Hain upbeat on FY 2015 outlook

Hain upbeat on FY 2015 outlook

Hain Celestial, the US food group, has booked an increase in full-year profits thanks to "record" sales in the period.

Hain recorded net sales of US$2.15bn in the 12 months, a 24% increase on the prior year. During the fiscal year, Hain completed two acquisitions - Tilda and Rudi's Organic Bakery. The company also sold the non-core Grains Noirs foodservice business in Belgium.

Higher sales and the realisation of $50m in global productivity savings drove profit gains. Operating income was up 30.4% to $227.7m while net profit rose 22% to $139m.

President and CEO Irwin Simon commented: "Our business continues to benefit from strong growth trends in the organic and natural, better-for-you segment of consumer packaged goods as more consumers and retailers seek out our products. The success of our initiatives to drive profitable sales growth through distribution gains, strategic brand investments, new product innovation and accretive strategic acquisitions in complementary growth categories and geographies has positioned the company with a solid foundation to capitalise on the tremendous opportunities in front of us."

Looking to fiscal 2015, Hain said it expects to grow sales by 27-30% year-on-year, while earnings are expected to increase 17-23%.

Hain Celestial shares were up 9.24% at 13.39 ET.

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PERFORMANCE HIGHLIGHTS

Fourth Quarter Fiscal Year 2014

  • Record net sales of $583.8 million, a 26% increase
  • GAAP earnings per diluted share from continuing operations of $0.70, a 32% increase
  • Adjusted earnings per diluted share from continuing operations of $0.90, a 39% increase
  • Adjusted operating income of $73.9 million, 12.7% of net sales
  • Record adjusted EBITDA of $79.4 million, a 27% increase

Fiscal Year 2014

  • Record net sales of $2.154 billion, a 24% increase
  • GAAP earnings per diluted share from continuing operations of $2.83, a 12% increase
  • Adjusted earnings per diluted share from continuing operations of $3.17, a 25% increase
  • Adjusted operating income of $256.0 million, 11.9% of net sales
  • Record adjusted EBITDA of $300.0 million, a 27% increase
  • Operating free cash flow reached $143.2 million for the 12-months ended June 30, 2014

"We completed our fiscal year with record net sales by delivering solid performance across brands and geographies, and I am pleased with the results," said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial.  "Our US business continued to generate strong results as momentum for organic and natural products builds across various channels of distribution.  Our UK business posted record sales with increased profit contribution and our Rest of World segment delivered high single digit sales growth." 

Fourth Quarter 2014
Worldwide net sales for the fourth quarter of fiscal year 2014 were a record $583.8 million, an increase of 26.0% compared to net sales of $463.5 million in the prior year fourth quarter.  Hain Celestial US reported record net sales of $323.0 million, a 13.2% increase.  In the United Kingdom net sales were a record $200.5 million.  The Rest of World segment reported net sales of $60.4 million.  The Company had strong brand contribution across various sales channels including Ella's Kitchen®, Garden of Eatin®, Imagine®, The Greek Gods®, Sensible Portions®, Terra®, Westbrae®, Spectrum® and Alba Botanica® in North America and Gale's®, Natumi®, Frank Cooper's®, SunRipe®, Hartley's®, Sun-Pat®, Linda McCartney®, and Cully & Sully® internationally.  The growth in net sales also resulted from sales of the Tilda® and Rudi's Organic Bakery® brands acquired earlier this year. 

The Company earned income from continuing operations of $35.7 million compared to $25.9 million in the prior year fourth quarter and reported earnings per diluted share from continuing operations of $0.70 compared to $0.53 in the prior year fourth quarter, a 32.1% increase.  Adjusted income from continuing operations was $46.0 million compared to $31.7 million, a 45.3% increase, and adjusted earnings per diluted share from continuing operations was $0.90 compared to $0.65, a 38.5% increase, from the prior year fourth quarter.  Adjusted EBITDA reached a record $79.4 million during the fourth quarter.  Refer to Non-GAAP Financial Measures for adjustments.

Fiscal Year 2014 
Worldwide net sales for fiscal year 2014 were a record $2.154 billion, an increase of 24.2% compared to net sales of $1.735 billion in the prior year.  Hain Celestial US reported record net sales of $1.282 billion, a 17.0% increase.  In the United Kingdom, net sales were a record $637.5 million.  The Rest of World segment net sales were a record $234.0 million.  The Company had strong brand contribution across various sales channels led by Ella's Kitchen, BluePrint®, Garden of Eatin', The Greek Gods, Spectrum, Bearitos®, Sensible Portions, Imagine, Hain Pure Foods®, Earth's Best®, MaraNatha®, Arrowhead Mills® and Alba Botanica in North America and Frank Cooper's, Sun-Pat, Natumi, Danival®, Cully & Sully, Linda McCartney and Lima® internationally.  The growth in net sales also resulted from sales of the Tilda and Rudi's Organic Bakery brands acquired earlier this year and the full year contribution of Ella's Kitchen, BluePrint and UK grocery brands acquired in fiscal year 2013.

The Company earned income from continuing operations of $141.5 million compared to $119.8 million in the prior year and reported earnings per diluted share from continuing operations of $2.83 compared to $2.52 in the prior year, a 12.3% increase.  Adjusted income from continuing operations was $158.6 million compared to $120.2 million, a 32.0% increase, and adjusted earnings per diluted share from continuing operations was $3.17 compared to $2.53 in the prior year, a 25.3% increase.  Adjusted EBITDA reached a new high of$300.0 million for the fiscal year ended June 30, 2014.  Operating free cash flow reached a record $143.2 million for the 12 months ended June 30, 2014.  Refer to Non-GAAP Financial Measures for adjustments.

Fiscal Year 2014 Highlights

The Company highlighted several of its accomplishments during fiscal year 2014:

  • Completed two strategic acquisitions:

- Tilda, a leading premium 100% branded Basmati and specialty rice products company, which offers a range of over 60 dry rice and ready-to-heat branded products principally in the United Kingdom, the Middle East and North Africa, Continental Europe,North America and India;

- Rudi's Organic Bakery, a leading organic and gluten-free company, which offers a range of USDA-certified organic and gluten-free bread and baked goods in the United States and Canada;

  • Worldwide net sales surpassed $2 billion;
  • Introduced over 200 new innovative products worldwide;
  • Hain Celestial AOC US consumption as measured by AC Nielsen was 10.8% for the 52-weeks ended July 5, 2014;
  • Delivered in excess of $50 million in worldwide productivity savings;
  • Achieved record adjusted EBITDA of $300.0 million;
  • Generated record operating free cash flow of $143.2 million; and
  • Divested non-core Grains Noirs foodservice business in Belgium.

The Company, through one of its subsidiaries, nSpired Natural Foods, Inc., initiated a voluntary recall on August 19, 2014 of certain lots of MaraNatha® almond butters and peanut butters, Arrowhead Mills® peanut butters and specific private label nut butters.  As a result of this voluntary recall, the Company has accrued costs of $6.0 million as of June 30, 2014. 

"Our business continues to benefit from strong growth trends in the organic and natural, better-for-you segment of consumer packaged goods as more consumers and retailers seek out our products.  The success of our initiatives to drive profitable sales growth through distribution gains, strategic brand investments, new product innovation and accretive strategic acquisitions in complementary growth categories and geographies has positioned the Company with a solid foundation to capitalize on the tremendous opportunities in front of us.  I'm also proud to once again have Hain Celestial ranked as one of FORTUNE's 100 Fastest Growing Companies, moving up to No. 61 in 2014, in recognition of  the tremendous growth in the Company's revenues and earnings over the last three years," concluded Irwin Simon.

Fiscal Year 2015 Guidance
The Company provided annual guidance for fiscal year 2015 including the July 2014 acquisition of Hain Pure Protein Corporation ("HPP") with approximately $230 million in net sales in fiscal year 2014, which is expected to be accretive by $0.03 to $0.05 per diluted share: 

  • Total net sales range of $2.725 billion to $2.80 billion; an increase of approximately 27% to 30% as compared to fiscal year 2014.
  • Earnings range of $3.72 to $3.90 per diluted share; an increase of 17% to 23% as compared to fiscal year 2014.

Guidance is provided for continuing operations on a non-GAAP basis and excludes acquisition-related expenses, integration and restructuring charges, factory start-up costs, unrealized net foreign currency gains or losses, reserves for litigation settlements and other non-recurring items that have been or may be incurred during the Company's fiscal year 2015, which the Company will continue to identify as it reports its future financial results.  Guidance excludes the impact of any future acquisitions.  Sales in the Company's second quarter are historically the highest, and the Company's earnings growth is expected to be the lowest in the first quarter and relatively consistent in the second, third and fourth quarters. 

Original source: Hain Celestial