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Item 1. Financial Statements

2022-05-05 compared with 2022-02-03 · 235 added, 206 removed, 749 unchanged (37% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

DECEMBER 31, 2021 AND JUNE 30, 2021

MARCH 31, 2022 AND JUNE 30, 2021

(In thousands, except par values)

December 31, June 30,

March 31, June 30,

Current assets:

10 unchanged sentences

Investments and joint ventures 16,056 16,917

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

Operating lease right-of-use assets, net 88,636 92,010

Other assets 20,619 21,187

30 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022 AND 2021

(In thousands, except per share amounts)

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

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

2022 2021 2022 2021

8 unchanged sentences

— ( 592 ) ( 196 ) ( 592 )

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

Long-lived asset and intangibles impairment — — 303 57,676

Operating income 35,164 49,577 92,732 65,814

Interest and other financing expense, net 3,224 2,030 7,672 6,820

Other income, net ( 9,070 ) ( 1,045 ) ( 9,858 ) ( 2,418 )

Income from continuing operations before income taxes and equity in net loss of equity-method investees 38,499 11,665 62,978 13,865

Other (income) expense, net ( 712 ) 1,566 ( 10,570 ) ( 852 )

Income from continuing operations before income taxes and equity in net loss (income) of equity-method investees 32,652 45,981 95,630 59,846

Provision for income taxes 7,738 11,797 19,425 33,197

Equity in net loss of equity-method investees 465 1,076 991 1,095

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

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

Equity in net loss (income) of equity-method investees 383 ( 70 ) 1,374 1,025

Net income from continuing operations $ 24,531 $ 34,254 $ 74,831 $ 25,624

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

Net income $ 24,531 $ 34,254 $ 74,831 $ 36,879

Net income (loss) per common share:

Basic net income (loss) per common share from continuing operations $ 0.33 $ 0.02 $ 0.53 $ ( 0.09 )

Net income per common share:

Basic net income per common share from continuing operations $ 0.27 $ 0.34 $ 0.80 $ 0.25

Basic net income per common share from discontinued operations — — — 0.11

Basic net income per common share $ 0.27 $ 0.34 $ 0.80 $ 0.36

Diluted net income (loss) per common share from continuing operations $ 0.33 $ 0.02 $ 0.52 $ ( 0.09 )

Diluted net income per common share from continuing operations $ 0.27 $ 0.34 $ 0.79 $ 0.25

Diluted net income per common share from discontinued operations — — — 0.11

Diluted net income per common share $ 0.27 $ 0.34 $ 0.79 $ 0.36

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

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

Basic 91,139 99,831 94,099 100,502

4 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( LOSS) (UNAUDITED)

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

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022 AND 2021

(In thousands)

Three Months Ended

December 31, 2021 December 31, 2020

March 31, 2022 March 31, 2021

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

3 unchanged sentences

Foreign currency translation adjustments before reclassifications $ ( 18,701 ) $ — ( 18,701 ) $ 1,672 $ — 1,672

Reclassification of currency translation adjustment included in net loss from discontinued operations, net of tax — — — 14,725 — 14,725

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

2 unchanged sentences

1,426 ( 299 ) 1,127 3,810 ( 800 ) 3,010

Total other comprehensive income (loss)

Total other comprehensive (loss) income

$ ( 15,434 ) $ ( 686 ) $ ( 16,120 ) $ 20,529 $ ( 868 ) $ 19,661

Total comprehensive income $ 8,411 $ 53,915

Six Months Ended

December 31, 2021 December 31, 2020

Nine Months Ended

March 31, 2022 March 31, 2021

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

3 unchanged sentences

Foreign currency translation adjustments before reclassifications $ ( 43,649 ) $ — ( 43,649 ) $ 80,491 $ — 80,491

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

Reclassification of currency translation adjustment included in net income — — — 15,906 — 15,906

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

9 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2021

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022

(In thousands, except par values)

2 unchanged sentences

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

16 unchanged sentences

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

Net income 24,531 24,531

Other comprehensive loss $ ( 16,120 ) ( 16,120 )

Issuance of common stock pursuant to stock-based compensation plans

Employee shares withheld for taxes

40 ( 1,597 ) ( 1,597 )

Repurchases of common stock 3,574 ( 130,472 ) ( 130,472 )

Stock-based compensation expense 3,846 3,846

Balance at March 31, 2022 111,087 $ 1,111 $ 1,199,804 $ 766,056 21,287 $ ( 712,577 ) $ ( 110,350 ) $ 1,144,044

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2020

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021

(In thousands, except par values)

24 unchanged sentences

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 ) —

Employee shares withheld for taxes

49 ( 2,018 ) ( 2,018 )

Repurchase 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 STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 AND 2020

FOR THE NINE MONTHS ENDED MARCH 31, 2022 AND 2021

(In thousands)

Six Months Ended December 31,

Nine Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

Net income from discontinued operations — 11,255

Net income (loss) from continuing operations 50,300 ( 8,630 )

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

Net income from continuing operations 74,831 25,624

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

Depreciation and amortization 34,396 37,768

4 unchanged sentences

Gain on sale of assets ( 8,869 ) —

Loss on sale of businesses — 1,217

Other non-cash items, net ( 2,155 ) ( 723 )

11 unchanged sentences

Proceeds from sale of assets 10,756 —

Proceeds from sale of businesses and other — 4,858

Proceeds from sale of businesses, net and other — 27,788

Net cash used in investing activities from continuing operations

4 unchanged sentences

Borrowings under term loan 300,000 —

Repayments under term loan ( 1,875 ) —

Payments of other debt, net ( 3,232 ) ( 1,917 )

5 unchanged sentences

Effect of exchange rate changes on cash from continuing operations ( 5,836 ) 5,650

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

Net (decrease) increase in cash and cash equivalents ( 18,063 ) 15,243

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

Cash and cash equivalents at end of period $ 57,808 $ 53,014

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.

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Discontinued Operations

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

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

All footnotes exclude discontinued operations unless otherwise noted.

10 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 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.

Operating results for the nine months ended March 31, 2022 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.

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 $ 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.

Significant Accounting Policies

1 unchanged sentence

Included herein are certain updates to those policies.

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 receivable in their entirety to the buyers and satisfied all of the conditions to re port the transfer of financial assets in their entirety as a sale.

The principal amount of receivables sold under these arrangements was $ 112,607 and $ 59,871 during the nine months ended March 31, 2022 and 2021, respectively.

The incremental cost

of accounts receivable financing arrangeme nts is included in Other (income) expense, net in the Company’s Consolidated Statements of Operations.

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

Recently Adopted Accounting Pronouncements

4 unchanged sentences

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.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions for applying U.S.

GAAP 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.

4 unchanged sentences

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 December 31, Six Months Ended December 31,

EARNINGS PER SHARE

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

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

2022 2021 2022 2021

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

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

Net income from continuing operations $ 24,531 $ 34,254 $ 74,831 $ 25,624

Net income from discontinued operations — — — 11,255

Net income $ 24,531 $ 34,254 $ 74,831 $ 36,879

5 unchanged sentences

91,310 101,596 94,519 101,385

Basic net income (loss) per common share:

Basic net income per common share:

Continuing operations $ 0.27 $ 0.34 $ 0.80 $ 0.25

1 unchanged sentence

Basic net income per common share $ 0.27 $ 0.34 $ 0.80 $ 0.36

Diluted net income (loss) per common share:

Diluted net income per common share:

Continuing operations $ 0.27 $ 0.34 $ 0.79 $ 0.25

1 unchanged sentence

Diluted net income per common share $ 0.27 $ 0.34 $ 0.79 $ 0.36

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.

There were 508 and 4 restricted stock awards excluded from our calculation of diluted net income per sha re for the three months ended March 31, 2022 and 2021, respectively, as such awards were anti-dilutive.

There were 275 and 182 restricted stock awards excluded from the calculation of diluted net income per share for the nine months ended March 31, 2022 and 2021, respectively, as such awards were anti-dilutive.

Additionally, 231 and 23 stock-based awards outstanding at March 31, 2022 and 2021, respectively, were excluded from the calculation of diluted net income per share for the three months ended March 31, 2022 and 2021, 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 541 and 957 stock-based awards outstanding at March 31, 2022 and 2021, respectively, that were excluded from the calculation of diluted net income per share for the nine months ended March 31, 2022 and 2021, respectively, as such awards were contingently issuable based on market or performance conditions.

Share Repurchase Program

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.

In June 2017, August 2021 and January 2022, the Company's Board of Directors authorized the repurchase of up to $ 250,000 , $ 300,000 and $ 200,000 of the Company’s issued and outstanding common stock, respectively.

Share repurchases under the 2021 and 2022 authorizations commenced after the previous authorizations were 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.

The authorization does not have a stated expiration date.

The current 2022 authorization does not have a stated expiration date.

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

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.

During the nine months ended March 31, 2022, the Company repurchased 10,126 shares under the repurchase program, inclusive of the shares repurchased from the Selling Stockholders, for a total of $ 395,821 , excluding commissions, at an average price of $ 39.09 per share.

As of March 31, 2022, the Company had $ 186,579 of remaining authorization under the share repurchase program.

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.

ACQUISITIONS AND DISPOSITIONS

2 unchanged sentences

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.

Of the total consideration, $ 260,474 was paid with the remaining $ 397 payable as of March 31, 2022.

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

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

March 31, 2022

Accounts receivable, net $ 5,107

13 unchanged sentences

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.

THWR's net sales included in our consolidated results were 5.0 % and 1.8 % of consolidated net sales for the three and nine months ended March 31, 2022.

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

3 unchanged sentences

Unaudited supplemental pro forma information

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

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

2022 2021 2022 2021

Net sales $ 502,939 $ 514,867 $ 1,488,483 $ 1,584,194

Net income (loss) from continuing operations (1)

Net income from continuing operations (1)

$ 26,970 $ 30,927 $ 81,415 $ 26,929

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.

Diluted net income per common share from continuing operations $ 0.30 $ 0.30 $ 0.86 $ 0.27

(1) The pro forma adjustments include the elimination of transaction costs totaling $ 5,103 from the nine months ended March 31, 2022 and recognition of those costs in the nine months ended March 31, 2021.

Additionally, the pro forma adjustments include the elimination of integration costs and a fair value inventory adjustment totaling $ 1,500 and $ 1,800 , respectively, for the three and nine months ended March 31, 2022 and recognition of those costs in the three and nine months ended March 31, 2021.

GG UniqueFiber ®

11 unchanged sentences

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 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 Fruit business operated in the U.K.

and was part of the Company’s International reportable segment.

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 to reduce the carrying value to its estimated fair value less costs to sell of $ 56,093 during the nine months ended March 31, 2021.

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, 2 020.

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.

The Company deconsolidated th e 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

2 unchanged sentences

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 from discontinued operations, net of tax in our Consolidated Statements of Operations:

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

Net income from discontinued operations, net of tax in our Consolidated Statements of Operations was nil for the three months ended March 31, 2022 and 2021 as well as for the nine months ended March 31, 2022.

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 for the nine months ended March 31, 2021:

Nine Months Ended March 31,

Net sales $ —

3 unchanged sentences

Net loss from discontinued operations before income taxes ( 75 )

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.

Benefit for income taxes (1)

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

(1) Includes $ 11,320 of tax benefit related to the legal entity reorganization for the nine months ended March 31, 2021.

There wer e no asse ts or liabilities from discontinued operations associated with Tilda as of March 31, 2022 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.

18 unchanged sentences

$ 312,819 $ 312,777

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.

Depreciation and amortization expense for the three months ended March 31, 2022 and 2021 was $ 8,292 and $ 9,118 , respectively.

Depreciation and amortization expense for the nine months ended March 31, 2022 and 2021 was $ 22,944 and $ 26,302 , respectively.

During the nine months ended March 31, 2022, 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) expense, net in our Consolidated Statement of Operations.

The Compan y recognized an impairment charge of $ 303 during the nine months ended March 31, 2022 relating to a facility in the United Kingdom.

The facility was held for sale as of March 31, 2022 and June 30, 2021 with a net carrying amount of $ 1,545 and $ 1,874 , respectively.

Further, a facility in the United States was held for sale as of March 31, 2022 with a net carrying amount of $ 1,768 .

During the nine months ended March 31, 2021, 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.

2 unchanged sentences

The Company’s lease agreements generally do not contain residual value guarantees or material restrictive covenants.

A limited number of lease agreements include rental payments adjusted periodically for inflation.

Some of the Company’s leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate.

2 unchanged sentences

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

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

Three Months Ended Six Months Ended

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

The components of lease expenses for the three and nine months ended March 31, 2022 and 2021 were as follows:

Three Months Ended Nine Months Ended

March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021

Operating lease expenses $ 4,155 $ 4,129 $ 11,572 $ 12,290

4 unchanged sentences

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

Leases Classification March 31, 2022 June 30, 2021

Operating lease ROU assets, net Operating lease right-of-use assets, net $ 88,636 $ 92,010

Finance lease ROU assets, net Property, plant and equipment, net 466 547

6 unchanged sentences

Additional information related to leases is as follows:

Six Months Ended

December 31, 2021 December 31, 2020

Nine Months Ended

March 31, 2022 March 31, 2021

Supplemental cash flow information

14 unchanged sentences

Finance leases 4.0 % 3.9 %

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

Maturities of lease liabilities as of March 31, 2022 were as follows:

Fiscal Year Operating leases Finance leases Total

9 unchanged sentences

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.

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

GOODWILL AND OTHER INTANGIBLE ASSETS

4 unchanged sentences

Translation and other adjustments, net ( 9 ) ( 14,308 ) ( 14,318 )

Balance as of December 31, 2021

Balance as of March 31, 2022

$ 694,874 $ 255,947 $ 950,820

9 unchanged sentences

Net other intangible assets $ 492,939 $ 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.

There were no events or circumstances that warranted an interim impairment test for indefinite-lived intangible assets during the three and nine months ended March 31, 2022 or 2021.

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.

1 unchanged sentence

Amortization expense included in continuing operations was as follows:

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

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

2022 2021 2022 2021

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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.

As of March 31, 2022 , there were $ 538,000 of loans under the Revolver, $ 298,125 of Term Loans, and $ 8,919 letters 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.

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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 (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 weighted average interest rate on outstanding borrowings under the Credit Agreement at March 31, 2022 was 1.67 %.

Add itionally, 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.

As of March 31, 2022 , $ 253,081 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 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 rate from continuing operations was an expense of 23.7 % and 25.7 % for the three months ended March 31, 2022 and 2021, respectively.

The effective income tax rate from continuing operations was an expense of 20.3 % and 55.5 % for the nine months ended March 31, 2022 and 2021, respectively.

The effective income tax rate from continuing operations for the nine months ended March 31, 2022 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 ), the reversal of a valuation allowance due to the utilization of a capital loss carryover and the finalization of fiscal year 2021 U.S.

income tax returns.

The effective income tax rate from continuing operations for the nine months ended March 31, 2021 was negatively impacted by various discrete items including the tax impact of the United Kingdom Fruit business reserve, the legal entity reorganization, and the U.K.

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 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.

T he income tax benefit from d iscon tinued operations was nil for the three and nine months ended March 31, 2022 , while the income tax from discontinued operations was nil and a benefit of $ 11,320 for the three and nine months ended March 31, 2021, respectively.

The benefit for income tax for the nine months ended March 31, 2021 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 December 31, Six Months Ended December 31,

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

2022 2021 2022 2021

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Amounts reclassified into income (1)

— 14,725 — 15,906

Deferred gains (losses) on cash flow hedging instruments:

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2,007 1,168 3,544 ( 621 )

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

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

( 553 ) ( 914 ) ( 1,517 ) 995

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1,240 3,107 4,610 ( 2,763 )

Amount of gain reclassified from AOCL into income (2)

Amount of loss reclassified from AOCL into expense (2)

( 113 ) ( 97 ) ( 327 ) ( 298 )

Net change in AOCL $ ( 16,120 ) $ 19,661 $ ( 37,339 ) $ 93,710

(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 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.

(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 and six months ended December 31, 2021 and 2020.

During the three and nine months ended March 31, 2021, the Company reclassified $ 14,725 and $ 15,906 of translatio n losses, respectively, from AOCL to Other income, net on the Consolidated Statements of Operations.

(2) See Note 15, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains (losses) on cash flow and net investment hedging instruments recorded in the Consolidated Statements of Operations in the three and nine months ended March 31, 2022 and 2021.

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

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

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

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

2022 2021 2022 2021

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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 six months ended December 31, 2021 is as follows:

A summary of the restricted stock activity (including all RSAs, RSUs and PSUs) for the nine months ended March 31, 2022 is as follows:

Number of Shares

and Units Weighted

Average Grant

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Forfeited ( 158 ) $ 25.26

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.

Non-vested RSAs, RSUs and PSUs outstanding at March 31, 2022 871 $ 43.54

The table above includes a total of 190 shares granted during the nine months ended March 31, 2022 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 relate to the 2022-2024 LTIP as further described below.

Granted shares also include 56 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.

Vested shares during the nine months ended March 31, 2022 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,

Nine Months Ended March 31,

Fair value of RSAs, RSUs and PSUs granted $ 37,005 $ 7,298

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Tax benefit recognized from restricted shares vesting $ 3,643 $ 1,786

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.

At March 31, 2022, there was $ 29,787 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 2.2 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.

During the nine months ended March 31, 2022, the Company granted market-based PSU awards under the LTI Program with a total target payout of 190 shares of common stock.

At March 31, 2022, 175 of such shares were outstanding.

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;

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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”).

Vesting of 117 target shares of the outstanding PSU awards is pursuant to a defined calculation of relative TSR over the TSR Performance Period (the “Relative TSR PSUs”).

Vesting of 58 target shares of the outstanding 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.

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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 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.

At March 31, 2022 and June 30, 2021, the carrying value of the Company’s investment in Founders Table was $ 9,808 a nd $ 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 $ 6,599 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.

(a) Hutchison Hain Organic Holdings Limited, a joint venture with HUTCHMED (China) Limited, 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 whi ch the Company holds a less than 1 % equity ownership interest.

The carrying value of these combined investments was $ 6,248 and $ 6,218 as of March 31, 2022 and June 30, 2021, respectively, and is included in the Consolidated Balance Sheets a s 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 December 31, 2021:

The following table presents assets and liabilities measured at fair value on a recurring basis as of March 31, 2022:

Derivative financial instruments $ 2,698 $ — $ 2,698 $ —

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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 six months ended December 31, 2021 or 2020.

There were no transfers of financial instruments between the three levels of fair value hierarchy during the nine months ended March 31, 2022 or 2021.

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.

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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.

As a result, all of the derivatives held as of March 31, 2022 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 March 31, 2022 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 six months ended December 31, 2021, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

During the three and nine months ended March 31, 2022 and 2021, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

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

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

During the remaining six months of fiscal 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:

Amounts reported in AOCL related to derivatives will be reclassified to interest expense as interest payments are made on the Compan y’s variable rate debt.

During the remaining three months of fiscal 2022, the Company estimates that an additional $ 301 will be reclassified as an increase to interest expense.

As of March 31, 2022, 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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The Company, at times, also uses forward contracts to manage its exposure to fluctuations in the GBP-EUR exchange rates.

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

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

During the remaining six months of fiscal 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:

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

the same income statement line item as the earnings effect of the hedged transaction .

During the remaining three months of fiscal 2022, the Company estimates that an additional $ 47 relating to cross-currency swaps will be reclassified as a decrease to interest expense.

As of March 31, 2022, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risk:

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

As of March 31, 2022, 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 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:

As of March 31, 2022, 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 March 31, 2022:

Asset Derivatives Liability Derivatives

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

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,

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 March 31, 2022 and 2021:

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

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

2022 2021 2022 2021

Interest rate swaps $ 2,023 $ 217 Interest and other financing expense, net $ ( 64 ) $ ( 82 )

Cross-currency swaps 593 ( 1,209 ) Interest and other financing expense, net / Other expense (income), net 664 ( 1,176 )

Cross-currency swaps 503 1,262 Interest and other financing expense, net / Other (income) expense, net 683 1,239

Foreign currency forward contracts 15 — Cost of sales 81 —

Total $ 2,541 $ 1,479 $ 700 $ 1,157

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,

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL and Consolidated Statements of Operations for the nine months ended March 31, 2022 and 2021:

Nine Months Ended March 31,

2022 2021 2022 2021

Interest rate swaps $ 2,678 $ 341 Interest and other financing expense, net $ ( 273 ) $ ( 212 )

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

Cross-currency swaps 1,872 ( 1,124 ) Interest and other financing expense, net / Other (income) expense, net 2,085 ( 1,120 )

Foreign currency forward contracts ( 64 ) ( 2 ) Cost of sales 107 73

Total $ 4,486 $ ( 785 ) $ 1,919 $ ( 1,259 )

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

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

Three Months Ended December 31, 2021 Three Months Ended December 31, 2020

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

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

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

The effects of cash flow hedging:

Gain (loss) on cash flow hedging relationships

(Loss) Gain on cash flow hedging relationships

Interest rate swaps

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

Amount of loss reclassified from AOCL into income $ — $ ( 64 ) $ — $ — $ ( 82 ) $ —

Cross-currency swaps

Amount of gain (loss) reclassified from AOCL into income $ — $ 44 $ 620 $ — $ 40 $ ( 1,216 )

Amount of gain reclassified from AOCL into income $ — $ 46 $ 637 $ — $ 39 $ 1,200

Foreign currency forward contracts

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

Amount of gain reclassified from AOCL into income $ 81 $ — $ — $ — $ — $ —

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

Nine Months Ended March 31, 2022

Nine Months Ended March 31, 2021

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

The effects of cash flow hedging:

Gain (loss) on cash flow hedging relationships

(Loss) Gain on cash flow hedging relationships

Interest rate swaps

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

Amount of loss reclassified from AOCL into income $ — $ ( 273 ) $ — $ — $ ( 212 ) $ —

Cross-currency swaps

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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,

Amount of gain reclassified from AOCL into income $ 107 $ — $ — $ 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, 2022 and 2021:

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

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

2022 2021 2022 2021

Cross-currency swaps $ 1,569 $ 3,933 Interest and other financing expense, net $ 143 $ 123

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

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

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, 2022 and 2021:

Nine Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

Cross-currency swaps $ 5,836 $ ( 3,498 ) Interest and other financing expense, net $ 413 $ 377

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

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

Nine Months Ended

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

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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 December 31, 2021:

Balance at June 30, 2021 Charges (Reversals) Amounts Paid Foreign Currency Translation & Other Adjustments Balance at December 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 March 31, 2022:

Balance at June 30, 2021 Charges (Reversals) Amounts Paid Foreign Currency Translation & Other Adjustments Balance at March 31, 2022

Termination benefits and personnel realignment $ 4,448 $ 1,912 $ ( 5,126 ) $ ( 18 ) $ 1,216

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.

The liability balance as of March 31, 2022 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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By decision dated December 17, 2021, the Second Circuit vacated the District Court’s judgment and remanded the case for further proceedings.

On April 6, 2022, the District Court issued an order directing the parties to submit position papers outlining their views regarding:

(a) the scope of the Court's reconsideration of Defendants’ Motion to Dismiss the Second Amended Complaint;

and (b) the appropriate procedure the Court should follow in light of the Second Circuit's opinion.

On April 14, 2022, the District Court entered an order setting the schedule for, and determining the scope of, supplemental briefing on Defendants’ Motion to Dismiss the Second Amended Complaint, which is due to be fully briefed on or before June 23, 2022.

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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) 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.

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.

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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.

The Court appointed interim class counsel for Plaintiffs in the Consolidated Proceeding, and Plaintiffs filed a Consolidated Amended Class Action Complaint on March 18, 2022.

The Company intends to file a motion to dismiss the Consolidated Amended Class Action Complaint, but no briefing schedule has been set.

One consumer class action is pending in New York Supreme Court, Nassau County.

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, 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.

The Company and several other manufacturers moved to dismiss the New Mexico Attorney General’s lawsuit, which motion the Court denied.

The Company filed its answer to the New Mexico Attorney General’s amended complaint on April 23, 2022.

The Company denies the New Mexico Attorney General’s allegations and maintains that its baby foods are safe, properly labeled, and compliant with New Mexico law.

In addition to the consumer class actions discussed above, the Company is currently named in five 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.

Three 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.

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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.

With respect to all litigation and related matters, the Company records a liability when the Company believes it is probable that a liability has been incurred and the amount can be reasonably estimated.

For the matters disclosed in this note, if the Company determines that a liability is probable and the loss can be reasonably estimated, the Company discloses the liability recorded.

As of the end of the period covered by this report, the Company has not recorded a liability for any of the matters disclosed in this note.

It is possible that some matters could require the Company to pay damages, incur other costs or establish accruals in amounts that could not be reasonably estimated as of the end of the period covered by this report.

SEGMENT INFORMATION

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Transactions between reportable segments were insignificant for all periods presented.

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

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

2022 2021 2022 2021

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$ 35,164 $ 49,577 $ 92,732 $ 65,814

(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.

(a) In addition to general Corporate and Other expenses as described above, for the three and nine months ended March 31, 2022, Corporate and Other included $ 218 and $ 3,228 of Productivity and transformation costs, respectively.

For the three and nine months ended March 31, 2021, Corporate and Other included $ 2,804 and $ 6,343 of Productivity and transformation costs, respectively.

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

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

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

2022 2021 2022 2021

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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 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 December 31, Six Months Ended December 31,

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

2022 2021 2022 2021

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Total $ 502,939 $ 492,604 $ 1,434,783 $ 1,519,649

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:

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

2022 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 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.

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

The Company incurred expenses of $ 247 and $ 3,649 in the three months ended March 31, 2022 and 2021, respectively, to SunOpta and affiliated entities.

For the nine months ended March 31, 2022 and 2021, the Company incurred expenses of $ 467 and $ 12,806 , 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”).

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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 aggregate price paid by the Company for the Share Repurchase was $ 76,500 (see Note 3, Earnings per Share ), which the Company funded with borrowings under the Credit Agreement.

The Company did not receive any proceeds from the Offering.

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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