The following excerpt is from the company's
ScottsMiracle-Gro Reports Fourth-Quarter 2015 Financial Results;
Full-Year Sales Growth of 6% Leads to Adjusted EPS of $3.53
Global Consumer reports full-year sales and operating income increases of 6%
Full-year sales and operating income increases 10% for Scotts LawnService
Company-wide adjusted gross margin rate improved 140 basis points in Q4
Company expects adjusted earnings per share of $3.75 to $3.95 in fiscal 2016
Analyst and Investor Day meeting scheduled for December 10 in New York
MARYSVILLE, Ohio (Nov. 3, 2015) - The Scotts Miracle-Gro Company (NYSE: SMG ), the world’s leading marketer of branded consumer lawn and garden products, today announced that sales in fiscal 2015 increased 6 percent on a company-wide basis driven by strong unit volume growth in its core U.S. consumer business.
Adjusted income from continuing operations for the year ended September 30, 2015 was $219.3 million, or $3.53 per share, compared with $206.3 million, or $3.29 per share, a year earlier. Results exclude costs related to impairment, restructuring and other charges, and one-time costs related to financing. Including those items, reported income from continuing operations for fiscal 2015 was $159.8 million, or $2.57 per share, compared with $165.7 million, or $2.64 per share, a year ago.
“A highly engaged consumer, strong retailer support, new product launches, and a dedicated team of associates allowed us to report our strongest results in years,” said Jim Hagedorn, chairman and chief executive officer. “In our core business, the gardening, controls and mulch categories all saw strong increases in consumer purchase activity, and Scotts LawnService continued to benefit from higher customer count, solid retention levels and record customer satisfaction scores.
“During the year, we also completed eight acquisitions, successfully renegotiated our Roundup agency agreement with Monsanto, increased our quarterly dividend and continued to streamline our executive ranks to improve efficiency. We’re well positioned as we start a new fiscal year and I’m confident that we continue to take the right steps to drive shareholder value.”
The Company provided initial financial guidance for fiscal 2016, projecting sales growth of 4 to 5 percent and adjusted earnings in the range of $3.75 to $3.95 per share.
Fourth-Quarter 2015 Details
Company-wide net sales increased 6 percent in the fourth quarter to $483.2 million, compared with $454.3 million during the same quarter a year ago. Organic volume contributed 2 points of growth, acquisitions added another 7 points and foreign exchange rates had a negative impact of 3 points.
Global Consumer segment sales increased 4 percent in the fourth quarter to $370.6 million. Sales in the U.S. increased 7 percent during the quarter. Outside the U.S., sales increased 12 percent, excluding the impact of foreign exchange rates; including the impact of foreign exchange rates, sales decreased 4 percent. Scotts LawnService sales increased 13 percent to $107.8 million in the fourth quarter, compared with $95.0 million during the same quarter a year ago.
The company-wide adjusted gross margin rate was 32.3 percent during the fourth quarter, compared with 30.9 percent during the same quarter a year ago. The year-over-year improvement was due primarily to manufacturing and other supply chain efficiencies.
A strong focus on expense control led to a 2 percent increase in SG&A in the fourth quarter to $158.0 million despite the impact of acquisitions.
“Controlling SG&A was a major focus throughout the year and managers throughout the company excelled in not allowing expenses to creep back into the business,” said Randy Coleman, executive vice president and chief financial officer. “Our ability to continue improving our operating leverage will remain an important part of our plan for fiscal 2016 and beyond.”
The Global Consumer segment reported an operating loss of $1.1 million, compared with an operating loss of $7.8 million a year ago. Operating income for the Scotts LawnService segment increased 3 percent during the quarter to $28.1 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter were $19.8 million, compared with $0.3 million a year ago.
Adjusted loss from continuing operations was $7.4 million in the fourth quarter, or $0.12 per share, compared with a loss of $10.8 million, or $0.18 per share a year ago. On a reported basis, reported loss from continuing operations for the fourth quarter was $23.6 million, or $0.38 per share, compared with a loss of $14.9 million, or $0.24 per share, a year ago.
Full-Year 2015 Details
Company-wide net sales increased 6 percent in 2015 to $3.02 billion, compared with $2.84 billion a year ago. Global Consumer sales increased 6 percent to $2.70 billion compared with $2.55 billion a year ago. Scotts LawnService sales increased 10 percent to $288.5 million compared with $263.0 million a year ago.
On an adjusted basis, the company-wide gross margin rate decreased 70 basis points to 35.6 percent for the year. The decline was attributable primarily to unfavorable product mix due to lower-than-expected lawn fertilizer sales, strength in mulch shipments and the first-year impact of acquisitions.
SG&A increased 3 percent to $698.4 million. The year-over-year increase was driven by acquisitions and offset by strong expense control and the benefits of previous restructuring efforts.
The Global Consumer segment reported a 6 percent increase in operating income to $466.2 million for fiscal 2015, compared to $438.8 million a year ago. Sales in the U.S. increased 8 percent during the year. Outside the U.S., sales increased 14 percent, excluding the impact of foreign exchange rates; including the impact of foreign exchange rates, sales decreased 1 percent. Scotts LawnService reported a 10 percent increase in operating income to $33.3 million compared with $30.2 million in fiscal 2014.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $471.8 million, an increase of 14 percent compared with $412.4 million a year ago. Cash flow from operations was $247 million.
“We’re confident that the strong performance we saw throughout our business in fiscal 2015 will carry into the upcoming season,” Hagedorn said. “The discussions we are having with our retail partners about the upcoming season have been encouraging and our entire organization has begun executing plans to make 2016 even stronger.”