ScottsMiracle-Gro Announces 3Q Results; Outlines Steps to Improve Profitability and
ScottsMiracle-Gro Announces Third Quarter Results; Outlines Steps to Improve Profitability and Operating Cash Flow in 2013
Quarterly dividend increased by 8% to $0.325 per share
MARYSVILLE, Ohio, Aug. 9, 2012 /PRNewswire via COMTEX/ --The Scotts Miracle-Gro Company (NYSE: SMG), the world's largest marketer of branded consumer lawn and garden products, today announced its results for the third quarter ended June 30, 2012.
Sales in the quarter were $1.06 billion, the same as a year ago. Adjusted income from continuing operations was $99.4 million, or $1.60 per share. That compares with adjusted income of $126.7 million, or $1.91 per share, for the same period a year ago.
The Company said consumer purchases of its products at its largest retail partners in the U.S. were up 1 percent on a year-to-date basis entering August after declining 5 percent in the third quarter.
"After a strong start to the season, consumer engagement clearly began to decline in May and June," said Jim Hagedorn, chairman and chief executive officer. "We're pleased to see strong year-over-year improvement in consumer purchases of mulch and controls, but our fertilizer and growing media categories are flat so far this year and have not delivered the results we expected.
"As we look ahead to fiscal 2013, it has become clear that the pace of near-term category growth is slower than we had expected. While our strategy to become a more consumer-centric business will not change, we are adjusting how we execute that strategy. We will move as quickly as we reasonably can to restore the level of profitability that our business reported just two years ago. In addition to planned price increases, we're focusing on several other initiatives to improve the gross margin rate and we will reduce expenses in areas that have not delivered a reasonable rate of return. We are confident that an emphasis on gross margin improvement, cost productivity and working capital management will drive improved earnings and cash flow."
Hagedorn said the Company's near-term growth assumptions would require less operating cash be deployed for capital expenditures and acquisitions. The near-term bias, he stated, would be to focus over time on more shareholder-friendly actions.
"While we will continue to evaluate acquisition opportunities, our near-term focus will be on restoring our current business to an appropriate level of profitability, not on integrating something new," Hagedorn said.
Separately, the Company announced its Board of Directors has approved an 8 percent increase in the quarterly dividend to $0.325 per share. The fourth quarter dividend is payable September 10 to shareholders of record on August 27.
THIRD QUARTER DETAILS
Sales in the Company's largest segment, Global Consumer, increased 1 percent from last year to $960.7 million. Sales in the U.S. business increased 6 percent while sales in the International business decreased 17 percent, or 12 percent excluding the impact of foreign exchange rates. Operating income for Global Consumer was $171.7 million, compared with $209.9 million for the same period a year ago, with the decline principally attributed to increased commodity costs and advertising.