Shares of organic and natural products maker Hain Celestial Group Inc. dropped nearly 9 percent Monday after the company disclosed it is being investigated by the Securities and Exchange Commission for its accounting practices.
The Lake Success-based company said in a regulatory filing late Friday that the SEC has issued a “formal order of investigation” and issued a subpoena seeking relevant documents. The company is responding to “the SEC’s request for information and intends to cooperate fully with the SEC,” according to the filing.
Hain Celestial’s shares fell $3.43 to close at $35.10 on the Nasdaq Stock Market Monday. Its shares are down more than 36 percent in the last six months.
Hain Celestial voluntarily contacted the SEC in August to notify it that the company was delaying the release of its financial results for its fourth quarter and fiscal 2016, ended June 30, as well as the performance of the independent review conducted by the audit committee of the company’s board of directors, the filing said.
In November the company said the audit committee found “no evidence of intentional wrongdoing” in connection with the company’s financial reporting after an independent review of its accounting with external counsel into whether revenue from certain U.S. distributors was recorded in the correct period.
Hain Celestial, whose brands include Celestial Seasonings tea, Earth’s Best baby food, Terra chips and Spectrum oils, had been recognizing revenue when products were shipped to certain distributors rather than when the products were sold through its distributors to customers.
In the filing Friday, Hain Celestial also said it will not release financial results for the quarter ended Dec. 31, 2016, by its original due date of Feb. 9. The company also has not filed results for the quarter ended Sept. 30.