News Article | April 17, 2017
Brad bends down to inspect one of his medical marijuana plants on the farm. They’ll be planted in the ground in April and harvested the following fall. (Photo: Deleigh Hermes for Yahoo News) NORTHERN CALIFORNIA — Brad and Katherine live a simple life on 120 acres with two dogs, three cats, a goat, some chickens, three alpacas — and just under 2,000 square feet of marijuana plants. Katherine’s grandparents bought the farm more than 50 years ago, and in many ways, she’s leading a life similar to theirs. She and her husband rarely make the half-hour drive down a dirt road to town, instead spending their days gardening, cooking and repairing the house. They turn off the solar electricity system every night, plunging the farmhouse into total darkness. Katherine, 31, never smokes pot — though she does bake medical marijuana dog treats for the arthritic family dog, Jake. Brad spent one recent evening reading a book called “Teaming with Microbes” and examining his latest compost concoction under a microscope. “As soon as you weed the whole garden, you have to start over again,” Katherine said while tending to one of her many vegetable plots in the shadow of giant redwoods on a chilly March morning. She tossed the unwanted plants into a wheelbarrow. Closer to harvest time, Brad sometimes works 16-hour days, picking grasshoppers off his medical marijuana plants late into the night. The young couple, who have asked to be identified by only their first names because of the marijuana industry’s still-precarious legal status, are worried their peaceful life in the redwoods could be turned upside down by the new administration, which has taken a harsher tone against states that have legalized pot. In 1996 California became the first state to legalize the use of marijuana for medical purposes, and a 2016 ballot initiative will allow dispensaries to sell recreational pot starting in 2018. On the campaign trail, Donald Trump said he would defer to the states when it came to legalizing pot and endorsed medical marijuana for all states. But since taking office, both he, through his press secretary, and Attorney General Jeff Sessions have signaled they may crack down on the drug. White House press secretary Sean Spicer said states that have legalized marijuana for recreational use can expect to see “greater enforcement” of federal laws outlawing pot. Sessions said last month he believes pot legalization has led to “violence.” At a Senate hearing last year, Sessions said that “good people don’t smoke marijuana.” That’s news to the people who live in Katherine’s valley, many of whom have been growing weed since the 1960s, albeit quietly. Katherine’s dad, who was a logger, started growing marijuana before she was born, a family secret that no one ever talked about in front of the kids. As American attitudes and state laws changed to be more accepting of marijuana, Katherine’s family business also changed. In the 1970s and ’80s, her family used to “guerilla grow” — placing marijuana plants in the vast forest surrounding their property that were hidden to government helicopters prowling overhead. They hiked out soil and supplies to care for them. Sometimes, law enforcement would beat the odds and find these hidden patches of pot, chop up all the plants and leave a business card behind. Up until a few years ago, the sound of aircraft overhead was enough to send anyone in the area into a panic. “You’d hear a helicopter and your knees would buckle,” Brad recalled. Katherine’s mom and dad are still incredulous that she and her husband have decided to register with the state, which they see as a huge risk though it is a requirement of the new California pot laws. (Her parents, who own a small family restaurant, moved out in 2004 and let Katherine take over the farm.) Since 2010, Katherine and Brad have grown their plants out in the open on their own property. They stay under the 2,000-square-foot limit set by local law and have invited out the Water Board and other bureaucrats to certify their operation. “We made a garden and my parents were like, are you crazy?” Katherine recalls. “So many people are scared to go legal because they’re so used to being secretive.” But these days the cops are no longer the greatest threat to small growers like Katherine. Instead, they worry about a danger that is far more common among entrepreneurs: competition that could put them out of business. As pot’s become increasingly mainstream, large corporations are starting to creep in on the turf of smaller, family-owned farms. It is a problem her parents’ generation never had to deal with, but it beats farming in the shadows, constantly worried about raids and arrests. Katherine’s parents didn’t tell her about the pot until she was 16 years old, when they gradually introduced the subject after she had begun to have suspicions. (In retrospect, one clue was that her parents didn’t seem upset when she ratted out her little brother for smoking weed.) She kept the family business a secret when she first met her husband, Brad, as well, on a trip to a winery in Australia in her early 20s. Brad came to visit her family in California during pot harvest, when the valley turns into a single-minded clipping and drying operation. Migrant workers — or “trimmigrants” — show up to help cut weed for the fall months, and the local garden supply stores stock and quickly sell out of giant vats of clippers. “When Brad first came I was like, here’s some clippers, here’s Mom and Dad,” she joked. One grower in the valley who wished not to be named said she was “shocked” when she first came to the valley during harvest 10 years ago, expecting something seedy. Instead, entire families gathered round, clipping the plants. “It looked like something out of the 1800s in West Virginia,” she said. Brad enthusiastically embraced he family business. In fact, once they married, he took over the pot side of the farm. He focuses on growing medical marijuana high in CBD and low in THC — the agent that makes a person feel high when smoking or ingesting pot. (Only about a quarter of Brad’s plants are recreational marijuana.) The couple makes a modest living that allows them to take a vacation each year and stay out of debt. New cars or fancy clothes are not on the table, and Katherine grows most of their food in the garden. “We don’t spend any money we don’t have,” Katherine says. They’re also careful to diversify, since both are unsure what will happen to the marijuana industry. Brad grows and collects gourmet mushrooms that San Francisco buyers are happy to purchase, and harvests wasabi plants that get shipped to Japan for sale. They both are also considering opening up a restaurant at a local train station. Brad holds a few of the edible mushrooms he grew on the farm in March. (Photo: Deleigh Hermes for Yahoo News) For Brad and Katherine, growing weed is a way to finance a simple country life away from the city — where they can be self-sufficient and free from the pressures of modernity. “It’s something we can do to have this lifestyle and grow our own garden,” Katherine said. In the valley where Brad and Katherine live, many small pot farmers fear Big Business as much as Big Government as a threat to their way of life. One in 5 Americans now live in states where it’s legal to smoke marijuana without a doctor’s note, and the legal cannabis industry is expected to rake in $22 billion by 2021. According to one analysis, about 88 percent of U.S. spending on cannabis is still in the illicit market, meaning the industry would grow at an even faster clip if more states legalize pot. The marijuana industry in Colorado alone created 18,000 full-time jobs in 2015 and sold 21,000 pounds of pot per month. So far, most large corporations have been scared to plunge headfirst into the booming pot industry since it’s still outlawed by the federal government. But analysts predict Big Tobacco and other industries will quickly get into the mix as cannabis becomes more mainstream. Some have started pouring money into the margins of the weed industry. Last year, Scotts Miracle-Gro announced deals worth $400 million investing in garden supplies with a pot focus, and Philip Morris moved into inhaler technology. Katherine and Brad’s biggest concern about legalization is that corporations and celebrity entrepreneurs will take over and price them and other small farmers out of the market. Whoopi Goldberg has a line of weed edibles aimed at easing period cramps. Snoop Dogg is selling clones of marijuana plants. They both think that it’s only a matter of time. But they’re also looking forward to some of the conveniences of legitimacy after years of participating in a black market. Her parents used to sell their product to a man who would smuggle it to Chicago on the Amtrak train. They wouldn’t get paid until he sold it and came back. Now, Brad sells to a medical marijuana dispensary in Oakland, though transactions are still cash-only as banks have been wary of getting involved in activity still illegal on the federal level. “I can’t wait to get a check. I think that would be so cool,” Katherine said. “To get a check and then deposit it.” Pot’s a big industry now, but the valley has attracted eccentrics and freethinkers since the 1960s, when many hippies migrated there after the “Summer of Love.” Some began growing pot as a way to survive, at times clashing with local loggers who were more conservative and wary of the newcomers. “Either you fall in love with the place or you can’t wait get to out of it,” said Mary, an 82-year-old former nun who moved to the valley in 1973. A poet, Mary was making a tincture of Grey Goose vodka and marijuana in her small kitchen on a recent afternoon to help her go to sleep. The valley has a reputation for being inhospitable to strangers, which has helped its pot growers avoid notice and trouble. Tourists and mushroom pickers are warned away from the dirt road, which becomes a muddy mess after the slightest bit of rain. Mary, an 82-year-old former nun, makes herself a tincture of marijuana leaves and Grey Goose vodka, which she says helps her sleep at night. Mary moved to the valley in 1973, and became a poet. (Photo: Deleigh Hermes for Yahoo News) “They think in town that everyone down here is slightly psychotic,” said John, a former film producer who bought a farm in the valley six years ago. A sign on John’s property warned: If you can read this, you’re in range. John grows a strain of recreational marijuana that the dispensaries call “cookies” on a quarter of an acre, and employs about four people per year full time. “It’s expensive,” John says. “Everything about it is expensive.” He jokingly describes himself as “something akin to a liberal prepper,” as in a survivalist prepping for a social or economic collapse, and decided to move his family to a farm to get closer to nature and farther away from society. John’s worried about the rhetoric coming out of the Trump administration around pot, but his chief concern is that the web of regulations surrounding legal pot could put him out of business. “We have goose-steppers in the White House now,” he said. “But who knows? The reality is the bureaucrats on the local level might be worse… These people are allowed to stick their nose into every aspect of your life.” The regulations may drive out smaller farms, which can’t afford the expertise it takes to comply. “It’s becoming so complex that you need attorneys and experts and consultants to get through it, which is going to push out small growers,” John said. It’s another reason that Big Business, with all of its influence and resources, could pose the most significant threat to mom and pop pot farms. If prices dropped much lower than they are today, he believes he would have to get out of the business. “Small farms have been killed across America,” John said, and his might be next. Local farmers are hoping to survive by creating boutique brands that people are willing to pay extra for. “The Bordeaux of cannabis,” as John said. Katherine and Brad hope their area will become the “Napa Valley of weed” and that consumers will start to prefer organically grown pot. Before it was legal, neighbors in the valley used to never talk to each other about their cash crop. Now they swap growing tips, hoping to boost each other and survive. Katherine is often surprised she ended up back on the farm where she grew up, fiercely committed to her quiet way of life. “I didn’t want to have anything to do with it,” she remembers feeling as a young adult. “Then I went out and saw the world and saw how good I had it.” Katherine and Brad tend to their plants on a sunny day last year. Katherine is plucking the plants’ big leaves, which she’ll then dry. The couple sells their marijuana to a medical dispensary that uses it for tinctures to treat various ailments. (Photo: Deleigh Hermes for Yahoo News) Read more from the Yahoo Weed & the American Family series: Americans families defending pot as never before, Yahoo News/Marist Poll finds How Republicans and Democrats in Congress are joining forces to defeat Sessions’ war on weed Cannabis advocate Melissa Etheridge: ‘I’d much rather have a smoke with my grown kids than a drink’ These mothers of suicides don’t think marijuana is harmless ‘Cannabis has made me a better parent’: One mom’s confession
News Article | May 2, 2017
MARYSVILLE, Ohio, May 02, 2017 (GLOBE NEWSWIRE) -- The Scotts Miracle-Gro Company (NYSE:SMG), the world’s leading marketer of branded consumer lawn and garden products, today announced fiscal second quarter results as well as the pending sale of its European and Australian businesses, a major step in its continued execution of ‘Project Focus.’ For the second quarter ended April 1, 2017, company-wide sales declined 3 percent to $1.20 billion due primarily to challenging comparisons versus favorable early spring weather in 2016, when the Company reported record results at the start to the lawn and garden season. Those same challenging comparisons, which the Company anticipated in its planning for the year, resulted in GAAP earnings per share of $2.73 versus $3.64 and Non-GAAP adjusted earnings per share of $2.78 versus $3.00 a year ago. “We’ve had strong momentum over the past several weeks and consumer purchases entering May – historically the peak of the lawn and garden season – are down less than one percent from last year,” said Jim Hagedorn, chairman and chief executive officer. “We expected a difficult comparison through the first half of the year and we are confident in how we are positioned for the balance of the season. We also remain pleased with the continued double-digit growth so far this year in our hydroponics products sold by the Hawthorne Gardening business.” Separately, the Company announced it has received a binding and irrevocable offer for its European and Australian consumer operations from Exponent Private Equity LLP. The proposed transaction, valued at approximately $250 million (USD), is expected to close during the Company’s fiscal fourth quarter, and is subject to prior consultation with the works councils, employee representative bodies and regulatory approval. Depending on the timing of closure, the transaction could result in dilution by up to $0.20 per share in fiscal 2017. “There is no doubt that our International lawn and garden business is the strongest in the marketplace with outstanding brand recognition and a talented and dedicated team of associates,” Hagedorn said. “While this sale is a reflection of our commitment to concentrate more resources on our U.S. business, as we outlined last year in announcing Project Focus, we wanted to make sure we found a partner that would steward these brands, give stability to our associates and provide our shareholders with a fair valuation. We are delighted with the proposed agreement we have reached with Exponent, and we believe it accomplishes all of those goals. We expect this transaction to be seamless to our retail partners, our consumers and our associates.” Second quarter details The Company noted that the presentation of its Non-GAAP financial results has been adjusted from 2016 to conform with current best practices. The “pro-forma” language included last year after the divestiture of Scotts LawnService is now referred to as “Non-GAAP SLS divestiture adjusted income.” This line adjusts for the impact of the divestiture and also excludes impairment, restructuring and other one-time items. The calculation used is the same from year-to-year. For the fiscal second quarter, the Company reported sales of $1.20 billion compared with $1.24 billion for the same period a year ago. The decline was driven primarily by a 7 percent decrease in sales within the U.S. Consumer segment, which were $962.5 million. European consumer sales declined 8 percent to $105.3 million, or 2 percent excluding the impact of foreign exchange. Sales in the “Other” segment increased 50 percent to $135.7 million, driven primarily by acquisitions. “Besides the pure benefit of the acquired growth, Hawthorne had an outstanding quarter as each of our hydroponics businesses grew double digits,” Hagedorn said. “On a comparative basis, our hydroponics portfolio grew 22 percent in the second quarter, bringing year-to-date sales growth to 13 percent.” The GAAP and Non-GAAP adjusted gross margin rates in the quarter were 41.7 percent, down 20 basis points from year-ago levels. Favorable commodities and pricing were offset by acquisitions and negative fixed cost leverage. A continued focus on selling, general and administrative expenses (SG&A) led to a decrease of 2 percent to $197.8 million despite the impact of acquisitions. On a company-wide basis, GAAP income from continuing operations was $165.3 million, or $2.73 per diluted share, compared with $225.8 million, or $3.64 per diluted share, for the second quarter of 2016. Non-GAAP SLS divestiture adjusted income was $168.7 million, or $2.78 per share, compared with $186.6 million, or $3.00 per share. This latter calculation is the basis of the Company’s earnings guidance. Year-to-Date Details Net sales for the first six months of fiscal 2016 increased 1 percent to $1.45 billion. Sales in the U.S. Consumer segment declined 6 percent to $1.09 billion. Sales for Europe Consumer declined 8 percent to $129.7 million, or declined 2 percent excluding the impact of foreign exchange rates. Sales for the Other segment increased 59 percent to $232.6 million. The GAAP and Non-GAAP adjusted gross margin rates for the first six months were 37.7 percent, compared to 37.4 and 37.8 percent, respectively, in the prior year. SG&A increased 1 percent to $316.9 from $314.2 in the prior year. GAAP income from continuing operations was $101.0 million, or $1.65 per diluted share, compared with $146.6 million, or $2.35 per diluted share. Non-GAAP SLS divestiture adjusted income was $111.1 million, or $1.82 per share, compared with $117.4 million, or $1.88 per share. This latter calculation is the basis of the Company’s earnings guidance. International Transaction and ‘Project Focus’ Update The pending sale of the European and Australian businesses is expected to be the last step in the reconfiguration of the company portfolio under ‘Project Focus,’ which was outlined at the start of fiscal 2016. Assuming the sale is completed, the company’s operating margin is expected to improve by approximately 125 basis points, a significant step toward the Company’s stated goal of 18 percent. The transaction is expected to be dilutive to earnings per share up to $0.20 in fiscal 2017. The Company expects to largely offset that dilution in fiscal 2018 by using the cash proceeds of the transaction for acquisitions and share repurchase activities in both 2017 and 2018. “We are extremely pleased with the transaction we’ve reached with Exponent and see it as the best possible outcome for our shareholders,” said Randy Coleman, chief financial officer. “Going forward, more than 95 percent of our revenue and income will be generated in the United States, where our competitive advantages are the strongest and where our ability to improve cash flow and drive shareholder value is the greatest.” Upon completion of the transaction, the Company intends to change its segment reporting structure to include U.S. Consumer, Hawthorne Gardening Company, and “Other,” which will include Canada, Mexico and legacy supply agreements with third parties. The new segments will likely be reported when the Company announces year-end results in early November. Conference Call and Webcast Scheduled for 9:00 a.m. ET Today, May 2 The Company will discuss results during a webcast and conference call today at 9:00 a.m. Eastern Time. Conference call participants should call 877-518-0009 (Conference Code: 6752971). A live webcast of the call will be available on the investor relations section of the Company's website at http://investor.scotts.com. An archive of the webcast, as well as any accompanying financial information regarding any non-GAAP financial measures discussed by the Company during the call, will remain available for at least 12 months. In addition, a replay of the call can be heard by calling 888-203-1112. The replay will be available for 30 days. Cautionary Note Regarding Forward-Looking Statements Statements contained in this press release, other than statements of historical fact, which address activities, events and developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, information regarding the future economic performance and financial condition of the Company, the plans and objectives of the Company’s management, and the Company’s assumptions regarding such performance and plans are “forward-looking statements” within the meaning of the U.S. federal securities laws that are subject to risks and uncertainties. These forward-looking statements generally can be identified as statements that include phrases such as “guidance,” “outlook,” “projected,” “believe,” “target,” “predict,” “estimate,” “forecast,” “strategy,” “may,” “goal,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “should” or other similar words or phrases. Actual results could differ materially from the forward-looking information in this release due to a variety of factors, including, but not limited to: Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Company’s publicly filed quarterly, annual and other reports. The Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments. (1) Basic income (loss) per common share amounts are calculated by dividing income (loss) from continuing operations, income (loss) from discontinued operations and net income (loss) attributable to controlling interest by the weighted average number of common shares outstanding during the period. (2) Diluted income (loss) per common share amounts are calculated by dividing income (loss) from continuing operations, income (loss) from discontinued operations and net income (loss) attributable to controlling interest by the weighted average number of common shares, plus all potential dilutive securities (common stock options, performance shares, performance units, restricted stock and restricted stock units) outstanding during the period. (3) On April 13, 2016, pursuant to the terms of the Contribution and Distribution Agreement, by and among the Company and TruGreen Holding Corporation (“TruGreen Holdings”), the Company completed the contribution of the Scotts LawnService® business (the “SLS Business”) to a newly formed subsidiary of TruGreen Holdings (the “TruGreen Joint Venture”) in exchange for a minority equity interest of 30% in the TruGreen Joint Venture. As a result, effective in its second quarter of fiscal 2016, the Company classified its results of operations for all periods presented to reflect the SLS Business as a discontinued operation and classified the assets and liabilities of the SLS Business as held for sale. The Company’s 30% interest in the TruGreen Joint Venture has been accounted for using the equity method of accounting, with the Company's proportionate share of the TruGreen Joint Venture earnings reflected in the consolidated statements of operations. To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses non-GAAP financial measures. The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in the tables above. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than the Company, limiting the usefulness of those measures for comparative purposes. In addition to GAAP measures, management uses these non-GAAP financial measures to evaluate the Company’s performance, engage in financial and operational planning and determine incentive compensation because it believes that these measures provide additional perspective on and, in some circumstances are more closely correlated to, the performance of the Company’s underlying, ongoing business. Management believes that these non-GAAP financial measures are useful to investors in their assessment of operating performance and the valuation of the Company. In addition, these non-GAAP financial measures address questions routinely received from analysts and investors and, in order to ensure that all investors have access to the same data, management has determined that it is appropriate to make this data available to all investors. Non-GAAP financial measures exclude the impact of certain items (as further described below) and provide supplemental information regarding operating performance. By disclosing these non-GAAP financial measures, management intends to provide investors with a supplemental comparison of operating results and trends for the periods presented. Management believes these measures are also useful to investors as such measures allow investors to evaluate performance using the same metrics that management uses to evaluate past performance and prospects for future performance. Non-GAAP financial measures reflect adjustments based on the following items: The tax effect for each of the items listed above is determined using the tax rate and other tax attributes applicable to the item and the jurisdiction(s) in which the item is recorded. The reconciliations of non-GAAP disclosure items includes the following financial measures that are not calculated in accordance with GAAP and are utilized by management in evaluating the performance of the business, engaging in financial and operational planning, the determination of incentive compensation, and by investors and analysts in evaluating performance of the business: Adjusted gross profit: Gross profit excluding impairment, restructuring and other charges / recoveries. Adjusted income (loss) from operations: Income (loss) from operations excluding impairment, restructuring and other charges / recoveries. Adjusted equity in income (loss) of unconsolidated affiliates: Equity in income (loss) of unconsolidated affiliates excluding TruGreen Joint Venture non-GAAP adjustments. Adjusted income (loss) from continuing operations before income taxes: Income (loss) from continuing operations before income taxes excluding impairment, restructuring and other charges / recoveries, costs related to refinancing and TruGreen Joint Venture non-GAAP adjustments. Adjusted income tax expense (benefit) from continuing operations: Income tax expense (benefit) from continuing operations excluding the tax effect of impairment, restructuring and other charges / recoveries, costs related to refinancing and TruGreen Joint Venture non-GAAP adjustments. Adjusted income (loss) from continuing operations: Income (loss) from continuing operations excluding impairment, restructuring and other charges / recoveries, costs related to refinancing and TruGreen Joint Venture non-GAAP adjustments, each net of tax. Adjusted net income (loss) attributable to controlling interest from continuing operations: Net income (loss) attributable to controlling interest excluding impairment, restructuring and other charges / recoveries, costs related to refinancing, TruGreen Joint Venture non-GAAP adjustments and discontinued operations, each net of tax. Adjusted diluted income (loss) per common share from continuing operations: Diluted income (loss) per common share from continuing operations excluding impairment, restructuring and other charges / recoveries, costs related to refinancing and TruGreen Joint Venture non-GAAP adjustments, each net of tax. SLS Divestiture adjusted income (loss): Net income (loss) from continuing operations excluding impairment, restructuring and other charges / recoveries, costs related to refinancing and TruGreen Joint Venture non-GAAP adjustments, each net of tax. This measure also includes income (loss) from discontinued operations related to the SLS Business; however, excludes the gain on the contribution of the SLS Business to the TruGreen Joint Venture, each net of tax. SLS Divestiture adjusted income (loss) per common share: Diluted net income (loss) per common share excluding impairment, restructuring and other charges / recoveries, costs related to refinancing and TruGreen Joint Venture non-GAAP adjustments, each net of tax. This measure also includes income (loss) from discontinued operations related to the SLS Business; however, excludes the gain on the contribution of the SLS Business to the TruGreen Joint Venture, each net of tax. Adjusted EBITDA: Net income (loss) before interest, taxes, depreciation and amortization as well as certain other items such as the impact of the cumulative effect of changes in accounting, costs associated with debt refinancing and other non-recurring or non-cash items affecting net income (loss). The presentation of adjusted EBITDA is intended to be consistent with the calculation of that measure as required by the Company’s borrowing arrangements, and used to calculate a leverage ratio (maximum of 4.50 at December 31, 2016) and an interest coverage ratio (minimum of 3.00 for the twelve months ended December 31, 2016). For the three and six months ended April 1, 2017, the Company incurred costs of $3.3 million and $4.7 million, respectively, as compared to costs of $1.7 million and $2.6 million for the three and six months ended April 2, 2016, respectively, related to Project Focus transaction activity within the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. The Company also incurred TruGreen Joint Venture non-GAAP adjustments of $2.1 million and $11.7 million for the three and six months ended April 1, 2017, respectively, within the “Equity in loss of unconsolidated affiliates” line in the Condensed Consolidated Statements of Operations. For the three and six months ended April 2, 2016, the Company incurred $1.0 million and $6.4 million, respectively, in costs related to consumer complaints and claims related to the reformulated Bonus® S fertilizer product sold in the southeastern United States during fiscal 2015 within the “Impairment, restructuring and other” and the “Cost of sales—impairment, restructuring and other” lines in the Condensed Consolidated Statements of Operations. Additionally, the Company recorded offsetting insurance reimbursement recoveries of $50.0 million in the second quarter of fiscal 2016 within the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. In this earnings release, the Company presents its outlook for fiscal 2017 non-GAAP adjusted EPS. The Company does not provide a GAAP EPS outlook, which is the most directly comparable GAAP measure to non-GAAP adjusted EPS, because changes in the items that the Company excludes from GAAP EPS to calculate non-GAAP adjusted EPS, described above, can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company’s routine operating activities. Additionally, due to their unpredictability, management does not forecast the excluded items for internal use and therefore cannot create or rely on a GAAP EPS outlook without unreasonable efforts. The timing and amount of any of the excluded items could significantly impact the Company’s GAAP EPS. As a result, the Company does not provide a reconciliation of guidance for non-GAAP adjusted EPS to GAAP EPS, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. (5) In April 2015, the FASB issued an accounting standard update that requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the corresponding debt liability rather than as an asset; however debt issuance costs relating to revolving credit facilities will remain in other assets. The Company adopted this guidance on a retrospective basis effective October 1, 2016. As a result, debt issuance costs totaling $6.3 million and $6.0 million have been presented as a component of the carrying amount of long-term debt in the Condensed Consolidated Balance Sheets as of April 2, 2016 and September 30, 2016, respectively. These amounts were previously reported within other assets.
News Article | April 17, 2017
Expert Joe Washington Shows Your Viewers Innovative Ways to Use NEW Natural Methods to Improve the Yard for Spring Warmer days and shorter nights mean it is time to get out garden tools, tidy up the yard and prepare the home for spring and summer use. In fact, creating a beautiful and comfortable outdoor living space has become a national obsession, according to Joe Washington, best known as the Emmy-winning TV host and master gardener. Just in time to kick off the spring entertaining season, Joe is sharing some affordable ideas to create or rejuvenate a backyard oasis, outdoor living rooms or outdoor kitchens. Washington gave some expert advice to get ready for outside projects. MAKE YARD WORK LESS WORK A lawn mower is the most important tool for the yard and a quality new mower is one with a KOHLER Engine. Two models from Toro and Lawn Boy are both available at The Home Depot and feature the KOHLER XTX Series. The great thing about the KOHLER XTX Series is that the oil never needs to be changed. Just top it off and you are good-to-go for the entire life of the engine! KOHLER Engines are built to last and are loaded with heavy-duty materials like cast-iron cylinder liners for extra durability. When purchasing a mower be sure to look for a KOHLER Engine, like the XTX Series, and kiss oil changes goodbye! For more information visit, power.kohler.com GET A GREAT LOOKING LAWN THIS SEASON As the weather gets warmer, start by getting the lawn in shape. This spring, Scotts® is making lawn care easy with Scotts® Turf Builder® Weed & Feed, which tackles two important projects, feeding and weeding, in one easy step. It is Scotts® most powerful weed and feed and will clear out dandelions and clover while feeding the lawn to build deep roots to crowd out future weeds. To specifically get rid of weeds this spring, try using the new Roundup® for Lawns, it kills weeds without harming your lawn. It features an all-new formula that is designed to kill weeds quickly with homeowners seeing results in as fast as eight hours. Check major retailers, including The Home Depot, for availability locally. For more information visit, www.scotts.com and www.Roundup.com. ONE TIP FOR KEEPING GRASS LOOKING GREEN Water is super important, but not a lot is needed. By using an in-ground sprinkler system, it is estimated that homeowners can save up to 70 percent in outdoor water usage, that is a lot of money. The Rain Bird WiFi Timer works with any in-ground sprinkler system and is designed to take the guess work out of programing the sprinkler system, making it easier than ever. The WiFi Timer’s app has many great features that allows users to customize up to 8 sprinkler zones. It has an Automatic Seasonal Adjust feature that will change your watering schedule and duration based on the season as well as local weather, humidity and temperatures. This reduces water usage by as much as 30 percent, plus homeowners get just the right amount of water, so it keeps their grass looking perfect all summer long. For more information, visit www.rainbird.com
News Article | April 19, 2017
President and CEO David V. Heald commented, "Building shareholder value in a safe and sound manner is our primary goal. Our financial results demonstrate our continued capability to produce exceptional performance for our shareholders and our community. This quarter's record earnings of $1.9 million, is a 25% increase over the same quarter in 2016. We continue to record double-digit growth in all categories of the balance sheet on a year over year basis. This growth has occurred entirely within our local community, which has recognized us as the Best Bank for a fifth consecutive year." Selected financial information is presented in the following table: Loans, Asset Quality & Deposits Total assets grew by $9.5 million to $598 million in the first quarter and by $73 million over the last twelve months. The Bank's asset quality remained exceptional. For the first quarter, gross loans increased by $6.5 million, and year over year increased $46 million, 12% to $421.5 million. Allowance for loan losses of $8.5 million at March 31, 2017 represents a 13% increase over the same period last year. Deposits grew by 2%, $7.9 million since December 31, 2016. Non-Interest Income / Expense and Net Interest Margin A component of the Bank's core business is the origination and sale of loans generated by its top producing SBA Department which results in gains that are included in non-interest income. For the first quarter of 2017, the non-interest income total was $885 thousand which included $229 thousand of gains on loans sold. This represented a decrease in non-interest income of $66 thousand compared to prior quarter, when $333 thousand in gains was recognized, and a decrease of $80 thousand compared to the same period in 2016, which included $420 thousand in gains on loans sold. Non-interest expense for the three-month period ended March 31, 2017, increased 6% or $203 thousand compared to prior quarter but decreased 4% or $160 thousand compared to the same period last year. Net interest income of $6 million for the quarter ended March 31, 2017 exceeded the prior quarter by $396 thousand or 7% and exceeded the first quarter of 2016 by $607 thousand or 11%. The improvement is driven by a continued focus on building high quality earning assets through loan production and the benefit from recent rate increases implemented by the Federal Open Market Committee. Consequently, net interest margin at 4.27% was roughly equivalent to the same period last year but improved 9% compared to 3.93% for the fourth quarter of 2016. Shareholders' Equity Total shareholders' equity was $52.7 million at March 31, 2017, a $6.6 million, 14% increase over March 31, 2016. The value added to our shareholders was due to continued strong earnings. This increase was reduced by the payout of quarterly cash dividends. Common stock cash dividends totaled $110 thousand or $0.05 per share for the quarter ended March 31, 2017. Historically, the Bank has paid sixteen consecutive $0.05 cash dividends totaling over $1.6 million to shareholders. For the three month period ended March 31, 2017, the Bank's return on average equity was 14.61% and return on average assets was 1.29%. The book value per share of Santa Cruz County Bank's common stock at March 31, 2017 was $23.96, up from $21.02 for the same period in 2016. ANNUAL MEETING NOTICE The Bank's Annual Meeting of Shareholders will be May 22, 2017 at the Sesnon House at Cabrillo College, 4:00 p.m. Pacific Daylight Time. NATIONAL, STATE, AND LOCAL RATINGS AND AWARDS OTCQX Best 50: Santa Cruz County Bank was named one of 50 best performing companies on OTCQX based on total return and growth in average daily dollar volume in 2015. Financial Management Consulting (FMC) Group: Santa Cruz County Bank ranked 2nd in overall performance among 185 California banks and ranked 1st (lowest) in non-performing assets for the full year in 2016. The Bank has ranked in FMC's top ten banks in California for the past two years. The Findley Reports, Inc.: Santa Cruz County Bank was named a Super Premier Performing Bank for its 2016 performance. The Bank has received the top ranking of Super Premier by Findley for seven years. Bauer Financial Reports, Inc.: Santa Cruz County Bank rated five star or "Superior" for its financial strength for the quarter ended December 31, 2016. American Banker Magazine: Santa Cruz County Bank ranked 44th out of 684 institutions in American Banker Magazine's "Top Performing 200 Community Banks & Thrifts in the United States" based upon 3-year average return on equity. The Bank has ranked in the Top 200 Community Banks in the United States for three consecutive years. Independent Banker Magazine, published by the ICBA: Santa Cruz County Bank ranked 22nd in its Top Best Performing Member Community Banks for return on average equity. COMMUNITY AWARDS AND RECOGNITION 2017: Second Harvest Food Bank of Santa Cruz County "Big Step Award" for the 2016 Holiday Food Drive. 2016: United Way of Santa Cruz County "Corporate Spirit Award" for outstanding support. 2017, 2016, 2015, 2014, 2013: Voted "Best Bank" by the readers of Good Times, a weekly publication with distribution throughout Santa Cruz County. 2017, 2016, 2015: Voted "Best Bank" by the readers of Santa Cruz Sentinel, a daily publication with distribution throughout Santa Cruz County. 2013: Volunteer Center of Santa Cruz County "Be the Difference" Business Award for leadership and volunteerism. Santa Cruz County Bank, founded in 2004, is a locally owned and operated community bank with offices located in Aptos, Capitola, Santa Cruz, Scotts Valley and Watsonville. The bank offers a variety of competitive deposit and lending solutions for businesses and individuals; including business loans, lines of credit, commercial real estate financing, agricultural loans, SBA and USDA government guaranteed loans, credit cards, merchant services, remote deposit capture, mobile and online banking, bill payment, and cash management. For the past nine years, the Bank's SBA Department has been recognized as a top SBA lender in Santa Cruz County. Santa Cruz County Bank is a top USDA lender in the state of California. Santa Cruz County Bank stock is publicly traded on the OTC marketplace under the stock symbol SCZC. Stock purchase orders may be placed through a brokerage firm or one of the Market Makers listed in the Investor Relations section of the bank's website. For more information about Santa Cruz County Bank, please visit our website www.sccountybank.com. This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Bank is conducting its operations, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/santa-cruz-county-bank-reports-record-earnings-for-the-first-quarter-ended-march-31-2017-300441567.html
Evans H.C.,CAB International |
Seier M.K.,CAB International |
Derby J.-A.,Agriculture and Agri Food Canada |
Falk S.,Scotts Company |
Bailey K.L.,Agriculture and Agri Food Canada
Weed Research | Year: 2013
Summary: Cirsium arvense (Asteraceae) is known as creeping thistle in its native range in the UK and Canada thistle in its invasive North American range. Recently, the fungus Phoma macrostoma was registered in Canada as a bioherbicide in turfgrass, where it causes severe chlorosis (White Tip disease) and death of C. arvense and other broadleaved weeds. It was hypothesised that the disease originated in the UK on its thistle host and, therefore, that fungal isolates from both countries should be biologically and genetically similar. Twenty-six strains in the genus Phoma- isolated during surveys in the UK - were compared morphologically with the type culture of P. macrostoma, tested for bioherbicidal activity using the inoculum mat bioassay and genetically screened with bioherbicide-specific primers. White tip disease was found to be restricted to the eastern and southern counties of England. Phoma macrostoma was isolated consistently from diseased bleached tissues. Bioherbicidal isolates of P. macrostoma occupy a unique clade, which is phylogenetically distinct but morphologically indistinguishable from the type culture. Most isolates from the UK had the same bioherbicidal activity and similar genetic make-up as strain SRC 94-44B, the active ingredient in the registered Canadian product. The origin of all bioherbicidal strains found to date has a clear presence in both Canada and the UK, with strong genetic similarities, supporting the view of a common ancestry. Thus, on the evidence presented, the 'white tip' clade of P. macrostoma evolved in southern England. Therefore, the bioherbicide based on strain SRC 94-44B should also be eligible for registration in the UK, based on the pest risk assessment data already available. © 2012 European Weed Research Society.
Jeong K.,Scotts Company |
Nelson P.V.,North Carolina State University |
Frantz J.M.,U.S. Department of Agriculture
Acta Horticulturae | Year: 2012
The Rhizon soil moisture sampler (RS) provides a non-destructive method for extracting soil solution. The RS with a 2.5 mm outer diameter draws solution from a small area and raises the question whether it can represent the whole pot. Also, when placed diagonally or vertically in a pot more solution would be expected to be collected from the base relative to the top of the pot due to lower water container capacity at the top. When 5 RS samplers were placed horizontally at 1, 3, 5, 7, and 9 cm above the bottom of 16.5 cm diameter, 10 cm substrate depth, 1.8 L volume pots containing lettuce plants, the following average gradients from bottom to top of pot were found: EC 1.1-1.8 dS·m-1, pH 6.3-5.6, and relative rate of solution extracted 1:0.32. When the solution from a Rhizon sampler oriented diagonally (D-RS) from top to bottom of the pot was compared to the five horizontally and equally spaced Rhizon samplers (H-RS), pH level in the D-RS extract was equivalent to that in the lower 20% of the substrate column (H-RS1). EC in the lower three H-RS and D-RS extracts were within standard error of each other. A comparison of extracts from DRS, pour-through (PT), and saturated media extract (SME) showed equivalent EC levels for the D-RS (1.21) and PT (1.26) but lower values for SME (0.69). The pH levels were significantly different for all three methods and were 6.6, 6.2, and 5.5 for the PT, D-RS, and SME methods, respectively. Overall, separate EC and pH standards are required for interpreting SME results compared to the other two methods which is reasonable because SME alters the solution by dilution whereas the other two do not. Similar EC standards can be used for PT and D-RS but pH levels can be lower in the D-RS procedure. Data indicated that the D-RS drew solution primarily from its lower end, far in excess of the proportion suggested by the five H-RSs.
News Article | November 23, 2016
Market Research Report on Pest Control Services market 2016 is a professional and in-depth study on the current state of the Pest Control Services worldwide. First of all,"Global Pest Control Services Market 2016" report provides a basic overview of the Pest Control Services industry including definitions, classifications, applications and Pest Control Services industry chain structure. The analysis is provided for the Pest Control Services international market including development history, Pest Control Services industry competitive landscape analysis. This report "Worldwide Pest Control Services Market 2016" also states import/export, supply and consumption figures and Pest Control Services market cost, price, revenue and Pest Control Services market's gross margin by regions (United States, EU, China and Japan), as well as other regions can be added in Pest Control Services Market area. Major Manufacturers are covered in this research report are Orkin Terminix Pest Control Services, Inc. Louisiana Pest Control Western Pest Services Scotts Company Gafford ABC Home & Commercial Services OPC Services General Pest Control This report studies Pest Control Services in Global market, especially in North America, Europe, China, Japan, Southeast Asia and India, focuses on top manufacturers in global market, with sales, price, revenue and market share. Then, the report focuses on worldwide Pest Control Services market key players with information such as company profiles with product picture as well as specification. Related information to Pest Control Services market- capacity, production, price, cost, revenue and contact information. Aslo includes Pest Control Services industry's - Upstream raw materials, equipment and downstream consumers analysis is also carried out. What’s more, the Pest Control Services market development trends and Pest Control Services industry marketing channels are analyzed. Finally, "Worldwide Pest Control Services Market" Analysis- feasibility of new investment projects is assessed, and overall research conclusions are offered.
Boase M.R.,The New Zealand Institute for Plant and Food Research Ltd |
Harriman R.W.,Scotts Company |
Smith F.D.,Scotts Company |
Deroles S.C.,The New Zealand Institute for Plant and Food Research Ltd
In Vitro Cellular and Developmental Biology - Plant | Year: 2012
A genetic transformation protocol was developed using the transfer of a synthetic CP4 EPSPS transgene, as a conditional positive selectable marker, into commercially relevant zonal pelargoniums using an Agrobacterium tumefaciens strain in combination with a novel step-down glyphosate selection system. The transformation efficiency based on independent T-DNA integration events averaged 1. 9 % over 10 experiments. Some 273 independent transformants were produced within an average time of 6 mo from explant inoculation with Agrobacterium to plantlet recovery. For plantlet recovery, three aromatic amino acids were incorporated into the rooting medium to ameliorate the accumulative effects of glyphosate selection. The T-DNA also contained a mutant ethylene receptor (etr1-1) cDNA from Arabidopsis thaliana, under control of the petunia flower-specific, floral-binding protein promoter, to confer ethylene insensitivity. However, delayed flower senescence was not obtained. The transformation protocol provides a reliable method to add herbicide resistance and other traits to zonal pelargonium. © 2012 The Society for In Vitro Biology.
Barnes J.,North Carolina State University |
Nelson P.,North Carolina State University |
Fonteno W.C.,North Carolina State University |
Whipker B.,North Carolina State University |
Jeong K.-Y.,Scotts Company
Acta Horticulturae | Year: 2013
Addition of mature dairy manure compost (DMC) to peat-moss based root substrate adversely increases bulk density (Db) while enhancing water sorption of the substrate. Substrate manufacturers typically raise the weight-based water content of soilless root substrate to 50% to ensure adequate wettability during crop establishment. This study investigated the possibility of lowering the percentage of water in substrate containing DMC in order to reduce Db without adversely affecting wettability. DMC was incorporated into a 3 sphagnum peat moss : 1 perlite (v:v) formula as a partial substitution for peat moss at 0, 7.5, 15, 22.5, and 30% by volume of the substrate. The water content of each of the five formulations was adjusted to approximately 10, 20, 30, 40, and 50% by weight. Wettability curves were generated to assess the impact of DMC content and initial water content on substrate wettability. The wettability level in the 0% DMC substrate at the industry norm water content of 50% was achieved in 7.5, 15, 22.5, and 30% DMC substrates at water contents of 40, 30, 20, and 20%, respectively. Based on previous research, 15% DMC is a desirable level for plant growth. The Db of 0 and 15% DMC mixes at 50% water content are 130 and 232 g/L (a Db gain of 78%), respectively. However, our research indicated that only 30% water is required in the 15% DMC mix for it to equal the wettability in the 0% DMC-50% water mix. This reduction lowered the Db of the 15% DMC-30% H 2O mix to 180 g/L (a 39% Db gain), which cuts the Db gain due to the DMC addition in half and lowers the handling and transportation costs of this mix; this scenario is best for the industry.