Second Quarter Financial Highlights:



  •  Net income increased 21% to $10.3 million; Revenues totaled $116 million
  • EBITDA increased to $20.9 million
  • Continued growth in rocket brands reflects successful implementation of Company’s strategy
  • Hain Celestial on track to deliver profitable growth in 2001

The Hain Celestial Group (Nasdaq: HAIN), the leading natural and organic food company, today announced a net profit of $10.3 million, or $0.30 per share on a diluted basis, for its second quarter ended December 31, 2000, an increase in net income of 21 percent compared to the same period the previous year. Net revenues for the second quarter totaled $116 million. EBITDA strengthened in the second quarter to $20.9 million, compared to $18.4 million in the same quarter of 1999.

Irwin D. Simon, Chairman, President and Chief Executive Officer of The Hain Celestial Group said, “Our performance this quarter demonstrates that Hain Celestial’s strategy and execution are solidly on track. I am especially pleased with the successful implementation of our strategy to grow grocery channel business through increased marketing and distribution. We are seeing major grocery customers around the country respond to consumer demand, and expand their offerings in natural and organic foods.”

“We are beginning to reap the rewards of our investments in marketing programs, personnel, processes and our commitment to growing our grocery business,” continued Mr. Simon. “In our second quarter, our rocket brands continued to show strong growth. Earth’s Best and Health Valley — two of the brands that we had targeted for strong growth in 2001 — increased sales by 12.5 percent and 10 percent respectively, compared with the same quarter last year.”

Following Celestial Seasonings‘ management changes, strategic refocus, and process improvements, tea sales increased by 7 percent in the second quarter compared to the same period of fiscal 2000, and DSO’s for Celestial Seasonings reduced dramatically. Terra Chips increased sales by 19 percent over the second quarter of 2000, and, just by meeting existing customer demand, Terra Chips reached capacity in the quarter. Consequently, the Company was unable to distribute Terra Chips to new customers, adversely impacting its revenue potential. Hain Celestial has already implemented steps to raise capacity, including new co-packer agreements and the construction of an additional plant, which is anticipated to open in the first half of next fiscal year.

Overall, in the second quarter Westsoy increased sales by 10 percent. The Company believes that an appropriate comparison with the second quarter of fiscal 2000 is not possible due to one-time events that positively impacted sales in that quarter. Last year, Westsoy benefited from pre-Y2K stockpiling, increased shipments to customers to backfill Q1 demand once Hain Celestial’s addition of a new co-packer’s facility came on-line in October 1999, and competitors’ manufacturing issues.

Previously-undertaken revitalizations of certain Hain brands resulted in improved second quarter performance for those brands. Garden of Eatin’ and Nile Spice both recorded double-digit growth in sales. However, both Hain and Arrowhead Mills experienced production issues in the second quarter that impacted the Company’s net sales.

Hain Celestial’s balance sheet improved significantly in the second quarter, with working capital totaling approximately $115.6 million, cash on hand of $47.3 million, a current ratio of 3.6:1; debt to equity at 1.6%; and total equity of $379.4 million.

“Having taken the steps necessary to realize the full potential of our core brands, we believe that this quarter’s positive momentum will carry through into the rest of 2001. Our recently-announced acquisition of Fruit Chips will provide us with additional opportunities in Europe, and we will continue to capitalize on our relationship with H.J. Heinz there. Hain Celestial will maintain its focus on the aggressive expansion of our distribution through the grocery channel, in addition to our traditional strength in the natural foods channel. We have also introduced exciting new products in the U.S. market, including new Westsoy refrigerated beverages and Earth’s Best Kidz, which will be launched in April,” said Mr. Simon.

Mr. Simon also stated that Hain Celestial is well positioned internally to generate the long-term, sustainable profitable growth in 2001 that the Company outlined in its first quarter earnings conference call.

About The Hain Celestial Group

The Hain Celestial Group, headquartered in Uniondale, NY, is a natural, specialty and snack food company. The Company is a leader in 13 of the top 15 natural food categories, with such well-known natural food brands as Celestial Seasonings® teas, Hain Pure Foods®, Westbrae®, Westsoy®, Arrowhead Mills®, Health Valley®, Breadshop’s®, Casbah®, Garden of Eatin®, Terra Chips®, DeBoles®, Earth’s Best®, and Nile Spice. The Company’s principal specialty product lines include Hollywood® cooking oils, Estee® sugar-free products, Weight Watchers® dry and refrigerated products, Kineret® kosher foods, Boston Better Snacks®, and Alba Foods®. The Hain Celestial Group’s website can be found at http://www.hain-celestial.com.

Statements made in this Press Release that are estimates of past or future performance are based on a number of factors, some of which are outside of the Company’s control. Statements made in this Press Release that state the intentions, beliefs, expectations or predictions of The Hain Celestial Group and its management for the future are forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in forward-looking statements is contained from time to time in filings of The Hain Celestial Group with the U.S. Securities and Exchange Commission. Copies of these filings may be obtained by contacting The Hain Celestial Group or the SEC.


  • THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  • CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
  • (In thousands, except per share amounts)

                                     Three Months Ended     Six Months Ended
December 31, December 31,
2000 1999 2000 1999
(Unaudited) (Unaudited)

Net Sales $116,025 $116,675 $209,678 $204,615
Cost of sales 62,297 60,472 115,542 115,081
Gross profit 53,728 56,203 94,136 89,534

Selling, general &
administrative expenses 35,116 39,169 62,401 70,285
Merger costs — — 1,032 —
Amortization of goodwill and
other intangible assets 1,674 1,727 3,248 3,297

Operating income 16,938 15,307 27,455 15,952

Other income, net 865 753 1,462 753
Interest and financing costs (104) (1,421) (175) (4,366)

Income before income taxes and
cumulative change in
accounting principle 17,699 14,639 28,742 12,339
Provision for income taxes 7,433 6,138 12,071 5,050

Income before cumulative change
in accounting principle 10,266 8,501 16,671 7,289

Cumulative change in accounting
principle, net of income
tax benefit of $2,547 — — — (3,754)

Net income $10,266 $8,501 $16,671 $3,535

Basic earnings per common
share:
Income before cumulative change
in accounting principle $0.31 $0.30 $0.51 $0.27
Cumulative change in
accounting principle — — — (0.14)

Net income $0.31 $0.30 $0.51 $0.13

Diluted earnings per common
share:
Income before cumulative change
in accounting principle $0.30 $0.28 $0.49 $0.25
Cumulative change in accounting
principle — — — (0.13)

Net income $0.30 $0.28 $0.49 $0.12

Weighted average common shares
outstanding:
Basic 33,038 28,613 32,667 26,744

Diluted 34,660 30,472 34,340 28,982

Supplementary Information:
EBITDA (Earnings before
Interest, Taxes,
Depreciation and Amortization) $20,922 $18,365 $35,104 $21,784

THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share and share amounts)

December 31, June 30,
2000 2000
ASSETS (Unaudited) (Note)
Current assets:
Cash $47,291 $38,308
Accounts receivable, less allowance
for doubtful accounts of $988 and $929 52,477 36,120
Inventories 48,048 48,139
Recoverable income taxes — 7,982
Deferred income taxes 8,724 8,724
Other current assets 4,041 3,611
Total current assets 160,581 142,884

Property, plant and equipment, net of
accumulated depreciation and
amortization of $22,269 and $19,471 43,492 39,340
Goodwill, net of accumulated
amortization of $15,625 and $13,109 185,695 188,212
Trademarks and other intangible
assets, net of accumulated
amortization of $6,182 and $5,594 38,750 39,086
Deferred financing costs, net of
accumulated amortization of $337
and $328 417 238
Other assets 6,291 6,257
Total assets $435,226 $416,017

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $36,896 $43,039
Income taxes payable, net 4,969 —

Accrued merger related charges 2,301 9,414
Current portion of long-term debt 857 681
Total current liabilities 45,023 53,134

Long-term debt, less current portion 5,221 5,622
Deferred income taxes 5,537 5,537

Total liabilities 55,781 64,293

Commitments and contingencies

Stockholders’ equity:
Preferred stock — $.01 par value,
authorized 5,000,000 shares, no
shares issued — —
Common stock — $.01 par value,
authorized 100,000,000
shares, issued 33,256,427 and
32,147,261 shares 333 321
Additional paid-in capital 337,679 326,641
Retained earnings 41,708 25,037
379,720 351,999
Less: 100,000 shares of treasury
stock, at cost (275) (275)
Total stockholders’ equity 379,445 351,724

Total liabilities and stockholders’
equity $435,226 $416,017

Note: The balance sheet at June 30, 2000 has been derived from the
audited financial statements at that date.