What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-05-09 · 265 added, 425 removed, 564 unchanged (55% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

MARCH 31, 2023 AND JUNE 30, 2022

SEPTEMBER 30, 2023 AND JUNE 30, 2023

(In thousands, except par values)

March 31, June 30,

September 30, June 30,

Current assets:

4 unchanged sentences

Prepaid expenses and other current assets 56,044 66,378

Assets held for sale 1,250 1,840

Total current assets 565,753 591,031

36 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In thousands, except per share amounts)

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

2023 2022 2023 2022

Three Months Ended September 30,

Net sales $ 425,029 $ 439,351

2 unchanged sentences

Selling, general and administrative expenses 77,169 74,951

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

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

Productivity and transformation costs

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

Amortization of acquired intangible assets 1,955 2,788

Long-lived asset impairment 694 —

Operating (loss) income ( 2,278 ) 15,823

Interest and other financing expense, net 13,244 7,677

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

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

Other income, net ( 265 ) ( 1,790 )

(Loss) income from operations before income taxes and equity in net loss of equity-method investees ( 15,257 ) 9,936

(Benefit) provision for income taxes ( 5,379 ) 2,631

10 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In thousands)

Three Months Ended

March 31, 2023 March 31, 2022

amount Tax (expense) benefit After-tax amount Pretax

amount Tax (expense) benefit After-tax amount

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

Other comprehensive income (loss):

Foreign currency translation adjustments before reclassifications $ 15,250 $ — 15,250 $ ( 18,701 ) $ — ( 18,701 )

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

( 6,031 ) 1,521 ( 4,510 ) 1,841 ( 387 ) 1,454

Change in deferred gains on fair value hedging instruments 172 ( 43 ) 129 — — —

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

( 628 ) 160 ( 468 ) 1,426 ( 299 ) 1,127

Total other comprehensive income (loss)

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

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

Nine Months Ended

March 31, 2023 March 31, 2022

September 30, 2023 September 30, 2022

amount Tax (expense) benefit After tax amount Pretax

1 unchanged sentence

Net (loss) income $ ( 10,376 ) $ 6,923

Other comprehensive income (loss):

Other comprehensive loss:

Foreign currency translation adjustments before reclassifications ( 32,933 ) — ( 32,933 ) ( 67,149 ) — ( 67,149 )

1 unchanged sentence

3,238 ( 794 ) 2,444 14,231 ( 3,638 ) 10,593

Change in deferred gains on fair value hedging instruments 591 ( 145 ) 446 — — —

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

Change in deferred losses on fair value hedging instruments

( 381 ) 94 ( 287 ) ( 272 ) 69 ( 203 )

Total other comprehensive income (loss)

Change in deferred gains on net investment hedging instruments

1,821 ( 452 ) 1,369 5,773 ( 1,476 ) 4,297

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

Total other comprehensive loss

$ ( 28,255 ) $ ( 1,152 ) $ ( 29,407 ) $ ( 47,417 ) $ ( 5,045 ) $ ( 52,462 )

Total comprehensive loss $ ( 39,783 ) $ ( 45,539 )

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2023

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

(In thousands, except par values)

4 unchanged sentences

Balance at June 30, 2023 111,339 $ 1,113 $ 1,217,549 $ 652,561 21,864 $ ( 727,100 ) $ ( 126,216 ) $ 1,017,907

Net income 6,923 6,923

Net loss ( 10,376 ) ( 10,376 )

Other comprehensive loss ( 29,407 ) ( 29,407 )

4 unchanged sentences

Balance at September 30, 2023 111,578 $ 1,116 $ 1,221,291 $ 642,185 21,950 $ ( 727,975 ) $ ( 155,623 ) $ 980,994

Net income 10,966 10,966

Other comprehensive income 53,598 53,598

Issuance of common stock pursuant to stock-based compensation plans

Employee shares withheld for taxes

39 ( 754 ) ( 754 )

Stock-based compensation expense 3,435 3,435

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

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

Other comprehensive income 10,401 10,401

Issuance of common stock pursuant to stock-based compensation plans

Employee shares withheld for taxes

3 ( 68 ) ( 68 )

Stock-based compensation expense 3,228 3,228

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

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022

(In thousands, except par values)

9 unchanged sentences

10 ( 229 ) ( 229 )

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

Stock-based compensation expense 3,994 3,994

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

Net income 30,889 30,889

Other comprehensive loss ( 256 ) ( 256 )

Issuance of common stock pursuant to stock-based compensation plans

1,436 14 ( 14 ) —

Employee shares withheld for taxes

654 ( 29,858 ) ( 29,858 )

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

Stock-based compensation expense 4,156 4,156

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

Net income 24,531 24,531

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

Issuance of common stock pursuant to stock-based compensation plans

Employee shares withheld for taxes

40 ( 1,597 ) ( 1,597 )

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

Stock-based compensation expense 3,846 3,846

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

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED MARCH 31, 2023 AND 2022

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In thousands)

Nine Months Ended March 31,

Three Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income $ ( 10,376 ) $ 6,923

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

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

Depreciation and amortization 12,305 11,970

2 unchanged sentences

Stock-based compensation, net 3,742 3,994

Intangibles and long-lived asset impairment 156,923 303

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

Long-lived asset impairment 694 —

Loss (gain) on sale of assets 62 ( 60 )

Other non-cash items, net ( 556 ) ( 1,457 )

5 unchanged sentences

Accounts payable and accrued expenses 21,940 ( 2,764 )

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

Net cash provided by (used in) operating activities 14,030 ( 5,116 )

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment ( 6,906 ) ( 7,215 )

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

Investments and joint ventures, net — 191

5 unchanged sentences

Repayments under bank revolving credit facility ( 57,000 ) ( 68,000 )

Borrowings under term loan — 300,000

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

Payments of other debt, net ( 3,834 ) ( 72 )

Share repurchases — ( 397,405 )

Employee shares withheld for taxes

11 unchanged sentences

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

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

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

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Intercompany accounts and transactions have been eliminated in consolidation.

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

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

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

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

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

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

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

Operating results for the three months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024.

Please refer to the Notes to the Consolidated Financial Statements as of June 30, 2023 and for the fiscal year then ended included in the Form 10-K for information not included in these condensed notes.

All amounts in the unaudited consolidated financial statements, notes and tables have been rounded to the nearest thousand, except par values and per share amounts, unless otherwise indicated.

Reclassifications

Certain prior year amounts have been reclassified to conform with current year presentation.

All amounts in the unaudited consolidated financial statements, notes and tables have been rounded to the nearest thousands, except par values and per share amounts, unless otherwise indicated.

Significant Accounting Policies

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

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

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

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

The principal amount of receivables sold under these arrangements was $ 86,506 and $ 83,659 during the three months ended September 30, 2023 and 2022, respectively.

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

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

Recently Issued and Adopted Accounting Pronouncements

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

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

This standard will not have any impact on the Company's consolidated financial statements.

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

The guidance allows for companies to:

(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.

EARNINGS PER SHARE

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

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

2023 2022 2023 2022

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

Recently Adopted Accounting Pronouncements

In July 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-03, “ Presentation of Financial Statement (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718) ”, to amend various SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No.

120, among other things.

The Company adopted this conforming guidance upon issuance, which had no material impact on its condensed consolidated financial statements and related disclosures.

(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:

Three Months Ended September 30,

Net (loss) income $ ( 10,376 ) $ 6,923

4 unchanged sentences

89,512 89,493

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

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

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

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

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

Furthermore, 366 and 541 stock-based awards outstanding at March 31, 2023 and 2022, respectively, were excluded from the calculation of diluted net (loss) income per share for the nine months ended March 31, 2023 and 2022, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

Share Repurchase Program

In January 2022, the Company's Board of Directors (the "Board") 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 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 nine months ended March 31, 2023, the Company did not repurchase any shares under the repurchase program.

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

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

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

ACQUISITION AND DISPOSITION

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 (as defined in Note 9, Debt and Borrowings ).

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

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

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

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

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

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

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

Unaudited supplemental pro forma information

Three Months Ended Nine Months Ended

March 31, 2022 March 31, 2022

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

Net income from operations (1)

$ 26,970 $ 81,415

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

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

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

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

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

Basic net (loss) income per common share $ ( 0.12 ) $ 0.08

Diluted net (loss) income per common share $ ( 0.12 ) $ 0.08

Due to the incurred net loss in the three months ended September 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 489 restricted stock awards excluded from the calculation of diluted net income per share for the three months ended September 30, 2022, as such awards were anti-dilutive.

Additionally, for the three months ended September 30, 2023 and 2022 there were 372 and 298 , stock-based awards outstanding, that were contingently issuable based on market conditions, and such conditions had not been achieved during the respective periods.

Inventories consisted of the following:

September 30,

2023 June 30,

4 unchanged sentences

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

September 30,

2023 June 30,

9 unchanged sentences

$ 285,972 $ 296,325

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

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

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

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

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

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

Three Months Ended Nine Months Ended

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

Depreciation expense for the three months ended September 30, 2023 and 2022 was $ 9,826 and $ 8,067 , respectively.

During the three months ended September 30, 2023, the Company completed the sale of a facility in the United States for total cash proceeds of $ 1,182 , net of brokerage and other fees, resulting in a loss in the amount of $ 68 , which is included as a component of other income, net on the Consolidated Statement of Operations.

The facility was held for sale as of June 30, 2023 with a net carrying amount of $ 1,250 .

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

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

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

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

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

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

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

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

The components of lease expenses for the three months ended September 30, 2023 and 2022 were as follows:

Three Months Ended

September 30, 2023 September 30, 2022

Operating lease expenses $ 4,578 $ 4,975

4 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

Leases Classification March 31, 2023 June 30, 2022

Leases Classification September 30, 2023 June 30, 2023

Operating lease ROU assets, net Operating lease right-of-use assets, net $ 102,540 $ 95,894

7 unchanged sentences

Additional information related to leases is as follows:

Nine Months Ended

March 31, 2023 March 31, 2022

Three Months Ended

September 30, 2023 September 30, 2022

Supplemental cash flow information

5 unchanged sentences

Operating leases $ 10,986 $ 7,143

$ ( 2,740 ) $ 8,198

Finance leases $ — $ 26

5 unchanged sentences

Finance leases 4.5 % 4.3 %

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

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

Maturities of lease liabilities as of September 30, 2023 were as follows:

Fiscal Year Operating leases Finance leases Total

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GOODWILL AND OTHER INTANGIBLE ASSETS

The following table provides changes in the carrying value of goodwill by reportable segment:

The following table provides the changes in the carrying value of goodwill by reportable segment:

North America International Total

Balance as of June 30, 2023 $ 697,053 $ 241,587 $ 938,640

Acquisition (1)

( 794 ) — ( 794 )

Divestiture (2)

( 3,054 ) — ( 3,054 )

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

Balance as of March 31, 2023

Translation ( 1,001 ) ( 9,264 ) ( 10,265 )

Balance as of September 30, 2023

$ 696,052 $ 232,323 $ 928,375

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

See Note 4, Acquisition and Disposition.

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

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

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

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

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

There were no events or circumstances that warranted an interim impairment test for goodwill during the three months ended September 30, 2023 or 2022.

Other Intangible Assets

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

September 30,

2023 June 30,

8 unchanged sentences

Net other intangible assets $ 290,867 $ 298,105

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

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

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

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

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

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

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

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

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

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

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

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

(1) The gross carrying value of trademarks and tradenames is reflected net of $ 223,981 of accumulated impairment charges as of September 30, 2023 and June 30, 2023 .

(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.

There were no events or circumstances that warranted an interim impairment test for indefinite-lived intangible assets during the three months ended September 30, 2023 or 2022.

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

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

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

2023 2022 2023 2022

Three Months Ended September 30,

Amortization of acquired intangibles $ 1,955 $ 2,788

6 unchanged sentences

Debt and borrowings consisted of the following:

September 30,

2023 June 30,

11 unchanged sentences

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 $ 1,100,000 in the aggregate, consisting of (1) $ 300,000 in aggregate principal amount of term loans (the “Term Loans”) and (2) an $ 800,000 senior secured revolving credit facility (which includes borrowing capacity available for letters of credit and is comprised of a $ 440,000 U.S.

revolving credit facility and $ 360,000 global revolving credit facility) (the “Revolver”).

On August 22, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the 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 million in the aggregate, consisting of (1) $ 300 million in aggregate principal amount of term loans (the “Term Loans”) and (2) an $ 800 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and is comprised of a $ 440 million U.S.

revolving credit facility and $ 360 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.

The minimum consolidated interest coverage ratio is 2.75 :1.00.

The maximum consolidated leverage ratio is 6.00 :1.00.

Through December 31, 2023 or such earlier date as elected by the Company (the “Amendment Period”), the maximum consolidated secured leverage ratio is 5.00 :1.00.

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

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

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

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

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

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

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.

Excluding hedge impact, the weighted average interest rate on outstanding borrowings under the Credit Agreement at September 30, 2023 was 7.86 %.

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

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

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

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.

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 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.

As of September 30, 2023, there were $ 530,000 of loans under the Revolver, $ 286,875 of Term Loans, and $ 4,468 of letters of credit outstanding under the Credit Agreement.

As of September 30, 2023, $ 265,532 was available under the Credit Agreement, subject to compliance with the financial covenants.

As of September 30, 2023, the Company was in compliance with all associated covenants.

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.

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 the 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.

In connection with the Second Amendment to its Credit Agreement, the Company incurred debt issuance costs of approximately $ 3,854 , of which $ 3,813 was deferred.

Of the total deferred costs, $ 2,802 were associated with the Revolver and are being amortized on a straight-line basis within Other assets on the Consolidated Balance Sheets, and $ 1,011 are being recorded 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 utilizing the effective interest rate method.

Interest paid during the three months ended September 30, 2023 and September 30, 2022 was $ 11,432 and $ 6,688 , respectively.

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

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

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

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

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

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

income tax returns.

The effective income tax rate was a benefit of 35.3 % and an expense of 26.5 % for the three months ended September 30, 2023 and 2022, respectively.

The effective income tax rate for the three months ended September 30, 2023 increased due to tax expense related to stock-based compensation, global intangible low-taxed income (“GILTI”), and limitations on the deductibility of executive compensation.

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

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

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

2023 2022 2023 2022

Foreign currency translation adjustments:

Other comprehensive income (loss) income before reclassifications $ 15,250 $ ( 18,701 ) $ 7,774 $ ( 43,649 )

Deferred (losses) gains on cash flow hedging instruments:

Amount of (loss) gain recognized in AOCL on derivatives (1)

( 3,190 ) 2,007 7,718 3,544

Amount of gain reclassified from AOCL into income (1)

( 1,320 ) ( 553 ) ( 3,500 ) ( 1,517 )

Deferred (losses) gains on fair value hedging instruments:

Amount of (loss) gain recognized in AOCL on derivatives (1)

( 28 ) — 50 —

Amount of loss reclassified from AOCL into expense (1)

Deferred (losses) gains on net investment hedging instruments:

Amount of (loss) gain recognized in AOCL on derivatives (1)

Foreign Currency Translation Adjustment, Net Deferred Gains on Cash Flow Hedging Instruments, Net Deferred Gains on Fair Value Hedging Instruments, Net Deferred Gains on Net Investment Hedging Instruments, Net Total

Balance at June 30, 2022 $ ( 168,225 ) $ 519 $ 500 $ 2,724 $ ( 164,482 )

Other comprehensive (loss) income before reclassifications ( 67,149 ) 11,360 1,145 4,666 ( 49,978 )

Amounts reclassified into income — ( 767 ) ( 1,348 ) ( 369 ) ( 2,484 )

Net change in accumulated other comprehensive (loss) income for the three months ended September 30, 2022 (1)

( 67,149 ) 10,593 ( 203 ) 4,297 ( 52,462 )

Amount of gain reclassified from AOCL into income (1)

Balance at September 30, 2022 $ ( 235,374 ) $ 11,112 $ 297 $ 7,021 $ ( 216,944 )

Balance at June 30, 2023 $ ( 138,028 ) $ 10,898 $ 685 $ 229 $ ( 126,216 )

Other comprehensive (loss) income before reclassifications ( 32,933 ) 4,159 430 1,741 ( 26,603 )

Amounts reclassified into income — ( 1,715 ) ( 717 ) ( 372 ) ( 2,804 )

Net change in accumulated other comprehensive (loss) income for the three months ended September 30, 2023 (1)

( 32,933 ) 2,444 ( 287 ) 1,369 ( 29,407 )

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

(1) See Note 15, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains (losses) on cash flow hedging instruments recorded in the Consolidated Statements of Operations in the three and nine months ended March 31, 2023 and 2022.

Balance at September 30, 2023 $ ( 170,961 ) $ 13,342 $ 398 $ 1,598 $ ( 155,623 )

(1) See Note 14, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains on hedging instruments recorded in the Consolidated Statements of Operations during the three months ended September 30, 2023 and 2022.

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

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

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

2023 2022 2023 2022

Three Months Ended September 30,

Selling, general and administrative expense

4 unchanged sentences

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

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

A summary of the restricted st ock activity (including all RSAs, RSUs and PSUs) for the three months ended September 30, 2023 is as follows:

Number of Shares

and Units Weighted

Average Grant

4 unchanged sentences

Forfeited ( 23 ) $ 29.74

Non-vested RSAs, RSUs and PSUs outstanding at March 31, 2023 1,341 $ 26.68

The table above includes a total of 420 shares granted during the nine months ended March 31, 2023 that represent the target number of shares that may be earned based on pre-defined market conditions that are eligible to vest ranging from zero to 200 % of target.

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

Vested shares during the nine months ended March 31, 2023 include a total o f 5 shares related to certain performance-based metrics being met and a total of 168 shares related to service-based RSUs .

Non-vested RSAs, RSUs and PSUs outstanding at September 30, 2023 1,026 $ 26.17

Vested shares during the three months ended September 30, 2023 include a total of 15 shares related to certain performance-based metrics being met and a total of 224 shares related to service-based RSUs.

There were 86 shares surrendered for payment of employee payroll taxes due on shares issued under stock-based compensation plans at an average price of $ 10.17 per share.

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

At March 31, 2023, 321 of such shares were outstanding under the 2023 – 2025 LTIP while 68 shares were outstanding under the 2022 – 2024 LTIP.

At September 30, 2023, 311 of such shares were outstanding under the 2023 – 2025 LTIP while 61 shares were outstanding under the 2022 – 2024 LTIP.

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

Nine Months Ended March 31,

Three Months Ended September 30,

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

1 unchanged sentence

Tax benefit recognized from restricted shares vesting $ 281 $ 78

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

At September 30, 2023 , there was $ 13,677 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 1.66 years.

2023-2025 LTIP

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

Such PSU awards (the "Absolute TSR PSUs") will vest, if at all, pursuant to a defined calculation of either relative TSR or absolute TSR (as defined) over the period from September 6, 2022 through the earlier of (i) September 6, 2025;

At September 30, 2023, there are 311 such shares outstanding under the LTI Program.

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);

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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, except for shares gran ted after December 31, 2022:

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 for grants prior to January 1, 2023:

Absolute TSR PSUs Relative TSR PSUs

4 unchanged sentences

Expected term 3.00 years 3.00 years

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:

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 for grants on or subsequent to January 1, 2023:

Absolute TSR PSUs Relative TSR PSUs

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Expected term 3.00 years 3.00 years

As part of the succession plan, Mark L.

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

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

As of the Transition Date, certain of Mr.

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

Additionally, Mr.

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

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

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

2 unchanged sentences

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

At March 31, 2023 and June 30, 2022, the carrying value of the Company’s investment in Founders Table was $ 7,788 and $ 9,491 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

At September 30, 2023 and June 30, 2023, the carrying value of the Company’s investment in Founders Table was $ 7,654 and $ 8,032 , respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

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

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

FAIR VALUE MEASUREMENTS

The carrying value of its investment was $ 4,644 and $ 4,766 as of September 30, 2023 and June 30, 2023, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

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

4 unchanged sentences

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

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

The following table presents assets and liabilities measured at fair value on a recurring basis as of September 30, 2023:

Derivative financial instruments $ 20,236 $ — $ 20,236 $ —

2 unchanged sentences

Derivative financial instruments $ 16,988 $ — $ 16,988 $ —

Equity investment 560 560 — —

Total $ 8,036 $ 560 $ 7,476 $ —

Derivative financial instruments $ 3,160 $ — $ 3,160 $ —

Total $ 3,184 $ — $ 3,184 $ —

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

There were no transfers of financial instruments between the three levels of fair value hierarchy during the three months ended September 30, 2023 or 2022.

Derivative Instruments

8 unchanged sentences

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

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

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

Nonrecurring Fair Value Measurements

5 unchanged sentences

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.

Fair value measurements of the reporting units associated with the Company's goodwill balances and its indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative analysis is performed.

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

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

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

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

DERIVATIVES AND HEDGING ACTIVITIES

8 unchanged sentences

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.

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

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.

3 unchanged sentences

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

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

During the three months ended September 30, 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 the remaining three months of fiscal 2023, the Company estimates that an additional $ 1,873 will be reclassified as a decrease to interest expense.

As of March 31, 2023, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

During the remaining nine months of fiscal 2024, the Company estimates that an additional $ 6,967 will be reclassified as a decrease to interest expense.

As of September 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

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

Cross-currency swaps involve exchanging fixed-rate interest payments for fixed-rate interest receipts,

both of which will occur at the USD-EUR forward exchange rates in effect upon entering into the instr ument.

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.

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

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

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

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

During the remaining nine months of fiscal 2024, the Company estimates that no amount relating to the cross-currency swaps will be reclassified to interest expense.

As of September 30, 2023, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risk.

Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased

Foreign currency forward contract 4 £ 3,467 € 4,000

Net Investment Hedges

5 unchanged sentences

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

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

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

As of March 31, 2023, the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations:

For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in 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 September 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

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The earnings recognition of excluded components is presented in the same income statement line item as the earnings effect of the hedged transaction.

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

As of March 31, 2023, the Company had the following outstanding foreign currency derivatives that were used to hedge changes in fair value attributable to foreign exchange risk:

During the remaining nine months of fiscal 2024, the Company estimates that an additional $ 359 relating to cross currency swaps will be reclassified as a decrease to interest expense.

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

Carrying Amount of the Hedged Asset

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

As of September 30, 2023 and 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

September 30,

2023 June 30,

2022 March 31,

2023 September 30,

2023 June 30,

1 unchanged sentence

Designated Hedges

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of March 31, 2023:

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of September 30, 2023:

Asset Derivatives Liability Derivatives

5 unchanged sentences

Cross-currency swaps Other noncurrent assets — Other noncurrent liabilities 901

Foreign currency forward contracts Prepaid expenses and other current assets 41 Other noncurrent liabilities —

Total derivatives designated as hedging instruments $ 20,236 $ 901

8 unchanged sentences

Total derivatives designated as hedging instruments $ 16,988 $ 3,160

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

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

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

The following table presents the pre-tax effect of cash flow hedge accounting on AOCL for the three months ended September 30, 2023 and 2022:

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

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

2023 2022 2023 2022

Interest rate swaps $ 5,478 $ 15,262 Interest and other financing expense, net $ 2,281 $ 1,146

Cross-currency swaps — 503 Interest and other financing expense, net / Other expense (income), net ( 46 ) 683

Cross-currency swaps — — Interest and other financing expense, net / Other (income) expense, net — ( 115 )

Foreign currency forward contracts 41 — Cost of sales — —

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

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

Nine Months Ended March 31,

$ 5,519 $ 15,262 $ 2,281 $ 1,031

Interest rate swaps $ 10,295 $ 2,678 Interest and other financing expense, net $ 4,927 $ ( 273 )

Cross-currency swaps — 1,872 Interest and other financing expense, net / Other expense (income), net ( 276 ) 2,085

Foreign currency forward contracts 80 ( 64 ) Cost of sales — 107

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

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

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

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

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

The following table presents the pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations for the three months ended of September 30, 2023 and 2022:

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

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

Cost of sales Interest and other financing expense, net Cost of sales Interest and other financing expense, net

The effects of cash flow hedging:

1 unchanged sentence

Interest rate swaps

Amount of gain (loss) reclassified from AOCL into income $ — $ 1,792 $ — $ — $ ( 64 ) $ —

Cross-currency swaps

Amount of (loss) gain reclassified from AOCL into income $ — $ ( 46 ) $ — $ — $ 46 $ 637

Foreign currency forward contracts

Amount of gain reclassified from AOCL into income $ — $ 2,281 $ — $ 1,146

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

Nine Months Ended March 31, 2023

Nine Months Ended March 31, 2022

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

The effects of cash flow hedging:

Gain (loss) on cash flow hedging relationships

Interest rate swaps

Amount of gain (loss) reclassified from AOCL into income $ — $ 4,088 $ — $ — $ ( 273 ) $ —

Cross-currency swaps

Amount of (loss) gain reclassified from AOCL into income $ — $ ( 276 ) $ — $ — $ 131 $ 1,954

Foreign currency forward contracts

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

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

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

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

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

The following table presents the pre-tax effect of fair value hedge accounting on AOCL for the three months ended September 30, 2023 and 2022:

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

Amount of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)

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

2023 2022 2023 2022

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

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

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

Nine Months Ended March 31,

Cross-currency swaps $ 572 $ 1,539 Interest and other financing expense, net $ 123 $ 123

$ 572 $ 1,539 $ 123 $ 123

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

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

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

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

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

The effects of fair value hedging:

Gain (loss) on fair value hedging relationships

Cross-currency swaps

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

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

Nine Months Ended March 31, 2023

Nine Months Ended March 31, 2022

The following table presents the pre-tax effect of the Company’s derivative financial instruments electing fair value hedge accounting on the Consolidated Statements of Operations as of September 30, 2023 and 2022:

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

Three Months Ended September 30, 2023 Three Months Ended September 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 (loss) on fair value hedging relationships

Gain on fair value hedging relationships

Cross-currency swaps

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

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

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

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

2023 2022 2023 2022

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

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

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

Nine Months Ended

March 31, Nine Months Ended

Amount of gain reclassified from AOCL into income $ — $ 953 $ — $ — $ 123 $ 1,688

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the three months ended September 30, 2023 and 2022:

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

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

2023 2022 2023 2022

2 unchanged sentences

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.

TRANSFORMATION PROGRAM

During the first quarter of fiscal year 2024, we initiated a multi-year growth and transformation program (the “Hain Reimagined Program”).

The program is intended to optimize the Company’s portfolio, improve underlying profitability and increase its flexibility to invest in targeted growth initiatives, brand building and other capabilities critical to delivering future growth.

The savings initiatives are expected to impact the Company’s reportable segments and Corporate and Other.

Implementation of the Hain Reimagined Program is expected to be completed by the end of the 2027 fiscal year and comprised of:

contract termination costs, asset write-downs, employee-related costs and other transformation-related expenses.

For the three months ended September 30, 2023, expenses associated with the Company’s restructuring program in the amount of $ 6,403 and $ 3,320 , respectively, were recorded in Productivity and transformation costs and Cost of sales on the Consolidated Statements of Operations and impacted reportable segments and Corporate and Other as follows:

Three Months Ended September 30, 2023

Corporate and Other $ 5,770

North America 3,358

International 595

The Company expects to pay the remaining accrued restructuring costs during the next 12 months.

The following table displays the activities and liability balances relating to the restructuring program for the period ended as of September 30, 2023:

Charges Amounts Paid Non-cash settlements/Adjustments 2

Balance at September 30, 2023

Employee-related costs 1

$ 1,115 $ ( 46 ) — $ 1,069

Contract termination costs 1,799 ( 1,528 ) — 271

Asset write-downs 2

1,521 — ( 1,521 ) —

Other transformation-related expenses 3

5,288 ( 16 ) — 5,272

$ 9,723 $ ( 1,590 ) $ ( 1,521 ) $ 6,612

1 Employee-related expenses include $ 491 severance related to executive officer succession.

2 Represents non-cash asset write-downs, including accelerated depreciation and asset impairment.

3 Other transformation-related expenses primarily include consultancy charges.

The liability balance as of September 30, 2023 is included within Accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheets.

COMMITMENTS AND CONTINGENCIES

11 unchanged sentences

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

Securities Litigation (the

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

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

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

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.

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.

13 unchanged sentences

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.

On September 29, 2023, the District Court granted Defendants’ Motion to Dismiss the Second Amended Complaint.

Plaintiffs filed notice of appeal on October 26, 2023.

Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court

19 unchanged sentences

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.

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.

8 unchanged sentences

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

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

On November 3, 2023, the Parties filed a joint request to continue the temporary stay of the Derivative Action pending resolution of the Securities Class Action appeal and await a response from the Court.

Baby Food Litigation

6 unchanged sentences

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

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

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.

8 unchanged sentences

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.

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 et al.

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

District Court, Southern District of Texas.

• 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.

2 unchanged sentences

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

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

• In the matter, NC v.

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

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

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.

Plaintiffs filed their appellate brief on July 12, 2023.

The Company filed its appellate brief on September 26, 2023.

It is expected that the matter will be fully briefed this fall.

No argument date has been set.

The Hain Celestial Group, et al., pending in the Superior Court for the State of California, County of Los Angeles, as a result of successful defense pretrial motions, including the Company's motion for summary judgment, the Company expects that the case will be dismissed and judgment will soon be entered in the Company's favor.

• In Watkins v.

Plum, PBC, et al., currently pending in the United States District Court for the Eastern District of Louisiana, the Court has set the case for trial beginning on August 12, 2024.

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

The parties are currently engaging in discovery.

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

6 unchanged sentences

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

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

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

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

Plaintiff filed an Amended Complaint on June 16, 2023.

Defendants filed a Demurrer to the Amended Complaint on July 17, 2023, which was denied on October 5, 2023.

The parties have begun to engage in discovery.

• 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.

On October 24, 2023, the Court granted Plaintiffs’ Motion and Hain was added as a defendant to the case.

In September 2023, the two Nevada state court cases previously pending in Clark County District Court, Benitez v.

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

and Buenaventura v.

Beech-Nut Nutrition Company, Inc., were both voluntarily dismissed.

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.

Such lawsuits may be resolved in a manner adverse to us, and we may incur substantial costs or damages not covered by insurance, which could have a material adverse effect on our financial condition and business.

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.

3 unchanged sentences

SEGMENT INFORMATION

Our organization structure consists of two geographic-based reportable segments:

North America and International.

Our North America reportable segment consists of the United States and Canada as operating segments.

Our International reportable segment is comprised of three operating segments:

United Kingdom, Ella’s Kitchen UK, and Europe.

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

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

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

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

The Company’s organizational structure consists of two geographic based reportable segments:

North America and International, which are also the operating segments.

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 uses segment net sales and segment Adjusted EBITDA in order to analyze segment results and trends.

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, plant closure related costs-net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, costs associated with acquisitions, divestitures and other transactions, loss (gain) on sale of assets, 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 the 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.

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

2023 2022 2023 2022

Three Months Ended September 30,

North America $ 260,054 $ 288,396

1 unchanged sentence

$ 425,029 $ 439,351

Operating (Loss) Income:

North America (a)

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

Adjusted EBITDA:

North America $ 18,727 $ 30,781

International 17,438 14,947

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

Corporate and Other (b)

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

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

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

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

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

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

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

Total Reportable Segments Adjusted EBITDA 36,165 45,728

Corporate and Other ( 12,075 ) ( 9,699 )

24,090 36,029

United States $ 259,468 $ 295,152 $ 774,032 $ 772,548

United Kingdom 122,069 124,029 354,808 387,129

All Other 73,706 83,758 219,962 275,106

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

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

2023 June 30,

Impairment charges

Long-lived asset impairment ( 694 ) —

Acquisitions, divestitures and other

Transaction and integration costs, net ( 118 ) ( 1,367 )

(Loss) gain on sale of assets ( 62 ) 40

Restructuring activities

Plant closure related costs, net ( 1,841 ) 2

Productivity and transformation costs ( 6,403 ) ( 773 )

Litigation and related costs ( 1,524 ) ( 2,463 )

Depreciation and amortization ( 12,305 ) ( 11,970 )

Equity in net loss of equity-method investees ( 498 ) ( 382 )

Interest expense, net ( 12,623 ) ( 7,279 )

Benefit (provision) for income taxes 5,379 ( 2,631 )

Stock-based compensation, net ( 3,742 ) ( 3,994 )

Unrealized currency (losses) gains ( 35 ) 1,711

Net (loss) income $ ( 10,376 ) $ 6,923

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

Three Months Ended September 30,

United States $ 230,659 $ 259,508

United Kingdom 121,051 109,160

Europe 43,924 41,795

All Other 29,395 28,888

Total $ 394,739 $ 412,096

$ 425,029 $ 439,351

There has been no material change to Company’s total assets by segment from the amount disclosed in the Form 10-K for the fiscal year ended June 30, 2023.

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

What changed 10-Q

Item 1. Financial Statements