QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Yes | No | ☒ |
THE SCOTTS MIRACLE-GRO COMPANY INDEX | ||||||||
PAGE NO. | ||||||||
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Net sales | $ | $ | |||||||||
Cost of sales | |||||||||||
Cost of sales—impairment, restructuring and other | |||||||||||
Gross profit | |||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | |||||||||||
Impairment, restructuring and other | ( | ||||||||||
Other income, net | ( | ( | |||||||||
Income (loss) from operations | ( | ||||||||||
Costs related to refinancing | |||||||||||
Interest expense | |||||||||||
Other non-operating income, net | ( | ( | |||||||||
Income (loss) from continuing operations before income taxes | ( | ||||||||||
Income tax expense (benefit) from continuing operations | ( | ||||||||||
Income (loss) from continuing operations | ( | ||||||||||
Income (loss) from discontinued operations, net of tax | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Net income attributable to noncontrolling interest | ( | ( | |||||||||
Net income (loss) attributable to controlling interest | $ | $ | ( | ||||||||
Basic income (loss) per common share: | |||||||||||
Income (loss) from continuing operations | $ | $ | ( | ||||||||
Income (loss) from discontinued operations | |||||||||||
Basic net income (loss) per common share | $ | $ | ( | ||||||||
Weighted-average common shares outstanding during the period | |||||||||||
Diluted income (loss) per common share: | |||||||||||
Income (loss) from continuing operations | $ | $ | ( | ||||||||
Income (loss) from discontinued operations | |||||||||||
Diluted net income (loss) per common share | $ | $ | ( | ||||||||
Weighted-average common shares outstanding during the period plus dilutive potential common shares |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Other comprehensive income (loss): | |||||||||||
Net foreign currency translation adjustment | |||||||||||
Net unrealized gain (loss) on derivative instruments, net of tax | ( | ||||||||||
Reclassification of net unrealized losses on derivative instruments to net income, net of tax | |||||||||||
Pension and other post-retirement benefit adjustments, net of tax | ( | ( | |||||||||
Total other comprehensive income | |||||||||||
Comprehensive income (loss) | ( | ||||||||||
Comprehensive income attributable to noncontrolling interest | ( | ( | |||||||||
Comprehensive income (loss) attributable to controlling interest | $ | $ | ( |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
OPERATING ACTIVITIES | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||
Costs related to refinancing | |||||||||||
Share-based compensation expense | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Deferred taxes | ( | ( | |||||||||
Other | ( | ||||||||||
Changes in assets and liabilities, net of acquired businesses: | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ( | |||||||||
Prepaid and other assets | ( | ( | |||||||||
Accounts payable | |||||||||||
Other current liabilities | ( | ( | |||||||||
Restructuring and other | ( | ( | |||||||||
Other non-current items | ( | ( | |||||||||
Other, net | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
INVESTING ACTIVITIES | |||||||||||
Investments in property, plant and equipment | ( | ( | |||||||||
Investments in loans receivable | ( | ||||||||||
Investments in unconsolidated affiliates | ( | ||||||||||
Payment for acquisitions, net of cash acquired | ( | ||||||||||
Other investing, net | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
FINANCING ACTIVITIES | |||||||||||
Borrowings under revolving and bank lines of credit and term loans | |||||||||||
Repayments under revolving and bank lines of credit and term loans | ( | ( | |||||||||
Proceeds from issuance of | |||||||||||
Repayment of | ( | ||||||||||
Financing and issuance fees | ( | ||||||||||
Dividends paid | ( | ( | |||||||||
Purchase of Common Shares | ( | ||||||||||
Payments on seller notes | ( | ||||||||||
Cash received from exercise of stock options | |||||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash | |||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | SEPTEMBER 30, 2020 | |||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Accounts receivable, less allowances of $ | |||||||||||||||||
Accounts receivable pledged | |||||||||||||||||
Inventories | |||||||||||||||||
Prepaid and other current assets | |||||||||||||||||
Total current assets | |||||||||||||||||
Investment in unconsolidated affiliates | |||||||||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | |||||||||||||||||
Goodwill | |||||||||||||||||
Intangible assets, net | |||||||||||||||||
Other assets | |||||||||||||||||
Total assets | $ | $ | $ | ||||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Current portion of debt | $ | $ | $ | ||||||||||||||
Accounts payable | |||||||||||||||||
Other current liabilities | |||||||||||||||||
Total current liabilities | |||||||||||||||||
Long-term debt | |||||||||||||||||
Other liabilities | |||||||||||||||||
Total liabilities | |||||||||||||||||
Commitments and contingencies (Note 10) | |||||||||||||||||
Equity: | |||||||||||||||||
Common shares and capital in excess of $ | |||||||||||||||||
Retained earnings | |||||||||||||||||
Treasury shares, at cost; | ( | ( | ( | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ( | ||||||||||||||
Total equity—controlling interest | |||||||||||||||||
Noncontrolling interest | |||||||||||||||||
Total equity | |||||||||||||||||
Total liabilities and equity | $ | $ | $ |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Interest paid | $ | $ | |||||||||
Income tax payments (refunds) | ( | ||||||||||
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Cost of sales—impairment, restructuring and other: | |||||||||||
COVID-19 related costs | $ | $ | |||||||||
Restructuring and other charges | |||||||||||
Operating expenses: | |||||||||||
COVID-19 related costs | |||||||||||
Restructuring and other charges (recoveries), net | ( | ||||||||||
Total impairment, restructuring and other charges (recoveries) | $ | $ | ( |
Amounts accrued for restructuring and other at September 30, 2020 | $ | ||||
Restructuring and other charges from continuing operations | |||||
Payments and other | ( | ||||
Amounts accrued for restructuring and other at January 2, 2021 | $ |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
JANUARY 2, 2021 | DECEMBER 28, 2019 | SEPTEMBER 30, 2020 | |||||||||||||||
Finished goods | $ | $ | $ | ||||||||||||||
Work-in-process | |||||||||||||||||
Raw materials | |||||||||||||||||
Total inventories | $ | $ | $ |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Gross commission | $ | $ | |||||||||
Contribution expenses | ( | ( | |||||||||
Net commission | ( | ||||||||||
Reimbursements associated with Roundup® marketing agreement | |||||||||||
Total net sales associated with Roundup® marketing agreement | $ | $ |
JANUARY 2, 2021 | DECEMBER 28, 2019 | SEPTEMBER 30, 2020 | |||||||||||||||
Credit Facilities: | |||||||||||||||||
Revolving loans | $ | $ | $ | ||||||||||||||
Term loans | |||||||||||||||||
Senior Notes – | |||||||||||||||||
Senior Notes – | |||||||||||||||||
Receivables facility | |||||||||||||||||
Finance lease obligations | |||||||||||||||||
Other | |||||||||||||||||
Total debt | |||||||||||||||||
Less current portions | |||||||||||||||||
Less unamortized debt issuance costs | |||||||||||||||||
Long-term debt | $ | $ | $ |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
Notional Amount | Effective Date (a) | Expiration Date | Fixed Rate | |||||||||||||||||
$ | (b) | 11/7/2018 | 6/7/2021 | % | ||||||||||||||||
11/7/2018 | 7/7/2021 | % | ||||||||||||||||||
11/7/2018 | 10/7/2021 | % | ||||||||||||||||||
12/21/2020 | 6/20/2023 | % | ||||||||||||||||||
(b) | 1/7/2021 | 6/7/2023 | % | |||||||||||||||||
10/7/2021 | 6/7/2023 | % | ||||||||||||||||||
(b) | 1/20/2022 | 6/20/2024 | % | |||||||||||||||||
6/7/2023 | 6/8/2026 | % | ||||||||||||||||||
Common Shares and Capital in Excess of Stated Value | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Loss | Total Equity - Controlling Interest | Noncontrolling Interest | Total Equity | |||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Treasury share purchases | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Treasury share issuances | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance at January 2, 2021 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
Common Shares and Capital in Excess of Stated Value | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Loss | Total Equity - Controlling Interest | Noncontrolling Interest | Total Equity | |||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net income (loss) | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Treasury share issuances | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance at December 28, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | Net Unrealized Gain (Loss) On Derivative Instruments | Net Unrealized Gain (Loss) in Pension and Other Post-Retirement Benefits | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Balance at September 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive net income (loss) | ( | |||||||||||||||||||||||||
Income tax benefit (expense) | ( | ( | ||||||||||||||||||||||||
Net current period other comprehensive income (loss) | ( | |||||||||||||||||||||||||
Balance at January 2, 2021 | $ | $ | ( | $ | ( | $ | ( |
Foreign Currency Translation Adjustments | Net Unrealized Gain (Loss) On Derivative Instruments | Net Unrealized Gain (Loss) in Pension and Other Post-Retirement Benefits | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Balance at September 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | |||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive net income (loss) | ( | ( | ||||||||||||||||||||||||
Income tax benefit (expense) | ||||||||||||||||||||||||||
Net current period other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||
Balance at December 28, 2019 | $ | ( | $ | ( | $ | ( | $ | ( |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Employees | |||||||||||
Restricted stock units | |||||||||||
Non-Employee Directors | |||||||||||
Restricted and deferred stock units | |||||||||||
Total share-based awards | |||||||||||
Aggregate fair value at grant dates | $ | $ |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Share-based compensation | $ | $ | |||||||||
Related tax benefit |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
COMMODITY | JANUARY 2, 2021 | DECEMBER 28, 2019 | SEPTEMBER 30, 2020 | |||||||||||||||||
Urea | ||||||||||||||||||||
Resin | ||||||||||||||||||||
Diesel | ||||||||||||||||||||
Heating Oil |
ASSETS / (LIABILITIES) | ||||||||||||||||||||||||||
DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS | BALANCE SHEET LOCATION | JANUARY 2, 2021 | DECEMBER 28, 2019 | SEPTEMBER 30, 2020 | ||||||||||||||||||||||
Interest rate swap agreements | Other current liabilities | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Other liabilities | ( | ( | ( | |||||||||||||||||||||||
Commodity hedging instruments | Prepaid and other current assets | |||||||||||||||||||||||||
Other current liabilities | ( | ( | ||||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS | BALANCE SHEET LOCATION | |||||||||||||||||||||||||
Currency forward contracts | Prepaid and other current assets | $ | $ | $ | ||||||||||||||||||||||
Other current liabilities | ( | ( | ( | |||||||||||||||||||||||
Commodity hedging instruments | Prepaid and other current assets | |||||||||||||||||||||||||
Other current liabilities | ( | |||||||||||||||||||||||||
Total derivatives not designated as hedging instruments | ( | ( | ( | |||||||||||||||||||||||
Total derivatives | $ | ( | $ | ( | $ | ( |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS | AMOUNT OF GAIN / (LOSS) RECOGNIZED IN AOCL | |||||||||||||
THREE MONTHS ENDED | ||||||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | |||||||||||||
Interest rate swap agreements | $ | $ | ||||||||||||
Commodity hedging instruments | ( | |||||||||||||
Total | $ | $ | ( |
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS | RECLASSIFIED FROM AOCL INTO STATEMENT OF OPERATIONS | AMOUNT OF GAIN / (LOSS) | ||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | |||||||||||||||||||
Interest rate swap agreements | Interest expense | $ | ( | $ | ( | |||||||||||||||
Commodity hedging instruments | Cost of sales | ( | ||||||||||||||||||
Total | $ | ( | $ | ( |
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS | RECOGNIZED IN STATEMENT OF OPERATIONS | AMOUNT OF GAIN / (LOSS) | ||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | |||||||||||||||||||
Currency forward contracts | Other income / expense, net | $ | ( | $ | ( | |||||||||||||||
Commodity hedging instruments | Cost of sales | |||||||||||||||||||
Total | $ | ( | $ | ( |
JANUARY 2, 2021 | DECEMBER 28, 2019 | SEPTEMBER 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE HIERARCHY LEVEL | CARRYING AMOUNT | ESTIMATED FAIR VALUE | CARRYING AMOUNT | ESTIMATED FAIR VALUE | CARRYING AMOUNT | ESTIMATED FAIR VALUE | ||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents | Level 1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||
Investment securities in non-qualified retirement plan assets | Level 1 | |||||||||||||||||||||||||||||||||||||||||||
Bonnie Option | Level 3 | |||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Debt instruments | ||||||||||||||||||||||||||||||||||||||||||||
Credit facilities – revolving loans | Level 2 | |||||||||||||||||||||||||||||||||||||||||||
Credit facilities – term loans | Level 2 | |||||||||||||||||||||||||||||||||||||||||||
Senior Notes – | Level 2 | |||||||||||||||||||||||||||||||||||||||||||
Senior Notes – | Level 2 | |||||||||||||||||||||||||||||||||||||||||||
Receivables facility | Level 2 | |||||||||||||||||||||||||||||||||||||||||||
Other debt | Level 2 | |||||||||||||||||||||||||||||||||||||||||||
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
BALANCE SHEET LOCATION | JANUARY 2, 2021 | DECEMBER 28, 2019 | SEPTEMBER 30, 2020 | ||||||||||||||||||||
Operating leases: | |||||||||||||||||||||||
Right-of-use assets | Other assets | $ | $ | $ | |||||||||||||||||||
Current lease liabilities | Other current liabilities | ||||||||||||||||||||||
Non-current lease liabilities | Other liabilities | ||||||||||||||||||||||
Total operating lease liabilities | $ | $ | $ | ||||||||||||||||||||
Finance leases: | |||||||||||||||||||||||
Right-of-use assets | Property, plant and equipment, net | $ | $ | $ | |||||||||||||||||||
Current lease liabilities | Current portion of debt | ||||||||||||||||||||||
Non-current lease liabilities | Long-term debt | ||||||||||||||||||||||
Total finance lease liabilities | $ | $ | $ |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Operating lease cost (a) | $ | $ | |||||||||
Variable lease cost | |||||||||||
Finance lease cost | |||||||||||
Amortization of right-of-use assets | |||||||||||
Interest on lease liabilities | |||||||||||
Total finance lease cost | $ | $ |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases, net | $ | $ | |||||||||
Operating cash flows from finance leases | |||||||||||
Financing cash flows from finance leases | |||||||||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
Operating leases | $ | $ | |||||||||
Finance leases |
JANUARY 2, 2021 | |||||
Weighted-average remaining lease term (in years): | |||||
Operating leases | |||||
Finance leases | |||||
Weighted-average discount rate: | |||||
Operating leases | % | ||||
Finance leases | % |
Year | OPERATING LEASES | FINANCE LEASES | ||||||||||||
2021 (remainder of the year) | $ | $ | ||||||||||||
2022 | ||||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
Thereafter | ||||||||||||||
Total lease payments | ||||||||||||||
Less: Imputed interest | ( | ( | ||||||||||||
Total lease liabilities | $ | $ |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Net sales: | |||||||||||
U.S. Consumer | $ | $ | |||||||||
Hawthorne | |||||||||||
Other | |||||||||||
Consolidated | $ | $ | |||||||||
Segment Profit (Loss): | |||||||||||
U.S. Consumer | $ | $ | ( | ||||||||
Hawthorne | |||||||||||
Other | ( | ||||||||||
Total Segment Profit (Loss) | ( | ||||||||||
Corporate | ( | ( | |||||||||
Intangible asset amortization | ( | ( | |||||||||
Impairment, restructuring and other | ( | ||||||||||
Costs related to refinancing | ( | ||||||||||
Interest expense | ( | ( | |||||||||
Other non-operating income, net | |||||||||||
Income (loss) from continuing operations before income taxes | $ | $ | ( |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
U.S. Consumer: | |||||||||||
Growing media and mulch | $ | $ | |||||||||
Lawn care | |||||||||||
Controls | |||||||||||
Roundup® marketing agreement | |||||||||||
Other, primarily gardening | |||||||||||
Hawthorne: | |||||||||||
Lighting | |||||||||||
Nutrients | |||||||||||
Growing media | |||||||||||
Other, primarily hardware and growing environments | |||||||||||
Other: | |||||||||||
Growing media | |||||||||||
Lawn care | |||||||||||
Other, primarily gardening and controls | |||||||||||
Total net sales | $ | $ |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued) | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Net sales: | |||||||||||
United States | $ | $ | |||||||||
International | |||||||||||
$ | $ |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
Percent of Net Sales from Continuing Operations by Quarter | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
First Quarter | 8.9 | % | 9.4 | % | 8.3 | % | |||||||||||
Second Quarter | 33.5 | % | 37.7 | % | 38.1 | % | |||||||||||
Third Quarter | 36.1 | % | 37.1 | % | 37.3 | % | |||||||||||
Fourth Quarter | 21.5 | % | 15.8 | % | 16.3 | % |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
JANUARY 2, 2021 | % OF NET SALES | DECEMBER 28, 2019 | % OF NET SALES | ||||||||||||||||||||
Net sales | $ | 748.6 | 100.0 | % | $ | 365.8 | 100.0 | % | |||||||||||||||
Cost of sales | 548.8 | 73.3 | 311.3 | 85.1 | |||||||||||||||||||
Cost of sales—impairment, restructuring and other | 9.0 | 1.2 | 0.3 | 0.1 | |||||||||||||||||||
Gross profit | 190.8 | 25.5 | 54.2 | 14.8 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative | 156.7 | 20.9 | 119.8 | 32.8 | |||||||||||||||||||
Impairment, restructuring and other | 0.7 | 0.1 | (2.5) | (0.7) | |||||||||||||||||||
Other income, net | (0.6) | (0.1) | (0.5) | (0.1) | |||||||||||||||||||
Income (loss) from operations | 34.0 | 4.5 | (62.6) | (17.1) | |||||||||||||||||||
Costs related to refinancing | — | — | 15.1 | 4.1 | |||||||||||||||||||
Interest expense | 16.1 | 2.2 | 20.0 | 5.5 | |||||||||||||||||||
Other non-operating income, net | (15.2) | (2.0) | (2.6) | (0.7) | |||||||||||||||||||
Income (loss) from continuing operations before income taxes | 33.1 | 4.4 | (95.1) | (26.0) | |||||||||||||||||||
Income tax expense (benefit) from continuing operations | 7.9 | 1.1 | (23.8) | (6.5) | |||||||||||||||||||
Income (loss) from continuing operations | 25.2 | 3.4 | (71.3) | (19.5) | |||||||||||||||||||
Income (loss) from discontinued operations, net of tax | — | — | — | — | |||||||||||||||||||
Net income (loss) | $ | 25.2 | 3.4 | % | $ | (71.3) | (19.5) | % |
THREE MONTHS ENDED | |||||
JANUARY 2, 2021 | |||||
Volume | 99.2 | % | |||
Pricing | 4.9 | ||||
Foreign exchange rates | 0.5 | ||||
Change in net sales | 104.6 | % |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Materials | $ | 312.1 | $ | 164.8 | |||||||
Manufacturing labor and overhead | 114.6 | 69.5 | |||||||||
Distribution and warehousing | 108.1 | 63.6 | |||||||||
Costs associated with Roundup® marketing agreement | 14.0 | 13.4 | |||||||||
Cost of sales | 548.8 | 311.3 | |||||||||
Cost of sales—impairment, restructuring and other | 9.0 | 0.3 | |||||||||
$ | 557.8 | $ | 311.6 |
THREE MONTHS ENDED | |||||
JANUARY 2, 2021 | |||||
Volume, product mix and other | $ | 229.4 | |||
Material cost changes | 5.7 | ||||
Foreign exchange rates | 1.8 | ||||
Costs associated with Roundup® marketing agreement | 0.6 | ||||
237.5 | |||||
Impairment, restructuring and other | 8.7 | ||||
Change in cost of sales | $ | 246.2 |
THREE MONTHS ENDED | |||||
JANUARY 2, 2021 | |||||
Volume, product mix and other | 10.4 | % | |||
Pricing | 1.4 | ||||
Roundup® commissions and reimbursements | 0.8 | ||||
Material costs | (0.8) | ||||
11.8 | % | ||||
Impairment, restructuring and other | (1.1) | ||||
Change in gross profit rate | 10.7 | % |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Advertising | $ | 26.7 | $ | 10.8 | |||||||
Research and development | 10.3 | 9.2 | |||||||||
Share-based compensation | 8.2 | 7.0 | |||||||||
Amortization of intangibles | 7.3 | 7.5 | |||||||||
Other selling, general and administrative | 104.2 | 85.3 | |||||||||
$ | 156.7 | $ | 119.8 |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Cost of sales—impairment, restructuring and other: | |||||||||||
COVID-19 related costs | $ | 8.7 | $ | — | |||||||
Restructuring and other charges | 0.3 | 0.3 | |||||||||
Operating expenses: | |||||||||||
COVID-19 related costs | 0.6 | — | |||||||||
Restructuring and other charges (recoveries), net | 0.1 | (2.5) | |||||||||
Total impairment, restructuring and other charges (recoveries) | $ | 9.7 | $ | (2.2) |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
U.S. Consumer | $ | 408.2 | $ | 165.5 | |||||||
Hawthorne | 309.4 | 180.7 | |||||||||
Other | 31.0 | 19.6 | |||||||||
Consolidated | $ | 748.6 | $ | 365.8 |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
U.S. Consumer | $ | 45.3 | $ | (40.1) | |||||||
Hawthorne | 40.4 | 12.5 | |||||||||
Other | — | (3.5) | |||||||||
Total Segment Profit (Loss) (Non-GAAP) | 85.7 | (31.1) | |||||||||
Corporate | (34.6) | (26.1) | |||||||||
Intangible asset amortization | (7.4) | (7.6) | |||||||||
Impairment, restructuring and other | (9.7) | 2.2 | |||||||||
Costs related to refinancing | — | (15.1) | |||||||||
Interest expense | (16.1) | (20.0) | |||||||||
Other non-operating income, net | 15.2 | 2.6 | |||||||||
Income (loss) from continuing operations before income taxes (GAAP) | $ | 33.1 | $ | (95.1) |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
THREE MONTHS ENDED | |||||||||||
JANUARY 2, 2021 | DECEMBER 28, 2019 | ||||||||||
Net cash used in operating activities | $ | (420.7) | $ | (318.2) | |||||||
Net cash used in investing activities | (148.2) | (25.7) | |||||||||
Net cash provided by financing activities | 573.5 | 352.3 |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
Notional Amount | Effective Date (a) | Expiration Date | Fixed Rate | |||||||||||||||||
$ | 200 | (b) | 11/7/2018 | 6/7/2021 | 2.87 | % | ||||||||||||||
100 | 11/7/2018 | 7/7/2021 | 2.96 | % | ||||||||||||||||
200 | 11/7/2018 | 10/7/2021 | 2.98 | % | ||||||||||||||||
100 | 12/21/2020 | 6/20/2023 | 1.36 | % | ||||||||||||||||
300 | (b) | 1/7/2021 | 6/7/2023 | 1.34 | % | |||||||||||||||
200 | 10/7/2021 | 6/7/2023 | 1.37 | % | ||||||||||||||||
200 | (b) | 1/20/2022 | 6/20/2024 | 0.58 | % | |||||||||||||||
200 | 6/7/2023 | 6/8/2026 | 0.85 | % | ||||||||||||||||
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
JANUARY 2, 2021 | SEPTEMBER 30, 2020 | ||||||||||
Current assets | $ | 1,483.1 | $ | 1,062.5 | |||||||
Noncurrent assets (a) | 1,993.7 | 1,853.8 | |||||||||
Current liabilities | 965.6 | 872.1 | |||||||||
Noncurrent liabilities | 2,207.1 | 1,695.7 |
THREE MONTHS ENDED | YEAR ENDED | ||||||||||
JANUARY 2, 2021 | SEPTEMBER 30, 2020 | ||||||||||
Net sales | $ | 642.3 | $ | 3,713.4 | |||||||
Gross profit | 166.0 | 1,255.5 | |||||||||
Income from continuing operations (a) | 21.3 | 360.4 | |||||||||
Net income | 21.3 | 360.5 | |||||||||
Net income attributable to controlling interest | 21.3 | 360.5 |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
(Dollars in millions, except per share data) |
Period | Total Number of Common Shares Purchased(1) | Average Price Paid per Common Share(2) | Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs(3) | Approximate Dollar Value of Common Shares That May Yet be Purchased Under the Plans or Programs(3) | |||||||||||||||||||
October 1, 2020 through October 31, 2020 | 724 | $ | 153.91 | — | $ | 750,000,000 | |||||||||||||||||
November 1, 2020 through November 28, 2020 | 98,579 | $ | 168.93 | 97,679 | $ | 733,497,967 | |||||||||||||||||
November 29, 2020 through January 2, 2021 | 120,765 | $ | 181.08 | 118,999 | $ | 711,954,191 | |||||||||||||||||
Total | 220,068 | $ | 175.55 | 216,678 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit No. | Description | Form | Exhibit | Filing Date | Filed Herewith | |||||||||||||||||||||||||||
10.1 | 8-K | 10.1 | January 28, 2021 | |||||||||||||||||||||||||||||
21 | X | |||||||||||||||||||||||||||||||
22 | X | |||||||||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||||||||
32 | X | |||||||||||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema | X | ||||||||||||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | X | ||||||||||||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | X | ||||||||||||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | X | ||||||||||||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | X | ||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X |
THE SCOTTS MIRACLE-GRO COMPANY | ||||||||
Date: February 10, 2021 | /s/ CORY J. MILLER | |||||||
Printed Name: Cory J. Miller | ||||||||
Title: Senior Vice President and Interim Chief Financial Officer |
NAME | JURISDICTION OF FORMATION | |||||||
1868 Ventures LLC | Ohio | |||||||
GenSource, Inc. | Ohio | |||||||
OMS Investments, Inc. | Delaware | |||||||
Scotts Temecula Operations, LLC | Delaware | |||||||
Sanford Scientific, Inc. | New York | |||||||
Scotts Global Services, Inc. | Ohio | |||||||
Scotts Live Goods Holdings, Inc. | Ohio | |||||||
Scotts Luxembourg SARL | Luxembourg | |||||||
Scotts Manufacturing Company | Delaware | |||||||
Miracle-Gro Lawn Products, Inc. | New York | |||||||
Scotts Products Co. | Ohio | |||||||
Scotts Servicios, S.A. de C.V.1 | Mexico | |||||||
Scotts Professional Products Co. | Ohio | |||||||
Scotts Servicios, S.A. de C.V.1 | Mexico | |||||||
SMG Growing Media, Inc. | Ohio | |||||||
AeroGrow International, Inc.2 | Nevada | |||||||
AGI Acquisition Sub, Inc. | Nevada | |||||||
Hyponex Corporation | Delaware | |||||||
Rod McLellan Company | California | |||||||
The Hawthorne Gardening Company | Delaware | |||||||
Hawthorne Hydroponics LLC | Delaware | |||||||
Hawthorne Gardening B.V. | Netherlands | |||||||
Gavita International B.V. | Netherlands | |||||||
Hawthorne Lighting B.V. | Netherlands | |||||||
Agrolux Canada Limited | Canada | |||||||
Agrolux Nederland B.V. | Netherlands | |||||||
Hawthorne Canada Limited | Canada | |||||||
HGCI, Inc. | Nevada |
________________________ | ||
1 Scotts Professional Products Co. owns 50% and Scotts Products Co. owns 50%. 2 SMG Growing Media, Inc.’s ownership is 80.5%. |
SMGM LLC | Ohio | |||||||
Scotts-Sierra Investments LLC | Delaware | |||||||
Scotts Gardening Co., Ltd. | China | |||||||
Scotts Canada Ltd. | Canada | |||||||
Laketon Peat Moss Inc.3 | Canada | |||||||
Scotts de Mexico SA de CV4 | Mexico | |||||||
SMG Germany GmbH | Germany | |||||||
SMG Gardening (UK) Limited | United Kingdom | |||||||
Swiss Farms Products, Inc. | Delaware | |||||||
The Scotts Company LLC | Ohio | |||||||
The Scotts Miracle-Gro Foundation5 | Ohio |
________________________ | ||
3 Scotts Canada Ltd.'s ownership is 50.0%. 4 The Scotts Company LLC owns 0.5% and Scotts-Sierra Investments LLC owns the remaining 99.5%. 5 The Scotts Miracle-Gro Foundation is a 501(c)(3) corporation. |
NAME OF GUARANTOR SUBSIDIARY | JURISDICTION OF FORMATION | |||||||
1868 Ventures LLC | Ohio | |||||||
GenSource, Inc. | Ohio | |||||||
Hawthorne Hydroponics LLC | Delaware | |||||||
HGCI, Inc. | Nevada | |||||||
Hyponex Corporation | Delaware | |||||||
Miracle-Gro Lawn Products, Inc. | New York | |||||||
OMS Investments, Inc. | Delaware | |||||||
Rod McLellan Company | California | |||||||
Sanford Scientific, Inc. | New York | |||||||
Scotts Manufacturing Company | Delaware | |||||||
Scotts Products Co. | Ohio | |||||||
Scotts Professional Products Co. | Ohio | |||||||
Scotts-Sierra Investments LLC | Delaware | |||||||
Scotts Temecula Operations, LLC | Delaware | |||||||
SMG Growing Media, Inc. | Ohio | |||||||
SMGM LLC | Ohio | |||||||
Swiss Farms Products, Inc. | Delaware | |||||||
The Hawthorne Gardening Company | Delaware | |||||||
The Scotts Company LLC | Ohio |
Date: February 10, 2021 | By: | /s/ JAMES HAGEDORN | ||||||||||||
Printed Name: James Hagedorn | ||||||||||||||
Title: Chief Executive Officer and Chairman of the Board |
Date: February 10, 2021 | By: | /s/ CORY J. MILLER | ||||||||||||
Printed Name: Cory J. Miller | ||||||||||||||
Title: Senior Vice President and Interim Chief Financial Officer |
/s/ JAMES HAGEDORN | /s/ CORY J. MILLER | |||||||||||||
Printed Name: James Hagedorn | Printed Name: Cory J. Miller | |||||||||||||
Title: Chief Executive Officer and Chairman of the Board | Title: Senior Vice President and Interim Chief Financial Officer | |||||||||||||
February 10, 2021 | February 10, 2021 |
* | THESE CERTIFICATIONS ARE BEING FURNISHED AS REQUIRED BY RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934 (THE “EXCHANGE ACT”) AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE, AND SHALL NOT BE DEEMED “FILED” FOR PURPOSES OF SECTION 18 OF THE EXCHANGE ACT OR OTHERWISE SUBJECT TO THE LIABILITY OF THAT SECTION. THESE CERTIFICATIONS SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THESE CERTIFICATIONS BY REFERENCE. |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 25.2 | $ (71.3) |
Other comprehensive income (loss): | ||
Net foreign currency translation adjustment | 12.4 | 4.6 |
Net unrealized gain (loss) on derivative instruments, net of tax | 2.5 | (1.4) |
Reclassification of net unrealized losses on derivative instruments to net income, net of tax | 1.9 | 0.8 |
Pension and other post-retirement benefit adjustments, net of tax | (1.2) | (1.1) |
Total other comprehensive income | 15.6 | 2.9 |
Comprehensive income (loss) | 40.8 | (68.4) |
Comprehensive income attributable to noncontrolling interest | (0.8) | (0.1) |
Comprehensive income (loss) attributable to controlling interest | $ 40.0 | $ (68.5) |
Condensed Consolidated Statements of Cash Flows (Parenthetical) - Senior notes |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
4.500% Senior Notes | ||
Interest rate of debt (percentage) | 4.50% | 4.50% |
6.000% Senior Notes | ||
Interest rate of debt (percentage) | 6.00% | 6.00% |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Accounts receivable, allowances | $ 6.8 | $ 7.5 | $ 4.2 |
Property, plant and equipment, accumulated depreciation | $ 698.8 | $ 682.1 | $ 642.2 |
Common shares stated value (USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common shares outstanding (shares) | 55.6 | 55.8 | 55.8 |
Treasury shares, at cost (shares) | 12.6 | 12.4 | 12.4 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 02, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Scotts Miracle-Gro Company (“Scotts Miracle-Gro” or “Parent”) and its subsidiaries (collectively, together with Scotts Miracle-Gro, the “Company”) are engaged in the manufacturing, marketing and sale of products for lawn and garden care and indoor and hydroponic gardening. The Company’s products are sold in North America, Europe and Asia. The Company’s North America consumer lawn and garden business is highly seasonal, with more than 75% of its annual net sales occurring in the second and third fiscal quarters. The Company follows a 13-week quarterly accounting cycle pursuant to which the first three fiscal quarters end on a Saturday and the fiscal year always ends on September 30. This fiscal calendar convention requires the Company to cycle forward the first three fiscal quarter ends every six years. Fiscal 2021 is impacted by this process and, as a result, the first quarter of fiscal 2021 had five additional days and the fourth quarter of fiscal 2021 will have six fewer days compared to the respective quarters of fiscal 2020. In addition, the second quarter of fiscal 2021 ends six days later than the second quarter of fiscal 2020 and those six days fall within the Company’s peak selling season. The Company’s first quarter of fiscal 2021 ended on January 2, 2021 while the Company’s first quarter of fiscal 2020 ended on December 28, 2019. Organization and Basis of Presentation The Company’s unaudited condensed consolidated financial statements for the three months ended January 2, 2021 and December 28, 2019 are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of Scotts Miracle-Gro and its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. The Company’s consolidation criteria are based on majority ownership (as evidenced by a majority voting interest in the entity) and an objective evaluation and determination of effective management control. AeroGrow International, Inc. (“AeroGrow”), in which the Company has a controlling interest, is consolidated, with the equity owned by other shareholders shown as noncontrolling interest in the Condensed Consolidated Balance Sheets, and the other shareholders’ portion of net earnings and other comprehensive income shown as net (income) loss or comprehensive (income) loss attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income (Loss), respectively. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of each acquisition or up to the date of disposal, respectively. In the opinion of management, interim results reflect all normal and recurring adjustments and are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with Scotts Miracle-Gro’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 (the “2020 Annual Report”), which includes a complete set of footnote disclosures, including the Company’s significant accounting policies. The Company’s Condensed Consolidated Balance Sheet at September 30, 2020 has been derived from the Company’s audited Consolidated Balance Sheet at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. Long-Lived Assets The Company had non-cash investing activities of $6.3 and $2.7 during the three months ended January 2, 2021 and December 28, 2019, respectively, representing unpaid liabilities to acquire property, plant and equipment. Statements of Cash Flows Supplemental cash flow information was as follows:
Investment in Unconsolidated Affiliates Non-marketable equity investments in which the Company has the ability to exercise significant influence, but does not control, are accounted for using the equity method of accounting, with the Company’s proportionate share of the earnings and losses of these entities reflected in the Condensed Consolidated Statements of Operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, an impairment loss is recognized in earnings for the amount by which the carrying amount of the investment exceeds its estimated fair value. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held. The Company adopted this guidance on October 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this guidance on October 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In December 2019, the FASB issued ASU No. 2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2021. The Company is continuing to assess the impact of the amended guidance.
|
DISCONTINUED OPERATIONS |
3 Months Ended |
---|---|
Jan. 02, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONSInternational BusinessPrior to August 31, 2017, the Company operated consumer lawn and garden businesses located in Australia, Austria, Belgium, Luxembourg, Czech Republic, France, Germany, Poland and the United Kingdom (the “International Business”). On August 31, 2017, the Company completed the sale of the International Business. As a result, effective in its fourth quarter of fiscal 2017, the Company classified its results of operations for all periods presented to reflect the International Business as a discontinued operation. The sale proceeds were net of seller financing provided by the Company in the form of a $29.7 loan for seven years bearing interest at 5% for the first three years, with annual 2.5% increases thereafter. The seller financing loan receivable is recorded in the “Other assets” line in the Consolidated Balance Sheets as of January 2, 2021. The transaction also included contingent consideration with a maximum payout of $23.8 and an initial fair value of $18.2, the payment of which depends on the achievement of certain performance criteria by the International Business following the closing of the transaction through fiscal 2020. The Company has not yet established whether the International Business has achieved the performance criteria for fiscal 2020 and the recorded contingent consideration, which is based upon the best information available to the Company, will be adjusted once the results are determined. If the Company determines that the International Business has not achieved the performance criteria, the Company would be required to record a charge of approximately $18.7 in the “Income (loss) from discontinued operations, net of tax” line in the Condensed Consolidated Statements of Operations to write-off the contingent consideration receivable. |
ACQUISITIONS AND INVESTMENTS |
3 Months Ended |
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Jan. 02, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
ACQUISITIONS AND INVESTMENTS | ACQUISITIONS AND INVESTMENTS On December 31, 2020, pursuant to the terms of the Contribution and Unit Purchase Agreement between the Company and Alabama Farmers Cooperative, Inc. (“AFC”), the Company acquired a 50% equity interest in the Bonnie Plants business of planting, growing, developing, manufacturing, distributing, marketing, and selling live plants, plant food, fertilizer and potting soil through a newly formed joint venture with AFC (“Bonnie Plants, LLC”) in exchange for a cash payment of $100.7, as well as non-cash investing activities that included forgiveness of the Company’s outstanding loan receivable with AFC and surrender of the Company’s options to increase its economic interest in the Bonnie Plants business. The Company’s loan receivable with AFC, which was previously recognized in the “Other assets” line in the Condensed Consolidated Balance Sheets, had a carrying value of $66.4 on December 31, 2020 and the Company recognized a gain of $12.5 during the three months ended January 2, 2021 to write-up the value of the loan to its closing date fair value of $78.9 in the “Other non-operating income, net” line in the Condensed Consolidated Statements of Operations. The Company’s options to increase its economic interest in the Bonnie Plants business were previously recognized in the “Other assets” line in the Condensed Consolidated Balance Sheets and had an estimated fair value of $23.3 on December 31, 2020. The Company’s interest in Bonnie Plants, LLC had an initial fair value of $202.9 and is recorded in the “Investment in unconsolidated affiliates” line in the Condensed Consolidated Balance Sheets. The Company’s interest is accounted for using the equity method of accounting, with the Company’s proportionate share of Bonnie Plants, LLC earnings subsequent to December 31, 2020 reflected in the Condensed Consolidated Statements of Operations. The estimated fair value of the loan receivable with AFC was determined using an income-based approach, which includes market participant expectations of cash flows over the remaining useful life discounted to present value using an appropriate discount rate. The fair value estimate utilized significant unobservable inputs and thus represents a Level 3 nonrecurring fair value measurement. On November 11, 2020, the Company entered into an agreement and plan of merger to acquire the remaining outstanding shares of AeroGrow for cash consideration of $3.00 per share, or approximately $20.1. The closing of the merger is expected to occur during the second quarter of fiscal 2021 and is subject to, among other conditions, the approval of the merger agreement by a majority of the outstanding shares of AeroGrow entitled to vote. SMG Growing Media, Inc., a wholly-owned subsidiary of Scotts Miracle-Gro, is the holder of 80.5% of the outstanding shares of AeroGrow.
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IMPAIRMENT, RESTRUCTURING AND OTHER |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IMPAIRMENT, RESTRUCTURING AND OTHER | IMPAIRMENT, RESTRUCTURING AND OTHER Activity described herein is classified within the “Cost of sales—impairment, restructuring and other” and “Impairment, restructuring and other” lines in the Condensed Consolidated Statements of Operations. The following table details impairment, restructuring and other charges (recoveries) for each of the periods presented:
The following table summarizes the activity related to liabilities associated with restructuring and other, excluding insurance reimbursement recoveries, during the three months ended January 2, 2021:
Included in restructuring accruals, as of January 2, 2021, is $1.1 that is classified as long-term. Payments against the long-term accruals will be incurred as the employees covered by the restructuring plan retire or through the passage of time. The remaining amounts accrued will continue to be paid out over the course of the next twelve months. COVID-19 The World Health Organization recognized COVID-19 as a public health emergency of international concern on January 30, 2020 and as a global pandemic on March 11, 2020. In response to the COVID-19 pandemic, the Company has implemented additional measures intended to both protect the health and safety of its employees and maintain its ability to provide products to its customers, including (i) requiring a significant part of its workforce to work from home, (ii) monitoring its employees for COVID-19 symptoms, (iii) making additional personal protective equipment available to its operations team, (iv) requiring all manufacturing and warehousing associates to take their temperatures before beginning a shift, (v) modifying work methods and schedules of its manufacturing and field associates to create distance or add barriers between associates, consumers and others, (vi) expanding cleaning efforts at its operation centers, (vii) modifying attendance policies so that associates may elect to stay home if they have symptoms, (viii) prioritizing production for goods that are more essential to its customers and (ix) implementing an interim premium pay allowance for certain associates in its field sales force or working in manufacturing or distribution centers. During the three months ended January 2, 2021, the Company incurred costs of $9.3 associated with the COVID-19 pandemic primarily related to premium pay. The Company incurred costs of $8.3 in its U.S. Consumer segment and $0.4 in its Hawthorne segment in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three months ended January 2, 2021. The Company incurred costs of $0.6 in its U.S. Consumer segment in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three months ended January 2, 2021. Since the inception of the COVID-19 pandemic, total costs classified within the “Cost of sales—impairment, restructuring and other” and the “Impairment, restructuring and other” lines in the Condensed Consolidated Statements of Operations are $25.1 for the U.S. Consumer segment, $3.0 for the Hawthorne segment and $0.6 for the Other segment. Project Catalyst In connection with the acquisition of Sunlight Supply during the third quarter of fiscal 2018, the Company announced the launch of an initiative called Project Catalyst, which is a company-wide restructuring effort to reduce operating costs throughout the U.S. Consumer, Hawthorne and Other segments and drive synergies from acquisitions within the Hawthorne segment. Costs incurred during the three months ended January 2, 2021 and December 28, 2019 related to Project Catalyst were not material. Costs incurred to date since the inception of Project Catalyst are $25.1 for the Hawthorne segment, $13.9 for the U.S. Consumer segment, $1.3 for the Other segment and $2.8 for Corporate. Additionally, during the three months ended December 28, 2019, the Company received $2.6 from the final settlement of escrow funds related to a previous acquisition within the Hawthorne segment that was recognized in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations.
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INVENTORIES |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories consisted of the following for each of the periods presented:
Adjustments to reflect inventories at net realizable values were $23.9 at January 2, 2021, $11.4 at December 28, 2019 and $31.3 at September 30, 2020.
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MARKETING AGREEMENT |
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Marketing Agreement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MARKETING AGREEMENT | MARKETING AGREEMENT The Scotts Company LLC (“Scotts LLC”) is the exclusive agent of Monsanto Company, a subsidiary of Bayer AG (“Monsanto”), for the marketing and distribution of certain of Monsanto’s consumer Roundup® branded products in the United States and certain other specified countries. Effective August 1, 2019, the Company entered into the Third Amended and Restated Exclusive Agency and Marketing Agreement (the “Third Restated Agreement”) which amended, among other things, the provisions of the Second Amended and Restated Exclusive Agency and Marketing Agreement (the “Restated Marketing Agreement”) relating to commissions, contributions, noncompetition, and termination. The annual commission payable under the Third Restated Agreement is equal to 50% of the actual earnings before interest and income taxes of Monsanto’s consumer Roundup® business in the markets covered by the Third Restated Agreement (“Program EBIT”). The Third Restated Agreement also requires the Company to make annual payments of $18.0 to Monsanto as a contribution against the overall expenses of its consumer Roundup® business, subject to reduction pursuant to the Third Restated Agreement for any program year in which the Program EBIT does not equal or exceed $36.0. Unless Monsanto terminates the Third Restated Agreement due to an event of default by the Company, termination rights under the Third Restated Agreement include the following: •The Company may terminate the Third Restated Agreement (i) for any reason effective as of September 30, 2022 by delivery of notice of termination to Monsanto on January 15, 2021 (a “Convenience Termination”) or (ii) upon the insolvency or bankruptcy of Monsanto; •Monsanto may terminate the Third Restated Agreement in the event that Monsanto decides to decommission the permits, licenses and registrations needed for, and the trademarks, trade names, packages, copyrights and designs used in, the sale of the Roundup® products in the lawn and garden market (a “Brand Decommissioning Termination”); and •Each party may terminate the Third Restated Agreement if Program EBIT falls below $50.0 and, in such case, no termination fee would be payable to either party. On January 15, 2021, the Company declined to exercise its Convenience Termination right. The termination fee structure requires Monsanto to pay a termination fee to the Company in an amount equal to (i) $175.0 upon a Convenience Termination, which the Company declined to exercise, (ii) $375.0 upon a Brand Decommissioning Termination, and (iii) the greater of $175.0 or four times an amount equal to the average of the Program EBIT for the three program years before the year of termination, minus $186.4, if Monsanto or its successor terminates the Third Restated Agreement as a result of a Roundup Sale or Change of Control of Monsanto (each, as defined in the Third Restated Agreement). In connection with the signing of the Third Restated Agreement, the Company also entered into the Brand Extension Agreement Asset Purchase Agreement (the “BEA Purchase Agreement”). The BEA Purchase Agreement provides for the sale by the Company to Monsanto of specified assets related to, among other things, the development, manufacture, production, advertising, marketing, promotion, distribution, importation, exportation, offer for sale and sale of specified Roundup® branded products sold outside the non-selective weedkiller category within the residential lawn and garden market. The consideration paid by Monsanto was $112.0 plus the value of finished goods inventory of $3.5. This consideration was recorded in the “Prepaid and other current assets” line in the Consolidated Balance Sheets until it was received by the Company on January 13, 2020. The carrying value of the assets sold included the brand extension agreement intangible asset with a carrying value of $111.7. The elements of the net commission and reimbursements earned under the Restated Marketing Agreement and Third Restated Agreement and included in the “Net sales” line in the Condensed Consolidated Statements of Operations are as follows:
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT The components of debt are as follows:
Credit Facilities On July 5, 2018, the Company entered into a fifth amended and restated credit agreement (the “Fifth A&R Credit Agreement”), providing the Company and certain of its subsidiaries with five-year senior secured loan facilities in the aggregate principal amount of $2,300.0, comprised of a revolving credit facility of $1,500.0 and a term loan in the original principal amount of $800.0 (the “Fifth A&R Credit Facilities”). At January 2, 2021, the Company had letters of credit outstanding in the aggregate principal amount of $19.8, and $880.6 of borrowing availability under the Fifth A&R Credit Agreement. The weighted average interest rates on average borrowings under the Fifth A&R Credit Agreement were 2.1% and 3.9% for the three months ended January 2, 2021 and December 28, 2019, respectively. The Fifth A&R Credit Agreement contains, among other obligations, an affirmative covenant regarding the Company’s leverage ratio on the last day of each quarter calculated as average total indebtedness, divided by the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), as adjusted pursuant to the terms of the Fifth A&R Credit Agreement (“Adjusted EBITDA”). The maximum leverage ratio is 4.50. The Company’s leverage ratio was 2.26 at January 2, 2021. The Fifth A&R Credit Agreement also contains an affirmative covenant regarding the Company’s interest coverage ratio determined as of the end of each of its fiscal quarters. The interest coverage ratio is calculated as Adjusted EBITDA divided by interest expense, as described in the Fifth A&R Credit Agreement, and excludes costs related to refinancings. The minimum interest coverage ratio was 3.00 for the twelve months ended January 2, 2021. The Company’s interest coverage ratio was 11.84 for the twelve months ended January 2, 2021. The Fifth A&R Credit Agreement allows the Company to make unlimited restricted payments (as defined in the Fifth A&R Credit Agreement), including dividend payments and repurchases of the common shares of Scotts Miracle-Gro (“Common Shares”), as long as the leverage ratio resulting from the making of such restricted payments is 4.00 or less. Otherwise, the Company may make further restricted payments in an aggregate amount for each fiscal year not to exceed $225.0. Senior Notes On December 15, 2016, Scotts Miracle-Gro issued $250.0 aggregate principal amount of 5.250% Senior Notes due 2026 (the “5.250% Senior Notes”). The 5.250% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with the Company’s existing and future unsecured senior debt. The 5.250% Senior Notes have interest payment dates of June 15 and December 15 of each year. Substantially all of Scotts Miracle-Gro’s directly and indirectly owned domestic subsidiaries serve as guarantors of the 5.250% Senior Notes. On October 22, 2019, Scotts Miracle-Gro issued $450.0 aggregate principal amount of 4.500% Senior Notes due 2029 (the “4.500% Senior Notes”). The net proceeds of the offering were used to redeem all of the Company’s outstanding 6.000% Senior Notes due 2023 (the “6.000% Senior Notes”) and for general corporate purposes. The 4.500% Senior Notes represent general unsecured senior obligations and rank equal in right of payment with the Company’s existing and future unsecured senior debt. The 4.500% Senior Notes have interest payment dates of April 15 and October 15 of each year. All of Scotts Miracle-Gro’s domestic subsidiaries that serve as guarantors of the 5.250% Senior Notes also serve as guarantors of the 4.500% Senior Notes. On October 23, 2019, Scotts Miracle-Gro redeemed all of its outstanding 6.000% Senior Notes for a redemption price of $412.5, comprised of $0.5 of accrued and unpaid interest, $12.0 of redemption premium, and $400.0 for outstanding principal amount. The $12.0 redemption premium was recognized in the “Costs related to refinancing” line on the Condensed Consolidated Statements of Operations during the first quarter of fiscal 2020. Additionally, the Company had $3.1 in unamortized bond issuance costs associated with the 6.000% Senior Notes, which were written-off during the first quarter of fiscal 2020 and were recognized in the “Costs related to refinancing” line in the Condensed Consolidated Statements of Operations. Receivables Facility On April 7, 2017, the Company entered into a Master Repurchase Agreement (including the annexes thereto, the “Repurchase Agreement”) and a Master Framework Agreement, as amended annually (the “Framework Agreement” and, together with the Repurchase Agreement, the “Receivables Facility”). Under the Receivables Facility, the Company may sell a portfolio of available and eligible outstanding customer accounts receivable to the purchasers and simultaneously agree to repurchase the receivables on a weekly basis. The eligible accounts receivable consist of accounts receivable generated by sales to three specified customers. The eligible amount of customer accounts receivables which may be sold under the Receivables Facility is $400.0 and the commitment amount during the seasonal commitment period beginning on February 26, 2021 and ending on June 18, 2021 is $160.0. The Receivables Facility expires on August 20, 2021. The Company accounts for the sale of receivables under the Receivables Facility as short-term debt and continues to carry the receivables on its Condensed Consolidated Balance Sheets, primarily as a result of the Company’s requirement to repurchase receivables sold. As of January 2, 2021 and December 28, 2019, there were $136.0 and $39.0, respectively, in borrowings on receivables pledged as collateral under the Receivables Facility, and the carrying value of the receivables pledged as collateral was $151.1 and $43.3, respectively. Interest Rate Swap Agreements The Company has outstanding interest rate swap agreements with major financial institutions that effectively convert a portion of the Company’s variable-rate debt to a fixed rate. The swap agreements had a maximum total U.S. dollar equivalent notional amount of $600.0, $850.0 and $600.0 at January 2, 2021, December 28, 2019 and September 30, 2020, respectively. Interest payments made between the effective date and expiration date are hedged by the swap agreements, except as noted below. The notional amount, effective date, expiration date and rate of each of these swap agreements outstanding at January 2, 2021 are shown in the table below:
(a)The effective date refers to the date on which interest payments are first hedged by the applicable swap agreement. (b)Notional amount adjusts in accordance with a specified seasonal schedule. This represents the maximum notional amount at any point in time. Weighted Average Interest Rate The weighted average interest rates on the Company’s debt were 3.8% and 4.5% for the three months ended January 2, 2021 and December 28, 2019, respectively.
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EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY The following tables provide a summary of the changes in total equity, equity attributable to controlling interest, and equity attributable to noncontrolling interests for each of the periods indicated:
The sum of the components may not equal due to rounding.
The sum of the components may not equal due to rounding. Changes in AOCL by component were as follows for each of the periods indicated:
The sum of the components may not equal due to rounding.
The sum of the components may not equal due to rounding. Dividends On July 27, 2020, the Scotts Miracle-Gro Board of Directors approved an increase in the Company’s quarterly cash dividend from $0.58 to $0.62 per Common Share. In addition, on July 27, 2020, the Scotts Miracle-Gro Board of Directors approved a special cash dividend of $5.00 per Common Share, which was paid on September 10, 2020 to all shareholders of record at the close of business on August 27, 2020. Share Repurchases On August 11, 2014, Scotts Miracle-Gro announced that its Board of Directors authorized the repurchase of up to $500.0 of Common Shares over a five-year period (effective November 1, 2014 through September 30, 2019). On August 3, 2016, Scotts Miracle-Gro announced that its Board of Directors authorized a $500.0 increase to the share repurchase authorization ending on September 30, 2019. On August 2, 2019, the Scotts Miracle-Gro Board of Directors authorized an extension of the share repurchase authorization through March 28, 2020. The amended authorization allowed for repurchases of Common Shares of up to an aggregate amount of $1,000.0 through March 28, 2020. There were no share repurchases under this share repurchase authorization during the three months ended December 28, 2019. From the effective date of this share repurchase authorization in the fourth quarter of fiscal 2014 through March 28, 2020, Scotts Miracle-Gro repurchased approximately 8.7 million Common Shares for $762.8. On February 6, 2020, the Company announced a new share repurchase program allowing for repurchases of up to $750.0 of Common Shares from April 30, 2020 through March 25, 2023. The authorization provides the Company with flexibility to purchase Common Shares from time to time in open market purchases or through privately negotiated transactions. All or part of the repurchases may be made under Rule 10b5-1 plans, which the Company may enter into from time to time and which enable the repurchases to occur on a more regular basis, or pursuant to accelerated share repurchases. The share repurchase authorization may be suspended or discontinued by the Board of Directors at any time, and there can be no guarantee as to the timing or amount of any repurchases. There were no share repurchases under this share repurchase authorization during fiscal 2020. During the three months ended January 2, 2021, Scotts Miracle-Gro repurchased approximately 0.2 million Common Shares under this share repurchase authorization for $38.0. Share-Based Awards The following is a summary of the share-based awards granted during each of the periods indicated:
Total share-based compensation was as follows for each of the periods indicated:
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INCOME TAXES |
3 Months Ended |
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Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rates related to continuing operations for the three months ended January 2, 2021 and December 28, 2019 were 23.9% and 25.0%, respectively. The effective tax rate used for interim reporting purposes is based on management’s best estimate of factors impacting the effective tax rate for the full fiscal year and includes the impact of discrete items recognized in the quarter. There can be no assurance that the effective tax rate estimated for interim financial reporting purposes will approximate the effective tax rate determined at fiscal year end. Scotts Miracle-Gro or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. Subject to the following exceptions, the Company is no longer subject to examination by these tax authorities for fiscal years prior to 2017. There are currently no ongoing audits with respect to the U.S. federal jurisdiction. With respect to the foreign jurisdictions, a German audit covering fiscal years 2014 through 2017 is underway with no known material impact to the financial statements. The Company is currently under examination by certain U.S. state and local tax authorities covering various periods from fiscal years 2011 through 2019. In addition to the aforementioned audits, certain other tax deficiency notices and refund claims for previous years remain unresolved. The Company currently anticipates that few of its open and active audits will be resolved within the next twelve months. The Company is unable to make a reasonably reliable estimate as to when or if cash settlements with taxing authorities may occur. Although the outcomes of such examinations and the timing of any payments required upon the conclusion of such examinations are subject to significant uncertainty, the Company does not anticipate that the resolution of these tax matters or any events related thereto will result in a material change to its consolidated financial position, results of operations or cash flows.
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CONTINGENCIES |
3 Months Ended |
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Jan. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Management regularly evaluates the Company’s contingencies, including various lawsuits and claims which arise in the normal course of business, product and general liabilities, workers’ compensation, property losses and other liabilities for which the Company is self-insured or retains a high exposure limit. Self-insurance accruals are established based on actuarial loss estimates for specific individual claims plus actuarially estimated amounts for incurred but not reported claims and adverse development factors applied to existing claims. Legal costs incurred in connection with the resolution of claims, lawsuits and other contingencies generally are expensed as incurred. In the opinion of management, the assessment of contingencies is reasonable and related accruals, in the aggregate, are adequate; however, there can be no assurance that final resolution of these matters will not have a material effect on the Company’s financial condition, results of operations or cash flows. Regulatory Matters At January 2, 2021, $3.8 was accrued in the “Other liabilities” line in the Condensed Consolidated Balance Sheets for environmental actions, the majority of which are for site remediation. The Company believes that the amounts accrued are adequate to cover such known environmental exposures based on current facts and estimates of likely outcomes. Although it is reasonably possible that the costs to resolve such known environmental exposures will exceed the amounts accrued, any variation from accrued amounts is not expected to be material. Other The Company has been named as a defendant in a number of cases alleging injuries that the lawsuits claim resulted from exposure to asbestos-containing products, apparently based on the Company’s historic use of vermiculite in certain of its products. In many of these cases, the complaints are not specific about the plaintiffs’ contacts with the Company or its products. The cases vary, but complaints in these cases generally seek unspecified monetary damages (actual, compensatory, consequential and punitive) from multiple defendants. The Company believes that the claims against it are without merit and is vigorously defending against them. No accruals have been recorded in the Company’s consolidated financial statements as the likelihood of a loss is not probable at this time; and the Company does not believe a reasonably possible loss would be material to, nor the ultimate resolution of these cases will have a material adverse effect on, the Company’s financial condition, results of operations or cash flows. There can be no assurance that future developments related to pending claims or claims filed in the future, whether as a result of adverse outcomes or as a result of significant defense costs, will not have a material effect on the Company’s financial condition, results of operations or cash flows. The Company is involved in other lawsuits and claims which arise in the normal course of business. These claims individually and in the aggregate are not expected to result in a material effect on the Company’s financial condition, results of operations or cash flows.
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices. To manage a portion of the volatility related to these exposures, the Company enters into various financial transactions. The utilization of these financial transactions is governed by policies covering acceptable counterparty exposure, instrument types and other hedging practices. The Company does not hold or issue derivative financial instruments for speculative trading purposes. Exchange Rate Risk Management The Company uses currency forward contracts to manage the exchange rate risk associated with intercompany loans and certain other balances denominated in foreign currencies. Currency forward contracts are valued using observable forward rates in commonly quoted intervals for the full term of the contracts. The notional amount of outstanding currency forward contracts was $161.5, $128.7 and $160.1 at January 2, 2021, December 28, 2019 and September 30, 2020, respectively. Contracts outstanding at January 2, 2021 will mature over the next fiscal quarter. Interest Rate Risk Management The Company enters into interest rate swap agreements as a means to hedge its variable interest rate risk on debt instruments. Net amounts to be received or paid under the swap agreements are reflected as adjustments to interest expense. The Company has outstanding interest rate swap agreements with major financial institutions that effectively convert a portion of the Company’s variable-rate debt to a fixed rate. Interest rate swap agreements are valued based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date. The swap agreements had a maximum total U.S. dollar equivalent notional amount of $600.0, $850.0 and $600.0 at January 2, 2021, December 28, 2019 and September 30, 2020, respectively. Refer to “NOTE 7. DEBT” for the terms of the swap agreements outstanding at January 2, 2021. Included in the AOCL balance at January 2, 2021 was a loss of $6.7 related to interest rate swap agreements that is expected to be reclassified to earnings during the next twelve months, consistent with the timing of the underlying hedged transactions. Commodity Price Risk Management The Company enters into hedging arrangements designed to fix the price of a portion of its projected future urea, diesel and resin requirements. Commodity contracts are valued using observable commodity exchange prices in active markets. Included in the AOCL balance at January 2, 2021 was a gain of $1.3 related to commodity hedges that is expected to be reclassified to earnings during the next twelve months, consistent with the timing of the underlying hedged transactions. The Company had the following outstanding commodity contracts that were entered into to hedge forecasted purchases:
Fair Values of Derivative Instruments The fair values of the Company’s derivative instruments, which represent Level 2 fair value measurements, were as follows:
The effect of derivative instruments on AOCL, net of tax, and the Condensed Consolidated Statements of Operations for each of the periods presented was as follows:
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table summarizes the fair value of the Company’s assets and liabilities for which disclosure of fair value is required:
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LEASES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company leases certain property and equipment from third parties under various non-cancelable lease agreements, including industrial, commercial and office properties and equipment that support the management, manufacturing, distribution and research and development of products marketed and sold by the Company. The lease agreements generally require that the Company pay taxes, insurance and maintenance expenses related to the leased assets. At January 2, 2021, the Company had entered into operating leases that were yet to commence with a combined total expected lease liability of $45.3. From time to time, the Company will sublease portions of its facilities, resulting in sublease income. Sublease income and the related cash flows were not material to the condensed consolidated financial statements for the three months ended January 2, 2021 and December 28, 2019. The Company leases certain vehicles (primarily cars and light trucks) under agreements that are cancelable after the first year, but typically continue on a month-to-month basis until canceled by the Company. The vehicle leases and certain other non-cancelable operating leases contain residual value guarantees that create a contingent obligation on the part of the Company to compensate the lessor if the leased asset cannot be sold for an amount in excess of a specified minimum value at the conclusion of the lease term. If all such vehicle leases had been canceled as of January 2, 2021, the Company’s residual value guarantee would have approximated $4.1. Supplemental balance sheet information related to the Company’s leases was as follows:
Components of lease cost were as follows:
(a)Operating lease cost includes amortization of ROU assets of $13.3 and $11.1 for the three months ended January 2, 2021 and December 28, 2019, respectively. Short-term lease expense is excluded from operating lease cost and is not material. Supplemental cash flow information and non-cash activity related to the Company’s leases were as follows:
Weighted-average remaining lease term and discount rate for the Company’s leases were as follows:
Maturities of lease liabilities by fiscal year for the Company’s leases as of January 2, 2021 were as follows:
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LEASES | LEASES The Company leases certain property and equipment from third parties under various non-cancelable lease agreements, including industrial, commercial and office properties and equipment that support the management, manufacturing, distribution and research and development of products marketed and sold by the Company. The lease agreements generally require that the Company pay taxes, insurance and maintenance expenses related to the leased assets. At January 2, 2021, the Company had entered into operating leases that were yet to commence with a combined total expected lease liability of $45.3. From time to time, the Company will sublease portions of its facilities, resulting in sublease income. Sublease income and the related cash flows were not material to the condensed consolidated financial statements for the three months ended January 2, 2021 and December 28, 2019. The Company leases certain vehicles (primarily cars and light trucks) under agreements that are cancelable after the first year, but typically continue on a month-to-month basis until canceled by the Company. The vehicle leases and certain other non-cancelable operating leases contain residual value guarantees that create a contingent obligation on the part of the Company to compensate the lessor if the leased asset cannot be sold for an amount in excess of a specified minimum value at the conclusion of the lease term. If all such vehicle leases had been canceled as of January 2, 2021, the Company’s residual value guarantee would have approximated $4.1. Supplemental balance sheet information related to the Company’s leases was as follows:
Components of lease cost were as follows:
(a)Operating lease cost includes amortization of ROU assets of $13.3 and $11.1 for the three months ended January 2, 2021 and December 28, 2019, respectively. Short-term lease expense is excluded from operating lease cost and is not material. Supplemental cash flow information and non-cash activity related to the Company’s leases were as follows:
Weighted-average remaining lease term and discount rate for the Company’s leases were as follows:
Maturities of lease liabilities by fiscal year for the Company’s leases as of January 2, 2021 were as follows:
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SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Company divides its operations into three reportable segments: U.S. Consumer, Hawthorne and Other. U.S. Consumer consists of the Company’s consumer lawn and garden business located in the geographic United States. Hawthorne consists of the Company’s indoor and hydroponic gardening business. Other consists of the Company’s consumer lawn and garden business in geographies other than the U.S. and the Company’s product sales to commercial nurseries, greenhouses and other professional customers. In addition, Corporate consists of general and administrative expenses and certain other income and expense items not allocated to the business segments. This identification of reportable segments is consistent with how the segments report to and are managed by the chief operating decision maker of the Company. During the three months ended January 2, 2021, the Company changed its internal organization structure such that AeroGrow is now managed by and reported within the U.S. Consumer segment. Within the U.S. Consumer segment, AeroGrow will be integrated into the Company’s overall direct-to-consumer focus and strategy. AeroGrow was previously managed by and reported within the Hawthorne segment. The prior period amounts have been reclassified to conform with the new organization structure. This change in organization structure resulted in a change in the Company’s reporting units. As a result, goodwill included in impacted reporting units was reallocated using a relative fair value approach, resulting in $15.8 of goodwill reallocated from the Hawthorne segment to the U.S. Consumer segment during the three months ended January 2, 2021. In addition, the Company completed an assessment of potential goodwill impairment immediately before and after the reallocation and determined that no impairment existed. The performance of each reportable segment is evaluated based on several factors, including income (loss) from continuing operations before income taxes, amortization, impairment, restructuring and other charges (“Segment Profit (Loss)”). Senior management uses Segment Profit (Loss) to evaluate segment performance because the Company believes this measure is indicative of performance trends and the overall earnings potential of each segment. The following tables present financial information for the Company’s reportable segments for the periods indicated:
The following table presents net sales by product category for the periods indicated:
The following table presents net sales by geographic area for the periods indicated:
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SUBSEQUENT EVENT |
3 Months Ended |
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Jan. 02, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENTOn January 11, 2021, the Company announced that Thomas Randal Coleman, Executive Vice President and Chief Financial Officer, departed from his positions with the Company, effective as of January 5, 2021. Cory Miller assumed the role of interim Chief Financial Officer. In connection with Mr. Coleman’s departure, the Company entered into a Separation Agreement and Release of All Claims (the “Separation Agreement”) with Mr. Coleman. The Separation Agreement addresses the payments and benefits to which Mr. Coleman is entitled in connection with his departure. The Company will record a charge of $3.3 during the second quarter of fiscal 2021 associated with Mr. Coleman’s departure, primarily comprised of: (i) severance pay equal to 24 months of salary, at Mr. Coleman’s regular monthly base pay; (ii) a lump sum payment of $0.03 in lieu of outplacement services; (iii) for a period of 24 months, a benefits offset payment in an amount equal to the excess of the COBRA premium charged by the Company to terminated employees over the premium Mr. Coleman paid as an active employee; (iv) in lieu of an annual bonus award, an amount equal to two times Mr. Coleman’s target bonus amount for the Company’s 2021 fiscal year, 50% of which is payable on the first scheduled pay date following the first anniversary of Mr. Coleman’s departure date and 50% of which is payable on the first scheduled pay date following the second anniversary of Mr. Coleman’s departure date, subject to Mr. Coleman’s continued compliance as of the payment date with all of his post-employment obligations to the Company; and (v) acceleration of share-based compensation expense related to awards that will vest or partially vest upon Mr. Coleman’s departure from the Company. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Jan. 02, 2021 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations The Scotts Miracle-Gro Company (“Scotts Miracle-Gro” or “Parent”) and its subsidiaries (collectively, together with Scotts Miracle-Gro, the “Company”) are engaged in the manufacturing, marketing and sale of products for lawn and garden care and indoor and hydroponic gardening. The Company’s products are sold in North America, Europe and Asia. The Company’s North America consumer lawn and garden business is highly seasonal, with more than 75% of its annual net sales occurring in the second and third fiscal quarters. The Company follows a 13-week quarterly accounting cycle pursuant to which the first three fiscal quarters end on a Saturday and the fiscal year always ends on September 30. This fiscal calendar convention requires the Company to cycle forward the first three fiscal quarter ends every six years. Fiscal 2021 is impacted by this process and, as a result, the first quarter of fiscal 2021 had five additional days and the fourth quarter of fiscal 2021 will have six fewer days compared to the respective quarters of fiscal 2020. In addition, the second quarter of fiscal 2021 ends six days later than the second quarter of fiscal 2020 and those six days fall within the Company’s peak selling season. The Company’s first quarter of fiscal 2021 ended on January 2, 2021 while the Company’s first quarter of fiscal 2020 ended on December 28, 2019.
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Organization and Basis of Presentation | Organization and Basis of Presentation The Company’s unaudited condensed consolidated financial statements for the three months ended January 2, 2021 and December 28, 2019 are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of Scotts Miracle-Gro and its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. The Company’s consolidation criteria are based on majority ownership (as evidenced by a majority voting interest in the entity) and an objective evaluation and determination of effective management control. AeroGrow International, Inc. (“AeroGrow”), in which the Company has a controlling interest, is consolidated, with the equity owned by other shareholders shown as noncontrolling interest in the Condensed Consolidated Balance Sheets, and the other shareholders’ portion of net earnings and other comprehensive income shown as net (income) loss or comprehensive (income) loss attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income (Loss), respectively. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of each acquisition or up to the date of disposal, respectively. In the opinion of management, interim results reflect all normal and recurring adjustments and are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with Scotts Miracle-Gro’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 (the “2020 Annual Report”), which includes a complete set of footnote disclosures, including the Company’s significant accounting policies. The Company’s Condensed Consolidated Balance Sheet at September 30, 2020 has been derived from the Company’s audited Consolidated Balance Sheet at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.
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Investment in Unconsolidated Affiliates | Investment in Unconsolidated AffiliatesNon-marketable equity investments in which the Company has the ability to exercise significant influence, but does not control, are accounted for using the equity method of accounting, with the Company’s proportionate share of the earnings and losses of these entities reflected in the Condensed Consolidated Statements of Operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, an impairment loss is recognized in earnings for the amount by which the carrying amount of the investment exceeds its estimated fair value. |
Recently Adopted & Issued Accounting Pronouncements | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held. The Company adopted this guidance on October 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this guidance on October 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In December 2019, the FASB issued ASU No. 2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2021. The Company is continuing to assess the impact of the amended guidance.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information was as follows:
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IMPAIRMENT, RESTRUCTURING AND OTHER (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Impairment, Restructuring and Other Charges, and Activity Related to Liabilities | The following table details impairment, restructuring and other charges (recoveries) for each of the periods presented:
The following table summarizes the activity related to liabilities associated with restructuring and other, excluding insurance reimbursement recoveries, during the three months ended January 2, 2021:
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INVENTORIES (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Inventories | Inventories consisted of the following for each of the periods presented:
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MARKETING AGREEMENT (Tables) |
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Marketing Agreement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Commission and Reimbursements Earned Under Marketing Agreement | The elements of the net commission and reimbursements earned under the Restated Marketing Agreement and Third Restated Agreement and included in the “Net sales” line in the Condensed Consolidated Statements of Operations are as follows:
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DEBT (Tables) |
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Components of Long-Term Debt | The components of debt are as follows:
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Schedule of Interest Rate Swap Agreements | The notional amount, effective date, expiration date and rate of each of these swap agreements outstanding at January 2, 2021 are shown in the table below:
(a)The effective date refers to the date on which interest payments are first hedged by the applicable swap agreement. (b)Notional amount adjusts in accordance with a specified seasonal schedule. This represents the maximum notional amount at any point in time.
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EQUITY (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Equity | The following tables provide a summary of the changes in total equity, equity attributable to controlling interest, and equity attributable to noncontrolling interests for each of the periods indicated:
The sum of the components may not equal due to rounding.
The sum of the components may not equal due to rounding.
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Schedule of Accumulated Other Comprehensive Loss | Changes in AOCL by component were as follows for each of the periods indicated:
The sum of the components may not equal due to rounding.
The sum of the components may not equal due to rounding.
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Schedule of Share-Based Awards Granted | The following is a summary of the share-based awards granted during each of the periods indicated:
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Schedule of Share-Based Compensation | Total share-based compensation was as follows for each of the periods indicated:
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
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Jan. 02, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Derivative Contracts | The Company had the following outstanding commodity contracts that were entered into to hedge forecasted purchases:
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Schedule of the Fair Values of Derivative Instruments | The fair values of the Company’s derivative instruments, which represent Level 2 fair value measurements, were as follows:
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Schedule of the Effect of Derivative Instruments on AOCI and Statements of Operations | The effect of derivative instruments on AOCL, net of tax, and the Condensed Consolidated Statements of Operations for each of the periods presented was as follows:
|
FAIR VALUE MEASUREMENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 02, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring Basis | The following table summarizes the fair value of the Company’s assets and liabilities for which disclosure of fair value is required:
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LEASES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 02, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Remaining Lease Term and Discount Rate and Supplemental Balance Sheet Information Schedule | Supplemental balance sheet information related to the Company’s leases was as follows:
Weighted-average remaining lease term and discount rate for the Company’s leases were as follows:
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Lease Cost Components and Supplemental Cash Flow Information and Non-Cash Activity For Company's Leases Schedules | Components of lease cost were as follows:
(a)Operating lease cost includes amortization of ROU assets of $13.3 and $11.1 for the three months ended January 2, 2021 and December 28, 2019, respectively. Short-term lease expense is excluded from operating lease cost and is not material. Supplemental cash flow information and non-cash activity related to the Company’s leases were as follows:
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Maturities of Operating Lease Liabilities by Fiscal Year Schedule | Maturities of lease liabilities by fiscal year for the Company’s leases as of January 2, 2021 were as follows:
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Maturities of Finance Lease Liabilities by Fiscal Year Schedule | Maturities of lease liabilities by fiscal year for the Company’s leases as of January 2, 2021 were as follows:
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SEGMENT INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 02, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Financial Information | The following tables present financial information for the Company’s reportable segments for the periods indicated:
The following table presents net sales by product category for the periods indicated:
The following table presents net sales by geographic area for the periods indicated:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Accounting Policies [Abstract] | ||
Percentage of annual net sales | 75.00% | |
Noncash investing activities for unpaid liabilities incurred | $ 6.3 | $ 2.7 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Accounting Policies [Abstract] | ||
Interest paid | $ 23.0 | $ 28.1 |
Income tax payments (refunds) | $ 0.2 | $ (2.1) |
DISCONTINUED OPERATIONS (Details) - International Business $ in Millions |
Aug. 31, 2017
USD ($)
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Vendor financing loan | $ 29.7 |
Financing loan term | 7 years |
Annual interest rate | 5.00% |
Annual interest rate increases | 2.50% |
Contingent consideration maximum payout | $ 23.8 |
Fair value of contingent consideration | 18.2 |
Discontinued Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Write-off of contingent consideration receivable | $ 18.7 |
ACQUISITIONS AND INVESTMENTS (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2020 |
Nov. 11, 2020 |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
|
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire equity interest | $ 100.7 | ||||
Loans receivable, carrying value | 66.4 | ||||
Gain from change in fair value of loans receivable | $ 12.5 | ||||
Loans receivable, fair value | 78.9 | ||||
Investment, estimated fair value | $ 23.3 | ||||
Investment in unconsolidated affiliates | $ 202.9 | $ 0.0 | $ 0.0 | ||
AeroGrow | SMG Growing Media, Inc. | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity ownership percentage | 80.50% | ||||
AeroGrow | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cash consideration per share (USD per share) | $ 3.00 | ||||
Cash consideration | $ 20.1 | ||||
Bonnie Plants | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity ownership percentage | 50.00% | ||||
Investment in unconsolidated affiliates | $ 202.9 |
IMPAIRMENT, RESTRUCTURING AND OTHER - Impairment, Restructuring and Other Charges (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges (recoveries), net | $ 0.7 | $ (2.5) |
Total impairment, restructuring and other charges (recoveries) | 9.7 | (2.2) |
COVID-19 related costs | Cost of sales—impairment, restructuring and other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 8.7 | 0.0 |
COVID-19 related costs | Operating expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 0.6 | 0.0 |
Restructuring and other charges | Cost of sales—impairment, restructuring and other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges (recoveries), net | 0.3 | 0.3 |
Restructuring and other charges | Operating expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges (recoveries), net | $ 0.1 | $ (2.5) |
IMPAIRMENT, RESTRUCTURING AND OTHER - Activity Related to Liabilities Associated with Restructuring (Details) $ in Millions |
3 Months Ended |
---|---|
Jan. 02, 2021
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Amounts accrued for restructuring and other, beginning balance | $ 3.9 |
Restructuring and other charges from continuing operations | 9.7 |
Payments and other | (10.4) |
Amounts accrued for restructuring and other, ending balance | $ 3.2 |
INVENTORIES (Details) - USD ($) $ in Millions |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Finished goods | $ 768.4 | $ 390.3 | $ 609.2 |
Work-in-process | 84.0 | 164.8 | 79.1 |
Raw materials | 215.9 | 66.8 | 177.8 |
Total inventories | 1,068.3 | 621.9 | 866.1 |
Adjustments to reflect inventories at net realizable values | $ 23.9 | $ 31.3 | $ 11.4 |
MARKETING AGREEMENT - Additional Information (Details) $ in Millions |
Aug. 01, 2019
USD ($)
|
---|---|
Restated Marketing Agreement | |
Marketing Agreement [Line Items] | |
Percentage of program earnings | 50.00% |
Annual payments | $ 18.0 |
Third Restated Agreement | |
Marketing Agreement [Line Items] | |
Minimum annual EBIT required to avoid reduction of contribution payment | 36.0 |
Minimum EBIT | 50.0 |
Termination fee payable | 175.0 |
Brand decommissioning event payable | $ 375.0 |
Minimum termination fee payable multiple | 4 |
Minimum termination fee payable threshold | $ 186.4 |
Brand Extension Asset Purchase Agreement | |
Marketing Agreement [Line Items] | |
Consideration to be paid | 112.0 |
Value of finished goods inventory | 3.5 |
Value of brand extension agreement intangible asset | $ 111.7 |
MARKETING AGREEMENT - Net Commission Earned Under Marketing Agreement (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Marketing Agreement [Line Items] | ||
Contribution expenses | $ (548.8) | $ (311.3) |
Restated Marketing Agreement | ||
Marketing Agreement [Line Items] | ||
Gross commission | 7.7 | 0.0 |
Contribution expenses | (4.5) | (4.5) |
Net commission | 3.2 | (4.5) |
Reimbursements associated with Roundup® marketing agreement | 14.0 | 13.4 |
Total net sales associated with Roundup® marketing agreement | $ 17.2 | $ 8.9 |
DEBT - Senior Notes - 5.250% (Details) - Senior notes - Senior Notes – 5.250% - USD ($) $ in Millions |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
Dec. 15, 2016 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 250.0 | |||
Interest rate of debt (percentage) | 5.25% | 5.25% | 5.25% | 5.25% |
DEBT - Senior Notes - 4.500% (Details) - Senior notes - Senior Notes – 4.500% - USD ($) $ in Millions |
Oct. 22, 2019 |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Proceeds from issuance of unsecured debt | $ 450.0 | |||
Interest rate of debt (percentage) | 4.50% | 4.50% | 4.50% | 4.50% |
DEBT - Senior Notes - 6.000% (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Oct. 23, 2019 |
Jan. 02, 2021 |
Dec. 28, 2019 |
Oct. 13, 2015 |
|
Debt Instrument [Line Items] | ||||
Repayments of senior debt | $ 0.0 | $ 400.0 | ||
Senior Notes – 6.000% | ||||
Debt Instrument [Line Items] | ||||
Repayments of senior debt | $ 412.5 | |||
Repayments of senior debt, accrued and unpaid interest | 0.5 | |||
Repayments of senior debt, redemption premium | 12.0 | |||
Repayments of senior debt, outstanding principal | $ 400.0 | |||
Senior notes | Senior Notes – 6.000% | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt (percentage) | 6.00% | |||
Write-off of unamortized bond issuance costs | $ 3.1 |
DEBT - Receivables Facility (Details) - USD ($) $ in Millions |
Apr. 07, 2017 |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Accounts receivable pledged | $ 151.1 | $ 22.3 | $ 43.3 | |
Master Repurchase And Framework Agreements, The Amendments | ||||
Debt Instrument [Line Items] | ||||
Financing receivable, before allowance for credit loss | $ 400.0 | |||
Line of credit facility, maximum amount outstanding during period | $ 160.0 | |||
Receivables Facility | ||||
Debt Instrument [Line Items] | ||||
Receivables facility borrowings | 136.0 | 39.0 | ||
Receivables facility | ||||
Debt Instrument [Line Items] | ||||
Accounts receivable pledged | $ 151.1 | $ 43.3 |
DEBT - Weighted Average Interest Rate (Details) |
Jan. 02, 2021 |
Dec. 28, 2019 |
---|---|---|
Debt Disclosure [Abstract] | ||
Weighted average interest rate (percentage) | 3.80% | 4.50% |
EQUITY - Additional Information (Details) - USD ($) |
3 Months Ended | 12 Months Ended | 59 Months Ended | 68 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|
Jul. 27, 2020 |
Jul. 30, 2019 |
Jan. 02, 2021 |
Dec. 28, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Mar. 28, 2020 |
Feb. 06, 2020 |
Aug. 03, 2016 |
|
Equity [Abstract] | |||||||||
Authorized repurchase amount | $ 500,000,000.0 | $ 1,000,000,000.0 | $ 750,000,000.0 | ||||||
Share repurchase period | 5 years | ||||||||
Increase in authorized share repurchase authorization | $ 500,000,000.0 | ||||||||
Common shares repurchased (shares) | 200,000 | 0 | 0 | 8,700,000 | |||||
Common shares repurchased | $ 38,000,000.0 | $ 762,800,000 | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Dividends declared (USD per share) | $ 0.62 | $ 0.58 | $ 0.62 | $ 0.58 | |||||
Special Cash Dividend | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Dividends declared (USD per share) | $ 5.00 |
EQUITY - Share-based Awards Granted (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based awards (shares) | 2,282 | 5,042 |
Aggregate fair value at grant dates | $ 0.3 | $ 0.5 |
Restricted stock units | Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based awards (shares) | 1,687 | 4,066 |
Restricted and deferred stock units | Non-Employee Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based awards (shares) | 595 | 976 |
EQUITY - Total Share-based Compensation (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Equity [Abstract] | ||
Share-based compensation | $ 8.2 | $ 7.0 |
Related tax benefit | $ 2.0 | $ 1.7 |
INCOME TAXES (Details) |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate related to continuing operations | 23.90% | 25.00% |
CONTINGENCIES (Details) $ in Millions |
Jan. 02, 2021
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Accrual for environmental actions | $ 3.8 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Additional Information (Details) - USD ($) $ in Millions |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
---|---|---|---|
Not Designated as Hedging Instrument | Currency forward contracts | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative, notional amount | $ 161.5 | $ 160.1 | $ 128.7 |
Designated as Hedging Instruments | Interest rate swap | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative, notional amount | 600.0 | $ 600.0 | $ 850.0 |
Loss related to interest rate swap agreements expected to be reclassified | 6.7 | ||
Designated as Hedging Instruments | Commodity hedging instruments | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain related to commodity hedges expected to be reclassified | $ 1.3 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Outstanding Commodity Contracts (Details) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Jan. 02, 2021
T
lb
gal
|
Dec. 28, 2019
lb
T
gal
|
Sep. 30, 2020
T
lb
gal
|
|
Urea (in tons) | |||
Derivative [Line Items] | |||
Outstanding commodity contracts, mass | T | 40,500 | 45,500 | 76,500 |
Resin (in pounds) | |||
Derivative [Line Items] | |||
Outstanding commodity contracts, mass | lb | 4,000,000 | 11,000,000 | 9,100,000 |
Diesel (in gallons) | |||
Derivative [Line Items] | |||
Outstanding commodity contracts, volume | 4,704,000 | 4,368,000 | 5,838,000 |
Heating Oil (in gallons) | |||
Derivative [Line Items] | |||
Outstanding commodity contracts, volume | 2,100,000 | 1,344,000 | 2,142,000 |
LEASES - Additional Information (Details) $ in Millions |
Jan. 02, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
Expected lease liability on operating leases that are yet to commence | $ 45.3 |
Residual value of leased asset | $ 4.1 |
LEASES - Supplemental Balance Sheet Information Schedule (Details) - USD ($) $ in Millions |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
---|---|---|---|
Leases [Abstract] | |||
Operating lease right-of-use-assets | $ 169.6 | $ 156.0 | $ 129.5 |
Operating lease current lease liabilities | 52.9 | 47.5 | 45.0 |
Operating lease non-current lease liabilities | 122.9 | 113.3 | 88.9 |
Total operating lease liabilities | 175.8 | 160.8 | 133.9 |
Finance lease right-of-use assets | 33.3 | 34.7 | 36.3 |
Finance lease current lease liabilities | 5.2 | 5.2 | 4.5 |
Finance lease non-current lease liabilities | 29.6 | 30.9 | 32.4 |
Total finance lease liabilities | $ 34.8 | $ 36.1 | $ 36.9 |
LEASES - Components of Lease Cost Schedule (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 15.4 | $ 13.1 |
Variable lease cost | 3.1 | 2.3 |
Amortization of right-of-use assets | 1.5 | 0.9 |
Interest on lease liabilities | 0.4 | 0.3 |
Total finance lease cost | 1.9 | 1.2 |
Operating lease amortization of ROU assets | $ 13.3 | $ 11.1 |
LEASES - Supplemental Cash Flow Information and Non-Cash Activity Schedule (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Lease, Cost [Abstract] | ||
Operating cash flows from operating leases, net | $ 13.9 | $ 13.4 |
Operating cash flows from finance leases | 0.4 | 0.3 |
Financing cash flows from finance leases | 1.3 | 0.4 |
Right-of-use assets obtained in exchange for lease obligations, operating leases | 25.6 | 11.0 |
Right-of-use assets obtained in exchange for lease obligations, finance leases | $ 0.0 | $ 11.9 |
LEASES - Weighted-Average Remaining Lease Term and Discount Rate Schedule (Details) |
Jan. 02, 2021 |
---|---|
Leases [Abstract] | |
Operating leases, weighted average remaining term (in years) | 4 years 7 months 6 days |
Finance leases, weighted average remaining term (in years) | 8 years 3 months 18 days |
Operating leases, weighted average discount rate (percent) | 3.70% |
Finance leases, weighted average discount rate (percent) | 4.30% |
LEASES - Maturities of Lease Liabilities by Fiscal Year Schedule (Details) - USD ($) $ in Millions |
Jan. 02, 2021 |
Sep. 30, 2020 |
Dec. 28, 2019 |
---|---|---|---|
OPERATING LEASES | |||
2021 (remainder of the year) | $ 45.0 | ||
2022 | 48.6 | ||
2023 | 33.2 | ||
2024 | 24.8 | ||
2025 | 18.7 | ||
Thereafter | 21.3 | ||
Total lease payments | 191.6 | ||
Less: Imputed interest | (15.8) | ||
Total lease liabilities | 175.8 | $ 160.8 | $ 133.9 |
FINANCE LEASES | |||
2021 (remainder of the year) | 4.9 | ||
2022 | 6.5 | ||
2023 | 6.6 | ||
2024 | 6.6 | ||
2025 | 2.4 | ||
Thereafter | 14.8 | ||
Total lease payments | 41.8 | ||
Less: Imputed interest | (7.0) | ||
Total lease liabilities | $ 34.8 | $ 36.1 | $ 36.9 |
SEGMENT INFORMATION - Net Sales by Geographic Area (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2021 |
Dec. 28, 2019 |
|
Segment Reporting Information [Line Items] | ||
Net sales | $ 748.6 | $ 365.8 |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 680.5 | 320.4 |
International | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 68.1 | $ 45.4 |
SUBSEQUENT EVENTS (Details) - Executive Vice President and Chief Financial Officer |
3 Months Ended | |
---|---|---|
Jan. 05, 2021
USD ($)
numberOfTimes
|
Apr. 03, 2021
USD ($)
|
|
Forecast | ||
Subsequent Event [Line Items] | ||
Compensation charge | $ 3,300,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Continuation of pay, period | 24 months | |
Lump sum payment in lieu of outplacement services | $ 30,000.00 | |
Number of installment of lump sum payments equal to times two of target annual bonus award | numberOfTimes | 2 | |
Percentage of bonus payable following the first anniversary of departure date | 50.00% | |
Percentage of bonus payable following the second anniversary of departure date | 50.00% |
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