The Hain Celestial Group today (3 May) reported strong earnings and sales growth for the third quarter, with sales up 22% from Q3 2005 to US$196.4m and net income of $9.7m, a 27% increase from the third quarter of last year. Diluted earnings were $.025 per share for the quarter.
“We are very pleased to once again report record sales and strong earnings, realizing substantial growth in sales, operating profits and net income,” said Irwin Simon, president and chief executive officer. “By nearly every measure, people across Hain Celestial delivered excellent performance this quarter while managing higher input and fuel-related costs and the challenges of unusually warm weather nationwide.”
The natural products company achieved gross margins of 30.4% for the quarter, compared to 28.2% for the same period last year. Operating income grew by 47% to $17.2m while selling, administrative and general expenses decreased as a percentage of sales to 20.6%.
“Our Grocery and Snacks unit remains strong, with impressive performance across its brands, including Earth’s Best(R), Garden of Eatin'(R), Terra(R), Rice Dream(R), WestSoy(R) and Imagine(R) soups. Celestial Seasonings(R) generated growth even with the effects of warmer weather, and we are quite pleased with our Personal Care unit, which after nearly two years of ownership is being led by strong growth in the Jason(R) brand with exciting new product introductions and with the new brands acquired from Para Laboratories. After a period of weak sales in Canada, we are pleased to see double digit growth in our brands lead by a quality management team at Hain Celestial Canada,” Simon said.
In the quarter, the company issues 2.2m new shares, increasing the total number of outstanding shares by 6% to 39.5m. This increase, the company said, was primarily the result of the issuance of shares in the December acquisition of Spectrum Organic Products.
“As we proceed with our long-term strategy of building our brands in the natural and organic category, we continue to make progress with our margin enhancement and cash conversion, the results of which continue to be demonstrated quarter by quarter in our operating results. The execution of our strategy is creating a foundation for sustainable top and bottom line growth,” Simon said.
“We are excited about our opportunities here in the United States and internationally, particularly with the announcement this morning of the establishment of a base of operations in the United Kingdom to expand our European reach. With our secure capital structure and a solid management team in place, Hain Celestial is well-positioned to grow as a leader in the natural and organic sector.”
The company anticipates revenues of between $185m and $190m, with earnings of $0.22 to $0.23 per share for the fourth quarter of this financial year.