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 1,
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
November 1, 2007, The Hain Celestial Group, Inc. issued a press release
announcing financial results for its first quarter ended September 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 or its Quarterly Report on Form 10-Q
for
the quarterly period ended September 30, 2007 in light of the matters discussed
therein. A copy of the press release is included as Exhibit 99.1 to this Current
Report and is incorporated herein by reference.
Item
9.01.
Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed herewith:
|
Exhibit
No.
|
Description
|
|
|
99.1
|
Press
Release dated November 1, 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: November
1, 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
FIRST
QUARTER FISCAL YEAR 2008 RESULTS
Sales
Grew 13% in the First Quarter
GAAP
Net Income Grew 22%
Earnings
at $0.26 Per Share
Adjusted
Earnings at $0.29 Per Share
Gross
Margin Increased 100 Basis Points
Melville,
NY, November 1, 2007—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, 2007. The Company reported net sales of $237.2 million,
a
13% increase compared with $209.9 million in the prior year first quarter.
GAAP
net income for the first quarter was $10.8 million compared to the prior
year’s
$8.8 million, a 22% increase. The Company reported GAAP earnings of $0.26
per
diluted share, an 18% increase over the prior year’s $0.22 per diluted share.
Adjusted
earnings in the quarter totaled $0.29 per diluted share. The reported results
include charges of $0.4 million ($0.3 million after tax or $0.01 per diluted
share) related to SFAS No. 123R charges for ungranted stock options; $1.1
million ($0.7 million after tax or $0.02 per diluted share) of acquisition
related start-up costs at the Company’s Fakenham facility into which the frozen
meat-free operations of Haldane Foods have been consolidated; $2.3 million
($1.4
million after tax or $0.03 per diluted share) for professional fees associated
with the previously announced review of the Company’s stock options practices;
and a gain of $2.0 million ($1.2 million after tax or $0.03 per diluted share)
from the sale of a joint venture investment in a rice cake manufacturing
facility in Belgium.
“Our
new
fiscal year is off to an excellent start with continued strong sales from
Earth’s Best®, Arrowhead Mills®, Imagine®, Health Valley®, Spectrum®, Rice
Dream®, Terra®, Garden of Eatin’®, Westbrae Natural® Casbah®, DeBoles® and
Freebird™, along with the Avalon® and Alba® brands in Personal Care. We continue
to sustain solid results from sales of our U.S. brands in Canada, Europe
and the
United Kingdom alongside the contributions from brands produced by our
operations in those areas of the world,” said Irwin D. Simon, President and
Chief Executive Officer of Hain Celestial. “We are pleased to see improved
results from Celestial Seasonings® with its restaged brand, updated logo, and
new packaging. We are also excited about Celestial Seasonings new products
with
Saphara™ premium organic tea and Celestial Seasonings premium organic coffee
just beginning to roll out in the United States.”
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 29% in the first quarter, compared to 28%
in
the prior year first quarter, reflecting continued improvements in operating
efficiencies in a challenging, inflationary cost environment. Adjusted for
the
effects of the Fakenham start-up cost, the Company achieved adjusted gross
margin of 29.5% in the 2008 quarter compared to adjusted gross margin of
28.6%
in the prior year quarter.
“In
addition to various cost-saving initiatives, in the second quarter we
implemented a 3-to-5% price increase across many of our global brands to
offset
input cost pressures. These pricing actions should benefit the second half
of
fiscal year 2008,” commented Irwin Simon.
Selling,
general and administrative expenses for the first quarter was 21.3% of net
sales, or 20.2% adjusted, compared to 19.9% in the prior year. The professional
fees of the stock options review and the SFAS 123R charge for ungranted stock
options are included in selling, general and administrative
expenses.
Interest
expense, net, in the first quarter was $2.7 million versus $1.8 million in
the
prior year quarter. The higher interest cost this year was the result of
higher
borrowings for acquisitions.
Average
diluted shares outstanding for the quarter were 41.8 million, an increase
of 1.8
million shares, or nearly 5%, over the prior year quarter.
The
Company’s tax rate for the first quarter was 37.6% versus 36.7% in the prior
full fiscal year 2007.
The
Company’s balance sheet remains strong, with $210.4 million in working capital
and a current ratio of 2.7 at September 30, 2007. Debt as a percentage of
equity
was 30% with equity at $716.6 million. The number of days in the Company’s cash
conversion cycle was 75 compared to 67 days in the prior year period, due
to
higher levels of inventory for Celestial Seasonings and Earth’s Best and the
inclusion of our recently acquired Plainville Turkey Farm and Avalon Natural
Products. In
the
first quarter, the Company used $1.8 million of operating free cash flow
principally as a result of its inventory build-up for Celestial Seasonings,
Earth’s Best and capital expenditures at the Fakenham facility.
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
Fiscal
Year 2008 Guidance
The
Company reconfirmed its fiscal year 2008 guidance for sales of $1.025 to
$1.050
billion and earnings per share of $1.38 to $1.42.
“Lasting
consumer awareness of the benefits of natural and organic food and personal
care
products, coupled with our legacy brands and innovative products, continues
to
drive our sales growth in various distribution channels. This demand provides
the Company with momentum for our solid sales and earnings growth,” commented
Irwin Simon. “At the same time, as we leverage our existing infrastructure and
integrate our acquired operations, we are focused on delivering additional
operating efficiencies and margin improvements.”
Update
on Review of Stock Options and NASDAQ Hearing
On
June
15, 2007 the Company announced that it had been informed by the Securities
and
Exchange Commission 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 or
its
Quarterly Report on Form 10-Q for the quarter ended September 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 sheets at June 30, 2007
and
September 30, 2007, such as stockholders’ equity and deferred tax accounts, are
subject to the conclusion of the review.
In
response to the previously disclosed notice of delisting from The NASDAQ
Stock Market, Inc., Hain Celestial met with the NASDAQ Listing Qualifications
Panel on October 31, 2007, pursuant to NASDAQ's procedures following Hain
Celestial's request for a hearing and continued listing. Pending a decision
by
the Panel, Hain Celestial shares will remain listed on The NASDAQ Global
Select
Market.
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
Webcast
and Upcoming Events
Hain
Celestial will host a conference call and webcast at 4:15 PM Eastern Time
today
to review its first quarter fiscal year 2008 results. On November 6, 2007
the
Company is scheduled to present at the JPMorgan SMid Cap 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
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.
The
Hain Celestial Group, Inc. • 58 South Service Road, Melville, NY 11747 •
631-730-2200
www.hain-celestial.com
Consolidated
Balance Sheets
(In
thousands)
|
September
30,
|
June
30,
|
||||||
|
2007
|
2007
|
||||||
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(Unaudited)
|
|||||||
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ASSETS
|
|||||||
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Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
51,462
|
$
|
60,518
|
|||
|
Trade
receivables, net
|
111,484
|
95,405
|
|||||
|
Inventories
|
142,372
|
129,062
|
|||||
|
Recoverable
income taxes
|
-
|
3,687
|
|||||
|
Deferred
income taxes
|
8,083
|
8,069
|
|||||
|
Other
current assets
|
21,875
|
19,263
|
|||||
|
Total
current assets
|
335,276
|
316,004
|
|||||
|
Property,
plant and equipment, net
|
130,838
|
114,901
|
|||||
|
Goodwill,
net
|
521,239
|
509,336
|
|||||
|
Trademarks
and other intangible assets, net
|
98,373
|
96,342
|
|||||
|
Other
assets
|
19,116
|
21,873
|
|||||
|
Total
assets
|
$
|
1,104,842
|
$
|
1,058,456
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable and accrued expenses
|
$
|
121,257
|
$
|
110,546
|
|||
|
Income
taxes payable
|
3,152
|
4,381
|
|||||
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Current
portion of long-term debt
|
453
|
566
|
|||||
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Total
current liabilities
|
124,862
|
115,493
|
|||||
|
Deferred
income taxes
|
24,285
|
24,227
|
|||||
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Other
long term liabilities
|
5,815
|
664
|
|||||
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Long-term
debt, less current portion
|
215,049
|
215,446
|
|||||
|
Total
liabilities
|
370,011
|
355,830
|
|||||
|
Minority
Interest
|
18,269
|
5,678
|
|||||
|
Stockholders'
equity:
|
|||||||
|
Common
stock
|
409
|
409
|
|||||
|
Additional
paid-in capital
|
476,130
|
475,554
|
|||||
|
Retained
earnings
|
218,904
|
207,846
|
|||||
|
Treasury
stock
|
(12,745
|
)
|
(12,745
|
)
|
|||
|
Foreign
currency translation adjustment
|
33,864
|
25,884
|
|||||
|
Total
stockholders' equity
|
716,562
|
696,948
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
1,104,842
|
$
|
1,058,456
|
|||
THE
HAIN CELESTIAL GROUP, INC.
Consolidated
Statements of Operations
(in
thousands, except per share amounts)
|
Three
Months Ended September 30,
|
|||||||
|
2007
|
2006
(1)
|
||||||
|
(Unaudited)
|
|||||||
|
Net
sales
|
$
|
237,245
|
$
|
209,895
|
|||
|
Cost
of sales
|
168,394
|
151,065
|
|||||
|
Gross
profit
|
68,851
|
58,830
|
|||||
|
SG&A
expenses
|
50,546
|
41,846
|
|||||
|
Operating
income
|
18,305
|
16,984
|
|||||
|
Interest
and other expenses, net
|
959
|
1,820
|
|||||
|
Income
before income taxes
|
17,346
|
15,164
|
|||||
|
Income
tax provision
|
6,526
|
6,321
|
|||||
|
Net
income
|
$
|
10,820
|
$
|
8,843
|
|||
|
Basic
per share amounts
|
$
|
0.27
|
$
|
0.23
|
|||
|
Diluted
per share amounts
|
$
|
0.26
|
$
|
0.22
|
|||
|
Weighted
average common shares outstanding:
|
|||||||
|
Basic
|
40,026
|
38,746
|
|||||
|
Diluted
|
41,825
|
40,023
|
|||||
|
(1)
|
Reflects
a reduction of sales and income before income taxes of $312 recorded
as a
result of the adoption of Staff Accounting Bulletin No. 108 as of
July 1,
2006.
|
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,
|
|||||||||||||
|
2007
GAAP
|
Adjustments
|
2007
Adjusted
|
2006
Adjusted (5) (6)
|
||||||||||
|
(Unaudited)
|
|||||||||||||
|
Net
sales
|
$
|
237,245
|
$
|
237,245
|
$
|
209,895
|
|||||||
|
Cost
of Sales
|
168,394
|
$
|
(1,073
|
)(1)
|
167,321
|
149,957
|
|||||||
|
Gross
profit
|
68,851
|
1,073
|
69,924
|
59,938
|
|||||||||
|
SG&A
expenses
|
50,546
|
$
|
(2,686
|
)(2)
|
47,860
|
41,846
|
|||||||
|
Operating
income
|
18,305
|
3,759
|
22,064
|
18,092
|
|||||||||
|
Interest
and other expenses, net
|
959
|
2,002
|
(3)
|
2,961
|
2,084
|
||||||||
|
Income
before income taxes
|
17,346
|
1,757
|
19,103
|
16,008
|
|||||||||
|
Income
tax provision
|
6,526
|
638
|
(4)
|
7,164
|
6,175
|
||||||||
|
Net
income
|
$
|
10,820
|
$
|
1,119
|
$
|
11,939
|
$
|
9,833
|
|||||
|
Basic
per share amounts
|
$
|
0.27
|
$
|
0.03
|
$
|
0.30
|
$
|
0.25
|
|||||
|
Diluted
per share amounts
|
$
|
0.26
|
$
|
0.03
|
$
|
0.29
|
$
|
0.25
|
|||||
|
Weighted
average common shares outstanding:
|
|||||||||||||
|
Basic
|
40,026
|
|
40,026
|
38,746
|
|||||||||
|
Diluted
|
41,825
|
|
41,825
|
40,023
|
|||||||||
|
(1)
|
Start-up
costs at the Company's Fakenham facility related to the integration
of the
Haldane Foods frozen meat-free
operations.
|
|
(2)
|
Adjustment
to record stock compensation expense of $420 in connection with the
requirements of SFAS No. 123R to record compensation when there is
a
contractual requirement to grant stock options, whether or not such
options have been granted. Each quarter the Company marks to market
the
Black Scholes value of the ungranted stock options. Also selling,
general
and administrative expense was adjusted for $2,266 of professional
fees
incurred in connection with the review of the Company’s stock options
practices.
|
|
(3)
|
The
adjustment of $2,002 represents the pre-tax gain on the sale of the
Company's investment in a rice cake manufacturing joint venture in
Belgium.
|
|
(4)
|
Tax
effects of the adjustments described
above.
|
|
(5)
|
Includes
adjustments of $1,108 for start-up costs at the Company's West Chester
frozen foods facility, $2,510 for a pre-tax gain recognized in connection
with the sale of Biomarché and $2,246 of charges taken in connection with
the decision by the German government regarding the application of
VAT on
non-dairy beverages.
|
|
(6)
|
Reflects
a reduction of sales and income before income taxes of $312 recorded
as a
result of the adoption of Staff Accounting Bulletin No. 108 as of
July 1,
2006.
|