Hain Celestial sees small income rise in 2Q 2005

- Last updated on GMT

Related tags: Net income, Stock

Natural goods company Hain Celestial has reported record sales for
the second quarter 2005, but high costs and charges mean net income
has risen only slightly.

Net income for the period was $10.7 million or $0.29 per share, 2.9 percent up on last year's 2Q net income of $10.4 million. $0.02 per share was deduced from the share price due to previously announced compensation charges relating to terminated personnel and consultation costs on Sarbanes-Oxley compliance.

Sales soared 19 percent, from $192.8 million in 2Q 2004 to $169.8 million this year. These were driven, in particular, by the Celestial Seasonings tea, Terra Chips, Earth's Best baby food and Imagine soup brands, as well as brands sold in Canada and Europe.

The high sales bear out president and CEO Irwin Simon's assertion that product price increases have been accepted by customers.

The latest results mitigate a trend that has established itself in the last two quarters where, in both instances, sales were up but income was down.

"Our operations group did a great job at managing costs, [but] we continue to be impacted by the higher cost of fuel, freight and some commodity pricing,"​ said Simon.

Some strategic benefits have been made by the integration of the frozen business with ethnic gourmet and Rosetto and personal care with Jason for two full quarters, and these are expected to continue through the rest of fiscal 2005.

Other initiatives to improve efficiency include continuing collaboration with HJ Heinz, which currently owns 16.7 percent of Hain's outstanding shares of common stock, to develop growth opportunities in the natural and organic food sector and leverage infrastructure and supply chain capabilities.

In the short term the company is looking to office administration and procurement to cut costs and, in the longer term, will be making improvements in logistics and IT in the second half of 2005 and in 2006.

Related topics: Suppliers

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