HAIN 8K - 05.06.15 (Q3 Press Release)


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 6, 2015
————————————
 
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.)
 
1111 Marcus Avenue, Lake Success, NY 11042
(Address of principal executive offices)
 
Registrant’s telephone number, including area code: (516) 587-5000
 
————————————
 
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 May 6, 2015, The Hain Celestial Group, Inc. (the “Company”) issued a press release announcing financial results for its third quarter ended March 31, 2015. 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 exhibit is furnished herewith:

Exhibit No.
 
Description
99.1
 
Press Release of The Hain Celestial Group, Inc. dated May 6, 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: May 6, 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 May 6, 2015

* Furnished herewith


Exhibit 99.1 Press Release - HAIN 8K - 05.06.15

Exhibit 99.1



Stephen Smith/Mary Anthes
The Hain Celestial Group, Inc.
516-587-5000




HAIN CELESTIAL ANNOUNCES RECORD THIRD QUARTER
FISCAL YEAR 2015 NET SALES AND ADJUSTED EARNINGS PER SHARE

Net Sales Increase by 19%
Earnings Per Diluted Share $0.32
Adjusted Earnings Per Diluted Share $0.45

Updates Annual Guidance Including Recent Acquisitions


Lake Success, NY, May 6, 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 results for its third quarter ended March 31, 2015.

Third Quarter Performance Highlights
Record third quarter net sales of $662.7 million, a 19% increase over the prior year period. Foreign exchange rate changes on a year-over-year basis impacted sales by $26 million. Excluding the effect of these exchange rate changes, sales would have been $688.7 million, or a 24% increase over the prior year period.
Earnings per diluted share of $0.32; adjusted earnings per diluted share of $0.45. Unfavorable foreign currencies impacted reported results by $0.04 per diluted share and by $0.01 per adjusted diluted share.
Operating income of $60.2 million; adjusted operating income of $77.5 million.

“I am pleased with our third quarter results. We had record third quarter net sales, as the strength of our core brands and contributions from acquisitions helped us to overcome foreign currency impacts to deliver our 18th consecutive year-over-year double digit net sales growth,” said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. “Our team managed our expenses and focused on productivity improvements to deliver profitable worldwide expansion in the quarter, while we also experienced greater contribution from our Hain Pure Protein Corporation business as consumers today increasingly seek fresh, antibiotic-free and organic proteins to complement their healthy lifestyles.”




The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com


Third Quarter Fiscal Year 2015
Hain Celestial US reported record third quarter net sales of $343.7 million, an increase of 8%, over the prior year third quarter. In the United Kingdom, net sales were $178.1 million, and the Rest of the World segment reported net sales of $57.8 million, which includes the recently acquired Belvedere International with its Live Clean® brand. The Hain Pure Protein segment (HPPC), which includes the recently acquired Empire® brand of kosher foods, reported net sales of $83.2 million. The Company had strong brand contribution led by double digit growth in constant currency from Sensible Portions®, Tilda®, Ella’s Kitchen®, The Greek Gods®, Terra®, Hain Pure Foods®, DeBoles®, Natumi®, Jason® and Avalon Organics®. Net sales of Rudi’s Organic Bakery®, Plainville Farms®, FreeBird®, Empire®, Kosher Valley® and Live Clean® brands acquired after the third quarter of fiscal year 2014 also contributed to the growth.

The Company earned net income of $33.4 million and adjusted net income of $46.5 million for the third quarter. Earnings per diluted share for the third quarter were $0.32 and on an adjusted basis were $0.45. Included in reported results for the third quarter is a non-cash partial impairment charge of $5.5 million ($4.4 million after-tax or $0.04 per diluted share) for an intangible asset related to the United Kingdom segment. Refer to Non-GAAP Financial Measures in this press release for adjustments.

Fiscal Year 2015 Guidance
The Company updated its annual net sales guidance for the acquisitions of Belvedere International with its Live Clean® personal care brand and Empire® brands during the third quarter and updated its earnings guidance.

Total net sales range of $2.692 billion to $2.700 billion; an increase of approximately 25% as compared to fiscal year 2014.
Earnings range of $1.86 to $1.90 per diluted share; an increase of 17% to 20% as compared to fiscal year 2014.

Guidance is provided for continuing operations on a non-GAAP basis and excludes acquisition-related expenses, integration and restructuring charges, 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.



2


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 third quarter and nine month results by reportable segment:
(dollars in thousands)
 
United States
 
United Kingdom
 
Hain Pure Protein
 
Rest of World
 
Corporate / Other
 
Total
NET SALES
 
 
 
 
 
 
 
 
 
 
 
 
Net sales - Three months ended 3/31/15
 
$
343,728

 
$
178,068

 
$
83,192

 
$
57,751

 
$

 
$
662,739

Net sales - Three months ended 3/31/14
 
$
319,471

 
$
176,939

 
$

 
$
61,010

 
$

 
$
557,420

 
 
 
 
 
 
 
 
 
 
 
 
 
% change - FY'15 net sales vs. FY'14 net sales
 
7.6
%
 
0.6
%
 


 
(5.3
)%
 
 
 
18.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING INCOME
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended 3/31/15
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
$
55,851

 
$
11,760

 
$
4,970

 
$
4,412

 
$
(16,799
)
 
$
60,194

Non-GAAP Adjustments [1]
 
$
3,188

 
$
3,838

 
$

 
$

 
$
10,326

 
$
17,352

Adjusted operating income
 
$
59,039

 
$
15,598

 
$
4,970

 
$
4,412

 
$
(6,473
)
 
$
77,546

Adjusted operating income margin
 
17.2
%
 
8.8
%
 
6.0
%
 
7.6
 %
 
 
 
11.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended 3/31/14
 


 


 


 


 


 


Operating income
 
$
56,702

 
$
18,366

 
$

 
$
5,100

 
$
(16,539
)
 
$
63,629

Non-GAAP Adjustments [1]
 
$

 
$
913

 
$

 
$
65

 
$
7,649

 
$
8,627

Adjusted operating income
 
$
56,702

 
$
19,279

 
$

 
$
5,165

 
$
(8,890
)
 
$
72,256

Adjusted operating income margin
 
17.7
%
 
10.9
%
 


 
8.5
 %
 


 
13.0
%

(1) See accompanying tables of "Reconciliation of GAAP Results to Non-GAAP Measures"

3



(dollars in thousands)
 
United States
 
United Kingdom
 
Hain Pure Protein
 
Rest of World
 
Corporate / Other
 
Total
NET SALES
 
 
 
 
 
 
 
 
 
 
 
 
Net sales - Nine months ended 3/31/15
 
$
1,034,612

 
$
551,144

 
$
240,078

 
$
164,545

 
$

 
$
1,990,379

Non-GAAP Adjustments [1]
 
$
15,773

 
$

 
$

 
$
928

 
$

 
$
16,701

Adjusted net sales - Nine months ended 3/31/15
 
$
1,050,385

 
$
551,144

 
$
240,078

 
$
165,473

 
$

 
$
2,007,080

 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales - Nine months ended 3/31/14 [2]
 
$
959,191

 
$
436,985

 
$

 
$
173,607

 
$

 
$
1,569,783

 
 
 
 
 
 
 
 
 
 
 
 
 
% change - FY'15 adjusted net sales vs. FY'14 net sales
 
9.5
%
 
26.1
%
 
 
 
(4.7
)%
 
 
 
27.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING INCOME
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended 3/31/15
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
$
141,031

 
$
29,618

 
$
16,505

 
$
10,660

 
$
(34,781
)
 
$
163,033

Non-GAAP Adjustments [1]
 
$
33,546

 
$
12,002

 
$
140

 
$
2,187

 
$
12,822

 
$
60,697

Adjusted operating income
 
$
174,577

 
$
41,620

 
$
16,645

 
$
12,847

 
$
(21,959
)
 
$
223,730

Adjusted operating income margin
 
16.6
%
 
7.6
%
 
6.9
%
 
7.8
 %
 
 
 
11.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended 3/31/14
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
$
159,578

 
$
32,278

 
$

 
$
11,544

 
$
(35,686
)
 
$
167,714

Non-GAAP Adjustments [1]
 
$
482

 
$
2,209

 
$

 
$
866

 
$
10,866

 
$
14,423

Adjusted operating income
 
$
160,060

 
$
34,487

 
$

 
$
12,410

 
$
(24,820
)
 
$
182,137

Adjusted operating income margin
 
16.7
%
 
7.9
%
 
 
 
7.1
 %
 
 
 
11.6
%

(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 nine months ended 3/31/14




4


Webcast
Hain Celestial will host a conference call and webcast at 8:30 AM Eastern Time today to review its third 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 several conferences in May, all times indicated are eastern daylight saving time: J.P. Morgan Global Consumer and Retail Conference on Tuesday, May 19, 2015 at 7:45 AM in London; BMO Capital Markets Farm to Market Conference on Thursday, May 21, 2015 at 11:00 AM and Citi 2015 Global Consumer Conference on Wednesday, May 27th at 11:20 AM, both in New York City. A live audio webcast and a replay of the events 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®, Empire®, Kosher Valley®, 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 Cooper’s®, Linda McCartney®, Lima®, Danival®, Natumi®, GG UniqueFiber®, Tilda®, JASON®, Avalon Organics®, Alba Botanica®, Live Clean® 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 the Company’s guidance for net sales and earnings per diluted share for fiscal year 2015. 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

5


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 operating income, adjusted income from continuing operations, adjusted income per diluted share from continuing operations, adjusted EBITDA (defined below) and operating free cash flow. The reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are presented in the tables “Reconciliation of GAAP Results to Non-GAAP Measures” for the three months and nine months ended March 31, 2015 and 2014 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.

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 nine months ended March 31, 2015 and 2014, adjusted EBITDA was calculated as follows:
 
 
3 Months Ended
 
9 Months Ended
 
3/31/2015
3/31/2014
 
3/31/2015
3/31/2014
 
(dollars in thousands)
 
(dollars in thousands)
Net Income
$
33,394

$
35,241

 
$
96,824

$
104,127

Income taxes
18,147

19,748

 
45,144

48,247

Interest expense, net
5,670

5,699

 
17,644

16,193

Depreciation and amortization
14,163

12,789

 
43,064

34,597

Impairment of long lived assets
6,514


 
6,514


Equity in earnings of affiliates
13

(83
)
 
(315
)
(2,128
)
Stock based compensation
2,935

3,020

 
8,934

9,657

Subtotal
$
80,836

$
76,414

 
$
217,809

$
210,693

Adjustments (a)
7,916

11,405

 
45,927

16,052

Adjusted EBITDA
$
88,752

$
87,819

 
$
263,736

$
226,745


(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. It also includes loss from discontinued operations, net of tax.



6


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 nine-months ended March 31, 2015 and 2014, operating free cash flow was calculated as follows:

 
9 Months Ended
 
3/31/2015
 
3/31/2014
 
(dollars in thousands)
Cash flow provided by operating activities
$
70,169

 
$
122,281

Purchases of property, plant and equipment
(36,312
)
 
(30,724
)
Operating free cash flow
$
33,857

 
$
91,557


Operating free cash flow for the nine-months ended March 31, 2015 was $33.9 million, compared to $91.6 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.




7


THE HAIN CELESTIAL GROUP, INC.
Consolidated Balance Sheets
(In thousands)
 
 
 
 
 
March 31,
 
June 30,
 
2015
 
2014
 
(Unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
100,325

 
$
123,751

Accounts receivable, net
337,516

 
287,915

Inventories
369,968

 
320,251

Deferred income taxes
26,581

 
23,780

Other current assets
46,514

 
47,906

Total current assets
880,904

 
803,603

 
 
 
 
Property, plant and equipment, net
325,966

 
310,661

Goodwill, net
1,107,328

 
1,134,368

Trademarks and other intangible assets, net
631,866

 
651,482

Investments and joint ventures
3,449

 
36,511

Other assets
31,686

 
28,692

Total assets
$
2,981,199

 
$
2,965,317

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
226,497

 
$
239,162

Accrued expenses and other current liabilities
82,319

 
84,906

Current portion of long-term debt
33,870

 
100,096

Total current liabilities
342,686

 
424,164

 
 
 
 
Long-term debt, less current portion
845,103

 
767,827

Deferred income taxes
159,743

 
148,439

Other noncurrent liabilities
5,834

 
5,020

Total liabilities
1,353,366

 
1,345,450

 
 
 
 
Stockholders' equity:
 
 
 
Common stock*
1,058

 
1,031

Additional paid-in capital*
1,064,341

 
969,182

Retained earnings
726,442

 
629,618

Accumulated other comprehensive income (loss)
(105,937
)
 
60,128

Subtotal
1,685,904

 
1,659,959

Treasury stock
(58,071
)
 
(40,092
)
Total stockholders' equity
1,627,833

 
1,619,867

 
 
 
 
Total liabilities and stockholders' equity
$
2,981,199

 
$
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.

8


THE HAIN CELESTIAL GROUP, INC.
 Consolidated Statements of Income
 (in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
 
2015
 
2014
 
2015
 
2014
 
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
 
 
 
 
Net sales
 
$
662,739

 
$
557,420

 
$
1,990,379

 
$
1,569,783

Cost of sales
 
504,990

 
404,627

 
1,539,459

 
1,154,790

Gross profit
 
157,749

 
152,793

 
450,920

 
414,993

 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
83,068

 
78,268

 
262,613

 
227,092

Amortization/impairment of acquired intangibles
 
10,189

 
4,133

 
19,001

 
11,248

Acquisition related expenses including integration and restructuring charges, net
 
4,298

 
6,763

 
6,273

 
8,939

 
 
 
 
 
 
 
 
 
Operating income
 
60,194

 
63,629

 
163,033

 
167,714

 
 
 
 
 
 
 
 
 
Interest expense and other expenses, net
 
8,640

 
5,946

 
21,380

 
15,839

Income before income taxes and equity in earnings of equity-method investees
 
51,554

 
57,683

 
141,653

 
151,875

Income tax provision
 
18,147

 
19,748

 
45,144

 
48,247

Loss (income) of equity-method investees, net of tax
 
13

 
(83
)
 
(315
)
 
(2,128
)
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
33,394

 
38,018

 
96,824

 
105,756

Loss from discontinued operations, net of tax
 

 
(2,777
)
 

 
(1,629
)
Net income
 
$
33,394

 
$
35,241

 
$
96,824

 
$
104,127

 
 
 
 
 
 
 
 
 
Basic net income per share*:
 
 
 
 
 
 
 
 
     From continuing operations
 
$
0.33

 
$
0.38

 
$
0.95

 
$
1.09

     From discontinued operations
 

 
(0.03
)
 

 
(0.02
)
Net income per share - basic
 
$
0.33

 
$
0.35

 
$
0.95

 
$
1.07

 
 
 
 
 
 
 
 
 
Diluted net income per share*:
 
 
 
 
 
 
 
 
     From continuing operations
 
$
0.32

 
$
0.37

 
$
0.94

 
$
1.07

     From discontinued operations
 

 
(0.03
)
 

 
(0.02
)
Net income per share - diluted
 
$
0.32

 
$
0.34

 
$
0.94

 
$
1.05

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
102,252

 
99,390

 
101,401

 
96,946

Diluted
 
103,796

 
101,502

 
103,226

 
99,246


*Share and per share amounts for the three and nine months ended March 31, 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.

9


THE HAIN CELESTIAL GROUP, INC.
 Reconciliation of GAAP Results to Non-GAAP Measures
 (in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2015 GAAP
Adjustments
 
2015 Adjusted
2014 Adjusted
 
 
(Unaudited)
 
 
 
 
 
 
 
Net Sales
 
$
662,739

$

 
$
662,739

$
557,420

Cost of sales
 
504,990

(5,928
)
 
499,062

403,531

Gross profit
 
157,749

5,928

 
163,677

153,889

Selling, general and administrative expenses
 
83,068

(1,616
)
 
81,452

77,500

Amortization/impairment of acquired intangibles
 
10,189

(5,510
)
 
4,679

4,133

Acquisition related expenses including integration and restructuring charges, net
 
4,298

(4,298
)
 


Operating income
 
60,194

17,352

 
77,546

72,256

Interest and other expenses, net
 
8,640

(2,216
)
 
6,424

6,859

Income before income taxes and equity in earnings of equity-method investees
 
51,554

19,568

 
71,122

65,397

Income tax provision
 
18,147

6,427

 
24,574

21,116

Loss (income) of equity-method investees, net of tax
 
13


 
13

(241
)
Income from continuing operations
 
$
33,394

$
13,141

 
$
46,535

$
44,522

 
 
 
 
 
 
 
Income per share from continuing operations - basic*
 
$
0.33

$
0.13

 
$
0.46

$
0.45

 
 
 
 
 
 
 
Income per share from continuing operations - diluted*
 
$
0.32

$
0.13

 
$
0.45

$
0.44

 
 
 
 
 
 
 
Weighted average common shares outstanding*:
 
 
 
 
 
 
Basic
 
102,252

 
 
102,252

99,390

Diluted
 
103,796

 
 
103,796

101,502


*Share and per share amounts for the three months ended March 31, 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.


10


 
 
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)
Ashland factory and related expenses
 
$
2,142

$
814

 
$

$

UK Factory start-up costs
 
2,512

521

 
977

230

Other integration costs
 
1,274

427

 
119

27

Cost of sales
 
5,928

1,762

 
1,096

257

 
 
 
 
 
 
 
Tilda insurance consultancy and other start-up/integration costs
 
1,098

275

 


Litigation expenses
 
518

197

 
768

292

Selling, general and administrative expenses
 
1,616

472

 
768

292

 
 
 
 
 
 
 
Tradename impairment charge
 
5,510

1,102

 


Amortization/impairment of acquired intangibles
 
5,510

1,102

 


 
 
 
 
 
 
 
Acquisition related fees and expenses, integration and restructuring charges
 
4,298

1,463

 
6,918

2,481

Contingent consideration (income) expense, net
 


 
(155
)

Acquisition related expenses including integration and restructuring charges, net
 
4,298

1,463

 
6,763

2,481

 
 
 
 
 
 
 
Unrealized currency impacts
 
5,141

1,628

 
(524
)
(213
)
Gain on pre-existing investment in Empire Kosher
 
(2,922
)

 


Gain on disposal of investment held for sale
 
(3
)

 
(467
)
(177
)
Interest accretion and other items, net
 


 
78

20

Interest and other expenses, net
 
2,216

1,628

 
(913
)
(370
)
 
 
 
 
 
 
 
Hain Pure Protein Corporation mortality losses
 


 
158


Loss (income) of equity-method investees,
net of tax
 


 
158


 
 
 
 
 
 
 
Nondeductible acquisition related transaction expenses
 


 

(1,292
)
Income tax provision
 


 

(1,292
)
 
 
 
 
 
 
 
Total adjustments
 
$
19,568

$
6,427

 
$
7,872

$
1,368







11


THE HAIN CELESTIAL GROUP, INC.
 Reconciliation of GAAP Results to Non-GAAP Measures
 (in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Nine Months Ended March 31,
 
 
2015 GAAP
Adjustments
 
2015 Adjusted
2014 Adjusted
 
 
(Unaudited)
 
 
 
 
 
 
 
Net Sales
 
$
1,990,379

$
16,701

 
$
2,007,080

$
1,569,783

Cost of sales
 
1,539,459

(25,059
)
 
1,514,400

1,150,753

Gross profit
 
450,920

41,760

 
492,680

419,030

Selling, general and administrative expenses
 
262,613

(7,154
)
 
255,459

225,645

Amortization/impairment of acquired intangibles
 
19,001

(5,510
)
 
13,491

11,248

Acquisition related expenses including integration and restructuring charges, net
 
6,273

(6,273
)
 


Operating income
 
163,033

60,697

 
223,730

182,137

Interest and other expenses, net
 
21,380

(2,466
)
 
18,914

18,924

Income before income taxes and equity in earnings of equity-method investees
 
141,653

63,163

 
204,816

163,213

Income tax provision
 
45,144

23,257

 
68,401

52,964

Loss (income) of equity-method investees, net of tax
 
(315
)

 
(315
)
(2,286
)
Income from continuing operations
 
$
96,824

$
39,906

 
$
136,730

$
112,535

 
 
 
 
 
 
 
Income per share from continuing operations - basic*
 
$
0.95

$
0.40

 
$
1.35

$
1.16

 
 
 
 
 
 
 
Income per share from continuing operations - diluted*
 
$
0.94

$
0.38

 
$
1.32

$
1.13

 
 
 
 
 
 
 
Weighted average common shares outstanding*:
 
 
 
 
 
 
Basic
 
101,401

 
 
101,401

96,946

Diluted
 
103,226

 
 
103,226

99,246


*Share and per share amounts for the nine months ended March 31, 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.



12


 
 
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 allowance for fire
 
900

187

 


Ashland factory and related expenses
 
2,142

814

 


UK Factory start-up costs
 
8,533

1,770

 
3,120

814

Acquisition related and other integration costs
 
2,797

817

 
480

109

Co-pack contract termination costs
 


 
437

166

Cost of sales
 
25,059

7,599

 
4,037

1,089

 
 
 
 
 
 
 
Nut butter recall
 
4,909

1,864

 


Tilda insurance consultancy and other start-up/integration costs
 
1,354

352

 


Litigation expenses
 
891

339

 
1,223

465

Expenses related to third party sale of common stock
 


 
224

85

Selling, general and administrative expenses
 
7,154

2,555

 
1,447

550

 
 
 
 
 
 
 
Tradename impairment charge
 
5,510

1,102

 


Amortization/impairment of acquired intangibles
 
5,510

1,102

 


 
 
 
 
 
 
 
Acquisition related fees and expenses, integration and restructuring charges
 
5,992

2,100

 
10,875

3,795

Contingent consideration (income) expense, net
 
281


 
(1,936
)
(1,117
)
Acquisition related expenses including integration and restructuring charges, net
 
6,273

2,100

 
8,939

2,678

 
 
 
 
 
 
 
Unrealized currency impacts
 
10,957

3,561

 
(2,941
)
(1,260
)
Gain on pre-existing investments in HPPC and Empire Kosher
 
(8,256
)

 


Gain on disposal of investment held for sale
 
(314
)

 
(701
)
(266
)
Interest accretion and other items, net
 
79

30

 
557

184

Interest and other expenses, net
 
2,466

3,591

 
(3,085
)
(1,342
)
 
 
 
 
 
 
 
Hain Pure Protein Corporation mortality losses
 


 
158


Loss (income) of equity-method investees,
net of tax
 


 
158


 
 
 
 
 
 
 
Discrete tax benefit resulting from enacted tax rate change
 


 

3,777

Increase in unrecognized tax benefits
 


 

(550
)
Nondeductible acquisition related transaction expenses
 


 

(1,485
)
Income tax provision
 


 

1,742

 
 
 
 
 
 
 
Total adjustments
 
$
63,163

$
23,257

 
$
11,496

$
4,717




13