Hain Celestial Group: Q1 results fiscal year 2012
The Hain Celestial Group, Inc., a leading natural and organic products company providing consumers with A Healthy Way of Life™, reported its results for the first quarter ended September 30, 2011.
Net sales up 13.3% over the comparable period in fiscal year 2011
GAAP net income up 28.5%; adjusted net income up 19.9%
GAAP operating income increased 23.3%, up 63 basis points; adjusted operating income increased 20.7%, up 52 basis points
Diluted GAAP EPS of $0.26; diluted adjusted EPS of $0.29
Operating free cash flow improved by $35.3 million in the three months, reaching $82.5 million for the 12 months ended September 30, 2011
"We have seen a strong start to our fiscal year as we continue to experience favorable growth trends across our branded portfolio, despite the challenging economy," said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. "Consumption trends improved year-over-year driven by consumers seeking out our natural and organic products. The strength of our existing portfolio coupled with our very exciting recent acquisitions of Daniels Group in the United Kingdom and the Europe's Best® brand in Canada give us a solid international platform for growth. With our leading brands in on-trend categories, our product innovation capabilities and the depth of our management team and existing infrastructure, we believe our global operations will achieve our growth and profitability expectations. With our newly established international scale, we look for increased growth and profit contributions outside the United States alongside our achievements in the United States," concluded Irwin Simon.
Net sales in the first quarter of fiscal year 2012 increased 13.3% to $292.4 million as compared to net sales of $258.0 million in the first quarter of fiscal year 2011. The Company's growth was driven by increased consumption in core categories, strong contributions from its Earth's Best®, MaraNatha®, Spectrum®, The Greek Gods®, Sensible Portions®, Linda McCartney® and personal care brands, and expanded distribution principally in the grocery and mass channels.
The Company earned $11.7 million in net income as compared to $9.1 million in the first quarter of the prior year and reported earnings per diluted share of $0.26 as compared to $0.21 in the first quarter of the prior year. Adjusted earnings per diluted share were $0.29 on adjusted net income of $13.0 million in the fiscal 2012 first quarter as compared to $0.25 per share on adjusted net income of $10.8 million in the prior year first quarter. Adjusted net income and earnings per diluted share improved 19.9% and 16.0%, respectively, over the prior year first quarter. Adjusted net income for these periods excludes only acquisition related items.
Gross profit in the first quarter improved 13 basis points to 27.3% of net sales, as compared to the prior year first quarter of 27.2%, on the strength of a favorable mix of product sales worldwide and productivity savings, which helped offset input cost inflation of approximately 4.5% over the prior year first quarter. In the first quarter, selling, general and administrative expenses improved by 55 basis points to 18.9% of net sales when compared to the prior year first quarter of 19.4%. Operating margin was 7.8% of net sales, an improvement of 63 basis points on a GAAP basis and 52 basis points on an adjusted basis, as compared to the prior year first quarter.
Fiscal Year 2012 Company Estimates
The Company reconfirmed its annual guidance for fiscal year 2012, which it raised on October 25, 2011 in connection with its recent acquisitions of Daniels Group and the Europe's Best® brand:
Total net sales of $1.455 billion to $1.480 billion
Earnings of $1.63 to $1.73 per diluted share
Guidance is provided on a non-GAAP basis and therefore excludes acquisition and integration expenses that may be incurred, which the Company will identify when it reports its financial results. Historically, the Company's sales and earnings have been strongest in its second and third quarters.
The Hain Celestial Group, Inc.
The Hain Celestial Group, headquartered in Melville, NY, is a leading natural and organic products company in North America and Europe. Hain Celestial participates in many natural categories with well-known brands that include Celestial Seasonings®, Earth's Best®, Terra®, Garden of Eatin'®, Sensible Portions®, Health Valley®, Arrowhead Mills®, MaraNatha®, SunSpire®, DeBoles®, Gluten Free Cafe™, Hain Pure Foods®, Hollywood®, Spectrum Naturals®, Spectrum Essentials®, Walnut Acres Organic®, Imagine®, Almond Dream®, Rice Dream®, Soy Dream®, WestSoy®, The Greek Gods®, Ethnic Gourmet®, Yves Veggie Cuisine®, Europe's Best®, New Covent Garden Soup Co.®, Johnson's Juice Co.®, Farmhouse Fare®, Linda McCartney®, Daily Bread™, Lima®, Danival®, GG UniqueFiber®, Grains Noirs®, Natumi®, JASON®, Zia® Natural Skincare, Avalon Organics®, Alba Botanica®, Queen Helene®, Earth's Best TenderCare® and Martha Stewart Clean™. Hain Celestial has been providing "A Healthy Way of Life™" since 1993. For more information, visit www.hain-celestial.com.