CENTRAL GARDEN & PET CO - Quarter Report: 2015 March (Form 10-Q)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2015

¨	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: 001-33268

CENTRAL GARDEN & PET COMPANY

Delaware

68-0275553

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

1340 Treat Blvd., Suite 600, Walnut Creek, California 94597

(Address of principal executive offices)

(925) 948-4000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

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 April 30, 2015			11,908,317
Class A Common Stock Outstanding as of April 30, 2015			35,804,066
Class B Stock Outstanding as of April 30, 2015			1,652,262


	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets as of March 28, 2015, March 29, 2014, and September 27, 2014	4

	Condensed Consolidated Statements of Operations Three and Six Months Ended March 28, 2015 and March 29, 2014	5

	Condensed Consolidated Statements of Comprehensive Income Three and Six Months Ended March 28, 2015 and March 29, 2014	6

	Condensed Consolidated Statements of Cash Flows Six Months Ended March 28, 2015 and March 29, 2014	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4.	Controls and Procedures	38

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	38

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	39

Item 4.	Mine Safety Disclosures	39

Item 5.	Other Information	39

Item 6.	Exhibits	39

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This Form 10-Q includes ‘‘forward-looking statements.’’ Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, projected cost savings, capital expenditures, financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, our business strategy and the trends we anticipate in the industries in which we operate and other information that is not historical information. When used in this Form 10-Q, the words ‘‘estimates,’’ ‘‘expects,’’ ‘‘anticipates,’’ ‘‘projects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘believes’’ and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them, but we cannot assure you that our expectations, beliefs and projections will be realized.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this Form 10-Q are set forth in the Form 10-K for the fiscal year ended September 27, 2014, including the factors described in the section entitled ‘‘Item 1A – Risk Factors.’’ If any of these risks or uncertainties materializes, or if any of our underlying assumptions is incorrect, our actual results may differ significantly from the results that we express in or imply by any of our forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect future events or circumstances. Presently known risk factors include, but are not limited to, the following factors:

•

seasonality and fluctuations in our operating results and cash flow;

•

fluctuations in market prices for seeds and grains and other raw materials;

•

our inability to pass through cost increases in a timely manner;

•

risks associated with new product introductions, including the risk that our new products will not produce sufficient sales to recoup our investment;

•

declines in consumer spending during economic downturns;

•

inflation, deflation and other adverse macro-economic conditions;

•

supply shortages in small animals and pet birds;

•

adverse weather conditions;

•

fluctuations in energy prices, fuel and related petrochemical costs;

•

access to and cost of additional capital;

•

dependence on a small number of customers for a significant portion of our business;

•

consolidation trends in the retail industry;

•

competition in our industries;

•

risks associated with our acquisition strategy;

•

potential goodwill or intangible asset impairment;

•

dependence upon our key executives;

•

continuing implementation of a new enterprise resource planning information technology system;

•

our ability to protect our intellectual property rights;

•

potential environmental liabilities;

•

risk associated with international sourcing;

•

litigation and product liability claims;

•

regulatory issues;

•

the impact of product recalls;

•

potential costs and risks associated with actual or anticipated cyber attacks;

•

the voting power associated with our Class B stock; and

•

potential dilution from issuance of authorized shares.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

Unaudited


	March 28,		March 29,		September 27,
	2015		2014		2014
ASSETS
Current assets:
Cash and cash equivalents	$	11,943	$	16,748	$	78,676
Restricted cash		12,583		0		14,283
Short term investments		0		14,220		9,990
Accounts receivable (less allowance for doubtful accounts of $20,813, $24,771 and $25,212)		321,765		323,183		193,729
Inventories		382,328		402,720		326,386
Prepaid expenses and other		58,251		55,882		48,488

Total current assets		786,870		812,753		671,552

Land, buildings, improvements and equipment—net		163,207		185,354		166,849
Goodwill		209,089		205,756		208,233
Other intangible assets—net		85,185		77,895		87,997
Deferred income taxes and other assets		28,657		12,589		14,096

Total	$	1,273,008	$	1,294,347	$	1,148,727

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	139,821	$	142,152	$	88,428
Accrued expenses		83,442		80,886		84,379
Current portion of long-term debt		289		303		291

Total current liabilities		223,552		223,341		173,098

Long-term debt		514,924		545,032		449,948
Other long-term obligations		44,549		40,470		39,228

Equity:
Common stock, $.01 par value: 11,919,749, 12,308,802, and 12,437,307 shares outstanding at March 28, 2015, March 29, 2014 and September 27, 2014		119		123		124
Class A common stock, $.01 par value: 35,765,091, 36,417,849 and 36,887,311 shares outstanding at March 28, 2015, March 29, 2014 and September 27, 2014		357		364		369
Class B stock, $.01 par value: 1,652,262 shares outstanding		16		16		16
Additional paid-in capital		387,074		396,490		396,586
Accumulated earnings		101,556		85,779		86,396
Accumulated other comprehensive income		64		1,529		1,232

Total Central Garden & Pet Company shareholders’ equity		489,186		484,301		484,723
Noncontrolling interest		797		1,203		1,730

Total equity		489,983		485,504		486,453

Total	$	1,273,008	$	1,294,347	$	1,148,727

See notes to condensed consolidated financial statements.

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended						Six Months Ended
	March 28, 2015			March 29, 2014			March 28, 2015			March 29, 2014
Net sales	$	497,602		$	501,611		$	804,922		$	792,132
Cost of goods sold and occupancy		347,540			354,015			566,879			564,795

Gross profit		150,062			147,596			238,043			227,337
Selling, general and administrative expenses		100,091			102,827			186,934			190,923

Income from operations		49,971			44,769			51,109			36,414
Interest expense		(11,876	)		(10,405	)		(22,379	)		(22,622	)
Interest income		18			16			89			29
Other income (expense)		(121	)		108			(489	)		(60	)

Income before income taxes and noncontrolling interest		37,992			34,488			28,330			13,761
Income taxes		14,012			12,999			10,043			5,084

Income including noncontrolling interest		23,980			21,489			18,287			8,677
Net income attributable to noncontrolling interest		743			594			747			490

Net income attributable to Central Garden & Pet Company	$	23,237		$	20,895		$	17,540		$	8,187

Net income per share attributable to Central Garden & Pet Company:
Basic	$	0.48		$	0.43		$	0.36		$	0.17

Diluted	$	0.47		$	0.43		$	0.35		$	0.17

Weighted average shares used in the computation of net income per share:
Basic		48,384			48,688			48,882			48,523
Diluted		49,439			49,116			49,689			48,963

See notes to condensed consolidated financial statements.

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended					Six Months Ended
	March 28, 2015			March 29, 2014		March 28, 2015			March 29, 2014
Net income	$	23,980		$	21,489	$	18,287		$	8,677

Other comprehensive income (loss):
Unrealized loss on securities		(20	)		0		(10	)		0
Reclassification of realized loss on securities included in net income		20			0		20			0
Foreign currency translation		(626	)		2		(1,178	)		87

Total comprehensive income		23,354			21,491		17,119			8,764

Comprehensive income attributable to noncontrolling interests		743			594		747			490

Comprehensive income attributable to Central Garden & Pet Company	$	22,611		$	20,897	$	16,372		$	8,274

See notes to condensed consolidated financial statements.

CENTRAL GARDEN & PET COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended
	March 28, 2015			March 29, 2014
Cash flows from operating activities:
Net income	$	18,287		$	8,677
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		16,814			17,512
Stock-based compensation		3,684			4,578
Excess tax benefits from stock-based awards		(351	)		(321	)
Deferred income taxes		4,467			5,064
Write-off of deferred financing costs		537			1,731
Loss on sale of property and equipment		115			74
Other		(51	)		0
Change in assets and liabilities:
Accounts receivable		(128,623	)		(128,803	)
Inventories		(56,740	)		(10,587	)
Prepaid expenses and other assets		(6,794	)		406
Accounts payable		51,474			38,334
Accrued expenses		(1,245	)		5,163
Other long-term obligations		(95	)		(1,871	)

Net cash used in operating activities		(98,521	)		(60,043	)

Cash flows from investing activities:
Additions to property and equipment		(11,025	)		(10,024	)
Payments to acquire companies, net of cash acquired		(16,000	)		0
Proceeds from short term investments		9,997			3,600
Investments in short term investments		(17	)		0
Change in restricted cash		1,700			0
Other investing activities		(331	)		0

Net cash used in investing activities		(15,676	)		(6,424	)

Cash flows from financing activities:
Repayments of long-term debt		(50,141	)		(203	)
Borrowings under revolving line of credit		186,000			188,000
Repayments on revolving line of credit		(71,000	)		(116,000	)
Proceeds from issuance of common stock		1,220			461
Repurchase of common stock		(17,164	)		(924	)
Distribution to noncontrolling interest		(1,680	)		(633	)
Payment of financing costs		0			(3,087	)
Excess tax benefits from stock-based awards		351			321

Net cash provided by financing activities		47,586			67,935
Effect of exchange rate changes on cash and cash equivalents		(122	)		124

Net increase (decrease) in cash and cash equivalents		(66,733	)		1,592
Cash and equivalents at beginning of period		78,676			15,156

Cash and equivalents at end of period	$	11,943		$	16,748

Supplemental information:
Cash paid for interest	$	21,448		$	20,804

See notes to condensed consolidated financial statements.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three and Six Months Ended March 28, 2015

(unaudited)

Basis of Presentation

The condensed consolidated balance sheets of Central Garden & Pet Company and subsidiaries (the “Company” or “Central”) as of March 28, 2015 and March 29, 2014, the condensed consolidated statements of operations for the three months and six months ended March 28, 2015 and March 29, 2014, the condensed consolidated statements of comprehensive income for the three months and six months ended March 28, 2015 and March 29, 2014 and the condensed consolidated statements of cash flows for the six months ended March 28, 2015 and March 29, 2014 have been prepared by the Company, without audit. In the opinion of management, the interim financial statements include all normal recurring adjustments necessary for a fair statement of the results for the interim periods presented.

For the Company’s foreign business in the UK, the local currency is the functional currency. Assets and liabilities are translated using the exchange rate in effect at the balance sheet date. Income and expenses are translated at the average exchange rate for the period. Deferred taxes are not provided on translation gains and losses because the Company expects earnings of its foreign subsidiary to be permanently reinvested. Transaction gains and losses are included in results of operations. See Note 8, Supplemental Equity Information, for further detail.

Due to the seasonal nature of the Company’s garden business, the results of operations for the three and six month periods ended March 28, 2015 are not indicative of the operating results that may be expected for the entire fiscal year. These interim financial statements should be read in conjunction with the annual audited financial statements, accounting policies and financial notes thereto, included in the Company’s 2014 Annual Report on Form 10-K, which has previously been filed with the Securities and Exchange Commission. The September 27, 2014 balance sheet presented herein was derived from the audited statements.

Noncontrolling Interest

Noncontrolling interest in the Company’s condensed consolidated financial statements represents the 20% interest not owned by Central in a consolidated subsidiary. Since the Company controls this subsidiary, its financial statements are consolidated with those of the Company, and the noncontrolling owner’s 20% share of the subsidiary’s net assets and results of operations is deducted and reported as noncontrolling interest on the consolidated balance sheets and as net income (loss) attributable to noncontrolling interest in the consolidated statements of operations. See Note 8, Supplemental Equity Information, for additional information.

Derivative Instruments

The Company principally uses a combination of purchase orders and various short and long-term supply arrangements in connection with the purchase of raw materials, including certain commodities. The Company also enters into commodity futures, options and swap contracts to reduce the volatility of price fluctuations of corn, which impacts the cost of raw materials. The Company’s primary objective when entering into these derivative contracts is to achieve greater certainty with regard to the future price of commodities purchased for use in its supply chain. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments.

The Company does not perform the assessments required to achieve hedge accounting for commodity derivative positions. Accordingly, the changes in the values of these derivatives are recorded currently in other income (expense) in its condensed consolidated statements of operations. As of March 28, 2015 and March 29, 2014, the Company had no outstanding derivative instruments.

Recent Accounting Pronouncements

Discontinued Operations

In April 2014, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 provides amended guidance for reporting discontinued operations and disclosures of disposals of components. The amended guidance raises the threshold for disposals to qualify as discontinued operations and permits significant

continuing involvement and continuing cash flows with the discontinued operation. In addition, the amended guidance requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. The amended guidance became effective for the Company during the first quarter of fiscal 2015. The adoption of the applicable sections of this ASC may have an impact on the accounting for any future discontinued operations the Company may have.

Revenue Recognition

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. This update was issued as Accounting Standards Codification Topic 606. The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On April 1, 2015 the FASB voted to defer the effective date of ASU 2014-09 for one year. ASU 2014-09 is now effective for the Company in the first quarter of its fiscal year ending September 28, 2019. Early adoption is not permitted. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

Stock Based Compensation

In June 2014, the FASB issued ASU No. 2014-12 (ASU 2014-12), Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

Consolidation

In February 2015, the FASB issued ASU 2015-02 (ASU 2015-02), Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation. ASU 2015-02 modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership and affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. ASU 2015-02 is effective for fiscal years that begin after December 15, 2015. The Company is currently evaluating the impact the adoption of ASU 2015-02 will have on its consolidated financial statements.

Debt Issuance Costs

In April 2015, the FASB issued ASU No. 2015-03(ASU 2015-03), Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This standard amends the existing guidance to require that debt issuance costs be presented in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. ASU 2015-03 is effective on a retrospective basis for annual and interim reporting periods beginning after December 15, 2015, but early adoption is permitted. As of March 28, 2015, the Company has approximately $6.1 million of net deferred financing costs that would be reclassified from a long-term asset to a reduction in the carrying amount of its debt.

Cloud Computing Costs

In April 2015, the FASB issued ASU No. 2015-05(ASU 2015-05), Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This standard clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software under ASC 350-40. ASU 2015-05 is effective for public entities for annual and interim periods therein beginning after December 15, 2015. Early adoption is permitted. Entities may adopt the guidance either retrospectively or prospectively to arrangements entered into, or materially modified after the effective date. The Company is currently evaluating the impact the adoption of ASU 2015-05 will have on its consolidated financial statements.

Fair Value Measurements

ASC 820 establishes a single authoritative definition of fair value, a framework for measuring fair value and expands disclosure of fair value measurements. ASC 820 requires financial assets and liabilities to be categorized based on the inputs used to calculate their fair values as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability, which reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

The Company’s financial instruments include cash and equivalents, short term investments consisting of bank certificates of deposit, accounts receivable and payable, derivative instruments, short-term borrowings, and accrued liabilities. The carrying amount of these instruments approximates fair value because of their short-term nature.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 28, 2015 (in thousands):


	Level 1		Level 2		Level 3		Total
Liabilities:
Liability for contingent consideration ^(b)	$	0	$	0	$	4,343	$	4,343

Total liabilities	$	0	$	0	$	4,343	$	4,343


	Level 1		Level 2		Level 3		Total
Assets:
Certificates of deposit ^(c)	$	0	$	14,220	$	0	$	14,220

Total assets	$	0	$	14,220	$	0	$	14,220

Liabilities:
Liability for contingent consideration ^(b)	$	0	$	0	$	4,414	$	4,414

Total liabilities	$	0	$	0	$	4,414	$	4,414

The following table presents our financial assets and liabilities at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of September 27, 2014:


	Level 1		Level 2		Level 3		Total
Assets:
Short-term investments ^(a)	$	9,990	$	0	$	0	$	9,990

Total assets	$	9,990	$	0	$	0	$	9,990

Liabilities:
Liability for contingent consideration ^(b)	$	0	$	0	$	4,414	$	4,414

Total liabilities	$	0	$	0	$	4,414	$	4,414

(a)	The fair value of short-term investments is based on quoted prices in active markets for identical assets.

(b)

The liability for contingent consideration relates to an earn-out for B2E, acquired in December 2012. The fair value of the contingent consideration arrangement is determined based on the Company’s evaluation as to the probability and amount of any earn-out that will be achieved based on expected future performance by the acquired entity. This is presented as part of long-term liabilities in our consolidated balance sheets.

(c)

The fair value of the Company’s time deposits is based on the most recent observable inputs for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable. These are presented as short term investments in the Company’s consolidated balance sheets.

The following table provides a summary of changes in fair value of our Level 3 financial instruments for the periods ended March 28, 2015 and March 29, 2014 (in thousands):


	Amount
Balance as of September 27, 2014	$	4,414
Changes in the fair value of contingent performance-based payments established at the time of acquisition		(71	)

Balance as of March 28, 2015	$	4,343


	Amount
Balance as of September 28, 2013	$	4,165
Changes in the fair value of contingent performance-based payments established at the time of acquisition		249

Balance as of March 29, 2014	$	4,414

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company measures certain non-financial assets and liabilities, including long-lived assets, goodwill and intangible assets, at fair value on a non-recurring basis. Fair value measurements of non-financial assets and non-financial liabilities are used primarily in the impairment analyses of long-lived assets, goodwill and other intangible assets. During the periods ended March 28, 2015 and March 29, 2014, the Company was not required to measure any significant non-financial assets and liabilities at fair value.

Fair Value of Other Financial Instruments

In January 2015, the Company called $50 million aggregate principal amount of the 2018 Notes for redemption on March 1, 2015 at a price of 102.063%. The estimated fair value of the Company’s $400.0 million remaining aggregate principal amount of the 2018 Notes as of March 28, 2015 was $409.5 million, compared to a carrying value of $399.6 million. The estimated fair value of the Company’s $450 million principal amount of 2018 Notes as of March 29, 2014 and September 27, 2014, was $464.9 million and $459.5 million, respectively, compared to a carrying value of $449.5 million and $449.5 million, respectively. The estimated fair value is based on quoted market prices for these notes, which are Level 1 inputs within the fair value hierarchy.

Acquisitions

Envincio LLC

On April 1, 2014, the Company purchased certain assets of Envincio LLC, including brands, EPA registrations, inventory and trade receivables, for approximately $20.3 million. The purchase price exceeded the fair value of the net tangible and intangible assets acquired by approximately $3.3 million, which is recorded in goodwill. Financial results for Envincio have been included in the results of operations within the Pet segment since the date of acquisition. This acquisition is expected to enable the Company to be a key supplier and product innovator in the growing natural insecticides product market, often characterized as EPA-exempt products, and expand its offerings in traditional pesticides.

The following table summarizes the preliminary recording of the fair values of the assets acquired and liabilities assumed as of the acquisition date and subsequent adjustments:


(In thousands)	Amounts Previously Recognized as of Acquisition Date⁽¹⁾			Measurement Period Adjustments			Amounts Recognized as of Acquisition Date (as Adjusted)
Current assets, net of cash and cash equivalents acquired	$	6,650		$	0		$	6,650
Fixed assets		20			0			20
Goodwill		2,477			856			3,333
Intangible assets		12,306			(856	)		11,450
Current liabilities		(1,170	)		0			(1,170	)

Net assets acquired, less cash and cash equivalents	$	20,283		$	0		$	20,283

(1)	As previously reported in our Form 10-K for the period ended September 27, 2014.

During fiscal 2015 the fair value measurements of assets acquired and liabilities assumed of Envincio LLC as of the acquisition date were finalized. This refinement did not have a significant impact on the Company’s condensed consolidated statements of operations, balance sheets or cash flows in any period and, therefore, the Company has not retrospectively adjusted its financial statements. Financial results for Envincio LLC have been included in the results of operations within the Pet segment since the date of acquisition.

Investment in Joint Ventures

On December 30, 2014, the Company invested $16 million in cash for a 50% interest in two newly formed entities. The two entities own rights to commercialize products which incorporate features covered by certain patents, technology and associated intellectual property rights in the fields of animal health and pesticide applications. The investment is being accounted for under the equity method of accounting and is not expected to contribute to earnings in the near future.

Inventories, net

Inventories, net of allowance for obsolescence, consist of the following (in thousands):


	March 28, 2015		March 29, 2014		September 27, 2014
Raw materials	$	99,490	$	101,783	$	93,678
Work in progress		15,601		16,267		13,397
Finished goods		252,104		269,870		207,818
Supplies		15,133		14,800		11,493

Total inventories, net	$	382,328	$	402,720	$	326,386

Goodwill

The Company accounts for goodwill in accordance with ASC 350, “Intangibles – Goodwill and Other,” and tests goodwill for impairment annually, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This assessment involves the use of significant accounting judgments and estimates as to future operating results and discount rates. Changes in estimates or use of different assumptions could produce significantly different results. An impairment loss is generally recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The Company uses discounted cash flow analysis to estimate the fair value of our reporting units. The Company’s goodwill impairment analysis also includes a comparison of the aggregate estimated fair value of its reporting units to the Company’s total market capitalization.

Other Intangible Assets

The following table summarizes the components of gross and net acquired intangible assets:


	Gross		Accumulated Amortization			Impairment			Net Carrying Value
			(in millions)
March 28, 2015
Marketing-related intangible assets – amortizable	$	14.1	$	(10.2	)	$	0		$	3.9
Marketing-related intangible assets – nonamortizable		59.6		0			(16.9	)		42.7

Total		73.7		(10.2	)		(16.9	)		46.6

Customer-related intangible assets – amortizable		43.3		(21.2	)		0			22.1

Other acquired intangible assets – amortizable		19.3		(9.4	)		0			9.9
Other acquired intangible assets – nonamortizable		7.8		0			(1.2	)		6.6

Total		27.1		(9.4	)		(1.2	)		16.5

Total other intangible assets	$	144.1	$	(40.8	)	$	(18.1	)	$	85.2


	Gross		Accumulated Amortization			Impairment			Net Carrying Value
			(in millions)
March 29, 2014
Marketing-related intangible assets – amortizable	$	12.5	$	(9.4	)	$	0		$	3.1
Marketing-related intangible assets – nonamortizable		59.6		0			(16.9	)		42.7

Total		72.1		(9.4	)		(16.9	)		45.8

Customer-related intangible assets – amortizable		42.8		(19.0	)		0			23.8

Other acquired intangible assets – amortizable		16.6		(8.3	)		0			8.3
Other acquired intangible assets – nonamortizable		1.2		0			(1.2	)		0

Total		17.8		(8.3	)		(1.2	)		8.3

Total other intangible assets	$	132.7	$	(36.7	)	$	(18.1	)	$	77.9


	Gross		Accumulated Amortization			Impairment			Net Carrying Value
			(in millions)
September 27, 2014
Marketing-related intangible assets – amortizable	$	15.5	$	(9.9	)	$	0		$	5.6
Marketing-related intangible assets – nonamortizable		59.6		0			(16.9	)		42.7

Total		75.1		(9.9	)		(16.9	)		48.3

Customer-related intangible assets – amortizable		42.8		(20.2	)		0			22.6

Other acquired intangible assets – amortizable		19.4		(8.8	)		0			10.6
Other acquired intangible assets – nonamortizable		7.7		0			(1.2	)		6.5

Total		27.1		(8.8	)		(1.2	)		17.1

Total other intangible assets	$	145.0	$	(38.9	)	$	(18.1	)	$	88.0

Other acquired intangible assets include contract-based and technology-based intangible assets.

The Company evaluates long-lived assets, including amortizable and indefinite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company evaluates indefinite-lived intangible assets on an annual basis. In fiscal 2014, the Company tested its indefinite-lived intangible assets and no impairment was indicated. Other factors indicating the carrying value of the Company’s amortizable intangible assets may not be recoverable were not present in fiscal 2014 or during the six months ended March 28, 2015, and accordingly, no impairment testing was performed on these assets.

The Company amortizes its acquired intangible assets with definite lives over periods ranging from 1 to 25 years; over weighted average remaining lives of eight years for marketing-related intangibles, 15 years for customer-related intangibles and 14 years for other acquired intangibles. Amortization expense for intangibles subject to amortization was approximately $1.0 million for each of the three month periods ended March 28, 2015 and March 29, 2014, and $1.9 million and $2.0 million for the six months ended March 28, 2015 and March 29, 2014, respectively, and is classified within operating expenses in the condensed consolidated statements of operations. Estimated annual amortization expense related to acquired intangible assets in each of the succeeding five years is estimated to be approximately $4 million to $5 million per year from fiscal 2015 through fiscal 2019.

Long-Term Debt

Long-term debt consists of the following:


	March 28, 2015			March 29, 2014			September 27, 2014
	(in thousands)
Senior subordinated notes, net of unamortized discount ⁽¹⁾, interest at 8.25%, payable semi-annually, principal due March 2018	$	399,637		$	449,472		$	449,529
Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.25% to 1.75% or Base Rate plus a margin of 0.25% to 0.75%, final maturity December 2018		115,000			95,000			0
Other notes payable		576			863			710

Total		515,213			545,335			450,239
Less current portion		(289	)		(303	)		(291	)

Long-term portion	$	514,924		$	545,032		$	449,948

(1)	Represents unamortized original issue discount of $363, $528 and $471 as of March 28, 2015, March 29, 2014 and September 27, 2014, respectively.

Senior Subordinated Notes

On March 8, 2010, the Company issued $400 million aggregate principal amount of 8.25% senior subordinated notes due March 1, 2018 (the “2018 Notes”). On February 13, 2012, the Company issued an additional $50 million aggregate principal amount of its 2018 Notes at a price of 98.501%, plus accrued interest from September 1, 2011, in a private placement. The Company used the net proceeds from the offering to pay a portion of the outstanding balance under its prior revolving credit facility.

The 2018 Notes require semiannual interest payments, which commenced on September 1, 2010. The 2018 Notes are unsecured senior subordinated obligations and are subordinated to all of the Company’s existing and future senior debt, including the Company’s Credit Facility. The obligations under the 2018 Notes are fully and unconditionally guaranteed on a senior subordinated basis by each of the Company’s existing and future domestic restricted subsidiaries with certain exceptions. The guarantees are general unsecured senior subordinated obligations of the guarantors and are subordinated to all existing and future senior debt of the guarantors.

In March 2015, the Company redeemed $50.0 million of its 8.25% senior subordinated notes due March 2018 (2018 Notes) at a price of 102.063% of the principal amount of the notes redeemed. In conjunction with this transaction, the Company recognized a charge of approximately $1.6 million in its second fiscal quarter as part of interest expense related to the payment of the call premium and the non-cash write-off of unamortized financing costs.

The Company may redeem some or all of the remaining 2018 Notes at any time on or after March 1, 2015 for 102.063% and on or after March 1, 2016 for 100%, plus accrued and unpaid interest. The holders of the 2018 Notes have the right to require the Company to repurchase all or a portion of the 2018 Notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence of a change of control.

The 2018 Notes contain customary high yield covenants, including covenants limiting debt incurrence and restricted payments, subject to certain baskets and exceptions. The Company was in compliance with all financial covenants in the 2018 Notes indenture as of March 28, 2015.

Asset Backed Loan Facility

On December 5, 2013, the Company entered into a credit agreement which provides up to a $390 million principal amount senior secured asset-based revolving credit facility, with up to an additional $200 million principal amount available with the consent of the Lenders if the Company exercises the accordion feature set forth therein (collectively, the “Credit Facility”). The Credit Facility matures on December 5, 2018 and replaced the Company’s prior revolving credit facility. The Company may borrow, repay and reborrow amounts under the Credit Facility until its maturity date, at which time all amounts outstanding under the Credit Facility must be repaid in full. As of March 28, 2015, there were borrowings of $115 million outstanding and no letters of credit outstanding under the Credit Facility. There were other letters of credit of $12.6 million outstanding as of March 28, 2015.

The Credit Facility is subject to a borrowing base, calculated using a formula based upon eligible receivables and inventory, minus certain reserves and subject to restrictions. The borrowing availability as of March 28, 2015 was $165 million. Borrowings under the Credit Facility bear interest at an index based on LIBOR or, at the option of the Company, the Base Rate (defined as the highest of (a) the SunTrust prime rate, (b) the Federal Funds Rate plus 0.5% and (c) one-month LIBOR plus 1.00%), plus, in either case, an applicable margin based on the Company’s total outstanding borrowings. Such applicable margin for LIBOR-based borrowings fluctuates between 1.25%-1.75% (and was 1.25% at March 28, 2015) and such applicable margin for Base Rate borrowings fluctuates between 0.25%-0.75% (and was 0.25% at March 28, 2015). As of March 28, 2015, the applicable interest rate related to Base Rate borrowings was 3.5%, and the applicable interest rate related to LIBOR-based borrowings was 1.4%.

The Credit Facility contains customary covenants, including financial covenants which require the Company to maintain a minimum fixed charge coverage ratio of 1.00:1.00 upon reaching certain borrowing levels. The Credit Facility is secured by substantially all assets of the Company. The Company was in compliance with all financial covenants under the Credit Facility during the period ended March 28, 2015.

The Company incurred approximately $3.1 million of costs in conjunction with this transaction, which included banking fees and legal expenses. These costs are being amortized over the term of the Credit Facility.

The Company recorded a non-cash charge of $1.7 million for the three month period ended December 28, 2013 as part of interest expense, related to the write-off of unamortized deferred financing costs under the prior revolving credit facility.

Supplemental Equity Information

The following table provides a summary of the changes in the carrying amounts of equity attributable to controlling interest and noncontrolling interest for the six months ended March 28, 2015 and March 29, 2014:


	Controlling Interest
(in thousands)	Common Stock			Class A Common Stock			Class B Stock		Additional Paid In Capital			Retained Earnings			Accumulated Other Comprehensive Income			Total			Noncontrolling Interest			Total
Balance September 27, 2014	$	124		$	369		$	16	$	396,586		$	86,396		$	1,232		$	484,723		$	1,730		$	486,453
Comprehensive income													17,540			(1,168	)		16,372			747			17,119
Stock based compensation										2,771									2,771						2,771
Restricted share activity					(2	)				(638	)								(640	)					(640	)
Issuance of common stock					2					730									732						732
Repurchase of common stock		(5	)		(12	)				(12,726	)		(2,380	)					(15,123	)					(15,123	)
Tax benefit on stock option exercise										351									351						351
Distribution to Noncontrolling interest																						(1,680	)		(1,680	)

Balance March 28, 2015	$	119		$	357		$	16	$	387,074		$	101,556		$	64		$	489,186		$	797		$	489,983


	Controlling Interest
(in thousands)	Common Stock		Class A Common Stock		Class B Stock		Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total		Noncontrolling Interest			Total
Balance September 28, 2013	$	122	$	353	$	16	$	389,153	$	77,592	$	1,442	$	468,678	$	1,346		$	470,024
Comprehensive income										8,187		87		8,274		490			8,764
Stock based compensation								2,486						2,486					2,486
Restricted share activity				9				3,968						3,977					3,977
Issuance of common stock		1		2				562						565					565
Tax benefit on stock option exercise								321						321					321
Distribution to Noncontrolling interest																(633	)		(633	)

Balance March 29, 2014	$	123	$	364	$	16	$	396,490	$	85,779	$	1,529	$	484,301	$	1,203		$	485,504

Stock-Based Compensation

The Company recognized share-based compensation expense of $3.7 million and $4.6 million for the six month periods ended March 28, 2015 and March 29, 2014, respectively, as a component of selling, general and administrative expenses. The tax benefit associated with share-based compensation expense for the six month periods ended March 28, 2015 and March 29, 2014 was $1.4 million and $1.7 million, respectively.

10.

Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted per share computations for income from continuing operations.


	Three Months Ended March 28, 2015							Six Months Ended March 28, 2015
	Income		Shares		Per Share			Income		Shares		Per Share
	(in thousands, except per share amounts)
Basic EPS:
Net income available to common shareholders	$	23,237		48,384	$	0.48		$	17,540		48,882	$	0.36
Effect of dilutive securities:
Options to purchase common stock				457		0.00					251		0.00
Restricted shares				598		(0.01	)				556		(0.01	)
Diluted EPS:

Net income available to common shareholders	$	23,237		49,439	$	0.47		$	17,540		49,689	$	0.35


	Three Months Ended March 29, 2014						Six Months Ended March 29, 2014
	Income		Shares		Per Share		Income		Shares		Per Share
	(in thousands, except per share amounts)
Basic EPS:
Net income available to common shareholders	$	20,895		48,688	$	0.43	$	8,187		48,523	$	0.17
Effect of dilutive securities:
Options to purchase common stock				23		0.00				50		0.00
Restricted shares				405		0.00				390		0.00
Diluted EPS:

Net income available to common shareholders	$	20,895		49,116	$	0.43	$	8,187		48,963	$	0.17

Options to purchase 9.6 million shares of common stock at prices ranging from $6.43 to $15.00 per share were outstanding at March 28, 2015, and options to purchase 11.6 million shares of common stock at prices ranging from $4.60 to $16.23 per share were outstanding at March 29, 2014.

For the three month periods ended March 28, 2015 and March 29, 2014, options to purchase 3.4 million and 10.4 million shares of common stock, respectively, were outstanding but were not included in the computation of diluted earnings per share, because the option exercise prices were greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive.

For the six month period ended March 28, 2015 and March 29, 2014, options to purchase 6.1 million and 10.4 million shares of common stock, respectively, were outstanding but were not included in the computation of diluted earnings per share, because the option exercise prices were greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive.

11.

Segment Information

Management has determined that the Company has two operating segments which are also reportable segments based on the level at which the Chief Operating Decision Maker reviews the results of operations to make decisions regarding performance assessment and resource allocation. These operating segments are Pet segment and Garden segment and are presented in the table below (in thousands).


	Three Months Ended						Six Months Ended
	March 28, 2015			March 29, 2014			March 28, 2015			March 29, 2014
Net sales:
Pet segment	$	221,485		$	216,744		$	420,805		$	401,349
Garden segment		276,117			284,867			384,117			390,783

Total net sales	$	497,602		$	501,611		$	804,922		$	792,132

Income (loss) from operations:
Pet segment		27,051			24,193			47,626			38,579
Garden segment		39,325			36,799			35,790			30,568
Corporate		(16,405	)		(16,223	)		(32,307	)		(32,733	)

Total income from operations		49,971			44,769			51,109			36,414

Interest expense - net		(11,858	)		(10,389	)		(22,290	)		(22,593	)
Other income (expense)		(121	)		108			(489	)		(60	)
Income taxes		14,012			12,999			10,043			5,084

Income including noncontrolling interest		23,980			21,489			18,287			8,677
Net income attributable to noncontrolling interest		743			594			747			490

Net income attributable to Central Garden & Pet Company	$	23,237		$	20,895		$	17,540		$	8,187

Depreciation and amortization:
Pet segment	$	3,878		$	4,484		$	7,819		$	8,370
Garden segment		1,483			1,832			3,049			3,405
Corporate		2,989			2,876			5,946			5,737

Total depreciation and amortization	$	8,350		$	9,192		$	16,814		$	17,512


Assets:	March 28, 2015		March 29, 2014		September 27, 2014
Pet segment	$	450,240	$	434,059	$	414,279
Garden segment		490,514		521,663		337,461
Corporate		332,254		338,625		396,987

Total assets	$	1,273,008	$	1,294,347	$	1,148,727

Goodwill (included in corporate assets above):
Pet segment	$	209,089	$	205,756	$	208,233

12.

Consolidating Condensed Financial Information of Guarantor Subsidiaries

Certain 100% wholly-owned subsidiaries of the Company (as listed below, collectively the “Guarantor Subsidiaries”) have guaranteed fully and unconditionally, on a joint and several basis, the obligation to pay principal and interest on the Company’s 2018 Notes. Certain subsidiaries and operating divisions are not guarantors of the Notes. Those subsidiaries that are guarantors and co-obligors of the Notes are as follows:

Farnam Companies, Inc.

Four Paws Products Ltd.

Gulfstream Home & Garden, Inc.

Kaytee Products, Inc.

Matson, LLC

New England Pottery, LLC

Pennington Seed, Inc. (including Gro Tec, Inc. and All-Glass Aquarium Co., Inc.)

Pets International, Ltd.

T.F.H. Publications, Inc.

Wellmark International (including B2E Corporation and B2E Biotech LLC)

In lieu of providing separate audited financial statements for the Guarantor Subsidiaries, the Company has included the accompanying consolidating condensed financial statements based on the Company’s understanding of the Securities and Exchange Commission’s interpretation and application of Rule 3-10 of the Securities and Exchange Commission’s Regulation S-X.


	CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended March 28, 2015
	(in thousands)
	Parent			Non- Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	150,014		$	37,434		$	338,994		$	(28,840	)	$	497,602
Cost of goods sold and occupancy		113,668			29,545			231,403			(27,076	)		347,540

Gross profit		36,346			7,889			107,591			(1,764	)		150,062
Selling, general and administrative expenses		30,843			5,339			65,673			(1,764	)		100,091

Income from operations		5,503			2,550			41,918			(0	)		49,971
Interest expense		(11,815	)		(61	)		(0	)		(0	)		(11,876	)
Interest income		18			0			0			0			18
Other income (expense)		(347	)		(0	)		226			(0	)		(121	)

Income (loss) before taxes and equity in earnings of affiliates		(6,641	)		2,489			42,144			(0	)		37,992
Income tax (benefit) expense		(1,123	)		952			14,183			(0	)		14,012
Equity in earnings of affiliates		28,755			0			796			(29,551	)		0

Net income including noncontrolling interest		23,237			1,537			28,757			(29,551	)		23,980
Net income attributable to noncontrolling interest		0			743			0			0			743

Net income attributable to Central Garden & Pet Company	$	23,237		$	794		$	28,757		$	(29,551	)	$	23,237


	CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended March 29, 2014 (As Revised)
	(in thousands)
	Parent			Non- Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	146,049		$	40,409		$	340,660		$	(25,507	)	$	501,611
Cost of goods sold and occupancy		109,458			30,652			237,863			(23,958	)		354,015

Gross profit		36,591			9,757			102,797			(1,549	)		147,596
Selling, general and administrative expenses		29,798			6,595			67,983			(1,549	)		102,827

Income from operations		6,793			3,162			34,814			0			44,769
Interest expense		(10,375	)		(25	)		(5	)		0			(10,405	)
Interest income		16			0			0			0			16
Other income		50			0			58			0			108

Income (loss) before taxes and equity in earnings of affiliates		(3,516	)		3,137			34,867			0			34,488
Income tax (benefit) expense		(1,011	)		1,226			12,784			0			12,999
Equity in earnings of affiliates		23,400			0			1,353			(24,753	)		0

Net income including noncontrolling interest		20,895			1,911			23,436			(24,753	)		21,489
Net income attributable to noncontrolling interest		0			594			0			0			594

Net income attributable to Central Garden & Pet Company	$	20,895		$	1,317		$	23,436		$	(24,753	)	$	20,895


	CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Six Months Ended March 28, 2015
	(in thousands)
	Parent			Non- Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	246,976		$	54,757		$	546,119		$	(42,930	)	$	804,922
Cost of goods sold and occupancy		192,447			44,123			370,494			(40,185	)		566,879

Gross profit		54,529			10,634			175,625			(2,745	)		238,043
Selling, general and administrative expenses		58,694			9,338			121,647			(2,745	)		186,934

Income (loss) from operations		(4,165	)		1,296			53,978			(0	)		51,109
Interest expense		(22,302	)		(76	)		(1	)		(0	)		(22,379	)
Interest income		88			1			0			0			89
Other income (expense)		(677	)		(0	)		188			(0	)		(489	)

Income (loss) before taxes and equity in earnings of affiliates		(27,056	)		1,221			54,165			(0	)		28,330
Income tax (benefit) expense		(9,580	)		508			19,115			(0	)		10,043
Equity in earnings of affiliates		35,016			0			209			(35,225	)		0

Net income including noncontrolling interest		17,540			713			35,259			(35,225	)		18,287
Net income attributable to noncontrolling interest		0			747			0			0			747

Net income (loss) attributable to Central Garden & Pet Company	$	17,540		$	(34	)	$	35,259		$	(35,225	)	$	17,540


	CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Six Months Ended March 29, 2014 (As Revised)
	(in thousands)
	Parent			Non- Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	232,282		$	53,795		$	543,682		$	(37,627	)	$	792,132
Cost of goods sold and occupancy		177,949			41,661			380,365			(35,180	)		564,795

Gross profit		54,333			12,134			163,317			(2,447	)		227,337
Selling, general and administrative expenses		55,654			10,012			127,704			(2,447	)		190,923

Income (loss) from operations		(1,321	)		2,122			35,613			0			36,414
Interest expense		(22,566	)		(31	)		(25	)		0			(22,622	)
Interest income		29			0			0			0			29
Other income (expense)		7			0			(67	)		0			(60	)

Income (loss) before taxes and equity in earnings of affiliates		(23,851	)		2,091			35,521			0			13,761
Income tax (benefit) expense		(8,818	)		911			12,991			0			5,084
Equity in earnings of affiliates		23,220			0			1,053			(24,273	)		0

Net income including noncontrolling interest		8,187			1,180			23,583			(24,273	)		8,677
Net income attributable to noncontrolling interest		0			490			0			0			490

Net income attributable to Central Garden & Pet Company	$	8,187		$	690		$	23,583		$	(24,273	)	$	8,187


	CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 28, 2015
	(in thousands)
	Parent			Non- Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	23,237		$	1,537		$	28,757		$	(29,551	)	$	23,980
Other comprehensive income (loss):
Unrealized loss on securities		(20	)		0			0			0			(20	)
Reclassification of realized loss on securities included in net income		20			0			0			0			20
Foreign currency translation		(626	)		(355	)		(164	)		519			(626	)

Total comprehensive income		22,611			1,182			28,593			(29,032	)		23,354
Comprehensive income attributable to noncontrolling interests		0			743			0			0			743

Comprehensive income attributable to Central Garden & Pet Company	$	22,611		$	439		$	28,593		$	(29,032	)	$	22,611


	CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended March 29, 2014 (As Revised)
	(in thousands)
	Parent			Non-Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	20,895		$	1,911		$	23,436		$	(24,753	)	$	21,489

Other comprehensive income:
Foreign currency translation		0			2			0			0			2

Total comprehensive income		20,895			1,913			23,436			(24,753	)		21,491
Comprehensive income attributable to noncontrolling interests		0			594			0			0			594

Comprehensive income attributable to Central Garden & Pet Company	$	20,895		$	1,319		$	23,436		$	(24,753	)	$	20,897


	CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended March 28, 2015
	(in thousands)
	Parent			Non-Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	17,540		$	713		$	35,259		$	(35,225	)	$	18,287

Other comprehensive income (loss):
Unrealized loss on securities		(10	)		0			0			0			(10	)
Reclassification of realized loss on securities included in net income		20			0			0			0			20
Foreign currency translation		(1,178	)		(700	)		(268	)		968			(1,178	)

Total comprehensive income		16,372			13			34,991			(34,257	)		17,119
Comprehensive income attributable to noncontrolling interests		0			747			0			0			747

Comprehensive income (loss) attributable to Central Garden & Pet Company	$	16,372		$	(734	)	$	34,991		$	(34,257	)	$	16,372


	CONSOLIDATING CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended March 29, 2014 (As Revised)
	(in thousands)
	Parent			Non-Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net income	$	8,187		$	1,180		$	23,583		$	(24,273	)	$	8,677

Other comprehensive income:
Foreign currency translation		0			87			0			0			87

Total comprehensive income		8,187			1,267			23,583			(24,273	)		8,764
Comprehensive income attributable to noncontrolling interests		0			490			0			0			490

Comprehensive income attributable to Central Garden & Pet Company	$	8,187		$	777		$	23,583		$	(24,273	)	$	8,274


	CONSOLIDATING CONDENSED BALANCE SHEET March 28, 2015
	(in thousands)
	Parent		Non- Guarantor Subsidiaries			Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	6,159	$	4,309		$	1,475	$	0		$	11,943
Restricted cash		12,583		0			0		0			12,583
Accounts receivable, net		86,569		17,099			218,097		0			321,765
Inventories		95,564		19,429			267,335		0			382,328
Prepaid expenses and other		26,013		901			31,337		0			58,251

Total current assets		226,888		41,738			518,244		0			786,870
Land, buildings, improvements and equipment, net		57,093		3,590			102,524		0			163,207
Goodwill		0		0			209,089		0			209,089
Other long term assets		34,187		3,999			81,263		(5,607	)		113,842
Intercompany receivable		44,855		0			293,685		(338,540	)		0
Investment in subsidiaries		1,017,461		0			0		(1,017,461	)		0

Total	$	1,380,484	$	49,327		$	1,204,805	$	(1,361,608	)	$	1,273,008

LIABILITIES AND EQUITY
Accounts payable	$	47,277	$	10,169		$	82,375	$	0		$	139,821
Accrued expenses		39,061		2,857			41,524		0			83,442
Current portion of long-term debt		259		0			30		0			289

Total current liabilities		86,597		13,026			123,929		0			223,552
Long-term debt		514,841		0			83		0			514,924
Intercompany payable		288,423		50,117			0		(338,540	)		0
Losses in excess of investment in subsidiaries		0		0			14,104		(14,104	)		0
Other long-term obligations		1,437		0			48,719		(5,607	)		44,549
Total Central Garden & Pet shareholders’ equity		489,186		(14,613	)		1,017,970		(1,003,357	)		489,186
Noncontrolling interest		0		797			0		0			797

Total equity		489,186		(13,816	)		1,017,970		(1,003,357	)		489,983

Total	$	1,380,484	$	49,327		$	1,204,805	$	(1,361,608	)	$	1,273,008


	CONSOLIDATING CONDENSED BALANCE SHEET March 29, 2014 (As Revised)
	(in thousands)
	Parent		Non-Guarantor Subsidiaries			Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	8,001	$	6,819		$	1,928	$	0		$	16,748
Short term investments		14,220		0			0		0			14,220
Accounts receivable, net		81,577		17,792			223,814		0			323,183
Inventories		106,858		22,158			273,704		0			402,720
Prepaid expenses and other		25,151		740			29,991		0			55,882

Total current assets		235,807		47,509			529,437		0			812,753
Land, buildings, improvements and equipment, net		75,320		2,583			107,451		0			185,354
Goodwill		0		0			205,756		0			205,756
Other long term assets		20,331		3,614			72,061		(5,522	)		90,484
Intercompany receivable		41,540		0			219,454		(260,994	)		0
Investment in subsidiaries		955,388		0			0		(955,388	)		0

Total	$	1,328,386	$	53,706		$	1,134,159	$	(1,221,904	)	$	1,294,347

LIABILITIES AND EQUITY
Accounts payable	$	49,181	$	13,414		$	79,557	$	0		$	142,152
Accrued expenses		32,409		2,775			45,702		0			80,886
Current portion of long-term debt		270		0			33		0			303

Total current liabilities		81,860		16,189			125,292		0			223,341
Long-term debt		544,917		0			115		0			545,032
Intercompany payable		215,634		45,360			0		(260,994	)
Losses in excess of investment in subsidiaries		0		0			8,047		(8,047	)		0
Other long-term obligations		1,674		0			44,318		(5,522	)		40,470
Total Central Garden & Pet shareholders’ equity		484,301		(9,046	)		956,387		(947,341	)		484,301
Noncontrolling interest		0		1,203			0		0			1,203

Total equity		484,301		(7,843	)		956,387		(947,341	)		485,504

Total	$	1,328,386	$	53,706		$	1,134,159	$	(1,221,904	)	$	1,294,347


	CONSOLIDATING CONDENSED BALANCE SHEET September 27, 2014
	(in thousands)
	Parent		Non-Guarantor Subsidiaries			Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	63,471	$	12,806		$	2,399	$	0		$	78,676
Restricted cash		14,283		0			0		0			14,283
Short term investments		9,990		0			0		0			9,990
Accounts receivable, net		41,235		8,268			144,226		0			193,729
Inventories		79,199		15,210			231,977		0			326,386
Prepaid expenses and other		26,092		816			21,580		0			48,488

Total current assets		234,270		37,100			400,182		0			671,552
Land, buildings, improvements and equipment, net		63,059		3,649			100,141		0			166,849
Goodwill		0		0			208,233		0			208,233
Other long term assets		25,230		4,244			83,713		(11,094	)		102,093
Intercompany receivable		16,906		0			351,423		(368,329	)		0
Investment in subsidiaries		983,413		0			0		(983,413	)		0

Total	$	1,322,878	$	44,993		$	1,143,692	$	(1,362,836	)	$	1,148,727

LIABILITIES AND EQUITY
Accounts payable	$	28,937	$	3,542		$	55,949	$	0		$	88,428
Accrued expenses		34,151		1,868			48,360		0			84,379
Current portion of long term debt		261		0			30		0			291

Total current liabilities		63,349		5,410			104,339		0			173,098
Long-term debt		449,855		0			93		0			449,948
Intercompany payable		323,315		45,014			0		(368,329	)		0
Losses in excess of investment in subsidiaries		0		0			7,594		(7,594	)		0
Other long-term obligations		1,636		0			48,686		(11,094	)		39,228
Total Central Garden & Pet shareholders’ equity		484,723		(7,161	)		982,980		(975,819	)		484,723
Noncontrolling interest		0		1,730			0		0			1,730

Total equity		484,723		(5,431	)		982,980		(975,819	)		486,453

Total	$	1,322,878	$	44,993		$	1,143,692	$	(1,362,836	)	$	1,148,727


	CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Six Months Ended March 28, 2015
	(in thousands)
	Parent			Non-Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash used by operating activities	$	(36,828	)	$	(5,623	)	$	(49,351	)	$	(6,719	)	$	(98,521	)

Additions to property, plant and equipment		(1,359	)		(154	)		(9,512	)		(0	)		(11,025	)
Payments to acquire companies, net of cash acquired		(16,000	)		0			0			0			(16,000	)
Proceeds from short term investments		9,997			0			0			0			9,997
Investment in short term investments		(17	)		(0	)		(0	)		(0	)		(17	)
Change in restricted cash		1,700			(0	)		(0	)		(0	)		1,700
Other investing activities		(331	)		0			0			0			(331	)
Intercompany investing activities		(27,949	)		(0	)		57,738			(29,789	)		(0	)

Net cash (used) provided by investing activities		(33,959	)		(154	)		48,226			(29,789	)		(15,676	)

Repayments of long-term debt		(50,131	)		(0	)		(10	)		(0	)		(50,141	)
Borrowings under revolving line of credit		186,000			0			0			0			186,000
Repayments on revolving line of credit		(71,000	)		0			0			0			(71,000	)
Proceeds from issuance of common stock		1,220			0			0			0			1,220
Repurchase of common stock		(17,164	)		(0	)		(0	)		(0	)		(17,164	)
Distribution to noncontrolling interest		0			(1,680	)		0			0			(1,680	)
Excess tax benefits from stock-based awards		351			0			0			0			351
Distribution to parent		0			(6,719	)		0			6,719			0
Intercompany financing activities		(34,891	)		5,102			0			29,789			0

Net cash provided (used) by financing activities		14,385			(3,297	)		(10	)		36,508			47,586

Effect of exchange rates on cash		(910	)		577			211			0			(122	)

Net decrease in cash and cash equivalents		(57,312	)		(8,497	)		(924	)		0			(66,733	)
Cash and cash equivalents at beginning of year		63,471			12,806			2,399			0			78,676

Cash and cash equivalents at end of year	$	6,159		$	4,309		$	1,475		$	0		$	11,943


	CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Six Months Ended March 29, 2014 (As Revised)
	(in thousands)
	Parent			Non-Guarantor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash (used) provided by operating activities	$	(35,501	)	$	604		$	(22,612	)	$	(2,534	)	$	(60,043	)

Additions to property, plant and equipment		(4,507	)		(473	)		(5,044	)		0			(10,024	)
Proceeds from short term investments		3,600			0			0			0			3,600
Intercompany investing activities		(31,360	)		0			27,043			4,317			0

Net cash (used) provided by investing activities		(32,267	)		(473	)		21,999			4,317			(6,424	)

Repayments of long-term debt		(104	)		0			(99	)		0			(203	)
Borrowings under revolving line of credit		188,000			0			0			0			188,000
Repayments on revolving line of credit		(116,000	)		0			0			0			(116,000	)
Proceeds from issuance of common stock		461			0			0			0			461
Repurchase of common stock		(924	)		0			0			0			(924	)
Distribution to noncontrolling interest		0			(633	)		0			0			(633	)
Payment of deferred financing costs		(3,087	)		0			0			0			(3,087	)
Excess tax benefits from stock-based awards		321			0			0			0			321
Distribution to parent		0			(2,534	)		0			2,534			0
Intercompany financing activities		1,376			2,941			0			(4,317	)		0

Net cash (used) provided by financing activities		70,043			(226	)		(99	)		(1,783	)		67,935

Effect of exchange rates on cash		288			(89	)		(75	)		0			124

Net increase (decrease) in cash and cash equivalents		2,563			(184	)		(787	)		0			1,592
Cash and cash equivalents at beginning of year		5,438			7,003			2,715			0			15,156

Cash and cash equivalents at end of year	$	8,001		$	6,819		$	1,928		$	0		$	16,748

Subsequent to the issuance of the Form 10-Q for the quarterly period ended June 28, 2014, management identified certain corrections that were needed in the presentation of the Consolidating Condensed Financial Statements. The Company revised its Consolidating Condensed Financial Statements to correct the presentation of intercompany activities and other classification items between the Parent, Guarantors and Non-Guarantor subsidiaries for intercompany activities. The Company has also included a new column in its Consolidating Condensed Financial Statements to present separate results for Non-Guarantor subsidiaries. There were no changes to any of the Company’s Consolidated Financial Statements. The Company assessed the materiality of these items on previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108, and concluded that the revisions were not material to the Consolidating Condensed Financial Statements. The impact of these revisions is shown in the following tables:


	CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three Months Ended March 29, 2014
	As previously reported			Adjustments			As revised
Parent	$	9,935		$	(3,142	)	$	6,793
Non-guarantor subsidiaries		0			3,162			3,162
Guarantor subsidiaries		34,834			(20	)		34,814
Eliminations		0			0			0

Income from operations		44,769			0			44,769

Parent		20,895			0			20,895
Non-guarantor subsidiaries		0			1,317			1,317
Guarantor subsidiaries		23,516			(80	)		23,436
Eliminations		(23,516	)		(1,237	)		(24,753	)

Net income attributable to Central Garden & Pet Company	$	20,895		$	0		$	20,895


	CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Six Months Ended March 29, 2014
	As previously reported			Adjustments			As revised
Parent	$	1,152		$	(2,473	)	$	(1,321	)
Non-guarantor subsidiaries		0			2,122			2,122
Guarantor subsidiaries		35,262			351			35,613
Eliminations		0			0			0

Income (loss) from operations		36,414			0			36,414

Parent		8,187			0			8,187
Non-guarantor subsidiaries		0			690			690
Guarantor subsidiaries		23,408			175			23,583
Eliminations		(23,408	)		(865	)		(24,273	)

Net income attributable to Central Garden & Pet Company	$	8,187		$	0		$	8,187

In the Consolidating Condensed Statement of Operations, the Company now presents the Non-Guarantor subsidiaries separate from the Parent. The Company also recorded the equity in earnings of Non-Guarantor subsidiaries, which are owned by Guarantor subsidiaries, within the Guarantor subsidiary column, and have appropriately eliminated intercompany earnings between Non-Guarantor and Guarantor subsidiaries.


	CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME
	As previously reported			Three Months Ended March 29, 2014 Adjustments			As revised
Parent	$	(2,027	)	$	22,922		$	20,895
Non-guarantor subsidiaries		0			1,911			1,911
Guarantor subsidiaries		23,516			(80	)		23,436
Eliminations		0			(24,753	)		(24,753	)

Net income (loss)		21,489			0			21,489

Parent		(2,025	)		22,920			20,895
Non-guarantor subsidiaries		0			1,913			1,913
Guarantor subsidiaries		23,516			(80	)		23,436
Eliminations		0			(24,753	)		(24,753	)

Total comprehensive income (loss)		21,491			0			21,491

Parent		(2,619	)		23,514			20,895
Non-guarantor subsidiaries		0			1,319			1,319
Guarantor subsidiaries		23,516			(80	)		23,436
Eliminations		0			(24,753	)		(24,753	)

Comprehensive income (loss) attributable to Central Garden & Pet Company	$	20,897		$	0		$	20,897


	CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME
	As previously reported			Six Months Ended March 29, 2014 Adjustments			As revised
Parent	$	(14,731	)	$	22,918		$	8,187
Non-guarantor subsidiaries		0			1,180			1,180
Guarantor subsidiaries		23,408			175			23,583
Eliminations		0			(24,273	)		(24,273	)

Net income (loss)		8,677			0			8,677

Parent		(14,644	)		22,831			8,187
Non-guarantor subsidiaries		0			1,267			1,267
Guarantor subsidiaries		23,408			175			23,583
Eliminations		0			(24,273	)		(24,273	)

Total comprehensive income (loss)		8,764			0			8,764

Parent		(15,134	)		23,321			8,187
Non-guarantor subsidiaries		0			777			777
Guarantor subsidiaries		23,408			175			23,583
Eliminations		0			(24,273	)		(24,273	)

Comprehensive income (loss) attributable to Central Garden & Pet Company	$	8,274		$	0		$	8,274

In the Consolidating Condensed Statement of Comprehensive Income, the Company now presents the Non-Guarantor subsidiaries separate from the Parent. The Company also recorded an adjustment to correct the beginning net income of the Parent to reflect equity in the earnings from affiliates.


	CONSOLIDATING CONDENSED BALANCE SHEET March 29, 2014
	As previously reported			Adjustments			As revised
Parent	$	288,510		$	(52,703	)	$	235,807
Non-Guarantor subsidiaries		0			47,509			47,509
Guarantor subsidiaries		532,265			(2,828	)		529,437
Eliminations		(8,022	)		8,022			0

Current assets		812,753			0			812,753

Parent		1,165,145			163,241			1,328,386
Non-Guarantor subsidiaries		0			53,706			53,706
Guarantor subsidiaries		878,709			255,450			1,134,159
Eliminations		(749,507	)		(472,397	)		(1,221,904	)

Total assets	$	1,294,347		$	0		$	1,294,347

Parent	$	99,258		$	(17,398	)	$	81,860
Non-Guarantor subsidiaries		0			16,189			16,189
Guarantor subsidiaries		132,105			(6,813	)		125,292
Eliminations		(8,022	)		8,022			0

Current liabilities		223,341			0			223,341


Parent		485,504			(1,203	)		484,301
Non-Guarantor subsidiaries		0			(7,843	)		(7,843	)
Guarantor subsidiaries		741,485			214,902			956,387
Eliminations		(741,485	)		(205,856	)		(947,341	)

Total equity	$	485,504		$	0		$	485,504

In the Consolidating Condensed Balance Sheet, the Company now presents the Non-Guarantor subsidiaries separate from the Parent. The Company also recorded adjustments to present intercompany receivables and payables between legal entities of the Guarantor, Non-Guarantor and Parent on a gross basis instead of net. These adjustments impacted the Parent’s total long term assets and liabilities and the Guarantor subsidiaries’ total long term assets and equity. The Company also corrected the presentation of certain deferred tax balances to present on a gross basis by legal entity.


	CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Six Months Ended March 29, 2014
	As previously reported			Adjustments			As revised
Parent	$	(16,606	)	$	(18,895	)	$	(35,501	)
Non-Guarantor subsidiaries		0			604			604
Guarantor subsidiaries		(20,029	)		(2,583	)		(22,612	)
Eliminations		(23,408	)		20,874			(2,534	)

Net cash provided by (used in) operating activities		(60,043	)		0			(60,043	)

Parent		(49,249	)		16,982			(32,267	)
Non-Guarantor subsidiaries		0			(473	)		(473	)
Guarantor subsidiaries		19,417			2,582			21,999
Eliminations		23,408			(19,091	)		4,317

Net cash provided by (used in) investing activities		(6,424	)		0			(6,424	)

Parent		68,034			2,009			70,043
Non-Guarantor subsidiaries		0			(226	)		(226	)
Guarantor subsidiaries		(99	)		0			(99	)
Eliminations		0			(1,783	)		(1,783	)

Net cash provided by (used in) financing activities	$	67,935		$	0		$	67,935

In the Consolidating Condensed Statement of Cash Flows, the Company now presents the Non-Guarantor subsidiaries separate from the Parent. The Company also presents changes in receivable balances between affiliates as investing activities and changes in payable balances between affiliates as financing activities because these changes are a result of subsidiaries’ deposits to or borrowings from the Parent’s cash account under a cash pooling arrangement. The Company also corrected the presentation of the Parent’s cash flow from operating activities to reflect equity in earnings of affiliates as a non-cash operating activity. The Company previously presented changes of intercompany receivables and payables in investing activities.

13.

Contingencies

The Company may from time to time become involved in legal proceedings in the ordinary course of business. Currently, the Company is not a party to any legal proceedings that management believes would have a material effect on the Company’s financial position or results of operations.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Company

Central Garden & Pet Company (“Central”) is a leading innovator, marketer and producer, of quality branded products and distributor of third-party products in the pet and lawn and garden supplies industries in the United States. The total pet food and supplies industry in 2013 was estimated to have been over $42.0 billion in annual retail sales. We estimate the annual retail sales of the pet supplies and super premium pet food markets in the categories in which we participate to be approximately $25.4 billion. According to The Freedonia Group, the total lawn and garden consumables industry in the United States is estimated to be approximately $17.2 billion in annual retail sales, including fertilizer, pesticides, growing media, seeds, mulch and other consumables. We estimate the annual retail sales of the lawn and garden consumables markets in the categories in which we participate to be approximately $10.2 billion. In addition, we participate in the pottery and seasonal décor markets.

Our pet supplies products include products for dogs and cats, including edible bones, premium healthy edible and non-edible chews, super premium dog and cat food and treats, toys, pet carriers, grooming supplies and other accessories; products for birds, small animals and specialty pets, including food, cages and habitats, toys, chews and related accessories; animal and household health and insect control products; products for fish, reptiles and other aquarium-based pets, including aquariums, furniture and lighting fixtures, pumps, filters, water conditioners, food and supplements, and information and knowledge resources; and products for horses and livestock. These products are sold under the master brands including Adams^TM, Aqueon^®, Avoderm^®, Bio Spot Active Care^TM, Farnam^®, Four Paws^®, Kaytee^®, Nylabone^®, Pinnacle^®, TFH^TM, Zilla^® as well as a number of other brands including Altosid, Comfort Zone^®, Coralife^®, Interpet, Kent Marine^®, Oceanic Systems^®, Pet Select^®, Pre-Strike^®, Super Pet^®, and Zodiac^®.

Our lawn and garden supplies products include proprietary and non-proprietary grass seed; wild bird feed, bird feeders, bird houses and other birding accessories; weed, grass, ant and other herbicide, insecticide and pesticide products; and decorative outdoor lifestyle and lighting products including pottery, trellises and other wood products and holiday lighting. These products are sold under the master brands AMDRO^®, GKI/Bethlehem Lighting^®, Ironite^®, Pennington^®, and Sevin^®, as well as a number of other brand names including Lilly Miller^®, Over-N-Out^®, Smart Seed^® and The Rebels^®.

In fiscal 2014, our consolidated net sales were $1.6 billion, of which our Pet segment, or Pet, accounted for approximately $846 million and our Lawn and Garden segment, or Garden, accounted for approximately $759 million. In fiscal 2014, our income from operations before corporate expenses and eliminations of $72.9 million was $129.1 million, of which the Pet segment accounted for $88.1 million and the Garden segment accounted for $41.0 million. See Note 11 to our consolidated financial statements for financial information about our two operating segments.

We were incorporated in Delaware in June 1992 as the successor to a California corporation that was formed in 1955. Our executive offices are located at 1340 Treat Boulevard, Suite 600, Walnut Creek, California 94597, and our telephone number is (925) 948-4000. Our website is www.central.com. The information on our website is not incorporated by reference in this annual report.

Recent Developments

Fiscal 2015 Second Quarter Financial Performance:

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Our net sales decreased $4.0 million, or 0.8%, to $497.6 million from the prior year quarter.

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Gross margin increased 80 basis points to 30.2%.

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Selling, general & administrative expenses decreased as a percentage of net sales to 20.1% from 20.5% in the prior year quarter.

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Operating earnings improved by $5.2 million from the prior year quarter, to $50.0 million in the second quarter of fiscal 2015.

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Our net income in the second quarter of fiscal 2015 was $23.2 million, or $0.47 per diluted share, compared to $20.9 million, or $0.43 per diluted share, in the second quarter of fiscal 2014.

Stock Repurchase – During the three months ended March 28, 2015, we repurchased $10.0 million of our common stock, which consisted of 0.3 million shares of our voting common stock (CENT) at an aggregate cost of approximately $2.7 million, or approximately $9.11 per share, and 0.8 million shares of our non-voting Class A common stock (CENTA) at an aggregate cost of approximately $7.3 million, or approximately $9.68 per share. As of March 28, 2015, approximately $35.0 million remained available under our current share repurchase authorization for future share repurchases.

Bond Redemption – In March 2015, we redeemed $50.0 million of our 8.25% senior subordinated notes due March 2018 (2018 Notes) at a price of 102.063%. In conjunction with this transaction, we recognized a charge of approximately $1.6 million in our second fiscal quarter as part of interest expense related to the payment of the call premium and the write-off of unamortized financing costs.

Investment in Joint Ventures - On December 30, 2014, we invested $16 million in cash for a 50% interest in two newly formed entities. The two entities own rights to commercialize products which incorporate features covered by certain patents, technology and associated intellectual property rights in the fields of animal health and pesticide applications. The investment is being accounted for under the equity method of accounting and is not expected to contribute to earnings in the near future.

Results of Operations

Three Months Ended March 28, 2015

Compared with Three Months Ended March 29, 2014

Net Sales

Net sales for the three months ended March 28, 2015 decreased $4.0 million, or 0.8%, to $497.6 million from $501.6 million for the three months ended March 29, 2014. Our branded product sales decreased $12.0 million and sales of other manufacturers’ products increased $8.0 million.

Pet segment net sales increased $4.8 million, or 2.2%, to $221.5 million for the three months ended March 28, 2015 from $216.7 million for the three months ended March 29, 2014. The increase in sales was due primarily to a $6.2 million increase in sales of other manufacturers’ products, partially offset by decreased pet branded product sales. Pet branded product sales decreased $1.4 million, due primarily to a $5.2 million decrease in our wild bird feed category, related to both price and volume decreases, and a $3.3 million decrease in our dog and cat category. A principal reason for the decrease in the dog and cat category was lost retail space for our dog food products. These decreases were partially offset by a $7.1 million increase in our animal health category, due primarily to increased sales in our active ingredient professional business including $2.9 million from an acquisition which was completed in 2014.

Garden segment net sales decreased $8.8 million, or 3.1%, to $276.1 million for the three months ended March 28, 2015 from $284.9 million for the three months ended March 29, 2014. Garden branded product sales decreased $10.6 million and sales of other manufacturers’ products increased $1.8 million. The sales decrease in our garden branded products was due primarily to a decrease of $14.3 million in grass seed and a $3.5 million decrease in wild bird feed, partially offset by an $11.3 million increase in Garden controls and fertilizers. The decrease in sales in grass seed was primarily volume driven as the prior year quarter was bolstered by an early inventory build at retail that we believe shifted sales from April into our fiscal 2014 second quarter. The decrease in sales in wild bird feed was primarily volume driven reflecting decreased distribution. The increase in sales in Garden controls and fertilizers was due primarily to increased sales in our private label business.

Gross Profit

Gross profit for the three months ended March 28, 2015 increased $2.5 million, or 1.7%, to $150.1 million from $147.6 million for the three months ended March 29, 2014. Gross margin improved to 30.2% for the three months ended March 28, 2015 from 29.4% for the three months ended March 29, 2014 due to gross margin improvement in both our Garden and Pet operating segments.

Gross profit improved in the Pet segment due primarily to increases in both sales and gross margin in our animal health category. Our animal health category was favorably impacted by increased volumes in our professional active ingredients business and the nonrecurrence of certain costs in our flea and tick business in the prior year. These gains were partially offset by decreased sales and margins in our bird and small animal business, impacted by reduced customer pricing associated with declining raw material commodity costs. Gross profit declined slightly in our Garden segment due to decreased sales while gross margin in Garden improved due primarily to increased sales and margin improvement in Garden controls and fertilizers. A principal reason for this improvement in Garden controls and fertilizers was increased volume due to new distribution of our private label products.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $2.7 million, or 2.7%, to $100.1 million for the three months ended March 28, 2015 from $102.8 million for the three months ended March 29, 2014. As a percentage of net sales, selling, general and administrative expenses decreased to 20.1% for the three months ended March 28, 2015, compared to 20.5% in the comparable prior year quarter.

Selling and delivery expense decreased $1.4 million, or 2.5%, to $55.3 million for the three months ended March 28, 2015 from $56.7 million for the three months ended March 29, 2014. The decrease was due primarily to decreased marketing program expenses, including advertising, and reduced delivery expenses favorably impacted by lower sales volume and distribution efficiency gains in our Garden segment.

Warehouse and administrative expense decreased $1.3 million, or 2.8%, to $44.8 million for the quarter ended March 28, 2015 from $46.1 million in the quarter ended March 29, 2014. The improvement was primarily attributable to decreased warehouse costs in our Garden segment due to lower volumes and temporary labor expense reduction efforts. Corporate expenses are included within administrative expense and relate to the costs of unallocated executive, administrative, finance, legal, human resource, and informational technology functions.

Operating Income

Operating income increased $5.2 million, or 11.6%, to $50.0 million for the three months ended March 28, 2015 from $44.8 million for the three months ended March 29, 2014. Operating income increased due to lower selling, general and administrative costs and an improved gross margin that were partially offset by lower sales. Operating income increased in both our Pet and Garden segments, partially offset by an increase in operating expense in Corporate. Operating income as a percentage of net sales improved due to the decrease in selling, general and administrative expenses and improved gross margin.

Pet operating income increased $2.9 million, or 12.0% to $27.1 million for the three months ended March 28, 2015 from $24.2 million for the three months ended March 29, 2014. The increase was due primarily to improved gross margin and increased sales. Garden operating income increased $2.5 million, or 6.8%, to $39.3 million for the fiscal 2015 quarter from $36.8 million in the fiscal 2014 quarter due primarily to lower selling, general and administrative costs. Corporate operating expense increased $0.2 million.

Net Interest Expense

Net interest expense for the three months ended March 28, 2015 increased $1.5 million, or 14.1%, to $11.9 million from $10.4 million for the three months ended March 29, 2014. Interest expense increased due primarily to the redemption of notes during our second fiscal quarter. In March 2015, we redeemed $50.0 million of our 8.25% senior subordinated notes due March 2018 (2018 Notes) at a price of 102.063%. In conjunction with this transaction, we recognized a charge of approximately $1.6 million in our second fiscal quarter as part of interest expense related to the payment of the call premium and the non-cash write-off of unamortized financing costs. Debt outstanding on March 28, 2015 was $515.2 million compared to $545.3 million as of March 29, 2014. Our average borrowing rate for the current quarter increased slightly to 7.8% from 7.7% for the prior year quarter.

Other Income / Expense

Other income (expense) decreased $0.2 million to a $0.1 million expense for the three months ended March 28, 2015 from $0.1 million income for the three months ended March 29, 2014. Other income (expense) was comprised primarily of income from investments accounted for under the equity method of accounting and foreign currency exchange gains and losses. The decrease was primarily due to the losses from our investment in two newly formed entities, accounted for under the equity method of accounting, and increased foreign currency exchange losses.

Income Taxes

Our effective income tax rate was 36.9% for the quarter ended March 28, 2015 and 37.7% for the quarter ended March 29, 2014. The income tax rate decrease was due primarily to additional tax credits available in the current year quarter that were not available in the prior year quarter.

Six Months Ended March 28, 2015

Compared with Six Months Ended March 29, 2014

Net Sales

Net sales for the six months ended March 28, 2015 increased $12.8 million, or 1.6%, to $804.9 million from $792.1 million for the six months ended March 29, 2014. Our branded product sales decreased $8.3 million, while sales of other manufacturers’ products increased $21.1 million.

Pet Products’ net sales increased $19.5 million, or 4.9%, to $420.8 million for the six months ended March 28, 2015 from $401.3 million for the six months ended March 29, 2014. Pet branded product sales increased $4.8 million from the prior year period, due primarily to a $14.7 million increase in our animal health category, driven by increased sales in our active ingredient professional business, including $5.5 million from a prior year acquisition. The increase was partially offset by a $4.6 million decrease in our wild bird feed category, due to both price and volume decreases, and a $2.0 million decrease in our aquatic category. Sales of other manufacturers’ products increased approximately $14.7 million compared to the prior year six month period.

Garden Products’ net sales decreased $6.7 million, or 1.7%, to $384.1 million for the six months ended March 28, 2015 from $390.8 million for the six months ended March 29, 2014. Garden branded product sales decreased $13.1 million due primarily to a decrease of $15.0 million in grass seed, a $6.0 million decrease in wild bird feed and an $8.5 million decrease in Decor, partially offset by a $15.9 million increase in Garden controls and fertilizers. The decrease in sales in grass seed was primarily volume driven as an early inventory build at retail in the comparable prior year period shifted sales from April into our second fiscal quarter of 2014. The decrease in sales in wild bird feed was volume driven reflecting decreased distribution. The Decor business was impacted by lower volumes as a result of reduced store listings and higher retail inventory levels. The increase in sales in Garden controls and fertilizers was due primarily to increased sales in our private label business. Sales of other manufacturers’ products increased approximately $6.4 million compared to the comparable prior year period.

Gross Profit

Gross profit for the six months ended March 28, 2015 increased $10.7 million, or 4.7%, to $238.0 million from $227.3 million for the six months ended March 29, 2014. Gross profit as a percentage of net sales increased to 29.6% for the six months ended March 28, 2015 from 28.7% for the six months ended March 29, 2014.

Gross profit and gross margin improved in the Pet segment primarily due to both increased sales and gross margin in our animal health category which was favorably impacted by increased volumes in our professional actives business. In our Garden segment, gross profit declined slightly due to decreased sales while the gross margin improved due primarily to increased sales and margin improvement in Garden controls and fertilizers which was favorably impacted by increased volume due to new distribution of our private label products.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $4.0 million, or 2.1%, to $186.9 million for the six months ended March 28, 2015 from $190.9 million for the six months ended March 29, 2014. As a percentage of net sales, selling, general and administrative expenses decreased to 23.2% for the six months ended March 28, 2015, compared to 24.1% in the comparable prior year six month period.

Selling and delivery expense decreased $1.6 million, or 1.6%, to $99.8 million for the six months ended March 28, 2015 from $101.4 million for the six months ended March 29, 2014. The decrease was due primarily to decreased marketing program expenditures, including marketing program expenditures and headcount reductions, in our Garden segment. The decrease was partially offset by an increase in our Pet segment due to higher variable expenses associated with the increased sales.

Warehouse and administrative expense decreased $2.4 million to $87.1 million for the six months ended March 28, 2015 from $89.5 million in the six months ended March 29, 2014. The improvement was primarily attributable to decreased warehouse costs in our Garden segment due to lower volumes and temporary labor expense reduction and reduced administrative costs due to headcount reductions.

Operating Income

Operating income increased $14.7 million, or 40.4%, to $51.1 million for the six months ended March 28, 2015 from $36.4 million for the six months ended March 29, 2014. Operating income increased due to increased sales, an improved gross margin and lower selling, general and administrative expenses. Increased operating income in the Garden and Pet segments and decreased operating expense in Corporate all contributed to the increased operating income.

Pet operating income increased $9.0 million to $47.6 million due to increased sales of $19.5 million and an improved gross margin which were partially offset by increased selling, general and administrative costs. Garden operating income increased $5.3 million to $35.8 million due to lower selling, general and administrative costs and an improved gross margin partially offset by decreased sales of $6.7 million. Corporate operating expense decreased $0.4 million.

Net Interest Expense

Net interest expense for the six months ended March 28, 2015 decreased $0.3 million or 1.3%, to $22.3 million from $22.6 million for the six months ended March 29, 2014. A non-cash charge of $1.7 million in the first quarter of fiscal 2014 related to the termination of our prior revolving credit facility was partially offset by a $1.6 million charge related to the redemption of $50 million of our 8.25% senior subordinated notes during the second quarter of fiscal 2015.

Other Expense

Other expense increased $0.4 million to $0.5 million for the six months ended March 28, 2015, from $0.1 million for the six months ended March 29, 2014. The increase in other expense was due primarily to increased foreign currency exchange losses and to the losses from our investment in two newly formed entities, accounted for under the equity method of accounting.

Income Taxes

Our effective income tax rate was 35.5% for the six months ended March 28, 2015 and 36.9% for the six months ended March 29, 2014. Our 2015 tax rate benefited primarily from additional tax benefits available in 2015.

Inflation

Our revenues and margins are dependent on various economic factors, including rates of inflation, energy costs, consumer attitudes toward discretionary spending, currency fluctuations, and other macro-economic factors which may impact levels of consumer spending. Historically, in certain fiscal periods, we have been adversely impacted by rising input costs related to domestic inflation, particularly related to grain and seed prices, fuel prices and the ingredients used in our Garden controls and fertilizer. Rising costs have made it difficult for us to increase prices to our retail customers at a pace sufficient to enable us to maintain margins.

In recent years, our business has been negatively impacted by low consumer confidence, as well as other macro-economic factors. In fiscal 2012 and throughout most of fiscal 2013, commodity costs continued to increase. Recently, many of our commodity costs have been declining although we have seen increases in our grass seed costs. We continue to monitor commodity prices in order to take action to mitigate the impact of increasing raw material costs.

Weather and Seasonality

Our sales of lawn and garden products are influenced by weather and climate conditions in the different markets we serve. Additionally, our Garden segment’s business is highly seasonal. In fiscal 2014, approximately 65% of our Garden segment’s net sales and 59% of our total net sales occurred during our second and third fiscal quarters. Substantially all of the Garden segment’s operating income is typically generated in this period, which has historically offset the operating loss incurred during the first fiscal quarter of the year.

Liquidity and Capital Resources

We have financed our growth through a combination of internally generated funds, bank borrowings, supplier credit, and sales of equity and debt securities to the public.

Our business is seasonal and our working capital requirements and capital resources track closely to this seasonal pattern. Generally, during the first fiscal quarter, accounts receivable reach their lowest level while inventory, accounts payable and short-term borrowings begin to increase. During the second fiscal quarter, receivables, accounts payable and short-term borrowings increase, reflecting the build-up of inventory and related payables in anticipation of the peak lawn and garden selling season. During the third fiscal quarter, 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 fiscal quarter, inventory levels are at their lowest, and accounts receivable and payables are substantially reduced through conversion of receivables to cash.

We service two broad markets: pet supplies and lawn and garden supplies. Our pet supplies businesses involve products that have a year round selling cycle with a slight degree of seasonality. As a result, it is not necessary to maintain large quantities of inventory to meet peak demands. On the other hand, our lawn and garden businesses are highly seasonal with approximately 65% of our Garden segment’s net sales occurring during the second and third fiscal quarters. This seasonality requires the shipment of large quantities of product well ahead of the peak consumer buying periods. To encourage retailers and distributors to stock large quantities of inventory, industry practice has been for manufacturers to give extended credit terms and/or promotional discounts.

Operating Activities

Net cash used in operating activities increased by $38.5 million, to $98.5 million used for the six months ended March 28, 2015 from $60.0 million of cash used in operating activities for the six months ended March 29, 2014. The increase in cash used in operating activities was due primarily to an increased seasonal inventory build in the current period compared to the prior year period, partially

offset by increased payables in support of the inventory build. While inventory levels were lower for the period ended March 28, 2015 compared to the prior year period, the seasonal build was higher due to the lower levels of inventory for the fiscal year ending September 27, 2014, compared to inventory levels as of September 28, 2013. We remain focused on bringing our investment in inventory down over time, while maintaining high fill rates and service levels to our customers.

Investing Activities

Net cash used in investing activities increased $9.3 million, from $6.4 million for the six months ended March 29, 2014 to $15.7 million for the six months ended March 28, 2015. The increase in cash used in investing activities was due primarily to our $16 million investment for a 50% interest in two newly formed entities, partially offset by an increase in proceeds from short-term investments.

Financing Activities

Net cash provided by financing activities decreased $20.3 million, from $67.9 million of cash provided by financing activities for the six months ended March 29, 2014 to $47.6 million provided for the six months ended March 28, 2015. The decrease in cash provided was due primarily to our redemption of $50 million aggregate principal of our 2018 Notes during the current year period at 102.063%, as well as increased purchases of our common stock compared to the prior year. During the six months ended March 28, 2015, we repurchased $15.1 million of our common stock, which consisted of 0.5 million shares of our voting common stock (CENT) at an aggregate cost of approximately $4.5 million, or approximately $9.00 per share, and 1.2 million shares of our non-voting Class A common stock (CENTA) at an aggregate cost of approximately $10.6 million, or approximately $8.83 per share. These uses of cash were partially offset by higher net borrowings under our revolving credit facility during the six months ended March 28, 2015 compared to the prior year period.

We expect that our principal sources of funds will be cash generated from our operations and, if necessary, borrowings under our $390 million asset backed loan facility. Based on our anticipated cash needs, availability under our asset backed loan facility and the scheduled maturity of our debt, we believe that our sources of liquidity should be adequate to meet our working capital, capital spending and other cash needs for at least the next 12 months. However, we cannot assure you that these sources will continue to provide us with sufficient liquidity and, should we require it, that we will be able to obtain financing on terms satisfactory to us, or at all.

We believe that cash flows from operating activities, funds available under our asset backed loan facility, and arrangements with suppliers will be adequate to fund our presently anticipated working capital requirements for the foreseeable future. We anticipate that our capital expenditures, which are related primarily to replacements and upgrades to plant and equipment and investment in our implementation of a scalable enterprise-wide information technology platform, will not exceed $30 million during fiscal 2015. We are investing in this information technology platform to improve existing operations, support future growth and enable us to take advantage of new applications and technologies. We invested approximately $83 million from fiscal 2005 through fiscal 2014 in this initiative. Capital expenditures for 2015 and beyond will depend upon the pace of conversion of those remaining legacy systems. This initiative, when complete, will combine our numerous information systems, which should create greater efficiency and effectiveness.

As part of our growth strategy, we have acquired a number of companies in the past, and we anticipate that we will continue to evaluate potential acquisition candidates in the future. If one or more potential acquisition opportunities, including those that would be material, become available in the near future, we may require additional external capital. In addition, such acquisitions would subject us to the general risks associated with acquiring companies, particularly if the acquisitions are relatively large.

At March 28, 2015, our total debt outstanding was $515.2 million, as compared with $545.3 million at March 29, 2014.

Senior Subordinated Notes

On March 8, 2010, we issued $400 million aggregate principal amount of 2018 Notes. On February 13, 2012, we issued an additional $50 million aggregate principal amount of our 2018 Notes at a price of 98.501%, plus accrued interest from September 1, 2011, in a private placement. We used the net proceeds from the offering to pay a portion of the outstanding balance under our prior credit facility.

The 2018 Notes require semiannual interest payments, which commenced on September 1, 2010. The 2018 Notes are unsecured senior subordinated obligations and are subordinated to all of our existing and future senior debt, including our Credit Facility. The obligations under the 2018 Notes are fully and unconditionally guaranteed on a senior subordinated basis by each of our existing and future domestic restricted subsidiaries with certain exceptions. The guarantees are general unsecured senior subordinated obligations of the guarantors and are subordinated to all existing and future senior debt of the guarantors.

In March 2015, we redeemed $50.0 million of our 8.25% senior subordinated notes due March 2018 at a price of 102.063% and recorded a charge of approximately $1.6 million related to the payment of the call premium and the non-cash write-off of unamortized deferred financing costs.

We may redeem some or all of the remaining 2018 Notes on or after March 1, 2015 for 102.063% and on or after March 1, 2016 for 100%, plus accrued and unpaid interest. The holders of the 2018 Notes have the right to require us to repurchase all or a portion of the 2018 Notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence of a change of control.

The estimated fair value of our $400 million remaining aggregate principal amount of the 2018 Notes as of March 28, 2015 was approximately $409.5 million. The estimated fair value is based on quoted market prices for these notes.

The 2018 Notes contain customary high yield covenants, including covenants limiting debt incurrence and restricted payments, subject to certain baskets and exceptions. We were in compliance with all financial covenants as March 28, 2015.

Asset Backed Loan Facility

On December 5, 2013, we entered into a credit agreement which provides up to a $390 million principal amount senior secured asset-based revolving credit facility, with up to an additional $200 million principal amount available with the consent of the Lenders if we exercise the accordion feature set forth therein (collectively, the “Credit Facility”). The Credit Facility matures on December 5, 2018 and replaced our prior revolving credit facility. We may borrow, repay and reborrow amounts under the Credit Facility until its maturity date, at which time all amounts outstanding under the Credit Facility must be repaid in full. As of March 28, 2015, there were borrowings of $115 million outstanding and no letters of credit outstanding under the Credit Facility. There were other letters of credit of $12.6 million outstanding as of March 28, 2015.

The Credit Facility is subject to a borrowing base, calculated using a formula based upon eligible receivables and inventory, minus certain reserves and subject to restrictions. The borrowing availability as of March 28, 2015 was $165 million. Borrowings under the Credit Facility bear interest at an index based on LIBOR or, at our option, the Base Rate (defined as the highest of (a) the SunTrust prime rate, (b) the Federal Funds Rate plus 0.5% and (c) one-month LIBOR plus 1.00%), plus, in either case, an applicable margin based on our total outstanding borrowings. Such applicable margin for LIBOR-based borrowings fluctuates between 1.25%-1.75% (1.25% at March 28, 2015) and such applicable margin for Base Rate borrowings fluctuates between 0.25%-0.75% (0.25% at March 28, 2015). As of March 28, 2015, the applicable interest rate related to Base Rate borrowings was 3.5%, and the applicable interest rate related to LIBOR-based borrowings was 1.4%.

The Credit Facility contains customary covenants, including financial covenants which require us to maintain a minimum fixed charge coverage ratio of 1.00:1.00 upon reaching certain borrowing levels. The Credit Facility is secured by substantially all of our assets. We were in compliance with all covenants under the Credit Facility during the period ended March 28, 2015.

In fiscal 2014, we incurred approximately $3.1 million of costs in conjunction with the new facility, which included banking fees and legal expenses. These costs will be amortized over the term of the Credit Facility.

We recorded a non-cash charge of $1.7 million for the three month period ended December 28, 2013 as part of interest expense, related to the non-cash write-off of unamortized deferred financing costs under the prior revolving credit facility.

Off-Balance Sheet Arrangements

There have been no material changes to the information provided in our Annual Report on Form 10-K for the fiscal year ended September 27, 2014 regarding off-balance sheet arrangements.

Contractual Obligations

There have been no material changes outside the ordinary course of business in our contractual obligations set forth in the Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources in our Annual Report on Form 10-K for the fiscal year ended September 27, 2014.

New Accounting Pronouncements

Refer to Footnote 1 in the notes to the condensed consolidated financial statements for new accounting pronouncements.

Critical Accounting Policies, Estimates and Judgments

There have been no material changes to our critical accounting policies, estimates and assumptions or the judgments affecting the application of those accounting policies since our Annual Report on Form 10-K for the fiscal year ended September 27, 2014.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in our exposure to market risk from that discussed in our Annual Report on Form 10-K for the fiscal year ended September 27, 2014.

Item 4.

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have reviewed, as of the end of the period covered by this report, the “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) that ensure that information relating to the Company required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported in a timely and proper manner and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based upon this review, such officers concluded that our disclosure controls and procedures were effective as of March 28, 2015.

(b) Changes in Internal Control Over Financial Reporting. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the second quarter of fiscal 2015. Based on that evaluation, management concluded that there has been no change in our internal control over financial reporting during the second quarter of fiscal 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

From time to time, we are involved in certain legal proceedings in the ordinary course of business. Currently, we are not a party to any legal proceedings that management believes would have a material effect on our financial position or results of operations.

Item 1A.

Risk Factors

There have been no material changes from the risk factors previously disclosed in Item 1A to Part I of our Form 10-K for the fiscal year ended September 27, 2014.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth the repurchases of any equity securities during the fiscal quarter ended March 28, 2015 and the dollar amount of authorized share repurchases remaining under our stock repurchase program.


Period	Total Number of Shares (or Units) Purchased⁽²⁾		Average Price Paid per Share (or Units)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs ⁽¹⁾
December 28, 2014 – January 31, 2015		444,437	$	9.46		401,454	$	41,180,000
February 1, 2015 – February 28, 2015		516,192	$	9.52		511,357	$	36,315,000
March 1, 2015 – March 28, 2015		144,811	$	9.64		139,800	$	34,968,000

Total		1,105,440	$	9.51		1,052,611	$	34,968,000

(1)

During the third quarter of fiscal 2011, our Board of Directors authorized a $100 million share repurchase program. The program has no expiration date and expires when the amount authorized has been used or the Board withdraws its authorization. The repurchase of shares may be limited by certain financial covenants in our credit facility and indenture that restrict our ability to repurchase our stock.

(2)	Shares purchased during the period indicated represent withholding of a portion of shares to cover taxes in connection with the vesting of restricted stock and the exercise of stock options.

Item 3.

Defaults Upon Senior Securities

Not applicable

Item 4.

Mine Safety Disclosures

Not applicable

Item 5.

Other Information

Not applicable

Item 6.

Exhibits



31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

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: May 7, 2015

		/s/ JOHN R. RANELLI
		John R. Ranelli
		President and Chief Executive Officer
		(Principal Executive Officer)

		/s/ LORI A. VARLAS
		Lori A. Varlas
		Chief Financial Officer
		(Principal Financial Officer)