What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2021-08-26 compared with 2020-08-25 · 280 added, 340 removed, 389 unchanged (61% of the section changed)

1 unchanged sentence

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with Item 1A and the Consolidated Financial Statements and the related notes thereto for the period ended June 30, 2021 included in Item 8 of this Form 10-K.

Forward-looking statements in this Form 10-K are qualified by the cautionary statement included in this review under the sub-heading, “Cautionary Note Regarding Forward Looking Information,” at the beginning of this Form 10-K.

Forward-looking statements in this Form 10-K are qualified by the cautionary statement included under the sub-heading, “Cautionary Note Regarding Forward Looking Information,” at the beginning of this Form 10-K.

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.

The Company’s mission has continued to evolve since its founding, with health and wellness being the core tenet — To Create and Inspire a Healthier Way of Life ™ and be a leading marketer, manufa cturer and seller of organic and natural, “better-for-you” products by anticipating and exceeding consumer expectations in providing quality, innovation, value and convenience.

The Company’s mission has continued to evolve since its founding, with health and wellness being the core tenet.

The Company continues to be a leading marketer, manufa cturer and seller of organic and natural, “better-for-you” products by anticipating and exceeding consumer expectations in providing quality, innovation, value and convenience.

The Company is committed to growing sustainably while continuing to implement environmentally sound business practices and manufacturing processes.

1 unchanged sentence

The Company manufactures, markets, distributes and sells organic and natural products under brand names that are sold as “better-for-you” products, providing consumers with the opportunity to lead A Healthier Way of Life ® .

Hain Celestial is a leader in many organic and natural product categories, with many 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 ® (under license), MaraNatha ® , Natumi ® , New Covent Garden Soup Co.

® , Orchard House ® , Robertson’s ® , Sensible Portions ® , Spectrum ® , Sun-Pat ® , Sunripe ® , Terra ® , The Greek Gods ® , William’s™, Yorkshire Provender ® and Yves Veggie Cuisi ne ® .

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.

Hain Celestial is a leader in many organic and natural product categories, with many recognized brands in the various market categories it serves, including Celestial Seasonings ® , Clarks™, Cully & Sully ® , Earth’s Best ® , Ella’s Kitchen ® , Frank Cooper’s ® , 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 ® , Rose’s ® (under license), Sensible Portions ® , Spectrum ® , Sun-Pat ® , Terra ® , The Greek Gods ® , Yorkshire Provender ® and Yves Veggie Cuisi ne ® .

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

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

9 unchanged sentences

Some of these brands have historically been low margin, non-strategic brands that added complexity with minimal benefit to the Company’s operations.

During the fourth quarter of fiscal 2019, the Company initiated a SKU rationalization that included the elimination of approximately 350 low velocity and low profitability SKUs.

These SKU rationalizations are expected to result in expanded future profits and a remaining set of core SKUs that will maintain their shelf space in the store.

In addition, as part of the Company’s overall strategy, the Company may seek to dispose of businesses and brands that are less profitable or are otherwise less of a strategic fit within our core portfolio.

During fiscal 2019, for example, the Company divested its Hain Pure Protein reportable segment and its WestSoy® tofu, seitan and tempeh businesses.

As part of the Company’s overall strategy, the Company may seek to dispose of businesses and brands that are less profitable or are otherwise less of a strategic fit within our core portfolio.

During fiscal 2019, the Company divested its Hain Pure Protein reportable segment and its WestSoy ® tofu, seitan and tempeh businesses.

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.

More recently, the Company divested its Danival® business in July 2020.

See Note 25, Subsequent Events , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for further discussion.

The COVID-19 pandemic has created challenging and unprecedented conditions, and we are committed to supporting the global response to the crisis.

We are proud of our employees who are giving extraordinary effort under difficult circumstances to ensure we can supply the products our consumers depend on.

We are pleased with our preparation and efforts through the early stages of the pandemic, and we believe we are well positioned for the future as we continue to navigate the crisis and prepare for an eventual return to a more normal operating environment.

To date, we have successfully implemented contingency plans overseen by crisis management teams to monitor the evolving needs of our business.

While we have managed the pandemic well with minimal disruption to our business thus far, the impact of the pandemic on our future consolidated results of operations is uncertain.

We discuss below the actual and potential impact of the COVID-19 pandemic on our business as well as in Part I, Item 1A, Risk Factors of this Form 10-K.

Employee and Consumer Health and Safety Precautions

From the outset of the pandemic, our first priority has been the well-being of our employees and consumers.

We were early adopters of guidance from global health authorities for preventing the spread of COVID-19, and we have consistently met or exceeded government guidelines for addressing the health and safety of our employees, including global travel restrictions, prohibitions against visitors, social distancing requirements, the use of thermal temperature scanners, and the provision of personal protective equipment to our employees.

We have also enabled the use of new technology to allow many of our office-based employees to work from home effectively.

While these important actions and initiatives have led to some increased costs, the overall costs have not been material to our financial results and have been more than offset by the overall increase in our net sales due to increased consumer demand.

Manufacturing Facilities and Supply Chain Challenges

We have experienced temporary disruptions at certain of our manufacturing facilities due to an abundance of caution and our early adoption of best practices for addressing instances of an employee contracting COVID-19.

We are proud of our efforts to ensure the health and safety of our employees and consumers, and these temporary disruptions have not had a material impact on our operations to date.

We continue to monitor and comply with all applicable government orders, as many of the jurisdictions in which we do business begin to transition to the next phase of re-opening and a more normal operating environment.

We are facing, and will continue to face, operational challenges in manufacturing our products and making them available to customers and consumers as a result of the COVID-19 pandemic.

Shelter-in-place and social distancing behaviors, which are being mandated or encouraged by governments and practiced by businesses and individuals, create challenges for our manufacturing employees as well as for third parties on which we rely to make our products available to consumers.

These third parties include our suppliers, contract manufacturers, distributors, logistics providers and other business partners, as well as the retailers that ultimately sell our products to consumers.

We have experienced some increased volatility in the cost of ingredients and increased logistics-related costs to manage our supply chain through the pandemic.

To date, these increased costs have not had a material impact on our financial results.

We believe our planning has us well positioned to continue to manage these supply chain challenges.

When certain European countries were among the first regions impacted by COVID-19, we learned the nature and scope of the resulting supply disruptions and how to prepare for them.

We made the decision to identify our most important products and secondary sources of supply and manufacturing capabilities for those key products.

We acquired extra raw materials, supplemented our inventory levels and added temporary labor to support our extra manufacturing and health and safety initiatives.

We also consolidated product shipping orders to more efficiently meet the increased customer and consumer demand.

The framework for these supply chain measures remains in place to continue to meet any further surges in demand.

Consumer Demand

To date, shelter-in-place and social distancing behaviors have resulted in increased overall demand for our products, most notably in our grocery, snacks, tea and certain personal care product categories.

Other product offerings, such as sun care products and the food service component of our business in the United Kingdom, have been adversely impacted due to changed consumer behavior and priorities.

While we have experienced a net increase in the overall demand for our products during the early phases of the COVID-19 pandemic, the duration of that increased demand environment is uncertain.

Additionally, deteriorating economic conditions arising from the COVID-19 pandemic could adversely affect future demand for our products.

Factors such as increased unemployment, decreases in disposable income and declines in consumer confidence could cause a decrease in demand for our overall product set, particularly higher priced products.

Our Financial Position

In fiscal 2021, the Company divested its Danival ® business, its United Kingdom fruit and fruit juice businesses (“Fruit”), primarily consisting of the Orchard House ® Foods Limited business and associated brands, and its WestSoy ® , Dream ® and GG UniqueFiber ® brands.

The COVID-19 pandemic has resulted in a net increase in overall demand for our products.

Accordingly, to date, our financial position has benefited from the COVID-19 pandemic, albeit to a limited extent.

We finance our operations primarily with the cash flows we generate from our operations and from borrowings available to us under our Third Amended and Restated Credit Agreement (as amended, the “Amended Credit Agreement”).

As of June 30, 2020, we had $710.3 million available under the Amended Credit Agreement.

Business Priorities

While the current environment has caused us to delay certain planned innovation and productivity initiatives, our business strategy of simplifying our portfolio and reinvigorating profitable sales growth remains unchanged.

Financial Impact on Third Parties and Equity Investments

Deteriorating economic conditions could jeopardize the viability of some third parties and our business relationships with them and could cause us to incur losses or increased costs in our dealings with those third parties.

We have taken measures to minimize the impact of hardships faced by individual business partners, including by identifying secondary sources of supply and manufacturing capabilities.

Productivity and Transformation Costs

As part of the Company’s historical strategic review, it focused on a productivity initiative, which it called “Project Terra.” A key component of this project was the identification of global cost savings and the removal of complexity from the business.

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.

The Company will carry out additional productivity initiatives under this strategy in fiscal 2021.

Productivity and transformation costs include costs, such as consulting and severance costs, relating to streamlining the Company’s manufacturing plants, co-packers and supply chain, eliminating served categories or brands within those categories, and product rationalization initiatives which are aimed at eliminating slow moving SKUs.

The impact was particularly pronounced during the early stages of the pandemic as consumers reacted to stay-at-home measures and the uncertainty of the pandemic.

The pandemic-driven demand for our products has subsided as effective vaccines have become available,

governments have eased safety measures and consumer purchasing behaviors have started to return to pre-pandemic norms.

Our net sales during the third quarter of fiscal 2020 through the second quarter of fiscal 2021 benefited from pandemic-driven demand, and as a result net sales were lower in the third and fourth quarters of fiscal 2021 compared to the third and fourth quarters of fiscal 2020, respectively.

Despite normalizing consumer demand in recent quarters, the pandemic continues to create near-term and longer-term challenges and uncertainty as we continue our commitment to supporting the global response to the crisis.

Effective vaccines for COVID-19 have not yet allowed a return to normal economic activity and business operations, and the presence of new variants and increasing case figures in many countries create additional uncertainty about the duration and extent of the impact from the pandemic.

The pandemic and the measures being taken by governments, businesses and consumers to limit the spread of COVID-19 have led to operational challenges in our business and may result in broader and longer-term challenges and uncertainty that we will need to manage successfully.

Such challenges include but are not limited to:

• manufacturing and supply chain challenges resulting from health and safety precautions among our employees and the general population as well as macroeconomic factors resulting from the pandemic, including labor market shortages;

• an uncertain future demand environment as a result of changing consumer behaviors amid uncertain economic conditions;

• increased costs of operating our business and managing our supply chain during a global pandemic.

Productivity and Transformation Initiatives

One of the key pillars of the Company’s strategy seeks to identify areas of operating efficiencies and cost savings to expand profit margins and cash flow.

In furtherance of this key pillar, we have undertaken multiple productivity and transformation initiatives, including (1) consolidating certain of the Company’s manufacturing plants, (2) implementing broader supply chain operational improvements, (3) integrating the operations of our U.S.

and Canadian businesses, (4) product rationalization initiatives which are aimed at eliminating slow moving SKUs and (5) outsourcing certain functions in our North American business, including order management, billing, accounts receivable and accounts payable, to third-party service providers and the associated implementation of new procurement technology solutions.

We incur costs as part of these productivity and transformation initiatives with the objective of obtaining longer term operating efficiencies and cost savings.

The costs include consulting and severance costs, moving and shut-down costs and other costs associated with carrying out the initiatives.

The Company will continue to carry out the existing productivity initiatives as well as additional initiatives under this strategy in fiscal 2022.

Discontinued Operations

7 unchanged sentences

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 periods.

The assets and liabilities of the Tilda

operating segment are presented as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of June 30, 2019.

See Not e 5, D iscontinued Operations and Assets Held for Sale, in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

Former Chief Executive Officer Succession Plan

On June 24, 2018, the Company entered into a succession plan, whereby the Company’s form er CEO , Irwin D.

Simon, agreed to terminate his employment with the Company upon the hiring of a new CEO.

On October 26, 2018, the Company’s Board of Directors appointed Mark L.

Schiller as President and CEO, succeeding Mr.

In connection with the appointment, on October 26, 2018, the Company and Mr.

Schiller entered into an employment agreement, which was approved by the Board, with Mr.

Schiller’s employment commencing on November 5, 2018.

Accordingly, Mr.

Simon’s employment with the Company terminated on November 4, 2018.

See Note 3, Former Chief Executive Officer Succession Plan , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

See Note 5, Dispositions, in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

Results of Operations

11 unchanged sentences

18,899 1.0 % 48,789 2.4 % (29,890) (61.3) %

Former Chief Executive Officer Succession Plan expense, net — — % 30,156 1.4 % (30,156) *

Proceeds from insurance claims (592) — % (2,962) (0.1) % 2,370 (80.0) %

Accounting review and remediation costs, net of insurance proceeds — — % 4,334 0.2 % (4,334) *

Goodwill impairment — — % 394 — % (394) (100.0) %

Long-lived asset and intangibles impairment 57,920 2.9 % 27,493 1.3 % 30,427 110.7 %

Operating income (loss) 56,042 2.7 % (32,493) (1.5) % 88,535 (272.5) %

Operating income 107,380 5.4 % 56,042 2.7 % 51,338 91.6 %

Interest and other financing expense, net 8,654 0.4 % 18,258 0.9 % (9,604) (52.6) %

Other expense, net 3,956 0.2 % 994 — % 2,962 298.0 %

Income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees

33,828 1.6 % (56,004) (2.7) % 89,832 (160.4) %

Provision (benefit) for income taxes 6,205 0.3 % (3,232) (0.2) % 9,437 (292.0) %

Other (income) expense, net (10,067) (0.5) % 3,956 0.2 % (14,023) *

Income from continuing operations before income taxes and equity in net loss of equity-method investees 108,793 5.5 % 33,828 1.6 % 74,965 221.6 %

Provision for income taxes 41,093 2.1 % 6,205 0.3 % 34,888 562.3 %

Equity in net loss of equity-method

investees 1,591 0.1 % 1,989 0.1 % (398) (20.0) %

Net income (loss) from continuing operations $ 25,634 1.2 % $ (53,427) (2.5) % $ 79,061 (148.0) %

Net loss from discontinued operations, net of tax (106,041) (5.2) % (129,887) (6.2) % 23,846 (18.4) %

Net loss $ (80,407) (3.9) % $ (183,314) (8.7) % $ 102,907 (56.1)%

Net income from continuing operations $ 66,109 3.4 % $ 25,634 1.2 % $ 40,475 157.9 %

Net income (loss) from discontinued operations, net of tax 11,255 0.6 % (106,041) (5.2) % 117,296 *

Net income (loss) $ 77,364 3.9 % $ (80,407) (3.9) % $ 157,771 *

Adjusted EBITDA $ 258,938 13.1 % $ 199,993 9.7 % $ 58,945 29.5 %

* Percentage is not meaningful

Net sales in fiscal 2020 were $2.05 billion, a decrease of $50.7 million, or 2.4%, from net sales of $2.10 billion in fiscal 2019.

Foreign currency exchange rates negatively impacted net sales by $27.5 million as compared to the prior year.

On a constant currency basis, net sales decreased approximately 1.1% from the prior year.

Net sales decreased across both our North America and International reportable segments, primarily driven by the strategic decision to no longer support certain lower margin and unprofitable SKUs, a reduction in net sales in relation to divested brands and a decline in our fruit business as a result of impacts from the COVID-19 pandemic.

Further details of changes in net sales by segment are provided below.

Gross profit in fiscal 2020 was $465.8 million, an increase of $67.3 million, or 16.9%, from gross profit of $398.5 million in fiscal 2019.

Gross profit margin was 22.7%, an increase of 380 basis points from the prior year.

This increase was driven by a favorable product mix as well as cost savings from the Company’s productivity and transformation initiatives.

The year-over-year increase was further due to an inventory write-down of $12.4 million in fiscal 2019, which did not recur in fiscal 2020, in connection with the discontinuance of slow moving SKUs primarily in the United States as part of a product rationalization initiative and increased freight and commodity costs primarily in the United States operating segment.

* Percentage is not meaningful due to a comparison of a positive figure and a negative figure.

Net sales in fiscal 2021 w ere $1.97 billion, a decrease of $83.6 million, or 4.1%, from net sales of $2.05 billion in fiscal 2020 as a result of a decrease in sales in both the North America and the International reportable segments.

On a constant currency basis, adjusted for the impact of divestitures and discontinued brands, net sales decreased approximately 0.6% from the prior comparable period.

On an adjusted basis, net sales decreased in the North America reportable segment and was partially offset by an increase in the International reportable segment.

Further details of changes in adjusted net sales by segment are provided below in the Segment Results section.

Gross profit in fiscal 2021 w as $491.6 million, an increase of $25.8 million, or 5.5%, from gross profit of $465.8 million in fiscal 2020.

Gross profit margin was 25.0% of net sales, compared to 22.7% in the prior year.

The increase in gross profit margin was mainly driven by the International reportable segment as a result of lower costs of goods sold stemming from the Fruit business divestiture in the current fiscal year, lower trade spend and cost savings due to supply chain efficiencies which resulted in a lower cost of sales as a percentage of revenue.

In addition, the gross profit margin improved in the North America reportable segment as a result of our productivity and transformation initiatives.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $324.4 million in fiscal 2020, an increase of $10.4 million, or 3.3%, from $314.0 million in fiscal 2019.

Selling, general and administrative expenses increased primarily due to higher marketing and advertising spend as well as higher variable compensation costs in the current year period.

Variable compensation costs include stock-based compensation expense, which was higher in the current year period primarily due to the reversal in the prior year period of previously accrued amounts under certain performance-based incentive plans of which achievement was no longer probable.

See Note 15, Stock-based Compensation and Incentive Performance Plans , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for further discussion.

Selling, general and administrative expenses as a percentage of net sales was 15.8% in fiscal 2020 and 14.9% in the prior year, an increase of 90 basis points, primarily attributable to the aforementioned items.

Selling, general and administrative expenses were $299.1 million in fiscal 2021, a decrease of $25.3 million, or 7.8%, from $324.4 million in fiscal 2020.

The decrease was mainly due to reduced expenses in the North America reportable segment in the amount of $26.9 million.

The decrease in the North America reportable segment was due to (1) lower broker trade expense which was a result of lower net sales, (2) lower salaries and benefits which was primarily a result of the reorganization which resulted in headcount reductions that occurred throughout fiscal 2020 for which we are now seeing the benefits, (3) headcount reductions due to divestitures, (4) lower marketing expense due to a decrease in consumer advertising and public relations, (5) lower bonus expense, and (6) lower outside service expense.

Selling, general and a dministrative expenses as a percentage of net sal es was 15.2% in the twelve months ended June 30, 2021 compared to 15.8% in the prior year, attributable to th e aforementioned items.

Amortization of Acquired Intangibles

Amortization of acquired intangibles was $8.9 million in fiscal 2021, a decrease of $2.7 million, or 23.3%, from $11.6 million in fiscal 2020.

The decrease was due to finite-lived intangibles from certain historical acquisitions becoming fully amortized subsequent to June 30, 2019 as well as impairment of certain finite-lived intangibles taken during the fiscal 2020 year.

The decrease was due to the elimination of the United Kingdom Fruit business intangible amortization since the first quarter of fiscal 2021 and finite-lived intangibles from historical acquisitions becoming fully amortized or impaired during fiscal year 2020, partially offset by amortization as a result of certain indefinite-lived intangibles reclassified to finite-lived intangibles during the first quarter of fiscal 2021.

Productivity and Transformation Costs

Productivity and transformation costs were $48.8 million in fiscal 2020, an increase of $8.7 million from $40.1 million in fiscal 2019.

The increase was primarily due to increased North America integration costs incurred in connection with the Company’s productivity and transformation initiative as well as increased severance costs in fiscal 2020 as compared to the prior year period.

Former Chief Executive Officer Succession Plan Expense, Net

On June 24, 2018, the Company entered into a succession plan, whereby the Company’s former CEO, Irwin D.

Simon, agreed to terminate his employment with the Company upon the hiring of a new CEO.

Net costs and expenses associated with the Company ’s former Chief Executive Officer succession plan were $30.2 million in fiscal 2019 with no expense incurred in fiscal 2020.

See Note 3, Former Chief Executive Officer Succession Plan , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

Productivity and transformation costs were $18.9 million in fiscal 2021, a decrease of $29.9 million or 61.3% from $48.8 million in fiscal 2020.

The decrease was due to lower consulting fees, severance costs, and other costs incurred in connection with the Company’s productivity and transformation initiatives in fiscal 2021.

Proceeds from Insurance Claims

During fiscal year 2021, the Company received $0.6 million as payment from an insurance claim related to a litigation described in Note 19, Commitments and Contingencies .

In July of 2019, the Company received $7.0 million as partial payment from an insurance claim relating to business disruption costs associated with a co-packer.

Of this amount, $4.5 million was recognized in fiscal 2019 as it related to reimbursement of costs already incurred, with the remaining $2.5 million recognized in the first quarter of fiscal 2020.

The Company recorded an additional $0.5 million of proceeds in fiscal year 2020.

Accounting Review and Remediation Costs, Net of Insurance Proceeds

Costs and expenses associated with the internal accounting review, remediation and other related matters were $4.3 million in fiscal 2019 with no expense incurred in fiscal 2020.

Included in accounting review and remediation costs for fiscal 2019 were insurance proceeds of $0.2 million related to the reimbursement of costs incurred as part of the internal accounting review and the independent review by the Audit Committee and other related matters.

Goodwill Impairment

In fiscal 2020, the Company recorded a goodwill impairment charge of $0.4 million related to the European reporting unit within the International segment.

There were no goodwill impairment charges recorded during fiscal 2019.

See Not e 10, Goodwill and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

Long-Lived Asset and Intangibles Impairment

During fiscal 2020, the Company recorded $27.5 million of long-lived asset and intangibles impairment charges.

This included a pre-tax impairment charge of $9.5 million ($4.0 million related to the North America segment and $5.5 million related to the International segment) related to certain trade names of the Company.

The Company also recorded $4.5 million of pre-tax impairment charges relating to customer relationships of certain brand divestitures within the North America segment.

Additionally, during fiscal 2020, the Company recorded a $12.3 million non-cash impairment charge primarily related to a write-down of certain machinery and equipment in the United States and Europe used to manufacture certain slow moving or low margin SKUs and the write-down of buildings, machinery and equipment related to the sale of our Danival business.

During fiscal 2019, the Company recorded $33.7 million of long-lived asset and intangibles impairment charges.

This included a pre-tax impairment charge of $17.9 million ($15.1 million related to the North America segment and $2.8 million related to the International segment) related to certain trade names of the Company.

Additionally, the Company recorded $6.1 million of non-cash impairment charges primarily related to the Company’s decision to consolidate manufacturing of certain fruit-based products in the United Kingdom.

Moreover, the Company recorded a $9.7 million non-cash impairment charge to write down the value of certain machinery and equipment no longer in use in the United States and United Kingdom, some of which was used to manufacture certain slow moving SKUs that were discontinued.

See Not e 8, Property, Plant and Equipment, Net and Note 10, G oodwill and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for details regarding the aforementioned impairment charges.

Operating Income (Loss)

Operating income in fiscal 2020 was $56.0 million compared to an operating loss of $32.5 million in fiscal 2019.

The increase in operating income resulted from the items described above.

During fiscal year 2021, the Company recorded a pre-tax impairment cha rge of $57.9 million, of which $56.1 million related to the reserve recorded against the assets of the Company's United Kingdom Fruit business (see Note 5, Dispositions , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K) and $1.6 million related to impairment of property, plant and equipment and other non-current assets.

During fiscal year 2020, the Company recorded a pre-tax impairment charge of $27.5 million of which (1) $9.5 million ($4.0 million related to the North America reportable segment and $5.5 million related to the International reportable segment) related to certain tradenames of the Company, (2) $4.5 million related to customer relationships of certain brand divestitures within the North America reportable segment and (3) $12.3 million related to a write-down of certain machinery and equipment in the United States and Europe used to manufacture certain slow moving or low margin SKUs and the write-down of buildings, machinery and equipment related to the sale of our Danival business.

Operating Income

Operating income in fiscal 2021 was $107.4 million compared to operating income of $56.0 million in fiscal 2020 due to the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense , net totaled $8.7 million in fiscal 2021, a decrease of $9.6 million, or 52.6%, from $18.3 million in the prior year.

The decrease in Interest and other financing expense, net resulted primarily from lower interest expense related to our revolving credit facility as a result of lower variable interest rates and a lower balance of borrowings outstanding during fiscal 2020 compared to fiscal 2019.

The decrease resulted primarily from lower interest expense in fiscal 2021 from lower outstanding debt and lower variable interest rates on the portion of the debt not hedged by derivatives.

See N ote 11, Deb t and Borrowings , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

Other Expense, Net

Other expense, net totaled $4.0 million in fiscal 2020, an increase of $3.0 million from $1.0 million in the prior year.

The increase in the fiscal year ended June 30, 2020 resulted from losses related to the sale of the Arrowhead, SunSpire and Rudi’s businesses, partially offset by higher net unrealized foreign currency gains due to the effect of foreign currency movements on the remeasurement of foreign currency denominated loans.

Income (Loss) from Continuing Operations Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Income before income taxes and equity in the net loss of our equity-method investees for fiscal 2020 was $33.8 million compared to a loss of $56.0 million in fiscal 2019.

Other (Income) Expense, Net

Other income, net totaled $10.1 million in fiscal 2021, an increase of $14.0 million from other expense, net of $4.0 million in the prior year.

The change from expense to income was primarily attributable to a gain on sale of assets and businesses in fiscal 2021 of $11.1 million and a $2.8 million gain primarily related to foreign currency movements on the remeasurement of foreign currency balances in fiscal 2021 compared with respective losses in fiscal 2020.

Income from Continuing Operations Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Income before income taxes and equity in the net loss of our equity-method investees for fiscal 2021 was $108.8 million compared to $33.8 million in fiscal 2020.

The increase was due to the items discussed above.

Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes includes federal, foreign, state and local income taxes.

Our income tax from continuing operations was an expense of $6.2 million and a benefit of $3.2 million for fiscal 2020 and 2019, respectively.

Provision for Income Taxes

The provision f or income taxes includes federal, foreign, state and local income taxes.

Our income tax expense from continuing operations was $41.1 million and $6.2 million for fiscal 2021 and 2020, respectively.

On March 27, 2020, H.R.

748, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into legislation which includes business tax provisions that will impact taxes related to 2018, 2019 and 2020.

Some of the significant tax law changes in accordance with the CARES Act are to increase the limitation on deductible business interest expense for 2019 and 2020, allow for the five-year carryback of net operating losses for 2018-2020, suspend the 80% limitation of taxable income for net operating loss carryforwards for 2018-2020, provide for the acceleration of depreciation expense from 2018 and forward on qualified improvement property, and accelerate the ability to claim refunds of Alternative Minimum Tax (“AMT”) credit carryforwards.

The Company carried back net operating losses generated in the June 30, 2019 tax year for five years, resulting in a net income tax benefit of $11.2 million.

The $11.2 million income tax benefit represents the federal rate differential between 35% and 21%, net of a reserve under ASC 740-10 and excludes the indirect tax benefit of $6.7 million related to discontinued operations.

The Company recorded a tax refund receivable of $52.5 million which is included as a component of Prepaid expenses and other assets on the Consolidated Balance Sheets.

On December 22, 2017, the U.S.

government enacted comprehensive tax legislation pursuant to the Tax Cuts and Jobs Act (the “Tax Act”), which significantly revised the ongoing U.S.

corporate income tax law by lowering the U.S.

federal corporate income tax rate from 35% to 21%, implementing a territorial tax system, imposing a one-time tax on foreign unremitted earnings and setting limitations on deductibility of certain costs (e.g., interest expense and executive compensation), among other things.

In accordance with SAB No.

118, the SEC's staff accounting bulletin issued to address complexities involved in accounting for the Tax Act, the Company finalized the tax effects of the Tax Act during fiscal 2019.

The Company recorded additional tax expense of $6.8 million related to its transition tax liability due to finalizing the Company’s foreign earnings and profits study.

The net increase reflected newly issued tax laws, regulations, and notices from the U.S.

Department of Treasury and Internal Revenue Service tax authorities.

The adjustment of the Company’s provisional tax expense was recorded as a change in estimate in accordance with SAB No.

The Tax Act also includes a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries.

The FASB Staff Q&A Topic No.

5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election either to recognize deferred taxes for temporary differences that are expected to reverse as GILTI in future years or provide for the tax expense related to GILTI resulting from those items in the year the tax is incurred.

The Company has elected to recognize the resulting tax on GILTI as a period expense in the period the tax is incurred.

The Company has computed the impact on our effective tax rate on a discrete basis.

The effective income tax rate from continuing operations was expense of 18.3% and a benefit of 5.8% of pre-tax income for the twelve months ended June 30, 2020 and 2019, respectively.

The effective income tax rate from continuing operations for the twelve months ended June 30, 2020 was primarily impacted by the geographical mix of earnings, state taxes, provisions in the CARES Act, GILTI and limitations on the deductibility of executive compensation.

The effective income tax rate from continuing operations for the twelve months ended June 30, 2019 was primarily impacted by the Tax Act’s lowering of the corporate tax rate, the geographical mix of earnings, state taxes, GILTI, finalization of the transition tax liability, and limitations on the deductibility of executive compensation.

The effective income tax rate was also impacted by a net increase in the Company’s valuation allowance primarily related to the Company’s state deferred tax assets and state net operating loss carryforwards.

748, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into legislation which included business tax provisions that impacted taxes related to 2018, 2019 and 2020.

Under the CARES Act, the Company carried back net operating losses generated in the June 30, 2019 tax year for five years, resulting in a net income tax benefit of $11.2 million.

The $11.2 million income tax benefit represents the federal rate differential between 35% and 21%, net of a reserve under Accounting Standard Codification (“ASC”) 740-10 and excludes the indirect tax benefit of $6.7 million related to discontinued operations.

The Company recorded a tax refund receivable of $52.5 million which was included as a component of Prepaid expenses and other current assets on the Consolidated Balance Sheet as of June 30, 2020.

The Company received the tax refund, along with $1.3 million of interest, during fiscal year 2021.

The effective income tax rate from continuing operations was 37.8% and 18.3% of pre-tax income for the twelve months ended June 30, 2021 and 2020, respectively.

The effective income tax rate from continuing operations for the twelve months ended June 30, 2021 was primarily impacted by various discrete items including the tax impact of the Fruit business impairment and disposal, and the enacted change in the United Kingdom’s corporate income tax rate from 19% to 25%.

The effective income tax rate from continuing operations for the twelve months ended June 30, 2020 was primarily impacted by the geographical mix of earnings, state taxes, provisions in the CARES Act, global intangible low-taxed income (“GILTI”) and limitations on the deductibility of executive compensation.

Our 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.

1 unchanged sentence

Equity in Net Loss of Equity-Method Investees

Our equity in the net loss from our equity method investments for fiscal 2020 was $2.0 million compared to equity in net loss of $0.7 million for fiscal 2019.

Our equity in the net loss from our equity method investments for fiscal 2021 was $1.6 million compared to $2.0 million for fiscal 2020.

See Note 15, Investments , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Net Income (Loss) from Continuing Operations

Net income from continuing operations for fiscal 2020 was $25.6 million compared to net loss of $53.4 million for fiscal 2019.

Net income per diluted share was $0.25 in fiscal 2020 compared to net loss per diluted share of $0.51 in fiscal 2019.

Net Income from Continuing Operations

N et income fro m continuing operations for fiscal 2021 was $66.1 million compared to net income of $25.6 million for fiscal 2020.

Net income per diluted share was $0.65 in fiscal 2021 compared to net income per diluted share of $0.25 in fiscal 2020.

The increase was attributable to the factors noted above.

Net Loss from Discontinued Operations

Net loss from discontinued operations for fiscal 2020 and 2019 was $106.0 million and $129.9 million, respectively, or $1.02 and $1.25 per diluted share, respectively.

The net loss from discontinued operations for fiscal 2020 included a reclassification of $95.1 million of cum ulative translation losses from Accumulated comprehensive loss related to the Tilda business to discontinued operations, while in fiscal 2019 net loss from discontinued operations was primarily attributable to asset impairment charges of $109.3 million and losses on sale in connection with the disposition of the Plainville Farms and HPPC businesses of $40.2 million and $0.6 million, respectively.

See Not e 5, Disc ontinued Operations and Assets Held for Sale , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Net loss for fiscal 2020 was $80.4 million compared to net loss of $183.3 million for fiscal 2019.

Net loss per diluted share was $0.77 in fiscal 2020 compared to net loss per diluted share of $1.76 in 2019.

Net Income (Loss) from Discontinued Operations, Net of Tax

Net income (loss) from discontinued operations, net of tax, for fiscal 2021 was income of $11.3 million, or $0.11 per diluted share, compared with a net loss of $106.0 million or $1.02 per diluted share for fiscal 2020.

During the twelve months ended June 30, 2021, the Company recognized a $11.3 million adjustment to the Tilda business primarily related to the recognition of a deferred tax benefit.

Net loss from discontinued operations, net of tax, for the twelve months ended June 30, 2020 included a reclassification of $95.1 million of cumulative translation losses from Accumulated other comprehensive loss related to the Tilda business' discontinued operations.

The income tax expense from discontinued operations of $13.5 million for the twelve months ended June 30, 2020 was impacted by $15.3 million of tax related to the tax gain on the sale of the Tilda entities.

See Note 5, Dispositions , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Net Income (Loss)

Net income for fiscal 2021 was $77.4 million compared to net loss of $80.4 million for fiscal 2020.

Net income per diluted share was $0.76 in fiscal 2021 compared to net loss per diluted share of $0.77 in 2020.

The change was attributable to the factors noted above.

3 unchanged sentences

GAAP Financial Measures to U.S.

GAAP Measures following the discussion of our results of operations for definitions and a reconciliation of our net loss to Adjusted EBITDA.

GAAP Measures following the discussion of our results of operations for definitions and a reconciliation of our net income (loss) to Adjusted EBITDA.

Segment Results

2 unchanged sentences

Fiscal 2021 net sales

$ 1,104,128 $ 866,174 $ — $ 1,970,302

Fiscal 2020 net sales

$ 1,171,478 $ 882,425 $ — $ 2,053,903

$ change $ (67,350) $ (16,251) n/a $ (83,601)

1 unchanged sentence

Fiscal 2021 operating income (loss)

$ 129,010 $ 38,036 $ (59,666) $ 107,380

Fiscal 2020 operating income (loss)

$ 95,934 $ 55,333 $ (95,225) $ 56,042

$ change $ 33,076 $ (17,297) $ 35,559 $ 51,338

% change 34.5 % (31.3) % 37.3 % 91.6 %

Fiscal 2020 operating income margin 8.2 % 6.3 % n/a 2.7 %

Fiscal 2019 operating income (loss) margin 2.7 % 6.5 % n/a (1.5) %

* Percentage is not meaningful

Fiscal 2021 operating income margin

11.7 % 4.4 % n/a 5.4 %

Fiscal 2020 operating income margin

8.2 % 6.3 % n/a 2.7 %

North America

Our net sales in the North America reportable segment for fiscal 2021 were $1.10 billion, a decrease of $67.4 million, or 5.7%, from net sales of $1.17 billion in fiscal 2020.

The decrease in net sales was primarily driven by the strategic decision to no longer support certain lower margin SKUs in order to reduce complexity and increase gross margins as well as a reduction in net sales in relation to divested brands such as our Rudi’s business, Arrowhead Mills ® , Europe’s Best ® and WestSoy ® , partially offset by increased overall demand for our products in reaction to the COVID-19 pandemic during the second half of fiscal

On a constant currency basis, adjusted for the impact of divestitures and discontinued brands, net sales decreased by 1.7%.

The decrease of 1.7% was mainly due to lower sales in the current year compared to the prior year driven by higher at-home food consumption and hand sanitizer purchases in the prior year as a result of stay-at-home orders at the beginning of the COVID-19 pandemic.

Additionally, the Company had a large program with a wholesale club in fiscal 2020 which did not recur in fiscal 2021.

Further, sales were lower in the current year due to the impact of the prior year SKU rationalization, which reduced or eliminated sales related to those SKUs in the current year.

The decrease was partially offset by an increase in snacks and tea in fiscal 2021 compared with fiscal 2020.

Operating income in North America in fiscal 2021 was $129.0 million, an increase of $33.1 million, or 34.5%, from $95.9 million in fiscal 2020.

The increase in operating income was the result of increased gross profit in the United States driven by a favorable product mix due to our efforts under the “Get Bigger” and “Get Better” strategy for our brands, efficient trade spending and supply chain cost reductions in the United States as well as other productivity savings, offset in part by increased marketing and advertising expense and variable compensation.

The increase was driven by a favorable product mix, lower selling, general and administrative expenses and supply chain cost efficiencies gained with the Company's productivity and transformation initiatives, partially offset by lower net sales in 2021.

International

Our net sales in the International reportable segment for fiscal 2020 were $882.4 million, a decrease of $26.2 million, or 2.9%, from net sales of $908.6 million in fiscal 2019.

On a constant currency basis, net sales decreased 0.1% from the prior year primarily due to a decline in our fruit business as a result of impacts from the COVID-19 pandemic and discontinued sales of unprofitable SKUs, partially offset by growth in our plant-based food and beverage products.

Operating income in our International reportable segment for fiscal 2020 was $55.3 million, a decrease of $3.5 million, or 5.9%, from $58.8 million in fiscal 2019.

Excluding the impact of foreign currency movements of $1.8 million, operating income decreased 2.8% for fiscal 2020, compared to the prior year period, due to reductions in sales of certain fruit-based products and non-cash impairment charges primarily related to a write-down of certain machinery and equipment in Europe, offset in part by increased gross profit driven by a favorable product mix and increased overall demand for our products in reaction to COVID-19 in Europe.

Net sales in the International reportable segment for fiscal 2021 were $866.2 million, a decrease of $16.3 million, or 1.8%, from net sales of $882.4 million in fiscal 2020 .

On a constant currency basis, and adjusted for the impact of divestitures and discontinued brands, net sales increased by 0.8% from fiscal 2020 .

The increase in adjusted net sales was due to sustained demand from the prior year with additional growth in the current year from our plant-based food and beverage products.

Opera ting income in our International reportable segment for fiscal 2021 was $38.0 million, a decrease of $17.3 million, or 31.3%, from $55.3 million in fiscal 2020.

The decrease in operating income was mainly due to an impairment loss recorded for the Fruit business amounting to $56.0 million, partially offset by improved gross profit of $28.0 million mainly due to product mix and benefits realized from our productivity initiatives in fiscal 2021 when compared with fiscal 2020.

Corporate and Other

Our Corporate and Other category consists of expenses related to the Company’s centralized administrative functions, which do not specifically relate to an operating segment.

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

Additionally, productivity and transformation costs, trade name impairment charges, and proceeds from insurance claim included within Corporate and Other expenses were $32.7 million, $9.5 million and $3.0 million, respectively, for the fiscal year ended June 30, 2020.

Former Chief Executive Officer Succession Plan expense, net, Productivity and transformation costs and Accounting review and remediation costs, net of insurance proceeds included within Corporate and Other expenses were $30.2 million, $28.4 million and $4.3 million, respectively, for the fiscal year ended June 30, 2019.

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

Our Corporate and Other expenses for fiscal 2021 were $59.7 million, a decrease of $35.6 million or 37.3% , from $95.2 million in fiscal 2020 .

This change was primarily related to a decrease in productivity and transformation costs included in Corporate and Other, which were $10.6 million for fiscal 2021 , a decrease of $22.1 million, from $32.7 million for fiscal 2020 .

Additionally, included in fiscal 2020 was a tradename impairment charge of $9.5 million which did not recur in fiscal 2021.

These decreases were offset in part by additional retirement plan expense of $1.1 million in fiscal 2021 as a result of a higher employer match into the defined contribution plan.

Refer to Note 21, Segm ent Information , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional details.

18 unchanged sentences

27,493 1.3 % 33,719 1.6 % (6,226) (18.5) %

Operating (loss) income (32,493) (1.5) % 86,670 3.8 % (119,163) (137.5) %

Operating income (loss) 56,042 2.7 % (32,493) (1.5) % 88,535 (272.5) %

Interest and other financing expense, net 18,258 0.9 % 22,517 1.1 % (4,259) (18.9) %

Other expense (income), net 994 — % (2,151) (0.1) % 3,145 (146.2) %

(Loss) income from continuing operations before income taxes and equity in net loss (income) of equity-method investees

(56,004) (2.7) % 72,434 3.2 % (128,438) (177.3) %

Benefit for income taxes (3,232) (0.2) % (1,971) (0.1) % (1,261) 64.0 %

Equity in net loss (income) of equity-method investees

655 — % (339) — % 994 (293.2) %

Net (loss) income from continuing operations $ (53,427) (2.5) % $ 74,744 3.3 % $ (128,171) (171.5) %

Other expense, net 3,956 0.2 % 994 — % 2,962 298.0 %

Income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees 33,828 1.6 % (56,004) (2.7) % 89,832 (160.4) %

Provision (benefit) for income taxes 6,205 0.3 % (3,232) (0.2) % 9,437 (292.0) %

Equity in net loss of equity-method investees 1,989 0.1 % 655 — % 1,334 203.7 %

Net income (loss) from continuing operations $ 25,634 1.2 % $ (53,427) (2.5) % $ 79,061 (148.0) %

Net loss from discontinued operations, net of tax (106,041) (5.2) % (129,887) (6.2) % 23,846 (18.4) %

(129,887) (6.2) % (65,050) (2.9) % (64,837) 99.7 %

Net (loss) income $ (183,314) (8.7) % $ 9,694 0.4 % $ (193,008) *

Net loss $ (80,407) (3.9) % $ (183,314) (8.7) % $ 102,907 (56.1) %

Adjusted EBITDA $199,993 9.7 % $165,112 7.8 % $ 34,881 21.1 %

* Percentage is not meaningful

* Percentage is not meaningful due to a comparison of a positive figure and a negative figure or due to the baseline figure being zero.

Net sales in fiscal 2020 were $2.05 billion, a decrease of $50.7 million, or 2.4%, from net sales of $2.10 billion in fiscal 2019.

1 unchanged sentence

On a constant currency basis, net sales decreased approximately 1.1% from the prior year.

Net sales decreased across both our North America and International reportable segments.

Net sales decreased across both our North America and International reportable segments, primarily driven by the strategic decision to no longer support certain lower margin and unprofitable SKUs, a reduction in net sales in relation to divested brands and a decline in our United Kingdom Fruit business as a result of the impacts from the COVID-19 pandemic.

Further details of changes in net sales by segment are provided below.

Gross profit in fiscal 2019 was $398.5 million, a decrease of $68.8 million, or 14.7%, from gross profit of $467.3 million in fiscal 2018.

Gross profit margin was 18.9%, a decrease of 170 basis points from the prior year.

Gross profit was unfavorably impacted by an inventory write-down of $12.4 million in connection with the discontinuance of slow moving SKUs primarily in North America as part of a product rationalization initiative, higher trade and promotional investments and increased freight and commodity costs primarily in the United States operating segment.

These increased costs were partially offset by productivity and transformation initiative cost savings.

Gross profit in fiscal 2020 was $465.8 million, an increase of $67.3 million, or 16.9%, from gross profit of $398.5 million in fiscal 2019.

Gross profit margin was 22.7%, an increase of 380 basis points from the prior year.

This increase was driven by a

favorable product mix as well as cost savings from the Company’s productivity and transformation initiatives.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $314.0 million, a decrease of $2.3 million, or 0.7%, in fiscal 2019 from $316.3 million in fiscal 2018.

Selling, general and administrative expenses decreased primarily due to lower marketing investment costs in the United States and lower stock-based compensation expense due to the reversal of previously accrued amounts under certain performance-based incentive plans of which achievement was no longer deemed probable.

Selling, general and administrative expenses were $324.4 million in fiscal 2020, an increase of $10.4 million, or 3.3%, from $314.0 million in fiscal 2019.

Selling, general and administrative expenses increased primarily due to higher marketing and advertising spend as well as higher variable compensation costs in fiscal 2020.

Variable compensation costs include stock-based compensation expense, which was higher in fiscal 2020 primarily due to the reversal in the prior year of previously accrued amounts under certain performance-based incentive plans of which achievement was no longer probable.

See Note 14, Stock-based Compensation and Incentive Performance Plans , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for further discussion.

This decrease was offset in part by increased consulting costs in the United States, as well as increased variable compensation costs.

1 unchanged sentence

Amortization of acquired intangibles was $11.6 million in fiscal 2020, a decrease of $1.5 million, or 11.4%, from $13.1 million in fiscal 2019.

The decrease was due to finite-lived intangibles from certain historical acquisitions becoming fully amortized subsequent to June 30, 2018.

Productivity and Transformation Costs

We incurred Productivity and transformation costs of $40.1 million in fiscal 2019, an increase of $23.3 million from $16.8 million in fiscal 2018.

The increase was primarily due to increased consulting fees incurred in connection with the Company’s productivity and transformation initiative as well as increased severance costs in fiscal 2019 as compared to the prior year period.

Productivity and transformation costs were $48.8 million in fiscal 2020, an increase of $8.7 million from $40.1 million in fiscal 2019.

Former Chief Executive Officer Succession Plan Expense, Net

1 unchanged sentence

Simon, agreed to terminate his employment with the Company upon the hiring of a new CEO.

Net costs and expenses associated with the Company’s former Chief Executive Officer succession plan were $30.2 million in fiscal 2019 compared to $0.5 million in fiscal 2018.

Net costs and expenses associated with the Company’s former Chief Executive Officer succession plan were $30.2 million in fiscal 2019 compared with no expense incurred in fiscal year 2020.

See Note 3, Former Chief Executive Officer Succession Plan , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

1 unchanged sentence

In July of 2019, the Company received $7.0 million as partial payment from an insurance claim relating to business disruption costs associated with a co-packer.

Of this amount $4.5 million was recognized in fiscal 2019 as it related to reimbursement of costs already incurred.

Of this amount, $4.5 million was recognized in fiscal 2019 as it related to reimbursement of costs already incurred, with the remaining $2.5 million recorded in the first quarter of fiscal 2020.

The Company recorded an additional $0.5 million in the first quarter of fiscal 2020.

Accounting Review and Remediation Costs, Net of Insurance Proceeds

Costs and expenses associated with the internal accounting review, remediation and other related matters were $4.3 million in fiscal 2019, compared to $9.3 million in fiscal 2018.

Included in accounting review and remediation costs for fiscal 2019 and 2018 were insurance proceeds of $0.2 million and $5.7 million, respectively, related to the reimbursement of costs incurred as part of the internal accounting review and the independent review by the Audit Committee and other related matters.

Goodwill Impairment

In fiscal 2018, the Company recorded a goodwill impairment charge of $7.7 million related to our former Hain Ventures reporting unit, 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 July 1, 2019.

There were no goodwill impairment charges recorded during fiscal 2019.

See Note 10, Goodwill and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

Costs and expenses associated with the internal accounting review, remediation and other related matters were $4.3 million in fiscal 2019, compared to no expense incurred in fiscal 2020.

Long-lived Asset and Intangibles Impairment

During fiscal 2019, the Company recorded a pre-tax impairment charge of $17.9 million ($15.1 million in the North America segment and $2.8 million in the International segment) related to certain trade names of the Company.

See Note 10, Goodwill

and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

During fiscal 2020, the Company recorded $27.5 million of long-lived asset and intangibles impairment charges.

This included a pre-tax impairment charge of $9.5 million ($4.0 million related to the North America reportable segment and $5.5 million related to the International reportable segment) related to certain tradenames of the Company.

The Company also recorded $4.5 million of pre-tax impairment charges relating to customer relationships of certain brand divestitures within the North America reportable segment.

During fiscal 2019, the Company recorded $33.7 million of long-lived asset and intangibles impairment charges.

This included a pre-tax impairment charge of $17.9 million ( $15.1 million related to the North America reportable segment and $2.8 million related to the International reportable segment) related to certain tradenames of the Company.

During fiscal 2018, the Company recorded a pre-tax impairment charge of $5.6 million ($5.1 million in the North America segment and $0.5 million in the International segment) related to certain trade names of the Company.

Also during fiscal 2018, the Company determined that it was more likely than not that certain fixed assets at three of its manufacturing facilities would be sold or otherwise disposed of before the end of their estimated useful lives due to the Company’s decision to utilize third-party manufacturers for two facilities in the United States and to the closure of one facility to consolidate manufacturing of certain soup products in the United Kingdom.

As such, the Company recorded a $6.3 million non-cash impairment charge primarily related to the closures of these facilities.

Additionally, the Company discontinued additional slow moving SKUs in the United States as part of a product rationalization initiative.

As a result, expected future cash flows are not expected to support the carrying value of certain machinery and equipment used to manufacture these products.

As such, the Company recorded a $2.1 million non-cash impairment charge to write down the value of these assets to fair value.

Operating (Loss) Income

Operating loss in fiscal 2019 was $32.5 million compared to operating income of $86.7 million in fiscal 2018.

The decrease in operating income resulted from the items described above.

See Not e 7, Property, Plant and Equipment, Net and Note 9, G oodwill and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for details regarding the aforementioned impairment charges.

Operating Income (Loss)

Operating income in fiscal 2020 was $56.0 million compared to operating loss of $32.5 million in fiscal 2019.

The increase from operating loss to operating income in fiscal 2020 resulted from the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense, net totaled $22.5 million in fiscal 2019, an increase of $6.1 million, or 37.4%, from $16.4 million in the prior year.

The increase in interest and other financing expense, net resulted primarily from higher interest expense related to our revolving credit facility as a result of higher variable interest rates.

Interest and other financing expense, net totaled $18.3 million in fiscal 2020, a decrease of $4.3 million, or 18.9%, from $22.5 million in the prior year.

The decrease in interest and other financing expense, net resulted primarily from lower interest expense related to our revolving credit facility as a result of lower variable interest rates and a lower balance of borrowings outstanding during fiscal year 2020 compared to fiscal year 2019.

See Note 11, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

Other Expense (Income), Net

Other expense (income), net totaled $1.0 million of expense in fiscal 2019, a decrease of $3.1 million from $2.2 million of income in the prior year.

Included in other expense (income), net for the fiscal year ended June 30, 2019 were net unrealized foreign currency losses, which were higher than the prior year period principally due to the effect of foreign currency movements on the remeasurement of foreign currency denominated loans.

(Loss) Income from Continuing Operations Before Income Taxes and Equity in Net Loss (Income) of Equity-Method Investees

Loss before income taxes and equity in the net loss of our equity-method investees for fiscal 2019 was $56.0 million compared to income of $72.4 million in fiscal 2018.

The decrease was due to the items discussed above.

Benefit for Income Taxes

The provision for income taxes includes federal, foreign, state and local income taxes.

Our income tax benefit from continuing operations was $3.2 million and $2.0 million for fiscal 2019 and 2018 , respectively.

Other Expense, Net

Other expense, net totaled $4.0 million in fiscal 2020, an increase of $3.0 million from $1.0 million in the prior year.

Income (Loss) from Continuing Operations Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Income before income taxes and equity in the net loss of our equity-method investees for fiscal 2020 was $33.8 million compared to loss of $56.0 million in fiscal 2019.

The increase was due to the items discussed above.

Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes includes federal, foreign, state and local income taxes.

Our income tax from continuing operations was an expense of $6.2 million and a benefit of $3.2 million for fiscal 2020 and 2019 , respectively.

On March 27, 2020, H.R.

748, the CARES Act was signed into legislation which includes business tax provisions that impacted taxes related to 2018, 2019 and 2020.

Some of the significant tax law changes in accordance with the CARES Act were to increase the limitation on deductible business interest expense for 2019 and 2020, allow for the five-year carryback of net operating losses for 2018-2020, suspend the 80% limitation of taxable income for net operating loss carryforwards for 2018-2020, provide for the acceleration of depreciation expense from 2018 and forward on qualified improvement property, and accelerate the ability to claim refunds of Alternative Minimum Tax (“AMT”) credit carryforwards.

The Company carried

back net operating losses generated in the June 30, 2019 tax year for five years, resulting in a net income tax benefit of $11.2 million.

The Company recorded a tax refund receivable of $52.5 million which was included as a component of Prepaid expenses and other current assets on the Consolidated Balance Sheet as of June 30, 2020.

On December 22, 2017, the U.S.

government enacted comprehensive tax legislation pursuant to the Tax Act, which significantly revised the ongoing U.S.

government enacted comprehensive tax legislation pursuant to the Tax Cuts and Jobs Act (the “Tax Act”), which significantly revised the ongoing U.S.

corporate income tax law by lowering the U.S.

6 unchanged sentences

The adjustment of the Company’s provisional tax expense was recorded as a change in estimate in accordance with SAB No.

The effective income tax rate from continuing operations was a benefit of 5.8% and a benefit of 2.7% of pre-tax income for the twelve months ended June 30, 2019 and 2018, respectively.

The Tax Act also includes a provision to tax GILTI of foreign subsidiaries.

The Financial Accounting Standards Board (“FASB”) Staff Q&A Topic No.

The Company has elected to recognize the resulting tax on GILTI as a period expense in the period the tax is incurred.

The Company has computed the impact on our effective tax rate on a discrete basis.

The effective income tax rate from continuing operations was expense of 18.3% and a benefit of 5.8% of pre-tax income for the twelve months ended June 30, 2020 and 2019, respectively.

The effective income tax rate from continuing operations for the twelve months ended June 30, 2018 was primarily impacted by the enactment of the Tax Act on December 22, 2017.

See Note 12, Income Taxes , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

Equity in Net Loss (Income) of Equity-Method Investees

Our equity in the net loss from our equity method investments for fiscal 2019 was $0.7 million compared to equity in net income of $0.3 million for fiscal 2018.

Equity in Net Loss of Equity-Method Investees

Our equity in the net loss from our equity method investments for fiscal 2020 was $2.0 million compared to equity in net loss of $0.7 million for fiscal 2019.

See Note 15, Investments , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

Net (Loss) Income from Continuing Operations

Net loss from continuing operations for fiscal 2019 was $53.4 million compared to net income of $74.7 million for fiscal 2018.

Net loss per diluted share was $0.51 in fiscal 2019 compared to net income per diluted share of $0.72 in fiscal 2018.

Net Income (Loss) from Continuing Operations

Net income from continuing operations for fiscal 2020 was $25.6 million compared to net loss of $53.4 million for fiscal 2019.

Net income per diluted share was $0.25 in fiscal 2020 compared to net loss per diluted share of $0.51 in fiscal 2019.

The decrease was attributable to the factors noted above.

1 unchanged sentence

Net loss from discontinued operations for fiscal 2020 and 2019 was $106.0 million and $129.9 million, respectively, or $1.02 and $1.25 per diluted share, respectively.

The increase in net loss from discontinued operations was primarily attributable to asset impairment charges of $109.3 million and losses on sale in connection with the disposition of the Plainville Farms and HPPC businesses of $40.2 million and $0.6 million, respectively, in each case recorded in fiscal 2019 and discussed in Note 5, Discontinued Operations and Assets Held for Sale , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Net (Loss) Income

Net loss for fiscal 2019 was $183.3 million compared to net income of $9.7 million for fiscal 2018.

Net loss per diluted share was $1.76 in fiscal 2019 compared to net income per diluted share of $0.09 in 2018.

See Note 5, Dispositions , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Net loss for fiscal 2020 was $80.4 million compared to net loss of $183.3 million for fiscal 2019.

Net loss per diluted share was $0.77 in fiscal 2020 compared to net loss per diluted share of $1.76 in 2019.

The change was attributable to the factors noted above.

3 unchanged sentences

GAAP Financial Measures to U.S.

GAAP Measures following the discussion of our results of operations for definitions and a reconciliation of our net (loss) income to Adjusted EBITDA.

GAAP Measures following the discussion of our results of operations for definitions and a reconciliation of our net loss to Adjusted EBITDA.

Segment Results

6 unchanged sentences

Fiscal 2020 operating income (loss) $ 95,934 $ 55,333 $ (95,225) $ 56,042

$ 32,682 $ 58,808 $ (123,983) $ (32,493)

Fiscal 2019 operating income (loss) $ 32,682 $ 58,808 $ (123,983) $ (32,493)

$ 104,025 $ 57,630 $ (74,985) $ 86,670

$ change $ 63,252 $ (3,475) $ 28,758 $ 88,535

% change 193.5 % (5.9) % 23.2 % (272.5) %

Fiscal 2019 operating income (loss) margin

2.7 % 6.5 % n/a (1.5) %

Fiscal 2018 operating income margin

8.0 % 5.9 % n/a 3.8 %

Fiscal 2020 operating income (loss) margin 8.2 % 6.3 % n/a 2.7 %

Fiscal 2019 operating income (loss) margin 2.7 % 6.5 % n/a (1.5) %

North America

Our net sales in the North America reportable segment in fiscal 2020 were $1.17 billion, a decrease of $24.5 million, or 2.0%, from net sales of $1.20 billion in fiscal 2019.

The decrease in net sales was primarily driven by declines in our Pantry, Better-For-You-Baby, Fresh Living and Personal Care platforms.

In addition, the declines were also driven by the strategic decision to no longer support certain lower margin SKUs in order to reduce complexity and increase gross margins.

Operating income in the North America reportable segment in fiscal 2019 was $32.7 million, a decrease of $71.3 million, or 68.6%, from $104.0 million in fiscal 2018.

The decrease in operating income was the result of the aforementioned decrease in net sales, higher trade investments to drive future period growth, increased freight and logistics costs, start-up costs incurred in connection with a new manufacturing facility, inventory write-downs of $12.1 million in connection with the discontinuance of slow moving SKUs as part of a product rationalization initiative and a $7.1 million non-cash impairment charge to write down the value of certain machinery and equipment no longer in use in fiscal 2019, offset in part by productivity and transformation initiative cost savings.

Operating income in North America in fiscal 2020 was $95.9 million, an increase of $63.3 million, or 193.5%, from $32.7 million in fiscal 2019.

International

Our net sales in the International reportable segment in fiscal 2020 were $882.4 million, an decrease of $26.2 million, or 2.9%, from net sales of $908.6 million in fiscal 2019.

On a constant currency basis, net sales decreased 2.4% from the prior year primarily due to discontinued sales of unprofitable SKUs, partially offset by growth in our beverage products.

Operating income in the International reportable segment for fiscal 2019 was $58.8 million, an increase of $1.2 million, or 2.0%, from $57.6 million in fiscal 2018.

Excluding the impact of foreign currency movements of $3.0 million, operating income increased 7.2% for fiscal 2019.

The increase in operating income was primarily due to increased gross profit driven by a favorable product mix, offset in part by the aforementioned decrease in sales and non-cash impairment charges associated with the consolidation of manufacturing of certain fruit-based products in the United Kingdom in fiscal 2019.

On a constant currency basis, net sales decreased 0.1% from the prior year primarily due to a decline in our United Kingdom Fruit business as a result of impacts from the COVID-19 pandemic and discontinued sales of unprofitable SKUs, partially offset by growth in our plant-based food and beverage products.

Operating income in our International reportable segment for fiscal 2020 was $55.3 million, a decrease of $3.5 million, or 5.9%, from $58.8 million in fiscal 2019.

Excluding the impact of foreign currency movements of $1.8 million, operating income decreased 2.8% for fiscal 2020, compared to the prior year, due to reductions in sales of certain fruit-based products and non-cash impairment charges primarily related to a write-down of certain machinery and equipment in Europe, offset in part by increased gross profit driven by a favorable product mix and increased overall demand for our products in reaction to COVID-19 in Europe.

Corporate and Other

1 unchanged sentence

Additionally, Productivity and transformation costs included in Corporate and Other totaled $28.4 million and $10.1 million for the fiscal years ended June 30, 2019 and 2018, respectively.

The Corporate and Other category also included accounting review and remediation costs, net of $4.3 million and $9.3 million for the fiscal years ended June 30, 2019 and 2018, respectively, and Former Chief Executive Officer Succession Plan expense, net of $30.2 million for the fiscal year ended June 30, 2019.

Additionally, productivity and transformation costs, tradename impairment charges and proceeds from insurance claim included within Corporate and Other expenses were $32.7 million, $9.5 million and $3.0 million, respectively, for the fiscal year ended June 30, 2020.

Refer to Note 21, Segment Information , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional details.

2 unchanged sentences

See Note 11 , Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

Our cash and cash equivalents balance increased $6.8 million at June 30, 2020 to $37.8 million compared to $31.0 million at June 30, 2019.

Our working capital was $260.7 million at June 30, 2020, an increase of $20.4 million from $240.3 million at the end of fiscal 2019 , which excludes current assets and current liabilities of discontinued operations.

Our cash and cash equivalents balance increased by $38.1 million at June 30, 2021 to $75.9 million compared to $37.8 million at June 30, 2020.

Our working capital, which excludes current assets and current liabilities of discontinued operations, was $284.7 million at June 30, 2021, an increase of $28.9 million from $255.9 million at the end of fiscal 2020.

Liquidity is affected by many factors, some of which are based on normal ongoing operations of the Company’s business and some of which arise from fluctuations related to global economics and markets.

Our cash balances are held in the United States, United Kingdom, Canada, Europe and India.

As of June 30, 2020 , all of t he Company’s total cash balance was held outside of the United States.

Our cash balances are held in the United States, United Kingdom, Canada, Europe, Middle East, and India.

As of June 30, 2021, all of the Company’s total cash balance was held outside of the United States.

The Company historically considered the undistributed earnings of its foreign subsidiaries to be indefinitely reinvested.

To achieve its cash management objectives, during the fourth quarter of fiscal 2020, the Company reversed its reinvestment assertion for certain international locations representing $93.4 million of foreign earnings.

The Company continues to reinvest $732.1 million of undistributed earnings of its foreign subsidiaries and may be subject to additional foreign withholding taxes and U.S.

11 unchanged sentences

Increase (decrease) in cash from continuing operations 31,952 7,320 (52,160)

(Decrease) increase in cash from discontinued operations (8,509) (19,809) 7,919

Decrease in cash from discontinued operations — (8,509) (19,809)

Effect of exchange rate changes on cash 6,148 (566) (1,522)

Net decrease in cash and cash equivalents $ (1,755) $ (73,491) $ (33,975)

Cash provided by operating activities from continuing operations was $156.9 million for the fiscal year ended June 30, 2020, compared to $39.3 million in fiscal 2019 and $114.4 million in fiscal 2018.

The increase in cash provided by operating activities in fiscal 2020 resulted primarily from an improvement of $141.5 million in net income adjusted for non-cash charges, offset in part by an increase of $23.9 million of cash used in working capital accounts.

The increase in working capital in fiscal 2020 is mainly due to a tax refund receivable of $52.5 million (included as a component of Other current assets in the Consolidated Statement of Cash Flows) resulting from carryback of NOLs under the CARES Act.

C ash provided by operating activities from continuing operations was $39.3 million for the fiscal year ended 2019, compared to $114.4 million in fiscal 2018.

The decrease in cash provided by operating activities in fiscal 2019 resulted primarily from a decrease of $120.1 million in net income adjusted for non-cash charges, offset in part by a decrease of $45.1 million of cash used in working capital accounts.

Cash used in investing activities from continuing operations was $45.1 million for the fiscal year ended June 30, 2020, a decrease of $23.5 million from $68.6 million in fiscal 2019 primarily due to proceeds of $15.8 million from brand divestitures and other investing activities and decreased capital expenditures.

Cash used in investing activities from continuing operations was $68.6 million for fiscal 2019, a decrease of $12.4 million from $81.1 million in fiscal 2018 primarily due to cash used in connection with our Clarks UK Limited acquisition in fiscal 2018.

Cash used in financing activities from continuing operations was $104.5 million for the fiscal year ended June 30, 2020 and included $345.9 million of net repayments of our term loan and revolving credit facility funded primarily with the proceeds received from the sale of Tilda and $60.2 million of share repurchases, offset in part by $305.6 million primarily related to the proceeds from the sale of Tilda.

Cash used in financing activities from continuing operations was $22.8 million for fiscal 2019 and primarily included $73.8 million of net repayments of our term loan and revolving credit facility funded primarily through proceeds received from the sale of HPPC and EK Holdings, Inc, offset in part by $56.6 million of proceeds received from operations of discontinued operations.

Cash used in financing activities from continuing operations was $75.4 million for fiscal 2018 and primarily included $39.7 million of net repayments of our term loan and revolving credit facility funded primarily through cash flows from operations and $26.8 million to fund the operations of discontinued operations.

Net increase (decrease) in cash and cash equivalents $ 38,100 $ (1,755) $ (73,491)

Cash provided by oper ating activities from continuing operations was $196.8 million for the fiscal year ended June 30, 2021, compared to $156.9 million in fiscal 2020 and $39.3 million in fiscal 2019.

Th e increase in cash provided by o perating activities in fiscal 2021 compared to fiscal 2020 resulted primarily from an improvement of $32.8 million in net income adjusted for non-cash charges and due to an increase of $7.0 million of cash provided by working capital accounts.

The increase in cash provided by operating activities in fiscal 2020 compared to fiscal 2019 resulted primarily from an improvement of $141.5 million in net income adjusted for non-cash charges, offset in part by an increase of $23.9 million of cash used in working capital accounts.

The increase in working capital in fiscal 2020 was mainly due to a tax refund receivable of $52.5 million (included as a component of Other current assets in the Consolidated Statement of Cash Flows) resulting from carryback of net operating losses (“NOLs”) under the CARES Act.

C ash used in investing activities from continuing operations was $2.4 million for the fiscal year ended June 30, 2021, a decrease of $42.8 million from $45.1 million in fiscal 2020 primar ily due to proceeds of $10.4 million and $58.8 million from the sale of assets and businesses, respectively, partially offset by increased capital expenditures.

Cash used in investing activities from continuing operations was $45.1 million for fiscal 2020, a decrease of $23.5 million from $68.6 million in fiscal 2019 primarily due to proceeds of $15.8 million from brand divestitures and other investing activities and decreased capital expenditures.

Cash used in financing activities from continuing operations was $162.4 million for the fiscal year ended June 30, 2021 and included $50.0 million of net repayments of our revolving credit facility and $106.1 million of share repurchases.

C ash used in financing activities from continuing operations was $104.5 million for fiscal 2020 and primarily included net repayments of $345.9 million on our term loan and revolving credit facility and $60.2 million of share repurchases offset in part by proceeds of $305.6 million from discontinued operations primarily related to the sale of Tilda.

Operating Free Cash Flow from Continuing Operations

Our operating free cash flow was $125.2 million for the fiscal year ended June 30, 2021, an increase of $29.2 million from the fiscal year ended June 30, 2020.

The increase in operating free cash flow primarily resulted from an improvement in net income adjusted for non-cash items of $141.5 million and a decrease in our capital expenditures of $14.9 million, offset in part by cash provided within working capital accounts of $23.9 million.

We refer the reader to the Reconciliation of Non-U.S.

The increase in operating free cash flow primarily resulted from an improvement in net income adjusted for non-cash items of $32.8 million and cash provided within working capital accounts of $7.0 million partially offset by an increase in our capital expenditures of $10.7 million.

Refer to the Reconciliation of Non-U.S.

GAAP Financial Measures to U.S.

GAAP Measures following the discussion of our results of operations for definitions and a reconciliation from our net cash provided by operating activities from continuing operations to operating free cash flow from continuing operations.

GAAP Measures following the disc ussion of our results of operations for definitions and a reconciliation from our net cash provided by operat ing activities from continuing operations to operating free cash flow from continuing operations.

Capital Expenditures

During fiscal 2021, our aggregate capital expenditur es used in continuing operations were $71.6 million.

We expect to spend approximately 3% to 4% of net sales for capital projects in fiscal 2022.

Share Repurchase Program

On June 21, 2017, the Company's Board of Directors authorized the repurchase of up to $250.0 million of the Company’s issued and outstanding common stock.

Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise.

The authorization does not have a stated expiration date.

The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations, including the Company’s historical strategy of pursuing accretive acquisitions.

As of June 30, 2021, the Company had $82.4 million of remaining authorization under the 2017 authorization .

During the fiscal year ended June 30, 2021, the Company repurchased 3.1 million shares under the repurchase program for a total of $107.4 million, excluding commissions, at an average price of $34.87 per share.

As of June 30, 2020, the Company had $189.8 million of remaining authorization under the share repurchase program.

The Company did not repurchase any shares under this program in fiscal 2019 or 2018.

During the fiscal year ended June 30, 2020, the Company repurchased 2.6 million shares under the repurchase program for a total of $60.2 million, excluding commissions, at an average price of $23.59 per share.

The Company did not repurchase any shares under this program in fiscal 2019.

In August 2021, the Company announced that its Board of Directors approved an additional $300 million share repurchase authorization.

Share repurchases under the 2021 authorization will commence after the 2017 authorization is fully utilized, at the Company’s discretion.

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

Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise.

The authorizations do not have a stated expiration date.

Reconciliation of Non-U.S.

2 unchanged sentences

We have included in this report measures of financial performance that are not defined by U.S.

Generally Accepted Accounting Principles (“GAAP”).

We believe that these measures provide useful information to investors and include these measures in other communications to investors.

14 unchanged sentences

As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

A reconciliation between reported and constant currency net sales decrease in fiscal 2020 is as follows:

Divestitures and Discontinued Brands

We also exclude the impact of divestitures and discontinued brands when comparing net sales to prior periods, which results in the presentation of certain non-U.S.

GAAP financial measures.

The Company's management believes that excluding the impact of divestitures and discontinued brands when presenting period-over-period results of net sales aids in comparability.

A reconciliation between reported and adjusted net sales decrease in f iscal 2021 is as follows:

(amounts in thousands) North America International Hain Consolidated

Net sales - Fiscal 2020 $ 1,171,478 $ 882,425 $ 2,053,903

Net sales - Twelve months ended 6/30/21 $ 1,104,128 $ 866,174 $ 1,970,302

Divestitures and discontinued brands (4,630) (5,052) (9,682)

Impact of foreign currency exchange (6,083) (55,224) (61,307)

Net sales on a constant currency basis - Fiscal 2020 $ 1,173,705 $ 907,669 $ 2,081,374

Net sales - Fiscal 2019 $ 1,195,979 $ 908,627 $ 2,104,606

Net sales decrease on a constant currency basis (1.9) % (0.1) % (1.1) %

Net sales on a constant currency basis adjusted for divestitures and discontinued brands - Twelve months ended 6/30/21 $ 1,093,415 $ 805,898 $ 1,899,313

Net sales - Twelve months ended 6/30/20 $ 1,171,478 $ 882,425 $ 2,053,903

Divestitures and discontinued brands (59,671) (83,173) (142,844)

Net sales adjusted for divestitures and discontinued brands - Twelve months ended 6/30/20 $ 1,111,807 $ 799,252 $ 1,911,059

Net sales decline (5.7) % (1.8) % (4.1) %

Impact of divestitures and discontinued brands 4.5 % 8.9 % 6.5 %

Impact of foreign currency exchange (0.5) % (6.3) % (3.0) %

Net sales (decline) growth on a constant currency basis adjusted for divestitures and discontinued brands (1.7) % 0.8 % (0.6) %

A reconciliation between reported and constant currency net sales decrease in fiscal 2020 is as follows:

(amounts in thousands) North America International Hain Consolidated

Net sales - Fiscal 2019 $ 1,195,979 $ 908,627 $ 2,104,606

Net sales - Twelve months ended 6/30/20 $ 1,171,478 $ 882,425 $ 2,053,903

Divestitures and discontinued brands (59,671) (83,173) (142,844)

Impact of foreign currency exchange 2,227 25,244 27,471

Net sales on a constant currency basis - Fiscal 2019 $ 1,202,026 $ 947,104 $ 2,149,130

Net sales - Fiscal 2018 $ 1,295,413 $ 970,257 $ 2,265,670

Net sales decrease on a constant currency basis (7.2) % (2.4) % (5.1) %

Net sales on a constant currency basis adjusted for divestitures and discontinued brands - Twelve months ended 6/30/20 $ 1,114,034 $ 824,496 $ 1,938,530

Net sales - Twelve months ended 6/30/19 $ 1,195,979 $ 908,627 $ 2,104,606

Divestitures and discontinued brands (110,531) (118,647) (229,178)

SKU rationalization (41,885) (8,372) (50,257)

Net sales adjusted for divestitures, discontinued brands and SKU rationalization $ 1,043,563 $ 781,608 $ 1,825,171

Net sales decline (2.0) % (2.9) % (2.4) %

Impact of divestitures and discontinued brands 5.0 % 4.7 % 4.9 %

Impact of SKU rationalization 3.6 % 0.9 % 2.4 %

Impact of foreign currency exchange 0.2 % 2.8 % 1.3 %

Net sales growth on a constant currency basis adjusted for divestitures, discontinued brands and SKU rationalization 6.8 % 5.5 % 6.2 %

Adjusted EBITDA

Adjusted EBITDA is defined as net (loss) income before income taxes, net interest expense, depreciation and amortization, impairment of long-lived and intangible assets, equity in the earnings of equity-method investees, stock-based compensation, Productivity and transformation costs, and other non-recurring items.

Adjusted EBITDA is defined as net income (loss) before income taxes, net interest expense, depreciation and amortization, impairment of long-lived and intangible assets, equity in the earnings of equity-method investees, stock-based compensation, productivity and transformation costs, and other non-recurring items.

The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition.

In addition, management uses this measure for reviewing the financial results of the Company and as a component of performance-based executive compensation.

In addition, management uses this measure for

reviewing the financial results of the Company and as a component of performance-based executive compensation.

Adjusted EBITDA is a non-U.S.

9 unchanged sentences

(amounts in thousands) 2021 2020 2019

Net (loss) income $ (80,407) $ (183,314) $ 9,694

Net loss from discontinued operations (106,041) (129,887) (65,050)

Net income (loss) $ 77,364 $ (80,407) $ (183,314)

Net income (loss) from discontinued operations 11,255 (106,041) (129,887)

Net income (loss) from continuing operations $ 66,109 $ 25,634 $ (53,427)

2 unchanged sentences

Depreciation and amortization 49,569 52,088 50,898

Equity in net loss (income) of equity-method investees 1,989 655 (339)

Equity in net loss of equity-method investees 1,591 1,989 655

Stock-based compensation, net 15,659 13,078 9,471

11 unchanged sentences

SKU rationalization and inventory write-down (421) 4,175 12,381

Loss (gain) on sale of business 3,564 (534) —

Gain on sale of assets (4,900) — —

(Gain) loss on sale of business (2,604) 3,564 (534)

Warehouse/manufacturing facility start-up costs 11,374 3,440 17,636

2 unchanged sentences

Realized currency loss on repayment of international loans — — 2,706

Losses on terminated chilled desserts contract — — 6,553

Co-packer disruption — — 3,566

Regulated packaging change — — 1,007

Toys “R” Us bad debt — — 897

Recall and other related costs — — 580

Machine break-down costs — — 317

Adjusted EBITDA $ 258,938 $ 199,993 $ 165,112

12 unchanged sentences

Purchase of property, plant and equipment (71,553) (60,893) (75,792)

Operating free cash flow continuing operations $ 96,021 $ (36,459) $ 44,940

Operating free cash flow provided by (used in) continuing operations $ 125,206 $ 96,021 $ (36,459)

Contractual Obligations

Obligations for all debt instruments, capital and operating leases and other contractual obligations as of June 30, 2020 are as follows:

Obligations for all debt instruments, finance and operating leases and other contractual obligations as of June 30, 2021 are as follows:

Payments Due by Period

4 unchanged sentences

115,797 13,592 27,363 22,227 52,615

Operating leases not yet commenced 9,797 576 1,778 1,839 5,604

Finance lease obligations (2)

2 unchanged sentences

234,579 202,768 31,811 — —

Other long term liabilities 467 350 117 — —

Total contractual obligations $ 588,932 $ 221,563 $ 292,161 $ 22,441 $ 52,767

(1) Including principal and interest.

(2) Including interest.

(3) Excludes amounts that may be payable upon termination to co-packers as we are not able to reasonably estimate such amounts.

12 unchanged sentences

Revenue Recognition

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

T he majority of our revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the

purchase of our products.

T he majority of our revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of our products.

We recognize revenue as performance obligations are fulfilled when control passes to our customers.

23 unchanged sentences

Actual expenses may differ if the level of redemption rates and performance were to vary from estimates.

Costs to Obtain or Fulfill a Contract

As our contracts are generally shorter than one year, the Company has elected a practical expedient under ASU 2014-09 that allows the Company to expense as incurred the incremental costs of obtaining a contract if the contract period is for one year or less.

These costs are included in the selling, general and administrative expense line item on the Consolidated Statements of Operations.

Disaggregation of Net Sales

The Company does not disaggregate revenue below the segment revenues level disclosed in Note 22, Segment Information , as all revenues are recognized at a point in time and the Company’s segment revenues depict how the economic factors affect the nature, amount, and timing and uncertainty of cash flows.

Valuation of Accounts and Chargeback Receivable

We perform routine credit evaluations on existing and new customers.

We apply reserves for delinquent or uncollectible trade receivables based on a specific identification methodology and also apply an additional reserve based on the experience we have with our trade receivables aging categories.

Credit losses have been within our expectations in recent years.

While Walmart Inc.

and its affiliates, Sam’s Club and ASDA, together represented approximately 13% of accounts receivable, net at June 30, 2020, we believe there is no significant or unusual credit exposure at this time.

As credit losses have been within our expectations in recent years and as no customers represented more than 10% of accounts receivable, net at June 30, 2021, we believe there is no significant or unusual credit exposure at this time.

Based on cash collection history and other statistical analysis, we estimate the amount of unauthorized deductions that our customers have taken that we expect will be collectible and repaid in the near future and record a chargeback receivable.

22 unchanged sentences

The amount of the impairment is the difference between the carrying value of the goodwill and the “implied” fair value, which is calculated as if the reporting unit had just been acquired and accounted for as a business combination.

Indefinite-lived intangible assets consist primarily of acquired trade names and trademarks.

Indefinite-lived intangible assets consist primarily of acquired tradenames and trademarks.

We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired.

We measure the fair value of these assets using the relief from royalty method.

This method assumes that the trade names and trademarks have value to the extent their owner is relieved from paying royalties for the benefits received.

This method assumes that the tradenames and trademarks have value to the extent their owner is relieved from paying royalties for the benefits received.

We estimate the future revenues for the associated brands, the appropriate royalty rate and the weighted average cost of capital.

1 unchanged sentence

As of June 30, 2021, the carrying value of goodwill was $871.1 million.

For the fiscal 2020 impairment analysis, the Company performed the qualitative assessment for all of its reporting units with the exception of the Hain Daniels reporting unit where a two-step quantitative assessment was performed.

For the fiscal 2021 impairment analysis, the Company performed the qualitative assessment for all of its reporting units with the exception of the Hain U.S.

and Hain Canada reporting units where a quantitative assessment was performed.

The estimated fair value of each reporting unit exceeded its carrying value based on the analysis performed.

For the Hain Daniels reporting unit, the first step of the two-step analysis was performed, and it was found that the estimated fair value of the reporting unit exceeded its carrying value by at least 20%.

For the Hain U.S.

and Hain Canada reporting units, the quantitative analysis was performed, and it was found that the estimated fair value of the reporting unit exceeded its carrying value by 110% and 230%, respectively.

Holding all other assumptions used in the 2021 fair value measurement constant, a 100-basis-point increase in the weighted average cost of capital would not result in the carrying value of the reporting units to be in excess of the fair value.

2 unchanged sentences

The Company will continue to monitor impairment indicators and financial results in future periods.

For the fiscal year ended June 30, 2018, the Company recognized a goodwill impairment charge of $7.7 million primarily as a result of lowered projected long-term revenue growth rates and profitability levels in its former Hain Ventures reporting unit, 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.

Indefinite-lived intangible assets are evaluated on an annual basis in conjunction with the Company’s evaluation of goodwill, or on an interim basis if and when events or circumstances change that would more likely than not reduce the fair value of any of its indefinite-life intangible assets below their carrying value.

3 unchanged sentences

If the carrying value of the indefinite-lived intangible assets exceeds the fair value of the asset, the carrying value is written down to fair value in the period identified.

During the second and third quarters of fiscal 2020, the Company determined that indicators of impairment existed in certain of the Company’s indefinite-lived trade names in association with the sale or discontinuation of certain businesses and brands.

The Company performed interim impairment analyses during the year, and determined that the fair value of certain of the Company’s trade names was below their carrying value, and therefore an impairment charge of $9.5 million was recognized ( $4.0 million in the North America segment and $5.5 million in the International segment ).

The result of the annual assessment for the year ended June 30, 2020 indicated that the fair value of the Company’s trade names exceeded their carrying values and no indicators of impairment were present.

For the fiscal year ended June 30, 2019, a trade name impairment charge of $17.9 million was recognized ( $15.1 million in the North America segment and $2.8 million in the International segment).

For the fiscal year ended June 30, 2018, a trade name impairment charge of $5.6 million ( $5.1 million in the North America segment and $0.5 million in the International segment) was recorded.

The result of the annual assessment for the year ended June 30, 2021 indicated that the fair value of the Company’s tradenames exceeded their carrying values and no indicators of impairment were present.

During the second and third quarters of fiscal 2020, the Company determined that indicators of impairment existed in certain of the Company’s indefinite-lived tradenames in association with the sale or discontinuation of certain businesses and brands.

The Company performed interim impairment analyses during the year, and determined that the fair value of certain of the Company’s tradenames was below their carrying value, and therefore an impairment charge of $9.5 million was recognized ( $4.0 million in the North America reportable segment and $5.5 million in the International reportable segment ).

For the fiscal year ended June 30, 2019, a tradename impairment charge of $17.9 million was recognized ( $15.1 million in the North America reportable segment and $2.8 million in the International reportable segment).

See also Note 9, Goodwill and Other Intangible Assets , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K, for additional information.

6 unchanged sentences

Compensation expense is recognized for only that portion of stock-based awards that are expected to vest.

Therefore, estimated forfeiture rates that are derived from historical employee termination activity are applied to reduce the amount of compensation expense recognized.

If the actual forfeitures differ from the estimate, additional adjustments to compensation expense may be required in future periods.

Valuation Allowances for Deferred Tax Assets

8 unchanged sentences

Under current tax law in these jurisdictions, our carryforward losses have no expiration.

During fiscal 2019, the Company released the valuation allowance on a majority of its U.K.

net operating loss carryforwards as it is more likely than not that the losses are realizable.

During fiscal 2020, we recorded a partial valuation allowance against our state deferred tax assets and state net operating loss carryforwards as it is not more likely than not that the state tax attributes will be realized.

During fiscal 2020 and 2019, we recorded a valuation allowance against a majority of our state deferred tax assets and state net operating loss carryforwards as it was not more likely than not that the state tax attributes will be realized.

In fiscal 2021, the Company had positive results in the United States and, thus, state-level taxable income.

This resulted in an expected utilization of certain of the state deferred tax assets which were previously reserved.

Valuation allowances reversed were based on this positive evidence, in addition to other positive evidence, which justified the release of an additional amount of the state.

valuation allowance.

Recent Accounting Pronouncements

1 unchanged sentence

Certain of our product lines have seasonal fluctuations.

Hot tea, baking products, hot cereal, hot-eating desserts and soup sales are stronger in colder months, while sales of snack foods, sunscreen and certain of our prepared food and personal care products are stronger in the warmer months.

Hot tea, hot-eating desserts and soup sales are stronger in colder months, while sales of snack foods, sunscreen and certain of our personal care products are stronger in the warmer months.

As such, our results of operations and our cash flows for any particular quarter are not indicative of the results we expect for the full year, and our historical seasonality may not be indicative of future quarterly results of operations.

1 unchanged sentence

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-K

Item 7. Management’s Discussion and Analysis