Scotts has 70 percent of urea locked in

Marysville, Ohio-Scotts Miracle-Gro Co. Executive Vice President and Chief Financial Officer Dave Evans told analysts Nov. 4 that the company has 70 percent of its urea locked in for next year, with probably even more on other NPKs. He said the company is farther out in hedging on urea this year than last year. Evans said while the company has some concerns over urea costs, as it is seeing higher costs in both urea and freight, the company has confidence in its margin rate for next year given the amount that has already been locked in. Scotts Chairman and CEO Jim Hagedorn added that the company has seen commodity costs above what it had expected, and that it has priced its own products for that. While Scotts said its fertilizer sales were flat in the past year, the company has not lost market share, even though its prices rose relative to private label products. Hagedorn said the company overcame a summer that “downright sucked. Hot and dry conditions in most of the U.S. caused many homeowners to simply give up.” Luckily, better weather in the spring and fall allowed Scotts to post record results for the year (GM Nov. 8, p. 14). As for the recent management changes at Scotts (GM Nov. 1, p. 11), Hagedorn said that after he announced that he planned to stay at the company, it was heir apparent Mark Baker’s decision to leave. “He simply decided that under the circumstances, it was time to step away. I understand his decision. He wants to run a business, and I respect that. I want to stress that Mark was not asked to resign and he leaves us on good terms.”