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): November 7, 2023
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(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(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)
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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)) | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 November 7, 2023, The Hain Celestial Group, Inc. issued a press release announcing financial results for its first quarter ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 hereto.
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.
| Item 9.01 | Financial Statements and Exhibits. | ||||
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |||||||
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: November 7, 2023
| THE HAIN CELESTIAL GROUP, INC. | |||||
| By: | /s/ Lee A. Boyce | ||||
| Name: | Lee A. Boyce | ||||
| Title: | Executive Vice President and Chief Financial Officer | ||||
Exhibit 99.1
Hain Celestial Reports Fiscal First Quarter 2024 Financial Results
Company Delivers First Quarter Expectations, Reaffirms Fiscal 2024 Outlook
HOBOKEN, N.J., Nov. 7, 2023 — Hain Celestial Group (Nasdaq: HAIN) (“Hain”, “Hain Celestial” or the “Company”), a leading manufacturer of better-for-you brands to inspire healthier living, today reported financial results for the fiscal first quarter ended September 30, 2023.
“During the quarter, we unveiled Hain Reimagined, our bold strategy to transform the business and deliver sustainable profitable growth,” said Wendy Davidson, President and Chief Executive Officer. “Several initiatives underlying Hain Reimagined showed signs of progress in the fiscal first quarter, contributing to net sales that were in line with our expectations and adjusted EBITDA that beat our guidance.
Davidson continued, “We are realizing early progress in Garden Veggie™, the cornerstone of our better-for-you snack platform, and in better-for-you beverages, led by strength in Celestial Seasonings® bagged tea and non-dairy beverage in Europe. Our channel expansion strategy delivered incremental distribution in grocery and we’ve made notable progress in away-from-home channels across travel, restaurants, alternative retail, and convenience. These results fortify our confidence in our strategy, and we remain focused on the execution of Hain Reimagined.”
FINANCIAL HIGHLIGHTS*
Summary of Fiscal First Quarter Results Compared to the Prior Year Period
•Net sales decreased 3.3% compared to the prior year period to $425.0 million.
◦Organic net sales, which we define as net sales adjusted to exclude the impact of acquisitions, divestitures and discontinued brands, decreased 2.9% compared to the prior year period.
•Gross profit margin was 19.7%, a 170-basis point decrease from the prior year period.
◦Adjusted gross profit margin was 20.5%, a 95-basis point decrease from the prior year period.
•Net loss was $10.4 million compared to net income of $6.9 million in the prior year period.
◦Adjusted net loss was $3.5 million compared to adjusted net income of $9.2 million in the prior year period.
•Net loss margin was 2.4%, a 400-basis point decrease compared to the prior year period.
◦Adjusted net loss margin was 0.8%, a 290-basis point decrease compared to the prior year period.
•Adjusted EBITDA was $24.1 million compared to $36.0 million in the prior year period; Adjusted EBITDA margin was 5.7%, a 250-basis point decrease compared to the prior year period.
•Loss per diluted share was $0.12 compared to earnings per diluted share (“EPS”) of $0.08 in the prior year period.
◦Adjusted loss per diluted share was $0.04 compared to EPS of $0.10 in the prior year period.
Cash Flow and Balance Sheet Highlights
•Net cash provided by operating activities in the first quarter was $14.0 million compared to net cash used in operating activities of $5.1 million in the prior year period.
•Free cash flow in the first quarter was $7.1 million compared to negative free cash flow of $12.3 million in the prior year period.
•Total debt at the end of the fiscal first quarter was $815.0 million down from $828.7 million at the end of fiscal fourth quarter.
•Net debt at the end of the fiscal first quarter was $776.7 million compared to $775.4 million at the end of the fiscal fourth quarter.
•The Company ended the fiscal first quarter with a net secured leverage ratio of 4.3x as calculated under our amended credit agreement as compared to 4.3x at the end of the fiscal fourth quarter.
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*This 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 to GAAP financial measures and other non-GAAP financial calculations are provided in the tables included in this press release.
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
1
SEGMENT HIGHLIGHTS
The Company operates under two reportable segments: North America and International.
North America
North America net sales in the fiscal first quarter were $260.1 million, a 9.8% decrease compared to the prior year period. Organic net sales decreased by 9.3% from the prior year period. As expected, the decrease was primarily due to lower sales in baby & kids as a result of industry-wide challenges in organic formula supply, as well as by declines in personal care on the timing shift of a sun care program and in snacks on the optimization of promotional activity for Terra®.
Segment gross profit in the fiscal first quarter was $50.9 million, a decrease of 22.3% from the prior year period. Adjusted gross profit was $54.2 million, a decrease of 17.3% from the prior year period. Gross margin was 19.6%, a 315-basis point decrease from the prior year period, and adjusted gross margin was 20.8%, a 190-basis point decrease from the prior year period. The decrease was driven by deleverage on lower sales volume as well as by inflation, partially offset by pricing and productivity.
Adjusted EBITDA in the fiscal first quarter was $18.7 million, a decrease of 39.2% from the prior year period. The decrease was driven primarily by inflation as well as by the lower sales. Adjusted EBITDA margin was 7.2%, a 350-basis point decrease from the prior year period.
International
International net sales in the fiscal first quarter were $165.0 million, a 9.3% increase compared to the prior year period. The increase was mainly driven by growth in meal prep, as well as in beverages.
Segment gross profit in the fiscal first quarter was $33.0 million, a 14.7% increase from the prior year period. Adjusted gross profit was $33.0 million, an increase of 14.7% from the prior year period. Each of gross margin and adjusted gross margin was 20.0%, each representing a 95-basis point increase from the prior year period. The increase in gross profit was mainly due to pricing and productivity, partially offset by inflation.
Adjusted EBITDA in the fiscal first quarter was $17.4 million, a 16.7% increase from the prior year period. The increase was driven primarily by pricing. Adjusted EBITDA margin was 10.6%, a 70-basis point improvement from the prior year period.
FISCAL 2024 GUIDANCE**
“We are pleased that we delivered net sales results that were in line with our expectations,” said Lee Boyce, Chief Financial Officer. “We are maintaining our guidance for the full year despite achieving adjusted EBITDA in the fiscal first quarter ahead of our expectations. As outlined during our Investor Day, our Hain Reimagined strategy is designed to be self-funded and flexible. We will continue to invest in the business to drive profitable growth, adjusting the pace of investment as we progress.”
The Company is reaffirming the following guidance for fiscal 2024:
•Organic net sales up 2% to 4% versus the prior year, and
•Adjusted EBITDA to be between $155 million and $165 million.
** The forward-looking non-GAAP financial measures included in this section are not reconciled to the comparable forward-looking GAAP financial measures. The Company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include certain litigation and related expenses, transaction costs associated with acquisitions and divestitures, productivity and transformation costs, impairments, gains or losses on sales of assets and businesses, foreign exchange movements and other items. The unavailable information could have a significant impact on the Company’s GAAP financial results.
Conference Call and Webcast Information
Hain Celestial will host a conference call and webcast today at 8:30 AM Eastern Time to discuss its results and business outlook. The live webcast and the accompanying presentation will be available under the Investors section of the Company’s corporate website at www.hain.com. Investors and analysts can access the live call by dialing 877-407-9716 or 201-493-6779. A replay of the call will be available approximately 3 hours after the conclusion of the live call and can be accessed by dialing 844-512-2921 or 1-412-317-6671; the conference access ID is 13742015.
About The Hain Celestial Group
Hain Celestial Group is a global health and wellness company whose purpose is to inspire healthier living for people, communities, and the planet through better-for-you brands. For more than 30 years, our portfolio of beloved brands
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
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has intentionally focused on delivering nutrition and well-being that positively impacts today and tomorrow. Headquartered in Hoboken, N.J., Hain Celestial’s products across snacks, baby/kids, beverages, meal preparation, and personal care, are marketed and sold in over 75 countries around the world. Our leading brands include Garden VeggieTM Snacks, Terra® chips, Garden of Eatin’® snacks, Earth’s Best® and Ella’s Kitchen® baby and toddler foods, Celestial Seasonings® teas, Joya® and Natumi® plant-based beverages, Greek Gods® yogurt, Yorkshire Provender®, Cully & Sully® and Covent Garden® soups, Yves® and Linda McCartney’s® (under license) meat-free, Alba Botanica® natural sun care, and Live Clean® personal care products, among others. For more information, visit hain.com and LinkedIn.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. The words “believe,” “expect,” “anticipate,” “may,” “should,” “plan,” “intend,” “potential,” “will” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include, among other things: our beliefs or expectations relating to our future performance, results of operations and financial condition; our strategic initiatives (including statements related to Hain Reimagined and our related investments in our business); our business strategy; our supply chain, including the availability and pricing of raw materials; our brand portfolio; pricing actions and product performance; and current or future macroeconomic trends.
Risks and uncertainties that may cause actual results to differ materially from forward-looking statements include: challenges and uncertainty resulting from the impact of competition; our ability to manage our supply chain effectively; input cost inflation, including with respect to freight and other distribution costs; disruption of operations at our manufacturing facilities; reliance on independent contract manufacturers; changes to consumer preferences; customer concentration; reliance on independent distributors; risks associated with operating internationally; pending and future litigation, including litigation relating to Earth’s Best® baby food products; the reputation of our Company and our brands; compliance with our credit agreement; foreign currency exchange risk; the availability of organic ingredients; risks associated with outsourcing arrangements; our ability to execute our cost reduction initiatives and related strategic initiatives; risks associated with conflicts in Eastern Europe and the Middle East and other geopolitical events; our ability to identify and complete acquisitions or divestitures and our level of success in integrating acquisitions; our reliance on independent certification for a number of our products; our ability to use and protect trademarks; general economic conditions; cybersecurity incidents; disruptions to information technology systems; changing rules, public disclosure regulations and stakeholder expectations on ESG-related matters; the impact of climate change; liabilities, claims or regulatory change with respect to environmental matters; potential liability if our products cause illness or physical harm; the highly regulated environment in which we operate; compliance with data privacy laws; our ability to issue preferred stock; the adequacy of our insurance coverage; impairments in the carrying value of goodwill or other intangible assets; and other risks and matters described in our most recent Annual Report on Form 10-K and our other filings from time to time with the U.S. Securities and Exchange Commission.
We undertake no obligation to update forward-looking statements to reflect actual results or changes in assumptions or circumstances, except as required by applicable law.
Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures, including, among others, organic net sales, adjusted operating income and its related margin, adjusted gross profit and its related margin, adjusted net (loss) income and its related margin, adjusted (loss) earnings per diluted share, adjusted EBITDA and its related margin, free cash flow and net debt. The reconciliations of historic non-GAAP financial measures to the comparable GAAP financial measures are provided in the tables below. 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 financial statements presented in accordance with GAAP.
We define our non-GAAP financial measures as follows:
•Organic net sales: net sales excluding the impact of acquisitions, divestitures and discontinued brands. To adjust organic net sales for the impact of acquisitions, the net sales of an acquired business are excluded from fiscal quarters constituting or falling within the current period and prior period where the applicable fiscal quarter in the prior period did not include the acquired business for the entire quarter. To adjust organic net sales for the impact of divestitures and discontinued brands, the net sales of a divested business or discontinued brand are excluded from all periods.
•Adjusted gross profit and its related margin: gross profit, before plant closure related costs, net.
•Adjusted operating income and its related margin: operating (loss) income before certain litigation expenses, net, plant closure related costs, net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, net, costs associated with acquisitions, divestitures and other transactions, and long-lived asset impairments.
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
3
•Adjusted net (loss) income and its related margin and diluted net (loss) income per common share, as adjusted: net (loss) income, adjusted to exclude the impact of certain litigation expenses, net, plant closure related costs, net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, net, costs associated with acquisitions, divestitures and other transactions, losses (gains) on sales of assets, long-lived asset impairments, unrealized currency losses (gains) and the related tax effects of such adjustments.
•Adjusted EBITDA: net (loss) income before net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses (gains), certain litigation and related costs, plant closure related costs, net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, costs associated with acquisitions, divestitures and other transactions, losses (gains) on sales of assets, long-lived asset impairments and other adjustments.
•Free cash flow: net cash used in or provided by operating activities less purchases of property, plant and equipment.
•Net debt: total debt less cash and cash equivalents.
We believe 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. We provide:
•Organic net sales to demonstrate the growth rate of net sales excluding the impact of acquisitions, divestitures and discontinued brands, and believe organic net sales is useful to investors because it enables them to better understand the growth of our business from period to period.
•Adjusted results as important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
•Free cash flow as one factor in evaluating the amount of cash available for discretionary investments.
•Net debt as a useful measure to monitor leverage and evaluate the balance sheet.
Contacts
Investor Relations:
Alexis Tessier
Investor.Relations@hain.com
Media:
Jen Davis
Jen.Davis@hain.com
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
4
| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||
| Consolidated Statements of Operations | |||||||||||
| (unaudited and in thousands, except per share amounts) | |||||||||||
| First Quarter | |||||||||||
| 2024 | 2023 | ||||||||||
| Net sales | $ | 425,029 | $ | 439,351 | |||||||
| Cost of sales | 341,086 | 345,016 | |||||||||
| Gross profit | 83,943 | 94,335 | |||||||||
| Selling, general and administrative expenses | 77,169 | 74,951 | |||||||||
| Productivity and transformation costs | 6,403 | 773 | |||||||||
| Amortization of acquired intangible assets | 1,955 | 2,788 | |||||||||
| Long-lived asset impairment | 694 | — | |||||||||
| Operating (loss) income | (2,278) | 15,823 | |||||||||
| Interest and other financing expense, net | 13,244 | 7,677 | |||||||||
| Other income, net | (265) | (1,790) | |||||||||
| (Loss) income before income taxes and equity in net loss of equity-method investees | (15,257) | 9,936 | |||||||||
| (Benefit) provision for income taxes | (5,379) | 2,631 | |||||||||
| Equity in net loss of equity-method investees | 498 | 382 | |||||||||
| Net (loss) income | $ | (10,376) | $ | 6,923 | |||||||
| Net (loss) income per common share: | |||||||||||
| Basic | $ | (0.12) | $ | 0.08 | |||||||
| Diluted | $ | (0.12) | $ | 0.08 | |||||||
| Shares used in the calculation of net (loss) income per common share: | |||||||||||
| Basic | 89,512 | 89,307 | |||||||||
| Diluted | 89,512 | 89,493 | |||||||||
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
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| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| (unaudited and in thousands) | |||||||||||
| September 30, 2023 | June 30, 2023 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 38,280 | $ | 53,364 | |||||||
| Accounts receivable, net | 158,094 | 160,948 | |||||||||
| Inventories | 313,335 | 310,341 | |||||||||
| Prepaid expenses and other current assets | 56,044 | 66,378 | |||||||||
| Total current assets | 565,753 | 591,031 | |||||||||
| Property, plant and equipment, net | 285,972 | 296,325 | |||||||||
| Goodwill | 928,375 | 938,640 | |||||||||
| Trademarks and other intangible assets, net | 290,867 | 298,105 | |||||||||
| Investments and joint ventures | 12,298 | 12,798 | |||||||||
| Operating lease right-of-use assets, net | 102,540 | 95,894 | |||||||||
| Other assets | 31,091 | 25,846 | |||||||||
| Total assets | $ | 2,216,896 | $ | 2,258,639 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 142,291 | $ | 134,780 | |||||||
| Accrued expenses and other current liabilities | 96,731 | 88,520 | |||||||||
| Current portion of long-term debt | 7,568 | 7,567 | |||||||||
| Total current liabilities | 246,590 | 230,867 | |||||||||
| Long-term debt, less current portion | 807,401 | 821,181 | |||||||||
| Deferred income taxes | 61,006 | 72,086 | |||||||||
| Operating lease liabilities, noncurrent portion | 97,165 | 90,014 | |||||||||
| Other noncurrent liabilities | 23,740 | 26,584 | |||||||||
| Total liabilities | 1,235,902 | 1,240,732 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock | 1,116 | 1,113 | |||||||||
| Additional paid-in capital | 1,221,291 | 1,217,549 | |||||||||
| Retained earnings | 642,185 | 652,561 | |||||||||
| Accumulated other comprehensive loss | (155,623) | (126,216) | |||||||||
| 1,708,969 | 1,745,007 | ||||||||||
| Less: Treasury stock | (727,975) | (727,100) | |||||||||
| Total stockholders' equity | 980,994 | 1,017,907 | |||||||||
| Total liabilities and stockholders' equity | $ | 2,216,896 | $ | 2,258,639 | |||||||
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
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| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||
| Consolidated Statements of Cash Flows | |||||||||||
| (unaudited and in thousands) | |||||||||||
| First Quarter | |||||||||||
| 2024 | 2023 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net (loss) income | $ | (10,376) | $ | 6,923 | |||||||
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities | |||||||||||
| Depreciation and amortization | 12,305 | 11,970 | |||||||||
| Deferred income taxes | (11,269) | (1,497) | |||||||||
| Equity in net loss of equity-method investees | 498 | 382 | |||||||||
| Stock-based compensation, net | 3,742 | 3,994 | |||||||||
| Long-lived asset impairment | 694 | — | |||||||||
| Loss (gain) on sale of assets | 62 | (60) | |||||||||
| Other non-cash items, net | (556) | (1,457) | |||||||||
| (Decrease) increase in cash attributable to changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (1,150) | (9,589) | |||||||||
| Inventories | (7,423) | (16,907) | |||||||||
| Other current assets | 8,761 | 2,541 | |||||||||
| Other assets and liabilities | (3,198) | 1,348 | |||||||||
| Accounts payable and accrued expenses | 21,940 | (2,764) | |||||||||
| Net cash provided by (used in) operating activities | 14,030 | (5,116) | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Purchases of property, plant and equipment | (6,906) | (7,215) | |||||||||
| Investments and joint ventures, net | — | 191 | |||||||||
| Proceeds from sale of assets | 1,257 | 96 | |||||||||
| Net cash used in investing activities | (5,649) | (6,928) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Borrowings under bank revolving credit facility | 46,000 | 80,000 | |||||||||
| Repayments under bank revolving credit facility | (57,000) | (68,000) | |||||||||
| Repayments under term loan | (1,875) | (1,875) | |||||||||
| Payments of other debt, net | (3,834) | (72) | |||||||||
| Employee shares withheld for taxes | (875) | (229) | |||||||||
| Net cash (used in) provided by financing activities | (17,584) | 9,824 | |||||||||
| Effect of exchange rate changes on cash | (5,881) | (11,498) | |||||||||
| Net decrease in cash and cash equivalents | (15,084) | (13,718) | |||||||||
| Cash and cash equivalents at beginning of period | 53,364 | 65,512 | |||||||||
| Cash and cash equivalents at end of period | $ | 38,280 | $ | 51,794 | |||||||
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
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| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
| Net Sales, Gross Profit, Adjusted Gross Profit and Adjusted EBITDA by Segment | |||||||||||||||||||||||
| (unaudited and in thousands) | |||||||||||||||||||||||
| North America | International | Corporate/Other | Hain Consolidated | ||||||||||||||||||||
| Net Sales | |||||||||||||||||||||||
| Net sales - Q1 FY24 | $ | 260,054 | $ | 164,975 | $ | — | $ | 425,029 | |||||||||||||||
| Net sales - Q1 FY23 | $ | 288,396 | $ | 150,955 | $ | — | $ | 439,351 | |||||||||||||||
| % change - FY24 net sales vs. FY23 net sales | (9.8) | % | 9.3 | % | (3.3) | % | |||||||||||||||||
| Gross Profit | |||||||||||||||||||||||
| Q1 FY24 | |||||||||||||||||||||||
| Gross profit | $ | 50,896 | $ | 33,047 | $ | — | $ | 83,943 | |||||||||||||||
Non-GAAP adjustments(1) | 3,320 | — | — | 3,320 | |||||||||||||||||||
| Adjusted gross profit | $ | 54,216 | $ | 33,047 | $ | — | $ | 87,263 | |||||||||||||||
| % change - FY24 gross profit vs. FY23 gross profit | (22.3) | % | 14.7 | % | (11.0) | % | |||||||||||||||||
| % change - FY24 adjusted gross profit vs. FY23 adjusted gross profit | (17.3) | % | 14.7 | % | (7.5) | % | |||||||||||||||||
| Gross margin | 19.6 | % | 20.0 | % | 19.7 | % | |||||||||||||||||
| Adjusted gross margin | 20.8 | % | 20.0 | % | 20.5 | % | |||||||||||||||||
| Q1 FY23 | |||||||||||||||||||||||
| Gross profit | $ | 65,535 | $ | 28,800 | $ | — | $ | 94,335 | |||||||||||||||
Non-GAAP adjustments(1) | 30 | 6 | — | 36 | |||||||||||||||||||
| Adjusted gross profit | $ | 65,565 | $ | 28,806 | $ | — | $ | 94,371 | |||||||||||||||
| Gross margin | 22.7 | % | 19.1 | % | 21.5 | % | |||||||||||||||||
| Adjusted gross margin | 22.7 | % | 19.1 | % | 21.5 | % | |||||||||||||||||
| Adjusted EBITDA | |||||||||||||||||||||||
| Q1 FY24 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 18,727 | $ | 17,438 | $ | (12,075) | $ | 24,090 | |||||||||||||||
| % change - FY24 adjusted EBITDA vs. FY23 adjusted EBITDA | (39.2) | % | 16.7 | % | (24.5) | % | (33.1) | % | |||||||||||||||
| Adjusted EBITDA margin | 7.2 | % | 10.6 | % | 5.7 | % | |||||||||||||||||
| Q1 FY23 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 30,781 | $ | 14,947 | $ | (9,699) | $ | 36,029 | |||||||||||||||
| Adjusted EBITDA margin | 10.7 | % | 9.9 | % | 8.2 | % | |||||||||||||||||
(1) See accompanying table "Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net (Loss) Income and Adjusted EPS"
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
8
| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||
| Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net (Loss) Income and Adjusted EPS | |||||||||||
| (unaudited and in thousands) | |||||||||||
| Reconciliation of Gross Profit, GAAP to Gross Profit, as Adjusted: | |||||||||||
| First Quarter | |||||||||||
| 2024 | 2023 | ||||||||||
| Gross profit, GAAP | $ | 83,943 | $ | 94,335 | |||||||
| Adjustments to Cost of sales: | |||||||||||
| Plant closure related costs, net | 3,320 | 36 | |||||||||
| Gross profit, as adjusted | $ | 87,263 | $ | 94,371 | |||||||
| Reconciliation of Operating (Loss) Income, GAAP to Operating Income, as Adjusted: | |||||||||||
| First Quarter | |||||||||||
| 2024 | 2023 | ||||||||||
| Operating (loss) income, GAAP | $ | (2,278) | $ | 15,823 | |||||||
| Adjustments to Cost of sales: | |||||||||||
| Plant closure related costs, net | 3,320 | 36 | |||||||||
Adjustments to Operating expenses(a): | |||||||||||
| Transaction and integration costs, net | 118 | 1,367 | |||||||||
Certain litigation expenses, net(b) | 1,524 | 2,463 | |||||||||
| Long-lived asset impairment | 694 | — | |||||||||
| Plant closure related costs, net | (53) | (38) | |||||||||
| Productivity and transformation costs | 6,403 | 773 | |||||||||
| Operating income, as adjusted | $ | 9,728 | $ | 20,424 | |||||||
| Reconciliation of Net (Loss) Income, GAAP to Net (Loss) Income, as Adjusted: | |||||||||||
| First Quarter | |||||||||||
| 2024 | 2023 | ||||||||||
| Net (loss) income, GAAP | $ | (10,376) | $ | 6,923 | |||||||
| Adjustments to Cost of sales: | |||||||||||
| Plant closure related costs, net | 3,320 | 36 | |||||||||
Adjustments to Operating expenses(a): | |||||||||||
| Transaction and integration costs, net | 118 | 1,367 | |||||||||
Certain litigation expenses, net(b) | 1,524 | 2,463 | |||||||||
| Long-lived asset impairment | 694 | — | |||||||||
| Plant closure related costs, net | (53) | (38) | |||||||||
| Productivity and transformation costs | 6,403 | 773 | |||||||||
Adjustments to Interest and other expense, net(c): | |||||||||||
| Loss (gain) on sale of assets | 62 | (40) | |||||||||
| Unrealized currency gains | (796) | (1,711) | |||||||||
| Adjustments to (Benefit) provision for income taxes: | |||||||||||
| Net tax impact of non-GAAP adjustments | (4,427) | (546) | |||||||||
| Net (loss) income, as adjusted | $ | (3,531) | $ | 9,227 | |||||||
| Net (loss) income margin | (2.4) | % | 1.6 | % | |||||||
| Adjusted net (loss) income margin | (0.8) | % | 2.1 | % | |||||||
| Diluted shares used in the calculation of net (loss) income per common share: | 89,512 | 89,493 | |||||||||
| Diluted net (loss) income per common share, GAAP | $ | (0.12) | $ | 0.08 | |||||||
| Diluted net (loss) income per common share, as adjusted | $ | (0.04) | $ | 0.10 | |||||||
(a) Operating expenses include amortization of acquired intangibles, selling, general and administrative expenses, long-lived asset impairment and productivity and transformation costs.
(b) Expenses and items relating to securities class action and baby food litigation.
(c) Interest and other expense, net includes interest and other financing expenses, net, unrealized currency gains, loss (gain) on sale of assets and other expense, net.
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
9
| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||
| Organic Net Sales Growth | |||||||||||||||||
| (unaudited and in thousands) | |||||||||||||||||
| Q1 FY24 | North America | International | Hain Consolidated | ||||||||||||||
| Net sales | $ | 260,054 | $ | 164,975 | $ | 425,029 | |||||||||||
| Divestitures and discontinued brands | 8 | — | 8 | ||||||||||||||
| Organic net sales | $ | 260,062 | $ | 164,975 | $ | 425,037 | |||||||||||
| Q1 FY23 | |||||||||||||||||
| Net sales | $ | 288,396 | $ | 150,955 | $ | 439,351 | |||||||||||
| Divestitures and discontinued brands | (1,762) | — | (1,762) | ||||||||||||||
| Organic net sales | $ | 286,634 | $ | 150,955 | $ | 437,589 | |||||||||||
| Net sales (decline) growth | (9.8) | % | 9.3 | % | (3.3) | % | |||||||||||
| Impact of divestitures and discontinued brands | 0.5 | % | — | 0.4 | % | ||||||||||||
| Organic net sales (decline) growth | (9.3) | % | 9.3 | % | (2.9) | % | |||||||||||
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
10
| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||
| Adjusted EBITDA | |||||||||||
| (unaudited and in thousands) | |||||||||||
| First Quarter | |||||||||||
| 2024 | 2023 | ||||||||||
| Net (loss) income | $ | (10,376) | $ | 6,923 | |||||||
| Depreciation and amortization | 12,305 | 11,970 | |||||||||
| Equity in net loss of equity-method investees | 498 | 382 | |||||||||
| Interest expense, net | 12,623 | 7,279 | |||||||||
| (Benefit) provision for income taxes | (5,379) | 2,631 | |||||||||
| Stock-based compensation, net | 3,742 | 3,994 | |||||||||
| Unrealized currency losses (gains) | 35 | (1,711) | |||||||||
Certain litigation expenses, net(a) | 1,524 | 2,463 | |||||||||
| Restructuring activities | |||||||||||
| Plant closure related costs, net | 1,841 | (2) | |||||||||
| Productivity and transformation costs | 6,403 | 773 | |||||||||
| Acquisitions, divestitures and other | |||||||||||
| Transaction and integration costs, net | 118 | 1,367 | |||||||||
| Loss (gain) on sale of assets | 62 | (40) | |||||||||
| Impairment charges | |||||||||||
| Long-lived asset impairment | 694 | — | |||||||||
| Adjusted EBITDA | $ | 24,090 | $ | 36,029 | |||||||
(a) Expenses and items relating to securities class action and baby food litigation.
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
11
| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||
| Free Cash Flow | |||||||||||
| (unaudited and in thousands) | |||||||||||
| First Quarter | |||||||||||
| 2024 | 2023 | ||||||||||
| Net cash provided by (used in) operating activities | $ | 14,030 | $ | (5,116) | |||||||
| Purchases of property, plant and equipment | (6,906) | (7,215) | |||||||||
| Free cash flow | $ | 7,124 | $ | (12,331) | |||||||
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
12
| THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES | |||||||||||
| Net Debt | |||||||||||
| (unaudited and in thousands) | |||||||||||
| September 30, 2023 | June 30, 2023 | ||||||||||
| Long-term debt, less current portion | $ | 807,401 | $ | 821,181 | |||||||
| Current portion of long-term debt | 7,568 | 7,567 | |||||||||
| Total debt | $ | 814,969 | $ | 828,748 | |||||||
| Less: Cash and cash equivalents | 38,280 | 53,364 | |||||||||
| Net debt | $ | 776,689 | $ | 775,384 | |||||||
The Hain Celestial Group, Inc. • 221 River Street, 12 Floor • Hoboken, NJ 07030
516-587-5000 • www.hain.com
13