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Central Garden & Pet Company Announces Fiscal 2013 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 the third quarter ended June 29, 2013.

The Company reported net sales of $494.1 million, a 7 percent decrease from the comparable fiscal 2012 period. Revenues declined in both the Company’s Pet and Garden segments. The Company’s third quarter operating income was $32.9 million, compared to operating income of $49.0 million in the third quarter of 2012. Net income was $13.7 million, or $0.28 per fully diluted share, compared with net income of $22.7 million or $0.47 per fully diluted share in the third quarter of 2012.

“We anticipated lower results this quarter compared to strong sales and earnings gains a year ago; and although Pet performed in-line with our expectations, our Garden business did not,” said John Ranelli, President and CEO of Central Garden & Pet. “While our results for the quarter were disappointing, we are taking the right steps to strengthen our business for the future, including improving customer service and innovation, and identifying additional ways to take costs out of the business. In addition, we are leveraging a new matrix operating structure to bring decision making closer to the customer.” Mr. Ranelli continued, “There is much work to be done. Much of the recent progress we have made is not yet visible in our financial statements. Our business remains fundamentally strong with many opportunities ahead.”

Third Quarter and Year-to-Date Details

Net sales for the Garden segment for the quarter were $256.3 million, a decline of 2 percent from the third quarter of 2012, due in part to lower sales of controls products. In the prior year quarter, controls and fertilizers benefitted from the shipment of delayed orders. The Garden segment’s branded product sales for the quarter decreased $5.8 million, or 3 percent, to $215.5 million while sales of other manufacturers’ products decreased $0.4 million, to $40.8 million, a decrease of 1 percent compared with the third quarter of 2012. The Garden segment’s operating margin declined during the quarter, reflecting lower profitability in the company’s controls, fertilizer and decor businesses, due in part to higher promotion and marketing expenses. For the third quarter, the Garden segment’s operating income was $13.7 million, down from $22.6 million in the third quarter of 2012.

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