Central Garden & Pet Announces Q1 Fiscal 2024 Financial Results

Fiscal 2024 Q1 web gross sales of $635 million

Fiscal 2024 Q1 earnings per share of $0.01

Maintains outlook for fiscal 2024 non-GAAP EPS of $2.50 or higher

WALNUT CREEK, Calif., February 07, 2024–(BUSINESS WIRE)–Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) (“Central”), a market chief within the Pet and Garden industries, at this time introduced monetary outcomes for its fiscal 2024 first quarter ended December 30, 2023.

“The fiscal yr is off to a stable begin as we efficiently navigated the difficult exterior setting. We delivered earnings per share of $0.01 because of improved gross margin and early season shipments,” stated Beth Springer, Interim CEO of Central Garden & Pet. “Our outlook for the fiscal yr is unchanged, and we’re centered on executing our long-term Central to Home technique with excellence.”

Fiscal 2024 First Quarter Financial Results

Net gross sales had been $635 million in comparison with $628 million a yr in the past, a rise of 1%. Organic web gross sales elevated 1%.

Gross revenue was $179 million in comparison with $172 million within the prior yr. Gross margin improved 80 foundation factors to twenty-eight.2% in comparison with 27.4% pushed by cost administration and moderating inflation.

Operating revenue was $8 million in comparison with $0.4 million a yr in the past. Operating margin was 1.3% in comparison with 0.1%, a rise of 120 foundation factors pushed by larger gross margin and cost administration leading to decrease SG&A as a proportion of web gross sales.

Net curiosity expense was $10 million in comparison with $14 million a yr in the past pushed by larger money balances and rates of interest.

Net revenue was $0.4 million in comparison with web lack of $8 million a yr in the past. Earnings per share had been $0.01 in comparison with loss per share of $0.16, a rise of $0.17 cents. Adjusted EBITDA was $37 million in comparison with $29 million a yr in the past.

The efficient tax charge was 287.7% in comparison with 24.2% within the prior yr as a consequence of a profit from a discrete merchandise associated to inventory compensation within the present yr quarter.

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Pet Segment Fiscal 2024 First Quarter Results

Net gross sales for the Pet phase had been $409 million in comparison with $416 million within the prior yr, a lower of two% as a consequence of decrease gross sales of sturdy pet merchandise. Organic web gross sales decreased 5% excluding the affect of the recent acquisition of TDBBS.

Pet phase working revenue was $43 million in comparison with $40 million a yr in the past, a rise of 10%. Operating margin was 10.6% in comparison with 9.5%, a rise of 110 foundation factors pushed by the optimistic outcomes of Central’s Cost and Simplicity program and decrease business spend. Pet phase adjusted EBITDA was $54 million in comparison with $50 million within the prior yr.

Garden Segment Fiscal 2024 First Quarter Results

Net gross sales for the Garden phase had been $225 million in comparison with $212 million a yr in the past, a rise of 6% pushed by early season shipments in Controls & Fertilizer, Grass, and Packet Seeds. Organic web gross sales elevated 11% excluding the affect of the sale of the unbiased backyard channel distribution business.

Garden phase working loss was $9 million in comparison with working lack of $11 million within the prior yr, an enchancment of 18%. Operating margin was (3.9)% in comparison with (5.1)%, an enchancment of 120 foundation level pushed by gross margin enchancment and favorable overhead absorption, partially offset by larger business spend. Garden phase adjusted EBITDA was $2 million in comparison with $0.02 million a yr in the past.

Additional Information

The money stability on the finish of the quarter was $341 million in comparison with $88 million a yr in the past, pushed by a discount in stock as a consequence of changing stock to money during the last 12 months. Cash utilized by operations through the quarter was $70 million in comparison with $63 million a yr in the past.

Total debt as of December 30, 2023, and December 24, 2022 was $1.2 billion. The leverage ratio, as outlined in Central’s credit score settlement, on the finish of the primary quarter was 3.0x in comparison with 3.1x on the finish of the prior yr quarter. Central repurchased 39,576 shares or $1.4 million of its inventory through the quarter.

Fiscal 2024 Guidance

Central continues to anticipate fiscal 2024 non-GAAP EPS to be $2.50 or higher earlier than the affect of the inventory dividend taking place on February 8, 2024.

This outlook displays an setting of macroeconomic and geopolitical uncertainty with deflationary stress in a few of Central’s commodity businesses and unsure shopper demand and retailer dynamics. It contains modest pricing actions to assist mitigate inflationary headwinds. This outlook excludes the affect of any acquisitions, divestitures or restructuring actions which will happen throughout fiscal 2024, together with any initiatives beneath the Cost and Simplicity program. It additionally excludes the affect from the recent TDBBS acquisition. Central expects fiscal 2024 capital spending to be roughly $70 million.

Stock Dividend

On December 11, 2023, Central’s board of administrators declared a inventory dividend within the type of one share of Central’s Class A Common Stock for each 4 excellent shares of Central’s Common Stock, Class A Common Stock and Class B Stock to boost liquidity in its Class A Common Stock. Dividend shares of Class A Common Stock shall be distributed on February 8, 2024 to stockholders of document on January 8, 2024. The Class A Common Stock is listed on the NASDAQ Global Select Market beneath the image “CENTA.”

Conference Call

Central’s senior administration will maintain a convention name at this time at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to debate its fiscal 2024 first quarter outcomes and supply a normal business update. The convention name and associated supplies could be accessed at http://ir.central.com.

Alternatively, to take heed to the decision by phone, dial (201) 689-8345 (home and worldwide) utilizing affirmation #13742862.

About Central Garden & Pet

Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ: CENTA) understands that home is central to life and has proudly nurtured blissful and wholesome houses for over 40 years. With fiscal 2023 web gross sales of $3.3 billion, Central is on a mission to guide the way forward for the Pet and Garden industries. The Company’s modern and trusted merchandise are devoted to serving to lawns develop greener, gardens bloom greater, pets reside more healthy and communities develop stronger. Central is home to a number one portfolio of greater than 65 high-quality manufacturers together with Amdro^®, Aqueon^®, Cadet^®, Farnam^®, Ferry-Morse^®, Four Paws^®, Kaytee^®, Ok&H^®, Nylabone^® and Pennington^®, robust manufacturing and distribution capabilities and a passionate, entrepreneurial progress tradition. Central relies in Walnut Creek, California and has 6,700 staff throughout North America and Europe. Visit www.central.com to be taught extra.

Safe Harbor Statement

“Safe Harbor” Statement beneath the Private Securities Litigation Reform Act of 1995: The statements contained on this launch which aren’t historic info, together with statements regarding cost inflation and deflation, evolving shopper demand and unfavorable retailer dynamics, anticipated pricing actions, productiveness initiatives and estimated capital spending, and earnings steerage for fiscal 2024, are forward-looking statements which might be topic to dangers and uncertainties that would trigger precise outcomes to vary materially from these set forth in or implied by forward-looking statements. All forward-looking statements are primarily based upon Central’s present expectations and numerous assumptions. There are plenty of dangers and uncertainties that would trigger our precise outcomes to vary materially from the forward-looking statements contained on this launch together with, however not restricted to, the next elements:

• excessive inflation and rates of interest, and different adversarial macro-economic situations;

• fluctuations in market costs for seeds and grains and different uncooked supplies;

• our incapacity to go by way of cost will increase in a well timed method;

• our skill to recruit and retain new members of our administration crew, together with a Chief Executive Officer, to assist our businesses and to rent and retain staff;

• fluctuations in power costs, gas and associated petrochemical prices;

• declines in shopper spending and elevated stock threat throughout financial downturns;

• reductions in demand for product classes that benefited from the COVID-19 pandemic;

• adversarial climate situations;

• the success of our Central to Home technique and our Cost and Simplicity program;

• dangers related to our acquisition technique, together with our skill to efficiently combine acquisitions and the affect of buy accounting on our monetary outcomes;

• materials weaknesses regarding the inner controls of just lately acquired corporations;

• seasonality and fluctuations in our working outcomes and money stream;

• provide shortages in pet birds, small animals and fish;

• dependence on a small variety of clients for a good portion of our business;

• consolidation tendencies within the retail business;

• dangers related to new product introductions, together with the chance that our new merchandise won’t produce adequate gross sales to recoup our funding;

• competitors in our industries;

• persevering with implementation of an enterprise useful resource planning info know-how system;

• potential environmental liabilities;

• dangers related to worldwide sourcing;

• impacts of tariffs or a commerce conflict;

• access to and cost of extra capital;

• potential goodwill or intangible asset impairment;

• our skill to remediate materials weaknesses in our inner management over monetary reporting;

• our dependence upon our key executives;

• our skill to guard our emblems and different proprietary rights;

• litigation and product legal responsibility claims;

• regulatory points;

• the affect of product recollects;

• potential prices and dangers related to precise or potential cyberattacks;

• potential dilution from issuance of approved shares;

• the voting energy related to our Class B inventory; and

• the affect of latest accounting laws and the likelihood our efficient tax charge will enhance because of future modifications within the company tax charge or different tax legislation modifications.

These dangers and others are described in Central’s Securities and Exchange Commission filings. Central undertakes no obligation to publicly update these forward-looking statements to mirror new info, subsequent occasions or in any other case. Central has not filed its Form 10-Q for the fiscal quarter ended December 30, 2023, so all monetary outcomes are preliminary and topic to vary.

Use of Non-GAAP Financial Measures

We report our monetary leads to accordance with GAAP. However, to complement the monetary outcomes ready in accordance with GAAP, we use non-GAAP monetary measures together with adjusted EBITDA and natural gross sales. Management believes these non-GAAP monetary measures that exclude the affect of particular gadgets (described under) could also be helpful to buyers of their evaluation of our ongoing working efficiency and supply extra significant comparisons between present outcomes and leads to prior working durations.

Adjusted EBITDA is outlined by us as revenue earlier than revenue tax, web different expense, web curiosity expense and depreciation and amortization and stock-based compensation expense (or working revenue plus depreciation and amortization expense and stock-based compensation expense). We current adjusted EBITDA as a result of we imagine that adjusted EBITDA is a helpful supplemental measure in evaluating the money flows and efficiency of our business and offers higher transparency into our outcomes of operations. Adjusted EBITDA is utilized by our administration to carry out such evaluations. Adjusted EBITDA shouldn’t be thought of in isolation or as an alternative to money stream from operations, revenue from operations or different revenue assertion measures ready in accordance with GAAP. We imagine that adjusted EBITDA is often utilized by buyers, securities analysts and different events of their analysis of corporations, lots of which current adjusted EBITDA when reporting their outcomes. Other corporations might calculate adjusted EBITDA in a different way and it will not be comparable.

The reconciliations of those non-GAAP measures to probably the most straight comparable monetary measures calculated and offered in accordance with GAAP are proven within the tables under.

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Contacts

Investor Relations Contact
Friederike Edelmann
VP, Investor Relations & Corporate Sustainability
(925) 412-6726
[email protected]