Central Garden & Pet Company · NASDAQ:CENT
Central Garden & Pet — Q4 2023 Earnings Presentation
19 slides from Central Garden & Pet's earnings presentation, Nov 20, 2023
Slide 1: Q4 & FY 2023 Investor Presentation
Q4 & FY 2023 Investor Presentation 11.20.2023
Slide 2: Key Messages
Key Messages Beth Springer, Interim CEO and Lead Director Q4 & FY23 Financials, FY24 Outlook Niko Lahanas, CFO Management Q&A Beth Springer, Niko Lahanas, J.D. Walker, John Hanson Q4 and FY23 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, future events, future revenues or performance, capital expenditures, plans or intentions relating to acquisitions, ou
Slide 4: Three Key Takeaways
Three Key Takeaways 1 2 3 FY23 Achievements in a Progressed Cost and FY24 Non-GAAP EPS Challenging Environment Simplicity Program of $2.50 or Better • Delivered fiscal '23 non-GAAP • Closed dog bed facility in Athens, TX • Challenging external EPS within revised guidance related to exit of low margi
Slide 5: Beth Springer and Niko Lahanas
Beth Springer Niko Lahanas Interim CEO and Lead Director CFO Q4 and FY23 Investor Presentation 5
Slide 6: FY23 Financial Results
FY23 Financial Results Net Sales Non-GAAP Non-GAAP GAAP EPS Non-GAAP EPS (in $ millions) Gross Margin Operating Income (in $) (in $) (as a percentage of Net Sales) (in $ millions) (1)% (80)bps (13)% $(0.45) $(0.21) Q4 and FY23 Investor Presentation 6
Slide 7: Pet Segment: $1.9B Net Sales
Pet Segment: $1.9B Net Sales Tailwinds & Successes Headwinds & Challenges • Benefit of extra week • Pet ownership has dipped in recent periods, • Strong consumer demand in consumables except for reptile • Record quarter for Dog & Cat • In line with softening pet adoptions, durables • Market share ga
Slide 8: Garden Segment: $1.4B Net Sales
Garden Segment: $1.4B Net Sales Tailwind & Successes Headwinds & Challenges • Increased market share in two anchor • Softness across most of Garden portfolio categories: Grass Seed and Wild Bird • Retailers continue to manage inventory closely, • eCommerce represents 6% of Garden sales shifting to j
Slide 9: Improved Cash & Liquidity
Improved Cash & Liquidity Adj. EBITDA Cash & Cash Long-Term Total Leverage(1) (in $ millions) Equivalents Debt (in $ millions) (in $ millions) (7)% +175% +/- 0% Q4 and FY23 Investor Presentation (1) Calculated as Indebtedness / Adj. EBITDA as defined by the Company's ABL credit agreement 9
Slide 10: 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 across Lower
Slide 11: Recent Examples of our Cost and Simplicity Program in Action
Recent Examples of our Cost and Simplicity Program in Action Manufacturing Logistics Portfolio Optimization • Continuous improvement • Closing of distribution facilities in • Closed a distribution facility in mindset by measuring cost and Kansas and Illinois Corsicana, TX, and a manufacturing produc
Slide 12: FY24 Outlook
FY24 Outlook External environment remains challenging • Unfavorable retailer inventory dynamics and changing consumer spending • Existing higher value inventory puts pressure on our margins Belief in long-term health of our business • Favorable trends support long-term growth in Pet and Garden • Cen
Slide 13: Question & Answer Session
Question & Answer Session Please reach out to us with any comments or questions. IR@Central.com (925) 412-6726
Slide 14: Appendix
Appendix IF CENTRAL GARDEN & PET
Slide 15: 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 adjusted EBITDA, non-GAAP operating income, and non-GAAP net inc
Slide 16: Notes & Disclosures
Notes & Disclosures Use of Non-GAAP Financial Measures Non-GAAP financial measures reflect adjustments based on the following items: • Facility closures: we exclude the impact of the closure of facilities as they represent infrequent transactions that occur in limited circumstances that impact the c
Slide 17: GAAP to Non-GAAP Reconciliation for the Fiscal Year Ended
GAAP to Non-GAAP Reconciliation for the Fiscal Year Ended (in thousands, except for per share amounts) Net Income & Diluted Net Income Per Share Reconciliation September 30, 2023 September 24, 2022 GAAP net income attributable to Central Garden & Pet Company $ 125,643 $ 152,152 Pet facilities closur
Slide 18: GAAP to Non-GAAP Reconciliation: Adjusted EBITDA
GAAP to Non-GAAP Reconciliation for the Fiscal Year Ended (in thousands) Adjusted EBITDA Reconciliation September 30, 2023 September 24, 2022 Net income attributable to Central Garden & Pet Company $ 125,643 $ 152,152 Interest expense, net 49,663 57,534 Other (income) expense (1,462) 3,596 Income ta
Slide 19: GAAP to Non-GAAP Reconciliation for the Fiscal Three Months Ended
GAAP to Non-GAAP Reconciliation for the Fiscal Three Months Ended (in thousands) Pet Segment Operating Income Reconciliation The Three Months Ended September 30, 2023 September 24, 2022 GAAP operating income $ 43,225 $ 40,412 Facility closure and intangible asset impairment (2)(3) 4,536 — Non-GAAP o
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