Central Garden & Pet Settles Litigation; Receives $26 Million Cash Payment
23 June 2006 - 6:01AM
Business Wire
Central Garden & Pet Company (NASDAQ:CENT) today announced that
the litigation between Central and Herbert and Evelyn Axelrod has
been settled. Under the settlement, Central received a cash payment
from the Axelrods of $26 million. In September 2005, a jury found
for Central on its claim against the Axelrods for collection of a
promissory note that the Axelrods signed in 1997 and for breach of
warranty and fraud. The Company is in the process of completing the
accounting for the settlement. Central's preliminary estimate is
that the settlement will result in a one-time contribution to
operating income of approximately $10 million after consideration
of a receivable balance due from the Axelrods of $16 million
comprised of note principal and interest and related expenses
previously accrued on its financial statements. The Company's
previously issued guidance of $2.80-$2.90 earnings per fully
diluted share for fiscal 2006 does not include the benefit of this
settlement. "We are pleased to have favorably finalized this
litigation," said Glenn Novotny, President and CEO. "We look
forward to dedicating all of our energy and resources toward
building the Company and increasing shareholder value." Central
Garden & Pet Company is a leading innovator, marketer and
producer of quality branded products for the pet and lawn and
garden supplies markets. Our pet products include pet bird and
small animal food, aquarium products, flea, tick, mosquito and
other pest control products, edible bones, cages, carriers, pet
books, and other dog, cat, reptile and small animal products. These
products are sold under a number of brand names, including Kaytee,
SuperPet, All-Glass Aquarium, Oceanic, Kent Marine, Energy Savers
Unlimited, Zodiac, Pre-Strike, Altosid, Nylabone, TFH, Four Paws,
Interpet, Breeder's Choice and Farnam. Our lawn and garden products
include grass seed, wild bird food, weed and insect control
products, and decorative outdoor patio products. These products are
sold under a number of brand names, including Pennington, Norcal
Pottery, New England Pottery, GKI/Bethlehem Lighting, Lilly Miller,
Matthews Four Seasons, Cedar Works, AMDRO, Grant's, Ironite, Sevin
and Over'n Out. For additional information on Central Garden &
Pet, including access to the Company's SEC filings, please visit
the Company's website at http://www.central.com/. "Safe Harbor"
Statement under the Private Securities Litigation Reform Act of
1995: The statements contained in this release which are not
historical facts, including future earnings guidance, are
forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially
from those set forth in or implied by forward-looking statements.
These risks are described in the Company's Securities and Exchange
Commission filings. Central undertakes no obligation to publicly
update these forward-looking statements to reflect new information,
subsequent events or otherwise.
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