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Item 1. Financial Statements

2021-11-09 compared with 2021-05-06 · 250 added, 512 removed, 533 unchanged (59% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

MARCH 31, 2021 AND JUNE 30, 2020

SEPTEMBER 30, 2021 AND JUNE 30, 2021

(In thousands, except par values)

March 31, June 30,

September 30, June 30,

Current assets:

10 unchanged sentences

Investments and joint ventures 16,718 16,917

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

Operating lease right-of-use assets, net 88,387 92,010

Other assets 20,474 21,187

5 unchanged sentences

Current portion of long-term debt 335 530

Liabilities related to assets held for sale — 3,567

Total current liabilities 296,364 290,434

23 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(In thousands, except per share amounts)

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

2021 2020 2021 2020

Three Months Ended September 30,

Net sales $ 454,903 $ 498,627

4 unchanged sentences

Productivity and transformation costs

4,553 11,514 12,371 37,949

Proceeds from insurance claim

( 592 ) ( 400 ) ( 592 ) ( 2,962 )

Long-lived asset and intangibles impairment — 13,525 57,676 15,414

Long-lived asset impairment — 32,497

Operating income 25,547 3,280

Interest and other financing expense, net 1,856 2,453

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

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

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

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

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

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

Net income (loss) $ 34,254 $ 24,339 $ 36,879 $ ( 83,646 )

Other income, net ( 788 ) ( 1,373 )

Income from continuing operations before income taxes and equity in net loss of equity-method investees 24,479 2,200

Provision for income taxes 4,542 12,962

Equity in net loss of equity-method investees 526 19

Net income (loss) from continuing operations $ 19,411 $ ( 10,781 )

Net income from discontinued operations, net of tax — 11,266

Net income $ 19,411 $ 485

Net income (loss) per common share:

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

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

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

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

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

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

Basic net income (loss) per common share from continuing operations $ 0.20 $ ( 0.11 )

Basic net income per common share from discontinued operations — 0.11

Basic net income per common share $ 0.20 $ —

Diluted net income (loss) per common share from continuing operations $ 0.20 $ ( 0.11 )

Diluted net income per common share from discontinued operations — 0.11

Diluted net income per common share $ 0.20 $ —

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

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( LOSS) (UNAUDITED)

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ( LOSS) INCOME (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(In thousands)

Three Months Ended

March 31, 2021 March 31, 2020

September 30, 2021 September 30, 2020

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

1 unchanged sentence

Net income $ 19,411 $ 485

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustments before reclassifications $ ( 22,805 ) $ — ( 22,805 ) $ 33,957 $ — 33,957

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

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

322 ( 68 ) 254 134 ( 25 ) 109

Change in deferred gains on cash flow hedging instruments 44 ( 9 ) 35 50 ( 10 ) 40

Change in deferred gains (losses) on net investment hedging instruments 2,287 ( 480 ) 1,807 ( 3,787 ) 795 ( 2,992 )

3,810 ( 800 ) 3,010 — — —

Total other comprehensive income (loss)

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

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

Nine Months Ended

March 31, 2021 March 31, 2020

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

amount Tax (expense) benefit After-tax amount

Net income (loss) $ 36,879 $ ( 83,646 )

Other comprehensive income (loss):

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

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

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

474 ( 100 ) 374 108 ( 25 ) 83

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

( 3,875 ) 814 ( 3,061 ) — — —

Total other comprehensive income (loss)

Total other comprehensive (loss) income

$ ( 20,474 ) $ ( 489 ) $ ( 20,963 ) $ 30,220 $ 785 $ 31,005

Total comprehensive income (loss) $ 130,589 $ ( 31,045 )

Total comprehensive (loss) income $ ( 1,552 ) $ 31,490

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021

(In thousands, except par values)

Common Stock Additional Other

Common Stock Additional Accumulated

Amount Paid-in Retained Treasury Stock Comprehensive

Shares at $ .01

Capital Earnings Shares Amount Income (Loss) Total

Capital Earnings Shares Amount Loss Total

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

Net income 19,411 19,411

Cumulative effect of adoption of ASU 2016-13

( 310 ) ( 310 )

Other comprehensive income 31,005 31,005

Other comprehensive loss ( 20,963 ) ( 20,963 )

Issuance of common stock pursuant to stock-based compensation plans

4 unchanged sentences

Balance at September 30, 2021 109,568 $ 1,096 $ 1,191,817 $ 710,636 14,992 $ ( 460,819 ) $ ( 93,974 ) $ 1,348,756

Net income 2,140 2,140

Other comprehensive income 43,044 43,044

Issuance of common stock pursuant to stock-based compensation plans

162 2 ( 2 ) —

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

38 ( 1,255 ) ( 1,255 )

Repurchases of common stock 923 ( 29,684 ) ( 29,684 )

Stock-based compensation expense 3,823 3,823

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

Net income 34,254 34,254

Other comprehensive income 19,661 19,661

Issuance of common stock pursuant to stock-based compensation plans

127 1 ( 1 ) —

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

49 ( 2,018 ) ( 2,018 )

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

Stock-based compensation expense 3,698 3,698

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

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2020

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

(In thousands, except par values)

Common Stock Additional Other

Common Stock Additional Accumulated

Amount Paid-in Retained Treasury Stock Comprehensive

Shares at $ .01

Capital Earnings Shares Amount Income (Loss) Total

Capital Earnings Shares Amount Loss Total

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

Net loss ( 107,021 ) ( 107,021 )

Net income 485 485

Cumulative effect of adoption of ASU 2016-02

5 unchanged sentences

20 ( 468 ) ( 468 )

Stock-based compensation expense 3,281 3,281

Balance at September 30, 2019 108,873 $ 1,089 $ 1,161,537 $ 587,557 4,631 $ ( 110,351 ) $ ( 168,894 ) $ 1,470,938

Net loss ( 964 ) ( 964 )

Other comprehensive income 48,697 48,697

Issuance of common stock pursuant to stock-based compensation plans

146 2 ( 2 ) —

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

27 ( 671 ) ( 671 )

Stock-based compensation expense 3,083 3,083

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

Net income 24,339 24,339

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

Issuance of common stock pursuant to stock-based compensation plans

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

20 ( 523 ) ( 523 )

Repurchases of common stock 1,281 ( 42,052 ) ( 42,052 )

Stock-based compensation expense 4,367 4,367

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

Balance at September 30, 2020 109,177 $ 1,093 $ 1,176,241 $ 614,346 8,539 $ ( 214,712 ) $ ( 140,387 ) $ 1,436,581

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED MARCH 31, 2021 AND 2020

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(In thousands)

Nine Months Ended March 31,

Three Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) $ 36,879 $ ( 83,646 )

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

Net income from continuing operations 25,624 21,935

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

Net income $ 19,411 $ 485

Net income from discontinued operations — 11,266

Net income (loss) from continuing operations 19,411 ( 10,781 )

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

Depreciation and amortization 10,855 13,761

Deferred income taxes ( 2,105 ) ( 930 )

Equity in net loss of equity-method investees 1,025 1,219

Stock-based compensation, net 11,888 9,581

Long-lived asset and intangibles impairment 57,676 15,414

Other non-cash items, net 494 2,335

Equity in net income of equity-method investees 526 19

Stock-based compensation 4,287 4,367

Long-lived asset impairment — 32,497

Gain on sale of assets ( 276 ) —

Gain on sale of businesses — ( 620 )

Other non-cash items including unrealized currency gains, net ( 1,093 ) ( 1,047 )

(Decrease) increase in cash attributable to changes in operating assets and liabilities:

7 unchanged sentences

Purchases of property, plant and equipment ( 17,810 ) ( 12,155 )

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

Investment in joint venture ( 408 ) —

Proceeds from sale of assets 164 —

Proceeds from sale of businesses and other — 4,427

Net cash used in investing activities from continuing operations

3 unchanged sentences

Repayments under bank revolving credit facility ( 5,000 ) ( 47,000 )

Repayments under term loan — ( 206,250 )

Proceeds from discontinued operations entities — 305,247

Repayments of other debt, net ( 237 ) ( 1,439 )

Share repurchases ( 80,298 ) ( 57,406 )

Shares withheld for payment of employee payroll taxes ( 1,175 ) ( 468 )

Share repurchases ( 177,103 ) ( 42,052 )

Net cash used in financing activities from continuing operations

1 unchanged sentence

Effect of exchange rate changes on cash from continuing operations ( 2,926 ) 2,500

CASH FLOWS FROM DISCONTINUED OPERATIONS

Cash used in operating activities

Cash provided by investing activities

Cash used in financing activities

— ( 299,418 )

Effect of exchange rate changes on cash from discontinued operations

Net cash flows used in discontinued operations

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

Net decrease in cash and cash equivalents ( 46,909 ) ( 518 )

Cash and cash equivalents at beginning of period 75,871 37,771

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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

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

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

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

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

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

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

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 80 countries worldwide.

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

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

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

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

(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.

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 its 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.

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

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

Productivity and Transformation Costs

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

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

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

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

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

The Company operates under two reportable segments:

North America and International.

Discontinued Operations

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

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 peri ods.

Se e Note 4, Dispositions , for additional information.

The financial statements separately report discontinued operations and the results of continuing operations (see Note 4).

All footnotes exclude discontinued operations unless otherwise noted.

BASIS OF PRESENTATION

2 unchanged sentences

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

As such, consolidated net loss includes the Company's equity in the current earnings or losses of such companies.

As such, consolidated net income includes the Company's equity in the current earnings or losses of such companies.

The Company's unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

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

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

Operating results for the three months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2022.

Please refer to the Notes to the Consolidated Financial Statements as of June 30, 2021 and for the fiscal year then ended included in the Form 10-K for information not included in these condensed notes.

2 unchanged sentences

Certain prior year amounts have been reclassified to conform with current year presentation.

Transfer of Financial Assets

The Company has non-recourse accounts receivable financing arrangements in which eligible receivables are sold to third-party buyers in exchange for cash.

The Company transferred accounts receivables in their entirety to the buyers 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 these arrangements was $ 22,889 and $ 14,360 during the three months ended September 30, 2021 and 2020 , respectively.

The incremental cost of accounts receivable financing arrangements is included in Interest and other financing expense, net in the Company’s Consolidated Statements of Operations.

The proceeds from the sale of receivables are included in cash from operating activities in the accompanying Consolidated Statements of Cash Flows.

Significant Accounting Policies

The Company's significant accounting policies are described in Note 2, Summary of Significant Accounting Policies and Practices , in the Notes to the Consolidated Financial Statements in the Form 10-K.

Included herein are certain updates to those policies.

Valuation of Accounts Receivable

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

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

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

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

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Measurement of Credit Losses on Financial Instrum ents , 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.

A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

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

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:

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements for fair value measurement by removing, modifying or adding certain disclosures.

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

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 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 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.

Issued by the Financial Accounting Standards Board (“FASB”), ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of:

(a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows.

Further, ASC 815 requires qualitative disclosures that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

During the first quarter of fiscal year 2022, the Company adopted the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

EARNINGS (LOSS) PER SHARE

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

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

2021 2020 2021 2020

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

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

Net income (loss) $ 34,254 $ 24,339 $ 36,879 $ ( 83,646 )

Three Months Ended September 30,

Net income (loss) from continuing operations $ 19,411 $ ( 10,781 )

Net income from discontinued operations — 11,266

Net income $ 19,411 $ 485

Basic weighted average shares outstanding

1 unchanged sentence

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

1,765 305 883 297

Diluted weighted average shares outstanding

3 unchanged sentences

Discontinued operations — 0.11

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

Basic net income per common share $ 0.20 $ —

Diluted net income (loss) per common share:

1 unchanged sentence

Discontinued operations — 0.11

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

Diluted net income per common share $ 0.20 $ —

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

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

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

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

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

Anti-dilutive restricted stock awards and stock options excluded from our calculation of diluted net income (loss) per share for the three months ended September 30, 2021 were de minimis.

There were 1,299 stock-based awards excluded for the three months ended September 30, 2021 as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the period.

Due to our net loss from continuing operations in the three months ended September 30, 2020, all common stock equivalents such as stock options and unvested restricted stock awards have been excluded from the computation of diluted net loss per common share because the effect would have been anti-dilutive to the computations in the period.

Share Repurchase Program

On June 21, 2017, the Company's Board of Directors authorized the repurchase of up to $ 250,000 of the Company’s issued and outstanding common stock.

In June 2017 and August 2021, the Company's Board of Directors authorized the repurchase of up to $ 250,000 and $ 300,000 of the Company’s issued and outstanding common stock, respectively.

Share repurchases under the 2021 authorization commenced in August 2021, after the 2017 authorization was fully utilized.

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

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

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

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

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

During the three months ended September 30, 2021, the Company repurchased 4,525 shares under the repurchase program for a total of $ 175,597 , excluding commissions, at an average price of $ 38.80 per share.

As of September 30, 2021, the Company had $ 206,811 of remaining authorization under the share repurchase program.

During the three months ended September 30, 2020, the Company repurchased 1,281 shares under the repurchase program for a total of $ 42,027 , excluding commissions, at an average price of $ 32.81 per share.

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 transformation and portfolio simplification process.

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

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.

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

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

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

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

Cash and cash equivalents $ 13,559

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 three months ended March 31, 2021, recognizing a pre-tax loss on sale of $ 1,904 .

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, 2020 and December 31, 2020, recognizing pre-tax non-cash losses of $ 32,497 and $ 23,596 , respectively, to reduce the carrying value to its estimated fair value less costs to sell.

The sale was completed on January 13, 2021 for a total cash consideration of $ 38,547 , 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 Form 10-K 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 quarter ended September 30, 2020.

The Company deconsolidated the net assets of the Danival business upon closing of the sale during the quarter ended September 30, 2020, recognizing a pre-tax gain on sale of $ 611 .

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 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.

In January 2020, the Company and the Purchaser agreed to fully resolve all matters relating to post-closing adjustments to the sale price, resulting in a final aggregate sale price of $ 341,800 .

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

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

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

On August 27, 2019, the Company sold the entities comprising the Tilda Group Entities and certain other assets of the Tilda business 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 disposition of the Tilda operating segment represented a strategic shift that had a major impact on the Company’s operations and financial results and has been accounted for as discontinued operations.

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

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

2021 2020 2021 2020

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

Three Months Ended September 30,

Net sales $ —

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Gross profi t

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

Other expense 75

Interest expense (1)

Translation loss (2)

Gain on sale of discontinued operations — 540 — ( 9,630 )

Net loss from discontinued operations before income taxes ( 75 )

(Benefit) provision for income taxes (3)

— ( 965 ) ( 11,320 ) 12,900

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

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

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

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

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

Sale of Hain Pure Protein Reportable Segment

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

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

Collectively, these dispositions represented a

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

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

Sale of Plainville Farms Business ("Plainville")

On February 15, 2019, the Company completed the sale of substantially all of the assets used primarily for Plainville (a component of HPPC), which included $ 25,000 in cash to the purchaser, for a nominal purchase price.

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 provided for the issuance by the Company of an irrevocable stand-by letter of credit (the “Letter of Credit”) of $ 10,000 which expired nineteen months after issuance, during the first quarter of fiscal 2021.

The Company was 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 pu rchaser.

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

Sale of HPPC and Empire Kosher

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

The purchase price, net of estimated customary adjustments based on the closing balance sheet of HPPC, was $ 77,714 .

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

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

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

2021 2020 2021 2020

Net sales $ — $ — $ — $ —

Cost of sales — — — —

Gross profit (loss) — — — —

Selling, general and administrative expense — — — —

Asset impairments — — — —

Other income — — ( 10 ) —

Loss on sale of discontinued operations (1)

— 1,781 — 3,205

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

Benefit for income taxes (1)

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

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

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

Net income from discontinued operations, net of tax $ 11,256

(1) Includes $ 11,331 of tax benefit related to the tax gain on the sale of Tilda for the three months ended September 30, 2020.

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

The Company's dispositions are described in more detail in Note 5, Dispositions , in the Notes to the Consolidated Financial Statements in the Form 10-K.

Inventories consisted of the following:

September 30,

2021 June 30,

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

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

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

During the three months ended September 30, 2021 and 2020, the Company recorded inventory write-downs of $ 0 and $ 204 , respectively.

PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:

September 30,

2021 June 30,

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$ 312,426 $ 312,777

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

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

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

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

Depreciation expense for the three months ended September 30, 2021 and 2020 was $ 7,408 and $ 9,703 , respectively.

A facility in the United Kingdom was held for sale as of June 30, 2021 with a net carrying amount of 1,874 .

Additionally, a facility in the United States was held for sale as of September 30, 2021 with a net carrying amount of $ 1,768 .

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 three and nine months ended March 31, 2021 were as follows:

Three Months Ended Nine Months Ended

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

The components of lease expenses for the three months ended September 30, 2021 and 2020 were as follows:

Three Months Ended September 30,

Operating lease expenses $ 3,752 $ 3,956

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Total lease expenses $ 5,590 $ 5,920

Supplemental balance sheet information related to leases was as follows:

Leases Classification March 31, 2021 June 30, 2020

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

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

Total leased assets $ 90,745 $ 88,856

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

Finance Current portion of long-term debt 245 308

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

Finance Long-term debt, less current portion 376 316

Total lease liabilities $ 95,271 $ 95,924

Additional information related to leases is as follows:

Nine Months Ended

March 31, 2021 March 31, 2020

Three Months Ended September 30,

Supplemental cash flow information

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Financing cash flows from finance leases $ 60 $ 85

ROU assets obtained in exchange for lease obligations (a) :

ROU assets obtained in exchange for lease obligations:

Operating leases $ 319 $ 7,766

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Finance leases 4.2 % 2.6 %

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

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

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

Fiscal Year Operating leases Finance leases Total

2021 (remainder of year) $ 2,665 $ 71 $ 2,736

2022 14,358 246 14,604

2023 13,596 133 13,729

2024 11,878 51 11,929

2025 10,663 51 10,714

Thereafter 60,084 127 60,211

Total lease payments 113,244 679 113,923

Imputed interest 18,594 58 18,652

Supplemental balance sheet information related to leases was as follows:

Leases Classification September 30, 2021 June 30, 2021

Operating lease ROU assets, net Operating lease right-of-use assets, net $ 88,387 $ 92,010

Finance lease ROU assets, net Property, plant and equipment, net 469 547

Total leased assets $ 88,856 $ 92,557

Operating Accrued expenses and other current liabilities $ 11,216 $ 10,870

Finance Current portion of long-term debt 195 229

Operating Operating lease liabilities, noncurrent portion 82,176 85,929

Finance Long-term debt, less current portion 283 326

Total lease liabilities $ 93,870 $ 97,354

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

Maturities of lease liabilities as of September 30, 2021 were as follows:

Fiscal Year Operating leases Finance leases Total

2021 $ 14,781 $ 308 $ 15,089

2022 (remainder of year) $ 10,094 $ 163 $ 10,257

2023 14,499 133 14,632

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North America International Total

Balance as of June 30, 2020 (a)

$ 606,055 $ 255,903 $ 861,958

Reclassification of goodwill to assets held for sale — ( 14,362 ) ( 14,362 )

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

Translation and other adjustments, net ( 777 ) ( 6,942 ) ( 7,719 )

Balance as of March 31, 2021 (a)

Balance as of September 30, 2021

$ 600,035 $ 263,313 $ 863,348

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

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

See Note 4, Dispositions , for more information.

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

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

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

Other Intangible Assets

The following table includes the gross carrying amount and accumulated amortization, where applicable, for intangible assets, excluding goodwill:

September 30,

2021 June 30,

Non-amortized intangible assets:

Trademarks and tradenames (a)

$ 280,690 $ 278,103

Trademarks and tradenames $ 270,084 $ 273,471

Amortized intangible assets:

2 unchanged sentences

Net carrying amount $ 308,588 $ 314,895

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

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

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

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

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

There were no events or circumstances that warranted an interim impairment test for indefinite-lived intangible assets during the three months ended September 30, 2021 or 2020.

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

Amortization expense included in continuing operations was as follows:

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

2021 2020 2021 2020

Three Months Ended September 30,

Amortization of acquired intangibles $ 2,095 $ 2,433

1 unchanged sentence

Debt and borrowings consisted of the following:

September 30,

2021 June 30,

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Credit Agreement

On February 6, 2018, the Company entered into the Third Amended and Restated Credit Agreement (as amended, the “Credit Agreement”).

The Credit Agreement provides for a $ 1,000,000 revolving credit facility through February 6, 2023 and provided for a $ 300,000 term loan.

On February 6, 2018, the Company entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”).

The Credit Agreement provides for a $ 1,000,000 revolving credit facility through February 6, 2023 and provides for a $ 300,000 term loan.

Under the Credit Agreement, the revolving credit facility may be increased by an additional uncommitted $ 400,000 , provided certain conditions are met.

Borrowings under the Credit Agreement may be used to provide working capital, finance capital expenditures and permitted acquisitions, refinance certain existing indebtedness and for other lawful corporate purposes.

The Credit Agreement provides for multicurrency borrowings in Euros, Pounds Sterling and Canadian dollars as well as other currencies which may be designated.

The Credit Agreement provides for multicurrency borrowings in Euros and Canadian dollars as well as other currencies which may be designated.

In addition, certain wholly-owned foreign subsidiaries of the Company may be designated as co-borrowers.

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

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

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

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

As of September 30, 2021, there were $ 344,969 of borro wings outstanding under the revolving credit f acility and $ 6,394 let ters of credit outstanding under the Credit Agreement.

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 3.75 to 1.0 from March 31, 2021 and thereafter.

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

The Company’s allowable consolidated leverage ratio is 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 3.75 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 March 31, 2021, $ 738,606 was available under the Amended Credit Agreement, and the Company was in compliance with all associated covenants, as amended by the Amended Credit Agreement.

As of September 30, 2021, $ 648,637 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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dollars will bear interest at the Base Rate plus the Applicable Rate, and Global Swing Line loans denominated in foreign currencies shall bear interest based on the overnight Eurocurrency Rate for loans denominated in such currency plus the Applicable Rate.

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

The weighted average interest rate on outstanding borrowings under the Amended Credit Agreement at September 30, 2021 was 1.08 % .

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

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

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

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

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

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

The effective income tax rate from continuing operations was expense of 18.6 % and 589.2 % for the three months ended September 30, 2021 and 2020, respectively.

Lower effective income tax rate relative to our statutory tax rates for the current quarter is mainly due to the reversal of uncertain tax position accruals based on filing and approval of certain elections by the tax authorities.

In addition, t he effective income tax rates from continuing operations for the three months ended September 30, 2021 and 2020 were negatively impacted by provisions in the Tax Cuts and Jobs Act (the "Tax Act"), primarily related to Global Intangible Low Taxed Income ("GILTI") and limitations on the deductibility of executive compensation.

Furthermore, the effective income tax rate from continuing operations for the three months ended September 30, 2020 was negatively impacted by various discrete items including the tax impact of the United Kingdom Fruit business reserve, the legal entity reorganization, and the UK rate change.

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

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

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

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

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

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

The income tax expense (benefit) from discon tinued operations was $ 0 for the three months ended September 30, 2021 , while the income tax benefit from discontinued operations was $ 11,331 for the three months ended September 30, 2020.

The benefit for income tax for the three months ended September 30, 2020 was impacted by a legal entity reorganization.

ACCUMULATED OTHER COMPREHENSI VE LOSS

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

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

2021 2020 2021 2020

Three Months Ended September 30,

Foreign currency translation adjustments:

Other comprehensive income (loss) before reclassifications (1)

$ 1,672 $ ( 52,315 ) $ 80,491 $ ( 42,602 )

Other comprehensive (loss) income before reclassifications $ ( 22,805 ) $ 32,776

Amounts reclassified into income (1)

14,725 — 15,906 95,120

Deferred gains (losses) on cash flow hedging instruments:

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

1,168 ( 621 ) —

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

( 914 ) 109 995 83

Other comprehensive gain (loss) before reclassifications 535 ( 883 )

Amounts reclassified into (expense) income (2)

Deferred gains (losses) on net investment hedging instruments:

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

3,107 — ( 2,763 ) —

Amount of loss reclassified from AOCL into expense (3)

Other comprehensive gain (loss) before reclassifications 1,910 ( 2,890 )

Amounts reclassified into expense (2)

( 103 ) ( 102 )

Net change in AOCL $ ( 20,963 ) $ 31,005

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

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

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

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

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

(3) See Note 15, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains (losses) on cash flow hedging instruments recorded in the Consolidated Statements of Operations in the three and nine months ended March 31, 2021 and 2020.

During the three months ended September 30, 2020, the Company reclassified $ 1,181 of translation losses from AOCL to Other income, net on the Consolidated Statement of Operations.

(2) See Note 15, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains (losses) on cash flow hedging instruments recorded in the Consolidated Statements of Operations in the three months ended September 30, 2021 and 2020.

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

The Company has one stockholder approved plan, the Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the "2002 Plan"), under which the Company’s officers, senior management, other key employees, consultants and directors may be granted equity-based awards.

The Company has a stockholder approved plan, the Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the "2002 Plan"), under which the Company’s officers, senior management, other key employees, consultants and directors may be granted equity-based awards.

The Company also grants shares under its 2019 Equity Inducement Award Program (the "2019 Inducement Program") to induce selected individuals to become employees of the Company.

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 provides for performance and market equity awards that can be earned over defined performance periods.

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 provides for performance and market equity awards that can be earned over defined performance periods.

The Company's plans are described in Note 14, Stock-Based Compensation and Incentive Performance Plans , in the Notes to the Consolidated Financial Statements in the Form 10-K.

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

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

2021 2020 2021 2020

Three Months Ended September 30,

Selling, general and administrative expense

$ 4,287 $ 4,367

Discontinued operations — — — 544

Total compensation cost recognized for stock-based compensation plans $ 3,698 $ 3,761 $ 11,888 $ 10,125

Related income tax benefit $ 273 $ 807

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

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

A summary of the restricted stock activity (including all RSAs, RSUs and PSUs) for the three months ended September 30, 2021 is as follows:

Number of Shares

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Forfeited ( 103 ) $ 15.43

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

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

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

Nine Months Ended March 31,

Non-vested RSAs, RSUs and PSUs outstanding at September 30, 2021 1,628 $ 16.53

At September 30, 2021 and June 30, 2021, the table above includes a total of 1,299 and 1,382 shares (including an inducement grant of 350 shares made to our CEO as previously disclosed), respectively, that represent the target number of shares that may be earned under non-vested performance equity awards that are eligible to vest up to 300 % of target.

Vested shares during the current period include a total of 13 shares which vested based on certain performance-based metrics being met.

Three Months Ended September 30,

Fair value of RSAs, RSUs and PSUs granted $ 478 $ 4,398

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Tax benefit recognized from restricted shares vesting $ 246 $ 152

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

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

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

At September 30, 2021, there was $ 5,169 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 1.1 years.

Subsequent to the quarter end, 1,299 shares underlying PSUs under the 2019-2021 LTI Program vested on November 6, 2021 at 100 % of target based on achieving the target goal for total shareholder return.

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 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 Founders Table.

At September 30, 2021 and June 30, 2021, the carrying value of the Company’s investment in Chop’t was $ 10,161 and $ 10,699 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

The Company also holds the following investments:

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

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

(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.

with Future Consumer Ltd, a joint venture accounted for under the equity method of accounting, and (c) Yeo Hiap Seng Limited, for which the Company holds a less than 1 % eq uity ownership interest.

The carrying value of these combined investments was $ 6,557 and $ 6,218 as of September 30, 2021 and June 30, 2021, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

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

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

The following table presents assets and liabilities measured at fair value on a recurring basis as of September 30, 2021:

Derivative financial instruments 746 — 746 —

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The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2021:

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.

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

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

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

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

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

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

In addition to the instruments named above, the Company also makes fair value measurements in connection with its interim and annual goodwill and tradename impairment testing.

These measurements fall into Level 3 of the fair value hierarchy (See Note 8, Goodwill and Other Intangible Assets ).

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Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties.

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

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

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

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

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

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

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

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

During the three months ended September 30, 2021, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

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

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

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

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

During the remaining nine months of fiscal 2022, the Company estimates that an additional $ 283 will be reclassified as an increase to interest expense.

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

Interest Rate Derivative Number of Instruments Notional Amount

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

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

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

During the remaining nine months of fiscal 2022, the Company estimates that an additional $ 127 relating to cross-currency swaps will be reclassified as a decrease to interest expense.

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

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

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

Foreign currency forward contract 6 £ 5,142 € 6,000

Net Investment Hedges

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

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

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

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

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

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

As of September 30, 2021 the Company had no outstanding derivatives that were not designated as hedges in qualifying hedging relationships.

Designated Hedges

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

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 September 30, 2021:

Asset Derivatives Liability Derivatives

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

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

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

2021 2020 2021 2020

Interest rate swaps $ 217 $ — Interest and other financing expense, net $ ( 82 ) $ —

Cross-currency swaps 1,262 — Interest and other financing expense, net / Other expense (income), net 1,239 —

Foreign currency forward contracts — 134 Cost of sales — $ —

Total $ 1,479 $ 134 $ 1,157 $ —

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

Nine Months Ended March 31,

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

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

Three Months Ended September 30, Three Months Ended September 30,

2021 2020 2021 2020

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Total $ 678 $ ( 1,118 ) $ 634 $ ( 1,168 )

The following table presents the pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations for the three months ended of March 31, 2021 and 2020:

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

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

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

The effects of cash flow hedging:

(Loss) gain on cash flow hedging relationships

Interest rate swaps

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

Cross-currency swaps

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

Foreign currency forward contracts

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

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

Nine Months Ended March 31, 2021

Nine Months Ended March 31, 2020

Three Months Ended September 30, 2021 Three Months Ended September 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

The effects of cash flow hedging:

(Loss) gain on cash flow hedging relationships

Gain (loss) on cash flow hedging relationships

Interest rate swaps

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

Amount of loss reclassified from AOCL into income $ — $ ( 104 ) $ — $ — $ ( 58 ) $ —

Cross-currency swaps

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

Amount of gain (loss) reclassified from AOCL into income $ — $ 41 $ 697 $ — $ 41 $ ( 1,224 )

Foreign currency forward contracts

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

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

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

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

2021 2020 2021 2020

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

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

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

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations as of September 30, 2021 and 2020:

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

Three Months Ended September 30, Three Months Ended September 30,

2021 2020 2021 2020

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Non-Designated Hedges

The following table presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Consolidated Statements Operations for the three months ended March 31, 2021 and 2020:

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

Three Months Ended March 31,

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

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

Nine Months Ended March 31,

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

Three Months Ended September 30,

Foreign currency forward contracts Other expense (income), net $ — $ 124

Credit-Risk-Related Contingent Features

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The reduction in workforce associated with these initiatives are expected to result in 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 period ended as of March 31, 2021:

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

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

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

Termination benefits and personnel realignment $ 4,448 $ 285 $ ( 2,539 ) $ ( 12 ) $ 2,182

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

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

COMMITMENTS AND CONTINGENCIES

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Securities Litigation (the “Consolidated Securities Action”), and Rosewood Funeral Home and Salamon Gimpel were appointed as Co-Lead Plaintiffs.

On June 21, 2017, the Company received notice that plaintiff Spadola voluntarily dismissed his claims without prejudice to his ability to

participate in the Consolidated Securities Action as an absent class member.

On June 21, 2017, the Company received notice that plaintiff Spadola voluntarily dismissed his claims without prejudice to his ability to participate in the Consolidated Securities Action as an absent class member.

The Co-Lead Plaintiffs in the Consolidated Securities Action filed a Consolidated Amended Complaint on August 4, 2017 and a Corrected Consolidated Amended Complaint on September 7, 2017 on behalf of a purported class consisting of all persons who purchased or otherwise acquired Hain Celestial securities between November 5, 2013 and February 10, 2017 (the “Amended Complaint”).

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

Oral argument has not yet been scheduled.

Oral argument took place on September 27, 2021.

The parties await a decision.

Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court

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(the “Barnes Complaint”), respectively.

Both the Silva Complaint and the Barnes Complaint allege violation of securities law, breach of fiduciary duty, waste of corporate assets and unjust enrichment.

Both the Silva

Complaint and the Barnes Complaint allege violation of securities law, breach of fiduciary duty, waste of corporate assets and unjust enrichment.

On May 23, 2017, an additional stockholder filed a complaint under seal in the Eastern District of New York against the former Board of Directors and certain former officers of the Company.

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Pursuant to the terms of the stay, Defendants in the Consolidated Stockholder Class and Derivative Action had until May 6, 2020 to answer, move, or otherwise respond to the complaint in this matter.

This deadline

was extended, and Defendants moved to dismiss the Consolidated Stockholder Class and Derivative Action Complaint on June 23, 2020, with Plaintiffs’ opposition due August 7, 2020.

This deadline was extended, and Defendants moved to dismiss the Consolidated Stockholder Class and Derivative Action Complaint on June 23, 2020, with Plaintiffs’ opposition due August 7, 2020.

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.

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

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

The current stay ordered by the Court is set to expire on December 30, 2021.

Baby Food Litigation

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

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

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 (Jenna Johnson et.

One of the consumer class actions ( Kathryn Gavula, et.

Beech-Nut Nutrition Co., et.

al.) filed in the U.S.

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

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

District Court for the Eastern District of New York.

) filed in the U.S.

District Court for the District of Oregon alleges that the Company violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by conspiring 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.

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 New York Supreme Court, Nassau County.

The Company has moved to stay or transfer this case to the consolidated proceeding in the Eastern District of New York and that motion is pending.

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

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

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

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

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

District Court for the Eastern District of New York.

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

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

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

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

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

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

The Company has been named in one civil government enforcement action, State of New Mexico ex rel.

Nurture, Inc., et al., which was filed by the New Mexico Attorney General against the Company and several other manufacturers based on the alleged presence of heavy metals in their baby food products.

The Company and several other manufacturers have moved to dismiss the New Mexico Attorney General’s lawsuit, and that motion to dismiss is currently pending.

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.

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

Additionally, the Company

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

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

SEGMENT INFORMATION

In accordance with ASC 280, Segment Reporting , the Company, based on economic similarity, defines its operating segments as the following five segments:

the United States, United Kingdom (Hain Daniels), Ella's Kitchen UK, Europe and Canada.

Similarly, under the same guidance, the Company operates under two reportable segments:

Our organization structure consist of two geographic based reportable segments:

North America and International.

Net sales and operating income are the primary measures used by the Company’s chief operating decision maker ("CODM") to evaluate segment operating performance and to decide how to allocate resources to segments.

The CODM is the Company’s CEO.

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

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

Additionally, certain Productivity and transformation costs are included in Corporate and Other.

Expenses that are managed centrally, but can be attributed to a segment, such as employee benefits and certain facility costs, are allocated based on reasonable allocation methods.

Information about total assets by segment is not disclosed because such information is not reported to or used by the Company’s CODM for purposes of assessing segment performance or allocating resources.

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 following tables set forth financial information about each of the Company’s reportable segments.

Transactions between reportable segments were insignificant for all periods presented.

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

2021 2020 2021 2020

Three Months Ended September 30,

North America $ 265,525 $ 280,668

8 unchanged sentences

$ 25,547 $ 3,280

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

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

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

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

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

(a) In addition to general Corporate and Other expenses as described above, for the three months ended September 30, 2021, Corporate and Other includes $ 2,057 of Productivity and transformation costs.

For the three months ended September 30, 2020, Corporate and Other includes $ 803 of Productivity and transformation costs.

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

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

2021 2020 2021 2020

Three Months Ended September 30,

Grocery $ 301,553 $ 343,749

4 unchanged sentences

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

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

2021 2020 2021 2020

Three Months Ended September 30,

United States $ 233,487 $ 239,717

3 unchanged sentences

The Company’s long-lived assets, which primarily represent net property, plant and equipment, operating lease right-of-use assets and noncurrent other assets by geographic area were as follows:

September 30,

2021 June 30,

4 unchanged sentences

RELATED PARTY TRANSACTIONS

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

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.

1 unchanged sentence

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

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

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

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

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

The director resigned from the Board in February 2020.

The Company incurred expenses of $ 220 and $ 4,810 in the three months ended September 30, 2021 and 2020, respectively, to the supplier and affiliated entities.

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

What changed 10-Q

Item 1. Financial Statements