FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended December 30, 1995

                                      OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ____________ to ____________

                        Commission file number 1-11593

                              THE SCOTTS COMPANY
            (Exact name of registrant as specified in its charter)

                  OHIO                                  31-1199481
    (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)

                             14111 Scottslawn Road
                            MARYSVILLE, OHIO 43041
                   (Address of principal executive offices)
                                  (Zip Code)

                                (513) 644-0011
             (Registrant's telephone number, including area code)

                                   NO CHANGE
     (Former name, former address and former fiscal year, if changed since
                                 last report.)

Indicate by check mark whether  registrant (1) has filed all reports  required
to be filed by  Section  13 or 15(d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was  required to file such  reports),  and (2) has been subject to such filing
requirements for the past 90 days.

                                          Yes   X     No


Indicate the number of shares  outstanding of each of the issuer's  classes of
common stock as of the latest practicable date.

             18,883,994                   Outstanding at February 9, 1996
- -------------------------------------    ---------------------------------
 Common Shares, voting, no par value


                              Page 1 of 18 pages
                           Exhibit Index at page 16


                      THE SCOTTS COMPANY AND SUBSIDIARIES

                                     INDEX


                                                                      PAGE NO.

Part  I.  Financial Information:

  Item 1.  Financial Statements
           Consolidated Statements of Income - Three month
           periods ended December 31, 1994 and December 30, 1995 ....... 3

           Consolidated Statements of Cash Flows - Three month
           periods ended December 31, 1994 and December 30, 1995 ....... 4

           Consolidated Balance Sheets -
           December 31, 1994, December 30, 1995 and September
           30, 1995 .................................................... 5

           Notes to Consolidated Financial Statements ................. 6-10

  Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations ............. 11-13


Part II.  Other Information

  Item 1.  Legal Proceedings .......................................... 14

  Item 6.  Exhibits and Reports on Form 8-K ........................... 14


Signatures ............................................................ 15


Exhibit Index ......................................................... 16

                                    Page 2


                        PART I - FINANCIAL INFORMATION
                         ITEM 1. FINANCIAL STATEMENTS


                      THE SCOTTS COMPANY AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                    (in thousands except per share amounts)




                                                          Three Months Ended
                                                     December 31     December 30
                                                         1994           1995

Net sales .....................................       $ 98,019        $ 117,928
Cost of sales .................................         53,520           64,714
                                                      --------        ---------

Gross profit ..................................         44,499           53,214
                                                      --------        ---------

Marketing .....................................         22,397           27,590
Distribution ..................................         14,540           16,465
General and administrative ....................          5,967            8,057
Research and development ......................          2,765            2,663
Other expenses, net ...........................            995            4,469
                                                      --------        ---------

Loss from operations ..........................         (2,165)          (6,030)

Interest expense ..............................          5,694            6,601
                                                      --------        ---------

Loss before income tax benefit ................         (7,859)         (12,631)

Income tax benefit ............................         (3,261)          (5,457)
                                                      --------        ---------

Net loss ......................................       $ (4,598)       $  (7,174)
                                                      ========        =========

Net loss per common share .....................       $   (.25)       $    (.51)
                                                      ========        =========

Common shares used in net loss
  per common share computation ................         18,667           18,689
                                                      ========        =========

See Notes to Consolidated Financial Statements

                                    Page 3



                      THE SCOTTS COMPANY AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                (in thousands)


                                                            Three Months Ended
                                                       December 31   December 30
                                                          1994          1995
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ...........................................    $ (4,598)    $ (7,174)
  Adjustments to reconcile net loss to net
cash used in operating activities:
      Depreciation and amortization ..................       5,801        7,280
      Equity in income of unconsolidated .............        --           (191)
          business
      Postretirement benefits ........................         166           45
      Net increase in certain components of
          working capital ............................     (45,543)     (81,432)
      Net increase in other assets and
          liabilities and other adjustments ..........         354          291
                                                          --------     --------

         Net cash used in operating activities .......     (43,820)     (81,181)
                                                          --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES
  Investment in plant and equipment, net .............      (5,012)      (3,593)
  Investment in affiliate ............................        (250)        --
                                                          --------     --------

         Net cash used in investing activities .......      (5,262)      (3,593)
                                                          --------     --------

CASH FLOWS FROM FINANCING ACTIVITIES
  Payments on term and other debt ....................        (727)        (182)
  Revolving lines of credit and bank line of .........      44,646       88,474
     credit, net
  Dividends on preferred stock .......................        --         (2,436)

         Net cash provided by financing activities ...      43,919       85,856
                                                          --------     --------

Effect of exchange rate changes on cash ..............        (122)        (207)
                                                          --------     --------

Net increase (decrease) in cash ......................      (5,285)         875

Cash at beginning of period ..........................      10,695        7,028
                                                          --------     --------

Cash at end of period ................................    $  5,410     $  7,903
                                                          ========     --------

SUPPLEMENTAL CASH FLOW INFORMATION
  Interest paid, net of amount capitalized ...........    $  2,082     $  3,343
  Income taxes paid ..................................    $    890     $  1,364


See Notes to Consolidated Financial Statements

                                    Page 4


                      THE SCOTTS COMPANY AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
                                (in thousands)

                                    ASSETS

                                          December 31  December 30  September 30
                                              1994        1995         1995

Current Assets:
  Cash and cash equivalents .............   $   5,410    $   7,903    $   7,028
  Accounts receivable, less allowances
   of $3,213, $3,381 and $3,406, ........     128,454      196,373      176,525
      respectively
  Inventories, net ......................     145,095      184,629      143,953
  Prepaid and other assets ..............      17,240       20,942       21,659
                                            ---------    ---------    ---------
   Total current assets .................     296,199      409,847      349,165
                                            ---------    ---------    ---------

Property, plant and equipment, net ......     141,556      147,787      148,754
Trademarks, net .........................        --         88,688       89,250
Other intangibles, net ..................      27,485       23,513       24,421
Goodwill ................................     103,926      178,794      179,988
Other assets ............................       4,957       15,883       15,772
                                            ---------    ---------    ---------

   Total Assets .........................   $ 574,123    $ 864,512    $ 807,350
                                            =========    =========    =========

                     LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
  Revolving credit line .................   $  68,062    $  36,071    $      97
  Current portion of term debt ..........       5,540          417          421
  Accounts payable ......................      53,565       54,414       63,207
  Other current liabilities .............      24,000       32,063       36,987
  Accrued taxes .........................      11,065       11,058       18,728
                                            ---------    ---------    ---------
   Total current liabilities ............     162,232      134,023      119,440
                                            ---------    ---------    ---------

Term debt, less current portion .........     217,618      324,368      272,025
Postretirement benefits other than ......      27,180       27,204       27,159
   pensions
Other liabilities .......................       3,492        5,152        5,209
                                            ---------    ---------    ---------

   Total Liabilities ....................     410,522      490,747      423,833
                                            ---------    ---------    ---------

Commitments and Contingencies

Shareholders' Equity:
  Class A Convertible Preferred Stock, ..        --        177,255      177,255
     no par value
  Common Shares .........................         211          211          211
  Capital in excess of par value ........     193,418      207,557      207,551
  Retained earnings .....................       9,277       25,789       35,399
  Cumulative translation gain ...........       2,136        3,934        4,082
  Treasury stock, 2,415 shares in 1994
   and 2,388 shares in 1995 at cost .....     (41,441)     (40,981)     (40,981)
                                            ---------    ---------    ---------
   Total Shareholders' Equity ...........     163,601      373,765      383,517
                                            ---------    ---------    ---------

   Total Liabilities and Shareholders' ..   $ 574,123    $ 864,512    $ 807,350
      Equity                                =========    =========    =========

See Notes to Consolidated Financial Statements

                                    Page 5


                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements



1.  ORGANIZATION AND BASIS OF PRESENTATION

    The Scotts Company ("Scotts") and its wholly owned  subsidiaries,  Hyponex
    Corporation   ("Hyponex"),   Republic   Tool   and   Manufacturing   Corp.
    ("Republic"),  Scotts-Sierra Horticultural Products Company ("Sierra") and
    Scotts' Miracle-Gro Products,  Inc.  ("Miracle-Gro"),  (collectively,  the
    "Company"),  are  engaged  in the  manufacture  and sale of lawn  care and
    garden  products.   All  material  intercompany   transactions  have  been
    eliminated.

    The  consolidated  balance sheets as of December 31, 1994 and December 30,
    1995,  the related  consolidated  statements of income for the three month
    periods  ended  December  31, 1994 and  December  30, 1995 and the related
    consolidated  statements  of cash flows for the three month  periods ended
    December  31, 1994 and December 30, 1995 are  unaudited;  however,  in the
    opinion of management,  such financial  statements contain all adjustments
    necessary for the fair  presentation of the Company's  financial  position
    and results of operations.  Interim results  reflect all normal  recurring
    adjustments and are not necessarily indicative of results for a full year.
    The interim  financial  statements and notes are presented as specified by
    Regulation S-X of the Securities  Exchange Act of 1934, and should be read
    in conjunction  with the financial  statements and  accompanying  notes in
    Scotts' fiscal 1995 Annual Report on Form 10-K.

    The  financial  statements  for the three month period ended  December 31,
    1994 have been  revised  to  reflect  a change  in the  timing of  expense
    recognition related to a promotional allowance offered to retail customers
    introduced  for the first time in fiscal 1995. The impact of this revision
    was on timing of marketing  promotional  expense  recognition in the first
    three  quarters  of Scotts'  1995  fiscal year and did not impact the full
    fiscal year results of operations.

2.  INVENTORIES
    (in thousands)

    Inventories, net of provisions of $6,101, $6,189 and $6,711, consisted of:

                          December 31      December 30     September 30
                              1994             1995             1995
                            --------         --------         ------

    Finished Goods      $    85,314       $  112,981      $    71,431
    Raw Materials            59,781           71,648           72,522
                           --------         --------         --------

                         $  145,095       $  184,629       $  143,953
                            =======          =======          =======


                                    Page 6


                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements


3.  ACQUISITIONS

    Effective May 19, 1995, the Company completed the merger transactions with
    Stern's  Miracle-Gro   Products,   Inc.  and  affiliated   companies  (the
    "Miracle-Gro Companies").  The ultimate surviving corporation is now known
    as Scotts' Miracle-Gro Products, Inc. (all further references will be made
    as   "Miracle-Gro").   Miracle-Gro   is  engaged  in  the   marketing  and
    distribution of plant foods and lawn and garden products  primarily in the
    United States, Canada and Europe.

    The  following  pro  forma  results  of  operations  give  effect  to  the
    Miracle-Gro  Companies  acquisition  as if it had  occurred  on October 1,
    1993.

         (in thousands, except per share amounts)

                                         Three Months Ended
                                             December 31,
                                                 1994

         Net sales                            $ 109,906
                                              =========

         Net loss                             $  (3,769)
                                              =========

         Net loss per common share            $   (0.33)
                                              =========

    For  purposes of  computing  net loss per common  share,  Scotts'  Class A
    Convertible  Preferred Stock is considered a common stock equivalent.  Pro
    forma  primary  net loss per common per share for the three  months  ended
    December 31, 1994 is calculated  using the weighted  average common shares
    outstanding for Scotts of 18,667,064. The computation of pro forma primary
    net loss per common share  assumed  reduction  of earnings  for  preferred
    dividends and no conversion of the Class A Convertible Preferred Stock.

    The pro forma  information  provided  does not purport to be indicative of
    actual  results  of  operations  if  the  merger   transactions  with  the
    Miracle-Gro  Companies  had  occurred  as of October  1, 1993,  and is not
    intended to be indicative of future results or trends.

4.  FOREIGN EXCHANGE INSTRUMENTS

    The Company enters into forward foreign  exchange  contracts and purchased
    currency options to hedge its exposure to fluctuations in foreign currency
    exchange  rates.  These  contracts  generally  involve the exchange of one
    currency  for a second  currency at some future  date.  Counterparties  to
    these  contracts  are major  financial  institutions.  Gains and losses on
    these  contracts   generally  offset  gains  and  losses  on  the  assets,
    liabilities and transactions being hedged.

    Realized and unrealized  foreign  exchange gains and losses are recognized
    and offset foreign  exchange gains or losses on the underlying  exposures.
    Unrealized gains and losses that are designated and effective as hedges on
    such transactions are deferred and recognized in income in the same period
    as the hedged  transactions.  The net  unrealized  gain  deferred  totaled
    $6,000 at December 30, 1995.



                                    Page 7


                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements


    At December  30,  1995,  the  Company's  European  operations  had foreign
    exchange risk in various  European  currencies  tied to the Dutch Guilder.
    These currencies are the Australian  Dollar,  Belgian Franc,  German Mark,
    Spanish Peseta,  Italian Lira,  French Franc,  British Pound and the U. S.
    Dollar.  The Company's U. S. operations have foreign exchange rate risk in
    the Canadian  Dollar,  the Dutch  Guilder and the British  Pound which are
    tied to the U. S.  Dollar.  As of  December  30,  1995,  the  Company  had
    outstanding  forward foreign  exchange  contracts with a contract value of
    approximately  $35.4 million and outstanding  purchased  currency  options
    with a contract value of approximately $14.8 million. These contracts have
    maturity dates ranging from January 3, 1996 to October 2, 1996.

5.  ACCOUNTING ISSUES

    In December 1995, the Financial Accounting Standards Board issued SFAS No.
    123,   "Accounting  for  Stock-Based   Compensation"   which  changes  the
    measurement,   recognition   and  disclosure   standards  for  stock-based
    compensation.  Management is currently  evaluating  the provisions of SFAS
    No.  123 and at this  time,  the  effect of  adopting  SFAS No. 123 on the
    results  of  operations   and  the  method  of  disclosure  has  not  been
    determined.

6.  OTHER EXPENSE

    Other expenses consisted of the following for the three months ended:

                                      December 31,  December 30,

                                         1994          1995
                                         ------        ----

            Foreign currency loss     $   362      $    180
            Facility closings               -           504
            Amortization                  853         2,172
            Personnel reduction                       1,600
            charge
            Royalty income               (140)         (142)
            Equity in income of
                unconsolidated              -          (191)
            businesses
            Other                         (80)          346
                                         ----        ------

            Total                     $   995       $ 4,469
                                          ===         =====


7.  NET LOSS PER COMMON SHARE

    Net loss per  common  share is based on the  weighted  average  number  of
    common shares and common share  equivalents  (stock  options,  convertible
    preferred stock and warrants) outstanding each period.



                                    Page 8


                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements


    The following table presents  information  necessary to calculate net loss
per common share.
 
                                             THREE MONTHS ENDED
              (in thousands)              December 31, December 30,
                                             1994         1995

              Net loss ...................   $ (4,598)   $ (7,174)
              Preferred stock dividend ...       --        (2,436)
                                             --------    --------
              Net loss applicable to
                  common shares ..........   $ (4,598)   ($ 9,610)
                                             ========    ========
              Common shares outstanding:
              Weighted average outstanding     18,667      18,689
                                             ========    ========

              Net loss per common share ..   $   (.25)   $   (.51)
                                             ========    ========

    Fully  diluted net loss per common share is  considered  to be the same as
    primary net loss per common share as it was not materially  different from
    primary net loss per common share.

8.  CONTINGENCIES

    The Company is involved in various  lawsuits and claims which arise in the
    normal  course of  business.  In the opinion of  management,  these claims
    individually and in the aggregate are not expected to result in a material
    adverse  effect  on  the  Company's   financial  position  or  results  of
    operations,  however,  there can be no assurance that future  quarterly or
    annual  operating  results  will  not  be  materially  affected  by  final
    resolution of these matters. The following details the more significant of
    these matters.

    In September  1991, the Company was  identified by the Ohio  Environmental
    Protection  Agency (the "Ohio  EPA") as a  Potentially  Responsible  Party
    ("PRP") with  respect to a site in Union  County,  Ohio (the  "Hershberger
    site") that has allegedly been contaminated by hazardous  substances whose
    transportation,  treatment  or disposal  the Company  allegedly  arranged.
    Pursuant to a consent order with the Ohio EPA, the Company,  together with
    four  other  PRP's   identified  to  date,   investigated  the  extent  of
    contamination  in the Hershberger  site. The results of the  investigation
    were that the site  presents  a low  degree of risk and that the  chemical
    compounds  which  contribute  to the  risk are not  compounds  used by the
    Company.  Accordingly,  the Company has elected not to  participate in any
    remediation  which might be required at the site. As a result of the joint
    and several  liability  of PRP's,  the Company may be subject to financial
    participation  in the  costs of the  remediation  plan,  if any.  However,
    management does not believe any such obligations  would have a significant
    adverse  effect  on the  Company's  results  of  operations  or  financial
    condition.

    In July 1990,  the  Philadelphia  district of the Army Corps of  Engineers
    directed  that peat  harvesting  operations be  discontinued  at Hyponex's
    Lafayette, New Jersey facility, and the Company complied. In May 1992, the
    Department of Justice in the U. S. District  Court for the District of New
    Jersey,  filed suit seeking a permanent injunction against such harvesting
    at that facility and civil  penalties.  The  Philadelphia  District of the
    Corps has taken the position that peat harvesting activities there require

                                    Page 9


                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements

    a permit under Section 404 of the Clean Water Act. If the Corps'  position
    is upheld, it  is  possible  that  further  harvesting  of peat  from this
    facility  would  be  prohibited. The Company is defending this suit and is
    asserting  a  right to recover its  economic  losses  resulting  from  the
    government's  actions. Management  does not  believe  that the  outcome of
    this case will have a material adverse effect on the Company's  operations
    or  its  financial condition. Furthermore, management believes the Company
    has  sufficient  raw  material  supplies  available  such  that service to
    customers will not be adversely affected by continued closure of this peat
    harvesting operation.

    Sierra is a defendant in a private  cost-recovery  action  relating to the
    Novak  Sanitary  Landfill,  located  near  Allentown,   Pennsylvania.   By
    agreement  with W. R.  Grace-Conn.,  Sierra's  liability  is  limited to a
    maximum of $200,000 with respect to this site.  The  Company's  management
    does not believe that the outcome of this  proceeding will have a material
    adverse effect on its financial condition or results of operations.

    On January 30, 1996,  the United States  Environmental  Protection  Agency
    (the "U. S. EPA") served a Complaint and Notice of Opportunity for Hearing
    upon  Sierra's  wholly-owned  subsidiary,  Scotts-Sierra  Crop  Protection
    Company ("Crop  Protection").  The Complaint  alleges labeling  violations
    under the Federal  Insecticide,  Fungicide and  Rodenticide  Act ("FIFRA")
    during  1992 and 1993.  It  proposes  penalties  totalling  $785,000,  the
    maximum  allowable  under FIFRA  according to  management's  calculations.
    Based upon Crop  Protection's  good faith  compliance  actions and FIFRA's
    provisions for  "gravity-based"  penalty  reductions,  management believes
    Crop Protection's maximum liability to be $200,000, which has been accrued
    in the financial statements. The Company does not believe that the outcome
    of this  proceeding  will have a material  adverse effect on its financial
    condition or results of operations.

    During 1993 and 1994, Stern's  Miracle-Gro  Products,  Inc.  ("Miracle-Gro
    Products")  discussed  with  Pursell  Industries,   Inc.  ("Pursell")  the
    feasibility  of forming a joint  venture  to produce  and market a line of
    slow-release lawn food, and in October 1993,  signed a non-binding  "heads
    of agreement." After the merger  transactions  between the Company and the
    Miracle-Gro  Companies were announced,  Pursell  demanded that Miracle-Gro
    Products  reimburse it for monies allegedly spent by Pursell in connection
    with the proposed project.  Because Miracle-Gro  Products does not believe
    that any such  monies  are due or that any  such  joint  venture  ever was
    formed, on February 10, 1995, it instituted an action in the Supreme Court
    of the State of New York, STERN'S  MIRACLE-GRO  PRODUCTS,  INC. V. PURSELL
    INDUSTRIES, INC. Index No. 95-004131 (Nassau Co.) (the "New York Action"),
    seeking  declarations that, among other things,  Miracle-Gro Products owed
    no monies to Pursell  relating to the  proposed  project and that no joint
    venture was formed.  Pursell moved to dismiss the New York Action in favor
    of the Alabama action described below,  which motion was granted August 7,
    1995.

    On March 2,  1995,  Pursell  instituted  an  action in the  United  States
    District Court for the Northern District of Alabama,  PURSELL  INDUSTRIES,
    INC. V. STERN'S MIRACLE-GRO PRODUCTS,  INC.,  CV-95-C-0524-S (the "Alabama
    Action"),  alleging,  among other things, that a joint venture was formed,
    that  Miracle-Gro  Products  breached an alleged joint  venture  contract,
    committed  fraud,  and breached an alleged  fiduciary duty owed Pursell by
    not informing Pursell of negotiations  concerning the merger transactions.
    On December 18, 1995,  Pursell  filed an amended  complaint in the Alabama
    Action in which Scotts was named as an  additional  party  defendant.  The
    amended complaint  contains a number of allegations and seeks compensatory
    damages in excess of $10 million,  punitive damages of $20 million, treble
    damages  as  allowed  by law and  injunctive  relief  with  respect to the
    advertising and trade dress allegations. The Company does not believe that
    the amended  complaint has any merit and intends to vigorously defend that
    action.
                                    Page 10


               ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following  discussion  should be read in conjunction with the Consolidated
Financial Statements of the Company included elsewhere in this report.

Results of Operations

Three  Months Ended  December 30, 1995 versus Three Months Ended  December 31,
1994 (restated)

Net  sales  increased  to  $117.9  million,  up 20.3%.  The  increase  is  at-
tributed  to  additional  unit  sales volume which  increased  sales 16.7% and
increases in average selling prices of approximately 3.6%. Increased purchases
from the marketing  program  incentivizing  retailers to purchase their spring
requirements  early ($13.7  million) and the inclusion of  Miracle-Gro  ($13.1
million)  were the primary  factors of the sales volume  gain.  On a pro forma
basis, including Miracle-Gro, net sales increased by $8.0 million or 7.3%.

Consumer  Business  Group  net  sales  increased  by  37.5%  to $76.4 million.
The increase is  attributed to  additional  unit sales volume which  increased
sales 29.8% and increases in average  selling  prices of  approximately  7.7%.
Sales increased in all categories including fertilizers,  spreaders and garden
products.  Increased  purchases from the retailer  incentive program discussed
above ($13.7  million) and the inclusion of Miracle-Gro  ($13.1  million) were
the primary factors of the sales volume gain.  Professional Business Group net
sales  decreased 6.4% to $26.1 million.  The decrease was a result of the loss
of exclusivity of an advanced control chemistry and a decrease in Horticulture
due to competitive  pressures.  International sales increased by 5.6% to $15.4
million. The increase resulted primarily from increased sales volume in Canada
and the Pacific Rim.

Cost of sales represented 54.9% of net sales, nearly flat compared to 54.6% of
net sales last year.

Operating expenses increased  approximately 27% due partially to the inclusion
of  Miracle-Gro.   Marketing   expenses   increased  23.2%  due  to  increased
promotional  allowances to retailers and increased  advertising.  Distribution
costs  increased  13.2% as a result  of  higher  sales  volume  and  increased
warehousing   costs  partially   offset  by  lower   distribution   costs  for
Miracle-Gro,   and  as  a  result  of   favorable   sales  mix.   General  and
administrative expenses increased 35% due to the inclusion of Miracle-Gro.  In
addition, a $1.6 million charge for personnel  reductions,  goodwill and other
amortization  of $1.1  million  related to the  Miracle-Gro  Companies  merger
transactions  and a $.5 million  charge for closed  facilities  consisting  of
three composting sites and the Scotts U.K. distribution  operation resulted in
a $3.5 million increase in "other expenses, net."

Interest  expense  increased  15.9%.  The increase was caused  primarily by an
increase in  borrowing  levels  (13.5%)  principally  to support  higher sales
levels recorded in the past six months.

The Company's  effective tax rate increased from 41.5% to 43.2% in 1996.  This
increase results  primarily from an increase in nondeductible  amortization of
intangible assets discussed above.

Net loss of $7.2  million  increased  by $2.6  million  from  1995.  Among the
significant  items  impacting  1996 results were the inclusion of  Miracle-Gro
which increased  sales and marketing  expenses,  increased  revenues offset by
higher benefit costs, the $1.6 million charge for personnel reduction,  higher
interest expense and higher tax rates as discussed more fully above.

                                    Page 11


Financial Position as of December 30, 1995

Current  assets of $409.8  million  increased by $60.7  million  compared with
current  assets at  September  30, 1995 and by $113.6  compared  with  current
assets at December 31, 1994. The increase  compared with September 30, 1995 is
primarily attributable to the seasonal nature of the Company's business,  with
inventory and accounts  receivable  levels  generally being higher in December
relative to September. In addition,  international  inventories increased. The
increase  compared  with December 31, 1994 was due in part to the inclusion of
Miracle-Gro's current assets which amounted to $38.7 million. The increase was
also caused by higher receivables  associated with sales increases in the past
six months and to higher inventory levels.

Current liabilities of $134.0 million increased by $14.6 million compared with
current  liabilities  at September  30, 1995 and  decreased  by $28.2  million
compared with current  liabilities at December 31, 1994. The increase compared
with  September  30,  1995  is  caused,  in  part,  by  increased   short-term
borrowings,  offset by lower trade payables and accrued expenses. The decrease
compared with December 31, 1994 is caused by a decrease in short-term debt due
to the terms of the Fourth Amended and Restated Credit  Agreement (the "Credit
Agreement")  dated  March 17,  1995,  which  requires  the  Company  to reduce
revolving  credit  borrowing to no more than $225  million for 30  consecutive
days each year as compared to $30 million prior to the amendment.

Capital  expenditures for the year ended September 30, 1996 are expected to be
approximately  $28.0 million.  The Credit  Agreement  restricts the amount the
Company may spend on capital  expenditures  to $50 million per year for fiscal
1996 and each year  thereafter.  These expected capital  expenditures  will be
financed with cash provided by operations and utilization of available  credit
facilities.

Long-term  debt  increased by $52.3 million  compared with  long-term  debt at
September 30, 1995 and by $106.8  compared with long-term debt at December 31,
1994. The increase as compared to September 30, 1995 was to support  increased
working capital and capital  expenditures.  The increase  compared to December
31,  1994 was  attributable  to the  change in terms of  borrowings  under the
Credit Agreement discussed above ($31.6 million) and the remaining increase in
borrowings was to support increased working capital and capital expenditures.

Shareholders' equity decreased $9.8 million compared with shareholders' equity
at  September  30,  1995  and  increased  by  $210.2  million   compared  with
shareholders'  equity  at  December  31,  1994.  The  decrease  compared  with
September 30, 1995  reflects the net loss for the three months ended  December
30, 1995 of $7.2 million,  the  Convertible  Preferred Stock dividends of $2.4
million and the change in the cumulative  foreign  currency  adjustment of $.2
million.  The increase compared with December 31, 1994 resulted  primarily due
to the  issuance of  Convertible  Preferred  Stock with a fair market value of
$177.3  million and Warrants  with a fair market value of $14.4 million in the
merger  transactions with the Miracle-Gro  Companies.  The remaining change in
shareholders'  equity was a result of net income for the twelve  months  ended
December 30, 1995 of $22.5  million and the change in the  cumulative  foreign
currency adjustment of $1.8 million, partially offset by Convertible Preferred
Stock dividends of $6.0 million.

The Company has foreign exchange rate risk related to  international  earnings
and cash flows.  During  fiscal  1995,  a  management  program was designed to
minimize  the  exposure to adverse  currency  impacts on the cash value of the
Company's  non-local  currency  receivables  and  payables,  as  well  as  the
associated  earnings  impact.  The Company has entered  into  forward  foreign
exchange  contracts and purchased  currency options tied to the economic value
of receivables  and payables and expected cash flows  denominated in non-local
foreign  currencies.  Management  anticipated that these financial  statements
will act as an  effective  hedge  against  the  potential  adverse  impact  of
exchange rate fluctuations on the Company's  results of operations,  financial
condition and  liquidity.  It is  recognized,  however,  that the program will
minimize  but not  completely  eliminate  the  Company's  exposure  to adverse
currency movements.

                                    Page 12



As of  December  30,  1995,  the  Company's  European  operations  had foreign
exchange risk in various European currencies tied to the Dutch Guilder.  These
currencies  include the Austrian Dollar,  Belgian Franc,  German Mark, Spanish
Peseta,  Italian Lira, French Franc,  British Pound and the U. S. Dollar.  The
Company's  U. S.  operations  had foreign  exchange  rate risk in the Canadian
Dollar,  Dutch  Guilder  and the  British  Pound  which  are tied to the U. S.
Dollar.  As  of  December  30,  1995,  outstanding  foreign  exchange  forward
contracts had a contract value of approximately  $35.4 million and outstanding
purchased  currency  options  had a  contract  value  of  approximately  $14.8
million.  These  contracts have maturity dates ranging from January 3, 1996 to
October 2, 1996.

The  primary  sources of  liquidity  for the Company  are funds  generated  by
operations and borrowings  under the Company's Credit  Agreement.  As amended,
the Credit  Agreement  is unsecured  and  provides up to $375 million  through
March 31, 2000 and does not contain a term loan facility.

In the opinion of the Company's  management,  cash flows from  operations  and
capital  resources  will be sufficient to meet future debt service and working
capital needs during the 1996 fiscal year.

Inflation

The  Company is subject to the effects of changing  prices.  The Company  has,
however, generally been able to pass along inflationary increases in its costs
by increasing the prices of its products.

Selective price increases for products which contain urea became  effective at
the  beginning  of  1996.  The  price  increases  offset  higher  urea  prices
experienced by the Company.

Accounting Issues

In December 1995, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  ("SFAS") No. 123 "Accounting for Stock-Based
Compensation",  which  changes the  measurement,  recognition  and  disclosure
standards for stock-based compensation. Management is currently evaluating the
provisions  of SFAS No. 123 and at this time,  the effect of adopting SFAS No.
123 on the results of  operations  and the method of  disclosure  has not been
determined.

Contingencies

The  Company is  involved  in various  lawsuits  and claims  that arise in the
normal  course  of  business.  In the  opinion  of  management,  these  claims
individually  and in the  aggregate  are not  expected to result in a material
adverse effect on the Company's  financial  position or results of operations;
however,  there can be no assurance that future  quarterly or annual operating
results will not be materially  affected by final resolution of these matters.
Additional  information  with respect to the more significant of these matters
is  described in footnote  number 8 to the  Company's  Consolidated  Financial
Statements.

                                    Page 13





                          Part II - OTHER INFORMATION



Item 1.  Legal Proceedings

             See footnote number 8 to the Company's
Consolidated Financial Statements


Items 2-5.

             Not applicable


Item 6.  Exhibits and Reports on Form 8-K.

(a)  See  Exhibit  index  at  page  16 for a list  of  the  exhibits  included
     herewith.

(b)  No  reports  on Form 8-K were  filed  during  the  fiscal  quarter  ended
     December 30, 1995.




                                    Page 14


                                  SIGNATURES


Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934,  the
Registrant  has duly  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.




                                            THE SCOTTS COMPANY



Date         FEBRUARY 12, 1996             /S/  PAUL D. YEAGER
- -------------------------------                 Paul D. Yeager
                                                Executive Vice President
                                                Chief Financial Officer
                                                Principal Accounting Officer






                                    Page 15




                              THE SCOTTS COMPANY

                       QUARTERLY REPORT ON FORM 10-Q FOR
                    FISCAL QUARTER ENDED DECEMBER 30, 1995



                                 EXHIBIT INDEX




EXHIBIT                                                   PAGE
 NUMBER              DESCRIPTION                         NUMBER

   11    Computation of Net Income (Loss)
         Per Common Share ................................ 17


   27    Financial Data Schedule ......................... 18






                                    Page 16



                                                                 Exhibit 11(a)


                              THE SCOTTS COMPANY


               Computation of Net Income (Loss) Per Common Share
                              Primary (Unaudited)
                (Dollars in thousands except per share amounts)


                                                      For the Three Months Ended
                                                      December 31   December 30,
                                                         1994           1995
                                                         ----           ----
Net loss for computing net loss
   per common share:

Net loss .........................................       $(4,598)       $(7,174)

Preferred stock dividend .........................          --           (2,436)
                                                         -------        -------

Net loss applicable to common shares .............       $(4,598)       $(9,610)
                                                         =======        =======

Net loss per common share ........................       $  (.25)       $  (.51)
                                                         =======        =======




                    Computation of Weighted Average Number
                   of Common Shares Outstanding (Unaudited)


                                                   For the Three Months Ended
                                                   December 31,  December 30,
                                                      1994           1995
                                                     -----           ----
Weighted average number of
    shares for computing net loss
    per common share                              18,667,064(1)   18,688,934 (1)
                                                  ==========      ==========

___________________
(1)  On a fully diluted basis,  weighted  average shares  outstanding  did not
     differ from the primary  calculation due to the  anti-dilutive  effect of
     common stock equivalents in a loss period.


                                    Page 17

 

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME OF THE SCOTTS COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FORM 10-Q FOR THE QUARTER ENDED DECEMBER 30, 1995. 1000 U.S. DOLLARS 3-MOS SEP-30-1996 OCT-01-1995 DEC-30-1995 1 7,903 0 199,754 3,381 184,629 409,847 233,933 86,146 864,512 134,023 0 0 177,255 211 196,299 864,512 117,928 118,070 64,714 119,489 4,611 0 6,601 (12,631) (5,457) (7,174) 0 0 0 (7,174) (.51) (.51)