Revenue Recognition

Hain Completes Audit of Revenue Woes

The natural products maker reported that it did not have to make material changes to its previously reported financial statements.
William SprouseJune 22, 2017

Hain Celestial announced it has completed a review and audit of its accounting practices, ten months after disclosing it discovered potential problems with the time frame in which certain revenue was booked, according to CNBC.

Hain, whose brands include Celestial Seasonings, Terra Chips, and Garden of Eatin, said it did not have to make material changes to its previously reported financial statements. Hain has not reported financial results since May 2016.

“The accounting review is complete, and we are pleased to report our financial results, which reflect no material changes to any prior reported periods,” Hain’s founder, president and CEO Irwin Simon said in a press release. Irwin said new internal controls and improved oversight would strengthen the company.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

As part of the post-investigation moves, Hain named James Langrock CFO and executive vice president. James succeeds Pasquale Conte, who is leaving to pursue other opportunities, the company reported in a press release. Conte will work with Langrock “to facilitate an orderly transition,” according to the organic and natural products company.

On August 16, 2016, Hain disclosed accounting issues. It then delayed reporting 2016 results and missed making a full-year guidance. The potential accounting problems stemmed from revenue-recognition timing issues. At the time, the company also disclosed it was the subject of an SEC investigation.

When it disclosed the accounting issues, Hain said it had “identified concessions that were granted to certain distributors in the United States.”

The company added then that it was “evaluating whether the revenue associated with those concessions was accounted for in the correct period and is also currently evaluating its internal control over financial reporting.” Hain said also In August that the company’s audit committee of its board had retained independent counsel to aid the review.

On May 11, Hain said it expected to file results by the end of the month. Instead it issued a press release saying it needed more time.  The company said it is now current with all its reporting obligations with the SEC.

During its Wednesday earnings call, Hain reported net income of $67.1 million for the nine-month period, 64 cents a share.