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): August 29,
2007
————————————
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:
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
| o |
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
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
August
29, 2007, The Hain Celestial Group, Inc. announced results for the quarter
and
twelve months ended June 30, 2007 and disclosed that it was not yet in a
position to file its Annual Report on Form 10-K for the year ended June 30,
2007
in light of the matters discussed under Item 8.01.
A
copy of
the press release containing the announcement is included as Exhibit 99.1 to
this Current Report and is incorporated herein by reference.
Item
8.01 Other Events
In
response to the previously disclosed notice from the Securities and Exchange
Commission (the “SEC”) that it was conducting an inquiry into the Company’s
stock option practices, the Company undertook a review of past practices in
connection with grants of stock options. This review is being conducted with
newly engaged outside legal counsel for the specific purpose of the
investigation, at the direction of a group of independent directors. As
previously disclosed, the Company is cooperating with the SEC’s
investigation.
While
counsel’s review is substantially complete, the Company is not yet in a position
to file its Annual Report on Form 10-K for the year ended June 30, 2007.
Therefore, the financial information included in the attached release remains
unaudited and certain items in the balance sheet, such as shareholder equity
and
deferred tax accounts, are subject to the conclusion of the review.
Item
9.01.
Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed herewith:
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release dated August 29, 2007.
|
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: August
29, 2007
| 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 RECORD
FOURTH
QUARTER AND FISCAL YEAR 2007 RESULTS
Sales
Grew 14.1% in the Fourth Quarter
And
21.9% for the Full Year
GAAP
Net Income $0.30 Per Share in Fourth Quarter
And
$1.17 Per Share for Full Year
Announces
2008 Guidance
Revenue
$1.025 to $1.050 Billion
Earnings
$1.38 to $1.42 Per Share
Hain
Pure Protein Acquisition of Plainville Turkey Farm
Independent
Review of Option Grants and Procedures
Substantially
Complete
Melville,
NY, August 29, 2007—The
Hain
Celestial Group, Inc. (NASDAQ: HAIN), a leading natural and organic food and
personal care products company, today reported record results for the fourth
quarter and fiscal year ended June 30, 2007.
The
Company reported net sales of $222.3 million, a 14.1% increase, compared with
$194.8 million in the prior year fourth quarter. Net income reached $12.3
million, an increase of 40.2% over the prior year fourth quarter of $8.8
million. Diluted earnings per share for the quarter totaled $0.30 per share
compared to $0.22 per share in the prior year fourth quarter, a 36.4% increase.
Full fiscal year sales reached a record $900.4 million, a 21.9% increase over
prior year sales of $738.6 million. Diluted earnings per share for the full
year
was a record $1.17 compared with $0.95 per share, a 23.2% increase.
“The
fundamentals of our business remain strong, as the execution of our strategy
is
driving the growth of our natural and organic products through a variety of
distribution channels. We are particularly pleased with the contribution in
North America from many of our leading brands including Rice Dream®, Terra®,
Earth’s Best®, Arrowhead Mills®, Health Valley®, Avalon® and Jason® as well as
Hain Pure Protein. As we had expected, Celestial Seasonings® remained challenged
during the fourth quarter in a very competitive category. We are doing the
right
things for the long-term health of the brand, with a restaging that includes
new
packaging, which is now entering distribution. The steps we have taken impacted
the brand’s performance and our overall results in the fourth quarter.
Internationally, our European operations, including the United Kingdom, also
had
a positive fourth quarter,” said Irwin D. Simon, President and Chief Executive
Officer of Hain Celestial.
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
“During
fiscal year 2008, we intend to maintain our focus on margin enhancement and
operating efficiencies to strengthen our business and offset higher input costs.
We believe this is the most effective way to drive sustainable growth and shareholder
value. Specifically, we expect to achieve greater economies as we further consolidate
our recently acquired operations in the United Kingdom and in Personal Care.
At the same time, we will continue to provide high quality brands and products
to leverage the ongoing growth in consumer demand for 'better-for-you' foods
and personal care items,” continued Irwin Simon.
The
Company reported gross margin of 27.9% in the fourth quarter, compared to 26.5%
in the prior year fourth quarter. For the full year, gross margin was 29.0%
compared to 28.9% for the prior year. Margin improvements achieved through
productivity gains and price increases were offset by the challenges at
Celestial Seasonings, in addition to that unit continuing to contribute a lower
percentage of the Company’s sales.
Selling,
general and administrative expense for the fourth quarter was 19.4% of net
sales
compared to 18.2% in the prior year, the increase coming from increased
amortization of acquired intangibles resulting from numerous recent acquisitions
and increased professional fees. For the full year, selling, general and
administrative expense was 19.7% versus 20.0% in the prior year.
Interest
expense, net, in the fourth quarter was $2.8 million versus $1.8 million in
the
prior year quarter. The higher interest cost this year was the result of higher
borrowings for the January acquisition of Avalon Natural Products and a full
quarter of interest this year on $150 million in senior debt versus the prior
year quarter.
The
Company’s effective tax rate for the full year was 38.2% versus 37.8% in the
prior year.
Average
diluted shares outstanding for the quarter were 41.7 million, an increase of
1.6
million shares or 4% over the prior year quarter and 41.1 million for the full
year. The increase resulted from additional shares issued for the exercise
of
employee stock options, shares issued to Yeo Hiap Seng Limited and higher
equivalent shares included in the earnings per diluted share calculation as
a
result of the Company’s higher share price.
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
The
Company’s balance sheet remains strong, with $200.5 million in working
capital and a current ratio of 2.7 at June 30, 2007. Debt as a percentage of
equity was 31% with equity at $696.9 million. The number of days in the Company’s
cash conversion cycle was 77 compared to 72 days in the prior year period, due
to higher levels of inventory at Celestial Seasonings and the recently acquired
Avalon Natural Products. Additionally, the Company’s recently acquired
Haldane unit had an inventory build-up in anticipation of the planned consolidation
of one of the facilities acquired into our existing Fakenham facility. Operating
free cash flow was $55.0 million for the fiscal year versus $38.1 million in
the comparable period of the prior year, an increase of 44%.
In
the
fourth quarter of this year, the Company succeeded in efforts to collect back
from wholesale customers valued added tax (“VAT”) that had not been previously
charged to them, resulting in the reversal of the first quarter charge after
an
unfavorable decision in a court appeals process in Germany. As a result, other
income in the fourth quarter this year includes the reversal of $2.2 million,
pre-tax, or $0.03 per share. This VAT reversal offset the lower sales and higher
marketing costs at Celestial Seasonings in the fourth quarter.
The
Securities and Exchange Commission (the “SEC”) issued Staff Accounting
Bulletin (SAB) No. 108 in September 2006, which we adopted in fiscal 2007. We
adjusted our beginning retained earnings for fiscal 2007 to recognize a reserve
for expected trade promotional expenses for certain reporting units on a basis
consistent with all other reporting units. The adoption resulted in adjusting
our results for the nine months ended March 31, 2007, decreasing net sales and
pretax income by $0.9 million or $0.6 million ($0.02 per share) after tax.
“We’re
excited about our business prospects in fiscal year 2008 with our existing
business and opportunities to expand our brands into new categories. The pending
acquisition of TenderCare International later this year positions Earth’s Best
to roll-out diapers and wipes. Our alliance with Yeo Hiap Seng Limited expands
our product offerings in the Asian markets with the soon to be introduced Yeo’s
Soy Dream®. And we are excited about the restaging of Celestial Seasonings
specialty teas and the introduction of Saphara™, our new premium organic tea in
a pyramid bag and Celestial Seasonings organic, fair-trade certified coffees.
And these are just a few of the exciting brand innovations planned this fiscal
year,” added Irwin Simon.
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
“We
are
focused on driving further profitable growth and international expansion
opportunities. With a plan that is already being implemented to reinvigorate
Celestial Seasonings, our business is on the right track, with solid execution
in Grocery and strong fundamentals in Personal Care. Our talented people and
management team all over the world are enabling the Company to meet the strong
general interest and consumer demand for innovative and healthy natural and
organic products and to promote A Healthy Way of Life™. The Company is
positioned to capitalize on these opportunities through our superior brands
and
with effective marketing and sales to benefit our shareholders, customers,
consumers and employees,” said Irwin Simon.
Acquisition
of Plainville Turkey Farm, Inc.
The
Company announced the acquisition of Plainville Turkey Farm, Inc. through its
Hain Pure Protein Corporation joint venture, of which the Company controls
50.1%
with the remaining minority interest of 49.9% owned by Pegasus Capital Advisors,
LP. Located near Syracuse, New York, Plainville has been growing and processing
turkey since 1923 and today is a leading supplier of natural and antibiotic-free
whole turkeys and deli turkey products primarily serving the natural and grocery
channels in the Northeast and Mid-Atlantic regions. Plainville Turkey Farm
generated approximately $30 million in sales in its last fiscal year. The
Company expects the transaction to be slightly accretive to earnings in fiscal
year 2008.
“We’re
excited to expand our specialty poultry business with a well-recognized industry
leader in Plainville Turkey Farm. Mark Bitz, a sixth generation member of the
family, will be joined by James Reed, an industry veteran from ConAgra Foods,
Inc., Empire Kosher Inc. and most recently Cameco Inc. in the day-to-day
operations of the business. As a company with headquarters in New York, we
also
look forward to adding to our operations in the state,” concluded Irwin Simon.
Fiscal
Year 2007 Highlights
The
Company highlighted several of its accomplishments during fiscal year
2007:
| · |
Achieved
continued solid sales and earnings growth driven by increased consumption
and margin enhancement
|
| · |
Implemented
price increases to offset increasing input
costs
|
| · |
Introduced
innovative new products across multiple product categories
|
| · |
Expanded
the meat-free and non-dairy beverage offerings in the United Kingdom
with
the acquisition of Haldane Foods and relaunched the Linda McCartney®
brand
|
| · |
Solidified
personal care positioning in skin care, hair care, bath and body and
sun
care with the acquisition of the Avalon Organics and Alba Botanica
brands
|
| · |
Entered
the tofu category with the acquisition of the meat-alternative business
of
WhiteWave Foods
|
| · |
Increased
its equity investment in Yeo Hiap Seng Limited to provide co-branded
product offerings and other joint interests in Asia
|
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
Fiscal
Year 2008 Guidance Outlook
The
Company announced fiscal year 2008 sales guidance of $1.025 to $1.050 billion,
an increase of 14% to 17% over 2007 sales and earnings of $1.38 to $1.42 per
share, an increase of 18% to 21% on its existing business, inclusive of the
Plainville Turkey Farm acquisition.
Update
on Review of Stock Options Grants and Procedures
On
June
15, 2007 the Company announced that it had been informed by the SEC that it
was
conducting an informal inquiry into its stock options practices. The Company
at
that time also stated its intention to cooperate with the SEC’s investigation.
A
group
of independent directors of the Company’s Board of Directors was appointed to
review the Company’s stock options grants and procedures. This review is being
conducted with the assistance of independent legal counsel and experts retained
by counsel.
While
counsel’s review is substantially complete, the Company is not yet in a position
to file its Annual Report on Form 10-K for the year ended June 30, 2007. The
Company intends to incorporate the results of the review in the upcoming filing
of its Form 10-K. Therefore, the financial information included in this release
remains unaudited and certain items in the balance sheet, such as stockholders’
equity and deferred tax accounts, are subject to the conclusion of the
review.
Webcast
and Upcoming Events
Hain
Celestial will host a conference call and webcast at 4:15 PM Eastern Daylight
Time today to review its fourth quarter and full fiscal year 2007 results.
On
September 5, 2007, the Company is scheduled to present at the Lehman Brothers
Back-To-School Consumer Conference. On September 19, 2007, the Company is
scheduled to present at the RBC Capital Markets Consumer Conference. These
events will be webcast and available under the Investor Relations section of
the
Company’s website at www.hain-celestial.com.
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
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™, Plainville Farms™, Hollywood®, Spectrum Naturals®,
Spectrum Essentials®, Walnut Acres Organic™, Imagine Foods™, Rice Dream®, Soy
Dream®, Rosetto®, Ethnic Gourmet®, Yves Veggie Cuisine®, Linda McCartney®,
Realeat®, Lima®, Grains Noirs®, Natumi®, JASON®, Zia® Natural Skincare, Avalon
Organics®, Alba Botanica® 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
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; the results of the stock
options review described above; compliance with government regulations,
including the rules on proxy solicitations when necessary or required, and
other
risks detailed from time-to-time in the Company's reports filed with the
Securities and Exchange Commission, including the annual report on Form 10-K
for
the fiscal year ended June 30, 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.
In
connection with the proposed transaction, a proxy statement of TenderCare International,
Inc. and other materials will be filed with the SEC. WE URGE INVESTORS TO READ
THE PROXY STATEMENT AND THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the proxy statement, when available,
as well as other filed documents containing information about Hain Celestial
and TenderCare 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 Mary Anthes, Vice-President - Investor Relations, The Hain
Celestial Group, Inc., 58 South Service Road, Melville, New York 11747.
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
|
THE
HAIN CELESTIAL GROUP, INC.
|
|
Consolidated
Balance Sheets
|
|
(In
thousands)
|
|
June
30,
|
|
June
30,
|
|
||||
|
|
|
2007
|
|
2006
|
|
||
|
|
|
(Unaudited)
|
|
||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
60,518
|
$
|
48,875
|
|||
|
Trade
receivables, net
|
95,405
|
80,764
|
|||||
|
Inventories
|
129,062
|
105,883
|
|||||
|
Recoverable
income taxes
|
3,687
|
-
|
|||||
|
Deferred
income taxes
|
8,069
|
2,986
|
|||||
|
Other
current assets
|
19,263
|
21,968
|
|||||
|
Total
current assets
|
316,004
|
260,476
|
|||||
|
Property,
plant and equipment, net
|
114,901
|
119,830
|
|||||
|
Goodwill,
net
|
509,336
|
421,002
|
|||||
|
Trademarks
and other intangible assets, net
|
96,342
|
61,626
|
|||||
|
Other
assets
|
21,873
|
14,750
|
|||||
|
Total
assets
|
$
|
1,058,456
|
$
|
877,684
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable and accrued expenses
|
$
|
110,546
|
$
|
80,802
|
|||
|
Income
taxes payable
|
4,381
|
4,175
|
|||||
|
Current
portion of long-term debt
|
566
|
1,065
|
|||||
|
Total
current liabilities
|
115,493
|
86,042
|
|||||
|
Deferred
income taxes
|
24,227
|
19,086
|
|||||
|
Other
Noncurrent Liabilities
|
664
|
426
|
|||||
|
Long-term
debt, less current portion
|
215,446
|
150,803
|
|||||
|
Total
liabilities
|
355,830
|
256,357
|
|||||
|
Minority
Interest
|
5,678
|
4,926
|
|||||
|
Stockholders'
equity:
|
|||||||
|
Common
stock
|
409
|
396
|
|||||
|
Additional
paid-in capital
|
475,554
|
446,319
|
|||||
|
Retained
earnings
|
207,846
|
165,034
|
|||||
|
Treasury
stock
|
(12,745
|
)
|
(12,745
|
)
|
|||
|
Foreign
currency translation adjustment
|
25,884
|
17,397
|
|||||
|
Total
stockholders' equity
|
696,948
|
616,401
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
1,058,456
|
$
|
877,684
|
|||
|
THE
HAIN CELESTIAL GROUP, INC.
|
|
Consolidated
Statements of Operations
|
|
(in
thousands, except per share amounts)
|
|
Three
Months Ended June 30,
|
|
Twelve
Months Ended June 30,
|
|
||||||||||
|
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|||||||
|
Net
sales
|
$
|
222,320
|
$
|
194,790
|
$
|
900,432
|
$
|
738,557
|
|||||
|
Cost
of sales
|
160,329
|
143,136
|
639,002
|
525,205
|
|||||||||
|
Gross
profit
|
61,991
|
51,654
|
261,430
|
213,352
|
|||||||||
|
SG&A
expenses
|
43,229
|
35,455
|
176,940
|
147,878
|
|||||||||
|
Operating
income
|
18,762
|
16,199
|
84,490
|
65,474
|
|||||||||
|
Interest
and other expenses, net
|
19
|
2,152
|
6,885
|
5,911
|
|||||||||
|
Income
before income taxes
|
18,743
|
14,047
|
77,605
|
59,563
|
|||||||||
|
Income
tax provision
|
6,437
|
5,272
|
29,637
|
22,496
|
|||||||||
|
Net
income
|
$
|
12,306
|
$
|
8,775
|
$
|
47,968
|
$
|
37,067
|
|||||
|
Basic
per share amounts
|
$
|
0.31
|
$
|
0.23
|
$
|
1.22
|
$
|
0.98
|
|||||
|
Diluted
per share amounts
|
$
|
0.30
|
$
|
0.22
|
$
|
1.17
|
$
|
0.95
|
|||||
|
Weighted
average common shares outstanding:
|
|||||||||||||
|
Basic
|
39,810
|
38,561
|
39,314
|
37,643
|
|||||||||
|
Diluted
|
41,706
|
40,107
|
41,108
|
38,912
|
|||||||||