CENTRAL GARDEN & PET COMPANY, 424B4, 1996-07-19

CENTRAL GARDEN & PET COMPANY
424B4, 1996-07-19
MISCELLANEOUS NONDURABLE GOODS

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<PAGE>
Filed Pursuant to Rule 424(b)(4)
File No. 333-07291

2,750,000 Shares

[LOGO]

Common Stock

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Of the 2,750,000 shares of Common Stock offered hereby, 2,500,000 shares are
being offered by Central Garden & Pet Company (the "Company") and 250,000
shares are being offered by certain stockholders of the Company (the "Selling
Stockholders"). The Company will not receive any proceeds from the sale of
shares by the Selling Stockholders. See "Principal and Selling Stockholders."
The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "CENT." On July 18, 1996, the last reported sale price of the Common
Stock as reported on the Nasdaq National Market was $19.00 per share. See
"Price Range of Common Stock."

The Common Stock has one vote per share, whereas the Company's Class B Stock
has the lesser of ten votes per share or 49% of the total votes cast. After
giving effect to the Offering, the holders of the Class B Stock will have 49%
of the combined voting power for the election of directors and all other
matters subject to stockholder vote. See "Description of Capital Stock."

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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO DISCOUNTS AND TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
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<S> <C> <C> <C> <C>
Per Share....................... $18.00 $0.99 $17.01 $17.01
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Total(3)........................ $49,500,000 $2,722,500 $42,525,000 $4,252,500
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</TABLE>
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(1) See "Underwriting" for information relating to indemnification of the
Underwriters.

(2) Before deducting expenses of the offering payable by the Company,
estimated at $400,000.

(3) The Company and a Selling Stockholder have granted the Underwriters a 30-
day option to purchase up to 412,500 additional shares of Common Stock
solely to cover over-allotments, if any. To the extent that the option is
exercised, the Underwriters will offer the additional shares at the Price
to Public shown above. If the option is exercised in full, the total Price
to Public, Underwriting Discounts and Commissions, Proceeds to Company and
Proceeds to Selling Stockholders will be $56,925,000, $3,130,875,
$46,820,025, and $6,974,100 respectively. See "Underwriting."

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The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, and subject
to the right of the Underwriters to reject any order in whole or in part. It
is expected that delivery of the shares of Common Stock will be made at the
offices of Alex. Brown & Sons Incorporated, Baltimore, Maryland, on or about
July 24, 1996.

Alex. Brown & Sons
INCORPORATED
Hambrecht & Quist

Wasserstein Perella Securities, Inc.

THE DATE OF THIS PROSPECTUS IS JULY 19, 1996
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[LOGO OF CENTRAL GARDEN & PET AND
MAP OF CONTINENTAL UNITED STATES DEPICTING OPERATING LOCATIONS OF
CENTRAL GARDEN & PET AND ITS AFFILIATES]

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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. IN CONNECTION WITH
THIS OFFERING THE UNDERWRITERS AND OTHER SELLING GROUP MEMBERS (IF ANY) MAY
ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY
ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE
SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING".

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements and Notes thereto
appearing elsewhere in this Prospectus. Unless otherwise indicated, all
information in this Prospectus assumes that the Underwriters' over-allotment
option is not exercised. Prospective investors should carefully consider the
matters set forth under the caption "Risk Factors." As used in this Prospectus,
"fiscal 1995" refers to the nine month period ended September 30, 1995 and
"fiscal 1996" refers to the fiscal year ending September 28, 1996.

THE COMPANY
Central Garden & Pet Company is the dominant national distributor of lawn and
garden products as well as a major distributor of pet and pool supplies. As a
result of both acquisitions and internal expansion, the Company has grown
rapidly from sales of approximately $25 million in 1987 to approximately $374
million in the nine month period ended September 30, 1995 and increased the
number of Company distribution centers from one in 1987 to 37 currently. Since
1988, the Company has completed 22 acquisitions, making it a leader in the
consolidation of distribution channels for the lawn and garden and pet supplies
industries. In fiscal 1995, lawn and garden products accounted for
approximately 74% of the Company's net sales, pet supplies accounted for
approximately 20% and pool supplies accounted for approximately 6%. According
to industry sources, lawn and garden retail sales exceeded $20 billion in 1995.

With 37 distribution centers servicing most regions of the United States, the
Company offers major retailers the opportunity to satisfy their distribution
requirements through a single source of supply. Similarly, the Company provides
manufacturers access to major retailers on a national basis through one primary
distributor. By focusing on the emergence of high-volume retailers and their
needs, the Company has become the principal provider of lawn and garden
products to a variety of major retailers including Wal*Mart, Home Depot, Target
and Price/Costco as well as to numerous other retailers.

The Company's business strategy is to capitalize on its national presence,
comprehensive product selection, menu of value-added services and efficient
operations. Utilizing these capabilities, the Company strives to develop and
enhance servicing relationships with both large national and regional retailers
as well as manufacturers. Customers may select a customized array of services
from a broad menu of the Company's value-added services, which are designed to
increase the sales and profitability of both retailers and manufacturers. The
Company's services extend beyond the scope of traditional distribution
functions of order taking, shipping and billing, and include merchandising,
training and developing sales programs. The Company believes that its focus,
experience and leading industry position enable it to provide these services
efficiently, particularly in product categories which have a high number of
SKUs and require continuous inventory management and merchandising.

The Company carries a wide selection of products consisting of approximately
45,000 SKUs from approximately 1,000 manufacturers. The Company generally
focuses on providing those brand name products that are suited to distribution
due to their seasonality, variable sales movements, complexity to consumers and
retailers and handling and transportation difficulties, and which therefore
generally require value-added services. Selected brand name lawn and garden
products sold by the Company include Ortho, Round-Up, Miracle-Gro and HTH. In
addition, the Company focuses on serving specialty pet supply retailers which
sell a wide variety of pet supplies. The Company currently also distributes
several proprietary product brands.

The Company entered into an agreement effective October 1, 1995 with The
Solaris Group ("Solaris"), the manufacturer of Ortho, Round-Up and Green Sweep
lawn and garden products, to become the master agent and master distributor for
Solaris products nationwide. This agreement has led to an increase in the
Company's sales of Solaris products, which had been adversely impacted by
Solaris' increased direct sales to retailers in recent years. Under the
agreement, which has an initial four-year term,

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the Company provides a wide range of value-added services in connection with
sales of Solaris products, including logistics, order processing and
fulfillment, inventory distribution and merchandising. Solaris is the Company's
largest supplier, and the Company believes that Solaris products accounted for
approximately 29% and 40% of the Company's net sales in fiscal 1995 and the six
months ended March 30, 1996, respectively.

The Company has developed a multi-faceted growth strategy designed to
increase its position as the dominant distributor of lawn and garden products
and to continue to consolidate the fragmented pet supplies industry. The
Company intends to further expand in these markets by (i) continuing to make
strategic acquisitions, (ii) obtaining new customers and increasing sales to
existing customers and (iii) obtaining new product lines or expanding existing
product lines that are currently distributed by the Company. In addition, the
Company intends over the long-term to develop an array of proprietary product
brands that are complementary to the products it currently distributes and
which the Company believes will have higher overall operating margins.

The Company was incorporated in Delaware in June 1992 and is the successor to
Central Garden Supply, a California corporation which was acquired in 1980 by
William E. Brown, the Company's Chairman and Chief Executive Officer. Unless
the context otherwise requires, references in this Prospectus to the Company
include Central Garden & Pet Company and its subsidiaries and predecessor
companies. The Company's executive offices are located at 3697 Mt. Diablo
Boulevard, Lafayette, California 94549, and its telephone number is (510) 283-
4573. This Prospectus refers to various trademarks owned by companies other
than the Company.

RECENT ACQUISITION

On July 12, 1996, the Company acquired Kenlin Pet Supply, Inc. ("Kenlin"),
the largest distributor of pet supply products in the eastern United States.
Kenlin, which is based in Mahwah, New Jersey, operates in 17 eastern states and
has approximately 290 employees. Net sales for Kenlin have increased from $44.7
million for the year ended July 31, 1993 to $63.0 million for the year ended
July 31, 1995 and operating income for Kenlin grew from $2.2 million to $4.1
million during this same period. Under the terms of the stock purchase
agreement, the Company paid an aggregate of $33 million in cash to acquire or
redeem all of Kenlin's outstanding stock and eliminate all of its outstanding
debt. See "Use of Proceeds."

THE OFFERING

Common Stock offered by the Company..... 2,500,000 shares
Common Stock offered by the Selling
Stockholders.......................... 250,000 shares
Shares to be outstanding after the
Offering:
Common Stock.......................... 12,070,103 shares(1)
Class B Stock......................... 2,108,575 shares
Total............................... 14,178,678 shares(1)
Use of Proceeds......................... Repayment of indebtedness incurred in
part to finance the Kenlin
acquisition.
Nasdaq National Market symbol........... CENT
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(1) Excludes 2,000,000 shares of Common Stock reserved for issuance upon
exercise of options pursuant to the Company's 1993 Omnibus Equity Incentive
Plan, 605,783 of which were outstanding as of June 25, 1996, 100,000 shares
of Common Stock reserved for issuance upon exercise of options pursuant to
the Company's Nonemployee Director Stock Option Plan, 20,000 of which were
outstanding as of June 25, 1996 and 750,000 shares of Common Stock
registered on Form S-4 for use in possible acquisitions. Also excludes
100,000 shares of Common Stock issuable upon the conversion of 100 shares
of Series A Preferred Stock and 500,000 shares of Common Stock issuable
upon the exercise of a warrant, which is immediately exercisable at an
exercise price of $9.00 per share. See "Business--The Solaris Agreement."

4
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SUMMARY CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA

<TABLE>
<CAPTION>
MARCH 30, 1996
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ACQUISITION PRO FORMA
ACTUAL PRO FORMA(5) AS ADJUSTED(6)
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<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital............................ $ 61,538 $ 40,437 $ 82,562
Total assets............................... 229,776 267,728 267,728
Short-term borrowings...................... 22,451 55,451 13,326
Long-term borrowings....................... 8,635 8,635 8,635
Shareholders' equity....................... 74,575 74,575 116,700
</TABLE>
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(1) In 1992, the Company adopted a 52/53 week fiscal year ending on the last
Sunday in December. In 1995, the Company changed its fiscal year end to the
last Saturday in September. Accordingly, the fiscal year ended September
30, 1995 was a nine month period.
(2) Results for 1994 and 1995 reflect the effect of increased direct sales by
the Company's major supplier (Solaris) and other factors. The Company
entered into an agreement effective October 1, 1995 with Solaris to become
the master agent and master distributor for Solaris products nationwide.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
(3) During 1992, the Company was reorganized (see Note 2 of Notes to the
Consolidated Financial Statements). As a result, net income per common and
common equivalent share and weighted average shares outstanding are not
presented for fiscal years 1991 and 1992 because such information would not
be comparable with the post-reorganization periods.
(4) In November 1995, the Company sold 5,750,000 shares of its Common Stock at
a public offering price of $6.75 per share. Net proceeds were used to
reduce borrowings under the Company's principal line of credit.
(5) Adjusted to reflect the acquisition of Kenlin had it been consummated at
March 30, 1996.
(6) Adjusted to reflect the sale of the 2,500,000 shares of Common Stock
offered by the Company hereby and the application of the estimated net
proceeds therefrom as described in "Use of Proceeds."

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<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, the following risk
factors should be considered carefully in evaluating an investment in the
Common Stock offered hereby. The statements contained in or incorporated into
this Prospectus which are not historical facts 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. Factors that could cause or contribute to such differences include
those discussed below, as well as those discussed elsewhere in this
Prospectus.

Supplier Concentration; Dependence on Solaris. While the Company purchases
products from over 1,000 different manufacturers and suppliers, the Company
believes that over 48% of the Company's net sales in fiscal 1995 were derived
from products purchased from the Company's five largest suppliers. The Company
believes that approximately 29% of the Company's net sales during fiscal 1995
and 40% of the Company's net sales during the six months ended March 30, 1996
were derived from sales of products purchased from Solaris, the Company's
largest supplier. Starting in 1991, Solaris' predecessors began to sell
directly to retailers. These direct sales programs were expanded in 1994 and
had a material adverse effect on the Company's results of operations during
1994 and fiscal 1995. Because of the dependence of the Company on sales of
Solaris products, future changes implemented by Solaris to its marketing and
sales programs or any overall decrease in the sales of Solaris products could
have a material adverse effect on the Company. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

The Company entered into a new four-year agreement with Solaris (the
"Solaris Agreement") effective October 1, 1995 which the Company believes has
added stability to its relationship with Solaris. As a result of the Solaris
Agreement, the Company's sales of Solaris products during the six months ended
March 30, 1996 have increased substantially compared with the six months ended
March 26, 1995 and the Company's dependence on Solaris is even greater than
before the Solaris Agreement. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Overview." The loss of, or a
significant adverse change in, the relationship between the Company and
Solaris or any other key manufacturer or supplier could have a material
adverse impact on the Company's business and financial results. In addition,
during the peak selling season, there may be unanticipated shortages of
certain high demand products. Although historically the Company has purchased
enough inventory of such products or their substitutes to satisfy retailer
demand, the unanticipated failure of any manufacturer or supplier to meet the
Company's requirements or the Company's inability to obtain substitutes could
have a material adverse effect on the Company. Although the Company has
entered into long-term agreements with certain suppliers, including Solaris,
in many cases the Company operates without written agreements with its
suppliers. Accordingly, although the Company believes it has good
relationships with its suppliers, there is a risk that one or more of its
suppliers may at any time terminate its supply relationship with the Company.

The Solaris Agreement. The Company believes that a significant portion of
its net sales and operating income during fiscal 1996 is attributable to its
new relationship with Solaris. Under the Solaris Agreement, Solaris is
obligated to reimburse the Company for costs incurred in connection with
services provided by the Company to Solaris' direct sale accounts. In
addition, the Company receives payments based on the level of sales of Solaris
products to these accounts, and these payments are subject to increase based
on the growth of sales of Solaris products. The Company also shares with
Solaris in the economic benefits of certain cost reductions, to the extent
achieved. It is possible that disagreements could arise between Solaris and
the Company as to measurement of the costs incurred in servicing Solaris'
direct sales accounts. The cost reimbursement arrangement is based on certain
estimates which are subject to reconciliation at the end of each fiscal year.
As a result, the Solaris Agreement could contribute to variability in the
Company's operating results. The new relationship with Solaris embodied in the
Solaris Agreement does not assure that the Company will be profitable overall.

6
<PAGE>

As a result of the Solaris Agreement, a majority of the Company's sales of
Solaris products are currently derived from servicing direct sales accounts,
whereas in 1994 and fiscal 1995, a majority of the Company's sales of Solaris
products were made by the Company as a traditional distributor. The Company
acts as the master agent on direct sales of Solaris products to certain major
retailers and the master distributor in connection with sales of Solaris
products to other distributors and retailers. Solaris negotiates its sales
prices directly with its direct sales accounts. The Solaris Agreement contains
provisions which, without the consent of Solaris, could limit the Company's
ability to distribute certain lawn and garden products manufactured by
suppliers other than Solaris. These provisions could result in lower sales of
non-Solaris products, which could have an adverse effect on the Company's
business. The Solaris Agreement does not expire until September 30, 1999.
However, Solaris has the right to terminate the agreement prior to its
expiration in the event of a material breach of the agreement by the Company,
including the Company's failure to satisfy certain performance criteria, or,
under certain other circumstances, including a sale of Solaris. Any such early
termination would have a material adverse effect on the Company. See
"Business--The Solaris Agreement."

Customer Concentration; Dependence on Wal*Mart and Home Depot. Approximately
47% and 52% of the Company's net sales for the year ended December 25, 1994
and the nine months ended September 30, 1995, respectively, were derived from
sales to the Company's top ten customers. The Company's largest customer is
Wal*Mart, which accounted for approximately 19% and 22% of the Company's net
sales for the year ended December 25, 1994 and the nine months ended September
30, 1995, respectively. The Company's second largest customer is Home Depot,
which accounted for approximately 7% and 10% of the Company's net sales for
the year ended December 25, 1994 and the nine months ended September 30, 1995,
respectively. The loss of, or significant adverse change in, the relationship
between the Company and Wal*Mart or Home Depot could have a material adverse
effect on the Company's business and financial results. The loss of or
reduction in orders from any significant customer, losses arising from
customer disputes regarding shipments, fees, merchandise condition or related
matters, or the Company's inability to collect accounts receivable from any
major customer could have a material adverse impact on the Company's business
and financial results. In particular, the Company has an account receivable of
approximately $500,000 from Ernst Home Centers which filed for bankruptcy in
July 1996.

Direct Sales. Manufacturers and suppliers of lawn and garden products and
pet supplies have sold, and may intensify their efforts to sell, their
products directly to retailers, including major customers of the Company.
Prior to the acquisition of Ortho by Monsanto, both Ortho (in late 1991) and
Monsanto (in 1993) had initiated direct sale programs. Solaris, a strategic
business unit of Monsanto, expanded these direct sales programs in 1994. Most
of the Company's major customers, including its top ten customers, purchase
certain products--typically high volume items ordered in large quantities--
directly from manufacturers or suppliers. The Company believes that most major
manufacturers and suppliers that utilize distributors continually evaluate the
effectiveness of their distribution programs as well as the performance of
individual distributors, and accordingly, there can be no assurance that major
manufacturers and suppliers of the products distributed by the Company will
not modify their distribution programs in ways that could adversely affect the
Company. In addition to direct sales from manufacturers and suppliers to
retailers, certain retailers have, and may intensify their efforts to have,
products shipped by the Company to their internal distribution centers rather
than directly to stores. Such direct shipments generally yield lower gross
margins to the Company than shipments to retailers' stores, but the Company
believes that its associated operating costs are typically lower with such
direct shipments. If these programs become more common or if other methods of
distribution of lawn and garden products and pet supplies become more widely
accepted, the Company's business and financial results could be materially
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business--Retailers," "--Manufacturers
and Suppliers " and "--Competition."

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<PAGE>

Weather and Seasonality. Because demand for lawn and garden products is
significantly influenced by weather, particularly weekend weather during the
peak gardening season, the Company's results of operations could be adversely
affected by certain weather patterns such as unseasonably cool or warm
temperatures, water shortages or floods. During the first six months of the
calendar year in both 1993 and 1995, and the first three months of the
calendar year in 1996, the Company's results of operations were negatively
affected by severe weather conditions in many parts of the country.
Additionally, the Company's business is highly seasonal, with approximately
63% of the Company's sales in 1994 occurring during the first six months of
the calendar year. Substantially all of the Company's operating income is
typically generated in this period, while operating losses are generally
incurred during the rest of the calendar year. The Company seeks to mitigate
the effects of seasonality through various promotional efforts and incentives
during the second half of the calendar year and the sale of less seasonal
products such as pet supplies. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Seasonality and Quarterly
Fluctuations."

Low Margins; Competition. The distribution industry in which the Company
operates is characterized by relatively low profit margins. As a result, the
Company's success is highly dependent upon increasing revenues and profits
through internal expansion and acquisitions, effective cost and management
controls and differentiating its services from those of its competitors. The
wholesale lawn and garden and pet supplies distribution businesses are highly
competitive, with many companies competing principally on the basis of price
and service. In addition to competition from other distributors, the Company
also competes with manufacturers and suppliers that elect to distribute
certain of their products directly to retailers, including major customers of
the Company, and private label product suppliers. See "--Direct Sales." There
can be no assurance that the Company will not encounter increased competition
in the future or will not lose business from major manufacturers that elect to
sell their products directly to retailers, either of which could adversely
affect the Company's operations and financial results.

Expansion; Acquisitions. As part of its growth strategy, the Company
aggressively pursues the acquisition of other companies, assets and product
lines that either complement or expand its existing business. See "Business--
Growth Strategy." Acquisitions involve a number of special risks, including
the diversion of management's attention to the assimilation of the operations
and personnel of the acquired companies, adverse short-term effects on the
Company's operating results, integration of financial reporting systems and
the amortization of acquired intangible assets. The Company completed seven
acquisitions in 1993, four acquisitions in 1994, one acquisition in 1995 and
to date, two acquisitions in 1996, including the acquisition of Kenlin Pet
Supply, Inc. ("Kenlin"), the largest distributor of pet supply products in the
eastern United States. There can be no assurance that the Company can
successfully integrate Kenlin or that Kenlin's business will enhance the
Company's business. The Company has also had preliminary acquisition
discussions with, or has evaluated the potential acquisition of, numerous
other companies over the last several years. The Company is unable to predict
the likelihood of a material acquisition being completed in the future. If the
Company proceeds with a large acquisition for cash, the Company may be able to
use the increased borrowing capacity resulting from this Offering to
consummate such transaction. See "Use of Proceeds." The Company may also seek
to finance any such acquisition through additional debt or equity financings.

The Company anticipates that one or more potential acquisition
opportunities, including those that would be material, may become available in
the near future. If and when appropriate acquisition opportunities become
available, the Company intends to pursue them actively. No assurance can be
given that any acquisition by the Company will or will not occur, that if an
acquisition does occur that it will not materially and adversely affect the
Company or that any such acquisition will be successful in enhancing the
Company's business. In addition, the Company's branded products strategy is
likely to cause the Company to seek to acquire manufacturers of consumer
products. Since the Company's management has limited experience in acquiring
or managing consumer products manufacturers, such

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acquisitions are likely to subject the Company to additional risks and there
can be no assurance that any such acquisition will be successful in enhancing
the Company's business. The Company's future results of operations will also
depend in part on its ability to successfully expand internally by increasing
the number of distribution centers and new product lines, and to manage any
future growth. No assurance can be given that the Company will be able to open
or operate new distribution centers, obtain or integrate additional product
lines or manage any future growth successfully. See "Use of Proceeds" and
"Business--Growth Strategy."

Dependence on Key Personnel. The Company's future performance is
substantially dependent upon the continued services of William E. Brown, its
Chairman and Chief Executive Officer, and Glenn W. Novotny, its President and
Chief Operating Officer. See "Management." The loss of the services of either
of such persons could have a material adverse effect upon the Company. In
addition, the Company's future performance depends on its ability to attract
and retain skilled employees. There can be no assurance that the Company will
be able to retain its existing personnel or attract additional qualified
employees in the future.

Management Information Systems. The Company is presently upgrading and
installing one uniform, integrated management information system across the
United States at an estimated cost to complete of $2 million. The Company has
completed the installation of the new system for the Southwest, Midwest and
Southeast regions and expects to convert the remaining regions within the next
twelve months. No assurances can be given that such transition and system
enhancement can be accomplished in a timely and cost-effective manner without
disrupting the Company's operations. In addition, there can be no assurance
that the Company's current system or planned upgrade will be sufficient or
effective or that further investments in management information systems will
not be necessary. See "Business--Management Information Systems."

Baton Rouge Fire. In July 1992, fire damaged the Company's warehouse in
Baton Rouge, Louisiana and two adjoining warehouse spaces leased by third
parties. Although the overall amount of the damages to all parties caused by
the fire is believed to aggregate $20 million or more, neither this amount nor
the overall amount of damages which the Company may sustain as a result of the
fire has been finally quantified. At the time of the fire, the Company
maintained insurance providing $11 million of coverage (with no deductible)
against third party liability. The Company believes that this insurance
coverage will be available with respect to third party claims against the
Company if parties other than the Company are not found responsible. The
precise amount of the damages sustained in the fire, the ultimate
determination of the parties responsible and the availability of insurance
coverage are likely to depend on the outcome of complex litigation, involving
numerous claimants, defendants and insurance companies. Accordingly, no
assurance may be given as to the ultimate impact of the Louisiana fire on the
Company. The Company has not provided a reserve for any potential adverse
judgment arising out of the Louisiana fire. The Company believes, based on the
information currently available to it, that the ultimate resolution of this
matter will not have a material adverse effect on its financial position or
results of operations. See "Business--Litigation--Baton Rouge Fire."

Variability of Quarterly Results; Volatility of Stock Price. The Company
expects to continue to experience variability in its net sales and net income
on a quarterly basis. Factors that may contribute to this variability include:
(i) weather conditions and seasonality during peak gardening seasons as
described in "--Weather and Seasonality;" (ii) shifts in demand for lawn and
garden products; (iii) changes in product mix, service levels and pricing by
the Company and its competitors; (iv) the cost reimbursement and payment
provisions of the Solaris Agreement; (v) the effect of acquisitions and (vi)
economic stability of retail customers. In addition, because the Company
operates on relatively low margins, the Company's operating results in any
quarterly period could be affected significantly by slight variations in
revenues or operating costs. For the same reason, the Company's quarterly
results also may be vulnerable to problems in areas such as collectibility of
accounts receivable, inventory control and competitive price pressures.

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The market price of the Common Stock could be subject to significant
fluctuations in response to these variations in quarterly operating results
and other factors. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Seasonality and Quarterly Fluctuations."

Control of the Company; Disparate Voting Rights. After the Offering and
assuming the Underwriters' over-allotment option is not exercised, William E.
Brown, Chairman of the Board and Chief Executive Officer of the Company will
control approximately 46.0% of the voting power of the capital stock of the
Company and, therefore, will effectively control the Company, including the
power to elect all of the directors of the Company. Holders of Class B Stock
are entitled to the lesser of ten votes per share or 49% of the total votes
cast. Holders of Common Stock are entitled to one vote for each share owned.
Holders of Class B Stock are likely to be able to elect all of the Company's
directors, control the management and policies of the Company and determine
the outcome of any matter submitted to a vote of the Company's stockholders
except to the extent that a class vote of the Common Stock is required by
applicable law. The disproportionate voting rights of the Common Stock and
Class B Stock could have an adverse effect on the market price of the Common
Stock. Such disproportionate voting rights may make the Company a less
attractive target for a takeover than it otherwise might be, or render more
difficult or discourage a merger proposal, a tender offer or a proxy contest,
even if such actions were favored by stockholders of the Company other than
the holders of the Class B Stock. Accordingly, such disproportionate voting
rights may deprive holders of Common Stock of an opportunity to sell their
shares at a premium over prevailing market prices, since takeover bids
frequently involve purchases of stock directly from stockholders at such a
premium price. See "Principal and Selling Stockholders" and "Description of
Capital Stock."

Environmental Considerations. The Company's subsidiary, Grant Laboratories,
Inc., which manufactures ant control products, and many of the products
distributed by the Company are subject to regulation by federal, state and
local authorities. Such regulations are often complex and are subject to
change. Environmental regulations may affect the Company by restricting the
manufacturing, transportation or use of its products or by regulating their
disposal. Regulatory or legislative changes may cause future increases in the
Company's operating costs or otherwise affect operations. Although the Company
believes it is and has been in substantial compliance with such regulations,
there is no assurance in the future that the Company may not be adversely
affected by such regulations or incur increased operating costs in complying
with such regulations. However, neither the compliance with regulatory
requirements nor the Company's environmental procedures can ensure that the
Company will not be subject to claims for personal injury, property damages or
governmental enforcement. See "Business--Environmental Considerations" and "--
Litigation--Baton Rouge Fire."

General Economic Conditions. The sale of lawn and garden products and pet
and pool supplies historically have been subject to fluctuation, with
purchases of these products tending to decline during periods of recession in
the general economy or uncertainty regarding future economic prospects that
affect consumer spending habits, particularly on discretionary items. These
economic cycles and any related fluctuation in consumer demand could have a
material adverse effect on the Company's results of operations and financial
condition. In addition, various retailers, including some of the Company's
customers, have experienced financial difficulties during the past several
years, thereby increasing the risk that such retailers may not pay for the
Company's products in a timely manner, if at all.

Shares Eligible for Future Sale. Sales of substantial amounts of shares of
Common Stock in the public market following the Offering could have an adverse
impact on the market price of the Common Stock. After the closing of the
Offering, 11,903,397 shares of Common Stock, including 2,720,000 of the shares
offered hereby, the 2,530,000 shares of Common Stock that were sold by the
Company in the initial public offering and the 5,750,000 shares of Common
Stock sold by the Company in the public offering in November 1995, and 81,668
shares of Common Stock issuable upon conversion of Class B Stock, will be
freely tradeable without restriction under the Securities Act, except for any
shares purchased by affiliates

10
<PAGE>

of the Company, which will be subject to certain resale limitations of Rule
144 promulgated under the Securities Act. The remaining 166,706 shares of
Common Stock and 2,026,907 shares of Class B Stock held by existing
stockholders are subject to lock-up agreements with the Underwriters. The
directors, executive officers and principal stockholders of the Company who
hold such shares have agreed not to sell or otherwise dispose of any shares
for 90 days after the date of this Prospectus without the prior written
consent of Alex. Brown & Sons Incorporated. After the expiration of the 90 day
lock-up period, these shares may be sold in accordance with Rule 144. In
addition, 500,000 shares of Common Stock issuable upon the exercise of a
warrant, which is immediately exercisable, are eligible for sale upon
expiration of the 90 day lock-up period. The Company has filed registration
statements under the Securities Act covering 750,000 shares of Common Stock on
a Form S-4 for use in potential acquisitions and 2,000,000 shares of Common
Stock reserved for issuance under the 1993 Omnibus Equity Incentive Plan. As
of June 25, 1996, there were options outstanding to purchase 605,783 shares of
Common Stock under this plan. See "Shares Eligible for Future Sale."

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,500,000 shares of
Common Stock offered hereby are estimated to be approximately $42.1 million
($46.4 million if the Underwriters' over-allotment option is exercised in
full), after deducting underwriting discounts and commissions and estimated
offering expenses. The Company intends to utilize all of such net proceeds to
reduce borrowings under its principal line of credit. As of May 31, 1996, the
amount of the borrowings outstanding under the Company's principal line of
credit (which currently bears interest at the prime rate plus 3/4% per annum)
was $25.6 million. In addition, the Company recently paid an aggregate of $33
million in cash to acquire or redeem all of Kenlin's outstanding stock and
eliminate all of Kenlin's outstanding debt. The Company used its principal
line of credit to pay the purchase price of the Kenlin acquisition and
accordingly the amount of its borrowings under its line of credit increased by
$33 million upon consummation of the Kenlin acquisition in July 1996. The
increase in available borrowing capacity will provide the Company with a
source of funds for working capital and possible acquisitions of complementary
businesses. As part of its growth strategy, the Company aggressively pursues
the acquisition of other companies, assets and product lines that either
complement or expand its existing business, and it anticipates it will
continue to evaluate and pursue potential acquisition candidates. See
"Business--Growth Strategy." The Company completed seven acquisitions in 1993,
four acquisitions in 1994, one acquisition in 1995 and to date, two
acquisitions in 1996, including Kenlin. If the Company proceeds with a large
acquisition for cash, the Company may be able to use the increased borrowing
capacity resulting from this Offering to consummate such transaction. In
addition, the Company may be required to raise additional capital either
through debt or equity financings. For additional information regarding the
Company's principal line of credit, see "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources" and Note 5 of Notes to Consolidated Financial Statements. The
Company will not receive any proceeds from the sale of shares by the Selling
Stockholders.

DIVIDEND POLICY

The Company has not paid any cash dividends in the past. The Company
currently intends to retain any earnings for use in its business and does not
anticipate paying any cash dividends on its Common Stock in the foreseeable
future. In addition, the Company's line of credit contains restrictions on the
Company's ability to pay dividends. See Note 5 of Notes to Consolidated
Financial Statements.

11
<PAGE>

PRICE RANGE OF COMMON STOCK

The Company's Common Stock has been traded on the Nasdaq National Market
since the Company's initial public offering on July 15, 1993. The following
table sets forth, for the periods indicated, the highest and lowest closing
sale prices for the Common Stock, as reported by the Nasdaq National Market.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Fiscal 1994(1)
First Quarter............................................... 12 1/2 9 7/8
Second Quarter.............................................. 10 1/2 8 3/4
Third Quarter............................................... 9 1/4 6 1/2
Fourth Quarter.............................................. 7 3 3/8
Fiscal 1995(1)
First Quarter............................................... 4 1/4 3 5/16
Second Quarter.............................................. 6 3 1/2
Third Quarter............................................... 6 7/8 5 1/8
Fiscal 1996
First Quarter............................................... 9 1/2 5 1/2
Second Quarter.............................................. 10 8 1/8
Third Quarter............................................... 19 9 1/4
Fourth Quarter (through July 18, 1996)...................... 19 7/8 16 3/4
</TABLE>
- --------
(1) In 1994, the fiscal year ended December 25, 1994. In 1995, the Company
changed its fiscal year end to the last Saturday in September.
Accordingly, the fiscal year ended September 30, 1995 was a nine month
period.

On July 18, 1996, the last reported sale price of the Common Stock on the
Nasdaq National Market was $19.00. As of June 21, 1996, there were
approximately 123 holders of record of the Company's Common Stock and
approximately 12 holders of record of the Company's Class B Stock.

12
<PAGE>

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company at March 30, 1996 (i) on an actual basis, (ii) on a pro forma basis to
reflect the Kenlin acquisition had it been consummated at March 30, 1996 and
(iii) as adjusted to give effect to the sale of the 2,500,000 shares of Common
Stock being sold by the Company and the application of the estimated net
proceeds therefrom. See "Use of Proceeds."

<TABLE>
<CAPTION>
MARCH 30, 1996
---------------------------------
ACQUISITION PRO FORMA
ACTUAL PRO FORMA(1) AS ADJUSTED
------- ------------ -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Short-term borrowings........................ $22,451 $55,451 $ 13,326
======= ======= ========
Long-term borrowings......................... $ 8,635 $ 8,635 $ 8,635
Shareholders' equity:
Preferred Stock, $.01 par value; 1,000
shares authorized; 100 shares
outstanding............................... -- -- --
Class B Stock, $.01 par value; 3,000,000
shares authorized; 2,166,075 shares
outstanding; 2,108,575 outstanding as
adjusted(2)............................... 22 22 21
Common Stock, $.01 par value; 40,000,000
shares authorized; 9,451,760 shares
outstanding; 12,070,103 shares outstanding
as adjusted(3)............................ 95 95 121
Additional paid-in capital................. 63,917 63,917 106,017
Retained earnings.......................... 10,758 10,758 10,758
Restricted stock deferred compensation(4).. (217) (217) (217)
------- ------- --------
Total shareholders' equity............... 74,575 74,575 116,700
------- ------- --------
Total capitalization................... $83,210 $83,210 $125,335
======= ======= ========
</TABLE>
- --------
(1) Adjusted to reflect the acquisition of Kenlin had it been consummated at
March 30, 1996.
(2) Reflects conversion of 57,500 shares of Class B Stock into Common Stock by
a Selling Stockholder.
(3) Excludes 2,000,000 shares of Common Stock reserved for issuance upon
exercise of options pursuant to the Company's 1993 Omnibus Equity
Incentive Plan, 655,463 of which were outstanding as of March 30, 1996,
100,000 shares of Common Stock reserved for issuance upon exercise of
options pursuant to the Company's Nonemployee Director Stock Option Plan,
20,000 of which were outstanding as of March 30, 1996 and 750,000 shares
of Common Stock registered on a Form S-4 for use in possible acquisitions.
Also excludes 500,000 shares of Common Stock issuable upon the exercise of
a warrant, which is immediately exercisable at an exercise price of $9.00
per share.
(4) Reflects the issuance by the Company of 237,217 shares of Class B Stock
and the transfer of 32,420 shares of Class B Stock to certain employees by
William E. Brown and the related deferred compensation. All of such shares
are subject to various restrictions, including certain future vesting
periods of up to 10 years.

13
<PAGE>

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following selected income statement and balance sheet data of the
Company as of and for each of the fiscal years in the four-year period ended
December 25, 1994 and the nine-month period ended September 30, 1995 have been
derived from the Company's audited consolidated financial statements. Such
financial statements as of December 25, 1994 and September 30, 1995 and for
each of the two fiscal years in the period ended December 25, 1994 and the
nine-month period ended September 30, 1995 are included elsewhere in this
Prospectus and have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report included herein. The following selected
income statement and balance sheet data of the Company as of and for the six-
month periods ended March 26, 1995 and March 30, 1996, are derived from the
unaudited consolidated financial statements of the Company. In the opinion of
management, the unaudited consolidated financial statements of the Company
have been prepared on the same basis as the audited consolidated financial
statements included herein and include all adjustments necessary for the fair
presentation of financial position and results of operations for these
periods, which adjustments are only of a normal recurring nature. The
financial data set forth below should be read in conjunction with the
Consolidated Financial Statements of the Company and related Notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
NINE MONTH
PERIOD
FISCAL YEAR ENDED(1) ENDED(1) SIX MONTHS ENDED
--------------------------------------------------- ------------- --------------------
DECEMBER 31, DECEMBER 27, DECEMBER 26, DECEMBER 25, SEPTEMBER 30, MARCH 26, MARCH 30,
1991 1992 1993 1994 1995 1995 1996(3)
------------ ------------ ------------ ------------ ------------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............... $280,722 $321,707 $334,682 $421,427 $373,734 $181,214 $260,132
Cost of goods sold and
occupancy.............. 233,782 271,050 278,746 354,096 316,832 153,046 227,006
-------- -------- -------- -------- -------- -------- --------
Gross profit........... 46,940 50,657 55,936 67,331 56,902 28,168 33,126
Selling, general and
administrative
expenses............... 40,508 41,949 44,702 58,489 48,075 27,881 29,783
-------- -------- -------- -------- -------- -------- --------
Income from operations.. 6,432 8,708 11,234 8,842 8,827 287 3,343
Interest expense-net.... (4,343) (4,028) (3,751) (5,642) (5,891) (3,430) (2,452)
Other income (expense).. 379 (742) (878) (856) (953) (604) (139)
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
income taxes and
minority interest...... 2,468 3,938 6,605 2,344 1,983 (3,747) 752
Income tax expense
(benefit).............. 903 1,595 2,637 936 904 (1,468) 324
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
minority interest...... 1,565 2,343 3,968 1,408 1,079 (2,279) 428
Minority interest....... 422 (210) 26 (3) -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income (loss)....... $ 1,987 $ 2,133 $ 3,994 $ 1,405 $ 1,079 $ (2,279) $ 428
======== ======== ======== ======== ======== ======== ========
Net income (loss) per
common and common
equivalent
share(2)(3)............ $ 0.83 $ 0.24 $ 0.18 $ (0.39) $ 0.04
Weighted average shares
outstanding(2)(3)...... 4,789 5,947 5,943 5,865 10,381
OPERATING DATA:
Distribution centers at
period end............. 25 25 30 39 38 38 37
BALANCE SHEET DATA (AT
PERIOD END):
Working capital......... $ 9,289 $ 10,288 $ 26,719 $ 21,003 $ 25,316 $ 20,255 $ 61,538
Total assets............ 112,693 123,484 143,748 173,953 142,680 203,803 229,776
Short-term borrowings... 37,518 41,453 32,162 44,995 39,670 41,289 22,451
Long-term borrowings.... 6,627 5,975 8,804 7,019 11,130 6,270 8,635
Shareholders' equity.... 9,596 16,114 35,359 36,376 38,402 37,094 74,575
</TABLE>
- -------
(1) In 1992, the Company adopted a 52/53 week fiscal year ending on the last
Sunday in December. In 1995, the Company changed its fiscal year end to
the last Saturday in September. Accordingly, the fiscal year ended
September 30, 1995 was a nine month period.
(2) During 1992, the Company was reorganized (see Note 2 of Notes to
Consolidated Financial Statements). As a result, net income per common and
common equivalent share and weighted average shares outstanding are not
presented for fiscal years 1991 and 1992 because such information would
not be comparable with the post-reorganization periods.
(3) In November 1995, the Company sold 5,750,000 shares of its Common Stock at
a public offering price of $6.75 per share. Net proceeds were used to
reduce borrowings under the Company's principal line of credit.

14
<PAGE>

UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The Company's acquisition of Kenlin will be accounted for under the
"purchase" method of accounting which requires the purchase price to be
allocated to the acquired assets and liabilities of Kenlin on the basis of
their estimated fair values as of the date of acquisition. The following pro
forma combined condensed balance sheet gives effect to the acquisition of
Kenlin as if it occurred on March 30, 1996, and the pro forma combined
condensed statements of income give effect to the acquisition of Kenlin as if
it occurred on December 26, 1994 and include adjustments directly attributable
to the acquisition of Kenlin that are expected to have a continuing impact on
the combined company (collectively, the "Pro Forma Financial Information").
The historical Kenlin condensed statements of income presented below have been
compiled from Kenlin's internal monthly financial statements. As the Pro Forma
Financial Information has been prepared based on estimated fair values,
amounts actually recorded may change upon determination of the total purchase
price and additional analysis of individual assets and liabilities assumed.

The Pro Forma Financial Information and related notes are provided for
informational purposes only and are not necessarily indicative of the
consolidated financial position or results of operations of the Company as
they may be in the future or as they might have been had the acquisition been
effected on the assumed dates. The Pro Forma Financial Information should be
read in conjunction with the separate historical consolidated financial
statements of the Company, and the related notes thereto, and the historical
financial statements of Kenlin, and the related notes thereto, presented
elsewhere in this Prospectus. See Note 1 to the Company's historical
consolidated financial statements for a description of the treatment of
goodwill arising from prior acquisitions.

PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
COMPANY KENLIN ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales................... $373,734 $46,957 $420,691
Costs of goods sold and
occupancy.................. 316,832 34,075 $1,976 (a) 352,883
-------- ------- ------ --------
Gross profit................ 56,902 12,882 (1,976) 67,808
Selling, general and
administrative expenses.... 48,075 10,426 (2,088)(a),(b) 56,413
-------- ------- ------ --------
Income from operations...... 8,827 2,456 112 11,395
Interest and other
expenses................... 6,844 817 1,637 (c) 9,298
-------- ------- ------ --------
Income before income taxes.. 1,983 1,639 (1,525) 2,097
Income taxes................ 904 688 (561)(d) 1,031
-------- ------- ------ --------
Net income.................. $ 1,079 $ 951 $ (964) $ 1,066
======== ======= ====== ========
Net income per share........ $ 0.18 $ 0.18
======== ========
Weighted average common and
common equivalent shares
outstanding................ 5,943 5,943
</TABLE>
- --------
(a) Represents the reclassification of certain costs to conform with the
Company's policy.
(b) Reflects an adjustment to goodwill amortization totaling $56,000 for the
excess of amortization recognized by Kenlin on a historical basis over the
goodwill resulting from the Kenlin acquisition. Goodwill is amortized on a
straight-line basis over 40 years.
(c) Represents interest expense on borrowings under the Company's line of
credit incurred in conjunction with the acquisition of Kenlin and on
estimated average borrowings during the nine months ended September 30,
1995. Interest expense was computed at 9.61% (based on the prime rate plus
3/4% per annum).
(d) Adjusts the historical provision for income taxes to give effect to the
pro forma adjustments discussed in (a), (b) and (c) above.

15
<PAGE>

PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME

FOR THE SIX-MONTH PERIOD ENDED MARCH 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
COMPANY KENLIN ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales................... $260,132 $37,826 $297,958
Costs of goods sold and
occupancy.................. 227,006 27,398 $1,575 (a) 255,979
-------- ------- ------ --------
Gross profit................ 33,126 10,428 (1,575) 41,979
Selling, general and
administrative expenses.... 29,783 7,938 (1,617)(a),(b) 36,104
-------- ------- ------ --------
Income from operations...... 3,343 2,490 42 5,875
Interest and other
expenses................... 2,591 589 994 (c) 4,174
-------- ------- ------ --------
Income before income taxes.. 752 1,901 (952) 1,701
Income taxes................ 324 778 (296)(d) 806
-------- ------- ------ --------
Net income.................. $ 428 $ 1,123 $ (656) $ 895
======== ======= ====== ========
Net income per share........ $ 0.04 $ 0.09
======== ========
Weighted average common and
common equivalent shares
outstanding................ 10,381 10,381
</TABLE>
- --------
(a) Represents the reclassification of certain costs to conform with the
Company's policy.
(b) Reflects an adjustment to goodwill amortization totaling $53,000 for the
excess of amortization recognized by Kenlin on a historical basis over the
goodwill resulting from the Kenlin acquisition. Goodwill is amortized on a
straight-line basis over 40 years.
(c) Represents interest expense on borrowings under the Company's line of
credit incurred in conjunction with the acquisition of Kenlin and on
estimated average borrowings during the six months ended March 30, 1996.
Interest expense was computed at 9.15% (based on the prime rate plus 3/4%
per annum).
(d) Adjusts the historical provision for income taxes to give effect to the
pro forma adjustments discussed in (a), (b) and (c) above.

16
<PAGE>

PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 30, 1996
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
COMPANY KENLIN ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Cash..................... $ 139 $ 99 $ 238
Inventories.............. 110,151 9,987 $ (63)(a) 120,075
Other current assets..... 95,978 5,817 1,011 (b) 102,806
Property, plant and
equipment............... 9,833 1,596 11,429
Other assets............. 13,675 4,325 15,180 (c),(d) 33,180
-------- ------- -------- --------
Total.................. $229,776 $21,824 $ 16,128 $267,728
======== ======= ======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Current liabilities...... $144,730 $ 3,763 $ 34,189 (e),(f) $182,682
Long-term debt........... 8,635 11,080 (11,080)(g) 8,635
Deferred items........... 1,836 1,836
Redeemable preferred
stock................... -- 3,227 (3,227)(h) --
Shareholders' equity..... 74,575 3,754 (3,754)(h) 74,575
-------- ------- -------- --------
Total.................. $229,776 $21,824 $ 16,128 $267,728
======== ======= ======== ========
</TABLE>
- --------
(a) Includes adjustments of (i) $375,000 to reduce inventories to approximate
fair value as determined by the Company based on its analysis of the
individual inventory items, and (ii) $312,000 to capitalize additional
costs into inventory to conform with the Company's capitalization policy.
(b) Represents the deferred tax impact of (i) certain pro forma adjustments
for reserves and accruals which are not deductible for tax purposes until
future periods, and (ii) tax basis in excess of the Company's book basis
of acquired intangibles.
(c) Represents the $19,421,000 excess of purchase price over the fair value of
net assets acquired.
(d) Eliminates Kenlin's previously recorded intangible assets of $4,241,000.
(e) Consists of an accrual of $1,189,000 for estimated expenses incurred which
are directly related to the acquisition of Kenlin.
(f) Includes borrowings of $33,000,000 incurred in connection with the
acquisition of Kenlin.
(g) Reflects the repayment of Kenlin's long-term debt.
(h) Reflects the elimination of Kenlin's redeemable preferred stock and common
shareholders' equity due to the acquisition.

17
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company is the dominant national distributor of lawn and garden products
as well as a major distributor of pet and pool supplies. As a result of both
acquisitions and internal expansion, the Company has grown rapidly from sales
of approximately $25 million in 1987 to approximately $374 million in the nine
month period ended September 30, 1995 and increased the number of Company
distribution centers from one in 1987 to 37 currently. Since 1988, the Company
has completed 22 acquisitions, making it a leader in the consolidation of
distribution channels for the lawn and garden and pet supplies industries. The
Company completed seven acquisitions in 1993, four acquisitions in 1994, one
acquisition in 1995 and to date, two acquisitions in 1996, including the
acquisition of Kenlin, the largest distributor of pet supply products in the
eastern United States. These acquisitions included four lawn and garden
distributors and eight distributors of pet supplies. Net sales for Kenlin have
increased from $44.7 million for the year ended July 31, 1993 to $63.0 million
for the year ended July 31, 1995 and operating income for Kenlin grew from
$2.2 million to $4.1 million during this same period. In fiscal 1995, lawn and
garden products accounted for approximately 74% of the Company's net sales,
pet supplies accounted for approximately 20% and pool supplies accounted for
approximately 6%.

Manufacturers and suppliers of lawn and garden products and pet supplies
have sold, and may intensify their efforts to sell, their products directly to
retailers, including major customers of the Company. In response to increased
direct sales, the Company has developed programs designed to encourage
manufacturers to continue to utilize the Company's services. In many instances
when manufacturers have increased direct sales, the Company has continued to
provide merchandising and other services to both manufacturers and retailers.
Historically, sales of Solaris products to direct accounts (referred to as
"agency sales") included lower levels of services; therefore, the Company's
gross profit as a percentage of net sales on this type of business was lower
than on full service sales.

The Company entered into an agreement effective October 1, 1995 with Solaris
to become both the master agent and master distributor for sales of Solaris
products nationwide. Management believes that the new relationship with
Solaris embodied in the Solaris Agreement has had a substantial impact on the
Company's results of operations. Under the Solaris Agreement, which has an
initial four-year term, the Company, in addition to serving as the agent and
distributor for sales of Solaris products, provides a wide range of value-
added services including logistics, order processing and fulfillment,
inventory distribution and merchandising. However, Solaris continues to
negotiate its sales prices directly with its direct sales accounts. As a
result of the Solaris Agreement, a majority of the Company's sales of Solaris
products are derived from servicing direct sales accounts, whereas in 1994 and
fiscal 1995, a majority of the Company's sales of Solaris products were made
by the Company as a traditional distributor. A substantial portion of these
sales consist of large shipments to retail distribution centers which are
characterized by a lower gross profit as a percentage of net sales compared
with sales made by the Company as a traditional distributor. The Company
believes that the operating expenses associated with this type of sale are
lower than the operating expenses associated with sales made by the Company as
a traditional distributor. The Company believes that the gross profit as a
percentage of net sales associated with the Company's services to Solaris
direct sales accounts is higher than the gross profit as a percentage of net
sales associated with the Company's historical agency sales due to the greater
services provided pursuant to the Solaris Agreement. The Company believes that
the collective impact of these factors has lead to substantially increased
sales of Solaris products, increased gross profit from sales of Solaris
products and lower gross profit as a percentage of net sales.

In addition, under the Solaris Agreement, the Company's accounts receivable
related to Solaris products sold to direct sales accounts are paid more
quickly since the amount owed to the Company is settled by Solaris within 15
days of receipt of an invoice, rather than waiting for payment by retailers in
accordance with their normal payment terms. Since entering into the Solaris
Agreement, inventories of

18
<PAGE>

Solaris products have increased since the Company is not only carrying
inventories to support its own sales of Solaris products but also certain
inventory previously carried by Solaris as well as additional inventories to
support sales of Solaris products by the Company's network of independent
distributors.

The Solaris Agreement provides for the Company to be reimbursed for costs
incurred in connection with services provided to Solaris' direct sales
accounts and to receive payments based on the growth of sales of Solaris
products. The Company also shares with Solaris in the economic benefits of
certain cost reductions, to the extent achieved. As a result, management
believes that the Company's profitability is more directly attributable to the
success of Solaris than it has been in the past.

Historically, the Company's sales have been influenced by weather and
climate conditions in the markets it serves. For example, during the first six
months of the calendar year in both 1993 and 1995 and the first three months
of the calendar year in 1996, the Company's results of operations were
negatively affected by severe weather conditions in many parts of the country.

The statements contained in this Prospectus which are not historical facts
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. Factors that could cause or
contribute to such differences include those discussed in "Risk Factors," as
well as those discussed elsewhere in this Prospectus.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the relative
percentages that certain income and expense items bear to net sales.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTH SIX MONTHS ENDED
------------------------- PERIOD ENDED -------------------
DECEMBER 26, DECEMBER 25, SEPTEMBER 30, MARCH 26, MARCH 30,
1993 1994 1995 1995 1996
------------ ------------ ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net sales............... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods sold and
occupancy.............. 83.3 84.0 84.8 84.5 87.3
----- ----- ----- ----- -----
Gross profit.......... 16.7 16.0 15.2 15.5 12.7
Selling, general and
administrative
expenses............... 13.4 13.9 12.9 15.4 11.4
----- ----- ----- ----- -----
Income from operations.. 3.3 2.1 2.3 0.1 1.3
Interest expense--net... 1.1 1.3 1.6 1.9 0.9
Other expense........... 0.3 0.2 0.2 0.3 0.1
----- ----- ----- ----- -----
Income (loss) before
income taxes and
minority interest...... 1.9 0.6 0.5 (2.1) 0.3
Income taxes (benefit).. 0.8 0.3 0.2 (0.8) 0.1
----- ----- ----- ----- -----
Income (loss) before
minority interest...... 1.1 0.3 0.3 (1.3) 0.2
Minority interest....... 0.1 -- -- -- --
----- ----- ----- ----- -----
Net income (loss)....... 1.2% 0.3% 0.3% (1.3)% 0.2%
===== ===== ===== ===== =====
</TABLE>

SIX MONTHS ENDED MARCH 30, 1996 COMPARED WITH SIX MONTHS ENDED MARCH 26, 1995

Net sales for the six months ended March 30, 1996 increased by 43.5% or
$78.9 million to $260.1 million from $181.2 million for the six months ended
March 26, 1995. Of the $78.9 million increase, approximately $60.4 million was
attributable to sales resulting from the Solaris Agreement, principally to
retail distribution centers. The increase in sales from existing operations,
$18.5 million, was due principally to the addition of stores previously
serviced by a competitor, expanded product placements and new store openings
with existing customers, as well as an increase in sales of pet supplies.

19
<PAGE>

Gross profit increased by 17.6% or $4.9 million from $28.2 million during
the six months ended March 26, 1995 to $33.1 million for the comparable fiscal
1996 period. Gross profit as a percentage of net sales decreased from 15.5% in
the six months ended March 26, 1995 to 12.7% for the comparable fiscal 1996
period. The decrease in gross profit as a percentage of net sales was
primarily due to the increase in sales under the Solaris Agreement to high
volume, low service retail distribution centers, principally in the second
quarter of fiscal 1996. Additionally, the gross profit percentage was
adversely impacted by the elimination of certain discounts and rebates which
historically had been part of the Solaris marketing programs.

As part of the Company's responsibility under the Solaris Agreement, sales,
principally to retail distribution centers, are to be sourced from a
centralized warehouse to be staffed and managed by the Company. A portion of
the total fee for servicing these retailers from this location is designed to
cover the Company's actual costs for warehousing and shipping. Due to a delay
in transitioning the operations of the warehouse from Solaris to the Company,
these costs have been incurred by Solaris; consequently both the fee and
related expenses are not included as part of the Company's operating results.
The Company now expects to commence operating this facility in the early part
of the fourth quarter of fiscal 1996. Gross profit is expected to be
positively impacted in the fourth quarter of fiscal 1996 and in future periods
by centralized warehouse fees because the fees will be recorded as revenue
while the related costs will be reflected as operating expenses.

For the six months ended March 30, 1996, selling, general and administrative
expenses increased by $1.9 million to $29.8 million from $27.9 million for the
six months ended March 26, 1995. This increase was associated principally with
the increase in net sales. As a percentage of net sales, these expenses
decreased from 15.4% during the six months ended March 26, 1995 to 11.4% for
the comparable period in fiscal 1996. This decrease was principally due to the
spreading of expenses over a higher sales volume.

Interest expense for the six months ended March 30, 1996 decreased by 28.5%
or $1.0 million to $2.4 million from $3.4 million for the six months ended
March 26, 1995. The decrease was due principally to lower average outstanding
borrowing as a result of applying the net proceeds from the sale of 5.75
million shares of the Company's stock in November 1995 and the termination of
the Monsanto trade financing agreement. Average short-term borrowings for the
six months ended March 30, 1996 were $33.8 million compared to $81.5 million
for the six months ended March 26, 1995. The outstanding borrowings include
amounts due to Solaris under the Monsanto trade financing agreement which
ended in November 1995. Purchases of Solaris products are currently handled on
typical credit terms with extended due dates.

The Company's effective income tax rate for the six months ended March 30,
1996 increased to 43.1% compared to 39.2% for the six months ended March 26,
1995, principally due to the impact of non-deductible goodwill amortization.

FIRST NINE MONTHS OF 1995 COMPARED WITH FIRST NINE MONTHS OF 1994

In 1995, the Company changed its fiscal year to the last Saturday in
September. Accordingly, the fiscal year ended September 30, 1995 was a nine
month period. As a result of this change, 1995 operating results will not be
directly comparable with 1994. The Company believes that comparing the nine
months periods of 1994 and 1995 will provide a more meaningful analysis of the
Company's operating results. Unaudited summary operating results for the nine
months ended September 25, 1994 are shown in Note 13 to the consolidated
financial statements.

Net sales for the nine months ended September 30, 1995 increased by 4.4% or
$15.6 million to $373.7 million from $358.1 million for the comparable 1994
period. The increase in net sales was due to revenue from acquired operations
and an increase in agency sales during the third calendar quarter of 1995,
offset in part by a sales decline in the Western region lawn and garden
markets. The lawn and garden sales decrease in the Western region was due
principally to adverse weather conditions and the

20
<PAGE>

loss of certain customers who elected to buy direct from the Company's major
supplier. Agency sales as a percentage of net sales increased in the first
nine months of 1995 to 12.9% compared with 9.0% for the similar 1994 period.

Gross profit decreased by 1.1% or $0.6 million from $57.5 million during the
nine months ended September 25, 1994 to $56.9 million for the comparable 1995
period. Gross profit as a percentage of net sales decreased from 16.1% in the
nine months ended September 25, 1994 to 15.2% in the comparable 1995 period.
The decrease in gross profit for the nine months ended September 30, 1995 was
due principally to lower gross margin agency sales to high volume, low service
accounts, which also typically have lower associated operating expenses. In
addition, the Company sold a higher percentage of lower margin products.

For the nine months ended September 30, 1995, selling, general and
administrative expenses increased by $2.7 million from $45.4 million for the
comparable 1994 period. As a percentage of net sales, these expenses increased
slightly from 12.7% during the first nine months of 1994 to 12.9% for the
comparable 1995 period. Of the $2.7 million increase, approximately $0.4
million is associated with the increase in sales while the balance, $2.3
million, relates to (i) increased costs related to the consolidation of
facilities in Colorado; (ii) increased costs in the pet supplies division
related to the downsizing and integration of the Company's Northern California
pet operations, (iii) costs associated with certain potential pet
acquisitions, (iv) costs associated with retention of employees in
anticipation of increased sales and (v) additional bad debt provision.

Interest expense for the first nine months of 1995 increased by 41.8% or
$1.7 million from $4.2 million for the comparable 1994 period. The increase is
due principally to a combination of higher interest rates and increased
borrowing under the Company's trade financing agreement with its major
supplier and under the Company's principal credit facility. Average short-term
borrowings for the nine months ended September 30, 1995 were $73.8 million
compared with $58.0 million for the comparable period in 1994. The average
interest rates were 9.3% and 6.9%, respectively.

The Company's effective income tax rate for the nine months ended September
30, 1995 increased to 45% compared with 40% for the similar 1994 period,
principally due to the impact of non-deductible goodwill amortization.

1994 COMPARED WITH 1993

Net sales increased by 25.9% or $86.7 million from $334.7 million to $421.4
million in 1994. Of this increase, approximately $35.6 million was
attributable to increased sales of lawn and garden products, $50.1 million to
increased sales of pet supplies and $1.0 million to other product lines. Of
the total increase in net sales, approximately $77 million was attributable to
operations acquired in the last quarter of 1993 and during the first half of
1994. The $10.0 million increase in net sales from existing operations was due
to an approximately $11.7 million increase in sales of lawn and garden
supplies and other product lines, which was offset in part by a decline in
sales of approximately $1.7 million of pet supplies due to the consolidation
of the Company's Northern California pet operations. Lawn and garden sales in
the West Coast market declined from 1993 levels by approximately $24.3 million
reflecting both increased direct sales by the Company's major supplier and, in
Southern California, the closure of the 97 store Builders Emporium chain,
which was a major customer of the Company, in the third quarter of 1993. This
sales decline was more than offset by increases of approximately $35.0 million
in the Company's other market areas.

The overall sales increase from the existing lawn and garden portion of the
business reflected a significant change in the mix of sales type compared with
1993. Agency sales, which carry a significantly lower gross profit margin,
accounted for approximately 11.2% of total lawn and garden sales in 1994, as

21
<PAGE>

compared with 5.1% in 1993. The effect of this change in sales mix was to
reduce the sales volume of higher gross profit margin individual store
shipments while increasing the volume of agency sales. The net impact of this
sales mix change was to reduce the total lawn and garden gross profit margin
by 1.3% in 1994. Net sales of pet supplies increased by approximately 121% or
$50.1 million compared to 1993, with approximately $51.8 million attributable
to newly acquired operations. Total net sales of pet supplies as a percentage
of total Company sales increased from 12.4% in 1993 to 21.7% in 1994.

Total gross profit increased by 20.4% or $11.4 million from $55.9 million in
1993 to $67.3 million in 1994. Gross profit as a percentage of net sales
decreased from 16.7% in 1993 to 16.0% in 1994. Gross profit from existing
operations declined by $3.7 million compared with 1993, and gross profit from
existing operations as a percentage of net sales declined from 16.7% in 1993
to 15.1% in 1994. The decrease in gross profit from existing operations was
due principally to the change in sales mix whereby a significant volume of
individual store sales was replaced by lower margin agency sales. The overall
increase in gross profit was due to newly acquired operations whose customer
base is comprised of smaller independent retailers. This type of customer
typically generates a higher gross margin than that associated with larger
chain accounts; however, the increase in gross margin tends to be partially
offset by increased costs associated with the processing and shipping of
smaller orders.

Total selling, general and administrative expenses were $58.5 million or
13.9% of net sales in 1994 compared with $44.7 million or 13.4% of net sales
in 1993. Of the $13.8 million increase over 1993, $13.8 million was
attributable to companies acquired during the last quarter of 1993 and the
first half of 1994. Selling, general and administrative costs related to
existing operations stayed virtually unchanged from 1993 to 1994. As a
percentage of net sales, selling, general and administrative expenses of
existing operations were 13.0% compared with 13.4% for 1993.

Principally as a result of the reduction in gross profit margins from 16.7%
in 1993 to 16.0% in 1994, income from operations decreased $2.4 million from
$11.2 million in 1993 to $8.8 million in 1994, and as a percentage of net
sales declined from 3.3% in 1993 to 2.1% in 1994.

Interest expense increased 47.9% over 1993 from $3.8 million in 1993 to $5.6
million in 1994. The increase of $1.8 million was attributable to a
combination of increased borrowings from a trade financing agreement with the
Company's major supplier and the Company's principal credit facility as well
as an increase in the prime rate, which increased from 6.0% in January 1994 to
8.5% in November 1994. The increase in the prime rate tended to offset the
advantageous rate of 1 1/4% below prime under the Company's trade financing
agreement. The increase in outstanding borrowings in 1994 compared with 1993
reflects, in part, the reduction in the Company's short-term debt in 1993 as
the result of applying approximately $18.0 million of proceeds received from
its initial public offering in July 1993 and increased borrowings resulting
from acquisitions made during 1994.

Average short-term borrowings were $56.0 million during 1994 compared with
$30.9 million for 1993. The average interest rates were 7.3% and 8.0%,
respectively.

The Company's effective tax rate for 1994 and 1993 was 40%.

INFLATION

The results of operations and financial condition are presented based upon
historical cost. While it is difficult to accurately measure the impact of
inflation, the Company believes that the effects of inflation on its
operations have been immaterial.

SEASONALITY AND QUARTERLY FLUCTUATIONS

The Company's business is highly seasonal. In 1994 and 1993, approximately
63% and 67%, respectively, of the Company's sales occurred in the first six
months of the calendar year. Substantially all

22
<PAGE>

of the Company's operating income is typically generated in this period which
has historically offset the operating losses incurred during the rest of the
year. Typically, the lawn and garden business is more seasonal than the pet
supplies business, with a higher proportion of sales occuring in the first two
calendar quarters. In fiscal 1995, the Company's lawn and garden business
accounted for approximately 74% of net sales, pet supplies accounted for
approximately 20% of net sales and pool supplies accounted for approximately
6% of net sales.

The following table provides certain unaudited quarterly financial
information for the calendar periods indicated. In management's opinion, this
information reflects all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the information for the
periods presented. These results may not be indicative of future results.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------------
MARCH 27, JUNE 26, SEPT. 25, DEC. 25,
1994 1994 1994 1994
------------------ -------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales.................. $110,087 $157,086 $ 90,965 $63,289
Gross profit............... 17,750 25,415 14,359 9,807
Income (loss) from
operations................ 4,651 10,030 (2,537) (3,302)
Net income (loss).......... 1,752 5,228 (2,549) (3,026)
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------------
MARCH 26, JUNE 25, SEPT. 30, DEC. 30,
1995 1995 1995(1) 1995(2)
------------------ -------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales.................. $117,925 $153,844 $101,965 $78,112
Gross profit............... 18,361 21,953 16,588 11,320
Income (loss) from
operations................ 3,589 5,869 (631) (2,532)
Net income (loss).......... 747 1,844 (1,512) (2,363)
<CAPTION>
THREE MONTHS ENDED
MARCH 30, 1996
------------------
(IN THOUSANDS)
<S> <C>
Net sales.................. $182,020
Gross profit............... 21,806
Income from operations..... 5,875
Net income................. 2,791
</TABLE>
- --------
(1) The three month period ended September 25, 1994 was a 13 week period,
whereas the three month period ended September 30, 1995 was a 14 week
period.
(2) In 1995, the Company changed its fiscal year end to the last Saturday in
September. Accordingly, the fiscal year ended September 30, 1995 was a
nine month period, and the quarter ended December 30, 1995 is the first
quarter of fiscal 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically financed its growth through a combination of
bank borrowings, supplier credit and internally generated funds. In addition,
the Company received net proceeds (after offering expenses) of approximately
$54.0 million from its two public offerings.

The Company's business is highly seasonal and its working capital
requirements and capital resources track closely to this seasonal pattern.
During the first quarter of each calendar year, inventory, accounts
receivable, accounts payable, and short-term borrowings begin to increase,
reflecting the build up of

23
<PAGE>

inventory and related payables in anticipation of the peak selling season.
During the second quarter of the calendar year, inventory levels decrease
while account receivables peak and short-term borrowings start to decline as
cash collections are received during the peak selling period. In the third
quarter of the calendar year inventory levels are at their lowest level and
receivables and accounts payable are substantially reduced through conversion
of accounts receivable to cash. During the fourth quarter of the calendar
year, accounts receivable reach their lowest levels, while inventory and
accounts payable and short-term borrowings begin to increase. Since the
Company's short-term credit line fluctuates based upon a specified asset
borrowing base, the fourth quarter of each calendar year is typically the
period when the asset borrowing base is at its lowest and consequently the
Company's ability to borrow is at its lowest.

For the six months ended March 30, 1996, the Company used cash in operating
activities of $17.4 million reflecting the normal cycle of inventory and
receivables build up. Net cash generated from investing activities of $1.4
million resulted from the sale of the Visalia, California warehouse. This
facility had been leased to a third party since February, 1995, and was not
considered necessary for future requirements. Cash generated from financing
activities of $16.0 million consisted of net proceeds from the sale of 5.75
million shares of the Company's stock less repayment of debt.

For the nine months ended September 30, 1995, the Company generated cash
from operating activities of $10.4 million. During the same period, the
Company used $1.3 million of cash to acquire a small pet distribution
business. Cash used by financing activities consisted primarily of repayments
of short and long-term borrowings of $7.2 million. Nine month cash flows
differ from annual cash flows due to seasonality factors discussed above.

The Company generated cash from operating activities of $5.7 million and
$7.1 million in fiscal years 1993 and 1994, respectively. Cash used in
investing activities, which included approximately $6.7 million to acquire
seven companies during 1993, and $14.0 million to acquire four companies in
1994, and the purchase of warehouse and delivery equipment, office furniture
and equipment and leasehold improvements in each of its fiscal years 1993 and
1994 was $8.2 million and $14.3 million, respectively. Cash provided by
financing activities of approximately $7.3 million in 1994 consisted primarily
of proceeds related to the Company's short-term credit facility reduced by
approximately $3.3 million repayments of its long-term debt.

The Company has a line of credit with Congress Financial Corporation
(Western) for $75 million. The available amount under the line of credit
fluctuates based upon a specific asset borrowing base. The line of credit,
which bears interest at a rate equal to the prime rate plus 3/4% per annum, is
secured by substantially all of the Company's assets. At March 30, 1996, the
Company had outstanding borrowings of approximately $19.8 million and had an
additional $55.2 million of available borrowing capacity under this line. In
June 1996, the Company entered into a definitive agreement to acquire Kenlin,
the largest distributor of pet supply products in the eastern United States.
The Company plans to use its line of credit to finance the $33 million
purchase price of the acquisition. The Company's line of credit contains
certain financial covenants such as minimum net worth and minimum working
capital requirements. The line also requires the lender's prior written
consent to any acquisition of a business.

The Company believes that cash flow from operations, funds available under
its line of credit and its arrangements with suppliers will be adequate to
fund its presently anticipated working capital requirements for the
foreseeable future. The Company anticipates that its capital expenditures will
not exceed $2.8 million for the next 12 months.

As part of its growth strategy, the Company has engaged in acquisition
discussions with a number of companies in the past and it anticipates it will
continue to evaluate potential acquisition candidates. If one or more
potential acquisition opportunities, including those that would be material,
become available in the near future, the Company may require additional
external capital. In addition, such acquisitions would subject the Company to
the general risks associated with acquiring companies, particularly if the
acquisitions are relatively large. See "Risk Factors--Expansion;
Acquisitions."

24
<PAGE>

BUSINESS

OVERVIEW

The Company is the dominant U.S. distributor of lawn and garden products as
well as a major distributor of pet and pool supplies. The Company has grown
rapidly from sales of approximately $25 million in 1987 to approximately $374
million in the nine month period ended September 30, 1995. In fiscal 1995,
lawn and garden products accounted for approximately 74% of net sales, pet
supplies accounted for approximately 20% and pool supplies accounted for
approximately 6%. As a result of both acquisitions and internal expansion, the
number of Company distribution centers has grown from one in 1987 to 37
currently. Since 1988, the Company has completed 22 acquisitions, making it a
leader in the consolidation of distribution channels for the lawn and garden
and pet supplies industries. The Company completed seven acquisitions in 1993,
four acquisitions in 1994, one acquisition in 1995 and to date, two
acquisitions in 1996, including the acquisition of Kenlin, the largest
distributor of pet supply products in the eastern United States. These
acquisitions included four lawn and garden distributors and eight distributors
of pet supplies. Net sales for Kenlin have increased from $44.7 million for
the year ended July 31, 1993 to $63.0 million in for the year ended July 31,
1995 and operating income for Kenlin grew from $2.2 million to $4.1 million
during this same period. Growth has also been driven by the addition of new,
and expansion of existing, product lines and services, new customers and
increased sales to certain existing customers.

INDUSTRY OVERVIEW

Lawn and Garden. The lawn and garden industry has retail sales in excess of
$20 billion. According to the 1995-1996 National Gardening Survey conducted
for the National Gardening Association by the Gallup Organization, 72% of the
approximately 100 million households in the United States participated in some
form of gardening in 1995. The Company believes that gardening is one of the
most popular leisure activities in America and that as the population of
America ages, gardening's popularity will continue to increase.

The lawn and garden supply industry is complex for a number of reasons. The
industry is highly seasonal with half of all sales occurring during the peak
spring gardening season and two-thirds of all sales occurring in the first six
months of the calendar year. The industry is also complex because of the
breadth and depth of merchandise offered including fertilizers, insecticides,
sprinkler systems, and gardening tools, as well as perishable items such as
live plants and higher priced items such as power tools. Further, merchandise
selection is complicated by varying regional and local climate conditions and
problems such as pest infestations and weed growth. There are at least 10
distinctly different climatic zones in the continental U.S., each of which has
different lawn and garden needs. Finally, lawn and garden sales are driven by
weekly weather conditions and manufacturer promotions which heavily impact
consumer demand for lawn and garden products.

As a result of the complexity and variability of lawn and garden sales,
retailers, manufacturers and suppliers must constantly adapt to changes in
consumer demand. Industry retailers--ranging from small local garden centers
to regional and national mass merchandisers and discounters--must carefully
plan their lawn and garden needs prior to the peak selling season and adjust
those plans as the season develops. Because of the large number of product
SKUs in the category, merchandise availability from a wide selection is
important. Having rapid access to these goods is also important, particularly
for national retailers, in adapting to regional and local lawn and gardening
conditions. Lastly, retailers need quick deliveries to keep shelves full
(especially prior to weekends) and require high in-stock and order-fulfillment
rates. Manufacturers and suppliers have historically relied on distributors to
inventory large volumes of product close to the retail market in order to
efficiently deliver products in a timely manner to retail stores.
Manufacturers and suppliers also rely on distributors to support and execute
promotion and

25
<PAGE>

marketing plans and training of store employees at the store and regional
level. Therefore, distributors represent an effective solution to the retailer
facing a complex industry and an efficient means for a manufacturer or
supplier to distribute and market its products.

Historically, lawn and garden products were distributed through small local
distributors that provided knowledgeable and personalized services to small
local independent nursery centers and retailers. In recent years, as regional
and national chains of retailers such as Wal*Mart, Home Base, Target and Home
Depot have grown, there has been a trend towards consolidation among
distributors in this category with larger regional distributors experiencing
substantial growth as these volume driven accounts demand the administrative
efficiency as well as the value-added services larger distributors can
provide. Therefore, to the extent that sales of lawn and garden supplies shift
from smaller more specialized nursery stores to larger regional and national
chains, the Company believes that there will be a similar trend towards
consolidation of distributors leading to the predominance of regional and
national distributors.

Pet Supplies. In 1994, over half of all U.S. households, or approximately 53
million households, owned at least one pet and 40% of these households owned
more than one pet. The Company believes that pet ownership has increased as a
result of an increase of empty-nest households with additional disposable
income to spend on pets and an increase of families with young children. The
Company believes that sales of premium pet food and pet supplies have
increased due to these changing demographics, the increasing pet owner concern
for animal nutrition and safety and recommendations by veterinarians and
breeders.

The Company believes the channels of distribution for pet food and pet
supplies are highly fragmented. Pet food manufacturers generally sell directly
to mass merchants and supermarkets. With respect to pet supplies, however,
management believes that the large number of product SKUs carried by specialty
pet stores make merchandise availability from a wide selection and short
delivery times important to retailers who require high in-stock and order-
fulfillment rates. Because of the fragmented nature of the pet supply
industry, manufacturers and suppliers have historically relied on distributors
to inventory large volumes of product close to the retail market and to
support and execute promotion and marketing plans and training of store
employees at the store and regional level. In addition, aquarium and fish
supply products are more complex than dog or cat supplies and often provide
independent pet retailers that carry such products a unique advantage in
product knowledge and services. Therefore, the Company believes it represents
an effective solution to the specialty pet retailer's problems and an
efficient means for a manufacturer or supplier to distribute and market its
products.

BUSINESS STRATEGY

The Company's goals are (i) to be the dominant distributor of lawn and
garden products and pet supplies in the United States as a whole and in each
market area it serves, and (ii) to develop over the long-term an array of
proprietary brand name consumer products that are complementary to the
products it currently distributes. The Company's business strategy is designed
to meet the needs of retailers and manufacturers, both of which are critical
to the Company's success. The following summarizes key elements of the
Company's business strategy.

Comprehensive Product Selection. The breadth and depth of the Company's
comprehensive selection of approximately 24,000 lawn and garden products and
approximately 21,000 pet supply products enable retailers to fulfill a
substantial portion of their product needs from a single source. In lawn and
garden supply, the Company generally focuses on those products that are suited
to distribution due to their seasonality, variable sales movements, complexity
to consumers and retailers, handling and transportation difficulties, and
which therefore generally require value-added services. In pet supplies, the
Company carries many of the best-known brands. The Company does not carry live
plants, power tools, live animals or higher priced items which are generally
sourced directly.

26
<PAGE>

Value-Added Services. The Company offers a complete menu of value-added
services independently priced so that each garden or pet customer can choose a
program tailored to its individual needs. Value-added services offered include
national, regional and store level merchandise planning, promotional planning
and support, in-store merchandising and training, reorder support, stock-
balancing, as well as the actual shipping, warehousing and distribution
functions. The Company aggressively seeks opportunities to increase the range
and scope of these value-added services to help retailers sell more product.

National Presence. The Company has invested significant resources to build
and consolidate its position as the dominant national distributor of lawn and
garden supplies as well as a major national distributor of pet and pool
supplies. Management believes that this strategy makes the Company more
attractive and efficient to both manufacturers and retailers and will enhance
its ability to dominate market areas.

Manufacturer Services. To those manufacturers that sell products directly to
retailers, the Company offers servicing arrangements pursuant to which the
Company performs sales merchandising, warehousing, delivery, store training,
billing and other services for the direct sale accounts. The Company intends
to pursue longer-term joint ventures and agency arrangements with key
manufacturers that sell direct.

Efficient Operations. The Company believes that its strategically located
warehouses, investments in MIS systems, employee training and incentive
measures have helped the Company improve its operating efficiencies. In order
to attract new retail customers and maintain relationships with existing
retailers, the Company also strives to maintain a high in-stock position and
order-fulfillment rate.

Large Retailers Management utilizes the Company's comprehensive product
selection, national presence, value-added services and efficient operations to
develop relationships with large national and regional chains and independent
retailers that have the ability to generate significant sales volume. The
Company believes that it offers these retailers an efficient and cost
effective method of distribution. These retailers generally purchase more
merchandise per order which permits the Company to increase efficiencies,
maximize economies of scale and improve sales. The Company believes that these
retailers are gaining market share in the lawn and garden industry and hopes
to grow with its customers to the extent they continue to grow.

GROWTH STRATEGY

The Company has developed a multi-faceted growth strategy that is designed
to increase its position as the dominant distributor of lawn and garden
products and to continue to consolidate the fragmented pet supplies industry.
The Company intends to continue to expand in these markets by (i) continuing
to make strategic acquisitions, (ii) obtaining new customers and increasing
sales to existing customers, and (iii) obtaining new product lines or
expanding existing product lines that are currently distributed by the
Company. In addition, over the long-term the Company intends to develop an
array of proprietary consumer products that are complementary to the products
it currently distributes.

Acquisitions. The Company seeks to continue to strengthen its leadership
position in the consolidation of the distribution channels for the lawn and
garden and pet supply industries. The Company's strategy is to acquire
companies in these industries that enable it to gain access to new customers,
enter new geographical areas, lower operating cost levels and improve service
levels to existing customers. Management believes that the Company's national
presence brings certain synergies to regional distributors that are appealing
to manufacturers. In addition, the Company believes the fragmented nature of
the pet supply industry and the continuing consolidation of both retailers and
distributors will create a number of acquisition opportunities. For example,
in July 1996, the Company acquired Kenlin Pet Supply, Inc., the largest
distributor of pet supply products in the eastern United States.

27
<PAGE>

Customer Growth. The Company's national presence has enabled it to obtain
new customers as well as expand sales to certain existing customers desiring
more centralized and efficient distribution. For example, during the period
from 1991 to December 31, 1995, the Company added approximately 1,100 Wal*Mart
stores through acquisitions and internal growth and now serves approximately
1,600, or 75% of Wal*Mart stores nationally. The Company's goal is to grow
with its customers, such as Wal*Mart and Home Depot, to the extent they
continue to add new stores and expand lawn and garden sections. Management
also plans to continue to seek new relationships with large volume accounts
whether on a local, regional or national scale. The Company's acquisitions of
distributors in the pet supply industry have enabled it to expand
significantly sales to a large number of independent pet retailers across the
western United States. See "--Retailers."

Product Line Expansion. The Company will also seek to develop or expand
other product lines where the Company believes its strength in managing
complex product categories or its national presence will make the product line
a value-added member of the distribution channel. In addition, the Company
perceives significant opportunities in the pet supply business as the industry
consolidates in a manner similar to the lawn and garden industry. Management
believes that its ability to deliver pet supplies cost-effectively and to
provide value-added services to retailers has contributed to the Company's
success in this area.

Grow Branded Products. The Company intends to seek to increase sales of its
Matthews' line of redwood products and its Grant's line of ant control
products, as well as its other proprietary products, through aggressive
merchandising and selective introduction of new products. The Company also
intends to pursue the acquisition of manufacturers of complementary brand name
consumer products which can benefit from the Company's distribution expertise.
See "--Proprietary Branded Products."

Seek Additional Long-Term Profit-Based or Sales-Based Distribution
Arrangements. The Company intends to seek to negotiate additional long-term
agreements with manufacturers, such as the Solaris Agreement, which will
provide the Company with payments based on the profitability or sales of the
product line which it is distributing. The Company believes that such
arrangements afford it with some of the incentives usually associated with
ownership of a consumer products manufacturing business without the attendant
risks of ownership.

PRODUCTS

In fiscal 1995, lawn and garden products accounted for approximately 74% of
the Company's net sales, pet supplies accounted for approximately 20% and pool
supplies accounted for approximately 6%. The Company offers its customers a
comprehensive selection of brand name lawn and garden products and pet and
pool supplies. This selection consists of approximately 45,000 products from
approximately 1,000 manufacturers. The Company generally focuses on those lawn
and garden brand name products that are suited to distribution due to their
seasonality, variable sales movements, complexity to consumers and retailers,
handling and transportation difficulties, and which therefore generally
require value-added services. The Company focuses on these types of products
because it believes that retailers cannot source these products directly from
suppliers as effectively as they can through distributors and that
manufacturers of these products are likely to view the services offered by the
Company as highly desirable and cost-effective. The Company carries many of
the best-known brands in pet foods and supplies and combines these products
into single shipments, providing its pet supplies customers a wide variety of
products on a cost-effective basis. The Company does not carry live plants,
animals, power tools or high priced items which are generally sourced directly
from manufacturers. The Company believes that its broad and deep selection of
products permits retailers to fulfill substantially all of their lawn, garden,
pet and pool supply requirements from a single source. In fiscal 1995,
substantially all of the Company's products had suggested retail prices of $20
or less.

28
<PAGE>

The following table indicates the approximate number of SKUs, the
approximate number of manufacturers and suppliers and selected brand names in
each of the Company's current major product categories according to the
Company's internal records. The Company may change from time to time the
selection and mix of its products, which may change the approximate number of
manufacturers and suppliers and SKUs depending on the season.

<TABLE>
<CAPTION>
APPROXIMATE
NUMBER OF
MANUFACTURERS APPROXIMATE
AND NUMBER OF SELECTED
PRODUCT CATEGORY SUPPLIERS SKUS BRAND NAMES
---------------- ------------- ----------- -----------
<C> <C> <C> <S>
Chemicals and Fertilizer(1)................ 100 4,000 Ortho, Round-Up,
Miracle-Gro, Green
Light, American
Cyanamid, Ironite, Raid,
Black Flag, Lilly
Miller, Grant's
Other Lawn and Garden Products(2).......... 700 20,000 Matthews, Sunset,
Gilmour, Corona,
Rainbird, Rubbermaid,
Perky-Pet
Pet Supplies(3)............................ 200 21,000 Hagen, Tetra/Second
Nature, All Glass
Aquariums, Zodiac, Penn
Plax
Pool Supplies and Other Seasonal Items(4).. 20 400 HTH, Pace
</TABLE>
- --------
(1) Category includes fertilizers, insecticides, weed killers, herbicides,
animal repellents, other chemicals and electronic pest controls.
(2) Category includes barbecues, bird feeders, lawn and flower seeds, tomato
baskets, gloves, instructional books, plant stakes, safety equipment,
plant meters, weather instruments, wheelbarrows, spreaders, rakes, long
handle tools, hand tools, brooms, axes, shears, saws, hedge tools, hoses,
sprayers, dusters, sprinklers, drip watering systems and nozzles.
(3) Category includes various pet supplies and pet care products and dog, cat,
fish and bird food.
(4) Category includes pool chemicals, equipment, toys, Christmas products and
other seasonal items.

SALES AND SERVICE

The Company's strategy is to offer a broad range of services to help
retailers and manufacturers maximize their sales and profitability. The
Company has implemented this strategy by developing a knowledgeable and
profit-incented sales force and by offering a broad menu of services.

Sales. At May 31, 1996, the Company employed approximately 350 sales and
marketing personnel located throughout its distribution center network. Sales
and marketing personnel typically service retail customers within a 250 mile
radius of the distribution centers. They are trained with knowledge of local
market conditions, the Company's products and merchandising skills. A
significant number of sales personnel are certified nurserymen, horticultural
graduates and/or master gardeners. The Company has divided its sales force
into key account managers, who act as consultants to the buyers of large
retailers, and field sales personnel, who are responsible for servicing
specific retail customers in their assigned territory.

Menu of Value-Added Services. The Company offers retailers and manufacturers
a comprehensive menu of value-added services with separate or combination
prices from which each customer may select according to its individual needs.
Each value-added service is generally designed either to increase a retailer's
sales or decrease a retailer's costs. The Company generally offers retailers
deliveries within one business day from the time the Company receives an
order. In addition to the standard delivery services, many of the Company's
customers choose a high percentage of the value-added services listed below.

29
<PAGE>

Program Development. The Company's key account managers recommend and assist
retail buyers in developing national and local product listings, advertising,
promotions and shelf space planning at the beginning of and during the peak
selling season to optimize store sales and profits.

Training of Store Employees. The Company's sales personnel conduct formal
and informal product training sessions with store personnel to help them
provide informed consumer service. The Company believes that the demand for
this service is greater at larger regional and national retail chains due to
their higher employee turnover and employee inexperience with gardening
products.

Weekend Consumer Clinics. Sales personnel also conduct and assist in
preparing and giving in-store weekend consumer education clinics to help
increase retail sales and improve consumer relations.

Designing and Setting Store Displays. The Company's sales personnel assist
in designing and planning store shelves at the beginning of each season. Their
expertise in product knowledge, sales trends, in-season promotions and
consumer demand for specific products allows them to help each store adjust
shelf stock and displays to increase sales in a timely fashion.

Point-of-Purchase. The Company assists the manufacturer and retailer in the
design and installation of point-of-purchase ("POP") material to increase
sales. The POP material is generally matched to manufacturers' advertising and
promotions as well as local lawn, gardening and insect problems.

Merchandising of Shelf Stock. The Company's store service personnel
physically restock store shelves with all the Company's merchandise on a
weekly basis. This service can also include price stickering for stores not on
electronic point-of-sale systems.

Electronic Data Interchange ("EDI"). The Company's systems offer EDI
capabilities to retailers which can include paperless invoices, payments and
product history movements to help retailers monitor, plan and order products
at a lower administrative cost.

"Hot Shot" Deliveries. The Company offers rush deliveries to help retailers
satisfy high consumer demand. This service is often critical to keep retailers
from being out-of-stock on a weekend during the peak selling season.

The Company believes that retailers choose these services because the
Company can in many cases provide them more efficiently and effectively than
manufacturers or retailers themselves. The Company's sales force often advises
and assists store management to increase or decrease shelf space of certain
products to match the expected and unexpected seasonal demands. The Company
believes that a typical store needs to change the shelf space dedicated to
lawn and garden products several times during the peak selling season. The
sales force also often highlights specific products appropriate for the local
market.

30
<PAGE>

RETAILERS

The Company focuses on selling lawn and garden products to retailers with
high volume retail stores. The Company's customer base is comprised of a wide
range of retailers, including "do-it-yourself" superstores, mass merchants,
warehouse clubs, high volume local and regional nurseries, regional and
national chains of drug and grocery stores and specialty pet stores. The
following table sets forth selected lawn and garden supply and pet supply
customers of the Company for each major category of retailer.

<TABLE>
<CAPTION>
DO-IT-
YOURSELF MASS HIGH-VOLUME DRUG AND SPECIALTY
SUPERSTORES MERCHANTS NURSERIES GROCERY STORES PET STORES
----------- --------- ------------------ ------------------ --------------------
<S> <C> <C> <C> <C>
Builders Square Wal*Mart Bachman Nurseries Albertsons Petco
Eagle Hardware & Garden Target Calloway's Nursery Bruno's PETsMART
Home Depot Kmart Frank's Long's Drugstores Pet Supply Warehouse
Home Base Bi-Mart Navlet's Nurseries Payless Drugstores
Lowes Woolworth Pike Nurseries Raleys
Orchard Supply Hardware Sunbelt Nurseries
Payless Cashways
Price/Costco
</TABLE>

As a result of its national presence, the Company has an opportunity to
enter into relationships with national chains, whereby the Company, directly
or through its affiliates, provides services to all or substantially all of
the individual stores in the chain. From the point of view of the national
retailer, such an arrangement offers the benefit of a high level of service,
lower cost of doing business and administrative efficiencies. Because these
arrangements are not formalized in writing, these retailers may at any time
purchase products from competing distributors.

Most major retailers, including customers of the Company, currently purchase
a portion of their lawn and garden products directly from certain large
manufacturers rather than through distributors such as the Company. If a
number of the Company's major customers were to substantially shift or
increase their purchases to direct shipments from manufacturers, the sales and
earnings of the Company could be adversely affected. See "Risk Factors--Direct
Sales," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "--Competition."

The Company's current practice on product returns generally is to accept and
credit the return of unopened cases of products from customers where the
quantity is small, where the product has been misshipped or the product is
defective. The Company has arrangements with its manufacturers and suppliers
to stock balance and/or credit the Company for a certain percentage of
returned or defective products. While in the past the Company's return
practice has not caused any material adverse impact on operations, there can
be no assurance in the future that the Company's operations will not be
adversely impacted due to the return of products.

MANUFACTURERS AND SUPPLIERS

The Company believes that the reason manufacturers and suppliers in the lawn
and garden industry use distributors to ship a large percentage of their
products to retailers is because it is a highly efficient method of
distribution. In an industry with a large, diverse group of retailers combined
with a relatively short and dynamic selling season, the Company believes that
in most instances during the peak selling season each manufacturer or supplier
would need to make weekly deliveries of an uneconomical volume of products to
a large number of retailers in order to satisfy consumer demand. Similarly,
each week retailers would have to place multiple orders and manage separate
deliveries from a large number of manufacturers and suppliers rather than from
a comparatively small number of distributors. The Company can typically
deliver many products with one truck (often on one or more pallets for each
store) as part of its delivery route to a number of stores. On the other hand,
the same order using direct shipments from manufacturers or suppliers would
require multiple deliveries from the various manufacturers and suppliers.

31
<PAGE>

The Company's national presence enables manufacturers and suppliers to
access retail outlets and end users through one primary distributor. In
addition, the Company's menu of value-added services to retailers includes
product promotion and merchandising support that the Company believes many
manufacturers and suppliers could not efficiently perform. While the Company
purchases products from approximately 1,000 different manufacturers and
suppliers, the Company believes that approximately 29% and 40% of the
Company's net sales for the nine month period ended September 30, 1995 and the
six months ended March 30, 1996, respectively, were derived from products
purchased from Solaris.

Prior to the acquisition of Ortho by Monsanto, both Ortho (in late 1991) and
Monsanto (in 1993) had initiated direct sale programs. Solaris, a strategic
business unit of Monsanto, expanded these direct sales programs in 1994, which
now constitute a majority of Solaris' sales. The Company believes that these
programs had, during 1994 and fiscal 1995, an adverse effect on the Company's
lawn and garden business. The Company further believes that the adverse impact
of these programs will be mitigated by the Solaris Agreement, although there
can be no assurance in this respect.

THE SOLARIS AGREEMENT

The Company entered into an agreement with Solaris effective October 1, 1995
to become the master agent master distributor for sales of Solaris products
nationwide.

The Company believes that a significant portion of its net sales and
operating income during fiscal 1996 is attributable to its new relationship
with Solaris. Under the Solaris Agreement, Solaris is obligated to reimburse
the Company for costs incurred in connection with services provided by the
Company to Solaris' direct sales accounts. In addition, the Company receives
payments based on the level of sales of Solaris products to these accounts,
and these payments are subject to increase based on the growth of sales of
Solaris products. The Company also shares with Solaris in the economic
benefits of certain cost reductions, to the extent achieved. It is possible
that disagreements could arise between Solaris and the Company as to
measurement of the costs incurred in servicing Solaris' direct sales accounts.
The cost reimbursement arrangement is based on estimates which are subject to
reconciliation at the end of each fiscal year. As a result, the Solaris
Agreement could contribute to variability in the Company's operating results.
The new relationship with Solaris embodied in the Solaris Agreement does not
assure that the Company will be profitable overall.

Under the Solaris Agreement, Solaris continues to negotiate prices directly
with its direct sales accounts. As a result of the Solaris Agreement a
majority of the Company's sales of Solaris products are derived from servicing
direct sales accounts, whereas in 1994 and fiscal 1995, a majority of the
Company's sales of Solaris products were made by the Company as a traditional
distributor. The Company acts as the master agent on direct sales of Solaris
products to certain major retailers and the master distributor in connection
with sales of Solaris products to other distributors and retailers. The
Solaris Agreement contains provisions which, without the consent of Solaris,
could limit the Company's ability to distribute certain lawn and garden
products manufactured by suppliers other than Solaris. These provisions could
result in lower sales of non-Solaris products, which could have an adverse
effect on the Company's business. The Solaris Agreement does not expire until
September 30, 1999. However, Solaris has the right to terminate the agreement
prior to its expiration in the event of a material breach of the agreement by
the Company, including the Company's failure to satisfy certain performance
criteria, or under certain other circumstances, including a sale of Solaris.
Any such early termination would have a material adverse effect on the
Company.

In July 1995, the Company received from Monsanto Company $900,000 in
exchange for its issuance of 100 shares of Series A Preferred Stock and a
warrant to purchase up to 500,000 shares of the Company's Common Stock with an
exercise price of $9.00 per share. See "Description of Capital Stock--
Preferred Stock."

32
<PAGE>

PET SUPPLIES

The Company's most significant new product line, pet supplies, was
introduced in 1990 when the Company acquired the assets of Weyerhaeuser Garden
Supply Company ("WGS"), a subsidiary of Weyerhaeuser Corporation, with
distribution operations in both the lawn and garden and the pet supply
industries. Sales in this category comprised approximately 20% of the
Company's net sales in fiscal 1995. In July 1996, the Company acquired Kenlin
Pet Supply, Inc., the largest distributor of pet supply products in the
eastern United States. Management intends to continue to expand this business
line due to the relatively large number of SKUs (approximately 21,000), the
fragmented nature of the retail segment for pet supplies, the lack of any
national distributor in this field and a more steady year-round sales volume
with a peak selling season in the last quarter of the calendar year.

PROPRIETARY BRANDED PRODUCTS

The principal product lines owned by the Company are the Matthews' line of
redwood products, the Grant's line of ant control products, the Greentouch
line of cutting tools and four proprietary brands of fertilizer. The Matthews'
line of redwood products consists of redwood tubs, planter boxes and
trellises. The Grant's line of ant control products consists of ant stakes,
granules and twists and ties. The Greentouch line of cutting tools consists of
small hand tools used for gardening which are supplied to the Company by a
contract manufacturer located in the Far East. The Company has four
proprietary brands of fertilizer--Colorado's Own and Mountain States, which
are manufactured by the Company, and Easy-Gro and Turf Magic, which are
supplied to the Company by contract manufacturers. Additionally, the Company
manufactures aquariums sold under the brand name Island Aquarium. Aggregate
sales of these products during fiscal 1995 were approximately $14 million.
Over the long-term, the Company intends to pursue the acquisition of
additional proprietary branded products which would benefit from access to the
Company's distribution system and expertise.

MANAGEMENT INFORMATION SYSTEMS

During their weekly visits to the retail stores, sales personnel transmit
orders to the appropriate distribution centers in any one of three methods:
remote order entry units (hand held, electronic devices), telephone or
facsimile. Generally, sales personnel transmit orders several times each day.
Certain retailers can also order products directly through the Company's EDI
system or by purchasing items directly at each distribution center. After
customer orders are received and processed, shipping tickets are printed and
credit approved prior to the orders being sent to the warehouse manager. The
Company's warehouse employees then fill orders by manual selection and
packaging. The Company believes that due to the unusual shapes and sizes of
its products (e.g., hand held tools, wheelbarrows and bags of fertilizer)
current automatic order selection systems are not as efficient and cost
effective as the Company's current manual systems.

The Company's management information systems collect data needed for
receivables and inventory management, customer, product and facility
profitability analysis, as well as permit electronic data interface with
customers and suppliers. The Company is presently electronically connected
with several major customers with a variety of applications that range from
purchase order receipt to paperless invoicing. The Company has also purchased
and is now using a new shelf space planning system that optimizes retail shelf
space utilization and profitability. The Company receives more than a majority
of its daily order volume from field sales representatives utilizing hand-held
order entry computers. The Company's systems enable it to provide delivery
within one business day.

The Company is presently upgrading and installing one uniform, integrated
system on IBM Model AS-400 computers across the United States at an estimated
cost to complete of $2 million. The Company has completed the installation of
the new system for the Southwest, Midwest and Southeast regions. The Company
expects to convert the remaining regions to the new system within the next
twelve months.

33
<PAGE>

No assurances can be given that such transition and system enhancement can be
accomplished in a timely and cost-effective manner without disrupting the
Company's operations. In addition, there can be no assurance that the
Company's current system or planned upgrade will be sufficient or effective
and that further investments in management information systems will not be
necessary.

DISTRIBUTION

In order to develop the most effective possible national distribution
network, the Company relies not only on its 37 Company-operated, distribution
centers (see "--Properties"), but also on its affiliation arrangement with two
leading regional distributors of lawn and garden products and, in the case of
Solaris products, on agreements with a group of 32 independent distributors
for specific geographic areas.

The Company generally will make deliveries from its distribution centers
within one to two days after receipt of the order and, if the customer
requests, will generally make "hot shot" deliveries within four hours after
receipt of the order. The Company organizes its truck and delivery routes to
optimize each truck's merchandise load and number of deliveries. The Company
uses trucks to deliver a substantial percentage of the Company's products and
common carriers for a small percentage of deliveries. Common carriers are
typically used for deliveries beyond a 200 mile radius from the distribution
center.

The Company's affiliation arrangements are intended to permit the Company to
more effectively solicit national accounts and to assure that such accounts
can be effectively serviced on a national basis without requiring the Company
to incur the capital costs of opening new distribution centers or undertaking
an acquisition. The Company's affiliation arrangements are with the following
distributors:

<TABLE>
<CAPTION>
AFFILIATED DISTRIBUTOR GEOGRAPHIC REGION
---------------------- -----------------
<S> <C>
Commerce Distributors Northeast
U.S. Garden Sales Ohio and Michigan
</TABLE>

Under the affiliation arrangements, Company personnel negotiate transactions
with national retail chains and the affiliated distributors provide such
retail chains with products and related services in the geographic regions in
which they operate. The Company receives fees from the affiliated distributors
to compensate it for its costs, and sales of these affiliated distributors are
not reflected in the Company's statements. The Company earned no profits in
fiscal 1995 from these arrangements as the Company set its fees in connection
with such arrangements at a level which was designed to cover only the
Company's administrative costs.

The Company has negotiated agreements with a group of 32 independent
distributors for the distribution of Solaris products by the independent
distributors. These agreements provide coverage of geographic areas where the
Company does not have facilities or where established relationships with
specific retailers make such arrangements desirable.

PROPERTIES

The Company currently operates 37 distribution centers totaling
approximately 1,801,000 square feet. The Company currently owns two
distribution centers located in San Antonio, Texas and Lubbock, Texas and
leases the remaining distribution centers. Most distribution centers consist
of office and warehouse space, several large bays for loading and unloading
and a store for walk-in commercial accounts. Each distribution center provides
warehouse, distribution, sales and support functions for its geographic area
under the supervision of a regional manager. Twenty-nine distribution centers
service lawn and garden products and pool supplies, with seven of these also
servicing pet supplies. Eight distribution centers exclusively service pet
supplies. The Company's executive offices are located in Lafayette,
California.

34
<PAGE>

The Company periodically evaluates the location and efficiency of its
facilities to maximize customer satisfaction and to increase economies of
scale. Accordingly, the Company may close or relocate a distribution center
from time to time. The Company's leases generally expire between 1996 and
2005. Substantially all of the leases contain renewal provisions with
automatic rent escalation clauses. In addition to the facilities that are
owned, the Company's fixed assets are comprised primarily of trucks,
warehousing and transportation equipment. As of March 30, 1996, the Company
operated a fleet of approximately 170 trucks, of which most were leased.
During the Company's peak season it rents additional trucks.

The table below lists the Company's distribution facilities and the map on
the inside cover page of this Prospectus illustrates their locations.

WESTERN REGION SOUTHWEST REGION NORTHWEST REGION

Visalia, CA Albuquerque, NM Algona, WA
Stockton, CA Hammond, LA Boise, ID
Phoenix, AZ Dallas, TX Denver, CO
Sacramento, CA (2) Houston, TX(2) Medford, OR
San Leandro, CA Little Rock, AR Portland, OR
Orange, CA Lubbock, TX Salt Lake City, UT
Riverside, CA McAlester, OK
Van Nuys, CA McGregor, TX MIDWEST REGION
San Diego, CA Pharr, TX
Santa Fe Springs, CA (2) San Antonio, TX Bloomington, IL
Kansas City, MO
EASTERN REGION MEXICO Minneapolis, MN

Providence, RI Celaya SOUTHEAST REGION

Atlanta, GA
Greensboro, NC
Orlando, FL

Kenlin has two distribution facilities in New Jersey and one in North
Carolina which, in July 1996, became part of the Company's distribution
facilities in the Eastern Region.

COMPETITION

The lawn and garden products and pet supply distribution industries are
highly competitive. Traditionally, these industries have been characterized by
intense competition from large numbers of smaller local and regional
distributors--with competition based on price, service and personal
relationships. In recent years, the Company has moved aggressively to insulate
itself from this type of competition through the development of a nationwide
presence, forging relationships with manufacturers, suppliers and major
retailers and adding new value-added services. See "Business Strategy" and
"Risk Factors--Competition."

In addition to competition from other distributors, the Company also faces
existing and potentially increased competition from manufacturers and
suppliers which distribute some percentage of their products directly to
retailers, bypassing distributors, or through a dual distribution system in
which the manufacturer or supplier competes with distributors for sales to
certain accounts. See "Risk Factors--Competition" and "--Direct Sales." Such
competition is typically based on service and price. Although the Company
competes against direct sales by manufacturers and suppliers, it is often able
to participate in such direct sales by entering into agreements with the
manufacturers and suppliers pursuant to which it provides the manufacturers
and suppliers with order processing, warehousing, shipping and certain in-
store services in connection with such direct sales in return for a fee from
the manufacturers and suppliers.

35
<PAGE>

EMPLOYEES

As of May 31, 1996, the Company had approximately 1,630 employees of which
approximately 1,350 were full-time employees and 280 were temporary employees.
The Company hires substantial numbers of temporary employees for the peak
shipping season of February through June in order to meet the increased demand
experienced during the spring and summer months, including merchandising in
stores. All of the Company's temporary employees are paid on an hourly basis.
The Company considers its relationship with its employees to be good.
Employees in Kenlin's distribution facility previously voted to create a
union, although there is currently no collective bargaining agreement in place
between such union and Kenlin.

ENVIRONMENTAL CONSIDERATIONS

The Company's subsidiary, Grant Laboratories, Inc., which manufactures ant
control products, and many of the products distributed by the Company are
subject to regulation by federal, state and local authorities. Such
regulations are often complex and are subject to change. Environmental
regulations may affect the Company by restricting the manufacturing or use of
its products or regulating their disposal. Regulatory or legislative changes
may cause future increases in the Company's operating costs or otherwise
affect operations. Although the Company believes it is and has been in
substantial compliance with such regulations and has strict internal
guidelines on the handling and disposal of its products, there is no assurance
in the future that the Company may not be adversely affected by such
regulations or incur increased operating costs in complying with such
regulations. However, neither the compliance with regulatory requirements nor
the Company's environmental procedures can ensure that the Company will not be
subject to claims for personal injury, property damages or governmental
enforcement.

LITIGATION

Baton Rouge Fire. On July 14, 1992, the Company contacted local authorities
and an environmental contractor to remove broken containers of a swimming pool
water purifier maintained in inventory at its Baton Rouge, Louisiana
warehouse. A fire originated while the environmental contractor's employees
were in the process of placing the material in a large drum for removal. The
fire damaged the Company's warehouse and two adjoining warehouse spaces leased
by third parties. The warehouse was one of the Company's smallest, with an
approximate area of 22,000 square feet out of a then total area of
approximately 1,269,400 square feet for all of the Company's warehouses at
such time. Although the inventory in the warehouse was substantially damaged,
it constituted an immaterial portion of the Company's total inventories at
that time.

The Company believes that the fire was caused principally by the
environmental contractor, and intends to hold the environmental contractor,
and others, responsible for any loss or damage which it sustains. While the
overall amount of the damage to all parties caused by the fire is believed to
aggregate $20 million or more, neither this amount nor the overall amount of
damage which the Company has sustained as a result of the fire has been
finally quantified. The Company maintained insurance with Atlantic Mutual
Insurance Company providing $11 million of coverage (with no deductible)
against third-party liability. The Company believes that this coverage will be
available with respect to third-party claims against the Company in the event
that the environmental contractor or other parties are not found responsible.
Notwithstanding the foregoing, the precise amount of damage sustained by the
Company and other claimants in the fire, the ultimate determination of the
parties responsible and the availability of insurance coverage are the subject
of complex litigation, involving numerous claimants, defendants and insurance
companies. Accordingly, no assurance may be given as to the ultimate impact of
the Louisiana fire on the Company. The Company believes, based on the
information currently available to it that ultimate resolution of this matter
will not have a material adverse effect on its financial position or results
of operations.

Other Legal Proceedings. Except as disclosed above, the Company is not a
party to any other material litigation.

36
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company and their ages as of the
date of this Prospectus are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William E. Brown..... 54 Chairman of the Board and Chief Executive Officer
Glenn W. Novotny..... 49 President, Chief Operating Officer and Director
Neill J. Hines....... 56 Executive Vice President
Robert B. Jones...... 63 Vice President, Chief Financial Officer and Secretary
Lee D. Hines,
Jr.(1).............. 50 Director
Daniel Hogan(1)...... 68 Director
</TABLE>
- --------
(1) Member of the Audit and Compensation Committee.

Mr. Brown has been Chairman and Chief Executive Officer of the Company since
1980. Additionally, since 1978 he has served as the Chief Executive Officer of
Grant Laboratories, Inc., a manufacturer of garden-related insecticides. From
1977 to 1980, Mr. Brown was Senior Vice President of the Vivitar Corporation
with responsibility for Finance, Operations, and Research & Development. From
1972 to 1977, he was with McKesson Corporation where he was responsible for
its 200-site data processing organization. Prior to joining McKesson
Corporation, Mr. Brown spent the first 10 years of his business career at
McCormick, Inc. in manufacturing, engineering and data processing.

Mr. Novotny has been President of the Company since June 1990 and was
President of Weyerhaeuser Garden Supply Company ("WGS") since 1988. Prior
thereto, he was with Weyerhaeuser Corporation for 20 years with a wide range
of managerial experience including manufacturing, accounting, strategic
planning, sales, general management and business turnarounds. From 1985 to
1988, Mr. Novotny was Region General Manager, Building Materials Distribution.
From 1982 to 1985, he was Regional General Manager, Southern Mill Direct
Sales. From 1979 to 1982, Mr. Novotny managed the strategic planning and
analysis department of Weyerhaeuser's Solid Wood Business.

Mr. Hines joined the Company in June 1990 as Executive Vice President and
was Vice President-Finance since 1989 with WGS. Prior thereto, he was with
Weyerhaeuser Corporation for 25 years in a broad variety of positions
including Eastern Region Manager of Finance and Planning, Forest Products;
North Carolina Business and Financial Manager; Plywood Plant Manager; Manager
Finishing, Shipping & Customer Service; Paper Mills; and various
controllership positions.

Mr. Jones joined the Company in July 1991 as Corporate Controller. He was
appointed to his present position in June 1993. From May 1990 to July 1991,
Mr. Jones was Executive Vice President of International Tropic-Cal, Inc. From
February 1988 to April 1990, Mr. Jones was Vice President and Chief Financial
Officer of Compu-Rite Corporation, a manufacturer of computer ribbons. Prior
to joining Compu-Rite, Mr. Jones was Vice President and Chief Financial
Officer of Vivitar Corporation from 1982 to 1988.

Mr. Hines, Jr. joined the Company in April 1991 as Executive Vice President
and Chief Financial Officer, a position he retained until June 1993. He became
a Director in 1991. From May 1990 to April 1991, Mr. Hines was President and
Chief Executive Officer of International Tropic-Cal, Inc., a designer and
marketer of sunglasses and hair accessories. From September 1988 to May 1990,
Mr. Hines was Vice President and Chief Financial Officer of Avalon Marketing,
Inc. From 1983 to September 1988, he was Chief Financial Officer of Applause
Inc. and Vice President of Finance of Applause from 1982 to 1983. Prior to
joining Applause, Mr. Hines served as the Chief Financial Officer of Vivitar
from 1977 to 1982.

37
<PAGE>

Mr. Hogan has served as a Director since October 1993. Mr. Hogan is a self-
employed business consultant. Prior to his retirement in 1986, Mr. Hogan was a
Vice President of Chevron Chemical Company and General Manager of its Ortho
Consumer Products Division.

The Company's board of directors has an Audit and Compensation Committee.
The Audit and Compensation Committee recommends the annual engagement of the
Company's auditors with whom the Committee will review the scope of audit and
non-audit assignments, related fees, the accounting principles used by the
Company in financial reporting, internal financial auditing procedures and the
adequacy of the Company's internal control procedures. The Audit and
Compensation Committee also determines officers' salaries and bonuses, and
administers the Company's 1993 Omnibus Equity Incentive Plan. Further, the
majority of the independent and disinterested directors must approve any
material agreements or arrangements between the Company and directors,
officers, existing principal stockholders and their affiliates. Lee D. Hines,
Jr. and Daniel Hogan currently serve as members of the Audit and Compensation
committee. The Company's directors are elected at the annual stockholders'
meeting and serve until their respective successors are elected or until
death, resignation or removal. Officers are appointed by, and serve at the
discretion of, the board of directors. There are no family relationships among
any directors or executive officers of the Company.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Certificate of Incorporation provides that its directors will
not be liable to the Company or its stockholders for monetary damages for
breaches of fiduciary duty, to the fullest extent permitted by law. This
provision is intended to allow the Company's directors the benefit of the
Delaware General Corporation law which provides that directors of Delaware
corporations may be relieved of monetary liability for breaches of their
fiduciary duty of care except under certain circumstances, including breach of
the duty of loyalty, acts or omissions not in good faith or involving
intentional misconduct or known violation of law or any transaction from which
the director derived an improper personal benefit.

The Company has entered into separate indemnification agreements with each
of the directors and executive officers, whereby the Company agrees, among
other things, to indemnify them against certain liabilities that may arise by
reason of their status or service as directors or officers, to advance their
expenses incurred as a result of any proceeding against them as to which they
could be indemnified, and to obtain directors' and officers' insurance if
available at reasonable terms. There is no pending litigation or proceeding
involving a director, officer, employee or other agent of the Company as to
which indemnification is being sought, nor is the Company aware of any pending
or threatened litigation, that may result in claims for indemnification by any
director, officer, employee or other agent.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors has an Audit and Compensation Committee, consisting
of two independent and disinterested directors which makes decisions regarding
executive compensation. Lee D. Hines, Jr., a member of the Board of Directors
and the Audit and Compensation Committee, performed certain consulting
services for the Company during fiscal 1995 for which he received compensation
of $49,730.

BOARD COMPENSATION

Directors who are not employees of the Company are paid directors fees
consisting of $12,000 per year and $1,000 for each Board of Directors meeting
attended. Directors who attend meetings of the Audit and Compensation
Committee receive an additional $1,000 for each meeting not held on the same
day as a Board of Directors meeting. In addition, Lee D. Hines, Jr. performed
certain consulting services for the Company during fiscal 1995 for which he
received compensation of $49,730. In February 1996, the Board of Directors
adopted a Nonemployee Director Stock Option Plan. This plan provides for the
grant of options to outside directors. There are 100,000 shares of Common
Stock reserved for issuance upon exercise of options pursuant to this plan. As
of May 31, 1996, options to purchase 10,000 shares of Common Stock at an
exercise price of $9.00 had been granted to each of the two outside directors.

38
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to
beneficial ownership of the Company's Class B Stock and Common Stock as of
March 30, 1996 and, as adjusted to reflect the sale of the shares of Common
Stock offered hereby, (i) by each person (or group of affiliated persons) who
is known by the Company to own beneficially more than five percent of the
Company's outstanding Stock, (ii) by each of the Company's directors and
executive officers, (iii) by all directors and executive officers as a group,
(iv) by each Selling Stockholder. Except as indicated in the footnotes to this
table, the persons named in the table have sole voting and investment power
with respect to all shares of Stock shown as beneficially owned by them,
subject to community property laws where applicable.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED SHARES BENEFICIALLY
PRIOR TO OFFERING OWNED AFTER OFFERING
------------------- ---------------------------------
PERCENTAGE
OF SHARES PERCENTAGE
BENEFICIALLY OF TOTAL
OWNED NUMBER OF NUMBER OF VOTING
PRIOR TO SHARES TO CLASS B COMMON POWER AFTER
BENEFICIAL OWNERS CLASS B COMMON OFFERING(1) BE SOLD SHARES SHARES PERCENT(1) OFFERING(2)
----------------- ---------- -------- ------------ --------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William E. Brown(3)..... 2,038,859 182,500 19.1% 240,000(4) 1,981,359 -- 14.0% 46.0%
Wellington Management
Company(5)............. -- 657,100 5.7 -- -- 657,100 4.6 2.4
Monsanto Company(6)..... -- 600,000(7) 4.9 -- -- 600,000(7) 4.1 2.1
Glenn W. Novotny........ -- 102,769(8) * 10,000 -- 92,769(8) * *
Neill J. Hines.......... 45,548 37,615(9) * -- 45,548 37,615(9) * 1.1
Robert B. Jones......... -- 12,538(10) * -- -- 12,538(10) * *
Lee D. Hines, Jr........ -- 26,000 * -- -- 51,000(11) * *
Daniel Hogan............ -- 1,000 * -- -- 6,000(11) * *
All directors and
executive officers as a
group (6 persons)...... 2,084,407 362,422(12) 21.0% 250,000 2,026,907 153,314(11) 15.4% 47.7%
</TABLE>

- --------
(*) Less than 1%

(1) Represents the number of shares of Class B Stock and Common Stock
beneficially owned by each stockholder as a percentage of the total
number of shares of Class B Stock and Common Stock outstanding.

(2) The percentage of total voting power after Offering represents the
percentage of the voting power each stockholder will have after the
Offering, assuming such stockholder does not convert his Class B Stock
into Common Stock, and giving effect to the disparate voting rights
between the Class B Stock and the Common Stock and the 49% aggregate
maximum voting right of the Class B Stock.

(3) The address of Mr. Brown is 3697 Mt. Diablo Boulevard, Lafayette,
California 94549. Mr. Brown may be deemed to be a "control person" of the
Company within the meaning of the rules and regulations of the Securities
and Exchange Act of 1934, as amended, by virtue of his stock ownership
and positions with the Company. In connection with the offering, Mr.
Brown will convert 57,500 shares of Class B Stock into Common Stock.

(4) If the Underwriters' over-allotment option is exercised in full, Mr.
Brown will convert an additional 160,000 shares of Class B Stock into
Common Stock. The number of Class B Shares owned after the offering will
be 1,821,359 shares, the number of Common Shares owned after the offering
will be zero shares, the percent of shares owned after the offering will
be 12.6%, and the percentage of total voting power after the offering
will be 45.8%.

(5) The address of Wellington Management Company is 75 State Street, Boston,
Massachusetts 02109.

(6) The address of Monsanto Company is 800 North Lindbergh Boulevard, St.
Louis, Missouri 63167.

(7) Includes 500,000 shares issuable upon exercise of a warrant which is
immediately exercisable and 100,000 shares issuable upon conversion of
100 shares of Series A Preferred Stock.

(8) Includes 10,360 shares issuable upon exercise of outstanding options
exercisable within 60 days of March 30, 1996.

(9) Includes 5,718 shares issuable upon exercise of outstanding options
exercisable within 60 days of March 30, 1996.

(10) Includes 530 shares issuable upon exercise of outstanding options
exercisable within 60 days of March 30, 1996.

(11) Includes shares purchased from the Underwriters in this offering. See
"Underwriting."

(12) Includes 16,608 shares issuable upon exercise of outstanding options
exercisable within 60 days of March 30, 1996.

39
<PAGE>

DESCRIPTION OF CAPITAL STOCK

As of the date of this Prospectus, the authorized capital stock of the
Company consists of 40,000,000 shares of Common Stock ("Common Stock"),
3,000,000 shares of Class B Stock ("Class B Stock") and 1,000 shares of
Preferred Stock ("Preferred Stock"). Upon the closing of the Offering,
12,070,103 shares of Common Stock, 2,108,575 shares of Class B Stock and 100
shares of Preferred Stock will be issued and outstanding (assuming no exercise
of the Underwriters' over-allotment option).

The following summary description of the Company's capital stock does not
purport to be complete and is subject to and is qualified in its entirety by
the description of the Company's capital stock contained in the Company's
Certificate of Incorporation, a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. Reference is made
to such exhibit for a detailed description of the provisions thereof
summarized below.

COMMON STOCK AND CLASS B STOCK

Voting, Dividend and Other Rights. The voting powers, preferences and
relative rights of the Common Stock and the Class B Stock are identical in all
respects, except that (i) the holders of Common Stock are entitled to one vote
per share and the holders of Class B Stock are entitled to the lesser of ten
votes per share or 49% of the total votes cast, (ii) stock dividends on Common
Stock may be paid only in shares of Common Stock and stock dividends on Class
B Stock may be paid only in shares of Class B Stock and (iii) shares of Class
B Stock have certain conversion rights and are subject to certain restrictions
on ownership and transfer described below under "Conversion Rights and
Restrictions on Transfer of Class B Stock." Except as described above,
issuances of additional shares of Class B Stock and modifications of the terms
of the Class B Stock require the approval of a majority of the holders of the
Common Stock and Class B Stock, voting as separate classes. The Certificate of
Incorporation cannot be modified, revised or amended without the affirmative
vote of the majority of outstanding shares of Common Stock and Class B Stock,
voting separately as a class. Except as described above or as required by law,
holders of Common Stock and Class B Stock vote together on all matters
presented to the stockholders for their vote or approval, including the
election of directors. The stockholders are not entitled to vote cumulatively
for the election of directors.

After the sale of the Common Stock offered hereby, the outstanding shares of
Common Stock will equal 85.1% of the total shares outstanding (and, together
with the 100 shares of Series A Preferred Stock owned by Monsanto Company,
will have 51% of the combined voting power of the outstanding shares), and the
holders of Class B Stock will have 49% of the combined voting power of the
outstanding shares. The holders of the Class B Stock will, therefore, be
likely to be able to elect the entire Board of Directors of the Company and to
determine the outcome of any matter submitted to the stockholders for approval
including the power to determine the outcome of all corporate transactions.

Each share of Common Stock and Class B Stock is entitled to receive
dividends if, as and when declared by the Board of Directors of the Company
out of funds legally available therefor. The Common Stock and Class B Stock
share equally, on a share-for-share basis, in any cash dividends declared by
the Board of Directors.

Stockholders of the Company have no preemptive or other rights to subscribe
for additional shares. Subject to any rights of holders of any Preferred
Stock, all holders of Common Stock and Class B Stock, regardless of class, are
entitled to share equally on a share-for-share basis in any assets available
for distribution to stockholders on liquidation, dissolution or winding up of
the Company. No Common Stock or Class B Stock is subject to redemption or a
sinking fund. All shares of Common Stock offered hereby will be, when so
issued or sold, validly issued, fully paid and nonassessable.

Conversion Rights and Restrictions on Transfer of Class B Stock. The Common
Stock has no conversion rights. However, at the option of the holder, each
share of Class B Stock is convertible at any

40
<PAGE>

time and from time to time into one share of Common Stock. If at any time the
holders of a majority of outstanding shares of Class B Stock vote to convert
the outstanding shares of Class B Stock to Common Stock, then all outstanding
shares of Class B Stock shall be deemed automatically converted into shares of
Common Stock.

The Company's Certificate of Incorporation provides that any holder of
shares of Class B Stock desiring to transfer such shares to a person other
than a Permitted Transferee (as defined below) must present such shares to the
Company for conversion into an equal number of shares of Common Stock upon
such transfer. Thereafter, such shares of Common Stock may be freely
transferred to persons other than Permitted Transferees, subject to applicable
securities laws.

Shares of Class B Common Stock may not be transferred except generally to
family members, certain trusts, heirs and devisees (collectively, "Permitted
Transferees"). Upon any sale or transfer of ownership or voting rights to a
transferee other than a Permitted Transferee or to the extent an entity no
longer remains a Permitted Transferee, such shares of Class B Stock will
automatically convert into an equal number of shares of Common Stock.
Accordingly, no trading market is expected to develop in the Class B Stock and
the Class B Stock will not be listed or traded on any exchange or in any
market.

Effects of Disproportionate Voting Rights. The disproportionate voting
rights of the Common Stock and Class B Stock could have an adverse effect on
the market price of the Common Stock. Such disproportionate voting rights may
make the Company a less attractive target for a takeover than it otherwise
might be, or render more difficult or discourage a merger proposal, a tender
offer or a proxy contest, even if such actions were favored by stockholders of
the Company other than the holders of the Class B Stock. Accordingly, such
disproportionate voting rights may deprive holders of Common Stock of an
opportunity to sell their shares at a premium over prevailing market prices,
since takeover bids frequently involve purchases of stock directly from
stockholders at such a premium price.

PREFERRED STOCK

The Board of Directors has the authority to cause the Company to issue up to
1,000 shares of Preferred Stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any series or the designation of such
series, without any further vote or action by the stockholders. The issuance
of Preferred Stock may have the effect of delaying, deferring or preventing a
change in control of the Company without further action by the stockholders.
The issuance of Preferred Stock with voting and conversion rights may
adversely affect the voting power of the holders of the Common Stock.

In July 1995, the Company issued 100 shares of Series A Preferred Stock to
Monsanto Company, of which Solaris is a strategic business unit. The Series A
Preferred Stock is entitled to receive a cumulative 5% annual cash dividend
which must be paid prior to the declaration or payment of any dividends on the
Common Stock. Each share of Series A Preferred Stock is entitled to a
liquidation preference of $9,000 per share, is convertible into 1,000 shares
of Common Stock, votes together with the Common Stock and has a number of
votes equal to the number of shares of Common Stock into which it is
convertible.

The Company has no present plans to issue any additional shares of Preferred
Stock.

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. This statute generally prohibits, under certain
circumstances, a Delaware corporation whose stock is publicly traded, from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder,

41
<PAGE>

unless (i) a corporation has elected in its certificate of incorporation or
bylaws not to be governed by this Delaware law (the Company has not made such
an election); (ii) prior to the time the stockholder became an interested
stockholder, the board of directors approved either the business combination
or the transaction which resulted in the person becoming an interested
stockholder, (iii) the stockholder owned at least 85% of the outstanding
voting stock of the corporation (excluding shares held by directors who were
also officers or held in certain employee stock plans) upon consummation of
the transaction which resulted in the stockholder becoming an interested
stockholder or (iv) the business combination was approved by the board of
directors and by two-thirds of the outstanding voting stock of the corporation
(excluding shares held by the interested stockholder). An "interested
stockholder" is a person who, together with affiliates and associates, owns
(or any time within the prior three years did own) 15% or more of the
corporation's outstanding voting stock. The term "business combination" is
defined generally to include mergers, consolidations, stock sales, asset-based
transactions, and other transactions resulting in a financial benefit to the
interested stockholder.

TRANSFER AGENT AND REGISTRAR

ChaseMellon Shareholder Services L.L.C. serves as the transfer agent and
registrar for the Company's Common Stock.

42
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters"), through their Representatives,
Alex. Brown & Sons Incorporated, Hambrecht & Quist LLC and Wasserstein Perella
Securities, Inc., have severally agreed to purchase from the Company and the
Selling Stockholders the following respective numbers of shares of Common
Stock at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ---------
<S> <C>
Alex. Brown & Sons Incorporated....................................... 916,667
Hambrecht & Quist LLC................................................. 916,667
Wasserstein Perella Securities, Inc................................... 916,666
---------
Total............................................................... 2,750,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all shares of the Common Stock offered hereby if any of such shares
are purchased.

The Company has been advised by the Representatives of the Underwriters that
the Underwriters propose to offer the shares of Common Stock to the public at
the public offering price set forth on the cover page of this Prospectus and
to certain dealers at such price less a concession not in excess of $0.56 per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $0.10 per share to certain other dealers. After the public
offering, the offering price and other selling terms may be changed by the
Representatives.

The Company and a Selling Stockholder have granted to the Underwriters an
option, exercisable not later than 30 days from the date of this Prospectus,
to purchase up to 252,500 and 160,000 additional shares, respectively of
Common Stock at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus. To the extent that
the Underwriters exercise such option, each of the Underwriters will have a
firm commitment to purchase approximately the same percentage thereof that the
number of shares of Common Stock to be purchased by it shown in the table
above bears to the total shares of Common Stock listed in such table, and the
Company will be obligated, pursuant to such options, to sell such shares to
the Underwriters. The Underwriters may exercise such options only to cover
over-allotments made in connection with the sale of Common Stock offered
hereby. If purchased, the Underwriters will offer such additional shares of
Common Stock on the same terms as those on which the 2,750,000 shares of
Common Stock are being offered.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities under
the Securities Act.

In connection with this offering, the Underwriters and other selling group
members (if any) who are qualifying registered market makers on Nasdaq may
engage in passive market making transactions in the Common Stock on the Nasdaq
National Market in accordance with Rule 10b-6A under the Exchange Act during
the two business day period before commencement of sales in this Offering. The
passive market making transactions must comply with applicable price and
volume limits and be identified as such. In general, a passive market maker
may display its bid at a price not in excess of the highest independent bid
for the Common Stock. If all independent bids are lowered below the passive
market maker's bid, however, such bid must then be lowered when certain
purchase limits are exceeded. Net purchases by a passive market maker on each
day are generally limited to a specified percentage of the passive market
maker's average daily trading volume in the Common Stock during a prior period
and must be discontinued when such limit is reached. Passive market making may
stabilize the market price of the Common Stock at a level above that which
might otherwise prevail and, if commenced, may be discontinued at any time.

43
<PAGE>

Lee D. Hines, Jr. and Daniel Hogan, directors of the Company, purchased
25,000 and 5,000 shares, respectively, from the Underwriters in this offering.

The Company and each of the directors, executive officers and certain
principal stockholders of the Company have agreed not to offer to sell, sell,
contract to sell or otherwise dispose of any shares of Common Stock of the
Company or securities convertible or exchangeable for any shares of Common
Stock of the Company for a period of 90 days after the date of this Prospectus
without the prior written consent of Alex. Brown & Sons Incorporated. See
"Shares Eligible for Future Sale."

SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

Sales of substantial amounts of Common Stock in the public market could have
an adverse impact on the market price of the Common Stock. After the closing
of the Offering, the Company will have 12,070,103 shares of Common Stock and
2,108,575 shares of Class B Stock outstanding. Of these shares, 11,903,397,
including 2,720,000 of the shares offered hereby, the 2,530,000 shares of
Common Stock that were sold by the Company in the initial public offering and
the 5,750,000 shares of Common Stock sold in the public offering in November
1995, and 81,668 shares of Common Stock issuable upon conversion of the Class
B Stock, will be freely tradeable without restriction under the Securities
Act, except for any shares purchased by affiliates of the Company, which will
be subject to certain resale limitations of Rule 144 promulgated under the
Securities Act. The remaining 166,706 shares of Common Stock and 2,026,907
shares of Class B Stock held by existing stockholders are subject to lock-up
agreements with the Underwriters. The directors, executive officers and
certain principal stockholders of the Company who hold such shares of Common
Stock have agreed not to sell or otherwise dispose of any shares for 90 days
after the date of this Prospectus without the prior written consent of Alex.
Brown & Sons Incorporated. After the expiration of the 90 day lock-up period,
these shares may be sold in accordance with Rule 144. In addition, 500,000
shares of Common Stock issuable upon the exercise of a warrant, which is
immediately exercisable, are eligible for sale upon expiration of the 90 day
lock-up period.

In general, under Rule 144 as currently in effect, a stockholder (or
stockholders whose shares are aggregated) who has beneficially owned for at
least two years shares of Class B Stock or Common Stock that are treated as
"restricted securities," including persons who may be deemed affiliates of the
Company, would be entitled to sell, within any three-month period, a number of
shares of Common Stock that does not exceed the greater of 1% of the then
outstanding shares of Common Stock (12,070 shares immediately after the
Offering) or the average weekly trading volume in the Common Stock during the
four calendar weeks preceding the date on which notice of such sale is given,
provided certain manner of sale and notice requirements and requirements as to
the availability of current public information about the Company are
satisfied. Under Rule 144(k), a stockholder who is deemed not to have been an
affiliate of the Company at any time during the 90 days preceding a sale by
such stockholder, and who has beneficially owned for at least three years
shares of Common Stock that are treated as "restricted securities," would be
entitled to sell such shares without regard to the foregoing restrictions and
requirements.

The Company has registered under the Securities Act, 2,000,000 shares of
Common Stock reserved for issuance under the 1993 Equity Incentive Stock Plan
and 750,000 shares of Common Stock on a Form S-4 for use in potential
acquisitions.

The Company can make no predictions as to the effect, if any, that sales of
shares of Common Stock or the availability of Common Stock for sale will have
on the market price prevailing from time to time. Nevertheless, sales of
substantial amounts of the Common Stock in the public market could adversely
affect the market price of the Common Stock and could impair the Company's
future ability to raise capital through an offering of its equity securities.

44
<PAGE>

REGISTRATION RIGHTS

The Company has granted certain rights with respect to the registration of
its shares under the Securities Act to Monsanto and to former stockholders of
a corporation acquired by the Company in 1993. In the event that the Company
proposes to register any of its Common Stock under the Securities Act, either
for its own account or the account of other security holders, Monsanto and
such former stockholders will be entitled to notice of such registration and
will be entitled to include their Common Stock in such registration, subject
to certain marketing and other limitations. As of September 30, 1995, the
Company had a Registration Statement in effect covering 204,420 shares of
Common Stock for resale by the former stockholders of the corporation acquired
by the Company. In addition, Monsanto has the right, subject to certain
limitations, to require the Company, on not more than one occasion, to file a
registration statement under the Securities Act in order to register not less
than 70,000 shares of Common Stock. Any such demand registration shall be at
the expense of Monsanto unless it is effected pursuant to Form S-3. The
Company may in certain circumstances defer such registrations.

LEGAL MATTERS

The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Orrick, Herrington & Sutcliffe, San Francisco,
California. Certain matters will be passed upon for the Underwriters by
Brobeck, Phleger & Harrison LLP, San Francisco, California.

EXPERTS

The consolidated financial statements and the related financial statement
schedule of the Company as of September 30, 1995 and December 25, 1994 and for
the nine-month period ended September 30, 1995 and each of the two fiscal
years in the period ended December 25, 1994 included in this Prospectus and
elsewhere in the registration statement have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports appearing herein and
elsewhere in the registration statement, and are included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.

The financial statements of Kenlin as of July 31, 1995 and 1994 and for each
of the two years in the period ended July 31, 1995 and the period from August
21, 1992 (commencement of operations) through July 31, 1993 appearing in this
Prospectus and Registration Statement, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report appearing elsewhere herein
and in the Registration Statement, and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act on Form S-3
(together with all amendments and exhibits thereto) with respect to the Common
Stock offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement and the exhibits and schedules
thereto, certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to the
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus regarding the contents of any contract or other
document are not necessarily complete and in each instance reference is hereby
made to the copy of such contract or document filed as an exhibit to the
Registration Statement. Copies of the Registration Statement and the exhibits
and schedules thereto may

45
<PAGE>

be inspected, without charge, at the principal office of the Commission
located at 450 Fifth Street, N.W., Washington, D.C. 20549, the New York
Regional Office located at 7 World Trade Center, Suite 1300, New York, New
York 10048, and the Chicago Regional Office located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511, or obtained upon payment of
prescribed rates from the Public Reference Section of the Commission at its
principal office.

AVAILABLE INFORMATION

The Company is subject to the information requirements of the Exchange Act
and in accordance therewith files reports and other information with the
Commission. Reports, proxy statements and other information filed by the
Company can be inspected and copied (at prescribed rates) at the offices of
the Commission set forth under "Additional Information" above. Quotations
relating to the Company's Common Stock appear on the Nasdaq National Market
and such reports, proxy statements and other information concerning the
Company can also be inspected at the offices of The Nasdaq Stock Market, 1735
K Street, N.W., Washington, D.C. 20006.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), are hereby incorporated by reference
in this Prospectus:

(1) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995;

(2) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended December 30, 1995 and March 30, 1996, and its Current Report on Form
8-K dated June 18, 1996; and

(3) The description of the Company's capital stock in the Company's
Registration Statement on Form 8-A dated March 30, 1993.

All documents filed by the Company pursuant to sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in any subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents which are not specifically incorporated
by reference into the information that this Prospectus incorporates. Requests
for such copies should be directed to the Company's principal executive
offices at: Central Garden & Pet Company, 3697 Mt. Diablo Boulevard,
Lafayette, California 94549, Attn: Chief Financial Officer, (510) 283-4573.

46
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Central Garden & Pet Company
Independent Auditors' Report............................................ F-2
Consolidated Balance Sheets, September 30, 1995, December 25, 1994 and
March 30, 1996 (unaudited)............................................. F-3
Consolidated Statements of Income for the Nine-Month Period Ended
September 30, 1995, Fiscal Years Ended December 25, 1994 and December
26, 1993 and the unaudited Six-Month Periods Ended March 30, 1996 and
March 26, 1995......................................................... F-4
Consolidated Statements of Shareholders' Equity for the Nine-Month
Period Ended September 30, 1995, Fiscal Years Ended December 25, 1994
and December 26, 1993 and the unaudited Six-Month Period Ended March
30, 1996............................................................... F-5
Consolidated Statements of Cash Flows for the Nine-Month Period Ended
September 30, 1995, Fiscal Years Ended December 25, 1994 and December
26, 1993 and the unaudited Six-Month Periods Ended March 30, 1996 and
March 26, 1995......................................................... F-6
Notes to Consolidated Financial Statements for the Nine-Month Period
Ended September 30, 1995, Fiscal Years Ended December 25, 1994 and
December 26, 1993 and the unaudited Six-Month Periods Ended March 30,
1996 and March 26, 1995................................................ F-7
Kenlin Pet Supply, Inc.
Independent Auditors' Report............................................ F-16
Balance Sheets, July 31, 1995 and 1994 and March 30, 1996 (unaudited)... F-17

Statements of Operations and Retained Earnings (Deficit) for the Fiscal
Years Ended July 31, 1995 and 1994, the period from August 21, 1992
(Commencement of operations) through July 31, 1993 and the unaudited
Eight Month Periods Ended March 30, 1996 and March 30, 1995............ F-18
Statements of Cash Flow for the Fiscal Years Ended July 31, 1995 and
1994, the period from August 21, 1992 (Commencement of operations)
through July 31, 1993 and the unaudited Eight Month Periods Ended March
30, 1996 and March 30, 1995............................................ F-19
Notes to Financial Statements for the Fiscal Years Ended July 31, 1995
and 1994, the period from August 21, 1992 (Commencement of operations)
through July 31, 1993 and the unaudited Eight Month Periods Ended March
30, 1996 and March 30, 1995............................................ F-20
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors
Central Garden & Pet Company
Lafayette, California

We have audited the accompanying consolidated balance sheets of Central
Garden & Pet Company (the "Company") and subsidiaries as of September 30, 1995
and December 25, 1994, and the related consolidated statements of income,
shareholders' equity and cash flows for the nine-month period ended September
30, 1995 and each of the two fiscal years in the period ended December 25,
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company and its
subsidiaries as of September 30, 1995 and December 25, 1994, and the results
of their operations and their cash flows for the nine-month period ended
September 30, 1995 and each of the two fiscal years in the period ended
December 25, 1994 in conformity with generally accepted accounting principles.

Deloitte & Touche LLP
San Francisco, California
October 27, 1995

F-2
<PAGE>

CENTRAL GARDEN & PET COMPANY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 25, SEPTEMBER 30, MARCH 30,
1994 1995 1996
------------ ------------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash.................................. $ 172 $ 143 $ 139
Accounts receivable, less allowance
for doubtful accounts of $3,457,
$4,161 and $4,212.................... 36,722 41,315 90,848
Inventories........................... 106,740 69,425 110,151
Prepaid expenses and other assets..... 6,024 5,751 5,130
-------- -------- --------
Total current assets................ 149,658 116,634 206,268
Land, Buildings, Improvements and
Equipment:
Land.................................. 982 982 431
Buildings and improvements............ 5,146 6,031 3,386
Transportation equipment.............. 1,914 2,174 2,224
Warehouse equipment................... 5,486 6,106 6,662
Office furniture and equipment........ 5,556 6,631 8,125
-------- -------- --------
Total............................... 19,084 21,924 20,828
Less accumulated depreciation and
amortization......................... 8,850 9,846 10,995
-------- -------- --------
Land, buildings, improvements and
equipment--net..................... 10,234 12,078 9,833
Goodwill.............................. 10,621 11,013 10,995
Other Assets.......................... 3,440 2,955 2,680
-------- -------- --------
Total............................... $173,953 $142,680 $229,776
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable......................... $ 43,183 $ 37,971 $ 20,829
Accounts payable...................... 74,152 45,120 111,398
Accrued expenses...................... 9,508 6,528 10,881
Current portion of long-term debt..... 1,812 1,699 1,622
-------- -------- --------
Total current liabilities........... 128,655 91,318 144,730
-------- -------- --------
Long-Term Debt.......................... 7,019 11,130 8,635
-------- -------- --------
Deferred Income Taxes and Other Long-
Term Obligations....................... 1,903 1,830 1,836
-------- -------- --------
Commitments and Contingencies (Note 11)
Shareholders' Equity:
Series A convertible preferred stock..
Class B stock (outstanding shares--
2,446,275 in 1994, 2,178,874 in 1995
and 2,166,075 in 1996)............... 32 22 22
Common stock (outstanding shares--
3,371,103 in 1994, 3,606,964 in 1995
and 9,451,760 in 1996)............... 34 36 95
Additional paid-in capital............ 29,288 28,267 63,917
Retained earnings..................... 13,294 10,330 10,758
Restricted stock deferred
compensation......................... (490) (253) (217)
Treasury stock, 769,393 shares in
1994................................. (5,782)
-------- -------- --------
Total shareholders' equity.......... 36,376 38,402 74,575
-------- -------- --------
Total............................... $173,953 $142,680 $229,776
======== ======== ========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE>

CENTRAL GARDEN & PET COMPANY

CONSOLIDATED STATEMENTS OF INCOME

See notes to consolidated financial statements.

F-4
<PAGE>

CENTRAL GARDEN & PET COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
SERIES A
CONVERTIBLE
PREFERRED STOCK CLASS B STOCK COMMON STOCK
------------------ ----------------- -----------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------- -------- --------- ------ --------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Balance, December 27, 1992............................. 4,300,000 $43
Stock issued to purchase subsidiary(1).................. 210,120 2
Amortization, restricted stock deferred compensation....
Treasury stock..........................................
Issuance of stock grants................................ 55,000 1
Sale of common stock (net of offering costs)........... 2,030,000 $20
Conversion of Class B stock into common stock........... (765,120) (8) 765,120 8
Net income..............................................
------- -------- --------- --- --------- ---

Balance, December 26, 1993............................ 3,800,000 38 2,795,120 28
Amortization, restricted stock deferred compensation....
Treasury stock..........................................
Conversion of Class B stock into common stock........... (449,383) (5) 449,383 5
Cancellation of Class B stock........................... (143,949) (1)
Issuance of common stock................................ 35,600 --
Issuance of common stock
held in escrow to purchase subsidiary(2).............. 100,000 1
Net income..............................................
------- -------- --------- --- --------- ---

Balance, December 25, 1994.............................. 3,206,668 32 3,380,103 34
Amortization, restricted stock deferred compensation....
Treasury stock..........................................
Retirement of treasury stock............................ (809,578) (8) (9,000)
Conversion of Class B stock into common stock........... (218,216) (2) 218,216 2
Issuance of common stock................................ 17,645 --
Issuance of preferred stock............................. 100 --
Net income..............................................
------- -------- --------- --- --------- ---

Balance, September 30, 1995............................. 100 $ -- 2,178,874 $22 3,606,964 $36
Amortization, restricted stock deferred compensation....
Conversion of Class B Stock into common stock........... (12,799) -- 12,799 --
Issuance of Common Stock................................ 5,831,997 59
Net Income..............................................
------- -------- --------- --- --------- ---

Balance, March 30, 1996 (unaudited)..................... 100 $ -- 2,166,075 $22 9,451,760 $95
======= ======== ========= === ========= ===
</TABLE>

<TABLE>
<CAPTION>
RESTRICTED
STOCK
ADDITIONAL DEFERRED TREASURY STOCK
PAID-IN RETAINED COMPEN- -----------------
CAPITAL EARNINGS SATION SHARES AMOUNT TOTAL
---------- -------- ---------- -------- ------- -------
(DOLLARSS IN THOUSANDS)
<C> <C> <C> <C> <C> <C>
Balance, December 27, 1992............................. $ 9,426 $ 7,895 $(1,250) $16,114
Stock issued to purchase subsidiary(1).................. 1,924 1,926
Amortization, restricted stock deferred compensation.... 331 331
Treasury stock.......................................... (684,234) $(4,980) (4,980)
Issuance of stock grants................................ 341 (341) 1
Sale of common stock (net of offering costs)........... 17,953 17,973
Conversion of Class B stock into common stock...........
Net income.............................................. 3,994 3,994
------- ------- ------- ------- ------ -------

Balance, December 26, 1993............................ 29,644 11,889 (1,260) (684,234) (4,980) 35,359
Amortization, restricted stock deferred compensation.... 405 405
Treasury stock.......................................... (85,159) (802) (802)
Conversion of Class B stock into common stock........... (710) 365 (346)
Cancellation of Class B stock........................... 354 354
Issuance of common stock................................
Issuance of common stock
held in escrow to purchase subsidiary(2).............. 1
Net income.............................................. 1,405 1,405
------- ------- ------- ------- ------ -------

Balance, December 25, 1994.............................. 29,288 13,294 (490) (769,393) (5,782) 36,376
Amortization, restricted stock deferred compensation.... 237 237
Treasury stock.......................................... (49,185) (256) (256)
Retirement of treasury stock............................ (1,987) (4,043) 818,578 6,038 -
Conversion of Class B stock into common stock...........
Issuance of common stock................................ 66 66
Issuance of preferred stock............................. 900 900
Net income.............................................. 1,079 1,079
------- ------- ------- ------- ------ -------

Balance, September 30, 1995............................. $28,267 $10,330 $ (253) - $ - $38,402
Amortization, restricted stock deferred compensation.... 36 36
Conversion of Class B Stock into common stock...........
Issuance of Common Stock................................ 35,650 35,708
Net Income.............................................. 428 428
------- ------- ------- ------- ------ -------

Balance, March 30, 1996 (unaudited)..................... $63,917 $10,758 $ (217) - $ - $74,575
======= ======= ======= ======= ====== =======
</TABLE>
- -----
(1) Excludes 100,000 shares of Common stock held in escrow as contingent
shares (see Note 2).
(2) Represents 100,000 shares of Common stock released from escrow and issued
during fiscal 1994 (see Note 2).

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-5
<PAGE>

CENTRAL GARDEN & PET COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE-MONTH
FISCAL YEARS ENDED PERIOD ENDED SIX-MONTH PERIODS ENDED
------------------------- ------------- -----------------------
DECEMBER 26, DECEMBER 25, SEPTEMBER 30, MARCH 26, MARCH 30,
1993 1994 1995 1995 1996
------------ ------------ ------------- ----------- -----------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income (loss)..... $ 3,994 $ 1,405 $ 1,079 $(2,279) $ 428
Adjustments to
reconcile net income
to net cash provided
(used) by operating
activities:
Depreciation and
amortization......... 2,561 2,526 1,817 1,222 1,616
Gain on sale of land,
building and
improvements......... (305)
Deferred taxes
(benefit) on income.. 286 (996) 590
Changes in assets and
liabilities:
Receivables.......... (887) 1,664 (4,549) (24,587) (49,533)
Inventories.......... 575 (1,314) 38,208 (35,775) (40,726)
Prepaid expenses and
other assets........ 1,529 (1,495) (683) (3,132) 483
Accounts payable..... 172 3,060 (23,147) 58,503 66,278
Accrued expenses..... (2,290) 1,650 (2,824) 3,290 4,353
Other long-term
obligations......... (261) 556 (55) (4) 6
------- ------- ------- ------- -------
Net cash provided
(used) by operating
activities......... 5,679 7,056 10,436 (2,762) (17,400)
Cash flows from
investing activities:
Additions to land,
buildings,
improvements and
equipment............ (1,822) (759) (2,781) (1,534) (2,199)
Proceeds from sale of
land, buildings,
improvements and
equipment............ 384 400 400 3,600
Payments to acquire
companies, net of
cash acquired........ (6,743) (13,989) (1,341)
------- ------- ------- ------- -------
Net cash provided
(used) by investing
activities......... (8,181) (14,348) (4,122) (1,134) 1,401
Cash flows from
financing activities:
Proceeds (repayments)
from notes payable--
net.................. (14,362) 12,900 (5,212) 5,442 (17,142)
Payments on long-term
debt................. (1,018) (3,313) (1,980) (1,039) (2,572)
Payments to reacquire
stock--net........... (650) (802) (117) (537)
Payments on notes
payable to
affiliate............ (1,503)
Proceeds from issuance
of stock............. 966 27 35,709
Financing costs pair.. (2)
Initial public
offering costs....... (456)
Proceeds from public
offering............. 18,879
------- ------- ------- ------- -------
Net cash provided
(used) by financing
activities......... 2,391 7,282 (6,343) 3,893 15,995
Net decrease in cash... (111) (10) (29) (3) (4)
Cash at beginning of
period................ 293 182 172 190 143
------- ------- ------- ------- -------
Cash at end of period.. $ 182 $ 172 $ 143 $ 187 $ 139
======= ======= ======= ======= =======
Supplemental
information:
Cash paid for
interest............. $ 4,054 $ 4,597 $ 5,654 $ 2,694 $ 1,542
Cash paid for income
taxes................ 2,097 2,171 1,125 255 17
Conversion of accounts
payable to long-term
debt................. 5,885
Assets (excluding
cash) acquired
through purchases of
subsidiaries......... 18,881 28,076 1,341
Liabilities assumed
through purchase of
subsidiaries......... 12,627 17,924
Financing provided by
sellers to reacquire
stock................ 2,400
Stock issued to
purchase subsidiary.. 1,926
Treasury stock
acquired through
purchase of
subsidiaries......... 1,930
Warehouse acquired for
debt................. 3,458
Stock accepted in
settlement of
receivable........... 316
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1995
FISCAL YEARS ENDED DECEMBER 25, 1994 AND DECEMBER 26, 1993
SIX-MONTH PERIODS ENDED MARCH 26, 1995 AND MARCH 30, 1996 (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization--Central Garden & Pet Company, a Delaware corporation (the
"Company"), is a nationwide distributor of lawn and garden products and pet
and pool supplies.

Basis of Consolidation and Presentation--The consolidated financial
statements include the accounts of the Company and its majority-owned
subsidiaries. All transactions between the consolidated companies are
eliminated.

Revenue Recognition--Sales are recorded at the time merchandise is shipped
from the Company's warehouses. Merchandise returns are recognized when
approved for return.

Income taxes are accounted for under the liability method in accordance with
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes. Deferred income taxes result primarily from bad debt allowances,
inventory reserves, adoption of the FIFO (first-in, first-out) inventory
method and nondeductible purchase reserves.

Inventories, which primarily consist of finished goods in garden products
and pet supplies, are stated at the lower of FIFO cost or market. Cost
includes certain indirect purchasing, merchandise handling, and storage costs.

Land, buildings, improvements and equipment are stated at cost. Depreciation
is computed by the straight-line method over thirty years for buildings.
Improvements are amortized on a straight-line basis over the terms of the
related leases. Depreciation on equipment is computed by the straight-line and
accelerated methods over the estimated useful lives of 3 to 10 years.

Goodwill is amortized using the straight-line method over 20 years. The
Company reviews goodwill periodically for potential impairment by comparing
the carrying amount to the expected future cash flows of acquired entities
over the remaining amortization period.

Net income per common and common equivalent share is computed based on the
total weighted average number of Class B shares and common shares outstanding
during the year plus common stock equivalents.

Fiscal Year--In 1995, the Company changed its fiscal year end to the last
Saturday in September.

Unaudited Interim Information--The financial information with respect to the
six-month periods ended March 30, 1996 and March 26, 1995 is unaudited. In the
opinion of management, such information contains all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
results of such periods. The results of operations for the six-month period
ended March 30, 1996 are not necessarily indicative of the results to be
expected for the full year.

Reclassifications--Certain 1993 and 1994 balances have been reclassified to
conform with the 1995 presentation.

2. ACQUISITIONS

On December 30, 1992, the Company acquired Vector Trading Corporation for
$3,050,000 consisting of cash of $650,000 and a note to the seller of
$2,400,000. The note is payable in four equal annual

F-7
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

installments commencing February 15, 1994 and bears interest at 1% under prime
rate. Vector Trading Corporation was a nonoperating company whose principal
asset at the time of acquisition was its beneficial ownership of 491,234
shares of the Company's Class B stock. The Company subsequently liquidated
Vector Trading Corporation. This acquisition was treated as the acquisition of
treasury stock.

Effective March 2, 1993, the Company acquired CGS Distributing Inc., a lawn
and garden distributor. The purchase agreement provided for the Company to
issue 310,120 shares of the Company's Class B Stock in connection with the
acquisition subject to a maximum decrease of 100,000 shares based on the
acquired company's future earnings performance or a maximum increase of
100,000 shares based on the Company's per share market value subsequent to
July 15, 1993. Of the 310,120 shares issued in connection with this
acquisition, 100,000 shares were held in escrow until the earnings performance
targets were met in 1994. Up until issuance in 1994 the 100,000 escrowed
common shares were contingent shares (not included in outstanding shares) and
were not included in the 1993 per share calculation because they were anti-
dilutive. The shares released from escrow were recorded at fair market value
at that time with a related increase in goodwill. The additional 100,000
shares which would have been issuable based on the market value contingency
are no longer issuable. The acquisition was accounted for as a purchase. The
$1,926,000 purchase price exceeded the fair value of the net assets by
$2,367,000, of which approximately $1,167,000 (excluding $1,200,000 of
trademarks acquired) was recorded as goodwill.

In the summer of 1993, the Company acquired two companies, Source One and
Grant Laboratories, that were owned by the principal shareholder of the
Company. Source One was a distributor of electrical products serving the
Northern California market and had as one of its principal assets 142,000
shares of the Company's Class B stock. No goodwill was recorded in connection
with this purchase and the shares of Class B stock were recorded as an
acquisition of treasury stock. Grant Laboratories is a manufacturer of ant
control products which are distributed primarily in the western United States.
The Company paid $2,644,000 in cash for Grant Laboratories, which exceeded the
fair market value of the net assets acquired by $1,580,000, which was recorded
as goodwill. The Company also accepted 51,000 shares of the Company's Class B
stock in settlement of its receivable from U.S. Cal Acquisition Corp., a
company also owned by the principal shareholder of the Company, which was
recorded as an acquisition of Treasury Stock.

In September 1993, the Company acquired two small pet supply distributors
located in the western United States. The combined cash purchase price was
$1,986,000, which exceeded the fair market value of the net assets acquired by
$285,000, which was recorded as goodwill.

On October 1, 1993, the Company acquired Anapet, a distributor of pet
supplies located in Southern California. The cash purchase price was
$3,473,000, which exceeded the fair market value of the net assets acquired by
$540,000, which was recorded as goodwill.

On December 29, 1993, the Company acquired substantially all of the assets
and assumed certain of the liabilities of Aquarium Supplies Unlimited ("ASU")
which prior to that date was a Chapter 11 Debtor-In-Possession. ASU is a
distributor of pet supplies, principally in the Southern California market.
The cash purchase price of $3,996,000 was less than net assets acquired by
$341,000.

During the first half of 1994, the Company acquired the lawn and garden
distribution operations of Tony's Gas & Chemical House, Inc. ("Tony's"); the
lawn and garden distribution operations of Esco Distributors ("Esco") and
acquired the pet supply distribution operations of Rumford Aquarium, Inc.
("Rumford"). The aggregate cash purchase price of these acquisitions was
approximately $10,322,000,

F-8
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

which exceeded the fair market value of the net assets acquired by $3,578,000,
which was recorded as goodwill.

On April 14, 1995, the Company acquired substantially all of the assets of
Valley Pet Supply, Inc. ("Valley"), which was prior to that date a Chapter 11
Debtor-In-Possession. Valley was a distributor of pet supplies in California
and parts of Oregon and Washington. The cash purchase price was $1,341,000,
which exceeded net assets acquired by $345,000, which was recorded as
goodwill.

On June 18, 1996, the Company entered into a definitive agreement to acquire
Kenlin Pet Supply, Inc. ("Kenlin"), a distributor of pet supply products in
the eastern United States. Kenlin, which is based in New Jersey, operates in
17 eastern states and has approximately 290 employees. Under the terms of the
stock purchase agreement, the Company will pay an aggregate of $33 million in
cash to acquire or redeem all of Kenlin's outstanding stock and eliminate all
of its outstanding debt.

3. KEY-MAN INSURANCE

Through May 1996, the Company maintained life insurance policies for the
Chairman and Chief Executive Officer (principal shareholder) and the President
of the Company, with face amounts of $6,000,000 and $2,000,000, respectively.
The Company was the beneficiary of both of these policies.

4. CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMER

Trade receivables subject the Company to a concentration of credit risk with
customers in the retail sector. This risk is limited due to the large number
of customers comprising the Company's customer base and their geographic
dispersion. A single customer accounted for approximately 16% and 19% of net
sales in fiscal years 1993 and 1994 and 22% in the nine month period ended
September 30, 1995.

5. ACCOUNTS AND NOTES PAYABLE

The Company has a line of credit providing for aggregate borrowings of up to
$75,000,000, which expires on July 12, 1998. The available amount under the
line of credit fluctuates based upon a specific asset borrowing base. At
December 25, 1994 and September 30, 1995, balances of $38,920,000 and
$33,870,000, respectively, were outstanding under this agreement, bearing
interest (10.0% at December 25, 1994 and 9.5% at September 30, 1995) at a rate
related to the prime rate. Available borrowings at December 25, 1994 and
September 30, 1995 were $7,300,000 and $19,840,000, respectively. This line is
secured by substantially all of the Company's assets, and contains certain
financial covenants requiring maintenance of minimum levels of working capital
and net worth, and restricts the Company's ability to pay dividends. The
Company was in compliance with such covenants at December 25, 1994 and
September 30, 1995.

The Company has an additional line of credit of $6,000,000 with another
lender as a result of its 1993 acquisition of CGS Distributing Inc. At
December 25, 1994 and September 30, 1995, balances of $4,260,000 and
$4,100,000 were outstanding under this agreement, bearing interest (9.0% at
December 25, 1994 and 9.25% at September 30, 1995) at a rate related to the
prime rate. The line is secured by substantially all of the assets of the
acquired distributor and contains certain financial covenants. The Company was
in compliance with such covenants at December 25, 1994 and September 30, 1995.

Under the covenants in the Company's principal credit agreement described
above, dividends can only be paid if there is no material default of any of
the covenants contained in the agreement. The amount of such dividends shall
not exceed the prior year's net income and the aggregate amount of all

F-9
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

dividends paid from June 12, 1992 through July 12, 1998, and is limited to
approximately $4.5 million. Such restrictions would have limited dividends in
1995 to $1,405,000, however, the Company did not pay dividends during the nine
months ended September 30, 1995.

The Company secured an additional line of credit in 1995 with a major
supplier which is available to finance purchases of the supplier's products up
to a maximum of $81,000,000. This facility bears interest at 1.5% below the
prime rate (7.25% at September 30, 1995) and expired on November 15, 1995. In
connection with this arrangement the Company had granted a security interest
in certain inventories and receivables. At September 30, 1995, approximately
$24,000,000 was related to this credit facility, and included in accounts
payable.

6. LONG-TERM DEBT

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 25, SEPTEMBER 30,
1994 1995
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Note payable to Weyerhaeuser Corporation,
discounted at 10.25% imputed rate, interest due in
quarterly installments, principal due in annual
installments through 1999, secured by certain
inventory and equipment........................... $4,845 $ 3,750
Note payable (converted from accounts payable) to a
former supplier, interest at 10% and principal due
March 1998........................................ 5,885
Note payable to former shareholder, interest at 1%
under prime (7.50% at December 25, 1994; 7.75% at
September 30, 1995), principal and interest due in
annual installments to 1997, secured by stock of
the principal shareholder......................... 1,800 1,200
Note payable to bank, interest based on a formula
(7.00% at December 25, 1994; 8.125% at September
30, 1995), principal and interest payable in
monthly installments through March 1998 with
payments computed based on 30-year amortization
with a balloon payment at March 1998.............. 1,927 1,889
Notes payable to former shareholders, non-interest
bearing, discounted at 15% imputed interest rate,
due in installments through July 1, 1995.......... 69
Note payable to bank, interest based on a formula
(9.25% at December 25, 1994; 9.5% at September 30,
1995), principal and interest due in quarterly
installments to 1997.............................. 111 78
Other notes payable................................ 79 27
------ -------
Total............................................ 8,831 12,829
Less current portion of long-term debt............. 1,812 1,699
------ -------
Total.............................................. $7,019 $11,130
====== =======
</TABLE>

F-10
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Principal repayments on long-term debt are scheduled as follows at September
30, 1995:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Fiscal year:
1996........................................................ $ 1,699
1997........................................................ 1,672
1998........................................................ 6,945
1999........................................................ 2,513
2000........................................................ --
-------
Total....................................................... $12,829
=======
</TABLE>

7. OPERATING LEASES

The Company has operating lease agreements principally for office and
warehouse facilities and equipment. Such leases have remaining terms,
inclusive of renewal options, of 1 to 8 years. Rent expense for all operating
leases amounted to $4,735,000 and $5,903,000 for fiscal years 1993 and 1994
and $6,437,000 for the nine month period ended September 30, 1995.

Certain facility leases have renewal options and provide for additional rent
based upon increases in the Consumer Price Index. Rental expense and sublease
income from certain leases not used in the Company's business are included in
other expense-net.

Aggregate minimum annual payments on noncancelable operating leases at
September 30, 1995 are as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Fiscal year:
1996........................................................ $ 6,498
1997........................................................ 5,719
1998........................................................ 4,774
1999........................................................ 2,831
2000........................................................ 2,438
Thereafter.................................................. 2,621
-------
Total..................................................... $24,881
=======
</TABLE>

8. INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED NINE-MONTH
------------------- PERIOD ENDED
SEPTEMBER 30,
1993 1994 1995
--------- --------- -------------
<S> <C> <C> <C>
Current
Federal................................. $ 1,744 $ 1,530 $187
State................................... 607 402 127
--------- --------- ----
Total..................................... 2,351 1,932 314
Deferred.................................. 286 (996) 590
--------- --------- ----
Total..................................... $ 2,637 $ 936 $904
========= ========= ====
</TABLE>

F-11
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

A reconciliation of the statutory federal income tax rate with the Company's
effective income tax rate is as follows:
<TABLE>
<CAPTION>
FISCAL YEARS NINE-MONTH
ENDED PERIOD ENDED
--------------- -------------
SEPTEMBER 30,
1993 1994 1995
------ ------ -------------
<S> <C> <C> <C>
Statutory rate.......... 34% 34% 34%
State income taxes, net
of federal benefit..... 5 5 5
Nondeductible expenses.. 5 9
Other................... 1 (4) (3)
------ ------ ---
Effective tax rate...... 40% 40% 45%
====== ====== ===
</TABLE>

Deferred income taxes reflect the impact of "temporary differences" between
amounts of assets and liabilities for financial reporting purposes and such
amounts as measured by tax laws. Temporary differences and carryforwards which
give rise to deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
DECEMBER 25, 1994 SEPTEMBER 30, 1995
-------------------- --------------------
DEFERRED DEFERRED DEFERRED DEFERRED
TAX TAX TAX TAX
ASSETS LIABILITIES ASSETS LIABILITIES
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Current:
Allowance for doubtful accounts
receivable........................ $ 941 $1,204
Inventory reserves................. 1,327 972
Prepaid expenses................... $ 395 $ 239
Nondeductible reserves............. 1,405 888
Net operating reserves............. 176 139
Other.............................. 150 86 29 86
------ ------ ------ ------
Total............................ 3,999 481 3,232 325
Valuation allowance.................. (25) (25)
------ ------ ------ ------
Current.............................. 3,974 481 3,207 325
Noncurrent:
Adoption of FIFO inventory method.. 958 639
Depreciation....................... 647 978
Other.............................. 90 60
------ ------ ------ ------
Noncurrent........................... -- 1,695 -- 1,677
------ ------ ------ ------
Total............................ $3,974 $2,176 $3,207 $2,002
====== ====== ====== ======
</TABLE>

9. SHAREHOLDERS' EQUITY

At September 30, 1995, there were 1,000 shares of Series A convertible
preferred stock ($.01 par value) authorized, of which 100 shares were
outstanding. In July 1995, in connection with an agreement to become the
master agent and distributor for Solaris, a strategic business unit of
Monsanto Company, products nationwide, the Company received from Monsanto
Company $900,000 in exchange for its issuance of 100 shares of Series A
convertible preferred stock and a warrant to purchase up to 500,000 shares of
common stock with an exercise price of $9.00 per share. Under the Solaris
Agreement the Company, in addition to serving as the principal distributor and
agent for sales of Solaris products, will establish a nationwide network of
independent distributors carrying Solaris products and provide a wide range of
value-added services to Solaris retailers including logistics, order
processing and fulfillment, inventory distribution and merchandising. Each
share of Series A convertible preferred stock is entitled to a liquidation
preference of $9,000 per share, is convertible into 1,000 shares of common
stock, is entitled

F-12
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

to an annual 5% cumulative dividend, votes together with common stock, and has
a number of votes equal to the number of shares of common stock into which it
is convertible.

At September 30, 1995, there were 3,000,000 shares of Class B stock ($.01
par value) authorized, of which 2,178,874 were outstanding. The voting powers,
preferences and relative rights of the Class B stock are identical to common
stock in all respects except that (i) the holders of common stock are entitled
to one vote per share and the holders of Class B stock are entitled to the
lesser of ten votes per share or 49% of the total votes cast, (ii) stock
dividends on common stock may be paid only in shares of common stock and stock
dividends on Class B stock may be paid only in shares of Class B stock and
(iii) shares of Class B stock have certain conversion rights and are subject
to certain restrictions on ownership and transfer. Each share of Class B stock
is convertible into one share of common stock, at the option of the holder.
Additional shares of Class B stock may only be issued with majority approval
of the holders of the common stock and Class B stock, voting as separate
classes.

At September 30, 1995, there were 11,000,000 shares of common stock
authorized, of which 3,606,964 were outstanding.

On November 15, 1995, the Company completed an offering of 5,750,000 shares
of its common stock at $6.75 per share before deduction for underwriting
commission and expenses related to the offering. The net proceeds were used to
reduce the Company's borrowings under its principal line of credit.

Effective July 1, 1995 the Company retired all of its treasury stock, which
consisted of 809,578 Class B shares and 9,000 common shares. Upon retirement,
the excess of the aggregate treasury stock purchase price over par value was
allocated to additional paid-in capital and to retained earnings.

In 1993, the Company adopted the Omnibus Equity Incentive Plan (the "Plan")
which provided for the grant of options to key employees and consultants of
the Company for the purchase of up to an aggregate of 900,000 shares of common
stock of the Company. In 1995, the Company amended the Plan to increase the
number of shares authorized for issuance by an additional 300,000 and in 1996,
the Company further amended the Plan to increase the number of shares
authorized for issuance by an additional 800,000. The Plan is administered by
the Audit and Compensation Committee of the Board of Directors, comprised of
outside independent directors only, who determine individual awards to be
granted, vesting and exercise of share conditions. Option activity under the
Plan is as follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
---------------------------------
SHARES PRICE
AVAILABLE SHARES PER SHARE
--------- ------- -------------
<S> <C> <C> <C>
Authorized................................... 900,000
Options granted in 1993...................... (72,094) 72,094 $ 9.75 - 3.75
--------- -------
Balance at December 26, 1993................. 827,906 72,094 $ 9.75 - 3.75
Options granted in 1994...................... (301,780) 301,780 $ 9.75 - 1.30
Options cancelled in 1994.................... 12,995 (12,995) $ 3.75
--------- -------
Balance at December 25, 1994................. 539,121 360,879 $ 9.75 - 1.30
Authorized................................... 300,000
Options granted in 1995...................... (236,500) 236,500 $ 5.125 - 3.31
Options exercised in 1995.................... (17,645) $ 3.75 - 1.30
Options cancelled in 1995.................... 9,183 (9,183) $ 3.75 - 1.30
--------- -------
Balance at September 30, 1995................ 611,804 570,551 $ 9.75 - 1.30
Authorized................................... 800,000
Options granted.............................. (158,000) 158,000 $ 8.875 - 6.125
Options exercised............................ (69,855) $ 4.00 - 1.30
Options cancelled............................ 3,233 (3,233) $ 9.75 - 3.31
--------- -------
Balance at March 30, 1996 (unaudited)........ 1,257,037 655,463 $ 9.75 - 1.30
========= =======
</TABLE>

F-13
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The 1993 and 1994 options granted vest one year from date of grant and can
be exercised in full at any time thereafter during the following four years.
Certain of the 1995 options granted vest in full over periods ranging from 3
to 6 years and can be exercised in full at any time thereafter, while other
1995 options granted vest on a straight-line basis over periods ranging from 3
to 8 years and can be exercised at any time thereafter during the following
year. Options of 222,295 were exercisable at September 30, 1995.

The Company has a Profit Sharing Plan to reward employees in various regions
of the country based on each region's profit performance. No contributions
were made for fiscal years 1993 and 1994 or for the nine month period ended
September 30, 1995. In addition, the Company has a 401(k) plan to which it
contributed $198,000 for fiscal year 1994 and accrued $148,000 for the nine
month period ended September 30, 1995. No contributions were made in fiscal
year 1993.

10. TRANSACTIONS WITH RELATED PARTIES

In 1993, the Company made sales, at cost, to Source One, a company that was
constructively owned by the principal shareholder of the Company, and
purchased a portion of its inventory from a supplier, Grant Laboratories,
Inc., that was controlled by the Company's principal shareholder. As discussed
in Note 2, Source One and Grant Laboratories, Inc. were acquired by the
Company in 1993. Transactions with these related parties in 1993 up to the
dates of acquisition consisted of sales of $2,082,000, interest income of
$116,000 and inventory purchases of $618,000.

The Company leases certain warehouse facilities and equipment from related
entities which are controlled by the Company's principal shareholder. Rental
expense under these leases totaled $560,000 and $115,000 for 1993 and 1994 and
$116,000 for the nine month period ended September 30, 1995. On October 1,
1993, the Company purchased its principal California distribution warehouse
located in Visalia from Road 80 Properties, a partnership controlled by the
Company's principal shareholder. The purchase price, which was based on an
independent appraisal, was $3,458,000, consisting of a 120-day noninterest-
bearing loan of $1,503,000 and the assumption of a note, secured by the
acquired property, payable to a bank in the amount of $1,955,000. The note
payable to the bank bears interest, based on a formula (7.00% at December 25,
1994 and 8.125% at September 30, 1995), and is payable monthly through March
1998. Payments are computed based on 30-year amortization with a balloon
payment due at maturity.

11. BATON ROUGE FIRE

On July 14, 1992, the Company's warehouse in Baton Rouge, Louisiana and two
adjoining warehouse spaces leased by third parties were damaged as the result
of a fire that originated while an environmental contractor was removing
broken containers of a swimming pool water purifier maintained in the
Company's inventory. The warehouse was one of the Company's smallest and the
inventory, although substantially damaged, was an immaterial portion of the
Company's total inventories at that time.

The Company maintained insurance coverage in the following amounts: $40
million for damage to Company property; $8 million for Company business
interruption; and $11 million for third-party liability. Subsequent to the
fire, the Company made certain changes in its insurance coverage, including
increasing certain coverage amounts and consolidating most of its insurance
with a new carrier.

While the overall amounts of the damages to all parties caused by the fire
is believed to aggregate $20 million or more, the amount of damages sustained
by the Company and third parties as a result of the fire has not been
determined. The Company believes that the fire was caused principally by the
environmental contractor and intends to hold such contractor responsible for
any losses or damages

F-14
<PAGE>

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

which it sustains. The ultimate determinations of the parties responsible (and
their relative responsibility) for such damages and the availability of
insurance coverage are likely to depend on the outcome of complex litigation
involving numerous claimants, defendants and the insurance companies, the
relative responsibility of the various parties and complicated facts and legal
determinations. Accordingly, no assurance can be given as to the ultimate
impact of the Baton Rouge fire on the Company. Management of the Company
believes, based on the information currently available to it, that the
ultimate resolution of this matter will not have a material adverse effect on
the Company's financial position or results of operations.

Except as disclosed above, the Company is not a party to any other material
litigation.

12. INITIAL PUBLIC OFFERING

In connection with the Company's July 1993 initial public offering ("IPO"),
the Company issued 2,030,000 shares of common stock at $10 per share before
deduction for underwriting commission and costs related to the offering. The
net proceeds to the Company were used to reduce the Company's borrowings under
its principal line of credit.

Supplementary net income per share shows what the effect on net income per
share would have been had the net proceeds been used to pay down the credit
line at December 28, 1992. Supplementary net income per share is based on net
income, as adjusted to reflect the reduction of notes payable equal to the
$17,973,000 net proceeds from the IPO and the elimination of the related
interest expense on such borrowings net of tax, divided by 6,010,886 shares
outstanding upon completion of the IPO. Supplementary net income per share was
$.74 for 1993.

13. SELECTED CONSOLIDATED INCOME STATEMENT DATA (UNAUDITED)

The following selected consolidated income statement data have been derived
from the unaudited consolidated financial statements of the Company. In the
opinion of management, the unaudited selected data shown below have been
prepared on the same basis as the audited consolidated statements of income
included herein and include adjustments only of a normal recurring nature.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 25, 1994
----------------------
(AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE)
<S> <C>
Sales................... $358,138
Gross profit............ 57,524
Selling, general and
administrative
expenses............... 45,380
Income from operations.. 12,144
Income taxes............ 2,965
Net income.............. 4,431
Net income per common
and common equivalent
share.................. 0.75
</TABLE>

F-15
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Board of Directors
Kenlin Pet Supply, Inc.

We have audited the accompanying balance sheets of Kenlin Pet Supply, Inc.
as of July 31, 1995 and 1994 and the related statements of operations and
retained earnings (deficit) and cash flows for each of the two years in the
period ended July 31, 1995 and the period August 21, 1992 (commencement date
of operations) through July 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Kenlin Pet Supply, Inc. at
July 31, 1995 and 1994 and the results of its operations and its cash flows
for each of the two years in the period ended July 31, 1995 and the period
August 21, 1992 (commencement date of operations) through July 31, 1993 in
conformity with generally accepted accounting principles.

Ernst & Young LLP

Hackensack, New Jersey
September 22, 1995

F-16
<PAGE>

KENLIN PET SUPPLY, INC.

BALANCE SHEETS
<TABLE>
<CAPTION>
JULY 31
-----------------------
MARCH 30
1994 1995 1996
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................. $ 539,718 $ 41,681 $ 98,539
Accounts receivable, less allowances of
$133,044 in 1994 and $212,728 in 1995.... 3,247,337 3,952,587 5,069,213
Merchandise inventories................... 7,701,598 8,190,580 9,987,463
Miscellaneous receivables and other cur-
rent assets.............................. 501,649 529,718 544,185
Prepaid income taxes...................... 92,300
Deferred taxes (Note 4)................... 163,100 203,900 203,900
----------- ----------- -----------
Total current assets..................... 12,153,402 13,010,766 15,903,300
Other assets............................... 66,508 80,131 83,630
Equipment, furniture, fixtures and
leasehold improvements, net of accumulated
depreciation of $454,926 in 1994 and
$764,454 in 1995.......................... 926,607 1,172,592 1,595,647
Intangibles and deferred financing costs,
net....................................... 1,206,044 775,847 1,032,789
Organization and start-up costs, net....... 430,793 289,905 242,286
Goodwill, net.............................. 2,860,195 2,785,041 2,967,003
----------- ----------- -----------
$17,643,549 $18,114,282 $21,824,655
=========== =========== ===========
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of notes payable and long-
term debt
(Note 2)................................. $ 1,721,812 $ 462,638
Accounts payable.......................... 1,175,488 2,053,728 $ 2,402,652
Accrued expenses and other current liabil-
ities.................................... 759,188 960,574 1,129,376
Income taxes payable...................... 472,027 61,547 230,509
----------- ----------- -----------
Total current liabilities................ 4,128,515 3,538,487 3,762,537
Other liabilities:
Deferred taxes (Note 4)................... 24,600 400 400
Notes payable and long-term debt (Note 2) 9,205,430 8,950,265 11,080,507
Redeemable preferred stock (Note 3):
Cumulative, redeemable preferred stock,
par value $1.00 per share, authorized
10,000 shares, issued and outstanding
2,867 shares for 1994 and 3,107 shares
for 1995................................. 2,866,849 3,106,849 3,227,505
Common stockholders' equity (Notes 3 and
5):
Class A voting common stock, par value
$.01 per share, authorized 11,000 shares,
issued and outstanding 2,822 shares...... 28 28 28
Class B non-voting common stock, par value
$.01 per share, authorized 11,000 shares,
issued and outstanding 4,000 shares...... 40 40 40
Class C voting common stock, par value
$.01 per share, authorized 11,000 shares,
issued and outstanding 2,378 shares...... 24 24 24
Additional paid-in capital................ 873,059 873,059 873,059
Retained earnings......................... 545,004 1,645,130 2,880,555
----------- ----------- -----------
Total common stockholders' equity........ 1,418,155 2,518,281 3,753,706
----------- ----------- -----------
$17,643,549 $18,114,282 $21,824,655
=========== =========== ===========
</TABLE>

See accompanying notes.

F-17
<PAGE>

KENLIN PET SUPPLY, INC.

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
<TABLE>
<CAPTION>
EIGHT MONTHS ENDED
YEAR ENDED JULY 31 MARCH 30
------------------------ ------------------------
PERIOD ENDED
JULY 31
1993 1994 1995 1995 1996
------------ ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales............... $44,716,387 $53,253,525 $62,979,341 $42,888,323 $48,748,181
Cost of goods sold...... 33,394,092 38,603,547 45,783,989 31,250,001 35,338,857
----------- ----------- ----------- ----------- -----------
Gross profit............ 11,322,295 14,649,978 17,195,352 11,638,322 13,409,324
Selling, general and
administrative
expenses............... 9,163,816 11,214,833 13,133,341 8,845,294 9,973,112
----------- ----------- ----------- ----------- -----------
Income from operations.. 2,158,479 3,435,145 4,062,011 2,793,028 3,436,212
Amortization expense.... 965,474 907,902 646,239 441,759 396,640
Interest expense........ 1,225,230 1,130,709 1,134,921 771,561 726,486
Other income--net....... 41,095 31,026 19,275 (7,271) (15,643)
----------- ----------- ----------- ----------- -----------
Income before income
taxes.................. 8,870 1,427,560 2,300,126 1,572,437 2,297,443
Provision for income
taxes (Note 4)......... 28,200 623,226 960,000 649,016 941,362
----------- ----------- ----------- ----------- -----------
Net income (loss)....... (19,330) 804,334 1,340,126 923,421 1,356,081
Dividends on redeemable
preferred stock........ (240,000) (240,000) 120,985 120,656
Retained earnings
(deficit) at beginning
of year................ -- (19,330) 545,004 545,004 1,645,130
----------- ----------- ----------- ----------- -----------
Retained earnings
(deficit) at end of
year................... $ (19,330) $ 545,004 $ 1,645,130 $ 1,347,440 $ 2,880,555
=========== =========== =========== =========== ===========
</TABLE>

See accompanying notes.

F-18
<PAGE>

KENLIN PET SUPPLY, INC.

STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
EIGHT MONTHS ENDED
YEAR ENDED JULY 31 MARCH 30
------------------------ ------------------------
PERIOD ENDED
JULY 31
1993 1994 1995 1995 1996
------------ ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income.............. $ (19,330) $ 804,334 $ 1,340,126 $ 923,421 $ 1,356,081
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and amor-
tization.............. 1,166,384 1,177,364 999,933 683,092 725,675
Loss on disposal of as-
sets.................. 9,575 17,134
Provision for doubtful
accounts.............. 143,582 167,820 182,084 30,517 99,971
Deferred tax benefit... (121,500) (17,000) (65,000)
Changes in operating
assets and liabili-
ties:
Accounts receivable.... (279,076) (174,498) (887,334) (1,053,016) (1,125,784)
Inventories............ 2,100,224 63,557 (488,982) (646,513) (1,179,433)
Miscellaneous
receivables and other
current assets........ 29,322 (117,126) (120,369) 135,180 77,833
Other assets........... (59,358) (7,150) (13,623) (3,499)
Accounts payable....... (378,538) 213,565 878,240 828,576 220,507
Organization and start-
up costs.............. (38,020)
Accrued expenses and
other current
liabilities........... 260,650 354,909 (209,094) (17,257) 296,337
----------- ----------- ----------- ----------- -----------
Net cash provided by op-
erating activities..... 2,813,915 2,482,909 1,615,981 884,000 467,688
INVESTING ACTIVITIES
Cash paid for acquired
business............... (877,012)
Purchase of equipment,
furniture, fixtures and
leasehold
improvements........... (282,020) (365,767) (599,679) (460,633) (563,740)
----------- ----------- ----------- ----------- -----------
Net cash used in invest-
ing activities......... (282,020) (365,767) (599,679) (460,633) (1,440,752)
FINANCING ACTIVITIES
Proceeds from (principal
payments on) notes
payable and long-term
debt................... (225,000) (1,590,550) (1,687,289) (1,480,777) 1,492,560
Net proceeds
(repayments) on
revolving credit note
payable................ (1,950,000) (646,950) 172,950 570,157 (462,638)
----------- ----------- ----------- ----------- -----------
Net cash (used in) pro-
vided by financing ac-
tivities............... (2,175,000) (2,237,500) (1,514,339) (910,620) 1,029,922
----------- ----------- ----------- ----------- -----------
Net (decrease) increase
in cash and cash
equivalents............ 356,895 (120,358) (498,037) (487,253) 56,858
Cash and cash equiva-
lents at beginning of
year................... 303,181 660,076 539,718 539,718 41,681
----------- ----------- ----------- ----------- -----------
Cash and cash equiva-
lents at end of year .. $ 660,076 $ 539,718 $ 41,681 $ 52,465 $ 98,539
=========== =========== =========== =========== ===========
SUPPLEMENTAL CASH FLOW
DISCLOSURE
Cash paid during the
year for:
Interest............... $ 1,194,831 $ 1,130,710 $ 1,134,921 $ 771,561 $ 726,486
Federal and state in-
come taxes............ 197,500 118,756 1,527,780 1,035,692 843,753
Non-cash investing and
financing activities:
Issuance of note pay-
able for acquired
business.............. 650,000
Liabilities assumed
from acquired busi-
ness.................. 128,417
</TABLE>

See accompanying notes.

F-19
<PAGE>

KENLIN PET SUPPLY, INC.

NOTES TO FINANCIAL STATEMENTS

JULY 31, 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

On August 21, 1992 (commencement of operations), Kenlin Acquisition
Corporation ("Kenlin") purchased certain assets and assumed certain
liabilities of Kenlin Pet Supply, Inc. (the "Seller"). Prior to this
transaction, Kenlin was inactive. Also on this date, Kenlin changed its name
to Kenlin Pet Supply, Inc. (the "Company"). The transaction was accounted for
as a purchase.

Concentration of Credit Risk

The Company is engaged in the distribution of a broad line of pet supply
products, principally to retail outlets, in the Northeastern and Midatlantic
United States. No individual customer represents a significant percentage of
sales. The Company performs periodic credit evaluations of its customers and
requires certain customers to personally guarantee amounts due.

Cash Equivalents

Cash equivalents consist of highly-liquid investments with a maturity of
three months or less when purchased.

Merchandise Inventories

Inventories are stated at the lower of cost (average cost) or market.

Income Taxes

Deferred tax assets and liabilities are determined based on differences
between financial reporting and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

Equipment, Furniture, Fixtures and Leasehold Improvements

Equipment, furniture, fixtures and leasehold improvements are stated at
cost. Depreciation is provided on the straight-line basis over estimated
useful lives of the related assets or the remaining term of the lease, which
range from 3 to 10 years.

Intangibles and Deferred Financing Costs

Intangible assets include values assigned to a non-compete agreement
($1,500,000) and consulting services agreement ($750,000) with the controlling
shareholder of the Seller. The non-compete agreement is being amortized over a
period of five years and the consulting services agreement was amortized over
a 2 year period. Accumulated amortization of the non-compete and consulting
services agreements at July 31, 1995 and 1994 was $1,632,740 and $1,315,480,
respectively. Goodwill, all of which resulted from the purchase transaction
described above is being amortized over 40 years. Accumulated amortization of
goodwill at July 31, 1995 and 1994 was $221,126 and $145,972, respectively.

Costs incurred in connection with long-term debt have been deferred and are
being amortized over the lives of the related debt issues using the interest
method. Accumulated amortization of deferred financing costs at July 31, 1995
and 1994 was $251,213 and $138,276, respectively.

F-20
<PAGE>

KENLIN PET SUPPLY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JULY 31, 1995

Organization and Start-up Costs

Costs associated with the organization of the corporation and other costs
incurred to complete the acquisition and start the business operations
described above are being amortized over 60 months. Accumulated amortization
of these costs at July 31, 1995 and 1994 was $414,536 and $273,648,
respectively.

Interim Financial Statements

The accompanying unaudited interim financial statements as of March 30, 1996
and for each of the eight month periods ended March 30, 1996 and 1995 include
all adjustments which, in the opinion of management, are necessary for a fair
presentation of the Company's financial position and results of operations and
cash flows for the periods presented. All adjustments are of a normal
recurring nature. The results of the Company's operations for the eight months
ended March 30, 1996 are not necessarily indicative of the results of
operations for a full fiscal year.

2. NOTES PAYABLE AND LONG-TERM DEBT

Notes payable and long-term debt consists of the following:

<TABLE>
<CAPTION>
JULY 31,
----------------------
1994 1995
----------- ----------
<S> <C> <C>
Revolving credit note payable........................... $ 1,827,050 $2,000,000
Term note payable to bank, payable in quarterly
installments in increasing amounts, including interest
which has accrued from the last monthly payment of
interest, through August 1998 (Tranche A Note)......... 2,184,450 462,638
Term note payable to bank, payable in quarterly
installments of $250,000 commencing November 30, 1997
through August 31, 1998 and $375,000 through August 31,
1999, including interest which has accrued from the
last monthly payment of interest, through August 1999
(Tranche B Note)....................................... 2,500,000 2,500,000
Subordinated note payable to Seller, payable on August
31, 2002, with interest payable in quarterly
installments commencing November 30, 1992 at 10%,
through August 2002.................................... 4,415,742 4,415,742
Capital lease obligation................................ 34,523
----------- ----------
10,927,242 9,412,903
Less current portion.................................... 1,721,812 462,638
----------- ----------
Total long-term debt.................................... $ 9,205,430 $8,950,265
=========== ==========
</TABLE>

The revolving credit note payable represents the amount outstanding under a
$6 million revolving credit note with a bank due the earlier of August 21,
1999 or the date on which the two term loans are paid in full. Any unused
portion of the revolving credit facility is subject to a .5% commitment fee.
Borrowings under the revolving credit note are based on a specific borrowing
formula based on eligible assets. The outstanding balance under the revolving
credit note has been excluded from current liabilities because the Company
intends that at least that amount would remain outstanding under this
agreement for an uninterrupted period extending beyond one year from the
balance sheet date. The revolving credit note payable and two term loans
("senior loans") bear interest, payable monthly, based upon a rate option
selected by the Company and adjusted based upon the terms of each note. The
rates in effect at July 31, 1995 are 10.38%, 10.63%, and 13.13%, respectively
(8.78%, 9.04% and 11.54%, respectively, at July 31, 1994). The senior loans
are collateralized by substantially all assets of the Company. Among other
things, the senior loans restrict the Company's ability to incur additional
indebtedness and require the Company

F-21
<PAGE>

KENLIN PET SUPPLY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JULY 31, 1995

to maintain certain financial ratios. In addition, the repayment terms of the
senior loans call for accelerated payments based upon "excess cash flow" (as
defined). At July 31, 1995, $217,970 has been classified as a current
liability based on 1995 excess cash flows.

In accordance with the terms of the senior loans, the Company had an
interest rate cap agreement for a notional principal amount of $5 million,
which provided for a maximum increase of 2.72% over the rate in effect at the
date of the agreement for a period of thirty months. This agreement expired in
April 1995

The subordinated note payable is subject to a mandatory prepayment schedule
at such time that all senior loans have been paid in full ("senior loan
payment date"). The prepayment schedule provides that 20% of the principal be
paid on the first through fifth anniversary date of such payment date.

As of July 31, 1995, maturities of bank loans and notes payable over the
next five fiscal years are as follows:

<TABLE>
<S> <C>
1996.......................................................... $ 462,638
1997.......................................................... --
1998.......................................................... 750,000
1999.......................................................... 1,375,000
2000.......................................................... 2,375,000
Thereafter.................................................... 4,450,265
</TABLE>

3. CUMULATIVE REDEEMABLE PREFERRED STOCK

The cumulative, redeemable preferred stock is non-voting and has a minimum
liquidating preference of $1,000 per share and is subject to redemption by the
Company on the earlier of August 21, 1999 or the date of a redemption event,
as defined in the Certificate of Incorporation. Dividends are fixed at
$240,000 per year and are on a paid-in-kind basis.

4. INCOME TAXES

The provision for income taxes is comprised of the following:
<TABLE>
<CAPTION>
PERIOD
ENDED YEAR ENDED JULY 31
JULY 31 --------------------
1993 1994 1995
--------- --------- ----------
<S> <C> <C> <C>
Current:
Federal.................................. $ 112,800 $ 480,000 $ 787,000
State.................................... 36,900 160,226 238,000
--------- --------- ----------
149,700 640,226 1,025,000
Deferred:
Federal.................................. (94,300) (13,000) (52,000)
State.................................... (27,200) (4,000) (13,000)
--------- --------- ----------
(121,500) (17,000) (65,000)
--------- --------- ----------
$ 28,200 $ 623,226 $ 960,000
========= ========= ==========
</TABLE>

The Company's income tax provisions differ from the statutory rate
principally due to state income taxes and the nondeductibility of goodwill
amortization for tax purposes.

F-22
<PAGE>

KENLIN PET SUPPLY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JULY 31, 1995

The components of the Company's current and long-term deferred tax accounts
consisted of the following:

<TABLE>
<CAPTION>
LONG-
CURRENT TERM TOTAL
-------- -------- --------
<S> <C> <C> <C>
JULY 31, 1994
Deferred tax assets:
Bonus accrual................................... $ 19,100 $ 19,100
Accounts receivable allowance................... 58,000 58,000
Capitalized inventory costs..................... 112,000 112,000
-------- --------
Total deferred tax assets........................ 189,100 189,100
Deferred tax liabilities:
Tax over book depreciation...................... $ 24,600 24,600
Prepaid expenses................................ 15,400 15,400
State taxes..................................... 10,600 10,600
-------- -------- --------
Total deferred tax liabilities................... 26,000 24,600 50,600
-------- -------- --------
Net deferred tax assets.......................... $163,100 $(24,600) $138,500
======== ======== ========
<CAPTION>
LONG-
CURRENT TERM TOTAL
-------- -------- --------
<S> <C> <C> <C>
JULY 31, 1995
Deferred tax assets:
Book over tax amortization...................... $33,700 $33,700
Bonus accrual................................... $ 27,100 $ 27,100
Accounts receivable allowance................... 94,200 94,200
Capitalized inventory costs..................... 124,800 124,800
-------- --------
Total deferred tax assets........................ 246,100 33,700 279,800
Deferred tax liabilities:
Tax over book depreciation...................... 34,100 34,100
Prepaid expenses................................ 27,200 27,200
State taxes..................................... 15,000 15,000
-------- -------- --------
Total deferred tax liabilities................... 42,200 34,100 76,300
-------- -------- --------
Net deferred tax assets.......................... $203,900 $ (400) $203,500
======== ======== ========
</TABLE>

No valuation allowance on deferred tax assets was considered necessary at
either July 31, 1995 or 1994.

5. COMMON STOCKHOLDERS' EQUITY

The Class A and Class C common stock are convertible into an equal number of
shares of Class B common stock, and Class B common stock is convertible into
an equal number of shares of Class A common stock. All shares of Class C
common stock are subject to automatic conversion into an equal number of Class
A common stock upon closing of the first underwritten public offering pursuant
to an effective registration statement under the Securities Act of 1933 in an
amount not less than $20 million in gross proceeds.

F-23
<PAGE>

KENLIN PET SUPPLY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JULY 31, 1995

In consideration for making the Tranche B Note, the Company has issued to
the bank Warrants to purchase up to 800 additional shares (plus additional
"anti-dilution" shares) of the Company's Class A common stock. The Warrants
are exercisable at $.01 per share, subject to adjustment under the terms of
the Warrant. The Warrants are subject to mandatory redemption at the option of
the holder at the earliest of August 21, 1997 or the occurrence of certain
events which effectively repay the senior loans and revolving loan. Redemption
at the option of the Company can also occur during certain periods as
specified in the Warrant. The mandatory and optional redemptions will be at
per share values defined in the Warrant and are based upon fair market value.
The Warrant expires on August 21, 2002.

The Company has entered into option agreements with two key employee
stockholders which entitle them each to purchase Class A common stock in an
amount up to 2% (plus additional "anti-dilution" shares) of total common stock
on a fully diluted basis. These options become exercisable based upon a
financial calculation at a price equal to $.10 per share. The options
terminate at the earlier of August 21, 2012 or a terminating event, as
defined.

At July 31, 1995, 7,779 shares of unissued Class A common stock of the
Company were reserved for issuance in accordance with the terms of the
convertible securities, the stock option agreements, and the Warrants and
7,000 shares of the Class B common stock were reserved for issuance under the
terms of the convertible securities.

The Class B and Class C common stock are subject to put by the stockholder
on or after August 22, 1997 and call by the Company on or after August 22,
1998, each at a price per share equal to the greater of the fair market value
at the date of put or call or an amount calculated based upon certain
financial information as defined in the Securities Purchase Agreement. The
Agreement terminates on the date there are no longer any preferred or common
shares outstanding.

Under certain circumstances, Class C common stock has special voting rights
as compared to Class A common stock. In addition, the Company is party to a
Registration Rights Agreement which provides certain shares with rights to
request registration of their shares under the Securities Act of 1933 at any
time after August 21, 1997.

6. STOCK COMPENSATION PLAN

In August 1992, the Company established a Stock Compensation Plan under
which shares of common stock may be issued and options may be granted at the
discretion of the Board of Directors to employees, directors, officers,
consultants and advisors. In November 1993 an option to purchase up to 101
shares of the Company's Class A common stock for $.10 per share was granted to
an employee. The option vests in November 1995. The compensation element
related to this grant was not material.

7. EMPLOYEE BENEFIT PLAN

During 1993, the Company established an employee profit sharing plan
covering substantially all employees. The Company at its discretion
contributes to the plan an amount determined by the Board of Directors. The
Company has accrued $62,500, $52,500 and $50,500 for the years ended July 31,
1995 and 1994 and the period ended July 31, 1993, respectively.

F-24
<PAGE>

KENLIN PET SUPPLY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JULY 31, 1995

8. COMMITMENTS

The Company leases its principal warehouse and administrative facility under
a five year non-cancellable operating lease with a 5 year renewal option.
Rental expense under this operating lease was approximately $795,000, $714,000
and $714,000 for the years ended July 31, 1995 and 1994 and the period ended
July 31, 1993, respectively.

Approximate minimum future lease payments for noncancellable operating
leases with terms in excess of one year for each fiscal year are as follows:

The Company has entered into 5 year employment agreements with two key
employee stockholders. Each agreement provides for an annual base salary plus
an annual incentive bonus. The agreements expire on July 31, 1997.

9. EVENTS SUBSEQUENT TO AUDITED FINANCIAL STATEMENTS

On November 9, 1995, the Company acquired certain assets and assumed certain
liabilities of Spector Wholesale Supply, Inc., a company engaged in the
distribution of pet supplies. The aggregate purchase price was approximately
$1,200,000. The transaction was accounted for under the purchase method of
accounting. In addition, the Company entered into a ten year non-competition
agreement with the former owners for $500,000.

On June 18, 1996 the shareholders of the Company entered into an agreement
with Central Garden and Pet Company to sell all of the outstanding common
stock of the Company to Central Garden and Pet Company.

F-25
<PAGE>

[Inside Back Cover]

[Picture of Central Garden & Pet truck unloading merchandise at Wal*Mart store
with the following caption underneath: "Central Garden & Pet is the leading
distributor of lawn and garden products and a major distributor of pet supplies
to retailers throughout the U.S."]

[Picture of Central Garden & Pet personnel stocking shelves at retail store
with Ortho products with the following caption underneath: "Central Garden &
Pet's sales personnel work with retailers to provide servicing, merchandising,
and training."]

[Picture of Grant's line of ant control products with the following caption
underneath: "Grant's line of ant control products is one of the Company's
proprietary branded product lines."]

[Picture of aquarium and related aquarium products with the following caption
underneath: "Central Garden & Pet is a manufacturer and major distributor of pet
supplies."]
<PAGE>

===============================================================================

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 6
Use of Proceeds.......................................................... 11
Dividend Policy.......................................................... 11
Price Range of Common Stock.............................................. 12
Capitalization........................................................... 13
Selected Consolidated Financial and Operating Data....................... 14
Unaudited Pro Forma Combined Financial Data.............................. 15
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 18
Business................................................................. 25
Management............................................................... 37
Principal and Selling Stockholders....................................... 39
Description of Capital Stock............................................. 40
Underwriting............................................................. 43
Shares Eligible for Future Sale.......................................... 44
Legal Matters............................................................ 45
Experts.................................................................. 45
Additional Information................................................... 45
Available Information.................................................... 46
Incorporation of Certain Documents by Reference.......................... 46
Index to Consolidated Financial Statements............................... F-1
</TABLE>

===============================================================================

2,750,000 Shares

LOGO

Common Stock

------------

PROSPECTUS

------------

Alex. Brown & Sons
INCORPORATED

Hambrecht & Quist

Wasserstein Perella
Securities, Inc.

July 19, 1996

===============================================================================