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Columbus, Ohio
January 25, 2001
The Scotts Company (NYSE: SMG) today reported that its results for
first quarter fiscal 2001 were in line with the Company's expectations. Net sales were $152.6
million, earnings were a net loss of $51.2 million, or a loss per share of $1.83, and cash earnings per share were a loss of $1.60. Net sales in the prior year period were
$191.5 million, earnings were a net loss of $30.8 million, or a loss per share of $1.32, and cash earnings per share were a loss of
$1.10. Cash earnings are defined as net earnings plus amortization.
"As anticipated, first quarter earnings are lower this year because of changes we have made in the way we go to market," said
Charles M. Berger, Scotts' chairman and chief executive officer. "Sales have been pushed from the first quarter to later quarters
because our products are being delivered directly to retailers and closer to the time that they actually sell them, and fixed costs have
increased because selling functions previously outsourced to distributors are now incorporated into Scotts' sales force."
Earnings before interest, taxes, depreciation and amortization (EBITDA) for first quarter 2001 were a loss of $47.4 million, compared
to a loss of $11.7 million in last year's first quarter.
"We remain optimistic about our top-line expectations because our strong media advertising program combined with improved retailer
programs and our market share momentum will continue to drive sales growth at double digit levels for the year," said Mr. Berger.
"Also, our aggressive program to increase return on invested capital will help us hit our net earnings growth target for 2001 of at least
15% over last year's earnings."
The biggest impact of Scotts' new distribution plan was felt in the North American Consumer lawns business, where the first quarter
2001 sales were $17.7 million compared to $45.1 million in last year's first quarter. In Scotts' other North American consumer
businesses, first quarter 2001 growing media sales were $21.0 million compared to $19.9 million in last year's first quarter, garden
sales were $8.0 million compared to $14.2 million, Ortho group sales were $16.5 million compared to $18.2 million, and sales in the
Scotts' Lawn Service business were $4.9 million compared to $2.8 million.
International consumer sales for first quarter 2001 were $41.9 million compared to $49.1 million in last year's first quarter. Excluding
the impact of foreign exchange rates, sales for the first quarter 2001 decreased 6% compared to the prior period. This expected
decrease was due to Scotts' decision to discontinue the private label growing media business in the U.K., and customers shifting
deliveries from December to January due to their increased focus on products other than lawn and garden during the Christmas
season.
Sales in the Company's global professional group were $35.2 million for first quarter 2001 compared to sales of $40.8 million in last
year's first quarter. On a pro forma basis to adjust for the May 2000 sale of the ProTurf(R) business and excluding the effect of foreign
exchange rate changes, sales for this segment increased 4% compared to the prior year period. The Company recorded a net
expense of $4.7 million related to the Roundup commission for the first quarter of 2001, compared to a net expense of $3.4 million in
last year's first quarter. These first quarter expenses primarily reflect the amortization of the contribution payment required under the
agency agreement with Monsanto for Roundup operating expenses. Consistent with the prior year, the Company has not recorded
any commission in the first quarter and will not recognize commission until minimum EBIT levels required by the Roundup agreement
are reached.
The Scotts Company is the world's leading supplier of consumer products for lawn and garden care, with a full range of products for
professional turf care and horticulture as well. The Company owns the industry's most recognized brands. In the U.S., the Company's
Scotts(R), Miracle-Gro(R) and Ortho(R) brands are market leading in their categories, as is the consumer Roundup(R) brand which is
marketed in North America and most of Europe exclusively by Scotts and owned Monsanto. In the U.K., Scotts' brands include
Weedol(R) and Pathclear(R), the top-selling consumer herbicides; Evergreen(R), the leading lawn fertilizer line; the Levington(R) line of
lawn and garden products; and Miracle-Gro(R), the leading plant fertilizer. The Company's leading brands in continental Europe
include KB(R) and Fertiligene(R) in France and NexaLotte(R) and Celaflor(R) in Germany.
Company news release
N3280 |
