Are Hain Celestial’s Problems Worse Than They Thought?

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Could Hain Celestial’s problems be much worse than they originally thought?

The optimists are out in force supporting the company and they are saying the reason this “Problem” came to light was because a “Third Party” just happened to catch the accounting issues as part of a due diligence package.  This could indeed be the reasoning behind the snafu Hain’s have found themselves.

BUT what if?  What if the books are slightly poached?  What if the problem is much deeper and we have full-blown barbecue party going on at Hain Celestial?

Bad news seldom ever reveals itself in entirety on the first press release.  History tells this is fact.  Go back and look at most accounting issues and you can document this as truth.  Matter of fact, when the problems are real the news comes out in smaller bite size chunks that might seem more digestible for the average person.  But bet this, the Bobby Axelrod’s of the world know what these tidbits equal.

 

I want the message to ring clear today.  If you are thinking of a position in Hain Celestial before this all comes to light is simply this:

I think anyone taking a stake here should have an Armageddon plan in place. Meaning you should take out some insurance on your position just as Hain’s has against class action lawsuits.  You will thank me if we have a post-Labor Day BBQ.

See excerpt from today’s filing:

The Hain Celestial Group, Inc. (the “Company”) has determined that it is unable to file its Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the “Form 10-K”) by August 29, 2016, the original due date for such filing. As disclosed in the Company’s Current Report on Form 8-K filed on August 15, 2016, during its fourth quarter, the Company identified concessions that were granted to certain distributors in the United States. The Company is currently 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. The Audit Committee of the Company’s Board of Directors is conducting an independent review of these matters and has retained independent counsel to assist in that review. As a result, the Company cannot, without unreasonable effort or expense, file its Form 10-K by the due date of August 29, 2016. The Company does not expect to file its Form 10-K until the completion of the Audit Committee’s review of these matters and the audit process relating to the 2016 fiscal year. While the Company continues to work expeditiously to conclude this review and file its Form 10-K as soon as practicable, the Company does not anticipate filing the Form 10-K within the fifteen-day period provided by Rule 12b-25.

Stay Nimble

 

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