Hain Celestial has been given an extension into the new year to regain compliance with Nasdaq listing rules or consider a stock split.
The US food and drink manufacturer’s shares slipped below the exchange’s $1 minimum trading threshold stipulation in February, where they have remained since, despite this month’s deal to sell its international assets.
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President and CEO Alison Lewis agreed to offload what are essentially Hain Celestial’s operations in Europe to private-equity investor Aurelius as part of her strategy to simply the portfolio, focus on North America and return the group to profitability.
However, Lewis’s decision to also sell the company’s North American snacks business – the Garden Veggie Snacks, Terra chips and Garden of Eatin’ brands – in February, and the more recent disposal, has failed to revive the share price.
New Jersey-based Hain Celestial was given a delisting notice by Nasdaq in March because the company’s shares had remained under $1 for 30 consecutive trading days, falling foul of the listing rules requirement.
It was given 180 days to regain compliance to retain its listing on the Nasdaq Global Select Market, a period that expired on 21 September but with an extension over an equal timeframe built in.
Hain Celestial has now secured that extension until 22 March. However, before the expiry of the September deadline, the company requested a transfer to the Nasdaq Capital Market, which was granted with effect from 24 September.
That approval was based on its commitment to regain compliance or otherwise initiate a reverse stock split “if necessary”, according to a notice filed with the US Securities and Exchange Commission (SEC).
Following the transfer of shares, Nasdaq informed Hain Celestial the company will revert to compliance with listing rules if the stock trades above $1 for ten consecutive trading days during the extension period to 22 March.
Hain Celestial said in the SEC filing: “The company intends to continue to actively monitor the closing bid price of the company’s common stock and, if necessary, intends to take actions to resolve the deficiency during the second compliance period and regain compliance with the minimum bid-price requirement, including by effecting a reverse stock split if necessary.”
It added: “While the company is exercising diligent efforts to maintain the listing of its common stock on Nasdaq, there can be no assurance that the company will be able to regain or maintain compliance with Nasdaq listing standards.”
Hain Celestial’s shares have fallen more than 53% this year to close at $0.49 yesterday (28 September).
Following the disposal of the international assets, the company will be left with Celestial Seasonings teas, The Greek Gods yogurt and the Earth’s Best organic brand in tea, yogurt, and baby and kids foods. Spectrum Organic cooking oils, MaraNatha nut butters and Imagine broths will also remain.
Hain Celestial reported a loss of $531m for the year ended 30 June, driven by a pre-tax non-cash impairment charge of $496m.
For the first quarter to 30 September, the “better-for-you” brand maker posted a net loss of $21m, compared to a $20m loss a year earlier.
Meanwhile, in the same SEC filing, Hain Celestial said its senior vice president and chief accounting officer Michael Ragusa resigned last week, effective from 1 November.
CFO Lee Boyce will oversee the accounting role for the time being.
