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The Scotts MiracleGro Company Commmon Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 8, 2013 11:36PM
The Scotts MiracleGro Company Commmon (SMG) filed Quarterly Report for the period ended 2012-12-29. Scotts Miracle Gro Co has a market cap of $2.72 billion; its shares were traded at around $44.07 with a P/E ratio of 23.31 and P/S ratio of 0.9704. The dividend yield of Scotts Miracle Gro Co stocks is 2.83%. Scotts Miracle Gro Co had an annual average earning growth of 1.7% over the past 10 years.
Highlight of Business Operations:We reported a loss from continuing operations of $68.3 million, or $1.11 per diluted share, for the first quarter of fiscal 2013 compared to $73.1 million, or $1.20 per diluted share, for the first quarter of fiscal 2012. We anticipated a loss in our first fiscal quarter due to the seasonal nature of our business, in which sales are heavily weighted to the spring and summer selling seasons. The decrease in our loss from continuing operations for the first three months of fiscal 2013 was driven primarily by the impact of higher volume, partially offset by higher general and administrative expenses and a reduced tax benefit due to a reduction in the effective tax rate. Diluted average common shares used in the diluted net income per common share calculation were 61.4 million for the first quarter of fiscal 2012 compared to 60.9 million for the same period a year ago.
Global Consumer segment net sales were $153.2 million in the first quarter of fiscal 2013, an increase of 2.7% from the first quarter of fiscal 2012. For the three months ended December 29, 2012, volume, pricing and foreign exchange rates favorably impacted net sales by 2.1%, 0.3% and 0.3%, respectively. Net sales in the U.S. increased $3.7 million, or 3.6% for the first quarter of fiscal 2013 as compared to the same periods in fiscal 2012. The increase in U.S. net sales was driven by higher sales of fertilizer and control products, partially offset by a decline in wild bird food products and in revenues attributable to our marketing agreement with Monsanto. Excluding the impact of changes in foreign exchange rates, net sales internationally decreased by $0.1 million,
Scotts LawnService® net sales increased by $7.2 million, or 19.1%, in the first quarter of fiscal 2013, as compared to the same period of fiscal 2012. The increase in net sales was driven by increased customer count and a weather driven delay of sales from the fourth quarter of fiscal 2012 to the first quarter of 2013.
The operating loss for Scotts LawnService® decreased by $3.7 million, or 80.4%, in the first quarter of fiscal 2013, as compared to the same period of fiscal 2012. The improved performance was driven by higher net sales and improved gross margin rate, partially offset by higher SG&A spending.
On November 15, 2012, we entered into a new Master Accounts Receivable Purchase Agreement (the “2012 MARP Agreement”), with an initial stated termination date of October 30, 2013, or such later date as may be mutually agreed by the Company and the banks party thereto. The 2012 MARP Agreement, which is uncommitted, provides for the discretionary sale by the Company, and the discretionary purchase by the banks, on a revolving basis, of accounts receivable generated by sales to three specified debtors in an aggregate amount not to exceed $400 million, with debtor sublimits ranging from $100 million to $200 million. Under the terms of the 2012 MARP Agreement, the banks have the opportunity, but not the obligation, to purchase those accounts receivable offered by us at a discount (from the agreed base value thereof) effectively equal to the greater of 7-day or 3-month LIBOR plus 0.75%.
Stocks Discussed: SMG,