Hain Celestial: Announces Delayed Financial Results

Lake Success / NY. (hc) The Hain Celestial Group Inc., a leading organic and natural products company with operations in North America, Europe and India providing consumers with A Healthier Way of Life, announced the completion of its internal accounting review and audit process for its fiscal year ended June 30, 2016. In connection with the completion of its internal accounting review, the Company has concluded that its previously-issued consolidated financial statements are fairly stated in all material respects in accordance with generally accepted accounting principles in the United States. Now, the Company will file its Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the «Form 10-K»), which includes immaterial revisions to its results for fiscal years 2016, 2015 and 2014, as well as its Quarterly Reports on Form 10-Q for the first three quarters of its fiscal year 2017. Upon the filing of these outstanding reports, the Company will be current with all of its reporting obligations with the Securities and Exchange Commission.

«The accounting review is complete, and we are pleased to report our financial results, which reflect no material changes to any prior reported periods. We have also implemented greater and more effective internal controls and enhanced oversight for our financial reporting and business units. The changes we are announcing strengthen Hain Celestial globally on a go-forward basis», said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. «We appreciate the efforts of our employees and the support of our customers, lenders and stockholders throughout this process».

Irwin Simon continued, «We have made significant progress to build upon our strategic plan, Project Terra, identifying substantial cost-savings, enhancing customer-centric, go-to market initiatives and fuelling innovation to improve our performance. Our team is energized and focused on the continued execution of our strategic initiatives as we position our business for long-term growth, success and enhanced shareholder value».

Financial Highlights

For the first nine months of fiscal year 2017, the Company reported:

  • Net sales of 2.1 billion USD, relatively flat on a year-over-year basis, or a 4 percent increase on a constant currency basis. Net sales were impacted by 96.2 million USD from foreign exchange rate movements versus the prior year period.
  • Hain Celestial United States net sales of 882.3 million USD, a decrease of 6 percent on a year-over-year basis reflecting the impact of inventory realignment at certain customers and product rationalization of 55 million USD.
  • Hain Celestial United Kingdom net sales of 573.5 million USD, a 3 percent increase, or an 18 percent increase on a constant currency basis, compared to the prior year period.
  • Hain Pure Protein net sales of 387.4 million USD, a 2 percent increase over the prior year period.
  • Hain Celestial Canada net sales of 111.2 million USD, an 8 percent increase.
  • Hain Celestial Europe net sales of 127.8 million USD, a 15 percent increase.
  • Net income of 67.1 million USD; adjusted net income of 82.7 million USD.
  • Ebitda of 157.2 million USD compared to 278.5 million USD in the prior year period; adjusted Ebitda of 189.8 million USD compared to 287.8 million USD in the prior year period.
  • Operating income of 102.2 million USD, or 4.8 percent of net sales; adjusted operating income of 134.8 million USD, or 6.3 percent of net sales.
  • Earnings per diluted share of 0.64 USD; adjusted earnings per diluted share of 0.79 USD. Foreign currencies impacted reported earnings results by 0.09 USD per diluted share.
  • Operating cash flow of 148.0 million USD.

For fiscal year 2016, the Company reported:

  • Net sales of 2.9 billion USD, an 11 percent increase or 13 percent on a constant currency basis, compared to fiscal 2015 net sales of 2.6 billion USD. Net sales were impacted by 69.2 million USD in foreign exchange rate movements versus the prior year.
  • Net income of 47.4 million USD; adjusted net income of 192.9 million USD.
  • Ebitda of 361.5 million USD compared to 311.9 million USD in fiscal 2015; adjusted Ebitda of 379.1 million USD compared to 371.7 million USD in fiscal 2015.
  • Operating income of 150.4 million USD, adjusted operating income 305.5 million USD.
  • Included in the Company’s fiscal 2016 results was a non-cash impairment charge of 124.2 million USD, which included a goodwill impairment charge of 84.5 million USD related to the Hain Daniels reporting unit within the United Kingdom segment as well as a trademark impairment charge of 39.7 million USD, which relates to trademarks in both the United Kingdom and United States segments.
  • Earnings per diluted share of 0.46 USD, adjusted earnings per diluted share of 1.85 USD. Foreign currencies impacted reported earnings results by 0.04 USD per diluted share.
  • Operating cash flow of 206.6 million USD, an increase of 11.4 percent compared to fiscal 2015.

Update on Strategic Plan

The Company continues to execute on its strategic plan, which expands upon Project Terra announced in fiscal 2016, to drive long-term growth and profitability. These initiatives to drive net sales growth and margin expansion include:

  • Investing in top brands and capabilities to grow globally;
  • Expanding Project Terra cost-savings programs, which are expected to deliver 350 million USD in total cost savings through fiscal 2020 including annual productivity;
  • Building a global management team with deep sector and operating expertise–including key hires in marketing, sales, and operations–to drive innovation and distribution expansion, as well as
  • Pursuing a capital allocation strategy that includes a new 250 million USD share repurchase authorization.
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