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Item 1. Financial Statements

2021-05-06 compared with 2021-02-09 · 248 added, 226 removed, 797 unchanged (37% of the section changed)

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CONSOLIDATED BALANCE SHEETS (UNAUDITED)

DECEMBER 31, 2020 AND JUNE 30, 2020

MARCH 31, 2021 AND JUNE 30, 2020

(In thousands, except par values)

December 31, June 30,

March 31, June 30,

Current assets:

44 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021 AND 2020

(In thousands, except per share amounts)

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

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Interest and other financing expense, net 2,030 4,037 6,820 15,068

Other (income) expense, net ( 1,045 ) 1,244 ( 2,418 ) 2,572

Income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees 11,665 3,210 13,865 ( 1,957 )

Provision for income taxes 8,438 1,020 21,400 489

Equity in net loss of equity-method investees 1,076 338 1,095 655

Net income (loss) from continuing operations $ 2,151 $ 1,852 $ ( 8,630 ) $ ( 3,101 )

Other expense (income), net 1,566 ( 260 ) ( 852 ) 2,312

Income from continuing operations before income taxes and equity in net (income) loss of equity-method investees 45,981 15,358 59,846 13,401

Provision (benefit) for income taxes 11,797 ( 10,242 ) 33,197 ( 9,753 )

Equity in net (income) loss of equity-method investees ( 70 ) 564 1,025 1,219

Net income from continuing operations $ 34,254 $ 25,036 $ 25,624 $ 21,935

Net (loss) income from discontinued operations, net of tax — ( 697 ) 11,255 ( 105,581 )

1 unchanged sentence

Net income (loss) per common share:

Basic net income (loss) per common share from continuing operations $ 0.02 $ 0.02 $ ( 0.09 ) $ ( 0.03 )

Basic net income (loss) per common share from discontinued operations — ( 0.03 ) 0.11 ( 1.01 )

Basic net income per common share from continuing operations $ 0.34 $ 0.24 $ 0.25 $ 0.21

Basic net (loss) income per common share from discontinued operations — ( 0.01 ) 0.11 ( 1.01 )

Basic net income (loss) per common share $ 0.34 $ 0.23 $ 0.36 $ ( 0.80 )

Diluted net income (loss) per common share from continuing operations $ 0.02 $ 0.02 $ ( 0.09 ) $ ( 0.03 )

Diluted net income (loss) per common share from discontinued operations — ( 0.03 ) 0.11 ( 1.01 )

Diluted net income per common share from continuing operations $ 0.34 $ 0.24 $ 0.25 $ 0.21

Diluted net (loss) income per common share from discontinued operations — ( 0.01 ) 0.11 ( 1.01 )

Diluted net income (loss) per common share $ 0.34 $ 0.23 $ 0.36 $ ( 0.80 )

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( LOSS) (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021 AND 2020

(In thousands)

Three Months Ended

December 31, 2020 December 31, 2019

March 31, 2021 March 31, 2020

Tax (expense) benefit After-tax amount Pre-tax

Tax (expense) benefit After-tax amount

Net income (loss) $ 2,140 $ ( 964 )

Net income $ 34,254 $ 24,339

Other comprehensive income (loss):

Foreign currency translation adjustments before reclassifications $ 1,672 $ — 1,672 $ ( 52,315 ) $ — ( 52,315 )

Reclassification of currency translation adjustment included in Net income from continuing operations, net of tax 14,725 — 14,725 — — —

Change in deferred gains (losses) on cash flow hedging instruments

322 ( 68 ) 254 134 ( 25 ) 109

Change in deferred (losses) gains on net investment hedging instruments

Change in deferred gains (losses) on net investment hedging instruments

3,810 ( 800 ) 3,010 — — —

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$ 20,529 $ ( 868 ) $ 19,661 $ ( 52,181 ) $ ( 25 ) $ ( 52,206 )

Total comprehensive income $ 45,184 $ 47,733

Six Months Ended

December 31, 2020 December 31, 2019

Total comprehensive income (loss) $ 53,915 $ ( 27,867 )

Nine Months Ended

March 31, 2021 March 31, 2020

amount Tax (expense) benefit After-tax amount Pre-tax

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Foreign currency translation adjustments before reclassifications $ 80,491 $ — 80,491 $ ( 42,602 ) $ — ( 42,602 )

Reclassification of currency translation adjustment included in Net income (loss) 1,181 — 1,181 95,120 — 95,120

Reclassification of currency translation adjustment included in Net income from continuing operations, net of tax 15,906 — 15,906 95,120 — 95,120

Change in deferred gains (losses) on cash flow hedging instruments

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CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2020

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021

(In thousands, except par values)

Common Stock Additional Accumulated

Common Stock Additional Other

Amount Paid-in Retained Treasury Stock Comprehensive

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Balance at December 31, 2020 109,339 $ 1,095 $ 1,180,062 $ 616,486 9,500 $ ( 245,651 ) $ ( 97,343 ) $ 1,454,649

Net income 34,254 34,254

Other comprehensive income 19,661 19,661

Issuance of common stock pursuant to stock-based compensation plans

127 1 ( 1 ) —

Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans

49 ( 2,018 ) ( 2,018 )

Repurchases of common stock 204 ( 8,562 ) ( 8,562 )

Stock-based compensation expense 3,698 3,698

Balance at March 31, 2021 109,466 $ 1,096 $ 1,183,759 $ 650,740 9,753 $ ( 256,231 ) $ ( 77,682 ) $ 1,501,682

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2019

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2020

(In thousands, except par values)

Common Stock Additional Accumulated

Common Stock Additional Other

Amount Paid-in Retained Treasury Stock Comprehensive

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Balance at December 31, 2019 109,019 $ 1,091 $ 1,164,618 $ 586,593 4,658 $ ( 111,022 ) $ ( 120,197 ) $ 1,521,083

Net income 24,339 24,339

Other comprehensive loss ( 52,206 ) ( 52,206 )

Issuance of common stock pursuant to stock-based compensation plans

Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans

20 ( 523 ) ( 523 )

Repurchases of common stock 2,439 ( 57,406 ) ( 57,406 )

Stock-based compensation expense 3,761 3,761

Balance at March 31, 2020 109,089 $ 1,092 $ 1,168,378 $ 610,932 7,117 $ ( 168,951 ) $ ( 172,403 ) $ 1,439,048

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019

FOR THE NINE MONTHS ENDED MARCH 31, 2021 AND 2020

(In thousands)

Six Months Ended December 31,

Nine Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

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Net income (loss) from discontinued operations 11,255 ( 105,581 )

Net loss from continuing operations ( 8,630 ) ( 3,101 )

Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities from continuing operations:

Net income from continuing operations 25,624 21,935

Adjustments to reconcile net income from continuing operations to net cash provided by operating activities from continuing operations:

Depreciation and amortization 37,768 40,069

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Purchases of property, plant and equipment ( 53,062 ) ( 46,961 )

Proceeds from sale of businesses and other 4,427 13,120

Proceeds from sale of businesses, net and other 27,094 14,428

Net cash used in investing activities from continuing operations

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Shares withheld for payment of employee payroll taxes ( 3,741 ) ( 1,506 )

Net cash (used in) provided by financing activities from continuing operations

Net cash used in financing activities from continuing operations

( 110,956 ) ( 18,917 )

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Net cash flows used in discontinued operations

Net increase (decrease) in cash and cash equivalents 22,850 ( 2,502 )

Net increase in cash and cash equivalents 15,243 2,023

Cash and cash equivalents at beginning of period 37,771 39,526

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019

(In thousands)

Cash and cash equivalents included in the line item Assets held for sale on the Consolidated Balance Sheets as shown below, represents amounts included within held for sale accounting related to the sale of the Company's U.K.

fruit business, primarily consisting of the Orchard House Foods Limited business and associated brands.

Six Months Ended December 31,

Cash and cash equivalents $ 46,813 $ 37,024

Cash and cash equivalents classified in assets held for sale 13,808 —

Total cash and cash equivalents shown in the Consolidated Statements of Cash Flows $ 60,621 $ 37,024

See notes to consolidated financial statements.

THE HAIN CELESTIAL GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except par values and per share data)

(Amounts in thousands, except par values and per share amounts)

The Hain Celestial Group, Inc., a Delaware corporation (collectively, along with its subsidiaries, the “Company,” and herein referred to as “Hain Celestial,” “we,” “us” and “our”), was founded in 1993 and is headquartered in Lake Success, New York.

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Hain Celestial sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, drug and convenience stores in over 75 countries worldwide.

The Company manufactures, markets, distributes and sells organic and natural products under brand names, with ma ny recognized brands in the various market categories it serves, including Celestial Seasonings ® , Clarks™, Cully & Sully ® , Dream ® , Earth’s Best ® , Ella’s Kitchen ® , Farmhouse Fare™, Frank Cooper’s ® , GG UniqueFiber ® , Gale’s ® , Garden of Eatin’ ® , Hain Pure Foods ® , Hartley’s ® , Health Valley ® , Imagine ® , Joya ® , Lima ® , Linda McCartney's ® ™ (under license), MaraNatha ® , Natumi ® , New Covent Garden Soup Co.

The Company manufactures, markets, distributes and sells organic and natural products under brand names, with ma ny recognized brands in the various market categories it serves, including Celestial Seasonings ® , Clarks™, Cully & Sully ® , Earth’s Best ® , Ella’s Kitchen ® , Farmhouse Fare™, Frank Cooper’s ® , GG UniqueFiber ® , Gale’s ® , Garden of Eatin’ ® , Hain Pure Foods ® , Hartley’s ® , Health Valley ® , Imagine ® , Joya ® , Lima ® , Linda McCartney's ® ™ (under license), MaraNatha ® , Natumi ® , New Covent Garden Soup Co.

® , Robertson’s ® , Sensible Portions ® , Spectrum ® , Sun-Pat ® , Terra ® , The Greek Gods ® , William’s™, Yorkshire Provender ® and Yves Veggie Cuisine ® .

The Company’s personal care products are marketed under the Alba Botanica ® , Avalon Organics ® , Earth’s Best ® , JASON ® , Live Clean ® , One Step ® and Queen Helene ® brands.

The Company continues to execute the four key pillars of its strategy to:

The Company continues to execute the four key pillars of its strategy:

(1) simplify its portfolio;

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In fiscal 2020, the Company divested its Tilda business and its Arrowhead Mills ® , SunSpire ® , Europe's Best ® , Casbah ® , Rudi’s Gluten-Free Bakery ™ , Rudi’s Organic Bakery ® and Fountain of Truth ™ brands.

During the first quarter of fiscal 2021, the Company divested its Danival ® business.

Additionally, in January 2021, subsequent to the end of second quarter of fiscal 2021, the Company completed the sale of its U.K.

fruit business, primarily consisting of the Orchard House ® Foods Limited business and associated brands.

Assets and liabilities of this business are classified as held for sale in the Company's Consolidated Balance Sheet as of December 31, 2020.

See Note 4, Assets Held for Sale and Discontinued Operations , for additional information.

In fiscal 2021, the Company divested Danival ® , its U.K.

fruit business, primarily consisting of the Orchard House ® Foods Limited business and associated brands, and subsequent to the quarter ended March 31, 2021, the Company completed the sale of both WestSoy ® and Dream ® .

Productivity and Transformation Costs

In fiscal 2019, the Company announced a strategy that includes as one of its key pillars identifying areas of cost savings and operating efficiencies to expand profit margins and cash flow.

As part of this overall strategy and the key pillar of realizing savings and efficiencies, during fiscal 2020, the Company began the integration of its United States and Canada operations in alignment with the North America reportable segment structure.

In fiscal 2019, the Company announced an initiative that sought to identify areas of cost savings and operating efficiencies to expand profit margins and cash flow.

As part of this initiative, during fiscal 2020, the Company began the integration of its United States and Canada operations in alignment with the North America reportable segment structure.

In addition, during fiscal 2021, the Company initiated cost reduction programs for its international businesses in the United Kingdom and Europe.

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These dispositions represented strategic shifts that had a major impact on the Company’s operations and financial results, and therefore, the Company is presenting the operating results and cash flows of the Tilda operating segment and the Hain Pure Protein reportable segment within discontinued operations in the current and prior peri ods.

Se e Note 4, Assets Held for Sale and Discontinued Operations , for additional information.

Se e Note 4, Dispositions , for additional information.

BASIS OF PRESENTATION

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The unaudited consolidated financial statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair presentation for interim periods.

Operating results for the six months ended December 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021.

Operating results for the nine months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021.

Please refer to the Notes to the Consolidated Financial Statements as of June 30, 2020 and for the fiscal year then ended included in the Form 10-K for information not included in these condensed notes.

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The Company maintains an allowance for expected uncollectible accounts receivable which is recorded as an offset to trade accounts receivable on the Consolidated Balance Sheets.

Effective July 1, 2020, collectability of accounts receivable is assessed by applying a historical loss-rate methodology in accordance with Accounting Standards Codification ("ASC") Topic 326, Financial Instruments - Credit Losses , adjusted as necessary based on the Company's review of accounts receivable on an individual basis, specifically

identifying customers with known disputes or collectability issues, and experience with trade receivable aging categories.

The Company also considers market conditions and current and expected future economic conditions to inform adjustments to historical loss data.

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ASU 2020-04 is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022.

The Company is currently assessing the impact that this standard will have on its consolidated financial statements.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

Scope , which clarifies certain provisions in Topic 848, if elected by an entity, to apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform.

The Company is currently assessing the impact that these standards will have on its consolidated financial statements.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements - Disclosures .

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This ASU is effective for fiscal years beginning after December 15, 2020.

This ASU will not affect the Company's results of operations, cash flows or financial position.

The Company is currently assessing the impact that this standard will have on its consolidated financial statements.

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The following table sets forth the computation of basic and diluted net income (loss) per share:

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

Net income (loss) from continuing operations $ 2,151 $ 1,852 $ ( 8,630 ) $ ( 3,101 )

Net income from continuing operations $ 34,254 $ 25,036 $ 25,624 $ 21,935

Net (loss) income from discontinued operations — ( 697 ) 11,255 ( 105,581 )

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Effect of dilutive stock options, unvested restricted stock and unvested restricted share units

1,765 305 883 297

Diluted weighted average shares outstanding

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Basic net income (loss) per share excludes the dilutive effects of stock options, unvested restricted stock and unvested restricted share units.

Due to the net loss from continuing operations in the six months ended December 31, 2020 and 2019, all common stock equivalents such as stock options and unvested restricted stock awards have been excluded from the computation of diluted net loss per common share because the effect would have been anti-dilutive to the computations in the period.

There were 211 and 485 restricted stock awards and stock options excluded from our calculation of diluted net income (loss) per sha re for the three months ended December 31, 2020 and 2019, respectively, as such awards were anti-dilutive.

Additionally, there were 1,419 and 2,550 stock-based awards excluded for the three months ended December 31, 2020 and 2019, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

There were 709 and 689 restricted stock awards and stock options excluded from the calculation of diluted net income (loss) per share for the six months ended December 31, 2020 and December 31, 2019, respectively, as such awards were anti-dilutive.

Additionally, there were 1,429 and 2,745 stock-based awards excluded for the six months ended December 31, 2020 and December 31, 2019, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

There were 4 and 512 restricted stock awards and stock options excluded from our calculation of diluted net income per share for the three months ended March 31, 2021 and 2020, respectively, as such awards were anti-dilutive.

Additionally, there were 23 and 2,616 stock-based awards excluded for the three months ended March 31, 2021 and 2020, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

There were 182 and 450 restricted stock awards and stock options excluded from the calculation of diluted net income (loss) per share for the nine months ended March 31, 2021 and March 31, 2020, respectively, as such awards were anti-dilutive.

Additionally, there were 957 and 2,685 stock-based awards excluded for the nine months ended March 31, 2021 and 2020, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

Share Repurchase Program

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The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations.

During the six months ended December 31, 2020, the Company repurchased 2,204 shares under the repurchase program for a total of

$ 71,693 , excluding commissions, at an average price of $ 32.53 per share.

As of December 31, 2020, the Company had $ 118,136 of remaining authorization under the share repurchase program.

ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Assets Held for Sale

In August 2020, the Company’s Board of Directors approved a plan to sell the operations of its prepared fresh fruit, fresh fruit drinks and fresh fruit desserts division ("Fruit"), primarily consisting of the Orchard House Foods Limited business and associated brands.

During the three months ended March 31, 2021, the Company repurchased 204 shares under the repurchase program for a total of $ 8,562 , excluding commissions, at an average price of $ 41.86 per share.

During the nine months ended March 31, 2021, the Company repurchased 2,408 shares under the repurchase program for a total of $ 80,255 , excluding commissions, at an average price of $ 33.33 per share.

As of March 31, 2021, the Company had $ 109,495 of remaining authorization under the share repurchase program.

In August 2020, the Company's Board of Directors approved a plan to sell its prepared fresh fruit, fresh fruit drinks and fresh fruit desserts division ("Fruit"), primarily consisting of the Orchard House Foods Limited business and associated brands.

This decision supported the Company's overall strategy as the Fruit business did not align, and had limited synergies, with the rest of the Company's businesses.

Fruit operated out of the United Kingdom and was part of the Company's International reportable segment, comprising 6.8 % and 9.7 % of the Company's net sales during the six months ended December 31, 2020 and 2019, respectively.

The Company determined that the held for sale criteria was met and classified the assets and liabilities of the Fruit business as held for sale as of September 30 and December 31, 2020, recognizing a pre-tax non-cash loss for the three and six months ended December 31, 2020 of $ 23,596 and $ 56,093 , respectively, to reduce the carrying value to its estimated fair value, les s costs to sell.

The sale of the Fruit business was completed on January 13, 2021, as disclosed in Note 20, Subsequent Event .

The assets and liabilities of the Fruit business classified as held for sale in the Company's Consolidated Balance Sheets consisted of the following:

The sale was completed on January 13, 2021 (the "Closing Date") for total cash consideration of $ 38,547 of which $ 2,056 was due as of March 31, 2021 and was subsequently collected in April 2021.

Fruit operated in the United Kingdom and was included in the Company's International reportable segment, comprising 4.9 % and 8.6 % of the Company's net sales during the nine months ended March 31, 2021 and 2020, respectively.

The Company determined that the held for sale criteria was met and classified the assets and liabilities of the Fruit business as held for sale as of September 30 and December 31, 2020, recognizing a pre-tax non-cash loss to reduce the carrying value to its estimated fair value, less costs to sell of $ 56,093 during the six months ended December 31, 2020.

At the Closing Date, the assets and liabilities of the Fruit business consisted of the following:

Cash and cash equivalents $ 13,559

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Allowance for reduction of assets held for sale ( 58,444 )

Assets held for sale $ 52,828

Total assets $ 58,123

Accounts payable $ 14,428

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Other liabilities 1,942

Liabilities related to assets held for sale $ 29,292

Total liabilities $ 32,936

The Company deconsolidated the net assets of the Fruit business during the three months ended March 31, 2021, recognizing a pre-tax loss on sale of $ 1,904 .

The Company entered into a definitive stock purchase agreement on June 30, 2020 for the sale of its Danival business, a component of the International reportable segment, and the transaction closed on July 21, 2020.

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Sale of Tilda Business

On August 27, 2019, the Company sold the entities comprising its Tilda operating segment (the “Tilda Group Entities”) and certain other assets of the Tilda business to the Purchaser for an aggregate price of $ 342,000 in cash, subject to customary post-closing adjustments based on the balance sheets of the Tilda business.

On August 27, 2019, the Company sold the entities comprising its Tilda operating segment (the “Tilda Group Entities”) and certain other assets of the Tilda business to Ebro Foods S.A.

(the "Purchaser") for an aggregate price of $ 342,000 in cash, subject to customary post-closing adjustments based on the balance sheets of the Tilda business.

The other assets sold in the transaction consisted of raw materials, consumables, packaging, and finished and unfinished goods related to the Tilda business held by other Company entities that are not Tilda Group Entities.

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The Company used the proceeds from the sale to pay down the remaining outstanding borrowings under its term loan and a portion of its revolving credit facility.

The Company also entered into certain ancillary agreements with Ebro Foods S.A.

(the "Purchaser") and certain of the Tilda Group Entities in connection with the Sale and Purchase Agreement, including a transitional services agreement (the "TSA") pursuant to which the Company and the Purchaser provided transitional services to one another, and business transfer agreements pursuant to which the applicable Tilda Group Entities transferred certain non-Tilda assets and liabilities in India and the United Arab Emirates to subsidiaries of the Company to be formed in those countries.

The Company also entered into certain ancillary agreements with the Purchaser and certain of the Tilda Group Entities in connection with the Sale and Purchase Agreement, including a transitional services agreement (the "TSA") pursuant to which the Company and the Purchaser provided transitional services to one another, and business transfer agreements pursuant to which the applicable Tilda Group Entities transferred certain non-Tilda assets and liabilities in India and the United Arab Emirates to subsidiaries of the Company to be formed in those countries.

Additionally, the Company distributed certain Tilda products in the United States, Canada and Europe through the expiration of the TSA, which expired during the second quarter of fiscal 2020.

The disposition of the Tilda operating segment represented a strategic shift that had a major impact on the Company’s operations and financial results and has been accounted for as discontinued operations.

The following table presents the major classes of Tilda’s results within “Net (loss) income from discontinued operations, net of tax” in the Consolidated Statements of Operations:

Three Months Ended December 31, Six Months Ended December 31,

The following table presents the major classes of Tilda’s results within “Net income (loss) from discontinued operations, net of tax” in the Consolidated Statements of Operations:

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

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Gross profi t

— 171 — 3,751

Selling, general and administrative expense — — — 5,185

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Net loss from discontinued operations before income taxes — ( 540 ) ( 75 ) ( 90,528 )

Provision (benefit) for income taxes (3)

(Benefit) provision for income taxes (3)

— ( 965 ) ( 11,320 ) 12,900

Net (loss) income from discontinued operations, net of tax $ ( 11 ) $ ( 2,816 ) $ 11,245 $ ( 103,853 )

Net income (loss) from discontinued operations, net of tax $ — $ 425 $ 11,245 $ ( 103,428 )

(1) Interest expense was allocated to discontinued operations based on borrowings repaid with proceeds from the sale of Tilda.

(2) At the completion of the sale of Tilda, the Company reclassified $ 95,120 of related cumulative translation losses from Accumulated other comprehensive loss to discontinued operations, net of tax.

(3) Includes $ 11,331 of tax benefit related to the legal entity reorganization for the six months ended December 31, 2020, as well as a tax benefit related to the gain on the sale of Tilda of $ 1,250 and $ 15,250 for the three and six months ended December 31, 2019.

There were no assets or liabilities from discontinued operations associated with Tilda as of December 31, 2020 or June 30, 2020.

(3) Includes $ 11,320 of tax benefit related to the legal entity reorganization for the nine months ended March 31, 2021, as well as a tax benefit related to the gain on the sale of Tilda of $ 750 and tax expense of $ 14,500 for the three and nine months ended March 31, 2020, respectively.

There were no assets or liabilities from discontinued operations associated with Tilda as of March 31, 2021 or June 30, 2020.

Sale of Hain Pure Protein Reportable Segment

In March 2018, the Company’s Board of Directors approved a plan to sell all of the operations of the Hain Pure Protein Corporation operating segment, which included the Plainville Farms and FreeBird businesses, and the EK Holdings, Inc.

In March 2018, the Company’s Board of Directors approved a plan to sell all of the operations of the HPPC operating segment, which included the Plainville Farms and FreeBird businesses, and the EK Holdings, Inc.

(“Empire Kosher” or “Empire”) operating segment, which were reported in the aggregate as the Hain Pure Protein reportable segment.

Collectively, these dispositions represented a strategic shift that had a major impact on the Company’s operations and financial results and have been accounted for as discontinued operations.

The Company is presenting the operating results and cash flows of Hain Pure Protein within discontinued operations in the current and prior periods.

Collectively, these dispositions represented a

strategic shift that had a major impact on the Company’s operations and financial results and have been accounted for as discontinued operations.

The Company is presenting the operating results and cash flows of HPPC within discontinued operations in the nine months ended March 31, 2021 and in the comparable prior year period.

Sale of Plainville Farms Business ("Plainville")

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If a subsequent change in control of Plainville occurs prior to June 30, 2026, the purchaser will pay the Company 120 % of the difference between the amount drawn on the Letter of Credit less the sum of all earnout payments made prior to such time up to the net proceeds received by the pu rchaser.

At December 31, 2020, the Company had not recorded an asset associated with the earnout.

At March 31, 2021, the Company had not recorded an asset associated with the earnout.

Sale of HPPC and Empire Kosher

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The following table presents the major classes of Hain Pure Protein’s results within “Net loss (income) from discontinued operations, net of tax” in the Consolidated Statements of Operations:

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

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Asset impairments — — — —

Other expense (income) — — ( 10 ) —

Other income — — ( 10 ) —

Loss on sale of discontinued operations (1)

Net income (loss) from discontinued operations before income taxes — — 10 ( 1,424 )

— 1,781 — 3,205

Net (loss) income from discontinued operations before income taxes — ( 1,781 ) 10 ( 3,205 )

Benefit for income taxes — ( 659 ) — ( 1,052 )

Net income (loss) from discontinued operations, net of tax $ — $ — $ 10 $ ( 1,031 )

Net (loss) income from discontinued operations, net of tax $ — $ ( 1,122 ) $ 10 $ ( 2,153 )

(1) Primarily relates to preliminary closing balance sheet adjustments.

There were no assets or liabilities from discontinued operations associated with Hain Pure Protein at December 31, 2020 or June 30, 2020.

There were no assets or liabilities from discontinued operations associated with HPPC at March 31, 2021 or June 30, 2020.

Inventories consisted of the following:

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At each period end, inventory is reviewed to ensure that it is recorded at the lower of cost or net realizable value.

During the six months ended December 31, 2020 and the fiscal year ended June 30, 2020, the Company recorded inventory write-downs of $ 311 and $ 4,175 , respectively, primarily related to the discontinuance of slow moving SKUs as part of product rationalization initiatives.

Inventory write-downs for the three months ended March 31, 2021 and March 31, 2020 were $ 0 and $ 1,362 , respectively.

Inventory write-downs for the nine months ended March 31, 2021 and March 31, 2020 were $ 311 and $ 5,278 , respectively.

PROPERTY, PLANT AND EQUIPMENT, NET

11 unchanged sentences

$ 311,342 $ 289,256

Depreciation and amortization expense for the three months ended December 31, 2020 and 2019 was $ 7,481 and $ 8,024 , respectively.

Depreciation and amortization expense for the six months ended December 31, 2020 and 2019 was $ 17,184 and $ 15,729 , respectively.

As of December 31, 2020, the Company reclassified $ 24,971 of Property, plant and equipment, net to Assets held for sale as part of the held for sale accounting related to the Company's Fruit business (see Note 4, Assets Held for Sale and Discontinued Operations , for more information related to the held for sale assets).

There was an impairment charge of $ 1,333 recorded during the three and six months ended December 31, 2020 and no impairment charge recorded during the six months ended December 31, 2019.

Depreciation expense for the three months ended March 31, 2021 and 2020 was $ 9,118 and $ 7,789 , respectively.

Depreciation expense for the nine months ended March 31, 2021 and 2020 was $ 26,302 and $ 23,518 , respectively.

As of December 31, 2020, the Company reclassified $ 24,971 of Property, plant and equipment, net to Assets held for sale as part of the held for sale accounting related to the Company's Fruit business (see Note 4, Dispositions , for more information related to the held for sale assets).

There was an impairment charge of $ 1,333 recorded during the nine months ended March 31, 2021 and no impairment charge recorded during the nine months ended March 31, 2020.

The Company leases office space, warehouse and distribution facilities, manufacturing equipment and vehicles primarily in North America and Europe.

7 unchanged sentences

The Company does not have any related party leases, and sublease transactions are de minimis.

The components of lease expenses for the three and six months ended December 31, 2020 were as follows:

Three Months Ended Six Months Ended

December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019

The components of lease expenses for the three and nine months ended March 31, 2021 were as follows:

Three Months Ended Nine Months Ended

March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020

Operating lease expenses $ 4,129 $ 4,545 $ 12,290 $ 14,034

4 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

Leases Classification December 31, 2020 June 30, 2020

Leases Classification March 31, 2021 June 30, 2020

Operating lease ROU assets, net Operating lease right-of-use assets $ 90,130 $ 88,165

Operating lease ROU assets, net Assets held for sale 5,607 —

Finance lease ROU assets, net Property, plant and equipment, net 615 691

Finance lease ROU assets, net Assets held for sale 356 —

Total leased assets $ 90,745 $ 88,856

Operating Accrued expenses and other current liabilities $ 11,086 $ 12,338

Operating Liabilities related to assets held for sale 5,311 —

Finance Current portion of long-term debt 245 308

Finance Liabilities related to assets held for sale 296 —

Operating Operating lease liabilities, noncurrent portion 83,564 82,962

2 unchanged sentences

Additional information related to leases is as follows:

Six Months Ended

December 31, 2020 December 31, 2019

Nine Months Ended

March 31, 2021 March 31, 2020

Supplemental cash flow information

13 unchanged sentences

(a) ROU assets obtained in exchange for lease obligations includes leases which commenced, were modified or terminated.

The balance as of December 31, 2019 also included $ 87,414 relating to the impact of the adoption of ASU 2016-02 effective July 1, 2019.

Maturities of lease liabilities as of December 31, 2020 were as follows:

The balance for the nine months ended March 31, 2020 also included $ 87,414 relating to the impact of the adoption of ASU 2016-02 effective July 1, 2019.

Maturities of lease liabilities as of March 31, 2021 were as follows:

Fiscal Year Operating leases Finance leases Total

19 unchanged sentences

Total lease liabilities $ 95,300 $ 624 $ 95,924

At December 31, 2020, the Company had an operating lease that had not yet commenced.

Obligations under this lease are approximately $ 6,095 , and the lease is expected to commence during the fiscal year ending Jun e 30, 2021 with a lease term of 10 years, excluding renewal options.

GOODWILL AND OTHER INTANGIBLE ASSETS

5 unchanged sentences

Translation and other adjustments, net 2,642 27,484 30,127

Balance as of December 31, 2020 (a)

Balance as of March 31, 2021 (a)

$ 608,697 $ 269,025 $ 877,723

(a) The total carrying value of goodwill is reflected net of $ 134,277 of accumulated impairment charges, of which $ 97,358 related to the Company’s United Kingdom operating segment, $ 29,219 related to the Company’s Europe operating segment and $ 7,700 related to the Company’s former Hain Ventures operating segment, whose goodwill and accumulated impairment charges were reallocated within the North America reportable segment to the United States and Canada operating segments on a relative fair value basis.

As of September 30 and December 31, 2020, operations of the United Kingdom Fruit business, a part of the International reportable segment, were classified as held for sale and therefore, goodwill associated with Fruit was reclassified to Assets held for sale within the Consolidated Balance Sheet as of December 31, 2020.

See Note 4, Assets Held for Sale and Discontinued Operations , for more information.

The Fruit business was a component of the Company's Hain Daniels reporting unit prior to being classified as held for sale.

As of September 30 and December 31, 2020, Fruit, a part of the International reportable segment, was classified as held for sale and therefore, goodwill associated with Fruit was reclassified to Assets held for sale within the Consolidated Balance Sheet as of December 31, 2020.

See Note 4, Dispositions , for more information.

Fruit was a component of the Company's Hain Daniels reporting unit.

The decision to sell the business was a triggering event requiring an interim goodwill impairment test for the Hain Daniels reporting unit.

No impairment was recorded during the six months ended December 31, 2020.

No impairment was recorded during the nine months ended March 31, 2021.

Other Intangible Assets

8 unchanged sentences

Net carrying amount $ 324,791 $ 346,462

(a) The gross carrying value of trademarks and tradenames is reflected net of $ 93,273 of accumulated impairment charges as of both December 31, 2020 and June 30, 2020.

There were no events or circumstances that warranted an interim impairment test for indefinite-lived intangible assets during the six months ended December 31, 2020 or 2019.

As of September 30 and December 31, 2020, $ 36,074 of customer relationship assets, net, and $ 1,230 of tradenames, were reclassified to Assets held for sale in relation to the held for sale classification of the Fruit business.

During the six months ended December 31, 2020, the Company reclassified certain of its indefinite-lived intangible assets consisting of trademarks and tradenames to definite-lived intangible assets and began amortization of these assets.

(a) The gross carrying value of trademarks and tradenames is reflected net of $ 93,273 of accumulated impairment charges as of both March 31, 2021 and June 30, 2020.

There were no events or circumstances that warranted an interim impairment test for indefinite-lived intangible assets during the nine months ended March 31, 2021 or 2020.

During the nine months ended March 31, 2021, the Company reclassified certain of its indefinite-lived intangible assets consisting of trademarks and tradenames to definite-lived intangible assets and began amortization of these assets.

The annualized amortization expense of these assets is $ 914 and will amortize over an estimated useful life of 10 years.

Amortized intangible assets, which are deemed to have a finite life, primarily consist of customer relationships and trademarks and tradenames and are amortized over their estimated useful lives of 3 to 25 years.

Amortized intangible assets, which are deemed to have a finite life, primarily consist of customer relationships and certain trademarks and tradenames and are amortized over their estimated useful lives of 3 to 25 years.

Amortization expense included in continuing operations was as follows:

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

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Obligations under the Credit Agreement are guaranteed by certain existing and future domestic subsidiaries of the Company.

As of December 31, 2020, there were $ 293,000 of borro wings outstanding under the revolving credit f acility and $ 6,394 let ters of credit outstanding under the Credit Agreement.

In the six months ended December 31, 2019, the Company used the proceeds from the sale of Tilda, net of transaction costs, to prepay the entire principal amount of term loan outstanding under its credit facility and to partially pay down its revolving credit facility.

As of March 31, 2021, there were $ 255,000 of borro wings outstanding under the revolving credit f acility and $ 6,394 let ters of credit outstanding under the Credit Agreement.

In the nine months ended March 31, 2020, the Company used the proceeds from the sale of Tilda, net of transaction costs, to prepay the entire principal amount of term loan outstanding under its credit facility and to partially pay down its revolving credit facility.

In connection with the prepayment, the Company wrote off unamortized deferred debt issuance costs of $ 973 , recorded in Interest and other financing expense, net in the Consolidated Statements of Operations.

On May 8, 2019, the Company entered into the Third Amendment to the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”), whereby, among other things, its allowable consolidated leverage ratio (as defined in the Credit Agreement) and interest coverage ratio (as defined in the Credit Agreement) were adjusted.

The Company’s allowable consolidated leverage ratio is no more than 4.75 to 1.0 from March 31, 2019 to December 31, 2019, no more than 4.50 to 1.0 at March 31, 2020, no more than 4.0 to 1.0 at June 30, 2020 and no more than 3.75 to 1.0 on September 30, 2020 and thereafter.

Additionally, the Company’s required consolidated interest coverage ratio is no less than 3.0 to 1 through March 31, 2020, no less than 3.75 to 1 through March 31, 2021 and no less than 4.0 to 1 thereafter.

The Company’s allowable consolidated leverage ratio is no more than 3.75 to 1.0 from March 31, 2021 and thereafter.

Additionally, the Company’s required consolidated interest coverage ratio was no less than 3.75 to 1 through March 31, 2021 and no less than 4.0 to 1 thereafter.

The Amended Credit Agreement also required that the Company and the subsidiary guarantors enter into a Security and Pledge Agreement pursuant to which all of the obligations under the Amended Credit Agreement are secured by liens on assets of the Company and its material domestic subsidiaries, including stock of each of their direct subsidiaries and intellectual property, subject to agreed upon exceptions.

As of December 31, 2020, $ 700,606 was available under the Amended Credit Agreement, and the Company was in compliance with all associated covenants, as amended by the Amended Credit Agreement.

As of March 31, 2021, $ 738,606 was available under the Amended Credit Agreement, and the Company was in compliance with all associated covenants, as amended by the Amended Credit Agreement.

The Amended Credit Agreement provides that loans will bear interest at rates based on (a) the Eurocurrency Rate, as defined in the Credit Agreement, plus a rate ranging from 0.875 % to 2.50 % per annum;

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dollars will bear interest at the Base Rate plus the Applicable Rate, and Global Swing Line loans denominated in foreign currencies shall bear interest based on the overnight Eurocurrency Rate for loans denominated in such currency plus the Applicable Rate.

The weighted average interest rate on outstanding borrowings under the Amended Credit Agreement at December 31, 2020 was 1.40 % .

The weighted average interest rate on outstanding borrowings under the Amended Credit Agreement at March 31, 2021 was 1.11 % .

Additionally, the Amended Credit Agreement contains a Commitment Fee, as defined in the Amended Credit Agreement, on the amount unused under the Amended Credit Agreement ranging from 0.20 % to 0.45 % per annum, and such Commitment Fee is determined in accordance with a leverage-based pricing grid.

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The Company’s effective tax rate may change from period-to-period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes and tax audit settlements.

The effective income tax rate from continuing operations was expense of 72.3 % and 31.8 % for the three months ended December 31, 2020 and 2019, respectively.

The effective income tax rate from continuing operations was expense of 154.3 % and 25.0 % for the six months ended December 31, 2020 and 2019, respectively.

The effective income tax rates from continuing operations for the period ended December 31, 2020 were impacted by various discrete items including the tax impact of the U.K.

Fruit business impairment, the enacted change in the United Kingdom's corporate income tax rate to 19% and a legal entity reorganization completed during the quarter ended September 30, 2020.

In addition, the effective income tax rates from continuing operations for the three and six months ended December 31, 2020 and 2019 were impacted by provisions in the Tax Cuts and Jobs Act (the "Tax Act"), primarily related to Global Intangible Low Taxed Income ("GILTI") and limitations on the deductibility of executive compensation.

The effective income tax rate from continuing operations was an expense of 25.7 % and a benefit of 66.7 % for the three months ended March 31, 2021 and 2020, respectively.

The effective income tax rate from continuing operations was an expense of 55.5 % and a benefit of 72.8 % for the nine months ended March 31, 2021 and 2020, respectively.

The effective income tax rates from continuing operations for the nine months ended March 31, 2021 were impacted by various discrete items including the tax impact of the Fruit impairment and disposal, the enacted change in the United Kingdom's corporate income tax rate to 19% and a legal entity reorganization completed during the quarter ended September 30, 2020.

In addition, the effective income tax rates from continuing operations for the three and nine months ended March 31, 2021 and 2020 were impacted by provisions in the Tax Cuts and Jobs Act (the "Tax Act"), primarily related to Global Intangible Low Taxed Income ("GILTI") and limitations on the deductibility of executive compensation.

The effective income tax rates in each period were also impacted by the geographical mix of earnings and state valuation allowance.

In August 2020, the Company received $ 25,033 including $ 1,227 of interest from the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") refund claim filed in July 2020.

In December 2020, the Company received $ 28,784 including $ 90 of interest from the CARES Act refund claim filed in July 2020.

The income tax expense from discon tinued operations was expense of $ 11 and a benefit of $ 11,320 for the three and six months ended December 31, 2020 , respectively, while the income tax from discontinued operations was a benefit of $ 1,835 and expense of $ 13,472 for the three and six months ended December 31, 2019, respectively.

The benefit for income tax for the six months ended December 31, 2020 was impacted by a legal entity reorganization allowing the Company to reduce the U.S.

GILTI tax impact on the sale of the Tilda entities.

The expense for income taxes for the six months ended December 31, 2019 was impacted by $ 15,250 of tax related to the tax gain on the sale of the Tilda entities.

Through the nine months ended March 31, 2021 , the Company received $ 53,817 including $ 1,317 of interest from the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") tax loss carryback refund claims.

There were no discontinued operations for the three months ended March 31, 2021 and an income tax benefit from discontinued operations of $ 11,320 for the nine months ended March 31, 2021.

The income tax from discontinued operations was a benefit of $ 1,624 and expense of $ 11,848 for the three and nine months ended March 31, 2020, respectively.

The benefit for income tax for the nine months ended March 31, 2021 was impacted by a legal entity reorganization.

The expense for income taxes for the nine months ended March 31, 2020 was impacted by $ 14,500 of tax related to the tax gain on the sale of the Tilda entities.

ACCUMULATED OTHER COMPREHENSI VE LOSS

The following table presents the changes in accumulated other comprehensive loss ("AOCL"):

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

5 unchanged sentences

Deferred gains (losses) on cash flow hedging instruments:

Amount of (loss) gain recognized in AOCL on derivatives (3)

Amount of gain (loss) gain recognized in AOCL on derivatives (3)

1,168 ( 621 ) —

Amount of loss reclassified from AOCL into Expense (3)

Amount of (loss) gain reclassified from AOCL into (expense) income (3)

( 914 ) 109 995 83

Deferred gains (losses) on net investment hedging instruments:

Amount of (loss) gain recognized in AOCL on derivatives (3)

Amount of gain (loss) recognized in AOCL on derivatives (3)

3,107 — ( 2,763 ) —

Amount of gain reclassified from AOCL into income (3)

Amount of loss reclassified from AOCL into expense (3)

( 97 ) — ( 298 ) —

Net change in accumulated other comprehensive loss $ 43,044 $ 48,697 $ 74,049 $ 104,807

(1) Foreign currency translation adjustments included intra-entity foreign currency transactions that were of a long-term investment nature and were a net gain of $ 0 and $ 613 for the three months ended December 31, 2020 and 2019, respectively.

Foreign currency translation adjustments included intra-entity foreign currency transactions that were of a long-term investment nature and were a net loss of $ 0 and $ 250 for the six months ended December 31, 2020 and 2019, respectively.

Net change in AOCL $ 19,661 $ ( 52,206 ) $ 93,710 $ 52,601

(1) Foreign currency translation adjustments included intra-entity foreign currency transactions that were of a long-term investment nature and were a net gain of $ 0 and $ 453 for the three months ended March 31, 2021 and 2020, respectively.

Foreign currency translation adjustments included intra-entity foreign currency transactions that were of a long-term investment nature and were a net loss of $ 0 and $ 703 for the nine months ended March 31, 2021 and 2020, respectively.

(2) Foreign currency translation gains or losses of foreign subsidiaries related to divested businesses are reclassified into income once the liquidation of the respective foreign subsidiaries is substantially complete.

At the completion of the sales of Danival and Fruit, the Company reclassified $ 15,906 of translation losses from accumulated comprehensive loss to the Company's results of operations.

At the completion of the sale of Tilda, the Company reclassified $ 95,120 of translation losses from accumulated comprehensive loss to the Company’s results of discontinued operations.

(3) See Note 15, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains (losses) on cash flow hedging instruments recorded in the Consolidated Statements of Operations in the three and six months ended December 31, 2020 and 2019.

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

4 unchanged sentences

Compensation cost and related income tax benefits recognized in the Consolidated Statements of Operations for stock-based compensation plans were as follows:

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

7 unchanged sentences

Performance-based or market-based RSUs are issued in the form of performance share units ("PSUs").

A summary of the restricted stock activity (including all RSAs, RSUs and PSUs) for the six months ended December 31, 2020 is as follows:

A summary of the restricted stock activity (including all RSAs, RSUs and PSUs) for the nine months ended March 31, 2021 is as follows:

Number of Shares

5 unchanged sentences

Forfeited ( 109 ) $ 16.50

Non-vested RSAs, RSUs and PSUs outstanding at December 31, 2020 1,961 $ 16.49

At December 31, 2020 and June 30, 2020, the table above includes a total of 1,407 and 1,384 shares (including an inducement grant of 350 shares made to the Company's CEO as previously disclosed), respectively, that represent the target number of shares that may be earned based on pre-defined market conditions that are eligible to vest ranging from zero to 300 % of target.

Non-vested RSAs, RSUs and PSUs outstanding at March 31, 2021 1,813 $ 16.59

At March 31, 2021 and June 30, 2020, the table above includes a total of 1,389 and 1,384 shares (including an inducement grant of 350 shares made to the Company's CEO as previously disclosed), respectively, that represent the target number of shares that may be earned based on pre-defined market conditions and are eligible to vest ranging from zero to 300 % of target.

Vested shares during the current period include a total of 20 shares under the 2018-2020 LTIP that actually vested at 150 % of target based on achievement of the maximum relative TSR target.

Six Months Ended December 31,

Nine Months Ended March 31,

Fair value of RSAs, RSUs and PSUs granted $ 7,298 $ 16,634

1 unchanged sentence

Tax benefit recognized from restricted shares vesting $ 1,786 $ ( 102 )

At December 31, 2020, there was $ 16,107 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 2.3 years.

At March 31, 2021, there was $ 13,091 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 1.2 years.

On October 27, 2015, the Company acquired a minority equity interest in Chop’t Creative Salad Company LLC, predecessor to Chop't Holdings, LLC (“Chop’t”).

1 unchanged sentence

The investment is being accounted for as an equity method investment due to the Company’s representation on the Board of Directors of Chop’t.

At December 31, 2020 and June 30, 2020, the carrying value of the Company’s investment in Chop’t was $ 11,424 and $ 12,793 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

At March 31, 2021 and June 30, 2020, the carrying value of the Company’s investment in Chop’t was $ 11,098 and $ 12,793 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

The Company also holds the following investments:

(a) Hutchison Hain Organic Holdings Limited, a joint venture with Hutchison China Meditech Ltd., accounted for under the equity method of accounting, (b) Hain Future Natural Products Private Ltd., a joint venture with Future Consumer Ltd, accounted for under the equity method of accounting, and (c) Yeo Hiap Seng Limited, in which the Company holds a less than 1 % eq uity ownership interest.

The carrying value of these combined investments was $ 5,502 and $ 4,646 as of December 31, 2020 and June 30, 2020, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

The carrying value of these combined investments was $ 6,244 and $ 4,646 as of March 31, 2021 and June 30, 2020, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

5 unchanged sentences

• Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table presents assets and liabilities measured at fair value on a recurring basis as of December 31, 2020:

The following table presents assets and liabilities measured at fair value on a recurring basis as of March 31, 2021:

Derivative financial instruments $ 682 $ — $ 682 $ —

14 unchanged sentences

The income approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates and forward prices.

There were no transfers of financial instruments between the three levels of fair value hierarchy during the six months ended December 31, 2020 or 2019.

There were no transfers of financial instruments between the three levels of fair value hierarchy during the nine months ended March 31, 2021 or 2020.

The carrying amount of cash and cash equivalents, accounts receivable, net, accounts payable and certain accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these financial instruments.

The Company’s debt approximates fair value due to the debt bearing fluctuating market interest rates (see Note 9, Debt and Borrowings ).

In addition to the instruments named above, the Company makes fair value measurements in connection with its assets and liabilities classified as held for sale, as these balances represent the estimated fair value, less costs to sell (See Note 4, Assets Held for Sale and Discontinued Operations ).

The Company also makes fair value measurements in connection with its interim and annual goodwill and tradename impairment testing.

10 unchanged sentences

The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation.

As a result, all of the derivatives held as of December 31, 2020 and June 30, 2020 were classified as Level 2 of the fair value hierarchy.

The fair value estimates presented in the fair value hierarchy tables above are based on information available to management as of December 31, 2020 and June 30, 2020.

As a result, all of the derivatives held as of March 31, 2021 and June 30, 2020 were classified as Level 2 of the fair value hierarchy.

The fair value estimates presented in the fair value hierarchy tables above are based on information available to management as of March 31, 2021 and June 30, 2020.

These estimates are not necessarily indicative of the amounts we could ultimately realize.

15 unchanged sentences

Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

During the three and six months ended December 31, 2020, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

During the three and nine months ended March 31, 2021, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

Amounts reported in AOCL related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate deb t.

During the remaining six months of fiscal 2021, the Company estimates that an additional $ 159 will be reclassified as an increase to interest expense.

As of December 31, 2020, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

During the remaining three months of fiscal 2021, the Company estimates that an additional $ 174 will be reclassified as an increase to interest expense.

As of March 31, 2021, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

Interest Rate Derivative Number of Instruments Notional Amount

7 unchanged sentences

For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction .

During the remaining six months of fiscal 2021, the Company estimates that an additional $ 73 relating to cross-currency swaps will be reclassified as an increase to interest income.

As of December 31, 2020, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risks:

During the remaining three months of fiscal 2021, the Company estimates that an additional $ 82 relating to cross-currency swaps will be reclassified as an increase to interest income.

As of March 31, 2021, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risks:

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

9 unchanged sentences

Amounts are reclassified out of AOCL into earnings when the hedged net investment is either sold or substantially liquidated.

As of December 31, 2020, the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations:

As of March 31, 2021, the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations:

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

3 unchanged sentences

Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

As of December 31, 2020, the Company had outstanding derivatives that were not designated as hedges in qualifying hedging relationships consisting of foreign currency forward contracts with a notional amount of $ 37,375 .

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of December 31, 2020:

As of March 31, 2021, the Company had no outstanding derivatives that were not designated as hedges in qualifying hedging relationships.

Designated Hedges

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of March 31, 2021:

Asset Derivatives Liability Derivatives

4 unchanged sentences

Total derivatives designated as hedging instruments $ 682 $ 10,831

Derivatives not designated as hedging instruments:

Foreign currency forward contracts Prepaid expenses and other current assets — Accrued expenses and other current liabilities 524

Total derivative instruments $ 602 $ 16,608

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of June 30, 2020:

9 unchanged sentences

Total derivative instruments $ 1,014 $ 6,405

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL as of the three months ended December 31, 2020 and 2019:

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL as of the three months ended March 31, 2021 and 2020:

Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in OCI on Derivatives Location of Gain (Loss) Reclassified from AOCL into Income Amount of Gain (Loss) Reclassified from AOCL into Income

Three Months Ended December 31, Three Months Ended December 31,

Three Months Ended March 31, Three Months Ended March 31,

2021 2020 2021 2020

3 unchanged sentences

Total $ 1,479 $ 134 $ 1,157 $ —

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL as of the six months ended December 31, 2020 and 2019:

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL as of the nine months ended March 31, 2021 and 2020:

Six Months Ended December 31,

Nine Months Ended March 31,

2021 2020 2021 2020

3 unchanged sentences

Total $ ( 785 ) $ 128 $ ( 1,259 ) $ 26

The following table presents the pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations for the three months ended of December 31, 2020 and 2019:

Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships

Three Months Ended December 31, 2020 Three Months Ended December 31, 2019

Three Months Ended March 31, 2021 Three Months Ended March 31, 2020

Cost of sales Interest and other financing expense, net Other expense/income, net Cost of sales Interest and other financing expense, net Other expense/income, net

The effects of cash flow hedging:

Gain (loss) on cash flow hedging relationships

(Loss) gain on cash flow hedging relationships

Interest rate swaps

Amount of (loss) gain reclassified from AOCL into income $ — $ ( 72 ) $ — $ — $ — $ —

Amount of (loss) reclassified from AOCL into expense $ — $ ( 82 ) $ — $ — $ — $ —

Cross-currency swaps

Amount of gain (loss) reclassified from AOCL into income $ — $ 40 $ ( 1,216 ) $ — $ — $ —

Amount of gain reclassified from AOCL into income $ — $ 39 $ 1,200 $ — $ — $ —

Foreign currency forward contracts

Amount of (loss) gain reclassified from AOCL into income $ — $ — $ — $ ( 52 ) $ — $ —

Amount of gain reclassified from AOCL into income $ — $ — $ — $ — $ — $ —

Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships

Six Months Ended December 31, 2020

Six Months Ended December 31, 2019

Nine Months Ended March 31, 2021

Nine Months Ended March 31, 2020

Cost of sales Interest and other financing expense, net Other expense (income), net Cost of sales Interest and other financing expense, net Other expense (income), net

The effects of cash flow hedging:

Gain (loss) on cash flow hedging relationships

(Loss) gain on cash flow hedging relationships

Interest rate swaps

Amount of (loss) gain reclassified from AOCL into income $ — $ ( 130 ) $ — $ — $ — $ —

Amount of (loss) gain reclassified from AOCL into expense $ — $ ( 212 ) $ — $ — $ — $ —

Cross-currency swaps

Amount of gain (loss) reclassified from AOCL into income $ — $ 81 $ ( 2,440 ) $ — $ — $ —

Amount of gain (loss) reclassified from AOCL into income (expense) $ — $ 120 $ ( 1,240 ) $ — $ — $ —

Foreign currency forward contracts

Amount of (loss) gain reclassified from AOCL into income $ 73 $ — $ — $ 26 $ — $ —

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the three months ended December 31, 2020 and 2019:

Amount of gain reclassified from AOCL into income $ 73 $ — $ — $ 26 $ — $ —

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020:

Derivatives in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in OCI on Derivatives Location of Gain (Loss) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing) Amount of Gain (Loss) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing)

Three Months Ended December 31, Three Months Ended December 31,

Three Months Ended March 31, Three Months Ended March 31,

2021 2020 2021 2020

Cross-currency swaps $ 3,933 $ — Interest and other financing expense, net $ 123 $ —

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the six months ended December 31, 2020 and 2019:

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the nine months ended March 31, 2021 and 2020:

Six Months Ended December 31, Six Months Ended December 31,

Nine Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

Cross-currency swaps $ ( 3,498 ) $ — Interest and other financing expense, net $ 377 $ —

The following table presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Consolidated Statements Operations for the three months ended December 31, 2020 and 2019:

Non-Designated Hedges

Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivative Amount of Gain (Loss) Recognized in Income on Derivatives

Three Months Ended December 31,

Three Months Ended March 31,

Foreign currency forward contracts Other (income) expense, net $ — $ ( 336 )

Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivative Amount of Gain (Loss) Recognized in Income on Derivatives

Six Months Ended December 31,

Nine Months Ended March 31,

Foreign currency forward contracts Other (income) expense, net $ ( 399 ) $ ( 505 )

4 unchanged sentences

The reduction in workforce associated with these initiatives are expected to result in charges throughout fiscal 2021.

The following table displays the termination benefits and personnel realignment activities and liability balances relating to the reduction in workforce for the period ended as of December 31, 2020:

Balance at June 30, 2020 Charges (reversals) Amounts Paid Foreign Currency Translation & Other Adjustments Balance at December 31, 2020

The following table displays the termination benefits and personnel realignment activities and liability balances relating to the reduction in workforce for the period ended as of March 31, 2021:

Balance at June 30, 2020 Charges (reversals) Amounts Paid Foreign Currency Translation & Other Adjustments Balance at March 31, 2021

Termination benefits and personnel realignment $ 11,541 $ 3,488 $ ( 10,051 ) $ 59 $ 5,037

The liability balance as of December 31, 2020 and June 30, 2020 is included within Accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheets.

The liability balance as of March 31, 2021 and June 30, 2020 is included within Accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheets.

COMMITMENTS AND CONTINGENCIES

58 unchanged sentences

On November 6, 2020, Plaintiffs and Defendants notified the Court that Plaintiffs were evaluating the rejection of the demand, sought certain additional information and were assessing next steps, and requested that the Court extend the stay for an additional 30 days, to on or around December 7, 2020.

Plaintiffs and Defendants filed a joint status report on December 7, 2020 requesting that the Court enter an order staying any applicable deadlines until January 15, 2021 to allow for the production of certain materials by the Board of Directors for review by Plaintiffs.

On January 15, 2021, Plaintiffs and Defendants filed a joint status report requesting that the Court enter an order extending the stay of any applicable deadlines to February 26, 2021, which the Court so-ordered.

Since that time, Plaintiffs and Defendants have filed a number of joint status reports, requesting that the Court stay applicable deadlines to allow for the production of certain materials by the Board of Directors for review by Plaintiffs.

The current stay ordered by the Court is set to expire on May 7, 2021.

Baby Food Litigation

Since the beginning of the quarter ended March 31, 2021, approximately 25 pending consumer class actions have been brought against the Company alleging that the Company’s Earth’s Best baby food products (the “Products”) contain unsafe and undisclosed levels of various naturally-occurring heavy metals, namely lead, arsenic, cadmium and mercury.

These lawsuits generally allege that the Company violated various state consumer protection laws and make other state and common law warranty and unjust enrichment claims related to the alleged failure to disclose the presence of these metals and that consumers would have allegedly either not purchased the Products or would have paid less for them had the Company made adequate disclosures.

These putative class actions seek to certify a nationwide class of consumers as well as various state subclasses.

One of the consumer class actions (Jenna Johnson et.

Beech Nut Nutrition Co., et.

al.) filed in the U.S.

District Court of Kansas also alleges civil RICO claims that the Company conspired with other baby food manufacturers to conceal the presence of these heavy metals in our respective products.

These actions have been filed against all of the major baby food manufacturers in federal courts across the country, although the majority of cases against the Company have been filed in the U.S.

District Court for the Eastern District of New York.

The Company denies the allegations in these lawsuits and contends that its baby foods are safe and properly labeled.

The claims raised in these lawsuits were brought in the wake of a highly-publicized report issued by the U.S.

House of Representatives Subcommittee on Economic and Consumer Policy on Oversight and Reform, dated February 4, 2021 (the “House Report”), addressing the presence of heavy metals in baby foods made by certain manufacturers, including the Company.

Since the publishing of the House Report, the Company has also received information requests with respect to the advertising and quality of its baby foods from certain governmental authorities, as such authorities investigate the claims made in the House Report.

The Company is fully cooperating with these requests and is providing documents and other requested information.

On March 8, 2021, the plaintiffs in one of the lawsuits (Albano v.

Hain Celestial Group) filed a petition before the U.S.

Judicial Panel on Multidistrict Litigation (“JPML”) seeking to centralize all of the consumer class action lawsuits against all of the baby food manufacturers into single multidistrict proceeding in the U.S.

District Court for the Eastern District of New York.

On April 13, 2021, the Company and other baby food manufacturers, as well as numerous plaintiffs in the other lawsuits, filed responses to the Albano petition.

The JPML has set a hearing and oral argument on the petition for May 27, 2021.

The JPML is expected to decide by early June 2021 as to whether these lawsuits will be consolidated before a single court and, if so, where.

In addition to the consumer class actions discussed above, since the beginning of the quarter ended March 31, 2021, the Company has also been named in approximately six pending lawsuits in state and federal courts alleging some form of personal injury from the ingestion of the Company's Products, purportedly due to unsafe and undisclosed levels of various naturally occurring heavy metals.

Six of these cases make individual claims of injury, generally related to neurological development disorders such as autism and attention deficit hyperactivity disorder.

Two of the lawsuits seek relief on behalf of a class of allegedly injured persons, including damages for medical monitoring for potential injuries that may develop later.

The Company denies that its Products led to any of these injuries and will defend the cases vigorously.

In addition to the litigation described above, the Company is and may be a defendant in lawsuits from time to time in the normal course of business.

While the results of litigation and claims cannot be predicted with certainty, the Company believes the reasonably possible losses of such matters, individually and in the aggregate, are not material.

Additionally, the Company believes the probable final outcome of such matters will not have a material adverse effect on the Company’s consolidated results of operations, financial position, cash flows or liquidity.

Additionally, the Company

believes the probable final outcome of such matters will not have a material adverse effect on the Company’s consolidated results of operations, financial position, cash flows or liquidity.

SEGMENT INFORMATION

5 unchanged sentences

The CODM is the Company’s CEO.

Expenses related to certain centralized administration functions that are not specifically related to an operating segment are included in Corporate and Other.

Expenses related to certain centralized administration functions that are not specifically related to an operating segment are included in Corporate and Other expenses.

Corporate and Other expenses are comprised mainly of the compensation and related expenses of certain of the Company’s senior executive officers and other selected employees who perform duties related to the entire enterprise, as well as expenses for certain professional fees, facilities and other items which benefit the Company as a whole.

4 unchanged sentences

Transactions between reportable segments were insignificant for all periods presented.

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

9 unchanged sentences

$ 49,577 $ 19,135 $ 65,814 $ 30,781

(a) In addition to general Corporate and Other expenses as described above, for the three months ended December 31, 2020, Corporate and Other included $ 2,735 of Productivity and transformation costs.

For the three months ended December 31, 2019, Corporate and Other included $ 9,835 of Productivity and transformation costs and tradename impairment charges of $ 1,889 (related to North America).

For the six months ended December 31, 2020, Corporate and Other included $ 3,538 of Productivity and transformation costs.

For the six months ended December 31, 2019, Corporate and Other included $ 20,570 of Productivity and transformation costs and tradename impairment charges of $ 1,889 (related to North America), partially offset by a benefit of $ 2,562 of proceeds from insurance claim.

(a) In addition to general Corporate and Other expenses as described above, for the three months ended March 31, 2021, Corporate and Other included $ 2,804 of Productivity and transformation costs.

For the three months ended March 31, 2020, Corporate and Other included $ 5,572 of Productivity and transformation costs and tradename impairment charges of $ 7,650 (related to North America).

For the nine months ended March 31, 2021, Corporate and Other included $ 6,343 of Productivity and transformation costs.

For the nine months ended March 31, 2020, Corporate and Other included $ 26,142 of Productivity and transformation costs and tradename impairment charges of $ 9,539 ($ 4,007 related to North America;

$ 5,532 related to International), partially offset by a benefit of $ 2,962 of proceeds from insurance claim.

The Company's net sales by product category are as follows:

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

5 unchanged sentences

The Company’s net sales by geographic region, which are generally based on the location of the Company’s subsidiaries, were as follows:

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

10 unchanged sentences

RELATED PARTY TRANSACTIONS

The non-employee chair of the Company's Board of Directors is also the chair of the board of one of the Company’s suppliers, for which the Company incurs expenses in the ordinary course of business.

The Company incurred expenses of $ 4,366 and $ 5,430 in the three months ended December 31, 2020 and 2019, respectively, to the supplier and affiliated entities.

For the six months ended December 31, 2020 and 2019, the Company incurred expenses of $ 9,156 and $ 10,593 , respectively, to the supplier and affiliated entities.

On April 15, 2021, the Company completed the divestiture of its North America non-dairy beverages brands, Dream ® and WestSoy ® , for $ 33,000 subject to customary post-closing adjustments.

The purchaser in this transaction was SunOpta Inc.

The non-employee chair of the Company's Board of Directors is also the chair of the board of SunOpta.

SunOpta is also one of the Company’s suppliers, for which the Company incurs expenses in the ordinary course of business.

The Company incurred expenses of $ 3,649 and $ 2,513 in the three months ended March 31, 2021 and 2020, respectively, to SunOpta and its affiliated entities.

For the nine months ended March 31, 2021 and 2020, the Company incurred expenses of $ 12,806 and $ 13,106 , respectively, to SunOpta and its affiliated entities.

A former member of the Company's Board of Directors is a partner in a law firm which provides legal services to the Company.

The Company incurred expenses of $ 777 and $ 1,745 in the three months ended December 31, 2020 and 2019 , respectively, and $ 1,216 and $ 2,488 in the six months ended December 31, 2020 and 2019 , respectively, to the law firm and affiliated entities.

The Company incurred expenses of $ 259 and $ 1,141 in the three months ended March 31, 2021 and 2020 , respectively, and $ 1,476 and $ 3,629 in the nine months ended March 31, 2021 and 2020 , respectively, to the law firm and affiliated entities.

The director resigned from the Board in February 2020.

SUBSEQUENT EVENT

On January 13, 2021, the Company completed the sale of the Fruit business.

As of December 31, 2020, all assets and liabilities related to the Fruit business were classified as held for sale within the Company's Consolidated Balance Sheet.

See Note 4, Discontinued Operations and Assets Held for Sale , for additional information.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements