What changed in this filing

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Item 1. Financial Statements

2022-02-03 compared with 2021-11-09 · 382 added, 210 removed, 573 unchanged (51% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

SEPTEMBER 30, 2021 AND JUNE 30, 2021

DECEMBER 31, 2021 AND JUNE 30, 2021

(In thousands, except par values)

September 30, June 30,

December 31, June 30,

Current assets:

10 unchanged sentences

Investments and joint ventures 16,409 16,917

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

Operating lease right-of-use assets 91,739 92,010

Other assets 21,826 21,187

30 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020

(In thousands, except per share amounts)

Three Months Ended September 30,

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

2021 2020 2021 2020

Net sales $ 476,941 $ 528,418 $ 931,844 $ 1,027,045

4 unchanged sentences

Productivity and transformation costs

2,786 5,011 6,769 6,444

Proceeds from insurance claim

— — ( 196 ) —

Long-lived asset impairment 303 25,179 303 57,676

6 unchanged sentences

Net income (loss) from continuing operations $ 30,889 $ 2,151 $ 50,300 $ ( 8,630 )

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

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

Net income $ 30,889 $ 2,140 $ 50,300 $ 2,625

12 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ( LOSS) INCOME (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( LOSS) (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020

(In thousands)

Three Months Ended

September 30, 2021 September 30, 2020

December 31, 2021 December 31, 2020

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

1 unchanged sentence

Net income $ 30,889 $ 2,140

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustments before reclassifications $ ( 2,143 ) $ — ( 2,143 ) $ 46,043 $ — 46,043

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

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

682 ( 144 ) 538 101 ( 21 ) 80

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

1,709 ( 360 ) 1,349 ( 3,897 ) 818 ( 3,079 )

Total other comprehensive income (loss)

$ 248 $ ( 504 ) $ ( 256 ) $ 42,247 $ 797 $ 43,044

Total comprehensive income $ 30,633 $ 45,184

Six Months Ended

December 31, 2021 December 31, 2020

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

amount Tax (expense) benefit After-tax amount

Net income $ 50,300 $ 2,625

Other comprehensive income (loss):

Foreign currency translation adjustments before reclassifications $ ( 24,948 ) $ — ( 24,948 ) $ 78,819 $ — 78,819

Reclassification of currency translation adjustment included in net income (loss) — — — 1,181 — 1,181

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

726 ( 153 ) 573 151 ( 31 ) 120

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

3,997 ( 841 ) 3,156 ( 7,684 ) 1,613 ( 6,071 )

Total other comprehensive (loss) income

$ ( 20,225 ) $ ( 994 ) $ ( 21,219 ) $ 72,467 $ 1,582 $ 74,049

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

Total comprehensive income $ 29,081 $ 76,674

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2021

(In thousands, except par values)

2 unchanged sentences

Shares at $ .01

Capital Earnings Shares Amount Loss Total

Capital Earnings Shares Amount Income (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

2 unchanged sentences

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

Employee shares withheld for taxes

29 ( 1,175 ) ( 1,175 )

2 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 30,889 30,889

Other comprehensive loss ( 256 ) ( 256 )

Issuance of common stock pursuant to stock-based compensation plans

1,436 14 ( 14 ) —

Employee shares withheld for taxes

654 ( 29,858 ) ( 29,858 )

Repurchases of common stock 2,027 ( 89,831 ) ( 89,831 )

Stock-based compensation expense 4,156 4,156

Balance at December 31, 2021 111,004 $ 1,110 $ 1,195,959 $ 741,525 17,673 $ ( 580,508 ) $ ( 94,230 ) $ 1,263,856

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2020

(In thousands, except par values)

2 unchanged sentences

Shares at $ .01

Capital Earnings Shares Amount Loss Total

Capital Earnings Shares Amount Income (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

5 unchanged sentences

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

Employee shares withheld for taxes

20 ( 468 ) ( 468 )

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

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

Stock-based compensation expense 4,367 4,367

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

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 ) —

Employee shares withheld for taxes

38 ( 1,255 ) ( 1,255 )

Repurchase 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

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020

(In thousands)

Three Months Ended September 30,

Six Months Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES

5 unchanged sentences

Deferred income taxes ( 3,271 ) 92

Equity in net income of equity-method investees 526 19

Stock-based compensation 4,287 4,367

Long-lived asset impairment — 32,497

Equity in net loss of equity-method investees 991 1,095

Stock-based compensation, net 8,443 8,190

Long-lived asset and intangibles impairment 303 57,676

Gain on sale of assets ( 8,921 ) —

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:

Other non-cash items, net ( 1,486 ) ( 1,765 )

Increase (decrease) in cash attributable to changes in operating assets and liabilities:

Accounts receivable 12,370 ( 9,523 )

6 unchanged sentences

Purchases of property, plant and equipment ( 27,996 ) ( 29,671 )

Acquisitions of businesses, net of cash acquired ( 254,569 ) —

Investment in joint venture ( 514 ) ( 431 )

6 unchanged sentences

Repayments under bank revolving credit facility ( 330,000 ) ( 137,000 )

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

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

Borrowings under term loan 300,000 —

Payments of other debt, net ( 3,185 ) ( 1,711 )

Share repurchases ( 266,933 ) ( 71,736 )

Net cash used in financing activities from continuing operations

Employee shares withheld for taxes

( 31,033 ) ( 1,723 )

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

208,849 ( 62,170 )

Effect of exchange rate changes on cash from continuing operations ( 3,204 ) 5,734

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

Net increase in cash and cash equivalents 1,331 22,850

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

Cash and cash equivalents at end of period $ 77,202 $ 60,621

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

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

Six Months Ended December 31,

Cash and cash equivalents $ 77,202 $ 46,813

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

Total cash and cash equivalents shown in the Consolidated Statements of Cash Flows $ 77,202 $ 60,621

See notes to consolidated financial statements.

10 unchanged sentences

North America and International.

On December 28, 2021, the Company acquired all outstanding stock of Proven Brands, Inc.

(and its subsidiary That's How We Roll LLC) and KTB Foods Inc., collectively doing business as "That's How We Roll" ("THWR"), the producer and marketer of ParmCrisps ® and Thinsters ® .

See Note 4, Acquisitions and Dispositions, for details.

Discontinued Operations

12 unchanged sentences

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 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.

Operating results for the six months ended December 31, 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.

All amounts in the unaudited consolidated financial statements, notes and tables have been rounded to the nearest thousand, except par values and per share amounts, unless otherwise indicated.

Reclassifications

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

Transfer of Financial Assets

1 unchanged sentence

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 principal amount of receivables sold under these arrangements was $ 64,133 and $ 43,563 during the six months ended December 31, 2021 and 2020, respectively.

The incremental cost of accounts receivable financing arrangements is included in Other income, 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.

1 unchanged sentence

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.

Recently Adopted Accounting Pronouncements

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.

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination on the acquisition date in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, as if it had originated the contracts.

This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value.

The Company adopted ASU 2021-08 during the second quarter of fiscal year 2022, and the adoption did not have an impact on the Company's 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.

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.

3 unchanged sentences

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

Three Months Ended September 30,

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

2021 2020 2021 2020

Net income (loss) from continuing operations $ 30,889 $ 2,151 $ 50,300 $ ( 8,630 )

Net income from discontinued operations — 11,266

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

Net income $ 30,889 $ 2,140 $ 50,300 $ 2,625

2 unchanged sentences

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

772 445 544 —

Diluted weighted average shares outstanding

8 unchanged sentences

Diluted net income per common share $ 0.33 $ 0.02 $ 0.52 $ 0.02

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

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.

There were 316 and 211 restricted stock awards excluded from our calculation of diluted net income per sha re for the three months ended December 31, 2021 and 2020, respectively, as such awards were anti-dilutive.

There were 158 and 709 restricted stock awards and stock options excluded from the calculation of diluted net income (loss) per share for the six months ended December 31, 2021 and 2020, respectively, as such awards were anti-dilutive.

Due to the net loss from continuing operations in the six months ended December 31, 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.

Additionally, 76 and 1,419 stock-based awards outstanding at December 31, 2021 and 2020, respectively, were excluded from the calculation of diluted net income (loss) per share for the three and six months ended December 31, 2021 and 2020, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

Share Repurchase Program

4 unchanged sentences

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 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.

In November 2021, the Company entered into a share repurchase agreement with affiliates of Engaged Capital, LLC (collectively, the “Selling Stockholders”), pursuant to which the Company repurchased 1,700 shares directly from the Selling Stockholders at a price of $ 45.00 per share (see Note 19, Related Party Transactions ).

During the six months ended December 31, 2021, the Company repurchased 6,552 shares under the repurchase program, inclusive of the shares repurchased from the Selling Stockholders, for a total of $ 265,420 , excluding commissions, at an average price of $ 40.50 per share.

As of December 31, 2021, the Company had $ 116,980 of remaining authorization under the share repurchase program.

During the six months ended December 31, 2020, the Company repurchased 2,204 shares under the repurchase program for a total of $ 71,693 ,

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

In January 2022, the Company's Board of Directors authorized the repurchase of up to an additional $ 200,000 of shares, which will commence after the 2021 authorization is fully utilized.

ACQUISITIONS AND DISPOSITIONS

That's How We Roll

On December 28, 2021, the Company acquired all outstanding stock of THWR, the producer and marketer of ParmCrisps ® and Thinsters ® , deepening the Company's position in the snacking category.

Consideration for the transaction consisted of cash, net of cash acquired, totaling $ 260,871 , subject to an adjustment for working capital.

Of the total consideration, $ 254,569 was paid at closing, with the remaining $ 6,302 payable during the third quarter of fiscal 2022.

The acquisition was funded with borrowings under the Credit Agreement (as defined in Note 9, Debt and Borrowings ).

The Company incurred $ 5,103 of transaction costs in connection with the acquisition which were expensed as incurred, and are included as a component of Selling, general and administrative expenses in the Company's Consolidated Statements of Operations for the three and six months ended December 31, 2021.

The following table summarizes the Company's preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date.

The Company expects to finalize the allocation during fiscal 2022.

December 28, 2021

Accounts receivable, net $ 5,107

Inventory 9,871

Prepaid expenses and other current assets 603

Property, plant & equipment 9,225

Identifiable intangible assets 193,800

Operating lease right-of-use assets 4,098

Other assets 166

Deferred income taxes ( 42,362 )

Goodwill 93,629

Accounts payable & accrued expenses ( 9,041 )

Operating lease liabilities ( 4,225 )

The fair values assigned to identifiable intangible assets acquired were based on assumptions and estimates made by management.

Of the $ 193,800 of identifiable intangible assets acquired, $ 70,800 was preliminarily assigned to customer relationships with a weighted average estimated useful life of 17 years, and $ 123,000 was preliminarily assigned to tradenames with indefinite lives.

The goodwill recorded as a result of this acquisition is not expected to be deductible for tax purposes.

Results of THWR are included in the United States operating segment, a component of the North America reportable segment.

THWR's net sales and income from continuing operations before income taxes included in our consolidated results were not material for the three and six months ended December 31, 2021.

The following table provides unaudited pro forma results of continuing operations had the acquisition been completed at the beginning of fiscal 2021.

The proforma information reflects certain adjustments related to the acquisition but does not reflect any potential operating efficiencies or cost savings that may result from the acquisition.

Accordingly, this information has been provided for illustrative purposes only and does not purport to be indicative of the actual results that would have been achieved by the Company for the periods presented or that will be achieved by the combined company in the future.

The pro forma information has been adjusted to give effect to items that are directly attributable to the transactions and are expected to have a continuing impact on the combined results.

Unaudited supplemental pro forma information

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

2021 2020 2021 2020

Net sales $ 500,349 $ 553,114 $ 985,544 $ 1,069,327

Net income (loss) from continuing operations (1)

$ 36,244 $ 1,102 $ 55,669 $ ( 16,478 )

Diluted net income (loss) per common share from continuing operations $ 0.38 $ 0.01 $ 0.58 $ ( 0.16 )

(1) The proforma adjustments include the elimination of transaction costs totaling $ 5,103 from the three and six months ended December 31, 2021 and recognition of those costs in the six months ended December 31, 2020.

GG UniqueFiber ®

2 unchanged sentences

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 .

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 in the fourth quarter of fiscal 2021.

Dream ® and WestSoy ®

3 unchanged sentences

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 .

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 o f $ 7,519 in the fourth quarter of fiscal 2021 .

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 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 Compan y 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, 2020 and December 31, 2020, recognizing a pre-tax non-cash loss for the three and six months ended December 31, 2020 of $ 23,596 and $ 56,093 , respectively, to reduce the carrying value to its estimated fair value 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 during the third quarter of fiscal 2021.

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.

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 .

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 during the first quarter of fiscal 2021.

Discontinued Operations

3 unchanged sentences

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,

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

Net sales $ — $ —

Cost of sales — —

Gross profi t

Gross profit — —

Other expense — 75

Net loss from discontinued operations before income taxes — ( 75 )

Benefit for income taxes (1)

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.

Provision (benefit) for income taxes (1)

11 ( 11,320 )

Net (loss) income from discontinued operations, net of tax $ ( 11 ) $ 11,245

(1) Includes $ 11,331 of tax benefit related to the tax gain on the sale of Tilda for the six months ended December 31, 2020.

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

3 unchanged sentences

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

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,

9 unchanged sentences

$ 320,047 $ 312,777

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 .

Depreciation and amortization expense for the three months ended December 31, 2021 and 2020 was $ 7,244 and $ 7,481 , respectively.

Depreciation and amortization expense for the six months ended December 31, 2021 and 2020 was $ 14,652 and $ 17,184 , respectively.

During the three months ended December 31, 2021, the Company completed the sale of undeveloped land plots in Boulder, Colorado in the United States for total cash proceeds of $ 10,005 , net of brokerage and other fees, resulting in a gain in the amount of $ 8,656 ,which is included as a component of Other income, net.

The Company recognized an impairment charge of $ 303 during the three months ended December 31, 2021 relating to a facility in the United Kingdom.

The facility was held for sale as of December 31, 2021 and June 30, 2021 with a net carrying amount of $ 1,586 and $ 1,874 , respectively.

Further, a facility in the United States was held for sale as of December 31, 2021 with a net carrying amount of $ 1,768 .

During the three months ended December 31, 2020, the Company recorded a non-cash impairment charge of $ 1,333 related to the write-down of building improvements.

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 months ended September 30, 2021 and 2020 were as follows:

Three Months Ended September 30,

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

Three Months Ended Six Months Ended

December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020

Operating lease expenses $ 3,665 $ 4,205 $ 7,417 $ 8,161

3 unchanged sentences

Total lease expenses $ 4,715 $ 5,044 $ 10,305 $ 10,607

Supplemental balance sheet information related to leases was as follows:

Leases Classification December 31, 2021 June 30, 2021

Operating lease ROU assets, net Operating lease right-of-use assets $ 91,739 $ 92,010

Finance lease ROU assets, net Property, plant and equipment, net 519 547

Total leased assets $ 92,258 $ 92,557

Operating Accrued expenses and other current liabilities $ 12,437 $ 10,870

Finance Current portion of long-term debt 206 229

Operating Operating lease liabilities, noncurrent portion 84,219 85,929

Finance Long-term debt, less current portion 324 326

Total lease liabilities $ 97,186 $ 97,354

Additional information related to leases is as follows:

Three Months Ended September 30,

Six Months Ended

December 31, 2021 December 31, 2020

Supplemental cash flow information

6 unchanged sentences

Finance leases $ 116 $ 371

ROU assets obtained in connection with an acquisition (See Note 4):

Operating leases $ 4,098 $ —

Weighted average remaining lease term:

4 unchanged sentences

Finance leases 3.9 % 2.4 %

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 September 30, 2021 were as follows:

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

Fiscal Year Operating leases Finance leases Total

8 unchanged sentences

Total lease liabilities $ 96,656 $ 530 $ 97,186

On December 17, 2021, the Company entered into an operating lease in the United States that has not yet commenced.

Obligations under this lease are approximately $ 41,638 , and the lease is expected to commence during the fourth quarter of fiscal year ending Jun e 30, 2022 with a lease term of 10.5 years, excluding one renewal option.

GOODWILL AND OTHER INTANGIBLE ASSETS

2 unchanged sentences

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

Acquisition activity (See Note 4) 93,629 — 93,629

Translation and other adjustments, net ( 993 ) ( 7,420 ) ( 8,413 )

Balance as of September 30, 2021

Balance as of December 31, 2021

$ 693,448 $ 262,835 $ 956,283

1 unchanged sentence

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

September 30,

2021 June 30,

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Accumulated amortization ( 107,752 ) ( 105,432 )

Net carrying amount $ 308,588 $ 314,895

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.

Net amortized intangible assets 106,871 41,424

Net other intangible assets $ 500,093 $ 314,895

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

See Note 4, Acquisitions and Dispositions , for details surrounding the acquisition of THWR, including $ 193,800 of identifiable intangible assets acquired on December 28, 2021.

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 September 30,

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

2021 2020 2021 2020

Amortization of acquired intangibles $ 2,050 $ 2,193 $ 4,145 $ 4,626

Expected amortization expense over the next five fiscal years is as follows:

Fiscal Year Ending June 30,

2022 (remainder of year) 2023 2024 2025 2026

Estimated amortization expense $ 6,176 $ 11,743 $ 9,175 $ 8,096 $ 7,631

The weighted average remaining amortization period of amortized intangible assets is 13.8 years.

DEBT AND BORROWINGS

Debt and borrowings consisted of the following:

September 30,

2021 June 30,

Revolving credit facility $ 440,000 $ 230,000

Term loans 300,000 —

Unamortized issuance costs ( 1,228 ) —

Other borrowings 675 1,022

2 unchanged sentences

Long-term debt, less current portion $ 731,613 $ 230,492

Credit Agreement

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 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.

The Credit Agreement contains restrictive covenants, which are usual and customary for facilities of its type, and include, with specified exceptions, limitations on the Company’s ability to engage in certain business activities, incur debt, have liens, make capital expenditures, pay dividends or make other distributions, enter into affiliate transactions, consolidate, merge or acquire or dispose of assets, and make certain investments, acquisitions and loans.

The Credit Agreement also requires the Company to satisfy certain financial covenants.

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

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 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 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;

or (b) the Base Rate, as defined in the Credit Agreement, plus a rate ranging from 0.00 % to 1.50 % per annum, the relevant rate being the Applicable Rate.

The Applicable Rate will be determined in accordance with a leverage-based pricing grid, as set forth in the Amended Credit Agreement.

Amended and Restated Credit Agreement

On December 22, 2021, the Company refinanced its revolving credit facility by entering into a Fourth Amended and Restated Credit Agreement (the “Credit Agreement”).

The Credit Agreement provides for senior secured financing of $ 1,100,000 in the aggregate, consisting of (1) $ 300,000 in aggregate principal amount of term loans (the "Term Loans") and (2) an $ 800,000 senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and is comprised of a $ 440,000 U.S.

revolving credit facility and $ 360,000 global revolving credit facility) (the "Revolver").

Both the Revolver and the Term Loans mature on December 22, 2026.

As of December 31, 2021, there were $ 440,000 of loans under the Revolver , $ 300,000 of Term Loans, and $ 6,769 let ters of credit outstanding under the Credit Agreement.

The Credit Agreement provides that loans will bear interest at rates based on (a) the Eurodollar Rate plus a rate ranging from 0.875 % to 1.75 % per annum or (b) the Base Rate plus a rate ranging from 0.00 % to 0.75 % per annum, the relevant rate being the Applicable Rate.

The Applicable Rate will be determined in accordance with a leverage-based pricing grid, as set forth in the Credit Agreement.

Swing Line Loans and Global Swing Line Loans denominated in U.S.

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 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.

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 (a) the Euro Short Term Rate, or €STR, in the case of such loans denominated in Euros plus the Applicable Rate, (b) the Sterling Overnight Index Average Reference Rate, or SONIA, in the case of such loans denominated in Sterling plus the Applicable Rate or (c) the Canadian Prime Rate plus the Applicable Rate.

The weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2021 was 1.45 %.

Additionally, the Credit Agreement contains a Commitment Fee on the amount unused under the Credit Agreement ranging from 0.15 % to 0.25 % per annum, and such Commitment Fee is determined in accordance with a leverage-based pricing grid.

The Credit Agreement includes maintenance covenants that will require compliance with a consolidated interest coverage ratio, a consolidated secured leverage ratio and a consolidated leverage ratio.

As of December 31, 2021, $ 353,231 was available under the Credit Agreement, and the Company was in compliance with all associated covenants.

In connection with the Credit Agreement, the Company and its material domestic subsidiaries entered into an Amended and Restated Security and Pledge Agreement (the “Security Agreement”), pursuant to which all of the obligations under the Credit Agreement will be secured by liens on assets of the Company and its material domestic subsidiaries, including the equity interests in each of their direct subsidiaries and intellectual property, subject to agreed-upon exceptions.

Credit Agreement Issuance Costs

Based on the Company's evaluation of the borrowing capacity associated with the creditors participating in the previous facility compared to those in the Credit Agreement, $ 1,762 of the $ 2,036 of unamortized deferred financing costs at December 22, 2021 were deferred and the remaining $ 274 were expensed as a component of Interest and other financing expense, net.

Additionally, the Company incurred debt issuance costs of approximately $ 2,764 in connection with the Credit Agreement.

Of the total $ 4,526 of deferred debt issuance costs, $ 3,292 were associated with the Revolver and are being amortized on a straight-line basis within Other assets on our Consolidated Balance Sheet, and $ 1,234 are being amortized on a straight-line basis, which approximates the effective interest method, as an adjustment to the carrying amount of the Term Loans as a component of Interest and other financing expense, net over the term of the Credit Agreement.

In general, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes.

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

The effective income tax rate from continuing operations was expense of 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 rate from continuing operations was an expense of 18.6 % and 72.3 % for the three months ended December 31, 2021 and 2020, respectively.

The effective income tax rate from continuing operations was an expense of 18.6 % and 154.3 % for the six months ended December 31, 2021 and 2020, respectively.

The effective income tax rate from continuing operations for the six months ended December 31, 2021 was impacted by the reversal of uncertain tax position accruals based on filing and approval of certain elections by taxing authorities, deductions related to stock based compensation, non-deductible transaction costs related to the acquisition of THWR (see Note 4, Acquisitions and Dispositions ), and the reversal of a valuation allowance due to the utilization of a capital loss carryover.

The effective income tax rate from continuing operations for the six months ended December 31, 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.

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 income tax expense (benefit) from discon tinued operations was nil for the three and six months ended December 31, 2021 , while the income tax from discontinued operations was a benefit of $ 11 and a benefit of $ 11,320 for the three and six months ended December 31, 2020, respectively.

The benefit for income tax for the six months ended December 31, 2020 was impacted by a legal entity reorganization.

ACCUMULATED OTHER COMPREHENSIVE LOSS

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

Three Months Ended September 30,

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

2021 2020 2021 2020

Foreign currency translation adjustments:

2 unchanged sentences

Deferred gains (losses) on cash flow hedging instruments:

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

Amounts reclassified into (expense) income (2)

Amount of gain (loss) recognized in AOCL on derivatives (2)

1,002 ( 906 ) 1,537 ( 1,789 )

Amount of (loss) gain reclassified from AOCL into expense (2)

( 464 ) 986 ( 964 ) 1,909

Deferred gains (losses) on net investment hedging instruments:

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

Amounts reclassified into expense (2)

Amount of gain (loss) recognized in AOCL on derivatives (2)

1,460 ( 2,980 ) 3,370 ( 5,870 )

Amount of gain reclassified from AOCL into income (2)

( 111 ) ( 99 ) ( 214 ) ( 201 )

Net change in AOCL $ ( 256 ) $ 43,044 $ ( 21,219 ) $ 74,049

(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.

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.

During the six months ended December 31, 2020, the Company reclassified $ 1,181 of translation losses from AOCL to Other income, net on the Consolidated Statement of Operations.

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

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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” or "LTIP") that provides for equity awards, including performance and market-based 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 September 30,

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

2021 2020 2021 2020

Selling, general and administrative expense

4 unchanged sentences

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

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

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

Number of Shares

5 unchanged sentences

Forfeited ( 108 ) $ 16.41

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,

Non-vested RSAs, RSUs and PSUs outstanding at December 31, 2021 949 $ 41.94

The table above includes a total of 183 shares granted during the six months ended December 31, 2021 that represent the target number of shares that may be earned based on pre-defined market conditions that are eligible to vest ranging from zero to 200 % of target.

All such shares remained outstanding at December 31, 2021 and relate to the 2022-2024 LTIP as further described below.

Granted shares also include 15 shares that may be earned based on certain performance-based metrics being met.

Vested shares during the six months ended December 31, 2021 include a total of 1,299 shares under the 2019-2021 LTIP that vested at 100 % of target based on achievement of target absolute total shareholder return ("TSR") levels, and a total of 13 shares granted in a previous period that vested based on certain performance-based metrics being met.

The fair value of RSAs, RSUs and PSUs granted and of shares vested, and the tax benefit recognized from restricted shares vesting was as follows:

Six Months Ended December 31,

Fair value of RSAs, RSUs and PSUs granted $ 34,678 $ 6,101

1 unchanged sentence

Tax benefit recognized from restricted shares vesting $ 3,532 $ 939

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.

At December 31, 2021, there was $ 34,665 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 2.4 years.

2022-2024 LTIP

During the three months ended December 31, 2021, the Company granted market-based PSU awards under the LTI Program with a total target payout of 183 shares of common stock.

Vesting is pursuant to a defined calculation of either relative TSR or absolute TSR (as defined) over the period from November 18, 2021 through the earlier of (i) November 17, 2024;

(ii) the date the participant’s employment is terminated due to death or Disability (as defined);

or (iii) the effective date of a Change in Control (as defined) (the “TSR Performance Period”).

Vesting of 123 target shares of the PSU awards is pursuant to a defined calculation of relative TSR over the TSR Performance Period (the “Relative TSR PSUs”).

Vesting of 60 target shares of the PSU awards is pursuant to the achievement of pre-established three-year compound annual TSR targets over the TSR Performance Period (the “Absolute TSR PSUs”).

Total shares eligible to vest for both the Relative TSR PSUs and Absolute TSR PSUs range from zero to 200 % of the target amount.

Grant date fair values are calculated using a Monte-Carlo simulation model with grant date fair values per target share and related valuation assumptions as follows:

Absolute TSR PSUs Relative TSR PSUs

Grant date fair value (per target share) $ 39.51 $ 60.99

Risk-free interest rate 0.84 % 0.84 %

Expected dividend yield — —

Expected volatility 36.90 % 24.20 %

Expected term 3.00 years 3.00 years

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.

Founders Table owns and operates the fast-casual restaurant chains Chop't Creative Salad Co.

and Dos Toros Taqueria.

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

At 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.

At December 31, 2021 and June 30, 2021, the carrying value of the Company’s investment in Founders Table was $ 9,810 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 (“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.

(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 $ 6,599 and $ 6,218 as of December 31, 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 September 30, 2021:

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

Derivative financial instruments $ 1,324 $ — $ 1,324 $ —

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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 three months ended September 30, 2021 or 2020.

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

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

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

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

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 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.

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

As a result, all of the derivatives held as of December 31, 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 December 31, 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 months ended September 30, 2021, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

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

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

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

During the remaining 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:

During the remaining six months of fiscal 2022, the Company estimates that an additional $ 35 will be reclassified as an increase to interest expense.

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

Interest Rate Derivative Number of Instruments Notional Amount

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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 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:

During the remaining six months of fiscal 2022, the Company estimates that an additional $ 88 relating to cross-currency swaps will be reclassified as an increase to interest income.

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

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

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

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

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

3 unchanged sentences

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

As of 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 September 30, 2021:

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

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

Asset Derivatives Liability Derivatives

3 unchanged sentences

Cross-currency swaps Prepaid expenses and other current assets 728 Other noncurrent liabilities 6,452

Foreign currency forward contracts Prepaid expenses and other current assets — Other noncurrent liabilities 77

Total derivatives designated as hedging instruments $ 1,324 $ 6,529

6 unchanged sentences

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

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,

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

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

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

2021 2020 2021 2020

3 unchanged sentences

Total $ 1,267 $ ( 1,147 ) $ 585 $ ( 1,248 )

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

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL and Consolidated Statements of Operations as of the six months ended December 31, 2021 and 2020:

Six Months Ended December 31,

2021 2020 2021 2020

Interest rate swaps $ 655 $ 123 Interest and other financing expense, net $ ( 209 ) $ ( 130 )

Cross-currency swaps 1,369 ( 2,386 ) Interest and other financing expense, net / Other expense (income), net 1,402 ( 2,359 )

Foreign currency forward contracts ( 79 ) ( 2 ) Cost of sales 26 73

Total $ 1,945 $ ( 2,265 ) $ 1,219 $ ( 2,416 )

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

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020

Three Months Ended December 31, 2021 Three Months Ended December 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

2 unchanged sentences

Interest rate swaps

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

Amount of (loss) gain reclassified from AOCL into income $ — $ ( 105 ) $ — $ — $ ( 72 ) $ —

Cross-currency swaps

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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 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,

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

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

Six Months Ended December 31, 2021

Six Months Ended December 31, 2020

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

The effects of cash flow hedging:

Gain (loss) on cash flow hedging relationships

Interest rate swaps

Amount of (loss) gain reclassified from AOCL into income $ — $ ( 209 ) $ — $ — $ ( 130 ) $ —

Cross-currency swaps

Amount of gain (loss) reclassified from AOCL into income $ — $ 85 $ 1,317 $ — $ 81 $ ( 2,440 )

Foreign currency forward contracts

Amount of (loss) gain reclassified from AOCL into income $ 26 $ — $ — $ 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 December 31, 2021 and 2020:

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

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

2021 2020 2021 2020

Cross-currency swaps $ 1,849 $ ( 3,772 ) Interest and other financing expense, net $ 140 $ 125

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 as of September 30, 2021 and 2020:

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

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

2021 2020 2021 2020

Cross-currency swaps $ 4,267 $ ( 7,430 ) Interest and other financing expense, net $ 270 $ 254

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 September 30,

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

Three Months Ended December 31,

Foreign currency forward contracts Other (income) expense, net $ — $ ( 523 )

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

Six Months Ended December 31,

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

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 September 30, 2021:

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

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

Balance at June 30, 2021 Charges (Reversals) Amounts Paid Foreign Currency Translation & Other Adjustments Balance at December 31, 2021

Termination benefits and personnel realignment $ 4,448 $ 884 $ ( 4,005 ) $ ( 21 ) $ 1,306

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.

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

COMMITMENTS AND CONTINGENCIES

Securities Class Actions Filed in Federal Court

On August 17, 2016, three securities class action complaints were filed in the Eastern District of New York against the Company alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

On August 17, 2016, three securities class action complaints were filed in the Eastern District of New York (the "District Court") against the Company alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

The three complaints are:

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(the “Spadola Complaint” and, together with the Flora and Lynn Complaints, the “Securities Complaints”).

On June 5, 2017, the court issued an order for consolidation, appointment of Co-Lead Plaintiffs and approval of selection of co-lead counsel.

On June 5, 2017, the District Court issued an order for consolidation, appointment of Co-Lead Plaintiffs and approval of selection of co-lead counsel.

Pursuant to this order, the Securities Complaints were consolidated under the caption In re The Hain Celestial Group, Inc.

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The Amended Complaint named as defendants the Company and certain of its former officers (collectively, “Defendants”) and asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls.

Defendants filed a motion to dismiss the Amended Complaint on October 3, 2017 which the Court granted on March 29, 2019, dismissing the case in its entirety, without prejudice to replead.

Defendants filed a motion to dismiss the Amended Complaint on October 3, 2017 which the District Court granted on March 29, 2019, dismissing the case in its entirety, without prejudice to replead.

Co-Lead Plaintiffs filed a Second Amended Consolidated Class Action Complaint on May 6, 2019 (the “Second Amended Complaint”).

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Defendants filed a motion to dismiss the Second Amended Complaint on June 20, 2019.

Co-Lead Plaintiffs filed an opposition on August 5, 2019, and Defendants submitted a reply on September 3, 2019.

On April 6, 2020, the Court granted Defendants' motion to dismiss the Second Amended Complaint in its entirety, with prejudice.

Co-Lead Plaintiffs filed a notice of appeal on May 5, 2020 indicating their intent to appeal the Court’s decision dismissing the Second Amended Complaint to the United States Court of Appeals for the Second Circuit.

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

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

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

Oral argument took place on September 27, 2021.

The parties await a decision.

On April 6, 2020, the District Court granted Defendants' motion to dismiss the Second Amended Complaint in its entirety, with prejudice.

Co-Lead Plaintiffs appealed the District Court’s decision dismissing the Second Amended Complaint to the United States Court of Appeals for the Second Circuit (the "Second Circuit").

By decision dated December 17, 2021, the Second Circuit vacated the District Court’s judgment and remanded the case for further proceedings.

Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court

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The complaint also alleged that the Company violated its by-laws and Delaware law by failing to hold its 2016 Annual Stockholders Meeting and includes claims for breach of fiduciary duty, unjust enrichment and corporate waste.

On August 9, 2017, the Court granted an order to unseal this case and reveal Gary Merenstein as the plaintiff (the “Merenstein Complaint”).

On August 10, 2017, the court granted the parties' stipulation to consolidate the Barnes Complaint, the Silva Complaint and the Merenstein Complaint under the caption In re The Hain Celestial Group, Inc.

On August 9, 2017, the District Court granted an order to unseal this case and reveal Gary Merenstein as the plaintiff (the “Merenstein Complaint”).

On August 10, 2017, the District Court granted the parties' stipulation to consolidate the Barnes Complaint, the Silva Complaint and the Merenstein Complaint under the caption In re The Hain Celestial Group, Inc.

Stockholder Class and Derivative Litigation (the “Consolidated Stockholder Class and Derivative Action”) and to appoint Robbins Arroyo LLP and Scott+Scott as Co-Lead Counsel, with the Law Offices of Thomas G.

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On December 20, 2017, the parties agreed to stay Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through and including 30 days after a decision was rendered on the motion to dismiss the Amended Complaint in the Consolidated Securities Action, described above.

On March 29, 2019, the Court in the Consolidated Securities Action granted Defendants’ motion, dismissing the Amended Complaint in its entirety, without prejudice to replead.

On March 29, 2019, the District Court in the Consolidated Securities Action granted Defendants’ motion, dismissing the Amended Complaint in its entirety, without prejudice to replead.

Co-Lead Plaintiffs in the Consolidated Securities Action filed the Second Amended Complaint on May 6, 2019.

The parties to the Consolidated Stockholder Class and Derivative Action agreed to continue the stay of Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through 30 days after a decision on Defendants' motion to dismiss the Second Amended Complaint in the Consolidated Securities Action.

On April 6, 2020, the Court granted Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action, with prejudice.

On April 6, 2020, the District Court granted Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action, with prejudice.

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.

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

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

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

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

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

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

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

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

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

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

The Parties then filed a number of additional joint status reports, requesting that the District Court continue the stay of applicable deadlines through December 30, 2021.

In light of the Second Circuit vacating the District Court’s judgment in the Consolidated Securities Action referenced above and remanding the case for further proceedings, the Parties submitted a joint status report on December 29, 2021 requesting that the District C ourt continue the temporary stay pending the District Court’s reconsideration of the Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action.

The District Court has extended the temporary stay through December 30, 2022.

Baby Food Litigation

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

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

Beech-Nut Nutrition Co., et.

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

Beech-Nut Nutrition Co., et al.

) filed in the U.S.

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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.

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

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

2:21-cv-678 (the "Consolidated Proceeding").

The Eastern District of New York has appointed interim class counsel for the plaintiffs in the Consolidated Proceeding, and the plaintiffs’ consolidated complaint is due in February 2022.

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 has moved to stay or transfer this case to the Consolidated Proceeding 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 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.

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.

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

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

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

SEGMENT INFORMATION

Our organization structure consist of two geographic based reportable segments:

Our organization structure consists of two geographic based reportable segments:

North America and International.

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Transactions between reportable segments were insignificant for all periods presented.

Three Months Ended September 30,

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

2021 2020 2021 2020

North America $ 275,014 $ 282,612 $ 540,539 $ 563,280

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$ 32,021 $ 12,957 $ 57,568 $ 16,237

(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.

(a) In addition to general Corporate and Other expenses as described above, for the three and six months ended December 31, 2021, Corporate and Other included $ 953 and $ 3,010 of Productivity and transformation costs, respectively.

For the three and six months ended December 31, 2020, Corporate and Other included $ 2,735 and $ 3,538 of Productivity and transformation costs, respectively.

The Company's net sales by product category (1) are as follows:

Three Months Ended September 30,

Grocery $ 301,553 $ 343,749

Snacks 85,892 81,159

Personal Care 40,366 48,982

Tea 27,092 24,737

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

2021 2020 2021 2020

Turbocharge $ 178,328 $ 169,816 $ 349,626 $ 351,578

Targeted Investment 163,989 176,154 326,565 334,429

Fuel 107,252 114,531 204,506 210,546

Simplify 27,372 67,917 51,147 130,492

Total $ 476,941 $ 528,418 $ 931,844 $ 1,027,045

(1) The Turbocharge brands are made up of plant-based meat and non-dairy beverages as well as snacks.

The Targeted Investment brands are made up of tea, baby, yogurt, and personal care.

Fuel brands are made up of pantry brands in categories such as soup, cooking oils and nut butters.

The Simplify brands include all other brands.

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 September 30,

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

2021 2020 2021 2020

United States $ 243,909 $ 244,344 $ 477,396 $ 484,060

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Total $ 476,941 $ 528,418 $ 931,844 $ 1,027,045

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,

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

2021 June 30,

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

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

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

SunOpta was historically also one of the Company’s suppliers, for which the Company incurred expenses in the ordinary course of business.

The Company incurred expenses of $ 0 and $ 4,366 in the three months ended December 31, 2021 and 2020, respectively, to SunOpta and affiliated entities.

For the six months ended December 31, 2021 and 2020, the Company incurred expenses of $ 220 and $ 9,156 , respectively, to SunOpta and affiliated entities.

On November 9, 2021, the Company entered into a share repurchase agreement with Engaged Capital Co-Invest VI, LP, Engaged Capital Co-Invest VI-B, LP, Engaged Capital Co-Invest VI-C, LP, Engaged Capital Co-Invest VI-D, LP and Engaged Capital Co-Invest VI-E, LP (collectively, the “Selling Stockholders”), which are affiliates of Engaged Capital, LLC, pursuant to which the Company agreed to repurchase, directly from the Selling Stockholders, 1,700 shares of the Company’s common stock for $ 45.00 per share (the "Share Repurchase") , which equals the price at which the Underwriter (as defined below) purchased shares from the Selling Stockholders, net of underwriting commissions and discounts, in an underwritten public offering that launched on November 10, 2021, whereby the Selling Stockholders sold certain other shares of common stock (the “Offering”).

In connection with the Offering, on November 10, 2021, the Company entered into an underwriting agreement with Morgan Stanley & Co.

LLC, as underwriter (the “Underwriter”), and the Selling Stockholders.

The Share Repurchase and the Offering were completed on November 15, 2021.

The aggregate price paid by the Company for the Share Repurchase was $ 76,500 (see Note 3, Earnings (Loss) per Share ), which the Company funded with borrowings under its revolving credit facility.

The Company did not receive any proceeds from the Offering.

The Founder and Chief Investment Officer of Engaged Capital, LLC is a member of the Company's Board of Directors.

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