Central Garden & Pet Company (CENTA) swung to a net profit for the quarter ended Dec. 24, 2016. The company has made a net profit of $7.64 million, or $ 0.15 a share in the quarter, against a net loss of $8.60 million, or $0.18 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $6.32 million, or $0.12 a share compared with $0.34 million or $0.01 a share, a year ago.
Revenue during the quarter grew 16.59 percent to $419.50 million from $359.81 million in the previous year period. Gross margin for the quarter expanded 103 basis points over the previous year period to 28.77 percent. Total expenses were 95.25 percent of quarterly revenues, down from 97.56 percent for the same period last year. This has led to an improvement of 231 basis points in operating margin to 4.75 percent.
Operating income for the quarter was $19.94 million, compared with $8.77 million in the previous year period.
However, the adjusted operating income for the quarter stood at $17.89 million compared to $8.77 million in the prior year period. At the same time, adjusted operating margin improved 183 basis points in the quarter to 4.26 percent from 2.44 percent in the last year period.
"The first quarter puts Central well on track to deliver our fiscal year earnings guidance, which will remain unchanged at this time," said George Roeth, President & chief executive officer of Central Garden & Pet. "While over half of the year-over-year earnings increase in the first quarter was related to acquisitions and timing, we continue to be encouraged by our strong organic sales growth and market share gains. We remain focused on executing with excellence against our strategy and plan."
For fiscal year 2017, the company projects diluted earnings per share to be $1.34 on adjusted basis.
Working capital decreases marginally
Central Garden & Pet Company has witnessed a decline in the working capital over the last year. It stood at $463.18 million as at Dec. 24, 2016, down 2.33 percent or $11.03 million from $474.20 million on Dec. 26, 2015. Current ratio was at 3.01 as on Dec. 24, 2016, down from 3.17 on Dec. 26, 2015.
Cash conversion cycle (CCC) has decreased to 75 days for the quarter from 144 days for the last year period. Days sales outstanding went down to 43 days for the quarter compared with 51 days for the same period last year.
Days inventory outstanding has decreased to 66 days for the quarter compared with 132 days for the previous year period. At the same time, days payable outstanding went down to 34 days for the quarter from 38 for the same period last year.
