WALNUT CREEK, Calif.--(BUSINESS WIRE)--Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) (“Central”), a market leader in the Pet and Garden industries, today announced its third quarter fiscal 2023 financial results for the period ended June 24, 2023.
“We delivered record operating income and earnings per share in the third quarter while expanding gross margin, growing market share and significantly improving our cash position. We are also pleased with the progress we are making on our cost and simplicity program,” said Tim Cofer, CEO of Central Garden & Pet. “Given our record Q3 performance, coupled with the early visibility we have into the fourth quarter, we are raising our outlook for the full year.”
Fiscal 2023 Third Quarter Financial Results
Net sales increased 1% to $1,023 million from $1,015 million a year ago.
Gross margin expanded by 80 basis points to 31.1% from 30.3% a year ago, and by 160 basis points to 31.9% on a non-GAAP basis. The gross margin expansion was driven by improved pricing, cost management and favorable product mix.
Operating income increased 8% to $123 million from $114 million a year ago, and 20% to $137 million on a non-GAAP basis. Operating margin expanded by 80 basis points to 12.0% from 11.2% in the prior year, and by 220 basis points to 13.4% on a non-GAAP basis. The operating margin expansion was driven by improved gross profit and reduced commercial spend to align with demand.
Net interest expense was $13 million compared to $14 million in the prior year quarter.
The Company's net income increased 10% to $83 million from $75 million a year ago, and 24% to $94 million on a non-GAAP basis. Earnings per share increased $0.17 to $1.56 from $1.39 in the prior year, and $0.36 to $1.75 on a non-GAAP basis. Adjusted EBITDA increased 17.3% to $166 million from $141 million in the prior year.
The Company’s effective tax rate was 24.4% compared to 23.7% in the prior year quarter.
Pet Segment Fiscal 2023 Third Quarter Results
Net sales for the Pet segment of $503 million were essentially flat compared to $505 million in the prior year. Strength in Dog & Cat Treats & Toys as well as Bird was offset by lower sales in Outdoor Cushions and lower demand for durable pet products.
Pet segment operating income was $60 million compared to $63 million a year ago and increased 18% to $74 million on a non-GAAP basis. Operating margin was 11.9% compared to 12.4% in the prior year. On a non-GAAP basis, operating margin increased by 230 basis points to 14.7% driven by improved pricing and cost management. Pet segment adjusted EBITDA was $84 million compared to $72 million a year ago.
Garden Segment Fiscal 2023 Third Quarter Results
Net sales for the Garden segment increased 2% to $520 million from $511 million a year ago. Strength in Live Goods, Packet Seed and Wild Bird was partly offset by lower sales in Distribution and Grass Seed.
Garden segment operating income increased 17% to $88 million from $76 million a year ago, and operating margin increased by 210 basis points to 16.9% from 14.8% in the prior year. The increase in operating margin was mainly driven by improved pricing, favorable product mix and cost management. Garden segment adjusted EBITDA increased 17% to $99 million from $85 million in the prior year quarter.
Additional Information
The Company's cash balance at the end of the quarter was $333 million compared to $196 million a year ago. Cash provided by operations during the quarter was $325 million compared to $190 million a year ago. The increase in cash provided by operations was driven by a reduction in inventory as the Company converted inventory to cash.
Total debt as of June 24, 2023 and June 25, 2022 was $1.2 billion. The Company's leverage ratio, as defined in the Company's credit agreement, at the end of the third quarter was 3.1x compared to 2.9x at the end of the prior year quarter. The Company repurchased approximately 466,011 shares or $16.7 million of its stock during the quarter.
Cost and Simplicity Program
The Company continues to progress its multi-year cost and simplicity program consisting of a pipeline of projects across a number of key areas including procurement, manufacturing, logistics, portfolio management and administrative costs to simplify its business and improve efficiency across the organization. In the third quarter fiscal 2023, as expected, the Company incurred $14 million of one-time charges related to the closure of its pet bedding facility in Texas, the majority of which were non-cash.
Earlier this week, the Company completed the sale of its independent garden center distribution business to reduce complexity and improve margins. The Company will retain its third-party distribution business with its largest three retail partners and select other national accounts. The Company will share more details on its earnings call.
Fiscal 2023 Guidance
Taking the record Q3 performance into account, coupled with the early visibility into the fourth quarter, the Company now expects fiscal 2023 non-GAAP EPS of $2.55 or better. This outlook reflects the macroeconomic uncertainty, cost inflation, evolving consumer behavior and unfavorable retailer inventory dynamics, as well as pricing actions and productivity initiatives across the Company's portfolio. The Company anticipates capital spending significantly below fiscal 2022 levels. Fiscal 2023 will have 53 weeks compared to 52 weeks in fiscal 2022. This outlook excludes the impact of any acquisitions, divestitures or restructuring activities that may occur during fiscal 2023, including any projects under the cost and simplicity program.
Conference Call
The Company's senior management will hold a conference call today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss its third quarter fiscal 2023 financial results and provide a general business update. The conference call and related materials can be accessed at http://ir.central.com.
Alternatively, to listen to the call by telephone, dial (201) 689-8345 (domestic and international) using confirmation #13738720.
About Central Garden & Pet
Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) understands that home is central to life and has proudly nurtured happy and healthy homes for over 40 years. With fiscal 2022 net sales of $3.3 billion, Central is on a mission to lead the future of the Pet and Garden industries. The Company’s innovative and trusted products are dedicated to helping lawns grow greener, gardens bloom bigger, pets live healthier and communities grow stronger. Central is home to a leading portfolio of more than 65 high-quality brands including Amdro®, Aqueon®, Cadet®, Farnam®, Ferry-Morse®, Four Paws®, Kaytee®, K&H®, Nylabone® and Pennington®, strong manufacturing and distribution capabilities and a passionate, entrepreneurial growth culture. Central is based in Walnut Creek, California and has over 7,000 employees across North America and Europe. Visit www.central.com to learn more.
Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts, including statements concerning cost inflation, evolving consumer behavior and unfavorable retailer inventory dynamics, pricing actions, productivity initiatives and reduced capital spending, and earnings guidance for fiscal 2023, 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:
- high inflation, rising interest rates, a potential recession and other adverse macro-economic conditions;
- fluctuations in market prices for seeds and grains and other raw materials;
- our ability to pass through cost increases in a timely manner;
- fluctuations in energy prices, fuel and related petrochemical costs;
- declines in consumer spending and increased inventory risk during economic downturns;
- the potential for future reductions in demand for product categories that benefited from the COVID-19 pandemic, including the potential for reduced orders as retailers work through excess inventory;
- adverse weather conditions;
- the success of our Central to Home strategy and our Cost and Simplicity program;
- risks associated with our acquisition strategy, including our ability to successfully integrate acquisitions and the impact of purchase accounting on our financial results;
- restructuring activities to improve long-term profitability;
- supply chain delays and disruptions resulting in lost sales, reduced fill rates and service levels, and delays in expanding capacity and automating processes;
- seasonality and fluctuations in our operating results and cash flow;
- supply shortages in pet birds, small animals and fish;
- dependence on a small number of customers for a significant portion of our business;
- consolidation trends in the retail industry;
- risks associated with new product introductions, including the risk that our new products will not produce sufficient sales to recoup our investment;
- competition in our industries;
- continuing implementation of an enterprise resource planning information technology system;
- potential environmental liabilities;
- risks associated with international sourcing;
- impacts of tariffs or a trade war;
- access to and cost of additional capital;
- potential goodwill or intangible asset impairment;
- our dependence upon our key executives;
- our ability to recruit and retain new members of our management team to support our growing businesses and to hire and retain employees;
- our ability to protect our trademarks and other proprietary rights;
- litigation and product liability claims;
- regulatory issues;
- the impact of product recalls;
- potential costs and risks associated with actual or potential cyberattacks;
- potential dilution from issuance of authorized shares;
- the voting power associated with our Class B stock; and
- the impact of new accounting regulations and the possibility our effective tax rate will increase as a result of future changes in the corporate tax rate or other tax law changes.
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. The Company has not filed its Form 10-Q for the fiscal quarter ended June 24, 2023, so all financial results are preliminary and subject to change.
CENTRAL GARDEN & PET COMPANY |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(in thousands, except share and per share amounts, unaudited) |
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ASSETS |
June 24, 2023 |
|
June 25, 2022 |
|
September 24, 2022 |
||||||
Current assets: |
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
333,139 |
|
|
$ |
195,791 |
|
|
$ |
177,442 |
|
Restricted cash |
|
13,542 |
|
|
|
12,676 |
|
|
|
14,742 |
|
Accounts receivable (less allowances of $29,245, $28,106 and $26,246) |
|
492,850 |
|
|
|
505,896 |
|
|
|
376,787 |
|
Inventories, net |
|
865,496 |
|
|
|
882,522 |
|
|
|
938,000 |
|
Prepaid expenses and other |
|
36,655 |
|
|
|
36,359 |
|
|
|
46,883 |
|
Total current assets |
|
1,741,682 |
|
|
|
1,633,244 |
|
|
|
1,553,854 |
|
Plant, property and equipment, net |
|
392,332 |
|
|
|
390,326 |
|
|
|
396,979 |
|
Goodwill |
|
546,436 |
|
|
|
511,973 |
|
|
|
546,436 |
|
Other intangible assets, net |
|
512,175 |
|
|
|
490,959 |
|
|
|
543,210 |
|
Operating lease right-of-use assets |
|
172,379 |
|
|
|
193,627 |
|
|
|
186,344 |
|
Other assets |
|
54,943 |
|
|
|
125,797 |
|
|
|
55,179 |
|
Total |
$ |
3,419,947 |
|
|
$ |
3,345,926 |
|
|
$ |
3,282,002 |
|
|
|
|
|
|
|
||||||
LIABILITIES AND EQUITY |
|
|
|
|
|
||||||
Current liabilities: |
|
|
|
|
|
||||||
Accounts payable |
$ |
198,406 |
|
|
$ |
241,093 |
|
|
$ |
215,681 |
|
Accrued expenses |
|
247,517 |
|
|
|
228,882 |
|
|
|
201,783 |
|
Current lease liabilities |
|
50,209 |
|
|
|
45,860 |
|
|
|
48,111 |
|
Current portion of long-term debt |
|
255 |
|
|
|
352 |
|
|
|
317 |
|
Total current liabilities |
|
496,387 |
|
|
|
516,187 |
|
|
|
465,892 |
|
|
|
|
|
|
|
||||||
Long-term debt |
|
1,187,498 |
|
|
|
1,185,842 |
|
|
|
1,186,245 |
|
Long-term lease liabilities |
|
132,419 |
|
|
|
155,002 |
|
|
|
147,724 |
|
Deferred income taxes and other long-term obligations |
|
156,537 |
|
|
|
136,490 |
|
|
|
147,429 |
|
|
|
|
|
|
|
||||||
Equity: |
|
|
|
|
|
||||||
Common stock, $0.01 par value: 11,098,584, 11,322,012 and 11,296,351 shares outstanding at June 24, 2023, June 25, 2022 and September 24, 2022 |
|
111 |
|
|
|
113 |
|
|
|
113 |
|
Class A common stock, $0.01 par value: 40,986,336, 41,745,551 and 41,336,223 shares outstanding at June 24, 2023, June 25, 2022 and September 24, 2022 |
|
410 |
|
|
|
417 |
|
|
|
413 |
|
Class B stock, $0.01 par value: 1,602,374, 1,612,374 and 1,612,374 at June 24, 2023, June 25, 2022 and September 24, 2022 |
|
16 |
|
|
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
588,731 |
|
|
|
581,060 |
|
|
|
582,056 |
|
Retained earnings |
|
858,217 |
|
|
|
771,341 |
|
|
|
755,253 |
|
Accumulated other comprehensive loss |
|
(1,955 |
) |
|
|
(1,924 |
) |
|
|
(4,145 |
) |
Total Central Garden & Pet Company shareholders’ equity |
|
1,445,530 |
|
|
|
1,351,023 |
|
|
|
1,333,706 |
|
Noncontrolling interest |
|
1,576 |
|
|
|
1,382 |
|
|
|
1,006 |
|
Total equity |
|
1,447,106 |
|
|
|
1,352,405 |
|
|
|
1,334,712 |
|
Total |
$ |
3,419,947 |
|
|
$ |
3,345,926 |
|
|
$ |
3,282,002 |
|
CENTRAL GARDEN & PET COMPANY |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(in thousands, except per share amounts, unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
June 24, 2023 |
|
June 25, 2022 |
|
June 24, 2023 |
|
June 25, 2022 |
||||||||
Net sales |
$ |
1,023,269 |
|
|
$ |
1,015,378 |
|
|
$ |
2,559,936 |
|
|
$ |
2,631,146 |
|
Cost of goods sold |
|
705,217 |
|
|
|
707,752 |
|
|
|
1,810,547 |
|
|
|
1,838,532 |
|
Gross profit |
|
318,052 |
|
|
|
307,626 |
|
|
|
749,389 |
|
|
|
792,614 |
|
Selling, general and administrative expenses |
|
195,222 |
|
|
|
193,547 |
|
|
|
548,112 |
|
|
|
545,476 |
|
Operating income |
|
122,830 |
|
|
|
114,079 |
|
|
|
201,277 |
|
|
|
247,138 |
|
Interest expense |
|
(14,542 |
) |
|
|
(14,422 |
) |
|
|
(43,887 |
) |
|
|
(43,633 |
) |
Interest income |
|
1,408 |
|
|
|
87 |
|
|
|
2,287 |
|
|
|
188 |
|
Other income (expense) |
|
853 |
|
|
|
(759 |
) |
|
|
3,147 |
|
|
|
(1,337 |
) |
Income before income taxes and noncontrolling interest |
|
110,549 |
|
|
|
98,985 |
|
|
|
162,824 |
|
|
|
202,356 |
|
Income tax expense |
|
27,000 |
|
|
|
23,430 |
|
|
|
39,446 |
|
|
|
47,319 |
|
Income including noncontrolling interest |
|
83,549 |
|
|
|
75,555 |
|
|
|
123,378 |
|
|
|
155,037 |
|
Net income attributable to noncontrolling interest |
|
423 |
|
|
|
135 |
|
|
|
570 |
|
|
|
895 |
|
Net income attributable to Central Garden & Pet Company |
$ |
83,126 |
|
|
$ |
75,420 |
|
|
$ |
122,808 |
|
|
$ |
154,142 |
|
Net income per share attributable to Central Garden & Pet Company: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.58 |
|
|
$ |
1.42 |
|
|
$ |
2.34 |
|
|
$ |
2.89 |
|
Diluted |
$ |
1.56 |
|
|
$ |
1.39 |
|
|
$ |
2.30 |
|
|
$ |
2.82 |
|
Weighted average shares used in the computation of net income per share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
52,464 |
|
|
|
53,237 |
|
|
|
52,462 |
|
|
|
53,392 |
|
Diluted |
|
53,380 |
|
|
|
54,329 |
|
|
|
53,466 |
|
|
|
54,658 |
|
CENTRAL GARDEN & PET COMPANY |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands, unaudited) |
|||||||
|
Nine Months Ended |
||||||
|
June 24, 2023 |
|
June 25, 2022 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
123,378 |
|
|
$ |
155,037 |
|
Adjustments to reconcile net income to net cash used by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
65,504 |
|
|
|
58,333 |
|
Amortization of deferred financing costs |
|
2,023 |
|
|
|
1,982 |
|
Non-cash lease expense |
|
38,180 |
|
|
|
36,042 |
|
Stock-based compensation |
|
20,632 |
|
|
|
18,879 |
|
Debt extinguishment costs |
|
— |
|
|
|
169 |
|
Deferred income taxes |
|
9,125 |
|
|
|
8,199 |
|
Facility closure |
|
13,921 |
|
|
|
— |
|
Loss (gain) on sale of property and equipment |
|
(557 |
) |
|
|
(53 |
) |
Other operating activities |
|
107 |
|
|
|
7 |
|
Change in assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(115,358 |
) |
|
|
(121,392 |
) |
Inventories |
|
69,610 |
|
|
|
(198,360 |
) |
Prepaid expenses and other assets |
|
6,530 |
|
|
|
1,383 |
|
Accounts payable |
|
(12,248 |
) |
|
|
(1,679 |
) |
Accrued expenses |
|
44,221 |
|
|
|
(7,072 |
) |
Other long-term obligations |
|
(55 |
) |
|
|
236 |
|
Operating lease liabilities |
|
(37,449 |
) |
|
|
(34,108 |
) |
Net cash provided (used) by operating activities |
|
227,566 |
|
|
|
(82,397 |
) |
Cash flows from investing activities: |
|
|
|
||||
Additions to plant, property and equipment |
|
(40,850 |
) |
|
|
(98,553 |
) |
Investments |
|
(500 |
) |
|
|
(2,318 |
) |
Other investing activities |
|
(100 |
) |
|
|
40 |
|
Net cash used in investing activities |
|
(41,450 |
) |
|
|
(100,831 |
) |
Cash flows from financing activities: |
|
|
|
||||
Repayments of long-term debt |
|
(223 |
) |
|
|
(992 |
) |
Borrowings under revolving line of credit |
|
48,000 |
|
|
|
— |
|
Repayments under revolving line of credit |
|
(48,000 |
) |
|
|
— |
|
Repurchase of common stock, including shares surrendered for tax withholding |
|
(33,409 |
) |
|
|
(41,834 |
) |
Payment of contingent consideration liability |
|
(33 |
) |
|
|
(196 |
) |
Distribution to noncontrolling interest |
|
— |
|
|
|
(806 |
) |
Payment of financing costs |
|
— |
|
|
|
(2,410 |
) |
Net cash used by financing activities |
|
(33,665 |
) |
|
|
(46,238 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
2,046 |
|
|
|
(1,589 |
) |
Net increase in cash, cash equivalents and restricted cash |
|
154,497 |
|
|
|
(231,055 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
192,184 |
|
|
|
439,522 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
346,681 |
|
|
$ |
208,467 |
|
Supplemental information: |
|
|
|
||||
Cash paid for interest |
$ |
49,419 |
|
|
$ |
48,902 |
|
Cash paid for taxes |
$ |
5,363 |
|
|
$ |
31,406 |
|
New operating lease right of use assets |
$ |
25,424 |
|
|
$ |
64,504 |
|
Use of Non-GAAP Financial Measures
We report our financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, to supplement the financial results prepared in accordance with GAAP, we use non-GAAP financial measures including non-GAAP net income and diluted net income per share, non-GAAP operating income and adjusted EBITDA. Management believes non-GAAP financial measures 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.
Adjusted EBITDA is defined by us as income before income tax, net other expense, net interest expense, depreciation and amortization and stock-based compensation (or operating income plus depreciation and amortization and stock-based compensation expense). Adjusted EBITDA further excludes one-time charges related to facility closures. We present adjusted EBITDA because we believe that adjusted 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. Adjusted EBITDA is used by our management to perform such evaluation. Adjusted EBITDA should not be considered in isolation or as a substitute for cash flow from operations, income from operations or other income statement measures prepared in accordance with GAAP. We believe that adjusted EBITDA is frequently used by investors, securities analysts and other interested parties in their evaluation of companies, many of which present adjusted EBITDA when reporting their results. Other companies may calculate adjusted EBITDA differently and 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 have not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential variability and limited visibility of excluded items. 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 measures in making financial, operating and planning decisions and in evaluating our performance, and we believe it 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:
- Facility closure: we have excluded the impact of the closure of our Athens, Texas pet bedding facility as it represents an infrequent transaction that occurs in limited circumstances that impacts the comparability between operating periods. We believe the adjustment of closure costs supplements the GAAP information with a measure that may be used to assess the sustainability of our operating performance.
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.
- During the third quarter of fiscal 2023, we recognized incremental expense of $13.9 million in the consolidated statement of operations, from the closure of a leased manufacturing and distribution facility in Athens, Texas.
Net Income and Diluted Net Income Per Share Reconciliation |
|
GAAP to Non-GAAP Reconciliation For the Three Months Ended |
|
GAAP to Non-GAAP Reconciliation For the Nine Months Ended |
||||||||||
|
|
June 24, 2023 |
|
June 25, 2022 |
|
June 24, 2023 |
June 25, 2022 |
|||||||
|
|
(in thousands, except per share amounts) |
||||||||||||
GAAP net income attributable to Central Garden & Pet Company |
|
$ |
83,126 |
|
|
$ |
75,420 |
|
$ |
122,808 |
|
$ |
154,142 |
|
Facility closure |
(1 |
) |
|
13,921 |
|
|
|
— |
|
|
13,921 |
|
|
— |
Tax effect of facility closure |
|
|
(3,373 |
) |
|
|
— |
|
|
(3,373 |
) |
|
— |
|
Non-GAAP net income attributable to Central Garden & Pet Company |
|
$ |
93,674 |
|
|
$ |
75,420 |
|
$ |
133,356 |
|
$ |
154,142 |
|
|
|
|
|
|
|
|
|
|||||||
GAAP diluted net income per share |
|
$ |
1.56 |
|
|
$ |
1.39 |
|
$ |
2.30 |
|
$ |
2.82 |
|
Non-GAAP diluted net income per share |
|
$ |
1.75 |
|
|
$ |
1.39 |
|
$ |
2.49 |
|
$ |
2.82 |
|
|
|
|
|
|
|
|
|
|||||||
Shares used in GAAP and non-GAAP diluted net income per share calculation |
|
|
53,380 |
|
|
|
54,329 |
|
|
53,466 |
|
|
54,658 |
|
Operating Income Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
||||||||||||||
|
|
For Three Months Ended June 24, 2023 |
|
For the Nine Months Ended June 24, 2023 |
||||||||||||
|
|
GAAP |
Facility Closure (1) |
Non-GAAP |
|
GAAP |
Facility Closure (1) |
Non-GAAP |
||||||||
|
|
(in thousands) |
||||||||||||||
Net sales |
|
$ |
1,023,269 |
$ |
— |
|
$ |
1,023,269 |
|
$ |
2,559,936 |
$ |
— |
|
$ |
2,559,936 |
Cost of goods sold and occupancy |
|
|
705,217 |
|
8,010 |
|
|
697,207 |
|
|
1,810,547 |
|
8,010 |
|
|
1,802,537 |
Gross profit |
|
$ |
318,052 |
$ |
(8,010 |
) |
$ |
326,062 |
|
$ |
749,389 |
$ |
(8,010 |
) |
$ |
757,399 |
Selling, general and administrative expenses |
|
|
195,222 |
|
5,911 |
|
|
189,311 |
|
|
548,112 |
|
5,911 |
|
|
542,201 |
Income from operations |
|
$ |
122,830 |
$ |
(13,921 |
) |
$ |
136,751 |
|
$ |
201,277 |
$ |
(13,921 |
) |
$ |
215,198 |
Pet Segment Operating Income Reconciliation |
|
GAAP to Non-GAAP Reconciliation For the Three Months Ended |
|
GAAP to Non-GAAP Reconciliation For the Nine Months Ended |
|||||||||
|
|
Pet |
|
Pet |
|||||||||
|
|
June 24, 2023 |
|
June 25, 2022 |
|
June 24, 2023 |
|
June 25, 2022 |
|||||
|
|
(in thousands) |
|||||||||||
GAAP operating income |
|
$ |
59,969 |
|
$ |
62,616 |
|
$ |
154,779 |
|
$ |
168,512 |
|
Facility closure |
(1 |
) |
|
13,921 |
|
|
— |
|
|
13,921 |
|
|
— |
Non-GAAP operating income |
|
$ |
73,890 |
|
$ |
62,616 |
|
$ |
168,700 |
|
$ |
168,512 |
|
Adjusted EBITDA Reconciliation |
|
GAAP to Non-GAAP Reconciliation For the Three Months Ended June 24, 2023 |
|||||||||||||
|
|
Pet |
|
Garden |
|
Corp |
|
Total |
|||||||
|
|
(in thousands) |
|||||||||||||
Net income attributable to Central Garden & Pet Company |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
83,126 |
|
|
Interest expense, net |
|
|
— |
|
|
— |
|
|
— |
|
|
|
13,134 |
|
|
Other income |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(853 |
) |
|
Income tax expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
27,000 |
|
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
|
423 |
|
|
Income (loss) from operations |
|
|
59,969 |
|
|
88,088 |
|
|
(25,227 |
) |
|
|
122,830 |
|
|
Depreciation & amortization |
|
|
10,060 |
|
|
10,823 |
|
|
818 |
|
|
|
21,701 |
|
|
Noncash stock-based compensation |
|
|
— |
|
|
— |
|
|
7,305 |
|
|
|
7,305 |
|
|
Facility closure |
(1 |
) |
|
13,921 |
|
|
— |
|
|
— |
|
|
|
13,921 |
|
Adjusted EBITDA |
|
$ |
83,950 |
|
$ |
98,911 |
|
$ |
(17,104 |
) |
|
$ |
165,757 |
|
|
Adjusted EBITDA Reconciliation |
|
GAAP to Non-GAAP Reconciliation For the Three Months Ended June 25, 2022 |
||||||||||||
|
|
Pet |
|
Garden |
|
Corp |
|
Total |
||||||
|
|
(in thousands) |
||||||||||||
Net income attributable to Central Garden & Pet Company |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
75,420 |
|
Interest expense, net |
|
|
— |
|
|
— |
|
|
— |
|
|
|
14,335 |
|
Other expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
759 |
|
Income tax expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
23,430 |
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
|
135 |
|
Income (loss) from operations |
|
|
62,616 |
|
|
75,564 |
|
|
(24,101 |
) |
|
|
114,079 |
|
Depreciation & amortization |
|
|
9,791 |
|
|
9,118 |
|
|
975 |
|
|
|
19,884 |
|
Noncash stock-based compensation |
|
|
— |
|
|
— |
|
|
7,400 |
|
|
|
7,400 |
|
Adjusted EBITDA |
|
$ |
72,407 |
|
$ |
84,682 |
|
$ |
(15,726 |
) |
|
$ |
141,363 |
|
Adjusted EBITDA Reconciliation |
|
GAAP to Non-GAAP Reconciliation For the Nine Months Ended June 24, 2023 |
|||||||||||||
|
|
Pet |
|
Garden |
|
Corp |
|
Total |
|||||||
|
|
(in thousands) |
|||||||||||||
Net income attributable to Central Garden & Pet Company |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
122,808 |
|
|
Interest expense, net |
|
|
— |
|
|
— |
|
|
— |
|
|
|
41,600 |
|
|
Other income |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(3,147 |
) |
|
Income tax expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
39,446 |
|
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
|
570 |
|
|
Income (loss) from operations |
|
|
154,779 |
|
|
126,887 |
|
|
(80,389 |
) |
|
|
201,277 |
|
|
Depreciation & amortization |
|
|
30,647 |
|
|
32,483 |
|
|
2,374 |
|
|
|
65,504 |
|
|
Noncash stock-based compensation |
|
|
— |
|
|
— |
|
|
20,632 |
|
|
|
20,632 |
|
|
Facility closure |
(1 |
) |
|
13,921 |
|
|
— |
|
|
— |
|
|
|
13,921 |
|
Adjusted EBITDA |
|
$ |
199,347 |
|
$ |
159,370 |
|
$ |
(57,383 |
) |
|
$ |
301,334 |
|
|
Adjusted EBITDA Reconciliation |
|
GAAP to Non-GAAP Reconciliation For the Nine Months Ended June 25, 2022 |
||||||||||||
|
|
Pet |
|
Garden |
|
Corp |
|
Total |
||||||
|
|
(in thousands) |
||||||||||||
Net income attributable to Central Garden & Pet Company |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
154,142 |
|
Interest expense, net |
|
|
— |
|
|
— |
|
|
— |
|
|
|
43,445 |
|
Other expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,337 |
|
Income tax expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
47,319 |
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
|
895 |
|
Income (loss) from operations |
|
|
168,512 |
|
|
152,132 |
|
|
(73,506 |
) |
|
|
247,138 |
|
Depreciation & amortization |
|
|
28,879 |
|
|
26,457 |
|
|
2,997 |
|
|
|
58,333 |
|
Noncash stock-based compensation |
|
|
— |
|
|
— |
|
|
18,879 |
|
|
|
18,879 |
|
Adjusted EBITDA |
|
$ |
197,391 |
|
$ |
178,589 |
|
$ |
(51,630 |
) |
|
$ |
324,350 |
|
