Fiscal 2018 diluted EPS of $2.32 vs. diluted
EPS of $1.52 for fiscal 2017
Fiscal 2018 non-GAAP diluted EPS of $1.91
vs. non-GAAP diluted EPS of $1.50 for fiscal 2017
Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA),
a leading innovator, producer and distributor of branded and
private label products for the lawn & garden and pet supplies
markets, today announced financial results for its fiscal year and
fourth quarter ended September 29, 2018.
Fiscal 2018 Summary
Net sales of $2.22 billion increased 7.8% compared to $2.05
billion a year ago, primarily due to acquisitions closed in fiscal
2018 and despite fiscal 2018 containing one less week compared to
fiscal 2017. Branded product sales of $1.76 billion increased 7.0%
and sales of other manufacturers’ products increased 11.1% to
$454.4 million. Organic sales growth for the year, excluding the
extra week a year ago, increased 2.6% due to strength in the Pet
segment. Gross margin decreased 30 basis points to 30.5% compared
to 30.8% in the prior year, due to the impact of businesses
acquired during the year. Cost reductions achieved during the year,
consistent with the Company's annual target of 1% to 2%, aided in
keeping organic margins from declining despite an unfavorable mix
of sales and inflationary pressures on raw materials, freight, and
labor costs. Going forward, the Company intends to raise prices in
fiscal 2019 to help offset the impact of these inflationary
pressures on its margins.
Fiscal 2018 GAAP Operating Income, Net
Earnings and EPS
- Operating income of $167.3 million
increased 7.2% from $156.1 million in fiscal 2017;
- Operating margin of 7.6% was flat
compared to fiscal 2017;
- Net income of $123.6 million, increased
56.8% compared to $78.8 million in fiscal 2017. Fiscal 2018
included a $21.5 million one-time gain from a revaluation of the
Company's deferred tax accounts; and
- Earnings per share increased 52.6% to
$2.32 per fully diluted share.
Fiscal 2018 Non-GAAP Operating Income, Net
Earnings and EPS
- Non-GAAP results for fiscal 2018
exclude a favorable tax impact of $21.5 million for the revaluation
of the Company's deferred tax accounts;
- Non-GAAP results for fiscal 2017
exclude a $2.0 million gain from the sale of a Garden distribution
facility in the first quarter;
- Non-GAAP operating income for fiscal
2018, was $167.3 million with an operating margin of 7.6%, compared
to $154.1 million and 7.5% in fiscal 2017, aided by tight expense
control;
- Non-GAAP net income for fiscal 2018 was
$102.1 million, a 31.7% gain compared to $77.5 million in fiscal
2017, positively impacted by a lower Federal statutory tax rate,
offset somewhat by higher interest expense;
- Non-GAAP earnings per fully diluted
share increased 27.3% to $1.91 from $1.50 in the prior fiscal year;
and
- EBITDA increased 7.9%, or $15.7
million, to $214.5 million compared with fiscal 2017.
"We are pleased with how Central executed in fiscal 2018, as
market share gains and increased distribution continued to drive
revenue and earnings growth, even in the face of headwinds which
made for some challenges during the year," said George Roeth,
President & CEO of Central Garden & Pet. "By focusing on
what we could control, we were able to overcome the effects of
unfavorable weather, which impacted several of our businesses, an
unfavorable mix of sales, and unexpected inflationary pressures on
our costs. Our continued efforts around reducing costs 1% to 2%
annually and judicious expense control were big factors in keeping
margins stable for the year despite the unfavorable environment."
Roeth continued, "Looking forward, we would expect organic margins
to improve, as we make efforts to offset the effects of inflation
and tariffs with price increases, and to continue to reap
advantages from our cost savings initiatives. However, it should be
noted that overall Company margins and operating income will be
negatively impacted in the first two quarters of fiscal 2019, due
largely to timing differences related to our recent Bell Nursery
acquisition."
Fiscal 2018 Fourth Quarter Financial
Results
Net sales increased 2.4% to $502.3 million compared to $490.5
million in the fourth quarter a year ago, benefiting from
acquisitions, which more than offset the negative impact of the
comparison with the prior year that included an extra week. Branded
product sales of $395.5 million increased 0.5%, and sales of other
manufacturers’ products of $106.8 million increased 10.1%. Organic
sales growth, excluding the extra week in 2017, increased 2.8%,
driven by gains in the Pet segment. Gross margin decreased 30 basis
points compared to the fourth quarter a year ago to 29.3%, due to
the impact of businesses acquired during the year. However, gross
margin increased meaningfully on an organic basis.
Fourth Quarter GAAP Operating Income, Net
Earnings and EPS
- Operating income of $18.2 million was
up $3.8 million or 26.6% compared to $14.4 million in the fourth
quarter a year ago. Operating margin of 3.6% increased 70 basis
points compared to the fourth quarter a year ago, despite a
negative impact from the Company's two recent acquisitions and
higher corporate expenses. Lower selling and marketing expenses
compared to the fourth quarter of 2017 were the primary drivers of
the improvement;
- Net income increased to $10.6 million
from $4.3 million in the fourth quarter a year ago, benefiting from
a significantly lower tax rate compared to the fourth quarter a
year ago; and
- Earnings per fully-diluted share
increased to $0.19 from $0.08 in the fourth quarter a year
ago.
Fourth Quarter Non-GAAP Operating Income,
Net Earnings and EPS
- Non-GAAP results for the fourth quarter
of 2018 exclude a favorable tax impact of $5.2 million in the
quarter from the revaluation of the Company's deferred tax
accounts;
- Non-GAAP operating income was $18.2
million and non-GAAP operating margin was 3.6% compared to $14.4
million and 2.9% in the fourth quarter of fiscal 2017. The increase
was attributable to lower selling and marketing expenses;
- Non-GAAP net income increased to $5.4
million from $4.3 million in the fourth quarter a year ago;
- Non-GAAP earnings per diluted share
increased to $0.10 from $0.08 in the fourth quarter a year ago,
despite higher shares outstanding in the fourth quarter this year,
as a result of the Company's equity offering in August 2018;
and
- EBITDA increased $4.8 million, or
18.7%, to $30.5 million compared to the fourth quarter a year
ago.
Pet Segment Fiscal 2018 Fourth Quarter
Results
Fourth quarter net sales for the Pet segment increased 2.7% from
the same period a year ago, to $339.4 million, despite one less
week in the quarter versus a year ago. The gain was due to the
inclusion of the General Pet acquisition and organic growth, which
more than offset lower animal health sales. The Pet segment’s
branded product sales were $262.2 million, down 1.9% compared to
the fourth quarter a year ago, and sales of other manufacturers’
products were $77.2 million, an increase of 22.3%. Pet organic
sales, excluding the extra week last year, grew 4.8%, with gains in
the sales of other manufacturers' products and strength in the dog
& cat businesses leading the growth.
The Pet segment’s operating income rose 17.0% to $32.2 million
and operating margin increased 120 basis points, to 9.5%, from
$27.5 million and 8.3% in the fourth quarter a year ago. The
improvement was due in part to a higher gross margin, as well as
lower marketing expenditures, which more than offset lower animal
health profitability.
Garden Segment Fiscal 2018 Fourth
Quarter Results
Net sales for the Garden segment increased 1.8% compared to the
fourth quarter a year ago to $162.9 million, due to the acquisition
of Bell Nursery, which more than offset the impact of one less week
in the quarter versus the prior year period. The Garden segment’s
branded product sales were $133.3 million in the quarter, up 5.7%
compared to the fourth quarter a year ago. Sales of other
manufacturers’ products decreased 12.6% to $29.6 million. Organic
sales, excluding the extra week, were down 1.4%, as the impact of
unfavorable weather during the quarter and lower sales of other
manufacturers' products impacted results.
The Garden segment’s operating income in the quarter increased
to $1.6 million compared to $0.2 million in the fourth quarter a
year ago, and Garden operating margin increased 80 basis points to
1.0%. Despite a negative impact from the Bell Nursery business,
which is highly seasonal and typically loses money in the fourth
quarter, lower marketing expenditures compared to a year ago aided
results and drove the increase in operating margin.
Additional Information
At September 29, 2018, the Company’s cash and short-term
investment balance was $482.1 million, compared to $32.4 million a
year ago. The increase reflects the proceeds of approximately $500
million from debt and equity financings in fiscal 2018. Cash flow
from operations for the fourth quarter of fiscal 2018 was $96.4
million, compared to $71.7 million in the fourth quarter of fiscal
2017.
Total debt at September 29, 2018 was $692.2 million
compared to $395.7 million at September 30, 2017. Net interest
expense was $8.9 million for the fourth quarter compared to $7.2
million in the prior-year period. The increases in total debt and
interest expense were due primarily to the issuance of $300 million
of senior notes in December 2017. The Company's leverage ratio at
the end of the quarter and year, as defined in the Company's credit
agreement, was 3.0x compared to 1.9x in the prior year quarter.
Other expense for the quarter increased to $4.4 million from
$1.3 million in the fourth quarter a year ago due to timing in a
seasonal joint venture. The Company does not expect the business
investment losses to continue at this rate in fiscal 2019.
The Company's effective tax rate for the fourth quarter was
negative compared to 35.3% in the fourth quarter of 2017. For the
full fiscal year, the tax rate was 2.6% compared with 36.9% last
year. The fiscal 2018 tax rate reflects the revaluation of the
Company's deferred tax accounts and a reduction in the U.S. Federal
corporate tax rate. Excluding the impact of the revaluation of the
deferred tax accounts, the Company's tax rate was 19.5%. This
reflects a lower weighted average tax rate for the year as well as
a favorable impact from recent changes in accounting standards
around non-cash equity compensation expense, which is not currently
expected to continue to any meaningful degree going forward. The
Company's tax rate for fiscal 2019 is expected to approximate the
current Federal and state statutory rates for 2019 which combined
are 24.5%.
2019 Guidance
The Company expects overall revenue growth in the mid-single
digits for fiscal 2019 with organic revenue growth consistent with
its long-term annual target of 2% to 3%. In addition, EBITDA, which
the Company defines as operating income plus depreciation and
amortization, is expected to grow in the mid-single-digits, with
organic EBITDA growth in the upper-single digits. The Company also
expects earnings per fully-diluted share of $1.80 or higher for
fiscal 2019, a decrease from fiscal 2018 GAAP and non-GAAP
earnings. There are a number of factors that the Company expects
will negatively impact the comparability of fiscal 2019 EPS with
fiscal 2018 EPS, with the greatest impact in the Company's first
half of the fiscal year. The first factor is the timing of the
Company's recent Bell Nursery acquisition. The Company previously
estimated that its fiscal 2018 earnings were approximately $0.10
higher in fiscal 2018 than if it had Bell Nursery in its results
for the full fiscal year. Fiscal 2019 will have a full year of Bell
Nursery, including two quarters of losses that were prior to the
acquisition in fiscal 2018 and not present in fiscal 2018 results.
The second factor expected to negatively impact EPS is the higher
projected tax rate for fiscal 2019 compared with fiscal 2018. The
impact of these two items is expected to negatively impact fiscal
2019 EPS by approximately $0.25 when compared with fiscal 2018. A
third factor is the increase in shares outstanding from the
Company's equity offering in August 2018 and its dilutive effect on
EPS of approximately $0.15 per share when factoring in net interest
earned on the proceeds. Adjusting for all these factors, the EPS
comparison for the guidance of fiscal 2019 over fiscal 2018 would
be EPS growth of 15% or higher. Importantly, the fiscal 2019
guidance excludes the impact of any potential acquisitions.
The Company's first quarter comparisons versus the prior year
will have additional challenges, as price increases, intended to
offset inflationary pressures, are not taking effect until January
1, 2019. Interest expense is expected to also be higher than a year
ago, due to the timing of the Company's debt issuance in December
2018. Therefore, earnings comparisons are expected to be most
challenging in the Company's first fiscal quarter.
Mr. Roeth concluded, "We are focused on continuing the
substantial progress we have made over the last few years. With the
additional capital raised in fiscal 2018, as well as our ample cash
flow and solid balance sheet, we are well-capitalized and
well-positioned to grow organically and through M&A in the year
ahead. Importantly, we plan to continue to drive our core business
by significantly growing organic operating income during the
year."
Conference Call
The Company will host a conference call today at 4:30 p.m.
Eastern Time / 1:30 p.m. Pacific Time to discuss its fourth quarter
and fiscal 2018 results. The conference call will be accessible via
the internet through Central’s website, http://ir.central.com.
Alternatively, to listen to the call by telephone, dial (201)
689-8345 (domestic and international) using confirmation #13684806.
A replay of the call will be available for three days by dialing
(201) 612-7415 and entering confirmation #13684806.
About Central Garden &
Pet
Central Garden & Pet Company is a leading innovator,
producer and distributor of branded and private label products for
the lawn & garden and pet supplies markets. Committed to new
product innovation, our products are sold to specialty independent
and mass retailers. Participating categories in Lawn & Garden
include: Grass seed and the brands PENNINGTON®, and THE REBELS®;
wild bird feed and the brand PENNINGTON®; weed and insect control
and the brands AMDRO®, SEVIN®, and OVER-N-OUT®; fertilizer and the
brands PENNINGTON® and IRONITE®; live plants from BELL NURSERY; and
decorative outdoor patio products under the PENNINGTON® brand. We
also provide a host of other regional and application-specific
garden brands and supplies. Participating categories in Pet
include: Animal health and the brands ADAMS™, COMFORT ZONE®,
FARNAM®, HORSE HEALTH™ and VITAFLEX®; aquatics and reptile and the
brands AQUEON®, CORALIFE®, SEGREST™ and ZILLA®; bird & small
animal and the brands KAYTEE®, Forti-Diet® and CRITTER TRAIL®; and
dog & cat and the brands TFH™, NYLABONE®, FOUR PAWS®, IMS®,
CADET®, DMC™, K&H Pet Products™, PINNACLE® and AVODERM®. We
also provide a host of other application-specific pet brands and
supplies. Central Garden & Pet Company is based in Walnut
Creek, California, and has approximately 5,400 employees, primarily
in North America. For additional information on Central Garden
& Pet Company, including access to the Company's SEC filings,
please visit the Company’s website at www.central.com.
“Safe Harbor” Statement under the Private Securities Litigation
Reform Act of 1995: The statements contained in this release which
are not historical facts, including expectations for future price
increases and cost reductions, operating margin expansion,
potential acquisitions and earnings guidance for fiscal 2019 are
forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially
from those set forth in or implied by forward-looking statements.
All forward-looking statements are based upon the Company’s current
expectations and various assumptions. There are a number of risks
and uncertainties that could cause our actual results to differ
materially from the forward-looking statements contained in this
release including, but not limited to, the following factors:
- seasonality and fluctuations in the
Company’s operating results and cash flow;
- fluctuations in market prices for seeds
and grains and other raw materials and the Company’s ability to
pass through cost increases in a timely manner;
- adverse weather conditions;
- our dependence upon our key
executives;
- potential acquisitions;
- the impact of new accounting
regulations and the U.S. Tax Cuts and Jobs Act on the Company's tax
rate;
- dependence on a small number of
customers for a significant portion of our business;
- the impact of recent tariffs or a
potential trade war;
- risk associated with litigation arising
from our business;
- uncertainty about new product
innovations and marketing programs; and
- competition in our industries.
These risks and others are described in the Company’s Securities
and Exchange Commission filings. The Company undertakes no
obligation to publicly update these forward-looking statements to
reflect new information, subsequent events or otherwise.
CENTRAL GARDEN & PET
COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
Unaudited
ASSETS
September 29,
2018
September 30,
2017
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 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 income (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
CENTRAL GARDEN & PET
COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended Fiscal Year Ended
September 29,2018
September 30,2017
September 29,2018
September 30,2017
Net sales $ 502,314 $ 490,464 $ 2,215,362 $ 2,054,478 Cost of goods
sold and occupancy 355,296 345,136 1,539,986
1,421,670 Gross profit 147,018 145,328 675,376 632,808
Selling, general and administrative expenses 128,808 130,947
508,040 476,696 Operating income 18,210 14,381 167,336 156,112
Interest expense (10,619 ) (7,233 ) (39,196 ) (28,209 ) Interest
income 1,681 48 3,145 147 Other expense, net (4,402 ) (1,315 )
(3,860 ) (1,621 ) Income before income taxes and noncontrolling
interest 4,870 5,881 127,425 126,429
Income tax (benefit) expense
(5,497 ) 2,078 3,305 46,699 Net income
including noncontrolling interest 10,367 3,803 124,120 79,730 Net
income attributable to noncontrolling interest (201 ) (456 ) 526
902
Net (loss) income attributable to
Central Garden & Pet Company
$ 10,568 $ 4,259 $ 123,594 $ 78,828
Net income per share attributable to Central Garden &
Pet Company: Basic $ 0.20 $ 0.08 $ 2.39 $ 1.57
Diluted $ 0.19 $ 0.08 $ 2.32 $ 1.52
Weighted average shares used in the computation of
net income per share: Basic 54,059 50,654 51,716 50,230 Diluted
55,376 51,935 53,341 51,820
Use of Non-GAAP Financial Measures
We report our financial results in accordance with U.S.
generally accepted accounting principles (GAAP). However, to
supplement the financial results prepared in accordance with GAAP,
we use non-GAAP financial measures including non-GAAP net sales on
a consolidated and segment basis, non-GAAP selling, general and
administrative (SG&A) expense, non-GAAP operating income on a
consolidated and segment basis, non-GAAP interest expense, non-GAAP
other income (expense), non-GAAP net income and diluted net income
per share. and EBITDA. Management believes these non-GAAP financial
measures that exclude the impact of specific items (described
below) may be useful to investors in their assessment of our
ongoing operating performance and provide additional meaningful
comparisons between current results and results in prior operating
periods.
EBITDA is defined by us as income before income tax expense, net
other expense, net interest expense and depreciation and
amortization. We present EBITDA because we believe that EBITDA is a
useful supplemental measure in evaluating the cash flows and
performance of our business and provides greater transparency into
our results of operations. EBITDA is used by our management to
perform such evaluation. EBITDA should not be considered in
isolation or as substitutes for cash flow from operations, income
from operations or other income statement measure prepared in
accordance with GAAP. We believe that EBITDA is frequently used by
investors, securities analysts and other interested parties in
their evaluation of companies, many of which present EBITDA when
reporting their results. Other companies may calculate EBITDA
differently so it may not be comparable.
The reconciliations of these non-GAAP measures to the most
directly comparable financial measures calculated and presented in
accordance with GAAP are shown in the tables below. We believe that
the non-GAAP financial measures provide useful information to
investors and other users of our financial statements, by allowing
for greater transparency in the review of our financial and
operating performance. Management also uses these non-GAAP
financial measures in making financial, operating and planning
decisions and in evaluating our performance, and we believe these
measures similarly may be useful to investors in evaluating our
financial and operating performance and the trends in our business
from management's point of view. While our management believes that
non-GAAP measurements are useful supplemental information, such
adjusted results are not intended to replace our GAAP financial
results and should be read in conjunction with those GAAP
results.
Non-GAAP financial measures reflect adjustments based on the
following items:
- Tax reform impacts: The U.S. government
enacted comprehensive tax legislation commonly referred to as the
Tax Cuts and Job Act (the "Tax Reform Act") in December 2017. 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.
- 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.
- 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.
From time to time in the future, there may be other items that
we may exclude if we believe that doing so is consistent with the
goal of providing useful information to investors and
management.
The non-GAAP adjustments made reflect the following:
(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 fiscal 2017, we recognized a
$2.0 million gain in our Garden segment from the sale of a
distribution facility. This adjustment was recorded as part of
selling, general and administrative costs.
GAAP to Non-GAAP
Reconciliation(in thousands) For the Fiscal Year
Ended September
Non-GAAP Adjustments 2018 2017
(Gain)/loss on disposal of plant assets
(2)
$
—
$
(2,050
) Total non-GAAP adjustments
—
(2,050 ) Tax effects of non-GAAP adjustments
(1)
— (757 ) Tax effect of revaluation of deferred tax amounts
(1)
(21,485 ) — Total net income impact from
non-GAAP adjustments
$
21,485
$
(1,293
)
SG&A Expense Reconciliation $ 508,040 $ 476,696
GAAP SG&A expense — 2,050 SG&A
expense impact from non-GAAP adjustments
(2)
$ 508,040 $ 478,746 Non-GAAP SG&A expense 22.9 %
23.2 % GAAP SG&A expense as a percentage of net sales 22.9 %
23.3 %
Operating Income Reconciliation GAAP operating
income $ 167,336 $ 156,112 Total operating income impact from
non-GAAP adjustments
(2)
— (2,050 ) Non-GAAP operating income $ 167,336
$ 154,062 GAAP operating margin 7.6 % 7.6 % Non-GAAP
operating margin 7.6 % 7.5 %
GAAP to
Non-GAAP Reconciliation(in thousands) For the Fiscal
Year Ended September Garden Segment Operating Income
Reconciliation 2018 2017 GAAP Garden
segment operating income $ 95,551 87,298 Total operating income
impact from non-GAAP adjustments
(2)
— (2,050 ) Non-GAAP Garden segment operating income $ 95,551
$ 85,248 GAAP Garden segment operating margin 10.9 %
10.8 % Non-GAAP Garden segment operating margin 10.9 % 10.5 %
GAAP to Non-GAAP Reconciliation(in
thousands, except per share amounts) For the Fiscal Year
Ended September Net Income and Diluted Net Income Per Share
Reconciliation 2018 2017 GAAP net
income attributable to Central Garden & Pet $ 123,594 $ 78,828
Total non-GAAP adjustments
(2)
— (2,050 ) Tax effects of non-GAAP adjustments
(1)
— 757 Tax effect of revaluation of deferred tax amounts
(1)
(21,485 ) — Total net income impact from non-GAAP
adjustments $ (21,485 ) $ (1,293 ) Non-GAAP net income attributable
to Central Garden & Pet $ 102,109 $ 77,535 GAAP
diluted net income per share $ 2.32 $ 1.52 Non-GAAP diluted net
income per share $ 1.91 $ 1.50
Shares used in GAAP and non-GAAP diluted
net earnings per share calculation
53,341 51,820
GAAP to Non-GAAP
Reconciliation(in thousands) For the Quarter Ended
September 29, 2018 Net income and diluted net income per
share September 29, 2018 September 30,
2017 GAAP net income (loss) $ 10,568 $ 4,259 Tax effect of
revaluation of deferred tax amounts (1) 5,142 — Non-GAAP net
income $ 5,426 $ 4,259 GAAP diluted income (loss) per share $ 0.19
$ 0.08 Non-GAAP diluted income per share $ 0.10 $ 0.08
Shares used in GAAP and non-GAAP diluted
net earnings per share calculation
55,376 51,935
Organic Net Sales Reconciliation
We have provided organic net sales, a non-GAAP measure that
excludes the impact of recent acquisitions and dispositions,
because we believe it permits investors to better understand the
performance of our historical business. We define organic net sales
as net sales from our historical business derived by excluding the
net sales from businesses acquired or exited in the preceding 12
months. After an acquired business has been part of our
consolidated results for 12 months, the change in net sales
thereafter is considered part of the increase or decrease in
organic net sales.
GAAP to Non-GAAP ReconciliationFor the Fiscal Year
Ended September 29, 2018 Consolidated Pet
Segment Garden Segment
PercentChange
PercentChange
PercentChange
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 ReconciliationFor the Quarter Ended September 29,
2018 Consolidated Pet Segment
Garden Segment
PercentChange
PercentChange
PercentChange
Reported net sales Q4 FY18 (GAAP) $ 502.3 $ 339.4 $
162.9 Reported net sales Q4 FY17 (GAAP) $ 490.5 $
330.5 $ 160.0 Increase in net sales $ 11.8 2.4
%
$ 8.9 2.7
%
$ 2.9 1.8
%
Effect of acquisition and divestitures on increase in net sales $
31.1 $ 14.6 $ 16.5
Decrease in organic net sales
$ (19.3 ) (3.9 )% $ (5.7 ) (1.7 )% $ (13.6 ) (8.5 )% Impact
estimate of extra week in Q4 FY17 $ 32.8 $ 21.4 $
11.4 Adjusted organic net sales $ 13.5 2.8
%
$ 15.7 4.8
%
$ (2.2 ) (1.4 )%
EBITDA Reconciliation
The following is a reconciliation of net income to EBITDA:
GAAP to non-GAAP ReconciliationFiscal Year
Ended EBITDA Reconciliation September 29, 2018
September 30, 2017 Net income attributable to Central
Garden & Pet $ 123,594 $ 78,828 Interest expense, net
36,051 28,062 Other expense 3,860 1,621 Income tax expense 3,305
46,699 Net income attributable to noncontrolling interest 526
902 Sum of items below operating income 43,742 $ 77,284
Income from Operations 167,336 156,112 Depreciation &
Amortization 47,199 42,719 EBITDA $ 214,535 $ 198,831
GAAP to non-GAAP ReconciliationQuarter
Ended EBITDA Reconciliation September 29, 2018
September 30, 2017 Net income attributable to Central
Garden & Pet $ 10,568 $ 4,259 Interest expense, net
8,938 7,185 Other expense 4,402 1,315
Income tax (benefit) expense
(5,497 ) 2,078
Net loss attributable to noncontrolling
interest
(201 ) (456 ) Sum of items below operating income 7,642
10,122 Income from Operations 18,210 14,381
Depreciation & Amortization 12,327 11,345 EBITDA
$ 30,537 $ 25,726
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181127005827/en/
Steve ZenkerVP of Investor Relations & CommunicationsCentral
Garden & Pet Company925.948.3657
Central Garden and Pet (NASDAQ:CENT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Central Garden and Pet (NASDAQ:CENT)
Historical Stock Chart
From Sep 2023 to Sep 2024