Appreciate you all for joining us. My name is Bill Reuter. I cover high-yield consumer products at Bank of America. The first initiation report I ever wrote in 2005 was on Central Garden & Pet Company. No way. Yeah, yeah. So this was the beginning of my journey, which has now been a pretty long one here. So very happy to have Niko Lahanas, the CEO, and Andrew Hovanes, the Treasurer of Central, here today. So guys, thank you for joining us. Thank you. Thanks for having us. I think maybe I'm going to start with some questions. At any point, from time to time, I ask the audience if you guys have questions. So I'd love for everyone to be as involved as they want to be. The first is, let's start with the pet side. So durables, they've been soft. You, on the most recent call, said that persists. I feel like there had been so much discussion about replacement cycles and that we should be at the end of one of those, but it doesn't really seem like that's coming to fruition. Can you talk a little bit about where you're seeing the softness, what types of products, what would continue to cause that, and just the general outlook? Yeah. So when we talk about durables, we're also including live animals. So we have a small live animal distribution business where we distribute fish, small animals, reptiles. So we include that in our number. That's really important because that's really at the basis of the softness, is we've seen this sort of pullback from the COVID high where everyone wanted to adopt a puppy and have a pet. And so we're just trying to find that kind of equilibrium, that new normal. We think eventually we'll regress back to kind of the long-term growth rates in the pet industry, which is anywhere from 2%-4%. But we're still kind of trying to find our way. We look at our live animal business as sort of a canary in the coal mine, pun intended. And what we've seen there is the decline becoming less pronounced. And even in our Q4, we actually grew our live goods business, our live animal business. With that, whenever you buy a live animal, comes all of the hard goods, the durables. If you buy a guinea pig, you have to buy the crate, the enclosure, the food bowl, the water bowl, the bedding. All that comes with it. And so we are optimistic that maybe late 2026, 2027, we could get back to improving household penetration across the board in pet. Dog is still lower than it was pre-COVID. The one outlier has been cat. And cat actually is flat to up. And it's probably the hottest category in pet right now. But we're optimistic. We think we'll get through this. A little more to go. But we're seeing some green shoots in our own business as well as out in the industry. So we remain optimistic. I think the thing we're really excited about is the younger cohort that's getting into the hobby. So we see millennials being very enthusiastic about pet ownership. Gen Z also very enthusiastic. So as those cohorts become more affluent and grow, I think we'll be in good shape. Across consumables and durables, how is your exposure to dogs versus cats, and how is that evolving? Yeah. Great question. We are largely dog. We have some small businesses that do cat products, but it's a huge opportunity for us to get more exposure to cat. For years, cat has been an underserved category. People don't realize most cats in the U.S. are obese, dehydrated, and diabetic because people just don't pay attention to the health of their cat. And it's just an incredibly underserved category that we definitely need more exposure to. Maybe you could talk a little bit about innovation within pet, and I guess both across hard goods as well as consumables. What have the last couple of years looked like, and what do you see over the next couple of years? Yeah. So that's a huge opportunity for Central. We've been really focused the last few years on simplifying our business. We did a bunch of M&A in 2021. And then, like everybody, we were over-inventoried in 2022 and really focused on cost and cash, where we saw the category sort of almost frozen and, to some extent, decreasing. So we really focused on that cost and cash and simplicity program the last few years. This is really the first year where we're coming out with an agenda around growth. And so we want to ramp up our innovation across the board. We want to ramp up M&A and really start to grow that top line because that's really what is exciting. I mean, we've done a lot of heavy lifting, expanded margins. I think the business at its core is in great shape, but we got to get back to growing and innovating and really building out those pipelines. It's going to take some time, but we have to get the mindset. We have the mindset on cost and cash, where we're constantly looking at taking cost out of the business every year. Our operators do a wonderful job with that, but it's also getting that growth mindset around innovation and bringing new fresh ideas to the market. I think that's going to be really important and could also help drive growth across the categories. Yeah. I feel like there's always a tension between retail and consumer products companies in terms of the number of SKUs that you offer, whether you're going to be offering them SKUs that are not available exclusively or in their exact same form and others. I feel like efficiency has also been one of the most important things for your side of the table. Where are you in terms of SKU rationalization versus proliferation, giving exclusive products? In very rare instances do we do exclusive products. We'll never be done with SKU RAT. I think you constantly have to SKU RAT. It's all about kind of continuous improvement. That said, we try to work very closely with our retail partners. We do a lot of private label with them. So that's a way where we can partner even closer. So we'll do the private label piece, and then we have our branded products in those stores as well. The one more recent where we've given sort of a limited exclusivity is we just launched a new bird food program with Walmart called Feeding Frenzy. And that's where we're really creating some excitement around bird feeding and different mixes, how to attract birds, educating the consumer. We've got a big digital marketing campaign, and we've given them an exclusive for probably a year or two, but eventually, we'll probably expand it out to other retailers. One category within pet that's done well is equine. Is that specific to Central's innovation or go-to-market efforts, or is it some little bit of maybe a wealthier consumer or some sort of socioeconomic environmental issues? Yeah. I mean, it's all the above what you just outlined. The average equine horse owner has a household income of north of $100,000, about 55 years in age, a lot of women in the hobby. And it's an area where we bought the Farnam brand back in 2006, and it's one of the most well-known equine brands out there. And there really wasn't a lot of marketing done behind Farnam. It just had this great brand name, and it did all these different little things. So what we did is we simplified the business. We put more of the products under the Farnam name instead of using a lot of these sub-brands. We also came out with a new logo that was more contemporary. And we even are working with some influencers. It's actually a musical group called The Castellows. It's three young women who sing country music. They happen to be horse owners, so they're very passionate. And we've really blasted out a whole digital campaign around The Castellows and them owning horses and their songwriting and all this really cool stuff. And it's interesting because this is where we can really flex our muscle as a company because we tend to compete with other companies that are much smaller than we are. And so we can become a huge share of voice in that particular category. And we've seen some really nice success there. And the equine products are also some of our higher margin products, so that helps too. Is there less competition there? Is that what leads to some? Yeah. You don't have the big players like Mars, like Nestlé, Purina. I think they're more on the feed side, but we stay away from feed and tack. So yeah, we do quite well in sort of those niche categories. That's where we like to play. I feel like aquatics is one where demand sometimes follows media, whether it's Finding Nemo. Yeah. Things like that. The pandemic was big, I think, when everyone was at home playing with fish because they had nothing else to do. Yeah. I guess, what are you seeing in the category at this point? I feel like it remains a little bit soft. Is it going to take something like finding Nemo to get the category growing again? It could. You're right. It has been a little bit soft. There's also been a bit of a lack of innovation in the category, and this is an area where we're the largest fish tank manufacturer in the U.S. We do all of that in Wisconsin, and we're also in an area where we're really innovating around making the consumer more successful because you want to keep folks in the hobby. In many cases, you go, you buy a batch of fish, and you get a fish kit, and the fish dies, and the kit goes in the garage, and you've lost that consumer. So what we're trying to do is engineer fish tanks, filtration, food, so that those fish stay alive and people really start to enjoy the hobby and then trade up. The idea is you start with a bait or a carnival goldfish that you bought, and you really get into the hobby, and then you buy the larger maybe freshwater tank, and then you graduate maybe even to a saltwater tank that requires some real passion and some real doing. We have an app now with our fish tanks called Blue IQ, and it helps you manage sort of every aspect of that fish tank. Kind of blending technology with the hard good and then having that recurring revenue stream of the consumable, the fish, the filtration, the water care. A bit of a razor blade, but really bringing some technology to the category, which the younger consumer, that's really what they want. They want that technology blended with the basics of caring for fish. Yeah. I guess shifting over to Lawn & Garden, on your most recent call, you talked about shelf space gains. I believe they were double digits looking into next year. April. Oh, no. For next year. Okay. April 10th. I thought next year was something like that. Regardless, you guys have done really well. To what do you attribute the success? Is it you're seeing some of the mass retailers and/or home improvement allocating more shelf space to the category broadly? Did you take market share? Is it new product introductions? What are the drivers? It's our ability to execute. We've got such a great team over in Garden, and they are so well trusted by the retailers, and this is us really partnering with the retailers. A lot of the listings we picked up are private label listings, so that's where we're partnering with those retailers, making either their fertilizer or grass seed, and we bring a lot to the table there. We have our brand marketing folks that will come in and improve the packaging, make it look and feel like a branded product, and then we have an army of merchandisers that are in those stores that not everyone can deliver that type of service where you're making sure like at a home improvement store where you see all that product up in the rafters, making sure that it gets down so that the consumer can see it and purchase it. We had situations where the incumbent we were bidding on the business had no merchandisers, so the product just stayed up in the rafters, and the retailers make more margin on that because it's private label, and our execution is just really great. That team, I can't say enough about them. They're so passionate about what they do, and I think the retailers feel that, and we have the capabilities to manufacture merchandise and even help them innovate on packaging and even formulas because we have all those capabilities, so very proud of the work there, and then we even brought some new products in the market. Right now, what's really hot is cleaning, vinegar cleaning, and Harris Vinegar is one that we used to distribute. We had a retailer come to us and say, "Hey, can you make something similar to that?" We came up with our own Worry Free vinegar product. It's a nice little piece of innovation and got a trial, test trial of 200 stores, and it just took off. It's that kind of agility that that team can bring to the table where we can win. I think we've got to be more aggressive in doing that, though, a lot more aggressive. With those private label wins, as part of those discussions, do you typically ask for a little bit more shelf space for your branded products as well? I'm sure that there is a tension between cannibalization and the opportunity to grow the category and get a consumer that wasn't going to purchase at all. Yeah. Yeah. Yeah, we do. And we typically get it. And we keep nice price segmentation with those products. And it's a great way for us to really control that shelf with the retailer where we've got the private label in our own brand. And then on the manufacturing side, it really helps us with overhead absorption. You can really keep your manufacturing lines going. And so there's a lot to like. And it's in our DNA. A lot of CPG companies, they don't like private label. It's a little bit lower gross margin. If you're a really good manufacturer, the operating margin can be close because you're not spending all those marketing dollars. And we've been doing it forever. So it's something that's in our DNA in the categories where we are the low-cost manufacturer. We won't hesitate to get into private label. So it's a big part of what we do. I feel like Lawn & Garden has been slow to move online relative to almost every other category. I guess I'm wondering why you think that is. I don't know if it's an immediate need, so you don't think about doing gardening, and then you decide that this Saturday is looking sunny, so you go out and get it then. I don't know if it's higher shipping costs. But I guess, what do you think the main attributes of the category that have left it in brick and mortar? And then where do you see the growth growing and where maybe penetration might be five years from now or a period of time? It's starting to get some traction online. We grew about 60% online this year in Garden, but it's still only 10% of the business. So to your point, it's been a little slower to gain that traction. We think that consumers still like going into those home improvement stores. They love going in there. They love touching the product, smelling it. When they go in, typically in the spring, they're looking to do a project, and so they want to get all these different things to do that project. Maybe they need some consultant help as they pull everything together. So I think there's still that need to go in, and that store is still a little bit of a destination. If the housing market picked up a little bit, I think we would see even better results in Garden. That's always a nice tailwind for us. But yeah, I think it will continue to grow. I don't know where it ends up, if it ends up at 30% to 50%. I think pet will continue to go up. I think one of the other distinctions is pet, call it food, treats, other things. Those things can be put on subscription, and so they lend themselves more to e-comm as opposed to Garden being seasonal, and you make that trip to Home Depot or Lowe's or even Walmart to get ready for spring. I want to open it up for the audience in case anyone has questions that they want to get in. I have many more, so no pressure, so I guess I'll ask a couple more, and then we'll go back to you guys. This question, I guess, is a combination for both of you, so with regard to the large cash balance, almost $900 million, what are you thinking about how to allocate that? And I guess, I don't know. There's clearly a lot of options there, so how are you thinking about it? Yeah. I mean, I'll kick it off, and I'll let Andrew weigh in as well. First of all, we've worked extremely hard to get it to $900 million. I think a lot of credit goes to our operators. Starting back in 2022 when we were over-inventoried, and we just took working cap out and continued to execute on the business. So it's what I would call a very high-quality problem. That said, we're not out to start a money market fund. We have to put the money to work, and the M&A environment, it's been picking up, but in our core categories, we just haven't seen a lot of action yet, and so we're still waiting for the deal flow to really pick up in what I would call kind of our bullseye areas. We really would love to pursue more pet consumable, preferably dog and cat type of acquisitions. There just haven't been a ton of those. So that's been a little frustrating, but we understand that. The other thing is our stock being down; we've been pretty aggressively buying it back. And when it drops, we've bought back almost 10% of our market cap over the last 12 months. And we'll continue to do so when we see a dip. But we're cautiously optimistic that the M&A activity will pick up, and we're just going to be patient. We're not going to do something silly just for the sake of activity. So we'll be quite patient. Andrew, do you want to? No, nothing to add. I mean, our CapEx is we continue to invest behind areas of growth that we feel we have the right to win in, whether that's capabilities around the supply chain as we've done consolidations and whatnot. But with the cash balance we have, M&A really would be the main. The big use. Yeah. Yeah. The job of a treasurer when you have so much cash, I guess gets a little easier. Well, he's a profit center now. Yeah. Right. Exactly. Exactly. In terms of, I've always wondered whether you would go outside of your core categories of Lawn & Garden and pet. I guess, do banks or do sellers of assets come to you and show you targets outside of those core categories? And I don't know. What's your thought on that generally? They do, given our cash balance and our liquidity position. We do get to see some things that would qualify as a third leg. We would have to have. So do we look at it? Sure. There's some interesting stuff out there. But we would have to have really strong conviction, and it would have to be meaningful. I don't see us getting into a third leg on a $50 million deal. It would have to be approaching $1 billion, if not higher. And then we would want it to be. It would have to have some sort of synergy or overlap with pet and garden, meaning can we sell it into the same retailers? Is there overlap of buyers? Things like that. One of the categories we get pitched a lot is cleaning. And cleaning for home improvement cleaning, not food, drug, mass cleaning. So we've looked at that, but we just haven't had the conviction yet to go out there and really take a swing. Yeah. That makes sense. I guess a similar question, but the other side of it. I probably every year or two ask why these two segments should be together. I guess, can you talk about that strategic rationale and whether there could be scenarios in which you would divest the two or break them apart? I mean, nothing near-term. I would say never say never. A lot of bankers have come to us and said, "Boy, if you had a pure play pet business, it would really command a much higher multiple." And every time someone says that, our garden business does really well. Like this last year, we had the second highest profit ever, and we're picking up wins across the board. I think they complement each other in a lot of ways. We're getting better and better at integrating. We just finished our Project Horizon, where we've now got our logistics footprint set. For the first time ever, we're co-locating pet and garden products. We're also exploring ways where we have a pro business that deals mainly in sort of chemicals and taking some of the actives out of that pro business and putting them into garden and coming up with innovation that way because the pro business is exactly that. It's for pros, and it's really strong actives and chemicals. And is there a retail, a consumer play there as well? So we're exploring that. And then you have some overlap with customers. And so we can leverage the sales team to sell into the customers where we have overlap. It's been many, many years that you've had cost savings initiatives that have been successful. And I think you were pretty open on the most recent call that, yes, there will be more this year. It might not be quite as big. Does it mean we're nearing the end, or is it kind of something that evolves based upon the environment evolving so there will be peaks and valleys in terms of when you achieve more and less? I think it's more of the latter. And I still think we've got a ways to go on the current sort of run rate. But given that we're so acquisitive, it'll never be done because we're going to hopefully continue to buy other companies, bring them in, integrate them, consolidate efforts that way. So I'm not sure we'll ever be done. And I think in the spirit of kind of continuous improvement, you want to always look to take cost out to get more efficient, to get better. And what's great is I think we have that mindset now. We didn't have that a few years ago. It was sort of we would challenge the businesses to take a certain amount of cost out, and they would kind of roll their eyes, and nothing would happen. But in the last, call it 18 months or so, that level of communication, we have a new head of supply chain who really knows how to work with the businesses. And I think the level of trust has just increased, and we're seeing some of the early signs of that. But I think we still have a ways to go. I think there's some really interesting things we can do going forward. I know a lot of your inputs are a little bit difficult to hedge. They're also very opaque. I know things like sunflower and millet and milo. Yeah. Yeah. Yeah. I I guess, what is the outlook for your commodities for next year? And I guess, will you be planning to price for those, or is the outlook such that any tariff impact could be just as big or larger? So that's more what investors should be thinking about. Yeah. I mean, we were on the call just a couple of weeks ago. We mentioned to everybody that we're looking at taking about 1% price. So call it 30, a little over $30 million in pricing. That's to offset commodities, specifically in our chemicals, our fertilizer business. NPK has jumped up a little bit. We've got to offset that. And then we have over $20 million of tariff headwind coming at us. So we did a really nice job in 2025 of buying enough inventory to get us through 2025. We had a little bit of tariff headwind in Q4. And now we're looking at a little north of $20 million. And pricing is hard to get right now. We went in, and we've gotten some of the pricing done. We even had to stop shipping with one customer because they wouldn't accept the pricing. And we're not notorious for going into customers and pricing to expand margin. It's not what we do. We expand margin by becoming more efficient, by innovating, things like that. When we price, it's usually commodity increase or the tariffs. But I think it's going to be a bumpy year in terms of getting the margins right and being able to take price. It's going to be tough. We've got a couple of minutes left. I have a few more, but I want to give anyone a chance if they do have one. I think one sec. I think we're going to bring the mic over just so yeah, so everyone can hear. Talk about private label and branded. Are you seeing a shift to private label? Anything from the consumer? We have not seen the shift. In fact, our brands continue to outperform. But what I will say is the consumer is very discerning, very value-driven, and I think it could still happen in pet and lawn and garden where private label could outperform. We just haven't seen it yet. I think it's catching up, so we've seen the branded side not outperform as much, but it also depends on the private label that's being done. We think that it'll outperform because we're doing it now, and we're going to execute much better than before in those categories, but from a macro standpoint, I think it could in the next year or two. We just haven't seen it yet. One more I'm curious on. There's always been a shift in the timing of orders between second and third quarters that can impact some of the cadence. Last year was definitely a cold, wet spring. I feel like two years ago was too. Have your retailers said to you, "We're going to have you ship to us a little later this year to hang on to their capital a little bit longer"? Do you think that's going to be a trend we see this year? Well, so last year, we had a pretty strong Q1 on the top line because we had a bit of the retailers ordered a little bit earlier. And our quarter, we had a couple of days after Christmas. So it becomes just crazy right around Christmas for us because our quarter is ending. It's a light quarter. So small moves make a big impact. And we wanted to be really clear a year ago, like, "Hey, this is pull forward. This isn't necessarily real." But we did get some nice cold weather now. And we know that usually that helps pick up wild birds feeding. So you get the compassion feeding when you get some snow on the ground. And so the POS is starting to rip. We like that. Great. Well, I think we're out of time. Niko, Andrew, thank you so much for your time and participation. Thank you. Thank you all for attending as well. Thank you very much.