- Scotts Miracle-Gro Company (NYSE:NYSE:)
Shareholders should email Fletcher@fmoorelaw.com
The investigation concerns false statements or omissions regarding Scotts’ debt covenants. In approximately 2021, Scotts touted that the company exceeded internal targets and had “net leverage of 5.9 times debt-to-EBITDA comfortably within the covenant maximum of 6.25 times.” The company further stated that it was “optimistic that we will remain within the confines of our banking covenants” and “[did] “does not see any leverage compliance issues going forward” and was “on track to do even better” than its guidance, which the Company later stated was “really, really important for us to avoid covenant hell.”
In truth, Scotts’ inventory far exceeded consumer demand and it was only meeting its debt covenants through deliberate channel saturation and accounting devices. It also came close to violating its debt covenants and needed to have a “banner year” to remain in compliance. In its fiscal fourth quarter of 2022, Scotts changed the way it calculated EBITDA to stay within its debt covenants, as EBITDA was the primary metric for calculating the company’s compliance.
In
Following this news, the price of Scotts common stock fell by
If you own The Scotts
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