Central Garden & Pet Company (CENT, Financial) filed Quarterly Report for the period ended 2010-12-25.
Central Garden has a market cap of $627.5 million; its shares were traded at around $9.88 with a P/E ratio of 11.9 and P/S ratio of 0.4. Central Garden had an annual average earning growth of 0.1% over the past 10 years.Hedge Fund Gurus that owns CENT: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns CENT: Chuck Royce of Royce& Associates.
Selling, general and administrative expenses increased $2.3 million, or 2.6%, to $89.5 million for the three months ended December 25, 2010 from $87.2 million for the three months ended December 26, 2009. As a percentage of net sales, selling, general and administrative expenses decreased to 31.8% for the three months ended December 25, 2010, compared to 32.4% in the comparable prior year quarter due to the increase in net sales. The increase in selling, general and administrative expenses, discussed further below, was due to increased selling expenses.
Net interest expense for the three months ended December 25, 2010 increased $4.0 million or 80.5%, to $8.9 million from $4.9 million for the three months ended December 26, 2009. In March 2010, we issued $400 million of 8.25% 2018 Notes, tendered for our outstanding 9.125% 2013 Notes and paid the outstanding indebtedness under our senior term loan. As a result of this refinancing, our average borrowing rate for the current quarter increased to 8.6% compared to 4.6% for the prior year quarter. Debt outstanding on December 25, 2010 was $400.3 million compared to $407.3 million as of December 26, 2009.
Interest on the Credit Facility is based, at our option, on a rate equal to the Alternate Base Rate (ABR), the greatest of the prime rate, the Federal Funds rate plus 1/2 of 1% or one month LIBOR plus 1%, plus a margin, which fluctuates from 1.5% to 2.5%, or LIBOR plus a margin, which fluctuates from 2.5% to 3.5% and commitment fees that range from 0.35% to 0.75%, determined quarterly based on consolidated total debt to consolidated EBITDA for the most recent trailing 12-month period. As of December 25, 2010, had we borrowed under the Credit Facility, the applicable interest rate on the Credit Facility related to alternate base rate borrowings would have been 5.25%, and the applicable interest rate related to LIBOR rate borrowings would have been 3.26%.
We may redeem some or all of the 2018 Notes at any time prior to March 1, 2014 at the principal amount plus a make whole premium. We may redeem some or all of the 2018 Notes at any time on or after March 1, 2014 for 104.125%, after March 1, 2015 for 102.063% and after March 1, 2016 for 100%, plus accrued and unpaid interest. Additionally, at any time prior to March 1, 2013 we may redeem up to 35% of the 2018 Notes with any proceeds we receive from certain equity offerings at a redemption price of 108.25% of the principal amount, plus accrued and unpaid interest. The holders of the 2018 Notes have the right to require us to repurchase all or a portion of the 2018 Notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus accrued and unpaid interest through the repurchase date upon the occurrence of a change of control.
Commodity Prices. We are exposed to fluctuations in market prices for grains, grass seed and pet food ingredients. To mitigate risk associated with increases in market prices and commodity availability, we enter into contracts for purchases, primarily to ensure commodity availability to us in the future. As of September 25, 2010, we had entered into fixed purchase commitments for commodities totaling approximately $157.6 million. A 10% change in the market price for these commodities would have resulted in an additional pretax gain or loss of $15.8 million related to the contracts outstanding as of September 25, 2010. During the first quarter of fiscal 2011, prices for some of our key crops have increased substantially. During the first quarter of fiscal 2011, our weighted average cost per pound increased approximately 15% from the fourth quarter of fiscal 2010. We are currently negotiating price increases with our retailers; however we can provide no assurance as to the timing or extent of our ability to implement additional price adjustments in the context of rising costs or in the event of increased costs in the future.
Read the The complete Report
Central Garden has a market cap of $627.5 million; its shares were traded at around $9.88 with a P/E ratio of 11.9 and P/S ratio of 0.4. Central Garden had an annual average earning growth of 0.1% over the past 10 years.Hedge Fund Gurus that owns CENT: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns CENT: Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Gross profit for the three months ended December 25, 2010 decreased $4.7 million, or 5.4%, to $83.1 million from $87.8 million for the three months ended December 26, 2009. Gross profit as a percentage of net sales declined from 32.6% for the three months ended December 26, 2009 to 29.5% for the three months ended December 25, 2010. Gross profit as a percentage of net sales decreased in both segments. The gross margin decrease in Pet Products was due primarily to increased grain prices (for example, milo, sunflower and corn). The gross margin in Garden Products was impacted by increased grain prices and by product mix with an increase in grass seed sales and a decline in garden chemicals and control products sales. We are in the process of implementing price increases during our second fiscal quarter to mitigate the impact of the increasing grain prices.Selling, general and administrative expenses increased $2.3 million, or 2.6%, to $89.5 million for the three months ended December 25, 2010 from $87.2 million for the three months ended December 26, 2009. As a percentage of net sales, selling, general and administrative expenses decreased to 31.8% for the three months ended December 25, 2010, compared to 32.4% in the comparable prior year quarter due to the increase in net sales. The increase in selling, general and administrative expenses, discussed further below, was due to increased selling expenses.
Net interest expense for the three months ended December 25, 2010 increased $4.0 million or 80.5%, to $8.9 million from $4.9 million for the three months ended December 26, 2009. In March 2010, we issued $400 million of 8.25% 2018 Notes, tendered for our outstanding 9.125% 2013 Notes and paid the outstanding indebtedness under our senior term loan. As a result of this refinancing, our average borrowing rate for the current quarter increased to 8.6% compared to 4.6% for the prior year quarter. Debt outstanding on December 25, 2010 was $400.3 million compared to $407.3 million as of December 26, 2009.
Interest on the Credit Facility is based, at our option, on a rate equal to the Alternate Base Rate (ABR), the greatest of the prime rate, the Federal Funds rate plus 1/2 of 1% or one month LIBOR plus 1%, plus a margin, which fluctuates from 1.5% to 2.5%, or LIBOR plus a margin, which fluctuates from 2.5% to 3.5% and commitment fees that range from 0.35% to 0.75%, determined quarterly based on consolidated total debt to consolidated EBITDA for the most recent trailing 12-month period. As of December 25, 2010, had we borrowed under the Credit Facility, the applicable interest rate on the Credit Facility related to alternate base rate borrowings would have been 5.25%, and the applicable interest rate related to LIBOR rate borrowings would have been 3.26%.
We may redeem some or all of the 2018 Notes at any time prior to March 1, 2014 at the principal amount plus a make whole premium. We may redeem some or all of the 2018 Notes at any time on or after March 1, 2014 for 104.125%, after March 1, 2015 for 102.063% and after March 1, 2016 for 100%, plus accrued and unpaid interest. Additionally, at any time prior to March 1, 2013 we may redeem up to 35% of the 2018 Notes with any proceeds we receive from certain equity offerings at a redemption price of 108.25% of the principal amount, plus accrued and unpaid interest. The holders of the 2018 Notes have the right to require us to repurchase all or a portion of the 2018 Notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus accrued and unpaid interest through the repurchase date upon the occurrence of a change of control.
Commodity Prices. We are exposed to fluctuations in market prices for grains, grass seed and pet food ingredients. To mitigate risk associated with increases in market prices and commodity availability, we enter into contracts for purchases, primarily to ensure commodity availability to us in the future. As of September 25, 2010, we had entered into fixed purchase commitments for commodities totaling approximately $157.6 million. A 10% change in the market price for these commodities would have resulted in an additional pretax gain or loss of $15.8 million related to the contracts outstanding as of September 25, 2010. During the first quarter of fiscal 2011, prices for some of our key crops have increased substantially. During the first quarter of fiscal 2011, our weighted average cost per pound increased approximately 15% from the fourth quarter of fiscal 2010. We are currently negotiating price increases with our retailers; however we can provide no assurance as to the timing or extent of our ability to implement additional price adjustments in the context of rising costs or in the event of increased costs in the future.
Read the The complete Report
