Exhibit 99.1
[THE HAIN CELESTIAL GROUP, INC. LOGO OMITTED]
Contacts:
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
THIRD QUARTER SALES AND EARNINGS
Net Income Increases 27% to $9.7 Million
Sales Increase 22% to Record $196.4 Million
Earnings Per Share Increase 19% to $0.25
Melville, NY, May 3, 2006--The Hain Celestial Group, Inc. (NASDAQ: HAIN), a
leading natural and organic food and personal care products company, today
reported strong sales and earnings growth for the third quarter ended March 31,
2006. Hain Celestial reported record sales of $196.4 million in its third
quarter, a 22% increase over the prior year's $161.3 million. Net income reached
$9.7 million, an increase of 27% from the prior year's $7.7 million. Diluted
earnings for the third quarter this year were $0.25 per share as compared to
$0.21 in the prior year's third 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 D. Simon, President and Chief Executive Officer of The Hain Celestial
Group. "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."
"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, Inc. 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."
The Company's gross margin for the third quarter was 30.4% versus 28.2% in the
prior year period before consolidation of the Company's lower margin Hain Pure
Protein joint venture, which reduced gross margin by 1.0%. Operating income grew
47% to $17.2 million versus $11.7 million in the prior year period while
selling, general and administrative expenses decreased as a percentage of sales
to 20.6% versus the prior year's 20.9%.
Interest expense and other expenses in the quarter were $0.4 million higher than
in the prior year's quarter due to increased market rates and from higher
borrowings for acquisitions.
The Company's average diluted shares outstanding during the third quarter were
39.5 million, an increase of 2.2 million shares or 6%, over the prior year's
quarter. This increase in shares was caused principally by the issuance of
shares in the December 2005 acquisition of Spectrum Organic Products, Inc. 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 third quarter when compared to the prior year.
The Company's balance sheet remains strong with $158.7 million in working
capital and a current ratio of 2.7 to 1 at the end of the third quarter. Debt as
a percentage of equity was 23% with total equity at $595 million at March 31,
2006. The cash conversion cycle improved to 70 days this period versus 78 days
in the prior year period.
"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," commented Mr. Simon. "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."
In separate press releases issued today, the Company announced the acquisition
of the fresh prepared foods business in Luton, England from the H.J. Heinz
Company and its exclusive negotiations to purchase the frozen meat-free business
including the Linda McCartney brand (under license). The Company also announced
the closing of a new Amended and Restated Credit Agreement with significantly
improved terms and the private placement of $150 million of senior notes due
2016.
FISCAL YEAR 2006 OUTLOOK
The Company anticipates revenues of $185 to $190 million and earnings of $0.22
to $0.23 per share for the fourth quarter to conclude its fiscal year ending
June 30, 2006. The Company's guidance anticipates sales contributions from the
recently acquired Spectrum Organic Products and the brands of Para Laboratories,
as well as from Hain Celestial United Kingdom, which are expected to be
accretive to earnings in fiscal year 2007.
WEBCAST AND UPCOMING EVENTS
Hain Celestial will host a conference call and live webcast at 9:00 AM Eastern
Daylight Time today to review its third quarter 2006 results. On June 7, 2006
the Company is scheduled to present at the Piper Jaffray Consumer Conference.
These events will be available under the Investor Relations section of the
Company's website at www.hain-celestial.com.
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), Zia(R) Natural Skincare, Queen Helene(R), Batherapy(R) and
Footherapy(R). 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 and integrate
acquisitions; 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)
March 31, June 30,
2006 2005
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 32,658 $ 24,139
Trade receivables, net 90,310 67,148
Inventories 102,608 76,497
Recoverable income taxes - 2,575
Deferred income taxes 5,671 5,671
Other current assets 20,684 18,164
----------- -----------
Total current assets 251,931 194,194
Property, plant and equipment, net 99,720 88,204
Goodwill, net 417,977 350,833
Trademarks and other intangible assets, net 61,376 61,010
Other assets 11,596 12,895
----------- -----------
Total assets $ 842,600 $ 707,136
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 79,805 $ 65,922
Income taxes payable 11,152 1,139
Current portion of long-term debt 2,322 2,791
----------- -----------
Total current liabilities 93,279 69,852
Deferred income taxes 16,723 16,723
Long-term debt, less current portion 133,002 92,271
Minority interest 4,716 -
----------- -----------
Total liabilities 247,720 178,846
Stockholders' equity:
Common stock 393 375
Additional paid-in capital 436,711 402,645
Retained earnings 157,747 127,967
Treasury stock (12,745) (12,745)
Foreign currency translation adjustment 12,774 10,048
----------- -----------
Total stockholders' equity 594,880 528,290
----------- -----------
Total liabilities and stockholders'
equity $ 842,600 $ 707,136
=========== ===========
THE HAIN CELESTIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended March 31, Nine Months Ended March 31,
---------------------------- ---------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
Net sales $ 196,443 $ 161,261 $ 543,767 $ 468,618
Cost of Sales 138,760 115,793 382,069 330,944
------------ ------------ ------------ ------------
Gross profit 57,683 45,468 161,698 137,674
SG&A expenses 40,444 33,740 109,984 97,098
------------ ------------ ------------ ------------
Operating income 17,239 11,728 51,714 40,576
Interest expense and other expenses 1,582 1,182 3,759 2,390
------------ ------------ ------------ ------------
Income before income taxes 15,657 10,546 47,955 38,186
Income tax provision 5,909 2,848 18,175 13,628
------------ ------------ ------------ ------------
Net income $ 9,748 $ 7,698 $ 29,780 $ 24,558
============ ============ ============ ============
Basic per share amounts $ 0.26 $ 0.21 $ 0.80 $ 0.68
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Diluted per share amounts $ 0.25 $ 0.21 $ 0.77 $ 0.66
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Weighted average common shares outstanding:
Basic 38,212 36,440 37,337 36,368
============ ============ ============ ============
Diluted 39,547 37,308 38,514 37,124
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