Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS
THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31, 2024 AND JUNE 30, 2024
(In thousands, except par values)
December 31,
June 30,
2024
2024
ASSETS
Current assets:
Cash and cash equivalents
$
56,200
$
54,307
Accounts receivable, less allowance for doubtful accounts of $ 1,430 and $ 1,517 , respectively
178,312
179,190
Inventories
260,525
274,128
Prepaid expenses and other current assets
53,450
49,434
Total current assets
548,487
557,059
Property, plant and equipment, net
250,735
261,730
Goodwill
825,624
929,304
Trademarks and other intangible assets, net
223,652
244,799
Investments and joint ventures
6,922
10,228
Operating lease right-of-use assets, net
80,726
86,634
Other assets
24,397
27,794
Total assets
$
1,960,543
$
2,117,548
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
198,541
$
188,220
Accrued expenses and other current liabilities
83,168
85,714
Current portion of long-term debt
7,564
7,569
Total current liabilities
289,273
281,503
Long-term debt, less current portion
721,076
736,523
Deferred income taxes
45,571
47,826
Operating lease liabilities, noncurrent portion
74,817
80,863
Other noncurrent liabilities
25,073
27,920
Total liabilities
1,155,810
1,174,635
Commitments and contingencies (Note 16)
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: 112,393 and 111,867 shares, respectively; outstanding: 90,221 and 89,846 shares, respectively
1,124
1,119
Additional paid-in capital
1,236,702
1,230,253
Retained earnings
453,881
577,519
Accumulated other comprehensive loss
( 156,983
)
( 137,245
)
1,534,724
1,671,646
Less: Treasury stock, at cost, 22,172 and 22,021 shares, respectively
( 729,991
)
( 728,733
)
Total stockholders’ equity
804,733
942,913
Total liabilities and stockholders’ equity
$
1,960,543
$
2,117,548
See notes to consolidated financial statements.
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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED December 31, 2024 AND 2023
(In thousands, except per share amounts)
Three Months Ended December 31,
Six Months Ended December 31,
2024
2023
2024
2023
Net sales
$
411,485
$
454,100
$
806,081
$
879,129
Cost of sales
318,033
351,885
631,019
692,971
Gross profit
93,452
102,215
175,062
186,158
Selling, general and administrative expenses
70,155
73,952
141,483
151,121
Goodwill impairment
91,267
—
91,267
—
Intangibles and long-lived asset impairment
17,986
20,666
18,017
21,360
Productivity and transformation costs
4,190
6,869
9,208
13,272
Amortization of acquired intangible assets
1,753
1,509
3,933
3,464
Operating loss
( 91,899
)
( 781
)
( 88,846
)
( 3,059
)
Interest and other financing expense, net
12,800
16,138
26,546
29,382
Other (income) expense, net
( 4,040
)
( 42
)
1,252
( 307
)
Loss before income taxes and equity in net loss of equity-method investees
( 100,659
)
( 16,877
)
( 116,644
)
( 32,134
)
Provision (benefit) for income taxes
2,728
( 4,249
)
6,251
( 9,628
)
Equity in net loss of equity-method investees
588
907
743
1,405
Net loss
$
( 103,975
)
$
( 13,535
)
$
( 123,638
)
$
( 23,911
)
Net loss per common share:
Basic
$
( 1.15
)
$
( 0.15
)
$
( 1.37
)
$
( 0.27
)
Diluted
$
( 1.15
)
$
( 0.15
)
$
( 1.37
)
$
( 0.27
)
Shares used in the calculation of net loss per common share:
Basic
90,132
89,811
89,997
89,661
Diluted
90,132
89,811
89,997
89,661
See notes to consolidated financial statements.
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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED )
FOR THE THREE AND SIX MONTHS ENDED December 31, 2024 AND 2023
(In thousands)
Three Months Ended
December 31, 2024
December 31, 2023
Pretax
amount
Tax
(expense)
benefit
After tax
amount
Pretax
amount
Tax
benefit
(expense)
After tax
amount
Net loss
$
( 103,975
)
$
( 13,535
)
Other comprehensive (loss) income:
Foreign currency translation adjustments before reclassifications
$
( 64,695
)
$
—
$
( 64,695
)
$
36,536
$
—
$
36,536
Change in deferred gains (losses) on cash flow hedging instruments
4,093
( 1,087
)
3,006
( 10,108
)
2,501
( 7,607
)
Change in deferred (losses) gains on fair value hedging instruments
( 479
)
127
( 352
)
47
( 11
)
36
Change in deferred gains (losses) on net investment hedging instruments
6,084
( 1,617
)
4,467
( 4,474
)
1,107
( 3,367
)
Total other comprehensive (loss) income
$
( 54,997
)
$
( 2,577
)
$
( 57,574
)
$
22,001
$
3,597
$
25,598
Total comprehensive (loss) income
$
( 161,549
)
$
12,063
Six Months Ended
December 31, 2024
December 31, 2023
Pretax
amount
Tax
benefit
(expense)
After tax
amount
Pretax
amount
Tax
benefit
After tax
amount
Net loss
$
( 123,638
)
$
( 23,911
)
Other comprehensive (loss) income:
Foreign currency translation adjustments before reclassifications
$
( 16,880
)
$
—
$
( 16,880
)
$
3,603
$
—
$
3,603
Change in deferred losses on cash flow hedging instruments
( 5,610
)
1,351
( 4,259
)
( 6,871
)
1,708
( 5,163
)
Change in deferred losses on fair value hedging instruments
( 329
)
89
( 240
)
( 334
)
83
( 251
)
Change in deferred gains (losses) on net investment hedging instruments
2,308
( 667
)
1,641
( 2,653
)
655
( 1,998
)
Total other comprehensive loss
$
( 20,511
)
$
773
$
( 19,738
)
$
( 6,255
)
$
2,446
$
( 3,809
)
Total comprehensive loss
$
( 143,376
)
$
( 27,720
)
See notes to consolidated financial statements.
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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED December 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, 2024
111,867
$
1,119
$
1,230,253
$
577,519
22,021
$
( 728,733
)
$
( 137,245
)
$
942,913
Net loss
( 19,663
)
( 19,663
)
Other comprehensive income
37,836
37,836
Issuance of common stock pursuant to stock-based compensation plans
97
1
1
Employee shares withheld for taxes
36
( 302
)
( 302
)
Stock-based compensation expense
2,876
2,876
Balance at September 30, 2024
111,964
$
1,120
$
1,233,129
$
557,856
22,057
$
( 729,035
)
$
( 99,409
)
$
963,661
Net loss
( 103,975
)
( 103,975
)
Other comprehensive loss
( 57,574
)
( 57,574
)
Issuance of common stock pursuant to stock-based compensation plans
429
4
4
Employee shares withheld for taxes
115
( 956
)
( 956
)
Stock-based compensation expense
3,573
3,573
Balance at December 31, 2024
112,393
$
1,124
$
1,236,702
$
453,881
22,172
$
( 729,991
)
$
( 156,983
)
$
804,733
See notes to consolidated financial statements.
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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED December 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, 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
See notes to consolidated financial statements.
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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED December 31, 2024 AND 2023
(In thousands)
Six Months Ended December 31,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
( 123,638
)
$
( 23,911
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
22,447
23,502
Deferred income taxes
( 1,116
)
( 16,791
)
Equity in net loss of equity-method investees
743
1,405
Stock-based compensation, net
6,449
7,118
Goodwill impairment
91,267
—
Intangibles and long-lived asset impairment
18,017
21,360
Loss on sale of assets
2,308
62
Other non-cash items, net
( 498
)
965
(Decrease) increase in cash attributable to changes in operating assets and liabilities:
Accounts receivable
( 1,459
)
( 30,647
)
Inventories
3,973
15,166
Other current assets
( 7,682
)
4,882
Other assets and liabilities
( 90
)
( 2,576
)
Accounts payable and accrued expenses
9,397
34,150
Net cash provided by operating activities
20,118
34,685
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
( 12,139
)
( 12,735
)
Investments and joint ventures, net
2,570
—
Proceeds from sale of assets
13,767
1,332
Net cash provided by (used in) investing activities
4,198
( 11,403
)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under bank revolving credit facility
109,000
122,000
Repayments under bank revolving credit facility
( 121,000
)
( 137,000
)
Repayments under term loan
( 3,750
)
( 3,750
)
Payments of other debt, net
( 42
)
( 3,854
)
Employee shares withheld for taxes
( 1,258
)
( 1,489
)
Net cash used in financing activities
( 17,050
)
( 24,093
)
Effect of exchange rate changes on cash
( 5,373
)
1,119
Net increase in cash and cash equivalents
1,893
308
Cash and cash equivalents at beginning of period
54,307
53,364
Cash and cash equivalents at end of period
$
56,200
$
53,672
See notes to consolidated financial statements.
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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. Hain Celestial is a leading global health and wellness company whose purpose is to inspire healthier living for people, communities and the planet through better-for-you brands. For more than 30 years, Hain Celestial has intentionally focused on delivering nutrition and well-being that positively impacts today and tomorrow. Headquartered in Hoboken, N.J., Hain Celestial’s products across snacks, baby & kids, beverages, meal preparation, and personal care are marketed and sold in over 70 countries around the world. The Company operates under two reportable segments: North America and International.
The Company’s leading brands include Garden Veggie Snacks, Terra ® chips, Garden of Eatin’ ® snacks, Hartley’s ® Jelly, Earth’s Best ® and Ella’s Kitchen ® baby and kids foods, Celestial Seasonings ® teas, Joya ® and Natumi ® plant-based beverages, Greek Gods ® yogurt, Cully & Sully ® , Yorkshire Provender ® , New Covent Garden ® and Imagine ® soups, Yves ® and Linda McCartney’s ® (under license) meat-free, and Avalon Organics ® personal care, among others.
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 includes the Company's equity in the current earnings or losses of such companies.
The Company’s unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. 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, 2024 (the “Form 10-K”). The amounts as of and for the periods ended June 30, 2024 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 six months ended December 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2025. Please refer to the Notes to the Consolidated Financial Statements as of June 30, 2024 and for the fiscal year then ended included in the Form 10-K for information not included in these condensed notes.
All dollar amounts in the unaudited consolidated financial statements, notes and tables have been rounded to the nearest thousands, except par values and per share amounts, unless otherwise indicated.
Significant Accounting Policies
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
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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 $ 137,117 and $ 159,760 during the six months ended December 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.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The amendments address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements.
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 December 31,
Six Months Ended December 31,
2024
2023
2024
2023
Numerator:
Net loss
$
( 103,975
)
$
( 13,535
)
$
( 123,638
)
$
( 23,911
)
Denominator:
Basic and diluted weighted average shares outstanding
90,132
89,811
89,997
89,661
Basic and diluted net loss per common share
$
( 1.15
)
$
( 0.15
)
$
( 1.37
)
$
( 0.27
)
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Due to the Company’s net loss in each of the three and six months ended December 31, 2024 and December 31, 2023, all common stock equivalents such as stock options, unvested restricted share units and performance share units have been excluded from the computation of diluted net loss per share. The effect of the stock options and unvested restricted share units would have been anti-dilutive to the computations. The performance share units were contingently issuable based on market conditions and such conditions had not been achieved during the respective periods.
4. DISPOSITION
ParmCrisps ®
On August 30, 2024, the Company completed the sale of its ParmCrisps ® business for total cash consideration of $ 12,000 , subject to customary post-closing adjustments. The divestiture is consistent with the Company’s portfolio simplification process. ParmCrisps ® was part of the Company’s North America reportable segment. During the six months ended December 31, 2024, the Company deconsolidated the net assets of ParmCrisps ® , primarily consisting of $ 7,280 , $ 6,725 , and $ 1,282 of goodwill, inventory, and machinery and equipment, respectively, and recognized a pretax loss on sale of $ 3,863 recorded in other expense (income), net.
5. INVENTORIES
Inventories consisted of the following:
December 31, 2024
June 30, 2024
Finished goods
$
177,100
$
178,150
Raw materials, work-in-progress, and packaging
83,425
95,978
$
260,525
$
274,128
6. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net consisted of the following:
December 31, 2024
June 30, 2024
Land
$
11,258
$
11,381
Buildings and improvements
56,422
57,030
Machinery and equipment
320,153
325,174
Computer hardware and software
53,760
54,139
Furniture and fixtures
20,762
20,943
Leasehold improvements
38,213
39,255
Construction in progress
13,312
12,783
513,880
520,705
Less: Accumulated depreciation
263,145
258,975
$
250,735
$
261,730
Depreciation expense for the three months ended December 31, 2024 an d 2023 was $ 8,038 and $ 8,352 , respectively. Depreciation expense for the six months ended December 31, 2024 and 2023 was $ 15,948 and $ 18,178 , respectively.
As a result of the continued decline in actual and projected performance and cash flows related to certain personal care production assets included in the North America reportable segment, the Company determined that an interim impairment test of the asset group was required to be performed during the three months ended December 31, 2024. The fair value was determined based on orderly liquidation value. During the three and six months ended December 31, 2024, the Company recognized a non-cash impairment charge of $ 2,254 to reduce the carrying value 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.
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During the six months ended December 31, 2023, the Company recognized a non-cash impairment charge of $ 20,666 related to its former Bell, CA production facility to reduce those assets to their estimated fair value in connection with the closure of such facility. During the three and six months ended December 31, 2024, the Company recognized a $ 1.7 million pretax gain on the sale of such long-lived assets, which was included as a component of other income, net on the consolidated statement of operations.
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. At December 31, 2024 and June 30, 2024, right of use assets related to finance leases are included in property, plant and equipment, net on the consolidated balance sheets. Lease liabilities for finance leases are included in the current and non-current portions of long-term debt on the consolidated balance sheets. The current portion of the operating lease liabilities are included in accrued expenses and other current liabilities on the consolidated balance sheets. The Company does not have any related party leases, and sublease transactions are de minimis.
The components of lease expenses for the three and six months ended December 31, 2024 and 2023 were as follows:
Three Months Ended
Six Months Ended
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Operating lease expenses
$
3,937
$
4,796
$
8,046
$
9,374
Finance lease expenses
35
37
72
74
Variable lease expenses
177
190
350
372
Short-term lease expenses
414
418
840
813
Total lease expenses
$
4,563
$
5,441
$
9,308
$
10,633
8. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
The following table provides the changes in the carrying value of goodwill by reportable segment:
North
America
International
Total
Balance as of June 30, 2024 (1)
$
689,468
$
239,836
$
929,304
Divestiture (2)
( 7,280
)
—
( 7,280
)
Translation
( 1,914
)
( 3,219
)
( 5,133
)
Impairment charge
( 91,267
)
—
( 91,267
)
Balance as of December 31, 2024
$
589,007
$
236,617
$
825,624
(1) The total carrying value of goodwill is reflected net of $ 134,277 of accumulated impairment charges, of which $ 7,700 is related to the North America reportable segment and $ 126,577 is related to the International reportable segment.
(2) During the six months ended December 31, 2024, the Company completed the divestiture of ParmCrisps ® , a component of the North America reportable segment. Goodwill of $ 7,280 was assigned to the divested component on a relative fair value basis.
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As of December 31, 2024, the Company performed an assessment of factors to determine whether it was more likely than not that the fair value of each reporting unit within both of the North America and International reportable segments was less than its respective carrying amount, including goodwill. As a result of the continued decline in the Company’s market capitalization and the recognition of significant intangible asset impairment charges within the reporting units in its North America reportable segment during the three months ended December 31, 2024, the Company completed an interim quantitative impairment test for goodwill for both its U.S. and Canada reporting units within the North America reportable segment as of December 31, 2024. For the United Kingdom, Western Europe, and Ella’s Kitchen UK reporting units, 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.
During the three months ended December 31, 2024, the Company conducted interim quantitative impairment tests of goodwill for both the U.S. and Canada reporting units. The fair values were estimated using a blended approach of the Discounted Cash Flow (“DCF”) method income approach and the Guideline Public Company Methodology (“GPCM”) market approach. As of December 31, 2024, the U.S. reporting unit’s carrying amount exceeded its estimated fair value of $ 800,000 , resulting in the recognition of a non-cash impairment charge of $ 91,267 to reduce the carrying value of the U.S. reporting unit goodwill from $ 633,774 to $ 542,507 . The goodwill related to the U.S. reporting unit remains 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 additional impairment charges in future periods.
The Canada reporting unit’s estimated fair value significantly exceeded its carrying amount as of December 31, 2024, indicating no risk of potential impairment. As of December 31, 2024, goodwill associated with the Canada reporting unit had a carrying value of $ 46,501 .
Other Intangible Assets
The following table includes the gross carrying amount and accumulated amortization, where applicable, for intangible assets, excluding goodwill:
December 31, 2024
June 30, 2024
Non-amortized intangible assets:
Trademarks and tradenames (1)
$
190,677
$
195,237
Amortized intangible assets:
Other intangibles (2)
149,524
167,886
Less: Accumulated amortization
( 116,549
)
( 118,324
)
Net amortized intangible assets
32,975
49,562
Net other intangible assets
$
223,652
$
244,799
(1) The gross carrying value of trademarks and tradenames is reflected net of $ 254,887 and $ 251,551 of a ccumulated impairment charges as of December 31, 2024 and June 30, 2024, respectively.
(2) The reduction in carrying value of other intangible assets as of December 31, 2024 reflected accumulated non-cash impairment charges of $ 29,366 and $ 17,032 recognized as of December 31, 2024 and June 30, 2024, respectively.
During the three months ended December 31, 2024, the Company recorded a non-cash impairment charge of $ 15,733 within its North America reportable segment related to its personal care intangible assets (primarily Avalon Organics ® JASON ® , and Live Clean ® trademarks and tradenames) in connection with the Company’s announcement to explore strategic alternatives associated with its personal care business. The Company determined that not all criteria were met to be able to classify the personal care business as held for sale as of December 31, 2024, since the Company had not sought approval from its Board of Directors to explore strategic alternatives for such business prior to that date. However, since a plan was initiated shortly after the balance
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sheet date, the Company determined that the associated long-lived assets should be tested for recoverability as of December 31, 2024. To determine the amount of the impairment, the Company compared the carrying amount of the personal care intangible assets to their estimated fair value. The assets are part of the North America reportable segment and have a remaining aggregate carrying amount of nil as of December 31, 2024.
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. The weighted average remaining amortization period of amortized intangible assets is 8.1 years.
Amortization expense included in the consolidated statements of operations is as follows:
Three Months Ended December 31,
Six Months Ended December 31,
2024
2023
2024
2023
Amortization of acquired intangibles
$
1,753
$
1,509
$
3,933
$
3,464
9. DEBT AND BORROWINGS
Debt and borrowings consisted of the following:
December 31, 2024
June 30, 2024
Revolving credit facility
$
463,000
$
475,000
Term loans
266,800
270,550
Less: Unamortized issuance costs
( 1,340
)
( 1,680
)
Other borrowings (1)
180
222
728,640
744,092
Short-term borrowings and current portion of long-term debt (2)
7,564
7,569
Long-term debt, less current portion
$
721,076
$
736,523
(1) Includes $ 180 (June 30, 2024: $ 222 ) of finance lease obligations.
(2) Includes $ 78 (June 30, 2024: $ 85 ) of short-term finance lease obligations.
Amended and Restated Credit Agreement
On August 22, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement (as amended, 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”). 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.
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During the Second Amendment Period, loans under the Credit Agreement 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 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 is determined in accordance with a leverage-based pricing grid, as set forth in the Credit Agreement as amended by the Second Amendment. Excluding the impac t of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2024 was 7.61 %. The Company uses interest rate swaps to hedge a portion of the interest rate risk related its outstanding variable rate debt. As of December 31, 2024, the notional amount of the interest rate swaps was $ 400 million with fixed rate payments of 5.60 %. Including the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2024 was 6.55 %. Additionally, the Credit Agreement contains a Commitment Fee (as defined in the Credit Agreement) on the amount unused under the Credit Agreement ranging from 0.15 % to 0.25 % per annum, and such Commitment Fee is determined in accordance with a leverage-based pricing grid.
As of December 31, 2024, there were $ 463,000 of loans under the Revolver, $ 266,800 of Term Loans, and $ 2,775 of letters of credit outstanding under the Credit Agreement. As of December 31, 2024, $ 334,225 wa s available under the Credit Agreement, subject to compliance with the financial covenants. As of December 31, 2024, the Company was in compliance with all associated covenants.
Credit Agreement Issuance Costs
In connection with the First and Second Amendments to its Credit Agreement during the second quarter of fiscal year 2023 and first quarter of fiscal year 2024, respectively, the Company incurred debt issuance costs of approximately $ 5,841 , of which $ 5,729 was deferred. Of the total deferred costs, $ 4,198 were associated with the Revolver and are being amortized on a straight-line basis within Other assets on the consolidated balance sheets, and $ 1,531 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 six months ended December 31, 2024 was $ 11,828 and $ 24,283 , respectively. Interest paid during the three and six months ended December 31, 2023 was $ 15,956 and $ 27,388 , 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. However, to the extent that application of the estimated annual effective tax rate is not representative of the quarterly portion of actual tax expense expected to be recorded for the year in a jurisdiction, the Company determines the provision for income taxes based on actual year-to-date income (loss) which it has done for certain jurisdictions for the quarter ended December 31, 2024. 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 2.7 % and a benefit of 25.2 % for the three months ended December 31, 2024 and 2023, respectively. The effective income tax rate was an expense of 5.4 % and a benefit of 30.0 % for the six months ended December 31, 2024 and 2023, respectively. The effective income tax rates for the three and six months ended December 31, 2024 and December 31, 2023 were impacted by the geographical mix of earnings and state income taxes. The effective income tax rate for the three and six months ended December 31, 2024 was also impacted by the impairment of goodwill and personal care intangibles and movement in both federal and state valuation allowances. The effective income tax rate for the three and six months ended December 31, 2023 was impacted by tax expense related to stock-based compensation, global intangible low-taxed income, and limitations on the deductibility of executive compensation.
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11. ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table presents the changes in accumulated other comprehensive loss (“AOCL”):
Foreign
Currency
Translation
Adjustment,
Net
Deferred
Gains (Losses) 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, 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
)
Balance at June 30, 2024
$
( 147,073
)
$
9,395
$
297
$
136
$
( 137,245
)
Other comprehensive income (loss) before reclassifications
47,815
( 5,515
)
( 606
)
( 2,457
)
39,237
Amounts reclassified into (income) expense
—
( 1,749
)
719
( 371
)
( 1,401
)
Net change in accumulated other comprehensive income (loss) for the three months ended September 30, 2024 (1)
47,815
( 7,264
)
113
( 2,828
)
37,836
Balance at September 30, 2024
$
( 99,258
)
$
2,131
$
410
$
( 2,692
)
$
( 99,409
)
Other comprehensive (loss) income before reclassifications
( 64,695
)
4,357
1,190
4,831
( 54,317
)
Amounts reclassified into income
—
( 1,351
)
( 1,542
)
( 364
)
( 3,257
)
Net change in accumulated other comprehensive (loss) income for the three months ended December 31, 2024 (1)
( 64,695
)
3,006
( 352
)
4,467
( 57,574
)
Balance at December 31, 2024
$
( 163,953
)
$
5,137
$
58
$
1,775
$
( 156,983
)
(1) See Note 14, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains on hedging instruments recorded in the consolidated statements of operations during the three and six months ended December 31, 2024 and 2023.
12. STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS
The Company maintains a shareholder-approved plan, The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan (as amended, the “2022 Plan”), which was approved at the Company’s 2022 Annual Meeting of Shareholders held on November 17, 2022, and further amended at the Company’s 2024 Annual Meeting of Shareholders held on October 31, 2024. 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 shareholders. The 2022 Plan is administered by the Compensation Committee of the Company’s Board of Directors. The Company also historically granted shares under its Amended and Restated 2002 Long-Term Incentive and Stock Award Plan and its 2019 Equity Inducement Award Program. The Company’s long-term incentive program (“LTIP”) is described in Note 13,
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Stock-Based Compensation and Incentive Performance Plans, in the Notes to the Consolidated Financial Statements in the Form 10-K.
In the second quarter of fiscal 2025, a new form of awards was granted to employees that can be settled in cash or stock, at the Company’s discretion. These awards are accounted for as liability-based equity awards, since the Company has the ability and intent to settle such awards in cash.
Compensation cost and related income tax benefits recognized in the consolidated statements of operations for stock-based compensation plans were as follows:
Three Months Ended December 31,
Six Months Ended December 31,
2024
2023
2024
2023
Selling, general and administrative expense
Stock-based awards
$
3,573
$
3,376
$
6,449
$
7,118
Cash-settled awards
272
—
272
—
Total selling, general and administrative expenses
$
3,845
$
3,376
$
6,721
$
7,118
Related income tax benefit
$
190
$
398
$
473
$
854
Stock-Based Award Activity
Stock-based awards are generally issued in the form of restricted share units (“RSUs”), which are service-based awards, and performance share units (“PSUs”) that are subject to the achievement of minimum market conditions or performance goals. RSU awards to employees generally provide for vesting in equal annual installments over a period of three years, with different vesting periods in certain cases. RSU awards to non-employee directors generally provide for a vesting period of one year. For PSU awards, the following share figures are stated at target levels, and the awards outstanding as of December 31, 2024 generally provide for vesting at 0 % to 150 % or 200 % of the target level. Awards of PSUs and RSUs are issued at no cost to the recipient. A summary of all stock-based award activity for the six months ended December 31, 2024 is as follows:
Number of Shares
and Units
Weighted
Average Grant
Date Fair
Value (per share)
Non-vested RSUs and PSUs outstanding at June 30, 2024
2,165
$
15.03
Granted
1,654
$
8.98
Vested
( 524
)
$
13.65
Forfeited
( 144
)
$
26.21
Non-vested RSUs and PSUs outstanding at December 31, 2024
3,151
$
11.57
The fair value of RSUs and PSUs granted and of shares vested, and the tax benefit recognized from restricted shares vesting was as follows:
Six Months Ended December 31,
2024
2023
Fair value of RSUs and PSUs granted
$
14,855
$
19,286
Fair value of shares vested
$
4,411
$
5,081
Tax benefit recognized from restricted shares vesting
$
597
$
650
At December 31, 2024, there wa s $ 26,178 o f unrecognized stock-based compensation expense related to non-vested stock-based awards, which is expected to be recognized over a weighted average period of 1.53 years.
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Cash-Settled Award Activity
The Company grants cash-settled awards that are either service-based or subject to the achievement of minimum market conditions or performance goals. Service-based cash awards generally provide for vesting in equal annual installments over a period of three years, with different vesting periods in certain cases. For cash awards tied to minimum market conditions or performance goals, award amounts are stated at target levels with vesting at 0 % to 150 % of the target level depending on conditions or performance. Cash-based awards are issued at no cost to the recipient.
The fair value of these cash-settled awards is measured at each reporting period until the awards are settled. The performance-based cash-settled award liability at December 31, 2024 was recorded ratably based on the Company's projected achievement at the end of the measurement period. The cash incentive award liability was $ 272 at December 31, 2024, $ 180 of which is classified as a liability and reported in accrued expenses and other current liabilities, with the balance included other non-current liabilities within the consolidated balance sheet.
During the three months ended December 31, 2024, the estimated fair value of granted cash-settled awards was $ 4,749 . For the reporting period, the Company recognized a forfeiture adjustment of $ 120 . As of December 31, 2024, the total remaining non-vested cash-settled awards outstanding was $ 4,629 .
At December 31, 2024, there was $ 4,353 of unrecognized cash-based compensation expense related to non-vested awards, which is expected to be recognized over a weighted average period of 2.82 years.
13. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE
The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels. 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 December 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
$
9,968
$
—
$
9,968
$
—
Liabilities:
Derivative financial instruments
$
928
$
—
$
928
$
—
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The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2024:
Total
Quoted
prices in
active
markets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Assets:
Derivative financial instruments
$
14,982
$
—
$
14,982
$
—
Liabilities:
Derivative financial instruments
$
3,333
$
—
$
3,333
$
—
There were no transfers of financial instruments between the three levels of fair value hierarchy during the six months ended December 31, 2024 or 2023.
Derivative Instruments
The Company uses interest rate swaps to manage interest rate risk and cross-currency swaps and foreign currency exchange contracts to manage exposure to currency fluctuations. These instruments are valued using techniques like DCF analysis, which considers the contractual terms and market-based inputs such as interest rate curves and implied volatilities. The fair values of interest rate swaps are determined by netting the discounted future fixed and variable cash flows. The variable cash flows are based on expected future interest rates.
Credit valuation adjustments are made to reflect the nonperformance risk of both the Company and its counterparties. Most inputs used to value derivatives fall within Level 2 of the fair value hierarchy, but credit valuation adjustments use Level 3 inputs, such as current credit spreads. The impact of these adjustments was not significant to the overall valuation, so all derivatives as of December 31, 2024 and June 30, 2024 were classified as Level 2.
Nonrecurring Fair Value Measurements
The Company measures certain non-financial assets, such as goodwill, intangible assets, property and equipment, and right-of-use lease assets, at fair value on a nonrecurring basis. These assets are initially measured at fair value at the time of acquisition or purchase, with adjustments only for foreign currency translation. Periodically, these assets are tested for impairment by comparing their carrying values to their estimated fair values. If an asset is impaired, the Company recognizes an impairment expense equal to the excess of the carrying value over the estimated fair value.
For indefinite-lived intangible assets, the fair value is determined using the relief from royalty approach, considering factors like future growth, royalty rates, discount rates, and other variables. Fair value measurements for reporting units are estimated using a blended analysis of the DCF income approach and GPCM market approach, which involve significant management judgment and Level 3 inputs, such as economic conditions and customer demand. These measurements are performed at least annually for impairment testing. The Company bases its fair value estimates on reasonable assumptions but acknowledges their unpredictability and inherent uncertainty.
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During the three and six months ended, December 31, 2024, the Company recorded a non-cash impairment charge of $ 91,267 related to U.S. reporting unit goodwill as discussed in Note 8, Goodwill and Other Intangible Assets . As of December 31, 2024, such goodwill was classified as a Level 3 asset measured at fair value on a nonrecurring basis with an estimated fair value of $ 800,000 .
During the three and six months ended December 31, 2024, the Company recorded non-cash impairment charges of $ 17,986 for personal care intangible assets and associated property, plant and equipment as discussed in Note 6, Property and Equipment, Net, and Note 8 , Goodwill and Other Intangible Assets . As of December 31, 2024, such intangible assets and property, plant and equipment were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair values of nil.
During the three and six months ended December 31, 2023, 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 DCF analysis. As of December 31, 2023, the asset group’s property, plant and equipment were classified as Level 3 assets measured at fair value on a nonrecurring basis.
14. 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 six months ended December 31, 2024 and 2023, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in AOCL related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. During the next 12 months, the Company estimates that an additional $ 4,276 will be reclassified as a decrease to interest expense.
As of December 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
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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, at times, 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 subsequen tly reclassified in the same period during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. During the next 12 months, the Company estimates that an additional $ 70 relating to the foreign currency forward contracts will be reclassified to interest expense.
As of December 31 , 2024, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risks:
Foreign Currency Derivative
Number of Instruments
Notional Sold
Notional Purchased
Foreign currency forward contract
12
£
26,805
€
31,850
Net Investment Hedges
The Company is exposed to fluctuations in foreign exchange rates on investments it holds in its European foreign entities and their exposure to the Euro. The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in the foreign exchange rate on its foreign investment in 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 December 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 next 12 months, the Company estimates that a n additional $ 476 relating to cross currency swaps will be reclassified as a decrease to interest expense.
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As of December 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
As of December 31, 2024 and June 30, 2024, 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
December 31, 2024
June 30, 2024
December 31, 2024
June 30, 2024
Intercompany loan receivable
$
25,572
$
26,465
$
( 893
)
$
( 480
)
Designated Hedges
The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheet as of December 31, 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
$
4,263
Accrued expenses and other current liabilities
$
—
Interest rate swaps
Other noncurrent assets
3,317
Other noncurrent liabilities
—
Cross-currency swaps
Prepaid expenses and other current assets
2,388
Accrued expenses and other current liabilities
—
Cross-currency swaps
Other noncurrent assets
—
Other noncurrent liabilities
472
Foreign currency forward contracts
Prepaid expenses and other current assets
—
Accrued expenses and other current liabilities
456
Total derivatives designated as hedging instruments
$
9,968
$
928
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, 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
$
7,455
Accrued expenses and other current liabilities
$
—
Interest rate swaps
Other noncurrent assets
5,151
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
3,333
Total derivatives designated as hedging instruments
$
14,982
$
3,333
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The following table presents the pre-tax effect of the Company’s cash flow hedges, net investment hedges, and fair value hedges on AOCL for the three and six months ended December 31, 2024 and 2023:
Amount of Gain (Loss) Recognized in AOCL on Derivatives
Three Months Ended December 31,
Six Months Ended December 31,
2024
2023
2024
2023
Derivatives in cash flow hedging relationships:
Interest rate swaps
$
6,389
$
( 7,725
)
$
( 978
)
$
( 2,247
)
Foreign currency forward contracts
( 456
)
10
( 456
)
51
Derivatives in net investment hedging relationships:
Cross-currency swaps
6,579
( 3,979
)
3,297
( 1,663
)
Derivatives in fair value hedging relationships:
Cross-currency swaps
1,620
( 981
)
811
( 409
)
$
14,132
$
( 4,960
)
$
4,108
$
( 2,072
)
The following table presents the pre-tax effect of the Company’s cash flow hedges, net investment hedges, and fair value hedges on the consolidated statements of operations, recorded in interest and other financing expense, net, for the three and six months ended December 31, 2024 and 2023:
Amount of Gain Reclassified from AOCL into Income (Expense)
Three Months Ended December 31,
Six Months Ended December 31,
2024
2023
2024
2023
Derivatives in cash flow hedging relationships:
Interest rate swaps
$
1,840
$
2,393
$
4,176
$
4,675
Derivatives in net investment hedging relationships:
Cross-currency swaps
495
495
989
990
Derivatives in fair value hedging relationships:
Cross-currency swaps (1)
2,099
( 1,028
)
1,140
( 75
)
$
4,434
$
1,860
$
6,305
$
5,590
(1) Net of amount that is excluded from effectiveness testing. Amount of gain, excluded from effectiveness testing, reclassified from A OCL into income for the three months ended December 31, 2024 and 2023 was $ 123 . Amount of gain, excluded from effectiveness testing, reclassified from AOCL into income for the six months ended December 31, 2024 and 2023 was $ 247 .
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15. TRANSFORMATION PROGRAM - HAIN REIMAGINED
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 comprised of: contract termination costs, asset write-downs, employee-related costs and other transformation-related expenses.
For the three months ended December 31, 2024, expenses associated with the Hain Reimagined Program in the amount of $ 4,190 , $ 2,254 and $ 858 , were recorded in productivity and transformation costs, intangibles and long-lived asset impairment and cost of sales, respectively, on the consolidated statements of operations . For the three months ended December 31, 2023, expenses associated with the Hain Reim agined Program in the amount of $ 20,666 , $ 6,869 and $ 3,113 , were recorded in long-lived asset impairment, productivity and transformation costs and cost of sales, respectively, on the consolidated statements of operations .
For the six months ended December 31, 2024, expenses associated with the Hain Reimagined Program in the amount of $ 9,208 , $ 2,285 and $ 1,234 , were recorded in productivity and transformation costs, intangibles and long-lived asset impairment, and cost of sales, respectively, on the consolidated statements of operations. For the six months ended December 31, 2023, expenses associated with the Hain Reimagined Program in the amount of $ 20,666 , $ 13,272 and $ 6,433 , were recorded in long-lived assets impairments, productivity and transformation costs and cost of sales, respectively, on the consolidated statements of operations.
The table below sets forth expenses associated with the Hain Reimagined Program for the three and six months period ended December 31, 2024 and December 31, 2023 by reportable segments and Corporate and Other.
Three Months Ended
Six Months Ended
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
North America
$
3,410
$
25,093
$
5,651
$
28,451
Corporate and Other
3,733
5,067
5,723
10,837
International
159
488
1,353
1,083
$
7,302
$
30,648
$
12,727
$
40,371
The following table displays the activities and liability balances relating to the Hain Reimagined Program for the period ended as of December 31, 2024. The Company expects to pay the remaining accrued restructuring costs during the next 12 months.
Balance at
June 30,
2024
Charges
Amounts
Paid
Non-cash settlements/
Adjustments
Balance at
December 31,
2024
Employee-related costs
$
1,985
$
3,252
$
( 3,159
)
$
—
$
2,078
Contract termination costs
347
1,225
( 88
)
( 59
)
1,425
Asset write-downs (1)
—
2,285
—
( 2,285
)
—
Other transformation-related expenses (2)
3,988
5,965
( 6,772
)
( 1,200
)
1,981
$
6,320
$
12,727
$
( 10,019
)
$
( 3,544
)
$
5,484
(1) Represents non-cash asset write-downs including asset impairment and accelerated depreciation.
(2) Other transformation-related expenses primarily include consultancy charges related to reorganization of global functio ns and related personnel resource requirements, and rationalizing sourcing and supply chain processes.
16. 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,
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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 Securities and Exchange Commission (“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 Corrected 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 opposed, and the appeal was fully briefed as of June 3, 2024. The Court held oral argument on Plaintiffs’ appeal on December 5, 2024 and the Parties await a decision.
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.
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
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Second Amended Complaint in the Consolidated Securities Action. The parties have most recently agreed to extend the stay through the earlier of March 28, 2025 or 30 days after the Second Circuit issues a decision on Plaintiffs’ currently pending 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. Following oral argument on August 1, 2024, the Court issued an order on December 27, 2024 in which it granted the Company’s motion to dismiss with respect to Plaintiffs’ claims arising out of the alleged presence of lead, cadmium, mercury, or other substances, as well as any claims challenging the use of the “USDA Organic” seal on the Products’ labeling, and denied the Company’s motion to dismiss with respect to Plaintiffs’ claims arising out of the alleged presence of arsenic in the Products. The Company filed its answer to the Consolidated Class Action Complaint on January 23, 2025. 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, and discovery is set to commence. 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.
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 30 federal cases filed against the Company pending in the
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multi-district litigation (“MDL”). Plaintiffs filed their Master Complaint on July 15, 2024. The MDL will first proceed with general causation discovery.
On December 18, 2024, Defendants filed motions to dismiss the Master Complaint. A hearing is set for February 27, 2025.
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 Judicial Council granted the JCCP petition and on June 4, 2024, Judge Lawrence P. Riff (Los Angeles Superior Court) was assigned as trial coordination judge. All but one of the cases have been stayed.
• In one of the Los Angeles cases, Landon R. v. The Hain Celestial Group, Inc., et al., No. 23STCV24844, fact discovery has closed, and expert discovery is ongoing. Trial is currently set for July 14, 2025.
Palmquist v. The Hain Celestial Group
• 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 appealed, and on May 28, 2024, the Fifth Circuit reversed the district court’s order denying Plaintiff’s motion to remand the case and vacated the final judgement of the district court. the Company filed a petition for en banc reconsideration, which the Fifth Circuit denied. The case has been remanded to Texas state court, where it is now pending in the District Court of Brazoria County, Texas. Discovery is ongoing and the case has been set for a new trial on September 22, 2025.
• On January 7, 2025, the Company filed a Petition for a Writ of Certiorari in the United States Supreme Court.
Other Cases
• On December 19, 2024, Plaintiffs filed a new case, Graham v. Beech-Nut Nutrition Co. et al. , in the Philadelphia Court of Common Pleas. Defendants filed a Notice of Removal on January 13, 2025.
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.
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17. 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, costs associated with acquisitions, divestitures and other transactions, loss on sale of assets, impairment of goodwill, intangibles and long-lived assets 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.
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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 December 31,
Six Months Ended December 31,
2024
2023
2024
2023
Net Sales:
North America
$
229,289
$
267,671
$
460,429
$
527,725
International
182,196
186,429
345,652
351,404
$
411,485
$
454,100
$
806,081
$
879,129
Adjusted EBITDA:
North America
$
25,307
$
31,218
$
37,766
$
49,945
International
22,526
25,969
42,896
43,407
Total Reportable Segments Adjusted EBITDA
47,833
57,187
80,662
93,352
Corporate and Other
( 9,940
)
( 10,061
)
( 20,394
)
( 22,136
)
37,893
47,126
60,268
71,216
Depreciation and amortization
( 11,020
)
( 11,197
)
( 22,447
)
( 23,502
)
Equity in net loss of equity-method investees
( 588
)
( 907
)
( 743
)
( 1,405
)
Interest expense, net
( 11,993
)
( 15,333
)
( 24,988
)
( 27,956
)
(Provision) benefit for income taxes
( 2,728
)
4,249
( 6,251
)
9,628
Stock-based compensation, net
( 3,573
)
( 3,376
)
( 6,449
)
( 7,118
)
Unrealized currency gains
1,624
194
430
159
Certain litigation expenses, net (a)
( 1,020
)
( 2,091
)
( 1,847
)
( 3,615
)
Restructuring activities
Productivity and transformation costs
( 4,190
)
( 6,869
)
( 9,208
)
( 13,272
)
Plant closure related costs, net
( 858
)
( 2,302
)
( 1,234
)
( 4,143
)
Warehouse/manufacturing consolidation and other costs, net
—
( 811
)
—
( 811
)
Acquisitions, divestitures and other
Gain (loss) on sale of assets
1,626
—
( 2,308
)
( 62
)
Transaction and integration costs, net
105
( 109
)
423
( 227
)
Impairment charges
Goodwill impairment
( 91,267
)
—
( 91,267
)
—
Intangibles and long-lived asset impairment
( 17,986
)
( 20,666
)
( 18,017
)
( 21,360
)
Other
—
( 1,443
)
—
( 1,443
)
Net loss
$
( 103,975
)
$
( 13,535
)
$
( 123,638
)
$
( 23,911
)
(a) Expenses and item s relating to securities class action, baby food litigation and SEC investigation.
The Company’s net sales by product category are as follows:
Three Months Ended December 31,
Six Months Ended December 31,
2024
2023
2024
2023
Snacks
$
89,707
$
113,873
$
189,182
$
230,961
Baby & Kids
61,561
61,613
122,329
124,141
Beverages
69,814
72,584
126,490
128,732
Meal preparation
177,653
182,133
337,045
347,329
Personal care
12,750
23,897
31,035
47,966
$
411,485
$
454,100
$
806,081
$
879,129
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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 December 31,
Six Months Ended December 31,
2024
2023
2024
2023
United States
$
203,325
$
239,324
$
406,098
$
469,983
United Kingdom
134,953
138,628
257,359
259,679
Western Europe
47,243
47,801
88,293
91,725
Canada
25,964
28,347
54,331
57,742
$
411,485
$
454,100
$
806,081
$
879,129
There has b een no materia l change to Company’s total assets by segment from the amount disclosed in the Form 10-K for the fiscal year ended June 30, 2024.
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