Hain Celestial(US:HAIN)2021-08-26 17:03Financial Data and Key Metrics Changes - Consolidated net sales decreased 12% year-over-year to $451 million, within guidance range of negative 11% to negative 14% [37] - Adjusted EBITDA increased 10% year-over-year to $68 million, with an adjusted EBITDA margin of 15%, representing a significant improvement of about 300 basis points year-over-year [42] - Adjusted EPS of $0.39 increased by 22% compared to $0.32 in the prior year period [43] Business Line Data and Key Metrics Changes - International business net sales decreased 7% year-over-year but were up 13% compared to Q4 2019, driven by growth in meat-free and non-dairy beverage categories [44][45] - North American net sales decreased 15% year-over-year to $253.3 million, but adjusted EBITDA was still up 16% compared to pre-pandemic Q4 2019 [48][52] - Get Bigger brands represented 71% of North American net sales, showing a 9% decrease in Q4 versus the prior year, but a 6% increase compared to Q4 2019 [52] Market Data and Key Metrics Changes - Adjusted gross margin improved by 49 basis points year-over-year, driven by supply chain productivity initiatives [39] - International adjusted EBITDA margin increased by more than 530 basis points to 19%, exceeding long-term targets [47] - North American adjusted gross margin decreased by 313 basis points year-over-year but was still up compared to Q4 2019 [51] Company Strategy and Development Direction - The company expects low single-digit adjusted net sales growth for fiscal year 2022, with mid to high single-digit adjusted EBITDA growth [61] - The fiscal year 2022 plan is built on assumptions of stable inflation, successful innovation, and minimal short-term impact from COVID variants [26][28] - The company is focusing on productivity initiatives and pricing strategies to offset inflation and drive margin expansion [26][30] Management Comments on Operating Environment and Future Outlook - Management acknowledged challenges from high inflation, labor shortages, and COVID overlaps but expressed optimism about navigating these issues [10][17] - The company anticipates a softer first half of fiscal year 2022, with stronger performance expected in the second half [29][30] - Management highlighted strong underlying business health, with acceleration in consumption and successful innovation [99] Other Important Information - Operating cash flow for Q4 was $50 million, with full-year operating cash flow increasing by 25% year-over-year [55] - The company repurchased $27.2 million of shares during the quarter, with an additional $82 million remaining under the repurchase authorization [59] - The balance sheet remains strong, with cash on hand at $76 million and net debt at $155 million [57] Q&A Session Summary Question: Cost inflation and productivity in fiscal '22 - Management expects higher inflation in fiscal '22 compared to Q4, but robust pricing and productivity initiatives are anticipated to drive margin expansion [73] Question: Supply chain capacity constraints - The main challenge is on the pickup side for distribution, with transportation costs being inflationary [84] Question: Year-over-year EBITDA decline in Q1 - The decline is primarily due to lapping 70% EBITDA growth from the previous year, with lower revenue impacting gross profit dollars [98] Question: Innovation and distribution gains - Innovation has significantly increased, with TDPs up 7% versus a year ago, and management expects continued distribution gains [111] Question: SKU rationalization status - SKU rationalization is largely behind, with minimal ongoing rationalization, focusing on refining the portfolio as new innovations are introduced [117]