Hain Celestial has posted "record" full-year financial results on a significant day in the US company's recent history.
The company booked a 44% leap in annual net income for the year to the end of June. Operating profit increased 36.3%. Net sales from continuing operations were up 24.3%.
"We finished fiscal year 2012 with strong results across our key performance measures as consumption in the United States accelerated during the year to the highest levels in the company's history as consumers continued to seek out our products," Hain Celestial president and CEO Irwin Simon said today (22 August).
"With new product innovation, increased sales opportunities in various channels of distribution and global geographies, along with productivity initiatives, our year ended with solid results across all of our segments."
The numbers came as Hain Celestial announced a cash-and-shares deal to buy the spreads assets of UK food manufacturer Premier Foods plc.
Hain Celestial has been reshaping its business in the UK. Last year, it acquired Daniels Group, the owner of brands including New Covent Garden Soup Co.
It also announced today it had sold a UK own-label chilled ready meals asset to Greencore. The company also revealed an agreement to sell UK foodservice sandwich supplier Daily Bread.
Hain Celestial Announces Record Fourth Quarter and Record Fiscal Year 2012 Results
Highest Operating Income in 19-Year History
Operating Free Cash Flow More Than Doubles to $101.5 Million
Provides Fiscal Year 2013 Guidance
MELVILLE, N.Y., Aug. 22, 2012 /PRNewswire/ -- The Hain Celestial Group, Inc. (NASDAQ: HAIN), a leading natural and organic products company providing consumers with A Healthy Way of Life™, today reported its results for the fourth quarter and fiscal year ended June 30, 2012.
Performance Highlights
Fourth Quarter Fiscal Year 2012
Net sales from continuing operations up 22.3% over the same period in fiscal year 2011
GAAP net income up 82.1%; adjusted net income up 31.8%
GAAP gross profit and adjusted gross profit up 14.7%
GAAP operating margin up 425 basis points; adjusted operating margin up 36 basis points
Diluted GAAP EPS of $0.50; adjusted EPS of $0.47
Operating free cash flow was $36.8 million, increasing 152.3% over the same period in fiscal year 2011
Fiscal Year 2012
Net sales from continuing operations up 24.3% over the same period in fiscal year 2011
GAAP net income up 44.1%; adjusted net income up 34.7%
GAAP gross profit up 19.6%; adjusted gross profit up 19.5%
GAAP operating margin up 96 basis points; adjusted operating margin up 46 basis points
Diluted GAAP EPS of $1.73; adjusted EPS of $1.86
Operating fee cash flow reached $101.5 million, increasing 115.3% over fiscal year 2011
Fourth Quarter 2012
The Company reported global net sales of $350.8 million from continuing operations, a 22.3% increase compared to net sales of $286.9 million in the fourth quarter of fiscal year 2011. The Company's fourth quarter net sales do not include $23.0 million of net sales in 2012 and $5.2 million in 2011 from the private label chilled ready meals and Daily Bread™ sandwich businesses, which are both classified as discontinued operations. The Company's growth came from continued sales momentum in the natural and organic sector across various classes of trade including natural, grocery, mass-market retailers, club stores and e-tailers along with contributions from strategic acquisitions. Strong brand contribution came from Earth's Best®, Spectrum®, MaraNatha®, The Greek Gods®, Imagine®, Garden of Eatin'®, Arrowhead Mills®, Health Valley®, Linda McCartney®, Avalon Organics® as well as from the recently acquired Europe's Best®, New Covent Garden Soup Co.®, Johnson's Juice Co.®, Farmhouse Fare®, Lovetub®, Sunripe® and Cully & Sully® brands.
For the fourth quarter, the Company earned $23.4 million in net income as compared to $12.8 million, a 82.1% increase from the prior year and reported diluted earnings per share of $0.50 compared to $0.28 in the prior year. Adjusted earnings per diluted share was $0.47 on adjusted net income of $21.7 million in the 2012 fourth quarter as compared to $0.36 per diluted share on adjusted net income of $16.5 million over the prior year fourth quarter. Adjusted net income and diluted earnings per share improved 31.8% and 30.6%, respectively, over the prior year fourth quarter. Adjusted net income excludes acquisition-related items and restructuring charges and results of discontinued operations.
"We finished fiscal year 2012 with strong results across our key performance measures as consumption in the United States accelerated during the year to the highest levels in the Company's history as consumers continued to seek out our products. With new product innovation, increased sales opportunities in various channels of distribution and global geographies, along with productivity initiatives, our year ended with solid results across all of our segments," said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial.
Fiscal Year 2012
The Company reported global net sales of $1,378.2 billion from continuing operations, a 24.3% increase compared to net sales of $1,108.5 billion in fiscal year 2011. The Company's 2012 fiscal year net sales does not include $73.7 million of net sales from private label chilled ready meals and Daily Bread sandwich operations, which are both classified as discontinued operations. The Company's growth came from continued sales momentum in the natural and organic sector across various classes of trade along with contributions from strategic acquisitions. Strong brand contribution came from Earth's Best®, Celestial Seasonings®, Spectrum®, MaraNatha®, The Greek Gods®, Imagine®, Garden of Eatin'®, Arrowhead Mills®, Health Valley®, DeBoles®, Sensible Portions®, Linda McCartney®, Avalon Organics® and Queen Helene® as well as from the recently acquired Danival®, GGUniqueFiber®, Europe's Best®, New Covent Garden Soup Co.®, Johnson's Juice Co.®, Farmhouse Fare®, Lovetub®, Sunripe® and Cully & Sully® brands.
For the fiscal year, the Company earned $79.2 million in net income as compared to $55.0 million, a 44.1% increase from the prior year, and reported diluted earnings per share of $1.73 compared to $1.23 in the prior year. Adjusted earnings per diluted share was $1.86 on adjusted net income of $85.5 million in the 2012 fiscal year as compared to $1.43 per diluted share on adjusted net income of $63.5 million. Adjusted net income and diluted earnings per share improved 34.7% and 30.1%, respectively, over the prior fiscal year. The Company's fiscal year adjusted net income excludes acquisition related items and restructuring charges.
Fiscal Year 2012 Highlights
The Company highlighted several of its accomplishments during fiscal year 2012.
Completed three strategic acquisitions:
The Daniels Group in the United Kingdom with its leading brands New Covent Garden Soup Co.®, Johnson's Juice Co.®, Farmhouse Fare® desserts;
Cully & Sully® brand fresh chilled soups in Ireland;
Europe's Best® frozen fruits and vegetables brand in Canada.
Integrated existing United Kingdom operations into Daniels Group forming Hain Daniels Group.
Integrated Danival® and GG UniqueFiber® acquisitions in Europe.
Introduced over 80 innovative new products.
Delivered in excess of $25 million in productivity savings to overcome input inflation.
Cash conversion improved by 12 days to 68 days with inventories improving by 10 days.
Operating free cash flow for fiscal year 2012 was $101.5 million.
Repaid $75 million of Daniels Group acquisition debt in eight months.
Market capitalization expansion of nearly 70% to $2.5 billion at June 30, 2012.
Hain Daniels Group Initiatives
In a separate press release, the Company also announced (i) it has entered into an agreement to acquire certain packaged grocery brands of Premier Foods plc which upon completion will anchor a new Ambient Grocery Division; (ii) it has completed the sale of the private label chilled ready meals business which had been classified as a discontinued operation in the Company's third quarter; and (iii) it has entered into a letter of intent to sell the Daily Bread sandwich business, which has been classified as a discontinued operation effective in the fourth quarter. The Company expects that the purchase of the Premier Foods brands will close by the end of October 2012, and further estimates that sales during the eight-month period from closing to June 30, 2013 will approximate $180 million with accretion in earnings per diluted share during that period approximating $0.25 before acquisition related charges. These sales and accretion estimates, which are expected to be updated upon closing of the transaction, are not included in the Company's fiscal year 2013 guidance.
"I am pleased with the smart strategic acquisitions the Company has made. Our acquisitions of The Greek Gods® greek-style yogurt and Sensible Portions snacks have experienced double digit growth under Hain Celestial's ownership over the past two years. This year, we integrated GG UniqueFiber crackers from Norway into our United States distribution and Danival organic products from France into Hain Celestial Europe. Most recently, our acquisition of Daniels Group in the United Kingdom has provided us with a strong base for fresh chilled products including soup, which we look forward to launching in the United States marketplace in the near future, as well as a platform to launch Linda McCartney chilled ready meals and The Greek Gods greek-style yogurt in the United Kingdom," concluded Irwin Simon.
Fiscal Year 2013 Guidance
The Company provided the following guidance for its fiscal year 2013.
Total net sales range of $1.600 billion to $1.615 billion in sales, approximating 10% to 11% growth over its annualized fiscal year 2012 sales base.
Earnings of $2.10 to $2.20 per diluted share.
Guidance is provided for continuing operations on a non-GAAP basis and therefore excludes results of discontinued operations and acquisition and integration expenses that may be incurred during the Company's fiscal year 2013, which the Company will continue to identify when it reports its financial results. Guidance excludes the impact of the above discussed pending acquisition of the Premier Foods brands and any future acquisitions not now contemplated. Historically, the Company's sales and earnings are strongest in its second and third quarters.
