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Central Garden & Pet Company (CENT) filed Quarterly Report for the period ended 2011-06-25.
Central Garden & Pet Company has a market cap of $481.4 million; its shares were traded at around $8.78 with a P/E ratio of 11.5 and P/S ratio of 0.3. Central Garden & Pet Company had an annual average earning growth of 0.1% over the past 10 years.
This is the annual revenues and earnings per share of CENT over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CENT.
Highlight of Business Operations:
Fiscal 2011 Third Quarter Financial Performance—In the third quarter of fiscal 2011, net income decreased to $17.1 million compared to $25.9 million in the third quarter of fiscal 2010. Earnings per share on a fully diluted basis decreased from $0.40 in the prior year quarter to $0.31 in the current year quarter. Our revenues increased approximately $18.8 million, with sales growth in both our operating segments, but income from operations decreased $16.0 million from the prior year quarter. The decrease in operating income was due primarily to increased grain and other raw material prices, adverse changes in product mix, and increased marketing and brand building expenditures, partially offset by the increased revenues.
Garden Products’ net sales increased $14.2 million, or 5.8%, to $257.0 million for the three months ended June 25, 2011 from $242.8 million in the comparable fiscal 2010 period. Garden branded product sales increased $20.8 million, partially offset by a decrease of $6.6 million in sales of other manufacturers’ products. Sales increased due primarily to a $14.5 million increase in grass seed, an $11.4 million increase in bird feed and a $7.8 million increase of seasonal décor products, partially offset by an $18.1 million decrease in sales of garden chemicals and control products. Grass seed sales increased due primarily to volume increases resulting from product and packaging innovation and marketing investment, and bird feed sales increased due to both price and volume increases. Sales of Garden chemicals and control products, which increased in the second fiscal quarter compared to the same quarter in the prior year, decreased in the third quarter of fiscal 2011 primarily due to unfavorable weather conditions and inventory reduction initiatives initiated late in the third quarter by a number of our major retail customers.
Pet Products’ net sales increased $12.8 million, or 2.0%, to $639.4 million for the nine months ended June 25, 2011 from $626.6 million in the comparable fiscal 2010 period. Pet branded product sales increased $12.1 million from the prior year period, due primarily to a sales increase of $4.0 million of bird feed products and $4.2 million of aquatic products. The increased sales were due primarily to increased brand building and marketing investment and expanded product distribution. Sales of other manufacturer’s products increased $0.7 million.
Garden Products’ net sales increased $62.2 million, or 11.3%, to $612.3 million for the nine months ended June 25, 2011 from $550.1 million in the comparable fiscal 2010 period. Garden branded product sales increased $72.8 million due primarily to a $40.3 million sales increase in grass seed, which was supported by increased marketing investment, a $12.7 million increase in bird feed and a $15.5 million increase in other garden supplies partially offset by decreased sales of garden chemicals and control products. Sales of Garden chemicals and control products decreased primarily due to unfavorable weather conditions and inventory reduction initiatives initiated late in the third quarter by a number of our major retail customers combined with the larger sales we experienced in our second fiscal quarter of 2011. Sales of other manufacturer’s products decreased $10.6 million.
Net cash used by financing activities decreased $29.5 million, from $69.6 million for the nine months ended June 26, 2010, to $34.1 million for the nine months ended June 25, 2011. The decrease in cash used was due primarily to an increase in borrowings under our revolving line of credit of $50 million, partially offset by higher repurchases of our common stock during the nine months ended June 25, 2011. For the nine month period ending June 25, 2011, we repurchased and retired 2.5 million shares of our voting common stock at an aggregate cost of approximately $24.0 million, or approximately $9.58 per share, and 6.2 million shares of our non-voting Class A common stock at an aggregate cost of approximately $60.0 million, or approximately $9.63 per share.
On June 8, 2011, we amended our $275 million, five-year senior secured revolving credit facility (the “Credit Facility”) included in our Amended and Restated Credit Agreement (the “Credit Agreement”). Under the modified terms, the Credit Facility has a borrowing capacity of $375 million, an increase of $100 million, and an extension of maturity date by approximately one year, to June 2016. The Credit Facility bears lower interest rates and commitment fees and requires less interest coverage. We continue to have the option to increase the size of the Credit Facility by an additional $200 million of incremental term loans and/or revolving loans should we exercise our option and one or more lenders are willing to make such increased amounts available to us. There was an outstanding balance of $50.0 million as of June 25, 2011 under the Credit Facility. There were also $5.6 million of letters of credit outstanding. After giving effect to the financial covenants in the Credit Agreement, the remaining potential borrowing capacity was $211.4 million.
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