First Quarter ended December 27, 2025 Quarterly Earnings Report Supplemental Financial Presentation January 28, 2026 Please view this presentation in conjunction with our Q1 2026 earnings release, which is furnished on Form 8-K, our related pre-recorded remarks and additional information regarding our non-GAAP financial measures, including GAAP to non-GAAP reconciliations, available on our website at https://investor.scotts.com. 1 Safe Harbor Disclosure Statements contained in this presentation, which addre ...

The Scotts Miracle-Gro Company (SMG) announced that it is in advanced discussions for the sale of its Hawthorne subsidiary to Vireo Growth, Inc., with an anticipated closing in the second quarter. Under the proposed terms, Vireo Growth will acquire Hawthorne in exchange for an investment in Vireo and will integrate the cultivation supply into its broader consumer cannabis operations. In conjunction with the pending divestiture, effective in its first quarter of fiscal 2026, the company classified its resul ...

Financial Performance - U.S. Consumer net sales for the first quarter were $328.5 million, reflecting a 4% decrease compared to the prior year[22] - GAAP gross margin rate improved by 90 basis points to 25.0%, while non-GAAP adjusted gross margin rate also improved by 90 basis points to 25.4%[8] - GAAP net loss from continuing operations was $0.83 per share, an improvement of $0.32 per share compared to the prior year[8] - Non-GAAP adjusted EBITDA for the quarter was $3.0 million, an increase of $2.1 million over the prior year[8] - The U.S. Consumer segment reported a segment profit of $9.0 million, down 8% from the previous year[22] - The net loss from continuing operations for the three months ended December 27, 2025, was $47.8 million, compared to a net loss of $66.1 million in the same period of 2024[26] - Adjusted EBITDA for the three months ended December 27, 2025, was $3.0 million, up from $0.9 million in the same period of 2024[26] - The company reported a diluted net loss per common share from continuing operations of $0.83 for the three months ended December 27, 2025, compared to $1.15 in the same period of 2024[26] Guidance and Future Expectations - The company reaffirmed its fiscal 2026 guidance, including non-GAAP adjusted net income per share from continuing operations projected between $4.15 and $4.35[15] - The company anticipates free cash flow of $275 million, which will drive the leverage ratio down to the high 3's[15] Asset and Liability Management - Total assets decreased to $3,034.0 million in December 2025 from $3,170.2 million in December 2024, a decline of approximately 4.3%[24] - Total current assets increased to $1,257.2 million in December 2025, compared to $940.3 million in September 2025, reflecting a growth of approximately 33.7%[24] - Long-term debt decreased to $2,250.2 million in December 2025 from $2,636.9 million in December 2024, a reduction of approximately 14.7%[24] - The current portion of debt increased significantly to $278.3 million in December 2025 from $54.6 million in December 2024[24] - The total liabilities decreased to $3,534.6 million in December 2025 from $3,649.7 million in December 2024, a decline of approximately 3.1%[24] Discontinued Operations - The planned divestiture of the Hawthorne subsidiary is expected to close in the fiscal second quarter, with the business classified as a discontinued operation[2] - The Company has classified the Hawthorne business as held for sale, impacting its financial statements for all periods presented[43] - Effective in the first quarter of fiscal 2026, the results of operations for the Hawthorne business will be reflected as a discontinued operation[43] - The Company incurred a loss from discontinued operations of $77.2 million for the three months ended December 27, 2025, compared to $3.4 million in the same period of 2024[42] - The decision to classify the Hawthorne business as held for sale was made during the three months ended December 27, 2025[43] Accounting and Reporting Practices - The Company does not provide a GAAP outlook due to the unpredictability of certain excluded items, which could significantly impact GAAP results[43] - Forward-looking non-GAAP measures are presented, but no reconciliation to GAAP measures is provided due to unreasonable efforts[43] - The reclassification of the Hawthorne business affects the Condensed Consolidated Balance Sheets for all periods presented[43] - Management does not forecast many of the excluded items for internal use, complicating the creation of a GAAP outlook[43] - The Company emphasizes that changes in excluded items are dependent on future events that are less predictable[43] - The classification of the Hawthorne business aligns with the criteria for being held for sale as per accounting standards[43] - The Company aims to ensure the accuracy of its financial reporting while navigating the complexities of non-GAAP measures[43] Shareholder Returns - A share repurchase program of up to $500 million has been approved, expected to commence in late 2026[3] Leverage and Financial Ratios - Net leverage improved to 4.03x, a reduction of 0.49x compared to the previous year[8]

Announces divestiture plan for Hawthorne Unveils new multi-year share repurchase program to commence in late 2026 MARYSVILLE, Ohio, Jan. 28, 2026 (GLOBE NEWSWIRE) -- The Scotts Miracle-Gro Company (NYSE: SMG), the leading marketer of branded consumer lawn and garden products in North America, today reported results for the first quarter ended December 27, 2025. The Company also announced that it is in advanced discussions for the sale of its Hawthorne subsidiary to Vireo Growth, Inc., with an anticipated c ...

The sale of Hawthorne Gardening to Vireo Growth reduces Scotts's exposure to the volatile marijuana sector, executives said. ...

Core Viewpoint - Scotts Miracle-Gro Company (SMG) is facing a projected negative earnings per share of -$1.02 for its upcoming quarterly earnings, yet maintains a relatively high price-to-earnings (P/E) ratio of 24.96, indicating investor confidence in its future profitability [1][2][6] Financial Metrics - The projected revenue for SMG is $357.6 million, with a price-to-sales ratio of 1.07, suggesting potential undervaluation [1][2] - SMG's enterprise value to sales ratio stands at 1.67, and its enterprise value to operating cash flow ratio is 15.39, reflecting solid valuation and cash flow efficiency [3][6] - The earnings yield is reported at 4.01%, providing insight into the return on investment for shareholders despite negative earnings forecasts [3] Debt and Liquidity - The company's debt-to-equity ratio is notably negative at -5.89, indicating a higher level of debt compared to equity, which may raise concerns about financial risk [4] - However, SMG's current ratio of 1.27 suggests a reasonable level of liquidity to cover short-term liabilities, indicating some financial stability [4] Dividend Announcement - SMG has declared a quarterly cash dividend of $0.66 per share, payable on March 6, 2026, to shareholders recorded as of February 20, 2026, demonstrating the company's commitment to returning value to shareholders [5][6]

Financial Data and Key Metrics Changes - The company has paid down over $1.5 billion in debt, significantly improving its leverage and aiming to return to historic norms of leverage in the threes later this fiscal year [2] - There has been consistent improvement in performance, including significant free cash flow generation, meaningful margin improvement, and solid EBITDA growth [2] Business Line Data and Key Metrics Changes - The company is investing heavily in brand and business innovation, focusing on e-commerce and digital marketing to reach new customers [3] - Operational efficiencies have been achieved through automation, AI, and other technologies, aimed at being the lowest-cost, high-performing manufacturer [3] Market Data and Key Metrics Changes - The company is seeing growth opportunities in the e-commerce and digital space, indicating a shift in market strategy to capture emerging customer segments [3] Company Strategy and Development Direction - The company is committed to a disciplined approach to growth with exciting value creation strategies, aiming to enhance shareholder returns [3] - The incentive structure is aligned with the successful execution of the Fiscal 2026 operating plan, reflecting a positive outlook for Fiscal 2026 and beyond [4] Management's Comments on Operating Environment and Future Outlook - Management expresses optimism about the future, indicating that discussions around leverage will become less relevant as the company stabilizes [2] - The company aims to create more value for shareholders and return to being a stable consumer product stock in investor portfolios [3] Other Important Information - The board of directors is composed of members with diverse experiences in finance, government, strategic planning, technology, and consumer marketing, which enhances governance [5] Q&A Session Summary Question: No questions were asked during the session - There were no questions submitted by shareholders during the meeting [34]

Financial Data and Key Metrics Changes - The company has paid down over $1.5 billion in debt, significantly improving its leverage and aiming to return to historic norms of leverage in the threes later this fiscal year [2] - There has been consistent improvement in performance, including significant free cash flow generation, meaningful margin improvement, and solid EBITDA growth [2] Business Line Data and Key Metrics Changes - The company is investing heavily in brand and business innovation, focusing on e-commerce and digital marketing to reach new customers [3] - Operational efficiencies have been achieved through automation, AI, and other technologies, leading to cost reductions and optimization of the supply chain [3] Market Data and Key Metrics Changes - The company is committed to being the lowest-cost, high-performing manufacturer, which is expected to create more value for shareholders [3] Company Strategy and Development Direction - The company is taking a disciplined approach to growth with exciting value creation strategies, aiming to be a stable consumer product stock in investor portfolios [3] - The incentive structure is aligned with the successful execution of the fiscal 2026 operating plan and strategies [4] Management's Comments on Operating Environment and Future Outlook - Management has an optimistic view of fiscal 2026 and beyond, indicating that future discussions will be positive [4] - The company is focused on creating a healthy balance sheet and improving capital structure, which has led to improved performance [2] Other Important Information - The board of directors is composed of members with diverse experiences in finance, government, strategic planning, technology, and consumer marketing [5] - The meeting included proposals for electing directors, approving executive compensation, and ratifying the independent auditor for the fiscal year [14][24][28] Q&A Session Summary Question: No questions were asked during the meeting - There were no questions from shareholders during the Q&A session [34]

Financial Data and Key Metrics Changes - The company has improved its capital structure, resulting in significant free cash flow generation, margin improvement, and solid EBITDA growth [2][3] - Over $1.5 billion in debt has been paid down, with a path to return to historic leverage norms in the threes later this fiscal year [2] Business Line Data and Key Metrics Changes - The company is investing heavily in brand and business innovation, focusing on e-commerce and digital marketing to reach new customers [3] - Operational efficiencies have been achieved through automation and AI, optimizing the supply chain [3] Market Data and Key Metrics Changes - The company is seeing growth opportunities in the digital space, indicating a shift in market strategy [3] Company Strategy and Development Direction - The company aims to be the lowest-cost, high-performing manufacturer, with a disciplined approach to growth and value creation strategies [3] - Management envisions a stable consumer product stock in investor portfolios, with potential for outsized shareholder returns [3] Management's Comments on Operating Environment and Future Outlook - Management has an optimistic view of Fiscal 2026 and beyond, encouraging shareholders to listen to the upcoming earnings call for more details [4] - The focus remains on creating value for shareholders while navigating the current operating environment [3] Other Important Information - The board of directors consists of members with diverse backgrounds in finance, government, and consumer marketing, enhancing oversight of management [5] Q&A Session Summary Question: No questions were asked during the meeting - There were no questions from shareholders, and the meeting was adjourned without further business [33]

Group 1 - The article emphasizes the focus on cash flow and the potential for value and growth in the oil and natural gas sector [1] - Crude Value Insights provides a service that includes a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [1] - Subscribers benefit from live chat discussions about the sector, enhancing community engagement and information sharing [1] Group 2 - A two-week free trial is offered to new subscribers, encouraging them to explore the services related to oil and gas investments [2]