The Melville, NY-based natural and organic food producer Hain Celestial Group yesterday [Thursday] posted operating earnings of US$0.11 per share for its Q4 2002, ended 30 June, up from US$0.08 per share year on year and excluding restructuring and one-time items.
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Including these costs, Hain Celestial had a net loss of US$12.8m, or US$0.38 per share. In the prior year quarter, the company earned US$2.7m, or US$0.08 per share.
Q4 sales grew 21% to US$95.4m, compared with net sales of US$79.1m in the prior year period. The increase in revenue reflected higher unit volume from the company’s existing portfolio of brands and the contribution of acquisitions.
Irwin D. Simon, chairman, president and CEO, said: “I am pleased with our brands’ strong growth during the quarter, with particularly good contributions from our snack brands and our business in Europe. In this quarter, we also recorded some major distribution gains in the super-mass category of the retail channel, which includes large-scale merchandisers, club stores and food service. We achieved the 21% revenue growth despite a switch in distributors by Wild Oats, one of our major natural customers, which reduced our sales by about US$3-4m as the terminated distributor stopped buying for Wild Oats and reduced inventories. This impacted our earnings by about US$0.02 per share. We expect that our sales over the next year will recover as the new distributor fully meets Wild Oats’ orders.”
For the full year ended 30 June, Hain Celestial reported earnings of US$3m including Q4 restructuring and one-time items, or US$0.09 per share, compared with US$23.6m, or US$0.68 per share in the prior year. Net sales grew to US$396m, a 14.5% increase over prior year sales of US$345.7m.
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By GlobalDataSimon commented: “This was a challenging year of transition for our business. During 2002, we made the decisions necessary to position Hain Celestial to meet the rapidly growing demand for natural and organic food in the super-mass category of the retail channel. We are now ready to better realise that opportunity in 2003.
“At the same time, our accomplishments during the year – including the opening of our new Terra Chips manufacturing facility, the acquisitions of Lima and Bio Marche, the agreement to sell the Health Valley manufacturing operations, and numerous significant management changes – have enabled us to better meet growing demand. These steps, combined with a very strong balance sheet positions us well to achieve our planned results in 2003.”
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The company announced that Mo Siegel, founder of Celestial Seasonings and co-chairman, has decided to retire. Simon said: “We thank Siegel for his many contributions to Hain Celestial. His return to the company two years ago was an important factor in the successful integration of our two companies. We wish him every success in the future.”
Fran Daily, former CFO of Heinz North America, has meanwhile joined as executive VP, strategic planning and development. Daily will work on various projects for the Company, and will act as a liaison with H. J. Heinz to promote programs between the two companies. The company previously announced the appointment of David Yale to lead its snacks brands, and that Daniel Glickman, former Secretary of Agriculture, had joined the Board of Directors.
Reaffirming FY 2003 guidance
Simon concluded: “With 2002 behind us, we are focused on 2003, and look forward to achieving the guidance we previously provided of US$0.78-0.84 per share on revenues of US$450-470m. Our Q1 2003 operations should return results of US$0.14-0.17 per share, before continuing Health Valley restructuring and new business development charges.”
Consolidated Statements of Operations
(In US$000s, except per share amounts)
Three Months Ended Fiscal Year Ended
30 June 30 June
2002 2001 2002 2001
(Unaudited)
Net sales $95,436 $79,140 $395,954 $345,661
Cost of Sales 82,788 57,972 291,915 234,643
Gross profit 12,648 21,168 104,039 111,018
SG&A expenses 24,137 16,895 87,920 71,607
Restructuring and
nonrecurring charges 4,977 — 4,977 —
Impairment of property,
plant and equipment 3,878 3,878
Merger costs — — — 1,032
Operating (loss) income (20,344) 4,273 7,264 38,379
Interest expense (income),
net and other expenses 240 (343) 2,434 (2,292)
(Loss) income before income taxes (20,584) 4,616 4,830 40,671
Income tax (benefit) provision (7,788) 1,939 1,832 17,082
Net (loss) income $(12,796) $2,677 $2,998 $23,589
Basic per share amounts $(0.38) $0.08 $0.09 $0.71
Diluted per share amounts $(0.38) $0.08 $0.09 $0.68
Weighted average common
shares outstanding:
Basic 33,818 33,553 33,760 33,014
Diluted 33,818 34,650 34,744 34,544
