Hain Celestial Announces Record Second Quarter Fiscal Year 2014 Results
5 Feb 2014 --- The Hain Celestial Group, Inc., a leading organic and natural products company providing consumers with A Healthier Way of Life, has reported record results for its second quarter ended December 31, 2013.
"We are pleased with our record second quarter results, the highest in the Company's history and our twelfth consecutive quarter of year-over-year double digit sales and adjusted earnings growth. We delivered strong sales driven by expanded distribution and brand contribution as well as robust operating margin expansion as we leveraged our selling, general and administrative expenses with a higher sales base. Our gross margin was impacted in the quarter by higher commodity costs, product mix and a shift in trade spending to point of sale activities, which are reported against net sales," said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. "With a good start to our third quarter, we expect to deliver a strong second half in sales and profitability as consumption trends reflect consumers seeking out our organic and natural products. We will continue to focus on driving profitable sales and sustained earnings growth over the next several years by expanding distribution of our brands, including our newly acquired Tilda brand, across geographies and sales channels to capitalize on the tremendous white space opportunities in various retail channels."
The Company reported record net sales of $535 million in the second quarter, an 18% increase, compared to net sales of $455 million in the second quarter of fiscal year 2013. Hain Celestial US reported record second quarter net sales of $328 million, a 17% increase. In the United Kingdom, Hain Daniels net sales were $146 million, a 22% increase, and the Rest of World segment reported net sales of $61 million, a 12% increase. The Company had strong brand contribution across various sales channels led by double-digit growth of nineteen brands and mid to high single digit growth of five brands, including Spectrum, MaraNatha, The Greek Gods, Garden of Eatin', Arrowhead Mills, Celestial Seasonings, Jason, Alba Botanica, Linda McCartney, Cully & Sully, Danival and Europe's Best. The growth in net sales also resulted from sales of Hartley's, Robertson's, Sun-Pat, Frank Cooper's, Gale's and BluePrint brands, acquired during the second quarter of fiscal year 2013, and Ella's Kitchen brand, acquired in the fourth quarter of fiscal year 2013.
The Company earned net income of $41 million compared to $32 million in the prior year second quarter, a 30% increase, and reported earnings per diluted share of $0.84, which includes $0.03 earnings per diluted share from discontinued operations, compared to $0.67, a 25% increase compared to last year. Adjusted net income was $43 million compared to $35 million in the prior year second quarter, a 23% increase, and adjusted earnings per diluted share was $0.87 compared to $0.74, an 18% increase compared to last year. Adjusted amounts exclude those items detailed in Fiscal Year 2014 Guidance.
"We are excited to expand our worldwide better-for-you product portfolio into premium Basmati rice and specialty rice products with the strategic acquisition of Tilda Limited ("Tilda"), which we completed in mid-January. After working with the Tilda team for just a few weeks, we look forward to their future contributions and are pleased with the performance of the Tilda brand," commented Irwin Simon. "We plan to expand the growth of the Tilda brand by increasing sales of its Basmati and ready-to-heat rice product offerings through our existing extensive distribution platform in the United States, Canada and Europe. In addition, we will look to expand the distribution of our global brands including Earth's Best, Ella's Kitchen, Celestial Seasonings, Terra, Rice Dream and Almond Dream, into Tilda's existing, fast-growing markets in the Middle East, North Africa and India."
The Company updated its annual net sales and earnings guidance for fiscal year 2014 for the Tilda acquisition completed on January 13, 2014:
• Total net sales range of $2.115 billion to $2.145 billion for fiscal year 2014; an increase of approximately 22% to 24% as compared to fiscal year 2013.
• Earnings range of $3.07 to $3.15 per diluted share for fiscal year 2014; an increase of 21% to 25% as compared to fiscal year 2013.
Guidance is provided for continuing operations on a non-GAAP basis and excludes acquisition-related fees and expenses and contingent consideration, integration and restructuring charges, factory start-up and co-pack contract termination costs, certain litigation expenses, unrealized currency gains and losses and disposal of an investment held for sale that have been or may be incurred during the Company's fiscal year 2014, which the Company will continue to identify as it reports its future financial results. Guidance excludes the impact of any future acquisitions.
