Fourth quarter tops off strong year at Hain Celestial

Natural and organic food company Hain Celestial announces the end of a solid year, reporting continued sales growth during the fourth quarter which helped the company register a net income for the year end of $27.5 million compared with just $3 million at the end of 2002.

Fourth quarter sales grew 23.4 per cent to $117.8 million, compared with net sales of $95.4 million in the prior year period. For the full year, net sales grew to $466.5 million, a 17.8 per cent increase over prior year sales of $396 million.

Costs rose meanwhile by 19.4 per cent in the quarter and by 10.8 per cent for the full year, although this should be remedied in the near future with the launch of Hain Celestial's planned new program to improve supply chain management, which it expects will reduce costs after three years by $30 million per year.

The company nevertheless reported net income of $6.8 million in the fourth quarter, compared with a net loss of $12.8 million in the prior year's comparable quarter. For the fiscal 2003 full year, it reported net income of $27.5 million, compared with $3 million in the prior year.

Commenting on the results, Irwin Simon, president and CEO, said: "Our performance this quarter capped an exciting year for our company. Following a challenging first half of the quarter as a result of economic conditions and the domestic impact of the war in Iraq, we recovered well in the second half of the quarter."​

Simon also noted that strong growth across many of Hain Celestial's businesses contributed to the good overall quarter of sales and profitable growth adding that the company was particularly pleased with its distribution gains in the quarter.

"This year we accomplished much and laid a solid foundation for further profitable growth in fiscal 2004,"​ he continued. "We improved our performance and we also dramatically improved our operating income and margins."​

These foundations include the completion of three important acquisitions for Hain Celestial: Imagine Foods and Walnut Acres in the United States, and Grains Noirs in Europe. Imagine was fully integrated within the fiscal year.

"This is Hain Celestial​'s tenth anniversary year. The growing public awareness of the benefits of healthy eating, and fighting the risks of obesity, present us with even more opportunities in the future. That is why we now must go further to meet the expanding market for our products."​ Simon added that in to accomplish these growth objectives, the company would need to be more competitive, efficient and innovative.

According to the company, plans for the next year include: realizing new distribution opportunities with our existing customers, other mass market, and non-traditional channels; introducing new products and flavors; expanding its international business; and continuing the integration of the company's acquired businesses and brands.

The reported fourth quarter results include a credit for restructuring, a valuation allowance of $1.5 million related to chargebacks receivable from customers and a $2.0 million reduction of reserves established last year in connection with similar items included in the charges the company recorded for supplements and other items. These offsetting items increased gross profit by $0.5 million.

Looking forward to 2004 Simon said the company was providing earnings guidance for the full year of $0.95 - $1.03 per share on expected revenues of $540 - $565 million.