<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
(Mark One)
<TABLE>
<S> <C>
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1034
For the quarterly period ended June 28, 1997
----------------------------------------------------------------------------------------
or
[_] TRANSITION REPORT PURSUANT OF SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------------------------------------------------------------------------------------
Commission File Number: 0 - 20242
-----------------------------------------------------------------------------------------------
CENTRAL GARDEN & PET COMPANY
- ----------------------------------------------------------------------------------------------------------------------
Delaware 68-0275553
- ----------------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
3697 Mt. Diablo Blvd., Suite 310, Lafayette, California 94549
______________________________________________________________________________________________________________________
(Address of principle executive offices)
_____________________________________________________________________________________________________________________
(510) 283-4573
- ----------------------------------------------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
______________________________________________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [x] Yes [_] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.[_]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock Outstanding as of June 28, 1997 13,333,182
Class B Stock Outstanding as of June 28, 1997 1,863,167
<PAGE>
CENTRAL GARDEN & PET COMPANY FORM 10-Q
Part 1- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<PAGE>
CENTRAL GARDEN & PET COMPANY
CONSOLIDATED BALANCE SHEETS
---------------------------
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 28, JUNE 28,
1996 1997
--------------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 1,272 $ 1,337
Accounts receivable (less allowance for doubtful
accounts of $5,278 and $5,225) 62,231 134,728
Inventories 169,835 219,936
Prepaid expenses and other assets 7,132 9,943
-------------- -------------
Total current assets 240,470 365,944
LAND, BUILDINGS, IMPROVEMENTS AND EQUIPMENT:
Land 431 2,216
Buildings and improvements 3,450 9,059
Transportation equipment 3,161 4,108
Warehouse equipment 7,878 12,732
Office furniture and equipment 8,046 10,783
-------------- -------------
Total 22,966 38,898
Less accumulated depreciation and amortization 11,502 16,808
-------------- -------------
Land, buildings, improvements and equipment - net 11,464 22,090
GOODWILL 29,971 113,885
OTHER ASSETS 1,759 11,267
-------------- -------------
TOTAL $ 283,664 $ 513,186
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 27,904 $ 27,999
Accounts payable 104,049 170,045
Accrued expenses 11,243 37,080
Current portion of long-term debt 1,604 564
-------------- -------------
Total current liabilities 144,800 235,688
LONG-TERM DEBT 7,635 116,821
DEFERRED INCOME TAXES AND OTHER LONG-TERM
OBLIGATIONS 1,670 1,670
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value: 100 shares outstanding
September 28, 1996 and June 28, 1997 --- ---
Class B stock, $.01 par value: 1,933,575 shares outstanding
September 28, 1996, 1,863,167 shares outstanding June 28, 1997 19 19
Common stock, $.01 par value: 12,536,521 shares outstanding September
28, 1996 13,359,182 shares issued and 13,333,182 shares outstanding
June 28, 1997 125 133
Additional paid-in capital 111,228 125,576
Retained earnings 18,733 33,771
Treasury Stock (364) (364)
Restricted stock deferred compensation (182) (128)
-------------- --------------
Total shareholders' equity 129,559 159,007
--------------- --------------
TOTAL $ 283,664 $ 513,186
=============== ==============
</TABLE>
See notes to consolidated financial statements
<PAGE>
CENTRAL GARDEN & PET COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
---------------------------
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 29, JUNE 29,
1996 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 7,063 $ 15,038
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,707 3,621
Gain on sale of land, building and improvements (305) 0
Change in assets and liabilities:
Receivables (78,794) (56,807)
Inventories (37,800) (20,434)
Prepaid expenses and other assets (320) (3,738)
Accounts payable 78,793 52,678
Accrued expenses 9,049 8,598
Deferred income taxes and other long-term obligations 18 0
------------ ------------
Net cash used in operating activities (20,589) (1,044)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to land, buildings, improvements and equipment (1,791) (3,011)
Payments to acquire companies, net of cash acquired 0 (95,814)
Proceeds from sale of land, buildings, improvements and equipment 3,600 0
------------ ------------
Net cash provided (used) by investing activities 1,809 (98,825)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (repayments of) notes payable - net (14,174) 95
Repayments of long-term debt (2,574) (12,062)
Proceeds from issuance of long-term debt 0 111,227
Proceeds from issuance of stock - net 35,870 674
Payments to reacquire stock (364) 0
------------ ------------
Net cash provided by financing activities 18,758 99,934
NET INCREASE (DECREASE) IN CASH (22) 65
CASH AT BEGINNING OF PERIOD 143 1,272
------------ ------------
CASH AT END OF PERIOD $ 121 $ 1,337
============ ============
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 2,542 $ 4,226
Cash paid for income taxes 325 5,748
Assets (excluding cash) acquired through purchase of subsidiaries - 69,780
Liabilities assumed through purchase of subsidiaries - 35,765
</TABLE>
See notes to consolidated financial statements
<PAGE>
CENTRAL GARDEN & PET COMPANY
CONSOLIDATED STATEMENTS OF INCOME
-------------------------------
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
JUNE 29, JUNE 28, JUNE 29, JUNE 28,
1996 1997 1996 1997
-------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net Sales $ 487,723 $ 656,887 $ 227,591 $ 320,402
Cost of Goods Sold and Occupancy 423,947 551,203 196,941 265,888
-------------- ------------ ------------ -------------
Gross profit 63,776 105,684 30,650 54,514
Selling, General and
Administrative Expenses 48,132 74,739 18,210 31,895
-------------- ------------ ------------ -------------
Income from operations 15,644 30,945 12,440 22,619
Interest Expense - Net (3,414) (5,012) (962) (2,265)
-------------- ------------ ------------ -------------
Income before income taxes 12,230 25,933 11,478 20,354
Income Taxes 5,167 10,895 4,843 8,547
-------------- ------------ ------------ -------------
Net Income $ 7,063 $ 15,038 $ 6,635 $ 11,807
============== ============ ============ =============
Net Income per common and common
equivalent share
Primary $ 0.65 $ 0.98 $ 0.55 $ 0.75
============== ============ ============ =============
Fully diluted $ 0.64 $ 0.94 $ 0.54 $ 0.65
============== ============ ============ =============
Weighted average shares outstanding
Primary 10,811 15,362 11,973 15,685
Fully diluted 11,098 18,851 12,176 19,935
</TABLE>
<PAGE>
CENTRAL GARDEN & PET COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months and Nine Months Ended June 28, 1997
(Unaudited)
1. Basis of Presentation
---------------------
The consolidated balance sheet as of June 28, 1997, the consolidated
statements of income for both the three months and nine months ended June 28,
1997 and June 29, 1996 and consolidated cash flows for the nine months ended
June 28, 1997 and June 29, 1996 have been prepared by the Company, without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) considered necessary to present fairly the financial
position, results of operations and cash flows of the Company for the periods
mentioned above, have been made.
Due to the seasonal nature of the Company's business, the results of
operations for the three months ended June 28, 1997 are not indicative of the
operating results that may be expected for the year ending September 27, 1997.
2. Recent Acquisition
------------------
On May 23, 1997 the Company acquired the United States and Canada flea and
tick protection business of Sandoz Agro, Inc. The acquisition includes all
methoprene-based products produced by Sandoz for use in the U.S. and Canada, and
certain other specialty products. The Company will proceed with its joint
development, marketing and distribution agreement with Hoechst Roussel Vet.
Under the agreement, the Company will license exclusive U.S. and Canadian sales
and marketing rights for the Vet-Kem line of flea and tick products. Hoechst
Roussel Vet and the Company have also agreed to certain joint development
efforts. The Company will retain exclusive rights to market any new products
arising from these efforts to the mass market.
3. Common Stock Offering
---------------------
On August 8, 1997, the Company completed an offering of 5,540,000 shares of
its Common stock at $24.25 per share before deduction for underwriting
commission and expenses related to the offering. The net proceeds were used to
repay all of the Company's borrowings under its principal line of credit and to
provide the Company with a source of funds for working capital and possible
acquisitions of complementary businesses.
4. Recently Issued Accounting Standards
------------------------------------
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128). The
Company is required to adopt SFAS 128 in the first quarter of fiscal 1998 and
will restate at that time earnings per share (EPS) data for prior periods to
conform with SFAS 128. Earlier application is not permitted.
SFAS 128 replaces current EPS reporting requirements and requires a dual
presentation of basic and diluted EPS. Basic EPS excludes dilution and is
computed by dividing net income available to common shareholders by the weighted
average of common shares outstanding for the period. Diluted EPS
<PAGE>
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.
Pro forma amounts for basic EPS assuming SFAS 128 had been in effect for
the quarter and year-to-date periods are as follows:
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended
Pro Forma EPS June 29, 1996 June 28, 1997 June 29, 1996 June 28, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic $ .57 $ .82 $ .66 $ 1.01
====== ====== ======= ========
</TABLE>
Diluted EPS under SFAS 128 would not have been significantly different
than fully-diluted EPS currently reported for the periods.
In June 1997, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 130 (Reporting Comprehensive Income), which
requires that an enterprise report, by major components and as a single total,
the change in its net assets during the period from nonowner sources; and No.
131 (Disclosures about Segments of an Enterprise and Related Information), which
establishes annual and interim reporting standards for an enterprise's operating
segments and related disclosures about its products, services, geographic areas,
and major customers. Adoption of these statements will not impact the Company's
consolidated financial position, results of operations or cash flows, and any
effect will be limited to the form and content of its disclosures. Both
statements are effective for fiscal years beginning after December 15, 1997,
with earlier application permitted. The Company has elected to not adopt either
statement on an earlier basis.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
The Company entered into a long-term agreement, effective October 1, 1995, with
Solaris, its largest supplier, whereby the Company serves as master agent and
master distributor for sales of Solaris products within the United States. The
agreement also provides for the Company to perform a wide range of value added
services including logistics, order processing and fulfillment, inventory
management and merchandising, principally for Solaris' direct sales accounts. As
a result of the Solaris Agreement, a majority of the Company's sales of Solaris
products are now derived from servicing Solaris direct accounts, whereas
historically, a majority of such sales were made by the Company as a traditional
distributor.
A substantial portion of these sales now consist of large shipments to customer
distribution centers. This type of sale is characterized by lower gross margins
as a percent of sales and lower associated operating costs. The collective
impact of these factors has served to substantially increase the Company's sales
of Solaris products, increase gross profit and lower gross margins as a percent
of sales.
The Solaris Agreement provides for the Company to be reimbursed for costs
incurred in connection with the services provided to Solaris' direct sales
accounts and to receive payments based on the sales growth of Solaris products.
The Company will also share with Solaris in the economic benefits of certain
cost reductions, to the extent realized. As a result, management believes that
the Company's profitability will be more directly attributable to the success of
Solaris than it was in the past.
THREE MONTHS ENDED JUNE 28, 1997
COMPARED WITH THREE MONTHS ENDED JUNE 29, 1996
Net sales for the three months ended June 28, 1997 increased by 40.8% or $92.8
million to $320.4 million from $227.6 million during the three months ended June
29, 1996. Of the $92.8 million increase, approximately $64.9 million is
attributable to companies acquired subsequent to June 29, 1996. The balance of
the increase in net sales, $27.9 million, is attributable to expanded product
listings and new store openings with existing customers principally in the lawn
and garden portion of the business.
Gross profit increased by 77.8% or $23.9 million from $30.7 million during the
quarter ended June 29, 1996 to $54.5 million for the comparable 1997 period.
Gross profit as a percentage of net sales increased from 13.5% during the
quarter ended June 29, 1996 to 17.0% for the comparable 1997 period. The
increase in gross profit as a percentage of net sales is mainly due to the newly
acquired pet and proprietary branded products businesses which have a
significantly higher gross margin than is the case with the lawn and garden
business.
<PAGE>
Selling, general and administrative expenses increased by $13.7 million during
the quarter ended June 28, 1997 from $18.2 million for the similar 1996 quarter.
As a percentage of net sales these expenses increased from 8.0% in 1996 to 10.0%
in 1997. Of the $13.7 million increase in expenses, approximately 85% is
associated with the newly acquired business with the balance attributable to the
increase in net sales of the existing operations. The increase in expenses as a
percentage of net sales is principally due to the newly acquired businesses
which have a significantly higher ratio of selling, general and administrative
expense to net sales than that associated with the lawn and garden portion of
the business.
Interest expense increased by $1.3 million from $1.0 million during the three
months ended June 29, 1996 to $2.3 million for the comparable 1997 period. The
increase in interest expense is attributable to the 6% convertible notes issued
in November 1996 net of interest income earned on the unused portion of the net
proceeds received from the convertible debt. Average short term borrowings for
the quarter ended June 28, 1997 were $9.2 million compared with $23.1 million
for the similar 1996 period. Average interest rates were 7.3% and 10.4%,
respectively.
The Company's effective income tax rate for the three months ended June 28, 1997
was 42.0% compared with 42.2 % for the comparable 1996 period. The decrease in
effective rate is related mainly to the non-deductible amortization of
intangibles being a smaller component of net income during the three months
ended June 28, 1997 compared with the similar 1996 period.
NINE MONTHS ENDED JUNE 28, 1997
COMPARED WITH NINE MONTHS ENDED JUNE 29, 1996
Net sales for the nine months ended June 28, 1997 increased by 34.7% or $169.2
million to $656.9 million from $487.7 million for the comparable 1996 period. Of
the $169.2 million increase, approximately $124.5 million is attributable to
sales from businesses acquired subsequent to June 29, 1996. The balance of the
sales increase is principally the result of expanded product placements and new
store openings with existing lawn and garden customers.
Gross profit increased 65.7% or $41.9 million from $63.8 million during the nine
months ended June 29, 1996 to $105.7 million for the comparable 1997 period.
Gross profit as a percentage of net sales increased from 13.1% in the nine
months ended June 29, 1996 to 16.1% for the nine months ended June 28, 1997. The
increase in gross profit as a percentage of net sales is directly related to the
newly acquired pet and proprietary branded products businesses which generate a
significantly higher gross profit margin.
For the nine months ended June 28, 1997, selling, general and administrative
expenses increased by $26.6 million to $74.7 million from $48.1 million for the
comparable 1996 period. As a percentage of net sales these expenses increased
from 9.9% during the first nine months of fiscal 1996 to 11.4% for the same
period in 1997. Of the $26.6 million increase in expense, approximately $23.4
million is related to the newly acquired businesses with the balance
attributable to the increase in sales for the existing operations.
<PAGE>
Interest expense for the nine months ended June 28, 1997 increased by $1.6
million to $5.0 million from $3.4 million for the comparable 1996 period. The
increase in expense is attributable to the issuance of $115,000,000 6%
convertible debt in November 1996.
Average short term borrowings for the nine months ended June 28, 1997 were $5.7
million compared with $30.8 million for the similar 1996 period. Average net
interest rates for the nine months ended June 1997 and 1996 were 7.8% and 9.9%,
respectively.
The Company's effective income tax rate was approximately 42% for the nine
months ended June 28, 1997 and for the comparable 1996 period.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: The statements contained in this report 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, including the possibility of
unanticipated costs and difficulties related to the integration of acquisitions,
the Company's dependence on sales of Solaris products, the Company's dependence
on sales to Wal*Mart, Home Depot and other large retailers, the impact in the
Company's results of operations of seasonality and weather, and other risks
disclosed in the Company's SEC filings.
<PAGE>
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 $100.0
million from its three public offerings of common stock in July 1993, November
1995 and July 1996, and in November 1996 the Company completed the sale of $115
million 6% subordinated convertible notes generating approximately $112 million
net of underwriting commissions. Further, the Company recently completed its
fourth public offering in August 1997 generating approximately $127 million net
of underwriting commissions.
The Company's business is highly seasonal and its working capital requirements
and capital resources track closely to this seasonal pattern. During the first
fiscal quarter accounts receivable reach their lowest level while inventory,
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, this quarter 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. During the second quarter, receivables, accounts payable and short-term
borrowings begin to increase, reflecting the build-up of inventory and related
payables in anticipation of the peak selling season. During the third quarter,
principally due to the Solaris Agreement, inventory levels remain relatively
constant while accounts receivable peak and short-term borrowings start to
decline as cash collections are received during the peak selling season. During
the fourth quarter, inventory levels are at their lowest, and accounts
receivable and payables are substantially reduced through conversion of
receivables to cash.
For the nine months ended June 28, 1997, the Company used cash in operating
activities of $1.0 million reflecting the normal cycle of inventory and
receivables build up. Net cash used from investing activities of $98.8 million
resulted from acquisitions and equity investments during the second and third
fiscal quarters and the acquisition of office and warehouse equipment. Cash
generated from financing activities of $99.9 million consisted primarily of net
proceeds from the sale of $115 million principal amount of 6% subordinated
convertible notes due 2003 less repayment of $10.7 million of long-term debt.
The Company has a $75 million line of credit with Congress Financial Corporation
(Western). 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 June 28, 1997, the Company had outstanding
borrowings of approximately $27.9 million and had an additional $47.1 million of
available borrowing capacity under this line. 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, proceeds from its recent sale of convertible notes and
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 $3.6 million for the next 12
months.
<PAGE>
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.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are attached hereto:
Exhibit No. Exhibit
----------- -------
11 Central Garden & Pet Company Computation of
Fully Diluted Earnings Per Share
12 Central Garden & Pet Company Computation of
Ratio's of Earnings to Fixed Charges
(b) The following report on Form 8-K was filed during the quarter
ended June 28, 1997.
(1) On May 30, 1997, the Company filed a report on Form 8-K/A
dated May 26, 1997, disclosing that the Company issued a
press release announcing that it had acquired the Sandoz
Agro, Inc. Flea and Tick Protection Business.
<PAGE>
CENTRAL GARDEN & PET COMPANY FORM 10-Q
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunder
duly authorized.
CENTRAL GARDEN & PET COMPANY
-------------------------------------------------
Registrant
Dated: August 11, 1997
--------------------------------------------------
William E. Brown, Chairman of the Board and
Chief Executive Officer
/s/ Robert B. Jones
--------------------------------------------------
Robert B. Jones, Vice President-Finance and
Chief Financial Officer
<PAGE>
Exhibit 11
CENTRAL GARDEN & PET COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
JUNE 29, JUNE 28, JUNE 29, JUNE 28,
1996 1997 1996 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
FULLY DILUTED EARNINGS PER SHARE
Net Income $ 7,063 $ 15,038 $ 6,635 $ 11,807
Interest charges on convertible
notes - net of tax -- 2,662 -- 1,069
--------- ---------- -------- ----------
Total $ 7,063 17,700 6,635 12,876
========= ========== ======== ==========
Fully diluted shares
Common and Common equivalent
shares outstanding 11,098 15,466 12,176 15,828
Convertible notes - dilutive -- 3,385 -- 4,107
--------- ---------- -------- ----------
Total 11,098 18,851 12,176 19,935
========= ========== ======== ==========
Fully diluted earnings per share $ 0.64 $ 0.94 $ 0.54 $ 0.65
========= ========== ======== ==========
</TABLE>
<PAGE>
EXHIBIT 12
CENTRAL GARDEN & PET COMPANY
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year Nine Month
Ended Ended Ended Period Ended
December 27, December 26, December 25, September 30,
1992 1993 1994 1995
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Income before income taxes and minority
interest 3,938 6,605 2,341 1,983
Fixed charges (1) 4,286 4,029 6,037 6,414
------------ ------------ ------------ -------------
Total earnings and fixed charges 8,224 10,634 8,378 8,397
Fixed charges (1) 4,286 4,029 6,037 6,414
Ratio of earnings to fixed charges 1.92 2.64 1.39 1.31
============ ============ ============ =============
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year Nine Month Nine Month
Ended Period Ended Period Ended
September 28, June 29, June 28,
1996 1996 1997
------------ ------------- ------------
<S> <C> <C> <C>
Income before income taxes and minority 14,465 12,230 25,933
interest
Fixed charges (1) 4,826 3,978 5,752
------------ ------------- ------------
19,291 16,208 31,685
Fixed charges (1) 4,826 3,978 5,752
Ratio of earnings to fixed charges 4.00 4.07 5.51
============ ============= ============
</TABLE>
(1) Fixed charges consist of interest expense incurred and the portion of
rental expense under operating leases deemed by the Company to be
representative of the interest factor.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-START> MAR-30-1997
<PERIOD-END> JUN-28-1997
<CASH> 1,337
<SECURITIES> 0
<RECEIVABLES> 134,728
<ALLOWANCES> 5,225
<INVENTORY> 219,936
<CURRENT-ASSETS> 365,944
<PP&E> 38,898
<DEPRECIATION> 16,808
<TOTAL-ASSETS> 513,186
<CURRENT-LIABILITIES> 235,688
<BONDS> 0
0
0
<COMMON> 133
<OTHER-SE> 19
<TOTAL-LIABILITY-AND-EQUITY> 513,186
<SALES> 320,402
<TOTAL-REVENUES> 320,402
<CGS> 265,888
<TOTAL-COSTS> 31,895
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,265
<INCOME-PRETAX> 20,354
<INCOME-TAX> 8,547
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,807
<EPS-PRIMARY> .75
<EPS-DILUTED> .65