##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended October 1, 2005
 OR
 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from to
 Commission file number 0-27818
 Doane Pet Care Company
  Delaware
    
    43-1350515(State or other jurisdiction
of incorporation)
    
    (IRS Employer
Identification No.)
 210 Westwood Place South, Suite 400
Brentwood, TN 37027
 (615) 373-7774
 þ o
 o þ
 o þ




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TABLE OF CONTENTS
  
 PagePART I. Financial InformationItem 1.
    
    Financial StatementsUnaudited Condensed Consolidated Balance Sheets as of the end of the third quarter of fiscal 2005 and the end of fiscal 2004
    
    
    1Unaudited Condensed Consolidated Statements of Operations for the third quarter and first nine months of fiscal 2005 and 2004
    
    
    2Unaudited Condensed Consolidated Statement of Stockholders (Deficit) Equity and Comprehensive Loss as of the end of and for
the first nine months of fiscal 2005
    
    
    3Unaudited Condensed Consolidated Statements of Cash Flows for the first nine months of fiscal 2005 and 2004
    
    
    4Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    5Report of Independent Registered Public Accounting Firm
    
    
    21Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    33Item 4.
    
    Controls and Procedures
    
    
    34PART II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    36Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    36Item 5.
    
    Other Information
    
    
    36Item 6.
    
    Exhibits
    
    
    36Signatures
    
    
    37Agreement and Plan of Merger dated 8/28/2005Letter from KPMG LLPCertification of PEO Pursuant to Section 302Certification of PFO Pursuant to Section 302Certification of PEO Pursuant to Section 906Certification of PFO Pursuant to Section 906




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##### Table of Contents



PART I. Financial Information
 
 ITEM 1. Financial Statements
 DOANE PET CARE COMPANY AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and par value amounts)
 End ofThird quarter
    
    
    Fiscal2005
    
    
    2004ASSETSCurrent assets:Cash and cash equivalents
    
    $
    30,403
    
    
    $
    28,847Accounts receivable, net
    
    
    92,068
    
    
    
    112,445Inventories, net
    
    
    64,144
    
    
    
    68,321Deferred tax assets
    
    
    1,867
    
    
    
    2,414Prepaid expenses and other current assets
    
    
    8,397
    
    
    
    7,038Total current assets
    
    
    196,879
    
    
    
    219,065Property, plant and equipment, net
    
    
    228,257
    
    
    
    258,070Goodwill and other intangible assets
    
    
    376,027
    
    
    
    390,471Other assets
    
    
    29,464
    
    
    
    34,300Total assets
    
    $
    830,627
    
    
    $
    901,906LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Current maturities of long-term debt
    
    $
    3,533
    
    
    $
    3,673Accounts payable
    
    
    72,222
    
    
    
    102,149Accrued liabilities
    
    
    55,941
    
    
    
    59,239Total current liabilities
    
    
    131,696
    
    
    
    165,061Long-term debt:Long-term debt, excluding current maturities
    
    
    576,550
    
    
    
    580,090Senior
Preferred Stock (Redeemable); 3,000,000 shares authorized, 1,200,000
shares issued and outstanding; $121,495 current redemption value
    
    
    119,314
    
    
    
    106,421Total long-term debt
    
    
    695,864
    
    
    
    686,511Deferred tax liabilities
    
    
    36,005
    
    
    
    33,641Other long-term liabilities
    
    
    10,207
    
    
    
    9,567Total liabilities
    
    
    873,772
    
    
    
    894,780Commitments and contingenciesStockholders (deficit) equity:Common stock, $0.01 par value; 1,000 shares authorized,
issued and outstanding
    
    
    
    
    
    
    Additional paid-in-capital
    
    
    115,674
    
    
    
    115,674Accumulated other comprehensive income
    
    
    31,803
    
    
    
    62,650Accumulated deficit
    
    
    (190,622
    )
    
    
    (171,198
    )Total stockholders (deficit) equity
    
    
    (43,145
    )
    
    
    7,126Total liabilities and stockholders (deficit) equity
    
    $
    830,627
    
    
    $
    901,906
 
 1




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##### Table of Contents



DOANE PET CARE COMPANY AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands)
 Third quarter
    
    
    First nine months2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    231,388
    
    
    $
    250,977
    
    
    $
    742,396
    
    
    $
    780,195Cost of goods sold
    
    
    194,282
    
    
    
    218,165
    
    
    
    610,466
    
    
    
    673,428Gross profit
    
    
    37,106
    
    
    
    32,812
    
    
    
    131,930
    
    
    
    106,767Operating expenses:Promotion and distribution
    
    
    13,707
    
    
    
    13,777
    
    
    
    42,866
    
    
    
    41,771Selling, general and administrative
    
    
    12,439
    
    
    
    12,461
    
    
    
    38,369
    
    
    
    38,447Amortization
    
    
    940
    
    
    
    993
    
    
    
    3,130
    
    
    
    3,356Other operating expense, net
    
    
    8,498
    
    
    
    1,168
    
    
    
    6,787
    
    
    
    6,329Income from operations
    
    
    1,522
    
    
    
    4,413
    
    
    
    40,778
    
    
    
    16,864Interest expense, net
    
    
    19,358
    
    
    
    18,432
    
    
    
    57,035
    
    
    
    54,595Other expense (income), net
    
    
    6
    
    
    
    (90
    )
    
    
    (687
    )
    
    
    (828
    )Loss before income taxes
    
    
    (17,842
    )
    
    
    (13,929
    )
    
    
    (15,570
    )
    
    
    (36,903
    )Income tax expense
    
    
    1,211
    
    
    
    1,296
    
    
    
    3,854
    
    
    
    3,866Net loss
    
    $
    (19,053
    )
    
    $
    (15,225
    )
    
    $
    (19,424
    )
    
    $
    (40,769
    )
 
 2




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DOANE PET CARE COMPANY AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF
 STOCKHOLDERS (DEFICIT) EQUITY AND COMPREHENSIVE LOSS
 (In thousands, except share amounts)
 AccumulatedAdditional
    
    
    otherCommon stock
    
    
    paid-in
    
    
    comprehensive
    
    
    AccumulatedShares
    
    
    Amount
    
    
    capital
    
    
    income (loss)
    
    
    deficit
    
    
    TotalBalances at end of fiscal 2004
    
    
    1,000
    
    
    $
    
    
    
    $
    115,674
    
    
    $
    62,650
    
    
    $
    (171,198
    )
    
    $
    7,126Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,424
    )
    
    
    (19,424
    )Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,847
    )
    
    
    
    
    
    
    (30,847
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,271
    )Balances at end of third quarter 2005
    
    
    1,000
    
    
    $
    
    
    
    $
    115,674
    
    
    $
    31,803
    
    
    $
    (190,622
    )
    
    $
    (43,145
    )
 
 3




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DOANE PET CARE COMPANY AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 First nine months2005
    
    
    2004Cash flows from operating activities:Net loss
    
    $
    (19,424
    )
    
    $
    (40,769
    )Items not requiring (providing) cash:Depreciation
    
    
    26,530
    
    
    
    25,466Amortization
    
    
    3,198
    
    
    
    4,102Deferred income tax expense
    
    
    3,259
    
    
    
    3,236Non-cash interest expense
    
    
    16,916
    
    
    
    14,895Equity
income of joint ventures
    
    
    (321
    )
    
    
    (650
    )Asset impairments
    
    
    6,129
    
    
    
    420Changes in current assets and liabilities
    
    
    (13,112
    )
    
    
    (13,363
    )Net cash provided by (used in) operating activities
    
    
    23,175
    
    
    
    (6,663
    )Cash flows from investing activities:Capital expenditures
    
    
    (15,738
    )
    
    
    (9,934
    )Other, net
    
    
    (1,141
    )
    
    
    (638
    )Net cash used in investing activities
    
    
    (16,879
    )
    
    
    (10,572
    )Cash flows from financing activities:Proceeds from issuance of long-term debt
    
    
    
    
    
    
    13,078Principal payments on long-term debt
    
    
    (2,647
    )
    
    
    (20,208
    )Payments for debt issuance costs
    
    
    (1,624
    )
    
    
    (3,006
    )Net cash used in financing activities
    
    
    (4,271
    )
    
    
    (10,136
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (469
    )
    
    
    332Increase (decrease) in cash and cash equivalents
    
    
    1,556
    
    
    
    (27,039
    )Cash and cash equivalents, beginning of period
    
    
    28,847
    
    
    
    29,293Cash and cash equivalents, end of period
    
    $
    30,403
    
    
    $
    2,254
 
 4




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DOANE PET CARE COMPANY AND SUBSIDIARIES
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (1) Basis of Presentation
     (2) Recent Accounting Pronouncements
   5




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (3) Inventories
  End ofThird quarter
    
    
    Fiscal2005
    
    
    2004Raw materials
    
    $
    14,819
    
    
    $
    16,041Packaging materials
    
    
    20,090
    
    
    
    20,564Finished goods
    
    
    31,552
    
    
    
    34,57366,461
    
    
    
    71,178Less: Allowances
    
    
    (2,317
    )
    
    
    (2,857
    )Total
    
    $
    64,144
    
    
    $
    68,321
 (4) Property, Plant and Equipment
  End ofThird quarter
    
    
    Fiscal2005
    
    
    2004Land
    
    $
    11,203
    
    
    $
    11,601Buildings and improvements
    
    
    99,226
    
    
    
    104,778Machinery and equipment
    
    
    306,877
    
    
    
    320,097Construction-in-progress
    
    
    11,865
    
    
    
    6,727429,171
    
    
    
    443,203Less: Accumulated depreciation
    
    
    (200,914
    )
    
    
    (185,133
    )Total
    
    $
    228,257
    
    
    $
    258,070
 (5) Long-Term Debt and Liquidity
  End ofThird quarter
    
    
    Fiscal2005
    
    
    2004Revolving credit facility
    
    $
    
    
    
    $
    Term loan facility
    
    
    193,050
    
    
    
    194,51310 3⁄4% senior notes
    
    
    211,412
    
    
    
    211,14410 5⁄8% senior subordinated notes
    
    
    149,416
    
    
    
    149,147Industrial development revenue bonds
    
    
    14,502
    
    
    
    14,493Debt of
foreign subsidiaries
    
    
    11,703
    
    
    
    14,466580,083
    
    
    
    583,763Less: Current maturities
    
    
    (3,533
    )
    
    
    (3,673
    )576,550
    
    
    
    580,090Senior preferred stock
    
    
    119,314
    
    
    
    106,421Total
    
    $
    695,864
    
    
    $
    686,511
  6




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    Long-Term Debt Maturities
  Fiscal
    
    
    Maturities2005
    
    
    
    
    
    $
    8772006
    
    
    
    
    
    
    3,5192007
    
    
    
    
    
    
    461,3452008
    
    
    
    
    
    
    2,1382009
    
    
    
    
    
    
    2,2802010 and thereafter
    
    
    
    
    
    
    229,238Total
    
    
    
    
    
    $
    699,397
 (6)
    
    Restructuring Activities and Asset Impairments
   7




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)


First nine months2005Balance at end of fiscal 2004
    
    $
    722Severance
    
    
    2,302Revisions to estimates
    
    
    (15
    )Cash payments
    
    
    (770
    )Balance at end of third quarter 2005
    
    $
    2,239
   Fiscal years ending
    
    
    
    
    
    Payout2005
    
    
    
    
    
    $
    9732006
    
    
    
    
    
    
    8982007
    
    
    
    
    
    
    368Total
    
    
    
    
    
    $
    2,239
 (7)
    
    Comprehensive Loss
  Third quarter
    
    
    First nine months2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss
    
    $
    (19,053
    )
    
    $
    (15,225
    )
    
    $
    (19,424
    )
    
    $
    (40,769
    )Foreign currency translation
    
    
    (768
    )
    
    
    3,675
    
    
    
    (30,847
    )
    
    
    (1,232
    )Total
    
    $
    (19,821
    )
    
    $
    (11,550
    )
    
    $
    (50,271
    )
    
    $
    (42,001
    )
 (8) Stock Option Plans of Parent
  8




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Third quarter
    
    
    First nine months2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss, as reported
    
    $
    (19,053
    )
    
    $
    (15,225
    )
    
    $
    (19,424
    )
    
    $
    (40,769
    )Less: Stock-based employee
compensation expense determined based
on the fair value method for all awards
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (3
    )Net loss, pro forma
    
    $
    (19,054
    )
    
    $
    (15,226
    )
    
    $
    (19,426
    )
    
    $
    (40,772
    )
   (9) Pension and Postretirement Plans
   Pension benefitsThird quarter
    
    
    First nine months2005
    
    
    2004
    
    
    2005
    
    
    2004Service cost
    
    $
    9
    
    
    $
    9
    
    
    $
    27
    
    
    $
    27Interest cost
    
    
    253
    
    
    
    270
    
    
    
    760
    
    
    
    810Expected return on plan assets
    
    
    (344
    )
    
    
    (347
    )
    
    
    (1,033
    )
    
    
    (1,040
    )Recognition of actuarial loss
    
    
    167
    
    
    
    169
    
    
    
    503
    
    
    
    507Amortization of prior service cost
    
    
    3
    
    
    
    3
    
    
    
    8
    
    
    
    8Amortization of transition obligation
    
    
    1
    
    
    
    1
    
    
    
    3
    
    
    
    3Net periodic pension cost
    
    $
    89
    
    
    $
    105
    
    
    $
    268
    
    
    $
    315
 Postretirement benefitsThird quarter
    
    
    First nine months2005
    
    
    2004
    
    
    2005
    
    
    2004Service cost
    
    $
    4
    
    
    $
    3
    
    
    $
    12
    
    
    $
    10Interest cost
    
    
    52
    
    
    
    75
    
    
    
    155
    
    
    
    225Recognition of actuarial loss
    
    
    32
    
    
    
    27
    
    
    
    95
    
    
    
    81Amortization of prior service benefit
    
    
    (62
    )
    
    
    (13
    )
    
    
    (184
    )
    
    
    (39
    )Net periodic postretirement cost
    
    $
    26
    
    
    $
    92
    
    
    $
    78
    
    
    $
    277
 9




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (10) Major Customer
  (11) Commitments and Contingencies
  (12) Subsequent Events
 Acquisition
     10




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Financing Transactions
  
    
    the closing of a $210.0 million senior credit facility, or the new senior credit
facility:
    
    the closing of a private placement for $152.0 million in aggregate principal amount
of 10 5/8% senior subordinated notes due November 15, 2015, or the new senior subordinated
notes;
    
    the termination and full settlement of its existing $230.0 million senior credit
facility;
    
    the redemption of its 9 3/4%
senior subordinated notes due 2007 at a price of 100% of the
aggregate principal amount of $150.0 million, plus
accrued and unpaid interest to, but not including, the redemption
date of November 24, 2005;
    
    the commencement of a change of control offer to purchase its existing 14.25% senior
preferred stock at a purchase price equal to 101% of the liquidation value thereof,
which includes a 1% change of control premium, plus accrued and
unpaid dividends to, but not including, the purchase date of November
22, 2005. Assuming all holders tender in the
change of control offer, the Company expects to pay approximately $125.2 million to
holders on or about the purchase date. To the extent any holders fail to tender such
offer, the Company will redeem its senior preferred stock at 100% of the
liquidation value thereof on or about the purchase date; and
    
    the commencement of a change of control offer to purchase the Companys 10 3/4% senior notes at
a purchase price equal to 101% of the principal amount thereof, which includes a 1%
change of control premium, plus accrued and unpaid interest to, but
not including, the purchase date of November 22, 2005. The Company has a written commitment from a lender to
provide financing for any repurchase obligations that may arise as a result of such
offer. The Company does not anticipate that holders of its senior notes will exercise
this right based on current trading levels of the senior notes.
   11




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 New
Senior Credit Facility
   New 10
5/8% Senior Subordinated Notes 5 8
  12




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Twelve-month periods beginningNovember 15,
    
    
    
    
    
    Percentage2010
    
    
    
    
    
    
    105.313
    %2011
    
    
    
    
    
    
    103.542
    %2012
    
    
    
    
    
    
    101.771
    %2013 and thereafter
    
    
    
    
    
    
    100.000
    %
 Long-Term
Debt Maturities.
 Maturities by fiscal year2010 andFinal maturity
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    thereafter
    
    
    TotalSenior credit facility:Revolving credit facility
    
    October 24, 2010
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Euro term
loan facility
    
    October 24, 2012
    
    
    137
    
    
    
    550
    
    
    
    550
    
    
    
    550
    
    
    
    550
    
    
    
    52,663
    
    
    
    55,000U.S. dollar
term loan facility
    
    October 24, 2012
    
    
    262
    
    
    
    1,050
    
    
    
    1,050
    
    
    
    1,050
    
    
    
    1,050
    
    
    
    100,538
    
    
    
    105,00010 3⁄4% senior notes
    
    March 1, 2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    232,170
    
    
    
    232,17010 5/8% senior subordinated notes
    
    November 15, 2015
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,824
    
    
    
    150,824Other
    
    Various
    
    
    387
    
    
    
    1,555
    
    
    
    1,987
    
    
    
    2,123
    
    
    
    2,264
    
    
    
    17,787
    
    
    
    26,103Total
    
    
    
    
    
    $
    786
    
    
    $
    3,155
    
    
    $
    3,587
    
    
    $
    3,723
    
    
    $
    3,864
    
    
    $
    553,982
    
    
    $
    569,097
 Stock Incentive Plan
  (13) Financial Information Related to Guarantor Subsidiaries
  13




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   14




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DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Unaudited Condensed Consolidated Balance Sheets
For The Guarantor and Non-Guarantor Subsidiaries
 End of third quarter 2005Non-
    
    
    IntercompanyGuarantor
    
    
    guarantor
    
    
    eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    25,699
    
    
    $
    4,704
    
    
    $
    
    
    
    $
    30,403Accounts receivable, net
    
    
    37,612
    
    
    
    54,456
    
    
    
    
    
    
    
    92,068Inventories, net
    
    
    38,064
    
    
    
    26,080
    
    
    
    
    
    
    
    64,144Deferred tax assets
    
    
    1,867
    
    
    
    
    
    
    
    
    
    
    
    1,867Prepaid expenses and other current assets
    
    
    7,605
    
    
    
    792
    
    
    
    
    
    
    
    8,397Total current assets
    
    
    110,847
    
    
    
    86,032
    
    
    
    
    
    
    
    196,879Property, plant and equipment, net
    
    
    136,933
    
    
    
    91,324
    
    
    
    
    
    
    
    228,257Goodwill and other intangible assets
    
    
    267,780
    
    
    
    108,247
    
    
    
    
    
    
    
    376,027Other assets
    
    
    280,200
    
    
    
    12,264
    
    
    
    (263,000
    )
    
    
    29,464Total assets
    
    $
    795,760
    
    
    $
    297,867
    
    
    $
    (263,000
    )
    
    $
    830,627LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Current maturities of long-term debt
    
    $
    1,950
    
    
    $
    1,583
    
    
    $
    
    
    
    $
    3,533Accounts payable
    
    
    39,753
    
    
    
    32,469
    
    
    
    
    
    
    
    72,222Accrued liabilities
    
    
    41,856
    
    
    
    14,085
    
    
    
    
    
    
    
    55,941Total current liabilities
    
    
    83,559
    
    
    
    48,137
    
    
    
    
    
    
    
    131,696Long-term debt:Long-term debt, excluding current maturities
    
    
    566,430
    
    
    
    160,045
    
    
    
    (149,925
    )
    
    
    576,550Senior Preferred Stock (Redeemable); 3,000,000
shares authorized, 1,200,000 shares issued and
outstanding; $121,495 current redemption value
    
    
    119,314
    
    
    
    
    
    
    
    
    
    
    
    119,314Total long-term debt
    
    
    685,744
    
    
    
    160,045
    
    
    
    (149,925
    )
    
    
    695,864Deferred tax liabilities
    
    
    33,314
    
    
    
    2,691
    
    
    
    
    
    
    
    36,005Other long-term liabilities
    
    
    10,207
    
    
    
    
    
    
    
    
    
    
    
    10,207Total liabilities
    
    
    812,824
    
    
    
    210,873
    
    
    
    (149,925
    )
    
    
    873,772Commitments and contingenciesStockholders (deficit) equity:Common stock, $0.01 par value; 1,000 shares
authorized, issued and outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in-capital
    
    
    115,674
    
    
    
    95,861
    
    
    
    (95,861
    )
    
    
    115,674Accumulated other comprehensive (loss) income
    
    
    (24,555
    )
    
    
    73,572
    
    
    
    (17,214
    )
    
    
    31,803Accumulated deficit
    
    
    (108,183
    )
    
    
    (82,439
    )
    
    
    
    
    
    
    (190,622
    )Total stockholders (deficit) equity
    
    
    (17,064
    )
    
    
    86,994
    
    
    
    (113,075
    )
    
    
    (43,145
    )Total liabilities and stockholders (deficit) equity
    
    $
    795,760
    
    
    $
    297,867
    
    
    $
    (263,000
    )
    
    $
    830,627
 15




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##### Table of Contents



DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Unaudited Condensed Consolidated Balance Sheets
For The Guarantor and Non-Guarantor Subsidiaries
 End of fiscal 2004Non-
    
    
    IntercompanyGuarantor
    
    
    guarantor
    
    
    eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    24,963
    
    
    $
    3,884
    
    
    $
    
    
    
    $
    28,847Accounts receivable, net
    
    
    48,660
    
    
    
    63,785
    
    
    
    
    
    
    
    112,445Inventories, net
    
    
    39,406
    
    
    
    28,915
    
    
    
    
    
    
    
    68,321Deferred tax assets
    
    
    2,414
    
    
    
    
    
    
    
    
    
    
    
    2,414Prepaid expenses and other current assets
    
    
    6,128
    
    
    
    910
    
    
    
    
    
    
    
    7,038Total current assets
    
    
    121,571
    
    
    
    97,494
    
    
    
    
    
    
    
    219,065Property, plant and equipment, net
    
    
    147,293
    
    
    
    110,777
    
    
    
    
    
    
    
    258,070Goodwill and other intangible assets
    
    
    267,780
    
    
    
    122,691
    
    
    
    
    
    
    
    390,471Other assets
    
    
    267,224
    
    
    
    14,436
    
    
    
    (247,360
    )
    
    
    34,300Total assets
    
    $
    803,868
    
    
    $
    345,398
    
    
    $
    (247,360
    )
    
    $
    901,906LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Current maturities of long-term debt
    
    $
    1,950
    
    
    $
    1,723
    
    
    $
    
    
    
    $
    3,673Accounts payable
    
    
    52,131
    
    
    
    50,018
    
    
    
    
    
    
    
    102,149Accrued liabilities
    
    
    46,623
    
    
    
    12,616
    
    
    
    
    
    
    
    59,239Total current liabilities
    
    
    100,704
    
    
    
    64,357
    
    
    
    
    
    
    
    165,061Long-term debt, excluding current maturities
    
    
    567,347
    
    
    
    165,574
    
    
    
    (152,831
    )
    
    
    580,090Senior Preferred Stock (Redeemable); 3,000,000
shares authorized, 1,200,000 shares issued and
outstanding; $110,942 current redemption value
    
    
    106,421
    
    
    
    
    
    
    
    
    
    
    
    106,421Total long-term debt
    
    
    673,768
    
    
    
    165,574
    
    
    
    (152,831
    )
    
    
    686,511Deferred tax liabilities
    
    
    30,714
    
    
    
    2,927
    
    
    
    
    
    
    
    33,641Other long-term liabilities
    
    
    9,567
    
    
    
    
    
    
    
    
    
    
    
    9,567Total liabilities
    
    
    814,753
    
    
    
    232,858
    
    
    
    (152,831
    )
    
    
    894,780Commitments and contingenciesStockholders (deficit) equity:Common stock, $0.01 par value; 1,000 shares
authorized, issued and outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in-capital
    
    
    115,674
    
    
    
    95,861
    
    
    
    (95,861
    )
    
    
    115,674Accumulated other comprehensive (loss) income
    
    
    (24,555
    )
    
    
    85,873
    
    
    
    1,332
    
    
    
    62,650Accumulated deficit
    
    
    (102,004
    )
    
    
    (69,194
    )
    
    
    
    
    
    
    (171,198
    )Total stockholders (deficit) equity
    
    
    (10,885
    )
    
    
    112,540
    
    
    
    (94,529
    )
    
    
    7,126Total liabilities and stockholders (deficit) equity
    
    $
    803,868
    
    
    $
    345,398
    
    
    $
    (247,360
    )
    
    $
    901,906
 16




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##### Table of Contents



DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Unaudited Condensed Consolidated Statements of Operations
For The Guarantor and Non-Guarantor Subsidiaries
 Third quarter 2005Non-Guarantor
    
    
    guarantor
    
    
    ConsolidatedNet sales
    
    $
    157,822
    
    
    $
    73,566
    
    
    $
    231,388Cost of goods sold
    
    
    135,819
    
    
    
    58,463
    
    
    
    194,282Gross profit
    
    
    22,003
    
    
    
    15,103
    
    
    
    37,106Operating expenses:Promotion and distribution
    
    
    5,603
    
    
    
    8,104
    
    
    
    13,707Selling, general and administrative
    
    
    8,492
    
    
    
    3,947
    
    
    
    12,439Amortization
    
    
    737
    
    
    
    203
    
    
    
    940Other operating expense, net
    
    
    8,109
    
    
    
    389
    
    
    
    8,498(Loss) income from operations
    
    
    (938
    )
    
    
    2,460
    
    
    
    1,522Interest expense, net
    
    
    12,983
    
    
    
    6,375
    
    
    
    19,358Other (income) expense, net
    
    
    (158
    )
    
    
    164
    
    
    
    6Loss before income taxes
    
    
    (13,763
    )
    
    
    (4,079
    )
    
    
    (17,842
    )Income tax expense
    
    
    1,049
    
    
    
    162
    
    
    
    1,211Net loss
    
    $
    (14,812
    )
    
    $
    (4,241
    )
    
    $
    (19,053
    )
 Third quarter 2004Non-Guarantor
    
    
    guarantor
    
    
    ConsolidatedNet sales
    
    $
    180,580
    
    
    $
    70,397
    
    
    $
    250,977Cost of goods sold
    
    
    162,925
    
    
    
    55,240
    
    
    
    218,165Gross profit
    
    
    17,655
    
    
    
    15,157
    
    
    
    32,812Operating expenses:Promotion and distribution
    
    
    5,970
    
    
    
    7,807
    
    
    
    13,777Selling, general and administrative
    
    
    8,667
    
    
    
    3,794
    
    
    
    12,461Amortization
    
    
    788
    
    
    
    205
    
    
    
    993Other operating expense
    
    
    
    
    
    
    1,168
    
    
    
    1,168Income from operations
    
    
    2,230
    
    
    
    2,183
    
    
    
    4,413Interest expense, net
    
    
    12,320
    
    
    
    6,112
    
    
    
    18,432Other (income) expense, net
    
    
    (183
    )
    
    
    93
    
    
    
    (90
    )Loss before income taxes
    
    
    (9,907
    )
    
    
    (4,022
    )
    
    
    (13,929
    )Income tax expense
    
    
    1,069
    
    
    
    227
    
    
    
    1,296Net loss
    
    $
    (10,976
    )
    
    $
    (4,249
    )
    
    $
    (15,225
    )
 17




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##### Table of Contents



DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Unaudited Condensed Consolidated Statements of Operations
For The Guarantor and Non-Guarantor Subsidiaries
 First nine months 2005Non-Guarantor
    
    
    guarantor
    
    
    ConsolidatedNet sales
    
    $
    524,949
    
    
    $
    217,447
    
    
    $
    742,396Cost of goods sold
    
    
    438,089
    
    
    
    172,377
    
    
    
    610,466Gross profit
    
    
    86,860
    
    
    
    45,070
    
    
    
    131,930Operating expenses:Promotion and distribution
    
    
    18,337
    
    
    
    24,529
    
    
    
    42,866Selling, general and administrative
    
    
    26,082
    
    
    
    12,287
    
    
    
    38,369Amortization
    
    
    2,502
    
    
    
    628
    
    
    
    3,130Other operating expense, net
    
    
    6,670
    
    
    
    117
    
    
    
    6,787Income from operations
    
    
    33,269
    
    
    
    7,509
    
    
    
    40,778Interest expense, net
    
    
    37,588
    
    
    
    19,447
    
    
    
    57,035Other (income) expense, net
    
    
    (1,287
    )
    
    
    600
    
    
    
    (687
    )Loss before income taxes
    
    
    (3,032
    )
    
    
    (12,538
    )
    
    
    (15,570
    )Income tax expense
    
    
    3,147
    
    
    
    707
    
    
    
    3,854Net loss
    
    $
    (6,179
    )
    
    $
    (13,245
    )
    
    $
    (19,424
    )
 First nine months 2004Non-Guarantor
    
    
    guarantor
    
    
    ConsolidatedNet sales
    
    $
    572,520
    
    
    $
    207,675
    
    
    $
    780,195Cost of goods sold
    
    
    509,641
    
    
    
    163,787
    
    
    
    673,428Gross profit
    
    
    62,879
    
    
    
    43,888
    
    
    
    106,767Operating expenses:Promotion and distribution
    
    
    19,325
    
    
    
    22,446
    
    
    
    41,771Selling, general and administrative
    
    
    25,773
    
    
    
    12,674
    
    
    
    38,447Amortization
    
    
    2,744
    
    
    
    612
    
    
    
    3,356Other operating (income) expense, net
    
    
    (415
    )
    
    
    6,744
    
    
    
    6,329Income from operations
    
    
    15,452
    
    
    
    1,412
    
    
    
    16,864Interest expense, net
    
    
    36,276
    
    
    
    18,319
    
    
    
    54,595Other (income) expense, net
    
    
    (1,317
    )
    
    
    489
    
    
    
    (828
    )Loss before income taxes
    
    
    (19,507
    )
    
    
    (17,396
    )
    
    
    (36,903
    )Income tax expense
    
    
    3,070
    
    
    
    796
    
    
    
    3,866Net loss
    
    $
    (22,577
    )
    
    $
    (18,192
    )
    
    $
    (40,769
    )
 18




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##### Table of Contents



DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Unaudited Condensed Consolidated Statements of Cash Flows
For The Guarantor and Non-Guarantor Subsidiaries
 First nine months 2005Non-Guarantor
    
    
    guarantor
    
    
    ConsolidatedCash flows from operating activities:Net loss
    
    $
    (6,179
    )
    
    $
    (13,245
    )
    
    $
    (19,424
    )Items not requiring (providing) cash:Depreciation and amortization
    
    
    16,900
    
    
    
    12,828
    
    
    
    29,728Deferred income tax expense
    
    
    3,147
    
    
    
    112
    
    
    
    3,259Asset impairments
    
    
    6,129
    
    
    
    
    
    
    
    6,129Other non-cash expense (income), net
    
    
    16,831
    
    
    
    (236
    )
    
    
    16,595Changes in current assets and liabilities
    
    
    (21,222
    )
    
    
    8,110
    
    
    
    (13,112
    )Net cash provided by operating activities
    
    
    15,606
    
    
    
    7,569
    
    
    
    23,175Cash flows from investing activities:Capital expenditures
    
    
    (10,543
    )
    
    
    (5,195
    )
    
    
    (15,738
    )Other, net
    
    
    (1,240
    )
    
    
    99
    
    
    
    (1,141
    )Net cash used in investing activities
    
    
    (11,783
    )
    
    
    (5,096
    )
    
    
    (16,879
    )Cash flows from financing activities:Principal payments on long-term debt
    
    
    (1,463
    )
    
    
    (1,184
    )
    
    
    (2,647
    )Payments for debt issuance costs
    
    
    (1,624
    )
    
    
    
    
    
    
    (1,624
    )Net cash used in financing activities
    
    
    (3,087
    )
    
    
    (1,184
    )
    
    
    (4,271
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    (469
    )
    
    
    (469
    )Increase in cash and cash equivalents
    
    
    736
    
    
    
    820
    
    
    
    1,556Cash and cash equivalents, beginning of period
    
    
    24,963
    
    
    
    3,884
    
    
    
    28,847Cash and cash equivalents, end of period
    
    $
    25,699
    
    
    $
    4,704
    
    
    $
    30,403
 19




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##### Table of Contents



DOANE PET CARE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Unaudited Condensed Consolidated Statements of Cash Flows
For The Guarantor and Non-Guarantor Subsidiaries
 First nine months 2004Non-Guarantor
    
    
    guarantor
    
    
    ConsolidatedCash flows from operating activities:Net loss
    
    $
    (22,577
    )
    
    $
    (18,192
    )
    
    $
    (40,769
    )Items not requiring (providing) cash:Depreciation and amortization
    
    
    17,183
    
    
    
    12,385
    
    
    
    29,568Deferred income tax expense
    
    
    3,070
    
    
    
    166
    
    
    
    3,236Asset impairments
    
    
    420
    
    
    
    
    
    
    
    420Other non-cash expense (income), net
    
    
    14,405
    
    
    
    (160
    )
    
    
    14,245Changes in current assets and liabilities
    
    
    (25,655
    )
    
    
    12,292
    
    
    
    (13,363
    )Net cash (used in) provided by operating activities
    
    
    (13,154
    )
    
    
    6,491
    
    
    
    (6,663
    )Cash flows from investing activities:Capital expenditures
    
    
    (5,186
    )
    
    
    (4,748
    )
    
    
    (9,934
    )Other, net
    
    
    1,572
    
    
    
    (2,210
    )
    
    
    (638
    )Net cash used in investing activities
    
    
    (3,614
    )
    
    
    (6,958
    )
    
    
    (10,572
    )Cash flows from financing activities:Proceeds from the issuance of long-term debt
    
    
    
    
    
    
    13,078
    
    
    
    13,078Principal payments on long-term debt
    
    
    (6,087
    )
    
    
    (14,121
    )
    
    
    (20,208
    )Payments for debt issuance costs
    
    
    (3,006
    )
    
    
    
    
    
    
    (3,006
    )Net cash used in financing activities
    
    
    (9,093
    )
    
    
    (1,043
    )
    
    
    (10,136
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    332
    
    
    
    332Decrease in cash and cash equivalents
    
    
    (25,861
    )
    
    
    (1,178
    )
    
    
    (27,039
    )Cash and cash equivalents, beginning of period
    
    
    25,939
    
    
    
    3,354
    
    
    
    29,293Cash and cash equivalents, end of period
    
    $
    78
    
    
    $
    2,176
    
    
    $
    2,254
 20




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 21




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##### Table of Contents



ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Forward-Looking Statements
  
    
    reliance on a few customers for a large portion of our sales and our ability
to maintain our relationships with these customers;
    
    our exposure to, and our ability to manage, our market risk relating to
commodity, oil and natural gas prices, interest rates and foreign currency exchange rates;
    
    changes in demand for our products;
    
    future capital expenditures and our ability to finance these capital expenditures;
    
    our ability to make required principal and interest payments on our new
senior credit facility and other indebtedness and to comply with the financial covenants
under our debt agreements;
    
    our business strategies and other plans and objectives for future operations;
    
    general economic and business conditions and changes in market trends;
    
    business opportunities that may be presented to and pursued by us from time to time;
    
    risks related to our international operations;
    
    risks related to product liability claims and product recalls;
    
    the outcome of any legal proceedings to which we or any of our subsidiaries
may be a party; and
    
    the impact of existing or new accounting pronouncements.
  22




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##### Table of Contents



Recent Developments
 Acquisition
     Financing Transactions
  
    
    the closing of a $210.0 million senior credit facility;
    
    the closing of a private placement for $152.0 million in aggregate principal amount
of 10 5/8% senior subordinated notes due November 15, 2015;
    
    the termination and full settlement of our existing $230.0 million senior credit
facility;
 23




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##### Table of Contents




    
    the redemption of our
9
3/4%
senior subordinated notes due 2007 at a price of 100% of the
aggregate principal amount of $150.0 million,
plus accrued and unpaid interest to, but not including, the
redemption date of November 24, 2005;
    
    the commencement of a change of control offer to purchase our existing 14.25% senior
preferred stock at a purchase price equal to 101% of the liquidation value thereof,
which includes a 1% change of control premium, plus accrued and
unpaid dividends to, but not including, the purchase date of November
22, 2005. Assuming all holders tender in the
change of control offer, we expect to pay approximately $125.2 million to holders on
or about the purchase date. To the extent any holders fail to tender such offer, we
will redeem our senior preferred stock at 100% of the liquidation value thereof
on or about the purchase date; and
    
    the commencement of a change of control offer to purchase our 10 3/4% senior notes, at a
purchase price equal to 101% of the principal amount thereof, which includes a 1%
change of control premium, plus accrued and unpaid interest to, but not including, the
purchase date of November 22, 2005. We have received a written commitment from a lender to
provide financing for any repurchase obligations that may arise as a result of such
offer. We do not anticipate that holders of the senior notes will exercise this right
based on current trading levels of the senior notes.
   Stock Incentive Plan
  Third Quarter Fiscal 2005 in Review
  24




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##### Table of Contents



Results of Operations
    25




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##### Table of Contents



Statement of operations data.
 Third quarter
    
    
    First nine months2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    231,388
    
    
    
    100.0
    %
    
    $
    250,977
    
    
    
    100.0
    %
    
    $
    742,396
    
    
    
    100.0
    %
    
    $
    780,195
    
    
    
    100.0
    %Cost of goods sold:Commodity costs
    
    
    106,241
    
    
    
    45.9
    
    
    
    129,427
    
    
    
    51.6
    
    
    
    346,548
    
    
    
    46.7
    
    
    
    399,903
    
    
    
    51.2Other
    
    
    88,041
    
    
    
    38.1
    
    
    
    88,738
    
    
    
    35.3
    
    
    
    263,918
    
    
    
    35.5
    
    
    
    273,525
    
    
    
    35.1Total cost of goods sold
    
    
    194,282
    
    
    
    84.0
    
    
    
    218,165
    
    
    
    86.9
    
    
    
    610,466
    
    
    
    82.2
    
    
    
    673,428
    
    
    
    86.3Gross profit
    
    
    37,106
    
    
    
    16.0
    
    
    
    32,812
    
    
    
    13.1
    
    
    
    131,930
    
    
    
    17.8
    
    
    
    106,767
    
    
    
    13.7Operating expenses:Promotion and distribution
    
    
    13,707
    
    
    
    5.9
    
    
    
    13,777
    
    
    
    5.5
    
    
    
    42,866
    
    
    
    5.8
    
    
    
    41,771
    
    
    
    5.4Selling, general and administrative
    
    
    12,439
    
    
    
    5.3
    
    
    
    12,461
    
    
    
    5.0
    
    
    
    38,369
    
    
    
    5.2
    
    
    
    38,447
    
    
    
    4.9Amortization
    
    
    940
    
    
    
    0.4
    
    
    
    993
    
    
    
    0.4
    
    
    
    3,130
    
    
    
    0.4
    
    
    
    3,356
    
    
    
    0.4Other operating expense, net
    
    
    8,498
    
    
    
    3.7
    
    
    
    1,168
    
    
    
    0.5
    
    
    
    6,787
    
    
    
    0.9
    
    
    
    6,329
    
    
    
    0.8Income from operations
    
    
    1,522
    
    
    
    0.7
    
    
    
    4,413
    
    
    
    1.7
    
    
    
    40,778
    
    
    
    5.5
    
    
    
    16,864
    
    
    
    2.2Interest expense, net
    
    
    19,358
    
    
    
    8.4
    
    
    
    18,432
    
    
    
    7.3
    
    
    
    57,035
    
    
    
    7.7
    
    
    
    54,595
    
    
    
    7.0Other expense (income), net
    
    
    6
    
    
    
    
    
    
    
    (90
    )
    
    
    
    
    
    
    (687
    )
    
    
    (0.1
    )
    
    
    (828
    )
    
    
    (0.1
    )Loss before income taxes
    
    
    (17,842
    )
    
    
    (7.7
    )
    
    
    (13,929
    )
    
    
    (5.6
    )
    
    
    (15,570
    )
    
    
    (2.1
    )
    
    
    (36,903
    )
    
    
    (4.7
    )Income tax expense
    
    
    1,211
    
    
    
    0.5
    
    
    
    1,296
    
    
    
    0.5
    
    
    
    3,854
    
    
    
    0.5
    
    
    
    3,866
    
    
    
    0.5Net loss
    
    $
    (19,053
    )
    
    
    (8.2
    )%
    
    $
    (15,225
    )
    
    
    (6.1
    )%
    
    $
    (19,424
    )
    
    
    (2.6
    )%
    
    $
    (40,769
    )
    
    
    (5.2
    )%
 Third Quarter of Fiscal 2005 Compared to Third Quarter of Fiscal 2004
 Net sales
 Gross profit.
 Promotion and distribution
 Other operating expense, net.
 26




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##### Table of Contents



Interest expense, net
 Income tax expense
 First Nine Months of Fiscal 2005 Compared to First Nine Months of Fiscal 2004
 Net sales.
 Gross profit.
 Promotion and distribution
 Other operating expense, net
 Interest expense, net.
 Income tax expense.
 27




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##### Table of Contents



Liquidity and Capital Resources
  Cash and Cash Flows
    Liquidity
   5 8
  28




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##### Table of Contents



Debt
  End ofOctober 24,
    
    
    third quarter2005
    
    
    2005Revolving credit facility
    
    $
    
    
    
    $
    Euro term
loan facility
    
    
    55,000
    
    
    
    U.S. dollar
term loan facility
    
    
    105,000
    
    
    
    Existing term loan facility
    
    
    
    
    
    
    193,05010 3⁄4% senior notes
    
    
    232,170
    
    
    
    211,41210 5/8% senior subordinated notes
    
    
    150,824
    
    
    
    9 3⁄4% senior subordinated notes
    
    
    
    
    
    
    149,416Industrial development revenue bonds
    
    
    14,502
    
    
    
    14,502Debt of foreign subsidiaires
    
    
    11,601
    
    
    
    11,703569,097
    
    
    
    580,083Less: Current maturities
    
    
    (3,169
    )
    
    
    (3,533
    )565,928
    
    
    
    576,550Senior preferred stock
    
    
    
    
    
    
    119,314Total
    
    $
    565,928
    
    
    $
    695,864
 New Senior Credit Facility
  29




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##### Table of Contents



The facilities.
  Interest.
 Maturities.
 Prepayments.
  Guarantees; collateral.
 Covenants.
 New 10
5/8% Senior Subordinated Notes
 5 8
 5 8
 Interest
 30




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##### Table of Contents



Maturity.
 Redemption.
 Guarantees.
 Covenants.
 Use of Proceeds
  Long-Term Debt Maturities
  MaturitiesEnd ofOctober 24,
    
    
    third quarterFiscal
    
    2005
    
    
    20052005
    
    $
    786
    
    
    $
    8772006
    
    
    3,155
    
    
    
    3,5192007
    
    
    3,587
    
    
    
    461,3452008
    
    
    3,723
    
    
    
    2,1382009
    
    
    3,864
    
    
    
    2,2802010 and thereafter
    
    
    553,982
    
    
    
    229,238Total
    
    $
    569,097
    
    
    $
    699,397
 Commitments and Contingencies
  31




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##### Table of Contents



Off Balance Sheet Arrangements
  Inflation and Changes in Prices
   Seasonality
  Recently Issued Accounting Pronouncements
  Critical Accounting Policies
 Accounts receivable allowances.
 32




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##### Table of Contents



Inventories allowances.
 Deferred tax assets.
  Goodwill and other intangible assets.
 
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  Commodity price risk.
  33




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##### Table of Contents



Interest rate risk.
  Foreign currency exchange risk
  
 ITEM 4. Controls and Procedures
 Evaluation of disclosure controls and procedures.
 34




---



##### Table of Contents



Changes in internal control over financial reporting.
 35




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##### Table of Contents



PART II. Other Information
 
 ITEM 1. Legal Proceedings
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
  
 ITEM 5. Other Information
  
 ITEM
6. Exhibits
 ExhibitNumber
    
    Description2.1*
    
    Agreement and Plan of Merger dated August 28, 2005 by and among DPC Newco
Inc., Doane Pet Care Enterprises, Inc. and Doane Pet Care Company.15.1*
    
    Letter from KPMG LLP dated
November 4, 2005 regarding unaudited interim
financial information.31.1*
    
    Certification of Principal Executive Officer pursuant to Rule 13a-14(a) /
15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14(a) /
15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes Oxley Act of 2002.32.1
    
    Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.
    
    Furnished herewith. 36




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##### Table of Contents



SIGNATURES
  DOANE PET CARE COMPANYBy:
    /s/ PHILIP K. WOODLIEFPhilip K. WoodliefVice President, Finance and Chief Financial OfficerBy:
    /s/ STEPHEN P. HAVALAStephen P. HavalaCorporate Controller and Principal Accounting Officer  37




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description2.1*
    
    Agreement and Plan of Merger dated August 28, 2005 by and among DPC Newco
Inc., Doane Pet Care Enterprises, Inc. and Doane Pet Care Company.15.1*
    
    Letter from KPMG LLP dated November 4, 2005, regarding unaudited interim
financial information.31.1*
    
    Certification of Principal Executive Officer pursuant to Rule 13a-14(a) /
15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes Oxley Act of 2002.31.2*
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14(a) /
15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes Oxley Act of 2002.32.1
    
    Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.
    
    Furnished herewith.