ScottsMiracle-Gro Provides First Quarter Outlook

MARYSVILLE, Ohio, Dec. 7, 2011 /PRNewswire-FirstCall/ -- The Scotts Miracle-Gro Company (NYSE: SMG), the world's leading marketer of branded consumer lawn and garden products, today reiterated its outlook for fiscal 2012, although it expects results for its first quarter to be materially below the comparable period from fiscal 2011.

Sales for the period ending December 31 are expected to decline approximately $30 million from the same quarter a year ago. The adjusted net loss in the quarter is expected to range from $70 million to $75 million compared, or about $1.20 to $1.25 per share. That compares with a net loss of $65.6 million, or $0.99 per share, in fiscal 2011.

"The foundation we've built for fiscal 2012 gives us a high degree of confidence in a strong lawn and garden season," said Jim Hagedorn, chairman and chief executive officer. "We're excited about the innovation we're bringing to the market, our increased investment in advertising and the continued evolution of our consumer-centric business model. The results we expect in the first quarter are in line with our internal expectations as we work with our retail partners to help them finish the year with lower inventory levels. That, in turn, should set the stage for a strong spring selling season."

Sales in the first quarter historically represent less than 10 percent of the Company's full-year total. The Company plans to announce its complete first quarter results on February 7, 2012.

Lower sales volume and absorption of fixed overhead, unfavorable product mix and higher commodity costs will result in a quarterly gross margin rate approximately 10 percentage points lower than the same period in 2011. SG&A in the quarter is expected be lower than 2011 but the decline will be partially offset by higher interest expense, which was anticipated due to planned changes in the Company's capital structure during fiscal 2011.

Additionally, the Company stated it has made significant progress in recent weeks in securing needed raw materials for the upcoming season. It expects to have approximately 60 percent of its total commodity purchases secured by the end of the first quarter.

"The current commodity environment and the acceleration of our hedging strategy gives us increased confidence in the visibility we have in our cost structure for 2012," Hagedorn said. "While we continue to expect commodity inflation of about $80 million, the likelihood of unexpected cost pressures has diminished."

ScottsMiracle-Gro continues to expect sales growth of at least 6 percent from its Global Consumer and Scotts LawnService segments in fiscal 2012. The Company intends to provide more detailed financial guidance at its Annual Analyst Day on February 14, 2012.

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. The Company's brands are the most recognized in the industry. In the U.S., the Company's Scotts®, Miracle-Gro® and Ortho® brands are market-leading in their categories, as is the consumer Roundup® 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®, the second largest residential lawn care service business.  In Europe, the Company's brands include Weedol®, Pathclear®, Evergreen®, Levington®, Miracle-Gro®, KB®, Fertiligene® and Substral®. For additional information, visit us at www.scotts.com.

Cautionary Note Regarding Forward-Looking Statements

Statements contained in this press release, other than statements of historical fact, which address activities, events and developments that the Company expects or anticipates will or may occur in the future, 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 statements" within the meaning of the U.S. federal securities laws that are subject to risks and uncertainties. These forward-looking statements generally can be identified as statements that include phrases such as "guidance," "outlook," "projected," "believe," "target," "predict," "estimate," "forecast," "strategy," "may," "goal," "expect," "anticipate," "intend," "plan," "foresee," "likely," "will," "should" or other similar words or phrases. Actual results could differ materially from the forward-looking information in this release due to a variety of factors, including, but not limited to:

• The ongoing governmental investigations regarding the Company's compliance with the Federal Insecticide, Fungicide, and Rodenticide Act of 1947, as amended, could adversely affect the Company's financial condition, results of operations or cash flows;
• Compliance with environmental and other public health regulations could increase the Company's costs of doing business or limit the Company's ability to market all of its products;
• Disruptions in availability or increases in the prices of raw materials could adversely affect the Company's results of operations;
• The highly competitive nature of the Company's markets could adversely affect its ability to maintain or grow revenues;
• Because of the concentration of the Company's sales to a small number of retail customers, the loss of one or more of, or significant reduction in orders from, its top customers could adversely affect the Company's financial results;
• Adverse weather conditions could adversely impact financial results;
• The Company's international operations make the Company susceptible to the costs and risks associated with operating internationally;
• The Company may not be able to adequately protect its intellectual property and other proprietary rights that are material to the Company's business;
• If Monsanto Company were to terminate the Marketing Agreement for consumer Roundup products, the Company would lose a substantial source of future earnings and overhead expense absorption;
• Hagedorn Partnership, L.P. beneficially owns approximately 30% of the Company's common shares and can significantly influence decisions that require the approval of shareholders;
• The Company may pursue acquisitions, dispositions, investments, dividends, share repurchases and/or other corporate transactions that it believes will maximize equity returns of its shareholders but may involve risks. 

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 Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.

SOURCE The Scotts Miracle-Gro Company

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