Scotts Miracle-Gro expects net sales to rise about 2%-3% in fiscal 2014 with flat unit volumes; operating cash flows projected at about US$275M in fiscal 2014
December 13, 2013
– The Scotts Miracle-Gro Company (NYSE: SMG), the world's largest marketer of branded consumer lawn and garden products, today provided more detail for its outlook for fiscal 2014 in advance of its December 13th Analyst & Investor Day.
The Company said it expects company-wide net sales to increase by approximately 2 to 3 percent in fiscal 2014 on flat unit volume, strategic pricing, the recent acquisition of the Tomcat consumer rodent control business and the continued growth of its LawnService business.
An anticipated improvement in gross margin rate of approximately 100 basis points and an increase in selling, general & administrative expenses (SG&A) of approximately 3 to 4 percent is expected to result in adjusted earnings from continuing operations in the range of $3.05 to $3.20 per share, an increase of 10 to 15 percent, for fiscal 2014.
Operating margin rate is expected to be in the range of 12.5 to 13 percent in fiscal 2014. Interest expense is forecasted to be lower by $5 to $7 million compared to fiscal 2013. The effective tax rate for the year is projected to be in a range of 36 to 37 percent.
The Company's operating cash flow is expected to be approximately $275 million in fiscal 2014.
"We remain confident in the strength of our brands and continue to see commitment to the category from consumers and our retail partners," said Jim Hagedorn, chairman and chief executive officer. "The guidance we have outlined assumes a conservative approach to the business, a philosophy we will continue to employ until we see a stronger macroeconomic outlook."
In addition, the Company is in the final phases of renegotiating its existing credit facility and expects to have it completed by the end of the calendar year. The amendment and extension will extend the facility's maturity through December 2018, decrease pricing and relax certain restrictive covenants. In addition, the Company announced it will exercise its call option on the $200 million of 7.25 percent senior notes issued in 2010. The Company expects the combination of these actions will reduce its overall cost of debt by approximately 60 basis points.
Company Hosts Analyst & Investor Day Meeting Today, Dec. 13
The Company is holding its Analyst & Investor Day today at 9:30 a.m. Eastern Time, with a live webcast with presentation slides available on the investor relations section of the Company's website at http://investor.scotts.com. The replay of the webcast and accompanying presentation slides will be available on the Company's website following the meeting.
The meeting will also be accessible with a live conference call. To participate in the conference call, please call 888.299.7209 conference code: 3860281. An archive of the webcast, as well as accompanying financial information regarding any non-GAAP financial measures discussed by the Company during the call, will be available on the site for at least 12 months.
With more than $2.8 billion in worldwide sales, The Scotts Miracle-Gro Company 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®, Fertiligène® 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:
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