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): May 4, 2009
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 May 4,
2009, The Hain Celestial Group, Inc. issued a press release announcing financial
results for its third quarter ended March 31, 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:
|
Exhibit No.
|
Description
|
|
99.1
|
Press
Release dated May 4,
2009.
|
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: May 4, 2009
THE HAIN
CELESTIAL GROUP, INC.
(Registrant)
|
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]
|
Contacts:
|
|
|
Ira
Lamel/Mary Anthes
|
Jeremy
Fielding/Paige Gruman
|
|
The
Hain Celestial Group, Inc.
|
Kekst
and Company
|
|
631-730-2200
|
212-521-4800
|
THE
HAIN CELESTIAL GROUP ANNOUNCES
THIRD
QUARTER RESULTS
Core
U.S. Business Posts Solid Results
Focus
on Challenges in Europe and Protein
Melville, NY, May 4, 2009—The
Hain Celestial Group, Inc. (NASDAQ: HAIN), a leading natural and organic
products company, today reported results for the third quarter ended March 31,
2009. The Company reported third quarter net sales of $267.7 million
versus the prior year’s third quarter sales of $264.6 million. Sales in the
quarter would have been $12.7 million higher without the effects of foreign
exchange rate changes between the periods, or 6% higher on a year-over-year
basis. Net loss in the third quarter was $41.2 million, or $1.01 per share, on a
GAAP basis, driven by the Company taking an estimated after-tax non-cash
impairment charge of $48.4 million against goodwill and intangible assets
related to the Company’s European and Hain Pure Protein’s (HPP) reporting units.
On a non-GAAP basis1, adjusted net income was $12.5 million, or
$0.31 per share, in the third quarter this year.
“Hain
Celestial’s U.S. business delivered a solid quarter as health conscious
consumers remain committed to natural and organic products even in tough
economic times. The macroeconomic conditions in this past quarter—and
particularly at the beginning of the calendar year—led to sales being challenged
by reduced inventories and by consumers using their pantry
goods. However, we believe that, as the quarter progressed, our
strong brand portfolio and innovative range of healthy products offered through
various distribution channels at reasonable prices provided consumers with the
core goods they need for a healthy lifestyle. Their response was
encouraging. Our results also reflect the sharp emphasis we continue
to place on cost containment and productivity initiatives,” said Irwin D. Simon,
President and Chief Executive Officer of Hain Celestial.
______________________
“At the
same time, we continue to improve our business, and focus on the challenges in
our European and protein operations. In Europe, we are encouraged by
recent business wins at our Fakenham facility in the United Kingdom in light of
the challenges we have faced, including the under-utilization of the
plant. New volume will be coming into the plant starting very soon as
we produce new frozen meat-free and dessert products. In late April,
HPP’s Kosher Valley™ brand commenced production of natural, antibiotic-free,
vegetarian-fed kosher poultry products at the Plainville facility,” commented
Irwin Simon.
On a GAAP
basis gross margin was 23.5% in the third quarter versus 26.0% in the prior year
quarter. If not for the Company’s lower margin HPP joint venture with
its current mix of commodity versus antibiotic-free mix, gross margin would have
been 485 basis points higher this year at 28.3%, versus 126 basis points higher
last year at 27.2%. The Company is in the process of de-emphasizing
sales of conventional turkey and chicken products while it focuses on
antibiotic-free products to improve its mix of sales for future
periods.
Adjusted
selling, general and administrative expenses declined as a percentage of sales
to 17.8% in this year’s quarter, compared to 18.4% in the prior year quarter.
This reduction comes from the Company’s continued successful focus on its cost
structure and from productivity initiatives. On a GAAP basis the
selling, general and administrative expenses as a percentage of sales was 18.7%
in this year’s quarter compared to 19.4% in the prior year quarter.
Interest
and other expense, net includes interest expense of $3.4 million in the third
quarter this year compared to $3.2 million for the prior year
quarter. Also included is the minority interest share of the results
of our protein operations, amounting to $(3.4) million in this year’s quarter
compared to $0.3 million in the prior year quarter. The remaining
items of other expense in the current year quarter include foreign exchange and
the settlement of a pre-acquisition contingency which could not be estimated or
accrued at the time of the acquisition in 2003.
The
Company recorded an estimated non-cash impairment charge aggregating $52.6
million ($48.4 million after-tax, or $1.19 per share) from the write-down of
goodwill and other intangibles in its European and its Hain Pure Protein
operations. This non-cash charge had no impact on the Company’s
compliance with financial covenants under its debt obligations.
The
Company’s balance sheet remains strong, with $255.6 million in working capital
and a current ratio of 2.8 at March 31, 2009. Debt as a percentage of
equity was 42.5%, with equity at $685.7 million. Operating free cash flow in the
third quarter this year was $3.7 million compared to $6.8 million in the prior
year quarter. The Company’s cash balance at March 31, 2009 was $27.8 million
after reducing outstanding debt by $28.5 million in the quarter.
“In an
exceptionally tough operating environment, the Company drove growth in the
natural, mass market and specialty channels, while we delivered on productivity
and efficiencies. These initiatives, which, coupled with strategic
pricing actions, position the Company for future growth,” concluded Irwin
Simon.
Fiscal
Year 2009 Guidance
The
Company updated its fiscal year 2009 guidance and narrowed the range to $1.162
to $1.170 billion in sales and $1.25 to $1.30 earnings per share excluding the
impairment and other adjustments. The earnings guidance is before deducting
$0.10 per share in stock compensation expense to amortize equity
grants.
Webcast
Hain
Celestial will host a conference call and webcast at 4:30 PM Eastern Daylight
Time today to review its third 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 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®, Kosher Valley™, 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; 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; our ability to effectively integrate our
acquisitions; competition; availability and retention of key personnel; our
reliance on third party distributors, manufacturers and suppliers; our ability
to maintain existing contacts and secure new customers; changes in
customer preferences and consumption; international sales and operations;
changes in fuel and commodity costs; the impact of foreign exchange;
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)
|
March
31,
|
June
30,
|
|||||||
|
2009
|
2008
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 27,784 | $ | 58,513 | ||||
|
Trade receivables,
net
|
128,595 | 118,867 | ||||||
|
Inventories
|
204,599 | 175,667 | ||||||
|
Deferred income
taxes
|
13,277 | 12,512 | ||||||
|
Other current
assets
|
26,401 | 27,482 | ||||||
|
Total current
assets
|
400,656 | 393,041 | ||||||
|
Property, plant and
equipment, net
|
142,336 | 159,089 | ||||||
|
Goodwill,
net
|
454,197 | 550,238 | ||||||
|
Trademarks and other intangible
assets, net
|
154,366 | 136,861 | ||||||
|
Other
assets
|
18,714 | 20,155 | ||||||
|
Total
assets
|
$ | 1,170,269 | $ | 1,259,384 | ||||
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts payable and accrued
expenses
|
$ | 140,045 | $ | 145,186 | ||||
|
Income
taxes payable
|
4,735 | 907 | ||||||
|
Current portion of long-term
debt
|
289 | 222 | ||||||
|
Total current
liabilities
|
145,069 | 146,315 | ||||||
|
Deferred income
taxes
|
17,198 | 26,524 | ||||||
|
Other noncurrent
liabilities
|
2,158 | 5,012 | ||||||
|
Long-term debt, less current
portion
|
291,044 | 308,220 | ||||||
|
Total
liabilities
|
455,469 | 486,071 | ||||||
|
Minority
Interest
|
29,134 | 30,502 | ||||||
|
Stockholders'
equity:
|
||||||||
|
Common
stock
|
415 | 411 | ||||||
|
Additional paid-in
capital
|
500,474 | 488,650 | ||||||
|
Retained
earnings
|
211,020 | 237,008 | ||||||
|
Treasury
stock
|
(15,518 | ) | (15,473 | ) | ||||
|
Accumulated other comprehensive
income (loss)
|
(10,725 | ) | 32,215 | |||||
|
Total stockholders'
equity
|
685,666 | 742,811 | ||||||
|
Total liabilities and
stockholders' equity
|
$ | 1,170,269 | $ | 1,259,384 | ||||
THE
HAIN CELESTIAL GROUP, INC.
Consolidated
Statements of Operations
(in
thousands, except per share amounts)
|
Three Months Ended March 31,
|
Nine Months Ended March 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Net
sales
|
$ | 267,723 | $ | 264,632 | $ | 872,601 | $ | 778,110 | ||||||||
|
Cost
of sales
|
204,933 | 195,910 | 664,722 | 561,393 | ||||||||||||
|
Gross
profit
|
62,790 | 68,722 | 207,879 | 216,717 | ||||||||||||
|
SG&A
expenses
|
49,954 | 51,291 | 160,636 | 151,719 | ||||||||||||
|
Impairment
of goodwill and intangibles
|
52,567 | - | 52,567 | - | ||||||||||||
|
Operating
income (loss)
|
(39,731 | ) | 17,431 | (5,324 | ) | 64,998 | ||||||||||
|
Interest
and other expenses, net
|
1,072 | 3,528 | 10,925 | 8,799 | ||||||||||||
|
Income
(loss) before income taxes
|
(40,803 | ) | 13,903 | (16,249 | ) | 56,199 | ||||||||||
|
Income
tax provision
|
347 | 5,588 | 9,739 | 21,482 | ||||||||||||
|
Net
income (loss)
|
$ | (41,150 | ) | $ | 8,315 | $ | (25,988 | ) | $ | 34,717 | ||||||
|
Basic
net income (loss) per share
|
$ | (1.01 | ) | $ | 0.21 | $ | (0.64 | ) | $ | 0.87 | ||||||
|
Diluted
net income (loss) per share
|
$ | (1.01 | ) | $ | 0.20 | $ | (0.63 | ) | $ | 0.83 | ||||||
|
Weighted
average common shares outstanding:
|
||||||||||||||||
|
Basic
|
40,555 | 40,101 | 40,415 | 40,058 | ||||||||||||
|
Diluted
|
40,672 | 41,588 | 41,065 | 41,837 | ||||||||||||
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 March 31,
|
||||||||||||||||
|
2009
GAAP
|
Adjustments
|
2009
Adjusted
|
2008
Adjusted
|
|||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Net
sales
|
$ | 267,723 | $ | 267,723 | $ | 264,632 | ||||||||||
|
Cost
of Sales
|
204,933 | $ | (5,780 | ) | 199,153 | 188,102 | ||||||||||
|
Gross
profit
|
62,790 | 5,780 | 68,570 | 76,530 | ||||||||||||
|
SG&A
expenses
|
49,954 | (2,191 | ) | 47,763 | 48,610 | |||||||||||
|
Impairment
of goodwill and intangibles
|
52,567 | (52,567 | ) | - | - | |||||||||||
|
Operating
income (loss)
|
(39,731 | ) | 60,538 | 20,807 | 27,920 | |||||||||||
|
Interest
and other expenses, net
|
1,072 | 191 | 1,263 | 3,528 | ||||||||||||
|
Income
(loss) before income taxes
|
(40,803 | ) | 60,347 | 19,544 | 24,392 | |||||||||||
|
Income
tax provision
|
347 | 6,727 | 7,074 | 9,595 | ||||||||||||
|
Net
income (loss)
|
$ | (41,150 | ) | $ | 53,620 | $ | 12,470 | $ | 14,797 | |||||||
|
Basic
net income (loss) per share
|
$ | (1.01 | ) | $ | 1.32 | $ | 0.31 | $ | 0.37 | |||||||
|
Diluted
net income (loss) per share
|
$ | (1.01 | ) | $ | 1.32 | $ | 0.31 | $ | 0.36 | |||||||
|
Weighted
average common shares outstanding:
|
||||||||||||||||
|
Basic
|
40,555 | 40,555 | 40,101 | |||||||||||||
|
Diluted
|
40,672 | 40,672 | 41,588 | |||||||||||||
|
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
and integration costs related to the Company's Kosher Valley poultry
operations
|
$ | 2,300 | $ | 883 | ||||||||||||
|
Start-up
costs at the Fakenham manufacturing facility related to the integration of
the Haldane Foods frozen meat-free operations and, in 2009, unabsorbed
overhead resulting from expiration of a co-pack agreement with the prior
owner
|
1,532 | 429 | $ | 1,796 | $ | 685 | ||||||||||
|
SKU
rationalization, severance and other reorganization costs
|
1,011 | 378 | 6,012 | 2,296 | ||||||||||||
|
Other
items
|
937 | 358 | ||||||||||||||
|
Cost
of sales
|
5,780 | 2,048 | 7,808 | 2,981 | ||||||||||||
|
Professional
fees and other expenses incurred in connection with the review of the
Company's stock option practices, net of insurance
recovery
|
(2,303 | ) | (861 | ) | 682 | 261 | ||||||||||
|
Stock
compensation expense
|
1,558 | 583 | (459 | ) | (174 | ) | ||||||||||
|
Severance
and other reorganization costs
|
1,946 | 728 | 2,458 | 939 | ||||||||||||
|
Other
items
|
990 | 370 | ||||||||||||||
|
SG&A
expenses
|
2,191 | 820 | 2,681 | 1,026 | ||||||||||||
|
Impairment
of goodwill and intangibles
|
52,567 | 4,153 | - | - | ||||||||||||
|
Other
(income) expenses, net
|
(191 | ) | (294 | ) | ||||||||||||
|
Interest
and other expenses, net
|
(191 | ) | (294 | ) | - | - | ||||||||||
|
Total
adjustments
|
$ | 60,347 | $ | 6,727 | $ | 10,489 | $ | 4,007 | ||||||||
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)
|
Nine Months Ended March 31,
|
||||||||||||||||
|
2009 GAAP
|
Adjustments
|
2009 Adjusted
|
2008 Adjusted
|
|||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Net
sales
|
$ | 872,601 | $ | 872,601 | $ | 778,110 | ||||||||||
|
Cost
of Sales
|
664,722 | $ | (12,304 | ) | 652,418 | 550,428 | ||||||||||
|
Gross
profit
|
207,879 | 12,304 | 220,183 | 227,682 | ||||||||||||
|
SG&A
expenses
|
160,636 | (11,649 | ) | 148,987 | 144,710 | |||||||||||
|
Impairment
of goodwill and intangibles
|
52,567 | (52,567 | ) | - | - | |||||||||||
|
Operating
income (loss)
|
(5,324 | ) | 76,520 | 71,196 | 82,972 | |||||||||||
|
Interest
and other expenses, net
|
10,925 | (834 | ) | 10,091 | 10,801 | |||||||||||
|
Income
(loss) before income taxes
|
(16,249 | ) | 77,354 | 61,105 | 72,171 | |||||||||||
|
Income
tax provision
|
9,739 | 12,571 | 22,310 | 27,512 | ||||||||||||
|
Net
income (loss)
|
$ | (25,988 | ) | $ | 64,783 | $ | 38,795 | $ | 44,659 | |||||||
|
Basic
net income (loss) per share
|
$ | (0.64 | ) | $ | 1.60 | $ | 0.96 | $ | 1.11 | |||||||
|
Diluted
net income (loss) per share
|
$ | (0.63 | ) | $ | 1.58 | $ | 0.94 | $ | 1.07 | |||||||
|
Weighted
average common shares outstanding:
|
||||||||||||||||
|
Basic
|
40,415 | 40,415 | 40,058 | |||||||||||||
|
Diluted
|
41,065 | 41,065 | 41,837 | |||||||||||||
|
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
and integration costs related to the Company's Kosher Valley poultry
operations
|
$ | 2,300 | $ | 883 | ||||||||||||
|
Start-up
costs at the Fakenham manufacturing facility related to the integration of
the Haldane Foods frozen meat-free operations and, in 2009, unabsorbed
overhead resulting from expiration of a co-pack agreement with the prior
owner
|
6,647 | 1,862 | $ | 4,953 | $ | 1,858 | ||||||||||
|
SKU
rationalization, severance and other reorganization costs
|
1,699 | 602 | 6,012 | 2,296 | ||||||||||||
|
Impact
of co-pack pricing agreement related to acquisition of turkey processing
facility
|
721 | 277 | ||||||||||||||
|
Other
items
|
937 | 358 | ||||||||||||||
|
Cost
of sales
|
12,304 | 3,982 | 10,965 | 4,154 | ||||||||||||
|
Professional
fees and other expenses incurred in connection with the review of the
Company's stock option practices, net of insurance
recovery
|
1,416 | 530 | 4,695 | 1,777 | ||||||||||||
|
Stock
compensation expense
|
4,455 | 1,666 | (144 | ) | (56 | ) | ||||||||||
|
Legal
settlement
|
1,350 | 505 | ||||||||||||||
|
Severance
and other reorganization costs
|
3,438 | 1,268 | 2,458 | 939 | ||||||||||||
|
Other
items
|
990 | 370 | ||||||||||||||
|
SG&A
expenses
|
11,649 | 4,339 | 7,009 | 2,660 | ||||||||||||
|
Impairment
of goodwill and intangibles
|
52,567 | 4,153 | - | - | ||||||||||||
|
Other
(income) expenses, net
|
834 | 97 | ||||||||||||||
|
Gain
on the sale of the Company's investment in a rice cake manufacturing joint
venture in Belgium recorded in the first quarter of FY
2008
|
(2,002 | ) | (784 | ) | ||||||||||||
|
Interest
and other expenses, net
|
834 | 97 | (2,002 | ) | (784 | ) | ||||||||||
|
Total
adjustments
|
$ | 77,354 | $ | 12,571 | $ | 15,972 | $ | 6,030 | ||||||||