What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-08-25 compared with 2021-08-26 · 492 added, 525 removed, 936 unchanged (52% of the section changed)

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and subsidiaries are included in Item 8:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets - June 30, 2022 and 2021

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

Critical Audit Matter

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

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

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

Critical Audit Matters

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

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

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

Revenue Recognition

Description of the Matter For the year ended June 30, 2021, the Company’s reported net sales from continuing operations was $2.0 billion.

As described in Note 2 of the 2021 consolidated financial statements, the Company provides certain retailers and distributors with trade and promotional incentive programs, which results in variable consideration and the Company having to estimate expected levels of promotions that are typically settled in a period after the sale taking place.

The estimated costs of these trade promotions and sales incentives are recorded as a reduction to revenue at the time a product is sold to the customer.

Description of the Matter For the year ended June 30, 2022, the Company’s reported net sales was $1.9 billion.

As described in Note 2 of the 2022 consolidated financial statements, the Company provides certain retailers and distributors with trade and promotional incentive programs, which results in variable consideration and the Company having to estimate the expected costs of these programs that are often settled in a period after the sale taking place.

The estimated costs of these programs are recorded as a reduction to revenue at the time a product is sold to the customer.

The measurement of trade promotions and sales incentive programs involves the use of judgment related to estimates of expected levels of performance and redemption rates.

Auditing the estimate of trade promotions and sales incentives is complex because the revenue recognized is determined based on significant management estimates.

In particular, estimates are made for price discounts, slotting fees, in-store display incentives, cooperative advertising programs, new product introduction fees and coupons.

These estimates are based on historical performance of the retailer or distributor, types of promotions, and adjustments for current trends, among other inputs.

Changes in these estimates can have a significant impact on the amount of the revenue recognized.

The completeness of the trade promotions and sales incentives estimate could also be impacted by any undisclosed side arrangements.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s trade promotions and sales incentives estimation process.

For example, we tested controls over management’s review of the significant assumptions, such as the historical rate and timing of deductions, management’s review of the completeness and accuracy of the data used and other controls such as their retrospective review analysis.

Among other tests, we tested the results of the Company's retrospective review analysis of price concessions claimed by distributors and retailers as compared to levels of performance and redemption rates used in the estimate, evaluated the estimates used by comparing them to historical trends, and performed sensitivity analyses over the Company's significant assumptions.

We also performed detailed transactional testing of customer deduction data underlying the estimate to validate the nature, timing and amount of deductions taken.

Additionally, we obtained confirmations from Company sales representatives in order to assess the completeness of incentive programs.

In particular, estimates are made for expected levels of performance and redemption rates.

These estimates are based on historical performance of the retailer or distributor, types and levels of promotions, and expected deviations from historical trends.

Changes in these assumptions can have a significant impact on the amount of the revenue recognized.

The completeness of the trade promotions and sales incentives estimate could also be impacted by any undisclosed side arrangements with customers.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s trade and promotional incentive program process.

For example, we tested controls over management’s review of significant assumptions, such as expected sales and consumption activity, management’s validation of the completeness and accuracy of the data used in making their estimates, and other controls such as their retrospective review analysis.

Among other tests, we tested the results of the Company's retrospective review analyses performed on their prior year and current year trade and promotional incentive program reserves, evaluated the assumptions used by comparing them to historical trends and third-party source information, and performed detailed transactional testing of customer deduction data.

Additionally, we obtained confirmations from Company sales representatives to assess the completeness of incentive programs.

Valuation of Intangible Assets from the That’s How We Roll Acquisition

Description of the Matter As described in Note 4 to the consolidated financial statements, during the year ended June 30, 2022, the Company completed the acquisition 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" for total consideration of $260.4 million, net of cash acquired.

The transaction was accounted for under the acquisition method of accounting whereby the total purchase price was allocated to assets acquired and liabilities assumed based on the estimated fair value of such assets and liabilities.

Auditing the Company's accounting for its acquisition of That’s How We Roll required complex auditor judgment due to the significant estimation uncertainty inherent in determining the fair value of identified intangible assets for acquired customer relationships and trade names.

The significant estimation uncertainty was primarily due to the judgmental nature of the inputs to the valuation techniques used to measure the fair value of these intangible assets as well as the sensitivity of the respective fair values to the underlying significant assumptions.

The significant assumptions used to estimate the fair value of the acquired intangible assets included discount rates, revenue growth rates, and operating margins.

These significant assumptions are forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the valuation of intangible assets from the That’s How We Roll acquisition.

For example, we tested controls over management’s review of the valuation models and significant assumptions described above.

To test the estimated fair value of the acquired customer relationships and trade names, we performed audit procedures that included, among others, assessing the appropriateness of the valuation methodologies and testing the significant assumptions discussed above and the completeness and accuracy of the underlying data used by the Company.

For example, we compared the revenue growth rates and operating margins to the historical results of the acquired business.

We further performed sensitivity analyses to evaluate the changes in the fair value of the acquired intangible assets that would result from changes in the significant assumptions.

In addition, we involved internal valuation specialists to assist us in our evaluation of the valuation methodologies and certain significant assumptions used by the Company.

/s/ Ernst & Young LLP

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Investments and joint ventures 14,456 16,917

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

Operating lease right-of-use assets, net 114,691 92,010

Other assets 20,377 21,187

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Current portion of long-term debt 7,705 530

Liabilities related to assets held for sale — 3,567

Total current liabilities 269,303 290,434

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10,174 15,608 48,789

Former Chief Executive Officer Succession Plan expense, net — — 30,156

Proceeds from insurance claim ( 592 ) ( 2,962 ) ( 4,460 )

Accounting review and remediation costs, net of insurance proceeds — — 4,334

Proceeds from insurance claims ( 196 ) ( 592 ) ( 2,962 )

Goodwill impairment — — 394

Long-lived asset and intangibles impairment 1,903 57,920 27,493

Operating income (loss) 107,380 56,042 ( 32,493 )

Operating income 104,681 107,380 56,042

Interest and other financing expense, net 12,570 8,654 18,258

Other (income) expense, net ( 11,380 ) ( 10,067 ) 3,956

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

108,793 33,828 ( 56,004 )

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

Income from continuing operations before income taxes and equity in net loss of equity-method investees 103,491 108,793 33,828

Provision for income taxes 22,716 41,093 6,205

Equity in net loss of equity-method investees 2,902 1,591 1,989

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

Net income from continuing operations $ 77,873 $ 66,109 $ 25,634

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

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Net income (loss) per common share:

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

Basic net income per common share from continuing operations $ 0.84 $ 0.66 $ 0.25

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

Basic net income (loss) per common share $ 0.84 $ 0.77 $ ( 0.77 )

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

Diluted net income per common share from continuing operations $ 0.83 $ 0.65 $ 0.25

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

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

amount Tax (expense) benefit After-tax amount

amount Tax benefit After-tax amount

Net income (loss) $ 77,873 $ 77,364 $ ( 80,407 )

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustments before reclassifications $ ( 102,113 ) $ — ( 102,113 ) $ 85,581 $ — 85,581 $ ( 37,847 ) $ — ( 37,847 )

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Change in deferred gains (losses) on cash flow hedging instruments 946 ( 146 ) 800 608 ( 128 ) 480 ( 1,007 ) 211 ( 796 )

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

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

Total comprehensive income loss)

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

Change in deferred gains (losses) on fair value hedging instruments 633 ( 133 ) 500 — — — — — —

Change in deferred gains (losses) on net investment hedging instruments 11,827 ( 2,485 ) 9,342 ( 4,751 ) 998 ( 3,753 ) ( 3,627 ) 762 ( 2,865 )

Total other comprehensive (loss) income $ ( 88,707 ) $ ( 2,764 ) $ ( 91,471 ) $ 97,511 $ 870 $ 98,381 $ 52,639 $ 973 $ 53,612

Total comprehensive (loss) income $ ( 13,598 ) $ 175,745 $ ( 26,795 )

See notes to consolidated financial statements.

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Cumulative effect of adoption of ASU 2016-02 ( 439 ) ( 439 )

Cumulative effect of adoption of ASU 2014-09 163 163

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

Other comprehensive income 53,612 53,612

Issuance of common stock pursuant to stock-based compensation plans 290 4 ( 4 ) —

411 4 ( 4 ) —

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

Employee shares withheld for taxes

73 ( 1,931 ) ( 1,931 )

Repurchases of common stock 2,551 ( 60,222 ) ( 60,222 )

Stock-based compensation

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

Net loss ( 80,407 ) ( 80,407 )

Net income 77,364 77,364

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

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Issuance of common stock pursuant to stock-based compensation plans 384 4 ( 4 ) —

290 4 ( 4 ) —

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

Employee shares withheld for taxes

120 ( 4,282 ) ( 4,282 )

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Net income 77,873 77,873

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

Other comprehensive income 98,381 98,381

Other comprehensive loss ( 91,471 ) ( 91,471 )

Issuance of common stock pursuant to stock-based compensation plans 1,583 15 ( 15 ) —

384 4 ( 4 ) —

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

Employee shares withheld for taxes

724 ( 32,663 ) ( 32,663 )

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

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

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

Net income from continuing operations $ 77,873 $ 66,109 $ 25,634

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

Depreciation and amortization 46,849 49,569 52,088

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Other non-cash items, net ( 1,608 ) 429 342

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

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

Accounts receivable ( 5,347 ) ( 2,890 ) 33,856

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Purchases of property, plant and equipment ( 39,965 ) ( 71,553 ) ( 60,893 )

Acquisitions of businesses, net of cash acquired ( 259,985 ) — —

Investment in joint venture ( 694 ) ( 813 ) —

Proceeds from sale of assets 12,335 10,395 —

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

Proceeds from sale of businesses, net and other — 59,607 15,765

Net cash used in investing activities from continuing operations

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Repayments under bank revolving credit facility ( 396,000 ) ( 291,000 ) ( 401,669 )

Borrowings under term loan 300,000 — —

Repayments under term loan ( 3,750 ) — ( 206,250 )

Proceeds from discontinued operations — 305,645 56,643

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

Proceeds from funding of discontinued operations — — 305,645

Payments of other debt, net ( 3,320 ) ( 2,094 ) ( 2,040 )

Share repurchases ( 410,480 ) ( 106,067 ) ( 60,221 )

Shares withheld for payment of employee payroll taxes ( 4,282 ) ( 1,931 ) ( 3,532 )

Net cash used in financing activities from continuing operations

( 162,443 ) ( 104,466 ) ( 22,846 )

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

Employee shares withheld for taxes ( 32,663 ) ( 4,282 ) ( 1,931 )

Net cash provided by (used in) financing activities from continuing operations 212,787 ( 162,443 ) ( 104,466 )

Effect of exchange rate changes on cash from continuing operations ( 15,078 ) 6,148 ( 566 )

CASH FLOWS FROM DISCONTINUED OPERATIONS

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

Cash used in operating activities — — ( 5,748 )

Cash provided by investing activities — — 297,592

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

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

Net (decrease) increase in cash and cash equivalents ( 10,359 ) 38,100 ( 1,755 )

Cash and cash equivalents at beginning of year 75,871 37,771 39,526

Cash and cash equivalents at end of year $ 75,871 $ 37,771 $ 39,526

cash and cash equivalents of discontinued operations $ — $ — $ ( 8,509 )

Cash and cash equivalents of continuing operations at end of year $ 65,512 $ 75,871 $ 37,771

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Description of Business

The Hain Celestial Group, Inc., a Delaware corporation, was founded in 1993 and is headquartered in Lake Success, New York.

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

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

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

Hain Celestial sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, drug and convenience stores in over 80 cou ntries worldwide.

The Company operates under two reportable segments:

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

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

Unless otherwise indicated, references in these consolidated financial statements to 2022, 2021 and 2020 or “fiscal” 2022, 2021 and 2020 or other years refer to the fiscal year ended June 30 of that respective year and references to 2023 or “fiscal” 2023 refer to the fiscal year ending June 30, 2023.

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

The financial statements separately report discontinued operations and the results of continuing operations (see Note 5).

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.

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The financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S.

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

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

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

however, materially different amounts may be reported under different conditions or using assumptions different from those that we have consistently applied.

The accounting principles used required the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and amounts of income and expenses during the reporting periods presented.

Actual results could differ from those estimates.

These estimates include, among others, variable consideration related to revenue recognition for trade promotions and sales incentives, valuation of accounts and chargeback receivables, valuation of long-lived assets, goodwill and intangible assets (acquired in business combinations and analysis of impairment), stock-based compensation, and valuation allowances for deferred tax assets.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

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The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

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

Deposits held with banks may exceed the amount of insurance provided on such deposits.

Generally, these deposits may be redeemed upon demand.

Revenue Recognition

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

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

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

Our customer contracts typically contain standard terms and conditions.

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

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

therefore, we have determined that our contracts do not include a significant financing component.

T he majority of the Company’s revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of products.

The Company recognizes revenue as performance obligations are fulfilled when control passes to customers.

Customer contracts typically contain standard terms and conditions.

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

Payment terms and conditions vary by customer and are based on the billing schedule established in contracts or purchase orders with customers, but the Company generally provides credit terms to customers ranging from 10-90 days.

Therefore, the Company has concluded that contracts do not include a significant financing component.

Sales includes shipping and handling charges billed to the customer and are reported net of discounts, trade promotions and sales incentives, consumer coupon programs and other costs, including estimated allowances for returns, allowances and discounts associated with aged or potentially unsalable product, and prompt pay discounts.

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

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

Variable Consideration

In addition to fixed contract consideration, many of our contracts include some form of variable consideration.

We offer various trade promotions and sales incentive programs to customers and consumers, such as price discounts, slotting fees, in-store display incentives, cooperative advertising programs, new product introduction fees and coupons.

The expenses associated with these programs are accounted for as reductions to the transaction price of our products and are therefore deducted from our net sales to determine reported net sales.

In addition to fixed contract consideration, many of the Company’s contracts include some form of variable consideration.

The Company offers various trade promotions and sales incentive programs to customers and consumers, such as price discounts, slotting fees, in-store display incentives, cooperative advertising programs, new product introduction fees and coupons.

The expenses associated with these programs are accounted for as reductions to the transaction price of the products and are therefore deducted from net sales to determine reported net sales.

Trade promotions and sales incentive accruals are subject to significant management estimates and assumptions.

The critical assumptions used in estimating the accruals for trade promotions and sales incentives include management’s estimate of expected levels of performance and redemption rates.

Management exercises judgment in developing these assumptions.

The critical assumptions used in estimating the accruals for trade promotions and sales incentives include the Company’s estimate of expected levels of performance and redemption rates.

The Company exercises judgment in developing these assumptions.

These assumptions are based upon historical performance of the retailer or distributor customers with similar types of promotions adjusted for current trends.

The Company regularly reviews and revises, when deemed necessary, estimates of costs to the Company for these promotions and incentives based on what has been incurred by the customers.

The terms of most of our promotion and incentive arrangements do not exceed a year and therefore do not require highly uncertain long-term estimates.

Settlement of these liabilities typically occurs in subsequent periods primarily through an authorization process for deductions taken by a customer from amounts otherwise due to the Company.

Differences between estimated expense and actual promotion and incentive costs are normally insignificant and are recognized in earnings in the period such differences are determined.

The terms of most of the promotion and incentive arrangements do not exceed a year and therefore do not require highly uncertain long-term estimates.

Settlement of these liabilities typically occurs in subsequent periods primarily through an authorization process for deductions taken by a customer from amounts otherwise due to the Co mpany.

Differences between estimated expense and actual promotion and incentive costs are recognized in earnings in the period such differences are determined.

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

During the year ended June 30, 2022, the Company revised its estimates for trade promotion expense incurred in the prior year based on new information that was not available at the time that the June 30, 2021 accrual was established.

This change in estimate was due to unique circumstances, such as the implementation of bracket pricing in North America and less expense incurred from retail resets, both leading to lower-than-expected customer deductions on the outstanding promotional accrual.

This change in estimate caused an increase in net sales of 0.2 %.

Costs to Obtain or Fulfill a Contract

As our contracts are generally shorter than one year, the Company has elected a practical expedient under ASC 606 that allows the Company to expense as incurred the incremental costs of obtaining a contract if the contract period is for one year or less.

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

As the Company’s contracts are generally shorter than one year, the Company has elected a practical expedient under ASC 606 that allows the Company to expense as incurred the incremental costs of obtaining a contract if the contract period is for one year or less.

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

Valuation of Accounts and Chargebacks Receivable and Concentration of Credit Risk

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

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

Changes to the allowance, if any, are classified as bad de bt provisions within selling, general and administrative expenses on the Consolidated Statements of Operations.

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

While one of the Company’s customers represented approximately 15 % and 6 % of trade receivables balances as of June 30, 2022 and 2021, respectively, the Company believes that there is no significant or unusual credit exposure at this time.

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

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

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

Sales to one customer and its affiliates approximated 15 %, 11 % and 12 % of sales during the fiscal years ended June 30, 2022, 2021 and 2020, respectively.

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

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

Deposits held with banks may exceed the amount of insurance provided on such deposits.

Generally, these deposits may be redeemed upon demand.

Inventory is valued at the lower of cost or net realizable value, utilizing the first-in, first-out method.

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Property, plant and equipment is carried at cost and depreciated or amortized on a straight-line basis over the estimated useful lives or lease term (for leasehold improvements), whichever is shorter.

The Company believes the useful lives assigned to our property, plant and equipment are within ranges generally used in consumer products manufacturing and distribution businesses.

The Company believes the useful lives assigned to the Company’s property, plant and equipment are within ranges generally used in consumer products manufacturing and distribution businesses.

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

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

The Company believes no impairment of the carrying value of such assets exists other than as disclosed under Note 4, Acquisitions and Dispositions , and Note 6, Property, Plant and Equipment, Net .

Ordinary repairs and maintenance costs are expensed as incurred.

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Leasehold improvements are amortized over the shorter of the respective initial lease term or the estimated useful life of the assets, and generally range from 3 to 20 years.

Software that is developed for internal use is recorded as a component of property, plant and equipment.

Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended.

These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal use software.

Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose.

Once placed into service, internally developed software is amortized on a straight-line basis over its estimated useful life.

All other expenditures, including those incurred in order to maintain the asset’s current level of performance, are expensed as incurred.

The net book value of internally developed software as of June 30, 2022 is $ 19,874 and it is included as a component of Computer Hardware and Software in Note 6, Property, Plant and Equipment, Net .

Goodwill and Other Indefinite-Lived Intangible Assets

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

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

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

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

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(i) estimating the royalty rates for each trademark and (ii) applying these royalty rates to a projected net sales stream and discounting the resulting cash flows to determine fair value.

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

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

This method includes significant management assumptions such as revenue growth rates, weighted average cost of capital and assumed royalty rates.

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Determining whether control has transferred requires an evaluation of relevant legal considerations, an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred and any other relevant considerations.

The Company has a non-recourse factoring arrangement in which eligible receivables are sold to a third-party buyer in exchange for cash.

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

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

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

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

The Company has non-recourse factoring 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 $ 170,737 during the year ended June 30, 2022, $ 96,788 during the year ended June 30, 2021 and $ 108,928 were sold in the year ended June 30, 2020.

The incremental cost of factoring receivables under these arrangements is included in selling, general and administrative expenses on the Company’s Consolidated Statements of Operations.

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

Cost of Sales

Included in cost of sales are the cost of products sold, including the costs of raw materials and labor and overhead required to produce the products, warehousing, distribution, supply chain costs, as well as costs associated with shipping and handling of our inventory.

Foreign Currency Translation and Remeasurement

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

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

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

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

Gains and losses arising from intercompany foreign currency transactions that are not of a long-term nature and certain transactions of the Company’s subsidiaries which are denominated in currencies other than the subsidiaries’ functional currency are recognized as incurred in Other (income) expense, net in the Consolidated Statements of Operations.

Gains and losses arising from intercompany foreign currency transactions that are not of a long-term nature and certain transactions of the Company’s subsidiaries which are denominated in currencies other than the subsidiaries’ functional currency are recognized as incurred in other (income) expense, net on the Consolidated Statements of Operations.

Selling, General and Administrative Expenses

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Research and Development Costs

Research and development costs are expensed as incurred and are included in selling, general and administrative expenses in the accompanying consolidated financial statements.

Research and development costs are expensed as incurred and are included in selling, general and administrative expenses on the Consolidated Statement of Operations.

Research and development costs amounted to $ 9,416 in fiscal 2022, $ 10,372 in fiscal 2021 and $ 11,653 in fiscal 2020, consisting primarily of personnel related costs.

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Proceeds from Insurance Claims

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

that fiscal year.

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

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

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

In fiscal 2021 and fiscal 2022, the Company received $ 592 and $ 196 of proceeds from insurance claims, respectively.

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

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The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties.

At June 30, 2021 and 2020, the Company had $ 0 and $ 7 , respectively, invested in money market funds, which are classified as cash equivalents.

At June 30, 2021 and 2020, the carrying values of financial instruments such as accounts receivable, accounts payable, accrued expenses and other current liabilities, as well as borrowings under our credit facility and other borrowings, approximated fair value based upon either the short-term maturities or market interest rates of these instruments.

At June 30, 2022 and 2021, the carrying values of financial instruments such as accounts receivable, accounts payable, accrued expenses and other current liabilities, as well as borrowings under the Company’s credit facility and other borrowings, approximated fair value based upon either the short-term maturities or market interest rates of these instruments.

Derivative Instruments and Hedging Activities

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:

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, qualitative disclosures are required 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.

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value.

The Company records all derivatives on the balance sheet at fair value.

The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.

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

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

The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

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

The Company recognizes forfeitures as they occur at which time compensation cost previously recognized for an award that is forfeited because of failure to satisfy a condition is reversed in the period of the forfeiture.

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

Excess tax benefits (tax benefits resulting from tax deductions in excess of compensation cost recognized) are classified as a cash flow provided by operating activities in the accompanying Consolidated Statements of Cash Flows.

Excess tax benefits (tax benefits resulting from tax deductions in excess of compensation cost recognized) are classified as a cash flow provided by operating activities on the Consolidated Statements of Cash Flows.

Valuation of Long-Lived Assets

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

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

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

See Note 4, Acquisitions and Dispositions , and Note 6, Property, Plant and Equipment , Net , for information on long-lived asset impairment charges.

Arrangements containing leases are evaluated as an operating or finance lease at lease inception.

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

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The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised.

Leases with an initial term of 12 months or less are not recognized on the Company's Consolidated Balance Sheets.

Leases with an initial term of 12 months or less are not recognized on the Consolidated Balance Sheets.

The Company has elected to separate lease and non-lease components.

Operating lease assets are presented as operating lease ROU assets, and corresponding operating lease liabilities are presented within accrued expenses and other current liabilities (current portions), and as operating lease liabilities, noncurrent portion, on the Company’s Consolidated Balance Sheet.

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

Net Income (Loss) Per Share

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Recently Adopted Accounting Pronouncements

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Recently Issued Accounting Pronouncements Not Yet Effective

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

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

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

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

In October 2021, the Financial Accounting Standards Board (the "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 ASC 606 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.

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 may be applied prospectively to contract modifications made on or before December 31, 2022.

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

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

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

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

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

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

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

FORMER CHIEF EXECUTIVE OFFICER SUCCESSION PLAN

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

Simon, agreed to terminate his employment with the Company upon the hiring of a new CEO (the “Succession Agreement”).

The Succession Agreement provided Mr.

Simon with a cash separation payment of $ 34,295 payable in a single lump sum and cash benefits continuation costs of $ 208 .

These costs were recognized from June 24, 2018 through November 4, 2018, at which time the Company’s new CEO, Mark L.

Schiller, commenced his employment.

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

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

Additionally, the Succession Agreement allowed for acceleration of vesting of all service-based awards outstanding at the termination of Mr.

Simon’s employment.

In connection with these accelerations, the Company recognized additional stock-based compensation expense of $ 429 ratably through November 4, 2018.

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

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

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

Simon’s stock awards during the twelve months ended June 30, 2019.

On October 26, 2018, the Company and Mr.

Simon entered into a consulting agreement (the “Consulting Agreement”) in order to, among other things, assist Mr.

Schiller with his transition as the Company’s incoming CEO.

The term of the Consulting Agreement commenced on November 5, 2018 and continued until February 5, 2019.

Simon received an aggregate consulting fee of $ 975 as compensation for his services during the consulting term, which was fully recognized in the Consolidated Statement of Operations as a component of Former Chief Executive Officer Succession Plan expense, net in the twelve months ended June 30, 2019.

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

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

The Company is currently assessing the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Recently Issued Accounting Pronouncements Not Yet Effective

There are no recently issued accounting pronouncements not yet effective that the Company believes will have a significant impact on its consolidated financial statements.

EARNINGS (LOSS) PER SHARE

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

The following table sets forth the computation of basic and diluted net income per share utilized to calculate earnings per share on the Consolidated Statements of Operations:

Fiscal Year Ended June 30,

2022 2021 2020

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

Net income from continuing operations $ 77,873 $ 66,109 $ 25,634

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

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unvested restricted share units

356 1,087 319

Diluted weighted average shares outstanding

93,345 101,322 103,937

Basic net income (loss) per common share:

Continuing operations $ 0.66 $ 0.25 $ ( 0.51 )

Discontinued operations 0.11 ( 1.02 ) ( 1.25 )

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

Diluted net income (loss) per common share:

Continuing operations $ 0.65 $ 0.25 $ ( 0.51 )

Discontinued operations 0.11 ( 1.02 ) ( 1.25 )

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

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

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

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

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

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

GG UniqueFiber ®

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

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

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

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

Inventories $ 1,056

Property, plant and equipment, net 605

Other intangible assets, net 729

There were 316 , 137 and 428 restricted stock awards an d stock options excl uded from the Company’s calculation of diluted net income (loss) per sha re for the fiscal years ended June 30, 2022, 2021 and 2020, respectively, as such awards were anti-dilutive.

Additionally 214 , 721 and 2,645 stock-based awards outstanding at June 30, 2022, 2021 and 2020, respectively, were excluded from the calculation of diluted net income (loss) per share for the fiscal years ended June 30, 2022, 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.

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 ® , deepe ning the Company's position in the snacking category.

Consideration for the transaction, net of cash acquired, totaled $ 260,424 .

Of the total consideration, $ 259,985 was paid with the remaining $ 439 payable as of June 30, 2022.

The acquisition was funded with borrow ings under the Credit Agreement (as defined in Note 10, 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 on the Consolidated Statements of Operations for the fiscal year ended June 30, 2022.

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

Accounts receivable, net $ 5,107

Inventory 9,871

Prepaid expenses and other current assets 542

Property, plant and equipment 9,198

Goodwill 95,645

Identifiable intangible assets 193,800

Operating lease right-of-use assets 3,676

Other assets 163

Total assets $ 4,919

Accounts payable and accrued expenses ( 9,082 )

Deferred income taxes ( 44,271 )

Operating lease liabilities ( 4,225 )

Total liabilities $ 1,556

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

Total assets $ 260,424

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 assigned to customer relationships with a weighted average estimated useful life of 17 years , and $ 123,000 was 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 net income included in the Company’s consolidated results were 2.9 % of consolidated net sales and 3.7 % of net income, respectively, for the fiscal year ended June 30, 2022.

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.

Fiscal Year Ended

2022 June 30,

Net sales $ 1,945,564 $ 2,065,957

Net income from continuing operations (1)

$ 84,913 $ 68,142

Diluted net income per common share from continuing operations $ 0.91 $ 0.67

(1) The pro forma adjustments include the elimination of transaction costs totaling $ 5,103 from the fiscal year ended June 30, 2022 and recognition of those costs in the fiscal year ended June 30, 2021.

Additionally, the pro forma adjustments include the elimination of integration costs and a fair value inventory adjustment totaling $ 1,800 for the fiscal year ended June 30, 2022 and recognition of those costs in the fiscal period ended June 30, 2021.

GG UniqueFiber ®

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

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

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

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

Dream ® and WestSoy ®

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

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

The final purchase price was $ 31,320 .

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

At closing, there were no liabilities.

Assets consisted of the following:

Inventories $ 6,662

Goodwill 8,429

Other intangible assets, net 7,833

Other assets 247

Total assets $ 23,171

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

The Company deconsolidated the net assets of the North American non-dairy beverage business during the twelve months ended June 30, 2021, recognizing a pre-tax gain on sale of $ 7,519 in 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 sale was completed on January 13, 2021 for total cash consideration of $ 38,547 .

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

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

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

Cash and cash equivalents $ 13,559

Accounts receivable, less allowance for doubtful accounts 14,057

Inventories 5,028

Prepaid expenses and other current assets 2,728

Property, plant and equipment, net 25,039

Goodwill 14,362

Other intangible assets, net 36,171

Operating lease right-of-use assets 5,623

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

Total assets $ 58,123

Accounts payable $ 14,428

Accrued expenses and other current liabilities 4,229

Operating lease liabilities 5,039

Deferred tax liabilities 7,298

Other liabilities 1,942

Total liabilities $ 32,936

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

The Fruit business operated in the U.K.

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

The Company determined that the held for sale criteria was met and classified the assets and liabilities of the Fruit business as held for sale as of September 30, 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 fiscal year ended June 30, 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 .

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

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

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

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

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

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

Sale of Tilda Business

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

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

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

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

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

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

Additionally, the Company distributed certain Tilda products in the United States, Canada and Europe through the expiration of the TSA.

The TSA expired during the second quarter of fiscal 2020.

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

The disposition of the Tilda operating segment represented a strategic shift that had a major impact on the Company’s operations and financial results and has been accounted for as discontinued operations.

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

Fiscal Year Ended June 30,

2021 2020 2019

Net income (loss) from discontinued operations, net of tax on the Consolidated Statements of Operations was nil for the year ended June 30, 2022.

The following table presents the major classes of Tilda’s results within net income (loss) from discontinued operations, net of tax on the Consolidated Statements of Operations for the fiscal years ended June 30, 2021 and 2020:

Net sales $ — $ 30,399

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Gros s pro fit

— 3,751 46,716

Selling, general and administrative expense — 5,185

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Interest expense (1)

— 2,432 13,561

Translation loss (2)

Gain on sale of discontinued operations — ( 9,386 )

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

Loss income from discontinued operations before income taxes ( 75 ) ( 90,772 )

(Benefit) provision for income taxes (3)

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

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

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

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

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Sale of Hain Pure Protein Reportable Segment

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

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

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

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

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

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

Sale of Plainville Farms Business (“Plainville”)

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

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

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

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

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

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

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

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

Sale of HPPC and Empire Kosher

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

Sale of Hain Pure Protein Corporation and EK Holdings, Inc.

On June 28, 2019, the Company completed the sale of the remainder of Hain Pure Protein and EK Holdings, Inc.

which included the FreeBird and Empire Kosher businesses.

Other portions of the business were sold prior to June 28, 2019.

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

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As a result of the disposition, the Company recognized a pre-tax loss of $ 636 in the twelve months ended June 30, 2019 to write down the assets and liabilities to the final sales price less costs to sell.

The following table presents the major classes of Hain Pure Protein’s line items constituting the Net (loss) income from discontinued operations, net of tax in our Consolidated Statements of Operations:

Fiscal Year Ended June 30,

2021 2020 2019

Net sales $ — $ — $ 408,109

Cost of sales — — 409,433

— — ( 1,324 )

Asset impairments — — 109,252

Selling, general and administrative expense — — 16,384

Other expense — — 9,088

The following table presents the major classes of Hain Pure Protein’s line items constituting the loss from discontinued operations, net of tax on the Consolidated Statements of Operations:

Loss on sale of discontinued operations 3,043

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$ 308,034 $ 285,410

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

PROPERTY, PLANT AND EQUIPMENT, NET

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$ 297,405 $ 312,777

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

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

Depreciation expense for the fiscal years e nded June 30, 2022, 2021 and 2020 was $ 31,235 , $ 34,291 and $ 31,409 , respectively.

During fiscal year 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 on the Consolidated Statement of Operations.

The Company recognized a non-cash impairment charge of $ 303 during the fiscal year ended June 30, 2022 relating to a facility in the United Kingdom.

Further, a facility in the United States was held for sale as of June 30, 2022 with a net carrying amount of $ 1,840 .

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

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

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

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

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

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

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

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

During fiscal 2019, the Company determined that it was more likely than not that certain fixed assets of two of its manufacturing facilities would be sold or otherwise disposed of before the end of their estimated useful lives due to the Company’s decision to consolidate manufacturing of certain fruit-based and soup products in the United Kingdom.

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

Additionally, the Company recorded non-cash impairment charges of $ 9,653 to write down the value of certain machinery and equipment no longer in use in the United States and United Kingdom, some of which was used to manufacture certain slow moving SKUs that were discontinued.

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

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The components of lease expenses for the fiscal years ended June 30, 2022, 2021 and 2020 were as follows:

Fiscal Year Ended Fiscal Year Ended

June 30, 2021 June 30, 2020

Fiscal Year Ended

2022 2021 2020

Operating lease expenses (a)

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Finance lease expenses (a)

251 391 1,197

Variable lease expenses 1,010 1,423 2,570

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Additional information related to leases is as follows:

Fiscal Year Ended Fiscal Year Ended

June 30, 2021 June 30, 2020

Fiscal Year Ended

2022 2021 2020

Supplemental cash flow information

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Finance leases $ 116 $ 690 $ 1,475

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

Operating leases $ 4,098 $ — $ —

Weighted average remaining lease term:

Operating leases 9.8 years 10.0 years

Finance leases 4.0 years 2.5 years

Operating leases 9.3 years 9.8 years 10.0 years

Finance leases 4.1 years 4.0 years 2.5 years

Weighted average discount rate:

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Total lease liabilities $ 120,635 $ 427 $ 121,062

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

Fiscal Year Operating leases Finance leases Total

2021 $ 14,781 $ 308 $ 15,089

2022 13,798 205 14,003

2023 12,833 95 12,928

2024 10,941 18 10,959

2025 9,521 6 9,527

Thereafter 51,545 — 51,545

Total lease payments 113,419 632 114,051

Imputed interest 18,119 8 18,127

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

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table shows the changes in the carrying amount of goodwill by business segment:

The following table shows the changes in the carrying am ount of goodwill by reportabl e segment:

North America International Total

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

Impairment charge — ( 394 ) ( 394 )

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

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

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

Acquisition activity (See Note 4) 95,645 — 95,645

Translation and other adjustments, net ( 742 ) ( 32,174 ) ( 32,916 )

Balance as of June 30, 2022 $ 695,715 $ 238,081 $ 933,796

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

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

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

The Company completed its annual goodwill impairment analysis in the fourth quarter of fiscal 2022 and concluded that no impairment existed at any of its reporting units.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Other Intangible Assets

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Net carrying amount $ 477,533 $ 314,895

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

(1) The gross carrying value of trademarks and trade names is reflected net of $ 94,873 and $ 93,273 of accumulated impairment charges as of June 30, 2022 and 2021, respectively.

The Company completed its annual assessment of impairment for indefinite-lived intangible assets i n the fourth quarter of fiscal 2022.

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

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

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 .

During fiscal 2022, the Company recorded an impairment of $ 1,600 related to an indefinite-lived intangible asset that has been deemed worthless.

The amount of the impairment recorded represents the remaining carrying amount of the indefinite-lived intangible asset.

The impairment loss is recorded within l ong-lived asset and intangibles impairment on the Consolidated Statements of Operations.

The asset was part of the North America reportable segment.

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

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Amortizable intangible assets, which are deemed to have a finite life, primarily consist of customer relationships and are being amortized over their estimated useful lives of 7 to 25 years.

Amortization expense included in continuing operations was as follows:

Fiscal Year Ended June 30,

2021 2020 2019

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

Amortization expense was $ 10,214 , $ 8,931 and $ 11,638 for the years ended June 30, 2022, 2021 and 2020, respectively.

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

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Estimated amortization expense $ 11,463 $ 8,748 $ 7,893 $ 7,509 $ 7,277

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

The weighted average remaining amortization period of amortized intangible assets is 13.7 years.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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Revolving credit facility $ 593,000 $ 230,000

Term loans 296,250 —

Unamortized issuance costs ( 1,105 ) —

Other borrowings (1)

2 unchanged sentences

Long-term debt, less current portion $ 880,938 $ 230,492

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

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

Credit Agreement

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, British Pounds Sterling 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 June 30, 2021, there were $ 230,000 of borrowings outstanding under the revolving credit facility and $ 6,394 letters of credit outstanding under the Credit Agreement.

During fiscal 2020, the Company used the proceeds from the sale of Tilda, net of transaction costs, to prepay the entire principal amount of term loan outstanding under its credit facility and to partially pay down its revolving credit facility.

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

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 was no more than 3.75 to 1.0 on September 30, 2020 and thereafter.

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

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

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

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

or (b) the Base Rate, as defined in the Credit Agreement, plus a rate ranging from 0 % 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.

(1) Included in other borrowings are $ 427 (2021:

$ 555 ) of finance lease obligations as discussed in Note 7, Leases.

(2) Included in short-term borrowings are $ 149 (2021:

$ 229 ) of short-term finance lease obligations as discussed in Note 7, Leases.

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

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

As of June 30, 2022 , there were $ 593,000 of loans under the Revolver, $ 296,250 of Term Loans , and $ 6,769 of 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 1.750 % per annum or (b) the Base Rate plus a rate ranging from — % to 0.750 % 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 June 30, 2021 was 1.09 %.

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 June 30, 2022 was 3.10 %.

Additionally, the Credit Agreement contains a Commitment Fee on the amount unused under the Credit Agreement ranging from 0.150 % to 0.250 % 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 June 30, 2022, $ 203,981 wa s 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 on the Consolidated Statement of Operations.

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 the Consolidated Balance Sheets, 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 on the Consolidated Statement of Operations over the term of the Credit Agreement.

Maturities of all debt instruments at June 30, 2022, are as follows:

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Interest paid during the fiscal years ended June 30, 2022, 2021 and 2020 amounted to $ 9,926 , $ 5,903 and $ 15,514 , respectively.

The components of income (loss) from continuing operations before income taxes and equity in net loss (income) of equity-method investees were as follows:

The components of income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees were as follows:

Fiscal Year Ended June 30,

3 unchanged sentences

Total $ 103,491 $ 108,793 $ 33,828

The provision (benefit) for income taxes consisted of the following:

The provision for income taxes consisted of the following:

Fiscal Year Ended June 30,

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Total $ 22,716 $ 41,093 $ 6,205

Cash paid for income taxes, net of (refunds), during the fiscal years ended June 30, 2022 amounted to $ 19,235 .

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

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

Cash paid for income taxes, net of refunds, during the fiscal year ended June 30, 2020 amounted to $ 16,162 .

The reconciliation of the U.S.

federal statutory rate to our effective rate on income before provision (benefit) for income taxes was as follows:

federal statutory rate to the Company’s effective rate on income before provision for income taxes is as follows:

Fiscal Year Ended June 30,

1 unchanged sentence

Expected United States federal income tax at statutory rate $ 21,733 21.0 % $ 22,847 21.0 % $ 7,104 21.0 %

State income taxes, net of federal (benefit) provision 1,150 1.1 % ( 668 ) ( 1.9 ) % ( 8,922 ) 15.9 %

State income taxes, net of federal provision (benefit) 1,227 1.2 % 1,150 1.1 % ( 668 ) ( 1.9 ) %

Foreign income at different rates ( 576 ) ( 0.6 ) % 4,756 4.4 % 382 1.1 %

1 unchanged sentence

Change in valuation allowance (a)

( 220 ) ( 0.2 ) % ( 5,921 ) ( 5.4 ) % 4,499 13.3 %

Change in reserves for uncertain tax positions ( 997 ) ( 1.0 ) % 1,971 1.8 % 7,925 23.4 %

3 unchanged sentences

— % 1,073 1.0 % — — %

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

tax (benefit) on foreign earnings 2,404 2.3 % ( 50 ) ( 0.1 ) % 7,449 22.0 %

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

CARES Act (c)

— % ( 1,116 ) ( 1.0 ) % ( 25,668 ) ( 75.9 ) %

Other ( 514 ) ( 0.4 ) % 1,077 1.0 % 5,182 15.3 %

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

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

Provision for income taxes $ 22,716 21.9 % $ 41,093 37.8 % $ 6,205 18.3 %

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

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

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

Further, in fiscal 2021, there was a release of a valuation allowance of $ 1,600 related to Danival;

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

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

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

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

On June 10, 2021, the U.K.

(b) In fiscal year 2021, the U.K.

enacted into law a tax rate increase from 17% to 19% and on June 10, 2021, the U.K.

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

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

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

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

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

The rate change impact in fiscal 2021 was primarily for the re-measurement of deferred tax liabilities on indefinite lived intangible assets.

(c) In fiscal 2020, the Company carried back NOLs generated in the June 30, 2019 tax year for five years, resulting in an income tax benefit of $ 18,949 .

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

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For the fiscal years ended June 30, 2022, 2021 and 2020, the Compa ny did not generate intercompany transactions that met the BEAT threshold but does have to include GILTI tax relating to the Company’s foreign subsidiaries.

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

The Company elected to account for GILTI tax as a current period cost and recorded expense of $ 1,119 during the fiscal year ended June 30, 2022.

The GILTI of $ 1,119 is included in the U.S.

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

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

10 unchanged sentences

Unremitted earnings of foreign subsidiaries ( 2,232 ) ( 1,172 )

Lease liability 14,165 14,096

Operating lease liability 25,423 14,165

Lease ROU assets ( 23,905 ) ( 12,971 )

5 unchanged sentences

At June 30, 2022 and 2021, the Company had U.S.

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

federal NOL carryforwards of approximately $ 79,890 and $ 59,514 , respectively, certain of which will not expire until 2036.

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

The Company had foreign NOL carryforwards of approximately $ 12,108 and $ 15,441 at June 30, 2022 and 2021, respectively, the majority of which are indefinite lived.

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

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

For the year ended June 30, 2022, the Company represents that $ 149,252 of foreign earnings are not permanently reinvested with a corresponding deferred tax liability of $ 2,232 .

The Company continues to reinvest $ 809,196 of undistributed earnings of its foreign subsidiaries and may be subject to additional foreign withholding taxes and U.S.

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

state income taxes if it reverses its

indefinite reinvestment assertion on these foreign earnings in the future.

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

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T he Company has recorded valuation allowances in the amounts of $ 36,891 and $ 37,453 at June 30, 2022 and 2021, respectively .

During fiscal 2019, the Company recorded a partial valuation allowance against state deferred tax assets and state net operating loss carryforwards as it is not more likely than not that the state tax attributes will be realized.

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

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

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Reductions credited to income tax expense ( 1,004 ) ( 11,520 )

THWR purchase accounting 1,743 —

Currency translation adjustments ( 2,085 ) 1,431

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Accrued liabilities for interest and penalties w ere $ 2,952 a nd $ 2,549 at June 30, 2022 and 2021, respectively.

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

The Company and its subsidiaries file income tax returns in the U.S.

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

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

The Company is no longer subject to tax examinations in the United Kingdom for years prior to fiscal 2021.

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

Although there are various tax audits

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

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

STOCKHOLDERS’ EQUITY

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Accordingly, the Board of Directors is empowered to issue, without stockholder approval, preferred stock with dividends, liquidation, conversion, voting or other rights which could decrease the amount of earnings and assets available for distribution to holders of the Company’s common stock.

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

At June 30, 2022 and 2021, no prefer red stock was issued or outstanding.

Accumulated Other Comprehensive Loss

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Foreign currency translation adjustments:

Other comprehensive income (loss) before reclassifications (1)

$ 85,581 $ ( 37,847 )

Other comprehensive (loss) income before reclassifications $ ( 102,113 ) $ 85,581

Amounts reclassified into income (1)

Deferred gains (losses) on cash flow hedging instruments:

Amount of gain (loss) recognized in AOCL on derivatives 3,511 ( 810 )

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

( 2,711 ) 1,290

Deferred (losses) gains on cash flow hedging instruments:

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

Amount of loss reclassified from AOCL into expense (3)

Deferred losses on net investment hedging instruments:

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

Deferred gains (losses) on fair value hedging instruments:

Amount of gain recognized in AOCL on derivatives 559 —

Amount of gain reclassified from AOCL into income ( 59 ) —

Deferred gain (losses) on net investment hedging instruments:

Amount of gain (loss) recognized in AOCL on derivatives 9,954 ( 3,359 )

Amount of gain reclassified from AOCL into income (3)

( 612 ) ( 394 )

Net change in AOCL $ ( 91,471 ) $ 98,381

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

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

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

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

(3) Amounts reclassified into income for deferred gains (losses) on cash flow hedging instruments are recorded in the Consolidated Statements of Operations as follows:

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

(2) Amounts reclassified into income (expense) for deferred gains (losses) on cash flow hedging instruments are recorded on the Consolidated Statements of Operations as follows:

Fiscal Year Ended June 30,

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Other expense (income), net $ 3,218 $ ( 1,556 )

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

(3) Amounts reclassified into income for deferred gains on net investment hedging instruments are recognized in “interest and other financing expense, net” in the Consolidated Statements of Operations and were $ 772 and $ 498 for the fiscal years ended June 30, 2022 and 2021, respectively.

Share Repurchase Program

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

outstanding common stock.

In June 2017, 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 each of 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.

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

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

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 21, Related Party Transactions ).

During the fiscal year ended June 30, 2022, the Company repurchased 10,626 shares under the repurchase program, inclusive of the shares repurchased from the Selling Stockholders, for a total of $ 408,886 , excluding commissions, at an average price of $ 38.48 per share.

As of June 30, 2022, the Company had $ 173,514 of remaining authorization under the share repurchase program.

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

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

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

Of that amount, $ 1,415 was included in accrued expenses and other current liabilities on the Consolidated Balance Sheet as of June 30, 2021 pending settlement of trade.

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

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

The Company also grants equity awards under its 2019 Equity Inducement Award Program (the “2019 Inducement Program”) to induce selected individuals to become employees of the Company.

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

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

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

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

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

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

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

There were 873 , 237 and 990 shares underlying restricted stock awards (“RSAs”) or restricted share units (“RSUs”) granted under the Stock Award Plans during fiscal years 2022, 2021 and 2020, respectively, of which 249 , 51 and 554 , respectively, were granted under the LTIP and are subject to the achievement of minimum performance goals or market conditions, with the remaining being service-based awards.

For performance awards and market awards, the foregoing share figures are stated at target levels, and the awards outstanding at June 30, 2022 generally provide for vesting at 0 % to 200 % of t he target level.

There were no options granted under the Stock Award Plans during fiscal years 2022, 2021 and 2020.

At June 30, 2022, there were 6,355 and 2,635 shares available for grant under the 2002 Plan and 2019 Inducement Program, respectively.

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

Restricted Stock

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RSA holders have all rights of a stockholder at the grant date, subject to certain restrictions on transferability and a risk of forfeiture.

There were no RSAs outstanding at June 30, 2022.

Shares underlying RSUs are not issued until vesting.

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The Company also grants market-based RSUs that vest contingent on meeting specific Total Shareholder Return (“TSR”) targets over a specified time period, and performance-based RSUs that vest contingent on meeting specific financial results within a specified time period.

Performance-based and market-based RSUs are issued in the form of performance share units (“PSUs”).

A summary of the restricted stock activity (includes all RSAs, RSUs and PSUs) for the last three fiscal years ended June 30 is as follows:

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 last three fiscal years ended June 30 is as follows:

2022 Weighted

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(per share) 2020 Weighted

Non-vested - beginning of period 2,049 $ 15.85 2,729 $ 12.94 1,057 $ 22.29

Non-vested - RSAs, RSUs and PSUs

1,780 $ 16.55 2,050 $ 15.85 2,729 $ 12.94

Granted 873 $ 43.55 237 $ 36.13 990 $ 17.36

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Forfeited ( 280 ) $ 32.98 ( 132 ) $ 17.18 ( 1,379 ) $ 8.80

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

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

Non-vested - RSAs, RSUs and PSUs

790 $ 42.44 1,780 $ 16.55 2,050 $ 15.85

At June 30, 2022, the table above includes a total of 163 shares that represent the target number of shares that may be earned based on pre-defined market conditions that are eligible to vest ranging from 0 % 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, all of which remained outstanding at June 30, 2022.

Vested shares during the year ended

June 30, 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 o f 13 s hares granted in a previous period that vested based on certain performance-based metrics being met.

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

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

The fair value of RSAs, RSUs and PSUs granted and of shares vested, and the tax benefit recognized from restricted shares vesting, for the last three fiscal years ended June 30 was as follows:

Fiscal Year Ended June 30,

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Tax benefit recognized from restricted stock vesting $ 3,658 $ 1,597 $ 939

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

A t June 30, 2022, $ 22,706 of unrecognized stock-based compensation expense related to non-vested restricted stock was expected to be recognized over a weighted average period of approximately 1.9 years.

Long-Term Incentive Program

The participants of the LTI Program include certain of the Company’s executive officers and other key executives.

The participants of the LTIP include certain of the Company’s executive officers and other key executives.

The LTI Program is administered by the Compensation Committee which is responsible for, among other items, selecting the specific performance measures for awards, setting the target performance required to receive an award after the completion of the performance period, and determining the specific payout to the participants.

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

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

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

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

• 2022-2024 LTIP

During the fiscal year ended June 30, 2022, the Company granted 242 RSUs under the LTIP which vest over a three year period subject to continued employment.

At June 30, 2022, 202 RSUs were outstanding under the LTI Program.

During the fiscal year ended June 30, 2022, the Company granted market-based PSU awards under the LTIP with a total target payout of 193 shares of common stock.

At June 30, 2022, 163 of such shares were outstanding.

Vesting is pursuant to a defined calculation of either relative TSR or absolute TSR (as defined in the award agreement) 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 in the award agreement) (the “TSR Performance Period”).

Vesting of 109 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 54 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 0 % to 200 % of the target amount.

Grant date fair values are calculated using a Monte Carlo simulation model with weighted average 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) $ 39.00 $ 60.09

Risk-free interest rate 0.89 % 0.89 %

Expected dividend yield — —

Expected volatility 36.93 % 24.46 %

Expected term 2.99 years 2.99 years

• 2019-2021 LTIP

Vesting is pursuant to the achievement of pre-established three-year compound annual TSR targets over the period from November 6, 2018 to November 6, 2021 with total shares eligible to vest ranging from 0 % to 300 % of the target award amount.

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

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

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

There were 51 and 554 PSUs granted during fiscal years 2021 and 2020, respectively.

No such awards were granted during fiscal year 2022.

Grant date fair

values are calculated using a Monte-Carlo simulation model.

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

Fiscal Year ended June 30,

2021 2020 2019

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

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Expected volatility 40.37 % 36.28 %

Expected term 1.17 years 1.85 years 2.67 years

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

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

Expected term 1.17 years 1.85 years

In the second quarter of fiscal 2022, the Compensation Committee determined that all outstanding awards under the 2019-2021 LTIP vested at 100 % as a result of the TSR targets having been met.

• 2018-2020 LTIP

V esting was pursuant to a defined calculation of relative TSR over the period from January 24, 2019 to June 30, 2020, with total shares eligible to vest ranging from 0 % to 150 % of the grant.

No such awards were granted during fiscal 2021 or 2020.

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On November 6, 2018, the Company’s CEO, Mark L.

Schiller received a market-based PSU award with a target payout of 350 shares of common stock and a maximum payout of 1,050 shares of common stock.

The award will vest pursuant to the achievement of pre-established three-year compound annual TSR levels over the period from November 6, 2018 to November 6, 2021.

No PSUs will vest if the three-year compound annual TSR is below 15 %.

These PSUs are subject to a holding period of one year after the vesting date.

Schiller received a market-based PSU award with a target payout of 350 shares of common stock and a maximum payout of 1,050 shares of common stock (the “CEO Inducement Grant”).

Vesting was pursuant to the achievement of pre-established three-year compound annual TSR levels over the period from November 6, 2018 to November 6, 2021.

These PSUs were subject to a holding period of one year after the vesting date.

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

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

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

This PSU award was granted outside of the Stock Award Plans.

Separately, the Company also issued 79 three-year service-based RSAs to Mr.

Schiller in November 2018 under the 2002 Plan.

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

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

In the second quarter of fiscal 2022, the Compensation Committee determined that the CEO Inducement Grant vested at 100 % as a result of the TSR targets having been met.

Additionally, from time to time, the Company grants other awards that can be RSUs or PSUs to cer tain employees.

RSUs generally vest over periods of one to three years based upon continued employment.

PSUs generally vest over periods of one to three years based upon continued employment and the achievement of certain performance-based metrics being met.

As of June 30, 2022, there were 369 and 56 of such RSUs and PSUs outstanding, respectively.

Summary of Stock-Based Compensation

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

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

Fiscal Year Ended June 30,

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$ 15,611 $ 15,659 $ 13,078

Former Chief Executive Officer Succession Plan expense, net — — 429

Discontinued operations — — 544

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The Company did not grant any stock options in fis cal years 2022, 2021 or 2020, and there were no stock options exercised during these periods.

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

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

There were 122 options outstanding at each of June 30, 2022, 2021 and 2020, relating to a grant under a prior plan.

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

For options outstanding and exercisable at June 30, 2022, the aggregate intrinsic value (the difference between the closing stock price on the last day of trading in the year and the exercise price) was $ 2,578 , and the weighted average remaining contractual life was 9.0 years.

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

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

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

At June 30, 2022 and 2021, the carrying value of the Company’s investment in Founders Table was $ 9,491 and $ 10,699 , respectively, and is included on the Consolidated Balance Sheets as a component of investments and joint ventures.

The Company also holds the following investments:

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

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

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

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

During fiscal year 2022, the Company concluded that the carrying value of its investment in Hain Future Natural Products Private Ltd.

exceeded the estimated fair value of the investment and deemed the decline to be other-than-temporary.

This resulted in the Company recording an impairment charge totaling $ 1,203 , which is included as a component of e quity in net loss of equity-method investees on the Consolidated Statement of Operations.

The carrying value of the remaining investments was $ 4,965 and $ 6,218 as of June 30, 2022 and 2021, respectively, and is included on the Consolidated Balance Sheets as a component of Investments and joint ventures.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

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Equity investment 560 560 — —

$ 1,345 $ 646 $ 699 $ —

Total $ 8,036 $ 560 $ 7,476 $ —

Derivative financial instruments $ 3,184 $ — $ 3,184 $ —

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(Level 2) Significant

Cash equivalents $ 7 $ 7 $ — $ —

Derivative financial instruments 699 — 699 —

Equity investment 646 646 — —

$ 1,583 $ 569 $ 1,014 $ —

Total $ 1,345 $ 646 $ 699 $ —

Derivative financial instruments $ 11,968 $ — $ 11,968 $ —

Total $ 11,968 $ — $ 11,968 $ —

The equity investment consists of the Company’s less than 1 % investment in Yeo Hiap Seng Limited, a food and beverage manufacturer and distributor based in Singapore.

Fair value is measured using the market approach based on quoted prices.

The Company utilizes the income approach to measure fair value for its foreign currency forward contracts.

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 fiscal years ended June 30, 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.

The Company’s debt approximates fair value due to the debt bearing fluctuating market interest rates (See Note 11, Debt and Borrowings ).

Derivative Instruments

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This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.

The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts).

The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the

discounted expected variable cash payments (or receipts).

The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

In accordance with the provisions of ASC 820, Fair Value Measurements , we incorporate credit valuation adjustments to appropriately reflect both the Company’s nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

The Company incorporates credit valuation adjustments to appropriately reflect both the Company’s nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

In adjusting the fair value of the Company’s derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

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As a result, all of the derivatives held as of June 30, 2022 and 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 June 30, 2021 and 2020.

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

DERIVATIVES AND HEDGING ACTIVITIES

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

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

During fiscal 2023, the Company estimates that an additi onal $ 4,233 will b e reclassified as a decrease to interest expense.

As of June 30, 2022, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

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Interest Rate Swap 8 $ 630,000

As of June 30, 2022, the notional amount of the interest rate swaps was $ 630 million.

Of this amount, $ 230 million has a maturity date in February 2023.

The remaining amount of $ 400 million relates to derivatives that have an effective date in February 2023.

Cash Flow Hedges of Foreign Exchange Risk

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Cross-currency swaps involve exchanging fixed-rate interest payments for fixed-rate interest receipts, both of which will occur at the USD-EUR forward exchange rates in effect upon entering into the instrument.

The Company also uses forward contracts to manage its exposure to fluctuations in the GBP-EUR exchange rates.

The Company al so 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 accumulated other comprehensive loss and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction.

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

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

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

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

During fiscal 2023, the Company estimates that an additional $ 277 relating to cross-currency swaps will be reclassified as an increase to interest expense.

As of June 30, 2022, the Company had no outstanding foreign currency derivatives that were used to hedge its foreign exchange risks.

Net Investment Hedges

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

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

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

As of June 30, 2022, the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations:

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Cross-currency swap 4 € 100,300 $ 105,804

Fair Value Hedges

T he Company is exposed to changes in the fair value of certain of its foreign denominated intercompany loans due to changes in foreign exchange spot rates.

The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in foreign exchange rates affecting gains and losses on intercompany loan principal and interest.

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

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in unrealized exchange gains/losses.

Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company’s accounting policy election.

The earnings recognition of excluded components is presented in the same

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

During fiscal 2023, the Company estimates that an additional $ 481 relating to cross-currency swaps will be reclassified as a decrease to interest expense.

As of June 30, 2022, the Company had the following outstanding foreign currency derivatives that were used to hedge changes in fair value attributable to foreign exchange risk:

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

Cross-currency swap 1 € 24,700 $ 26,021

As of June 30, 2022, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges:

Carrying Amount of the Hedged Asset

Cumulative Amount of Fair Value Hedge Adjustment Included in the Carrying Amount of the Hedged Asset

2022 2021 2022 2021

Intercompany loan receivable $ 25,899 $ — $ 122 $ —

Total $ 25,899 $ — $ 122 $ —

Non-Designated Hedges

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

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

As of June 30, 2022, the Comp any had no outstanding deriv atives that were not designated as hedges in qualifying hedging relationships.

Designated Hedges

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Derivatives designated as hedging instruments:

Interest rate swaps Prepaid expenses and other current assets $ 43 Accrued expenses and other current liabilities / Other noncurrent liabilities $ 312

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

Interest rate swaps Prepaid expenses and other current assets $ 4,230 Accrued expenses and other current liabilities / Other non-current liabilities $ 3,184

Cross-currency swaps Prepaid expenses and other current assets / Other non-current assets 3,246 Other non-current liabilities —

Total derivatives designated as hedging instruments $ 7,476 $ 3,184

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

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

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

Derivatives not designated as hedging instruments:

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

Total derivative instruments $ 1,014 $ 6,405

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL as of June 30, 2022, 2021 and 2020:

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Amount of gain (loss) reclassified from AOCL into income $ 108 $ ( 67 ) $ — $ —

The following table presents the pre-tax effect of fair value hedge accounting on AOCL as of June 30, 2022, 2021 and 2020:

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

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

2022 2021 2020 2022 2021 2020

Cross-currency swaps $ 708 $ — $ — Interest and other financing expense, net $ 75 $ — $ —

Total $ 708 $ — $ — $ 75 $ — $ —

The following table presents the pre-tax effect of the Company’s derivative financial instruments electing fair value hedge accounting on the Consolidated Statements of Operations as of June 30, 2022 and 2021:

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

Fiscal Year Ended June 30, 2022

Fiscal Year Ended June 30, 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 fair value hedging:

Gain on fair value hedging relationships

Cross-currency swaps

Amount of gain reclassified from AOCL into income $ — $ 75 $ 122 $ — $ — $ —

The following table presents the pre-tax effect of the Company’s net investment hedges on Accumulated other comprehensive loss and the Consolidated Statements of Operations as of June 30, 2022, 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

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 Excluded from Effectiveness Testing) Amount of Gain (Loss) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing)

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

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TERMINATION BENEFITS RELATED TO PRODUCTIVITY AND TRANSFORMATION INITIATIVES

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

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

The reduction in workforce associated with these initiatives may result in additional charges throughout fiscal 2023.

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COMMITMENTS AND CONTINGENCIES

Off Balance Sheet Arrangements

At June 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have had, or are likely to have, a material current or future effect on our consolidated financial statements.

Legal Proceedings

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 is scheduled for September 27, 2021.

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.

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.

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.

The parties submitted supplemental briefing between May 12, 2022 and June 23, 2022.

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 October 29, 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 Court 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

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

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

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

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

Plum PBC, et.

al .) filed in the U.S.

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

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

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

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

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

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

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

Since February 2021, the Company has been named in numerous consumer class actions alleging that the Company’s Earth’s Best baby food products (the “Products”) contain unsafe and undisclosed levels of various naturally occurring heavy metals, namely lead, arsenic, cadmium and mercury.

These actions have now been transferred and consolidated as a single lawsuit 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"), which generally alleges that the Company violated various state consumer protection laws and asserts other state and common law warranty and unjust enrichment claims related to the alleged failure to disclose the presence of these metals, arguing that consumers would have either not purchased the Products or would have paid less for them had the Company made adequate disclosures.

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.

The Company has moved to stay or transfer this case to the Consolidated Proceeding and that motion is pending.

An additional consumer class action ( Kathryn Gavula, et al.

Beech-Nut Nutrition Co., et al.

), was filed in the U.S.

District Court for the District of Oregon, alleging 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.

This lawsuit has been voluntarily dismissed by Plaintiffs.

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

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

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

Nurture, Inc., et al.

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

The Company and several other manufacturers 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.

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.

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.

DEFINED CONTRIBUTION PLANS

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All full-time employees of the Company and its wholly-owned domestic subsidiaries are eligible to participate upon completion of 30 days of service.

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

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

There were no contributions made in fiscal 2019 .

In addition, while certain of our international subsidiaries maintain separate defined contribution plans for their employees, the amounts are not significant to the Company’s consolidated financial statements.

On an annual basis, the Company may, in its sole discretion , make certain matching contributions.

For the fiscal years ended June 30, 2022, 2021 and 2020, we made contributions to the Plan of $ 2,091 , $ 2,025 and $ 2,464 , and recorded retirement plan expense in the amount of $ 2,141 , $ 2,482 and $ 1,362 , respectively.

In addition, while certain of the Company’s international subsidiaries maintain separate defined contribution plans for their employees, except for the United Kingdom operating segment, the amounts are not significant to the Company’s consolidated financial statements.

The United Kingdom operating segment offers an auto-enrollment defined contribution plan to all employees.

Employees must be aged 22 or over but under the State Pension age and have earned over £ 10 .

Employees outside of this criteria have the option to opt-in.

Employees must contribute a minimum percentage to the plan and the United Kingdom operating segments makes matching contributions.

For the fiscal years ended June 30, 2022, 2021 and 2020, there were contributions and retirement plan expense recorded in the amount of $ 2,379 , $ 3,487 and $ 3,523 , respectively.

SEGMENT INFORMATION

Our organization structure consist of two geographic based reportable segments:

Our organizational structure consists of two geographic based reportable segments:

North America and International.

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United Kingdom, Ella’s Kitchen UK and Europe.

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

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

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

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

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

The Tilda operating segment was classified as discontinued operations as discussed in Note 4, Acquisitions and Dispositions .

Segment information presented herein excludes the results of Tilda for all periods presented.

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$ 104,681 $ 107,380 $ 56,042

(1) One of our customers accounted for approximately 11 %, 12 %, and 11 % of our consolidated sales for the fiscal years ended June 30, 2021, 2020 and 2019, respectively, which were primarily related to the United States, Canada and United Kingdom operating segments.

A second customer accounted for approximately, 8 %, 9 % and 10 % of our consolidated sales for the fiscal years ended June 30, 2021, 2020 and 2019, respectively, which were primarily related to the United States operating segment.

(1) One customer accounted for approximately 15 %, 11 %, and 12 % of consolidated sales for the fiscal years ended June 30, 2022, 2021 and 2020, respectively, which were primarily related to the United States, Canada and United Kingdom operating segments.

(2) For the fiscal year ended June 30, 2022, Corporate and Other primarily included $ 3,629 related to Productivity and transformation costs and $ 59,974 of selling general and administrative costs.

For the fiscal year ended June 30, 2021, Corporate and Other primarily included $ 10,576 related to Productivity and transformation costs and $ 49,353 of selling general and administrative costs.

For the fiscal year ended June 30, 2020, Corporate and Other included $ 32,664 related to Productivity and transformation costs and tradename impairment charges of $ 13,994 ($ 8,462 related to North America and $ 5,532 related to International), partially offset by a benefit of $ 2,962 of proceeds from insurance claim.

For the fiscal year ended June 30, 2019, Corporate and Other included $ 30,156 of Former Chief Executive Officer Succession Plan expense, net, $ 28,443 of Productivity and transformation costs and $ 4,334 of accounting review and remediation costs.

Corporate and Other for the fiscal year ended June 30, 2019 also included tradename impairment charges of $ 17,900 ($ 15,113 related to North America and $ 2,787 related to International) and a $ 4,460 benefit for proceeds received in connection with an insurance recovery.

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

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2022 2021 2020

Grocery $ 1,325,552 $ 1,423,761 $ 1,512,868

Snacks 321,832 309,261 296,123

Personal Care 186,188 192,875 180,141

Tea 136,730 128,006 115,474

Turbocharge $ 735,637 $ 717,596 $ 656,345

Targeted Investment 662,268 666,442 658,119

Fuel 395,824 396,644 391,229

Simplify 98,064 189,620 348,210

Total $ 1,891,793 $ 1,970,302 $ 2,053,903

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Total $ 1,891,793 $ 1,970,302 $ 2,053,903

The Company’s long-lived assets, which primarily represent net property, plant and equipment, by geographic region are as follows:

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

Fiscal Year Ended June 30,

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RELATED PARTY TRANSACTIONS

On April 15, 2021, the Company completed the divestiture of its North America non-dairy beverages brands, Dream ® and WestSoy ® , for $ 31,320 .

The purchaser in this transaction was SunOpta Inc.

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

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

The Company incurred expenses of $ 13,050 , $ 19,551 and $ 21,633 in fiscal years 2021, 2020 and 2019, respectively, to SunOpta and its affiliated entities.

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

The Company incurred expenses of $ 2,295 , $ 4,242 and $ 2,592 in fiscal years 2021, 2020 and 2019, respectively, to the law firm and affiliated entities.

The director resigned from the Board of Directors in February 2020.

On November 9, 2021, the Company entered into a share repurchase agreement with 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 equaled 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”).

The last reported sale price of the Company’s common stock on the NASDAQ Global Select Market on November 9, 2021 was $ 47.95 per share.

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 12, Stockholders’ Equity ), which the Company funded with borrowings under the Credit Agreement.

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.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data