Central Garden & Pet Announces Q3 Fiscal 2024 Financial Results
Central Garden & Pet (NASDAQ: CENTA) reported Q3 fiscal 2024 results with net sales of $996 million, down 3% from $1,023 million last year. GAAP EPS was $1.19, compared to $1.25 a year ago, while non-GAAP EPS was $1.32 vs. $1.40 last year. The company maintains its outlook for fiscal 2024 non-GAAP EPS of $2.00 or better.
Key highlights include:
- Gross margin expanded by 70 basis points to 31.8%
- Operating income decreased 6% to $116 million
- Pet segment sales increased 1% to $508 million
- Garden segment sales decreased 6% to $488 million
- Cash balance at quarter-end was $570 million
The company continues to advance its Cost and Simplicity program to improve efficiency and simplify operations.
Central Garden & Pet (NASDAQ: CENTA) ha riportato i risultati del terzo trimestre fiscale 2024 con vendite nette di $996 milioni, in calo del 3% rispetto ai $1.023 milioni dell'anno scorso. L'EPS GAAP è stato di $1.19, rispetto a $1.25 un anno fa, mentre l'EPS non-GAAP è stato di $1.32 contro $1.40 dell'anno precedente. L'azienda mantiene le sue proiezioni per l'EPS non-GAAP del 2024 di $2.00 o superiore.
I punti salienti includono:
- La marginalità lordo è aumentata di 70 punti base, raggiungendo il 31.8%
- Il reddito operativo è diminuito del 6%, arrivando a $116 milioni
- Le vendite del segmento pet sono aumentate dell'1%, arrivando a $508 milioni
- Le vendite del segmento giardinaggio sono calate del 6%, a $488 milioni
- Il saldo di cassa a fine trimestre era di $570 milioni
L'azienda continua a portare avanti il suo programma di Costi e Semplicità per migliorare l'efficienza e semplificare le operazioni.
Central Garden & Pet (NASDAQ: CENTA) reportó los resultados del tercer trimestre fiscal 2024 con ventas netas de $996 millones, una disminución del 3% respecto a los $1,023 millones del año pasado. El EPS GAAP fue de $1.19, comparado con $1.25 un año atrás, mientras que el EPS no-GAAP fue de $1.32 frente a $1.40 el año pasado. La compañía mantiene su perspectiva para el EPS no-GAAP del fiscal 2024 de $2.00 o mejor.
Los puntos destacados incluyen:
- El margen bruto se expandió en 70 puntos básicos a 31.8%
- El ingreso operativo disminuyó un 6% a $116 millones
- Las ventas del segmento de mascotas aumentaron un 1% a $508 millones
- Las ventas del segmento de jardín disminuyeron un 6% a $488 millones
- El saldo de efectivo al final del trimestre fue de $570 millones
La compañía sigue avanzando en su programa de Costos y Sencillez para mejorar la eficiencia y simplificar las operaciones.
중앙 정원 및 애완동물(Central Garden & Pet, NASDAQ: CENTA)이 2024 회계연도 3분기 실적을 보고했습니다. 순매출은 9억 9600만 달러로, 지난해 10억 2300만 달러에서 3% 감소했습니다. GAAP EPS는 1.19달러로, 작년 1.25달러와 비교되며, 비-GAAP EPS는 1.32달러로 지난해 1.40달러에 비해 줄어들었습니다. 회사는 2024 회계연도 비-GAAP EPS가 2.00달러 이상일 것이라고 전망하고 있습니다.
주요 하이라이트는 다음과 같습니다:
- 총 마진이 70베이시스 포인트 증가하여 31.8%에 도달했습니다.
- 운영 수익이 6% 감소하여 1억 1600만 달러가 되었습니다.
- 애완동물 부문 매출이 1% 증가하여 5억 800만 달러가 되었습니다.
- 정원 부문 매출이 6% 감소하여 4억 8800만 달러가 되었습니다.
- 분기 말 현금 잔액은 5억 7000만 달러였습니다.
회사는 효율성을 개선하고 운영을 단순화하기 위해 비용 및 간소함 프로그램을 계속 진행하고 있습니다.
Central Garden & Pet (NASDAQ: CENTA) a annoncé les résultats du troisième trimestre fiscal 2024 avec des ventes nettes de 996 millions de dollars, en baisse de 3 % par rapport aux 1 023 millions de dollars de l'année précédente. Le BAIIA GAAP s'élevait à 1,19 $, contre 1,25 $ un an auparavant, tandis que le BAIIA non-GAAP était de 1,32 $ contre 1,40 $ l'année dernière. L'entreprise maintient ses prévisions pour un BAIIA non-GAAP de 2,00 $ ou plus pour l'exercice 2024.
Les points clés comprennent :
- La marge brute a augmenté de 70 points de base pour atteindre 31,8 %.
- Le résultat opérationnel a diminué de 6 % pour atteindre 116 millions de dollars.
- Les ventes du segment des animaux de compagnie ont augmenté de 1 % pour atteindre 508 millions de dollars.
- Les ventes du segment jardin ont baissé de 6 % pour s'établir à 488 millions de dollars.
- Le solde de trésorerie à la fin du trimestre s'élevait à 570 millions de dollars.
L'entreprise continue de faire progresser son programme de coûts et de simplicité pour améliorer l'efficacité et simplifier les opérations.
Central Garden & Pet (NASDAQ: CENTA) berichtete über die Ergebnisse des 3. Quartals 2024 mit einem Nettoumsatz von 996 Millionen USD, was einem Rückgang von 3 % gegenüber 1.023 Millionen USD im Vorjahr entspricht. Der GAAP EPS betrug 1,19 USD, verglichen mit 1,25 USD im Vorjahr, während der Non-GAAP EPS bei 1,32 USD lag, verglichen mit 1,40 USD im letzten Jahr. Das Unternehmen hält an seiner Prognose für das Geschäftsjahr 2024 von Non-GAAP EPS von 2,00 USD oder mehr fest.
Wichtige Highlights sind:
- Die Bruttomarge hat sich um 70 Basispunkte auf 31,8 % erhöht.
- Das Betriebsergebnis sank um 6 % auf 116 Millionen USD.
- Die Umsätze im Haustiersegment stiegen um 1 % auf 508 Millionen USD.
- Die Umsätze im Gartenbereich sanken um 6 % auf 488 Millionen USD.
- Der Kassenbestand am Ende des Quartals betrug 570 Millionen USD.
Das Unternehmen setzt sein Programm zur Kostenreduzierung und Vereinfachung fort, um die Effizienz zu verbessern und die Abläufe zu vereinfachen.
- Gross margin expanded by 70 basis points to 31.8%, driven by Cost and Simplicity program
- Pet segment operating income increased 39% to $83 million
- Cash balance improved to $570 million from $333 million a year ago
- Gross leverage ratio improved to 3.0x from 3.1x year-over-year
- Net sales decreased 3% to $996 million
- GAAP EPS declined to $1.19 from $1.25 year-over-year
- Operating income decreased 6% to $116 million
- Garden segment operating income decreased 29% to $63 million
- Anticipating one-time charge of $15-20 million in Q4 due to grass seed inventory write-down
Insights
Central Garden & Pet's Q3 results show a mixed performance. While net sales declined
The company's Pet segment showed resilience with a
The maintained guidance of non-GAAP EPS at
The
The divergence between Pet and Garden segments is noteworthy. The Pet segment's growth, particularly in consumables, indicates resilience in pet care spending. Conversely, the Garden segment's decline might reflect shifting consumer priorities or weather-related factors affecting gardening activities.
The company's strong cash position of
Central's Cost and Simplicity program is yielding positive results, as evidenced by the 80 basis point expansion in non-GAAP gross margin to
The company's inventory reduction efforts over the past 12 months have contributed to a stronger cash position. However, the need for a grass seed inventory write-down in Q4 highlights the challenges of inventory management in volatile markets. This proactive step should help align inventory levels with current market conditions but will impact short-term financials.
The reduction in expected capital spending to
Fiscal 2024 Q3 net sales of
Fiscal 2024 Q3 GAAP EPS of
Maintains outlook for fiscal 2024 non-GAAP EPS of
"We delivered a solid third quarter earnings performance, recognizing that we had a record third quarter in 2023," said Beth Springer, Interim CEO. "Our Cost and Simplicity program continues to prove effective as evidenced in our improved gross margins. Looking ahead, we remain committed to our long-term Central to Home strategy."
Fiscal 2024 Third Quarter Financial Results
Net sales were
Gross profit was
Operating income was
Net interest expense was
Net income was
The effective tax rate was
Pet Segment Fiscal 2024 Third Quarter Results
Net sales for the Pet segment were
Pet segment operating income was
Garden Segment Fiscal 2024 Third Quarter Results
Net sales for the Garden segment were
Garden segment operating income was
Liquidity and Debt
The cash balance at the end of the quarter was
Cash provided by operations during the quarter was
Total debt as of June 29, 2024, and June 24, 2023 was
Cost and Simplicity Program
Central continues to advance its multi-year Cost and Simplicity program consisting of a pipeline of projects across procurement, manufacturing, logistics, portfolio management and administrative costs to simplify its business and improve efficiency across the organization.
In the third quarter of fiscal 2024, Central began winding down its pottery business.
As a result of Cost and Simplicity projects, Central incurred
Fiscal 2024 Guidance
Central continues to expect fiscal 2024 non-GAAP EPS to be
This outlook reflects uncertain consumer demand and retailer dynamics and an environment of macroeconomic and geopolitical volatility. It excludes the impact of any restructuring activities that may occur during the fourth quarter of fiscal 2024, including projects under the Cost and Simplicity program or other one-time non-recurring charges. Central now expects fiscal 2024 capital spending to be approximately
Conference Call
Central's senior management will hold a conference call today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss its fiscal 2024 third quarter results and provide a general business update. The conference call and related materials can be accessed at http://ir.central.com.
Alternatively, to listen to the call by telephone, dial (201) 689-8345 (domestic and international) using confirmation #13746730.
About Central Garden & Pet
Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) understands home is central to life and has proudly nurtured happy and healthy homes for over 40 years. With fiscal 2023 net sales of
Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts, including statements concerning evolving consumer demand and unfavorable retailer dynamics, the carryover impact from pricing actions, productivity initiatives and estimated capital spending, anticipated inventory write-down, and earnings guidance for fiscal 2024, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. All forward-looking statements are based upon Central's current expectations and various assumptions. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this release including, but not limited to, the following factors:
- impact of inflation and interest rates, and other adverse macro-economic conditions;
- fluctuations in market prices for seeds and grains and other raw materials, including the impact of the recent significant decline in grass seed market prices on our inventory valuation;
- our inability to pass through cost increases in a timely manner;
- our ability to recruit and retain members of our management team and employees, including a Chief Executive Officer, to support our businesses;
- fluctuations in energy prices, fuel and related petrochemical costs;
- declines in consumer spending and increased inventory risk during economic downturns;
- reductions in demand for product categories that benefited from the COVID-19 pandemic;
- adverse weather conditions;
- the success of our Central to Home strategy and our Cost and Simplicity program;
- risks associated with our acquisition strategy, including our ability to successfully integrate acquisitions and the impact of purchase accounting on our financial results;
- material weaknesses relating to the internal controls of recently acquired companies;
- seasonality and fluctuations in our operating results and cash flow;
- supply shortages in pet birds, small animals and fish;
- dependence on a small number of customers for a significant portion of our business;
- consolidation trends in the retail industry;
- risks associated with new product introductions, including the risk that our new products will not produce sufficient sales to recoup our investment;
- competition in our industries;
- continuing implementation of an enterprise resource planning information technology system;
- potential environmental liabilities;
- risks associated with international sourcing;
- impacts of tariffs or a trade war;
- access to and cost of additional capital;
- potential goodwill or intangible asset impairment;
- our ability to remediate material weaknesses in our internal control over financial reporting;
- our dependence upon our key executives;
- our ability to protect our trademarks and other proprietary rights;
- litigation and product liability claims;
- regulatory issues;
- the impact of product recalls;
- potential costs and risks associated with actual or potential cyberattacks;
- potential dilution from issuance of authorized shares;
- the voting power associated with our Class B stock; and
- the impact of new accounting regulations and the possibility our effective tax rate will increase as a result of future changes in the corporate tax rate or other tax law changes.
These risks and others are described in Central’s Securities and Exchange Commission filings. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise. Central has not filed its Form 10-Q for the fiscal quarter ended June 29, 2024, so all financial results are preliminary and subject to change.
CENTRAL GARDEN & PET COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts, unaudited) |
|||||||||||
|
June 29, 2024 |
|
June 24, 2023 |
|
September 30, 2023 |
||||||
ASSETS |
|
|
|
|
|
||||||
Current assets: |
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
570,398 |
|
|
$ |
333,139 |
|
|
$ |
488,730 |
|
Restricted cash |
|
13,980 |
|
|
|
13,542 |
|
|
|
14,143 |
|
Accounts receivable (less allowance for credit losses and customer allowances of |
|
507,524 |
|
|
|
492,850 |
|
|
|
332,890 |
|
Inventories, net |
|
784,775 |
|
|
|
865,496 |
|
|
|
838,188 |
|
Prepaid expenses and other |
|
33,493 |
|
|
|
36,655 |
|
|
|
33,172 |
|
Total current assets |
|
1,910,170 |
|
|
|
1,741,682 |
|
|
|
1,707,123 |
|
Plant, property and equipment, net |
|
384,373 |
|
|
|
392,332 |
|
|
|
391,768 |
|
Goodwill |
|
546,436 |
|
|
|
546,436 |
|
|
|
546,436 |
|
Other intangible assets, net |
|
472,854 |
|
|
|
512,175 |
|
|
|
497,228 |
|
Operating lease right-of-use assets |
|
188,506 |
|
|
|
172,379 |
|
|
|
173,540 |
|
Other assets |
|
105,539 |
|
|
|
54,943 |
|
|
|
62,553 |
|
Total |
$ |
3,607,878 |
|
|
$ |
3,419,947 |
|
|
$ |
3,378,648 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
||||||
Current liabilities: |
|
|
|
|
|
||||||
Accounts payable |
$ |
191,041 |
|
|
$ |
198,406 |
|
|
$ |
190,902 |
|
Accrued expenses |
|
276,751 |
|
|
|
247,517 |
|
|
|
216,241 |
|
Current lease liabilities |
|
53,363 |
|
|
|
50,209 |
|
|
|
50,597 |
|
Current portion of long-term debt |
|
290 |
|
|
|
255 |
|
|
|
247 |
|
Total current liabilities |
|
521,445 |
|
|
|
496,387 |
|
|
|
457,987 |
|
Long-term debt |
|
1,189,366 |
|
|
|
1,187,498 |
|
|
|
1,187,956 |
|
Long-term lease liabilities |
|
151,038 |
|
|
|
132,419 |
|
|
|
135,621 |
|
Deferred income taxes and other long-term obligations |
|
150,249 |
|
|
|
156,537 |
|
|
|
144,271 |
|
Equity: |
|
|
|
|
|
||||||
Common stock, |
|
111 |
|
|
|
111 |
|
|
|
111 |
|
Class A common stock, |
|
547 |
|
|
|
544 |
|
|
|
544 |
|
Class B stock, |
|
16 |
|
|
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
595,646 |
|
|
|
588,597 |
|
|
|
594,282 |
|
Retained earnings |
|
1,000,527 |
|
|
|
858,217 |
|
|
|
859,370 |
|
Accumulated other comprehensive loss |
|
(3,199 |
) |
|
|
(1,955 |
) |
|
|
(2,970 |
) |
Total Central Garden & Pet Company shareholders’ equity |
|
1,593,648 |
|
|
|
1,445,530 |
|
|
|
1,451,353 |
|
Noncontrolling interest |
|
2,132 |
|
|
|
1,576 |
|
|
|
1,460 |
|
Total equity |
|
1,595,780 |
|
|
|
1,447,106 |
|
|
|
1,452,813 |
|
Total |
$ |
3,607,878 |
|
|
$ |
3,419,947 |
|
|
$ |
3,378,648 |
|
CENTRAL GARDEN & PET COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts, unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
June 29, 2024 |
|
June 24, 2023 |
|
June 29, 2024 |
|
June 24, 2023 |
||||||||
Net sales |
$ |
996,348 |
|
|
$ |
1,023,269 |
|
|
$ |
2,530,971 |
|
|
$ |
2,559,936 |
|
Cost of goods sold |
|
679,290 |
|
|
|
705,217 |
|
|
|
1,756,188 |
|
|
|
1,810,547 |
|
Gross profit |
|
317,058 |
|
|
|
318,052 |
|
|
|
774,783 |
|
|
|
749,389 |
|
Selling, general and administrative expenses |
|
201,122 |
|
|
|
195,222 |
|
|
|
556,988 |
|
|
|
548,112 |
|
Operating income |
|
115,936 |
|
|
|
122,830 |
|
|
|
217,795 |
|
|
|
201,277 |
|
Interest expense |
|
(14,720 |
) |
|
|
(14,542 |
) |
|
|
(43,412 |
) |
|
|
(43,887 |
) |
Interest income |
|
4,504 |
|
|
|
1,408 |
|
|
|
12,016 |
|
|
|
2,287 |
|
Other income |
|
225 |
|
|
|
853 |
|
|
|
1,047 |
|
|
|
3,147 |
|
Income before income taxes and noncontrolling interest |
|
105,945 |
|
|
|
110,549 |
|
|
|
187,446 |
|
|
|
162,824 |
|
Income tax expense |
|
25,468 |
|
|
|
27,000 |
|
|
|
43,733 |
|
|
|
39,446 |
|
Income including noncontrolling interest |
|
80,477 |
|
|
|
83,549 |
|
|
|
143,713 |
|
|
|
123,378 |
|
Net income attributable to noncontrolling interest |
|
753 |
|
|
|
423 |
|
|
|
1,572 |
|
|
|
570 |
|
Net income attributable to Central Garden & Pet Company |
$ |
79,724 |
|
|
$ |
83,126 |
|
|
$ |
142,141 |
|
|
$ |
122,808 |
|
Net income per share attributable to Central Garden & Pet Company: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.21 |
|
|
$ |
1.27 |
|
|
$ |
2.17 |
|
|
$ |
1.87 |
|
Diluted |
$ |
1.19 |
|
|
$ |
1.25 |
|
|
$ |
2.13 |
|
|
$ |
1.84 |
|
Weighted average shares used in the computation of net income per share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
65,850 |
|
|
|
65,580 |
|
|
|
65,636 |
|
|
|
65,577 |
|
Diluted |
|
66,945 |
|
|
|
66,725 |
|
|
|
66,848 |
|
|
|
66,832 |
|
CENTRAL GARDEN & PET COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) |
|||||||
|
Nine Months Ended |
||||||
|
June 29, 2024 |
|
June 24, 2023 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
143,713 |
|
|
$ |
123,378 |
|
Adjustments to reconcile net income to net cash used by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
68,069 |
|
|
|
65,504 |
|
Amortization of deferred financing costs |
|
2,013 |
|
|
|
2,023 |
|
Non-cash lease expense |
|
39,183 |
|
|
|
38,180 |
|
Stock-based compensation |
|
15,138 |
|
|
|
20,632 |
|
Deferred income taxes |
|
3,622 |
|
|
|
9,125 |
|
Facility closures and business exit costs |
|
16,385 |
|
|
|
13,923 |
|
Other operating activities |
|
3,531 |
|
|
|
(450 |
) |
Change in assets and liabilities (excluding businesses acquired): |
|
|
|
||||
Accounts receivable |
|
(169,867 |
) |
|
|
(115,358 |
) |
Inventories |
|
58,705 |
|
|
|
69,610 |
|
Prepaid expenses and other assets |
|
(383 |
) |
|
|
6,530 |
|
Accounts payable |
|
(2,968 |
) |
|
|
(12,248 |
) |
Accrued expenses |
|
51,213 |
|
|
|
44,221 |
|
Other long-term obligations |
|
2,352 |
|
|
|
(55 |
) |
Operating lease liabilities |
|
(38,902 |
) |
|
|
(37,449 |
) |
Net cash provided by operating activities |
|
191,804 |
|
|
|
227,566 |
|
Cash flows from investing activities: |
|
|
|
||||
Additions to plant, property and equipment |
|
(33,096 |
) |
|
|
(40,850 |
) |
Payments to acquire companies, net of cash acquired |
|
(59,818 |
) |
|
|
— |
|
Investments |
|
(1,500 |
) |
|
|
(500 |
) |
Other investing activities |
|
(175 |
) |
|
|
(100 |
) |
Net cash used in investing activities |
|
(94,589 |
) |
|
|
(41,450 |
) |
Cash flows from financing activities: |
|
|
|
||||
Repayments of long-term debt |
|
(289 |
) |
|
|
(223 |
) |
Borrowings under revolving line of credit |
|
— |
|
|
|
48,000 |
|
Repayments under revolving line of credit |
|
— |
|
|
|
(48,000 |
) |
Repurchase of common stock, including shares surrendered for tax withholding |
|
(14,755 |
) |
|
|
(33,409 |
) |
Payment of contingent consideration liability |
|
(63 |
) |
|
|
(33 |
) |
Distribution to noncontrolling interest |
|
(900 |
) |
|
|
— |
|
Net cash used by financing activities |
|
(16,007 |
) |
|
|
(33,665 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
297 |
|
|
|
2,046 |
|
Net increase in cash, cash equivalents and restricted cash |
|
81,505 |
|
|
|
154,497 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
502,873 |
|
|
|
192,184 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
584,378 |
|
|
$ |
346,681 |
|
Supplemental information: |
|
|
|
||||
Cash paid for interest |
$ |
48,853 |
|
|
$ |
49,419 |
|
Cash paid for income taxes |
$ |
38,027 |
|
|
$ |
5,363 |
|
New operating lease right of use assets |
$ |
56,849 |
|
|
$ |
25,424 |
|
Use of Non-GAAP Financial Measures
We report our financial results in accordance with GAAP. However, to supplement the financial results prepared in accordance with GAAP, we use non-GAAP financial measures including non-GAAP net income and diluted net income per share, non-GAAP operating income, adjusted EBITDA and organic net sales. Management uses these non-GAAP financial measures that exclude the impact of specific items (described below) in making financial, operating and planning decisions and in evaluating our performance. Also, Management believes that these non-GAAP financial measures may be useful to investors in their assessment of our ongoing operating performance and provide additional meaningful comparisons between current results and results in prior operating periods. While Management believes that non-GAAP measures are useful supplemental information, such adjusted results are not intended to replace our GAAP financial results and should be read in conjunction with those GAAP results.
Adjusted EBITDA is defined by us as income before income tax, net other expense, net interest expense and depreciation and amortization and stock-based compensation expense (or operating income plus depreciation and amortization expense and stock-based compensation expense). Adjusted EBITDA further excludes one-time charges related to facility closures. We present adjusted EBITDA because we believe that adjusted EBITDA is a useful supplemental measure in evaluating the cash flows and performance of our business and provides greater transparency into our results of operations. Adjusted EBITDA is used by our management to perform such evaluations. Adjusted EBITDA should not be considered in isolation or as a substitute for cash flow from operations, income from operations or other income statement measures prepared in accordance with GAAP. We believe that adjusted EBITDA is frequently used by investors, securities analysts and other interested parties in their evaluation of companies, many of which present adjusted EBITDA when reporting their results. Other companies may calculate adjusted EBITDA differently and it may not be comparable.
The reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in the tables below.
Non-GAAP financial measures reflect adjustments based on the following items:
- Facility closures and business exit: we have excluded the charges related to our decision to exit the pottery business and the closure of distribution and manufacturing facilities as they represent infrequent transactions that impact the comparability between operating periods. They exclude the impact of the expenditures related to the Cost and Simplicity program we have embarked on to improve our future operations. We believe these exclusions supplement the GAAP information with a measure that may be useful to investors in assessing the sustainability of our operating performance.
From time to time in the future, there may be other items that we may exclude if we believe that doing so is consistent with the goal of providing useful supplemental information to investors and management.
-
During the third quarter of fiscal 2024, we recognized incremental expense of
in the consolidated statement of operations, from the decision to exit the pottery business, the closure of a live goods distribution facility in$11.1 million Delaware and the relocation of our grass seed research facility. -
During the second quarter of fiscal 2024, we recognized incremental expense of
in the consolidated statement of operations, from the closure of a manufacturing facility in$5.3 million Chico, California and the consolidation of our Southeast distribution network. -
During the third quarter of fiscal 2023, we recognized incremental expense of
in the consolidated statement of operations, from the closure of a leased manufacturing and distribution pet bedding facility in$13.9 million Athens, Texas .
Net Income and Diluted Net Income Per Share Reconciliation |
|
GAAP to Non-GAAP
|
|
GAAP to Non-GAAP
|
||||||||||||||||
|
|
June 29, 2024 |
|
June 24, 2023 |
|
June 29, 2024 |
|
June 24, 2023 |
||||||||||||
|
|
(in thousands, except per share amounts) |
||||||||||||||||||
GAAP net income attributable to Central Garden & Pet Company |
|
$ |
79,724 |
|
|
$ |
83,126 |
|
|
$ |
142,141 |
|
|
$ |
122,808 |
|
||||
Facility closures & business exit |
(1) |
|
11,115 |
|
(3) |
|
13,921 |
|
(1) (2) |
|
16,385 |
|
(3) |
|
13,921 |
|
||||
Tax effect of facility closures & business exit |
|
|
(2,590 |
) |
|
|
(3,373 |
) |
|
|
(3,823 |
) |
|
|
(3,373 |
) |
||||
Non-GAAP net income attributable to Central Garden & Pet Company |
|
$ |
88,249 |
|
|
$ |
93,674 |
|
|
$ |
154,703 |
|
|
$ |
133,356 |
|
||||
GAAP diluted net income per share |
|
$ |
1.19 |
|
|
$ |
1.25 |
|
|
$ |
2.13 |
|
|
$ |
1.84 |
|
||||
Non-GAAP diluted net income per share |
|
$ |
1.32 |
|
|
$ |
1.40 |
|
|
$ |
2.31 |
|
|
$ |
2.00 |
|
||||
Shares used in GAAP and non-GAAP diluted net earnings per share calculation |
|
|
66,945 |
|
|
|
66,725 |
|
|
|
66,848 |
|
|
|
66,832 |
|
Operating Income Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
||||||||||||||
|
|
Three Months Ended June 29, 2024 |
|
Nine Months Ended June 29, 2024 |
||||||||||||
|
|
GAAP |
Facility Closure
|
Non-GAAP |
|
GAAP |
Facility Closure
|
Non-GAAP |
||||||||
|
|
(in thousands) |
||||||||||||||
Net sales |
|
$ |
996,348 |
$ |
— |
|
$ |
996,348 |
|
$ |
2,530,971 |
$ |
— |
|
$ |
2,530,971 |
Cost of goods sold and occupancy |
|
|
679,290 |
|
8,613 |
|
|
670,677 |
|
|
1,756,188 |
|
11,140 |
|
|
1,745,048 |
Gross profit |
|
$ |
317,058 |
$ |
(8,613 |
) |
$ |
325,671 |
|
$ |
774,783 |
$ |
(11,140 |
) |
$ |
785,923 |
Selling, general and administrative expenses |
|
|
201,122 |
|
2,502 |
|
|
198,620 |
|
|
556,988 |
|
5,245 |
|
|
551,743 |
Income from operations |
|
$ |
115,936 |
$ |
(11,115 |
) |
$ |
127,051 |
|
$ |
217,795 |
$ |
(16,385 |
) |
$ |
234,180 |
Operating Income Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
||||||||||||||
|
|
Three Months Ended June 24, 2023 |
|
Nine Months Ended June 24, 2023 |
||||||||||||
|
|
GAAP |
Facility
|
Non-GAAP |
|
GAAP |
Facility
|
Non-GAAP |
||||||||
|
|
(in thousands) |
||||||||||||||
Net sales |
|
$ |
1,023,269 |
$ |
— |
|
$ |
1,023,269 |
|
$ |
2,559,936 |
$ |
— |
|
$ |
2,559,936 |
Cost of goods sold and occupancy |
|
|
705,217 |
|
8,010 |
|
|
697,207 |
|
|
1,810,547 |
|
8,010 |
|
|
1,802,537 |
Gross profit |
|
$ |
318,052 |
$ |
(8,010 |
) |
$ |
326,062 |
|
$ |
749,389 |
$ |
(8,010 |
) |
$ |
757,399 |
Selling, general and administrative expenses |
|
|
195,222 |
|
5,911 |
|
|
189,311 |
|
|
548,112 |
|
5,911 |
|
|
542,201 |
Income from operations |
|
$ |
122,830 |
$ |
(13,921 |
) |
$ |
136,751 |
|
$ |
201,277 |
$ |
(13,921 |
) |
$ |
215,198 |
Pet Segment Operating Income Reconciliation |
|
GAAP to Non-GAAP Reconciliation
|
|
GAAP to Non-GAAP Reconciliation
|
|||||||||||||
|
|
June 29, 2024 |
|
June 24, 2023 |
|
June 29, 2024 |
|
June 24, 2023 |
|||||||||
|
|
(in thousands) |
|||||||||||||||
GAAP operating income |
|
$ |
83,068 |
|
|
$ |
59,969 |
|
|
$ |
189,115 |
|
|
$ |
154,779 |
|
|
Facility closure |
(3) |
|
— |
|
|
|
13,921 |
|
|
|
— |
|
|
|
13,921 |
|
|
Non-GAAP operating income |
|
$ |
83,068 |
|
|
$ |
73,890 |
|
|
$ |
189,115 |
|
|
$ |
168,700 |
|
|
GAAP operating margin |
|
|
16.4 |
% |
|
|
11.9 |
% |
|
|
13.5 |
% |
|
|
11.1 |
% |
|
Non-GAAP operating margin |
|
|
16.4 |
% |
|
|
14.7 |
% |
|
|
13.5 |
% |
|
|
12.1 |
% |
Garden Segment Operating Income Reconciliation |
|
GAAP to Non-GAAP Reconciliation
|
|
GAAP to Non-GAAP Reconciliation
|
||||||||||||||
|
|
June 29, 2024 |
|
June 24, 2023 |
|
June 29, 2024 |
|
June 24, 2023 |
||||||||||
|
|
(in thousands) |
||||||||||||||||
GAAP operating income |
|
$ |
62,519 |
|
|
$ |
88,088 |
|
|
$ |
110,699 |
|
|
$ |
126,887 |
|
||
Facility closure & business exit |
(1) |
|
11,115 |
|
|
|
— |
|
(1) (2) |
|
16,385 |
|
|
|
— |
|
||
Non-GAAP operating income |
|
$ |
73,634 |
|
|
$ |
88,088 |
|
|
$ |
127,084 |
|
|
$ |
126,887 |
|
||
GAAP operating margin |
|
|
12.8 |
% |
|
|
16.9 |
% |
|
|
9.8 |
% |
|
|
10.9 |
% |
||
Non-GAAP operating margin |
|
|
15.1 |
% |
|
|
16.9 |
% |
|
|
11.2 |
% |
|
|
10.9 |
% |
Organic Net Sales Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
||||||||||||||||||||
|
|
Three Months Ended June 29, 2024 |
|
Nine Months Ended June 29, 2024 |
||||||||||||||||||
|
|
Net sales
|
|
Effect of
|
|
Net sales
|
|
Net sales
|
|
Effect of
|
|
Net sales
|
||||||||||
|
|
(in millions) |
||||||||||||||||||||
Q3 FY 24 |
|
$ |
996.3 |
|
|
$ |
15.8 |
|
$ |
980.5 |
|
|
$ |
2,531.0 |
|
|
$ |
48.4 |
|
$ |
2,482.6 |
|
Q3 FY 23 |
|
|
1,023.3 |
|
|
|
13.0 |
|
|
1,010.3 |
|
|
|
2,559.9 |
|
|
|
44.4 |
|
|
2,515.5 |
|
$ decrease |
|
$ |
(27.0 |
) |
|
|
|
$ |
(29.8 |
) |
|
$ |
(28.9 |
) |
|
|
|
$ |
(32.9 |
) |
||
% decrease |
|
|
(2.6 |
)% |
|
|
|
|
(2.9 |
)% |
|
|
(1.1 |
)% |
|
|
|
|
(1.3 |
)% |
Organic Pet Segment Net Sales Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
||||||||||||||||||||
|
|
Three Months Ended June 29, 2024 |
|
Nine Months Ended June 29, 2024 |
||||||||||||||||||
|
|
Net sales
|
|
Effect of
|
|
Net sales
|
|
Net sales
|
|
Effect of
|
|
Net sales
|
||||||||||
|
|
(in millions) |
||||||||||||||||||||
Q3 FY 24 |
|
$ |
508.0 |
|
|
$ |
15.8 |
|
$ |
492.2 |
|
|
$ |
1,397.5 |
|
|
$ |
48.4 |
|
$ |
1,349.1 |
|
Q3 FY 23 |
|
|
503.3 |
|
|
|
— |
|
|
503.3 |
|
|
|
1,394.3 |
|
|
|
— |
|
|
1,394.3 |
|
$ increase (decrease) |
|
$ |
4.7 |
|
|
|
|
$ |
(11.1 |
) |
|
$ |
3.2 |
|
|
|
|
$ |
(45.2 |
) |
||
% increase (decrease) |
|
|
0.9 |
% |
|
|
|
|
(2.2 |
)% |
|
|
0.2 |
% |
|
|
|
|
(3.2 |
)% |
Organic Garden Segment Net Sales Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
||||||||||||||||||||
|
|
Three Months Ended June 29, 2024 |
|
Nine Months Ended June 29, 2024 |
||||||||||||||||||
|
|
Net sales
|
|
Effect of
|
|
Net sales
|
|
Net sales
|
|
Effect of
|
|
Net sales
|
||||||||||
|
|
(in millions) |
||||||||||||||||||||
Q3 FY 24 |
|
$ |
488.3 |
|
|
$ |
— |
|
$ |
488.3 |
|
|
$ |
1,133.5 |
|
|
$ |
— |
|
$ |
1,133.5 |
|
Q3 FY 23 |
|
|
520.0 |
|
|
|
13.0 |
|
|
507.0 |
|
|
|
1,165.6 |
|
|
|
44.4 |
|
|
1,121.2 |
|
$ increase (decrease) |
|
$ |
(31.7 |
) |
|
|
|
$ |
(18.7 |
) |
|
$ |
(32.1 |
) |
|
|
|
$ |
12.3 |
|
||
% increase (decrease) |
|
|
(6.1 |
)% |
|
|
|
|
(3.7 |
)% |
|
|
(2.8 |
)% |
|
|
|
|
1.1 |
% |
Adjusted EBITDA Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
|||||||||||||
|
|
Three Months Ended June 29, 2024 |
|||||||||||||
|
|
Pet |
|
Garden |
|
Corporate |
|
Total |
|||||||
|
|
(in thousands) |
|||||||||||||
Net income attributable to Central Garden & Pet Company |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
79,724 |
|
|
Interest expense, net |
|
|
— |
|
|
— |
|
|
— |
|
|
|
10,216 |
|
|
Other income |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(225 |
) |
|
Income tax expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
25,468 |
|
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
|
753 |
|
|
Income (loss) from operations |
|
$ |
83,068 |
|
$ |
62,519 |
|
$ |
(29,651 |
) |
|
$ |
115,936 |
|
|
Depreciation & amortization |
|
|
10,979 |
|
|
11,008 |
|
|
725 |
|
|
|
22,712 |
|
|
Noncash stock-based compensation |
|
|
— |
|
|
— |
|
|
6,211 |
|
|
|
6,211 |
|
|
Facility closures & business exit |
(1) |
|
— |
|
|
11,115 |
|
|
— |
|
|
|
11,115 |
|
|
Adjusted EBITDA |
|
$ |
94,047 |
|
$ |
84,642 |
|
$ |
(22,715 |
) |
|
$ |
155,974 |
|
Adjusted EBITDA Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
|||||||||||||
|
|
Three Months Ended June 24, 2023 |
|||||||||||||
|
|
Pet |
|
Garden |
|
Corporate |
|
Total |
|||||||
|
|
(in thousands) |
|||||||||||||
Net income attributable to Central Garden & Pet Company |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
83,126 |
|
|
Interest expense, net |
|
|
— |
|
|
— |
|
|
— |
|
|
|
13,134 |
|
|
Other income |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(853 |
) |
|
Income tax expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
27,000 |
|
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
|
423 |
|
|
Income (loss) from operations |
|
$ |
59,969 |
|
$ |
88,088 |
|
$ |
(25,227 |
) |
|
$ |
122,830 |
|
|
Depreciation & amortization |
|
|
10,060 |
|
|
10,823 |
|
|
818 |
|
|
|
21,701 |
|
|
Noncash stock-based compensation |
|
|
— |
|
|
— |
|
|
7,305 |
|
|
|
7,305 |
|
|
Facility closure |
(3) |
|
13,921 |
|
|
— |
|
|
— |
|
|
|
13,921 |
|
|
Adjusted EBITDA |
|
$ |
83,950 |
|
$ |
98,911 |
|
$ |
(17,104 |
) |
|
$ |
165,757 |
|
Adjusted EBITDA Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
|||||||||||||
|
|
Nine Months Ended June 29, 2024 |
|||||||||||||
|
|
Pet |
|
Garden |
|
Corporate |
|
Total |
|||||||
|
|
(in thousands) |
|||||||||||||
Net income attributable to Central Garden & Pet Company |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
142,141 |
|
|
Interest expense, net |
|
|
— |
|
|
— |
|
|
— |
|
|
|
31,396 |
|
|
Other income |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(1,047 |
) |
|
Income tax expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
43,733 |
|
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,572 |
|
|
Income (loss) from operations |
|
$ |
189,115 |
|
$ |
110,699 |
|
$ |
(82,019 |
) |
|
$ |
217,795 |
|
|
Depreciation & amortization |
|
|
32,901 |
|
|
33,028 |
|
|
2,140 |
|
|
|
68,069 |
|
|
Noncash stock-based compensation |
|
|
— |
|
|
— |
|
|
15,138 |
|
|
|
15,138 |
|
|
Facility closures & business exit |
(1) (2) |
|
— |
|
|
16,385 |
|
|
— |
|
|
|
16,385 |
|
|
Adjusted EBITDA |
|
$ |
222,016 |
|
$ |
160,112 |
|
$ |
(64,741 |
) |
|
$ |
317,387 |
|
Adjusted EBITDA Reconciliation |
|
GAAP to Non-GAAP Reconciliation |
|||||||||||||
|
|
Nine Months Ended June 24, 2023 |
|||||||||||||
|
|
Pet |
|
Garden |
|
Corporate |
|
Total |
|||||||
|
|
(in thousands) |
|||||||||||||
Net income attributable to Central Garden & Pet Company |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
122,808 |
|
|
Interest expense, net |
|
|
— |
|
|
— |
|
|
— |
|
|
|
41,600 |
|
|
Other income |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(3,147 |
) |
|
Income tax expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
39,446 |
|
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
|
570 |
|
|
Income (loss) from operations |
|
$ |
154,779 |
|
$ |
126,887 |
|
$ |
(80,389 |
) |
|
$ |
201,277 |
|
|
Depreciation & amortization |
|
|
30,647 |
|
|
32,483 |
|
|
2,374 |
|
|
|
65,504 |
|
|
Noncash stock-based compensation |
|
|
— |
|
|
— |
|
|
20,632 |
|
|
|
20,632 |
|
|
Facility closure |
(3) |
|
13,921 |
|
|
— |
|
|
— |
|
|
|
13,921 |
|
|
Adjusted EBITDA |
|
$ |
199,347 |
|
$ |
159,370 |
|
$ |
(57,383 |
) |
|
$ |
301,334 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240807439810/en/
Investor/Media Contact
Friederike Edelmann
VP, Investor Relations & Corporate Sustainability
(925) 412-6726
fedelmann@central.com
Source: Central Garden & Pet Company
FAQ
What were Central Garden & Pet's (CENTA) Q3 fiscal 2024 earnings results?
How did Central Garden & Pet's (CENTA) net sales perform in Q3 fiscal 2024?
What is Central Garden & Pet's (CENTA) outlook for fiscal 2024?