<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------------- --------------
Commission file number 33-47073
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
The Scotts Company
Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the
plan and the address of its principle executive office:
The Scotts Company
14111 Scottslawn Road
Marysville, Ohio 43041
<PAGE> 2
<TABLE>
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
- ------------------------------------------------------------------------------
<CAPTION>
PAGE
------
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Supplemental Schedules:
Line 27a--Schedule of Assets Held for Investment Purposes 13
Line 27d--Schedule of Reportable Transactions 14
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Administrative Committee of
The Scotts Company
Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of The Scotts Company Retirement Savings Plan (the "Plan") as of
December 31, 1998 and 1997, and the changes in net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
June 11, 1999
<PAGE> 4
<TABLE>
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
- ----------------------------------------------------------------------------------------
<CAPTION>
1998 1997
<S> <C> <C>
Net assets available for benefits:
Cash and cash equivalents (see Note 1) $ -- $65,744,292
Investments
Mutual funds, at fair value 105,040,892 4,273,812
Common trust fund, at fair value 7,759,666 --
Equity securities, at fair value 5,107,318 2,424,046
Loans to participants, at cost 2,087,079 634,915
Pooled separate accounts, at fair value -- 1,562,696
Guaranteed investment contracts, at contract value -- 1,244,422
Fixed income securities, at fair value -- 9,239
Employer contribution receivable 959,930 1,104,640
Employee contribution receivable 739,547 --
Accrued interest -- 160,761
------------ -----------
Total net assets available for benefits $121,694,432 $77,158,823
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 2 -
<PAGE> 5
<TABLE>
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------------
<CAPTION>
1998 1997
<S> <C> <C>
Increases:
Interest and dividends $ 6,919,619 $ 2,047,082
Net appreciation in fair value of investments 14,113,156 13,642,244
Employer contributions 7,021,939 1,104,640
Participant contributions 6,747,303 3,225,777
Plan mergers (see Note 8) 16,965,706 --
------------ -----------
Total increases 51,767,723 20,019,743
------------ -----------
Decreases:
Distributions 7,206,957 7,912,454
Administrative expenses 25,157 319,771
------------ -----------
Total decreases 7,232,114 8,232,225
------------ -----------
Net increase in net assets available for benefits 44,535,609 11,787,518
Net assets available for benefits, beginning of year 77,158,823 65,371,305
------------ -----------
Net assets available for benefits, end of year $121,694,432 $77,158,823
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 3 -
<PAGE> 6
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. PLAN DESCRIPTION
The following brief description of The Scotts Company (the Company)
Retirement Savings Plan (the Plan) provides only general information.
Participants should refer to the Plan agreement for a more complete
description of Plan provisions, such as eligibility, vesting, allocation
and funding.
General. The Plan is a contributory defined contribution benefit plan.
Effective January 1, 1998, the Company amended the Plan in its entirety.
Certain restated provisions are described in these notes to the financial
statements. Effective January 1, 1998, Fidelity Institutional Retirement
Services Company (Trustee) was appointed trustee of Plan assets. The
trustee offered participants new investment options. Unless otherwise
directed by participants, investments in the One Group Growth and Income
Fund transferred to the Fidelity Puritan Fund, the Fidelity Blue Chip Fund
and the Spartan U.S. Equity Index Fund at a ratio of 33%, respectively.
Investments in the One Group Bond Fund transferred to the Fidelity Puritan
Fund. Investments in the One Group Cash Management Fund and MassMutual
Guaranteed Investment Contracts transferred to the Fidelity Managed Income
Portfolio. Investments in the MassMutual Core Equity Fund transferred to
the Spartan U.S. Equity Index Fund. Prior to the transfer of assets to the
new investment accounts, a significant portion of existing Plan investments
were liquidated and the proceeds were placed in the One Group Prime Money
Market Fund. Net assets available for benefits at January 1, 1998 reflect
the allocation of participant funds to the new investment options.
Effective January 1, 1998, the Hyponex Corporation Profit Sharing Plan and
the Scotts-Sierra Horticultural Products Company Salaried Employees Savings
and Investment Plan were merged into the Scotts Company Profit Sharing and
Savings Plan. The Scotts Company Profit Sharing and Savings Plan was then
renamed The Scotts Company Retirement Savings Plan. Effective July 1, 1998,
the Earthgro, Inc. 401(k) Plan merged with the Plan.
Eligibility. Regular domestic employees of the Company are eligible to
participate in the Plan on the first day of the month immediately following
or coincident with their date of employment.
Employee contributions. The Plan provides for participant tax-deferred
savings contributions up to 15% of eligible wages, not to exceed the annual
Internal Revenue Service (IRS) maximum deferral amount.
Employer contributions. The Plan provides a base retirement contribution
for all eligible employees. Generally, eligible employees receive an
allocation equal to 2% of monthly compensation. This percentage increases
to 4% when employees year-to-date compensation exceeds 50% of the social
security taxable wage base. The Company also matches participant
contributions dollar for dollar for the first 3% of pay, and matches $0.50
on the dollar for the next 2% of participant contributions. Additionally,
as a result of Plan mergers (see Note 8), the Company remits transition
contributions to certain participants.
Vesting. Participants are immediately vested in their contributions plus
actual earnings thereon. Matching and transition contributions made by the
Company vest immediately. However, base contributions made by the Company
vest after three years of service, or immediately upon death or disability.
- 4 -
<PAGE> 7
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
Forfeitures. The non-vested portions of participant account balances are
forfeitable and used to reduce employer contributions to the Plan. Plan
forfeitures totaled $38,620 for the year ended December 31, 1998.
Investments. Participants can change their investment options on a daily
basis. For the year ended December 31, 1998, the following investment
options were available to participants:
o FIDELITY PURITAN FUND - assets are invested in high-yielding U.S. and
foreign securities, common and preferred stocks, and bonds of any
maturity.
o FIDELITY CONTRAFUND - assets are primarily invested in U.S. and
foreign common stocks that are believed to be undervalued.
o FIDELITY BLUE CHIP FUND - assets are primarily invested in common
stock of established and/or rapidly growing companies. Approximately
65% of this fund's total assets invest in common stock of blue chip
companies.
o FIDELITY WORLDWIDE FUND - assets are invested in stocks and other
securities of companies located around the world.
o FIDELITY FREEDOM INCOME FUND - assets are primarily invested in bond
and money market funds. A smaller percentage of assets are invested in
equity mutual funds.
o FIDELITY FREEDOM 2000 FUND - assets are invested in a combination of
equity, fixed income and money market mutual funds of Fidelity
Investments. The asset mix becomes more conservative as year 2000
approaches.
o FIDELITY FREEDOM 2010 FUND - assets are invested in a combination of
equity, fixed income and money market mutual funds of Fidelity
Investments. The asset mix becomes more conservative as year 2010
approaches.
o FIDELITY FREEDOM 2020 FUND - assets are invested in a combination of
equity, fixed income and money market mutual funds of Fidelity
Investments. The asset mix becomes more conservative as year 2020
approaches.
o FIDELITY FREEDOM 2030 FUND - assets are invested in a combination of
equity, fixed income and money market mutual funds. The asset mix
becomes more conservative as year 2030 approaches.
o FIDELITY MANAGED INCOME PORTFOLIO - assets are invested in investment
contracts of major insurance companies and other approved financial
institutions, and in other fixed income securities. A small percentage
of assets are invested in money market funds to provide daily
liquidity.
o SPARTAN U.S. EQUITY INDEX FUND - assets are invested in stocks and in
approximately the same proportions as the Standard & Poor's 500 Stock
Index.
o BARON ASSET FUND - assets are invested in stocks with prices perceived
as low relative to the related companies' profits, assets, and other
value measures.
o THE SCOTTS COMPANY STOCK - assets consist entirely of The Scotts
Company common stock and cash equivalents.
- 5 -
<PAGE> 8
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
For the year ended December 31, 1997, the following investment options were
available to participants:
o THE ONE GROUP GROWTH AND INCOME FUND - assets are invested in Company
and other common stock, bonds, notes, preferred stock, real estate,
mortgages secured by real estate, interests in commingled trusts and
cash equivalents.
o THE ONE GROUP BOND FUND - assets are invested in certificates of
deposit and interest-bearing savings accounts with recognized
financial institutions, U.S treasury securities, corporate
obligations, prime rate commercial paper and cash equivalents.
o THE ONE GROUP CASH MANAGEMENT FUND - assets are invested in short-term
money market investments.
o THE SCOTTS COMPANY STOCK - assets consisted entirely of The Scotts
Company common stock and cash equivalents.
Additionally, the Plan also had the following two funds which were invested
in by employees of Scotts Miracle-Gro Products, Inc., a wholly owned
subsidiary of the Company:
o MASSMUTUAL GUARANTEED INVESTMENT CONTRACTS - assets consisted entirely
of an insurance contract, which provided a rate of return of 6%.
o MASSMUTUAL CORE EQUITY FUND - assets are primarily invested in common
stock.
Benefit payments. Participants are eligible to receive benefit payments
upon termination, retirement, death or disability. Also, under certain
circumstances the Plan provides for hardship and in-service withdrawals for
active employees.
Participant loans. Loans are available to participants from their
individual accounts subject to the terms of the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting. The financial statements of the Plan have been
prepared on the accrual basis of accounting in accordance with generally
accepted accounting principles.
Investments. Excluding participant loans and guaranteed investment
contracts, investments are stated at quoted market prices. Participants'
loans are valued at cost, which approximates fair value. Guaranteed
investment contracts of MassMutual are stated at contract value, which
approximates fair value. Contract value represents contributions made under
the contract, plus earnings, less withdrawals and administrative expenses.
Contracts provide for a specific rate of return on principal. This rate of
return is adjusted annually based on the actual return of the asset pool.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation in the fair value of its investments, which
consists of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments. Gains and losses on sales of
investments are based on the average cost method.
Administrative expenses. The Company pays for all administrative fees
except those that are participant specific, such as loan establishment and
maintenance fees.
- 6 -
<PAGE> 9
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
Payments of benefits. Benefits are recorded when paid.
Use of estimates. The preparation of the Plan's financial statements in
conformity with generally accepted accounting principles requires the Plan
to make estimates and assumptions that affect the reported amounts of net
assets available for benefits at the date of the financial statements,
changes in net assets available for benefits during the reporting period
and, when applicable, disclosures of contingent assets and liabilities at
the date of the financial statements. Actual results could differ from
those estimates.
Risks and uncertainties. The Plan provides for various investment options,
which are subject to various risks, such as interest rate, market, and
credit risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values
of investment securities will occur in the near term and that such changes
could materially affect participant account balances and the amounts
reported in the statement of net assets available for benefits.
3. INVESTMENTS IN THE SCOTTS COMPANY
At December 31, 1998 and 1997, the Plan had investments in the Company's
common stock, as follows:
<TABLE>
<CAPTION>
1998 1997
----------------------- -----------------------
FAIR MARKET FAIR MARKET
SHARES VALUE SHARES VALUE
------- ----------- ------ -----------
<S> <C> <C> <C> <C>
The Scotts Company Stock 130,130 5,002,197 80,130 2,423,933
------- --------- ------ ---------
</TABLE>
The Company's common stock is valued at quoted market prices, which were
$38.44 and $30.25 per share at December 31, 1998 and 1997, respectively.
- 7 -
<PAGE> 10
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
4. STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND
INFORMATION
Changes in net assets available for benefits for the year ended December
31, 1998, summarized by investment fund, is as follows:
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY FIDELITY
FIDELITY FIDELITY BLUE FIDELITY FREEDOM FREEDOM FREEDOM
PURITAN CONTRAFUND CHIP WORLDWIDE INCOME 2000 2010
----------- ---------- ----------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Increases:
Interest and dividends $ 4,182,811 $ 321,667 $ 1,113,073 $ 59,082 $ 47,227 $ 118,379 $ 38,132
Net appreciation (depreciation) in
fair value of investments 1,968,456 253,044 5,752,529 (141,614) 30,782 111,997 (3,811)
Plan mergers 14,241,813 -- 1,951,894 64,399 19,169 -- --
Employer contributions 690,427 782,056 1,421,626 256,559 50,042 269,934 345,428
Participant contributions 611,035 803,340 1,444,092 303,777 53,827 196,788 283,019
----------- ---------- ----------- ---------- ---------- ---------- --------
Total increases 21,694,542 2,160,107 11,683,214 542,203 201,047 697,098 662,768
----------- ---------- ----------- ---------- ---------- ---------- --------
Decreases:
Distributions 3,170,034 34,688 1,262,484 11,517 161,621 45,882 11,272
Administrative expenses 9,892 933 3,837 417 158 267 450
----------- ---------- ----------- ---------- ---------- ---------- --------
Total decreases 3,179,926 35,621 1,266,321 11,934 161,779 46,149 11,722
----------- ---------- ----------- ---------- ---------- ---------- --------
Participant exchanges among funds (9,495,417) 2,355,695 (1,782,133) 1,419,127 1,129,680 2,405,635 126,849
Net increase in net assets
available for benefits 9,019,199 4,480,181 8,634,760 1,949,396 1,168,948 3,056,584 777,895
----------- ---------- ----------- ---------- ---------- ---------- --------
Net assets available for benefits,
beginning of year 29,047,265 146,683 18,467,010 49,168 9,378 47,575 69,365
----------- ---------- ----------- ---------- ---------- ---------- --------
Net assets available for benefits,
end of year $38,066,464 $4,626,864 $27,101,770 $1,998,564 $1,178,326 $3,104,159 $847,260
=========== ========== =========== ========== ========== ========== ========
</TABLE>
CONTINUED
- 8 -
<PAGE> 11
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY
FIDELITY FIDELITY MANAGED SPARTAN SCOTTS
FREEDOM FREEDOM INCOME US EQUITY BARON COMPANY LOANS TO
2020 2030 PORTFOLIO INDEX ASSET STOCK PARTICIPANTS TOTAL
---------- -------- ---------- ----------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increases:
Interest and dividends $ 35,545 $ 11,395 $ 381,447 $ 519,408 $ 4,103 $ 49 $ 87,301 $ 6,919,619
Net appreciation
(depreciation) in
fair value of investments 72,815 17,646 -- 4,672,961 232,108 1,146,243 -- 14,113,156
Plan mergers -- -- 512,330 154,783 -- -- 21,318 16,965,706
Employer contributions 352,199 147,649 659,321 782,770 947,349 316,579 -- 7,021,939
Participant contributions 419,890 137,976 439,629 854,449 945,986 253,495 -- 6,747,303
---------- -------- ---------- ----------- ---------- ---------- ---------- ------------
Total increases 880,449 314,666 1,992,727 6,984,371 2,129,546 1,716,366 108,619 51,767,723
---------- -------- ---------- ----------- ---------- ---------- ---------- ------------
Decreases:
Distributions 15,951 23,793 1,268,991 1,029,622 27,109 117,231 26,762 7,206,957
Administrative expenses 670 518 3,106 2,848 995 1,066 -- 25,157
---------- -------- ---------- ----------- ---------- ---------- ---------- ------------
Total decreases 16,621 24,311 1,272,097 1,032,470 28,104 118,297 26,762 7,232,114
---------- -------- ---------- ----------- ---------- ---------- ---------- ------------
Participant exchanges among
funds 349,546 86,679 1,318,734 (3,334,050) 3,014,075 1,035,273 1,370,307 --
Net increase in net assets
available for benefits 1,213,374 377,034 2,039,364 2,617,851 5,115,517 2,633,342 1,452,164 44,535,609
---------- -------- ---------- ----------- ---------- ---------- ---------- ------------
Net assets available for
benefits, beginning of
year 77,851 32,830 5,854,480 19,985,975 177,743 2,558,585 634,915 77,158,823
---------- -------- ---------- ----------- ---------- ---------- ---------- ------------
Net assets available for
benefits, end of year $1,291,225 $409,864 $7,893,844 $22,603,826 $5,293,260 $5,191,927 $2,087,079 $121,694,432
========== ======== ========== =========== ========== ========== ========== ============
</TABLE>
- 9 -
<PAGE> 12
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
Changes in net assets available for benefits for the year ended December
31, 1997, summarized by investment fund, is as follows:
<TABLE>
<CAPTION>
THE ONE THE ONE MASSMUTUAL
GROUP GROWTH THE GROUP CASH SCOTTS MASSMUTUAL GUARANTEED
AND INCOME ONE GROUP MANAGEMENT STOCK CORE EQUITY INVESTMENT LOANS TO
FUND BOND FUND FUND FUND FUND CONTRACTS PARTICIPANTS OTHER TOTAL
------------ ----------- ---------- ---------- ---------- ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Increases:
Interest and
dividends $ 1,258,630 $ 637,675 $ 5,915 $ 3,163 $ 3,925 $ 83,721 $ 54,053 $ -- $ 2,047,082
Net appreciation
in fair value
of investments 11,954,583 13,485 250,980 1,099,960 323,236 -- -- -- 13,642,244
Employer
contributions -- -- -- -- 1,104,640 1,104,640
Employee
contributions 2,183,725 361,285 228,584 204,949 124,624 122,610 -- -- 3,225,777
----------- ----------- ---------- ---------- ---------- ---------- -------- ---------- -----------
Total increases 15,396,938 1,012,445 485,479 1,308,072 451,785 206,331 54,053 1,104,640 20,019,743
----------- ----------- ---------- ---------- ---------- ---------- -------- ---------- -----------
Decreases:
Distributions 5,379,651 1,094,423 950,877 203,414 23,158 198,564 62,367 -- 7,912,454
Administrative
expenses 217,989 52,402 15,049 5,808 7,915 7,711 12,897 -- 319,771
----------- ----------- ---------- ---------- ---------- ---------- -------- ---------- -----------
Total decreases 5,597,640 1,146,825 965,926 209,222 31,073 206,275 75,264 -- 8,232,225
----------- ----------- ---------- ---------- ---------- ---------- -------- ---------- -----------
Participant exchanges
among funds (3,287,491) 2,329,290 1,044,288 (141,849) 131,370 (125,984) 50,376 -- --
Net increase
(decrease) in net
assets available
for benefits 6,511,807 2,194,910 563,841 957,001 552,082 (125,928) 29,165 1,104,640 11,787,518
Net assets available
for benefits,
beginning of year 48,806,970 8,249,217 3,776,362 1,552,042 1,010,614 1,370,350 605,750 -- 65,371,305
----------- ----------- ---------- ---------- ---------- ---------- -------- ---------- -----------
Net assets available
for benefits, end
of year $55,318,777 $10,444,127 $4,340,203 $2,509,043 $1,562,696 $1,244,422 $634,915 $1,104,640 $77,158,823
=========== =========== ========== ========== ========== ========== ======== ========== ===========
</TABLE>
- 10 -
<PAGE> 13
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
5. INVESTMENTS THAT REPRESENT 5% OR MORE OF NET ASSETS AVAILABLE FOR BENEFITS
The following investments represent 5% or more of net assets available for
benefits as of December 31, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
FAIR VALUE FAIR VALUE
----------- ----------
<S> <C> <C>
Fidelity Puritan Fund $37,906,149
Fidelity Blue Chip Fund 26,741,728
Fidelity Managed Income Portfolio 7,759,666
Spartan U.S. Equity Index Fund 22,411,970
One Group Prime Money Market Fund -- 65,388,221
Northern Trust Company Short-term
Extendable Portfolio Fund 4,273,812
</TABLE>
6. TAX STATUS
The Plan obtained a determination letter on January 28, 1997, in which the
Internal Revenue Service stated that the Plan was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan has been
amended since receiving the determination letter; however, the plan
administrator and the Plan's legal counsel believe that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code, and is therefore not subject to
income taxes.
7. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan or its contributions subject to
the provisions of the Employee Retirement Income Security Act of 1974. In
the event the Plan is terminated, participants will become fully vested in
their accounts.
8. PLAN MERGERS
Effective January 1, 1998, the Hyponex Corporation Profit Sharing Plan and
the Scotts-Sierra Horticultural Products Company Salaried Employees Savings
and Investment Plan merged into the Plan. Net assets available for benefits
of approximately $16,511,000 were transferred to the Plan. Effective July
1, 1998, the Earthgro, Inc. 401(k) Plan merged into the Plan. Net assets
available for benefits of approximately $454,000 were transferred to the
Plan. Immediately after the mergers, each participant in the Plan as merged
had an account balance equal to the sum of the account balances the
participant had in the above mentioned plans immediately prior to the
mergers. The mergers had no effect on participants' rights under the Plan.
- 11 -
<PAGE> 14
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
9. BENEFITS PAYABLE
There were no differences in net assets available for benefits per the
financial statements and the Form 5500 at December 31, 1998. Benefits of
$583,015 were payable to Plan participants at December 31, 1997.
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1998
------------
<S> <C>
Benefits paid to participants per
the financial statements $ 7,206,957
Amounts allocated to withdrawing
participants (583,015)
===========
Benefits paid to participants per
the Form 5500 $ 6,623,942
===========
</TABLE>
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
------------
<S> <C>
Net assets available for benefits per
the financial statements $77,158,823
Amounts allocated to withdrawing
participants (583,015)
===========
Net assets available for benefits
per Form 5500 $76,575,808
===========
</TABLE>
- 12 -
<PAGE> 15
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
LINE 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PAR CURRENT
DESCRIPTION VALUE COST VALUE
- ------------------------------------ ---------- ------------ ------------
<S> <C> <C> <C>
Fidelity Puritan Fund 1,888,311 36,599,702 37,906,149
Fidelity Contrafund 77,937 4,135,754 4,419,594
Fidelity Blue Chip Fund 530,904 21,578,836 26,741,728
Fidelity Worldwide Fund 117,266 2,056,585 1,938,066
Fidelity Freedom Income Fund 104,339 1,136,035 1,164,807
Fidelity Freedom 2000 Fund 247,266 2,933,803 3,046,198
Fidelity Freedom 2010 Fund 58,310 734,190 766,875
Fidelity Freedom 2020 Fund 86,049 1,123,184 1,195,758
Fidelity Freedom 2030 Fund 27,000 350,488 374,802
Fidelity Managed Income Portfolio 7,810,258 7,759,666 7,759,666
Spartan US Equity Index Fund 509,915 18,247,943 22,411,970
Baron Asset Fund 100,578 4,777,627 5,074,945
The Scotts Company Stock 130,130 4,104,682 5,002,197
Interest bearing cash deposits 105,121 105,121
Loans to participants (7.00% to
10.00%), due at various maturity
dates through 2003 -- 2,087,079
------------ ------------
$105,643,616 $119,994,955
============ ============
</TABLE>
- 13 -
<PAGE> 16
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
LINE 27d--SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSETS AT
NUMBER OF PURCHASE SELLING COST OF TRANSACTION NET
DESCRIPTION OF ASSETS TRANSACTIONS PRICE PRICE ASSET DATE GAIN (LOSS)
- --------------------------------- ------------ ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Series of Transactions:
PURCHASES
Baron Asset Fund 185 $ 5,846,603 $ -- $ -- $ 5,846,603 $ --
Fidelity Puritan Fund 203 49,990,919 -- -- 49,990,919 --
Fidelity Contrafund 178 4,925,777 -- -- 4,925,777 --
Fidelity Blue Chip Fund 202 27,954,565 -- -- 27,954,565 --
Fidelity Freedom 2000 92 4,005,996 -- -- 4,005,996 --
Fidelity Managed Income Portfolio 178 15,287,528 -- -- 15,287,528 --
Spartan US Equity Index Fund 188 24,279,725 -- -- 24,279,725 --
The Scotts Company Stock 173 3,502,352 -- -- 3,502,352 --
SALES
Baron Asset Fund 147 -- 995,483 1,074,739 995,483 (79,256)
Fidelity Puritan Fund 187 -- 14,060,980 13,459,084 14,060,980 601,896
Fidelity Contrafund 127 -- 752,801 788,005 752,801 (35,204)
Fidelity Blue Chip Fund 167 -- 6,954,863 6,349,480 6,954,863 605,383
Fidelity Freedom 2000 57 -- 1,069,208 1,064,461 1,069,208 4,747
Fidelity Managed Income Portfolio 168 -- 7,477,269 7,477,269 7,477,269 --
Spartan US Equity Index Fund 157 -- 6,536,839 6,024,813 6,536,839 512,026
The Scotts Company Stock 126 -- 2,045,847 1,609,355 2,045,847 436,492
Single transactions:
SALES
One Group Prime Money Market Fund 65,388,221 65,388,221 65,388,221 --
Northern Trust Company Short -
Term Extendable Portfolio Fund 4,273,812 4,038,586 4,273,812 235,226
</TABLE>
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<PAGE> 17
THE SCOTTS COMPANY
RETIREMENT SAVINGS PLAN
ANNUAL REPORT ON FORM 11-K
For fiscal year ended December 31, 1998
INDEX TO THE EXHIBITS
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
------ ----------- ------
<S> <C> <C>
23 Consent of Independent Public Accountants 16
</TABLE>
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<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-47073) of The Scotts Company of our report dated
June 11, 1999 relating to the financial statements of The Scotts Company
Retirement Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
June 29, 1999
