Question-and-Answer Session
Operator
(Operator Instructions)
Our first question comes from the line of Bill Chappell.
Bill Chappell – SunTrust Robinson Humphrey
On the divestiture program you said there are no longer active discussions for the Garden business. Can you tell us if there are any active discussions for any of the businesses at this point?
Kent Hussey
I think you saw a press release that was put out by a major hedge fund that they wanted to take a look at one of our businesses. Clearly they did not look at Home and Garden business. Let me just finish on that point that there is some activity still underway and discussions that are ongoing but at this stage in the game there is nothing that I can tell you on that. Nothing to report. If and when anything should materialize clearly we would make a public disclosure, but for right now that is the only activity underway.
Bill Chappell – SunTrust Robinson Humphrey
My follow-up?on the fertilizer side, we heard last night that Scotts said they might be losing share. Are you seeing significant market share gains in that category? Can you give us any idea of what urea is in terms of your commodity costs as far as costs of goods sold?
Kent Hussey
If you take urea, pot ash and dapth¸ those three together are the major raw material inputs that go into fertilizer and I can’t tell you but I’m sure it is the majority of the cost of sales. I just want to remind you that fertilizer while it is an important product line to us is only about 25% of our revenue. I believe it is a much bigger percentage of revenue for Scotts so it is a potentially bigger issue for them.
In terms of market share gains, there are lies, damn lies and market share. Our management says that we are?I’ll just use the term ?outpacing the category? with our key customers so that tells me that things are going fairly well for our fertilizer business this year. We think that may be somewhat due to the fact consumers may be trading down from the expensive premium brands to value brands and we think that is a good thing. We think they’ll discover when they do that our product is as good as that premium brand and they may not necessarily need to go back to paying those higher prices in the future.
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