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 4, 2010
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
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 4, 2010, The Hain Celestial Group, Inc. issued a press release
announcing financial results for its first quarter ended September 30,
2010. 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.
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Description
|
|
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99.1
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Press
Release dated November 4,
2010.
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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 4,
2010
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THE
HAIN CELESTIAL GROUP, INC.
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|
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(Registrant)
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By:
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/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, Inc. logo omitted]
Contacts:
Ira
Lamel/Mary Anthes
The Hain
Celestial Group, Inc.
631-730-2200
THE
HAIN CELESTIAL GROUP ANNOUNCES STRONG
FIRST
QUARTER FISCAL YEAR 2011 RESULTS
Net
Sales of $258 Million Increased 12%
Operating
Free Cash Flow Improved to $55.9 Million
for
the 12 Months Ended September 30, 2010
GAAP
Gross Profit Increased by 36 Basis Points
GAAP
Earnings Increased to $0.21 Per Diluted Share
Adjusted
Earnings $0.25 Per Diluted Share Before Acquisition Related Charges
Reconfirms
Fiscal Year Guidance of $1.24 to $1.31 Earnings Per Diluted Share
Melville, NY, November 4,
2010—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, 2010. Net sales
for the first quarter totaled $258.0 million versus $230.5 million in the prior
year first quarter reflecting strong results from the Company’s North American
operations. The Company reported GAAP earnings of $0.21 per diluted
share on net income of $9.1 million as compared to the prior year first quarter
earnings of $0.20 per diluted share on net income of $8.1
million. The earnings improvement came from the strength of profit
contributions from the Company’s United States, Canadian and Continental
European operations. The first quarter results are after the Company
absorbed expenses of $2.3 million, or $0.04 per diluted share, for acquisition
related expenses. Before these acquisition related charges, adjusted
earnings were $0.25 per diluted share on adjusted net income of $10.8
million.1
“Building
on the improved consumption trends the Company experienced earlier in the
calendar year, we started off fiscal year 2011 with strong first quarter sales
and earnings. Even with a tough economy, consumers are committed to
eating healthy foods and maintaining healthy lifestyles. Our
established operations gained momentum across most major categories along with
sales from our recent strategic acquisitions, which achieved incremental sales
growth over their pre-acquisition results. We’re excited that these gains were
made across various classes of trade,” said Irwin D. Simon, President and Chief
Executive Officer.
Gross
profit in this year’s first quarter improved by 36 basis points to 27.2% of
sales compared to 26.8% in the prior year first quarter. On an adjusted
basis, gross profit in this year’s first quarter was 27.3%, an improvement of 52
basis points over the prior year first quarter gross profit.1 The
improved profit resulted from the mix of product sales, including the sales of
higher margin products from recently acquired businesses in the United States,
which together with cost savings, more than offset input cost
increases.
Selling,
general and administrative expenses were 19.4% as a percentage of net sales in
this year’s first quarter compared to 18.5% in the prior year first
quarter. This increase as a percentage of net sales resulted from
higher amortization expenses related to recent acquisitions and a higher level
of selling expenses employed by the acquired businesses where product
demonstrations and store level sampling are integral parts of the consumer
experience.
“Our
solid foundation of core natural and organic brands, strengthened by the recent
acquisitions of The Greek Gods®, Sensible Portions® and Churchill’s brands, has
brought us new product platforms and channel expansion
capabilities. As stated when we reported our fiscal year-end results
in August, we expect to see momentum increase resulting in stronger
year-over-year results as we move through fiscal year 2011 both from our
existing brands and our recent acquisitions,” concluded Irwin
Simon.
Operating
free cash flow for the 12-month period ended September 30, 2010 improved to
$55.9 million, an increase of $25.5 million from a year ago. The Company had
working capital of $179.9 million at September 30, 2010 with a current ratio of
2.1. Debt was $257.7 million, or 32.8% of equity of $786.4 million at
September 30, 2010.
Fiscal
Year 2011 Guidance
The
Company reconfirmed its fiscal year 2011 guidance at $1.24 to $1.31 of earnings
per diluted share. The guidance excludes transaction costs and
integration expenses from recent acquisitions that may be incurred during the
Company’s fiscal year 2011. When the Company reports its financial
results each quarter, these items will be identified.
Webcast
and Upcoming Events
Hain
Celestial will host a conference call and webcast at 8:30 AM Eastern Time today
to review its first quarter fiscal year 2011 results. The conference call 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.
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®, Earth’s Best®, Terra®, Garden of Eatin’®, Sensible
Portions®, Health Valley®, Arrowhead Mills®, MaraNatha®, SunSpire®, DeBoles®,
Gluten Free Café™, Hain Pure Foods®, Hollywood®, Spectrum Naturals®, Spectrum
Essentials®, Walnut Acres Organic®, Imagine®, Almond Dream®, Rice Dream®, Soy
Dream®, WestSoy®, The Greek Gods®, 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®, Earth’s Best TenderCare® and Martha Stewart Clean™. 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,” “continue,” “future,” “look forward”
and similar expressions, or the negative of those expressions, may identify
forward-looking statements. These forward-looking statements include (i)
our statements regarding our guidance for net sales and earnings per diluted
share in fiscal year 2011; and (ii) our expectations for our business for the
2011 fiscal year. Forward-looking statements 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 net sales
and earnings per diluted share in fiscal year 2011 given the environment in the
U.S. and other markets in which 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; Hain Pure Protein Corporation’s (“HPP”) 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; the
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 effects on our results of operations from adverse impacts of foreign
exchange; 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,
2010. 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 be read only in
connection with the Company’s condensed consolidated statements of earnings
presented in accordance with GAAP.
Operating
Free Cash Flow is a non-GAAP financial measure. The Company defines
Operating Free Cash Flow as cash provided from or used in operating activities
less capital expenditures. For the 12-month period ended September 30,
2010, cash provided by operating activities was $67.1 million and capital
expenditures were $11.2 million for a net total of $55.9 million. For the
12-month period ended September 30, 2009, cash provided by operating activities
was $42.7 million and capital expenditures were $12.3 million for a net total of
$30.4 million.
This
press release and the accompanying tables also include non-GAAP financial
measures which are referred to as “adjusted”. The reconciliations of these
non-GAAP financial measures to the comparable GAAP financial measures are
presented in the tables Consolidated Statements of Operations with Adjustments
for the three months ended September 30, 2010 and 2009. These non-GAAP financial
measures exclude the items listed at the bottom of the tables.
Consolidated
Balance Sheets
(In
thousands)
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September 30,
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June 30,
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|||||||
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2010
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2010
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|||||||
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(Unaudited)
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||||||||
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ASSETS
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||||||||
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Current
assets:
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||||||||
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Cash
and cash equivalents
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$ | 20,948 | $ | 17,266 | ||||
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Trade
receivables, net
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131,489 | 114,215 | ||||||
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Inventories
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169,817 | 157,012 | ||||||
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Deferred
income taxes
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10,749 | 10,738 | ||||||
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Other
current assets
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16,927 | 14,586 | ||||||
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Total
current assets
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349,930 | 313,817 | ||||||
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Property,
plant and equipment, net
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106,709 | 106,985 | ||||||
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Goodwill,
net
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551,326 | 516,455 | ||||||
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Trademarks
and other intangible assets, net
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207,833 | 198,129 | ||||||
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Investments
in and advances to affiliates
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45,891 | 46,041 | ||||||
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Other
assets
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19,195 | 16,660 | ||||||
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Total
assets
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$ | 1,280,884 | $ | 1,198,087 | ||||
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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||||||||
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Current
liabilities:
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||||||||
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Accounts
payable and accrued expenses
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$ | 161,818 | $ | 129,282 | ||||
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Income
taxes payable
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8,202 | 9,530 | ||||||
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Current
portion of long-term debt
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37 | 38 | ||||||
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Total
current liabilities
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170,057 | 138,850 | ||||||
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Deferred
income taxes
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39,812 | 38,283 | ||||||
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Other
noncurrent liabilities
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26,879 | 30,227 | ||||||
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Long-term
debt, less current portion
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257,694 | 225,004 | ||||||
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Total
liabilities
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494,442 | 432,364 | ||||||
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Stockholders'
equity:
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||||||||
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Common
stock
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439 | 437 | ||||||
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Additional
paid-in capital
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555,657 | 548,782 | ||||||
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Retained
earnings
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249,999 | 240,904 | ||||||
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Treasury
stock
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(17,566 | ) | (17,529 | ) | ||||
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Accumulated
other comprehensive income
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(2,087 | ) | (6,871 | ) | ||||
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Total
stockholders' equity
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786,442 | 765,723 | ||||||
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Total
liabilities and stockholders' equity
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$ | 1,280,884 | $ | 1,198,087 | ||||
THE
HAIN CELESTIAL GROUP, INC.
Consolidated
Statements of Operations
(in
thousands, except per share amounts)
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Three Months Ended September 30,
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||||||||
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2010
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2009
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|||||||
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(Unaudited)
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||||||||
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Net
sales
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$ | 257,961 | $ | 230,484 | ||||
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Cost
of sales
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187,859 | 168,676 | ||||||
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Gross
profit
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70,102 | 61,808 | ||||||
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Selling,
general and administrative expenses
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50,146 | 42,564 | ||||||
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Acquisition
related expenses including integration and restructuring
charges
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1,413 | 1,779 | ||||||
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Operating
income
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18,543 | 17,465 | ||||||
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Interest
expense and other expenses
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2,457 | 3,042 | ||||||
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Income
before income taxes and equity in earnings of equity-method
investees
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16,086 | 14,423 | ||||||
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Income
tax provision
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7,164 | 5,337 | ||||||
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After-tax
(income) loss of equity-method investees
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(173 | ) | 996 | |||||
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Net
income
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$ | 9,095 | $ | 8,090 | ||||
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Basic
net income per share
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$ | 0.21 | $ | 0.20 | ||||
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Diluted
net income per share
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$ | 0.21 | $ | 0.20 | ||||
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Weighted
average common shares outstanding:
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||||||||
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Basic
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42,823 | 40,701 | ||||||
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Diluted
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43,918 | 41,159 | ||||||
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THE HAIN CELESTIAL GROUP,
INC.
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Consolidated Statements of
Operations With Adjustments
|
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Reconciliation of GAAP
Results to Non-GAAP Presentation
|
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(in thousands, except per
share amounts)
|
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Three Months Ended September
30,
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||||||||||||||||
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2010 GAAP
|
Adjustments
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2010
Adjusted
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2009 Adjusted
(Note)
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|||||||||||||
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(Unaudited)
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||||||||||||||||
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Net sales
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$ | 257,961 | $ | 257,961 | $ | 230,484 | ||||||||||
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Cost of
Sales
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187,859 | $ | (425 | ) | 187,434 | 168,676 | ||||||||||
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Gross
profit
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70,102 | 425 | 70,527 | 61,808 | ||||||||||||
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Selling, general and
administrative expenses
|
50,146 | 50,146 | 42,564 | |||||||||||||
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Acquisition related expenses
including integration and restructuring charges
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1,413 | (1,413 | ) | - | - | |||||||||||
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Operating
income
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18,543 | 1,838 | 20,381 | 19,244 | ||||||||||||
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Interest and other expenses,
net
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2,457 | (424 | ) | 2,033 | 3,042 | |||||||||||
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Income before income taxes and
equity in earnings of equity-method investees
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16,086 | 2,262 | 18,348 | 16,202 | ||||||||||||
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Income tax
provision
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7,164 | 560 | 7,724 | 6,617 | ||||||||||||
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After-tax (income) loss of
equity-method investees
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(173 | ) | (173 | ) | 574 | |||||||||||
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Net income
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$ | 9,095 | $ | 1,702 | $ | 10,797 | $ | 9,011 | ||||||||
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Basic net income per
share
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$ | 0.21 | $ | 0.04 | $ | 0.25 | $ | 0.22 | ||||||||
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Diluted net income per
share
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$ | 0.21 | $ | 0.04 | $ | 0.25 | $ | 0.22 | ||||||||
|
Weighted average common shares
outstanding:
|
||||||||||||||||
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Basic
|
42,823 | 42,823 | 40,701 | |||||||||||||
|
Diluted
|
43,918 | 43,918 | 41,159 | |||||||||||||
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FY 2011
|
FY 2010
(Note)
|
|||||||||||||||
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Impact on Income Before Income
Taxes
|
Impact on Income Tax
Provision
|
Impact on Income Before Income
Taxes
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Impact on Income Tax
Provision
|
|||||||||||||
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(Unaudited)
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||||||||||||||||
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Acquisition related
integration costs
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$ | 425 | - | |||||||||||||
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Cost of
sales
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425 | - | - | - | ||||||||||||
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Acquisition related
expenses
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1,212 | $ | 411 | |||||||||||||
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Severance and other
reorganization costs
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201 | - | $ | 1,779 | ||||||||||||
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Acquisition related expenses and
restructuring charges
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1,413 | 411 | 1,779 | - | ||||||||||||
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Accretion on
acquisition related contingent consideration
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424 | 149 | ||||||||||||||
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Interest and other expenses,
net
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424 | 149 | - | - | ||||||||||||
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Net loss from HPP
discontinued operation
|
- | - | 422 | - | ||||||||||||
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Equity in net (income) loss of
HPP
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- | - | 422 | - | ||||||||||||
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Valuation allowance
recorded on UK deferred tax assets
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$ | 1,280 | ||||||||||||||
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Total
adjustments
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$ | 2,262 | $ | 560 | $ | 2,201 | $ | 1,280 | ||||||||
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Note:
|
The fiscal year 2010 non-GAAP
presentation reflects (i) the cessation
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|||||||||||||||
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in the third quarter of recording
tax benefits for the United Kingdom
|
||||||||||||||||
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losses as applied to the prior two
quarters and (ii) the treatment by
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||||||||||||||||
| HPP of Kosher Valley as a discontinued operation beginning in the | ||||||||||||||||
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fourth quarter as applied to the
first three quarters.
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