Scotts Reports Record Second Quarter Results - EPS of $2.80 vs. $2.15

Reaffirms 2001 Net Earnings Growth Target of at Least 15%



Apr 26, 2001, 01:00 ET from The Scotts Company

    COLUMBUS, Ohio, April 26 /PRNewswire/ -- The Scotts Company (NYSE:   SMG)
 today reported record financial results for the second quarter and six months
 ended March 31, 2001.
     Net sales for the second quarter grew to $740.0 million, a 7% increase
 compared to the $693.9 million reported in the same quarter last year.
 Excluding the impact of foreign exchange rates, net sales for the second
 quarter were up 8%.  In accordance with new accounting regulations, financial
 figures for both years reflect the reclassification of certain promotional
 expenses as reductions to revenues instead of expenses.
     Earnings before interest, taxes, depreciation and amortization ("EBITDA")
 were $183.9 million, a 24% increase over the $148.2 million reported in the
 second quarter last year.  Net earnings increased 34% to $84.8 million from
 $63.4 million.  On a diluted per share basis, earnings grew 30% to $2.80
 compared with $2.15 in the second quarter last year.  Cash earnings per share,
 defined as net earnings plus amortization, for the quarter increased 27% to
 $3.01 as compared to last year's second quarter.
     Charles M. Berger, Chairman and Chief Executive Officer, commented, "We
 expect to see continued growth in the lawn and garden business as a result of
 applying our successful formula of leveraging strong brands through effective
 consumer pull advertising and solid trade relationships.  We remain confident
 we will achieve this year's goal of growing net income at least 15%."
 
     Second Quarter Results
     North American Consumer sales in the second quarter grew 7% to
 $574.1 million, compared with $537.6 million in the same quarter last year.
 Within the North American group year-to-year comparisons are affected by the
 company's shift from using outside distributors to distributing most of its
 products to retailers directly.  Consumer lawns showed a 14% increase to
 $301.9 million in sales compared to last year's second quarter, while sales in
 most other North American consumer business units were flat to down.
     International consumer sales for the second quarter were $108.4 million,
 representing a 6% increase over last year's second quarter of $101.9 million.
 Excluding the effect of foreign exchange rates, sales increased 15%.  The
 increase resulted primarily from a successful sell-in to retailers of products
 under the new Substral(R) brand name, a brand acquired earlier this fiscal
 year.
     Global Professional sales for the quarter were $57.5 million, representing
 a 6% increase over last year's second quarter of $54.4 million.  Excluding the
 effect of foreign exchange rates, sales increased 10%.  The increase is
 attributed to new product introductions and increased growing media sales from
 the exclusive worldwide Bord na Mona supply agreement under the Shamrock(R)
 brand name.
     Gross margin for the quarter expanded to 43.1% compared with 41.3% in the
 second quarter last year.  The increase in margin reflects favorable product
 mix, higher production levels and better utilization of Scotts' expanded
 production facilities, which have resulted in cost savings and operating
 efficiencies.
     For the second quarter, the Company recognized a net $12.0 million in
 Roundup(R) commission compared with $6.9 million in the same quarter of fiscal
 year 2000.  The increase in Roundup commission reflects the success of new and
 improved formulations, despite an increase in contribution expenses.
 
     Six-Month Results
     For the six months ended March 31, 2001, the Company reported net sales of
 $889.1 million compared with $880.0 million in the same period last year.
 Excluding the impact of foreign exchange rates, net sales for the first six
 months were up 3%.  EBITDA was $135.2 million, flat compared to the same
 period last year.  Net earnings increased 3% to $33.6 million compared to
 $32.6 million in the prior year period.  On a diluted per share basis,
 earnings were $1.12 compared with $1.09 in the same period last year,
 excluding a $.21 non-recurring earnings per share reduction resulting from the
 early conversion of the Class A Preferred Stock which occurred in October
 1999.  Cash earnings per share for the first six months were flat at $1.53 as
 compared to the same period last year.
     North American Consumer sales in the first half of fiscal 2001 grew 1% to
 $648.0 million compared with $640.5 million in the same period last year.
     International consumer sales for the six-month period were flat compared
 to the prior year period.  Excluding the effect of foreign exchange rate
 changes, International consumer sales increased 9%.
     Global professional sales in the first half of fiscal year 2001 increased
 3% to $92.7 million compared to the prior year comparable period sales of
 $89.8 million.  Excluding the effect of foreign exchange rate changes, sales
 from this segment increased 8% on a year-to-date basis.
     For the six-month period, the Company recognized a net $7.4 million in
 Roundup commission compared with $3.5 million in the same period of 2000.
 
     The company will host a live webcast today at 10:00 a.m. EDT at
 http://www.scottscompany.com to discuss 2001 second quarter results and the
 outlook for the balance of the year.
 
     For more information on The Scotts Company please visit our web site at
 http://www.scottscompany.com.
 
     About Scotts
     The Scotts Company is the world's leading supplier of consumer products
 for lawn and garden care, with a full range of products for professional
 horticulture as well.  The Company owns the industry's most recognized brands.
 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.K., Scotts' brands include Weedol(R) and
 Pathclear(R), the top-selling consumer herbicides; Evergreen(R), the leading
 lawn fertilizer line; the Levington(R) line of lawn and garden products; and
 Miracle-Gro(R), the leading plant fertilizer.  The Company's leading brands in
 continental Europe include KB(R) and Fertiligene(R) in France and Substral(R),
 NexaLotte(R) and Celaflor(R) in Germany.
 
     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:
 
     *     Continued marketplace acceptance of the Company's "pull" advertising
           marketing strategies;
     *     The ability to maintain profit margins and to produce products and
           add production capacity on a timely basis;
     *     Competition in the North American and European consumer and
           professional segments;
     *     Competition between and the recent consolidation within the retail
           outlets selling the Company's products;
     *     Public perceptions regarding the safety of the Company's products;
     *     Changes in economic conditions, interest rates and currency exchange
           rates in the countries in which the company operates;
     *     The possibility of new competitors entering into the Company's
           business;
     *     The ability to improve processes and business practices to keep pace
           with the economic, competitive and technological environment,
           including successful completion of the Company's Enterprise Resource
           Planning project; and
     *     The ability to integrate several recent acquisitions.
 
     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 COMPANY
            Results of Operations for the Three, Six and Twelve Months
                       Ended March 31, 2001 and April 1, 2000
                        (in millions, except per share data)
                                    (Unaudited)
                          Note: See Accompanying Footnotes
 
                             Three Months     Six Months      Twelve Months
                                 Ended           Ended            Ended
                             March   April   March   April   March    April
                               31      1      31       1       31       1
                Footnotes     2001    2000   2001    2000     2001     2000
 
     Net sales              $740.0  $693.9  $889.1  $880.0  $1,718.1  $1,684.4
     Cost of sales           420.9   407.3   535.4   524.5   1,061.5   1,031.3
     Gross profit            319.1   286.6   353.7   355.5     656.6     653.1
     % of sales              43.1%   41.3%   39.8%   40.4%     38.2%     38.8%
 
     Gross commission from
      agency agreement        16.6     9.0    16.5     9.2      46.4      21.9
     Contribution expenses
      under agency agreement   3.8     1.3     7.5     2.5      10.0       2.5
     Amortization of
      marketing fee            0.8     0.8     1.6     3.2       3.3       4.0
     Net commission earned
      from agency agreement   12.0     6.9     7.4     3.5      33.1      15.4
 
     Operating expenses:
       Advertising and
        promotion             68.2    71.4    80.8    89.6     145.0     147.9
       S,G&A                  89.0    83.6   164.7   151.8     314.7     306.6
       Amortization of
        goodwill & other
        intangibles            7.4     7.7    14.2    13.7      27.5      28.1
       Other income           (1.4)   (1.7)   (2.5)   (0.5)     (7.2)     (4.4)
     Income from operations  167.9   132.5   103.9   104.4     209.7     190.3
     % of sales              22.7%   19.1%   11.7%   11.9%     12.2%     11.3%
 
     Interest expense         26.1    25.9    47.4    49.6      91.7      94.3
 
     Income before taxes     141.8   106.6    56.5    54.8     118.0      96.0
 
     Income tax expense       57.0    43.2    22.9    22.2      44.0      39.0
 
     Net income before
      extraordinary item      84.8    63.4    33.6    32.6      74.0      57.0
 
     Extraordinary loss on
      early extinguishment
      of debt, net of tax       --              --                --       0.1
 
     Net income               84.8    63.4    33.6    32.6      74.0      56.9
 
     Preferred stock
      dividends                 --      --             6.4        --      11.2
 
     Income applicable to
      common shareholders     84.8    63.4    33.6    26.2      74.0      45.7
 
     Basic earnings
      per share       (1)     3.01    2.27    1.19    0.94      2.64      1.61
 
     Diluted earnings
      per share       (2)     2.80    2.15    1.12    0.88      2.49      1.51
 
     Common shares used in
      basic earnings per
      share calculation       28.2    27.9    28.2    27.9      28.0      28.3
 
     Common shares and
      potential common shares
      used in diluted earnings
      per share calculation   30.3    29.5    30.0    29.8      29.7      30.3
 
     EBITDA           (3)   $183.9  $148.2  $135.2  $135.8    $270.5    $252.1
 
 
                               THE SCOTTS COMPANY
               Net Sales by Business Unit - Three and Six Months
                     Ended March 31, 2001 and April 1, 2000
                                 (in millions)
                                  (unaudited)
 
                                              Three Months Ended     % Change
                                               March 31   April 1
                                                 2001       2000       Actual
 
     Lawns                                     $301.9      $263.8       14.4%
     Gardens                                     63.0        67.3       -6.4%
     Growing Media                               97.7        96.1        1.7%
     Ortho                                       82.3        82.5       -0.2%
     Lawn Service                                 4.4         2.6       69.2%
     Canada                                      13.2        13.8       -4.4%
     Other                                       11.6        11.5        0.9%
     North America Consumer                     574.1       537.6        6.8%
 
     International Consumer                     108.4       101.9        6.4%
 
     Global Professional                         57.5        54.4        5.7%
 
     Consolidated                              $740.0      $693.9        6.6%
 
                                               Six Months Ended       % Change
                                               March 31    April 1
                                                 2001        2000       Actual
 
     Lawns                                     $319.2      $306.1        4.3%
     Gardens                                     70.7        81.0      -12.7%
     Growing Media                              118.0       115.3        2.3%
     Ortho                                       98.6       100.5       -1.9%
     Lawn Service                                 9.2         5.4       70.4%
     Canada                                      14.2        15.2       -6.6%
     Other                                       18.1        17.0        6.5%
     North America Consumer                     648.0       640.5        1.2%
 
     International Consumer                     148.4       149.7       -0.9%
 
     Global Professional                         92.7        89.8        3.2%
 
     Consolidated                              $889.1      $880.0        1.0%
 
 
                                THE SCOTTS COMPANY
                            Consolidated Balance Sheets
            As of March 31, 2001, April 1, 2000 and September 30, 2000
                                    (Unaudited)
                    (in millions, except shares & share prices)
 
                                               March 31    April 1     Sept 30
                                                 2001        2000        2000
 
     ASSETS
       Current assets
        Cash                                     17.8        29.7        33.0
        Accounts receivable, net                693.0       649.3       216.0
        Inventories, net                        402.0       366.3       307.5
        Deferred tax asset                       27.6        26.5        25.1
        Other current assets                     67.1        63.6        62.3
 
         Total current assets                 1,207.5     1,135.4       643.9
 
       Property, plant and equipment, net       297.0       258.1       290.5
       Intangible assets, net                   770.0       796.2       743.1
       Other assets                              72.4        80.2        83.9
 
         Total assets                        $2,346.9    $2,269.9    $1,761.4
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
       Current liabilities
        Short term debt                         132.5       183.2        49.4
        Accounts payable                        303.7       281.7       153.0
        Other current liabilities               266.4       287.6       207.4
 
         Total current liabilities              702.6       752.5       409.8
 
       Long-term debt                         1,075.3     1,014.7       813.4
       Other liabilities                         49.8        61.6        60.3
 
         Total liabilities                    1,827.7     1,828.8     1,283.5
 
       Shareholders' equity                     519.2       441.1       477.9
 
         Total liabilities and equity        $2,346.9    $2,269.9    $1,761.4
 
     Key Statistics:
       Debt to book capitalization              69.9%       73.1%       64.4%
 
       Market capitalization:
        Common shares outstanding and
        dilutive common share equivalents        30.0        29.8        29.6
 
        Share price on balance sheet date       38.05       42.00       33.50
                                             $1,141.5    $1,251.6      $991.6
 
 
                               THE SCOTTS COMPANY
                  Footnotes to Preceding Financial Statements
                      (in millions, except per share data)
 
     General:
           Reclassifications
 
           Certain reclassifications have been made to the Results of
           Operations and Consolidated Balance Sheets for the three, six and
           twelve months ended April 1, 2000 to conform to fiscal 2001
           classifications
 
     Results of Operations
 
     (1)   Basic earnings per common share is calculated by dividing income
           applicable to common shareholders by average common shares
           outstanding during the period.
 
     (2)   In usual cases, diluted earnings per common share is calculated by
           dividing net income, before preferred stock dividends, by the
           average common shares and dilutive potential common shares (Class A
           Convertible Preferred Stock, and common stock warrants and options)
           outstanding during the period.  However, for the six months and
           twelve months ended April 1, 2000, diluted earnings per common share
           is calculated by dividing income applicable to common shareholders,
           by the average common shares and dilutive potential common shares
           outstanding during the period.  This treatment is to give
           consideration to the anti-dilutive impact of the preferred stock
           dividends paid during fiscal 2000.
 
     (3)   "EBITDA" is defined as income from operations, plus depreciation and
           amortization.  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 as an
           indicator of operating performance or to cash flow as a measure of
           liquidity.
 
                     MAKE YOUR OPINION COUNT -- Click Here
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SOURCE The Scotts Company
    COLUMBUS, Ohio, April 26 /PRNewswire/ -- The Scotts Company (NYSE:   SMG)
 today reported record financial results for the second quarter and six months
 ended March 31, 2001.
     Net sales for the second quarter grew to $740.0 million, a 7% increase
 compared to the $693.9 million reported in the same quarter last year.
 Excluding the impact of foreign exchange rates, net sales for the second
 quarter were up 8%.  In accordance with new accounting regulations, financial
 figures for both years reflect the reclassification of certain promotional
 expenses as reductions to revenues instead of expenses.
     Earnings before interest, taxes, depreciation and amortization ("EBITDA")
 were $183.9 million, a 24% increase over the $148.2 million reported in the
 second quarter last year.  Net earnings increased 34% to $84.8 million from
 $63.4 million.  On a diluted per share basis, earnings grew 30% to $2.80
 compared with $2.15 in the second quarter last year.  Cash earnings per share,
 defined as net earnings plus amortization, for the quarter increased 27% to
 $3.01 as compared to last year's second quarter.
     Charles M. Berger, Chairman and Chief Executive Officer, commented, "We
 expect to see continued growth in the lawn and garden business as a result of
 applying our successful formula of leveraging strong brands through effective
 consumer pull advertising and solid trade relationships.  We remain confident
 we will achieve this year's goal of growing net income at least 15%."
 
     Second Quarter Results
     North American Consumer sales in the second quarter grew 7% to
 $574.1 million, compared with $537.6 million in the same quarter last year.
 Within the North American group year-to-year comparisons are affected by the
 company's shift from using outside distributors to distributing most of its
 products to retailers directly.  Consumer lawns showed a 14% increase to
 $301.9 million in sales compared to last year's second quarter, while sales in
 most other North American consumer business units were flat to down.
     International consumer sales for the second quarter were $108.4 million,
 representing a 6% increase over last year's second quarter of $101.9 million.
 Excluding the effect of foreign exchange rates, sales increased 15%.  The
 increase resulted primarily from a successful sell-in to retailers of products
 under the new Substral(R) brand name, a brand acquired earlier this fiscal
 year.
     Global Professional sales for the quarter were $57.5 million, representing
 a 6% increase over last year's second quarter of $54.4 million.  Excluding the
 effect of foreign exchange rates, sales increased 10%.  The increase is
 attributed to new product introductions and increased growing media sales from
 the exclusive worldwide Bord na Mona supply agreement under the Shamrock(R)
 brand name.
     Gross margin for the quarter expanded to 43.1% compared with 41.3% in the
 second quarter last year.  The increase in margin reflects favorable product
 mix, higher production levels and better utilization of Scotts' expanded
 production facilities, which have resulted in cost savings and operating
 efficiencies.
     For the second quarter, the Company recognized a net $12.0 million in
 Roundup(R) commission compared with $6.9 million in the same quarter of fiscal
 year 2000.  The increase in Roundup commission reflects the success of new and
 improved formulations, despite an increase in contribution expenses.
 
     Six-Month Results
     For the six months ended March 31, 2001, the Company reported net sales of
 $889.1 million compared with $880.0 million in the same period last year.
 Excluding the impact of foreign exchange rates, net sales for the first six
 months were up 3%.  EBITDA was $135.2 million, flat compared to the same
 period last year.  Net earnings increased 3% to $33.6 million compared to
 $32.6 million in the prior year period.  On a diluted per share basis,
 earnings were $1.12 compared with $1.09 in the same period last year,
 excluding a $.21 non-recurring earnings per share reduction resulting from the
 early conversion of the Class A Preferred Stock which occurred in October
 1999.  Cash earnings per share for the first six months were flat at $1.53 as
 compared to the same period last year.
     North American Consumer sales in the first half of fiscal 2001 grew 1% to
 $648.0 million compared with $640.5 million in the same period last year.
     International consumer sales for the six-month period were flat compared
 to the prior year period.  Excluding the effect of foreign exchange rate
 changes, International consumer sales increased 9%.
     Global professional sales in the first half of fiscal year 2001 increased
 3% to $92.7 million compared to the prior year comparable period sales of
 $89.8 million.  Excluding the effect of foreign exchange rate changes, sales
 from this segment increased 8% on a year-to-date basis.
     For the six-month period, the Company recognized a net $7.4 million in
 Roundup commission compared with $3.5 million in the same period of 2000.
 
     The company will host a live webcast today at 10:00 a.m. EDT at
 http://www.scottscompany.com to discuss 2001 second quarter results and the
 outlook for the balance of the year.
 
     For more information on The Scotts Company please visit our web site at
 http://www.scottscompany.com.
 
     About Scotts
     The Scotts Company is the world's leading supplier of consumer products
 for lawn and garden care, with a full range of products for professional
 horticulture as well.  The Company owns the industry's most recognized brands.
 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.K., Scotts' brands include Weedol(R) and
 Pathclear(R), the top-selling consumer herbicides; Evergreen(R), the leading
 lawn fertilizer line; the Levington(R) line of lawn and garden products; and
 Miracle-Gro(R), the leading plant fertilizer.  The Company's leading brands in
 continental Europe include KB(R) and Fertiligene(R) in France and Substral(R),
 NexaLotte(R) and Celaflor(R) in Germany.
 
     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:
 
     *     Continued marketplace acceptance of the Company's "pull" advertising
           marketing strategies;
     *     The ability to maintain profit margins and to produce products and
           add production capacity on a timely basis;
     *     Competition in the North American and European consumer and
           professional segments;
     *     Competition between and the recent consolidation within the retail
           outlets selling the Company's products;
     *     Public perceptions regarding the safety of the Company's products;
     *     Changes in economic conditions, interest rates and currency exchange
           rates in the countries in which the company operates;
     *     The possibility of new competitors entering into the Company's
           business;
     *     The ability to improve processes and business practices to keep pace
           with the economic, competitive and technological environment,
           including successful completion of the Company's Enterprise Resource
           Planning project; and
     *     The ability to integrate several recent acquisitions.
 
     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 COMPANY
            Results of Operations for the Three, Six and Twelve Months
                       Ended March 31, 2001 and April 1, 2000
                        (in millions, except per share data)
                                    (Unaudited)
                          Note: See Accompanying Footnotes
 
                             Three Months     Six Months      Twelve Months
                                 Ended           Ended            Ended
                             March   April   March   April   March    April
                               31      1      31       1       31       1
                Footnotes     2001    2000   2001    2000     2001     2000
 
     Net sales              $740.0  $693.9  $889.1  $880.0  $1,718.1  $1,684.4
     Cost of sales           420.9   407.3   535.4   524.5   1,061.5   1,031.3
     Gross profit            319.1   286.6   353.7   355.5     656.6     653.1
     % of sales              43.1%   41.3%   39.8%   40.4%     38.2%     38.8%
 
     Gross commission from
      agency agreement        16.6     9.0    16.5     9.2      46.4      21.9
     Contribution expenses
      under agency agreement   3.8     1.3     7.5     2.5      10.0       2.5
     Amortization of
      marketing fee            0.8     0.8     1.6     3.2       3.3       4.0
     Net commission earned
      from agency agreement   12.0     6.9     7.4     3.5      33.1      15.4
 
     Operating expenses:
       Advertising and
        promotion             68.2    71.4    80.8    89.6     145.0     147.9
       S,G&A                  89.0    83.6   164.7   151.8     314.7     306.6
       Amortization of
        goodwill & other
        intangibles            7.4     7.7    14.2    13.7      27.5      28.1
       Other income           (1.4)   (1.7)   (2.5)   (0.5)     (7.2)     (4.4)
     Income from operations  167.9   132.5   103.9   104.4     209.7     190.3
     % of sales              22.7%   19.1%   11.7%   11.9%     12.2%     11.3%
 
     Interest expense         26.1    25.9    47.4    49.6      91.7      94.3
 
     Income before taxes     141.8   106.6    56.5    54.8     118.0      96.0
 
     Income tax expense       57.0    43.2    22.9    22.2      44.0      39.0
 
     Net income before
      extraordinary item      84.8    63.4    33.6    32.6      74.0      57.0
 
     Extraordinary loss on
      early extinguishment
      of debt, net of tax       --              --                --       0.1
 
     Net income               84.8    63.4    33.6    32.6      74.0      56.9
 
     Preferred stock
      dividends                 --      --             6.4        --      11.2
 
     Income applicable to
      common shareholders     84.8    63.4    33.6    26.2      74.0      45.7
 
     Basic earnings
      per share       (1)     3.01    2.27    1.19    0.94      2.64      1.61
 
     Diluted earnings
      per share       (2)     2.80    2.15    1.12    0.88      2.49      1.51
 
     Common shares used in
      basic earnings per
      share calculation       28.2    27.9    28.2    27.9      28.0      28.3
 
     Common shares and
      potential common shares
      used in diluted earnings
      per share calculation   30.3    29.5    30.0    29.8      29.7      30.3
 
     EBITDA           (3)   $183.9  $148.2  $135.2  $135.8    $270.5    $252.1
 
 
                               THE SCOTTS COMPANY
               Net Sales by Business Unit - Three and Six Months
                     Ended March 31, 2001 and April 1, 2000
                                 (in millions)
                                  (unaudited)
 
                                              Three Months Ended     % Change
                                               March 31   April 1
                                                 2001       2000       Actual
 
     Lawns                                     $301.9      $263.8       14.4%
     Gardens                                     63.0        67.3       -6.4%
     Growing Media                               97.7        96.1        1.7%
     Ortho                                       82.3        82.5       -0.2%
     Lawn Service                                 4.4         2.6       69.2%
     Canada                                      13.2        13.8       -4.4%
     Other                                       11.6        11.5        0.9%
     North America Consumer                     574.1       537.6        6.8%
 
     International Consumer                     108.4       101.9        6.4%
 
     Global Professional                         57.5        54.4        5.7%
 
     Consolidated                              $740.0      $693.9        6.6%
 
                                               Six Months Ended       % Change
                                               March 31    April 1
                                                 2001        2000       Actual
 
     Lawns                                     $319.2      $306.1        4.3%
     Gardens                                     70.7        81.0      -12.7%
     Growing Media                              118.0       115.3        2.3%
     Ortho                                       98.6       100.5       -1.9%
     Lawn Service                                 9.2         5.4       70.4%
     Canada                                      14.2        15.2       -6.6%
     Other                                       18.1        17.0        6.5%
     North America Consumer                     648.0       640.5        1.2%
 
     International Consumer                     148.4       149.7       -0.9%
 
     Global Professional                         92.7        89.8        3.2%
 
     Consolidated                              $889.1      $880.0        1.0%
 
 
                                THE SCOTTS COMPANY
                            Consolidated Balance Sheets
            As of March 31, 2001, April 1, 2000 and September 30, 2000
                                    (Unaudited)
                    (in millions, except shares & share prices)
 
                                               March 31    April 1     Sept 30
                                                 2001        2000        2000
 
     ASSETS
       Current assets
        Cash                                     17.8        29.7        33.0
        Accounts receivable, net                693.0       649.3       216.0
        Inventories, net                        402.0       366.3       307.5
        Deferred tax asset                       27.6        26.5        25.1
        Other current assets                     67.1        63.6        62.3
 
         Total current assets                 1,207.5     1,135.4       643.9
 
       Property, plant and equipment, net       297.0       258.1       290.5
       Intangible assets, net                   770.0       796.2       743.1
       Other assets                              72.4        80.2        83.9
 
         Total assets                        $2,346.9    $2,269.9    $1,761.4
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
       Current liabilities
        Short term debt                         132.5       183.2        49.4
        Accounts payable                        303.7       281.7       153.0
        Other current liabilities               266.4       287.6       207.4
 
         Total current liabilities              702.6       752.5       409.8
 
       Long-term debt                         1,075.3     1,014.7       813.4
       Other liabilities                         49.8        61.6        60.3
 
         Total liabilities                    1,827.7     1,828.8     1,283.5
 
       Shareholders' equity                     519.2       441.1       477.9
 
         Total liabilities and equity        $2,346.9    $2,269.9    $1,761.4
 
     Key Statistics:
       Debt to book capitalization              69.9%       73.1%       64.4%
 
       Market capitalization:
        Common shares outstanding and
        dilutive common share equivalents        30.0        29.8        29.6
 
        Share price on balance sheet date       38.05       42.00       33.50
                                             $1,141.5    $1,251.6      $991.6
 
 
                               THE SCOTTS COMPANY
                  Footnotes to Preceding Financial Statements
                      (in millions, except per share data)
 
     General:
           Reclassifications
 
           Certain reclassifications have been made to the Results of
           Operations and Consolidated Balance Sheets for the three, six and
           twelve months ended April 1, 2000 to conform to fiscal 2001
           classifications
 
     Results of Operations
 
     (1)   Basic earnings per common share is calculated by dividing income
           applicable to common shareholders by average common shares
           outstanding during the period.
 
     (2)   In usual cases, diluted earnings per common share is calculated by
           dividing net income, before preferred stock dividends, by the
           average common shares and dilutive potential common shares (Class A
           Convertible Preferred Stock, and common stock warrants and options)
           outstanding during the period.  However, for the six months and
           twelve months ended April 1, 2000, diluted earnings per common share
           is calculated by dividing income applicable to common shareholders,
           by the average common shares and dilutive potential common shares
           outstanding during the period.  This treatment is to give
           consideration to the anti-dilutive impact of the preferred stock
           dividends paid during fiscal 2000.
 
     (3)   "EBITDA" is defined as income from operations, plus depreciation and
           amortization.  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 as an
           indicator of operating performance or to cash flow as a measure of
           liquidity.
 
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 SOURCE  The Scotts Company