Sales Reach $210 Million on 30% Growth
GAAP Net Income of $0.23 Per Share at $9 Million Grew 31%
Adjusted Earnings at $0.25 Per Share Grew 39%
MELVILLE, N.Y., Nov. 2 /PRNewswire-FirstCall/ -- The Hain Celestial Group,
Inc. (Nasdaq: HAIN), a leading natural and organic food and personal care
products company, today reported results for the first quarter ended September
30, 2006. The Company reported net sales of $210.2 million, a 30% increase
compared with $161.1 million in the prior year first quarter. GAAP net income
for the first quarter was $9.0 million, or $0.23 per diluted share, a 31%
increase over the prior year's $6.9 million, or $0.18 per diluted share.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050324/NYTH131 )
Adjusted earnings in the quarter totaled $0.25 per share. The reported
results include $1.1 million ($0.7 million after tax) of previously announced
start-up costs at the Company's West Chester Frozen Foods Facility, a gain of
$2.5 million ($1.1 million after tax) from the sale of the Company's Biomarche
fresh produce operation in Belgium, and a charge of $2.2 million ($1.4 million
after tax) for an unfavorable decision by the German government regarding
value added tax on all non-dairy beverage products.
"Our fiscal year 2007 is off to an excellent start. During the first
quarter we achieved strong sales from Earth's Best(R), Garden of Eatin'(R),
Rice Dream(R), Soy Dream(R), WestSoy(R), Westbrae(R), Ethnic Gourmet(TM),
Casbah(R), FreeBird(TM) and JASON(R). We also drove strong results from our
brands in Canada, and from our recent acquisitions," said Irwin D. Simon,
President and Chief Executive Officer of Hain Celestial. "Rising consumer
demand for natural and organic food and personal care products continues
across many distribution channels in North America, Europe and the United
Kingdom, enabling us to realize solid top and bottom line growth at the
Company. We continue to integrate our recent acquisitions into our existing
infrastructure, and look forward to continuing to achieve further margin
efficiencies, general and administrative cost savings, and to improving our
return on equity."
The Company reported gross margin of 28.1% in the first quarter, compared
to 28.5% in the prior year's first quarter. Adjusted gross margin was 29.6%
excluding start-up costs at the Company's West Chester Frozen Foods Facility
and the Company's lower margin business in the UK. The Company continues to
operate in an environment of high input costs, and the Company's recently
implemented price increase effective in September 2006 is expected to benefit
the Company in the second quarter.
Selling, general and administrative expense for the first quarter was
19.9%, compared to 21.0% a year ago as the Company continues to benefit from
its increasing scale and disciplined strategy for building effective marketing
programs.
Interest expense in the quarter was $2.5 million and interest income was
$0.6 million. On August 31, 2006, the Company sold its Biomarche fresh produce
operation in Belgium, resulting in a pre-tax gain of $2.5 million. The gain
was reduced by taxes of $1.4 million to a net gain of $1.1 million, with the
effective tax rate on the gain unusually high as $3.3 million of goodwill
allocated to the Biomarche operation and charged off against the gain is not
tax deductible. Also in the quarter, the Company incurred a pre-tax charge of
$2.2 million ($1.4 million after tax) resulting from an unfavorable ruling in
Germany regarding value added tax (VAT) on non-dairy beverages sold by all
producers in Germany. This decision by the German government overturns what
was previously a favorable decision handed down shortly after our acquisition
of the non-dairy operation in Germany in 2004. There will be no impact on
future operations as VAT is a pass-through tax. These items are included in
interest and other expense, net.
The Company's effective tax rate for the quarter was 38.6%, excluding the
taxes provided on the Biomarche gain and from the VAT charge. The effective
tax rate in the quarter therefore appears in the financial statements at a
higher rate of 41.6%.
Average diluted shares outstanding in the quarter were 40.0 million, an
increase of 2.5 million shares, or 6.6% over the first quarter of the prior
year. The increase resulted from additional shares issued during fiscal year
2006 for acquisitions, employee stock option exercises, and higher equivalent
shares included in the earnings per share calculation, resulting from the
Company's higher share price.
The Company's balance sheet remains strong with $196.6 million in working
capital with a current ratio of 2.8 at September 30, 2006. Debt as a
percentage of equity was 24.1% with equity at $630.3 million. The number of
days in the Company's cash conversion cycle was 67. Operating free cash flow
was $16.3 million for the first quarter this year and $58.1 million for the
trailing twelve months ended September 30, 2006.
"We continue to focus on driving efficiencies and reinvesting in our
business, most recently at our West Chester Frozen Foods Facility, where we
have expanded capacity and production for our Ethnic Gourmet and Rosetto
brands and expect to further increase our production," commented Irwin Simon.
"With our first quarter completed, we continue to see positive trends in the
second quarter with increased demand for natural and organic products and
strong consumption for our products," concluded Irwin Simon.
Fiscal Year 2007 Guidance
The Company reconfirmed its fiscal year 2007 sales guidance of $880
million to $900 million and earnings per share of $1.15 to $1.19.
Webcast and Upcoming Events
Hain Celestial will host a conference call and webcast at 4:15 PM Eastern
Standard Time today to review its first quarter fiscal year 2007 results. On
November 16, 2006, the Company is scheduled to present at the Lehman Brothers
Small Cap Conference. These events will be available under the Investor
Relations section of the Company's website at www.hain-celestial.com.
The Hain Celestial Group
The Hain Celestial Group (Nasdaq: HAIN), headquartered in Melville, NY, is
a leading natural and organic food and personal care products company in North
America and Europe. Hain Celestial participates in almost all natural food
categories with well-known brands that include Celestial Seasonings(R), Terra
Chips(R), Garden of Eatin'(R), Health Valley(R), WestSoy(R), Earth's Best(R),
Arrowhead Mills(R), DeBoles(R), Hain Pure Foods(R), FreeBird(TM),
Hollywood(R), Spectrum Naturals(R), Spectrum Essentials(R), Walnut Acres
Organic(TM), Imagine Foods(R), Rice Dream(R), Soy Dream(R), Rosetto(R), Ethnic
Gourmet(TM), Yves Veggie Cuisine(R), Linda McCartney(R), Lima(R), Grains
Noirs(R), Natumi(R), JASON(R), Zia(R) Natural Skincare and Queen Helene(R).
For more information, visit www.hain-celestial.com.
Safe Harbor Statement
This press release contains forward-looking statements within and
constitutes a "Safe Harbor" statement under the Private Securities Litigation
Act of 1995. Except for the historical information contained herein, the
matters discussed in this press release are forward-looking statements that
involve known and unknown risks and uncertainties, which could cause our
actual results to differ materially from those described in the forward-
looking statements. These risks include but are not limited to general
economic and business conditions; the ability to implement business and
acquisition strategies and integrate acquisitions; competition; retention of
key personnel; compliance with government regulations and other risks detailed
from time-to-time in the Company's reports filed with the Securities and
Exchange Commission, including the report on Form 10-K for the fiscal year
ended June 30, 2006. The forward-looking statements made in this press release
are current as of the date of this press release, and the Company does not
undertake any obligation to update forward-looking statements.
THE HAIN CELESTIAL GROUP, INC.
Consolidated Balance Sheets
(In thousands)
September 30, June 30,
2006 2006
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $78,143 $48,875
Trade receivables, net 95,215 80,764
Inventories 111,440 105,883
Deferred income taxes 3,843 2,986
Other current assets 17,291 21,968
Total current assets 305,932 260,476
Property, plant and equipment, net 113,982 119,830
Goodwill, net 416,836 421,002
Trademarks and other intangible
assets, net 62,260 61,626
Other assets 16,001 14,750
Total assets $915,011 $877,684
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $100,281 $81,894
Income taxes payable 8,175 3,083
Current portion of long-term debt 840 1,065
Total current liabilities 109,296 86,042
Deferred income taxes 19,086 19,086
Long-term debt, less current portion 151,172 151,229
Minority Interest 5,184 4,926
Total liabilities 284,738 261,283
Stockholders' equity:
Common stock 398 396
Additional paid-in capital 450,657 446,319
Retained earnings 174,068 165,034
Treasury stock (12,745) (12,745)
Foreign currency translation
adjustment 17,895 17,397
Total stockholders' equity 630,273 616,401
Total liabilities and
stockholders' equity $915,011 $877,684
THE HAIN CELESTIAL GROUP, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended September 30,
2006 2005
(Unaudited)
Net sales $210,207 $161,097
Cost of Sales 151,065 115,248
Gross profit 59,142 45,849
SG&A expenses 41,846 33,869
Operating income 17,296 11,980
Interest expense and other, net 1,820 868
Income before income taxes 15,476 11,112
Income tax provision 6,442 4,221
Net income $9,034 $6,891
Basic per share amounts $0.23 $0.19
Diluted per share amounts $0.23 $0.18
Weighted average common shares
outstanding:
Basic 38,746 36,636
Diluted 40,023 37,560
THE HAIN CELESTIAL GROUP, INC.
Consolidated Statements of Operations With Adjustments
Reconciliation of GAAP Results to Non-GAAP Presentation
(in thousands, except per share amounts)
Three Months Ended September 30,
2006 GAAP Adjustments 2006 2005
Adjusted Adjusted
(Unaudited)
Net sales $210,207 $210,207 $161,097
Cost of Sales 151,065 $(1,108) (1) 149,957 115,248
Gross profit 59,142 1,108 60,250 45,849
SG&A expenses 41,846 41,846 33,869 (4)
Operating income 17,296 1,108 18,404 11,980
Interest and other expenses,
net 1,820 264 (2) 2,084 868
Income before income taxes 15,476 844 16,320 11,112
Income tax provision 6,442 (146) (3) 6,296 4,221
Net income $9,034 $990 $10,024 $6,891
Basic per share amounts $0.23 $0.03 $0.26 $0.19
Diluted per share amounts $0.23 $0.02 $0.25 $0.18
Weighted average common
shares outstanding:
Basic 38,746 38,746 38,746 36,636
Diluted 40,023 40,023 40,023 37,560
(1) Start-up costs at the Company's West Chester Frozen Foods Facility.
(2) The adjustment of $264 includes $2,510 pre-tax gain on the sale of
Biomarche, and $2,246 pre-tax charge for the unfavorable
decision by the German government regarding the application of VAT on
non-dairy beverages.
(3) Tax adjustments include a tax provision of $1,433 on the gain on sale
of Biomarche, net of tax benefits of $430 for the
start-up costs at the Company's West Chester Frozen Foods Facility
and $857 on the charge for VAT.
(4) SG&A in the three months ended September 30, 2005 has been adjusted to
reflect the $774 charge ($472 after tax) in connection
with the requirements of SFAS 123R to record compensation expense for
the contractual requirement to grant stock options.
SOURCE The Hain Celestial Group, Inc.
-0- 11/02/2006
/CONTACT: Ira Lamel or Mary Anthes, The Hain Celestial Group, Inc.,
+1-631-730-2200; Jeremy Fielding or David Lilly, Kekst and Company,
+1-212-521-4800 /
/Photo: http://www.newscom.com/cgi-bin/prnh/20050324/NYTH131
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com /
/Web site: http://www.hain-celestial.com /
(HAIN)
CO: The Hain Celestial Group, Inc.
ST: New York
IN: FOD SUP
SU: ERN CCA ERP
GD
-- NYTH218 --
5308 11/02/2006 16:00 EST http://www.prnewswire.com
