MELVILLE, N.Y., Feb 03, 2005 /PRNewswire-FirstCall via COMTEX/ -- The Hain Celestial Group, Inc. (HAIN), a leading natural and organic food company, today announced results for the fiscal 2005 second quarter ended December 31, 2004. Hain Celestial reported that sales increased to a record $169.8 million, or an increase of 19%, from $142.8 million in the prior year quarter. The Company reported net income of $10.7 million or $0.29 per share, after deducting $0.02 per share for certain previously announced compensation charges principally for terminated personnel as well as consulting costs related to Sarbanes-Oxley compliance. Before these items, adjusted non-GAAP earnings were $0.31 per share versus $0.29 in the prior year period. Also negatively impacting earnings by $0.01 per share in the Fiscal 2005 second quarter was an increase of 1.1 million shares in the average diluted shares outstanding as compared to the prior year quarter.
Irwin D. Simon, President and Chief Executive Officer of The Hain Celestial Group said, "We are pleased with our strong sales throughout our business, and especially in the Celestial Seasonings, Terra Chips, Earth's Best and Imagine brands, Hain Celestial's brands in Canada, as well as in our European businesses. After operating our Frozen business with Ethnic Gourmet and Rosetto and our Personal Care business with Jason for two full quarters, we are seeing the benefits of the integration of these businesses and their contributions, which we expect to continue into the second half of 2005." Mr. Simon continued, "Our management team is focused on executing our strategy and building on our business fundamentals. As a result, our service levels and responsiveness to customers have improved tremendously versus a year ago. Although our price increase was accepted by our customers and our Operations Group did a great job in managing costs, we continue to be impacted by the higher cost of fuel, freight and some commodity pricing."
Hain Celestial's balance sheet remains strong as working capital totaled $130.9 million with a current ratio of 3 to 1 at the end of the second quarter. Debt as a percentage of equity was 18.6%, with total equity at $524 million. As announced last quarter, the Company implemented its Operating Free Cash Flow and Cash Conversion Cycle model for the first time this quarter and will continue to report progress in this area. Operating Free Cash Flow in the 2005 Second Quarter was $12.3 million versus ($9.6) million in the 2005 First Quarter. The Cash Conversion Cycle stood at 82 days for the Fiscal 2005 Second Quarter, an improvement of 12 days versus the Fiscal 2005 First Quarter.
Mr. Simon added, "We are also pleased to begin to see the results of several initiatives to improve efficiencies including: the increased collaborative efforts with H.J. Heinz, improvements in our Cash Conversion Cycle, as well as our cost-cutting program. We have earmarked projects with significant potential, and have targeted cost centers in office administration and procurement in the short-term. We also expect to achieve longer-term benefits and greater efficiencies from assessments of logistics in the areas of distribution and warehousing, and information technology, with improvements in these areas expected in the second half of Fiscal Year 2005 and Fiscal Year 2006."
The Company confirmed its full-year guidance of $0.92 to $1.0l earnings per share on revenues of $650 to $670 million.
New Management Appointments
The Company also announced the appointment of Steven N. List as President, Hain Celestial Canada in addition to his responsibilities as President, Celestial Seasonings. Mr. Simon said, "Steve has proven to be an outstanding leader at Celestial Seasonings, and we now look forward to him expanding the scope of his responsibilities. Steve's increased duties include responsibility for the Yves Veggie Cuisine(R) brand worldwide, in addition to all Hain Celestial products sold in Canada, including Celestial Seasonings(R), Terra Chips(R), Garden of Eatin'(R), Earth's Best(R), Rice Dream(R), Soy Dream(R) and Imagine(R)."
The Hain Celestial Group
The Hain Celestial Group (HAIN), headquartered in Melville, NY, is a leading natural and organic beverage, snack, specialty food and personal care products company in North America and Europe. Hain Celestial participates in almost all natural food categories with well-known brands that include Celestial Seasonings(R), Terra Chips(R), Garden of Eatin'(R), Health Valley(R), WestSoy(R), Earth's Best(R), Arrowhead Mills(R), Hain Pure Foods(R), Hollywood(R), Walnut Acres Certified Organic(R), Imagine Foods(R), Rice Dream(R), Soy Dream(R), Rosetto(R), Ethnic Gourmet(R), Kineret(R), Yves Veggie Cuisine(R), Lima(R), Biomarche(R), Grains Noirs(R), Natumi(R) and JASON(R). For more information, visit http://www.hain-celestial.com.
The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Act of 1995. Except for the historical information contained herein, the matters discussed in this press release are forward- looking statements that involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those described in the forward-looking statements. These risks include but are not limited to general economic and business conditions; the ability to implement business and acquisition strategies, integrate acquisitions, and obtain financing for general corporate purposes; competition, retention of key personnel and compliance with government regulations and other risks detailed from time-to- time in the Company's reports filed with the Securities and Exchange Commission, including the report on Form 10-K for the fiscal year ended June 30, 2004. The Company does not undertake any obligation to update forward- looking statements.