Fourth Quarter 2011 Details

The Company’s sales gains were driven by the Garden Products segment, which reported net sales for the quarter of $165.1 million, a gain of 24 percent over the fourth quarter of 2010. The Garden Products segment’s branded product sales increased $31.6 million, or 27 percent, to $148.5 million while sales of other manufacturers’ products were $16.6 million, in line with the fourth quarter of 2010. The Company’s gross and operating margins were adversely impacted by higher raw material input costs during the quarter. The Garden Products segment’s operating loss during the quarter was $6.9 million compared to an operating loss of $7.6 million in the fourth quarter of 2010.

Fourth quarter net sales for the Pet Products segment decreased one percent, or $2.1 million over the prior year, to $211.8 million. The Pet Products segment’s branded product sales decreased $1.8 million, or one percent, to $171.8 million. Sales of other manufacturers’ products were $40.0 million, in line with the fourth quarter of 2010. The Pet Products segment’s operating income was $15.6 million compared to operating income of $12.9 million in the prior year period. Excluding the impairment charge in the fourth quarter of last year, operating income for the fourth quarter of 2010 would have been $24.9 million for the Pet Products segment.

At September 24, 2011, the Company’s cash and short term investments balance totaled $29.9 million. Net interest expense was $9.8 million for the quarter and $9.0 million in the prior year period. Depreciation and amortization expense was $7.3 million in the fourth quarter of 2011, consistent with the prior year. The Company’s effective tax rate for the fourth quarter of 2011 was 17 percent on its operating loss compared to 36 percent in the fourth quarter of 2010. The change in the effective tax rate was due primarily to the Company’s reduced ability to use tax benefits due to decreased fiscal 2011 income and increased tax valuation allowances.

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