LAKE SUCCESS, N.Y.,
Feb. 7, 2018 /PRNewswire/ -- 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 financial results for the second quarter ended
December 31, 2017.
"We are pleased with the increase in net sales and profitability
across our international business segments for the second quarter
along with contributions from various brands in the United States, which reflects our
well-diversified geographic portfolio. Our team remains
intently focused on generating the growth we believe we are capable
of achieving from our brand building efforts," said Irwin D. Simon, Founder, President and Chief
Executive Officer of Hain Celestial. "Throughout our
organization, we continue to make progress on our long-term
strategic priorities and Project Terra cost savings initiatives.
As we look to reduce complexities across our business and
drive greater efficiencies, our team has already identified
specific opportunities to simplify our brand portfolio near-term to
enhance stockholder value, positioning Hain Celestial for future
growth."
FINANCIAL HIGHLIGHTS1
Second Quarter Results Summary
- Net sales increased 5% to $775.2
million compared to the prior year period, or 2% on a
constant currency basis, primarily reflecting mid-single digit net
sales increases from our United
Kingdom, Canada and
Europe and Hain Pure Protein
operating segments, partially offset by a low single digit decrease
from the United States
segment.
- Net sales increased 1%, compared to the prior year period, when
adjusted for foreign exchange and acquisitions, divestitures, and
certain other items2.
- Gross margin of 18.6%; adjusted gross margin of 20.2%.
- Operating income of $36.3
million; adjusted operating income of $62.1 million.
- Net income of $47.1 million, an
increase of 73% over the prior year period; adjusted net income of
$42.7 million, an increase of 30%
over the prior year period.
- EBITDA increased 2% to $61.0
million compared to $59.6
million in the prior year period; adjusted EBITDA increased
19% to $82.7 million compared to
$69.5 million in the prior year
period.
- EPS of $0.45 compared to
$0.26 in the prior year period;
adjusted EPS of $0.41 compared to
$0.32 in the prior year period.
SECOND QUARTER OPERATING SEGMENT HIGHLIGHTS
Hain Celestial United States
Net sales for Hain
Celestial United States decreased 3% over the prior year period to
$270.3 million; net sales adjusted
for acquisitions, divestitures and certain other items2
decreased 5%. Growth from the Tea, Pure Personal Care and
Better-For-You Baby platforms including Celestial Seasonings®,
Terra®, Garden of Eatin®, Alba Botanica®, Avalon Organics®, Live
Clean® and Earth's Best® brands was offset by declines from
Sensible Portions®, Spectrum® and The Greek Gods® brands in
Better-For-You Snacking, Better-For-You Pantry and Fresh Living
platforms, despite growth from MaraNatha® and Arrowhead Mills®
brands. In addition, the declines were being driven by the
strategic decision to no longer support certain lower margin stock
keeping units ("SKUs") in order to reduce complexity and increase
gross margins as the Company continues its focus on its top 500
SKUs in the United States. The prior year second quarter
results were also negatively impacted by inventory realignment at
certain customers. Segment operating income was $21.9 million, a 45% decrease over the prior year
period, and adjusted operating income was $31.0 million, a 24% decrease over the prior year
period, driven primarily by higher marketing investments, increased
freight and commodity costs and unfavorable mix. The
financial results for the current period as well as the prior year
second quarter results exclude the United
Kingdom operations of the Ella's Kitchen® brand, thereby
eliminating net sales of approximately $22.4
million and $19.5 million,
respectively, as these net sales are now reported as part of the
United Kingdom reportable
segment.
Hain Celestial United Kingdom
Net sales for
Hain Celestial United Kingdom increased 12% to $238.2 million over the prior year period,
reflecting 13% growth from Tilda®, 15% growth from Ella's Kitchen®
and 12% growth from Hain Daniels. Hain Daniels net sales,
adjusted for both foreign exchange and acquisitions and
divestitures2, increased 4% over the prior year period,
with strong brand performance from Hartley's®, Linda McCartney's® and Cully & Sully®
brands. Net sales for Hain Celestial United Kingdom, on a
consolidated basis, was up 5% over the prior year period, adjusted
for both foreign exchange and acquisitions and
divestitures2. Segment operating income of
$13.6 million increased 46% over the
prior year period, and adjusted operating income of $16.3 million increased 41% over the prior year
period driven by strong contribution from the Hain Daniels brands.
As discussed above, the financial results for the current
period as well as the prior year second quarter results includes
the United Kingdom operations of
the Ella's Kitchen® brand, which was previously reported as part of
the United States reportable
segment.
Hain Pure Protein
Net sales for Hain Pure
Protein increased 4% to $159.0
million over the prior year period, reflecting a 15%
increase from Plainville Farms®, 17% from FreeBird® and 7% from
Empire® Kosher brands, partially offset by a decrease in private
label sales. Segment operating income increased to
$5.3 million or 50% from the prior
year period of $3.5 million, and
adjusted operating income increased 256% to $12.6 million due to improvements in operating
expenses across the business.
Rest of World
Net sales for Rest of World
increased 12% to $107.7 million over
the prior year period, or by 6% on a constant currency basis.
Net sales for Hain Celestial Canada grew 6%, driven by strong
performance from Yves Veggie Cuisine®, Sensible Portions® and Live
Clean® brands. Net sales for Hain Celestial Europe grew 5%,
driven by the Joya® and Natumi® brands as well as own-label
products. Segment operating income increased to $10.5 million, a 41% increase over the prior year
period, and adjusted operating income increased 55% to $11.4 million over the prior year period.
Explores Divestiture of Hain Pure Protein
The Company
announced it is exploring the divestiture of its Hain Pure Protein
business. The Company cannot give any assurances that this
will result in any specific action or regarding the outcome or
timing of any action. The Company does not intend to comment
further regarding the potential divestiture at this time.
Fiscal Year 2018 Guidance
The Company
reiterated its net sales outlook and updated its Adjusted EPS and
Adjusted EBITDA guidance for fiscal year 2018 to take into account
continued investment in marketing and brand awareness, primarily in
the United States, as well as
recent freight and certain commodity price headwinds:
- 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 $340 million
to $355 million, an increase of
approximately 24% to 29% as compared to fiscal year 2017.
- Adjusted earnings per diluted share of $1.64 to $1.75,
which includes an $.08 to
$.09 benefit due to tax reform, an
increase of approximately 34% to 43% 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, accounting review and remediation costs
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.
Effective July 1, 2017, due to
changes to the Company's internal management and reporting
structure, the United Kingdom
operations of the Ella's Kitchen® brand, which was previously
included within the United States
reportable segment, is included in the United Kingdom reportable segment. The
prior period segment information contained below has been adjusted
to reflect the Company's new operating and reporting
structure.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 12/31/17
|
$
270,303
|
$
238,201
|
$
158,972
|
$
107,728
|
$
-
|
$
775,204
|
Net sales - Three
months ended 12/31/16
|
$
278,640
|
$
212,312
|
$
152,979
|
$
96,068
|
$
-
|
$
739,999
|
% change - FY'18 net
sales vs. FY'17 net sales
|
(3.0)%
|
12.2%
|
3.9%
|
12.1%
|
|
4.8%
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
|
|
|
|
Three months ended
12/31/17
|
|
|
|
|
|
|
Operating
income
|
$
21,861
|
$
13,598
|
$
5,328
|
$
10,535
|
$
(15,029)
|
$
36,293
|
Non-GAAP adjustments
(1)
|
9,109
|
2,740
|
7,287
|
866
|
5,791
|
25,793
|
Adjusted operating
income
|
$
30,970
|
$
16,338
|
$
12,615
|
$
11,401
|
$
(9,238)
|
$
62,086
|
Operating income
margin
|
8.1%
|
5.7%
|
3.4%
|
9.8%
|
|
4.7%
|
Adjusted operating
income margin
|
11.5%
|
6.9%
|
7.9%
|
10.6%
|
|
8.0%
|
|
|
|
|
|
|
|
Three months ended
12/31/16
|
|
|
|
|
|
|
Operating
income
|
$
39,928
|
$
9,321
|
$
3,541
|
$
7,477
|
$
(18,867)
|
$
41,400
|
Non-GAAP adjustments
(1)
|
668
|
2,251
|
-
|
(110)
|
7,113
|
9,922
|
Adjusted operating
income
|
$
40,596
|
$
11,572
|
$
3,541
|
$
7,367
|
$
(11,754)
|
$
51,322
|
Operating income
margin
|
14.3%
|
4.4%
|
2.3%
|
7.8%
|
|
5.6%
|
Adjusted operating
income margin
|
14.6%
|
5.5%
|
2.3%
|
7.7%
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited and
dollars in thousands)
|
United
States
|
United
Kingdom
|
Hain Pure
Protein
|
Rest of
World
|
Corporate/
Other
|
Total
|
NET
SALES
|
|
|
|
|
|
|
Net sales - Six
months ended 12/31/17
|
$
533,962
|
$
460,646
|
$
278,029
|
$
210,843
|
$
-
|
$
1,483,480
|
Net sales - Six
months ended 12/31/16
|
$
532,872
|
$
432,463
|
$
269,648
|
$
186,480
|
$
-
|
$
1,421,463
|
% change - FY'18 net
sales vs. FY'17 net sales
|
0.2%
|
6.5%
|
3.1%
|
13.1%
|
|
4.4%
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
|
|
|
|
Six months ended
12/31/17
|
|
|
|
|
|
|
Operating
income
|
$
42,722
|
$
23,199
|
$
7,570
|
$
19,532
|
$
(25,247)
|
$
67,776
|
Non-GAAP adjustments
(1)
|
11,392
|
6,075
|
8,629
|
866
|
7,047
|
34,009
|
Adjusted operating
income
|
$
54,114
|
$
29,274
|
$
16,199
|
$
20,398
|
$
(18,200)
|
$
101,785
|
Operating income
margin
|
8.0%
|
5.0%
|
2.7%
|
9.3%
|
|
4.6%
|
Adjusted operating
income margin
|
10.1%
|
6.4%
|
5.8%
|
9.7%
|
|
6.9%
|
|
|
|
|
|
|
|
Six months ended
12/31/16
|
|
|
|
|
|
|
Operating
income
|
$
58,722
|
$
17,140
|
$
2,523
|
$
12,532
|
$
(35,766)
|
$
55,151
|
Non-GAAP adjustments
(1)
|
6,194
|
3,754
|
-
|
(110)
|
13,534
|
23,372
|
Adjusted operating
income
|
$
64,916
|
$
20,894
|
$
2,523
|
$
12,422
|
$
(22,232)
|
$
78,523
|
Operating income
margin
|
11.0%
|
4.0%
|
0.9%
|
6.7%
|
|
3.9%
|
Adjusted operating
income margin
|
12.2%
|
4.8%
|
0.9%
|
6.7%
|
|
5.5%
|
|
|
|
|
|
|
|
(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. Additionally, the Company is
scheduled to present at the CAGNY 2018 Conference on Tuesday, February 20, 2018 at 5:00 PM Eastern Time. These events will be
webcast, and the accompanying presentations will be available under
the Investor Relations section of the Company's website at
www.hain.com.
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®,
Gluten Free Café™, Hain Pure Foods®, Spectrum®, Spectrum
Essentials®, Walnut Acres Organic®, Imagine®, Almond Dream®, Rice
Dream®, Soy Dream®, WestSoy®, The Greek Gods®, BluePrint®,
FreeBird®, Plainville Farms®, Empire®, Kosher Valley®, Yves Veggie
Cuisine®, 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®, Clarks™, Robertson's®, Frank Cooper's®, Linda McCartney®, Lima®,
Danival®, Happy®, 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 the Project Terra
strategic initiatives, the Company's potential divestiture of its
Hain Pure Protein business, and our future 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 ability to generate growth;
(iii) the potential divestiture of the Hain Pure Protein business,
and (iv) the Company's ability to execute Project Terra initiatives
for future growth and simplify its brand portfolio to enhance
value; and the other risks detailed from time-to-time in the
Company's reports filed with the United States Securities and
Exchange Commission, including the Annual Report on Form 10-K for
the fiscal year ended June 30, 2017,
and our quarterly reports. As a result of the foregoing and
other factors, the Company cannot provide any assurance regarding
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 adjusted for the impact of
foreign currency, acquisitions and divestitures and certain other
items, as applicable in each case, adjusted operating income,
adjusted gross margin, 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 ended
December 31, 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 it is one factor in evaluating
the amount of cash available for discretionary investments.
For the three months and six months ended
December 31, 2017 and 2016, operating
free cash flow was calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
12/31/17
|
|
12/31/16
|
|
12/31/17
|
|
12/31/16
|
|
|
(unaudited and
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
Cash flow provided by
operating activities
|
$44,864
|
|
$103,308
|
|
$25,426
|
|
$116,127
|
|
Purchases of
property, plant and equipment
|
(16,114)
|
|
(14,172)
|
|
(31,027)
|
|
(28,725)
|
|
Operating free cash
flow
|
$28,750
|
|
$
89,136
|
|
$ (5,601)
|
|
$
87,402
|
The Company's operating free cash flow was
$28.8 million for the three months
ended December 31, 2017, a decrease
of $60.4 million from the three
months ended December 31, 2016.
The Company's operating free cash flow was negative $5.6 million for the six months ended
December 31, 2017, a decrease of
$93.0 million from the six months
ended December 31, 2016.
The decrease in operating free cash flow was primarily attributable
to an increase in inventories and accounts receivable.
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 period-to-period
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 provides net sales adjusted for
constant currency, acquisitions and divestitures and certain other
items, as applicable in each case, to understand the growth rate of
net sales excluding the impact of such items. The Company's
management believes net sales adjusted for such items is useful to
investors because it enables them to better understand the growth
of our business from period-to-period.
The Company defines EBITDA as net income (a GAAP
measure) before income taxes, net interest expense, depreciation
and amortization, equity in earnings of equity method investees,
stock based compensation expense and unrealized currency
gains. 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.
For the three months and six months ended December 31, 2017 and 2016, EBITDA and Adjusted
EBITDA was calculated as follows:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
12/31/2017
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2016
|
|
(unaudited and
dollars in thousands)
|
Net Income
|
$
47,103
|
|
$
27,185
|
|
$
66,949
|
|
$
35,789
|
(Benefit)/provision
for income taxes
|
(16,369)
|
|
10,509
|
|
(7,899)
|
|
11,271
|
Interest expense,
net
|
5,827
|
|
4,426
|
|
11,447
|
|
8,780
|
Depreciation and
amortization
|
17,346
|
|
16,948
|
|
34,972
|
|
34,168
|
Equity in net income
of equity method investees
|
(194)
|
|
(38)
|
|
(205)
|
|
(222)
|
Stock based
compensation expense
|
4,158
|
|
2,531
|
|
7,322
|
|
5,235
|
Long-lived asset
impairment
|
3,449
|
|
-
|
|
3,449
|
|
-
|
Unrealized currency
gains and losses
|
(287)
|
|
(1,984)
|
|
(3,706)
|
|
(3,277)
|
EBITDA
|
61,033
|
|
59,577
|
|
112,329
|
|
91,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
expenses, restructuring, and integration charges, and
other
|
4,797
|
|
108
|
|
10,643
|
|
1,516
|
Accounting review and
remediation costs, net of insurance proceeds
|
4,451
|
|
7,005
|
|
3,093
|
|
12,966
|
Losses on terminated
chilled desserts contract
|
2,142
|
|
-
|
|
3,614
|
|
-
|
U.K. and HPP start-up
costs
|
2,381
|
|
-
|
|
3,464
|
|
-
|
Discontinuation of
Round Hill Brand
|
2,177
|
|
-
|
|
2,177
|
|
-
|
HPP Network
Distribution Redesign
|
1,952
|
|
-
|
|
1,952
|
|
-
|
Co-packer
disruption
|
1,567
|
|
-
|
|
2,740
|
|
-
|
Regulated packaging
change
|
1,007
|
|
-
|
|
1,007
|
|
-
|
Plant closure related
costs
|
700
|
|
1,804
|
|
700
|
|
1,804
|
HPP Feed Formulation
Test
|
471
|
|
-
|
|
471
|
|
-
|
Recall and other
related costs
|
-
|
|
397
|
|
-
|
|
809
|
SKU
rationalization
|
-
|
|
160
|
|
-
|
|
5,359
|
U.K. deferred
synergies due to CMA Board decision
|
-
|
|
447
|
|
-
|
|
918
|
Adjusted
EBITDA
|
$
82,678
|
|
$
69,498
|
|
$
142,190
|
|
$ 115,116
|
THE HAIN CELESTIAL
GROUP, INC.
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
December 31,
2017
|
|
June 30,
2017
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
139,216
|
|
$
146,992
|
|
Accounts receivable,
net
|
274,728
|
|
248,436
|
|
Inventories
|
502,372
|
|
427,308
|
|
Prepaid expenses and
other current assets
|
62,994
|
|
52,045
|
|
|
Total current
assets
|
979,310
|
|
874,781
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
386,077
|
|
370,511
|
Goodwill
|
|
1,083,696
|
|
1,059,981
|
Trademarks and other
intangible assets, net
|
583,911
|
|
573,268
|
Investments and joint
ventures
|
19,301
|
|
18,998
|
Other
assets
|
35,042
|
|
33,565
|
|
|
Total
assets
|
$
3,087,337
|
|
$
2,931,104
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
263,395
|
|
$
222,136
|
|
Accrued expenses and
other current liabilities
|
112,677
|
|
108,514
|
|
Current portion of
long-term debt
|
25,021
|
|
9,844
|
|
|
Total current
liabilities
|
401,093
|
|
340,494
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
742,125
|
|
740,304
|
Deferred income
taxes
|
98,127
|
|
121,475
|
Other noncurrent
liabilities
|
23,446
|
|
15,999
|
|
|
Total
liabilities
|
1,264,791
|
|
1,218,272
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
1,084
|
|
1,080
|
|
Additional paid-in
capital
|
1,145,042
|
|
1,137,724
|
|
Retained
earnings
|
935,771
|
|
868,822
|
|
Accumulated other
comprehensive loss
|
(153,351)
|
|
(195,479)
|
|
Subtotal
|
1,928,546
|
|
1,812,147
|
|
Treasury
stock
|
(106,000)
|
|
(99,315)
|
|
|
Total stockholders'
equity
|
1,822,546
|
|
1,712,832
|
|
|
Total liabilities and
stockholders' equity
|
$
3,087,337
|
|
$
2,931,104
|
THE HAIN CELESTIAL
GROUP, INC.
|
Consolidated
Statements of Income
|
(unaudited and
in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Six Months Ended
December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
775,204
|
|
$
739,999
|
|
$
1,483,480
|
|
$
1,421,463
|
Cost of
sales
|
|
630,933
|
|
601,606
|
|
1,207,606
|
|
1,173,203
|
Gross
profit
|
|
144,271
|
|
138,393
|
|
275,874
|
|
248,260
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
90,372
|
|
85,187
|
|
181,093
|
|
170,154
|
Amortization of
acquired intangibles
|
|
4,909
|
|
4,693
|
|
9,820
|
|
9,421
|
Acquisition related
expenses, restructuring and integration charges
|
|
4,797
|
|
108
|
|
10,643
|
|
568
|
Accounting review and
remediation costs, net of insurance proceeds
|
|
4,451
|
|
7,005
|
|
3,093
|
|
12,966
|
Long-lived asset
impairment
|
|
3,449
|
|
-
|
|
3,449
|
|
-
|
Operating
income
|
|
36,293
|
|
41,400
|
|
67,776
|
|
55,151
|
|
|
|
|
|
|
|
|
|
Interest and other
financing expenses, net
|
|
6,513
|
|
5,097
|
|
12,828
|
|
10,178
|
Other
(income)/expense, net
|
|
(760)
|
|
(1,353)
|
|
(3,897)
|
|
(1,865)
|
Income before income
taxes and equity-method investees
|
|
30,540
|
|
37,656
|
|
58,845
|
|
46,838
|
|
|
|
|
|
|
|
|
|
(Benefit)/provision
for income taxes
|
|
(16,369)
|
|
10,509
|
|
(7,899)
|
|
11,271
|
Equity in net income
of equity-method investees
|
|
(194)
|
|
(38)
|
|
(205)
|
|
(222)
|
Net income
|
|
$
47,103
|
|
$
27,185
|
|
$
66,949
|
|
$
35,789
|
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.45
|
|
$
0.26
|
|
$
0.65
|
|
$
0.35
|
Diluted
|
|
$
0.45
|
|
$
0.26
|
|
$
0.64
|
|
$
0.34
|
|
|
|
|
|
|
|
|
|
Shares used in the calculation
of net income per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
103,837
|
|
103,597
|
|
103,773
|
|
103,532
|
Diluted
|
|
104,440
|
|
104,204
|
|
104,379
|
|
104,225
|
THE HAIN CELESTIAL
GROUP, INC.
|
Reconciliation of GAAP Results to Non-GAAP
Measures
|
(unaudited and
in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2017 GAAP
|
Adjustments
|
2017
Adjusted
|
|
2016 GAAP
|
Adjustments
|
2016
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
775,204
|
$
-
|
$
775,204
|
|
$
739,999
|
$
-
|
$
739,999
|
Cost of
sales
|
|
630,933
|
(12,396)
|
618,537
|
|
601,606
|
(693)
|
600,913
|
Gross
profit
|
|
144,271
|
12,396
|
156,667
|
|
138,393
|
693
|
139,086
|
Operating expenses
(a)
|
|
98,730
|
(4,148)
|
94,582
|
|
89,880
|
(2,115)
|
87,765
|
Acquisition related
expenses, restructuring and
integration charges
|
|
4,797
|
(4,797)
|
-
|
|
108
|
(108)
|
-
|
Accounting review and
remediation costs, net of
insurance proceeds
|
|
4,451
|
(4,451)
|
-
|
|
7,005
|
(7,005)
|
-
|
Operating
Income
|
|
36,293
|
25,793
|
62,086
|
|
41,400
|
9,921
|
51,321
|
Interest and other
expenses (income), net (b)
|
|
5,753
|
286
|
6,039
|
|
3,744
|
1,984
|
5,728
|
(Benefit)/provision
for income taxes
|
|
(16,369)
|
29,931
|
13,562
|
|
10,509
|
2,215
|
12,724
|
Net income
|
|
47,103
|
(4,424)
|
42,679
|
|
27,185
|
5,722
|
32,907
|
Earnings per share -
diluted
|
|
0.45
|
(0.04)
|
0.41
|
|
0.26
|
0.05
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2017
|
|
|
|
Three Months
Ended
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Losses on terminated
chilled desserts contract
|
|
|
$
2,142
|
|
|
|
$
-
|
|
U.K. and HPP Start-up
costs
|
|
|
2,381
|
|
|
|
-
|
|
Inventory costs for
products discontinued or having
redesigned packaging
|
|
|
1,007
|
|
|
|
160
|
|
Discontinuation of
Round Hill Brand
|
|
|
2,177
|
|
|
|
-
|
|
Recall and other
related costs
|
|
|
-
|
|
|
|
(110)
|
|
U.K. deferred
synergies due to CMA Board decision
|
|
|
-
|
|
|
|
179
|
|
Plant closure related
costs
|
|
|
700
|
|
|
|
464
|
|
Co-packer
disruption
|
|
|
1,567
|
|
|
|
-
|
|
HPP feed formulation
test
|
|
|
471
|
|
|
|
-
|
|
HPP network
distribution redesign
|
|
|
1,952
|
|
|
|
-
|
|
Cost of
sales
|
|
|
12,396
|
|
|
|
693
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
12,396
|
|
|
|
693
|
|
|
|
|
|
|
|
|
|
|
Plant closure related
costs
|
|
|
-
|
|
|
|
1,340
|
|
U.K. deferred
synergies due to CMA Board decision
|
|
|
-
|
|
|
|
268
|
|
Recall and other
related costs
|
|
|
-
|
|
|
|
507
|
|
Stock Compensation
Acceleration
|
|
|
699
|
|
|
|
-
|
|
Long-lived asset
impairment charge associated with
plant closure
|
|
|
3,449
|
|
|
|
-
|
|
Operating expenses
(a)
|
|
|
4,148
|
|
|
|
2,115
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
fees and expenses, integration and restructuring charges,
including severance
|
|
|
4,797
|
|
|
|
108
|
|
Acquisition related
expenses, restructuring and
integration charges
|
|
|
4,797
|
|
|
|
108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting review and
remediation costs
|
|
|
4,451
|
|
|
|
7,005
|
|
Accounting review and
remediation costs, net of
insurance proceeds
|
|
|
4,451
|
|
|
|
7,005
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
25,793
|
|
|
|
9,921
|
|
|
|
|
|
|
|
|
|
|
Unrealized currency
(gains) and losses
|
|
|
(286)
|
|
|
|
(1,984)
|
|
Interest and other
expenses (income), net (b)
|
|
|
(286)
|
|
|
|
(1,984)
|
|
|
|
|
|
|
|
|
|
|
Income tax related
adjustments (c)
|
|
|
(29,931)
|
|
|
|
(2,215)
|
|
(Benefit)/provision
for income taxes
|
|
|
(29,931)
|
|
|
|
(2,215)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
(4,424)
|
|
|
|
$
5,722
|
|
|
|
|
|
|
|
|
|
|
(a)
Operating expenses include amortization of acquired intangibles,
selling, general, and administrative expenses and long-lived asset
impairment.
|
(b)
Interest and other expenses, net include interest and other
financing expenses, net and other (income)/expense, net.
|
(c)
Included within the income tax related adjustments is the impact of
the U.S. tax legislation enacted in December 2017. These tax
law changes resulted in a net income tax benefit of $24.1
million, consisting of a $29.3 million
reduction in the Company's net deferred tax liabilities as a result
of the lowering of the U.S. corporate income tax rate, partially
offset by an estimated
$5.2 million transition tax imposed on the
deemed repatriation of deferred foreign income.
|
THE HAIN CELESTIAL
GROUP, INC.
|
Reconciliation of GAAP Results to Non-GAAP
Measures
|
(unaudited and
in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
December 31,
|
|
|
2017 GAAP
|
Adjustments
|
2017
Adjusted
|
|
2016 GAAP
|
Adjustments
|
2016
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
1,483,480
|
$
-
|
$
1,483,480
|
|
$
1,421,463
|
$
-
|
$
1,421,463
|
Cost of
sales
|
|
1,207,606
|
(16,124)
|
1,191,482
|
|
1,173,203
|
(6,263)
|
1,166,940
|
Gross
profit
|
|
275,874
|
16,124
|
291,998
|
|
248,260
|
6,263
|
254,523
|
Operating expenses
(a)
|
|
194,362
|
(4,148)
|
190,214
|
|
179,575
|
(3,574)
|
176,001
|
Acquisition related
expenses, restructuring and
integration charges
|
|
10,643
|
(10,643)
|
-
|
|
568
|
(568)
|
-
|
Accounting review and
remediation costs, net of
insurance proceeds
|
|
3,093
|
(3,093)
|
-
|
|
12,966
|
(12,966)
|
-
|
Operating
Income
|
|
67,776
|
34,009
|
101,785
|
|
55,151
|
23,371
|
78,522
|
Interest and other
expenses, net (b)
|
|
8,931
|
3,705
|
12,636
|
|
8,313
|
3,277
|
11,590
|
(Benefit)/provision
for income taxes
|
|
(7,899)
|
30,903
|
23,004
|
|
11,271
|
8,071
|
19,342
|
Net income
|
|
66,949
|
(600)
|
66,349
|
|
35,789
|
12,023
|
47,812
|
Earnings per share -
diluted
|
|
0.64
|
(0.01)
|
0.64
|
|
0.34
|
0.12
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
December 31, 2017
|
|
|
|
Six Months Ended
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Losses on terminated
chilled desserts contract
|
|
|
$
3,614
|
|
|
|
$
-
|
|
U.K. and HPP Start-up
costs
|
|
|
3,464
|
|
|
|
-
|
|
Inventory costs for
products discontinued or having
redesigned packaging
|
|
|
1,007
|
|
|
|
5,359
|
|
Discontinuation of
Round Hill Brand
|
|
|
2,177
|
|
|
|
-
|
|
Recall and other
related costs
|
|
|
-
|
|
|
|
73
|
|
U.K. deferred
synergies due to CMA Board decision
|
|
|
-
|
|
|
|
367
|
|
Plant closure related
costs
|
|
|
700
|
|
|
|
464
|
|
Co-packer
disruption
|
|
|
2,740
|
|
|
|
-
|
|
HPP feed formulation
test
|
|
|
471
|
|
|
|
-
|
|
HPP network
distribution redesign
|
|
|
1,952
|
|
|
|
-
|
|
Cost of
sales
|
|
|
16,124
|
|
|
|
6,263
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
16,124
|
|
|
|
6,263
|
|
|
|
|
|
|
|
|
|
|
Plant closure related
costs
|
|
|
-
|
|
|
|
1,340
|
|
U.K. deferred
synergies due to CMA Board decision
|
|
|
-
|
|
|
|
551
|
|
Recall and other
related costs
|
|
|
-
|
|
|
|
736
|
|
Tilda Fire Insurance
Recovery Costs and other
Setup/Integration Costs
|
|
|
-
|
|
|
|
947
|
|
Stock compensation
acceleration
|
|
|
699
|
|
|
|
-
|
|
Long-lived asset
impairment charge associated with
plant closure
|
|
|
3,449
|
|
|
|
-
|
|
Operating expenses
(a)
|
|
|
4,148
|
|
|
|
3,574
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
fees and expenses, integration and
restructuring charges, including severance
|
|
|
10,643
|
|
|
|
568
|
|
Acquisition related
expenses, restructuring and
integration charges
|
|
|
10,643
|
|
|
|
568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting review and
remediation costs, net of
insurance proceeds
|
|
|
3,093
|
|
|
|
12,966
|
|
Accounting review and
remediation costs, net of insurance proceeds
|
|
|
3,093
|
|
|
|
12,966
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
34,009
|
|
|
|
23,371
|
|
|
|
|
|
|
|
|
|
|
Unrealized currency
(gains) and losses
|
|
|
(3,705)
|
|
|
|
(3,277)
|
|
Interest and other
expenses, net (b)
|
|
|
(3,705)
|
|
|
|
(3,277)
|
|
|
|
|
|
|
|
|
|
|
Income tax related
adjustments (c)
|
|
|
(30,903)
|
|
|
|
(8,071)
|
|
(Benefit)/provision
for income taxes
|
|
|
(30,903)
|
|
|
|
(8,071)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
(600)
|
|
|
|
$
12,023
|
|
|
|
|
|
|
|
|
|
|
(a) Operating expenses include
amortization of acquired intangibles, selling, general, and
administrative expenses and long-lived asset impairment.
|
(b) Interest and other expenses, net
include interest and other financing expenses, net and other
(income)/expense, net.
|
(c) Included within the income tax
related adjustments is the impact of the U.S. tax legislation
enacted in December 2017. These tax law changes resulted in a
net income tax benefit of $24.1
million, consisting of a $29.3 million
reduction in the Company's net deferred tax liabilities as a result
of the lowering of the U.S. corporate income tax rate, partially
offset by an estimated
$5.2 million transition tax imposed on the
deemed repatriation of deferred foreign income.
|
THE HAIN CELESTIAL
GROUP, INC.
|
Net Sales Growth
at Constant Currency
|
(unaudited and in
thousands)
|
|
|
|
|
|
|
|
|
|
Hain
Consolidated
|
|
United
Kingdom
|
|
Rest of
World
|
|
|
Net sales -
Three months ended 12/31/17
|
$
775,204
|
|
$
238,201
|
|
$
107,728
|
|
|
Impact of
foreign currency exchange
|
(21,148)
|
|
(14,987)
|
|
(6,161)
|
|
|
Net sales on a
constant currency basis -
Three months ended 12/31/17
|
$
754,056
|
|
$
223,214
|
|
$
101,567
|
|
|
|
|
|
|
|
|
|
|
Net sales - Three
months ended 12/31/16
|
$
739,999
|
|
$
212,312
|
|
$
96,068
|
|
|
Net sales growth on a
constant currency basis
|
1.9%
|
|
5.1%
|
|
5.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales Growth
at Constant Currency and Adjusted for Acquisitions, Divestitures
and Other
|
|
|
|
|
|
|
|
|
|
|
Hain
Consolidated
|
|
United
States
|
|
United
Kingdom
|
|
Rest of
World
|
Net sales on a
constant currency basis -
Three months ended 12/31/17
|
$
754,056
|
|
$
270,303
|
|
$
223,214
|
|
$
101,567
|
|
|
|
|
|
|
|
|
Net sales - Three
months ended 12/31/16
|
$
739,999
|
|
$
278,640
|
|
$
212,312
|
|
$
96,068
|
Acquisitions
|
4,102
|
|
-
|
|
3,899
|
|
203
|
Divestitures
|
(5,279)
|
|
(1,986)
|
|
(3,293)
|
|
-
|
SKU
Rationalization
|
(4,362)
|
|
(4,362)
|
|
-
|
|
-
|
Inventory
Realignment
|
13,514
|
|
13,514
|
|
-
|
|
-
|
Net sales on a
constant currency basis adjusted
for acquisitions, divestitures and other - Three
months ended
12/31/16
|
$
747,974
|
|
$
285,806
|
|
$
212,918
|
|
$
96,271
|
Net sales
growth on a constant currency
basis adjusted for acquisitions, divestitures
and other
|
0.8%
|
|
(5.4)%
|
|
4.8%
|
|
5.5%
|
|
|
|
|
|
|
|
|
|
Hain
Daniels
|
|
Hain Celestial
Canada
|
|
Hain Celestial
Europe
|
|
|
Net sales growth -
Three months ended 12/31/17
|
11.6%
|
|
11.2%
|
|
14.9%
|
|
|
Impact
of foreign currency exchange
|
(7.2)%
|
|
(5.4)%
|
|
(9.5)%
|
|
|
Impact of
acquisitions
|
(2.6)%
|
|
0.0%
|
|
0.0%
|
|
|
Impact of
divestitures
|
2.2%
|
|
0.0%
|
|
0.0%
|
|
|
Net sales on a
constant currency basis adjusted
for acquisitions, divestitures and other - Three
months ended
12/31/17
|
4.0%
|
|
5.8%
|
|
5.3%
|
|
|
1 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 are
provided herein.
2 Refer to "Net Sales Growth at
Constant Currency and Adjusted for Acquisitions, Divestitures and
Other" provided herein.
View original content with
multimedia:http://www.prnewswire.com/news-releases/hain-celestial-reports-second-quarter-fiscal-year-2018-financial-results-300594793.html
SOURCE The Hain Celestial Group, Inc.