Central Garden & Pet Company (NASDAQ:CENT.A) Q2 2018 Earnings Conference Call - Final Transcript

May 07, 2018 • 04:30 pm ET


Central Garden & Pet Company (NASDAQ:CENT.A) Q2 2018 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to Central Garden & Pet's Second Quarter Fiscal Year 2018 Financial Results Conference Call. My name is Sherry, and I will be your conference operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to Steven Zenker, Vice President of Investor Relations and Communications. Please go ahead.

Steven Zenker

Thank you, Sherry. Good afternoon, everyone. Thank you for joining us.

With me on the call today are George Roeth, Central's President and Chief Executive Officer; Niko Lahanas, Chief Financial Officer; Howard Machek, Senior Vice President, Finance and Chief Accounting Officer; J.D. Walker, President, Garden Branded Business; and Rodolfo Spielmann, President, Pet Consumer Products.

A press release providing results for our second quarter ended March 31, 2018 is available on our website at www.central.com, and contains the GAAP to non-GAAP reconciliation for the non-GAAP measures discussed on this call.

Before I turn the call over to George, I would like to remind you that statements made during this conference call, which are not historical facts including adjusted EPS guidance for 2018, expectations for new product introductions, future acquisitions, and future revenue and profitability as well as the expected impact of the recent tax reform act are forward-looking statements, subject to risks and uncertainties that could cause actual results to differ materially from those implied by forward-looking statements. These risks and others are described in Central's Securities and Exchange Commission filings including our annual report on Form 10-K filed on November 29, 2017. Central undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.

Now, I will turn the call over to our CEO, George Roeth. George?

George Roeth

Thank you, Steve. Good afternoon, everybody. I'm happy to report that our second quarter was a solid one and we're very pleased with our growth trajectory. Most significantly, in the second quarter, we had strong organic revenue growth from both our Garden and Pet segments.

Overall, company revenues rose 8% with organic sales up 6%. Our focus on investing behind and executing against our organic growth as a top priority continues to pay dividends. We have said in the past that we expected our sales and profit growth metrics will be bumpy and we've seen this play out over the past two quarters. Top line comparisons versus the prior year this quarter were easier than last quarter.

Also, acquisitions are expected to continue to add to our overall growth. Although the contribution from acquisitions can vary significantly from quarter-to-quarter, a case in point would be our newly acquired Bell Nursery business, which is highly seasonal in nature. So, I guess, what I'm saying is you shouldn't extrapolate one quarter's growth over the entire year. It would be best served to focus on what we