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The Hain Celestial Group Announces Fourth Quarter and Fiscal Year 2009 Results
Operating Free Cash Flow Improves to $28.1 Million for the Fourth Quarter

MELVILLE, N.Y., Aug. 25 /PRNewswire-FirstCall/ -- The Hain Celestial Group, Inc. (Nasdaq: HAIN), a leading natural and organic products company providing consumers with A Healthy Way of Life(TM), today reported results for the fourth quarter and fiscal year ended June 30, 2009. The Company reported earnings per share on a GAAP basis of $0.03 per share including an $0.08 per share loss from Hain Pure Protein ("HPP") for the fourth quarter. The Company reported adjusted earnings(1) of $0.28 per share for the fourth quarter on the strength of solid results in its Hain Celestial US operations. The $0.28 per share includes a $0.04 per share adjusted loss absorbed from the Company's investment in its HPP joint venture. For the fiscal year, the Company reported a loss per share on a GAAP basis of ($0.61) and adjusted earnings of $1.24 per share with adjustments principally from the previously recorded third quarter impairment charges of $1.20 per share.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050324/NYTH131)

The Company generated $28.1 million of operating free cash flow(2) in the fourth quarter of fiscal 2009, an improvement of $33.2 million compared to the prior year quarter. This enabled the Company to reduce its outstanding debt by $30.2 million in the quarter. For the full year, the Company reduced debt by $47.2 million.

"Our business demonstrated solid performance with growth from our United States and Canada operations in a tough economy. We saw growth in key categories including tea, infant and toddler care, dry grocery, non-dairy beverages, nut butters and frozen. At the same time, we are positioned for a turnaround in Europe. We are consolidating our Daily Bread(TM) production into our Luton facility, and we have gained new customers at our Fakenham facility where we've seen growth in both Linda McCartney(R) branded and private label sales," said Irwin D. Simon, President and Chief Executive Officer of Hain Celestial.

The Company's net sales for the fourth quarter totaled $262.7 million versus the prior year's fourth quarter sales of $278.3 million. For the full year, the Company's sales reached a record $1.135 billion, a 7.5% increase over the prior year's $1.056 billion in sales. Foreign exchange rates negatively impacted sales by $10.7 million in the fourth quarter and by $35.6 million for the year. Sales for the full year were also impacted by distributor, retailer and consumer de-stocking, and in the UK by the loss of a co-pack contract and the recently commenced phasing-out of the supply of fresh sandwiches to a major retail customer.

In fiscal 2009, the Company restarted consumption growth in tea as it increased its focus on selling core SKUs. The Company implemented a Stock Keeping Unit ("SKU") program at Celestial Seasonings(R), which was modeled after the successful SKU rationalizations in grocery, snacks and personal care. The Company also concluded the consolidation of its personal care operations and distribution centers. These actions collectively resulted in fourth quarter pre-tax charges of $7.8 million, or $0.12 per share, which includes $7.1 million charged to cost of sales for inventory and related items and $0.7 million charged to general and administrative expenses for severance and other costs.

GAAP gross margins were 19.4% in the fourth quarter this year as compared to 24.3% in the prior year quarter. GAAP gross margins in the current year quarter were impacted principally by charges from the SKU Rationalization and HPP. Adjusted gross margins for the fourth quarter were 24.4%, and further improved to 28.9%, a 156 basis point improvement over the prior year quarter, after removing HPP sales of $35.5 million and cost of sales of $36.9 million. The improved result was achieved through the maturing of price increases and a continuing focus on cost containment and productivity initiatives while the inflationary effects of input costs have begun to abate.

On a GAAP basis, selling, general and administrative expenses as a percentage of sales was 20.7% in this year's quarter compared to 20.1% in the prior year quarter. The Company's adjusted selling, general and administrative expenses were $1.2 million lower in the fourth quarter this year as compared to last year. For the full year, selling, general and administrative expenses on a GAAP basis were 18.9% this year versus 19.6% last year and 17.5% this year versus 18.5% of sales on an adjusted basis in the prior year. Adjusted selling, general and administrative expenses increased as a percentage of sales to 19.0% in this year's quarter compared to 18.4%. Both GAAP and adjusted selling, general and administrative expenses increased due to the effect of fixed expenses on lower sales.

The Company's balance sheet remains strong, with $212.6 million in working capital and a current ratio of 2.6 at June 30, 2009. Debt as a percentage of equity was 36.8%, with equity at $701.3 million.

The Company's adjusted effective tax rate for the full year was 33.8% versus 34.6% in the prior year. The Company's adjusted effective tax rate through the nine months ended March 31, 2009 was 36.5%. The decrease compared to the Company's estimated tax rate resulted from lower than anticipated estimated state taxes, due principally to the mix in income among the various states, and lower than anticipated foreign taxes. There was no impact from the change in tax rate on fourth quarter GAAP earnings, while fourth quarter adjusted earnings benefitted by $0.01 per share.

"Our investments in the operational performance of our business units position us well to offer innovative new products with healthful attributes and invest in the long-term for our core brands, rolling out innovative new products to the grocery and mass market channels to meet consumers' needs," said Irwin Simon. One of these innovations is a collaborative effort to create Martha Stewart Clean, a new line of natural cleaning products developed with Martha Stewart to be introduced later in fiscal 2010. We are very excited about the prospects for these products."

"The Company improved many key financial metrics with an emphasis on gross margin, generating cash and debt reduction, strengthening our balance sheet during the fourth quarter. Despite the recessionary environment, our focused execution on cost containment, productivity, cash flow and margin enhancement allowed us to build upon the foundation of our long-term strategy of sustainable growth. We are well-positioned to gain momentum with our sales and earnings in fiscal year 2010, and we are committed to creating and promoting A Healthy Way of Life(TM) for the benefit of our shareholders, customers, consumers and employees," concluded Irwin Simon.

Fiscal Year 2010 Guidance

The Company announced its fiscal year 2010 guidance of $1.010 to $1.030 billion in sales and $1.19 to $1.28 of earnings per share. Sales are expected to increase from 4% to 6% from the Company's fiscal year 2009 sales base less sales of HPP and items discontinued in the SKU rationalization.

Webcast and Upcoming Events

Hain Celestial will host a conference call and webcast at 4:30 PM Eastern Daylight Time today to review its fourth quarter and fiscal year 2009 results. During the month of September, the Company is scheduled to present at several investor conferences including: Goldman Sachs Sixteenth Annual Global Retailing Conference on September 9, 2009; Barclays Capital Back-to-School Consumer Conference on September 10, 2009; RBC Capital Markets Consumer Conference on September 17, 2009 and Canaccord Adams Healthy Living Naturally Boston Conference on September 23, 2009. These events will be webcast and available under the Investor Relations section of the Company's website at www.hain-celestial.com.

(1) See Reconciliation of GAAP Results to Non-GAAP Presentation Tables.

(2) See Non-GAAP Financial Measures.

The Hain Celestial Group

The Hain Celestial Group (NASDAQ: HAIN), headquartered in Melville, NY, is a leading natural and organic products company in North America and Europe. Hain Celestial participates in almost all natural categories with well-known brands that include Celestial Seasonings(R), Terra(R), Garden of Eatin'(R), Health Valley(R), WestSoy(R), Earth's Best(R), Arrowhead Mills(R), MaraNatha(R), SunSpire(R), DeBoles(R), Hain Pure Foods(R), Hollywood(R), Spectrum Naturals(R), Spectrum Essentials(R), Walnut Acres Organic(R), Imagine(R), Rice Dream(R), Soy Dream(R), Rosetto(R), Ethnic Gourmet(R), Yves Veggie Cuisine(R), Granose(R), Realeat(R), Linda McCartney(R), Daily Bread(TM), Lima(R), Grains Noirs(R), Natumi(R), JASON(R), Zia(R) Natural Skincare, Avalon Organics(R), Alba Botanica(R), Queen Helene(R), Tushies(R) and TenderCare(R). Hain Celestial has been providing "A Healthy Way of Life(TM)" since 1993. For more information, visit www.hain-celestial.com.

Safe Harbor Statement

This press release contains forward-looking statements within and constitutes a "Safe Harbor" statement under Rule 3b-6 of the Securities Exchange Act of 1934, as amended. Words such as "expect," "expected", "anticipate," "estimate," "believe," "may," "potential," "can," "position", "positioned," "should," and similar expressions, or the negative of those expressions, may identify forward-looking statements. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve known and unknown risks and uncertainties, which could cause our actual results to differ materially from those described in the forward-looking statements. These risks include but are not limited to our ability to achieve our guidance for sales and earnings per share in fiscal year 2010 given the recession in the U.S. and other markets that we sell products as well as economic and business conditions generally and their effect on our customers and consumers' product preferences, and our business, financial condition and results of operations; changes in estimates or judgments related to our impairment analysis of goodwill and other intangible assets; our ability to implement our business and acquisition strategy, including our strategy for improving results in Europe; our ability to realize sustainable growth generally and from investments in core brands, offering new products and our focus on containment, productivity, cash flow and margin enhancement in particular, our ability to effectively integrate our acquisitions; competition; the success and cost of introducing new products as well as our ability to increase prices on existing products, availability and retention of key personnel; our reliance on third party distributors, manufacturers and suppliers; our ability to maintain existing contracts and secure and integrate new customers; our ability to respond to changes and trends in customer and consumer demand, preferences and consumption; international sales and operations; changes in fuel and commodity costs; the continuing adverse effects on our results of operations from the impacts of foreign exchange; the resolution of the SEC inquiry and litigation regarding our stock option practices; changes in, or the failure to comply with, government regulations; and other risks detailed from time-to-time in the Company's reports filed with the SEC, including the annual report on Form 10-K for the fiscal year ended June 30, 2008. As a result of the foregoing and other factors, no assurance can be given as to future results, levels of activity and achievements and neither the Company nor any person assumes responsibility for the accuracy and completeness of these statements.

Non-GAAP Financial Measures

Management believes that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the Company's operations and are useful for period-over-period comparisons of operations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should only be read in connection with the Company's condensed consolidated statements of earnings presented in accordance with GAAP.

The Company defines Operating Free Cash Flow as cash provided from operating activities less capital expenditures. In the fourth quarter of fiscal year 2009, cash provided from operating activities was $31.1 million and capital expenditures were $3.0 million for a total of $28.1 million. In the fourth quarter of fiscal year 2008, cash provided from operating activities was $3.4 million and capital expenditures were $8.5 million for a total usage of ($5.1) million.

Under the Investor Relations section of the Company's website at www.hain-celesital.com, the Company will post unaudited pro forma non-GAAP information about the Company's investment in its HPP joint venture and stock compensation expense for each of the annual and quarterly periods in fiscal 2009 and 2008 to allow comparisons to the guidance provided for fiscal year 2010.

                          THE HAIN CELESTIAL GROUP, INC.
                           Consolidated Balance Sheets
                                  (In thousands)

                                                      June 30,     June 30,
                                                    -----------   ----------
                                                        2009         2008
                                                        ----         ----
                                                     (Unaudited)
    ASSETS
    Current assets:
      Cash and cash equivalents                        $41,408     $58,513
      Trade receivables, net                           114,506     118,867
      Inventories                                      158,590     175,667
      Deferred income taxes                             13,028      12,512
      Other current assets                              21,599      27,482
                                                       -------     -------
        Total current assets                           349,131     393,041

    Property, plant and equipment, net                 102,135     159,089
    Goodwill, net                                      456,459     550,238
    Trademarks and other intangible assets, net        149,196     136,861
    Other assets                                        66,575      20,155
                                                       -------     -------
        Total assets                                $1,123,496  $1,259,384
                                                    ==========  ==========

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable and accrued expenses           $134,618    $145,186
      Income taxes payable                               1,877         907
      Current portion of long-term debt                     44         222
                                                       -------     -------
        Total current liabilities                      136,539     146,315

    Deferred income taxes                               24,615      26,524
    Other noncurrent liabilities                         2,647       5,012
    Long-term debt, less current portion               258,372     308,220
                                                       -------     -------
        Total liabilities                              422,173     486,071

    Minority Interest                                        -      30,502

    Stockholders' equity:
      Common stock                                         417         411
      Additional paid-in capital                       503,161     488,650
      Retained earnings                                212,285     237,008
      Treasury stock                                   (16,309)    (15,473)
      Accumulated other comprehensive income             1,769      32,215
                                                       -------     -------
        Total stockholders' equity                     701,323     742,811
                                                       -------     -------
        Total liabilities and stockholders' equity  $1,123,496  $1,259,384
                                                    ==========  ==========


                        THE HAIN CELESTIAL GROUP, INC.
                     Consolidated Statements of Operations
                   (in thousands, except per share amounts)

                                  Three Months            Twelve Months
                                  Ended June 30,          Ended June 30,
                                -----------------      -------------------
                                 2009      2008         2009         2008
                                 ----      ----         ----         ----
                                   (Unaudited)      (Unaudited)

    Net sales                 $262,705  $278,261    $1,135,306  $1,056,371
    Cost of sales              211,622   210,669       876,344     772,062
                               -------   -------       -------     -------
    Gross profit                51,083    67,592       258,962     284,309

    SG&A expenses               54,372    55,834       215,008     207,553
    Impairment of goodwill
     and intangibles                63         -        52,630           -
                                ------    ------        ------     -------

    Operating income (loss)     (3,352)   11,758        (8,676)     76,756

    Interest expense  and
     other expenses             (3,083)    2,512         7,842      11,311
                                ------     -----         -----      ------
    Income (loss) before
     income taxes                 (269)    9,246       (16,518)     65,445
    Income tax provision        (1,534)    2,742         8,205      24,224
                                ------     -----         -----      ------
    Net income (loss)           $1,265    $6,504      $(24,723)    $41,221
                                ======    ======      ========     =======

    Basic per share amounts      $0.03     $0.16        $(0.61)      $1.03
                                 =====     =====        ======       =====

    Diluted per share amounts    $0.03     $0.16        $(0.61)      $0.99
                                 =====     =====        ======       =====

    Weighted average common
     shares outstanding:
      Basic                     40,686    40,133        40,483      40,077
                                ======    ======        ======      ======
      Diluted                   41,011    41,550        40,483      41,765
                                ======    ======        ======      ======


                        THE HAIN CELESTIAL GROUP, INC.
            Consolidated Statements of Operations With Adjustments
           Reconciliation of GAAP Results to Non-GAAP Presentation
                   (in thousands, except per share amounts)

                                         Three Months Ended June 30,
                                         ---------------------------
                                     2009     Adjust-    2009      2008
                                     GAAP      ments   Adjusted  Adjusted
                                     -----    -------  --------  --------
                                                (Unaudited)

    Net sales                      $262,705            $262,705  $278,261
    Cost of Sales                   211,622  $(13,107)  198,515   207,195
                                    -------  --------   -------   -------
    Gross profit                     51,083    13,107    64,190    71,066

    SG&A expenses                    54,372    (4,528)   49,844    51,072
    Impairment of goodwill and
     intangibles                         63       (63)        -         -
                                     ------     -----     -----    ------

    Operating income (loss)          (3,352)   17,698    14,346    19,994

    Interest and other
     expenses, net                   (3,083)    2,872      (211)    2,512
                                     ------     -----      ----     -----
    Income (loss) before
     income taxes                      (269)   14,826    14,557    17,482

    Income tax provision             (1,534)    4,771     3,237     3,482
                                     ------     -----     -----     -----
    Net income (loss)                $1,265   $10,055   $11,320   $14,000
                                     ======   =======   =======   =======

    Basic net income (loss)
     per share                        $0.03     $0.25     $0.28     $0.35
                                      =====     =====     =====     =====

    Diluted net income
     (loss) per share                 $0.03     $0.25     $0.28     $0.34
                                      =====     =====     =====     =====

    Weighted average common shares
     outstanding:
      Basic                          40,686              40,686    40,133
                                     ======              ======    ======
      Diluted                        41,011              41,011    41,550
                                     ======              ======    ======


                                          FY 2009           FY 2008
                                          -------           -------
                                    Impact              Impact
                                      on      Impact      on     Impact
                                    Income      on      Income     on
                                    before    Income    before   Income
                                    income      tax     income     tax
                                     taxes   provision   taxes  provision
                                    -------  ---------  ------- ---------
                                                 (Unaudited)
    Start-up and integration
     costs related to the
     Company's Kosher Valley
     poultry operations             $3,901    $1,297

    Start-up costs at the
     Fakenham manufacturing
     facility related to the
     integration of the
     Haldane Foods frozen meat-
     free operations and, in
     2009, unabsorbed overhead
     resulting from expiration
     of a co-pack agreement with
     the prior owner                 1,506       422    $2,537     $230

    SKU rationalization,
     severance and other
     reorganization costs            7,064     2,558       937      285

    Other items                        636       128
                                     -----     -----     -----      ---
                   Cost of sales    13,107     4,405     3,474      515
                                    ------     -----     -----      ---

    Professional fees and other
     expenses incurred in
     connection with the review
     of the Company's stock
     option practices, net of
     insurance recovery                                  1,079      462

    Stock compensation Expense       2,756    1,002      2,273     (667)

    Severance and other
     reorganization costs              707      209      1,410      430

    Other items                      1,065      232
                                     -----      ---      -----      ---
                   SG&A expenses     4,528    1,443      4,762      225
                                     -----    -----      -----      ---

    Impairment of goodwill and
     intangibles                        63      (10)         -        -
                                        --      ---      -----      ---

    Other (income) expenses,
     net                            (2,872)  (1,067)

                                    ------   ------      -----      ---
              Interest and other
               expenses, net        (2,872)  (1,067)         -        -
                                    ------   ------      -----      ---

               Total adjustments   $14,826   $4,771     $8,236     $740
                                   =======   ======     ======     ====


                          THE HAIN CELESTIAL GROUP, INC.
              Consolidated Statements of Operations With Adjustments
              Reconciliation of GAAP Results to Non-GAAP Presentation
                     (in thousands, except per share amounts)

                                               Year Ended June 30,
                                               -------------------
                                       2009     Adjust-     2009       2008
                                       GAAP      ments    Adjusted   Adjusted
                                       -----    -------   --------   --------
                                                   (Unaudited)

    Net sales                     $1,135,306            $1,135,306 $1,056,371
    Cost of Sales                    876,344  $(25,411)    850,933    757,623
                                     -------  --------     -------    -------
    Gross profit                     258,962    25,411     284,373    298,748

    SG&A expenses                    215,008   (16,177)    198,831    195,782
    Impairment of goodwill and
     intangibles                      52,630   (52,630)          -          -
                                      ------   -------     -------    -------

    Operating income (loss)           (8,676)   94,218      85,542    102,966

    Interest and other expenses,
     net                               7,842     2,038       9,880     13,313
                                       -----     -----       -----     ------
    Income (loss) before income
     taxes                           (16,518)   92,180      75,662     89,653

    Income tax provision               8,205    17,342      25,547     30,994
                                       -----    ------      ------     ------
    Net income (loss)               $(24,723)  $74,838     $50,115    $58,659
                                    ========   =======     =======    =======

    Basic net income (loss) per
     share                            $(0.61)    $1.85       $1.24      $1.46
                                      ======     =====       =====      =====

    Diluted net income (loss)
     per share                        $(0.61)    $1.85       $1.24      $1.40
                                      ======     =====       =====      =====

    Weighted average common shares
     outstanding:
      Basic                           40,483                40,483     40,077
                                      ======                ======     ======
      Diluted                         40,483                40,483     41,765
                                      ======                ======     ======


                                            FY 2009            FY 2008
                                            -------            -------
                                      Impact              Impact
                                        on      Impact      on      Impact
                                      Income      on      Income      on
                                      before    Income    before    Income
                                      income      tax     income      tax
                                       taxes   provision   taxes   provision
                                      -------  ---------  -------  ---------
                                                    (Unaudited)
    Start-up and integration costs
     related to the Company's
     Kosher Valley poultry
     operations                       $6,201    $2,180

    Start-up costs at the
     Fakenham manufacturing
     facility related to the
     integration of the Haldane
     Foods frozen meat-free
     operations and, in 2009,
     unabsorbed overhead resulting
     from expiration of a co-pack
     agreement with the prior owner    8,153     2,284    $7,490    $2,097

    SKU rationalization,
     severance and other
     reorganization costs              8,763     3,160     6,949     2,558

    Impact of co-pack pricing
     agreement related to
     acquisition of turkey
     processing facility                 721       277

    Other items                        1,573       486
                                       -----       ---    ------     -----
                      Cost of sales   25,411     8,387    14,439     4,655
                                      ------     -----    ------     -----

    Professional fees and other
     expenses incurred in
     connection with the review of
     the Company's stock option
     practices, net of insurance
     recovery                          1,416       530     5,774     2,229

    Stock compensation expense         7,211     2,668     2,129      (722)

    Legal settlement                   1,350       505

    Severance and other
     reorganization costs              4,145     1,477     3,868     1,392

    Other items                        2,055       602
                                       -----       ---    ------     -----
                      SG&A expenses   16,177     5,782    11,771     2,899
                                      ------     -----    ------     -----

    Impairment of goodwill and
     intangibles                      52,630     4,143         -         -
                                      ------     -----    ------     -----

    Other (income) expenses, net      (2,038)     (970)

    Gain on the sale of the
     Company's investment in a
     rice cake manufacturing
     joint venture in Belgium
     recorded in the first
     quarter of FY 2008                                   (2,002)     (784)
                                      ------      ----    ------      ----
                 Interest and other
                  expenses, net       (2,038)     (970)   (2,002)     (784)
                                      ------      ----    ------      ----

                  Total adjustments  $92,180   $17,342   $24,208    $6,770
                                     =======   =======   =======    ======


SOURCE The Hain Celestial Group, Inc.

Ira Lamel or Mary Anthes, both of The Hain Celestial Group, Inc., +1-631-730-2200; David Lilly or Paige Gruman, both of Kekst and Company, +1-212-521-4800