Walnut Creek, Calif. — Central Garden and Pet reported a 32 percent drop in net income for the second quarter ending March 24, 2012, to $21.6 million ($0.45 per diluted share) from the year-ago $31.8 million ($0.51 per share). Sales were off only 4 percent, to $466.9 million from $485.7 million. The company said short-term execution issues hindered the company’s ability to fully meet demand. The company reiterated that it expects results in the second half to be better than the first half. “Strong early demand for some of our products occurred at the same time we were consolidating some of our plants and distribution facilities,” Gus Halas, Central president and CEO, told analysts. “This, along with other supply issues, resulted in execution glitches that delayed fulfilling orders for some customers. I am confident that the operational issues we encountered are temporary in nature, and we are addressing them as fast as possible.” The company said it does not believe it lost any customers as a result of the delays, which were particularly in the garden segment. The company said since the beginning of the fiscal year it has closed one manufacturing plant and five warehouses, meeting its earlier goals. It has also downsized another distribution center. It expects to close another two or three facilities during the remainder of the year, and take some $120 million in costs out of the company over the next few years. Wall Street was not too happy with the company’s results, with shares dropping 10 percent to a $9.71 close on May 3 after the results were released. Six-month income was $8.7 million ($.0.18 per share) on sales of $769 million, down 62 percent from the year-ago $22.7 million ($0.37 per share) on sales of $767.4 million.
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