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In a blog post last week I said I had asked Hain Celestial (NASDAQ:HAIN) what its growth rate would be if it stopped making acquisitions. I said I’d follow up in one or more of the multiple mediums in which I appear, which I did, in the Weekend Wall Street Journal.

Turns out, however, the company didn’t answer the question; it ignored it completely.

The Journal story (as was the case with my hit today on CNBC’s Power Lunch) focused on Hain’s organic growth, which may or may not be a telltale sign of possible problems.

Meanwhile, an analysis of Hain’s cash flow suggests that if you strip out capital spending and the cost of acquisitions and adjust for options-related tax benefits the company's free cash flow has been more in the red than the black.

Hain management doesn’t believe subtracting acquisitions is an “accurate” measure of the true ability of its operations to generate cash. “We are more concerned with what our operating activities bring to the table in cash flows, rather than the impact that the cash cost of an acquisition has on those cash flows,” the company said in a written response to my questions. “We believe our acquisition expenditures are successful when they provide incremental cash flows from operations.”

Which precisely is why they should be included in the calculation of cash flow – a point on which we’ll have to agree to disagree.

Source: Hain Celestial: Without Acquisitions, How Much Growth?