After an investigation that stretched more than a year, Hain Celestial completed its accounting review and audit and found it didn't have to make any material changes to its previously reported financial statements, the company said Thursday.
Hain shares surged more than 4 percent ahead of the market's open.
As the company moves beyond this issue, and adds more internal controls and oversight of its financial reporting, it said Thursday James Langrock was promoted to executive vice president and chief financial officer. He has been with the company since 2015.
The company, which saw its U.S. sales decline more than 6 percent in the first nine months of the year, also discussed plans to cut costs by $350 million through fiscal 2020, and said it will buy back $250 million of its own stock.
Total sales over the past nine months were relatively flat with the same period a year ago. On a constant currency basis, sales were up 4 percent.
Net income for the nine-month period was $67.1 million, or 64 cents a share. On an adjusted basis, it earned $82.7 million, or 79 cents a share.
Hain attributed its U.S. sales decline to the impact of inventory realignment at certain customers' stores and product rationalization of $55 million.
The maker of Celestial Seasonings, Terra Chips and Garden of Eatin has been reducing the number of products it sells in order to put more support behind successful items and reduce costs. This plan will help it to achieve its cost savings target. It also plans to improve its productivity.
The natural and organic products maker also released fourth-quarter and full-year earnings projections that fell short of analysts' expectations.
"The accounting review is complete, and we are pleased to report our financial results, which reflect no material changes to any prior reported periods," said Irwin Simon, Hain's founder, president and chief executive. He expect Hain's new internal controls and enhanced oversight will strengthen the company.
Back in August, Hain delayed its fiscal 2016 results, missed full-year guidance and also announced potential accounting troubles stemming from revenue-recognition timing issues. The last time it reported financial results was back in May 2016.
Hain's stock sank 27 percent on Aug. 16, 2016, when the accounting issues were disclosed. It has since fallen another 16 percent, and the company has disclosed it's also the subject of a Securities and Exchange Commission investigation and is cooperating with the regulatory agency.
With the filing of these results, the company said it is now current with all its reporting obligations with the SEC.
Hain also released a forecast for its fiscal fourth quarter and fiscal 2017. Hain expects to earn between $1.19 to $1.22 a share, on an adjusted basis, for the fiscal year. This was well short of consensus estimates of $1.94 a share, reported by Thomson Reuters. Revenue was projected at $2.84 billion to $2.86 billion, shy of the $2.906 billion expected.
Here's the company's guidance compared with what Wall Street expected:
- Adjusted Q4 EPS: 40 to 43 cents vs. 54 cents expected, according to Thomson Reuters
- Q4 Revenue: $715 million to $735 million vs. $724.8 million expected, according to Thomson Reuters
"We have continued to make significant progress across key areas of our business, and while our financial results were impacted by a challenging operating environment during the first three quarters of 2017, we believe that we have reached an inflection point in the fourth quarter, with the company well-positioned for long-term growth and profitability," Simon said.
By executing its turnaround plan, Hain said it expects to achieve total net sales growth of between 4 percent to 6 percent by fiscal 2018, and adjusted earnings before interest, taxes, depreciation and amortization of $350 million to $375 million.
(Source: Hain Celestial)
Consumers have been shifting away from traditional packaged foods, in favor of healthier options. Hain has always focused on organic and natural foods.
The CEO told investors it expects Amazon's decision to purchase Wholes will benefit the company as it highlights the value of Hain's brands and will allow the for greater penetration in the market.
—CNBC's Jeff Daniels contributed to this report.