Hain Celestial(US:HAIN)2026-02-09 12:10Financial Performance - Net sales for the three months ended December 31, 2025 were $384.1 million, a decrease of $27.4 million, or 6.7%, compared to the prior year quarter [175]. - Gross profit for the same period was $74.4 million, a decrease of $19.0 million, or 20.3%, with a gross profit margin of 19.4% compared to 22.7% in the prior year [177]. - Operating loss for the three months ended December 31, 2025 was $98.8 million, compared to $91.9 million in the prior year quarter [185]. - Net loss for the three months ended December 31, 2025 was $116.0 million, or $1.28 per diluted share, compared to a net loss of $104.0 million, or $1.15 per diluted share in the prior year quarter [193]. - Adjusted EBITDA for the three months ended December 31, 2025 was $24.3 million, a decrease of $13.6 million, or 35.9%, from $37.9 million in the prior year quarter [194]. - Net sales for the six months ended December 31, 2025 were $752.0 million, a decrease of $54.1 million, or 6.7%, including an unfavorable impact of $23.2 million related to held for sale businesses [207]. - Adjusted EBITDA for the six months ended December 31, 2025 was $44.0 million, a decrease of $16.3 million, or 27.0%, from $60.3 million in the prior year period [205]. - Net loss for the six months ended December 31, 2025 was $136.6 million, or $1.51 per diluted share, compared to $123.6 million, or $1.37 per diluted share, in the prior year period [224]. Expenses and Charges - The Company recognized non-cash goodwill impairment charges of $119.9 million during the three months ended December 31, 2025, compared to $91.3 million in the prior year [180]. - Selling, general and administrative expenses decreased by $9.3 million, or 13.2%, to $60.9 million for the three months ended December 31, 2025 [179]. - The Company incurred pretax charges of $3.8 million and $17.3 million for the three and six months ended December 31, 2025, respectively, related to the Restructuring Program [172]. - Goodwill impairment charges for the six months ended December 31, 2025 totaled $119.9 million, compared to $91.3 million in the prior year period [211]. - Selling, general and administrative expenses for the six months ended December 31, 2025 were $126.4 million, a decrease of $15.1 million, or 10.7%, from $141.5 million in the prior year period [210]. Sales Performance - Organic net sales decreased by $26.2 million, or 6.7%, from the prior year quarter, driven by a 9.0% decrease in volume/mix [176]. - North America net sales for the three months ended December 31, 2025 were $197.8 million, a decrease of $31.5 million, or 13.7%, compared to the prior year quarter [197]. - International net sales for the three months ended December 31, 2025 were $186.3 million, an increase of $4.1 million, or 2.3%, including a favorable impact of $8.9 million from foreign exchange [201]. - North America net sales for the six months ended December 31, 2025 were $401.7 million, a decrease of $58.7 million, or 12.7%, compared to the prior year period [227]. - International net sales for the six months ended December 31, 2025 were $350.3 million, an increase of $4.6 million, or 1.3%, compared to the prior year period [230]. Debt and Liquidity - As of December 31, 2025, the company had $705.8 million of debt obligations maturing on December 22, 2026 [235]. - The company announced a strategic review to evaluate options to improve liquidity and reduce leverage, including the sale of its North American Snacks Business for $115 million [236]. - There is substantial doubt about the company's ability to continue as a going concern for at least one year following the issuance of these financial statements due to uncertainty regarding debt repayment [238]. - As of September 30, 2025, the Company's consolidated secured leverage ratio was 4.81:1.00, and the consolidated interest coverage ratio was 2.92:1.00, in compliance with all associated covenants [242]. - The maximum consolidated secured leverage ratio was amended to 5.00:1.00 for the quarter ending June 30, 2025, and 5.50:1.00 for the quarter ending September 30, 2025 [246]. Cash Flow - Cash and cash equivalents increased by $13.6 million to $68.0 million as of December 31, 2025, compared to $54.4 million at June 30, 2025 [249]. - Cash provided by operating activities was $28.5 million for the six months ended December 31, 2025, an increase of $8.4 million from the prior year [251]. - Free cash flow was $16.3 million for the six months ended December 31, 2025, an increase of $8.3 million from $8.0 million in the prior year [255]. - Cash used in investing activities was $10.4 million for the six months ended December 31, 2025, a change of $14.6 million from cash provided by investing activities in the prior year [252]. Impairment and Asset Valuation - The U.S. reporting unit's carrying amount exceeded its estimated fair value of $459,000, resulting in a non-cash impairment charge of $38,495, reducing goodwill to $273,826 [269]. - The U.K. reporting unit's carrying amount exceeded its estimated fair value of $270,525, leading to a non-cash impairment charge of $81,413, reducing goodwill to $32,331 [269]. - The impairment charge for the Hartley's® jelly indefinite-lived tradename was $11,917, recorded within intangibles and long-lived asset impairment [276]. - The Ella's Kitchen® baby and kids foods indefinite-lived tradename's estimated fair value exceeded its carrying amount by 12.8%, with a carrying value of $35,801 as of December 31, 2025 [275]. - The company performed a qualitative assessment of indefinite-lived intangible assets and determined that further quantitative testing was necessary for specific tradenames [274]. Share Repurchase and Stock Information - The Company did not repurchase any shares under the share repurchase program during the six months ended December 31, 2025, leaving $173.5 million of remaining authorization [256]. - The weighted average interest rate on outstanding borrowings was 8.26% at December 31, 2025, and 7.71% when including the impact of hedges [248]. Seasonal Impact - The company noted that certain product lines experience seasonal fluctuations, impacting quarterly results and cash flows [279].