- Hain Celestial's stock spiked more than 13% Wednesday after the company announced it had completed its independent audit committee review, which showed no evidence indicating intentional wrongdoing, Seeking Alpha reported.
- In August, Hain did not release its fourth quarter and full-year 2016 results after discovering financial discrepancies regarding concessions made to certain U.S. distributors.
- The company cannot release its financial results until the company completes the audit process and its internal accounting review. But Hain said it is "working diligently on the matter and will, as soon as reasonably practicable, make a further announcement regarding the timing of the release of its financial results," according to a news release.
The company also said in its news release that it had "begun to implement a remediation plan to strengthen its internal controls and organization," which would presumably prevent something like this from happening again. Even without releasing financial results, positive or otherwise, investors' confidence — and relief — that Hain had fixed its financial errors caused the stock price to soar.
The question now is just how much those financial errors ended up impacting the fourth quarter and full-year 2016 results. Investors will also be watching any impact on previous quarters, should changes be made from reporting concessions in the wrong quarter. Hain's growth slipped after 20 consecutive quarters of double-digit sales increases, but top-line improvements still remained in the high-single digits in the most recently reported quarters.
Now that Hain has fixed its internal accounting errors, investors are also wondering whether Hain will return to the spotlight as the next major acquisition target in the natural foods and beverage space. After Danone announced it would acquire WhiteWave, a similar company in size and portfolio to Hain, many analysts predicted that Hain would be the next buyout. But shortly thereafter, Hain made its announcement about withholding financial results, which muted those rumors.
M&A market chatter surrounding Hain sprung up again earlier this week as the company's stock began to perk up after months of share price declines, but no reports cited any official sources. Another manufacturer could pick up Hain sooner than later while the stock price remains so low, which would make the total purchase more cost-effective. But they may also want to wait for Hain's final financial results before making an offer, even if that means Hain's stock might pop in the meantime.