Hain Celestial(US:HAIN)2025-02-10 21:05Financial Performance - Net sales for the three months ended December 31, 2024, were $411.5 million, a decrease of $42.6 million, or 9.4%, compared to the prior year quarter[141] - Gross profit for the same period was $93.5 million, a decrease of $8.8 million, or 8.6%, with a gross profit margin of 22.7%, slightly up from 22.5% in the prior year[142] - Operating loss for the three months ended December 31, 2024, was $91.9 million, compared to a loss of $0.8 million in the prior year quarter[150] - Net loss for the three months ended December 31, 2024 was $104.0 million, or $1.15 per diluted share, compared to a net loss of $13.5 million, or $0.15 per diluted share in the prior year quarter[157] - Adjusted EBITDA for the three months ended December 31, 2024 was $37.9 million, a decrease of $9.2 million, or 19.6%, from $47.1 million in the prior year quarter[158] - Consolidated net sales for the six months ended December 31, 2024 were $806.1 million, a decrease of $73.0 million, or 8.3%, compared to $879.1 million in the prior year period[168] - Net loss for the six months ended December 31, 2024 was $123.6 million, or $1.37 per diluted share, compared to a net loss of $23.9 million, or $0.27 per diluted share in the prior year period[183] - Adjusted EBITDA decreased to $60.3 million for the six months ended December 31, 2024, down from $71.2 million in the prior year, representing a decline of 15.4%[184] Sales Performance - Organic net sales decreased by $29.4 million, or 6.8%, primarily due to a decline in the North America reportable segment[141] - North America net sales for the three months ended December 31, 2024 were $229.3 million, a decrease of $38.4 million, or 14.3%[160] - International net sales for the three months ended December 31, 2024 were $182.2 million, a decrease of $4.2 million, or 2.3%[163] - Organic net sales for the six months ended December 31, 2024 decreased by $50.0 million, or 6.0%[168] - North America net sales were $460.4 million, a decrease of $67.3 million, or 12.8%, primarily due to lower sales in snacks and personal care categories[187] - International net sales were $345.7 million, a decrease of $5.8 million, or 1.6%, with organic net sales down 3.7% to $337.6 million[190] Expenses and Cost Management - Selling, general and administrative expenses decreased by $3.8 million, or 5.1%, to $70.2 million, primarily due to lower employee-related expenses[144] - Selling, general and administrative expenses for the six months ended December 31, 2024 were $141.5 million, a decrease of $9.6 million, or 6.5%[171] - Interest and other financing expenses decreased by $3.3 million, or 20.7%, to $12.8 million, attributed to a lower outstanding debt balance and reduced borrowing rates[151] - The company incurred approximately $7.3 million in expenses associated with the Hain Reimagined Program for the three months ended December 31, 2024[138] - Cash used in financing activities was $17.1 million for the six months ended December 31, 2024, a decrease of $7.0 million compared to $24.1 million in the prior year[205] Impairment Charges - The company recorded a non-cash goodwill impairment charge of $91.3 million during the three months ended December 31, 2024, due to a decline in market capitalization[145] - Goodwill impairment charge of $91.3 million was recorded during the six months ended December 31, 2024[172] - The company recognized significant intangible asset impairment charges during the three months ended December 31, 2024, leading to an interim quantitative impairment test for goodwill[220] - As of December 31, 2024, the U.S. reporting unit's carrying amount exceeded its estimated fair value of $800,000, resulting in a non-cash impairment charge of $91,267, reducing goodwill from $633,774 to $542,507[221] Tax and Cash Flow - The effective income tax rate for the three months ended December 31, 2024, was an expense of 2.7%, compared to a benefit of 25.2% in the prior year[155] - The effective income tax rate for the six months ended December 31, 2024 was an expense of 5.4%, compared to a benefit of 30.0% in the prior year[181] - Cash provided by operating activities was $20.1 million, a decrease of $14.6 million from $34.7 million in the prior year period[203] - Free cash flow for the six months ended December 31, 2024, was $8.0 million, a decrease of $14.0 million from $22.0 million in the same period of 2023[207] Future Outlook and Risks - Annualized pretax savings from the Hain Reimagined Program are expected to be between $130 million and $150 million[138] - Future cash flow estimates are subjective, and actual results may differ materially from the Company's estimates, potentially leading to additional impairment charges[221] - The Company has not identified any material changes in market risk factors since the last annual report[227] Seasonal Trends - Certain product lines experience seasonal fluctuations, with stronger sales of hot tea and desserts in colder months, while snack foods and personal care products perform better in warmer months[226] - Historical data shows that net sales and diluted earnings per share in the first fiscal quarter are typically the lowest of the four quarters[226]