<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, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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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 principal executive office:
The Scotts Company
41 South High Street
Suite 3500
Columbus, Ohio 43215
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 1999 AND 1998
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Page
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits for
the Years Ended December 31, 1999 and 1998 3
Notes to Financial Statements 4
Supplemental Schedule:
Line 27a--Schedule of Assets Held for Investment Purposes as of
December 31, 1999 10
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and 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,
1999 and 1998, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States. 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 auditing standards generally accepted in the
United States 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 schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers
Columbus, Ohio
June 8, 2000
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Net assets available for benefits:
Cash and cash equivalents $ 77,808 $ 102,679
Investments
Mutual funds, at fair value 120,732,789 105,040,892
Common trust fund, at fair value 12,858,898 7,759,666
The Scotts Company Common Shares, at fair value 7,401,532 5,004,639
Loans to participants, at cost 2,415,972 2,087,079
Employer contribution receivable 1,307,312 959,930
Employee contribution receivable 940,022 739,547
Receivable from broker 63,857 --
------------ ------------
Total net assets available for benefits $145,798,190 $121,694,432
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Increases:
Interest and dividends $ 7,194,049 $ 6,919,619
Net appreciation in fair value of investments 10,479,748 14,113,156
Employer contributions 8,572,712 7,021,939
Participant contributions 9,377,515 6,747,303
Plan mergers (see Note 7) -- 16,965,706
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Total increases 35,624,024 51,767,723
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Decreases:
Benefits paid to participants 11,503,900 7,206,957
Administrative expenses 16,366 25,157
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Total decreases 11,520,266 7,232,114
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Net increase in net assets available for benefits 24,103,758 44,535,609
Net assets available for benefits, beginning of year 121,694,432 77,158,823
------------ ------------
Net assets available for benefits, end of year $145,798,190 $121,694,432
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 6
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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1. PLAN DESCRIPTION
The plan is a contributory defined contribution benefit plan sponsored
by The Scotts Company. 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.
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. Regular employees of Scotts
Lawn Service, a subsidiary of the Company, are eligible to receive base
retirement contributions on the first day of the month after completing
one year of eligibility service and are eligible to make contributions
and receive matching contributions on the first day of the month after
completing 90 days of service. Temporary employees are eligible to
participate on the January 1 or July 1 subsequent to completing one
year of eligibility service and attaining age 21.
EMPLOYEE CONTRIBUTIONS
The Plan provides for participants to make pre-tax or after-tax
contributions up to 15% of eligible wages, not to exceed the annual
Internal Revenue Service (IRS) maximum deferral amount.
EMPLOYER CONTRIBUTION
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, the
Company remits transition contributions to certain participants who
were also participants of certain retirement plans previously sponsored
by The Scotts Company or its subsidiaries.
VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon. Matching contributions made by the Company vest
immediately. However, base and transition contributions made by the
Company vest after three years of service, or immediately upon death or
disability.
FORFEITURES
The nonvested portions of participant account balances are forfeitable
and used to reduce employer contributions to the Plan. Plan forfeitures
totaled $74,734 for the year ended December 31, 1999.
INVESTMENTS
All investments are participant-directed. Participants can change their
investment options on a daily basis. The following investment options
are 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.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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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 PIMCO TOTAL RETURN FUND--assets are invested in various types
of bonds, including U.S. government, corporate, mortgage, and
foreign bonds with an average portfolio duration of three to
six years (approximately equal to an average maturity of five
to twelve years).
o THE SCOTTS COMPANY SHARES--assets consist entirely of The
Scotts Company common shares and cash equivalents.
BENEFIT PAYMENTS
Participants are eligible to receive benefit payments upon termination,
retirement, death or disability equal to the vested balance of the
participant's account as of the business day the trustee processes the
distribution. The Plan also provides for hardship and in-service
withdrawals for active employees under certain circumstances.
PARTICIPANT LOANS
Loans are available to participants from their individual accounts
subject to the terms of the Plan.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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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, investments are stated at quoted market
prices. Participants' loans are valued at cost, which approximates fair
value.
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.
Net appreciation in fair value for each significant class of
investments for the years ended December 31, 1999 and 1998 is as
follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Mutual funds $ 9,949,037 $12,966,913
The Scotts Company Common Shares 530,711 1,146,243
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Total net appreciation $10,479,748 $14,113,156
=========== ===========
</TABLE>
ADMINISTRATIVE EXPENSES
The Company pays for all administrative fees except those that are
participant specific, such as loan establishment and maintenance fees.
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.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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RECLASSIFICATIONS
Certain reclassifications have been made to the prior year's financial
statements to conform to current year classifications.
3. INVESTMENTS IN THE SCOTTS COMPANY
At December 31, 1999 and 1998, the Plan had investments in the
Company's common shares, as follows:
<TABLE>
<CAPTION>
1999 1998
---------------------- ----------------------
FAIR MARKET FAIR MARKET
SHARES VALUE SHARES VALUE
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
The Scotts Company
Common Shares 183,889 $7,401,532 130,130 $5,002,197
======= ========== ======= ==========
</TABLE>
The Company's common shares are valued at quoted market prices, which
were $40.25 and $38.44 per share at December 31, 1999 and 1998,
respectively.
4. 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, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
FAIR VALUE FAIR VALUE
----------- -----------
<S> <C> <C>
Fidelity Puritan Fund $33,153,324 $37,906,149
Fidelity Blue Chip Fund 32,882,751 26,741,728
Fidelity Managed Income Portfolio 12,858,898 7,759,666
Spartan U.S. Equity Index Fund 25,671,384 22,411,970
The Scotts Company Common Shares 7,401,532
Fidelity Contrafund 9,000,656
</TABLE>
5. 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.
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<PAGE> 10
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
6. 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.
7. 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.
8. RECONCILIATION TO FORM 5500
There were no differences in net assets available for benefits per the
financial statements and the Form 5500 at December 31, 1998.
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,
1999
------------
<S> <C>
Net assets available for benefits per
the financial statements $145,798,190
Amounts allocated to withdrawing
participants (337,505)
------------
Net assets available for benefits
per Form 5500 $145,460,685
============
</TABLE>
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
-----------
<S> <C>
Benefits paid to participants per
the financial statements $11,503,900
Amounts allocated to withdrawing
participants 337,505
-----------
Benefits paid to participants per
the Form 5500 $11,841,405
===========
</TABLE>
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
LINE 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PAR CURRENT
DESCRIPTION VALUE VALUE
-------------------------------------------------- ---------- ------------
<S> <C> <C>
Fidelity Puritan Fund 1,742,161 33,153,324
Fidelity Contrafund 149,961 9,000,656
Fidelity Blue Chip Fund 547,043 32,882,751
Fidelity Worldwide Fund 151,677 3,018,371
Fidelity Freedom Income Fund 84,727 959,959
Fidelity Freedom 2000 Fund 249,440 3,240,220
Fidelity Freedom 2010 Fund 130,793 1,944,897
Fidelity Freedom 2020 Fund 161,050 2,637,992
Fidelity Freedom 2030 Fund 58,358 985,088
Fidelity Managed Income Portfolio 12,858,898 12,858,898
Spartan US Equity Index Fund 492,827 25,671,384
Baron Asset Fund 115,925 6,812,894
The Scotts Company Common Shares 183,889 7,401,532
PIMCO Total Return 42,955 425,252
Loans to participants (7.00% to 10.00%), due at
various maturity dates through 2003 2,415,972
------------
$143,409,190
============
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned,
thereunto duly authorized.
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
Dated: June 28, 2000 By: /s/ Hadia Lefavre
--------------------------------------
Title: Senior Vice President, Human Resources
Worldwide, The Scotts Company
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THE SCOTTS COMPANY
RETIREMENT SAVINGS PLAN
ANNUAL REPORT ON FORM 11-K
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For fiscal year ended December 31, 1999
INDEX TO EXHIBITS
Exhibit Page
Number Description Number
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23 Consent of Independent Accountants 12
