The Scotts MiracleGro Company Commmon (SMG, Financial) filed Quarterly Report for the period ended 2010-04-03.
The Scotts Miraclegro Company Commmon has a market cap of $3.19 billion; its shares were traded at around $47.9 with a P/E ratio of 15.7 and P/S ratio of 1. The dividend yield of The Scotts Miraclegro Company Commmon stocks is 1.1%. The Scotts Miraclegro Company Commmon had an annual average earning growth of 2% over the past 10 years.SMG is in the portfolios of Bruce Kovner of Caxton Associates, David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC, Paul Tudor Jones of The Tudor Group, RS Investment Management, Jim Simons of Renaissance Technologies LLC, Manning & Napier Advisors, Inc, Tom Russo of Gardner Russo & Gardner, Steven Cohen of SAC Capital Advisors, John Keeley of Keeley Fund Management, Jeremy Grantham of GMO LLC.
Selling, general and administrative (SG&A) expenses increased $24.4 million, or 12.0%, to $228.4 million for the second quarter and $23.3 million, or 6.8%, to $366 million for the first six months of fiscal 2010. Excluding the impact of foreign exchange rates, SG&A expenses for the second quarter and first six months of fiscal 2010 increased 10.3% and 4.8%, respectively. The increase in SG&A expenses is primarily attributable to increased spending in the Global Consumer segment, driven by increased advertising, selling and marketing. SG&A spending for the Global Professional and Scotts LawnService® segments declined, while Corporate & Other SG&A expenses increased slightly. We expect full-year SG&A expenses to increase by 3% to 4%, driven by trends consistent with our first six months.
We recorded $1.1 million and $2.8 million of SG&A-related product registration and recall costs during the second quarter and first six months of fiscal 2010, respectively, which primarily related to third-party compliance review, legal and consulting fees. For the quarter and six months ended March 28, 2009, we recorded $5.5 million and $11.7 million of SG&A-related product registration and recall costs, respectively.
Interest expense for the second quarter and first six months of fiscal 2010 was $15.1 million and $25.8 million, respectively, compared to $15.9 million and $32.2 million for the second quarter and first six months of fiscal 2009. The decrease in interest expense for the first six months of fiscal 2010 was attributable to decreases in both average borrowings and weighted average interest rates, while the decrease for the second quarter was primarily due to a decrease in average borrowings. Excluding the impact of foreign exchange rates, average borrowings decreased by approximately $126 million during the first six months of fiscal 2010 as compared to the prior year period. Weighted average interest rates decreased by approximately 67 basis points. We expect full-year interest expense to decline compared to fiscal 2009, as lower average borrowings and weighted average interest rates on our senior secured credit facility will be partially offset by higher interest expense attributable to the $200 million aggregate principal amount of Senior Notes, with an effective interest rate of 7.375%, due 2018 (the Senior Notes) issued on January 14, 2010. We issued the Senior Notes as part of a broader strategy to diversify sources of liquidity and debt maturities in anticipation of the expiration of our current senior secured credit facility in February 2012. Refer to NOTE 6. DEBT of the Notes to Condensed, Consolidated Financial Statements for a further description of the Senior Notes.
We reported net income from continuing operations of $119.9 million, or $1.78 per diluted share, for the second quarter of fiscal 2010 compared to $84.1 million, or $1.28 per diluted share, for the second quarter of fiscal 2009. Net income from continuing operations in the first six months of fiscal 2010 was $70.1 million, or $1.04 per diluted share, versus $31.2 million, or $0.47 per diluted share, for the same period of fiscal 2009. The increase for the second quarter and first six months of fiscal 2010 was driven primarily by increased net sales and gross profit in the Global Consumer segment, partially offset by an increase in SG&A spending. The impact of the calendar shift increased earnings by approximately $0.23 and $0.26 per diluted share for the second quarter and first six months of fiscal 2010, respectively. Diluted average common shares used in the diluted net income per common share calculation were 67.4 million for the second quarter of fiscal 2010 compared to 65.8 million for the same period a year ago. Diluted average common shares used in the diluted net income per common share calculation were 67.2 million for the six months ended April 3, 2010 versus 65.7 million for the six months ended March 28, 2009. Diluted average common shares included 1.2 million equivalent shares for both the second quarter and first six months of fiscal 2010 to reflect the effect of the assumed conversion of dilutive stock options, restricted stock and restricted stock unit awards. For both the second quarter and first six months of fiscal 2009, diluted average common shares included 0.9 million equivalent shares. The changes in diluted average common shares were primarily driven by the fluctuation in the Companys share price.
In our first quarter of fiscal 2010, we began presenting Smith & Hawken as discontinued operations and prior periods have been reclassified to conform to this presentation. We reported a loss from discontinued operations, net of tax, of $1.4 million for the second quarter of fiscal 2010, compared to a loss, net of tax, of $6.7 million for the second quarter of fiscal 2009. The loss from discontinued operations, net of tax, was $9.3 million for the first six months of fiscal 2010 versus $10.8 million for the same period of fiscal 2009. The losses recorded in fiscal 2010 relate primarily to first quarter charges associated with the termination of retail site lease obligations, third-party agency fees and severance and benefit commitments. These charges were partially offset by a gain of approximately $18 million from the sale of the Smith & Hawken intellectual property on December 30, 2009.
Read the The complete Report
The Scotts Miraclegro Company Commmon has a market cap of $3.19 billion; its shares were traded at around $47.9 with a P/E ratio of 15.7 and P/S ratio of 1. The dividend yield of The Scotts Miraclegro Company Commmon stocks is 1.1%. The Scotts Miraclegro Company Commmon had an annual average earning growth of 2% over the past 10 years.SMG is in the portfolios of Bruce Kovner of Caxton Associates, David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC, Paul Tudor Jones of The Tudor Group, RS Investment Management, Jim Simons of Renaissance Technologies LLC, Manning & Napier Advisors, Inc, Tom Russo of Gardner Russo & Gardner, Steven Cohen of SAC Capital Advisors, John Keeley of Keeley Fund Management, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
As a result of these registration and recall matters, we have reversed sales associated with estimated returns of affected products, recorded charges for affected inventory and recorded other registration and recall-related costs. The impacts of these adjustments were pre-tax charges of $1.7 million and $8.0 million for the three-month periods, and $4.3 million and $15.6 million for the six-month periods ended April 3, 2010 and March 28, 2009, respectively. We expect to incur $8.0 to $12.0 million in fiscal 2010 on recall and registration matters, excluding possible fines, penalties, judgments and/or litigation costs. These fiscal 2010 charges primarily consist of costs associated with the reworking of certain finished goods inventories, the potential disposal of certain products and ongoing third-party professional services related to the U.S. EPA and U.S. DOJ investigations.Selling, general and administrative (SG&A) expenses increased $24.4 million, or 12.0%, to $228.4 million for the second quarter and $23.3 million, or 6.8%, to $366 million for the first six months of fiscal 2010. Excluding the impact of foreign exchange rates, SG&A expenses for the second quarter and first six months of fiscal 2010 increased 10.3% and 4.8%, respectively. The increase in SG&A expenses is primarily attributable to increased spending in the Global Consumer segment, driven by increased advertising, selling and marketing. SG&A spending for the Global Professional and Scotts LawnService® segments declined, while Corporate & Other SG&A expenses increased slightly. We expect full-year SG&A expenses to increase by 3% to 4%, driven by trends consistent with our first six months.
We recorded $1.1 million and $2.8 million of SG&A-related product registration and recall costs during the second quarter and first six months of fiscal 2010, respectively, which primarily related to third-party compliance review, legal and consulting fees. For the quarter and six months ended March 28, 2009, we recorded $5.5 million and $11.7 million of SG&A-related product registration and recall costs, respectively.
Interest expense for the second quarter and first six months of fiscal 2010 was $15.1 million and $25.8 million, respectively, compared to $15.9 million and $32.2 million for the second quarter and first six months of fiscal 2009. The decrease in interest expense for the first six months of fiscal 2010 was attributable to decreases in both average borrowings and weighted average interest rates, while the decrease for the second quarter was primarily due to a decrease in average borrowings. Excluding the impact of foreign exchange rates, average borrowings decreased by approximately $126 million during the first six months of fiscal 2010 as compared to the prior year period. Weighted average interest rates decreased by approximately 67 basis points. We expect full-year interest expense to decline compared to fiscal 2009, as lower average borrowings and weighted average interest rates on our senior secured credit facility will be partially offset by higher interest expense attributable to the $200 million aggregate principal amount of Senior Notes, with an effective interest rate of 7.375%, due 2018 (the Senior Notes) issued on January 14, 2010. We issued the Senior Notes as part of a broader strategy to diversify sources of liquidity and debt maturities in anticipation of the expiration of our current senior secured credit facility in February 2012. Refer to NOTE 6. DEBT of the Notes to Condensed, Consolidated Financial Statements for a further description of the Senior Notes.
We reported net income from continuing operations of $119.9 million, or $1.78 per diluted share, for the second quarter of fiscal 2010 compared to $84.1 million, or $1.28 per diluted share, for the second quarter of fiscal 2009. Net income from continuing operations in the first six months of fiscal 2010 was $70.1 million, or $1.04 per diluted share, versus $31.2 million, or $0.47 per diluted share, for the same period of fiscal 2009. The increase for the second quarter and first six months of fiscal 2010 was driven primarily by increased net sales and gross profit in the Global Consumer segment, partially offset by an increase in SG&A spending. The impact of the calendar shift increased earnings by approximately $0.23 and $0.26 per diluted share for the second quarter and first six months of fiscal 2010, respectively. Diluted average common shares used in the diluted net income per common share calculation were 67.4 million for the second quarter of fiscal 2010 compared to 65.8 million for the same period a year ago. Diluted average common shares used in the diluted net income per common share calculation were 67.2 million for the six months ended April 3, 2010 versus 65.7 million for the six months ended March 28, 2009. Diluted average common shares included 1.2 million equivalent shares for both the second quarter and first six months of fiscal 2010 to reflect the effect of the assumed conversion of dilutive stock options, restricted stock and restricted stock unit awards. For both the second quarter and first six months of fiscal 2009, diluted average common shares included 0.9 million equivalent shares. The changes in diluted average common shares were primarily driven by the fluctuation in the Companys share price.
In our first quarter of fiscal 2010, we began presenting Smith & Hawken as discontinued operations and prior periods have been reclassified to conform to this presentation. We reported a loss from discontinued operations, net of tax, of $1.4 million for the second quarter of fiscal 2010, compared to a loss, net of tax, of $6.7 million for the second quarter of fiscal 2009. The loss from discontinued operations, net of tax, was $9.3 million for the first six months of fiscal 2010 versus $10.8 million for the same period of fiscal 2009. The losses recorded in fiscal 2010 relate primarily to first quarter charges associated with the termination of retail site lease obligations, third-party agency fees and severance and benefit commitments. These charges were partially offset by a gain of approximately $18 million from the sale of the Smith & Hawken intellectual property on December 30, 2009.
Read the The complete Report
