Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 29, 2018 | Feb. 01, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SCOTTS MIRACLE-GRO CO | |
Entity Central Index Key | 825,542 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 29, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Trading Symbol | SMG | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 55,350,699 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 298.1 | $ 221.5 |
Cost of sales | 261.1 | 187.5 |
Cost of sales—impairment, restructuring and other | 2.5 | 0 |
Gross profit | 34.5 | 34 |
Operating expenses: | ||
Selling, general and administrative | 116.3 | 108.2 |
Impairment, restructuring and other | 3.5 | (0.2) |
Other income, net | (0.4) | (2.1) |
Income (loss) from operations | (84.9) | (71.9) |
Equity in income of unconsolidated affiliates | (1.3) | (0.6) |
Interest expense | 25.2 | 17.8 |
Other non-operating income, net | (2.9) | (2.5) |
Income (loss) from continuing operations before income taxes | (105.9) | (86.6) |
Income tax benefit from continuing operations | (23.3) | (66.6) |
Income (loss) from continuing operations | (82.6) | (20) |
Income (loss) from discontinued operations, net of tax | 2.9 | (1.2) |
Net income (loss) | (79.7) | (21.2) |
Net loss attributable to noncontrolling interest | 0.1 | 0 |
Net income (loss) attributable to controlling interest | $ (79.6) | $ (21.2) |
Basic income (loss) per common share: | ||
Loss from continuing operations (USD per share) | $ (1.49) | $ (0.35) |
Income (loss) from discontinued operations (USD per share) | 0.05 | (0.02) |
Basic loss per common share (USD per share) | $ (1.44) | $ (0.37) |
Weighted-average common shares outstanding during the period (shares) | 55.3 | 57.6 |
Diluted income (loss) per common share: | ||
Loss from continuing operations (USD per share) | $ (1.49) | $ (0.35) |
Income (loss) from discontinued operations (USD per share) | 0.05 | (0.02) |
Diluted loss per common share (USD per share) | $ (1.44) | $ (0.37) |
Weighted-average common shares outstanding during the period plus dilutive potential common shares (shares) | 55.3 | 57.6 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (79.7) | $ (21.2) |
Other comprehensive income (loss): | ||
Net foreign currency translation adjustment | (5.3) | 0 |
Net unrealized gain (loss) on derivative instruments, net of tax of $(2.8) and $0.5, respectively | (7.9) | 0.8 |
Reclassification of net unrealized (gains) losses on derivative instruments to net income, net of tax of $0.0 and $(0.1), respectively | (0.1) | (0.1) |
Reclassification of net pension and other post-retirement benefit losses to net income, net of tax of $0.3 and $0.2, respectively | 0.9 | 0.3 |
Total other comprehensive income (loss) | (12.4) | 1 |
Comprehensive income (loss) | (92.1) | (20.2) |
Comprehensive (income) loss attributable to noncontrolling interest | 0.1 | 0 |
Comprehensive income (loss) attributable to controlling interest | $ (92) | $ (20.2) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net unrealized gain (loss) on derivative instruments - tax impact | $ (2.8) | $ 0.5 |
Reclassification of net unrealized (gains) losses on derivative instruments to net income - tax impact | 0 | (0.1) |
Reclassification of net pension and other post-retirement benefit losses to net income - tax impact | $ 0.3 | $ 0.2 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net loss | $ (79.7) | $ (21.2) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Impairment, restructuring and other | 0.5 | 0 |
Share-based compensation expense | 6.6 | 6 |
Depreciation | 14 | 12.7 |
Amortization | 8.3 | 7.1 |
Deferred taxes | (1.3) | (47.6) |
Gain on long-lived assets | (0.1) | (0.2) |
Gain on sale / contribution of business | 0 | (0.2) |
Equity in income of unconsolidated affiliates | (1.3) | (0.6) |
Changes in assets and liabilities, net of acquired businesses: | ||
Accounts receivable | 100.7 | 117.6 |
Inventories | (267.1) | (282.7) |
Prepaid and other assets | (48.4) | 6.3 |
Accounts payable | 93.1 | 84 |
Other current liabilities | (58.7) | (83.3) |
Restructuring and other | 1.2 | (2.8) |
Other non-current items | (1.6) | (5.2) |
Other, net | 0.4 | (0.4) |
Net cash used in operating activities | (233.4) | (210.5) |
INVESTING ACTIVITIES | ||
Investments in property, plant and equipment | (12.7) | (19.4) |
Investments in loans receivable | 0 | (5.3) |
Investments in acquired businesses, net of cash acquired | (6.6) | (70) |
Other investing, net | 2.2 | 0 |
Net cash provided by (used in) investing activities | (17.1) | (94.7) |
FINANCING ACTIVITIES | ||
Borrowings under revolving and bank lines of credit and term loans | 386.8 | 573.4 |
Repayments under revolving and bank lines of credit and term loans | (116.3) | (136) |
Dividends paid | (30.4) | (30.5) |
Purchase of Common Shares | (0.5) | (96.2) |
Payments on seller notes | (0.8) | (3) |
Cash received from exercise of stock options | 1.1 | 1 |
Acquisition of noncontrolling interests | 0 | (70.1) |
Net cash provided by (used in) financing activities | 239.9 | 238.6 |
Effect of exchange rate changes on cash | (0.7) | 0.6 |
Net increase (decrease) in cash and cash equivalents | (11.3) | (66) |
Cash and cash equivalents at beginning of period | 33.9 | 120.5 |
Cash and cash equivalents at end of period | $ 22.6 | $ 54.5 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 22.6 | $ 33.9 | $ 54.5 |
Accounts receivable, less allowances of $3.4, $2.3 and $3.6, respectively | 163.8 | 226 | 128.4 |
Accounts receivable pledged | 44.4 | 84.5 | 42.2 |
Inventories | 745.4 | 481.4 | 696.1 |
Prepaid and other current assets | 102.5 | 59.9 | 61.7 |
Total current assets | 1,078.7 | 885.7 | 982.9 |
Investment in unconsolidated affiliates | 37.3 | 36.1 | 31.7 |
Property, plant and equipment, net of accumulated depreciation of $624.0, $602.0 and $610.5, respectively | 519.8 | 530.8 | 464.1 |
Goodwill | 539.7 | 543 | 464.8 |
Intangible assets, net | 846.8 | 857.3 | 783.4 |
Other assets | 202.9 | 201.6 | 183.9 |
Total assets | 3,225.2 | 3,054.5 | 2,910.8 |
Current liabilities: | |||
Current portion of debt | 95.1 | 132.6 | 86.1 |
Accounts payable | 237 | 150.5 | 223.2 |
Other current liabilities | 262.5 | 329.6 | 161.8 |
Total current liabilities | 594.6 | 612.7 | 471.1 |
Long-term debt | 2,186.2 | 1,883.8 | 1,697 |
Distributions in excess of investment in unconsolidated affiliate | 21.9 | 21.9 | 21.9 |
Other liabilities | 169.3 | 176.5 | 213 |
Total liabilities | 2,972 | 2,694.9 | 2,403 |
Commitments and contingencies (Note 12) | |||
Equity: | |||
Common shares and capital in excess of $.01 stated value per share; shares outstanding of 55.3, 57.2 and 55.3, respectively | 425.9 | 420.3 | 407.9 |
Retained earnings | 835.4 | 919.9 | 925.9 |
Treasury shares, at cost; 12.8, 10.9 and 12.8 shares, respectively | (937.7) | (939.6) | (762.8) |
Accumulated other comprehensive loss | (75.3) | (46) | (68.2) |
Total equity—controlling interest | 248.3 | 354.6 | 502.8 |
Noncontrolling interest | 4.9 | 5 | 5 |
Total equity | 253.2 | 359.6 | 507.8 |
Total liabilities and equity | $ 3,225.2 | $ 3,054.5 | $ 2,910.8 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 |
Statement of Financial Position [Abstract] | |||
Accounts receivable, allowances | $ 3.4 | $ 3.6 | $ 2.3 |
Property, plant and equipment, accumulated depreciation | $ 624 | $ 610.5 | $ 602 |
Common shares stated value (USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common shares outstanding (shares) | 55.3 | 55.3 | 57.2 |
Treasury shares, at cost (shares) | 12.8 | 12.8 | 10.9 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Dec. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [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, urban and hydroponic gardening. The Company’s products are sold in North America, Europe and Asia. Due to the nature of the consumer lawn and garden business, the majority of the Company’s sales to customers occur in the Company’s second and third fiscal quarters. On a combined basis, net sales for the second and third quarters of the last three fiscal years represented in excess of 75% of the Company’s annual net sales. Organization and Basis of Presentation The Company’s unaudited condensed consolidated financial statements for the three months ended December 29, 2018 and December 30, 2017 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, 2018 (the “ 2018 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, 2018 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 $3.2 million and $1.3 million during the three months ended December 29, 2018 and December 30, 2017 , respectively, representing unpaid liabilities incurred during each period to acquire property, plant and equipment. Statements of Cash Flows Supplemental cash flow information was as follows: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Interest paid $ (31.4 ) $ (25.5 ) Income taxes paid (8.7 ) (1.5 ) During the three months ended December 29, 2018 , the Company paid a post-closing net working capital adjustment obligation of $6.6 million related to the fiscal 2018 acquisition of Sunlight Supply (as defined in “NOTE 4. ACQUISITIONS AND INVESTMENTS”), which was classified as an investing activity in the “Investments in acquired businesses, net of cash acquired” line in the Condensed Consolidated Statements of Cash Flows. During the three months ended December 30, 2017 , the Company paid contingent consideration of $3.0 million related to the fiscal 2016 acquisition of Gavita Holdings B.V., and its subsidiaries (collectively, “Gavita”), which was classified as a financing activity in the “Payments on seller notes” line in the Condensed Consolidated Statements of Cash Flows. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS Revenue Recognition from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued amended accounting guidance that replaces most existing revenue recognition guidance under GAAP. This guidance requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or services. The standard involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the entity satisfies the performance obligations. The new standard also results in enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Subsequently, additional guidance was issued on several areas including guidance intended to improve the operability and understandability of the implementation of principal versus agent considerations and clarifications on the identification of performance obligations and implementation of guidance related to licensing. The Company adopted this guidance effective October 1, 2018 under the modified retrospective approach. The Company’s revenue is primarily product sales, which are recognized at a point in time when title transfers to customers and the Company has no further obligation to provide services related to such products. The Company’s timing of recognition of revenue is substantially unchanged under the amended guidance. The new accounting guidance required the Company to recognize earlier certain deferred revenue associated with a license agreement related to the sale of the International Business (as defined in “NOTE 3. DISCONTINUED OPERATIONS”), resulting in a cumulative adjustment to its fiscal 2019 opening balance of retained earnings of $9.1 million , other current liabilities of $1.4 million and other liabilities of $7.7 million . With the exception of this item, the adoption of the amended accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements. The additional disclosures required are presented within “NOTE 2. REVENUE RECOGNITION” and “NOTE 15. SEGMENT INFORMATION.” Cash Flow Presentation In August 2016, the FASB issued an accounting standard update that amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows. The Company adopted this guidance on a retrospective basis effective October 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s consolidated cash flows. Business Combinations In January 2017, the FASB issued an accounting standard update that clarifies the definition of a business to provide additional guidance to assist in evaluating whether transactions should be accounted for as an acquisition (or disposal) of either an asset or business. The Company adopted this guidance on a prospective basis effective October 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. Employee Benefit Plans In March 2017, the FASB issued an accounting standard update that requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present the current-service-cost with other current compensation costs for related employees in the income statement, (2) present the other components elsewhere in the income statement and outside of income from operations if that subtotal is presented and (3) limit the amount of costs eligible for capitalization (e.g., as part of inventory or property, plant, and equipment) to only the service-cost component of net benefit cost. The provisions are required to be applied retrospectively for the presentation of cost components in the income statement and prospectively for the capitalization of cost components. The Company adopted this guidance effective October 1, 2018 and has classified non-service-cost components of net benefit cost/income in the “Other non-operating income, net” line in the Condensed Consolidated Statements of Operations. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. Income Taxes On December 22, 2017, H.R.1 (the “Act,” formerly known as the “Tax Cuts and Jobs Act”) was signed into law. The Act provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Among other items, the Act implemented a territorial tax system, imposed a one-time transition tax on deemed repatriated earnings of foreign subsidiaries, and reduced the federal corporate statutory tax rate to 21% effective January 1, 2018. Additionally, the Securities and Exchange Commission (the “SEC”) released Staff Accounting Bulletin No. 118 (“SAB 118”) which provides guidance on accounting for the Act’s impact under Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”). The guidance in SAB 118 addresses certain fact patterns where the accounting for changes in tax laws or tax rates under ASC 740 is incomplete upon issuance of an entity’s financial statements for the reporting period in which the Act is enacted. Under the SEC staff guidance in SAB 118, in the financial reporting period in which the Act is enacted, the income tax effects of the Act for which the accounting under ASC 740 is incomplete would be reported as a provisional amount based on a reasonable estimate (to the extent a reasonable estimate can be determined), which would be subject to adjustment during a “measurement period” until the accounting under ASC 740 is complete. The measurement period is limited to no more than one year beyond the enactment date under the SEC staff’s guidance. SAB 118 also describes supplemental disclosures that should accompany the provisional amounts, including the reasons for the incomplete accounting, the additional information or analysis that is needed, and other information relevant to why the registrant was not able to complete the accounting required under ASC 740 in a timely manner. For discussion of the impacts of the Act that are material to the Company and required disclosures related to the Act pursuant to the guidance provided under SAB 118, refer to “NOTE 11. INCOME TAXES.” Reporting Comprehensive Income In February 2018, the FASB issued an accounting standard update that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Act. The Company elected to adopt this guidance effective October 1, 2018, resulting in a reclassification of $ 16.9 million from accumulated other comprehensive income (loss) (“AOCI”) to retained earnings for the three months ended December 29, 2018. Share-Based Compensation In June 2018, the FASB issued an accounting standard update that simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the amended accounting guidance, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The Company elected to adopt this guidance effective October 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Leases In February 2016, the FASB issued its final standard on lease accounting. This guidance requires lessees to recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2019 and require a modified retrospective transition approach for leases that exist as of or are entered into after the beginning of either (i) the date of adoption or (ii) the earliest comparative period presented in the financial statements. The Company is currently evaluating available transition methods and the impact of this standard on its consolidated results of operations, financial position and cash flows. The Company has made progress on its evaluation of the amended guidance, including identification of the population of leases affected, determining the information required to calculate the lease liability and right-of-use asset and evaluating models to assist in future reporting. Credit Losses In June 2016, the FASB issued an accounting standard update related to the measurement of credit losses on financial instruments. The amended accounting guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020. The Company is continuing to assess the impact of the amended guidance. Cloud Computing Costs In August 2018, the FASB issued an accounting standard update that 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 provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020. The Company is continuing to assess the impact of the amended guidance. Employee Benefit Plans In August 2018, the FASB issued an accounting standard update that removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020. The Company is continuing to assess the impact of the amended guidance. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Dec. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Nature of Goods and Services The Company’s revenue is primarily generated from sales of branded and private label lawn and garden care and indoor and hydroponic gardening finished products to home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, food and drug stores, indoor gardening and hydroponic product distributors, retailers and growers. In addition to product sales, the Company acts as the exclusive agent of Monsanto Company (“Monsanto”) for the marketing and distribution of Monsanto’s consumer Roundup ® non-selective weedkiller products in the United States and certain other specified countries, and performs certain other services under ancillary agreements with Monsanto. The Company also provides marketing, research and development and certain ancillary services to Bonnie Plants, Inc. (“Bonnie”). Refer to “NOTE 15. SEGMENT INFORMATION” for disaggregated revenue information and “NOTE 8. MARKETING AGREEMENT” for revenue information related to the Monsanto agreements. Identification and Satisfaction of Performance Obligations Product sales are recognized at a point in time when control of products transfers to customers and the Company has no further obligation to provide services related to such products. Control is the ability of customers to direct the “use of” and “obtain” the benefit from the Company’s products. In evaluating the timing of the transfer of control of products to customers, the Company considers several control indicators, including significant risks and rewards of products, the Company’s right to payment and the legal title of the products. Based on the assessment of control indicators, sales are typically recognized when products are delivered to or picked up by the customer. The Company is generally the principal in a transaction, therefore revenue is primarily recorded on a gross basis. When the Company is a principal in a transaction, it has determined that it controls the ability to direct the use of the product prior to transfer to a customer, is primarily responsible for fulfilling the promise to provide the product or service to the customer, has discretion in establishing prices, and ultimately controls the transfer of the product or services provided to the customer. Under the terms of the Second Amended and Restated Agency and Marketing Agreement (the “Restated Marketing Agreement”), pursuant to which the Company serves as exclusive sales and marketing agent of Monsanto with respect to Monsanto’s consumer Roundup ® non-selective weedkiller products in the United States and certain other specified countries, the Company is entitled to receive an annual commission from Monsanto as consideration for the performance of the Company’s duties as agent. The annual commission payable under the Restated Marketing Agreement is equal to (1) 50% of the actual earnings before interest and income taxes of Monsanto’s consumer Roundup ® business in the markets covered by the Restated Marketing Agreement for program years 2017 and 2018 and (2) 50% of the actual earnings before interest and income taxes of Monsanto’s consumer Roundup ® business in the markets covered by the Restated Marketing Agreement in excess of $40.0 million for program years 2019 and thereafter. The Restated Marketing Agreement also requires the Company to make annual payments of $18.0 million to Monsanto as a contribution against the overall expenses of its consumer Roundup ® business. The gross commission earned under the Restated Marketing Agreement and the contribution payments to Monsanto are included in the “Net sales” line in the Condensed Consolidated Statements of Operations. The Company performs other services, including conversion services, pursuant to ancillary agreements with Monsanto. The actual costs incurred for these activities are charged to and reimbursed by Monsanto. The Company records costs incurred for which the Company is the primary obligor on a gross basis, recognizing such costs in the “Cost of sales” line and the reimbursement of these costs in the “Net sales” line in the Condensed Consolidated Statements of Operations, with no effect on gross profit dollars or net income. Under the terms of the Marketing, R&D and Ancillary Services Agreement (the “Services Agreement”) with Bonnie and its sole shareholder, Alabama Farmers Cooperative, Inc. (“AFC”), the Company provides marketing, research and development and certain ancillary services to Bonnie. In exchange for these services, Bonnie reimburses the Company for certain costs and provides a commission fee earned based on a percentage of the growth in earnings before interest, income taxes and amortization of Bonnie’s business of planting, growing, developing, manufacturing, distributing, marketing, and selling live plants, plant food, fertilizer and potting soil (the “Bonnie Business”). The commission earned under the Services Agreement is included in the “Net sales” line in the Condensed Consolidated Statements of Operations. Additionally, the Company records costs incurred under the Services Agreement for which the Company is the primary obligor on a gross basis, recognizing such costs in the “Cost of sales” line and the reimbursement of these costs in the “Net sales” line in the Condensed Consolidated Statements of Operations, with no effect on gross profit dollars or net income. Transactional Price and Promotional Allowances Revenue for product sales is recorded net of sales returns and allowances. Revenues are measured based on the amount of consideration that the Company expects to receive as derived from a list price, reduced by estimates for variable consideration. Variable consideration includes the cost of current and continuing promotional programs and expected sales returns. Commission income related to the Monsanto and Bonnie agreements is recognized over the program year as the services are being performed based upon the commission income formula in the agreements. The Company’s promotional programs primarily include rebates based on sales volumes, in-store promotional allowances, cooperative advertising programs, direct consumer rebate programs and special purchasing incentives. The cost of promotional programs is estimated considering all reasonably available information, including current expectations and historical experience. Promotion costs (including allowances and rebates) incurred during the year are expensed to interim periods in relation to revenues and are recorded as a reduction of net sales. Accruals for expected payouts under these programs are included in the “Other current liabilities” line in the Condensed Consolidated Balance Sheets. Provisions for estimated returns and allowances are recorded at the time revenue is recognized based on historical rates and are periodically adjusted for known changes in return levels. Shipping and handling costs are accounted for as contract fulfillment costs and included in the “Cost of sales” line in the Condensed Consolidated Statements of Operations. The Company excludes from revenue any amounts collected from customers for sales or other taxes. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Dec. 29, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS International Business Prior 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 April 29, 2017, the Company received a binding and irrevocable conditional offer (the “Offer”) from Exponent Private Equity LLP (“Exponent”) to purchase the International Business. On July 5, 2017, the Company accepted the Offer and the Company completed the sale on August 31, 2017. 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 and classified the assets and liabilities of the International Business as held for sale. During the three months ended December 30, 2017 , the Company recognized $1.4 million in transaction related costs associated with the sale of the International Business. Wild Bird Food During fiscal 2014, the Company completed the sale of its U.S. and Canadian wild bird food business. As a result, effective in fiscal 2014, the Company classified its results of operations for all periods presented to reflect the wild bird food business as a discontinued operation. At December 29, 2018 , $85.0 million was accrued for a probable loss related to the previously disclosed legal matter In re Morning Song Bird Food Litigation in the “Other current liabilities” line in the Condensed Consolidated Balance Sheet. This matter relates to a pending class-action lawsuit filed in 2012 in connection with the sale of wild bird food products that were the subject of a voluntary recall in 2008 by the Company’s previously sold wild bird food business. During the three months ended December 29, 2018 , the Company recognized insurance recoveries of $5.0 million related to this matter. Refer to “NOTE 12. CONTINGENCIES” for more information. The following table summarizes the results of discontinued operations described above and reflected within discontinued operations in the Company’s condensed consolidated financial statements for each of the periods presented: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Impairment, restructuring and other charges (recoveries), net $ (4.9 ) $ 1.4 Gain on sale / contribution of business — (0.2 ) Income (loss) from discontinued operations before income taxes 4.9 (1.2 ) Income tax expense from discontinued operations 2.0 — Income (loss) from discontinued operations, net of tax $ 2.9 $ (1.2 ) The Condensed Consolidated Statements of Cash Flows do not present the cash flows from discontinued operations separately from cash flows from continuing operations. Cash provided by (used in) operating activities related to discontinued operations totaled $1.8 million and $(1.4) million for the three months ended December 29, 2018 and December 30, 2017 , respectively. Cash provided by (used in) investing activities related to discontinued operations was zero for the three months ended December 29, 2018 and December 30, 2017 . |
ACQUISITION AND INVESTMENTS
ACQUISITION AND INVESTMENTS | 3 Months Ended |
Dec. 29, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND INVESTMENTS | ACQUISITIONS AND INVESTMENTS FISCAL 2018 Sunlight Supply On June 4, 2018 , the Company’s Hawthorne segment acquired substantially all of the assets and certain liabilities of Sunlight Supply, Inc., Sunlight Garden Supply, Inc., Sunlight Garden Supply, ULC, and IP Holdings, LLC, and all of the issued and outstanding equity interests of Columbia River Industrial Holdings, LLC (collectively “Sunlight Supply”). Sunlight Supply, based in Vancouver, Washington, is a leading developer, manufacturer, marketer and distributer of horticultural, organics, lighting, and hydroponics products. Prior to the transaction, Sunlight Supply served as a non-exclusive distributor of the Company. The estimated purchase price of Sunlight Supply was $458.6 million , a portion of which was paid by the issuance of 0.3 million common shares of Scotts Miracle-Gro (“Common Shares”), a non-cash investing and financing activity, with a fair value of $23.4 million based on the average share price at the time of payment. The purchase price included contingent consideration, a non-cash investing activity, with an initial fair value of $3.1 million and a maximum payout of $20.0 million , which will be paid by the Company contingent on the achievement of certain performance metrics of the Company through the one-year anniversary of the closing date. The purchase price was also subject to a post-closing net working capital adjustment which was paid during the first quarter of fiscal 2019. The preliminary valuation of the acquired assets included (i) $7.6 million of cash, prepaid and other current assets, (ii) $20.3 million of accounts receivable, (iii) $84.3 million of inventory, (iv) $64.4 million of fixed assets, (v) $13.7 million of accounts payable and other current liabilities, (vi) $151.1 million of finite-lived identifiable intangible assets, and (vii) $144.6 million of tax-deductible goodwill. Identifiable intangible assets included tradenames of $65.1 million , customer relationships of $84.1 million and non-competes of $1.9 million with useful lives ranging between 5 and 25 years. The estimated fair values of the identifiable intangible assets were determined using an income-based approach, which includes market participant expectations of cash flows that an asset will generate over the remaining useful life discounted to present value using an appropriate discount rate. Certain estimated values for the acquisition, including goodwill, intangible assets, and property, plant and equipment, are not yet finalized and are subject to revision as additional information becomes available and more detailed analysis is completed. The contingent consideration related to the Sunlight Supply acquisition is required to be accounted for as a derivative instrument and is recorded at fair value in the “Other current liabilities” line in the Condensed Consolidated Balance Sheets, with changes in fair value recognized in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. The estimated fair value of the contingent consideration was $0.9 million as of December 29, 2018 and the fair value measurement was classified in Level 3 of the fair value hierarchy. The acquisition of Sunlight Supply also resulted in the settlement of a portion of certain previously acquired customer relationships, which resulted in a non-cash impairment charge of $17.5 million recognized in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the third quarter of fiscal 2018 to reduce the carrying value of these previously acquired customer relationship intangible assets to an estimated fair value of $30.9 million . The estimated fair value was determined using an income-based approach, which includes market participant expectations of cash flows that an asset will generate over the remaining useful life discounted to present value using an appropriate discount rate, and has been included as part of goodwill. Additionally, the Company reduced the value of deferred tax liabilities associated with the write-off of these previously acquired customer relationship intangible assets by $7.3 million , which was recognized in the “Income tax expense (benefit) from continuing operations” line in the Condensed Consolidated Statement of Operations during the third quarter of fiscal 2018. Net sales for Sunlight Supply included within the Hawthorne segment for the three months ended December 29, 2018 were $71.6 million . The following unaudited pro forma information presents the combined results of operations as if the acquisition of Sunlight Supply had occurred at the beginning of fiscal 2017. Sunlight Supply’s pre-acquisition results have been added to the Company’s historical results. The pro forma results contained in the table below include adjustments for (i) the elimination of intercompany sales, (ii) amortization of acquired intangibles, (iii) increased depreciation expense as a result of acquisition date fair value adjustments, (iv) increased interest expense related to the financing of the acquisition, (v) adjustments to tax expense based on condensed consolidated pro forma results, and (vi) the impact of Common Shares issued as part of the purchase price in connection with the acquisition. The pro forma information does not reflect the realization of any potential cost savings or other synergies from the acquisition as a result of restructuring activities and other cost savings initiatives. These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations as they would have been had the acquisitions occurred on the assumed dates, nor are they necessarily an indication of future operating results. THREE MONTHS ENDED Unaudited Consolidated Pro Forma Results DECEMBER 30, 2017 (In millions, except per share data) Pro forma net sales $ 301.3 Pro forma net loss attributable to controlling interest (20.9 ) Pro forma diluted net loss per common share (0.36 ) Gavita On May 26, 2016, the Company’s Hawthorne segment acquired majority control and a 75% economic interest in Gavita. Gavita’s former ownership group initially retained a 25% noncontrolling interest in Gavita consisting of ownership of 5% of the outstanding shares of Gavita and a loan with interest payable based on distributions by Gavita. The loan was recorded at fair value in the “Long-term debt” line in the Condensed Consolidated Balance Sheets. On October 2, 2017 , the Company’s Hawthorne segment acquired the remaining 25% noncontrolling interest in Gavita, including Agrolux, for $69.2 million , plus payment of contingent consideration of $3.0 million . The carrying value of the 25% noncontrolling interest consisted of long-term debt of $55.6 million and noncontrolling interest of $7.9 million . The difference between purchase price and carrying value of $5.7 million was recognized in the “Common shares and capital in excess of $0.01 stated value per share” line within “Total equity—controlling interest” in the Condensed Consolidated Balance Sheets. The Company has revised its historical presentation of the payment related to the acquisition of the remaining noncontrolling interest for the three months ended December 30, 2017 . This payment was incorrectly classified as an investing activity in the “Investments in acquired businesses, net of cash acquired” line in the Condensed Consolidated Statements of Cash Flows, and was revised to be classified as a financing activity in the “Acquisition of noncontrolling interests” line in the Condensed Consolidated Statements of Cash Flows in accordance with GAAP. The Company previously revised this classification in its most recent Form 10–K. Can-Filters On October 11, 2017 , the Company’s Hawthorne segment completed the acquisition of substantially all of the U.S. and Canadian assets of Can-Filters Group Inc. (“Can-Filters”) for $74.1 million . Based in British Columbia, Can-Filters is a leading wholesaler of ventilation products for indoor and hydroponic gardening and industrial markets worldwide. The valuation of the acquired assets included (i) $1.5 million of cash, prepaid and other current assets, (ii) $7.7 million of inventory and accounts receivable, (iii) $4.4 million of fixed assets, (iv) $0.7 million of accounts payable and other current liabilities, (v) $39.7 million of finite-lived identifiable intangible assets, and (vi) $21.5 million of tax-deductible goodwill. Identifiable intangible assets included tradenames and customer relationships with useful lives of 25 years. The estimated fair value of the identifiable intangible assets were determined using an income-based approach, which includes market participant expectations of cash flows that an asset will generate over the remaining useful life discounted to present value using an appropriate discount rate. The condensed consolidated financial statements include the results of operations for these business combinations from the date of each acquisition. |
INVESTMENT IN UNCONSOLIDATED AF
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 3 Months Ended |
Dec. 29, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED AFFILIATES | INVESTMENT IN UNCONSOLIDATED AFFILIATES As of December 29, 2018 , the Company held a noncontrolling interest of approximately 30% in Outdoor Home Services Holdings, LLC (the “TruGreen Joint Venture”), and held a noncontrolling interest in an unconsolidated subsidiary whose products support the professional U.S. industrial, turf and ornamental market (the “IT&O Joint Venture”). The Company provided second lien term loan financing to the TruGreen Joint Venture which had a carrying value of $18.1 million at December 29, 2018 and December 30, 2017 and is recorded in the “Other assets” line in the Condensed Consolidated Balance Sheets. The Company did not receive reimbursements during the three months ended December 29, 2018 and the Company had accounts receivable of $0.4 million at December 29, 2018 for expenses incurred pursuant to a short-term transition services agreement and payments on claims associated with insurance programs. The Company was reimbursed $0.5 million during the three months ended December 30, 2017 and had accounts receivable of $0.2 million at December 30, 2017 for expenses incurred pursuant to a short-term transition services agreement and payments on claims associated with insurance programs. The Company also had an indemnification asset of $2.5 million and $4.5 million at December 29, 2018 and December 30, 2017 , respectively, for future payments on claims associated with insurance programs. The Company did not receive distributions during the three months ended December 29, 2018 or December 30, 2017 . The Company’s net investment and advances have been reduced to a liability for the TruGreen Joint Venture, which resulted in an amount recorded in the “Distributions in excess of investment in unconsolidated affiliate” line in the Condensed Consolidated Balance Sheets of $21.9 million at December 29, 2018 and December 30, 2017 . As such, the Company no longer records its proportionate share of the TruGreen Joint Venture earnings in the Condensed Consolidated Statements of Operations until the Company’s net investment and advances are no longer a liability. The Company does not have any contractual obligations to fund losses of the TruGreen Joint Venture. The Company provides the IT&O Joint Venture with line of credit financing, which was fully repaid as of December 29, 2018 and had a balance of $5.3 million at December 30, 2017 , and is recorded in the “Other assets” line in the Condensed Consolidated Balance Sheets. The following table presents summarized financial information of the Company’s unconsolidated affiliates: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Revenue $ 287.9 $ 272.2 Gross margin 81.5 76.0 Selling and administrative expenses 61.6 64.0 Amortization expense 17.5 12.1 Interest expense 20.0 17.5 Restructuring and other charges 10.3 3.6 Net income (loss) $ (27.9 ) $ (21.2 ) Due to the seasonal nature of the lawn, tree and shrub care business, the Company anticipates a net loss related to the TruGreen Joint Venture during the Company’s first and second fiscal quarters. Net income (loss) does not include income taxes, which are recognized and paid by the partners of the unconsolidated affiliates. The income taxes associated with the Company’s share of net income (loss) have been recorded in the “Income tax benefit from continuing operations” line in the Condensed Consolidated Statements of Operations. |
IMPAIRMENT, RESTRUCTURING AND O
IMPAIRMENT, RESTRUCTURING AND OTHER | 3 Months Ended |
Dec. 29, 2018 | |
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,” “Impairment, restructuring and other” and “Income (loss) from discontinued operations, net of tax” lines in the Condensed Consolidated Statements of Operations. The following table details impairment, restructuring and other charges (recoveries) for each of the periods presented: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Cost of sales—impairment, restructuring and other: Restructuring and other charges $ 2.0 $ — Property, plant and equipment impairments 0.5 — Operating expenses: Restructuring and other charges (recoveries) 3.5 (0.2 ) Impairment, restructuring and other charges (recoveries) from continuing operations $ 6.0 $ (0.2 ) Restructuring and other charges (recoveries), net, from discontinued operations (4.9 ) 1.4 Total impairment, restructuring and other charges $ 1.1 $ 1.2 The following table summarizes the activity related to liabilities associated with restructuring and other, excluding insurance reimbursement recoveries, during the three months ended December 29, 2018 (in millions): Amounts accrued for restructuring and other at September 30, 2018 $ 112.2 Restructuring and other charges from continuing operations 5.5 Restructuring and other charges from discontinued operations 0.1 Payments and other (4.4 ) Amounts accrued for restructuring and other at December 29, 2018 $ 113.4 Included in restructuring accruals, as of December 29, 2018 , is $2.0 million 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. 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. Project Catalyst is a company-wide restructuring effort to reduce operating costs throughout the U.S. Consumer, Hawthorne and Other segments and drive synergies from recent acquisitions within the Hawthorne segment. During the three months ended December 29, 2018 , the Company continued to execute on its planned facility closures and consolidations and terminated employees in duplicate roles which resulted in charges of $5.5 million related to Project Catalyst. During the three months ended December 29, 2018 , the Hawthorne segment recognized employee termination benefits of $0.2 million , impairment of property, plant and equipment of $0.5 million and facility closure costs of $1.2 million in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. The Hawthorne segment also recognized employee termination benefits of $1.2 million and facility closure costs of $0.5 million in the “Impairment, restructuring and other” line in the Condensed Consolidated Statement of Operations. During the three months ended December 29, 2018 , the U.S. Consumer segment recognized facility closure costs of $0.3 million in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations and recognized employee termination benefits of $0.4 million in the “Impairment, restructuring and other” line in the Condensed Consolidated Statement of Operations. During the three months ended December 29, 2018 , the Other segment recognized employee termination benefits of $0.1 million and facility closure costs of $0.2 million in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statement of Operations and recognized employee termination benefits of $0.1 million in the “Impairment, restructuring and other” line in the Condensed Consolidated Statement of Operations. During the three months ended December 29, 2018 , Corporate recognized employee termination benefits of $0.8 million in the “Impairment, restructuring and other” line in the Condensed Consolidated Statement of Operations. Costs incurred to date since the inception of Project Catalyst are $21.4 million for the Hawthorne segment, $12.3 million for the U.S. Consumer segment, $0.4 million for the Other segment and $0.8 million for Corporate. Project Focus In the first quarter of fiscal 2016, the Company announced a series of initiatives called Project Focus designed to maximize the value of its non-core assets and focus on emerging categories of the lawn and garden industry in its core U.S. business. During the three months ended December 30, 2017 , the U.S. Consumer segment recognized adjustments of $0.2 million related to previously recognized termination benefits associated with Project Focus in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. Costs incurred to date since the inception of the current Project Focus initiatives are $10.0 million for the U.S. Consumer segment, $0.9 million for the Hawthorne segment and $1.2 million for the Other segment, related to transaction activity, termination benefits and facility closure costs. On August 31, 2017, the Company completed the sale of the International Business. Refer to “NOTE 3. DISCONTINUED OPERATIONS” for more information. During the three months ended December 30, 2017 , the Company recognized $1.4 million in transaction related costs associated with the sale of the International Business in the “Income (loss) from discontinued operations, net of tax” line in the Condensed Consolidated Statements of Operations. Other During the three months ended December 29, 2018 , the Company recognized insurance recoveries of $5.0 million related to the previously disclosed legal matter In re Morning Song Bird Food Litigation in the “Income (loss) from discontinued operations, net of tax” line in the Condensed Consolidated Statements of Operations. Refer to “NOTE 12. CONTINGENCIES” for more information. During the three months ended December 29, 2018 , the Company recognized a charge of $0.5 million for a probable loss on the previously disclosed legal matter In re Scotts EZ Seed Litigation in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. Refer to “NOTE 12. CONTINGENCIES” for more information. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Dec. 29, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following for each of the periods presented: DECEMBER 29, DECEMBER 30, SEPTEMBER 30, (In millions) Finished goods $ 524.3 $ 462.3 $ 292.1 Work-in-process 73.8 71.0 60.1 Raw materials 147.3 162.8 129.2 Total inventories $ 745.4 $ 696.1 $ 481.4 Adjustments to reflect inventories at net realizable values were $8.3 million at December 29, 2018 , $11.4 million at December 30, 2017 and $8.1 million at September 30, 2018 . |
MARKETING AGREEMENT
MARKETING AGREEMENT | 3 Months Ended |
Dec. 29, 2018 | |
Marketing Agreement [Abstract] | |
MARKETING AGREEMENT | MARKETING AGREEMENT The Scotts Company LLC (“Scotts LLC”) is the exclusive agent of Monsanto for the marketing and distribution of Monsanto’s consumer Roundup ® non-selective weedkiller products in the consumer lawn and garden market in the United States and certain other specified countries pursuant to the Restated Marketing Agreement. The Restated Marketing Agreement covers Israel, China and every country throughout the Caribbean and the continents of North America and South America that is not subject to a comprehensive U.S. trade embargo or certain other embargoes and trade restrictions. Unless Monsanto terminates the Restated Marketing Agreement due to an event of default by the Company, upon a termination of the Restated Marketing Agreement by Monsanto, in addition to other remedies that may be available to the Company, the Restated Marketing Agreement requires a termination fee payable to the Company equal to the greater of (1) $175.0 million or (2) four times (A) the average of the program earnings before interest and income taxes for the three trailing program years prior to the year of termination, minus (B) $186.4 million (the “Termination Fee”). The Company may terminate the Restated Marketing Agreement upon a material breach of the Restated Marketing Agreement by Monsanto or upon a material fraud or material willful misconduct committed by Monsanto, among other potential remedies, and in the event of such a termination by the Company, Monsanto is required to pay to the Company an amount equal to the Termination Fee. Upon a significant decline in either (i) Monsanto’s consumer Roundup ® business of more than 25% compared to program year 2014; or (ii) the Roundup ® brand, subject to certain terms and conditions, the Company may either terminate the Restated Marketing Agreement or continue the Restated Marketing Agreement and be entitled to receive an additional commission amount. The Restated Marketing Agreement also provides the Company with additional rights and remedies, including the right to terminate the Restated Marketing Agreement in certain circumstances and the right to indemnification for product liability claims relating to its marketing and distribution of Monsanto’s consumer Roundup ® products in its capacity as Monsanto’s agent. The term of the Restated Marketing Agreement will continue indefinitely for all included markets unless and until otherwise terminated in accordance therewith. The elements of the net commission and reimbursements earned under the Restated Marketing Agreement and included in “Net sales” are as follows: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Gross commission $ — $ 0.1 Contribution expenses (4.5 ) (4.5 ) Amortization of marketing fee — (0.2 ) Net commission (4.5 ) (4.6 ) Reimbursements associated with Restated Marketing Agreement 12.6 12.9 Total net sales associated with Restated Marketing Agreement $ 8.1 $ 8.3 |
DEBT
DEBT | 3 Months Ended |
Dec. 29, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The components of the Company’s debt are as follows: DECEMBER 29, DECEMBER 30, SEPTEMBER 30, (In millions) Credit Facilities: Revolving loans $ 793.9 $ 798.8 $ 492.2 Term loans 790.0 270.0 790.0 Senior Notes – 5.250% 250.0 250.0 250.0 Senior Notes – 6.000% 400.0 400.0 400.0 Receivables facility 40.0 38.0 76.0 Other 16.3 34.5 17.5 Total debt 2,290.2 1,791.3 2,025.7 Less current portions 95.1 86.1 132.6 Less unamortized debt issuance costs 8.9 8.2 9.3 Long-term debt $ 2,186.2 $ 1,697.0 $ 1,883.8 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 $2.3 billion , comprised of a revolving credit facility of $1.5 billion and a term loan in the original principal amount of $800.0 million (the “Fifth A&R Credit Facilities”). At December 29, 2018 , the Company had letters of credit outstanding in the aggregate principal amount of $22.2 million , and $683.9 million of availability under the Fifth A&R Credit Agreement. The weighted average interest rates on average borrowings under the Fifth A&R Credit Agreement and the former credit agreement were 4.5% and 3.2% for the three months ended December 29, 2018 and December 30, 2017 , 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: (i) 5.25 through the second quarter of fiscal 2019, (ii) 5.00 for the third quarter of fiscal 2019 through the first quarter of fiscal 2020, (iii) 4.75 for the second quarter of fiscal 2020 through the fourth quarter of fiscal 2020 and (iv) 4.50 for the first quarter of fiscal 2021 and thereafter. The Company’s leverage ratio was 4.48 at December 29, 2018 . 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 December 29, 2018 . The Company’s interest coverage ratio was 5.17 for the twelve months ended December 29, 2018 . 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 Common Share repurchases, 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 the amount set forth in the Fifth A&R Credit Agreement for such fiscal year ( $200.0 million for fiscal 2019 and $225.0 million for fiscal 2020 and thereafter). Receivables Facility Under the Master Repurchase Agreement (including the annexes thereto, the “Repurchase Agreement”) and a Master Framework Agreement (the “Framework Agreement” and, together with the Repurchase Agreement, the “Receivables Facility”), as amended, 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 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 Sheet, primarily as a result of the Company’s requirement to repurchase receivables sold. As of December 29, 2018 and December 30, 2017 , there were $40.0 million and $38.0 million , respectively, in borrowings on receivables pledged as collateral under the Receivables Facility, and the carrying value of the receivables pledged as collateral was $44.4 million and $42.2 million , respectively. As of December 29, 2018 and December 30, 2017 , there was $0.2 million and $0.1 million , respectively, of availability under the Receivables Facility. 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 $1,300.0 million at December 29, 2018 , $1,300.0 million at December 30, 2017 and $800.0 million at September 30, 2018 , 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 December 29, 2018 are shown in the table below: Notional Amount Effective Expiration Fixed $ 150 (b) 2/7/2017 5/7/2019 2.12 % 50 (b) 2/7/2017 5/7/2019 2.25 % 50 2/28/2018 5/28/2019 2.01 % 200 (c) 12/20/2016 6/20/2019 2.12 % 250 (d) 1/8/2018 6/8/2020 2.09 % 100 6/20/2018 10/20/2020 2.15 % 200 (d) 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 % (a) The effective date refers to the date on which interest payments were first hedged by the applicable swap agreement. (b) Interest payments made during the three-month period of each year that begins with the month and day of the effective date are hedged by the swap agreement. (c) Interest payments made during the six-month period of each year that begins with the month and day of the effective date are hedged by the swap agreement. (d) Notional amount adjusts in accordance with a specified seasonal schedule. This represents the maximum notional amount at any point in time. Estimated Fair Values The methods and assumptions used to estimate the fair values of the Company’s debt instruments are described below: Credit Facilities The interest rate currently available to the Company fluctuates with the applicable LIBO rate, prime rate or Federal Funds Effective Rate and thus the carrying value is a reasonable estimate of fair value. The fair value measurement for the credit facilities was classified in Level 2 of the fair value hierarchy. 5.250% Senior Notes The fair value of the 5.250% Senior Notes was determined based on the trading of the 5.250% Senior Notes in the open market. The difference between the carrying value and the fair value of the 5.250% Senior Notes represents the premium or discount on that date. Based on the trading value on or around December 29, 2018 , the fair value of the 5.250% Senior Notes was approximately $230.0 million . The fair value measurement for the 5.250% Senior Notes was classified in Level 1 of the fair value hierarchy. 6.000% Senior Notes The fair value of the 6.000% Senior Notes was determined based on the trading of the 6.000% Senior Notes in the open market. The difference between the carrying value and the fair value of the 6.000% Senior Notes represents the premium or discount on that date. Based on the trading value on or around December 29, 2018 , the fair value of the 6.000% Senior Notes was approximately $398.5 million . The fair value measurement for the 6.000% Senior Notes was classified in Level 1 of the fair value hierarchy. Accounts Receivable Pledged The interest rate on the short-term debt associated with accounts receivable pledged under the Receivables Facility fluctuated with the applicable LIBOR and thus the carrying value is a reasonable estimate of fair value. The fair value measurement for the Receivables Facility was classified in Level 2 of the fair value hierarchy. Weighted Average Interest Rate The weighted average interest rates on the Company’s debt were 4.8% and 4.7% for the three months ended December 29, 2018 and December 30, 2017 , respectively. |
EQUITY
EQUITY | 3 Months Ended |
Dec. 29, 2018 | |
Equity [Abstract] | |
EQUITY | EQUITY The following table provides a summary of the changes in total equity, equity attributable to controlling interest, and equity attributable to noncontrolling interests for the three months ended December 29, 2018 and December 30, 2017 (in millions): Common Shares and Capital in Excess of Stated Value Retained Earnings Treasury Shares Accumulated Other Comprehensive Loss Total Equity - Controlling Interest Non-controlling Interest Total Equity Balance at September 30, 2017 $ 407.6 $ 978.2 $ (667.8 ) $ (69.2 ) $ 648.8 $ 12.9 $ 661.7 Net income (loss) — (21.2 ) — — (21.2 ) — (21.2 ) Other comprehensive income (loss) — — — 1.0 1.0 — 1.0 Share-based compensation 6.0 — — — 6.0 — 6.0 Dividends declared ($0.530 per share) — (31.1 ) — — (31.1 ) — (31.1 ) Treasury share purchases — — (96.6 ) — (96.6 ) — (96.6 ) Treasury share issuances — — 1.6 — 1.6 — 1.6 Acquisition of remaining noncontrolling interest in Gavita (5.7 ) — — — (5.7 ) (7.9 ) (13.6 ) Balance at December 30, 2017 $ 407.9 $ 925.9 $ (762.8 ) $ (68.2 ) $ 502.8 $ 5.0 $ 507.8 Balance at September 30, 2018 $ 420.3 $ 919.9 $ (939.6 ) $ (46.0 ) $ 354.6 $ 5.0 $ 359.6 Adoption of new accounting pronouncements (Note 1) — 26.0 — (16.9 ) 9.1 — 9.1 Net income (loss) — (79.6 ) — — (79.6 ) (0.1 ) (79.7 ) Other comprehensive income (loss) — — — (12.4 ) (12.4 ) — (12.4 ) Share-based compensation 6.6 — — — 6.6 — 6.6 Dividends declared ($0.550 per share) — (30.9 ) — — (30.9 ) — (30.9 ) Treasury share issuances (1.0 ) — 1.9 — 0.9 — 0.9 Balance at December 29, 2018 $ 425.9 $ 835.4 $ (937.7 ) $ (75.3 ) $ 248.3 $ 4.9 $ 253.2 Share Repurchases In August 2014 , the Scotts Miracle-Gro Board of Directors authorized the repurchase of up to $500.0 million 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 million increase to the share repurchase authorization ending on September 30, 2019 . The amended authorization allows for repurchases of Common Shares of up to $1.0 billion through September 30, 2019 . 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, which expires September 30, 2019, may be suspended or discontinued at any time, and there can be no guarantee as to the timing or amount of any repurchases. There were no share repurchases under the program during the three months ended December 29, 2018 . During the three months ended December 30, 2017 , Scotts Miracle-Gro repurchased 1.0 million Common Shares for $96.6 million . From the inception of this share repurchase program in the fourth quarter of fiscal 2014 through December 29, 2018 , Scotts Miracle-Gro repurchased approximately 8.3 million Common Shares for $714.6 million . Acquisition of Sunlight Supply On June 4, 2018, Scotts Miracle-Gro issued 0.3 million Common Shares, which represented a carrying value of $20.7 million , out of its treasury shares for payment of a portion of the purchase price for the acquisition of Sunlight Supply. Gavita On October 2, 2017 , the Company’s Hawthorne segment acquired the remaining 25% noncontrolling interest in Gavita, including Agrolux, for $69.2 million , plus payment of contingent consideration of $3.0 million . The carrying value of the 25% noncontrolling interest consisted of long-term debt of $55.6 million and noncontrolling interest of $7.9 million . The difference between purchase price and carrying value of $5.7 million was recognized in the “Common shares and capital in excess of $0.01 stated value per share” line within “Total equity—controlling interest” in the Condensed Consolidated Balance Sheets. Share-Based Awards Scotts Miracle-Gro grants share-based awards annually to officers and certain other employees of the Company and non-employee directors of Scotts Miracle-Gro. The share-based awards have consisted of stock options, restricted stock units, deferred stock units and performance-based awards. All of these share-based awards have been made under plans approved by the shareholders of Scotts Miracle-Gro. If available, Scotts Miracle-Gro will typically use treasury shares, or if not available, newly-issued Common Shares, in satisfaction of its share-based awards. On October 30, 2017, Scotts Miracle-Gro issued 0.2 million upfront performance-based award units (the “Hawthorne PFAs”), covering a four -year performance period, with an estimated fair value of $20.2 million on the date of grant, to certain Hawthorne segment employees as part of its Project Focus initiative. These awards were to vest after approximately four years subject to the achievement of specific performance goals aligned with the strategic objectives of the Company’s Project Focus initiatives. Based on the extent to which the performance goals were achieved, vested shares were to range from 50 to 250 percent of the target award amount. The performance goals were based on cumulative Hawthorne non-GAAP adjusted earnings. These performance-based award units were to accrue cash dividend equivalents payable upon vesting of the awards. During the three months ended December 29, 2018 , in light of Hawthorne’s acquisition of Sunlight Supply and the fiscal 2018 downturn in the Hawthorne business, the Company authorized the cancellation of the Hawthorne PFAs and the issuance of a one-time performance bonus grant for certain Hawthorne segment employees with targets based on specified levels of Hawthorne non-GAAP adjusted earnings, subject to participant consent. Subsequent to December 29, 2018, the Company awarded restricted stock units, performance-based award units and deferred stock units representing 0.2 million Common Shares to employees and members of the Board of Directors with an estimated fair value of $17.1 million on the date of grant. The following is a summary of the share-based awards granted during each of the periods indicated: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, Employees Restricted stock units 2,576 4,914 Performance units 1,078 204,702 Board of Directors Deferred stock units 1,445 449 Total share-based awards 5,099 210,065 Aggregate fair value at grant dates (in millions) $ 0.4 $ 20.6 Total share-based compensation was as follows for each of the periods indicated: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Share-based compensation $ 6.6 $ 6.0 Tax benefit recognized 1.7 2.3 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rates related to continuing operations for the three months ended December 29, 2018 and December 30, 2017 were 22.0% and 76.9% , 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. At September 30, 2017, the Company had a net deferred tax liability of $157.5 million . During the three months ended December 30, 2017 , the Company recognized a one-time $45.9 million net tax benefit adjustment reflecting the revaluation of its net deferred tax liability at the lower tax rate under the Act. In addition, as part of the Act, the Company recognized a one-time tax expense on deemed repatriated earnings and cash of foreign subsidiaries as required by the new law of $14.0 million , partially offset by the recognition and application of foreign tax credits associated with these foreign subsidiaries of $13.9 million . SAB 118 provides guidance on accounting for the tax effects of the Act. In accordance with SAB 118, any necessary measurement adjustments will be recorded and disclosed within one year from the enactment date within the period the adjustments are determined. Accordingly, the Company has accounted for the various elements of the Act as follows: Statutory Tax Rate Reduction: The Act reduces the federal corporate statutory tax rate to 21% effective January 1, 2018. As the Company’s fiscal year end falls on September 30, the federal corporate statutory tax rate for fiscal 2018 was prorated to 24.5% , with the statutory tax rate for fiscal 2019 and beyond at 21% . As a result of the reduction in statutory tax rate, the Company recorded a reduction in the value of its net deferred tax liability and a net benefit of $44.6 million was recorded in the “Income tax expense from continuing operations” line in the Consolidated Statement of Operations during fiscal 2018. Deemed Repatriation Transition Tax: The Act requires companies to pay a mandatory one-time U.S. transition tax on deemed repatriation of certain undistributed earnings of foreign subsidiaries. For fiscal 2018, the Company estimated U.S. federal tax on the deemed repatriation of $21.2 million based on $97.8 million of undistributed earnings of foreign subsidiaries. This expense is largely offset by $18.2 million of foreign tax credits, $0.5 million of which was carried forward from prior periods and offset by a complete valuation allowance. Other Provisions of the Act: Certain other aspects of the Act not expected to have a material effect on the Company’s financial statements are effective for fiscal year 2019. These include those related to performance based compensation and others related to international taxation such as Global Intangible Low-Taxed Income (“GILTI”), Foreign Derived Intangible Income (“FDII”), and the Base Erosion Anti-Abuse Tax (“BEAT”). The Company has elected to account for GILTI under the period cost method. Estimates for these provisions have been included as components of the Company’s annualized effective tax rate and recorded in the “Income tax benefit from continuing operations” line in the Condensed Consolidated Statement of Operations for the three months ended December 29, 2018 . 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 2015. The Company is currently under examination by certain U.S. state and local tax authorities. The tax periods under examination are limited to fiscal years 2009 through 2017 . In addition to the aforementioned audits, certain other tax deficiency notices and refund claims for previous years remain unresolved. The Company 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 audit outcomes and the timing of audit payments 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. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Dec. 29, 2018 | |
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 December 29, 2018 , $4.2 million was accrued in the “Other liabilities” line in the Condensed Consolidated Balance Sheet for environmental actions, the majority of which are for site remediation. The amounts accrued are believed to be 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. In connection with the sale of wild bird food products that were the subject of a voluntary recall in 2008, the Company, along with its Chief Executive Officer, have been named as defendants in four actions filed on and after June 27, 2012, which have been consolidated, and, on March 31, 2017, certified as a class action in the United States District Court for the Southern District of California as In re Morning Song Bird Food Litigation , Lead Case No. 3:12-cv-01592-JAH-AGS. The plaintiffs allege various statutory and common law claims associated with the Company’s sale of wild bird food products and a plea agreement entered into in previously pending government proceedings associated with such sales. The plaintiffs allege, among other things, a class action on behalf of all persons and entities in the United States who purchased certain bird food products. The plaintiffs assert: (i) hundreds of millions of dollars in monetary damages (actual, compensatory, consequential, and restitution); (ii) punitive and treble damages; (iii) injunctive and declaratory relief; (iv) pre-judgment and post-judgment interest; and (v) costs and attorneys’ fees. The Company and its Chief Executive Officer dispute the plaintiffs’ assertions and have vigorously defended the consolidated action. The parties reached an agreement to settle this matter, which the parties memorialized in a settlement agreement submitted to the Court for approval on December 7, 2018. On January 31, 2019, the Court preliminarily approved the settlement, and scheduled a final fairness hearing for June 3, 2019. At December 29, 2018 , $85.0 million was accrued for a probable loss related to this matter in the “Other current liabilities” line in the Condensed Consolidated Balance Sheet. During the three months ended December 29, 2018 , the Company recognized insurance recoveries of $5.0 million related to this matter in the “Income (loss) from discontinued operations, net of tax” line in the Condensed Consolidated Statements of Operations. There can be no assurance that future developments with respect to this action, whether as a result of an adverse outcome or as a result of significant defense costs, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company was named as a defendant in In re Scotts EZ Seed Litigation , Case No. 12-cv-4727 (VB), a New York and California class action lawsuit filed August 9, 2012 in the United States District Court for the Southern District of New York that asserted claims under false advertising and other legal theories based on a marketing statement on the Company’s EZ Seed grass seed product from 2009 to 2012. The plaintiffs sought, on behalf of themselves and purported class members, various forms of monetary and non-monetary relief, including statutory damages that they contend could amount to hundreds of millions of dollars. The Company defended the action vigorously, and disputed the plaintiffs’ claims and theories, including the recoverability of statutory damages. In 2017, the Court eliminated certain claims, narrowed the case in certain respects, and permitted the case to continue proceeding as a class action. On August 7, 2017, the Court requested briefs on the Company’s request for interlocutory review of issues relating to the recoverability of statutory damages in a class action by the United States Court of Appeals for the Second Circuit and, on August 31, 2017, approved that request. On January 8, 2018, however, the Second Circuit denied the interlocutory appeal request. The parties engaged in mediation on April 9, 2018 and agreed in principle to a preliminary settlement of the outstanding claims on April 10, 2018. The preliminary settlement required the Company to pay certain attorneys’ and administrative fees and provide certain payments to the class members. The preliminary settlement was approved by the court on December 19, 2018, and this case is now resolved, pending the final payment of the claims made by class members (which is currently underway and should conclude by February 28, 2019). At December 29, 2018 , $12.2 million was accrued for a probable loss related to this matter in the “Other current liabilities” line in the Condensed Consolidated Balance Sheet. During the three months ended December 29, 2018 , the Company recognized a charge of $0.5 million for a probable loss related to this matter in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations. The resolution of the claims process may result in additional losses in excess of the amount accrued, however, the Company does not believe a reasonably possible loss in excess of the amount accrued would be material to, nor have a material adverse 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. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Dec. 29, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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. At December 29, 2018 , the notional amount of outstanding currency forward contracts was $117.5 million , with a fair value of $0.5 million . At December 30, 2017 , the notional amount of outstanding currency forward contracts was $302.3 million , with a fair value of $(4.7) million . At September 30, 2018 , the notional amount of outstanding currency forward contracts was $117.2 million , with a fair value of $(0.6) million . The fair value of currency forward contracts is determined using forward rates in commonly quoted intervals for the full term of the contracts. The outstanding contracts 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. Since the interest rate swap agreements have been designated as hedging instruments, unrealized gains or losses resulting from adjusting these swaps to fair value are recorded as elements of AOCI within the Condensed Consolidated Balance Sheets. The fair value of the swap agreements is determined 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 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 $1,300.0 million at December 29, 2018 , $1,300.0 million at December 30, 2017 and $800.0 million at September 30, 2018 . Refer to “NOTE 9. DEBT” for the terms of the swap agreements outstanding at December 29, 2018 . Included in the AOCI balance at December 29, 2018 was a gain of $0.1 million 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 requirements. The contracts are designated as hedges of the Company’s exposure to future cash flow fluctuations associated with the cost of urea. The objective of the hedges is to mitigate the earnings and cash flow volatility attributable to the risk of changing prices. Since the contracts have been designated as hedging instruments, unrealized gains or losses resulting from adjusting these contracts to fair value are recorded as elements of AOCI within the Condensed Consolidated Balance Sheets. Realized gains or losses remain as a component of AOCI until the related inventory is sold. Upon sale of the underlying inventory, the gain or loss is reclassified to cost of sales. Included in the AOCI balance at December 29, 2018 was a gain of $0.6 million related to urea derivatives that is expected to be reclassified to earnings during the next twelve months, consistent with the timing of the underlying hedged transactions. The Company also uses derivatives to partially mitigate the effect of fluctuating diesel and resin costs on operating results. These financial instruments are carried at fair value within the Condensed Consolidated Balance Sheets. Changes in the fair value of derivative contracts that qualify for hedge accounting are recorded in AOCI. The effective portion of the change in fair value remains as a component of AOCI until the related commodity is consumed, at which time the accumulated gain or loss on the derivative contract is reclassified to cost of sales. Changes in the fair value of derivatives that do not qualify for hedge accounting are recorded as an element of cost of sales. At December 29, 2018 , there were no amounts included within AOCI. The Company had the following outstanding commodity contracts that were entered into to hedge forecasted purchases: COMMODITY DECEMBER 29, DECEMBER 30, SEPTEMBER 30, Urea 52,000 tons 40,500 tons 88,000 tons Resin 12,600,000 pounds — — Diesel 4,410,000 gallons 4,536,000 gallons 5,460,000 gallons Heating Oil 1,218,000 gallons 1,344,000 gallons 1,218,000 gallons Fair Values of Derivative Instruments The fair values of the Company’s derivative instruments were as follows: ASSETS / (LIABILITIES) DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS BALANCE SHEET LOCATION DECEMBER 29, DECEMBER 30, SEPTEMBER 30, (In millions) Interest rate swap agreements Prepaid and other current assets $ 1.8 $ 1.4 $ 2.0 Other assets 0.6 0.2 1.8 Other current liabilities (1.6 ) (1.0 ) — Other liabilities (3.1 ) — — Commodity hedging instruments Prepaid and other current assets 0.8 2.6 6.1 Total derivatives designated as hedging instruments $ (1.5 ) $ 3.2 $ 9.9 DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS BALANCE SHEET LOCATION Currency forward contracts Prepaid and other current assets $ 0.8 $ 0.4 $ 0.9 Other current liabilities (0.3 ) (5.1 ) (1.5 ) Commodity hedging instruments Prepaid and other current assets — 1.8 1.7 Other current liabilities (2.4 ) — — Total derivatives not designated as hedging instruments (1.9 ) (2.9 ) 1.1 Total derivatives $ (3.4 ) $ 0.3 $ 11.0 The effect of derivative instruments on AOCI and the Condensed Consolidated Statements of Operations was as follows: DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS AMOUNT OF GAIN / (LOSS) RECOGNIZED IN AOCI THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Interest rate swap agreements $ (4.6 ) $ 0.4 Commodity hedging instruments (3.3 ) 0.4 Total $ (7.9 ) $ 0.8 DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS RECLASSIFIED FROM AOCI INTO STATEMENT OF OPERATIONS AMOUNT OF GAIN / (LOSS) THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Interest rate swap agreements Interest expense $ (0.1 ) $ 0.1 Commodity hedging instruments Cost of sales 0.2 — Total $ 0.1 $ 0.1 DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS RECOGNIZED IN STATEMENT OF OPERATIONS AMOUNT OF GAIN / (LOSS) THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Currency forward contracts Other income, net $ 3.5 $ (2.6 ) Commodity hedging instruments Cost of sales (3.7 ) 1.3 Total $ (0.2 ) $ (1.3 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Dec. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The following describes the valuation methodologies used for financial assets and liabilities measured at fair value on a recurring basis, as well as the general classification within the valuation hierarchy. Cash Equivalents Cash equivalents consist of highly liquid financial instruments with original maturities of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities. Derivatives Derivatives consist of currency, interest rate and commodity derivative instruments. Currency forward contracts are valued using observable forward rates in commonly quoted intervals for the full term of the contracts. 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. Commodity contracts are measured using observable commodity exchange prices in active markets. These derivative instruments are classified within Level 2 of the valuation hierarchy and are included within other assets and other liabilities in the Company’s Condensed Consolidated Balance Sheets, except for derivative instruments expected to be settled within the next 12 months, which are included within prepaid and other current assets and other current liabilities. Other Other assets include investment securities in non-qualified retirement plan assets and the Company’s option to increase its economic interest in Bonnie Plants, Inc. (the “Bonnie Option”). Other liabilities include the contingent consideration related to the acquisition of Sunlight Supply. Investment securities in non-qualified retirement plan assets are valued using observable market prices in active markets and are classified within Level 1 of the valuation hierarchy. The fair value of the Bonnie Option is determined using a simulation approach, whereby the total value of the loan receivable and optional exchange for additional equity was estimated considering a distribution of possible future cash flows discounted to present value using an appropriate discount rate, and is classified in Level 3 of the fair value hierarchy. The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 29, 2018 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total (In millions) Assets Cash equivalents $ 1.1 $ — $ — $ 1.1 Derivatives Interest rate swap agreements — 2.4 — 2.4 Currency forward contracts — 0.8 — 0.8 Commodity hedging instruments — 0.8 — 0.8 Other 18.2 — 13.0 31.2 Total $ 19.3 $ 4.0 $ 13.0 $ 36.3 Liabilities Derivatives Interest rate swap agreements $ — $ (4.7 ) $ — $ (4.7 ) Currency forward contracts — (0.3 ) — (0.3 ) Commodity hedging instruments — (2.4 ) — (2.4 ) Other — — (0.9 ) (0.9 ) Total $ — $ (7.4 ) $ (0.9 ) $ (8.3 ) The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 30, 2017 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total (In millions) Assets Cash equivalents $ 30.9 $ — $ — $ 30.9 Derivatives Interest rate swap agreements — 1.6 — 1.6 Currency forward contracts — 0.4 — 0.4 Commodity hedging instruments — 4.4 — 4.4 Other 17.2 — 11.8 29.0 Total $ 48.1 $ 6.4 $ 11.8 $ 66.3 Liabilities Derivatives Interest rate swap agreements $ — $ (1.0 ) $ — $ (1.0 ) Currency forward contracts — (5.1 ) — (5.1 ) Total $ — $ (6.1 ) $ — $ (6.1 ) The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2018 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total (In millions) Assets Cash equivalents $ 1.4 $ — $ — $ 1.4 Derivatives Interest rate swap agreements — 3.8 — 3.8 Currency forward contracts — 0.9 — 0.9 Commodity hedging instruments — 7.8 — 7.8 Other 19.4 — 13.0 32.4 Total $ 20.8 $ 12.5 $ 13.0 $ 46.3 Liabilities Derivatives Currency forward contracts $ — $ (1.5 ) $ — $ (1.5 ) Other — — (0.9 ) (0.9 ) Total $ — $ (1.5 ) $ (0.9 ) $ (2.4 ) |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Dec. 29, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company divides its operations into three reportable business 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, urban 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. Corporate consists of general and administrative expenses and certain other income/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. Segment performance 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 this measure of 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: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Net sales: U.S. Consumer $ 136.9 $ 125.9 Hawthorne 140.8 76.7 Other 20.4 18.9 Consolidated $ 298.1 $ 221.5 Segment Profit (Loss): U.S. Consumer $ (43.1 ) $ (37.9 ) Hawthorne 4.4 1.7 Other (4.0 ) (4.0 ) Total Segment Loss (42.7 ) (40.2 ) Corporate (27.9 ) (25.0 ) Intangible asset amortization (8.3 ) (6.9 ) Impairment, restructuring and other (6.0 ) 0.2 Equity in income of unconsolidated affiliates 1.3 0.6 Interest expense (25.2 ) (17.8 ) Other non-operating income, net 2.9 2.5 Loss from continuing operations before income taxes $ (105.9 ) $ (86.6 ) DECEMBER 29, DECEMBER 30, SEPTEMBER 30, (In millions) Total assets: U.S. Consumer $ 1,889.5 $ 1,836.1 $ 1,702.2 Hawthorne 961.2 674.4 978.6 Other 163.7 169.4 161.3 Corporate 210.8 230.9 212.4 Consolidated $ 3,225.2 $ 2,910.8 $ 3,054.5 The following table presents net sales by product category: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) US Consumer: Lawn care $ 49.7 $ 35.0 Growing media 38.3 37.6 Controls 30.2 31.4 Roundup ® Restated Marketing Agreement 8.1 8.3 Other, primarily gardening and landscape 10.6 13.6 Hawthorne: Indoor, urban and hydroponic gardening 140.8 76.7 Other: Growing media 10.9 11.0 Other, primarily lawn care, gardening and controls 9.5 7.9 Total net sales $ 298.1 $ 221.5 The following table presents net sales by geographic area: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Net sales: United States $ 246.9 $ 162.5 International 51.2 59.0 $ 298.1 $ 221.5 |
FINANCIAL INFORMATION FOR SUBSI
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS | 3 Months Ended |
Dec. 29, 2018 | |
Condensed Financial Information of Parent Subsidiary Guarantors and Subsidiary Non Guarantors [Abstract] | |
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS | FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS The 6.000% and 5.250% Senior Notes were issued on October 13, 2015 and December 15, 2016, respectively, and are guaranteed by certain of the Company’s domestic subsidiaries and, therefore, the Company reports condensed consolidating financial information in accordance with SEC Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. The guarantees are “full and unconditional,” as those terms are used in Regulation S-X Rule 3-10, except that a subsidiary’s guarantee will be released in certain customary circumstances, such as (1) upon any sale or other disposition of all or substantially all of the assets of the subsidiary (including by way of merger or consolidation) to any person other than Scotts Miracle-Gro or any “restricted subsidiary” under the indentures governing the 6.000% and 5.250% Senior Notes; (2) if the subsidiary merges with and into Scotts Miracle-Gro, with Scotts Miracle-Gro surviving such merger; (3) if the subsidiary is designated an “unrestricted subsidiary” in accordance with the indentures governing the 6.000% and 5.250% Senior Notes or otherwise ceases to be a “restricted subsidiary” (including by way of liquidation or dissolution) in a transaction permitted by such indenture; (4) upon legal or covenant defeasance; (5) at the election of Scotts Miracle-Gro following the subsidiary’s release as a guarantor under the new credit agreement, except a release by or as a result of the repayment of the new credit agreement; or (6) if the subsidiary ceases to be a “restricted subsidiary” and the subsidiary is not otherwise required to provide a guarantee of the 6.000% and 5.250% Senior Notes pursuant to the indentures governing the 6.000% and 5.250% Senior Notes. The following 100% directly or indirectly owned subsidiaries fully and unconditionally guarantee at December 29, 2018 the 6.000% and 5.250% Senior Notes on a joint and several basis: Gutwein & Co., Inc.; Hyponex Corporation; Miracle-Gro Lawn Products, Inc.; OMS Investments, Inc.; Rod McLellan Company; Sanford Scientific, Inc.; Scotts Temecula Operations, LLC; Scotts Manufacturing Company; Scotts Products Co.; Scotts Professional Products Co.; Scotts-Sierra Investments LLC; SMG Growing Media, Inc.; Swiss Farms Products, Inc.; SMGM LLC; The Scotts Company LLC; The Hawthorne Gardening Company; Hawthorne Hydroponics LLC; HGCI, Inc.; GenSource, Inc.; SLS Holdings, Inc. and SMG ITO Holdings, Inc. (collectively, the “Guarantors”). The following information presents Condensed Consolidating Statements of Operations for the three months ended December 29, 2018 and December 30, 2017 , Condensed Consolidating Statements of Comprehensive Income (Loss) for the three months ended December 29, 2018 and December 30, 2017 , Condensed Consolidating Statements of Cash Flows for the three months ended December 29, 2018 and December 30, 2017 , and Condensed Consolidating Balance Sheets as of December 29, 2018 , December 30, 2017 and September 30, 2018 . The condensed consolidating financial information presents, in separate columns, financial information for: Scotts Miracle-Gro on a Parent-only basis, carrying its investment in subsidiaries under the equity method; Guarantors on a combined basis, carrying their investments in subsidiaries which do not guarantee the debt (collectively, the “Non-Guarantors”) under the equity method; Non-Guarantors on a combined basis; and eliminating entries. The eliminating entries primarily reflect intercompany transactions, such as interest expense, accounts receivable and payable, short and long-term debt, and the elimination of equity investments, return on investments and income in subsidiaries. Because the Parent is obligated to pay the unpaid principal amount and interest on all amounts borrowed by the Guarantors or Non-Guarantors under the credit facility (and was obligated to pay the unpaid principal amount and interest on all amounts borrowed by the Guarantors and Non-Guarantors under the previous senior secured five -year revolving loan facility), the borrowings and related interest expense for the loans outstanding of the Guarantors and Non-Guarantors are also presented in the accompanying Parent-only financial information, and are then eliminated. Included in the Parent Condensed Consolidating Statement of Cash Flows for the three months ended December 29, 2018 and December 30, 2017 are $49.1 million and $182.5 million , respectively, of dividends paid by the Guarantors and Non-Guarantors to the Parent representing return of investments and as such are classified within cash flows from investing activities. THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Statement of Operations for the three months ended December 29, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated Net sales $ — $ 232.1 $ 66.0 $ — $ 298.1 Cost of sales — 206.9 54.2 — 261.1 Cost of sales—impairment, restructuring and other — 2.2 0.3 — 2.5 Gross profit — 23.0 11.5 — 34.5 Operating expenses: Selling, general and administrative — 101.4 14.6 0.3 116.3 Impairment, restructuring and other — 3.4 0.1 — 3.5 Other (income) expense, net (0.2 ) 0.1 (0.3 ) — (0.4 ) Income (loss) from operations 0.2 (81.9 ) (2.9 ) (0.3 ) (84.9 ) Equity (income) loss in subsidiaries 69.3 (1.5 ) — (67.8 ) — Equity in (income) loss of unconsolidated affiliates — (1.4 ) 0.1 — (1.3 ) Interest expense 18.8 18.3 0.9 (12.8 ) 25.2 Other non-operating (income) expense, net (5.9 ) (2.3 ) (7.5 ) 12.8 (2.9 ) Income (loss) from continuing operations before income taxes (82.0 ) (95.0 ) 3.6 67.5 (105.9 ) Income tax expense (benefit) from continuing operations (2.8 ) (21.3 ) 0.8 — (23.3 ) Income (loss) from continuing operations (79.2 ) (73.7 ) 2.8 67.5 (82.6 ) Income (loss) from discontinued operations, net of tax — 3.0 (0.1 ) — 2.9 Net income (loss) $ (79.2 ) $ (70.7 ) $ 2.7 $ 67.5 $ (79.7 ) Net (income) loss attributable to noncontrolling interest — — — 0.1 0.1 Net income (loss) attributable to controlling interest $ (79.2 ) $ (70.7 ) $ 2.7 $ 67.6 $ (79.6 ) THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended December 29, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated Net income (loss) $ (79.2 ) $ (70.7 ) $ 2.7 $ 67.5 $ (79.7 ) Other comprehensive income (loss), net of tax: Net foreign currency translation adjustment (5.3 ) — (5.3 ) 5.3 (5.3 ) Net change in derivatives (8.0 ) (3.5 ) — 3.5 (8.0 ) Net change in pension and other post-retirement benefits 0.9 0.1 0.8 (0.9 ) 0.9 Total other comprehensive income (loss) (12.4 ) (3.4 ) (4.5 ) 7.9 (12.4 ) Comprehensive income (loss) (91.6 ) (74.1 ) (1.8 ) 75.4 (92.1 ) Comprehensive (income) loss attributable to noncontrolling interest — — — 0.1 0.1 Comprehensive income (loss) attributable to controlling interest $ (91.6 ) $ (74.1 ) $ (1.8 ) $ 75.5 $ (92.0 ) THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Statement of Cash Flows for the three months ended December 29, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (19.1 ) $ (193.6 ) $ (20.7 ) $ — $ (233.4 ) INVESTING ACTIVITIES (a) Investments in property, plant and equipment — (12.1 ) (0.6 ) — (12.7 ) Investments in acquired businesses, net of cash acquired — (6.6 ) — — (6.6 ) Other investing, net — 0.9 1.3 — 2.2 Return of investments from affiliates 49.1 — — (49.1 ) — Investing cash flows from (to) affiliates (0.2 ) (2.3 ) — 2.5 — Net cash provided by (used in) investing activities 48.9 (20.1 ) 0.7 (46.6 ) (17.1 ) FINANCING ACTIVITIES Borrowings under revolving and bank lines of credit and term loans — 347.6 39.2 — 386.8 Repayments under revolving and bank lines of credit and term loans — (86.6 ) (29.7 ) — (116.3 ) Dividends paid (30.4 ) (49.1 ) — 49.1 (30.4 ) Purchase of Common Shares (0.5 ) — — — (0.5 ) Payments on seller notes — (0.8 ) — — (0.8 ) Cash received from exercise of stock options 1.1 — — — 1.1 Financing cash flows from (to) affiliates — 0.2 2.3 (2.5 ) — Net cash provided by (used in) financing activities (29.8 ) 211.3 11.8 46.6 239.9 Effect of exchange rate changes on cash — — (0.7 ) — (0.7 ) Net increase (decrease) in cash and cash equivalents — (2.4 ) (8.9 ) — (11.3 ) Cash and cash equivalents at beginning of period — 3.0 30.9 — 33.9 Cash and cash equivalents at end of period $ — $ 0.6 $ 22.0 $ — $ 22.6 (a) Cash received by the Parent from the Guarantors and Non-Guarantors in the form of dividends in the amount of $49.1 million represent return of investments and are included in cash flows from investing activities. THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Balance Sheet As of December 29, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 0.6 $ 22.0 $ — $ 22.6 Accounts receivable, net — 107.2 56.6 — 163.8 Accounts receivable pledged — 44.4 — — 44.4 Inventories — 659.3 86.1 — 745.4 Prepaid and other current assets 2.0 79.2 21.3 — 102.5 Total current assets 2.0 890.7 186.0 — 1,078.7 Investment in unconsolidated affiliates — 36.6 0.7 — 37.3 Property, plant and equipment, net — 458.8 61.0 — 519.8 Goodwill — 420.1 108.0 11.6 539.7 Intangible assets, net — 745.7 93.9 7.2 846.8 Other assets 9.7 163.5 29.7 — 202.9 Equity investment in subsidiaries 746.1 — — (746.1 ) — Intercompany assets 1,736.3 — 2.0 (1,738.3 ) — Total assets $ 2,494.1 $ 2,715.4 $ 481.3 $ (2,465.6 ) $ 3,225.2 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ 47.7 $ 81.7 $ 13.4 $ (47.7 ) $ 95.1 Accounts payable — 206.1 30.9 — 237.0 Other current liabilities 10.6 228.9 23.0 — 262.5 Total current liabilities 58.3 516.7 67.3 (47.7 ) 594.6 Long-term debt 2,185.0 1,438.7 106.4 (1,543.9 ) 2,186.2 Distributions in excess of investment in unconsolidated affiliate — 21.9 — — 21.9 Other liabilities 2.5 140.4 26.4 — 169.3 Equity investment in subsidiaries — 2.5 — (2.5 ) — Intercompany liabilities — 119.8 — (119.8 ) — Total liabilities 2,245.8 2,240.0 200.1 (1,713.9 ) 2,972.0 Total equity—controlling interest 248.3 475.4 281.2 (756.6 ) 248.3 Noncontrolling interest — — — 4.9 4.9 Total equity 248.3 475.4 281.2 (751.7 ) 253.2 Total liabilities and equity $ 2,494.1 $ 2,715.4 $ 481.3 $ (2,465.6 ) $ 3,225.2 THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Statement of Operations for the three months ended December 30, 2017 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated Net sales $ — $ 147.5 $ 74.0 $ — $ 221.5 Cost of sales — 127.0 60.5 — 187.5 Gross profit — 20.5 13.5 — 34.0 Operating expenses: Selling, general and administrative — 90.4 17.5 0.3 108.2 Impairment, restructuring and other — (0.2 ) — — (0.2 ) Other (income) expense, net (0.2 ) (1.1 ) (0.8 ) — (2.1 ) Income (loss) from operations 0.2 (68.6 ) (3.2 ) (0.3 ) (71.9 ) Equity (income) loss in subsidiaries 18.0 1.0 — (19.0 ) — Other non-operating (income) loss (3.9 ) — (4.7 ) 8.6 — Equity in (income) loss of unconsolidated affiliates — (0.5 ) (0.1 ) — (0.6 ) Interest expense 16.9 8.8 0.7 (8.6 ) 17.8 Other non-operating (income) expense, net — (2.5 ) — — (2.5 ) Income (loss) from continuing operations before income taxes (30.8 ) (75.4 ) 0.9 18.7 (86.6 ) Income tax expense (benefit) from continuing operations (9.8 ) (57.5 ) 0.7 — (66.6 ) Income (loss) from continuing operations (21.0 ) (17.9 ) 0.2 18.7 (20.0 ) Income (loss) from discontinued operations, net of tax — (0.2 ) (1.0 ) — (1.2 ) Net income (loss) $ (21.0 ) $ (18.1 ) $ (0.8 ) $ 18.7 $ (21.2 ) Net (income) loss attributable to noncontrolling interest — — — — — Net income (loss) attributable to controlling interest $ (21.0 ) $ (18.1 ) $ (0.8 ) $ 18.7 $ (21.2 ) THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended December 30, 2017 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated Net income (loss) $ (21.0 ) $ (18.1 ) $ (0.8 ) $ 18.7 $ (21.2 ) Other comprehensive income (loss), net of tax: Net foreign currency translation adjustment — — — — — Net change in derivatives 0.7 0.4 — (0.4 ) 0.7 Net change in pension and other post-retirement benefits 0.3 0.1 0.2 (0.3 ) 0.3 Total other comprehensive income (loss) 1.0 0.5 0.2 (0.7 ) 1.0 Comprehensive income (loss) (20.0 ) (17.6 ) (0.6 ) 18.0 (20.2 ) Comprehensive (income) loss attributable to noncontrolling interest — — — — — Comprehensive income (loss) attributable to controlling interest $ (20.0 ) $ (17.6 ) $ (0.6 ) $ 18.0 $ (20.2 ) THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Statement of Cash Flows for the three months ended December 30, 2017 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (a) $ 9.6 $ (239.2 ) $ 19.6 $ (0.5 ) $ (210.5 ) INVESTING ACTIVITIES (a) Investments in property, plant and equipment — (17.3 ) (2.1 ) — (19.4 ) Investments in loans receivable — (5.3 ) — — (5.3 ) Investments in acquired businesses, net of cash acquired — (40.5 ) (29.5 ) — (70.0 ) Return of investments from affiliates 182.5 — — (182.5 ) — Investing cash flows from (to) affiliates (66.4 ) (66.9 ) — 133.3 — Net cash provided by (used in) investing activities 116.1 (130.0 ) (31.6 ) (49.2 ) (94.7 ) FINANCING ACTIVITIES Borrowings under revolving and bank lines of credit and term loans — 534.6 38.8 — 573.4 Repayments under revolving and bank lines of credit and term loans — (86.7 ) (49.3 ) — (136.0 ) Dividends paid (30.5 ) (182.5 ) (0.5 ) 183.0 (30.5 ) Purchase of Common Shares (96.2 ) — — — (96.2 ) Payments on seller notes — — (3.0 ) — (3.0 ) Cash received from exercise of stock options 1.0 — — — 1.0 Acquisition of noncontrolling interests — — (70.1 ) — (70.1 ) Financing cash flows from (to) affiliates — 66.4 66.9 (133.3 ) — Net cash provided by (used in) financing activities (125.7 ) 331.8 (17.2 ) 49.7 238.6 Effect of exchange rate changes on cash — — 0.6 — 0.6 Net increase (decrease) in cash and cash equivalents — (37.4 ) (28.6 ) — (66.0 ) Cash and cash equivalents at beginning of period — 39.8 80.7 — 120.5 Cash and cash equivalents at end of period $ — $ 2.4 $ 52.1 $ — $ 54.5 (a) Cash received by the Parent from the Guarantors and Non-Guarantors in the form of dividends in the amount of $182.5 million represent return of investments and are included in cash flows from investing activities. Cash received by the Guarantors from the Non-Guarantors in the form of dividends in the amount of $0.5 million represent return on investments and are included in cash flows from operating activities. THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Balance Sheet As of December 30, 2017 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 2.4 $ 52.1 $ — $ 54.5 Accounts receivable, net — 77.4 51.0 — 128.4 Accounts receivable pledged — 42.2 — — 42.2 Inventories — 605.9 90.2 — 696.1 Prepaid and other current assets 1.4 43.2 17.1 — 61.7 Total current assets 1.4 771.1 210.4 — 982.9 Investment in unconsolidated affiliates — 30.9 0.8 — 31.7 Property, plant and equipment, net — 398.3 65.8 — 464.1 Goodwill — 322.9 130.3 11.6 464.8 Intangible assets, net — 639.5 135.4 8.5 783.4 Other assets 7.7 166.3 9.9 — 183.9 Equity investment in subsidiaries 1,125.8 — — (1,125.8 ) — Intercompany assets 1,087.5 157.5 — (1,245.0 ) — Total assets $ 2,222.4 $ 2,486.5 $ 552.6 $ (2,350.7 ) $ 2,910.8 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ 15.0 $ 55.7 $ 30.4 $ (15.0 ) $ 86.1 Accounts payable — 194.3 28.9 — 223.2 Other current liabilities 8.7 117.8 35.3 — 161.8 Total current liabilities 23.7 367.8 94.6 (15.0 ) 471.1 Long-term debt 1,695.6 998.7 56.5 (1,053.8 ) 1,697.0 Distributions in excess of investment in unconsolidated affiliate — 21.9 — — 21.9 Other liabilities 0.3 148.1 59.6 5.0 213.0 Equity investment in subsidiaries — 59.4 — (59.4 ) — Intercompany liabilities — — 152.9 (152.9 ) — Total liabilities 1,719.6 1,595.9 363.6 (1,276.1 ) 2,403.0 Total equity—controlling interest 502.8 890.6 189.0 (1,079.6 ) 502.8 Noncontrolling interest — — — 5.0 5.0 Total equity 502.8 890.6 189.0 (1,074.6 ) 507.8 Total liabilities and equity $ 2,222.4 $ 2,486.5 $ 552.6 $ (2,350.7 ) $ 2,910.8 THE SCOTTS MIRACLE-GRO COMPANY Condensed Consolidating Balance Sheet As of September 30, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 3.0 $ 30.9 $ — $ 33.9 Accounts receivable, net — 172.5 53.5 — 226.0 Accounts receivable pledged — 84.5 — — 84.5 Inventories — 394.5 86.9 — 481.4 Prepaid and other current assets 2.2 44.6 13.1 — 59.9 Total current assets 2.2 699.1 184.4 — 885.7 Investment in unconsolidated affiliates — 35.2 0.9 — 36.1 Property, plant and equipment, net — 464.7 66.1 — 530.8 Goodwill — 420.6 110.8 11.6 543.0 Intangible assets, net — 752.3 97.5 7.5 857.3 Other assets 11.4 164.8 25.4 — 201.6 Equity investment in subsidiaries 860.0 — — (860.0 ) — Intercompany assets 1,422.8 — 6.5 (1,429.3 ) — Total assets $ 2,296.4 $ 2,536.7 $ 491.6 $ (2,270.2 ) $ 3,054.5 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ 40.0 $ 118.4 $ 14.2 $ (40.0 ) $ 132.6 Accounts payable — 119.0 31.5 — 150.5 Other current liabilities 17.8 278.3 33.5 — 329.6 Total current liabilities 57.8 515.7 79.2 (40.0 ) 612.7 Long-term debt 1,883.0 1,140.9 102.1 (1,242.2 ) 1,883.8 Distributions in excess of investment in unconsolidated affiliate — 21.9 — — 21.9 Other liabilities 1.0 143.6 26.9 5.0 176.5 Equity investment in subsidiaries — 1.5 — (1.5 ) — Intercompany liabilities — 125.0 — (125.0 ) — Total liabilities 1,941.8 1,948.6 208.2 (1,403.7 ) 2,694.9 Total equity—controlling interest 354.6 588.1 283.4 (871.5 ) 354.6 Noncontrolling interest — — — 5.0 5.0 Total equity 354.6 588.1 283.4 (866.5 ) 359.6 Total liabilities and equity $ 2,296.4 $ 2,536.7 $ 491.6 $ (2,270.2 ) $ 3,054.5 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The Company’s unaudited condensed consolidated financial statements for the three months ended December 29, 2018 and December 30, 2017 are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Consolidation | 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, 2018 (the “ 2018 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, 2018 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. |
Recently Adopted & Issued Accounting Pronouncements | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS Revenue Recognition from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued amended accounting guidance that replaces most existing revenue recognition guidance under GAAP. This guidance requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or services. The standard involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the entity satisfies the performance obligations. The new standard also results in enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Subsequently, additional guidance was issued on several areas including guidance intended to improve the operability and understandability of the implementation of principal versus agent considerations and clarifications on the identification of performance obligations and implementation of guidance related to licensing. The Company adopted this guidance effective October 1, 2018 under the modified retrospective approach. The Company’s revenue is primarily product sales, which are recognized at a point in time when title transfers to customers and the Company has no further obligation to provide services related to such products. The Company’s timing of recognition of revenue is substantially unchanged under the amended guidance. The new accounting guidance required the Company to recognize earlier certain deferred revenue associated with a license agreement related to the sale of the International Business (as defined in “NOTE 3. DISCONTINUED OPERATIONS”), resulting in a cumulative adjustment to its fiscal 2019 opening balance of retained earnings of $9.1 million , other current liabilities of $1.4 million and other liabilities of $7.7 million . With the exception of this item, the adoption of the amended accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements. The additional disclosures required are presented within “NOTE 2. REVENUE RECOGNITION” and “NOTE 15. SEGMENT INFORMATION.” Cash Flow Presentation In August 2016, the FASB issued an accounting standard update that amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows. The Company adopted this guidance on a retrospective basis effective October 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s consolidated cash flows. Business Combinations In January 2017, the FASB issued an accounting standard update that clarifies the definition of a business to provide additional guidance to assist in evaluating whether transactions should be accounted for as an acquisition (or disposal) of either an asset or business. The Company adopted this guidance on a prospective basis effective October 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. Employee Benefit Plans In March 2017, the FASB issued an accounting standard update that requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present the current-service-cost with other current compensation costs for related employees in the income statement, (2) present the other components elsewhere in the income statement and outside of income from operations if that subtotal is presented and (3) limit the amount of costs eligible for capitalization (e.g., as part of inventory or property, plant, and equipment) to only the service-cost component of net benefit cost. The provisions are required to be applied retrospectively for the presentation of cost components in the income statement and prospectively for the capitalization of cost components. The Company adopted this guidance effective October 1, 2018 and has classified non-service-cost components of net benefit cost/income in the “Other non-operating income, net” line in the Condensed Consolidated Statements of Operations. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. Income Taxes On December 22, 2017, H.R.1 (the “Act,” formerly known as the “Tax Cuts and Jobs Act”) was signed into law. The Act provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Among other items, the Act implemented a territorial tax system, imposed a one-time transition tax on deemed repatriated earnings of foreign subsidiaries, and reduced the federal corporate statutory tax rate to 21% effective January 1, 2018. Additionally, the Securities and Exchange Commission (the “SEC”) released Staff Accounting Bulletin No. 118 (“SAB 118”) which provides guidance on accounting for the Act’s impact under Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”). The guidance in SAB 118 addresses certain fact patterns where the accounting for changes in tax laws or tax rates under ASC 740 is incomplete upon issuance of an entity’s financial statements for the reporting period in which the Act is enacted. Under the SEC staff guidance in SAB 118, in the financial reporting period in which the Act is enacted, the income tax effects of the Act for which the accounting under ASC 740 is incomplete would be reported as a provisional amount based on a reasonable estimate (to the extent a reasonable estimate can be determined), which would be subject to adjustment during a “measurement period” until the accounting under ASC 740 is complete. The measurement period is limited to no more than one year beyond the enactment date under the SEC staff’s guidance. SAB 118 also describes supplemental disclosures that should accompany the provisional amounts, including the reasons for the incomplete accounting, the additional information or analysis that is needed, and other information relevant to why the registrant was not able to complete the accounting required under ASC 740 in a timely manner. For discussion of the impacts of the Act that are material to the Company and required disclosures related to the Act pursuant to the guidance provided under SAB 118, refer to “NOTE 11. INCOME TAXES.” Reporting Comprehensive Income In February 2018, the FASB issued an accounting standard update that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Act. The Company elected to adopt this guidance effective October 1, 2018, resulting in a reclassification of $ 16.9 million from accumulated other comprehensive income (loss) (“AOCI”) to retained earnings for the three months ended December 29, 2018. Share-Based Compensation In June 2018, the FASB issued an accounting standard update that simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the amended accounting guidance, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The Company elected to adopt this guidance effective October 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Leases In February 2016, the FASB issued its final standard on lease accounting. This guidance requires lessees to recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2019 and require a modified retrospective transition approach for leases that exist as of or are entered into after the beginning of either (i) the date of adoption or (ii) the earliest comparative period presented in the financial statements. The Company is currently evaluating available transition methods and the impact of this standard on its consolidated results of operations, financial position and cash flows. The Company has made progress on its evaluation of the amended guidance, including identification of the population of leases affected, determining the information required to calculate the lease liability and right-of-use asset and evaluating models to assist in future reporting. Credit Losses In June 2016, the FASB issued an accounting standard update related to the measurement of credit losses on financial instruments. The amended accounting guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020. The Company is continuing to assess the impact of the amended guidance. Cloud Computing Costs In August 2018, the FASB issued an accounting standard update that 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 provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020. The Company is continuing to assess the impact of the amended guidance. Employee Benefit Plans In August 2018, the FASB issued an accounting standard update that removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020. The Company is continuing to assess the impact of the amended guidance. |
Revenue Recognition | Nature of Goods and Services The Company’s revenue is primarily generated from sales of branded and private label lawn and garden care and indoor and hydroponic gardening finished products to home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, food and drug stores, indoor gardening and hydroponic product distributors, retailers and growers. In addition to product sales, the Company acts as the exclusive agent of Monsanto Company (“Monsanto”) for the marketing and distribution of Monsanto’s consumer Roundup ® non-selective weedkiller products in the United States and certain other specified countries, and performs certain other services under ancillary agreements with Monsanto. The Company also provides marketing, research and development and certain ancillary services to Bonnie Plants, Inc. (“Bonnie”). Refer to “NOTE 15. SEGMENT INFORMATION” for disaggregated revenue information and “NOTE 8. MARKETING AGREEMENT” for revenue information related to the Monsanto agreements. Identification and Satisfaction of Performance Obligations Product sales are recognized at a point in time when control of products transfers to customers and the Company has no further obligation to provide services related to such products. Control is the ability of customers to direct the “use of” and “obtain” the benefit from the Company’s products. In evaluating the timing of the transfer of control of products to customers, the Company considers several control indicators, including significant risks and rewards of products, the Company’s right to payment and the legal title of the products. Based on the assessment of control indicators, sales are typically recognized when products are delivered to or picked up by the customer. The Company is generally the principal in a transaction, therefore revenue is primarily recorded on a gross basis. When the Company is a principal in a transaction, it has determined that it controls the ability to direct the use of the product prior to transfer to a customer, is primarily responsible for fulfilling the promise to provide the product or service to the customer, has discretion in establishing prices, and ultimately controls the transfer of the product or services provided to the customer. Under the terms of the Second Amended and Restated Agency and Marketing Agreement (the “Restated Marketing Agreement”), pursuant to which the Company serves as exclusive sales and marketing agent of Monsanto with respect to Monsanto’s consumer Roundup ® non-selective weedkiller products in the United States and certain other specified countries, the Company is entitled to receive an annual commission from Monsanto as consideration for the performance of the Company’s duties as agent. The annual commission payable under the Restated Marketing Agreement is equal to (1) 50% of the actual earnings before interest and income taxes of Monsanto’s consumer Roundup ® business in the markets covered by the Restated Marketing Agreement for program years 2017 and 2018 and (2) 50% of the actual earnings before interest and income taxes of Monsanto’s consumer Roundup ® business in the markets covered by the Restated Marketing Agreement in excess of $40.0 million for program years 2019 and thereafter. The Restated Marketing Agreement also requires the Company to make annual payments of $18.0 million to Monsanto as a contribution against the overall expenses of its consumer Roundup ® business. The gross commission earned under the Restated Marketing Agreement and the contribution payments to Monsanto are included in the “Net sales” line in the Condensed Consolidated Statements of Operations. The Company performs other services, including conversion services, pursuant to ancillary agreements with Monsanto. The actual costs incurred for these activities are charged to and reimbursed by Monsanto. The Company records costs incurred for which the Company is the primary obligor on a gross basis, recognizing such costs in the “Cost of sales” line and the reimbursement of these costs in the “Net sales” line in the Condensed Consolidated Statements of Operations, with no effect on gross profit dollars or net income. Under the terms of the Marketing, R&D and Ancillary Services Agreement (the “Services Agreement”) with Bonnie and its sole shareholder, Alabama Farmers Cooperative, Inc. (“AFC”), the Company provides marketing, research and development and certain ancillary services to Bonnie. In exchange for these services, Bonnie reimburses the Company for certain costs and provides a commission fee earned based on a percentage of the growth in earnings before interest, income taxes and amortization of Bonnie’s business of planting, growing, developing, manufacturing, distributing, marketing, and selling live plants, plant food, fertilizer and potting soil (the “Bonnie Business”). The commission earned under the Services Agreement is included in the “Net sales” line in the Condensed Consolidated Statements of Operations. Additionally, the Company records costs incurred under the Services Agreement for which the Company is the primary obligor on a gross basis, recognizing such costs in the “Cost of sales” line and the reimbursement of these costs in the “Net sales” line in the Condensed Consolidated Statements of Operations, with no effect on gross profit dollars or net income. Transactional Price and Promotional Allowances Revenue for product sales is recorded net of sales returns and allowances. Revenues are measured based on the amount of consideration that the Company expects to receive as derived from a list price, reduced by estimates for variable consideration. Variable consideration includes the cost of current and continuing promotional programs and expected sales returns. Commission income related to the Monsanto and Bonnie agreements is recognized over the program year as the services are being performed based upon the commission income formula in the agreements. The Company’s promotional programs primarily include rebates based on sales volumes, in-store promotional allowances, cooperative advertising programs, direct consumer rebate programs and special purchasing incentives. The cost of promotional programs is estimated considering all reasonably available information, including current expectations and historical experience. Promotion costs (including allowances and rebates) incurred during the year are expensed to interim periods in relation to revenues and are recorded as a reduction of net sales. Accruals for expected payouts under these programs are included in the “Other current liabilities” line in the Condensed Consolidated Balance Sheets. Provisions for estimated returns and allowances are recorded at the time revenue is recognized based on historical rates and are periodically adjusted for known changes in return levels. Shipping and handling costs are accounted for as contract fulfillment costs and included in the “Cost of sales” line in the Condensed Consolidated Statements of Operations. The Company excludes from revenue any amounts collected from customers for sales or other taxes. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information was as follows: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Interest paid $ (31.4 ) $ (25.5 ) Income taxes paid (8.7 ) (1.5 ) |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Discontinued Operations | The following table summarizes the results of discontinued operations described above and reflected within discontinued operations in the Company’s condensed consolidated financial statements for each of the periods presented: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Impairment, restructuring and other charges (recoveries), net $ (4.9 ) $ 1.4 Gain on sale / contribution of business — (0.2 ) Income (loss) from discontinued operations before income taxes 4.9 (1.2 ) Income tax expense from discontinued operations 2.0 — Income (loss) from discontinued operations, net of tax $ 2.9 $ (1.2 ) |
ACQUISITIONS AND INVESTMENTS (T
ACQUISITIONS AND INVESTMENTS (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Business Combinations [Abstract] | |
Schedule of Pro Forma Information | The following unaudited pro forma information presents the combined results of operations as if the acquisition of Sunlight Supply had occurred at the beginning of fiscal 2017. Sunlight Supply’s pre-acquisition results have been added to the Company’s historical results. The pro forma results contained in the table below include adjustments for (i) the elimination of intercompany sales, (ii) amortization of acquired intangibles, (iii) increased depreciation expense as a result of acquisition date fair value adjustments, (iv) increased interest expense related to the financing of the acquisition, (v) adjustments to tax expense based on condensed consolidated pro forma results, and (vi) the impact of Common Shares issued as part of the purchase price in connection with the acquisition. The pro forma information does not reflect the realization of any potential cost savings or other synergies from the acquisition as a result of restructuring activities and other cost savings initiatives. These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations as they would have been had the acquisitions occurred on the assumed dates, nor are they necessarily an indication of future operating results. THREE MONTHS ENDED Unaudited Consolidated Pro Forma Results DECEMBER 30, 2017 (In millions, except per share data) Pro forma net sales $ 301.3 Pro forma net loss attributable to controlling interest (20.9 ) Pro forma diluted net loss per common share (0.36 ) |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED AFFILIATES (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Joint Venture Financial Information | The following table presents summarized financial information of the Company’s unconsolidated affiliates: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Revenue $ 287.9 $ 272.2 Gross margin 81.5 76.0 Selling and administrative expenses 61.6 64.0 Amortization expense 17.5 12.1 Interest expense 20.0 17.5 Restructuring and other charges 10.3 3.6 Net income (loss) $ (27.9 ) $ (21.2 ) |
IMPAIRMENT, RESTRUCTURING AND_2
IMPAIRMENT, RESTRUCTURING AND OTHER (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
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: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Cost of sales—impairment, restructuring and other: Restructuring and other charges $ 2.0 $ — Property, plant and equipment impairments 0.5 — Operating expenses: Restructuring and other charges (recoveries) 3.5 (0.2 ) Impairment, restructuring and other charges (recoveries) from continuing operations $ 6.0 $ (0.2 ) Restructuring and other charges (recoveries), net, from discontinued operations (4.9 ) 1.4 Total impairment, restructuring and other charges $ 1.1 $ 1.2 The following table summarizes the activity related to liabilities associated with restructuring and other, excluding insurance reimbursement recoveries, during the three months ended December 29, 2018 (in millions): Amounts accrued for restructuring and other at September 30, 2018 $ 112.2 Restructuring and other charges from continuing operations 5.5 Restructuring and other charges from discontinued operations 0.1 Payments and other (4.4 ) Amounts accrued for restructuring and other at December 29, 2018 $ 113.4 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following for each of the periods presented: DECEMBER 29, DECEMBER 30, SEPTEMBER 30, (In millions) Finished goods $ 524.3 $ 462.3 $ 292.1 Work-in-process 73.8 71.0 60.1 Raw materials 147.3 162.8 129.2 Total inventories $ 745.4 $ 696.1 $ 481.4 |
MARKETING AGREEMENT (Tables)
MARKETING AGREEMENT (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
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 included in “Net sales” are as follows: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Gross commission $ — $ 0.1 Contribution expenses (4.5 ) (4.5 ) Amortization of marketing fee — (0.2 ) Net commission (4.5 ) (4.6 ) Reimbursements associated with Restated Marketing Agreement 12.6 12.9 Total net sales associated with Restated Marketing Agreement $ 8.1 $ 8.3 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | The components of the Company’s debt are as follows: DECEMBER 29, DECEMBER 30, SEPTEMBER 30, (In millions) Credit Facilities: Revolving loans $ 793.9 $ 798.8 $ 492.2 Term loans 790.0 270.0 790.0 Senior Notes – 5.250% 250.0 250.0 250.0 Senior Notes – 6.000% 400.0 400.0 400.0 Receivables facility 40.0 38.0 76.0 Other 16.3 34.5 17.5 Total debt 2,290.2 1,791.3 2,025.7 Less current portions 95.1 86.1 132.6 Less unamortized debt issuance costs 8.9 8.2 9.3 Long-term debt $ 2,186.2 $ 1,697.0 $ 1,883.8 |
Schedule of Interest Rate Swap Agreements | The notional amount, effective date, expiration date and rate of each of these swap agreements outstanding at December 29, 2018 are shown in the table below: Notional Amount Effective Expiration Fixed $ 150 (b) 2/7/2017 5/7/2019 2.12 % 50 (b) 2/7/2017 5/7/2019 2.25 % 50 2/28/2018 5/28/2019 2.01 % 200 (c) 12/20/2016 6/20/2019 2.12 % 250 (d) 1/8/2018 6/8/2020 2.09 % 100 6/20/2018 10/20/2020 2.15 % 200 (d) 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 % (a) The effective date refers to the date on which interest payments were first hedged by the applicable swap agreement. (b) Interest payments made during the three-month period of each year that begins with the month and day of the effective date are hedged by the swap agreement. (c) Interest payments made during the six-month period of each year that begins with the month and day of the effective date are hedged by the swap agreement. (d) Notional amount adjusts in accordance with a specified seasonal schedule. This represents the maximum notional amount at any point in time. |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Equity [Abstract] | |
Summary of Changes in Equity | The following table provides a summary of the changes in total equity, equity attributable to controlling interest, and equity attributable to noncontrolling interests for the three months ended December 29, 2018 and December 30, 2017 (in millions): Common Shares and Capital in Excess of Stated Value Retained Earnings Treasury Shares Accumulated Other Comprehensive Loss Total Equity - Controlling Interest Non-controlling Interest Total Equity Balance at September 30, 2017 $ 407.6 $ 978.2 $ (667.8 ) $ (69.2 ) $ 648.8 $ 12.9 $ 661.7 Net income (loss) — (21.2 ) — — (21.2 ) — (21.2 ) Other comprehensive income (loss) — — — 1.0 1.0 — 1.0 Share-based compensation 6.0 — — — 6.0 — 6.0 Dividends declared ($0.530 per share) — (31.1 ) — — (31.1 ) — (31.1 ) Treasury share purchases — — (96.6 ) — (96.6 ) — (96.6 ) Treasury share issuances — — 1.6 — 1.6 — 1.6 Acquisition of remaining noncontrolling interest in Gavita (5.7 ) — — — (5.7 ) (7.9 ) (13.6 ) Balance at December 30, 2017 $ 407.9 $ 925.9 $ (762.8 ) $ (68.2 ) $ 502.8 $ 5.0 $ 507.8 Balance at September 30, 2018 $ 420.3 $ 919.9 $ (939.6 ) $ (46.0 ) $ 354.6 $ 5.0 $ 359.6 Adoption of new accounting pronouncements (Note 1) — 26.0 — (16.9 ) 9.1 — 9.1 Net income (loss) — (79.6 ) — — (79.6 ) (0.1 ) (79.7 ) Other comprehensive income (loss) — — — (12.4 ) (12.4 ) — (12.4 ) Share-based compensation 6.6 — — — 6.6 — 6.6 Dividends declared ($0.550 per share) — (30.9 ) — — (30.9 ) — (30.9 ) Treasury share issuances (1.0 ) — 1.9 — 0.9 — 0.9 Balance at December 29, 2018 $ 425.9 $ 835.4 $ (937.7 ) $ (75.3 ) $ 248.3 $ 4.9 $ 253.2 |
Schedule of Share-Based Awards Granted | The following is a summary of the share-based awards granted during each of the periods indicated: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, Employees Restricted stock units 2,576 4,914 Performance units 1,078 204,702 Board of Directors Deferred stock units 1,445 449 Total share-based awards 5,099 210,065 Aggregate fair value at grant dates (in millions) $ 0.4 $ 20.6 |
Schedule of Share-Based Compensation | Total share-based compensation was as follows for each of the periods indicated: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Share-based compensation $ 6.6 $ 6.0 Tax benefit recognized 1.7 2.3 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
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: COMMODITY DECEMBER 29, DECEMBER 30, SEPTEMBER 30, Urea 52,000 tons 40,500 tons 88,000 tons Resin 12,600,000 pounds — — Diesel 4,410,000 gallons 4,536,000 gallons 5,460,000 gallons Heating Oil 1,218,000 gallons 1,344,000 gallons 1,218,000 gallons |
Schedule of the Fair Values of Derivative Instruments | The fair values of the Company’s derivative instruments were as follows: ASSETS / (LIABILITIES) DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS BALANCE SHEET LOCATION DECEMBER 29, DECEMBER 30, SEPTEMBER 30, (In millions) Interest rate swap agreements Prepaid and other current assets $ 1.8 $ 1.4 $ 2.0 Other assets 0.6 0.2 1.8 Other current liabilities (1.6 ) (1.0 ) — Other liabilities (3.1 ) — — Commodity hedging instruments Prepaid and other current assets 0.8 2.6 6.1 Total derivatives designated as hedging instruments $ (1.5 ) $ 3.2 $ 9.9 DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS BALANCE SHEET LOCATION Currency forward contracts Prepaid and other current assets $ 0.8 $ 0.4 $ 0.9 Other current liabilities (0.3 ) (5.1 ) (1.5 ) Commodity hedging instruments Prepaid and other current assets — 1.8 1.7 Other current liabilities (2.4 ) — — Total derivatives not designated as hedging instruments (1.9 ) (2.9 ) 1.1 Total derivatives $ (3.4 ) $ 0.3 $ 11.0 |
Schedule of the Effect of Derivative Instruments on AOCI and Statements of Operations | The effect of derivative instruments on AOCI and the Condensed Consolidated Statements of Operations was as follows: DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS AMOUNT OF GAIN / (LOSS) RECOGNIZED IN AOCI THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Interest rate swap agreements $ (4.6 ) $ 0.4 Commodity hedging instruments (3.3 ) 0.4 Total $ (7.9 ) $ 0.8 DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS RECLASSIFIED FROM AOCI INTO STATEMENT OF OPERATIONS AMOUNT OF GAIN / (LOSS) THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Interest rate swap agreements Interest expense $ (0.1 ) $ 0.1 Commodity hedging instruments Cost of sales 0.2 — Total $ 0.1 $ 0.1 DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS RECOGNIZED IN STATEMENT OF OPERATIONS AMOUNT OF GAIN / (LOSS) THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Currency forward contracts Other income, net $ 3.5 $ (2.6 ) Commodity hedging instruments Cost of sales (3.7 ) 1.3 Total $ (0.2 ) $ (1.3 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 29, 2018 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total (In millions) Assets Cash equivalents $ 1.1 $ — $ — $ 1.1 Derivatives Interest rate swap agreements — 2.4 — 2.4 Currency forward contracts — 0.8 — 0.8 Commodity hedging instruments — 0.8 — 0.8 Other 18.2 — 13.0 31.2 Total $ 19.3 $ 4.0 $ 13.0 $ 36.3 Liabilities Derivatives Interest rate swap agreements $ — $ (4.7 ) $ — $ (4.7 ) Currency forward contracts — (0.3 ) — (0.3 ) Commodity hedging instruments — (2.4 ) — (2.4 ) Other — — (0.9 ) (0.9 ) Total $ — $ (7.4 ) $ (0.9 ) $ (8.3 ) The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 30, 2017 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total (In millions) Assets Cash equivalents $ 30.9 $ — $ — $ 30.9 Derivatives Interest rate swap agreements — 1.6 — 1.6 Currency forward contracts — 0.4 — 0.4 Commodity hedging instruments — 4.4 — 4.4 Other 17.2 — 11.8 29.0 Total $ 48.1 $ 6.4 $ 11.8 $ 66.3 Liabilities Derivatives Interest rate swap agreements $ — $ (1.0 ) $ — $ (1.0 ) Currency forward contracts — (5.1 ) — (5.1 ) Total $ — $ (6.1 ) $ — $ (6.1 ) The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2018 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total (In millions) Assets Cash equivalents $ 1.4 $ — $ — $ 1.4 Derivatives Interest rate swap agreements — 3.8 — 3.8 Currency forward contracts — 0.9 — 0.9 Commodity hedging instruments — 7.8 — 7.8 Other 19.4 — 13.0 32.4 Total $ 20.8 $ 12.5 $ 13.0 $ 46.3 Liabilities Derivatives Currency forward contracts $ — $ (1.5 ) $ — $ (1.5 ) Other — — (0.9 ) (0.9 ) Total $ — $ (1.5 ) $ (0.9 ) $ (2.4 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Segment Reporting [Abstract] | |
Summary of Segment Financial Information | The following tables present financial information for the Company’s reportable segments for the periods indicated: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Net sales: U.S. Consumer $ 136.9 $ 125.9 Hawthorne 140.8 76.7 Other 20.4 18.9 Consolidated $ 298.1 $ 221.5 Segment Profit (Loss): U.S. Consumer $ (43.1 ) $ (37.9 ) Hawthorne 4.4 1.7 Other (4.0 ) (4.0 ) Total Segment Loss (42.7 ) (40.2 ) Corporate (27.9 ) (25.0 ) Intangible asset amortization (8.3 ) (6.9 ) Impairment, restructuring and other (6.0 ) 0.2 Equity in income of unconsolidated affiliates 1.3 0.6 Interest expense (25.2 ) (17.8 ) Other non-operating income, net 2.9 2.5 Loss from continuing operations before income taxes $ (105.9 ) $ (86.6 ) DECEMBER 29, DECEMBER 30, SEPTEMBER 30, (In millions) Total assets: U.S. Consumer $ 1,889.5 $ 1,836.1 $ 1,702.2 Hawthorne 961.2 674.4 978.6 Other 163.7 169.4 161.3 Corporate 210.8 230.9 212.4 Consolidated $ 3,225.2 $ 2,910.8 $ 3,054.5 The following table presents net sales by product category: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) US Consumer: Lawn care $ 49.7 $ 35.0 Growing media 38.3 37.6 Controls 30.2 31.4 Roundup ® Restated Marketing Agreement 8.1 8.3 Other, primarily gardening and landscape 10.6 13.6 Hawthorne: Indoor, urban and hydroponic gardening 140.8 76.7 Other: Growing media 10.9 11.0 Other, primarily lawn care, gardening and controls 9.5 7.9 Total net sales $ 298.1 $ 221.5 The following table presents net sales by geographic area: THREE MONTHS ENDED DECEMBER 29, DECEMBER 30, (In millions) Net sales: United States $ 246.9 $ 162.5 International 51.2 59.0 $ 298.1 $ 221.5 |
FINANCIAL INFORMATION FOR SUB_2
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS (Tables) | 3 Months Ended |
Dec. 29, 2018 | |
Condensed Financial Information of Parent Subsidiary Guarantors and Subsidiary Non Guarantors [Abstract] | |
Condensed Consolidating Statement of Operations | Condensed Consolidating Statement of Operations for the three months ended December 29, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated Net sales $ — $ 232.1 $ 66.0 $ — $ 298.1 Cost of sales — 206.9 54.2 — 261.1 Cost of sales—impairment, restructuring and other — 2.2 0.3 — 2.5 Gross profit — 23.0 11.5 — 34.5 Operating expenses: Selling, general and administrative — 101.4 14.6 0.3 116.3 Impairment, restructuring and other — 3.4 0.1 — 3.5 Other (income) expense, net (0.2 ) 0.1 (0.3 ) — (0.4 ) Income (loss) from operations 0.2 (81.9 ) (2.9 ) (0.3 ) (84.9 ) Equity (income) loss in subsidiaries 69.3 (1.5 ) — (67.8 ) — Equity in (income) loss of unconsolidated affiliates — (1.4 ) 0.1 — (1.3 ) Interest expense 18.8 18.3 0.9 (12.8 ) 25.2 Other non-operating (income) expense, net (5.9 ) (2.3 ) (7.5 ) 12.8 (2.9 ) Income (loss) from continuing operations before income taxes (82.0 ) (95.0 ) 3.6 67.5 (105.9 ) Income tax expense (benefit) from continuing operations (2.8 ) (21.3 ) 0.8 — (23.3 ) Income (loss) from continuing operations (79.2 ) (73.7 ) 2.8 67.5 (82.6 ) Income (loss) from discontinued operations, net of tax — 3.0 (0.1 ) — 2.9 Net income (loss) $ (79.2 ) $ (70.7 ) $ 2.7 $ 67.5 $ (79.7 ) Net (income) loss attributable to noncontrolling interest — — — 0.1 0.1 Net income (loss) attributable to controlling interest $ (79.2 ) $ (70.7 ) $ 2.7 $ 67.6 $ (79.6 ) Condensed Consolidating Statement of Operations for the three months ended December 30, 2017 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated Net sales $ — $ 147.5 $ 74.0 $ — $ 221.5 Cost of sales — 127.0 60.5 — 187.5 Gross profit — 20.5 13.5 — 34.0 Operating expenses: Selling, general and administrative — 90.4 17.5 0.3 108.2 Impairment, restructuring and other — (0.2 ) — — (0.2 ) Other (income) expense, net (0.2 ) (1.1 ) (0.8 ) — (2.1 ) Income (loss) from operations 0.2 (68.6 ) (3.2 ) (0.3 ) (71.9 ) Equity (income) loss in subsidiaries 18.0 1.0 — (19.0 ) — Other non-operating (income) loss (3.9 ) — (4.7 ) 8.6 — Equity in (income) loss of unconsolidated affiliates — (0.5 ) (0.1 ) — (0.6 ) Interest expense 16.9 8.8 0.7 (8.6 ) 17.8 Other non-operating (income) expense, net — (2.5 ) — — (2.5 ) Income (loss) from continuing operations before income taxes (30.8 ) (75.4 ) 0.9 18.7 (86.6 ) Income tax expense (benefit) from continuing operations (9.8 ) (57.5 ) 0.7 — (66.6 ) Income (loss) from continuing operations (21.0 ) (17.9 ) 0.2 18.7 (20.0 ) Income (loss) from discontinued operations, net of tax — (0.2 ) (1.0 ) — (1.2 ) Net income (loss) $ (21.0 ) $ (18.1 ) $ (0.8 ) $ 18.7 $ (21.2 ) Net (income) loss attributable to noncontrolling interest — — — — — Net income (loss) attributable to controlling interest $ (21.0 ) $ (18.1 ) $ (0.8 ) $ 18.7 $ (21.2 ) |
Condensed Consolidating Statement of Comprehensive Income (Loss) | Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended December 29, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated Net income (loss) $ (79.2 ) $ (70.7 ) $ 2.7 $ 67.5 $ (79.7 ) Other comprehensive income (loss), net of tax: Net foreign currency translation adjustment (5.3 ) — (5.3 ) 5.3 (5.3 ) Net change in derivatives (8.0 ) (3.5 ) — 3.5 (8.0 ) Net change in pension and other post-retirement benefits 0.9 0.1 0.8 (0.9 ) 0.9 Total other comprehensive income (loss) (12.4 ) (3.4 ) (4.5 ) 7.9 (12.4 ) Comprehensive income (loss) (91.6 ) (74.1 ) (1.8 ) 75.4 (92.1 ) Comprehensive (income) loss attributable to noncontrolling interest — — — 0.1 0.1 Comprehensive income (loss) attributable to controlling interest $ (91.6 ) $ (74.1 ) $ (1.8 ) $ 75.5 $ (92.0 ) Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended December 30, 2017 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated Net income (loss) $ (21.0 ) $ (18.1 ) $ (0.8 ) $ 18.7 $ (21.2 ) Other comprehensive income (loss), net of tax: Net foreign currency translation adjustment — — — — — Net change in derivatives 0.7 0.4 — (0.4 ) 0.7 Net change in pension and other post-retirement benefits 0.3 0.1 0.2 (0.3 ) 0.3 Total other comprehensive income (loss) 1.0 0.5 0.2 (0.7 ) 1.0 Comprehensive income (loss) (20.0 ) (17.6 ) (0.6 ) 18.0 (20.2 ) Comprehensive (income) loss attributable to noncontrolling interest — — — — — Comprehensive income (loss) attributable to controlling interest $ (20.0 ) $ (17.6 ) $ (0.6 ) $ 18.0 $ (20.2 ) |
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows for the three months ended December 29, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (19.1 ) $ (193.6 ) $ (20.7 ) $ — $ (233.4 ) INVESTING ACTIVITIES (a) Investments in property, plant and equipment — (12.1 ) (0.6 ) — (12.7 ) Investments in acquired businesses, net of cash acquired — (6.6 ) — — (6.6 ) Other investing, net — 0.9 1.3 — 2.2 Return of investments from affiliates 49.1 — — (49.1 ) — Investing cash flows from (to) affiliates (0.2 ) (2.3 ) — 2.5 — Net cash provided by (used in) investing activities 48.9 (20.1 ) 0.7 (46.6 ) (17.1 ) FINANCING ACTIVITIES Borrowings under revolving and bank lines of credit and term loans — 347.6 39.2 — 386.8 Repayments under revolving and bank lines of credit and term loans — (86.6 ) (29.7 ) — (116.3 ) Dividends paid (30.4 ) (49.1 ) — 49.1 (30.4 ) Purchase of Common Shares (0.5 ) — — — (0.5 ) Payments on seller notes — (0.8 ) — — (0.8 ) Cash received from exercise of stock options 1.1 — — — 1.1 Financing cash flows from (to) affiliates — 0.2 2.3 (2.5 ) — Net cash provided by (used in) financing activities (29.8 ) 211.3 11.8 46.6 239.9 Effect of exchange rate changes on cash — — (0.7 ) — (0.7 ) Net increase (decrease) in cash and cash equivalents — (2.4 ) (8.9 ) — (11.3 ) Cash and cash equivalents at beginning of period — 3.0 30.9 — 33.9 Cash and cash equivalents at end of period $ — $ 0.6 $ 22.0 $ — $ 22.6 (a) Cash received by the Parent from the Guarantors and Non-Guarantors in the form of dividends in the amount of $49.1 million represent return of investments and are included in cash flows from investing activities. Condensed Consolidating Statement of Cash Flows for the three months ended December 30, 2017 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (a) $ 9.6 $ (239.2 ) $ 19.6 $ (0.5 ) $ (210.5 ) INVESTING ACTIVITIES (a) Investments in property, plant and equipment — (17.3 ) (2.1 ) — (19.4 ) Investments in loans receivable — (5.3 ) — — (5.3 ) Investments in acquired businesses, net of cash acquired — (40.5 ) (29.5 ) — (70.0 ) Return of investments from affiliates 182.5 — — (182.5 ) — Investing cash flows from (to) affiliates (66.4 ) (66.9 ) — 133.3 — Net cash provided by (used in) investing activities 116.1 (130.0 ) (31.6 ) (49.2 ) (94.7 ) FINANCING ACTIVITIES Borrowings under revolving and bank lines of credit and term loans — 534.6 38.8 — 573.4 Repayments under revolving and bank lines of credit and term loans — (86.7 ) (49.3 ) — (136.0 ) Dividends paid (30.5 ) (182.5 ) (0.5 ) 183.0 (30.5 ) Purchase of Common Shares (96.2 ) — — — (96.2 ) Payments on seller notes — — (3.0 ) — (3.0 ) Cash received from exercise of stock options 1.0 — — — 1.0 Acquisition of noncontrolling interests — — (70.1 ) — (70.1 ) Financing cash flows from (to) affiliates — 66.4 66.9 (133.3 ) — Net cash provided by (used in) financing activities (125.7 ) 331.8 (17.2 ) 49.7 238.6 Effect of exchange rate changes on cash — — 0.6 — 0.6 Net increase (decrease) in cash and cash equivalents — (37.4 ) (28.6 ) — (66.0 ) Cash and cash equivalents at beginning of period — 39.8 80.7 — 120.5 Cash and cash equivalents at end of period $ — $ 2.4 $ 52.1 $ — $ 54.5 (a) Cash received by the Parent from the Guarantors and Non-Guarantors in the form of dividends in the amount of $182.5 million represent return of investments and are included in cash flows from investing activities. Cash received by the Guarantors from the Non-Guarantors in the form of dividends in the amount of $0.5 million represent return on investments and are included in cash flows from operating activities. |
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet As of December 29, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 0.6 $ 22.0 $ — $ 22.6 Accounts receivable, net — 107.2 56.6 — 163.8 Accounts receivable pledged — 44.4 — — 44.4 Inventories — 659.3 86.1 — 745.4 Prepaid and other current assets 2.0 79.2 21.3 — 102.5 Total current assets 2.0 890.7 186.0 — 1,078.7 Investment in unconsolidated affiliates — 36.6 0.7 — 37.3 Property, plant and equipment, net — 458.8 61.0 — 519.8 Goodwill — 420.1 108.0 11.6 539.7 Intangible assets, net — 745.7 93.9 7.2 846.8 Other assets 9.7 163.5 29.7 — 202.9 Equity investment in subsidiaries 746.1 — — (746.1 ) — Intercompany assets 1,736.3 — 2.0 (1,738.3 ) — Total assets $ 2,494.1 $ 2,715.4 $ 481.3 $ (2,465.6 ) $ 3,225.2 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ 47.7 $ 81.7 $ 13.4 $ (47.7 ) $ 95.1 Accounts payable — 206.1 30.9 — 237.0 Other current liabilities 10.6 228.9 23.0 — 262.5 Total current liabilities 58.3 516.7 67.3 (47.7 ) 594.6 Long-term debt 2,185.0 1,438.7 106.4 (1,543.9 ) 2,186.2 Distributions in excess of investment in unconsolidated affiliate — 21.9 — — 21.9 Other liabilities 2.5 140.4 26.4 — 169.3 Equity investment in subsidiaries — 2.5 — (2.5 ) — Intercompany liabilities — 119.8 — (119.8 ) — Total liabilities 2,245.8 2,240.0 200.1 (1,713.9 ) 2,972.0 Total equity—controlling interest 248.3 475.4 281.2 (756.6 ) 248.3 Noncontrolling interest — — — 4.9 4.9 Total equity 248.3 475.4 281.2 (751.7 ) 253.2 Total liabilities and equity $ 2,494.1 $ 2,715.4 $ 481.3 $ (2,465.6 ) $ 3,225.2 Condensed Consolidating Balance Sheet As of December 30, 2017 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 2.4 $ 52.1 $ — $ 54.5 Accounts receivable, net — 77.4 51.0 — 128.4 Accounts receivable pledged — 42.2 — — 42.2 Inventories — 605.9 90.2 — 696.1 Prepaid and other current assets 1.4 43.2 17.1 — 61.7 Total current assets 1.4 771.1 210.4 — 982.9 Investment in unconsolidated affiliates — 30.9 0.8 — 31.7 Property, plant and equipment, net — 398.3 65.8 — 464.1 Goodwill — 322.9 130.3 11.6 464.8 Intangible assets, net — 639.5 135.4 8.5 783.4 Other assets 7.7 166.3 9.9 — 183.9 Equity investment in subsidiaries 1,125.8 — — (1,125.8 ) — Intercompany assets 1,087.5 157.5 — (1,245.0 ) — Total assets $ 2,222.4 $ 2,486.5 $ 552.6 $ (2,350.7 ) $ 2,910.8 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ 15.0 $ 55.7 $ 30.4 $ (15.0 ) $ 86.1 Accounts payable — 194.3 28.9 — 223.2 Other current liabilities 8.7 117.8 35.3 — 161.8 Total current liabilities 23.7 367.8 94.6 (15.0 ) 471.1 Long-term debt 1,695.6 998.7 56.5 (1,053.8 ) 1,697.0 Distributions in excess of investment in unconsolidated affiliate — 21.9 — — 21.9 Other liabilities 0.3 148.1 59.6 5.0 213.0 Equity investment in subsidiaries — 59.4 — (59.4 ) — Intercompany liabilities — — 152.9 (152.9 ) — Total liabilities 1,719.6 1,595.9 363.6 (1,276.1 ) 2,403.0 Total equity—controlling interest 502.8 890.6 189.0 (1,079.6 ) 502.8 Noncontrolling interest — — — 5.0 5.0 Total equity 502.8 890.6 189.0 (1,074.6 ) 507.8 Total liabilities and equity $ 2,222.4 $ 2,486.5 $ 552.6 $ (2,350.7 ) $ 2,910.8 Condensed Consolidating Balance Sheet As of September 30, 2018 (In millions) (Unaudited) Parent Subsidiary Guarantors Non- Guarantors Eliminations/ Consolidations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 3.0 $ 30.9 $ — $ 33.9 Accounts receivable, net — 172.5 53.5 — 226.0 Accounts receivable pledged — 84.5 — — 84.5 Inventories — 394.5 86.9 — 481.4 Prepaid and other current assets 2.2 44.6 13.1 — 59.9 Total current assets 2.2 699.1 184.4 — 885.7 Investment in unconsolidated affiliates — 35.2 0.9 — 36.1 Property, plant and equipment, net — 464.7 66.1 — 530.8 Goodwill — 420.6 110.8 11.6 543.0 Intangible assets, net — 752.3 97.5 7.5 857.3 Other assets 11.4 164.8 25.4 — 201.6 Equity investment in subsidiaries 860.0 — — (860.0 ) — Intercompany assets 1,422.8 — 6.5 (1,429.3 ) — Total assets $ 2,296.4 $ 2,536.7 $ 491.6 $ (2,270.2 ) $ 3,054.5 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ 40.0 $ 118.4 $ 14.2 $ (40.0 ) $ 132.6 Accounts payable — 119.0 31.5 — 150.5 Other current liabilities 17.8 278.3 33.5 — 329.6 Total current liabilities 57.8 515.7 79.2 (40.0 ) 612.7 Long-term debt 1,883.0 1,140.9 102.1 (1,242.2 ) 1,883.8 Distributions in excess of investment in unconsolidated affiliate — 21.9 — — 21.9 Other liabilities 1.0 143.6 26.9 5.0 176.5 Equity investment in subsidiaries — 1.5 — (1.5 ) — Intercompany liabilities — 125.0 — (125.0 ) — Total liabilities 1,941.8 1,948.6 208.2 (1,403.7 ) 2,694.9 Total equity—controlling interest 354.6 588.1 283.4 (871.5 ) 354.6 Noncontrolling interest — — — 5.0 5.0 Total equity 354.6 588.1 283.4 (866.5 ) 359.6 Total liabilities and equity $ 2,296.4 $ 2,536.7 $ 491.6 $ (2,270.2 ) $ 3,054.5 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Millions | Oct. 02, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Percentage of annual net sales | 75.00% | 75.00% | 75.00% | |||
Capital expenditure unpaid liabilities incurred | $ 3.2 | $ 1.3 | ||||
Sunlight Supply | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Post-closing working capital adjustment obligation | 6.6 | |||||
Gavita Holdings B.V. | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Contingent consideration paid | $ 3 | $ 3 | ||||
Retained Earnings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Reclassification from AOCI to retained earnings | 16.9 | |||||
Accumulated Other Comprehensive Income | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Reclassification to retained earnings from AOCI | 16.9 | |||||
Retained Earnings | Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative adjustment to opening retained earnings | 9.1 | |||||
Other current liabilities | Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative adjustment to opening retained earnings | 1.4 | |||||
Other liabilities | Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative adjustment to opening retained earnings | $ 7.7 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Interest paid | $ (31.4) | $ (25.5) |
Income taxes paid | $ (8.7) | $ (1.5) |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - Restated Marketing Agreement $ in Millions | Aug. 31, 2017USD ($) |
Marketing Agreement [Line Items] | |
Percentage of program earnings | 50.00% |
Commission threshold | $ 40 |
Annual contribution payment | $ 18 |
DISCONTINUED OPERATIONS - Addit
DISCONTINUED OPERATIONS - Additional Information (Details) - USD ($) | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash provided by (used in) operating activities | $ 1,800,000 | $ (1,400,000) |
Cash provided by (used in) investing activities | 0 | 0 |
Wild Bird Food | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accrual for probable loss | 85,000,000 | |
Insurance recoveries | $ 5,000,000 | |
Project Focus | International Business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Divestiture transaction related costs | $ 1,400,000 |
DISCONTINUED OPERATIONS - Summa
DISCONTINUED OPERATIONS - Summary of Income from Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Impairment, restructuring and other charges (recoveries), net | $ (4.9) | $ 1.4 |
Gain on sale / contribution of business | 0 | 0.2 |
Income (loss) from discontinued operations before income taxes | 4.9 | (1.2) |
Income tax expense from discontinued operations | 2 | 0 |
Income (loss) from discontinued operations, net of tax | $ 2.9 | $ (1.2) |
ACQUISITIONS AND INVESTMENTS -
ACQUISITIONS AND INVESTMENTS - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Jun. 04, 2018 | Oct. 11, 2017 | Oct. 02, 2017 | Dec. 29, 2018 | Jun. 30, 2018 | Dec. 30, 2017 | May 26, 2016 |
Business Acquisition [Line Items] | |||||||
Acquisition of remaining noncontrolling interest | $ 13.6 | ||||||
Sunlight Supply | |||||||
Business Acquisition [Line Items] | |||||||
Estimated purchase price | $ 458.6 | ||||||
Common stock paid in business combination | 23.4 | ||||||
Fair value of contingent consideration for acquired business | 3.1 | $ 0.9 | |||||
Contingent consideration to be paid, maximum payout | 20 | ||||||
Cash, prepaid, and other current assets acquired | 7.6 | ||||||
Accounts receivable acquired | 20.3 | ||||||
Inventory acquired | 84.3 | ||||||
Fixed assets acquired | 64.4 | ||||||
Accounts payable and other current liabilities acquired | 13.7 | ||||||
Finite-lived intangible assets acquired | 151.1 | ||||||
Goodwill tax deductible amount | $ 144.6 | ||||||
Net sales | $ 71.6 | ||||||
Sunlight Supply | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible asset, useful life | 5 years | ||||||
Sunlight Supply | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible asset, useful life | 25 years | ||||||
Sunlight Supply | Treasury Shares | |||||||
Business Acquisition [Line Items] | |||||||
Issuance of common shares (shares) | 0.3 | ||||||
Gavita Holdings B.V. | |||||||
Business Acquisition [Line Items] | |||||||
Estimated purchase price | $ 69.2 | ||||||
Economic interest acquired | 25.00% | 75.00% | |||||
Economic Interest Retained By Previous Owner | 25.00% | ||||||
Noncontrolling interest percentage owned by noncontrolling owners | 5.00% | ||||||
Contingent consideration paid | $ 3 | $ 3 | |||||
Long-term debt | 55.6 | ||||||
Acquisition of remaining noncontrolling interest | 7.9 | ||||||
Gavita Holdings B.V. | Capital in Excess of Stated Value | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition of remaining noncontrolling interest | $ 5.7 | ||||||
Can-Filters Group Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Estimated purchase price | $ 74.1 | ||||||
Cash, prepaid, and other current assets acquired | 1.5 | ||||||
Fixed assets acquired | 4.4 | ||||||
Accounts payable and other current liabilities acquired | 0.7 | ||||||
Finite-lived intangible assets acquired | 39.7 | ||||||
Goodwill tax deductible amount | $ 21.5 | ||||||
Finite-lived intangible asset, useful life | 25 years | ||||||
Inventory and accounts receivable acquired | $ 7.7 | ||||||
Trade Names | Sunlight Supply | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible assets acquired | $ 65.1 | ||||||
Customer Relationships | Sunlight Supply | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible assets acquired | 84.1 | ||||||
Estimated fair value of intangible asset | $ 30.9 | ||||||
Reduction of deferred tax liability, write-off of intangible asset | 7.3 | ||||||
Noncompete Agreements | Sunlight Supply | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible assets acquired | $ 1.9 | ||||||
Project Catalyst | Customer Relationships | Sunlight Supply | Hawthorne | |||||||
Business Acquisition [Line Items] | |||||||
Intangible asset impairment | $ 17.5 |
ACQUISITIONS AND INVESTMENTS _2
ACQUISITIONS AND INVESTMENTS - Pro Forma Information (Details) - Sunlight Supply $ / shares in Units, $ in Millions | 3 Months Ended |
Dec. 30, 2017USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Pro forma net sales | $ 301.3 |
Pro forma net loss attributable to controlling interest | $ (20.9) |
Proforma diluted net income per common share (USD per share) | $ / shares | $ (0.36) |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED AFFILIATES - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Accounts receivable, net | $ 163,800,000 | $ 128,400,000 | $ 226,000,000 |
Distributions in excess of investment in unconsolidated affiliate | $ 21,900,000 | 21,900,000 | $ 21,900,000 |
TruGreen Joint Venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity ownership percentage | 30.00% | ||
Carrying value of financing | $ 18,100,000 | 18,100,000 | |
Reimbursements | 0 | 500,000 | |
Accounts receivable, net | 400,000 | 200,000 | |
Indemnification asset | 2,500,000 | 4,500,000 | |
Distributions received from unconsolidated affiliates | 0 | 0 | |
Distributions in excess of investment in unconsolidated affiliate | $ 21,900,000 | 21,900,000 | |
U.S. Consumer | U.S. Industrial, Turf And Ornamental Market Joint Venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying value of financing | $ 5,300,000 |
INVESTMENT IN UNCONSOLIDATED _4
INVESTMENT IN UNCONSOLIDATED AFFILIATES - Joint Venture Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||
Revenue | $ 298.1 | $ 221.5 |
Gross margin | 34.5 | 34 |
Selling and administrative expenses | 116.3 | 108.2 |
Amortization expense | 8.3 | 7.1 |
Interest expense | 25.2 | 17.8 |
Net income (loss) attributable to controlling interest | (79.6) | (21.2) |
Joint Ventures | ||
Condensed Financial Statements, Captions [Line Items] | ||
Revenue | 287.9 | 272.2 |
Gross margin | 81.5 | 76 |
Selling and administrative expenses | 61.6 | 64 |
Amortization expense | 17.5 | 12.1 |
Interest expense | 20 | 17.5 |
Restructuring and other charges | 10.3 | 3.6 |
Net income (loss) attributable to controlling interest | $ (27.9) | $ (21.2) |
IMPAIRMENT, RESTRUCTURING AND_3
IMPAIRMENT, RESTRUCTURING AND OTHER - Impairment, Restructuring and Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges (recoveries) | $ 3.5 | $ (0.2) |
Impairment, restructuring and other charges (recoveries) from continuing operations | 6 | (0.2) |
Restructuring and other charges (recoveries), net, from discontinued operations | (4.9) | 1.4 |
Total impairment, restructuring and other charges | 1.1 | 1.2 |
Restructuring and other charges | Cost of sales—impairment, restructuring and other: | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges (recoveries) | 2 | 0 |
Restructuring and other charges | Operating expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges (recoveries) | 3.5 | (0.2) |
Property, plant and equipment impairments | Cost of sales—impairment, restructuring and other: | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges (recoveries) | $ 0.5 | $ 0 |
IMPAIRMENT, RESTRUCTURING AND_4
IMPAIRMENT, RESTRUCTURING AND OTHER - Activity Related to Liabilities Associated with Restructuring (Details) $ in Millions | 3 Months Ended |
Dec. 29, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Amounts accrued for restructuring and other, beginning balance | $ 112.2 |
Restructuring and other charges from continuing operations | 5.5 |
Restructuring and other charges from discontinued operations | 0.1 |
Payments and other | (4.4) |
Amounts accrued for restructuring and other, ending balance | $ 113.4 |
IMPAIRMENT, RESTRUCTURING AND_5
IMPAIRMENT, RESTRUCTURING AND OTHER - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve, long-term | $ 2 | |
Impairment, restructuring and other charges | 6 | $ (0.2) |
Wild Bird Food | ||
Restructuring Cost and Reserve [Line Items] | ||
Insurance recoveries | 5 | |
Project Catalyst | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 5.5 | |
Project Catalyst | Hawthorne | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment of property, plant and equipment | 0.5 | |
Restructuring costs incurred to date | 21.4 | |
Project Catalyst | U.S. Consumer | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs incurred to date | 12.3 | |
Project Catalyst | Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs incurred to date | 0.4 | |
Project Catalyst | Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs incurred to date | 0.8 | |
Project Focus | International Business | ||
Restructuring Cost and Reserve [Line Items] | ||
Divestiture transaction related costs | 1.4 | |
Project Focus | Hawthorne | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs incurred to date | 0.9 | |
Project Focus | U.S. Consumer | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 0.2 | |
Restructuring costs incurred to date | 10 | |
Project Focus | Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs incurred to date | $ 1.2 | |
Employee Severance | Project Catalyst | Hawthorne | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 0.2 | |
Impairment, restructuring and other charges | 1.2 | |
Employee Severance | Project Catalyst | U.S. Consumer | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment, restructuring and other charges | 0.4 | |
Employee Severance | Project Catalyst | Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 0.1 | |
Impairment, restructuring and other charges | 0.1 | |
Employee Severance | Project Catalyst | Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment, restructuring and other charges | 0.8 | |
Facility Closing | Project Catalyst | Hawthorne | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 1.2 | |
Impairment, restructuring and other charges | 0.5 | |
Facility Closing | Project Catalyst | U.S. Consumer | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 0.3 | |
Facility Closing | Project Catalyst | Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and adjustments | 0.2 | |
In Re Scotts EZ Seed Litigation | ||
Restructuring Cost and Reserve [Line Items] | ||
Charge recognized for probable loss | $ 0.5 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 |
Inventory Disclosure [Abstract] | |||
Finished goods | $ 524.3 | $ 292.1 | $ 462.3 |
Work-in-process | 73.8 | 60.1 | 71 |
Raw materials | 147.3 | 129.2 | 162.8 |
Total inventories | 745.4 | 481.4 | 696.1 |
Adjustments to reflect inventories at net realizable values | $ 8.3 | $ 8.1 | $ 11.4 |
MARKETING AGREEMENT - Additiona
MARKETING AGREEMENT - Additional Information (Details) - Restated Marketing Agreement $ in Millions | Aug. 31, 2017USD ($) |
Marketing Agreement [Line Items] | |
Minimum termination fee payable | $ 175 |
Minimum termination fee payable multiple | 4 |
Minimum termination fee payable threshold | $ 186.4 |
Decline in business threshold | 25.00% |
MARKETING AGREEMENT - Net Commi
MARKETING AGREEMENT - Net Commission Earned Under Marketing Agreement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Marketing Agreement [Line Items] | ||
Gross commission | $ 298.1 | $ 221.5 |
Contribution expenses | (261.1) | (187.5) |
Monsanto Marketing Agreement | ||
Marketing Agreement [Line Items] | ||
Gross commission | 0 | 0.1 |
Contribution expenses | (4.5) | (4.5) |
Amortization of marketing fee | 0 | (0.2) |
Net commission | (4.5) | (4.6) |
Reimbursements associated with Restated Marketing Agreement | 12.6 | 12.9 |
Total net sales associated with Restated Marketing Agreement | $ 8.1 | $ 8.3 |
DEBT - Components of Long-Term
DEBT - Components of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 |
Debt Instrument [Line Items] | |||
Total debt | $ 2,290.2 | $ 2,025.7 | $ 1,791.3 |
Less current portions | 95.1 | 132.6 | 86.1 |
Less unamortized debt issuance costs | 8.9 | 9.3 | 8.2 |
Long-term debt | 2,186.2 | 1,883.8 | 1,697 |
Credit Facilities | Revolving loans | |||
Debt Instrument [Line Items] | |||
Total debt | 793.9 | 492.2 | 798.8 |
Credit Facilities | Term loans | |||
Debt Instrument [Line Items] | |||
Total debt | $ 790 | 790 | 270 |
Senior Notes | Senior Notes – 5.250% | |||
Debt Instrument [Line Items] | |||
Interest rate of debt | 5.25% | ||
Total debt | $ 250 | 250 | 250 |
Senior Notes | Senior Notes – 6.000% | |||
Debt Instrument [Line Items] | |||
Interest rate of debt | 6.00% | ||
Total debt | $ 400 | 400 | 400 |
Receivables facility | |||
Debt Instrument [Line Items] | |||
Total debt | 40 | 76 | 38 |
Other | |||
Debt Instrument [Line Items] | |||
Total debt | $ 16.3 | $ 17.5 | $ 34.5 |
DEBT - Additional Information (
DEBT - Additional Information (Details) | Jul. 05, 2018USD ($) | Jan. 02, 2021 | Mar. 28, 2020 | Jun. 29, 2019 | Dec. 29, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 30, 2017USD ($) |
Debt Instrument [Line Items] | |||||||
Weighted average interest rate | 4.80% | 4.70% | |||||
Accounts receivable pledged | $ 44,400,000 | $ 84,500,000 | $ 42,200,000 | ||||
Receivables Facility | |||||||
Debt Instrument [Line Items] | |||||||
Receivables facility borrowings | 40,000,000 | 38,000,000 | |||||
Master Accounts Receivable Purchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | 200,000 | 100,000 | |||||
Accounts receivable pledged | $ 44,400,000 | $ 42,200,000 | |||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Weighted average interest rate | 4.50% | 3.20% | |||||
Fifth Amended and Restated Senior Secured Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Senior secured credit facilities, maximum borrowing capacity | $ 2,300,000,000 | ||||||
Leverage ratio | 4.48 | ||||||
Interest coverage ratio | 5.17 | ||||||
Leverage ratio, restricted payment threshold | 4 | ||||||
Restricted payment limitation, year one | $ 200,000,000 | ||||||
Restricted payment limitation per year | $ 225,000,000 | ||||||
Fifth Amended and Restated Senior Secured Credit Agreement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Leverage ratio | 5.25 | ||||||
Fifth Amended and Restated Senior Secured Credit Agreement | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest coverage ratio | 3 | ||||||
Fifth Amended and Restated Senior Secured Credit Agreement | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Senior secured credit facilities, maximum borrowing capacity | 1,500,000,000 | ||||||
Fifth Amended and Restated Senior Secured Credit Agreement | Secured Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Senior secured credit facilities, maximum borrowing capacity | $ 800,000,000 | ||||||
Credit Facilities | |||||||
Debt Instrument [Line Items] | |||||||
Available borrowing capacity | $ 683,900,000 | ||||||
Credit Facilities | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 22,200,000 | ||||||
Credit Facilities | Fifth Amended and Restated Senior Secured Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt maturity period | 5 years | ||||||
Senior Notes | Senior Notes – 5.250% | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate of debt | 5.25% | ||||||
Senior Notes | Senior Notes – 5.250% | Estimate of Fair Value Measurement | |||||||
Debt Instrument [Line Items] | |||||||
Fair value of debt | $ 230,000,000 | ||||||
Senior Notes | Senior Notes – 6.000% | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate of debt | 6.00% | ||||||
Senior Notes | Senior Notes – 6.000% | Estimate of Fair Value Measurement | |||||||
Debt Instrument [Line Items] | |||||||
Fair value of debt | $ 398,500,000 | ||||||
Forecast | Fifth Amended and Restated Senior Secured Credit Agreement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Leverage ratio | 4.50 | 4.75 | 5 |
DEBT - Interest Rate Swap Agree
DEBT - Interest Rate Swap Agreements (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 |
Instrument 1 | |||
Derivative [Line Items] | |||
Notional Amount | $ 150 | ||
Fixed Rate | 2.12% | ||
Instrument 2 | |||
Derivative [Line Items] | |||
Notional Amount | $ 50 | ||
Fixed Rate | 2.25% | ||
Instrument 3 | |||
Derivative [Line Items] | |||
Notional Amount | $ 50 | ||
Fixed Rate | 2.01% | ||
Instrument 4 | |||
Derivative [Line Items] | |||
Notional Amount | $ 200 | ||
Fixed Rate | 2.12% | ||
Instrument 5 | |||
Derivative [Line Items] | |||
Notional Amount | $ 250 | ||
Fixed Rate | 2.09% | ||
Instrument 6 | |||
Derivative [Line Items] | |||
Notional Amount | $ 100 | ||
Fixed Rate | 2.15% | ||
Instrument 7 | |||
Derivative [Line Items] | |||
Notional Amount | $ 200 | ||
Fixed Rate | 2.87% | ||
Instrument 8 | |||
Derivative [Line Items] | |||
Notional Amount | $ 100 | ||
Fixed Rate | 2.96% | ||
Instrument 9 | |||
Derivative [Line Items] | |||
Notional Amount | $ 200 | ||
Fixed Rate | 2.98% | ||
Derivatives designated as hedging instruments | Interest Rate Swap | |||
Derivative [Line Items] | |||
Notional Amount | $ 1,300 | $ 800 | $ 1,300 |
EQUITY - Summary of the Changes
EQUITY - Summary of the Changes in Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Dividends declared | $ 0.550 | $ 0.530 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Equity beginning balance | $ 354.6 | |
Noncontrolling interest, beginning balance | 5 | |
Total equity, beginning balance | 359.6 | $ 661.7 |
Adoption of new accounting pronouncements (Note 1) | 9.1 | |
Net income (loss), controlling interest | (79.6) | (21.2) |
Net income (loss) | (79.7) | (21.2) |
Other comprehensive income (loss) | (12.4) | 1 |
Share-based compensation | 6.6 | 6 |
Dividends declared ($0.55 and $0.53 per share), December 29, 2018 and December 30, 2017, respectively | (30.9) | (31.1) |
Treasury share purchases | (96.6) | |
Treasury share issuances | 0.9 | 1.6 |
Acquisition of remaining noncontrolling interest in Gavita | (13.6) | |
Equity ending balance | 248.3 | 502.8 |
Noncontrolling interest, ending balance | 4.9 | 5 |
Total equity, ending balance | 253.2 | 507.8 |
Common Shares and Capital in Excess of Stated Value | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Equity beginning balance | 420.3 | 407.6 |
Share-based compensation | 6.6 | 6 |
Treasury share issuances | (1) | 0 |
Acquisition of remaining noncontrolling interest in Gavita | (5.7) | |
Equity ending balance | 425.9 | 407.9 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Equity beginning balance | 919.9 | 978.2 |
Adoption of new accounting pronouncements (Note 1) | 26 | |
Net income (loss), controlling interest | (79.6) | (21.2) |
Dividends declared ($0.55 and $0.53 per share), December 29, 2018 and December 30, 2017, respectively | (30.9) | (31.1) |
Equity ending balance | 835.4 | 925.9 |
Treasury Shares | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Equity beginning balance | (939.6) | (667.8) |
Treasury share purchases | (96.6) | |
Treasury share issuances | 1.9 | 1.6 |
Equity ending balance | (937.7) | (762.8) |
Accumulated Other Comprehensive Loss | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Equity beginning balance | (46) | (69.2) |
Adoption of new accounting pronouncements (Note 1) | (16.9) | |
Other comprehensive income (loss) | (12.4) | 1 |
Equity ending balance | (75.3) | (68.2) |
Total Equity - Controlling Interest | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Equity beginning balance | 354.6 | 648.8 |
Adoption of new accounting pronouncements (Note 1) | 9.1 | |
Net income (loss), controlling interest | (79.6) | (21.2) |
Other comprehensive income (loss) | (12.4) | 1 |
Share-based compensation | 6.6 | 6 |
Dividends declared ($0.55 and $0.53 per share), December 29, 2018 and December 30, 2017, respectively | (30.9) | (31.1) |
Treasury share purchases | (96.6) | |
Treasury share issuances | 0.9 | 1.6 |
Acquisition of remaining noncontrolling interest in Gavita | (5.7) | |
Equity ending balance | 248.3 | 502.8 |
Non-controlling Interest | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Noncontrolling interest, beginning balance | 5 | 12.9 |
Net income (loss), controlling interest | (0.1) | |
Acquisition of remaining noncontrolling interest in Gavita | (7.9) | |
Noncontrolling interest, ending balance | $ 4.9 | $ 5 |
EQUITY - Additional Information
EQUITY - Additional Information (Details) - USD ($) | Jun. 04, 2018 | Oct. 02, 2017 | Aug. 31, 2014 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Aug. 03, 2016 | May 26, 2016 |
Equity, Class of Treasury Stock [Line Items] | ||||||||
Authorized repurchase amount | $ 500,000,000 | $ 1,000,000,000 | ||||||
Share repurchase period | 5 years | |||||||
Increase in authorized share repurchase authorization | $ 500,000,000 | |||||||
Common shares repurchased (shares) | 0 | 1,000,000 | 8,300,000 | |||||
Common shares repurchased | $ 96,600,000 | $ 714,600,000 | ||||||
Treasury share issuances | $ 900,000 | 1,600,000 | ||||||
Acquisition of remaining noncontrolling interest | 13,600,000 | |||||||
Treasury Shares | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Treasury share issuances | $ 1,900,000 | 1,600,000 | ||||||
Sunlight Supply | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Aggregate purchase price | $ 458,600,000 | |||||||
Sunlight Supply | Treasury Shares | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Issuance of common shares (shares) | 300,000 | |||||||
Treasury share issuances | $ 20,700,000 | |||||||
Gavita Holdings B.V. | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Economic interest acquired | 25.00% | 75.00% | ||||||
Aggregate purchase price | $ 69,200,000 | |||||||
Contingent consideration paid | 3,000,000 | $ 3,000,000 | ||||||
Long-term debt | 55,600,000 | |||||||
Acquisition of remaining noncontrolling interest | 7,900,000 | |||||||
Gavita Holdings B.V. | Capital in Excess of Stated Value | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Acquisition of remaining noncontrolling interest | $ 5,700,000 |
EQUITY - Share-based Awards (De
EQUITY - Share-based Awards (Details) - USD ($) $ in Millions | Oct. 30, 2017 | Feb. 06, 2019 | Dec. 29, 2018 | Dec. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based awards (shares) | 5,099 | 210,065 | ||
Aggregate fair value at grant dates | $ 0.4 | $ 20.6 | ||
Restricted stock units | Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based awards (shares) | 2,576 | 4,914 | ||
Performance units | Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based awards (shares) | 1,078 | 204,702 | ||
Deferred stock units | Board of Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based awards (shares) | 1,445 | 449 | ||
Project Focus | Hawthorne | Performance Based Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Project Focus | Hawthorne | Performance units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based awards (shares) | 200,000 | |||
Performance period | 4 years | |||
Fair value of awards granted | $ 20.2 | |||
Project Focus | Hawthorne | Minimum | Performance units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% | |||
Project Focus | Hawthorne | Maximum | Performance units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 250.00% | |||
Subsequent Event | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based awards (shares) | 200,000 | |||
Fair value of awards granted | $ 17.1 |
EQUITY - Total Share-based Comp
EQUITY - Total Share-based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Equity [Abstract] | ||
Share-based compensation | $ 6.6 | $ 6 |
Tax benefit recognized | $ 1.7 | $ 2.3 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Contingency [Line Items] | ||||
Effective tax rate related to continuing operations | 22.00% | 76.90% | ||
Deferred tax liability | $ 157.5 | |||
Deferred tax liability reduction recorded as tax benefit | $ 44.6 | |||
Repatriation transition tax | 14 | |||
Foreign tax credits | $ 13.9 | $ 18.2 | ||
Prorated effective corporate tax rate | 24.50% | |||
Federal tax on deemed repatriation | $ 21.2 | |||
Undistributed earnings of foreign subsidiaries | 97.8 | |||
Valuation allowance of excess foreign tax credits | $ 0.5 | |||
Deferred tax liability | ||||
Income Tax Contingency [Line Items] | ||||
Deferred tax liability reduction recorded as tax benefit | $ 45.9 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | 3 Months Ended |
Dec. 29, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Accrual for environmental actions | $ 4.2 |
Wild Bird Food | |
Loss Contingencies [Line Items] | |
Accrual for probable loss | 85 |
Insurance recoveries | 5 |
In Re Scotts EZ Seed Litigation | |
Loss Contingencies [Line Items] | |
Accrual for probable loss | 12.2 |
Charge recognized for probable loss | $ 0.5 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Additional Information (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 |
Not Designated as Hedging Instrument | Currency forward contracts | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount | $ 117.5 | $ 117.2 | $ 302.3 |
Fair value of forward contracts | 0.5 | (0.6) | (4.7) |
Designated as Hedging Instruments | Interest Rate Swap | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount | 1,300 | $ 800 | $ 1,300 |
Gain related to interest rate swap agreements expected to be reclassified | (0.1) | ||
Designated as Hedging Instruments | Commodity hedging instruments | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain related to urea derivatives expected to be reclassified | $ (0.6) |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Outstanding Commodity Contracts (Details) | Dec. 29, 2018lbTgal | Sep. 30, 2018lbTgal | Dec. 30, 2017lbTgal |
Urea (in tons) | |||
Derivative [Line Items] | |||
Outstanding commodity contracts, mass type (in tons and pounds) | T | 52,000 | 88,000 | 40,500 |
Resin (in pounds) | |||
Derivative [Line Items] | |||
Outstanding commodity contracts, mass type (in tons and pounds) | lb | 12,600,000 | 0 | 0 |
Diesel (in gallons) | |||
Derivative [Line Items] | |||
Outstanding commodity contracts, volume type (in gallons) | 4,410,000 | 5,460,000 | 4,536,000 |
Heating Oil (in gallons) | |||
Derivative [Line Items] | |||
Outstanding commodity contracts, volume type (in gallons) | 1,218,000 | 1,218,000 | 1,344,000 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Fair Values of Derivative Instruments (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 |
Derivatives, Fair Value [Line Items] | |||
Total derivatives | $ (3.4) | $ 11 | $ 0.3 |
Designated as Hedging Instruments | |||
Derivatives, Fair Value [Line Items] | |||
Total derivatives | (1.5) | 9.9 | 3.2 |
Designated as Hedging Instruments | Interest rate swap agreements | Prepaid and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset | 1.8 | 2 | 1.4 |
Designated as Hedging Instruments | Interest rate swap agreements | Other assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset | 0.6 | 1.8 | 0.2 |
Designated as Hedging Instruments | Interest rate swap agreements | Other current liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability | (1.6) | 0 | (1) |
Designated as Hedging Instruments | Interest rate swap agreements | Other liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability | (3.1) | 0 | 0 |
Designated as Hedging Instruments | Commodity hedging instruments | Prepaid and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset | 0.8 | 6.1 | 2.6 |
Not Designated as Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Total derivatives | (1.9) | 1.1 | (2.9) |
Not Designated as Hedging Instrument | Currency forward contracts | Prepaid and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset | 0.8 | 0.9 | 0.4 |
Not Designated as Hedging Instrument | Currency forward contracts | Other current liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability | (0.3) | (1.5) | (5.1) |
Not Designated as Hedging Instrument | Commodity hedging instruments | Prepaid and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset | 0 | 1.7 | 1.8 |
Not Designated as Hedging Instrument | Commodity hedging instruments | Other current liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability | $ (2.4) | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_6
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Effect of Derivative Instruments on AOCI and Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in Earnings | $ (0.2) | $ (1.3) |
Not Designated as Hedging Instrument | Currency forward contracts | Other income, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in Earnings | 3.5 | (2.6) |
Not Designated as Hedging Instrument | Commodity hedging instruments | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in Earnings | (3.7) | 1.3 |
Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | (7.9) | 0.8 |
Amount of Gain / (Loss) Reclassified From AOCI Into Earnings | 0.1 | 0.1 |
Cash Flow Hedging | Interest rate swap agreements | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | (4.6) | 0.4 |
Cash Flow Hedging | Interest rate swap agreements | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified From AOCI Into Earnings | (0.1) | 0.1 |
Cash Flow Hedging | Commodity hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | (3.3) | 0.4 |
Cash Flow Hedging | Commodity hedging instruments | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified From AOCI Into Earnings | $ 0.2 | $ 0 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 |
Assets | |||
Cash equivalents | $ 1.1 | $ 1.4 | $ 30.9 |
Other | 31.2 | 32.4 | 29 |
Total | 36.3 | 46.3 | 66.3 |
Liabilities | |||
Other | (0.9) | (0.9) | |
Total | (8.3) | (2.4) | (6.1) |
Interest rate swap agreements | |||
Assets | |||
Derivatives | 2.4 | 3.8 | 1.6 |
Liabilities | |||
Derivatives | (4.7) | (1) | |
Currency forward contracts | |||
Assets | |||
Derivatives | 0.8 | 0.9 | 0.4 |
Liabilities | |||
Derivatives | (0.3) | (1.5) | (5.1) |
Commodity hedging instruments | |||
Assets | |||
Derivatives | 0.8 | 7.8 | 4.4 |
Liabilities | |||
Derivatives | (2.4) | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets | |||
Cash equivalents | 1.1 | 1.4 | 30.9 |
Other | 18.2 | 19.4 | 17.2 |
Total | 19.3 | 20.8 | 48.1 |
Liabilities | |||
Other | 0 | 0 | |
Total | 0 | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate swap agreements | |||
Assets | |||
Derivatives | 0 | 0 | 0 |
Liabilities | |||
Derivatives | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Currency forward contracts | |||
Assets | |||
Derivatives | 0 | 0 | 0 |
Liabilities | |||
Derivatives | 0 | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity hedging instruments | |||
Assets | |||
Derivatives | 0 | 0 | 0 |
Liabilities | |||
Derivatives | 0 | ||
Significant Other Observable Inputs (Level 2) | |||
Assets | |||
Cash equivalents | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Total | 4 | 12.5 | 6.4 |
Liabilities | |||
Other | 0 | 0 | |
Total | (7.4) | (1.5) | (6.1) |
Significant Other Observable Inputs (Level 2) | Interest rate swap agreements | |||
Assets | |||
Derivatives | 2.4 | 3.8 | 1.6 |
Liabilities | |||
Derivatives | (4.7) | (1) | |
Significant Other Observable Inputs (Level 2) | Currency forward contracts | |||
Assets | |||
Derivatives | 0.8 | 0.9 | 0.4 |
Liabilities | |||
Derivatives | (0.3) | (1.5) | (5.1) |
Significant Other Observable Inputs (Level 2) | Commodity hedging instruments | |||
Assets | |||
Derivatives | 0.8 | 7.8 | 4.4 |
Liabilities | |||
Derivatives | (2.4) | ||
Unobservable Inputs (Level 3) | |||
Assets | |||
Cash equivalents | 0 | 0 | 0 |
Other | 13 | 13 | 11.8 |
Total | 13 | 13 | 11.8 |
Liabilities | |||
Other | (0.9) | (0.9) | |
Total | (0.9) | (0.9) | 0 |
Unobservable Inputs (Level 3) | Interest rate swap agreements | |||
Assets | |||
Derivatives | 0 | 0 | 0 |
Liabilities | |||
Derivatives | 0 | 0 | |
Unobservable Inputs (Level 3) | Currency forward contracts | |||
Assets | |||
Derivatives | 0 | 0 | 0 |
Liabilities | |||
Derivatives | 0 | 0 | 0 |
Unobservable Inputs (Level 3) | Commodity hedging instruments | |||
Assets | |||
Derivatives | 0 | $ 0 | $ 0 |
Liabilities | |||
Derivatives | $ 0 |
SEGMENT INFORMATION - Net Sales
SEGMENT INFORMATION - Net Sales, Profit (Loss), and Total Assets by Segment (Details) $ in Millions | 3 Months Ended | ||
Dec. 29, 2018USD ($)segment | Dec. 30, 2017USD ($) | Sep. 30, 2018USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | ||
Segment Reporting Information [Line Items] | |||
Net sales | $ 298.1 | $ 221.5 | |
Impairment, restructuring and other | (3.5) | 0.2 | |
Equity in income of unconsolidated affiliates | 1.3 | 0.6 | |
Interest expense | (25.2) | (17.8) | |
Other non-operating income, net | 2.9 | 2.5 | |
Total assets: | |||
Total assets | 3,225.2 | 2,910.8 | $ 3,054.5 |
Corporate | |||
Total assets: | |||
Total assets | 210.8 | 230.9 | 212.4 |
Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Segment profit (loss) | (105.9) | (86.6) | |
Intangible asset amortization | (8.3) | (6.9) | |
Impairment, restructuring and other | (6) | 0.2 | |
Equity in income of unconsolidated affiliates | 1.3 | 0.6 | |
Interest expense | (25.2) | (17.8) | |
Other non-operating income, net | 2.9 | 2.5 | |
Continuing Operations | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment profit (loss) | (42.7) | (40.2) | |
Continuing Operations | Corporate | |||
Segment Reporting Information [Line Items] | |||
Segment profit (loss) | (27.9) | (25) | |
U.S. Consumer | |||
Segment Reporting Information [Line Items] | |||
Net sales | 136.9 | 125.9 | |
U.S. Consumer | Operating Segments | |||
Total assets: | |||
Total assets | 1,889.5 | 1,836.1 | 1,702.2 |
U.S. Consumer | Continuing Operations | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment profit (loss) | (43.1) | (37.9) | |
Hawthorne | |||
Segment Reporting Information [Line Items] | |||
Net sales | 140.8 | 76.7 | |
Hawthorne | Operating Segments | |||
Total assets: | |||
Total assets | 961.2 | 674.4 | 978.6 |
Hawthorne | Continuing Operations | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment profit (loss) | 4.4 | 1.7 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Net sales | 20.4 | 18.9 | |
Other | Operating Segments | |||
Total assets: | |||
Total assets | 163.7 | 169.4 | $ 161.3 |
Other | Continuing Operations | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment profit (loss) | $ (4) | $ (4) |
SEGMENT INFORMATION - Net Sal_2
SEGMENT INFORMATION - Net Sales by Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Revenue from External Customer [Line Items] | ||
Net sales | $ 298.1 | $ 221.5 |
U.S. Consumer | ||
Revenue from External Customer [Line Items] | ||
Net sales | 136.9 | 125.9 |
U.S. Consumer | Lawn care | ||
Revenue from External Customer [Line Items] | ||
Net sales | 49.7 | 35 |
U.S. Consumer | Growing media | ||
Revenue from External Customer [Line Items] | ||
Net sales | 38.3 | 37.6 |
U.S. Consumer | Controls | ||
Revenue from External Customer [Line Items] | ||
Net sales | 30.2 | 31.4 |
U.S. Consumer | Roundup® Restated Marketing Agreement | ||
Revenue from External Customer [Line Items] | ||
Net sales | 8.1 | 8.3 |
U.S. Consumer | Other, primarily gardening and landscape | ||
Revenue from External Customer [Line Items] | ||
Net sales | 10.6 | 13.6 |
Hawthorne | ||
Revenue from External Customer [Line Items] | ||
Net sales | 140.8 | 76.7 |
Hawthorne | Indoor, urban and hydroponic gardening | ||
Revenue from External Customer [Line Items] | ||
Net sales | 140.8 | 76.7 |
Other | ||
Revenue from External Customer [Line Items] | ||
Net sales | 20.4 | 18.9 |
Other | Growing media | ||
Revenue from External Customer [Line Items] | ||
Net sales | 10.9 | 11 |
Other | Other, primarily gardening and landscape | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 9.5 | $ 7.9 |
SEGMENT INFORMATION - Net Sal_3
SEGMENT INFORMATION - Net Sales by Geographic Area (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 298.1 | $ 221.5 |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 246.9 | 162.5 |
International | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 51.2 | $ 59 |
FINANCIAL INFORMATION FOR SUB_3
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS - Additional information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Disclosure of Dividends Paid | ||
Revolving loan term | 5 years | |
Return of investments from affiliates | $ 0 | $ 0 |
Reportable Legal Entities | Parent | ||
Disclosure of Dividends Paid | ||
Return of investments from affiliates | $ 49.1 | $ 182.5 |
Senior Notes – 6.000% | Senior Notes | ||
Disclosure of Dividends Paid | ||
Interest rate of debt | 6.00% | |
Senior Notes – 5.250% | Senior Notes | ||
Disclosure of Dividends Paid | ||
Interest rate of debt | 5.25% |
FINANCIAL INFORMATION FOR SUB_4
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Schedule of Condensed Consolidating Statement of Operations [Line Items] | ||
Net sales | $ 298.1 | $ 221.5 |
Cost of sales | 261.1 | 187.5 |
Cost of sales—impairment, restructuring and other | 2.5 | 0 |
Gross profit | 34.5 | 34 |
Operating expenses: | ||
Selling, general and administrative | 116.3 | 108.2 |
Impairment, restructuring and other | 3.5 | (0.2) |
Other (income) expense, net | (0.4) | (2.1) |
Income (loss) from operations | (84.9) | (71.9) |
Equity (income) loss in subsidiaries | 0 | 0 |
Equity in (income) loss of unconsolidated affiliates | (1.3) | (0.6) |
Interest expense | 25.2 | 17.8 |
Other non-operating (income) expense, net | (2.9) | (2.5) |
Income (loss) from continuing operations before income taxes | (105.9) | (86.6) |
Income tax expense (benefit) from continuing operations | (23.3) | (66.6) |
Income (loss) from continuing operations | (82.6) | (20) |
Income (loss) from discontinued operations, net of tax | 2.9 | (1.2) |
Net income (loss) | (79.7) | (21.2) |
Net (income) loss attributable to noncontrolling interest | 0.1 | 0 |
Net income (loss) attributable to controlling interest | (79.6) | (21.2) |
Reportable Legal Entities | Parent | ||
Schedule of Condensed Consolidating Statement of Operations [Line Items] | ||
Net sales | 0 | 0 |
Cost of sales | 0 | 0 |
Cost of sales—impairment, restructuring and other | 0 | |
Gross profit | 0 | 0 |
Operating expenses: | ||
Selling, general and administrative | 0 | 0 |
Impairment, restructuring and other | 0 | 0 |
Other (income) expense, net | (0.2) | (0.2) |
Income (loss) from operations | 0.2 | 0.2 |
Equity (income) loss in subsidiaries | 69.3 | 18 |
Other non-operating (income) loss | (3.9) | |
Equity in (income) loss of unconsolidated affiliates | 0 | 0 |
Interest expense | 18.8 | 16.9 |
Other non-operating (income) expense, net | (5.9) | 0 |
Income (loss) from continuing operations before income taxes | (82) | (30.8) |
Income tax expense (benefit) from continuing operations | (2.8) | (9.8) |
Income (loss) from continuing operations | (79.2) | (21) |
Income (loss) from discontinued operations, net of tax | 0 | 0 |
Net income (loss) | (79.2) | (21) |
Net (income) loss attributable to noncontrolling interest | 0 | 0 |
Net income (loss) attributable to controlling interest | (79.2) | (21) |
Reportable Legal Entities | Subsidiary Guarantors | ||
Schedule of Condensed Consolidating Statement of Operations [Line Items] | ||
Net sales | 232.1 | 147.5 |
Cost of sales | 206.9 | 127 |
Cost of sales—impairment, restructuring and other | 2.2 | |
Gross profit | 23 | 20.5 |
Operating expenses: | ||
Selling, general and administrative | 101.4 | 90.4 |
Impairment, restructuring and other | 3.4 | (0.2) |
Other (income) expense, net | 0.1 | (1.1) |
Income (loss) from operations | (81.9) | (68.6) |
Equity (income) loss in subsidiaries | (1.5) | 1 |
Other non-operating (income) loss | 0 | |
Equity in (income) loss of unconsolidated affiliates | (1.4) | (0.5) |
Interest expense | 18.3 | 8.8 |
Other non-operating (income) expense, net | (2.3) | (2.5) |
Income (loss) from continuing operations before income taxes | (95) | (75.4) |
Income tax expense (benefit) from continuing operations | (21.3) | (57.5) |
Income (loss) from continuing operations | (73.7) | (17.9) |
Income (loss) from discontinued operations, net of tax | 3 | (0.2) |
Net income (loss) | (70.7) | (18.1) |
Net (income) loss attributable to noncontrolling interest | 0 | 0 |
Net income (loss) attributable to controlling interest | (70.7) | (18.1) |
Reportable Legal Entities | Non-Guarantors | ||
Schedule of Condensed Consolidating Statement of Operations [Line Items] | ||
Net sales | 66 | 74 |
Cost of sales | 54.2 | 60.5 |
Cost of sales—impairment, restructuring and other | 0.3 | |
Gross profit | 11.5 | 13.5 |
Operating expenses: | ||
Selling, general and administrative | 14.6 | 17.5 |
Impairment, restructuring and other | 0.1 | |
Other (income) expense, net | (0.3) | (0.8) |
Income (loss) from operations | (2.9) | (3.2) |
Equity (income) loss in subsidiaries | 0 | 0 |
Other non-operating (income) loss | (4.7) | |
Equity in (income) loss of unconsolidated affiliates | 0.1 | (0.1) |
Interest expense | 0.9 | 0.7 |
Other non-operating (income) expense, net | (7.5) | 0 |
Income (loss) from continuing operations before income taxes | 3.6 | 0.9 |
Income tax expense (benefit) from continuing operations | 0.8 | 0.7 |
Income (loss) from continuing operations | 2.8 | 0.2 |
Income (loss) from discontinued operations, net of tax | (0.1) | (1) |
Net income (loss) | 2.7 | (0.8) |
Net (income) loss attributable to noncontrolling interest | 0 | 0 |
Net income (loss) attributable to controlling interest | 2.7 | (0.8) |
Eliminations/ Consolidations | ||
Schedule of Condensed Consolidating Statement of Operations [Line Items] | ||
Net sales | 0 | 0 |
Cost of sales | 0 | 0 |
Cost of sales—impairment, restructuring and other | 0 | |
Gross profit | 0 | 0 |
Operating expenses: | ||
Selling, general and administrative | 0.3 | 0.3 |
Impairment, restructuring and other | 0 | 0 |
Other (income) expense, net | 0 | 0 |
Income (loss) from operations | (0.3) | (0.3) |
Equity (income) loss in subsidiaries | (67.8) | (19) |
Other non-operating (income) loss | 8.6 | |
Equity in (income) loss of unconsolidated affiliates | 0 | 0 |
Interest expense | (12.8) | (8.6) |
Other non-operating (income) expense, net | 12.8 | 0 |
Income (loss) from continuing operations before income taxes | 67.5 | 18.7 |
Income tax expense (benefit) from continuing operations | 0 | 0 |
Income (loss) from continuing operations | 67.5 | 18.7 |
Income (loss) from discontinued operations, net of tax | 0 | 0 |
Net income (loss) | 67.5 | 18.7 |
Net (income) loss attributable to noncontrolling interest | 0.1 | 0 |
Net income (loss) attributable to controlling interest | $ 67.6 | $ 18.7 |
FINANCIAL INFORMATION FOR SUB_5
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS - Condensed Consolidating Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) | ||
Net income (loss) | $ (79.7) | $ (21.2) |
Other comprehensive income (loss): | ||
Net foreign currency translation adjustment | (5.3) | 0 |
Net change in derivatives | (8) | 0.7 |
Net change in pension and other post-retirement benefits | 0.9 | 0.3 |
Total other comprehensive income (loss) | (12.4) | 1 |
Comprehensive income (loss) | (92.1) | (20.2) |
Comprehensive (income) loss attributable to noncontrolling interest | 0.1 | 0 |
Comprehensive income (loss) attributable to controlling interest | (92) | (20.2) |
Reportable Legal Entities | Parent | ||
Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) | ||
Net income (loss) | (79.2) | (21) |
Other comprehensive income (loss): | ||
Net foreign currency translation adjustment | (5.3) | 0 |
Net change in derivatives | (8) | 0.7 |
Net change in pension and other post-retirement benefits | 0.9 | 0.3 |
Total other comprehensive income (loss) | (12.4) | 1 |
Comprehensive income (loss) | (91.6) | (20) |
Comprehensive (income) loss attributable to noncontrolling interest | 0 | 0 |
Comprehensive income (loss) attributable to controlling interest | (91.6) | (20) |
Reportable Legal Entities | Subsidiary Guarantors | ||
Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) | ||
Net income (loss) | (70.7) | (18.1) |
Other comprehensive income (loss): | ||
Net foreign currency translation adjustment | 0 | 0 |
Net change in derivatives | (3.5) | 0.4 |
Net change in pension and other post-retirement benefits | 0.1 | 0.1 |
Total other comprehensive income (loss) | (3.4) | 0.5 |
Comprehensive income (loss) | (74.1) | (17.6) |
Comprehensive (income) loss attributable to noncontrolling interest | 0 | 0 |
Comprehensive income (loss) attributable to controlling interest | (74.1) | (17.6) |
Reportable Legal Entities | Non-Guarantors | ||
Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) | ||
Net income (loss) | 2.7 | (0.8) |
Other comprehensive income (loss): | ||
Net foreign currency translation adjustment | (5.3) | 0 |
Net change in derivatives | 0 | 0 |
Net change in pension and other post-retirement benefits | 0.8 | 0.2 |
Total other comprehensive income (loss) | (4.5) | 0.2 |
Comprehensive income (loss) | (1.8) | (0.6) |
Comprehensive (income) loss attributable to noncontrolling interest | 0 | 0 |
Comprehensive income (loss) attributable to controlling interest | (1.8) | (0.6) |
Eliminations/ Consolidations | ||
Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) | ||
Net income (loss) | 67.5 | 18.7 |
Other comprehensive income (loss): | ||
Net foreign currency translation adjustment | 5.3 | 0 |
Net change in derivatives | 3.5 | (0.4) |
Net change in pension and other post-retirement benefits | (0.9) | (0.3) |
Total other comprehensive income (loss) | 7.9 | (0.7) |
Comprehensive income (loss) | 75.4 | 18 |
Comprehensive (income) loss attributable to noncontrolling interest | 0.1 | 0 |
Comprehensive income (loss) attributable to controlling interest | $ 75.5 | $ 18 |
FINANCIAL INFORMATION FOR SUB_6
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items] | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ (233.4) | $ (210.5) |
INVESTING ACTIVITIES | ||
Investments in property, plant and equipment | (12.7) | (19.4) |
Investments in loans receivable | 0 | (5.3) |
Investments in acquired businesses, net of cash acquired | (6.6) | (70) |
Other investing, net | 2.2 | 0 |
Return of investments from affiliates | 0 | 0 |
Investing cash flows from (to) affiliates | 0 | 0 |
Net cash provided by (used in) investing activities | (17.1) | (94.7) |
FINANCING ACTIVITIES | ||
Borrowings under revolving and bank lines of credit and term loans | 386.8 | 573.4 |
Repayments under revolving and bank lines of credit and term loans | (116.3) | (136) |
Dividends paid | (30.4) | (30.5) |
Purchase of Common Shares | (0.5) | (96.2) |
Payments on seller notes | (0.8) | (3) |
Cash received from exercise of stock options | 1.1 | 1 |
Acquisition of noncontrolling interests | 0 | (70.1) |
Financing cash flows from (to) affiliates | 0 | 0 |
Net cash provided by (used in) financing activities | 239.9 | 238.6 |
Effect of exchange rate changes on cash | (0.7) | 0.6 |
Net increase (decrease) in cash and cash equivalents | (11.3) | (66) |
Cash and cash equivalents at beginning of period | 33.9 | 120.5 |
Cash and cash equivalents at end of period | 22.6 | 54.5 |
Reportable Legal Entities | Parent | ||
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items] | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (19.1) | 9.6 |
INVESTING ACTIVITIES | ||
Investments in property, plant and equipment | 0 | 0 |
Investments in loans receivable | 0 | |
Investments in acquired businesses, net of cash acquired | 0 | 0 |
Other investing, net | 0 | |
Return of investments from affiliates | 49.1 | 182.5 |
Investing cash flows from (to) affiliates | (0.2) | (66.4) |
Net cash provided by (used in) investing activities | 48.9 | 116.1 |
FINANCING ACTIVITIES | ||
Borrowings under revolving and bank lines of credit and term loans | 0 | 0 |
Repayments under revolving and bank lines of credit and term loans | 0 | 0 |
Dividends paid | (30.4) | (30.5) |
Purchase of Common Shares | (0.5) | (96.2) |
Payments on seller notes | 0 | 0 |
Cash received from exercise of stock options | 1.1 | 1 |
Acquisition of noncontrolling interests | 0 | |
Financing cash flows from (to) affiliates | 0 | 0 |
Net cash provided by (used in) financing activities | (29.8) | (125.7) |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Reportable Legal Entities | Subsidiary Guarantors | ||
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items] | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (193.6) | (239.2) |
INVESTING ACTIVITIES | ||
Investments in property, plant and equipment | (12.1) | (17.3) |
Investments in loans receivable | (5.3) | |
Investments in acquired businesses, net of cash acquired | (6.6) | (40.5) |
Other investing, net | 0.9 | |
Return of investments from affiliates | 0 | 0 |
Investing cash flows from (to) affiliates | (2.3) | (66.9) |
Net cash provided by (used in) investing activities | (20.1) | (130) |
FINANCING ACTIVITIES | ||
Borrowings under revolving and bank lines of credit and term loans | 347.6 | 534.6 |
Repayments under revolving and bank lines of credit and term loans | (86.6) | (86.7) |
Dividends paid | (49.1) | (182.5) |
Purchase of Common Shares | 0 | 0 |
Payments on seller notes | (0.8) | 0 |
Cash received from exercise of stock options | 0 | 0 |
Acquisition of noncontrolling interests | 0 | |
Financing cash flows from (to) affiliates | 0.2 | 66.4 |
Net cash provided by (used in) financing activities | 211.3 | 331.8 |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | (2.4) | (37.4) |
Cash and cash equivalents at beginning of period | 3 | 39.8 |
Cash and cash equivalents at end of period | 0.6 | 2.4 |
Return on investments | 0.5 | |
Reportable Legal Entities | Non-Guarantors | ||
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items] | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (20.7) | 19.6 |
INVESTING ACTIVITIES | ||
Investments in property, plant and equipment | (0.6) | (2.1) |
Investments in loans receivable | 0 | |
Investments in acquired businesses, net of cash acquired | 0 | (29.5) |
Other investing, net | 1.3 | |
Return of investments from affiliates | 0 | 0 |
Investing cash flows from (to) affiliates | 0 | 0 |
Net cash provided by (used in) investing activities | 0.7 | (31.6) |
FINANCING ACTIVITIES | ||
Borrowings under revolving and bank lines of credit and term loans | 39.2 | 38.8 |
Repayments under revolving and bank lines of credit and term loans | (29.7) | (49.3) |
Dividends paid | 0 | (0.5) |
Purchase of Common Shares | 0 | 0 |
Payments on seller notes | 0 | (3) |
Cash received from exercise of stock options | 0 | 0 |
Acquisition of noncontrolling interests | (70.1) | |
Financing cash flows from (to) affiliates | 2.3 | 66.9 |
Net cash provided by (used in) financing activities | 11.8 | (17.2) |
Effect of exchange rate changes on cash | (0.7) | 0.6 |
Net increase (decrease) in cash and cash equivalents | (8.9) | (28.6) |
Cash and cash equivalents at beginning of period | 30.9 | 80.7 |
Cash and cash equivalents at end of period | 22 | 52.1 |
Eliminations/ Consolidations | ||
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items] | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 0 | (0.5) |
INVESTING ACTIVITIES | ||
Investments in property, plant and equipment | 0 | 0 |
Investments in loans receivable | 0 | |
Investments in acquired businesses, net of cash acquired | 0 | 0 |
Other investing, net | 0 | |
Return of investments from affiliates | (49.1) | (182.5) |
Investing cash flows from (to) affiliates | 2.5 | 133.3 |
Net cash provided by (used in) investing activities | (46.6) | (49.2) |
FINANCING ACTIVITIES | ||
Borrowings under revolving and bank lines of credit and term loans | 0 | 0 |
Repayments under revolving and bank lines of credit and term loans | 0 | 0 |
Dividends paid | 49.1 | 183 |
Purchase of Common Shares | 0 | 0 |
Payments on seller notes | 0 | 0 |
Cash received from exercise of stock options | 0 | 0 |
Acquisition of noncontrolling interests | 0 | |
Financing cash flows from (to) affiliates | (2.5) | (133.3) |
Net cash provided by (used in) financing activities | 46.6 | 49.7 |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | $ 0 | $ 0 |
FINANCIAL INFORMATION FOR SUB_7
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Sep. 30, 2018 | Dec. 30, 2017 | Sep. 30, 2017 |
Current assets: | ||||
Cash and cash equivalents | $ 22.6 | $ 33.9 | $ 54.5 | $ 120.5 |
Accounts receivable, net | 163.8 | 226 | 128.4 | |
Accounts receivable pledged | 44.4 | 84.5 | 42.2 | |
Inventories | 745.4 | 481.4 | 696.1 | |
Prepaid and other current assets | 102.5 | 59.9 | 61.7 | |
Total current assets | 1,078.7 | 885.7 | 982.9 | |
Investment in unconsolidated affiliates | 37.3 | 36.1 | 31.7 | |
Property, plant and equipment, net | 519.8 | 530.8 | 464.1 | |
Goodwill | 539.7 | 543 | 464.8 | |
Intangible assets, net | 846.8 | 857.3 | 783.4 | |
Other assets | 202.9 | 201.6 | 183.9 | |
Equity investment in subsidiaries | 0 | 0 | 0 | |
Intercompany assets | 0 | 0 | 0 | |
Total assets | 3,225.2 | 3,054.5 | 2,910.8 | |
Current liabilities: | ||||
Current portion of debt | 95.1 | 132.6 | 86.1 | |
Accounts payable | 237 | 150.5 | 223.2 | |
Other current liabilities | 262.5 | 329.6 | 161.8 | |
Total current liabilities | 594.6 | 612.7 | 471.1 | |
Long-term debt | 2,186.2 | 1,883.8 | 1,697 | |
Distributions in excess of investment in unconsolidated affiliate | 21.9 | 21.9 | 21.9 | |
Other liabilities | 169.3 | 176.5 | 213 | |
Equity investment in subsidiaries | 0 | 0 | 0 | |
Intercompany liabilities | 0 | 0 | ||
Total liabilities | 2,972 | 2,694.9 | 2,403 | |
Total equity—controlling interest | 248.3 | 354.6 | 502.8 | |
Noncontrolling interest | 4.9 | 5 | 5 | |
Total equity | 253.2 | 359.6 | 507.8 | 661.7 |
Total liabilities and equity | 3,225.2 | 3,054.5 | 2,910.8 | |
Reportable Legal Entities | Parent | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | 0 | |
Accounts receivable pledged | 0 | 0 | 0 | |
Inventories | 0 | 0 | 0 | |
Prepaid and other current assets | 2 | 2.2 | 1.4 | |
Total current assets | 2 | 2.2 | 1.4 | |
Investment in unconsolidated affiliates | 0 | 0 | 0 | |
Property, plant and equipment, net | 0 | 0 | 0 | |
Goodwill | 0 | 0 | 0 | |
Intangible assets, net | 0 | 0 | 0 | |
Other assets | 9.7 | 11.4 | 7.7 | |
Equity investment in subsidiaries | 746.1 | 860 | 1,125.8 | |
Intercompany assets | 1,736.3 | 1,422.8 | 1,087.5 | |
Total assets | 2,494.1 | 2,296.4 | 2,222.4 | |
Current liabilities: | ||||
Current portion of debt | 47.7 | 40 | 15 | |
Accounts payable | 0 | 0 | 0 | |
Other current liabilities | 10.6 | 17.8 | 8.7 | |
Total current liabilities | 58.3 | 57.8 | 23.7 | |
Long-term debt | 2,185 | 1,883 | 1,695.6 | |
Distributions in excess of investment in unconsolidated affiliate | 0 | 0 | 0 | |
Other liabilities | 2.5 | 1 | 0.3 | |
Equity investment in subsidiaries | 0 | 0 | 0 | |
Intercompany liabilities | 0 | 0 | 0 | |
Total liabilities | 2,245.8 | 1,941.8 | 1,719.6 | |
Total equity—controlling interest | 248.3 | 354.6 | 502.8 | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity | 248.3 | 354.6 | 502.8 | |
Total liabilities and equity | 2,494.1 | 2,296.4 | 2,222.4 | |
Reportable Legal Entities | Subsidiary Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 0.6 | 3 | 2.4 | 39.8 |
Accounts receivable, net | 107.2 | 172.5 | 77.4 | |
Accounts receivable pledged | 44.4 | 84.5 | 42.2 | |
Inventories | 659.3 | 394.5 | 605.9 | |
Prepaid and other current assets | 79.2 | 44.6 | 43.2 | |
Total current assets | 890.7 | 699.1 | 771.1 | |
Investment in unconsolidated affiliates | 36.6 | 35.2 | 30.9 | |
Property, plant and equipment, net | 458.8 | 464.7 | 398.3 | |
Goodwill | 420.1 | 420.6 | 322.9 | |
Intangible assets, net | 745.7 | 752.3 | 639.5 | |
Other assets | 163.5 | 164.8 | 166.3 | |
Equity investment in subsidiaries | 0 | 0 | 0 | |
Intercompany assets | 0 | 0 | 157.5 | |
Total assets | 2,715.4 | 2,536.7 | 2,486.5 | |
Current liabilities: | ||||
Current portion of debt | 81.7 | 118.4 | 55.7 | |
Accounts payable | 206.1 | 119 | 194.3 | |
Other current liabilities | 228.9 | 278.3 | 117.8 | |
Total current liabilities | 516.7 | 515.7 | 367.8 | |
Long-term debt | 1,438.7 | 1,140.9 | 998.7 | |
Distributions in excess of investment in unconsolidated affiliate | 21.9 | 21.9 | 21.9 | |
Other liabilities | 140.4 | 143.6 | 148.1 | |
Equity investment in subsidiaries | 2.5 | 1.5 | 59.4 | |
Intercompany liabilities | 119.8 | 125 | 0 | |
Total liabilities | 2,240 | 1,948.6 | 1,595.9 | |
Total equity—controlling interest | 475.4 | 588.1 | 890.6 | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity | 475.4 | 588.1 | 890.6 | |
Total liabilities and equity | 2,715.4 | 2,536.7 | 2,486.5 | |
Reportable Legal Entities | Non-Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 22 | 30.9 | 52.1 | 80.7 |
Accounts receivable, net | 56.6 | 53.5 | 51 | |
Accounts receivable pledged | 0 | 0 | 0 | |
Inventories | 86.1 | 86.9 | 90.2 | |
Prepaid and other current assets | 21.3 | 13.1 | 17.1 | |
Total current assets | 186 | 184.4 | 210.4 | |
Investment in unconsolidated affiliates | 0.7 | 0.9 | 0.8 | |
Property, plant and equipment, net | 61 | 66.1 | 65.8 | |
Goodwill | 108 | 110.8 | 130.3 | |
Intangible assets, net | 93.9 | 97.5 | 135.4 | |
Other assets | 29.7 | 25.4 | 9.9 | |
Equity investment in subsidiaries | 0 | 0 | 0 | |
Intercompany assets | 2 | 6.5 | 0 | |
Total assets | 481.3 | 491.6 | 552.6 | |
Current liabilities: | ||||
Current portion of debt | 13.4 | 14.2 | 30.4 | |
Accounts payable | 30.9 | 31.5 | 28.9 | |
Other current liabilities | 23 | 33.5 | 35.3 | |
Total current liabilities | 67.3 | 79.2 | 94.6 | |
Long-term debt | 106.4 | 102.1 | 56.5 | |
Distributions in excess of investment in unconsolidated affiliate | 0 | 0 | 0 | |
Other liabilities | 26.4 | 26.9 | 59.6 | |
Equity investment in subsidiaries | 0 | 0 | 0 | |
Intercompany liabilities | 0 | 0 | 152.9 | |
Total liabilities | 200.1 | 208.2 | 363.6 | |
Total equity—controlling interest | 281.2 | 283.4 | 189 | |
Noncontrolling interest | 0 | 0 | 0 | |
Total equity | 281.2 | 283.4 | 189 | |
Total liabilities and equity | 481.3 | 491.6 | 552.6 | |
Eliminations/ Consolidations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | $ 0 |
Accounts receivable, net | 0 | 0 | 0 | |
Accounts receivable pledged | 0 | 0 | 0 | |
Inventories | 0 | 0 | 0 | |
Prepaid and other current assets | 0 | 0 | 0 | |
Total current assets | 0 | 0 | 0 | |
Investment in unconsolidated affiliates | 0 | 0 | 0 | |
Property, plant and equipment, net | 0 | 0 | 0 | |
Goodwill | 11.6 | 11.6 | 11.6 | |
Intangible assets, net | 7.2 | 7.5 | 8.5 | |
Other assets | 0 | |||
Equity investment in subsidiaries | (746.1) | (860) | (1,125.8) | |
Intercompany assets | (1,738.3) | (1,429.3) | (1,245) | |
Total assets | (2,465.6) | (2,270.2) | (2,350.7) | |
Current liabilities: | ||||
Current portion of debt | (47.7) | (40) | (15) | |
Accounts payable | 0 | 0 | 0 | |
Other current liabilities | 0 | 0 | 0 | |
Total current liabilities | (47.7) | (40) | (15) | |
Long-term debt | (1,543.9) | (1,242.2) | (1,053.8) | |
Distributions in excess of investment in unconsolidated affiliate | 0 | 0 | 0 | |
Other liabilities | 0 | 5 | 5 | |
Equity investment in subsidiaries | (2.5) | (1.5) | (59.4) | |
Intercompany liabilities | (119.8) | (125) | (152.9) | |
Total liabilities | (1,713.9) | (1,403.7) | (1,276.1) | |
Total equity—controlling interest | (756.6) | (871.5) | (1,079.6) | |
Noncontrolling interest | 4.9 | 5 | 5 | |
Total equity | (751.7) | (866.5) | (1,074.6) | |
Total liabilities and equity | $ (2,465.6) | $ (2,270.2) | $ (2,350.7) |