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Organic food giant under SEC investigation
Sustainable Food News
Hain Celestial’s stock drops to lowest level since June 2013 after agency subpoenas documents
Shares of the Hain Celestial Group, Inc. plunged more than 15 percent to a new low Monday morning after the organic and natural food giant manufacturer said the Securities and Exchange Commission (SEC) has placed it under investigation and subpoenaed it for documents related to its previously reported accounting errors.
The Lake Success, N.Y.-based company (NASDAQ: HAIN), which owns the Earth’s Best organic baby food and BluePrint cold-pressed juice brands, among others, said in a securities filing late Friday that it “is in the process of responding to the SEC’s requests for information and intends to cooperate fully” with the agency’s investigation.
Hain’s stock dropped at the opening bell Monday to $32.87, its lowest level since June 2013, in trading at more than four times the normal volume. The stock has a 52-week high of $56.99. Hain has a market cap of $3.5 billion.
Hain also said in the securities filing that it will continue to delay the filing of quarterly financial reports until an internal accounting review and audit process are finished. Hain has not reported quarterly earnings since May 4, when it released its results for its fiscal third quarter ending March 31.
The company first announced accounting errors would delay the release of its FY2016 financial results on August 15, when the audit was launched to determine whether revenue associated with concessions that were granted during the fourth quarter to certain unnamed U.S. distributors was accounted for in the correct period.
In November, Hain announced that its internal audit of accounting errors had found “no evidence of intentional wrongdoing” in connection with its financial statements, but that it would not release financial results until it completed the internal accounting review and audit process. Hain CEO Irwin Simon said at the time that the company “can now move forward with its reporting process as we put these challenges behind us.”
In Friday’s securities filing, Hain said its audit had “subsequently expanded its review to perform an analysis of previously-issued financial information in order to identify and assess any potential errors, which is ongoing.”
As a result, the company said it does not expect to file its quarterly report for the FY2017 first quarter ended Sept. 30, and the filing of its annual report for FY2016 ended June 30.
In October, a report published by Probes Reporter LLC said the SEC was investigating Hain over the accounting errors.
Story courtesy of the influential daily industry newsletter, Sustainable Food News. For subscription information: https://www.sustainablefoodnews.com/register.php
