Hain Celestial: Announces Record Q3 FY 2014 Results

Lake Success / NY. (hc) The Hain Celestial Group Inc., a leading natural and organic products company providing consumers with A Healthy Way of Life, reported record results for its third quarter ended March 31, 2014. Performance highlights:

  • Adjusted earnings per diluted share from continuing operations of 0,88 USD, a 22 percent increase.
  • Earnings per diluted share from continuing operations of 0,75 USD, compared to 0,87 USD a year ago, which included a 0,28 USD one-time tax benefit.
  • Record quarterly net sales of 557,4 million USD, a 22 percent increase.
  • Operating income of 63,6 million USD, 11,4 percent of net sales; adjusted operating income of 72,3 million USD, 13,0 percent of net sales.
  • Adjusted Ebitda of 83,3 million USD, 14,9 percent of net sales; Ebitda of 76,4 million USD, 13,7 percent of net sales.
  • Operating Free Cash Flow of 91,6 million USD for the nine months ended March 31, 2014.

«We are pleased with our record third quarter results, the highest net sales in the Company´s history and our 13th consecutive quarter of year-over-year double digit net sales and adjusted earnings growth», said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. «We continue to experience strong demand for our organic and natural brands as demonstrated by the increasing consumption of our products. Today, our products are available on shelves across more geographies and sales channels, and we believe the opportunities ahead are even more compelling as we expand with new and existing customers».

Third Quarter Fiscal 2014

The Company reported net sales of 557,4 million USD, a 22 percent increase, compared to net sales of 456,1 million USD in the third quarter of fiscal year 2013. Hain Celestial US reported record third quarter net sales of 319,5 million USD, a 15 percent increase. In the United Kingdom, net sales were 176,9 million USD, and the Rest of World segment reported net sales of 61,0 million USD.

For the third quarter, the Company earned adjusted net income from continuing operations of 44,5 million USD compared to 34,4 million USD in the prior year third quarter, a 29 percent increase and reported adjusted earnings per diluted share from continuing operations of 0,88 USD compared to 0,72 USD, a 22 percent increase. Net income was 35,2 million USD compared to 40,7 million USD in the prior year third quarter when the Company reported a tax benefit of 13,2 million USD, or 0,28 USD per diluted share, resulting from a worthless stock tax deduction for an investment in one of the Company´s UK subsidiaries.

«The third quarter was a significant quarter for the Company with many accomplishments», added Irwin Simon. «We closed on the acquisition of Tilda, a leading global rice brand, which expanded our branded grocery product offerings with basmati rice into the Ethnic Specialty Channel and into new geographies in the Middle East, North Africa and India. At this year´s Natural Products Expo West, which had a record-breaking 67’000 attendees, we featured over 100 new and exciting food, beverage and personal care products and met with leading accounts from across all sales channels. Lastly, with several of our key commodities rising, we managed to control our costs and delivered productivity savings, which we expect to continue throughout the rest of this fiscal year and into fiscal year 2015. We expect additional integration opportunities from our BluePrint and Ella´s Kitchen acquisitions to continue into next year».

Acquisitions and Divestitures

«We are excited by the strategic acquisition of Rudi´s Organic Bakery Inc., a leading certified organic bread brand, as we look for the latest trends, and consumers are increasing their purchases of whole grains, organic and gluten-free product offerings», commented Irwin Simon. «As a company committed to driving product innovation, we plan to build upon Rudi´s leadership position and see the opportunity to take Rudi´s into complementary product categories. We have a proven ability to expand great brands and products into various channels of distribution including the conventional, mass and club channels where we see significant opportunities for increased growth».

During the third quarter, the Company completed the previously announced divestiture of the Grains Noirs business as well as other discontinued products in Europe, which were non-core assets. The Company will continue to review its portfolio as it focuses on its core strategy of organic and natural brands and products by streamlining its business where appropriate and seeking out strategic accretive acquisitions which complement the Company´s growth plans.

Fiscal Year 2014 Guidance

The Company raised its annual guidance for fiscal year 2014 to reflect the Rudi´s acquisition completed in April 2014 and performance year to date:

  • Total net sales range of 2,145 billion USD to 2,15 billion USD for fiscal year 2014; an increase of approximately 24 percent as compared to fiscal year 2013.
  • Earnings range of 3,14 USD to 3,17 USD per diluted share for fiscal year 2014; an increase of 24 percent to 25 percent as compared to fiscal year 2013.

Guidance is provided for continuing operations on a non-GAAP basis and excludes acquisition-related fees and expenses, integration and restructuring charges, factory start-up costs, certain litigation expenses, unrealized currency gains and losses and specific losses on equity-method investees that have been or may be incurred during the Company´s fiscal year 2014, which the Company will continue to identify as it reports its future financial results. Guidance excludes the impact of any future acquisitions.

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