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 5, 2009
————————————
THE
HAIN CELESTIAL GROUP, INC.
(Exact
name of registrant as specified in its charter)
————————————
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Delaware
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0-22818
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22-3240619
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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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:
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r
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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r
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Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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r
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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r
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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.
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 5, 2009, The Hain Celestial Group, Inc. issued a press release
announcing financial results for its first quarter ended September 30,
2009. 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:
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Exhibit No.
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Description
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99.1
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Press
Release dated November 5, 2009.
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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 5,
2009
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THE
HAIN CELESTIAL GROUP, INC.
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|
(Registrant)
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By: /s/
Ira
J.
Lamel
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Name:
Ira J. Lamel
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Title: Executive
Vice President and
Chief Financial
Officer
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Exhibit 99.1
[THE HAIN CELESTIAL GROUP LOGO OMITTED]
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Contacts:
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Ira
Lamel/Mary Anthes
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David
Lilly/Paige Gruman
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The
Hain Celestial Group, Inc.
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Kekst
and Company
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631-730-2200
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212-521-4800
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THE
HAIN CELESTIAL GROUP ANNOUNCES
FIRST
QUARTER FISCAL YEAR 2010 RESULTS
Earnings
Grow 17.6% to $0.20 Per Share
Operating
Free Cash Flow Improves
by
$56.4 Million in the Latest 12 Months
Solid
Performance Continues
in
Hain Celestial US Operations
Reconfirms
Guidance of $1.19 - $1.28 Per Share
Melville, NY, November 5,
2009—The Hain Celestial Group, Inc. (NASDAQ: HAIN), a leading natural and
organic products company providing consumers with A Healthy Way of Life™, today
reported results for the first quarter ended September 30, 2009. The
Company reported that earnings per share grew 17.6% to $0.20 per share on net
income of $8.1 million as compared to the prior year quarter earnings of $0.17
per share on net income of $7.0 million, on the strength of profit contributions
from the Company’s United States and Continental European operations.
These results are after the Company absorbed charges of $1.8 million, or $0.03
per share, for the planned and previously disclosed consolidation of its two
United Kingdom-based fresh food-to-go production facilities, and a $1.0 million,
or $0.02 per share, net loss representing the Company’s minority interest in the
quarterly results of Hain Pure Protein (“HPP”).
Sales for the first quarter this year totaled $230.5 million versus
$248.4 million in the prior year first quarter, after deducting $38.4 million of
sales for HPP. Total sales in the prior year quarter amounted to $286.8 million
including HPP, which was then a consolidated subsidiary. Sales in the current
year first quarter were impacted by increased promotional spending activity and,
the Company believes, would have otherwise increased over last year’s quarter
with the comparison unfavorably affected by a total of approximately $22 million
from destocking at a major distributor, the Celestial Seasonings® SKU
rationalization, reductions of personal care product sales into the chain drug
channel, the phasing out of the supply of fresh sandwiches to a major retail
customer in the United Kingdom and changes in foreign currencies.
“Last
year at this time we were experiencing strong sales in our first quarter, which
began to moderate in the second quarter. In the current economic
climate we are encouraged by signs of momentum in the United States, Canada and
selected parts of Europe. This year we continue to see expanded
distribution from new channels even as certain customers have reduced their
inventory levels in the quarter,” said Irwin D. Simon, President and Chief
Executive Officer. “The Company realized more favorable fuel and
commodity input pricing, cost containment and productivity
initiatives. We believe the Company will continue to benefit from
such initiatives and from new customers at our Fakenham facility, where we have
seen expansion of both the Linda McCartney® brand and private label sales in the
United Kingdom.”
“In the
United Kingdom, where we continue to focus on improving our sales and operating
performance, we have consolidated into fewer production locations. We
have moved production of Daily Bread™ products into our Luton
facility. This consolidation has gone well and is now substantially
complete, although additional consolidation costs will impact our second
quarter. We continue to produce our frozen meat-free offerings at our
Fakenham facility and our non-dairy beverage products at our Manchester
facility,” Mr. Simon said. “In addition, we absorbed a net loss from our
minority interest in HPP amounting to $1.0 million in the quarter, which arose
principally from sales of existing inventory of commodity products at lower than
anticipated prices. We are encouraged by the progress HPP is making in moving
away from commodity poultry products and concentrating on antibiotic-free
products. We look forward to a return to profitable results at HPP
during the remainder of the fiscal year.”
Gross
margins in this year’s first quarter were 26.8% compared to 24.0% in the prior
year quarter. The 280 basis point increase in gross margin is reflective
of the deconsolidation of HPP offset by increased promotional
spending. The Company anticipates higher margin performance in the
coming quarters of the fiscal year.
Selling,
general and administrative expenses were 18.5% as a percentage of sales in this
year’s first quarter compared to 18.6% in the prior year quarter. The
deconsolidation of HPP, which operates at a lower expense base, affected the
comparison of selling, general and administrative expenses as a percentage of
sales by 183 basis points. This increase was offset by reductions in
spending resulting from the Company’s focus on cost control, including the
benefit of actions taken in reducing headcount and consolidating
locations.
“As
stated when we reported our year-end results in late August, we expect to see a
stronger second half of fiscal year 2010. With the benefit of new
commodity contracts, we plan to maintain our higher level of promotional
spending toward the consumer in the upcoming quarters and expect this to further
our sales momentum,” stated Irwin Simon. “We’re excited about the
launch of Martha Stewart Clean products, which are in selected stores now, and
the nationwide rollout scheduled for early calendar year
2010. We are also excited about our joint venture with Hutchison
Whampoa’s China Meditech with its anticipated rollout of co-branded Zhi Ling
Tong and Earth’s Best® products later in the calendar year. In addition, we
expect that as consumers dine at home and seek out more natural products, our
Natural Initiative’s back-to-basics approach to food labeling should solidify
our leadership role in the natural and organic consumer products category,”
concluded Irwin Simon.
The
Company’s balance sheet remains strong. The Company reduced borrowings by $16.3
million in the quarter bringing the total debt reduction to $76.5 million over
the most recent 12 months. Debt as a percentage of equity was 33.8%,
with equity at $716.1 million at September 30, 2009. Operating free
cash flow was $30.4 million over the most recent 12-month period, improving by
$56.4 million from a year ago.
Fiscal
Year 2010 Guidance
The
Company reconfirmed its fiscal year 2010 guidance of $1.19 to $1.28 of earnings
per share. For the full fiscal year 2010, sales are expected to
increase from 4% to 6% from the Company’s fiscal year 2009 sales base less HPP
sales, items discontinued in the SKU rationalization and the reclassification of
promotional expenses. Net sales are expected to be
$1.0
billion to $1.02 billion due to the reclassification.
Webcast
and Upcoming Events
Hain
Celestial will host a conference call and webcast at 4:30 PM Eastern Standard
Time today to review its first quarter fiscal year 2010 results. The Company is
scheduled to present at several investor conferences
including: Citi’s Small/Mid-Cap Conference on November 20, 2009 and
J. P. Morgan’s SMid Cap Conference on December 3, 2009. 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 products company in North America and Europe. Hain Celestial
participates in many natural categories with well-known brands that include
Celestial Seasonings®, Terra®, Garden of Eatin’®, Health Valley®, WestSoy®,
Earth’s Best®, Arrowhead Mills®, MaraNatha®, SunSpire®, DeBoles®, Gluten Free
Café™, Hain Pure Foods®, 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 under Rule 3b-6 of the
Securities Exchange Act of 1934, as amended. Words such as “expect,”
“expected”, “anticipate,” “estimate,” “believe,” “may,” “potential,” “can,”
“position”, “positioned,” “should,” “plan,” and similar expressions, or the
negative of those expressions, may identify forward-looking statements. 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 our ability to achieve our guidance for sales and
earnings per share in fiscal year 2010 given the recessionary environment in the
U.S. and other markets that we sell products as well as economic and business
conditions generally and their effect on our customers and consumers’ product
preferences, and our business, financial condition and results of operations;
changes in estimates or judgments related to our impairment analysis of goodwill
and other intangible assets; our ability to implement our business and
acquisition strategy, including our strategy for improving results in Europe;
HPP’s ability to implement its business strategy; our ability to realize
sustainable growth generally and from investments in core brands, offering new
products and our focus on cost containment, productivity, cash flow and margin
enhancement in particular, our ability to effectively integrate our
acquisitions; our ability to successfully execute our joint ventures;
competition; the success and cost of introducing new products as well as our
ability to increase prices on existing products, availability and retention of
key personnel; our reliance on third party distributors, manufacturers and
suppliers; our ability to maintain existing contracts and secure and integrate
new customers; our ability to respond to changes and trends in customer
and consumer demand, preferences and consumption; international sales and
operations; changes in fuel and commodity costs; the continuing adverse
effects on our results of operations from the impacts of foreign exchange; the
resolution of the civil 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,
2009. 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
Company defines Operating Free Cash Flow as cash provided from operating
activities less capital expenditures. For the 12-month period ended
September 30, 2009, cash provided from operating activities was $42.7 million
and capital expenditures were $12.3 million for a total of $30.4
million.
Under the
Investor Relations section of the Company’s website at www.hain-celestial.com,
the Company will post a schedule detailing the reclassification of promotional
expenses for each annual and quarterly period in fiscal years 2009 and 2008 to
allow comparison to reported amounts.
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THE
HAIN CELESTIAL GROUP, INC.
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Consolidated
Statements of Operations
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(in
thousands, except per share
amounts)
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Three
Months Ended Sept. 30,
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||||||||
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2009
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2008
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(Unaudited)
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||||||||
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Note
A
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Net
sales
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$ | 230,484 | $ | 286,784 | ||||
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Cost
of sales
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168,676 | 217,951 | ||||||
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Gross
profit
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61,808 | 68,833 | ||||||
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SG&A
expenses
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42,564 | 53,339 | ||||||
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Restructuring
expenses
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1,779 | 598 | ||||||
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Operating
income
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17,465 | 14,896 | ||||||
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Interest
expense and other expenses
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3,042 | 3,984 | ||||||
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Equity
in net loss of unconsolidated affiliate, net
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996 | - | ||||||
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Income
before income taxes
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13,427 | 10,912 | ||||||
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Income
tax provision
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5,337 | 4,146 | ||||||
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Net
income
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$ | 8,090 | $ | 6,766 | ||||
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Loss
attributable to noncontrolling interest
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- | 256 | ||||||
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Net
income attributable to The Hain Celestial Group, Inc.
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$ | 8,090 | $ | 7,022 | ||||
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Basic
net income per share
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$ | 0.20 | $ | 0.17 | ||||
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Diluted
net income per share
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$ | 0.20 | $ | 0.17 | ||||
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Weighted
average common shares outstanding:
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||||||||
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Basic
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40,701 | 40,225 | ||||||
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Diluted
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41,159 | 41,499 | ||||||
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Note
A -
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The
three months ended September 30, 2008 includes an adjustment of $2,533
($12,572 for the fiscal year ended June 30, 2009) to reclassify certain
promotional expenses which had the effect of reducing selling, general and
administrative expenses and reducing net sales. The reclassification did
not affect reported net
income.
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THE
HAIN CELESTIAL GROUP, INC.
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Consolidated
Balance Sheets
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(In
thousands)
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Sept.
30,
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June
30,
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|||||||
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2009
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2009
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|||||||
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(Audited)
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ASSETS
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||||||||
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Current
assets:
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||||||||
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Cash
and cash equivalents
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$ | 16,647 | $ | 41,408 | ||||
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Trade
receivables, net
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131,838 | 114,506 | ||||||
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Inventories
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165,238 | 158,590 | ||||||
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Deferred
income taxes
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13,333 | 13,028 | ||||||
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Other
current assets
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17,149 | 21,599 | ||||||
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Total
current assets
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344,205 | 349,131 | ||||||
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Property,
plant and equipment, net
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102,786 | 102,135 | ||||||
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Goodwill,
net
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460,293 | 456,459 | ||||||
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Trademarks
and other intangible assets, net
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148,055 | 149,196 | ||||||
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Investments
in and advances to affiliates
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46,328 | 49,061 | ||||||
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Other
assets
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17,177 | 17,514 | ||||||
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Total
assets
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$ | 1,118,844 | $ | 1,123,496 | ||||
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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||||||||
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Current
liabilities:
|
||||||||
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Accounts
payable and accrued expenses
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$ | 127,808 | $ | 134,618 | ||||
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Income
taxes payable
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5,582 | 1,877 | ||||||
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Current
portion of long-term debt
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43 | 44 | ||||||
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Total
current liabilities
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133,433 | 136,539 | ||||||
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Deferred
income taxes
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24,633 | 24,615 | ||||||
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Other
noncurrent liabilities
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2,656 | 2,647 | ||||||
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Long-term
debt, less current portion
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242,036 | 258,372 | ||||||
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Total
liabilities
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402,758 | 422,173 | ||||||
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Stockholders'
equity:
|
||||||||
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Common
stock
|
417 | 417 | ||||||
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Additional
paid-in capital
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504,752 | 503,161 | ||||||
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Retained
earnings
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220,375 | 212,285 | ||||||
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Treasury
stock
|
(16,326 | ) | (16,309 | ) | ||||
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Accumulated
other comprehensive income
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6,868 | 1,769 | ||||||
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Total
stockholders' equity
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716,086 | 701,323 | ||||||
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Total
liabilities and stockholders' equity
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$ | 1,118,844 | $ | 1,123,496 | ||||