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ScottsMiracle-Gro Announces Record Second Quarter Results; Strong Consumer Support Evident as Lawn & Garden Season Nears Peak

MARYSVILLE, Ohio, May 6, 2010 /PRNewswire via COMTEX/ --Consumer purchases at major U.S. retailers up 11% through May 2Second quarter sales climb 19% to record $1.12 billion Adjusted gross margin rate improves 80 basis pointsReported earnings from continuing operations: $1.78 per shareAdjusted earnings per share grows $0.45 to $1.80Company increases full-year adjusted EPS guidance to $3.25 or higher

The Scotts Miracle-Gro Company (NYSE: SMG), the world's largest marketer of branded consumer lawn and garden products, announced today that high levels of consumer demand and strong retailer support resulted in record second quarter results - including a 19 percent improvement in company-wide sales.

Consumer purchases of the Company's products at its major U.S. retailers were up 7 percent fiscal year-to-date through the quarter, which ended April 3. Strong growth in April led to fiscal year-to-date improvement of 11 percent through May 2. Nearly 40 states have reported double-digit increases in consumer purchases with growth in every consumer category.

Based on the robust start to the season, the Company raised its full-year outlook for adjusted earnings to $3.25 per share or better, compared with previous guidance of $3.00 to $3.10 per share.

"We couldn't be more pleased with the level of consumer engagement we're seeing and the support we're receiving from our retail partners," said Jim Hagedorn, chairman and chief executive officer. "The sell-in to our retailers in the second quarter was extremely strong and our brands are once again front and center in driving growth in the lawn and garden category. We appear to be on our way to another year of record results and believe adjusted earnings will be at least $3.25 per share. The next several weeks remain critical to the year and we expect to provide an update to our outlook in mid-June."

SECOND QUARTER RESULTS

For the quarter ended April 3, 2010, ScottsMiracle-Gro reported sales of $1.12 billion, up 19 percent from last year and driven by a 21 percent improvement in its largest segment, Global Consumer. Excluding the impact of foreign exchange, company-wide sales increased 17 percent.

It is important to note that the timing of the Company's fiscal calendar resulted in a five-day shift forward of the second quarter end as compared with 2009. When adjusted to reflect comparable reporting periods, company-wide sales in the second quarter were up 10 percent. The shift impacted earnings by $0.23 per share for the quarter. There is no full-year impact as the shift will reverse itself in the second half of the fiscal year.

Reported sales for Global Consumer were $1.01 billion, up from $840.6 million for the same period last year. Excluding the impact of foreign exchange, sales for Global Consumer increased 19 percent. Increased sales and improved gross margins resulted in adjusted operating income for the Global Consumer segment of $254.5 million, a 28 percent improvement from $199.5 million for the same period last year.

Scotts LawnService reported a 7 percent decrease in sales to $30.6 million from $32.8 million. Improved operating efficiencies resulted in an 11 percent improvement in the segment operating loss, reducing the loss to $14.4 million compared with $16.1 million a year ago. Scotts LawnService historically earns all of its profits in the second half, although the business reported its first profitable March on record.

Global Professional sales increased by 16 percent to $78.0 million from $67.5 million last year. Excluding the impact in changes in foreign currency, sales increased 10 percent. Unit volume improved in most areas of the business, and operating income for the segment was $7.7 million, essentially flat with the same period last year.

"We're pleased with the results from all our segments and particularly encouraged that Scotts LawnService appears to be trending in a favorable direction," Hagedorn said. "Our Global Professional business also appears to have positive momentum with strong unit volume growth. We expect a strong rebound in Global Professional's operating income in the second half as both costs and pricing normalize."

For the quarter, company-wide adjusted gross margin increased to 38.9 percent compared with 38.1 percent a year earlier. The Company had projected that the gross margin rate would be less than the prior year for the quarter, but stable commodity costs combined with significantly higher volume drove the rate higher.

Selling, general and administrative expenses (SG&A) increased in the quarter to $228.4 million from $204.0 million a year earlier. The increase was due primarily to increased advertising and sales support for early season products.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 35 percent to $207.6 million from $154.2 million a year ago.

Adjusted income from continuing operations was $121.0 million, or $1.80 per share, compared with $89.1 million, or $1.35 per share, for the same period last year. Theses results exclude the impact of product registration and recall costs. Including those items, reported income from continuing operations was $119.9 million, or $1.78 per share, compared with $84.1 million, or $1.28 per share, for the same period last year.

FIRST-HALF DETAILS

Company-wide net sales through the first six months were $1.43 billion, a 16 percent increase from a year ago. Excluding the impact of foreign exchange, sales increased 14 percent. When adjusted to reflect the shift in the fiscal calendar, company-wide sales increased 8 percent on a year-to-date basis.

Reported sales for Global Consumer increased 19 percent to $1.23 billion versus $1.03 billion for last year's comparable period. Scotts LawnService sales decreased 11 percent to $63.6 million. Global Professional reported sales of $133.4 million an increase of 5 percent from the same period last year. Excluding the impact of foreign exchange, Global Professional sales were essentially flat, with unit volume growth of about 9 percent offsetting declining prices.

For the first six months, company-wide adjusted gross margin was 35.3 percent compared with 35.7 percent in the same period last year. SG&A increased 7 percent to $366.0 million.

"We are extremely pleased with the vigorous pace of volume growth in the Consumer segment and the improving trend in gross margin rates during the second quarter," said Dave Evans, chief financial officer. "We established a long-term goal of restoring gross margin rates to historic levels in order to continue investing in key initiatives to drive future growth. This is another step in the right direction."

Adjusted EBITDA in the first six months increased 53 percent to $146.7 million versus $95.9 million in the comparable period last year.

Adjusted income from continuing operations for the first six months - which excludes costs related to the product registration and recall matters - increased 77 percent to $72.9 million, or $1.08 per share, compared with $41.1 million, or $0.63 per share, a year earlier. Reported income from continuing operations was $70.1 million, or $1.04 per share, compared with $31.2 million, or $0.47 per share, the same period last year.

FULL-YEAR OUTLOOK

The Company's updated outlook for the full-year now assumes sales growth of 7 to 8 percent, with stronger growth expected in the Global Consumer segment. Gross margin rate is also likely to be better than originally anticipated, with an improvement of up to 50 basis points due mostly to efficiencies generated by higher sales volume.

SG&A expense for the full year, which management had previously anticipated to be flat from 2009, is expected to increase 3 to 4 percent. The Company now anticipates increased investments in both sales and advertising to drive continued volume momentum. Also, the strong operating performance is likely to result in less year-over-year improvement related to variable compensation than previously expected.

Free cash flow is expected to exceed $200 million, compared with previous guidance of about $190 million.

"Given the strong start to the season and continued support from our retail partners, we believe our updated guidance accurately reflects our outlook for the business on a real-time basis," Hagedorn said. "The month of May remains a critical time of our year and our team will stay focused on continuing to drive our business during this peak season as well as throughout the year."

The Company will discuss its second quarter results during a Webcast and conference call at 10 a.m. Eastern Time today. The call will be available live on the Investor Relations section of the ScottsMiracle-Gro Web site, http://investor.scotts.com.

An archive of the Webcast, as well as accompanying financial information regarding any non-GAAP financial measures discussed by the Company during the call, will be available on the Web site for at least 12 months.

About ScottsMiracle-Gro

With approximately $3 billion in worldwide sales, The Scotts Miracle-Gro Company, through its wholly-owned subsidiary, The Scotts Company LLC, is the world's largest marketer of branded consumer products for lawn and garden care, with products for professional horticulture as well. The Company's brands are the most recognized in the industry. 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 by Monsanto. In the U.S., we operate Scotts LawnService(R), the second largest residential lawn care service business. In Europe, the Company's brands include Weedol(R), Pathclear(R), Evergreen(R), Levington(R), Miracle-Gro(R), KB(R), Fertiligene(R) and Substral(R). For additional information, visit us at www.scotts.com.

Statement under the Private Securities Litigation Act of 1995: Certain of the statements contained in this press release, including, but not limited to, information regarding the future economic performance and financial condition of the Company, the plans and objectives of the Company's management, and the Company's assumptions regarding such performance and plans are forward looking in nature. Actual results could differ materially from the forward-looking information in this release due to a variety of factors, including, but not limited to:

  • The ongoing governmental investigations regarding the Company's compliance with the Federal Insecticide, Fungicide, and Rodenticide Act of 1947, as amended, could adversely affect the Company's financial condition, results of operations or cash flows;
  • Compliance with environmental and other public health regulations could increase the Company's costs of doing business or limit the Company's ability to market all of its products;
  • Increases in the prices of certain raw materials could adversely affect the Company's results of operations;
  • The Company faces risks related to the current economic crisis;
  • The highly competitive nature of the Company's markets could adversely affect its ability to grow or maintain revenues;
  • Because of the concentration of the Company's sales to a small number of retail customers, the loss of one or more of, or significant reduction in orders from, its top customers could adversely affect the Company's financial results;
  • Adverse weather conditions could adversely impact financial results;
  • The Company's historical seasonality could impair its ability to pay obligations as they come due, including the Company's operating expenses;
  • The Company's substantial indebtedness could limit its flexibility and adversely affect its financial condition;
  • The Company's significant international operations make the Company susceptible to fluctuations in currency exchange rates and to other costs and risks associated with international regulation;
  • The Company may not be able to adequately protect its intellectual property and other proprietary rights that are material to the Company's business;
  • The Company depends on key personnel and may not be able to retain those employees or recruit additional qualified personnel;
  • If Monsanto Company were to terminate the Marketing Agreement for consumer Roundup products without being required to pay any termination fee, the Company would lose a substantial source of future earnings and overhead expense absorption;
  • Hagedorn Partnership, L.P. beneficially owns approximately 31% of the Company's outstanding common shares on a fully diluted basis and can significantly influence decisions that require the approval of shareholders, whether or not such decisions are in the best interest of other shareholders or the holders of the Company's 7.25% coupon rate Senior Notes due 2018;
  • The Company may pursue acquisitions, dispositions, investments, dividends, share repurchases and/or other corporate transactions that it believes will maximize equity returns of our shareholders but may involve risks.

Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Company's publicly filed quarterly, annual and other reports.


               THE SCOTTS MIRACLE-GRO COMPANY
     Results of Operations for the Three and Six Months
           Ended April 3, 2010 and March 28, 2009
            (in millions, except per share data)
                        (Unaudited)
        Note: See Accompanying Footnotes on Page 14


                                               Three Months Ended
                                               ------------------
                                                            March
                                            April 3,         28,       %
                                 Footnotes      2010          2009  Change
                                 ---------      ----          ----  ------

    Net sales                               $1,123.1        $940.7       19%
    Cost of sales                              686.5         581.9
    Cost of sales -
     product registration
     and recall matters                          0.6           2.5
                                                 ---           ---

    Gross profit                               436.0         356.3       22%
    % of sales                                  38.8%         37.9%

    Operating expenses:
      Selling, general and
       administrative                          228.4         204.0       12%
      Product registration
       and recall matters                        1.1           5.5
      Other expense
       (income), net                             0.2           0.4
                                                 ---           ---

    Income from operations                     206.3         146.4       41%
    % of sales                                  18.4%         15.6%

    Interest expense                            15.1          15.9
                                                ----          ----

    Income from continuing
     operations before
     income taxes                              191.2         130.5       47%

    Income tax expense
     from continuing
     operations                                 71.3          46.4
                                                ----          ----

    Income from continuing
     operations                                119.9          84.1       43%

    Loss from discontinued
     operations, net of
     tax                                        (1.4)         (6.7)
                                                ----          ----

    Net income                                $118.5         $77.4
                                              ======         =====



    Basic income per
     common share:                      (1)
         Income from continuing
          operations                           $1.81         $1.29
         Loss from discontinued
          operations                           (0.02)        (0.10)
                                               -----         -----
    Net income                                 $1.79         $1.19
                                               =====         =====

    Diluted income per
     common share:                      (2)
         Income from continuing
          operations                           $1.78         $1.28
         Loss from discontinued
          operations                           (0.02)        (0.10)
    Net income                                 $1.76         $1.18
                                               =====         =====

    Common shares used in
     basic
          income per share
           calculation                          66.2          64.9
                                                ====          ====

    Common shares and
     potential common
          shares used in diluted
           income
          per share calculation                 67.4          65.8
                                                ====          ====



    Results from
     continuing operations
     excluding
          product registration
           and recall matters:

    Adjusted income from
     continuing operations              (4)   $121.0         $89.1       36%
                                              ======         =====

    Adjusted diluted
     income per share from
     continuing operations         (2) (4)     $1.80         $1.35       33%
                                               =====         =====

    Adjusted EBITDA                (3) (4)    $207.6        $154.2       35%
                                              ======        ======




                                               Six Months Ended
                                               ----------------
                                                           March
                                           April 3,         28,       %
                                               2010          2009  Change
                                               ----          ----  ------

    Net sales                              $1,425.3      $1,226.8       16%
    Cost of sales                             922.7         789.4
    Cost of sales -product
     registration and recall matters            1.5           3.8
                                                ---           ---

    Gross profit                              501.1         433.6       16%
    % of sales                                 35.2%         35.3%

    Operating expenses:
      Selling, general and administrative     366.0         342.7        7%
      Product registration and recall
       matters                                  2.8          11.7
      Other expense (income), net              (6.4)         (1.3)
                                               ----          ----

    Income from operations                    138.7          80.5       72%
    % of sales                                  9.7%          6.6%

    Interest expense                           25.8          32.2
                                               ----          ----

    Income from continuing operations
     before income taxes                      112.9          48.3      134%

    Income tax expense from continuing
     operations                                42.8          17.1
                                               ----          ----

    Income from continuing operations          70.1          31.2      125%

    Loss from discontinued operations,
     net of tax                                (9.3)        (10.8)
                                               ----         -----

    Net income                                $60.8         $20.4
                                              =====         =====



    Basic income per common share:
         Income from continuing operations    $1.06         $0.48
         Loss from discontinued operations    (0.14)        (0.17)
                                              -----         -----
    Net income                                $0.92         $0.31
                                              =====         =====

    Diluted income per common share:
         Income from continuing operations    $1.04         $0.47
         Loss from discontinued operations    (0.14)        (0.16)
    Net income                                $0.90         $0.31
                                              =====         =====

    Common shares used in basic
          income per share calculation         66.0          64.8
                                               ====          ====

    Common shares and potential common
          shares used in diluted income
          per share calculation                67.2          65.7
                                               ====          ====



    Results from continuing operations
     excluding
          product registration and recall
           matters:

    Adjusted income from continuing
     operations                               $72.9         $41.1       77%
                                              =====         =====

    Adjusted diluted income per share
     from continuing operations               $1.08         $0.63       73%
                                              =====         =====

    Adjusted EBITDA                          $146.7         $95.9       53%
                                             ======         =====


                     THE SCOTTS MIRACLE-GRO COMPANY
     Net Sales and Income (Loss) from Operations by Segment for the
       Three and Six Months Ended April 3, 2010 and March 28, 2009
                              (in millions)
                               (Unaudited)






    The Company is divided into the following reportable segments: Global
    Consumer, Global Professional, Scotts LawnService(R) and Corporate &
    Other. The Corporate & Other segment consists of corporate general
    and administrative expenses.  This division of reportable segments
    is consistent with how the segments report to and are managed by
    senior management of the Company.  Certain reclassifications were
    made to the Global Consumer and Global Professional prior period
    amounts to reflect changes in the structure of the Company's
    organization effective fiscal 2010.

    Segment performance is evaluated based on several factors, including
    income from continuing operations before amortization, product
    registration and recall costs, and impairment, restructuring and
    other charges, which are not generally accepted accounting
    principles ("GAAP") measures. Management uses this measure of
    operating profit to gauge segment performance because we believe
    this measure is the most indicative of performance trends and the
    overall earnings potential of each segment.

    The Company follows a 13-week quarterly accounting cycle, with our
    first three fiscal quarters ending on a Saturday, while our fiscal
    year end always occurs on September 30th.  This fiscal calendar
    convention requires the Company to cycle forward its first three
    fiscal quarter ends every four to five years.  Fiscal 2010 is the
    most recent year impacted by this fiscal quarter end cycle forward
    process.  The Company's second quarter of fiscal 2010 ended on April
    3rd, compared to March 28th for the second quarter of fiscal 2009.
    Because this second quarter cycle forward occurred during the
    Company's peak spring selling season, this shift had a significant
    impact on the Company's Results of Operations for the three and six
    months ended April 3, 2010 as compared to the three and six months
    ended March 28, 2010.  The "Normalized for Calendar Shift" columns
    in the table below provide management's estimate of net sales and
    income (loss) from operations growth for the three and six months
    ended April 3, 2010 normalized for the calendar shift.




                                           Three Months Ended
                                           ------------------
                                                             % Change
                                                             --------
                                                                  Normalized
                                                                      for
                                       March                        Calendar
                             April 3,    28,       Reported          Shift
                                 2010    2009      --------      -----------
                                 ----    ----
    Net Sales:
    ----------
    Global Consumer          $1,014.7  $840.6            21%               11%
    Global Professional          78.0    67.5            16%               14%
    Scotts LawnService(R)        30.6    32.8            -7%              -19%
                                 ----    ----

         Segment total       $1,123.3  $940.9            19%               10%

    Roundup(R) amortization      (0.2)   (0.2)
    Product registration and
     recall matters                 -       -
                                  ---     ---

         Consolidated        $1,123.1  $940.7            19%               10%
                             ========  ======

    Income (Loss) from
     Operations:
    ------------------
    Global Consumer            $254.5  $199.5            28%               14%
    Global Professional           7.7     7.8            -1%               -4%
    Scotts LawnService(R)       (14.4)  (16.1)           11%                8%
    Corporate and Other         (37.1)  (33.7)          -10%              -10%
                                -----   -----

         Segment total         $210.7  $157.5            34%               16%

    Roundup(R) amortization      (0.2)   (0.2)
    Other amortization           (2.5)   (2.9)
    Product registration and
     recall matters              (1.7)   (8.0)
                                 ----    ----

         Consolidated          $206.3  $146.4            41%               21%
                               ======  ======




                                       Six Months Ended
                                       ----------------
                                                         % Change
                                                         --------
                                                               Normalized
                                                                   for
                                                                Calendar
                       April 3,  March 28,      Reported          Shift
                           2010       2009      --------       -----------
                           ----       ----
    Net Sales:
    ----------
    Global Consumer    $1,228.7   $1,028.9            19%               10%
    Global
     Professional         133.4      127.0             5%                2%
    Scotts
     LawnService(R)        63.6       71.6           -11%              -17%
                           ----       ----

         Segment total $1,425.7   $1,227.5            16%                8%

    Roundup(R)
     amortization          (0.4)      (0.4)
    Product
     registration and
     recall matters           -       (0.3)
                            ---       ----

         Consolidated  $1,425.3   $1,226.8            16%                8%
                       ========   ========

    Income (Loss)
     from Operations:
    -----------------
    Global Consumer      $217.5     $164.0            33%               15%
    Global
     Professional           8.4       21.6           -61%              -63%
    Scotts
     LawnService(R)       (21.3)     (23.9)           11%                8%
    Corporate and
     Other                (56.0)     (59.0)            5%                5%
                          -----      -----

         Segment total   $148.6     $102.7            45%               15%

    Roundup(R)
     amortization          (0.4)      (0.4)
    Other
     amortization          (5.2)      (6.2)
    Product
     registration and
     recall matters        (4.3)     (15.6)
                           ----      -----

         Consolidated    $138.7      $80.5            72%               29%
                         ======      =====


                               THE SCOTTS MIRACLE-GRO COMPANY
                                Consolidated Balance Sheets
                    April 3, 2010, March 28, 2009 and September 30, 2009
                                       (in millions)
                                        (Unaudited)



                                    April 3,    March 28,   September 30,
                                           2010        2009           2009
                                           ----        ----           ----

    ASSETS
       Current assets
           Cash and cash
            equivalents                   $39.3       $48.1          $71.6
           Accounts receivable,
            net                         1,093.4     1,008.4          401.3
           Inventories, net               589.4       667.6          458.9
           Prepaids and other
            current assets                198.5       159.9          159.1
                                          -----       -----          -----

              Total current assets      1,920.6     1,884.0        1,090.9

        Property, plant and
         equipment, net                   377.1       335.5          369.7
        Goodwill, net                     371.3       368.0          375.2
        Other intangible
         assets, net                      353.5       361.5          364.2
        Other assets                       29.1        18.9           20.1
                                           ----        ----           ----

              Total assets             $3,051.6    $2,967.9       $2,220.1
                                       ========    ========       ========


    LIABILITIES AND
     SHAREHOLDERS' EQUITY
       Current liabilities
           Current portion of
            debt                         $244.3      $396.0         $160.4
           Accounts payable               319.6       352.3          190.0
           Other current
            liabilities                   441.5       382.7          406.4
                                          -----       -----          -----

              Total current
               liabilities              1,005.4     1,131.0          756.8

        Long-term debt                  1,156.0     1,196.2          649.7
        Other liabilities                 216.5       187.5          229.1
                                          -----       -----          -----

              Total liabilities         2,377.9     2,514.7        1,635.6

        Shareholders' equity              673.7       453.2          584.5
                                          -----       -----          -----


              Total liabilities and
               shareholders' equity    $3,051.6    $2,967.9       $2,220.1
                                       ========    ========       ========


                       THE SCOTTS MIRACLE-GRO COMPANY
         Reconciliation of Non-GAAP Disclosure Items for the Three
               Months Ended April 3, 2010 and March 28, 2009
                    (in millions, except per share data)
                                (Unaudited)
     Note:  See Notes 3 and 4 to the Accompanying Footnotes on Page 14


                                   Three Months Ended April 3, 2010
                                   --------------------------------
                                               Product
                                             Registration
                            As Reported          and          Adjusted
                            -----------    Recall Matters     --------
                                           --------------
    Net sales                   $1,123.1                $-       1,123.1
    Cost of sales                  686.5                 -         686.5
    Cost of sales -
     product
     registration and
     recall matters                  0.6               0.6             -
                                     ---               ---           ---

    Gross profit                   436.0              (0.6)        436.6
    % of sales                      38.8%                           38.9%

    Operating expenses:
      Selling, general and
       administrative              228.4                 -         228.4
      Product registration
       and recall matters            1.1               1.1             -
      Other expense, net             0.2                 -           0.2
                                     ---               ---           ---

    Income from
     operations                    206.3              (1.7)        208.0
    % of sales                      18.4%                           18.5%

    Interest expense                15.1                 -          15.1
                                    ----               ---          ----

    Income from
     continuing
     operations before
     income taxes                  191.2              (1.7)        192.9

    Income tax expense
     from continuing
     operations                     71.3              (0.6)         71.9
                                    ----              ----          ----

    Income from
     continuing
     operations                   $119.9             $(1.1)       $121.0
                                  ======             =====        ======

    Basic income per
     share from
     continuing
     operations                    $1.81            $(0.02)        $1.83
                                   =====            ======         =====

    Diluted income per
     share from
     continuing
     operations                    $1.78            $(0.02)        $1.80
                                   -----            ------         -----

    Common shares used
     in basic
          income per share
           calculation              66.2              66.2          66.2
                                    ====              ====          ====

    Common shares and
     potential common
          shares used in
           diluted income
          per share
           calculation              67.4              67.4          67.4
                                    ====              ====          ====



       Income from
        continuing
        operations                $119.9
       Income tax expense
        from continuing
        operations                  71.3
       Loss from
        discontinued
        operations, net of
        tax                         (1.4)
       Income tax benefit
        from discontinued
        operations                  (0.5)
       Interest expense             15.1
       Depreciation                 12.0
       Amortization,
        including marketing
        fees                         2.7
       Product registration
        and recall matters,
        non-cash portion               -
       Smith & Hawken
        closure process,
        non-cash portion           (11.5)
                                   -----

    Adjusted EBITDA               $207.6
                                  ======




                                       Three Months Ended March 28, 2009
                                       ---------------------------------
                                                   Product
                                                Registration
                                 As Reported         and         Adjusted
                                 -----------   Recall Matters    --------
                                               --------------
    Net sales                          $940.7              $-        $940.7
    Cost of sales                       581.9               -         581.9
    Cost of sales -
     product registration
     and recall matters                   2.5             2.5             -
                                          ---             ---           ---

    Gross profit                        356.3            (2.5)        358.8
    % of sales                           37.9%                         38.1%

    Operating expenses:
      Selling, general and
       administrative                   204.0               -         204.0
      Product registration
       and recall matters                 5.5             5.5             -
      Other expense, net                  0.4               -           0.4
                                          ---             ---           ---

    Income from operations              146.4            (8.0)        154.4
    % of sales                           15.6%                         16.4%

    Interest expense                     15.9               -          15.9
                                         ----             ---          ----

    Income from continuing
     operations before
     income taxes                       130.5            (8.0)        138.5

    Income tax expense
     from continuing
     operations                          46.4            (3.0)         49.4
                                         ----            ----          ----

    Income from continuing
     operations                         $84.1           $(5.0)        $89.1
                                        =====           =====         =====

    Basic income per share
     from continuing
     operations                         $1.29          $(0.08)        $1.37
                                        =====          ======         =====

    Diluted income per
     share from continuing
     operations                         $1.28          $(0.08)        $1.35
                                        -----          ------         -----

    Common shares used in
     basic
          income per share
           calculation                   64.9            64.9          64.9
                                         ====            ====          ====

    Common shares and
     potential common
          shares used in diluted
           income
          per share calculation          65.8            65.8          65.8
                                         ====            ====          ====



       Income from continuing
        operations                      $84.1
       Income tax expense
        from continuing
        operations                       46.4
       Loss from discontinued
        operations, net of
        tax                              (6.7)
       Income tax benefit
        from discontinued
        operations                       (2.8)
       Interest expense                  15.9
       Depreciation                      11.7
       Amortization,
        including marketing
        fees                              3.1
       Product registration
        and recall matters,
        non-cash portion                  2.5
       Smith & Hawken closure
        process, non-cash
        portion                             -
                                          ---

    Adjusted EBITDA                    $154.2
                                       ======


                       THE SCOTTS MIRACLE-GRO COMPANY
          Reconciliation of Non-GAAP Disclosure Items for the Six
               Months Ended April 3, 2010 and March 28, 2009
                    (in millions, except per share data)
                                (Unaudited)
     Note:  See Notes 3 and 4 to the Accompanying Footnotes on Page 14


                                        Six Months Ended April 3, 2010
                                        ------------------------------
                                                   Product
                                                Registration
                                As Reported          and         Adjusted
                                -----------   Recall Matters     --------
                                              --------------
    Net sales                       $1,425.3               $-      $1,425.3
    Cost of sales                      922.7                -         922.7
    Cost of sales -
     product registration
     and recall matters                  1.5              1.5             -
                                         ---              ---           ---

    Gross profit                       501.1             (1.5)        502.6
    % of sales                          35.2%                          35.3%

    Operating expenses:
      Selling, general and
       administrative                  366.0                -         366.0
      Product registration
       and recall matters                2.8              2.8             -
      Other income, net                 (6.4)               -          (6.4)
                                        ----              ---          ----

    Income from
     operations                        138.7             (4.3)        143.0
    % of sales                           9.7%                          10.0%

    Interest expense                    25.8                -          25.8
                                        ----              ---          ----

    Income from
     continuing
     operations before
     income taxes                      112.9             (4.3)        117.2

    Income tax expense
     from continuing
     operations                         42.8             (1.5)         44.3
                                        ----             ----          ----

    Income from
     continuing
     operations                        $70.1            $(2.8)        $72.9
                                       =====            =====         =====

    Basic income per
     share from
     continuing
     operations                        $1.06           $(0.04)        $1.10
                                       =====           ======         =====

    Diluted income per
     share from
     continuing
     operations                        $1.04           $(0.04)        $1.08
                                       -----           ------         -----

    Common shares used in
     basic income
          per share calculation         66.0             66.0          66.0
                                        ====             ====          ====

    Common shares and
     potential common
          shares used in
           diluted income
          per share calculation         67.2             67.2          67.2
                                        ====             ====          ====



       Income from
        continuing
        operations                     $70.1
       Income tax expense
        from continuing
        operations                      42.8
       Loss from
        discontinued
        operations, net of
        tax                             (9.3)
       Income tax expense
        (benefit) from
        discontinued
        operations                       0.2
       Interest expense                 25.8
       Depreciation                     24.2
       Amortization,
        including marketing
        fees                             5.6
       Product registration
        and recall matters,
        non-cash portion                 0.4
       Smith & Hawken
        closure process,
        non-cash portion               (13.1)
                                       -----

    Adjusted EBITDA                   $146.7
                                      ======




                                       Six Months Ended March 28, 2009
                                       -------------------------------
                                                   Product
                                                 Registration
                                 As Reported         and          Adjusted
                                 -----------   Recall Matters     --------
                                               --------------
    Net sales                       $1,226.8             $(0.3)    $1,227.1
    Cost of sales                      789.4              (0.2)       789.6
    Cost of sales -
     product registration
     and recall matters                  3.8               3.8            -
                                         ---               ---          ---

    Gross profit                       433.6              (3.9)       437.5
    % of sales                          35.3%                          35.7%

    Operating expenses:
      Selling, general and
       administrative                  342.7                 -        342.7
      Product registration
       and recall matters               11.7              11.7            -
      Other income, net                 (1.3)                -         (1.3)
                                        ----               ---         ----

    Income from operations              80.5             (15.6)        96.1
    % of sales                           6.6%                           7.8%

    Interest expense                    32.2                 -         32.2
                                        ----               ---         ----

    Income from continuing
     operations before
     income taxes                       48.3             (15.6)        63.9

    Income tax expense
     from continuing
     operations                         17.1              (5.7)        22.8
                                        ----              ----         ----

    Income from continuing
     operations                        $31.2             $(9.9)       $41.1
                                       =====             =====        =====

    Basic income per share
     from continuing
     operations                        $0.48            $(0.15)       $0.63
                                       =====            ======        =====

    Diluted income per
     share from continuing
     operations                        $0.47            $(0.15)       $0.63
                                       -----            ------        -----

    Common shares used in
     basic income
          per share calculation         64.8              64.8         64.8
                                        ====              ====         ====

    Common shares and
     potential common
          shares used in diluted
           income
          per share calculation         65.7              65.7         65.4
                                        ====              ====         ====



       Income from continuing
        operations                     $31.2
       Income tax expense
        from continuing
        operations                      17.1
       Loss from discontinued
        operations, net of
        tax                            (10.8)
       Income tax expense
        (benefit) from
        discontinued
        operations                      (5.6)
       Interest expense                 32.2
       Depreciation                     23.0
       Amortization,
        including marketing
        fees                             6.6
       Product registration
        and recall matters,
        non-cash portion                 2.2
       Smith & Hawken closure
        process, non-cash
        portion                            -
                                         ---

    Adjusted EBITDA                    $95.9
                                       =====


                      THE SCOTTS MIRACLE-GRO COMPANY
                Reconciliation of Non-GAAP Disclosure Items
       For the fiscal years ended September 30, 2009, 2008 and 2007
                   (in millions, except per share data)
                                (Unaudited)
     Note:  See Notes 4 and 5 to the Accompanying Footnotes on Page 14


                                                      Fiscal 2009
                                                      -----------
                                                         Product
                                                      Registration
                                        As Reported        and      Adjusted
                                                         Recall
                                        -----------      Matters    --------
                                                        -------
    Net sales                               $2,980.7         $(0.3)  $2,981.0
    Cost of sales                            1,911.4          (0.2)   1,911.6
    Cost of sales -impairment,
     restructuring and other
     charges                                       -             -          -
    Cost of sales -product
     registration and recall
     matters                                    11.7          11.7          -
                                                ----          ----        ---

    Gross profit                             1,057.6         (11.8)   1,069.4
    % of sales                                  35.5%                    35.9%

    Operating expenses:
      Selling, general and
       administrative                          742.9             -      742.9
      Impairment, restructuring and
       other charges                               -             -          -
      Product registration and
       recall matters                           16.8          16.8          -
      Other expense (income), net                0.3             -        0.3
                                                 ---           ---        ---

    Income from operations                     297.6         (28.6)     326.2
    % of sales                                  10.0%                    10.9%

    Costs related to refinancings                  -             -          -
    Interest expense                            56.4             -       56.4
                                                ----           ---       ----

    Income from continuing
     operations before income
     taxes                                     241.2         (28.6)     269.8

    Income tax expense (benefit)                86.6         (10.3)      96.9
                                                ----         -----       ----

    Income from continuing
     operations                               $154.6        $(18.3)    $172.9
                                              ======        ======     ======

    Basic income per share from
     continuing operations                     $2.38        $(0.28)     $2.66
                                               =====        ======      =====

    Diluted income per share from
     continuing operations                     $2.34        $(0.28)     $2.62
                                               -----        ------      -----

    Common shares used in basic
     income
          per share calculation                 65.0          65.0       65.0
                                                ====          ====       ====

    Common shares and potential
     common
          shares used in diluted income
          per share calculation                 66.1          66.1       66.1
                                                ====          ====       ====




                                             Fiscal 2008
                                             -----------
                                         Product
                               As     Registration
                           Reported        and      Impairment  Adjusted
                                         Recall
                          ---------      Matters    ----------  --------
                                        -------
    Net sales               $2,823.2        $(22.3)         $-   $2,845.5
    Cost of sales            1,883.0         (11.1)          -    1,894.1
    Cost of sales -
     impairment,
     restructuring and
     other charges               1.3             -         1.3          -
    Cost of sales -
     product
     registration and
     recall matters             27.2          27.2           -          -
                                ----          ----         ---        ---

    Gross profit               911.7         (38.4)       (1.3)     951.4
    % of sales                  32.3%                                33.4%

    Operating expenses:
      Selling, general
       and administrative      657.1             -           -      657.1
      Impairment,
       restructuring and
       other charges           109.8             -       109.8          -
      Product
       registration and
       recall matters           12.7          12.7           -          -
      Other expense
       (income), net            (7.7)            -           -       (7.7)
                                ----           ---         ---       ----

    Income from
     operations                139.8         (51.1)     (111.1)     302.0
    % of sales                   5.0%                                10.6%

    Costs related to
     refinancings                  -             -           -          -
    Interest expense            82.2             -           -       82.2
                                ----           ---         ---       ----

    Income from
     continuing
     operations before
     income taxes               57.6         (51.1)     (111.1)     219.8

    Income tax expense
     (benefit)                  24.8         (17.9)      (32.2)      74.9
                                ----         -----       -----       ----

    Income from
     continuing
     operations                $32.8        $(33.2)     $(78.9)    $144.9
                               =====        ======      ======     ======

    Basic income per
     share from
     continuing
     operations                $0.51        $(0.51)     $(1.22)     $2.25
                               =====        ======      ======      =====

    Diluted income per
     share from
     continuing
     operations                $0.50        $(0.51)     $(1.21)     $2.22
                               -----        ------      ------      -----

    Common shares used
     in basic income
          per share
           calculation          64.5          64.5        64.5       64.5
                                ====          ====        ====       ====

    Common shares and
     potential common
          shares used in
           diluted income
          per share
           calculation          65.4          65.4        65.4       65.4
                                ====          ====        ====       ====




                                              Fiscal 2007
                                              -----------
                                       Impairment,    Cost related
                                     Restructuring          to
                       As Reported      and Other     Refinancings   Adjusted
                       -----------  --------------    -------------  --------
    Net sales             $2,687.8               $-              $-   $2,687.8
    Cost of
     sales                 1,735.0                -               -    1,735.0
    Cost of
     sales -
     impairment,
     restructuring
     and other
     charges                     -                -               -          -
    Cost of
     sales -
     product
     registration
     and recall
     matters                     -                -               -          -
                               ---              ---             ---        ---

    Gross
     profit                  952.8                -               -      952.8
    % of sales                35.4%                                       35.4%

    Operating
     expenses:
      Selling,
       general
       and
       administrative        635.6                -               -      635.6
      Impairment,
       restructuring
       and other
       charges                 8.8              8.8               -          -
      Product
       registration
       and recall
       matters                   -                -               -          -
      Other
       expense
       (income),
       net                    (9.6)               -               -       (9.6)
                              ----              ---             ---       ----

    Income from
     operations              318.0             (8.8)              -      326.8
    % of sales                11.8%                                       12.2%

    Costs
     related to
     refinancings             18.3                -            18.3          -
    Interest
     expense                  70.7                -               -       70.7
                              ----              ---             ---       ----

    Income from
     continuing
     operations
     before
     income
     taxes                   229.0             (8.8)          (18.3)     256.1

    Income tax
     expense
     (benefit)                79.7             (3.1)           (6.4)      89.2
                              ----             ----            ----       ----

    Income from
     continuing
     operations             $149.3            $(5.7)         $(11.9)    $166.9
                            ======            =====          ======     ======

    Basic
     income per
     share from
     continuing
     operations              $2.29           $(0.09)         $(0.18)     $2.56
                             =====           ======          ======      =====

    Diluted
     income per
     share from
     continuing
     operations              $2.23           $(0.08)         $(0.18)     $2.49
                             -----           ------          ------      -----

    Common
     shares
     used in
     basic
     income
          per share
           calculation        65.2             65.2            65.2       65.2
                              ====             ====            ====       ====

    Common
     shares and
     potential
     common
          shares used
           in diluted
           income
          per share
           calculation        67.0             67.0            67.0       67.0
                              ====             ====            ====       ====



                      THE SCOTTS MIRACLE-GRO COMPANY
               Reconciliation of Non-GAAP Disclosure Items
               For the fiscal year ended September 30, 2009
             (Unaudited) (in millions, except per share data)
                               (Unaudited)
     Note: See Notes 4 and 5 to the Accompanying Footnotes on Page 14


                                                   Q1 F09
                                                   ------
                                                  Product
                                      As       Registration
                                  Reported          and       Adjusted
                                 ---------   Recall Matters   --------
                                             --------------
    Net sales                        $286.1            $(0.3)    $286.4
    Cost of sales                     207.5             (0.2)     207.7
    Cost of sales -impairment,
     restructuring and other
     charges                              -                -          -
    Cost of sales -product
     registration and recall
     matters                            1.3              1.3          -
                                        ---              ---        ---

    Gross profit                       77.3             (1.4)      78.7
    % of sales                         27.0%                       27.5%

    Operating expenses:
      Selling, general and
       administrative                 138.7                -      138.7
      Impairment, restructuring
       and other charges                  -                -          -
      Product registration and
       recall matters                   6.2              6.2          -
      Other income, net                (1.7)               -       (1.7)
                                       ----              ---       ----

    Income (loss) from
     operations                       (65.9)            (7.6)     (58.3)
    % of sales                        -23.0%                      -20.4%

    Interest expense                   16.3                -       16.3
                                       ----              ---       ----

    Income (loss) from
     continuing operations
     before income taxes              (82.2)            (7.6)     (74.6)

    Income tax expense (benefit)      (29.3)            (2.7)     (26.6)
                                      -----             ----      -----

    Income (loss) from
     continuing operations           $(52.9)           $(4.9)    $(48.0)
                                     ======            =====     ======

    Basic income (loss) per
     share from continuing
     operations                      $(0.82)          $(0.08)    $(0.74)
                                     ======           ======     ======

    Diluted income (loss) per
     share from continuing
     operations                      $(0.82)          $(0.08)    $(0.74)
                                     ------           ------     ------

    Common shares used in basic
     income
          per share calculation        64.7             64.7       64.7
                                       ====             ====       ====

    Common shares and potential
     common
          shares used in diluted
           income
          per share calculation        64.7             64.7       64.7
                                       ====             ====       ====





                                                   Q2 F09
                                                   ------
                                                  Product
                                      As       Registration
                                  Reported          and       Adjusted
                                 ---------   Recall Matters   --------
                                             --------------
    Net sales                        $940.7               $-     $940.7
    Cost of sales                     581.9                -      581.9
    Cost of sales -impairment,
     restructuring and other
     charges                              -                -          -
    Cost of sales -product
     registration and recall
     matters                            2.5              2.5          -
                                        ---              ---        ---

    Gross profit                      356.3             (2.5)     358.8
    % of sales                         37.9%                       38.1%

    Operating expenses:
      Selling, general and
       administrative                 204.0                -      204.0
      Impairment, restructuring
       and other charges                  -                -          -
      Product registration and
       recall matters                   5.5              5.5          -
      Other income, net                 0.4                -        0.4
                                        ---              ---        ---

    Income (loss) from
     operations                       146.4             (8.0)     154.4
    % of sales                         15.6%                       16.4%

    Interest expense                   15.9                -       15.9
                                       ----              ---       ----

    Income (loss) from
     continuing operations
     before income taxes              130.5             (8.0)     138.5

    Income tax expense (benefit)       46.4             (3.0)      49.4
                                       ----             ----       ----

    Income (loss) from
     continuing operations            $84.1            $(5.0)     $89.1
                                      =====            =====      =====

    Basic income (loss) per
     share from continuing
     operations                       $1.29           $(0.08)     $1.37
                                      =====           ======      =====

    Diluted income (loss) per
     share from continuing
     operations                       $1.28           $(0.08)     $1.35
                                      -----           ------      -----

    Common shares used in basic
     income
          per share calculation        64.9             64.9       64.9
                                       ====             ====       ====

    Common shares and potential
     common
          shares used in diluted
           income
          per share calculation        65.8             65.8       65.8
                                       ====             ====       ====





                                                         Q3 F09
                                                         ------
                                                        Product
                                             As      Registration
                                         Reported         and       Adjusted
                                        ---------   Recall Matters  --------
                                                    --------------
    Net sales                             $1,231.4              $-   $1,231.4
    Cost of sales                            752.4               -      752.4
    Cost of sales -impairment,
     restructuring and other
     charges                                     -               -          -
    Cost of sales -product
     registration and recall
     matters                                   3.3             3.3          -
                                               ---             ---        ---

    Gross profit                             475.7            (3.3)     479.0
    % of sales                                38.6%                      38.9%

    Operating expenses:
      Selling, general and
       administrative                        223.0               -      223.0
      Impairment, restructuring and
       other charges                             -               -          -
      Product registration and
       recall matters                          3.1             3.1          -
      Other income, net                       (0.4)              -       (0.4)
                                              ----             ---       ----

    Income (loss) from operations            250.0            (6.4)     256.4
    % of sales                                20.3%                      20.8%

    Interest expense                          13.7               -       13.7
                                              ----             ---       ----

    Income (loss) from continuing
     operations before income
     taxes                                   236.3            (6.4)     242.7

    Income tax expense (benefit)              85.6            (2.1)      87.7
                                              ----            ----       ----

    Income (loss) from continuing
     operations                             $150.7           $(4.3)    $155.0
                                            ======           =====     ======

    Basic income (loss) per share
     from continuing operations              $2.32          $(0.07)     $2.38
                                             =====          ======      =====

    Diluted income (loss) per
     share from continuing
     operations                              $2.28          $(0.07)     $2.34
                                             -----          ------      -----

    Common shares used in basic
     income
          per share calculation               65.0            65.0       65.0
                                              ====            ====       ====

    Common shares and potential
     common
          shares used in diluted income
          per share calculation               66.1            66.1       66.1
                                              ====            ====       ====





                                                         Q4 F09
                                                         ------
                                                        Product
                                             As      Registration
                                         Reported         and       Adjusted
                                        ---------   Recall Matters  --------
                                                    --------------
    Net sales                               $522.5              $-     $522.5
    Cost of sales                            369.6               -      369.6
    Cost of sales -impairment,
     restructuring and other
     charges                                     -               -          -
    Cost of sales -product
     registration and recall
     matters                                   4.6             4.6          -
                                               ---             ---        ---

    Gross profit                             148.3            (4.6)     152.9
    % of sales                                28.4%                      29.3%

    Operating expenses:
      Selling, general and
       administrative                        177.2               -      177.2
      Impairment, restructuring and
       other charges                             -               -          -
      Product registration and
       recall matters                          2.0             2.0          -
      Other income, net                        2.0               -        2.0
                                               ---             ---        ---

    Income (loss) from operations            (32.9)           (6.6)     (26.3)
    % of sales                                -6.3%                      -5.0%

    Interest expense                          10.5               -       10.5
                                              ----             ---       ----

    Income (loss) from continuing
     operations before income
     taxes                                   (43.4)           (6.6)     (36.8)

    Income tax expense (benefit)             (16.1)           (2.5)     (13.6)
                                             -----            ----      -----

    Income (loss) from continuing
     operations                             $(27.3)          $(4.1)    $(23.2)
                                            ======           =====     ======

    Basic income (loss) per share
     from continuing operations             $(0.42)         $(0.06)    $(0.36)
                                            ======          ======     ======

    Diluted income (loss) per
     share from continuing
     operations                             $(0.42)         $(0.06)    $(0.36)
                                            ------          ------     ------

    Common shares used in basic
     income
          per share calculation               65.3            65.3       65.3
                                              ====            ====       ====

    Common shares and potential
     common
          shares used in diluted income
          per share calculation               65.3            65.3       65.3
                                              ====            ====       ====





                                                       Fiscal F09
                                                       ----------
                                                        Product
                                             As      Registration
                                         Reported         and       Adjusted
                                        ---------   Recall Matters  --------
                                                    --------------
    Net sales                             $2,980.7           $(0.3)  $2,981.0
    Cost of sales                          1,911.4            (0.2)   1,911.6
    Cost of sales -impairment,
     restructuring and other
     charges                                     -               -          -
    Cost of sales -product
     registration and recall
     matters                                  11.7            11.7          -
                                              ----            ----        ---

    Gross profit                           1,057.6           (11.8)   1,069.4
    % of sales                                35.5%                      35.9%

    Operating expenses:
      Selling, general and
       administrative                        742.9               -      742.9
      Impairment, restructuring and
       other charges                             -               -          -
      Product registration and
       recall matters                         16.8            16.8          -
      Other income, net                        0.3               -        0.3
                                               ---             ---        ---

    Income (loss) from operations            297.6           (28.6)     326.2
    % of sales                                10.0%                      10.9%

    Interest expense                          56.4               -       56.4
                                              ----             ---       ----

    Income (loss) from continuing
     operations before income
     taxes                                   241.2           (28.6)     269.8

    Income tax expense (benefit)              86.6           (10.3)      96.9
                                              ----           -----       ----

    Income (loss) from continuing
     operations                             $154.6          $(18.3)    $172.9
                                            ======          ======     ======

    Basic income (loss) per share
     from continuing operations              $2.38          $(0.28)     $2.66
                                             =====          ======      =====

    Diluted income (loss) per
     share from continuing
     operations                              $2.34          $(0.28)     $2.62
                                             -----          ------      -----

    Common shares used in basic
     income
          per share calculation               65.0            65.0       65.0
                                              ====            ====       ====

    Common shares and potential
     common
          shares used in diluted income
          per share calculation               66.1            66.1       66.1
                                              ====            ====       ====




                        THE SCOTTS MIRACLE-GRO COMPANY
                  Footnotes to Preceding Financial Statements



    Results of Operations
    ---------------------


          Basic income per common share amounts are calculated by
          dividing income from continuing operations, loss from
          discontinued operations and net income by average common
    (1)   shares outstanding during the period.
    ---


          Diluted income per common share amounts are calculated by
          dividing income from continuing operations, loss from
          discontinued operations and net income by the average common
          shares and dilutive potential common shares (common stock
          options, stock appreciation rights, restricted stock and
    (2)   restricted stock units) outstanding during the period.
    ---


          "Adjusted EBITDA" is defined as net income before interest,
          taxes, depreciation and amortization as well as certain other
          items such as the impact of the cumulative effect of changes
          in accounting, costs associated with debt refinancing and
          other non-recurring, non-cash items affecting net income.
          Adjusted EBITDA is not intended to represent cash flow from
          operations as defined by generally accepted accounting
          principles and should not be used as an alternative to net
          income or income from continuing operations as an indicator of
          operating performance or to cash flow as a measure of
    (3)   liquidity.
    ---


          The Reconciliation of non-GAAP Disclosure Items includes the
    (4)   following non-GAAP financial measures:
    ---


      Adjusted income from continuing operations and adjusted diluted
       income per share from continuing operations -These measures
       exclude charges or credits relating to refinancings, impairments,
       restructurings, product registration and recall matters,
       discontinued operations and other unusual items such as costs or
       gains related to discrete projects or transactions that are apart
       from and not indicative of the results of the operations of the
       business.
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      Adjusted EBITDA -The presentation of adjusted EBITDA is provided
       as a convenience to the Company's lenders because adjusted EBITDA
       is a component of certain debt covenants.
      ------------------------------------------------------------------


      The Company believes that these non-GAAP financial measures are
       the most indicative of the Company's ongoing earnings
       capabilities and that disclosure of these non-GAAP financial
       measures therefore provides useful information to investors and
       other users of its financial statements, such as lenders.
      ----------------------------------------------------------------


          Effective in its first quarter of fiscal 2010, the Company
          classified Smith & Hawken as discontinued operations.
          Accordingly, the Company has reclassified its results of
          operations to reflect Smith & Hawken as discontinued
          operations separate from its results of continuing operations.
          As a service to its investors, lenders and other interested
          parties, the Company is providing a reconciliation of income
          (loss) from continuing operations to adjusted income (loss)
          from continuing operations and diluted income (loss) per share
          from continuing operations to adjusted diluted income (loss)
          per share from continuing operations for each of the fiscal
          years ended September 30, 2009, 2008 and 2007 as well as each
          quarterly period in the fiscal year ended September 30, 2009,
          which reflect the reclassification of Smith & Hawken as
    (5)   discontinued operations.
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SOURCE The Scotts Miracle-Gro Company