content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
                                     (Mark One)
             |X| Quarterly Report Pursuant to Section 13 or 15(d) of the
                          Securities Exchange Act of 1934
  
                      For the quarterly period ended: 12/31/03
                                         or
       |_| Transition Report pursuant to Section 13 or 15(d) of the Securities
             Exchange Act of 1934 for the transition period from ______
                                     to _______.
  
                           Commission file number: 0-22818
  
                           THE HAIN CELESTIAL GROUP, INC.
  
               (Exact name of registrant as specified in its charter)
  
  
    Delaware                                            22-3240619
  -------------------------------                    ---------------------
  (State or other jurisdiction of                     (I.R.S. Employer
   incorporation or organization)                     Identification No.)
  
                   58 South Service Road, Melville, New York 11747
       ----------------------------------------------------------------------
                 (Address of principal executive offices) (Zip Code)
  
  
         Registrant's telephone number, including area code: (631) 730-2200
  
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding 12 months (or for such shorter period that the registrant was
  required to file such reports), and (2) has been subject to such filing
  requirement for the past 90 days.
  
                             Yes         X                               No
                                      -------                            -------
  
  Indicate by check mark whether the registrant is an accelerated filer (as
  defined in Rule 12b-2 of the Exchange Act).
  
                             Yes         X                               No
                                      -------                            -------
  
  
  Indicate the number of shares outstanding of each of the issuer's classes of
  common stock, as of the latest practicable date.
  
  
  35,370,479 shares of Common Stock $.01 par value, as of February 4, 2004.
  
  
  <PAGE>
                           THE HAIN CELESTIAL GROUP, INC.
  
                                        INDEX
  
  
                            Part I Financial Information
  
  Item 1.  Financial Statements
  
           Consolidated Balance Sheets - December 31, 2003
           (unaudited) and June 30, 2003                                         2
  
           Consolidated Statements of Income -
           Three months and six months ended December 31, 2003
           and 2002 (unaudited)                                                  3
  
           Consolidated Statement of Stockholders' Equity -
           Six months ended December 31, 2003 (unaudited)                        4
  
           Consolidated Statement of Cash Flows -
           Six months ended December 31, 2003 and 2002 (unaudited)               5
  
           Notes to Consolidated Financial Statements                         6-10
  
  Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                               11-16
  
  Item 3.  Quantitative and Qualitative Disclosures
           About Market Risk                                                    17
  
  Item 4.  Controls and Procedures                                              17
  
                             Part II Other Information
  
  Item 4.  Submission of Matters to a Vote of Security Holders                  17
  
  Item 6.  Exhibits and Reports on Form 8-K                                     18
  
           Signatures                                                           19
  
  
  
  
  
  
                                         1
  
  <PAGE>
  
  PART I - FINANCIAL INFORMATION
  
  ITEM 1 - FINANCIAL STATEMENTS
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  (In thousands, except per share and share amounts)
  <TABLE>
  <CAPTION>
                                                                         December 31,           June 30, 2003
                                                                             2003
                                                                     ---------------------   --------------------
                                          ASSETS                         (Unaudited)            (Note)
   Current assets:
  <S>                                                               <C>                    <C>
    Cash and cash equivalents                                               $  23,771              $   10,984
    Accounts receivable, less allowance for doubtful
      accounts of $1,641 and $1,748                                            74,876                  61,215
    Inventories                                                                74,157                  66,444
    Recoverable income taxes, net                                                 978                     223
    Deferred income taxes                                                       3,171                   3,171
    Other current assets                                                        8,779                   7,671
                                                                     ---------------------   --------------------
      Total current assets                                                    185,732                 149,708
  
   Property, plant and equipment, net of accumulated
     depreciation and amortization of $38,705 and $31,555                      68,710                  68,665
   Goodwill                                                                   304,616                 296,508
   Trademarks and other intangible assets, net of
     accumulated amortization of $7,875 and $7,377                             55,819                  55,975
   Other assets                                                                 9,152                  10,692
                                                                     ---------------------   --------------------
     Total assets                                                           $ 624,029               $ 581,548
                                                                     =====================   ====================
  
                           LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:
    Accounts payable and accrued expenses                                  $   59,653               $  55,710
    Current portion of long-term debt                                           6,856                   8,807
    Income taxes payable                                                        9,779                   1,867
                                                                     ---------------------   --------------------
     Total current liabilities                                                 76,288                  66,384
  
   Long-term debt, less current portion                                        58,927                  59,455
   Deferred income taxes                                                       14,912                  14,912
                                                                     ---------------------   --------------------
     Total liabilities                                                        150,127                 140,751
  
   Stockholders' equity:
    Preferred stock - $.01 par value, authorized 5,000,000
     shares, no shares issued                                                       -                       -
    Common stock - $.01 par value, authorized 100,000,000
     shares, issued 35,992,995 and 34,810,722 shares                              360                     348
    Additional paid-in capital                                                374,676                 364,877
    Retained earnings                                                          96,003                  79,089
    Foreign currency translation adjustment                                    11,298                   4,639
                                                                     ---------------------   --------------------
                                                                              482,337                 448,953
   Less: 622,516 and 606,619 shares of
    treasury stock, at cost                                                    (8,435)                 (8,156)
                                                                     ---------------------   --------------------
     Total stockholders' equity                                               473,902                 440,797
                                                                     ---------------------   --------------------
  
     Total liabilities and stockholders' equity                             $ 624,029               $ 581,548
                                                                     =====================   ====================
  </TABLE>
  
  Note: The balance sheet at June 30, 2003 has been derived from the audited
  financial statements at that date.
  
  See notes to consolidated financial statements.
  
                                         2
  
  <PAGE>
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
  (In thousands, except per share amounts)
  <TABLE>
  <CAPTION>
  
                                                      Three Months Ended                          Six Months Ended
                                                         December 31,                               December 31,
                                            ---------------------------------------    ---------------------------------------
                                                  2003                 2002                  2003                 2002
                                            -----------------    ------------------    -----------------    ------------------
                                                         (Unaudited)                                (Unaudited)
  
  <S>                                      <C>                   <C>                  <C>                   <C>
  Net sales                                        $ 142,792             $ 123,006            $ 269,845             $ 219,426
  Cost of sales                                       95,693                82,235              185,584               150,857
                                            -----------------    ------------------    -----------------    ------------------
     Gross profit                                     47,099                40,771               84,261                68,569
  
  Selling, general and
   administrative expenses                            30,047                26,975               55,866                47,070
  Restructuring and other
   non-recurring charges                                   -                   440                    -                   440
                                            -----------------    ------------------    -----------------    ------------------
  
     Operating income                                 17,052                13,356               28,395                21,059
  
  Interest expense and other
   expenses, net                                         350                   206                1,141                   376
                                            -----------------    ------------------    -----------------    ------------------
  Income before income taxes                          16,702                13,150               27,254                20,683
  Provision for income taxes                           6,330                 4,964               10,340                 7,808
                                            -----------------    ------------------    -----------------    ------------------
     Net income                                     $ 10,372               $ 8,186               16,914              $ 12,875
                                            =================    ==================    =================    ==================
  
  Net income per share:
     Basic                                            $ 0.30               $  0.24               $ 0.49               $  0.38
                                            =================    ==================    =================    ==================
     Diluted                                          $ 0.29               $  0.24               $ 0.47               $  0.37
                                            =================    ==================    =================    ==================
  
  Weighted average common shares outstanding:
     Basic                                            34,913                33,776               34,567                33,739
                                            =================    ==================    =================    ==================
     Diluted                                          36,135                34,467               35,745                34,425
                                            =================    ==================    =================    ==================
  
  
  </TABLE>
  
  
    See notes to consolidated financial statements.
  
  
  
  
                                         3
  <PAGE>
  
  
  
  
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
  SIX MONTHS ENDED DECEMBER 31, 2003 (In thousands, except per share and share
  data)
  
  <TABLE>
  <CAPTION>
  
                                                        Common Stock           Additional
                                                                   Amount       Paid-in        Retained         Treasury Stock
                                                      Shares       at $.01       Capital        Earnings       Shares      Amount
                                                 --------------- ----------- --------------- -------------- ----------- ------------
  
  <S>             <C> <C>                            <C>               <C>        <C>             <C>          <C>         <C>
  Balance at June 30, 2003                           34,810,722        $348       $ 364,877       $ 79,089     606,619     $(8,156)
  
  Exercise of stock options                           1,182,273          12           9,776
    and warrants
  
  Purchase of treasury shares                                                                                   15,897        (279)
  
  Non-cash compensation charge                                                           23
  
  Comprehensive income:
    Net income for the period                                                                       16,914
  
    Translation adjustments
  
  
  
  Total comprehensive income
                                                 --------------- ----------- --------------- -------------- ----------- ------------
  Balance at December 31, 2003                       35,992,995       $ 360        $374,676       $ 96,003  622,516        $(8,435)
                                                 =============== =========== =============== ============== =========== ============
  </TABLE>
  
  
  
  <TABLE>
  <CAPTION>
                                                   Foreign
                                                   Currency
                                                   Translation                  Comprehensive
                                                   Adjustment        Total             Income
                                                ---------------- ------------- ---------------------
  
  <S>                                          <C>              <C>            <C>
  Balance at June 30, 2003                        $ 4,639           $440,797
  
  Exercise of stock options                                            9,788
    and warrants
  
  Purchase of treasury shares                                           (279)
  
  Non-cash compensation charge                                            23
  
  Comprehensive income:
    Net income for the period                                         16,914            $  16,914
  
    Translation adjustments                            6,659           6,659                6,659
                                                                               ---------------------
  
  Total comprehensive income                                                            $  23,573
                                                ---------------- ------------- =====================
  Balance at December 31, 2003                      $ 11,298        $473,902
                                                ================ =============
  </TABLE>
  
  See notes to consolidated financial statements.
  
                                         4
  <PAGE>
  
  
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
  (In thousands)
  <TABLE>
  <CAPTION>
                                                                                      Six Months Ended
                                                                                        December 31,
                                                                          ------------------------------------------
                                                                                2003                    2002
                                                                          ------------------     -------------------
  CASH FLOWS FROM OPERATING ACTIVITIES                                                   (Unaudited)
  
  <S>                                                                            <C>                     <C>
  Net income                                                                     $  16,914               $ 12,875
  Adjustments to reconcile net income to net cash
   provided by operating activities:
       Depreciation and amortization                                                 5,331                  4,163
       Provision for doubtful accounts                                               (115)                   (138)
  
     Increase (decrease) in cash attributable to changes in
          operating assets and liabilities, net of amounts
          applicable to acquired businesses:
            Accounts receivable                                                    (12,641)                (7,740)
            Inventories                                                             (7,126)                 3,100
            Other current assets                                                    (1,364)                (1,536)
            Other assets                                                             1,868                 (1,950)
            Accounts payable and accrued expenses                                    1,837                 (4,191)
         Accrued restructuring and non-recurring charges                                 -                 (1,046)
            Income taxes, net                                                        7,912                  8,695
                                                                          ------------------     -------------------
  
            Net cash provided by operating activities                               12,616                 12,232
                                                                          ------------------     -------------------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                                               (2,293)                (4,262)
  Acquisitions of businesses, net of cash acquired                                        -               (44,659)
                                                                          ------------------     -------------------
            Net cash used in investing activities                                   (2,293)               (48,921)
                                                                          ------------------     -------------------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
  (Repayments) proceeds from bank revolving
    credit facility, net                                                            (1,650)                44,300
  Payments on economic development revenue bonds                                      (258)                  (250)
  Purchase of treasury stock                                                          (279)                (2,579)
  Proceeds from exercise of warrants and options, net of
    related expenses                                                                 9,788                      4
  (Repayments) proceeds of other long-term debt, net                                (2,352)                   589
                                                                          ------------------     -------------------
  
            Net cash provided by financing activities                                5,249                 42,064
                                                                          ------------------     -------------------
  
  Effect of exchange rate changes on cash                                           (2,758)                  (240)
                                                                          ------------------     -------------------
  Net increase in cash and cash equivalents                                         12,787                  5,135
  Cash and cash equivalents at beginning of period                                  10,984                  7,538
                                                                          ------------------     -------------------
  
  Cash and cash equivalents at end of period                                     $  23,771              $  12,673
                                                                          ==================     ===================
  
  </TABLE>
  
  See notes to consolidated financial statements.
  
  
                                         5
  
  <PAGE>
  
  
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  
  1.       GENERAL
  
       The Hain Celestial Group, Inc. (herein referred to as "we","us" and "our")
  is a natural, organic, specialty and snack food company. We are a leader in many
  of the top natural food categories, with such well-known natural food brands as
  Celestial Seasonings(R) teas, Hain Pure Foods(R), Westbrae(R), Westsoy(R), Rice
  Dream(R), Soy Dream(R), Imagine(R), Little Bear Organic Foods(R), Bearitos(R),
  Arrowhead Mills(R), Health Valley(R), Breadshop(R), Casbah(R), Garden of
  Eatin'(R), Walnut Acres Certified Organic(R), Terra Chips(R), Harry's Premium
  Snacks(R), Boston's(R), Yves Veggie Cuisine(R), DeBoles(R), Earth's Best(R),
  Nile Spice(R), Lima(R), Biomarche(R) and Grains Noirs(R). Our principal
  speciality product lines include Hollywood(R) cooking oils, Estee(R) sugar-free
  products, Kineret(R) kosher foods, Boston Better Snacks(R), and Alba Foods(R).
  
       We operate in one business segment: the sale of natural, organic and other
  food and beverage products. In our 2003 fiscal year, approximately 42% of our
  revenues were derived from products that were manufactured within our own
  facilities with 58% produced by various co-packers.
  
       Certain reclassifications have been made to our previous year's
  consolidated financial statements to conform them to the current year's
  presentation.
  
       All amounts in our consolidated financial statements have been rounded to
  the nearest thousand dollars, except share and per share amounts.
  
  2.       BASIS OF PRESENTATION
  
       Our consolidated financial statements have been prepared in accordance with
  accounting principles generally accepted in the United States for interim
  financial information and with the instructions to Form 10-Q and Article 10 of
  Regulation S-X. Accordingly, they do not include all of the information and
  footnotes required by accounting principles generally accepted in the United
  States. In the opinion of management, all adjustments (including normal
  recurring accruals) considered necessary for a fair presentation have been
  included. Operating results for the three months and six months ended December
  31, 2003 are not necessarily indicative of the results that may be expected for
  the year ending June 30, 2004. Please refer to the footnotes to our consolidated
  financial statements as of June 30, 2003 and for the year then ended included in
  our Annual Report on Form 10-K for information not included in these condensed
  footnotes.
  
  3.       EARNINGS PER SHARE
  
       We report basic and diluted earnings per share in accordance with Statement
  of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" ("SFAS
  No. 128"). Basic earnings per share excludes the dilutive effects of options and
  warrants. Diluted earnings per share includes only the dilutive effects of
  common stock equivalents such as stock options and warrants.
  
  
                                         6
  
  <PAGE>
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
           The following table sets forth the computation of basic and diluted
  earnings per share pursuant to SFAS No. 128:
  
  <TABLE>
  <CAPTION>
  
                                                                   Three Months Ended                Six Months Ended
                                                                      December 31,                     December 31,
                                                              ------------------------------ ---------------------------------
  
                                                                   2003           2002            2003              2002
                                                              --------------- -------------- ---------------- ----------------
  Numerator:
  <S>                                                         <C>             <C>            <C>             <C>
  Net income                                                        $ 10,372        $ 8,186         $ 16,914         $ 12,875
                                                              =============== ============== ================ ================
  Denominator (in thousands):
  Denominator for basic earnings per
   share - weighted average shares
   outstanding during the period                                      34,913         33,776           34,567           33,739
                                                              --------------- -------------- ---------------- ----------------
  
  Effect of dilutive securities:
   Stock options                                                       1,072            535            1,018              529
   Warrants                                                              150            156              160              157
                                                              --------------- -------------- ---------------- ----------------
                                                                       1,222            691            1,178              686
                                                              --------------- -------------- ---------------- ----------------
  Denominator for diluted earnings per
   share - adjusted weighted average
   shares and assumed conversions                                     36,135         34,467           35,745           34,425
                                                              =============== ============== ================ ================
  Basic net income per share                                          $ 0.30         $ 0.24           $ 0.49           $ 0.38
                                                              =============== ============== ================ ================
  Diluted net income per share                                        $ 0.29         $ 0.24           $ 0.47           $ 0.37
                                                              =============== ============== ================ ================
  
  </TABLE>
  
  
  4.       INVENTORIES
  
           Inventories consisted of the following:
  
  <TABLE>
  <CAPTION>
                                                                      December 31,                June 30,
                                                                          2003                      2003
                                                                ------------------------ -------------------------
  <S>                                                          <C>                       <C>
         Finished goods                                                   $47,019                   $43,022
         Raw materials, work-in-progress
           and packaging                                                   27,138                    23,422
                                                                ------------------------ -------------------------
                                                                          $74,157                   $66,444
                                                                ======================== =========================
  
  </TABLE>
  
                                         7
  
  <PAGE>
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
  5.     PROPERTY, PLANT AND EQUIPMENT
  
         Property, plant and equipment consisted of the following:
  
  <TABLE>
  <CAPTION>
                                                                     December 31,               June 30,
                                                                         2003                     2003
                                                                ----------------------- -------------------------
  <S>                                                              <C>                      <C>
         Land                                                            $  7,053                 $ 6,913
         Building and improvements                                         26,355                  24,448
         Machinery and equipment                                           66,259                  61,949
         Furniture and fixtures                                             2,425                   2,383
         Leasehold improvements                                             1,548                   1,457
         Construction in progress                                           3,775                   3,070
                                                                ----------------------- -------------------------
                                                                          107,415                 100,220
         Less: Accumulated depreciation
                 and amortization                                          38,705                  31,555
                                                                ----------------------- -------------------------
                                                                         $ 68,710                $ 68,665
                                                                ======================= =========================
  
  </TABLE>
  
  6.       ACQUISITIONS
  
       On June 17, 2003, we acquired 100% of the stock of privately-held Acirca,
  Inc. ("Acirca"), the owner of the Walnut Acres Certified Organic(R) brand of
  organic fruit juices, soups, pasta sauces and salsas. Since June 2000, the
  financial and investment group Acirca has expanded Walnut Acres, its premier
  certified organic food and beverage brand, by integrating a series of organic
  brands including Mountain Sun(R), ShariAnn's(R), Millina's Finest(R), and Frutti
  di Bosco(R) into its Walnut Acres flagship. The acquisition of these product
  lines allows us to add natural and organic juices and sauces to our product
  offerings, and enhance our offerings of soups and salsas. The purchase price
  consisted of approximately $9 million in cash, 134,797 shares of our common
  stock valued at $2.2 million, plus the assumption of certain liabilities. At
  December 31, 2003, goodwill from this transaction was estimated to be $15.2
  million.
  
       On December 2, 2002, we acquired substantially all of the assets and
  assumed certain liabilities of privately-held Imagine Foods, Inc. ("Imagine") in
  the United States and the United Kingdom. Imagine is a non-dairy beverage
  company specializing in aseptic and refrigerated rice and soy milks, organic
  aseptic soups and broths, and organic frozen desserts in the U.S., Canada, and
  Europe. The acquisition of these product lines is expected to enhance our
  existing market positions in non-dairy beverages and soups while adding frozen
  dessert products to our offerings to customers. The purchase price consisted of
  approximately $44.2 million in cash, 532,765 shares of our common stock valued
  at $7 million, plus the assumption of certain liabilities. At December 31, 2003,
  goodwill from this transaction was valued at $37.3 million, trademarks and other
  non-amortizable intangibles were $15.7 million, and patents and other
  amortizable intangibles were valued at $1.2 million.
  
  
                                         8
  
  <PAGE>
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
       The following table summarizes the estimated fair values of assets acquired
  and liabilities assumed of Acirca and Imagine at the dates of the acquisitions:
  
                    Current assets                           $17,714
                    Property and equipment                     2,409
                                                     --------------------
  
                    Total assets                              20,123
                    Liabilities assumed                       14,937
                                                     --------------------
                    Net assets acquired                      $ 5,186
                                                     ====================
  
       The balance sheet at December 31, 2003, includes the assets acquired and
  liabilities assumed valued at fair market value at the date of purchase. We have
  completed all of the procedures required to finalize the purchase price
  allocation for Imagine, while such procedures required for Acirca are in the
  early stages and are expected to be completed during 2004.
  
       Our results of operations for the three and six months ended December 31,
  2003 include the results of the above described acquisitions for the complete
  period. The following table presents information about sales and net income had
  the operations of the acquired businesses been combined with our business as of
  the first day of each of the periods shown. This information has not been
  adjusted to reflect any changes in the operations of these businesses subsequent
  to their acquisition by us. Changes in operations of these acquired businesses
  include, but are not limited to, integration of systems and personnel,
  discontinuation of products (including discontinuation resulting from the
  integration of acquired and existing brands with similar products), changes in
  trade practices, application of our credit policies, changes in manufacturing
  processes or locations, and changes in marketing and advertising programs. Had
  any of these changes been implemented by the former management of the businesses
  acquired prior to acquisition by us, the sales and net income information might
  have been materially different than the actual results achieved and from the pro
  forma information provided below.
  <TABLE>
  <CAPTION>
  
                                                       Three Months Ended               Six Months Ended
                                                        December 31, 2002              December 31, 2002
                                                 ================================ =============================
  
  <S>                                                    <C>                              <C>
  Net sales                                                 $ 144,010                        $ 267,140
                                                 ================================ =============================
  Net income                                                 $  5,882                         $  9,109
                                                 ================================ =============================
  Income per share:
    Basic                                                     $  0.17                          $  0.27
                                                 ================================ =============================
    Diluted                                                   $  0.17                          $  0.26
                                                 ================================ =============================
  Weighted average shares:
    Basic                                                    $ 34,131                         $ 34,318
                                                 ================================ =============================
    Diluted                                                  $ 34,957                         $ 35,004
                                                 ================================ =============================
  </TABLE>
  
       In management's opinion, the unaudited pro forma results of operations are
  not indicative of the actual results that would have occurred had the Acirca and
  Imagine acquisitions been consummated at the beginning of the periods presented
  or of future operations of the combined companies under our management.
  
       On May 14, 2003, our subsidiary in Belgium acquired Grains Noirs, N.V., a
  Belgian producer and marketer of fresh prepared organic appetizers, salads,
  
  
                                         9
  
  <PAGE>
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
  sandwiches and other full-plated dishes. The purchase price paid was
  approximately $2.2 million in cash. The net assets acquired, as well as the
  sales and results of operations of Grains Noirs, are not material and,
  therefore, have not been included in the detailed information about our
  acquisitions.
  
  7.       CREDIT FACILITY
  
       We have a $240 million credit facility with a group of banks (the "Credit
  Facility") which provides us with a $145 million revolving credit facility (the
  "Revolving Credit Facility") through March 29, 2005 and a $95 million 364-day
  facility (the "364-Day Facility") through March 25, 2004. The Credit Facility is
  unsecured but is guaranteed by all of our current and future direct and indirect
  domestic subsidiaries. We are required to comply with customary affirmative and
  negative covenants for facilities of this nature. Revolving credit loans under
  this facility bear interest at a base rate (greater of the applicable prime rate
  or Federal Funds Rate plus applicable margin) or, at our option, the reserve
  adjusted LIBOR rate plus an applicable margin. As of December 31, 2003, $52.2
  million was borrowed under the Revolving Credit Facility with interest at 2.5%.
  At December 31, 2003, there were no borrowings under the 364-Day Facility.
  
  8.       STOCK-BASED COMPENSATION
  
       The Company accounts for its stock-based compensation plans using the
  intrinsic value method under APB Opinion No. 25, "Accounting for Stock Issued to
  Employees" ("APB 25") and related Interpretations. Under APB 25, when the
  exercise price of our employee stock options at least equals the market price of
  the underlying stock on the date of grant, no compensation expense is
  recognized.
  
       If compensation cost for the Company's stock-based compensation plans had
  been determined based on the fair value at the grant dates consistent with the
  method prescribed by SFAS No. 123, "Accounting For Stock-Based Compensation",
  net earnings and earnings per share for the three months and six months ended
  December 31, 2003 and 2002 would have been the pro forma amounts that follow:
  
  <TABLE>
  <CAPTION>
                                                               Three Months Ended                      Six Months Ended
                                                                  December 31,                           December 31,
                                                        -----------------    -------------     ---------------    --------------
                                                              2003               2002               2003              2002
                                                        -----------------    -------------     ---------------    --------------
  
  <S>                                                  <C>                   <C>               <C>              <C>
  Net income, as reported                                        $10,372         $  8,186             $16,914          $ 12,875
  Non-cash compensation charge, net of related tax
  effects                                                              7                7                  14                14
  
  Stock-based employee compensation expense
  determined under fair value method, net of related
  tax effects                                                      (716)          (2,374)             (1,937)           (4,815)
                                                        -----------------    -------------     ---------------    --------------
  
  Pro forma net income                                          $  9,663         $  5,819           $  14,991          $  8,074
                                                        =================    =============     ===============    ==============
  
  Basic net income per share:
      As reported                                            $   0.30          $   0.24          $    0.49           $   0.38
                                                             ===========       ==========        ============        ========
      Pro forma                                              $   0.28          $   0.17          $    0.43           $   0.24
                                                             ===========       ==========        ============        ========
  
  Diluted net income per share:
      As reported                                            $   0.29         $   0.24           $    0.47           $   0.37
                                                             ===========      ===========        ============        ========
      Pro forma                                              $   0.27         $   0.17           $    0.42           $   0.23
                                                             ===========      ===========        ============        ========
  
  </TABLE>
  
                                         10
  
  <PAGE>
  
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS
  
  Overview
  
       We manufacture, market, distribute and sell natural, organic, specialty and
  snack food products under brand names which are sold as "better-for-you"
  products. We are a leader in many of the top natural food categories, with such
  well-known natural food brands as Celestial Seasonings(R) teas, Hain Pure
  Foods(R), Westbrae(R), Westsoy(R), Arrowhead Mills(R), Health Valley(R),
  Breadshop's(R), Casbah(R), Garden of Eatin'(R), Rice Dream(R), Soy Dream(R),
  Imagine(R), Walnut Acres Certified Organic(R), Little Bear Organic Foods(R),
  Bearitos(R), Terra Chips(R), Harry's Premium Snacks(R), Boston's(R),
  Gaston's(R), Yves Veggie Cuisine(R), DeBoles(R), Earth's Best(R), Nile Spice(R),
  Lima(R), Biomarche(R) and Grains Noirs(R). Our principal specialty product lines
  include Hollywood(R) cooking oils, Estee(R) sugar-free products, Kineret(R)
  kosher foods, Boston Better Snacks(R), and Alba Foods(R). Our website can be
  found at www.hain-celestial.com.
  
       Our products are sold primarily to specialty and natural food distributors,
  supermarkets, natural food stores, and other retail classes of trade including
  mass-market stores, drug stores, food service channels and club stores.
  
       Our brand names are well recognized in the various market categories they
  serve. We have acquired numerous brands and we will seek future growth through
  internal expansion as well as the acquisition of additional complementary
  brands.
  
       Our overall mission is to be a leading marketer and seller of natural,
  organic, beverage, snack and specialty food products by integrating all of our
  brands under one management team and employing a uniform marketing, sales and
  distribution program. Our business strategy is to capitalize on the brand equity
  and the distribution previously achieved by each of our acquired product lines
  and to enhance revenues by strategic introductions of new product lines that
  complement existing products.
  
  Results of Operations
  
  Three months ended December 31, 2003
  
       Net sales for the three months ended December 31, 2003 were $142.8 million,
  an increase of $19.8 million or 16.1% over net sales of $123.0 million in the
  December 31, 2002 quarter. Our Canadian business grew 14.9%, our European
  business grew 68.2% and our U.S. business grew 13.5%. These increases came
  principally from volume increases, including increased volume from brands owned
  for more than one year as well as the volume added to each geographic area by
  the addition of the Imagine Foods, Walnut Acres and Grains Noirs brands to our
  portfolio. Net sales were negatively impacted by the continuing strike of
  grocery workers in Southern California as well as the transition to a new
  supplier by a major natural foods retailer, while net sales benefited from the
  movement of foreign currencies against the U.S. dollar.
  
       Gross profit for the three months ended December 31, 2003 was 33.0% of net
  sales as compared to 33.1% of net sales in the December 31, 2002 quarter. The
  0.1% decrease in gross profit percentage was principally due to higher consumer
  spending and promotional allowances offset by lower delivery and warehousing
  expenses. We spent more in promotional allowances than our usual rate because we
  introduced the Carb Fit line of low carbohydrate products and we expanded our
  refrigerated non-dairy beverages during the second quarter this year. In
  addition, we spent approximately $1 million more in consumer coupons in this
  
                                         11
  
  <PAGE>
  
  
  year's second quarter as compared to the prior year's second quarter. These
  promotional allowances and consumer spending are charged against sales under
  current accounting rules and, therefore, have the effect of reducing gross
  profit as a percentage of sales.
  
       Selling, general and administrative expenses increased by $3.1 million to
  $30.0 million for the three months ended December 31, 2003 as compared to $27.0
  million in the December 31, 2002 quarter. Such expenses as a percentage of net
  sales amounted to 21.0% for the three months ended December 31, 2003 compared
  with 21.9% in the December 31, 2002 quarter. As a percentage of sales, selling,
  general, and administrative expenses decreased while the overall dollars
  increased. The increase in dollars was a result of increased advertising and
  marketing expenses needed to support our increased sales, while as a percentage
  of sales our selling costs decreased reflecting synergies from our acquired
  businesses.
  
       There were no restructuring and other non-recurring charges for the quarter
  ended December 31, 2003. During the prior year quarter ended December 31, 2002,
  we recorded approximately $0.4 million of restructuring and other non-recurring
  charges related to the sale of our Health Valley facility.
  
       Operating income was $17.1 million in the three months ended December 31,
  2003 compared to $13.4 million in the December 31, 2002 quarter. Operating
  income as a percentage of net sales was 11.9% in the December 31, 2003 quarter,
  compared with 10.9% in the December 31, 2002 quarter. The dollar increase
  resulted principally from higher sales and gross profits, while the percentage
  increase resulted principally from lower selling, general and administrative
  expenses as a percentage of sales.
  
       Interest and other expenses amounted to $0.4 million for the three months
  ended December 31, 2003 compared to $0.2 million for the three months ended
  December 31, 2002. We incurred higher interest expense in the 2003 quarter
  resulting from borrowings for acquisitions which were outstanding for a full
  quarter this year.
  
       Income before income taxes for the three months ended December 31, 2003
  amounted to $16.7 million compared to $13.2 million in the comparable period of
  the prior year. This increase was attributable to the increase in operating
  income.
  
       Our effective income tax rate approximated 38% of pre-tax income for both
  the three months ended December 31, 2003 and 2002. We expect our effective tax
  rate to approximate this rate during the remainder of fiscal 2004.
  
       Net income for the three months ended December 31, 2003 was $10.4 million
  compared to $8.2 million in the December 31, 2002 quarter. The increase of $2.2
  million in earnings was primarily attributable to the aforementioned increase in
  income before income taxes.
  
  Six Months Ended December 31, 2003
  
       Net sales for the six months ended December 31, 2003 were $269.8 million,
  an increase of $50.4 million or 23.0% over net sales of $219.4 million for the
  six months ended December 31, 2002. Our Canadian business grew 19.2%, our
  European business grew 63.7% and our U.S. business grew 21.6%. These increases
  came principally from volume increases, including increased volume from brands
  owned for more than one year as well as the volume added to each geographic area
  by the addition of the Imagine Foods, Walnut Acres and Grains Noirs brands to
  our
  
  
                                         12
  
  <PAGE>
  
  portfolio. During the second quarter ended December 31, 2003, net sales were
  negatively impacted by the continuing strike of grocery workers in Southern
  California as well as the transition to a new supplier by a major natural foods
  retailer, while net sales benefited from the movement of foreign currencies
  against the U.S. dollar.
  
       Gross profit for both the six months ended December 31, 2003 and the six
  months ended December 31, 2002 was 31.2%. Gross profit was flat due to higher
  consumer spending and promotional allowances in our second quarter offset by
  lower delivery and warehousing expenses. During the second quarter ended
  December 31, 2003, we spent more in promotional allowances than our normal rate
  because we introduced the Carb Fit line of low carbohydrate products and we
  expanded our refrigerated non-dairy beverages. In addition, we spent
  approximately $1 million more in consumer coupons in this year's second quarter
  as compared to the prior year's quarter. These promotional allowances and
  consumer spending are charged against sales under current accounting rules and,
  therefore, have the effect of reducing gross profits as a percentage of sales.
  
       Selling, general and administrative expenses increased by $8.8 million to
  $55.9 as compared to $47.1 million for the six months ended December 31, 2002.
  Such expenses as a percentage of net sales amounted to 20.7% for the six months
  ended December 31, 2003 compared with 21.5% for the six months ended December
  31, 2002. As a percentage of sales, selling, general and administrative expenses
  decreased while the dollars increased. The overall increase in dollars is a
  result of increased advertising and marketing spending needed to support our
  increased sales, while as a percentage of sales our selling costs decreased
  reflecting synergies from our acquired businesses.
  
       There were no restructuring and other non-recurring charges for the six
  months ended December 31, 2003. During the six months ended December 31, 2002,
  we recorded approximately $0.4 million of additional restructuring and other
  non-recurring charges related to the sale of our Health Valley facility.
  
       Operating income was $28.4 million in the six months ended December 31,
  2003 compared to $21.1 million for the six months ended December 31, 2002.
  Operating income as a percentage of net sales was 10.5% for the six months ended
  December 31, 2003, compared with 9.6% for the six months ended December 31,
  2002. The dollar increase resulted principally from higher sales and gross
  profits, while the percentage increases resulted principally from lower selling,
  general and administrative expenses as a percentage of sales.
  
       Interest and other expenses amounted to $1.1 million for the six months
  ended December 31, 2003 compared to $0.4 million for the six months ended
  December 31, 2002. We incurred higher interest expense for the six months ended
  December 31, 2003 resulting from borrowing for acquisitions which are
  outstanding for the full six months this year.
  
           Income before income taxes for the six months ended December 31 2003
  amounted to $27.3 million compared to $20.7 million for the six months ended
  December 31, 2002. This increase was attributable to the increase in operating
  income offset by the increase in interest expenses and other expenses, net.
  
       Our effective income tax rate approximated 38% of pre-tax income for both
  the six months ended December 31, 2003 and 2002.
  
       Net income for the six months ended December 31, 2003 was $16.9 million
  compared to $12.9 million for the six months ended December 31, 2002. The
  increase of $4.0 million in earnings was primarily attributable to the
  
  
                                         13
  
  <PAGE>
  
  aforementioned increase in income before income taxes.
  
  Liquidity and Capital Resources
  
       We finance our operations and growth primarily with the cash flows we
  generate from our operations and from borrowings under our credit facility.
  
       We have available to us a $240 million credit facility (the "Credit
  Facility") which provides us with a $145 million revolving credit facility (the
  "Revolving Credit Facility") through March 29, 2005 and a $95 million 364-Day
  facility (the "364-Day Facility") through March 25, 2004. The Credit Facility is
  unsecured but is guaranteed by all of our direct and indirect domestic
  subsidiaries. We are required to comply with customary affirmative and negative
  covenants for facilities of this nature. As of December 31, 2003 we had $52.2
  million outstanding under the Revolving Credit Facility.
  
       This access to capital provides us with flexible working capital in the
  ordinary course of business, the opportunity to grow our business through
  acquisitions and develop our existing infrastructure through capital investment.
  
       Net cash provided by operations was $12.6 and $12.2 million for the six
  months ended December 31, 2003 and 2002, respectively. Our working capital and
  current ratio was $109.4 million and 2.4 to 1, respectively, at December 31,
  2003 compared with $83.3 million and 2.3 to 1 respectively, at June 30, 2003.
  The increase in working capital resulted principally from the net income earned
  during the six months ended December 31, 2003.
  
       Net cash provided by financing activities was $5.2 million and $42.1
  million for the six months ended December 31, 2003 and 2002, respectively. In
  the December 2003 period, we received proceeds from the exercise of stock
  options and warrants, which were offset by the payment of debt. In the December
  2002, period borrowings were offset by acquisitions of shares of our common
  stock in open market purchases as part of our buy back program.
  
       Obligations for all debt instruments, capital and operating leases and
  other contractual obligations are as follows:
  
  <TABLE>
  <CAPTION>
  
                                                                     Payments Due by Period
                                     ---------------------------------------------------------------------------------------
                                                                                                             More than 5
                                          Total       Less than 1 year     1 - 3 years        3-5 Years          years
                                     ---------------- ----------------- ----------------- ---------------- -----------------
  <S>                                <C>              <C>               <C>               <C>              <C>
  Debt instruments                         $  63,103         $   5,237         $  55,159         $  2,249
                                                                                                                      $ 458
  Capital lease
     obligations                               2,680             1,619             1,049               12                 -
  
  Operating leases                            18,344             2,988             5,641            3,623             6,092
                                     ---------------- ----------------- ----------------- ---------------- -----------------
  Total contractual cash                   $  84,127         $   9,844         $  61,849         $  5,884
     obligations                                                                                                     $6,550
                                     ================ ================= ================= ================ =================
  
  </TABLE>
  
       We believe that cash on hand of $23.8 million at December 31, 2003,
  projected remaining fiscal 2004 cash flows from operations, and availability
  under our Credit Facility are sufficient to fund our working capital needs,
  anticipated capital expenditures of approximately $8 million for the remainder
  of fiscal 2004, and the $9.8 million of debt and lease obligations described in
  the table above. We currently invest our cash on hand in highly liquid
  short-term investments yielding approximately 1% interest.
  
                                         14
  
  <PAGE>
  
  
  Critical Accounting Policies
  
       Our financial statements are prepared in accordance with accounting
  principles generally accepted in the United States. The accounting principles we
  use require us to make estimates and assumptions that affect the reported
  amounts of assets and liabilities at the date of the financial statements and
  amounts of income and expenses during the reporting periods presented. We
  believe in the quality and reasonableness of our critical accounting policies;
  however, it is likely that materially different amounts would be reported under
  different conditions or using assumptions different from those that we have
  consistently applied. We believe our critical accounting policies are as
  follows, including our methodology for estimates made and assumptions used:
  
  Valuation of Accounts and Chargebacks Receivables
  
       We perform ongoing credit evaluations on existing and new customers daily.
  We apply reserves for delinquent or uncollectible trade receivables based on a
  specific identification methodology and also apply an additional reserve based
  on the experience we have with our trade receivables aging categories. Credit
  losses have been within our expectations over the last few years. While two of
  our customers represent approximately 25% of our trade receivable balance on an
  ongoing basis, we believe there is no credit exposure at this time.
  
       Based on cash collection history and other statistical analysis, we
  estimate the amount of unauthorized deductions that our customers have taken to
  be repaid and collectible in the near future in the form of a chargeback
  receivable. While our estimate of this receivable balance could be different had
  we used different assumptions and judgments, historically our cash collections
  of this type of receivable have generally been within our expectations. Our
  chargebacks receivable balance at December 31, 2003 was $5.9 million as compared
  to $6 million at June 30, 2003.
  
       There can be no assurance that we would have the same experience with our
  receivables during different economic conditions, or with changes in business
  conditions, such as consolidation within the food industry and/or a change in
  the way we market and sell our products.
  
  Inventory
  
       Our inventory is valued at the lower of cost or market. Cost has been
  derived principally using standard costs utilizing the first-in, first-out
  method. We provide write-downs for finished goods expected to become
  non-saleable due to age and specifically identify and reserve for slow moving or
  obsolete raw ingredients and packaging.
  
  Property, Plant and Equipment
  
       Our property, plant and equipment is carried at cost and depreciated or
  amortized on a straight-line basis over the lesser of the estimated useful lives
  or lease life, whichever is shorter. We believe the asset lives assigned to our
  property, plant and equipment are within ranges/guidelines generally used in
  food manufacturing and distribution businesses. Our manufacturing plants and
  distribution centers, and their related assets, are periodically reviewed to
  determine if any impairment exists by analyzing underlying cash flow
  projections. At this time, we believe no impairment exists on the carrying value
  of such assets. Ordinary repairs and maintenance are expensed as incurred.
  
  
                                         15
  
  <PAGE>
  
  
  Intangibles
  
       Goodwill is no longer amortized and the value of an identifiable intangible
  asset is amortized over its useful life unless the asset is determined to have
  an indefinite useful life. The carrying values of goodwill and other intangible
  assets with indefinite useful lives are tested annually for impairment.
  
  Revenue Recognition and Sales Incentives
  
       Sales are recognized upon the shipment of finished goods to customers and
  are reported net of sales incentives. Allowances for cash discounts and returns
  are recorded in the period in which the related sale is recognized. Shipping and
  handling costs are included as a component of cost of sales.
  
  Seasonality
  
       Our tea business consists primarily of manufacturing and marketing hot tea
  products and, as a result, its quarterly results of operations reflect seasonal
  trends resulting from increased demand for its hot tea products in the cooler
  months of the year. This is also true for our soups and hot cereals businesses,
  but to a lesser extent. Quarterly fluctuations in our sales volume and operating
  results are due to a number of factors relating to our business, including the
  timing of trade promotions, advertising and consumer promotions and other
  factors, such as seasonality, abnormal and inclement weather patterns and
  unanticipated increases in labor, commodity, energy, insurance or other
  operating costs. The impact on sales volume and operating results, due to the
  timing and extent of these factors, can significantly impact our business. For
  these reasons, you should not rely on our quarterly operating results as
  indications of future performance. In some future periods, our operating results
  may fall below the expectations of securities analysts and investors, which
  could harm our business.
  
  Inflation
  
       The Company does not believe that inflation had a significant impact on the
  Company's results of operations for the periods presented.
  
  Note Regarding Forward Looking Information
  
       Certain statements contained in this Quarterly Report constitute
  "forward-looking statements" within the meaning of Section 27A of the Securities
  Act of 1934 and Sections 21E of the Securities Exchange Act of 1934. Such
  forward-looking statements involve known and unknown risks, uncertainties and
  other factors that may cause the actual results, levels of activity, performance
  or achievements of the Company, or industry results, to be materially different
  from any future results, levels of activity, performance or achievements
  expressed or implied by such forward-looking statements. Such factors include,
  among others, the following: general economic and business conditions; the
  ability of the Company to implement its business and acquisition strategy; the
  ability to effectively integrate its acquisitions; the ability of the Company to
  obtain financing for general corporate purposes; competition; availability of
  key personnel; and changes in, or the failure to comply with government
  regulations. As a result of the foregoing and other factors, no assurance can be
  given as to the future results, levels of activity and achievements and neither
  the Company nor any person assumes responsibility for the accuracy and
  completeness of these statements.
  
                                         16
  
  <PAGE>
  
  
  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
       There have been no material changes in the reported market risks since the
  end of the most recent fiscal year.
  
  ITEM 4.  CONTROLS AND PROCEDURES
  
  (a)      Evaluation of Disclosure Controls and Procedures.
  
  Our Chief Executive Officer and Chief Financial Officer have reviewed our
  disclosure controls and procedures as of the end of the period covered by this
  report. Based upon this review, the Chief Executive Officer and Chief Financial
  Officer concluded that, as of the end of the period covered by this report, the
  Company's disclosure controls and procedures are adequately designed to ensure
  that information required to be disclosed by the Company in the reports it files
  or submits under the Exchange Act is recorded, processed, summarized and
  reported, within the time period specified in applicable rules and forms.
  
  (b)      Changes in Internal Controls.
  
  There were no significant changes in our internal controls or in other factors
  that could significantly affect these controls during the quarter covered by
  this report or from the end of the reporting period to the date of this Form
  10-Q.
  
  Part II - OTHER INFORMATION
  
  Item 4.  Submission of Matters to a Vote of Security Holders
  
  The Annual Meeting of Stockholders was held on December 4, 2003. The Company
  submitted the following matters to a vote of security holders:
  
  1.   To elect a board of directors to serve until the next Annual Meeting of
       Stockholders and until their successors are duly elected and qualified; and
  
  2.   To amend our 2002 Long Term Incentive and Stock Award Plan to increase the
       number of shares issuable over the term of the plan by 1,500,000 shares to
       3,100,000 shares in the aggregate; and
  
  3.   To amend our 2000 Directors Stock Option Plan to increase the number of
       shares issuable over the term of the plan by 200,000 shares to 950,000
       shares in the aggregate; and
  
  4.   To ratify the appointment of Ernst & Young LLP as our independent auditors
       for fiscal 2004.
  
  The stockholders elected the persons named below, the Company's nominees for
  directors, as directors for the Company, casting votes as shown below:
  ----------------------------------- --------------------- -------------------
           ELECTION OF DIRECTORS              FOR                WITHHELD
  ----------------------------------- --------------------- -------------------
  Irwin D. Simon                                29,921,053           1,445,899
  ----------------------------------- --------------------- -------------------
  Beth L. Bronner                               29,227,951           2,139,001
  ----------------------------------- --------------------- -------------------
  Jack Futterman                                23,900,726           7,466,226
  ----------------------------------- --------------------- -------------------
  Daniel R. Glickman                            30,079,294           1,287,658
  ----------------------------------- --------------------- -------------------
  James S. Gold                                 21,580,456           9,786,496
  ----------------------------------- --------------------- -------------------
  Marina Hahn                                   23,599,333           7,767,619
  ----------------------------------- --------------------- -------------------
  Neil Harrison                                 28,884,675           2,482,277
  ----------------------------------- --------------------- -------------------
  Andrew R. Heyer                               29,612,612           1,754,340
  ----------------------------------- --------------------- -------------------
  Joseph Jimenez                                22,467,308           8,899,644
  ----------------------------------- --------------------- -------------------
  Roger Meltzer                                 20,747,760          10,619,192
  ----------------------------------- --------------------- -------------------
  Larry Zilavy                                  23,583,484           7,783,468
  ----------------------------------- --------------------- -------------------
  
  
                                         17
  
  <PAGE>
  
  The stockholders ratified the amendment to our 2002 Long Term Incentive and
  Stock Award Plan casting 13,472,174 votes in favor, 11,573,732 votes against,
  152,524 abstaining and 6,131,315 not voted.
  
  The stockholders ratified the amendment to our 2000 Directors Stock Option Plan
  casting 13,470,310 votes in favor, 11,551,598 votes against, 177,062 abstaining,
  and 6,131,315 not voted.
  
  The stockholders ratified the appointment of Ernst & Young, LLP casting
  23,895,939 votes in favor, 7,376,448 against, and 94,565 abstaining.
  
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  Reports on Form 8-K
  
  On October 30, 2003, we furnished a report on Form 8-K, reporting on Item 12,
  announcing our earnings for our first quarter ended September 30, 2003.
  
  EXHIBITS
  
  Exhibit Number             Description
  
  31.1                    Certification of Chief Executive Officer pursuant to
                          Rule 13a-14(a) and Rule 15d-14(a) of the Securities
                          Exchange Act, as amended.
  31.2                    Certification of Chief Financial Officer pursuant to
                          Rule 13a-14(a) and Rule 15d-14(a) of the Securities
                          Exchange Act, as amended.
  32.1                    Certification by Chief Executive Officer pursuant to
                          18 U.S.C. Section 1350, as adopted pursuant to Section
                          906 of the Sarbanes-Oxley Act of 2002.
  32.2                    Certification by Chief Financial Officer pursuant to
                          18 U.S.C. Section 1350, as adopted pursuant to Section
                          906 of the Sarbanes-Oxley Act of 2002.
  
                                         18
  
  <PAGE>
                                     SIGNATURES
  
  
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  
  
  
                           THE HAIN CELESTIAL GROUP, INC.
  
  
  
  Date:     February 17, 2004                 /s/ Irwin D. Simon
                                              ----------------------------------
                                              Irwin D. Simon,
                                              Chairman, President and Chief
                                              Executive Officer
  
  
  
  
  
  
  
  Date:     February 17, 2004                 /s/ Ira J. Lamel
                                              ----------------------------------
                                              Ira J. Lamel,
                                              Executive Vice President and
                                              Chief Financial Officer
  
  
  
                                         19
  
  <PAGE>
  
  EXHIBIT 31.1
  
                                    CERTIFICATION
  
  I, Irwin D. Simon, certify that:
  
  1.   I have reviewed this quarterly report on Form 10-Q of The Hain Celestial
       Group, Inc.;
  
  2.   Based on my knowledge, this report does not contain any untrue statement of
       a material fact or omit to state a material fact necessary to make the
       statements made, in light of the circumstances under which such statements
       were made, not misleading with respect to the period covered by this
       report;
  
  3.   Based on my knowledge, the financial statements, and other financial
       information included in this report, fairly present in all material
       respects the financial condition, results of operations and cash flows of
       the registrant as of, and for, the periods presented in this report;
  
  4.   The registrant's other certifying officer and I are responsible for
       establishing and maintaining disclosure controls and procedures (as defined
       in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
  
       (a) Designed such disclosure controls and procedures, or caused such
       disclosure controls and procedures to be designed under our supervision, to
       ensure that material information relating to the registrant, including its
       consolidated subsidiaries, is made known to us by others within those
       entities, particularly during the period in which this report is being
       prepared;
  
       (b) Evaluated the effectiveness of the registrant's disclosure controls and
       procedures and presented in this report our conclusions about the
       effectiveness of the disclosure controls and procedures, as of the end of
       the period covered by this report based on such evaluation; and
  
       (c) Disclosed in this report any change in the registrant's internal
       control over financial reporting that occurred during the registrant's most
       recent fiscal quarter (the registrant's fourth fiscal quarter in the case
       of an annual report) that has materially affected, or is reasonably likely
       to materially affect, the registrant's internal control over financial
       reporting; and
  
  5.   The registrant's other certifying officer and I have disclosed, based on
       our most recent evaluation of internal control over financial reporting, to
       the registrant's auditors and the audit committee of the registrant's board
       of directors (or persons performing the equivalent functions):
  
            (a) All significant deficiencies and material weaknesses in the design
            or operation of internal control over financial reporting which are
            reasonably likely to adversely affect the registrant's ability to
            record, process, summarize and report financial information; and
  
            (b) Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal control over financial reporting.
  
  
  Date: February 17, 2004
  
  /s/ Irwin D. Simon
  -------------------------------------
  Irwin D. Simon
  President and Chief Executive Officer
  
  <PAGE>
  
  
  
  EXHIBIT 31.2
                                    CERTIFICATION
  
  I, Ira J. Lamel, certify that:
  
  1.   I have reviewed this quarterly report on Form 10-Q of The Hain Celestial
       Group, Inc.;
  
  2.   Based on my knowledge, this report does not contain any untrue statement of
       a material fact or omit to state a material fact necessary to make the
       statements made, in light of the circumstances under which such statements
       were made, not misleading with respect to the period covered by this
       report;
  
  3.   Based on my knowledge, the financial statements, and other financial
       information included in this report, fairly present in all material
       respects the financial condition, results of operations and cash flows of
       the registrant as of, and for, the periods presented in this report;
  
  4.   The registrant's other certifying officer and I are responsible for
       establishing and maintaining disclosure controls and procedures (as defined
       in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
  
            (a) Designed such disclosure controls and procedures, or caused such
            disclosure controls and procedures to be designed under our
            supervision, to ensure that material information relating to the
            registrant, including its consolidated subsidiaries, is made known to
            us by others within those entities, particularly during the period in
            which this report is being prepared;
  
            (b) Evaluated the effectiveness of the registrant's disclosure
            controls and procedures and presented in this report our conclusions
            about the effectiveness of the disclosure controls and procedures, as
            of the end of the period covered by this report based on such
            evaluation; and
  
            (c) Disclosed in this report any change in the registrant's internal
            control over financial reporting that occurred during the registrant's
            most recent fiscal quarter (the registrant's fourth fiscal quarter in
            the case of an annual report) that has materially affected, or is
            reasonably likely to materially affect, the registrant's internal
            control over financial reporting; and
  
  5.   The registrant's other certifying officer and I have disclosed, based on
       our most recent evaluation of internal control over financial reporting, to
       the registrant's auditors and the audit committee of the registrant's board
       of directors (or persons performing the equivalent functions):
  
            (a) All significant deficiencies and material weaknesses in the design
            or operation of internal control over financial reporting which are
            reasonably likely to adversely affect the registrant's ability to
            record, process, summarize and report financial information; and
  
            (b) Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal control over financial reporting.
  
  
  Date: February 17, 2004
  
  /s/ Ira J. Lamel
  ----------------------------
  Ira J. Lamel
  Executive Vice President and
  Chief Financial Officer
  
  <PAGE>
  
  
  EXHIBIT 32.1
  
                               CERTIFICATION FURNISHED
                         PURSUANT TO 18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO SECTION 906
                          OF THE SARBANES-OXLEY ACT OF 2002
  
  In connection with the Quarterly Report on Form 10-Q for the period ended
  December 31, 2003 (the "Report") filed by The Hain Celestial Group, Inc. (the
  "Company") with the Securities and Exchange Commission, I, Irwin D. Simon, Chief
  Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as
  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
  
  The Report fully complies with the requirements of Section 13(a) or 15(d) of the
  Securities Exchange Act of 1934; and
  
  The information contained in the Report fairly presents, in all material
  respects, the financial condition and results of operations of the Company.
  
  
  Date: February 17, 2004
  
  
  /s/ Irwin D. Simon
  -------------------------------------
  Irwin D. Simon
  President and Chief Executive Officer
  
  
  A signed original of this written statement required by Section 906 has been
  provided to The Hain Celestial Group, Inc. and will be retained by The Hain
  Celestial Group, Inc. and furnished to the Securities and Exchange Commission or
  its staff upon request.
  
  
  
  
  
  <PAGE>
  
  
  EXHIBIT 32.2
  
                               CERTIFICATION FURNISHED
                         PURSUANT TO 18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO SECTION 906
                          OF THE SARBANES-OXLEY ACT OF 2002
  
  
  In connection with the Quarterly Report on Form 10-Q for the period ended
  December 31, 2003 (the "Report") filed by The Hain Celestial Group, Inc. (the
  "Company") with the Securities and Exchange Commission, I, Ira J. Lamel, Chief
  Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as
  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
  
  The Report fully complies with the requirements of Section 13(a) or 15(d) of the
  Securities Exchange Act of 1934; and
  
  The information contained in the Report fairly presents, in all material
  respects, the financial condition and results of operations of the Company.
  
  
  
  Date: February 17, 2004
  
  
  /s/ Ira J. Lamel
  -----------------------------
  Ira J. Lamel
  Executive Vice President and
  Chief Financial Officer
  
  
  A signed original of this written statement required by Section 906 has been
  provided to The Hain Celestial Group, Inc. and will be retained by The Hain
  Celestial Group, Inc. and furnished to the Securities and Exchange Commission or
  its staff upon request.
metadata_documents: [{"type": "10-Q", "sequence": "1", "filename": "hain10q021704.txt", "description": "FORM 10-Q", "secsgml_size_bytes": 80602}]
metadata_filer: {"company-data": {"conformed-name": "HAIN CELESTIAL GROUP INC", "cik": "0000910406", "assigned-sic": "2000", "irs-number": "223240619", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-22818", "film-number": "04610462"}, "business-address": {"street1": "58 SOUTH SERVICE ROAD", "city": "MELVILLE", "state": "NY", "zip": "11747", "phone": "6317302200"}, "mail-address": {"street1": "58 SOUTH SERVICE ROAD", "city": "MELVILLE", "state": "NY", "zip": "11747"}, "former-company": [{"former-conformed-name": "HAIN FOOD GROUP INC", "date-changed": "19941219"}, {"former-conformed-name": "KINERET ACQUISITION CORP", "date-changed": "19931021"}, {"former-conformed-name": "21ST CENTURY FOOD PRODUCTS CORP", "date-changed": "19930830"}]}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
                                     (Mark One)
             |X| Quarterly Report Pursuant to Section 13 or 15(d) of the
                          Securities Exchange Act of 1934
  
                      For the quarterly period ended: 12/31/03
                                         or
       |_| Transition Report pursuant to Section 13 or 15(d) of the Securities
             Exchange Act of 1934 for the transition period from ______
                                     to _______.
  
                           Commission file number: 0-22818
  
                           THE HAIN CELESTIAL GROUP, INC.
  
               (Exact name of registrant as specified in its charter)
  
    Delaware                                            22-3240619
  -------------------------------                    ---------------------
  (State or other jurisdiction of                     (I.R.S. Employer
   incorporation or organization)                     Identification No.)
  
                   58 South Service Road, Melville, New York 11747
       ----------------------------------------------------------------------
                 (Address of principal executive offices) (Zip Code)
  
         Registrant's telephone number, including area code: (631) 730-2200
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding 12 months (or for such shorter period that the registrant was
  required to file such reports), and (2) has been subject to such filing
  requirement for the past 90 days.
  
                             Yes         X                               No
                                      -------                            -------
  
  Indicate by check mark whether the registrant is an accelerated filer (as
  defined in Rule 12b-2 of the Exchange Act).
  
                             Yes         X                               No
                                      -------                            -------
  
  Indicate the number of shares outstanding of each of the issuer's classes of
  common stock, as of the latest practicable date.
  
  35,370,479 shares of Common Stock $.01 par value, as of February 4, 2004.
  THE HAIN CELESTIAL GROUP, INC.
  
                                        INDEX
  
                            Part I Financial Information
  
  Item 1.  Financial Statements
  
           Consolidated Balance Sheets - December 31, 2003
           (unaudited) and June 30, 2003                                         2
  
           Consolidated Statements of Income -
           Three months and six months ended December 31, 2003
           and 2002 (unaudited)                                                  3
  
           Consolidated Statement of Stockholders' Equity -
           Six months ended December 31, 2003 (unaudited)                        4
  
           Consolidated Statement of Cash Flows -
           Six months ended December 31, 2003 and 2002 (unaudited)               5
  
           Notes to Consolidated Financial Statements                         6-10
  
  Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                               11-16
  
  Item 3.  Quantitative and Qualitative Disclosures
           About Market Risk                                                    17
  
  Item 4.  Controls and Procedures                                              17
  
                             Part II Other Information
  
  Item 4.  Submission of Matters to a Vote of Security Holders                  17
  
  Item 6.  Exhibits and Reports on Form 8-K                                     18
  
           Signatures                                                           19
  
                                         1
  PART I - FINANCIAL INFORMATION
  
  ITEM 1 - FINANCIAL STATEMENTS
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  (In thousands, except per share and share amounts)
  December 31,           June 30, 2003
                                                                             2003
                                                                     ---------------------   --------------------
                                          ASSETS                         (Unaudited)            (Note)
   Current assets:
  Cash and cash equivalents                                               $  23,771              $   10,984
    Accounts receivable, less allowance for doubtful
      accounts of $1,641 and $1,748                                            74,876                  61,215
    Inventories                                                                74,157                  66,444
    Recoverable income taxes, net                                                 978                     223
    Deferred income taxes                                                       3,171                   3,171
    Other current assets                                                        8,779                   7,671
                                                                     ---------------------   --------------------
      Total current assets                                                    185,732                 149,708
  
   Property, plant and equipment, net of accumulated
     depreciation and amortization of $38,705 and $31,555                      68,710                  68,665
   Goodwill                                                                   304,616                 296,508
   Trademarks and other intangible assets, net of
     accumulated amortization of $7,875 and $7,377                             55,819                  55,975
   Other assets                                                                 9,152                  10,692
                                                                     ---------------------   --------------------
     Total assets                                                           $ 624,029               $ 581,548
                                                                     =====================   ====================
  
                           LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:
    Accounts payable and accrued expenses                                  $   59,653               $  55,710
    Current portion of long-term debt                                           6,856                   8,807
    Income taxes payable                                                        9,779                   1,867
                                                                     ---------------------   --------------------
     Total current liabilities                                                 76,288                  66,384
  
   Long-term debt, less current portion                                        58,927                  59,455
   Deferred income taxes                                                       14,912                  14,912
                                                                     ---------------------   --------------------
     Total liabilities                                                        150,127                 140,751
  
   Stockholders' equity:
    Preferred stock - $.01 par value, authorized 5,000,000
     shares, no shares issued                                                       -                       -
    Common stock - $.01 par value, authorized 100,000,000
     shares, issued 35,992,995 and 34,810,722 shares                              360                     348
    Additional paid-in capital                                                374,676                 364,877
    Retained earnings                                                          96,003                  79,089
    Foreign currency translation adjustment                                    11,298                   4,639
                                                                     ---------------------   --------------------
                                                                              482,337                 448,953
   Less: 622,516 and 606,619 shares of
    treasury stock, at cost                                                    (8,435)                 (8,156)
                                                                     ---------------------   --------------------
     Total stockholders' equity                                               473,902                 440,797
                                                                     ---------------------   --------------------
  
     Total liabilities and stockholders' equity                             $ 624,029               $ 581,548
                                                                     =====================   ====================
  Note: The balance sheet at June 30, 2003 has been derived from the audited
  financial statements at that date.
  
  See notes to consolidated financial statements.
  
                                         2
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
  (In thousands, except per share amounts)
  Three Months Ended                          Six Months Ended
                                                         December 31,                               December 31,
                                            ---------------------------------------    ---------------------------------------
                                                  2003                 2002                  2003                 2002
                                            -----------------    ------------------    -----------------    ------------------
                                                         (Unaudited)                                (Unaudited)
  Net sales                                        $ 142,792             $ 123,006            $ 269,845             $ 219,426
  Cost of sales                                       95,693                82,235              185,584               150,857
                                            -----------------    ------------------    -----------------    ------------------
     Gross profit                                     47,099                40,771               84,261                68,569
  
  Selling, general and
   administrative expenses                            30,047                26,975               55,866                47,070
  Restructuring and other
   non-recurring charges                                   -                   440                    -                   440
                                            -----------------    ------------------    -----------------    ------------------
  
     Operating income                                 17,052                13,356               28,395                21,059
  
  Interest expense and other
   expenses, net                                         350                   206                1,141                   376
                                            -----------------    ------------------    -----------------    ------------------
  Income before income taxes                          16,702                13,150               27,254                20,683
  Provision for income taxes                           6,330                 4,964               10,340                 7,808
                                            -----------------    ------------------    -----------------    ------------------
     Net income                                     $ 10,372               $ 8,186               16,914              $ 12,875
                                            =================    ==================    =================    ==================
  
  Net income per share:
     Basic                                            $ 0.30               $  0.24               $ 0.49               $  0.38
                                            =================    ==================    =================    ==================
     Diluted                                          $ 0.29               $  0.24               $ 0.47               $  0.37
                                            =================    ==================    =================    ==================
  
  Weighted average common shares outstanding:
     Basic                                            34,913                33,776               34,567                33,739
                                            =================    ==================    =================    ==================
     Diluted                                          36,135                34,467               35,745                34,425
                                            =================    ==================    =================    ==================
  See notes to consolidated financial statements.
  
                                         3
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
  SIX MONTHS ENDED DECEMBER 31, 2003 (In thousands, except per share and share
  data)
  Common Stock           Additional
                                                                   Amount       Paid-in        Retained         Treasury Stock
                                                      Shares       at $.01       Capital        Earnings       Shares      Amount
                                                 --------------- ----------- --------------- -------------- ----------- ------------
  Balance at June 30, 2003                           34,810,722        $348       $ 364,877       $ 79,089     606,619     $(8,156)
  
  Exercise of stock options                           1,182,273          12           9,776
    and warrants
  
  Purchase of treasury shares                                                                                   15,897        (279)
  
  Non-cash compensation charge                                                           23
  
  Comprehensive income:
    Net income for the period                                                                       16,914
  
    Translation adjustments
  
  Total comprehensive income
                                                 --------------- ----------- --------------- -------------- ----------- ------------
  Balance at December 31, 2003                       35,992,995       $ 360        $374,676       $ 96,003  622,516        $(8,435)
                                                 =============== =========== =============== ============== =========== ============
  Foreign
                                                   Currency
                                                   Translation                  Comprehensive
                                                   Adjustment        Total             Income
                                                ---------------- ------------- ---------------------
  Balance at June 30, 2003                        $ 4,639           $440,797
  
  Exercise of stock options                                            9,788
    and warrants
  
  Purchase of treasury shares                                           (279)
  
  Non-cash compensation charge                                            23
  
  Comprehensive income:
    Net income for the period                                         16,914            $  16,914
  
    Translation adjustments                            6,659           6,659                6,659
                                                                               ---------------------
  
  Total comprehensive income                                                            $  23,573
                                                ---------------- ------------- =====================
  Balance at December 31, 2003                      $ 11,298        $473,902
                                                ================ =============
  See notes to consolidated financial statements.
  
                                         4
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
  (In thousands)
  Six Months Ended
                                                                                        December 31,
                                                                          ------------------------------------------
                                                                                2003                    2002
                                                                          ------------------     -------------------
  CASH FLOWS FROM OPERATING ACTIVITIES                                                   (Unaudited)
  Net income                                                                     $  16,914               $ 12,875
  Adjustments to reconcile net income to net cash
   provided by operating activities:
       Depreciation and amortization                                                 5,331                  4,163
       Provision for doubtful accounts                                               (115)                   (138)
  
     Increase (decrease) in cash attributable to changes in
          operating assets and liabilities, net of amounts
          applicable to acquired businesses:
            Accounts receivable                                                    (12,641)                (7,740)
            Inventories                                                             (7,126)                 3,100
            Other current assets                                                    (1,364)                (1,536)
            Other assets                                                             1,868                 (1,950)
            Accounts payable and accrued expenses                                    1,837                 (4,191)
         Accrued restructuring and non-recurring charges                                 -                 (1,046)
            Income taxes, net                                                        7,912                  8,695
                                                                          ------------------     -------------------
  
            Net cash provided by operating activities                               12,616                 12,232
                                                                          ------------------     -------------------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                                               (2,293)                (4,262)
  Acquisitions of businesses, net of cash acquired                                        -               (44,659)
                                                                          ------------------     -------------------
            Net cash used in investing activities                                   (2,293)               (48,921)
                                                                          ------------------     -------------------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
  (Repayments) proceeds from bank revolving
    credit facility, net                                                            (1,650)                44,300
  Payments on economic development revenue bonds                                      (258)                  (250)
  Purchase of treasury stock                                                          (279)                (2,579)
  Proceeds from exercise of warrants and options, net of
    related expenses                                                                 9,788                      4
  (Repayments) proceeds of other long-term debt, net                                (2,352)                   589
                                                                          ------------------     -------------------
  
            Net cash provided by financing activities                                5,249                 42,064
                                                                          ------------------     -------------------
  
  Effect of exchange rate changes on cash                                           (2,758)                  (240)
                                                                          ------------------     -------------------
  Net increase in cash and cash equivalents                                         12,787                  5,135
  Cash and cash equivalents at beginning of period                                  10,984                  7,538
                                                                          ------------------     -------------------
  
  Cash and cash equivalents at end of period                                     $  23,771              $  12,673
                                                                          ==================     ===================
  See notes to consolidated financial statements.
  
                                         5
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  
  1.       GENERAL
  
       The Hain Celestial Group, Inc. (herein referred to as "we","us" and "our")
  is a natural, organic, specialty and snack food company. We are a leader in many
  of the top natural food categories, with such well-known natural food brands as
  Celestial Seasonings(R) teas, Hain Pure Foods(R), Westbrae(R), Westsoy(R), Rice
  Dream(R), Soy Dream(R), Imagine(R), Little Bear Organic Foods(R), Bearitos(R),
  Arrowhead Mills(R), Health Valley(R), Breadshop(R), Casbah(R), Garden of
  Eatin'(R), Walnut Acres Certified Organic(R), Terra Chips(R), Harry's Premium
  Snacks(R), Boston's(R), Yves Veggie Cuisine(R), DeBoles(R), Earth's Best(R),
  Nile Spice(R), Lima(R), Biomarche(R) and Grains Noirs(R). Our principal
  speciality product lines include Hollywood(R) cooking oils, Estee(R) sugar-free
  products, Kineret(R) kosher foods, Boston Better Snacks(R), and Alba Foods(R).
  
       We operate in one business segment: the sale of natural, organic and other
  food and beverage products. In our 2003 fiscal year, approximately 42% of our
  revenues were derived from products that were manufactured within our own
  facilities with 58% produced by various co-packers.
  
       Certain reclassifications have been made to our previous year's
  consolidated financial statements to conform them to the current year's
  presentation.
  
       All amounts in our consolidated financial statements have been rounded to
  the nearest thousand dollars, except share and per share amounts.
  
  2.       BASIS OF PRESENTATION
  
       Our consolidated financial statements have been prepared in accordance with
  accounting principles generally accepted in the United States for interim
  financial information and with the instructions to Form 10-Q and Article 10 of
  Regulation S-X. Accordingly, they do not include all of the information and
  footnotes required by accounting principles generally accepted in the United
  States. In the opinion of management, all adjustments (including normal
  recurring accruals) considered necessary for a fair presentation have been
  included. Operating results for the three months and six months ended December
  31, 2003 are not necessarily indicative of the results that may be expected for
  the year ending June 30, 2004. Please refer to the footnotes to our consolidated
  financial statements as of June 30, 2003 and for the year then ended included in
  our Annual Report on Form 10-K for information not included in these condensed
  footnotes.
  
  3.       EARNINGS PER SHARE
  
       We report basic and diluted earnings per share in accordance with Statement
  of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" ("SFAS
  No. 128"). Basic earnings per share excludes the dilutive effects of options and
  warrants. Diluted earnings per share includes only the dilutive effects of
  common stock equivalents such as stock options and warrants.
  
                                         6
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
           The following table sets forth the computation of basic and diluted
  earnings per share pursuant to SFAS No. 128:
  Three Months Ended                Six Months Ended
                                                                      December 31,                     December 31,
                                                              ------------------------------ ---------------------------------
  
                                                                   2003           2002            2003              2002
                                                              --------------- -------------- ---------------- ----------------
  Numerator:
  Net income                                                        $ 10,372        $ 8,186         $ 16,914         $ 12,875
                                                              =============== ============== ================ ================
  Denominator (in thousands):
  Denominator for basic earnings per
   share - weighted average shares
   outstanding during the period                                      34,913         33,776           34,567           33,739
                                                              --------------- -------------- ---------------- ----------------
  
  Effect of dilutive securities:
   Stock options                                                       1,072            535            1,018              529
   Warrants                                                              150            156              160              157
                                                              --------------- -------------- ---------------- ----------------
                                                                       1,222            691            1,178              686
                                                              --------------- -------------- ---------------- ----------------
  Denominator for diluted earnings per
   share - adjusted weighted average
   shares and assumed conversions                                     36,135         34,467           35,745           34,425
                                                              =============== ============== ================ ================
  Basic net income per share                                          $ 0.30         $ 0.24           $ 0.49           $ 0.38
                                                              =============== ============== ================ ================
  Diluted net income per share                                        $ 0.29         $ 0.24           $ 0.47           $ 0.37
                                                              =============== ============== ================ ================
  4.       INVENTORIES
  
           Inventories consisted of the following:
  December 31,                June 30,
                                                                          2003                      2003
                                                                ------------------------ -------------------------
  Finished goods                                                   $47,019                   $43,022
         Raw materials, work-in-progress
           and packaging                                                   27,138                    23,422
                                                                ------------------------ -------------------------
                                                                          $74,157                   $66,444
                                                                ======================== =========================
  7
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
  5.     PROPERTY, PLANT AND EQUIPMENT
  
         Property, plant and equipment consisted of the following:
  December 31,               June 30,
                                                                         2003                     2003
                                                                ----------------------- -------------------------
  Land                                                            $  7,053                 $ 6,913
         Building and improvements                                         26,355                  24,448
         Machinery and equipment                                           66,259                  61,949
         Furniture and fixtures                                             2,425                   2,383
         Leasehold improvements                                             1,548                   1,457
         Construction in progress                                           3,775                   3,070
                                                                ----------------------- -------------------------
                                                                          107,415                 100,220
         Less: Accumulated depreciation
                 and amortization                                          38,705                  31,555
                                                                ----------------------- -------------------------
                                                                         $ 68,710                $ 68,665
                                                                ======================= =========================
  6.       ACQUISITIONS
  
       On June 17, 2003, we acquired 100% of the stock of privately-held Acirca,
  Inc. ("Acirca"), the owner of the Walnut Acres Certified Organic(R) brand of
  organic fruit juices, soups, pasta sauces and salsas. Since June 2000, the
  financial and investment group Acirca has expanded Walnut Acres, its premier
  certified organic food and beverage brand, by integrating a series of organic
  brands including Mountain Sun(R), ShariAnn's(R), Millina's Finest(R), and Frutti
  di Bosco(R) into its Walnut Acres flagship. The acquisition of these product
  lines allows us to add natural and organic juices and sauces to our product
  offerings, and enhance our offerings of soups and salsas. The purchase price
  consisted of approximately $9 million in cash, 134,797 shares of our common
  stock valued at $2.2 million, plus the assumption of certain liabilities. At
  December 31, 2003, goodwill from this transaction was estimated to be $15.2
  million.
  
       On December 2, 2002, we acquired substantially all of the assets and
  assumed certain liabilities of privately-held Imagine Foods, Inc. ("Imagine") in
  the United States and the United Kingdom. Imagine is a non-dairy beverage
  company specializing in aseptic and refrigerated rice and soy milks, organic
  aseptic soups and broths, and organic frozen desserts in the U.S., Canada, and
  Europe. The acquisition of these product lines is expected to enhance our
  existing market positions in non-dairy beverages and soups while adding frozen
  dessert products to our offerings to customers. The purchase price consisted of
  approximately $44.2 million in cash, 532,765 shares of our common stock valued
  at $7 million, plus the assumption of certain liabilities. At December 31, 2003,
  goodwill from this transaction was valued at $37.3 million, trademarks and other
  non-amortizable intangibles were $15.7 million, and patents and other
  amortizable intangibles were valued at $1.2 million.
  
                                         8
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
       The following table summarizes the estimated fair values of assets acquired
  and liabilities assumed of Acirca and Imagine at the dates of the acquisitions:
  
                    Current assets                           $17,714
                    Property and equipment                     2,409
                                                     --------------------
  
                    Total assets                              20,123
                    Liabilities assumed                       14,937
                                                     --------------------
                    Net assets acquired                      $ 5,186
                                                     ====================
  
       The balance sheet at December 31, 2003, includes the assets acquired and
  liabilities assumed valued at fair market value at the date of purchase. We have
  completed all of the procedures required to finalize the purchase price
  allocation for Imagine, while such procedures required for Acirca are in the
  early stages and are expected to be completed during 2004.
  
       Our results of operations for the three and six months ended December 31,
  2003 include the results of the above described acquisitions for the complete
  period. The following table presents information about sales and net income had
  the operations of the acquired businesses been combined with our business as of
  the first day of each of the periods shown. This information has not been
  adjusted to reflect any changes in the operations of these businesses subsequent
  to their acquisition by us. Changes in operations of these acquired businesses
  include, but are not limited to, integration of systems and personnel,
  discontinuation of products (including discontinuation resulting from the
  integration of acquired and existing brands with similar products), changes in
  trade practices, application of our credit policies, changes in manufacturing
  processes or locations, and changes in marketing and advertising programs. Had
  any of these changes been implemented by the former management of the businesses
  acquired prior to acquisition by us, the sales and net income information might
  have been materially different than the actual results achieved and from the pro
  forma information provided below.
  Three Months Ended               Six Months Ended
                                                        December 31, 2002              December 31, 2002
                                                 ================================ =============================
  Net sales                                                 $ 144,010                        $ 267,140
                                                 ================================ =============================
  Net income                                                 $  5,882                         $  9,109
                                                 ================================ =============================
  Income per share:
    Basic                                                     $  0.17                          $  0.27
                                                 ================================ =============================
    Diluted                                                   $  0.17                          $  0.26
                                                 ================================ =============================
  Weighted average shares:
    Basic                                                    $ 34,131                         $ 34,318
                                                 ================================ =============================
    Diluted                                                  $ 34,957                         $ 35,004
                                                 ================================ =============================
  In management's opinion, the unaudited pro forma results of operations are
  not indicative of the actual results that would have occurred had the Acirca and
  Imagine acquisitions been consummated at the beginning of the periods presented
  or of future operations of the combined companies under our management.
  
       On May 14, 2003, our subsidiary in Belgium acquired Grains Noirs, N.V., a
  Belgian producer and marketer of fresh prepared organic appetizers, salads,
  
                                         9
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
  sandwiches and other full-plated dishes. The purchase price paid was
  approximately $2.2 million in cash. The net assets acquired, as well as the
  sales and results of operations of Grains Noirs, are not material and,
  therefore, have not been included in the detailed information about our
  acquisitions.
  
  7.       CREDIT FACILITY
  
       We have a $240 million credit facility with a group of banks (the "Credit
  Facility") which provides us with a $145 million revolving credit facility (the
  "Revolving Credit Facility") through March 29, 2005 and a $95 million 364-day
  facility (the "364-Day Facility") through March 25, 2004. The Credit Facility is
  unsecured but is guaranteed by all of our current and future direct and indirect
  domestic subsidiaries. We are required to comply with customary affirmative and
  negative covenants for facilities of this nature. Revolving credit loans under
  this facility bear interest at a base rate (greater of the applicable prime rate
  or Federal Funds Rate plus applicable margin) or, at our option, the reserve
  adjusted LIBOR rate plus an applicable margin. As of December 31, 2003, $52.2
  million was borrowed under the Revolving Credit Facility with interest at 2.5%.
  At December 31, 2003, there were no borrowings under the 364-Day Facility.
  
  8.       STOCK-BASED COMPENSATION
  
       The Company accounts for its stock-based compensation plans using the
  intrinsic value method under APB Opinion No. 25, "Accounting for Stock Issued to
  Employees" ("APB 25") and related Interpretations. Under APB 25, when the
  exercise price of our employee stock options at least equals the market price of
  the underlying stock on the date of grant, no compensation expense is
  recognized.
  
       If compensation cost for the Company's stock-based compensation plans had
  been determined based on the fair value at the grant dates consistent with the
  method prescribed by SFAS No. 123, "Accounting For Stock-Based Compensation",
  net earnings and earnings per share for the three months and six months ended
  December 31, 2003 and 2002 would have been the pro forma amounts that follow:
  Three Months Ended                      Six Months Ended
                                                                  December 31,                           December 31,
                                                        -----------------    -------------     ---------------    --------------
                                                              2003               2002               2003              2002
                                                        -----------------    -------------     ---------------    --------------
  Net income, as reported                                        $10,372         $  8,186             $16,914          $ 12,875
  Non-cash compensation charge, net of related tax
  effects                                                              7                7                  14                14
  
  Stock-based employee compensation expense
  determined under fair value method, net of related
  tax effects                                                      (716)          (2,374)             (1,937)           (4,815)
                                                        -----------------    -------------     ---------------    --------------
  
  Pro forma net income                                          $  9,663         $  5,819           $  14,991          $  8,074
                                                        =================    =============     ===============    ==============
  
  Basic net income per share:
      As reported                                            $   0.30          $   0.24          $    0.49           $   0.38
                                                             ===========       ==========        ============        ========
      Pro forma                                              $   0.28          $   0.17          $    0.43           $   0.24
                                                             ===========       ==========        ============        ========
  
  Diluted net income per share:
      As reported                                            $   0.29         $   0.24           $    0.47           $   0.37
                                                             ===========      ===========        ============        ========
      Pro forma                                              $   0.27         $   0.17           $    0.42           $   0.23
                                                             ===========      ===========        ============        ========
  10
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS
  
  Overview
  
       We manufacture, market, distribute and sell natural, organic, specialty and
  snack food products under brand names which are sold as "better-for-you"
  products. We are a leader in many of the top natural food categories, with such
  well-known natural food brands as Celestial Seasonings(R) teas, Hain Pure
  Foods(R), Westbrae(R), Westsoy(R), Arrowhead Mills(R), Health Valley(R),
  Breadshop's(R), Casbah(R), Garden of Eatin'(R), Rice Dream(R), Soy Dream(R),
  Imagine(R), Walnut Acres Certified Organic(R), Little Bear Organic Foods(R),
  Bearitos(R), Terra Chips(R), Harry's Premium Snacks(R), Boston's(R),
  Gaston's(R), Yves Veggie Cuisine(R), DeBoles(R), Earth's Best(R), Nile Spice(R),
  Lima(R), Biomarche(R) and Grains Noirs(R). Our principal specialty product lines
  include Hollywood(R) cooking oils, Estee(R) sugar-free products, Kineret(R)
  kosher foods, Boston Better Snacks(R), and Alba Foods(R). Our website can be
  found at www.hain-celestial.com.
  
       Our products are sold primarily to specialty and natural food distributors,
  supermarkets, natural food stores, and other retail classes of trade including
  mass-market stores, drug stores, food service channels and club stores.
  
       Our brand names are well recognized in the various market categories they
  serve. We have acquired numerous brands and we will seek future growth through
  internal expansion as well as the acquisition of additional complementary
  brands.
  
       Our overall mission is to be a leading marketer and seller of natural,
  organic, beverage, snack and specialty food products by integrating all of our
  brands under one management team and employing a uniform marketing, sales and
  distribution program. Our business strategy is to capitalize on the brand equity
  and the distribution previously achieved by each of our acquired product lines
  and to enhance revenues by strategic introductions of new product lines that
  complement existing products.
  
  Results of Operations
  
  Three months ended December 31, 2003
  
       Net sales for the three months ended December 31, 2003 were $142.8 million,
  an increase of $19.8 million or 16.1% over net sales of $123.0 million in the
  December 31, 2002 quarter. Our Canadian business grew 14.9%, our European
  business grew 68.2% and our U.S. business grew 13.5%. These increases came
  principally from volume increases, including increased volume from brands owned
  for more than one year as well as the volume added to each geographic area by
  the addition of the Imagine Foods, Walnut Acres and Grains Noirs brands to our
  portfolio. Net sales were negatively impacted by the continuing strike of
  grocery workers in Southern California as well as the transition to a new
  supplier by a major natural foods retailer, while net sales benefited from the
  movement of foreign currencies against the U.S. dollar.
  
       Gross profit for the three months ended December 31, 2003 was 33.0% of net
  sales as compared to 33.1% of net sales in the December 31, 2002 quarter. The
  0.1% decrease in gross profit percentage was principally due to higher consumer
  spending and promotional allowances offset by lower delivery and warehousing
  expenses. We spent more in promotional allowances than our usual rate because we
  introduced the Carb Fit line of low carbohydrate products and we expanded our
  refrigerated non-dairy beverages during the second quarter this year. In
  addition, we spent approximately $1 million more in consumer coupons in this
  
                                         11
  year's second quarter as compared to the prior year's second quarter. These
  promotional allowances and consumer spending are charged against sales under
  current accounting rules and, therefore, have the effect of reducing gross
  profit as a percentage of sales.
  
       Selling, general and administrative expenses increased by $3.1 million to
  $30.0 million for the three months ended December 31, 2003 as compared to $27.0
  million in the December 31, 2002 quarter. Such expenses as a percentage of net
  sales amounted to 21.0% for the three months ended December 31, 2003 compared
  with 21.9% in the December 31, 2002 quarter. As a percentage of sales, selling,
  general, and administrative expenses decreased while the overall dollars
  increased. The increase in dollars was a result of increased advertising and
  marketing expenses needed to support our increased sales, while as a percentage
  of sales our selling costs decreased reflecting synergies from our acquired
  businesses.
  
       There were no restructuring and other non-recurring charges for the quarter
  ended December 31, 2003. During the prior year quarter ended December 31, 2002,
  we recorded approximately $0.4 million of restructuring and other non-recurring
  charges related to the sale of our Health Valley facility.
  
       Operating income was $17.1 million in the three months ended December 31,
  2003 compared to $13.4 million in the December 31, 2002 quarter. Operating
  income as a percentage of net sales was 11.9% in the December 31, 2003 quarter,
  compared with 10.9% in the December 31, 2002 quarter. The dollar increase
  resulted principally from higher sales and gross profits, while the percentage
  increase resulted principally from lower selling, general and administrative
  expenses as a percentage of sales.
  
       Interest and other expenses amounted to $0.4 million for the three months
  ended December 31, 2003 compared to $0.2 million for the three months ended
  December 31, 2002. We incurred higher interest expense in the 2003 quarter
  resulting from borrowings for acquisitions which were outstanding for a full
  quarter this year.
  
       Income before income taxes for the three months ended December 31, 2003
  amounted to $16.7 million compared to $13.2 million in the comparable period of
  the prior year. This increase was attributable to the increase in operating
  income.
  
       Our effective income tax rate approximated 38% of pre-tax income for both
  the three months ended December 31, 2003 and 2002. We expect our effective tax
  rate to approximate this rate during the remainder of fiscal 2004.
  
       Net income for the three months ended December 31, 2003 was $10.4 million
  compared to $8.2 million in the December 31, 2002 quarter. The increase of $2.2
  million in earnings was primarily attributable to the aforementioned increase in
  income before income taxes.
  
  Six Months Ended December 31, 2003
  
       Net sales for the six months ended December 31, 2003 were $269.8 million,
  an increase of $50.4 million or 23.0% over net sales of $219.4 million for the
  six months ended December 31, 2002. Our Canadian business grew 19.2%, our
  European business grew 63.7% and our U.S. business grew 21.6%. These increases
  came principally from volume increases, including increased volume from brands
  owned for more than one year as well as the volume added to each geographic area
  by the addition of the Imagine Foods, Walnut Acres and Grains Noirs brands to
  our
  
                                         12
  portfolio. During the second quarter ended December 31, 2003, net sales were
  negatively impacted by the continuing strike of grocery workers in Southern
  California as well as the transition to a new supplier by a major natural foods
  retailer, while net sales benefited from the movement of foreign currencies
  against the U.S. dollar.
  
       Gross profit for both the six months ended December 31, 2003 and the six
  months ended December 31, 2002 was 31.2%. Gross profit was flat due to higher
  consumer spending and promotional allowances in our second quarter offset by
  lower delivery and warehousing expenses. During the second quarter ended
  December 31, 2003, we spent more in promotional allowances than our normal rate
  because we introduced the Carb Fit line of low carbohydrate products and we
  expanded our refrigerated non-dairy beverages. In addition, we spent
  approximately $1 million more in consumer coupons in this year's second quarter
  as compared to the prior year's quarter. These promotional allowances and
  consumer spending are charged against sales under current accounting rules and,
  therefore, have the effect of reducing gross profits as a percentage of sales.
  
       Selling, general and administrative expenses increased by $8.8 million to
  $55.9 as compared to $47.1 million for the six months ended December 31, 2002.
  Such expenses as a percentage of net sales amounted to 20.7% for the six months
  ended December 31, 2003 compared with 21.5% for the six months ended December
  31, 2002. As a percentage of sales, selling, general and administrative expenses
  decreased while the dollars increased. The overall increase in dollars is a
  result of increased advertising and marketing spending needed to support our
  increased sales, while as a percentage of sales our selling costs decreased
  reflecting synergies from our acquired businesses.
  
       There were no restructuring and other non-recurring charges for the six
  months ended December 31, 2003. During the six months ended December 31, 2002,
  we recorded approximately $0.4 million of additional restructuring and other
  non-recurring charges related to the sale of our Health Valley facility.
  
       Operating income was $28.4 million in the six months ended December 31,
  2003 compared to $21.1 million for the six months ended December 31, 2002.
  Operating income as a percentage of net sales was 10.5% for the six months ended
  December 31, 2003, compared with 9.6% for the six months ended December 31,
  2002. The dollar increase resulted principally from higher sales and gross
  profits, while the percentage increases resulted principally from lower selling,
  general and administrative expenses as a percentage of sales.
  
       Interest and other expenses amounted to $1.1 million for the six months
  ended December 31, 2003 compared to $0.4 million for the six months ended
  December 31, 2002. We incurred higher interest expense for the six months ended
  December 31, 2003 resulting from borrowing for acquisitions which are
  outstanding for the full six months this year.
  
           Income before income taxes for the six months ended December 31 2003
  amounted to $27.3 million compared to $20.7 million for the six months ended
  December 31, 2002. This increase was attributable to the increase in operating
  income offset by the increase in interest expenses and other expenses, net.
  
       Our effective income tax rate approximated 38% of pre-tax income for both
  the six months ended December 31, 2003 and 2002.
  
       Net income for the six months ended December 31, 2003 was $16.9 million
  compared to $12.9 million for the six months ended December 31, 2002. The
  increase of $4.0 million in earnings was primarily attributable to the
  
                                         13
  aforementioned increase in income before income taxes.
  
  Liquidity and Capital Resources
  
       We finance our operations and growth primarily with the cash flows we
  generate from our operations and from borrowings under our credit facility.
  
       We have available to us a $240 million credit facility (the "Credit
  Facility") which provides us with a $145 million revolving credit facility (the
  "Revolving Credit Facility") through March 29, 2005 and a $95 million 364-Day
  facility (the "364-Day Facility") through March 25, 2004. The Credit Facility is
  unsecured but is guaranteed by all of our direct and indirect domestic
  subsidiaries. We are required to comply with customary affirmative and negative
  covenants for facilities of this nature. As of December 31, 2003 we had $52.2
  million outstanding under the Revolving Credit Facility.
  
       This access to capital provides us with flexible working capital in the
  ordinary course of business, the opportunity to grow our business through
  acquisitions and develop our existing infrastructure through capital investment.
  
       Net cash provided by operations was $12.6 and $12.2 million for the six
  months ended December 31, 2003 and 2002, respectively. Our working capital and
  current ratio was $109.4 million and 2.4 to 1, respectively, at December 31,
  2003 compared with $83.3 million and 2.3 to 1 respectively, at June 30, 2003.
  The increase in working capital resulted principally from the net income earned
  during the six months ended December 31, 2003.
  
       Net cash provided by financing activities was $5.2 million and $42.1
  million for the six months ended December 31, 2003 and 2002, respectively. In
  the December 2003 period, we received proceeds from the exercise of stock
  options and warrants, which were offset by the payment of debt. In the December
  2002, period borrowings were offset by acquisitions of shares of our common
  stock in open market purchases as part of our buy back program.
  
       Obligations for all debt instruments, capital and operating leases and
  other contractual obligations are as follows:
  Payments Due by Period
                                     ---------------------------------------------------------------------------------------
                                                                                                             More than 5
                                          Total       Less than 1 year     1 - 3 years        3-5 Years          years
                                     ---------------- ----------------- ----------------- ---------------- -----------------
  Debt instruments                         $  63,103         $   5,237         $  55,159         $  2,249
                                                                                                                      $ 458
  Capital lease
     obligations                               2,680             1,619             1,049               12                 -
  
  Operating leases                            18,344             2,988             5,641            3,623             6,092
                                     ---------------- ----------------- ----------------- ---------------- -----------------
  Total contractual cash                   $  84,127         $   9,844         $  61,849         $  5,884
     obligations                                                                                                     $6,550
                                     ================ ================= ================= ================ =================
  We believe that cash on hand of $23.8 million at December 31, 2003,
  projected remaining fiscal 2004 cash flows from operations, and availability
  under our Credit Facility are sufficient to fund our working capital needs,
  anticipated capital expenditures of approximately $8 million for the remainder
  of fiscal 2004, and the $9.8 million of debt and lease obligations described in
  the table above. We currently invest our cash on hand in highly liquid
  short-term investments yielding approximately 1% interest.
  
                                         14
  Critical Accounting Policies
  
       Our financial statements are prepared in accordance with accounting
  principles generally accepted in the United States. The accounting principles we
  use require us to make estimates and assumptions that affect the reported
  amounts of assets and liabilities at the date of the financial statements and
  amounts of income and expenses during the reporting periods presented. We
  believe in the quality and reasonableness of our critical accounting policies;
  however, it is likely that materially different amounts would be reported under
  different conditions or using assumptions different from those that we have
  consistently applied. We believe our critical accounting policies are as
  follows, including our methodology for estimates made and assumptions used:
  
  Valuation of Accounts and Chargebacks Receivables
  
       We perform ongoing credit evaluations on existing and new customers daily.
  We apply reserves for delinquent or uncollectible trade receivables based on a
  specific identification methodology and also apply an additional reserve based
  on the experience we have with our trade receivables aging categories. Credit
  losses have been within our expectations over the last few years. While two of
  our customers represent approximately 25% of our trade receivable balance on an
  ongoing basis, we believe there is no credit exposure at this time.
  
       Based on cash collection history and other statistical analysis, we
  estimate the amount of unauthorized deductions that our customers have taken to
  be repaid and collectible in the near future in the form of a chargeback
  receivable. While our estimate of this receivable balance could be different had
  we used different assumptions and judgments, historically our cash collections
  of this type of receivable have generally been within our expectations. Our
  chargebacks receivable balance at December 31, 2003 was $5.9 million as compared
  to $6 million at June 30, 2003.
  
       There can be no assurance that we would have the same experience with our
  receivables during different economic conditions, or with changes in business
  conditions, such as consolidation within the food industry and/or a change in
  the way we market and sell our products.
  
  Inventory
  
       Our inventory is valued at the lower of cost or market. Cost has been
  derived principally using standard costs utilizing the first-in, first-out
  method. We provide write-downs for finished goods expected to become
  non-saleable due to age and specifically identify and reserve for slow moving or
  obsolete raw ingredients and packaging.
  
  Property, Plant and Equipment
  
       Our property, plant and equipment is carried at cost and depreciated or
  amortized on a straight-line basis over the lesser of the estimated useful lives
  or lease life, whichever is shorter. We believe the asset lives assigned to our
  property, plant and equipment are within ranges/guidelines generally used in
  food manufacturing and distribution businesses. Our manufacturing plants and
  distribution centers, and their related assets, are periodically reviewed to
  determine if any impairment exists by analyzing underlying cash flow
  projections. At this time, we believe no impairment exists on the carrying value
  of such assets. Ordinary repairs and maintenance are expensed as incurred.
  
                                         15
  Intangibles
  
       Goodwill is no longer amortized and the value of an identifiable intangible
  asset is amortized over its useful life unless the asset is determined to have
  an indefinite useful life. The carrying values of goodwill and other intangible
  assets with indefinite useful lives are tested annually for impairment.
  
  Revenue Recognition and Sales Incentives
  
       Sales are recognized upon the shipment of finished goods to customers and
  are reported net of sales incentives. Allowances for cash discounts and returns
  are recorded in the period in which the related sale is recognized. Shipping and
  handling costs are included as a component of cost of sales.
  
  Seasonality
  
       Our tea business consists primarily of manufacturing and marketing hot tea
  products and, as a result, its quarterly results of operations reflect seasonal
  trends resulting from increased demand for its hot tea products in the cooler
  months of the year. This is also true for our soups and hot cereals businesses,
  but to a lesser extent. Quarterly fluctuations in our sales volume and operating
  results are due to a number of factors relating to our business, including the
  timing of trade promotions, advertising and consumer promotions and other
  factors, such as seasonality, abnormal and inclement weather patterns and
  unanticipated increases in labor, commodity, energy, insurance or other
  operating costs. The impact on sales volume and operating results, due to the
  timing and extent of these factors, can significantly impact our business. For
  these reasons, you should not rely on our quarterly operating results as
  indications of future performance. In some future periods, our operating results
  may fall below the expectations of securities analysts and investors, which
  could harm our business.
  
  Inflation
  
       The Company does not believe that inflation had a significant impact on the
  Company's results of operations for the periods presented.
  
  Note Regarding Forward Looking Information
  
       Certain statements contained in this Quarterly Report constitute
  "forward-looking statements" within the meaning of Section 27A of the Securities
  Act of 1934 and Sections 21E of the Securities Exchange Act of 1934. Such
  forward-looking statements involve known and unknown risks, uncertainties and
  other factors that may cause the actual results, levels of activity, performance
  or achievements of the Company, or industry results, to be materially different
  from any future results, levels of activity, performance or achievements
  expressed or implied by such forward-looking statements. Such factors include,
  among others, the following: general economic and business conditions; the
  ability of the Company to implement its business and acquisition strategy; the
  ability to effectively integrate its acquisitions; the ability of the Company to
  obtain financing for general corporate purposes; competition; availability of
  key personnel; and changes in, or the failure to comply with government
  regulations. As a result of the foregoing and other factors, no assurance can be
  given as to the future results, levels of activity and achievements and neither
  the Company nor any person assumes responsibility for the accuracy and
  completeness of these statements.
  
                                         16
  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
       There have been no material changes in the reported market risks since the
  end of the most recent fiscal year.
  
  ITEM 4.  CONTROLS AND PROCEDURES
  
  (a)      Evaluation of Disclosure Controls and Procedures.
  
  Our Chief Executive Officer and Chief Financial Officer have reviewed our
  disclosure controls and procedures as of the end of the period covered by this
  report. Based upon this review, the Chief Executive Officer and Chief Financial
  Officer concluded that, as of the end of the period covered by this report, the
  Company's disclosure controls and procedures are adequately designed to ensure
  that information required to be disclosed by the Company in the reports it files
  or submits under the Exchange Act is recorded, processed, summarized and
  reported, within the time period specified in applicable rules and forms.
  
  (b)      Changes in Internal Controls.
  
  There were no significant changes in our internal controls or in other factors
  that could significantly affect these controls during the quarter covered by
  this report or from the end of the reporting period to the date of this Form
  10-Q.
  
  Part II - OTHER INFORMATION
  
  Item 4.  Submission of Matters to a Vote of Security Holders
  
  The Annual Meeting of Stockholders was held on December 4, 2003. The Company
  submitted the following matters to a vote of security holders:
  
  1.   To elect a board of directors to serve until the next Annual Meeting of
       Stockholders and until their successors are duly elected and qualified; and
  
  2.   To amend our 2002 Long Term Incentive and Stock Award Plan to increase the
       number of shares issuable over the term of the plan by 1,500,000 shares to
       3,100,000 shares in the aggregate; and
  
  3.   To amend our 2000 Directors Stock Option Plan to increase the number of
       shares issuable over the term of the plan by 200,000 shares to 950,000
       shares in the aggregate; and
  
  4.   To ratify the appointment of Ernst & Young LLP as our independent auditors
       for fiscal 2004.
  
  The stockholders elected the persons named below, the Company's nominees for
  directors, as directors for the Company, casting votes as shown below:
  ----------------------------------- --------------------- -------------------
           ELECTION OF DIRECTORS              FOR                WITHHELD
  ----------------------------------- --------------------- -------------------
  Irwin D. Simon                                29,921,053           1,445,899
  ----------------------------------- --------------------- -------------------
  Beth L. Bronner                               29,227,951           2,139,001
  ----------------------------------- --------------------- -------------------
  Jack Futterman                                23,900,726           7,466,226
  ----------------------------------- --------------------- -------------------
  Daniel R. Glickman                            30,079,294           1,287,658
  ----------------------------------- --------------------- -------------------
  James S. Gold                                 21,580,456           9,786,496
  ----------------------------------- --------------------- -------------------
  Marina Hahn                                   23,599,333           7,767,619
  ----------------------------------- --------------------- -------------------
  Neil Harrison                                 28,884,675           2,482,277
  ----------------------------------- --------------------- -------------------
  Andrew R. Heyer                               29,612,612           1,754,340
  ----------------------------------- --------------------- -------------------
  Joseph Jimenez                                22,467,308           8,899,644
  ----------------------------------- --------------------- -------------------
  Roger Meltzer                                 20,747,760          10,619,192
  ----------------------------------- --------------------- -------------------
  Larry Zilavy                                  23,583,484           7,783,468
  ----------------------------------- --------------------- -------------------
  
                                         17
  The stockholders ratified the amendment to our 2002 Long Term Incentive and
  Stock Award Plan casting 13,472,174 votes in favor, 11,573,732 votes against,
  152,524 abstaining and 6,131,315 not voted.
  
  The stockholders ratified the amendment to our 2000 Directors Stock Option Plan
  casting 13,470,310 votes in favor, 11,551,598 votes against, 177,062 abstaining,
  and 6,131,315 not voted.
  
  The stockholders ratified the appointment of Ernst & Young, LLP casting
  23,895,939 votes in favor, 7,376,448 against, and 94,565 abstaining.
  
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  Reports on Form 8-K
  
  On October 30, 2003, we furnished a report on Form 8-K, reporting on Item 12,
  announcing our earnings for our first quarter ended September 30, 2003.
  
  EXHIBITS
  
  Exhibit Number             Description
  
  31.1                    Certification of Chief Executive Officer pursuant to
                          Rule 13a-14(a) and Rule 15d-14(a) of the Securities
                          Exchange Act, as amended.
  31.2                    Certification of Chief Financial Officer pursuant to
                          Rule 13a-14(a) and Rule 15d-14(a) of the Securities
                          Exchange Act, as amended.
  32.1                    Certification by Chief Executive Officer pursuant to
                          18 U.S.C. Section 1350, as adopted pursuant to Section
                          906 of the Sarbanes-Oxley Act of 2002.
  32.2                    Certification by Chief Financial Officer pursuant to
                          18 U.S.C. Section 1350, as adopted pursuant to Section
                          906 of the Sarbanes-Oxley Act of 2002.
  
                                         18
  SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
                           THE HAIN CELESTIAL GROUP, INC.
  
  Date:     February 17, 2004                 /s/ Irwin D. Simon
                                              ----------------------------------
                                              Irwin D. Simon,
                                              Chairman, President and Chief
                                              Executive Officer
  
  Date:     February 17, 2004                 /s/ Ira J. Lamel
                                              ----------------------------------
                                              Ira J. Lamel,
                                              Executive Vice President and
                                              Chief Financial Officer
  
                                         19
  EXHIBIT 31.1
  
                                    CERTIFICATION
  
  I, Irwin D. Simon, certify that:
  
  1.   I have reviewed this quarterly report on Form 10-Q of The Hain Celestial
       Group, Inc.;
  
  2.   Based on my knowledge, this report does not contain any untrue statement of
       a material fact or omit to state a material fact necessary to make the
       statements made, in light of the circumstances under which such statements
       were made, not misleading with respect to the period covered by this
       report;
  
  3.   Based on my knowledge, the financial statements, and other financial
       information included in this report, fairly present in all material
       respects the financial condition, results of operations and cash flows of
       the registrant as of, and for, the periods presented in this report;
  
  4.   The registrant's other certifying officer and I are responsible for
       establishing and maintaining disclosure controls and procedures (as defined
       in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
  
       (a) Designed such disclosure controls and procedures, or caused such
       disclosure controls and procedures to be designed under our supervision, to
       ensure that material information relating to the registrant, including its
       consolidated subsidiaries, is made known to us by others within those
       entities, particularly during the period in which this report is being
       prepared;
  
       (b) Evaluated the effectiveness of the registrant's disclosure controls and
       procedures and presented in this report our conclusions about the
       effectiveness of the disclosure controls and procedures, as of the end of
       the period covered by this report based on such evaluation; and
  
       (c) Disclosed in this report any change in the registrant's internal
       control over financial reporting that occurred during the registrant's most
       recent fiscal quarter (the registrant's fourth fiscal quarter in the case
       of an annual report) that has materially affected, or is reasonably likely
       to materially affect, the registrant's internal control over financial
       reporting; and
  
  5.   The registrant's other certifying officer and I have disclosed, based on
       our most recent evaluation of internal control over financial reporting, to
       the registrant's auditors and the audit committee of the registrant's board
       of directors (or persons performing the equivalent functions):
  
            (a) All significant deficiencies and material weaknesses in the design
            or operation of internal control over financial reporting which are
            reasonably likely to adversely affect the registrant's ability to
            record, process, summarize and report financial information; and
  
            (b) Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal control over financial reporting.
  
  Date: February 17, 2004
  
  /s/ Irwin D. Simon
  -------------------------------------
  Irwin D. Simon
  President and Chief Executive Officer
  EXHIBIT 31.2
                                    CERTIFICATION
  
  I, Ira J. Lamel, certify that:
  
  1.   I have reviewed this quarterly report on Form 10-Q of The Hain Celestial
       Group, Inc.;
  
  2.   Based on my knowledge, this report does not contain any untrue statement of
       a material fact or omit to state a material fact necessary to make the
       statements made, in light of the circumstances under which such statements
       were made, not misleading with respect to the period covered by this
       report;
  
  3.   Based on my knowledge, the financial statements, and other financial
       information included in this report, fairly present in all material
       respects the financial condition, results of operations and cash flows of
       the registrant as of, and for, the periods presented in this report;
  
  4.   The registrant's other certifying officer and I are responsible for
       establishing and maintaining disclosure controls and procedures (as defined
       in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
  
            (a) Designed such disclosure controls and procedures, or caused such
            disclosure controls and procedures to be designed under our
            supervision, to ensure that material information relating to the
            registrant, including its consolidated subsidiaries, is made known to
            us by others within those entities, particularly during the period in
            which this report is being prepared;
  
            (b) Evaluated the effectiveness of the registrant's disclosure
            controls and procedures and presented in this report our conclusions
            about the effectiveness of the disclosure controls and procedures, as
            of the end of the period covered by this report based on such
            evaluation; and
  
            (c) Disclosed in this report any change in the registrant's internal
            control over financial reporting that occurred during the registrant's
            most recent fiscal quarter (the registrant's fourth fiscal quarter in
            the case of an annual report) that has materially affected, or is
            reasonably likely to materially affect, the registrant's internal
            control over financial reporting; and
  
  5.   The registrant's other certifying officer and I have disclosed, based on
       our most recent evaluation of internal control over financial reporting, to
       the registrant's auditors and the audit committee of the registrant's board
       of directors (or persons performing the equivalent functions):
  
            (a) All significant deficiencies and material weaknesses in the design
            or operation of internal control over financial reporting which are
            reasonably likely to adversely affect the registrant's ability to
            record, process, summarize and report financial information; and
  
            (b) Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal control over financial reporting.
  
  Date: February 17, 2004
  
  /s/ Ira J. Lamel
  ----------------------------
  Ira J. Lamel
  Executive Vice President and
  Chief Financial Officer
  EXHIBIT 32.1
  
                               CERTIFICATION FURNISHED
                         PURSUANT TO 18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO SECTION 906
                          OF THE SARBANES-OXLEY ACT OF 2002
  
  In connection with the Quarterly Report on Form 10-Q for the period ended
  December 31, 2003 (the "Report") filed by The Hain Celestial Group, Inc. (the
  "Company") with the Securities and Exchange Commission, I, Irwin D. Simon, Chief
  Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as
  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
  
  The Report fully complies with the requirements of Section 13(a) or 15(d) of the
  Securities Exchange Act of 1934; and
  
  The information contained in the Report fairly presents, in all material
  respects, the financial condition and results of operations of the Company.
  
  Date: February 17, 2004
  
  /s/ Irwin D. Simon
  -------------------------------------
  Irwin D. Simon
  President and Chief Executive Officer
  
  A signed original of this written statement required by Section 906 has been
  provided to The Hain Celestial Group, Inc. and will be retained by The Hain
  Celestial Group, Inc. and furnished to the Securities and Exchange Commission or
  its staff upon request.
  EXHIBIT 32.2
  
                               CERTIFICATION FURNISHED
                         PURSUANT TO 18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO SECTION 906
                          OF THE SARBANES-OXLEY ACT OF 2002
  
  In connection with the Quarterly Report on Form 10-Q for the period ended
  December 31, 2003 (the "Report") filed by The Hain Celestial Group, Inc. (the
  "Company") with the Securities and Exchange Commission, I, Ira J. Lamel, Chief
  Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as
  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
  
  The Report fully complies with the requirements of Section 13(a) or 15(d) of the
  Securities Exchange Act of 1934; and
  
  The information contained in the Report fairly presents, in all material
  respects, the financial condition and results of operations of the Company.
  
  Date: February 17, 2004
  
  /s/ Ira J. Lamel
  -----------------------------
  Ira J. Lamel
  Executive Vice President and
  Chief Financial Officer
  
  A signed original of this written statement required by Section 906 has been
  provided to The Hain Celestial Group, Inc. and will be retained by The Hain
  Celestial Group, Inc. and furnished to the Securities and Exchange Commission or
  its staff upon request.