<PAGE>
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 0-22018
CELESTIAL SEASONINGS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 84-1097571
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4600 SLEEPYTIME DRIVE, BOULDER CO 80301-3292
(Address of principal executive offices, including zip code)
(303) 530-5300
(Registrant's telephone number, including area code)
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
requirements for the past 90 days.
Yes [X] No [ ]
As of April 30, 1996 the Registrant had 4,047,711 shares of Common Stock, $0.01
Par Value, outstanding. This report on Form 10-Q contains 14 pages.
- - --------------------------------------------------------------------------------
<PAGE>
CELESTIAL SEASONINGS, INC.
INDEX
-----
PART I - FINANCIAL INFORMATION
- - ------------------------------
PAGE(S)
-------
ITEM 1. FINANCIAL STATEMENTS
Unaudited consolidated income statements 3
Unaudited consolidated balance sheets 4
Unaudited consolidated statements of cash flows 5
Notes to unaudited consolidated financial statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7-10
PART II - OTHER INFORMATION
- - ---------------------------
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
2
<PAGE>
CELESTIAL SEASONINGS, INC.
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
Case volume 1,437 1,456 2,859 2,679
Net sales $ 23,950 $ 24,232 $ 47,582 $ 45,357
Cost of goods sold 8,755 8,588 17,505 16,243
-------- -------- -------- --------
Gross profit 15,195 15,644 30,077 29,114
Operating expenses:
Selling and marketing 8,757 9,416 18,907 17,859
General and administrative 1,153 1,255 2,205 2,769
Amortization of intangibles 356 496 742 977
-------- -------- -------- --------
Total operating expenses 10,266 11,167 21,854 21,605
Operating income 4,929 4,477 8,223 7,509
Interest expense 215 278 471 657
-------- -------- -------- --------
Income before income taxes 4,714 4,199 7,752 6,852
Income taxes 1,873 1,052 3,059 1,850
-------- -------- -------- --------
Net income $ 2,841 $ 3,147 $ 4,693 $ 5,002
======== ======== ======== ========
Net income per common share $ 0.69 $ 0.77 $ 1.14 $ 1.23
======== ======== ======== ========
Weighted average common shares 4,126 4,077 4,109 4,077
======== ======== ======== ========
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
CELESTIAL SEASONINGS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
ASSETS
March 31, September 30,
1996 1995
------------- -------------
Current assets:
Cash and cash equivalents $ 272 $ 375
Accounts receivable,
net of allowance (Mar.-$138 Sept.-$71) 9,104 5,298
Inventory 7,741 7,721
Deferred income taxes 651 835
Prepaid expenses 404 660
--------- ---------
Total current assets 18,172 14,889
Property, plant and equipment, net 16,712 16,645
Intangible assets, net 13,830 14,139
Goodwill, net 5,683 5,791
Deferred income taxes 46 229
Other assets 1,446 1,634
--------- ---------
Total assets $ 55,889 $ 53,327
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,657 $ 3,516
Accrued liabilities and wages 4,898 4,161
Accrued income taxes 933 564
Accrued interest payable 57 54
Current portion of long-term debt 358 355
--------- ---------
Total current liabilities 10,903 8,650
Long-term debt 8,268 12,768
Commitments
Stockholders' equity:
Common stock, $.01 par value-authorized
15,000,000 shares;
Mar.-issued 4,047,303 shares, outstanding
4,042,303 shares
Sept.-issued 4,041,378 shares, outstanding
4,036,378 shares 40 40
Capital surplus 33,122 33,006
Retained earnings (Accumulated deficit) 3,651 (1,042)
Treasury stock, 5,000 shares of common stock
at cost (95) (95)
--------- ---------
Total stockholders' equity 36,718 31,909
--------- ---------
Total liabilities and stockholders' equity $ 55,889 $ 53,327
========= =========
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
CELESTIAL SEASONINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Six Months Ended
March 31,
-----------------
1996 1995
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,693 $ 5,002
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 519 420
Amortization of intangibles 742 977
Amortization of financing fees 112 112
Deferred income taxes 367 (31)
Changes in operating assets and liabilities:
Accounts receivable (3,806) (1,902)
Inventory (20) (2,035)
Prepaid expenses 256 (104)
Accounts payable 1,141 2,344
Accrued liabilities and wages 737 1,304
Accrued income taxes 369 248
Accrued interest payable 3 41
------- -------
Net cash provided by operating activities 5,113 6,376
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (586) (713)
Increase in intangible assets (325) (373)
Investment in affiliate -- (80)
Decrease in other assets 76 18
------- -------
Net cash used in investing activities (835) (1,148)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issuance 116 42
Acquisition of treasury stock -- (95)
Increase in long-term debt 5,470 1,200
Reduction in long-term debt (9,967) (6,287)
------- -------
Net cash used in financing activities (4,381) (5,140)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (103) 88
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 375 266
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 272 $ 354
======= =======
CASH PAID FOR INTEREST $ 338 $ 502
CASH PAID FOR INCOME TAXES $ 2,323 $ 1,633
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
CELESTIAL SEASONINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
Basis of Presentation - Each fiscal quarter includes thirteen weeks. The
Company's second fiscal quarter ends on the last Saturday of March. For
presentation purposes, however, the second fiscal quarter is presented as if it
ended on March 31.
The unaudited consolidated financial statements include the accounts of the
Company and its subsidiaries. Intercompany balances have been eliminated in
consolidation.
Interim Financial Information - The financial information contained herein
is unaudited but includes all normal and recurring adjustments which, in the
opinion of management, are necessary to present fairly the information set
forth. The unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements which are included in the
Company's Annual Report on Form 10-K for the year ended September 30, 1995. The
Company's business is seasonal; therefore, results for interim periods are not
necessarily indicative of results to be expected for the fiscal year of the
Company ending September 30, 1996. The Company believes that the report filed on
Form 10-Q is representative of its financial position, its results of operations
and its cash flows for the periods ended March 31, 1996 and 1995 covered
thereby.
2. DETAIL OF INVENTORY ACCOUNTS
March 31, September 30,
1996 1995
--------- -------------
Raw materials and supplies $ 5,131 $ 4,850
Work in process 804 1,057
Finished goods 2,210 2,693
------- -------
8,145 8,600
Less inventory reserves 404 879
------- -------
Total $ 7,741 $ 7,721
======= =======
3. LEGAL PROCEEDINGS
On May 5, 1995, a purported stockholder of the Company filed a lawsuit,
Schwartz v. Celestial Seasonings, Inc. et.al., in the United States District
- - ---------------------------------------------
Court for the District of Colorado (Civil Action Number: 95-K-1045), in
connection with disclosures by the Company concerning the Company's license
agreement with Perrier Group of America, Inc. which was terminated on January 1,
1995. In addition to the Company, the complaint names as defendants certain of
the Company's present and former directors and officers, PaineWebber, Inc.,
Shearson/Lehman Brothers, Inc., and Vestar/Celestial Investment Limited
Partnership. The complaint, which was pled as a class action on behalf of
persons who acquired the Company's common stock from July 12, 1993 through May
18, 1994, sought money damages from the Company and the other defendants for the
class in the amount of their loss on their investment in the Company's common
stock, punitive damages, costs and expenses of the action,and such other relief
as the court may order.
On November 6, 1995, the federal district court granted a motion by
Celestial and the other defendants to dismiss the case. The court's order became
final on December 11, 1995, after the plaintiff failed to amend the complaint
within the time permitted by the trial court. The plaintiff filed a notice of
appeal of the trial court's decision and, on January 31, 1996, submitted a brief
with the United States Court of Appeals for the Tenth Circuit.
6
<PAGE>
CELESTIAL SEASONINGS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SEASONALITY
The Company's business is seasonal and its quarterly results of operations
reflect the results of increased demand for the Company's hot herb tea products
in the cooler months of the year. The following table sets forth selected
unaudited quarterly consolidated financial and operational data for the six most
recent quarters.
<TABLE>
<CAPTION>
Quarter Ended
--------------------------------------------------------------------
Fiscal 1996 Fiscal 1995
-------------------- -------------------------------------------
Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
-------- ------- ------- ------- ------- -------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Case sales 1,437 1,422 831 764 1,456 1,223
Net sales $23,950 $23,632 $13,482 $11,265 $24,232 $21,125
Gross profit 15,195 14,882 7,746 5,895 15,644 13,470
Operating income 4,929 3,294 849 822 4,477 3,032
Operating margin 20.6% 13.9% 6.3% 7.3% 18.5% 14.4%
Net income $ 2,841 $ 1,852 $ 480 $ 385 $ 3,147 $ 1,855
Percent of fiscal year net sales N/A N/A 19.2% 16.1% 34.6% 30.1%
</TABLE>
The Company has experienced quarterly fluctuations in sales volume and
operating results when compared to previous years due to a number of factors,
including the timing of trade promotions, advertising and consumer promotional
expenditures. The Company, as is common in the tea industry, offers trade
promotions for limited time periods on specific items in order to provide
incentives for the purchase and promotion of products. The impact on case sales
from period to period due to the timing and extent of such trade promotions can
be significant.
RESULTS OF OPERATIONS
The following table is derived from the Company's unaudited consolidated
income statements for the periods indicated and presents (i) the results of
operations as a percentage of net sales and (ii) the percentage change in the
dollar amounts of each item from the prior period.
<TABLE>
<CAPTION> Period-to-Period
Percentage of Net Sales Percentage Increase/(Decrease)
-------------------------------------- ------------------------------
Three Months Six Months
Three Months Ended Six Months Ended Ended Ended
March 31, March 31, March 31, March 31,
------------------ ---------------- ------------ ------------
1996 1995 1996 1995 1996 to 1995 1996 to 1995
----- ----- ----- ----- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0% (1.2)% 4.9%
Cost of goods sold 36.6 35.4 36.8 35.8 1.9 7.8
----- ----- ----- -----
Gross profit 63.4 64.6 63.2 64.2 (2.9) 3.3
Selling and marketing 36.5 38.9 39.7 39.4 (7.0) 5.9
General and administrative 4.8 5.2 4.6 6.1 (8.1) (20.4)
Amortization of intangibles 1.5 2.0 1.6 2.1 (28.2) (24.1)
----- ----- ----- -----
Operating income 20.6 18.5 17.3 16.6 10.1 9.5
Interest expense 0.9 1.2 1.0 1.5 (22.7) (28.3)
----- ----- ----- -----
Income before income taxes 19.7 17.3 16.3 15.1 12.3 13.1
Income taxes 7.8 4.3 6.4 4.1 78.0 65.4
----- ----- ----- -----
Net income 11.9% 13.0% 9.9% 11.0% (9.7)% (6.2)%
===== ===== ===== =====
</TABLE>
7
<PAGE>
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1995
Net sales. Net sales for the three months ended March 31, 1996 decreased 1.2%
to $24.0 million from $24.2 million for the comparable period in fiscal 1995.
Case sales decreased 1.3% to 1,437,000 cases from 1,456,000 cases. Fiscal 1995
case and net sales reflect sales of bottled iced tea, a product now licensed to
Royal Crown Company, Inc. and not included in the comparable period of fiscal
1996.
Gross profit. Gross profit for the three months ended March 31, 1996 decreased
2.9% to $15.2 million from $15.6 million for the comparable period in fiscal
1995. The Company's gross profit margin decreased to 63.4% from 64.6% for the
comparable prior year period. The decline in gross margin was driven, in large
part, by the liquidation of a discontinued product.
Selling and marketing expenses. Selling and marketing expenses for the three
months ended March 31, 1996 decreased 7.0% to $8.8 million from $9.4 million for
the comparable period in fiscal 1995, and decreased as a percentage of net sales
to 36.5% from 38.9%. The decrease in selling and marketing expenses primarily
was due to a decrease in trade promotion expenses. This decrease was partially
offset by an increase in advertising expenses.
General and administrative expenses. General and administrative expenses for
the three months ended March 31, 1996 decreased 8.1% from the comparable period
in fiscal 1995, and decreased as a percentage of net sales to 4.8% from 5.2%.
The decrease is primarily due to spending controls implemented by the Company
which resulted in reduced expenses in several areas.
Amortization of intangibles. Amortization of intangibles, including
amortization of goodwill and other intangible assets for the three months ended
March 31, 1996, decreased 28.2% from fiscal 1995. Amortization of intangibles
was lower for fiscal 1996, as compared to fiscal 1995, as certain intangible
assets became fully amortized or were written off. These reductions were
partially offset by increases in amortization on new additions to artwork and
plates resulting from the Company's continued development of new products and
improved packaging.
Operating income. Operating income for the three months ended March 31, 1996
increased 10.1% from the comparable period in fiscal 1995. Operating income as
a percentage of net sales increased to 20.6% from 18.5% primarily due to reduced
operating expenses.
Interest expense. Interest expense for the three months ended March 31, 1996
declined 22.7% from the comparable period in fiscal 1995 as a result of reduced
outstanding borrowings.
Income taxes. Income tax expense for the three months ended March 31, 1996
increased 78.0% from the comparable period in fiscal 1995. The increase in
income tax expense primarily was due to the utilization of net operating loss
carryforwards in fiscal 1995 and realization of deferred tax assets during
fiscal 1995 for which valuation allowances had been provided in accordance with
SFAS No. 109 in prior periods. These items were not available for use in fiscal
1996.
8
<PAGE>
SIX MONTHS ENDED MARCH 31, 1996 COMPARED TO THE SIX MONTHS ENDED MARCH 31, 1995
Net sales. Net sales for the six months ended March 31, 1996 increased 4.9% to
$47.6 million from $45.4 million for the comparable period in fiscal 1995. The
increase primarily was attributable to an increase in case sales of 6.7% to
2,859,000 cases from 2,679,000 cases. Case sales growth was the result of
increased sales of the Company's herb and specialty black hot tea products and
new product sales. This increase in sales volume reflects increased shipments
to the Company's traditional channels of distribution as well as expansion into
other channels.
Gross profit. Gross profit for the six months ended March 31, 1996 increased
3.3% to $30.1 million from $29.1 million for the comparable period in fiscal
1995. The Company's gross profit margin decreased to 63.2% from 64.2% for the
comparable prior year period. The decline in gross margin was driven, in large
part, by the liquidation of a discontinued product.
Selling and marketing expenses. Selling and marketing expenses for the six
months ended March 31, 1996 increased 5.9% to $18.9 million from $17.9 million
for the comparable period in fiscal 1995, and increased as a percentage of net
sales to 39.7% from 39.4%. The increase in selling and marketing expenses
primarily was due to an increase in advertising expenses. This increase was
partially offset by a decrease in trade promotion expenses.
General and administrative expenses. General and administrative expenses for
the six months ended March 31, 1996 decreased 20.4% from the comparable period
in fiscal 1995, and decreased as a percentage of net sales to 4.6% from 6.1% for
the same period of the prior fiscal year. The primary reason for the decrease in
general and administrative expenses was a one-time charge incurred in the first
quarter of fiscal 1995 related to the Company's acquisition efforts.
Amortization of intangibles. Amortization of intangibles, including
amortization of goodwill and other intangible assets for the six months ended
March 31, 1996, decreased 24.1% from fiscal 1995. Amortization of intangibles
was lower for fiscal 1996, as compared to fiscal 1995, as certain intangible
assets became fully amortized or were written off. These reductions were
partially offset by increases in amortization on new additions to artwork and
plates resulting from the Company's continued development of new products and
improved packaging.
Operating income. Operating income for the six months ended March 31, 1996
increased 9.5% from the comparable period in fiscal 1995, primarily due to
increased net sales. Operating income as a percentage of net sales increased to
17.3% from 16.6% as operating expenses decreased as a percentage of net sales.
Interest expense. Interest expense for the six months ended March 31, 1996
declined 28.3% from the comparable period in fiscal 1995 as a result of reduced
outstanding borrowings.
Income taxes. Income tax expense for the six months ended March 31, 1996
increased 65.4% from the comparable period in fiscal 1995. The increase in
income tax expense primarily was due to the utilization of net operating loss
carryforwards in fiscal 1995 and realization of deferred tax assets during
fiscal 1995 for which valuation allowances had been provided in accordance with
SFAS No. 109 in prior periods. These items were not available for use in fiscal
1996.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The operations of the Company historically have been funded with a combination
of internally generated funds and external borrowings. Purchases of inventory,
marketing expenditures, support of accounts receivable and payment of principal
and interest under the Company's credit facility have historically been, and are
expected to remain, the Company's principal recurring uses of funds for the
foreseeable future. The Company's other principal uses of funds in the future
will be the development of new or existing products, including the Company's
iced teas and nutraceutical products, and the possible acquisition of brands,
product lines or other assets. The Company expects its primary sources of
financing for its future business activities will be funds from operations plus
borrowings under the credit facility. The Company currently believes that funds
from operations and funds expected to be available under the credit facility are
likely to be sufficient to meet operating and capital requirements unless a
significant acquisition were made.
Cash and cash equivalents decreased by $0.1 million for the six months ended
March 31, 1996. Cash provided by operating activities was $5.1 million for the
six months ended March 31, 1996. The Company's investing activities used cash of
$0.8 million, and the Company's financing activities used cash of $4.4 million
for the six months ended March 31, 1996.
The Company incurred capital expenditures of approximately $911,000 during the
six months ended March 31, 1996, including $586,000 primarily for factory
equipment and $325,000 for the design and development of new packaging artwork.
The Company anticipates making capital expenditures of approximately $2.0 to
$2.5 million in fiscal 1996.
10
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- - --------------------------
The information in Note 3 to the Unaudited Consolidated Financial Statements
included in Part I is incorporated herein.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- - ------------------------------------------------------------
The annual meeting of stockholders of the Company was held on February 8, 1996.
The following matters were submitted to a vote of the stockholders:
(a) Election of directors - Two Class II directors were elected to serve until
the 1999 annual meeting of stockholders and until successors are elected.
TOTAL VOTES FOR TOTAL VOTES WITHHELD
--------------- --------------------
Ronald V. Davis 3,615,512 38,278
John D. Howard 3,615,512 38,278
Incumbent Class III directors with terms expiring in 1997 are Mo Siegel and
James P. Kelley. Incumbent Class I directors with terms expiring in 1998 are
Leonard Lieberman and Marina Hahn.
(b) Approval of an amendment to the Company's Employee Stock Purchase Plan -The
proposal was approved by a vote of 3,318,392 shares in favor, 222,998
shares against, and 10,179 shares abstaining.
(c) Appointment of independent auditors - The proposal to ratify the
appointment of Deloitte & Touche LLP as the Company's certified public
accountants for the fiscal year ending September 30, 1996 was approved by a
vote of 3,643,123 shares in favor, 5,480 shares against, and 5,187 shares
abstaining.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - -----------------------------------------
(a) Exhibits
--------
Exhibit No. Description
- - ----------- -----------
23.1 - Report of Deloitte & Touche LLP on consolidated financial
statements
(b) Reports on Form 8-K
-------------------
There were no reports on Form 8-K for the quarter ending March 31, 1996.
11
<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.
CELESTIAL SEASONINGS, INC.
(Registrant)
May 10, 1996 BY: /s/ Darrell F. Askey
--------------------
Darrell F. Askey
Vice President - Finance, Secretary and Treasurer
(Principal Financial Officer)
12
<PAGE>
INDEX TO EXHIBITS
The following exhibits are filed pursuant to Item 601 of Regulation S-K.
Sequentially
Numbered
Exhibit No Description Pages
- - ---------- ----------- ------------
23.1 - Report of Deloitte & Touche LLP on consolidated 14
financial statements
13
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
Celestial Seasonings, Inc.:
We have reviewed the accompanying consolidated balance sheet of Celestial
Seasonings, Inc. ("Company") and subsidiaries as of March 31, 1996 and the
related consolidated statements of income and cash flows for the three-month and
six-month periods ended March 31, 1996 and March 31, 1995. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of the Company and subsidiaries as of
September 30, 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated November 7, 1995, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying consolidated balance sheet as of
September 30, 1995 is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
Deloitte & Touche LLP
Denver, Colorado
April 17, 1996
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CELESTIAL
SEASONINGS, INC.'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 272
<SECURITIES> 0
<RECEIVABLES> 9,242
<ALLOWANCES> (138)
<INVENTORY> 7,741
<CURRENT-ASSETS> 18,172
<PP&E> 25,564
<DEPRECIATION> (8,852)
<TOTAL-ASSETS> 55,889
<CURRENT-LIABILITIES> 10,903
<BONDS> 8,268
0
0
<COMMON> 40
<OTHER-SE> 36,678
<TOTAL-LIABILITY-AND-EQUITY> 55,889
<SALES> 47,582
<TOTAL-REVENUES> 47,582
<CGS> 17,505
<TOTAL-COSTS> 17,505
<OTHER-EXPENSES> 21,854
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 471
<INCOME-PRETAX> 7,752
<INCOME-TAX> 3,059
<INCOME-CONTINUING> 4,693
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,693
<EPS-PRIMARY> 1.14
<EPS-DILUTED> 1.14
</TABLE>
