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Hain Celestial Reports First Quarter 2023 Financial Results

The Hain Celestial Group, Inc.
The Hain Celestial Group, Inc.

North America Net Sales Increased 8.6%; North America Adjusted Net Sales Increased 3.4%

Net Income of $6.9 million; Adjusted Net Income of $9.2 million

Adjusted EBITDA on Constant Currency Basis of $38.6 million

Reaffirming Full Year Fiscal 2023 Guidance

LAKE SUCCESS, N.Y., Nov. 08, 2022 (GLOBE NEWSWIRE) -- The Hain Celestial Group, Inc. (Nasdaq: HAIN) (“Hain Celestial”, “Hain” 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 first quarter ended September 30, 2022.

Mark L. Schiller, Hain Celestial’s President and Chief Executive Officer, commented, “Our first quarter results delivered performance better than our guidance with sequential improvements in gross margin and bottom-line growth versus the fourth quarter of fiscal 2022. Behind the continued strength of our growth brands, we benefitted from the solid performance of our supply chain and continued productivity efforts and strong contributions from our North America business. As a result, this led to sequential improvements in both segment and total company margins. International remains extremely volatile, but we are managing what we control and making good progress against our full year plan. While we expect continued volatility, we remain confident in our fiscal 2023 outlook and expect to return to profitable growth later in the year.”

FINANCIAL HIGHLIGHTS

Summary of First Quarter Results Compared to the Prior Year Period

  • Net sales decreased 3% to $439.4 million compared to the prior year period.

  • When adjusted for foreign exchange, acquisitions, divestitures and discontinued brands, net sales decreased 1% compared to the prior year period.

  • Gross profit margin of 21.5%, a 170-basis point decrease from the prior year period.

  • Adjusted gross profit margin of 21.5%, a 240-basis point decrease from the prior year period.

  • Net income of $6.9 million compared to $19.4 million in the prior year period.

  • Adjusted net income of $9.2 million compared to $23.8 million in prior year period.

  • Adjusted EBITDA on a constant currency basis of $38.6 million compared to $47.3 million in the prior year period; Adjusted EBITDA margin on a constant currency basis of 8.3%, a 210-basis point decrease compared to the prior year period.

  • Earnings per diluted share (“EPS”) of $0.08 compared to $0.20 in the prior year period.

  • Adjusted EPS of $0.10 compared to $0.25 in the prior year period.

* This press release includes certain non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. Reconciliations of non-GAAP financial measures to GAAP financial measures and other non-GAAP financial calculations are provided in the tables included in this press release.

SEGMENT HIGHLIGHTS

The Company operates under two reportable segments: North America and International.

North America
North America net sales were $288.4 million, a 9% increase compared to the prior year period. When adjusted for foreign exchange, acquisitions, divestitures and discontinued brands, net sales increased by approximately 3% from the prior year period mainly due to strong sales in the snacks, yogurt, baby, and other product categories in the United States, partially offset by lower sales in personal care products and some lingering supply shortages across several brands.

Segment gross profit was $65.5 million, an increase of 15% from the prior year period. Adjusted gross profit was $65.6 million, an increase of 11% from the prior year period. Gross margin was 22.7%, a 130-basis point increase from the prior year period, and adjusted gross margin was 22.7%, a 40-basis point increase from the prior year period. The increase was mainly driven by pricing increases and cost improvements driven by higher productivity, partially offset by inflation and lower net sales in Canada compared to the prior year period.

Segment operating income was $24.4 million, a 45% increase from the prior year period. Adjusted operating income was $24.8 million, a 21% increase from the prior year period. The increase in operating income was mainly driven by top-line sales due to pricing increases and productivity, partly offset by inflation and lower net sales in the Canada operating segment when compared with the prior year quarter.

Adjusted EBITDA on a constant currency basis was $30.9 million, a 28% increase from the prior year period. This represented 10.7% as a percentage of net sales on a constant currency basis, a 160-basis point increase from the prior year period.

International
International results were similar to those achieved in fourth quarter of fiscal 2022. Net sales were $151.0 million, a 20% decrease compared to the prior year period. When adjusted for foreign exchange, net sales decreased 7% compared to the prior year period mainly due to continued softness in plant-based categories and the loss of a large non-dairy co-manufacturing customer in Europe.

Segment gross profit was $28.8 million, a 41% decrease from the prior year period. Adjusted gross profit was $28.8 million, a decrease of 42% from the prior year period. Gross margin was 19.1%, a 660-basis point decrease from the prior year period, and adjusted gross margin was 19.1%, a 700-basis point decrease from the prior year period. The decrease in gross profit was mainly due to the aforementioned decrease in sales, as well as higher energy and supply chain costs and under-absorption of overhead costs at our manufacturing facilities compared to the prior year period.

Segment operating income was $7.7 million, a 68% decrease from the prior year period. Adjusted operating income was $8.0 million, a decrease of 68% from the prior year period. The decrease in operating income was mainly due to lower gross profit resulting from a decline in sales, as well as higher energy and supply chain costs and under-absorption of overhead costs at our manufacturing facilities compared to the prior year period.

Adjusted EBITDA on a constant currency basis was $17.5 million, a 46% decline from the prior year period. This represented 9.9% as a percentage of net sales on a constant currency basis, a 720-basis point decline from the prior year period.

FULL YEAR FISCAL 2023 GUIDANCE

While we expect continued volatility, especially in Europe, the Company is reaffirming its previously disclosed guidance of adjusted net sales and adjusted EBITDA on a constant currency basis of -1% to +4% compared to the prior year, with growth skewed toward the second half of the year driven by:

  • Ongoing momentum in North America

  • 2023 price increases, most of which are already accepted by retail partners, to offset expected mid-teens year-over-year inflation

  • Continued improvement in our supply chain performance with less disruptions, robust productivity and continued cost containment and

  • An uncertain, but improving, retail environment in the United Kingdom and new contracts on our non-diary beverage business in Europe

Contacts:
Investor Relations:
Chris Mandeville
ICR
hain@icrinc.com

Media:
Robin Shallow
robin@robincomm.com

Conference Call and Webcast Information
Hain Celestial will host a conference call and webcast today at 8:30 AM Eastern Time to discuss its results and business outlook. Investors interested in participating in the live call can dial 877-407-9716 from the U.S. and 201-493-6779 internationally. The call will be webcast and the accompanying presentation will be available under the Investor Relations section of the Company’s website at www.hain.com.

About The Hain Celestial Group, Inc.
The Hain Celestial Group, Inc. (Nasdaq: HAIN) is a leading organic and natural products company that has been committed to creating A Healthier Way of Life® since 1993. Headquartered in Lake Success, NY with operations in North America, Europe, Asia and the Middle East, Hain Celestial’s food and beverage brands include Celestial Seasonings®, Clarks™, Cully & Sully®, Earth’s Best®, Ella’s Kitchen®, Frank Cooper’s®, Garden of Eatin’®, Hartley’s®, Health Valley®, Imagine®, Joya®, Lima®, Linda McCartney’s® (under license), MaraNatha®, Natumi®, New Covent Garden Soup Co.®, ParmCrisps®, Robertson’s®, Rose’s® (under license), Sensible Portions®, Spectrum®, Sun-Pat®, Terra®, The Greek Gods®, Thinsters®, Yorkshire Provender® and Yves Veggie Cuisine®. Hain Celestial’s personal care brands include Alba Botanica®, Avalon Organics®, JASON®, Live Clean® and Queen Helene®. For more information, visit hain.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. The words “believe,” “expect,” “anticipate,” “may,” “should,” “plan,” “intend,” “potential,” “will” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include, among other things, our beliefs or expectations relating to our future performance, results of operations and financial condition; foreign exchange and inflation rates; our strategic initiatives; our business strategy; our supply chain, including the availability and pricing of raw materials; our brand portfolio; pricing actions and product performance; current or future macroeconomic trends; and future corporate acquisitions or dispositions.

Risks and uncertainties that may cause actual results to differ materially from forward-looking statements include: challenges and uncertainty resulting from the impact of competition; our ability to manage our supply chain effectively; input cost inflation, including with respect to freight and other distribution costs; foreign currency exchange risk; risks arising from the Russia-Ukraine war; disruption of operations at our manufacturing facilities; reliance on independent contract manufacturers; challenges and uncertainty resulting from the COVID-19 pandemic; changes to consumer preferences; customer concentration; reliance on independent distributors; the availability of natural and organic ingredients; risks associated with operating internationally; risks associated with outsourcing arrangements; our ability to execute our cost reduction initiatives and related strategic initiatives; our ability to identify and complete acquisitions or divestitures and our level of success in integrating acquisitions; our reliance on independent certification for a number of our products; the reputation of our Company and our brands; our ability to use and protect trademarks; general economic conditions; the United Kingdom’s exit from the European Union; cybersecurity incidents; disruptions to information technology systems; the impact of climate change; liabilities, claims or regulatory change with respect to environmental matters; potential liability if our products cause illness or physical harm; the highly regulated environment in which we operate; pending and future litigation; compliance with data privacy laws; compliance with our credit agreement; the discontinuation of LIBOR; our ability to issue preferred stock; the adequacy of our insurance coverage; impairments in the carrying value of goodwill or other intangible assets; and other risks and matters described in our most recent Annual Report on Form 10-K and our other filings from time to time with the U.S. Securities and Exchange Commission.

We undertake no obligation to update forward-looking statements to reflect actual results or changes in assumptions or circumstances, except as required by applicable law.

Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures, including, among others, adjusted operating income and its related margin, adjusted gross profit and its related margin, adjusted net income, adjusted earnings per diluted share, net sales adjusted for the impact of foreign exchange, acquisitions, divestitures and discontinued brands, adjusted EBITDA and its related margin, adjusted EBITDA on a constant currency basis and operating free cash flows. The reconciliations of historic non-GAAP financial measures to the comparable GAAP financial measures are provided in the tables below. Management believes that the non-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. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-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 and Cash Flows presented in accordance with GAAP.

Certain forward-looking non-GAAP financial measures included in this press release are not reconciled to the comparable forward-looking GAAP financial measures. The Company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include litigation and related expenses, transaction costs associated with acquisitions and divestitures, productivity and transformation costs, impairments, gains or losses on sales of assets and businesses, foreign exchange movements and other items. The unavailable information could have a significant impact on the Company’s GAAP financial results.

The Company provides net sales adjusted for the impact of foreign currency, acquisitions, divestitures and discontinued brands to demonstrate 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 from period to period.

The Company believes presenting net sales adjusted for the impact of foreign 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 on period-to-period comparability given the volatility in foreign currency exchange markets. To present net sales adjusted for the impact of foreign currency, 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 monthly foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

To present net sales adjusted for the impact of acquisitions, the net sales of an acquired business are excluded from fiscal quarters constituting or falling within the current period and prior period where the applicable fiscal quarter in the prior period did not include the acquired business for the entire quarter. To present net sales adjusted for the impact of divestitures and discontinued brands, the net sales of a divested business or discontinued brand are excluded from all periods.

The Company provides adjusted EBITDA and adjusted EBITDA on a constant currency basis because 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 Company believes presenting adjusted EBITDA on a constant currency basis provides useful information to investors because it provides transparency to underlying performance in the Company’s adjusted EBITDA by excluding the effect that foreign currency exchange rate fluctuations have on period-to-period comparability given the volatility in foreign currency exchange markets.

The Company defines adjusted EBITDA as net income before net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency gains, litigation and related costs, plant closure related costs, net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, costs associated with acquisitions, divestitures and other transactions, gains on sales of assets, and other adjustments. Adjusted EBITDA on a constant currency basis reflects adjusted EBITDA, as defined above, adjusted for the impact of foreign currency. To present adjusted EBITDA on a constant currency basis, current period adjusted EBITDA 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 monthly foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

The Company views operating free cash flows as an important measure because it is one factor in evaluating the amount of cash available for discretionary investments. The Company defines operating free cash flows as cash used in or provided by operating activities (a GAAP measure) less purchases of property, plant and equipment.


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(unaudited and in thousands)

 

 

 

 

 

September 30, 2022

 

June 30, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

51,794

 

 

$

65,512

 

Accounts receivable, net

 

172,692

 

 

 

170,661

 

Inventories

 

315,882

 

 

 

308,034

 

Prepaid expenses and other current assets

 

53,499

 

 

 

54,079

 

Assets held for sale

 

1,840

 

 

 

1,840

 

Total current assets

 

595,707

 

 

 

600,126

 

Property, plant and equipment, net

 

281,540

 

 

 

297,405

 

Goodwill

 

912,278

 

 

 

933,796

 

Trademarks and other intangible assets, net

 

463,161

 

 

 

477,533

 

Investments and joint ventures

 

13,827

 

 

 

14,456

 

Operating lease right-of-use assets, net

 

115,517

 

 

 

114,691

 

Other assets

 

34,960

 

 

 

20,377

 

Total assets

$

2,416,990

 

 

$

2,458,384

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

Current liabilities:

 

 

 

Accounts payable

$

157,916

 

 

$

174,765

 

Accrued expenses and other current liabilities

 

91,906

 

 

 

86,833

 

Current portion of long-term debt

 

7,657

 

 

 

7,705

 

Total current liabilities

 

257,479

 

 

 

269,303

 

Long-term debt, less current portion

 

891,123

 

 

 

880,938

 

Deferred income taxes

 

97,813

 

 

 

95,044

 

Operating lease liabilities, noncurrent portion

 

109,858

 

 

 

107,481

 

Other noncurrent liabilities

 

19,322

 

 

 

22,450

 

Total liabilities

 

1,375,595

 

 

 

1,375,216

 

Stockholders' equity:

 

 

 

Common stock

 

1,112

 

 

 

1,111

 

Additional paid-in capital

 

1,207,120

 

 

 

1,203,126

 

Retained earnings

 

776,021

 

 

 

769,098

 

Accumulated other comprehensive loss

 

(216,944

)

 

 

(164,482

)

 

 

1,767,309

 

 

 

1,808,853

 

Less: Treasury stock

 

(725,914

)

 

 

(725,685

)

Total stockholders' equity

 

1,041,395

 

 

 

1,083,168

 

Total liabilities and stockholders' equity

$

2,416,990

 

 

$

2,458,384

 

 

 

 

 


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(unaudited and in thousands, except per share amounts)

 

 

 

 

 

First Quarter

 

 

2023

 

 

 

2022

 

 

 

 

 

Net sales

$

439,351

 

 

$

454,903

 

Cost of sales

 

345,016

 

 

 

349,485

 

Gross profit

 

94,335

 

 

 

105,418

 

Selling, general and administrative expenses

 

74,951

 

 

 

73,989

 

Amortization of acquired intangible assets

 

2,788

 

 

 

2,095

 

Productivity and transformation costs

 

773

 

 

 

3,983

 

Proceeds from insurance claim

 

-

 

 

 

(196

)

Operating income

 

15,823

 

 

 

25,547

 

Interest and other financing expense, net

 

7,677

 

 

 

1,856

 

Other income, net

 

(1,790

)

 

 

(788

)

Income before income taxes and equity in net loss of equity-method investees

 

9,936

 

 

 

24,479

 

Provision for income taxes

 

2,631

 

 

 

4,542

 

Equity in net loss of equity-method investees

 

382

 

 

 

526

 

Net income

$

6,923

 

 

$

19,411

 

 

 

 

 

Net income per common share:

 

 

 

Basic

$

0.08

 

 

$

0.20

 

Diluted

$

0.08

 

 

$

0.20

 

 

 

 

 

Shares used in the calculation of net income per common share:

 

 

 

Basic

 

89,307

 

 

 

97,121

 

Diluted

 

89,493

 

 

 

97,438

 

 

 

 

 


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(unaudited and in thousands)

 

 

 

 

 

First Quarter

 

 

2023

 

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net income

$

6,923

 

 

$

19,411

 

Adjustments to reconcile net income to net cash (used in) provided by operating activities

 

 

 

Depreciation and amortization

 

11,970

 

 

 

10,855

 

Deferred income taxes

 

(1,497

)

 

 

(2,105

)

Equity in net loss of equity-method investees

 

382

 

 

 

526

 

Stock-based compensation, net

 

3,994

 

 

 

4,287

 

Gain on sale of assets

 

(60

)

 

 

(276

)

Other non-cash items, net

 

(1,457

)

 

 

(1,093

)

Increase (decrease) in cash attributable to changes in operating assets and liabilities:

 

 

Accounts receivable

 

(9,589

)

 

 

(9,443

)

Inventories

 

(16,907

)

 

 

2,277

 

Other current assets

 

2,541

 

 

 

900

 

Other assets and liabilities

 

1,348

 

 

 

(1,566

)

Accounts payable and accrued expenses

 

(2,764

)

 

 

13,813

 

Net cash (used in) provided by operating activities

 

(5,116

)

 

 

37,586

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Purchases of property, plant and equipment

 

(7,215

)

 

 

(17,810

)

Investments and joint ventures, net

 

191

 

 

 

(408

)

Proceeds from sale of assets

 

96

 

 

 

164

 

Net cash used in investing activities

 

(6,928

)

 

 

(18,054

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Borrowings under bank revolving credit facility

 

80,000

 

 

 

120,000

 

Repayments under bank revolving credit facility

 

(69,875

)

 

 

(5,000

)

Payments of other debt, net

 

(72

)

 

 

(237

)

Share repurchases

 

-

 

 

 

(177,103

)

Employee shares withheld for taxes

 

(229

)

 

 

(1,175

)

Net cash provided by (used in) financing activities

 

9,824

 

 

 

(63,515

)

Effect of exchange rate changes on cash

 

(11,498

)

 

 

(2,926

)

Net decrease in cash and cash equivalents

 

(13,718

)

 

 

(46,909

)

Cash and cash equivalents at beginning of period

 

65,512

 

 

 

75,871

 

Cash and cash equivalents at end of period

$

51,794

 

 

$

28,962

 

 

 

 

 



THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Net Sales, Gross Profit and Operating Income (Loss) by Segment

(unaudited and in thousands)

 

 

 

 

 

 

 

 

 

North America

 

International

 

Corporate/
Other

 

Hain
Consolidated

Net Sales

 

 

 

 

 

 

 

Net sales - Q1 FY23

$

288,396

 

 

$

150,955

 

 

$

-

 

 

$

439,351

 

Net sales - Q1 FY22

$

265,525

 

 

$

189,378

 

 

$

-

 

 

$

454,903

 

% change - FY23 net sales vs. FY22 net sales

 

8.6%

 

 

 

(20.3)%

 

 

 

 

 

(3.4)%

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

Q1 FY23

 

 

 

 

 

 

 

Gross profit

$

65,535

 

 

$

28,800

 

 

$

-

 

 

$

94,335

 

Non-GAAP adjustments(1)

 

30

 

 

 

6

 

 

 

-

 

 

 

36

 

Adjusted gross profit

$

65,565

 

 

$

28,806

 

 

$

-

 

 

$

94,371

 

% change - FY23 gross profit vs. FY22 gross profit

 

15.4%

 

 

 

(40.8)%

 

 

 

 

 

(10.5)%

 

% change - FY23 adjusted gross profit vs. FY22 adjusted gross profit

 

10.7%

 

 

 

(41.8)%

 

 

 

 

 

(13.2)%

 

Gross margin

 

22.7%

 

 

 

19.1%

 

 

 

 

 

21.5%

 

Adjusted gross margin

 

22.7%

 

 

 

19.1%

 

 

 

 

 

21.5%

 

 

 

 

 

 

 

 

 

Q1 FY22

 

 

 

 

 

 

 

Gross profit

$

56,809

 

 

$

48,609

 

 

$

-

 

 

$

105,418

 

Non-GAAP adjustments(1)

 

2,410

 

 

 

875

 

 

 

-

 

 

 

3,285

 

Adjusted gross profit

$

59,219

 

 

$

49,484

 

 

$

-

 

 

$

108,703

 

Gross margin

 

21.4%

 

 

 

25.7%

 

 

 

 

 

23.2%

 

Adjusted gross margin

 

22.3%

 

 

 

26.1%

 

 

 

 

 

23.9%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

Q1 FY23

 

 

 

 

 

 

 

Operating income (loss)

$

24,445

 

 

$

7,675

 

 

$

(16,297)

 

 

$

15,823

 

Non-GAAP adjustments(1)

 

336

 

 

 

327

 

 

 

3,938

 

 

 

4,601

 

Adjusted operating income (loss)

$

24,781

 

 

$

8,002

 

 

$

(12,359)

 

 

$

20,424

 

% change - FY23 operating income (loss) vs. FY22 operating income (loss)

 

45.1%

 

 

 

(68.1)%

 

 

 

6.1%

 

 

 

(38.1)%

 

% change - FY23 adjusted operating income (loss) vs. FY22 adjusted operating income (loss)

 

20.7%

 

 

 

(68.3)%

 

 

 

8.1%

 

 

 

(40.5)%

 

Operating income margin

 

8.5%

 

 

 

5.1%

 

 

 

 

 

3.6%

 

Adjusted operating income margin

 

8.6%

 

 

 

5.3%

 

 

 

 

 

4.6%

 

 

 

 

 

 

 

 

 

Q1 FY22

 

 

 

 

 

 

 

Operating income (loss)

$

16,842

 

 

$

24,069

 

 

$

(15,364)

 

 

$

25,547

 

Non-GAAP adjustments(1)

 

3,695

 

 

 

1,176

 

 

 

3,926

 

 

 

8,797

 

Adjusted operating income (loss)

$

20,537

 

 

$

25,245

 

 

$

(11,438)

 

 

$

34,344

 

Operating income margin

 

6.3%

 

 

 

12.7%

 

 

 

 

 

5.6%

 

Adjusted operating income margin

 

7.7%

 

 

 

13.3%

 

 

 

 

 

7.5%

 

 

 

 

 

 

 

 

 

(1) See accompanying table "Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS"

 

 

 

 

 

 

 

 


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS

(unaudited and in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

First Quarter

 

2023 GAAP

Adjustments

2023 Adjusted

 

2022 GAAP

Adjustments

2022 Adjusted

 

 

 

 

 

 

 

 

Net sales

$

439,351

$

-

 

$

439,351

 

$

454,903

 

$

-

 

$

454,903

Cost of sales

 

345,016

 

(36

)

 

344,980

 

 

349,485

 

 

(3,285

)

 

346,200

Gross profit

 

94,335

 

36

 

 

94,371

 

 

105,418

 

 

3,285

 

 

108,703

Operating expenses(a)

 

77,739

 

(3,792

)

 

73,947

 

 

76,084

 

 

(1,725

)

 

74,359

Productivity and transformation costs

 

773

 

(773

)

 

-

 

 

3,983

 

 

(3,983

)

 

-

Proceeds from insurance claim

 

-

 

-

 

 

-

 

 

(196

)

 

196

 

 

-

Operating income

 

15,823

 

4,601

 

 

20,424

 

 

25,547

 

 

8,797

 

 

34,344

Interest and other expense, net(b)

 

5,887

 

1,751

 

 

7,638

 

 

1,068

 

 

1,469

 

 

2,537

Provision for income taxes

 

2,631

 

546

 

 

3,177

 

 

4,542

 

 

2,910

 

 

7,452

Equity in net loss of equity-method investees

 

382

 

-

 

 

382

 

 

526

 

 

-

 

 

526

Net income

 

6,923

 

2,304

 

 

9,227

 

 

19,411

 

 

4,418

 

 

23,829

 

 

 

 

 

 

 

 

Diluted net income per common share

 

0.08

 

0.02

 

 

0.10

 

 

0.20

 

 

0.05

 

 

0.25

 

 

 

 

 

 

 

 

Detail of Adjustments:

 

 

 

 

 

 

 

 

 

Q1 FY23

 

 

 

Q1 FY22

 

Plant closure related costs, net

 

$

36

 

 

 

 

$

996

 

 

Warehouse/manufacturing consolidation and other costs

 

 

-

 

 

 

 

 

2,289

 

 

Cost of sales

 

 

36

 

 

 

 

 

3,285

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

36

 

 

 

 

 

3,285

 

 

 

 

 

 

 

 

 

 

Transaction and integration costs, net

 

 

1,367

 

 

 

 

 

(231

)

 

Litigation expenses

 

 

2,463

 

 

 

 

 

1,956

 

 

Plant closure related costs, net

 

 

(38

)

 

 

 

 

-

 

 

Operating expenses(a)

 

 

3,792

 

 

 

 

 

1,725

 

 

 

 

 

 

 

 

 

 

Productivity and transformation costs

 

 

773

 

 

 

 

 

3,983

 

 

Productivity and transformation costs

 

 

773

 

 

 

 

 

3,983

 

 

 

 

 

 

 

 

 

 

Proceeds from insurance claim

 

 

-

 

 

 

 

 

(196

)

 

Proceeds from insurance claim

 

 

-

 

 

 

 

 

(196

)

 

 

 

 

 

 

 

 

 

Operating income

 

 

4,601

 

 

 

 

 

8,797

 

 

 

 

 

 

 

 

 

 

Gain on sale of assets

 

 

(40

)

 

 

 

 

(446

)

 

Unrealized currency gains

 

 

(1,711

)

 

 

 

 

(1,023

)

 

Interest and other expense, net(b)

 

 

(1,751

)

 

 

 

 

(1,469

)

 

 

 

 

 

 

 

 

 

Income tax related adjustments

 

 

(546

)

 

 

 

 

(2,910

)

 

Provision for income taxes

 

 

(546

)

 

 

 

 

(2,910

)

 

 

 

 

 

 

 

 

 

Net income

 

$

2,304

 

 

 

 

$

4,418

 

 

 

 

 

 

 

 

 

 

(a) Operating expenses include amortization of acquired intangibles, selling, general and administrative expenses.

 

 

 

 

(b) Interest and other expense, net includes interest and other financing expenses, net, unrealized currency gains, gain on sale of assets and other expense, net.

 

 

 

 

 

 

 

 

 


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Adjusted Net Sales Growth

(unaudited and in thousands)

 

 

 

 

 

 

Q1 FY23

North America

 

International

 

Hain Consolidated

Net sales

$

288,396

 

 

$

150,955

 

 

$

439,351

 

Acquisitions, divestitures and discontinued brands

 

(16,006)

 

 

 

-

 

 

 

(16,006)

 

Impact of foreign currency exchange

 

1,068

 

 

 

25,786

 

 

 

26,854

 

Net sales on a constant currency basis adjusted for acquisitions, divestitures and discontinued brands

$

273,458

 

 

$

176,741

 

 

$

450,199

 

 

 

 

 

 

 

Q1 FY22

 

 

 

 

 

Net sales

$

265,525

 

 

$

189,378

 

 

$

454,903

 

Divestitures and discontinued brands

 

(949)

 

 

 

-

 

 

 

(949)

 

Net sales adjusted for divestitures and discontinued brands

$

264,576

 

 

$

189,378

 

 

$

453,954

 

 

 

 

 

 

 

Net sales growth (decline)

 

8.6%

 

 

 

(20.3)%

 

 

 

(3.4)%

 

Impact of acquisitions, divestitures and discontinued brands

 

(5.6)%

 

 

 

-

 

 

 

(3.3)%

 

Impact of foreign currency exchange

 

0.4%

 

 

 

13.6%

 

 

 

5.9%

 

Net sales growth (decline) on a constant currency basis adjusted for acquisitions, divestitures and discontinued brands

 

3.4%

 

 

 

(6.7)%

 

 

 

(0.8)%

 

 

 

 

 

 

 


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Adjusted EBITDA

(unaudited and in thousands)

 

 

 

 

 

First Quarter

 

 

2023

 

 

 

2022

 

 

 

 

 

Net income

$

6,923

 

 

$

19,411

 

 

 

 

 

Depreciation and amortization

 

11,970

 

 

 

10,855

 

Equity in net loss of equity-method investees

 

382

 

 

 

526

 

Interest expense, net

 

7,279

 

 

 

1,146

 

Provision for income taxes

 

2,631

 

 

 

4,542

 

Stock-based compensation, net

 

3,994

 

 

 

4,287

 

Unrealized currency gains

 

(1,711

)

 

 

(1,023

)

Litigation and related costs

 

 

 

Litigation expenses

 

2,463

 

 

 

1,956

 

Proceeds from insurance claim

 

-

 

 

 

(196

)

Restructuring activities

 

 

 

Plant closure related costs, net

 

(2

)

 

 

996

 

Productivity and transformation costs

 

773

 

 

 

3,204

 

Warehouse/manufacturing consolidation and other costs

 

-

 

 

 

2,289

 

Acquisitions, divestitures and other

 

 

 

Transaction and integration costs, net

 

1,367

 

 

 

(231

)

Gain on sale of assets

 

(40

)

 

 

(446

)

Adjusted EBITDA

$

36,029

 

 

$

47,316

 

 

 

 

 


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

(unaudited and in thousands)

 

 

 

 

 

 

 

 

Q1 FY23

North America

International

 

Corporate/ Other

 

Hain Consolidated

Operating income (loss)

$

24,445

 

 

$

7,675

 

 

$

(16,297

)

 

$

15,823

 

Depreciation and amortization

 

4,892

 

 

 

6,595

 

 

 

483

 

 

 

11,970

 

Stock-based compensation, net

 

1,083

 

 

 

391

 

 

 

2,520

 

 

 

3,994

 

Transaction and integration costs, net

 

-

 

 

 

(15

)

 

 

1,382

 

 

 

1,367

 

Litigation expenses

 

-

 

 

 

-

 

 

 

2,463

 

 

 

2,463

 

Plant closure related costs, net

 

(5

)

 

 

3

 

 

 

-

 

 

 

(2

)

Productivity and transformation costs

 

341

 

 

 

338

 

 

 

94

 

 

 

773

 

Other

 

25

 

 

 

(40

)

 

 

(344

)

 

 

(359

)

Adjusted EBITDA

$

30,781

 

 

$

14,947

 

 

$

(9,699

)

 

$

36,029

 

 

 

 

 

 

 

 

 

Q1 FY22

 

 

 

 

 

 

 

Operating income (loss)

$

16,842

 

 

$

24,069

 

 

$

(15,364

)

 

$

25,547

 

Depreciation and amortization

 

3,742

 

 

 

6,410

 

 

 

703

 

 

 

10,855

 

Stock-based compensation, net

 

636

 

 

 

721

 

 

 

2,930

 

 

 

4,287

 

Transaction and integration costs, net

 

(341

)

 

 

-

 

 

 

110

 

 

 

(231

)

Litigation expenses

 

-

 

 

 

-

 

 

 

1,956

 

 

 

1,956

 

Proceeds from insurance claim

 

-

 

 

 

-

 

 

 

(196

)

 

 

(196

)

Plant closure related costs

 

996

 

 

 

-

 

 

 

-

 

 

 

996

 

Productivity and transformation costs

 

1,625

 

 

 

299

 

 

 

1,280

 

 

 

3,204

 

Warehouse/manufacturing consolidation and other costs

 

1,413

 

 

 

876

 

 

 

-

 

 

 

2,289

 

Other

 

(811

)

 

 

59

 

 

 

(639

)

 

 

(1,391

)

Adjusted EBITDA

$

24,102

 

 

$

32,434

 

 

$

(9,220

)

 

$

47,316

 

 

 

 

 

 

 

 

 


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

 

Adjusted EBITDA at Constant Currency by Segment

 

(unaudited and in thousands)

 

 

 

 

 

 

 

 

 

 

Q1 FY23

North America

 

International

 

Corporate/
Other

 

Hain
Consolidated

 

Adjusted EBITDA

$

30,781

 

 

$

14,947

 

 

$

(9,699)

 

 

$

36,029

 

 

Impact of foreign currency exchange

 

81

 

 

 

2,538

 

 

 

-

 

 

 

2,619

 

 

Adjusted EBITDA on a constant currency basis

$

30,862

 

 

$

17,485

 

 

$

(9,699)

 

 

$

38,648

 

 

 

 

 

 

 

 

 

 

 

Net sales on a constant currency basis

$

289,464

 

 

$

176,741

 

 

 

 

$

466,205

 

 

Adjusted EBITDA margin on a constant currency basis

 

10.7%

 

 

 

9.9%

 

 

 

 

 

8.3%

 

 

 

 

 

 

 

 

 

 

 

Q1 FY22

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

24,102

 

 

$

32,434

 

 

$

(9,220)

 

 

$

47,316

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA growth (decline) on a constant currency basis

 

28.0%

 

 

 

(46.1)%

 

 

 

(5.2)%

 

 

 

(18.3)%

 

 

 

 

 

 

 

 

 

 

 


THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

Operating Free Cash Flows

(unaudited and in thousands)

 

 

 

 

 

First Quarter

 

 

2023

 

 

 

2022

 

 

 

 

 

Net cash (used in) provided by operating activities

$

(5,116

)

 

$

37,586

 

Purchases of property, plant and equipment

 

(7,215

)

 

 

(17,810

)

Operating free cash flows

$

(12,331

)

 

$

19,776