
|
|
|
/s/ Nicholas Lahanas
|
|
Chief Financial Officer
(Principal Financial Officer) |
|
November 28, 2018
|
Nicholas Lahanas
|
|
|
||
|
|
|
||
/s/ Howard A. Machek
|
|
Senior Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
|
|
November 28, 2018
|
Howard A. Machek
|
|
|
||
|
|
|
||
/s/ John B. Balousek
|
|
Director
|
|
November 28, 2018
|
John B. Balousek
|
|
|
||
|
|
|
||
/s/ William E. Brown
|
|
Director
|
|
November 28, 2018
|
William E. Brown
|
|
|
|
|
|
|
|
|
|
/s/ Thomas J. Colligan
|
|
Director
|
|
November 28, 2018
|
Thomas J. Colligan
|
|
|
||
|
|
|
||
/s/ Michael J. Edwards
|
|
Director
|
|
November 28, 2018
|
Michael J. Edwards
|
|
|
||
|
|
|
||
/s/ John E. Hanson
|
|
Director
|
|
November 28, 2018
|
John E. Hanson
|
|
|
||
|
|
|
|
|
/s/ Brooks M. Pennington III
|
|
Chairman
|
|
November 28, 2018
|
Brooks M. Pennington III
|
|
|
|
|
|
|
|
||
/s/ John R. Ranelli
|
|
Director
|
|
November 28, 2018
|
John R. Ranelli
|
|
|
||
|
|
|
||
/s/ Mary Beth Springer
|
|
Director
|
|
November 28, 2018
|
Mary Beth Springer
|
|
|
||
|
|
|
||
/s/ Andrew K. Woeber
|
|
Director
|
|
November 28, 2018
|
Andrew K. Woeber
|
|
|
||
|
|
|
|
|
Central Garden & Pet Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 29,
2018 |
|
September 30,
2017 |
||||
|
|
(in thousands)
|
||||||
ASSETS
|
|
|
||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
482,106
|
|
|
$
|
32,397
|
|
Restricted cash
|
|
10,899
|
|
|
12,645
|
|
||
Accounts receivable, net
|
|
275,908
|
|
|
237,868
|
|
||
Inventories
|
|
427,823
|
|
|
382,101
|
|
||
Prepaid expenses and other
|
|
20,562
|
|
|
18,045
|
|
||
Total current assets
|
|
1,217,298
|
|
|
683,056
|
|
||
Plant, property and equipment, net
|
|
217,647
|
|
|
180,913
|
|
||
Goodwill
|
|
281,177
|
|
|
256,275
|
|
||
Other intangible assets, net
|
|
152,265
|
|
|
116,067
|
|
||
Other assets
|
|
38,822
|
|
|
70,595
|
|
||
Total
|
|
$
|
1,907,209
|
|
|
$
|
1,306,906
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
110,259
|
|
|
$
|
103,283
|
|
Accrued expenses
|
|
102,583
|
|
|
116,549
|
|
||
Current portion of long-term debt
|
|
122
|
|
|
375
|
|
||
Total current liabilities
|
|
212,964
|
|
|
220,207
|
|
||
Long-term debt
|
|
692,031
|
|
|
395,278
|
|
||
Deferred income taxes and other long-term obligations
|
|
49,380
|
|
|
54,279
|
|
||
Commitments and contingencies
(Note 11)
|
|
|
|
|
||||
Equity:
|
|
|
|
|
||||
Common stock
|
|
121
|
|
|
122
|
|
||
Class A common stock
|
|
439
|
|
|
380
|
|
||
Class B stock
|
|
16
|
|
|
16
|
|
||
Additional paid-in capital
|
|
590,168
|
|
|
396,790
|
|
||
Retained earnings
|
|
362,923
|
|
|
239,329
|
|
||
Accumulated other comprehensive loss
|
|
(1,218
|
)
|
|
(951
|
)
|
||
Total Central Garden & Pet shareholders’ equity
|
|
952,449
|
|
|
635,686
|
|
||
Noncontrolling interest
|
|
385
|
|
|
1,456
|
|
||
Total equity
|
|
952,834
|
|
|
637,142
|
|
||
Total
|
|
$
|
1,907,209
|
|
|
$
|
1,306,906
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
September 29,
2018 |
|
September 30,
2017 |
|
September 24,
2016 |
||||||
|
|
(in thousands, except per share amounts)
|
||||||||||
Net sales
|
|
$
|
2,215,362
|
|
|
$
|
2,054,478
|
|
|
$
|
1,829,017
|
|
Cost of goods sold and occupancy
|
|
1,539,986
|
|
|
1,421,670
|
|
|
1,275,967
|
|
|||
Gross profit
|
|
675,376
|
|
|
632,808
|
|
|
553,050
|
|
|||
Selling, general and administrative expenses
|
|
508,040
|
|
|
476,696
|
|
|
421,864
|
|
|||
Intangible asset impairment
|
|
—
|
|
|
—
|
|
|
1,828
|
|
|||
Operating income
|
|
167,336
|
|
|
156,112
|
|
|
129,358
|
|
|||
Interest expense
|
|
(39,196
|
)
|
|
(28,209
|
)
|
|
(42,847
|
)
|
|||
Interest income
|
|
3,145
|
|
|
147
|
|
|
140
|
|
|||
Other expense, net
|
|
(3,860
|
)
|
|
(1,621
|
)
|
|
(17,013
|
)
|
|||
Income before income taxes and noncontrolling interest
|
|
127,425
|
|
|
126,429
|
|
|
69,638
|
|
|||
Income tax expense
|
|
3,305
|
|
|
46,699
|
|
|
24,053
|
|
|||
Net income including noncontrolling interest
|
|
124,120
|
|
|
79,730
|
|
|
45,585
|
|
|||
Net income attributable to noncontrolling interest
|
|
526
|
|
|
902
|
|
|
1,071
|
|
|||
Net income attributable to Central Garden & Pet Company
|
|
$
|
123,594
|
|
|
$
|
78,828
|
|
|
$
|
44,514
|
|
Net income per share attributable to Central Garden & Pet Company:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
2.39
|
|
|
$
|
1.57
|
|
|
$
|
0.91
|
|
Diluted
|
|
$
|
2.32
|
|
|
$
|
1.52
|
|
|
$
|
0.87
|
|
Weighted average shares used in the computation of net income per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
51,716
|
|
|
50,230
|
|
|
48,964
|
|
|||
Diluted
|
|
53,341
|
|
|
51,820
|
|
|
51,075
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
September 29,
2018 |
|
September 30,
2017 |
|
September 24,
2016 |
||||||
Net income
|
|
$
|
124,120
|
|
|
$
|
79,730
|
|
|
$
|
45,585
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation
|
|
(267
|
)
|
|
343
|
|
|
(1,458
|
)
|
|||
Total comprehensive income
|
|
123,853
|
|
|
80,073
|
|
|
44,127
|
|
|||
Comprehensive income attributable to noncontrolling interests
|
|
526
|
|
|
902
|
|
|
1,071
|
|
|||
Comprehensive income attributable to Central Garden & Pet Company
|
|
$
|
123,327
|
|
|
$
|
79,171
|
|
|
$
|
43,056
|
|
|
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 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 deficiency on exercise of stock options, net of tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
)
|
|||||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
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 loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
|
|||||||||
Amortization of share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,252
|
|
|
—
|
|
|
—
|
|
|
9,252
|
|
|
—
|
|
|
9,252
|
|
|||||||||
Restricted share activity
|
(14,888
|
)
|
|
(1
|
)
|
|
48,180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,428
|
)
|
|
—
|
|
|
—
|
|
|
(7,429
|
)
|
|
—
|
|
|
(7,429
|
)
|
|||||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
5,885,349
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
191,554
|
|
|
—
|
|
|
—
|
|
|
191,613
|
|
|
—
|
|
|
191,613
|
|
|||||||||
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,597
|
)
|
|
(1,597
|
)
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(267
|
)
|
|
(267
|
)
|
|
—
|
|
|
(267
|
)
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123,594
|
|
|
—
|
|
|
123,594
|
|
|
526
|
|
|
124,120
|
|
|||||||||
Balance,
September 29, 2018 |
12,145,135
|
|
|
$
|
121
|
|
|
43,953,265
|
|
|
$
|
439
|
|
|
1,652,262
|
|
|
$
|
16
|
|
|
$
|
590,168
|
|
|
$
|
362,923
|
|
|
$
|
(1,218
|
)
|
|
$
|
952,449
|
|
|
$
|
385
|
|
|
$
|
952,834
|
|
|
Fiscal Year Ended
|
||||||||||
|
September 29,
2018 |
|
September 30,
2017 |
|
September 24,
2016 |
||||||
|
(in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
124,120
|
|
|
$
|
79,730
|
|
|
$
|
45,585
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
47,199
|
|
|
42,719
|
|
|
40,001
|
|
|||
Amortization of deferred financing costs
|
1,748
|
|
|
1,361
|
|
|
1,504
|
|
|||
Stock-based compensation
|
11,602
|
|
|
11,115
|
|
|
8,356
|
|
|||
Excess tax benefits from stock-based awards
|
—
|
|
|
(19,946
|
)
|
|
(6,869
|
)
|
|||
Deferred income taxes
|
(4,833
|
)
|
|
10,789
|
|
|
3,189
|
|
|||
Gain on sale of property and equipment
|
—
|
|
|
(2,050
|
)
|
|
(2,544
|
)
|
|||
Loss on disposal of property, plant and equipment
|
273
|
|
|
65
|
|
|
1,163
|
|
|||
Write-off of deferred financing costs
|
—
|
|
|
—
|
|
|
3,337
|
|
|||
Asset impairments
|
—
|
|
|
—
|
|
|
19,367
|
|
|||
Other
|
1,840
|
|
|
3,999
|
|
|
987
|
|
|||
Changes in assets and liabilities (excluding businesses acquired):
|
|
|
|
|
|
||||||
Receivables
|
(28,741
|
)
|
|
(32,419
|
)
|
|
27,444
|
|
|||
Inventories
|
(15,087
|
)
|
|
(15,885
|
)
|
|
(6,519
|
)
|
|||
Prepaid expenses and other assets
|
(3,803
|
)
|
|
2,845
|
|
|
6,901
|
|
|||
Accounts payable
|
(1,163
|
)
|
|
(2,143
|
)
|
|
(2,793
|
)
|
|||
Accrued expenses
|
(20,096
|
)
|
|
35,018
|
|
|
11,234
|
|
|||
Other long-term obligations
|
1,053
|
|
|
(889
|
)
|
|
1,083
|
|
|||
Net cash provided by operating activities
|
114,112
|
|
|
114,309
|
|
|
151,426
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(37,845
|
)
|
|
(44,659
|
)
|
|
(27,622
|
)
|
|||
Businesses acquired, net of cash acquired
|
(91,244
|
)
|
|
(103,880
|
)
|
|
(69,001
|
)
|
|||
Escrow deposit for acquisition-related contingent consideration
|
—
|
|
|
(6,000
|
)
|
|
—
|
|
|||
Proceeds from asset sales
|
—
|
|
|
8,547
|
|
|
3,911
|
|
|||
Change in restricted cash and cash equivalents.
|
1,746
|
|
|
(1,735
|
)
|
|
2,247
|
|
|||
Payments for investments
|
(9,048
|
)
|
|
(12,495
|
)
|
|
—
|
|
|||
Other investing activities
|
(2,745
|
)
|
|
(4,355
|
)
|
|
(730
|
)
|
|||
Net cash used in investing activities
|
(139,136
|
)
|
|
(164,577
|
)
|
|
(91,195
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Repayments on revolving line of credit
|
(23,000
|
)
|
|
(552,000
|
)
|
|
(419,000
|
)
|
|||
Borrowings on revolving line of credit
|
23,000
|
|
|
552,000
|
|
|
419,000
|
|
|||
Repayments of long-term debt
|
(431
|
)
|
|
(463
|
)
|
|
(400,307
|
)
|
|||
Issuance of long-term debt
|
300,000
|
|
|
—
|
|
|
400,000
|
|
|||
Proceeds from issuance of common stock, net of offering costs
|
195,631
|
|
|
—
|
|
|
324
|
|
|||
Excess tax benefits from stock-based awards
|
—
|
|
|
19,946
|
|
|
6,869
|
|
|||
Repurchase of common stock, including shares surrendered for tax withholding
|
(13,797
|
)
|
|
(27,556
|
)
|
|
(10,873
|
)
|
|||
Payments of contingent consideration
|
(253
|
)
|
|
(1,300
|
)
|
|
(2,026
|
)
|
|||
Distribution to noncontrolling interest
|
(1,597
|
)
|
|
(1,019
|
)
|
|
(592
|
)
|
|||
Payment of financing costs
|
(4,770
|
)
|
|
—
|
|
|
(7,560
|
)
|
|||
Net cash provided (used) by financing activities
|
474,783
|
|
|
(10,392
|
)
|
|
(14,165
|
)
|
|||
Effect of exchange rate changes on cash and equivalents
|
(50
|
)
|
|
75
|
|
|
(668
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
449,709
|
|
|
(60,585
|
)
|
|
45,398
|
|
|||
Cash and cash equivalents at beginning of year
|
32,397
|
|
|
92,982
|
|
|
47,584
|
|
|||
Cash and cash equivalents at end of year
|
$
|
482,106
|
|
|
$
|
32,397
|
|
|
$
|
92,982
|
|
Supplemental information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
36,664
|
|
|
$
|
27,878
|
|
|
$
|
32,995
|
|
Cash paid for income taxes – net of refunds
|
19,508
|
|
|
10,560
|
|
|
10,399
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital expenditures incurred but not paid
|
2,386
|
|
|
3,106
|
|
|
2,743
|
|
|||
Liability for contingent performance based payments
|
(2,888
|
)
|
|
2,830
|
|
|
2,590
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Liability for contingent consideration (a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,224
|
|
|
$
|
8,224
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,224
|
|
|
$
|
8,224
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Liability for contingent consideration (a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,343
|
|
|
$
|
9,343
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,343
|
|
|
$
|
9,343
|
|
(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, future performance-based contingent payments for Segrest, Inc., acquired in October 2016, and future performance-based contingent payments for Bell Nursery, acquired in March 2018. 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 30, 2017
|
$
|
9,343
|
|
Estimated contingent performance-based consideration established at the time of acquisition
|
2,022
|
|
|
Changes in the fair value of contingent performance-based payments
|
(2,888
|
)
|
|
Performance-based payments made
|
(253
|
)
|
|
Balance as of September 29, 2018
|
$
|
8,224
|
|
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
|
12,991
|
|
|
—
|
|
|
12,991
|
|
||
Fixed assets
|
1,014
|
|
|
516
|
|
|
1,530
|
|
||
Goodwill
|
—
|
|
|
5,520
|
|
|
5,520
|
|
||
Other assets
|
14,147
|
|
|
(14,136
|
)
|
|
11
|
|
||
Other intangible assets, net
|
—
|
|
|
8,100
|
|
|
8,100
|
|
||
Current liabilities
|
(3,506
|
)
|
|
—
|
|
|
(3,506
|
)
|
||
Long-term obligations
|
(361
|
)
|
|
|
|
(361
|
)
|
|||
Net assets acquired, less cash and cash equivalents
|
$
|
24,285
|
|
|
—
|
|
|
$
|
24,285
|
|
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
|
$
|
28,330
|
|
|
$
|
(359
|
)
|
|
$
|
27,971
|
|
Fixed assets
|
30,278
|
|
|
383
|
|
|
30,661
|
|
|||
Goodwill
|
—
|
|
|
7,415
|
|
|
7,415
|
|
|||
Other assets
|
11,647
|
|
|
(11,647
|
)
|
|
—
|
|
|||
Other intangible assets, net
|
—
|
|
|
6,230
|
|
|
6,230
|
|
|||
Current liabilities
|
(11,611
|
)
|
|
(2,022
|
)
|
|
(13,633
|
)
|
|||
Net assets acquired, less cash and cash equivalents
|
$
|
58,644
|
|
|
$
|
—
|
|
|
$
|
58,644
|
|
|
Amounts Previously Recognized as of Acquisition Date (1)
|
|
Measurement Period Adjustments
|
|
Amounts Recognized as of Acquisition Date (as Adjusted)
|
||||||
In thousands
|
|
|
|
|
|
||||||
Current assets, net of cash and cash equivalents acquired
|
$
|
5,439
|
|
|
$
|
613
|
|
|
$
|
6,052
|
|
Fixed assets
|
315
|
|
|
—
|
|
|
315
|
|
|||
Other assets
|
41,781
|
|
|
(41,781
|
)
|
|
—
|
|
|||
Goodwill
|
—
|
|
|
11,968
|
|
|
11,968
|
|
|||
Other intangible assets
|
—
|
|
|
29,200
|
|
|
29,200
|
|
|||
Current liabilities
|
(757
|
)
|
|
—
|
|
|
(757
|
)
|
|||
Net assets acquired, less cash and cash equivalents
|
$
|
46,778
|
|
|
$
|
—
|
|
|
$
|
46,778
|
|
|
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
|
|
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 24, 2016
|
19,296
|
|
|
6,041
|
|
|
(4,268
|
)
|
|
21,069
|
|
Fiscal Year Ended September 30, 2017
|
21,069
|
|
|
2,921
|
|
|
(2,554
|
)
|
|
21,436
|
|
Fiscal Year Ended September 29, 2018
|
21,436
|
|
|
2,132
|
|
|
557
|
|
|
24,125
|
|
|
September 29,
2018 |
|
September 30,
2017 |
||||
Raw materials
|
$
|
117,539
|
|
|
$
|
116,591
|
|
Work in progress
|
35,691
|
|
|
16,394
|
|
||
Finished goods
|
263,845
|
|
|
241,420
|
|
||
Supplies
|
10,748
|
|
|
7,696
|
|
||
Total inventories, net
|
$
|
427,823
|
|
|
$
|
382,101
|
|
|
|
September 29,
2018 |
|
September 30,
2017 |
||||
Land
|
|
$
|
14,183
|
|
|
$
|
8,942
|
|
Buildings and improvements
|
|
154,787
|
|
|
131,280
|
|
||
Transportation equipment
|
|
9,348
|
|
|
7,141
|
|
||
Machine and warehouse equipment
|
|
227,727
|
|
|
207,878
|
|
||
Capitalized software
|
|
114,878
|
|
|
117,360
|
|
||
Office furniture and equipment
|
|
27,734
|
|
|
27,355
|
|
||
Assets under construction
|
|
24,015
|
|
|
13,451
|
|
||
|
|
572,672
|
|
|
513,407
|
|
||
Accumulated depreciation and amortization
|
|
(355,025
|
)
|
|
(332,494
|
)
|
||
|
|
$
|
217,647
|
|
|
$
|
180,913
|
|
|
Garden Products
Segment
|
|
Pet Products
Segment
|
|
Total
|
||||||
Balance as of September 26, 2015
|
|
|
|
|
|
||||||
Goodwill
|
$
|
213,583
|
|
|
$
|
405,067
|
|
|
$
|
618,650
|
|
Accumulated impairment losses
|
(213,583
|
)
|
|
(195,978
|
)
|
|
(409,561
|
)
|
|||
Balance as of
|
—
|
|
|
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
|
|
|||
Write off related to 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
|
|
|||
Additions in fiscal 2018
|
7,415
|
|
|
17,487
|
|
|
24,902
|
|
|||
Balance as of September 29, 2018
|
|
|
|
|
|
||||||
Goodwill
|
226,471
|
|
|
464,267
|
|
|
690,738
|
|
|||
Accumulated impairment losses
|
(213,583
|
)
|
|
(195,978
|
)
|
|
(409,561
|
)
|
|||
|
$
|
12,888
|
|
|
$
|
268,289
|
|
|
$
|
281,177
|
|
|
Gross
|
|
Accumulated
Amortization
|
|
Accumulated
Impairment
|
|
Net
Carrying
Value
|
||||||||
|
|
|
(in millions)
|
|
|
|
|
||||||||
September 29, 2018
|
|
|
|
|
|
|
|
||||||||
Marketing-related intangible assets – amortizable
|
$
|
18.6
|
|
|
$
|
(14.2
|
)
|
|
$
|
—
|
|
|
$
|
4.4
|
|
Marketing-related intangible assets – nonamortizable
|
70.6
|
|
|
—
|
|
|
(26.0
|
)
|
|
44.6
|
|
||||
Total
|
89.2
|
|
|
(14.2
|
)
|
|
(26.0
|
)
|
|
49.0
|
|
||||
Customer-related intangible assets – amortizable
|
128.3
|
|
|
(42.5
|
)
|
|
—
|
|
|
85.8
|
|
||||
Other acquired intangible assets – amortizable
|
25.4
|
|
|
(14.5
|
)
|
|
—
|
|
|
10.9
|
|
||||
Other acquired intangible assets – nonamortizable
|
7.8
|
|
|
—
|
|
|
(1.2
|
)
|
|
6.6
|
|
||||
Total
|
33.2
|
|
|
(14.5
|
)
|
|
(1.2
|
)
|
|
17.5
|
|
||||
Total other intangible assets
|
$
|
250.7
|
|
|
$
|
(71.2
|
)
|
|
$
|
(27.2
|
)
|
|
$
|
152.3
|
|
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 29,
2018 |
|
September 30,
2017 |
||||
|
|
(in thousands)
|
|||||||
Senior notes, interest at 6.125%, payable semi-annually, principal due November 2023
|
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Senior notes, interest at 5.125%, payable semi-annually, principal due February 2028
|
|
|
300,000
|
|
|
—
|
|
||
Unamortized debt issuance costs
|
|
|
(8,425
|
)
|
|
(4,840
|
)
|
||
Net carrying value
|
|
|
691,575
|
|
|
395,160
|
|
||
Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.50% or Base Rate plus a margin of 0.25% to 0.50%, final maturity April 2021
|
|
|
—
|
|
|
—
|
|
||
Other notes payable
|
|
|
578
|
|
|
493
|
|
||
Total
|
|
|
692,153
|
|
|
395,653
|
|
||
Less current portion
|
|
|
(122
|
)
|
|
(375
|
)
|
||
Long-term portion
|
|
|
$
|
692,031
|
|
|
$
|
395,278
|
|
(1)
|
Debt repayments do not reflect the unamortized portion of deferred financing costs associated with the 2023 Notes and 2028 Notes of
$8.4 million
as of
September 29, 2018
, of which,
$4.0 million
is amortizable until November 2023, and
$4.4 million
is amortizable until February 2028 and is included in the carrying value.
|
|
(in thousands)
|
||
Fiscal year:
|
|
||
2019
|
$
|
32,905
|
|
2020
|
27,395
|
|
|
2021
|
18,398
|
|
|
2022
|
12,401
|
|
|
2023
|
6,728
|
|
|
Thereafter
|
22,546
|
|
|
Total
|
$
|
120,373
|
|
|
Fiscal Year Ended
|
||||||||||
|
September 29,
2018 |
|
September 30,
2017 |
|
September 24,
2016 |
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
5,728
|
|
|
$
|
32,755
|
|
|
$
|
18,592
|
|
State
|
2,319
|
|
|
3,034
|
|
|
2,140
|
|
|||
Foreign
|
91
|
|
|
121
|
|
|
110
|
|
|||
Total
|
8,138
|
|
|
35,910
|
|
|
20,842
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(3,676
|
)
|
|
11,227
|
|
|
2,796
|
|
|||
State
|
(1,162
|
)
|
|
(1,038
|
)
|
|
463
|
|
|||
Foreign
|
5
|
|
|
600
|
|
|
(48
|
)
|
|||
Total
|
(4,833
|
)
|
|
10,789
|
|
|
3,211
|
|
|||
Total
|
$
|
3,305
|
|
|
$
|
46,699
|
|
|
$
|
24,053
|
|
|
Fiscal Year Ended
|
|||||||
|
September 29,
2018 |
|
September 30,
2017 |
|
September 24,
2016 |
|||
Statutory federal income tax rate
|
24.5
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
0.9
|
|
|
2.4
|
|
|
2.1
|
|
Other permanent differences
|
(0.1
|
)
|
|
0.3
|
|
|
(1.6
|
)
|
Adjustment of prior year accruals
|
—
|
|
|
(0.3
|
)
|
|
(0.6
|
)
|
Credits
|
(0.8
|
)
|
|
(0.6
|
)
|
|
(1.0
|
)
|
Rate change - Tax reform
|
(16.9
|
)
|
|
—
|
|
|
—
|
|
Stock based compensation
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
Other
|
0.4
|
|
|
0.1
|
|
|
0.6
|
|
Effective income tax rate (benefit)
|
2.6
|
%
|
|
36.9
|
%
|
|
34.5
|
%
|
|
September 29, 2018
|
|
September 30, 2017
|
||||||||||||
|
Deferred
Tax
Assets
|
|
Deferred
Tax
Liabilities
|
|
Deferred
Tax
Assets
|
|
Deferred
Tax
Liabilities
|
||||||||
|
(in thousands)
|
||||||||||||||
Allowance for doubtful accounts
|
$
|
5,613
|
|
|
$
|
—
|
|
|
$
|
7,790
|
|
|
$
|
—
|
|
Inventory write-downs
|
6,819
|
|
|
—
|
|
|
10,406
|
|
|
—
|
|
||||
Prepaid expenses
|
—
|
|
|
1,408
|
|
|
—
|
|
|
1,740
|
|
||||
Nondeductible reserves
|
983
|
|
|
—
|
|
|
1,485
|
|
|
—
|
|
||||
State taxes
|
74
|
|
|
—
|
|
|
276
|
|
|
—
|
|
||||
Employee benefits
|
5,578
|
|
|
—
|
|
|
10,007
|
|
|
—
|
|
||||
Depreciation and amortization
|
—
|
|
|
65,983
|
|
|
—
|
|
|
84,059
|
|
||||
Equity loss
|
2,053
|
|
|
—
|
|
|
4,243
|
|
|
—
|
|
||||
State net operating loss carryforward
|
6,722
|
|
|
—
|
|
|
5,182
|
|
|
—
|
|
||||
Stock based compensation
|
2,541
|
|
|
—
|
|
|
3,097
|
|
|
—
|
|
||||
State credits
|
2,742
|
|
|
—
|
|
|
2,403
|
|
|
—
|
|
||||
Other
|
4,240
|
|
|
—
|
|
|
5,768
|
|
|
—
|
|
||||
Valuation allowance
|
(6,809
|
)
|
|
—
|
|
|
(6,527
|
)
|
|
—
|
|
||||
Total
|
$
|
30,556
|
|
|
$
|
67,391
|
|
|
$
|
44,130
|
|
|
$
|
85,799
|
|
|
|
||
Balance as of 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 Balance as of September 30, 2017
|
$
|
325
|
|
Increases related to prior year tax positions
|
138
|
|
|
Increases related to current year tax positions
|
83
|
|
|
Decreases related to prior year tax positions
|
(28
|
)
|
|
Settlements
|
—
|
|
|
Decreases related to lapse of statute of limitations
|
—
|
|
|
Balance as of Balance as of September 29, 2018
|
$
|
518
|
|
|
Number of
Shares
(in thousands)
|
|
Weighted
Average Exercise
Price per Share
|
|
Weighted Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||
Outstanding at September 30, 2017
|
2,471
|
|
|
$
|
16.79
|
|
|
4 years
|
|
$
|
50,420
|
|
Granted
|
547
|
|
|
$
|
36.72
|
|
|
|
|
|
||
Exercised
|
(627
|
)
|
|
$
|
12.18
|
|
|
|
|
|
||
Canceled or expired
|
(62
|
)
|
|
$
|
22.51
|
|
|
|
|
|
||
Outstanding at September 29, 2018
|
2,329
|
|
|
$
|
22.56
|
|
|
4 years
|
|
$
|
26,543
|
|
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
|
|
|
Exercisable at September 29, 2018
|
636
|
|
|
$
|
16.35
|
|
|
3 years
|
|
10,731
|
|
|
Expected to vest after September 29, 2018
|
1,560
|
|
|
$
|
24.90
|
|
|
4 years
|
|
$
|
12,861
|
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value per
Share
|
|||
|
(in thousands)
|
|
|
|||
Nonvested at September 30, 2017
|
1,137
|
|
|
$
|
14.34
|
|
Granted
|
227
|
|
|
$
|
37.78
|
|
Vested
|
(482
|
)
|
|
$
|
10.57
|
|
Forfeited
|
(8
|
)
|
|
$
|
8.39
|
|
Nonvested at September 29, 2018
|
874
|
|
|
$
|
22.37
|
|
|
Fiscal Year Ended
September 29, 2018 |
|
Fiscal Year Ended
September 30, 2017 |
|
Fiscal Year Ended
September 24, 2016 |
|||||||||||||||||||||||||||
|
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
|
$
|
123,594
|
|
|
51,716
|
|
|
$
|
2.39
|
|
|
$
|
78,828
|
|
|
50,230
|
|
|
$
|
1.57
|
|
|
$
|
44,514
|
|
|
48,964
|
|
|
$
|
0.91
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Options to purchase common stock
|
|
|
996
|
|
|
(0.05
|
)
|
|
|
|
992
|
|
|
(0.03
|
)
|
|
|
|
1,335
|
|
|
(0.02
|
)
|
|||||||||
Restricted shares
|
|
|
629
|
|
|
(0.02
|
)
|
|
|
|
598
|
|
|
(0.02
|
)
|
|
|
|
776
|
|
|
(0.02
|
)
|
|||||||||
Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) available to common shareholders
|
$
|
123,594
|
|
|
53,341
|
|
|
$
|
2.32
|
|
|
$
|
78,828
|
|
|
51,820
|
|
|
$
|
1.52
|
|
|
$
|
44,514
|
|
|
51,075
|
|
|
$
|
0.87
|
|
|
Fiscal 2018
|
|
|
||||||||||||||||
|
1
st
Quarter
|
|
2
nd
Quarter
|
|
3
rd
Quarter
|
|
4
th
Quarter
|
|
|
||||||||||
|
(in thousands, except per share amounts)
|
|
|
||||||||||||||||
Net sales
|
$
|
442,011
|
|
|
$
|
613,094
|
|
|
$
|
657,943
|
|
|
$
|
502,314
|
|
|
|
||
Gross profit
|
131,837
|
|
|
194,457
|
|
|
202,064
|
|
|
147,018
|
|
|
|
||||||
Net income attributable to Central Garden & Pet Company
|
26,247
|
|
(1
|
)
|
45,234
|
|
|
41,545
|
|
|
10,568
|
|
(1
|
)
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.52
|
|
|
$
|
0.89
|
|
|
$
|
0.81
|
|
|
$
|
0.20
|
|
|
|
||
Diluted
|
$
|
0.50
|
|
(1
|
)
|
$
|
0.86
|
|
|
$
|
0.79
|
|
|
$
|
0.19
|
|
(1
|
)
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
50,730
|
|
|
50,871
|
|
|
51,134
|
|
|
54,059
|
|
|
|
||||||
Diluted
|
52,695
|
|
|
52,658
|
|
|
52,575
|
|
|
55,376
|
|
|
|
|
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 (loss) attributable to Central Garden & Pet Company
|
7,637
|
|
(1
|
)
|
34,684
|
|
|
32,248
|
|
|
4,259
|
|
|
|
||||
Net income (loss) 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
|
|
|
|
Category
|
2018
|
|
2017
|
|
2016
|
|
||||||
Other pet products
|
$
|
896.5
|
|
|
$
|
841.4
|
|
|
$
|
689.3
|
|
|
Other garden supplies
|
528.8
|
|
|
464.9
|
|
|
331.3
|
|
|
|||
Dog and cat products
|
444.4
|
|
|
405.0
|
|
|
326.0
|
|
|
|||
Garden controls and fertilizer products
|
345.7
|
|
|
343.2
|
|
|
298.8
|
|
|
|||
Wild bird feed
|
—
|
|
(1)
|
—
|
|
(1)
|
183.6
|
|
|
|||
Total
|
$
|
2,215.4
|
|
|
$
|
2,054.5
|
|
|
$
|
1,829.0
|
|
|
|
Fiscal Year Ended
|
|
||||||||||
|
September 29, 2018
|
|
September 30, 2017
|
|
September 24, 2016
|
|
||||||
Net sales:
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
1,340,899
|
|
|
$
|
1,246,354
|
|
|
$
|
1,081,853
|
|
|
Garden segment
|
874,463
|
|
|
808,124
|
|
|
747,164
|
|
|
|||
Total
|
$
|
2,215,362
|
|
|
$
|
2,054,478
|
|
|
$
|
1,829,017
|
|
|
Operating income (loss):
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
140,353
|
|
|
$
|
131,622
|
|
|
$
|
119,930
|
|
(1)
|
Garden segment
|
95,551
|
|
|
87,298
|
|
|
70,317
|
|
|
|||
Corporate
|
(68,568
|
)
|
|
(62,808
|
)
|
|
(60,889
|
)
|
|
|||
Total
|
167,336
|
|
|
156,112
|
|
|
129,358
|
|
|
|||
Interest expense
|
(39,196
|
)
|
|
(28,209
|
)
|
|
(42,847
|
)
|
|
|||
Interest income
|
3,145
|
|
|
147
|
|
|
140
|
|
|
|||
Other expense
|
(3,860
|
)
|
|
(1,621
|
)
|
|
(17,013
|
)
|
(2)
|
|||
Income before income taxes and noncontrolling interest
|
127,425
|
|
|
126,429
|
|
|
69,638
|
|
|
|||
Income tax expense
|
3,305
|
|
|
46,699
|
|
|
24,053
|
|
|
|||
Net income including noncontrolling interest
|
124,120
|
|
|
79,730
|
|
|
45,585
|
|
|
|||
Net income attributable to noncontrolling interest
|
526
|
|
|
902
|
|
|
1,071
|
|
|
|||
Net income attributable to Central Garden & Pet Company
|
$
|
123,594
|
|
|
$
|
78,828
|
|
|
$
|
44,514
|
|
|
Assets:
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
683,938
|
|
|
$
|
612,337
|
|
|
$
|
508,879
|
|
|
Garden segment
|
407,483
|
|
|
311,026
|
|
|
304,901
|
|
|
|||
Corporate and eliminations
|
815,788
|
|
|
383,543
|
|
|
366,903
|
|
|
|||
Total
|
$
|
1,907,209
|
|
|
$
|
1,306,906
|
|
|
$
|
1,180,683
|
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
29,889
|
|
|
$
|
26,044
|
|
|
$
|
22,556
|
|
|
Garden segment
|
8,744
|
|
|
6,267
|
|
|
6,098
|
|
|
|||
Corporate
|
8,566
|
|
|
10,408
|
|
|
11,347
|
|
|
|||
Total
|
$
|
47,199
|
|
|
$
|
42,719
|
|
|
$
|
40,001
|
|
|
Expenditures for long-lived assets:
|
|
|
|
|
|
|
||||||
Pet segment
|
$
|
26,979
|
|
|
$
|
38,970
|
|
|
$
|
18,939
|
|
|
Garden segment
|
8,016
|
|
|
4,948
|
|
|
4,750
|
|
|
|||
Corporate
|
2,850
|
|
|
741
|
|
|
3,933
|
|
|
|||
Total
|
$
|
37,845
|
|
|
$
|
44,659
|
|
|
$
|
27,622
|
|
|
(1)
|
Includes a
$1.8 million
impairment charge in fiscal 2016.
|
(2)
|
Includes a
$16.6 million
impairment charge related to
two
equity method investments in fiscal 2016.
|
|
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
|
||||||||||||||||||
|
Fiscal Year Ended September 29, 2018
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
730,439
|
|
|
$
|
167,584
|
|
|
$
|
1,397,688
|
|
|
$
|
(80,349
|
)
|
|
$
|
2,215,362
|
|
Cost of goods sold and occupancy
|
568,145
|
|
|
128,944
|
|
|
917,276
|
|
|
(74,379
|
)
|
|
1,539,986
|
|
|||||
Gross profit
|
162,294
|
|
|
38,640
|
|
|
480,412
|
|
|
(5,970
|
)
|
|
675,376
|
|
|||||
Selling, general and administrative expenses
|
167,849
|
|
|
33,118
|
|
|
313,043
|
|
|
(5,970
|
)
|
|
508,040
|
|
|||||
Operating income (loss)
|
(5,555
|
)
|
|
5,522
|
|
|
167,369
|
|
|
—
|
|
|
167,336
|
|
|||||
Interest expense
|
(38,855
|
)
|
|
(547
|
)
|
|
206
|
|
|
—
|
|
|
(39,196
|
)
|
|||||
Interest income
|
3,138
|
|
|
6
|
|
|
1
|
|
|
—
|
|
|
3,145
|
|
|||||
Other income (expense)
|
(4,269
|
)
|
|
(236
|
)
|
|
645
|
|
|
—
|
|
|
(3,860
|
)
|
|||||
Income (loss) before taxes and equity in earnings of affiliates
|
(45,541
|
)
|
|
4,745
|
|
|
168,221
|
|
|
—
|
|
|
127,425
|
|
|||||
Income tax expense (benefit)
|
(1,138
|
)
|
|
79
|
|
|
4,364
|
|
|
—
|
|
|
3,305
|
|
|||||
Equity in earnings of affiliates
|
167,997
|
|
|
—
|
|
|
1,133
|
|
|
(169,130
|
)
|
|
—
|
|
|||||
Net income including noncontrolling interest
|
123,594
|
|
|
4,666
|
|
|
164,990
|
|
|
(169,130
|
)
|
|
124,120
|
|
|||||
Noncontrolling interest
|
—
|
|
|
526
|
|
|
—
|
|
|
—
|
|
|
526
|
|
|||||
Net income attributable to Central Garden & Pet Company
|
$
|
123,594
|
|
|
$
|
4,140
|
|
|
$
|
164,990
|
|
|
$
|
(169,130
|
)
|
|
$
|
123,594
|
|
|
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 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 STATEMENTS OF
COMPREHENSIVE INCOME
|
||||||||||||||||||
|
Fiscal Year Ended September 29, 2018
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
123,594
|
|
|
$
|
4,666
|
|
|
$
|
164,990
|
|
|
$
|
(169,130
|
)
|
|
$
|
124,120
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
(267
|
)
|
|
(145
|
)
|
|
(67
|
)
|
|
212
|
|
|
(267
|
)
|
|||||
Total comprehensive income
|
123,327
|
|
|
4,521
|
|
|
164,923
|
|
|
(168,918
|
)
|
|
123,853
|
|
|||||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
526
|
|
|
—
|
|
|
—
|
|
|
526
|
|
|||||
Comprehensive income attributable to Central Garden & Pet Company
|
$
|
123,327
|
|
|
$
|
3,995
|
|
|
$
|
164,923
|
|
|
$
|
(168,918
|
)
|
|
$
|
123,327
|
|
|
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:
|
|
|
|
|
|
|
|
|
|
||||||||||
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 BALANCE SHEET
|
||||||||||||||||||
|
|
September 29, 2018
|
||||||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
|
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
474,210
|
|
|
$
|
6,005
|
|
|
$
|
1,891
|
|
|
$
|
—
|
|
|
$
|
482,106
|
|
Restricted cash
|
|
10,899
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,899
|
|
|||||
Accounts receivable, net
|
|
94,657
|
|
|
9,647
|
|
|
171,604
|
|
|
—
|
|
|
275,908
|
|
|||||
Inventories
|
|
123,178
|
|
|
32,556
|
|
|
272,089
|
|
|
—
|
|
|
427,823
|
|
|||||
Prepaid expenses and other assets
|
|
6,304
|
|
|
1,455
|
|
|
12,803
|
|
|
—
|
|
|
20,562
|
|
|||||
Total current assets
|
|
709,248
|
|
|
49,663
|
|
|
458,387
|
|
|
—
|
|
|
1,217,298
|
|
|||||
Land, buildings, improvements and equipment, net
|
|
33,484
|
|
|
33,840
|
|
|
150,323
|
|
|
—
|
|
|
217,647
|
|
|||||
Goodwill
|
|
20,578
|
|
|
7,414
|
|
|
253,185
|
|
|
—
|
|
|
281,177
|
|
|||||
Other long term assets
|
|
62,199
|
|
|
7,469
|
|
|
133,145
|
|
|
(11,726
|
)
|
|
191,087
|
|
|||||
Intercompany receivable
|
|
40,365
|
|
|
—
|
|
|
769,886
|
|
|
(810,251
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
|
1,618,378
|
|
|
—
|
|
|
—
|
|
|
(1,618,378
|
)
|
|
—
|
|
|||||
Total
|
|
$
|
2,484,252
|
|
|
$
|
98,386
|
|
|
$
|
1,764,926
|
|
|
$
|
(2,440,355
|
)
|
|
$
|
1,907,209
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
|
$
|
33,122
|
|
|
$
|
4,759
|
|
|
$
|
72,378
|
|
|
$
|
—
|
|
|
$
|
110,259
|
|
Accrued expenses and other liabilities
|
|
44,142
|
|
|
4,746
|
|
|
53,695
|
|
|
—
|
|
|
102,583
|
|
|||||
Current portion of long term debt
|
|
116
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
122
|
|
|||||
Total current liabilities
|
|
77,380
|
|
|
9,505
|
|
|
126,079
|
|
|
—
|
|
|
212,964
|
|
|||||
Long-term debt
|
|
691,869
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|
692,031
|
|
|||||
Intercompany payable
|
|
753,933
|
|
|
56,318
|
|
|
—
|
|
|
(810,251
|
)
|
|
—
|
|
|||||
Losses in excess of investment in subsidiaries
|
|
—
|
|
|
—
|
|
|
25,036
|
|
|
(25,036
|
)
|
|
—
|
|
|||||
Other long-term obligations
|
|
8,621
|
|
|
—
|
|
|
52,485
|
|
|
(11,726
|
)
|
|
49,380
|
|
|||||
Shareholders’ equity attributable to Central Garden & Pet
|
|
952,449
|
|
|
32,178
|
|
|
1,561,164
|
|
|
(1,593,342
|
)
|
|
952,449
|
|
|||||
Noncontrolling interest
|
|
—
|
|
|
385
|
|
|
—
|
|
|
—
|
|
|
385
|
|
|||||
Total equity
|
|
952,449
|
|
|
32,563
|
|
|
1,561,164
|
|
|
(1,593,342
|
)
|
|
952,834
|
|
|||||
Total
|
|
$
|
2,484,252
|
|
|
$
|
98,386
|
|
|
$
|
1,764,926
|
|
|
$
|
(2,440,355
|
)
|
|
$
|
1,907,209
|
|
|
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 STATEMENT OF CASH FLOWS
|
||||||||||||||||||
|
Fiscal Year Ended September 29, 2018
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(16,676
|
)
|
|
$
|
(1,288
|
)
|
|
$
|
138,463
|
|
|
$
|
(6,387
|
)
|
|
$
|
114,112
|
|
Additions to property, plant and equipment
|
(6,633
|
)
|
|
(1,495
|
)
|
|
(29,717
|
)
|
|
—
|
|
|
(37,845
|
)
|
|||||
Businesses acquired, net of cash acquired, and investments in joint ventures
|
(91,244
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,244
|
)
|
|||||
Change in restricted cash and cash equivalents
|
1,746
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,746
|
|
|||||
Investment in equity method investee
|
(9,048
|
)
|
|
|
|
|
|
|
|
(9,048
|
)
|
||||||||
Other investing activities
|
(2,745
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,745
|
)
|
|||||
Intercompany investing activities
|
(3,760
|
)
|
|
—
|
|
|
(107,749
|
)
|
|
111,509
|
|
|
—
|
|
|||||
Net cash used by investing activities
|
(111,684
|
)
|
|
(1,495
|
)
|
|
(137,466
|
)
|
|
111,509
|
|
|
(139,136
|
)
|
|||||
Repayments on revolving line of credit
|
(23,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,000
|
)
|
|||||
Borrowings on revolving line of credit
|
23,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,000
|
|
|||||
Repayments of long-term debt
|
(56
|
)
|
|
—
|
|
|
(375
|
)
|
|
—
|
|
|
(431
|
)
|
|||||
Issuance of long-term debt
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|||||
Proceeds from issuance of common stock
|
195,631
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,631
|
|
|||||
Repurchase of common stock
|
(13,797
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,797
|
)
|
|||||
Payment of deferred financing costs
|
(4,770
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,770
|
)
|
|||||
Payments of contingent consideration
|
—
|
|
|
—
|
|
|
(253
|
)
|
|
—
|
|
|
(253
|
)
|
|||||
Distribution to parent
|
—
|
|
|
(6,387
|
)
|
|
—
|
|
|
6,387
|
|
|
—
|
|
|||||
Distribution to noncontrolling interest
|
—
|
|
|
(1,597
|
)
|
|
—
|
|
|
—
|
|
|
(1,597
|
)
|
|||||
Intercompany financing activities
|
106,525
|
|
|
4,984
|
|
|
—
|
|
|
(111,509
|
)
|
|
—
|
|
|||||
Net cash provided (used) by financing activities
|
583,533
|
|
|
(3,000
|
)
|
|
(628
|
)
|
|
(105,122
|
)
|
|
474,783
|
|
|||||
Effect of exchange rates on cash
|
(201
|
)
|
|
95
|
|
|
56
|
|
|
—
|
|
|
(50
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
454,972
|
|
|
(5,688
|
)
|
|
425
|
|
|
—
|
|
|
449,709
|
|
|||||
Cash and cash equivalents at beginning of year
|
19,238
|
|
|
11,693
|
|
|
1,466
|
|
|
—
|
|
|
32,397
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
474,210
|
|
|
$
|
6,005
|
|
|
$
|
1,891
|
|
|
$
|
—
|
|
|
$
|
482,106
|
|
|
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
|
||||||||||||||||||
|
Fiscal Year Ended September 30, 2017
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
|
Parent
|
|
Non-Guarantor
Subsidiaries
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash (used) provided 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
|
|
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, March 1, 2014 and March 1, 2016 (this "Amendment")
|
1)
|
During the period from March 1, 2018 through February 28, 2020 effective as of March 1, 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, 2018, your base salary will be $135,000 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, the March 1, 2014 amendment or the March 1, 2016 amendment), the terms and provisions of the Employment Agreement and Non-Competition Agreement will remain in full force and effect.
|
George Yuhas
|
Brooks M. Pennington, III
|
Dated:
|
|
|
(William Lynch)
|
|
|
Dated:
|
Central Garden & Pet Company
|
|
|
|
|
|
By:
|
|
|
AGREED AND ACCEPTED BY:
|
|
|
|
|
|
|
|
(William Lynch)
|
|
|
|
|
|
|
|
|
|
For Central Garden & Pet Company
|
|
|
|
|
|
By:
|
|
|
|
Dated:
|
|
|
(William Lynch)
|
|
|
Dated:
|
|
|
|
|
Central Garden & Pet Company
|
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 28, 2018
|
/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 28, 2018
|
/s/ Nicholas Lahanas
|
|
Nicholas Lahanas
|
|
Chief Financial Officer
|
|
(Principal Financial 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 presents, in all material respects, the financial condition and results of operations of Central Garden & Pet Company.
|
November 28, 2018
|
/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 28, 2018
|
/s/ Nicholas Lahanas
|
|
Nicholas Lahanas
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|