Good day, ladies and gentlemen, and welcome to The Hain Celestial Fourth Quarter and Fiscal Year End 2014 Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, today's conference is being recorded. I would like introduce your host for this conference call Ms. Mary Anthes. You may begin ma'am.

Good morning, thank you, Kevin, and thank you, all, for joining us today. Welcome to Hain Celestial's fourth quarter and fiscal year 2014 earnings call. Irwin Simon, our Founder, President and Chief Executive Officer; John Carroll, Executive Vice President and Chief Executive Officer of Hain Celestial U.S.; and Steve Smith, Executive Vice President and Chief Financial Officer and several members of Hain Celestial's management team are with us today to discuss our results. Our discussion today includes forward-looking statements, which are current as of today's date. We do not undertake any obligation to update forward-looking statements, either as a result of new information, future events or otherwise. Our actual results may differ materially from what is described in these forward-looking statements, and some of the factors which may cause results to differ are listed in our publicly filed documents, including our 2013 Form 10-K filed with the SEC. A reconciliation of GAAP results to non-GAAP financial measures is available in our earnings release, which is posted on our website at www.hain.com under Investor Relations. This conference call is being webcast and an archive of the webcast will be available on our website under Investor Relations. Our call will be brief, so please limit yourself to one question, if time allows we will take additional questions and management will be available after the call for further discussions. Now let me turn the call over to Irwin Simon, our Founder, President and CEO. Irwin?

Thank you, Mary, and good morning. I hope everybody has had a chance to review our press release that was released at 7:30 this morning to review our fourth quarter fiscal 2014 and our outlook for 2015. Last year, as I said in this conference room, we reported for our fiscal 2013 $1.735 billion. This year, our guidance is somewhere between 2.763 and 2.82 up 59% from last year to this year. And adjusted earnings last year of this time for fiscal 2013 was $2.53. And this year as we go into fiscal 2015 guidance, it’s $3.72 to $3.90, up 51%. Wow! What a performance this company has made. We generated our largest sales quarter and of course our largest sales year in Hain Celestial’s history, up 26% to over $584 million, representing our 14th consecutive quarter of double-digit sales growth; the 14th consecutive quarter of double-digit adjusted earnings growth and high single organic growth in the quarter, wow! On an annual basis, our net sales were up over 24% to a record of $2.2 billion and our adjusted earnings grew 25% to $3.17. Some of the highlights of this year’s accomplishments include, our team completed two great strategic acquisitions of Tilda and Rudi’s Organic Bakery. Worldwide net sales surpassed $2 billion. We introduced over 200 new innovative products worldwide. Hain Celestial U.S. consumption measured by AC Nielsen was up 10.8% for 52 weeks ended July 5th. Hain Celestial UK grocery business grew over 9%. And we’ve achieved record EBITDA of $300 million, a 27% increase and productivity savings up $50 million. And last but not least, we were just named in fastest growing companies of the top 100 by FORTUNE Magazine, number 61. I appreciate all of the hard work from our global team. And trust me, I have…

Thank you, Irwin. Good morning. Q4 was a record quarter for Hain Celestial U.S. Key highlights included net sales of $323 million, up 13.2% versus year ago. Importantly, we had strong Q4 organic growth of 7.5%. This was achieved despite funding a $3 million shift to account-specific, point-of-sale programs. These programs, as we discussed last call, are classified as a reduction of sales. The impact of this shift reduced our net organic sales increase by a 100 bps from what would have been 8.5% to a still strong 7.5% organic sales increase. As Irwin mentioned, our latest 12-week Nielsen AOC consumption was up 10.7%, which significantly outperformed the AOC total channel growth of 1.2%. Our growth was achieved even as we lapped strong year-ago comps, and resulted in a two-year stack consumption gain of 19%. Our operating income increased to $52.3 million, up 24.5% versus year ago. And our Q4 operating income margin was 16.2%, which was up a 150 bps versus a year ago, reflecting gross margin improvement and increased leverage of our SG&A platform. Q4 was a strong ending to a record year for Hain Celestial U.S. 14 key highlights included net sales of $1,282 million which was up 17% versus year ago. Again importantly, we had strong organic growth of 8.5% for the year. This was achieved while funding a full year $12 million shift to account-specific, point-of-sale programs. Our FY14 operating income increased to $212 million, up 19.5% versus year ago and our FY14 operating income margin was 16.5%, up 30 bps versus year ago. Now, as we look towards FY15, as we always do, we look at five key factors to judge the health of our business. These five key factors are consumption trends; AOC distribution growth; innovation; productivity and our most recent acquisition’s performance.…

Thank you, John and good morning everyone. It is hard to believe that almost a year has passed since I joined the team here at Hain. I can’t thank Irwin and the rest of the management team enough for their support and for welcoming me so much into the Hain family. We have accomplished a lot in this past year, but I certainly look forward to the opportunities we face in 2015 and beyond. I'm going to take you through the financial highlights of the fourth quarter and the fiscal year and then we'll have a few comments on guidance. If not stated, amounts I will be discussing are from continuing operations. We had another terrific quarter from the sales perspective; key drivers included the following items. Our acquisitions of the Tilda and Rudi's businesses increased sales by $71 million in the current quarter with each of these businesses showing strong growth under our ownership versus the same period last year. Our performance versus a year ago was also benefited by currency movements. However, the benefit versus the guidance we’ve provided in May was nominal, as currency rates underlying our guidance were very consistent with average rates for the quarter in our most significant foreign currencies. As John mentioned, increased point of sales tradesman activities, the practice we increased in the second quarter of this year and which is shown as a reduction of net sales reduced sales by approximately 40 basis points versus a year with an offset and reduced SG&A spend. Finally, the additional month we own the Ella's business in the quarter as compared to last year was essentially offset by other business we divested off during the year. Our adjusted earnings from continuing operations was $0.90 per diluted share, compared to $0.65 per share in last…

Thank you Steve, thank you John. Now, I’d like to turn it over to questions. Mary?

(Operator Instructions). Our first question comes from Bill Chappell with SunTrust.

Good morning Bill.

Good morning Irwin. Can you talk a little bit more on the spreads business in the UK, just trying to understand it? Obviously the business took a pretty big upswing this quarter versus last and just trying to understand, is that sustainable; I mean did this new distribution kind of kick in this past quarter so we’ll see that continue in the next two, three quarters or is that -- and/or should we see it start to moderate as the soup becomes a bigger part of the mix?

So, Bill, good question, I have Jeremy Hudson, actually sitting here with me who runs our Hain Daniels operations. But when we bought these brands, we knew that they were not spent against, number one; number two, there was no innovation against these; and number three, we looked at placement on the shelves. And with that we have improved placement on the shelves; we have innovated; we have focused on Gale's, we have focused on Sun-Pat peanut butter, we have focused on Hartley, both the pods and jams and focused on Frank Cooper. So, absolutely sustainable, absolutely we think there is additional opportunities we’re going to launch in the first quarter, our first advertising campaign and going against kids products. So, Bill, we think it’s sustainable with lots of runway and growth especially in the nut-butter business peanut butter business, Sun-Pat and Gale's honey where we’ve -- actually Sun-Pat is the number one peanut butter and we just think there is tremendous opportunity there. And Gale's where [Rouses] has been a number one honey, we think there is good opportunity there. So, and we’ve also now have spent capital in our Histon facility which will get margin improvement and efficiencies. The other thing that has happened for us, we’ve had a lot of private label business that was lost when we were acquiring the business. And there is some big tenders up for bid right now and we’re looking to be able to win them.

And just to clarify, this all came last quarter; I mean the major distribution gains kind of kicked in last quarter or…

Major distribution came in the back half and that was in the third and fourth quarter, but we had a big fourth quarter. The other thing, just to mention, this group will be taking on our non-dairy business in the UK where it was handled before through a third party distributor and throughout our European group. So now the sales team and grocery team will now be handling our Imagine, our Rice Dream, Soy Dream, Almond Dream et cetera in the UK. So the grocery team will continue to focus on other grocery products.

Great, I will get back in the queue. Thanks.

Thanks Bill.

Our next question comes from Sean Naughton with Piper Jaffray.

Good morning. Thanks for taking the questions.

Good morning, Sean.

Good morning, Irwin. So real quick, just on the overall just the gross margin; can you disaggregate maybe just a little bit further the 40 basis points of expansion that you saw in the quarter where that really came from? And then just maybe a bigger picture question for you Irwin. You talked a lot about the international distribution gains and a lot of the stuff that’s going on here domestically where you can sell more Hain products. But can you talk a little bit about how your business is doing in the online channels and do you think this could over time begin to make up a more meaningful portion of your business? Thanks.

So first, I am going to let Steve -- what I will do here, I will be like a traffic cop. I will let Steve talk on the margin piece; I will let John talk about our online business because every retailer we go today along with Amazon wants to talk about online and they’re focused online; and then I will talk about on a global basis. Okay? And I’ll have Jeremy just talk about online in the UK business. So go ahead, Steve.

Okay. So the increase in the margin in the quarter came primarily from the U.S. and UK, despite the trade spend shift that we talked about on the call and that John and I both discussed. The U.S. gross margin was up versus the prior year, that's a function of the productivity initiatives that we've been talking about all the year taking in and we had said a lot of that would be backend loaded. And then in the UK, we had very strong quarter from the sweet spreads business and also from our Tilda business.

Okay. That answers your question Sean?

Yes, that's helpful. Thank you.

Hey John, do you want to just talk about our online business and…

Sure. So here, we’ve been saying this for a while. In regard to our top account, Amazon is a top 10 account for Hain Celestial and it's growing quite strongly. But even more importantly, look; we look at online as probably the most disruptive event in the grocery space since Wal-Mart entered into grocery. So every key player whether it would be Amazon, Amazon Fresh or Wal-Mart talking about their online business or Kroger talking about their online business that's what they want to be talking to you about right now. So as a result, we’ve actually made a commitment to that and staffed up on the online side for both our sales piece as well as look, content is huge as you are trying to sell your product online and so we’ve staffed up in digital media as well. But we think that this will be a huge growth area for the business going forward for at least the next three years, if not longer.

Jeremy?

I’d echo John's comments. I think in the UK was seen all of the major multiple retailers engaging more clearly with their online offerings and looking for [those] suppliers to help them in terms of how they're offering products to the consumer. So, just as in the U.S. we see that was a key growth area going forward and we’ve got to invest into right people to make sure that we leverage that as much as we can.

And Shaun, just on that. Number one, last year we didn’t have a social media team in place here under (inaudible). We now have a social media team in place. We have over 12 million moms a month between Ella's and that visit our site from a global standpoint over 60. Just in regards to MaraNatha yesterday, we're able to talk consumers immediately to ensure they don't get frustrated. They can’t get through our consumer awareness line. But more important is this here, when we have the mom line and they're searching our sites, how do we direct them to buy? And a matter of fact in some cases, we got them buying, bring online ourselves but on the other hand as John said, every retailer we spend time with today, they are coming to us and how do we tie into their online and specially with mothers, that is number one, who they want basically. So, if you go back and look what our business has done with first direct, what has done with Amazon, what has done in the UK with online business. And we've been out busy in retailers and that is the number one topic, how we tie back into your online business.

Okay, that's good to hear. Congrats on a nice Q4 and best of luck in ’15.

Thank you.

Our next question comes from Andrew Lazar with Barclays.

Good morning, Andrew.

I just want to come back gross margins for a minute. Just first off as a clarification in the fourth quarter, obviously as you talked about your gross margins were up year-over-year and sequentially obviously made a big improvement given the productivity and such. I think it may have come in, for the full year, maybe a bit below what you are guiding towards at least last quarter. So I'm just trying to get a sense of what changed there, whether it was input cost or what have you? And then more importantly as you look out to ‘15, your underlying gross margin guidance if you are excluding HPP, still looks for some improvement there. So, I'm just trying to get a sense of the key pieces right, get sense of what your inflation looks like it will be fiscal 15, you did some pricing in April. Is that pricing enough to -- on its own offset the inflation you're looking for, how much of the productivity you are expecting will have to be also used to help cover inflation, if any? So, I'm trying to get sense of what the pieces are there, thank you.

Good morning Andrew. I think there is a number of questions there, we may have to ask you to repeat some of them. But just to start off I believe the guidance that we gave for the full year was in May was 27% to 27.1%.

Right.

So, we hit the 27%. We were impacted slightly in the quarter by mix, because we're slightly below the guidance for the quarter and that's primarily due to mix.

Okay. And then right as we look out to ‘15, you have got some underlying margin expansion targeted for gross margin and trying to get a sense of just the piece is there. What are you looking for inflation to be in ‘15 at this point? Has the pricing that you've already announced in April enough to offset that and i.e. how much of the productivity needs to be used to cover inflation?

So, for fiscal 15, we continue to, we see some slight operating margin expansion and that's kind of come we believe that soup is going to have a good strong business. Next year, we believe a lot of the issues that we faced earlier in the year and those challenges have been resolved. And so we're expecting soup which is a good margin business for us to show decent improvement versus fiscal ‘14. In addition, as we’ve said previously Project Castle as it comes up, ramps up we’ll show accretive gross margin to the overall business having Tilda in the business for the full year will help slightly as well.

Our European Non-Dairy business now at our plant up and running Andrew. And of course Andrew price as you start to get the full year of price it ultimately will help from a margin standpoint and as you heard me say before, we’re looking for $50 million plus of productivity that’s built into our margin for fiscal 2015.

Got it. And then just, do you have number yet or expectation on what you think your overall inflation will look like for the year?

It’s a 3% to 4%.

Okay. Got it. Thank you.

And we like where we see corn prices and certain commodity prices fuel prices. I mean unfortunately we’re not seeing all elements move that way but -- and being in this business there is always puts and takes in that.

Yes.

The good thing about having diversified portfolio is managing that. I think the other big thing just Andrew on that is I think one of the big things today which I didn’t touch on is the global productivity team that we have around the world today sourcing products, and that is the big factor within Hain. The big thing is last year as we dealt with at our stocks and being able to get our hands on certain commodities hopefully we’re overcome a lot of those that will help our sales and help our overall margins. As we’re out there today sourcing 99% of our products they’re GMO free organic, they’re Sourcing organic and GMO free products is something that we think we one of the best at and we’ll continue to do efficiently.

Thank you.

And Andrew just the other thing we did i.e. you’ve mentioned something on our Hain pure-protein I think we did give our margins on Hain Pure-Protein.

Yes, I was talking about underlying base margins before HPP. Thank you.

Okay.

Our next question comes from Andrew Wolf of BB&T Capital Markets. Andrew Wolf - BB&T Capital Markets: Hi. First just wanted to revisit your numbers I think I heard when you discussed the UK business, I think Irwin you said that grocery ex-Tilda was up 9%. Then I heard another number, sorry I heard grocery up 9% then I heard ex-Tilda up 17%, so is the grocery sort of consumption and the ex-Tilda’s sales?

Well I think one was for the quarter Andy. Andrew Wolf - BB&T Capital Markets: Okay.

The grocery business for the quarter was up 25%, Hain Daniels in total was up for the year was up over 9%, grocery was up 9% for the year 25% for the quarter and the overall business was up 17% Hain Daniels. Andrew Wolf - BB&T Capital Markets: Okay. So 25% for the quarter was the ex-Tilda business or what…

No 25% was -- it’s in spreads business our grocery business, the overall Hain Daniels business total business was up 17%. Andrew Wolf - BB&T Capital Markets: Got it. So that 25% is driven by the distributions gains you highlight?

It’s driven by distribution gains, driven by new product innovation and picking up new listings. Andrew Wolf - BB&T Capital Markets: Okay.

Which is distribution gains. Andrew Wolf - BB&T Capital Markets: But I assume -- are you able to still -- I mean are you getting enough, how do you get the consumption data there is it from a syndicated sources or straight from the retailers?

It's Nilson's, we’ve had Nilson's comes out six months there, so it's actually syndicated Nilson numbers or IRI either or same thing. Andrew Wolf - BB&T Capital Markets: Can you indicate if is it, if you getting better products in the innovation and healthy and so forth. Have you seen an increase yet in the …

Absolutely, we're seeing some of the best shares then we've ever seen on these products and up high-single-digits from a share standpoint. Andrew Wolf - BB&T Capital Markets: Okay. That's what I was looking to get to.

And Andy, I mean in the UK, let me tell you they are great retailers like here but they really study your consumption, your movement and that's how you get to further promotions et cetera. So the other big thing which part of our big change in the UK also with different types of promotions, I mean it seems like everything we want sale for pound and we've changed a lot of that, we are 2 for 3 pounds now and have raised our promotional levels and we're seeing this growth with better promotions. Andrew Wolf - BB&T Capital Markets: Okay. And just the last thing on the UK, I think there were some issues with soup lines with soup season coming up is that squaring away?

I'll let Jeremy answer that, because then we just can hold this seat to the fire make sure. If I say it -- as I say that's we saying is the man that has got make it happen that's why -- he has got to make it happen. Go ahead Jeremy.

Thanks Irwin. We've built some ongoing investment in both of our soup factories obviously through over the last couple of months in the next month, it's our quite period. So that's typically when we would make most of our investments so we are on track for everything to be stuffed properly when the soup season picks up towards the end of September. Andrew Wolf - BB&T Capital Markets: Okay. So, have you had to reengineer or add lines I mean what was the ultimate solution to get in?

There's been some reconfiguration of the lines to get better efficiencies and we've also put a new filling machine in again to get better efficiencies. So, there's been some replacements and some reconfiguration as well. Andrew Wolf - BB&T Capital Markets: Okay. And my last question for John is on Rudi's consumption acceleration and distribution gains, is that more on the either side of the business gluten-free versus organic or was it pretty balanced in growth?

Andy, we are seeing nice gains across both. In the natural channel we're seeing more gains against organic and in the AOC we're seeing stronger gains against gluten-free, but both sides of the business are performing well.

And Andy, we do spend against Rudi's contrary to whether other people have thought and we will continue to spend against the Rudi's brand and it will become one of the biggest gluten-free product lines out there. So stay tuned to what's going to happen with the Rudi's brand. Also, we expand against all our acquisitions, the key point of that is, that's how Ella’s Kitchen became the number one baby food in the UK. Andrew Wolf - BB&T Capital Markets: Yes, actually, obviously, we've seen a lot of your point of sale, company specific. So that gets me to last question. John, you identified I think last quarter you just want to concentrate the marketing and spending in three places. You mentioned social media first and I think you gave us a taste of where you're going with that, but could you just help us understand a little more, is that going to be a direct to consumer effort or is that going to be more through the retailers and the online retailers like Amazon?

Sure. Andy, basically we spend our money in three areas right and we talked about this last time, one is digital marketing, second is shopper marketing at specific customers and innovation. In regard to our spend on digital and social media, it will be both direct to customers and also in co-ordination with the key retailers be they online or bricks and mortar guys. Andrew Wolf - BB&T Capital Markets: Thank you.

Sure.

Our next question comes from Scott Mushkin with Wolfe Research.

Hey guys, thanks for taking my questions. So, I want to get to the U.S. discuss a lot here and obviously great quarter and nice guidance for next year. But the organic growth expectations in the U.S. when we look at it, I think John from -- you had some pretty big wins this year that you are going to start cycling, already you’ve been doing that. How do we think of the non-core in the U.S. business as we look at ‘15 from an organic growth -- for organic growth?

Sure. So, what I said was for the year, our organic growth was at 8.5%. As you look at next year or ‘15 the year we're in, there is a couple of really big opportunities that we're going to leverage to continue drive our growth. First one is Celestial Tea did not have a strong tea season last year in the mass channel and we're already seeing our mass turnaround our Wal-Mart growth numbers are very, very strong on Celestial Tea. So, we expect that will be a big play for us in terms of driving growth. Second on Earth's Best, the leading grocer in the country Kroger has moved Earth's Best from the natural section to the mainline section. So we think that will be a strong play for us in terms of accelerating our growth. Third thing is snacks have been on fire for us. Right now, Sensible Portions and Garden of Eatin's AOC consumption is up 30%; Terra is up 25% and we’ve got some great go forward drivers on that in terms of increased distribution growth. For example, Sensible Portions is now available in the top three grocery chains, Safeway; Publix; and Kroger, whereas a year ago we weren’t in any of those guys. Terra has seen nice gains in distribution at Wal-Mart and Publix. Garden of Eatin' picked up a slot at everyday slot at Sam’s and three new SKUs at Publix. So, take that plus the personal care turnaround we’re seeing in terms of AOC and a continued momentum on Spectrum and some other brands, we think we’re pretty well positioned to continue to drive strong organic growth despite going at some very strong comps.

So, that’s really good description. So, like mid to high single-digits, is that what we should think on, on the organic side still or is it…

No. I think Scott that is exactly what I would use.

Mid to high single-digits? Okay, great. And then John, kind of keeping on your business for a second here, as we look at acquisitions, is it getting easier to integrate them vis-à-vis technology? So that’s one question, as A. And then B would be when you look out at acquisitions, what categories do you think look exciting, maybe this is for Irwin more, what categories in U.S. look exciting, is there a place where you like to be bigger?

I’ll handle the integration piece. And it is actually getting easier to do because over the last couple of years, we have brought every U.S. business unit on to our IT platform as opposed to running separate systems. And with the exception of Greek Gods and that will be brought on, on October 1st. So, we have really gotten quite good at driving in acquisition closing it and then getting our IT folks there the day after. And then the other key process that’s really gotten stronger for us is productivity and applying our productivity process to recent acquisitions. So, I think integration has gotten easier but -- and that coupled with the fact that we are focused on leveraging our sales force to drive distribution across channels. I think we are pretty well poised to continue to look for handful of bolt-on acquisitions every year in the U.S.

And Scott, you heard what I said before just on our growth alone by 2018; we’ll reach $3.5 billion, $3.8 million just on growth of those doing any acquisitions. And if you can back at things this year between Tilda Rudi’s and Hain Pure Protein that we did in July, together it was almost close to $0.5 billion of acquisitions. So with that there is categories; I still continue to see the fresh category in many, many ways where there is good opportunity of growth as Hain moves away from the center of the store more and more into fresh and today whether it’s our yogurts or our meat-free, I think there is still a big opportunity in meat-free and how we expand upon that. I think there is so many more opportunities in the yogurt category which we’ll continue to expand with Greek Gods and we’ve done with our non-dairy business, taking it into non-dairy. And as you step back today where we buy on a global basis and just as we are doing now, we acquired Tilda, Tilda will get us into the Middle East with Hain products, will get us into India but Tilda was very small in North America and John and Beena and their teams are going to launch Tilda here in a much bigger way. At the same time, we’ll look to launch Hain products into the ethnic market. But the big market for us too is foodservice. And whether it's [chopped, chipotle], they will sell a lot of our products and the same when Hain Pure Protein. We're seeing a lot of acquisitions, smaller companies that could be in the $7 million to $20 million and you put them through the Hain infrastructure, they could be $100 million brands. And we also have some small brands that as we’ve not focused on and that are flat or down that we're going to come back and look at them whether it’s spread shops, whether it's Nile Spice, how we grow our DeBoles business and there is the portfolio of brands within Hain that we should be focusing on and growing those. So…

Thank you.

If you’re asking me if there is $1 billion acquisition out there to do, the answer is no. And I think what smaller companies are seeing is thereby yourself to grow today is very, very difficult.

That's great commentary. I have more questions but I think I’ll try to take them offline. Thanks guys, I appreciate it.

Thank you, Scott.

The next question comes from Amit Sharma with BMO Capital Markets.

Good morning, Amit.

Couple of modeling questions. Steve, you talked about seasonality for the consolidated sales. Can you provide some commentary around seasonality at the divisional level; what is it in U.S. and how should we model the UK business from seasonality perspective? And then John, you talked about trade spending impact on organic sales. Can you touch on unify inventory reduction as well, how much impact it had on the quarter and what are we expecting it for the back half of this calendar year? And then for Irwin from a big picture point of view, I think some of gross margin questions are also, especially in U.S. sort of touching on, as you’re growing faster in AOC channels and consumer in those channels are probably a little bit more price sensitive than they are in some of other national specialty channels, does that have any impact on gross margins going forward? If not, what are the steps that you are taking to overcome that? Thanks.

Okay. So, I’ll be the traffic cop again. You had the chance to ride in the mall down, we’ll get these. So Steve, do you want to just check, go through his question on seasonality…

Sure. So, in terms of the seasonality, I would take a look at our historical filings where we give on a segment basis, we provide revenues on a quarterly basis by segment and take a look at the cadence there. In terms of the big changes there is primarily in the UK business with the acquisition of Tilda where the second quarter of our fiscal year will be strongest. We’ll be strongest with Tilda because it’s just -- with the holidays. And then in terms of the rest of the UK business, soup season will be important to us this year, so second quarter will be a strong quarter for us. And then as project [Castle] ramps up over the course of the year, we'll see growth from the [Castle] business. So, that's the additional color I can add to the seasonality by segment.

Does that answer your question, Amit?

So, nothing much changes in the U.S.; is that what inferences, Steve? Historical patent should hold in U.S. and seasonality is generally because of what's happening in UK?

Right, exactly.

Okay.

Okay.

So, let's pick up on the unify piece. Unify has been implementing their IO system which is obviously their inventory optimization system. We have addressed it in Q3, now in Q4, they will continue through Qs 1 and 2 of our new fiscal year and it's been reflected in our guidance.

And just on that, I think John you’ve given -- we've talked about a number, it's somewhere..

It's here between 1 to 2 weeks of inventory.

Right. Which is somewhere between $16 million to $20 million that came around in the back -- in the second half of this year. And that was built into our guidance and built into our guidance going into fiscal 2015 as approximately much on.

Same store number.

Yes.

Look and this is where driving business in channels we haven't done before in terms of stronger growth on online and things of that sort in our guidance to offset it.

And I think that comes back, I mean just back to what you're asking John, I think what's Hain today how well diversified, there is no one brand represents more than 19%, there is no one customers and we're diversified and certain things will always happen in the business you have puts and take and how we offset hopefully we have more puts and takes. And that's how we're able to offset them and that's to have a diversified portfolio the advantage of that. And your question to me on scale and margin, actually moving into grocery, it's a higher margin business for us. But I think one of the big things that we look at Hain is the consumer is always going to have to pay more for an organic or genetically modified free product or a cleaner product it’s just, it costs more to make the ingredients are more, we like to leave it and get it that to 10% to 15% closer to the 10%, if we could get it to the 5%, what as we come back and look at today and you’ve seen it whether it’s BluePrint, whether it’s Rudi's whether some of the Tilda, Ella's as we integrate these businesses and get the efficiencies back into The Hain model its money that we’re going to be able to spend back on the brand, its money that we’re going to be able to spend back against pricing that allows us to have pricing to parity closer to conventional products. Our research and our study shows the consumer will pay more and a perfect example of that is in baby food today, where you’re seeing conventional baby food declining, where you’re seeing organic baby food increasing a perfect example of that was in the UK with Ella’s becoming the number one baby food and where Heinz was for a long time, at the same time because of the competitiveness Plum pulled out of the marketplace in the UK. So, from our standpoint scale, efficiency, purchasing and I think that’s a key asset within Hain that we have today as one of the largest procurer of organic and GMO free ingredients, the efficiencies to help our margin, and help our pricing.

And I think that’s what I was trying to get to. The key is that even though we see price pattern or getting closer to or pricing gap at conventional narrowing, what you’re saying is that the productivity and other initiatives will prevent any margin dilution from that, is that fair to say?

I think listen, I will not sit here and say it’s not going to create some margin dilution I think that’s our intention it’s not it’s margin accretion that’s what we are all about, but I think the other big thing is as you heard me say today just step back for a second, if we’re $2.7 billion and we grow just organically to $3.8 billion, add a $1 billion on sales here. Without adding to the infrastructure in a big way, there is going to be margin accretion, there is going to be SG&A accretion here, and scale and size and I think that’s big thing within Hain today the infrastructure that’s set up to grow to a $4.5 billion, $5 billion company in place and yes we’ll have to add some other people and infrastructure and CapEx et cetera. But scale would absolutely get us there but the big thing is what I am not saying today is my objective is to bring our price down at parity to conventional foods because that’s not where it is and that’s it cost more. But again it’s a premium that’s affordable and it should not be just for the 1%, 2% and I mean it is going to happen, when whole foods and Sprouts opening up more and more stores and more and more demographics, it’s not only in the 1%, 2% geographic areas that they are going to open up stores and as Walmart, Target, Kroger, Publix, Tesco, Sainsbury sell organic food price is going to be to something important there.

Got it. Thank you very much.

Amit, just to clarify something that I said to you a couple of minutes ago, in terms of the Tilda seasonality obviously the fourth quarter of our fiscal is the strongest quarter of the four quarters, but of the two quarters that have not yet been in our numbers the second quarter of our fiscal is going to be higher than the first quarter of the fiscal for Tilda.

Got it, that’s really helpful, thanks Steve.

Our next question comes from Scott Van Winkle with Canaccord.

Thanks. Steve, following up on that comment on the cadence quarter-by-quarter, it was either in the call or I read in the press release you are expecting earnings growth in Q2, 3, 4 to be relatively consistent. I would’ve thought with the big contribution from Pure Protein and maybe the second strongest quarter from Tilda that Q2 might be the biggest growth in earnings. I'm wondering if you can comment on that or if I misread it?

What I said in my prepared remarks is that with respect to earnings, the first quarter is typically our smallest quarter with the other quarters relatively consistent as a percentage of the full year. So they’re relatively consistent, but that doesn't necessary I mean that they are all equal, they are all within acquaint to of each other, they're still some goods and services that we incur on somewhat discretionary basis as the timing within the year that some of that is going to shift between quarters. So for now that's the best color I can provide to you and over the course for the year, we'll provide more commentary as the year progresses.

Great, thanks. And then John the 8.5% internal growth that you talked about for the U.S. and I think that was impacted modestly by moved a point of sale tradesman. Is that adjusted or in any way or is that kind of the net internal sales growth?

That's the net internal sales growth and to your point the trade shift cost disappoints. So that would have been 9.5 without the trade piece.

Perfect. And then we're going to cycle through that change obviously this year. Is there any, is it specific to channels, I mean if we think about your business in grocery and mass maybe growing faster than natural on distribution gains et cetera, et cetera. Do you see an edge up or an edge down in that trade spend percentage?

I don't see an increase in the overall trade. I see that we're going to climb over this for two more quarters because it's a change in our strategy to get, to simply just have everything we do on trade be attached to price because as Irwin said, we want to make sure that our deltas are sharper than they have ever been before.

Great. Thank you very much.

Sure.

Thank you, Scott. Two more questions.

Our next question comes from Kevin Grundy with Jefferies.

Hi. Good morning guys. Thanks for question. So, what if you come back to Southeast next, John your commentary was helpful there, but a few questions I guess embedded here and the context being it's about I guess 20% of your mix in that sort of range and you guys are comping like 30% kind of growth which is tremendous so just striving north 60% of your growth at least recently, in recent months. So the questions are kind of around how sustainable is that sort of growth given that the category is growing 3% to 3.5%. I know, John you touched on some of the distribution gains that you're getting, where do you see that normalizing? What is the expectation for '15 in your guidance? And then maybe some commentary around growth rates in [non-scan] channels would be helpful. Thank you.

Sure. Sure, Kevin. So, here, in regard to snacks, you're right. We're currently growing between Garden and Sensible up 30% plus and Terra up 25% in the AOC universe. Look, there are shipments are running plus 20. We think that you'll see our snacks momentum still be north of 20% in FY15. Just given the different initiatives then we have as I talked about, whole notion in Sensible Portions being now in the top three grocery customers where it wasn’t a year ago; Terra picking up; increased distribution at Wal-Mart and Publix and Garden of Eatin’ picking up distribution; Sam’s, Publix and some other places. The other thing is we’ve got some great innovation. We’ve got -- Sensible Portions has got four SKUs that we developed closely with a specific mass retailer that will hit the shelves in October, which will be incremental distribution for us. And then last thing is that Terra, new package, the bounce we got from the Terra new package is unlike anything I’ve ever seen in my career before. But to say even if snacks were to slow, there are other pieces of the business that are really picking up momentum. We talked about the Celestial tea, Wal-Mart turnaround. We talked about the notion of EB picking up mainline distribution at Kroger, the personal care continuing to gain momentum. So, Kevin, I think it's fair to say, look; will snacks slow down? Look, I hope not but it’s -- we’ve been on Terra. My point is that there seems to be enough offsets on the other parts of the business that we should still be able to deliver the organic growth that we talked about. And then to that end, that’s what the FY15 guidance reflects, which is continued overall growth, organic growth in the mid to high single-digits going forward.

And Kevin, I think the big thing here is what the consumer wants is healthy snacks. And even if the snack category did not grow, there is a big enough category to take consumption away from existing brands and that's what our objective is and you can back and think about it. When we acquired Sensible Portions, it was a plus $50 million plus business; today, it’s well over a $100 million plus business and skewed towards the healthy snack, the re-launch on Terra Chips that the team has done. And in this past quarter, we saw Terra Chips up 25% from an AOC standpoint, and our Garden of Eatin' Chip. So and stay tuned for what we’re going to see. We see popcorn as a hot category, kids snacks with Earth's Best and Ella's is some of the things that we’ll continue to introduce. We’ve introduced a lot of products under the Bearitos name that were a lot of whether it’s Pita Chips or types of other snacking products as you’re seeing. So we have a lot in the snack category today. And as you heard me say, it’s close to quarter of $1 billion category for us. And we think if you look at categories where there is tremendous growth that is one where we think it’s going to grow a lot faster than any of our other businesses.

Thanks guys. Can I have one quick follow-up; is it your sense that you guys are gaining share from your largest competitor in the category?

Our sense is we’re gaining share from conventional players in the category.

Right.

Okay.

Which is -- well, I don’t know, who you’re meaning by our largest competitor. But I think what’s happened is there has been a lot of transfer of smaller snack assets in the category recently. And I think that’s where we’re grabbing share; plus I think, as John said, the consumer moving over from mainstream brands and coming over with healthier, looking for healthier products is where we’re gaining share from.

Very good. Thanks for the time. Good luck guys.

All right, thank you. I think that’s our last question for the day. I want to thank everybody for listening to our call in the late days of August. Again, I want to thank The Hain team for what they’ve done and we have been through a lot over the last three months, six months and the year just as we look at our business moving forward, the first two months of our first fiscal 2015 are almost behind us and we are seeing good strong consumption in sales orders in July and August and you heard us what our consumption numbers as of July 10. So we continue to see the trend and the trend’s moving definitely in the right direction. It really is exciting to move up to number 61 on the 100 fastest growing companies in 2014 of Forbes, again as I look to move within the top 10 it’s something exciting. And I always say I always want Hain to be listed as one of the best places to work on Fortune Magazine too and that’s something we strive to do with our people. You heard me say at the beginning last year at this time as we announced earnings $1.7 billion and our forecast this year is 2.7 billion, that is acquisitions and growing $1 billion in sales and acquisitions are a part of it but again it’s managing these acquisitions, integrating these acquisitions, taking over the teams, the procurement, the manufacturing and by the way running it along side with your current business and I think it’s something that we have done great and our growth is just not coming from acquisitions, it’s coming from our existing brands and we’ll continue to do that. So with that, as I have said before, there is lots of runway out there for us, there is lots of white space, there is more and more retailers selling healthier foods, as we’ve put in place today our global procurement team to procure. And last but not least as we put in place our quality control teams around the world to work with our manufacturers, to work with our plans. And when we do have a little bump in a road like we had with MaraNatha, how do we deal with it, how do we ensure safety and quality for our consumers, and it’s something that we'll do. With that, I want to thank everybody for their time today. And I want to wish everybody a safe rest of the summer, a safe summer and your holiday weekend ensure that at least you have one or two or three or it could go to four of Hain products. Thank you very much.