HAIN CELESTIAL GROUP INC 10-Q

ITEM 1. FINANCIAL STATEMENTS THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) MARCH 31, 2024 AND JUNE 30, 2023 (In thousands, except par values) March 31, June 30, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 49,549 $ 53,364 Accounts receivable, less allowance for doubtful accounts of $ 1,786 and $ 2,750 , respectively 191,192 160,948 Inventories 281,399 310,341 Prepaid expenses and other current assets 49,813 66,378 Total current assets 571,953 591,031 Property, plant and equipment, net 264,470 296,325 Goodwill 936,135 938,640 Trademarks and other intangible assets, net 250,265 298,105 Investments and joint ventures 10,456 12,798 Operating lease right-of-use assets, net 87,599 95,894 Other assets 28,356 25,846 Total assets $ 2,149,234 $ 2,258,639 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 179,068 $ 134,780 Accrued expenses and other current liabilities 85,736 88,520 Current portion of long-term debt 7,569 7,567 Total current liabilities 272,373 230,867 Long-term debt, less current portion 769,948 821,181 Deferred income taxes 52,310 72,086 Operating lease liabilities, noncurrent portion 82,435 90,014 Other noncurrent liabilities 27,681 26,584 Total liabilities 1,204,747 1,240,732 Commitments and contingencies (Note 17) Stockholders’ equity: Preferred stock - $ .01 par value, authorized 5,000 shares; issued and outstanding: none — — Common stock - $ .01 par value, authorized 150,000 shares; issued: 111,850 and 111,339 shares, respectively; outstanding: 89,834 and 89,475 shares, respectively 1,119 1,113 Additional paid-in capital 1,227,684 1,217,549 Retained earnings 580,456 652,561 Accumulated other comprehensive loss ( 136,072 ) ( 126,216 ) 1,673,187 1,745,007 Less: Treasury stock, at cost, 22,016 and 21,864 shares, respectively ( 728,700 ) ( 727,100 ) Total stockholders’ equity 944,487 1,017,907 Total liabilities and stockholders’ equity $ 2,149,234 $ 2,258,639 See notes to consolidated financial statements. 3 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2024 AND 2023 (In thousands, except per share amounts) Three Months Ended March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Net sales $ 438,358 $ 455,243 $ 1,317,487 $ 1,348,802 Cost of sales 341,687 357,764 1,034,658 1,053,131 Gross profit 96,671 97,479 282,829 295,671 Selling, general and administrative expenses 66,716 75,047 217,837 222,355 Intangibles and long-lived asset impairment 49,426 156,583 70,786 156,923 Productivity and transformation costs 7,175 3,933 20,447 5,692 Amortization of acquired intangible assets 1,255 2,842 4,719 8,415 Operating loss ( 27,901 ) ( 140,926 ) ( 30,960 ) ( 97,714 ) Interest and other financing expense, net 14,127 13,421 43,509 31,910 Other expense (income), net 100 439 ( 207 ) ( 2,413 ) Loss before income taxes and equity in net loss of equity-method investees ( 42,128 ) ( 154,786 ) ( 74,262 ) ( 127,211 ) Provision (benefit) for income taxes 5,100 ( 39,587 ) ( 4,528 ) ( 30,599 ) Equity in net loss of equity-method investees 966 528 2,371 1,226 Net loss $ ( 48,194 ) $ ( 115,727 ) $ ( 72,105 ) $ ( 97,838 ) Net loss per common share: Basic $ ( 0.54 ) $ ( 1.29 ) $ ( 0.80 ) $ ( 1.09 ) Diluted $ ( 0.54 ) $ ( 1.29 ) $ ( 0.80 ) $ ( 1.09 ) Shares used in the calculation of net loss per common share: Basic 89,832 89,421 89,718 89,369 Diluted 89,832 89,421 89,718 89,369 See notes to consolidated financial statements. 4 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2024 AND 2023 (In thousands) Three Months Ended March 31, 2024 March 31, 2023 Pretax amount Tax (expense) benefit After tax amount Pretax amount Tax (expense) benefit After tax amount Net loss $ ( 48,194 ) $ ( 115,727 ) Other comprehensive (loss) income: Foreign currency translation adjustments before reclassifications $ ( 11,004 ) $ — $ ( 11,004 ) $ 15,250 $ — $ 15,250 Change in deferred gains (losses) on cash flow hedging instruments 4,920 ( 1,216 ) 3,704 ( 6,031 ) 1,521 ( 4,510 ) Change in deferred (losses) gains on fair value hedging instruments ( 168 ) 41 ( 127 ) 172 ( 43 ) 129 Change in deferred gains (losses) on net investment hedging instruments 1,833 ( 453 ) 1,380 ( 628 ) 160 ( 468 ) Total other comprehensive (loss) income $ ( 4,419 ) $ ( 1,628 ) $ ( 6,047 ) $ 8,763 $ 1,638 $ 10,401 Total comprehensive loss $ ( 54,241 ) $ ( 105,326 ) Nine Months Ended March 31, 2024 March 31, 2023 Pretax amount Tax benefit After tax amount Pretax amount Tax (expense) benefit After tax amount Net loss $ ( 72,105 ) $ ( 97,838 ) Other comprehensive (loss) income: Foreign currency translation adjustments before reclassifications $ ( 7,400 ) $ — $ ( 7,400 ) $ 7,774 $ — $ 7,774 Change in deferred (losses) gains on cash flow hedging instruments ( 1,949 ) 489 ( 1,460 ) 5,724 ( 1,506 ) 4,218 Change in deferred (losses) gains on fair value hedging instruments ( 503 ) 125 ( 378 ) 591 ( 145 ) 446 Change in deferred losses on net investment hedging instruments ( 820 ) 202 ( 618 ) ( 1,139 ) 238 ( 901 ) Total other comprehensive (loss) income $ ( 10,672 ) $ 816 $ ( 9,856 ) $ 12,950 $ ( 1,413 ) $ 11,537 Total comprehensive loss $ ( 81,961 ) $ ( 86,301 ) See notes to consolidated financial statements. 5 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2024 (In thousands, except par values) Common Stock Additional Accumulated Other Amount Paid-in Retained Treasury Stock Comprehensive Shares at $ .01 Capital Earnings Shares Amount Loss Total Balance at June 30, 2023 111,339 $ 1,113 $ 1,217,549 $ 652,561 21,864 $ ( 727,100 ) $ ( 126,216 ) $ 1,017,907 Net loss ( 10,376 ) ( 10,376 ) Other comprehensive loss ( 29,407 ) ( 29,407 ) Issuance of common stock pursuant to stock-based compensation plans 239 3 3 Employee shares withheld for taxes 86 ( 875 ) ( 875 ) Stock-based compensation expense 3,742 3,742 Balance at September 30, 2023 111,578 $ 1,116 $ 1,221,291 $ 642,185 21,950 $ ( 727,975 ) $ ( 155,623 ) $ 980,994 Net loss ( 13,535 ) ( 13,535 ) Other comprehensive income 25,598 25,598 Issuance of common stock pursuant to stock-based compensation plans 240 2 2 Employee shares withheld for taxes 56 ( 614 ) ( 614 ) Stock-based compensation expense 3,376 3,376 Balance at December 31, 2023 111,818 $ 1,118 $ 1,224,667 $ 628,650 22,006 $ ( 728,589 ) $ ( 130,025 ) $ 995,821 Net loss ( 48,194 ) ( 48,194 ) Other comprehensive loss ( 6,047 ) ( 6,047 ) Issuance of common stock pursuant to stock-based compensation plans 32 1 1 Employee shares withheld for taxes 10 ( 111 ) ( 111 ) Stock-based compensation expense 3,017 3,017 Balance at March 31, 2024 111,850 $ 1,119 $ 1,227,684 $ 580,456 22,016 $ ( 728,700 ) $ ( 136,072 ) $ 944,487 See notes to consolidated financial statements. 6 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2023 (In thousands, except par values) Common Stock Additional Accumulated Other Amount Paid-in Retained Treasury Stock Comprehensive Shares at $ .01 Capital Earnings Shares Amount Loss Total Balance at June 30, 2022 111,090 $ 1,111 $ 1,203,126 $ 769,098 21,788 $ ( 725,685 ) $ ( 164,482 ) $ 1,083,168 Net income 6,923 6,923 Other comprehensive loss ( 52,462 ) ( 52,462 ) Issuance of common stock pursuant to stock-based compensation plans 24 1 1 Employee shares withheld for taxes 10 ( 229 ) ( 229 ) 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 10,966 10,966 Other comprehensive income 53,598 53,598 Issuance of common stock pursuant to stock-based compensation plans 142 1 1 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 7 — 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. 7 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 2024 AND 2023 (In thousands) Nine Months Ended March 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 72,105 ) $ ( 97,838 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 34,360 37,909 Deferred income taxes ( 18,764 ) ( 44,809 ) Equity in net loss of equity-method investees 2,371 1,226 Stock-based compensation, net 10,135 10,657 Intangibles and long-lived asset impairment 70,786 156,923 Loss (gain) on sale of assets 62 ( 3,529 ) Other non-cash items, net 944 ( 1,526 ) (Decrease) increase in cash attributable to changes in operating assets and liabilities: Accounts receivable ( 30,672 ) ( 7,926 ) Inventories 27,432 ( 8,534 ) Other current assets 13,830 455 Other assets and liabilities ( 4,466 ) 3,496 Accounts payable and accrued expenses 43,046 ( 20,195 ) Net cash provided by operating activities 76,959 26,309 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment ( 24,769 ) ( 21,434 ) Investments and joint ventures, net — 433 Proceeds from sale of assets 1,520 7,758 Net cash used in investing activities ( 23,249 ) ( 13,243 ) CASH FLOWS FROM FINANCING ACTIVITIES Borrowings under bank revolving credit facility 152,000 275,000 Repayments under bank revolving credit facility ( 197,000 ) ( 301,000 ) Repayments under term loan ( 5,625 ) ( 5,625 ) Payments of other debt, net ( 3,875 ) ( 2,116 ) Employee shares withheld for taxes ( 1,600 ) ( 1,051 ) Net cash used in financing activities ( 56,100 ) ( 34,792 ) Effect of exchange rate changes on cash ( 1,425 ) ( 104 ) Net decrease in cash and cash equivalents ( 3,815 ) ( 21,830 ) Cash and cash equivalents at beginning of period 53,364 65,512 Cash and cash equivalents at end of period $ 49,549 $ 43,682 See notes to consolidated financial statements. 8 Table of Contents THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Amounts in thousands, except par values and per share data) 1. BUSINESS The Hain Celestial Group, Inc., a Delaware corporation (collectively with its subsidiaries, the “Company,” “Hain Celestial,” “we,” “us” or “our”), was founded in 1993 and is headquartered in Hoboken, New Jersey. The Company’s mission has continued to evolve since its founding, with health and wellness being the core tenet. The Company continues to be a leading marketer, manufacturer, and seller of organic and natural, “better-for-you” products by anticipating and exceeding consumer expectations in providing quality, innovation, value and convenience. The Company is committed to growing sustainably while continuing to implement environmentally sound business practices and manufacturing processes. Hain Celestial sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, drug, and convenience stores worldwide. The Company operates under two reportable segments: North America and International. 2. BASIS OF PRESENTATION The Company’s unaudited consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. 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 losses or earnings 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. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP and should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 (the “Form 10-K”). The amounts as of and for the periods ended June 30, 2023 are derived from the Company’s audited annual financial statements. The unaudited consolidated financial statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair presentation for interim periods. Operating results for the three and nine months ended March 31, 2024 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 thousands, except par values and per share amounts, unless otherwise indicated. Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies and Practices , in the Notes to the Consolidated Financial Statements in the Form 10-K. Included herein are certain updates to those policies. Transfer of Financial Assets The Company accounts for transfers of financial assets, such as non-recourse accounts receivable financing arrangements, when the Company has surrendered control over the related assets. Determining whether control has transferred requires an evaluation of relevant legal considerations, an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred and any other relevant considerations. The Company has non-recourse financing arrangements in which eligible receivables are sold to third-party buyers in exchange for cash. The Company transferred accounts receivable in their entirety to the buyers and satisfied all of the conditions to report the transfer of financial assets in their entirety as a sale. The principal amount of receivables sold under these arrangements was $ 223,600 and $ 290,856 during the nine months ended March 31, 2024 and 2023 , 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 provided by operating activities on the Consolidated Statements of Cash Flows. 9 Table of Contents Recently Issued and 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 (“ASC”) 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 consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures ”, which will require entities to disclose more detailed information in the reconciliation of their statutory tax rate to their effective tax rate. The ASU also requires entities to disclose more detailed information about income taxes paid, including by jurisdiction, pretax income (loss) from continuing operations, and income tax expense (benefit). The amendments are effective for fiscal years beginning after December 15, 2024 and for interim periods within fiscal years beginning after December 15, 2025. The amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures ”, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements. 3. LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share on the Consolidated Statements of Operations: Three Months Ended March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Numerator: Net loss $ ( 48,194 ) $ ( 115,727 ) $ ( 72,105 ) $ ( 97,838 ) Denominator: Basic and diluted weighted average shares outstanding 89,832 89,421 89,718 89,369 Basic and diluted net loss per common share $ ( 0.54 ) $ ( 1.29 ) $ ( 0.80 ) $ ( 1.09 ) Due to the incurred net loss in the three and nine months ended March 31, 2024, 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. There were 329 restricted stock awards excluded from the calculation of diluted net loss per share for the three months ended March 31, 2023, as such awards were anti-dilutive. There were 524 stock-based awards comprised of restricted stock awards and stock options excluded from the calculation of diluted net loss per share for the nine months ended March 31, 2023, as such awards were anti-dilutive. Additi onall y, 885 and 399 stock-based awards outstanding at March 31, 2024 and 2023, respectively, were excluded from the calculation of diluted net loss per share for the three months ended March 31, 2024 and 2023, 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, 639 and 366 sto ck-based awards outstanding at March 31, 2024 and 2023, respectively, were excluded from the calculation of diluted net loss per share for the nine months ended March 31, 2024 and 2023, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods. 10 Table of Contents 4. DISPOSITION 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 in 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 . 5. INVENTORIES Inventories consisted of the following: March 31, 2024 June 30, 2023 Finished goods $ 186,821 $ 192,007 Raw materials, work-in-progress and packaging 94,578 118,334 $ 281,399 $ 310,341 11 Table of Contents 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: March 31, 2024 June 30, 2023 Land $ 11,395 $ 11,453 Buildings and improvements 56,892 55,354 Machinery and equipment 320,953 335,912 Computer hardware and software 53,339 54,192 Furniture and fixtures 20,754 20,722 Leasehold improvements 39,093 49,394 Construction in progress 15,599 10,816 518,025 537,843 Less: Accumulated depreciation 253,555 241,518 $ 264,470 $ 296,325 Depreciation expense for the three months ended March 31, 2024 and 2023 was $ 8,232 and $ 9,649 , respectively. Depreciation expense for the nine months ended March 31, 2024 and 2023 was $ 26,410 and $ 25,911 , respectively. As a result of the same factors triggering the interim impairment tests for the ParmCrisps ® intangible assets, as discussed in Note 8, Goodwill and Other Intangible Assets , during the three months ended March 31, 2024, the Company completed interim impairment tests of the ParmCrisps ® asset group. The Company determined that the carrying amount of the ParmCrisps ® asset group exceeded its estimated fair value. During the three and nine months ended March 31, 2024, the Company recognized a non-cash impairment charge of $ 5,875 to reduce the carrying amount of ParmCrisps ® machinery and equipment, to its estimated fair value. The fair value of machinery and equipment was determined based on an orderly liquidation value. Impairment charges were recorded within intangibles and long-lived asset impairment on the Consolidated Statements of Operations. During the nine months ended March 31, 2024, the Company recognized a non-cash impairment charge of $ 20,666 related to an asset group primarily comprised of certain production assets in the North America reportable segment to reduce the carrying amount of such long-lived assets to their estimated fair value. Impairment charges were recorded within intangibles and long-lived asset impairment on the Consolidated Statement of Operations. 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 was held for sale. During the nine months ended March 31, 2024, the Company completed the sale of such facility for total cash proceeds of $ 1,182 , net of brokerage and other fees, resulting in a loss in the amount of $ 68 , which was included as a component of other income, net on the Consolidated Statement of Operations. 12 Table of Contents 7. LEASES The Company leases office space, warehouse and distribution facilities, manufacturing equipment and vehicles primarily in North America and Western Europe. The Company determines if an arrangement is or contains a lease at inception. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company’s lease agreements generally do not contain residual value guarantees or material restrictive covenants. Some of the Company’s leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index changes are recorded as variable lease expense in the period incurred. The Company does not have any related party leases, and sublease transactions are de minimis. The components of lease expenses for the three and nine months ended March 31, 2024 and 2023 were as follows: Three Months Ended Nine Months Ended March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 Operating lease expenses $ 4,106 $ 6,657 $ 13,480 $ 13,869 Finance lease expenses 37 48 111 188 Variable lease expenses 182 207 554 556 Short-term lease expenses 287 726 1,100 1,612 Total lease expenses $ 4,612 $ 7,638 $ 15,245 $ 16,225 Supplemental balance sheet information related to leases was as follows: Leases Classification March 31, 2024 June 30, 2023 Assets Operating lease ROU assets, net Operating lease right-of-use assets, net $ 87,599 $ 95,894 Finance lease ROU assets, net Property, plant and equipment, net 227 289 Total leased assets $ 87,826 $ 96,183 Liabilities Current Operating Accrued expenses and other current liabilities $ 10,027 $ 10,489 Finance Current portion of long-term debt 85 83 Non-current Operating Operating lease liabilities, noncurrent portion 82,435 90,014 Finance Long-term debt, less current portion 158 222 Total lease liabilities $ 92,705 $ 100,808 13 Table of Contents Additional information related to leases is as follows: Nine Months Ended March 31, 2024 March 31, 2023 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,632 $ 12,299 Operating cash flows from finance leases $ 9 $ 12 Financing cash flows from finance leases $ 60 $ 137 ROU assets obtained in exchange for lease obligations: Operating leases (1)(2) $ 2,488 $ ( 2,740 ) Finance leases $ 35 $ 60 Weighted average remaining lease term: Operating leases 9.1 years 10.5 years Finance leases 3.2 years 4.1 years Weighted average discount rate: Operating leases 4.9 % 4.7 % Finance leases 4.5 % 4.5 % (1) Includes adjustment for remeasurement of an operating lease during the nine months ended March 31, 2024, which resulted in a net reduction of an ROU asset and a corresponding reduction in lease liability of $ 9,375 . (2) Includes adjustment for modification of an operating lease during the nine months ended March 31, 2023, which resulted in a reduction of an ROU asset and lease liability 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, 2024 were as follows: Fiscal Year Operating leases Finance leases Total 2024 (remainder of year) $ 3,051 $ 24 $ 3,075 2025 14,436 93 14,529 2026 13,800 68 13,868 2027 13,469 53 13,522 2028 13,228 25 13,253 Thereafter 57,785 — 57,785 Total lease payments 115,769 263 116,032 Less: Imputed interest 23,307 20 23,327 Total lease liabilities $ 92,462 $ 243 $ 92,705 14 Table of Contents 8. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table provides changes in the carrying amount of goodwill by reportable segment: North America International Total Balance as of June 30, 2023 $ 697,053 $ 241,587 $ 938,640 Translation ( 896 ) ( 1,609 ) ( 2,505 ) Balance as of March 31, 2024 $ 696,157 $ 239,978 $ 936,135 As a result of the significant decline in the Company’s market capitalization and the same factors triggering the interim impairment tests for the ParmCrisps ® and Thinsters ® trademarks, certain North America personal care tradenames, and other intangible assets discussed below, the Company completed an interim impairment test of all reporting units. For United Kingdom, Western Europe, Canada, and Ella's Kitchen UK, the Company performed a qualitative evaluation to assess factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The Company concluded that the qualitatively tested reporting units estimated fair values exceeded their carrying amounts. Three of these reporting units (United Kingdom, Western Europe and Canada) were quantitatively tested in fiscal 2023 and as of the last quantitative testing date, their estimated fair values exceeded their respective carrying amounts by more than 17.7 %. During the three months ended March 31, 2024, the Company completed an interim quantitative impairment test of goodwill in the United States (“U.S.”) reporting unit and concluded that the reporting unit’s estimated fair value exceeded its carrying amount. The fair value of the reporting unit was estimated utilizing a blended approach which included an income approach utilizing the Discounted Cash Flows (“DCF”) Method and the Guideline Public Company Methodology (“GPCM”), a market-based approach. At March 31, 2024, the goodwill related to the U.S. reporting unit is at risk of potential impairment if the fair value of this reporting unit, and its associated assets, decrease in value due to the amount and timing of expected future cash flows, decreased customer demand for products, an inability to execute management’s business strategies, or general market conditions, such as economic downturns, and changes in interest rates, including discount rates. Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company’s estimates. If the Company’s ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record impairment charges in future periods. As of March 31, 2024 the U.S. reporting unit had $ 647,321 of goodwill and the reporting unit’s estimated fair value exceeded its carrying amount by 5.2 %. Other Intangible Assets The following table includes the gross carrying amount and accumulated amortization, where applicable, for intangible assets, excluding goodwill: March 31, 2024 June 30, 2023 Non-amortized intangible assets: Trademarks and tradenames (1) $ 224,788 $ 250,860 Amortized intangible assets: Other intangibles 144,294 161,874 Less: Accumulated amortization ( 118,817 ) ( 114,629 ) Net amortized intangible assets 25,477 47,245 Net other intangible assets $ 250,265 $ 298,105 (1) The gross carrying amount of trademarks and tradenames is reflected net of $ 249,291 and $ 223,981 of accumulated impairment charges as of March 31, 2024 and June 30, 2023, respectively . During the three months ended March 31, 2024, the Company recorded a non-cash impairment charge of $ 10,797 related to Thinsters ® indefinite and definite lived intangible assets in connection with the probable sale of its Thinsters ® cookie business (see Note 20, Subsequent Event) . The Company concluded that as of March 31, 2024, there was a high probability that the sale of the Thinsters ® business would occur and therefore, a quantitative impairment test was performed. To determine the amount of the impairment, the Company compared the carrying amount of the Thinsters ® assets to its estimated fair value (which was the expected selling price less transaction costs). Further, the Company determined that not all criteria were met to be able to classify the Thinsters ® business as held for sale as of March 31, 2024, since the Company did not receive approval from its Board of Directors to sell the Thinsters ® business 15 Table of Contents until after March 31, 2024. The assets are part of the North America reportable segment and have a remaining aggregate carrying amount of $ 2,023 as of March 31, 2024. During the three months ended March 31, 2024, as a result of further expected decline in the actual and projected performance and cash flows of certain North America personal care brands (namely, Alba Botanica ® , Avalon Organics ® , and JASON ® ) and the ParmCrisps ® brand, the Company determined that interim impairment tests of the associated indefinite-lived trademarks were required to be performed. During the three months ended March 31, 2024, the Company recorded non-cash impairment charges of $ 12,815 and $ 8,000 for the personal care tradenames and the ParmCrisps ® trademark, respectively, to reduce the carrying amounts of such intangible assets to their estimated fair values of $ 13,000 and nil , respectively. 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. As a result of the same factors triggering the interim impairment tests for the ParmCrisps ® trademark discussed above, during the three months ended March 31, 2024, the Company completed its interim impairment tests of the ParmCrisps ® asset group, which was primarily comprised of amortizable customer relationships, machinery and equipment and operating lease right-of-use assets. The Company determined that the carrying amount of the ParmCrisps ® asset group exceeded the estimated fair value. During the three months ended March 31, 2024, the Company recorded non-cash impairment charges of $ 10,586 to reduce the carrying amount of the ParmCrisps ® customer relationships, to their estimated fair value which was determined using a discounted cash flow analysis. Impairment charges were recorded within intangibles and long-lived asset impairment on the Consolidated Statements of Operations. The customer relationship intangible asset was part of the North America reportable segment and was fully impaired as of March 31, 2024. 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 amount of such intangible assets to their estimated fair value. The fair values were 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 fully impaired as of March 31, 2024. As a result of the same factors triggering the interim impairment tests for the ParmCrisps ® and Thinsters ® trademarks, 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 amount of the ParmCrisps ® customer relationships, the primary asset in the asset group, to their estimated fair value. Impairment charges were recorded within intangibles and long-lived asset impairment on the Consolidated Statements of Operations. The fair value of the Thinsters ® asset group exceeded its carrying amount. The assets had a remaining aggregate carrying amount of $ 19,889 as of June 30, 2023. Amortized intangible assets, which are deemed to have a finite life, primarily consist of customer relationships, trademarks and tradenames and are amortized over their estimated useful lives of 7 to 25 years. Amortization expense included in the Consolidated Statements of Operations was as follows: Three Months Ended March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Amortization of acquired intangibles $ 1,255 $ 2,842 $ 4,719 $ 8,415 The weighted average remaining amortization period of amortized intangible assets is 7.7 years. 16 Table of Contents 9. DEBT AND BORROWINGS Debt and borrowings consisted of the following: March 31, 2024 June 30, 2023 Revolving credit facility $ 496,000 $ 541,000 Term loans 283,125 288,750 Less: Unamortized issuance costs ( 1,851 ) ( 1,307 ) Other borrowings (1) 243 305 777,517 828,748 Short-term borrowings and current portion of long-term debt (2) 7,569 7,567 Long-term debt, less current portion $ 769,948 $ 821,181 (1) Includes $ 243 (June 30, 2023: $ 305 ) of finance lease obligations as discussed in Note 7, Leases. (2) Includes $ 85 (June 30, 2023: $ 83 ) of short-term finance lease obligations as discussed in Note 7, Leases. 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 Company’s obligations under the Credit Agreement are guaranteed by certain existing and future domestic subsidiaries of the Company and are secured by liens on assets of the Company and its material domestic subsidiaries, including the equity interest in each of their direct subsidiaries and intellectual property, subject to agreed-upon exceptions. The Credit Agreement includes financial covenants that require compliance with a consolidated secured leverage ratio, a consolidated leverage ratio and a consolidated interest coverage 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 Credit Agreement, the Company ’ s maximum consolidated leverage ratio is 6.00 :1.00. Pursuant to the Second Amendment, the Company’s minimum interest coverage ratio was amended to be 2.50 :1.00. During the Second Amendment Period, loans under the Credit Agreement will bear interest at (a) Term SOFR plus 2.5 % per annum or (b) the Base Rate plus 1.5 % per annum. Following the Second Amendment Period, Loans will bear interest at rates based on (a) Term SOFR plus a rate ranging from 1.125 % to 2.0 % per annum or (b) the Base Rate plus a rate ranging from 0.125 % to 1.0 % per annum, the relevant rate in each case being the Applicable Rate. The Applicable Rate following the Second Amendment Period will be determined in accordance with a leverage-based pricing grid, as set forth in the Credit Agreement as amended by the Second Amendment. Excluding hedge impact, the weighted average interest rate on outstanding borrowings under the Credit Agreement at March 31, 2024 was 8.10 %. During fiscal 2021, the Company used interest rate swaps to hedge a portion of the interest rate risk related its outstanding variable rate debt. As of March 31, 2024, the notional amount of the interest rate swaps was $ 400,000 with fixed rate payments of 5.60 %. Including hedge impact, the weighted average interest rate on outstanding borrowings under the Credit Agreement at March 31, 2024 was 6.96 %. 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, 2024, there were $ 496,000 of loans under the Revolver, $ 283,125 of Term Loans, and $ 3,188 of letters of credit outstanding under the Credit Agreement. As of March 31, 2024, $ 300,812 was available under the Credit Agreement, subject to compliance with the financial covenants. As of March 31, 2024, the Company was in compliance with all associated covenants. 17 Table of Contents 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 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 during the first quarter of fiscal year 2024, 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 and nine months ended March 31, 2024 was $ 12,666 and $ 40,054 , respectively. Interest paid during the three and nine months ended March 31, 2023 was $ 11,791 and $ 27,857 , respectively. 10. INCOME TAXES 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. The Company calculated its tax rate on a discrete basis for the nine months ended March 31, 2024 due to significant variations in the relationship between tax expense and projected pretax income. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability on the effective tax rates from quarter to quarter. The Company’s effective tax rate may change from period-to-period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes and tax audit settlements. The effective income tax rate was an expense of 12.1 % and a benefit of 25.6 % for the three months ended March 31, 2024 and 2023, respectively. The effective income tax rate was a benefit of 6.1 % and 24.1 % for the nine months ended March 31, 2024 and 2023, respectively. The effective income tax rate for the nine months ended March 31, 2024 was impacted by an increase in the federal and state valuation allowance, tax expense related to stock-based compensation, global intangible low-taxed income and limitations on the deductibility of executive compensation. 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, 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 rates in each period were also impacted by the geographical mix of earnings and state income taxes. 18 Table of Contents 11. ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents the changes in accumulated other comprehensive loss (“AOCL”): Foreign Currency Translation Adjustment, Net Deferred Gains on Cash Flow Hedging Instruments, Net Deferred Gains (Losses) on Fair Value Hedging Instruments, Net Deferred Gains (Losses) 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 ) Balance at September 30, 2022 ( 235,374 ) 11,112 297 7,021 ( 216,944 ) Other comprehensive income (loss) before reclassifications 59,674 ( 454 ) ( 1,067 ) ( 4,359 ) 53,794 Amounts reclassified into (income) expense — ( 1,411 ) 1,588 ( 373 ) ( 196 ) Net change in accumulated other comprehensive income (loss) for the three months ended December 31, 2022 (1) 59,674 ( 1,865 ) 521 ( 4,732 ) 53,598 Balance at December 31, 2022 ( 175,700 ) 9,247 818 2,289 ( 163,346 ) Other comprehensive income (loss) before reclassifications 15,250 ( 3,190 ) ( 28 ) ( 108 ) 11,924 Amounts reclassified into (income) expense ( 1,320 ) 157 ( 360 ) ( 1,523 ) Net change in accumulated other comprehensive income (loss) for the three months ended March 31, 2023 (1) 15,250 ( 4,510 ) 129 ( 468 ) 10,401 Balance at March 31, 2023 $ ( 160,450 ) $ 4,737 $ 947 $ 1,821 $ ( 152,945 ) 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 ) Balance at September 30, 2023 ( 170,961 ) 13,342 398 1,598 ( 155,623 ) Other comprehensive income (loss) before reclassifications 36,536 ( 5,806 ) ( 738 ) ( 2,995 ) 26,997 Amounts reclassified into (income) expense — ( 1,801 ) 774 ( 372 ) ( 1,399 ) Net change in accumulated other comprehensive income (loss) for the three months ended December 31, 2023 (1) 36,536 ( 7,607 ) 36 ( 3,367 ) 25,598 Balance at December 31, 2023 ( 134,425 ) 5,735 434 ( 1,769 ) ( 130,025 ) Other comprehensive (loss) income before reclassifications ( 11,004 ) 5,475 430 1,748 ( 3,351 ) Amounts reclassified into income — ( 1,771 ) ( 557 ) ( 368 ) ( 2,696 ) Net change in accumulated other comprehensive (loss) income for the three months ended March 31, 2024 (1) ( 11,004 ) 3,704 ( 127 ) 1,380 ( 6,047 ) Balance at March 31, 2024 $ ( 145,429 ) $ 9,439 $ 307 $ ( 389 ) $ ( 136,072 ) (1) See Note 15, 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 and nine months ended March 31, 2024 and 2023. 19 Table of Contents 12. STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS Under the Company ’ s Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the “2002 Plan”), the Company historically granted equity-based awards to its officers, senior management, other key employees, consultants, and directors. The Company currently utilizes a stockholder-approved plan, The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan (the “2022 Plan”), which was approved at the Company’s 2022 Annual Meeting of Stockholders held on November 17, 2022. The 2022 Plan permits the Company to continue making equity-based and other incentive awards in a manner intended to properly incentivize its employees, directors, consultants and other service providers by aligning their interests with the interests of the Company’s stockholders. The Company also historically granted shares under its 2019 Equity Inducement Award Program (the “2019 Inducement Program”) to induce selected individuals to become employees of the Company. The 2002 Plan, the 2022 Plan and the 2019 Inducement Program are collectively referred to as the “Stock Award Plans.” In conjunction with the Stock Award Plans, the Company maintains a long-term incentive program (the “LTI Program” or “LTIP”) that provides for equity awards, including performance and market-based equity awards that can be earned over defined performance periods. The Company’s LTIP plans, with the exception of the 2023 - 2025 LTIP described below, are described in Note 13, Stock-Based Compensation and Incentive Performance Plans , in the Notes to the Consolidated Financial Statements in the Form 10-K. 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, 2024 2023 2024 2023 Selling, general and administrative expenses $ 3,017 $ 3,228 $ 10,135 $ 10,657 Related income tax benefit $ 316 $ 464 $ 1,170 $ 1,417 Restricted Stock Awards of restricted stock are either restricted stock awards (“RSAs”) or restricted stock units (“RSUs”) that are issued at no cost to the recipient. Performance-based or market-based RSUs are issued in the form of performance share units (“PSUs”). A summary of the restricted st ock activity (including all RSAs, RSUs and PSUs) for the nine months ended March 31, 2024 is as follows: Number of Shares and Units Weighted Average Grant Date Fair Value (per share) Non-vested RSAs, RSUs and PSUs outstanding at June 30, 2023 1,288 $ 26.37 Granted 1,630 $ 12.25 Vested ( 511 ) $ 27.89 Forfeited ( 211 ) $ 21.75 Non-vested RSAs, RSUs and PSUs outstanding at March 31, 2024 2,196 $ 15.56 Shares granted during the nine months ended March 31, 2024 related to shares of RSUs and PSUs granted under the 2024 - 2026 LTIP. Vested shares during the nine months ended March 31, 2024 include a total of 15 shares related to certain performance-based metrics being met and a total of 495 shares related to service-based RSUs. There are market-based PSU awards outstanding under the 2024 - 2026 LTIP, the 2023 – 2025 LTIP and the 2022 – 2024 LTIP. At March 31, 2024, 573 of such shares were outstanding under the 2024 – 2026 LTIP, 264 of such shares were outstanding under the 2023 – 2025 LTIP while 48 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, 2024 2023 Fair value of RSAs, RSUs and PSUs granted $ 19,965 $ 24,560 Fair value of shares vested $ 5,430 $ 3,467 Tax benefit recognized from restricted shares vesting $ 650 $ 520 20 Table of Contents At March 31, 2024, there was $ 23,327 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 2.1 years. 2024-2026 LTIP During the nine months ended March 31, 2024 , the Company granted market-based PSU awards under the LTIP with a total target payout of 596 shares of common stock. At March 31, 2024, there were 573 such shares outstanding under the LTIP. 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 October 26, 2023 through the earlier of (i) October 25, 2026; (ii) the date the participant’s employment is terminated due to death or Disability (as defined); or (iii) the effective date of a Change in Control (as defined) (the “ 2024 TSR Performance Period”) . Vesting of 382 target shares of the outstanding PSU awards is pursuant to a defined calculation of relative TSR over the 2024 TSR Performance Period (the “2024 Relative TSR PSUs”). Vesting of 191 target shares of the outstanding PSU awards is pursuant to the achievement of pre-established three-year compound annual TSR targets over the 2024 TSR Performance Period (the “2024 Absolute TSR PSUs”). Total shares eligible to vest for both the 2024 Relative TSR PSUs and 2024 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: Absolute TSR PSUs Relative TSR PSUs Grant date fair value (per target share) $ 12.23 $ 15.42 Risk-free interest rate 4.98 % 4.98 % Expected dividend yield — — Expected volatility 33.70 % 23.10 % Expected term 3.00 years 3.00 years CEO Succession On November 22, 2022, the Board approved a succession plan pursuant to which Mark L. Schiller transitioned from his position as President and Chief Executive Officer of the Company effective as of December 31, 2022 (the “Transition Date”). As of the Transition Date, certain of Mr. Schiller's stock-based compensation awards were modified and others were forfeited. Additionally, Mr. Schiller will receive severance totaling $ 4,725 , paid in installments over a two-year period following the Transition Date. Severance, including payroll taxes and other costs, was recognized during the three and nine months ended December 31, 2022. On November 22, 2022, 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 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 vest in one-third (1/3) installments on each of the first, second and third anniversaries of the Start Date. Grant date fair values were calculated using a Monte-Carlo simulation model with grant date fair values per target share and related valuation assumptions as follows: Absolute TSR PSUs Relative TSR PSUs Grant date fair value (per target share) $ 13.84 $ 19.54 Risk-free interest rate 4.28 % 4.28 % Expected dividend yield — — Expected volatility 40.70 % 28.20 % Expected term 3.00 years 3.00 years 21 Table of Contents 13. INVESTMENTS On October 27, 2015, the Company acquired a minority equity interest in Chop’t Creative Salad Company LLC, predecessor to Founders Table Restaurant Group, LLC (“Founders Table”). Founders Table owns and operates the fast-casual restaurant chains Chop’t Creative Salad Co. and Dos Toros Taqueria. The investment is being accounted for as an equity method investment due to the Company’s representation on the Board of Directors of Founders Table. At March 31, 2024 and June 30, 2023, the carrying amount of the Company’s investment in Founders Table was $ 6,027 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 amount of the remaining investments were $ 4,429 and $ 4,766 as of March 31, 2024 and June 30, 2023, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures. 14. FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are: • Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and • Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following table presents assets and liabilities measured at fair value on a recurring basis as of March 31, 2024: Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Derivative financial instruments $ 15,040 $ — $ 15,040 $ — Liabilities: Derivative financial instruments $ 4,197 $ — $ 4,197 $ — The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2023: Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Derivative financial instruments $ 16,988 $ — $ 16,988 $ — Liabilities: Derivative financial instruments $ 3,160 $ — $ 3,160 $ — There were no transfers of financial instruments between the three levels of fair value hierarchy during the nine months ended March 31, 2024 or 2023. 22 Table of Contents Derivative Instruments The Company uses interest rate swaps to manage its interest rate risk and cross-currency swaps and foreign currency exchange contracts to manage its exposure to fluctuations in foreign currency exchange rates. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both the Company’s nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of the Company’s derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of the derivatives held as of March 31, 2024 and June 30, 2023 were classified as Level 2 of the fair value hierarchy. Nonrecurring Fair Value Measurements The Company measures certain non-financial assets at fair value on a nonrecurring basis including goodwill, intangible assets, property and equipment and right-of-use lease assets. These assets were initially measured and recognized at amounts equal to the fair value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation. Periodically, these assets are tested for impairment by comparing their respective carrying amounts to the estimated fair value of the reporting unit or asset group in which they reside. In the event any of these assets were to become impaired, the Company would recognize an impairment expense equal to the amount by which the carrying amount of the reporting unit, impaired asset or asset group exceeds its estimated fair value. For indefinite-lived intangible assets, the relief from royalty approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates in the category of intellectual property, discount rates and other variables. Fair value measurements of reporting units are estimated using an income approach involving discounted cash flow models that contain certain Level 3 inputs requiring significant management judgment, including projections of economic conditions, customer demand and changes in competition, revenue growth rates, gross profit margins, operating margins, capital expenditures, working capital requirements, terminal growth rates and discount rates. Fair value measurements of the reporting units associated with 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 and nine months ended March 31, 2024, the Company recorded non-cash impairment charges of $ 18,586 , $ 10,797 , and $ 12,815 for ParmCrisps ® , Thinsters ® , and certain North America personal care intangible assets, respectively, as discussed in Note 8 , Goodwill and Other Intangible Assets . As of March 31, 2024, such intangible assets were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair values of nil , $ 2,023 , and $ 13,000 , respectively. During the three and nine months ended March 31, 2024, the Company recorded non-cash impairment charges of $ 5,875 for certain machinery and equipment within the ParmCrisps ® asset group, as discussed in Note 6, Property, Plant and Equipment, Net. As of March 31, 2024, such assets were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair value of $ 1,243 . During the nine months ended March 31, 2024, the Company recognized a non-cash impairment charge of $ 20,666 related to an asset group in the North America reportable segment, as discussed in Note 6, Property, Plant and Equipment, net . The asset group was primarily comprised of property, plant and equipment and fair value was determined using a discounted cash flow analysis. As of March 31, 2024, the asset group's property, plant and equipment were classified as Level 3 assets measured at fair value on a nonrecurring basis. 23 Table of Contents 15. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages its exposures to a wide variety of business and operational risks. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s receivables and borrowings. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of its functional currency, the U.S. Dollar. Accordingly, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not use derivatives for speculative or trading purposes. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During the three and nine months ended March 31, 2024, 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 2024, the Company estimates that an additional $ 2,266 will be reclassified as a decrease to interest expense. As of March 31, 2024, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: Interest Rate Derivative Number of Instruments Notional Amount Interest Rate Swap 4 $ 400,000 Cash Flow Hedges of Foreign Exchange Risk The Company is exposed to fluctuations in various foreign currencies against its functional currency, the U.S. Dollar. The Company uses foreign currency derivatives including cross-currency swaps to manage its exposure to fluctuations in the USD-EUR exchange rates. Cross-currency swaps involve exchanging fixed-rate interest payments for fixed-rate interest receipts, both of which will occur at the USD-EUR forward exchange rates in effect upon entering into the instr ument. The Company, at times, also uses forward contracts to manage its exposure to fluctuations in the GBP-EUR exchange rates. The Company designates these derivatives as cash flow hedges of foreign exchange risks. For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. During the remaining three months of fiscal 2024, the Company estimates that no amount relating to cross-currency swaps will be reclassified to interest expense. 24 Table of Contents As of March 31, 2024, 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 1 £ 444 € 520 Net Investment Hedges The Company is exposed to fluctuations in foreign exchange rates on investments it holds in its Western European foreign entities and their exposure to the Euro. The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in the foreign exchange rate on its foreign investment in Western Europe. Currency forward agreements involve fixing the USD-EUR exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in U.S. Dollars for their fair value at or close to their settlement date. Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency- fixed-rate payments over the life of the agreement. For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in AOCL as part of the cumulative translation adjustment. Amounts are reclassified out of AOCL into earnings when the hedged net investment is either sold or substantially liquidated. As of March 31, 2024, the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations: Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased Cross-currency swap 4 € 100,300 $ 105,804 Fair Value Hedges The Company is exposed to changes in the fair value of certain of its foreign denominated intercompany loans due to changes in foreign exchange spot rates. The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in foreign exchange rates affecting gains and losses on intercompany loan principal and interest. Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency-fixed-rate payments over the life of the agreement. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest and other financing expense, net. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company’s accounting policy election. The earnings recognition of excluded components is presented in the same income statement line item as the earnings effect of the hedged transaction. During the remaining three months of fiscal 2024, 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, 2024, 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 25 Table of Contents As of March 31, 2024 and June 30, 2023, the following amounts were recorded on the Consolidated Balance Sheets 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 March 31, 2024 June 30, 2023 March 31, 2024 June 30, 2023 Intercompany loan receivable $ 26,648 $ 26,945 $ ( 297 ) $ 924 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, 2024: Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate swaps Prepaid expenses and other current assets $ 7,470 Accrued expenses and other current liabilities $ — Interest rate swaps Other noncurrent assets 5,194 Other noncurrent liabilities — Cross-currency swaps Prepaid expenses and other current assets 2,376 Accrued expenses and other current liabilities — Cross-currency swaps Other noncurrent assets — Other noncurrent liabilities 4,196 Foreign currency forward contracts Prepaid expenses and other current assets — Other noncurrent liabilities 1 Total derivatives designated as hedging instruments $ 15,040 $ 4,197 The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of June 30, 2023: Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate swaps Prepaid expenses and other current assets $ 8,649 Accrued expenses and other current liabilities $ — Interest rate swaps Other noncurrent assets 5,974 Other noncurrent liabilities — Cross-currency swaps Prepaid expenses and other current assets 2,365 Accrued expenses and other current liabilities — Cross-currency swaps Other noncurrent assets — Other noncurrent liabilities 3,160 Total derivatives designated as hedging instruments $ 16,988 $ 3,160 26 Table of Contents 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, 2024 and 2023: 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, 2024 2023 2024 2023 Interest rate swaps $ 7,274 $ ( 4,285 ) Interest and other financing expense, net $ 2,363 $ 1,792 Cross-currency swaps — — Interest and other financing expense, net / Other expense (income), net — ( 46 ) Foreign currency forward contracts ( 1 ) — Cost of sales ( 10 ) — Total $ 7,273 $ ( 4,285 ) $ 2,353 $ 1,746 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, 2024 and 2023: 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) Nine Months Ended March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Interest rate swaps $ 5,028 $ 10,295 Interest and other financing expense, net $ 7,037 $ 4,927 Cross-currency swaps — — Interest and other financing expense, net / Other expense (income), net — ( 276 ) Foreign currency forward contracts 50 80 Cost of sales ( 10 ) — Total $ 5,078 $ 10,375 $ 7,027 $ 4,651 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 March 31, 2024 and 2023: Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Cost of sales Interest and other financing expense, net Cost of sales Interest and other financing expense, net The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships Interest rate swaps Amount of gain reclassified from AOCL into income $ — $ 2,343 $ — $ 1,792 Cross-currency swaps Amount of loss reclassified from AOCL into income $ — $ — $ — $ ( 46 ) Foreign currency forward contracts Amount of gain reclassified from AOCL into income $ 10 $ — $ — $ — 27 Table of Contents 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 nine months ended March 31, 2024 and 2023: Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships Nine Months Ended March 31, 2024 Nine Months Ended March 31, 2023 Cost of sales Interest and other financing expense, net Cost of sales Interest and other financing expense, net The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships Interest rate swaps Amount of gain reclassified from AOCL into income $ — $ 7,017 $ — $ 4,088 Cross-currency swaps Amount of loss reclassified from AOCL into income $ 10 $ — $ — $ ( 276 ) 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, 2024 and 2023: Derivatives in Fair Value Hedging Relationships Amount of Gain (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, 2024 2023 2024 2023 Cross-currency swaps $ 572 $ ( 38 ) Interest and other financing expense, net / Other expense (income), net $ 122 $ 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, 2024 and 2023: 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, Nine Months Ended March 31, 2023 2022 2023 2022 Cross-currency swaps $ 163 $ 85 Interest and other financing expense, net / Other expense (income), net $ 369 $ 367 28 Table of Contents 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 March 31, 2024 and 2023: Location and Amount of Loss (Gain) Recognized in the Consolidated Statement of Operations on Fair Value Hedging Relationships Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Interest and other financing expense, net Interest and other financing expense, net The effects of fair value hedging: Loss on fair value hedging relationships Cross-currency swaps Amount of loss (gain) reclassified from AOCL into income $ 740 $ ( 210 ) 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 nine months ended March 31, 2024 and 2023: Location and Amount of Loss (Gain) Recognized in the Consolidated Statement of Operations on Fair Value Hedging Relationships Nine Months Ended March 31, 2024 Nine Months Ended March 31, 2023 Interest and other financing expense, net Interest and other financing expense, net The effects of fair value hedging: Loss on fair value hedging relationships Cross-currency swaps Amount of loss (gain) reclassified from AOCL into income $ 666 $ ( 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, 2024 and 2023: Derivatives in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCL on Derivatives Location of Gain Recognized in Income on Derivatives Amount of Gain Recognized in Income on Derivatives Three Months Ended March 31, Three Months Ended March 31, 2024 2023 2024 2023 Cross-currency swaps $ 2,322 $ ( 144 ) Interest and other financing expense, net $ 489 $ 484 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, 2024 and 2023: Derivatives in Net Investment Hedging Relationships Amount of Gain Recognized in AOCL on Derivatives Location of Gain Recognized in Income on Derivatives Amount of Gain Recognized in Income on Derivatives Nine Months Ended March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Cross-currency swaps $ 659 $ 335 Interest and other financing expense, net $ 1,479 $ 1,474 29 Table of Contents Credit-Risk-Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a cross-default provision upon certain defaults by the Company on any of its indebtedness. 16. TRANSFORMATION PROGRAM During the first quarter of fiscal year 2024, the Company initiated a multi-year growth, transformation and restructuring program (the “Hain Reimagined Program”). The Hain Reimagined 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 is primarily comprised of: contract termination costs, asset write-downs, employee-related costs and other transformation-related expenses. For the three months ended March 31, 2024, expenses associated with the Company’s restructuring program in the amount of $ 1,353 , $ 7,175 , and $ 1,329 , respectively, were recorded in Intangibles and long-lived asset impairment, Productivity and transformation costs, and Cost of sales, respectively, on the Consolidated Statements of Operations. For the nine months ended March 31, 2024, expenses associated with the Company’s restructuring program in the amount of $ 22,019 , $ 20,447 , and $ 7,762 , respectively, were recorded in Intangibles and long-lived asset impairment, Productivity and transformation costs, and Cost of sales, respectively, on the Consolidated Statements of Operations. The table below sets forth expenses associated with the Company’s restructuring program for the three and nine months ended March 31, 2024 by reportable segment and Corporate and Other. Three Months Ended March 31, 2024 Nine Months Ended March 31, 2024 North America $ 2,007 $ 30,458 Corporate and Other 5,799 16,636 International 2,051 3,134 $ 9,857 $ 50,228 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 March 31, 2024: Charges Amounts Paid Non-cash settlements/ Adjustments 2 Balance at March 31, 2024 Employee-related costs 1 $ 5,653 $ ( 2,737 ) $ — $ 2,916 Contract termination costs 5,129 ( 4,677 ) ( 354 ) 98 Asset write-downs 2 24,159 — ( 24,159 ) — Other transformation-related expenses 3 15,287 ( 13,316 ) — 1,971 $ 50,228 $ ( 20,730 ) $ ( 24,513 ) $ 4,985 1 Employee-related costs include $ 1,130 severance related to executive officer succession. 2 Represents non-cash asset write-downs including asset impairment and accelerated depreciation. 3 Other transformation-related expenses primarily include consultancy charges related to reorganization of global functions and related personnel resource requirements, and rationalizing sourcing and supply chain processes. 30 Table of Contents 17. COMMITMENTS AND CONTINGENCIES Securities Class Actions Filed in Federal Court On August 17, 2016, three securities class action complaints were filed in the Eastern District of New York (the “District Court”) against the Company alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934: (1) Flora v. The Hain Celestial Group, Inc., et al.; (2) Lynn v. The Hain Celestial Group, Inc., et al.; and (3) Spadola v. The Hain Celestial Group, Inc., et al. (collectively, the “Securities Complaints”). The Securities Complaints were ultimately 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. During the summer of 2017, a Corrected Consolidated Amended Complaint was filed, which 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. After Defendants’ initial motion to dismiss was granted without prejudice to replead in October 2017, the Co-Lead Plaintiffs filed a Second Amended Consolidated Class Action Complaint on May 6, 2019 (the “Second Amended Complaint”). The Second Amended Complaint again named as defendants the Company and certain of its former officers and asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations similar to those in the Correct Consolidated Amended Complaint. Defendants filed a motion to dismiss the Second Amended Complaint on June 20, 2019. On April 6, 2020, the District Court granted Defendants’ motion to dismiss the Second Amended Complaint in its entirety, with prejudice. Co-Lead Plaintiffs appealed the District Court’s decision dismissing the Second Amended Complaint to the United States Court of Appeals for the Second Circuit (the “Second Circuit”). By decision dated December 17, 2021, the Second Circuit vacated the District Court’s judgment and remanded the case for further proceedings. The parties ultimately submitted supplemental briefing between May 12, 2022 and June 23, 2022, and in June 2022, the District Court referred Defendants’ Motion to Dismiss the Second Amended Complaint to a United States Magistrate Judge (the “Magistrate Judge”) for a Report and Recommendation. On November 4, 2022, the Magistrate Judge issued a Report and Recommendation recommending that the District Court grant Defendants’ Motion to Dismiss the Second Amended Complaint with prejudice. On September 29, 2023, the District Court granted Defendants’ Motion to Dismiss the Second Amended Complaint.Co-Lead Plaintiffs filed notice of appeal on October 26, 2023, appealing the District Court’s decision dismissing the Second Amended Complaint to the Second Circuit. Co-Lead Plaintiffs filed their opening brief on February 12, 2024. Defendants have until May 13, 2024 to file their opposition brief. Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court The former Board of Directors and certain former officers of the Company are defendants in a consolidated action originally filed in 2017 in the Eastern District of New York under the captions Silva v. Simon, et al., Barnes v. Simon, et al., Merenstein v. Heyer, et al., and Oliver v. Berke, et al. Plaintiffs in the consolidated action, In re The Hain Celestial Group, Inc. Stockholder Class and Derivative Litigation (the “Consolidated Stockholder Class and Derivative Action”), allege the violation of securities law, breach of fiduciary duty, waste of corporate assets and unjust enrichment. The plaintiffs alleged in their Amended Complaint that the Company’s former directors and certain former officers made materially false and misleading statements in press releases and SEC filings regarding the Company’s business, prospects and financial results and that the Company violated its by-laws and Delaware law by failing to hold its 2016 Annual Stockholders Meeting and includes claims for breach of fiduciary duty, unjust enrichment and corporate waste. On December 20, 2017, the parties agreed to stay Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through and including 30 days after a decision was rendered on the motion to dismiss the Amended Complaint in the Consolidated Securities Action, described above. After the District Court granted Defendants’ motion to dismiss the Consolidated Securities Action, the Co-Lead Plaintiffs in that action filed a Second Amended Complaint on May 6, 2019. The parties to the Consolidated Stockholder Class and Derivative Action thereby agreed to continue the stay of Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through 30 days after a decision on Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action. On April 6, 2020, the District Court granted Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action, with prejudice. Pursuant to the terms of an agreed-upon stay, Defendants in the Consolidated Stockholder Class and Derivative Action had until May 6, 2020 to answer, move, or otherwise respond to the complaint in this matter. This deadline was extended, and Defendants moved to dismiss the Consolidated Stockholder Class and Derivative Action Complaint on June 23, 2020, with Plaintiffs’ opposition due August 7, 2020. 31 Table of Contents On July 24, 2020, Plaintiffs made a stockholder litigation demand on the current Board containing overlapping factual allegations to those set forth in the Consolidated Stockholder Class and Derivative Action. On November 3, 2020, Plaintiffs were informed that the Board of Directors had finished investigating and resolved, among other things, that the demand should be rejected. 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 parties have agreed to extend the stay through the earlier of November 8, 2024 or 30 days after the Second Circuit issues a decision on Plaintiffs’ appeal. Baby Food Litigation Since February 2021, the Company has been named in numerous consumer class actions alleging that the Company’s Earth’s Best® baby food products (the “Products”) contain unsafe and undisclosed levels of various naturally occurring heavy metals, namely lead, arsenic, cadmium and mercury. Those actions have now been transferred and consolidated as a single lawsuit in the U.S. District Court for the Eastern District of New York captioned In re Hain Celestial Heavy Metals Baby Food Litigation, Case No. 2:21-cv-678 (the “Consolidated Proceeding”), which generally alleges that the Company violated various state consumer protection laws and asserts other state and common law warranty and unjust enrichment claims related to the alleged failure to disclose the presence of these metals, arguing that consumers would have either not purchased the Products or would have paid less for them had the Company made adequate disclosures. The Company filed a motion to dismiss the Consolidated Class Action Complaint on November 7, 2022, which was opposed by the plaintiffs. On May 9, 2023, upon consent of the parties, the Court stayed the Consolidated Proceeding 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.) (the “Beech-Nut Case”). Accordingly, the Court denied the Company’s motion to dismiss without prejudice to renew. By summary order dated January 18, 2024, the Second Circuit vacated the judgment dismissing the Beech-Nut Case and remanded for further proceedings. On February 15, 2024, the Company served a renewed motion to dismiss the Consolidated Proceeding. Plaintiffs served their opposition on March 14, 2024, and the Company served its reply on April 4, 2024. The Company’s renewed motion to dismiss is now fully briefed and filed with the Court, and the Court has not scheduled oral argument on the motion to dismiss at this time. One consumer class action is pending in New York Supreme Court, Nassau County, which the court has stayed in deference to the Consolidated Proceeding. The Company denies the allegations in these lawsuits and contends that its baby foods are safe and properly labeled. The claims raised in these lawsuits were brought in the wake of a highly publicized report issued by the U.S. House of Representatives Subcommittee on Economic and Consumer Policy on Oversight and Reform, dated February 4, 2021 (the “House Report”), addressing the presence of heavy metals in baby foods made by certain manufacturers, including the Company. Since the publication of the House Report, the Company has also received information requests with respect to the advertising and quality of its baby foods from certain governmental authorities, as such authorities investigate the claims made in the House Report. The Company is fully cooperating with these requests and has provided documents and other requested information. The Company has been named in one civil government enforcement action, State of New Mexico ex rel. Balderas v. Nurture, Inc., et al., which was filed by the New Mexico Attorney General against the Company and several other manufacturers based on the alleged presence of heavy metals in their baby food products. The Company and several other manufacturers moved to dismiss the New Mexico Attorney General’s lawsuit, and the Court denied that motion. The Company filed its answer to the New Mexico Attorney General’s amended complaint on April 23, 2022. The Company and several other manufacturers moved for reconsideration of the Court’s order denying its motion to dismiss, and the Court denied that motion as well. 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 numerous 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. 32 Table of Contents Multidistrict Litigation • On January 4, 2024, Plaintiffs in federal cases across the country filed a Motion to Transfer Actions Pursuant to 28 U.S.C. § 1407 for Coordinated or Consolidated Pretrial Proceedings. On April 11, 2024, the United States Judicial Panel on Multidistrict Litigation granted Plaintiffs’ Motion and transferred the cases to the Northern District of California for coordinated or consolidated pretrial proceedings. In Re: Baby Food Products Liability Litigation (MDL No. 3101) has been assigned to District Judge Jacqueline Scott Corley. On April 15, 2024, Judge Corley issued Pretrial Order No. 1 staying all outstanding discovery proceedings and pending motions and vacating all previously scheduled hearing dates. There are approximately 20 federal cases filed against the Company pending in the MDL. An initial status conference will be held on May 16, 2024. California State Court Cases • There are currently seven cases against the Company pending in California state court, including six in Los Angeles Superior Court and one in Alameda Superior Court. The Plaintiffs filed a Petition for Coordination to the Chair of the Judicial Council seeking to coordinate the Alameda Superior Court and Los Angeles Superior Court cases. The Court will hold a hearing on May 9, 2024. • In one of the Los Angeles cases, Landon R. v. The Hain Celestial Group, Inc., et al., No. 23STCV24844, Plaintiff filed a motion for trial preference pursuant to California Code of Civil Procedure § 36(b). Defendants opposed the Motion. The court has requested additional briefing. In the alternative, Plaintiff filed an Ex Parte Application to Specially Set a Trial Date Pursuant to California Rule of Court Rule 3.1335. Other Cases • In the matter Palmquist v. The Hain Celestial Group, Inc., a jury trial commenced on February 6, 2023 in the United States District Court for the Southern District of Texas. The Company moved for Directed Verdict at the close of Plaintiffs’ case. The Court granted the Company’s motion, finding no liability for the Company. The Court entered Final Judgment in the Company’s favor on March 3, 2023. On April 3, 2023, Plaintiffs filed their Notice of Appeal in the Fifth Circuit. Plaintiffs’ appeal is fully briefed and oral argument took place before the Fifth Circuit on February 6, 2024. • In NC v. The Hain Celestial Group, et al., in the Superior Court for the State of California, County of Los Angeles, judgment was entered on October 26, 2023 in favor of the defendants as a result of successful defense pretrial motions, including the Company’s motion for summary judgment. The time for appeal has passed. The Company denies that its Products led to any of the alleged injuries and will defend these cases vigorously. That said, as is common in circumstances of this nature, 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 insurance, which could have a material adverse effect on our financial condition and business. SEC Investigation In November 2023, the staff of the SEC informed the Company it was conducting an investigation relating to Hain Celestial and requested documents primarily concerning (i) the Company’s acquisition of one business and disposition of another business and certain related accounting matters and (ii) trading activity and other matters related to the Company’s earnings guidance in certain previous fiscal years. The Company is cooperating with the SEC in this investigation. Other In addition to the matters described above, the Company is and may be a defendant in lawsuits from time to time in the normal course of business. With respect to all litigation and related matters, the Company records a liability when the Company believes it is probable that a liability has been incurred and the amount can be reasonably estimated. As of the end of the period covered by this report, the Company has not recorded a liability for any of the matters disclosed in this note. It is possible that some matters could require the Company to pay damages, incur other costs or establish accruals in amounts that could not be reasonably estimated as of the end of the period covered by this report. 33 Table of Contents 18. SEGMENT INFORMATION 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: net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses, certain litigation and related costs, plant closure related costs, net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, net, costs associated with acquisitions, divestitures and other transactions, (gain) loss on sale of assets, inventory write-downs related to exited categories, intangibles and long-lived asset impairments and other adjustments. In addition, Segment Adjusted EBITDA does not include Corporate and Other expenses related to the Company’s centralized administrative functions, which do not specifically relate to a reportable segment. Such Corporate and Other expenses are comprised mainly of compensation and related expenses of certain of the Company’s senior executive officers and other employees who perform duties related to the entire enterprise, litigation expense and expenses for certain professional fees, facilities, and other items which benefit the Company as a whole. 34 Table of Contents 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, 2024 2023 2024 2023 Net Sales: North America $ 268,107 $ 286,649 $ 795,832 $ 857,406 International 170,251 168,594 521,655 491,396 $ 438,358 $ 455,243 $ 1,317,487 $ 1,348,802 Adjusted EBITDA: North America $ 27,883 $ 27,193 $ 77,828 $ 96,484 International 24,547 21,269 67,953 55,458 Total Reportable Segments Adjusted EBITDA 52,430 48,462 145,781 151,942 Corporate and Other ( 8,668 ) ( 11,202 ) ( 30,803 ) ( 28,836 ) 43,762 37,260 114,978 123,106 Depreciation and amortization ( 10,858 ) ( 13,784 ) ( 34,360 ) ( 37,909 ) Equity in net loss of equity-method investees ( 966 ) ( 528 ) ( 2,371 ) ( 1,226 ) Interest expense, net ( 13,322 ) ( 12,924 ) ( 41,278 ) ( 30,582 ) (Provision) benefit for income taxes ( 5,100 ) 39,587 4,528 30,599 Stock-based compensation, net ( 3,017 ) ( 3,228 ) ( 10,135 ) ( 10,657 ) Unrealized currency losses ( 250 ) ( 202 ) ( 91 ) ( 651 ) Certain litigation expenses, net (a) ( 458 ) 1,582 ( 4,073 ) ( 3,363 ) Restructuring activities Productivity and transformation costs ( 7,175 ) ( 3,933 ) ( 20,447 ) ( 5,692 ) Plant closure related costs, net ( 1,145 ) ( 22 ) ( 5,288 ) ( 73 ) Warehouse/manufacturing consolidation and other costs, net ( 184 ) ( 2,871 ) ( 995 ) ( 899 ) CEO succession — — — ( 5,113 ) Acquisitions, divestitures and other Transaction and integration costs, net ( 55 ) ( 215 ) ( 282 ) ( 1,984 ) Gain (loss) on sale of assets — 134 ( 62 ) 3,529 Impairment charges Intangibles and long-lived asset impairment ( 49,426 ) ( 156,583 ) ( 70,786 ) ( 156,923 ) Inventory write-downs related to exited categories — — ( 1,443 ) — Net loss $ ( 48,194 ) $ ( 115,727 ) $ ( 72,105 ) $ ( 97,838 ) (a) Expenses and items relating to securities class action, baby food litigation, and SEC investigation. 35 Table of Contents The Company’s net sales by product category are as follows: Three Months Ended March 31, Nine Months Ended March 31, 2024 2023 2024 2023 Snacks $ 111,157 $ 111,646 $ 342,118 $ 357,424 Baby/Kids 64,317 66,976 188,458 213,762 Beverages 68,384 64,089 197,116 185,085 Meal preparation 165,675 169,216 513,004 495,630 Personal care 28,825 43,316 76,791 96,901 $ 438,358 $ 455,243 $ 1,317,487 $ 1,348,802 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 March 31, Nine Months Ended March 31, 2024 2023 2024 2023 United States $ 240,175 $ 259,468 $ 710,158 $ 774,032 United Kingdom 123,500 122,069 383,179 354,808 Western Europe 46,751 46,525 138,476 136,588 Canada 27,932 27,181 85,674 83,374 $ 438,358 $ 455,243 $ 1,317,487 $ 1,348,802 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. 19. SUBSEQUENT EVENT On April 8, 2024, the Company completed the sale of its Thinsters ® cookie business for total cash consideration of $ 7,700 , subject to customary post-closing adjustments. The divestiture is consistent with the Company’s strategy to further optimize its better-for-you portfolio; the net proceeds from the sale were used to repay a portion of the Company’s Term Loans. As of March 31, 2024, all assets and liabilities related to the Thinsters ® business were part of the North America reportable segment. See Note 8, Goodwill and Other Intangible Assets . 36 Table of Contents