Hain Celestial Group Inc. Reports Operating Results (10-K)
The Hain Celestial Group, Inc. has a market cap of $3.12 billion; its shares were traded at around $68.52 with a P/E ratio of 38.3 and P/S ratio of 2.3. The Hain Celestial Group, Inc. had an annual average earning growth of 4.5% over the past 10 years.
Highlight of Business Operations:Gross profit in fiscal 2012 was $382.5 million, an increase of $62.6 million, or 19.6%, from last year s gross profit of $319.8 million. Gross profit in fiscal 2012 was 27.8% of net sales compared to 28.9% of net sales for fiscal 2011. The change in gross profit percentage resulted from the mix of product sales, including the margin impact related to the inclusion of Daniels which operates at slightly lower relative margins. In addition, we experienced generally higher input costs, offset partially by productivity and price increases.
The provision for income taxes includes federal, foreign, state and local income taxes. Our income tax expense was $41.2 million in fiscal 2012 compared to $37.8 million in fiscal 2011. Our effective income tax rate from continuing operations was 30.7% of pre-tax income in fiscal 2012 compared to 38.2% in fiscal 2011. The effective tax rate in fiscal 2012 was lower than the prior year primarily as a result of reduced losses incurred in the United Kingdom and the acquisition of Daniels on October 25, 2011 and the increased income in its lower tax rate jurisdiction. The Company's tax rate in fiscal 2012 was also favorably impacted by the reduction of the carrying value of our liability for contingent consideration that was recorded in the fourth quarter, which did not have a corresponding tax impact, which was partially offset by an unfavorable impact of $1.2 million related to nondeductible transaction costs incurred in connection with the acquisition of Daniels. Prior to the acquisition of Daniels, no tax benefits were recognized for losses incurred in the United Kingdom. The Company will continue to maintain a valuation allowance on its net deferred tax assets related to those carryforward losses until an appropriate level of profitability is attained such that the losses may be utilized. If the Company is able to realize any of these deferred tax assets in the future, the provision for income taxes will be reduced by a release of the corresponding valuation allowance. In addition, in fiscal 2012 and fiscal 2011, the Company recorded adjustments to recognize decreases of $0.8 million and $1.0 million, respectively, in its liability for uncertain tax positions as the result of expirations of statute of limitations.
Our loss from discontinued operations for the fiscal year ended June 30, 2012 was $15.0 million compared to a loss of $4.0 million for the fiscal year ended June 30, 2011. Net sales reported within discontinued operations was $73.7 million and $21.7 million during fiscal 2012 and fiscal 2011, respectively. The operating loss included within discontinued operations was $16.8 million and $4.4 million for the respective periods. The operating loss for fiscal 2012 includes non-cash impairment and other non-recurring charges totaling $14.9 million related to the write-down of certain long-lived assets based on their current estimated fair value.
Gross profit in fiscal 2011 was $319.8 million, an increase of $71.1 million, or 28.6%, from last year s gross profit of $248.8 million. Gross profit in fiscal 2011 was 28.9% of net sales compared to 28.0% of net sales for fiscal 2010.
Our share in the net earnings from our investments in HPP and HHO for fiscal year ended June 30, 2011 was a loss of $2.1 million compared to a loss of $1.7 million for the fiscal year ended June 30, 2010. HPP s results for fiscal 2011 included approximately $7.9 million of net loss (of which $3.9 million is included in the Company s portion of HPP s earnings) related to the impairment of long lived assets previously used in HPP s divested Kosher Valley operation. HPP s results for fiscal 2010 included approximately $4.6 million of net loss related to its Kosher Valley brand. HPP s profitable antibiotic-free chicken and turkey results were more than offset by the losses incurred in the start-up of the Kosher Valley brand. In the fourth quarter of fiscal 2010, HPP divested its Kosher Valley brand in a transaction with Empire Kosher Poultry, Inc. (“Empire”), wherein the Kosher Valley brand and customer relationships were exchanged for an equity interest in Empire.
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