The Hain Celestial Group reported financial results for the fourth quarter and fiscal year ended June 30, 2018.
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The results are presented with the Hain Pure Protein operating segment being treated as a discontinued operation given the Company's previously announced decision to divest the business, which is expected to be completed during the first half of fiscal year 2019.
Net sales increased 3% to $619.6 million compared to the prior year period, or a 1% decrease on a constant currency basis, primarily reflecting low double digit net sales increases from the United Kingdom and Rest of World reporting segments, which includes the Canada and Europe operating segments, partially offset by a mid-single digit net sales decrease from the United States reporting segment.
When adjusted for Foreign Exchange and Acquisitions, Divestitures and certain other items, including the 2017 and 2018 Project Terra Stock Keeping Unit (SKU) rationalization, net sales would have increased 3% compared to the prior year period.
Gross margin of 20.2%, a 370 basis point decrease over the prior year period; adjusted gross margin of 21.1%, a 290 basis point decrease over the prior year period as a result of higher trade and promotional investments in the United States and increased freight and commodity costs.
Operating income of $16.6 million, an increase of $9.4 million over the prior year period; adjusted operating income of $44.5 million, a $21.3 million decrease over the prior year period.
Net loss of $4.6 million, a $3.1 million increase in net loss over the prior year period; adjusted net income of $27.7 million, a $14.8 million decrease over the prior year period.
EBITDA of $45.8 million, a 41% decrease over the prior year period; Adjusted EBITDA of $61.4 million, a 25% decrease over the prior year period.
Earnings per diluted share (EPS) loss of $0.04 compared to an EPS loss of $0.01 in the prior year period; Adjusted EPS of $0.27 compared to $0.41 in the prior year period.
Summary of fiscal year 2018 results from continuing operations
Net sales increased 5% to $2.458 billion compared to the prior year, or 2% on a constant currency basis, primarily reflecting low to mid double-digit net sales increases from the United Kingdom and Rest of World reporting segments, which includes the Canada and Europe operating segments, partially offset by a low single digit net sales decrease from the United States reporting segment.
When adjusted for Foreign Exchange and Acquisitions, Divestitures and certain other items including the 2017 and 2018 Project Terra SKU rationalization3, net sales would have increased 2% compared to the prior year.
Gross margin of 21.0%, a 120 basis point decrease over the prior year; adjusted gross margin of 22.1%, a 40 basis point decrease over the prior year as a result of higher trade and promotional investments in Hain Celestial United States, increased freight and commodity costs and unfavorable mix, partially offset by Project Terra cost savings.
Operating income of $106.0 million, a $3.4 million decrease over the prior year; adjusted operating income of $186.1 million, a $14.5 million decrease over the prior year.
Net income of $82.4 million, a $16.9 million increase over the prior year; adjusted net income of $121.3 million, a $3.8 million decrease over the prior year.
EBITDA of $197.2 million, a 14% decrease over the prior year; Adjusted
BITDA of $255.9 million, a 3% decrease over the prior year.
EPS of $0.79 compared to $0.63 in the prior year; Adjusted EPS of $1.16 compared to $1.20 in the prior year.
Cash flow provided by operating activities from continuing operations of $121.3 million; operating free cash flow of $50.4 million. ■