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| ScottsMiracle-Gro Announces Record Third Quarter Sales and Profit Along With Share Repurchase Plan and Dividend Increase |
MARYSVILLE, Ohio, Aug 10, 2010 /PRNewswire via COMTEX/ --
The Scotts Miracle-Gro Company (NYSE: SMG), the world's leading marketer of branded consumer lawn and garden products, announced today that continued consumer interest in gardening activities as well as momentum from its regionalization efforts resulted in record third quarter results. In addition, the Company said its Board of Directors has authorized the Company to repurchase up to $500 million of SMG common shares over the next four years. The Board also voted to increase the quarterly dividend paid to shareholders to $0.25 per share, double the current level. "Our business and cash flow are strong, our balance sheet is healthy and our low debt-to-EBITDA level gives us tremendous flexibility in managing our business," said Jim Hagedorn, chairman and chief executive officer. "We will continue to make wise investments that drive profitable long-term growth while also increasing the amount of cash we return to our shareholders. Our continued success demonstrates the power of our brands with consumers, the strength of our retail partnerships and the resiliency of our category. "All of these factors are evident in the decision made by our Board to double our dividend and repurchase our shares, both of which demonstrate our confidence in the long-term outlook for our business." THIRD QUARTER RESULTS Company-wide sales from continuing operations for the quarter ended July 3, 2010 were $1.24 billion, an increase of 1 percent from the same period a year ago. It is important to note that the timing of the Company's fiscal calendar resulted in a five-day shift forward of the third quarter as compared with fiscal 2009. When adjusted to reflect comparable reporting periods, company-wide sales in the third quarter were up 5 percent. Adjusted income from continuing operations, which excludes the impact of product registration and recall costs, was $176.9 million, or $2.61 per share, compared with $155.0 million, or $2.34 per share, for the same period last year. Reported income from continuing operations was $175.9 million, or $2.59 per share, compared with $150.7 million, or $2.28 per share, for the same period last year. Global Consumer sales increased to $1.09 billion, up slightly from a year ago with foreign exchange having essentially no impact on sales. Adjusted for the calendar shift, Global Consumer sales increased 5 percent. Point-of-sale data from the Company's major retail partners in the U.S. showed that consumer purchases increased 5 percent in the quarter. Adjusted operating income for the Global Consumer segment improved 10 percent in the quarter to $292.7 million from $265.2 million for the same period last year. Scotts LawnService reported a 3 percent increase in sales to $81.3 million from $79.0 million. Adjusted operating income increased 6 percent to $22.8 million, compared with $21.6 million a year ago. Global Professional sales increased by 3 percent in the quarter to $71.9 million from $69.5 million last year. Excluding the impact of foreign currency, sales increased 7 percent. Operating income for the segment increased to $6.9 million from $5.2 million for the same period last year. Adjusted gross margin rate increased to 40.7 percent in the quarter, compared with 38.9 percent a year earlier. Selling, general and administrative expenses (SG&A) decreased 4 percent in the quarter to $214.4 million from $223.0 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 15 percent to $304.4 million from $263.7 million a year ago. YEAR-TO-DATE RESULTS Company-wide net sales through the first nine months were $2.66 billion, up 8 percent from a year ago. Excluding the impact of foreign exchange, sales increased 7 percent. Global Consumer sales increased 10 percent to $2.31 billion and improved by 9 percent when excluding the impact of foreign currency. Adjusted for the calendar shift, sales in Global Consumer increased 8 percent. Point-of-sale data from the Company's major retail partners in the U.S. showed that consumer purchases increased 6 percent. "We had outstanding growth in both sell-in and consumer purchases earlier in the season, some of which was accelerated due to good weather in April," Hagedorn said. "While we expected our growth to moderate as the year progressed, our momentum slowed slightly more than expected beginning in May as the weather became increasingly challenging. Nonetheless, weather is part of the reality in the lawn and garden industry. Our strong growth in unit volume and market share on a year-to-date basis speaks to a high level of focus and execution that allowed us to continue to drive our business." Scotts LawnService sales decreased 4 percent to $144.9 million. Global Professional reported sales increased by 4 percent to $205.3 million. Excluding the impact of foreign exchange, Global Professional sales increased 2 percent. For the first nine months, company-wide adjusted gross margin improved 50 basis points to 37.8 percent, compared with 37.3 percent. SG&A increased 3 percent to $580.4 million. Adjusted EBITDA in the first nine months increased 25 percent to $451.1 million, compared with $359.6 million in the comparable period last year. Adjusted income from continuing operations for the first nine months increased 27 percent to $249.8 million, or $3.71 per share, compared with $196.1 million, or $2.98 per share, a year earlier. Reported income from continuing operations was $246.0 million, or $3.65 per share, compared with $181.9 million, or $2.76 per share, for the same period last year. "Gross margins continue to benefit from a more stable and historically normalized pricing and commodity environment," said Dave Evans, chief financial officer. "We still expect strong improvement in gross margin rate for the full year. That fact, coupled with solid mid-single digit sales growth, allows us to confidently reaffirm our full-year guidance of $3.25 to $3.35 per share on an adjusted basis." SHARE REPURCHASE AND DIVIDEND INCREASE Under the share repurchase authorization, the Company may purchase shares from time to time in open market purchases or privately negotiated transactions. The Company may make all or part of the repurchases under Rule 10b5-1 plans, which may be entered into from time to time and enable the Company to make repurchases on a more regular basis, or pursuant to accelerated share repurchases. The authorization, which expires September 30, 2014, may be suspended or discontinued at any time. The cash dividend approved by the Board of Directors of $0.25 per share is payable September 10, 2010 to shareholders of record on August 27, 2010. The Company will discuss its third quarter results as well as these initiatives during a Webcast and conference call at 9 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, the Company's assumptions regarding such performance and plans, as well as the amount and timing of repurchases of the Company's common shares 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:
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 Nine Months
Ended July 3, 2010 and June 27, 2009
(in millions, except per share data)
(Unaudited)
Note: See Accompanying Footnotes on Page 11
Three Months Ended
------------------
July 3, June 27, %
Footnotes 2010 2009 Change
--------- ---- ---- ------
Net sales $1,238.9 $1,231.4 1%
Cost of sales 734.1 752.4
Cost of sales -product
registration and recall
matters - 3.3
--- ---
Gross profit 504.8 475.7 6%
% of sales 40.7% 38.6%
Operating expenses:
Selling, general and
administrative 214.4 223.0 -4%
Product registration and
recall matters 1.5 3.1
Other expense (income),
net (1.6) (0.4)
---- ----
Income from operations 290.5 250.0 16%
% of sales 23.4% 20.3%
Interest expense 11.9 13.7
---- ----
Income from continuing
operations before income
taxes 278.6 236.3 18%
Income tax expense from
continuing operations 102.7 85.6
----- ----
Income from continuing
operations 175.9 150.7 17%
Loss from discontinued
operations, net of tax - (2.9)
--- ----
Net income $175.9 $147.8
====== ======
Basic income per common
share: (1)
Income from continuing
operations $2.65 $2.32 14%
Loss from discontinued
operations - (0.05)
--- -----
Net income $2.65 $2.27 17%
===== =====
Diluted income per common
share: (2)
Income from continuing
operations $2.59 $2.28 14%
Loss from discontinued
operations - (0.04)
--- -----
Net income $2.59 $2.24 16%
===== =====
Common shares used in
basic
income per share
calculation 66.5 65.0 2%
==== ====
Common shares and
potential common
shares used in diluted
income
per share calculation 67.9 66.1 3%
==== ====
Results from continuing
operations excluding
product registration and
recall matters:
Adjusted income from
continuing operations (4) $176.9 $155.0 14%
====== ======
Adjusted diluted income
per share from continuing
operations (2) (4) $2.61 $2.34 11%
===== =====
Adjusted EBITDA (3) (4) $304.4 $263.7 15%
====== ======
Nine Months Ended
-----------------
July 3, June 27, %
2010 2009 Change
---- ---- ------
Net sales $2,664.2 $2,458.2 8%
Cost of sales 1,656.8 1,541.8
Cost of sales -product
registration and recall
matters 1.5 7.1
--- ---
Gross profit 1,005.9 909.3 11%
% of sales 37.8% 37.0%
Operating expenses:
Selling, general and
administrative 580.4 565.7 3%
Product registration and
recall matters 4.3 14.8
Other expense (income), net (8.0) (1.7)
---- ----
Income from operations 429.2 330.5 30%
% of sales 16.1% 13.4%
Interest expense 37.7 45.9
---- ----
Income from continuing
operations before income
taxes 391.5 284.6 38%
Income tax expense from
continuing operations 145.5 102.7
----- -----
Income from continuing
operations 246.0 181.9 35%
Loss from discontinued
operations, net of tax (9.3) (13.7)
---- -----
Net income $236.7 $168.2
====== ======
Basic income per common
share:
Income from continuing
operations $3.72 $2.80 33%
Loss from discontinued
operations (0.14) (0.21)
----- -----
Net income $3.58 $2.59 38%
===== =====
Diluted income per common
share:
Income from continuing
operations $3.65 $2.76 32%
Loss from discontinued
operations (0.14) (0.21)
----- -----
Net income $3.51 $2.55 38%
===== =====
Common shares used in basic
income per share calculation 66.2 64.9 2%
==== ====
Common shares and potential
common
shares used in diluted income
per share calculation 67.4 65.8 2%
==== ====
Results from continuing
operations excluding
product registration and
recall matters:
Adjusted income from
continuing operations $249.8 $196.1 27%
====== ======
Adjusted diluted income per
share from continuing
operations $3.71 $2.98 24%
===== =====
Adjusted EBITDA $451.1 $359.6 25%
====== ======
THE SCOTTS MIRACLE-GRO COMPANY
Net Sales and Income (Loss) from Operations by Segment for the
Three and Nine Months Ended July 3, 2010 and June 27, 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 primarily 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 third quarter of fiscal 2010 began on April
4th, compared to March 29th for the third quarter of fiscal 2009.
Because this third 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 nine
months ended July 3, 2010 as compared to the three and nine months
ended June 27, 2009. The "After Impact of Calendar Shift" columns in
the table below provide management's estimate of net sales and
income (loss) from operations growth for the three and nine months
ended July 3, 2010, normalized for the calendar shift.
Three Months Ended
------------------
% Change
--------
After
Impact
of
Calendar
July 3, June 27, Reported Shift
2010 2009 -------- ---------
---- ----
Net Sales:
----------
Global Consumer $1,085.9 $1,083.2 0% 5%
Global
Professional 71.9 69.5 3% 6%
Scotts
LawnService(R) 81.3 78.9 3% 4%
---- ----
Segment total $1,239.1 $1,231.6 1% 5%
Roundup(R)
amortization (0.2) (0.2)
Product
registration and
recall matters - -
--- ---
Consolidated $1,238.9 $1,231.4 1% 5%
======== ========
Income (Loss) from
Operations:
------------------
Global Consumer $292.7 $265.2 10% 17%
Global
Professional 6.9 5.2 33% 39%
Scotts
LawnService(R) 22.8 21.6 6% 7%
Corporate and
Other (27.7) (32.7) 15% 15%
----- -----
Segment total $294.7 $259.3 14% 21%
Roundup(R)
amortization (0.2) (0.2)
Other amortization (2.5) (2.7)
Product
registration and
recall matters (1.5) (6.4)
---- ----
Consolidated $290.5 $250.0 16% 24%
====== ======
Nine Months Ended
-----------------
% Change
--------
After
Impact
of
Calendar
July 3, June 27, Reported Shift
2010 2009 -------- ---------
---- ----
Net Sales:
----------
Global Consumer $2,314.6 $2,112.1 10% 8%
Global
Professional 205.3 196.5 4% 4%
Scotts
LawnService(R) 144.9 150.5 -4% -6%
----- -----
Segment total $2,664.8 $2,459.1 8% 7%
Roundup(R)
amortization (0.6) (0.6)
Product
registration and
recall matters - (0.3)
--- ----
Consolidated $2,664.2 $2,458.2 8% 7%
======== ========
Income (Loss)
from Operations:
-----------------
Global Consumer $510.2 $429.2 19% 16%
Global
Professional 15.3 26.8 -43% -44%
Scotts
LawnService(R) 1.5 (2.3) nm nm
Corporate and
Other (83.7) (91.7) 9% 9%
----- -----
Segment total $443.3 $362.0 22% 19%
Roundup(R)
amortization (0.6) (0.6)
Other
amortization (7.7) (8.9)
Product
registration and
recall matters (5.8) (22.0)
---- -----
Consolidated $429.2 $330.5 30% 25%
====== ======
THE SCOTTS MIRACLE-GRO COMPANY
Consolidated Balance Sheets
July 3, 2010, June 27, 2009 and September 30, 2009
(in millions)
(Unaudited)
September
July 3, June 27, 30,
2010 2009 2009
---- ---- ----
ASSETS
Current assets
Cash and cash equivalents $78.7 $149.2 $71.6
Accounts receivable, net 697.1 779.0 401.3
Inventories, net 461.6 547.4 458.9
Prepaids and other current assets 163.6 137.8 159.1
----- ----- -----
Total current assets 1,401.0 1,613.4 1,090.9
Property, plant and equipment, net 372.5 335.9 369.7
Goodwill, net 368.9 374.9 375.2
Other intangible assets, net 347.1 364.7 364.2
Other assets 33.7 20.3 20.1
---- ---- ----
Total assets $2,523.2 $2,709.2 $2,220.1
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of debt $200.0 $152.9 $160.4
Accounts payable 229.5 269.4 190.0
Other current liabilities 554.0 536.0 406.4
----- ----- -----
Total current liabilities 983.5 958.3 756.8
Long-term debt 490.2 967.7 649.7
Other liabilities 214.7 181.2 229.1
----- ----- -----
Total liabilities 1,688.4 2,107.2 1,635.6
Shareholders' equity 834.8 602.0 584.5
----- ----- -----
Total liabilities and shareholders'
equity $2,523.2 $2,709.2 $2,220.1
======== ======== ========
THE SCOTTS MIRACLE-GRO COMPANY
Reconciliation of Non-GAAP Disclosure Items for the Three
Months Ended July 3, 2010 and June 27, 2009
(in millions, except per share data)
(Unaudited)
Note: See Notes 3 and 4 to the Accompanying Footnotes on Page 11
Three Months Ended July 3, 2010
-------------------------------
As Reported Product Adjusted
Registration
----------- and --------
Recall
Matters
-------
Net sales $1,238.9 $- 1,238.9
Cost of sales 734.1 - 734.1
Cost of sales -product
registration and recall
matters - - -
--- --- ---
Gross profit 504.8 - 504.8
% of sales 40.7% 40.7%
Operating expenses:
Selling, general and
administrative 214.4 - 214.4
Product registration and
recall matters 1.5 1.5 -
Other expense, net (1.6) - (1.6)
---- --- ----
Income from operations 290.5 (1.5) 292.0
% of sales 23.4% 23.6%
Interest expense 11.9 - 11.9
---- --- ----
Income from continuing
operations before income
taxes 278.6 (1.5) 280.1
Income tax expense from
continuing operations 102.7 (0.5) 103.2
----- ---- -----
Income from continuing
operations $175.9 $(1.0) $176.9
====== ===== ======
Basic income per share
from continuing
operations $2.65 $2.66
===== =====
Diluted income per share
from continuing
operations $2.59 $2.61
----- -----
Common shares used in
basic
income per share
calculation 66.5 66.5
==== ====
Common shares and
potential common
shares used in diluted
income
per share calculation 67.9 67.9
==== ====
Income from continuing
operations $175.9
Income tax expense from
continuing operations 102.7
Loss from discontinued
operations, net of tax -
Income tax benefit from
discontinued operations (0.1)
Interest expense 11.9
Depreciation 12.1
Amortization, including
marketing fees 2.7
Product registration and
recall matters, non-cash
portion (0.6)
Smith & Hawken closure
process, non-cash
portion (0.2)
----
Adjusted EBITDA $304.4
======
Three Months Ended June 27, 2009
--------------------------------
As Reported Product Adjusted
Registration
----------- and --------
Recall
Matters
-------
Net sales $1,231.4 $- $1,231.4
Cost of sales 752.4 - 752.4
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
Product registration
and recall matters 3.1 3.1 -
Other expense, net (0.4) - (0.4)
---- --- ----
Income from operations 250.0 (6.4) 256.4
% of sales 20.3% 20.8%
Interest expense 13.7 - 13.7
---- --- ----
Income from continuing
operations before
income taxes 236.3 (6.4) 242.7
Income tax expense from
continuing operations 85.6 (2.1) 87.7
---- ---- ----
Income from continuing
operations $150.7 $(4.3) $155.0
====== ===== ======
Basic income per share
from continuing
operations $2.32 $2.38
===== =====
Diluted income per
share from continuing
operations $2.28 $2.34
----- -----
Common shares used in
basic
income per share
calculation 65.0 65.0
==== ====
Common shares and
potential common
shares used in diluted
income
per share calculation 66.1 66.1
==== ====
Income from continuing
operations $150.7
Income tax expense from
continuing operations 85.6
Loss from discontinued
operations, net of tax (2.9)
Income tax benefit from
discontinued
operations (1.4)
Interest expense 13.7
Depreciation 12.0
Amortization, including
marketing fees 2.9
Product registration
and recall matters,
non-cash portion 0.4
Smith & Hawken closure
process, non-cash
portion 2.7
---
Adjusted EBITDA $263.7
======
THE SCOTTS MIRACLE-GRO COMPANY
Reconciliation of Non-GAAP Disclosure Items for the Nine
Months Ended July 3, 2010 and June 27, 2009
(in millions, except per share data)
(Unaudited)
Note: See Notes 3 and 4 to the Accompanying Footnotes on Page 11
Nine Months Ended July 3, 2010
------------------------------
As
Reported Product Adjusted
Registration
--------- and --------
Recall
Matters
-------
Net sales $2,664.2 $- $2,664.2
Cost of sales 1,656.8 - 1,656.8
Cost of sales -product
registration and recall
matters 1.5 1.5 -
--- --- ---
Gross profit 1,005.9 (1.5) 1,007.4
% of sales 37.8% 37.8%
Operating expenses:
Selling, general and
administrative 580.4 - 580.4
Product registration and recall
matters 4.3 4.3 -
Other income, net (8.0) - (8.0)
---- --- ----
Income from operations 429.2 (5.8) 435.0
% of sales 16.1% 16.3%
Interest expense 37.7 - 37.7
---- --- ----
Income from continuing
operations before income taxes 391.5 (5.8) 397.3
Income tax expense from
continuing operations 145.5 (2.0) 147.5
----- ---- -----
Income from continuing
operations $246.0 $(3.8) $249.8
====== ===== ======
Basic income per share from
continuing operations $3.72 $3.77
===== =====
Diluted income per share from
continuing operations $3.65 $3.71
----- -----
Common shares used in basic
income
per share calculation 66.2 66.2
==== ====
Common shares and potential
common
shares used in diluted income
per share calculation 67.4 67.4
==== ====
Income from continuing
operations $246.0
Income tax expense from
continuing operations 145.5
Loss from discontinued
operations, net of tax (9.3)
Income tax expense (benefit)
from discontinued operations 0.1
Interest expense 37.7
Depreciation 36.3
Amortization, including
marketing fees 8.3
Product registration and recall
matters, non-cash portion (0.2)
Smith & Hawken closure process,
non-cash portion (13.3)
-----
Adjusted EBITDA $451.1
======
Nine Months Ended June 27, 2009
-------------------------------
As
Reported Product Adjusted
Registration
--------- and --------
Recall
Matters
-------
Net sales $2,458.2 $(0.3) $2,458.5
Cost of sales 1,541.8 (0.2) 1,542.0
Cost of sales -product
registration and recall
matters 7.1 7.1 -
--- --- ---
Gross profit 909.3 (7.2) 916.5
% of sales 37.0% 37.3%
Operating expenses:
Selling, general and
administrative 565.7 - 565.7
Product registration and recall
matters 14.8 14.8 -
Other income, net (1.7) - (1.7)
---- --- ----
Income from operations 330.5 (22.0) 352.5
% of sales 13.4% 14.3%
Interest expense 45.9 - 45.9
---- --- ----
Income from continuing
operations before income taxes 284.6 (22.0) 306.6
Income tax expense from
continuing operations 102.7 (7.8) 110.5
----- ---- -----
Income from continuing
operations $181.9 $(14.2) $196.1
====== ====== ======
Basic income per share from
continuing operations $2.80 $3.02
===== =====
Diluted income per share from
continuing operations $2.76 $2.98
----- -----
Common shares used in basic
income
per share calculation 64.9 64.9
==== ====
Common shares and potential
common
shares used in diluted income
per share calculation 65.8 65.8
==== ====
Income from continuing
operations $181.9
Income tax expense from
continuing operations 102.7
Loss from discontinued
operations, net of tax (13.7)
Income tax expense (benefit)
from discontinued operations (7.0)
Interest expense 45.9
Depreciation 35.0
Amortization, including
marketing fees 9.5
Product registration and recall
matters, non-cash portion 2.6
Smith & Hawken closure process,
non-cash portion 2.7
---
Adjusted EBITDA $359.6
======
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 shares outstanding
(1) 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 restricted stock units)
(2) 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
(3) measure of 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.
-----------------------------------------------------------------------
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.
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SOURCE The Scotts Miracle-Gro Company |
