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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 1, 2005
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THE HAIN CELESTIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
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Delaware 0-22818 22-3240619
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
58 South Service Road, Melville, NY 11747
(Address of principal executive offices)
Registrant's telephone number, including area code: (631) 730-2200
Not Applicable
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[X] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
The information contained in this Current Report on Form 8-K, including the
exhibit attached hereto, is being furnished pursuant to Item 2.02, "Results of
Operations and Financial Condition." This information shall not be deemed to be
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liabilities of that
Section, or incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Exchange Act, except as shall be expressly set forth
by specific reference in such filing.
On September 1, 2005, The Hain Celestial Group, Inc. issued a press release
announcing financial results for its fourth quarter and fiscal year ended June
30, 2005. The press release is attached hereto as Exhibit 99.1 and incorporated
herein by reference.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits. The following exhibits are filed herewith:
Exhibit No. Description
99.1 Press Release of the Company dated September 1, 2005.
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 hereunto duly authorized.
Date: September 1, 2005
THE HAIN CELESTIAL GROUP, INC.
(Registrant)
By: /s/ Ira J. Lamel
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Name: Ira J. Lamel
Title: Executive Vice President and
Chief Financial Officer
Exhibit 99.1
[HAIN CELESTIAL GROUP, INC. LOGO OMITTED]
Contact: Ira Lamel/Mary Anthes Jeremy Fielding/David Lilly
The Hain Celestial Group, Inc. Kekst and Company
631-730-2200 212-521-4800
THE HAIN CELESTIAL GROUP ANNOUNCES
FISCAL YEAR AND FOURTH QUARTER 2005 RESULTS
Fiscal Year Sales Increased 14% to a Record $620 Million
Net Income Increased 23% Excluding Previously Announced Charges
Fourth Quarter Net Income at $0.20 Per Share Increased 43%
Excluding Previously Announced Charges
Fiscal Year 2006 Guidance Issued
Revenues $650 Million to $670 Million
Earnings Per Share $0.98 to $1.05
Melville, NY, September 1, 2005--The Hain Celestial Group, Inc. (NASDAQ HAIN), a
leading natural and organic food and personal care products company, today
reported results for the fiscal year and fourth quarter ended June 30, 2005. Net
sales for fiscal year 2005 reached a record $620.0 million, a 14% increase over
prior year sales of $544.1 million. GAAP net income for fiscal year 2005 was
$0.59 per share including previously announced charges of $0.30 per share. Net
income for the fiscal year excluding the stock keeping unit ("SKU")
rationalization and stock compensation charges increased 23% to $33.1 million,
or $0.89 per share, versus the prior year earnings of $27 million, or $0.74 per
share. For the fourth quarter, the Company reported net sales of $151.3 million,
a 10.2% increase compared with $137.4 million in the prior year period. Fourth
quarter GAAP net income, including charges of $0.27 per share, resulted in GAAP
earnings of ($0.07) per share, with net income excluding charges at $0.20 per
share compared to $0.14 in the prior year period.
"In fiscal 2005 we were able to continue to grow our business by leveraging our
strengths to meet growing consumer demand for natural and organic products.
Strong execution of our business strategy and sales and marketing programs
increased sales by 14% and increased our net income per share, excluding
charges, by 20% for the year. We are particularly proud to have accomplished
this in an operating environment of warehouse consolidations and inventory
reductions by our primary distributors, coupled with rising input costs for the
natural and organic ingredients used in our products and soaring fuel and
transportation costs," said Irwin D. Simon, President and Chief Executive
Officer of Hain Celestial.
The Company's fourth quarter sales growth was achieved primarily through
increased brand sales across all major sales channels from Terra Chips(R)
(+25%); Garden of Eatin'(R) (+23%); Earth's Best(R) (+61%); Imagine(R) Soups
(+13%); Arrowhead Mills(R) (+7.3%); DeBoles(R) (+16%) and JASON(R) (+9%). The
Company's European sales increased 20%. Strong sales in these key brands were
partially offset by the elimination of CarbFit(R), which experienced strong
sales during the prior year before the decline in consumer demand for low
carbohydrate products.
As previously announced, under the SKU rationalization program, the Company
expects to eliminate over the next 12 to 18 months approximately 500 SKUs with
estimated annual sales of $15 million. It is anticipated that the elimination of
these SKUs will realize future cost savings of approximately $2 million
annually, while providing an increase in gross margin by 0.50%. During the
fourth quarter the Company recorded its previously announced $11 million SKU
rationalization charge effectively bringing the total charge for the entire
fiscal year 2005 to $12.2 million.
Also impacting the fourth quarter was the previously announced stock
compensation charge of $3.9 million resulting from the acceleration of the
vesting of employee stock options. This action was taken by the Company's Board
of Directors in order to provide an incentive to employees in view of the
uncertainty of future equity-based compensation with the implementation of
Financial Accounting Standards Board Statement No. 123(R), "Share-Based
Payments." The $3.9 million non-cash charge provided a disproportionately low
tax benefit of only $0.6 million and, therefore, had a significant impact on
GAAP earnings and the Company's tax rate.
The Company reported that its gross margin on sales after adjusting for the SKU
rationalization program was 27.2% for the fourth quarter compared to 27.3% in
the prior year quarter. Mr. Simon commented, "There is room to improve our gross
margin results in the future as we work on various cost-saving program
initiatives to further this goal. We expect a 0.50% improvement from our SKU
rationalization program, and we continue to press for production efficiencies at
both our owned manufacturing facilities and at co-packer facilities. It is
important to note that in light of increasing costs we have been successful in
maintaining our margins over these periods and reducing our SG&A as a percentage
of sales."
Fiscal Year 2005 Highlights
The Company highlighted several of its accomplishments during fiscal year 2005:
o Implemented price increases effective July 1, 2004 and June 1, 2005;
o Introduced innovative new and improved products across multiple key
categories in the natural foods sector;
o Launched brand extensions with Earth's Best Sesame Street Healthy
Habits for Life products and Earth's Best Baby Body Care by JASON;
o Integrated Fiscal Year 2004 acquisitions of Natumi(R), Ethnic
Gourmet(R), Rosetto(R) and JASON, establishing platforms for growth in
European non-dairy beverages and North American frozen foods and
personal care categories;
o Expanded premium skincare line through the acquisition of Zia(R)
Natural Skincare;
o Implemented SKU rationalization program to streamline the business and
focus on key growth opportunities;
o Established Free Operating Cash Flow Measurements, which resulted in a
17-day reduction to the Cash Conversion Cycle for the fourth quarter
to 69 days from 86 days in the prior year period; and
o Implemented Sarbanes-Oxley Section 404 Compliance.
Fiscal Year 2006 Outlook
The Company announced its fiscal year 2006 guidance of $650 million to $670
million in sales and earnings of $0.98 to $1.05 per share.
"As we enter fiscal year 2006, in addition to the benefit of the recent
acquisition of Zia Natural Skincare to our personal care products portfolio, we
have already put in place several exciting initiatives, including a license
agreement for our Rice Dream(R) and Soy Dream(R) refrigerated non-dairy
beverages with Stremicks Heritage Foods to broaden and increase our
distribution; a joint venture in the fast growing refrigerated poultry category
with antibiotic- and hormone-free Raised Right(R) chicken; an alliance with Yeo
Hiap Seng Limited to pursue joint interests in food marketing and product
development; and the pending acquisition of Spectrum Organic Products, Inc., a
leader in the fast growing healthy oils category." Mr. Simon concluded, "We have
the right management team in place to position Hain Celestial to capitalize on
growth opportunities through our superior brands, effective sales and marketing
programs as well as the continued increasing demand for natural and organic
products. We are all focused on executing our strategy to benefit shareholders,
customers, consumers and employees."
Webcast
Hain Celestial will host a conference call and live webcast at 8:30 AM Eastern
Time to review its fiscal year and fourth quarter 2005 results via the Hain
Celestial corporate website, www.hain-celestial.com, under Investor Relations
and thereafter through Audio Archives on the website.
The Hain Celestial Group
The Hain Celestial Group (NASDAQ: HAIN), headquartered in Melville, NY, is a
leading natural and organic food and personal care products company in North
America and Europe. Hain Celestial participates in almost all natural food
categories with well-known brands that include Celestial Seasonings(R), Terra
Chips(R), Garden of Eatin'(R), Health Valley(R), WestSoy(R), Earth's Best(R),
Arrowhead Mills(R), Hain Pure Foods(R), Raised Right(R), Hollywood(R), Walnut
Acres Organic(R), Imagine Foods(R), Rice Dream(R), Soy Dream(R), Rosetto(R),
Ethnic Gourmet(R), Yves Veggie Cuisine(R), Lima(R), Biomarche(R), Grains
Noirs(R), Natumi(R), JASON(R) and Zia(R) Natural Skincare. For more information,
visit www.hain-celestial.com.
Safe Harbor Statement
This press release contains forward-looking statements within and constitutes a
"Safe Harbor" statement under the Private Securities Litigation Act of 1995.
Except for the historical information contained herein, the matters discussed in
this press release are forward-looking statements that 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 risks
include but are not limited to general economic and business conditions; the
ability to implement business and acquisition strategies, integrate
acquisitions, and obtain financing for general corporate purposes; competition,
retention of key personnel and compliance 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 report on Form 10-K for the
fiscal year ended June 30, 2004. The forward-looking statements made in this
press release are current as of the date of this press release, and the Company
does not undertake any obligation to update forward-looking statements.
THE HAIN CELESTIAL GROUP, INC.
Consolidated Balance Sheets
(In thousands)
June 30, June 30,
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2005 2004
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ASSETS
Current assets:
Cash and cash equivalents $ 23,319 27,489
Trade receivables, net 66,489 69,392
Inventories 76,497 86,873
Recoverable income taxes 2,460 -
Deferred income taxes 5,786 3,111
Other current assets 20,729 11,449
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Total current assets
195,280 198,314
Property, plant and equipment, net 88,204 87,002
Goodwill, net 354,519 333,218
Trademarks and other intangible assets, net 57,324 55,793
Other assets 11,374 9,904
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Total assets $ 706,701 $ 684,231
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 65,487 59,031
Income taxes payable 1,139 2,489
Current portion of long-term debt 3,257 6,845
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Total current liabilities
69,883 68,365
Deferred income taxes 16,723 14,807
Long-term debt, less current portion 91,805 104,294
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Total liabilities
178,411 187,466
Stockholders' equity:
Common stock 375 371
Additional paid-in capital 404,517 394,740
Deferred compensation (1,872) (2,809)
Retained earnings 127,967 106,097
Treasury stock (12,745) (9,285)
Foreign currency translation adjustment 10,048 7,651
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Total stockholders' equity 528,290 496,765
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Total liabilities and stockholders' equity $ 706,701 $ 684,231
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THE HAIN CELESTIAL GROUP, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended June 30, Fiscal Year Ended June 30,
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2005 2004 2005 2004
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(Unaudited)
Net sales $ 151,349 $ 137,351 $ 619,967 $ 544,058
Cost of Sales 118,066 99,894 449,010 383,794
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Gross profit 33,283 37,457 170,957 160,264
SG&A expenses 31,759 28,748 128,119 114,014
Non-cash compensation 3,912 245 4,650 372
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Operating income (2,388) 8,464 38,188 45,878
Interest expense and other expenses 1,287 417 3,677 2,490
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Income before income taxes (3,675) 8,047 34,511 43,388
Income tax provision (987) 2,967 12,641 16,380
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Net income $ (2,688) $ 5,080 $ 21,870 $ 27,008
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Basic per share amounts $ (0.07) $ 0.14 0.60 $ 0.77
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Diluted per share amounts $ (0.07) $ 0.14 $ 0.59 $ 0.74
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Weighted average common shares
outstanding:
Basic 36,524 36,267 36,407 35,274
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Diluted 37,240 36,937 37,153 36,308
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THE HAIN CELESTIAL GROUP, INC.
Consolidated Statements of Operations With Adjustments
Reconciliation of GAAP Results to Non-GAAP Presentation
(in thousands, except per share amounts)
Three Months Ended June 30,
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2005 GAAP Adjustments 2005 Adjusted 2004
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(Unaudited)
Net sales 151,349 151,349 137,351
Cost of Sales 118,066 (7,826) (a) 110,240 99,894
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Gross profit 33,283 (7,826) 41,109 37,457
SG&A expenses 31,759 (3,117) (b) 28,642 28,748
Non-cash compensation 3,912 (3,912) - 245
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Operating income (2,388) (14,855) 12,467 8,464
Interest expense and
other expenses 1,287 1,287 417
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Income before income taxes (3,675) (14,855) 11,180 8,047
Income tax provision (987) 4,800 (c) 3,813 2,967
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Net income $ (2,688) $ (10,055) $ 7,367 $ 5,080
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Basic per share amounts $ (0.07) $ (0.28) $ 0.20 $ 0.14
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Diluted per share amounts $ (0.07) $ (0.27) $ 0.20 $ 0.14
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Weighted average common
shares outstanding:
Basic 36,524 36,524 36,524 36,267
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Diluted 37,240 37,240 37,240 36,937
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Fiscal Year Ended June 30,
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2005 Adjustments 2005 Adjusted 2004
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(Unaudited)
Net sales $ 619,967 $ 619,967 $ 544,058
Cost of Sales 449,010 $ (9,026) (a) 439,984 383,794
----------------------- ----------------------- ---------------------- -------------------
Gross profit 170,957 (9,026) 179,983 160,264
SG&A expenses 128,119 (3,117) (b) 125,002 114,014
Non-cash compensation 4,650 (4,650) - 372
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Operating income 38,188 (16,793) 54,981 45,878
Interest expense and
other expenses 3,677 3,677 2,490
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Income before income taxes 34,511 (16,793) 51,304 43,388
Income tax provision 12,641 5,547 (c) 18,188 16,380
----------------------- ----------------------- ---------------------- -------------------
Net income $ 21,870 (11,246) 33,116 27,008
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Basic per share amounts $ 0.60 $ (0.31) $ 0.91 $ 0.77
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Diluted per share amounts $ 0.59 $ (0.30) $ 0.89 $ 0.74
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Weighted average common
shares outstanding:
Basic 36,407 36,407 36,407 35,274
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Diluted 37,153 37,153 37,153 36,308
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(a) The adjustments of $7,826 (fourth quarter) and $9,026 (full year) represent
SKU rationalization charges included in cost of sales.
(b) The adjustments of $3,117 (fourth quarter and full year) represent SKU
rationalization charges included in SG&A expenses..
(c) The adjustments to taxes consist of $4,196 (fourth quarter) and $4,656
(full year) related to the SKU rationalization charge; $604 (fourth
quarter) and $891 (full year) related to non-cash compensation