Central Garden & Pet Company · NASDAQ:CENT
Central Garden & Pet — Q3 2024 Earnings Presentation
23 slides from Central Garden & Pet's earnings presentation, Aug 7, 2024
Slide 1: Q3 FY2024 Investor Presentation
Q3 FY2024 Investor Presentation 8.7.2024
Slide 2: Business & Industry Update; Financials and Outlook; Q&A
Business & Industry Update Beth Springer, Interim CEO Q3 FY24 Financials, FY24 Outlook Niko Lahanas, CFO Management Q&A Beth Springer, Niko Lahanas, J.D. Walker, John Hanson Q3 FY24 Investor Presentation 2
Slide 3: Forward-looking Statements
Forward-looking Statements This presentation includes “forward-looking statements.” Forward-looking statements include statements concerning our plans, objectives, goals, strategies, fiscal 2024 earnings forecast, anticipated grass seed inventory write-down, capital expenditures, plans or intentions
Slide 4: Beth Springer, Interim CEO
Beth Springer Interim CEO Q3 FY24 Investor Presentation 4
Slide 5: Three Key Themes
Three Key Themes 1 2 3 Delivered Solid Advanced Cost & Maintaining Non-GAAP EPS Third Quarter Earnings Simplicity Program Guidance of $2.00 or better – anticipate $15-20 million write- – expanded gross margin down in grass seed inventory in Q4 – initiated exit of pottery – delivered GAAP EPS of $1.1
Slide 6: Niko Lahanas, CFO
Niko Lahanas CFO Q3 FY24 Investor Presentation 6
Slide 7: Delivered Solid FY24 Q3 Earnings against Record FY23 Q3
Delivered Solid FY24 Q3 Earnings against Record FY23 Q3 Net Sales Gross Margin Operating Income GAAP EPS (in $ millions) (as a percentage (in $ millions) (in $) of Net Sales) (3)% 70bps (6)% $(0.06) Q3 FY24 Investor Presentation 7
Slide 8: Delivered Solid FY24 Q3 Non-GAAP Results
Delivered Solid FY24 Q3 Non-GAAP Results Net Sales Non-GAAP Non-GAAP Non-GAAP (in $ millions) Gross Margin Operating Income EPS (as a percentage (in $ millions) (in $) of Net Sales) (3)% 80bps (7)% $(0.08) Q3 FY24 Investor Presentation 8
Slide 9: FY24 Q3 Pet Segment Performance
FY24 Q3 Pet Segment Performance Tailwinds & Successes Headwinds & Challenges • Net sales of $508 million • Softer new pet adoptions • Brands outperformed private label • Macroeconomic pressures • Held or grew share in Flea & Tick, Small Animal, Aquatics, and Wild Bird impacting consumer • eCommerce
Slide 10: Recent Pet Innovation
Recent Pet Innovation Q3 FY24 Investor Presentation 10
Slide 11: FY24 Q3 Garden Segment Performance
FY24 Q3 Garden Segment Performance Tailwinds & Successes Headwinds & Challenges • Net sales of $488 million • Unfavorable weather negatively • Household penetration and buy rates impacted sales across garden remained above pre-COVID levels categories, in particular live plants • Grew eCommerce sales
Slide 12: Improved Cash & Liquidity
Improved Cash & Liquidity Adj. EBITDA Cash & Cash Long-Term Total Leverage(1) (in $ millions) Equivalents Debt (in $ millions) (in $ millions) (6)% $237 Q3 FY24 Investor Presentation (1) Calculated as Indebtedness / Adj. EBITDA as defined by the Company's ABL credit agreement 12
Slide 13: Multi-year Journey to Reduce Cost and Simplify our Business
Multi-year Journey to Reduce Cost and Simplify our Business PRINCIPLES FOCUS AREAS OUTCOMES Significantly reduced complexity: Procurement fewer SKUs, fewer plants, fewer Simplify our business, focus distribution centers our portfolio and supply chain Manufacturing Improve our efficiency Lower COGS t
Slide 14: Recent Examples of our Cost and Simplicity Program in Action
Recent Examples of our Cost and Simplicity Program in Action Manufacturing Logistics Portfolio • Closed fertilizer manufacturing • Closed live goods distribution facility Center • Initiated exit of remaining pottery • Opened research locations to • Started shipping out of new business reduce relianc
Slide 15: FY24 Outlook
Challenging external environment FY24 Outlook • Continued volatile weather • Uncertainty about retailer inventory • Value-seeking consumers Strong fundamentals of Central and our industries • Favorable consumer trends support long-term growth in Pet and Garden • Central remains strong, well capitali
Slide 16: Question & Answer Session
Question & Answer Session Please reach out to us with any comments or questions. IR@Central.com (925) 412-6726
Slide 17: Appendix
Appendix IF CENTRAL GARDEN & PET
Slide 18: Notes & Disclosures
Notes & Disclosures 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 o
Slide 19: Notes & Disclosures
Notes & Disclosures 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 in
Slide 20: GAAP to Non-GAAP Reconciliation for the Fiscal Quarter Ended
GAAP to Non-GAAP Reconciliation for the Fiscal Quarter Ended (in millions) Organic Pet Segment Net Sales Reconciliation Three Months Ended June 29, 2024 Net sales Effect of acquisitions & Net sales (GAAP) divestitures on net sales organic Q3 FY 24 $ 508.0 $ 15.8 $ 492.2 Q3 FY 23 503.3 — 503.3 $ incr
Slide 21: GAAP to Non-GAAP Reconciliation for the Fiscal Quarter Ended
GAAP to Non-GAAP Reconciliation for the Fiscal Quarter Ended (in thousands, except for per share amounts) Net Income & Diluted Net Income Per Share Reconciliation June 29, 2024 June 24, 2023 GAAP net income attributable to Central Garden & Pet Company $ 79,724 $ 83,126 Facility closures & business e
Slide 22: GAAP to Non-GAAP Reconciliation for the Fiscal Quarter Ended
GAAP to Non-GAAP Reconciliation for the Fiscal Quarter Ended (in thousands) Operating Income Reconciliation June 29, 2024 Facility Closure & GAAP Business Exit (1)(2) Non-GAAP Net sales $ 996,348 $ — $ 996,348 Cost of goods sold and occupancy 679,290 8,613 670,677 Gross profit $ 317,058 $ (8,613) $
Slide 23: GAAP to Non-GAAP Reconciliation for the Fiscal Quarter Ended
GAAP to Non-GAAP Reconciliation for the Fiscal Quarter Ended (in thousands) Adjusted EBITDA Reconciliation June 29, 2024 June 24, 2023 Net income attributable to Central Garden & Pet Company $ 79,724 $ 83,126 Interest expense, net 10,216 13,134 Other income (225) (853) Income tax expense 25,468 27,0
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