May brought sales recovery to Scotts
For the quarter ended June 30, company-wide sales increased 2% to $994.6 million, compared with $973.4 million a year earlier. Net income of $82.9 million was down from $151.9 million in the same quarter last year.
U.S. Consumer increased 1% to $810.9 million from $801.4 million. Sales at Hawthorne, the company’s hydroponics-focused business, increased 2 percent to $74.2 million compared with $72.4 million. Those results include the impact of acquisitions, including the recent purchase of Sunlight Supply. Excluding the impact of acquisitions, Hawthorne sales declined 37 percent during the quarter.
“Our U.S. core business was simply outstanding in May with record results and positive year-over-year consumer purchases nearly every day during the month,” said Jim Hagedorn, chairman and CEO. “The fact that consumer purchases were down 12 percent entering May and were essentially flat versus year-ago levels by the end of June speaks to the resilience of our category and strength of our brands.”
During the quarter, the Company recorded a $17.5 million non-cash impairment charge related to the write-off of previously acquired customer relationship intangible assets due to the acquisition of Sunlight Supply as well as restructuring charges of $12.9 million related to staffing reductions and facility closures associated with Project Catalyst.
“The integration of Sunlight into the Hawthorne operations is moving swiftly and we are already more than halfway to our goal of achieving at least $35 million in synergies by combining our two businesses,” Hagedorn said. “While we still have a lot of work to do to finish the integration, I’m confident that our Hawthorne business will be vastly improved as a result of this transaction and will be uniquely positioned to benefit from the rapidly evolving market place for hydroponic products.”