LAKE SUCCESS, N.Y. — The Hain Celestial Group, Inc. is close to naming its future leader. About two months after founder Irwin D. Simon announced his intent to step down as president and chief executive officer, he told securities analysts on Aug. 28 that he and the board of directors were in the final stages of choosing his successor.
"I am confident now is the right time for a next generation of leadership, and I firmly believe that some of our greatest opportunities definitely lie ahead," Mr. Simon said during an earnings call.
His replacement's top priority will be returning growth to the U.S. business, which the company is in the process of "proactively reshaping," said Gary W. Tickle, c.e.o. of North America. As part of the previously announced Project Terra cost-savings and productivity program, the company continues to pare its product portfolio to focus on and invest in its core 11 brands and top 500 stock-keeping units in the United States.
"In 2018, we achieved incremental progress in certain areas of our business from our planned growth investments," Mr. Tickle said. "Although in total, results for the fourth quarter were below our expectations, we've seen positive momentum building in our outlook on core distribution from our most recent round of customer line reviews. We already have confirmed 49,000 net new points of distribution for seven of our top brands across a broad range of retailers and channels. These transformation efforts take time to show tangible results, but these initiatives are translating into improvements in our measured channel numbers."
For the fiscal year ended June 30, Hain Celestial net income was $9,694,000, equal to 9c per share on the common stock, down sharply from $67,430,000, or 65c, in the prior fiscal year. Net income from continuing operations, which excludes the soon-to-be-divested Hain Pure Protein business, was $82,428,000, up from $65,541,000 the year before. Excluding expenses related to acquisitions, restructuring, integration and other charges, adjusted EBITDA for the year was $255,941,000, down from $264,956,000.
Net sales for the fiscal year were $2,457,769,000, up 5% from $2,343,505,000, reflecting strength in the company's United Kingdom and Rest of World segments, offsetting declines in the U.S. business.
For the fourth quarter, Hain Celestial posted a net loss of $69,941,000, which compared with net income of $313,000 in the year-ago quarter. Net loss from continuing operations was $4,556,000, which compared with a net loss from continuing operations of $1,504,000 in the prior-year period. Adjusted EBIDTA was $61,381,000, down from $81,620,000.
Net sales totaled $619,598,000, up 3% from $602,891,000.
A strategic review of its portfolio of businesses led to the decision earlier in the year to sell Hain Pure Protein, an organic fresh poultry business.
"We expect to complete the sale process during the first half of 2019," Mr. Simon said. "We plan to use the proceeds from the future divestiture of Hain Pure Protein to pay down debt, buy back stock or continue to invest in our business like we're doing."
During the full year, Hain Celestial U.S. operating profit declined 41% to $86,319,000, driven by higher trade and marketing investments, increased freight and commodity costs and unfavorable mix. Net sales decreased 2.1% over the prior year to $1,084,871,000. Excluding the impact of acquisitions, divestitures and s.k.u. rationalization, adjusted net sales decreased 2%.
In the fourth quarter, Hain Celestial U.S. operating income plummeted 56% to $18,623,000. Sales eased 5.5% over the prior year to $269,857,000. Adjusted net sales were flat from the prior-year period.
Despite executives' upbeat outlook, shares of Hain Celestial on Nasdaq tumbled more than 6% on Aug. 28 to close at $26.77. A year ago, shares traded as high as $42.99.