No Need to Restate Earnings Says Hain Celestial
23 Jun 2017 --- Following a long investigation, Hain Celestial has completed its accounting review and audit and did not need to make any material changes to any of its previously reported financial statements - and it is up to date with all its reporting obligations with the Securities and Exchange Commission (SEC).
The organic and natural products company has completed an internal accounting review and audit for its fiscal year ended June 30, 2016, concluding that its previously-issued consolidated financial statements are “fairly stated in all material respects in accordance with generally accepted accounting principles in the US.”
The company is now filing its Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the “Form 10-K”), which includes immaterial revisions to its results for fiscal years 2016, 2015 and 2014, as well as its Quarterly Reports on Form 10-Q for the first three quarters of its fiscal year 2017.
Upon the filing of these outstanding reports, the company will be current with all of its reporting obligations with the SEC.
“The accounting review is complete, and we are pleased to report our financial results, which reflect no material changes to any prior reported periods. We have also implemented greater and more effective internal controls and enhanced oversight for our financial reporting and business units,” says Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial.
“The changes we are announcing strengthen Hain Celestial globally on a go-forward basis. We appreciate the efforts of our employees and the support of our customers, lenders and stockholders throughout this process.”
“We have made significant progress to build upon our strategic plan, Project Terra, identifying substantial cost-savings, enhancing customer-centric, go-to market initiatives and fueling innovation to improve our performance. Our team is energized and focused on the continued execution of our strategic initiatives as we position our business for long-term growth, success and enhanced shareholder value.”
Financial Highlights
For the first nine months of fiscal year 2017, Hain Celestial reported net sales of US$2.1 billion, relatively flat on a year-over-year basis, or a 4% increase on a constant currency basis. Net sales were impacted by US$96.2 million from foreign exchange rate movements versus the prior year period.
Hain Celestial US net sales of US$882.3 million, a decrease of 6% on a year-over-year basis reflecting the impact of inventory realignment at certain customers and product rationalization of US$55 million.
Hain Celestial UK net sales of US$573.5 million, a 3% increase, or an 18% increase on a constant currency basis, compared to the prior year period.
Hain Pure Protein net sales of US$387.4 million, a 2% increase over the prior year period.
Hain Celestial Canada net sales of US$111.2 million, an 8% increase, while there were Europe net sales of US$127.8 million, a 15% increase.
Net income of US$67.1 million; adjusted net income of $82.7 million.
EBITDA of $157.2 million compared to US$278.5 million in the prior year period; adjusted EBITDA of $189.8 million compared to US$287.8 million in the prior year period.
Operating income of US$102.2 million, or 4.8% of net sales; adjusted operating income of $134.8 million, or 6.3% of net sales.
Earnings per diluted share of US$0.64; adjusted earnings per diluted share of US$0.79. Foreign currencies impacted reported earnings results by US$0.09 per diluted share.
Operating cash flow of US$148.0 million.
The Company continues to execute on its strategic plan, which expands upon Project Terra announced in 2016, to drive long-term growth and profitability. These initiatives to drive net sales growth and margin expansion include:
- Investing in top brands and capabilities to grow globally;
- Expanding Project Terra cost-savings programs, which are expected to deliver $350 million in total cost savings through fiscal 2020 including annual productivity;
- Building a global management team with deep sector and operating expertise–including key hires in marketing, sales, and operations–to drive innovation and distribution expansion;
- Pursuing a capital allocation strategy that includes a new US$250 million share repurchase authorization.
For the fourth quarter of fiscal 2017, the company's projected net sales reflects an estimate of approximately 1% year-over-year decline in U.S. dollars and approximately 4% year-over-year growth on a constant currency basis.
“We have continued to make significant progress across key areas of our business, and while our financial results were impacted by a challenging operating environment during the first three quarters of 2017, we believe that we have reached an inflection point in the fourth quarter, with the company well-positioned for long-term growth and profitability,” concludes Simon.
