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Hain Celestial Group: Third Quarter Results
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The Hain Celestial Group, Inc., a leading natural and organic products company, today reported results for the third quarter ended March 31, 2009. The Company reported third quarter net sales of $267.7 million versus the prior year's third quarter sales of $264.6 million. Sales in the quarter would have been $12.7 million higher without the effects of foreign exchange rate changes between the periods, or 6% higher on a year-over-year basis. Net loss in the third quarter was $41.2 million, or $1.01 per share, on a GAAP basis, driven by the Company taking an estimated after-tax non-cash impairment charge of $48.4 million against goodwill and intangible assets related to the Company's European and Hain Pure Protein's (HPP) reporting units. On a non-GAAP basis(1), adjusted net income was $12.5 million, or $0.31 per share, in the third quarter this year.
"Hain Celestial's U.S. business delivered a solid quarter as health conscious consumers remain committed to natural and organic products even in tough economic times. The macroeconomic conditions in this past quarter -- and particularly at the beginning of the calendar year -- led to sales being challenged by reduced inventories and by consumers using their pantry goods. However, we believe that, as the quarter progressed, our strong brand portfolio and innovative range of healthy products offered through various distribution channels at reasonable prices provided consumers with the core goods they need for a healthy lifestyle. Their response was encouraging. Our results also reflect the sharp emphasis we continue to place on cost containment and productivity initiatives," said Irwin D. Simon, President and Chief Executive Officer of Hain Celestial.
"At the same time, we continue to improve our business, and focus on the challenges in our European and protein operations. In Europe, we are encouraged by recent business wins at our Fakenham facility in the United Kingdom in light of the challenges we have faced, including the under-utilization of the plant. New volume will be coming into the plant starting very soon as we produce new frozen meat-free and dessert products. In late April, HPP's Kosher Valley(TM) brand commenced production of natural, antibiotic-free, vegetarian-fed kosher poultry products at the Plainville facility," commented Irwin Simon.
On a GAAP basis gross margin was 23.5% in the third quarter versus 26.0% in the prior year quarter. If not for the Company's lower margin HPP joint venture with its current mix of commodity versus antibiotic-free mix, gross margin would have been 485 basis points higher this year at 28.3%, versus 126 basis points higher last year at 27.2%. The Company is in the process of de-emphasizing sales of conventional turkey and chicken products while it focuses on antibiotic-free products to improve its mix of sales for future periods.
Adjusted selling, general and administrative expenses declined as a percentage of sales to 17.8% in this year's quarter, compared to 18.4% in the prior year quarter. This reduction comes from the Company's continued successful focus on its cost structure and from productivity initiatives. On a GAAP basis the selling, general and administrative expenses as a percentage of sales was 18.7% in this year's quarter compared to 19.4% in the prior year quarter.
Interest and other expense, net includes interest expense of $3.4 million in the third quarter this year compared to $3.2 million for the prior year quarter. Also included is the minority interest share of the results of our protein operations, amounting to $(3.4) million in this year's quarter compared to $0.3 million in the prior year quarter. The remaining items of other expense in the current year quarter include foreign exchange and the settlement of a pre-acquisition contingency which could not be estimated or accrued at the time of the acquisition in 2003.
The Company recorded an estimated non-cash impairment charge aggregating $52.6 million ($48.4 million after-tax, or $1.19 per share) from the write-down of goodwill and other intangibles in its European and its Hain Pure Protein operations. This non-cash charge had no impact on the Company's compliance with financial covenants under its debt obligations.
The Company's balance sheet remains strong, with $255.6 million in working capital and a current ratio of 2.8 at March 31, 2009. Debt as a percentage of equity was 42.5%, with equity at $685.7 million. Operating free cash flow in the third quarter this year was $3.7 million compared to $6.8 million in the prior year quarter. The Company's cash balance at March 31, 2009 was $27.8 million after reducing outstanding debt by $28.5 million in the quarter.
"In an exceptionally tough operating environment, the Company drove growth in the natural, mass market and specialty channels, while we delivered on productivity and efficiencies. These initiatives, which, coupled with strategic pricing actions, position the Company for future growth," concluded Irwin Simon.
Fiscal Year 2009 Guidance
The Company updated its fiscal year 2009 guidance and narrowed the range to $1.162 to $1.170 billion in sales and $1.25 to $1.30 earnings per share excluding the impairment and other adjustments. The earnings guidance is before deducting $0.10 per share in stock compensation expense to amortize equity grants.
Webcast
Hain Celestial will host a conference call and webcast at 4:30 PM Eastern Daylight Time today to review its third quarter fiscal year 2009 results. The event will be webcast and available under the Investor Relations section of the Company's website at www.hain-celestial.com.
The Hain Celestial Group
The Hain Celestial Group, headquartered in Melville, NY, is a leading natural and organic 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(R), Garden of Eatin'(R), Health Valley(R), WestSoy(R), Earth's Best(R), Arrowhead Mills(R), MaraNatha(R), SunSpire(R), DeBoles(R), Hain Pure Foods(R), FreeBird(TM), Plainville Farms(R), Kosher Valley(TM), Hollywood(R), Spectrum Naturals(R), Spectrum Essentials(R), Walnut Acres Organic(R), Imagine(R), Rice Dream(R), Soy Dream(R), Rosetto(R), Ethnic Gourmet(R), Yves Veggie Cuisine(R), Granose(R), Realeat(R), Linda McCartney(R), Daily Bread(TM), Lima(R), Grains Noirs(R), Natumi(R), JASON(R), Zia(R) Natural Skincare, Avalon Organics(R), Alba Botanica(R), Queen Helene(R), Tushies(R) and TenderCare(R). Hain Celestial has been providing "A Healthy Way of Life(TM)" since 1993. 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; changes in estimates or judgments related to our impairment analysis of goodwill and other intangible assets; our ability to implement our business and acquisition strategy; our ability to effectively integrate our acquisitions; competition; availability and retention of key personnel; our reliance on third party distributors, manufacturers and suppliers; our ability to maintain existing contacts and secure new customers; changes in customer preferences and consumption; international sales and operations; changes in fuel and commodity costs; the impact of foreign exchange; the resolution of the SEC inquiry and litigation regarding our stock option practices; changes in, or the failure to comply with, government regulations; and other risks detailed from time-to-time in the Company's reports filed with the SEC, including the annual report on Form 10-K for the fiscal year ended June 30, 2008. As a result of the foregoing and other factors, no assurance can be given as to future results, levels of activity and achievements and neither the Company nor any person assumes responsibility for the accuracy and completeness of these statements.
Non-GAAP Financial Measures
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 only be read in connection with the Company's condensed consolidated statements of earnings presented in accordance with GAAP.
(1) See Reconciliation of GAAP Results to Non-GAAP Presentation Table
THE HAIN CELESTIAL GROUP, INC.
Consolidated Balance Sheets
(In thousands)
March 31, June 30,
2009 2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $27,784 $58,513
Trade receivables, net 128,595 118,867
Inventories 204,599 175,667
Deferred income taxes 13,277 12,512
Other current assets 26,401 27,482
Total current assets 400,656 393,041
Property, plant and equipment, net 142,336 159,089
Goodwill, net 454,197 550,238
Trademarks and other intangible assets, net 154,366 136,861
Other assets 18,714 20,155
Total assets $1,170,269 $1,259,384
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $140,045 $145,186
Income taxes payable 4,735 907
Current portion of long-term debt 289 222
Total current liabilities 145,069 146,315
Deferred income taxes 17,198 26,524
Other noncurrent liabilities 2,158 5,012
Long-term debt, less current portion 291,044 308,220
Total liabilities 455,469 486,071
Minority Interest 29,134 30,502
Stockholders' equity:
Common stock 415 411
Additional paid-in capital 500,474 488,650
Retained earnings 211,020 237,008
Treasury stock (15,518) (15,473)
Accumulated other comprehensive income (loss) (10,725) 32,215
Total stockholders' equity 685,666 742,811
Total liabilities and stockholders' equity $1,170,269 $1,259,384
THE HAIN CELESTIAL GROUP, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Nine Months
Ended March 31, Ended March 31,
2009 2008 2009 2008
(Unaudited)
Net sales $267,723 $264,632 $872,601 $778,110
Cost of sales 204,933 195,910 664,722 561,393
Gross profit 62,790 68,722 207,879 216,717
SG&A expenses 49,954 51,291 160,636 151,719
Impairment of goodwill and
intangibles 52,567 - 52,567 -
Operating income (loss) (39,731) 17,431 (5,324) 64,998
Interest and other expenses, net 1,072 3,528 10,925 8,799
Income (loss) before income taxes (40,803) 13,903 (16,249) 56,199
Income tax provision 347 5,588 9,739 21,482
Net income (loss) $(41,150) $8,315 $(25,988) $34,717
Basic net income (loss) per share $(1.01) $0.21 $(0.64) $0.87
Diluted net income (loss) per share $(1.01) $0.20 $(0.63) $0.83
Weighted average common shares
outstanding:
Basic 40,555 40,101 40,415 40,058
Diluted 40,672 41,588 41,065 41,837
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 March 31,
2009 2008
2009 GAAP Adjustments Adjusted Adjusted
(Unaudited)
Net sales $267,723 $267,723 $264,632
Cost of Sales 204,933 $(5,780) 199,153 188,102
Gross profit 62,790 5,780 68,570 76,530
SG&A expenses 49,954 (2,191) 47,763 48,610
Impairment of goodwill and
intangibles 52,567 (52,567) - -
Operating income (loss) (39,731) 60,538 20,807 27,920
Interest and other expenses,
net 1,072 191 1,263 3,528
Income (loss) before income
taxes (40,803) 60,347 19,544 24,392
Income tax provision 347 6,727 7,074 9,595
Net income (loss) $(41,150) $53,620 $12,470 $14,797
Basic net income (loss) per
share $(1.01) $1.32 $0.31 $0.37
Diluted net income (loss) per
share $(1.01) $1.32 $0.31 $0.36
Weighted average common shares
outstanding:
Basic 40,555 40,555 40,101
Diluted 40,672 40,672 41,588
FY 2009 FY 2008
Impact Impact
on Impact on Impact
Income on Income on
before Income before Income
income tax income tax
taxes provision taxes provision
(Unaudited)
Start-up and integration costs
related to the Company's Kosher
Valley poultry operations $2,300 $883
Start-up costs at the Fakenham
manufacturing facility related
to the integration of the
Haldane Foods frozen meat-free
operations and, in 2009,
unabsorbed overhead resulting from
expiration of a co-pack agreement
with the prior owner 1,532 429 $1,796 $685
SKU rationalization, severance
and other reorganization costs 1,011 378 6,012 2,296
Other items 937 358
Cost of sales 5,780 2,048 7,808 2,981
Professional fees and other
expenses incurred in connection
with the review of the Company's
stock option practices, net of
insurance recovery (2,303) (861) 682 261
Stock compensation expense 1,558 583 (459) (174)
Severance and other
reorganization costs 1,946 728 2,458 939
Other items 990 370
SG&A expenses 2,191 820 2,681 1,026
Impairment of goodwill and
intangibles 52,567 4,153 - -
Other (income) expenses, net (191) (294)
Interest and other expenses, net (191) (294) - -
Total adjustments $60,347 $6,727 $10,489 $4,007
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)
Nine Months Ended March 31,
2009 2008
2009 GAAP Adjustments Adjusted Adjusted
(Unaudited)
Net sales $872,601 $872,601 $778,110
Cost of Sales 664,722 $(12,304) 652,418 550,428
Gross profit 207,879 12,304 220,183 227,682
SG&A expenses 160,636 (11,649) 148,987 144,710
Impairment of goodwill and
intangibles 52,567 (52,567) - -
Operating income (loss) (5,324) 76,520 71,196 82,972
Interest and other expenses, net 10,925 (834) 10,091 10,801
Income (loss) before income
taxes (16,249) 77,354 61,105 72,171
Income tax provision 9,739 12,571 22,310 27,512
Net income (loss) $(25,988) $64,783 $38,795 $44,659
Basic net income (loss) per
share $(0.64) $1.60 $0.96 $1.11
Diluted net income (loss) per
share $(0.63) $1.58 $0.94 $1.07
Weighted average common shares
outstanding:
Basic 40,415 40,415 40,058
Diluted 41,065 41,065 41,837
FY 2009 FY 2008
Impact Impact
on Impact on Impact
Income on Income on
before Income before Income
income tax income tax
taxes provision taxes provision
(Unaudited)
Start-up and integration costs
related to the Company's
Kosher Valley poultry operations $2,300 $883
Start-up costs at the Fakenham
manufacturing facility related
to the integration of the Haldane
Foods frozen meat-free operations
and, in 2009, unabsorbed overhead
resulting from expiration of a
co-pack agreement with the prior
owner 6,647 1,862 $4,953 $1,858
SKU rationalization, severance and
other reorganization costs 1,699 602 6,012 2,296
Impact of co-pack pricing
agreement related to acquisition
of turkey processing facility 721 277
Other items 937 358
Cost of sales 12,304 3,982 10,965 4,154
Professional fees and other
expenses incurred in connection
with the review of the Company's
stock option practices, net of
insurance recovery 1,416 530 4,695 1,777
Stock compensation expense 4,455 1,666 (144) (56)
Legal settlement 1,350 505
Severance and other
reorganization costs 3,438 1,268 2,458 939
Other items 990 370
SG&A expenses 11,649 4,339 7,009 2,660
Impairment of goodwill and
intangibles 52,567 4,153 - -
Other (income) expenses, net 834 97
Gain on the sale of the Company's
investment in a rice cake
manufacturing joint venture in
Belgium recorded in the first
quarter of FY 2008 (2,002) (784)
Interest and other expenses, net 834 97 (2,002) (784)
Total adjustments $77,354 $12,571 $15,972 $6,030
SOURCE: The Hain Celestial Group, Inc.
The Hain Celestial Group, Inc., a leading natural and organic products company, today reported results for the third quarter ended March 31, 2009. The Company reported third quarter net sales of $267.7 million versus the prior year's third quarter sales of $264.6 million. Sales in the quarter would have been $12.7 million higher without the effects of foreign exchange rate changes between the periods, or 6% higher on a year-over-year basis. Net loss in the third quarter was $41.2 million, or $1.01 per share, on a GAAP basis, driven by the Company taking an estimated after-tax non-cash impairment charge of $48.4 million against goodwill and intangible assets related to the Company's European and Hain Pure Protein's (HPP) reporting units. On a non-GAAP basis(1), adjusted net income was $12.5 million, or $0.31 per share, in the third quarter this year.
"Hain Celestial's U.S. business delivered a solid quarter as health conscious consumers remain committed to natural and organic products even in tough economic times. The macroeconomic conditions in this past quarter -- and particularly at the beginning of the calendar year -- led to sales being challenged by reduced inventories and by consumers using their pantry goods. However, we believe that, as the quarter progressed, our strong brand portfolio and innovative range of healthy products offered through various distribution channels at reasonable prices provided consumers with the core goods they need for a healthy lifestyle. Their response was encouraging. Our results also reflect the sharp emphasis we continue to place on cost containment and productivity initiatives," said Irwin D. Simon, President and Chief Executive Officer of Hain Celestial.
"At the same time, we continue to improve our business, and focus on the challenges in our European and protein operations. In Europe, we are encouraged by recent business wins at our Fakenham facility in the United Kingdom in light of the challenges we have faced, including the under-utilization of the plant. New volume will be coming into the plant starting very soon as we produce new frozen meat-free and dessert products. In late April, HPP's Kosher Valley(TM) brand commenced production of natural, antibiotic-free, vegetarian-fed kosher poultry products at the Plainville facility," commented Irwin Simon.
On a GAAP basis gross margin was 23.5% in the third quarter versus 26.0% in the prior year quarter. If not for the Company's lower margin HPP joint venture with its current mix of commodity versus antibiotic-free mix, gross margin would have been 485 basis points higher this year at 28.3%, versus 126 basis points higher last year at 27.2%. The Company is in the process of de-emphasizing sales of conventional turkey and chicken products while it focuses on antibiotic-free products to improve its mix of sales for future periods.
Adjusted selling, general and administrative expenses declined as a percentage of sales to 17.8% in this year's quarter, compared to 18.4% in the prior year quarter. This reduction comes from the Company's continued successful focus on its cost structure and from productivity initiatives. On a GAAP basis the selling, general and administrative expenses as a percentage of sales was 18.7% in this year's quarter compared to 19.4% in the prior year quarter.
Interest and other expense, net includes interest expense of $3.4 million in the third quarter this year compared to $3.2 million for the prior year quarter. Also included is the minority interest share of the results of our protein operations, amounting to $(3.4) million in this year's quarter compared to $0.3 million in the prior year quarter. The remaining items of other expense in the current year quarter include foreign exchange and the settlement of a pre-acquisition contingency which could not be estimated or accrued at the time of the acquisition in 2003.
The Company recorded an estimated non-cash impairment charge aggregating $52.6 million ($48.4 million after-tax, or $1.19 per share) from the write-down of goodwill and other intangibles in its European and its Hain Pure Protein operations. This non-cash charge had no impact on the Company's compliance with financial covenants under its debt obligations.
The Company's balance sheet remains strong, with $255.6 million in working capital and a current ratio of 2.8 at March 31, 2009. Debt as a percentage of equity was 42.5%, with equity at $685.7 million. Operating free cash flow in the third quarter this year was $3.7 million compared to $6.8 million in the prior year quarter. The Company's cash balance at March 31, 2009 was $27.8 million after reducing outstanding debt by $28.5 million in the quarter.
"In an exceptionally tough operating environment, the Company drove growth in the natural, mass market and specialty channels, while we delivered on productivity and efficiencies. These initiatives, which, coupled with strategic pricing actions, position the Company for future growth," concluded Irwin Simon.
Fiscal Year 2009 Guidance
The Company updated its fiscal year 2009 guidance and narrowed the range to $1.162 to $1.170 billion in sales and $1.25 to $1.30 earnings per share excluding the impairment and other adjustments. The earnings guidance is before deducting $0.10 per share in stock compensation expense to amortize equity grants.
Webcast
Hain Celestial will host a conference call and webcast at 4:30 PM Eastern Daylight Time today to review its third quarter fiscal year 2009 results. The event will be webcast and available under the Investor Relations section of the Company's website at www.hain-celestial.com.
The Hain Celestial Group
The Hain Celestial Group, headquartered in Melville, NY, is a leading natural and organic 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(R), Garden of Eatin'(R), Health Valley(R), WestSoy(R), Earth's Best(R), Arrowhead Mills(R), MaraNatha(R), SunSpire(R), DeBoles(R), Hain Pure Foods(R), FreeBird(TM), Plainville Farms(R), Kosher Valley(TM), Hollywood(R), Spectrum Naturals(R), Spectrum Essentials(R), Walnut Acres Organic(R), Imagine(R), Rice Dream(R), Soy Dream(R), Rosetto(R), Ethnic Gourmet(R), Yves Veggie Cuisine(R), Granose(R), Realeat(R), Linda McCartney(R), Daily Bread(TM), Lima(R), Grains Noirs(R), Natumi(R), JASON(R), Zia(R) Natural Skincare, Avalon Organics(R), Alba Botanica(R), Queen Helene(R), Tushies(R) and TenderCare(R). Hain Celestial has been providing "A Healthy Way of Life(TM)" since 1993. 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; changes in estimates or judgments related to our impairment analysis of goodwill and other intangible assets; our ability to implement our business and acquisition strategy; our ability to effectively integrate our acquisitions; competition; availability and retention of key personnel; our reliance on third party distributors, manufacturers and suppliers; our ability to maintain existing contacts and secure new customers; changes in customer preferences and consumption; international sales and operations; changes in fuel and commodity costs; the impact of foreign exchange; the resolution of the SEC inquiry and litigation regarding our stock option practices; changes in, or the failure to comply with, government regulations; and other risks detailed from time-to-time in the Company's reports filed with the SEC, including the annual report on Form 10-K for the fiscal year ended June 30, 2008. As a result of the foregoing and other factors, no assurance can be given as to future results, levels of activity and achievements and neither the Company nor any person assumes responsibility for the accuracy and completeness of these statements.
Non-GAAP Financial Measures
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 only be read in connection with the Company's condensed consolidated statements of earnings presented in accordance with GAAP.
(1) See Reconciliation of GAAP Results to Non-GAAP Presentation Table
THE HAIN CELESTIAL GROUP, INC.
Consolidated Balance Sheets
(In thousands)
March 31, June 30,
2009 2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $27,784 $58,513
Trade receivables, net 128,595 118,867
Inventories 204,599 175,667
Deferred income taxes 13,277 12,512
Other current assets 26,401 27,482
Total current assets 400,656 393,041
Property, plant and equipment, net 142,336 159,089
Goodwill, net 454,197 550,238
Trademarks and other intangible assets, net 154,366 136,861
Other assets 18,714 20,155
Total assets $1,170,269 $1,259,384
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $140,045 $145,186
Income taxes payable 4,735 907
Current portion of long-term debt 289 222
Total current liabilities 145,069 146,315
Deferred income taxes 17,198 26,524
Other noncurrent liabilities 2,158 5,012
Long-term debt, less current portion 291,044 308,220
Total liabilities 455,469 486,071
Minority Interest 29,134 30,502
Stockholders' equity:
Common stock 415 411
Additional paid-in capital 500,474 488,650
Retained earnings 211,020 237,008
Treasury stock (15,518) (15,473)
Accumulated other comprehensive income (loss) (10,725) 32,215
Total stockholders' equity 685,666 742,811
Total liabilities and stockholders' equity $1,170,269 $1,259,384
THE HAIN CELESTIAL GROUP, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Nine Months
Ended March 31, Ended March 31,
2009 2008 2009 2008
(Unaudited)
Net sales $267,723 $264,632 $872,601 $778,110
Cost of sales 204,933 195,910 664,722 561,393
Gross profit 62,790 68,722 207,879 216,717
SG&A expenses 49,954 51,291 160,636 151,719
Impairment of goodwill and
intangibles 52,567 - 52,567 -
Operating income (loss) (39,731) 17,431 (5,324) 64,998
Interest and other expenses, net 1,072 3,528 10,925 8,799
Income (loss) before income taxes (40,803) 13,903 (16,249) 56,199
Income tax provision 347 5,588 9,739 21,482
Net income (loss) $(41,150) $8,315 $(25,988) $34,717
Basic net income (loss) per share $(1.01) $0.21 $(0.64) $0.87
Diluted net income (loss) per share $(1.01) $0.20 $(0.63) $0.83
Weighted average common shares
outstanding:
Basic 40,555 40,101 40,415 40,058
Diluted 40,672 41,588 41,065 41,837
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 March 31,
2009 2008
2009 GAAP Adjustments Adjusted Adjusted
(Unaudited)
Net sales $267,723 $267,723 $264,632
Cost of Sales 204,933 $(5,780) 199,153 188,102
Gross profit 62,790 5,780 68,570 76,530
SG&A expenses 49,954 (2,191) 47,763 48,610
Impairment of goodwill and
intangibles 52,567 (52,567) - -
Operating income (loss) (39,731) 60,538 20,807 27,920
Interest and other expenses,
net 1,072 191 1,263 3,528
Income (loss) before income
taxes (40,803) 60,347 19,544 24,392
Income tax provision 347 6,727 7,074 9,595
Net income (loss) $(41,150) $53,620 $12,470 $14,797
Basic net income (loss) per
share $(1.01) $1.32 $0.31 $0.37
Diluted net income (loss) per
share $(1.01) $1.32 $0.31 $0.36
Weighted average common shares
outstanding:
Basic 40,555 40,555 40,101
Diluted 40,672 40,672 41,588
FY 2009 FY 2008
Impact Impact
on Impact on Impact
Income on Income on
before Income before Income
income tax income tax
taxes provision taxes provision
(Unaudited)
Start-up and integration costs
related to the Company's Kosher
Valley poultry operations $2,300 $883
Start-up costs at the Fakenham
manufacturing facility related
to the integration of the
Haldane Foods frozen meat-free
operations and, in 2009,
unabsorbed overhead resulting from
expiration of a co-pack agreement
with the prior owner 1,532 429 $1,796 $685
SKU rationalization, severance
and other reorganization costs 1,011 378 6,012 2,296
Other items 937 358
Cost of sales 5,780 2,048 7,808 2,981
Professional fees and other
expenses incurred in connection
with the review of the Company's
stock option practices, net of
insurance recovery (2,303) (861) 682 261
Stock compensation expense 1,558 583 (459) (174)
Severance and other
reorganization costs 1,946 728 2,458 939
Other items 990 370
SG&A expenses 2,191 820 2,681 1,026
Impairment of goodwill and
intangibles 52,567 4,153 - -
Other (income) expenses, net (191) (294)
Interest and other expenses, net (191) (294) - -
Total adjustments $60,347 $6,727 $10,489 $4,007
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)
Nine Months Ended March 31,
2009 2008
2009 GAAP Adjustments Adjusted Adjusted
(Unaudited)
Net sales $872,601 $872,601 $778,110
Cost of Sales 664,722 $(12,304) 652,418 550,428
Gross profit 207,879 12,304 220,183 227,682
SG&A expenses 160,636 (11,649) 148,987 144,710
Impairment of goodwill and
intangibles 52,567 (52,567) - -
Operating income (loss) (5,324) 76,520 71,196 82,972
Interest and other expenses, net 10,925 (834) 10,091 10,801
Income (loss) before income
taxes (16,249) 77,354 61,105 72,171
Income tax provision 9,739 12,571 22,310 27,512
Net income (loss) $(25,988) $64,783 $38,795 $44,659
Basic net income (loss) per
share $(0.64) $1.60 $0.96 $1.11
Diluted net income (loss) per
share $(0.63) $1.58 $0.94 $1.07
Weighted average common shares
outstanding:
Basic 40,415 40,415 40,058
Diluted 41,065 41,065 41,837
FY 2009 FY 2008
Impact Impact
on Impact on Impact
Income on Income on
before Income before Income
income tax income tax
taxes provision taxes provision
(Unaudited)
Start-up and integration costs
related to the Company's
Kosher Valley poultry operations $2,300 $883
Start-up costs at the Fakenham
manufacturing facility related
to the integration of the Haldane
Foods frozen meat-free operations
and, in 2009, unabsorbed overhead
resulting from expiration of a
co-pack agreement with the prior
owner 6,647 1,862 $4,953 $1,858
SKU rationalization, severance and
other reorganization costs 1,699 602 6,012 2,296
Impact of co-pack pricing
agreement related to acquisition
of turkey processing facility 721 277
Other items 937 358
Cost of sales 12,304 3,982 10,965 4,154
Professional fees and other
expenses incurred in connection
with the review of the Company's
stock option practices, net of
insurance recovery 1,416 530 4,695 1,777
Stock compensation expense 4,455 1,666 (144) (56)
Legal settlement 1,350 505
Severance and other
reorganization costs 3,438 1,268 2,458 939
Other items 990 370
SG&A expenses 11,649 4,339 7,009 2,660
Impairment of goodwill and
intangibles 52,567 4,153 - -
Other (income) expenses, net 834 97
Gain on the sale of the Company's
investment in a rice cake
manufacturing joint venture in
Belgium recorded in the first
quarter of FY 2008 (2,002) (784)
Interest and other expenses, net 834 97 (2,002) (784)
Total adjustments $77,354 $12,571 $15,972 $6,030
SOURCE: The Hain Celestial Group, Inc.