What changed in this filing

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Item 1. Financial Statements

2022-11-08 compared with 2022-05-05 · 222 added, 425 removed, 559 unchanged (54% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

MARCH 31, 2022 AND JUNE 30, 2021

SEPTEMBER 30, 2022 AND JUNE 30, 2022

(In thousands, except par values)

March 31, June 30,

September 30, June 30,

Current assets:

43 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(In thousands, except per share amounts)

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

2022 2021 2022 2021

Three Months Ended September 30,

Net sales $ 439,351 $ 454,903

4 unchanged sentences

Productivity and transformation costs

1,679 4,451 8,448 10,895

Proceeds from insurance claim

— ( 592 ) ( 196 ) ( 592 )

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

Operating income 15,823 25,547

Interest and other financing expense, net 7,677 1,856

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

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

Other income, net ( 1,790 ) ( 788 )

Income from operations before income taxes and equity in net loss of equity-method investees 9,936 24,479

Provision for income taxes 2,631 4,542

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

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

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

Equity in net loss of equity-method investees 382 526

Net income $ 6,923 $ 19,411

Net income per common share:

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

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

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

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

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

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

Basic $ 0.08 $ 0.20

Diluted $ 0.08 $ 0.20

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

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( LOSS) (UNAUDITED)

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(In thousands)

Three Months Ended

March 31, 2022 March 31, 2021

September 30, 2022 September 30, 2021

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

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Net income $ 6,923 $ 19,411

Other comprehensive income (loss):

Other comprehensive loss:

Foreign currency translation adjustments before reclassifications ( 67,149 ) — ( 67,149 ) ( 22,805 ) — ( 22,805 )

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

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

1,841 ( 387 ) 1,454 322 ( 68 ) 254

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

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

Total other comprehensive (loss) income

Change in deferred gains on cash flow hedging instruments

14,231 ( 3,638 ) 10,593 44 ( 9 ) 35

Total comprehensive income $ 8,411 $ 53,915

Nine Months Ended

March 31, 2022 March 31, 2021

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

amount Tax (expense) benefit After-tax amount

Net income $ 74,831 $ 36,879

Other comprehensive income (loss):

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

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

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

Change in deferred losses on fair value hedging instruments

( 272 ) 69 ( 203 ) — — —

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

Change in deferred gains on net investment hedging instruments

5,773 ( 1,476 ) 4,297 2,287 ( 480 ) 1,807

Total other comprehensive (loss) income

Total other comprehensive loss

$ ( 47,417 ) $ ( 5,045 ) $ ( 52,462 ) $ ( 20,474 ) $ ( 489 ) $ ( 20,963 )

Total comprehensive income $ 37,492 $ 130,589

Total comprehensive loss $ ( 45,539 ) $ ( 1,552 )

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022

(In thousands, except par values)

9 unchanged sentences

10 ( 229 ) ( 229 )

Repurchases of common stock 4,525 ( 175,687 ) ( 175,687 )

Stock-based compensation expense 3,994 3,994

Balance at September 30, 2022 111,114 $ 1,112 $ 1,207,120 $ 776,021 21,798 $ ( 725,914 ) $ ( 216,944 ) $ 1,041,395

Net income 30,889 30,889

Other comprehensive loss ( 256 ) ( 256 )

Issuance of common stock pursuant to stock-based compensation plans

1,436 14 ( 14 ) —

Employee shares withheld for taxes

654 ( 29,858 ) ( 29,858 )

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

Stock-based compensation expense 4,156 4,156

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

Net income 24,531 24,531

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

Issuance of common stock pursuant to stock-based compensation plans

Employee shares withheld for taxes

40 ( 1,597 ) ( 1,597 )

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

Stock-based compensation expense 3,846 3,846

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

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021

(In thousands, except par values)

5 unchanged sentences

Net income 19,411 19,411

Cumulative effect of adoption of ASU 2016-02

( 310 ) ( 310 )

Other comprehen sive income

31,005 31,005

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

Issuance of common stock pursuant to stock-based compensation plans

4 unchanged sentences

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

Net income 2,140 2,140

Other comprehensive income 43,044 43,044

Issuance of common stock pursuant to stock-based compensation plans

162 2 ( 2 ) —

Employee shares withheld for taxes

38 ( 1,255 ) ( 1,255 )

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

Stock-based compensation expense 3,823 3,823

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

Net income 34,254 34,254

Other comprehensive income 19,661 19,661

Issuance of common stock pursuant to stock-based compensation plans

127 1 ( 1 ) —

Employee shares withheld for taxes

49 ( 2,018 ) ( 2,018 )

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

Stock-based compensation expense 3,698 3,698

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

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED MARCH 31, 2022 AND 2021

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(In thousands)

Nine Months Ended March 31,

Three Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 6,923 $ 19,411

Net income from discontinued operations — 11,255

Net income from continuing operations 74,831 25,624

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

Adjustments to reconcile net income from operations to net cash (used in) provided by operating activities:

Depreciation and amortization 11,970 10,855

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Stock-based compensation, net 3,994 4,287

Long-lived asset and intangibles impairment 303 57,676

Gain on sale of assets ( 60 ) ( 276 )

Loss on sale of businesses — 1,217

Other non-cash items, net ( 1,457 ) ( 1,093 )

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

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

Accounts receivable ( 9,589 ) ( 9,443 )

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Accounts payable and accrued expenses ( 2,764 ) 13,813

Net cash provided by operating activities from continuing operations 99,186 146,517

Net cash (used in) provided by operating activities ( 5,116 ) 37,586

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment ( 7,215 ) ( 17,810 )

Acquisitions of businesses, net of cash acquired ( 260,474 ) —

Investment in joint venture ( 614 ) ( 694 )

Investments and joint ventures, net 191 ( 408 )

Proceeds from sale of assets 96 164

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

Net cash used in investing activities from continuing operations

Net cash used in investing activities

( 6,928 ) ( 18,054 )

2 unchanged sentences

Repayments under bank revolving credit facility ( 69,875 ) ( 5,000 )

Borrowings under term loan 300,000 —

Repayments under term loan ( 1,875 ) —

Payments of other debt, net ( 72 ) ( 237 )

2 unchanged sentences

( 229 ) ( 1,175 )

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

Net cash provided by (used in) financing activities

9,824 ( 63,515 )

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

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

Effect of exchange rate changes on cash ( 11,498 ) ( 2,926 )

Net decrease in cash and cash equivalents ( 13,718 ) ( 46,909 )

Cash and cash equivalents at beginning of period 65,512 75,871

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(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 4, Acquisitions and Dispositions ).

All footnotes exclude discontinued operations unless otherwise noted.

See Note 4, Acquisition, for details.

BASIS OF PRESENTATION

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

Operating results for the nine months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2022.

Operating results for the three months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2023.

Please refer to the Notes to the Consolidated Financial Statements as of June 30, 2022 and for the fiscal year then ended included in the Form 10-K for information not included in these condensed notes.

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Transfer of Financial Assets

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

The Company accounts for transfers of financial assets, such as non-recourse accounts receivable financing arrangements, when the Company has surrendered control over the related assets.

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 non-recourse financing arrangements in which eligible receivables are sold to third-party buyers in exchange for cash.

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

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

The incremental cost

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

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

Recently Adopted Accounting Pronouncements

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

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

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

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

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

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

GAAP to contracts, hedging relationships and other transactions affected by reference rate reform.

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

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

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

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

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

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

The principal amount of receivables sold under these arrangements w as $ 83,659 a nd $ 22,889 during the three months ended September 30, 2022 and 2021,

respectively.

The incremental cost of financing 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 used in operating activities on the Consolidated Statements of Cash Flows.

EARNINGS PER SHARE

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

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

2022 2021 2022 2021

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

Net income from discontinued operations — — — 11,255

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:

Three Months Ended September 30,

Net income $ 6,923 $ 19,411

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

171 1,765 420 883

Diluted weighted average shares outstanding

89,493 97,438

Basic net income per common share:

Continuing operations $ 0.27 $ 0.34 $ 0.80 $ 0.25

Discontinued operations — — — 0.11

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

Diluted net income per common share:

Continuing operations $ 0.27 $ 0.34 $ 0.79 $ 0.25

Discontinued operations — — — 0.11

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

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

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

Additionally, 231 and 23 stock-based awards outstanding at March 31, 2022 and 2021, respectively, were excluded from the calculation of diluted net income per share for the three months ended March 31, 2022 and 2021, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

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

There were 489 and nil restricted stock awards excluded from our calculation of diluted net income per sha re for the three months ended September 30, 2022 and 2021, respectively, as such awards were anti-dilutive.

Additionally, 298 and 1,299 stock-based awards outstanding at September 30, 2022 and 2021, respectively, were excluded from the calculation of diluted net income per share for the three months ended September 30, 2022 and 2021, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

Share Repurchase Program

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

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

In January 2022, the Company's Board of Directors authorized the repurchase of up to $ 200,000 of the Company’s issued and outstanding common stock.

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

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

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

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

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

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

ACQUISITIONS AND DISPOSITIONS

During the three months ended September 30, 2022, the Company did not repurchase any shares under the repurchase program.

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

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

Repurchases made during the three months ended September 30, 2021, were made under a previous Board of Directors authorization.

That's How We Roll

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

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

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

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

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

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

The Company incurred $ 5,103 of transaction costs in connection with the acquisition which were expensed as incurred, and are included as a component of Selling, general and administrative expenses in the Company's Consolidated Statements of Operations for the nine months ended March 31, 2022.

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

The Company expects to finalize the allocation during fiscal 2022.

March 31, 2022

Accounts receivable, net $ 5,107

Inventory 9,871

Prepaid expenses and other current assets 542

Property, plant & equipment 9,198

Identifiable intangible assets 193,800

Operating lease right-of-use assets 3,676

Other assets 164

Deferred income taxes ( 42,252 )

Goodwill 94,071

Accounts payable & accrued expenses ( 9,082 )

Operating lease liabilities ( 4,225 )

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

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

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

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

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

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

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.

THWR's net sales included in our consolidated results were 3.6 % of consolidated net sales for the three months ended September 30, 2022.

The following table provides unaudited pro forma results of operations had the acquisition been completed at the beginning of fiscal 2022.

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

Accordingly, this information has been provided for illustrative

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

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

Unaudited supplemental pro forma information

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

2022 2021 2022 2021

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

Net income from continuing operations (1)

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

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

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

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

GG UniqueFiber ®

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.

The final purchase price was $ 31,320 .

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

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

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

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

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

The Fruit business operated in the U.K.

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

The Compan y determined that the held for sale criteria was met and classified the assets and liabilities of the Fruit business as held for sale as of September 30, 2020 and December 31, 2020, recognizing a pre-tax non-cash loss to reduce the carrying value to its estimated fair value less costs to sell of $ 56,093 during the nine months ended March 31, 2021.

The sale was completed on January 13, 2021 for a total cash consideration of $ 38,547 , recognizing a pre-tax loss on sale of $ 1,904 during the third quarter of fiscal 2021.

The Company entered into a definitive stock purchase agreement on June 30, 2020 for the sale of its Danival business, a component of the International reportable segment, and the transaction closed on July 21, 2 020.

The Company deconsolidated th e net assets of the Danival business upon closing of the sale during the quarter ended September 30, 2020, recognizing a pre-tax gain on sale of $ 611 during the first quarter of fiscal 2021.

Discontinued Operations

Sale of Tilda Business

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

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

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

The following table presents the major classes of Tilda’s results within Net income from discontinued operations, net of tax in our Consolidated Statements of Operations for the nine months ended March 31, 2021:

Nine Months Ended March 31,

Three Months Ended

September 30, 2022 September 30, 2021

Net sales $ 439,351 $ 485,196

Cost of sales —

Gross profit —

Other expense 75

Net loss from discontinued operations before income taxes ( 75 )

Benefit for income taxes (1)

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

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

There wer e no asse ts or liabilities from discontinued operations associated with Tilda as of March 31, 2022 or June 30, 2021.

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

Net income from operations $ 6,923 $ 19,425

Diluted net income per common share from operations $ 0.08 $ 0.20

The Company's acquisition is described in more detail in Note 4, Acquisitions and Dispositions , in the Notes to the Consolidated Financial Statements in the Form 10-K.

Inventories consisted of the following:

September 30,

2022 June 30,

2 unchanged sentences

$ 315,882 $ 308,034

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

PROPERTY, PLANT AND EQUIPMENT, NET

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

September 30,

2022 June 30,

7 unchanged sentences

512,167 530,864

Accumulated depreciation and amortization 243,518 230,514

Accumulated depreciation and impairment 230,627 233,459

$ 281,540 $ 297,405

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

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

During the nine months ended March 31, 2022, the Company completed the sale of undeveloped land plots in Boulder, Colorado in the United States for total cash proceeds of $ 10,005 , net of brokerage and other fees, resulting in a gain in the amount of $ 8,656 , which is included as a component of Other (income) expense, net in our Consolidated Statement of Operations.

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

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

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

During the nine months ended March 31, 2021, the Company recorded a non-cash impairment charge of $ 1,333 related to the write-down of building improvements.

Depreciation expense for the three months ended September 30, 2022 and 2021 was $ 8,067 and $ 7,408 , respectively.

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

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

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

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

Three Months Ended Nine Months Ended

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

The components of lease expenses for the three months ended September 30, 2022 and 2021 were as follows:

Three Months Ended

September 30, 2022 September 30, 2021

Operating lease expenses $ 4,975 $ 3,752

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Supplemental balance sheet information related to leases was as follows:

Leases Classification March 31, 2022 June 30, 2021

Leases Classification September 30, 2022 June 30, 2022

Operating lease ROU assets, net Operating lease right-of-use assets, net $ 115,517 $ 114,691

7 unchanged sentences

Additional information related to leases is as follows:

Nine Months Ended

March 31, 2022 March 31, 2021

Three Months Ended

September 30, 2022 September 30, 2021

Supplemental cash flow information

6 unchanged sentences

Finance leases $ 26 $ —

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

Operating leases $ 4,098 $ —

Weighted average remaining lease term:

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Finance leases 4.3 % 4.2 %

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

Maturities of lease liabilities as of September 30, 2022 were as follows:

Fiscal Year Operating leases Finance leases Total

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Total lease liabilities $ 122,424 $ 401 $ 122,825

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

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

GOODWILL AND OTHER INTANGIBLE ASSETS

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

Acquisition activity (See Note 4) 94,071 — 94,071

Translation and other adjustments, net 3,468 ( 24,986 ) ( 21,518 )

Balance as of March 31, 2022

Balance as of September 30, 2022

$ 699,183 $ 213,095 $ 912,278

There were no events or circumstances that warranted an interim impairment test for goodwill during the three months ended September 30, 2022 or 2021.

Other Intangible Assets

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

September 30,

2022 June 30,

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Net other intangible assets $ 463,161 $ 477,533

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

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

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

Amortization expense included in continuing operations was as follows:

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

2022 2021 2022 2021

There were no events or circumstances that warranted an interim impairment test for indefinite-lived intangible assets during the three months ended September 30, 2022 or 2021.

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

Amortization expense included in the Consolidated Statements of Operations was as follows:

Three Months Ended September 30,

Amortization of acquired intangibles $ 2,788 $ 2,095

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Debt and borrowings consisted of the following:

September 30,

2022 June 30,

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Long-term debt, less current portion $ 891,123 $ 880,938

(1) Includes $ 401 ( June 30, 2022 :

$ 427 ) of finance lease obligations as discussed in Note 7, Leases.

(2) Includes $ 124 (June 30, 2022:

$ 149 ) of short-term finance lease obligations as discussed in Note 7, Leases.

Amended and Restated Credit Agreement

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

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

As of September 30, 2022, there were $ 605,000 of loans under the Revolver, $ 294,375 of Term Loans, and $ 6,769 letters of credit outstanding under the Credit Agreement.

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

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Dollars will bear interest at the Base Rate plus the Applicable Rate, and Global Swing Line Loans denominated in foreign currencies shall bear interest based on (a) the Euro Short Term Rate, or €STR, in the case of such loans denominated in Euros plus the Applicable Rate, (b) the Sterling Overnight Index Average Reference Rate, or SONIA, in the case of such loans denominated in Sterling plus the Applicable Rate or (c) the Canadian Prime Rate plus the Applicable Rate.

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

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

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

As of March 31, 2022 , $ 253,081 was available under the Credit Agreement, and the Company was in compliance with all associated covenants.

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

The weighted average interest rate on outstanding borrowings under the Credit Agreement at September 30, 2022 was 4.38 %.

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

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

The minimum consolidated interest coverage ratio is 2.75 :1.00.

The maximum consolidated secured leverage ratio was 5.00 :1.00 through the fiscal quarter ended September 30, 2022;

will be 4.50 :1.00 for the fiscal quarters ending December 31, 2022 and March 31, 2023;

and will be 4.25 :1.00 thereafter commencing with the fiscal quarter ending June 30, 2023.

The maximum consolidated leverage ratio is 6.00 :1.00.

As of September 30, 2022, $ 188,231 was available under the Credit Agreement, subject to compliance with the financial covenants.

As of September 30, 2022, the Company was in compliance with all associated covenants.

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

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

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

Due in Fiscal Year Amount

Remainder of 2023 $ 5,597

Total debt and borrowings $ 898,780

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

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

The effective income tax rate from continuing operations was an expense of 23.7 % and 25.7 % for the three months ended March 31, 2022 and 2021, respectively.

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

The effective income tax rate from continuing operations for the nine months ended March 31, 2022 was impacted by the reversal of uncertain tax position accruals based on filing and approval of certain elections by taxing authorities, deductions related to stock-based compensation, non-deductible transaction costs related to the acquisition of THWR (see Note 4, Acquisitions and Dispositions ), the reversal of a valuation allowance due to the utilization of a capital loss carryover and the finalization of fiscal year 2021 U.S.

income tax returns.

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

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

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

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

The effective income tax rate was an expense of 26.5 % and 18.6 % for the three months ended September 30, 2022 and 2021, respectively.

The effective income tax rate for the three months ended September 30, 2022 increased due to tax expense related to stock-based compensation and uncertain tax positions.

The effective income tax rate for the three months ended September 30, 2021

decreased due to the reversal of uncertain tax position accruals based on filing and approval of certain elections by taxing authorities.

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

ACCUMULATED OTHER COMPREHENSIVE LOSS

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

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

2022 2021 2022 2021

Three Months Ended September 30,

Foreign currency translation adjustments:

Other comprehensive (loss) income before reclassifications $ ( 18,701 ) $ 1,672 $ ( 43,649 ) $ 80,491

Amounts reclassified into income (1)

— 14,725 — 15,906

Deferred gains (losses) on cash flow hedging instruments:

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

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

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

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

Deferred gains (losses) on net investment hedging instruments:

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

Other comprehensive loss before reclassifications $ ( 67,149 ) $ ( 22,805 )

Deferred gains on cash flow hedging instruments:

Amount of gain recognized in AOCL on derivatives (1)

Amount of gain reclassified from AOCL into income (1)

( 767 ) ( 500 )

Amount of loss reclassified from AOCL into expense (2)

Deferred gains on fair value hedging instruments:

Amount of gain recognized in AOCL on derivatives (1)

Amount of gain reclassified from AOCL into income (1)

Deferred gains on net investment hedging instruments:

Amount of gain recognized in AOCL on derivatives (1)

Amount of gain reclassified from AOCL into income (1)

( 369 ) ( 103 )

Net change in AOCL $ ( 52,462 ) $ ( 20,963 )

(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 c omplete.

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

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

(1) See Note 15, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains (losses) on cash flow and net investment hedging instruments recorded in the Consolidated Statements of Operations in the three months ended September 30, 2022 and 2021.

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

4 unchanged sentences

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

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

2022 2021 2022 2021

Three Months Ended September 30,

Selling, general and administrative expense

4 unchanged sentences

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

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

A summary of the restricted stock activity (including all RSAs, RSUs and PSUs) for the three months ended September 30, 2022 is as follows:

Number of Shares

6 unchanged sentences

Forfeited ( 54 ) $ 40.76

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

The table above includes a total of 190 shares granted during the nine months ended March 31, 2022 that represent the target number of shares that may be earned based on pre-defined market conditions that are eligible to vest ranging from zero to 200 % of target.

Non-vested RSAs, RSUs and PSUs outstanding at September 30, 2022 1,636 $ 30.73

The table above includes a total of 365 shares granted during the three months ended September 30, 2022 that represent the target number of shares that may be earned based on pre-defined market conditions that are eligible to vest ranging from zero to 200 % of target.

All such shares relate to the 2023 – 2025 LTIP as further described below.

Granted shares also include 56 shares that may be earned based on certain performance-based metrics being met.

Vested shares during the nine months ended March 31, 2022 include a total of 1,299 shares under the 2019-2021 LTIP that vested at 100 % of target based on achievement of target absolute total shareholder return ("TSR") levels, and a total of 13 shares granted in a previous period that vested based on certain performance-based metrics being met.

Vested shares during the three months ended September 30, 2022 include a total of 5 shares related to certain performance-based metrics being met and a total of 19 shares related to service-based RSUs.

There are market-based PSU awards outstanding under both the 2023 – 2025 LTIP and the 2022 – 2024 LTIP.

At September 30, 2022, 365 of such shares were outstanding under the 2023 – 2025 LTIP while 158 shares were outstanding under the 2022 – 2024 LTIP.

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

Nine Months Ended March 31,

Three Months Ended September 30,

Fair value of RSAs, RSUs and PSUs granted $ 19,839 $ 478

1 unchanged sentence

Tax benefit recognized from restricted shares vesting $ 78 $ 246

At March 31, 2022, there was $ 29,787 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 2.2 years.

At September 30, 2022 , there was $ 37,613 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 2.08 years.

2023-2025 LTIP

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

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

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

During the three months ended September 30, 2022, the Company granted market-based PSU awards under the LTI Program with a total target payout of 365 shares of common stock.

Vesting is pursuant to a defined calculation of either relative TSR or absolute TSR (as defined) over the period from September 6, 2022 through the earlier of (i) September 6, 2025;

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

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

At March 31, 2022 and June 30, 2021, the carrying value of the Company’s investment in Founders Table was $ 9,808 a nd $ 10,699 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

The Company also holds the following investments:

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

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

At September 30, 2022 and June 30, 2022, the carrying value of the Company’s investment in Founders Table was $ 8,910 and $ 9,491 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

The Company also holds an investment in Hutchison Hain Organic Holdings Limited, a joint venture with HUTCHMED (China) Limited, accounted for under the equity method of accounting.

The carrying value of the investments were $ 4,917 and $ 4,965 as of September 30, 2022 and June 30, 2022, respectively, and is included in the Consolidated Balance Sheets a s a component of Investments and joint ventures.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

5 unchanged sentences

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

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

The following table presents assets and liabilities measured at fair value on a recurring basis as of September 30, 2022:

Derivative financial instruments $ 25,596 $ — $ 25,596 $ —

1 unchanged sentence

Total $ 25,873 $ 277 $ 25,596 $ —

Derivative financial instruments $ 3,841 — $ 3,841 —

Total $ 3,841 $ — $ 3,841 $ —

The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2022:

4 unchanged sentences

Total $ 3,184 $ — $ 3,184 $ —

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 nine months ended March 31, 2022 or 2021.

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

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

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

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

There were no transfers of financial instruments between the three levels of fair value hierarchy during the three months ended September 30, 2022 or 2021.

Derivative Instruments

4 unchanged sentences

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 , 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.

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

As a result, all of the derivatives held as of March 31, 2022 and June 30, 2021 were classified as Level 2 of the fair value hierarchy.

The fair value estimates presented in the fair value hierarchy tables above are based on information available to management as of March 31, 2022 and June 30, 2021.

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

As a result, all of the derivatives held as of September 30, 2022 and June 30, 2022 were classified as Level 2 of the fair value hierarchy.

DERIVATIVES AND HEDGING ACTIVITIES

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The Company is exposed to certain risks arising from both its business operations and economic conditions.

The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities.

The Company manages its exposures to a wide variety of business and operational risks.

The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments.

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These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency.

The Company enters into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of its functional currency, the U.S.

Company enters into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of its functional currency, the U.S.

Accordingly, the Company uses derivative financial instruments to manage and mitigate such risks.

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

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

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

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

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

As of March 31, 2022, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

During the three months ended September 30, 2022 and 2021, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

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

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

During the remaining nine months of fiscal 2023, the Company estimates that an additional $ 5,150 will be reclassified as a decrease to interest expense.

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

Interest Rate Derivative Number of Instruments Notional Amount

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The Company uses foreign currency derivatives including cross-currency swaps to manage its exposure to fluctuations in the USD-EUR exchange rates.

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 instr ument.

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

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

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

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

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

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

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

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

Foreign currency forward contract 3 £ 2,515 € 3,000

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 the remaining nine months of fiscal 2023, the Company estimates that an additional $ 161 relating to the cross-currency swaps will be reclassified as an increase to interest expense.

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

Net Investment Hedges

5 unchanged sentences

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

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

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

As of March 31, 2022, the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations:

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

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

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

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

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

Non-Designated Hedges

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements and/or the Company has not elected to apply hedge accounting.

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

As of March 31, 2022, the Company had no outstanding derivatives that were not designated as hedges in qualifying hedging relationships.

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of March 31, 2022:

Fair Value Hedges

The 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 the remaining nine months of fiscal 2023, the Company estimates that an additional $ 359 relating to cross currency swaps will be reclassified as a decrease to interest expense.

As of September 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 September 30, 2022 and 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

September 30,

2022 June 30,

2022 September 30,

2022 June 30,

Intercompany loan receivable $ 24,211 $ 25,899 $ 1,688 $ 122

Designated Hedges

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of September 30, 2022:

Asset Derivatives Liability Derivatives

3 unchanged sentences

Cross-currency swaps Prepaid expenses and other current assets 10,435 Other noncurrent liabilities —

Foreign currency forward contracts Prepaid expenses and other current assets 15 Other noncurrent liabilities —

Total derivatives designated as hedging instruments $ 25,596 $ —

6 unchanged sentences

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

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

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

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

2022 2021 2022 2021

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

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

Foreign currency forward contracts 15 — Cost of sales 81 —

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

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

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL for the three months ended September 30, 2022 and 2021:

Nine Months Ended March 31,

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

2022 2021 2022 2021

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Total $ 15,262 $ 678 $ 1,031 $ 634

The following table presents the pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations for the three months ended of March 31, 2022 and 2021:

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

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

Three Months Ended September 30, 2022 Three Months Ended September 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 cash flow hedging:

(Loss) Gain on cash flow hedging relationships

Gain (Loss) on cash flow hedging relationships

Interest rate swaps

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

Amount of gain (loss) reclassified from AOCL into income $ — $ 1,146 $ — $ — $ ( 104 ) $ —

Cross-currency swaps

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

Foreign currency forward contracts

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

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

Nine Months Ended March 31, 2022

Nine Months Ended March 31, 2021

Amount of (loss) gain reclassified from AOCL into income $ — $ ( 115 ) $ — $ — $ 41 $ 697

The following table presents the pre-tax effect of fair value hedge accounting on AOCL for the three months ended September 30, 2022 and 2021:

Derivatives in Fair value 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)

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

2022 2021 2022 2021

Cross-currency swaps $ 1,539 $ — Interest and other financing expense, net $ 123 $ —

Total $ 1,539 $ — $ 123 $ —

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 September 30, 2022 and 2021:

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

Three Months Ended September 30, 2022 Three Months Ended September 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 cash flow hedging:

(Loss) Gain on cash flow hedging relationships

Interest rate swaps

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

The effects of fair value hedging:

Gain on fair value hedging relationships

Cross-currency swaps

Amount of gain (loss) reclassified from AOCL into income $ — $ 131 $ 1,954 $ — $ 120 $ ( 1,240 )

Foreign currency forward contracts

Amount of gain reclassified from AOCL into income $ — $ 123 $ 1,688 $ — $ — $ —

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021:

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

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

2022 2021 2022 2021

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

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the nine months ended March 31, 2022 and 2021:

Nine Months Ended

March 31, Nine Months Ended

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the three months ended September 30, 2022 and 2021:

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

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

2022 2021 2022 2021

Cross-currency swaps $ 6,268 $ 2,417 Interest and other financing expense, net $ ( 495 ) $ 130

The following table presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Consolidated Statements Operations for the nine months ended March 31, 2022 and 2021:

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

Nine Months Ended

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

Credit-Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision providing that upon certain defaults by the Company on any of its indebtedness, the Company could also be declared in default on its derivative obligations.

TERMINATION BENEFITS RELATED TO PRODUCTIVITY AND TRANSFORMATION INITIATIVES

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 are expected to result in charges throughout fiscal 2022.

The following table displays the termination benefits and personnel realignment activities and liability balances relating to the reduction in workforce for the period ended as of March 31, 2022:

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

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

The liability balance as of March 31, 2022 and June 30, 2021 is included within Accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheets.

COMMITMENTS AND CONTINGENCIES

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

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

On April 14, 2022, the District Court entered an order setting the schedule for, and determining the scope of, supplemental briefing on Defendants’ Motion to Dismiss the Second Amended Complaint.

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

In June 2022, the District Court referred Defendants’ Motion to Dismiss the Second Amended Complaint to a United States Magistrate Judge (the “Magistrate Judge”) for a Report and Recommendation.

On November 4, 2022, the Magistrate Judge issued a Report and Recommendation recommending that the District Court grant Defendants’

Motion to Dismiss the Second Amended Complaint with prejudice.

Any objections by the parties to the Report and Recommendation are due by November 18, 2022.

Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court

29 unchanged sentences

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

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

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 ( Kathryn Gavula, et al.

Beech-Nut Nutrition Co., et al.

) filed in the U.S.

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

with other baby food manufacturers to conceal the presence of these heavy metals in our respective products.

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

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

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

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

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.

Those actions have now been transferred and consolidated as a single lawsuit in the U.S.

District Court for the Eastern District of New York 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.

The Company intends to file a motion to dismiss the Consolidated Amended Class Action Complaint, and its motion to dismiss is due on November 7, 2022.

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

6 unchanged sentences

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

Nurture, Inc., et al.

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

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

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

4 unchanged sentences

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

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

In the matter, Palmquist et al., v.

The Hain Celestial Group, Inc., pending in U.S.

District Court, Southern District of Texas, the Court has set a trial date of February 6, 2023, while the Company awaits decisions on dispositive motions.

In the matter, NC v.

The Hain Celestial Group, et al., pending in Superior Court for the State of California, County of Los Angeles, the Court has set a trial date of May 2, 2023.

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

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

15 unchanged sentences

Transactions between reportable segments were insignificant for all periods presented.

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

2022 2021 2022 2021

Three Months Ended September 30,

North America $ 288,396 $ 265,525

8 unchanged sentences

$ 15,823 $ 25,547

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

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

(a) In addition to general Corporate and Other expenses as described above, for the three months ended September 30, 2022, Corporate and Other included $ 94 of Productivity and transformation costs.

For the three months ended September 30, 2021, Corporate and Other included $ 2,057 of Productivity and transformation costs.

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

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

2022 2021 2022 2021

Turbocharge $ 194,526 $ 183,877 $ 544,084 $ 535,455

Targeted Investment 182,050 173,380 508,615 507,809

Three Months Ended September 30,

Growth 324,478 333,104

Fuel 95,726 97,254

1 unchanged sentence

Total $ 439,351 $ 454,903

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

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

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

(1) The Growth brands consist of our Turbocharge and Targeted Investment categories, which together are comprised of snacks, tea, baby, yogurt, plant-based meat, non-dairy beverages and personal care.

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

The Simplify brands include all other brands.

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

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

2022 2021 2022 2021

Three Months Ended September 30,

United States $ 259,508 $ 233,487

3 unchanged sentences

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

September 30,

2022 June 30,

3 unchanged sentences

Total $ 397,057 $ 412,096

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 incurred expenses in the ordinary course of business.

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

For the nine months ended March 31, 2022 and 2021, the Company incurred expenses of $ 467 and $ 12,806 , respectively, to SunOpta and affiliated entities.

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

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

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

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

The aggregate price paid by the Company for the Share Repurchase was $ 76,500 (see Note 3, Earnings per Share ), 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.

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

What changed 10-Q

Item 1. Financial Statements