EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

[THE HAIN CELESTIAL GROUP, INC. LOGO OMITTED]

Ira Lamel/Mary Anthes

The Hain Celestial Group, Inc.

631-730-2200

THE HAIN CELESTIAL GROUP ANNOUNCES RECORD

THIRD QUARTER RESULTS

Net Sales Increase 29.8% to $288.4 Million

GAAP Earnings $0.38 Per Diluted Share

Adjusted Earnings $0.36 Per Diluted Share

Before Acquisition Related Items

Melville, NY, May 3, 2011—The Hain Celestial Group, Inc. (NASDAQ: HAIN), a leading natural and organic products company providing consumers with A Healthy Way of Life™, today reported results for the third quarter ended March 31, 2011. Reflecting record sales for the third quarter, net sales increased 29.8% to $288.4 million from net sales of $222.1 million in the prior year third quarter. The Company continued its growth momentum with gains across the Hain Celestial worldwide portfolio.

In the third quarter, the Company earned $16.8 million in net income as compared to $2.7 million in the prior year third quarter, and reported earnings of $0.38 per diluted share as compared to $0.06 per diluted share in the prior year third quarter. Earnings per diluted share were $0.36 on adjusted net income of $16.2 million in this year’s third quarter as compared to $0.26 per share on adjusted net income of $10.6 million in the prior year third quarter1. On an adjusted basis, net income and diluted earnings improved 53% and 38% respectively, over the prior year third quarter1. Operating margin was 10.7% on a GAAP basis in this year’s third quarter, a 198 basis point improvement from 8.7% in the prior year third quarter. On an adjusted basis, operating margin was 10.1% in this year’s third quarter, improving 66 basis points from 9.4% in the prior year third quarter1.

“Our third quarter results reflect the strength of our brands and our solid execution across various classes of trade in the growing natural and organic industry,” said Irwin D. Simon, President and Chief Executive Officer of Hain Celestial. “All of our reporting units grew, both in the United States and abroad. Strong top line performance came from our Grocery and Snacks, Celestial Seasonings and Personal Care units with solid contributions from our Canadian and European units. Key brands that experienced double-digit sales growth were Earth’s Best® infant and toddler products, MaraNatha® nut butters, Spectrum® oils, Dream™ non-dairy frozen desserts, Terra® chips, Lima® organic foods and Avalon® and Alba® personal care brands as well as our recently acquired brands, Sensible Portions® snacks and The Greek Gods® yogurt.

 

 

1 

See Non-GAAP Financial measures and related Reconciliation of GAAP Results to Non-GAAP Financial Presentation


Gross profit in this year’s third quarter improved 90 basis points to 28.6% of net sales compared to 27.7% of net sales in the prior year third quarter. The higher gross profit performance resulted from the favorable mix of product sales worldwide which together with productivity savings offset increased input costs.

Selling, general and administrative expenses were 18.6% of net sales in this year’s third quarter compared to 19.0% in the prior year third quarter. The Company has continued to benefit from leveraging its existing infrastructure across its expanded portfolio of brands, including acquisitions. Compared to the prior year third quarter, these expenses increased due to the higher amortization related to recent acquisitions and a higher level of product demonstrations and store level sampling.

Operating free cash flow for the 12-month period ended March 31, 2011 was $61.0 million1. The Company had working capital of $170.7 million at March 31, 2011. Debt was $237.3 million or 28.3% of equity of $839.2 million at March 31, 2011.

“As the natural and organic industry continues to experience accelerating growth trends, Hain Celestial’s portfolio of brands is well-positioned to meet consumer demands. We recently introduced over 50 new and improved products to strengthen our leadership position and support these trends,” commented Irwin Simon. “The foundation we established to position the Company for sustainable long-term growth has enabled us to experience a resurgence in our sales, earnings and margins. As we move toward the end of our fiscal year, we expect to continue to build our brands and drive profitable growth with product innovation and productivity initiatives, despite the challenges of increasing input costs.”

Fiscal Year 2011 Outlook

The Company updated its fiscal year 2011 sales guidance to $1.095 to $1.115 billion and its earnings guidance to $1.30 to $1.34 per diluted share adjusted. The guidance excludes acquisition and integration expenses that may be incurred during the Company’s fiscal year 2011, which the Company will continue to identify when it reports its financial results.

Webcast

Hain Celestial will host a conference call and webcast at 4:30 PM Eastern Time today to review its third quarter fiscal year 2011 results. The conference call will be webcast and available under the Investor Relations section of the Company’s website at www.hain-celestial.com.

The Hain Celestial Group, Inc.

The Hain Celestial Group (NASDAQ: HAIN), headquartered in Melville, NY, is a leading natural and organic products company in North America and Europe. Hain Celestial participates in many natural categories with well-known brands that include Celestial Seasonings®, Earth’s Best®, Terra®, Garden of Eatin’®, Sensible Portions®, Health Valley®, Arrowhead Mills®, MaraNatha®, SunSpire®, DeBoles®, Gluten Free Café™, Hain Pure Foods®, Hollywood®, Spectrum Naturals®, Spectrum Essentials®, Walnut Acres Organic®, Imagine®, Almond Dream®, Rice Dream®, Soy Dream®, WestSoy®, The Greek Gods®, Ethnic Gourmet®, Yves Veggie Cuisine®, Granose®, Realeat®, Linda McCartney®, Daily Bread™, Lima®, Danival®, GG UniqueFiber™,Grains Noirs®, Natumi®, JASON®, Zia® Natural Skincare, Avalon Organics®, Alba Botanica®, Queen Helene®, Tushies®, Earth’s Best TenderCare® and Martha Stewart Clean™. Hain


Celestial has been providing “A Healthy Way of Life™” since 1993. For more information, visit www.hain-celestial.com.

Safe Harbor Statement

This press release contains forward-looking statements under Rule 3b-6 of the Securities Exchange Act of 1934, as amended. Words such as “expect,” “expected,” “anticipate,” “estimate,” “believe,” “may,” “potential,” “can,” “positioned,” “should,” “plan,” “continue,” “future,” “look forward” and similar expressions, or the negative of those expressions, may identify forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those described in the forward-looking statements. These forward-looking statements include our expectations relating to (i) growth trends in the natural and organic industry and our ability to meet consumer demand and (ii) our performance for the remainder of fiscal year 2011. These risks include but are not limited to our ability to achieve our guidance for net sales and earnings per diluted share in fiscal year 2011 given the environment in the U.S. and other markets in which we sell products as well as economic and business conditions generally and their effect on our customers and consumers’ product preferences, and our business, financial condition and results of operations; changes in estimates or judgments related to our impairment analysis of goodwill and other intangible assets; our ability to implement our business and acquisition strategy, including our strategy for improving results in Europe; Hain Pure Protein Corporation’s (“HPP”) ability to implement its business strategy; our ability to realize sustainable growth generally and from investing in core brands, offering new products and focusing on cost containment, productivity, cash flow and margin enhancement in particular; our ability to effectively integrate our acquisitions; our ability to successfully execute our joint ventures; competition; the success and cost of introducing new products as well as our ability to increase prices on existing products; the availability and retention of key personnel; our reliance on third party distributors, manufacturers and suppliers; our ability to maintain existing contracts and secure and integrate new customers; our ability to respond to changes and trends in customer and consumer demand, preferences and consumption; international sales and operations; increases in fuel and commodity costs; the effects on our results of operations from adverse impacts of foreign exchange; changes in, or the failure to comply with, government regulations; and other risks detailed from time-to-time in the Company’s reports filed with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year ended June 30, 2010. As a result of the foregoing and other factors, no assurance can be given as to future results, levels of activity and achievements and neither the Company nor any person assumes responsibility for the accuracy and completeness of these statements.

Non-GAAP Financial Measures

Management believes that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the Company’s operations and are useful for period-over-period comparisons of operations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the Company’s Consolidated Statements of Income presented in accordance with GAAP.


Operating Free Cash Flow is a non-GAAP financial measure. The Company defines Operating Free Cash Flow as cash provided from or used in operating activities less capital expenditures. For the 12-month period ended March 31, 2011, cash provided by operating activities was $72.9 million and capital expenditures were $11.9 million for a net total of $61.0 million. For the 12-month period ended March 31, 2010, cash provided by operating activities was $69.7 million and capital expenditures were $10.3 million for a net total of $59.4 million.

This press release and the accompanying tables also include non-GAAP financial measures which are referred to as “adjusted.” The reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are presented in the tables Consolidated Statements of Income with Adjustments for the three months and nine months ended March 31, 2011 and 2010. These non-GAAP financial measures exclude the items listed at the bottom of the tables.


THE HAIN CELESTIAL GROUP, INC.

Consolidated Balance Sheets

(In thousands)

 

     March 31,     June 30,  
     2011     2010  
     (Unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 25,571      $ 17,266   

Trade receivables, net

     141,981        114,215   

Inventories

     166,959        157,012   

Deferred income taxes

     11,018        10,738   

Other current assets

     16,408        14,586   
                

Total current assets

     361,937        313,817   

Property, plant and equipment, net

     110,131        106,985   

Goodwill, trademarks and other intangibles, net

     789,753        714,584   

Investments in and advances to affiliates

     44,869        46,041   

Other assets

     18,896        16,660   
                

Total assets

   $ 1,325,586      $ 1,198,087   
                

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable and accrued expenses

   $ 178,386      $ 129,282   

Income taxes payable

     12,380        9,530   

Current portion of long-term debt

     512        38   
                

Total current liabilities

     191,278        138,850   

Deferred income taxes

     42,755        38,283   

Other noncurrent liabilities

     15,546        30,227   

Long-term debt, less current portion

     236,761        225,004   
                

Total liabilities

     486,340        432,364   

Stockholders’ equity:

    

Common stock

     445        437   

Additional paid-in capital

     571,327        548,782   

Retained earnings

     283,038        240,904   

Treasury stock

     (18,328     (17,529

Accumulated other comprehensive income

     2,764        (6,871
                

Total stockholders’ equity

     839,246        765,723   
                

Total liabilities and stockholders’ equity

   $ 1,325,586      $ 1,198,087   
                


THE HAIN CELESTIAL GROUP, INC.

Consolidated Statements of Income

(in thousands, except per share amounts)

 

     Three Months Ended March 31,      Nine Months Ended March 31,  
     2011     2010      2011     2010  
     (Unaudited)      (Unaudited)  

Net sales

   $ 288,386      $ 222,098       $ 838,225      $ 694,549   

Cost of sales

     205,822        160,596         600,167        501,339   
                                 

Gross profit

     82,564        61,502         238,058        193,210   

Selling, general and administrative expenses

     53,664        42,161         158,814        131,907   

Acquisition related expenses including integration and restructuring charges

     (1,920        169        2,936   
                                 

Operating income

     30,820        19,341         79,075        58,367   

Interest expense and other expenses

     2,851        2,024         8,835        8,581   
                                 

Income before income taxes and equity in earnings of equity-method investees

     27,969        17,317         70,240        49,786   

Income tax provision

     11,076        14,008         28,601        26,073   

After-tax (income) loss of equity-method investees

     121        653         (495     1,785   
                                 

Net income

   $ 16,772      $ 2,656       $ 42,134      $ 21,928   
                                 

Basic net income per share

   $ 0.39      $ 0.07       $ 0.98      $ 0.54   
                                 

Diluted net income per share

   $ 0.38      $ 0.06       $ 0.95      $ 0.53   
                                 

Weighted average common shares outstanding:

         

Basic

     43,202        40,838         42,985        40,771   
                                 

Diluted

     44,711        41,383         44,321        41,298   
                                 


THE HAIN CELESTIAL GROUP, INC.

Consolidated Statements of Income With Adjustments

Reconciliation of GAAP Results to Non-GAAP Presentation

(in thousands, except per share amounts)

 

     Three Months Ended March 31,  
     2011 GAAP     Adjustments     2011 Adjusted      2010 Adjusted (1)  
     (Unaudited)  

Net sales

   $ 288,386        $ 288,386       $ 222,098   

Cost of Sales

     205,822      $ (83     205,739         160,596   
                                 

Gross profit

     82,564        83        82,647         61,502   

Selling, general and administrative expenses

     53,664          53,664         40,638   

Acquisition related expenses including integration and restructuring charges

     (1,920     1,920        —           —     
                                 

Operating income

     30,820        (1,837     28,983         20,864   

Interest and other expenses, net

     2,851        (469     2,382         2,024   
                                 

Income before income taxes and equity in earnings of equity-method investees

     27,969        (1,368     26,601         18,840   

Income tax provision

     11,076        (769     10,307         8,257   

After-tax (income) loss of equity-method investees

     121        (70     51         (54
                                 

Net income

   $ 16,772      $ (529   $ 16,243       $ 10,637   
                                 

Basic net income per share

   $ 0.39      $ (0.01   $ 0.38       $ 0.26   
                                 

Diluted net income per share

   $ 0.38      $ (0.02   $ 0.36       $ 0.26   
                                 

Weighted average common shares outstanding:

         

Basic

     43,202          43,202         40,838   
                           

Diluted

     44,711          44,711         41,383   
                           

 

     FY 2011     FY 2010 (1)  
     Impact on Income
Before Income Taxes
    Impact on Income Tax
Provision
    Impact on Income Before
Income Taxes
     Impact on Income Tax
Provision
 
     (Unaudited)  

Acquisition related integration costs

   $ 83          
                                 

Cost of sales

     83        —          —           —     
                                 

Litigation settlements

       $ 1,523       $ 577   
                                 

Selling, general and administrative expenses

     —          —          1,523         577   
                                 

Acquisition related expenses

     1,690        586        

Contingent Consideration (income)

     (4,130     (1,531     

Severance and other reorganization costs

     520        10        
                                 

Acquisition related expenses and restructuring charges

     (1,920     (935     —           —     
                                 

Accretion on acquisition related contingent consideration

     469        166        
                                 

Interest and other expenses, net

     469        166        —           —     
                                 

Net loss from HPP discontinued operation

     70        —          707         —     
                                 

Equity in net (income) loss of HPP

     70        —          707         —     
                                 

Valuation allowance recorded on UK deferred tax assets

            (6,328
                                 

Total adjustments

   $ (1,298   $ (769   $ 2,230       $ (5,751
                                 

Note:

 

(1) The fiscal year 2010 non-GAAP presentation reflects (i) the cessation in the third quarter of recording tax benefits for the United Kingdom losses and (ii) the treatment by HPP of Kosher Valley as a discontinued operation beginning in the fourth quarters as applied to the first three quarters.


THE HAIN CELESTIAL GROUP, INC.

Consolidated Statements of Income With Adjustments

Reconciliation of GAAP Results to Non-GAAP Presentation

(in thousands, except per share amounts)

 

     Nine Months Ended March 31,  
     2011 GAAP     Adjustments     2011 Adjusted     2010 Adjusted (1)  
     (Unaudited)  

Net sales

   $ 838,225        $ 838,225      $ 694,549   

Cost of Sales

     600,167      $ (794     599,373        501,339   
                                

Gross profit

     238,058        794        238,852        193,210   

Selling, general and administrative expenses

     158,814          158,814        130,384   

Acquisition related expenses including integration and restructuring charges

     169        (169     —          —     
                                

Operating income

     79,075        963        80,038        62,826   

Interest and other expenses, net

     8,835        (1,374     7,461        7,371   
                                

Income before income taxes and equity in earnings of equity-method investees

     70,240        2,337        72,577        55,455   

Income tax provision

     28,601        250        28,851        23,924   

After-tax (income) loss of equity-method investees

     (495     (322     (817     141   
                                

Net income

   $ 42,134      $ 2,409      $ 44,543      $ 31,390   
                                

Basic net income per share

   $ 0.98      $ 0.06      $ 1.04      $ 0.77   
                                

Diluted net income per share

   $ 0.95      $ 0.06      $ 1.01      $ 0.76   
                                

Weighted average common shares outstanding:

        

Basic

     42,985          42,985        40,771   
                          

Diluted

     44,321          44,321        41,298   
                          

 

     FY 2011     FY 2010 (1)  
     Impact on Income
Before Income Taxes
    Impact on Income Tax
Provision
    Impact on Income Before
Income Taxes
     Impact on Income Tax
Provision
 
     (Unaudited)  

Acquisition related integration costs

   $ 794      $ 69        
                                 

Cost of sales

     794        69        —           —     
                                 

Litigation settlements

       $ 1,523       $ 577   
                                 

Selling, general and administrative expenses

     —          —          1,523         577   
                                 

Acquisition related expenses

     3,024        1,039        

Contingent Consideration (income)

     (3,687     (1,364     

Severance and other reorganization costs

     832        21      $ 2,936      
                                 

Acquisition related expenses and restructuring charges

     169        (304     2,936         —     
                                 

Accretion on acquisition related contingent consideration

     1,374        485        

Unrealized loss on investment

         1,210       $ 450   
                                 

Interest and other expenses, net

     1,374        485        1,210         450   
                                 

Net loss from HPP discontinued operation

     322        —          1,644         —     
                                 

Equity in net (income) loss of HPP

     322        —          1,644         —     
                                 

Valuation allowance recorded on UK deferred tax assets

            (3,176
                                 

Total adjustments

   $ 2,659      $ 250      $ 7,313       $ (2,149
                                 

Note:

 

(1) The fiscal year 2010 non-GAAP presentation reflects (i) the cessation in the third quarter of recording tax benefits for the United Kingdom losses as applied to the prior two quarters and (ii) the treatment by HPP of Kosher Valley as a discontinued operation beginning in the fourth quarters as applied to the first three quarters.