Scotts Miracle-Gro Archives - Green Market Report

Video StaffVideo StaffJuly 31, 2020

3min2960

 Scotts Miracle-Gro Company reported fiscal third-quarter sales increased 28% to $1.49 billion, beating analyst estimates for $1.3 billion. Hydroponic subsidiary Hawthorne sales increased 72% to $302 million versus $176 million for the same time period a year ago. Scotts to increase its guidance for full-year sales, adjusted earnings, and free cash flow

Aphria Inc. reported net revenue of $152.2 million in the fourth quarter, an increase of 18% from the prior-year quarter. This number also beat the analyst estimate of $149 million. However, the stock was getting beaten up after the company also reported a $98.8 million net loss for the fourth quarter, which was much worse than last year’s net income of $15.7 million. The losses were attributed to the COVID-19 pandemic.”

PotNetwork Holdings, Inc. (OTC PINK:POTN)  filed its 2019 Annual Report and reported that its revenues fell 41% to $15 million versus $25.5 million in 2018. The company attributed the drop in revenue to “distribution contraction as a result of the FDA Warning Letter, along with the paring and streamlining of the product lines in mid-2019.”

MYM Nutraceuticals Inc. is buying Biome Grow Inc. for roughly C$12 million. Biome is a Canadian-based company with national and international business interests in the cannabis industry. Its wholly-owned subsidiary Highland Grow Inc. is licensed to cultivate, process, and sell cannabis.

As announced in early June, Clever Leaves International is continuing to make its way onto the NASDAQ through the Schultze Special Purpose Acquisition Corp. (NASDAQ: SAMA). The deal is expected to close in the fourth quarter and will be known as Clever Leaves Holding Corp. 


Debra BorchardtDebra BorchardtJuly 29, 2020
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5min2020

The Scotts Miracle-Gro Company (NYSE: SMG) reported fiscal third-quarter sales increased 28% to $1.49 billion, beating analyst estimate for $1.3 billion (Yahoo Finance). The stock was popping over 12% on the revenue and earnings beat.

Hawthorne sales increased 72% to $302 million versus $176 million for the same time period a year ago. The U.S. consumer increased by 21% to $1.08 billion from $889.1 million.

Increased Guidance

The continued strength of the business in fiscal 2020 caused Scotts to increase its guidance for full-year sales, adjusted earnings, and free cash flow. The new sales forecast for fiscal 2020 is for 26-28% growth and is estimating the U.S. consumer segment grows 20-22%. Hawthorne sales are forecast to grow 55-60%. Scotts had said back in June, that it expected U.S. Consumer sales to increase 9-11% in fiscal 2020 and Hawthorne to increase 45 to 50%.

The revised guidance for non-GAAP adjusted earnings per share of $6.65 to $6.85 compares with the June forecast of $5.65 to $5.85 per share. The company said it expected non-GAAP free cash flow of approximately $400 million, up from approximately $350 million earlier.

Third Quarter Results

The company also delivered net income of $203 million. The third-quarter GAAP EPS increased 13% to $3.57; Non-GAAP adjusted EPS up 22% to $3.80. The average analyst estimate was for $3.37 according to Yahoo Finance.

“In our U.S. Consumer segment, we saw significant acceleration of consumer engagement beginning in May that continues as we speak,” said Jim Hagedorn, Chairman, and Chief Executive Officer. “Consumer purchases entering August are up 23 percent at our largest four retail partners and we’ve seen increases in every product category. We especially have benefitted from a more than 40 percent increase in branded soils and even higher gains in consumer purchases for most of our Ortho insect control business.”

“We also continued to see strong third-quarter growth at Hawthorne in every product category and geography. The team at Hawthorne has done an outstanding job this year achieving significantly higher-than-expected growth while also exceeding our operating margin targets.”

“Our results this year continue to exceed our most optimistic expectations and are a testament to the critical nature of the categories in which we compete, the commitment of our retail partners, and the loyalty of the consumers and cultivators who rely on our products for their success,” said Hagedorn. “As we enter the final weeks of fiscal 2020 and prepare for the start of our next fiscal year, we remain optimistic about the strength of our business as well as our ability to continue to enhance shareholder value.

Giving Back

ScottsMiracle-Gro said its Board of Directors approved payment of a special dividend of $5 per share and increased its regular quarterly dividend by 7 percent to $0.62 per share. Both dividends are payable September 10 to shareholders of record on August 27.

The company also decided to make special one-time payments later this year to nearly 3,000 hourly and salaried associates who did not participate in the bonus plans. “We also will enhance bonus payments to another nearly 1,500 eligible associates who do participate in incentive plans. In addition, we plan to double our charitable contributions to benefit the communities we serve.”


William SumnerWilliam SumnerJuly 31, 2018
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6min8480

It’s time for your Daily Hit of cannabis financial news for July 31, 2018.

On the Site

Scotts Miracle-Gro

Regulatory changes in California and an over-production of cannabis in the state put pressure on revenue in the Hawthorne segment of business for Scotts Miracle-Gro (SMG). The lawn and garden company that is known for its pesticides and fertilizers released its fiscal third-quarter results after the market close on Tuesday.

Company-wide sales increased 2% to $994.6 million versus $973.4 million last year for the same time period. At first glance, the Hawthorne business looked okay as sales jumped 2% to $74.2 million from last year’s $72.4 million, but excluding company acquisitions sales actually dropped 37%. Those acquisitions include the recently acquired Sunlight Supply.

Isodiol International Inc.

Isodiol International Inc. (ISOLF) reported its annual earnings with a gross profit of C$8.8 million for the year ending March 31, 2018, which was well above last year’s gross profit of C$126,715. However, the net losses were tremendous at C$36 million versus last year’s net loss of C$4 million as the company embarked on numerous acquisitions. Revenues for the year logged in at C$19 million, well above last year’s C$355,959. The cost of goods sold was C$10 million for the year versus last year’s C$229,243.

 

In Other News

MedMen Enterprises Inc.

MedMen Enterprises Inc. (MMEN) announced today that RocNation Co-founder and CEO Jay Brown had joined its Board of Directors. With years of experience, Brown is one of the most powerful executives in the music industry and has had a hand in the success of several Grammy-nominated and award-winning artists throughout his lifetime. “Marijuana today is less about smoking a joint, and much more about lifestyle and culture. It is about healthier, safer choices for mind and body, and community,” said MedMen Co-founder and CEO Adam Bierman in a statement. “For more than two decades, Jay Brown has had his finger on the pulse of pop culture. We are honored to have him on our Board and look forward to working with him as MedMen continues on its mission to mainstream marijuana.”

Aphria Inc.

Aphria Inc. (APHQF) announced that on July 27, 2018, the company secured $25 million in debt financing from WFCU Credit Union (WFCU). The five-year loan has an interest of 4.68% and is the second loan that the company has received from WFCU. The previous loan was also a $25 million five-year loan and was secured on May 9, 2017. “We are delighted to once again have the support of WFCU Credit Union as Aphria continues to execute on its long-term strategic plan,” said Aphria CEO Vic Neufeld. “Our diversified approach to innovation, strategic partnerships and global expansion are driving long-term shareholder value, and as our company and industry evolve we are always looking for opportunities to normalize our debt to equity structure.”

Starbuds

10330698 Canada Ltd., holder of Starbuds Canada (Starbuds), announced today that it has secured several dispensary locations in Ontario and has entered into multiple operational agreements to obtain more. Starbuds Canada is the result of a joint venture between Compass Cannabis Clinic and Starbuds U.S. The initial dispensary locations will be in Whitby and Windsor, Ontario. To increase the speed of their expansion, 10330698 Canada Ltd. is launching a private placement for investors. “We’re thrilled to have an opportunity for our joint venture to expand into Ontario. Consumers should have options in who they purchase cannabis from, and this expansion only strengthens our position as a leading provider across not only Canada but North America as well,” said Brian Ruden, Founder and CEO of Starbuds U.S. “Our goal is to provide fantastic customer service combined with educational support for patrons in Ontario, along with further investment opportunities for our stakeholders.”


Debra BorchardtDebra BorchardtJuly 31, 2018
scotts.jpg

3min14360

Regulatory changes in California and an over-production of cannabis in the state put pressure on revenue in the Hawthorne segment of business for Scotts Miracle-Gro (SMG). The lawn and garden company that is known for its pesticides and fertilizers released its fiscal third-quarter results after the market close on Tuesday.

Company-wide sales increased 2% to $994.6 million versus $973.4 million last year for the same time period. Non-GAAP adjusted earnings were $2.67 a share versus last year’s $2.47 and GAAP income was $2.23 for this year, which was lower than last year’s $2.41. Net income for the quarter was $82.8 million, which fell from last year’s $151.9 million.

“Our U.S. core business was simply outstanding in May with record results and positive year-over-year consumer purchases nearly every day during the month,” said Jim Hagedorn, chairman, and chief executive officer. “The fact that consumer purchases were down 12 percent entering May and were essentially flat versus year-ago levels by the end of June speaks to the resilience of our category and strength of our brands. It also speaks to the commitment of our team as well as our consumers and retail partners.”

At first glance, the Hawthorne business looked okay as sales jumped 2% to $74.2 million from last year’s $72.4 million, but excluding company acquisitions sales actually dropped 37%. Those acquisitions include the recently acquired Sunlight Supply.

“The integration of Sunlight into the Hawthorne operations is moving swiftly and we are already more than halfway to our goal of achieving at least $35 million in synergies by combining our two businesses,” Hagedorn said. “While we still have a lot of work to do to finish the integration, I’m confident that our Hawthorne business will be vastly improved as a result of this transaction and will be uniquely positioned to benefit from the rapidly evolving marketplace for hydroponic products.”

Scotts re-affirmed the revised guidance that it provided in mid-June forecasting that full-year sales would be flat to 2% higher than year-ago levels. Non-GAAP Adjusted earnings per share are expected to be in a range of $3.70 to $3.90 per share.



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