WALNUT CREEK, Calif.–(BUSINESS WIRE)–Central Garden & Pet Company (NASDAQ:CENT) (NASDAQ:CENTA) today announced results for its second quarter ended March 28, 2009.
The Company reported net sales of $476 million in the quarter, a decline of two percent compared to $485 million in the comparable fiscal 2008 period. The Company reported operating income of $57.2 million, an increase of 28 percent compared to $44.7 million in the year ago period. Net interest expense was $5.5 million compared to $9.5 million a year ago. Net income for the quarter was $33.0 million, or $0.47 per fully diluted share compared to net income of $20.4 million or $0.28 per fully diluted share in the year ago period. Branded products sales decreased one percent to $409 million. Sales of other manufacturers’ products declined five percent to $67 million. Depreciation and amortization was $7.2 million compared to $8.1 million in the year ago period. The quarter-ending leverage ratio was 3.6x.
“We made progress in the quarter against our three principal operating objectives as we strive to return to ‘on profile’ performance,” noted William Brown, Chairman and Chief Executive Officer of Central Garden & Pet Company. “We reduced our investment in working capital by $68 million compared to last year. We lowered selling, general and administrative expenses by $12 million and improved gross margins 70 basis points. We believe we are strengthening our foundation to support future growth.”
Fiscal second quarter net sales for the Garden Products segment were $248 million, a decrease of two percent from $254 million in the comparable fiscal 2008 period. Operating income for Garden Products was $36.7 million compared to $26.1 million in the year ago period. Branded products sales declined $2 million to $219 million. Sales of other manufacturers’ products declined $4 million to $29 million. Fiscal second quarter net sales for the Pet Products segment were $229 million, a decline of one percent compared to the fiscal 2008 period. Operating income for the Pet Products segment was $31.9 million, compared to $28.2 million in the year ago period. Branded products sales were $190 million, a decrease of $3 million compared to last year. Sales of other manufacturers’ products were $38 million, unchanged compared to last year.
For the six months ending March 28, 2009 of fiscal 2009, the Company reported net sales of $769 million compared to $798 million in the comparable 2008 period, a decline of four percent. Operating income for the period was $54.5 million compared to an operating loss of $346 million in the year ago period. Net income for the six months ending March 28, 2009 was $26.8 million compared to a net loss of $269 million in the comparable 2008 period. Earnings per diluted share were $0.38 compared to loss of $3.77 per share per fully diluted share in the year ago period. Included in the year-to-date results for fiscal 2008 was a non-cash, pre-tax charge of $400 million, or $290 million net of taxes, related to goodwill impairment as prescribed by SFAS No.142 “Goodwill and Other Intangible Assets.” Also included in the year-to-date results for fiscal 2008 was a pre-tax gain of $11.1 million, or $6.8 million net of taxes, related to the sale of properties and legal settlement proceeds. Adjusted net income and earnings per share in the first six months of fiscal 2008, excluding the impact of the impairment, the gain on sale of properties and legal settlement proceeds was $14.5 million, or $0.20. Branded product sales declined four percent and sales of other manufacturers’ products also declined four percent. Depreciation and amortization for the first six month period was $14.7 million compared to $16.1 million in the year ago period.