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The Scotts Miracle-Gro Co  (NYSE:SMG)
Q2 2019 Earnings Call
May. 01, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to The Scotts Miracle-Gro 2019 Second Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Jim King. Please go ahead, sir.

Jim King -- Senior Vice President, Investor Relations & Corporate Affairs

Thank you, John. Good morning everyone and welcome to The Scotts Miracle-Gro second quarter conference call. With me today in Marysville, Ohio, this morning are Jim Hagedorn, our Chairman and CEO; Randy Coleman, our Chief Financial Officer; Mike Lukemire, President and Chief Operating Officer, as well as several other members of our operating team. We will get started in a moment with prepared comments by Jim and Randy, respectively. At that point, we will open the call for your questions. I know that many have other calls this morning. So we will try to move through the Q as quickly as possible. Please help us mange our time, please ask just one primary question and one follow-up. If there are questions left unanswered, I'm glad to follow-up with as many of you as I can later end of the day.

For clarity, during our call this morning we will be referring to both sales to retailers which are reflected in the P&L through March 30, as well as consumer purchases at retail as measured by POS or point-of-sale data. The POS data is current through last Saturday, April 27. One bit of housekeeping related to our IR activities. On Thursday, June 6, Randy and I will be presenting at the William Blair Growth Stock Conference in Chicago. This will be a webcast presentation and be available on our website. More details will be provided leading up to that event. We have historically used this conference to update our guidance for the full year and have issued a press release in conjunction with the update. While those plans could change between now and June 6, our current intent is to follow these past practices.

With that, let's move on to today's call. As always, we expect to make forward-looking statements this morning. So I want to caution you that our actual results could differ materially from what we say here. Investors should familiarize themselves with the full range of risk factors that could impact our results and those are filed in our Form 10-K, which is filed with the Securities and Exchange Commission. I also want to remind everyone that today's call is being recorded and an archived version of that call will be available on our website later today.

With that, let's get things started, and I'll turn things over to Jim Hagedorn.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Thanks, Jim, good morning everyone. Yesterday I had laryngitis pretty bad and couldn't speak. So I'll try to get through the script. If I need help, Randy may pick up. So just a heads up, so here we go. There was a morning, a couple of weeks ago when I was walking into the office and I realized that spring was finally here. The grass is green again, the leaves were opening on the trees and the flowers were in full bloom. And it dawned to me right then what I wanted to talk about today.

I doubt that many of my peer company CEOs walk outside in the morning and get inspired about their business. But that experience means something here. Spring is our season, the time of the year when the spotlight shine the brightest on our business. And at the risk of sounding a bit corny, I consider Scotts Miracle-Gro the undisputed leader of spring. It's hard to argue that point this year with POS up 13% in our US consumer business and strong performance in nearly every category in which we compete.

But I don't want to focus on today's press release and the strong start to the season, what I'd rather focused on are the real effort that enabled those results. And I want to target my comments to those shareholders who are not just interested in the latest quarterly scorecard, but those who like me are focused on what we're doing to create long-term shareholder value. That effort goes well beyond how we're executing on a day-to-day basis.

It's about how we're pushing ourselves to develop new and more creative ways to strengthen our multi-generational relationship with our consumers. It's about bringing energy and new approaches to the table to keep our retail partners engaged. It's about creating and implementing an industry-leading approach to the hydroponic space. It's about driving value for our shareholders by focusing on cash flow over EPS and sustained and predictable performance over periodic bursts of energy, and it's about creating a corporate culture that is both energetic and inviting. The kind of place that will allow us to attract young talent that we need to maintain the momentum for years to come.

A lot of folks have started asking me if I am contemplating a slower pace or maybe even retirement. The truth is I haven't had this much fun at work in years and my level of engagement is actually increasing, not decreasing. The reason I suspect is twofold. First, the issues we're working on, the evolution of Hawthorn, changes in how we communicate with consumers, the challenges regarding Roundup, our commitment to improving cash flow, the development of our next-generation of leaders are critical to our success in both the near and long term.

And second, frankly, I'm just energized by what we're trying to do. All of our efforts are paying off so far this year. So I'll just hit a few of the highlights. Sales to retailers in US consumer are up 8%. Five in the last six months at Hawthorne have been up double-digits on a comparative basis and we have once again been able to get our leverage ratio below 4 times. Someone will probably ask the question later, so I'll just say it upfront. Yes, we are running better than we expected entering May, and no, we're not changing our guidance at this time.

While there is a lot of optimism flows through the building right now, it's May, we've been here too many times to declare victory at this point. There's a lot of season ahead of us and we have to stay focused, all the way through to the finish line. Like I said, I don't want to dwell on the numbers, what I'd rather do I'll focus on the real efforts that allowed us to deliver those numbers. A year ago there wasn't much celebrating going on here. We had a terrible start to the season and changes to California cannabis laws (inaudible) on the hydroponic space.

It would have been easy to panic as the stock price fell and some investors questioned our strategy. We could have scrambled to restructure, pull back on innovation or said investments in marketing could wait for a better day. We actually may have done some of those very things a decade ago. But this is a different company today and we didn't do any of that. Instead we stayed focused on the play we called and kept executing. In fact, while we were sitting on this call a year ago talking about the challenges of the 2018 season, our teams were head down already focused on the 2019 season and that approach is evident in the results we announced this morning, both in our US Consumer segment and in Hawthorne.

Look at our lawn fertilizer business where POS is up 10% entering May. The biggest drivers in this category are products that didn't even exist three years ago. A decade ago this category was in a deep slide. We took the time to understand why that was happening. We found new ways to engage with the consumer, created trade programs that rallied our retailers and launched products that exceeded our expectations. One of those products, the Scotts Triple Action, which feeds your lawn, kills weeds and even prevents crab grass or controls bugs, depending on the regionally specific product that you buy. Another example is Scotts Thick'R, which contains soil enhancements, fertilizer and grass seed, all in a single bag.

It's been blowing the doors off with consumers. Grass seed is up 35% this year and was one of our high performing categories last year as well. Over 90% of the online reviews for Thick'R carry a 5-star rating, further proof that the innovation we're bringing to the market is driven by understanding and adapting to consumer needs. The way we're talking to consumers also continues to evolve. We're not just investing more heavily this year, we're evolving our approach and the actions we've taken so far are just the tip of the iceberg. A decade ago I spoke at the Analyst Day Meeting in New York and criticized our digital marketing efforts. Yes, we were doing a great job with TV and radio, but our digital efforts were way behind the curve. We were doing almost nothing with social media and our online commerce efforts were not existent.

Today, our digital efforts are greatly improved and I want to acknowledge our team for their work. But the digital marketplace is ever changing and if we were lagging in the space in the past, I want us to be leading in the future. More of our spending needs to move to digital, but our efforts have to be focused on inspiring the consumer. We have to be clever, provocative and innovative. We also have to be willing to challenge your own thinking. That's why we've enhanced our internal efforts through the engagement this year with Gary Vaynerchuk, an acclaimed online influencer who has become one of the country's most sought after digital marketing authorities. He and his colleagues at VaynerMedia have helped us launch our successful new Ortho GroundClear campaign and have been heavily engaged with our team on using our social media presence more creatively.

I mentioned Gary's work with us, not just in the context of marketing, but through the lens of creating long-term value. Consumers are changing fast and if we hope to enjoy a relationship with them in the future, we have to change too. I'm committed that revolutionizing our approach to marketing is positioning both our Company and our brands in a way that instills trust with the next generation of gardeners and allows them to see us as a relevant and necessary part of their lives, season after season.

Speaking of being relevant, I want to spend a few months -- not few months, it feels like it -- moments talking about what's happening with the launch of our new GroundClear product and also provide an update on Roundup. First on the Roundup front, you saw in the press release the POS is up more than 20%, that's obviously good news and we're particularly thankful for the strong retailer support the brand is continuing to receive. On the past two calls, I've hinted that we were talking to Bayer about the structure of our relationship with them and we've made tremendous progress in recent weeks.

First, you may recall, we entered into a JV with Monsanto a couple of years ago that resulted in Scotts's acquiring a 51% stake in a professional non-selective weed control product business. In recent weeks, we sold our interest back the Bayer and have exited that business. It negatively impacts the P&L by a few cents per share, but the cash proceeds of $37 million will go straight to paying down debt.

Additionally, we've already reduced our debt by about $140 million using the proceeds from our sale of our minority interest in TruGreen. These two transactions have allowed us to get below 4 times leverage in the quarter and we should remain at that level through to the end of the year. If we stay in our current path, we would expect to get back to about 3.5 times leverage next year. This would allow us to get back to one of our major pillars of Project Focus to return cash to our shareholders.

A second development is that Bayer has agreed to a $20 million reimbursement this year. We have been anticipating this payment for several months as reimbursement for investments we didn't anticipate entering fiscal 2019. In other words, I would caution you against adding this to your models. Our counterparts to Bayer have been committed to working with us. We've been working collaboratively to further make amendments to our agency agreement that gives us more flexibility going forward. I'm cautiously optimistic and we'll obviously have more to say as things move along.

As for GroundClear, it's the story behind the story that I think matters the most here. We brought this innovative herbicide to the market in less than a year, that's unheard of in the pesticide world. Nearly every major function in the Company touched this product and the process ran with near-perfection.

GroundClear serves two important purposes. First, it provides an alternative to consumers who might have otherwise decided to leave the category. But this is also our first armory-listed non-selective weed control so it can be used around organic gardens and it is extremely effective and fast. This opens up an entirely new segment of audience for us and allows us to expand in the category. In fact, if you look at the non-selective category in total, as Roundup and the entire GroundClear line, consumer purchases are up nearly 30% entering May. GroundClear is an example of turning the organization on its head and getting something done with urgency.

Sometimes the process doesn't work like that. Sometimes bringing a product to market takes patience and that's what we demonstrated with Miracle-Gro Performance Organics. In a slow-growth category like lawn and garden, it's easy to consider reductions in areas like R&D as a potential pathway if you're looking to save your way to success. That approach could have made sense in this instance since our soil products are already the Number 1 product line by a wide margin.

But consumer sentiment is evolving and if we didn't create the ultimate organic product, we knew someone else would. So, we spent four years working on Performance Organics and the result, the creation of an organic fertilizer that performed every well, it's a bit of a synthetic, was worth the wait. Retailer support has been fantastic, consumer engagement has been strong and the entire growing media category is up 10% on a fiscal year-to-date basis entering May, and that's before we get to the peak gardening weeks of the year.

Here is a common thread in all the product stories I've highlighted this morning. In each case it's been about addressing the changing needs and attitudes of consumers. To truly address those changes, we need the support of our retailers. This season, in particular, we strengthened our relationship with them by having critical timely and honest conversations about the challenges and opportunities in our category. The transparency of those conversations has helped strengthening those relationships and trust, and drive the results we announced today, and positioned us for continued success in 2020 as well.

I'll cover more about the US consumer business in Q&A, if you'd like, but in the interest of time, I want to shift gears and talk about Hawthorne a bit. Clearly, we're pleased with what we're seeing. We had double-digit growth throughout the quarter with strong growth in both durables and consumables, and we're seeing growth in both emerging and mature markets. I'll leave the rest of the facts and numbers to Randy.

On the last call someone asked me why we're so confident we would win in this space and what we would bring to the party that gives us a right to win on the professional side of the industry. There was a clear implication and some folks believe our experience as a consumer company somehow impedes our ability to be successful here. When you run a public company it's hard to plug your ears sometimes, that was one of those times. Because the notion that we have the wrong products or skills set to win in the professional grower market is just flat out wrong. I'll start reminding you that a very small percentage, we believe, like less than 5% of our hydroponic products are used by people growing plants at home.

Said differently, more than $500 million worth of our products will be used by commercial operators this year, including the largest growers in the world. In fact, we have a dedicated team that focuses exclusively on that segment. While it's become cool and fashionable to invest in companies that are affiliated in the hemp and state-authorized cannabis industries, we were the first major player and certainly the first public company to enter this space. We've been bullish in this category from day one, including a year ago when it felt like the sky was falling.

I've suggested many times that last year was an aberration, the kind of result that occur sometimes when a business is still in the adolescent stage. But the results we posted in Q2 and the momentum we've seen so far in Q3 is showing once again that this industry has great potential and we are better positioned than anyone to win. First, the results we reported today demonstrate that large commercial operators in the industry see us as a critical part of their success. And the approach we've taken with them has allowed us to expand our market position.

Over the past year we've taken an aggressive approach to promotions. And it's not because we lack confidence, it's because we have confidence. In a moment of frustration last year, I made a comment on one of these calls that the team was gun-shy. They've taken great pride in proving me wrong. Our goal is to be the perfect supplier to growers in both the US and Canada. And so we have been investing, as we plan to do, to build our customer base and distance ourselves from the competition. We are succeeding. The Number 3 player in this space has exited the category in recent months and we have further distanced ourselves from the Number 2 player. We have demonstrated to our customers that we are just as committed to their success as we are to our own. To be the perfect vendor, we can't simply sell products. We have to sell performance and be viewed as a trusted resource. This is especially true as the market continues to evolve and the financial stakes of growers continues to climb.

We have to help them understand how to use our systems in a way that delivers the best results in the most cost-effective way possible. To be the perfect vendor, our customers can't see us as a vendor. They have to see us as an indispensable partner to their success. To achieve that goal, there was a clear near-term trade-off that we're making. Our margin rate is clearly not where we'd like it to be right now. In the near term, however, by engaging an aggressive promotional strategy we have solidified our market leadership, which I believe, creates the best environment for more attractive level of profitability over the long term.

Sustained success will require us to continue to further improve our product portfolio. We need to expand our technical capabilities and ensure that our R&D pipeline is focused on performance, cost and speed. We have to be mindful that as fast as this industry is evolving, much of it remains the same. Just as we do in our US consumer business, we need to respect the culture that the pioneers in this industry created and help them continue to succeed alongside the larger players who are now coming in.

I want to wrap up and turn things over to Randy, but I first want to reiterate how good I feel about the way we're running this Company. As I said earlier, creating long-term value requires a lot more than getting a good break from Mother Nature or hitting the occasional home run with a new product. It starts with a mindset and a commitment, and it requires investment in both the right people and the right processes to get things done. I want to tip my hat to Mike Lukemire he's done a great job as Chief Operator and his team is performing at an extremely high level. What's really exciting is that I'm confident they've got a lot more in their tank. I also have to give a nod across the table to Randy. In my 20 years as CEO, he's been the best operating CFO I've ever worked with. It's been rewarding to see him expand his role to take on strategy, to help us navigate M&A and to drive our discussions with the team at Bayer. It's also been great to see the momentum just back on our side at Hawthorne. Even though politicians mostly at the federal level are ridiculously slow to embrace changes that Americans clearly want, it's encouraging to see positive changes in states where voters are getting a say.

In those places, state laws are helping our business. Growers are finding it profitable to grow again and retailers are feeling more comfortable taking inventory because they're feeling the tailwinds as well. It's not hard to be pleased with the results we announced today. It always feels better when people are stressed to keep up with demand, instead of being stressed to create it. There was a renewed sense of confidence and enthusiasm throughout the Company this year and is palpable. We can feel it, I can feel it. I hope you guys can as well.

So let me turn things over to my partner to run you through the numbers. Randy?

Randy Coleman -- Executive Vice President and Chief Financial Officer

Nice job, Jim.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Thank you.

Randy Coleman -- Executive Vice President and Chief Financial Officer

I know there was a struggle. Hopefully Everybody listening appreciate that. So, good morning everyone. We clearly have a great deal of good news to cover today and I want to start by reinforcing the confidence Jim just expressed about where we stand right now. I'll discuss our guidance in more detail near the end of my prepared comments. I'll just say out of the gate that I feel optimistic about our ability to deliver on the commitments we made at the start of the year.

I'm not going to go line by line through the P&L. We will cover things in Q&A if there is an area where you need more explanation, but I will hit the highlights and try to anticipate some of the question you have that may not be answered by simply looking at the numbers. On the sales lines, let me touch on a couple of items. We said the US consumer business would be up 1% to 2% for the year and were up 8% in the quarter and year-to-date, and we are now at the midway point of the year. Two things you should know, first, a lot of the malt sales we're seeing this year were not contemplated in our original guidance, at least $35 million worth.

The other point is remind you what I said on our last call, we've seen some of our retailers take a more aggressive approach to fill in their stores earlier this year. That's exactly what happened. So, more -- so then in most years the balance of 2019 is really about replenishment, and that means it's really about consumer engagement and POS from this point forward. Both we and our retail partners remain extremely active in trying to drive consumer engagement. Remember though, we have a plus 28 comp in May. So we are likely to give back much of the POS growth we've seen year-to-date.

In addition, histrorically speaking, we still have about 50% of the POS year still in front of us. If POS is plus 4, plus 5 in mid-June, I'll be very pleased with our results.

The other thing working in our favor right now is that retail inventory levels are up from last year's levels. There's clearly less focus on that metric at this point in the season than we saw a year ago. The seasoning (ph) in inventory is really what the retailers historically trying to manage. We anticipate it going into the year that retail inventory reductions could put downward pressure on our top line number by the end of the year. Even though that's not manifesting itself right now, we're not going to move off of this assumption until much later in the year.

Hawthorne total shipments, up 21% in the quarter and 5% year-to-date on an apples-to-apples basis also look a bit better right now than our guidance would have suggested at the midway point in the year. Even more encouragingly we are also up over 20% in the US hydroponics business for the month of April. I'm usually a margin hog, but I'm totally aligned with Jim's comments about our near term focus to reenergize the top line at Hawthorne. My bias actually stems from the dozens of shareholder meetings I participated in over the past year.

I believe getting this business to once again to sustainable growth is our number one near-term priority. However, looking into the future we will be shifting our focus next year to create a margin profile that allows us to drive the kind of value from the business that our shareholders expect. On the Companywide gross margin line, our rate had declined 60 basis points in the quarter and 160 basis points year-to-date on a non-GAAP basis. While our gross margin dollars are up almost $65 million so far this year, we obviously have some ground to make up to get our gross margin rate to flat by year end as we had originally planned.

Right now, as expected, the impact of the Sunlight deal and more specifically the lower margin distribution side of this business is the biggest drag on the rate. So that begins to anniversary in June. Also, we've been highly promotional at Hawthorne over that past few months. While this approach is driving share gains and top line growth, it also has an impact on the gross margin rate.

Pricing in our US Consumer segment only took effect in Q2. So we'll get more benefit in the months ahead. Additionally, the impact of the incremental malts (ph) business will add more margin dollars, but it will also be dilutive to our overall rate. Some of the margin pressure will be offset in Q3 by a $20 million reimbursement we received from Bayer for incremental expenses incurred and to be incurred in the future related to the Roundup business. This payment will run through our P&L similar to how the commission does. As a reminder, we originally guided to a $20 million contractual reduction in Roundup-related gross margin for the full year and that impact will now be entirely offset within gross margin -- April 1st payment.

Commodities continue to come in as expected, a headwind over last year, but mitigated by pricing. We are about 90% locked on the commodity purchases for this year and have begun locking in costs for 2020 as well. On a related note, hats off to our supply chain team. Despite retailers pulling forward inventory and consumer purchases been red hot in the early season, we've done a great job of keeping retailers in stock without facing any unexpected pressure on either the availability or the cost of (inaudible).

Moving on to SG&A, we saw increases of 8% in the quarter and year-to-date, $280 million and $296 million, respectively. The increases were driven primarily by the Sunlight deal, net of synergies. We've had higher media spending this year as well. Some of it was planned and some of it not planned at the start of the year. However, some of the $20 million reimbursement coming from Bayer is targeted to help cover the incremental investments in advertising expense that was not contemplated in the original guidance that we provided to you.

In terms of the Sunlight deal, the SG&A savings we anticipate have been realized on time and in full. Some of the anticipated supply chain savings are trending slightly behind schedule, but we still plan to hit our incremental $30 million cost savings goal for the full year.

You'll notice that segment profit for Hawthorne is about $15 million year-to-date. So we need a strong performance in the second half to hit our $60 million profit goal. Continued strong sales trends, back half synergies and prior year purchase accounting expenses that will not repeat are the key drivers for Hawthorne.

Interest expense in the quarter was $29 million, an increase of about $6.5 million from last year and our leverage ratio stood at about 3.9 times entering Q3. I will reiterate once again that 100% of the proceeds from the triggering divestiture have gone toward paying down debt. In addition, separate from the $20 million reimbursement mentioned earlier, we also received on April 1st a $37 million payment from Bayer for the sale of our interest in a JV for professional business and we also applied those proceeds to debt reduction. Combined with the plans we already had in place, I would anticipate our leverage ratio to continue to be slightly below 4 times at the end of the year.

When we take all this down to the bottom line, our non-GAAP adjusted net income was $203.2 million or $3.64 per share in the quarter. That compares with $165.2 million or $2.88 per share in the same period a year ago. On a year-to-date basis, non-GAAP adjusted earnings are $126.2 million or $2.26 per share compared with $103 million or $1.78 per share a year ago.

What does all this mean for our full year guidance. Frankly it's still too early in the year to change anything, but some clear trends are definitely shaping up. I think it's reasonable to expect that we may over-deliver on the top line, either in one segment or both and I'm optimistic about where we stand right now.

Our original guidance for the gross margin rate, flat from last year, is still possible, but may now be a best case scenario. Regarding SG&A, given the media spending that's incremental to our initial guidance, SG&A dollars will likely be higher than we thought, but SG&A as a percentage of sales probably will not change materially. Perhaps this is redundant for my previous comments, but I also want to clearly address the impact of the $20 million we received from Bayer on April 1st. We've been in discussion with Bayer for several months, providing confidence that we have extra money to invest in both US Consumer media and Hawthorne promotions that would drive our top line, after paying for certain other SG&A costs. Accordingly. I would not assume any of the $20 million as incremental earnings for the year.

To-date we've seen terrific success with incremental spending plans developed after we provided our full year guidance last fall. However, we still have several big POS weeks ahead of us and the hydroponic business can vary significantly from one month to the next. So it's not prudent to formally update our expectations until we have more visibility on the year. And with all these puts and takes, it's simply too early to give you an accurate gauge on what all those means to our non-GAAP adjusted EPS targets.

Jim King said at the outset that we will be in Chicago on June 6th for the William Blair conference. We almost always use this event to provide a live update on where we stand and I expect us to do that again this year. Regardless of all that, I want to close my remarks by once again expecting to my optimism about where we stand. And frankly, I appreciated Jim's comments about how we got there. A year ago I was out there front and center listening to people question our strategy, did we get everything perfect? Not initially, but I'm proud that we stayed true to our beliefs, stayed focused on executing. Those facts put us in a great position and into the back half of this year, and also as we begin preparing for the 2020 season.

So with that, let me open the call for your questions. Thank you.

Questions and Answers:

Operator

Thank you. (Operator Instructions) We will now take our first question from Bill Chappell of SunTrust. Please go ahead, your line is open.

Bill Chappell -- SunTrust -- Analyst

Thanks, good morning.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Hi, Bill.

Bill Chappell -- SunTrust -- Analyst

Just first on the Hawthorne side, can you kind of give us some more color on what the liquidation did to your sales and your margins intra-quarter of the number, I guess the Number 3 player, just trying to understand, did that cause a cut in prices because of the slowdown in sales. Were they could have actually been better. I just didn't understand what the near-term impact was.

Randy Coleman -- Executive Vice President and Chief Financial Officer

Bill, this is Randy. So we have been promotional. We have been taking market share. The Number 3 player is out of business. Number 2 player, definitely challenged given how aggressive we've been in market share we've been taking. To exactly quantify the impact of that, it's difficult to say. I can tell you the promotions that we've run have been profitable. So they've been margin dilutive, but we have not losing money, it's not a loss leader, we're still making money in what we're doing and we're being very successful driving the top line and we always engage in a lot of debate here about margin versus sales and so on, but for what we're doing for this year I'm completely aligned with driving the top line, taking share and putting us in a really good long-term position. So hopefully that helps. I don't know if Jim, Luke or Chris want to add anything else.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

I'm going to try to save my voice, if that works.

Chris Hagedorn -- General Manager

Yes. Bill, this is Chris. One thing I would add is that without looking at it from a financial perspective, just looking at it from sort of a market share perspective, following the closure of the Number 3 player, we've seen a significant increase in the number of retail accounts that we've signed up either as a partial supplier or exclusive supplier through those retailers, which to us is probably the clearest indicator of market share and as I said, that number went up significantly following the closure of Number 3 player. So that's a good indicator for us.

Bill Chappell -- SunTrust -- Analyst

Got it. And then on the Bayer payment, is this expected to be an ongoing payment, I mean, ongoing kind of subsidy to help offset the negative news.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

You might as well take it, my voice is crashing here.

Randy Coleman -- Executive Vice President and Chief Financial Officer

Well, Jim tried to jump in here, but I'll answer that one, Bill. So, the $20 million for 2019, given what's going on with the marketplace and the challenges that have been going on and we've been working collaboratively with the team, both in Saint Louis and in Germany over the last several months. So we finally came to an agreement and the payment was made on April 1st. But it's a one-time payment in 2019 for reimbursement of certain costs related to Roundup and some of that is incremental to those costs and we've been able to take those dollars, invested in Roundup media, other media in our US business as well as help fund some of the promotions in Hawthorne that we already talked about. So, happy the way that turned out, but that's the 2019 one year payment,

Bill Chappell -- SunTrust -- Analyst

Maybe just talk about kind of where you're at that one.

Randy Coleman -- Executive Vice President and Chief Financial Officer

We're still in conversations like Jim said, we think it's important to have flexibility, optionality, security and the agency agreement that we already have. Conversations have been very productive. The team over there understands where we're coming from. Too early to be more clear or definite, but we're encouraged by (multiple speakers).

James Hagedorn -- Chief Executive Officer and Chairman of the Board

One of the conversations is about the economics and those -- like Randy said, those conversations are ongoing and I want to be -- constructive and I want to be thankful to our partners at Bayer for -- at a time of I think pretty high stress for them, just sort of deal with our issues, as we see them. And I think these conversations are being led by Randy and are going, I think, really well. We'll have lot more to say when we can.

Bill Chappell -- SunTrust -- Analyst

Got it. And then just last one from me. I mean, the 13% POS this time of the year, it's the highest I remember at least in the past five plus years and you'd started going back to January saying that the retailers were kind of geared up better than they have been before and were really ready. Is there an explanation for beyond weather, I mean, whether was better, I get that. But like why it's just so strong this early in the year?

James Hagedorn -- Chief Executive Officer and Chairman of the Board

I think, first, the weather has been good. That always helps. I think it's a little bit -- go back and look, take out last year, and -- so there is good growth, but last year stocks (ph) so bad that it sort of says we're in a pretty good like trajectory, if you just take last year out, but I think you're right and that there's more than that going on.

I think all of our retailers are highly encouraged in the category. I mentioned in my script that we have a lot of senior-level discussions primarily about what's happening with Roundup and this has been really Mike and myself at the most senior levels of really all of our retailers. And number one, I think it's allowed Mike and I to kind of renew our relationship without talking about the day-to-day of kind of the transaction of doing business with a big retailer, which tends to be kind of everything, which is selling stuff. This is one where it's kind of adults in a room talking about what do we want to do, how we're going to do it together and I think it resulted in some retailers that, you know, we have had more stressful relationship with over the years recently, where we renewed our relationships at the senior levels. And I think we sort of discovered we like each other more than we knew and I think that helped.

I also think that new management at Lowe's, to be fair, is extremely keen on stepping out on really the first quarter of their first year, their first full year. And so, they're taking it very seriously, which is great. And last, I think this is one of those internal things that we're all going to have to figure out. I mean you guys too, Randy is -- mulch is a very -- I mean I think we're rediscovering the importance of mulch to start the season and I think it's pretty critical.

I think we've got to figure out in our sort of margin structure if mulch is really important to us, what does that mean to our gross margin expectations. It clearly is slightly dilutive and we just got to figure out sort of how permanent that is, but you know it's -- I just don't think you can actually promote -- I'm talking at the retailer, promote into the season without something like mulch and therefore I think we've been conflicted about that and tried to sort of move toward discipline on margin and reduction in our exposure of that category. Just saying, it's not that high-calorie count, but I think that I view that as a mistake.

So, I think it's really good for the total business and I think it's important for the Street to sort of see that, this is not falling into undisciplined selling. This is actually leading with something that really gets more on the garden season going and I think that's been a big part of what's happened this year. And I want to put out, Tom Crabtree and Mike are new, that give us more upside opportunity. It's going pretty well. And so it's a healthy thing and I think that it's more than one thing, it's a lot of things coming together that you would hope would come together and they have.

Randy Coleman -- Executive Vice President and Chief Financial Officer

Bill, to answer your question on this year, April 2019 that we're in, just about rival, the best April that we've had in history looking backwards. Versus the three-year average over the last few years, we're up about 3%. So that's puts a 13% in context. But really pleased with where we're at and a little bit more color on just what the numbers look like. When we look at retail performance, we're up across all channels. So we're doing well across the board for lot of reasons that Jim talked about. When you look at it regionally, we're doing right now better in Midwest and Northeast just because last year was such a challenge on the weather end. So we expect that the West and the South to do a lot better in May and June and complement that. And when you think about share, we have typically higher market share in Midwest and Northeast, especially on the fertilizer business. So that's helped quite a bit as well.

And then on our last call we talked about coming out of line reviews and market share expectations for this year. And like I said, there were certain skews that retailers took out, but I understand completely they weren't really working well for us. They weren't working well for the retailers either, but since then we've been really competitive. I believe we're taking market share at this point in a post-line review (inaudible). We've been a lot more competitive in the marketplace, taking advantage of opportunities in the store and the new products we've introduced aren't just about market share, they are also about growing the category. So when you think about GroundClear, it's growing the category in non-selective weed and our Performance Organics, it's growing the category and (inaudible) mix and garden soil and plant food as well. So not just market share, they are truly growing the category and more reason why we're excited about what's happening this year.

Bill Chappell -- SunTrust -- Analyst

Great, thank you.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Mike, anything you want to add on this, your business?

Michael Lukemire -- President & Chief Operating Officer

I think you got to look at it as retailers in the renewables are counting on us to grow the category and that's the complete solution across all categories versus picking to choose winners and losers. And I think that's where (inaudible) bring more people in and then when we convert with our brands, we went in other categories. And I think that's the effect we're seeing.

Operator

We will now move on to our next question from Jon Andersen of William Blair. Please go ahead, your line is open.

Jon Andersen -- William Blair -- Analyst

Thanks, good morning, everybody.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Hi.

Jon Andersen -- William Blair -- Analyst

Wanted to ask -- start on Roundup. I'm trying to kind of square the idea that Roundup point-of-sale was up 20% with some of the noise around the brand and then the payment that you referred to from Bayer. If you could talk a little bit about the strength of Roundup in light of some of the headlines, what you expect going forward for that brand and is GroundClear meant to replace Roundup over time or added as a kind of an option for those consumers who may not be comfortable on the margin by Roundup in the future?

James Hagedorn -- Chief Executive Officer and Chairman of the Board

All right. I'll start, if I can continue. We're surprised too. So one of things we did is increased the ad spend and both of us, Bayer and Scotts, agreed to pay for it. When you're seeing like whatever it is Prop 65 language in California being talked about, I think we told you guys last year, California in spite of the Prop 65 and IR stuff actually had really good POS results last year in spite of what you would say -- and by the way our research would show that consumers were concerned.

So one of the things that's happened I think is the Southwest had a pretty wet winter and a lot of weed pressure. And so we started out early with really good sales in like Arizona, Phoenix especially. And when you look at it and look a year before that and the year before, it was less -- Roundup, last year was such a bad year that it's a little bit like talking about our consumer business. So part of the growth is the fact that it's less impressive when you look at it compared to sort of the previous years, not excluding last year.

So we increased the advertising. We were concerned, the retailers were concerned. We didn't know what's going to happen. Honestly, I'm not sure I can tell you exactly what happened. But we're happy about the result. I think all of us, Bayer, Scotts, the retailers have been concerned and we're relieved at the result that we're getting. So that's kind of on that side.

The lineup -- GroundClear lineup is designed as a kind of a fallback just because we didn't know and we wanted a product line that was allowed under the agency agreement which GroundClear is to just in case there was a backlash be ready for that. And we funded that at a pretty high level. And so, the result is when you see our sales which are really the category being up almost a third year-to-date, it is impressive, heck. So GroundClear was designed as a backup.

I think it actually has a real place in the -- I mean, we're not going to not focus on that product line next year as a result of the results of this year. I think it gives us a better (inaudible) set, I think it offers an OMRI-certified product for retailers who -- or for consumers who might be concerned or want a different sort of less chemical product. So I think it is a little bit serendipity in that, we had a bad season last year, that season was a lot better, meaning a lot more weed pressure and I think it's probably pretty clear that consumers have a lot more resiliency than maybe our research what's shown in regard to sort of the brand reputation.

Randy Coleman -- Executive Vice President and Chief Financial Officer

Jon, the only other thing I'd add is, you haven't seen that the EPA came out yesterday, US EPA. They've done another review of glyphosate and very comfortable the signs are sound, safe for use. So I think even more affirmation that things are fine.

Jon Andersen -- William Blair -- Analyst

That's helpful.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

I think that I'm going to go and say too, if our friends at Bayer are listening that they've actually been really good to work with so far throughout what I think is extremely disruptive period of their history as they're dealing with integration of Monsanto and the Monsanto kind of reputational issues and sort of legal liability issues that they're dealing with. So, if I look back at kind of where we were last fall after that original Johnson verdict to where we are today, Randy has really primarily led the exercise in trying to figure out how our relationship needs to be modified in order to do the right thing for this company and they've actually been receptive in dealing with that and it's been not pleasant to deal with, but it's been pretty professional.

Jon Andersen -- William Blair -- Analyst

Okay. You talked in the prepared portion of your comments, you know, how important it's going to be viewed or become a trusted partner for large commercial operators in the hydroponic space and you are having the right products, differentiated products. Just wondering if you could talk a little bit about, you know, you have two sides to the business. You have the consumable side and the durable side, and where you think you have the most differentiation or importance today to those large-scale commercial operators and where you have the most work or more work to do to demonstrate that technical expertise and differentiation, again, comparing your durables portion of your business versus the consumables?

James Hagedorn -- Chief Executive Officer and Chairman of the Board

You want to take that, Chris?

Chris Hagedorn -- General Manager

Sure. Hey guys, it's Chris. So it's a good question and it's a little bit difficult for us to break it out. On the one hand, we are the market leader by a pretty significant margin on the lighting side as we are in the consumable side. I think you can look at and say, as with our routes from Scotts Miracle-Gro, the the biggest and most experienced consumer lawn and garden company and thus nutrient and growing media company in the world, I think our prowess there is pretty unparalleled and we compete on the lighting side with some very significant, very established players.

So I think the competition I would probably say is stiffer on the durable side particularly as relates to lighting, but we've got some very strong partnerships with some extremely significant player. So I don't think we're in a disadvantage position there, but I think again just understanding who we are from an enterprise level, Scotts Miracle-Gro, I think our sort of primacy there is pretty unrivaled, not to sound arrogant.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

I probably would say it slightly differently. Sorry, Chris. I think we have on sort of the consumable side, I agree with what Chris said, I think we just have to do it. I think we've got to look at our nutrients business, our soils business, our R&D pipeline. I mean, the things that we can add, when you talk about -- Chris talks about prowess, I think we have to execute against it and I think we are headed down the road. On the life business, first of all, we have a Board meeting tomorrow and Friday where Chris and his team are going to talk about all the stuff, but I think that we aim to lead lighting both in sort of the traditional lights and LEDs. And I think we've got a plan to do that, which is key.

And I think in the other durable areas, which would be sort of hydroponic systems, sort of you're rolling stock, there's a lot of innovation happening. So, I think that, somebody said how far down the track to you think you are in being what I've been saying lately the kind of the perfect vendor, perfect partner to professional growers, I think we're more than halfway there and that's a long way since where we were a year ago.

So I think we've -- we've got a lot of what to do, but when we talk durables, we're really talking kind of plastics and lights. And I think there's a lot of really good work happening, both here in Europe and in Vancouver. And on the consumable side, we've got a lot of value we can add that we're just, I mean, it's been -- I think Randy was actually being or maybe it was Mike last week being defensive of Hawthorne. I said, for Christ's sake guys, we have like eight months to integrate. And when you consider that we're trying to strategically make ourselves into an essential partner, I think we've made progress in both areas, but Scotts has a lot to help Chris with and his group on the consumable side. On the durable side, there is a lot of progress happening.

Randy Coleman -- Executive Vice President and Chief Financial Officer

And just one thing that I want to add that as important as it is to look at those two hats of our business and we do look at them that way between durables and consumables, I think it's also important to note that we have competitors in each of our individual categories, but for me I don't really see the differentiator as much an individual category for Hawthorne. It's the fact that we are basically partnered with people who were basic in every category, and when you look at these operations from a growers perspective, everything has to work in concert, every product, every tool you use has to work together with the others and being the only people out there who offer all of that along with the tech services package that we have, that to me is the big differentiator less than any individual product line.

Joe Altobello -- Raymond James -- Analyst

Okay. great. Last one from me is just, the Number 2 -- Number three player that liquidated relative to Sunlight. What are your expectations for the Number 2 player, are are they kindering, do you expect them to remain as a competitor or what kind of the implications be there going forward? Thanks.

Chris Hagedorn -- General Manager

I'll answer the question for my team. We respect everybody who's competing in this space and we aim to keep them hard until Randy says you better start focusing on margin. So, I would say highly respectful of our other competitor and we are not like taking our foot off the gas either. But I'm not going to say anything about (inaudible) because every time I do, that comes back to bite us on the ass. But I will say, so there are good honest people and we're going to continue doing what we do.

Jon Andersen -- William Blair -- Analyst

Thank you.

Operator

Okay. We will now move on to our next question from Joe Altobello of Raymond James. Your line is open.

Joe Altobello -- Raymond James -- Analyst

Hi guys, good morning.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Hi, Joe.

Joe Altobello -- Raymond James -- Analyst

So I guess couple of questions on the Bayer reimbursement. First, and it's my understand what you said earlier Randy, It's in the guide, but you're spending it back, so don't flow it through the model, number one. And number two, what was the rationale for the reimbursement because it seems like that the Roundup business is doing pretty well as you guys pointed out this morning?

Chris Hagedorn -- General Manager

Right. So let's (inaudible) question one. And Randy is capable of answering the whole thing. I would just say is, as we talked about this before, we didn't know how that was going to go. So we've done a lot of work to make sure that the good result you're seeing today at least as close -- we want to sort of overcome headwinds, I would say three or four months ago. And if I had answer for you, I would tell you, you know, is it safe? I think it was like a marathon man or something. I have no idea, OK, if it's safe. The results certainly --

Joe Altobello -- Raymond James -- Analyst

Product or the outlook, I think you need to be --

Chris Hagedorn -- General Manager

I'm talking about the outlook.

Joe Altobello -- Raymond James -- Analyst

Yes. Okay. Just to be clear.

Chris Hagedorn -- General Manager

You know, the Roundup is through two cases leaving like 12,998 left to go, but given the environment we thought we we're in, I think we spent the money extremely well and I think you're seeing the results of it. So we didn't know how is going to go and I can't predict that it's going to be as good next year. We're two cases into this and it's the court of public opinion and consumers that matters here. Not what we hope, it's -- but I think the money has been spent really well and I think you're seeing the results. But I don't know what it means.

Randy Coleman -- Executive Vice President and Chief Financial Officer

Yeah, I'll just say, Joe, again, this is the payment on April 1st and the sale of the JV on April 1st were both the result of conversations that deep way back to the fall, it took many months to consummate, so that was how we got here, like Jim said. Looking forward we're encouraged by what's happening this year. Difficult to predict the future, really happy the way this year is turning out and we'll go from there. But so far so good.

Joe Altobello -- Raymond James -- Analyst

Okay, understood. And if I could ask a question for Chris. I figured out I'll (inaudible) Jim's voice a little bit but, on California hydroponics, have you like the market's bottom there, where does supply demand stand for cannabis in California. And are you still seeing movement toward the black market which I think would be good for you guys?

Chris Hagedorn -- General Manager

Yes. So we are definitely seeing -- the market there on the legal side, I think is beginning to resolve itself. That being said, I don't think it's happening quickly enough to satisfy, just a pent-up consumer demand there. So we do believe that there is a shift taking place back toward the black market. I would chalk that up largely to again just a sort of a slow rate of legal changeover, as well as just the fact that even in a state like California things I think are relatively permissive and becoming more so, it's still -- it's hard to be a legal grower due to the way that businesses are taxed, the way the businesses can bank at a legal level. I think a lot of folks who dip their toes in the legal market found that unfortunately due to the way that the laws are written, it is more beneficial from them as individuals to remain in the black marker. So there's been a shift back toward that, at least that's what we've seen as the feedback we get from our retailers.

Now the product set that we have that has traditionally serviced that market, it is a relatively high margin product set. So it's not something we're lamenting, but I do hope that the state federal government can work through its issues and we continue to see it toward the white market because I think that's just better for everybody, long-term.

Joe Altobello -- Raymond James -- Analyst

Got you. Okay, thank you guys.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Thank you, Joe.

Operator

We will now move on to our next question from William Reuter of Bank of America. Please go ahead, your line is open.

Unidentified Participant -- -- Analyst

Hi guys, this is Michael for Bill. (Technical Difficulty)

Jim King -- Senior Vice President, Investor Relations & Corporate Affairs

This is Jim King. John, if we can put that caller back in the queue at the help us understand the question. We will be glad to take later. I think there's so much static on the line. (Technical Difficulty) let's do that.

Operator

Of course, sir. No problem. We will move to our next question from Chris Carey of Bank of America. Please go ahead, your line is open.

Chris Carey -- Bank of America -- Analyst

Testing, is this a Bank of America issue or can you hear me as well?

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Loud and clear.

Chris Carey -- Bank of America -- Analyst

All right. It's just the clarity in then. Okay. That's what you get. So I guess I was kind of hearing in the prepared remarks, maybe during the Q&A, I can't remember, that maybe Marvin and team going over to Lowe's has caused the change in strategy there, maybe more engagement, maybe a more aggressive approach to driving these product categories, maybe branded. I wonder if you can elaborate on that a little bit more?

James Hagedorn -- Chief Executive Officer and Chairman of the Board

I can'make it easy, yes. I was having a haircut this weekend and I live that road from (inaudible) me while I was in the chair at the barbershop on Saturday and said, why is Lowe's is looking so good. And I said, well, there is a new management team and this is what I would chalking it up to. It's a very merchant-oriented leadership team there who aims to compete and I view that is good for this business. And we're doing our best to be very fair to all retailers, but I would say Marvin and the team, Bill Boltz are doing really good work and they want to make an impact and if I said, you know, what is it all about. I would say, it's a very aggressive merchant culture that I think is healthy for this business. MIke, anything you would --

Michael Lukemire -- President & Chief Operating Officer

No, I think that you said it right. They're just being aggressive, their first market. They're competing.

Chris Carey -- Bank of America -- Analyst

Okay, makes sense. So obviously, the inventory fill was strong as you guys had expected and the POS is coming through in a pretty strong way and you have the kind of May overhang with being such a strong month. So I'm just trying to marry sort of the risk of working through some of this inventory and the consumption with the comments that you made about the potential to raise guidance when you update the market in June. So do you need POS to continue to be really strong in May in order to get reorders here or is there something else that you're seeing that would suggest that you can get that activity over the next month?

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Okay. So just a couple of points I'd throw out. One, I think pretty much at this point, Mike (inaudible) already ordered up, meaning he's got orders in-house, already to cover May. So then it is a matter of selling product off the shelf. So at the end of the day, it's going to be consumer takeaway that means either during May or beyond May where you add. Effectively where we're at is our feeling is if we can comp May, Randy will have good news in June.

So that's kind of the internal give and take of how do we manage this call, how do we manage expectations. I think we meaning, Randy, Mike and myself are kind of seeing how May goes, which is what customer POS look like. I was listening to news this morning on the way in and the May forecast for the East Coast, long-term forecast, whatever that is 30 days, looks very attractive for the East Coast. So, you know, I think we're in a good place and Randy will be willing and that kind of the challenge is can we comp May. If we do, that's going to be a good result for the year. I don't think we are feeling like there's a lot of risk to the expectations we set, put it that way. So I think we're comfortable where we are. I don't think unless it snows every weekend for rest of the year, I doubt we miss, but the challenge is are we want to call up and I think right now we're just saying, just give us a month and we will tell you.

Chris Carey -- Bank of America -- Analyst

Okay. And I'm conscious of where the call is in time. So just I'll get a quick question from here on, just on promotions in Hawthorne, I'm trying to understand maybe why you've been so promotional and more importantly why you think that going forward do you expect it to become less promotional. Thank you.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Why? I accused them of being gun shy and they are also red hot now. So the opposite of gun shy right now. And we have something to say in the industry and we're saying it. I think we -- I'll put myself in the operator at least bias which is somewhat a conflict with my operating finance boss. I think we've reached his tolerance level probably the end of this year for aggression when it comes to use of margin, really on both sides, which is on Hawthorne and on the consumer side, because generally when Mike and I come back from some place, we made a multi-deal to drive the business which Randy also kind of has a smile on his face, but I kind of -- I view it as something that will evaporate over time.

I think we have something to prove that this business will recover and we can show that, I think we have; that we can take share on Hawthorne, I think we have; and that we can develop the skill set in the professional horticulture market in cult jobs that partners will recognize us as a central to their business. I think we've done that and I think we're doing that on the consumer side as well. So, I think we're pushing Randy about as hard as we can. But all of us, including Chris, recognize that we're going to have to show some more profit discipline next year and beyond and we accept.

Randy Coleman -- Executive Vice President and Chief Financial Officer

Chris, the only thing I'd add is, Jim's taught me that once you've made the sale, it is nothing else to add. So, I want to thank him for representing me still while being through your question, so thank you.

Chris Carey -- Bank of America -- Analyst

Thank you for your answers.

Operator

We will now move on to our last question from Jason Rodgers of Great Lakes Review. Please go ahead, your line is open.

Jason Rodgers -- Great Lakes Review -- Analyst

Yes, thanks for taking the question. Just wanted to have a follow-up question on Hawthorne. You mentioned offering service packages with the durable and consumable sales. I was wondering what percent of Hawthrone sales are currently derived from service. Is there a recurring revenue opportunity here, just if you could provide some more information how services are bundled with that equipment sale with the large growers. Thanks.

Randy Coleman -- Executive Vice President and Chief Financial Officer

Yeah, so I probably should have phrased it differently. We have a tech services team that we deploy across pretty much the breadth of our business, really prioritizing our larger what we would consider kind of key accounts, particularly in Canada right now. It's not something that we've been charging for. I don't foresee us at least in the near term making that a revenue driver, it's more of a sales tool and it comes sort of bundled with using us as a supplier.

James Hagedorn -- Chief Executive Officer and Chairman of the Board

I wanted to just add how critical I think that is. This is a relatively new industry, particularly at the scale that you're talking about where customers like this in a single site could have tens of thousands of lights and they've got to combine that and grow the product that's of quality and predictable, all the stuff you'd expect and everybody's learning as they go. Our ability to step in as a major supplier with a highly professional tech support group that says, what's going on here, how can we help, what's not working. If you are one of the big LPs in Canada and something is not working, you need help and being a partner that can step in with experienced technical support, including R&D, sort of sales, lighting, et cetera, nutrients and say let's get them back up and running or solve a problem as quickly as possible and saying, it doesn't cost anything for that. All you got to do is buy our products. You buy our products, you'll get something that I don't think anybody else can offer for nothing. That's the model and this works right.

Randy Coleman -- Executive Vice President and Chief Financial Officer

Jason, this is Randy. I would just add, if you could meet the people that we have on this team, they are seasoned, they are knowledgeable and they are experienced, here to help, you become really impressed.

Jason Rodgers -- Great Lakes Review -- Analyst

Very good. Thank you

Operator

It appears there are no further questions at this time. I'd like to turn the conference to Mr. King for any additional or closing remarks.

Jim King -- Senior Vice President, Investor Relations & Corporate Affairs

All right. Thanks, John. That's all we've got today. If we've not gotten people's questions, please call me directly, that's 937-578-5622 and because we have not gotten enough plugs in yet this morning for John Anderson's conference, Randy and I would be there on June 6th to give you an update on where we stand year-to-date. Thanks for calling, everybody, and have a great day.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, you may now disconnect.

Duration: 77 minutes

Call participants:

Jim King -- Senior Vice President, Investor Relations & Corporate Affairs

James Hagedorn -- Chief Executive Officer and Chairman of the Board

Randy Coleman -- Executive Vice President and Chief Financial Officer

Bill Chappell -- SunTrust -- Analyst

Chris Hagedorn -- General Manager

Michael Lukemire -- President & Chief Operating Officer

Jon Andersen -- William Blair -- Analyst

Joe Altobello -- Raymond James -- Analyst

Unidentified Participant -- -- Analyst

Chris Carey -- Bank of America -- Analyst

Jason Rodgers -- Great Lakes Review -- Analyst

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