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Hain Celestial Group Inc. Reports Operating Results (10-Q)

February 09, 2011 | About:
10qk

10qk

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Hain Celestial Group Inc. (HAIN) filed Quarterly Report for the period ended 2010-12-31.

Hain Celestial Group Inc. has a market cap of $1.22 billion; its shares were traded at around $29.73 with a P/E ratio of 25.9 and P/S ratio of 1.4. Hedge Fund Gurus that owns HAIN: Carl Icahn of Icahn Capital Management LP, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns HAIN: Mario Gabelli of GAMCO Investors, Chuck Royce of Royce& Associates, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Interest and other expenses, net were $3.5 million for the three months ended December 31, 2010 and December 31, 2009. Interest expense totaled $3.3 million in this years second quarter, which includes interest on the $150 million of 5.98% senior notes outstanding, interest related to borrowings under our revolving credit agreement and interest accretion on contingent consideration. Interest expense in last years second quarter was approximately $2.5 million. The increase in interest expense resulted from higher borrowings under our revolving credit facility used to fund our recent acquisitions, and the interest accretion on contingent consideration of $0.5 million. Also included in other expenses for the three months ended December 31, 2009 is a $1.2 million non-cash impairment charge for an other-than-temporary decline in the fair value of our investment in the shares of Yeo Hiap Seng Limited, a Singapore-based natural food and beverage company listed on the Singapore stock exchange.

Net sales for the six months ended December 31, 2010 were $549.8 million compared to $472.5 million for the six months ended December 31, 2009, an increase of $77.4 million, or 16.4%. Sales in North America increased $80.4 million, or 20.0%, from the year ago quarter. The increase in sales resulted from growth from many of our existing brands, including Celestial Seasonings teas and our Alba, Avalon and Jason personal care products, as improved consumption trends continued, as well as the acquisitions of The Greek Gods brand yogurt and Sensible Portions snacks. Sales in Europe decreased $3.1 million, or 4.4%, which included unfavorable changes in foreign exchange rates of approximately $4.9 million. Sales by our continent-based European operations increased by approximately 6.8% in local currency for the six months ended December 31, 2010 compared to the prior year period. Sales in the United Kingdom decreased by approximately 2.2% in local currency as increased sales of our Linda McCartney meat-free frozen foods and our frozen desserts were offset by decreased sales in our food-to-go operations as a result of the loss of sales from the phasing out of the supply of fresh sandwiches to Marks and Spencer, which accounted for $7.8 million of sales in last years first six months.

Interest and other expenses, net were $6.0 million for the six months ended December 31, 2010 compared to $6.6 million for the six months ended December 31, 2009. Interest expense totaled $6.7 million in this years first six months, which includes interest on the $150 million of 5.98% senior notes outstanding, interest related to borrowings under our revolving credit agreement and interest accretion on contingent consideration. Interest expense in last years first six months was approximately $5.2 million. The increase in interest expense resulted from higher borrowings under our revolving credit facility used to fund our recent acquisitions, and the interest accretion on contingent consideration of $0.9 million. Other expenses also includes approximately $1.3 million of exchange gains for the six months ended December 31, 2010 compared to $0.3 million of exchange losses in the prior year period. Also included in other expenses for the six months ended December 31, 2009 is a $1.2 million non-cash impairment charge for an other-than-temporary decline in the fair value of our investment in the shares of Yeo Hiap Seng Limited, a Singapore-based natural food and beverage company listed on the Singapore stock exchange.

Our cash balance was $26.3 million at December 31, 2010, an increase of $9.0 million from the end of fiscal 2010. Net cash provided by operating activities was $10.7 million for the six months ended December 31, 2010 compared to $10.8 million for the six months ended December 31, 2009. We had an increase in net income and non-cash items of approximately $7.9 million which was offset by an increase in the use of cash for changes in operating assets and liabilities of approximately $8.1 million as compared to the prior year period. The increase in cash used by changes in operating assets and liabilities resulted from increases in our inventories and accounts receivable, which is attributable primarily to our recent acquisitions.

In the six months ended December 31, 2010, we used $18.2 million of cash in investing activities. We used $16.3 million of cash in connection with our acquisition of the assets and business of 3 Greek Gods LLC and $4.8 million for capital expenditures. This was partially offset by proceeds from the sale of property, plant and equipment of $1.5 million. We also received a $3.1 million repayment of advances made to HPP and loaned $1.8 million of cash to Hutchison Hain Organic Holding Limited, our Hong Kong joint venture. We used $3.2 million of cash in investing activities in the six months ended December 31, 2009, which consisted primarily of $4.9 million for capital expenditures, partially offset by a $2.0 million repayment of advances received from HPP.

Net cash of $17.0 million was provided by financing activities for the six months ended December 31, 2010 compared to $22.6 million used in financing activities for the six months ended December 31, 2009. The change was due principally to $15.1 million of borrowings drawn under our Credit Agreement for the six months ended December 31, 2010, which was used to fund our acquisition of the assets of 3 Greek Gods, compared to $23.3 million of repayments made during the six months ended December 31, 2009. We also had an increase in the proceeds from exercises of stock options to $2.2 million in the six months ended December 31, 2010 from $0.8 million in the six months ended December 31, 2009.

Read the The complete Report

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