Hain Celestial Is Focused on Its Balance Sheet While Making Smart Strategic Acquisitions

The following video segment is part of a full interview in which The Motley Fool's Brendan Byrnes sits down with Irwin Simon, the founder and CEO of Hain Celestial (NASDAQ: HAIN  ) , to take a closer look at the better-for-you food revolution. In this segment, they discuss how the continual influx of new products, acquisitions, and marketing strategies could further the current success of this natural-foods company.

A transcript follows the video.

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Brendan Byrnes: Now, Hain Celestial has been recommended by our Stock Advisor service, along with Supernova, so we have a lot of investors, I think, that are invested in Hain Celestial. What are some things that they need to watch in 2013? Maybe some milestones or big events coming up?

Irwin Simon: So I think, coming back to 2013, No. 1 is just our growth and our distribution and our products. We introduced a lot of new products. We introduce worldwide over $80 million a year in new products. We have a big natural-foods show in Anaheim in March, when there are just a lot of new products in, so that's No. 1.

No. 2 is we've done some great acquisitions in the U.K. We're just overlapping a year today of owning [Daniels Group] and great growth on New Covent Garden soups, Johnson's Juice, Farmhouse Fare. At the end of October, we closed on the Premier Foods deal and are really getting a lot of new products, new distribution over there and getting some scale in the U.K.

Also in the U.K., I was there last week. We just launched Greek Gods Yogurt. In the U.K. we'll launch, the end of June, we'll launch a whole line of gluten-free products in the U.K. We're going to take over and really focus on our non-dairy business in the U.K. We're in the midst of opening up a new non-dairy facility outside Cologne, Germany, that will give us capacity within the U.K., so within the U.K. and throughout Europe. 

Our European business is really growing. Danival, which we bought last year, expanding that throughout Europe. Actually we're bringing Danival into the U.S. We're going to introduce Sensible Portions, which is our snack business in the U.K. and Europe, and really expand upon that. Our European group will expand upon our soup business, our New Convent Garden, and some of the Premier. So that's what we're looking forward to in the U.K. 

Byrnes: You sound like a busy man.

Simon: Europe, and the U.S., so let's just come back from the U.S. Expansion here continues with our Greek Gods yogurt growth. We're introducing our kefir product, which we're pretty excited about that. We've got a lot more new SKUs going into Wal-Mart on Greek Gods. Our pouch line on baby food, we just could not keep up with demand. We've put two new pouch lines within our Westchester facility, so just being able to supply the product. We're going to introduce New Covent Garden soups here in the U.S. come the first of January, and that's pretty exciting. 

Our personal-care line ... we have some great personal-care products, and we've gone through a whole ingredient cleanse there and really have upgraded the ingredients -- focus on our phthalates, parabens, and petroleum products and expanding the growth of that, so we really are excited about growing that, getting more and more distribution. Closing on BluePrint, we think 65% of their sales today are sold direct to home. They do a distribution in Whole Foods in the Northeast, but expanding the distribution of that. We think our new aseptic soups in [Tetra] Recart ... has some big, big opportunities. Keeping up with the demand of our nut butter business, our gluten-free business. We have over 400 gluten-free products, expanding upon that. So we've got a lot going on, and driving distribution with our products.

Today if you look at Hain, if you take our top 100 products, and we probably are in 33% of the ACV, all commodity volume, 33% of the supermarkets. If you are able to get that into a 50% ACV, that's well worth over $200 million at retail. So it's just growing, expanding distribution for us. 

Canada, a lot happening in Canada. You get a lot of new retailers coming into that market. You've got Loblaws, who is the biggest retailer focused on health and nutrition up there, and how they grow that. So we're pretty excited about that.

And last but not least, there are a lot of other acquisitions out there that we're doing. I know we're focused on the balance sheet. Our balance sheet, we're underleveraged today. We paid down close to $90 million of debt after doing the Daniels acquisition. We now closed on the Premier acquisition, of course, at the end of October. And we're really focused on managing that, looking at other acquisitions, and at the same time, how do we really churn cash and keep paying down debt, and we focus on our financial metrics. 


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