What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-08-26 compared with 2020-08-25 · 410 added, 532 removed, 1051 unchanged (47% of the section changed)

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated August 26, 2021 expressed an unqualified opinion thereon.

Adoption of a New Accounting Standard

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases, which generally requires all leases be recognized in the statement of financial position, in 2020 due to the adoption of ASU No.

2016-02, Leases (Topic 842) .

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Goodwill and Trademarks and Trade names

Description of the Matter At June 30, 2020, the Company’s goodwill and trademarks and trade names were $0.9 billion and $0.3 billion, respectively.

As discussed in Note 10 of the 2020 consolidated financial statements, goodwill and trademarks and trade names are qualitatively or quantitatively tested for impairment at least annually, or more frequently when necessary.

If the fair value of the intangible asset is less than its carrying amount, an impairment loss is recognized.

Auditing management’s annual goodwill and trademarks and trade names impairment tests was complex as considerable management judgment was necessary to estimate fair values of the reporting units and trademarks and trade names.

For goodwill, significant assumptions used in management’s evaluations included projections of revenue growth rates and profitability, estimated working capital needs and the weighted average cost of capital.

For trademarks and trade names, significant assumptions used in management’s evaluations included projections of future revenues for the associated brands, royalty rates, and the weighted average cost of capital.

The aforementioned assumptions are affected by expectations about future market or economic conditions that materially impact the fair value of the reporting units as well as the trademark and trade names.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s goodwill and trademark and trade name impairment evaluation process.

For example, we tested controls over management’s review of the significant assumptions used in the reporting unit and trademark and trade name valuations as well as management’s review around the reasonableness of the data used in these valuations.

To test the estimated fair value of the Company’s reporting units and trademarks and trade names, we performed audit procedures that included, among others, testing the significant assumptions discussed above, testing the underlying data used by the Company in its analyses by comparing to historical and other industry data, as well as validating certain assertions with data internal to the Company and from other sources.

We compared the significant assumptions used by management to current industry and economic trends while also considering changes to the Company’s business model, customer base and product mix.

We assessed the historical accuracy of management’s estimates and significant assumptions, such as projections of revenue growth rates and profitability, and estimated working capital needs, by comparing management’s past projections to actual performance.

We used our valuation specialists to independently compute a range of reasonableness for the weighted average cost of capital.

We also performed sensitivity analyses to evaluate the impact that changes in the significant assumptions would have on the fair value of the reporting units and trademarks and trade names.

In addition, we tested the reconciliation of the fair value of the reporting units to the market capitalization of the Company.

We also involved a valuation specialist to assist in our evaluation of the Company's model, valuation methodology and significant assumptions.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition

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Prepaid expenses and other current assets 39,834 95,690

Current assets of discontinued operations — 110,048

Assets held for sale 1,874 8,334

Total current assets 577,055 560,934

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Other assets 21,187 24,238

Noncurrent assets of discontinued operations — 259,167

Total assets $ 2,205,908 $ 2,188,452

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Current portion of long-term debt 530 1,656

Current liabilities of discontinued operations — 31,703

Liabilities related to assets held for sale — 3,567

Total current liabilities 290,434 300,277

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Other noncurrent liabilities 33,531 28,692

Noncurrent liabilities of discontinued operations — 17,361

Total liabilities 683,025 744,898

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Selling, general and administrative expenses 299,077 324,376 314,000

Amortization of acquired intangibles 11,638 13,134 15,934

Amortization of acquired intangible assets 8,931 11,638 13,134

Productivity and transformation costs

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Interest and other financing expense, net 8,654 18,258 22,517

Other expense (income), net 3,956 994 ( 2,151 )

Other (income) expense, net ( 10,067 ) 3,956 994

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

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Provision (benefit) for income taxes 41,093 6,205 ( 3,232 )

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

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

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

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

Net (loss) income per common share:

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

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

Net income (loss) per common share:

Basic net income (loss) per common share from continuing operations $ 0.66 $ 0.25 $ ( 0.51 )

Basic net loss per common share from discontinued operations ( 1.02 ) ( 1.25 ) ( 0.63 )

Basic net (loss) income per common share $ ( 0.77 ) $ ( 1.76 ) $ 0.09

Basic net income (loss) per common share from discontinued operations 0.11 ( 1.02 ) ( 1.25 )

Basic net income (loss) per common share $ 0.77 $ ( 0.77 ) $ ( 1.76 )

Diluted net income (loss) per common share from continuing operations $ 0.65 $ 0.25 $ ( 0.51 )

Diluted net loss per common share from discontinued operations ( 1.02 ) ( 1.25 ) ( 0.63 )

Diluted net (loss) income per common share $ ( 0.77 ) $ ( 1.76 ) $ 0.09

Shares used in the calculation of net (loss) income per common share:

Diluted net income (loss) per common share from discontinued operations 0.11 ( 1.02 ) ( 1.25 )

Diluted net income (loss) per common share $ 0.76 $ ( 0.77 ) $ ( 1.76 )

Shares used in the calculation of net income (loss) per common share:

Basic 100,235 103,618 104,076

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FISCAL YEARS ENDED JUNE 30, 2021, 2020 AND 2019

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amount Tax (expense) benefit After-tax amount

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

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

Other comprehensive income (loss):

Foreign currency translation adjustments before reclassifications $ 85,581 $ — 85,581 $ ( 37,847 ) $ — ( 37,847 ) $ ( 41,180 ) $ — ( 41,180 )

Reclassification of currency translation adjustment included in Net loss from discontinued operations, net of tax 95,120 — 95,120 — — — — — —

Change in deferred (losses) gains on cash flow hedging instruments ( 1,007 ) 211 ( 796 ) 83 ( 15 ) 68 ( 82 ) 15 ( 67 )

Reclassification of currency translation adjustment included in net income (loss) 16,073 — 16,073 95,120 — 95,120 — — —

Change in deferred gains (losses) on cash flow hedging instruments 608 ( 128 ) 480 ( 1,007 ) 211 ( 796 ) 83 ( 15 ) 68

Change in deferred (losses) gains on net investment hedging instruments ( 4,751 ) 998 ( 3,753 ) ( 3,627 ) 762 ( 2,865 ) — — —

Change in unrealized losses on equity investment — — — — — — ( 190 ) ( 1 ) ( 191 )

Total other comprehensive income (loss) $ 97,511 $ 870 $ 98,381 $ 52,639 $ 973 $ 53,612 $ ( 41,097 ) $ ( 15 ) $ ( 41,112 )

Total comprehensive (loss)

Total comprehensive income loss)

$ 175,745 $ ( 26,795 ) $ ( 224,426 )

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Shares at $ 0.01

Capital Earnings Shares Amount Income (Loss) Total

Balance at June 30, 2017 107,989 $ 1,080 $ 1,137,724 $ 868,822 4,287 $ ( 99,315 ) $ ( 195,479 ) $ 1,712,832

Net income 9,694 9,694

Other comprehensive loss 11,239 11,239

Issuance of common stock pursuant to stock-based compensation plans

433 4 ( 4 ) —

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

183 ( 7,192 ) ( 7,192 )

Stock-based compensation

expense 10,476 10,476

Capital Earnings Shares Amount (Loss) Income Total

Balance at June 30, 2018 108,422 $ 1,084 $ 1,148,196 $ 878,516 4,470 $ ( 106,507 ) $ ( 184,240 ) $ 1,737,049

Net income ( 183,314 ) ( 183,314 )

Net loss ( 183,314 ) ( 183,314 )

Cumulative effect of adoption of ASU 2016-01 ( 348 ) 348 —

Cumulative effect of adoption of ASU 2014-09 163 163

Other comprehensive income ( 41,112 ) ( 41,112 )

Other comprehensive loss ( 41,112 ) ( 41,112 )

Issuance of common stock pursuant to stock-based compensation plans

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Amount Paid-in Retained Treasury Stock Comprehensive

Shares at $0.01 Capital Earnings Shares Amount Income (Loss) Total

Shares at $ 0.01

Capital Earnings Shares Amount (Loss) Income Total

Balance at June 30, 2019 108,833 $ 1,088 $ 1,158,257 $ 695,017 4,614 $ ( 110,039 ) $ ( 225,004 ) $ 1,519,319

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Balance at June 30, 2020 109,123 $ 1,092 $ 1,171,875 $ 614,171 7,238 $ ( 172,192 ) $ ( 171,392 ) $ 1,443,554

Net income 77,364 77,364

Cumulative effect of adoption of ASU 2016-13 ( 310 ) ( 310 )

Other comprehensive income 98,381 98,381

Issuance of common stock pursuant to stock-based compensation plans

384 4 ( 4 ) —

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

120 ( 4,282 ) ( 4,282 )

Repurchases of common stock 3,080 ( 107,483 ) ( 107,483 )

Stock-based compensation

expense 15,659 15,659

Balance at June 30, 2021 109,507 $ 1,096 $ 1,187,530 $ 691,225 10,438 $ ( 283,957 ) $ ( 73,011 ) $ 1,522,883

See notes to consolidated financial statements.

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CASH FLOWS FROM OPERATING ACTIVITIES

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 )

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Deferred income taxes 9,884 36,160 ( 23,706 )

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 9,900

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Long-lived asset and intangibles impairment 57,920 27,493 33,719

Gain on sale of assets ( 4,900 ) — —

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

Other non-cash items, net 353 342 1,727

Increase (decrease) in cash attributable to changes in operating assets and liabilities, net of amounts applicable to acquisitions:

(Decrease) increase in cash attributable to changes in operating assets and liabilities, net of amounts applicable to acquisitions/divestitures:

Accounts receivable ( 2,890 ) 33,856 26,658

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CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment ( 60,893 ) ( 75,792 ) ( 69,456 )

Proceeds from sale of businesses and other 15,765 7,145 738

Acquisitions of businesses, net of cash acquired — — ( 12,368 )

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

Proceeds from sale of assets 10,395 — —

Proceeds from sale of businesses, net 58,794 15,765 7,145

Net cash used in investing activities from continuing operations

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Repayments under bank revolving credit facility ( 291,000 ) ( 401,669 ) ( 268,791 )

Borrowings under term loan — — 299,245

Repayments under term loan — ( 206,250 ) ( 90,000 )

Proceeds from discontinued operations — 305,645 56,643

Repayments of other debt, net ( 2,094 ) ( 2,040 ) ( 2,166 )

Proceeds from (funding of) discontinued operations entities 305,645 56,643 ( 26,796 )

Share repurchases ( 106,067 ) ( 60,221 ) —

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Cash (used in) provided by operating activities — ( 5,748 ) 1,936

Cash provided by (used in) investing activities 297,592 36,605 ( 12,187 )

Cash (used in) provided by financing activities ( 299,816 ) ( 57,770 ) 27,300

Cash provided by investing activities — 297,592 36,605

Cash used in financing activities — ( 299,816 ) ( 57,770 )

Effect of exchange rate changes on cash - discontinued operations — ( 537 ) ( 580 )

Net cash (used in) provided by discontinued operations

( 8,509 ) ( 19,809 ) 7,919

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

Net cash used in discontinued operations — ( 8,509 ) ( 19,809 )

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

Cash and cash equivalents at beginning of year 37,771 39,526 113,017

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

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

The Company manufactures, markets, distributes and sells organic and natural products under brand names that are sold as “better-for-you” products, 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 Cuisine ® .

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

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

(1) simplify its portfolio;

(2) strengthen its capabilities;

(3) expand profit margins and cash flow;

and (4) reinvigorate profitable topline growth.

The Company has executed this strategy, with a focus on discontinuing uneconomic investment, realigning resources to coincide with brand importance, reducing unproductive stock-keeping units (“SKUs”) and brands and reassessing current pricing architecture.

As part of this initiative, the Company reviewed its product portfolio within North America and d ivided it into “Get Bigger” and “Get Better” brand categories.

The Company’s “Get Bigger” brands represent its strongest brands with higher margins, which compete in categories with strong growth potential.

The Company has concentrated its investment in marketing, innovation and other resources to prioritize spending for these brands, in an effort to reinvigorate profitable topline growth, optimize assortment and increase share of distribution.

The Company’s “Get Better” brands are the brands in which the Company is primarily focused on simplification and expansion of profit margin.

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 m aintain 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.

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 No te 25, Su bsequent Events, for additional information.

Productivity and Transforma tion 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.

I n 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.

Discontinued Operations

On August 27, 2019, the Company and Ebro Foods S.A.

(the “Purchaser”) entered into, and consummated the transactions contemplated by, an agreement relating to the sale and purchase of the Tilda Group Entities and certain other assets.

On February 15, 2019, the Company completed the sale of substantially all of the assets used primarily for the Plainville Farms business, a component of the Company’s Hain Pure Protein Corporation (“HPPC”) operating segment.

On June 28, 2019, the Company completed the sale of the remainder of HPPC and Empire Kosher which included the FreeBird and Empire Kosher businesses.

These dispositions were undertaken to reduce complexity in the Company’s operations and simplify the Company’s brand portfolio, in addition to allowing additional flexibility to focus on opportunities for growth and innovation in the Company’s more profitable and faster growing core businesses.

Collectively, these dispositions were reported in the aggregate as the Hain Pure Protein reportable segment.

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 Note 5, Di scontinued Operations and Assets Held for Sale, for additional information.

Change in Reportable Segments

Historically, the Company had three reportable segments:

United States, United Kingdom and Rest of World.

Effective July 1, 2019, the Company reassessed its segment reporting structure and as a result, the Canada and Hain Ventures operating segments, which were included within the Rest of World reportable segment, were moved to the United States reportable segment and renamed the North America reportable segment.

Additionally, the Europe operating segment, which was included in the Rest of World reportable segment, was combined with the United Kingdom reportable segment and renamed the International reportable segment.

Accordingly, the Company now operates under two reportable segments:

The Company operates under two reportable segments:

North America and International.

Prior period segment information contained herein has been adjusted to reflect the Company’s new operating and reporting structure.

See Note 22, Segment Information , for additional information.

Basis of Presentation

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Investments in affiliated companies in which the Company exercises significant influence, but which it does not control, are accounted for under the equity method of accounting.

As such, consolidated net (loss) income includes the Company’s equity in the current earnings or losses of such companies.

As such, consolidated net income (loss) includes the Company’s equity in the current earnings or losses of such companies.

Unless otherwise indicated, references in these consolidated financial statements to 2021, 2020 and 2019 or “fiscal” 2021, 2020 and 2019 or other years refer to our fiscal year ended June 30 of that respective year and references to 2022 or “fiscal” 2022 refer to our fiscal year ending June 30, 2022.

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The accounting principles we use require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and amounts of income and expenses during the reporting periods presented.

These estimates include, among others, revenue recognition, trade promotions and sales incentives, valuation of accounts and chargeback receivables, accounting for acquisitions, valuation of long-lived assets, goodwill and intangible assets, stock-based compensation, and valuation allowances for deferred tax assets.

These estimates include, among others, revenue recognition, trade promotions and sales incentives, valuation of accounts and chargeback receivables, valuation of long-lived assets, goodwill and intangible assets, stock-based compensation, and valuation allowances for deferred tax assets.

We believe in the quality and reasonableness of our critical accounting estimates;

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Our customer contracts typically contain standard terms and conditions.

In instances where formal written contracts are not in place we consider the customer purchase orders to be contracts based on the criteria outlined in ASC 606, Revenue from Contracts with Customers .

In instances where formal written contracts are not in place we consider the customer purchase orders to be contracts based on the criteria outlined in Accounting Standard Codification (“ASC 606”), Revenue from Contracts with Customers .

Payment terms and conditions vary by customer and are based on the billing schedule established in our contracts or purchase orders with customers, but we generally provide credit terms to customers ranging from 15-60 days ;

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Shipping and handling costs are accounted for as a fulfillment activity of our promise to transfer products to our customers and are included in cost of sales line item on the Consolidated Statements of Operations.

During the fourth quarter of fiscal 2016, the Company commenced an internal accounting review with respect to the timing of recording revenue associated with concessions provided to distributors in the United States.

The Audit Committee of the Company’s Board of Directors separately conducted an independent review of these matters and retained independent counsel to assist in their review.

In November 2016, the Company announced that the independent review of the Audit Committee was completed and that the review found no evidence of intentional wrongdoing in connection with the preparation of the Company’s financial statements.

In particular, the Company concluded that its historical accounting policy for recording revenue and concessions related to distributors was appropriate.

In December 2018, the Company and the Securities and Exchange Commission (“SEC”) settled the SEC’s charges against the Company with respect to these matters without a monetary penalty on the Company.

Variable Consideration

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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 N ote 22, Segment Information , as all revenues are recognized at a point in time and the Company’s segment revenues depict how the econ omic factors affect the nature, amount, and timing and uncertainty of cash flows.

Valuation of Accounts and Chargebacks Receivable and Concentration of Credit Risk

The Company routinely performs credit evaluations on existing and new customers.

The Company applies reserves for delinquent or uncollectible trade receivables based on a specific identification methodology and also applies an additional reserve based on the experience the Company has with its trade receivables aging categories.

The Company routinely performs credit evaluations on existing and new customers and maintains an allowance for expected uncollectible accounts receivable which is recorded as an offset to trade accounts receivable on the Consolidated Balance Sheets.

Effective July 1, 2020, collectability of accounts receivable is assessed by applying a historical loss-rate methodology in accordance with ASC Topic 326, Financial Instruments - Credit Losses , adjusted as necessary based on the Company's review of accounts receivable on an individual basis, specifically identifying customers with known disputes or collectability issues, and experience with trade receivable aging categories.

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

Changes to the allowance, if any, are classified as bad de bt provisions in the Consolidated Statements of Operations.

Credit losses have been within the Company’s expectations in recent years.

While one of the Company’s customers represented approximately 13 % of trade receivables balances as of both June 30, 2020 and 2019, the Company believes that there is no significant or unusual credit exposure at this time.

While one of the Company’s customers represented approximately 9 % and 13 % of trade receivables balances as of June 30, 2021 and 2020, respectively, the Company believes that there is no significant or unusual credit exposure at this time.

Based on cash collection history and other statistical analysis, the Company estimates the amount of unauthorized deductions customers have taken that we expect will be collected and repaid in the near future and records a chargeback receivable.

Differences between estimated collectible receivables and actual collections are recognized in earnings in the period such differences are determined.

Sales to one customer and its affiliates approximated 12 % , 11 % and 11 % of net sales during the fiscal years ended June 30, 2020, 2019 and 2018, respectively.

Sales to a second customer and its affiliates approximated 9 % , 10 % and 12 % of net sales during the fiscal years ended June 30, 2020, 2019 and 2018, respectively.

Sales to one customer and its affiliates approximated 11 %, 12 % and 11 % of sales during the fiscal years ended June 30, 2021, 2020 and 2019, respectively.

Sales to a second customer and its affiliates approximated 8 %, 9 % and 10 % of sales during the fiscal years ended June 30, 2021, 2020 and 2019, respectively.

In addition, cash and cash equivalents are maintained with several financial institutions.

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The Company’s manufacturing plants and distribution centers, and their related assets, are reviewed when impairment indicators are present by analyzing underlying cash flow projections.

The Company believes no impairment of the carrying value of such assets exists other than as disclosed under Note 8, Property, Plant and Equipment, Net and Note 5, Discontinued Operations and Assets Held for Sale .

The Company believes no impairment of the carrying value of such assets exists other than as disclosed under Note 7, Property, Plant and Equipment, Net, and Note 5, Dispositions .

Ordinary repairs and maintenance costs are expensed as incurred.

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A reporting unit is an operating segment or a component of an operating segment.

Goodwill is tested for impairment by either performing a qualitative evaluation or a two-step quantitative test.

Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test.

The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.

We may elect not to perform the qualitative assessment for some or all reporting units and perform a two-step quantitative impairment test.

We may elect not to perform the qualitative assessment for some or all reporting units and perform a quantitative impairment test.

The impairment test for goodwill requires the Company to compare the fair value of a reporting unit to its carrying value, including goodwill.

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If the carrying value of a reporting unit exceeds its fair value, the Company would then compare the carrying value of the goodwill to its implied fair value in order to determine the amount of the impairment, if any.

Indefinite-lived intangible assets, which are not amortized, consist primarily of acquired trademarks and trade names.

Indefinite-lived intangible assets, which are not amortized, consist primarily of acquired trademarks and tradenames.

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.

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The Company transferred accounts receivables in their entirety to the buyer and satisfied all of the conditions to report the transfer of financial assets in their entirety as a sale.

The principal amount of receivables sold under this arrangement was $ 108,928 during the year ended June 30, 2020, and no amounts were sold in the years ended June 30, 2019 and 2018.

The principal amount of receivables sold under this arrangement was $ 96,788 during the year ended June 30, 2021, $ 108,928 during the year ended June 30, 2020 and no amounts were sold in the year ended June 30, 2019.

The incremental cost of factoring receivables under this arrangement is included in Interest and other financing expense, net in the Company’s Consolidated Statements of Operations.

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Revenue and expense accounts are translated at the monthly average exchange rates.

Adjustments arising from the translation of the foreign currency financial statements of the Company’s international operations are reported as a component of accumulated other comprehensive (loss) income in the Company’s Consolidated Balance Sheets.

Adjustments arising from the translation of the foreign currency financial statements of the Company’s international operations are reported as a component of Accumulated other comprehensive loss in the Company’s Consolidated Balance Sheets.

Gains and losses arising from intercompany foreign currency transactions that are of a long-term nature are reported in the same manner as translation adjustments.

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Proceeds from Insurance Claims

In July of 2019, the Company received $ 7,027 as partial payment from an insurance claim relating to business disruption costs associated with a co-packer, $ 4,460 of which was recognized in fiscal 2019 as it related to reimbursement of costs incurred in that fiscal year.

that fiscal year.

The Company recorded an additional $ 2,567 in the first quarter of fiscal 2020 and received an additional $ 462 of proceeds in the third quarter of fiscal 2020.

In fiscal 2021, the Company received $ 592 of proceeds from an insurance claim.

The Company follows the liability method of accounting for income taxes.

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The Company recognizes liabilities for uncertain tax positions based on a two-step process prescribed by the authoritative guidance.

The first step requires the Company to determine if the weight of available evidence indicates that the tax position has

met the threshold for recognition;

The first step requires the Company to determine if the weight of available evidence indicates that the tax position has met the threshold for recognition;

therefore, the Company must evaluate whether it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes.

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Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.

The effective portion of changes in the fair value of derivative instruments that qualify for cash flow hedge and net investment hedge accounting treatment are recognized in stockholders’ equity as a component of accumulated other comprehensive (loss) income until the hedged item is recognized in earnings.

The effective portion of changes in the fair value of derivative instruments that qualify for cash flow hedge and net investment hedge accounting treatment are recognized in stockholders’ equity as a component of Accumulated other comprehensive loss until the hedged item is recognized in earnings.

Changes in the fair value of fair value hedges, derivatives that do not qualify for hedge accounting treatment, as well as the ineffective portion of any cash flow hedges, are recognized currently in earnings as a component of other (income) expense, net or interest and other financing expense, net in the accompanying financial statements.

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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.

The Company receives an income tax deduction in certain tax jurisdictions for restricted stock grants when they vest and for stock options exercised by employees equal to the excess of the market value of the Company’s common stock on the date of exercise over the option price.

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Once such impairment test is performed, a loss is recognized based on the amount, if any, by which the carrying value exceeds the estimated fair value for assets to be held and used.

See Note 8, Property, Plant and Equipment , Net, and Note 5, Discontinued Operations and Assets Held for Sale, for information on long-lived asset impairment charges.

See Note 7, Property, Plant and Equipment , Net, and Note 5, Dispositions, for information on long-lived asset impairment charges.

Effective July 1, 2019, arrangements containing leases are evaluated as an operating or finance lease at lease inception.

For operating leases, the Company recognizes an operating right-of-use ("ROU") asset and operating lease liability at lease commencement based on the present value of lease payments over the lease term.

For operating leases, the Company recognizes an operating lease right-of-use ("ROU") asset and operating lease liability at lease commencement based on the present value of lease payments over the lease term.

With the exception of certain finance leases, an implicit rate of return is not readily determinable for the Company's leases.

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Finance lease assets are included in property, plant and equipment, net, and corresponding finance lease liabilities are included within current portion of long-term debt and long-term debt, less current portion, on the Company’s Consolidated Balance Sheet.

Net (Loss) Income Per Share

Basic net (loss) income per share is computed by dividing net (loss) income by the weighted-average number of common shares outstanding for the period.

Diluted net (loss) income per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock.

Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.

Diluted net income (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, R evenue from Contracts with Customers (Topic 606) .

This guidance outlines a single, comprehensive model for accounting for revenue from contracts with customers, providing a single five-step model to be applied to all revenue transactions.

The guidance also requires improved disclosures to assist users of the financial statements to better understand the nature, amount, timing and uncertainty of revenue that is recognized.

Subsequent to the issuance of ASU 2014-09, the FASB issued various additional ASUs clarifying and amending this new revenue guidance.

The Company adopted the new revenue standard on July 1, 2018 using the modified retrospective transition method.

The adoption did not materially impact our results of operations or financial position, and, as a result, comparisons of revenues and operating profit between periods were not materially affected by the adoption of ASU 2014-09.

The Company recorded a net increase to beginning retained earnings of $ 163 on July 1, 2018 due to the cumulative impact of adopting ASU 2014-09.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10):

Recognition and Measurement of Financial Assets and Financial Liabilities .

ASU 2016-01 requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income.

The pronouncement also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments.

The Company adopted ASU 2016-01 in the three months ended September 30, 2018, which resulted in a net decrease to beginning retained earnings of $ 348 on July 1, 2018, representing the accumulated unrealized losses (net of tax) reported in accumulated other comprehensive income (loss) for available-for-sale equity securities on June 30, 2018.

The Company no longer classifies equity investments as trading or available-for-sale and no longer recognizes unrealized holding gains and losses on equity securities previously classified as available-for-sale in other comprehensive income (loss) as a result of adoption of ASU 2016-01.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) .

The Company adopted ASU 2016-02 effective July 1, 2019, using a modified retrospective approach.

As permitted by the new guidance, the Company elected the package of practical expedients, which among other things, allowed historical lease classification to be carried forward.

Excluding Tilda, adoption of the new standard resulted in the recording of operating lease ROU assets and lease liabilities as of July 1, 2019 of $ 87,414 and $ 92,982 , respectively, with the difference largely due to prepaid and deferred rent that were reclassified to the ROU asset value.

In addition, the Company recorded a cumulative-effect adjustment to opening retained earnings of $ 439 at adoption for the impairment of an abandoned ROU asset for a manufacturing facility in the United Kingdom that was previously impaired and the remaining lease payments were accounted for under ASC Topic 420, Exit or Disposal Obligations .

The standard did not materially affect the Company’s consolidated net income (loss) or cash flows.

See Note 9 , Leases , for further details.

Recently Issued Accounting Pronouncements Not Yet Effective

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected versus incurred credit losses for most financial assets.

The new guidance is effective for annual periods beginning after December 15, 2019, and for interim periods within those fiscal years.

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

In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected versus incurred credit losses for most financial assets.

The ASU applies to trade and other receivables recorded on the Consolidated Balance Sheets.

The Company adopted the standard on July 1, 2020 using the modified retrospective transition method, recognizing an adjustment to beginning retained earnings of $ 310 reflecting the cumulative impact of adoption.

The adoption did not materially impact the Company's results of operations or financial position, and as a result, comparisons between periods were not materially affected by the adoption of ASU 2016-13.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation.

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This guidance is effective for interim and annual reporting periods beginning after December 15, 2019.

Early adoption is permitted for annual or any interim impairment tests with a measurement date on or after January 1, 2017.

The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements.

The Company adopted ASU 2017-04 on July 1, 2020, and the adoption of this standard did not have an impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement:

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The new guidance is effective for annual periods beginning after December 15, 2019, and for interim periods within those fiscal years.

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

The Company adopted ASU 2018-13 on July 1, 2020, and the adoption of this standard did not have an impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software , Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The amended guidance

is effective for annual periods beginning after December 15, 2019, and for interim periods within those fiscal years.

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

The amended guidance is effective for annual periods beginning after December 15, 2019, and for interim periods within those fiscal years.

The Company adopted ASU 2018-15 on July 1, 2020, and the adoption of this standard did not have an impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Effective

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which simplifies various aspects related to accounting for income taxes and eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences.

Simplifying the Accounting for Income Taxes , which simplifies various aspects related to accounting for income taxes and eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences.

The new guidance is effective for annual periods beginning after December 15, 2021, and for interim periods within those fiscal years.

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

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform.

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

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

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

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

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

This ASU improves consistency by amending the codification to include all disclosure guidance in the appropriate disclosure sections and clarifies application of various provisions in the codification by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology.

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

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

FORMER CHIEF EXECUTIVE OFFICER SUCCESSION PLAN

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Schiller, commenced his employment.

Expense recognized in connection with these payments was $ 33,051 and $ 1,452 during the twelve months ended June 30, 2019 and June 30, 2018, respectively.

Expense recognized in connection with these payments was $ 33,051 during the twelve months ended June 30, 2019.

The cash separation payment was paid on May 6, 2019.

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The aforementioned impacts were recorded in Former Chief Executive Officer Succession Plan expense, net in the Consolidated Statements of Operations.

As further discussed in Note 15, Stock-based Compensation and Incentive Performance Plans , in the three months ended September 30, 2018, the Company’s Compensation Committee determined that no awards would be paid or vested pursuant to the 2016-2018 LTIP.

During the three months ended September 30, 2018, the Company’s Compensation Committee determined that no awards would be paid or vested pursuant to the 2016-2018 LTIP.

Acco rdingly, the Company recorded a benefit of $ 5,065 associated with the reversal of previously accrued amounts under the net sales portion of the 2016-2018 LTIP associated with Mr.

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EARNINGS (LOSS) PER SHARE

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

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

Fiscal Year Ended June 30,

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

Net loss from discontinued operations, net of tax $ ( 106,041 ) $ ( 129,887 ) $ ( 65,050 )

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

Net income (loss) from discontinued operations, net of tax $ 11,255 $ ( 106,041 ) $ ( 129,887 )

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

Basic weighted average shares outstanding

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101,322 103,937 104,076

Basic net (loss) income per common share:

Basic net income (loss) per common share:

Continuing operations $ 0.66 $ 0.25 $ ( 0.51 )

Discontinued operations 0.11 ( 1.02 ) ( 1.25 )

Basic net (loss) income per common share $ ( 0.77 ) $ ( 1.76 ) $ 0.09

Diluted net (loss) income per common share:

Basic net income (loss) per common share $ 0.77 $ ( 0.77 ) $ ( 1.76 )

Diluted net income (loss) per common share:

Continuing operations $ 0.65 $ 0.25 $ ( 0.51 )

Discontinued operations 0.11 ( 1.02 ) ( 1.25 )

Diluted net (loss) income per common share $ ( 0.77 ) $ ( 1.76 ) $ 0.09

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

Diluted net income (loss) per common share $ 0.76 $ ( 0.77 ) $ ( 1.76 )

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

Due to our net loss from continuing operations in the fiscal year ended June 30, 2019, all common stock equivalents such as stock options and unvested restricted stock awards have been excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive.

Diluted earnings per share for the fiscal years ended June 30, 2021 and 2020 includes the dilutive effects of common stock equivalents such as stock options and unvested restricted stock awards.

There were 428 , 769 and 4 restricted stock awards and stock options excluded from our calculation of diluted net (loss) income per share for the fiscal years ended June 30, 2020, 2019 and 2018, respectively, as such awards were anti-dilutive.

There were 137 , 428 and 769 restricted stock awards and stock options excluded from our calculation of diluted net income (loss) per share for the fiscal years ended June 30, 2021, 2020 and 2019, respectively, as such awards were anti-dilutive.

Additionally, there were 721 , 2,645 and 3,625 stock-based awards excluded for the fiscal years ended June 30, 2021, 2020 and 2019, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

GG UniqueFiber ®

On June 28, 2021, the Company completed the divestiture of its crispbread crackers business, GG UniqueFiber ® (“GG”) for total cash consideration of $ 336 .

The sale of GG is consistent with the Company’s ongoing transformation and portfolio simplification process.

GG operated in Norway and was part of the Company’s International reportable segment.

At closing, the assets and liabilities of GG consisted of the following:

Inventories $ 1,056

Property, plant and equipment, net 605

Other intangible assets, net 729

Operating lease right-of-use assets 2,191

Other assets 338

Total assets $ 4,919

Accounts payable and accrued expenses $ 81

Operating lease liabilities 1,475

Total liabilities $ 1,556

The Company deconsolidated the net assets of GG during the twelve months ended June 30, 2021, recognizing a pre-tax loss on sale of $ 3,753 .

Dream ® and WestSoy ®

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

The final purchase price was $ 31,320 .

The non-dairy beverage business was considered to be non-core within our broader North American business, and the sale aligns with the Company’s portfolio simplification process.

The business operated out of the United States and Canada and was part of the Company’s North America reportable segment.

At closing, there were no liabilities.

Assets consisted of the following:

Inventories $ 6,662

Goodwill 8,429

Other intangible assets, net 7,833

Other assets 247

Total assets $ 23,171

The Company deconsolidated the net assets of the North American non-dairy beverage business during the twelve months ended June 30, 2021, recognizing a pre-tax gain on sale of $ 7,519 .

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

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

The sale was completed on January 13, 2021 for total cash consideration of $ 38,547 .

Fruit operated in the United Kingdom a nd was included in the Company's International reportable segment, comprising 3.8 % and 8.0 % of the Company's net sales during the twelve months ended June 30, 2021 and 2020, respectively.

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

At the closing date, the assets and liabilities of the Fruit business consisted of the following:

Cash and cash equivalents $ 13,559

Accounts receivable, less allowance for doubtful accounts 14,057

Inventories 5,028

Prepaid expenses and other current assets 2,728

Property, plant and equipment, net 25,039

Goodwill 14,362

Other intangible assets, net 36,171

Operating lease right-of-use assets 5,623

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

Total assets $ 58,123

Accounts payable $ 14,428

Accrued expenses and other current liabilities 4,229

Operating lease liabilities 5,039

Deferred tax liabilities 7,298

Other liabilities 1,942

Total liabilities $ 32,936

The Company deconsolidated the net assets of the Fruit business during the twelve months ended June 30, 2021, recognizing a pre-tax loss on sale of $ 1,904 .

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

As of June 30, 2020, the Company determined the held for sale criteria was met, resulting in assets held for sale of $ 8,334 and related liabilities held for sale of $ 3,567 being included in the Company's Consolidated Balance Sheet as of June 30, 2020.

These assets and liabilities were previously presented within Prepaid and other current assets and Accrued expenses and other liabilities, respectively, in the Annual Report on Form 10-K for the fiscal year ended June 30, 2020 and have been reclassified to conform to current year presentation.

The Company deconsolidated the net assets of the Danival business upon the closing of the sale during the twelve months ended June 30, 2021, recognizing a pre-tax gain on sale of $ 611 .

Additionally, the Company recognized a pre-tax gain of $ 131 relating to a previous disposition during the twelve months ended June 30, 2021.

Discontinued Operations

Sale of Tilda Business

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

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

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

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

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Cost of sales — 26,648 151,146

Gros s (loss) pro fit

Gros s pro fit

— 3,751 46,716

Selling, general and administrative expense — 5,185 26,949

Amortization of acquired intangibles and other expense 1,172 2,189 3,536

Other expense 75 1,172 2,189

Interest expense (1)

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Net (loss) income from discontinued operations before income taxes ( 75 ) ( 90,772 ) 4,017

Provision for income taxes (3)

(Benefit) provision for income taxes (3)

( 11,320 ) 12,909 535

Net (loss) income from discontinued operations, net of tax $ ( 103,681 ) $ 3,482 $ 7,684

Net income (loss) from discontinued operations, net of tax $ 11,245 $ ( 103,681 ) $ 3,482

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

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

(3) Includes a tax provision related to the tax gain on the sale of Tilda of $ 13,960 for the twelve months ended June 30, 2020.

Assets and liabilities of discontinued operations associated with Tilda presented in the Consolidated Balance Sheet as of June 30, 2019 are included in the following table.

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

ASSETS June 30, 2019

Cash and cash equivalents $ 8,509

Accounts receivable, less allowance for doubtful accounts 26,955

Inventories 65,546

Prepaid expenses and other current assets 9,038

Total current assets of discontinued operations (1)

Property, plant and equipment, net 40,516

Goodwill 133,098

Trademarks and other intangible assets, net 84,925

Other assets 628

Total noncurrent assets of discontinued operations (1)

Total assets of discontinued operations $ 369,215

Accounts payable $ 18,341

Accrued expenses and other current liabilities 4,675

Current portion of long-term debt 8,687

Total current liabilities of discontinued operations (1)

Deferred tax liabilities 17,153

Other noncurrent liabilities 208

Total noncurrent liabilities of discontinued operations (1)

Total liabilities of discontinued operations (1)

(1) Assets and liabilities from discontinued operations were classified as current and noncurrent at June 30, 2019 as they did not meet the held-for-sale criteria.

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

(3) Includes $ 11,320 of tax benefit related to the legal entity reorganization for the twelve months ended June 30, 2021, as well as a tax provision related to the tax gain on the sale of Tilda of $ 13,960 for the twelve months ended June 30, 2020.

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

Sale of Hain Pure Protein Reportable Segment

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

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

The Company recorded reserves of $ 109,252 and $ 78,464 in fiscal years ended June 30, 2019 and 2018, respectively, to adjust the carrying value of Hain Pure Protein and Empire Kosher to its fair value, less its cost to sell, which is reflected in net (loss) income from discontinued operations, net of taxes in each respective period.

The reserves were recorded due to negative market conditions in the sector, resulting in the Company lowering the projected long-term growth rate and profitability levels of HPPC and to adjust the carrying value of Hain Pure Protein to its estimated selling price.

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

The Company recorded a reserve of $ 109,252 in fiscal year 2019, to adjust the carrying value of Hain Pure Protein and Empire Kosher to its fair value, less its cost to sell, which is reflected in net (loss) income from discontinued operations, net of taxes.

The reserve was recorded due to negative market conditions in the sector, resulting in the Company lowering the projected long-term growth rate and profitability levels of HPPC and to adjust the carrying value of Hain Pure Protein to its estimated selling price.

Sale of Plainville Farms Business (“Plainville”)

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In addition, the purchaser assumed the current liabilities of Plainville as of the closing date.

As a condition to consummating the sale, the Company entered into a Contingent Funding and Earnout Agreement, which provides for the issuance by the Company of an irrevocable stand-by letter of credit (the “Letter of Credit”) of $ 10,000 which expires nineteen months after issuance.

The Company is

entitled to receive an earnout not to exceed, in the aggregate, 120 % of the maximum amount that the purchaser draws on the Letter of Credit at any point from the date of issuance through the expiration of the Letter of Credit.

The Company is entitled to receive an earnout not to exceed, in the aggregate, 120 % of the maximum amount that the purchaser draws on the Letter of Credit at any point from the date of issuance through the expiration of the Letter of Credit.

Earnout payments are based on a specified percentage of annual free cash flow achieved for all fiscal years ending on or prior to June 30, 2026.

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

At June 30, 2021, the Company had not recorded an asset associated with the earnout.

As a result of the disposition, the Company recognized a pre-tax loss on sale of $ 40,223 , or $ 29,685 net of tax, in the twelve months ended June 30, 2019 to write down the assets and liabilities to the final sales price less costs to sell, inclusive of the Letter of Credit.

As a result of the dispositio n, the Company recognized a pre-tax loss on sale of $ 40,223 , or $ 29,685 net of tax, in the twelve months ended June 30, 2019 to write down the assets and liabilities to the final sales price less costs to sell, inclusive of the Letter of Credit.

Sale of HPPC and Empire Kosher

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Cost of sales — — 409,433

Gros s (loss) pro fit

— — ( 1,324 )

3 unchanged sentences

Loss on sale of discontinued operations — 3,043 40,859

Net (loss) income from discontinued operations before income taxes ( 3,043 ) ( 176,907 ) ( 78,454 )

Net loss from discontinued operations before income taxes — ( 3,043 ) ( 176,907 )

Benefit for income taxes — ( 684 ) ( 43,538 )

Net (loss) income from discontinued operations, net of tax $ ( 2,359 ) $ ( 133,369 ) $ ( 72,734 )

Net loss from discontinued operations, net of tax $ — $ ( 2,359 ) $ ( 133,369 )

There were no assets or liabilities from discontinued operations associated with Hain Pure Protein as of June 30, 2021 or 2020.

Assets Held for Sale

The Company entered into a definitive stock purchase agreement on June 30, 2020 for the sale of its Danival business, and the transaction was completed on July 21, 2020.

During fiscal 2020, the Company recorded a pre-tax noncash loss of $ 13,052 to reduce the carrying value of the Danival business to its estimated fair value, less costs to sell.

This included the noncash impairment charge of the relative fair value of goodwill allocated to the Danival business, a part of the International segment, of $ 394 included in Goodwill impairment in the Company’s Consolidated Statement of Operations.

Also included in the pre-tax noncash loss were noncash impairment charges for intangibles consisting of trade name and customer lists, fixed assets and inventory totaling $ 12,658 included in Long-lived assets and intangibles impairment in the Company’s Consolidated Statement of Operations.

The estimated fair value, less costs to sell, reflects the amount of consideration the Company expected to receive upon closing of the transaction as of June 30, 2020.

As of June 30, 2020, the Company determined the held for sale criteria was met and classified the assets and liabilities to held for sale.

Current assets held for sale of $ 8,333 are included in the Consolidated Balance Sheet as a component of Prepaid expenses and other current assets and current liabilities held for sale of $ 3,567 are included in the Consolidated Balance Sheet as a component of Accrued expenses and other current liabilities.

The Company deconsolidated the net assets of the Danival business upon closing of sale, which occurred during the first quarter of fiscal 2021.

There were no acquisitions completed in the fiscal years ended June 30, 2020 and 2019.

On December 1, 2017, the Company acquired Clarks UK Limited (“Clarks”), a leading maple syrup and natural sweetener brand in the United Kingdom.

Clarks produces natural sweeteners under the Clarks TM brand, including maple syrup, honey and carob, date and agave syrups, which are sold in leading retailers and used by food service and industrial customers in the United Kingdom.

Consideration for the transaction, inclusive of a subsequent working capital adjustment, consisted of cash, net of cash acquired, totaling £ 9,179 (approximately $ 12,368 at the transaction date exchange rate).

Additionally, contingent consideration of up to a maximum of £ 1,500 was payable based on the achievement of specified operating results over an 18-month period following completion of the acquisition;

no contingent consideration amounts were paid, and the arrangement expired during fiscal 2019.

Clarks is included in our United Kingdom operating segment.

Net sales and income before income taxes attributable to the Clarks acquisition included in our consolidated results for the fiscal year ended June 30, 2018 represented less than 1 % of our consolidated results.

The costs related to all acquisitions have been expensed as incurred and are included in Productivity and transformation costs in the Consolidated Statements of Operations.

Acquisition-related costs of $ 409 were expensed in the fiscal years ended June 30, 2018.

Acquisition-related costs for the fiscal year ended June 30, 2020 and 2019 were de minimis.

The expenses incurred primarily related to professional fees and other transaction-related costs associated with these acquisitions.

Inventories consisted of the following:

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$ 285,410 $ 248,170

In the twelve months ended June 30, 2020 and June 30, 2019, the Company recorded inventory write-downs of $ 4,175 and $ 12,381 , respectively, primarily related to the discontinuance of slow moving SKUs as part of product rationalization initiatives.

In the twelve months ended June 30, 2021 and June 30, 2020, the Company recorded inventory (reversal) write-downs of $( 421 ) and $ 4,175 , respectively, primarily related to the discontinuance of slow moving SKUs as part of product rationalization initiatives.

PROPERTY, PLANT AND EQUIPMENT, NET

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Depreciation expense for the fiscal years ended June 30, 2021, 2020 and 2019 was $ 34,291 , $ 31,409 and $ 28,922 , respectively.

During fiscal year 2021, the Company recorded $ 1,333 of non-cash impairment charge related to the write-down of building improvements.

Additionally, during fiscal year 2021, the Company completed the sale of its manufacturing facility in Moonachie, NJ in the United States which resulted in a gain in the amount of $ 4,900 .

In connection with the sale, property, plant and equipment, net in the amount of $ 5,502 was written off.

In addition to the aforementioned, a non-cash impairment charge of $ 244 was recorded related to a facility in the United Kingdom which was held for sale as of June 30, 2021;

the remaining property, plant and equipment, net of $ 1,874 have been classified as held for sale on the Consolidated Balance Sheets as of June 30, 2021.

During fiscal 2020, the Company recorded $ 12,313 of non-cash impairment charges primarily related to a write-down of building improvements, machinery and equipment in the United States and Europe used to manufacture certain slow moving or low margin SKUs, held for sale accounting of Danival and consolidation of certain office space and manufacturing facilities.

In fiscal 2019, the Company determined that it was more likely than not that certain fixed assets of two 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 consolidate manufacturing of certain fruit-based and soup products in the United Kingdom.

During fiscal 2019, the Company determined that it was more likely than not that certain fixed assets of two 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 consolidate manufacturing of certain fruit-based and soup products in the United Kingdom.

As such, the Company recorded a $ 6,166 non-cash impairment charge related to the closures of these facilities.

Additionally, the Company recorded non-cash impairment charges of $ 9,653 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.

In 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 consolidate manufacturing of certain soup products in the United Kingdom.

As such, the Company recorded a $ 6,344 non-cash impairment charge primarily related to the closures of these facilities.

Additionally, the Company recorded a $ 2,057 non-cash impairment charge to write down the value of certain machinery and equipment used to manufacture certain slow moving SKUs in the United States that were discontinued.

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

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

The components of lease expenses for the fiscal year ended June 30, 2020 were as follows:

Fiscal Year Ended

June 30, 2020

The components of lease expenses for the fiscal years ended June 30, 2021 and 2020 were as follows:

Fiscal Year Ended Fiscal Year Ended

June 30, 2021 June 30, 2020

Operating lease expenses (a)

$ 16,403 $ 18,981

Finance lease expenses (a)

2 unchanged sentences

Total lease expenses $ 20,604 $ 24,471

(a) Operating lease expenses and finance lease expenses include $ 1,505 and $ 251 of ROU asset impairment charges, respectively, associated with the Company’s ongoing productivity and transformation costs initiatives.

(a) For the fiscal year ended June 30, 2020, operating lease expenses and finance lease expenses included $ 1,505 and $ 251 , respectively, of ROU asset impairment charges associated with the Company’s ongoing productivity and transformation initiatives.

Of this amount, $ 929 was recognized as a component of Long-lived asset and intangibles impairment on the Consolidated Statement of Operations with the remainder recognized as a component of Cost of Sales.

Supplemental balance sheet information related to leases was as follows:

Leases Classification June 30, 2020

Supplemental balance sheet information related to leases is as follows:

Leases Classification June 30, 2021 June 30, 2020

Operating lease ROU assets Operating lease right-of-use assets $ 92,010 $ 88,165

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Additional information related to leases is as follows:

Fiscal Year Ended

June 30, 2020

Fiscal Year Ended Fiscal Year Ended

June 30, 2021 June 30, 2020

Supplemental cash flow information

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Weighted average remaining lease term:

Operating leases 10.0 years

Finance leases 2.5 years

Operating leases 9.8 years 10.0 years

Finance leases 4.0 years 2.5 years

Weighted average discount rate:

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Total lease liabilities $ 96,799 $ 555 $ 97,354

The aggregate minimum future lease payments for operating leases at June 30, 2019, adjusted for discontinued operations, were as follows:

Maturities of lease liabilities as of June 30, 2020 were as follows:

Fiscal Year Operating leases Finance leases Total

2021 $ 14,781 $ 308 $ 15,089

2022 13,798 205 14,003

2023 12,833 95 12,928

2024 10,941 18 10,959

2025 9,521 6 9,527

Thereafter 51,545 — 51,545

At June 30, 2020, the Company has additional operating leases that had not yet commenced.

Obligations under these leases are approximately $ 9,797 and the leases are expected to commence during the fiscal year ending June 30, 2021 with lease terms ranging from 10 to 11 years, excluding renewal options.

Total lease payments 113,419 632 114,051

Imputed interest 18,119 8 18,127

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

GOODWILL AND OTHER INTANGIBLE ASSETS

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Balance as of June 30, 2019 $ 612,590 $ 263,291 $ 875,881

$ 612,457 $ 273,206 $ 885,663

Divestiture ( 5,009 ) — ( 5,009 )

Impairment charge — ( 394 ) ( 394 )

Translation and other adjustments, net ( 1,526 ) ( 6,994 ) ( 8,520 )

Balance as of June 30, 2020 606,055 255,903 861,958

612,590 263,291 875,881

Divestiture ( 8,429 ) ( 14,362 ) ( 22,791 )

Impairment charge — ( 394 ) ( 394 )

Translation and other adjustments, net 3,186 28,714 31,900

Balance as of June 30, 2021 $ 600,812 $ 270,255 $ 871,067

(1) The total carrying value of goodwill is reflected net of $ 134,277 of accumulated impairment charges, of which $ 97,358 related to the Company’s United Kingdom operating segment, $ 29,219 related to the Company’s Europe operating segment and $ 7,700 related to the Company’s former Hain Ventures operating segment.

During fiscal 2019, the Company’s reporting units were Hain Pure Personal Care, Grocery and Snacks and Celestial Tea in the United States reportable segment, Hain Daniels, Ella’s Kitchen and Tilda in the United Kingdom reportable segment and Hain Canada, Hain Europe and Hain Ventures within the Rest of World reportable segment.

As discussed in Note 22 , Segment Information , effective July 1, 2019, the Company changed its segment reporting structure due to changes in how the Company’s Chief Operating Decision Maker (“CODM”) assesses the Company’s performance and allocates resources as a result of a change in the Company’s strategy.

In connection with these changes, the Company’s reporting units now consist of the United States (as a single reporting unit) and Hain Canada within the North America reportable segment and Hain Daniels, Ella’s Kitchen, Tilda (prior to its sale on August 27, 2019) and Hain Europe within the International reportable segment.

The brands constituting the Hain Ventures reporting unit were combined within the United States and Hain Canada reporting units, and its goodwill was reallocated to the United States and Canada operating segments on a relative fair value basis.

The Company completed an assessment for potential impairment of the goodwill both prior and subsequent to the aforementioned changes and determined that no impairment indicators were present.

The Company completed its annual goodwill impairment analysis in the fourth quarter of fiscal 2021, in conjunction with its budgeting and forecasting process for fiscal year 2022, and concluded that no impairment existed at any of its reporting units.

During January 2021, the Company completed the divestiture of its Fruit business, a component of the Hain Daniels reporting unit.

Goodwill of $ 14,362 was assigned to the divested business on a relative fair value basis.

During April 2021, the Company completed the divestiture of its Dream business, a component of the United States and Canada reporting units.

Goodwill of $ 8,429 was assigned to the divested business on a relative fair value basis.

On October 7, 2019, the Company completed the divestiture of its Arrowhead and SunSpire businesses, components of the United States reporting unit, for a purchase price of $ 13,347 following post-closing adjustments, recognizing a loss on sale of $ 2,037 during the fiscal year ended June 30, 2020.

Goodwill of $ 4,357 was assigned to the divested businesses on a relative fair value basis.

An interim impairment analysis was performed for the United States reporting unit both before and after the sale, noting no impairment indicators were present.

During March 2020, the Company completed the divestiture of its Europe's Best and Casbah businesses, components of the Canada reporting unit.

Goodwill of $ 440 was assigned to the divested businesses on a relative fair value basis.

An interim impairment analysis was performed for the Canada reporting unit both before and after the sale, noting no impairment indicators were present.

The gain/loss on sale recognized during the fiscal year ended June 30, 2020 as a result of the transactions was insignificant.

During May 2020, the Company completed the divestiture of its Rudi’s business, a component of the United States reporting unit.

Goodwill of $ 212 was assigned to the divested businesses on a relative fair value basis.

An interim impairment analysis was performed for the United States reporting unit both before and after the sale, noting no impairment indicators were present.

The gain/loss on sale recognized during the fiscal year ended June 30, 2020 as a result of the transaction was insignificant.

During June 2020, in anticipation of the Company’s divestiture of its Danival business, a component of the Europe reporting unit, the good will of $ 394 assigned to the business on a relative fair value basis was impaired based on the expected selling price.

See Note 5, Discontinued Operations and Assets Held for Sale , for a discussion of the sale completed after the fiscal 2020 period.

Beginning in the three months ended September 30, 2019, operations of Tilda have been classified as discontinued operations as discussed in Note 5, Discontinued Operations and Assets Held for Sale .

During June 2020, in anticipation of the Company’s divestiture of its Danival business, a component of the Europe reporting unit, the goodwill of $ 394 assigned to the business on a relative fair value basis was impaired based on the expected selling price.

Interim impairment analyses were performed on the applicable reporting units both before and after the sale of the respective businesses, noting no impairment indicators were present.

Beginning in the three months ended September 30, 2019, operations of Tilda were classified as discontinued operations as discussed in Note 5, Dispositions .

Therefore, goodwill associated with Tilda is presented within Noncurrent assets of discontinued operations in the Consolidated Balance Sheet as of June 30, 2020.

The Company completed its annual goodwill impairment analysis in the fourth quarter of fiscal 2020, in conjunction with its budgeting and forecasting process for fiscal year 2021, and concluded that no impairment existed at any of its reporting units.

Other Intangible Assets

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Non-amortized intangible assets:

Trademarks and trade names (1)

Trademarks and tradenames (1)

$ 273,471 $ 278,103

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Net carrying amount $ 314,895 $ 346,462

(1) The gross carrying value of trademarks and trade names is reflected net of $ 93,273 and $ 83,734 of accumulated impairment charges as of June 30, 2020 and 2019, respectively.

(1) The gross carrying value of trademarks and trade names is reflected net of $ 93,273 of accumulated impairment charges as of both June 30, 2021 and June 30, 2020.

The Company completed its annual assessment of impairment for indefinite-lived intangible assets i n the fourth quarter of fiscal 2021.

The assessment indicated that the fair value of the Company’s trade names exceeded their carrying values and no impairment existed except as described below.

During the second and third quarters of fiscal 2020, in association with the sale or discontinuation of certain businesses and brands, the Company determined that certain of its indefinite-lived trade names were impaired due to the carrying value of the trade names exceeding their fair values, and therefore an impairment charge of $ 9,539 was recognized ($ 4,007 in the North America segment and $ 5,532 in the International segment).

In the second quarter of fiscal 2019, the Company determined that an indicator of impairment existed in certain of the Company’s indefinite-lived tradenames.

The result of this interim assessment indicated that the fair value of certain of the Company’s tradenames was below their carrying value, and therefore an impairment charge of $ 17,900 was recognized ($ 15,113 in the North America segment and $ 2,787 in the International segment) during the fiscal year ended June 30, 2019.

For the fiscal year ended June 30, 2018, a trade name impairment charge of $ 5,632 ($ 5,100 in the North America segment and $ 532 in the International segment) was recorded.

The assessment indicated that the fair value of the Company’s indefinite-lived intangible assets exceeded their carrying values and no impairment existed.

During fiscal 2020, in association with the sale or discontinuation of certain businesses and brands, the Company determined that certain of its indefinite-lived tradenames were impaired due to the carrying value of the tradenames exceeding their fair values, and therefore an impairment charge of $ 13,994 was recognized ($ 8,462 in the North America reportable segment and $ 5,532 in the International reportable segment).

In the fourth quarter of fiscal 2021, the Company completed the divestiture of its Dream and GG businesses.

Other intangible assets totaling $ 7,833 and $ 729 , consisting primarily of trademarks, were assigned to the divested businesses, respectively.

Amortizable intangible assets, which are deemed to have a finite life, primarily consist of customer relationships and are being amortized over their estimated useful lives of 5 to 25 years.

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Estimated amortization expense $ 8,004 $ 7,468 $ 5,155 $ 3,868 $ 3,405

The weighted average remaining amortization period of amortized intangible assets is 9.1 years .

In the fourth quarter of fiscal 2020, the Company recognized impairment charges relating to customer relationships of certain brand divestitures totaling $ 4,455 , all within the North America segment.

The average remaining amortization period of amortized intangible assets is 6.8 years .

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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Selling and marketing related accruals 9,988 10,930

Short-term operating lease liabilities

10,870 12,338

Other accruals 10,673 14,929

$ 117,957 $ 124,045

(1) Included within other accruals in fiscal 2020 are $ 12,338 of short-term operating lease liabilities (see Note 9, Leases), $ 3,567 of current liabilities held for sale (see Note 5, Discontinued Operations and Assets Held for Sale) and $ 263 of short-term derivative liabilities (see Note 18, Derivatives and Hedging Instruments).

DEBT AND BORROWINGS

2 unchanged sentences

Revolving credit facility $ 230,000 $ 280,000

Term loan — 206,250

Unamortized issuance costs — ( 1,022 )

Other borrowings (1)

2 unchanged sentences

Long-term debt, less current portion $ 230,492 $ 281,118

(1) Included in other borrowings are $ 308 of short term finance lease obligations as discussed in Note 9, Leases.

(1) Included in other borrowings are $ 555 of finance lease obligations as discussed in Note 8, Leases.

(2) Included in short-term borrowings are $ 229 of short term finance lease obligations as discussed in Note 8, Leases.

Credit Agreement

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

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

Agreement) and interest coverage ratio (as defined in the Credit Agreement) were adjusted.

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

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

The Company’s allowable consolidated leverage ratio was no more than 3.75 to 1.0 on September 30, 2020 and thereafter.

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

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

As of June 30, 2020, $ 710,302 was available under the Amended Credit Agreement, and the Company was in compliance with all associated covenants, as amended by the Amended Credit Agreement.

A s of June 30, 2021, $ 763,606 was available under the Amended Credit Agreement, and the Company was in compliance with all associated covenants, as amended by the Amended Credit Agreement.

The Amended Credit Agreement provides that loans will bear interest at rates based on (a) the Eurocurrency Rate, as defined in the Credit Agreement, plus a rate ranging from 0.88 % to 2.50 % per annum;

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Due in Fiscal Year Amount

Thereafter 76

Interest paid during the fiscal years ended June 30, 2021, 2020 and 2019 amounted to $ 5,903 , $ 15,514 and $ 20,396 , respectively.

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Total $ 41,093 $ 6,205 $ ( 3,232 )

For the fiscal year ended June 30, 2020, the Company paid cash for income taxes, net of refunds, of $ 16,162 .

For the fiscal year ended June 30, 2021, the Company received net tax refunds of $ 32,998 including a $ 53,817 tax loss carryback claim under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") which allowed for, among other provisions, a five-year carryback of net operating losses (“NOLs”) for 2018-2020 offset by taxes paid in other jurisdictions.

Cash paid for income taxes, net of (refunds), during the fiscal years ended June 30, 2020 and 2019 amounted to $ 16,162 and $ 22,535 , respectively.

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Foreign income at different rates 4,756 4.4 % 382 1.1 % 763 ( 1.4 ) %

Impairment of goodwill and intangibles — — % — — % 1,816 2.5 %

Change in valuation allowance 4,499 13.3 % 8,938 ( 16.0 ) % 119 0.2 %

Impairment of intangible assets 13,466 12.4 % — — % — — %

Change in valuation allowance (a) ( 5,921 ) ( 5.4 ) % 4,499 13.3 % 8,938 ( 16.0 ) %

Change in reserves for uncertain tax positions 1,971 1.8 % 7,925 23.4 % 841 ( 1.5 ) %

Tax Act’s transition tax (a) — — % 6,834 ( 12.2 ) % 7,054 9.7 %

Tax Act’s impact of deferred taxes (b) — — % — — % ( 25,006 ) ( 34.5 ) %

Change in foreign tax rate (b)

1,840 1.7 % — — % — — %

Loss on disposal of subsidiary

1,073 1.0 % — — % — — %

Tax Act’s transition tax (c) — — % — 6,834 ( 12.2 ) %

tax (benefit) on foreign earnings ( 50 ) ( 0.1 ) % 7,449 22.0 % 3,872 ( 6.9 ) %

CARES Act ( 25,668 ) ( 75.9 ) % — — % — — %

CARES Act (d) ( 1,116 ) ( 1.0 ) % ( 25,668 ) ( 75.9 ) % — — %

Other 1,077 1.0 % 5,182 15.3 % ( 3,797 ) 6.9 %

Provision (benefit) for income taxes $ 41,093 37.8 % $ 6,205 18.3 % $ ( 3,232 ) 5.8 %

(a) For the year ended June 30, 2018, the Company accrued a provisional estimate of $ 7,054 of tax expense for the Tax Cuts and Jobs Act’s (the “Tax Act”) one-time transition tax on the foreign subsidiaries’ accumulated, unremitted earnings in

accordance with U.S.

Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB No.118”).

Additionally, during fiscal year 2019, the Company recorded $ 6,834 of tax expense upon finalizing its analysis of the impact from the Tax Act.

(b) For the year ended June 30, 2018, the Company accrued $ 25,006 in provisional tax benefit related to the net change in deferred tax liabilities stemming from the Tax Act’s reduction of the U.S.

federal tax rate from 35% to 21% and disallowance of certain incentive based compensation tax deductibility under Internal Revenue Code 162(m).

There was an immaterial tax benefit recorded for fiscal 2019 related to return to provision adjustments.

(a) The Company estimates that it will utilize certain of its state tax loss carryovers in the year ended June 30, 2021.

This positive evidence, in addition to other positive evidence, resulted in the Company releasing the valuation allowance on its state deferred assets of $ 9,774 .

Further, there was a release of a valuation allowance of $ 1,600 related to Danival;

an increase in the valuation allowance of $ 5,051 related to the UK rate change;

and a valuation allowance increase of $ 402 related to capital leases.

(b) On July 22, 2020, the U.K.

enacted into law a tax rate increase from 17% to 19%.

On June 10, 2021, the U.K.

enacted an increase in the corporate income tax rate to 25% effective April 1, 2023.

The rate change impact is primarily for the re-measurement of deferred tax liabilities on indefinite lived intangible assets.

(c) On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") included a provision to tax previously untaxed foreign earnings (“transition tax”).

During fiscal year 2019, the Company recorded $ 6,834 of tax expense upon finalizing its analysis of the impact from the Tax Act.

(d) The Company carried back NOLs generated in the June 30, 2019 tax year for five years, resulting in an income tax benefit of $ 18,949 .

The $ 18,949 income tax benefit represents the federal rate differential between 35% and 21%.

In addition, there was an indirect tax benefit of $ 6,719 related to discontinued operations due to the CARES Act.

Accordingly, the gross benefit recorded under the CARES Act in fiscal 2020 was $ 25,668 prior to the reserve under ASC 740-10.

In fiscal 2021, the Company received the full refund with interest, with the net adjustment resulting in a benefit of $ 1,116 .

With the effective date of January 1, 2018, the Tax Act also introduced a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries and a measure to tax certain intercompany payments under the base erosion anti-abuse tax “BEAT” regime.

For the fiscal years ended June 30, 2020 and 2019, the Company did not generate intercompany transactions that met the BEAT threshold but did generate GILTI tax.

The Company elected to account for GILTI tax as a current period cost and recorded an expense of $ 3,850 during the fiscal year ended June 30, 2020.

The GILTI of $ 3,850 is included in U.S.

tax (benefit) on foreign earnings in the effective tax rate which also includes tax expense related to Subpart F Income and unremitted earnings in the total.

For the fiscal years ended June 30, 2021 and 2020, the Compa ny did not generate intercompany transactions that met the BEAT threshold but does have to include GILTI tax relating to the Company’s foreign subsidiaries.

The Company elected to account for GILTI tax as a current period cost but did not record an expense during the fiscal year ended June 30, 2021 as tested losses exceeded tested income.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes.

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$ ( 42,485 ) $ ( 51,787 )

(1) Includes $ 62 and $ 29,482 of non-current deferred tax assets included within Other Assets on the June 30, 2020 and 2019 Consolidated Balance Sheets.

(1) Includes $ 154 and $ 62 of non-current deferred tax assets included within Other Assets on the June 30, 2021 and 2020 Consolidated Balance Sheets, respectively.

At June 30, 2021 and 2020, the Company had U.S.

federal net operating loss (“NOL”) carryforwards of approximately $ 19,141 and $ 201,242 , respectively, certain of which will not expire until 2036.

federal NOL carryforwards of approximately $ 59,514 and $ 19,141 , respectively, certain of which will not expire unt il 2036 .

Certain of these federal loss carryforwards are subject to Internal Revenue Code Section 382 which imposes limitations on utilization following certain changes in ownership of the entity generating the loss carryforward.

The Company had foreign NOL carryforwards of approximately $ 15,441 and $ 12,587 at June 30, 2021 and 2020, respectively, the majority of which are indefinite lived.

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 impacts 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 NOLs 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 an income tax benefit of $ 18,949 .

The $ 18,949 income tax benefit represents the Federal rate differential between 35% and 21%.

In addition, there was an indirect tax benefit of $ 6,719 related to discontinued operations due to the CARES Act.

Accordingly, the gross benefit recorded under the CARES Act in fiscal 2020 is $ 25,668 prior to the reserve under ASC 740-10.

The benefit of $ 18,949 and reversal of the deferred tax asset on federal NOLs of $ 33,551 resulted in a tax refund receivable of $ 52,500 which is included as a component of Prepaid expenses and other current assets on the Consolidated Balance Sheets.

The Company historically considered the undistributed earnings of its foreign subsidiaries to be indefinitely reinvested and as a result has not provided for taxes on such earnings.

To achieve its cash management objectives, during the fourth quarter of fiscal 2020, the Company reversed its reinvestment assertion on $ 93,359 of foreign earnings and recorded a deferred tax liability of $ 1,212 .

For the year ended June 30, 2021, the Company represents that $ 116,895 of foreign earnings are not permanently reinvested with a corresponding deferred tax liability of $ 1,172 .

The Company continues to reinvest $ 732,065 of undistributed earnings of its foreign subsidiaries and may be subject to additional foreign withholding taxes and U.S.

state income taxes if it reverses its indefinite reinvestment assertion on these foreign earnings in the future.

All other outside basis differences not related to earnings were impractical to account for at this period of time and are currently considered as being permanent in duration.

All other outside basis differences not related to earnings were impractical to account for a t this period of time and are currently considered as being permanent in duration.

As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date.

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In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance.

The Company has recorded valuation allowances in the amounts of $ 41,941 and $ 34,912 at June 30, 2020 and 2019, respectively.

T he Company has recorded valuation allowances in the amounts of $ 37,453 and $ 41,941 at June 30, 2021 and 2020, respectively .

During fiscal 2019, the Company recorded a partial valuation allowance against 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.

The partial state valuation allowance was retained for fiscal 2020.

As mentioned above, positive evidence has allowed the Company to utilize some state deferred tax assets as well release a portion of the previously established valuation allowance.

The changes in valuation allowances against deferred income tax assets were as follows:

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Balance at end of year $ 22,870 $ 20,899 $ 11,869

As of June 30, 2021, the Company had $ 22,870 of unrecognized tax benefits, of which $ 19,058 represents an amount that, if recognized, would impact the effective tax rate in future periods.

As of June 30, 2020, the Company had $ 20,899 of unrecognized tax benefits, of which $ 17,087 represents the amount that, if recognized, would impact the effective tax rate in future periods.

As of June 30, 2019 and 2018, the C ompany had $ 11,869 and $ 6,730 , respectively, of unrecognized tax benefits of which $ 8,057 and $ 2,917 , respectively, would impact the effective income tax rate in future periods.

Accrued liabilities for interest and penalties were $ 2,166 and $ 275 at June 30, 2020 and 2019, respectively.

As of June 30, 2019 , the C ompany had $ 11,869 of unrecognized tax benefits of which $ 8,057 would impact the effective income tax rate in future periods.

Accrued liabilities for interest and penalties w ere $ 2,549 a nd $ 2,166 at June 30, 2021 and 2020, respectively.

Interest and penalties (expense and/or benefit) are recorded as a component of the provision (benefit) for income taxes in the consolidated financial statements.

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However, to the extent we generated NOLs or tax credits in closed tax years, future use of the NOL or tax credit carryforward balance would be subject to examination within the relevant statute of limitations for the year in which utilized.

The Company is no longer subject to tax examinations in the United Kingdom for years prior to fiscal 2017.

The Company is no longer subject to tax examinations in the United Kingdom for years prior to fisca l 2019 .

Given the uncertainty regarding when tax authorities will complete their examinations and the possible outcomes of their examinations, a current estimate of the range of reasonably possible significant increases or decreases of income tax that may occur within the next twelve months cannot be made.

Although there are various

tax audits currently ongoing, the Company does not believe the ultimate outcome of such audits will have a material impact on the Company’s consolidated financial statements.

Although there are various tax audits

currently ongoing, the Company does not believe the ultimate outcome of such audits will have a material impact on the Company’s consolidated financial statements.

STOCKHOLDERS’ EQUITY

3 unchanged sentences

At June 30, 2021 and 2020, no preferred stock was issued or outstanding.

Accumulated Other Comprehensive Income (Loss)

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

Accumulated Other Comprehensive Loss

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

Fiscal Year Ended June 30,

Foreign currency translation adjustments:

Other comprehensive loss before reclassifications (1)

Other comprehensive income (loss) before reclassifications (1)

$ 85,581 $ ( 37,847 )

Amounts reclassified into income (2)

Deferred gains (losses) on cash flow hedging instruments:

Other comprehensive (loss) income before reclassifications ( 1,413 ) 94

Amounts reclassified into income (3)

Deferred gains (losses) on net investment hedging instruments:

Other comprehensive loss before reclassifications ( 2,788 ) —

Amounts reclassified into income (4)

Cumulative effect of adoption of ASU 2016-01 — 348

Other comprehensive income (loss) $ 53,612 $ ( 40,764 )

(1) Foreign currency translation adjustments included intra-entity foreign currency transactions that were of a long-term investment nature and were a loss of $ 898 and a gain of $ 619 for the fiscal years ended June 30, 2020 and 2019, respectively.

16,073 95,120

Deferred (losses) gains on cash flow hedging instruments:

Amount of loss recognized in AOCL on derivatives ( 810 ) ( 1,413 )

Amount of loss reclassified from AOCL into expense (3)

Deferred losses on net investment hedging instruments:

Amount of loss recognized in AOCL on derivatives ( 3,359 ) ( 2,788 )

Amount of gain reclassified from AOCL into income (4)

( 394 ) ( 77 )

Net change in AOCL $ 98,381 $ 53,612

(1) Foreign currency translation adjustments included intra-entity foreign currency transactions that were of a long-term investment nature and were $ 0 and a loss of $ 898 for the fiscal years ended June 30, 2021 and 2020, respectively.

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

At the completion of the sales of Danival, Fruit and GG UniqueFiber ® , the Company reclassified $ 16,073 of translations from AOCL to the Company's results of operations.

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

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Other expense (income), net $ ( 1,556 ) $ ( 959 )

(4) Amounts reclassified into income for deferred gains (losses) on net investment hedging instruments are recognized in “Interest and other financing expense, net” in the Consolidation Statements of Operations and were $ 98 and $ 0 for the fiscal years ended June 30, 2020 and 2019, respectively

(4) Amounts reclassified into income for deferred losses on net investment hedging instruments are recognized in “Interest and other financing expense, net” in the Consolidation Statements of Operations and were $ 498 and $ 98 for the fiscal years ended June 30, 2021 and 2020, respectively

Share Repurchase Program

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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.

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

During the fiscal year ended June 30, 2021, the Company repurchased 3,080 shares under the repurchase program for a total of $ 107,421 , excluding commissions, at an average price of $ 34.87 per share.

Of that amount, $ 1,415 is included in Accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheet at June 30, 2021 pending settlement of trade.

As of June 30, 2021, the Company had $ 82,408 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 2,551 shares under the repurchase program for a total of $ 60,171 , excluding commissions, at an average price of $ 23.59 per share.

The Company did no t repurchase any shares under this program in fiscal 2019.

In August 2021, the Company announced that its Board of Directors approved an additional $ 300,000 share repurchase authorization.

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

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

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The 2002 Plan and 2019 Inducement Program are collectively referred to as the “Stock Award Plans”.

In conjunction with the Stock Award Plans, the Company maintains a long-term incentive program (the “LTI Program”) that provide for performance and market equity awards that can be earned over defined performance periods.

In conjunction with the Stock Award Plans, the Company maintains a long-term incentive program (the “LTI Program”) that provides for performance and market equity awards that can be earned over defined performance periods.

There were 237 , 990 and 2,106 shares underlying restricted stock awards (“RSAs”) or restricted share units (“RSUs”) granted under the Stock Award Plans during fiscal years 2021, 2020 and 2019, respectively, of which 51 , 554 and 1,610 , respectively, were granted under the LTI Program and are subject to the achievement of minimum performance goals or market conditions, with the remaining being service-based awards.

For performance awards and market awards, the foregoing share figures are stated at target levels, and the awards generally provide for vesting at 150 % or 300 % of the target level.

For performance awards and market awards, the foregoing share figures are stated at target levels, and the awards generally provide for vesting at zero to 300 % of the target level.

There were no options granted under the Stock Award Plans during fiscal years 2021, 2020 and 2019.

At June 30, 2021, there were 5,330 and 1,886 shares available for grant under the 2002 Plan and 2019 Inducement Program, respectively.

Apart from the Stock Award Plans, the Company granted an award of performance share units to the Company’s CEO in fiscal year 2019.

The award has a target payout of 350 shares of common stock and a maximum payout of 1,050 shares of common stock.

See “Restricted Stock – CEO Inducement Grant” below.

The CEO Inducement Grant (discussed below) was granted outside of the Stock Award Plans.

Restricted Stock

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Non-vested - end of period 1,780 $ 16.55 2,049 $ 15.85 2,729 $ 12.94

At June 30, 2020 and 2019, the table above includes a total of 918 and 1,964 shares, respectively, that represent the target number of shares that may be earned under non-vested performance equity awards that are eligible to vest at 300 % of target

depending on the achievement of pre-defined performance criteria.

Additionally, at June 30, 2020 and 2019, the table above includes a total of 29 and 42 shares, respectively, that represent the target number of shares that may be earned under non-vested performance equity awards that are eligible to vest at 150 % of target depending on the achievement of pre-defined performance criteria.

At June 30, 2021 and 2020, the table above includes a total of 1,382 and 1,384 shares (including the inducement grant of 350 shares made to the Company’s CEO), respectively, that represent the target number of shares that may be earned under non-vested performance equity awards that are eligible to vest at 300 % of target.

Vested shares during the year ended June 30, 2021 include a total of 20 shares under the 2018-2020 LTIP that vested at 150 % of target based on achievement of the maximum relative TSR target.

A summary of the fair value of restricted stock (includes all RSAs, RSUs and PSUs) granted and vested, and the tax benefit recognized from restricted stock vesting, for the last three fiscal years ended June 30 is as follows:

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Tax benefit recognized from restricted stock vesting $ 1,597 $ 939 $ 3,241

At June 30, 2020, $ 18,713 of unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested restricted stock awards was expected to be recognized over a weighted-average period of approximately 2.1 years.

At June 30, 2021, $ 10,026 of unrecognized stock-based compensation expense related to non-vested restricted stock was expected to be recognized over a weighted average period of approximately 1.1 years.

Long-Term Incentive Program

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Any stock-based awards issued under the LTI Program are generally issued pursuant to and are subject to the terms and conditions of the 2002 Plan and 2019 Inducement Program, as applicable.

The CEO Inducement Grant (discussed below) was granted outside of the Stock Award Plans.

The LTI Program consists of certain performance-based long-term incentive plans that provide for PSUs that can be earned over defined performance periods.

• 2019-2021 LTIP - Vesting is pursuant to the achievement of pre-established three-year compound annual TSR targets over the period from November 6, 2018 to November 6, 2021.

The TSR levels are aligned with the CEO Inducement Grant (discussed below), with total shares eligible to vest ranging from zero to 300 % of the target award amount.

The TSR levels are aligned with the CEO Inducement Gr ant (discussed below), with total shares eligible to vest ranging from zero to 300 % of the target award amount.

Certain shares are subject to a holding period of one year after the vesting date, resulting in an illiquidity discount being applied to the grant date fair value for such shares.

There were 554 and 912 PSUs granted during fiscal years 2020 and 2019, respectively, relating to the 2019-2021 LTIP plan.

Grant date fair values ranged from $ 5.95 to $ 25.86 per unit for PSUs granted during fiscal 2020.

Grant date fair values ranged from $ 5.26 to $ 10.65 per unit for PSUs granted during fiscal year 2019.

No such awards were granted during fiscal 2018.

• 2018-2020 LTIP - Vesting is pursuant to a defined calculation of relative TSR over the period from January 24, 2019 to June 30, 2020, with total shares eligible to vest ranging from zero to 150 % of the grant.

There were 51 , 554 and 912 PSUs granted during fiscal years 2021, 2020 and 2019, respectively, relating to the 2019-2021 LTIP.

Grant date fair values are calculated using a Monte-Carlo simulation model.

The weighted average grant date fair values per target share and related valuation assumptions were as follows:

Fiscal Year ended June 30,

2021 2020 2019

Grant date fair value (per target share) $ 32.13 $ 10.92 $ 6.91

Risk-free interest rate 0.13 % 1.54 % 2.40 %

Expected dividend yield — — —

Expected volatility 40.37 % 36.28 % 34.29 %

Expected term 1.17 years 1.85 years 2.67 years

• 2018-2020 LTIP - V esting is pursuant to a defined calculation of relative TSR over the period from January 24, 2019 to June 30, 2020, with total shares eligible to vest ranging from zero to 150 % of the grant.

There were 45 PSUs granted during fiscal year 2019 with a grant date fair value of $ 18.32 per unit.

No such awards were granted during fiscal 2020 or 2018.

In the first quarter of fiscal 2021, the Compensation Committee determined that all outstanding awards under the 2018-2020 LTIP vested at 150% as a result of the maximum relative TSR target having been met.

• 2016-2018 and 2017-2019 LTIP - Vesting was dependent upon achievement of specified net sales growth targets, and a defined calculation of relative TSR over the period from July 1, 2015 to June 30, 2018 and from July 1, 2017 to June 30, 2019, for the 2016-2018 LTIP and 2017-2019 LTIP, respectively.

In the first quarter of fiscal 2019, the Compensation Committee determined that no awards would be paid or vested pursuant to the 2016-2018 LTIP or 2017-2019 LTIP as a result of the failure to meet the performance conditions.

Accordingly, the awards were forfeited, and in the first quarter of fiscal 2019, the Company recorded a benefit of $ 6,482 associated with the reversal of previously accrued amounts under the net sales portion of the 2016-2018 LTIP, of which $ 5,065 was recorded in Former Chief Executive Officer Succession Plan expense, net on the Consolidated Statements of Operations.

Additionally, the Company recorded benefits of $ 1,129 and $ 1,867 associated with the reversal of previously accrued amounts under the portions of the 2017-2019 LTIP that were dependent on the achievement of pre-determined performance measures of net sales and relative TSR.

In the first quarter of fiscal 2021, the Compensation Committee determined that all outstanding awards under the 2018-2020 LTIP vested at 150 % as a result of the maximum rel ative TSR target having been met.

CEO Inducement Grant

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As such, an illiquidity discount was applied to the grant date fair value.

The total grant date fair value of the award was estimated to be $ 7,571 , or $ 21.63 per target share.

The grant date fair value per target share and related valuation assumptions used in the Monte Carlo simulation to value this award were as follows:

Grant date fair value (per target share) $ 21.63

Risk-free interest rate 2.99 %

Expected dividend yield —

Expected volatility 35.17 %

Expected term 3.00 years

The total grant date fair value of the award was $ 7,571 .

Total compensation cost related to this award recognized in the fiscal year ended June 30, 2021, 2020, 2019 and was $ 2,519 , $ 2,526 and $ 1,636 , respectively.

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Schiller in November 2018 under the 2002 Plan.

In the twelve months ended June 30, 2019, the Company issued 173 PSUs to certain key executives vesting over a period of one to two years based upon the achievement of certain market and/or performance based metrics being met.

From time to time, the Company issues PSUs to certain key executives which vest over a period of one to two years based upon the achievement of certain market and/or performance-based metrics being met.

As of June 30, 2021 and 2020, there were 22 and 23 of such PSUs outstanding.

Summary of Stock-Based Compensation

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Related income tax benefit $ 1,296 $ 1,518 $ 1,189

In the fiscal year ended June 30, 2018, the Company recorded a net benefit of $ 2,203 primarily in connection with the modification of Irwin D.

Simon’s TSR performance based awards granted on September 26, 2017.

Refer to Note 3, Former Chief Executive Officer Succession Plan, for further discussion.

Stock Options

The Company did not grant any stock options in fiscal years 2020, 2019 or 2018, and there were no stock options exercised during these periods.

There were no stock options outstanding under the Stock Award Plans at June 30, 2020.

There were 122 options outstanding at June 30, 2020, 2019 and 2018, relating to a grant under a prior Celestial Seasonings plan.

The Company did not grant any stock options in fis cal years 2021, 2020 or 2019, and there were no stock options exercised during these periods.

There were 122 options outstanding at each of June 30, 2021, 2020 and 2019, relating to a grant under a prior Celestial Seasonings plan.

Although no further awards can be granted under the prior Celestial Seasonings plan, the options outstanding continue in accordance with the terms of the plan and grant.

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At June 30, 2021, there was no unrecognized compensation expense related to stock option awards.

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

Chop’t develops and operates fast-casual, fresh salad restaurants in the Northeast and Mid-Atlantic United States.

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

At June 30, 2020 and 2019, the carrying value of the Company’s investment in Chop’t was $ 12,793 and $ 14,632 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

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

Founders Table owns and operates the fast-casual restaurant chains Chopt Creative Salad Co.

and Dos Toros Taqueria.

The investment is being accounted for as an equity method investment due to the Company’s representation on the Board of Directors of Founders Table.

At June 30, 2021 and 2020, the carrying value of the Company’s investment in Founders Table was $ 10,699 and $ 12,793 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

The Company also holds the following investments:

(a) Hutchison Hain Organic Holdings Limited (“HHO”) with Hutchison China Meditech Ltd., a joint venture accounted for under the equity method of accounting, (b) Hain Future Natural Products Private Ltd.

(“HFN”) with Future Consumer Ltd, a joint venture accounted for under the equity method of accounting and (c) Yeo Hiap Seng Limited (“YHS”), a 1 % equity ownership interest accounted for under the equity method of accounting.

(“HFN”) with Future Consumer Ltd, a joint venture accounted for under the fair value method of accounting and (c) Yeo Hiap Seng Limited (“YHS”), a less than 1 % equity ownership interest carried at fair value in which the Company recognizes in net income any changes in fair value.

The carrying value of these combined investments was $ 6,218 and $ 4,646 as of June 30, 2021 and 2020, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

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(Level 2) Significant

Cash equivalents $ 7 $ 7 $ — $ —

Derivative financial instruments $ 699 $ — $ 699 $ —

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

The Company estimates the original fair value of the contingent consideration as the present value of the expected contingent payments, determined using the weighted probabilities of the possible payments.

The Company reassesses the fair value of contingent payments on a periodic basis.

Although the Company believes its estimates and assumptions are reasonable, different assumptions, including those regarding the operating results of the respective businesses, or changes in the future may result in different estimated amounts.

In connection with the acquisition of Clarks during fiscal 2018, payment of a portion of the purchase price was contingent upon the achievement of certain operating results.

Contingent consideration of up to a maximum of £ 1,500 was payable based on the achievement of specified operating results over an 18-month period following completion of the acquisition;

no contingent consideration amounts were paid, and the arrangement expired during fiscal 2019.

The following table summarizes the Level 3 activity:

Fiscal Year Ended June 30,

Balance at beginning of year $ — $ 1,909

Fair value of initial contingent consideration — —

Contingent consideration adjustment (1)

Translation adjustment — ( 39 )

Balance at end of year $ — $ —

(1) The change in the fair value of contingent consideration is included in Productivity and transformation costs in the Company’s Consolidated Statements of Operations.

In the fiscal year ended June 30, 2019, the Company recorded a net benefit $ 1,870 , with no corresponding amount in fiscal 2020.

The net benefit in the fiscal year ended June 30, 2019 was due to a decrease in the fair value of contingent consideration related to Clarks.

The decrease in the period was due to lower probability of achievement of specified operating results.

There were no transfers of financial instruments between the three levels of fair value hierarchy during the fiscal years ended June 30, 2021 or 2020.

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

During fiscal 2020, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

During fiscal 2021 and 2020, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

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

Amounts reported in Accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt.

During fiscal 2021, the Company estimates that an additional $ 272 will be reclassified as an increase to interest expense.

During fiscal 2022, the Company estimates that an additional $ 183 will be reclassified as a decrease to interest expense.

As of June 30, 2021, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

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The Company designates these derivatives as cash flow hedges of foreign exchange risks.

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

During fiscal 2021, the Company estimates that an additional $ 181 relating to cross-currency swaps will be reclassified as an increase to interest income.

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

During fiscal 2022, the Company estimates that an additional $ 80 relating to cross-currency swaps will be reclassifie d as an increase to interest expense.

As of June 30, 2021, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risks:

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Cross-currency swap 1 € 24,700 $ 26,775

Foreign currency forward contract 1 £ 850 € 1,000

Net Investment Hedges

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Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency fixed-rate payments over the life of the agreement.

For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in Accumulated other comprehensive loss as part of the cumulative translation adjustment.

Amounts are reclassified out of Accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated.

For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in AOCL as part of the cumulative translation adjustment.

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

As of June 30, 2021, the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations:

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

As of June 30, 2020, the Company had outstanding derivatives that were not designated as hedges in qualifying hedging relationships consisting of foreign currency forward contracts with a notional amount of $ 32,386 .

As of June 30, 2021, the Compan y had no outstanding d erivatives that were not designated as hedges in qualifying hedging relationships.

Designated Hedges

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of June 30, 2021:

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Cross-currency swaps Prepaid expenses and other current assets 656 Other noncurrent liabilities 11,656

Foreign currency forward contracts Prepaid expenses and other current assets 75 Other noncurrent liabilities —

Total derivatives designated as hedging instruments $ 699 $ 11,968

Derivatives not designated as hedging instruments:

Foreign currency forward contracts Prepaid expenses and other current assets 193 Accrued expenses and other current liabilities 74

Total derivative instruments $ 1,014 $ 6,405

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

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Derivatives designated as hedging instruments:

Interest rate swaps Prepaid expenses and other current assets $ — Accrued expenses and other current liabilities / Other noncurrent liabilities $ 856

Cross-currency swaps Prepaid expenses and other current assets 746 Other noncurrent liabilities 5,475

Foreign currency forward contracts Prepaid expenses and other current assets 75 Other noncurrent liabilities —

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Total derivative instruments $ 1,014 $ 6,405

The following table presents the pre-tax effect of cash flow hedge accounting on Accumulated other comprehensive loss as of June 30, 2020, 2019 and 2018:

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

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL as of June 30, 2021, 2020 and 2019:

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

Fiscal Year Ended June 30, Fiscal Year Ended June 30,

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The following table presents the pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations as of June 30, 2021 and 2020:

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

Fiscal Year Ended June 30, 2020 Fiscal Year Ended June 30, 2019

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

Fiscal Year Ended June 30, 2021

Fiscal Year Ended June 30, 2020

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

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Interest rate swaps

Amount of gain (loss) reclassified from accumulated OCL into income $ — $ 40 $ — $ — $ — $ —

Amount of gain (loss) reclassified from AOCL into income $ — $ ( 308 ) $ — $ — $ 40 $ —

Cross-currency swaps

Amount of gain (loss) reclassified from accumulated OCL into income $ — $ 32 $ ( 959 ) $ — $ — $ —

Amount of gain (loss) reclassified from AOCL into income $ — $ 158 $ ( 1,556 ) $ — $ 32 $ ( 959 )

Foreign currency forward contracts

Amount of gain (loss) reclassified from accumulated OCL into income $ 103 $ — $ — $ 30 $ — $ —

Amount of gain (loss) reclassified from AOCL into income $ ( 67 ) $ — $ — $ 103 $ — $ —

The following table presents the pre-tax effect of the Company’s net investment hedges on Accumulated other comprehensive loss and the Consolidated Statements of Operations as of June 30, 2021, 2020 and 2019:

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

Derivatives in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives

Fiscal Year Ended June 30, Fiscal Year Ended June 30,

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TERMINATION BENEFITS RELATED TO PRODUCTIVITY AND TRANSFORMATION INITIATIVES

As a part of the ongoing productivity and transformation initiatives as a part of the Company’s strategic objective to expand profit margins and cash flow, the Company initiated a reduction in workforce at targeted locations in the United States as well as at certain locations internationally.

As a part of the ongoing productivity and transformation initiatives and to expand profit margins and cash flow, the Company initiated a reduction in workforce at targeted locations in the United States as well as at certain locations internationally.

The reduction in workforce associated with these initiatives may result in additional charges throughout fiscal 2022.

The following table displays the termination benefits and personnel realignment activities and liability balances relating to the reduction in workforce for the year ended as of June 30, 2021:

Balance at June 30, 2019 Charges (reversals) Amounts Paid Foreign Currency Translation & Other Adjustments Balance at June 30, 2020

Balance at June 30, 2020

Charges, net Amounts Paid Foreign Currency Translation & Other Adjustments Balance at June 30, 2021

Termination benefits and personnel realignment $ 11,541 $ 5,887 $ ( 13,394 ) $ 414 $ 4,448

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

Additional non-cash impairment charges related to the Company’s productivity and transformation costs initiative have been incurred and are discussed within Note 8, Property, Plant and Equipment, Net , and Note 9, Leases .

Additional non-cash impairment charges related to the Company’s productivity and transformation initiatives have been incurred and are discussed within Note 7, Property, Plant and Equipment, Net , and Note 8, Leases .

COMMITMENTS AND CONTINGENCIES

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Co-Lead Plaintiffs filed their appellate brief on August 18, 2020.

Defendants will submit a scheduling request within 14 days after the filing of Co-Lead Plaintiffs’ appellate brief to schedule the filing of their opposition brief.

Stockholder Derivative Complaints Filed in State Court

On September 16, 2016, a stockholder derivative complaint, Paperny v.

Heyer, et al.

(the “Paperny Complaint”), was filed in New York State Supreme Court in Nassau County against the former Board of Directors and certain former officers of the Company alleging breach of fiduciary duty, unjust enrichment, lack of oversight and corporate waste.

On December 2, 2016 and December 29, 2016, two additional stockholder derivative complaints were filed in New York State Supreme Court in Nassau County against the former Board of Directors and certain former officers under the captions Scarola v.

Simon (the “Scarola Complaint”) and Shakir v.

Simon (the “Shakir Complaint” and, together with the Paperny Complaint and the Scarola Complaint, the “Derivative Complaints”), respectively.

Both the Scarola Complaint and the Shakir Complaint alleged breach of fiduciary duty, lack of oversight and unjust enrichment.

On February 16, 2017, the parties for the Derivative Complaints entered into a stipulation consolidating the matters under the caption In re The Hain Celestial Group (the “Consolidated Derivative Action”) in New York State Supreme Court in Nassau County, ordering the Shakir Complaint as the operative complaint.

On November 2, 2017, the parties agreed to stay the Consolidated Derivative Action.

Co-Lead Plaintiffs requested leave to file an amended consolidated complaint, and on January 14, 2019, the Court partially lifted the stay, ordering Co-Lead Plaintiffs to file their amended complaint by March 7, 2019.

Co-Lead Plaintiffs filed a Verified Amended Shareholder Derivative Complaint on March 7, 2019.

The Court continued the stay pending a decision on Defendants’ motion to dismiss in the Consolidated Securities Action (referenced above).

After the Court in the Consolidated Securities Action dismissed the Amended Complaint, the Court in the Consolidated Derivative Action ordered Co-Lead Plaintiffs to file a second amended complaint no later than July 8, 2019.

Co-Lead Plaintiffs filed a Verified Second Amended Shareholder Derivative Complaint on July 8, 2019 (the “Second Amended Derivative Complaint”).

Defendants moved to dismiss the Second Amended Derivative Complaint on August 7, 2019.

Co-Lead Plaintiffs filed an opposition to Defendants’ motion to dismiss, and Defendants submitted a reply on September 20, 2019.

On May 18, 2020, the Court granted Defendants’ motion to dismiss the Second Amended Derivative Complaint.

Plaintiffs did not file notice of appeal, and their time to do so has run.

Accordingly, the Company considers this matter complete.

Defendants filed their opposition brief on November 17, 2020, and Plaintiffs filed their reply brief on December 8, 2020.

Accordingly, Co-Lead Plaintiffs’ appeal is fully briefed.

Oral argument is scheduled for September 27, 2021.

Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court

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On July 24, 2020, Plaintiffs made a stockholder litigation demand on the current Board containing overlapping factual allegations to those set forth in the Consolidated Stockholder Class and Derivative Action.

The Board of Directors will evaluate the demand and determine what, if any, actions to take in response.

On August 10, 2020, the Court vacated the briefing schedule on Defendants’ pending motion to dismiss in order to give the Board of Directors time to consider the demand.

The parties must provide the Court with an update on or before September 7, 2020.

On each of September 8 and October 8, 2020, the Court extended its stay of any applicable deadlines for 30 days to give the Board of Directors additional time to complete its evaluation of the demand.

On November 3, 2020, Plaintiffs were informed that the Board of Directors had finished investigating and resolved, among other things, that the demand should be rejected.

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

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

The current stay ordered by the Court is set to expire on October 29, 2021.

Baby Food Litigation

Since February 2021, a large number of consumer class actions have been brought against the Company alleging that the Company’s Earth’s Best baby food products (the “Products”) contain unsafe and undisclosed levels of various naturally-occurring heavy metals, namely lead, arsenic, cadmium and mercury.

There are currently 29 active lawsuits, which generally allege that the Company violated various state consumer protection laws and make other state and common law warranty and unjust enrichment claims related to the alleged failure to disclose the presence of these metals and that consumers would have allegedly either not purchased the Products or would have paid less for them had the Company made adequate disclosures.

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

One of the consumer class actions ( Lauren Smith, et.

Plum PBC, et.

al .) filed in the U.S.

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

These actions have been filed against all of the major baby food manufacturers in federal courts across the country.

Judicial Panel on Multidistrict Litigation (“JPML”) declined a request to centralize all of the consumer class action lawsuits against all of the baby food manufacturers into a single multidistrict proceeding, and the vast majority of cases against the Company have now been transferred and consolidated in the U.S.

District Court for the Eastern District of New York, In re Hain Celestial Heavy Metals Baby Food Litigation , Case No.

One consumer class action is pending in the U.S.

District Court for Northern District of California, and another is pending in the New York Supreme Court, Nassau County.

The Company has moved to stay or transfer these two cases to the consolidated proceeding in the Eastern District of New York and those motions are pending.

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

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

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

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

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

In addition to the consumer class actions discussed above, the Company is currently named in four lawsuits in state and federal courts alleging some form of personal injury from the ingestion of the Company’s Products, purportedly due to unsafe and undisclosed levels of various naturally occurring heavy metals.

Two of these lawsuits name multiple plaintiffs alleging claims of physical injuries.

These lawsuits generally allege injuries related to neurological development disorders such as autism and attention deficit hyperactivity disorder.

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

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

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On an annual basis, we may, in our sole discretion, make certain matching contributions.

For the fiscal years ended June 30, 2020 and 2018, we made contributions to the Plan of $ 2,464 and $ 1,371 , respectively, including with respect to employees of Hain Pure Protein in 2018.

For the fiscal years ended June 30, 2021 and 2020, we made contributions to the Plan of $ 3,025 and $ 2,464 , respectively .

There were no contributions made in fiscal 2019 .

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SEGMENT INFORMATION

Prior to July 1, 2019, the Company’s operations were managed in seven operating segments:

the United States, United Kingdom, Tilda, Ella’s Kitchen UK, Europe, Canada and Hain Ventures.

For segment reporting purposes, based on economic similarity as outlined within ASC 280, Segment Reporting , the Company elected to combine the United Kingdom, Tilda and Ella’s Kitchen UK operating segments into one reportable segment known as United Kingdom.

Additionally, the Canada, Europe and Hain Ventures operating segments were combined as the Rest of World reportable segment.

Separately, the United States operating segment comprised its own reportable segment.

Effective July 1, 2019, the Company reassessed its segment reporting structure due to changes in how the Company’s CODM assesses the Company’s performance and allocates resources as a result of a change in the Company’s strategy, which includes creating synergies among the Company’s United States and Canada businesses, as well as among the Company’s international businesses in the United Kingdom and Europe.

As a result, the Canada and Hain Ventures operating segments, which were included within the Rest of World reportable segment, were moved to the United States reportable segment and renamed the North America reportable segment.

Accordingly, the Company now operates under two reportable segments:

Our organization structure consist of two geographic based reportable segments:

North America and International.

Prior period segment information has been adjusted to reflect the Company’s new operating and reporting structure.

Additionally, the Tilda operating segment was classified as discontinued operations as discussed in Note 5, Discontinued Operations and Assets Held for Sale .

Our North America reportable segment consists of the United States and Canada as operating segments.

Our International reportable segment is comprised of three operating segments:

United Kingdom, Ella’s Kitchen UK and Europe.

This structure is in line with how our Chief Operating Decision Maker (“CODM”) assesses our performance and allocates resources.

We use segment net sales and operating income to evaluate performance and to allocate resources.

We believe these measures are most relevant in order to analyze segment results and trends.

Segment operating income excludes certain general corporate expenses (which are a component of selling, general and administrative expenses), impairment and acquisition related expenses, restructuring, integration and other charges.

The Tilda operating segment was classified as discontinued operations as discussed in Note 5, Dispositions .

Segment information presented herein excludes the results of Tilda for all periods presented.

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$ 107,380 $ 56,042 $ ( 32,493 )

(1) One of our customers accounted for approximately 12 %, 11 %, and 11 % of our consolidated net sales for the fiscal years ended June 30, 2020, 2019 and 2018, respectively, which were primarily related to the United States and United Kingdom operating segments.

A second customer accounted for approximately, 9 %, 10 % and 12 % of our consolidated net sales for the fiscal years ended June 30, 2020, 2019 and 2018, respectively, which were primarily related to the United States operating segment.

(2) For the fiscal year ended June 30, 2020, Corporate and Other included expenses of $ 32,664 related to Productivity and transformation costs and trade name impairment charges of $ 9,539 ($ 4,007 related to North America and $ 5,532 related to International), partially offset by a benefit of $ 2,962 of proceeds from insurance claim.

(1) One of our customers accounted for approximately 11 %, 12 %, and 11 % of our consolidated sales for the fiscal years ended June 30, 2021, 2020 and 2019, respectively, which were primarily related to the United States, Canada and United Kingdom operating segments.

A second customer accounted for approximately, 8 %, 9 % and 10 % of our consolidated sales for the fiscal years ended June 30, 2021, 2020 and 2019, respectively, which were primarily related to the United States operating segment.

(2) For the fiscal year ended June 30, 2021, Corporate and Other primarily included $ 10,576 related to Productivity and transformation costs and $ 49,353 of selling general and administrative costs.

For the fiscal year ended June 30, 2020, Corporate and Other included $ 32,664 related to Productivity and transformation costs and tradename impairment charges of $ 13,994 ($ 8,462 related to North America and $ 5,532 related to International), partially offset by a benefit of $ 2,962 of proceeds from insurance claim.

For the fiscal year ended June 30, 2019, Corporate and Other included $ 30,156 of Former Chief Executive Officer Succession Plan expense, net, $ 28,443 of Productivity and transformation costs and $ 4,334 of accounting review and remediation costs.

Corporate and Other for the fiscal year ended June 30, 2019 also included trade name impairment charges of $ 17,900 ($ 15,113 related to North America and $ 2,787 related to International) and a $ 4,460 benefit for proceeds received in connection with an insurance recovery.

For the fiscal year ended June 30, 2018, Corporate and Other included $ 10,118 of Productivity and transformation costs and $ 9,293 of Accounting review and remediation costs, net of insurance proceeds.

Corporate and Other for the fiscal year ended June 30, 2018 also included trade name impairment charges of $ 5,632 ($ 5,100 related to North America and $ 532 related to International).

Corporate and Other for the fiscal year ended June 30, 2019 also included tradename impairment charges of $ 17,900 ($ 15,113 related to North America and $ 2,787 related to International) and a $ 4,460 benefit for proceeds received in connection with an insurance recovery.

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

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Total $ 404,787 $ 377,421

QUARTERLY FINANCIAL DATA (UNAUDITED)

A summary of the Company’s consolidated quarterly results of operations is as follows.

The sum of the net income per share from continuing operations for each of the four quarters may not equal the net income per share for the full year, as presented, due to rounding.

Three Months Ended

2020 March 31, 2020 December 31, 2019 September 30, 2019

Net sales $ 511,746 $ 553,297 $ 506,784 $ 482,076

Gross profit $ 129,937 $ 132,395 $ 105,607 $ 97,831

Operating income $ 25,261 $ 19,135 $ 9,191 $ 2,455

Income (loss) before income taxes and equity in earnings of equity-method investees $ 20,427 $ 15,358 $ 3,210 $ ( 5,167 )

Net income (loss) from continuing operations $ 3,699 $ 25,036 $ 1,852 $ ( 4,953 )

Net loss from discontinued operations, net of tax $ ( 460 ) $ ( 697 ) $ ( 2,816 ) $ ( 102,068 )

Net income (loss) $ 3,239 $ 24,339 $ ( 964 ) $ ( 107,021 )

Net income (loss) per common share:

Basic net income (loss) per common share from continuing operations $ 0.04 $ 0.24 $ 0.02 $ ( 0.05 )

Basic net loss per common share from discontinued operations $ — $ ( 0.01 ) $ ( 0.03 ) $ ( 0.98 )

Basic net income (loss) per common share $ 0.04 $ 0.23 $ ( 0.01 ) $ ( 1.03 )

Diluted net income (loss) per common share from continuing operations $ 0.04 $ 0.24 $ 0.02 $ ( 0.05 )

Diluted net loss per common share from discontinued operations $ — $ ( 0.01 ) $ ( 0.03 ) $ ( 0.98 )

Diluted net income (loss) per common share $ 0.04 $ 0.23 $ ( 0.01 ) $ ( 1.03 )

Net income from continuing operations in the quarter ended June 30, 2020 was impacted by a goodwill impairment charge of $ 394 relating to the Company’s anticipated divestiture of its Danival business and by $ 6,438 ($ 5,897 net of tax) of non-cash impairment charges primarily related to a write-down of building improvements, machinery and equipment in the United States and Europe used to manufacture certain slow moving or low margin SKUs, held for sale accounting of Danival and consolidation of certain office space and manufacturing facilities.

The current period charge also includes $ 4,455 ($ 3,274 net of tax) of intangible impairment relating to the divestiture of certain brands.

Net income from continuing operations in the quarter ended March 31, 2020 was impacted by impairment charges of $ 7,650 ($ 5,706 net of tax) related to indefinite-lived intangible assets (trade names) and $ 5,875 ($ 5,265 net of tax) of non-cash impairment charges 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.

Additionally, in the quarter ended March 31, 2020, there was an inventory write-down of $ 1,362 ($ 1,005 net of tax) in connection with the discontinuance of slow moving SKUs as part of a product rationalization initiative.

Net loss from discontinued operations in the quarter ended March 31, 2020 was impacted by a $ 540 ($ 362 net of tax) adjustment to the sale of Tilda entities relating to post-closing adjustments.

Net income from continuing operations in the quarter ended December 31, 2019 was impacted by impairment charges of $ 1,889 ($ 1,389 net of tax) related to indefinite-lived intangible assets (trade names) and an inventory write-down of $ 3,927 ($ 2,896 net of tax) in connection with the discontinuance of slow moving SKUs as part of a product rationalization initiative.

Net loss from discontinued operations in the quarter ended December 31, 2019 was impacted by a $ 3,752 ($ 2,720 net of tax) adjustment to the sale of Tilda entities relating to post-closing adjustments.

Net loss from discontinued operations in the quarter ended September 30, 2019 was primarily impacted by a reclassification of $ 95,120 of cumulative translation losses from accumulated comprehensive loss to the Company’s results of the Tilda business’ discontinued operations.

The expense for income taxes for the three months ended September 30, 2019 was impacted by $ 16,500 of tax related to the tax gain on the sale of the Tilda entities.

Three Months Ended

2019 March 31, 2019 December 31, 2018 September 30, 2018

Net sales $ 505,305 $ 547,257 $ 533,566 $ 518,478

Gross profit $ 95,030 $ 113,208 $ 101,351 $ 88,908

Operating (loss) income $ ( 2,641 ) $ 18,992 $ ( 20,880 ) $ ( 27,964 )

(Loss) income before income taxes and equity in earnings of equity-method investees $ ( 8,378 ) $ 11,931 $ ( 26,679 ) $ ( 32,878 )

Net (loss) income from continuing operations $ ( 7,336 ) $ 8,783 $ ( 31,787 ) $ ( 23,087 )

Net loss from discontinued operations, net of tax $ ( 6,215 ) $ ( 74,620 ) $ ( 34,714 ) $ ( 14,338 )

Net loss $ ( 13,551 ) $ ( 65,837 ) $ ( 66,501 ) $ ( 37,425 )

Net (loss) income per common share:

Basic net (loss) income per common share from continuing operations $ ( 0.07 ) $ 0.08 $ ( 0.31 ) $ ( 0.22 )

Basic net loss per common share from discontinued operations $ ( 0.06 ) $ ( 0.72 ) $ ( 0.33 ) $ ( 0.14 )

Basic net loss per common share $ ( 0.13 ) $ ( 0.63 ) $ ( 0.64 ) $ ( 0.36 )

Diluted net (loss) income per common share from continuing operations $ ( 0.07 ) $ 0.08 $ ( 0.31 ) $ ( 0.22 )

Diluted net loss per common share from discontinued operations $ ( 0.06 ) $ ( 0.72 ) $ ( 0.33 ) $ ( 0.14 )

Diluted net loss per common share $ ( 0.13 ) $ ( 0.63 ) $ ( 0.64 ) $ ( 0.36 )

Net loss from continuing operations in the quarter ended June 30, 2019 was impacted by $ 4,393 ($ 3,558 net of tax) and $ 5,617 ($ 4,143 net of tax) non-cash impairment charges in the United Kingdom and United States, respectively, primarily associated with a write down of the value of certain machinery and equipment no longer in use, some of which was used to manufacture certain slow moving SKUs that were discontinued.

Additionally, the Company recorded an inventory write-down of $ 10,346 ($ 7,606 net of tax) related to the discontinuation of additional slow moving SKUs in the United States as part of an ongoing product rationalization initiative.

Net loss from discontinued operations in the quarter ended March 31, 2019 included a pre-tax loss on sale on the disposition of the Plainville Farms business of $ 40,223 ($ 29,511 net of tax) to write down the assets and liabilities to the final sales price less costs to sell and asset impairments of $ 51,348 ($ 37,532 net of tax), each as a component of net loss on discontinued operations, net of tax.

The quarter ended December 31, 2018 was impacted by $ 10,148 ($ 7,484 net of tax) of Former Chief Executive Officer Succession Plan expense, net, $ 920 ($ 678 net of tax) related to professional fees associated with our internal accounting review and the independent review by the Audit Committee and other related matters, impairment charges of $ 17,900 ($ 13,374 net of tax) related to indefinite-lived intangible assets (trade names) and asset impairment charges in discontinued operations of $ 54,946 ($ 40,314 net of tax).

The quarter ended September 30, 2018 was impacted by $ 19,553 ($ 14,420 net of tax) of Former Chief Executive Officer Succession Plan expense, net, $ 3,414 ($ 2,518 net of tax) related to professional fees associated with our internal accounting review and the independent review by the Audit Committee and other related matters, $ 4,243 ($ 3,436 net of tax) primarily related to the closure of a manufacturing facility of fruit-based products in the United Kingdom and asset impairment charges in discontinued operations of $ 2,958 ($ 2,170 net of tax).

RELATED PARTY TRANSACTIONS

A member of our Board of Directors is also the chair of the board of one of the Company’s suppliers, for which the Company incurs expenses in the ordinary course of business.

The Company incurred expenses of $ 19,551 , $ 21,633 and $ 22,400 in fiscal years 2020, 2019 and 2018, respectively, to the supplier and affiliated entities.

On April 15, 2021, the Company completed the divestiture of its North America non-dairy beverages brands, Dream ® and WestSoy ® , for $ 31,320 .

The purchaser in this transaction was SunOpta Inc.

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

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

The Company incurred expenses of $ 13,050 , $ 19,551 and $ 21,633 in fiscal years 2021, 2020 and 2019, respectively, to SunOpta and its affiliated entities.

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

The Company incurred expenses of $ 2,295 , $ 4,242 and $ 2,592 in fiscal years 2021, 2020 and 2019, respectively, to the law firm and affiliated entities.

The director resigned from the Board in February 2020.

SUBSEQUENT EVENT

On July 21, 2020, the Company completed the sale of the Danival business.

As of June 30, 2020, all assets and liabilities related to Danival were classified as held for sale within the Company’s Consolidated Balance Sheet.

See Note 5, Discontinued Operations and Assets Held for Sale , for additional information on the transaction.

The director resigned from the Board of Directors in February 2020.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data