What changed in this filing

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Item 9A. Controls and Procedures

2023-11-28 compared with 2022-11-22 · 213 added, 205 removed, 1124 unchanged (27% of the section changed)

1 unchanged sentence

(a) Evaluation of Disclosure Controls and Procedures .

Our Chief Executive Officer and Principal 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 Principal 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 September 24, 2022.

Our Principal Executive Officer and Principal 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 Principal Executive Officer and Principal 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 not effective as a result of two material weaknesses in our internal control over financial reporting, described below, as of September 30, 2023.

In connection with the preparation of the financial statements for this Annual Report on Form 10-K, we identified deficiencies in the design and operating effectiveness of controls in our internal control over financial reporting as of September 30, 2023.

Management determined these identified deficiencies represented material weaknesses related to (1) certain information technology general computer controls ("ITGC’s") at our Live Plants and Green Garden businesses and (2) controls related to an outsourced service provider that supports certain of the Company’s revenue processes for our Live Plants business and were found to not be operating effectively.

As a result, certain of the Company’s related business controls that are dependent upon the affected ITGC’s and lack of controls around outsourced IT service provider data were also deemed ineffective.

A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses did not result in any identified misstatements to our consolidated financial statements or changes to previously disclosed financial results.

Management is in the process of establishing a remediation plan and expects its remediation efforts will involve implementing additional controls to ensure that access and program change management controls are designed and operating effectively and that we have effective controls relating to outsourced IT service providers and the data they provide.

(b) Changes in Internal Control Over Financial Reporting .

Our management, with the participation of our Chief Executive Officer and Principal Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the fourth quarter of fiscal 2022.

Based on that evaluation, management concluded that there has been no change in our internal control over financial reporting during the fourth quarter of fiscal 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the fourth quarter of fiscal 2023.

Based on that evaluation, management concluded that other than initial remediation efforts of the material weaknesses identified above, there has been no change in our internal control over financial reporting during the fourth quarter of fiscal 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Other Information

During the quarter ended September 30, 2023, none of our directors or officers informed us of the adoption , modification or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Regulation S-K, Item 408.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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We have adopted a code of ethics that applies to all of our executive officers and directors, a copy of which is available on our website at www.central.com/about-us/what-we-stand-for.

The remaining information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders under the captions “Election of Directors,” “Further Information Concerning the Board of Directors – Committees of the Board”, “Delinquent Section 16(a) Reports” and “Code of Ethics.” See also Item 1 – Business above.

The remaining information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2024 Annual Meeting of Shareholders under the captions “Election of Directors,” “Further Information Concerning the Board of Directors – Committees of the Board”, “Delinquent Section 16(a) Reports” and “Code of Ethics.” See also Item 1 – Business above.

Executive Compensation

The information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders under the captions “Executive Compensation” and “Further Information Concerning the Board of Directors – Compensation Committee Interlocks and Insider Participation.”

The information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2024 Annual Meeting of Shareholders under the captions “Executive Compensation” and “Further Information Concerning the Board of Directors – Compensation Committee Interlocks and Insider Participation.”

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders under the captions “Ownership of Management and Principal Stockholders” and Executive Compensation – “Equity Compensation Plan Information.”

The information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2024 Annual Meeting of Shareholders under the captions “Stock Ownership of Management and Principal Shareholders” and "Executive Compensation – Equity Compensation Plan Information.”

Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders under the captions “Further Information Concerning the Board of Directors – Board Independence” and “Transactions with the Company.”

The information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2024 Annual Meeting of Shareholders under the captions “Further Information Concerning the Board of Directors – Board Independence” and “Transactions with the Company.”

Principal Accountant Fees and Services

The information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders under the caption “Independent Registered Public Accounting Firm.”

The information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2024 Annual Meeting of Shareholders under the caption “Ratification of Selection of Independent Registered Public Accounting Firm.”

Exhibits and Financial Statement Schedules

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Exhibit Filing

Herewith Filed, Not Furnished

Herewith Furnished, Not Filed

Agreement and Plan of Merger, dated December 30, 2020, between Central Garden & Pet Company and Flora Parent, Inc.

27 unchanged sentences

8-K 001-33268 4.1 10/16/2020

Incorporated by Reference

Number Exhibit Form File

Exhibit Filing

Herewith Furnished, Not Filed

Twelfth Supplemental Indenture, dated as of March 10, 2021 by P&M Solutions, LLC, the Company, the other Guarantors and Wells Fargo Bank, National Association as trustee.

10-Q 001-33268 4.1 5/6/20213

Thirteenth Supplemental Indenture, dated effective as of April 9, 2021 by (i) Flora Parent, Inc., (ii) Seed Holdings, Inc., (iii) Plantation Products, LLC, (iv) Ferry-Morse Seed Company, (v) Livingston Seed Company, (vi) MARTEAL LTD, (vii) A.E.

ULC, the Company, the other Guarantors and Wells Fargo Bank, National Association, as trustee.

10-Q 001-33268 4.2 5/6/20213

Fourteenth Supplemental Indenture, dated as of March 3, 2023, by and among the Company, certain guarantors named therein and Computershare Trust Company, N.A., as successor to Wells Fargo Bank National Association, as trustee, relating to the 5.125% Senior Notes due 2028 and the 4.125% Senior Notes due 2030.

10-Q 001-33268 4.1 05/04/2023

Indenture, dated as of April 30, 2021, by and among the Company, certain guarantors named therein and Wells Fargo Bank, National Association, as trustee, relating to the 4.125% Senior Notes due 2031.

8-K 001-33268 4.1 04/30/2021

First Supplemental Indenture, dated as of March 3, 2023 among the Company, certain guarantors named therein and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee, paying agent and registrar under such indenture, relating to the 4.125% Senior Notes due 2031.

10-Q 001-33268 4.2 05/04/2023

Description of the Registrants Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

2 unchanged sentences

10-K 001-33268 10.1 11/29/2017

Incorporated by Reference

Number Exhibit Form File

Exhibit Filing

Herewith Filed, Not Furnished

Third Amended and Restated Credit Agreement dated December 16, 2021 among the Company, certain of the Company's subsidiaries as guarantors, a syndicate of financial institutions party thereto, Truist Bank, as issuing bank and administrative agent, Bank of America, N.A., Keybank National Association, U.S.

5 unchanged sentences

8-K 001-33268 10.1 12/21/2021

First Amendment to Third Amended and Restated Credit Agreement dated May 15, 2023, among the Company, each of the other Borrowers and Guarantors party hereto, the Lenders party hereto, and Truist Bank, as the Administrative Agent and Annex A to First Amendment to Third Amended and Restated Credit Agreement dated December 16, 2021, among the Company, certain of the Company's subsidiaries as guarantors, a syndicate of financial institutions party thereto, Truist Bank, as Issuing Bank and Administrative Agent, Bank of America, N.A., Keybank National Association, U.S.

Bank National Association and Wells Fargo Bank, National Association as Co-Syndication Agents, Bank of the West, Capital One, National Association, JPMorgan Chase Bank, N.A., and MUFG Bank, LTD., as Co-Documentation Agents, Truist Securities, Inc., Bank of America, N.A., Keybanc Capital Markets, Inc., U.S.

Bank National Association and Wells Fargo Bank, National Association as Joint Lead Arrangers and Joint Bookrunners.

10-Q 001-33268 10.1 8/3/2023

2003 Omnibus Equity Incentive Plan, as amended and restated effective February 13, 2012.

8-K 001-33268 10.2 2/15/2012

Incorporated by Reference

Number Exhibit Form File

Exhibit Filing

Herewith Furnished, Not Filed

Form of Nonstatutory Stock Option Agreement for 2003 Omnibus Equity Incentive Plan

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10-Q 000-20242 10.6.2 2/3/2005

Employment Agreement dated as of February 27, 1998 between Pennington Seed, Inc.

of Delaware and Brooks Pennington III

10-K/A 000-20242 10.20 1/20/1999

Modification and Extension of Employment Agreement dated as of February 27, 1998 between Pennington Seed, Inc.

of Delaware and Brooks Pennington III, dated as of May 6, 2003

10-Q 000-20242 10.7.1 8/8/2003

Modification and Extension of Employment Agreement and Noncompetition Agreement, dated as of April 10, 2006, between the Company and Brooks M.

Pennington III

8-K 000-20242 10.1 4/14/2006

Modification and Extension of Employment Agreement and Noncompetition Agreement, dated as of July 1, 2008, between the Company and Brooks M.

Pennington III

10-K 001-33268 10.7.2 11/26/2008

Amendment of Employment Agreement and Non-Competition Agreement between the Company and Brooks M.

Pennington III, dated March 20, 2012

10-Q 001-33268 10.1 2/7/2013

Modification and Extension of Employment Agreement and Noncompetition Agreement, dated as of March 1, 2014, between the Company and Brooks M.

Pennington III

10-Q 001-33268 10.1 2/5/2015

Incorporated by Reference

Number Exhibit Form File

Exhibit Filing

Herewith Filed, Not Furnished

Modification and Extension of Employment Agreement and Noncompetition Agreement, dated as of March 1, 2016, between the Company and Brooks M.

Pennington III

10-K 001-33268 10.16 11/29/2017

Modification and Extension of Employment Agreement and Noncompetition Agreement, dated as of March 1, 2018, between the Company and Brooks M.

Pennington III

10-K 001-33268 10.17 11/28/2018

Modification and Extension of Employment Agreement and Noncompetition Agreement, dated as of March 1, 2020, between the Company and Brooks M.

Pennington III

10-Q 001-33268 10.1 5/7/2020

Modification and Extension of Employment Agreement dated as of March 1, 2022, between the Company and Brooks M.

Pennington III.

10-Q 001-33268 10.2 5/5/2022

Form of Agreement to Protect Confidential Information, Intellectual Property and Business Relationships

2 unchanged sentences

8-K 000-20242 10.2 10/14/2005

Employment Agreement between the Company and George A.

Yuhas, effective March 1, 2011

10-K 001-33268 10.24 12/10/2015

Amendment No.

1 dated June 6, 2022 to Employment Agreement dated March 1, 2011 between the Company and George Yuhas

8-K/A 001-33268 10.1 6/7/2022

Employment Agreement between the Company and Timothy Cofer, effective October 14, 2019

8-K 001-33268 10.1 9/19/2019

Employment Agreement Amendment effective September 29, 2022 between Central Garden & Pet Company and Timothy P.

8-K 001-33268 10.1 10/3/2022

List of Subsidiaries

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104 Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document.

Incorporated by Reference

Number Exhibit Form File

Exhibit Filing

Herewith Filed, Not Furnished

* Management contract or compensatory plan or arrangement

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CENTRAL GARDEN & PET COMPANY

By /s/ Timothy P.

Chief Executive Officer

By /s/ Mary Beth Springer

Mary Beth Springer

Interim Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.

Signature Capacity Date

/s/ Timothy P.

Cofer Director and Chief Executive Officer (Principal Executive Officer) November 22, 2022

/s/ Mary Beth Springer Director and Interim Chief Executive Officer (Principal Executive Officer) November 28, 2023

Mary Beth Springer

/s/ Nicholas Lahanas Chief Financial Officer

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Ranelli Director November 28, 2023

/s/ Mary Beth Springer Director November 22, 2022

Mary Beth Springer

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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Consolidated Statements of Comprehensive Income for Fiscal Years Ended September 30, 2023, September 24, 2022 and September 25, 2021

Consolidated Statements of Equity for Fiscal Years Ended September 24, 2022, September 25, 2021 a nd September 26, 2020

Consolidated Statements of Cash Flows for Fiscal Years Ended September 24, 2022, September 25, 2021 an d September 26, 2020

Consolidated Statements of Equity for Fiscal Years Ended September 30, 2023, September 24, 2022 and September 25, 2021

Consolidated Statements of Cash Flows for Fiscal Years Ended September 23, 2023, September 24, 2022 and September 25, 2021

Notes to Consolidated Financial Statements for Fiscal Years Ended September 30, 2023, September 24, 2022 and September 25, 2021

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Central Garden & Pet Company’s management, under the supervision of Central’s Chief Executive Officer and Principal Financial Officer, is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act).

Central Garden & Pet Company’s management, under the supervision of Central’s Principal Executive Officer and Principal Financial Officer, is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act).

Management evaluated the effectiveness of Central’s internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission.

The scope of management's assessment of the effectiveness of our internal control over financial reporting included all of our consolidated operations.

Based on evaluation of the criteria set forth by COSO in Internal Control – Integrated Framework (2013) , management concluded that our internal control over financial reporting was effective as of September 24, 2022.

Based upon this assessment, such officers concluded that our internal control over financial reporting controls and procedures were not effective as a result of two material weaknesses in our internal control over financial reporting described below, as of September 30, 2023.

In the course of completing our assessment of internal control over financial reporting as of September 30, 2023, we identified deficiencies at two businesses, Live Plants and Green Garden, related to the design and operating effectiveness of information technology general computer controls for information systems.

These deficiencies related to access to systems and change management.

We have concluded that these internal control deficiencies in IT relating to access and program change management existed at September 30, 2023, and therefore represent a material weakness as of September 30, 2023.

Additionally, one of our outsourced IT service providers could not provide System and Organization Controls ("SOC") reports for periods that closely align with our fiscal year end.

We rely upon the outsourced IT service provider for key elements of technology infrastructure impacting our financial reporting process at our Live Plant business.

The SOC report was unavailable for control purposes, and we did not have controls that operated effectively to supplement the lack of a SOC report over the course of our fiscal year.

We also concluded that the deficiency in the controls pertaining to the outsourced IT service provider and related controls existed at September 30, 2023, and therefore represents a material weakness as of September 30, 2023.

As a result of the material weaknesses noted above, the business process controls that are dependent on the affected IT systems and outside service provider, including interface controls, or resulting electronic data and financial reports were adversely affected.

The material weaknesses did not result in any identified misstatements to our consolidated financial statements or changes to previously disclosed financial results.

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued a report on our internal control over financial reporting, which appears on page F-3 of this Form 10-K.

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To the shareholders and the Board of Directors of Central Garden & Pet Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Central Garden & Pet Company and subsidiaries (the "Company") as of September 24, 2022 and September 25, 2021, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the fiscal years ended September 24, 2022, September 25, 2021, and September 26, 2020, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of September 24, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 24, 2022 and September 25, 2021, and the results of its operations and its cash flows for each of the fiscal years in ended September 24, 2022, September 25, 2021, and September 26, 2020, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 24, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Central Garden & Pet Company and subsidiaries (the “Company”) as of September 30, 2023, and September 24, 2022, and the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the fiscal years ended September 30, 2023, September 24, 2022, and September 25, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023, and September 24, 2022, and the results of its operations and its cash flows for each of the fiscal years ended September 30, 2023, September 24, 2022, and September 25, 2021, in conformity with accounting principles generally accepted in the United States of America.

We also have audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 28, 2023, expressed an adverse opinion on the Company’s internal control over financial reporting because of material weaknesses.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisitions –Refer to Note 3 to the financial statements

Net Sales - Revenue Recognition for Consignment Arrangements — Refer to Note 1 to the financial statements

Critical Audit Matter Description

Green Garden Products— On February 11, 2021, the Company acquired Flora Parent, Inc.

and its subsidiaries ("Green Garden Products"), a leading provider of vegetable, herb and flower seed packets, seed starters and plant nutrients in North America, for approximately $571 million.

The Company finalized the allocation of the purchase price during fiscal year 2022.

D&D Commodities Limited—On June 30, 2021, the Company purchased D&D Commodities, Ltd.

("D&D"), a provider of high-quality, premium bird feed, for approximately $88 million in cash and the assumption of approximately $30 million of long-term debt.

The Company finalized the allocation of the purchase price during fiscal year 2022.

We identified the accounting for these acquisitions as a critical audit matter due to the complexity of the agreements and the significant judgments made by management in (1) evaluating the purchase and other agreements entered into on or around the acquisition dates to identify the accounting treatment for different elements contained in each agreement, and (2) determining the weighted-average cost of capital (WACC), including the discount rate to be used in the valuation.

Auditing these acquisitions required significant audit effort in the form of more experienced personnel reading the purchase and other agreements to identify, analyze, and conclude on the reasonableness of management's accounting treatment for the different elements, including the purchase price recorded.

In addition, we used our fair value specialists to (1) evaluate the reasonableness of the WACC and discount rate utilized in the valuation and (2) evaluate the reasonableness of key assumptions used.

Under consignment arrangements, which is a component of the garden segment net sales, the customer receives the product at its retail locations, but the Company retains the title to the product until it is purchased by the retail consumer.

When products are sold under consignment arrangements, the Company recognizes revenue when control over such products has transferred to the retail consumer.

The initiation, processing and recording of certain transactions under a certain consignment arrangement with a retailer customer relies upon the accuracy and completeness of revenues reported by it’s customer and revenue transaction processing services provided by a third party.

We identified revenue recognition for a consignment arrangement included in net sales for the year ended September 30, 2023, to be a critical audit matter because of the nature of the information used by the Company to recognize revenue.

This required a high degree of audit judgment and an increased extent of effort to evaluate the accuracy and completeness of information reported by the Company’s customer and third-party transaction processing services provider.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to acquisitions included the following, among others:

We tested the effectiveness of controls over the valuation methodology of acquired companies, including management’s controls over the selection of the WACC and discount rates as well as controls over the review of the purchase and other agreements for complex accounting matters and associated accounting analysis.

We utilized more experienced personnel to read and analyze the purchase and other agreements entered into on or around the acquisition date to identify and conclude on the reasonableness of management’s accounting treatment for the different elements, including the purchase price recorded.

With the assistance of fair value specialists, we evaluated the reasonableness of the WACC and discount rate by:

- Performing risk assessment procedures over the source information underlying the determination of the WACC and discount rate and testing the mathematical accuracy of the calculation.

- Developing a range of independent estimates and comparing those to the WACC and discount rates selected by management.

Our audit procedures related to revenue recognized for a consignment arrangement included the following, among others:

• With the assistance of data specialists, we created data visualizations to analyze journal entries to (i) identify significant transaction types in the revenue population and (ii) evaluate trends in the transactional revenue data, significant transaction types and related accounts affecting revenue.

• For a sample of transactions, we performed a test of details on those related accounts determined to have a significant relationship with revenue, including accounts receivable and cash collections.

• We traced the recording of point of sale revenue transactions into the Company’s records to understand how revenue transactions are captured, processed, and aggregated.

• We performed a proof of cash reconciliation that reconciled cash deposits to revenue recognized throughout the year.

For a selection of deposits received during the period, we performed detailed transaction testing, including agreeing the amount of the deposit received and the amount recognized as revenue during the period to underlying source documents, including cash receipts.

• We selected a sample of credits issued after year end and performed detailed transaction testing by agreeing the credit amount to documents supporting the authorization of the issuance of the credit and to evaluate if the credit was recognized in the correct period.

/s/ DELOITTE & TOUCHE LLP

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however, an earlier year could not be reliably determined.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Central Garden & Pet Company

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Central Garden & Pet Company and subsidiaries (the “Company”) as of September 30, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, because of the effect of the material weaknesses identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended September 30, 2023, of the Company and our report dated November 28, 2023, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weaknesses have been identified and included in management’s assessment:

• Ineffective information technology (IT) general computer controls

• Ineffective controls over an outsourced IT service provider

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended September 30, 2023, of the Company and this report does not affect our report on such financial statements.

/s/ DELOITTE & TOUCHE LLP

San Francisco, CA

November 28, 2023

CENTRAL GARDEN & PET COMPANY

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Interest income 7,362 719 415

Other expense, net ( 3,596 ) ( 1,506 ) ( 4,250 )

Other income (expense), net 1,462 ( 3,596 ) ( 1,506 )

Income before income taxes and noncontrolling interest 162,445 198,906 194,808

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Amortization of share-based awards — — — — — — 16,298 — — 16,298 — 16,298

Repurchase of stock ( 247,499 ) ( 2 ) ( 1,763,043 ) ( 18 ) — — ( 20,597 ) ( 31,637 ) — ( 52,254 ) — ( 52,254 )

Restricted share activity — — 579,237 6 — — ( 2,445 ) — — ( 2,439 ) — ( 2,439 )

Share conversion 39,888 — — — ( 39,888 ) — — — — — — —

Issuance of common stock — — 367,358 3 — — 1,099 — — 1,102 — 1,102

Distribution to noncontrolling interest — — — — — — — — — — ( 606 ) ( 606 )

Repurchase of stock ( 700 ) — ( 520,299 ) ( 5 ) — — ( 5,389 ) ( 16,445 ) — ( 21,839 ) — ( 21,839 )

Other comprehensive loss — — — — — — — — 578 578 — 578

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Distribution to noncontrolling interest — — — — — — — — — — — —

Share conversion 10,000 — — — ( 10,000 ) — — — — — —

Repurchase of stock ( 228,739 ) ( 2 ) ( 628,743 ) ( 6 ) — — ( 9,201 ) ( 21,526 ) — ( 30,735 ) — ( 30,735 )

16 unchanged sentences

Debt extinguishment costs — 169 8,577

Loss on sale of business — 2,611 —

(Gain) Loss on sale of business ( 5,845 ) — 2,611

Deferred income taxes ( 12,253 ) 28,128 ( 14,744 )

Pet Segment Facility Closures 15,674 — —

Loss (gain) on disposal of property, plant and equipment ( 262 ) 131 ( 256 )

39 unchanged sentences

Shares of common stock repurchased but not settled — 911 2,112

Operating lease right of use assets recognized at ASC 842 transition — — 111,298

Operating lease liabilities recognized at ASC 842 transition — — 115,376

Operating lease right of use assets recognized after ASC 842 transition 42,777 70,794 90,799

8 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

The fiscal years ended September 24, 2022, September 25, 2021 and September 26, 2020 each included 52 weeks.

The fiscal year ended September 30, 2023 included 53 weeks and fiscal years ended September 24, 2022 and September 25, 2021 each included 52 weeks.

Noncontrolling Interest – Noncontrolling interest in the Company’s consolidated financial statements represents the 20 % interest not owned by the Company in a consolidated subsidiary.

7 unchanged sentences

Product and non-product revenue is recognized when performance obligations under the terms of the contracts with customers are satisfied.

The Company recognizes product revenue when control over the finished goods transfers to its customers, which generally occurs upon shipment to, or receipt at, customers’ locations, as determined by the specific terms of the contract.

These revenue arrangements generally have single performance obligations.

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thus trade receivables do not bear interest, although a finance charge may be applied to such receivables that are past due.

Allowance for Credit Losses and Customer Allowances – The Company’s trade accounts receivable are recorded at net realizable value, which includes an allowance for estimated credit losses, as well as allowances for contractual customer deductions accounted for as

Under the guidance found in Accounting Standards Codification ("ASC") Topic 326, the “expected credit loss” model

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

variable consideration.

Under the guidance found in Accounting Standards Codification ("ASC") Topic 326, the “expected credit loss” model replaces the previous incurred loss model and requires consideration of a broader range of information to estimate expected credit losses over the lives of the Company’s trade accounts receivable.

The Company’s prior methodology for estimating credit losses on its trade accounts receivable did not differ significantly from the new requirements of Topic 326.

replaces the previous incurred loss model and requires consideration of a broader range of information to estimate expected credit losses over the lives of the Company’s trade accounts receivable.

The Company maintains an allowance for credit losses related to its trade accounts receivable for future expected credit losses for the inability of its customers to make required payments.

1 unchanged sentence

The allowance is adjusted to reflect changes in current and forecasted macroeconomic conditions.

The Company’s estimate of credit losses includes expected current and future economic and market conditions surrounding the COVID-19 pandemic, which did not significantly impact its allowance.

The Company’s estimate of credit losses includes expected current and future economic and market conditions.

See Note 5 – Allowance for Credit Losses and Customer Allowances .

12 unchanged sentences

Impairment, if any, is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

There were no impairment losses recorded in fiscal years 2020, 2021 or 2022.

The Company recognized impairment losses on certain intangible assets of $ 11.5 million in fiscal 2023 and there were no impairment losses recorded in fiscal 2021 and 2022.

Should market conditions or the assumptions used by the Company in determining the fair value of assets change, or management changes plans regarding the future use of certain assets, additional charges to operations may be required in the period in which such conditions occur.

5 unchanged sentences

See Note 8 – Goodwill .

Investments – The Company owns membership interests ranging from 3 % to 50 % in thirteen unconsolidated companies.

Investments – The Company owns membership interests ranging from 3 % to 50 % in fifteen unconsolidated companies.

The Company accounts for its interest in these entities using the equity method and in accordance with ASC 321 – Investments – Equity Securities.

Equity method income of $ 0.8 million in fiscal 2022 and equity method losses of $ 1.4 million in fiscal 2021 and $ 3.9 million in fiscal 2020 are included in other income (expense) in the consolidated statements of operations.

Equity method losses of $ 0.2 million in fiscal 2023, equity method income of $ 0.8 million in fiscal 2022 and equity method losses of $ 1.4 million in fiscal 2021 are included in other income (expense) in the consolidated statements of operations.

The Company’s investment in these entities was $ 38.7 million at September 30, 2023 and $ 38.5 million at September 24, 2022 and is included in Other assets in the Company's consolidated balance sheets.

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The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

As the Company's leases typically do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability using its

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

incremental borrowing rate at the lease commencement date based on the lease term on a collateralized basis.

As the Company's leases typically do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability using its incremental borrowing rate at the lease commencement date based on the lease term on a collateralized basis.

Variable lease payments are expensed as incurred and include certain non-lease components, such as maintenance and other services provided by the lessor, and other charges included in the lease, as applicable.

Non-lease components and the lease components to which they relate are accounted for as a single lease component, as the Company has elected to combine lease and non-lease components for all classes of underlying assets.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amortization of ROU lease assets is calculated on a straight-line basis over the lease term with the expense recorded in cost of sales or selling, general and administrative expenses, depending on the nature of the leased item.

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Accounting Pronouncements Recently Adopted

Accounting for Income Taxes

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740) , Simplifying the Accounting for Income Taxes , which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences.

This guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

ASU 2019-12 was effective for the Company as of September 26, 2021, and the adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.

There are no recent accounting pronouncements that are anticipated to have a material impact on the Company's consolidated financial statements.

Fair Value Measurements

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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).

3 unchanged sentences

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 September 30, 2023:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Level 1 Level 2 Level 3 Total

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The liability for contingent consideration relates to future performance-based contingent payments for Hydro-Organics Wholesale, Inc., acquired in October 2015.

The performance period related to Hydro-Organics Wholesale extends through fiscal year 2025.

The performance period related to Hydro-Organics Wholesale extends through fiscal 2025.

The fair value of the estimated 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.

9 unchanged sentences

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.

There were no impairment losses recorded in fiscal 2022 or fiscal 2021.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As a result of market changes and declining sales, factors indicating the carrying value of certain amortizable intangible assets may not be recoverable were present in fiscal 2023.

The Company performed impairment testing on these assets, found the carrying value was not recoverable, and accordingly, recorded impairment charges of approximately $ 7.5 million and $ 3.9 million in its Pet and Garden segments, respectively, as part of selling, general and administrative expenses in the consolidated statements of operations for the fiscal year ended September 30, 2023.

There were no impairment losses recorded in fiscal 2022 or 2021.

Fair Value of Other Financial Instruments

5 unchanged sentences

The estimated fair value of the Company's 2028 Notes as of September 30, 2023 and September 24, 2022 was $ 279.5 million and $ 272.2 million, respectively, compared to a carrying value of $ 298.0 million and $ 297.5 million, respectively.

In November 2020, the Company redeemed $ 400 million aggregate principal amount of 6.125 % senior notes due November 2023 (the “2023 Notes”) at a price of 101.531 %.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The estimated fair value is based on quoted market prices for these notes, which are Level 1 inputs within the fair value hierarchy.

1 unchanged sentence

The Company did not make any acquisitions in fiscal 2023.

The Company did not make any acquisitions in fiscal 2022.

During the second quarter and fourth quarter of fiscal 2022, the Company finalized the allocation of the purchase price to the fair values of the tangible assets, intangible assets and liabilities acquired for its acquisitions of Green Garden Products and D&D Commodities Limited, respectively.

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The impact to the consolidated statement of operations associated with the finalization of purchase accounting and true-up of intangible asset amortization for Green Garden Products was immaterial.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

D&D Commodities Limited

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The financial results of D&D have been included in the results of operations within the Garden segment since the date of acquisition.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amounts Previously Recognized as of Acquisition Date (1) Measurement Period Adjustments Amounts Recognized as of Acquisition Date (as Adjusted)

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(1) As previously reported in the Company's Form 10-Q for the period ended June 26, 2021.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The impact to the consolidated statement of operations associated with the finalization of purchase accounting and true-up of intangible assets for DoMyOwn was immaterial.

3 unchanged sentences

Financial results of Hopewell Nursery have been included in the results of operations within the Garden segment since the date of acquisition.

The following table summarizes the purchase price and recording of fair values of the assets acquired and liabilities assumed as of the acquisition date and subsequent adjustments.

The following table summarizes the purchase price and recording of fair

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

values of the assets acquired and liabilities assumed as of the acquisition date and subsequent adjustments.

Amounts Previously Recognized as of Acquisition Date (1) Measurement Period Adjustments Amounts Recognized as of Acquisition Date (as Adjusted)

22 unchanged sentences

Diluted net income per share attributable to Central Garden & Pet Company $ 3.18 $ 2.67

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

This pro forma information is based on historical results of operations, adjusted for the preliminary estimated allocation of the purchase price and other acquisition adjustments.

1 unchanged sentence

The pro forma adjustments reflect the income statement effects of the elimination of intercompany sales and profit, amortization of intangible assets related to the fair value adjustments of the assets acquired, elimination of interest expense on Green Garden Products debt that was paid off at the time of acquisition, incremental interest expense directly resulting from the acquisition and the related tax effects.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

D&D Commodities Limited

1 unchanged sentence

The Company includes the unallocated purchase price for acquisitions in other assets on its consolidated balance sheet.

Sale of Garden Segment Independent Distribution Business

In the fourth quarter of fiscal 2023, the Company sold their independent garden center distribution business for approximately $ 20 million for inventory and the related customer data.

Associated with the sale, the Company is closing one facility and part of another facility due to excess space previously dedicated to serving the independent garden channel.

As a result of these closures, the Company recorded a gain of $ 5.8 million which is net of the inventory sold, inventory transport costs and the associated facility closure costs, including severance.

The gain was recorded as part of selling, general and administrative expenses.

Breeder's Choice

3 unchanged sentences

The Company recognized a loss on the sale of the Breeder's Choice business unit of approximately $ 2.6 million during the three months ended December 26, 2020 as part of selling, general and administrative expenses in the Company's condensed consolidated statement of operations.

The Company did no t make any acquisitions in fiscal 2020.

During fiscal 2023, the Company converted a SAFE note totaling $ 0.9 million into shares, acquiring a 6 % interest, which is accounted for in accordance with ASC 321.

During fiscal 2022, the Company made investments totaling $ 26.1 million, maintaining its 7 % interest in a venture and acquiring a 10 % interest in another venture, both of which are accounted for in accordance with ASC 321.

During fiscal 2021, the Company made an investment of $ 0.5 million for a 3 % ownership interest in one venture, which is accounted for in accordance with ASC 321 .

During fiscal 2020, the Company made investments ranging from an additional 3 % to 30 %, totaling $ 4.4 million, in two ventures, which are accounted for in accordance with ASC 321.

Concentration of Credit Risk and Significant Customers and Suppliers

2 unchanged sentences

The Company’s second largest customer in 2023 accounted for approximately 16 % of the Company’s net sales in fiscal 2023, 16 % of the Company's net sales in fiscal 2022 and 15 % in fiscal 2021.

The Company’s third largest customer in 2022 accounted for approximately 8 % of the Company’s net sales in fiscal 2022, 9 % in fiscal 2021 and 10 % in fiscal 2020, respectively.

The Company’s third largest customer in 2023 accounted for approximately 8 % of the Company’s net sales in fiscal 2023, 8 % in fiscal 2022 and 9 % in fiscal 2021.

The loss of, or significant adverse change in, the relationship between the Company and any of these three customers could have a material adverse effect on the Company’s business and financial results.

The loss of or reduction in orders from any significant customer, losses arising from customer disputes regarding shipments, fees, merchandise condition or related matters, or the Company’s inability to collect accounts receivable from any major customer could also have a material adverse impact on the Company’s business and financial results.

As of September 24, 2022 and September 25, 2021, accounts receivable from the Company’s top five customers comprised approximately 51 % and 50 %, respectively, of the Company’s total accounts receivable, including 13 % and 17 % from the Company’s largest customer.

As of September 30, 2023 and September 24, 2022, accounts receivable from the Company’s top five customers comprised approximately 51 % for both years of the Company’s total accounts receivable, including 11 % and 13 %, respectively, from the Company’s largest customer.

Supplier Concentration – While the Company purchases products from many different manufacturers and suppliers, approximately 5 %, 7 % and 8 % of the Company’s cost of goods sold in fiscal years 2023, 2022 and 2021, respectively, were derived from products purchased from the Company’s five largest suppliers.

8 unchanged sentences

The allowance is adjusted to reflect differences in current conditions as well as changes in forecasted macroeconomic conditions.

The Company’s estimate of credit losses includes expected current and future economic and market conditions surrounding the COVID-19 pandemic, which did not significantly impact its allowance.

The Company’s estimate of credit losses includes expected current and future economic and market conditions.

The following provides a reconciliation of the activity in the Allowance for Credit Losses and Customer Allowances:

76 unchanged sentences

The valuations employ present value techniques to measure fair value and consider market factors.

In connection with the Company’s annual goodwill impairment testing performed during fiscal 2022 and 2021, the Company made a qualitative evaluation about the likelihood of goodwill impairment to determine whether it was necessary to calculate the fair values of its reporting units under the goodwill impairment test.

The Company completed its qualitative assessment of potential goodwill impairment in each fiscal year, and it was determined that it was more likely than not the fair values of the Company's reporting units were greater than their carrying amounts in each fiscal year, and accordingly, no further testing of goodwill was required in fiscal 2022 and 2021.

In connection with the Company's annual goodwill impairment testing performed during fiscal 2023, the Company elected to bypass the qualitative assessment and proceeded directly to performing the quantitative goodwill impairment test.

The Company completed its quantitative assessment of potential goodwill and determined that it was more likely than not the fair values of the Company's reporting units were greater than their carrying amounts.

In connection with the Company’s annual goodwill impairment testing performed during fiscal 2022, the Company made a qualitative evaluation about the likelihood of goodwill impairment to determine whether it was necessary to calculate the fair values of its reporting units under the goodwill impairment test.

The Company completed its qualitative assessment of potential goodwill impairment and determined that it was more likely than not the fair values of the Company's reporting units were greater than their carrying amount in fiscal year 2022, and accordingly, no further testing of goodwill was required in fiscal 2022.

CENTRAL GARDEN & PET COMPANY

34 unchanged sentences

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

As part of its acquisition of DoMyOwn in the first quarter of fiscal 2021 and Hopewell Nursery in the second quarter of fiscal 2021, the Company acquired approximately $ 1.5 million of marketing related intangible assets, $ 3.3 million of customer related intangible assets and $ 11.2 million of other intangible assets.

As part of its acquisition of Green Garden Products in the second quarter of fiscal 2021 and D&D Commodities in the fourth quarter of fiscal 2021, the Company acquired $ 181.9 million of marketing related intangible assets, $ 272.8 million of customer related intangible assets and $ 2.5 million of other intangible assets.

As part of its acquisitions of DoMyOwn and Hopewell Nursery in fiscal 2021, the Company acquired approximately $ 1.5 million of marketing related intangible assets, $ 3.3 million of customer related intangible assets and $ 11.2 million of other intangible assets.

As part of its acquisitions of Green Garden Products and D&D Commodities in fiscal 2021, the Company acquired $ 181.9 million of marketing related intangible assets, $ 272.8 million of customer related intangible assets and $ 2.5 million of other intangible assets.

The allocation of the purchase price to the acquired intangible assets of Green Garden Products and D&D Commodities was finalized during fiscal 2022.

2 unchanged sentences

The Company evaluates indefinite-lived intangible assets on an annual basis.

Factors indicating the carrying value of the Company's amortizable intangible assets may not be recoverable were not present in fiscal 2020, 2021 or 2022, and accordingly, no impairment testing was performed on these assets.

The Company is currently amortizing its acquired intangible assets with definite lives over periods ranging from two years to 25 years;

over weighted-average remaining lives of two years for marketing-related intangibles, twelve years for customer-related intangibles and six

As a result of market changes and declining sales, factors indicating the carrying value of certain amortizable intangible assets may not be recoverable were present in fiscal 2023.

Factors indicating the carrying value of the Company's amortizable and indefinite-lived intangible

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

years for other acquired intangibles.

Amortization expense for intangibles subject to amortization was approximately $ 35.1 million, $ 16.5 million and $ 14.0 million, for fiscal 2022, 2021 and 2020, respectively, and is classified within operating expenses in the consolidated statements of operations.

assets may not be recoverable were not present in fiscal 2021 or 2022, and accordingly, no impairment testing was performed on these assets.

The Company is currently amortizing its acquired intangible assets with definite lives over periods ranging from two years to 25 years;

over weighted-average remaining lives of one year for marketing-related intangibles, eleven years for customer-related intangibles and five years for other acquired intangibles.

Amortization expense for intangibles subject to amortization was approximately $ 34.5 million, $ 35.1 million and $ 16.5 million, for fiscal 2023, 2022 and 2021, respectively, and is classified within selling, general and administrative expenses in the consolidated statements of operations.

Annual amortization expense related to acquired intangible assets in each of the succeeding five years is estimated to be approximately $ 29 million per year from fiscal 2024 through fiscal 2026, and $ 25 million per year from fiscal 2027 through fiscal 2028.

41 unchanged sentences

Operating cash flows from operating leases $ 50.1 $ 45.1

Operating cash flows from finance leases $ — $ —

Financing cash flows from finance leases $ — $ 0.1

33 unchanged sentences

Net carrying value 1,187,769 1,185,884

Asset-based revolving credit facility, interest at LIBOR plus a margin of 1.00 % to 1.50 % or Base Rate plus a margin of 0.0 % to 0.50 %, final maturity December 2026

Asset-based revolving credit facility, interest at SOFR plus a margin of 1.00 % to 1.50 % or Base Rate plus a margin of 0.0 % to 0.50 %, final maturity December 2026

Other notes payable 434 678

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Issuance of $ 500 million 4.125 % Senior Notes due 2030

On October 16, 2020, the Company issued $ 500 million aggregate principal amount of 4.125 % senior notes due October 2030 (the "2030 Notes").

In October 2020, the Company issued $ 500 million aggregate principal amount of 4.125 % senior notes due October 2030 (the "2030 Notes").

In November 2020, the Company used a portion of the net proceeds to redeem all of its outstanding 6.125 % senior notes due November 2023 (the "2023 Notes") at a redemption price of 101.531 % plus accrued and unpaid interest, and to pay related fees and expenses, with the remainder used for general corporate purposes.

1 unchanged sentence

The debt issuance costs are being amortized over the term of the 2030 Notes.

The 2030 Notes require semiannual interest payments on October 15 and April 15.

The 2030 Notes are unconditionally guaranteed on a senior basis by each of the Company's existing and future domestic restricted subsidiaries which are borrowers under or guarantors of Central's Amended Credit Facility.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As a result of the Company's redemption of the 2023 Notes, the Company incurred a call premium payment of $ 6.1 million, overlapping interest expense for 30 days of approximately $ 1.4 million and a $ 2.5 million non-cash charge for the write-off of unamortized deferred financing costs related to the 2023 Notes.

These amounts are included in interest expense in the consolidated statements of operations.

The 2030 Notes require semiannual interest payments on October 15 and April 15.

The Company may redeem some or all of the 2030 Notes at anytime, at its option, prior to October 15, 2025 at a price equal to 100 % of the principal amount plus a “make-whole” premium.

Prior to October 15, 2023, the Company may redeem up to 40 % of the original aggregate principal amount of the notes with the proceeds of certain equity offerings at a redemption price of 104.125 % of the principal amount of the notes.

The Company may redeem some or all of the 2030 Notes, at its option, in whole or in part, at any time on or after October 15, 2025 for 102.063 %, on or after October 15, 2026 for 101.375 %, on or after October 15, 2027 for 100.688 % and on or after October 15, 2028 for 100.0 %, plus accrued and unpaid interest.

8 unchanged sentences

The 2028 Notes require semiannual interest payments on February 1 and August 1.

The 2028 Notes are unconditionally guaranteed on a senior basis by the Company's existing and future domestic restricted subsidiaries who are borrowers under or guarantors of Central's senior secured revolving credit facility or who guarantee the 2023 Notes.

The Company may redeem some or all of the 2028 Notes at anytime, at its option, prior to January 1, 2023 at the principal amount plus a “make whole” premium.

The Company may redeem some or all of the 2028 Notes, at its option, at any time on or after January 1, 2023 for 102.563 %, on or after January 1, 2024 for 101.708 %, on or after January 1, 2025 for 100.854 %, and on or after January 1, 2026 for 100.0 %, plus accrued and unpaid interest.

8 unchanged sentences

The Amended Credit Facility is subject to a borrowing base that is calculated using a formula based upon eligible receivables and inventory, and at the Company's election, eligible real property, minus certain reserves.

The Company did not draw down any commitments under the Amended Credit Facility upon closing.

Proceeds of the Amended Credit Facility will be used for general corporate purposes.

Net availability under the Amended Credit Facility was approximately $ 493 million as of September 30, 2023.

The Amended Credit Facility includes a $ 50 million sublimit for the issuance of standby letters of credit and a $ 75 million sublimit for short-notice borrowings.

The Amended Credit Facility includes a $ 50 million sublimit for the issuance of standby letters of credit and a $ 75 million sublimit for Swing Loan borrowings.

As of September 30, 2023, there were no borrowings outstanding and no letters of credit outstanding under the Amended Credit Facility.

Outside of the Amended Credit Facility, there were other standby and commercial letters of credit of $ 1.3 million outstanding as of September 30, 2023.

Borrowings under the Amended Credit Facility will bear interest at an index based on SOFR (which will not be less than 0.00 %) or, at the option of the Company, the Base Rate, plus, in either case, an applicable margin based on the Company's usage under the credit facility.

Base Rate is defined as the highest of (a) the Truist prime rate, (b) the Federal Funds Rate plus 0.50 %, (c) one-month SOFR plus 1.00 % and (d) 0.00 %.

The applicable margin for SOFR-based borrowings fluctuates between 1.00 %- 1.50 %, and was 1.0 % as of September 30, 2023, and the applicable margin for Base Rate borrowings fluctuates between 0.00 %- 0.50 %, and was 0.00 % as of September 30, 2023.

An unused line fee shall be payable quarterly in respect of the total amount of the unutilized Lenders’ commitments under the Amended Credit Facility.

Standby letter of credit fees accruing at the applicable margin on the average undrawn and unreimbursed amount of standby letters of credit are payable quarterly, and a facing fee of 0.125 % is payable quarterly for the stated amount of each letter of credit.

The Company is also required to pay certain fees to the administrative agent under the Amended Credit Facility.

The Amended Credit Facility was amended on

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 24, 2022, there were no borrowings outstanding and no letters of credit outstanding under the Amended Credit Facility.

Outside of the Amended Credit Facility, there were other letters of credit of $ 1.3 million outstanding as of September 24, 2022.

Borrowings under the Amended Credit Facility will bear interest at an index based on LIBOR (which will not be less than 0.00 %) or, at the option of the Company, the Base Rate, plus, in either case, an applicable margin based on the Company's usage under the credit facility.

Base Rate is defined as the highest of (a) the Truist prime rate, (b) the Federal Funds Rate plus 0.50 %, (c) one-month LIBOR plus 1.00 % and (d) 0.00 %.

The applicable margin for LIBOR-based borrowings fluctuates between 1.00 %- 1.50 %, and was 1.0 % as of September 24, 2022, and the applicable margin for Base Rate borrowings fluctuates between 0.00 %- 0.50 %, and was 0.00 % as of September 24, 2022.

An unused line fee shall be payable quarterly in respect of the total amount of the unutilized Lenders’ commitments and short-notice borrowings under the Amended Credit Facility.

Letter of credit fees at the applicable margin on the average undrawn and unreimbursed amount of letters of credit shall be payable quarterly and a facing fee of 0.125 % shall be payable quarterly for the stated amount of each letter of credit.

The Company is also required to pay certain fees to the administrative agent under the Amended Credit Facility.

The Amended Credit Facility provides for the transition from LIBOR to Secured Overnight Financing Rate ("SOFR") and does not require an amendment in connection with such transition.

As of September 24, 2022, the applicable interest rate related to Base Rate borrowings was 6.3 %, and the applicable interest rate related to one-month LIBOR-based borrowings was 4.1 %.

The Company incurred approximately $ 2.4 million of debt issuance costs in conjunction with this transaction, which included lender fees and legal expenses.

May 15, 2023 to transition from LIBOR to SOFR.

As of September 30, 2023, the applicable interest rate related to Base Rate borrowings was 8.5 %, and the applicable interest rate related to one-month SOFR-based borrowings was 6.3 %.

The Company incurred approximately $ 2.4 million of debt issuance costs in conjunction with the Amended Credit Agreement, which included lender fees and legal expenses.

The debt issuance costs are being amortized over the term of the Amended Credit Facility.

7 unchanged sentences

Total $ 1,200,674 (1)

(1) Debt repayments do not reflect the unamortized portion of deferred financing costs associated with the 2028 Notes, 2030 Notes and 2031 Notes of approximately $ 14.1 million as of September 24, 2022, of which, $ 2.5 million is amortizable until February 2028, $ 6.4 million is amortizable until October 2030 and $ 5.2 million is amortizable until April 2031, and is included in the carrying value.

(1) Debt repayments do not reflect the unamortized portion of deferred financing costs associated with the 2028 Notes, 2030 Notes and 2031 Notes of approximately $ 12.2 million as of September 30, 2023, of which, $ 2.0 million is amortizable until February 2028, $ 5.6 million is amortizable until October 2030 and $ 4.6 million is amortizable until April 2031, and are included in the carrying value.

Commitments and Contingencies

6 unchanged sentences

For certain agreements, management estimates are used to develop the quantities and pricing for anticipated purchases, and future purchases could vary significantly from such estimates.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Contingencies

7 unchanged sentences

On July 14, 2021, the Federal Circuit Court of Appeals issued its decision on the appeal.

The Federal Circuit concluded that the Company did not infringe plaintiff's patent and determined that the breach of contract claim raised no non-duplicative damages and should be dismissed.

The Federal Circuit concluded that the Company did not infringe plaintiff's patent and determined that the breach of contract claim raised no non-duplicative damages and should be

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The court affirmed the jury's liability verdict on the misappropriation of confidential information claim but ordered a new trial on damages on that single claim limited to the "head start" benefit, if any, generated by the confidential information.

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While the Company believes that the ultimate resolution of this matter will not have a material impact on the Company's consolidated financial statements, the outcome of litigation is inherently uncertain and the final resolution of this matter may result in expense to the Company in excess of management's expectations.

During fiscal 2013, the Company received notices from several states stating that they have appointed an agent to conduct an examination of the books and records of the Company to determine whether it has complied with state unclaimed property laws.

In addition to seeking unclaimed property subject to escheat laws, the states may seek interest, penalties and other relief.

The examinations are continuing, and the ultimate resolution and impact on the Company's consolidated financial statements is uncertain.

The Company has experienced, and may in the future experience, issues with products that may lead to product liability, recalls, withdrawals, replacements of products, or regulatory actions by governmental authorities.

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The Company has a Nonemployee Director Equity Incentive Plan (the “Director Plan”) which provides for the grant of options and restricted stock to nonemployee directors of the Company.

The Director Plan, as amended, provides for the granting to each independent director of options to purchase a number of shares equal to $ 200,000 divided by the fair market value of the Company’s common stock on the date of each annual meeting of stockholders and a number of shares of restricted stock equal to $ 70,000 divided by such fair market value.

As of September 24, 2022, there were approximately 3.9 million shares of Class A Common Stock and no shares of Common Stock and Preferred Stock reserved for outstanding equity awards, and there were approximately 4.6 million shares of Common Stock, 9.5 million shares of Class A Common Stock and 0.5 million shares of Preferred Stock remaining for future awards.

Stock Option Awards

The Director Plan, as amended, provides for the granting to each independent director a number of shares of restricted stock equal to $ 120,000 divided by such fair market value.

As of September 30, 2023, there were approximately 3.5 million shares of Class A Common Stock and no shares of Common Stock and Preferred Stock reserved for outstanding equity awards, and there were approximately 4.6 million shares of Common Stock, 9.6 million shares of Class A Common Stock and 0.5 million shares of Preferred Stock remaining for future awards on the date of each annual meeting of stockholders.

In fiscal 2023, no shares were granted from the Director Plan and each independent director was granted restricted shares from the 2003 Plan.

The Company recognized stock-based compensation expense of $ 28.0 million, $ 25.8 million, and $ 23.1 million for the fiscal years ended September 30, 2023, September 24, 2022 and September 25, 2021, respectively, as a component of selling, general and administrative expenses.

Share-based compensation expense in fiscal 2023, 2022 and 2021 consisted of $ 3.8 million, $ 4.9 million, and $ 5.6 million, respectively, for stock options, and $ 16.3 million, $ 13.7 million and $ 10.7 million, respectively, for stock awards.

Share-based compensation expense in fiscal 2023, 2022 and 2021 also includes $ 7.9 million, $ 7.2 million and $ 6.8 million, respectively, for the Company’s 401(k) matching contributions.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

compensation expense in fiscal 2022, 2021 and 2020 also includes $ 7.2 million, $ 6.8 million and $ 6.4 million, respectively, for the Company’s 401(k) matching contributions.

During fiscal 2022, the Company granted time-based stock options with an exercise price based on the closing fair market value on the date of the grant.

The majority of the options granted in fiscal 2022 vest in four annual installments commencing approximately one year from the date of grant and expire approximately six years after the grant date.

Stock Option Awards

During fiscal 2023, the Company granted time-based stock options with an exercise price 15 % above the market price on the date of the grant.

The options granted in fiscal 2023 vest in three annual installments commencing approximately five years from the date of grant and expire approximately 10 years after the grant date.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model.

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The Company’s calculations were made using the Black-Scholes option pricing model with the following weighted average assumptions:

expected life from the date of grant 3.7 years in fiscal 2022, 2021 and 2020;

expected life from the date of grant 8 years in fiscal 2023 and 3.7 years in 2022 and 2021;

stock price volatility, 30.6 % in fiscal 2023, 31.1 % in fiscal 2022, and 32.4 % in fiscal 2021;

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The following table summarizes option activity for the period ended September 30, 2023:

(in thousands)

(in thousands) Weighted

Average Exercise

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Expected to vest after September 30, 2023 492 $ 36.30 3 years $ 2,837

The prices of options to purchase shares of common stock and Class A common stock outstanding at September 24, 2022, September 25, 2021 and September 26, 2020 were between $ 21.37 to $ 51.37 per share, $ 13.82 to $ 51.37 per share and $ 10.63 to $ 38.10 per share, respectively.

The prices of options to purchase shares of Class A common stock outstanding at September 30, 2023, September 24, 2022 and September 25, 2021 were between $ 25.79 to $ 51.37 per share, $ 21.37 to $ 51.37 per share and $ 13.82 to $ 51.37 per share, respectively.

The weighted average grant date fair value of options granted during the fiscal years ended September 30, 2023, September 24, 2022 and September 25, 2021 was $ 15.37 , $ 10.96 and $ 10.50 , respectively.

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Restricted Stock Awards

As of both September 24, 2022 and September 25, 2021, there were approximately 1.7 million shares of restricted stock awards outstanding.

As of September 30, 2023 and September 24, 2022, there were approximately 1.5 million and 1.7 million shares, respectively, of restricted stock awards outstanding.

Awards granted in fiscal 2023 and 2022 generally vest within four or five years from the date of grant.

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As of September 30, 2023, there was $ 31.0 million of unrecognized compensation cost related to nonvested restricted stock awards, which is expected to be recognized over a weighted average period of three years .

In fiscal 2022, the Company granted a combination of performance stock units (PSU’s) and restricted stock awards under its long-term incentive program, which replaced the option or restricted stock awards historically granted annually under the Company’s long-term incentive plan.

In fiscal 2023 and fiscal 2022, the Company granted a combination of performance stock units (PSU’s) and restricted stock awards under its long-term incentive program, which replaced the option or restricted stock awards historically granted annually under the Company’s long-term incentive plan.

The impact of granting PSU’s during fiscal year 2023 was not material to the Company’s Consolidated Financial Statements.

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The preferences and relative rights of the Class A common stock are identical to common stock in all respects, except that the Class A common stock generally has no voting rights unless otherwise required by Delaware law.

There are 3,000,000 shares of Class B stock ($ 0.01 par value) authorized, of which 1,612,374 were outstanding at September 24, 2022 and September 25, 2021.

There are 3,000,000 shares of Class B stock ($ 0.01 par value) authorized, of which 1,602,374 and 1,612,374 , respectively, were outstanding at September 30, 2023 and September 24, 2022.

The voting powers, preferences and relative rights of the Class B stock are identical to common stock in all respects except that (i) the holders of common stock are entitled to one vote per share and the holders of Class B stock are entitled to the lesser of ten votes per share or 49 % of the total votes cast, (ii) stock dividends on common stock may be paid only in shares of common stock and stock dividends on Class B stock may be paid only in shares of Class B stock and (iii) shares of Class B stock have certain conversion rights and are subject to certain restrictions on ownership and transfer.

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As of September 30, 2023, the Company had $ 83.2 million remaining under its 2019 Repurchase Authorization.

During fiscal 2022, the Company repurchased approximately 1.4 million shares of its non-voting common stock (CENTA) on the open market at an aggregate cost of approximately $ 56.2 million, or $ 40.79 per share, and approximately 39,000 shares of its voting common stock (CENT) on the open market at an aggregate cost of approximately $ 1.6 million, or $ 39.72 per share.

During fiscal 2023, the Company repurchased approximately 0.6 million shares of its non-voting common stock (CENTA) on the open market at an aggregate cost of approximately $ 22.2 million, or $ 35.31 per share, and approximately 0.2 million shares of its voting common stock (CENT) on the open market at an aggregate cost of approximately $ 8.5 million, or $ 37.31 per share.

In February 2019, the Board of Directors authorized the Company to make supplemental purchases to minimize dilution resulting from issuances under its equity compensation plans (the "Equity Dilution Authorization").

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The Equity Dilution Authorization has no fixed expiration date and expires when the Board withdraws its authorization.

As of September 24, 2022, the Company had authorization remaining from the fiscal 2022 equity plan activity to repurchase up to 0.1 million shares under its Equity Dilution Authorization.

As of September 30, 2023, the Company did not have any shares remaining from the fiscal 2023 equity plan activity to repurchase shares under its Equity Dilution Authorization.

CENTRAL GARDEN & PET COMPANY

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Restricted shares 638 ( 0.03 ) 728 ( 0.04 ) 689 ( 0.03 )

Performance stock units 99 — — — — —

Net income available to common shareholders $ 125,643 53,427 $ 2.35 $ 152,152 54,425 $ 2.80 $ 151,746 55,248 $ 2.75

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Noncontrolling interest is associated with the Garden segment.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Subsequent Events

Acquisition of TDBBS

On November 3, 2023, the Company acquired TDBBS, LLC (“TDBBS”), a provider of premium natural dog chews and treats for approximately $ 60 million.

The addition of TDBBS will expand Central’s portfolio with bully and collagen sticks, bones and jerky, add scale to our dog and cat business and enhance Central’s eCommerce and digital capabilities .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures