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 September 30, 2004
  
                                         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
  
  
  As of November 3, 2004, there were 36,495,580 shares outstanding of the
  Registrant's Common Stock, par value $.01 per share.
  
  
  
  <PAGE>
  
  
  
                           THE HAIN CELESTIAL GROUP, INC.
  
                                        INDEX
  
  
                            Part I Financial Information
  
  Item 1.  Financial Statements
  
           Consolidated Balance Sheets - September 30, 2004
           (unaudited) and June 30, 2004                                         2
  
           Consolidated Statements of Income -
           Three Months ended September 30, 2004 and 2003 (unaudited)            3
  
           Consolidated Statement of Stockholders' Equity -
           Three months ended September 30, 2004 (unaudited)                     4
  
           Consolidated Statement of Cash Flows -
           Three months ended September 30, 2004 and 2003 (unaudited)            5
  
           Notes to Consolidated Financial Statements                         6-10
  
  Item 2.  Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                         11-14
  
  Item 3.  Quantitative and Qualitative Disclosures
                    About Market Risk                                           15
  
  Item 4.  Controls and Procedures                                              15
  
  Part II  Other Information
  
                    Items 1 through 5 are not applicable
  
                    Item 6 - Exhibits                                           15
  
                    Signatures                                                  16
  
  
  
  
                                         1
  
  
  <PAGE>
  
  
  
  <TABLE>
  <CAPTION>
  
  PART I - ITEM 1 - FINANCIAL INFORMATION
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  (In thousands, except per share and share amounts)
                                                                                       September 30,               June 30,
                                                                                            2004                     2004
                                                                                    ---------------------   --------------------
                                          ASSETS                                        (Unaudited)                  (Note)
   Current assets:
  <S>                                                                                         <C>                     <C>
    Cash and cash equivalents                                                           $      9,765              $   27,489
    Accounts receivable, less allowance for doubtful
      accounts of $2,225 and $2,185                                                           70,922                  69,392
    Inventories                                                                               93,109                  86,873
    Deferred income taxes                                                                      3,111                   3,111
    Other current assets                                                                      14,459                  11,449
                                                                                    ---------------------   --------------------
      Total current assets                                                                   191,366                 198,314
  
   Property, plant and equipment, net of accumulated
     depreciation and amortization of $43,970 and $40,799                                     87,836                  87,002
   Goodwill                                                                                  338,730                 333,218
   Trademarks and other intangible assets, net of
     accumulated amortization of $8,558 and $8,349                                            55,712                  55,793
   Other assets                                                                               11,651                   9,904
                                                                                    ---------------------   --------------------
     Total assets                                                                       $    685,295              $  684,231
                                                                                    =====================   ====================
  
                           LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:
    Accounts payable and accrued expenses                                               $     53,065              $   59,031
    Current portion of long-term debt                                                          4,784                   6,845
    Income taxes payable                                                                       4,966                   2,489
                                                                                    ---------------------   --------------------
     Total current liabilities                                                                62,815                  68,365
  
   Long-term debt, less current portion                                                       99,906                 104,294
   Deferred income taxes                                                                      14,807                  14,807
                                                                                    ---------------------   --------------------
     Total liabilities                                                                       177,528                 187,466
  
   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 37,120,469 and 37,064,648 shares                                             371                     371
    Additional paid-in capital                                                               395,557                 394,740
    Deferred compensation                                                                     (2,575)                 (2,809)
    Retained earnings                                                                        112,279                 106,097
    Foreign currency translation adjustment                                                   11,420                   7,651
                                                                                    ---------------------   --------------------
                                                                                             517,052                 506,050
   Less: 671,556 shares of treasury stock, at cost                                            (9,285)                 (9,285)
                                                                                    ---------------------   --------------------
     Total stockholders' equity                                                              507,767                 496,765
                                                                                    ---------------------   --------------------
  
     Total liabilities and stockholders' equity                                         $    685,295              $  684,231
                                                                                    =====================   ====================
  
  Note: The balance sheet at June 30, 2004 has been derived from the audited financial statements at that date.
  
  See notes to consolidated financial statements.
  
  </TABLE>
  
  
                                         2
  <PAGE>
  
  
  
       THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
       (In thousands, except per share and share amounts)
  
  <TABLE>
  <CAPTION>
  
                                                                                     Three Months Ended
                                                                                       September 30,
                                                                         -------------------------------------------
                                                                                2004                   2003
                                                                         -------------------    --------------------
                                                                                        (Unaudited)
  
  <S>                                                                         <C>                    <C>
  Net sales                                                                   $ 137,604              $ 127,053
  Cost of sales                                                                  98,629                 89,891
                                                                         -------------------    --------------------
    Gross profit                                                                 38,975                 37,162
  
  Selling, general and administrative expenses                                   28,185                 25,819
                                                                         -------------------    --------------------
    Operating income                                                             10,790                 11,343
  
  Interest expense and other expenses, net                                          655                    791
                                                                         -------------------    --------------------
  
  Income before income taxes                                                     10,135                 10,552
  Provision for income taxes                                                      3,953                  4,010
                                                                         -------------------    --------------------
  
    Net income                                                              $     6,182            $     6,542
                                                                         ===================    ====================
  
  Net income per share:
    Basic                                                                  $       0.17           $       0.19
                                                                         ===================    ====================
  
    Diluted                                                                $       0.17           $       0.19
                                                                         ===================    ====================
  
  Weighted average common shares outstanding:
    Basic                                                                        36,273                 34,221
                                                                         ===================    ====================
  
    Diluted                                                                      36,855                 35,356
                                                                         ===================    ====================
  
  
  See notes to consolidated financial statements.
  
  </TABLE>
  
  
  
  
  
                                         3
  <PAGE>
  
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
  (In thousands, except per share and share amounts)
  
  <TABLE>
  <CAPTION>
  
                                                                                                    Foreign
                                                                                                    Cur-
                                                        Unamor-                                     rency
                                            Addi-        tized      Re-                             Trans-
                       Common Stock         tional      Non-Cash    tained                          lation                 Compre-
                                Amount     Paid-in      Compen-     Earn-       Treasury Stock      Adjust-                hensive
                     Shares     at $.01    Capital      sation      ings      Shares      Amount    ment         Total     Income
                    --------------------------------------------------------------------------------------------------------------
  
  Balance at
  <S>               <C>           <C>      <C>         <C>        <C>         <C>        <C>        <C>       <C>          <C>
    June 30, 2004   37,064,648    $371     394,740     $ (2,809)  $ 106,097   671,556    $ (9,285)  $  7,651  $ 496,765
  
  Exercise of
    stock options       55,821                 805                                                                  805
  
  
  Non-cash
    compensation
    charge                                      12          234                                                     246
  
  Comprehensive
    income:
    Net income for
    the period                                                                  6,182                             6,182    $ 6,182
  
    Translation
    adjustments                                                                                        3,769      3,769      3,769
                                                                                                                       -----------
  
  Total compre-
    hensive income                                                                                                        $  9,951
                    ----------   ------   --------   ----------  ----------  --------   ---------  ---------  ---------===========
  Balance at
    Sept. 30, 2004  37,120,469   $ 371    $395,557      $(2,575)  $ 112,279  $671,556    $ (9,285)   $11,420  $ 507,767
                    ==========   ======   ========   ==========  ==========  ========   =========  =========  =========
  
  </TABLE>
  
  
  See notes to consolidated financial statements.
  
  
  
                                         4
  <PAGE>
  
  
  
  <TABLE>
  <CAPTION>
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
  (In thousands)
                                                                                          Three Months Ended
                                                                                             September 30,
                                                                               ------------------------------------------
                                                                                     2004                    2003
                                                                               ------------------     -------------------
  CASH FLOWS FROM OPERATING ACTIVITIES                                                        (Unaudited)
  
  <S>                                                                                   <C>                   <C>
  Net income                                                                            $ 6,182               $  6,542
  Adjustments to reconcile net income to net cash
    provided by operating activities:
       Depreciation and amortization                                                      3,105                  2,580
       Provision for doubtful accounts                                                      (10)                    92
       Non-cash compensation                                                                246                     12
  
     Increase (decrease) in cash attributable to changes in
          operating assets and liabilities, net of amounts
          applicable to acquired businesses:
            Accounts receivable                                                            (973)               (13,588)
            Inventories                                                                  (7,083)                (2,639)
            Other current assets                                                         (3,159)                    50
            Other assets                                                                 (1,789)                   736
            Accounts payable and accrued expenses                                        (5,775)                (2,937)
            Income taxes, net                                                             2,477                  2,445
                                                                               ------------------     -------------------
  
            Net cash (used in) operating activities                                      (6,779)                (6,707)
                                                                               ------------------     -------------------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                                                    (2,781)                  (998)
  Acquisitions of businesses                                                             (1,570)                     -
                                                                               ------------------     -------------------
            Net cash (used in) investing activities                                      (4,351)                  (998)
                                                                               ------------------     -------------------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
  (Repayments) proceeds from bank revolving
    credit facility, net                                                                 (5,500)                10,750
  Payments on economic development revenue bonds                                           (150)                  (125)
  Purchase of treasury stock                                                                  -                   (279)
  Proceeds from exercise of options, net of related expenses                                805                    576
  Repayments of other long-term debt, net                                                (1,277)                  (428)
                                                                               ------------------     -------------------
  
            Net cash (used in) provided by financing activities                          (6,122)                10,494
                                                                               ------------------     -------------------
  
  Effect of exchange rate changes on cash                                                  (472)                  (894)
                                                                               ------------------     -------------------
  Net (decrease) increase in cash and cash equivalents                                  (17,724)                 1,895
  Cash and cash equivalents at beginning of period                                       27,489                 10,984
                                                                               ------------------     -------------------
  
  Cash and cash equivalents at end of period                                           $  9,765              $  12,879
                                                                               ==================     ===================
  
  
  See notes to consolidated financial statements.
  
  </TABLE>
  
  
  
                                         5
  <PAGE>
  
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  
  1. GENERAL
  
       The Hain Celestial Group, Inc., a Delaware corporation, and its
  subsidiaries (collectively, the "Company", and herein referred to as "we", "us",
  and "our") manufacture, market, distribute and sell natural, organic, specialty
  and snack food products and natural and organic personal care 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 food brands as
  Celestial Seasonings(R) teas, Hain Pure Foods(R), Westbrae(R), Westsoy(R), Rice
  Dream(R), Soy Dream(R), Imagine(R), Walnut Acres Certified Organic(R), Ethnic
  Gourmet(R), Rosetto(R), Little Bear Organic Foods(R), Bearitos(R), Arrowhead
  Mills(R), Health Valley(R), Breadshop's(R), Casbah(R), Garden of Eatin'(R),
  Terra Chips(R), Harry's Premium Snacks(R), Boston's(R), Lima(R), Biomarche(R),
  Grains Noirs(R), Natumi(R), Milkfree, Yves Veggie Cuisine(R), DeBoles(R),
  Earth's Best(R), and Nile Spice(R). The Company's 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 natural
  and organic personal care product line is marketed under the JASON(R),
  Orjene(R), Shaman Earthly Organics(TM), and Heather's(R) brands.
  
       We operate in one business segment: the sale of natural, organic and other
  food and beverage and personal care products. In our 2004 fiscal year,
  approximately 39% of our revenues were derived from products that were
  manufactured within our own facilities with 61% produced by various co-packers.
  
       All dollar amounts in our consolidated financial statements and notes have
  been rounded to the nearest thousand dollars, except per share amounts. Share
  amounts in the notes to consolidated financial statements are presented in
  thousands.
  
  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 ended September 30, 2004 are
  not necessarily indicative of the results that may be expected for the year
  ending June 30, 2005. Please refer to the footnotes to our consolidated
  financial statements as of June 30, 2004 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:
  
                                                   Three Months Ended
                                                      September 30,
                                              ------------------------------
  
                                                   2004           2003
                                              --------------- --------------
  Numerator:
  Net income                                          $6,182         $6,542
                                              =============== ==============
  Denominator (in thousands):
  Denominator for basic earnings per
   share - weighted average shares
   outstanding during the period                      36,273         34,221
                                              --------------- --------------
  
  Effect of dilutive securities:
   Stock options                                         576            965
   Warrants                                                6            170
                                              --------------- --------------
                                                         582          1,135
                                              --------------- --------------
  Denominator for diluted earnings per
   share - adjusted weighted average
   shares and assumed conversions                     36,855         35,356
                                              =============== ==============
  Basic net income per share                          $ 0.17         $ 0.19
                                              =============== ==============
  Diluted net income per share                        $ 0.17         $ 0.19
                                              =============== ==============
  
  
  4. INVENTORIES
  
       Inventories consisted of the following:
  
                                         September 30,               June 30,
                                             2004                      2004
                                     ---------------------- ----------------------
         Finished goods                      $61,913                   $56,132
         Raw materials,
           work-in-progress
           and packaging                      31,196                    30,741
                                     ---------------------- ----------------------
                                             $93,109                   $86,873
                                     ====================== ======================
  
  
  
                                         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:
  
                                              September 30,         June 30,
                                                  2004                2004
                                            -------------------- -----------------
         Land                                     $  8,160              8,113
         Buildings and improvements                 30,106             29,867
         Machinery and equipment                    80,646             79,275
         Furniture and fixtures                      2,537              2,527
         Leasehold improvements                      3,610              3,478
         Construction in progress                    6,747              4,541
                                            -------------------- -----------------
                                                   131,806            127,801
  
         Less: Accumulated depreciation
                 and amortization                   43,970             40,799
                                            -------------------- -----------------
                                                  $ 87,836           $ 87,002
                                            ==================== =================
  
  6. ACQUISITIONS
  
       On June 3, 2004, we acquired 100% of the stock of privately-held Jason
  Natural Products, Inc., a California-based manufacturer and marketer of natural
  and organic personal care products. In recent years, Jason Natural Products has
  expanded its lines of natural and organic personal care products by integrating
  a series of brands including Orjene(R), Shaman Earthly Organics(TM), and
  Heather's(R) into its portfolio. The purchase price consisted of approximately
  $23.9 million in cash, plus the assumption of certain liabilities. At September
  30, 2004, goodwill (not deductible for tax purposes) from this transaction was
  estimated to be $22.9 million.
  
       On May 27, 2004, we acquired substantially all of the assets and assumed
  certain liabilities of the Rosetto(R) and Ethnic Gourmet(R) businesses of H.J.
  Heinz Company, LP, which owned approximately 16.7% of our common stock at the
  time of the transaction. These businesses produce and market frozen pasta and
  natural ethnic frozen meals, respectively. The purchase price consisted of
  approximately $22.8 million in cash, plus the assumption of certain liabilities.
  At September 30, 2004, goodwill (deductible for tax purposes) from this
  transaction was estimated to be $7.9 million.
  
       The following table summarizes the estimated fair values of assets acquired
  and liabilities assumed of Jason Natural Products, Rosetto, and Ethnic Gourmet
  at the dates of the acquisitions:
  
  Current assets                        $12,358
  Property and equipment                 12,871
  Other assets                              102
                                      ---------
  Total assets                           25,331
  Liabilities assumed                     4,321
                                      ---------
  Net assets acquired                   $21,010
                                      =========
  
  
       The balance sheet at September 30, 2004, includes the assets acquired and
  liabilities assumed valued at fair market value at the date of purchase. We are
  in the process of performing the procedures required to finalize the purchase
  price allocation for the above fiscal 2004 acquisitions; however, these
  procedures are in the early stages and are expected to be completed during the
  later half of fiscal 2005.
  
       The results of operations for the three months ended September 30, 2004
  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 the period shown. This information has not been adjusted to reflect
  any changes in the operations of these businesses subsequent to their
  
  
  
                                         8
  <PAGE>
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
  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, and discontinuation of sales of
  private label 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
                                           September 30, 2003
                                           ------------------
  Net sales                                  $  140,064
  Net income                                      5,921
  
  Earnings per share:
    Basic                                        $ 0.17
    Diluted                                        0.17
  
  Weighted average shares:
    Basic                                        34,221
    Diluted                                      35,356
  
  
       In management's opinion, the unaudited pro forma results of operations is
  not indicative of the actual results that would have occurred had the JASON(R),
  Rosetto(R) and Ethnic Gourmet(R) acquisitions been consummated at the beginning
  of the periods presented or of future operations of the combined companies under
  our management.
  
       On February 25, 2004, our subsidiary in Belgium acquired Natumi, AG, a
  German producer of non-dairy beverages and desserts marketed principally in
  retail channels in Europe. The purchase price consisted of approximately $1.75
  million in cash as well as the assumption of certain liabilities. The purchase
  price excludes the amount of contingency payments we are obligated to pay the
  former owner of Natumi. The contingency payments are based on the achievement by
  Natumi of certain financial targets over an approximate 3.5 year period
  following the date of acquisition. Such payments, which could total
  approximately 9 million euros, will be charged to goodwill if and when paid. No
  such contingency payments have been made since the acquisition. The net assets
  acquired, as well as the sales and operations of Natumi, are not material to the
  Company's consolidated financial position or results of operations and,
  therefore, have not been included in the detailed information about our
  acquisitions.
  
  
  7. CREDIT FACILITY
  
       On April 22, 2004, we entered into a new $300 million credit facility (the
  "Credit Facility") with a bank group led by our existing bank agents for a
  five-year term expiring in April 2009. The Credit Facility provides for an
  uncommitted $50 million accordion feature, under which the facility may be
  increased to $350 million. The Credit Facility is secured only by a pledge of
  shares of certain of our foreign subsidiaries and 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 and applicable
  margin) or, at our option, the reserve adjusted LIBOR rate plus an applicable
  margin. As of September 30, 2004, $93.7 million was borrowed under the Credit
  Facility at an interest rate of 2.8%.
  
  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.
  
  
                                         9
  <PAGE>
  
  
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
       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 ended September 30,
  2004 and 2003 would have been the pro forma amounts that follow:
  
                                                   Three Months Ended
                                                      September 30,
                                            ----------------------------------
                                                  2004               2003
                                            -----------------    -------------
  
  Net income, as reported                            $ 6,182           $6,542
  Non-cash compensation charge, net
  of related tax effects                                 150                7
  
  Stock-based employee compensation
  expense determined under fair value
  method, net of related tax effects                  (3,462)          (1,221)
                                            -----------------    -------------
  
  Pro forma net income                                $2,870           $5,328
                                            =================    =============
  
  Basic net income per share:
      As reported                                  $ 0.17            $ 0.19
                                                   ======            ======
      Pro forma                                    $ 0.08            $ 0.16
                                                   ======            ======
  
  Diluted net income per share:
      As reported                                  $ 0.17            $ 0.19
                                                   ======            ======
      Pro forma                                    $ 0.08            $ 0.15
                                                   ======            ======
  
  
  
  
  
  
                                         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 and natural and organic personal care 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 food brands as Celestial
  Seasonings(R) teas, Hain Pure Foods(R), Westbrae(R), Westsoy(R), Rice Dream(R),
  Soy Dream(R), Imagine(R), Walnut Acres Certified Organic(R), Ethnic Gourmet(R),
  Rosetto(R), Little Bear Organic Foods(R), Bearitos(R), Arrowhead Mills(R),
  Health Valley(R), Breadshop's(R), Casbah(R), Garden of Eatin'(R), Terra
  Chips(R), Harry's Premium Snacks(R), Boston's(R), Lima(R), Biomarche(R), Grains
  Noirs(R), Natumi(R), Milkfree, Yves Veggie Cuisine(R), DeBoles(R), Earth's
  Best(R), and Nile Spice(R). The Company's 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 natural and
  organic personal care product line is marketed under the JASON(R), Orjene(R),
  Shaman Earthly Organics(TM), and Heather's(R) brands. 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 September 30, 2004
  
       Net sales for the three months ended September 30, 2004 were $137.6
  million, an increase of $10.5 million or 8.3% over net sales of $127.1 million
  in the September 30, 2003 quarter. The increase came from volume increases
  principally in our snacks brands, which were up 12.6%, our Celestial Seasonings
  tea brand, which was up 4.6%, and our European business, which was up 20.5%.
  During the current year quarter, we benefited from the phasing in of price
  increases, the full effect of which is expected in future quarters, and from
  sales of businesses acquired in 2004. Sales of our Imagine Foods brands,
  acquired in December 2002, and Walnut Acres brands, acquired in June 2003, are
  included in each of the quarterly periods presented, while sales of our Jason
  Natural Products, Rosetto, Ethnic Gourmet and Natumi brands are included only in
  the current year quarter. Sales in the current year quarter were negatively
  impacted by reductions in inventories estimated at $12 million at two major
  distributors.
  
       Gross profit for the three months ended September 30, 2004 was 28.3% of net
  sales as compared to 29.2% of net sales in the September 30, 2003 quarter. The
  decline in gross profit percentage was principally the result of increases in
  transportation costs which began in the third quarter of Fiscal 2004 resulting
  from higher fuel costs, the cost effects of new regulations on the U.S. trucking
  industry, and an increase in the percentage of our shipments that are delivered
  by us. Also, we incurred higher cost of ingredients and higher personnel and
  benefits costs this period as compared to the prior year period. These higher
  costs were offset in part by the effect of the price increase phased in
  beginning July 1, 2004.
  
       Selling, general and administrative expenses increased by $2.4 million to
  $28.2 million for the three months ended September 30, 2004 as compared to $25.8
  million in the September 30, 2003 quarter. Such expenses amounted to 20.5% of
  net sales for the three months ended September 30, 2004 compared with 20.3% in
  the September 30, 2003 quarter. Selling, general and administrative expenses
  have increased in overall dollars, primarily as a result of costs
  
  
  
                                         11
  <PAGE>
  
  
  brought on by businesses acquired in 2004, increased consumer marketing expenses
  needed to support our increased sales as well as increases across all levels of
  general and administrative expenses to support our growing business. General and
  administrative expenses for the three months ended September 30, 2004 includes
  approximately $ .6 million for the cost of terminated employees and for non-cash
  compensation charges.
  
       Operating income was $10.8 million in the three months ended September 30,
  2004 compared to $11.3 million in the September 30, 2003 quarter. Operating
  income as a percentage of net sales was 7.8% in the September 30, 2004 quarter,
  compared with 8.9% in the September 30, 2003 quarter. The dollar and percentage
  decrease is a result of the aforementioned lower gross profit and higher
  selling, general and administrative expenses.
  
       Interest and other expenses amounted to $.7 million for the three months
  ended September 30, 2004 compared to $.8 million for the three months ended
  September 30, 2003. Our interest expense was $.4 million higher this quarter as
  compared to the prior year quarter, principally as a result of the higher
  average borrowings we carry this year after our recent acquisitions. We had $.2
  million in net currency exchange gains this quarter as compared to $.1 million
  in net currency exchange losses in the prior year quarter, which partially
  offset the additional interest costs.
  
       Income before income taxes for the three months ended September 30, 2004
  amounted to $10.1 million compared to $10.6 million in the comparable period of
  the prior year. This decrease was attributable to the decrease in operating
  income.
  
       Our effective income tax rate approximated 39% of pre-tax income for the
  three months ended September 30, 2004 compared to 38% for the three months ended
  September 30, 2003. We expect our effective tax rate to approximate 39% during
  the remainder of fiscal 2005.
  
       Net income for the three months ended September 30, 2004 was $6.2 million
  compared to $6.5 million in the September 30, 2003 quarter. The decrease of $.3
  million in earnings was primarily attributable to the aforementioned decrease in
  income before income taxes and the increase in our effective tax rate.
  
  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 $300 million Credit Facility through April 22,
  2009. The Credit Facility is secured only by a pledge of shares of certain of
  our foreign subsidiaries and 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 September 30, 2004, we
  had $93.7 million outstanding under the 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 the ability to develop our existing infrastructure through
  capital investment.
  
       Effective July 2004, we adjusted prices upward by 4% to 5% across certain
  of our U.S. businesses. We expect the increases will offset increased costs we
  have absorbed in fuel, freight and commodities, and should help offset future
  increased costs into the next production year as we renew procurement contracts.
  
       Net cash (used in) operations was $(6.8) million and $(6.7) million for the
  three months ended September 30, 2004 and 2003, respectively. Our working
  capital and current ratio was $128.6 million and 3.0 to 1, respectively, at
  September 30, 2004 compared with $130.0 million and 2.9 to 1 respectively, at
  June 30, 2004. The decrease in working capital resulted principally from the
  decrease in cash used to reduce debt during the three months ended September 30,
  2004.
  
       Net cash (used in) provided by financing activities was $(6.1) million and
  $10.5 million for the three months ended September 30, 2004 and 2003,
  respectively. The change between the quarters of each year was due principally
  to our pay down of approximately $6.8 million of debt under our U. S. and
  European credit lines during the Fiscal 2005 quarter, as compared to our
  borrowing approximately $10.8 million under our U. S. credit line in the Fiscal
  2004 quarter.
  
  
  
                                         12
  <PAGE>
  
  
       We believe that cash on hand of $9.8 million at September 30, 2004,
  projected remaining fiscal 2005 cash flows from operations, and availability
  under our Credit Facility are sufficient to fund our working capital needs,
  anticipated capital expenditures of approximately $9 million, and scheduled debt
  payments of approximately $9.5 million for the remainder of fiscal 2005. We
  currently invest our cash on hand in highly liquid short-term investments
  yielding approximately 1% interest.
  
  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 28% 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 approximated $6 million at September 30, 2004 and
  June 30, 2004.
  
       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.
  
  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.
  
  
  
                                         13
  <PAGE>
  
  
  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; our
  ability to implement our business and acquisition strategy; the ability to
  effectively integrate our acquisitions; our ability to obtain financing for
  general corporate purposes; competition; availability of key personnel; changes
  in, or the failure to comply with government regulations; and other risks
  detailed from time-to-time in the Company's reports filed with the Securities
  and Exchange Commission, including the report on Form 10-K for the fiscal year
  ended June 30m 2004. As a result of the foregoing and other factors, no
  assurance can be given as to future results, levels of activity and achievements
  and neither the Company nor any person assumes responsibility for the accuracy
  and completeness of these statements.
  
  
  
  
                                         14
  <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 over financial
  reporting during the fiscal quarter covered by this report that have materially
  affected, or are reasonably likely to materially affect, those controls.
  
  Part II - OTHER INFORMATION
  
  
  ITEM 6. EXHIBITS
  
  
  Exhibit Number      Description
  --------------      -----------
  
                      The cross-reference for Exhibit 10.5 of the Company's Form
                      10-K for the fiscal year ended June 30, 2004, inadvertently
                      was incorrect. It should have read:
  
  10.5                Employment Agreement between the Registrant and Irwin D.
                      Simon, dated July 1, 2003 (incorporated by reference to
                      Exhibit 10.1 of the Registrant's Quarterly Report on Form
                      10-Q for the fiscal quarter ended September 30, 2003, filed
                      with the Commission on November 14, 2003).
  
  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.
  
  
  
  
                                         15
  <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:    November 8, 2004             /s/ Irwin D. Simon
                                        ----------------------------------
                                        Irwin D. Simon,
                                        Chairman, President and Chief
                                        Executive Officer
  
  
  
  
  
  
  
  Date:    November 8, 2004             /s/ Ira J. Lamel
                                        ----------------------------------
                                        Ira J. Lamel,
                                        Executive Vice President and
                                        Chief Financial Officer
  
  
  
  
                                         16
  <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: November 8, 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: November 8, 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
  September 30, 2004 (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: November 8, 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
  September 30, 2004 (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: November 8, 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": "hain10q110904.txt", "secsgml_size_bytes": 67129}]
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": "041128657"}, "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 September 30, 2004
  
                                         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
  
  As of November 3, 2004, there were 36,495,580 shares outstanding of the
  Registrant's Common Stock, par value $.01 per share.
  THE HAIN CELESTIAL GROUP, INC.
  
                                        INDEX
  
                            Part I Financial Information
  
  Item 1.  Financial Statements
  
           Consolidated Balance Sheets - September 30, 2004
           (unaudited) and June 30, 2004                                         2
  
           Consolidated Statements of Income -
           Three Months ended September 30, 2004 and 2003 (unaudited)            3
  
           Consolidated Statement of Stockholders' Equity -
           Three months ended September 30, 2004 (unaudited)                     4
  
           Consolidated Statement of Cash Flows -
           Three months ended September 30, 2004 and 2003 (unaudited)            5
  
           Notes to Consolidated Financial Statements                         6-10
  
  Item 2.  Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                         11-14
  
  Item 3.  Quantitative and Qualitative Disclosures
                    About Market Risk                                           15
  
  Item 4.  Controls and Procedures                                              15
  
  Part II  Other Information
  
                    Items 1 through 5 are not applicable
  
                    Item 6 - Exhibits                                           15
  
                    Signatures                                                  16
  
                                         1
  PART I - ITEM 1 - FINANCIAL INFORMATION
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  (In thousands, except per share and share amounts)
                                                                                       September 30,               June 30,
                                                                                            2004                     2004
                                                                                    ---------------------   --------------------
                                          ASSETS                                        (Unaudited)                  (Note)
   Current assets:
  Cash and cash equivalents                                                           $      9,765              $   27,489
    Accounts receivable, less allowance for doubtful
      accounts of $2,225 and $2,185                                                           70,922                  69,392
    Inventories                                                                               93,109                  86,873
    Deferred income taxes                                                                      3,111                   3,111
    Other current assets                                                                      14,459                  11,449
                                                                                    ---------------------   --------------------
      Total current assets                                                                   191,366                 198,314
  
   Property, plant and equipment, net of accumulated
     depreciation and amortization of $43,970 and $40,799                                     87,836                  87,002
   Goodwill                                                                                  338,730                 333,218
   Trademarks and other intangible assets, net of
     accumulated amortization of $8,558 and $8,349                                            55,712                  55,793
   Other assets                                                                               11,651                   9,904
                                                                                    ---------------------   --------------------
     Total assets                                                                       $    685,295              $  684,231
                                                                                    =====================   ====================
  
                           LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:
    Accounts payable and accrued expenses                                               $     53,065              $   59,031
    Current portion of long-term debt                                                          4,784                   6,845
    Income taxes payable                                                                       4,966                   2,489
                                                                                    ---------------------   --------------------
     Total current liabilities                                                                62,815                  68,365
  
   Long-term debt, less current portion                                                       99,906                 104,294
   Deferred income taxes                                                                      14,807                  14,807
                                                                                    ---------------------   --------------------
     Total liabilities                                                                       177,528                 187,466
  
   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 37,120,469 and 37,064,648 shares                                             371                     371
    Additional paid-in capital                                                               395,557                 394,740
    Deferred compensation                                                                     (2,575)                 (2,809)
    Retained earnings                                                                        112,279                 106,097
    Foreign currency translation adjustment                                                   11,420                   7,651
                                                                                    ---------------------   --------------------
                                                                                             517,052                 506,050
   Less: 671,556 shares of treasury stock, at cost                                            (9,285)                 (9,285)
                                                                                    ---------------------   --------------------
     Total stockholders' equity                                                              507,767                 496,765
                                                                                    ---------------------   --------------------
  
     Total liabilities and stockholders' equity                                         $    685,295              $  684,231
                                                                                    =====================   ====================
  
  Note: The balance sheet at June 30, 2004 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 and share amounts)
  Three Months Ended
                                                                                       September 30,
                                                                         -------------------------------------------
                                                                                2004                   2003
                                                                         -------------------    --------------------
                                                                                        (Unaudited)
  Net sales                                                                   $ 137,604              $ 127,053
  Cost of sales                                                                  98,629                 89,891
                                                                         -------------------    --------------------
    Gross profit                                                                 38,975                 37,162
  
  Selling, general and administrative expenses                                   28,185                 25,819
                                                                         -------------------    --------------------
    Operating income                                                             10,790                 11,343
  
  Interest expense and other expenses, net                                          655                    791
                                                                         -------------------    --------------------
  
  Income before income taxes                                                     10,135                 10,552
  Provision for income taxes                                                      3,953                  4,010
                                                                         -------------------    --------------------
  
    Net income                                                              $     6,182            $     6,542
                                                                         ===================    ====================
  
  Net income per share:
    Basic                                                                  $       0.17           $       0.19
                                                                         ===================    ====================
  
    Diluted                                                                $       0.17           $       0.19
                                                                         ===================    ====================
  
  Weighted average common shares outstanding:
    Basic                                                                        36,273                 34,221
                                                                         ===================    ====================
  
    Diluted                                                                      36,855                 35,356
                                                                         ===================    ====================
  
  See notes to consolidated financial statements.
  3
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
  (In thousands, except per share and share amounts)
  Foreign
                                                                                                    Cur-
                                                        Unamor-                                     rency
                                            Addi-        tized      Re-                             Trans-
                       Common Stock         tional      Non-Cash    tained                          lation                 Compre-
                                Amount     Paid-in      Compen-     Earn-       Treasury Stock      Adjust-                hensive
                     Shares     at $.01    Capital      sation      ings      Shares      Amount    ment         Total     Income
                    --------------------------------------------------------------------------------------------------------------
  
  Balance at
  June 30, 2004   37,064,648    $371     394,740     $ (2,809)  $ 106,097   671,556    $ (9,285)  $  7,651  $ 496,765
  
  Exercise of
    stock options       55,821                 805                                                                  805
  
  Non-cash
    compensation
    charge                                      12          234                                                     246
  
  Comprehensive
    income:
    Net income for
    the period                                                                  6,182                             6,182    $ 6,182
  
    Translation
    adjustments                                                                                        3,769      3,769      3,769
                                                                                                                       -----------
  
  Total compre-
    hensive income                                                                                                        $  9,951
                    ----------   ------   --------   ----------  ----------  --------   ---------  ---------  ---------===========
  Balance at
    Sept. 30, 2004  37,120,469   $ 371    $395,557      $(2,575)  $ 112,279  $671,556    $ (9,285)   $11,420  $ 507,767
                    ==========   ======   ========   ==========  ==========  ========   =========  =========  =========
  See notes to consolidated financial statements.
  
                                         4
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
  (In thousands)
                                                                                          Three Months Ended
                                                                                             September 30,
                                                                               ------------------------------------------
                                                                                     2004                    2003
                                                                               ------------------     -------------------
  CASH FLOWS FROM OPERATING ACTIVITIES                                                        (Unaudited)
  Net income                                                                            $ 6,182               $  6,542
  Adjustments to reconcile net income to net cash
    provided by operating activities:
       Depreciation and amortization                                                      3,105                  2,580
       Provision for doubtful accounts                                                      (10)                    92
       Non-cash compensation                                                                246                     12
  
     Increase (decrease) in cash attributable to changes in
          operating assets and liabilities, net of amounts
          applicable to acquired businesses:
            Accounts receivable                                                            (973)               (13,588)
            Inventories                                                                  (7,083)                (2,639)
            Other current assets                                                         (3,159)                    50
            Other assets                                                                 (1,789)                   736
            Accounts payable and accrued expenses                                        (5,775)                (2,937)
            Income taxes, net                                                             2,477                  2,445
                                                                               ------------------     -------------------
  
            Net cash (used in) operating activities                                      (6,779)                (6,707)
                                                                               ------------------     -------------------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                                                    (2,781)                  (998)
  Acquisitions of businesses                                                             (1,570)                     -
                                                                               ------------------     -------------------
            Net cash (used in) investing activities                                      (4,351)                  (998)
                                                                               ------------------     -------------------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
  (Repayments) proceeds from bank revolving
    credit facility, net                                                                 (5,500)                10,750
  Payments on economic development revenue bonds                                           (150)                  (125)
  Purchase of treasury stock                                                                  -                   (279)
  Proceeds from exercise of options, net of related expenses                                805                    576
  Repayments of other long-term debt, net                                                (1,277)                  (428)
                                                                               ------------------     -------------------
  
            Net cash (used in) provided by financing activities                          (6,122)                10,494
                                                                               ------------------     -------------------
  
  Effect of exchange rate changes on cash                                                  (472)                  (894)
                                                                               ------------------     -------------------
  Net (decrease) increase in cash and cash equivalents                                  (17,724)                 1,895
  Cash and cash equivalents at beginning of period                                       27,489                 10,984
                                                                               ------------------     -------------------
  
  Cash and cash equivalents at end of period                                           $  9,765              $  12,879
                                                                               ==================     ===================
  
  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., a Delaware corporation, and its
  subsidiaries (collectively, the "Company", and herein referred to as "we", "us",
  and "our") manufacture, market, distribute and sell natural, organic, specialty
  and snack food products and natural and organic personal care 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 food brands as
  Celestial Seasonings(R) teas, Hain Pure Foods(R), Westbrae(R), Westsoy(R), Rice
  Dream(R), Soy Dream(R), Imagine(R), Walnut Acres Certified Organic(R), Ethnic
  Gourmet(R), Rosetto(R), Little Bear Organic Foods(R), Bearitos(R), Arrowhead
  Mills(R), Health Valley(R), Breadshop's(R), Casbah(R), Garden of Eatin'(R),
  Terra Chips(R), Harry's Premium Snacks(R), Boston's(R), Lima(R), Biomarche(R),
  Grains Noirs(R), Natumi(R), Milkfree, Yves Veggie Cuisine(R), DeBoles(R),
  Earth's Best(R), and Nile Spice(R). The Company's 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 natural
  and organic personal care product line is marketed under the JASON(R),
  Orjene(R), Shaman Earthly Organics(TM), and Heather's(R) brands.
  
       We operate in one business segment: the sale of natural, organic and other
  food and beverage and personal care products. In our 2004 fiscal year,
  approximately 39% of our revenues were derived from products that were
  manufactured within our own facilities with 61% produced by various co-packers.
  
       All dollar amounts in our consolidated financial statements and notes have
  been rounded to the nearest thousand dollars, except per share amounts. Share
  amounts in the notes to consolidated financial statements are presented in
  thousands.
  
  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 ended September 30, 2004 are
  not necessarily indicative of the results that may be expected for the year
  ending June 30, 2005. Please refer to the footnotes to our consolidated
  financial statements as of June 30, 2004 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
                                                      September 30,
                                              ------------------------------
  
                                                   2004           2003
                                              --------------- --------------
  Numerator:
  Net income                                          $6,182         $6,542
                                              =============== ==============
  Denominator (in thousands):
  Denominator for basic earnings per
   share - weighted average shares
   outstanding during the period                      36,273         34,221
                                              --------------- --------------
  
  Effect of dilutive securities:
   Stock options                                         576            965
   Warrants                                                6            170
                                              --------------- --------------
                                                         582          1,135
                                              --------------- --------------
  Denominator for diluted earnings per
   share - adjusted weighted average
   shares and assumed conversions                     36,855         35,356
                                              =============== ==============
  Basic net income per share                          $ 0.17         $ 0.19
                                              =============== ==============
  Diluted net income per share                        $ 0.17         $ 0.19
                                              =============== ==============
  
  4. INVENTORIES
  
       Inventories consisted of the following:
  
                                         September 30,               June 30,
                                             2004                      2004
                                     ---------------------- ----------------------
         Finished goods                      $61,913                   $56,132
         Raw materials,
           work-in-progress
           and packaging                      31,196                    30,741
                                     ---------------------- ----------------------
                                             $93,109                   $86,873
                                     ====================== ======================
  
                                         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:
  
                                              September 30,         June 30,
                                                  2004                2004
                                            -------------------- -----------------
         Land                                     $  8,160              8,113
         Buildings and improvements                 30,106             29,867
         Machinery and equipment                    80,646             79,275
         Furniture and fixtures                      2,537              2,527
         Leasehold improvements                      3,610              3,478
         Construction in progress                    6,747              4,541
                                            -------------------- -----------------
                                                   131,806            127,801
  
         Less: Accumulated depreciation
                 and amortization                   43,970             40,799
                                            -------------------- -----------------
                                                  $ 87,836           $ 87,002
                                            ==================== =================
  
  6. ACQUISITIONS
  
       On June 3, 2004, we acquired 100% of the stock of privately-held Jason
  Natural Products, Inc., a California-based manufacturer and marketer of natural
  and organic personal care products. In recent years, Jason Natural Products has
  expanded its lines of natural and organic personal care products by integrating
  a series of brands including Orjene(R), Shaman Earthly Organics(TM), and
  Heather's(R) into its portfolio. The purchase price consisted of approximately
  $23.9 million in cash, plus the assumption of certain liabilities. At September
  30, 2004, goodwill (not deductible for tax purposes) from this transaction was
  estimated to be $22.9 million.
  
       On May 27, 2004, we acquired substantially all of the assets and assumed
  certain liabilities of the Rosetto(R) and Ethnic Gourmet(R) businesses of H.J.
  Heinz Company, LP, which owned approximately 16.7% of our common stock at the
  time of the transaction. These businesses produce and market frozen pasta and
  natural ethnic frozen meals, respectively. The purchase price consisted of
  approximately $22.8 million in cash, plus the assumption of certain liabilities.
  At September 30, 2004, goodwill (deductible for tax purposes) from this
  transaction was estimated to be $7.9 million.
  
       The following table summarizes the estimated fair values of assets acquired
  and liabilities assumed of Jason Natural Products, Rosetto, and Ethnic Gourmet
  at the dates of the acquisitions:
  
  Current assets                        $12,358
  Property and equipment                 12,871
  Other assets                              102
                                      ---------
  Total assets                           25,331
  Liabilities assumed                     4,321
                                      ---------
  Net assets acquired                   $21,010
                                      =========
  
       The balance sheet at September 30, 2004, includes the assets acquired and
  liabilities assumed valued at fair market value at the date of purchase. We are
  in the process of performing the procedures required to finalize the purchase
  price allocation for the above fiscal 2004 acquisitions; however, these
  procedures are in the early stages and are expected to be completed during the
  later half of fiscal 2005.
  
       The results of operations for the three months ended September 30, 2004
  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 the period shown. This information has not been adjusted to reflect
  any changes in the operations of these businesses subsequent to their
  
                                         8
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
  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, and discontinuation of sales of
  private label 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
                                           September 30, 2003
                                           ------------------
  Net sales                                  $  140,064
  Net income                                      5,921
  
  Earnings per share:
    Basic                                        $ 0.17
    Diluted                                        0.17
  
  Weighted average shares:
    Basic                                        34,221
    Diluted                                      35,356
  
       In management's opinion, the unaudited pro forma results of operations is
  not indicative of the actual results that would have occurred had the JASON(R),
  Rosetto(R) and Ethnic Gourmet(R) acquisitions been consummated at the beginning
  of the periods presented or of future operations of the combined companies under
  our management.
  
       On February 25, 2004, our subsidiary in Belgium acquired Natumi, AG, a
  German producer of non-dairy beverages and desserts marketed principally in
  retail channels in Europe. The purchase price consisted of approximately $1.75
  million in cash as well as the assumption of certain liabilities. The purchase
  price excludes the amount of contingency payments we are obligated to pay the
  former owner of Natumi. The contingency payments are based on the achievement by
  Natumi of certain financial targets over an approximate 3.5 year period
  following the date of acquisition. Such payments, which could total
  approximately 9 million euros, will be charged to goodwill if and when paid. No
  such contingency payments have been made since the acquisition. The net assets
  acquired, as well as the sales and operations of Natumi, are not material to the
  Company's consolidated financial position or results of operations and,
  therefore, have not been included in the detailed information about our
  acquisitions.
  
  7. CREDIT FACILITY
  
       On April 22, 2004, we entered into a new $300 million credit facility (the
  "Credit Facility") with a bank group led by our existing bank agents for a
  five-year term expiring in April 2009. The Credit Facility provides for an
  uncommitted $50 million accordion feature, under which the facility may be
  increased to $350 million. The Credit Facility is secured only by a pledge of
  shares of certain of our foreign subsidiaries and 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 and applicable
  margin) or, at our option, the reserve adjusted LIBOR rate plus an applicable
  margin. As of September 30, 2004, $93.7 million was borrowed under the Credit
  Facility at an interest rate of 2.8%.
  
  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.
  
                                         9
  THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-Continued
  
       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 ended September 30,
  2004 and 2003 would have been the pro forma amounts that follow:
  
                                                   Three Months Ended
                                                      September 30,
                                            ----------------------------------
                                                  2004               2003
                                            -----------------    -------------
  
  Net income, as reported                            $ 6,182           $6,542
  Non-cash compensation charge, net
  of related tax effects                                 150                7
  
  Stock-based employee compensation
  expense determined under fair value
  method, net of related tax effects                  (3,462)          (1,221)
                                            -----------------    -------------
  
  Pro forma net income                                $2,870           $5,328
                                            =================    =============
  
  Basic net income per share:
      As reported                                  $ 0.17            $ 0.19
                                                   ======            ======
      Pro forma                                    $ 0.08            $ 0.16
                                                   ======            ======
  
  Diluted net income per share:
      As reported                                  $ 0.17            $ 0.19
                                                   ======            ======
      Pro forma                                    $ 0.08            $ 0.15
                                                   ======            ======
  
                                         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 and natural and organic personal care 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 food brands as Celestial
  Seasonings(R) teas, Hain Pure Foods(R), Westbrae(R), Westsoy(R), Rice Dream(R),
  Soy Dream(R), Imagine(R), Walnut Acres Certified Organic(R), Ethnic Gourmet(R),
  Rosetto(R), Little Bear Organic Foods(R), Bearitos(R), Arrowhead Mills(R),
  Health Valley(R), Breadshop's(R), Casbah(R), Garden of Eatin'(R), Terra
  Chips(R), Harry's Premium Snacks(R), Boston's(R), Lima(R), Biomarche(R), Grains
  Noirs(R), Natumi(R), Milkfree, Yves Veggie Cuisine(R), DeBoles(R), Earth's
  Best(R), and Nile Spice(R). The Company's 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 natural and
  organic personal care product line is marketed under the JASON(R), Orjene(R),
  Shaman Earthly Organics(TM), and Heather's(R) brands. 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 September 30, 2004
  
       Net sales for the three months ended September 30, 2004 were $137.6
  million, an increase of $10.5 million or 8.3% over net sales of $127.1 million
  in the September 30, 2003 quarter. The increase came from volume increases
  principally in our snacks brands, which were up 12.6%, our Celestial Seasonings
  tea brand, which was up 4.6%, and our European business, which was up 20.5%.
  During the current year quarter, we benefited from the phasing in of price
  increases, the full effect of which is expected in future quarters, and from
  sales of businesses acquired in 2004. Sales of our Imagine Foods brands,
  acquired in December 2002, and Walnut Acres brands, acquired in June 2003, are
  included in each of the quarterly periods presented, while sales of our Jason
  Natural Products, Rosetto, Ethnic Gourmet and Natumi brands are included only in
  the current year quarter. Sales in the current year quarter were negatively
  impacted by reductions in inventories estimated at $12 million at two major
  distributors.
  
       Gross profit for the three months ended September 30, 2004 was 28.3% of net
  sales as compared to 29.2% of net sales in the September 30, 2003 quarter. The
  decline in gross profit percentage was principally the result of increases in
  transportation costs which began in the third quarter of Fiscal 2004 resulting
  from higher fuel costs, the cost effects of new regulations on the U.S. trucking
  industry, and an increase in the percentage of our shipments that are delivered
  by us. Also, we incurred higher cost of ingredients and higher personnel and
  benefits costs this period as compared to the prior year period. These higher
  costs were offset in part by the effect of the price increase phased in
  beginning July 1, 2004.
  
       Selling, general and administrative expenses increased by $2.4 million to
  $28.2 million for the three months ended September 30, 2004 as compared to $25.8
  million in the September 30, 2003 quarter. Such expenses amounted to 20.5% of
  net sales for the three months ended September 30, 2004 compared with 20.3% in
  the September 30, 2003 quarter. Selling, general and administrative expenses
  have increased in overall dollars, primarily as a result of costs
  
                                         11
  brought on by businesses acquired in 2004, increased consumer marketing expenses
  needed to support our increased sales as well as increases across all levels of
  general and administrative expenses to support our growing business. General and
  administrative expenses for the three months ended September 30, 2004 includes
  approximately $ .6 million for the cost of terminated employees and for non-cash
  compensation charges.
  
       Operating income was $10.8 million in the three months ended September 30,
  2004 compared to $11.3 million in the September 30, 2003 quarter. Operating
  income as a percentage of net sales was 7.8% in the September 30, 2004 quarter,
  compared with 8.9% in the September 30, 2003 quarter. The dollar and percentage
  decrease is a result of the aforementioned lower gross profit and higher
  selling, general and administrative expenses.
  
       Interest and other expenses amounted to $.7 million for the three months
  ended September 30, 2004 compared to $.8 million for the three months ended
  September 30, 2003. Our interest expense was $.4 million higher this quarter as
  compared to the prior year quarter, principally as a result of the higher
  average borrowings we carry this year after our recent acquisitions. We had $.2
  million in net currency exchange gains this quarter as compared to $.1 million
  in net currency exchange losses in the prior year quarter, which partially
  offset the additional interest costs.
  
       Income before income taxes for the three months ended September 30, 2004
  amounted to $10.1 million compared to $10.6 million in the comparable period of
  the prior year. This decrease was attributable to the decrease in operating
  income.
  
       Our effective income tax rate approximated 39% of pre-tax income for the
  three months ended September 30, 2004 compared to 38% for the three months ended
  September 30, 2003. We expect our effective tax rate to approximate 39% during
  the remainder of fiscal 2005.
  
       Net income for the three months ended September 30, 2004 was $6.2 million
  compared to $6.5 million in the September 30, 2003 quarter. The decrease of $.3
  million in earnings was primarily attributable to the aforementioned decrease in
  income before income taxes and the increase in our effective tax rate.
  
  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 $300 million Credit Facility through April 22,
  2009. The Credit Facility is secured only by a pledge of shares of certain of
  our foreign subsidiaries and 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 September 30, 2004, we
  had $93.7 million outstanding under the 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 the ability to develop our existing infrastructure through
  capital investment.
  
       Effective July 2004, we adjusted prices upward by 4% to 5% across certain
  of our U.S. businesses. We expect the increases will offset increased costs we
  have absorbed in fuel, freight and commodities, and should help offset future
  increased costs into the next production year as we renew procurement contracts.
  
       Net cash (used in) operations was $(6.8) million and $(6.7) million for the
  three months ended September 30, 2004 and 2003, respectively. Our working
  capital and current ratio was $128.6 million and 3.0 to 1, respectively, at
  September 30, 2004 compared with $130.0 million and 2.9 to 1 respectively, at
  June 30, 2004. The decrease in working capital resulted principally from the
  decrease in cash used to reduce debt during the three months ended September 30,
  2004.
  
       Net cash (used in) provided by financing activities was $(6.1) million and
  $10.5 million for the three months ended September 30, 2004 and 2003,
  respectively. The change between the quarters of each year was due principally
  to our pay down of approximately $6.8 million of debt under our U. S. and
  European credit lines during the Fiscal 2005 quarter, as compared to our
  borrowing approximately $10.8 million under our U. S. credit line in the Fiscal
  2004 quarter.
  
                                         12
  We believe that cash on hand of $9.8 million at September 30, 2004,
  projected remaining fiscal 2005 cash flows from operations, and availability
  under our Credit Facility are sufficient to fund our working capital needs,
  anticipated capital expenditures of approximately $9 million, and scheduled debt
  payments of approximately $9.5 million for the remainder of fiscal 2005. We
  currently invest our cash on hand in highly liquid short-term investments
  yielding approximately 1% interest.
  
  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 28% 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 approximated $6 million at September 30, 2004 and
  June 30, 2004.
  
       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.
  
  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.
  
                                         13
  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; our
  ability to implement our business and acquisition strategy; the ability to
  effectively integrate our acquisitions; our ability to obtain financing for
  general corporate purposes; competition; availability of key personnel; changes
  in, or the failure to comply with government regulations; and other risks
  detailed from time-to-time in the Company's reports filed with the Securities
  and Exchange Commission, including the report on Form 10-K for the fiscal year
  ended June 30m 2004. As a result of the foregoing and other factors, no
  assurance can be given as to future results, levels of activity and achievements
  and neither the Company nor any person assumes responsibility for the accuracy
  and completeness of these statements.
  
                                         14
  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 over financial
  reporting during the fiscal quarter covered by this report that have materially
  affected, or are reasonably likely to materially affect, those controls.
  
  Part II - OTHER INFORMATION
  
  ITEM 6. EXHIBITS
  
  Exhibit Number      Description
  --------------      -----------
  
                      The cross-reference for Exhibit 10.5 of the Company's Form
                      10-K for the fiscal year ended June 30, 2004, inadvertently
                      was incorrect. It should have read:
  
  10.5                Employment Agreement between the Registrant and Irwin D.
                      Simon, dated July 1, 2003 (incorporated by reference to
                      Exhibit 10.1 of the Registrant's Quarterly Report on Form
                      10-Q for the fiscal quarter ended September 30, 2003, filed
                      with the Commission on November 14, 2003).
  
  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.
  
                                         15
  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:    November 8, 2004             /s/ Irwin D. Simon
                                        ----------------------------------
                                        Irwin D. Simon,
                                        Chairman, President and Chief
                                        Executive Officer
  
  Date:    November 8, 2004             /s/ Ira J. Lamel
                                        ----------------------------------
                                        Ira J. Lamel,
                                        Executive Vice President and
                                        Chief Financial Officer
  
                                         16
  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: November 8, 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: November 8, 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
  September 30, 2004 (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: November 8, 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
  September 30, 2004 (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: November 8, 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.