Hain Celestial (HAIN)

Katie Turner Investor Relations
Irwin Simon Founder, Chairman, President and Chief Executive Officer
Gary Tickle Chief Executive Officer, Hain Celestial-North America
James Langrock Executive Vice President and Chief Financial Officer
Rupesh Parikh Oppenheimer
Scott Mushkin Wolfe Research
Ken Goldman JPMorgan
Akshay Jagdale Jefferies
David Palmer RBC Capital Markets
Bill Chappell SunTrust
Steve Strycula UBS
Anthony Vendetti Maxim Group
Call transcript
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Good day, ladies and gentlemen. Welcome to the Hain Celestial Group Fourth Quarter Fiscal Year 2018 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Katie Turner. begin. may you Ma’am,

Katie Turner

morning. quarter for earnings and Good Hain conference us Celestial’s fourth fiscal Thank Shannon. joining you on call. Thanks, year XXXX

President Chief Gary Hain are call Chief and Hain members James the today of Vice Irwin Celestial’s as America; Founder, On with President well Executive and several are Celestial, North team Executive Officer, us Chief Tickle, Chairman, Officer; Langrock, Executive Financial today. Officer, management Simon, and as

website. to call under now, Celestial’s Hain cause earnings the all an results the financial made statements and and these or statements with materially call, website Please in differ be based from this described uncertainties I Relations. on meaning of forward-looking the management other a implied a turn actual Commission expectations and of within course forward-looking and laws. Celestial’s in are the differ to posted from Exchange are refer filed statements. annual call actual forward-looking the of discussion make expressed statements A available from for its risks and the the Simon. results this would is those to those on securities federal materially the morning over Hain at Investor to During And being any issued will measures from reconciliation that could time-to-time and of press may GAAP conference Form current results detailed of involve These on non-GAAP which release release risks Securities in to reports and XX-K report presentation, available management’s on webcast www.hain.com like is today. This could archive Irwin it of that

Irwin Simon

press everyone you, I our everybody Katie to this hope had today. to great everyone. speak go and the through that morning. is release was opportunity Thank has It to released morning good

plan global I a X-point increasingly our apparent on talked you our that progress of top is and throughout the XXXX. million work of during to globally. our our amount strategic There Our growth fiscal on initiatives, mean, including capabilities continued organization. diligently tremendous will and to accelerates financial We our – invested efforts XXXX. we team has We rate happening have fiscal tremendous to brands in the our of believe become $XX results as and improvement grow a

net single-digits. sales constant On strength year or reflects businesses. Europe net X% Rest X% a international for of increased was Our on currency the from a fiscal constant world, Canada, of mid currency sales our increased high year, UK including basis XXXX the single-digits. basis up and

pleased increased are very with strong profitability. these results and We

increased XX% For year the the fiscal to million. EBITDA over from $XXX EBITDA the and XX% adjusted world to of adjusted operations, UK $XX segment over XXXX continuing increased rest million

the geographic natural we are of business In our number results. We diversification of challenges the U.S., and faced the year. pleased organic during annual drove our a

execute invest on work and XX U.S. will initiatives. on the later. top our SKU to while reduction SKUs, brands cost you continues to and XXX and the Project these through efficiency diligently to on focus top Our team business continuing take in Terra rationalization, simplifying Gary

of business fiscal in and U.S. definitely priorities are return profitability. to higher generate the growth XXXX to top levels Our

On will review savings the are more which global in basis, our James cost efforts, productivity we and accelerating detail.

although we the the Terra benefit. particularly building cost $XX savings, brand U.S. generated inflation of year, planned For million and muted cost higher investments, the fiscal Project

the offset We to optimization help work cost. continue increased price to partially on

our will qualified added help perspectives and on with directors new price savings the independent Terra expect improve expertise margins future to who strategic provide enhanced in our us increases and X plan. leadership Project our We to We valuable in quarters. deliver us cost highly industry team long-term

calls value along and prior our our operating non-core a been business. on with to portfolio discussed XXXX businesses to closely shareholders. we management maximize review our antibiotic group leading and poultry working working strategy Protein, advisors Hain our for of asset the divest As Pure free has we fiscal in to This with our have includes fresh made decision work organic

of half we expect pay We process continue to Protein in proceeds during the our sale the the complete to plan future to fiscal the stock from buyback or debt, to business are down like first doing. XXXX. We of use Pure invest divestiture Hain

our excludes Pure results quarter from on which operations Protein. fourth Hain continuing focus let’s again Now

excited from from constant from Our markets currency the Portions emerging business UK Daniels Clean Celestial had growth region adjusted which by net brand. Europe Danival Celestial Live branded and up and year. grew growth Hain and its growth and non-dairy X% Alba, Tilda, fiscal products. brands up reflects organic growth in Hain X% Celestial about the sales opportunity in the for driven Hain tremendous other was from were Canada Sensible Tilda, the with remain Ella’s Yves, currency increased sales X% was X% in and natural strong primarily brands. In net EMEA constant we Hain the X%. This X% and

ongoing first with Food Group After staff X in is I shortcomings books to self-reported SEC and half resolve to years, of am to announce disclosed. the consistent inquiry. Future internal and India expect we venture pleased is our the reached of we previously SEC plant open we planned new and joint with addresses subject which long fiscal payment that to no with the Hain records and in proceeding commission Our controls as settlement approval very The penalty information the understanding there XXXX. an

years have not, conference incredible. Believe to one lives is organic happy I company has was to pretty mission eats, incredibly or this team the built. products XXXst on our Hain educate, of ago, the When a it my am dedicated relentless I earnings privilege lead goals a to have for world consumers. and drive XX you been us. focus the It we change better founded proud my way our behind and forward. We call, of through natural to this providing are

role As our CEO. most my hiring it’s of Non-Executive you into confident next the leadership I upon opportunities definitely for I right am transition greatest new generation believe of the firmly Chairman some that to ahead. and June a of the know the of now in announced of I time intention lie

Our Board of been quality pleased with Directors the candidates have very of we and I that have CEO interviewed.

an to my the We to and of With on call are in make process future turn final over in near the the the I stages that will successor. now expect Gary. announcement

Gary Tickle

Thank you, everyone. Irwin. Good morning

take our Our on to U.S. steps fourth during plan execute strategic continued the to quarter. team

XX priorities of focused and secondly portfolio, core and in growth certain thirdly U.S. simplify strategic headwinds progress business business. cost our growth. top on brands our and areas our XXXX from make to remain drive SKUs firstly in to We are proactively our reshaping we In incremental the reduce complexity XXX investments long-term cost We investments. our achieved disciplined core mitigate planned

into Although across on for quarter have reviews, positive distribution a of in in internal will were quarter distribution based seeing of our begin broad to most core from our distribution positive momentum timing round XX,XXX we XXXX and results recent time take translating The efforts show of have of of our impact the for channel numbers. are points these new on most fourth retailer top measured tangible to a these our seven brands already we gains of transformation outlook two These channels. impact net expectations, and improvements range results, line building resets. confirmed below fiscal initiatives the but our are retailers recent of customer

trend MULO+C is trends better improving MULO+C seeing now With trend. latest since overall our basis are XXX our points XX August We a March showing than four-week XX-week XXXX. read

in and the the impact SKU Focusing sales before snacks divestiture were In million net were rationalization. our million the flat. excluding gross sales for down increased essentially position rationalization on U.S. fourth the Taking Care from quarter, net Terra account Rosetta results more in sales increased our U.S. X.X% quarter $XX or XX%, and four XX%, up Reported rationalization, the incremental quarter. were of both marketing in Personal in of implemented club X.X% Botanica SKU into SKU in detail, $XX.X and shopper the personal $XX trade trial growth channel Terra Baby four growth brand affected in year-over-year, and programs for quarter and Sensible included customers strategic increased driving Portions channel unmeasured net across million driving Better-for-You X.X%. This business our programs which sales by care X.X%. X We Alba investments the incremental and snacks brands in penetration. our household majority

We in quarter these have continued brands behind to see FY one. building momentum ‘XX

driving in major XX, a Better-for-You invested channel latest customer single-digit the marketing natural ended July We XX-week growth in Baby platform. read our XXXX in high for programs also shopper

by customer double-digit in the the by growth. Portions negatively latest X-week read from the XXXX, and in encouraged were same of further which quarter large sales affected also the channel mass our for million. are natural distribution period March sales $X.X in one Net showing Sensible We by loss in affected net quarter the

inflation on and new the this of through with oil coconut innovations end a infused this new expect to translating segment. XX the look this off bottle weeks. decline XXXX, driven of reduce Spectrum these In is as XXXX. $X our to rollout program continues oil in continued for since been oil, costs. XXXX. patented front-of-store brand program sales also in We high to incurred Since restaging higher including bottle net net sales headwinds, reliance latest roll the Spectrum The impact on a and down running in the which the June as quarter, design category mass Please and the related coconut successful customer million XX% of significant cost March the infused by have the well great inception of try the X, logistics primarily cost to were in approximately freight today we we same oils. during by shelf pallet August $X.X million operations down warehousing

Our year. $XX.X operational quarter cost resulted combined to the last EBITDA issues in pressures compared and four million sales results with down

in to mitigated these including Terra currently spend in quarter headwinds year. the As increases that are through partially from benefit begin further Project we price with along throughout second to to as quarter optimization and offset flow fiscal improving one ‘XX move beginning expect we costs, fiscal fiscal that the of initiatives, to trade underway, XXXX these begin see we

unless of like for The which specified, data will X.X%. be would U.S. most latest the focus referenced recent on consumption to I otherwise minus read XX the Now, XX-week was MULO+C August business.

SKU the Excluding X.X%. minus trend rationalization, was

latest shows X%, We or our on which the efforts, minus gaining further business which U.S. efforts our SKU point minus back a basis rationalization distribution of full gains. is X-week that since have impact including trend. improvement are encouraging read incremental and investments X% improvements planned XXX improving are read the on to of our XX-week MULO+C March XXXX our sign in traction seen The

in channel fiscal SKUs, measured our expect we the entire trends in uneven take the continue we drive While results the core out to will to help ‘XX. we to gains in distribution MULO+C non-core continue term be believe as in improved aggressively SKU

QX for and growth fiscal expectations and rate in expect approximately taking target for flattish for as the position that end better will us of are to subsequent SKU certainly MULO+C be Our rationalization account we quarters. improvements into after in ‘XX growth

now are the brands our Turning getting Amazon, Natural Whole to stores, channel, Foods, includes club non-measured channels, stronger. the strong which and and specialty

are in net continuation up U.S. the business at XXXX. our X.X% weeks in excluding across business XX measured XX, non-measured weeks our single-digits in portfolio We channels to for rationalization pleased and non-measured SKU our SKU the read XX both consumption see the was of growth In rationalization. transformation. In results reflected ending total, dollars the July QX, high of latest latest channels

X% quarter XX% expectation to-date sales prior for is component to stated complexity, affected rationalization U.S. X%. of million SKUs rationalization SKU program drive of SKU expansion. total of reaching to sustainable XXX by simplify four As SKUs. SKUs of long-term This rationalization quarter a The X,XXX segment year. margin $XX than reduce fiscal and represented efforts In of impact ‘XX our additional versus an the growth supply important net our versus chain approximately added in three our U.S. total announced our more we over total,

Looking fiscal we of the points of different brands formats. the XX ‘XX, an versus X-week our read seeing in to XX-week channels consumption first quarter of top retail trend solid ongoing momentum grade. the we forward our now with across the XXX measured trend are MULO+C, the have XX broad growth August in improvement In in basis latest

in year-over-year continue brands with will support We our incremental XX% this one. momentum an to of in XX top investment quarter

the one impact investments are of headwind $XX that is which ‘XX expected anticipate fiscal equals will approximately which be X% While to our versus quarter in highlight approximately expanded to we of year fiscal line. drive these a in moment, I top distribution the worth will for XXXX SKU noting it rationalization prior million

well one net will we we As to James profitability a our growth confirmed the be about will to seven from retailers. our year-over-year. six discuss will more and expect come be fiscal down single-digit result, brands distribution XXXX, optimistic detail. ability We on quarter will sales as mid of our In drive key which are low expansion this impacted slightly believe across of in major

We total net new have points we strong for mentioned personal new our And have Sensible I C-store brands included will in a points programming care. XX,XXX approximately Terra on of earlier. of and distribution XX,XXX the for distribution Portion club

From invest to we benefit fiscal ‘XX. a to financial sales double for in will to these to our on of ahead continue as progresses. begin perspective e-commerce with channel expected the build of All to rollout digit year one results we expansion will and quarter growth expect

As we fiscal planned investments, distribution improvement. about in second optimistic review concludes gains improved optimization, generate growth the through to and opportunities remain and to our Project future accelerate will of we expect year price This profitability quarter over and the are turn as XXXX my of the I of Terra call balance result completed. James. which expect beginning our We initiatives to growth more and brand a fiscal for

James Langrock

morning Thank you, good Gary and everyone.

to I the flows As are continuing the position in as half Pure my operations our noted. and operation periods Today, on reminder Hain of XXXX. a to the current focus fiscal results discussion operations, as we and divestiture segment will plan of financial complete the a results discontinued the prior first cash for presented financial otherwise unless Protein related from

was XX.X%, freight gross and other basis costs items, revised was was profit UK a net with currency flat prior increased investments constant by compared percentage we year. year EBITDA constant numbers million and last $X.XX from basis our partially for the was provide divestitures essentially or This higher X% adjusted I fiscal and a guidance in due million reported net will basis. Project segments. offset $XXX partially in the as adjusted Terra to a investment point were sales financial the of cost savings. of would sales Project to We in down of fourth decline Terra $XXX increased Canada, $XX.X XX $XX.X XX.X%, quarter XX% EPS primarily the currency the trade have period. increased to year, and net million increase decline you results for X%. For year-over-year. certain quarter. the to to $X.XX offset point Adjusted key headcount each sales due last and in SG&A year-over-year a provided marketing met Adjusted QX higher million U.S., by commodity U.S. business consolidated acquisitions, on XXX now When In primarily savings.

will while increased X% million year over savings XX% adjusted to on Terra $XX.X trade on results. for XX.X% income Adjusted U.S. currency was $X.X as the in Project UK, gross gross growing the due SG&A by the highlights, Gary to and discuss due with inflation in $XX.X and offset discussed million net increased costs. was decreased investments to X% decreased and freight rates. decreased the flat adjusted operating top million basis of operating world margin invest investments XXX constant U.S. underlying adjusted $XXX U.S., world higher and million Terra so a the the gross points to and prior over to declined basis. XXX profitability decreased $XXX UK the Rest from largely commodity points XXX of higher adjusted period from basis U.S. a period, margin our year adjusted as business. year driven to gross flat million X% decreased In Europe increased U.S. I $XX.X prior year million year-over-year profit Adjusted realization. to was compared cost $XX.X to and by offset single-digits cultivate. performance continued sales period. high income prior prior to million by XX.X% Europe. in to to adjusted basis line the sales the an or And For promotional as price XX% the financial essentially constant margin mid profit of savings. marketing Project we at result basis and operating headcount Canada within partially rest increased the margin and primarily Canada gross strong to points $X.X Net million

flow cash balance our and to sheet. turning Now,

primarily XX, June the ended was in due decrease resulted making was cash year and cash prior $XX $XXX capital pricing. million, to strategic million free capital from year, free million of current $XX increased to fiscal the take in due flow operating XXXX, accounts change company year. The timing inventories the flow For operating expenditures of increased and advantage expenditures to receivable a increased from commodity purchases the

in addition wins personal In inventory we in advance of and to building the in U.S., new inventories our manufacturing are the facility distribution increasing care support transition.

June of $XXX million cash our debt and $XXX balance As net was XX, million. was

was for is operation Plainville. the charge below of company require which reduce The FreeBird lowering was with negative reported below for QX, bank XXXX. X.XX the FreeBird, of XXXX projections. Protein’s and growth and Hain at business. market times results projected The included for value. primarily continuing Similar that were Pure in projections compared results profitability in operations. our In fourth X.XX impairment fiscal associated fourth This quarter, resulted the to from ratio quarter carrying indicated conditions in Our results and the the fair leverage fiscal earnings end are well as to as times a Plainville business the internal and the not our discontinued value as sector are the to rate in the long-term Plainville

to fiscal guidance. Now, XXXX moving

have about recently Alix Terra, achieve the and in closely Board full Project team have over savings is of we comprised seeing our earnings global opportunities comprehensive Directors the growth. I and you our cost working million I goals taken savings, that significantly objectives improvements of to of including productivity we complexity of working sales group the which cost driving presentation, fiscal to margin a am XX $XXX material the across all am excited more to this year. on of on. have we for note enhanced well Partners of progressed expect organization, to the stated level the First with reduce profitable the build we quarter-over-quarter working responsibility and we This initiatives achieve is cost plan globally. our million assistance global the for organization will to profile. XXXX, from throughout we in aggressively ensure that I members as entire as On as and expect $XX Slide

our we us Some support. volume include working retailers, with key sales review at of trade will the things allow events a reduced promotional achieve planned to of are which on thorough

to see improvement in significant half during year. second of expect We our realization the gross-to-net the

formulations. includes further continued focus through margin We negotiations gross co-manufacturers. our product This material strategic raw sourcing also updating and with expect certain improved on

SKUs. managing are of We and goal our of capabilities down inventory carrying the costs, our top-selling service while distribution level the improving enhancing SNOP with

to value efficiency create our are to stockholders. detailed optimize even as we portfolio for work conducting and business, review we reduce further Finally, drive cost a

We net on $X.X X% an or of continuing constant X% for to fiscal expect X% of operation of increase year increase an basis. XXXX compared as to to currency billion, in to X% $X.XXX a the sales reported range billion

rest mid currency and single-digits U.S. to is the up and expected expecting a single-digits. grow world high the to are UK of to basis be to on mid constant We low

brand adjusted we freight approximately compared savings XX% EBITDA in million, of and cost $XXX $XXX headwinds. expect year commodity globally This of to X% million Terra expect to to fiscal an Project investment ongoing XXXX. $XX and We and increase million $XXX inflation cost X% to from increased reflects COGS million

EBITDA adjusted a XXXX. cadence little and the XXXX on we I reference presentation, want have from Slide provide fiscal an year on your fiscal For to more bridge for our XX year sales of earnings net to profitability. color

the realized the We expect growth of XXXX half the optimization to fiscal weighted investments, price strategic benefit brand from EBITDA distribution gains be adjusted of as planned net towards and sales efforts second U.S. we and in

as down to expect these new timing well of continued brand $XX slightly QX fiscal QX year-over-year first to we of flat net result EPS strategic basis EBITDA be as ‘XX a and XXXX. distribution a headwinds investments on cost to sales million and As and EBITDA $X.XX. FY percentage the XXXX adjusted quarter wins, adjusted to of was of similar and EPS was be fiscal down adjusted

productivity as progresses. addition, benefits Terra savings fiscal and cost Project the In will accelerate year

range adjusted XXXX. $X.XX share of expect to which We $X.XX $X.XX earnings in year compares per the to fiscal in

our We to expect in for to effective We be XXXX tax fiscal improvement XX%. to like our XX% would stockholders that QX. rate acknowledge see year-over-year

place However, top we throughout in guidance to good profitability line and for a will our and see are we XXXX. plan have continued achieve the improvement fiscal we year very confident

a top plan mentioned, bottom in that of and And Partners those day. On is on we on detailed in Alix already have won intently when distribution the XXXX will organization the every working the gains occur. line based have sales reflected we the cost they benefit the on timing be with reduction as the along Gary distribution of line

operations Now fiscal turning $XXX and from on $XXX million. fiscal of outlook to expect expenditures to our cash flow, million million XXXX we million to XXXX of and capital cash EBITDA flow based anticipate $XXX for capital $XX expectations, we working

We are businesses higher meet manufacturing to making and growth in our demand. investments facilities

expect we other CEO and guidance certain incur flow and cash initiatives of associated Project million agreement includes $XX with Terra related items. of $XX charges implement Our to to million the costs succession

from is operations. adjusted or As our non-GAAP guidance a a continuing reminder, basis provided on

our and identify questions. our are prospects and our non-recurring Excluding acquisitions, we execution XXXX will and Irwin, we divestitures With very the for team now results. fiscal the excited remains impact focused for beyond. future our about future In other on your Operator? summary, strategic available continue I Gary that of which any are or of initiatives items with financial


[Operator question you. first Instructions] Rupesh Our with Thank Oppenheimer. Parikh comes from

open. line Your is

Rupesh Parikh

thanks and for taking morning my Good questions.

had bottomed two operating U.S. the that related and where operating year, clearly do for see are to you then the your operating potential margins over I have going this margins feel So do margins, time? questions U.S. rebates now you

James Langrock

this is ‘XX will the will the we in believe QX year, for So went we we that’s are investments of James, FY starting as be through so operating will throughout QX that QX be that margins ‘XX. making. so down the But year-over-year will down, improve see and continued the the profitability just we starting in QX of improved

So QX U.S. is I bottom for would the business. say the

Rupesh Parikh

path as do you a Then digits look to Okay. for your you business? see forward U.S. back double

James Langrock


Irwin Simon

Yes, that’s sure. for

Rupesh Parikh

great. to that then you doing those year, distribution differently have wins expect gains? with Okay, what you to the And distribution actually sustain all this are

Gary Tickle


So, it’s a great question, it’s Gary.

our with fundamental is matter the the things insights our our diligently last the sharing retailers brands beyond months think XX to on at the the thing in demonstration working way I we been have of categories.

Now, categories. business. gains versus And course and latest the this lot already of would And XXX and XX latest of additional point single-digit our momentum one in points growth have in four for seen we have to unmeasured help you direct we in in channels investment starting improvement quarter support four double-digit already out XX-week growth. those weeks, some seen in rebuild is our XX-week And quarter a of mid will our really can read happen the just distribution I in and saw the that of top XXX we in for MULO. quarter basis SKUs in grow

support expand as that build we to that momentum continue will So anticipate and is distribution. we brands we our as see we this building

Rupesh Parikh

housekeeping a of does your share proceeds then buybacks deployment HPP or to all And question, quick at pay-downs? debt the guidance assume Great. the

Irwin Simon

not does guidance. proceeds any it in our assume No,

Rupesh Parikh

great. Okay, you. Thank


you. Thank

question comes Rob with Our Deutsche Bank. Dickerson from next

line open. Your is

Unidentified Analyst

Hi, Thanks the question. good Matt on for It’s morning. for Rob.

the option reinvestment been to as topic, option Just and Thanks. want Protein, texting around dividend Pure now a buyback listed share the the allocation it anything dividend the on in changed? Hain special cash Today, an just the as sale option the that has is with between relates not presentation, table, particularly of it’s if to option. previous conversations understand there process off included special thought the

Gary Tickle

anything No, I think table. the is don’t out

that. we shareholder definitely at businesses as think and invest in said, dividend, I will if make it for does buyback share back we our sense look

Unidentified Analyst

And perfect. X,XXX what would you in then QX’s just currently of and rationalization, identified one, production SKUs SKUs many for one out Thanks. percentage how quick reflected the of say of Okay, those results? or are

Gary Tickle

is them of reviews line So, more from SKUs. this when course, and and trade of removing we as through the go process them with replace a productive

of we with So, much I already are can would reviews anticipation we all these we as those we we of wherever position tailing balance very through are productive exit. at SKUs of a fully ensuring that end ‘XX the our say as of approximately go half The are out production. doing process surgical time but short earlier, line or of SKUs them obviously of are through we out protecting it with them fiscal the by

Unidentified Analyst

helpful. you. That’s Great. Thank


Thank you.

from question Wolfe next comes with Our Research. Mushkin Scott

open. is line Your

Scott Mushkin

questions. industry taking bit more always or like batch like been my SKU to Hain for I mean, I fashion manufactured and just much of strategically kind rat on food and branded a little the Hey, has and a natural bit little the something. process, has Mills talk a course thought thanks big General always wanted and of been organic maybe

growth adding, forward these rats, you equation? was and the understand So and side does about SKU you company stop acquisitive SKUs you going guys are business the you so to obviously in just do could trying then when maybe past view it as the the talk the of how the flipside the

Gary Tickle

question. good Yes,

XX the top So, that to obviously that SKUs and want the to the focus which core call on we is we core have brands. around keep want our brands we

terms now, we the this For of sit is rationalization in process. where

last We are over And right this build months, the started if growth in if the on totally you look now. happened that and business just XX has business momentum to focused record in we a performance. had at two through of think the back its just This seasons a Celestial year, to process. Seasonings near is where and terms repackaging reformatting year was ago what going Celestial

players tight So so SKU with Earth’s turnaround couple years years a productive where of are of and very said the were can and SKUs went we tighter heard a for couple for competition in a turnaround be and coming shelf same in lot lost which dramatic of set in on better places space Best, a performance. dramatic The a with and shelf lot we and innovation. different a of over through we and seeing competitive a category, challenging in set, definitely getting less are distribution last more we

up So we on to weeks, MULO in as if for retailer X.XX% a we you baby in very at the of Earth’s also channels just last were the is turnaround announced natural quite in results look non-measured category. the and category Best, the even And are stark read important with and performing us as strongly look captains the latest we in X.X% the well. very X XX-week

got The digital have we focus much in the we That’s core energy are the and in brands putting they business, complete is we momentum them can. of flip have job performance the supporting a love believe rat process got protect brands, consumers of impetus mechanical to are and and we of very the and supporting this types our of them wherever know out just were SKU cleanly of do the well. business one a we this a we So, these believe into job the as doing on-shelf of space because that we rebuilding great better and now. our shelf exiting process a community is our ensuring I better

Scott Mushkin

Do can’t this or no a or remember was… I follow-up and for get I

Irwin Simon

ahead Scott, go Go Scott. ahead.

Scott Mushkin

much. very Thanks

Protein of regarding this being how and asset be just color guys Pure itself, there our was So the yield? sale difficult, you quite comments will some have about your that the sale the industry around the you comments conditions maybe actually Thank I the the know expectation more made some lower, you. realized then been as about price and we made asset think should have

James Langrock

business, attractive sale half this But HPP XXXX. complete we first an in believe of to continue at asset. an is we of time attractive Scott, expect the that to the HPP

is any process. comment this However, as we on of the where are be that it appropriate ongoing process to are in middle not we would us value an the for in

comment point – we in will middle the not are this would we of process. further we So the because at


Thank you.

from Our next comes question JPMorgan. Ken Goldman with

Your open. line is

Ken Goldman

you. tell as Thank can CEO? this last Hi. Irwin, we is call far as as your

Irwin Simon

I your you I to will Ken. will the and last go you and have today it the keep keep could pay figure in you more. I call, only get in didn’t events you listen was reason to suspense, because admission make so suspense a been my few other on to

Ken Goldman

the Well, you and thank either all the provided it’s street been fun you for wild help ride the and way over years.

Irwin Simon

you, Thank Ken.

Ken Goldman

million $XX you us But came it questions supposed will you Terra couple goal, ‘XX, communication. can give as we was of to up in forgive did originally for stay to me, in $XXX a mentioned a million I was? me, of Hopefully, where you color if gap think bit in drive maybe of short that this, fiscal the Project but savings

James Langrock

it timing, strategic real is going through reformulations that really more around a you on. that lot out. are than we of you is and are sourcing timing James, really more at looking specific of a you it this get missed RFPs Ken, issue There was this and of anything is

was really issue just a than it’s timing anything else. of So more

Ken Goldman

but what of we more XXXX, Okay, should to we have of the that shouldn’t a is and case expect that you the benefit might little I and we wider in some expect XXXX have? otherwise than know bit somewhat guided to range

James Langrock

the that but to million included in so clear HPP. the and that $XXX also $XX million, would when is are Yes guiding $XXX we be to just million to be

out So are forecasting backing the included. you when actually to we than what better $XXX with we been is are HPP HPP have $XX earlier million actually would million

Ken Goldman

have I that beyond terms ongoing the had to bit Got about rate just rate I little for us would can ‘XX, it, what’s little wanted understand to for in it’s think just And is a the you company? way best higher makes sense. tax help the ‘XX a for okay, understand bit tax than on of then guidance, an

James Langrock

up I we FY a and guiding actually ‘XX, wound in been now, to working say XX% we than would right XX% are through, have where higher that’s Ken. Right little now so we

one GILTI. safe. tax we a known want taxed low I right And earnings, the to is the the previously don’t into I on income as the would So in say XX% now I is say foreign reform that it’s the intangible U.S., not global would included future thing better XX% tax to in have guiding get tax to that weeds was

So we use reduce tax tax the credits. foreign the that is a through you foreign is tax earnings can tax that have of GILTI on is issue the

tax, we significant forward to the basis. tax foreign so impacting offset rate balance the on However, a what’s our go that’s negatively have don’t credit

modeling XX% Ken. So use XX% would to doing any for are you I

Ken Goldman

Understood. appreciate much it. and Thanks so I


you. Thank

next with question from comes Akshay Jefferies. Our Jagdale

is open. line Your

Akshay Jagdale

and Irwin calls more a over morning chat. your have help the will Good for Hopefully, thank we to years. couple

Irwin Simon

Thank you.

Akshay Jagdale

the Portions? on the exclude and it’s helpful. – disclosure, But all numbers we additional the net distribution first include my is question really Sensible the or question appreciate Does

Gary Tickle

for mean, fiscal have is to already Sensible accounted in net happened that’s ‘XX. the Akshay, new ‘XX. distribution, like loss of feel Portions This I already for us fiscal we

So forward of all cycling ‘XX. in this for fiscal the our net are that distribution looking we is reviews

Akshay Jagdale

that’s X which helpful, my Yes. in was you brands for I mentioned And was brands, included now wondering X question just weren’t that? it’s

Gary Tickle

are Well, Akshay, just concluded mind, bear in fiscal ‘XX. we in

have the that gains. to So we to I confirm the concretely, purely gains. others I won’t don’t ones want discount distribution can want do that today say I get

Sensible broad-based for do some Soup, whether couple ‘XX very So, Imagine which look we gains fiscal excluding have have exciting. fiscal across already is Portions, in it’s key retailers across if we of ‘XX happened a some gains distribution the for brands what’s gains

dramatically for MULO So Imagine. broaden it will footprint our

also We will gains strong MaraNatha. see for

been innovation into one and already well core retailers. going Our large accepted is has of the mass

expanded Earth’s Celestial have for Seasonings. well, as well distribution as We as Best

have For distribution. expanded Alba, we

have said to say be set, look So broad retail still will across core our very our of that gains. we some set, the sets. distribution this I not don’t of review distribution because want if will point across we broad are I as of X the going the at SKU range gains get And through you that unfair, remaining the

across distribution the and set to its distribution we So, I of gains key support importantly, high-quality a message broad most its protect. the distribution absolutely SKUs broad it’s is think and and here intend

Akshay Jagdale

update it. think made Got some Portions, you us. be that And been I with just know with were obviously, on I us are retailer? helpful. pallet Sensible behind there your on retailer, give That’s where team we to you Portions issues you – in the there was significant that? have program has Can super but seemed and that go-to-market with positive you an some incremental had the there some supply chain particular some at issues changes etcetera, with Sensible

Gary Tickle

Sensible weeks. Portions brand XX% holistically mass that XX shape. is MULO talk excellent let’s Outside Well, growth plus is in a the in first, core one retailer, as latest our

So, well. is the as well unmeasured brand organic and well. performing now have time performing performing well. in the itself the in for channel, also performing is and We first club In also Whole it’s it’s strongly very stores very Foods

as a extremely doing So brand it’s well.

retailer, we some one where had yes, We have challenges. have

data in gains have on brand elsewhere I that when back reason we quarter that review completely meantime, show go obviously, mentioned that due is a review our of it’s distribution and we brand March have And place. is argue I good that’s my the completely foot believe retailer and that that pallet a that through to have something of XXXX take three we and the the issues. But process. will a notes is in process reconciled, have doing the but there well. high with very are no program can to great review put for We were success forward issues quality we best there. that’s I we and that been we mean, question, address to indicated back, we to cycle with review the for have all conducted and good supply process a supply all through. with I past ultimately no we in supply think we And the

Akshay Jagdale

the down EBIT going right savings implies your is again the $XX disclosure I Got cost it. have etcetera, so extra things, million. incremental million actually EBITDA to but or but other on savings, on cost one because cost impact was appreciate your had guidance a One actually are what your year you amongst last $XX profitability, on savings this here positive

that that happen year? this what happened one that to point going allow So, there reversal after XQ. are happen is sometime going to be relative to Can a will you things pretty big two to to Thanks. or

James Langrock


into year we this had So, obviously headwinds going some year. weren’t foreseeing we that the

commodity dealing issue that are with. we had had manufacturers some freight the So, headwinds. We most

we in plan now in Alix investing So, brands. as we to was that U.S. QX to out important invest And big into that the was $XX – which is going million and the with got a to more we continue we $XX into of even in the detailed obviously line to $XXX thought so million the significant very right identified than to Partners seeing we distribution million half FY QX We continued and ‘XX, but have ‘XX obviously still be going headwind. so mentioned have laid we half and the growth made are With we invest we the headwinds, it that Akshay, we reduction are those brands have have growth it’s to sight weighted. investment Gary back more back obviously is was a savings to the weighted, in going clear gains a to plan. more in accelerate

So lot ‘XX. savings to the that’s what clear FY in and line sight gives comfort we of have us a of

Akshay Jagdale

you. Perfect. it Thank will on. pass I

Irwin Simon

you. Thank


from Our Palmer next Capital David Markets. comes with question RBC

Your line is open.

David Palmer

Great. Thanks.

from and term ‘XX brands longer what brands, assume growth? your U.S. in terms your top U.S. fiscal in guidance long-term core on expect you drag with what question for line brands a Just without growth rationalization your U.S. terms you SKU your in in core do core the do of of or

Gary Tickle


the for thanks question. So

rationalization, single-digit fiscal of anticipation for had line should So so growth. the net good strong is that’s our mid to low growth ‘XX and we SKU we expect that top

comes we As the in here, to times distribution would the is see quarter on-stream. two start new as several being mentioned that really anticipation accelerate that

how course of important a very for the business a of and us soups is quarter into in two coming season. quarter course holiday is seasonality and Of our business terms tea between just then

well. low business expectation term expected longer should to this be single-digit mid we So as the growth of

David Palmer

what some your the of was the top slide in with U.S. costs, gross mentioned but lacks Hain decline, balanced Hain into growth there, margin general, here and question, in you power what showed even Hain decline a spending that’s algorithm? is isn’t you concerns And to promotional promotion spending big we would say return line before it’s and the and trade facing bottom this this in companies trucking and you to pricing a and points of take something would that basis food trade have that XXX concerns U.S. margin just

Gary Tickle

it. but think business. points I in Well, quarter, are know understand building targeted proof in investment we to Yes. are it’s I we business behind momentum are absolutely making fix building we one important the that can’t momentum. seeing the the we And are

it the in business live seeing are We today.

additionally that’s we But of trade business. tools are the the have spend are coming with a with we momentum where we that we line momentum plans. have that in of investment mentioned you sight how the think build I us help more to effectively. a and suggests and James a number is we medium-term using sustainable position manage earlier trade investment important we had course to the back our to to AlixPartners how ahead of that invest of your

quarter around that the in distribution then the the to we the over rate building very totally in a And that really much is that through this this the of that one of distribution spend. I short-term. suggests momentum at normal of is run steady medium-term is targeted get lot state the and sustainable coming gain. end have support We believe ultimately back a investment This

David Palmer

Okay. Thank you.


you. Thank

with Our Chappell next from Bill SunTrust. question comes

is open. line Your

Bill Chappell

Thanks. Good morning.

Irwin Simon

Good morning.

Bill Chappell

that I understand the if to low of oils, food, distribution not goal can you or back get than Just going your baby to on and categories I more that trying categories that that or sure to of faster confidence little kind packaged those David’s both from growing fast you versus wanted I type am so guess you mean kind those a categories? like you especially understand more look tea line much in how level are of getting standard are to single-digit aren’t you with grow single-digits not the gives seeing or – to but I growth even near-term, gains follow-up of you – just mid question I some what into some doing mean even that am like and I at bit low that are of

James Langrock

One it’s is I – touched easier a that Gary – demand I and obviously is it’s comp think one strong very one in the James, let thing one seeing we is personal follow-up as is we as will are upon well care. as

drive personal to So the mid single-digit in care we that’s growth seeing helping are growth, low U.S. what’s so the very strong

Gary Tickle

XX the tremendous of white business key point on in your us mentioned look even expanding over there for these if you where It’s in if And we businesses have are category strong business to to growth high with the the course That’s ACVs categories of if not it’s on we it. retailers with grow. we here Absolutely to in look they where the back and I investing snacks part we believe have to expect and share as before, and our brands soups baby in weeks, grow. it’s clearly Best saw this these categories we in coming take grow inside of at categories. where obviously share growing availability key take our share in And the distribution to space opportunity growth opportunity had we we is and tremendous and is category this year, great and gaining us. and X% us you in have no are for where our as for Yes. opportunity so example even last Earth’s the

Bill Chappell

SKU understand FX for million your you hit. trying how versus headwinds think rationalization? split you million, expecting just FX Okay. switching $XX guess are to about Can to much rat breakout, I bridge $XX from SKU on it’s I EBITDA the out on XXXX, that

James Langrock

million to and So, translational, to just as SKU make $X inflationary that $XX $X about FX probably rat million to other is million. $XX million is the that’s out other then cost it’s there $XX some million, well roughly transactional costs that The up difference. there number inflationary in and is

Bill Chappell

The market on better? there that it, been Pure me, are Thanks. pulling on, any I everything market conditions has Hain so postponing one to for is Protein, conditions last just mean, it thought and difficult going and

Irwin Simon


this end said of fiscal the Our plan to look the the to sorry. of by end we calendar our is continue year, or by year have as divested

Bill Chappell

Thanks it. much. so Got

Irwin Simon

you. Thank


with Our UBS. comes from question next Strycula Steve

Your line open. is

Steve Strycula

morning. good Hi,

Irwin Simon

Good morning.

Steve Strycula

that maybe for the the XX a the this softer X end next key question if you months? as would year, full like little it’s variables on world be year low at at Irwin the XX in it the seeing of are you fiscal us are and that outlook the looks to First what Can speak – what QX. EBITDA high-end up range of at especially kind to we maybe what for like to the in the just looks the of walk through over are end

Irwin Simon

that, to going James I do let Steve. am

James Langrock

on that. those always and we at have that end Project the – will savings in Like from our on gains there we we half. would are U.S. the Terra back would if two the potentially $XX get towards the potentially, going said the for believe end So are as are higher end I of – Terra we we – issues comfortable low in But weighted – projects, is earlier, confident will million. have with like low things getting the lower if but lower it’s if distribution then strong is we million would start see instead we the be the the sales one $XXX the obviously Project the with more to a our savings. the low And growth of that said of be end, with timing I probably to guidance some at the very us of are end I to of the end, us be hopefully

be we instead the would our if range higher lower but lower in the sales at the the at end U.S. gains. of we end, obviously are of came end So, the seeing distribution

so the at hopefully will high-end. be we And

up down it Project what Terra with be comes and U.S. will savings. where would that’s land sales to So we really the

Irwin Simon

we back Steve, come is the big as execution thing here.

As the in see of savings UK, the throughout we and a we Project part are shown year, in around we have world are Europe, in we it Terra the executed big executed have in Project is expecting you that of big, Canada. executing the ‘XX. executed we we amount Terra

and marketing tremendous dollars additional have trade. We spent of amount on

We up have of were distribution, picked distribution new that distribution amount points. XX,XXX new tremendous

the it all So here. the end of day, to comes back at execution

feeling a So, the increase thing sales, I the one think are get it’s good got price EBITDA to warehousing about been we and Partners Project we to hit on with up the distribution, that getting And freight in get and front Terra the lined on execute these and able of are on that Alix numbers these things some of out of headwinds have all working why biggest savings. that’s and we there.

Steve Strycula

that doing relative are what’s good if to broader speak now, some can seeing Okay, that’s for maybe the packaged lot right to trends to hear of maybe companies the industry management, I helpful. decrease X% cost And what very a of enabling right lower little a right bit going than is the you year the then food right it’s full did that’s COGS number are the inflation that now? what so other we that’s

James Langrock

in is it did we – and half sourcing comments. at Alix second Partners of and out the looking the of lot we So went of We have part is, strategic that a we with have worked XXXX.

RFP. now We are with

have So that at got look in part you benefit that cost the base when there. of we

all are of comfortable, we we So identified headwinds. the have

and when have We are X% goods line, so kind a by of cost us. number of cost sold our for that at the is comfortable went line we base we reasonable look

Irwin Simon

XX% we the our think in-house. other produced I of thing products about is

is XX% other in Coleman. The

So fixed plus a tolling cost it’s arrangement.

a Coleman. from procuring us helps I they that’s pool tremendously that as think the with So and bigger are

Steve Strycula

they Okay. mean retailers enabled are they pass maybe feedback on how it have along, is final a present that the where past? the will new responsive more been some question my you now of from what I day in relative you to I And lot price the getting being the right the increase distribution, to and are get to

Irwin Simon

Steve back and back. So question and I come I that’s a I think come good

in offices are But increase up. we back number label ones that with I at the thrown one retailers there are COGS retailers and think that business. we are many out we going a April. went March, in one, when of the the procurement with first also They And it. private are agreement went are today price they in know

So products, stop to on spending on the stop helpful aren’t them too price brands to helpful I fight to to spending them. sales. their end we either, can spending at the And it’s they it’s we If going consumers on brands are on or increase and and stop them on think the they of going push back to take buy margins, a the products. day the got it’s and

is us a brands, need grow a this a is in drop money increase think there costs support why just now, quarter not most fourth the in retailers. and this our I taking with it price our has to through of costs. that them helped spent was of commodity in is, increase here an I this entire pockets, to million business. and not helpful our increase. tremendously And price higher are with we to brands $XX are go and wait million a our trade most on very we part sort to say money offset just we showing to And are So investing in important price of and and that $XX our and get the marketing taking our that grab we We is think back additional


Thank you.

next Vendetti Anthony with Group. comes question Maxim from Our

is line Your open.

Anthony Vendetti

Yes. morning. Thanks. Good

has greatly I would for prior to been appreciated. it greatly your over you like echo Irwin want – years, of I candidness the the and First, to was thank some settlements. help

Irwin Simon

Thank you, Anthony. I appreciate it.

Anthony Vendetti

sales talked sales, the talk online specifically the specifically On about been can on and the follow-up? that’s one this the channel, but we side growth been of business I has know quarter natural the just online you about Amazon, what

James Langrock

had with ultimately performance of call year and interest. us But go it quarter, I So and issues mentioned slower quarter through fiscal first the into e-com quarter of of because work ultimately while specific couple full still this last to partner online with double specific growth some set-up being I are have in is digit to our one that for all double a which growth as was had expect the commercial we our we again one I we in won’t we have because for the detail in digit ‘XX. e-com and the done – growth, long-term slightly of partner, predominantly issues

we is trying I think the Amazon key a partner. thing growth. for broad to to just are e-commerce It’s for based particular build us about not approach or one e-com

and retail are us. are all for we of taking broad them from working Walmart.com gains partners we in click growth with that of and wide great e-com across, the seeing have a range collect, distribution are We

broad our I up So let’s ‘XX platform that baby what more traditional going strongly growth started hub see nice setting and expanding was where strong as us beyond snacks personal say for a and care forward. based in we into expanding and

Anthony Vendetti

in a through just – go ‘XX, lastly of the where that level, the in then of bottom margins what’s more are couple once this of the goal? first years, way quarter Terra Project its works And operating could sort here you next high on expecting in first fiscal to margins, is to

James Langrock

expansion, on future but have a ‘XX the that We outlook in number margin guidance XXXX we give Project specific it’s… XXXX Terra significant to savings Anthony will out have cost are and and believe beyond. now with But have obviously, provided and the going believe ‘XX not in we – right we we

Anthony Vendetti

Understood. Alright, thank you.


you. remarks. back Thank for I question-and-answer turn over would to like This to concludes call closing session. the now the management

Irwin Simon

to professionals from analysts, the on call great true and from shareholders, a you Hain nice Thank comments. I to with all and is always everybody everybody not, thank all and joining you it want you last today’s everybody. been earnings your back we for the two-way or And want my have to was work good this for have whether great had thank I forth. call. call relationships

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there a is there a a Terra Seasonings of Gary lot is lot great our there of of a there lot are Celestial of out said, is Portion, there, tea. supply of is As Chips iced products lot blueprint, Sensible

So, again you Have soon. everybody forward look thank speaking to to day. you a and good


Ladies and Thanks a gentlemen, day. and this for today’s concludes your participation have conference. wonderful