All posts by mickeybarb@charter.net

Three Russian Fertilizer Company Heads on E.U.’s Latest Sanctions List

Europe, Featured, News, Russia

In its latest move to ratchet up the pressure on Moscow following Russia’s invasion of Ukraine, the European Union (E.U.) on March 9 expanded its list of sanctioned individuals to include the heads of three of the country’s biggest fertilizer companies. They are among 14 wealthy Russian individuals and some of their family members, and more than 140 members of the upper house of the Russian Parliament.

They include Andrey Melnichenko, the founder and controlling shareholder of Zug, Switzerland-based EuroChem Group AG; Uralchem JSC owner and CEO Dmitry Mazepin, who is also the Deputy Chairman of Uralkali PJSC and, via Uralchem, Uralkali’s owner; and Andrey A. Gurvey, the CEO of PhosAgro PJSC.

Gurvey on March 10 resigned his position as CEO, and PhosAgro’s Board of Directors appointed Mikhail Rybnikov in his place. Xavier Rolet is also stepping down as PhosAgro’s Chairman. Rolet, a former London Stock Exchange Group CEO, has also resigned from his PhosAgro Board membership.

Andrey A. Guryev and his father, Andrey G. Guryev, who was founder of PhosAgro and whose family holds a controlling stake in the company, have also resigned from their PhosAgro Board memberships.

Following his inclusion on the E.U. sanctions list, Andrey Melnichenko has ceased to be the beneficiary of the EuroChem Group and has exited its Board of Directors, according to an Interfax report, citing a EuroChem statement.

Melnichenko had previously controlled 90 percent of EuroChem Group AG via Cyprus-based AIM Capital SE. The remaining 10 percent interest comprises treasury shares. The statement does not specify how the company’s ownership would now be structured.

Limited Liability Company Uralchem Fundamental Chemical Co. (Uralchem Fundamentals LLC) announced late on March 10 that Dmitry Mazepin, who previously held a 100 percent stake in the company, has sold a 52 percent controlling stake from his holding. Mazepin thus now has a 48 percent stake in the company, according to the statement.

Mazepin also resigned from the position of the CEO of Uralchem JSC, which is a wholly-owned subsidiary Uralchem Fundamentals LLC. Dmitry Konyaev, who previously chaired the Board of Directors of Uralchem JSC, was appointed the new CEO of Uralchem JSC. Replacing Konyaev as the Board Chair at Uralchem JSC is Dimitry Tatyanin, who previously was its Deputy Chairman of the Board.

Uralchem Fundamentals LLC owns several of the largest chemical companies in Russia: Uralchem JSC (the parent company of Uralkali PJSC), TogliattiAzot PJSC, and GaloPolymer JSC.

Mazepin’s son, Nikita, the Formula One driver, was also included in this latest E.U. sanctions list. Nikita Mazepin’s contract was recently terminated with the Haas F1 Team, according to the E.U. Journal.

Uralkali, the title sponsor of Uralkali Haas F1 team, announced on March 9 that it had been advised by the team of their unilateral termination of the sponsorship agreement with the company due to the current geopolitical situation.

Uralkali said it views the team’s decision as “unreasonable,” and believes that sports should always be free of politics and pressure from external factors. Consequently, Uralkali said it intends to protect its interests in line with applicable legal procedures and reserves its rights to initiate judicial proceedings, claim damages, and seek repayment of the significant amounts Uralkali had paid for the 2022 Formula One season.

The E.U. this week has also moved to cut off three Belarusian banks from the SWIFT international payments system: JSC Belagroprom Bank, Bank Dabrabyt, and the Development Bank of the Republic of Belarus.

Borealis Declines EuroChem’s Offer for the Acquisition of its Nitrogen Business

Austria, Europe, News, News Briefs, Nitrogen

Polyolefins and fertilizers major Borealis AG, Vienna, said on March 10 it has decided to decline the binding offer it received from EuroChem Group AG on Feb. 2 for the acquisition of Borealis’ nitrogen business. The two had been in exclusive negotiations (GM Feb. 4, p. 1).

“We have closely assessed the most recent developments around the war in the Ukraine and sanctions that have been put in place,” Borealis’ CEO Thomas Gangl said. “As a consequence, we have decided to decline EuroChem’s offer for the acquisition of Borealis’ nitrogen business, including fertilizer, melamine, and technical nitrogen products.”

Borealis said it will now consider various options regarding the future of its nitrogen business.

The EuroChem offer valued the Borealis Nitrogen business on an enterprise value basis at €455 million (approximately $500 million at current exchange rates).

That Borealis and its parent company, Austrian oil and gas company OMV AG, which owns a 75 percent stake in Borealis, would pull the plug on negotiations with EuroChem had been anticipated after Russia invaded Ukraine.

Zug, Switzerland-based EuroChem until March 10 was controlled by Russian billionaire Andrey Melnichenko, who was put on the E.U. sanctions list on March 9 (see story, page one).

There also had been doubts whether Austrian regulatory approval for any deal with EuroChem would be secured in the light of sanctions against Russia (GM March 4, p. 29).

Borealis said on March 11 it is re-evaluating its business transactions with Russia in compliance with all applicable laws, including, where relevant, U.S., U.K., and E.U. sanctions.

“For the time being, we have decided to stop sales to Russia and Belarus. Sales volumes are being redirected to Western Europe,” the company said.

“We are implementing measures required to ensure the stability in procurement of materials for Borealis’ production sites. We are phasing out sourcing from Russia and Belarus, shifting to sources from the West.”

Last weekend, Austrian oil and gas company OMV AG, which owns a 75 percent controlling stake in Borealis, had said in light of the latest developments in Ukraine, it is re-evaluating its engagement in Russia.

“While Russia has been one of the core regions in OMV’s Exploration & Production portfolio, the Executive Board has taken the decision not to pursue any future investments in Russia,” the company said on March 5.

OMV already has ended all negotiations with Russian state-owned gas company Gazprom PJSC about the potential purchase of a 24.98 percent stake in blocks 4A/5A of the Achimov-Formation in Russia’s Urengoy gas and condensate field (GM March 4, p. 29). It said it is now initiating strategic review of its 24.99 percent interest in Yuzhno Russkoye and all options, including possibilities to divest or exit.

OMV is also reviewing its involvement in the Nord Stream 2 pipeline, which is 50 percent owned by Gazprom. The pipeline, which runs under the Baltic Sea from Russia to Germany and would handle Russian gas, was completed last September, but has not secured an operating licence. Following Russia’s invasion of Ukraine, Germany suspended its certification of the pipeline (GM Feb. 25, p. 1).

OMV said it takes its responsibility to supply Europe and Austria with natural gas “seriously.”

“Households, institutions, and the industrial sector rely on dependable gas supplies, including gas from Russia, which is supplied under longstanding contracts,” the company said, adding that it is working to identify and develop additional sources of supply.

Intrepid Moves to Black for 4Q, FY21; Adds Extra Trio Shift, Eyes More Production

Earnings, News, Potash, Specialty

Higher prices and good demand helped Intrepid Potash Inc., Denver, move into the plus column for the fourth-quarter and year-ending Dec. 31, 2021. Fourth-quarter adjusted net income was $8 million ($0.60 per diluted share), up from the year-ago loss of $520,000, while full-year was $21.8 million ($1.63 per share), up from 2020’s loss of $19.3 million.

“The fourth quarter was highlighted by solid cash flow and a significant increase in EBITDA compared to the prior period led by the strong commodity environment and rising fertilizer prices,” said Bob Jornayvaz, Intrepid’s Executive Chairman and CEO. “Pricing and demand strength have continued into the first quarter of 2022, and we expect another quarter of increasing realized prices. The fertilizer and agriculture market outlook remains very strong, and we are poised to drive significant increases in bottom line-results in 2022.”

The uptick came despite a decrease in potash production due to wet, humid, and cooler weather at the HB facility in Carlsbad. As a result, the company recorded fourth-quarter abnormal production costs of $2.4 million and full-year at $6 million.

“We are coming off nearly 18 months of strong potash demand, which, combined with our production shortfalls, has left us with lower inventory levels and less production available for sale than in the first half of 2021,” Matthew Preston, Vice President of Finance told analysts on March 8. “We expect first-half 2022 potash sales of approximately 130-140,000 tons, split evenly between the first and second quarters.” First-half 2021 potash production was 164,000 st.

“Like many industries, we are experiencing some logistical delays with truck availability, which could push sometimes into the second quarter, but will not lower our overall first half sales,” he added. “Product inventory and production are expected to return to historic averages in the second half of the year, which should drive an improvement in our per ton potash cost of goods sold, despite general inflationary pressures.”

“Overall, the outlook in the potash market has arguably never been better,” Jornayvaz told analysts. He added that the company is looking to increase production, including increased solution mining at the HB mine and a new cavern at Moab, as well as bringing on an additional crew at the East Trio facility.

The company added that what is going on globally should provide a good floor for potash prices, and they should be very stable for 12-18 months.

“It obviously works to our benefit that we’ve got fewer tons to supply,” said Jornayvaz. “The domestic market is extremely tight. And so if you look at the threat of the Canadian rail strike, if that were to happen, the U.S. market would become much, much tighter.

“But I would say that the domestic market is a very tight market, and so the price increases that we’ve announced, we’re able to achieve all of them, with very little pushback from customers,” he continued. He added that while potash prices still remain in the 3-5 percent of input cost, farmers are making plenty of money, and the potash that they can find they can surely afford to buy. He said Intrepid’s premium and granular products are on total allocation.

Full-year Trio production was up for the year, though it was off for the fourth quarter. The company said it recently added an extra production shift at its East Trio mine to help it add some much-needed production to meet strong demand and positive outlook for specialty fertilizer through the first half.

“Oilfield activity remains strong in the Delaware Basin, with water volumes and other oilfield services revenue increasing, although segment results have lagged due to increased water purchases and lease, contract labor, and rental expenses,” Jornayvaz added. “We continue to see good demand for water across our South Ranch and expect to benefit from activity closer to our infrastructure during 2022.”

He told analysts that the company has sold out its near-term water book, and is working with third-party providers to source more water. He said due to higher oil prices, oilfield activity quickly picked up.

The company also announced a joint feasibility study alongside the New Mexico Water Consortium and the New Mexico Environment Department to evaluate the potential of using treated produced water from oil and gas operations as injectate for the HB Solar Solution Mine. The mine currently utilizes naturally occurring salt brine and groundwater as permitted injectates.

This green pilot project is preliminarily scheduled to begin testing as early as the third-quarter 2022. The company said if successful, the project will aid in conserving existing groundwater sources in addition to advancing and promoting Intrepid’s Environment, Social, and Governance (ESG) goals.

In other news, in February the Board of Directors approved a $35 million share repurchase program.

Fourth-quarter and full-year net income both surged based on the release of $215.9 million of valuation allowance for deferred tax assets. Fourth-quarter net income was $223.9 million ($16.66 per diluted share) on sales of $71.8 million, compared to the year-ago loss of $711,000 ($0.05 per share) and $48.4 million, respectively.

Fourth-quarter gross margin and operating income were $21.8 million and $15 million, compared to the year-ago $5.8 million and loss of $507 million, respectively. Adjusted EBITDA was $24.8 million, up from the year-ago $9.9 million.

Full-year net income was $249.8 million ($18.66 per share) on sales of $270.3 million, up from the year-ago loss of $27.1 million ($2.09 per share) and $196.9 million, respectively. Gross margin and operating income were $55.8 million and $32.3 million, up from the year-ago $10.5 million and loss of $23.2 million, respectively. Adjusted EBITDA was $67.6 million, up from $20.8 million.

Potash 4Q-21 4Q-20 YTD-21 YTD-20
Sales (000 st) 38,807 27,556 151,751 108,060
Gross Margin ($000) 12,516 3,847 35,845 11,551
Sales Volume (000 st) 61 78 331 317
Production Vol. (000 st) 86 106 287 308
Avg Realized Price ($/st) 504 248 353 250
Trio 4Q-21 4Q-20 YTD-21 YTD-20
Sales (000 st) 24,612 15,565 96,058 70,287
Gross Margin ($000) 7,913 (375) 16,442 (8,505)
Sales Volume (000 st) 48 50 239 230
Production Vol. (000 st) 53 58 228 213
Avg Realized Price ($/st) 388 188 295 195
Oilfield Solutions 4Q-21 4Q-20 YTD-21 YTD-20
Sales (000 st) 8,479 5,390 22,770 18,929
Gross Margin ($000) 1,420 2,342 3,477 7,484

Winston Weaver Faces More Lawsuits from Fire

News, News Briefs, Southeast

The Winston Weaver Co. in Winston-Salem, N.C., is facing three lawsuits stemming from the Jan. 31 fire that destroyed the 65,423-square-foot facility and prompted a three-day evacuation order for some 6,500 nearby residents due to concerns about a possible explosion triggered by ammonium nitrate (GM Feb. 4, p. 1).

The latest suit is a class action complaint filed by the Law Offices of James Scott Farrin in Forsyth County Superior Court, and is the second class-action suit against the company, according to the Winston-Salem Journal.

The suit claims that lead plaintiff Karen Prudencio was forced to leave her residence on the morning of Feb. 1, and was exposed to “toxic chemicals and incurred evacuation expenses, loss of use and enjoyment of her home, and lost wages.” The suit states that Prudencio and other neighboring residents and businesses “experienced significant inconveniences, such as loss of income, business disruption, and professional cleaning expenses associated with soot removal.”

The lawsuit points to previous fires at the fertilizer plant, as well as to Winston Weaver’s “alleged failure to properly store hazardous materials, correctly repair and maintain its facility, and submit legally-required forms regarding the amount and types of chemicals onsite, as evidence of its negligence and intentional disregard for safety.”

“People impacted by the terrifying Weaver Fertilizer Plant fire deserve justice,” said lead attorney Gary Jackson. “No company can be allowed to displace an entire community.”

Attorneys for the Crumley Roberts law firm filed an earlier class-action suit on Feb. 10 in Forsyth County Superior Court on behalf of two residents who also incurred numerous expenses when they evacuated their homes because of the fire, the Winston-Salem Journal reported. The firm also sued the company on behalf of another resident, but that is not a class action.

Fire investigators have yet to report the suspected cause of the fire. At a press conference on Feb. 9, Winston-Salem Fire Chief Trey Mayo said investigators “have an idea of where we believe the fire began,” but he provided no further details, saying he did not want to “corrupt” the ongoing investigation (GM Feb. 11, p. 1).

Negotiations Underway to Avert CP Rail Strike; Fertilizer, Ag Groups Urge Government Action

Canada, Featured, News

Representatives of the Teamsters Canada Rail Conference (TCRC) and Canadian Pacific (CP) Railway Ltd. were reportedly meeting with a federally-appointed mediator/conciliator on March 11-16 to try to hammer out a new labor agreement and avoid a strike at the railroad.

TCRC represents more than 3,000 union members who work as engineers, conductors, and train and yard employees for CP. TCRC served a notice of dispute to the Federal Labor Minister in February, citing issues related to wages, benefits, and pensions (GM Feb. 25, p. 1). Some 96.7 percent of TCRC members then voted in favor of a strike action (GM March 4, p. 1).

The threat of a strike on the cusp of the spring planting season, and the impact it could have on the shipment of fertilizer and other agricultural products, has prompted an appeal from trade groups and fertilizer industry representatives for government officials to immediately take action.

Railroad trade publications are already noting a surge in volumes and delays on CP’s rail system as shippers resort to “frontloading” cargo on the railroad ahead of a potential work stoppage. Fertilizer Canada told Green Markets that TCRC could give a 72-hour strike notice as soon as midnight on March 13, with a work stoppage taking effect at midnight on March 16.

“To assist in the flow of fertilizer products to domestic and international markets, the Canadian government needs to ensure that domestic supply of fertilizer is moving freely and there is unimpeded trade and cross-border mobility between Canada and the U.S., which is essential, particularly for the fertilizer sector, due to the highly integrated nature of the supply chains.,” said Karen Proud, Fertilizer Canada President and CEO.

In a recent LinkedIn post, GreenPoint Ag LLC President and CEO Jeff Blair described the potential strike as “a food security and national security issue for both Canada and the U.S.” Without CP Rail functioning at full capacity, Blair said Canadian and American farmers face “the very real possibility” of going without some of their potash and other crop nutrients this spring.

“Without Russia and the Ukraine to potentially supply the world with grains critical to feeding their populations, the Canadian and American farmers are best positioned to supply the extra grains, but only if they can grow them,” Blair said. “Which is where the potash – and the Canadian Pacific railroad that delivers it – comes in.”

In a March 7 letter to President Joe Biden, The Fertilizer Institute (TFI), the Agricultural Retailers Association (ARA), and 19 other members of the Agricultural Transportation Working Group requested that the administration work with the Canadian government to avert a major railway strike and to rescind the cross-border vaccine mandate for workers moving essential commerce.

“A CP railway strike would severely curtail fertilizer supply and shipments into the U.S. and would happen at the worst possible time as farmers are planting their 2022 crops,” the letter said, describing the potential impact as “devastating” for the fertilizer industry and North American farmers. “Given the fragility of current supply chains, urgent attention and engagement with all parties is needed to avert a potential strike.”

The letter said a strike would significantly impact grain movement on both sides of the border for livestock feeding and processing operations, and would also halt the CP route that carries U.S grain to the Pacific Northwest export market. Grain is CP’s largest line of business, and approximately 10-15 percent of CP’s business is fertilizer, the working group noted.

“Fertilizer markets, which are largely influenced by global factors, are already experiencing severe disruptions, which are impacting fertilizer supply, demand, and costs,” the letter said. “Impeding farmers’ ability to access critical fertilizer inputs due to supply chain disruptions will have long-term consequences in terms of costs to farmers, and harm domestic and international food security. This will make inflation worse and drive up the cost and availability of food.”

The letter also urged the U.S. and Canadian governments to modify or rescind their mandates blocking unvaccinated foreign nationals, including truck drivers, from crossing the border. Canada’s vaccine mandate requires U.S. truckers to show proof of vaccination before entering the country, and the U.S. mandate requires foreign cross-border truckers to be vaccinated. The U.S. Department of Homeland Security has said its border policy will remain in effect through April 21.

“The border policy has raised prices because it has constrained trucking capacity and made truck movements more expensive and less timely,” the letter said, noting that more than one million short tons of fertilizer cross the U.S.-Canada border by truck each year, with March, April, and May serving as the peak months for fertilizer applications across the northern states.

“Given the urgency of several supply-chain challenges, we urge revision or rescission of the border policy prior to April 21,” the letter said.

Belarus Signs Potash Export Decree, Claims Russian Ports Ready in Two Years

Belarus, News, News Briefs, Potash, Russia

Belarus this week claimed to have signed a decree “on export” related to potash, according to reports citing the pravo.by portal. However, no further details were outlined, as according to pravo.by, the text of two out of the six paragraphs of the document are “for official use” and not disclosed.

References to JSC Belarusian Potash Co. (BPC), the marketer and exporter of Belarusian potash, and the regulation of exports of potash fertilizers, are made in the document.

Belarus’ government has been instructed to take measures to implement the decree, but the exact meaning of the document is unclear.

Reports were circulating last month that Indian Potash Ltd. (IPL), India’s biggest potash importer, was in talks to buy 1 million mt of potash from Belarus in 2022 by paying with rupees, according to a Reuters report, citing two unidentified Indian officials (GM Feb. 4, p. 1). Sanctions imposed by the U.S. and European Union (E.U.) on Belarus restrict Belarus’ potash trade in U.S. dollars and euros.

IPL late last month reportedly asked BPC to disclose which ports it will use for shipments before it would sign a new potash supply deal with the company this year, according to a Bloomberg report, citing an unnamed source familiar with the matter (GM Feb. 25, p. 31).

India was one of the countries to abstain at the United Nations Security Council and the General Assembly from votes to deplore Russia’s invasion of Ukraine.

Meanwhile, Belarus claims it will have its own ports on the Russian Coast of the Baltic Sea in two years, according to a report by Belarusian state news agency BelTA, quoting Belarus President Alexander Lukashenko on March 5.

Lukashenko said the ports would be built there in two years, and Belarus will handle its cargoes through “our ports there.”

He last month claimed Belarus was implementing “a project to increase port capacities for the transshipment of potash in Russia,” and intended to “complete it as soon as possible” (GM Feb. 11, p. 1).

Brazil to Propose Fertilizer Be Excluded from Russian Sanctions

Brazil, News, News Briefs, Russia, South America

Fertilizer should be exempted from sanctions imposed on Russia in order to support global food production and control food inflation, Brazil Agriculture Minister Tereza Cristina said on March 10, according to a Bloomberg report. The minister will present the matter for discussion at a meeting of the UN’s Food and Agriculture Organization (FAO) on March 16.

Unilateral sanctions on Russian fertilizer exports represent a threat to food security as they raise production costs and food prices as a consequence, Cristina said in an emailed statement.

The proposal has the support of Argentina, Bolivia, Chile, Paraguay, and Uruguay – nations that form a regional council on agriculture and were at a meeting with Cristina on March 10. She also met with representatives from Arab nations seeking to boost fertilizer supplies to Brazil, the ministry said separately. Arab nations account for 26 percent of Brazil’s fertilizer imports

Brazil’s government has also been working to improve logistics for fertilizer imports in the short term, she said.

Koch Completes Enid Ammonia Truck Upgrade

Ammonia, News, News Briefs, Southern Plains

Koch Fertilizer, Wichita, reported that it has completed construction of the Enid, Okla., ammonia truck loading facility upgrade. It will be open for loading this spring season, as early as March 15.

The facility has been relocated and upgraded as part of the latest Koch Fertilizer Enid expansion project, with the objective to improve truck loading reliability and efficiency, but also to create a better experience for truck drivers.

“By relocating the racks, truck drivers have easier access to the loading facility and will see improved loading speed with four dedicated racks and upgraded equipment,” said Mike Kleis, Senior Vice President of Operations for Koch Fertilizer Enid and Koch Methanol St. James.

The Enid project builds on other investments in the past five years to reduce logistics constraints from its facilities, including ammonia loading facility improvements at the Beatrice and Fort Dodge plants. Other major upgrades at Enid, as well as Fort Dodge, Iowa, are due later this year. An ammonium thiosulfate terminal at Fort Dodge and upgrades at Beatrice, Neb., were completed in 2021 (GM Feb. 11, p. 1).

Michigan Potash Touts Ability to Replace Potash Imports from Russia, Belarus

News, News Briefs, Potash

Michigan Potash & Salt Co. LLC (MPSC), Evart, Mich., said on March 8 that American farmers could replace Russian fertilizer imports with long-term domestic supply produced in Michigan within the next 3.5 years. “In the face of the Russian invasion of Ukraine, the U.S. must recognize its dependency on Russian and Belarusian potash, which is a critical fertilizer with no known substitutes,” said Ted Pagano, MPSC Founder and CEO. “Without potash we can’t feed the world.”

At full build-out, MPSC said its project stands ready to respond one-to-one for those Russian imports of potash that are lost in the most critical time of need, with domestic production from Michigan.

Late last year, Pagano spoke out about U.S. Department of Interior’s proposal to remove potash from the critical minerals list, saying it appeared short-sighted and is coming at a time when product is unavailable, inflation is pressing, and food security is threatened globally (GM Nov. 24, 2021).

MPSC said it is currently in advanced stages of capital raising, with all permits in hand, while developing the necessary infrastructure to extract it safely, in an environmentally responsible and sustainable way. Full production of domestic potash from the facility is expected for 2025.

Michigan Potash plans to use solution mining to initially produce 650,000 mt/y of potash and 780,000 mt/y of salt, eventually ramping up to 1 million mt/y and 1.2 million mt/y, respectively.

Scotts Lowers Guidance, Cites Cannabis Market; Major 2022 M&A Off the Table

Earnings, Eastern Cornbelt, News, Specialty

The Scotts Miracle-Gro Co., Marysville, Ohio, said on March 8 it has lowered its full-year sales guidance for its Hawthorne segment, and that the reduction would likely lead to adjusted earnings per share lower than the previously expected $8.50-$8.90.

CFO Cory Miller said the company now expects Hawthorne sales to decline 15-25 percent, including the benefit of acquisitions. Sales in the segment have been challenged for several months due to an oversupply of cannabis, which is leading to a slowdown in both indoor and outdoor cultivation.

“We believe Hawthorne sales have found the bottom in terms of average daily volume,” said Miller. “However, there is a seasonal element to the business that would normally be in play by now that has not materialized to the extent we anticipated. While sales volume has begun to improve recently, the year-over-year rate of decline has expanded, and that trend appears likely to carry through March.”

The revised Hawthorne sales outlook means Scotts is unlikely to reach the low end of its guidance for non-GAAP adjusted earnings per share. Miller said management remains optimistic about the continued strength of the U.S. Consumer segment and is working to moderate the earnings gap from the shortfall in Hawthorne sales, with a goal of achieving non-GAAP adjusted earnings per share of at least $8.00.

“The midpoint for our sales guidance for our U.S. Consumer business continues to assume an 8-point decline in unit volume on a full-year basis and the business continues to significantly outperform against that plan,” Miller said. “Consumer purchases, in units, entering March are essentially flat from year-ago levels and shipments to retailers through five months are at record levels.

“Still, it is too early in the season to adjust our outlook for the business,” he continued. “However, we and our retail partners remain encouraged by the level of consumer participation we continue to see as we prepare for the peak weeks of the season.”

Miller also said the company no longer expects a significant acquisition in fiscal 2022 to bolster its presence in the live goods category. Scotts had been actively pursuing such an opportunity over the past year, but has ended those discussions.

“We see live goods as critical to our future with growth in this category through M&A remaining a major component of our strategic plan,” Miller said. “However, our M&A strategy has been successful over the last several years because we have remained disciplined in our approach and been willing to step away when the economics or other factors no longer make sense.”

Scotts expects to provide a further update on May 3, 2022, when it releases its second-quarter results.