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 3,
2008
————————————
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 3, 2008, The Hain Celestial Group, Inc. issued a press release
announcing financial results for its first quarter ended September 30, 2008.
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 exhibits are filed herewith:
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release dated November 3, 2008.
|
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.
|
THE
HAIN CELESTIAL GROUP, INC.
(Registrant)
|
||
| |
|
|
| Date: November 3, 2008 | By: | /s/ Ira J. Lamel |
|
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
The
Hain Celestial Group, Inc.
631-730-2200
|
Jeremy
Fielding/David Lilly
Kekst
and Company
212-521-4800
|
THE
HAIN CELESTIAL GROUP ANNOUNCES
RECORD
SALES
Sales
Grew 22% in First Quarter Fiscal Year 2009
Reconfirms
Full Year Sales and Earnings Guidance
Melville,
NY, November 3, 2008—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, 2008. Reflecting continued strong consumer demand for
its
brands and products, the Company reported record first quarter net sales
of
$289.3 million, a 22% increase over the prior year’s first quarter sales of
$237.2 million. Net income in the first quarter was $7.0 million on a GAAP
basis
and $11.4 million after reflecting previously announced adjustments resulting
from continuing personnel and facility costs related to the execution of
the
Stock Keeping Unit (“SKU”) Rationalization Program; acquisition-related
integration and start-up costs in the United Kingdom, reflecting initiatives
which were completed in this year’s first quarter; the costs of the now
completed, below market contract at Hain Pure Protein’s New Oxford facility;
stock compensation related expense; and continued additional professional
fees.
Diluted earnings per share for the first quarter totaled $0.17 on a GAAP
basis
and $0.28 after these adjustments. Net income and earnings per share were
affected by the highest commodity and input costs in the Company’s history, with
such costs estimated to be $10 million higher than last year. The
Company’s results do not reflect the benefit of its August price increases,
which are expected to improve the Company’s sales and margins in the second half
of the year. The Company realized approximately $1 million from these increases
in its first quarter.
“We
are
pleased that, even with the economic difficulties experienced in many markets,
consumers increased their demand for our natural and organic food and personal
care products. We are also pleased to see that the sales momentum experienced
in
its first quarter continued through the month of October. With our grocery,
snacks, and tea products selling at an average price of $3.99, our brands
meet
our consumers’ needs in this economy. Additionally, we believe our portfolio
approach—in products, distribution channels and geographic markets—benefited our
performance this quarter. Our new fiscal year began with continued strong
sales
in all our geographic markets—the United States, Canada, and Europe—across
various distribution channels. In North America, our focus on new product
innovation and increased sales and distribution of our core items resulted
in
strong contributions from Rice Dream®, WestSoy®, Earth’s Best®, MaraNatha®,
Imagine®, Spectrum®, Garden of Eatin’®, Rosetto®, Yves®, Jason®, Avalon® and the
Hain Pure Protein brands. In Europe, our approach led to similar sales trends
from the Lima®, Natumi®, Rice Dream, Grains Noirs® and Daily Bread™ brands,”
said Irwin D. Simon, President and Chief Executive Officer.
The
Company continues to see strong sales despite the slowdown in the economy.
Hain
Celestial has experienced growth in the natural sector with independent natural
stores and supermarkets, mass market retailers, chain drug stores and other
retail outlets. The Company believes it is attracting new consumers who are
not
dining out but are looking for healthful dining experiences at home, and
consumers are finding our products at more retail outlets, such as supermarkets,
club stores and mass merchants. The Company has also seen an increase in
poultry
sales, where consumers are trading down from other proteins to chicken and
turkey; consumers are also eating more seitan, tofu and tempeh rather than
red
meat. The at-home dining trend is more prevalent for breakfast and dinner,
where
the Company’s product categories can provide healthy, reasonably priced meals
and snacks. The Company continues to see substantial growth in its Earth’s Best
brands with parents concerned about healthy eating for their infants, toddlers
and kids, and believes that consumers staying at home are drinking more tea
and trading down from more expensive beverage offerings.
Reflecting
the previously stated adjustments, gross margin for the same brands operated
by
the Company (other than the Company’s lower margin Hain Pure Protein joint
venture) was 28.6% in the first quarter, versus 30.8% in the prior year quarter.
Inflation in input costs, including higher commodity and fuel costs, amounted
to
over 7% in the quarter when measured against the prior year comparable quarter.
While this inflation was partially offset by productivity improvements and
price
increases, the full impact of the price increase announced in July is expected
to benefit the Company over the remaining quarters in its fiscal year. The
Company expects that the benefits from this price increase will improve margins
during the second half of the fiscal year by 200 to 300 basis points. In
Personal Care, where the SKU Rationalization eliminated costs, the brands
continued to experience good sales growth, and benefited from a margin
improvement of approximately 200 basis points in the first quarter.
Adjusted
selling, general and administrative expenses declined as a percentage of
sales
to 18.2% compared to 20.2%, with the Company’s continued focus on cost savings
and achieving the benefit of synergies from acquisitions.
The
Company’s balance sheet remains strong, with $272.2 million in working capital
and a current ratio of 2.8 at September 30, 2008. Debt as a percentage of
equity
was 43.1%, with equity at $745.2 million. The Company’s cash conversion cycle
was 79 days, compared to 75 days in the prior year period, with the increase
coming principally in the Company’s inventory of turkey in preparation for the
holiday season demands in that category and increased ingredients for Grocery
and Snacks. The Company’s receivables days have declined, and payables days
remain consistent with past periods.
Interest
expense, net, was $3.6 million in the first quarter compared to $2.7 million
for
the prior year quarter. The Company’s interest cost this year includes the cost
of higher borrowings resulting from acquisitions during the prior fiscal
year.
“Other expenses, net” in the prior year included a $2.0 million gain on the sale
of an investment in a joint venture in Europe. The Company’s effective tax rate
for the current period was 38%.
“Having
good brands in good categories will continue to drive sales. At the same
time,
the Company will continue to build on the successful productivity
initiatives commenced in prior years to control its expenses,
reducing overhead and capital expenditures and other costs. Our Company is
well-positioned with a proven management team to enable Hain Celestial to
deal
with this tough economic environment. We continue to experience solid growth
and
steady performance and expect our strategic pricing actions and productivity
initiatives to deliver on our objectives for the year and our long-term goals
to
enhance shareholder value,” concluded Irwin Simon.
Fiscal
Year 2009 Guidance
The
Company reconfirmed its fiscal year 2009 guidance of $1.2 to $1.3 billion
in
sales and $1.54 to $1.61 earnings per share. This earnings guidance is before
deducting $0.08 per share in stock compensation expense to amortize the previous
year’s equity grants.
Webcast
Hain
Celestial will host a conference call and webcast at 4:30 PM Eastern Standard
Time today to review its first quarter fiscal year 2009 results. The event
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®, Garden of Eatin’®,
Health Valley®, WestSoy®, Earth’s Best®, Arrowhead Mills®, MaraNatha®,
SunSpire®, DeBoles®, Hain Pure Foods®, FreeBird™, Plainville Farms®, Hollywood®,
Spectrum Naturals®, Spectrum Essentials®, Walnut Acres Organic®, Imagine®, Rice
Dream®, Soy Dream®, Rosetto®, Ethnic Gourmet®, Yves Veggie Cuisine®, Granose®,
Realeat®, Linda McCartney®, Daily Bread™, Lima®, Grains Noirs®, Natumi®, JASON®,
Zia® Natural Skincare, Avalon Organics®, Alba Botanica®, Queen Helene®, Tushies®
and TenderCare®. Hain Celestial has been providing “A Healthy Way of
Life™” since 1993. 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;
our
ability to implement our business and acquisition strategy; our ability to
effectively integrate our acquisitions; competition; availability and retention
of key personnel; our reliance on third party distributors, manufacturers
and
suppliers; changes in customer preferences; international sales and operations;
escalating fuel and commodity costs; the resolution of the SEC inquiry and
litigation regarding our stock option practices; changes in, or the failure
to
comply with, government regulations; and other risks detailed from time-to-time
in the Company’s reports filed with the SEC, including the annual report on Form
10-K, for the fiscal year ended June 30, 2008. As a result of the foregoing
and
other factors, no assurance can be given as to future results, levels of
activity and achievements and neither the Company nor any person assumes
responsibility for the accuracy and completeness of these
statements.
Non-GAAP
Financial Measures
Management
believes that the non-GAAP financial measures presented provide useful
additional information to investors about current trends in the Company’s
operations and are useful for period-over-period comparisons of operations.
These non-GAAP financial measures should not be considered in isolation or
as a
substitute for the comparable GAAP measures. In addition, these non-GAAP
measures may not be the same as similar measures provided by other companies
due
to potential differences in methods of calculation and items being excluded.
They should only be read in connection with the Company’s condensed consolidated
statements of earnings presented in accordance with GAAP.
THE
HAIN CELESTIAL GROUP, INC.
Consolidated
Balance Sheets
(In
thousands)
|
September
30,
|
June
30,
|
||||||
|
2008
|
2008
|
||||||
|
(Unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
43,506
|
$
|
58,513
|
|||
|
Trade
receivables, net
|
127,378
|
118,867
|
|||||
|
Inventories
|
215,590
|
175,667
|
|||||
|
Deferred
income taxes
|
12,482
|
12,512
|
|||||
|
Other
current assets
|
23,614
|
27,482
|
|||||
|
Total
current assets
|
422,570
|
393,041
|
|||||
|
Property,
plant and equipment, net
|
155,823
|
159,089
|
|||||
|
Goodwill,
net
|
539,183
|
550,238
|
|||||
|
Trademarks
and other intangible assets, net
|
140,950
|
136,861
|
|||||
|
Other
assets
|
19,252
|
20,155
|
|||||
|
Total
assets
|
$
|
1,277,778
|
$
|
1,259,384
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable and accrued expenses
|
$
|
148,261
|
$
|
145,186
|
|||
|
Income
taxes payable
|
1,868
|
907
|
|||||
|
Current
portion of long-term debt
|
246
|
222
|
|||||
|
Total
current liabilities
|
150,375
|
146,315
|
|||||
|
Deferred
income taxes
|
25,590
|
26,524
|
|||||
|
Other
noncurrent liabilities
|
2,163
|
5,012
|
|||||
|
Long-term
debt, less current portion
|
321,177
|
308,220
|
|||||
|
Total
liabilities
|
499,305
|
486,071
|
|||||
|
Minority
Interest
|
33,256
|
30,502
|
|||||
|
Stockholders'
equity:
|
|||||||
|
Common
stock
|
414
|
411
|
|||||
|
Additional
paid-in capital
|
495,639
|
488,650
|
|||||
|
Retained
earnings
|
244,030
|
237,008
|
|||||
|
Treasury
stock
|
(15,486
|
)
|
(15,473
|
)
|
|||
|
Foreign
currency translation adjustment
|
20,620
|
32,215
|
|||||
|
Total
stockholders' equity
|
745,217
|
742,811
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
1,277,778
|
$
|
1,259,384
|
|||
THE
HAIN CELESTIAL GROUP, INC.
Consolidated
Statements of Operations
(in
thousands, except per share amounts)
|
Three
Months Ended September 30,
|
|||||||
|
2008
|
2007
|
||||||
|
(Unaudited)
|
|||||||
|
Net
sales
|
$
|
289,317
|
$
|
237,245
|
|||
|
Cost
of sales
|
217,951
|
168,394
|
|||||
|
Gross
profit
|
71,366
|
68,851
|
|||||
|
SG&A
expenses
|
56,470
|
50,546
|
|||||
|
Operating
income
|
14,896
|
18,305
|
|||||
|
Interest
and other expenses, net
|
3,569
|
959
|
|||||
|
Income
before income taxes
|
11,327
|
17,346
|
|||||
|
Income
tax provision
|
4,305
|
6,526
|
|||||
|
Net
income
|
$
|
7,022
|
$
|
10,820
|
|||
|
Basic
net income per share
|
$
|
0.17
|
$
|
0.27
|
|||
|
Diluted
net income per share
|
$
|
0.17
|
$
|
0.26
|
|||
|
Weighted
average common shares outstanding:
|
|||||||
|
Basic
|
40,225
|
40,026
|
|||||
|
Diluted
|
41,499
|
41,825
|
|||||
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,
|
|||||||||||||
|
2008
GAAP
|
Adjustments
|
2008
Adjusted
|
2007
Adjusted
|
||||||||||
|
(Unaudited)
|
|||||||||||||
|
Net
sales
|
$
|
289,317
|
$
|
289,317
|
$
|
237,245
|
|||||||
|
Cost
of Sales
|
217,951
|
$
|
(3,540
|
)
|
214,411
|
167,321
|
|||||||
|
Gross
profit
|
71,366
|
3,540
|
74,906
|
69,924
|
|||||||||
|
SG&A
expenses
|
56,470
|
(3,768
|
)
|
52,702
|
47,860
|
||||||||
|
Operating
income
|
14,896
|
7,308
|
22,204
|
22,064
|
|||||||||
|
Interest
and other expenses, net
|
3,569
|
360
|
3,929
|
2,961
|
|||||||||
|
Income
before income taxes
|
11,327
|
6,948
|
18,275
|
19,103
|
|||||||||
|
Income
tax provision
|
4,305
|
2,539
|
6,844
|
7,164
|
|||||||||
|
Net
income
|
$
|
7,022
|
$
|
4,409
|
$
|
11,431
|
$
|
11,939
|
|||||
|
Basic
net income per share
|
$
|
0.17
|
$
|
0.11
|
$
|
0.28
|
$
|
0.30
|
|||||
|
Diluted
net income per share
|
$
|
0.17
|
$
|
0.11
|
$
|
0.28
|
$
|
0.29
|
|||||
|
Weighted
average common shares outstanding:
|
|||||||||||||
|
Basic
|
40,225
|
40,225
|
40,026
|
||||||||||
|
Diluted
|
41,499
|
41,499
|
41,825
|
||||||||||
|
FY
2009
|
FY
2008
|
||||||||||||
|
Impact
on Income before income taxes
|
Impact
on Income tax provision
|
Impact
on Income before income taxes
|
Impact
on Income tax provision
|
||||||||||
|
(Unaudited)
|
|||||||||||||
|
Start-up
costs at the Fakenham manufacturing
|
|||||||||||||
|
facility
related to the integration of the
|
|||||||||||||
|
Haldane
Foods frozen meat-free operations
|
|||||||||||||
|
and,
in 2009, also includes unabsorbed
|
|||||||||||||
|
overhead
resulting from expiration of a
|
|||||||||||||
|
co-pack
agreement with prior owner
|
$
|
2,519
|
$
|
799
|
$
|
1,073
|
$
|
406
|
|||||
|
Severence
and other reorganization costs
|
300
|
118
|
|||||||||||
|
Impact
of co-pack pricing agreement related
|
|||||||||||||
|
to
acquisition of turkey processing facility
|
721
|
277
|
|||||||||||
|
Cost
of sales
|
3,540
|
1,194
|
1,073
|
406
|
|||||||||
|
Professional
fees and other expenses incurred
|
|||||||||||||
|
in
connection with the review of the
|
|||||||||||||
|
Company's
stock option practices
|
1,753
|
896
|
2,266
|
857
|
|||||||||
|
Stock
compensation expense
|
1,417
|
356
|
420
|
159
|
|||||||||
|
Severence
and other reorganization costs
|
598
|
231
|
|||||||||||
|
SG&A
expenses
|
3,768
|
1,483
|
2,686
|
1,016
|
|||||||||
|
Other
(income) expenses, net
|
(360
|
)
|
(138
|
)
|
(2,002
|
)
|
(784
|
)
|
|||||
|
Interest
and other expenses, net
|
(360
|
)
|
(138
|
)
|
(2,002
|
)
|
(784
|
)
|
|||||
|
Total
adjustments
|
$
|
6,948
|
$
|
2,539
|
$
|
1,757
|
$
|
638
|
|||||