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Non-Tech : Central Garden & Pet Co. (Nasdaq : CENT) -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (53)	8/11/1999 10:21:00 AM
From: SIer formerly known as Joe B.	Read Replies (1) \| Respond to of 73

P&G to buy pet food maker Iams for $2.05 billion CINCINNATI, Aug 11 (Reuters) - Household products giant Procter & Gamble Co. <PG.N> will acquire Iams Co., a big player in the high-quality pet food market, in a cash deal worth $2.05 billion, plus $250 million in debt, the companies said on Wednesday. "Iams is a terrific business -- strong innovation, leading brands, global growth, talented people," P&G Chief Executive Durk Jager said in a prepared statement. "It fits well with P&G strengths, including expertise in health and nutrition. Iams will be an important contributor to accelerating our growth." MORE * end of story *

To: Gottfried who wrote (53)	8/22/1999 2:57:00 PM
From: Dale Stempson	Respond to of 73

H&Q Update from 8/5 - Market Perform Rating Company: Central Garden & Pet Co. Price: 8.43 Recommendation: Market Perform Notes: a, b, f Date: 8/5/99 CENT Q3 Sligthly Below Est. -- Outlook Remains Cloudy, Maintain Mkt. Perform CENT reported Q3 revenues and EPS of $529 million and $0.47 vs. our recently lowered estimates $505 million and $0.50. With higher expenses running into Q4 we are further reducing our EPS target to $0.09 from $0.14 - resulting in FY99 EPS of $1.10. With a large portion of Scott's sales going away (~$200 million), our FY00 model contemplates a $0.25 reduction in EPS, internal growth of 8-10% and a lower share count from stock repurchases - leaving our EPS target at $1.00. We maintain our Market Perform rating. 1998 A 1999 E 2000 E Q1 EPS $(0.02) $(0.01) $-- Q2 EPS 0.42 0.51 -- Q3 EPS 0.59 0.47 -- Q4 EPS 0.22 0.09 -- FY EPS 1.35 1.10 1.00 FY REVS (M) 1,295 1,514 1,341 CY EPS 1.25 1.09 1.07 CY P/E 9 8 8 FY Ends Sep Current Price $8.43 52-Week Range $8-34 Market Cap(M) $212 Shares Out(M) 25.0 Book Value $9.67 Net Cash/Share $0.09 3-Year EPS Growth 15% CY99 P/E-to-Growth 0.6 CENT reports final Q3 results - EPS down 20% to $0.47: CENT reported Q3 revenues and EPS of $529 million and $0.47 vs. our recently lowered estimates $505 million and $0.50. Revenues increased 5% on ~3% internal growth and incremental contribution from Norcal. Internal growth in lawn & garden was 3% vs. 15% in Q2 due to weather while both pet distribution and branded products grew modestly. Gross margins declined 50 basis points due a higher percentage of lower margin distribution business while higher expense levels further reduced operating margin by 240 basis points to 5.0%. EPS declined 20% to $0.47 - somewhat offset by a 13% decrease in average shares outstanding from CENT's repurchase program. Lowering FY99 slightly, no change to 2000 target - restructuring forthcoming: With higher expenses running into Q4 we are further reducing our EPS target to $0.08 from $0.14 - resulting in FY99 EPS of $1.10. Going forward, with the termination of the Scott's distribution agreement, Central will undertake a significant cost restructuring over the next few quarters. While management did not give specific guidance in terms of magnitude of charges or cost savings, we expect significant write-offs to be announced at the end of Q4. With a large portion of Scott's sales going away (~$200 million), our FY00 model contemplates a $0.25 reduction in EPS, internal growth of 8-10% and a lower share count - leaving our EPS target at $1.00. Our target may prove conservative as we are taking a wait and see approach ahead of the Spring 2000 selling season. CENT continuing to repurchase stock *inventory reflects Solaris: Recently, Central announced that it increased its share repurchase program by an additionally $25 million to $130 million. To date, CENT had repurchased 10 million shares for $115 million or $11.50 per share. On the call, management indicated that the company continues to purchase stock which is reflected in our Q4 model. Importantly, inventory increased 22% to $338 million as CENT brought product in anticipating a strong garden season. Management indicated that $100 million of inventory will be returned to Solaris under the distribution agreement. Maintain MARKET PERFORM: At current price levels there may be significant appreciation potential if Central can get expenses under control, focus on growing its branded portfolio (including future acquisitions) and efficiently execute its distribution business. However, with significant uncertainty heading into seasonally slow quarters, and restructuring charges forthcoming we maintain our MARKET PERFORM recommendation. Note Legend: (a) Hambrecht & Quist LLC maintains a market in these stocks. (b) Hambrecht & Quist LLC has been an underwriting manager, or co-manager, or has privately placed securities of these companies within the last three years. (f) Options are available on these issues. ______________________________ Regards - Dale