Exhibit 99.1
Hain Celestial Reports Fourth Quarter and Fiscal Year 2019 Financial Results
Successful Continued Execution of Transformational Strategic Plan
Third Consecutive Quarter of Sequential Adjusted Margin Improvement
Provides Fiscal Year 2020 Guidance
Lake Success, NY, August 29, 2019—The Hain Celestial Group, Inc. (Nasdaq: HAIN) (“Hain Celestial” or the “Company”), a leading organic and natural products company with operations in North America, Europe, Asia and the Middle East providing consumers with A Healthier Way of Life™, today reported financial results for the fourth quarter and fiscal year ended June 30, 2019. The results contained herein are presented with the Hain Pure Protein operating segment being treated as a discontinued operation.
“We are pleased with our team’s solid execution on our transformational strategic plan during the fourth quarter. Our financial results demonstrate the third consecutive quarter of sequential adjusted margin improvement along with key operational improvements in the United States and internationally,” commented Mark L. Schiller, Hain Celestial’s President and Chief Executive Officer. “In a very short period of time, we have started to make significant progress on our key strategies in the United States including simplifying the portfolio, strengthening our core capabilities and expanding margins and cash flow. The team is delivering on the plan we outlined at our Investor Day in February which was to first get smaller and more profitable so that we could then focus our resources on reinvigorating profitable topline growth in a core set of brands by optimizingin-store assortment, building innovation and enhancing marketing. For fiscal 2020, we remain confident in our ability to generate significant further improvements in overall profit across our business and in building the foundation for future accelerated growth.”
FINANCIAL HIGHLIGHTS1
Summary of Fourth Quarter Results from Continuing Operations2
• | Net sales decreased 10% to $557.7 million compared to the prior year period. |
• | Net sales decreased 7% on a constant currency basis compared to the prior year period. |
• | When adjusted for Foreign Exchange and Acquisitions, Divestitures and certain other items, including the Project Terra Stock Keeping Unit (“SKU”) rationalization3, net sales decreased 6% compared to the prior year period. |
• | Gross margin of 19.0%, a 120 basis point decrease over the prior year period and a 190 basis point decrease from the third quarter of fiscal 2019. |
• | Adjusted gross margin of 23.0%, a 190 basis point increase over the prior year period and a 140 basis point increase from the third quarter of fiscal 2019. |
1 | This press release includes certainnon-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. Reconciliations ofnon-GAAP financial measures to GAAP financial measures are provided herein in the tables “Reconciliation of GAAP Results toNon-GAAP Measures.” |
2 | Unless otherwise noted all results included in this press release are from continuing operations. |
3 | Refer to “Net Sales Growth at Constant Currency and Adjusted for Acquisitions, Divestitures and Other” provided herein. |
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
• | Operating income of $0.7 million compared to $16.6 million in the prior year period and $23.9 million in the third quarter of fiscal 2019. |
• | Adjusted operating income of $40.5 million compared to $44.5 million in the prior year period and $38.9 million in the third quarter of fiscal 2019. |
• | Net loss of $7.7 million compared to $4.6 million in the prior year period and net income of $10.1 million in the third quarter of fiscal 2019. |
• | Adjusted net income of $22.4 million compared to $27.7 million in prior year period and $21.7 million in the third quarter of fiscal 2019. |
• | EBITDA of $25.9 million compared to $45.8 million in the prior year period and $41.5 million in the third quarter of fiscal 2019. |
• | EBITDA margin of 4.6%, a 280 basis point decrease compared to the prior year period and 230 basis point decrease from the third quarter of fiscal 2019. |
• | Adjusted EBITDA of $57.0 million compared to $61.4 million in the prior year period and $55.5 million in the third quarter of fiscal 2019. |
• | Adjusted EBITDA margin of 10.2%, a 30 basis point increase compared to the prior year period and a 90 basis point increase from the third quarter of fiscal 2019. |
• | Loss per diluted share of $0.07 compared to $0.04 in the prior year period and earnings per diluted share (“EPS”) of $0.10 in the third quarter of fiscal 2019. |
• | Adjusted EPS of $0.21 compared to $0.27 in the prior year period and $0.21 in the third quarter of fiscal 2019. |
Summary of Fiscal Year 2019 Results from Continuing Operations2
• | Net sales decreased 6% to $2,302.5 million compared to the prior year. |
• | Net sales decreased 4% on a constant currency basis compared to the prior year. |
• | When adjusted for Foreign Exchange and Acquisitions, Divestitures and certain other items, including the Project Terra SKU rationalization3, net sales decreased 2% compared to the prior year. |
• | Gross margin of 19.3%, a 170 basis point decrease over the prior year. |
• | Adjusted gross margin of 21.0%, a 110 basis point decrease over the prior year. |
• | Operating loss of $14.9 million compared to operating income of $106.0 million in the prior year. |
• | Adjusted operating income of $130.2 million compared to $186.1 million in the prior year. |
• | Net loss of $49.9 million compared to net income of $82.4 million in the prior year. |
• | Adjusted net income of $68.7 million compared to $121.3 million in prior year. |
• | EBITDA of $80.7 million compared to $197.2 million in the prior year. |
• | EBITDA margin of 3.5%, a 450 basis point decrease compared to the prior year. |
• | Adjusted EBITDA of $191.4 million compared to $255.9 million in the prior year. |
• | Adjusted EBITDA margin of 8.3%, a 210 basis point decrease compared to the prior year. |
• | Loss per diluted share of $0.48 compared to EPS of $0.79 in the prior year. |
• | Adjusted EPS of $0.66 compared to $1.16 in the prior year. |
SEGMENT HIGHLIGHTS FROM CONTINUING OPERATIONS
Hain Celestial United States
Hain Celestial United States net sales in the fourth quarter were $239.8 million, a decrease of 11% over the prior year period. When adjusted for Acquisitions, Divestitures and certain other items including the Project Terra SKU rationalization3, net sales decreased 8% over the prior year period. Segment operating loss in the fourth quarter was $2.6 million, a 114% decrease from the prior year period and a 115% decrease from the third quarter of fiscal 2019. Adjusted operating income was $20.3 million, a 12% decrease over the prior year period and a 7% decrease from the third quarter of fiscal 2019. Segment EBITDA in the fourth quarter was $6.0 million, a 73% decrease from the prior year period and a 71% decrease from the third quarter of fiscal 2019. Adjusted EBITDA was $24.2 million, a 10% decrease over the prior year period and a 5% decrease from the third quarter of 2019.
Hain Celestial United States net sales in fiscal year 2019 were $1,009.4 million, a decrease of 7% over the prior year. When adjusted for Acquisitions, Divestitures and certain other items including the Project Terra SKU rationalization3, net sales decreased 4% over the prior year. Segment operating income in fiscal year 2019 was $23.9 million, a 72%
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
decrease from the prior year. Adjusted operating income was $63.2 million, a 44% decrease over the prior year. Segment EBITDA in fiscal year 2019 was $44.6 million, a 59% decrease from the prior year. Adjusted EBITDA was $77.9 million, a 40% decrease over the prior year.
Hain Celestial United Kingdom
Hain Celestial United Kingdom net sales in the fourth quarter were $214.4 million, a decrease of 10% over the prior year period. When adjusted for Foreign Exchange, Acquisitions and Divestitures and certain other items3 net sales decreased 5% over the prior year period. The net sales decrease compared to the prior year period was driven by 14% and 7% declines from Hain Daniels and Ella’s Kitchen®, respectively, partially offset by 3% growth from Tilda®, or 9% and 2% declines from Hain Daniels and Ella’s Kitchen®, respectively, and 8% growth from Tilda®, after adjusting for Foreign Exchange, Acquisitions and Divestitures and certain other items3. The results for the United Kingdom segment compared to the prior year period were primarily driven by declines from the New Covent Garden Soup Co.®, Yorkshire Provender® and Johnson’s Juice Co.™ brands and private label sales, offset in part by growth in the Linda McCartney®, Hartley’s® and Cully & Sully® brands. Segment operating income was $15.6 million, an 18% decrease over the prior year period and a 14% decrease from the third quarter of fiscal 2019. Adjusted operating income was $22.3 million, an increase of 10% over the prior year period and a 17% increase from the third quarter of fiscal 2019. Segment EBITDA in the fourth quarter was $27.1 million, a 1% increase from the prior year period and a 5% increase from the third quarter of fiscal 2019. Adjusted EBITDA was $29.4 million, a 7% increase over the prior year period and 10% increase from the third quarter of 2019.
Hain Celestial United Kingdom net sales in fiscal year 2019 were $885.5 million, a decrease of 6% over the prior year. When adjusted for Foreign Exchange, Acquisitions and Divestitures and certain other items3 net sales decreased 1% over the prior year. The results for the United Kingdom segment compared to the prior year reflected a 9% decline in Hain Daniels, or 4% after adjusting for Foreign Exchange, Acquisitions and Divestitures and certain other items3, primarily driven by declines from the New Covent Garden Soup Co.® and Johnson’s Juice Co.™ brands and private label sales, offset in part by growth in the Linda McCartney® and Hartley’s® brands. This was partially offset by 3% growth from Tilda® and 1% growth from Ella’s Kitchen®, or 8% and 5% growth, respectively, after adjusting for Foreign Exchange, Acquisitions and Divestitures and certain other items3. Segment operating income was $52.4 million, a 7% decrease over the prior year. Adjusted operating income was $70.2 million, flat compared to the prior year. Segment EBITDA in fiscal year 2019 was $90.9 million, a 2% increase from the prior year. Adjusted EBITDA was $99.5 million, a 1% decrease over the prior year.
Rest of World
Rest of World net sales in the fourth quarter were $103.5 million, a decrease of 7% over the prior year period. When adjusted for Foreign Exchange, Acquisitions and Divestitures and certain other items3 net sales decreased 1% over the prior year period. Net sales for Hain Celestial Canada decreased 8% compared to the prior year period, or 2% after adjusting for Foreign Exchange, Acquisitions and Divestitures and certain other items3, primarily driven by declines from the Sensible Portions®, Europe’s Best® and Spectrum® Organics brands, offset in part by growth from the Live Clean® and Yves Veggie Cuisine® brands. Net sales for Hain Celestial Europe increased 1%, or 7% on a constant currency basis, primarily driven by growth from the Natumi® brand and private label sales, offset in part by declines from the Dream® and Joya® brands. Net sales for Hain Ventures, formerly known as Cultivate Ventures, decreased 29%, or 29% after adjusting for Acquisitions and Divestitures and certain other items3, primarily driven by declines from the BluePrint®, DeBoles® and SunSpire® brands, offset in part by growth from private label sales. Segment operating income in the fourth quarter was $5.7 million, a 29% decrease over the prior year period and a 47% decrease from the third quarter of fiscal 2019. Adjusted operating income was $11.2 million, a 13% increase over the prior year period and a 1% decrease from the third quarter of fiscal 2019. Segment EBITDA in the fourth quarter was $8.0 million, a 33% decrease from the prior year period and a 43% decrease from the third quarter of fiscal 2019. Adjusted EBITDA was $14.6 million, a 13% increase over the prior year period and a 1% increase from the third quarter of 2019.
Rest of World net sales in fiscal year 2019 were $407.6 million, a decrease of 6% over the prior year. When adjusted for Foreign Exchange, Acquisitions and Divestitures and certain other items3 net sales decreased 1% over the prior year. Net sales for Hain Celestial Canada decreased 8% compared to the prior year, or 2% after adjusting for Foreign Exchange, Acquisitions and Divestitures and certain other items3, primarily driven by declines from the Europe’s Best®, Dream® and Spectrum® Organics brands and private label sales, offset in part by growth from the Live
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
Clean®, Sensible Portions® and Yves Veggie Cuisine® brands. Net sales for Hain Celestial Europe decreased 1%, or increased 4% on a constant currency basis, primarily driven by strong performance from the Joya® and Natumi® brands and private label sales, offset in part by declines from the Lima®, Danival® and Dream® brands. Net sales for Hain Ventures, formerly known as Cultivate Ventures, decreased 20%, or 18% after adjusting for Acquisitions and Divestitures and certain other items3, primarily driven by declines from the BluePrint®, DeBoles® and SunSpire® brands, offset in part by growth from the GG UniqueFiber™ brand and private label sales. Segment operating income in fiscal year 2019 was $32.8 million, a 15% decrease over the prior year. Adjusted operating income was $41.0 million, a 4% decrease over the prior year. Segment EBITDA in fiscal year 2019 was $44.0 million, a 13% decrease from the prior year. Adjusted EBITDA was $53.3 million, flat compared to the prior year.
Hain Pure Protein Discontinued Operations
As previously disclosed on May 5, 2018, the results of operations, financial position and cash flows related to the operations of the Hain Pure Protein business segment have been moved to discontinued operations in the current and prior periods. On February 15, 2019, the Company completed the sale of substantially all of the assets used primarily for the Plainville Farms business and on June 28, 2019 the Company completed the sale of its equity interest in Hain Pure Protein Corporation, which included the FreeBird® and Empire Kosher® businesses. Net sales for Hain Pure Protein in the fourth quarter were $58.7 million, a decrease of 48% compared to the prior year period. Net loss from discontinued operations, net of tax in the fourth quarter was $5.9 million and included loss on sale of $0.6 million.
For fiscal year 2019, net sales for Hain Pure Protein were $408.1 million, a decrease of 20% compared to the prior year. Net loss from discontinued operations, net of tax for fiscal year 2019 was $133.4 million and included a $80.0 millionnon-cash impairment charge and a loss on sale of $30.0 million.
Fiscal Year 2020 Guidance
The Company expects the following for fiscal year 2020 pro forma results excluding the contribution from its recently announced completed sale of Tilda®:
Fiscal Year 2020 | ||||
Reported | Constant Currency | |||
Adjusted EBITDA | $168 Million to $192 Million | $173 Million to $198 Million | ||
% Growth | +2% to +16% | +5% to +20% | ||
Adjusted EPS | $0.59 to $0.72 | $0.62 to $0.75 | ||
% Growth | -2% to +20% | +3% to +25% |
Guidance, where adjusted, is provided on anon-GAAP basis and excludes acquisition-related expenses; integration charges; restructuring charges,start-up costs, consulting fees and other costs associated with Project Terra; unrealized net foreign currency gains or losses, and othernon-recurring items that may be incurred during the Company’s fiscal year 2020, which the Company will continue to identify as it reports its future financial results. Guidance also excludes the impact of any future acquisitions and divestitures.
The Company cannot reconcile its expected Adjusted EBITDA to net income or adjusted earnings per diluted share to earnings per diluted share under “Fiscal Year 2020 Guidance” without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company’s control and/or cannot be reasonably predicted at this time.
Contact:
James Langrock / Katie Turner
The Hain Celestial Group, Inc.
516-587-5000
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
(unaudited and dollars in thousands) | United States | United Kingdom | Rest of World | Corporate/ Other | Total | |||||||||||||||
Net Sales | ||||||||||||||||||||
Net sales - Three months ended 6/30/19 | $ | 239,821 | $ | 214,367 | $ | 103,494 | $ | — | $ | 557,682 | ||||||||||
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Net sales - Three months ended 6/30/18 | $ | 269,857 | $ | 239,061 | $ | 110,680 | $ | — | $ | 619,598 | ||||||||||
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% change - FY’19 net sales vs. FY’18 net sales | (11.1 | )% | (10.3 | )% | (6.5 | )% | (10.0 | )% | ||||||||||||
Operating income (loss) | ||||||||||||||||||||
Three months ended 6/30/19 | ||||||||||||||||||||
Operating (loss) income | $ | (2,585 | ) | $ | 15,591 | $ | 5,742 | $ | (18,008 | ) | $ | 740 | ||||||||
Non-GAAP adjustments (1) | 22,934 | 6,719 | 5,447 | 4,706 | 39,806 | |||||||||||||||
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Adjusted operating income (loss) | $ | 20,349 | $ | 22,310 | $ | 11,189 | $ | (13,302 | ) | $ | 40,546 | |||||||||
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Operating (loss) income margin | (1.1 | )% | 7.3 | % | 5.5 | % | 0.1 | % | ||||||||||||
Adjusted operating income margin | 8.5 | % | 10.4 | % | 10.8 | % | 7.3 | % | ||||||||||||
Three months ended 6/30/18 | ||||||||||||||||||||
Operating income (loss) | $ | 18,623 | $ | 18,984 | $ | 8,069 | $ | (29,096 | ) | $ | 16,580 | |||||||||
Non-GAAP adjustments(1) | 4,571 | 1,257 | 1,862 | 20,211 | 27,901 | |||||||||||||||
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Adjusted operating income (loss) | $ | 23,194 | $ | 20,241 | $ | 9,931 | $ | (8,885 | ) | $ | 44,481 | |||||||||
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Operating income margin | 6.9 | % | 7.9 | % | 7.3 | % | 2.7 | % | ||||||||||||
Adjusted operating income margin | 8.6 | % | 8.5 | % | 9.0 | % | 7.2 | % |
(1) | See accompanying table of “Reconciliation of GAAP Results toNon-GAAP Measures” |
(unaudited and dollars in thousands) | United States | United Kingdom | Rest of World | Corporate/ Other | Total | |||||||||||||||
Net Sales | ||||||||||||||||||||
Net sales - Twelve months ended 6/30/19 | $ | 1,009,406 | $ | 885,488 | $ | 407,574 | $ | — | $ | 2,302,468 | ||||||||||
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Net sales - Twelve months ended 6/30/18 | $ | 1,084,871 | $ | 938,029 | $ | 434,869 | $ | — | $ | 2,457,769 | ||||||||||
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% change - FY’19 net sales vs. FY’18 net sales | (7.0 | )% | (5.6 | )% | (6.3 | )% | (6.3 | )% | ||||||||||||
Operating (loss) income | ||||||||||||||||||||
Twelve months ended 6/30/19 | ||||||||||||||||||||
Operating income (loss) | $ | 23,864 | $ | 52,413 | $ | 32,820 | $ | (123,983 | ) | $ | (14,886 | ) | ||||||||
Non-GAAP adjustments (1) | 39,347 | 17,769 | 8,179 | 79,781 | 145,076 | |||||||||||||||
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Adjusted operating income (loss) | $ | 63,211 | $ | 70,182 | $ | 40,999 | $ | (44,202 | ) | $ | 130,190 | |||||||||
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Operating income (loss) margin | 2.4 | % | 5.9 | % | 8.1 | % | (0.6 | )% | ||||||||||||
Adjusted operating income margin | 6.3 | % | 7.9 | % | 10.1 | % | 5.7 | % | ||||||||||||
Twelve months ended 6/30/18 | ||||||||||||||||||||
Operating income (loss) | $ | 86,319 | $ | 56,046 | $ | 38,660 | $ | (74,985 | ) | $ | 106,040 | |||||||||
Non-GAAP adjustments(1) | 26,841 | 14,227 | 3,985 | 34,980 | 80,033 | |||||||||||||||
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Adjusted operating income (loss) | $ | 113,160 | $ | 70,273 | $ | 42,645 | $ | (40,005 | ) | $ | 186,073 | |||||||||
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Operating income margin | 8.0 | % | 6.0 | % | 8.9 | % | 4.3 | % | ||||||||||||
Adjusted operating income margin | 10.4 | % | 7.5 | % | 9.8 | % | 7.6 | % |
(1) | See accompanying table of “Reconciliation of GAAP Results toNon-GAAP Measures” |
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
Webcast Presentation
Hain Celestial will host a conference call and webcast today at 8:30 AM Eastern Time to discuss its results and business outlook. The call will be webcast and the accompanying presentation will be available under the Investor Relations section of the Company’s website atwww.hain.com.
About The Hain Celestial Group, Inc.
The Hain Celestial Group (Nasdaq: HAIN), headquartered in Lake Success, NY, is a leading organic and natural products company with operations in North America, Europe, Asia and the Middle East. Hain Celestial participates in many natural categories with well-known brands that include Almond Dream®, Arrowhead Mills®, Bearitos®, Better Bean®, BluePrint®, Casbah®, Celestial Seasonings®, Clarks™, Coconut Dream®, Cully & Sully®, Danival®, DeBoles®, Earth’s Best®, Ella’s Kitchen®, Europe’s Best®, Farmhouse Fare™, Frank Cooper’s®, Gale’s®, Garden of Eatin’®, GG UniqueFiber™, Hain Pure Foods®, Hartley’s®, Health Valley®, Imagine™, Johnson’s Juice Co.™, Joya®, Lima®, Linda McCartney® (under license), MaraNatha®, Mary Berry (under license), Natumi®, New Covent Garden Soup Co.®, Orchard House®, Rice Dream®, Robertson’s®, Rudi’s Gluten-Free Bakery™, Rudi’s Organic Bakery®, Sensible Portions®, Spectrum® Organics, Soy Dream®,Sun-Pat®, Sunripe®, SunSpire®, Terra®, The Greek Gods®, Walnut Acres®, WestSoy®, Yorkshire Provender®, Yves Veggie Cuisine® and William’s™. The Company’s personal care products are marketed under the Alba Botanica®, Avalon Organics®, Earth’s Best®, JASON®, Live Clean® and Queen Helene® brands.
Safe Harbor Statement
Certain statements contained in this press release constitute “forward-looking statements” within the meaning of federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictions based on expectations and projections about future events and are not statements of historical fact. You can identify forward-looking statements by the use of forward-looking terminology such as “plan”, “continue”, “expect”, “anticipate”, “intend”, “predict”, “project”, “estimate”, “likely”, “believe”, “might”, “seek”, “may”, “will”, “remain”, “potential”, “can”, “should”, “could”, “future” and similar expressions, or the negative of those expressions, or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of the Company’s strategic initiatives, including Project Terra, the Company’s Guidance for Fiscal Year 2020 and our future performance and results of operations.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, levels of activity, performance or achievements of the Company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). Such factors include, among others, the impact of competitive products and changes to the competitive environment, changes to consumer preferences, political uncertainty in the United Kingdom and the negotiation of its exit from the European Union, consolidation of customers or the loss of a significant customer, reliance on independent distributors, general economic and financial market conditions, risks associated with our international sales and operations, our ability to manage our supply chain effectively, volatility in the cost of commodities, ingredients, freight and fuel, our ability to execute and realize cost savings initiatives, including SKU rationalization plans, the impact of our debt and our credit agreements on our financial condition and our business, our ability to manage our financial reporting and internal control system processes, potential liabilities due to legal claims, government investigations and other regulatory enforcement actions, costs incurred due to pending and future litigation, potential liability, including in connection with indemnification obligations to our current and former officers and members of our Board of Directors that may not be covered by insurance, potential liability if our products cause illness or physical harm, impairments in the carrying value of goodwill or other intangible assets, our ability to consummate divestitures, our ability to integrate past acquisitions, the availability of organic ingredients, disruption of operations at our manufacturing facilities, loss of one or more independentco-packers, disruption of our transportation systems, risks relating to the protection of intellectual property, the risk of liabilities and claims with respect to environmental matters, the reputation of our brands, our reliance on independent certification for a number of our products, and other risks detailed fromtime-to-time in the Company’s reports filed with the United States Securities and Exchange Commission, including our most recent Annual Report on Form10-K and our subsequent reports on Forms10-Q and8-K. As a result of the foregoing
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
and other factors, the Company cannot provide any assurance regarding future results, levels of activity and achievements of the Company, and neither the Company nor any person assumes responsibility for the accuracy and completeness of these statements. All forward-looking statements contained herein apply as of the date hereof or as of the date they were made and, except as required by applicable law, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflects changes in underlying assumptions or factors of new methods, future events or other changes.
Non-GAAP Financial Measures
This press release and the accompanying tables includenon-GAAP financial measures, including net sales adjusted for the impact of Foreign Exchange, Acquisitions and Divestitures and certain other items, including SKU rationalization, as applicable in each case, adjusted operating income, adjusted gross margin, adjusted net income, adjusted earnings per diluted share, EBITDA, Adjusted EBITDA and operating free cash flow. The reconciliations of thesenon-GAAP financial measures to the comparable GAAP financial measures are presented in the tables “Reconciliation of GAAP Results toNon-GAAP Measures” for the three and twelve months ended June 30, 2019 and 2018 and the three months ended March 31, 2019 and in the paragraphs below. Management believes that thenon-GAAP financial measures presented provide useful additional information to investors about current trends in the Company’s operations and are useful for period-over-period comparisons of operations. Thesenon-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, thesenon-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the Company’s Consolidated Statements of Operations presented in accordance with GAAP.
The Company defines Operating Free Cash Flow as cash provided by or used in operating activities from continuing operations (a GAAP measure) less capital expenditures. The Company views Operating Free Cash Flow as an important measure because it is one factor in evaluating the amount of cash available for discretionary investments.
For the three and twelve months ended June 30, 2019 and 2018, Operating Free Cash Flow from continuing operations was calculated as follows:
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(unaudited and dollars in thousands) | ||||||||||||||||
Cash flow provided by operating activities - continuing operations | $ | 37,476 | $ | 53,938 | $ | 49,519 | $ | 121,308 | ||||||||
Purchases of property, plant and equipment | (21,236 | ) | (22,523 | ) | (77,128 | ) | (70,891 | ) | ||||||||
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Operating Free Cash Flow - continuing operations | $ | 16,240 | $ | 31,415 | $ | (27,609 | ) | $ | 50,417 | |||||||
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The Company’s Operating Free Cash Flow from continuing operations was $16.2 million for the three months ended June 30, 2019, a decrease of $15.2 million from the three months ended June 30, 2018. This decrease resulted primarily from a decrease in net (loss) income adjusted fornon-cash charges. The Company’s Operating Free Cash Flow from continuing operations was negative $27.6 million for the twelve months ended June 30, 2019, a decrease of $78.0 million from the twelve months ended June 30, 2018. This decrease resulted primarily from a decrease in net income adjusted fornon-cash charges and increased capital expenditures in the current year, offset in part by cash provided by working capital accounts.
The Company believes presenting net sales at constant currency provides useful information to investors because it provides transparency to underlying performance in the Company’s consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have onperiod-to-period comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
The Company provides net sales adjusted for constant currency, acquisitions and divestitures, and certain other items including SKU rationalization, as applicable in each case, to understand the growth rate of net sales excluding the impact of such items. The Company’s management believes net sales adjusted for such items is useful to investors because it enables them to better understand the growth of our business fromperiod-to-period.
The Company defines EBITDA as net (loss) income from continuing operations (a GAAP measure) before income taxes, net interest expense, depreciation and amortization, equity in net loss (income) of equity-method investees, stock-based compensation, net, stock-based compensation expense in connection with the Succession Plan, long-lived asset and intangible impairments and unrealized currency gains and losses. The Company defines segment EBITDA as operating income (a GAAP measure) before depreciation and amortization, stock-based compensation, net and long-lived asset impairments. Adjusted EBITDA is defined as EBITDA before acquisition-related expenses, including integration and restructuring charges, and othernon-recurring items. The Company’s management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company as well as a component of performance-based executive compensation.
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
For the three and twelve months ended June 30, 2019 and 2018, EBITDA and Adjusted EBITDA from continuing operations was calculated as follows:
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(unaudited and dollars in thousands) | ||||||||||||||||
Net (loss) income | $ | (13,551 | ) | $ | (69,941 | ) | $ | (183,314 | ) | $ | 9,694 | |||||
Net loss from discontinued operations | (5,897 | ) | (65,385 | ) | (133,369 | ) | (72,734 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss) income from continuing operations | $ | (7,654 | ) | $ | (4,556 | ) | $ | (49,945 | ) | $ | 82,428 | |||||
(Benefit) provision for income taxes | (1,018 | ) | 10,629 | (2,697 | ) | (887 | ) | |||||||||
Interest expense, net | 8,877 | 6,804 | 32,970 | 24,339 | ||||||||||||
Depreciation and amortization | 14,840 | 15,670 | 56,914 | 60,809 | ||||||||||||
Equity in net loss (income) of equity-method investees | 264 | (235 | ) | 655 | (339 | ) | ||||||||||
Stock-based compensation, net | 4,001 | 3,122 | 9,503 | 13,380 | ||||||||||||
Stock-based compensation expense in connection with Chief Executive Officer Succession Agreement | — | (2,203 | ) | 429 | (2,203 | ) | ||||||||||
Goodwill impairment | — | 7,700 | — | 7,700 | ||||||||||||
Long-lived asset and intangibles impairment | 10,010 | 5,743 | 33,719 | 14,033 | ||||||||||||
Unrealized currency (gains)/losses | (3,401 | ) | 3,143 | (850 | ) | (2,027 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
EBITDA | $ | 25,919 | $ | 45,817 | $ | 80,698 | $ | 197,233 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Project Terra costs and other | 10,494 | 4,276 | 39,958 | 18,026 | ||||||||||||
Chief Executive Officer Succession Plan expense, net | — | 2,723 | 29,727 | 2,723 | ||||||||||||
Proceeds from insurance claims | (4,460 | ) | — | (4,460 | ) | — | ||||||||||
Accounting review and remediation costs, net of insurance proceeds | — | 2,887 | 4,334 | 9,293 | ||||||||||||
Warehouse/manufacturing facilitystart-up costs | 8,107 | 3,024 | 17,636 | 4,179 | ||||||||||||
SKU rationalization | 10,346 | — | 12,381 | 4,913 | ||||||||||||
Plant closure related costs | 3,954 | 1,567 | 7,457 | 5,513 | ||||||||||||
Realized currency loss on repayment of international loans | 2,706 | — | 2,706 | — | ||||||||||||
Litigation and related expenses | 455 | 780 | 1,517 | 1,015 | ||||||||||||
Gain on sale of business | (534 | ) | — | (534 | ) | — | ||||||||||
Losses on terminated chilled desserts contract | — | — | — | 6,553 | ||||||||||||
Co-packer disruption | — | — | — | 3,692 | ||||||||||||
Regulated packaging change | — | — | — | 1,007 | ||||||||||||
Toys “R” Us bad debt | — | — | — | 897 | ||||||||||||
Recall and other related costs | — | 307 | — | 580 | ||||||||||||
Machine break-down costs | — | — | — | 317 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Adjusted EBITDA | $ | 56,987 | $ | 61,381 | $ | 191,420 | $ | 255,941 | ||||||||
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The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Consolidated Balance Sheets
(unaudited and in thousands)
June 30, | June 30, | |||||||
2019 | 2018 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 39,526 | $ | 106,557 | ||||
Accounts receivable, net | 236,945 | 252,708 | ||||||
Inventories | 364,887 | 391,525 | ||||||
Prepaid expenses and other current assets | 60,429 | 59,946 | ||||||
Current assets of discontinued operations | — | 240,851 | ||||||
|
|
|
| |||||
Total current assets | 701,787 | 1,051,587 | ||||||
Property, plant and equipment, net | 328,362 | 310,172 | ||||||
Goodwill | 1,008,979 | 1,024,136 | ||||||
Trademarks and other intangible assets, net | 465,211 | 510,387 | ||||||
Investments and joint ventures | 18,890 | 20,725 | ||||||
Other assets | 59,391 | 29,667 | ||||||
|
|
|
| |||||
Total assets | $ | 2,582,620 | $ | 2,946,674 | ||||
|
|
|
| |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 238,298 | $ | 229,993 | ||||
Accrued expenses and other current liabilities | 118,940 | 116,001 | ||||||
Current portion of long-term debt | 25,919 | 26,605 | ||||||
Current liabilities of discontinued operations | — | 49,846 | ||||||
|
|
|
| |||||
Total current liabilities | 383,157 | 422,445 | ||||||
Long-term debt, less current portion | 613,537 | 687,501 | ||||||
Deferred income taxes | 51,910 | 86,909 | ||||||
Other noncurrent liabilities | 14,697 | 12,770 | ||||||
|
|
|
| |||||
Total liabilities | 1,063,301 | 1,209,625 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 1,088 | 1,084 | ||||||
Additionalpaid-in capital | 1,158,257 | 1,148,196 | ||||||
Retained earnings | 695,017 | 878,516 | ||||||
Accumulated other comprehensive loss | (225,004 | ) | (184,240 | ) | ||||
|
|
|
| |||||
1,629,358 | 1,843,556 | |||||||
Treasury stock | (110,039 | ) | (106,507 | ) | ||||
|
|
|
| |||||
Total stockholders’ equity | 1,519,319 | 1,737,049 | ||||||
|
|
|
| |||||
Total liabilities and stockholders’ equity | $ | 2,582,620 | $ | 2,946,674 | ||||
|
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|
|
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Consolidated Statements of Operations
(unaudited and in thousands, except per share amounts)
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net sales | $ | 557,682 | $ | 619,598 | $ | 2,302,468 | $ | 2,457,769 | ||||||||
Cost of sales | 451,605 | 494,501 | 1,857,255 | 1,942,321 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 106,077 | 125,097 | 445,213 | 515,448 | ||||||||||||
Selling, general and administrative expenses | 85,566 | 83,048 | 340,949 | 341,634 | ||||||||||||
Amortization of acquired intangibles | 3,727 | 4,343 | 15,294 | 18,202 | ||||||||||||
Project Terra costs and other | 10,494 | 4,276 | 40,107 | 18,026 | ||||||||||||
Chief Executive Officer Succession Plan expense, net | — | 520 | 30,156 | 520 | ||||||||||||
Proceeds from insurance claims | (4,460 | ) | — | (4,460 | ) | — | ||||||||||
Accounting review and remediation costs, net of insurance proceeds | — | 2,887 | 4,334 | 9,293 | ||||||||||||
Goodwill impairment | — | 7,700 | — | 7,700 | ||||||||||||
Long-lived asset and intangibles impairment | 10,010 | 5,743 | 33,719 | 14,033 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income (loss) | 740 | 16,580 | (14,886 | ) | 106,040 | |||||||||||
Interest and other financing expense, net | 10,166 | 7,382 | 36,078 | 26,925 | ||||||||||||
Other (income)/expense, net | (1,018 | ) | 3,360 | 1,023 | (2,087 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
(Loss) income from continuing operations before income taxes and equity in net loss (income) of equity-method investees | (8,408 | ) | 5,838 | (51,987 | ) | 81,202 | ||||||||||
(Benefit) provision for income taxes | (1,018 | ) | 10,629 | (2,697 | ) | (887 | ) | |||||||||
Equity in net loss (income) of equity-method investees | 264 | (235 | ) | 655 | (339 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss) income from continuing operations | $ | (7,654 | ) | $ | (4,556 | ) | $ | (49,945 | ) | $ | 82,428 | |||||
Net loss from discontinued operations, net of tax | (5,897 | ) | (65,385 | ) | (133,369 | ) | (72,734 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss) income | $ | (13,551 | ) | $ | (69,941 | ) | $ | (183,314 | ) | $ | 9,694 | |||||
|
|
|
|
|
|
|
| |||||||||
Net (loss) income per common share: | ||||||||||||||||
Basic net (loss) income per common share from continuing operations | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.48 | ) | $ | 0.79 | |||||
Basic net loss per common share from discontinued operations | (0.06 | ) | (0.63 | ) | (1.28 | ) | (0.70 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Basic net (loss) income per common share | $ | (0.13 | ) | $ | (0.67 | ) | $ | (1.76 | ) | $ | 0.09 | |||||
|
|
|
|
|
|
|
| |||||||||
Diluted net (loss) income per common share from continuing operations | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.48 | ) | $ | 0.79 | |||||
Diluted net loss per common share from discontinued operations | (0.06 | ) | (0.63 | ) | (1.28 | ) | (0.70 | ) | ||||||||
�� |
|
|
|
|
|
|
|
| ||||||||
Diluted net (loss) income per common share | $ | (0.13 | ) | $ | (0.67 | ) | $ | (1.76 | ) | $ | 0.09 | |||||
|
|
|
|
|
|
|
| |||||||||
Shares used in the calculation of net (loss) income per common share: | ||||||||||||||||
Basic | 104,167 | 103,927 | 104,076 | 103,848 | ||||||||||||
|
|
|
|
|
|
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| |||||||||
Diluted | 104,167 | 103,927 | 104,076 | 104,477 | ||||||||||||
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The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Consolidated Statements of Cash Flows
(unaudited and dollars in thousands)
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
Net (loss) income | $ | (13,551 | ) | $ | (69,941 | ) | $ | (183,314 | ) | $ | 9,694 | |||||
Net loss from discontinued operations | (5,897 | ) | (65,385 | ) | (133,369 | ) | (72,734 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss) income from continuing operations | (7,654 | ) | (4,556 | ) | (49,945 | ) | 82,428 | |||||||||
Adjustments to reconcile net (loss) income from continuing operations to net cash provided by operating activities from continuing operations: | ||||||||||||||||
Depreciation and amortization | 14,840 | 15,670 | 56,914 | 60,809 | ||||||||||||
Deferred income taxes | (1,137 | ) | 8,612 | (25,790 | ) | (21,503 | ) | |||||||||
Equity in net loss (income) of equity-method investees | 264 | (235 | ) | 655 | (339 | ) | ||||||||||
Stock-based compensation, net | 4,001 | 919 | 9,932 | 11,177 | ||||||||||||
Impairment charges | 10,010 | 13,443 | 33,719 | 21,733 | ||||||||||||
Othernon-cash items, net | (2,478 | ) | 1,284 | 1,225 | (741 | ) | ||||||||||
Increase (decrease) in cash attributable to changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 30,018 | (843 | ) | 21,194 | (24,841 | ) | ||||||||||
Inventories | 27,824 | (1,681 | ) | 20,648 | (45,036 | ) | ||||||||||
Other current assets | (6,073 | ) | (1,116 | ) | (5,758 | ) | (9,269 | ) | ||||||||
Other assets and liabilities | (1,551 | ) | (7,763 | ) | 3,697 | (2,396 | ) | |||||||||
Accounts payable and accrued expenses | (30,588 | ) | 30,204 | (16,972 | ) | 49,286 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash provided by operating activities - continuing operations | 37,476 | 53,938 | 49,519 | 121,308 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
Purchases of property and equipment | (21,236 | ) | (22,523 | ) | (77,128 | ) | (70,891 | ) | ||||||||
Acquisitions of businesses, net of cash acquired | — | 696 | — | (12,368 | ) | |||||||||||
Proceeds from sale of assets and other | 3,282 | 614 | 7,145 | 738 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash used in investing activities - continuing operations | (17,954 | ) | (21,213 | ) | (69,983 | ) | (82,521 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
Borrowings under bank revolving credit facility | 45,000 | 20,000 | 285,000 | 65,000 | ||||||||||||
Repayments under bank revolving credit facility | (82,000 | ) | (45,035 | ) | (268,791 | ) | (400,220 | ) | ||||||||
Borrowings under term loan | — | — | — | 299,245 | ||||||||||||
Repayments under term loan | (78,750 | ) | (3,750 | ) | (90,000 | ) | (3,750 | ) | ||||||||
Proceeds from (funding of) discontinued operations entities | 73,480 | (4,401 | ) | 36,029 | (21,568 | ) | ||||||||||
Borrowings (repayments) of other debt, net | 1,599 | (4,107 | ) | (3,171 | ) | (996 | ) | |||||||||
Shares withheld for payment of employee payroll taxes | (461 | ) | (340 | ) | (3,532 | ) | (7,193 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash used in financing activities - continuing operations | (41,132 | ) | (37,633 | ) | (44,465 | ) | (69,482 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Effect of exchange rate changes on cash | (878 | ) | (5,687 | ) | (2,102 | ) | 197 | |||||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS | ||||||||||||||||
Cash used in operating activities | (911 | ) | (2,303 | ) | (8,250 | ) | (14,086 | ) | ||||||||
Cash provided by (used in) investing activities | 70,683 | (2,221 | ) | 37,941 | (10,752 | ) | ||||||||||
Cash (used in) provided by financing activities | (73,450 | ) | 4,350 | (36,151 | ) | 21,361 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash flows used in discontinued operations | (3,678 | ) | (174 | ) | (6,460 | ) | (3,477 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in cash and cash equivalents | (26,166 | ) | (10,769 | ) | (73,491 | ) | (33,975 | ) | ||||||||
Cash and cash equivalents at beginning of period | 65,692 | 123,786 | 113,017 | 146,992 | ||||||||||||
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|
|
|
| |||||||||
Cash and cash equivalents at end of period | $ | 39,526 | $ | 113,017 | $ | 39,526 | $ | 113,017 | ||||||||
Less: cash and cash equivalents of discontinued operations | — | (6,460 | ) | — | (6,460 | ) | ||||||||||
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|
|
|
|
| |||||||||
Cash and cash equivalents of continuing operations at end of period | $ | 39,526 | $ | 106,557 | $ | 39,526 | $ | 106,557 | ||||||||
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The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Reconciliation of GAAP Results toNon-GAAP Measures
(unaudited and in thousands, except per share amounts)
Three Months Ended June 30, | ||||||||||||||||||||||||
2019 GAAP | Adjustments | 2019 Adjusted | 2018 GAAP | Adjustments | 2018 Adjusted | |||||||||||||||||||
Net sales | $ | 557,682 | — | $ | 557,682 | $ | 619,598 | — | $ | 619,598 | ||||||||||||||
Cost of sales | 451,605 | (22,314 | ) | 429,291 | 494,501 | (5,346 | ) | 489,155 | ||||||||||||||||
Gross profit | 106,077 | 22,314 | 128,391 | 125,097 | 5,346 | 130,443 | ||||||||||||||||||
Operating expenses (a) | 99,303 | (11,459 | ) | 87,844 | 93,134 | (7,172 | ) | 85,962 | ||||||||||||||||
Project Terra costs and other | 10,494 | (10,494 | ) | — | 4,276 | (4,276 | ) | — | ||||||||||||||||
Chief Executive Officer Succession Plan expense, net | — | — | — | 520 | (520 | ) | — | |||||||||||||||||
Proceeds from insurance claims | (4,460 | ) | 4,460 | — | — | — | — | |||||||||||||||||
Accounting review and remediation costs, net of insurance proceeds | — | — | — | 2,887 | (2,887 | ) | — | |||||||||||||||||
Goodwill impairment | — | — | — | 7,700 | (7,700 | ) | — | |||||||||||||||||
Operating income | 740 | 39,807 | 40,547 | 16,580 | 27,901 | 44,481 | ||||||||||||||||||
Interest and other expense (income), net (b) | 9,147 | 882 | 10,029 | 10,742 | (3,143 | ) | 7,599 | |||||||||||||||||
(Benefit) provision for income taxes | (1,018 | ) | 8,912 | 7,894 | 10,629 | (1,255 | ) | 9,374 | ||||||||||||||||
Net (loss) income from continuing operations | (7,654 | ) | 30,013 | 22,359 | (4,556 | ) | 32,299 | 27,743 | ||||||||||||||||
Net (loss) income from discontinued operations, net of tax | (5,897 | ) | 5,897 | — | (65,385 | ) | 65,385 | — | ||||||||||||||||
Net (loss) income | (13,551 | ) | 35,910 | 22,359 | (69,941 | ) | 97,684 | 27,743 | ||||||||||||||||
Diluted net (loss) income per common share from continuing operations | (0.07 | ) | 0.29 | 0.21 | (0.04 | ) | 0.31 | 0.27 | ||||||||||||||||
Diluted net (loss) income per common share from discontinued operations | (0.06 | ) | 0.06 | — | (0.63 | ) | 0.63 | — | ||||||||||||||||
Diluted net (loss) income per common share | (0.13 | ) | 0.34 | 0.21 | (0.67 | ) | 0.94 | 0.27 |
Detail of Adjustments:
Three Months Ended | Three Months Ended | |||||||
June 30, 2019 | June 30, 2018 | |||||||
Warehouse/manufacturing facilitystart-up costs | $ | 8,107 | $ | 3,024 | ||||
Plant closure related costs | 3,861 | 2,015 | ||||||
SKU rationalization | 10,346 | — | ||||||
Recall and other related costs | — | 307 | ||||||
|
|
|
| |||||
Cost of sales | 22,314 | 5,346 | ||||||
|
|
|
| |||||
Gross profit | 22,314 | 5,346 | ||||||
|
|
|
| |||||
Stock-based compensation acceleration | 875 | — | ||||||
Intangibles impairment | — | 5,632 | ||||||
Long-lived asset impairment charge associated with plant closure | 10,010 | 111 | ||||||
Litigation and related expenses | 455 | 780 | ||||||
Plant closure related costs | 119 | — | ||||||
Accelerated Depreciation on software disposal | — | 461 | ||||||
Warehouse/manufacturing facilitystart-up costs | — | 188 | ||||||
|
|
|
| |||||
Operating expenses (a) | 11,459 | 7,172 | ||||||
|
|
|
| |||||
Project Terra costs and other | 10,494 | 4,276 | ||||||
|
|
|
| |||||
Project Terra costs and other | 10,494 | 4,276 | ||||||
|
|
|
| |||||
Chief Executive Officer Succession Plan expense, net | — | 520 | ||||||
|
|
|
| |||||
Chief Executive Officer Succession Plan expense, net | — | 520 | ||||||
|
|
|
| |||||
Proceeds from insurance claims | (4,460 | ) | — | |||||
|
|
|
| |||||
Proceeds from insurance claims | (4,460 | ) | — | |||||
|
|
|
| |||||
Accounting review and remediation costs, net of insurance proceeds | — | 2,887 | ||||||
|
|
|
| |||||
Accounting review and remediation costs, net of insurance proceeds | — | 2,887 | ||||||
|
|
|
| |||||
Goodwill impairment | — | 7,700 | ||||||
|
|
|
| |||||
Goodwill impairment | — | 7,700 | ||||||
|
|
|
| |||||
Operating income | 39,807 | 27,901 | ||||||
|
|
|
| |||||
Unrealized currency gains | (3,401 | ) | 3,143 | |||||
Realized currency loss on repayment of international loans | 2,706 | — | ||||||
Gain on sale of business | (534 | ) | — | |||||
Deferred financing costwrite-off | 347 | — | ||||||
|
|
|
| |||||
Interest and other expense (income), net (b) | (882 | ) | 3,143 | |||||
|
|
|
| |||||
Income tax related adjustments | (8,912 | ) | 1,255 | |||||
|
|
|
| |||||
(Benefit) provision for income taxes | (8,912 | ) | 1,255 | |||||
|
|
|
| |||||
Net (loss) income from continuing operations | $ | 30,013 | $ | 32,299 | ||||
|
|
|
|
(a) | Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and long-lived asset and intangibles impairment. |
(b) | Interest and other expense (income), net includes interest and other financing expenses, net and other expense (income), net. |
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Reconciliation of GAAP Results toNon-GAAP Measures
(unaudited and in thousands, except per share amounts)
Twelve Months Ended June 30, | ||||||||||||||||||||||||
2019 GAAP | Adjustments | 2019 Adjusted | 2018 GAAP | Adjustments | 2018 Adjusted | |||||||||||||||||||
Net sales | $ | 2,302,468 | — | $ | 2,302,468 | $ | 2,457,769 | — | $ | 2,457,769 | ||||||||||||||
Cost of sales | 1,857,255 | (37,623 | ) | 1,819,632 | 1,942,321 | (27,200 | ) | 1,915,121 | ||||||||||||||||
Gross profit | 445,213 | 37,623 | 482,836 | 515,448 | 27,200 | 542,648 | ||||||||||||||||||
Operating expenses (a) | 389,962 | (37,316 | ) | 352,646 | 373,869 | (17,294 | ) | 356,575 | ||||||||||||||||
Project Terra costs and other | 40,107 | (40,107 | ) | — | 18,026 | (18,026 | ) | — | ||||||||||||||||
Chief Executive Officer Succession Plan expense, net | 30,156 | (30,156 | ) | — | 520 | (520 | ) | — | ||||||||||||||||
Proceeds from insurance claims | (4,460 | ) | 4,460 | — | — | — | — | |||||||||||||||||
Accounting review and remediation costs, net of insurance proceeds | 4,334 | (4,334 | ) | — | 9,293 | (9,293 | ) | — | ||||||||||||||||
Goodwill impairment | — | — | — | 7,700 | (7,700 | ) | — | |||||||||||||||||
Operating (loss) income | (14,886 | ) | 145,076 | 130,190 | 106,040 | 80,033 | 186,073 | |||||||||||||||||
Interest and other expense (income), net (b) | 37,100 | (1,669 | ) | 35,431 | 24,838 | 2,027 | 26,865 | |||||||||||||||||
(Benefit) provision for income taxes | (2,697 | ) | 28,116 | 25,419 | (887 | ) | 39,133 | 38,246 | ||||||||||||||||
Net (loss) income from continuing operations | (49,945 | ) | 118,628 | 68,683 | 82,428 | 38,873 | 121,301 | |||||||||||||||||
Net (loss) income from discontinued operations, net of tax | (133,369 | ) | 133,369 | — | (72,734 | ) | 72,734 | — | ||||||||||||||||
Net (loss) income | (183,314 | ) | 251,997 | 68,683 | 9,694 | 111,607 | 121,301 | |||||||||||||||||
Diluted net (loss) income per common share from continuing operations | (0.48 | ) | 1.14 | 0.66 | 0.79 | 0.37 | 1.16 | |||||||||||||||||
Diluted net (loss) income per common share from discontinued operations | (1.28 | ) | 1.28 | — | (0.70 | ) | 0.70 | — | ||||||||||||||||
Diluted net (loss) income per common share | (1.76 | ) | 2.42 | 0.66 | 0.09 | 1.07 | 1.16 |
Detail of Adjustments:
Twelve Months Ended | Twelve Months Ended | |||||||
June 30, 2019 | June 30, 2018 | |||||||
Warehouse/manufacturing facilitystart-up costs | $ | 17,636 | $ | 4,179 | ||||
Plant closure related costs | 7,606 | 5,958 | ||||||
SKU rationalization | 12,381 | 4,913 | ||||||
Recall and other related costs | — | 580 | ||||||
Machine break-down costs | — | 317 | ||||||
Losses on terminated chilled desserts contract | — | 6,553 | ||||||
Co-packer disruption | — | 3,692 | ||||||
Regulated packaging change | — | 1,007 | ||||||
|
|
|
| |||||
Cost of sales | 37,623 | 27,200 | ||||||
|
|
|
| |||||
Gross profit | 37,623 | 27,200 | ||||||
|
|
|
| |||||
Intangibles impairment | 17,900 | 5,632 | ||||||
Long-lived asset impairment charge associated with plant closure | 15,819 | 8,401 | ||||||
Litigation and related expenses | 1,517 | 1,015 | ||||||
Stock-based compensation acceleration | 1,458 | 700 | ||||||
Plant closure related costs | 622 | — | ||||||
Toys “R” Us bad debt | — | 897 | ||||||
Accelerated Depreciation on software disposal | — | 461 | ||||||
Warehouse/manufacturing facilitystart-up costs | — | 188 | ||||||
|
|
|
| |||||
Operating expenses (a) | 37,316 | 17,294 | ||||||
|
|
|
| |||||
Project Terra costs and other | 40,107 | 18,026 | ||||||
|
|
|
| |||||
Project Terra costs and other | 40,107 | 18,026 | ||||||
|
|
|
| |||||
Chief Executive Officer Succession Plan expense, net | 30,156 | 520 | ||||||
|
|
|
| |||||
Chief Executive Officer Succession Plan expense, net | 30,156 | 520 | ||||||
|
|
|
| |||||
Proceeds from insurance claims | (4,460 | ) | — | |||||
|
|
|
| |||||
Proceeds from insurance claims | (4,460 | ) | — | |||||
|
|
|
| |||||
Accounting review and remediation costs, net of insurance proceeds | 4,334 | 9,293 | ||||||
|
|
|
| |||||
Accounting review and remediation costs, net of insurance proceeds | 4,334 | 9,293 | ||||||
|
|
|
| |||||
Goodwill impairment | — | 7,700 | ||||||
|
|
|
| |||||
Goodwill impairment | — | 7,700 | ||||||
|
|
|
| |||||
Operating (loss) income | 145,076 | 80,033 | ||||||
|
|
|
| |||||
Unrealized currency gains | (850 | ) | (2,027 | ) | ||||
Realized currency loss on repayment of international loans | 2,706 | — | ||||||
Gain on sale of business | (534 | ) | — | |||||
Deferred financing costwrite-off | 347 | — | ||||||
|
|
|
| |||||
Interest and other expense (income), net (b) | 1,669 | (2,027 | ) | |||||
|
|
|
| |||||
Income tax related adjustments | (28,116 | ) | (39,133 | ) | ||||
|
|
|
| |||||
(Benefit) provision for income taxes | (28,116 | ) | (39,133 | ) | ||||
|
|
|
| |||||
Net (loss) income from continuing operations | $ | 118,628 | $ | 38,873 | ||||
|
|
|
|
(a) | Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and long-lived asset and intangibles impairment. |
(b) | Interest and other expense (income), net includes interest and other financing expenses, net and other expense (income), net. |
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Net Sales Growth at Constant Currency
(unaudited and dollars in thousands)
Hain | United | Rest of | ||||||||||
Consolidated | Kingdom | World | ||||||||||
Net sales - Three months ended 6/30/19 | $ | 557,682 | $ | 214,367 | $ | 103,494 | ||||||
Impact of foreign currency exchange | 17,036 | 12,225 | 4,811 | |||||||||
|
|
|
|
|
| |||||||
Net sales on a constant currency basis - Three months ended 6/30/19 | $ | 574,718 | $ | 226,592 | $ | 108,305 | ||||||
|
|
|
|
|
| |||||||
Net sales - Three months ended 6/30/18 | $ | 619,598 | $ | 239,061 | $ | 110,680 | ||||||
Net sales growth on a constant currency basis | (7.2 | )% | (5.2 | )% | (2.1 | )% | ||||||
Hain | United | Rest of | ||||||||||
Consolidated | Kingdom | World | ||||||||||
Net sales - Twelve months ended 6/30/19 | $ | 2,302,468 | $ | 885,488 | $ | 407,574 | ||||||
Impact of foreign currency exchange | 52,622 | 36,122 | 16,500 | |||||||||
|
|
|
|
|
| |||||||
Net sales on a constant currency basis - Twelve months ended 6/30/19 | $ | 2,355,090 | $ | 921,610 | $ | 424,074 | ||||||
|
|
|
|
|
| |||||||
Net sales - Twelve months ended 6/30/18 | $ | 2,457,769 | $ | 938,029 | $ | 434,869 | ||||||
Net sales growth on a constant currency basis | (4.2 | )% | (1.8 | )% | (2.5 | )% |
Net Sales Growth at Constant Currency and Adjusted for Acquisitions, Divestitures and Other
Hain | United | Rest of | ||||||||||||||
Consolidated | United States | Kingdom | World | |||||||||||||
Net sales on a constant currency basis - Three months ended 6/30/19 | $ | 574,718 | $ | 239,821 | $ | 226,592 | $ | 108,305 | ||||||||
Net sales - Three months ended 6/30/18 | $ | 619,598 | $ | 269,857 | $ | 239,061 | $ | 110,680 | ||||||||
Project Terra SKU rationalization | (10,445 | ) | (9,335 | ) | — | (1,110 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net sales on a constant currency basis adjusted for acquisitions, divestitures and other - Three months ended 6/30/18 | $ | 609,153 | $ | 260,522 | $ | 239,061 | $ | 109,570 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net sales growth on a constant currency basis adjusted for acquisitions, divestitures and other | (5.7 | )% | (7.9 | )% | (5.2 | )% | (1.2 | )% |
Hain Celestial | Hain Celestial | Hain | ||||||||||||||||||||||
Tilda | Hain Daniels | Ella’s Kitchen | Europe | Canada | Ventures | |||||||||||||||||||
Net sales growth - Three months ended 6/30/19 | 2.6 | % | (14.3 | )% | (7.3 | )% | 0.6 | % | (7.8 | )% | (29.2 | )% | ||||||||||||
Impact of foreign currency exchange | 5.3 | % | 5.0 | % | 5.4 | % | 6.3 | % | 3.4 | % | — | % | ||||||||||||
Impact of Project Terra SKU rationalization | — | % | — | % | — | % | — | % | 2.3 | % | 0.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net sales growth on a constant currency basis adjusted for acquisitions, divestitures and other - Three months ended 6/30/19 | 7.9 | % | (9.3 | )% | (1.9 | )% | 6.9 | % | (2.1 | )% | (28.7 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Hain | United | Rest of | ||||||||||||||
Consolidated | United States | Kingdom | World | |||||||||||||
Net sales on a constant currency basis - Twelve months ended 6/30/19 | $ | 2,355,090 | $ | 1,009,406 | $ | 921,610 | $ | 424,074 | ||||||||
Net sales - Twelve months ended 6/30/18 | $ | 2,457,769 | $ | 1,084,871 | $ | 938,029 | $ | 434,869 | ||||||||
Acquisitions | 4,335 | — | 4,335 | — | ||||||||||||
Castle contract termination | (12,359 | ) | — | (12,359 | ) | — | ||||||||||
Project Terra SKU rationalization | (43,310 | ) | (38,226 | ) | — | (5,084 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net sales on a constant currency basis adjusted for acquisitions, divestitures and other - Twelve months ended 6/30/18 | $ | 2,406,435 | $ | 1,046,645 | $ | 930,005 | $ | 429,785 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net sales growth on a constant currency basis adjusted for acquisitions, divestitures and other | (2.1 | )% | (3.6 | )% | (0.9 | )% | (1.3 | )% |
Hain Celestial | Hain Celestial | Hain | ||||||||||||||||||||||
Tilda | Hain Daniels | Ella’s Kitchen | Europe | Canada | Ventures | |||||||||||||||||||
Net sales growth - Twelve months ended 6/30/19 | 3.2 | % | (8.8 | )% | 0.5 | % | (1.1 | )% | (7.9 | )% | (19.6 | )% | ||||||||||||
Impact of foreign currency exchange | 4.3 | % | 3.7 | % | 4.1 | % | 4.8 | % | 3.9 | % | — | % | ||||||||||||
Impact of acquisitions | — | % | (0.6 | )% | — | % | — | % | — | % | — | % | ||||||||||||
Impact of castle contract termination | — | % | 1.8 | % | — | % | — | % | — | % | — | % | ||||||||||||
Impact of Project Terra SKU rationalization | — | % | — | % | — | % | — | % | 2.1 | % | 2.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net sales growth on a constant currency basis adjusted for acquisitions, divestitures and other - Twelve months ended 6/30/19 | 7.5 | % | (3.9 | )% | 4.6 | % | 3.7 | % | (1.9 | )% | (17.6 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Segment EBITDA and Adjusted EBITDA
Three Months Ended
(unaudited and dollars in thousands)
United States
June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||
Operating (Loss) Income | $ | (2,585 | ) | $ | 17,099 | $ | 18,623 | |||||
Depreciation and amortization | 3,235 | 3,274 | 3,670 | |||||||||
Long-lived asset impairment | 5,179 | — | (286 | ) | ||||||||
Other | 172 | 499 | 71 | |||||||||
|
|
|
|
|
| |||||||
EBITDA | $ | 6,001 | $ | 20,872 | $ | 22,078 | ||||||
|
|
|
|
|
| |||||||
Project Terra costs and other | 3,085 | 1,246 | 894 | |||||||||
Warehouse/manufacturing facilitystart-up costs | 7,974 | 3,101 | 2,943 | |||||||||
Plant closure related costs | 31 | 26 | 711 | |||||||||
SKU rationalization | 6,665 | 303 | — | |||||||||
Realized currency loss on repayment of international loans | 465 | — | — | |||||||||
Recall and other related costs | — | — | 307 | |||||||||
|
|
|
|
|
| |||||||
Adjusted EBITDA | $ | 24,221 | $ | 25,548 | $ | 26,933 | ||||||
|
|
|
|
|
|
United Kingdom
June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||
Operating Income | $ | 15,591 | $ | 18,147 | $ | 18,984 | ||||||
Depreciation and amortization | 7,523 | 7,258 | 8,057 | |||||||||
Long-lived asset impairment | 4,393 | — | — | |||||||||
Other | (445 | ) | 371 | (190 | ) | |||||||
|
|
|
|
|
| |||||||
EBITDA | $ | 27,062 | $ | 25,776 | $ | 26,851 | ||||||
|
|
|
|
|
| |||||||
Project Terra costs and other | (1,453 | ) | 896 | 272 | ||||||||
Plant closure related costs | 3,781 | 77 | 352 | |||||||||
|
|
|
|
|
| |||||||
Adjusted EBITDA | $ | 29,390 | $ | 26,749 | $ | 27,475 | ||||||
|
|
|
|
|
|
Rest of World
June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||
Operating Income | $ | 5,742 | $ | 10,868 | $ | 8,069 | ||||||
Depreciation and amortization | 3,115 | 2,953 | 3,437 | |||||||||
Long-lived asset impairment | 438 | — | 397 | |||||||||
Other | (1,344 | ) | 166 | (4 | ) | |||||||
|
|
|
|
|
| |||||||
EBITDA | $ | 7,951 | $ | 13,987 | $ | 11,899 | ||||||
|
|
|
|
|
| |||||||
Project Terra costs and other | 1,074 | 17 | 419 | |||||||||
Warehouse/manufacturing facilitystart-up costs | 133 | 121 | 81 | |||||||||
Plant closure related costs | 84 | 93 | 504 | |||||||||
SKU rationalization | 3,681 | 202 | — | |||||||||
Realized currency loss on repayment of international loans | 2,241 | — | — | |||||||||
Gain on sale of business | (534 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Adjusted EBITDA | $ | 14,630 | $ | 14,420 | $ | 12,903 | ||||||
|
|
|
|
|
|
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Segment EBITDA and Adjusted EBITDA
Twelve Months Ended
(unaudited and dollars in thousands)
United States
June 30, 2019 | June 30, 2018 | |||||||
Operating Income | $ | 23,864 | $ | 86,319 | ||||
Depreciation and amortization | 13,103 | 15,843 | ||||||
Long-lived asset impairment | 6,510 | 5,446 | ||||||
Other | 1,083 | 375 | ||||||
|
|
|
| |||||
EBITDA | $ | 44,561 | $ | 107,983 | ||||
|
|
|
| |||||
Project Terra costs and other | 7,288 | 5,810 | ||||||
Warehouse/manufacturing facilitystart-up costs | 16,843 | 2,943 | ||||||
Plant closure related costs | 410 | 3,349 | ||||||
SKU rationalization | 8,296 | 3,712 | ||||||
Realized currency loss on repayment of international loans | 465 | — | ||||||
Co-packer disruption | — | 3,372 | ||||||
Regulated packaging change | — | 1,007 | ||||||
Toys “R” Us bad debt | — | 897 | ||||||
Recall and other related costs | — | 307 | ||||||
|
|
|
| |||||
Adjusted EBITDA | $ | 77,863 | $ | 129,380 | ||||
|
|
|
|
United Kingdom
June 30, 2019 | June 30, 2018 | |||||||
Operating Income | $ | 52,413 | $ | 56,046 | ||||
Depreciation and amortization | 29,711 | 31,095 | ||||||
Long-lived asset impairment | 8,699 | 2,560 | ||||||
Other | 78 | (437 | ) | |||||
|
|
|
| |||||
EBITDA | $ | 90,901 | $ | 89,264 | ||||
|
|
|
| |||||
Project Terra costs and other | 2,431 | 1,090 | ||||||
Warehouse/manufacturing facilitystart-up costs | — | 1,155 | ||||||
Plant closure related costs | 6,187 | 1,514 | ||||||
Litigation and related expenses | 29 | — | ||||||
Losses on terminated chilled desserts contract | — | 6,553 | ||||||
Co-packer disruption | — | 126 | ||||||
Machine break-down costs | — | 317 | ||||||
Recall and other related costs | — | 273 | ||||||
|
|
|
| |||||
Adjusted EBITDA | $ | 99,548 | $ | 100,292 | ||||
|
|
|
|
Rest of World
June 30, 2019 | June 30, 2018 | |||||||
Operating Income | $ | 32,819 | $ | 38,660 | ||||
Depreciation and amortization | 11,803 | 11,643 | ||||||
Long-lived asset impairment | 610 | 397 | ||||||
Other | (1,202 | ) | (332 | ) | ||||
|
|
|
| |||||
EBITDA | $ | 44,031 | $ | 50,368 | ||||
|
|
|
| |||||
Project Terra costs and other | 1,868 | 1,002 | ||||||
Warehouse/manufacturing facilitystart-up costs | 793 | 81 | ||||||
Plant closure related costs | 784 | 650 | ||||||
SKU rationalization | 4,085 | 1,201 | ||||||
Realized currency loss on repayment of international loans | 2,241 | — | ||||||
Gain on sale of business | (534 | ) | — | |||||
Co-packer disruption | — | 194 | ||||||
|
|
|
| |||||
Adjusted EBITDA | $ | 53,268 | $ | 53,496 | ||||
|
|
|
|
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Segment Information
(unaudited and dollars in thousands)
United States | United Kingdom | Rest of World | Corporate/ Other | Total | ||||||||||||||||
Net Sales | ||||||||||||||||||||
Net sales - Three months ended 3/31/19 | $ | 266,445 | $ | 227,206 | $ | 106,146 | $ | — | $ | 599,797 | ||||||||||
Operating income (loss) | ||||||||||||||||||||
Three months ended 3/31/19 | ||||||||||||||||||||
Operating income (loss) | $ | 17,099 | $ | 18,147 | $ | 10,868 | $ | (22,249 | ) | $ | 23,865 | |||||||||
Non-GAAP adjustments(1) | 4,676 | 976 | 432 | 8,955 | 15,039 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Adjusted operating income (loss) | $ | 21,775 | $ | 19,123 | $ | 11,300 | $ | (13,294 | ) | $ | 38,904 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating income margin | 6.4 | % | 8.0 | % | 10.2 | % | 4.0 | % | ||||||||||||
Adjusted operating income margin | 8.2 | % | 8.4 | % | 10.6 | % | 6.5 | % |
(1) | See accompanying table of “Reconciliation of GAAP Results toNon-GAAP Measures” |
Consolidated EBITDA and Adjusted EBITDA
Three Months Ended March 31, 2019
(unaudited and dollars in thousands)
Net loss | $ | (65,837 | ) | |
Net loss from discontinued operations | (75,925 | ) | ||
|
| |||
Net income from continuing operations | $ | 10,088 | ||
Provision for income taxes | 3,114 | |||
Interest expense, net | 8,677 | |||
Depreciation and amortization | 13,968 | |||
Equity in net loss of equity-method investees | 205 | |||
Stock-based compensation, net | 3,937 | |||
Unrealized currency losses | 1,522 | |||
|
| |||
EBITDA | $ | 41,511 | ||
|
| |||
Project Terra costs and other | 9,259 | |||
Chief Executive Officer Succession Plan expense, net | 455 | |||
Warehouse/manufacturing facilitystart-up costs | 3,222 | |||
Plant closure related costs | 184 | |||
SKU rationalization | 505 | |||
Litigation and related expenses | 371 | |||
|
| |||
Adjusted EBITDA | $ | 55,507 | ||
|
|
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com
THE HAIN CELESTIAL GROUP, INC.
Reconciliation of GAAP Results toNon-GAAP Measures
(unaudited and in thousands, except per share amounts)
Three Months Ended March 31, | ||||||||||||
2019 GAAP | Adjustments | 2019 Adjusted | ||||||||||
Net sales | $ | 599,797 | — | $ | 599,797 | |||||||
Cost of sales | 474,528 | (4,153 | ) | 470,375 | ||||||||
Gross profit | 125,269 | 4,153 | 129,422 | |||||||||
Operating expenses (a) | 91,541 | (1,023 | ) | 90,518 | ||||||||
Project Terra costs and other | 9,408 | (9,408 | ) | — | ||||||||
Chief Executive Officer Succession Plan expense, net | 455 | (455 | ) | — | ||||||||
Operating income | 23,865 | 15,039 | 38,904 | |||||||||
Interest and other expense (income), net (b) | 10,458 | (1,522 | ) | 8,936 | ||||||||
Provision for income taxes | 3,114 | 4,963 | 8,077 | |||||||||
Net income from continuing operations | 10,088 | 11,598 | 21,686 | |||||||||
Net (loss) income from discontinued operations, net of tax | (75,925 | ) | 75,925 | — | ||||||||
Net (loss) income | (65,837 | ) | 87,523 | 21,686 | ||||||||
Diluted net income per common share from continuing operations | 0.10 | 0.11 | 0.21 | |||||||||
Diluted net (loss) income per common share from discontinued operations | (0.73 | ) | 0.73 | — | ||||||||
Diluted net (loss) income per common share | (0.63 | ) | 0.84 | 0.21 |
Detail of Adjustments:
Three Months Ended March 31, 2019 | ||||
Warehouse/manufacturing facilitystart-up costs | $ | 3,222 | ||
Plant closure related costs | 426 | |||
SKU rationalization | 505 | |||
|
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Cost of sales | 4,153 | |||
|
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Gross profit | 4,153 | |||
|
| |||
Stock-based compensation acceleration | 583 | |||
Litigation and related expenses | 371 | |||
Plant closure related costs | 69 | |||
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Operating expenses (a) | 1,023 | |||
|
| |||
Project Terra costs and other | 9,408 | |||
|
| |||
Project Terra costs and other | 9,408 | |||
|
| |||
Chief Executive Officer Succession Plan expense, net | 455 | |||
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| |||
Chief Executive Officer Succession Plan expense, net | 455 | |||
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Operating income | 15,039 | |||
|
| |||
Unrealized currency losses | 1,522 | |||
|
| |||
Interest and other expense (income), net (b) | 1,522 | |||
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| |||
Income tax related adjustments | (4,963 | ) | ||
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| |||
Provision for income taxes | (4,963 | ) | ||
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| |||
Net income from continuing operations | $ | 11,598 | ||
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|
(a) | Operating expenses include amortization of acquired intangibles, selling, general, and administrative expenses and long-lived asset and intangibles impairment. |
(b) | Interest and other expenses, net includes interest and other financing expenses, net and other expense (income), net. |
The Hain Celestial Group, Inc. • 1111 Marcus Avenue • Lake Success, NY 11042
516-587-5000 • www.hain.com