First Quarter Revenue Grows 10% on a Comparable Basis
Earnings From Operations of $0.18 Per Share Before Previously Announced Items
MELVILLE, N.Y., Nov. 5 /PRNewswire-FirstCall/ -- The Hain Celestial Group (NASDAQ: HAIN) , the leading natural and organic food company, today announced that for the first quarter of fiscal 2003, ended September 30, 2002, revenues increased to $96.4 million, a 10 % increase on a comparable basis over the first quarter of 2002. Earnings for the quarter, adjusted for certain previously announced items was $0.18 per share on a diluted basis.
On a reported basis, first quarter 2003 sales of $96.4 million were 7.7% higher than the prior year's first quarter sales of $89.7 million. The adjustments to reflect the 10% growth on a comparable basis reduced prior year's sales for the discontinuance of the supplements and Weight Watchers' businesses. Reported net income was $4.7 million in the 2003 quarter, or $0.14 per share; however, as expected and discussed in the Company's previous quarter, reported net income in the current quarter was reduced by $1.7 million as a result of the continued unabsorbed costs from the Health Valley Irwindale manufacturing facility, coupled with the costs of aggressive promotional activities on the brand designed to reduce inventories of products expected to be discontinued. The continuing start-up costs incurred in the Company's European businesses further reduced operating income by approximately $.5 million. These previously announced items accounted for the reduction of our earnings per share by approximately $0.04. As a result, before these previously announced items, earnings were $0.18 per share. The transaction to transfer ownership of the Irwindale manufacturing assets to a co-packer has been completed, and after transitioning the operations of the facility throughout September, the co-packer has been in full operating control of the facility since September 30th.
Irwin D. Simon, Chairman, President and Chief Executive Officer of The Hain Celestial Group said, "I am encouraged by our progress this quarter. We continue to focus on our strategy of increasing our presence in the super mass channel while maintaining and improving our profitable growth. Both sales and earnings benefited from strong performance at Celestial Seasonings where sales of Green Tea and sales to the grocery channel showed strength and provided a favorable mix of sales and profits. Our sales of Terra slowed during the quarter but we continue to see good growth in our Earth's Best, Health Valley, Yves and Garden Of Eatin' brands. With implementation of the new NOP standards two weeks ago, we are excited about the opportunities in our categories and increasing consumer awareness."
"We are continuing to demonstrate tangible progress in implementing our strategy. On September 30th, we turned over our Health Valley Irwindale facility to our co-packer -- an important move that will have numerous cost benefits for the Company," said Mr. Simon.
In other developments, the Company's Terra Chips manufacturing facility in Moonachie, New Jersey recently completed and qualified its vacuum frying installation, which adds to the facility's atmospheric frying capability and brings the facility to its full capability. With the now operational vacuum frying line, the Moonachie facility will produce Yukon Gold(R), Terra Red Bliss(R) and Terra Frites(R) products.
In the quarter, Hain Celestial continued to strengthen its management team. Mark Krause has joined the Company as Vice President - Operations. Mr. Krause has 25 years of experience with some of the country's largest food manufacturers, including ConAgra, Hunt-Wesson, Nestle, and most recently Anchor Food Products. Also, Jay Lieberman has joined the Company as Vice President - Finance. Jay comes to us after 24 years at Clairol where he held various finance positions, most recently as Director of Finance for Latin America and Canada. Mr. Simon said, "I am delighted to welcome Mark Krause and Jay Lieberman to Hain Celestial. Mark is a proven operator in our industry, and we will benefit from his knowledge and experience. Jay brings to us a view of finance from an operational perspective which will greatly enhance our capabilities."
Gary Jacobs, Executive Vice President - Operations will leave the Company. Mr. Simon commented, "On behalf of everyone at Hain Celestial, I want to wish Gary Jacobs and his family well in his future endeavors. Gary has played a critical role in the development of our Company, both as CFO and EVP- Operations, and during his time with us he made lasting contributions to our success, of which he can be proud."
The Hain Celestial Group is proud to have been included in the recently published 2002 Forbes Best 200 Small Companies list, ranking 47th in sales growth.
About The Hain Celestial Group
The Hain Celestial Group, headquartered in Melville, NY, is a natural, specialty and snack food company. The Company is a leader in 13 of the top 15 natural food categories, with such well-known natural food brands as Celestial Seasonings (R) teas, Hain Pure Foods(R), Westbrae(R), Westsoy(R), Arrowhead Mills(R), Health Valley(R), Breadshop's(R), Casbah(R), Garden of Eatin(R), Terra Chips(R), Yves Veggie Cuisine(R), The Good Dog (R), The Good Slice(R), DeBoles(R), Earth's Best(R), Nile Spice, and Lima & Biomarche(R) in Europe. The Company's principal specialty product lines include Hollywood(R) cooking oils, Estee(R) sugar-free products, Kineret(R) kosher foods, Boston Better Snacks(R), and Alba Foods(R). The Hain Celestial Group's website can be found at http://www.hain-celestial.com/.
Statements made in this Press Release that are estimates of past or future performance are based on a number of factors, some of which are outside of the Company's control. Statements made in this Press Release that state the intentions, beliefs, expectations or predictions of The Hain Celestial Group and its management for the future are forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in forward- looking statements is contained from time to time in filings of The Hain Celestial Group with the U.S. Securities and Exchange Commission. Copies of these filings may be obtained by contacting The Hain Celestial Group or the SEC.
Hain Celestial management will host a conference call to discuss its third quarter results at 4:30 p.m. ET on Tuesday, November 5, 2002. The call may be accessed on the Internet at http://www.vcall.com/ (enter ticker symbol: HAIN) and will be archived there through midnight on December 5, 2002.