Central Garden & Pet Company · NASDAQ:CENT
Central Garden & Pet — Q3 2023 Earnings Presentation
21 slides from Central Garden & Pet's earnings presentation, Aug 2, 2023
Slide 1: Q3 FY2023 Investor Presentation
Q3 FY2023 Investor Presentation 8.2.2023
Slide 2: Business & Industry Update; Financials and Outlook; Q&A
Business & Industry Update Tim Cofer, CEO Q3 FY23 Financials, FY23 Outlook Niko Lahanas, CFO Management Q&A Tim Cofer, Niko Lahanas, J.D. Walker, John Hanson Q3 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: IFS
IFS CENTRAL GARDEN & PE
Slide 5: Three Key Messages
Three Key Messages 1 2 3 Delivered Record Advanced Cost & Raising Q3 Performance Simplicity Program Full-year Outlook • Delivered growth on all key measures: Net sales, gross margin, • Multi-year journey to simplify • Fiscal 2023 fourth quarter is off operating income, and EPS business, improve effi
Slide 6: Pet: $503 million Q3 FY23 Net Sales
Pet: $503 million Q3 FY23 Net Sales Tailwinds & Successes Headwinds & Challenges • Solid growth in consumables, incl. Dog & Cat, Bird, Small Animal and Equine • Share growth across most pet categories • Continued downward pressure on durable pet supplies • Branded products outperformed private label
Slide 7: Garden: $520 million Q3 FY23 Net Sales
Garden: $520 million Q3 FY23 Net Sales Tailwinds & Successes Headwinds & Challenges • Strong performance in May and early June • Retailers continue to reduce their • Continued to grow market share in Wild inventory, shifting to just-in-time Bird, held share in Grass Seed and overall replenishment Ga
Slide 8: 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 Lower COGS through lower logistics
Slide 9: Two Examples of our Cost and Simplicity Program in Action
Two Examples of our Cost and Simplicity Program in Action Closure of Private Label Sale of Independent Garden Pet Bed Facility Distribution Business • Closure of manufacturing and distribution facility • Sold fragmented independent garden distribution in Athens, TX, on plan and on budget business to
Slide 10: IFS
IFS CENTRAL GARDEN & PE
Slide 11: Tim Cofer, CEO; Niko Lahanas, CFO
Tim Cofer Niko Lahanas CEO CFO Q3 FY23 Investor Presentation 11
Slide 12: FY23 Q3 Performance
FY23 Q3 Performance Non-GAAP Non-GAAP Net Sales Gross Margin Operating Income GAAP EPS Non-GAAP EPS (in $ millions) (as a percentage of Net Sales) (in $ millions) (in $) (in $) +1% +160bps +20% +$0.17 +$0.36 1,015 1,023 137 114 31.9% 30.3% 1.75 1.56 1.39 1.39 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22
Slide 13: IFS
IFS CENTRAL GARDEN & PE
Slide 14: Solid Financial Metrics
Solid Financial Metrics Cash & Cash Adjusted EBITDA Equivalents Long-Term Debt Total Leverage (1) (in $ millions) (in $ millions) (in $ millions) +17% +70% +0.1% 1,186 1,187 3.1 2.9 333 166 141 196 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 (1) Q3 FY23 Investor Presentation Calc
Slide 15: FY23 Outlook
Raising Outlook for FY23 Non-GAAP EPS of $2.55 or better FY23 Outlook • Record Q3 results • Early visibility into July builds confidence • Q4 is a small quarter, benefit of 53rd week Cost and Simplicity program to support long-term algorithm • Closed private label pet bed facility in Athens, TX • So
Slide 16: Q&A
Q&A Please reach out to us with any comments or questions: IR@Central.com (925) 412-6726 Q3 FY23 Investor Presentation 16
Slide 17: Appendix
Ix Append “ENT RAL c
Slide 18: Notes & Disclosures
Notes & Disclosures Use of Non-GAAP Financial Measures We report our financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, to supplement the financial results prepared in accordance with GAAP, we use non-GAAP financial measures including
Slide 19: GAAP to Non-GAAP Reconciliation: Net Income and EPS
GAAP to Non-GAAP Reconciliation for the Fiscal Three Months Ended (in thousands, except for per share amounts) Net Income & Diluted Net Income Per Share Reconciliation Three months ended June 24, 2023 June 25, 2022 GAAP net income attributable to Central Garden & Pet Company $ 83,126 $ 75,420 Facili
Slide 20: GAAP to Non-GAAP Reconciliation: Adjusted EBITDA
GAAP to Non-GAAP Reconciliation for the Fiscal Three Months Ended (in thousands) Adjusted EBITDA Reconciliation June 24, 2023 June 25, 2022 Net income attributable to Central Garden & Pet Company $ 83,126 $ 75,420 Interest expense, net 13,134 14,335 Other (income) expense (853) 759 Income tax expens
Slide 21: GAAP to Non-GAAP Reconciliation: Operating Income
GAAP to Non-GAAP Reconciliation for the Fiscal Three Months Ended (in thousands) Operating Income Reconciliation For Three Months Ended June 24, 2023 Facility GAAP Closure (1) Non-GAAP Net sales $ 1,023,269 $ — $ 1,023,269 Cost of goods sold and occupancy 705,217 8,010 697,207 Gross profit $ 318,052
Central Garden & Pet Company — Q3 2023 Earnings Presentation on 6ix