Hain Celestial Reports Third Quarter Fiscal Year 2018 Financial Results

Hain Celestial Reports Third Quarter Fiscal Year 2018 Financial Results

Net Sales from Continuing Operations excluding Hain Pure Protein Increased 8% to $632.7 Million, or 2% on a Constant Currency Basis

Earnings per Diluted Share ("EPS") from Continuing Operations of $0.24; Adjusted EPS from Continuing Operations of $0.37

Reiterates Annual Net Sales Outlook and Updates Fiscal 2018 Earnings Guidance for Continuing Operations excluding Hain Pure Protein

Expects to Complete Divestiture of Hain Pure Protein During First Half of Fiscal 2019

PR Newswire

LAKE SUCCESS, N.Y., May 8, 2018 /PRNewswire/ -- The Hain Celestial Group, Inc. HAIN ("Hain Celestial" or the "Company"), a leading organic and natural products company with operations in North America, Europe, Asia and the Middle East providing consumers with A Healthier Way of Life™, today reported financial results for the third quarter ended March 31, 2018.  The results contained herein are presented with the Hain Pure Protein operating segment being treated as a discontinued operation given the Company's previously announced decision to divest the business, which is expected to be completed during the first half of fiscal year 2019.

The Hain Celestial Group, Inc. (PRNewsfoto/The Hain Celestial Group, Inc.)

"The continued strength of our international businesses in the United Kingdom, Europe, Canada and key emerging markets, including India and the Middle East, fueled our third quarter financial results," said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. "Our performance in the United States reflects the ongoing efforts to reduce business complexities and drive greater efficiencies in light of higher freight and commodity inflation.  We are taking aggressive action to address the challenging environment, including optimizing our pricing to offset these higher costs.  In addition, we are making targeted strategic brand building investments in our top 500 SKUs, where we have gained significant points of distribution, which we expect will result in a higher rate of growth in future periods.  Hain Celestial's global team remains focused on the execution of our long-term strategic priorities and Project Terra cost savings initiatives to enhance stockholder value."

Financial Highlights

Third Quarter Results Summary from Continuing Operations

  • Net sales increased 8% to $632.7 million compared to the prior year period, or 2% on a constant currency basis, primarily reflecting mid- to high single digit net sales increases from the United Kingdom and Rest of World including the Canada and Europe operating segments, partially offset by a low single digit net sales decrease from the United States segment. When adjusted for Foreign Exchange and Acquisitions, Divestitures, and certain other items including the 2017 Project Terra Stock Keeping Unit ("SKU") rationalization, and taking into account the potential impact of the 2018 Project Terra SKU ratonalization2, net sales would have increased 3% compared to the prior year period.
  • Gross margin of 21.0%; adjusted gross margin of 23.0%.
  • Operating income of $29.3 million; adjusted operating income of $56.0 million.
  • Net income of $25.2 million, a 23% decrease over the prior year period; adjusted net income of $38.6 million, a 6% increase over the prior year period.
  • EBITDA of $51.5 million; Adjusted EBITDA of $73.4 million.
  • EPS of $0.24 compared to $0.31 in the prior year period; Adjusted EPS of $0.37 compared to $0.35 in the prior year period.

1 This press release includes certain non‐GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided herein.

 2 Refer to "Net Sales Growth at Constant Currency and Adjusted for Acquisitions, Divestitures and Other" provided herein.

THIRD QUARTER OPERATING SEGMENT HIGHLIGHTS FROM CONTINUING OPERATIONS

Hain Celestial United States

Net sales for Hain Celestial United States decreased 3% over the prior year period to $281.1 million; when adjusted for Acquisitions, Divestitures and certain other items, including the 2017 Project Terra SKU rationalization, and taking into account the potential impact of the 2018 Project Terra SKU rationalization2, net sales would have increased 1%.  Net sales growth from the Tea and Pure Personal Care platforms was offset by declines in the Better-For-You Snacking, Better-For-You Pantry, Better-For-You Baby and Fresh Living platforms.  As previously discussed, the decline in net sales was due in part to the strategic decision to no longer support certain lower margin SKUs in order to reduce complexity and increase gross margin as the Company continues its focus on its top 500 SKUs in the United States.  The prior year third quarter results were also impacted by inventory realignment at certain distributor customers.  Segment operating income was $25.0 million, a 44% decrease from the prior year period, and adjusted operating income was $35.9 million, a 19% decrease over the prior year period, driven primarily by higher marketing investments to drive future period growth, increased freight and commodity costs and unfavorable mix.  The financial results for the current period as well as the prior year third quarter results exclude the United Kingdom operations of the Ella's Kitchen® brand, thereby eliminating net sales of approximately $24.1 million and $19.0 million, respectively, as these net sales are now reported as part of the United Kingdom reportable segment. 

Hain Celestial United Kingdom

Net sales for Hain Celestial United Kingdom increased 19% to $238.3 million over the prior year period, or 5% after adjusting for Foreign Exchange, Acquisitions and Divestitures and certain other items2.  The strong results for the United Kingdom segment were driven by 27% growth from Ella's Kitchen®, 20% growth from Tilda® and 17% growth from Hain Daniels brands, or 13%, 9%, and 3%, respectively after adjusting for Foreign Exchange, Acquisitions and Divestitures and certain other items2. Segment operating income was $13.9 million, a decrease of 1% over the prior year period, and adjusted operating income was $20.8 million, an increase of 48% over the prior year period driven by strong contribution from the Hain Daniels brands.  As discussed above, the financial results for the current period as well as the prior year third quarter results include the United Kingdom operations of the Ella's Kitchen® brand, which was previously reported as part of the United States reportable segment. 

­­­­­­­­­­Rest of World

Net sales for Rest of World increased 15% to $113.3 million over the prior year period, or by 6% on a constant currency basis.  Net sales for Hain Celestial Europe grew 25%, or 8% on a constant currency basis, driven by strong performance from the Joya®, Danival®, Natumi® and Tilda® brands as well as own-label products.  Net sales for Hain Celestial Canada grew 12%, or 7% on a constant currency basis, driven by strong performance from Yves Veggie Cuisine®, Tilda® and Live Clean® brands as well as the GG UniqueFibre®, Health Valley® and Hollywood® brands under Cultivate.  Segment operating income was $11.1 million, an 18% increase over the prior year period, and adjusted operating income was $12.3 million, a 32% increase over the prior year period.

Hain Pure Protein Discontinued Operations  

In the third quarter of fiscal year 2018, the results of operations, financial position and cash flows related to the operations of the Hain Pure Protein business segment moved to discontinued operations in the current and prior periods.  Net sales for Hain Pure Protein were $118.2 million, relatively flat compared to the prior year period.  Segment operating loss was $2.1 million.

Fiscal Year 2018 Guidance

The Company's previously issued guidance was inclusive of Hain Pure Protein's results, and therefore, the Company has updated its guidance to exclude Hain Pure Protein.  Additionally, the Company updated Adjusted EPS and Adjusted EBITDA guidance for fiscal year 2018 to reflect the results of current operations, continued higher investment in marketing and brand awareness, primarily in the United States, as well as increased freight and certain commodity price headwinds:



Original Guidance



Less:

Hain Pure Protein



Adjusted Guidance



Updated FY 2018 Guidance 





Low

High





Low

High



Low

High



Net Sales M

$        2,967

$       3,036



$                    (533)



$       2,434

$       2,503



$             2,434

$             2,503



























Adjusted EBITDA M

$           340

$          355



$                      (48)



$          292

$          307



$                250

$                260



























Adjusted EPS(1)

$          1.64

$         1.75



$                   (0.25)



$         1.39

$         1.50



$               1.11

$               1.18



























(1) Assumes (a) a tax rate of 24%, (b) estimated interest and other expenses of approximately $27 million and (c) estimated depreciation, amortization and 

stock-based compensation expense of approximately $75 million















Guidance, where adjusted, is provided on a non-GAAP basis, which excludes acquisition-related expenses, integration and restructuring charges, start-up costs, asset impairment charges associated with SKU rationalization, unrealized net foreign currency gains or losses, accounting review and remediation costs and other non-recurring items that have been or may be incurred during the Company's fiscal year 2018, which the Company will continue to identify as it reports its future financial results. Guidance excludes the impact of any future acquisitions.

The Company cannot reconcile its expected Adjusted EBITDA to net income or adjusted earnings per diluted share to earnings per share under "Fiscal Year 2018 Guidance" without reasonable effort because certain items that impact net income and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time.

Effective July 1, 2017, due to changes to the Company's internal management and reporting structure, the United Kingdom operations of the Ella's Kitchen® brand, which was previously included within the United States reportable segment, is included in the United Kingdom reportable segment.  The prior period segment information contained below has been adjusted to reflect the Company's new operating and reporting structure.













(unaudited and dollars in thousands)

United States

United Kingdom

Rest of World

Corporate/

Other

Total

NET SALES











Net sales - Three months ended 3/31/18

$     281,052

$     238,321

$     113,347

$                 -

$     632,720

Net sales - Three months ended 3/31/17

$     289,503

$     200,976

$       98,319

$                 -

$     588,798

% change - FY'18 net sales vs. FY'17 net sales

(2.9)%

18.6%

15.3%



7.5%













OPERATING INCOME











Three months ended 3/31/18











Operating income

$       24,974

$       13,863

$       11,059

$      (20,642)

$       29,254

Non-GAAP adjustments (1)

10,880

6,895

1,257

7,723

26,755

Adjusted operating income

$       35,854

$       20,758

$       12,316

$      (12,919)

$       56,009

Operating income margin

8.9%

5.8%

9.8%



4.6%

Adjusted operating income margin

12.8%

8.7%

10.9%



8.9%













Three months ended 3/31/17











Operating income

$       44,322

$       14,061

$         9,362

$      (18,124)

$       49,621

Non-GAAP adjustments (1)

-

-

-

9,207

9,207

Adjusted operating income

$       44,322

$       14,061

$         9,362

$        (8,917)

$       58,828

Operating income margin

15.3%

7.0%

9.5%



8.4%

Adjusted operating income margin

15.3%

7.0%

9.5%



10.0%

















































(unaudited and dollars in thousands)

United States

United Kingdom

Rest of World

Corporate/

Other

Total

NET SALES











Net sales - Nine months ended 3/31/18 

$     815,013

$     698,968

$     324,190

$                 -

$  1,838,171

Net sales - Nine months ended 3/31/17 

$     822,376

$     633,439

$     284,799

$                 -

$  1,740,614

% change - FY'18 net sales vs. FY'17 net sales

(0.9)%

10.3%

13.8%



5.6%













OPERATING INCOME











Nine months ended 3/31/18











Operating income

$       67,696

$       37,062

$       30,591

$      (45,889)

$       89,460

Non-GAAP adjustments (1)

22,272

12,970

2,123

14,769

52,134

Adjusted operating income

$       89,968

$       50,032

$       32,714

$      (31,120)

$     141,594

Operating income margin

8.3%

5.3%

9.4%



4.9%

Adjusted operating income margin

11.0%

7.2%

10.1%



7.7%













Nine months ended 3/31/17











Operating income

$     103,045

$       31,200

$       21,894

$      (53,890)

$     102,249

Non-GAAP adjustments (1)

6,193

3,754

(110)

22,742

32,579

Adjusted operating income

$     109,238

$       34,954

$       21,784

$      (31,148)

$     134,828

Operating income margin

12.5%

4.9%

7.7%



5.9%

Adjusted operating income margin

13.3%

5.5%

7.6%



7.7%













(1) See accompanying table of "Reconciliation of GAAP Results to Non-GAAP Measures"

Webcasts and Upcoming Presentation 

Hain Celestial will host a conference call and webcast today at 8:30 AM Eastern Time to discuss its results and business outlook.  Additionally, the Company is scheduled to present at the BMO Annual Farm to Market Conference on Wednesday, May 16, 2018. These events will be webcast, and any accompanying presentations will be available under the Investor Relations section of the Company's website at www.hain.com.  

About The Hain Celestial Group, Inc.

The Hain Celestial Group HAIN, headquartered in Lake Success, NY, is a leading organic and natural products company with operations in North America, Europe, Asia and the Middle East.  Hain Celestial participates in many natural categories with well-known brands that include Celestial Seasonings®, Earth's Best®, Ella's Kitchen®, Terra®, Garden of Eatin'®, Sensible Portions®, Health Valley®, Arrowhead Mills®, MaraNatha®, SunSpire®, DeBoles®, Casbah®, Rudi's Organic Bakery®, Gluten Free Café™, Hain Pure Foods®, Spectrum®, Spectrum Essentials®, Walnut Acres Organic®, Imagine®, Almond Dream®, Rice Dream®, Soy Dream®, WestSoy®, The Greek Gods®, BluePrint®, FreeBird®, Plainville Farms®, Empire®, Kosher Valley®, Yves Veggie Cuisine®, Better Bean®, Europe's Best®, Cully & Sully®, New Covent Garden Soup Co.®, Yorkshire Provender™, Johnson's Juice Co.®, Farmhouse Fare®, Hartley's®, Sun-Pat®, Gale's®, Clarks™, Robertson's®, Frank Cooper's®, Linda McCartney®, Lima®, Danival®, Happy®, Joya®, Natumi®, GG UniqueFiber®, Tilda®, JASON®, Avalon Organics®, Alba Botanica®, Live Clean® and Queen Helene®.  Hain Celestial has been providing A Healthier Way of Life™ since 1993.  For more information, visit www.hain.com.

Safe Harbor Statement

Certain statements contained in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are predictions based on expectations and projections about future events and are not statements of historical fact.  You can identify forward-looking statements by the use of forward-looking terminology such as "plan", "continue", "expect", "anticipate", "intend", "predict", "project", "estimate", "likely", "believe", "might", "seek", "may", "will", "remain", "potential", "can", "should", "could", "future" and similar expressions, or the negative of those expressions, or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical facts.  You can also identify forward-looking statements by discussions of the Project Terra strategic initiatives, the Company's potential divestiture of its Hain Pure Protein business, and our future performance and results of operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, levels of activity, performance or achievements of the Company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized.  We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).  Such factors, include, among others, the Company's beliefs or expectations relating to (i) the Company's guidance for Fiscal Year 2018; (ii) the Company's ability to generate growth and optimize pricing to offset higher freight and commodity inflation; (iii) the potential divestiture of the Hain Pure Protein business during the first half of fiscal year 2019;  (iv) the Company's ability to execute long term strategic priorities and Project Terra initiatives to enhance stockholder value; (v) the Company's ability to simplify its brand portfolio and execute SKU rationalization plans; and the other risks detailed from time-to-time in the Company's reports filed with the United States Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended June 30, 2017, and our quarterly reports.  As a result of the foregoing and other factors, the Company cannot provide any assurance regarding future results, levels of activity and achievements of the Company, and neither the Company nor any person assumes responsibility for the accuracy and completeness of these statements.  All forward-looking statements contained herein apply as of the date hereof or as of the date they were made and, except as required by applicable law, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflects changes in underlying assumptions or factors of new methods, future events or other changes.

Non-GAAP Financial Measures

This press release and the accompanying tables include non-GAAP financial measures, including net sales adjusted for the impact of Foreign currency, Acquisitions and Divestitures and certain other items, including SKU rationalization, as applicable in each case, adjusted operating income, adjusted gross margin, adjusted earnings per diluted share, EBITDA, Adjusted EBITDA and operating free cash flow. The reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are presented in the tables "Reconciliation of GAAP Results to Non-GAAP Measures" for the three months and nine months ended March 31, 2018 and 2017 and in the paragraphs below. 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 be read only in connection with the Company's Consolidated Statements of Income presented in accordance with GAAP.

The Company defines Operating Free Cash Flow as cash provided by or used in operating activities from continuing operations (a GAAP measure) less capital expenditures. The Company views Operating Free Cash Flow as an important measure because it is one factor in evaluating the amount of cash available for discretionary investments.

For the three months and nine months ended March 31, 2018 and 2017, Operating Free Cash Flow from continuing operations was calculated as follows:

Operating Free Cash Flow



















































Three Months Ended



Nine Months Ended



3/31/18



3/31/17



3/31/18



3/31/17



(unaudited and dollars in thousands)

















Cash flow provided by operating activities - continuing operations

$       38,979



$       44,751



$       67,370



$     163,179

Purchases of property, plant and equipment

(23,683)



(12,884)



(48,368)



(30,650)

Operating Free Cash Flow

$       15,296



$       31,867



$       19,002



$     132,529

The Company's Operating Free Cash Flow from continuing operations was $15.3 million for the three months ended March 31, 2018, a decrease of $16.6 million from the three months ended March 31, 2017.  The Company's Operating Free Cash Flow was $19.0 million for the nine months ended March 31, 2017, a decrease of $113.5 million from the nine months ended March 31, 2017.  The decrease in Operating Free Cash Flow was primarily attributable to increased capital expenditures in the current year and an increase in inventories and accounts receivable.

The Company believes presenting net sales at constant currency provides useful information to investors because it provides transparency to underlying performance in the Company's consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on period-to-period comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

The Company provides net sales adjusted for constant currency, acquisitions and divestitures, and certain other items including SKU rationalization, as applicable in each case, to understand the growth rate of net sales excluding the impact of such items.  The Company's management believes net sales adjusted for such items is useful to investors because it enables them to better understand the growth of our business from period-to-period.

The Company defines EBITDA as net income from continuing operations (a GAAP measure) before income taxes, net interest expense, depreciation and amortization, equity in net income of equity method investees, stock based compensation expense and unrealized currency gains.  Adjusted EBITDA is defined as EBITDA before acquisition-related expenses, including integration and restructuring charges, and other non-recurring items.  The Company's management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company as well as a component of performance-based executive compensation.

For the three months and nine months ended March 31, 2018 and 2017, EBITDA and Adjusted EBITDA from continuing operations was calculated as follows:  



Three Months Ended 



Nine Months Ended



3/31/2018



3/31/2017



3/31/2018



3/31/2017



(unaudited and dollars in thousands)

Net Income

$         12,686



$   31,328



$         79,635



$   67,117

Net (loss) income from discontinued operations

(12,555)



(1,496)



(7,349)



72

Net income from continuing operations

$         25,241



$   32,824



$         86,984



$   67,045

















Provision (benefit) for income taxes

(1,310)



9,149



(11,516)



19,512

Interest expense, net

6,108



4,728



17,535



13,477

Depreciation and amortization

15,074



14,828



45,139



44,735

Equity in net loss (income) of equity-method

investees

101



177



(104)



(45)

Stock-based compensation expense

2,936



2,284



10,258



7,519

Long-lived asset impairment

4,839



-



8,290



-

Unrealized currency gains and losses

(1,465)



1,791



(5,170)



(1,486)

EBITDA

51,524



65,781



151,416



150,757

































Acquisition related expenses, restructuring, integration and other charges

4,831



2,083



13,750



3,599

Accounting review and remediation costs, net of insurance proceeds

3,313



7,124



6,406



20,089

2018 Project Terra SKU rationalization

4,913



-



4,913



-

Plant closure related costs

3,246



-



3,946



1,804

Losses on terminated chilled desserts contract

2,939



-



6,553



-

Co-packer disruption

952



-



3,692



-

Toys "R" Us bad debt

897



-



897



-

Machine break-down costs

317



-



317



-

Recall and other related costs

273



-



273



809

Litigation expense

235



-



235



-

U.K. start-up costs

-



-



1,155



-

Regulated packaging change

-



-



1,007



-

2017 Project Terra SKU rationalization

-



-



-



5,360

U.K. deferred synergies due to CMA Board decision

-



-



-



918

Adjusted EBITDA

$         73,440



$   74,988



$       194,560



$ 183,336

 

 

THE HAIN CELESTIAL GROUP, INC.

Consolidated Balance Sheets

 (in thousands) 















March 31, 2018



June 30, 2017





 (unaudited) 















ASSETS







Current assets:









Cash and cash equivalents

$               117,152



$                137,055



Accounts receivable, net

261,517



225,765



Inventories

399,156



341,995



Prepaid expenses and other current assets

62,635



46,179



Current assets of discontinued operations

315,201



123,787



Total current assets

1,155,661



874,781











Property, plant and equipment, net

314,237



291,866

Goodwill

1,056,954



1,018,892

Trademarks and other intangible assets, net

540,234



521,228

Investments and joint ventures

20,126



18,998

Other assets

33,312



30,235

Noncurrent assets of discontinued operations

-



175,104



Total assets 

$            3,120,524



$             2,931,104











LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities:









Accounts payable

$               214,743



$                186,193



Accrued expenses and other current liabilities

111,326



106,727



Current portion of long-term debt

25,677



9,626



Current liabilities of discontinued operations

61,941



37,948



Total current liabilities

413,687



340,494











Long-term debt, less current portion

723,457



740,135

Deferred income taxes 

83,402



98,346

Other noncurrent liabilities

24,211



15,975

Noncurrent liabilities of discontinued operations

-



23,322

Total liabilities

1,244,757



1,218,272











Stockholders' equity:









Common stock

1,084



1,080



Additional paid-in capital

1,147,978



1,137,724



Retained earnings

948,457



868,822



Accumulated other comprehensive loss

(115,584)



(195,479)





1,981,935



1,812,147



Treasury stock

(106,168)



(99,315)



Total stockholders' equity

1,875,767



1,712,832



Total liabilities and stockholders' equity

$            3,120,524



$             2,931,104

 

 

THE HAIN CELESTIAL GROUP, INC.

 Consolidated Statements of Income 

 (unaudited and in thousands, except per share amounts) 





















Three Months Ended March 31,



Nine Months Ended March 31,



2018



2017



2018



2017

































Net sales

$          632,720



$          588,798



$       1,838,171



$       1,740,614

Cost of sales

499,707



449,595



1,447,820



1,365,080

Gross profit

133,013



139,203



390,351



375,534

















Selling, general and administrative expenses

86,063



76,169



258,586



237,657

Amortization of acquired intangibles

4,713



4,206



13,859



12,887

Acquisition related expenses, restructuring, integration and other charges

4,831



2,083



13,750



2,652

Accounting review and remediation costs, net of insurance proceeds

3,313



7,124



6,406



20,089

Long-lived asset impairment

4,839



-



8,290



-

Operating income

29,254



49,621



89,460



102,249

















Interest and other financing expenses, net

6,782



5,399



19,543



15,491

Other (income)/expense, net

(1,560)



2,072



(5,447)



246

Income from continuing operations before income taxes and equity in net income of equity-method investees

24,032



42,150



75,364



86,512

Provision (benefit) for income taxes

(1,310)



9,149



(11,516)



19,512

Equity in net loss (income) of equity-method investees

101



177



(104)



(45)

  Net income from continuing operations

$            25,241



$            32,824



$            86,984



$            67,045

  Net (loss) income from discontinued

    operations, net of tax

(12,555)



(1,496)



(7,349)



72

Net income

$            12,686



$            31,328



$            79,635



$            67,117

















Net income (loss) per common share:















Basic net income per common share from continuing operations

$                 0.24



$                 0.32



$                 0.84



$                 0.65

Basic net (loss) income per common share from discontinued operations

(0.12)



(0.01)



(0.07)



-

  Basic net income per common share

$                 0.12



$                 0.30



$                 0.77



$                 0.65

















Diluted net income per common share from continuing operations

$                 0.24



$                 0.31



$                 0.83



$                 0.64

Diluted net (loss) income per common share from discontinued operations

(0.12)



(0.01)



(0.07)



-

  Diluted net income per common share

$                 0.12



$                 0.30



$                 0.76



$                 0.64

















Shares used in the calculation of net income per common share:













Basic

103,918



103,687



103,821



103,584

Diluted

104,503



104,246



104,473



104,232

 

 

THE HAIN CELESTIAL GROUP, INC.

 Reconciliation of GAAP Results to Non-GAAP Measures 

 (unaudited and in thousands, except per share amounts) 









































Three Months Ended March 31,





2018 GAAP

Adjustments

2018 Adjusted



2017 GAAP

Adjustments

2017 Adjusted





































Net sales



$            632,720

$                       -

$            632,720



$            588,798

$                       -

$            588,798

Cost of sales



499,707

(12,640)

487,067



449,595

-

449,595

Gross profit



133,013

12,640

145,653



139,203

-

139,203

Operating expenses (a) 



95,615

(5,971)

89,644



80,375

-

80,375

Acquisition related expenses, restructuring,

  integration and other charges



4,831

(4,831)

-



2,083

(2,083)

-

Accounting review and remediation costs, net of

  insurance proceeds



3,313

(3,313)

-



7,124

(7,124)

-

Operating income



29,254

26,755

56,009



49,621

9,207

58,828

Interest and other expenses (income), net (b) 



5,222

1,465

6,687



7,471

(1,791)

5,680

Provision (benefit) for income taxes



(1,310)

11,946

10,636



9,149

7,480

16,629

  Net income from continuing operations



25,241

13,344

38,585



32,824

3,518

36,342

  Net (loss) income from discontinued operations, net of tax

(12,555)

12,555

-



(1,496)

1,496

-

Net income



12,686

25,899

38,585



31,328

5,014

36,342



















Diluted net income per common share from continuing

  operations



0.24

0.13

0.37



0.31

0.03

0.35

Diluted net (loss) income per common share from

  discontinued operations



(0.12)

0.12

-



(0.01)

0.01

-

Diluted net income per common share



0.12

0.25

0.37



0.30

0.05

0.35





































Detail of Adjustments:

































Three Months Ended

March 31, 2018







Three Months Ended

March 31, 2017





















2018 Project Terra SKU rationalization





$                  4,913







$                         -



Plant closure related costs





3,246







-



Losses on terminated chilled desserts contract





2,939







-



Co-packer disruption





952







-



Machine break-down costs





317







-



Recall and other related costs





273







-



Cost of sales





12,640







-





















Gross profit





12,640







-





















Long-lived asset impairment charge associated with

  plant closure





4,839







-



Toys "R" Us bad debt





897







-



Litigation expenses





235







-



Operating expenses (a)





5,971







-





















Acquisition related expenses, restructuring,

  integration and other charges





4,831







2,083



Acquisition related expenses, restructuring,

  integration and other charges





4,831







2,083







































Accounting review and remediation costs





3,313







7,124



Accounting review and remediation costs, net of insurance proceeds





3,313







7,124





















Operating income





26,755







9,207





















Unrealized currency (gains) and losses





(1,465)







1,791



Interest and other expenses (income), net (b) 





(1,465)







1,791





















Income tax related adjustments





(11,946)







(7,480)



Provision (benefit) for income taxes





(11,946)







(7,480)





















  Net income from continuing operations





$                13,344







$                  3,518





















(a)Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and long-lived asset impairment.

(b)Interest and other expenses (income), net include interest and other financing expenses, net and other (income)/expense, net.

 

 

THE HAIN CELESTIAL GROUP, INC.

 Reconciliation of GAAP Results to Non-GAAP Measures 

 (unaudited and in thousands, except per share amounts) 









































Nine Months Ended March 31,





2018 GAAP

Adjustments

2018 Adjusted



2017 GAAP

Adjustments

2017 Adjusted





































Net sales



$          1,838,171

$                     -

$          1,838,171



$          1,740,614

$                     -

$          1,740,614

Cost of sales



1,447,820

(21,856)

1,425,964



1,365,080

(6,264)

1,358,816

Gross profit



390,351

21,856

412,207



375,534

6,264

381,798

Operating expenses (a) 



280,735

(10,122)

270,613



250,544

(3,574)

246,970

Acquisition related expenses, restructuring,

  integration and other charges



13,750

(13,750)

-



2,652

(2,652)

-

Accounting review and remediation costs, net of

  insurance proceeds



6,406

(6,406)

-



20,089

(20,089)

-

Operating income



89,460

52,134

141,594



102,249

32,579

134,828

Interest and other expenses (income), net (b) 



14,096

5,170

19,266



15,737

1,486

17,223

Provision (benefit) for income taxes



(11,516)

40,389

28,873



19,512

15,551

35,063

  Net income from continuing operations



86,984

6,575

93,559



67,045

15,542

82,587

  Net (loss) income from discontinued operations, net of tax

(7,349)

7,349

-



72

(72)

-

Net income



79,635

13,924

93,559



67,117

15,470

82,587



















Diluted net income per common share from continuing

  operations



0.83

0.06

0.90



0.64

0.15

0.79

Diluted net (loss) income per common share from

  discontinued operations



(0.07)

0.07

-



-

-

-

Diluted net income per common share



0.76

0.13

0.90



0.64

0.15

0.79























































Detail of Adjustments:























Nine Months Ended

March 31, 2018







Nine Months Ended

March 31, 2017





















Losses on terminated chilled desserts contract





$                6,553







$                     -



2018 Project Terra SKU rationalization





4,913







-



Plant closure related costs





3,946







464



Co-packer disruption





3,692







-



U.K. start-up costs





1,155







-



Regulated packaging change





1,007







-



Machine break-down costs





317







-



Recall and other related costs





273







73



2017 Project Terra SKU rationalization





-







5,360



U.K. deferred synergies due to CMA Board decision





-







367



Cost of sales





21,856







6,264





















Gross profit





21,856







6,264





















Long-lived asset impairment charge associated with

  plant closure





8,290







-



Toys "R" Us bad debt





897







-



Stock compensation acceleration





700







-



Litigation expenses





235







-



Plant closure related costs





-







1,340



U.K. deferred synergies due to CMA Board decision





-







551



Recall and other related costs





-







736



Tilda fire insurance recovery costs and other

  setup/integration Costs





-







947



Operating expenses (a)





10,122







3,574





















Acquisition related expenses, restructuring,

  integration and other charges





13,750







2,652



Acquisition related expenses, restructuring,

  integration and other charges





13,750







2,652







































Accounting review and remediation costs, net of

  insurance proceeds





6,406







20,089



Accounting review and remediation costs, net of

insurance proceeds





6,406







20,089





















Operating income





52,134







32,579





















Unrealized currency (gains) and losses





(5,170)







(1,486)



Interest and other expenses, net (b) 





(5,170)







(1,486)





















Income tax related adjustments





(40,389)







(15,551)



Provision (benefit) for income taxes





(40,389)







(15,551)





















  Net income from continuing operations





$                6,575







$              15,542





















(a) Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and long-lived asset impairment.

(b) Interest and other expenses (income), net include interest and other financing expenses, net and other (income)/expense, net.

 

 

THE HAIN CELESTIAL GROUP, INC.





Net Sales Growth at Constant Currency





(unaudited and in thousands)



























Hain Consolidated



United Kingdom



Rest of World









 Net sales - Three months ended 3/31/18 

$           632,720



$           238,321



$           113,347









 Impact of foreign currency exchange 

(34,732)



(25,516)



(9,216)









 Net sales on a constant currency basis -

   Three months ended 3/31/18 

$           597,988



$           212,805



$           104,131





























Net sales - Three months ended 3/31/17

$           588,798



$           200,976



$            98,319









Net sales growth on a constant currency

   

1.6%



5.9%



5.9%































































Net Sales Growth at Constant Currency and Adjusted for Acquisitions, Divestitures and Other





























Hain Consolidated



United States



United Kingdom



Rest of World





Net sales on a constant currency basis -

   Three months ended 3/31/18

$           597,988



$           281,052



$           212,805



$           104,131

























Net sales - Three months ended 3/31/17

$           588,798



$           289,503



$           200,976



$             98,319





     Acquisitions

6,581



-



6,208



373





     Divestitures

(2,617)



(2,617)



-



-





     Castle contract termination

(4,335)



-



(4,335)



-





     2017 Project Terra SKU rationalization

(3,994)



(3,994)



-



-





     2018 Project Terra SKU rationalization

(13,264)



(11,989)



-



(1,275)





     Inventory realignment

7,497



7,497



-



-





 Net sales on a constant currency basis adjusted for

   acquisitions, divestitures and other - Three months

   ended 3/31/17 

$           578,666



$           278,400



$           202,849



$            97,417





 Net sales growth on a constant currency

   basis adjusted for acquisitions, divestitures

   and other 

3.3%



1.0%



4.9%



6.9%



























Hain Daniels



Hain Celestial Canada



Hain Celestial Europe



Ella's Kitchen



Tilda

Net sales growth - Three months ended 3/31/18

17.2%



11.7%



25.1%



26.6%



19.6%

   Impact of foreign currency exchange 

(13.1)%



(4.9)%



(16.7)%



(14.0)%



(10.7)%

     Impact of acquisitions

(4.3)%



0.0%



0.0%



0.0%



0.0%

     Impact of castle contract termination

3.0%



0.0%



0.0%



0.0%



0.0%

 Net sales on a constant currency basis adjusted for

   acquisitions, divestitures and other - Three months

   ended 3/31/18 

2.8%



6.8%



8.4%



12.5%



8.8%

 

 

THE HAIN CELESTIAL GROUP, INC.

Historical Quarterly Adjusted EBITDA From Continuing Operations

(unaudited and in thousands)















Three Months Ended



12/31/2017



9/30/2017



6/30/2017



(dollars in thousands)

Net Income

$           47,103



$           19,846



$                313

Net income from discontinued operations

3,973



1,233



1,817

Net income (loss) from continuing operations

$           43,130



$           18,613



$           (1,504)













Provision (benefit) for income taxes

(17,690)



7,484



2,954

Interest expense, net

5,817



5,609



4,914

Depreciation and amortization

14,919



15,147



14,832

Equity in net income of equity method investees

(194)



(11)



(84)

Stock based compensation expense

4,158



3,164



2,139

Long-lived asset and tradename impairment

3,449



-



40,452

Unrealized currency (gains) and losses

(287)



(3,419)



14,056

EBITDA

$           53,302



$           46,587



$           77,759













Acquisition related expenses, restructuring, integration and other charges

4,070



4,850



6,095

Accounting review costs, net of insurance proceeds

4,451



(1,358)



9,473

Losses on terminated chilled desserts contract

2,142



1,472



2,583

U.K. start-up costs

422



737



-

Co-packer disruption

1,567



1,173



-

Regulated packaging change

1,007



-



-

Plant closure related costs

700



-



-

Realized currency gain on repayment of GBP denominated debt

-



-



(14,290)

Adjusted EBITDA

$           67,661



$           53,461



$           81,620

 

 

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/hain-celestial-reports-third-quarter-fiscal-year-2018-financial-results-300644149.html

SOURCE The Hain Celestial Group, Inc.

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