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Exhibit 99.1

FOR IMMEDIATE RELEASE

CENTRAL GARDEN & PET COMPANY ANNOUNCES FISCAL 2011 THIRD QUARTER RESULTS

Third quarter sales increase to $484.3 million; Diluted EPS $0.31 per share

WALNUT CREEK, CALIFORNIA, August 3, 2011 – Central Garden & Pet Company (NASDAQ: CENT) (NASDAQ:CENTA), a leading innovator, marketer and producer of quality branded products for the lawn and garden and pet supplies markets, today reported financial results for its fiscal third quarter ended June 25, 2011.

The Company announced third quarter net sales of $484.3 million, a 4 percent increase over the comparable fiscal 2010 period. The Company’s sales gains were largely driven by the Garden Products segment which reported sales growth of 6 percent for the quarter, and an 11 percent sales increase for the nine-month period ended June 25, 2011. Third quarter operating income was $36.6 million, compared to operating income of $52.6 million in the comparable 2010 period, as the continued rise in raw material costs, change in product mix, unfavorable weather, and the Company’s continued strategic investments in marketing and brand building activities impacted results. Net interest expense was $9.8 million for the quarter ended June 25, 2011 consistent with the prior year. Net income for the quarter totaled $17.1 million, or $0.31 per fully diluted share, compared to net income of $25.9 million, or $0.40 per fully diluted share, in the year ago period.

“We continued to drive solid revenue growth in the third quarter despite a difficult environment” said Bill Brown, Chairman and Chief Executive Officer. “However, the continued significant escalation in raw material input costs, together with extreme weather conditions that suppressed our chemical and controls business and altered our product mix, negatively impacted our gross margin and bottom line results. We have implemented price increases to recover some of the input cost increases, but there is a lag in retailer implementation that impacted the quarter


and will continue to cause margin pressure. Our operating income was further reduced by our long-term commitment to strategic investments in marketing and brand building. Although adversely impacted by significant commodity price increases and extreme weather during the quarter, our business remains fundamentally sound. We remain focused on bringing innovative products to the marketplace, driving operational efficiency throughout our operation, and delivering top-line and bottom-line growth over the long-term.”

At June 25, 2011, the Company’s cash and short term investments balance was $26.6 million. Depreciation and amortization expense was $7.1 million in the third quarter of 2011, consistent with the prior year. On June 9, 2011, the Company announced the amendment of its $275 million five-year senior secured revolving credit facility (the “Credit Facility”). Under the modified terms, the Credit Facility’s borrowing capacity was increased by $100 million to $375 million and the maturity date was extended by approximately one year to June 2016. The amended Credit Facility bears lower interest rates and commitment fees and requires less interest coverage. Total debt at June 25, 2011 was $450.5 million compared to $400.3 million at the end of the third fiscal quarter of 2010. The quarter ending total leverage ratio, as defined in the Company’s credit agreement, was 3.4x.

During the third quarter, the Company completed a $100 million share repurchase program approved by the Board of Directors in July 2010 and began a new $100 million share repurchase program approved by the Board of Directors and announced in June 2011. The Company repurchased $30.1 million of its common stock during the third quarter.

Third Quarter and Year-To-Date Details

Third quarter net sales for the Garden Products segment increased $14.2 million over the prior year, or 6 percent, to $257.0 million. The Garden Products segment’s branded product sales increased $20.8 million, or 10 percent, to $221.7 million. Sales of other manufacturers’ products were $35.3 million, a decrease of $6.6 million compared to the third quarter of 2010. The Garden Product segment’s operating income was $18.0 million compared to operating income of $30.1 million in the prior year.

Third quarter net sales for the Pet Products segment increased $4.6 million over the prior year, or 2 percent, to $227.3 million. The Pet Products segment’s branded product sales increased $4.4 million, or 2 percent, to $186.0 million. Sales of other manufacturers’ products were $41.3 million, in-line with the third quarter of 2010. The Pet Products segment’s operating income was $27.2 million compared to operating income of $32.6 million in the prior year.


The Company’s branded product sales increased $25.2 million, or 7 percent, to $407.7 million in the third quarter of 2011. Sales of other manufacturers’ products were $76.6 million, a decrease of $6.4 million compared to the year ago period.

For the nine months ending June 25, 2011, the Company reported net sales of $1.25 billion, an increase of 6 percent, compared to $1.18 billion in the comparable 2010 period. Branded products sales equaled $1.06 billion, up 9 percent over the comparable 2010 period. Sales of other manufacturers’ products decreased 5 percent to $196.4 million. Operating income for the period was $89.7 million compared to $113.7 million in the prior year. Net income for the nine months ended June 25, 2011 was $39.3 million compared to $54.6 million in the comparable 2010 period. Earnings per diluted share were $0.68 compared to $0.83 per share per fully diluted share in the year ago period. Depreciation and amortization for the nine month period was $21.3 million compared to $21.7 million in the comparable 2010 period.

Conference Call

The Company will host a conference call today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss its third quarter results. The conference call will be accessible via the internet through Central’s website, http://www.central.com.

To access the webcast link, log on to Central’s website and locate the link in the investor relations section of the website. Alternatively, to listen to the call by telephone, dial 888-679-8034 (domestic) or 617-213-4847 (international) and enter passcode 74753751. A replay of the call will be available for three weeks by dialing 888-286-8010 (domestic) and 617-801-6888 (international) and entering passcode 17980907.

About Central Garden & Pet

Central Garden & Pet Company is a leading innovator, marketer and producer of quality branded products for the lawn & garden and pet supplies markets. Committed to new product innovation, our products are sold to specialty independent and mass retailers. Participating categories in Lawn & Garden include: Grass seed and the brands PENNINGTON®, SMART SEEDTM and THE REBELS™; wild bird feed and the brand PENNINGTON®; weed and insect control and the brands AMDRO®, SEVIN®, IRONITE® and OVER-N-OUT®; and decorative outdoor patio products and the brands NORCAL®, NEW ENGLAND POTTERY® and MATTHEWS FOUR SEASONS™. We also provide a host of other regional and application-specific garden brands and supplies. Participating categories in Pet include: Animal health and


the brands ADAMS™ and ZODIAC®; aquatics and reptile and the brands OCEANIC®, AQUEON™ and ZILLA™; bird & small animal and the brands KAYTEE®, SUPER PET® and CRITTER TRAIL®; dog & cat and the brands TFH®, NYLABONE®, FOUR PAWS®, PINNACLE® and AVODERM®; and equine and the brands FARNAM®, BRONCO® and SUPER MASK®. We also provide a host of other application-specific Pet brands and supplies. Central Garden & Pet Company is based in Walnut Creek, California, and has approximately 4,300 employees, primarily in North America and Europe. For additional information on Central Garden & Pet Company, including access to the Company’s SEC filings, please visit the Company’s website at www.central.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts, including the potential for price increases to cover rising input costs and top-line and bottom-line growth over the long-term, 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. These risks are described in the Central’s Annual Report on Form 10-K, filed November 19, 2010, and Central’s Quarterly Report on Form 10-Q, to be filed August 4, 2011, and other Securities and Exchange Commission filings. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.

Contact: Steve Zenker

Investor Relations

Central Garden & Pet Company

925.948.3657

# # #

(Tables Follow)


Central Garden & Pet Company

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)

 

     Three Months Ended     Nine Months Ended  
     June 26,
2010
    June 25,
2011
    June 26,
2010
    June 25,
2011
 

Net sales

   $ 465,486      $ 484,303      $ 1,176,658      $ 1,251,746   

Cost of goods sold and occupancy

     302,712        334,914        764,926        856,031   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     162,774        149,389        411,732        395,715   

Selling, general and administrative expenses

     110,134        112,795        298,049        305,974   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     52,640        36,594        113,683        89,741   

Interest expense

     (9,797     (9,948     (24,555     (28,330

Interest income

     1        140        12        333   

Other income

     42        318        428        116   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes and noncontrolling interest

     42,886        27,104        89,568        61,860   

Income taxes

     15,860        9,879        33,026        21,952   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income including noncontrolling interest

     27,026        17,225        56,542        39,908   

Net income attributable to noncontrolling interest

     1,153        144        1,943        653   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Central Garden & Pet Company

   $ 25,873      $ 17,081      $ 54,599      $ 39,255   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share attributable to Central Garden & Pet Company:

        

Basic

   $ 0.41      $ 0.32      $ 0.84      $ 0.68   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.40      $ 0.31      $ 0.83      $ 0.68   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in the computation of net income per share:

        

Basic

     63,810        54,020        64,879        57,635   

Diluted

     64,606        54,498        65,716        58,115   


Central Garden & Pet Company

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 

ASSETS    June 26,
2010
     June 25,
2011
     (See Note 1)
September 25,
2010
 

Current assets:

        

Cash and cash equivalents

   $ 91,623       $ 11,233       $ 91,460   

Short term investments

     —           15,320         15,320   

Accounts receivable—net

     223,845         257,418         192,422   

Inventories

     306,118         343,788         285,964   

Prepaid expenses and other

     30,643         40,095         42,733   
  

 

 

    

 

 

    

 

 

 

Total current assets

     652,229         667,854         627,899   

Land, buildings, improvements and equipment—net

     162,352         171,187         165,281   

Goodwill

     208,630         209,348         207,319   

Other intangible assets—net

     99,828         85,705         86,798   

Deferred income taxes and other assets

     60,668         21,638         43,587   
  

 

 

    

 

 

    

 

 

 

Total

   $ 1,183,707       $ 1,155,732       $ 1,130,884   
  

 

 

    

 

 

    

 

 

 
LIABILITIES AND EQUITY         

Current liabilities:

        

Accounts payable

   $ 119,869       $ 115,380       $ 112,611   

Accrued expenses

     101,312         92,678         81,418   

Current portion of long-term debt

     201         198         165   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     221,382         208,256         194,194   

Long-term debt

     400,138         450,266         400,106   

Other long-term obligations

     4,223         4,104         4,441   

Total Central Garden & Pet Company shareholders’ equity

     556,537         492,506         530,696   

Noncontrolling interest

     1,427         600         1,447   
  

 

 

    

 

 

    

 

 

 

Total equity

     557,964         493,106         532,143   
  

 

 

    

 

 

    

 

 

 

Total

   $ 1,183,707       $ 1,155,732       $ 1,130,884