Filed Pursuant to Rule 424(b)(3)
File No. 333-102010
PROSPECTUS
THE HAIN CELESTIAL GROUP, INC.
532,765 SHARES OF COMMON STOCK
This prospectus relates to the offer and sale of an aggregate of 532,765
shares of the common stock of The Hain Celestial Group, Inc. by the selling
stockholder listed under the heading "Selling Stockholder." We issued these
shares in connection with our acquisition of substantially all the assets in the
United States and the United Kingdom of Imagine Foods, Inc. and Imagine Foods
(UK) Limited, which we completed on December 2, 2002.
Our common stock is traded on the Nasdaq National Market under the symbol
HAIN. The last reported sales price of our common stock as reported by the
Nasdaq National Market System on January 6, 2003 was $15.38 per share.
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SEE "RISK FACTORS" BEGINNING ON PAGE 1 FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED IN AN INVESTMENT OF SECURITIES OFFERED HEREBY.
___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
___________________________
The date of this prospectus is January 7, 2003.
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TABLE OF CONTENTS
PAGE
RISK FACTORS.................................................................1
USE OF PROCEEDS..............................................................9
SELLING STOCKHOLDER.........................................................10
PLAN OF DISTRIBUTION........................................................11
DESCRIPTION OF CAPITAL STOCK................................................12
LEGAL MATTERS...............................................................15
EXPERTS.....................................................................15
WHERE YOU CAN FIND MORE INFORMATION.........................................16
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS
PROSPECTUS MAY BE USED ONLY WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS MAY BE
ACCURATE ONLY ON THE DATE OF THIS PROSPECTUS.
This prospectus contains certain forward-looking statements regarding our
future financial condition and results of operations and our business
operations. These statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, levels of activity,
performance or achievements, or industry results, to be materially different
from any future results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements. These factors include,
among others, the following: general economic and business conditions; our
ability to implement our business and acquisition strategy; our ability to
effectively integrate our acquisitions; our ability to obtain financing for
general corporate purposes; competition; availability of key personnel; and
changes in, or the failure to comply with government regulations; the other
factors discussed in this prospectus (including under the caption "Risk
Factors") and in our other filings with the Securities and Exchange Commission.
If one or more of these risks or uncertainties materialize, or if the underlying
assumptions prove incorrect, actual outcomes may vary materially from those
indicated. The words "expect," "estimate," "anticipate," "predict" and similar
expressions are intended to identify forward-looking statements.
Our principal executive offices are located at 58 South Service Road,
Melville, New York 11747, and our telephone number is 631-730-2200. Our World
Wide Web site address is www.hain-celestial.com. The information on our website
is not part of this prospectus.
References in this prospectus to "we," "us," "our," the "company" and
"Hain" refer to The Hain Celestial Group, Inc. and its subsidiaries.
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RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS AND
THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE PURCHASING ANY SHARES
OF OUR COMMON STOCK.
OUR ACQUISITION STRATEGY EXPOSES THE COMPANY TO RISK
We intend to continue to grow our business in part through the acquisition
of new brands and businesses, both in the United States and internationally. Our
acquisition strategy is based on identifying and acquiring businesses with
products and/or brands that complement our existing product mix. We cannot be
certain that we will be able to:
o successfully identify suitable acquisition candidates;
o negotiate identified acquisitions on terms acceptable to us; or
o obtain the necessary financing to complete such acquisitions.
We may encounter increased competition for acquisitions in the future,
which could result in acquisition prices we do not consider acceptable. We are
unable to predict whether or when any prospective acquisition candidate will
become available or the likelihood that any acquisition will be completed.
OUR FUTURE SUCCESS MAY BE DEPENDENT ON OUR ABILITY TO INTEGRATE COMPANIES THAT
WE ACQUIRE
Our future success may be dependent upon our ability to effectively
integrate new brands and businesses that we acquire, including our ability to
realize potentially available marketing opportunities and cost savings, some of
which may involve operational changes. We cannot be certain:
o as to the timing or number of marketing opportunities or amount of
cost savings that may be realized as the result of our integration of
an acquired brand or business;
o that a business combination will enhance our competitive position and
business prospects;
o that we will not experience difficulties with customers, personnel or
other parties as a result of a business combination; or
o that, with respect to our acquisitions outside the United States, we
will not be affected by, among other things, exchange rate risk.
In addition, we cannot be certain that we will be successful in:
o integrating an acquired brand or business's distribution channels with
those of Hain;
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o coordinating sales force activities of an acquired company or in
selling the products of an acquired company to our customer base; or
o integrating an acquired company into our management information
systems or in integrating an acquired company's products into our
product mix.
Additionally, integrating an acquired company into Hain's existing
operations will require management resources and may divert our management from
our day-to-day operations. If we are not successful in integrating the
operations of acquired companies, our business could be harmed.
CONSUMER PREFERENCES FOR NATURAL AND ORGANIC OR SPECIALTY FOOD PRODUCTS AND TEAS
ARE DIFFICULT TO PREDICT AND MAY CHANGE
A significant shift in consumer demand away from our products or our
failure to maintain our current market position could reduce our sales or the
prestige of our brands in our markets, which could harm our business. While we
continue to diversify our product offerings, we cannot be certain that demand
for our products will continue at current levels or increase in the future.
Our business is limited to natural and organic and specialty food products
in markets geared to consumers of natural foods, specialty teas, non-dairy
beverages, cereals, breakfast bars, canned soups and vegetables, snacks and
cooking oils, which, if consumer demand for such categories were to decrease,
could harm our business. Consumer trends change based on a number of possible
factors, including:
o nutritional values, such as a change in preference from fat free to
reduced fat to no reduction in fat; and
o a shift in preference from organic to non-organic and from natural
products to non-natural products.
In addition, we have other product categories, such as medically-directed
food products, kosher foods and other specialty food items. We are subject to
evolving consumer preferences for these products.
Our tea business, which we operate through our wholly-owned subsidiary,
Celestial Seasonings, Inc., is substantially dependent on the specialty tea
market, which consists of herb tea, green tea, wellness tea and specialty black
teas. Recently, the specialty tea market, including our specialty teas, has
experienced a reduction in consumer demand. If consumer demand for our specialty
teas were to further decrease, our business could be harmed.
OUR MARKETS ARE HIGHLY COMPETITIVE
We operate in highly competitive geographic and product markets, and some
of our markets are dominated by competitors with greater resources. We cannot be
certain that we could successfully compete for sales to distributors or stores
that purchase from larger, more established companies that have greater
financial, managerial, sales and technical resources. In addition, we compete
for limited
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retailer shelf space for our products. Larger competitors, such as mainstream
food companies including General Mills, Nestle S.A., Kraft Foods, Groupe Danone,
Kellogg Company and Sara Lee Corporation, also may be able to benefit from
economies of scale, pricing advantages or the introduction of new products that
compete with our products. Retailers also market competitive products under
their own private labels.
The beverage market is large and highly competitive. The tea portion of the
beverage market is also highly competitive. Competitive factors in the tea
industry include product quality and taste, brand awareness among consumers,
variety of specialty tea flavors, interesting or unique product names, product
packaging and package design, supermarket and grocery store shelf space,
alternative distribution channels, reputation, price, advertising and promotion.
We currently compete in the specialty tea market, which consists of herb tea,
green tea, wellness tea and specialty black tea. Our specialty herb tea
products, like other specialty tea products, are priced higher than most
commodity black tea products. Our principal competitors on a national basis in
the specialty tea market are Thomas J. Lipton Company, a division of Unilever
PLC, and R.C. Bigelow, Inc. Unilever has substantially greater financial
resources than our tea business. Additional competitors include a number of
regional specialty tea companies. There may be potential entrants which are not
currently in the specialty tea market who may have substantially greater
resources than we have. Private label competition in the specialty tea category
is currently minimal.
The soy beverage market, including both aseptic and refrigerated products,
has shown sustained growth over the past several years. A statement by the Food
and Drug Administration endorsing the heart healthy benefits of soy in October
1999 spurred the growth in both the aseptic and refrigerated segments. Aseptic
soy milk is the more mature product category of the two and in the past eighteen
months, additional larger competitors entered the category but have since exited
the category after unsuccessful regional launches. Westsoy has taken advantage
of the shelf space which became available and continues to be the number one and
largest growing brand of aseptic soymilk in the grocery and natural channels.
In addition, the refrigerated soy beverage market is primarily driven by
one brand, Silk, which is owned by Dean Foods and holds a significant share of
refrigerated soy milk space through its strong national distribution system. Our
refrigerated Westsoy product is specifically being targeted to accounts that
agree to partner with us in strong soy milk markets that distribute both aseptic
and refrigerated products.
In the future, our competitors may introduce other products that compete
with our products and these competitive products may have an adverse effect on
our business, results of operations and financial condition.
WE ARE DEPENDENT UPON THE SERVICES OF OUR CHIEF EXECUTIVE OFFICER
We are highly dependent upon the services of Irwin D. Simon, our chairman
of the board, president and chief executive officer. We believe Mr. Simon's
reputation as our founder and his expertise and knowledge in the natural and
specialty foods market are critical factors in our continuing growth. The loss
of the services of Mr. Simon could harm our business.
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WE RELY ON INDEPENDENT BROKERS AND DISTRIBUTORS FOR A SUBSTANTIAL PORTION OF OUR
SALES
We rely upon sales efforts made by or through non-affiliated food brokers
to distributors and other customers. The loss of, or business disruption at, one
or more of these distributors or brokers may harm our business. If we were
required to obtain additional or alternative distribution and food brokerage
agreements or arrangements in the future, we cannot be certain that we will be
able to do so on satisfactory terms or in a timely manner. Two of our
distributors, United Natural Foods and Tree of Life, accounted for approximately
17% and 15%, respectively, of our net sales for the fiscal year ended June 30,
2002, and 18% each for the year ended June 30, 2001. Our inability to enter into
satisfactory brokerage agreements may inhibit our ability to implement our
business plan or to establish markets necessary to develop our products
successfully. Food brokers act as selling agents representing specific brands on
a non-exclusive basis under oral or written agreements generally terminable at
any time on 30 days' notice, and receive a percentage of net sales as
compensation. Distributors purchase directly for their own account for resale.
In addition, the success of our business depends, in large part, upon the
establishment and maintenance of a strong distribution network.
MANUFACTURING FACILITIES
We own, manage and operate four manufacturing facilities located throughout
the United States. These facilities are located and produce the following
product lines: Celestial Seasonings(R), in Boulder, Colorado, produces specialty
teas; Terra Chips(R), in Moonachie, New Jersey, produces vegetable chips;
Arrowhead Mills(R), in Hereford, Texas, produces hot and cold cereals, baked
goods and meal cups; and Deboles(R) pasta, in Shreveport, Louisiana, produces
organic pasta. Outside the United States, we have one manufacturing facility in
The Netherlands (that we acquired in January 2001 in connection with our
acquisition of Fruit Chips B.V.) that produces snack foods, one manufacturing
facility in Vancouver, Canada (that we acquired in June 2001 in connection with
our acquisition of Yves Veggie Cuisine, Inc.) that produces soy-based meat
substitute products and two manufacturing facilities in Belgium (that we
acquired in December 2001 in connection with our acquisition of Lima SA) used
for production and warehousing. For the years ended June 30, 2002, 2001 and
2000, approximately 54%, 51% and 55%, respectively, of our revenue was derived
from products manufactured at our manufacturing facilities.
An interruption in or the loss of operations at one or more of these
facilities, or the failure to maintain our labor force at one or more of these
facilities, could delay or postpone production of our products, which could have
a material adverse effect on our business, results of operations and financial
condition until we could secure an alternate source of supply.
WE RELY ON INDEPENDENT CO-PACKERS TO PRODUCE SOME OR MOST OF OUR PRODUCTS
Currently, independent food manufacturers, who are referred to in our
industry as co-packers, manufacture many of our product lines. These product
lines include our Alba(R), Estee(R), Garden of Eatin'(R), Hain Pure Foods(R),
Kineret(R), Little Bear Organic Foods(R), Terra Chips(R), Westbrae(R),
Westsoy(R), Lima(R), Health Valley(R), Casbah(R), Breadshop's(R), Nile Spice(R),
and Imagine(R) product lines. For the fiscal years ended June 30, 2002, 2001 and
2000, products manufactured for us by co-packers represented approximately 46%,
49% and 45%, respectively, of our sales. With the recent
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acquisition of Imagine Foods, all of whose products are manufactured by
co-packers, and the recent sale of our Health Valley manufacturing facility to a
co-packer, we anticipate that co-packers will produce a significantly higher
proportion of our products in the future.
In the United States, we presently obtain:
o all of our requirements for non-dairy beverages from four co-packers,
all of which are under contract or other written arrangements;
o all of our requirements for rice cakes from one co-packer;
o all of our Health Valley baked goods and cereal products from one
co-packer, which is under contract;
o all of our cooking oils from one co-packer, which is under contract;
o principally all of our Earth's Best baby food products from one
co-packer, which is under contract;
o principally all of our tortilla chips from three suppliers, one of
which is under contract;
o a portion of our requirements for Terra's Yukon Gold line from one
supplier, which is under contract; and
o the requirements for our canned soups from one supplier, which is
under contract.
The loss of one or more co-packers, or our failure to retain co-packers for
newly acquired products or brands, could delay or postpone production of our
products, which could harm our business until such time as an alternate source
could be secured, which may be on less favorable terms.
OUR TEA INGREDIENTS ARE SUBJECT TO IMPORT RISK
Our tea business purchases its ingredients from numerous foreign and
domestic manufacturers, importers and growers, with the majority of those
purchases occurring outside of the United States. We maintain long-term
relationships with most of our suppliers. Purchase arrangements with ingredient
suppliers are generally made annually and in U.S. currency. Purchases are made
through purchase orders or contracts, and price, delivery terms and product
specifications vary.
Our botanical purchasers visit major suppliers around the world annually to
procure ingredients and to assure quality by observing production methods and
providing product specifications. Many ingredients are presently grown in
countries where labor-intensive cultivation is possible, and where we often must
educate the growers about product standards. We perform laboratory analysis on
incoming ingredient shipments for the purpose of assuring that they meet our
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quality standards and those of the U.S. Food and Drug Administration and the
California Organic Foods Act of 1990.
Our ability to ensure a continuing supply of ingredients at competitive
prices depends on many factors beyond our control, such as foreign political
situations, embargoes, changes in international and world economic conditions,
currency fluctuations forecasting adequate need of seasonal raw material
ingredients and unfavorable climatic conditions. We take steps and will continue
to take steps intended to lessen the risk of an interruption of botanical
supplies, including identification of alternative sources and maintenance of
appropriate inventory levels. We have, in the past, maintained sufficient
supplies for our ongoing operations.
Our failure to maintain relationships with our existing suppliers or find
new suppliers, observe production standards for our foreign procured products or
continue our supply of botanicals from foreign sources could harm our business.
OUR INABILITY TO USE OUR TRADEMARKS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS
Our inability to use our trademarks could have a material adverse effect on
our business, results of operations and financial condition.
Our trademarks and brand names are registered in the United States and a
number of foreign countries and we intend to keep these filings current and seek
protection for new trademarks to the extent consistent with business needs. We
also copyright certain of our artwork and package designs. We own the trademarks
for our principal products, including Arrowhead Mills(R), Bearitos(R),
Breadshop's(R), Casbah(R), Celestial Seasonings(R), DeBoles(R), Earth's Best(R),
Estee(R), Garden of Eatin'(R), Hain Pure Foods(R), Health Valley(R), Kineret(R),
Little Bear Organic Foods(R), Nile Spice(R), Terra Chips(R), Westbrae(R),
Westsoy(R), Lima(R), Yves(R), Imagine(R), Soy Dream(R), Rice Dream(R), Power
Dream(R) and Imagine Natural(R). We have trademarks for most of the best-selling
Celestial brands, including Sleepytime(R), Lemon Zinger(R), Mandarin Orange
Spice(R), Red Zinger(R), Wild Berry Zinger(R), Tension Tamer(R), Country Peach
Passion(R), Raspberry Zinger(R) and Ginkgo Sharp(R).
We believe that brand awareness is a significant component in a consumer's
decision to purchase one product over another in the highly competitive food and
beverage industry. Our failure to continue to sell our products under our
established brand names could have a material adverse effect on our business,
results of operations and financial condition. We believe that our trademarks
and trade names are significant to the marketing and sale of our products and
that the inability to utilize certain of these names could have a material
adverse effect on our business, results of operations and financial condition.
OUR PRODUCTS MUST COMPLY WITH GOVERNMENT REGULATION
We and our manufacturers, brokers, distributors and co-packers are subject
to extensive regulation by federal, state and local authorities that affect our
business. The federal agencies governing our business include the Federal Trade
Commission (FTC), The Food and Drug Administration (FDA), the United States
Department of Agriculture (USDA) and the Occupational Safety and Health
Administration (OSHA). These agencies regulate, among other things, the
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production, sale, safety, advertising, labeling of and ingredients used in our
products. Under various statutes, these agencies prescribe the requirements and
establish the standards for quality, purity and labeling. Among other
requirements, the USDA must approve our products, including a review of the
manufacturing processes and facilities used to produce these products, as well
as the labeling of these products, before these products can be marketed in the
United States. In addition, advertising of our business is subject to regulation
by the FTC. Our activities are also regulated by state agencies as well as
county and municipal authorities. We are also subject to the laws of the foreign
jurisdictions in which we manufacture and sell our products.
The USDA has adopted regulations with respect to a national organic
labeling and certification program which became effective February 20, 2001, and
fully implemented on October 21, 2002. We currently manufacture approximately
650 organic products which are covered by these new regulations. Future
developments in the regulation of labeling of organic foods could require us to
further modify the labeling of our products, which could affect the sales of our
products and thus harm our business.
In addition, on January 18, 2001, the FDA proposed new policy guidelines
regarding the labeling of genetically engineered foods. The FDA is currently
considering the comments it received before issuing final guidance. These
guidelines, if adopted, could require us to modify the labeling of our products,
which could affect the sales of our products and thus harm our business.
Furthermore, new government laws and regulations may be introduced in the
future that could result in additional compliance costs, seizures,
confiscations, recalls or monetary fines, any of which could prevent or inhibit
the development, distribution and sale of our products. If we fail to comply
with applicable laws and regulations, we may be subject to civil remedies,
including fines, injunctions, recalls or seizures, as well as potential criminal
sanctions, which could have a material adverse effect on our business, results
of operations and financial condition.
In addition, through our Celestial Seasonings subsidiary, we previously
manufactured and sold dietary supplements which are subject to the Dietary
Supplement Health and Education Act of 1994, or DSHEA, which went into effect in
March 1999. DSHEA defines dietary supplements as a new category of food,
separate from conventional food. DSHEA requires specific nutritional labeling
requirements for dietary supplements and permits substantiated, truthful and
non-misleading statements of nutritional support to be made in labeling, such as
statements describing general well-being resulting from consumption of a dietary
ingredient, or the role of a nutrient or dietary ingredient in affecting or
maintaining a structure or function of the body.
PRODUCT RECALLS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS
Manufacturers and distributors of products in the food industry are
sometimes subject to the recall of their products for a variety of reasons,
including for product defects, such as ingredient contamination, packaging
safety and inadequate labeling disclosure. If any of our products are recalled
due to a product defect or for any other reason, we could be required to incur
the expense of the recall or the expense of any resulting legal proceeding.
Additionally, if one of our significant brands were subject to recall, the image
of that brand and our company could be harmed, which could have a material
adverse effect on our business.
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PRODUCT LIABILITY SUITS, IF BROUGHT, COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS
If a product liability claim exceeding our insurance coverage were to be
successfully asserted against us, it could harm our business. We cannot assure
you that such coverage will be sufficient to insure against claims which may be
brought against us, or that we will be able to maintain such insurance or obtain
additional insurance covering existing or new products. As a marketer of food
products, we are subject to the risk of claims for product liability. We
maintain product liability insurance and generally require that our co-packers
maintain product liability insurance with us as a co-insured.
WE RELY ON INDEPENDENT CERTIFICATION FOR A NUMBER OF OUR NATURAL AND SPECIALTY
FOOD PRODUCTS
We rely on independent certification, such as certifications of our
products as "organic" or "kosher," to differentiate our products in natural and
specialty food categories. The loss of any independent certifications could
adversely affect our market position as a natural and specialty food company,
which could harm our business.
We must comply with the requirements of independent organizations or
certification authorities in order to label our product as certified. For
example, we can lose our "organic" certification if a plant becomes contaminated
with non-organic materials, or if not properly cleaned after a production run.
In addition, all raw materials must be certified organic. Similarly, we can lose
our "kosher" certification if a plant and raw materials do not meet the
requirements of the appropriate kosher supervision organization, such as The
Union of Orthodox Jewish Congregations, The Organized Kashruth Laboratories,
"KOF-K" Kosher Supervision, Kosher Overseers Associated of America and Upper
Midwest Kashruth.
DUE TO THE SEASONALITY OF MANY OF OUR PRODUCTS, INCLUDING OUR TEA PRODUCTS, AND
OTHER FACTORS, OUR OPERATING RESULTS ARE SUBJECT TO QUARTERLY FLUCTUATIONS
Our tea business consists primarily of manufacturing and marketing hot tea
products and as a result its quarterly results of operations reflect seasonal
trends resulting from increased demand for its hot tea products in the cooler
months of the year. In addition, some of our other products (e.g., baking and
cereal products and soups) also show stronger sales in the cooler months while
our snack food product lines are stronger in the warmer months. Quarterly
fluctuations in our sales volume and operating results are due to a number of
factors relating to our business, including the timing of trade promotions,
advertising and consumer promotions and other factors, such as seasonality,
inclement weather and unanticipated increases in labor, commodity, energy,
insurance or other operating costs. The impact on sales volume and operating
results due to the timing and extent of these factors can significantly impact
our business. For these reasons, you should not rely on our quarterly operating
results as indications of future performance. In some future periods, our
operating results may fall below the expectations of securities analysts and
investors, which could harm our business.
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TERRORISM AND THE UNCERTAINTY OF WAR MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR
OPERATING RESULTS
Terrorist attacks, such as the attacks that occurred in New York and
Washington, D.C. on September 11, 2001, the response by the United States on
October 7, 2001 and other acts of violence or war may affect the markets in
which we operate and our operations and profitability. Further terrorist attacks
against the United States or United States businesses may occur. The potential
near-term and long-term effect these attacks may have for our customers, the
markets for our services and the U.S. economy are uncertain. The consequences of
any terrorist attacks, or any armed conflicts which may result, are
unpredictable, and we may not be able to foresee events that could have an
adverse effect on our markets or our business.
OUR OFFICERS AND DIRECTORS MAY BE ABLE TO CONTROL OUR ACTIONS
Our officers and directors beneficially own 10.9% of our common stock as of
September 30, 2002. In addition, two of these directors currently serve as a
designee and a jointly appointed designee of an affiliate of H.J. Heinz Company,
or Heinz, which owns approximately 18.1% of our common stock as of September 30,
2002. Accordingly, our officers and directors may be in a position to influence
the election of our directors and otherwise influence stockholder action.
OUR ABILITY TO ISSUE PREFERRED STOCK MAY DETER TAKEOVER ATTEMPTS
Our board of directors is empowered to issue, without stockholder approval,
preferred stock with dividends, liquidation, conversion, voting or other rights
which could decrease the amount of earnings and assets available for
distribution to holders of our common stock and adversely affect the relative
voting power or other rights of the holders of our common stock. In the event of
issuance, the preferred stock could be used as a method of discouraging,
delaying or preventing a change in control. Our certificate of incorporation
authorizes the issuance of up to 5,000,000 shares of "blank check" preferred
stock with such designations, rights and preferences as may be determined from
time to time by our board of directors. Although we have no present intention to
issue any shares of our preferred stock, we may do so in the future under
appropriate circumstances.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares by the
selling stockholder. All of the proceeds from the sale of shares of common stock
by the selling stockholder will be received by the selling stockholder.
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SELLING STOCKHOLDER
The following table shows information regarding ownership of the shares of
common stock held by the selling stockholder. We issued the shares of our common
stock being registered in connection with our acquisition of substantially all
the assets in the United States and the United Kingdom of Imagine Foods, Inc.
and Imagine Foods (UK) Limited, which we completed on December 2, 2002.
NUMBER OF SHARES OF NUMBER OF SHARES OF
COMMON STOCK COMMON STOCK
NAME BENEFICIALLY OWNED PERCENT OF CLASS REGISTERED HEREBY
---- ------------------ ---------------- -----------------
Robert Nissenbaum(1) 532,765 1.6% 532,765
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(1) Mr. Nissenbaum currently serves as a vice president of Hain.
The selling stockholder has represented to us that he acquired the shares
of common stock for his own account for investment only and not with a view
towards the public sale or distribution thereof, except pursuant to sales
registered under the Securities Act or exemptions therefrom. In recognition of
the fact that the selling stockholder may wish to be legally permitted to sell
the shares when he deems appropriate, we agreed with the selling stockholder to
file with the Commission under the Securities Act the registration statement
with respect to the sale of the shares from time to time in transactions in the
over-the-counter market, in privately negotiated transactions, or through a
combination of these methods of sale, and have agreed to prepare and file such
amendments and supplements to the registration statement as may be necessary to
keep the registration statement effective until the shares are no longer
required to be registered for the sale thereof by the selling stockholder.
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PLAN OF DISTRIBUTION
All of the shares offered hereby may be sold from time to time by the
selling stockholder or by his registered assigns. The shares offered hereby may
be sold by one or more of the following methods: (a) a block trade in which a
broker or dealer so engaged will attempt to sell the shares as agent but may
purchase and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
(d) privately negotiated transactions; and (e) face-to-face transactions between
sellers and purchasers without a broker-dealer.
The selling stockholder may be deemed to be a statutory underwriter under
the Securities Act. Also any broker-dealers who act in connection with the sale
of the shares hereunder may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by them and
profit on any resale of the shares as principal may be deemed to be underwriting
discounts and commissions under the Securities Act.
In effecting sales, brokers or dealers engaged by the selling stockholder
may arrange for other brokers or dealers to participate. Such brokers or dealers
may receive commissions or discounts from the selling stockholder in amounts to
be negotiated by the selling stockholder. The selling stockholder may enter into
hedging transactions with broker-dealers and the broker-dealers may engage in
short sales of the common stock in the course of hedging the positions they
assume with the selling stockholder (including in connection with the
distribution of the common stock by such broker-dealers). The selling
stockholder may also engage in short sales of the common stock and may enter
into option or other transactions with broker-dealers that involve the delivery
of the common stock to the broker-dealers, who may then resell or otherwise
transfer such common stock. Such broker-dealers and any other participating
broker-dealers may, in connection with such sales, be deemed to be underwriters
within the meaning of the Securities Act. Any discounts or commissions received
by any such broker-dealers may be deemed to be underwriting discounts and
commissions under the Securities Act.
The selling stockholder may also sell shares in accordance with Rule 144
under the Securities Act, if Rule 144 is then available.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed broker-dealers.
We will pay all of the expenses incident to the filing of this registration
statement, estimated to be $32,000. These expenses include legal and accounting
fees in connection with the preparation of the registration statement of which
this prospectus is a part, legal and other fees in connection with the
qualification of the sale of the shares under the laws of certain states (if
any), registration and filing fees and other expenses. The selling stockholder
will pay all other expenses incident to the offering and sale of the shares to
the public, including commissions and discounts of underwriters, brokers,
dealers or agents, if any. We have agreed to keep the registration of the shares
offered hereby effective until the earlier of the date when all of the shares
offered by the selling stockholder have been sold or one year from the date the
shares were issued.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
Our authorized capital stock was 100,000,000 shares of common stock, $.01
par value per share and 5,000,000 shares of preferred stock, $.01 par value per
share.
The following description is qualified in all respects by reference to our
certificate of incorporation and the bylaws.
COMMON STOCK
Each share of common stock entitles the holder thereof to one vote on all
matters submitted to a vote of the stockholders. Since the holders of common
stock do not have cumulative voting rights, holders of more than 50% of the
outstanding shares can elect all of our directors then being elected and holders
of the remaining shares by themselves cannot elect any directors. The holders of
common stock do not have preemptive rights or rights to convert their common
stock into other securities. Holders of common stock are entitled to receive
ratably such dividends as may be declared by our board of directors out of funds
legally available therefor. In the event of our liquidation, dissolution or
winding up, holders of the common stock have the right to a ratable portion of
the assets remaining after payment of liabilities. All outstanding shares of
common stock are fully paid and nonassessable.
RIGHT TO PURCHASE SHARES OF HAIN COMMON STOCK BY AN AFFILIATE OF H.J. HEINZ
COMPANY
Under an agreement that we entered with an affiliate of Heinz in September
1999, the affiliate of Heinz has the right to purchase shares of our common
stock upon certain private issuances of common stock by us, including the
issuance of the shares to the selling stockholder to which this prospectus
relates, to maintain its then current interest in our company.
PREFERRED STOCK
We are authorized by our certificate of incorporation to issue a maximum of
5,000,000 shares of preferred stock, in one or more series and containing such
rights, privileges and limitations including voting rights, dividend rates,
conversion privileges, redemption rights and terms, redemption prices and
liquidation preferences, as our board of directors may, from time to time,
determine.
The issuance of shares of preferred stock pursuant to our board of
directors' authority described above could decrease the amount of earnings and
assets available for distribution to holders of common stock, and otherwise
adversely affect the rights and powers, including voting rights, of such holders
and may have the effect of delaying or preventing us from being subject to a
change in control. See "Risk Factors -- Our Ability To Issue Preferred Stock May
Deter Takeover Attempts." We are not required by the Delaware General
Corporation Law, or the DGCL, to seek stockholder approval prior to any issuance
of authorized but unissued stock and our board of directors does not currently
intend to seek stockholder approval prior to any issuance of authorized but
unissued stock, unless otherwise required by law.
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OPTIONS
1993 EXECUTIVE STOCK OPTION PLAN
In July 1993, we adopted the 1993 Executive Stock Option Plan, which we
refer to in this prospectus as the 1993 Plan, under which we granted to Irwin D.
Simon, our founder, president and chief executive officer, options to purchase
600,000 shares of our common stock, 535,000 of which were outstanding at June
30, 2002. The exercise price of options designed to qualify as incentive options
is $3.58 per share and the exercise price of non-qualified options is $3.25 per
share. The options expire in 2003.
1994 LONG TERM INCENTIVE AND STOCK AWARD PLAN
In December 1994, we adopted the 1994 Long Term Incentive and Stock Award
Plan, which we refer to in this prospectus as the 1994 Plan. The 1994 Plan, as
amended, provides for the granting of incentive stock options and other
stock-based awards to employees and directors to purchase up to an aggregate of
6,400,000 shares of our common stock. The 1994 Plan is administered by the
compensation committee of the board of directors, or a subcommittee thereof. All
of the awards granted to date under the 1994 Plan have been incentive or
non-qualified stock options providing for exercise prices not less than the fair
market price at the date of grant, and expire 10 years after date of grant. At
the discretion of the compensation committee, options are exercisable upon grant
or over an extended vesting period. During fiscal 2002, options to purchase
1,688,900 shares were granted at prices ranging from $15.42 to $22.72 per share,
options to purchase 48,133 shares were exercised and options to purchase 64,387
shares were canceled. At June 30, 2002, options to purchase 638,025 shares were
available for grant under the 1994 Plan.
2002 LONG TERM INCENTIVE AND STOCK AWARD PLAN
On November 12, 2002, our stockholders adopted our 2002 Long Term Incentive
and Stock Award Plan, which we refer to in this prospectus as the 2002 Plan,
which provides for the grant of incentive stock options and other stock-based
awards. At November 12, 2002, 1,600,000 shares were available for grant and no
awards had been granted under the 2002 Plan.
1996 DIRECTORS STOCK OPTION PLAN
In December 1995, we adopted the 1996 Directors Stock Option Plan, which we
refer to in this prospectus as the 1996 Directors Plan. The 1996 Directors Plan
provides for the granting of stock options to non-employee directors to purchase
up to an aggregate of 750,000 shares of our common stock. No options may be
granted under the Directors Plan after December 2000 and, as of June 30, 2002
options to purchase 380,000 shares were outstanding under the 1996 Directors
Plan.
2000 DIRECTORS STOCK OPTION PLAN
In May 2000, we adopted a new 2000 Directors Stock Option Plan, which we
refer to in this prospectus as the 2000 Directors Plan. The 2000 Directors Plan
provides for granting of stock options to non-employee directors to purchase up
to an aggregate of 750,000 shares of our common stock.
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During fiscal 2002, 255,000 options were granted at prices ranging from $20.01
to $26.44 and no options where exercised or canceled. At June 30, 2002, 495,000
options were available for grant under the 2000 Directors Plan.
CELESTIAL PLANS
In connection with the merger of Celestial Seasonings, Inc. with and into
our wholly owned subsidiary on May 30, 2000 (the "Merger"), we assumed
Celestial's 1993 Long-Term Incentive Plan and 1994 Non-Employee Director
Compensation Plan, which we refer to in this prospectus collectively as the
Celestial Plans. Following the consummation of the Merger, no options to
purchase shares of common stock will be granted under the Celestial Plans.
During our fiscal 2002, options to purchase 46,208 shares were exercised and
options to purchase 2,530 shares were cancelled. As of June 30, 2002, options to
purchase 414,720 shares of common stock were outstanding under the Celestial
Plans.
WARRANTS
As of June 30, 2002, warrants to purchase 322,764 shares of common stock
were available for exercise. Each warrant entitles the holder to purchase one
share of common stock, subject to anti-dilution adjustments, at an exercise
price ranging from $3.25 to $12.69 per share.
CERTIFICATE OF INCORPORATION AND BYLAWS
Pursuant to the DGCL, the power to adopt, amend and repeal bylaws is
conferred solely upon the stockholders unless the corporation's certificate of
incorporation also confers such power upon the board of directors. Under our
certificate of incorporation, our board of directors is granted the power to
amend our bylaws. Our bylaws provide that each director has one vote on each
matter for which directors are entitled to vote. Our certificate of
incorporation and/or bylaws also provide that (1) from time to time, by
resolution, our board of directors has the power to change the number of
directors, (2) the directors will hold office until the next annual meeting of
stockholders and until their respective successors are elected and qualified,
and (3) special meetings of stockholders may only be called by our board of
directors or our officers. These provisions, in addition to the existence of
authorized but unissued capital stock, may have the effect, either alone or in
combination with each other, of making more difficult or discouraging
unsolicited third parties from an acquisition of us deemed undesirable by our
board of directors. Our board of directors currently has eleven members.
SECTION 203 OF THE DELAWARE LAW
Section 203 of the DGCL prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (1) prior to the date of the business
combination, the transaction is approved by the board of directors of the
corporation; (2) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owns
at least 85% of the outstanding voting stock, or (3) on or after such date the
business combination is approved by the board of directors and by the
affirmative vote of at least 66-2/3% of the outstanding voting stock that is not
owned by the interested
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stockholder. A "business combination" includes mergers, asset sales and other
transactions resulting in a financial benefit to the stockholder. An "interested
stockholder" is a person, who, together with affiliates and associates, owns (or
within three years, did own) 15% or more of the corporation's voting stock. This
provision of law could discourage, prevent or delay a change in management or
stockholder control of us, which could have the effect of discouraging bids and
thereby prevent stockholders from receiving the maximum value for their shares,
or a premium for their shares in a hostile takeover situation.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the common stock is Continental Stock
Transfer & Trust Company, New York, New York.
LEGAL MATTERS
Certain legal matters with respect to the validity of the common stock
offered hereby will be passed upon for us by Cahill Gordon & Reindel, New York,
New York. From time to time, Cahill Gordon & Reindel has represented us and may
continue to represent us and our subsidiaries in connection with various legal
matters. Roger Meltzer, a partner of Cahill Gordon & Reindel, is also a member
of our board of directors. Mr. Meltzer receives compensation as a board member.
EXPERTS
The consolidated financial statements of The Hain Celestial Group, Inc. and
Subsidiaries appearing in The Hain Celestial Group, Inc.'s Annual Report (Form
10-K) for the year ended June 30, 2002, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as an expert in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Commission. You can receive copies of such reports, proxy
and information statements, and other information, at prescribed rates, from the
Commission by addressing written requests to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
You may also read and copy any document we file with the SEC at its public
reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the public
reference rooms. The Commission also maintains a web site that contains reports,
proxy and information statements and other information regarding registrants
such as us, that file electronically with the Commission. The address of the
Commission's web site is http://www.sec.gov.
This prospectus is part of a registration statement on Form S-3 that we
filed with the Commission to register the shares that the selling stockholder
will sell in this offering. This prospectus does not include all of the
information contained in the registration statement. For further information
about us and the securities offered in this prospectus, you should review the
registration statement and the information incorporated by reference therein.
You can inspect or copy the registration statement, at prescribed rates, at the
Commission's public reference facilities at the address listed above.
The Commission allows us to "incorporate by reference" information into the
prospectus, which means that we can disclose important information to you by
referring you to those documents filed separately with the Commission. The
information incorporated by reference is considered part of this prospectus, and
information that we file later with the Commission will automatically update and
supersede this information.
This prospectus incorporates by reference the documents listed below that
we previously filed with the Commission. These documents contain important
information about us and our finances:
HAIN'S SEC FILINGS
(FILE NO. 0-22818) PERIOD
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Annual Report on Form 10-K Fiscal year ended June 30, 2002
Quarterly Report on Form 10-Q Quarter ended September 30, 2002
Current Reports on Form 8-K Filed on September 4, 2002 and
December 3, 2002
We also incorporate by reference additional documents that we may file with
the Commission between the date of this prospectus and the completion of the
offering. These additional documents include periodic reports, such as Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, as well as proxy statements. Upon request, we will provide without charge
to each person to whom a prospectus is delivered, including any beneficial
owner, a copy of any or all of the information that has been incorporated by
reference in this prospectus. If you would like to obtain this information from
us, please direct your request, either in writing or by telephone, to the
President, The Hain Celestial Group, Inc., 58 South Service Road, Melville, New
York, 11747, (631) 730-2200.
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THE HAIN CELESTIAL GROUP, INC.
COMMON STOCK
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PROSPECTUS
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JANUARY 7, 2003
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