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)
September 19, 2000
THE HAIN CELESTIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-22818 22-3240619
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
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50 Charles Lindbergh Boulevard
Uniondale, New York 11553
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 237-6200
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Item 5. Other Events
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On September 19, 2000, The Hain Celestial Group, Inc. (the "Company")
announced earnings for the fiscal quarter and fiscal year ended June 30, 2000.
Reflecting the one-time impact of charges, costs, and other items stemming from
its merger with Celestial Seasonings, Inc. totaling approximately $45.0 million,
the Company announced a net loss of $17.1 million, or $0.61 per share, and net
sales of $403.5 million for fiscal year ended June 30, 2000. For the fiscal
quarter ended June 30, 2000, the Company reported a net loss of $29.3 million,
or $0.99 per share, and net sales of $87 million.
A copy of the press release issued by the Company on September 19, 2000 is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In accordance with Rules 100(a) and 101(e) of Regulation FD under the
Securities Exchange Act of 1934, the Company hosted a conference call regarding
its results for the fiscal quarter and fiscal year ended June 30, 2000 at 8:30
a.m. EST on September 19, 2000 via webcast on the Internet at
http://www.vcall.com.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
Exhibit No. Description
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99.1 Press release dated September 19, 2000
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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.
THE HAIN CELESTIAL GROUP, INC.
Dated: September 19, 2000 By: /s/ Gary M. Jacobs
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Gary M. Jacobs
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release dated September 19, 2000
Exhibit 99.1
Contact: Gary Jacobs, CFO Jeremy Fielding/Sarah Zitter Milstein
The Hain Celestial Group, Inc. Kekst and Company
516-237-6200 212-521-4800
FOR IMMEDIATE RELEASE
THE HAIN CELESTIAL GROUP REPORTS FOURTH QUARTER
AND FISCAL 2000 RESULTS
Fourth Quarter Financial Highlights:
o Strong Growth in Rocket Brands Reflects Continued Increase in
Popularity of Natural and Organic Foods
o Results for quarter reflect the one-time impact of charges, costs, and
other items associated with Hain Celestial Seasonings merger
o Subsequent repositioning of Celestial Seasonings to focus on brand
strength, and changes to business operations, expected to contribute
to Hain Celestial's performance in fiscal 2001
UNIONDALE, NY, September 19, 2000 - Reflecting the one-time impact of
charges, costs, and other items stemming from its merger and totaling
approximately $45.0 million, The Hain Celestial Group (Nasdaq: HAIN-news), the
leading natural and organic food company, today announced a net loss of $17.1
million, or $0.61 per share, and net sales of $403.5 million for fiscal year
ended June 30, 2000. For the fourth quarter, the Company reported a net loss of
$29.3 million, or $0.99 per share, and net sales of $87 million.
Irwin D. Simon, Chairman, President and Chief Executive Officer of The Hain
Celestial Group said, "In the fourth quarter, Hain brands were up 23%, with the
major contribution coming from its rocket brands of Westsoy, Terra Chips, Health
Valley, and Earth's Best. Without the merger-related costs and items that
reflect the impact of the merger on our operations, in our judgment, earnings
per share for the fourth quarter would have totaled $0.18."
Mr. Simon continued, "Our priority this quarter has been ensuring the
effective integration and consolidation of businesses and operations following
the acquisition of Celestial Seasonings, so that we are well-positioned to
capitalize on the growth of our brands in fiscal 2001 and beyond. In the fourth
quarter, we made significant progress in this process by
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streamlining certain operations, implementing effective sales, marketing and
other operational processes, and refocusing Celestial's brands around tea. We
are also making accommodations for non-core businesses in anticipation of
changes in marketing and support for some Celestial Seasonings products that do
not fit within our overall strategy."
Mr. Simon also stated that by taking these steps for the future of the
combined Hain Celestial Group, certain fourth-quarter costs and charges became
necessary, but that the Company is confident it will be able to capitalize on
its strong brands in fiscal 2001 and beyond, and achieve higher sales through
better distribution channels, while increasing margins as a result of an
overhauled pricing strategy. In addition, the Company believes that the
Celestial Seasonings brand is poised over the next year to begin realizing its
full potential.
FOURTH QUARTER RESULTS
One-time charges and costs incurred in the fourth quarter totaling $25.3
million, related to: merger-related costs resulting from the acquisition of
Celestial Seasonings; the streamlining and restructuring of certain non-core
businesses; the consolidation of certain warehouses within the Hain Celestial
distribution network; and the write-down from the impairment of certain
long-lived assets. Additional write-offs during the period were associated with
the September 1999 changes in Celestial's supplement business and reserves
related to the current supplement business.
The Company was further impacted by approximately $19.5 million related to
the previously-announced process to clear distribution channels, higher trade
promotional expenses over expected amounts as a result of the merger, lower
gross profit margins due to sales mix, excess warehouse costs, and fuel
surcharges. The Company's focus on the post-merger integration process also led
to lower-than-expected revenues from Hain's non-core brands.
In the fourth quarter, the Company also recorded an extraordinary charge of
$1.9 million, (net of tax benefit of $1.2 million) related to the early
extinguishment of its existing term loan and the write-off of the related debt
financing costs. The Company's effective tax rate for the quarter was 20.5%, as
certain costs of the merger and restructuring are non-deductible for income tax
purposes.
In the fourth quarter, Hain Celestial's rocket brands experienced
significant growth in sales, as consumer demand for natural and organic foods
continued to increase rapidly. Compared with the fourth quarter of 1999, Hain
Celestial's Westsoy products increased by 58%; the Terra brand grew by 45%,
Earth's Best baby foods experienced an increase in the natural channel of 37%
and Health Valley saw growth in the second half of fiscal 2000 for the
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first time in many years. Hain Celestial also introduced innovative products to
focus on the range of teas under the Celestial Seasonings brand, including new
functional black teas, and iced teas, as well as enhanced sales, distribution
and marketing strategies for the Celestial Seasonings brand.
Hain Celestial's balance sheet improved significantly in the fourth
quarter, with working capital totaling approximately $90 million, cash on hand
of $38 million, a current ratio of 2.7:1; debt to equity at 2%; and total equity
of $352 million.
"These successes are indicative of our strategy for growth that was
recently recognized by Fortune Magazine, which ranked The Hain Celestial Group
number 15 on its prestigious list of the 100 Fastest Growing Companies,"
commented Mr. Simon.
FISCAL 2000 HIGHLIGHTS
In fiscal 2000, the Company signed a strategic partnership with the H.J.
Heinz Company, under which Heinz purchased 19.5% of the Company's outstanding
common stock.
In addition, on May 30, Hain completed its acquisition of Celestial
Seasonings, accounted for as a pooling-of-interest, giving the combined Hain
Celestial Group a position of market leadership in 13 of the top 15 categories
of natural and organic foods.
Hain Celestial continued its record of innovative products and marketing in
fiscal 2000, introducing functional black teas in the Celestial Seasonings
brands, Health Valley Soy O's and Soy Flakes cereals, refrigerated Soy Milk and
Singles in the Westsoy brand, extensions to Terra Chip's successful "Blue" and
"Red Bliss" lines, and an agreement with Liberty Richter to outsource the
marketing and distribution of Hain's medically-focused and weight management
food brands.
About The Hain Celestial Group
The Hain Celestial Group, headquartered in Uniondale, NY, is a natural,
specialty and snack food company. The Company is a leader in 13 of the top 15
natural food categories, with such well-known natural food brands as Celestial
Seasonings (R) teas, Hain Pure Foods(R), Westbrae(R), Westsoy(R), Arrowhead
Mills(R), Health Valley(R), Breadshop's(R), Casbah(R), Garden of Eatin(R), Terra
Chips(R), DeBoles(R), Earth's Best(R), and Nile Spice. The Company's principal
specialty product lines include Hollywood(R) cooking oils, Estee(R) sugar-free
products, Weight Watchers(R) dry and refrigerated products, Kineret(R) kosher
foods, Boston Better Snacks(R), and Alba Foods(R). The Hain Celestial Group's
website can be found at http://www.hain-celestial.com.
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Statements made in this Press Release that are estimates of past or future
performance are based on a number of factors, some of which are outside of the
Company's control. Statements made in this Press Release that state the
intentions, beliefs, expectations or predictions of The Hain Celestial Group and
its management for the future are forward-looking statements. It is important to
note that actual results could differ materially from those projected in such
forward-looking statements. Information concerning factors that could cause
actual results to differ materially from those in forward-looking statements is
contained from time to time in filings of The Hain Celestial Group with the U.S.
Securities and Exchange Commission. Copies of these filings may be obtained by
contacting The Hain Celestial Group or the SEC.
Hain Celestial management will host a conference call to discuss its fourth
quarter and year-end results at 8:30 a.m. EST on September 19, 2000. The call
may be accessed on the Internet at http://www.vcall.com (enter ticker symbol:
HAIN).
THE HAIN CELESTIAL GROUP, INC.
Consolidated Balance Sheets
(In thousands)
June 30,
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2000 1999
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ASSETS
Current assets:
Cash and cash equivalents $38,308 $1,147
Trade receivables, net 36,120 41,163
Inventories 48,139 39,929
Recoverable income taxes 7,982 3,461
Deferred income taxes 8,724 911
Other current assets 3,611 7,533
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Total current assets 142,884 94,144
Property, plant and equipment, net 39,340 41,487
Goodwill and other intangible assets, net 228,477 211,066
Deferred income taxes -- 1,175
Other assets 5,316 10,746
Deferred financing costs, net -- 4,051
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Total assets $416,017 $362,669
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $43,039 $45,558
Accrued merger related charges 9,414 --
Current portion of long-term debt 681 10,817
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Total current liabilities 53,134 56,375
Deferred income taxes and other liabilities 5,537 667
Long-term debt, less current portion 5,622 141,138
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Total liabilities 64,293 198,180
Stockholders' equity:
Common stock 321 247
Additional paid-in capital 326,641 126,316
Retained earnings 25,037 38,201
Treasury stock (275) (275)
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Total stockholders' equity 351,724 164,489
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Total liabilities and stockholders' equity $416,017 $362,669
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THE HAIN CELESTIAL FOOD GROUP, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended June 30 Fiscal Year Ended June 30,
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2000 1999 2000 1999
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(Unaudited)
Net sales $87,012 $81,775 $403,543 $315,820
Cost of Sales 55,034 42,677 227,417 169,141
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Gross profit 31,978 39,098 176,126 146,679
SG&A expenses 41,378 27,651 148,133 111,802
Merger costs 15,633 -- 15,633 --
Restructuring and other non-recurring charges 3,733 -- 4,933 1,200
Impairment of Long lived assets 3,468 -- 3,468 --
Amortization of goodwill and other intangible assets 1,345 1,313 6,346 4,787
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Operating income (loss) (33,579) 10,134 (2,387) 28,890
Other Income 213 -- 1,585 --
Interest and financing costs (1,017) (2,083) (6,701) (6,442)
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Income (loss) before income taxes, extraordinary
item and cumulative change in accounting principle (34,383) 8,051 (7,503) 22,448
Income taxes (benefit)/provision (7,054) 3,331 3,900 8,931
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Income (loss) before extraordinary item and
cumulative change in accounting principle (27,329) 4,720 (11,403) 13,517
Extraordinary item - loss from early extinguishment
of debt, net of income tax benefit of $1,182 (1,940) -- (1,940) --
Cumulative change in accounting principle, net of
income tax benefit of $2,547 -- -- (3,754) --
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Net income (loss) $(29,269) $4,720 $(17,097) $13,517
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Basic per share amounts:
Income (loss) before extraordinary item and
cumulative change in accounting principle $(0.93) $0.19 $(0.41) $0.56
Extraordinary item (0.06) -- (0.07) --
Cumulative change in accounting principle -- -- (0.13) --
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Net income (loss) $(0.99) $0.19 $(0.61) $0.56
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Diluted per share amounts:
Income (loss) from before extraordinary item and
cumulative change in accounting principle $(0.93) $0.18 $(0.41) $0.51
Extraordinary item (0.06) -- (0.07) --
Cumulative change in accounting principle -- -- (0.13) --
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Net income/(loss) $(0.99) $0.18 $(0.61) $0.51
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Common equivalent shares:
Basic 29,484 24,454 27,952 24,144
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Diluted 31,307 26,667 30,046 26,636
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