Group 1 - The Scotts Miracle-Gro Company will participate in the William Blair 44th Annual Growth Conference on June 6, 2024, in Chicago [1] - Matt Garth, Chief Financial and Administrative Officer, will present a business update at approximately 8:00 CT, with a live webcast available for investors [2] - The company reported approximately $3.6 billion in sales, making it the world's largest marketer of branded consumer lawn and garden care products [3] Group 2 - The company's brands, including Scotts®, Miracle-Gro®, and Ortho®, are market leaders in their respective categories [3] - The Hawthorne Gardening Company, a wholly-owned subsidiary, is a leading provider of nutrients, lighting, and materials for indoor and hydroponic growing [3]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%2E%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the specified periods [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements, including operations, comprehensive income, cash flows, and balance sheets, with detailed notes [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net sales were nearly flat at $1.53 billion in Q2 2024, with net income rising to $157.5 million, while six-month sales decreased to $1.94 billion, but net income increased to $77.0 million Condensed Consolidated Statements of Operations (in millions, except per share data) | | Three Months Ended | | Six Months Ended | | | :--- | :--- | :--- | :--- | :--- | | | **March 30, 2024** | **April 1, 2023** | **March 30, 2024** | **April 1, 2023** | | **Net sales** | $1,525.4 | $1,531.5 | $1,935.8 | $2,058.1 | | **Gross margin** | $463.7 | $412.7 | $525.9 | $508.4 | | **Income from operations** | $272.1 | $206.2 | $224.8 | $164.4 | | **Net income** | $157.5 | $109.4 | $77.0 | $44.7 | | **Diluted net income per common share** | $2.74 | $1.94 | $1.34 | $0.80 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Comprehensive income significantly improved to $160.5 million in Q2 2024 and $71.1 million for the six-month period, reversing a prior-year loss Comprehensive Income (Loss) (in millions) | | Three Months Ended | | Six Months Ended | | | :--- | :--- | :--- | :--- | :--- | | | **March 30, 2024** | **April 1, 2023** | **March 30, 2024** | **April 1, 2023** | | **Net income** | $157.5 | $109.4 | $77.0 | $44.7 | | **Total other comprehensive income (loss)** | $3.0 | $(17.8) | $(5.9) | $(42.4) | | **Comprehensive income** | $160.5 | $91.6 | $71.1 | $2.3 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities dramatically improved to $39.0 million for the six months ended March 30, 2024, from $566.9 million in the prior year Six-Month Cash Flow Summary (in millions) | Activity | Six Months Ended March 30, 2024 | Six Months Ended April 1, 2023 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(39.0) | $(566.9) | | **Net cash used in investing activities** | $(71.1) | $(20.6) | | **Net cash provided by financing activities** | $142.8 | $525.3 | | **Net increase (decrease) in cash** | $33.2 | $(61.8) | | **Cash and cash equivalents at end of period** | $65.1 | $25.0 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $3.92 billion as of March 30, 2024, with total liabilities also declining, resulting in an equity deficit of $250.9 million Balance Sheet Summary (in millions) | | March 30, 2024 | April 1, 2023 | September 30, 2023 | | :--- | :--- | :--- | :--- | | **Total current assets** | $1,935.1 | $2,842.4 | $1,397.8 | | **Total assets** | $3,924.2 | $4,988.1 | $3,413.7 | | **Total current liabilities** | $1,060.3 | $1,372.5 | $773.7 | | **Total liabilities** | $4,175.1 | $4,850.6 | $3,681.0 | | **Total equity (deficit)** | $(250.9) | $137.5 | $(267.3) | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant accounting policies, including a new accounts receivable agreement, restructuring charges, investment impairments, and debt covenant compliance - The company's business is highly seasonal, with approximately **75%** of annual net sales in the North America consumer lawn and garden business occurring in the second and third fiscal quarters[24](index=24&type=chunk) - On October 27, 2023, the Company entered into a Master Receivables Purchase Agreement, allowing it to sell up to **$600.0 million** of eligible accounts receivable, with proceeds from sales under this agreement reaching **$758.2 million** in Q2 2024[28](index=28&type=chunk) - In Q2 2024, the company recorded **$77.0 million** in impairment, restructuring, and other charges, primarily related to Hawthorne inventory write-downs and facility closures[37](index=37&type=chunk)[38](index=38&type=chunk) - The company recorded an equity loss of **$29.5 million** for the six months ended March 30, 2024, from its investment in Bonnie Plants, LLC, which included a **$10.4 million** pre-tax impairment charge[36](index=36&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting sales declines driven by Hawthorne, improved gross margins, ongoing restructuring for $300 million savings, and debt covenant compliance [Executive Summary](index=26&type=section&id=Executive%20Summary) The company's ongoing restructuring aims for $300 million in savings, while the Hawthorne segment faces challenges from cannabis oversupply amid macroeconomic uncertainties - The company is implementing company-wide organizational changes and initiatives expected to deliver run-rate annualized savings of at least **$300.0 million**, with nearly all savings expected to be realized by the end of fiscal 2024[107](index=107&type=chunk) - The Hawthorne segment continues to experience adverse financial results due to an oversupply of cannabis, which has significantly decreased wholesale prices and cultivation activities[108](index=108&type=chunk) - Hawthorne announced a strategic partnership with BFG Supply to distribute its proprietary brands and is discontinuing the distribution of other companies' products to focus on its own portfolio[109](index=109&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Net sales decreased in Q2 and the six-month period, primarily due to Hawthorne, while gross margin rates improved, leading to increased net income Net Sales Change Drivers | | Three Months Ended March 30, 2024 | Six Months Ended March 30, 2024 | | :--- | :--- | :--- | | Volume and mix | 1.5% | (3.8)% | | Pricing | (1.9)% | (2.1)% | | **Change in net sales** | **(0.4)%** | **(5.9)%** | Gross Margin Rate Change Drivers | | Three Months Ended March 30, 2024 | Six Months Ended March 30, 2024 | | :--- | :--- | :--- | | Pricing | (1.2)% | (1.5)% | | Volume, mix and other | 0.4% | 1.6% | | Impairment, restructuring and other | 2.9% | 2.8% | | **Change in gross margin rate** | **3.5%** | **2.5%** | - SG&A expenses decreased by **4.1%** in Q2 and **6.8%** in the first six months of fiscal 2024, primarily due to lower share-based compensation and cost-reduction initiatives, despite an increase in advertising spending[118](index=118&type=chunk)[119](index=119&type=chunk) - Interest expense decreased **8.7%** in Q2 and **4.6%** in the first six months, driven by lower average borrowings, which offset a **70 basis point** increase in the weighted average interest rate[127](index=127&type=chunk) [Segment Results](index=34&type=section&id=Segment%20Results) Q2 2024 saw U.S. Consumer sales growth but profit decline, Hawthorne sales plummet but loss narrow, and decreases in Other segment sales and corporate expenses Segment Net Sales (in millions) | Segment | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | U.S. Consumer | $1,379.8 | $1,357.4 | 1.7% | | Hawthorne | $66.4 | $92.7 | (28.4)% | | Other | $79.2 | $81.4 | (2.7)% | Segment Profit (Loss) (in millions) | Segment | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | U.S. Consumer | $385.7 | $397.4 | (2.9)% | | Hawthorne | $(3.4) | $(16.8) | 79.8% | | Other | $6.4 | $14.6 | (56.2)% | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved with reduced operating cash outflow, and the company remains in compliance with all debt covenants as of March 30, 2024 - Net cash used in operating activities improved to **$(39.0) million** for the first six months of fiscal 2024, compared to **$(566.9) million** in the prior year, mainly due to lower accounts receivable and favorable accounts payable timing[143](index=143&type=chunk)[144](index=144&type=chunk) - As of March 30, 2024, the company was in compliance with all debt covenants, with a leverage ratio of **6.95** (covenant maximum of **7.75**) and a fixed charge coverage ratio of **0.95** (covenant minimum of **0.75**)[156](index=156&type=chunk)[157](index=157&type=chunk) - The company has contingency plans, including further restructuring and potential financing transactions, to address potential future noncompliance with debt covenants, though it expects to remain in compliance[158](index=158&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risks have not materially changed from those disclosed in the 2023 Annual Report on Form 10-K - Market risks have not materially changed from those disclosed in the 2023 Annual Report[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 30, 2024, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the quarter, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[184](index=184&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[185](index=185&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides updates on legal proceedings, risk factors, equity security sales, and other material information [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) No material developments occurred in legal proceedings previously disclosed in the 2023 Annual Report - There have been no material developments to the pending legal proceedings as set forth in the 2023 Annual Report[187](index=187&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company's risk factors have not materially changed from those described in the 2023 Annual Report on Form 10-K - The Company's risk factors, as of March 30, 2024, have not materially changed from those described in Part I, Item 1A of the 2023 Annual Report[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) 6,849 common shares were purchased for an executive retirement plan, while the share repurchase program expired, and dividends are limited to $225.0 million annually - A total of **6,849** Common Shares were purchased during the second quarter of fiscal 2024 in open market transactions by the trustee of the rabbi trust for The Scotts Company LLC Executive Retirement Plan[195](index=195&type=chunk)[199](index=199&type=chunk) - The company's share repurchase program expired on March 25, 2023, and as of March 30, 2024, the company does not have an active repurchase program[199](index=199&type=chunk) - The company's credit agreement limits regularly scheduled cash dividends to an aggregate amount not to exceed **$225.0 million** per fiscal year[194](index=194&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) A Rule 10b5-1 trading plan was adopted for the potential sale of up to 250,000 Common Shares by a director, effective June 14, 2024 - On March 15, 2024, the Hagedorn Partnership, L.P., on behalf of director Katherine Littlefield, adopted a Rule 10b5-1 plan for the sale of up to **250,000** Common Shares, effective from June 14, 2024, to December 5, 2025, if certain price targets are met[198](index=198&type=chunk)

The Scotts Miracle-Gro Company (SMG) reported a second-quarter fiscal 2024 (ended Mar 30, 2024) profit of $157.5 million or $2.74 per share, roughly 44% higher than $109.4 million or $1.94 per share in the prior-year quarter.Barring one-time items, the adjusted earnings were $3.69 per share compared with $3.78 a year ago, topping the Zacks Consensus Estimate of $3.35.    The company’s net sales in the fiscal second quarter were $1,525.4 million, which beat the Zacks Consensus Estimate of $1,498.3 million. N ...

Financial Data and Key Metrics Changes - The company reported a non-GAAP adjusted EBITDA of $396 million for Q2, compared to $405 million in the prior year, reflecting a year-to-date decline in adjusted EBITDA from $426 million to $371 million [14][32] - Free cash flow generation improved by over $500 million year-over-year, with total debt down by more than $750 million, resulting in a leverage ratio of 6.95x EBITDA, well within the covenant maximum of 7.75x [23][12] - The adjusted gross margin rate improved by 60 basis points to 35.3% in Q2 compared to the previous year, driven mainly by distribution cost savings [5][32] Business Line Data and Key Metrics Changes - U.S. Consumer net sales increased by 2% year-over-year to $1.38 billion in Q2, with year-to-date sales slightly lower than the prior year at $1.69 billion [31][24] - Hawthorne's Q2 net sales were $66 million, a 28% decrease from the prior year, with year-to-date sales down 35% to $147 million, driven by lower volumes and price reductions [13][59] - Bonnie's sales improved by 12% year-over-year through the first half, contributing positively to the consumer engagement metrics [14] Market Data and Key Metrics Changes - The cannabis market in the U.S. is estimated at $105 billion annually, with the legal sector accounting for less than $30 billion, highlighting significant growth potential [9] - The company noted that consumer sentiment has improved despite inflation, with consumers engaging more in the lawn and garden category [6] Company Strategy and Development Direction - The company is focused on achieving high single-digit growth in the consumer business and finding a long-term solution for Hawthorne, which includes transitioning to proprietary brands and reducing distribution centers [4][26] - The management emphasized the importance of advertising and promotions, planning to invest 25% more in brand-focused advertising for Q3 [25][24] - The company is also exploring strategic options for Hawthorne, including partnerships and potential mergers to enhance profitability [66][39] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of the fiscal year, citing strong consumer engagement and favorable weather conditions as key drivers for growth [63][54] - The company is managing its operations effectively, with a focus on tight expense management and maintaining SG&A at 15.2% of net sales [32][12] - The management team is confident in achieving their guidance for the full year, with expectations for improved performance in the consumer business [12][24] Other Important Information - The company plans to host an Analyst Day on July 16th to discuss long-term strategies and financial flexibility [33] - The company is actively pursuing regulatory changes in the cannabis industry to level the playing field for legal operators [28][9] Q&A Session Summary Question: Consumer engagement and point of sale performance - Management acknowledged that April started slowly but saw significant improvement towards the end of the month, leading to optimism for May and June [35][37] Question: Update on Hawthorne's strategic options - Management confirmed that they are not done exploring strategic options for Hawthorne and are maintaining some distribution capabilities while partnering with BFG Supply [39][66] Question: Weather impact on sales - Management indicated that weather conditions have been favorable and aligned with their predictions, contributing positively to sales performance [77][63] Question: RIV Capital merger discussions - Management expressed excitement about the potential merger with another cannabis company and the strategic implications for their investment in RIV Capital [66][10]

For the quarter ended March 2024, Scotts Miracle-Gro (SMG) reported revenue of $1.53 billion, down 0.4% over the same period last year. EPS came in at $3.69, compared to $3.78 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $1.5 billion, representing a surprise of +1.81%. The company delivered an EPS surprise of +10.15%, with the consensus EPS estimate being $3.35.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall St ...

Scotts Miracle-Gro (SMG) came out with quarterly earnings of $3.69 per share, beating the Zacks Consensus Estimate of $3.35 per share. This compares to earnings of $3.78 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 10.15%. A quarter ago, it was expected that this lawn and garden products company would post a loss of $1.62 per share when it actually produced a loss of $1.45, delivering a surprise of 10.49%.Over the last four ...

Q2 2024 Performance - Total company net sales were $1.53 billion, flat compared to Q2 2023[10] - Adjusted gross margin rate improved by 60 bps to 35.3%[10] - SG&A expenses decreased by 4% to $178.7 million[10] - Adjusted net income was $211.9 million, compared to $213.8 million in Q2 2023[10] - Interest expense decreased by 9% to $44.1 million[10] - Adjusted diluted EPS was $3.69, compared to $3.78 in Q2 2023[10] - Adjusted EBITDA was $396.3 million, compared to $404.8 million in Q2 2023[10] - Leverage was 6.95x adjusted EBITDA, below the 7.75x maximum[10] Fiscal Year 2024 Outlook - The company is targeting leverage of approximately 4.50x by year-end[22] - The company expects at least 250 bps gross margin rate improvement in FY24[22] - The company is on track to achieve $560 million in free cash flow for the full fiscal year[22]

Exhibit 99.1 The Scotts Miracle-Gro Company NEWS ScottsMiracle-Gro Reports Second Quarter Results MARYSVILLE, Ohio, May 1, 2024 – The Scotts Miracle-Gro Company (NYSE: SMG), the world's largest marketer of branded consumer lawn and garden as well as a leader in indoor and hydroponic growing products, today announced its results for the second quarter ended March 30, 2024. Interest expense during the quarter declined 9 percent compared to the same quarter last year driven by the Company's utilization of its ...

MARYSVILLE, Ohio, April 22, 2024 (GLOBE NEWSWIRE) -- The Central Ohio Beekeepers Association (COBA) has partnered with ScottsMiracle-Gro brand Ortho®, to establish an apiary, also known as a bee yard, at the Company's corporate headquarters in Marysville, Ohio. COBA is dedicated to promoting bees and beekeeping in Central Ohio by providing educational opportunities for new beekeepers and continuing education for advanced beekeepers. In 2016, Ortho® announced its decision to remove neonics from its outdoor p ...

MARYSVILLE, Ohio, April 22, 2024 (GLOBE NEWSWIRE) -- The Scotts Miracle-Gro Company (NYSE:SMG), the world's leading marketer of branded consumer lawn and garden as well as indoor and hydroponic growing products, will release its second quarter financial results on Wednesday, May 1, 2024, prior to the opening of the U.S. financial markets. The Company will host a video presentation via webcast at 9:00 a.m. ET to discuss those results. The webcast will be followed by an audio question-and-answer session. To w ...