UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
————————————
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 2,
2006
————————————
THE
HAIN CELESTIAL GROUP, INC.
(Exact
name of registrant as specified in its charter)
————————————
|
Delaware
|
0-22818
|
22-3240619
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer 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)
————————————
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:
[
]
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))
Item
2.02.
Results of Operations and Financial Condition.
The
following information is being furnished under Item 2.02, “Results of Operations
and Financial Condition.” This information shall not be deemed “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 a filing.
On
November 2, 2006, The Hain Celestial Group, Inc. issued the press release
attached as Exhibit 99.1 and incorporated by reference herein, announcing
financial results for its fiscal quarter ended September 30, 2006.
Item
9.01.
Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed herewith:
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release dated November 2, 2006.
|
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
2, 2006
|
THE
HAIN CELESTIAL GROUP, INC.
|
|
(Registrant)
|
|
By:
/s/
Ira J. Lamel
|
|
Name: Ira J. Lamel
|
|
Title:
Executive
Vice President and
|
|
Chief Financial Officer
|
|
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
FIRST
QUARTER 2007 RESULTS
Sales
Reach $210 Million on 30% Growth
GAAP
Net Income of $0.23 Per Share at $9 Million Grew 31%
Adjusted
Earnings at $0.25 Per Share Grew 39%
Melville,
NY, November 2, 2006 —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, 2006. The Company reported net sales of $210.2 million,
a
30% increase compared with $161.1 million in the prior year first quarter.
GAAP
net income for the first quarter was $9.0 million, or $0.23 per diluted share,
a
31% increase over the prior year’s $6.9 million, or $0.18 per diluted share.
Adjusted
earnings in the quarter totaled $0.25 per share. The reported results include
$1.1 million ($0.7 million after tax) of previously announced start-up costs
at
the Company’s West Chester Frozen Foods Facility, a gain of $2.5 million ($1.1
million after tax) from the sale of the Company’s Biomarché fresh produce
operation in Belgium, and a charge of $2.2 million ($1.4 million after tax)
for
an unfavorable decision by the German government regarding value added tax
on
all non-dairy beverage products.
“Our
fiscal year 2007 is off to an excellent start. During the first quarter we
achieved strong sales from Earth’s Best®, Garden of Eatin’®, Rice Dream®, Soy
Dream®, WestSoy®, Westbrae®, Ethnic Gourmet™, Casbah®, FreeBird™ and JASON®. We
also drove strong results from our brands in Canada, and from our recent
acquisitions,” said Irwin D. Simon, President and Chief Executive Officer of
Hain Celestial. “Rising consumer demand for natural and organic food and
personal care products continues across many distribution channels in North
America, Europe and the United Kingdom, enabling us to realize solid top and
bottom line growth at the Company. We continue to integrate our recent
acquisitions into our existing infrastructure, and look forward to continuing
to
achieve further margin efficiencies, general and administrative cost savings,
and to improving our return on equity.”
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
The
Company reported gross margin of 28.1% in the first quarter, compared to 28.5%
in the prior year’s first quarter. Adjusted gross margin was 29.6% excluding
start-up costs at the Company’s West Chester Frozen Foods Facility and the
Company’s lower margin business in the UK. The Company continues to operate in
an environment of high input costs, and the Company’s recently implemented price
increase effective in September 2006 is expected to benefit the Company in
the
second quarter.
Selling,
general and administrative expense for the first quarter was 19.9%, compared
to
21.0% a year ago as the Company continues to benefit from its increasing scale
and disciplined strategy for building effective marketing programs.
Interest
expense in the quarter was $2.5 million and interest income was $0.6 million.
On
August 31, 2006, the Company sold its Biomarché fresh produce operation in
Belgium, resulting in a pre-tax gain of $2.5 million. The gain was reduced
by
taxes of $1.4 million to a net gain of $1.1 million, with the effective tax
rate
on the gain unusually high as $3.3 million of goodwill allocated to the
Biomarché operation and charged off against the gain is not tax deductible. Also
in the quarter, the Company incurred a pre-tax charge of $2.2 million ($1.4
million after tax) resulting from an unfavorable ruling in Germany regarding
value added tax (VAT) on non-dairy beverages sold by all producers in Germany.
This decision by the German government overturns what was previously a favorable
decision handed down shortly after our acquisition of the non-dairy operation
in
Germany in 2004. There will be no impact on future operations as VAT is a
pass-through tax. These items are included in interest and other expense, net.
The
Company’s effective tax rate for the quarter was 38.6%, excluding the taxes
provided on the Biomarché gain and from the VAT charge. The effective tax rate
in the quarter therefore appears in the financial statements at a higher rate
of
41.6%.
Average
diluted shares outstanding in the quarter were 40.0 million, an increase of
2.5
million shares, or 6.6% over the first quarter of the prior year. The increase
resulted from additional shares issued during fiscal year 2006 for acquisitions,
employee stock option exercises, and higher equivalent shares included in the
earnings per share calculation, resulting from the Company’s higher share
price.
The
Company’s balance sheet remains strong with $196.6 million in working capital
with a current ratio of 2.8 at September 30, 2006. Debt as a percentage of
equity was 24.1% with equity at $630.3 million. The number of days in the
Company’s cash conversion cycle was 67. Operating free cash flow was
$16.3
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
million
for the first quarter this year and $58.1 million for the trailing twelve months
ended September 30, 2006.
“We
continue to focus on driving efficiencies and reinvesting in our business,
most
recently at our West Chester Frozen Foods Facility, where we have expanded
capacity and production for our Ethnic Gourmet and Rosetto brands and expect
to
further increase our production,” commented Irwin Simon. “With our first quarter
completed, we continue to see positive trends in the second quarter with
increased demand for natural and organic products and strong consumption for
our
products,” concluded Irwin Simon.
Fiscal
Year 2007 Guidance
The
Company reconfirmed its fiscal year 2007 sales guidance of $880 million to
$900
million and earnings per share of $1.15 to $1.19.
Webcast
and Upcoming Events
Hain
Celestial will host a conference call and webcast at 4:15 PM Eastern Standard
Time today to review its first quarter fiscal year 2007 results. On November
16,
2006, the Company is scheduled to present at the Lehman Brothers Small Cap
Conference. These events will be available under the Investor Relations section
of the Company’s website at www.hain-celestial.com.
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®, Terra Chips®, Garden of
Eatin’®, Health Valley®, WestSoy®, Earth’s Best®, Arrowhead Mills®, DeBoles®,
Hain Pure Foods®, FreeBird™, Hollywood®, Spectrum Naturals®, Spectrum
Essentials®, Walnut Acres Organic™, Imagine Foods®, Rice Dream®, Soy Dream®,
Rosetto®, Ethnic Gourmet™, Yves Veggie Cuisine®, Linda McCartney®, Lima®, Grains
Noirs®, Natumi®, JASON®, Zia® Natural Skincare and Queen Helene®. 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
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
include
but are not limited to general economic and business conditions; the ability
to
implement business and acquisition strategies and integrate acquisitions;
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, 2006. 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)
|
|||||||
|
September
30,
|
June
30,
|
||||||
|
2006
|
2006
|
||||||
|
(Unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
78,143
|
$
|
48,875
|
|||
|
Trade
receivables, net
|
95,215
|
80,764
|
|||||
|
Inventories
|
111,440
|
105,883
|
|||||
|
Deferred
income taxes
|
3,843
|
2,986
|
|||||
|
Other
current assets
|
17,291
|
21,968
|
|||||
|
Total
current assets
|
305,932
|
260,476
|
|||||
|
Property,
plant and equipment, net
|
113,982
|
119,830
|
|||||
|
Goodwill,
net
|
416,836
|
421,002
|
|||||
|
Trademarks
and other intangible assets, net
|
62,260
|
61,626
|
|||||
|
Other
assets
|
16,001
|
14,750
|
|||||
|
Total
assets
|
$
|
915,011
|
$
|
877,684
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable and accrued expenses
|
$
|
100,281
|
$
|
81,894
|
|||
|
Income
taxes payable
|
8,175
|
3,083
|
|||||
|
Current
portion of long-term debt
|
840
|
1,065
|
|||||
|
Total
current liabilities
|
109,296
|
86,042
|
|||||
|
Deferred
income taxes
|
19,086
|
19,086
|
|||||
|
Long-term
debt, less current portion
|
151,172
|
151,229
|
|||||
|
Minority
Interest
|
5,184
|
4,926
|
|||||
|
Total
liabilities
|
284,738
|
261,283
|
|||||
|
Stockholders'
equity:
|
|||||||
|
Common
stock
|
398
|
396
|
|||||
|
Additional
paid-in capital
|
450,657
|
446,319
|
|||||
|
Retained
earnings
|
174,068
|
165,034
|
|||||
|
Treasury
stock
|
(12,745
|
)
|
(12,745
|
)
|
|||
|
Foreign
currency translation adjustment
|
17,895
|
17,397
|
|||||
|
Total
stockholders' equity
|
630,273
|
616,401
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
915,011
|
$
|
877,684
|
|||
|
THE
HAIN CELESTIAL GROUP, INC.
|
|||||||
|
Consolidated
Statements of Operations
|
|||||||
|
(in
thousands, except per share amounts)
|
|||||||
|
Three
Months Ended September 30,
|
|||||||
|
2006
|
2005
|
||||||
|
(Unaudited)
|
|||||||
|
Net
sales
|
$
|
210,207
|
$
|
161,097
|
|||
|
Cost
of Sales
|
151,065
|
115,248
|
|||||
|
Gross
profit
|
59,142
|
45,849
|
|||||
|
SG&A
expenses
|
41,846
|
33,869
|
|||||
|
Operating
income
|
17,296
|
11,980
|
|||||
|
Interest
expense and other, net
|
1,820
|
868
|
|||||
|
Income
before income taxes
|
15,476
|
11,112
|
|||||
|
Income
tax provision
|
6,442
|
4,221
|
|||||
|
Net
income
|
$
|
9,034
|
$
|
6,891
|
|||
|
Basic
per share amounts
|
$
|
0.23
|
$
|
0.19
|
|||
|
Diluted
per share amounts
|
$
|
0.23
|
$
|
0.18
|
|||
|
Weighted
average common shares outstanding:
|
|||||||
|
Basic
|
38,746
|
36,636
|
|||||
|
Diluted
|
40,023
|
37,560
|
|||||
|
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 September 30,
|
|||||||||||||||||||
|
2006
GAAP
|
Adjustments
|
2006
Adjusted
|
2005
Adjusted
|
||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||
|
Net
sales
|
$
|
210,207
|
$
|
210,207
|
$
|
161,097
|
|||||||||||||
|
Cost
of Sales
|
151,065
|
$
|
(1,108
|
)
|
(1)
|
|
149,957
|
115,248
|
|||||||||||
|
Gross
profit
|
59,142
|
1,108
|
60,250
|
45,849
|
|||||||||||||||
|
SG&A
expenses
|
41,846
|
41,846
|
33,869
|
(4)
|
|
||||||||||||||
|
Operating
income
|
17,296
|
1,108
|
18,404
|
11,980
|
|||||||||||||||
|
Interest
and other expenses, net
|
1,820
|
264
|
(2)
|
2,084
|
868
|
||||||||||||||
|
Income
before income taxes
|
15,476
|
844
|
16,320
|
11,112
|
|||||||||||||||
|
Income
tax provision
|
6,442
|
(146
|
)
|
(3)
|
6,296
|
4,221
|
|||||||||||||
|
Net
income
|
$
|
9,034
|
$
|
990
|
$
|
10,024
|
$
|
6,891
|
|||||||||||
|
Basic
per share amounts
|
$
|
0.23
|
$
|
0.03
|
$
|
0.26
|
$
|
0.19
|
|||||||||||
|
Diluted
per share amounts
|
$
|
0.23
|
$
|
0.02
|
$
|
0.25
|
$
|
0.18
|
|||||||||||
|
Weighted
average common shares outstanding:
|
|||||||||||||||||||
|
Basic
|
38,746
|
38,746
|
38,746
|
36,636
|
|||||||||||||||
|
Diluted
|
40,023
|
40,023
|
40,023
|
37,560
|
|||||||||||||||
(1)
Start-up costs at the Company's West Chester Frozen Foods Facility.
(2)
The
adjustment of $264 includes $2,510 pre-tax gain on the sale of Biomarché, and
$2,246 pre-tax charge for the unfavorable decision by the German government
regarding the application of VAT on non-dairy beverages.
(3)
Tax
adjustments include a tax provision of $1,433 on the gain on sale of
Biomarché,
net of tax benefits of $430 for the start-up costs at the Company's West
Chester
Frozen Foods Facility and $857 on the charge for VAT.
(4)
SG&A in the three months ended September 30, 2005 has been adjusted to
reflect the $774 charge ($472 after tax) in connection with the requirements
of
SFAS 123R to record compensation expense for the contractual requirement
to
grant stock options.