CENT Central Garden and Pet Co

Fiscal 2024 Q2 net sales of $900 million compared to $909 million a year ago

Fiscal 2024 Q2 GAAP EPS of $0.93 vs. $0.72 a year ago, Non-GAAP EPS of $0.99

Maintains outlook for fiscal 2024 non-GAAP EPS of $2.00 or better ($2.50 or better before the February 2024 stock dividend)

Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) (“Central”), a market leader in the Pet and Garden industries, today announced financial results for its fiscal 2024 second quarter ended March 30, 2024.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240508389740/en/

“We delivered a solid second quarter with earnings per share well ahead of prior year. We are particularly pleased with the progress on our Cost and Simplicity program,” said Beth Springer, Interim CEO of Central Garden & Pet. “With a large part of the garden season still in front of us and some continuing external challenges, we are maintaining our outlook for the fiscal year. Importantly, our teams remain focused on executing our long-term strategy.”

Fiscal 2024 Second Quarter Financial Results

Net sales were $900 million compared to $909 million a year ago, a decrease of 1%. Organic net sales also decreased 1%.

Gross profit was $279 million compared to $260 million in the prior year. Non-GAAP gross profit was $281 million. Gross margin increased 240 basis points to 31.0% compared to 28.6%. Non-GAAP gross margin was 31.3%. Both segments benefited from prior year projects made under Central's Cost and Simplicity program including the sale of the independent garden channel distribution business and exit of some private label pet bed product lines, as well as moderating inflation.

Operating income was $93 million compared to $78 million a year ago, an increase of 20%. On a non-GAAP basis, operating income was $99 million. Operating margin increased 180 basis points to 10.4% compared to 8.6%. On a non-GAAP basis, operating margin was 11.0%. The increase was driven by improved gross margin.

Net interest expense was $11 million compared to $15 million a year ago driven by higher interest income from higher cash balances and higher interest rates.

Net income was $62 million compared to $48 million a year ago, an increase of 29%. On a non-GAAP basis, net income was $66 million. Earnings per share were $0.93 compared to $0.72, an increase of $0.21. On a non-GAAP basis, earnings per share were $0.99. Adjusted EBITDA was $124 million compared to $107 million a year ago.

The effective tax rate was 23.4% compared to 23.9% in the prior year.

Pet Segment Fiscal 2024 Second Quarter Results

Net sales for the Pet segment were $480 million compared to $475 million in the prior year, an increase of 1% driven by growth in Consumables businesses and the recent TDBBS acquisition. Organic net sales decreased 3% excluding the impact of TDBBS.

Pet segment operating income was $63 million compared to $55 million a year ago, an increase of 13%. Operating margin increased 140 basis points to 13.0% compared to 11.6% driven by improved gross margin. Pet segment adjusted EBITDA was $74 million compared to $66 million in the prior year.

Garden Segment Fiscal 2024 Second Quarter Results

Net sales for the Garden segment were $420 million compared to $434 million a year ago, a decrease of 3%. Organic net sales increased 2% excluding the impact of the sale of the independent garden channel distribution business. Growth in Live Plants, Grass Seed and Controls & Fertilizer more than offset lower sales in Wild Bird.

Garden segment operating income was $57 million compared to $50 million in the prior year, an increase of 15%. On a non-GAAP basis, operating income was $62 million. Operating margin increased 220 basis point to 13.6% compared to 11.4%. On a non-GAAP basis, operating margin was 14.8%. The increase was driven by improved gross margin. Garden segment adjusted EBITDA was $73 million compared to $60 million a year ago.

Liquidity and Debt

The cash balance at the end of the quarter was $301 million compared to $61 million a year ago, driven by a reduction in inventory due to converting inventory to cash over the last 12 months.

Cash used by operations during the quarter was $25 million compared to $34 million a year ago.

Total debt as of March 30, 2024, and March 25, 2023 was $1.2 billion. The leverage ratio, as defined in Central's credit agreement, at the end of the second quarter was 2.9x compared to 3.3x at the end of the prior year quarter.

Cost and Simplicity Program

Central continues to advance its multi-year Cost and Simplicity program consisting of a pipeline of projects across procurement, manufacturing, logistics, portfolio management and administrative costs to simplify its business and improve efficiency across the organization.

In the second quarter of fiscal 2024, Central initiated the closure of a manufacturing facility in Chico, CA, and began the Southeast consolidation of four distribution locations into one modern facility. As a result, Central incurred $5.3 million of one-time costs, including $2.5 million in cost of goods sold and $2.8 million in selling, general and administrative costs, the majority of which were non-cash.

Fiscal 2024 Guidance

Central continues to expect fiscal 2024 non-GAAP EPS to be $2.00 or better ($2.50 or better before the February 2024 stock dividend).

This outlook reflects uncertain consumer demand and retailer dynamics and an environment of macroeconomic and geopolitical volatility. It includes modest carryover pricing actions to help mitigate inflationary headwinds. This outlook excludes the impact of any acquisitions, divestitures or restructuring activities that may occur during fiscal 2024, including any projects under the Cost and Simplicity program and the recent TDBBS acquisition. Central expects fiscal 2024 capital spending to be approximately $70 million.

Conference Call

Central'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 fiscal 2024 second quarter 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 #13744528.

About Central Garden & Pet

Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) understands home is central to life and has proudly nurtured happy and healthy homes for over 40 years. With fiscal 2023 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, with 6,700 employees primarily across North America. 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 evolving consumer demand and unfavorable retailer dynamics, anticipated pricing actions, productivity initiatives and estimated capital spending, and earnings guidance for fiscal 2024, 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 Central'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 and interest rates, and other adverse macro-economic conditions;
• fluctuations in market prices for seeds and grains and other raw materials;
• our inability to pass through cost increases in a timely manner;
• our ability to recruit and retain new members of our management team and employees, including a Chief Executive Officer, to support our businesses;
• fluctuations in energy prices, fuel and related petrochemical costs;
• declines in consumer spending and increased inventory risk during economic downturns;
• reductions in demand for product categories that benefited from the COVID-19 pandemic;
• 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;
• material weaknesses relating to the internal controls of recently acquired companies;
• 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 ability to remediate material weaknesses in our internal control over financial reporting;
• our dependence upon our key executives;
• 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 Central’s Securities and Exchange Commission filings. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise. Central has not filed its Form 10-Q for the fiscal quarter ended March 30, 2024, so all financial results are preliminary and subject to change.

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts, unaudited)

 

 

March 30, 2024

 

March 25, 2023

 

September 30, 2023

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

301,332

 

 

$

60,607

 

 

$

488,730

 

Restricted cash

 

14,197

 

 

 

13,475

 

 

 

14,143

 

Accounts receivable (less allowance for credit losses and customer allowances of $27,677, $28,283 and $25,797)

 

578,237

 

 

 

564,874

 

 

 

332,890

 

Inventories, net

 

914,352

 

 

 

966,900

 

 

 

838,188

 

Prepaid expenses and other

 

42,501

 

 

 

48,019

 

 

 

33,172

 

Total current assets

 

1,850,619

 

 

 

1,653,875

 

 

 

1,707,123

 

Plant, property and equipment, net

 

387,203

 

 

 

395,788

 

 

 

391,768

 

Goodwill

 

546,436

 

 

 

546,436

 

 

 

546,436

 

Other intangible assets, net

 

480,910

 

 

 

525,301

 

 

 

497,228

 

Operating lease right-of-use assets

 

170,849

 

 

 

174,435

 

 

 

173,540

 

Other assets

 

104,002

 

 

 

54,963

 

 

 

62,553

 

Total

$

3,540,019

 

 

$

3,350,798

 

 

$

3,378,648

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

237,310

 

 

$

225,311

 

 

$

190,902

 

Accrued expenses

 

267,813

 

 

 

201,286

 

 

 

216,241

 

Current lease liabilities

 

51,045

 

 

 

49,082

 

 

 

50,597

 

Current portion of long-term debt

 

322

 

 

 

270

 

 

 

247

 

Total current liabilities

 

556,490

 

 

 

475,949

 

 

 

457,987

 

Long-term debt

 

1,188,955

 

 

 

1,212,053

 

 

 

1,187,956

 

Long-term lease liabilities

 

134,723

 

 

 

135,695

 

 

 

135,621

 

Deferred income taxes and other long-term obligations

 

147,683

 

 

 

154,854

 

 

 

144,271

 

Equity:

 

 

 

 

 

Common stock, $0.01 par value: 11,077,612, 11,236,635 and 11,077,612 shares outstanding at March 30, 2024, March 25, 2023 and September 30, 2023

 

111

 

 

 

112

 

 

 

111

 

Class A common stock, $0.01 par value: 54,659,683, 54,822,098 and 54,472,902 shares outstanding at March 30, 2024, March 25, 2023 and September 30, 2023

 

547

 

 

 

548

 

 

 

544

 

Class B stock, $0.01 par value: 1,602,374 shares outstanding at March 30, 2024, March 25, 2023 and September 30, 2023

 

16

 

 

 

16

 

 

 

16

 

Additional paid-in capital

 

592,136

 

 

 

587,243

 

 

 

594,282

 

Retained earnings

 

920,803

 

 

 

786,776

 

 

 

859,370

 

Accumulated other comprehensive loss

 

(2,825

)

 

 

(3,601

)

 

 

(2,970

)

Total Central Garden & Pet Company shareholders’ equity

 

1,510,788

 

 

 

1,371,094

 

 

 

1,451,353

 

Noncontrolling interest

 

1,379

 

 

 

1,153

 

 

 

1,460

 

Total equity

 

1,512,167

 

 

 

1,372,247

 

 

 

1,452,813

 

Total

$

3,540,018

 

 

$

3,350,798

 

 

$

3,378,648

 

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts, unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

March 30, 2024

 

March 25, 2023

 

March 30, 2024

 

March 25, 2023

Net sales

$

900,090

 

 

$

909,004

 

 

$

1,534,623

 

 

$

1,536,667

 

Cost of goods sold

 

621,210

 

 

 

649,366

 

 

 

1,076,898

 

 

 

1,105,330

 

Gross profit

 

278,880

 

 

 

259,638

 

 

 

457,725

 

 

 

431,337

 

Selling, general and administrative expenses

 

185,433

 

 

 

181,597

 

 

 

355,866

 

 

 

352,890

 

Operating income

 

93,447

 

 

 

78,041

 

 

 

101,859

 

 

 

78,447

 

Interest expense

 

(14,376

)

 

 

(14,876

)

 

 

(28,692

)

 

 

(29,345

)

Interest income

 

2,903

 

 

 

186

 

 

 

7,512

 

 

 

879

 

Other (expense) income

 

(171

)

 

 

595

 

 

 

822

 

 

 

2,294

 

Income before income taxes and noncontrolling interest

 

81,803

 

 

 

63,946

 

 

 

81,501

 

 

 

52,275

 

Income tax expense

 

19,134

 

 

 

15,268

 

 

 

18,265

 

 

 

12,446

 

Income including noncontrolling interest

 

62,669

 

 

 

48,678

 

 

 

63,236

 

 

 

39,829

 

Net income attributable to noncontrolling interest

 

682

 

 

 

563

 

 

 

819

 

 

 

147

 

Net income attributable to Central Garden & Pet Company

$

61,987

 

 

$

48,115

 

 

$

62,417

 

 

$

39,682

 

Net income per share attributable to Central Garden & Pet Company:

 

 

 

 

 

 

 

Basic

$

0.94

 

 

$

0.73

 

 

$

0.95

 

 

$

0.61

 

Diluted

$

0.93

 

 

$

0.72

 

 

$

0.93

 

 

$

0.59

 

Weighted average shares used in the computation of net income per share:

 

 

 

 

 

 

 

Basic

 

65,638

 

 

 

65,554

 

 

 

65,526

 

 

 

65,576

 

Diluted

 

66,831

 

 

 

66,918

 

 

 

66,815

 

 

 

66,900

 

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

Six Months Ended

 

March 30, 2024

 

March 25, 2023

Cash flows from operating activities:

 

 

 

Net income

$

63,236

 

 

$

39,829

 

Adjustments to reconcile net income to net cash used by operating activities:

 

 

 

Depreciation and amortization

 

45,357

 

 

 

43,801

 

Amortization of deferred financing costs

 

1,340

 

 

 

1,349

 

Non-cash lease expense

 

25,753

 

 

 

25,369

 

Stock-based compensation

 

8,927

 

 

 

13,327

 

Deferred income taxes

 

2,673

 

 

 

7,486

 

Other operating activities

 

1,811

 

 

 

136

 

Change in assets and liabilities (excluding businesses acquired):

 

 

 

Accounts receivable

 

(240,408

)

 

 

(187,745

)

Inventories

 

(59,263

)

 

 

(27,152

)

Prepaid expenses and other assets

 

(7,492

)

 

 

(3,868

)

Accounts payable

 

41,475

 

 

 

15,421

 

Accrued expenses

 

46,785

 

 

 

(462

)

Other long-term obligations

 

673

 

 

 

(21

)

Operating lease liabilities

 

(25,169

)

 

 

(24,542

)

Net cash used by operating activities

 

(94,302

)

 

 

(97,072

)

Cash flows from investing activities:

 

 

 

Additions to plant, property and equipment

 

(19,478

)

 

 

(30,228

)

Payments to acquire companies, net of cash acquired

 

(59,818

)

 

 

—

 

Investments

 

(850

)

 

 

(500

)

Other investing activities

 

(140

)

 

 

(100

)

Net cash used in investing activities

 

(80,286

)

 

 

(30,828

)

Cash flows from financing activities:

 

 

 

Repayments of long-term debt

 

(159

)

 

 

(182

)

Borrowings under revolving line of credit

 

—

 

 

 

48,000

 

Repayments under revolving line of credit

 

—

 

 

 

(23,000

)

Repurchase of common stock, including shares surrendered for tax withholding

 

(12,055

)

 

 

(16,165

)

Payment of contingent consideration liability

 

(57

)

 

 

(12

)

Distribution to noncontrolling interest

 

(900

)

 

 

—

 

Net cash (used) provided by financing activities

 

(13,171

)

 

 

8,641

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

415

 

 

 

1,157

 

Net decrease in cash, cash equivalents and restricted cash

 

(187,344

)

 

 

(118,102

)

Cash, cash equivalents and restricted cash at beginning of period

 

502,873

 

 

 

192,184

 

Cash, cash equivalents and restricted cash at end of period

$

315,529

 

 

$

74,082

 

Supplemental information:

 

 

 

Cash paid for interest

$

28,695

 

 

$

29,343

 

Cash paid for income taxes

$

13,775

 

 

$

1,889

 

New operating lease right of use assets

$

24,652

 

 

$

13,776

 

Use of Non-GAAP Financial Measures

We report our financial results in accordance with 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, adjusted EBITDA and organic net sales. Management uses these non-GAAP financial measures that exclude the impact of specific items (described below) in making financial, operating and planning decisions and in evaluating our performance. Also, Management believes that these 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. While Management believes that non-GAAP measures 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.

Adjusted EBITDA is defined by us as income before income tax, net other expense, net interest expense and depreciation and amortization and stock-based compensation expense (or operating income plus depreciation and amortization expense 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 evaluations. 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.

Non-GAAP financial measures reflect adjustments based on the following items:

• Facility closures: we have excluded the impact of the closure of our garden controls manufacturing facility in Chico, California and the Southeast consolidation of our distribution facilities as they represent infrequent transactions that occur in limited circumstances that impact the comparability between operating periods. We believe the adjustment of closure and network optimization 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.

(1)

During the second quarter of fiscal 2024, we recognized incremental expense of $5.3 million in the consolidated statement of operations, from the closure of a manufacturing facility in Chico, California and the consolidation of our Southeast distribution network.

Net Income and Diluted Net Income Per Share Reconciliation

 

GAAP to Non-GAAP Reconciliation

Three Months Ended

 

GAAP to Non-GAAP Reconciliation

Six Months Ended

 

 

March 30, 2024

 

March 25, 2023

 

March 30, 2024

 

March 25, 2023

 

 

(in thousands, except per share amounts)

GAAP net income attributable to Central Garden & Pet Company

 

$

61,987

 

 

$

48,115

 

$

62,417

 

 

$

39,682

Facility closures

(1)

 

5,270

 

 

 

—

 

 

 

5,270

 

 

 

—

 

Tax effect of facility closures

 

 

(1,233

)

 

 

—

 

 

 

(1,233

)

 

 

—

 

Non-GAAP net income attributable to Central Garden & Pet Company

 

$

66,024

 

 

$

48,115

 

 

$

66,454

 

 

$

39,682

 

GAAP diluted net income per share

 

$

0.93

 

 

$

0.72

 

 

$

0.93

 

 

$

0.59

 

Non-GAAP diluted net income per share

 

$

0.99

 

 

$

0.72

 

 

$

0.99

 

 

$

0.59

 

Shares used in GAAP and non-GAAP diluted net earnings per share calculation

 

 

66,831

 

 

 

66,918

 

 

 

66,815

 

 

 

66,900

 

Operating Income Reconciliation

 

GAAP to Non-GAAP Reconciliation

 

 

Three Months Ended March 30, 2024

 

Six Months Ended March 30, 2024

 

 

GAAP

Facility closures (1)

Non-GAAP

 

GAAP

Facility closures (1)

Non-GAAP

 

 

(in thousands)

Net sales

 

$

900,090

$

—

 

$

900,090

 

$

1,534,623

$

—

 

$

1,534,623

Cost of goods sold and occupancy

 

 

621,210

 

 

2,527

 

 

618,683

 

 

 

1,076,898

 

 

2,527

 

 

1,074,371

 

Gross profit

 

$

278,880

 

$

(2,527

)

$

281,407

 

 

$

457,725

 

$

(2,527

)

$

460,252

 

Selling, general and administrative expenses

 

 

185,433

 

 

2,743

 

 

182,690

 

 

 

355,866

 

 

2,743

 

 

353,123

 

Income from operations

 

$

93,447

 

$

(5,270

)

$

98,717

 

 

$

101,859

 

$

(5,270

)

$

107,129

 

Garden Segment Operating Income Reconciliation

 

GAAP to Non-GAAP Reconciliation

Three Months Ended

 

GAAP to Non-GAAP Reconciliation

Six Months Ended

 

 

March 30, 2024

 

March 25, 2023

 

March 30, 2024

 

March 25, 2023

 

 

(in thousands)

 

(in thousands)

GAAP operating income

 

$

57,066

 

 

$

49,619

 

 

$

48,180

 

 

$

38,799

 

Facility closures

(1)

 

5,270

 

 

 

—

 

 

 

5,270

 

 

 

—

 

Non-GAAP operating income

 

$

62,336

 

 

$

49,619

 

 

$

53,450

 

 

$

38,799

 

GAAP operating margin

 

 

13.6

%

 

 

11.4

%

 

 

7.5

%

 

 

6.0

%

Non-GAAP operating margin

 

 

14.8

%

 

 

11.4

%

 

 

8.3

%

 

 

6.0

%

Organic Net Sales Reconciliation

 

GAAP to Non-GAAP Reconciliation

 

 

Three Months Ended March 30, 2024

 

Six Months Ended March 30, 2024

 

 

Net sales (GAAP)

 

Effect of acquisitions & divestitures on net sales

 

Net sales organic

 

Net sales (GAAP)

 

Effect of acquisitions & divestitures on net sales

 

Net sales organic

 

 

(in millions)

Q2 FY 24

 

$

900.1

 

 

$

19.3

 

$

880.8

 

 

$

1,534.6

 

 

$

32.5

 

$

1,502.1

 

Q2 FY 23

 

 

909.0

 

 

 

21.9

 

 

 

887.1

 

 

 

1,536.7

 

 

 

31.5

 

 

 

1,505.2

 

$ decrease

 

$

(8.9

)

 

 

 

$

(6.3

)

 

$

(2.1

)

 

 

 

$

(3.1

)

% decrease

 

 

(1.0

)%

 

 

 

 

(0.7

)%

 

 

(0.1

)%

 

 

 

 

(0.2

)%

Organic Pet Segment Net Sales Reconciliation

 

GAAP to Non-GAAP Reconciliation

 

 

Three Months Ended March 30, 2024

 

Six Months Ended March 30, 2024

 

 

Net sales (GAAP)

 

Effect of acquisitions & divestitures on net sales

 

Net sales organic

 

Net sales (GAAP)

 

Effect of acquisitions & divestitures on net sales

 

Net sales organic

 

 

(in millions)

Q2 FY 24

 

$

480.2

 

 

$

19.3

 

$

460.9

 

 

$

889.4

 

 

$

32.5

 

$

856.9

 

Q2 FY 23

 

 

475.2

 

 

 

—

 

 

 

475.2

 

 

 

891.0

 

 

 

—

 

 

 

891.0

 

$ increase (decrease)

 

$

5.0

 

 

 

 

$

(14.3

)

 

$

(1.6

)

 

 

 

$

(34.1

)

% increase (decrease)

 

 

1.1

%

 

 

 

 

(3.0

)%

 

 

(0.2

)%

 

 

 

 

(3.8

)%

Organic Garden Segment Net Sales Reconciliation

 

GAAP to Non-GAAP Reconciliation

 

 

Three Months Ended March 30, 2024

 

Six Months Ended March 30, 2024

 

 

Net sales (GAAP)

 

Effect of acquisitions & divestitures on net sales

 

Net sales organic

 

Net sales (GAAP)

 

Effect of acquisitions & divestitures on net sales

 

Net sales organic

 

 

(in millions)

Q2 FY 24

 

$

419.9

 

 

$

—

 

 

$

419.9

 

 

$

645.2

 

 

$

—

 

 

$

645.2

 

Q2 FY 23

 

 

433.8

 

 

 

21.9

 

 

411.9

 

 

 

645.7

 

 

 

31.5

 

 

614.2

 

$ increase (decrease)

 

$

(13.9

)

 

 

 

$

8.0

 

 

$

(0.5

)

 

 

 

$

31.0

 

% increase (decrease)

 

 

(3.2

)%

 

 

 

 

1.9

%

 

 

(0.1

)%

 

 

 

 

5.0

%

Adjusted EBITDA Reconciliation

 

GAAP to Non-GAAP Reconciliation

 

 

Three Months Ended March 30, 2024

 

 

Pet

 

Garden

 

Corporate

 

Total

 

 

(in thousands)

Net income attributable to Central Garden & Pet Company

 

$

—

 

 

$

—

 

 

$

—

 

 

$

61,987

 

Interest expense, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11,473

 

Other expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

171

 

Income tax expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

19,134

 

Net income attributable to noncontrolling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

682

 

Income (loss) from operations

 

$

62,659

 

$

57,066

 

$

(26,278

)

 

$

93,447

Depreciation & amortization

 

 

11,124

 

 

 

11,014

 

 

 

674

 

 

 

22,812

 

Noncash stock-based compensation

 

 

—

 

 

 

—

 

 

 

2,907

 

 

 

2,907

 

Facility closures

(1)

 

—

 

 

 

5,270

 

 

 

—

 

 

 

5,270

 

Adjusted EBITDA

 

$

73,783

 

 

$

73,350

 

 

$

(22,697

)

 

$

124,436

 

Adjusted EBITDA Reconciliation

 

GAAP to Non-GAAP Reconciliation

 

 

Three Months Ended March 25, 2023

 

 

Pet

 

Garden

 

Corporate

 

Total

 

 

(in thousands)

Net income attributable to Central Garden & Pet Company

 

$

—

 

 

$

—

 

 

$

—

 

 

$

48,115

 

Interest expense, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

14,690

 

Other income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(595

)

Income tax expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

15,268

 

Net income attributable to noncontrolling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

563

 

Income (loss) from operations

 

$

55,255

 

$

49,619

 

$

(26,833

)

 

$

78,041

 

Depreciation & amortization

 

 

10,474

 

 

 

10,818

 

 

 

817

 

 

 

22,109

 

Noncash stock-based compensation

 

 

—

 

 

 

—

 

 

 

6,750

 

 

 

6,750

 

Adjusted EBITDA

 

$

65,729

 

 

$

60,437

 

 

$

(19,266

)

 

$

106,900

 

Adjusted EBITDA Reconciliation

 

GAAP to Non-GAAP Reconciliation

 

 

Six Months Ended March 30, 2024

 

 

Pet

 

Garden

 

Corporate

 

Total

 

 

(in thousands)

Net income attributable to Central Garden & Pet Company

 

$

—

 

 

$

—

 

 

$

—

 

 

$

62,417

 

Interest expense, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21,180

 

Other income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(822

)

Income tax expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

18,265

 

Net income attributable to noncontrolling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

819

 

Income (loss) from operations

 

$

106,047

 

$

48,180

 

$

(52,368

)

 

$

101,859

 

Depreciation & amortization

 

 

21,922

 

 

 

22,020

 

 

 

1,415

 

 

 

45,357

 

Noncash stock-based compensation

 

 

—

 

 

 

—

 

 

 

8,927

 

 

 

8,927

 

Facility closures

(1)

 

—

 

 

 

5,270

 

 

 

—

 

 

 

5,270

 

Adjusted EBITDA

 

$

127,969

 

 

$

75,470

 

 

$

(42,026

)

 

$

161,413

 

Adjusted EBITDA Reconciliation

 

GAAP to Non-GAAP Reconciliation

 

 

Six Months Ended March 25, 2023

 

 

Pet

 

Garden

 

Corporate

 

Total

 

 

(in thousands)

Net income attributable to Central Garden & Pet Company

 

$

—

 

 

$

—

 

 

$

—

 

 

$

39,682

 

Interest expense, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

28,466

 

Other income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,294

)

Income tax expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,446

 

Net income attributable to noncontrolling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

147

 

Income (loss) from operations

 

$

94,810

 

$

38,799

 

$

(55,162

)

 

$

78,447

 

Depreciation & amortization

 

 

20,586

 

 

 

21,660

 

 

 

1,555

 

 

 

43,801

 

Noncash stock-based compensation

 

 

—

 

 

 

—

 

 

 

13,327

 

 

 

13,327

 

Adjusted EBITDA

 

$

115,396

 

 

$

60,459

 

 

$

(40,280

)

 

$

135,575

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240508389740/en/

Investor Relations Contact Friederike Edelmann VP, Investor Relations & Corporate Sustainability (925) 412-6726 fedelmann@central.com