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Central Garden & Pet Company Announces Fiscal 2011 Third Quarter Results

Stocks in this article: CENT CENTA

Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA), a leading innovator, marketer and producer of quality branded products for the lawn and garden and pet supplies markets, today reported financial results for its fiscal third quarter ended June 25, 2011.

The Company announced third quarter net sales of $484.3 million, a 4 percent increase over the comparable fiscal 2010 period. The Company’s sales gains were largely driven by the Garden Products segment which reported sales growth of 6 percent for the quarter, and an 11 percent sales increase for the nine-month period ended June 25, 2011. Third quarter operating income was $36.6 million, compared to operating income of $52.6 million in the comparable 2010 period, as the continued rise in raw material costs, change in product mix, unfavorable weather, and the Company’s continued strategic investments in marketing and brand building activities impacted results. Net interest expense was $9.8 million for the quarter ended June 25, 2011 consistent with the prior year. Net income for the quarter totaled $17.1 million, or $0.31 per fully diluted share, compared to net income of $25.9 million, or $0.40 per fully diluted share, in the year ago period.

“We continued to drive solid revenue growth in the third quarter despite a difficult environment,” said Bill Brown, Chairman and Chief Executive Officer. “However, the continued significant escalation in raw material input costs, together with extreme weather conditions that suppressed our chemical and controls business and altered our product mix, negatively impacted our gross margin and bottom line results. We have implemented price increases to recover some of the input cost increases, but there is a lag in retailer implementation that impacted the quarter and will continue to cause margin pressure. Our operating income was further reduced by our long-term commitment to strategic investments in marketing and brand building. Although adversely impacted by significant commodity price increases and extreme weather during the quarter, our business remains fundamentally sound. We remain focused on bringing innovative products to the marketplace, driving operational efficiency throughout our operation, and delivering top-line and bottom-line growth over the long-term.”

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