HAIN CELESTIAL GROUP INC 10-K

Item 8. Financial Statements and Supplementary Data The following consolidated financial statements of The Hain Celestial Group, Inc. and subsidiaries are included in Item 8: Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) Consolidated Balance Sheets - June 30, 2023 and 2022 Consolidated Statements of Operations - Fiscal Years ended June 30, 2023, 2022 and 2021 Consolidated Statements of Comprehensive (Loss) Income - Fiscal Years ended June 30, 2023, 2022 and 2021 Consolidated Statements of Stockholders’ Equity - Fiscal Years ended June 30, 2023, 2022 and 2021 Consolidated Statements of Cash Flows - Fiscal Years ended June 30, 2023, 2022 and 2021 Notes to Consolidated Financial Statements The following consolidated financial statement schedule of The Hain Celestial Group, Inc. and subsidiaries is included in Item 15(a): Schedule II - Valuation and qualifying accounts All other schedules for which provision is made in the applicable accounting regulation of the SEC are not required under the related instructions or are inapplicable and therefore have been omitted. 41 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of The Hain Celestial Group, Inc. and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of The Hain Celestial Group, Inc. and Subsidiaries (the Company) as of June 30, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2023, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2023, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated August 24, 2023 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 42 Table of Contents Revenue Recognition Description of the Matter For the year ended June 30, 2023, the Company’s reported net sales was $1.8 billion. As described in Note 2 of the consolidated financial statements, the Company provides certain retailers and distributors with trade and promotional incentive programs, which results in variable consideration and the Company having to estimate the expected costs of these programs that are often settled in a period after the sale taking place. The estimated costs of these programs are recorded as a reduction to revenue at the time a product is sold to the customer. The measurement of trade promotions and sales incentive programs involves the use of judgment related to estimates of expected levels of performance and redemption rates. Auditing the estimate of trade promotions and sales incentives is complex because the revenue recognized is determined based on significant management estimates. In particular, estimates are made for expected levels of performance and redemption rates. These estimates are based on historical performance of the retailer or distributor, types and levels of promotions, and expected deviations from historical trends. Changes in these assumptions can have a significant impact on the amount of the revenue recognized. The completeness of the trade promotions and sales incentives estimate could also be impacted by any undisclosed side arrangements with customers. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s trade and promotional incentive program process. For example, we tested controls over management’s review of significant assumptions, such as expected sales and consumption activity, management’s validation of the completeness and accuracy of the data used in making their estimates, and other controls such as their retrospective review analysis. Among other tests, we tested the results of the Company's retrospective review analyses performed on their prior year and current year trade and promotional incentive program reserves, evaluated the assumptions used by comparing them to historical trends and third-party source information, and performed detailed transactional testing of customer deduction data. Additionally, we obtained confirmations from Company sales representatives to assess the completeness of incentive programs. 43 Table of Contents Valuation of Certain Indefinite and Definite Lived Intangible Assets Description of the Matter At June 30, 2023, the Company’s indefinite lived tradename intangible assets of ParmCrisps ® and Thinsters ® were $8.0 million and $4.5 million, respectively and the definite lived assets within the ParmCrisps ® asset group were $20.7 million. As described in Note 2 of the consolidated financial statements, indefinite lived intangible assets are tested qualitatively or quantitatively for impairment at least annually, or more frequently when necessary. If the fair value of the indefinite lived intangible asset is less than its carrying amount, an impairment loss is recognized. Additionally, as described in Note 2, if indicators of impairment are present within an asset group and the undiscounted cash flows of the asset group are less than its carrying value, an impairment loss is recognized based on the amount, if any, by which the carrying value exceeds its fair value. Auditing the Company’s valuation of indefinite and definite lived intangible assets was especially complex due to the significant judgments required to estimate the fair values. For example, the fair value estimates were sensitive to significant assumptions, such as projections of future revenue, operating margins, royalty rates, terminal growth rates and discount rates, which are affected by expectations about future market or economic conditions. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s indefinite and definite lived intangible asset impairment evaluation process. For example, we tested controls over management’s review of the significant assumptions used in the fair value calculations as well as management’s review of the data used in those valuations. To test the estimated fair value of the Company’s indefinite lived tradename intangible assets of ParmCrisps and Thinsters and definite lived assets within the ParmCrisps asset group, we performed audit procedures that included, among others, testing the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by the Company in its analyses. We compared the significant assumptions used by management to current industry and economic trends while also considering changes to the Company’s business model, customer base and product mix. We assessed the historical accuracy of management’s estimates and significant assumptions, such as projections of revenue growth rates and profitability by comparing management’s past projections to actual performance. We involved valuation specialists to assist in evaluating the Company’s methodology and key assumptions, including the royalty rates, terminal growth rates, and the discount rates. We also performed sensitivity analyses to evaluate the impact that changes in the significant assumptions would have on the fair value of the indefinite and definite lived intangible assets. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1994. Jericho, New York August 24, 2023 44 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2023 AND JUNE 30, 2022 (In thousands, except par values) June 30, 2023 2022 ASSETS Current assets: Cash and cash equivalents $ 53,364 $ 65,512 Accounts receivable, less allowance for doubtful accounts of $ 2,750 and $ 1,731 , respectively 160,948 170,661 Inventories 310,341 308,034 Prepaid expenses and other current assets 65,128 54,079 Assets held for sale 1,250 1,840 Total current assets 591,031 600,126 Property, plant and equipment, net 296,325 297,405 Goodwill 938,640 933,796 Trademarks and other intangible assets, net 298,105 477,533 Investments and joint ventures 12,798 14,456 Operating lease right-of-use assets, net 95,894 114,691 Other assets 25,846 20,377 Total assets $ 2,258,639 $ 2,458,384 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 134,780 $ 174,765 Accrued expenses and other current liabilities 88,520 86,833 Current portion of long-term debt 7,567 7,705 Total current liabilities 230,867 269,303 Long-term debt, less current portion 821,181 880,938 Deferred income taxes 72,086 95,044 Operating lease liabilities, noncurrent portion 90,014 107,481 Other noncurrent liabilities 26,584 22,450 Total liabilities 1,240,732 1,375,216 Commitments and contingencies (Note 17) Stockholders’ equity: Preferred stock - $ .01 par value, authorized 5,000 shares; issued and outstanding: none — — Common stock - $ .01 par value, authorized 150,000 shares; issued: 111,339 and 111,090 shares, respectively; outstanding: 89,475 and 89,302 shares, respectively 1,113 1,111 Additional paid-in capital 1,217,549 1,203,126 Retained earnings 652,561 769,098 Accumulated other comprehensive loss ( 126,216 ) ( 164,482 ) 1,745,007 1,808,853 Less: Treasury stock, at cost, 21,864 and 21,788 shares, respectively ( 727,100 ) ( 725,685 ) Total stockholders’ equity 1,017,907 1,083,168 Total liabilities and stockholders’ equity $ 2,258,639 $ 2,458,384 See notes to consolidated financial statements. 45 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FISCAL YEARS ENDED JUNE 30, 2023, 2022 AND 2021 (In thousands, except per share amounts) Fiscal Year Ended June 30, 2023 2022 2021 Net sales $ 1,796,643 $ 1,891,793 $ 1,970,302 Cost of sales 1,400,229 1,464,352 1,478,687 Gross profit 396,414 427,441 491,615 Selling, general and administrative expenses 289,233 300,469 301,776 Intangibles and long-lived asset impairment 175,501 1,903 57,920 Amortization of acquired intangible assets 10,016 10,214 8,931 Productivity and transformation costs 7,284 10,174 15,608 Operating (loss) income ( 85,620 ) 104,681 107,380 Interest and other financing expense, net 45,783 12,570 8,654 Other income, net ( 1,822 ) ( 11,380 ) ( 10,067 ) (Loss) income from continuing operations before income taxes and equity in net loss of equity-method investees ( 129,581 ) 103,491 108,793 (Benefit) provision for income taxes ( 14,178 ) 22,716 41,093 Equity in net loss of equity-method investees 1,134 2,902 1,591 Net (loss) income from continuing operations $ ( 116,537 ) $ 77,873 $ 66,109 Net income from discontinued operations, net of tax — — 11,255 Net (loss) income $ ( 116,537 ) $ 77,873 $ 77,364 Net (loss) income per common share: Basic net (loss) income per common share from continuing operations $ ( 1.30 ) $ 0.84 $ 0.66 Basic net income per common share from discontinued operations — — 0.11 Basic net (loss) income per common share $ ( 1.30 ) $ 0.84 $ 0.77 Diluted net (loss) income per common share from continuing operations $ ( 1.30 ) $ 0.83 $ 0.65 Diluted net income per common share from discontinued operations — — 0.11 Diluted net (loss) income per common share $ ( 1.30 ) $ 0.83 $ 0.76 Shares used in the calculation of net (loss) income per common share: Basic 89,396 92,989 100,235 Diluted 89,396 93,345 101,322 See notes to consolidated financial statements. 46 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME FISCAL YEARS ENDED JUNE 30, 2023, 2022 AND 2021 (In thousands) Fiscal Year Ended June 30, 2023 Fiscal Year Ended June 30, 2022 Fiscal Year Ended June 30, 2021 Pretax amount Tax (expense) benefit After tax amount Pretax amount Tax (expense) benefit After tax amount Pretax amount Tax benefit After tax amount Net (loss) income $ ( 116,537 ) $ 77,873 $ 77,364 Other comprehensive income (loss): Foreign currency translation adjustments before reclassifications $ 30,197 $ — 30,197 $ ( 102,113 ) $ — ( 102,113 ) $ 85,581 $ — 85,581 Reclassification of currency translation adjustment included in net income — — — — — — 16,073 — 16,073 Change in deferred gains on cash flow hedging instruments 13,850 ( 3,471 ) 10,379 946 ( 146 ) 800 608 ( 128 ) 480 Change in deferred gains on fair value hedging instruments 247 ( 62 ) 185 633 ( 133 ) 500 — — — Change in deferred (losses) gains on net investment hedging instruments ( 3,242 ) 747 ( 2,495 ) 11,827 ( 2,485 ) 9,342 ( 4,751 ) 998 ( 3,753 ) Total other comprehensive income (loss) $ 41,052 $ ( 2,786 ) $ 38,266 $ ( 88,707 ) $ ( 2,764 ) $ ( 91,471 ) $ 97,511 $ 870 $ 98,381 Total comprehensive (loss) income $ ( 78,271 ) $ ( 13,598 ) $ 175,745 See notes to consolidated financial statements. 47 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FISCAL YEARS ENDED JUNE 30, 2023, 2022 AND 2021 (In thousands, except par values) Common Stock Additional Accumulated Other Amount Paid-in Retained Treasury Stock Comprehensive Shares at $ 0.01 Capital Earnings Shares Amount (Loss) Income Total Balance at June 30, 2020 109,123 $ 1,092 $ 1,171,875 $ 614,171 7,238 $ ( 172,192 ) $ ( 171,392 ) $ 1,443,554 Net income 77,364 77,364 Cumulative effect of adoption of ASU 2016-13 ( 310 ) ( 310 ) Other comprehensive income 98,381 98,381 Issuance of common stock pursuant to stock-based compensation plans 384 4 ( 4 ) — Employee shares withheld for taxes 120 ( 4,282 ) ( 4,282 ) Repurchases of common stock 3,080 ( 107,483 ) ( 107,483 ) Stock-based compensation expense 15,659 15,659 Balance at June 30, 2021 109,507 $ 1,096 $ 1,187,530 $ 691,225 10,438 $ ( 283,957 ) $ ( 73,011 ) $ 1,522,883 Continued on next page 48 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FISCAL YEARS ENDED JUNE 30, 2023, 2022 AND 2021 (In thousands, except par values) Continued from previous page Common Stock Additional Accumulated Other Amount Paid-in Retained Treasury Stock Comprehensive Shares at $ 0.01 Capital Earnings Shares Amount (Loss) Income Total Balance at June 30, 2021 109,507 $ 1,096 $ 1,187,530 $ 691,225 10,438 $ ( 283,957 ) $ ( 73,011 ) $ 1,522,883 Net income 77,873 77,873 Other comprehensive loss ( 91,471 ) ( 91,471 ) Issuance of common stock pursuant to stock-based compensation plans 1,583 15 ( 15 ) — Employee shares withheld for taxes 724 ( 32,663 ) ( 32,663 ) Repurchases of common stock 10,626 ( 409,065 ) ( 409,065 ) Stock-based compensation expense 15,611 15,611 Balance at June 30, 2022 111,090 $ 1,111 $ 1,203,126 $ 769,098 21,788 $ ( 725,685 ) $ ( 164,482 ) $ 1,083,168 Net loss ( 116,537 ) ( 116,537 ) Other comprehensive income 38,266 38,266 Issuance of common stock pursuant to stock-based compensation plans 249 2 — 2 Employee shares withheld for taxes 76 ( 1,415 ) ( 1,415 ) Stock-based compensation expense 14,423 14,423 Balance at June 30, 2023 111,339 $ 1,113 $ 1,217,549 $ 652,561 21,864 $ ( 727,100 ) $ ( 126,216 ) $ 1,017,907 See notes to consolidated financial statements. 49 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FISCAL YEARS ENDED JUNE 30, 2023 , 2022 AND 2021 (In thousands) Fiscal Year Ended June 30, 2023 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $ ( 116,537 ) $ 77,873 $ 77,364 Net income from discontinued operations — — 11,255 Net (loss) income from continuing operations ( 116,537 ) 77,873 66,109 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 50,777 46,849 49,569 Deferred income taxes ( 25,953 ) 9,020 9,884 Equity in net loss of equity-method investees 1,134 2,902 1,591 Stock-based compensation, net 14,423 15,611 15,659 Intangibles and long-lived asset impairment 175,501 1,903 57,920 Gain on sale of assets ( 3,529 ) ( 8,588 ) ( 4,900 ) Gain on sale of businesses — — ( 2,680 ) Other non-cash items, net ( 1,271 ) ( 1,608 ) 429 Increase (decrease) in cash attributable to changes in operating assets and liabilities: Accounts receivable 13,067 ( 5,347 ) ( 2,890 ) Inventories 189 ( 25,272 ) ( 38,522 ) Other current assets ( 2,831 ) ( 10,459 ) 55,172 Other assets and liabilities 2,546 ( 2,704 ) ( 220 ) Accounts payable and accrued expenses ( 40,697 ) ( 19,939 ) ( 10,362 ) Net cash provided by operating activities 66,819 80,241 196,759 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment ( 27,879 ) ( 39,965 ) ( 71,553 ) Acquisitions of businesses, net of cash acquired — ( 259,985 ) — Investments and joint ventures, net 433 ( 694 ) ( 813 ) Proceeds from sale of assets 7,806 12,335 10,395 Proceeds from sale of businesses, net and other — — 59,607 Net cash used in investing activities ( 19,640 ) ( 288,309 ) ( 2,364 ) CASH FLOWS FROM FINANCING ACTIVITIES Borrowings under bank revolving credit facility 328,000 759,000 241,000 Repayments under bank revolving credit facility ( 380,000 ) ( 396,000 ) ( 291,000 ) Borrowings under term loan — 300,000 — Repayments under term loan ( 7,500 ) ( 3,750 ) — Payments of other debt, net ( 2,145 ) ( 3,320 ) ( 2,094 ) Share repurchases — ( 410,480 ) ( 106,067 ) Employee shares withheld for taxes ( 1,415 ) ( 32,663 ) ( 4,282 ) Net cash (used in) provided by financing activities ( 63,060 ) 212,787 ( 162,443 ) Effect of exchange rate changes on cash 3,733 ( 15,078 ) 6,148 Net (decrease) increase in cash and cash equivalents ( 12,148 ) ( 10,359 ) 38,100 Cash and cash equivalents at beginning of year 65,512 75,871 37,771 Cash and cash equivalents at end of year $ 53,364 $ 65,512 $ 75,871 See notes to consolidated financial statements. 50 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except par values and per share data) 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business 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 Boulder, Colorado. The Company’s mission has continued to evolve since its founding, with health and wellness being the core tenet. The Company continues to be a leading marketer, manufacturer, and seller of organic and natural, “better-for-you” products by anticipating and exceeding consumer expectations in providing quality, innovation, value and convenience. 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 worldwide. The Company operates under two reportable segments: North America and International. Basis of Presentation The Company’s consolidated financial statements include the accounts of the Company and its w holly-owned and majority-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Investments in affiliated companies in which the Company exercises significant influence, but which it does not control, are accounted for under the equity method of accounting. As such, consolidated net (loss) income includes the Company’s equity in the current earnings or losses of such companies. Unless otherwise indicated, references in these consolidated financial statements to 2023, 2022 and 2021 or “fiscal” 2023, 2022 and 2021 or other years refer to the fiscal year ended June 30 of that respective year and references to 2024 or “fiscal” 2024 refer to the fiscal year ending June 30, 2024. Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. Acquisition 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 Dispositions , for details. Discontinued Operations The financial statements separately report discontinued operations and the results of continuing operations (see Note 4, Acquisition and Dispositions ). All footnotes exclude discontinued operations unless otherwise noted. Use of Estimates The financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The accounting principles used required the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and amounts of income and expenses during the reporting periods presented. Actual results could differ from those estimates. These estimates include, among others, variable consideration related to revenue recognition for trade promotions and sales incentives, valuation of accounts and chargeback receivables, valuation of long-lived assets, goodwill and intangible assets (acquired in business combinations and analysis of impairment), stock-based compensation for market awards, and valuation allowances for deferred tax assets. 51 Table of Contents 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Cash and Cash Equivalents The Company considers cash and cash equivalents to include cash in banks, commercial paper and deposits with financial institutions that can be liquidated without prior notice or penalty. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. In addition, cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand. Revenue Recognition The Company sells its products through specialty and natural food distributors, supermarkets, natural foods stores, mass-market and e-commerce retailers, food service channels and club, drug and convenience stores worldwide. T he majority of the Company’s revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of products. The Company recognizes revenue as performance obligations are fulfilled when control passes to customers. Customer contracts typically contain standard terms and conditions. In instances where formal written contracts are not in place, the Company considers the customer purchase orders to be contracts based on the criteria outlined in Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). Payment terms and conditions vary by customer and are based on the billing schedule established in contracts or purchase orders with customers, but the Company generally provides credit terms to customers ranging from 10-91 days. Therefore, the Company has concluded that contracts do not include a significant financing component. Sales include shipping and handling charges billed to the customer and are reported net of discounts, trade promotions and sales incentives, consumer coupon programs and other costs, including estimated allowances for returns, allowances and discounts associated with aged or potentially unsalable product, and prompt pay discounts. Shipping and handling costs are accounted for as a fulfillment activity of promise to transfer products to customers and are included in the cost of sales line item on the Consolidated Statements of Operations. Variable Consideration In addition to fixed contract consideration, many of the Company’s contracts include some form of variable consideration. The Company offers various trade promotions and sales incentive programs to customers and consumers, such as price discounts, slotting fees, in-store display incentives, cooperative advertising programs, new product introduction fees and coupons. The expenses associated with these programs are accounted for as reductions to the transaction price of the products and are therefore deducted from sales to determine reported net sales. Trade promotions and sales incentive accruals are subject to significant management estimates and assumptions. The critical assumptions used in estimating the accruals for trade promotions and sales incentives include the Company’s estimate of expected levels of performance and redemption rates. The Company exercises judgment in developing these assumptions. These assumptions are based upon historical performance of the retailer or distributor customers with similar types of promotions adjusted for current trends. The Company regularly reviews and revises, when deemed necessary, estimates of costs to the Company for these promotions and incentives based on what has been incurred by the customers. The terms of most of the promotion and incentive arrangements do not exceed a year and therefore do not require highly uncertain long-term estimates. Settlement of these liabilities typically occurs in subsequent periods primarily through an authorization process for deductions taken by a customer from amounts otherwise due to the Co mpany. Differences between estimated expense and actual promotion and incentive costs are recognized in earnings in the period such differen ces are determined. Actual expenses may differ if the level of redemption rates and performance were to vary from estimates. Costs to Obtain or Fulfill a Contract As the Company’s contracts are generally shorter than one year, the Company has elected a practical expedient under ASC 606 that allows the Company to expense as incurred the incremental costs of obtaining a contract if the contract period is for one year or less. These costs are included in selling, general and administrative expenses on the Consolidated Statements of Operations. 52 Table of Contents Valuation of Accounts and Chargebacks Receivable and Concentration of Credit Risk The Company routinely performs credit evaluations on existing and new customers and maintains an allowance for expected uncollectible accounts receivable which is recorded as an offset to trade accounts receivable on the Consolidated Balance Sheets. Collectability of accounts receivable is assessed by applying a historical loss-rate methodology in accordance with ASC Topic 326, Financial Instruments - Credit Losses , adjusted as necessary based on the Company's review of accounts receivable on an individual basis, specifically identifying customers with known disputes or collectability issues, and experience with trade receivable aging categories. The Company also considers market conditions and current and expected future economic conditions to inform adjustments to historical loss data. Changes to the allowance, if any, are classified as bad de bt provisions within selling, general and administrative expenses on the Consolidated Statements of Operations. Credit losses have been within the Company’s expectations in recent years. While one of the Company’s customers represented ap proximately 18 % and 15 % of trade receivables balances as of June 30, 2023 and 2022, respectively, the Company believes that there is no significant or unusual credit exposure at this time. Based on cash collection history and other statistical analysis, the Company estimates the amount of unauthorized deductions customers have taken that the Company expects will be collected and repaid in the near future and records a chargeback receivable which is a component of trade receivables. Differences between estimated collectible receivables and actual collections are recognized in earnings in the period such differences are determined. Sales to one customer and its affiliat es approximated 16 %, 15 % and 11 % of sales during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. Inventory Inventory is valued at the lower of cost or net realizable value, utilizing the first-in, first-out method. The Company provides write-downs for finished goods expected to become unsaleable due to age and specifically identifies and provides for slow moving or obsolete raw ingredients and packaging. Property, Plant and Equipment Property, plant and equipment is carried at cost and depreciated or amortized on a straight-line basis over the estimated useful lives or lease term (for leasehold improvements), whichever is shorter. The Company believes the useful lives assigned to the Company’s property, plant and equipment are within ranges generally used in consumer products manufacturing and distribution businesses. The Company’s manufacturing plants and distribution centers, and their related assets, are reviewed when impairment indicators are present by analyzing underlying cash flow projections. The Company believes no impairment of the carrying value of such assets exists other than as disclosed under Note 6, Property, Plant and Equipment, Net . Ordinary repairs and maintenance costs are expensed as incurred. The Company utilizes the following ranges of asset lives: Buildings and improvements 10 - 40 years Machinery and equipment 3 - 20 years Furniture and fixtures 3 - 15 years Leasehold improvements are amortized over the shorter of the respective initial lease term or the estimated useful life of the assets, and generally range from 3 to 20 years. Software that is developed for internal use is recorded as a component of property, plant and equipment. Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal-use software. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Once placed into service, internally developed software is amortized on a straight-line basis over its estimated useful life which generally ranges from 3 to 10 years. All other expenditures, including those incurred in order to maintain the asset’s current level of performance, are expensed as incurred. The net book value of internally developed software as of June 30, 2023 and 2022 was $ 13,576 and $ 19,874 , respectively and is included as a component of Computer Hardware and Software in Note 6, Property, Plant and Equipment, Net . 53 Table of Contents Goodwill and Other Indefinite-Lived Intangible Assets Goodwill and other intangible assets with indefinite useful lives are not amortized but rather are tested at least annually for impairment, or when circumstances indicate that the carrying amount of the asset may not be recoverable. The Company performs its annual test for impairment at the beginning of the fourth quarter of its fiscal year. Goodwill is tested for impairment at the reporting unit level. A reporting unit is an operating segment or a component of an operating segment. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The Company may elect not to perform the qualitative assessment for some or all reporting units and perform a quantitative impairment test. The impairment test for goodwill requires the Company to compare the fair value of a reporting unit to its carrying value, including goodwill. The Company uses a blended analysis of a discounted cash flow model and a market valuation approach to determine the fair values of its reporting units. If the carrying value of a reporting unit exceeds its fair value, the Company would then compare the carrying value of the goodwill to its implied fair value in order to determine the amount of the impairment, if any. Indefinite-lived intangible assets, which are not amortized, consist primarily of acquired trademarks and tradenames. Indefinite-lived intangible assets are evaluated on an annual basis in conjunction with the Company’s evaluation of goodwill, or on an interim basis if and when events or circumstances change that would more likely than not reduce the fair value of any of its indefinite-lived intangible assets below their carrying value. In assessing fair value, the Company utilizes a “relief from royalty” methodology. This approach involves two steps: (i) estimating the royalty rates for each trademark and (ii) applying these royalty rates to a projected net sales stream and discounting the resulting cash flows to determine fair value. If the carrying value of the indefinite-lived intangible assets exceeds the fair value of the assets, the carrying value is written down to fair value in the period identifie d. This method includes significant management assumptions such as revenue growth rates, weighted average cost of capital and assumed royalty rates. See Note 8, Goodwill and Other Intangible Assets and Note 15, Fair Value Measurements, for additional information on goodwill and intangibles impairment charges. Transfer of Financial Assets 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 arrangem ents was $ 380,683 during the year ended June 30, 2023, $ 170,737 during the year ended June 30, 2022 and $ 96,788 during the year ended June 30, 2021. 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 provided by operating activities on the Consolidated Statements of Cash Flows. Cost of Sales Included in cost of sales are the cost of products sold, including the costs of raw materials and labor and overhead required to produce the products, warehousing, distribution, supply chain costs, as well as costs associated with shipping and handling of inventory. Foreign Currency Translation and Remeasurement The assets and liabilities of international operations are translated at the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the monthly average exchange rates. Adjustments arising from the translation of the foreign currency financial statements of the Company’s international operations are reported as a component of accumulated other comprehensive loss on the Consolidated Balance Sheets. Gains and losses arising from intercompany foreign currency transactions that are of a long-term nature are reported in the same manner as translation adjustments. Gains and losses arising from intercompany foreign currency transactions that are not of a long-term nature and certain transactions of the Company’s subsidiaries which are denominated in currencies other than the subsidiaries’ functional currency are recognized as incurred in other (income) expense, net on the Consolidated Statements of Operations. 54 Table of Contents Selling, General and Administrative Expenses Included in selling, general and administrative expenses are advertising costs, promotion costs not paid directly to the Company’s customers, salary and related benefit costs of the Company’s employees in the finance, human resources, information technology, legal, sales and marketing functions, facility related costs of the Company’s administrative functions, research and development costs, and costs paid to consultants and third party providers for related services. Research and Development Costs Research and development costs are expensed as incurred and are included in selling, general and administrative expenses on the Consolidated Statements of Operations. Research and development costs amounted to $ 6,379 in fiscal 2023, $ 9,416 in fiscal 2022 and $ 10,372 in fiscal 2021, consisting primarily of personnel related costs. The Company’s research and development expenditures do not include the expenditures on such activities undertaken by co-packers and suppliers who develop numerous products on behalf of the Company and on their own initiative with the expectation that the Company will accept their new product ideas and market them under the Company’s brands. Advertising Costs Advertising costs, which are included in selling, general and administrative expenses, amounted to $ 38,838 in fiscal 2023, $ 41,032 in fiscal 2022 and $ 40,050 in fiscal 2021. Such cos ts are expensed as incurred. In fiscal 2023, the Company expanded the categories of expenses included in the disclosure related to advertising costs. In addition to the amounts reported in prior years, categories now include retailer specific advertising expenses, in store display expenses and certain digital media expenses. Proceeds from Insurance Claims In fiscal 2023, 2022, and 2021, the Company received $ 8,594 , $ 196 and $ 592 of proceeds from insurance claims , respectively and are included in selling, general and administrative expenses on the Consolidated Statements of Operations. Income Taxes The Company follows the liability method of accounting for income taxes. Under the liability method, deferred taxes are determined based on the differences between the financial statement and tax bases of assets and liabilities at enacted rates in effect in the years in which the differences are expected to reverse. The Company also assesses the likelihood of future realization of deferred tax assets, including recent earnings results within taxing jurisdictions, expectations of future taxable income, the carryforward periods available and other relevant factors. Valuation allowances are provided for deferred tax assets to the extent it is more likely than not that the deferred tax assets will not be recoverable against future taxable income. The Company recognizes liabilities for uncertain tax positions based on a two-step process prescribed by the authoritative guidance. The first step requires the Company to determine if the weight of available evidence indicates that the tax position has met the threshold for recognition; therefore, the Company must evaluate whether it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step requires the Company to measure the tax benefit of the tax position taken, or expected to be taken, in an income tax return as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company reevaluates the uncertain tax positions each period based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Depending on the jurisdiction, such a change in recognition or measurement may result in the recognition of a tax benefit or an additional charge to the tax provision in the period. The Company records interest and penalties in the provision for income taxes. Fair Value of Financial Instruments The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. At June 30, 2023 and 2022, the carrying values of financial instruments such as accounts receivable, accounts payable, accrued expenses and other current liabilities, as well as borrowings under the Company’s credit facility and other borrowings, approximated fair value based upon either the short-term maturities or market interest rates of these instruments. 55 Table of Contents Derivative Instruments and Hedging Activities ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. The Company records all derivatives on the Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The effective portion of changes in the fair value of derivative instruments that qualify for cash flow hedge and net investment hedge accounting treatment are recognized in stockholders’ equity as a component of accumulated other comprehensive loss until the hedged item is recognized in earnings. Changes in the fair value of fair value hedges, derivatives that do not qualify for hedge accounting treatment, as well as the ineffective portion of any cash flow hedges, are recognized currently in earnings as a component of other (income) expense, net or interest and other financing expense, net on the Consolidated Statements of Operations. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply, or the Company elects not to apply hedge accounting. Stock-Based Compensation The Company uses the fair market value of the Company’s common stock on the grant date to measure fair value for service-based and performance-based awards and a Monte Carlo simulation model to determine the fair value of market-based awards. The fair value of stock-based compensation awards is recognized as an expense over the vesting period using the straight-line method. For awards that contain a market condition, expense is recognized over the defined or derived service period using a Monte Carlo simulation model. Compensation expense is recognized for these awards on a straight-line basis over the service period, regardless of the eventual number of shares that are earned based upon the market condition, provided that each grantee remains an employee at the end of the performance period. Compensation expense on awards that contain a market condition is reversed if at any time during the service period a grantee is no longer an employee. For restricted stock awards which include performance criteria, compensation expense is recorded when the achievement of the performance criteria is probable and is recognized over the performance and vesting service periods. Compensation expense is recognized for only that portion of stock-based awards that are expected to vest. The Company recognizes forfeitures as they occur at which time compensation cost previously recognized for an award that is forfeited because of failure to satisfy a condition is reversed in the period of the forfeiture. The Company receives an income tax deduction in certain tax jurisdictions for restricted stock grants when they vest and for stock options exercised by employees equal to the excess of the market value of the Company’s common stock on the date of exercise over the option price. Excess tax benefits (tax benefits resulting from tax deductions in excess of compensation cost recognized) are classified as a cash flow provided by operating activities on the Consolidated Statements of Cash Flows. Valuation of Long-Lived Assets The Company periodically evaluates the carrying value of long-lived assets, other than goodwill and intangible assets with indefinite lives, held and used in the business when events and circumstances occur indicating that the carrying amount of the asset or its asset group may not be recoverable. An impairment test is performed when the estimated undiscounted cash flows associated with the asset or asset group is less than its carrying value. Once such impairment test is performed, a loss is 56 Table of Contents recognized based on the amount, if any, by which the carrying value exceeds the estimated fair value for assets to be held and used. See Note 6, Property, Plant and Equipment , Net , Note 8, Goodwill and Other Intangible Assets , and Note 15, Fair Value Measurements , for additional information on long-lived asset impairment charges. Leases Arrangements containing leases are evaluated as an operating or finance lease at lease inception. For operating leases, the Company recognizes an operating lease right-of-use (“ROU”) asset and operating lease liability at lease commencement based on the present value of lease payments over the lease term. With the exception of certain finance leases, an implicit rate of return is not readily determinable for the Company's leases. For these leases, an incremental borrowing rate is used in determining the present value of lease payments and is calculated based on information available at the lease commencement date. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest the Company would have to pay to borrow funds on a collateralized basis over a similar term. The Company references market yield curves which are risk-adjusted to approximate a collateralized rate in the currency of the lease. These rates are updated on a quarterly basis for measurement of new lease obligations. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Leases with an initial term of 12 months or less are not recognized on the Consolidated Balance Sheets. The Company has elected to separate lease and non-lease components. Net (Loss) Income Per Share Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average number of common shares outstanding for the period. Diluted net (loss) income per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. 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. The guidance allows for companies to: (1) account for certain contract modifications as a continuation of the existing contract without additional analysis; (2) continue hedge accounting when certain critical terms of a hedging relationship change and assess effectiveness in ways that disregard certain potential sources of ineffectiveness; 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 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 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. For the avoidance of doubt, the Company intends to reassess its elections of optional expedients and exceptions included within ASU 2020-04 related to its hedging activities and will document the election of these items on a quarterly basis or when changes/additions are necessary. During fiscal year 2023, the Company adopted hedge accounting expedients related to probability of forecasted transactions to assert probability of the hedged interest (payments/receipts) regardless of any expected modification in terms related to reference rate reform. The Company has also adopted the Secured Overnight Financing Rate (“SOFR”) as the alternative reference rate to replace LIBOR with respect to the Company’s long-term debt. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company is continuing to assess the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. 57 Table of Contents 3. (LOSS) EARNINGS PER SHARE The following table sets forth the computation of basic and diluted net (loss) income per share on the Consolidated Statements of Operations: Fiscal Year Ended June 30, 2023 2022 2021 Numerator: Net (loss) income from continuing operations $ ( 116,537 ) $ 77,873 $ 66,109 Net income from discontinued operations, net of tax — — 11,255 Net (loss) income $ ( 116,537 ) $ 77,873 $ 77,364 Denominator: Basic weighted average shares outstanding 89,396 92,989 100,235 Effect of dilutive stock options, unvested restricted stock and unvested restricted share units — 356 1,087 Diluted weighted average shares outstanding 89,396 93,345 101,322 Basic net (loss) income per common share: Continuing operations $ ( 1.30 ) $ 0.84 $ 0.66 Discontinued operations — — 0.11 Basic net (loss) income per common share $ ( 1.30 ) $ 0.84 $ 0.77 Diluted net (loss) income per common share: Continuing operations $ ( 1.30 ) $ 0.83 $ 0.65 Discontinued operations — — 0.11 Diluted net (loss) income per common share $ ( 1.30 ) $ 0.83 $ 0.76 Due to our net loss in the twelve months ended June 30, 2023, all common stock equivalents such as stock options and unvested restricted stock awards have been excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive to the computations. There were 316 and 137 restricted stock awards and stock options excluded from the Company’s calculation of diluted net (loss) income per share for the fiscal years 2022 and 2021, respectively, as such awards were anti-dilutive. Additionally, 214 and 721 stock-based awards outstanding at fiscal years 2022 and 2021, respectively, were excluded from the calculation of diluted net income per share for the fiscal years 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. 4. ACQUISITION AND DISPOSITIONS Acquisition 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 $ 260,185 . The acquisition was funded with borrowings under the Credit Agreement (See Note 10, Debt and Borrowings ). During fiscal year 2023, 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 North America reportable segment. THWR's net sales included in our consolidated results were 3.2 % of consolidated net sales for the fiscal year ended June 30, 2023. 58 Table of Contents The following table provides unaudited pro forma results of operations had the acquisition been completed at the beginning of fiscal 2021. 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 Fiscal Year Ended June 30, 2022 2021 Net sales $ 1,954,564 $ 2,065,957 Net income from continuing operations (1) $ 84,913 $ 68,142 Diluted net (loss) income per common share from continuing operations $ 0.91 $ 0.67 (1) The pro forma adjustments include the elimination of transaction costs totaling $ 5,103 from the fiscal year ended June 30, 2022 and recognition of those costs in the fiscal year ended June 30, 2021. Additionally, the pro forma adjustments include the elimination of integration costs and a fair value inventory adjustment totaling $ 1,800 for the fiscal year ended June 30, 2022 and recognition of those costs in the fiscal period ended June 30, 2021. Dispositions Westbrae Natural ® On December 15, 2022, the Company completed the divestiture of its Westbrae Natural ® brand (“Westbrae”) for total cash consideration of $ 7,498 . The sale of Westbrae was consistent with the Company’s portfolio simplification process. Westbrae operated out of the United States and was part of the Company’s North America reportable segment. During the fiscal year ended June 30, 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 . 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 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 (“Dream”), 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 of $ 7,519 in the fourth quarter of fiscal 2021. Discontinued Operations Sale of Tilda Business On August 27, 2019, the Company sold the entities comprising the former Tilda reporting unit 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 reporting unit 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. For the fiscal year ended June 30, 2021 the Company recorded net income from discounted operations of approximately $ 11,245 primarily related to a tax benefit related a legal entity reorganization. No further activity is recorded or expected to be recorded related to this disposition that occurred in fiscal 2021. 59 Table of Contents 5. INVENTORIES Inventories consisted of the following: Fiscal Year Ended June 30, 2023 2022 Finished goods $ 192,007 $ 202,544 Raw materials, work-in-progress and packaging 118,334 105,490 $ 310,341 $ 308,034 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: Fiscal Year Ended June 30, 2023 2022 Land $ 11,453 $ 11,216 Buildings and improvements 55,354 51,849 Machinery and equipment 335,912 296,398 Computer hardware and software 54,192 65,680 Furniture and fixtures 20,722 23,522 Leasehold improvements 49,394 54,999 Construction in progress 10,816 27,200 537,843 530,864 Less: Accumulated depreciation and impairment 241,518 233,459 $ 296,325 $ 297,405 Depreciation expense for the fiscal years e nded June 30, 2023, 2022 and 2021 was $ 35,893 , $ 31,235 and $ 34,291 , respectively. During fiscal year 2023, t he Company recognized a non-cash impairment charge of $ 584 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 June 30, 2023 and June 30, 2022, respectively. During fiscal year 2022, the Company completed the sale of undeveloped land plots in Boulder, Colorado in the United States for total cash proceeds of $ 10,005 , net of brokerage and other fees, resulting in a gain in the amount of $ 8,656 , which is included as a component of other (income) expense, net on the Consolidated Statement of Operations. The Company also recognized a non-cash impairment charge of $ 303 during the fiscal year ended June 30, 2022 relating to a facility in the United Kingdom. 60 Table of Contents 7. LEASES 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. A limited number of lease agreements include rental payments adjusted periodically for inflation. Certain 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 fiscal years ended June 30, 2023, 2022 and 2021 were as follows: Fiscal Year Ended 2023 2022 2021 Operating lease expenses (a) $ 18,173 $ 15,911 $ 16,403 Finance lease expenses (a) 227 251 391 Variable lease expenses 740 1,010 1,423 Short-term lease expenses 2,003 3,394 2,387 Total lease expenses $ 21,143 $ 20,566 $ 20,604 Supplemental balance sheet information related to leases is as follows: Leases Classification Fiscal Year Ended June 30, 2023 2022 Assets Operating lease ROU assets Operating lease right-of-use assets $ 95,894 $ 114,691 Finance lease ROU assets, net Property, plant and equipment, net 289 413 Total leased assets $ 96,183 $ 115,104 Liabilities Current Operating Accrued expenses and other current liabilities $ 10,489 $ 13,154 Finance Current portion of long-term debt 83 149 Non-current Operating Operating lease liabilities, noncurrent portion 90,014 107,481 Finance Long-term debt, less current portion 222 278 Total lease liabilities $ 100,808 $ 121,062 61 Table of Contents Additional information related to leases is as follows: Fiscal Year Ended June 30, 2023 2022 2021 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 16,446 $ 15,462 $ 16,738 Operating cash flows from finance leases $ 16 $ 20 $ 17 Financing cash flows from finance leases $ 161 $ 226 $ 338 ROU assets obtained in exchange for lease obligations: Operating leases (1) $ ( 2,627 ) $ 39,435 $ 25,446 Finance leases $ 118 $ 116 $ 690 Weighted average remaining lease term: Operating leases 10.4 years 9.3 years 9.8 years Finance leases 3.9 years 4.1 years 4.0 years Weighted average discount rate: Operating leases 4.8 % 3.9 % 3.3 % Finance leases 4.7 % 4.1 % 3.9 % (1) Includes adjustment for modification of an operating lease for the fiscal year ended June 30, 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 June 30, 2023 were as follows: Fiscal Year Operating leases Finance leases Total 2024 $ 15,087 $ 74 $ 15,161 2025 12,939 101 13,040 2026 12,221 76 12,297 2027 11,897 59 11,956 2028 11,960 25 11,985 Thereafter 66,118 — 66,118 Total lease payments 130,222 335 130,557 Less: Imputed interest 29,719 30 29,749 Total lease liabilities $ 100,503 $ 305 $ 100,808 Subsequent to June 30, 2023, the Company entered into an operating lease for its new global headquarters, which has not yet commenced. Obligations under this lease are approximately $ 12,849 , and the lease is expected to commence during the first quarter of fiscal year ending June 30, 2024, with an initial lease term of 10.5 years excluding renewal options. 62 Table of Contents 8. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table shows the changes in the carrying amount of goodwill by reportable segment: North America International Total Balance as of June 30, 2021 (1) 600,812 270,255 $ 871,067 Acquisition (See Note 4 , Acquisition and Disposition ) 95,645 — 95,645 Translation and other adjustments, net ( 742 ) ( 32,174 ) ( 32,916 ) Balance as of June 30, 2022 695,715 238,081 933,796 Acquisition (2) ( 794 ) — ( 794 ) Divestiture (3) ( 3,054 ) — ( 3,054 ) Translation and other adjustments, net 5,186 3,506 8,692 Balance as of June 30, 2023 $ 697,053 $ 241,587 $ 938,640 (1) The total carrying value of goodwill is reflected net of $ 134,277 of accumulated impairment charges. (2) During the fiscal year ended June 30, 2023, the Company finalized purchase accounting related to THWR resulting in a $ 794 reduction to goodwill. See Note 4, Acquisition and Disposition. (3) During the fiscal year ended June 30, 2023, the Company completed the divestiture of Westbrae, a component of the North America reportable segment. Goodwill of $ 3,054 was assigned to the divested component on a relative fair value basis. The Company completed its annual goodwill impairment analysis in the fourth quarter of fiscal 2023 and concluded that no impairment existed at any of its reporting units. Other Intangible Assets The following table sets forth balance sheet information for intangible assets, excluding goodwill, subject to amortization and intangible assets not subject to amortization: Fiscal Year Ended June 30, 2023 2022 Non-amortized intangible assets: Trademarks and tradenames (1) $ 250,860 $ 379,466 Amortized intangible assets: Other intangibles (2) 161,874 199,448 Less: Accumulated amortization ( 114,629 ) ( 101,381 ) Net amortized intangible assets $ 47,245 $ 98,067 Net other intangible assets $ 298,105 $ 477,533 (1) The gross carrying value of trademarks and tradenames is reflected net of $ 223,981 and $ 94,873 of accumulated impairment charges as of June 30, 2023 and 2022, respectively. (2) The reduction in carrying value of other intangible assets as of June 30, 2023 reflected a non-cash impairment charge of $ 45,798 recognized in the fiscal year ended June 30, 2023. The Company completed its annual assessment of impairment for indefinite-lived intangible assets in the fourth quarter of fiscal 2023. The assessment indicated that the carrying value of the Imagine ® and Joya ® trademarks and the Queen Helene ® trademark and formula exceeded their estimated fair values. The fair values were determined using the relief from royalty method, and non-cash impairment charges of $ 4,767 , $ 4,691 and $ 9,150 for Imagine ® , Joya ® , and Queen Helene ® intangible assets, respectively, were recorded within intangibles and long-lived asset impairment on the Consolidated Statements of Operations. The Imagine ® and Queen Helene ® intangible assets are part of the North America reportable segment and had a remaining aggregate carrying value of $ 3,100 as of June 30, 2023. The Joya ® intangible assets are part of the International reportable segment and had a remaining aggregate carrying value of $ 6,218 as of June 30, 2023. 63 Table of Contents During the fiscal year ended June 30, 2023, as a result of a decline in actual and projected performance and cash flows of the ParmCrisps ® and Thinsters ® brands, 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. At June 30, 2023, the Company’s indefinite lived tradename intangible assets of ParmCrisps ® and Thinsters ® , which are part of the North America reportable segment, had a remaining aggregate carrying value of $ 8,000 and $ 4,500 , respectively. As a result of the same factors triggering the impairment tests for the ParmCrisps ® and Thinsters ® trademarks discussed above, the Company completed 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 fiscal year ended June 30, 2023, the Company recorded non-cash impairment charge of $ 45,798 to reduce the carrying value of the ParmCrisps ® customer relationships, the primary asset in the asset group, to its estimated fair value. 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 had a remaining aggregate carrying value of $ 42,197 as of June 30, 2023 and the definite lived assets within the ParmCrisps ® asset group were $ 20,704 . 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 on the Consolidated Statements of Operations was as follows: Fiscal Year Ended June 30, 2023 2022 2021 Amortization of acquired intangibles $ 10,016 $ 10,214 $ 8,931 Expected amortization expense over the next five fiscal years is as follows: Fiscal Year Ending June 30, 2024 2025 2026 2027 2028 Estimated amortization expense $ 6,401 $ 5,348 $ 4,981 $ 4,871 $ 4,239 The weighted average remaining amortization period of amortized intangible assets is 8.7 years. 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: Fiscal Year Ended June 30, 2023 2022 Payroll, employee benefits and other administrative accruals $ 49,564 $ 44,756 Facility, freight and warehousing accruals 10,051 10,922 Selling and marketing related accruals 9,569 9,548 Short-term operating lease liabilities 10,489 13,154 Other accruals 8,847 8,453 $ 88,520 $ 86,833 64 Table of Contents 10. DEBT AND BORROWINGS Debt and borrowings consisted of the following: Fiscal Year Ended June 30, 2023 2022 Revolving credit facility $ 541,000 $ 593,000 Term loans 288,750 296,250 Less: Unamortized issuance costs ( 1,307 ) ( 1,105 ) Other borrowings (1) 305 498 828,748 888,643 Short-term borrowings and current portion of long-term debt (2) 7,567 7,705 Long-term debt, less current portion $ 821,181 $ 880,938 (1) Includes $ 305 (2022: $ 427 ) of finance lease obligations as discussed in Note 7, Leases. (2) Includes $ 83 (2022: $ 149 ) of short-term finance lease obligations as discussed in Note 7, Leases. Amended and Restated Credit Agreement On December 22, 2021, the Company refinanced its revolving credit facility by entering into a Fourth Amended and Restated Credit Agreement (as amended by a First Amendment dated December 16, 2022, the “Credit Agreement”). The Credit Agreement provides for senior secured financing of $ 1,100.0 million in the aggregate, consisting of (1) $ 300.0 million in aggregate principal amount of term loans (the “Term Loans”) and (2) an $ 800.0 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and is comprised of a $ 440.0 million U.S. revolving credit facility and $ 360.0 million global revolving credit facility) (the “Revolver”). Both the Revolver and the Term Loans mature on December 22, 2026. The Credit Agreement includes financial covenants that require compliance with a consolidated interest coverage ratio, a consolidated leverage ratio and a consolidated secured leverage ratio. Prior to the Company entering into the Second Amendment (as defined below), the minimum consolidated interest coverage ratio was 2.75 :1.00. The maximum consolidated leverage ratio is 6.00 :1.00. Prior to the Company entering into the Second Amendment, the maximum consolidated secured leverage ratio was 5.00 :1.00 through December 31, 2023 or such earlier date as elected by the Company (the “First Amendment Period”). Following the First Amendment Period, the maximum consolidated secured leverage ratio would have been 4.25 :1.00, subject to possible temporary increase following certain corporate acquisitions. During the First Amendment Period, loans under the Credit Agreement bore 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 First Amendment Period, loans would have borne 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 — % to 0.750 % per annum, the relevant rate in each case being the Applicable Rate. The Applicable Rate following the First Amendment Period would 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 June 30, 2023 was 5.94 %. 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 June 30, 2023, there were $ 541,000 of loans under the Revolver, $ 288,750 of Term Loans, and $ 4,468 of letters of credit outstanding under the Credit Agreement. As of June 30, 2023 and June 30, 2022, $ 254,532 and $ 203,981 , respectively, was available under the Credit Agreement, subject to compliance with the financial covenants. As of June 30, 2023, the Company was in compliance with all associated covenants. On August 22, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement. Pursuant to the Second Amendment, the Company’s maximum consolidated secured leverage ratio was amended to be 5.00 :1.00 until September 30, 2023, 5.25 :1.00 until December 31, 2023 and 5.00 :1.00 until December 31, 2024 (the period of time during which such maximum consolidated secured leverage ratios are in effect, the “Second Amendment Period,” which the Company may elect to end early). Following the Second Amendment Period, the maximum consolidated secured leverage 65 Table of Contents ratio will be 4.25 :1.00, subject to possible temporary increase following certain corporate acquisitions. Pursuant to the Second Amendment, the Company’s minimum interest coverage ratio was amended to be 2.50 :1.00. During the Second Amendment Period, loans under the Credit Agreement will bear interest at (a) Term SOFR plus 2.5 % per annum or (b) the Base Rate plus 1.5 % per annum. Following the Second Amendment Period, Loans will bear interest at rates based on (a) Term SOFR plus a rate ranging from 1.125 % to 2.0 % per annum or (b) the Base Rate plus a rate ranging from 0.125 % to 1.0 % per annum, the relevant rate in each case being the Applicable Rate. The Applicable Rate following the Second Amendment Period will be determined in accordance with a leverage-based pricing grid, as set forth in the Credit Agreement as amended by the Second Amendment. Credit Agreement Issuance Costs In connection with the First Amendment to its Credit Agreement during the second quarter of fiscal year 2023, the Company incurred debt issuance costs of approximately $ 1,987 , of which $ 1,916 was deferred. 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 June 30, 2023, are as follows: Due in Fiscal Year Amount 2024 $ 7,207 2025 7,215 2026 7,192 2027 807,134 Total debt and borrowings $ 828,748 Interest paid during the fiscal years ended June 30, 2023, 2022 and 2021 amounted to $ 41,698 , $ 9,926 and $ 5,903 , respectively. 66 Table of Contents 11. INCOME TAXES The components of (loss) income from continuing operations before income taxes and equity in net loss of equity-method investees were as follows: Fiscal Year Ended June 30, 2023 2022 2021 Domestic $ ( 183,601 ) $ 24,541 $ 60,215 Foreign 54,020 78,950 48,578 Total $ ( 129,581 ) $ 103,491 $ 108,793 The (benefit) provision for income taxes consisted of the following: Fiscal Year Ended June 30, 2023 2022 2021 Current: Federal $ 3,103 $ ( 197 ) $ 2,243 State and local 953 179 1,735 Foreign 7,719 13,714 27,253 11,775 13,696 31,231 Deferred: Federal ( 23,551 ) 6,237 14,266 State and local 271 ( 463 ) ( 10,064 ) Foreign ( 2,673 ) 3,246 5,660 ( 25,953 ) 9,020 9,862 Total $ ( 14,178 ) $ 22,716 $ 41,093 Cash paid for income taxes, net of refunds, during the fiscal years ended June 30, 2023 and June 30, 2022 amounted to $ 14,765 and $ 19,235 , respectively. For the fiscal year ended June 30, 2021, the Company received net tax refunds of $ 32,998 including a $ 53,817 tax loss carryback claim under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) which allowed for, among other provisions, a five-year carryback of net operating losses (“NOLs”) for 2018-2020 offset by taxes paid in other jurisdictions. The reconciliation of the U.S. federal statutory rate to the Company’s effective rate on (loss) income before (benefit) provision for income taxes is as follows: Fiscal Year Ended June 30, 2023 % 2022 % 2021 % Expected United States federal income tax at statutory rate $ ( 27,233 ) 21.0 % $ 21,733 21.0 % $ 22,847 21.0 % State income taxes, net of federal (benefit) provision ( 4,866 ) 3.8 % 1,227 1.2 % 1,150 1.1 % Foreign income at different rates ( 905 ) 0.7 % ( 576 ) ( 0.6 ) % 4,756 4.4 % Impairment of intangible assets — — % — — % 13,466 12.4 % Change in valuation allowance 14,935 ( 11.5 ) % ( 220 ) ( 0.2 ) % ( 5,921 ) ( 5.4 ) % Change in reserves for uncertain tax positions 637 ( 0.5 ) % ( 997 ) ( 1.0 ) % 1,971 1.8 % Change in foreign tax rate — — % ( 341 ) ( 0.3 ) % 1,840 1.7 % Loss on disposal of subsidiary — % — % 1,073 1.0 % U.S. tax (benefit) on foreign earnings 1,946 ( 1.5 ) % 2,404 2.3 % ( 50 ) ( 0.1 ) % CARES Act — % — % ( 1,116 ) ( 1.0 ) % Other 1,308 ( 1.1 ) % ( 514 ) ( 0.4 ) % 1,077 1.0 % (Benefit) provision for income taxes $ ( 14,178 ) 10.9 % $ 22,716 21.9 % $ 41,093 37.8 % 67 Table of Contents The Company accounts for global intangible low-taxed income (“GILTI”) tax as a current period cost and recorded expense of $ 2,189 , $ 1,119 , and nil , during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. Such amounts are included in the U.S. tax benefit on foreign earnings in the effective tax rate which also includes tax expense related to Subpart F income and unremitted earnings in total. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Deferred tax assets and liabilities consisted of the following: Fiscal Year Ended June 30, 2023 2022 Noncurrent deferred tax assets (liabilities): Basis difference on inventory $ 5,130 $ 6,395 Reserves not currently deductible 11,045 11,675 Basis difference on intangible assets ( 73,635 ) ( 119,109 ) Basis difference on property and equipment ( 20,255 ) ( 15,049 ) Other comprehensive income ( 3,498 ) ( 726 ) Net operating loss and tax credit carryforwards 50,807 50,077 Stock-based compensation 1,937 1,516 Unremitted earnings of foreign subsidiaries ( 1,989 ) ( 2,232 ) Operating lease liability 20,203 25,423 Lease ROU assets ( 19,113 ) ( 23,905 ) Other 9,833 7,782 Valuation allowances ( 52,551 ) ( 36,891 ) Noncurrent deferred tax liabilities, net $ ( 72,086 ) $ ( 95,044 ) At June 30, 2023 and 2022, the Company had U.S. Federal NOL carryforwards of approximately $ 63,559 and $ 79,890 , respectively, certain of which will not expire until 2036. Certain of these federal loss carryforwards are subject to Internal Revenue Code Section 382, which imposes limitations on utilization following certain changes in ownership of the entity generating the loss carryforward. The Company had foreign NOL carryforwards of approximately $ 11,351 and $ 12,108 at June 30, 2023 and 2022, respectively, the majority of which are indefinite lived. For the year ended June 30, 2023, the Company determined that $ 147,300 of foreign earnings are not permanently reinvested with a corresponding deferred tax liability of $ 1,989 . The Company continues to reinvest $ 792,262 of undistributed earnings of its foreign subsidiaries and may be subject to additional foreign withholding taxes and U.S. state income taxes if it reverses its indefinite reinvestment assertion on these foreign earnings in the future. All other outside basis differences not related to earnings were impractical to account for at this period of time and are currently considered as being permanent in duration. The Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date. Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred tax assets will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance. The Company recorded valuation allowances in the amounts of $ 52,551 and $ 36,891 at June 30, 2023 and 2022, respectively. The changes in valuation allowances against deferred income tax assets were as follows: Fiscal Year Ended June 30, 2023 2022 Balance at beginning of year $ 36,891 $ 37,453 Additions charged to income tax expense 23,212 784 Reductions credited to income tax expense ( 8,514 ) ( 1,004 ) THWR purchase accounting 291 1,743 Currency translation adjustments 671 ( 2,085 ) Balance at end of year $ 52,551 $ 36,891 68 Table of Contents Unrecognized tax benefits activity, including interest and penalties, is summarized below: Fiscal Year Ended June 30, 2023 2022 2021 Balance at beginning of year $ 21,901 $ 22,870 $ 20,899 Additions based on tax positions related to the current year 1,519 273 343 Additions based on tax positions related to prior years 815 304 3,045 Reductions due to lapse in statute of limitations and settlements ( 268 ) ( 1,546 ) ( 1,417 ) Balance at end of year $ 23,967 $ 21,901 $ 22,870 As of June 30, 2023, the Company had $ 23,967 of unrecognized tax benefits, of which $ 20,155 represents an amount that, if recognized, would impact the effective tax rate in future periods. As of June 30, 2022, the Company had $ 21,901 of unrecognized tax benefits, of which $ 18,089 represents the amount that, if recognized, would impact the effective tax rate in future periods. As of June 30, 2021, the Company had $ 22,870 of unrecognized tax benefits of which $ 19,058 would impact the effective income tax rate in future periods. Accrued liabilities for interest and penalties were $ 3,768 and $ 2,952 at June 30, 2023 and 2022, respectively. The Company and its subsidiaries file income tax returns in the U.S. Federal jurisdiction, various U.S. state jurisdictions and several foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to fiscal 2014. However, to the extent we generated NOLs or tax credits in closed tax years, future use of the NOL or tax credit carryforward balance would be subject to examination within the relevant statute of limitations for the year in which utilized. The Company is no longer subject to tax examinations in the United Kingdom for years prior to fiscal 2021. Given the uncertainty regarding when tax authorities will complete their examinations and the possible outcomes of their examinations, a current estimate of the range of reasonably possible significant increases or decreases of income tax that may occur within the next twelve months cannot be made. Although there are various tax audits currently ongoing, the Company does not believe the ultimate outcome of such audits will have a material impact on the Company’s consolidated financial statements. 69 Table of Contents 12. STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue “blank check” preferred stock of up to 5,000 shares with such designations, rights and preferences as may be determined from time to time by the Board of Directors. Accordingly, the Board of Directors is empowered to issue, without stockholder approval, preferred stock with dividends, liquidation, conversion, voting or other rights which could decrease the amount of earnings and assets available for distribution to holders of the Company’s common stock. At June 30, 2023 and 2022, no preferred stock was issued or outstanding. Accumulated Other Comprehensive Loss The following table presents the changes in accumulated other comprehensive loss (“AOCL”): Foreign Currency Translation Adjustment, Net Deferred Gains on Cash Flow Hedging Instruments, Net Deferred (Losses) Gains on Fair Value Hedging Instruments, Net Deferred (Losses) Gains on Net Investment Hedging Instruments, Net Total Balance at June 30, 2020 $ ( 167,763 ) $ ( 761 ) $ — $ ( 2,865 ) $ ( 171,392 ) Other comprehensive income (loss) before reclassifications 85,581 ( 810 ) — ( 3,359 ) 81,412 Amounts reclassified into income 16,073 1,290 — ( 394 ) 16,969 Net change in accumulated other comprehensive income (loss) for the fiscal year ended June 30, 2021 (1) 101,654 480 — ( 3,753 ) 98,381 Balance at June 30, 2021 ( 66,109 ) ( 281 ) — ( 6,618 ) ( 73,011 ) Other comprehensive (loss) income before reclassifications ( 102,113 ) 3,511 559 9,954 ( 88,089 ) Amounts reclassified into income — ( 2,711 ) ( 59 ) ( 612 ) ( 3,382 ) Net change in accumulated other comprehensive income (loss) for the fiscal year ended June 30, 2022 (1) ( 102,113 ) 800 500 9,342 ( 91,471 ) Balance at June 30, 2022 ( 168,222 ) 519 500 2,724 ( 164,482 ) Other comprehensive income (loss) before reclassifications 30,197 15,390 ( 249 ) ( 1,022 ) 44,316 Amounts reclassified into income — ( 5,011 ) 434 ( 1,473 ) ( 6,050 ) Net change in accumulated other comprehensive income (loss) for the fiscal year ended June 30, 2023 (1) 30,197 10,379 185 ( 2,495 ) 38,266 Balance at June 30, 2023 $ ( 138,025 ) $ 10,898 $ 685 $ 229 $ ( 126,216 ) (1) See Note 16, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains (losses) on hedging instruments recorded in the Consolidated Statements of Operations during the fiscal years ended June 30, 2023, 2022, and 2021. Share Repurchase Program 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. The current 2022 authorization does not have a stated expiration date. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations. During the fiscal year ended June 30, 2023, the Company did not repurchase any shares under the repurchase program. As of June 30, 2023, the Company had $ 173,514 of remaining authorization under the share repurchase program. During the fiscal year ended June 30, 2022, the Company repurchased 10,626 shares under the repurchase program for a total of $ 408,886 excluding commissions, at an average price of $ 38.48 per share. Repurchases made during the fiscal year ended June 30, 2022, were made under a previous Board authorization. 70 Table of Contents 13. STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS Under the Company's Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the “2002 Plan”), the Company historically granted equity-based awards to its officers, senior management, other key employees, consultants, and directors. The Company currently utilizes a stockholder-approved plan, The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan (the “2022 Plan”) which was approved at the Company’s 2022 Annual Meeting of Stockholders held on November 17, 2022. The 2022 Plan permits the Company to continue making equity-based and other incentive awards in a manner intended to properly incentivize its employees, directors, consultants and other service providers by aligning their interests with the interests of the Company’s stockholders. The Company also historically granted shares under its 2019 Equity Inducement Award Program (the “2019 Inducement Program”) to induce selected individuals to become employees of the Company. The 2002 Plan, the 2022 Plan and the 2019 Inducement Program are collectively referred to as the “Stock Award Plans.” In conjunction with the Stock Award Plans, the Company maintains a long-term incentive program (the “LTI Program” or “LTIP”) that provides for equity awards, including performance and market-based equity awards that can be earned over defined performance periods. There were 1,242 , 873 and 237 shares underlying restricted stock awards (“RSAs”) or restricted share units (“RSUs”) granted under the Stock Award Plans during fiscal years 2023, 2022 and 2021, respectively, of which 1,242 , 249 and 51 , respectively, were granted under the LTIP and are subject to the achievement of minimum performance goals or market conditions, with the remaining being service-based awards. For performance awards and market awards, the foregoing share figures are stated at target levels, and the awards outstanding at June 30, 2023 generally provide for vesting at 0 % to 200 % of the target level. There were no options granted under the Stock Award Plans during fiscal years 2023, 2022 and 2021. At June 30, 2023, there were 9,316 shares available for grant under the 2022 Plan. Restricted Stock Awards of restricted stock are either RSAs or RSUs that are issued at no cost to the recipient. RSA holders have all rights of a stockholder at the grant date , subject to certain restrictions on transferability and a risk of forfeiture. There were no RSAs outstanding at June 30, 2023 . Shares underlying RSUs are not issued until vesting. Both award types are subject to continued employment and vesting conditions in accordance with provisions set forth in the applicable award agreements. The Company also grants market-based RSUs that vest contingent on meeting specific Total Shareholder Return (“TSR”) targets over a specified time period, and performance-based RSUs that vest contingent on meeting specific financial results within a specified time period. Performance-based or market-based RSUs are issued in the form of performance share units (“PSUs”). A summary of the restricted stock activity (including all RSAs, RSUs and PSUs) for the last three fiscal years ended June 30 is as follows: 2023 2022 2021 Number of Shares and Units Weighted Average Grant Date Fair Value (per share) Number of Shares and Units Weighted Average Grant Date Fair Value (per share) Number of Shares and Units Weighted Average Grant Date Fair Value (per share) Non-vested - RSAs, RSUs and PSUs 790 $ 42.44 1,780 $ 16.55 2,050 $ 15.85 Granted 1,242 $ 20.34 873 $ 43.55 237 $ 36.13 Vested ( 250 ) $ 36.23 ( 1,583 ) $ 15.61 ( 375 ) $ 25.21 Forfeited ( 494 ) $ 31.92 ( 280 ) $ 32.98 ( 132 ) $ 17.18 Non-vested - RSAs, RSUs and PSUs 1,288 $ 26.37 790 $ 42.44 1,780 $ 16.55 At June 30, 2023, the table above includes a total of 396 shares that represent the target number of shares that may be earned based on pre-defined market conditions that are eligible to vest ranging from 0 % to 200 % of target. All such shares relate to the 2022-2024 and 2023-2025 LTIP as further described below. Granted shares also include 10 shares that may be earned based on certain performance-based metrics being met, all of which remained outstanding at June 30, 2023. Vested shares during the year ended June 30, 2023 include a total of 245 shares under the 2022-2024 LTIP that vested at 100 % of target, and a total of 5 shares granted in a previous period that vested based on certain performance-based metrics being met. Vested shares during the year ended June 30, 2022 include a total of 1,299 shares under the 2019-2021 LTIP that vested at 100 % of target based on achievement of target absolute TSR levels, and a total of 13 shares granted in a previous period that vested based on certain 71 Table of Contents performance-based metrics being met. Vested shares during the year ended June 30, 2021 include a total of 20 shares under the 2018-2020 LTIP that vested at 150 % of target based on achievement of the maximum relative TSR target. The fair value of RSAs, RSUs and PSUs granted and of shares vested, and the tax benefit recognized from restricted shares vesting, for the last three fiscal years ended June 30 was as follows: Fiscal Year Ended June 30, 2023 2022 2021 Fair value of restricted stock granted $ 25,258 $ 38,005 $ 8,551 Fair value of restricted stock vested $ 4,684 $ 71,376 $ 15,847 Tax benefit recognized from restricted stock vesting $ 631 $ 3,658 $ 1,597 A t June 30, 2023, $ 18,283 of unrecognized stock-based compensation expense related to non-vested restricted stock was expected to be recognized over a weighted average period of approximately 1.6 years. Long-Term Incentive Program The participants of the LTIP include certain of the Company’s executive officers and other key executives. The LTI Program is administered by the Compensation Committee, which is responsible for, among other items, selecting the specific performance measures for awards, setting the target performance required to receive an award after the completion of the performance period, and determining the specific payout to the participants. 2023-2025 LTIP During the fiscal year ended June 30, 2023, the Company granted market-based PSU awards under the LTI Program with a total target payout of 429 shares of common stock. At June 30, 2023, 329 of such shares were outstanding. Such PSU awards 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; (ii) the date the participant’s employment is terminated due to death or Disability (as defined); or (iii) the effective date of a Change in Control (as defined) (the “2023 TSR Performance Period”). Vesting of 220 target shares of the outstanding PSU awards is pursuant to a defined calculation of relative TSR over the 2023 TSR Performance Period (the “2023 Relative TSR PSUs”). Vesting of 109 target shares of the outstanding PSU awards is pursuant to the achievement of pre-established three-year compound annual TSR targets over the 2023 TSR Performance Period (the “2023 Absolute TSR PSUs”). Total shares eligible to vest for both the 2023 Relative TSR PSUs and 2023 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: 2023 Absolute TSR PSUs Relative TSR PSUs Grant date fair value (per target share) $ 20.18 $ 27.47 Risk-free interest rate 3.54 % 3.54 % Expected dividend yield — — Expected volatility 40.30 % 26.60 % Expected term 3.00 years 3.00 years 2022-2024 LTIP During the fiscal year ended June 30, 2022, the Company granted market-based PSU awards under the LTIP with a total target payout of 193 shares of common stock. At June 30, 2023, 67 of such shares were outstanding. Vesting is pursuant to a defined calculation of either relative TSR or absolute TSR (as defined in the award agre ement) over the period from November 18, 2021 through the earlier of (i) November 17, 2024; (ii) the date the participant’s employment is terminated due to death or Disability (as defined); or (iii) the effective date of a Change in Control (as defined in the award agreement) (the “2022 TSR Performance Period”). Ves ting of 45 target shares of the outstanding PSU awards is pursuant to a defined calculation of relative TSR over the 2022 TSR Performance Period (the “2022 Relative TSR PSUs”). Vesting of 22 target shares of the outstanding PSU awards is pursuant to the achievement of pre-established three-year compound annual TSR targets over the 2022 TSR Performance Period (the “2022 Absolute TSR PSUs”). Total shares eligible to vest for both the 2022 Relative TSR PSUs and 2022 Absolute TSR PSUs range from 0 % to 200 % of the target amount. G rant date fair values are calculated using a Monte 72 Table of Contents Carlo simulation model with weighted average grant date fair values per target share and related valuation assumptions as follows: 2022 Absolute TSR PSUs Relative TSR PSUs Grant date fair value (per target share) $ 39.00 $ 60.09 Risk-free interest rate 0.89 % 0.89 % Expected dividend yield — — Expected volatility 36.93 % 24.46 % Expected term 2.99 years 2.99 years 2019-2021 LTIP Vesting is pursuant to the achievement of pre-established three-year compound annual TSR targets over the period from November 6, 2018 to November 6, 2021 with total shares eligible to vest ranging from 0 % to 300 % of the target award amount. Certain shares are subject to a holding period of one year after the vesting date, resulting in an illiquidity discount being applied to the grant date fair value for such shares. There were 51 and 554 PSUs granted during fiscal years 2021 and 2020, respectively. No such awards under the 2019-2021 LTIP were granted after fiscal year 2021. Grant date fair values are calculated using a Monte Carlo simulation model. The weighted average grant date fair values per target share and related valuation assumptions were as follows: Fiscal Year ended June 30, 2021 2020 Grant date fair value (per target share) $ 32.13 $ 10.92 Risk-free interest rate 0.13 % 1.54 % Expected dividend yield — — Expected volatility 40.37 % 36.28 % Expected term 1.17 years 1.85 years In the second quarter of fiscal 2022, the Compensation Committee determined that all outstanding awards under the 2019-2021 LTIP vested at 100 % as a result of the TSR targets having been met. Former CEO Inducement Grant On November 6, 2018, the Company’s former CEO, Mark L. Schiller received a market-based PSU award with a target payout of 350 shares of common stock and a maximum payout of 1,050 shares of common stock (the “CEO Inducement Grant”). Vesting was pursuant to the achievement of pre-established three-year compound annual TSR levels over the period from November 6, 2018 to November 6, 2021. These PSUs were subject to a holding period of one year after the vesting date. As such, an illiquidity discount was applied to the grant date fair value. The grant date fair value per target share and related valuation assumptions used in the Monte Carlo simulation to value this award were as follows: Grant date fair value (per target share) $ 21.63 Risk-free interest rate 2.99 % Expected dividend yield — Expected volatility 35.17 % Expected term 3.00 years The total grant date fair value of the award was $ 7,571 . This PSU award was granted outside of the Stock Award Plans. In the second quarter of fiscal 2022, the Compensation Committee determined that the CEO Inducement Grant vested at 100 % as a result of the TSR targets having been met. 73 Table of Contents CEO Succession 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”). On the Start Date, Ms. Davidson received the following awards under the 2023-2025 LTIP: 36 Relative TSR PSUs (at target), 18 Absolute TSR PSUs (at target) and 36 RSUs. The Relative TSR PSUs and Absolute TSR PSUs have the same TSR Performance Period, performance goals and beginning stock price as those applicable to awards granted to other employees under the 2023-2025 LTIP. The RSUs will vest in one-third (1/3) installments on each of September 6, 2023, 2024 and 2025. Additionally, in recognition of the compensation Ms. 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 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”). Mr. 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 twelve months ended June 30, 2023, and unpaid amounts are accrued at June 30, 2023. Other Grants Additionally, from time to time, the Company grants other awards that can be RSUs or PSUs to cer tain employees. RSUs generally vest over periods of one to three years based upon continued employment. PSUs generally vest over periods of one to three years based upon continued employment and the achievement of certain performance-based metrics being met. As of June 30, 2023, there were 10 of such PSUs outstanding. Summary of Stock-Based Compensation Compensation cost and related income tax benefits recognized on the Consolidated Statements of Operations for stock-based compensation plans were as follows: Fiscal Year Ended June 30, 2023 2022 2021 Selling, general and administrative expense $ 14,423 $ 15,611 $ 15,659 Related income tax benefit $ 1,734 $ 1,574 $ 1,296 Stock Options The Company did not grant any stock options in fis cal years 2023, 2022 or 2021, and there were no stock options exercised during these periods. There were 122 options outstanding at each of June 30, 2023, 2022 and 2021, relating to a grant under a prior plan. Although no further awards can be granted under the prior plan, the options outstanding continue in accordance with the terms of the plan and grant. For options outstanding and exercisable at June 30, 2023, the aggregate intrinsic value (the difference between the closing stock price on the last day of trading in the year and the exercise price) was $ 1,250 , and the weighted average remaining contractual life was 8.0 years. The weighted average exercise price of these options was $ 2.26 . At June 30, 2023, there was no unrecognized compensation expense related to stock option awards. 74 Table of Contents 14. INVESTMENTS On October 27, 2015, the Company acquired a minority equity interest in Chop’t Creative Salad Company LLC, predecessor to Founders Table Restaurant Group, LLC (“Founders Table”). Founders Table owns and operates the fast-casual restaurant chains Chop't Creative Salad Co. and Dos Toros Taqueria. The investment is being accounted for as an equity method investment due to the Company’s representation on the Board of Directors of Founders Table. At June 30, 2023 and June 30, 2022, the carrying value of the Company’s investment in Founders Table was $ 8,032 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 its investment was $ 4,766 and $ 4,965 as of June 30, 2023 and June 30, 2022, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures. During fiscal year 2022, the Company recorded an impairment charge totaling $ 1,203 related to its investment in Hain Future Natural Products Private, Ltd., a joint venture with Future Consumer Ltd, which is included as a component of equity in net loss of equity-method investees on the Consolidated Statement of Operations. 15. FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are: • Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and • 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 by level within the fair value hierarchy, assets and liabilities measured at fair value on a recurring basis as of June 30, 2023: Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Derivative financial instruments $ 16,988 $ — $ 16,988 $ — Liabilities: Derivative financial instruments $ 3,160 $ — $ 3,160 $ — The following table presents by level within the fair value hierarchy, assets and liabilities measured at fair value on a recurring basis as of June 30, 2022: Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Derivative financial instruments $ 7,476 $ — $ 7,476 $ — Equity investment 560 560 — — Total $ 8,036 $ 560 $ 7,476 $ — Liabilities: Derivative financial instruments $ 3,184 $ — $ 3,184 $ — Total $ 3,184 $ — $ 3,184 $ — 75 Table of Contents There were no transfers of financial instruments between the three levels of fair value hierarchy during the fiscal years ended June 30, 2023 or 2022. Derivative Instruments The Company uses interest rate swaps to manage its interest rate risk and cross-currency swaps and foreign currency exchange contracts to manage its exposure to fluctuations in foreign currency exchange rates. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. 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. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has 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 June 30, 2023 and 2022 were classified as Level 2 of 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. The Company completed its annual assessment of impairment for indefinite-lived intangible assets in the fourth quarter of fiscal 2023 and recorded non-cash impairment charges of $ 4,767 , $ 4,691 and $ 9,150 for Imagine ® , Joya ® , and Queen Helene ® intangible assets, respectively ( see Note 8 , Goodwill and Other Intangible Assets) . As of June 30, 2023, these intangible assets were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair value of $ 9,318 . During the fiscal year ended June 30, 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 impairment tests for the ParmCrisps ® and Thinsters ® trademarks, the Company completed an impairment test of the ParmCrisps ® and Thinsters ® asset group and recorded a non-cash impairment charge of $ 45,798 for the ParmCrisps ® asset group ( see Note 8 , Goodwill and Other Intangible Assets) . As of June 30, 2023, THWR intangible assets were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair value of $ 32,389 , which was calculated during the third quarter of fiscal year ended June 30, 2023. 76 Table of Contents 16. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. 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. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s receivables and borrowings. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign exchange rates. 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. Dollar. Accordingly, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not use derivatives for speculative or trading purposes. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. 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 fiscal 2023 and 2022, 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 fiscal 2024, the Company estimates that an additional $ 8,717 will be reclassified as a decrease to interest expense. As of June 30, 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 Interest rate swap 4 $ 400,000 Cash Flow Hedges of Foreign Exchange Risk The Company is exposed to fluctuations in various foreign currencies against its functional currency, the U.S. Dollar. 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 instrument. The Company, at times, also uses forward contracts to manage its exposure to fluctuations in the GBP-EUR exchange rates. The Company designates these derivatives as cash flow hedges of foreign exchange risks. For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. During fiscal 2024, the Company estimates that no amount relating to cross-currency swaps will be reclassified to interest expense. As of June 30, 2023, the Company had no outstanding foreign currency derivatives that were used to hedge its foreign exchange risks. 77 Table of Contents Net Investment Hedges The Company is exposed to fluctuations in foreign exchange rates on investments it holds in its European foreign entities and their exposure to the Euro. The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in the foreign exchange rate on its foreign investment in Europe. Currency forward agreements involve fixing the USD-EUR exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in U.S. Dollars for their fair value at or close to their settlement date. 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 June 30, 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 Cross-currency swap 4 € 100,300 $ 105,804 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 interest and other financing expense, net. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company’s accounting policy election. The earnings recognition of excluded components is presented in the same income statement line item as the earnings effect of the hedged transaction. During fiscal 2024, the Company estimates that an additional $ 476 relating to cross-currency swaps will be reclassified as a decrease to interest expense.   As of June 30, 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 June 30, 2023, 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 Fiscal Year Ended June 30, Fiscal Year Ended June 30, 2023 2022 2023 2022 Intercompany loan receivable $ 26,945 $ 25,899 $ 924 $ 122 78 Table of Contents 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 June 30, 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 $ 8,649 Accrued expenses and other current liabilities $ — Interest rate swaps Other noncurrent assets 5,974 Other noncurrent liabilities — Cross-currency swaps Prepaid expenses and other current assets 2,365 Accrued expenses and other current liabilities — Cross-currency swaps Other noncurrent assets — Other noncurrent liabilities 3,160 Total derivatives designated as hedging instruments $ 16,988 $ 3,160 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 June 30, 2022: 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 $ 4,230 Accrued expenses and other current liabilities $ — Interest rate swaps Other noncurrent assets — Other noncurrent liabilities 3,184 Cross-currency swaps Prepaid expenses and other current assets 2,400 Accrued expenses and other current liabilities — Cross-currency swaps Other noncurrent assets 846 Other noncurrent liabilities — 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 as of June 30, 2023, 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) Location of Gain (Loss) Reclassified from AOCL into Income (Expense) Fiscal Year Ended June 30, Fiscal Year Ended June 30, 2023 2022 2021 2023 2022 2021 Interest rate swaps $ 20,413 $ 1,341 $ 279 Interest and other financing expense, net $ 6,918 $ 27 $ ( 308 ) Cross-currency swaps — 3,129 ( 1,366 ) Interest and other financing expense, net / Other expense (income), net ( 275 ) 3,296 ( 1,398 ) Foreign currency forward contracts 80 ( 93 ) ( 78 ) Cost of sales — 108 ( 67 ) Total $ 20,493 $ 4,377 $ ( 1,165 ) $ 6,643 $ 3,431 $ ( 1,773 ) 79 Table of Contents The following table presents the pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations as of June 30, 2023 and 2022: Location and Amount of Gain (Loss) Recognized in the Consolidated Statements of Operations on Cash Flow Hedging Relationships Fiscal Year Ended June 30, 2023 Fiscal Year Ended June 30, 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 The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships Interest rate swaps Amount of gain reclassified from AOCL into income $ — $ 6,918 $ — $ — $ 27 $ — Cross-currency swaps Amount of (loss) gain reclassified from AOCL into (expense) income $ — $ ( 275 ) $ — $ — $ 78 $ 3,218 Foreign currency forward contracts Amount of gain reclassified from AOCL into income $ — $ — $ — $ 108 $ — $ — The following table presents the pre-tax effect of fair value hedge accounting on AOCL as of June 30, 2023, 2022 and 2021: Derivatives in Fair Value Hedging Relationships Amount of (Loss) Gain Recognized in AOCL on Derivatives Location of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing) Amount of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing) Fiscal Year Ended June 30, Fiscal Year Ended June 30, 2023 2022 2021 2023 2022 2021 Cross-currency swaps $ ( 310 ) $ 708 $ — Interest and other financing expense, net $ 489 $ 75 $ — Total $ ( 310 ) $ 708 $ — $ 489 $ 75 $ — The following table presents the pre-tax effect of the Company’s derivative financial instruments electing fair value hedge accounting on the Consolidated Statements of Operations as of June 30, 2023 and 2022: Location and Amount of (Loss) Gain Recognized in the Consolidated Statements of Operations on Fair Value Hedging Relationships Fiscal Year Ended June 30, 2023 Fiscal Year Ended June 30, 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 The effects of fair value hedging: Gain on fair value hedging relationships Cross-currency swaps Amount of (loss) gain reclassified from AOCL into (expense) income $ — $ ( 557 ) $ — $ — $ 75 $ 122 80 Table of Contents The following table presents the pre-tax effect of the Company’s net investment hedges on Accumulated other comprehensive loss and the Consolidated Statements of Operations as of June 30, 2023, 2022 and 2021: Derivatives in Net Investment Hedging Relationships Amount of (Loss) Gain Recognized in AOCL on Derivatives Location of Gain Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing) Amount of Gain Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing) Fiscal Year Ended June 30, Fiscal Year Ended June 30, 2023 2022 2021 2023 2022 2021 Cross-currency swaps $ ( 1,279 ) $ 12,599 $ ( 4,251 ) Interest and other financing expense, net $ 1,963 $ 772 $ 498 Credit-Risk-Related Contingent Features 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. 17. COMMITMENTS AND CONTINGENCIES Securities Class Actions Filed in Federal Court On August 17, 2016, three securities class action complaints were filed in the Eastern District of New York (the “District Court”) against the Company alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The three complaints are: (1) Flora v. The Hain Celestial Group, Inc., et al. (the “Flora Complaint”); (2) Lynn v. The Hain Celestial Group, Inc., et al. (the “Lynn Complaint”); and (3) Spadola v. The Hain Celestial Group, Inc., et al. (the “Spadola Complaint” and, together with the Flora and Lynn Complaints, the “Securities Complaints”). On June 5, 2017, the District Court issued an order for consolidation, appointment of Co-Lead Plaintiffs and approval of selection of co-lead counsel. Pursuant to this order, the Securities Complaints were consolidated under the caption In re The Hain Celestial Group, Inc. 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. The Co-Lead Plaintiffs in the Consolidated Securities Action filed a Consolidated Amended Complaint on August 4, 2017 and a Corrected Consolidated Amended Complaint on September 7, 2017 on behalf of a purported class consisting of all persons who purchased or otherwise acquired Hain Celestial securities between November 5, 2013 and February 10, 2017 (the “Amended Complaint”). The Amended Complaint named as defendants the Company and certain of its former officers (collectively, “Defendants”) and asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls. Defendants filed a motion to dismiss the Amended Complaint on October 3, 2017 which the District Court granted on March 29, 2019, dismissing the case in its entirety, without prejudice to replead. Co-Lead Plaintiffs filed a Second Amended Consolidated Class Action Complaint on May 6, 2019 (the “Second Amended Complaint”). The Second Amended Complaint again named as defendants the Company and certain of its former officers and asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations similar to those in the Amended Complaint, including materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results, and internal controls. Defendants filed a motion to dismiss the Second Amended Complaint on June 20, 2019. On April 6, 2020, the District Court granted Defendants’ motion to dismiss the Second Amended Complaint in its entirety, with prejudice. Co-Lead Plaintiffs appealed the District Court’s decision dismissing the Second Amended Complaint to the United States Court of Appeals for the Second Circuit (the "Second Circuit"). By decision dated December 17, 2021, the Second Circuit vacated the District Court’s judgment and remanded the case for further proceedings. On April 6, 2022, the District Court issued an order directing the parties to submit position papers outlining their views regarding: (a) the scope of the Court's reconsideration of Defendants’ Motion to Dismiss the Second Amended Complaint; and (b) the appropriate procedure the Court should follow in light of the Second Circuit's opinion. 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’ 81 Table of Contents Motion to Dismiss the Second Amended Complaint with prejudice. Plaintiffs filed Objections to Magistrate Judge’s November 4, 2022 Report and Recommendation on December 7, 2022, and Defendants filed their Opposition to Plaintiffs’ Objections to Magistrate Judge’s November 4, 2022 Report and Recommendation on January 9, 2023. The Parties await a decision from the District Court on Defendants’ Motion to Dismiss the Second Amended Complaint. Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court On April 19, 2017 and April 26, 2017, two class action and stockholder derivative complaints were filed in the Eastern District of New York against the former Board of Directors and certain former officers of the Company under the captions Silva v. Simon, et al. (the “Silva Complaint”) and Barnes v. Simon, et al. (the “Barnes Complaint”), respectively. Both the Silva Complaint and the Barnes Complaint allege violation of securities law, breach of fiduciary duty, waste of corporate assets and unjust enrichment. On May 23, 2017, an additional stockholder filed a complaint under seal in the Eastern District of New York against the former Board of Directors and certain former officers of the Company. The complaint alleged that the Company’s former directors and certain former officers made materially false and misleading statements in press releases and SEC filings regarding the Company’s business, prospects and financial results. The complaint also alleged that the Company violated its by-laws and Delaware law by failing to hold its 2016 Annual Stockholders Meeting and includes claims for breach of fiduciary duty, unjust enrichment and corporate waste. On August 9, 2017, the District Court granted an order to unseal this case and reveal Gary Merenstein as the plaintiff (the “Merenstein Complaint”). On August 10, 2017, the District Court granted the parties' stipulation to consolidate the Barnes Complaint, the Silva Complaint and the Merenstein Complaint under the caption In re The Hain Celestial Group, Inc. Stockholder Class and Derivative Litigation (the “Consolidated Stockholder Class and Derivative Action”) and to appoint Robbins Arroyo LLP and Scott+Scott as Co-Lead Counsel, with the Law Offices of Thomas G. Amon as Liaison Counsel for Plaintiffs. On September 14, 2017, a related complaint was filed under the caption Oliver v. Berke, et al. (the “Oliver Complaint”), and on October 6, 2017, the Oliver Complaint was consolidated with the Consolidated Stockholder Class and Derivative Action. 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 March 29, 2019, the District Court in the Consolidated Securities Action granted Defendants’ motion, dismissing the Amended Complaint in its entirety, without prejudice to replead. Co-Lead Plaintiffs in the Consolidated Securities Action filed the Second Amended Complaint on May 6, 2019. The parties to the Consolidated Stockholder Class and Derivative Action agreed to continue the stay of Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through 30 days after a decision on Defendants' motion to dismiss the Second Amended Complaint in the Consolidated Securities Action. On April 6, 2020, the District Court granted Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action, with prejudice. Pursuant to the terms of the stay, Defendants in the Consolidated Stockholder Class and Derivative Action had until May 6, 2020 to answer, move, or otherwise respond to the complaint in this matter. This deadline was extended, and Defendants moved to dismiss the Consolidated Stockholder Class and Derivative Action Complaint on June 23, 2020, with Plaintiffs’ opposition due August 7, 2020. On July 24, 2020, Plaintiffs made a stockholder litigation demand on the current Board containing overlapping factual allegations to those set forth in the Consolidated Stockholder Class and Derivative Action. On August 10, 2020, the District Court vacated the briefing schedule on Defendants’ pending motion to dismiss in order to give the Board of Directors time to consider the demand. On each of September 8 and October 8, 2020, the District Court extended its stay of any applicable deadlines for 30 days to give the Board of Directors additional time to complete its evaluation of the demand. On November 3, 2020, Plaintiffs were informed that the Board of Directors had finished investigating and resolved, among other things, that the demand should be rejected. On November 6, 2020, Plaintiffs and Defendants notified the District Court that Plaintiffs were evaluating the rejection of the demand, sought certain additional information and were assessing next steps, and requested that the District Court extend the stay for an additional 30 days, to on or around December 7, 2020. The Parties then filed a number of additional joint status reports, requesting that the District Court continue the stay of applicable deadlines through December 30, 2021. In light of the Second Circuit vacating the District Court’s judgment in the Consolidated Securities Action referenced above and remanding the case for further proceedings, the Parties submitted a joint status report on December 29, 2021 requesting that the District Court continue the temporary stay pending the District Court’s reconsideration of the Defendants’ 82 Table of Contents motion to dismiss the Second Amended Complaint in the Consolidated Securities Action. The District Court has since further extended the temporary stay through September 5, 2023. Baby Food Litigation 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 filed a motion to dismiss the Consolidated Class Action Complaint on November 7, 2022. The plaintiffs filed their opposition on December 22, 2022, and the Company filed its reply brief on January 20, 2023. On May 9, 2023, upon consent of the parties, the Court stayed this action pending the Second Circuit’s decision on appeal in In re Beech-Nut Nutrition Co. Baby Food Litigation, 21 Civ. 133 (N.D.N.Y.). Accordingly, the Court denied the Company’s motion to dismiss without prejudice to renew. One consumer class action is pending in New York Supreme Court, Nassau County, which the court has stayed in deference to the Consolidated Proceeding. The Company denies the allegations in these lawsuits and contends that its baby foods are safe and properly labeled. The claims raised in these lawsuits were brought in the wake of a highly publicized report issued by the U.S. House of Representatives Subcommittee on Economic and Consumer Policy on Oversight and Reform, dated February 4, 2021 (the “House Report”), addressing the presence of heavy metals in baby foods made by certain manufacturers, including the Company. Since the publishing of the House Report, the Company has also received information requests with respect to the advertising and quality of its baby foods from certain governmental authorities, as such authorities investigate the claims made in the House Report. The Company is fully cooperating with these requests and is providing documents and other requested information. The Company has been named in one civil government enforcement action, State of New Mexico ex rel. Balderas v. Nurture, Inc., et al., which was filed by the New Mexico Attorney General against the Company and several other manufacturers based on the alleged presence of heavy metals in their baby food products. The Company and several other manufacturers moved to dismiss the New Mexico Attorney General’s lawsuit, which motion the Court denied. The Company filed its answer to the New Mexico Attorney General’s amended complaint on April 23, 2022. The Company denies the New Mexico Attorney General’s allegations and maintains that its baby foods are safe, properly labeled, and compliant with New Mexico law. In addition to the consumer class actions discussed above, the Company is currently named in 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 v. The Hain Celestial Group, Inc., a jury trial commenced on February 6, 2023 in the United States District Court for the 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 filed their appellate brief on July 12, 2023. It is expected that the matter will be fully briefed this fall. No argument date has been set. • In the matter NC v. The Hain Celestial Group, et al., pending in the 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. The Court will hear arguments on the parties’ expert and dispositive motions in August and September. • There are currently two Nevada state court cases pending in Clark County District Court. The cases, Benitez v. Beech-Nut Nutrition Company, Inc., et al. and Buenaventura v. 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 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 April 29, 2024. On June 30, 2023, Plaintiffs filed a Motion to Remand the case to Louisiana state court. Defendants filed their Opposition on July 18, 2023. The Motion was heard on August 17, 2023, and the parties await a decision. The parties are currently engaging in discovery. 83 Table of Contents • On January 9, 2023, Plaintiffs in P.A. v. Hain Celestial Group, Inc., et al. filed their First Amended Complaint in the Circuit Court of the First Circuit, State of Hawai’i. 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. et al. filed his Complaint in the Superior Court for the State of California, County of Los Angeles. Plaintiff filed an Amended Complaint on June 16, 2023. Defendants filed a Demurrer to the Amended Complaint on July 17, 2023, which will be heard for argument on September 1, 2023. The parties have a status conference on September 1, 2023 and discovery is stayed until further notice. Additionally, on July 25, 2023, Plaintiffs in DMP v. Beech-Nut Nutrition Company, Inc. et al., currently pending in the United States District Court for the District of Nevada, filed a Motion for Leave to Amend the Complaint. In their Motion, Plaintiffs seek to add the Company as a defendant, among other changes. The Company denies that its Products led to any of the alleged injuries and will defend these cases vigorously. That said, additional lawsuits may be filed against the Company in the future, asserting similar or different legal theories and seeking similar or different types of damages and relief. Such lawsuits may be resolved in a manner adverse to us, and we may incur substantial costs or damages not covered by our insurance, which could have a material adverse effect on our financial condition and business. Other In addition to the litigation described above, the Company is and may be a defendant in lawsuits from time to time in the normal course of business. With respect to all litigation and related matters, the Company records a liability when the Company believes it is probable that a liability has been incurred and the amount can be reasonably estimated. As of the end of the period covered by this report, the Company has not recorded a liability for any of the matters disclosed in this note. It is possible that some matters could require the Company to pay damages, incur other costs or establish accruals in amounts that could not be reasonably estimated as of the end of the period covered by this report. 18. DEFINED CONTRIBUTION PLANS The Company has a 401(k) Employee Retirement Plan (the “Plan”) to provide retirement benefits for eligible employees. All full-time employees of the Company and its wholly-owned domestic subsidiaries are eligible to participate upon completion of 30 days of service. On an annual basis, the Company may, in its sole discretion , make certain matching contributions. For the fiscal years ended June 30, 2023, 2022 and 2021, we made contributions to the Plan of $ 2,307 , $ 2,091 and $ 2,025 , respectively, and recorded retirement plan expense in the amount of $ 2,457 , $ 2,141 and $ 2,482 , respectively. In addition, while certain of the Company’s international subsidiaries maintain separate defined contribution plans for their employees, except for the United Kingdom, the amounts are not significant to the Company’s consolidated financial statements. Certain United Kingdom subsidiaries offer an auto-enrollment defined contribution plan to all employees. Employees must be aged 22 or over but under the State Pension age and have earned over £ 10 . Employees outside of these criteria have the option to opt-in. Employees must contribute a minimum percentage to the plan and the United Kingdom subsidiaries make matching contributions. For the fiscal years ended June 30, 2023, 2022 and 2021, there were contributions and retirement plan expense recorded in the amount of $ 2,096 , $ 2,379 and $ 3,487 , respectively. 19. SEGMENT INFORMATION Our organizational structure consists of two geographic based reportable segments: North America and International. This structure is in line with how the Company’s Chief Operating Decision Maker (“CODM”) assesses the Company’s performance and allocates resources. The Company historically used segment net sales and operating income to evaluate performance and to allocate resources. In connection with the appointment of its new CEO effective as of January 1, 2023, the Company undertook a series of actions to reassess its segments, including how performance is evaluated and how resources are allocated. As part of that review, during the fourth quarter of fiscal 2023, the Company determined there were two operating segments which are also the reportable segments. Furthermore, Adjusted EBITDA was determined to be a more appropriate measure of segment profitability for each reportable segment compared to operating income. The Company has concluded that segment net sales and segment Adjusted EBITDA are most relevant in order to analyze segment results and trends. 84 Table of Contents Segment Adjusted EBITDA excludes: (benefit) provision for income taxes, net interest expense, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses (gains), certain litigation and related costs, CEO succession costs, plant closure related costs-net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, costs associated with acquisitions, divestitures and other transactions, gains on sales of assets, certain inventory write-downs in 2022 and 2021, intangibles and long-lived asset impairments and other adjustments. In addition, Segment Adjusted EBITDA does not include Corporate and Other expenses related to the Company’s centralized administrative functions, which do not specifically relate to a reportable segment. Such Corporate and Other expenses are comprised mainly of compensation and related expenses of certain of the Company’s senior executive officers and other employees who perform duties related to our entire enterprise, litigation expense and expenses for certain professional fees, facilities, and other items which benefit the Company as a whole. The following tables set forth financial information about each of the Company’s reportable segments. Information about total assets by segment is not disclosed because such information is not reported to or used by the Company’s CODM for purposes of assessing segment performance or allocating resources. Transactions between reportable segments were insignificant for all periods presented. Fiscal Year Ended June 30, 2023 2022 2021 Net Sales: North America $ 1,139,162 $ 1,163,132 $ 1,104,128 International 657,481 728,661 866,174 $ 1,796,643 $ 1,891,793 $ 1,970,302 Adjusted EBITDA: North America $ 123,443 $ 122,235 $ 162,045 International 82,945 110,073 133,882 Total Reportable Segments Adjusted EBITDA 206,388 232,308 295,927 Corporate and Other ( 39,766 ) ( 31,692 ) ( 36,989 ) 166,622 200,616 258,938 Impairment charges Inventory write-down — 351 421 Intangibles and long-lived asset impairment ( 175,501 ) ( 1,903 ) ( 57,920 ) Acquisitions, divestitures and other Transaction and integration costs, net ( 2,018 ) ( 14,055 ) ( 3,291 ) Gain on sale of assets 3,529 9,049 4,900 Gain on sale of businesses — — 2,680 Restructuring activities CEO succession ( 5,113 ) — — Plant closure related costs, net ( 94 ) ( 929 ) ( 58 ) Productivity and transformation costs ( 7,284 ) ( 8,803 ) ( 12,572 ) Warehouse/manufacturing consolidation and other costs, net ( 1,026 ) ( 2,721 ) ( 11,374 ) Litigation and related costs 1,369 ( 7,687 ) ( 995 ) Depreciation and amortization ( 50,777 ) ( 46,849 ) ( 49,569 ) Equity in net loss of equity-method investees ( 1,134 ) ( 2,902 ) ( 1,591 ) Interest expense, net ( 43,936 ) ( 10,226 ) ( 5,880 ) Benefit (provision) for income taxes 14,178 ( 22,716 ) ( 41,093 ) Stock-based compensation, net ( 14,423 ) ( 15,611 ) ( 15,659 ) Unrealized currency (losses) gains ( 929 ) 2,259 ( 828 ) Net (loss) income $ ( 116,537 ) $ 77,873 $ 66,109 85 Table of Contents The Company’s net sales by geographic region, which are generally based on the location of the Company’s subsidiary, are as follows: Fiscal Year Ended June 30, 2023 2022 2021 United States $ 1,025,988 $ 1,037,082 $ 954,415 United Kingdom 477,400 500,949 607,674 Europe 180,080 227,712 258,501 All other 113,175 126,050 149,712 Total $ 1,796,643 $ 1,891,793 $ 1,970,302 The Company’s long-lived assets, which primarily represent net property, plant and equipment, net and operating lease right-of-use assets, net by geographic region are as follows: Fiscal Year Ended June 30, 2023 2022 United States $ 162,798 $ 182,038 United Kingdom 134,908 133,213 Europe 72,016 70,390 All other 22,497 26,455 Total $ 392,219 $ 412,096 20. RELATED PARTY TRANSACTIONS On November 9, 2021, the Company entered into a share repurchase agreement with the Selling Stockholders, which are affiliates of Engaged Capital, LLC, pursuant to which the Company agreed to repurchase, directly from the Selling Stockholders, 1,700 shares of the Company’s common stock for $ 45.00 per share (the “Share Repurchase”) , which equaled the price at which the Underwriter (as defined below) purchased shares from the Selling Stockholders, net of underwriting commissions and discounts, in an underwritten public offering that launched on November 10, 2021, whereby the Selling Stockholders sold certain other shares of common stock (the “Offering”). The last reported sale price of the Company’s common stock on the NASDAQ Global Select Market on November 9, 2021 was $ 47.95 per share. In connection with the Offering, on November 10, 2021, the Company entered into an underwriting agreement with Morgan Stanley & Co. LLC, as underwriter (the “Underwriter”), and the Selling Stockholders. The Share Repurchase and the Offering were completed on November 15, 2021. The aggregate price paid by the Company for the Share Repurchase was $ 76,500 , 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. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.