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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): NOVEMBER 3, 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.
Except as otherwise stated below, 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.
Only the information under the headings "Acquisition of Spectrum
Organic Products," "Additional Information regarding the Spectrum Acquisition"
and "Participants in the Solicitation" in Exhibit 99.1 is being filed pursuant
to Rule 425.
On November 3, 2005, The Hain Celestial Group, Inc. (the
"Company") issued a press release announcing financial results for its first
quarter ended September 30, 2005. The press release is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits. The following exhibit is filed herewith:
Exhibit No. Description
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99.1 Press Release of the Company dated November 3, 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: November 3, 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
[THE 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
RECORD FIRST QUARTER RESULTS
Sales Grew 17% to $161 Million
Net Income Up 19%
Earnings Per Share $0.20 in the Quarter
Melville, NY, November 3, 2005--The Hain Celestial Group, Inc. (NASDAQ HAIN), a
leading natural and organic food and personal care products company, today
reported results for the first quarter ended September 30, 2005. Hain Celestial
reported first quarter record sales of $161.1 million, a 17% increase over the
prior year's $137.6 million. Net income reached a first quarter record of $7.4
million, a 19% increase over the prior year's $6.2 million. Diluted earnings per
share for the first quarter this year reached $0.20 as compared to $0.17 per
share in the prior year.
"Our sales growth came from our existing brand sales as we realized incremental
opportunities due to greater shelf space allocated to our faster-selling
products, a direct result of our stock keeping unit rationalization program. We
also benefited from the strength of new product introductions and new
distribution," commented Irwin D. Simon, President and Chief Executive Officer.
"With rising consumer demand for natural and organic products, we were able to
achieve strong top and bottom line growth."
The Company's first quarter sales growth was achieved by increased momentum from
Grocery and Snacks, Tea, Personal Care and in Canada and Europe. Sales from the
Company's brands were strong, with Terra Chips(R) up 14%, Garden of Eatin'(R) up
32%, Health Valley(R) up 13%, Earth's Best(R) up 61%, Imagine(R) soups up 52%,
Celestial Seasonings up 7%, Personal Care up 32%, Canada up 5% and Europe up
10%.
Sales growth from the new Hain Pure Protein joint venture, under the Raised
Right(R) brand of natural and antibiotic-free chicken, grew 11%, as the Company
pioneered its entry into one of the fastest growing categories in the natural
and organic sector. Hain Pure Protein operates at significantly lower margins
than the Company's other brands and as a result caused a 1.1% reduction in the
Company's overall gross profit percentage.
The Company's gross profit for the first quarter was 28.5% versus 28.3% in the
prior year period, as the Company continued to drive its focus on operating
efficiencies. Ira J. Lamel, the Company's Executive Vice President and Chief
Financial Officer, commented, "We continue to work diligently within an
environment of higher input costs. The recent high price levels of petroleum and
natural gas have impacted our overall business both directly with increased
inbound and outbound delivery costs, and indirectly with the pass-through of
costs from our suppliers of packaging and other major components of our finished
products. The results of our efforts to offset these input costs with strategic
price increases and operating efficiencies are succeeding, as gross profit
improved to 29.6% before the impact of Hain Pure Protein. We intend to continue
to work diligently to return our gross profits to levels above 30%."
The Company's operating income grew at a higher rate than its growth in sales to
$12.8 million, an 18.2% increase over the prior year quarter. Selling, general
and administrative expenses remained flat year-over-year at 20.5% of sales
despite dollar increases in these costs as, similar to product costs, pricing
pressures have impacted these expense lines as well. In October, the Company
announced an average 3% to 4% price increase across its Grocery and Snack brands
effective during the second quarter to offset the recent escalation of direct
and indirect fuel-related and other input costs.
"We increased our marketing, advertising and promotion program spending by
almost 13% in the quarter. We also incurred the costs of the completion of our
Sarbanes-Oxley implementation in this quarter, with $1 million in outside fees
and the addition of two new corporate positions in response to these expanded
requirements. We expect to realize additional benefits from these investments in
the future," Irwin Simon stated.
The Company has continued to focus on its working capital management. The number
of days in the Company's Cash Conversion Cycle for the quarter improved two days
when compared to the preceding quarter, and improved 27 days since the prior
year quarter. "We made significant strides in Fiscal 2005 in focusing on cash
conversion and are extremely pleased with the 27 days reduction since inception
of the program. We set the goal of a 10% reduction in our first year, and we
have far exceeded that goal, achieving a 28% reduction in the first year. We
anticipate continuing modest improvements as shown by this quarter's two day
reduction in the cycle," Ira Lamel said.
"As the world's largest natural and organic products company, we look forward to
continued growth driven by consumer awareness of the benefit of these products,"
said Irwin Simon. "With our portfolio of brands and new opportunities in some of
the fastest-growing categories in the natural and organic sector and with our
increased focus on operating efficiencies, Hain Celestial is well-positioned to
execute our strategy in fiscal year 2006," concluded Irwin Simon.
ACQUISITION OF SPECTRUM ORGANIC PRODUCTS
The Company's previously announced acquisition of Spectrum Organic Products,
Inc. is progressing toward an anticipated closing, subject to Spectrum
shareholder approval and other customary conditions, in December 2005. Spectrum
is a California-based leading manufacturer and marketer of natural and organic
culinary oils, vinegars, condiments and butter substitutes under the Spectrum
Naturals(R) brand and essential fatty acid nutritional supplements under the
Spectrum Essentials(R) brand, sold mainly through natural food retailers.
FISCAL YEAR 2006 OUTLOOK
The Company confirmed its fiscal year 2006 guidance of $650 million to $670
million in sales and earnings of $0.98 to $1.05 per share.
WEBCAST AND UPCOMING EVENTS
Hain Celestial will host a conference call and live webcast at 8:15 AM Eastern
Standard Time to review its first quarter 2006 results via the Hain Celestial
corporate website, www.hain-celestial.com. On November 8, 2005 the Company is
scheduled to present at the Bear Stearns SMid-Cap Investor Conference, and on
November 17, 2005 the Company is scheduled to present at the Lehman Brothers
Small Cap Conference. These presentations, as well as the Company's earnings
conference call, will be available in the Investor Relations section of the
Company's 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(TM), 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.
ADDITIONAL INFORMATION REGARDING THE SPECTRUM ACQUISITION
In connection with the proposed acquisition of Spectrum Organic Products, Inc.,
a registration statement registering shares of Hain Celestial's common stock,
including a proxy statement of Spectrum, has been filed and other materials will
be filed with the Securities and Exchange Commission ("SEC").
WE URGE INVESTORS TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT AND
THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors are able to obtain free copies of the registration statement and proxy
statement, and will be able to obtain free copies of other filed documents
containing information about Hain Celestial and Spectrum at www.sec.gov, the
SEC's website. Free copies of Hain Celestial's SEC filings also are available on
Hain Celestial's website at www.hain-celestial.com, or by request to Investor
Relations, The Hain Celestial Group, Inc., 58 South Service Road, Melville, New
York 11747. Free copies of Spectrum's SEC filings also are available on
Spectrum's Website at www.spectrumorganics.com, or by request to Investor
Relations, Spectrum Organic Products, Inc., 5341 Old Redwood Highway, Suite 400,
Petaluma, California 94954.
PARTICIPANTS IN THE SOLICITATION
The Company, Spectrum and their respective executive officers and directors may
be deemed, under SEC rules, to be participants in the solicitation of proxies
from Spectrum stockholders with respect to the Spectrum acquisition. Information
regarding the Company's officers and directors is included in its Notice of
Annual Meeting of Stockholders and Proxy Statement, as filed with the SEC on
October 31, 2005. Information regarding the officers and directors of Spectrum
is included in its Annual Report on Form 10-K for the fiscal year ended December
31, 2004, as filed with the SEC on March 24, 2005. More detailed information
regarding the identity of potential participants and their interests in the
solicitation will be set forth in the registration statement and proxy statement
and other materials to be filed with the SEC in connection with the proposed
transaction.
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; 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, 2005. 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.
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THE HAIN CELESTIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, June 30,
2005 2005
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 20,021 $ 24,139
Trade receivables, net 73,478 67,148
Inventories 83,567 76,497
Recoverable income taxes 2,590 2,575
Deferred income taxes 5,671 5,671
Other current assets 18,623 18,164
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Total current assets 203,950 194,194
Property, plant and equipment, net 93,120 88,204
Goodwill, net 358,261 350,833
Trademarks and other intangible assets, net 60,875 61,010
Other assets 12,635 12,895
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Total assets $ 728,841 $ 707,136
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 62,675 $ 65,922
Income taxes payable 5,833 1,139
Current portion of long-term debt 4,148 2,791
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Total current liabilities 72,656 69,852
Deferred income taxes 16,723 16,723
Long-term debt, less current portion 90,785 92,271
Minority Interest 4,772 -
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Total liabilities 184,936 178,846
Stockholders' equity:
Common stock 378 375
Additional paid-in capital 409,500 404,517
Deferred compensation (1,638) (1,872)
Retained earnings 135,330 127,967
Treasury stock (12,745) (12,745)
Foreign currency translation adjustment 13,080 10,048
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Total stockholders' equity 543,905 528,290
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Total liabilities and stockholders' equity $ 728,841 $ 707,136
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THE HAIN CELESTIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended September 30,
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2005 2004
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(Unaudited)
Net sales $ 161,097 $ 137,604
Cost of Sales 115,248 98,629
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Gross profit 45,849 38,975
SG&A expenses 33,095 28,185
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Operating income 12,754 10,790
Interest expense and other expenses 868 655
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Income before income taxes 11,886 10,135
Income tax provision 4,523 3,953
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Net income $ 7,363 $ 6,182
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Basic per share amounts $ 0.20 $ 0.17
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Diluted per share amounts $ 0.20 $ 0.17
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Weighted average common shares outstanding:
Basic 36,636 36,273
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Diluted 37,560 36,855
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