UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 30, 2004
(August 13, 2004)
THE SCOTTS COMPANY
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(Exact name of registrant as specified in its charter)
Ohio 1-13292 31-1414921
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
14111 Scottslawn Road, Marysville, Ohio 43041
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(Address of principal executive offices) (Zip Code)
(937) 644-0011
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
__ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
__ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
__ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
__ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act(17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01. Entry into a Material Definitive Agreement.
As of August 13, 2004, The Scotts Company (the "Registrant") entered
into a First Amendment (the "First Amendment") in respect of the Second Amended
and Restated Credit Agreement, dated as of October 22, 2003 (the "Credit
Agreement"), among the Registrant, as Borrower; Hyponex Corporation, Miracle
Garden Care Limited, OM Scott International Investments Ltd., Scotts Australia
Pty. Ltd, Scotts Canada Ltd., Scotts Holdings Limited, Scotts Manufacturing
Company, Scotts-Sierra Horticultural Products Company, Scotts-Sierra
Investments, Inc., Scotts Temecula Operations, LLC, Scotts Treasury EEIG and The
Scotts Company (UK) Ltd., subsidiaries of the Registrant who are also borrowers
under the Credit Agreement (the "Subsidiary Borrowers"); the banks and other
financial institutions and entities then party to the Credit Agreement (the
"Lenders"); JPMorgan Chase Bank, as Administrative Agent; Citicorp North
America, Inc., as Syndication Agent; and Bank of America, N.A. and Bank One, NA,
as Co-Documentation Agents. Pursuant to the First Amendment, on August 13, 2004,
the term loans in the principal amount of $399 million then outstanding under
the Credit Agreement were prepaid in full with the proceeds of new term loans,
consisting of two tranches (Tranche A Term Loans and Tranche B Term Loans) in
the aggregate principal amount of $400 million.
The aggregate principal amount of the Tranche A Term Loans as of August
13, 2004 was $250 million, which amount is to be repaid in consecutive quarterly
installments commencing on September 30, 2004, and ending June 30, 2009,
followed by a balloon payment on September 30, 2009 in the following amounts:
(a) for the installments due on September 30, 2004 through and including June
30, 2007 - $625,000; (b) for the installments due on September 30, 2007 through
and including June 30, 2008 - $9,375,000; (c) for the installments due on
September 30, 2008 through and including June 30, 2009 - $13,750,000; and (d)
for the balloon payment due on September 30, 2009 - $150 million. The Tranche A
Term Loans have a variable interest rate which is based on a Leverage Ratio
pricing grid margin over LIBOR and was 2.875% at August 13, 2004.
The aggregate principal amount of the Tranche B Term Loans as of August
13, 2004 was $150 million, which amount is to be repaid in consecutive quarterly
installments commencing on September 30, 2004 and ending June 30, 2010, followed
by a balloon payment on September 30, 2010, in the following amounts: (a) for
the installments due on September 30, 2004 through and including June 30, 2010 -
$375,000; and (b) for the balloon payment due on September 30, 2010 - $141
million. The Tranche B Term Loans have a variable interest rate which is based
on a Leverage Ratio pricing grid over LIBOR and was 3.125% at August 13, 2004.
The First Amendment also provides the Registrant with the ability to
request, at any time prior to September 30, 2010, up to three additional term
loan facilities (each, an "Incremental Term Facility" and the loans thereunder,
"Incremental Term Loans"), in each separate case in a minimum aggregate
principal amount of $50 million with the aggregate amount of the Incremental
Term Loans not to exceed $150 million. The Incremental Term Loans may be used
for the purpose of providing all or a part of the consideration for an
acquisition by the Registrant or one of its subsidiaries of all or substantially
all the assets of, or other equity interests in, a
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person or division or line of business of a person or other significant assets
of a person (other than inventory, leases, materials and equipment and other
assets in the ordinary course of business), as permitted under the terms of the
Credit Agreement as amended by the First Amendment (a "Permitted Acquisition").
The Registrant may request an Incremental Term Loan if after giving effect to
and including the aggregate principal amount of the Incremental Term Loans and
giving effect to any Permitted Acquisition funded by Incremental Term Loans, the
Senior Secured Leverage Ratio (calculated in accordance with the terms of the
First Amendment) as of the last day of the most recently completed fiscal
quarter of the Registrant would have been less than 2.50 to 1.00 on a pro forma
basis. The Incremental Term Loans, if any, will not have a final maturity
earlier than September 30, 2010. Except as described above, the Incremental Term
Loans will be treated substantially the same as the Tranche B Term Loans
although the Incremental Term Loans may be priced differently than the Tranche B
Term Loans. The Incremental Term Loans, if any, will rank pari passu in right of
payment and of security with the Tranche A Term Loans and the Tranche B Term
Loans.
The financial covenants under the Credit Agreement, as amended by the
First Amendment, continue to consist of a minimum interest coverage ratio and a
maximum leverage ratio along with negative covenants addressing limitations on
liens, contingent obligations, fundamental changes, capital expenditures,
acquisitions, investments, loans and advances, indebtedness, restrictions on
subsidiary distributions, transactions with affiliates and officers, sales of
assets, sale and leaseback transactions, changing the Registrant's fiscal year
end, modification of specified debt instruments, negative pledge clauses,
entering into new lines of business, restricted payments and redemption of
specified indebtedness. Collateral for the borrowings under the Credit
Agreement, as amended by the First Amendment, continues to consist of pledges by
the Registrant and all of its domestic subsidiaries of substantially all of
their personal, real and intellectual property. The pledge by the Registrant and
its subsidiaries of a majority of the stock in foreign subsidiaries that borrow
under the Credit Agreement, as amended by the First Amendment, also continues.
The obligations of the Registrant under the Credit Agreement, as amended, may
be accelerated upon the occurrence of specified events.
A copy of the First Amendment is being filed as Exhibit 4 to this
Current Report on Form 8-K. The foregoing summary of the First Amendment is
qualified in its entirety by reference to Exhibit 4.
Section 2 - Financial Information
Item 2.01. Completion of Acquisition or Disposition of Assets.
The discussion of the First Amendment entered into by the Registrant
as of August 13, 2004 is incorporated herein by reference from "Item 1.01.
Entry into a Material Definitive Agreement" of this Current Report on Form 8-K.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The discussion of the First Amendment entered into by the Registrant
as of August 13, 2004 is incorporated herein by reference from "Item 1.01.
Entry into a Material Definitive Agreement" of this Current Report on Form 8-K.
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Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired:
Not applicable.
(b) Pro forma financial information:
Not applicable.
(c) Exhibits:
Exhibit No. Description
4 First Amendment, dated as of
August 13, 2004, in respect of
the Second Amended and Restated
Credit Agreement, dated as of
October 22, 2003 (the "Credit
Agreement"), among The Scotts
Company, as Borrower; certain
subsidiaries of The Scotts
Company who are also borrowers
from time to time under the
Credit Agreement, as Subsidiary
Borrowers; the banks and other
financial institutions and
entities from time to time
parties to the Credit
Agreement, as Lenders; JPMorgan
Chase Bank, as Administrative
Agent; Citicorp North America,
Inc., as Syndication Agent; and
Bank of America, N.A. and Bank
One, NA, as Co-Documentation
Agents
[Remainder of page intentionally left blank;
signature on following page.]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE SCOTTS COMPANY
Dated: August 30, 2004 By: /s/ Christopher L. Nagel
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Printed Name: Christopher L. Nagel
Title: Executive Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
Current Report on Form 8-K
Dated August 30, 2004
The Scotts Company
Exhibit No. Description
4 First Amendment, dated as of August 13, 2004, in
respect of the Second Amended and Restated Credit
Agreement, dated as of October 22, 2003 (the
"Credit Agreement"), among The Scotts Company, as
Borrower; certain subsidiaries of The Scotts
Company who are also borrowers from time to time
under the Credit Agreement, as Subsidiary
Borrowers; the banks and other financial
institutions and entities from time to time
parties to the Credit Agreement, as Lenders;
JPMorgan Chase Bank, as Administrative Agent;
Citicorp North America, Inc., as Syndication
Agent; and Bank of America, N.A. and Bank One,
NA, as Co-Documentation Agents
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