LAKE SUCCESS, N.Y.,
Nov. 7, 2019 /PRNewswire/ -- The
Hain Celestial Group, Inc. (Nasdaq: 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 first quarter ended
September 30, 2019. The results
contained herein are presented with the Hain Pure Protein and Tilda
operating segments being treated as discontinued operations.
"We are pleased to report strong first quarter results that are
consistent with both our fiscal year 2020 guidance and the
long-term strategy we announced at our Investor Day last February,"
commented Mark L. Schiller, Hain
Celestial's President and Chief Executive Officer. "Our
transformational strategic plan to simplify the portfolio and
strengthen capabilities, while expanding margins and cash flow is
on track and we are confident in our ability to reinvigorate
top-line growth over time. We are reiterating our fiscal year 2020
guidance and look forward to creating shareholder value as we
continue to execute on our initiatives."
FINANCIAL HIGHLIGHTS1
Summary of First Quarter Results from Continuing
Operations2
- Net sales decreased 7% to $482.1
million or 5% on a constant currency basis compared to the
prior year period.
- When adjusted for Foreign Exchange and Acquisitions,
Divestitures and certain other items, including the Stock Keeping
Unit ("SKU") rationalization3, net sales decreased 1%
compared to the prior year period.
- Gross margin of 20.3%, a 320 basis point increase over the
prior year period.
- Adjusted gross margin of 20.9%, a 240 basis point increase over
the prior year period.
- Operating income of $2.5 million
compared to operating loss of $28.0
million in the prior year period.
- Adjusted operating income of $16.9
million compared to $17.0
million in the prior year period.
- Net loss of $5.0 million compared
to a net loss of $23.1 million in the
prior year period.
- Adjusted net income of $8.4
million compared to $9.0
million in prior year period.
- EBITDA of $17.7 million compared
to a loss of $11.3 million in the
prior year period.
- EBITDA margin of 3.7%, a 590 basis point improvement over the
prior year period.
- Adjusted EBITDA of $32.1
million compared to $28.7
million in the prior year period.
- Adjusted EBITDA margin of 6.7%, a 110 basis point increase
compared to the prior year period.
- Loss per diluted share of $0.05
compared to $0.22 in the prior year
period.
- Adjusted earnings per diluted share ("EPS") of $0.08 compared to $0.09 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 in the tables "Reconciliation of GAAP Results to
Non-GAAP Measures."
2 Unless otherwise noted all results included in
this press release are from continuing operations.
3 Refer to "Net Sales Growth at Constant Currency and
Adjusted for Acquisitions, Divestitures and Other" provided
herein.
|
SEGMENT HIGHLIGHTS FROM CONTINUING OPERATIONS
Historically, the Company had three reportable segments:
United States, United Kingdom and Rest of World.
Effective July 1, 2019, the Company
reassessed its segment reporting structure, pursuant to which the
Company's Canada and Hain Ventures
operating segments, which were included within the Rest of World
reportable segment, were moved to the
United States reportable segment and renamed the
North America segment.
Additionally, the Europe operating
segment, which was included in the Rest of World reportable
segment, was combined with the United
Kingdom reportable segment and renamed the International
reportable segment. Accordingly, the Company now operates under two
reportable segments: North America
and International. Prior period segment information included herein
has been adjusted to reflect the Company's new reporting
structure.
North America
North America net sales in the
first quarter were $271.7 million, a
decrease of 7% over the prior year period. When adjusted for
Acquisitions, Divestitures and certain other items including the
SKU rationalization3, net sales decreased 1% over the
prior year period.
Segment gross profit in the first quarter was $62.4 million, a 26% increase over the
prior year period. Adjusted gross profit was $64.1 million, an increase of 17% over the prior
year period. Gross margin was 23.0%, a 600 basis point increase
over the prior year period and adjusted gross margin was 23.6%, a
470 basis point increase over the prior year.
Segment operating income in the first quarter was $15.1 million, a 236% increase from the prior
year period. Adjusted operating income was $19.0 million, a 68% increase over the prior year
period.
Segment EBITDA in the first quarter was $20.1 million, a 131% increase from the prior
year period. Adjusted EBITDA was $24.0
million, a 54% increase from the prior year period. As a
percent of sales on a constant currency basis, North America adjusted EBITDA margin was 8.8%,
a 350 basis point increase over the prior year period.
International
International net sales in the first
quarter were $210.4 million, a
decrease of 7% over the prior year period. When adjusted for
Foreign Exchange and Acquisitions, Divestitures and certain other
items3, net sales were flat compared to the prior year
period.
Segment gross profit in the first quarter was $35.5 million, a 10% decrease over the
prior year period. Adjusted gross profit was $36.5 million, a decrease of 10% over the prior
year period. Gross margin was 16.9%, a 40 basis point
decrease over the prior year period and adjusted gross margin was
17.4%, a 60 basis point decrease over the prior year
period.
Segment operating income was $9.1
million, a 61% increase over the prior year period.
Adjusted operating income was $11.5
million, a decrease of 7% over the prior year
period.
Segment EBITDA in the first quarter was $17.5 million, a 3% decrease from the prior year
period. Adjusted EBITDA was $19.7
million, a 1% decrease over the prior year period. As a
percent of sales on a constant currency basis, International
adjusted EBITDA margin was 9.4%, a 60 basis point increase over the
prior year period.
FISCAL YEAR 2020 GUIDANCE
The Company expects the
following for fiscal year 2020 pro forma results excluding the
contribution from its sale of Tilda®:
|
Fiscal Year
2020
|
|
Reported
|
Constant
Currency
|
Adjusted
EBITDA
|
$168 Million to $192
Million
|
$173 Million to $198
Million
|
% Growth
|
+2% to
+16%
|
+5% to
+20%
|
Adjusted
EPS
|
$0.59 to
$0.72
|
$0.62 to
$0.75
|
% Growth
|
-2% to
+20%
|
+3% to
+25%
|
Guidance, where adjusted, is provided on a non-GAAP basis and
excludes: acquisition and divestiture related expenses; integration
charges; restructuring charges, start-up costs, consulting fees and
other costs associated with the Company's productivity and
transformation initiatives; unrealized net foreign currency gains
or losses; and other non-recurring items that may be incurred
during the Company's fiscal year 2020, which the Company will
continue to identify as it reports its future financial results.
Guidance also excludes the impact of any future acquisitions,
divestitures, or share repurchases.
The Company cannot reconcile its expected Adjusted EBITDA to net
income or adjusted earnings per diluted share to earnings per
diluted share under "Fiscal Year 2020 Guidance" without
unreasonable 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.
Webcast Presentation
Hain Celestial will host a
conference call and webcast today at 8:30 AM
Eastern Time to discuss its results and business outlook.
The call will be webcast and the accompanying presentation 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 (Nasdaq: 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 Almond Dream®, Bearitos®, Better Bean®,
BluePrint®, Casbah®, Celestial Seasonings®, Clarks™, Coconut
Dream®, Cully & Sully®, Danival®, DeBoles®, Earth's Best®,
Ella's Kitchen®, Europe's
Best®, Farmhouse Fare™, Frank
Cooper's®, Gale's®, Garden of Eatin'®, GG UniqueFiber®, Hain
Pure Foods®, Hartley's®, Health Valley®, Imagine®, Johnson's Juice
Co.™, Joya®, Lima®, Linda McCartney® (under license),
MaraNatha®, Mary Berry (under
license), Natumi®, New Covent Garden Soup Co.®, Orchard House®,
Rice Dream®, Robertson's®, Rudi's Gluten-Free Bakery™, Rudi's
Organic Bakery®, Sensible Portions®, Spectrum® Organics, Soy
Dream®, Sun-Pat®, Sunripe®, Terra®, The Greek Gods®, Walnut Acres®,
Yorkshire Provender®, Yves Veggie Cuisine® and William's™. The
Company's personal care products are marketed under the Alba
Botanica®, Avalon Organics®, Earth's Best®, JASON®, Live
Clean® and Queen Helene® brands.
Safe Harbor Statement
Certain statements contained in
this press release constitute "forward-looking statements" within
the meaning of federal securities laws, including 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 matters. You can also identify
forward-looking statements by discussions of the Company's
strategic initiatives, including productivity and transformation,
the Company's Guidance for Fiscal Year 2020 and our future
performance and results of operations.
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 impact of competitive products and
changes to the competitive environment, changes to consumer
preferences, political uncertainty in the United Kingdom and the negotiation of its exit
from the European Union, consolidation of customers or the loss of
a significant customer, reliance on independent distributors,
general economic and financial market conditions, risks associated
with our international sales and operations, our ability to manage
our supply chain effectively, volatility in the cost of
commodities, ingredients, freight and fuel, our ability to execute
and realize cost savings initiatives, including SKU rationalization
plans, the impact of our debt and our credit agreements on our
financial condition and our business, our ability to manage our
financial reporting and internal control system processes,
potential liabilities due to legal claims, government
investigations and other regulatory enforcement actions, costs
incurred due to pending and future litigation, potential liability,
including in connection with indemnification obligations to our
current and former officers and members of our Board of Directors
that may not be covered by insurance, potential liability if our
products cause illness or physical harm, impairments in the
carrying value of goodwill or other intangible assets, our ability
to consummate divestitures, our ability to integrate past
acquisitions, the availability of organic ingredients, disruption
of operations at our manufacturing facilities, loss of one or more
independent co-packers, disruption of our transportation systems,
risks relating to the protection of intellectual property, the risk
of liabilities and claims with respect to environmental matters,
the reputation of our brands, our reliance on independent
certification for a number of our products, and other risks
detailed from time-to-time in the Company's reports filed with the
United States Securities and Exchange Commission, including our
most recent Annual Report on Form 10-K and our subsequent reports
on Forms 10-Q and 8-K. 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 Exchange,
Acquisitions and Divestitures and certain other items, including
SKU rationalization, as applicable in each case, adjusted operating
income, adjusted gross margin, adjusted net income, 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 ended September 30,
2019 and 2018 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 Operations 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 ended September 30,
2019 and 2018, Operating Free Cash Flow from continuing
operations was calculated as follows:
|
Three Months Ended
September 30,
|
|
2019
|
|
2018
|
|
(unaudited and
dollars in thousands)
|
|
|
|
|
Cash flow used in
operating activities - continuing operations
|
$
(3,581)
|
|
$
(19,570)
|
Purchases of
property, plant and equipment
|
(13,164)
|
|
(22,261)
|
Operating Free Cash
Flow - continuing operations
|
$
(16,745)
|
|
$
(41,831)
|
The Company's Operating Free Cash Flow from continuing
operations was negative $16.7 million
for the three months ended September 30,
2019, an increase of $25.1
million from the three months ended September 30, 2018. This increase resulted
primarily from a decrease of $9.1
million in capital expenditures, an improvement of
$8.2 million in net loss adjusted for
non-cash charges, and a decrease of $7.8
million of cash used in working capital accounts.
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 (loss) income from continuing
operations (a GAAP measure) before income taxes, net interest
expense, depreciation and amortization, equity in net loss (income)
of equity-method investees, stock-based compensation, net,
stock-based compensation expense in connection with the Company's
CEO succession plan, long-lived asset and intangible impairments
and unrealized currency gains and losses. The Company defines
segment EBITDA as operating income (a GAAP measure) before
depreciation and amortization, stock-based compensation, net and
long-lived asset impairments. Adjusted EBITDA is defined as EBITDA
before acquisition and divestiture 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 ended September 30,
2019 and 2018, EBITDA and Adjusted EBITDA from continuing
operations was calculated as follows:
|
Three Months Ended
September 30,
|
|
2019
|
|
2018
|
|
(unaudited and
dollars in thousands)
|
|
|
|
|
Net loss
|
$
(107,021)
|
|
$
(37,425)
|
Net loss from
discontinued operations
|
(102,068)
|
|
(14,338)
|
Net loss from
continuing operations
|
$
(4,953)
|
|
$
(23,087)
|
|
|
|
|
Benefit for income
taxes
|
(531)
|
|
(9,966)
|
Interest expense,
net
|
4,552
|
|
3,804
|
Depreciation and
amortization
|
13,923
|
|
12,860
|
Equity in net loss of
equity-method investees
|
317
|
|
175
|
Stock-based
compensation, net
|
2,737
|
|
(214)
|
Stock-based
compensation expense in connection with
Chief Executive Officer Succession Agreement
|
-
|
|
312
|
Long-lived asset
impairment
|
-
|
|
4,236
|
Unrealized currency
losses
|
1,684
|
|
590
|
EBITDA
|
$
17,729
|
|
$
(11,290)
|
|
|
|
|
|
|
|
|
Productivity and
transformation costs
|
14,175
|
|
10,333
|
Chief Executive
Officer Succession Plan expense, net
|
-
|
|
19,241
|
Proceeds from
insurance claims
|
(2,562)
|
|
-
|
Accounting review and
remediation costs
|
-
|
|
3,414
|
Warehouse/manufacturing facility start-up
costs
|
1,879
|
|
4,599
|
SKU
rationalization
|
(11)
|
|
-
|
Plant closure related
costs
|
832
|
|
1,828
|
Litigation and
related expenses
|
48
|
|
569
|
Adjusted
EBITDA
|
$
32,090
|
|
$
28,694
|
THE HAIN CELESTIAL
GROUP, INC.
|
Net Sales, Gross
Profit and Operating Income (Loss) by Segment
|
(unaudited and
in thousands)
|
|
|
|
|
|
|
North
America
|
International
|
Corporate/Other
|
Total
|
Net
Sales
|
|
|
|
|
Net sales - Three
months ended 9/30/19
|
$
271,701
|
$
210,375
|
$
-
|
$
482,076
|
Net sales - Three
months ended 9/30/18
|
$
291,191
|
$
227,287
|
$
-
|
$
518,478
|
% change - FY'20 net
sales vs. FY'19 net sales
|
(6.7)%
|
(7.4)%
|
|
(7.0)%
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
Three months ended
9/30/19
|
|
|
|
|
Gross
profit
|
$
62,361
|
$
35,470
|
$
-
|
$
97,831
|
Non-GAAP adjustments
(1)
|
1,725
|
1,076
|
-
|
2,801
|
Adjusted gross
profit
|
$
64,086
|
$
36,546
|
$
-
|
$
100,632
|
Gross
margin
|
23.0%
|
16.9%
|
|
20.3%
|
Adjusted gross
margin
|
23.6%
|
17.4%
|
|
20.9%
|
|
|
|
|
|
Three months ended
9/30/18
|
|
|
|
|
Gross
profit
|
$
49,624
|
$
39,284
|
$
-
|
$
88,908
|
Non-GAAP adjustments
(1)
|
5,329
|
1,533
|
-
|
6,862
|
Adjusted gross
profit
|
$
54,953
|
$
40,817
|
$
-
|
$
95,770
|
Gross
margin
|
17.0%
|
17.3%
|
|
17.1%
|
Adjusted gross
margin
|
18.9%
|
18.0%
|
|
18.5%
|
|
|
|
|
|
Operating income
(loss)
|
|
|
|
|
Three months ended
9/30/19
|
|
|
|
|
Operating income
(loss)
|
$
15,132
|
$
9,107
|
$
(21,784)
|
$
2,455
|
Non-GAAP adjustments
(1)
|
3,896
|
2,344
|
8,222
|
14,462
|
Adjusted operating
income (loss)
|
$
19,028
|
$
11,451
|
$
(13,562)
|
$
16,917
|
Operating income
margin
|
5.6%
|
4.3%
|
|
0.5%
|
Adjusted operating
income margin
|
7.0%
|
5.4%
|
|
3.5%
|
|
|
|
|
|
Three months ended
9/30/18
|
|
|
|
|
Operating income
(loss)
|
$
4,506
|
$
5,660
|
$
(38,130)
|
$
(27,964)
|
Non-GAAP adjustments
(1)
|
6,826
|
6,646
|
31,495
|
44,967
|
Adjusted operating
income (loss)
|
$
11,332
|
$
12,306
|
$
(6,635)
|
$
17,003
|
Operating income
(loss) margin
|
1.5%
|
2.5%
|
|
(5.4)%
|
Adjusted operating
income margin
|
3.9%
|
5.4%
|
|
3.3%
|
|
|
|
|
|
(1) See
accompanying table of "Reconciliation of GAAP Results to Non-GAAP
Measures"
|
|
|
THE HAIN CELESTIAL
GROUP, INC.
|
Consolidated
Balance Sheets
|
(unaudited and
in thousands)
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
|
|
2019
|
|
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
20,522
|
|
$
31,017
|
|
Accounts receivable,
net
|
206,478
|
|
209,990
|
|
Inventories
|
301,351
|
|
299,341
|
|
Prepaid expenses and
other current assets
|
36,508
|
|
51,391
|
|
Current assets of
discontinued operations
|
-
|
|
110,048
|
|
Total current
assets
|
564,859
|
|
701,787
|
Property, plant and
equipment, net
|
288,104
|
|
287,845
|
Goodwill
|
|
867,071
|
|
875,881
|
Trademarks and other
intangible assets, net
|
370,379
|
|
380,286
|
Investments and joint
ventures
|
18,463
|
|
18,890
|
Operating lease right
of use assets
|
81,830
|
|
-
|
Other
assets
|
45,727
|
|
58,764
|
Noncurrent assets of
discontinued operations
|
-
|
|
259,167
|
|
Total
assets
|
$
2,236,433
|
|
$
2,582,620
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
189,441
|
|
$
219,957
|
|
Accrued expenses and
other current liabilities
|
128,296
|
|
114,265
|
|
Current portion of
long-term debt
|
2,223
|
|
17,232
|
|
Current liabilities
of discontinued operations
|
-
|
|
31,703
|
|
Total current
liabilities
|
319,960
|
|
383,157
|
Long-term debt, less
current portion
|
323,386
|
|
613,537
|
Deferred income
taxes
|
33,685
|
|
34,757
|
Operating lease
liabilities, noncurrent portion
|
74,249
|
|
-
|
Other noncurrent
liabilities
|
14,215
|
|
14,489
|
Noncurrent
liabilities of discontinued operations
|
-
|
|
17,361
|
Total
liabilities
|
765,495
|
|
1,063,301
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
1,089
|
|
1,088
|
|
Additional paid-in
capital
|
1,161,537
|
|
1,158,257
|
|
Retained
earnings
|
587,557
|
|
695,017
|
|
Accumulated other
comprehensive loss
|
(168,894)
|
|
(225,004)
|
|
|
|
1,581,289
|
|
1,629,358
|
|
Treasury
stock
|
(110,351)
|
|
(110,039)
|
|
Total stockholders'
equity
|
1,470,938
|
|
1,519,319
|
|
Total liabilities and
stockholders' equity
|
$
2,236,433
|
|
$
2,582,620
|
THE HAIN CELESTIAL
GROUP, INC.
|
Consolidated
Statements of Operations
|
(unaudited and
in thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
2019
|
|
2018
|
|
|
|
|
Net sales
|
$
482,076
|
|
$
518,478
|
Cost of
sales
|
384,245
|
|
429,570
|
Gross
profit
|
97,831
|
|
88,908
|
Selling, general and
administrative expenses
|
80,680
|
|
75,977
|
Amortization of
acquired intangibles
|
3,083
|
|
3,359
|
Productivity and
transformation costs
|
14,175
|
|
10,333
|
Chief Executive
Officer Succession Plan expense, net
|
-
|
|
19,553
|
Proceeds from
insurance claims
|
(2,562)
|
|
-
|
Accounting review and
remediation costs
|
-
|
|
3,414
|
Long-lived asset
impairment
|
-
|
|
4,236
|
Operating income
(loss)
|
2,455
|
|
(27,964)
|
Interest and other
financing expense, net
|
6,294
|
|
4,314
|
Other expense,
net
|
1,328
|
|
600
|
Loss from continuing
operations before income taxes and equity
in net loss of equity-method investees
|
(5,167)
|
|
(32,878)
|
Benefit for income
taxes
|
(531)
|
|
(9,966)
|
Equity in net loss of
equity-method investees
|
317
|
|
175
|
Net loss
from continuing operations
|
$
(4,953)
|
|
$
(23,087)
|
Net loss
from discontinued operations, net of tax
|
(102,068)
|
|
(14,338)
|
Net loss
|
$
(107,021)
|
|
$
(37,425)
|
|
|
|
|
Net loss per common
share:
|
|
|
|
Basic net loss per
common share from continuing
operations
|
$
(0.05)
|
|
$
(0.22)
|
Basic net loss per
common share from discontinued
operations
|
(0.98)
|
|
(0.14)
|
Basic
net loss per common share
|
$
(1.03)
|
|
$
(0.36)
|
|
|
|
|
Diluted net loss per
common share from continuing operations
|
$
(0.05)
|
|
$
(0.22)
|
Diluted net loss per
common share from discontinued operations
|
(0.98)
|
|
(0.14)
|
Diluted
net loss per common share
|
$
(1.03)
|
|
$
(0.36)
|
|
|
|
|
Shares used in the
calculation of net loss per common share:
|
|
|
|
Basic
|
104,225
|
|
103,962
|
Diluted
|
104,225
|
|
103,962
|
THE HAIN CELESTIAL
GROUP, INC.
|
Consolidated
Statements of Cash Flows
|
(unaudited and
dollars in thousands)
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
2019
|
|
2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net loss
|
$
(107,021)
|
|
$
(37,425)
|
Net loss
from discontinued operations
|
(102,068)
|
|
(14,338)
|
Net loss
from continuing operations
|
(4,953)
|
|
(23,087)
|
Adjustments to
reconcile net loss from continuing operations to net cash used
in
operating activities from continuing operations:
|
|
|
|
Depreciation and
amortization
|
13,923
|
|
12,860
|
Deferred income
taxes
|
(4,404)
|
|
(13,218)
|
Chief Executive
Officer Succession Plan expense, net
|
-
|
|
19,241
|
Equity in net loss of
equity-method investees
|
317
|
|
175
|
Stock-based
compensation, net
|
2,737
|
|
98
|
Long-lived asset
impairment
|
-
|
|
4,236
|
Other non-cash items,
net
|
1,764
|
|
841
|
Increase (decrease)
in cash attributable to changes in operating assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(853)
|
|
3,766
|
Inventories
|
(5,507)
|
|
(18,640)
|
Other current
assets
|
14,223
|
|
3
|
Other assets and
liabilities
|
144
|
|
(32)
|
Accounts payable and
accrued expenses
|
(20,972)
|
|
(5,813)
|
Net cash used in
operating activities - continuing operations
|
(3,581)
|
|
(19,570)
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Purchases of property
and equipment
|
(13,164)
|
|
(22,261)
|
Other
|
-
|
|
(652)
|
Net cash used in
investing activities - continuing operations
|
(13,164)
|
|
(22,913)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Borrowings under bank
revolving credit facility
|
80,000
|
|
70,000
|
Repayments under bank
revolving credit facility
|
(178,500)
|
|
(60,000)
|
Repayments under term
loan
|
(206,250)
|
|
(3,750)
|
Proceeds from
(funding of) discontinued operations entities
|
312,195
|
|
(3,111)
|
Borrowings
(repayments) of other debt, net
|
9
|
|
(776)
|
Shares withheld for
payment of employee payroll taxes
|
(312)
|
|
(979)
|
Net cash provided by
financing activities - continuing operations
|
7,142
|
|
1,384
|
Effect of exchange
rate changes on cash - continuing operations
|
(892)
|
|
(670)
|
CASH FLOWS FROM
DISCONTINUED OPERATIONS
|
|
|
|
Cash used in
operating activities
|
(8,026)
|
|
(14,587)
|
Cash provided by
(used in) investing activities
|
306,420
|
|
(1,921)
|
Cash (used in)
provided by financing activities
|
(306,366)
|
|
5,548
|
Effect of exchange
rate changes on cash - discontinued operations
|
(537)
|
|
(390)
|
Net cash flows used
in discontinued operations
|
(8,509)
|
|
(11,350)
|
Net decrease in cash
and cash equivalents
|
(19,004)
|
|
(53,119)
|
Cash and cash
equivalents at beginning of period
|
39,526
|
|
113,018
|
Cash and cash
equivalents at end of period
|
$
20,522
|
|
$
59,899
|
Less: cash and cash
equivalents of discontinued operations
|
-
|
|
(16,974)
|
Cash and cash
equivalents of continuing operations at end of period
|
$
20,522
|
|
$
42,925
|
THE HAIN CELESTIAL
GROUP, INC.
|
Reconciliation of GAAP Results to Non-GAAP
Measures
|
(unaudited and
in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
2019
GAAP
|
Adjustments
|
2019
Adjusted
|
|
2018
GAAP
|
Adjustments
|
2018
Adjusted
|
|
|
|
|
|
|
|
|
Net sales
|
$
482,076
|
-
|
$
482,076
|
|
$
518,478
|
-
|
$
518,478
|
Cost of
sales
|
384,245
|
(2,801)
|
381,444
|
|
429,570
|
(6,862)
|
422,708
|
Gross
profit
|
97,831
|
2,801
|
100,632
|
|
88,908
|
6,862
|
95,770
|
Operating expenses
(a)
|
83,763
|
(48)
|
83,715
|
|
83,572
|
(4,805)
|
78,767
|
Productivity and
transformation costs
|
14,175
|
(14,175)
|
-
|
|
10,333
|
(10,333)
|
-
|
Chief Executive
Officer Succession Plan expense, net
|
-
|
-
|
-
|
|
19,553
|
(19,553)
|
-
|
Proceeds from
insurance claims
|
(2,562)
|
2,562
|
-
|
|
-
|
-
|
-
|
Accounting review and
remediation costs
|
-
|
-
|
-
|
|
3,414
|
(3,414)
|
-
|
Operating income
(loss)
|
2,455
|
14,462
|
16,917
|
|
(27,964)
|
44,967
|
17,003
|
Interest and other
expense (income), net (b)
|
7,622
|
(2,659)
|
4,963
|
|
4,914
|
(590)
|
4,324
|
(Benefit) provision
for income taxes
|
(531)
|
3,800
|
3,269
|
|
(9,966)
|
13,467
|
3,501
|
Net
(loss) income from continuing operations
|
(4,953)
|
13,321
|
8,368
|
|
(23,087)
|
32,090
|
9,003
|
Net
(loss) income from discontinued operations, net of tax
|
(102,068)
|
102,068
|
-
|
|
(14,338)
|
14,338
|
-
|
Net (loss)
income
|
(107,021)
|
115,389
|
8,368
|
|
(37,425)
|
46,428
|
9,003
|
|
|
|
|
|
|
|
|
Diluted net (loss)
income per common share from continuing operations
|
(0.05)
|
0.13
|
0.08
|
|
(0.22)
|
0.31
|
0.09
|
Diluted net (loss)
income per common share from discontinued operations
|
(0.98)
|
0.98
|
-
|
|
(0.14)
|
0.14
|
-
|
Diluted
net (loss) income per common share
|
(1.03)
|
1.11
|
0.08
|
|
(0.36)
|
0.45
|
0.09
|
|
|
|
|
|
|
|
|
Detail of
Adjustments:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30, 2019
|
|
|
|
Three Months
Ended
September 30, 2018
|
|
Warehouse/manufacturing facility start-up
costs
|
|
$
1,879
|
|
|
|
$
4,599
|
|
Plant closure related
costs
|
|
933
|
|
|
|
2,263
|
|
SKU
rationalization
|
|
(11)
|
|
|
|
-
|
|
Cost of
sales
|
|
2,801
|
|
|
|
6,862
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
2,801
|
|
|
|
6,862
|
|
|
|
|
|
|
|
|
|
Long-lived asset
impairment charge associated with plant closure
|
|
-
|
|
|
|
4,236
|
|
Litigation and
related expenses
|
|
48
|
|
|
|
569
|
|
Operating expenses
(a)
|
|
48
|
|
|
|
4,805
|
|
|
|
|
|
|
|
|
|
Productivity and
transformation costs
|
|
14,175
|
|
|
|
10,333
|
|
Productivity and
transformation costs
|
|
14,175
|
|
|
|
10,333
|
|
|
|
|
|
|
|
|
|
Chief Executive
Officer Succession Plan expense, net
|
|
-
|
|
|
|
19,553
|
|
Chief Executive
Officer Succession Plan expense, net
|
|
-
|
|
|
|
19,553
|
|
|
|
|
|
|
|
|
|
Proceeds from
insurance claims
|
|
(2,562)
|
|
|
|
-
|
|
Proceeds from
insurance claims
|
|
(2,562)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Accounting review and
remediation costs
|
|
-
|
|
|
|
3,414
|
|
Accounting review and
remediation costs
|
|
-
|
|
|
|
3,414
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
14,462
|
|
|
|
44,967
|
|
|
|
|
|
|
|
|
|
Unrealized currency
losses
|
|
1,684
|
|
|
|
590
|
|
Deferred financing
cost write-off
|
|
975
|
|
|
|
-
|
|
Interest and other
expense (income), net (b)
|
|
2,659
|
|
|
|
590
|
|
|
|
|
|
|
|
|
|
Income tax related
adjustments
|
|
(3,800)
|
|
|
|
(13,467)
|
|
(Benefit) provision
for income taxes
|
|
(3,800)
|
|
|
|
(13,467)
|
|
|
|
|
|
|
|
|
|
Net
(loss) income from continuing operations
|
|
$
13,321
|
|
|
|
$
32,090
|
|
|
|
|
|
|
|
|
|
(a)Operating expenses include amortization
of acquired intangibles, selling, general, and administrative
expenses and long-lived asset impairment.
|
(b)Interest and other expense (income),
net includes interest and other financing expenses, net and other
expense (income), net.
|
THE HAIN CELESTIAL
GROUP, INC.
|
Net Sales Growth
at Constant Currency
|
(unaudited and
dollars in thousands)
|
|
|
|
|
|
|
|
Hain
Consolidated
|
|
North
America
|
|
International
|
Net sales -
Three months ended 9/30/19
|
$
482,076
|
|
$
271,701
|
|
$
210,375
|
Impact of
foreign currency exchange
|
11,694
|
|
356
|
|
11,338
|
Net sales on a
constant currency basis -
Three months ended 9/30/19
|
$
493,770
|
|
$
272,057
|
|
$
221,713
|
|
|
|
|
|
|
Net sales - Three
months ended 9/30/18
|
$
518,478
|
|
$
291,191
|
|
$
227,287
|
Net sales growth on a
constant currency basis
|
(4.8)%
|
|
(6.6)%
|
|
(2.5)%
|
|
|
|
|
|
|
Net Sales Growth
at Constant Currency and Adjusted for Acquisitions, Divestitures
and Other
|
|
|
|
|
|
|
|
Hain
Consolidated
|
|
North
America
|
|
International
|
Net sales on a
constant currency basis -
Three months ended 9/30/19
|
$
493,770
|
|
$
272,057
|
|
$
221,713
|
|
|
|
|
|
|
Net sales - Three
months ended 9/30/18
|
$
518,478
|
|
$
291,191
|
|
$
227,287
|
Divestitures
|
(1,931)
|
|
(1,931)
|
|
-
|
SKU
rationalization
|
(19,470)
|
|
(13,789)
|
|
(5,681)
|
Net sales on a
constant currency basis adjusted for
acquisitions, divestitures and other - Three months
ended 9/30/18
|
$
497,077
|
|
$
275,471
|
|
$
221,606
|
Net sales
growth on a constant currency
basis adjusted for acquisitions, divestitures and
other
|
(0.7)%
|
|
(1.2)%
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Growth at Constant Currency
|
|
|
|
|
|
|
|
Hain
Consolidated
|
|
North
America
|
|
International
|
Adjusted EBITDA
- Three months ended 9/30/19
|
$
32,090
|
|
$
24,039
|
|
$
19,711
|
Impact of
foreign currency exchange
|
1,071
|
|
35
|
|
1,036
|
Adjusted EBITDA
on a constant currency basis -
Three months ended 9/30/19
|
$
33,161
|
|
$
24,074
|
|
$
20,747
|
|
|
|
|
|
|
Net sales on a
constant currency basis -
Three months ended 9/30/19
|
$
493,770
|
|
$
272,057
|
|
$
221,713
|
Adjusted EBITDA
growth on a constant currency basis
|
6.7%
|
|
8.8%
|
|
9.4%
|
THE HAIN CELESTIAL
GROUP, INC.
|
Segment EBITDA and
Adjusted EBITDA
|
Three Months
Ended
|
(unaudited and
dollars in thousands)
|
|
|
|
|
North
America
|
|
|
|
|
|
September 30,
2019
|
|
September 30,
2018
|
|
|
|
|
Operating
Income
|
$
15,132
|
|
$
4,506
|
Depreciation and
amortization
|
4,348
|
|
4,275
|
Long-lived asset
impairment
|
-
|
|
(7)
|
Other
|
665
|
|
(45)
|
EBITDA
|
$
20,145
|
|
$
8,729
|
Productivity and
transformation costs
|
2,168
|
|
1,504
|
Warehouse/manufacturing facility start-up
costs
|
1,879
|
|
4,599
|
Plant closure related
costs
|
37
|
|
729
|
SKU
rationalization
|
(190)
|
|
-
|
Adjusted
EBITDA
|
$
24,039
|
|
$
15,561
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
September 30,
2019
|
|
September 30,
2018
|
|
|
|
|
Operating
Income
|
$
9,107
|
|
$
5,660
|
Depreciation and
amortization
|
7,926
|
|
8,172
|
Long-lived asset
impairment
|
-
|
|
4,243
|
Other
|
432
|
|
(69)
|
EBITDA
|
$
17,465
|
|
$
18,006
|
Productivity and
transformation costs
|
1,272
|
|
853
|
Plant closure related
costs
|
795
|
|
1,099
|
SKU
rationalization
|
179
|
|
-
|
Litigation and
related expenses
|
-
|
|
19
|
Adjusted
EBITDA
|
$
19,711
|
|
$
19,977
|
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SOURCE The Hain Celestial Group, Inc.