Exhibit 99.1
Contact: Ira Lamel/Mary Anthes Jeremy Fielding/David Lilly
The Hain Celestial Group, Inc. Kekst and Company
631-730-2200 212-521-4800
THE HAIN CELESTIAL GROUP ANNOUNCES
RECORD SALES AND EARNINGS
Net Income Increases 19% to $12.7 Million
Sales Increase 10% to $186.2 Million
Earnings Per Share at $0.33 Versus $0.29
Melville, NY, February 2, 2006--The Hain Celestial Group, Inc. (NASDAQ HAIN), a
leading natural and organic food and personal care products company, today
reported results for the second quarter ended December 31, 2005. Hain Celestial
reported second quarter record sales of $186.2 million, a 10% increase over the
prior year's $169.8 million. Net income reached $12.7 million, a second quarter
record, an increase of 19% from the prior year's $10.7 million. Diluted earnings
for the second quarter this year were a record $0.33 per share as compared to
$0.29 in the prior year's second quarter.
"I am proud of our team as we accomplished record sales and profits with
significant improvement in operating margins and our cash conversion," said
Irwin D. Simon, President and Chief Executive Officer. "We saw strength in each
of our Grocery, Tea and Personal Care lines in both sales and consumption driven
by Earth's Best(R), Imagine(R) soups, Garden of Eatin'(R), Terra(R), Rice
Dream(R), WestSoy(R), Ethnic Gourmet(R), Celestial Seasonings(R), Jason(R) and
Zia Natural Skincare(R). We are also excited by the progress we are making on
the operating front with enhanced margins despite increased input costs. Our
sales and earnings continue to grow, driven by strong top line growth, improved
margins and focused working capital management."
The Company's gross profit for the second quarter was 32.3% versus 31.4% in the
prior year period before consolidation of the Company's lower margin Hain Pure
Protein joint venture, which reduced gross profit by 1.1%. Operating income grew
20.3% to $21.7 million versus $18.1 million in the period while selling, general
and administrative expenses decreased as a percentage of sales to 19.6% versus
the prior year's 20.7%.
Interest expense in the quarter was $0.4 million higher than in the prior year's
quarter with the increase coming from increased market rates and from higher
borrowings for acquisitions. There were no foreign exchange gains or losses in
the second quarter while the Company benefited from foreign exchange gains of
$0.6 million in the prior year's quarter. These items negatively impacted
earnings by $0.02 per share in the second quarter when compared to the prior
year.
The Company's average diluted shares outstanding during the second quarter were
38.4 million, an increase of 1.2 million shares or 3%, over the prior year's
quarter. This increase in shares was caused by the issuance of shares in the
acquisition of Spectrum Organic Products, Inc., the establishment of the
alliance with Yeo Hiap Seng Limited and incremental equivalent shares included
in the computation due to the higher market price of the Company's stock. The
higher share count reduced earnings by $0.01 per share in the second quarter
when compared to the prior year.
The Company's balance sheet remains strong with $142.3 million in working
capital and a current ratio of 2.5 to 1 at the end of the second quarter. Debt
as a percentage of equity was 19% with total equity at $578 million. The
Company's operating free cash flow (defined as cash provided by operating
activities less capital expenditures) increased by 79% to $23.9 million for the
trailing 12 months ended December 31, 2005 versus $13.3 million for the same
period of the prior year. The cash conversion cycle improved to 67 days this
period versus 82 days in the prior year period.
Mr. Simon concluded, "The stellar results that the Company achieved over the
past two years are a testament to the excellence of our people, our strong
brands and our positioning within a clear growth category. Our focus and
long-term strategy allow us to make the right decisions for our business today
and tomorrow. We are committed to growing our brand equity through targeted new
product introductions and realizing new distribution opportunities while
continuing to strengthen our management team. Hain Celestial will continue to be
the leader as the world moves toward A Healthy Way of Life(TM)."
FISCAL YEAR 2006 OUTLOOK
The Company updated its annual guidance for fiscal year 2006, adjusted only to
reflect the recently completed acquisition of Spectrum Organic Products on
December 16, 2005. The Company expects full fiscal year 2006 sales of $670
million to $690 million and earnings of $0.98 to $1.05 per share, as it
integrates Spectrum into its operations during the second half of its fiscal
year. The Company anticipates that Spectrum will be accretive to earnings
beginning in fiscal year 2007, with a neutral impact on earnings for the
remainder of this fiscal year as a result of higher interest costs and increased
shares issued in connection with the acquisition which will offset Spectrum's
otherwise positive contribution to operating income.
WEBCAST AND UPCOMING EVENTS
Hain Celestial will host a conference call and live webcast at 4:15 PM Eastern
Standard Time today to review its second quarter 2006 results via the Hain
Celestial corporate website, www.hain-celestial.com. On February 16, 2006 the
Company is scheduled to present at the JP Morgan Small Cap Conference, and on
March 16, 2006 the Company is scheduled to present at the Bank of America
Consumer Conference. These presentations, as well as the Company's earnings
conference call, will be available under the Investor Relations section of the
Company's website.
THE HAIN CELESTIAL GROUP
The Hain Celestial Group (NASDAQ: HAIN), headquartered in Melville, NY, is a
leading natural and organic food and personal care products company in North
America and Europe. Hain Celestial participates in almost all natural food
categories with well-known brands that include Celestial Seasonings(R), Terra
Chips(R), Garden of Eatin'(R), Health Valley(R), WestSoy(R), Earth's Best(R),
Arrowhead Mills(R), DeBoles(R), Hain Pure Foods(R), Raised Right(TM),
Hollywood(R), Spectrum Naturals(R), Spectrum Essentials(R), Walnut Acres
Organic(TM), Imagine Foods(R), Rice Dream(R), Soy Dream(R), Rosetto(R), Ethnic
Gourmet(R), Yves Veggie Cuisine(R), Lima(R), Biomarche(TM), Grains Noirs(R),
Natumi(R), JASON(R) and Zia(R) Natural Skincare. For more information, visit
www.hain-celestial.com.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements within and constitutes a
"Safe Harbor" statement under the Private Securities Litigation Act of 1995.
Except for the historical information contained herein, the matters discussed in
this press release are forward-looking statements that involve known and unknown
risks and uncertainties, which could cause our actual results to differ
materially from those described in the forward-looking statements. These risks
include but are not limited to general economic and business conditions; the
ability to implement business and acquisition strategies, integrate
acquisitions, and obtain financing for general corporate purposes; competition;
retention of key personnel; compliance with government regulations and other
risks detailed from time-to-time in the Company's reports filed with the
Securities and Exchange Commission, including the report on Form 10-K for the
fiscal year ended June 30, 2005. The forward-looking statements made in this
press release are current as of the date of this press release, and the Company
does not undertake any obligation to update forward-looking statements.
THE HAIN CELESTIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, June 30,
2005 2005
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 17,359 $ 24,139
Trade receivables, net 85,798 67,148
Inventories 104,743 76,497
Recoverable income taxes 2,590 2,575
Deferred income taxes 5,671 5,671
Other current assets 18,605 18,164
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Total current assets 234,766 194,194
Property, plant and equipment, net 97,507 88,204
Goodwill, net 393,837 350,833
Trademarks and other intangible assets, net 61,399 61,010
Other assets 12,193 12,895
------------ ------------
Total assets $ 799,702 $ 707,136
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 79,421 $ 65,922
Income taxes payable 9,009 1,139
Current portion of long-term debt 4,016 2,791
------------ ------------
Total current liabilities 92,446 69,852
Deferred income taxes 16,723 16,723
Long-term debt, less current portion 108,184 92,271
Minority Interest 4,790 -
------------ ------------
Total liabilities 222,143 178,846
Stockholders' equity:
Common stock 390 375
Additional paid-in capital 429,773 402,645
Retained earnings 147,999 127,967
Treasury stock (12,745) (12,745)
Foreign currency translation adjustment 12,142 10,048
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Total stockholders' equity 577,559 528,290
------------ ------------
Total liabilities and stockholders' equity $ 799,702 $ 707,136
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THE HAIN CELESTIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended December 31, Six Months Ended December 31,
------------------------------- -------------------------------
2005 2004 2005 2004
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(Unaudited) (Unaudited)
Net sales $ 186,227 $ 169,753 $ 347,324 $ 307,357
Cost of Sales 128,061 116,522 243,309 215,151
------------ ------------ ------------ ------------
Gross profit 58,166 53,231 104,015 92,206
SG&A expenses 36,445 35,173 69,540 63,358
------------ ------------ ------------ ------------
Operating income 21,721 18,058 34,475 28,848
Interest expense and other expenses 1,309 553 2,177 1,208
------------ ------------ ------------ ------------
Income before income taxes 20,412 17,505 32,298 27,640
Income tax provision 7,743 6,827 12,266 10,780
------------ ------------ ------------ ------------
Net income $ 12,669 $ 10,678 $ 20,032 $ 16,860
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Basic per share amounts $ 0.34 $ 0.29 $ 0.54 $ 0.46
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Diluted per share amounts $ 0.33 $ 0.29 $ 0.53 $ 0.46
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Weighted average common shares outstanding:
Basic 37,165 36,390 36,900 36,332
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Diluted 38,434 37,207 37,997 37,031
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