What changed in this filing

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Item 9A. Controls and Procedures

2024-11-27 compared with 2023-11-28 · 267 added, 292 removed, 1045 unchanged (35% of the section changed)

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures .

Evaluation of Disclosure Controls and Procedures

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.

Based upon this review, such officers concluded that our disclosure controls and procedures were effective as of September 28, 2024.

Remediation of Previously Disclosed Material Weaknesses

We previously identified and disclosed in our Form 10-K for the fiscal year ended September 30, 2023, as well as in our Quarterly Report on Form 10-Q filed for the quarters ended December 30, 2023, March 30, 2024, and June 29, 2024, material weaknesses in our internal controls over financial reporting.

The material weaknesses identified related to (1) certain information technology general computer controls ("ITGC’s") at our Live Plant 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 Plant business.

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 .

As of September 28, 2024, we have completed our remediation activities including testing of the design and concluding on the operating effectiveness of the related controls.

The remediation activities included, but are not limited to:

• Instituted a ITGC material weakness remediation team;

• Implemented defined standards & control processes;

• Enhanced the training of personnel on the design and operation of our internal controls over financial reporting;

• Developed monitoring controls and protocols allowing us to timely assess the design and operating effectiveness of the new and redesigned controls;

• Hired an additional resource with an appropriate level of knowledge and experience;

• Expanded and formalized controls related to recording revenue from an outsourced service provider that supports certain of the Company's revenue processes for our Live Plant business.

Based upon the above, we believe the steps taken have improved the effectiveness of our internal control over financial reporting and we have determined that these new or redesigned controls are operating effectively.

Changes in 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 2024.

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.

Based on that evaluation, management concluded that other than the improvements to our internal control over financial reporting to remediate the material weaknesses discussed above, there have been no other changes in our internal control over financial reporting that occurred during the fourth quarter of fiscal 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

A copy of our management’s report and the report of Deloitte & Touche LLP, our independent registered public accounting firm, are included in our Financial Statements and Supplementary Data beginning on page F-1.

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.

During the quarter ended September 28, 2024, 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, except as described in the table below:

Name & Title Date Adopted Character of Trading Arrangement 1

Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement Duration 2

Other Material Terms Date Terminated

Pennington III , Director

8/29/2024 Rule 10b5-1

Arrangement Up to 27,789

shares of CENTA

2/10/2025 through 5/14/2027

1 Except as indicated by footnote, each trading arrangement marked as a "Rule 10b5-1 Trading Arrangement" is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended (the "Rule").

2 The Rule 10b5-1 Trading Arrangements permit transactions through and including the earlier to occur of (a) the completion of all purchases or sales or (b) the date listed in the table.

The Rule 10b5-1 Trading Arrangements only permit transactions upon expiration of the applicable mandatory cooling-off period under the Rule.

The Rule 10b5-1 Trading Arrangements also provide for automatic expiration in the event of certain events, including written notice of death or legal incapacity, filing of a bankruptcy petition, upon transfer of the securities account to another broker-dealer;

the closing of a merger, recapitalization, consolidation or similar transaction, or the termination of the Rule 10b5-1 Trading Arrangement by the executive.

3 Includes options to purchase 20,446 shares of CENTA of which only the amount of net shares issued after withholding shares to cover the exercise price and tax withholding will be sold.

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 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.

The remaining information required by this item is incorporated by reference from Central’s Definitive Proxy Statement for its 2025 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,” “Code of Ethics,” and "Restrictions on Transactions in Company Stock by Directors and Officers." See also Item 1 – Business above.

Executive Compensation

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Management’s Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

Consolidated Statements of Shareholders’ Equity

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Herewith Furnished, Not Filed

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

8-K 001-33268 2.1 2/17/2021

Amendment No.

1, dated April 27, 2021, to Agreement and Plan of Merger between Central Garden & Pet Company and Flora Parent, Inc.

10-Q 001-33268 2.1 8/5/2021

Amendment No.

2, dated June 17, 2021, to Agreement and Plan of Merger between Central Garden & Pet Company and Flora Parent, Inc.

10-Q 001-33268 2.2 8/5/2021

Amendment No.

3, dated June 23, 2021, to Agreement and Plan of Merger between Central Garden & Pet Company and Flora Parent, Inc .

10-Q 001-33268 2.3 8/5/2021

Fourth Amended and Restated Certificate of Incorporation

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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.

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10-Q 001-33268 4.1 5/4/2023

Fifteenth Supplemental Indenture (this “Supplemental Indenture”), dated effective as of February 7, 2024, by (i) BRP Hold Nightingale, LLC, a Delaware limited liability company, (ii) BRP Hold Ox, LLC, a Delaware limited liability company, and (iii) TDBBS, LLC, a Delaware limited liability company (each of (i)-(iii), a “Subsidiary Guarantor” and, collectively, the “Subsidiary Guarantors”), each Subsidiary Guarantor a direct subsidiary of Central Garden & Pet Company, a Delaware corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein), and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee under the indenture referred to below (the “Trustee”)

10-Q 001-33268 4.2 8/8/2024

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.

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10-Q 001-33268 4.2 5/4/2023

Second Supplemental Indenture and Guarantee, dated as of February 7, 2024 among (i) BRP Hold Nightingale, LLC, (ii) BRP Hold Ox, LLC, (iii) TDBBS, LLC, (each of (i)-(iii), each, a “New Guarantor” and, collectively, the “New Guarantors) and Central Garden & Pet Company (together with its successors and assigns, the “Company”) and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as Trustee, paying agent and registrar under such Indenture

10-Q 001-33268 4.1 8/8/2024

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

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

Promotion Letter of Niko Lahanas dated September 26, 2024

Promotion Letter of Bradley Smith dated September 25, 2024

Insider Trading Policy

List of Subsidiaries

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Certification of Principal Financial Officer Pursuant to 18 U.S.C.

Compensation Recovery Policy

101 The following financial statements from the Company's Annual Report on Form 10-K for the year ended September 28, 2024, formatted in Inline XBRL:

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CENTRAL GARDEN & PET COMPANY

By /s/ Mary Beth Springer

Mary Beth Springer

Interim Chief Executive Officer

By /s/ Nicholas Lahanas

Nicholas Lahanas

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

Mary Beth Springer

/s/ Nicholas Lahanas Chief Financial Officer

(Principal Financial Officer) November 28, 2023

/s/ Nicholas Lahanas Chief Executive Officer (Principal Executive Officer) November 27, 2024

Nicholas Lahanas

/s/ Bradley G.

Smith Chief Financial Officer

(Principal Financial Officer) November 27, 2024

/s/ Howard A.

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Brown Chairman November 27, 2024

/s/ Mary Beth Springer Director November 27, 2024

Mary Beth Springer

/s/ Courtnee Chun Director November 27, 2024

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Christopher Metz

/s/ Daniel Myers Director November 28, 2023

/s/ Brooks M.

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Management’s Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Reports of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets, September 28, 2024 and September 30, 2023

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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 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.

The scope of management's assessment of the effectiveness of our internal control over financial reporting included all of our consolidated operations except for the operations of TDBBS, LLC, which we acquired in November 2023 and whose financial statements constitute 1% and 2% of the consolidated total assets and net sales, respectively, as of and for the fiscal year ended September 28, 2024.

This exclusion is in accordance with the SEC's general guidance that an assessment of a recently acquired business may be omitted from our scope in the year of acquisition.

Based upon this assessment, such officers concluded the Company maintained effective internal control over financial reporting as of September 28, 2024.

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-5 of this Form 10-K.

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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”).

We have audited the accompanying consolidated balance sheets of Central Garden & Pet Company and subsidiaries (the "Company") as of September 28, 2024 and September 30, 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the fiscal years ended September 28, 2024, September 30, 2023, and September 24, 2022, 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 28, 2024 and September 30, 2023, and the results of its operations and its cash flows for each of the fiscal years ended September 28, 2024, September 30, 2023, and September 24, 2022, 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.

We have also 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 28, 2024, 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 27, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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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.

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 that respond to those risks.

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

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The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

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.

The communication of the critical audit matter 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.

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

Critical Audit Matter Description

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.

Under consignment arrangements, 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.

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

We identified revenue recognition for this consignment arrangement included in net sales for the fiscal year ended September 28, 2024, 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 revenue recognized for a consignment arrangement included the following, among others:

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

• We tested the effectiveness of controls over recognizing consignment revenue.

• 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 traced the recording of point-of-sale revenue transactions into the Company’s records to test 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.

• We selected a sample of credits issued after the end of the fiscal year 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

San Francisco, CA

San Francisco, California

November 27, 2024

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We have audited the internal control over financial reporting of Central Garden & Pet Company and subsidiaries (the “Company”) as of September 28, 2024, 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.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 28, 2024, 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 fiscal year ended September 28, 2024, of the Company and our report dated November 27, 2024, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting of the acquired operations of TDBBS, LLC, which was acquired on November 3, 2023, and whose financial statements constitute 1% and 2% of the consolidated total assets and net sales, respectively, as of and for the fiscal year ended September 28, 2024.

Accordingly, our audit did not include the internal control over financial reporting at TDBBS, LLC.

Basis for Opinion

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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.

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

San Francisco, California

November 27, 2024

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September 28, 2024 September 30, 2023

(in thousands)

(in thousands, except share and per share amount)

Current assets:

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Commitments and contingencies (Note 12)

Common stock 111 113

Class A common stock 410 413

Class B stock 16 16

Common stock ($ 0.01 par value;

80 million shares authorized;

11,074,620 and 11,077,612 issued at September 28, 2024 and September 30, 2023, respectively)

Class A common stock ($ 0.01 par value;

100 million shares authorized;

54,446,194 and 54,472,902 issued at September 28, 2024 and September 30, 2023, respectively)

Class B stock ($ 0.01 par value;

3 million shares authorized;

1,602,374 and 1,602,374 issued at September 28, 2024 and September 30, 2023, respectively)

Additional paid-in capital 598,098 594,282

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Other comprehensive income (loss):

Foreign currency translation 1,175 ( 3,314 ) 578

Foreign currency adjustment, net of tax 344 1,175 ( 3,314 )

Total comprehensive income 109,657 127,272 149,358

Comprehensive income attributable to noncontrolling interests 454 520 1,027

Comprehensive income attributable to noncontrolling interest 1,330 454 520

Comprehensive income attributable to Central Garden & Pet Company $ 108,327 $ 126,818 $ 148,838

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Repurchase of stock ( 228,739 ) ( 2 ) ( 843,112 ) ( 8 ) — — ( 9,200 ) ( 21,526 ) — ( 30,736 ) — ( 30,736 )

Other comprehensive loss — — — — — — — — ( 3,314 ) ( 3,314 ) — ( 3,314 )

Other comprehensive income — — — — — — — — 1,175 1,175 — 1,175

Net income — — — — — — — 125,643 — 125,643 454 126,097

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Distribution to noncontrolling interest — — — — — — — — — — ( 899 ) ( 899 )

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

Repurchase of stock ( 2,992 ) — ( 336,187 ) ( 3 ) — — ( 3,001 ) ( 7,842 ) — ( 10,846 ) — ( 10,846 )

Other comprehensive loss — — — — — — — — 1,175 1,175 — 1,175

Other comprehensive income — — — — — — — — 344 344 — 344

Net income — — — — — — — 107,983 — 107,983 1,330 109,313

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Debt extinguishment costs — — 169

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

Gain on sale of business — ( 5,845 ) —

Deferred income taxes ( 14,482 ) ( 12,253 ) 28,128

Pet Segment Facility Closures 15,674 — —

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

Asset impairments 750 — —

Facility closures and business exit costs 27,842 15,674 —

Impairment of intangibles 12,790 — —

Other asset impairments 7,462 750 —

Other 906 ( 525 ) ( 648 )

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Operating lease liabilities ( 50,197 ) ( 48,692 ) ( 44,527 )

Net cash (used in) provided by operating activities 381,634 ( 34,030 ) 250,844

Net cash provided by (used in) operating activities 394,892 381,634 ( 34,030 )

Cash flows from investing activities:

Additions to property, plant and equipment ( 43,135 ) ( 53,966 ) ( 115,205 )

Businesses acquired, net of cash acquired — — ( 820,453 )

Business acquired, net of cash acquired ( 60,226 ) — —

Proceeds from sale of business — 20,000 —

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Borrowings on revolving line of credit — 48,000 —

Premium paid on extinguishment of debt — — ( 6,124 )

Repayments of long-term debt ( 370 ) ( 338 ) ( 1,096 )

Issuance of long-term debt — — 900,000

Repurchase of common stock, including shares surrendered for tax withholding ( 24,075 ) ( 37,161 ) ( 62,287 )

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Payment of financing costs — — ( 2,410 )

Net cash (used in) provided by financing activities ( 37,553 ) ( 66,815 ) 420,475

Net cash used in financing activities ( 25,438 ) ( 37,553 ) ( 66,815 )

Effect of exchange rate changes on cash and equivalents 1,261 1,189 ( 3,510 )

Net (decrease) increase in cash, cash equivalents and restricted cash 310,689 ( 247,338 ) ( 226,875 )

Net increase (decrease) in cash, cash equivalents and restricted cash 265,530 310,689 ( 247,338 )

Cash, cash equivalents and restricted cash at beginning of year 502,873 192,184 439,522

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Shares of common stock repurchased but not settled 536 — 911

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

Lease liabilities arising from obtaining right-of-use assets 95,391 42,777 70,794

See notes to consolidated financial statements.

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All intercompany balances and transactions have been eliminated in consolidation.

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.

The fiscal year ended September 28, 2024 included 52 weeks, the fiscal year ended September 30, 2023 included 53 weeks and the fiscal year ended September 24, 2022 included 52 weeks.

Stock Dividend - In December 2023, the Board of Directors approved a stock dividend in the form of one share of the Company's Class A Common Stock for every four outstanding shares of its Common Stock, Class A Common Stock and Class B Stock.

Dividend shares of Class A Common Stock were distributed on February 8, 2024, to stockholders of record as of January 8, 2024.

The stock dividend did not affect the number of the Company's authorized shares and the par value of each share of stock remained unchanged.

Proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock and performance share units outstanding at January 8, 2024, which resulted in a proportional increase in the number of vesting stock options, restricted stock and performance share units, and, in the case of stock options, a proportional decrease in the exercise price of all such stock options.

Unless noted, all Class A Common Stock share and per share amounts contained in the condensed consolidated financial statements and management's discussion and analysis have been retroactively adjusted to reflect the one-for-four stock dividend.

The legal form of the stock dividend was accounted for as a stock split as the Company concluded that shareholders were not receiving a distribution of earnings.

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

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Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Key sales terms are established on a frequent basis such that most customer arrangements and related incentives have a one year or shorter duration.

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therefore, the Company does not have any significant financing components.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Sales Incentives and Other Promotional Programs

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These agreements require the Company to maintain specified amounts of cash as collateral in segregated accounts to support the letters of credit issued thereunder, which will affect the amount of cash the Company has available for other uses.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows as of September 30, 2023, September 24, 2022 and September 25, 2021, respectively (in thousands).

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows as of

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

September 28, 2024, September 30, 2023 and September 24, 2022, respectively (in thousands).

September 28, 2024 September 30, 2023 September 24, 2022

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Total cash, cash equivalents and restricted cash $ 768,403 $ 502,873 $ 192,184

Accounts receivable are carried at their estimated collectible amounts.

Accounts receivable are carried at their estimated net realizable value.

Trade credit is generally extended on a short-term basis;

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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 variable consideration.

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

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

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

Inventories , which primarily consist of garden products and pet supplies finished goods, are stated at the lower of FIFO cost or market.

Inventories which primarily consist of garden products and pet supplies finished goods, are stated at net realizable value.

Cost includes certain indirect purchasing, merchandise handling and storage costs incurred to acquire or manufacture inventory, costs to unload, process and put away shipments received in order to prepare them to be picked for orders, and certain other overhead costs.

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See Note 7 – Property and Equipment, Net .

Long-Lived Assets – The Company reviews its long-lived assets, including amortizable and indefinite-lived intangible assets and property, plant and equipment, for potential impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable, and annually for indefinite-lived intangible assets.

An impairment loss would be recognized for amortizable intangible assets and property, plant and equipment when the estimated fair value of the asset is less than its carrying amount.

An impairment loss would be recognized for an intangible asset with an indefinite useful life if its carrying value exceeds its fair value.

Long-Lived Assets – The Company reviews its long-lived assets, including amortizable and indefinite-lived intangible assets, property, plant and equipment and right-of-use assets, for potential impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable, and at least annually for indefinite-lived intangible assets.

The Company’s fixed assets and intangible assets subject to amortization are required to be tested for recoverability whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

If an evaluation of recoverability is required, the estimated undiscounted future cash flows associated with the asset group would be compared to the asset group carrying amount to determine if a write-down is required.

If the undiscounted cash flows are less than the carrying amount, an impairment loss is recorded.

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

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.

The Company recognized impairment losses on certain intangible assets of $ 12.8 million and $ 11.5 million in fiscal years 2024 and 2023, respectively, and there were no impairment losses recorded in fiscal 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.

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See Note 8 – Goodwill .

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

Investments – The Company owns membership interests ranging from 1 % to 50 % in fourteen 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 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.

Equity method losses of $ 6.7 million (which includes an investment impairment of $ 7.5 million) in fiscal year 2024, equity method losses of $ 0.2 million in fiscal year 2023, and equity method income of $ 0.8 million in fiscal 2022, are included in other income (expense) in the consolidated statements of operations.

The Company’s investment in these entities was $ 31.5 million at September 28, 2024 and $ 38.7 million at September 30, 2023 and is included in Other assets in the Company's consolidated balance sheets.

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See Note 3 – Acquisitions .

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Leases - The Company determines whether an arrangement contains a lease at inception by determining if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration and other facts and circumstances.

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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.

Interest expense is recorded over the lease term and is recorded in interest expense (based on a front-loaded interest expense pattern) for finance leases and is recorded in cost of sales or selling, general and administrative expenses (on a straight-line basis) for operating leases.

All operating lease cash payments and interest on finance leases are recorded within cash flows from operating activities and all finance lease principal payments are recorded within cash flows from financing activities in the consolidated statements of cash flows.

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

All operating lease cash payments and lease costs on finance leases are recorded within cash flows from operating activities and all finance lease principal payments are recorded within cash flows from financing activities in the consolidated statements of cash flows.

See Note 10 - Leases .

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Other comprehensive income (loss) refers to gains and losses that under generally accepted accounting principles are recorded directly as an element of shareholders’ equity, but are excluded from net income, and is comprised of currency translation adjustments relating to the Company’s foreign subsidiaries in the U.K and Canada whose functional currency is not the U.S.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

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

Recently Adopted Accounting Updates

There are no recently adopted accounting pronouncements that had a material impact on the Company's condensed consolidated financial statements.

Accounting Standards Not Yet Adopted

Segment Reporting

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU requires enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker that are included within each reported measure of segment profit or loss, and also requires all annual disclosures currently required by Topic 280 to be included in interim periods.

2023-07 is to be applied retrospectively for all periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s disclosures.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU primarily requires enhanced disclosures and disaggregation of income tax information by jurisdiction in the annual income tax reconciliation and quantitative and qualitative disclosures regarding income taxes paid.

2023-09 is to be applied prospectively, with the option to apply the standard retrospectively, effective for fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s disclosures.

Fair Value Measurements

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

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:

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Level 1 Level 2 Level 3 Total

(in thousands)

Liability for contingent consideration (a) $ — $ — $ 115 $ 115

Total liabilities $ — $ — $ 115 $ 115

The following table presents our financial assets and liabilities 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 24, 2022:

Level 1 Level 2 Level 3 Total

(in thousands)

Liability for contingent consideration (a) $ — $ — $ 543 $ 543

Total liabilities $ — $ — $ 543 $ 543

(a) The fair values of the Company's contingent consideration liabilities from previous business acquisitions are considered "Level 3" measurements because the Company uses various estimates in the valuation models to project timing and amount of future contingent payments.

The fair values of the Company's contingent consideration liabilities from previous business acquisitions are considered "Level 3" measurements because the Company uses various estimates in the valuation models to project timing and amount of future contingent payments.

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

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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.

This is presented as part of long-term liabilities in the Company's consolidated balance sheets.

The balance, if there is an amount, is presented as part of long-term liabilities in the Company's consolidated balance sheets.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table provides a summary of changes in fair value of the Company's Level 3 financial instruments for the years ended September 28, 2024 and September 30, 2023:

(in thousands)

Balance September 24, 2022 $ 543

Changes in the fair value of contingent performance-based payments ( 374 )

Performance-based payments made ( 54 )

Balance as of September 30, 2023 115

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Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company measures certain non-financial assets and liabilities, including long-lived assets, goodwill and intangible assets, at fair value on a non-recurring basis.

The Company measures certain non-financial assets and liabilities, including long-lived assets, goodwill, intangible assets and right-of-use assets at fair value on a non-recurring basis.

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.

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.

As a result of market changes and declining sales, factors indicating the carrying value of certain amortizable and indefinite-lived intangible assets may not be recoverable were present in fiscal 2024.

In fiscal year ended September 30, 2023, impairment charges of approximately $ 7.5 million and $ 3.9 million in the Company's Pet and Garden segments, respectively, were recorded as part of selling, general and administrative expenses in the consolidated statements of operations.

There were no impairment losses recorded in fiscal 2022.

Fair Value of Other Financial Instruments

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The estimated fair value of the Company's 2028 Notes as of September 28, 2024 and September 30, 2023 was $ 299.2 million and $ 279.5 million, respectively, compared to a carrying value of $ 298.4 million and $ 298.0 million, respectively.

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 2 inputs within the fair value hierarchy.

Acquisitions and Investments in Joint Ventures

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 expands Central’s portfolio with bully and collagen sticks, bones and jerky, adds scale to its dog and cat business and enhances Central’s eCommerce and direct-to-consumer capabilities.

The purchase price exceeded the estimated fair value of the net tangible assets acquired by approximately $ 45 million, of which $ 23 million was allocated to identified intangible assets and approximately $ 5 million was included in goodwill in the Company's consolidated balance sheet as of September 28, 2024.

Financial results of TDBBS have been included in the results of operations within the Pet 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.

CENTRAL GARDEN & PET COMPANY

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)

(in thousands)

Current assets, net of cash and cash equivalents acquired $ 21,831 $ 1,137 $ 22,968

Fixed assets 2,369 — 2,369

Goodwill — 4,925 4,925

Other assets 44,891 ( 44,891 ) —

Operating lease right-of-use assets 3,956 — 3,956

Deferred tax assets — 15,859 15,859

Other intangible assets, net — 22,970 22,970

Current liabilities ( 9,094 ) — ( 9,094 )

Long-term lease liabilities ( 3,727 ) — ( 3,727 )

Net assets acquired, less cash and cash equivalents $ 60,226 $ — $ 60,226

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(1) As previously reported in the Company's Form 10-Q for the period ended June 29, 2024.

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

Proforma financial information has not been presented as the TDBBS acquisition was not considered material to the Company's overall consolidated financial statements during the periods presented.

The Company did not make any acquisitions in fiscal 2023.

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.

The Company did not make any acquisitions in fiscal 2022.

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Net assets acquired, less cash and cash equivalents $ 570,510 $ — $ 570,510

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(1) As previously reported in the Company's Form 10-K for the fiscal year ended September 25, 2021.

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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.

CENTRAL GARDEN & PET COMPANY

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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The Company expects all the goodwill from its acquisition of D&D Commodities Limited to be deductible for tax purposes.

On December 18, 2020, the Company acquired DoMyOwn, a leading online retailer of professional-grade control products, for approximately $ 81 million.

The purchase price exceeded the estimated fair value of the net tangible assets acquired by approximately $ 80.4 million, of which $ 11.9 million was allocated to identified intangible assets and approximately $ 68.5 million was included in goodwill in the Company’s consolidated balance sheet as of September 25, 2021.

Financial results of DoMyOwn 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.

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

(in thousands)

Current assets, net of cash and cash equivalents acquired $ 3,922 $ — $ 3,922

Fixed assets 3,047 — 3,047

Goodwill — 68,512 68,512

Other assets 80,412 ( 80,412 ) —

Other intangible assets, net — 11,900 11,900

Current liabilities ( 6,446 ) — ( 6,446 )

Net assets acquired, less cash and cash equivalents $ 80,935 $ — $ 80,935

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

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.

Hopewell Nursery

On December 31, 2020, the Company purchased substantially all of the assets of Hopewell Nursery, a leading live goods wholesale grower serving retail nurseries, landscape contractors, wholesalers and garden centers across the Northeast, for approximately $ 81 million.

The purchase price exceeded the estimated fair value of the net tangible assets acquired by approximately $ 15 million, of which approximately $ 4.1 million was allocated to identified intangible assets and approximately $ 10.9 million was included in goodwill in the Company's consolidated balance sheet as of September 25, 2021.

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

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)

(in thousands)

Current assets, net of cash and cash equivalents acquired $ 39,046 $ 3,742 $ 42,788

Fixed assets 31,940 ( 326 ) 31,614

Goodwill — 10,924 10,924

Other assets 18,470 ( 18,470 ) —

Other intangible assets, net — 4,130 4,130

Current liabilities ( 6,767 ) — ( 6,767 )

Other long-term liabilities ( 1,301 ) — ( 1,301 )

Net assets acquired, less cash and cash equivalents $ 81,388 $ — $ 81,388

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

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

Proforma financial information has not been presented as the DoMyOwn and Hopewell Nursery acquisitions were not considered material to the Company's overall consolidated financial statements during the periods presented.

The Company expects all the goodwill from both of the acquisitions above to be deductible for tax purposes.

Green Garden Products

The finalization of the allocation of the purchase price to the fair value of the tangible assets, intangible assets and liabilities acquired was finalized in the second quarter of fiscal 2022.

For the fiscal year ended September 25, 2021, net sales and net income related to Green Garden Products were approximately $ 122.4 million and $ 1.6 million, respectively.

The following unaudited pro forma financial information summarizes the combined results of operations for Central and Green Garden Products as if the companies were combined as of the beginning of fiscal 2020.

Fiscal Year Ended

September 25, 2021 September 26, 2020

in thousands except per share amounts

Net sales $ 3,357,977 $ 2,850,678

Net income attributable to Central Garden & Pet Company $ 175,508 $ 146,277

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

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.

This pro forma information is not necessarily indicative of what the results of the Company would have been had it operated the business since the beginning of the periods presented.

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.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

D&D Commodities Limited

The finalization of the allocation of the purchase price to the fair value of the tangible assets, intangible assets and liabilities acquired was finalized in the fourth quarter of fiscal 2022.

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.

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

Breeder's Choice

In December 2020, the Company completed the sale of certain assets of its Breeder's Choice business unit.

Prior to the sale of Breeder's Choice assets, the Company recognized the financial results of the business unit in its Pet segment.

The Company received cash proceeds of $ 2.4 million and sold approximately $ 4.7 million of current and long-term net assets.

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.

During fiscal year 2024, the Company recorded an investment impairment totaling $ 7.5 million for two related private company investments.

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 .

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Concentration of Credit Risk and Significant Customers and Suppliers

Customer Concentration – Approximately 54 % of the Company’s net sales for fiscal 2024, 52 % for fiscal 2023 and 51 % for fiscal 2022 were derived from sales to the Company’s top five customers.

The Company’s largest customer accounted for approximately 16 % of the Company’s net sales in fiscal 2023, 17 % in 2022 and 16 % in 2021.

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

The Company’s largest customer accounted for approximately 17 % of the Company’s net sales in fiscal 2024, 16 % in 2023 and 17 % in 2022 (in both Pet and Garden).

The Company’s second largest customer in 2024 accounted for approximately 16 % of the Company’s net sales in fiscal years 2024, 2023 and 2022 (in both Pet and Garden).

The Company’s third largest customer in 2024 accounted for approximately 8 % of the Company’s net sales in fiscal years 2024, 2023 and 2022 (in Pet).

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 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.

As of September 28, 2024 and September 30, 2023, accounts receivable from the Company’s top five customers comprised approximately 53 % and 51 %, respectively, of the Company’s total accounts receivable, including 14 % and 11 %, respectively, from the Company’s largest customer.

Supplier Concentration – While the Company purchases products from many different manufacturers and suppliers, approximately 7 %, 5 % and 7 % of the Company’s cost of goods sold in fiscal years 2024, 2023 and 2022, respectively, were derived from products purchased from the Company’s five largest suppliers.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 variable consideration as described in Note 1 - Organization and Significant Accounting Policies .

Under the guidance found in 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.

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

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

Description Balances at

of Period Charged/

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Property and Equipment, Net

Property and equipment consists of the following:

Property and equipment, net consists of the following:

September 28, 2024 September 30, 2023

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Accumulated depreciation and amortization ( 534,380 ) ( 491,638 )

$ 391,768 $ 396,979

Total property and equipment, net $ 379,166 $ 391,768

Depreciation and amortization expense, including the amortization of intangible assets, charged to operations was $ 90.8 million, $ 87.7 million and $ 80.9 million for fiscal 2024, 2023 and 2022, respectively.

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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 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 2024, 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 2024, and accordingly, no further testing of goodwill was required in fiscal 2024.

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.

In connection with the the Company’s annual goodwill impairment testing performed during fiscal year 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 segments under the goodwill impairment test.

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

CENTRAL GARDEN & PET COMPANY

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

As part of its acquisition of TDBBS, the Company acquired approximately $ 17.7 million of marketing related intangible assets and $ 5.3 million of customer related intangible assets.

See Note 3 – Acquisitions .

1 unchanged sentence

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

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

The Company performed impairment testing on these assets, found the carrying value was not recoverable, and accordingly, recorded impairment charges of approximately $ 12.8 million in its Pet segment as part of selling, general and administrative expenses in the consolidated statements of operations for the fiscal year ended September 28, 2024 and $ 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.

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

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

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

over weighted-average remaining lives of nine years for marketing-related intangibles, ten years for customer-related intangibles and seven years for other acquired intangibles.

Amortization expense for intangibles subject to amortization was approximately $ 34.1 million, $ 34.5 million and $ 35.1 million, for fiscal 2024, 2023 and 2022, respectively, and is classified within selling, general and administrative expenses in the consolidated statements of operations.

42 unchanged sentences

Operating cash flows from operating leases $ 50.7 $ 50.1

Operating cash flows from finance leases — —

Financing cash flows from finance leases 0.1 —

15 unchanged sentences

2025 $ 65.0 $ 0.1

2026 53.7 0.1

2027 42.6 0.1

Thereafter 55.6 —

21 unchanged sentences

Long-term portion $ 1,189,809 $ 1,187,956

Issuance of $ 400 million 4.125 % Senior Notes due 2031

On April 30, 2021, the Company issued $ 400 million aggregate principal amount of 4.125 % senior notes due April 2031 (the "2031 Notes").

The Company used a portion of the net proceeds from the offering to repay all outstanding borrowings under its Amended Credit Facility, with the remainder used for general corporate purposes.

$ 400 million 4.125 % Senior Notes due 2031

In April 2021, the Company issued $ 400 million aggregate principal amount of 4.125 % senior notes due April 2031 (the "2031 Not es").

The Company used a portion of the net proceeds from the offering to repay all outstanding borrowings under its Credit Facility, with the remainder used for general corporate purposes.

The Company incurred approximately $ 6 million of debt issuance costs in conjunction with this issuance, which included underwriter fees and legal, accounting and rating agency expenses.

1 unchanged sentence

The 2031 Notes require semi-annual interest payments on April 30 and October 30.

The 2031 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.

The 2031 Notes were issued in a private placement under Rule 144A and will not be registered under the Securities Act of 1933.

The Company may redeem some or all of the 2031 Notes at anytime, at its option, prior to April 30, 2026 at the principal amount plus a "make whole" premium.

At any time prior to April 30, 2024, the Company may also redeem, at its option, up to 40 % 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 2031 Notes at the Company’s option, at any time on or after April 30, 2026 for 102.063 %, on or after April 30, 2027 for 101.375 %, on or after April 30, 2028 for 100.688 % and on or after April 30, 2029 for 100.0 %, plus accrued and unpaid interest.

The Company may redeem some or all of the 2031 Notes at any time, at its option, prior to April 30, 2026 at the principal amount plus a "make whole" premium.

The Company may redeem some or all of the 2031 Notes at its option, at any time on or after April 30, 2026 for 102.063 %, on or after April 30, 2027 for 101.375 %, on or after April 30, 2028 for 100.688 % and on or after April 30, 2029 for 100.0 %, plus accrued and unpaid interest.

The holders of the 2031 Notes have the right to require the Company to repurchase all or a portion of the 2031 Notes at a purchase price equal to 101 % of the principal amount of the notes repurchased, plus accrued and unpaid interest, upon the occurrence of specific kinds of changes of control.

1 unchanged sentence

The Company was in compliance with all financial covenants as of September 28, 2024.

Issuance of $ 500 million 4.125 % Senior Notes due 2030

$ 500 million 4.125 % Senior Notes due 2030

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.

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.

The Company incurred approximately $ 8.0 million of debt issuance costs associated with this transaction, which included underwriter fees and legal, accounting and rating agency expenses.

1 unchanged sentence

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)

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.

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.

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

The Company may redeem some or all of the 2030 Notes, at its option, 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.

The holders of the 2030 Notes have the right to require the Company to repurchase all or a portion of the 2030 Notes at a purchase price equal to 101.0 % of the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence of a change of control.

2 unchanged sentences

$ 300 million 5.125 % Senior Notes due 2028

On December 14, 2017, the Company issued $ 300 million aggregate principal amount of 5.125 % senior notes due February 2028 (the "2028 Notes").

In December 2017, the Company issued $ 300 million aggregate principal amount of 5.125 % senior notes due February 2028 (the "2028 Notes").

The Company used the net proceeds from the offering to finance acquisitions and for general corporate purposes.

2 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 Amended Credit Facility.

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.

The holders of the 2028 Notes have the right to require us to repurchase all or a portion of the 2028 Notes at a purchase price equal to 101.0 % of the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence of a change of control.

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 the Company's Credit Facility.

The Company may redeem some or all of the 2028 Notes, at its option, at any time during 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.

The holders of the 2028 Notes have the right to require the Company to repurchase all or a portion of the 2028 Notes at a purchase price equal to 101.0 % of the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence of a change of control.

The 2028 Notes contain customary high yield covenants, including covenants limiting debt incurrence and restricted payments, subject to certain baskets and exceptions.

1 unchanged sentence

Asset-Based Loan Facility Amendment

On December 16, 2021, the Company entered into a Third Amended and Restated Credit Agreement (“Amended Credit Agreement”).

The Amended Credit Agreement amended and restated the previous credit agreement dated September 27, 2019 (the "Predecessor Credit Agreement"), and provides for a $ 750 million principal amount senior secured asset-based revolving credit facility, with up to an additional $ 400 million principal amount available with the consent of the Lenders, as defined, if the Company exercises the uncommitted accordion feature set forth therein (collectively, the “Amended Credit Facility”).

The Amended Credit Facility matures on December 16, 2026.

The Company may borrow, repay and reborrow amounts under the Amended Credit Facility until its maturity date, at which time all amounts outstanding under the Amended Credit Facility must be repaid in full.

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.

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 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.

On December 16, 2021, the Company entered into a Third Amended and Restated Credit Agreement (“Credit Agreement”).

The Credit Agreement provides for a $ 750 million principal amount senior secured asset-based revolving credit facility, with up to an additional $ 400 million principal amount available with the consent of the Lenders, as defined, if the Company exercises the uncommitted accordion feature set forth therein (collectively, the “Credit Facility”).

The Credit Facility matures on December 16, 2026.

The Company may borrow, repay and reborrow amounts under the Credit Facility until its maturity date, at which time all amounts outstanding under the Credit Facility must be repaid in full.

The 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.

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

Net availability under the Credit Facility was approximately $ 481 million as of September 28, 2024.

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

As of September 28, 2024, there were no borrowings outstanding and no letters of credit outstanding under the Credit Facility.

Outside of the Credit Facility, there were other letters of credit of $ 3.0 million outstanding as of September 28, 2024.

Borrowings under the 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 28, 2024, and the applicable margin for Base Rate borrowings fluctuates between 0.00 %- 0.50 %, and was 0.00 % as of September 28, 2024.

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

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

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

The Credit Facility was amended on May 15, 2023 to transition from LIBOR to SOFR.

As of September 28, 2024, the applicable interest rate related to Base Rate borrowings was 8.0 %, and the applicable interest rate related to one-month SOFR-based borrowings was 5.8 %.

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

The Amended Credit Facility continues to contain customary covenants, including financial covenants which require the Company to maintain a minimum fixed charge coverage ratio of 1 :1 upon triggered quarterly testing (e.g.

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

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

The Credit Facility continues to contain customary covenants, including financial covenants which require the Company to maintain a minimum fixed charge coverage ratio of 1 :1 upon triggered quarterly testing (e.g.

when availability falls below certain thresholds established in the agreement), reporting requirements and events of default.

The Amended Credit Facility is secured by substantially all assets of the borrowing parties, including (i) pledges of 100 % of the stock or other equity interest of each domestic subsidiary that is directly owned by such entity and (ii) 65 % of the stock or other equity interest of each foreign subsidiary that is directly owned by such entity, in each case subject to customary exceptions.

The Company was in compliance with all financial covenants under the Amended Credit Facility as of September 30, 2023.

The Credit Facility is secured by substantially all assets of the borrowing parties, including (i) pledges of 100 % of the stock or other equity interest of each domestic subsidiary that is directly owned by such entity and (ii) 65 % of the stock or other equity interest of each foreign subsidiary that is directly owned by such entity, in each case subject to customary exceptions.

The Company was in compliance with all financial covenants under the Credit Facility as of September 28, 2024.

The scheduled principal repayments on long-term debt as of September 28, 2024 are as follows:

20 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

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 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.

The retrial on the "head start" damages issue concluded in early March 2024, but no decision has been issued by the court.

The Company intends to vigorously pursue its defenses in any future proceedings and believes that it will prevail on the merits as to the head start damages issue.

While the Company believes that the ultimate resolution of this matter will not have a material impact on the Company's consolidated financial

CENTRAL GARDEN & PET COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company intends to vigorously pursue its defenses in the future proceedings and believes that it will prevail on the merits as to the head start damages issue.

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.

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.

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.

23 unchanged sentences

Other permanent differences ( 0.1 ) ( 0.2 ) ( 0.1 )

Non-Deductible Officers Compensation 1.4 0.7 0.5

Adjustment of prior year accruals ( 0.3 ) ( 0.2 ) 0.2

59 unchanged sentences

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.

As of September 28, 2024, there were approximately 2.5 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, 11.2 million shares of Class A Common Stock and 0.5 million shares of Preferred Stock remaining for future awards.

In fiscal 2024, no shares were granted from the Director Plan and each independent director was granted restricted shares from the 2003 Plan.

5 unchanged sentences

Stock Option Awards

During fiscal 2024, the Company did not grant any stock options.

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.

But generally, the Company has granted options at the market price on the date of the grant.

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

Expected stock price volatilities are estimated based on the historical volatility of the Company’s stock price.

The expected term of options granted is based on analyses of historical employee termination rates, option exercises and the contractual term of the option.

The expected term of options granted is based on exercise behavior, option exercises and the contractual term of the option.

The risk-free rates are based on U.S.

1 unchanged sentence

For purposes of this valuation model, no dividends have been assumed.

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 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;

risk free interest rates, 3.6 % in fiscal 2023, 1.7 % in fiscal 2022 and 0.5 % in fiscal 2021;

In fiscal years 2023 and 2022, 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, 8 years in fiscal 2023 and 3.7 years in 2022;

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

risk free interest rates, 3.6 % in fiscal 2023 and 1.7 % in fiscal 2022;

and no dividends during the expected term.

14 unchanged sentences

Exercisable at September 28, 2024 758 $ 28.25 2 years $ 3,518

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

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.

Expected to vest after September 28, 2024 70 $ 35.16 1 year $ 2

The prices of options to purchase shares of Class A common stock outstanding at September 28, 2024, September 30, 2023 and September 24, 2022 were $ 20.63 to $ 41.10 per share, $ 20.63 to $ 41.10 per share and $ 17.10 to $ 41.10 per share, respectively.

There were no options granted in fiscal year ended September 28, 2024.

The weighted average grant date fair value of options granted during the fiscal years ended September 30, 2023 and September 24, 2022 was $ 12.29 and $ 8.77 , respectively.

The total intrinsic value of options exercised during the fiscal years ended September 28, 2024, September 30, 2023 and September 24, 2022 was $ 12.0 million, $ 3.9 million, and $ 6.1 million, respectively.

As of September 30, 2023, there was $ 2.8 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a remaining weighted-average vesting period of two years .

As of September 28, 2024, there was $ 0.3 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a remaining weighted-average vesting period of one year .

Restricted Stock Awards

13 unchanged sentences

As of September 28, 2024, there was $ 24.4 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 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.

In fiscal years 2024, 2023 and 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 2024 was not material to the Company’s Consolidated Financial Statements.

4 unchanged sentences

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 1,602,374 and 1,612,374 , respectively, were outstanding at September 30, 2023 and September 24, 2022.

There are 3,000,000 shares of Class B stock ($ 0.01 par value) authorized, of which 1,602,374 was outstanding at September 28, 2024 and September 30, 2023.

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.

5 unchanged sentences

As of September 28, 2024, the Company had $ 82.0 million remaining under its 2019 Repurchase Authorization.

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.

During fiscal 2024, the Company repurchased approximately 0.3 million shares of its non-voting common stock (CENTA) on the open market at an aggregate cost of approximately $ 10.7 million and approximately 3 thousand shares of its voting common stock (CENT) on the open market at an aggregate cost of approximately $ 109 thousand.

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").

1 unchanged sentence

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

As of September 28, 2024, the Company had authorization remaining to repurchase up to 38 thousand shares under its Equity Dilution Authorization.

CENTRAL GARDEN & PET COMPANY

32 unchanged sentences

The Pet segment consists of Nylabone Products, IMS Trading, Four Paws Products, Central Specialty Pet (Avian and Small Animal, C&S Products and Aquatics), Segrest, K&H Pet Products, Arden, DMC, Life Sciences, Interpet, General Pet and Pet Distribution.

These businesses are engaged in the manufacture, purchase, sale and delivery of internally and externally produced pet supplies, animal health and insect controls, aquariums, books, dog treats and food, as well as live fish and small animals principally to independent pet distributors, big-box retailers, regional retailer chains, e-commerce retailers, grocery stores and mass merchants.

The Garden segment consists of Grass Seed, Bird Feed, Chemicals and Fertilizers, Excel Marketing, Gulfstream, Hydro-Organics, Pottery (terra-cotta), Cedarworks, Bell Nursery, Hopewell Nursery, DMO, Green Garden, D&D Commodities and Garden Distribution.

These businesses are engaged in the manufacture, purchase, sale and delivery of internally and externally produced pet supplies, animal health and insect controls, aquariums, books, dog treats and food, as well as live fish and small animals principally to independent pet distributors, big-box retailers, regional retailer chains, eCommerce retailers, grocery stores and mass merchants.

The Garden segment consists of Grass Seed, Bird Feed, Chemicals and Fertilizers, Excel Marketing, Gulfstream, Cedarworks, Bell Nursery, Hopewell Nursery, DMO, Green Garden, D&D Commodities and Garden Distribution.

Products manufactured, designed and sourced, or distributed include products found typically in the lawn and garden sections of mass merchandisers, warehouse-type clubs, home improvement centers and nurseries and include live plants;

13 unchanged sentences

Wild bird 426.4 475.0 434.3

Controls & fertilizer products — — (1) —

Total $ 3,200.5 $ 3,310.1 $ 3,338.6

(1) The product category was less than 10% of our consolidated net sales in the period.

See Note 4 – Concentration of Credit Risk and Significant Customers and Suppliers for the Company’s largest customers by segment.

15 unchanged sentences

Interest income 19,655 7,362 719

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

Other income (expense), net ( 5,090 ) 1,462 ( 3,596 )

Income before income taxes and noncontrolling interest 142,425 162,445 198,906

18 unchanged sentences

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