Document


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): August 29, 2017
————————————
https://cdn.kscope.io/d65474564e1398005f8e6050c73b523b-haincelestialnewlogoa01a22.jpg
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
Former name or former address, if changed since last report: N/A
————————————
 
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))












Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
    
Emerging growth company
¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨






Item 2.02    Results of Operations and Financial Condition

On August 29, 2017, The Hain Celestial Group, Inc. (the “Company”) issued a press release announcing financial results for its fourth quarter and fiscal year ended June 30, 2017.

The information contained in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 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. The press release is attached hereto as Exhibit 99.1 and is incorporated into this Item 2.02 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 August 29, 2017








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: August 29, 2017
 
THE HAIN CELESTIAL GROUP, INC.
(Registrant)
 
By: 
/s/ James Langrock
Name:
James Langrock
Title:
Executive Vice President and
Chief Financial Officer









EXHIBIT INDEX


Exhibit No.
 
Description
99.1
  
Press Release of The Hain Celestial Group, Inc. dated August 29, 2017







Exhibit

Exhibit 99.1

https://cdn.kscope.io/d65474564e1398005f8e6050c73b523b-haincelestialnewlogoa01a22.jpg

Hain Celestial Announces Fourth Quarter and Fiscal Year 2017 Financial Results

Hain Celestial United States Reports Sales Growth for Fourth Quarter Fiscal Year 2017

Generates Annual Strong Operating Cash Flow of $217 Million

Provides Fiscal Year 2018 Financial Guidance

Lake Success, NY, August 29, 2017 The Hain Celestial Group, Inc. (NASDAQ: HAIN) (“Hain Celestial” or the “Company”), a leading organic and natural products company with operations in North America, Europe, Asia and the Middle East providing consumers with A Healthier Way of Life™, today reported results for the fourth quarter and fiscal year ended June 30, 2017.
"We are pleased to have achieved sales growth in all of our business segments on a constant currency basis in the fourth quarter, despite an ever changing operating environment for food manufacturers and retailers," said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. "Building upon our core platforms and cost savings initiatives, our global team has made significant progress during the year executing on our strategic plan. The business momentum and operational improvements we experienced in the fourth quarter of fiscal 2017 reinforces our confidence in the tremendous opportunities ahead to generate the growth we know we are capable of achieving over the next several years."
Financial Highlights1
Fourth Quarter Fiscal Year 2017
For fourth quarter fiscal year 2017, the Company reported:

Net sales of $725.1 million, a 2% decrease, or a 2% increase on a constant currency basis, compared to the prior year period. Net sales were impacted by $28.2 million from foreign exchange rate movements versus the prior year period.
Operating income of $8.6 million; adjusted operating income of $67.2 million.
EBITDA of $82 million compared to $83 million in the prior year period; adjusted EBITDA of $86 million compared to $91 million in the prior year.
Earnings per diluted share was breakeven compared to a loss per diluted share of $0.86 in the prior year period; adjusted earnings per diluted share of $0.43 was in-line with the prior year period, and foreign currency exchange rates impacted reported results by $0.03 per diluted share.
Strong operating cash flow of $69 million.

Fiscal Year 2017
For fiscal year 2017, the Company reported:

Net sales of $2.853 billion, a 1% decrease, or a 3% increase on a constant currency basis, compared to fiscal 2016 net sales of $2.885 billion. Net sales were impacted by $124.3 million in foreign exchange rate movements compared to the prior year.


____________________________

1This press release includes certain non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. Reconciliations of non-GAAP financial measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided herein.

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


Operating income of $111 million; adjusted operating income of $202 million.
EBITDA of $239 million compared to $362 million in the prior year; adjusted EBITDA of $275 million compared to $379 million in the prior year.
Earnings per diluted share of $0.65 compared to $0.46 in the prior year; adjusted earnings per diluted share of $1.22 compared to $1.85 in the prior year, and foreign currency exchange rates impacted reported results by $0.12 per diluted share.
Strong operating cash flow of $217 million.

Segment Highlights
Fourth Quarter 2017
Hain Celestial United States reported net sales of $309.0 million, an increase of 1% on a year-over-year basis including a $4.5 million impact from product rationalization and $2.9 million in foreign exchange movements driven by the Ella's Kitchen® brand. Hain Celestial United Kingdom reported net sales of $194.8 million, a 10% decrease, compared to the prior year period, or a 3% increase adjusted for constant currency, acquisitions and divestitures. Hain Pure Protein reported net sales of $122.2 million, an 8% increase compared to the prior year period. Within the Rest of World segment, Hain Celestial Canada reported net sales of $40.2 million, a 2% increase, or a 7% increase on a constant currency basis, compared to the prior year period; Hain Celestial Europe reported net sales of $44.8 million, a 2% increase, or a 5% increase on a constant currency basis, compared to the prior year period. The Company had strong brand sales in constant currency during the fourth quarter led by Earth's Best®, Terra®, Celestial Seasonings®, Imagine® and FreeBird® in the United States; Tilda, Ella's Kitchen®, Hartley's®, Linda McCartney's® and New Convent Garden Soup Co.® in the United Kingdom; Yves Veggie Cuisine®, Europe's Best® and Live Clean® in Canada and Lima® in Europe.

Fiscal Year 2017
Hain Celestial United States reported net sales of $1.2 billion, a decrease of 5% on a year-over-year basis including a $60.0 million impact from inventory realignment of certain customers and product rationalization and $14.0 million in foreign exchange movements driven by the Ella's Kitchen® brand, which will be reported in the United Kingdom segment commencing in fiscal year 2018. Hain Celestial United Kingdom reported net sales of $768.3 million, a 1% decrease, compared to the prior year, or a 6% increase adjusted for constant currency and acquisitions and divestitures. Hain Pure Protein reported net sales of $509.6 million, a 3.5% increase compared to the prior year. Within the Rest of World segment, Hain Celestial Canada net sales of $151.5 million, a 7% increase on an actual and constant currency basis, compared to the prior year; Hain Celestial Europe reported net sales of $172.6 million, a 12% increase, or a 14% increase on a constant currency basis, compared to the prior year. The Company had strong brand sales in constant currency during the fiscal year led by Terra®, Celestial Seasonings®, Imagine®, Alba Botanica®, Jason® and FreeBird® in the United States; Tilda®, Ella's Kitchen®, Hartley's®, Linda McCartney's®, New Convent Garden Soup Co.® and Sun-Pat® in the United Kingdom; Yves Veggie Cuisine®, Europe's Best® and Live Clean® in Canada and Lima® in Europe.
  
Fiscal Year 2017 Achievements
The Company highlighted several of its achievements during fiscal year 2017, including executing on its strategic plan initiated in fiscal year 2016 to drive net sales and margin expansion, as follows:

Invested in Top Brands and Capabilities Globally
Increased strategic investments and consumer engagement in brand building assets.
Enhanced in-market and online retail activation.
Introduced over 200 new products worldwide.

Strategic Transactions
Expanded branded portfolio through two strategic acquisitions in the growing chilled category:
Yorkshire Provender™ under Hain Daniels and
Better BeanTM under Cultivate Ventures.
Entered into strategic joint venture with Future Group in India.
Licensed Rosetto® brand to Rosetto Foods LLC, a joint venture in which the Company holds a minority interest.




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Project Terra
Established new core category platforms:
Better-For-You Baby, Better-For-You Pantry, Better-For-You Snacking, Fresh Living, Tea, Pure Personal Care and Cultivate Ventures.
Implemented stock-keeping unit ("SKU") rationalization, eliminating $24 million in net sales, or 20% of the SKUs in the United States.
Expanded global cost savings initiative $350 million through fiscal year 2020 including annual productivity

Enhanced Leadership Team to Deliver Strategic Plan
Strengthened management team with seasoned professionals including deep consumer products, brand building and natural product experience as well as financial industry expertise.
Irwin Simon concluded, "We are well-positioned among some of the fastest growing trends, categories and channels in consumer products today and are fortunate to have the financial flexibility to support our future business growth and capital allocation priorities. We believe our continued ability to evolve our business as we grow our organic, natural and better-for-you brands, expand relationships with new and existing customers and attract new consumers globally, paired with Project Terra, will fuel our success and create long-term value for our shareholders."

Fiscal Year 2018 Guidance
The Company provided its annual guidance for fiscal year 2018:
Total net sales of $2.967 billion to $3.036 billion, an increase of approximately 4% to 6% as compared to fiscal year 2017.
Adjusted EBITDA of $350 million to $375 million, an increase of approximately 27% to 36% as compared to fiscal year 2017.
Adjusted earnings per diluted share of $1.63 to $1.80, an increase of approximately 34% to 48% as compared to fiscal year 2017.
Guidance, where adjusted, is provided on a non-GAAP basis, which excludes acquisition-related expenses, integration and restructuring charges, start-up costs, unrealized net foreign currency gains or losses, reserves for litigation matters and other non-recurring items that have been or may be incurred during the Company's fiscal year 2018, which the Company will continue to identify as it reports its future financial results. Guidance excludes the impact of any future acquisitions.
The Company has not reconciled its expected adjusted EBITDA to net income or adjusted earnings per diluted share to earnings per share under "Fiscal Year 2018 Guidance" because certain items that impact net income and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time.

Segment Results
Effective July 1, 2016, due to changes to the Company's internal management and reporting structure resulting from the formation of Cultivate Ventures, certain brands previously included within the United States operating segment were moved to a new operating segment called Cultivate. As a result, the Company is now managed in eight operating segments: the United States (excluding Cultivate), United Kingdom, Tilda, Hain Pure Protein Corporation, Empire, Canada, Europe and Cultivate. The United States (excluding Cultivate) is its own reportable segment. Cultivate is now aggregated with Canada and Europe and reported within the "Rest of World". There were no changes to the United Kingdom (which includes Tilda) and Hain Pure Protein (which includes HPPC and Empire) reportable segments. The prior period segment information contained below has been adjusted to reflect the Company's new operating and reporting structure.


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(unaudited and dollars in thousands)
 
United States
 
United Kingdom
 
Hain Pure Protein
 
Rest of World
 
Corporate / Other
 
Total
NET SALES
 
 
 
 
 
 
 
 
 
 
 
 
Net sales - Three months ended 6/30/17
 
$
308,988

 
$
194,760

 
$
122,193

 
$
99,144

 
$

 
$
725,085

Net sales - Three months ended 6/30/16
 
$
306,423

 
$
216,608

 
$
113,050

 
$
101,466

 
$

 
$
737,547

% change - FY'17 net sales vs. FY'16 net sales
 
0.8
%
 
(10.1
)%
 
8.1
%
 
(2.3
)%
 
 

(1.7
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING INCOME
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended 6/30/17
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
$
46,053

 
$
16,957

 
$
1,413

 
$
10,117

 
$
(65,953
)
 
$
8,587

Non-GAAP Adjustments [1]
 

 
942

 

 

 
57,661

 
58,603

Adjusted operating income
 
$
46,053

 
$
17,899

 
$
1,413

 
$
10,117

 
$
(8,292
)
 
$
67,190

Adjusted operating income margin
 
14.9
%
 
9.2
 %
 
1.2
%
 
10.2
 %
 
 
 
9.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended 6/30/16
 


 


 


 


 


 


Operating income
 
$
54,653

 
$
11,907

 
$
480

 
$
10,252

 
$
(142,430
)
 
$
(65,138
)
Non-GAAP Adjustments [1]
 
2,967

 
1,062

 
795

 
850

 
131,102

 
136,776

Adjusted operating income
 
$
57,620

 
$
12,969

 
$
1,275

 
$
11,102

 
$
(11,328
)
 
$
71,638

Adjusted operating income margin
 
18.8
%
 
6.0
 %
 
1.1
%
 
10.9
 %
 


 
9.7
 %

(unaudited and dollars in thousands)
 
United States
 
United Kingdom
 
Hain Pure Protein
 
Rest of World
 
Corporate / Other
 
Total
NET SALES
 
 
 
 
 
 
 
 
 
 
 
 
Net sales - Twelve months ended 6/30/17
 
$
1,191,262

 
$
768,301

 
$
509,606

 
$
383,942

 
$

 
$
2,853,111

Net sales - Twelve months ended 6/30/16
 
$
1,249,123

 
$
774,877

 
$
492,510

 
$
368,864

 
$

 
$
2,885,374

% change - FY'17 net sales vs. FY'16 net sales
 
(4.6
)%
 
(0.8
)%
 
3.5
%
 
4.1
%
 
 
 
(1.1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING INCOME
 
 
 
 
 
 
 
 
 
 
 
 
Twelve months ended 6/30/17
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
$
157,506

 
$
39,749

 
$
1,382

 
$
32,010

 
$
(119,842
)
 
$
110,805

Non-GAAP Adjustments [1]
 
6,193

 
4,696

 

 
(110
)
 
80,402

 
91,181

Adjusted operating income
 
$
163,699

 
$
44,445

 
$
1,382

 
$
31,900

 
$
(39,440
)
 
$
201,986

Adjusted operating income margin
 
13.7
 %
 
5.8
 %
 
0.3
%
 
8.3
%
 
 
 
7.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve months ended 6/30/16
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
$
203,481

 
$
56,000

 
$
31,558

 
$
27,898

 
$
(168,577
)
 
$
150,360

Non-GAAP Adjustments [1]
 
5,858

 
2,082

 
4,734

 
1,438

 
141,011

 
155,123

Adjusted operating income
 
$
209,339

 
$
58,082

 
$
36,292

 
$
29,336

 
$
(27,566
)
 
$
305,483

Adjusted operating income margin
 
16.8
 %
 
7.5
 %
 
7.4
%
 
8.0
%
 
 
 
10.6
 %

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

Webcasts and Upcoming Presentation
Hain Celestial will host a conference call and webcast today at 8:30 AM Eastern Time to discuss its results and business outlook. The Company is also scheduled to present at Barclays Global Consumer Staples Conference on September 7, 2017 at 10:30 AM Eastern Time. The events will be webcast and be available under the Investor Relations section of the Company's website at www.hain.com.

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About 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, Asia and the Middle East. 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®, Hain Pure Foods®, Spectrum®, Spectrum Essentials®, Imagine®, Almond Dream®, Rice Dream®, Soy Dream®, WestSoy®, The Greek Gods®, BluePrint®, FreeBird®, Plainville Farms®, Empire®, Kosher Valley®, Yves Veggie Cuisine®, Better Bean™, Europe's Best®, Cully & Sully®, New Covent Garden Soup Co.®, Yorkshire Provender™, Johnson's Juice Co.®, Farmhouse Fare®, Hartley's®, Sun-Pat®, Gale's®, Robertson's®, Frank Cooper's®, Linda McCartney®, Lima®, Danival®, Joya®, 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" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictions based on expectations and projections about future events, and are not statements of historical fact. You can identify forward-looking statements by the use of forward-looking terminology such as "plan", "continue", "expect", "anticipate", "intend", "predict", "project", "estimate", "likely", "believe", "might", "seek", "may", "will", "remain", "potential", "can", "should", "could", "future" and similar expressions, or the negative of those expressions, or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical facts. You can also identify forward-looking statements by discussions of guidance for the fiscal year 2018 strategy, plans or intentions related to our capital resources, performance and results of operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the 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, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). Such factors, include, among others, the Company's beliefs or expectations relating to (i) the Company's guidance for Fiscal Year 2018; (ii) the Company's strategic plan including its ability to generate growth and execution against such plan and (iii) the Company's ability to deliver significant shareholder value creation; and the other risks detailed from time-to-time in the Company's reports filed with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended June 30, 2016, and our quarterly reports. As a result of the foregoing and other factors, no assurance can be given as to the future results, levels of activity and achievements of the Company, and neither the Company nor any person assumes responsibility for the accuracy and completeness of these statements. All forward-looking statements contained herein apply as of the date hereof or as of the date they were made and, except as required by applicable law, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflects changes in underlying assumptions or factors of new methods, future events or other changes.

Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures, including net sales excluding the impact of foreign currency, adjusted operating income, adjusted earnings per diluted share, EBITDA, adjusted EBITDA 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 12 months ended June 30, 2017 and 2016 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 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

5





it is one factor in evaluating the amount of cash available for discretionary investments. For the 12 months ended June 30, 2017 and 2016, operating free cash flow was calculated as follows:
 
Twelve Months Ended
 
6/30/2017
 
6/30/2016
 
(unaudited and dollars in thousands)
Cash flow provided by operating activities
$
216,624

 
$
206,575

Purchases of property, plant and equipment
(63,120
)
 
(77,284
)
Operating free cash flow
$
153,504

 
$
129,291


The Company's operating free cash flow was $153.5 million for the 12 months ended June 30, 2017, an increase of 19% from the 12 months ended June 30, 2016.
The Company believes presenting net sales at constant currency provides useful information to investors because it provides transparency to underlying performance in the Company's consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. Dollar are translated into U.S. Dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.
The Company defines EBITDA as net income or loss (a GAAP measure) before income taxes, net interest expense, depreciation and amortization, equity in net (income) loss of equity method investees, stock based compensation expense, impairment of long lived assets and intangibles, goodwill impairment, and unrealized currency gains and losses. Adjusted EBITDA is defined as EBITDA before acquisition-related expenses, including integration and restructuring charges, and other non-recurring items. The Company's management believes that these presentations provide 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 these measures for reviewing the financial results of the Company as well as a component of performance-based executive compensation.
























6





For the 3 months ended June 30, 2017 and 2016 and the 12 months ended June 30, 2017 and 2016, EBITDA and adjusted EBITDA was calculated as follows:
 
3 Months Ended
 
12 Months Ended
 
6/30/2017
 
6/30/2016
 
6/30/2017
 
6/30/2016
 
(unaudited and dollars in thousands)
Net income (loss)
$
313

 
$
(88,597
)
 
$
67,430

 
$
47,429

Provision for income taxes
2,520

 
11,086

 
21,842

 
70,932

Interest expense, net
4,922

 
4,866

 
18,446

 
22,231

Depreciation and amortization
17,397

 
17,524

 
68,697

 
65,622

Equity in net (income) loss of equity-method
  investees
(84
)
 
(61
)
 
(129
)
 
47

Stock based compensation expense
2,139

 
2,683

 
9,658

 
12,688

Long-lived asset and tradename impairment
40,452

 
43,200

 
40,452

 
43,200

Goodwill impairment

 
84,548

 

 
84,548

Unrealized currency loss
14,056

 
7,739

 
12,570

 
14,831

EBITDA
81,715

 
82,988

 
238,966

 
361,528

 
 
 
 
 
 
 
 
Acquisition, restructuring, integration,
  severance, and other charges
6,095

 
2,156

 
9,694

 
13,904

Chilled desserts contract related termination
  costs
2,583

 

 
2,583

 

HPPC production interruption related to chiller
  breakdown and factory start-up costs

 
594

 

 
4,705

Inventory costs for products discontinued or with
  redesigned packaging

 
3,050

 
5,359

 
3,050

Costs incurred due to co-packer default

 
770

 

 
770

U.K. deferred synergies due to CMA Board
  decision

 
949

 
918

 
949

U.K. factory start-up costs

 

 

 
743

U.S. warehouse consolidation project

 
197

 

 
623

Recall and other related costs

 

 
809

 

Accounting review costs
9,473

 

 
29,562

 

Litigation expenses

 
1,200

 

 
1,200

Celestial Seasonings marketing support and
  Keurig transition

 

 

 
1,000

Tilda fire insurance recovery costs

 
112

 

 
342

Luton closure costs

 

 
1,804

 

Gain on Tilda fire related fixed assets

 
(739
)
 

 
(9,752
)
Realized currency gain on repayment of GBP
  denominated debt
(14,290
)
 

 
(14,290
)
 

Adjusted EBITDA
$
85,576

 
$
91,277

 
$
275,405

 
$
379,062


Contact: James Langrock/Mary Anthes, The Hain Celestial Group, Inc., 516-587-5000





7





THE HAIN CELESTIAL GROUP, INC.
Consolidated Balance Sheets
(unaudited and in thousands)
 
 
 
 
 
June 30,
 
June 30,
 
2017
 
2016
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
146,992

 
$
127,926

Accounts receivable, net
248,436

 
278,933

Inventories
427,308

 
408,564

Prepaid expenses and other current assets
52,045

 
84,811

Total current assets
874,781

 
900,234

 
 
 
 
Property, plant and equipment, net
370,511

 
389,841

Goodwill
1,059,981

 
1,060,336

Trademarks and other intangible assets, net
573,268

 
604,787

Investments and joint ventures
18,998

 
20,244

Other assets
33,565

 
32,638

Total assets
$
2,931,104

 
$
3,008,080

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
222,136

 
$
251,712

Accrued expenses and other current liabilities
108,514

 
78,803

Current portion of long-term debt
9,844

 
26,513

Total current liabilities
340,494

 
357,028

 
 
 
 
Long-term debt, less current portion
740,304

 
836,171

Deferred income taxes
121,475

 
131,507

Other noncurrent liabilities
15,999

 
18,860

Total liabilities
1,218,272

 
1,343,566

 
 
 
 
Stockholders' equity:
 
 
 
Common stock
1,080

 
1,075

Additional paid-in capital
1,137,724

 
1,123,206

Retained earnings
868,822

 
801,392

Accumulated other comprehensive loss
(195,479
)
 
(172,111
)
Subtotal
1,812,147

 
1,753,562

Treasury stock
(99,315
)
 
(89,048
)
Total stockholders' equity
1,712,832

 
1,664,514

 
 
 
 
Total liabilities and stockholders' equity
$
2,931,104

 
$
3,008,080

   


8





THE HAIN CELESTIAL GROUP, INC.
 Consolidated Statements of Income
 (unaudited and in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Twelve Months Ended June 30,
 
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
Net sales
 
$
725,085

 
$
737,547

 
$
2,853,111

 
$
2,885,374

Cost of sales
 
575,366

 
587,466

 
2,311,739

 
2,271,243

Gross profit
 
149,719

 
150,081

 
541,372

 
614,131

 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
79,033

 
80,342

 
331,763

 
303,763

Amortization of acquired intangibles
 
4,438

 
4,973

 
18,402

 
18,869

Acquisition related expenses, restructuring and
  integration charges, and other
 
7,736

 
2,156

 
10,388

 
13,391

Accounting review costs
 
9,473

 

 
29,562

 

Goodwill impairment
 

 
84,548

 

 
84,548

Long-lived asset and tradename impairment
 
40,452

 
43,200

 
40,452

 
43,200

Operating income
 
8,587

 
(65,138
)
 
110,805

 
150,360

 
 
 
 
 
 
 
 
 
Interest and other financing expenses, net
 
5,657

 
5,474

 
21,274

 
25,161

Other (income)/expense, net
 
181

 
7,699

 
388

 
16,543

Gain on fire insurance recovery
 

 
(739
)
 

 
(9,752
)
Income before income taxes and equity-method
  investees
 
2,749

 
(77,572
)
 
89,143

 
118,408

Provision for income taxes
 
2,520

 
11,086

 
21,842

 
70,932

Equity in net loss (income) of equity-method
  investees
 
(84
)
 
(61
)
 
(129
)
 
47

 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
313

 
$
(88,597
)
 
$
67,430

 
$
47,429

 
 
 
 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
 
 
 
     Basic
 
$

 
$
(0.86
)
 
$
0.65

 
$
0.46

     Diluted
 
$

 
$
(0.86
)
 
$
0.65

 
$
0.46

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
103,693

 
103,453

 
103,611

 
103,135

Diluted
 
104,294

 
103,453

 
104,248

 
104,183




9






THE HAIN CELESTIAL GROUP, INC.
 Reconciliation of GAAP Results to Non-GAAP Measures
 (unaudited and in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
2017 GAAP
 
Adjustments
 
2017 Adjusted
 
2016 GAAP
 
Adjustments
 
2016 Adjusted
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
725,085

 
$

 
$
725,085

 
$
737,547

 
$

 
$
737,547

Cost of sales
 
575,366

 
(942
)
 
574,424

 
587,466

 
(5,061
)
 
582,405

Operating expenses (a)
 
123,923

 
(40,452
)
 
83,471

 
213,063

 
(129,559
)
 
83,504

Acquisition related expenses, restructuring and
  integration charges, and other
 
7,736

 
(7,736
)
 

 
2,156

 
(2,156
)
 

Accounting review costs
 
9,473

 
(9,473
)
 

 

 

 

Operating Income
 
8,587

 
58,603

 
67,190

 
(65,138
)
 
136,776

 
71,638

Interest and other expenses (income), net (b)
 
5,838

 
234

 
6,072

 
12,434

 
(7,000
)
 
5,434

Provision for income taxes
 
2,520

 
14,332

 
16,852

 
11,086

 
9,844

 
20,930

Net income (loss)
 
313

 
44,037

 
44,350

 
(88,597
)
 
133,932

 
45,335

Earnings (loss) per share - diluted
 

 
0.42

 
0.43

 
(0.86
)
 
1.29

 
0.43


(a) Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and goodwill, long-lived assets and tradename impairment.
(b) Interest and other expenses, net include interest and other financing expenses, net, other (income)/expense, net, and gain on fire insurance recovery.



10





Detail of Adjustments:
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Three Months Ended June 30,
 
 
2017
 
2016
 
 
 
 
 
HPP chiller breakdown related costs
 
$

 
$
594

Inventory costs for products discontinued or having
  redesigned packaging
 

 
3,050

UK deferred synergies due to CMA Board decision
 

 
450

Costs incurred due to co-packer default
 

 
770

Acquisition related integration costs
 

 
197

Chilled desserts write off of maintenance parts & packaging
 
942

 

Cost of sales
 
942

 
5,061

 
 
 
 
 
UK deferred synergies due to CMA Board decision
 

 
499

Tilda fire insurance recovery costs and other setup/
  integration costs
 

 
112

Litigation expenses
 

 
1,200

Goodwill impairment
 

 
84,548

Tradename impairment
 
14,079

 
39,724

Fixed asset impairment
 
26,373

 
3,476

Operating Expenses (a)
 
40,452

 
129,559

 
 
 
 
 
Acquisition related expenses, restructuring and
  integration charges, and other
 
7,736

 
2,156

Acquisition related expenses, restructuring and
  integration charges, and other

 
7,736

 
2,156

 
 
 
 
 
Accounting review costs
 
9,473

 

Accounting review costs
 
9,473

 

 
 
 
 
 
Operating income
 
58,603

 
136,776

 
 
 
 
 
Unrealized currency loss
 
14,056

 
7,739

Realized currency gain on repayment of GBP
  denominated debt
 
(14,290
)
 

Gain on insurance recovery on Tilda related fixed asset
  purchases
 

 
(739
)
Interest and other expenses (income), net (b)
 
(234
)
 
7,000

 
 
 
 
 
Income tax related adjustments
 
14,332

 
9,844

Provision for income taxes
 
14,332

 
9,844

 
 
 
 
 
Net income
 
$
44,037

 
$
133,932

(a) Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and
goodwill, long-lived assets and tradename impairment.
(b) Interest and other expenses, net include interest and other financing expenses, net, other (income)/expense, net, and gain
on fire insurance recovery.

11






THE HAIN CELESTIAL GROUP, INC.
 Reconciliation of GAAP Results to Non-GAAP Measures
 (in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended June 30,
 
 
2017 GAAP
 
Adjustments
 
2017 Adjusted
 
2016 GAAP
 
Adjustments
 
2016 Adjusted
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
2,853,111

 
$

 
$
2,853,111

 
$
2,885,374

 
$

 
$
2,885,374

Cost of sales
 
2,311,739

 
(7,205
)
 
2,304,534

 
2,271,243

 
(10,639
)
 
2,260,604

Operating expenses (a)
 
390,617

 
(44,026
)
 
346,591

 
450,380

 
(131,093
)
 
319,287

Acquisition related expenses, restructuring and
  integration charges, and other
 
10,388

 
(10,388
)
 

 
13,391

 
(13,391
)
 

Accounting review costs
 
29,562

 
(29,562
)
 

 

 

 

Operating Income
 
110,805

 
91,181

 
201,986

 
150,360

 
155,123

 
305,483

Interest and other expenses, net (b)
 
21,662

 
1,720

 
23,382

 
31,952

 
(5,293
)
 
26,659

Provision for income taxes
 
21,842

 
29,883

 
51,725

 
70,932

 
14,958

 
85,890

Net income
 
67,430

 
59,578

 
127,008

 
47,429

 
145,458

 
192,887

Earnings per share - diluted
 
0.65

 
0.57

 
1.22

 
0.46

 
1.40

 
1.85


(a) Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and goodwill, long-lived assets and tradename impairment.
(b) Interest and other expenses, net include interest and other financing expenses, net, other (income)/expense, net, and gain on fire insurance recovery.



















12





Detail of Adjustments:
 
 
 
 
 
 
Twelve Months Ended June 30,
 
Twelve Months Ended June 30,
 
 
2017
 
2016
 
 
 
 
 
HPPC production interruption related to chiller breakdown and
  factory start-up costs
 
$

 
$
4,489

UK factory start-up costs
 

 
743

US warehouse consolidation
 

 
426

Inventory costs for products discontinued or having redesigned
  packaging
 
5,359

 
3,050

Recall and other costs
 
73

 

UK deferred synergies due to CMA Board decision
 
367

 
450

Luton closure costs
 
464

 

Costs incurred due to co-packer default
 

 
770

Acquisition related integration costs
 

 
711

Chilled desserts write-off of maintenance parts & packaging
 
942

 

Cost of sales
 
7,205

 
10,639

 
 
 
 
 
Luton closure costs
 
1,340

 

Tilda fire insurance recovery costs and other
 
947

 
342

UK deferred synergies due to CMA Board decision
 
551

 
499

Recall and other costs
 
736

 

Keurig transition
 

 
1,304

Litigation expenses
 

 
1,200

Goodwill impairment
 

 
84,548

Tradename impairment
 
14,079

 
39,724

Fixed asset impairment
 
26,373

 
3,476

Operating Expenses (a)
 
44,026

 
131,093

 
 
 
 
 
Acquisition related expenses, restructuring and
  integration charges, and other
 
10,388

 
13,391

Acquisition related expenses, restructuring and
  integration charges, and other
 
10,388

 
13,391

 
 
 
 
 
Accounting review costs
 
29,562

 

Accounting review costs
 
29,562

 

 
 
 
 
 
Operating income
 
91,181

 
155,123

 
 
 
 
 
Unrealized currency loss
 
12,570

 
14,831

Realized currency gain on repayment of GBP denominated debt
 
(14,290
)
 

Gain on insurance recovery on Tilda related fixed asset purchases
 

 
(9,752
)
HPP chiller disposal
 

 
214

Interest and other expenses (income), net (b)
 
(1,720
)
 
5,293

 
 
 
 
 
Income tax related adjustments
 
29,883

 
14,958

Provision for income taxes
 
29,883

 
14,958

 
 
 
 
 
Net income
 
$
59,578

 
$
145,458

a) Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and goodwill, long-
lived assets and tradename impairment.
(b) Interest and other expenses, net include interest and other financing expenses, net, other (income)/expense, net, and gain on fire
insurance recovery.

13





THE HAIN CELESTIAL, GROUP INC.
(unaudited and in thousands)
 
 
 
 
 
 
 
 
 
 
 
Net Sales Growth at Constant Currency:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hain Consolidated
 
United States
 
United Kingdom
 
Canada
 
Europe
Net sales - Three months ended 6/30/17
 
$
725,085

 
$
308,988

 
$
194,760

 
$
40,239

 
$
44,774

Impact of foreign currency exchange
 
28,169

 
2,899

 
22,292

 
1,731

 
1,247

 
 
$
753,254

 
$
311,887

 
$
217,052

 
$
41,970

 
$
46,021

 
 
 
 
 
 
 
 
 
 
 
Net sales - Three months ended 6/30/16
 
$
737,547

 
$
306,423

 
$
216,608

 
$
39,289

 
$
43,743

 
 
2.1
%
 
1.8
 %
 
0.2
%
 
6.8
%
 
5.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Hain Consolidated
 
United States
 
United Kingdom
 
Canada
 
Europe
Net sales - Twelve months ended 6/30/17
 
$
2,853,111

 
$
1,191,262

 
$
768,301

 
$
151,456

 
$
172,604

Impact of foreign currency exchange
 
124,319

 
14,032

 
106,650

 
303

 
3,334

 
 
$
2,977,430

 
$
1,205,294

 
$
874,951

 
$
151,759

 
$
175,938

 
 
 
 
 
 
 
 
 
 
 
Net sales - Twelve months ended 6/30/16
 
$
2,885,374

 
$
1,249,123

 
$
774,877

 
$
141,851

 
$
154,589

 
 
3.2
%
 
(3.5
)%
 
12.9
%
 
7.0
%
 
13.8
%
 
 
 
 
 
 
 
 
 
 
 
Net Sales Growth at Constant Currency and Adjusted for Acquisitions/Divestitures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
United Kingdom
 
 
 
 
 
 
 
 
Net sales on a constant currency basis -
 Three months ended 6/30/17
 
$
217,052

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales - Three months ended 6/30/16
 
$
216,608

 
 
 
 
 
 
 
 
 Acquisitions
 
1,175

 
 
 
 
 
 
 
 
 Divestitures
 
(7,188
)
 
 
 
 
 
 
 
 
 
 
$
210,595

 
 
 
 
 
 
 
 
 
 
3.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
United Kingdom
 
 
 
 
 
 
 
 
Net sales on a constant currency basis -
 Twelve months ended 6/30/17
 
$
874,951

 
 
 
 
 
 
 
 
Impact of foreign currency exchange on
  acquisitions
 
15,804

 
 
 
 
 
 
 
 
 
 
$
890,755

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales - Twelve months ended 6/30/16
 
$
774,877

 
 
 
 
 
 
 
 
 Acquisitions
 
86,190

 
 
 
 
 
 
 
 
 Divestitures
 
(21,024
)
 
 
 
 
 
 
 
 
 
 
$
840,043

 
 
 
 
 
 
 
 
 
 
6.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



14