UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): February 4, 2015
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THE HAIN CELESTIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
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Delaware | 0-22818 | 22-3240619 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1111 Marcus Avenue, Lake Success, NY 11042
(Address of principal executive offices)
Registrant’s telephone number, including area code: (516) 587-5000
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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 Item 2.02, including the exhibit attached hereto, is being furnished and 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 February 4, 2015, The Hain Celestial Group, Inc. (the “Company”) issued a press release announcing financial results for its second quarter ended December 31, 2014. 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 of The Hain Celestial Group, Inc. dated February 4, 2015 | |
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: February 4, 2015
THE HAIN CELESTIAL GROUP, INC. (Registrant) | ||
By: | /s/ Stephen J. Smith | |
Title: | Executive Vice President and Chief Financial Officer | |
EXHIBIT INDEX
Exhibit No. | Description | |
99.1* | Press Release of The Hain Celestial Group, Inc. dated February 4, 2015 | |
* Filed herewith
Exhibit 99.1
Stephen Smith/Mary Anthes
The Hain Celestial Group, Inc.
516-587-5000
HAIN CELESTIAL ANNOUNCES SECOND QUARTER FISCAL YEAR 2015
RECORD NET SALES AND ADJUSTED EARNINGS PER SHARE
Net Sales Improve by 31%
Earnings Per Diluted Share $0.43
Adjusted Earnings Per Diluted Share $0.54
Updates Guidance
Lake Success, NY, February 4, 2015-The Hain Celestial Group, Inc. (NASDAQ: HAIN), a leading organic and natural products company with operations in North America, Europe and India providing consumers with A Healthier Way of Life™, today reported record results for its second quarter ended December 31, 2014.
Second Quarter Performance Highlights
• | Record second quarter net sales of $696.4 million; record adjusted net sales of $701.7 million, a 31% increase over the prior year period adjusted net sales |
• | Earnings per diluted share of $0.43, which includes an after-tax charge of $4.5 million for the nut butter voluntary recall; record second quarter adjusted earnings per diluted share of $0.54, a 26% increase over the prior year period adjusted earnings per diluted share |
• | Operating income $74.0 million; adjusted operating income $87.4 million, a 31% increase over the prior year period adjusted operating income |
“We delivered a strong quarter across our diverse portfolio of worldwide brands, overcoming foreign currency impacts to deliver our 17th consecutive quarter of year-over-year double digit sales and adjusted earnings growth,” said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. “I am happy to continue to see our organic growth across the business and our high single digit consumption growth in our U.S. business. The health and wellness industry has a robust outlook, and we are well-positioned to capitalize on this future growth with consumers through our distribution of branded organic, natural and better-for-you product offerings in over 65 countries.”
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
Second Quarter Fiscal Year 2015
The Company reported record net sales of $696.4 million and adjusted net sales of $701.7 million, a 31% increase, as adjusted for the nut butter voluntary recall. Hain Celestial US reported record second quarter net sales of $354.0 million and record second quarter adjusted net sales of $359.3 million, an increase of 10% over the prior year second quarter, which includes a $5.3 million sales adjustment for the nut butter voluntary recall. In the United Kingdom, net sales were $200.8 million, a 38% increase which included approximately $50 million from the acquisition of Tilda, and the Rest of the World segment reported net sales of $55.4 million. Hain Pure Protein Corporation (HPPC) reported net sales of $86.2 million. The Company had strong brand contribution led by double digit growth from Sensible Portions®, The Greek Gods®, Terra®, Garden of Eatin’®, Imagine®, Little Bear®, WestSoy®, Nile Spice®, Plainville Farms®, Hartley’s®, Lima®, Natumi®, Frank Cooper’s®, Jason®, Avalon Organic® and Alba Botanica®. Sales of the Rudi’s Organic Bakery®, FreeBird® and Plainville Farms® brands acquired after the second quarter of fiscal year 2014 also contributed to the growth in net sales.
The Company earned net income of $44.6 million and adjusted net income of $55.5 million for the second quarter. Earnings per diluted share was $0.43 and on an adjusted basis was $0.54, a 26% increase from the prior year second quarter. Refer to Non-GAAP Financial Measures for adjustments.
Fiscal Year 2015 Guidance
The Company updated its annual net sales guidance by approximately $70 million for foreign currency and in addition approximately $20 million, net, primarily related to the nut butter recall and a fire affecting its Tilda manufacturing facility:
• | Total net sales range of $2.650 billion to $2.675 billion; an increase of approximately 23% to 24% as compared to fiscal year 2014. |
• | Earnings range of $1.85 to $1.89 per diluted share; an increase of 17% to 19% as compared to fiscal year 2014. |
With respect to the cadence of the second half of Company’s fiscal year, the Company expects net sales to be slightly higher in the fourth quarter, as compared to the third quarter, while 40% to 45% of the Company’s earnings will be in the third quarter and the balance in the fourth quarter.
Guidance is provided for continuing operations on a non-GAAP basis and excludes acquisition-related expenses, integration and restructuring charges, factory start-up costs, unrealized net foreign currency gains or losses, reserves for litigation settlements and other non-recurring items including any product recalls or market withdrawals that have been or may be incurred during the Company’s fiscal year 2015, which the Company will continue to identify as it reports its future financial results. Guidance excludes the impact of any future acquisitions.
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Segment Results
The Company’s operations are managed into the following segments: United States, United Kingdom, HPPC and Rest of World (comprised of Canada and Continental Europe).
The following is a summary of second quarter and six month results by reportable segment:
(dollars in thousands) | United States | United Kingdom | HPPC | Rest of World | Corporate / Other | Total | ||||||||||||||||||
NET SALES | ||||||||||||||||||||||||
Net sales - Three months ended 12/31/14 | $ | 353,969 | $ | 200,797 | $ | 86,216 | $ | 55,401 | $ | — | $ | 696,383 | ||||||||||||
Non-GAAP Adjustments [1] | $ | 5,331 | $ | — | $ | — | $ | — | $ | — | $ | 5,331 | ||||||||||||
Adjusted net sales - Three months ended 12/31/14 | $ | 359,300 | $ | 200,797 | $ | 86,216 | $ | 55,401 | $ | — | $ | 701,714 | ||||||||||||
Net sales - Three months ended 12/31/13 [2] | $ | 327,725 | $ | 146,051 | $ | — | $ | 61,103 | $ | — | $ | 534,879 | ||||||||||||
% change - FY'15 adjusted net sales vs. FY'14 net sales | 9.6 | % | 37.5 | % | (9.3 | )% | 31.2 | % | ||||||||||||||||
OPERATING INCOME | ||||||||||||||||||||||||
Three months ended 12/31/14 | ||||||||||||||||||||||||
Operating income | $ | 55,591 | $ | 12,263 | $ | 7,715 | $ | 5,613 | $ | (7,170 | ) | $ | 74,012 | |||||||||||
Non-GAAP Adjustments [1] | $ | 7,555 | $ | 5,189 | $ | — | $ | — | $ | 627 | $ | 13,371 | ||||||||||||
Adjusted operating income | $ | 63,146 | $ | 17,452 | $ | 7,715 | $ | 5,613 | $ | (6,543 | ) | $ | 87,383 | |||||||||||
Adjusted operating income margin | 17.6 | % | 8.7 | % | 8.9 | % | 10.1 | % | 12.5 | % | ||||||||||||||
Three months ended 12/31/13 | ||||||||||||||||||||||||
Operating income | $ | 56,510 | $ | 12,001 | $ | — | $ | 3,996 | $ | (8,194 | ) | $ | 64,313 | |||||||||||
Non-GAAP Adjustments [1] | $ | 482 | $ | 1,296 | $ | — | $ | 336 | $ | 437 | $ | 2,551 | ||||||||||||
Adjusted operating income | $ | 56,992 | $ | 13,297 | $ | — | $ | 4,332 | $ | (7,757 | ) | $ | 66,864 | |||||||||||
Adjusted operating income margin | 17.4 | % | 9.1 | % | 7.1 | % | 12.5 | % | ||||||||||||||||
(1) See accompanying tables of "Reconciliation of GAAP Results to Non-GAAP Measures"
(2) There were no non-GAAP adjustments to net sales for the three months ended 12/31/13
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(dollars in thousands) | United States | United Kingdom | HPPC | Rest of World | Corporate / Other | Total | ||||||||||||||||||
NET SALES | ||||||||||||||||||||||||
Net sales - Six months ended 12/31/14 | $ | 690,884 | $ | 373,076 | $ | 156,886 | $ | 106,794 | $ | — | $ | 1,327,640 | ||||||||||||
Non-GAAP Adjustments [1] | $ | 15,773 | $ | — | $ | — | $ | 928 | $ | — | $ | 16,701 | ||||||||||||
Adjusted net sales - Six months ended 12/31/14 | $ | 706,657 | $ | 373,076 | $ | 156,886 | $ | 107,722 | $ | — | $ | 1,344,341 | ||||||||||||
Net sales - Six months ended 12/31/13 [2] | $ | 639,720 | $ | 260,046 | $ | — | $ | 112,597 | $ | — | $ | 1,012,363 | ||||||||||||
% change - FY'15 adjusted net sales vs. FY'14 net sales | 10.5 | % | 43.5 | % | (4.3 | )% | 32.8 | % | ||||||||||||||||
OPERATING INCOME | ||||||||||||||||||||||||
Six months ended 12/31/14 | ||||||||||||||||||||||||
Operating income | $ | 85,181 | $ | 17,858 | $ | 11,534 | $ | 6,248 | $ | (17,982 | ) | $ | 102,839 | |||||||||||
Non-GAAP Adjustments [1] | $ | 30,358 | $ | 8,164 | $ | 140 | $ | 2,187 | $ | 2,496 | $ | 43,345 | ||||||||||||
Adjusted operating income | $ | 115,539 | $ | 26,022 | $ | 11,674 | $ | 8,435 | $ | (15,486 | ) | $ | 146,184 | |||||||||||
Adjusted operating income margin | 16.4 | % | 7.0 | % | 7.4 | % | 7.8 | % | 10.9 | % | ||||||||||||||
Six months ended 12/31/13 | ||||||||||||||||||||||||
Operating income | $ | 102,876 | $ | 13,912 | $ | — | $ | 6,444 | $ | (19,147 | ) | $ | 104,085 | |||||||||||
Non-GAAP Adjustments [1] | $ | 482 | $ | 1,296 | $ | — | $ | 802 | $ | 3,216 | $ | 5,796 | ||||||||||||
Adjusted operating income | $ | 103,358 | $ | 15,208 | $ | — | $ | 7,246 | $ | (15,931 | ) | $ | 109,881 | |||||||||||
Adjusted operating income margin | 16.2 | % | 5.8 | % | 6.4 | % | 10.9 | % | ||||||||||||||||
(1) See accompanying tables of "Reconciliation of GAAP Results to Non-GAAP Measures"
(2) There were no non-GAAP adjustments to net sales for the six months ended 12/31/13
Webcast
Hain Celestial will host a conference call and webcast at 8:30 AM Eastern Time today to review its second quarter fiscal year 2015 results. The conference call will be webcast and available under the Investor Relations section of the Company’s website at www.hain.com.
Upcoming Events
The Company is scheduled to present at the 2015 Consumer Analyst Group of New York (“CAGNY”) Conference on Tuesday, February 17, 2015 at 4:15 PM. A live audio webcast and a replay of the event will be available under the Investor Relations section of the Company's website at www.hain.com.
The Hain Celestial Group, Inc.
The Hain Celestial Group (NASDAQ: HAIN), headquartered in Lake Success, NY, is a leading organic and natural products company with operations in North America, Europe and India. Hain Celestial participates in many natural categories with well-known brands that include Celestial Seasonings®, Earth’s Best®, Ella’s Kitchen®, Terra®, Garden of Eatin’®, Sensible Portions®, Health Valley®, Arrowhead Mills®, MaraNatha®, SunSpire®, DeBoles®, Casbah®, Rudi’s Organic Bakery®, Gluten Free Café™, Hain Pure Foods®, Spectrum®, Spectrum Essentials®, Walnut Acres Organic®, Imagine®, Almond Dream®, Rice Dream®, Soy Dream®, WestSoy®, The Greek Gods®, BluePrint®, FreeBird®, Plainville Farms®, Yves Veggie Cuisine®, Europe’s Best®, Cully & Sully®, New Covent Garden Soup Co.®, Johnson’s Juice Co.®, Farmhouse Fare®, Hartley’s®, Sun-Pat®, Gale’s®, Robertson’s®, Frank
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Cooper’s®, Linda McCartney®, Lima®, Danival®, Natumi®, GG UniqueFiber®, Tilda®, JASON®, Avalon Organics®, Alba Botanica® and Queen Helene®. Hain Celestial has been providing A Healthier Way of Life™ since 1993. For more information, visit www.hain.com.
Safe Harbor Statement
Certain statements contained in this press release constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Words such as “plan,” “continue,” “expect,” “expected,” “anticipate,” “intend”, “estimate,” “believe,” “seek”, “may,” “potential,” “can,” “positioned,” “should,” “future,” “look forward”, “outlook”, and similar expressions, or the negative of those expressions, may identify forward-looking statements. These forward-looking statements include the Company’s beliefs or expectations relating to (i) the Company’s guidance for net sales and earnings per diluted share for fiscal year 2015, and (ii) growth trends and distribution opportunities. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the Company’s actual results, levels of activity, performance or achievements of the Company, 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. Such factors include, among others, the Company’s ability to achieve its guidance for net sales and earnings per diluted share in fiscal year 2015 given the economic environment in the U.S. and other markets that it sells products as well as economic, political and business conditions generally and their effect on the Company’s customers and consumers' product preferences, and the Company’s business, financial condition and results of operations; changes in estimates or judgments related to the Company’s impairment analysis of goodwill and other intangible assets, as well as with respect to the Company's valuation allowances of its deferred tax assets; the Company’s ability to implement its business and acquisition strategy; the ability of the Company’s joint venture investment to successfully execute its business plan; the Company’s ability to realize sustainable growth generally and from investments in core brands, offering new products and its focus on cost containment, productivity, cash flow and margin enhancement in particular; the Company’s ability to effectively integrate its acquisitions; the Company’s ability to successfully consummate its proposed divestitures; the effects on the Company’s results of operations from the impacts of foreign exchange; competition; the success and cost of introducing new products as well as the Company’s ability to increase prices on existing products; availability and retention of key personnel; the Company’s reliance on third party distributors, manufacturers and suppliers; the Company’s ability to maintain existing customers and secure and integrate new customers; the Company’s ability to respond to changes and trends in customer and consumer demand, preferences and consumption; international sales and operations; changes in fuel, raw material and commodity costs; changes in, or the failure to comply with, government regulations; the availability of organic and natural ingredients; the loss of one or more of the Company’s manufacturing facilities; the ability to use the Company’s trademarks; reputational damage; product liability; product recall or market withdrawal; seasonality; litigation; the Company's reliance on its information technology systems; and the 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, 2014. 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
This press release and the accompanying tables include non-GAAP financial measures, including adjusted net sales, adjusted gross profit, adjusted operating income, and adjusted income from continuing operations, adjusted income per diluted share from continuing operations and adjusted EBITDA (defined below) and operating free cash flow. The reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures including adjustments for the recall and withdrawal are presented in the tables “Reconciliation of GAAP Results to Non-GAAP Measures” for the three months and six months ended December 31, 2014 and 2013 and in the paragraphs below. 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 Consolidated Statements of Income presented in accordance with GAAP.
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The Company defines adjusted EBITDA as net income (a GAAP measure) before income taxes, net interest expense, depreciation and amortization, impairment of long lived assets, equity in the earnings of non-consolidated affiliates, stock based compensation, acquisition-related expenses, including integration and restructuring charges, and other non-recurring items. The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses this measure for reviewing the financial results of the Company and as a component of performance-based executive compensation.
For the three and six months ended December 31, 2014 and 2013, adjusted EBITDA was calculated as follows:
3 Months Ended | 6 Months Ended | |||||||||||||
12/31/2014 | 12/31/2013 | 12/31/2014 | 12/31/2013 | |||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||
Net Income | $ | 44,575 | $ | 41,231 | $ | 63,430 | $ | 68,886 | ||||||
Income taxes | 20,931 | 19,748 | 26,997 | 28,499 | ||||||||||
Interest expense, net | 5,882 | 5,209 | 11,974 | 10,494 | ||||||||||
Depreciation and amortization | 14,322 | 11,355 | 28,902 | 21,808 | ||||||||||
Equity in earnings of affiliates | (308 | ) | (1,473 | ) | (328 | ) | (2,045 | ) | ||||||
Stock based compensation | 3,060 | 3,400 | 5,999 | 6,637 | ||||||||||
Subtotal | $ | 88,462 | $ | 79,470 | $ | 136,974 | $ | 134,279 | ||||||
Adjustments (a) | 13,371 | 1,402 | 38,012 | 4,647 | ||||||||||
Adjusted EBITDA | $ | 101,833 | $ | 80,872 | $ | 174,986 | $ | 138,926 | ||||||
(a) The adjustments include all adjustments in the table "Reconciliation of GAAP Results to Non-GAAP Measures" except for unrealized currency impacts, gain on disposal of investment held for sale, interest accretion and other items, net and taxes.
For the six months ended December 31, 2014 and 2013, operating free cash flow was calculated as follows:
The Company defines Operating Free Cash Flow as cash provided from or used in operating activities (a GAAP measure) less capital expenditures. The Company views operating free cash flow as an important measure because it is one factor in evaluating the amount of cash available for discretionary investments. For the six-months ended December 31, 2014 and 2013, operating free cash flow was calculated as follows:
6 Months Ended | |||||||
12/31/2014 | 12/31/2013 | ||||||
(dollars in thousands) | |||||||
Cash flow provided by operating activities | $ | 54,251 | $ | 73,488 | |||
Purchases of property, plant and equipment | (25,766 | ) | (20,822 | ) | |||
Operating free cash flow | $ | 28,485 | $ | 52,666 | |||
Operating free cash flow for the six-months ended December 31, 2014 was $28.5 million, compared to $52.7 million in the prior year period. Our current period operating free cash flow was impacted primarily by the effects of our MaraNatha® nut butter recall and working capital requirements on a higher sales base.
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THE HAIN CELESTIAL GROUP, INC. | |||||||
Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
December 31, | June 30, | ||||||
2014 | 2014 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 135,227 | $ | 123,751 | |||
Trade receivables, net | 321,523 | 287,915 | |||||
Inventories | 372,146 | 320,251 | |||||
Deferred income taxes | 25,592 | 23,780 | |||||
Other current assets | 50,877 | 47,906 | |||||
Total current assets | 905,365 | 803,603 | |||||
Property, plant and equipment, net | 333,824 | 310,661 | |||||
Goodwill, net | 1,093,589 | 1,134,368 | |||||
Trademarks and other intangible assets, net | 622,467 | 651,482 | |||||
Investments and joint ventures | 6,572 | 36,511 | |||||
Other assets | 29,886 | 28,692 | |||||
Total assets | $ | 2,991,703 | $ | 2,965,317 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 258,139 | $ | 239,162 | |||
Accrued expenses and other current liabilities | 81,857 | 84,906 | |||||
Current portion of long-term debt | 89,347 | 100,096 | |||||
Total current liabilities | 429,343 | 424,164 | |||||
Long-term debt, less current portion | 785,845 | 767,827 | |||||
Deferred income taxes | 151,316 | 148,439 | |||||
Other noncurrent liabilities | 4,550 | 5,020 | |||||
Total liabilities | 1,371,054 | 1,345,450 | |||||
Stockholders' equity: | |||||||
Common stock* | 1,048 | 516 | |||||
Additional paid-in capital* | 1,027,769 | 969,697 | |||||
Retained earnings | 693,048 | 629,618 | |||||
Accumulated other comprehensive income | (48,950 | ) | 60,128 | ||||
Subtotal | 1,672,915 | 1,659,959 | |||||
Treasury stock | (52,266 | ) | (40,092 | ) | |||
Total stockholders' equity | 1,620,649 | 1,619,867 | |||||
Total liabilities and stockholders' equity | $ | 2,991,703 | $ | 2,965,317 | |||
* Amounts as of June 30, 2014 have been retroactively adjusted to reflect a two-for-one stock split of our common stock
in the form of a 100% stock dividend.
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THE HAIN CELESTIAL GROUP, INC. | ||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Net sales | $ | 696,383 | $ | 534,879 | $ | 1,327,640 | $ | 1,012,363 | ||||||||
Cost of sales | 529,056 | 391,802 | 1,034,469 | 750,163 | ||||||||||||
Gross profit | 167,327 | 143,077 | 293,171 | 262,200 | ||||||||||||
Selling, general and administrative expenses | 88,621 | 75,237 | 179,545 | 148,824 | ||||||||||||
Amortization of acquired intangibles | 4,303 | 3,647 | 8,812 | 7,115 | ||||||||||||
Acquisition related expenses including integration and restructuring charges, net | 391 | (120 | ) | 1,975 | 2,176 | |||||||||||
Operating income | 74,012 | 64,313 | 102,839 | 104,085 | ||||||||||||
Interest expense and other expenses | 8,814 | 5,955 | 12,740 | 9,893 | ||||||||||||
Income before income taxes and equity in earnings of equity-method investees | 65,198 | 58,358 | 90,099 | 94,192 | ||||||||||||
Income tax provision | 20,931 | 19,748 | 26,997 | 28,499 | ||||||||||||
(Income) of equity-method investees, net of tax | (308 | ) | (1,473 | ) | (328 | ) | (2,045 | ) | ||||||||
Income from continuing operations | 44,575 | 40,083 | 63,430 | 67,738 | ||||||||||||
Loss from discontinued operations, net of tax | — | 1,148 | — | 1,148 | ||||||||||||
Net income | $ | 44,575 | $ | 41,231 | $ | 63,430 | $ | 68,886 | ||||||||
Basic net income per share*: | ||||||||||||||||
From continuing operations | $ | 0.44 | $ | 0.42 | $ | 0.63 | $ | 0.71 | ||||||||
From discontinued operations | — | 0.01 | — | 0.01 | ||||||||||||
Net income per share - basic | $ | 0.44 | $ | 0.43 | $ | 0.63 | $ | 0.72 | ||||||||
Diluted net income per share*: | ||||||||||||||||
From continuing operations | $ | 0.43 | $ | 0.41 | $ | 0.62 | $ | 0.69 | ||||||||
From discontinued operations | — | 0.01 | — | 0.01 | ||||||||||||
Net income per share - diluted | $ | 0.43 | $ | 0.42 | $ | 0.62 | $ | 0.70 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 101,267 | 96,038 | 100,975 | 95,726 | ||||||||||||
Diluted | 103,226 | 98,370 | 102,941 | 98,120 | ||||||||||||
*Share and per share amounts for the three and six months ended December 31, 2013 have been retroactively adjusted to
reflect a two-for-one stock split of our common stock in the form of a 100% stock dividend.
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THE HAIN CELESTIAL GROUP, INC. | ||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures | ||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||
Three Months Ended December 31, | ||||||||||||||
2014 GAAP | Adjustments | 2014 Adjusted | 2013 Adjusted | |||||||||||
(Unaudited) | ||||||||||||||
Net Sales | $ | 696,383 | $ | 5,331 | $ | 701,714 | $ | 534,879 | ||||||
Cost of sales | 529,056 | (5,089 | ) | 523,967 | 389,586 | |||||||||
Gross profit | 167,327 | 10,420 | 177,747 | 145,293 | ||||||||||
Selling, general and administrative expenses | 88,621 | (2,560 | ) | 86,061 | 74,782 | |||||||||
Amortization of acquired intangibles | 4,303 | — | 4,303 | 3,647 | ||||||||||
Acquisition related expenses including integration and restructuring charges, net | 391 | (391 | ) | — | — | |||||||||
Operating income | 74,012 | 13,371 | 87,383 | 66,864 | ||||||||||
Interest and other expenses, net | 8,814 | (2,626 | ) | 6,188 | 6,046 | |||||||||
Income before income taxes and equity in earnings of equity-method investees | 65,198 | 15,997 | 81,195 | 60,818 | ||||||||||
Income tax provision | 20,931 | 5,054 | 25,985 | 19,604 | ||||||||||
(Income) of equity-method investees, net of tax | (308 | ) | — | (308 | ) | (1,473 | ) | |||||||
Income from continuing operations | $ | 44,575 | $ | 10,943 | $ | 55,518 | $ | 42,687 | ||||||
Income per share from continuing operations - basic | $ | 0.44 | $ | 0.11 | $ | 0.55 | $ | 0.44 | ||||||
Income per share from continuing operations - diluted | $ | 0.43 | $ | 0.11 | $ | 0.54 | $ | 0.43 | ||||||
Weighted average common shares outstanding*: | ||||||||||||||
Basic | 101,267 | 101,267 | 96,038 | |||||||||||
Diluted | 103,226 | 103,226 | 98,370 | |||||||||||
*Share and per share amounts for the three months ended December 31, 2013 have been retroactively adjusted to reflect a
two-for-one stock split of our common stock in the form of a 100% stock dividend.
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FY 2015 | FY 2014 | |||||||||||||
Impact on Income Before Income Taxes | Impact on Income Tax Provision | Impact on Income Before Income Taxes | Impact on Income Tax Provision | |||||||||||
(Unaudited) | ||||||||||||||
Nut butter recall | $ | 5,331 | $ | 2,026 | $ | — | $ | — | ||||||
Net sales | 5,331 | 2,026 | — | — | ||||||||||
Nut butter recall | (496 | ) | (188 | ) | — | — | ||||||||
Fakenham inventory allowance for fire | 900 | 187 | — | — | ||||||||||
UK Factory start-up costs | 3,289 | 682 | 1,677 | 426 | ||||||||||
Acquisition related integration costs | 1,396 | 364 | 102 | 23 | ||||||||||
Co-pack contract termination costs | — | — | 437 | 166 | ||||||||||
Cost of sales | 5,089 | 1,045 | 2,216 | 615 | ||||||||||
Nut butter recall | 2,432 | 924 | — | — | ||||||||||
Litigation expenses | 128 | 49 | 455 | 173 | ||||||||||
Selling, general and administrative expenses | 2,560 | 973 | 455 | 173 | ||||||||||
Acquisition related fees and expenses, integration and restructuring charges | 391 | 142 | 1,661 | 534 | ||||||||||
Contingent consideration (income) expense, net | — | — | (1,781 | ) | (1,117 | ) | ||||||||
Acquisition related (income) expenses including integration and restructuring charges | 391 | 142 | (120 | ) | (583 | ) | ||||||||
Unrealized currency impacts | 2,626 | 868 | (98 | ) | (149 | ) | ||||||||
Gain on disposal of investment held for sale | — | — | (234 | ) | (89 | ) | ||||||||
Accretion of contingent consideration | — | — | 241 | 82 | ||||||||||
Interest and other expenses, net | 2,626 | 868 | (91 | ) | (156 | ) | ||||||||
Nondeductible acquisition related transaction expenses | — | — | — | (193 | ) | |||||||||
Income tax provision | — | — | — | (193 | ) | |||||||||
Total adjustments | $ | 15,997 | $ | 5,054 | $ | 2,460 | $ | (144 | ) | |||||
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THE HAIN CELESTIAL GROUP, INC. | ||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures | ||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||
Six Months Ended December 31, | ||||||||||||||
2014 GAAP | Adjustments | 2014 Adjusted | 2013 Adjusted | |||||||||||
(Unaudited) | ||||||||||||||
Net Sales | $ | 1,327,640 | $ | 16,701 | $ | 1,344,341 | $ | 1,012,363 | ||||||
Cost of sales | 1,034,469 | (19,131 | ) | 1,015,338 | 747,222 | |||||||||
Gross profit | 293,171 | 35,832 | 329,003 | 265,141 | ||||||||||
Selling, general and administrative expenses | 179,545 | (5,538 | ) | 174,007 | 148,145 | |||||||||
Amortization of acquired intangibles | 8,812 | — | 8,812 | 7,115 | ||||||||||
Acquisition related expenses including integration and restructuring charges, net | 1,975 | (1,975 | ) | — | — | |||||||||
Operating income | 102,839 | 43,345 | 146,184 | 109,881 | ||||||||||
Interest and other expenses, net | 12,740 | (250 | ) | 12,490 | 12,065 | |||||||||
Income before income taxes and equity in earnings of equity-method investees | 90,099 | 43,595 | 133,694 | 97,816 | ||||||||||
Income tax provision | 26,997 | 16,830 | 43,827 | 31,848 | ||||||||||
(Income) of equity-method investees, net of tax | (328 | ) | — | (328 | ) | (2,045 | ) | |||||||
Income from continuing operations | $ | 63,430 | $ | 26,765 | $ | 90,195 | $ | 68,013 | ||||||
Income per share from continuing operations - basic | $ | 0.63 | $ | 0.27 | $ | 0.89 | $ | 0.71 | ||||||
Income per share from continuing operations - diluted | $ | 0.62 | $ | 0.26 | $ | 0.88 | $ | 0.69 | ||||||
Weighted average common shares outstanding*: | ||||||||||||||
Basic | 100,975 | 100,975 | 95,726 | |||||||||||
Diluted | 102,941 | 102,941 | 98,120 | |||||||||||
*Share and per share amounts for the six months ended December 31, 2013 have been retroactively adjusted to reflect a
two-for-one stock split of our common stock in the form of a 100% stock dividend.
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FY 2015 | FY 2014 | |||||||||||||
Impact on Income Before Income Taxes | Impact on Income Tax Provision | Impact on Income Before Income Taxes | Impact on Income Tax Provision | |||||||||||
(Unaudited) | ||||||||||||||
Nut butter recall | $ | 15,773 | $ | 5,994 | $ | — | $ | — | ||||||
European non-dairy beverage withdrawal | 928 | 316 | — | — | ||||||||||
Net sales | 16,701 | 6,310 | — | — | ||||||||||
Nut butter recall | 9,428 | 3,583 | — | — | ||||||||||
European non-dairy beverage withdrawal | 1,259 | 428 | — | — | ||||||||||
Fakenham inventory allowance for fire | 900 | 187 | — | — | ||||||||||
UK factory start-up costs | 6,021 | 1,249 | 2,143 | 584 | ||||||||||
Acquisition related and other integration costs | 1,523 | 390 | 361 | 82 | ||||||||||
Co-pack contract termination costs | — | — | 437 | 166 | ||||||||||
Cost of sales | 19,131 | 5,837 | 2,941 | 832 | ||||||||||
Nut butter recall | 4,909 | 1,864 | — | — | ||||||||||
Litigation expenses | 373 | 142 | 455 | 173 | ||||||||||
Acquisition related integration costs | 256 | 77 | — | — | ||||||||||
Expenses related to third party sale of common stock | — | — | 224 | 85 | ||||||||||
Selling, general and administrative expenses | 5,538 | 2,083 | 679 | 258 | ||||||||||
Acquisition related fees and expenses, integration and restructuring charges | 1,694 | 637 | 3,957 | 1,314 | ||||||||||
Contingent consideration (income) expense, net | 281 | — | (1,781 | ) | (1,117 | ) | ||||||||
Acquisition related (income) expenses including integration and restructuring charges | 1,975 | 637 | 2,176 | 197 | ||||||||||
Unrealized currency impacts | 5,816 | 1,933 | (2,417 | ) | (1,047 | ) | ||||||||
Gain on disposal of investment held for sale | (311 | ) | — | (234 | ) | (89 | ) | |||||||
Gain on pre-existing investment in HPPC | (5,334 | ) | — | — | — | |||||||||
Interest accretion and other items, net | 79 | 30 | 479 | 164 | ||||||||||
Interest and other expenses, net | 250 | 1,963 | (2,172 | ) | (972 | ) | ||||||||
Nondeductible acquisition related transaction expenses | — | — | — | (193 | ) | |||||||||
Discrete tax benefit resulting from enacted tax rate change | — | — | — | 3,777 | ||||||||||
Increase in unrecognized tax benefits | — | — | — | (550 | ) | |||||||||
Income tax provision | — | — | — | 3,034 | ||||||||||
Total adjustments | $ | 43,595 | $ | 16,830 | $ | 3,624 | $ | 3,349 | ||||||
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