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Hain Celestial Reports Third Quarter Fiscal Year 2021 Financial Results
244 Basis Point Expansion of Gross Margin
Net Income Growth of 37%
Adjusted EBITDA Growth of 22%
Gross Margin Improvement and Adjusted EBITDA Growth Expected to Continue

LAKE SUCCESS, N.Y., May 6, 2021 /PRNewswire/ -- The Hain Celestial Group, Inc. (Nasdaq: HAIN) ("Hain Celestial", "Hain" or the "Company"), a leading organic and natural products company with operations in North America, Europe, Asia and the Middle East providing consumers with A Healthier Way of Life™, today reported financial results for the third quarter ended March 31, 2021. The results contained herein are presented with the Hain Pure Protein and Tilda operating segments being treated as discontinued operations. All growth comparisons are against the corresponding prior year period unless otherwise noted.

Mark L. Schiller, Hain Celestial's President and Chief Executive Officer, commented, "We are pleased with our strong third quarter results. We successfully lapped the March 2020 stock up period to deliver sales in line with our guidance, several hundred basis points of margin improvement and strong adjusted EBITDA growth. I am extremely proud of our team which continues to execute more than a full year into this challenging macro operating environment. As a result, I remain confident we will continue to see growth in our get bigger businesses, solid margin expansion and profit growth as we progress through the remainder of fiscal year 2021."

FINANCIAL HIGHLIGHTS1

Summary of Third Quarter Results from Continuing Operations2 

  • Net sales decreased 11% to $492.6 million compared to the prior year period.
  • When adjusted to exclude the effects of foreign exchange, divestitures and discontinued brands, net sales decreased 6% compared to the prior year period.
  • Gross margin of 26.4%, a 244 basis point increase from the prior year period.
  • Adjusted gross margin of 27.4%, a 317 basis point increase from the prior year period.
  • Operating income of $49.6 million compared to $19.1 million in the prior year period.
  • Adjusted operating income of $59.7 million compared to $45.7 million in the prior year period.
  • Net income of $34.3 million compared to $25.0 million in the prior year period.
  • Adjusted net income of $44.7 million compared to $28.8 million in the prior year period.
  • Adjusted EBITDA of $73.8 million compared to $60.7 million in the prior year period.
  • Adjusted EBITDA margin of 15.0%, a 400 basis point increase compared to the prior year period.
  • Earnings per diluted share ("EPS") of $0.34 compared to $0.24 in the prior year period.
  • Adjusted EPS of $0.44 compared to $0.28 in the prior year period.
  • Repurchased 0.2 million shares, or 0.2% of the outstanding common stock, at an average price of $41.86 per share.

 




1 This press release includes certain non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. Reconciliations of non-GAAP financial measures to GAAP financial measures and other non-GAAP financial calculations are provided herein in the tables.

2 Unless otherwise noted all results included in this press release are from continuing operations.

SEGMENT HIGHLIGHTS FROM CONTINUING OPERATIONS

The Company operates under two reportable segments: North America and International.

North America
North America net sales in the third quarter were $287.5 million, a decrease of 10% compared to the prior year period. When adjusted for foreign exchange, divestitures and discontinued brands, net sales decreased 8% from the prior year period. On an adjusted basis, the decrease was primarily driven by a large program with a wholesale club which was not repeated in the current quarter and pantry stocking in the prior year quarter as a result of stay-at-home orders at the beginning of the COVID-19 pandemic.

Segment gross profit in the third quarter was $78.5 million, a 5% decrease from the prior year period. Adjusted gross profit was $81.8 million, a decrease of 3% from the prior year period. Gross margin was 27.3%, a 152 basis point increase from the prior year period, and adjusted gross margin was 28.4%, a 208 basis point increase from the prior year period.

Segment operating income in the third quarter was $39.5 million, a 37% increase from the prior year period. Adjusted operating income was $43.9 million, a 15% increase from the prior year period.

Adjusted EBITDA in the third quarter was $48.5 million, a 13% increase from the prior year period. As a percentage of sales, North America adjusted EBITDA margin was 16.9%, a 348 basis point increase from the prior year period.

International
International net sales in the third quarter were $205.1 million, a decrease of 12% compared to the prior year period. When adjusted for foreign exchange, divestitures and discontinued brands, net sales decreased 3% compared to the prior year period. On an adjusted basis, the decrease was mainly due to United Kingdom customer inventory reductions that were elevated in Q2 in anticipation of potential Brexit supply disruptions as well as pantry stocking in the prior year quarter as a result of stay-at-home orders at the beginning of the COVID-19 pandemic.

Segment gross profit in the third quarter was $51.4 million, a 3% increase from the prior year period. Adjusted gross profit was $53.3 million, an increase of 7% from the prior year period. Gross margin was 25.1%, a 368 basis point increase from the prior year period, and adjusted gross margin was 26.0%, a 464 basis point increase from the prior year period.

Segment operating income in the third quarter was $26.8 million, a 44% increase from the prior year period. Adjusted operating income was $29.6 million, an increase of 28% from the prior year period.

Adjusted EBITDA in the third quarter was $36.7 million, a 19% increase from the prior year period. As a percentage of sales, International adjusted EBITDA margin was 17.9%, a 463 basis point increase from the prior year period.

CAPITAL MANAGEMENT

During the third quarter of fiscal year 2021, the Company repurchased 0.2 million shares, or 0.2% of the outstanding common stock, at an average price of $41.86 per share for a total of $8.6 million, excluding commissions under our share repurchase program. As of March 31, 2021, the Company had remaining authorization of $109.5 million under this program.

SALE OF NORTH AMERICA NON-DAIRY BEVERAGES BRANDS, DREAM® AND WESTSOY®

On April 15, 2021, the Company completed the divestiture of its North America non-dairy beverages brands, Dream® and WestSoy®, to SunOpta Inc. for $33 million subject to customary post-closing adjustments.

FISCAL YEAR 2021 GUIDANCE

The Company reaffirms its expectation for gross and adjusted EBITDA margin expansion as well as strong double-digit adjusted EBITDA and operating free cash flow growth for fiscal year 2021. For the fourth quarter fiscal year 2021, in comparison to the prior year period, the Company expects (a) strong gross margin and EBITDA margin improvement, (b) adjusted EBITDA growth near 10% and (c) 5% to 8% decline in net sales when adjusted for foreign exchange, divestitures and discontinued brands. Compared to the fourth quarter of fiscal year 2019, we expect mid-single digit growth in net sales when adjusted for foreign exchange, divestitures and discontinued brands.

Webcast Presentation
Hain Celestial will host a conference call and webcast today at 8:30 AM Eastern Time to discuss its results and business outlook. The call will be webcast and the accompanying presentation will be available under the Investor Relations section of the Company's website at www.hain.com.

About The Hain Celestial Group, Inc.
The Hain Celestial Group (Nasdaq: HAIN), headquartered in Lake Success, NY, is a leading organic and natural products company with operations in North America, Europe, Asia and the Middle East. Hain Celestial participates in many natural categories with well-known brands that include Celestial Seasonings®, Clarks™, Cully & Sully®, Earth's Best®, Ella's Kitchen®, Farmhouse Fare™, Frank Cooper's®, GG UniqueFiber®, Gale's®, Garden of Eatin'®, Hain Pure Foods®, Hartley's®, Health Valley®, Imagine®, Joya®, Lima®, Linda McCartney's®™ (under license), MaraNatha®, Natumi®, New Covent Garden Soup Co.®, Robertson's®, Sensible Portions®, Spectrum®, Sun-Pat®, Terra®, The Greek Gods®, William's™, Yorkshire Provender® and Yves Veggie Cuisine®. The Company's personal care products are marketed under the Alba Botanica®, Avalon Organics®, Earth's Best®, JASON®, Live Clean®, One Step® and Queen Helene® brands.

Safe Harbor Statement
Certain statements contained in this press release constitute "forward-looking statements" within the meaning of federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictions based on expectations and projections about future events and are not statements of historical fact. You can identify forward-looking statements by the use of forward-looking terminology such as "plan," "continue," "expect," "anticipate," "intend," "predict," "project," "estimate," "likely," "believe," "might," "seek," "may," "will," "remain," "potential," "can," "should," "could," "future" and similar expressions, or the negative of those expressions, or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of the Company's strategic initiatives, including productivity and transformation, the Company's guidance for fiscal year 2021 and our future performance and results of operations.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, levels of activity, performance or achievements of the Company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). Such factors include, among others, challenges and uncertainty resulting from the COVID-19 pandemic, the impact of competitive products and changes to the competitive environment, changes to consumer preferences, general economic and financial market conditions, potential legal claims and other risks relating to regulatory requirements, government investigations and other regulatory enforcement actions, the United Kingdom's exit from the European Union, consolidation of customers or the loss of a significant customer, reliance on independent distributors, risks associated with our international sales and operations, our ability to manage our supply chain effectively, volatility in the cost of commodities, ingredients, freight and fuel, our ability to implement cost savings initiatives, the impact of our debt covenants, the potential discontinuation of LIBOR, our ability to manage our financial reporting and internal control system processes, costs incurred due to pending and future litigation, potential liability, including in connection with indemnification obligations to our former officers and members of our Board of Directors that may not be covered by insurance, potential liability if our products cause illness or physical harm, impairments in the carrying value of goodwill or other intangible assets, our ability to consummate divestitures, the availability of organic ingredients, disruption of operations at our manufacturing facilities, loss of one or more independent co-packers, disruption of our transportation systems, risks relating to the protection of intellectual property, the risk of liabilities and claims with respect to environmental matters, the reputation of our brands, our reliance on independent certification for a number of our products, and other risks detailed from time-to-time in the Company's reports filed with the United States Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and our subsequent reports on Forms 10-Q and 8-K. As a result of the foregoing and other factors, the Company cannot provide any assurance regarding future results, levels of activity and achievements of the Company, and neither the Company nor any person assumes responsibility for the accuracy and completeness of these statements. All forward-looking statements contained herein apply as of the date hereof or as of the date they were made and, except as required by applicable law, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors or new methods, future events or other changes.

Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures, including adjusted operating income and its related margin, adjusted gross margin, adjusted net income, adjusted earnings per diluted share, net sales adjusted for the impact of foreign exchange, divestitures and discontinued brands, adjusted EBITDA and its related margin and operating free cash flow. The reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are provided herein in the tables. 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 Operations and Cash Flows presented in accordance with GAAP.

Certain forward-looking non-GAAP financial measures included in this press release are not reconciled to the comparable forward-looking GAAP financial measures. The Company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include income taxes, interest expense, stock-based compensation, impairments, gains or losses on sales of businesses, foreign exchange movements and other items. The unavailable information could have a significant impact on the Company's GAAP financial results.

The Company believes presenting net sales at constant currency provides useful information to investors because it provides transparency to underlying performance in the Company's consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on period-to-period comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

The Company provides net sales adjusted for the impact of foreign currency, divestitures and discontinued brands to understand the growth rate of net sales excluding the impact of such items. The Company's management believes net sales adjusted for such items is useful to investors because it enables them to better understand the growth of our business from period-to-period.

The Company defines adjusted EBITDA as net income (loss) before income taxes, net interest expense, depreciation and amortization, equity in net (income) loss of equity-method investees, stock-based compensation, net, unrealized currency gains and losses, productivity and transformation costs, proceeds from an insurance claim, impairment of long-lived assets and intangibles, warehouse and manufacturing consolidation and other costs, gains or losses on sales of businesses, litigation and related expenses, plant closure related costs, SKU rationalization and inventory write-downs and other adjustments. The Company's management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company as well as a component of performance-based executive compensation.

The Company defines operating free cash flow as cash provided by or used in operating activities from continuing operations (a GAAP measure) less purchases of property, plant and equipment. The Company views operating free cash flow as an important measure because it is one factor in evaluating the amount of cash available for discretionary investments.

 

THE HAIN CELESTIAL GROUP, INC.

Consolidated Balance Sheets

 (unaudited and in thousands) 










March 31, 2021


June 30, 2020

ASSETS




Current assets:





Cash and cash equivalents

$                     53,014


$                     37,771


Accounts receivable, net

190,737


170,969


Inventories

313,898


248,170


Prepaid expenses and other current assets

38,648


95,690


Assets held for sale

-


8,334


Total current assets

596,297


560,934

Property, plant and equipment, net

311,342


289,256

Goodwill


877,723


861,958

Trademarks and other intangible assets, net

324,791


346,462

Investments and joint ventures

17,342


17,439

Operating lease right-of-use assets

90,130


88,165

Other assets

22,263


24,238


Total assets 

$                2,239,888


$                2,188,452

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:





Accounts payable

$                   210,223


$                   171,009


Accrued expenses and other current liabilities

120,498


124,045


Current portion of long-term debt

699


1,656


Liabilities related to assets held for sale

-


3,567


Total current liabilities

331,420


300,277

Long-term debt, less current portion

255,540


281,118

Deferred income taxes 

36,103


51,849

Operating lease liabilities, noncurrent portion

83,564


82,962

Other noncurrent liabilities

31,579


28,692


Total liabilities

738,206


744,898


Total stockholders' equity

1,501,682


1,443,554


Total liabilities and stockholders' equity

$                2,239,888


$                2,188,452

 

THE HAIN CELESTIAL GROUP, INC.

 Consolidated Statements of Operations 

 (unaudited and in thousands, except per share amounts) 










Third Quarter


Third Quarter Year to Date


2021


2020


2021


2020









Net sales

$             492,604


$             553,297


$          1,519,649


$          1,542,157

Cost of sales

362,698


420,902


1,140,614


1,206,324

Gross profit

129,906


132,395


379,035


335,833

Selling, general and administrative expenses

74,223


85,447


236,995


245,205

Amortization of acquired intangible assets

2,145


3,174


6,771


9,446

Productivity and transformation costs

4,553


11,514


12,371


37,949

Proceeds from insurance claim

(592)


(400)


(592)


(2,962)

Long-lived asset and intangibles impairment

-


13,525


57,676


15,414

Operating income

49,577


19,135


65,814


30,781

Interest and other financing expense, net

2,030


4,037


6,820


15,068

Other expense (income), net

1,566


(260)


(852)


2,312

Income from continuing operations before income taxes and equity in net
(income) loss of equity-method investees

45,981


15,358


59,846


13,401

Provision (benefit) for income taxes

11,797


(10,242)


33,197


(9,753)

Equity in net (income) loss of equity-method investees

(70)


564


1,025


1,219

   Net income from continuing operations

$               34,254


$               25,036


$               25,624


$               21,935

   Net (loss) income from discontinued operations, net of tax

-


(697)


11,255


(105,581)

Net income (loss)

$               34,254


$               24,339


$               36,879


$              (83,646)









Net income (loss) per common share: 








Basic net income per common share from continuing operations

$                   0.34


$                   0.24


$                   0.25


$                   0.21

Basic net (loss) income per common share from discontinued operations

-


(0.01)


0.11


(1.01)

Basic net income (loss) per common share

$                   0.34


$                   0.23


$                   0.36


$                 (0.80)









Diluted net income per common share from continuing operations

$                   0.34


$                   0.24


$                   0.25


$                   0.21

Diluted net (loss) income per common share from discontinued operations

-


(0.01)


0.11


(1.01)

Diluted net income (loss) per common share

$                   0.34


$                   0.23


$                   0.36


$                 (0.80)









Shares used in the calculation of net income (loss) per common share:








Basic

99,831


104,032


100,502


104,192

Diluted

101,596


104,337


101,385


104,489

 

THE HAIN CELESTIAL GROUP, INC.

 Consolidated Statements of Cash Flows  

(unaudited and in thousands)










Third Quarter


Third Quarter Year to Date


2021


2020


2021


2020

CASH FLOWS FROM OPERATING ACTIVITIES








Net income (loss)

$               34,254


$               24,339


$               36,879


$              (83,646)

Net (loss) income from discontinued operations, net of tax

-


(697)


11,255


(105,581)

Net income from continuing operations

34,254


25,036


25,624


21,935

Adjustments to reconcile net income from continuing operations to net cash provided
by operating activities from continuing operations:








Depreciation and amortization

12,814


12,927


37,768


40,069

Deferred income taxes

3,124


(3,880)


3,216


(9,035)

Equity in net (income) loss of equity-method investees

(70)


564


1,025


1,219

Stock-based compensation, net

3,698


3,761


11,888


9,581

Long-lived asset and intangibles impairment

-


13,525


57,676


15,414

Other non-cash items, net

2,259


(326)


494


2,335

(Decrease) increase in cash attributable to changes in operating assets and liabilities:








Accounts receivable

(11,198)


(38,410)


(20,721)


(30,870)

Inventories

(1,792)


37,891


(60,304)


47,280

Other current assets

769


8,407


56,487


10,302

Other assets and liabilities

85


76


(952)


(1,166)

Accounts payable and accrued expenses

(1,956)


(12,627)


34,316


(42,972)

Net cash provided by operating activities from continuing operations

41,987


46,944


146,517


64,092

CASH FLOWS FROM INVESTING ACTIVITIES








Purchases of property, plant and equipment

(23,391)


(17,624)


(53,062)


(46,961)

Proceeds from sale of businesses, net and other

22,667


1,308


27,094


14,428

Net cash used in investing activities from continuing operations

(724)


(16,316)


(25,968)


(32,533)

CASH FLOWS FROM FINANCING ACTIVITIES








Borrowings under bank revolving credit facility

56,000


50,000


206,000


197,000

Repayments under bank revolving credit facility

(94,000)


(9,000)


(231,000)


(254,500)

Repayments under term loan

-


-


-


(206,250)

(Repayments) proceeds from discontinued operations entities

-


(4,682)


-


305,247

Repayments of other debt, net

(206)


(1,001)


(1,917)


(1,502)

Share repurchases

(8,562)


(57,406)


(80,298)


(57,406)

Shares withheld for payment of employee payroll taxes

(2,018)


(522)


(3,741)


(1,506)

Net cash used in financing activities from continuing operations

(48,786)


(22,611)


(110,956)


(18,917)

Effect of exchange rate changes on cash from continuing operations

(84)


(3,492)


5,650


(2,110)

CASH FLOWS FROM DISCONTINUED OPERATIONS








Cash used in operating activities

-


(459)


-


(6,146)

Cash (used in) provided by investing activities

-


(4,223)


-


297,592

Cash provided by (used in) financing activities

-


4,682


-


(299,418)

Effect of exchange rate changes on cash from discontinued operations

-


-


-


(537)

Net cash flows used in discontinued operations

-


-


-


(8,509)

Net (decrease) increase in cash and cash equivalents

(7,607)


4,525


15,243


2,023

Cash and cash equivalents at beginning of period

60,621


37,024


37,771


39,526

Cash and cash equivalents at end of period

$               53,014


$               41,549


$               53,014


$               41,549

 

THE HAIN CELESTIAL GROUP, INC.

Net Sales, Gross Profit and Operating Income (Loss) by Segment

 (unaudited and in thousands) 










North America


International


Corporate/Other


Hain Consolidated

Net Sales








Net sales - Q3 FY21

$                 287,500


$                 205,104


$                            -


$                 492,604

Net sales - Q3 FY20

$                 320,440


$                 232,857


$                            -


$                 553,297

% change - FY21 net sales vs. FY20 net sales

(10.3)%


(11.9)%




(11.0)%









Gross Profit








Q3 FY21








Gross profit

$                   78,513


$                   51,393


$                            -


$                 129,906

Non-GAAP adjustments (1)

3,272


1,954


-


5,226

Adjusted gross profit

$                   81,785


$                   53,347


$                            -


$                 135,132

Gross margin

27.3%


25.1%




26.4%

Adjusted gross margin

28.4%


26.0%




27.4%









Q3 FY20








Gross profit

$                   82,626


$                   49,769


$                            -


$                 132,395

Non-GAAP adjustments (1)

1,873


-


-


1,873

Adjusted gross profit

$                   84,499


$                   49,769


$                            -


$                 134,268

Gross margin

25.8%


21.4%




23.9%

Adjusted gross margin

26.4%


21.4%




24.3%









Operating income (loss)








Q3 FY21








Operating income (loss)

$                   39,492


$                   26,774


$                 (16,689)


$                   49,577

Non-GAAP adjustments (1)

4,438


2,798


2,856


10,092

Adjusted operating income (loss)

$                   43,930


$                   29,572


$                 (13,833)


$                   59,669

Operating income margin

13.7%


13.1%




10.1%

Adjusted operating income margin

15.3%


14.4%




12.1%









Q3 FY20








Operating income (loss)

$                   28,873


$                   18,660


$                 (28,398)


$                   19,135

Non-GAAP adjustments (1)

9,202


4,512


12,824


26,538

Adjusted operating income (loss)

$                   38,075


$                   23,172


$                 (15,574)


$                   45,673

Operating income margin

9.0%


8.0%




3.5%

Adjusted operating income margin

11.9%


10.0%




8.3%









(1)See accompanying table "Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS"

 

THE HAIN CELESTIAL GROUP, INC.

Net Sales, Gross Profit and Operating Income (Loss) by Segment

 (unaudited and in thousands) 










North America


International


Corporate/Other


Hain Consolidated

Net Sales








Net sales - Q3 FY21 YTD

$                 850,780


$                 668,869


$                            -


$              1,519,649

Net sales - Q3 FY20 YTD

$                 872,834


$                 669,323


$                            -


$              1,542,157

% change - FY21 net sales vs. FY20 net sales

(2.5)%


(0.1)%




(1.5)%









Gross Profit








Q3 FY21 YTD








Gross profit

$                 231,813


$                 147,222


$                            -


$                 379,035

Non-GAAP adjustments (1)

6,438


3,869


-


10,307

Adjusted gross profit

$                 238,251


$                 151,091


$                            -


$                 389,342

Gross margin

27.2%


22.0%




24.9%

Adjusted gross margin

28.0%


22.6%




25.6%









Q3 FY20 YTD








Gross profit

$                 209,956


$                 125,877


$                            -


$                 335,833

Non-GAAP adjustments (1)

8,037


2,666


-


10,703

Adjusted gross profit

$                 217,993


$                 128,543


$                            -


$                 346,536

Gross margin

24.1%


18.8%




21.8%

Adjusted gross margin

25.0%


19.2%




22.5%









Operating income (loss)








Q3 FY21 YTD








Operating income (loss)

$                 105,188


$                     8,144


$                 (47,518)


$                   65,814

Non-GAAP adjustments (1)

8,929


63,792


7,981


80,702

Adjusted operating income (loss)

$                 114,117


$                   71,936


$                 (39,537)


$                 146,516

Operating income margin

12.4%


1.2%




4.3%

Adjusted operating income margin

13.4%


10.8%




9.6%









Q3 FY20 YTD








Operating income (loss)

$                   64,067


$                   40,666


$                 (73,952)


$                   30,781

Non-GAAP adjustments (1)

18,063


10,503


32,775


61,341

Adjusted operating income (loss)

$                   82,130


$                   51,169


$                 (41,177)


$                   92,122

Operating income margin

7.3%


6.1%




2.0%

Adjusted operating income margin

9.4%


7.6%




6.0%









(1)See accompanying table "Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS"

 

THE HAIN CELESTIAL GROUP, INC.

 Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS 

 (unaudited and in thousands, except per share amounts) 










Third Quarter


2021 GAAP

Adjustments

2021 Adjusted


2020 GAAP

Adjustments

2020 Adjusted









Net sales

$          492,604

$                -

$          492,604


$          553,297

$                -

$          553,297

Cost of sales

362,698

(5,226)

357,472


420,902

(1,873)

419,029

Gross profit

129,906

5,226

135,132


132,395

1,873

134,268

Operating expenses (a) 

76,368

(905)

75,463


102,146

(13,551)

88,595

Productivity and transformation costs

4,553

(4,553)

-


11,514

(11,514)

-

Proceeds from insurance claim

(592)

592

-


(400)

400

-

Operating income

49,577

10,092

59,669


19,135

26,538

45,673

Interest and other expense (income), net (b) 

3,596

(2,346)

1,250


3,777

679

4,456

Provision (benefit) for income taxes

11,797

1,950

13,747


(10,242)

22,129

11,887

   Net income from continuing operations

34,254

10,488

44,742


25,036

3,730

28,766

   Net (loss) income from discontinued operations, net of tax

-

-

-


(697)

697

-

Net income  

34,254

10,488

44,742


24,339

4,427

28,766









Diluted net income per common share from continuing operations

0.34

0.10

0.44


0.24

0.04

0.28

Diluted net (loss) income per common share from discontinued operations

-

-

-


(0.01)

0.01

-

Diluted net income per common share

0.34

0.10

0.44


0.23

0.05

0.28









Detail of Adjustments:










Q3 FY21




Q3 FY20


Warehouse/manufacturing consolidation and other costs


$           3,560




$              511


Plant closure related costs


1,666




-


SKU rationalization and inventory write-down


-




1,362


Cost of sales


5,226




1,873










Gross profit


5,226




1,873










Litigation and related expenses


644




-


Warehouse/manufacturing consolidation and other costs


263




26


Plant closure related costs


(2)




-


Long-lived asset impairment 


-




5,875


Intangibles impairment


-




7,650


Operating expenses (a) 


905




13,551










Productivity and transformation costs


4,553




11,514


Productivity and transformation costs


4,553




11,514










Proceeds from insurance claim


(592)




(400)


Proceeds from insurance claim


(592)




(400)










Operating income


10,092




26,538










Unrealized currency losses (gains) 


442




(1,011)


Loss on sale of businesses


1,904




332


Interest and other expense (income), net (b) 


2,346




(679)










Income tax related adjustments


(1,950)




(22,129)


Benefit for income taxes


(1,950)




(22,129)










   Net income from continuing operations


$         10,488




$           3,730









(a) Operating expenses include amortization of acquired intangibles, selling, general and administrative expenses and long-lived asset and intangibles impairment.

(b) Interest and other expense (income), net includes interest and other financing expenses, net and other expense, net.

 

THE HAIN CELESTIAL GROUP, INC.

 Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS 

 (unaudited and in thousands, except per share amounts) 










Third Quarter Year to Date


2021 GAAP

Adjustments

2021 Adjusted


2020 GAAP

Adjustments

2020 Adjusted









Net sales

$       1,519,649

$                -

$       1,519,649


$       1,542,157

$                -

$       1,542,157

Cost of sales

1,140,614

(10,307)

1,130,307


1,206,324

(10,703)

1,195,621

Gross profit

379,035

10,307

389,342


335,833

10,703

346,536

Operating expenses (a) 

301,442

(58,616)

242,826


270,065

(15,651)

254,414

Productivity and transformation costs

12,371

(12,371)

-


37,949

(37,949)

-

Proceeds from insurance claim

(592)

592

-


(2,962)

2,962

-

Operating income

65,814

80,702

146,516


30,781

61,341

92,122

Interest and other expense (income), net (b) 

5,968

(758)

5,210


17,380

(3,278)

14,102

Provision (benefit) for income taxes

33,197

215

33,412


(9,753)

31,818

22,065

   Net income from continuing operations

25,624

81,245

106,869


21,935

32,801

54,736

   Net income (loss) from discontinued operations, net of tax

11,255

(11,255)

-


(105,581)

105,581

-

Net income (loss) 

36,879

69,990

106,869


(83,646)

138,382

54,736









Diluted net income per common share from continuing operations

0.25

0.80

1.05


0.21

0.31

0.52

Diluted net income (loss) per common share from discontinued operations

0.11

(0.11)

-


(1.01)

1.01

-

Diluted net income (loss) per common share

0.36

0.69

1.05


(0.80)

1.32

0.52









Detail of Adjustments:










Q3 FY21 YTD




Q3 FY20 YTD


Warehouse/manufacturing consolidation and other costs


$           7,275




$           2,866


Plant closure related costs


2,721




2,559


SKU rationalization and inventory write-down


311




5,278


Cost of sales


10,307




10,703










Gross profit


10,307




10,703










Long-lived asset impairment 


57,676




5,875


Litigation and related expenses


644




48


Warehouse/manufacturing consolidation and other costs


263




189


Plant closure related costs


33




-


Intangibles impairment


-




9,539


Operating expenses (a) 


58,616




15,651










Productivity and transformation costs


12,371




37,949


Productivity and transformation costs


12,371




37,949










Proceeds from insurance claim


(592)




(2,962)


Proceeds from insurance claim


(592)




(2,962)










Operating income


80,702




61,341










Unrealized currency (gains) losses 


(535)




188


Loss on sale of businesses


1,293




2,115


Deferred financing cost write-off


-




975


Interest and other expense (income), net (b) 


758




3,278










Income tax related adjustments


(215)




(31,818)


Provision (benefit) for income taxes


(215)




(31,818)










   Net income from continuing operations


$         81,245




$         32,801










(a) Operating expenses include amortization of acquired intangibles, selling, general and administrative expenses and long-lived asset and intangibles impairment.

(b) Interest and other expense (income), net includes interest and other financing expenses, net and other expense, net.

 

THE HAIN CELESTIAL GROUP, INC.

Adjusted Net Sales Growth

(unaudited and in thousands)







Q3 FY21

North America


International


Hain Consolidated

 Net sales 

$                 287,500


$                 205,104


$                 492,604

 Divestitures and discontinued brands 

(320)


(4,144)


(4,464)

 Impact of foreign currency exchange 

(2,042)


(15,428)


(17,470)

 Net sales on a constant currency basis adjusted for
   divestitures and discontinued brands  

$                 285,138


$                 185,532


$                 470,670







Q3 FY20






 Net sales  

$                 320,440


$                 232,857


$                 553,297

 Divestitures and discontinued brands 

(10,717)


(42,462)


(53,179)

 Net sales adjusted for divestitures and discontinued
    brands  

$                 309,723


$                 190,395


$                 500,118







 Net sales decline 

(10.3)%


(11.9)%


(11.0)%

 Impact of divestitures and discontinued brands 

3.0%


15.9%


8.2%

 Impact of foreign currency exchange 

(0.6)%


(6.6)%


(3.2)%

 Net sales decline on a constant currency basis adjusted for
   divestitures and discontinued brands  

(7.9)%


(2.6)%


(6.0)%













Q3 FY21 YTD

North America


International


Hain Consolidated

 Net sales 

$                 850,780


$                 668,869


$              1,519,649

 Divestitures and discontinued brands 

(4,105)


(5,052)


(9,157)

 Impact of foreign currency exchange 

(2,144)


(35,133)


(37,277)

 Net sales on a constant currency basis adjusted for
   divestitures and discontinued brands  

$                 844,531


$                 628,684


$              1,473,215







Q3 FY20 YTD






 Net sales 

$                 872,834


$                 669,323


$              1,542,157

 Divestitures and discontinued brands 

(44,120)


(48,122)


(92,242)

 Net sales adjusted for divestitures and discontinued
    brands  

$                 828,714


$                 621,201


$              1,449,915







 Net sales decline 

(2.5)%


(0.1)%


(1.5)%

 Impact of divestitures and discontinued brands 

4.7%


6.5%


5.5%

 Impact of foreign currency exchange 

(0.2)%


(5.2)%


(2.4)%

 Net sales growth on a constant currency basis adjusted for
   divestitures and discontinued brands  

2.0%


1.2%


1.6%

 

THE HAIN CELESTIAL GROUP, INC.

 Adjusted EBITDA 

 (unaudited and in thousands) 










Third Quarter


Third Quarter Year to Date


2021


2020


2021


2020









Net income (loss)

$               34,254


$               24,339


$               36,879


$              (83,646)

Net (loss) income from discontinued operations, net of tax

-


(697)


11,255


(105,581)

Net income from continuing operations

$               34,254


$               25,036


$               25,624


$               21,935









Provision (benefit) for income taxes

11,797


(10,242)


33,197


(9,753)

Interest expense, net

1,327


3,332


4,781


11,884

Depreciation and amortization

12,814


12,927


37,768


40,069

Equity in net (income) loss of equity-method investees

(70)


564


1,025


1,219

Stock-based compensation, net

3,698


3,761


11,888


9,581

Unrealized currency losses (gains)

442


(1,011)


(535)


188

Productivity and transformation costs

3,915


10,967


10,428


37,402

Proceeds from insurance claim

(592)


(400)


(592)


(2,962)

Long-lived asset and intangibles impairment

-


13,525


57,676


15,414

Warehouse/manufacturing consolidation and other costs

3,598


537


7,313


3,055

Loss on sale of businesses

1,904


332


1,293


2,115

Litigation and related expenses

644


-


644


48

Plant closure related costs

21


-


17


2,354

SKU rationalization and inventory write-down

-


1,362


311


5,278

Adjusted EBITDA

$               73,752


$               60,690


$             190,838


$             137,827

 

THE HAIN CELESTIAL GROUP, INC.

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

(unaudited and in thousands)










North America


International


Corporate/
Other


Hain Consolidated

Q3 FY21








Operating income (loss)

$                      39,492


$                  26,774


$                 (16,689)


$                  49,577

Depreciation and amortization

4,432


7,688


694


12,814

Productivity and transformation costs

1,129


621


2,165


3,915

Proceeds from insurance claim

-


-


(592)


(592)

Warehouse/manufacturing consolidation and other costs

2,591


1,007


-


3,598

Plant closure related costs

21


-


-


21

Loss on sale of businesses

-


1,050


854


1,904

Litigation and related expenses

-


-


644


644

Other

842


(394)


1,423


1,871

Adjusted EBITDA

$                      48,507


$                  36,746


$                 (11,501)


$                  73,752









Net sales 

$                    287,500


$                 205,104




$                 492,604

Adjusted EBITDA margin 

16.9%


17.9%




15.0%










North America


International


Corporate/
Other


Hain Consolidated

Q3 FY20








Operating income (loss)

$                      28,873


$                  18,660


$                 (28,398)


$                  19,135

Depreciation and amortization

4,240


7,993


694


12,927

Productivity and transformation costs

5,000


941


5,026


10,967

Proceeds from insurance claim

-


-


(400)


(400)

Long-lived asset and intangibles impairment

2,303


3,571


7,651


13,525

SKU rationalization and inventory write-down

1,362


-


-


1,362

Warehouse/manufacturing consolidation and other costs

537


-


-


537

Loss on sale of businesses

253


-


79


332

Other

352


(238)


2,191


2,305

Adjusted EBITDA

$                      42,920


$                  30,927


$                 (13,157)


$                  60,690









Net sales 

$                    320,440


$                 232,857




$                 553,297

Adjusted EBITDA margin 

13.4%


13.3%




11.0%

 

THE HAIN CELESTIAL GROUP, INC.

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

(unaudited and in thousands)










North America


International


Corporate/
Other


Hain Consolidated

Q3 FY21 YTD








Operating income (loss)

$                    105,188


$                    8,144


$                 (47,518)


$                  65,814

Depreciation and amortization

12,693


22,969


2,106


37,768

Productivity and transformation costs

2,434


3,595


4,399


10,428

Proceeds from insurance claim

-


-


(592)


(592)

Long-lived asset impairment

(11)


56,104


1,583


57,676

Warehouse/manufacturing consolidation and other costs

4,413


2,900


-


7,313

SKU rationalization and inventory write-down

311


-


-


311

Loss (gain) on sale of businesses

205


(294)


1,382


1,293

Litigation and related expenses

-


-


644


644

Plant closure related costs

(7)


24


-


17

Other

2,002


2,181


5,983


10,166

Adjusted EBITDA

$                    127,228


$                  95,623


$                 (32,013)


$                 190,838









Net sales 

$                    850,780


$                 668,869




$              1,519,649

Adjusted EBITDA margin 

15.0%


14.3%




12.6%










North America


International


Corporate/
Other


Hain Consolidated

Q3 FY20 YTD








Operating income (loss)

$                      64,067


$                  40,666


$                 (73,952)


$                  30,781

Depreciation and amortization

12,789


24,258


3,022


40,069

Productivity and transformation costs

7,500


4,269


25,633


37,402

Proceeds from insurance claim

-


-


(2,962)


(2,962)

Long-lived asset and intangibles impairment

2,303


3,571


9,540


15,414

SKU rationalization and inventory write-down

5,099


179


-


5,278

Warehouse/manufacturing consolidation and other costs

3,055


-


-


3,055

Loss on sale of businesses

2,036


-


79


2,115

Plant closure related costs

72


2,282


-


2,354

Litigation and related expenses

-


-


48


48

Other

180


562


3,531


4,273

Adjusted EBITDA

$                      97,101


$                  75,787


$                 (35,061)


$                 137,827









Net sales 

$                    872,834


$                 669,323




$              1,542,157

Adjusted EBITDA margin 

11.1%


11.3%




8.9%

 

THE HAIN CELESTIAL GROUP, INC.

 Operating Free Cash Flow 

(unaudited and in thousands)










Third Quarter


Third Quarter Year to Date


2021


2020


2021


2020









Net cash provided by operating activities from continuing operations

$               41,987


$               46,944


$             146,517


$               64,092

Purchases of property, plant and equipment

(23,391)


(17,624)


(53,062)


(46,961)

Operating free cash flow from continuing operations

$               18,596


$               29,320


$               93,455


$               17,131

 

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SOURCE The Hain Celestial Group, Inc.

Chris Mandeville and Anna Kate Heller, ICR, hain@icrinc.com