3.11.2006: Meldung: The Hain Celestial Group, Inc.: First Quarter 2007 Results
Thursday November 2, 4:00 pm ET
- 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 / The Hain Celestial Group, Inc., 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.
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.
Source: The Hain Celestial Group, Inc.