ScottsMiracle-Gro Reports First Quarter Results in Line with Internal Expectations; Company Well-Positioned for 2013 Lawn &

    ScottsMiracle-Gro Reports First Quarter Results in Line with Internal
     Expectations; Company Well-Positioned for 2013 Lawn & Garden Season

-- Net sales increased 3 percent for the first quarter to $205.8 million

-- Consumer purchases at largest U.S. retailers increased 1 percent

-- Company reaffirms full-year guidance for sales and adjusted EPS

PR Newswire

MARYSVILLE, Ohio, Feb. 6, 2013

MARYSVILLE, Ohio, Feb. 6, 2013 /PRNewswire-FirstCall/ --The Scotts
Miracle-Gro Company (NYSE: SMG), the world's leading marketer of branded
consumer lawn and garden products, today announced results for its fiscal
first quarter ended December 29, 2012.

Net sales were $205.8 million, an increase of 3 percent, compared to $199.6
million, during the same quarter a year ago. Sales in the Global Consumer
segment were up 3 percent to $153.2 million, compared to $149.1 million a year
ago, attributable to increased volume during the quarter, as price increases
for fiscal 2013 did not take effect until January. Consumer purchases at
point-of-sale (POS) at the Company's largest U.S. retailers increased 1
percent during the quarter. POS was in line with expectations for the first
quarter, though it represents a small portion of the full year.

Scotts LawnService sales were up 19 percent to $44.8 million in the first
quarter, compared to $37.6 million during the same quarter a year ago,
primarily due to a 6 percent increase in customer count and a weather-driven
delay of sales from the fiscal fourth quarter of 2012 to the fiscal first
quarter of 2013.

"Continued consumer engagement, coupled with solid execution, leaves us
well-positioned for the 2013 lawn and garden season," said Jim Hagedorn,
chairman and chief executive officer. "We are on plan with our initiatives
designed to drive meaningful and sustainable growth in earnings and cash flow,
while continuing to maintain a strong consumer focus."

The loss from continuing operations was $68.3 million, or $1.11 per share,
compared with a loss of $73.1 million, or $1.20 per share, during the same
quarter a year ago. The adjusted loss from continuing operations for the
first quarter of 2013 was $68.5 million, or $1.12 per share, which excludes
impairment, restructuring and other charges. Given the seasonal nature of the
lawn and garden category, the Company historically reports a loss in its
fiscal first quarter.

The adjusted company-wide gross margin rate was 15.1 percent, compared with
12.8 percent during the first quarter a year ago. The 230-basis-point
improvement was primarily attributable to increased volume within the
higher-margin Scotts LawnService segment and favorable product mix in the
Global Consumer segment.

Selling, general and administrative expenses (SG&A) were $124.5 million,
compared to $122.5 million a year ago, in line with Company expectations.

The operating loss for the Global Consumer segment was $68.7 million during
the first quarter, compared with a loss of $69.5 million last year. Scotts
LawnService reported operating loss of $0.9 million, compared with a loss of
$4.6 million a year ago. The consolidated company-wide adjusted loss from
continuing operations before income taxes was $105.1 million during the first
quarter of 2013, compared to a loss of $114.3 million during the same quarter
a year ago.

Management Reaffirms Full-Year Outlook

The Company continues to expect company-wide net sales to increase by
approximately 1 to 3 percent in fiscal 2013 on flat unit volume, modest price
increases in its core business and the continued strong performance of Scotts
LawnService.

The Company reaffirmed its expectations for fiscal 2013 adjusted earnings per
share from continuing operations in the range of $2.50 to $2.75. In addition,
the Company continues to expect operating cash flow of at least $250 million
for the year.

"Our immediate focus is to leverage our cost structure with an eye toward
margin improvement, reduced SG&A and improved cash flow," said Hagedorn. "And
we are taking a balanced approach in how we invest for long-term growth. I am
confident in the plan we have put in place and believe our shareholders will
begin to see significant improvement starting in the second half of the year."

Conference Call and Webcast Scheduled for 9 a.m. ET Today, Feb. 6

The Company will discuss its results during a webcast and conference call
today at 9 a.m. Eastern Time. Conference call participants should call
1-866-682-3515 (Conference ID: 88031745). A webcast of the call will be
available live at http://investor.scotts.com. 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
website for at least 12 months.

About ScottsMiracle-Gro

With more than $2.8 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:

  oCompliance 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;
  oIncreases in the prices of raw materials and fuel costs could adversely
    affect the Company's results of operations;
  oThe highly competitive nature of the Company's markets could adversely
    affect its ability to maintain or grow revenues;
  oBecause 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;
  oAdverse weather conditions could adversely impact financial results;
  oThe Company's international operations make the Company susceptible to
    fluctuations in currency exchange rates and to other costs and risks
    associated with international regulation;
  oThe Company may not be able to adequately protect its intellectual
    property and other proprietary rights that are material to the Company's
    business;
  oThe Company depends on key personnel and may not be able to retain those
    employees or recruit additional qualified personnel;
  oIf 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;
  oHagedorn Partnership, L.P. beneficially owns approximately 30% of the
    Company's common shares and can significantly influence decisions that
    require the approval of shareholders;
  oThe 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.



THE SCOTTS MIRACLE GRO-COMPANY

Condensed Consolidated Statement of Operations

(In millions, except for per common share data)

(Unaudited)
                                          Three Months Ended
                               Footnotes  December29,  December31,  % Change
                                          2012          2011
Net sales                                 $  205.8      $  199.6      3    %
Cost of sales                             174.7         174.0
Gross profit                              31.1          25.6          21   %
% of sales                                15.1       %  12.8       %
Operating expenses:
Selling, general and                      124.5         122.5         2    %
administrative
Impairment, restructuring and             (0.4)         2.4
other
Product registration and                  —             0.3
recall matters
Other income, net                         (1.1)         (0.6)
Loss from operations                      (91.9)        (99.0)        7    %
% of sales                                (44.7)     %  (49.6)     %
Interest expense                          13.2          15.3
Loss from continuing                      (105.1)       (114.3)       8    %
operations before income taxes
Income tax benefit from                   (36.8)        (41.2)
continuing operations
Loss from continuing                      (68.3)        (73.1)        7    %
operations
Income (loss) from
discontinued operations, net   (3)        0.6           (0.8)
of tax
Net loss                                  $  (67.7)     $  (73.9)
Basic income (loss) per common (1)
share:
Loss from continuing                      $  (1.11)     $  (1.20)     8    %
operations
Income (loss) from                        0.01          (0.01)
discontinued operations
Net loss                                  $  (1.10)     $  (1.21)
Diluted income (loss) per      (2)
common share:
 Loss from continuing                 $  (1.11)     $  (1.20)     8    %
operations
 Income (loss) from                   0.01          (0.01)
discontinued operations
Net loss                                  $  (1.10)     $  (1.21)
Common shares used in basic               61.4          60.9          1    %
loss per share calculation
Common shares and potential
common shares used in diluted             61.4          60.9          1    %
loss per share calculation
Non-GAAP results from
continuing operations:
Adjusted loss from continuing  (4)        $  (68.5)     $  (71.4)     4    %
operations
Adjusted diluted loss per
share from continuing          (2) (4)    $  (1.12)     $  (1.17)     4    %
operations
Adjusted EBITDA                (3) (4)    $  (75.4)     $  (84.4)     11   %
Note: See accompanying footnotes at the end of the release.



THE SCOTTS MIRACLE-GRO COMPANY
Net Sales and Loss from Continuing Operations before Income Taxes by Segment
(In millions)
(Unaudited)
The Company is divided into the following reportable segments: Global Consumer
and Scotts LawnService®. This division of reportable segments is consistent
with how the segments report to and are managed by the chief operating
decision maker of the Company.
Segment performance is evaluated based on several factors, including income
from continuing operations before amortization, product registration and
recall costs, impairment, restructuring and other charges, which is not a
generally accepted accounting principle ("GAAP") measure. Senior management of
the Company uses this measure of operating profit to evaluate segment
performance because we believe this measure is the most indicative of
performance trends and the overall earnings potential of each segment.
Corporate & Other consists of revenues and expenses associated with the
Company's supply agreements with Israel Chemicals Ltd. and the amortization
related to the Roundup® Marketing Agreement, as well as corporate, general and
administrative expenses and certain other income/expense items not allocated
to the business segments. Corporate & Other assets primarily include deferred
financing and debt issuance costs and corporate intangible assets, as well as
deferred tax assets.



                                          Three Months Ended
                                          December29,  December31,  % Change
                                          2012          2011
Net Sales:
Global Consumer                           $  153.2      $  149.1      3    %
Scotts LawnService®                       44.8          37.6          19   %
Segment total                             198.0         186.7         6    %
Corporate & Other                         7.8           12.9
Consolidated                              $  205.8      $  199.6      3    %
Loss from Continuing Operations before
Income Taxes:
Global Consumer                           $  (68.7)     $  (69.5)     1    %
Scotts LawnService®                       (0.9)         (4.6)         80   %
Segment total                             (69.6)        (74.1)
Corporate & Other                         (20.2)        (19.7)
Intangible asset amortization             (2.5)         (2.5)
Product registration and recall matters   —             (0.3)
Impairment, restructuring and other       0.4           (2.4)
Interest expense                          (13.2)        (15.3)
Consolidated                              $  (105.1)    $  (114.3)    8    %





THE SCOTTS MIRACLE-GRO COMPANY

Condensed Consolidated Balance Sheets

(In millions)
                                     December 29,  December 31,  September 30,
                                     2012          2011          2012
ASSETS                               (Unaudited)   (Unaudited)
Current assets:
Cash and cash equivalents            $  115.6      $  127.8      $  131.9
Accounts receivable, net             168.4         166.5         330.9
Inventories                          646.7         654.8         414.9
Prepaids and other current assets    126.2         148.8         122.3
Total current assets                 1,056.9       1,112.2       1,000.0
Property, plant and equipment, net   424.0         391.4         427.4
Goodwill                             314.4         309.1         309.4
Intangible assets, net               303.3         316.2         307.1
Other assets                         29.5          35.4          30.5
Total assets                         $  2,128.1    $  2,164.3    $  2,074.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of debt              $  4.3        $  8.1        $  1.5
Accounts payable                     185.5         220.4         152.3
Other current liabilities            186.6         220.6         279.8
Total current liabilities            376.4         449.1         433.6
Long-term debt                       981.9         1,026.1       781.1
Other liabilities                    256.0         224.9         257.8
Total liabilities                    1,614.3       1,700.1       1,472.5
Shareholders' equity                 513.8         464.2         601.9
Total liabilities and shareholders'  $  2,128.1    $  2,164.3    $  2,074.4
equity





THE SCOTTS MIRACLE-GRO COMPANY

Reconciliation of Non- GAAP Disclosure Items (4)

(In millions, except per common share data)

(Unaudited)
               Three Months Ended December 29,      Three Months Ended December 31, 2011
               2012
                          Impairment,                          Product      Impairment,
               As         Restructuring             As         Registration Restructuring
                          and Other     Adjusted               and          and Other     Adjusted
               Reported   Charges                   Reported   Recall       Charges
                                                               Matters
Net sales      $ 205.8    $   —         $ 205.8     $ 199.6    $  —         $   —         $ 199.6
Cost of sales  174.7      —             174.7       174.0      —            —             174.0
Gross profit   31.1       —             31.1        25.6       —            —             25.6
% of sales     15.1     %               15.1     %  12.8     %                            12.8     %
Operating
expenses:
Selling,
general and    124.5      —             124.5       122.5      —            —             122.5
administrative
Impairment,
restructuring  (0.4)      (0.4)         —           2.4        —            2.4           —
and other
Product
registration   —          —             —           0.3        0.3          —             —
and recall
matters
Other income,  (1.1)      —             (1.1)       (0.6)      —            —             (0.6)
net
Loss from      (91.9)     0.4           (92.3)      (99.0)     (0.3)        (2.4)         (96.3)
operations
% of sales     (44.7)   %               (44.8)   %  (49.6)   %                            (48.2)   %
Interest       13.2       —             13.2        15.3       —            —             15.3
expense
Loss from
continuing
operations     (105.1)    0.4           (105.5)     (114.3)    (0.3)        (2.4)         (111.6)
before income
taxes
Income tax
benefit from   (36.8)     0.2           (37.0)      (41.2)     (0.1)        (0.9)         (40.2)
continuing
operations
Loss from
continuing     $ (68.3)   $   0.2       $ (68.5)    $ (73.1)   $  (0.2)     $   (1.5)     $ (71.4)
operations
Basic loss per
share from     $ (1.11)   $   0.01      $ (1.12)    $ (1.20)   $  (0.01)    $   (0.02)    $ (1.17)
continuing
operations
Diluted loss
per share from $ (1.11)   $   0.01      $ (1.12)    $ (1.20)   $  (0.01)    $   (0.02)    $ (1.17)
continuing
operations
Common shares
used in basic  61.4       61.4          61.4        60.9       60.9         60.9          60.9
loss per share
calculation
Common shares
and potential
common shares
used in        61.4       61.4          61.4        60.9       60.9         60.9          60.9
diluted loss
per share
calculation
Calculation of
Adjusted
EBITDA:
Loss from
continuing     $ (68.3)                             $ (73.1)
operations
Income tax
benefit from   (36.8)                               (41.2)
continuing
operations
Income (loss)
from
discontinued   0.6                                  (0.8)
operations,
net of tax
Income tax
expense
(benefit) from 0.3                                  (0.4)
discontinued
operations
Interest       13.2                                 15.3
expense
Depreciation   13.6                                 12.9
Amortization
(including     2.7                                  2.7
Roundup)
Impairment,
restructuring  (0.4)                                —
and other
charges
Mark-to-market
adjustments on (0.3)                                0.2
derivatives
Adjusted       $ (75.4)                             $ (84.4)
EBITDA
Note: See accompanying footnotes at the end of the release.



THE SCOTTS MIRACLE-GRO COMPANY

Footnotes to Preceding Financial Statements
    Basic income (loss) per common share amounts are calculated by dividing
(1) income (loss) from continuing operations, loss from discontinued
    operations and net loss by the weighted average number of common shares
    outstanding during the period.
    Diluted income (loss) per common share amounts are calculated by dividing
    loss from continuing operations, income (loss) from discontinued
    operations and net loss by the weighted average number of common shares,
    plus all potential dilutive securities (common stock options, stock
(2) appreciation rights, performance shares, performance units, restricted
    stock and restricted stock units) outstanding during the period. Since
    there is a loss for the three months ended December 29, 2012 and December
    31, 2011, potentially dilutive securities were not included in the
    calculations for those periods because to do so would have been
    anti-dilutive.
    In the fourth quarter of fiscal 2012, the Company completed the wind down
    of the Company's professional seed business. As a result, effective in
(3) its fourth quarter of fiscal 2012, the Company classified its results of
    operations for all periods presented to reflect the professional seed
    business as a discontinued operation.
    The Reconciliation of Non-GAAP Disclosure Items includes the following
    non-GAAP financial measures:

    Adjusted loss from continuing operations and adjusted diluted loss per
(4) share from continuing operations - These measures exclude charges or
    credits relating to impairments, restructurings, product registration and
    recall matters, discontinued operations and other unusual items such as
    costs or gains related to discrete projects or transactions that are apart
    from, and not indicative of, the results of the operations of the
    business.
    Adjusted EBITDA - This measure is calculated as net loss before interest,
    taxes, depreciation and amortization as well as certain other items such
    as the impact of the cumulative effect of changes in accounting, costs
    associated with debt refinancing and other non-recurring, non-cash items
    affecting net income. We believe this measure provides additional
    information for determining our ability to meet debt service requirements.
    The presentation of adjusted EBITDA herein is intended to be consistent
    with the calculation of that measure as required by our borrowing
    arrangements, and used to calculate a leverage ratio (maximum of 3.50 at
    December 29, 2012) and an interest coverage ratio (minimum of 3.50 for the
    twelve months ended December 29, 2012). The Company was in compliance with
    the terms of all debt covenants at December 29, 2012.
    The Company reports its financial results in accordance with U.S.
    generally accepted accounting principles (GAAP). However, management
    believes that certain non-GAAP financial measures used in managing the
    business may provide users of this financial information additional
    meaningful comparison between current results and results in prior
    operating periods. The Company believes that these non-GAAP financial
    measures are the most indicative of the Company's ongoing earnings
    capabilities and that disclosure of these non-GAAP financial measures
    therefore provides useful information to investors and other users of its
    financial statements, such as lenders. Non-GAAP financial measures should
    be viewed in addition to, and not as an alternative for, the Company's
    reported results prepared in accordance with GAAP.





SOURCE The Scotts Miracle-Gro Company

Website: http://www.scotts.com
Contact: Jim King, Senior Vice President, Investor Relations & Corporate
Affairs, +1-937-578-5622