What changed in this filing

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Item 1. Financial Statements

2023-05-09 compared with 2023-02-07 · 272 added, 215 removed, 717 unchanged (40% of the section changed)

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CONSOLIDATED BALANCE SHEETS (UNAUDITED)

DECEMBER 31, 2022 AND JUNE 30, 2022

MARCH 31, 2023 AND JUNE 30, 2022

(In thousands, except par values)

December 31, June 30,

March 31, June 30,

Current assets:

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2022 AND 2021

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2023 AND 2022

(In thousands, except per share amounts)

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

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

2023 2022 2023 2022

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Selling, general and administrative expenses 75,047 75,750 222,355 229,679

Intangibles and long-lived asset impairment 156,583 — 156,923 303

Amortization of acquired intangible assets 2,842 3,110 8,415 7,254

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3,933 1,679 5,692 8,448

Long-lived asset impairment 340 303 340 303

Operating income 27,389 32,021 43,212 57,568

Operating (loss) income ( 140,926 ) 35,164 ( 97,714 ) 92,732

Interest and other financing expense, net 13,421 3,224 31,910 7,672

Other income, net ( 1,062 ) ( 9,070 ) ( 2,852 ) ( 9,858 )

Income before income taxes and equity in net loss of equity-method investees 17,639 38,499 27,575 62,978

Provision for income taxes 6,357 7,145 8,988 11,687

Other expense (income), net 439 ( 712 ) ( 2,413 ) ( 10,570 )

(Loss) income before income taxes and equity in net loss of equity-method investees ( 154,786 ) 32,652 ( 127,211 ) 95,630

(Benefit) provision for income taxes ( 39,587 ) 7,738 ( 30,599 ) 19,425

Equity in net loss of equity-method investees 528 383 1,226 1,374

Net income $ 10,966 $ 30,889 $ 17,889 $ 50,300

Net income per common share:

Net (loss) income $ ( 115,727 ) $ 24,531 $ ( 97,838 ) $ 74,831

Net (loss) income per common share:

Basic $ ( 1.29 ) $ 0.27 $ ( 1.09 ) $ 0.80

Diluted $ ( 1.29 ) $ 0.27 $ ( 1.09 ) $ 0.79

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

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

Basic 89,421 91,139 89,369 94,099

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2022 AND 2021

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2023 AND 2022

(In thousands)

Three Months Ended

December 31, 2022 December 31, 2021

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

Tax (expense) benefit After-tax amount

Net income $ 10,966 $ 30,889

March 31, 2023 March 31, 2022

amount Tax (expense) benefit After-tax amount Pretax

amount Tax (expense) benefit After-tax amount

Net (loss) income $ ( 115,727 ) $ 24,531

Other comprehensive income (loss):

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$ 8,763 $ 1,638 $ 10,401 $ ( 15,434 ) $ ( 686 ) $ ( 16,120 )

Total comprehensive income $ 64,564 $ 30,633

Six Months Ended

December 31, 2022 December 31, 2021

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

Total comprehensive (loss) income $ ( 105,326 ) $ 8,411

Nine Months Ended

March 31, 2023 March 31, 2022

amount Tax (expense) benefit After-tax amount Pretax

amount Tax (expense) benefit After-tax amount

Net income $ 17,889 $ 50,300

Net (loss) income $ ( 97,838 ) $ 74,831

Other comprehensive income (loss):

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$ 12,950 $ ( 1,413 ) $ 11,537 $ ( 35,659 ) $ ( 1,680 ) $ ( 37,339 )

Total comprehensive income $ 19,025 $ 29,081

Total comprehensive (loss) income $ ( 86,301 ) $ 37,492

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2022

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2023

(In thousands, except par values)

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Balance at December 31, 2022 111,256 $ 1,113 $ 1,210,555 $ 786,987 21,837 $ ( 726,668 ) $ ( 163,346 ) $ 1,108,641

Net loss ( 115,727 ) ( 115,727 )

Other comprehensive income 10,401 10,401

Issuance of common stock pursuant to stock-based compensation plans

Employee shares withheld for taxes

3 ( 68 ) ( 68 )

Stock-based compensation expense 3,228 3,228

Balance at March 31, 2023 111,263 $ 1,113 $ 1,213,783 $ 671,260 21,840 $ ( 726,736 ) $ ( 152,945 ) $ 1,006,475

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2021

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022

(In thousands, except par values)

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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 )

Repurchase 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 STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2022 AND 2021

FOR THE NINE MONTHS ENDED MARCH 31, 2023 AND 2022

(In thousands)

Six Months Ended December 31,

Nine Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 17,889 $ 50,300

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

Net (loss) income $ ( 97,838 ) $ 74,831

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

Depreciation and amortization 37,909 34,396

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Stock-based compensation, net 10,657 12,289

Long-lived asset impairment 340 303

Intangibles and long-lived asset impairment 156,923 303

Gain on sale of assets ( 3,529 ) ( 8,869 )

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Accounts payable and accrued expenses ( 20,195 ) ( 16,435 )

Net cash (used in) provided by operating activities ( 2,652 ) 68,031

Net cash provided by operating activities 26,309 99,186

CASH FLOWS FROM INVESTING ACTIVITIES

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Borrowings under term loan — 300,000

Repayments under term loan ( 5,625 ) ( 1,875 )

Payments of other debt, net ( 2,116 ) ( 3,232 )

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Effect of exchange rate changes on cash ( 104 ) ( 5,836 )

Net (decrease) increase in cash and cash equivalents ( 22,075 ) 1,331

Net decrease in cash and cash equivalents ( 21,830 ) ( 18,063 )

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

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

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

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

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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 75 countries worldwide.

The Company operates under two reportable segments:

North America and International.

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

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

See Note 4, Acquisition and Disposition, for details.

BASIS OF PRESENTATION

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

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

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

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

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

Operating results for the six months ended December 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2023.

Operating results for interim periods are not necessarily indicative of the results for the full year.

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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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.

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 w as $ 189,794 and $ 64,133 during the six months ended December 31, 2022 and 2021, respectively.

The principal amount of receivables sold under these arrangements w as $ 290,856 and $ 112,607 during the nine months ended March 31, 2023 and 2022, 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.

Recently Adopted Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2020-04, "Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting".

Recently Issued and Adopted Accounting Pronouncements

In March 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2023-02, Investments — Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method which would allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits This ASU is effective for fiscal years beginning after December 15, 2023.

This standard will not have any 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".

The guidance allows for companies to:

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and (3) make a one-time sale and/or transfer of certain debt securities from held-to-maturity to available-for-sale or trading.

This ASU is available for adoption by the Company and applies prospectively to contract modifications and hedging relationships.

This ASU was adopted by the Company and applies prospectively to contract modifications and hedging relationships.

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

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848, which extends the provisions of Topic 848 to December 31, 2024.

Deferral of the Sunset Date of Topic 848, which extends certain provisions of Topic 848 to December 31, 2024.

ASU 2020-04 allows for different elections to be made at different points in time and the timing of those elections will be documented as applicable.

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EARNINGS 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:

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

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

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

2023 2022 2023 2022

Net income $ 10,966 $ 30,889 $ 17,889 $ 50,300

Net (loss) income $ ( 115,727 ) $ 24,531 $ ( 97,838 ) $ 74,831

Basic weighted average shares outstanding

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Effect of dilutive stock options, unvested restricted stock and unvested restricted share units (1)

198 772 192 544

Diluted weighted average shares outstanding

89,421 91,310 89,369 94,519

There were 372 and 316 restricted stock awards excluded from our calculation of diluted net income per sha re for the three months ended December 31, 2022 and 2021, respectively, as such awards were anti-dilutive.

There were 453 and 158 stock-based awards comprised of restricted stock awards and stock options excluded from the calculation of diluted net income per share for the six months ended December 31, 2022 and 2021, respectively, as such awards were anti-dilutive.

Additionally, 401 and 76 stock-based awards outstanding at December 31, 2022 and 2021, respectively, were excluded from the calculation of diluted net income per share for the three months ended December 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.

Furthermore, 286 and 76 stock-based awards outstanding at December 31, 2022 and 2021, respectively, were excluded from the calculation of diluted net income per share for the six months ended December 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.

(1) Due to a loss from operations, common stock equivalents are excluded from the calculation of diluted weighted average shares outstanding for the three and nine months ended March 31, 2023, respectively, as the impact would be anti-dilutive.

There were 329 and 508 restricted stock awards excluded from our calculation of diluted net (loss) income per share for the three months ended March 31, 2023 and 2022, respectively, as such awards were anti-dilutive.

There were 524 and 275 stock-based awards comprised of restricted stock awards and stock options excluded from the calculation of diluted net (loss) income per share for the nine months ended March 31, 2023 and 2022, respectively, as such awards were anti-dilutive.

Additionally, 399 and 231 stock-based awards outstanding at March 31, 2023 and 2022, respectively, were excluded from the calculation of diluted net (loss) income per share for the three months ended March 31, 2023 and 2022, respectively, as such awards

were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

Furthermore, 366 and 541 stock-based awards outstanding at March 31, 2023 and 2022, respectively, were excluded from the calculation of diluted net (loss) income per share for the nine months ended March 31, 2023 and 2022, 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

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

During the six months ended December 31, 2022, the Company did not repurchase any shares under the repurchase program.

As of December 31, 2022, the Company had $ 173,514 of remaining authorization under the share repurchase program.

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

Repurchases made during the six months ended December 31, 2021, were made under a previous Board authorization.

During the nine months ended March 31, 2023, the Company did not repurchase any shares under the repurchase program.

As of March 31, 2023, the Company had $ 173,514 of remaining authorization under the share repurchase program.

In addition, during the nine months ended March 31, 2022, the Company repurchased 6,552 shares under the repurchase program for a total of $ 265,420 excluding commissions, at an average price of $ 40.50 per share.

Repurchases made during the nine months ended March 31, 2022, were made under a previous Board authorization.

ACQUISITION AND DISPOSITION

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Consideration for the transaction consisted of cash, net of cash acquired, totaling $ 260,185 .

Of the total consideration, $ 259,985 was paid with the remaining $ 200 payable as of December 31, 2022.

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

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

During the three months ended December 31, 2022 the Company finalized the purchase price allocation and recognized a measurement period adjustment of $ 794 to acquired deferred tax assets, with a related impact to goodwill.

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 3.5 % of consolidated net sales for the three and six months ended December 31, 2022.

THWR's net sales included in our consolidated results were 2.2 % and 3.08 % of consolidated net sales for the three and nine months ended March 31, 2023 respectively.

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

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Unaudited supplemental pro forma information

Three Months Ended Six Months Ended

December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021

Three Months Ended Nine Months Ended

March 31, 2022 March 31, 2022

Net sales $ 502,939 $ 1,488,483

Net income from operations (1)

Diluted net income per common share from operations $ 0.12 $ 0.38 $ 0.20 $ 0.58

$ 26,970 $ 81,415

Diluted net (loss) income per common share from operations $ 0.30 $ 0.86

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

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.

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.

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

During the three months ended December 31, 2022, the Company deconsolidated the net assets of Westbrae, primarily consisting of $ 3,054 of goodwill, and recognized a pre-tax gain on sale of $ 3,359 .

During the nine months ended March 31, 2023, the Company deconsolidated the net assets of Westbrae, primarily consisting of $ 3,054 of goodwill, and recognized a pretax gain on sale of $ 3,488 .

Inventories consisted of the following:

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$ 296,433 $ 297,405

Depreciation expense for the three months ended December 31, 2022 and 2021 was $ 8,195 and $ 7,244 , respectively.

Depreciation expense for the six months ended December 31, 2022 and 2021 was $ 16,262 and $ 14,652 , respectively.

The Company recognized an impairment charge of $ 340 during the three months ended December 31, 2022 relating to a facility in the United States that is held for sale.

The facility had a net carrying value of $ 1,500 and $ 1,840 as of December 31, 2022 and June 30, 2022 respectively.

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

The Company determines if an arrangement is or contains a lease at inception.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

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

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

Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability;

thereafter, changes to lease payments due to rate or index changes are recorded as variable lease expense in the period incurred.

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

The components of lease expenses for the three and six months ended December 31, 2022 were as follows:

Three Months Ended Six Months Ended

December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021

Depreciation expense for the three months ended March 31, 2023 and 2022 was $ 9,649 and $ 8,292 , respectively.

Depreciation expense for the nine months ended March 31, 2023 and 2022 was $ 25,911 and $ 22,944 , respectively.

The Company recognized impairment charges of $ 244 and $ 584 during the three and nine months ended March 31, 2023 respectively, relating to a facility in the United States that is held for sale.

The facility had a net carrying value of $ 1,250 and $ 1,840 as of March 31, 2023 and June 30, 2022, respectively.

During the nine months ended March 31, 2022, the Company recognized a non-cash impairment charge of $ 303 relating to a facility in the United Kingdom.

The components of lease expenses for the three and nine months ended March 31, 2023 were as follows:

Three Months Ended Nine Months Ended

March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022

Operating lease expenses $ 6,657 $ 4,155 $ 13,869 $ 11,572

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Supplemental balance sheet information related to leases was as follows:

Leases Classification December 31, 2022 June 30, 2022

Leases Classification March 31, 2023 June 30, 2022

Operating lease ROU assets, net Operating lease right-of-use assets, net $ 98,306 $ 114,691

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Additional information related to leases is as follows:

Six Months Ended

December 31, 2022 December 31, 2021

Nine Months Ended

March 31, 2023 March 31, 2022

Supplemental cash flow information

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Finance leases $ 60 $ 251

ROU assets obtained in connection with an acquisition:

Operating leases $ — $ 4,098

Weighted average remaining lease term:

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Finance leases 4.5 % 4.0 %

(1) Includes adjustment for modification of an operating lease during the three months ended December 31, 2022 which resulted in a reduction of ROU assets and lease liabilities of $ 13,876 and $ 17,244 respectively, and recognition of a gain of $ 3,368 related to the modification.

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

(1) Includes adjustment for modification of an operating lease during the nine months ended March 31, 2023 which resulted in a reduction of ROU assets and lease liabilities of $ 13,876 and $ 17,244 respectively, and recognition of a gain of $ 3,368 related to the modification.

Maturities of lease liabilities as of March 31, 2023 were as follows:

Fiscal Year Operating leases Finance leases Total

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Translation and other adjustments, net 4,364 ( 2,583 ) 1,781

Balance as of December 31, 2022

Balance as of March 31, 2023

$ 696,231 $ 235,498 $ 931,729

(1) During the second quarter of fiscal year 2023, the Company finalized purchase accounting related to THWR resulting in a $ 794 reduction to goodwill.

(2) During December 2022, the Company completed the divestiture of Westbrae, a component of the United States reporting unit.

(1) During the nine months ended March 31, 2023, the Company finalized purchase accounting related to THWR resulting in a $ 794 reduction to goodwill.

See Note 4, Acquisition and Disposition.

(2) During the nine months ended March 31, 2023, the Company completed the divestiture of Westbrae, a component of the United States reporting unit.

Goodwill of $ 3,054 was assigned to the divested businesses on a relative fair value basis.

As a result of the same factors triggering the interim impairment tests for the ParmCrisps ® and Thinsters ® trademarks and other intangible assets discussed below, the Company completed an interim impairment test of goodwill in the U.S.

reporting unit during the three months ended March 31, 2023 and concluded that the reporting unit’s estimated fair value exceeded its carrying amount.

The fair value of the reporting unit was estimated using an income approach that utilized a discounted cash flow model.

Other Intangible Assets

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Trademarks and tradenames (1)

$ 266,445 $ 379,466

Amortized intangible assets:

Other intangibles (2)

159,027 199,448

Accumulated amortization ( 110,936 ) ( 101,381 )

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Net other intangible assets $ 314,536 $ 477,533

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

(1) The gross carrying value of trademarks and trade names is reflected net of $ 205,373 and $ 94,873 of accumulated impairment charges as of March 31, 2023 and June 30, 2022, respectively.

(2) The reduction in carrying value of other intangible assets as of March 31, 2023 reflected a non-cash impairment charge of $ 45,798 recognized in the third quarter of 2023.

During the three months ended March 31, 2023, as a result of a decline in actual and projected performance and cash flows of the ParmCrisps ® and Thinsters ® brands, the Company determined that interim impairment tests of these indefinite-lived trademarks were required to be performed.

During the three months ended March 31, 2023, the Company recorded non-cash impairment charges of $ 102,000 and $ 8,500 for the ParmCrisps ® and Thinsters ® trademarks, respectively, to reduce the carrying value of such intangible assets to their estimated fair value.

The fair value was determined using the relief from royalty method, and impairment charges were recorded within intangibles and long-lived asset impairment on the Consolidated Statements of Operations.

The assets are part of the North America reportable segment and have a remaining aggregate carrying value of $ 12,500 as of March 31, 2023.

As a result of the same factors triggering the interim impairment tests for the ParmCrisps ® and Thinsters ® trademarks discussed above, the Company completed interim impairment tests of the ParmCrisps ® and Thinsters ® asset groups, which were primarily comprised of amortizable customer relationships.

The Company determined that the ParmCrisps ® asset group’s carrying amount exceeded the estimated fair value.

During the three months ended March 31, 2023, the Company recorded non-cash impairment charges of $ 45,798 to reduce the carrying value of the ParmCrisps ® customer relationships, the primary asset in the asset group, to their estimated fair

Impairment charges were recorded within intangibles and long-lived asset impairment on the Consolidated Statements of Operations.

The fair value of the Thinsters ® asset group exceeded its carrying amount.

The assets are part of the North America reportable segment and have a remaining aggregate carrying value of $ 19,767 as of March 31, 2023.

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 December 31, Six Months Ended December 31,

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

2023 2022 2023 2022

Amortization of acquired intangibles $ 2,842 $ 3,110 $ 8,415 $ 7,255

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

Fiscal Year Ending June 30,

2023 (remainder of year) 2024 2025 2026 2027

Estimated amortization expense $ 2,036 $ 6,298 $ 5,245 $ 4,762 $ 4,073

The weighted average remaining amortization period of amortized intangible assets is 8.4 years.

DEBT AND BORROWINGS

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Following the Amendment Period, the maximum consolidated secured leverage ratio will be 4.25 :1.00, subject to possible temporary increase following certain corporate acquisitions.

During the Amendment Period, loans under the Credit Agreement will bear interest at (a) the Secured Overnight Financing Rate, plus a credit spread adjustment of 0.10 % (as adjusted, “Term SOFR”) plus 2.0 % per annum or (b) the Base Rate (as defined in the Credit Agreement) plus 1.0 % per annum.

Following the Amendment Period, loans will bear interest at rates based on (a) Term SOFR plus a rate ranging from 0.875 % to 1.750 % per annum or (b) the Base Rate plus a rate ranging from 0.00 % to 0.750 % per annum, the relevant rate in each case being the Applicable Rate.

During the Amendment Period, loans under the Credit Agreement will bear interest at (a) Term SOFR, plus a credit spread adjustment of 0.10 % (as adjusted, “Term SOFR”) plus 2.0 % per annum or (b) the Base Rate (as defined in the Credit Agreement) plus 1.0 % per annum.

Following the Amendment Period, loans will bear interest at rates based on (a) Term SOFR plus a rate ranging from 0.875 %

to 1.750 % per annum or (b) the Base Rate plus a rate ranging from 0.00 % to 0.750 % per annum, the relevant rate in each case being the Applicable Rate.

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

The weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2022 was 5.59 %.

The weighted average interest rate on outstanding borrowings under the Credit Agreement at March 31, 2023 was 5.90 %.

Additionally, the Credit Agreement contains a Commitment Fee (as defined in the Credit Agreement) 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.

As of December 31, 2022, there were $ 587,000 of loans under the Revolver, $ 292,500 of Term Loans, and $ 6,769 of letters of credit outstanding under the Credit Agreement.

As of December 31, 2022, $ 206,231 was available under the Credit Agreement, subject to compliance with the financial covenants.

As of December 31, 2022, the Company was in compliance with all associated covenants.

As of March 31, 2023, there were $ 567,000 of loans under the Revolver, $ 290,625 of Term Loans, and $ 4,054 of letters of credit outstanding under the Credit Agreement.

As of March 31, 2023, $ 228,946 was available under the Credit Agreement, subject to compliance with the financial covenants.

As of March 31, 2023, the Company was in compliance with all associated covenants.

Credit Agreement Issuance Costs

1 unchanged sentence

Of the total deferred costs, $ 1,396 were associated with the Revolver and are being amortized on a straight-line basis within Other assets on our Consolidated Balance Sheets, and $ 520 are being amortized on a straight-line basis, which approximates the effective interest method, as an adjustment to the carrying amount of the Term Loans as a component of Interest and other financing expense, net over the term of the Credit Agreement.

Maturities of all debt instruments at December 31, 2022, are as follows:

Due in Fiscal Year Amount

Remainder of 2023 $ 3,729

Total debt and borrowings $ 878,402

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.

1 unchanged sentence

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 was an expense of 36.0 % and 18.6 % for the three months ended December 31, 2022 and 2021, respectively.

The effective income tax rate was an expense of 32.6 % and 18.6 % for the six months ended December 31, 2022 and 2021, respectively.

The effective income tax rate for the six months ended December 31, 2022 was impacted by the gain on the sale of Westbrae, an operating lease modification during the second quarter, severance with respect to our former CEO (as part of the limitation on the deductibility of executive compensation), stock-based compensation and uncertain tax positions.

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

The effective income tax rate was a benefit of 25.6 % and an expense of 23.7 % for the three months ended March 31, 2023 and 2022, respectively.

The effective income tax rate was a benefit of 24.1 % and an expense of 20.3 % for the nine months ended March 31, 2023 and 2022, respectively.

The effective income tax rate for the nine months ended March 31, 2023 was impacted by ParmCrisps ® and Thinsters ® trademarks and ParmCrisps ® asset group impairment charges (See Note 8, Goodwill and Other Intangible Assets) , gain on the sale of Westbrae, an operating lease modification during the second quarter, severance with respect to our former CEO (as part of the limitation on the deductibility of executive compensation), stock-based compensation and changes in uncertain tax positions.

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

1 unchanged sentence

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

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

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

2023 2022 2023 2022

10 unchanged sentences

Amount of loss reclassified from AOCL into expense (1)

1,588 — 240 —

Deferred (losses) gains on net investment hedging instruments:

4 unchanged sentences

Net change in AOCL $ 10,401 $ ( 16,120 ) $ 11,537 $ ( 37,339 )

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

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

7 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 December 31, Six Months Ended December 31,

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

2023 2022 2023 2022

5 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 six months ended December 31, 2022 is as follows:

A summary of the restricted stock activity (including all RSAs, RSUs and PSUs) for the nine months ended March 31, 2023 is as follows:

Number of Shares

5 unchanged sentences

Forfeited ( 465 ) $ 33.53

Non-vested RSAs, RSUs and PSUs outstanding at December 31, 2022 1,292 $ 29.37

The table above includes a total of 299 shares granted during the six months ended December 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 March 31, 2023 1,341 $ 26.68

The table above includes a total of 420 shares granted during the nine months ended March 31, 2023 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.

Vested shares during the six months ended December 31, 2022 include a total o f 5 shares related to certain performance-based metrics being met and a total of 161 shares related to service-based RSUs .

Vested shares during the nine months ended March 31, 2023 include a total o f 5 shares related to certain performance-based metrics being met and a total of 168 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 December 31, 2022, 299 of such shares were outstanding under the 2023 – 2025 LTIP while 82 shares were outstanding under the 2022 – 2024 LTIP.

At March 31, 2023, 321 of such shares were outstanding under the 2023 – 2025 LTIP while 68 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:

Six Months Ended December 31,

Nine Months Ended March 31,

Fair value of RSAs, RSUs and PSUs granted $ 24,560 $ 37,005

1 unchanged sentence

Tax benefit recognized from restricted shares vesting $ 520 $ 3,643

At December 31, 2022, there was $ 26,765 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 2.0 years.

At March 31, 2023, there was $ 22,478 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 1.8 years.

2023-2025 LTIP

During the six months ended December 31, 2022, the Company granted market-based PSU awards under the LTI Program with a total target payout of 299 shares of common stock.

During the nine months ended March 31, 2023, the Company granted market-based PSU awards under the LTI Program with a total target payout of 420 shares of common stock.

Such PSU awards (the "Absolute TSR PSUs") will vest, if at all, 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;

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

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

Grant date fair values are calculated using a Monte-Carlo simulation model with grant date fair values per target share and related valuation assumptions as follows, except for shares gran ted after December 31, 2022:

Absolute TSR PSUs Relative TSR PSUs

5 unchanged sentences

CEO Succession

On November 22, 2022, the Board approved a succession plan pursuant to which Mark L.

Schiller transitioned from his position as President and Chief Executive Officer of the Company effective as of December 31, 2022 (the “Transition Date”).

Schiller remains a director on the Board following the Transition Date.

As of the Transition Date, certain of Mr.

Schiller's stock-based compensation awards were modified and others were forfeited.

Additionally, Mr.

Schiller will receive severance totaling $ 4,725 , paid in installments over a two-year period following the Transition Date.

Severance, including payroll taxes and other costs, was recognized during the three months ended December 31, 2022, and is accrued at December 31, 2022.

The Board appointed Wendy P.

On November 22, 2022, the Board approved a succession plan pursuant to which the Board appointed Wendy P.

Davidson to the role of President and Chief Executive Officer and as a director on the Board, in each case effective as of January 1, 2023 (the “Start Date”).

6 unchanged sentences

Davidson forfeited by leaving her former employer, on the Start Date Ms.

Davidson also received a one-time make-whole RSU award of 95 RSUs that will vest in one-third (1/3) installments on each of the first, second and third anniversaries of the Start Date.

Davidson also received a one-time make-whole RSU award of 95 RSUs that will vest i n one-third (1/3) installments on each of the first, second and third anniversaries of the Start Date.

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

Absolute TSR PSUs Relative TSR PSUs

Grant date fair value (per target share) $ 13.84 $ 19.54

Risk-free interest rate 4.28 % 4.28 %

Expected dividend yield — —

Expected volatility 40.70 % 28.20 %

Expected term 3.00 years 3.00 years

As part of the succession plan, Mark L.

Schiller transitioned from his position as President and Chief Executive Officer of the Company effective as of December 31, 2022 (the “Transition Date”).

Schiller remains a director on the Board following the Transition Date.

As of the Transition Date, certain of Mr.

Schiller's stock-based compensation awards were modified and others were forfeited.

Additionally, Mr.

Schiller will receive severance totaling $ 4,725 , paid in installments over a two-year period following the Transition Date.

Severance, including payroll taxes and other costs, was recognized during the nine months ended March 31, 2023, and unpaid amounts are accrued at March 31, 2023.

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”).

2 unchanged sentences

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

At December 31, 2022 and June 30, 2022, the carrying value of the Company’s investment in Founders Table was $ 8,288 and $ 9,491 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

At March 31, 2023 and June 30, 2022, the carrying value of the Company’s investment in Founders Table was $ 7,788 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 remaining investments were $ 4,972 and $ 4,965 as of December 31, 2022 and June 30, 2022, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

The carrying value of the remaining investments were $ 4,932 and $ 4,965 as of March 31, 2023 and June 30, 2022, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels.

4 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 December 31, 2022:

The following table presents assets and liabilities measured at fair value on a recurring basis as of March 31, 2023:

Derivative financial instruments $ 8,858 $ — $ 8,858 $ —

Equity investment 2 2 — —

Total $ 15,103 $ 2 $ 15,101 $ —

Derivative financial instruments $ 540 $ — $ 540 $ —

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 $ —

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

There were no transfers of financial instruments between the three levels of fair value hierarchy during the nine months ended March 31, 2023 or 2022.

Derivative Instruments

8 unchanged sentences

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

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

As a result, all of the derivatives held as of March 31, 2023 and June 30, 2022 were classified as Level 2 within the fair value hierarchy.

Nonrecurring Fair Value Measurements

The Company measures certain non-financial assets at fair value on a nonrecurring basis including goodwill, intangible assets, property and equipment and right-of-use lease assets.

These assets were initially measured and recognized at amounts equal to the fair value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation.

Periodically, these assets are tested for impairment by comparing their respective carrying values to the estimated fair value of the reporting unit or asset group in which they reside.

In the event any of these assets were to become impaired, the Company would recognize an impairment expense equal to the amount by which the carrying value of the reporting unit, impaired asset or asset group exceeds its estimated fair value.

For indefinite-lived intangible assets, the relief from royalty approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates in the category of intellectual property, discount rates and other variables.

Fair value measurements of reporting units are estimated using an income approach involving discounted cash flow models that contain certain Level 3 inputs requiring significant management judgment, including projections of economic conditions, customer demand and changes in competition, revenue growth rates, gross profit margins, operating margins, capital expenditures, working capital requirements, terminal growth rates and discount rates.

Fair value measurements of the reporting units associated with our goodwill balances and our indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative

analysis is performed.

The Company bases its fair value estimates on assumptions its management believes to be reasonable, but which are unpredictable and inherently uncertain.

During the three months ended March 31, 2023, the Company recorded non-cash impairment charges of $ 102,000 and $ 8,500 for the ParmCrisps ® and Thinsters ® trademarks, respectively.

Due to the same factors triggering the interim impairment tests for the ParmCrisps ® and Thinsters ® trademarks, the Company completed an interim impairment test of the ParmCrisps ® and Thinsters ® asset group and recorded a non-cash impairment charges of $ 45,798 for the ParmCrisps ® asset group (see Note 8, Goodwill and Other Intangible Assets) .

As of March 31, 2023, THWR intangible assets were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair value of $ 32,267 .

DERIVATIVES AND HEDGING ACTIVITIES

14 unchanged sentences

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

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

During the three and nine months ended March 31, 2023, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

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

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

During the remaining six months of fiscal 2023, the Company estimates that an additional $ 3,664 will be rec lassified as a decrease to interest expense.

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

During the remaining three months of fiscal 2023, the Company estimates that an additional $ 1,873 will be reclassified as a decrease to interest expense.

As of March 31, 2023, 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

3 unchanged sentences

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.

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.

1 unchanged sentence

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

During the remaining six months of fiscal 2023, the Company estimates that an additional $ 46 relating to cro ss-currency swaps will be reclassified as an increase to interest expense.

As of December 31, 2022, 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

Foreign currency forward contract 3 £ 2,590 € 3,000

During the remaining three months of fiscal 2023, the Company estimate s that no amount relating to cross-currency swaps will be reclassified to interest expense.

As of March 31, 2023, the Company had no outstanding foreign currency derivatives that were used to hedge its foreign exchange risks.

Net Investment Hedges

7 unchanged sentences

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

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

As of March 31, 2023, 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

7 unchanged sentences

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 six months of fiscal 2023, the Company estimates that an additional $ 239 relating to cross currency swaps will be reclassified as a decrease to interest expense.

As of December 31, 2022, the Company had the following outstanding foreign currency derivatives that were used to hedge changes in fair value attributable to foreign exchange risk:

During the remaining three months of fiscal 2023, the Company estimates that an additional $ 121 relating to cross currency swaps will be reclassified as a decrease to interest expense.

As of March 31, 2023, 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 December 31, 2022 and June 30, 2022, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges:

As of March 31, 2023 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

1 unchanged sentence

2023 June 30,

2022 December 31,

2022 March 31,

2023 June 30,

1 unchanged sentence

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 December 31, 2022:

Asset Derivatives

Balance Sheet Location Fair Value

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, 2023:

Asset Derivatives Liability Derivatives

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Derivatives designated as hedging instruments:

Interest rate swaps Prepaid expenses and other current assets $ 7,240

Interest rate swaps Other noncurrent assets 5,250

Cross-currency swaps Prepaid expenses and other current assets 2,365

Cross-currency swaps Other noncurrent assets 246

Interest rate swaps Prepaid expenses and other current assets $ 6,217 Accrued expenses and other current liabilities $ —

Interest rate swaps Other noncurrent assets 277 Other noncurrent liabilities —

Cross-currency swaps Prepaid expenses and other current assets 2,364 Accrued expenses and other current liabilities —

Cross-currency swaps Other noncurrent assets — Other noncurrent liabilities 540

Total derivatives designated as hedging instruments $ 8,858 $ 540

8 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 for the three months ended December 31, 2022 and 2021:

The following table presents the pretax effect of cash flow hedge accounting on AOCL and Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022:

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 December 31, Three Months Ended December 31,

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

2023 2022 2023 2022

3 unchanged sentences

Total $ ( 4,285 ) $ 2,541 $ 1,746 $ 700

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

The following table presents the pretax effect of cash flow hedge accounting on AOCL and Consolidated Statements of Operations for the nine months ended March 31, 2023 and 2022:

Six Months Ended December 31,

Nine Months Ended March 31,

2023 2022 2023 2022

3 unchanged sentences

Total $ 10,375 $ 4,486 $ 4,651 $ 1,919

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

The following table presents the pretax 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, 2023 and 2022:

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

Three Months Ended December 31, 2022 Three Months Ended December 31, 2021

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

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

7 unchanged sentences

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

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

Six Months Ended December 31, 2022

Six Months Ended December 31, 2021

Nine Months Ended March 31, 2023

Nine Months Ended March 31, 2022

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

7 unchanged sentences

Amount of gain reclassified from AOCL into income $ — $ — $ — $ 107 $ — $ —

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

The following table presents the pretax effect of fair value hedge accounting on AOCL and Consolidated Statements of Operations as of the three months ended March 31, 2023 and 2022:

Derivatives in Fair Value Hedging Relationships Amount of Loss 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 December 31, Three Months Ended December 31,

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

2023 2022 2023 2022

Cross-currency swaps $ ( 38 ) $ — Interest and other financing expense, net / Other expense (income), net $ 121 $ —

The following table presents the pre-tax effect of fair value hedge accounting on AOCL and Consolidated Statements of Operations as of the six months ended December 31, 2022 and 2021:

The following table presents the pretax effect of fair value hedge accounting on AOCL and Consolidated Statements of Operations as of the nine months ended March 31, 2023 and 2022:

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)

Six Months Ended December 31,

Nine Months Ended March 31,

2023 2022 2023 2022

Cross-currency swaps $ 85 $ — Interest and other financing expense, net / Other expense (income), net $ 367 $ —

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 for the three months ended of December 31, 2022 and 2021:

The following table presents the pretax effect of the Company’s derivative financial instruments electing fair value hedge accounting on the Consolidated Statements of Operations for the three months ended of March 31, 2023 and 2022:

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

Three Months Ended December 31, 2022 Three Months Ended December 31, 2021

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

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

3 unchanged sentences

Amount of loss reclassified from AOCL into income $ — $ ( 210 ) $ — $ — $ — $ —

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

Six Months Ended December 31, 2022

Six Months Ended December 31, 2021

Nine Months Ended March 31, 2023

Nine Months Ended March 31, 2022

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

3 unchanged sentences

Amount of loss reclassified from AOCL into income $ — $ ( 506 ) $ — $ — $ — $ —

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

The following table presents the pretax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022:

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

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

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

2023 2022 2023 2022

Cross-currency swaps $ ( 144 ) $ 1,569 Interest and other financing expense, net $ 484 $ 143

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

The following table presents the pretax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the nine months ended March 31, 2023 and 2022:

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

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

Nine Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

1 unchanged sentence

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.

The Company has agreements with each of its derivative counterparties that contain a cross-default provision upon certain defaults by the Company on any of its indebtedness.

COMMITMENTS AND CONTINGENCIES

11 unchanged sentences

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

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

Securities Litigation (the

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

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

35 unchanged sentences

The Plaintiffs filed their consolidated amended complaint under seal on October 26, 2017.

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

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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 Com plaint in the Consolidated Securities Action.

The District Court has extended the temporary stay through April 30, 2023.

The District Court has extended the temporary stay through September 5, 2023.

Baby Food Litigation

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The plaintiffs filed their opposition on December 22, 2022, and the Company filed its reply brief on January 20, 2023.

The Court scheduled a status conference for May 9, 2023 to address the status of the case, including the Company’s pending motion to dismiss.

One consumer class action is pending in New York Supreme Court, Nassau County, which the court has stayed in deference to the Consolidated Proceeding.

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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 six 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.

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

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

• In the matter, Palmquist et al.

The Hain Celestial Group, Inc.

, pending in U.S.

District Court, Southern District of Texas, the trial proceedings commenced on February 6, 2023.

The Hain Celestial Group, Inc., a jury trial commenced on February 6, 2023 in the U.S.

District Court, Southern District of Texas.

The Company moved for Directed Verdict at the close of Plaintiffs’ case.

The Court granted the Company’s motion, finding no liability for the Company.

The Court entered Final Judgment in the Company's favor on March 3, 2023.

On April 3, 2023, Plaintiffs filed their Notice of Appeal in the Fifth Circuit.

Plaintiffs will have 40 days after the Fifth Circuit receives the District Court record within which to file their appellate brief, barring any extensions.

• 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 October 4, 2023.

The parties are currently engaging in discovery.

Fact discovery is set to close on March 24, 2023, and expert discovery is set to close on May 5, 2023.

The Hain Celestial Group, et al., pending in Superior Court for the State of California, County of Los Angeles, discovery has closed and the Court has set a trial date of October 4, 2023.

• There are currently two Nevada state court cases pending in Clark County District Court.

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and Buenaventura v.

Beech-Nut Nutrition Company, Inc., et al.

, have been consolidated for the purposes of discovery only.

Beech-Nut Nutrition Company, Inc., et al., have been consolidated for the purposes of discovery only.

In Benitez, the Court issued a scheduling order in September 2022.

Pursuant to this Order, discovery will close on March 7, 2024 and the case is set the case for trial starting on July 29, 2024.

Pursuant to this Order, discovery will close on March 7, 2024 and the case is set for trial starting on July 29, 2024.

The parties have engaged in limited discovery.

There has been no further activity in the Buenaventura case.

• In Watkins v.

Plum, PBC, et al.

, currently pending in the United States District Court for the Eastern District of Louisiana, the Court has set the case for trial beginning on August 28, 2023.

The parties have started to engage in discovery.

Plum, PBC, et al., currently pending in the United States District Court for the Eastern District of Louisiana, the Court has set the case for trial beginning on August 28, 2023.

The parties have agreed to ask the Court to move the trial date to no earlier than March 2024 and have started to engage in discovery.

• On January 9, 2023, Plaintiffs in P.A.

Hain Celestial Group, Inc.

Hain Celestial Group, Inc., et al.

filed their First Amended Complaint in the Circuit Court of the First Circuit, State of Hawai’i.

Defendants have not yet responded to this Complaint.

On March 8, 2023, the Company filed its Answer to Plaintiff’s First Amended Complaint.

The case is set for trial starting on January 23, 2025.

• On February 3, 2023, Plaintiff in Pourdanesh v.

Hain Celestial Group, Inc.

filed his Complaint in the Superior Court for the State of California, County of Los Angeles.

Plaintiff served his Complaint on the Company on March 28, 2023.

Following a meet and confer with Plaintiff’s counsel, Plaintiff has agreed to file an Amended Complaint identifying the products at issue.

The case is stayed until the Initial Status Conference on May 17, 2023.

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

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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”), the Company's Chief Executive Officer, assesses our performance and allocates resources.

We use segment net sales and operating income to evaluate performance and to allocate resources.

We believe these measures are most relevant in order to analyze segment results and trends.

Segment operating income excludes certain general corporate expenses (which are a component of selling, general and administrative expenses), impairment and acquisition related expenses, restructuring, integration, and other charges.

This structure is in line with how our Chief Operating Decision Maker, the Company's Chief Executive Officer, assesses our performance and allocates resources.

The Company uses segment net sales and operating income to evaluate performance and to allocate resources.

The Company believes these measures are most relevant in order to analyze segment results and trends.

Segment operating income excludes certain general corporate expenses (which are a component of selling, general and administrative expenses) and acquisition related expenses, restructuring, integration, and other charges.

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

Transactions between reportable segments were insignificant for all periods presented.

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

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

2023 2022 2023 2022

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$ 455,243 $ 502,939 $ 1,348,802 $ 1,434,783

Operating Income (Loss):

North America $ 32,262 $ 27,162 $ 56,707 $ 44,004

Operating (Loss) Income:

North America (a)

$ ( 136,127 ) $ 28,526 $ ( 79,420 ) $ 72,530

International 13,604 18,303 33,219 69,740

( 122,523 ) 46,829 ( 46,201 ) 142,270

Corporate and Other (a)

Corporate and Other (b)

( 18,403 ) ( 11,665 ) ( 51,513 ) ( 49,538 )

$ ( 140,926 ) $ 35,164 $ ( 97,714 ) $ 92,732

(a) In addition to general Corporate and Other expenses as described above, for the three and six months ended December 31, 2022, Corporate and Other included $ 436 and $ 530 of Productivity and transformation costs, respectively.

For the three and six months ended December 31, 2021, Corporate and Other included $ 953 and $ 3,010 of Productivity and transformation costs, respectively.

(a) North America operating loss includes non-cash impairment charges of $ 156,298 related to ParmCrisps ® and Thinsters ® trademarks and ParmCrisps ® customer relationships for the three and nine months ended March 31, 2023 (see Note 8, Goodwill and Other Intangible Assets).

(b) In addition to general Corporate and Other expenses as described above, for the three and nine months ended March 31, 2023, Corporate and Other included $ 2,603 and $ 3,133 of Productivity and transformation costs, respectively.

For the three and nine months ended March 31, 2022, Corporate and Other included $ 218 and $ 3,228 of Productivity and transformation costs, respectively.

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

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

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

2023 2022 2023 2022

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

What changed 10-Q

Item 1. Financial Statements