Marysville, Ohio
January 23, 2003

Company-wide sales up 12%
North American consumer purchases rise 10%
Outlook indicates shift of net income into second half of fiscal 2003

The Scotts Company (NYSE: SMG), the global leader in the consumer lawn and garden industry, reported that its first quarter net sales increased 12 percent from the same period last year, and that its adjusted quarterly loss, excluding restructuring and other charges, improved by 18 cents to $1.42 per share, or $42.9 million, compared with a loss of $1.60 per share, or $46.0 million, for the same quarter last year. Including restructuring and other charges, the Company reported a quarterly loss of $46.8 million, or $1.55 per share compared with a loss of $65.4 million, or $2.27 per share, for the same period in 2002.

During the quarter ended December 28, 2002, the Company reported restructuring and other charges of $3.9 million after tax related to its European growth and integration efforts as well as North American supply chain improvements. Results from fiscal 2002 included restructuring and other charges of $0.9 million and an $18.5 million impairment charge related to certain intangible assets, all net of tax.

Earnings before interest, taxes, depreciation and amortization (EBITDA), excluding restructuring and other charges, was a loss of $41.0 million in the quarter compared to a loss of $45.4 in the same period last year. Including those items, EBITDA was a loss of $47.3 million, compared with $47.2 million in the comparable period.

Due to the seasonal nature of the lawn and garden business, Scotts reports a loss in the first quarter of each year. This year's reduced loss resulted from improved sales and supply chain cost reductions.

"Our focus on execution throughout 2002 has clearly carried over into 2003," said James Hagedorn, president and chief executive officer. "We're off to a great start this year and believe the combination of new programs and products, continued supply chain improvements, increased advertising and the growth of Scotts LawnService will mean another record season for Scotts and the overall lawn and garden category.

"With the gardening season fast approaching, we remain confident that company-wide sales will increase 7 to 9 percent this year and that our core consumer business in North America will increase 6 to 8 percent. We continue to expect adjusted net income to improve by at least 15 percent."

Company-wide sales in the quarter were up 12 percent to $181 million, compared with $161 million for the same period last year. Excluding the impact of foreign exchange rates, sales in the quarter were up 8 percent to $174 million.

The Company's North American consumer businesses reported an 11 percent sales increase. Every business unit in the United States exceeded last year's sales, led by the Gardening Products business, which reported a 19 percent increase in sales to $37.8 million. This marked the first quarter in which Scotts combined the reporting of its plant food and growing media businesses into a single category now called "Gardening Products." The Lawns business reported sales of $28.3 million, up from $26.9 million a year earlier and Ortho sales increased to $17.9 million from $16.8 million.

Point-of-sale data provided by the Company's major retail partners indicated that, on average, consumer purchases of Scotts' products increased 10 percent during the period.

Scotts LawnService reported sales of $15 million, up from $9 million in the same quarter last year, reflecting the benefits of recent acquisitions and organic growth.

International consumer reported an 8 percent increase in sales to $43.2 million, up from $40.1 million last year. Excluding the impact of foreign exchange rates, sales for International Consumer declined 4 percent to $38.4 million.

Global Professional reported a 3 percent increase, with sales of $37.5 million, compared with $36.4 million. Excluding the impact of foreign exchange rates, sales for Global Professional declined 2 percent to $35.7 million.

Both International Consumer and Global Professional were impacted as their customers continue to move shipments closer to consumer takeaway. The Company remains confident that both businesses will meet their full-year sales targets.

Consolidated gross margins improved to 20.6 percent, from 19.3 percent, reflecting supply chain cost reductions, the favorable impact of Scotts LawnService and foreign exchange rates, offset by higher restructuring costs. The Company estimates that exchange rates favorably impacted gross margins by 60 basis points in the quarter.

Scotts reported a net expense of $7.1 million related to the Roundup(R) commission in the first quarter, compared with a net expense of $5.9 million last year. An increase in the required contribution payment to Monsanto caused the increase in expense. The Company did not record any commission in the first quarter for either year and does not recognize commission until minimum EBIT levels, required by the Roundup agreement, are reached.

The Company also outlined expected performance for each of the remaining quarters in fiscal 2003. While full-year projections are unchanged, Scotts said it expects adjusted net income, which excludes restructuring and other charges, to decrease $4-8 million in the second quarter from the same period in 2002. The anticipated decline reflects the investments the Company is making in its Business Development Group, North American sales group, information services and costs associated with its European integration plan.

Year-over-year adjusted net income is expected to increase $6-10 million in the third quarter and $8-12 million in the fourth quarter. The expected improvement in both quarters is based on significant anticipated improvements in gross margins related to North American and International supply chain cost reductions, and the continued growth of the higher margin Scotts LawnService business.

The Scotts Company is the world's leading supplier of consumer products for lawn and garden care, with a full range of products for professional horticulture as well. The company owns the industry's most recognized brands. In the U.S., the company's Scotts(R), Miracle-Gro(R) and Ortho(R) brands are market leading in their categories, as is the consumer Roundup(R) brand which is marketed in North America and most of Europe exclusively by Scotts and owned by Monsanto. In the Europe, Scotts' brands include Weedol(R) Pathclear(R), Evergreen(R), Levington(R) Miracle-Gro(R), KB(R),
Fertiligene(R) and Substral(R).