Central Garden & Pet(CENT) - 2025 Q1 - Quarterly Report

Financial Performance - Total net sales for the three months ended December 28, 2024, were $656.4 million, an increase from$634.5 million for the same period in 2023, representing a growth of approximately 3.4%[93] - Operating income for the total company was $28.0 million for the three months ended December 28, 2024, compared to$8.4 million in the prior year, indicating a significant improvement[93] - Net income attributable to Central Garden & Pet Company was $14.0 million for the three months ended December 28, 2024, compared to$430,000 for the same period in 2023, reflecting a substantial increase[93] - Basic earnings per share (EPS) for the three months ended December 28, 2024, was $0.22, compared to$0.01 for the same period in 2023[89] - Total revenue for the three months ended December 28, 2024, was $656.4 million, an increase from$634.5 million for the same period in 2023, representing a growth of approximately 3.0%[95] Segment Performance - The Pet segment generated net sales of $427.5 million, up from$409.2 million, while the Garden segment saw sales increase from $225.3 million to$229.0 million[93] - The Pet Segment generated $427.5 million in revenue for the three months ended December 28, 2024, compared to$409.2 million in the same period of 2023, reflecting a growth of about 4.0%[95] - The Garden Segment reported revenues of $228.9 million for the three months ended December 28, 2024, up from$225.3 million in the same period of 2023, indicating a growth of approximately 1.6%[95] Cash and Liquidity - The company reported cash and cash equivalents of $618,020 thousand as of December 28, 2024, compared to$341,419 thousand on December 30, 2023, indicating a significant increase of 81.0%[36] - The company’s total cash, cash equivalents, and restricted cash reached $632,669 thousand as of December 28, 2024, compared to$355,619 thousand on December 30, 2023, an increase of 77.7%[36] - Restricted cash amounted to $14,649 thousand as of December 28, 2024, slightly up from$14,200 thousand on December 30, 2023[36] - As of December 28, 2024, the company had no borrowings outstanding under the Credit Facility, with a total net availability of approximately $50 million[81] - The company maintained compliance with all financial covenants under the Credit Facility as of December 28, 2024[83] Debt and Financing - The Company has long-term debt with a net carrying value of$1,190.1 million as of December 28, 2024, slightly increasing from $1,188.2 million as of December 30, 2023[66] - The Company issued$400 million of 5.125% senior notes due April 2031, with proceeds used to repay outstanding borrowings and for general corporate purposes[68] - The Company incurred approximately $6 million in debt issuance costs related to the 2031 Notes, which are being amortized over the term of the notes[69] - The company incurred approximately$2.4 million in debt issuance costs related to the Credit Facility, which are being amortized over the term of the facility[82] Assets and Inventory - Total assets as of December 28, 2024, were $3.54 billion, an increase from$3.42 billion in the prior year[93] - Total inventories, net, decreased to $815,782 thousand as of December 28, 2024, from$948,398 thousand on December 30, 2023, reflecting a decline of 14.0%[57] - The company reported finished goods inventory of $403,268 thousand as of December 28, 2024, down from$468,547 thousand on December 30, 2023, a decrease of 13.9%[58] - The Company recorded total other intangible assets, net of $465.9 million as of December 28, 2024, compared to$489.1 million as of December 30, 2023, reflecting a decrease of approximately 4.9%[62] Acquisitions and Goodwill - The company acquired TDBBS, LLC for approximately $60 million, enhancing its portfolio in the pet product segment and increasing eCommerce capabilities[54] - The company’s goodwill from the TDBBS acquisition was recorded at$4,925 thousand, contributing to the overall net assets acquired[56] - The Company evaluated goodwill for impairment and determined that no impairment testing was necessary for the three months ended December 28, 2024[63] - The Company has recorded a goodwill impairment charge for the three months ended December 28, 2024, and December 30, 2023, but specific amounts were not disclosed[5] Risk Management and Compliance - The company has not experienced any losses from cash accounts exceeding federally insured limits, indicating effective credit risk management[36] - The Company has not experienced any product recalls that would materially affect its financial position or operations[98] - Management believes that ongoing legal proceedings will not have a material impact on the Company's consolidated financial statements[97] - The Company continues to pursue defenses in ongoing litigation and believes it will prevail on the merits regarding the head start damages issue[97] - The Company has not identified any material changes in exposure to market risk since the last annual report[154] - The Company is actively monitoring product liability issues but has not faced any significant challenges that would impact financial results[98] Internal Controls - There have been no changes in internal control over financial reporting that materially affected the Company during the first quarter of 2025[155] - The Company’s disclosure controls and procedures were deemed effective as of December 28, 2024[154]