Good day, and welcome to The Scotts Miracle-Gro Company annual meeting. I would now like to turn the conference over to Jim Hagedorn, Chairman and Chief Executive Officer. Please go ahead.
Good morning, everyone. I'm Jim Hagedorn, Chairman and Chief Executive Officer of The Scotts Miracle-Gro Company. Welcome to our annual meeting of shareholders. Before we get into today's business, I want to address where we find ourselves and what's next for our company. Over the past few years, we've been focusing on improving our capital structure and creating a healthy balance sheet. The result of this work has been consistent improvement in our performance. This includes significant free cash flow generation, meaningful margin improvement, and solid EBITDA growth. We've paid down over $1.5 billion in debt and significantly improved our leverage, creating a path where we're back to historic norms of leverage in the threes later this fiscal year. I envision a time in the very near future where talk of leverage each quarter becomes a thing of the past.
At the same time, we're investing heavily in our brand and our business. We're bringing forth new innovation and have shifted how we market our products to reach new and emerging customers. E-commerce and the digital space are where we are driving more growth and seeing many more opportunities. From an operational perspective, we've taken cost out of the business through automation, AI, and other technologies that led to efficiencies and optimization of our supply chain. We're committed to being the lowest-cost, high-performing manufacturer. All of our work is aimed at creating more value for our company and our shareholders. In my view, we're back to being that stable consumer product stock in an investor portfolio, and we have upside to deliver outsized shareholder returns. As we look to the future, we're taking a disciplined approach to growth with some exciting value creation strategies.
Our incentive structure is tied to the successful execution of our fiscal 2026 operating plan and our strategies. It aligns with the interests of all of our shareholders. We have an optimistic view of fiscal 2026 and beyond, and I encourage you to listen to our first quarter earnings call on Wednesday for details. In addition to reviewing results, we'll provide an in-depth discussion as to where we're headed. And by the way, it's all positive. For our meeting today, I want to welcome and thank our board of directors who are also present. Our board is composed of the following members: Edith Avilés, Roberto Candelino, Dave Evans, Adam Hanft, Steve Johnson, Mark Kingdon, Kate Hagedorn-Littlefield, Nick Miaritis, Scott Miller, Brian Sandoval, Peter Shumlin, and myself. This group actively oversees me and the management team.
Their experiences vary among finance, government, strategic planning, technology, corporate leadership, advertising, consumer marketing, and the United States military, among others. Our shareholders are extremely fortunate to be represented by these talented and engaged directors. Moving on, we will tend to the business in our proxy statement. When finished, we will answer questions that shareholders have asked online. If you have a question, please post it over the next several minutes if you haven't already. If you are a shareholder who has not yet voted or a shareholder looking to change your vote, you may do so now by clicking the voting button on the web portal and following the instructions. I will now turn things over to Dimiter Todorov, our Chief Legal Officer and Corporate Secretary.
Thank you, Jim. I'd like to add my welcome to the annual meeting of shareholders and introduce Brad Chelton, our Vice President of Investor Relations and Treasurer, Amanda Rico, our Senior Vice President and Chief Human Resources Officer, Mark Scheiwer, our Chief Financial Officer and Chief Accounting Officer, Tony Carideo from the Carideo Group, who will serve as our Inspector of Elections, and Greg Coy, Lead Client Service Partner at Deloitte & Touche LLP, our Outside Independent Auditor. This is the formal part of our meeting where we address the matters that are set forth in the proxy statement sent to our shareholders. When we have finished, I'll turn the podium back over to Jim for Q&A. Only validated shareholders will be able to ask questions in the designated field on the web portal. Out of consideration for others, I ask that you please limit yourself to one question.
This meeting is being recorded. However, no one attending via webcast is permitted to use any audio recording devices. During the course of our discussions this morning, we may make forward-looking statements regarding the company's future performance. I want to remind everyone that actual results could differ materially from what we discuss based on a variety of risk factors. We encourage investors to familiarize themselves with those risk factors, which are spelled out in detail in our Form 10-K, which is filed with the SEC. We can now proceed with the business of our meeting. First, with regard to last year's annual meeting of shareholders, I'd like the record to reflect the minutes of that meeting have been filed with a record to the company. Next, Brad Chelton will confirm our mailing procedures and register shareholders.
Thank you, Dimiter. I would like to present the affidavit of Broadridge Financial Solutions, pursuant to which Broadridge has confirmed that the notice of this meeting, the proxy statement, the form of proxy, and the 2025 annual report were timely mailed to the shareholders of the company.
Thanks, Brad. The affidavit and proxy materials are directed to be filed with a record to the company.
I would also like to present a list of the registered shareholders of the company's common shares as of the close of business on December 1st, 2025, the record date for this meeting.
Thank you. The list of registered shareholders is directed to be filed with a record to the company. Next, I'd like to offer a final opportunity to any shareholder who has not yet voted or who wishes to change their vote to do so by clicking on the voting button on the web portal and following the instructions there. Shareholders who have sent in proxies or voted via telephone or the internet and do not want to change their vote do not need to take any further action. Now that everyone has had an opportunity to vote, I now declare the polls of the annual meeting closed. Mr. Carideo, please present your report regarding the number of common shares present at today's meeting.
Mr. Todorov, a minimum of 52,593,350 or 90.66% of the common shares are present in person or by proxy.
Thank you, Mr. Carideo. The proxies, substitutions of proxies, and ballots presented to the meeting are hereby ordered to be filed with the records of the company. According to Mr. Carideo's report, a quorum is present so that business may properly be conducted. As set forth in the proxy statement, the business of this meeting includes four proposals. Proposal number one is to elect four directors, each to serve for a three-year term expiring at the annual meeting of shareholders to be held in the year 2029. Proposal number two is to conduct an advisory vote on the compensation of the company's named executive officers. Proposal number three is to ratify the audit committee's selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending September 30th, 2026.
Proposal number four is to approve an amendment and restatement of the Scotts Miracle-Gro Company long-term incentive plan to, among other things, increase the maximum number of common shares available for grant to participants. Proceeding to proposal number one, I recognize Amanda Rico for the purpose of nominating the four directors.
Thank you, Dimiter. I hereby move that the following persons be elected as directors of the company, each to hold office until the annual meeting of shareholders to be held in the year 2029, and until their successors are duly elected and qualified, or until their earlier death, resignation, or removal. Jim Hagedorn, Edith Avilés, Rob Candelino, and Mark Kingdon.
Is there a second to the motion?
I second the motion.
As a person appointed as an official proxy, I report that I have voted in accordance with the proxies received from shareholders. Mr. Carideo, may I have your report of the vote regarding the election of the four directors?
Mr. Todorov, I report that each of the four directors for election as director received not less than 43,525,317 votes.
I hereby declare that Jim Hagedorn, Edith Avilés, Rob Candelino, and Mark Kingdon have been duly elected as directors of the company. The meeting will now proceed to consideration of proposal number two. I recognize Amanda Rico for the purpose of presenting the proposal.
Thank you, Dimiter. I hereby move that shareholders approve on an advisory basis the compensation of the company's named executive officers.
Is there a second to the motion?
I second the motion.
As a person appointed as an official proxy, I report that I have voted in accordance with the proxies received from shareholders. Mr. Carideo, may I have your report of the advisory vote regarding the compensation of the company's named executive officers?
Mr. Todorov, I report that not less than 339,606,777 advisory votes were received for approval of the compensation of the company's named executive officers.
I hereby declare that the shareholders have approved on an advisory basis the compensation of the company's named executive officers. The meeting will now proceed to consideration of proposal number three. I recognize Mark Scheiwer for the purpose of presenting the proposal.
Thank you, Dimiter. I hereby move that the audit committee selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for fiscal year ending September 30th, 2026, be ratified.
Is there a second to the motion?
I second the motion.
As a person appointed as an official proxy, I report that I have voted in accordance with the proxies received from shareholders. Mr. Carideo, may I have your report of the vote regarding the ratification of the audit committee selection of Deloitte & Touche LLP as the company's independent registered public accounting firm?
Mr. Todorov, I report that ratification of the audit committee selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending September 30th, 2026, received not less than 51,007,262 votes.
I hereby declare that the audit committee selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending September 30th, 2026, has been ratified. The meeting will now proceed to consideration of proposal number four. I recognize Amanda Rico for the purpose of presenting the proposal.
Thank you, Dimiter. I hereby move that shareholders approve an amendment and reinstatement of the Scotts Miracle-Gro Company long-term incentive plan to, among other things, increase the maximum number of common shares available for grant to participants.
Is there a second to the motion?
I second the motion.
As a person appointed as an official proxy, I report that I have voted in accordance with the proxies received from shareholders. Mr. Carideo, may I have your report of the vote regarding the amendment and restatement of the Scotts Miracle-Gro Company's long-term incentive plan?
Mr. Todorov, I report that not less than 30,015,373 votes were received for approval of the amendment and restatement of the Scotts Miracle-Gro Company's long-term incentive plan.
I hereby declare that the shareholders have approved the amendment and restatement of The Scotts Miracle-Gro Company's long-term incentive plan. Mr. Chairman, this concludes the formal business portion of our meeting.
Thank you, Dimiter. Now I would like to open things up for shareholder questions and comments. Please note, I will attempt to answer as many questions or comments as time allows, but only questions or comments that are germane to the meeting will be addressed. Any questions that are not germane to today's meeting will be addressed offline, outside of this meeting, with the individual who poses such a question.
Ladies and gentlemen, there have been no questions asked.
Thank you very much for your continued support of the Scotts Miracle-Gro Company. There being no further business to come before this meeting, the 2026 annual meeting of shareholders of the Scotts Miracle-Gro Company is now adjourned.