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Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2025-02-10 · 220 added, 207 removed, 260 unchanged (62% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto for the period ended December 31, 2024 contained in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto for the period ended March 31, 2025 contained in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Forward-looking statements in this Form 10-Q are qualified by the cautionary statement included in this Form 10-Q under the sub-heading “Forward-Looking Statements” in the introduction of this Form 10-Q.

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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.

Headquartered in Hoboken, N.J., Hain Celestial’s products across snacks, baby & kids, beverages, and meal preparation 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.

Our Company’s leading brands include Garden Veggie Snacks , Terra ® chips, Garden of Eatin’ ® snacks, Hartley’s ® jelly, Earth’s Best ® Organic and Ella’s Kitchen ® baby and kids foods, Celestial Seasonings ® teas, Joya ® and Natumi ® plant-based beverages, The Greek Gods ® yogurt, Cully & Sully ® , Yorkshire Provender ® , New Covent Garden ® and Imagine ® soups, among others.

Hain Reimagined Program

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The Hain Reimagined Program is grounded on four strategic pillars:

o Concentrate our portfolio in five consumer-centric Better-For-You (“BFY”) platforms:

Snacks, Baby & Kids, Beverages, Meal Preparation, and Personal Care.

In the third quarter of 2025, the Company announced that it was exploring strategic options for its Personal Care business.

o Concentrate our portfolio in consumer-centric Better-For-You (“BFY”) platforms:

Snacks, Baby & Kids, Beverages, and Meal Preparation.

In the third quarter of 2025, we announced that we are exploring strategic options for our personal care business.

o Simplify our footprint, maintaining direct presence in five key markets – United States (“U.S.”), Canada, United Kingdom (“U.K.”), Ireland, and Western Europe – and align our global operating model and footprint, leveraging scale and realizing synergies across the business.

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The balance of cumulative pretax restructuring charges is expected to be $90 million - $100 million comprised of contract termination costs, asset write-downs, employee-related costs and other transformation-related expenses.

For the three and six months ended December 31, 2024, we

incurred approximately $7.3 million and $12.7 million respectively, of expenses associated with the Hain Reimagined Program, compared to approximately $30.6 million and $40.4 million respectively, in the corresponding periods of the prior year.

For the three and nine months ended March 31, 2025, we incurred approximately $7.7 million and $20.4, million respectively, of expenses associated with the Hain Reimagined Program,

compared to approximately $9.9 million and $50.2, million respectively, in the corresponding periods of the prior year.

Annualized pretax savings are expected to be $130 million - $150 million.

As part of the Hain Reimagined Program, the Company completed the sale of three non-core brands during the fourth quarter of fiscal 2024 and the first quarter of fiscal 2025.

We initiated actions to consolidate our personal care manufacturing footprint, which were substantially completed in the first quarter of fiscal 2025.

We initiated actions to consolidate our personal care manufacturing footprint and exit our non-strategic joint venture in India, which were substantially completed in the first quarter of fiscal 2025.

The Company also initiated actions to:

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(ii) rationalize certain product categories for greater capacity utilization, cost reduction and margin expansion;

(iii) reduce office space;

and (iv) exit its non-strategic joint venture in India as part of the Focus and Fuel pillars of the Hain Reimagined Program.

and (iii) reduce office space as part of the Focus and Fuel pillars of the Hain Reimagined Program.

Global Economic Environment

The duration and intensity of inflation fluctuations, alterations in consumer shopping and consumption patterns, shifts in geopolitical events, such as the ongoing Russia-Ukraine conflict, and the imposition of tariffs or other changes to trade policy, may lead to increased supply chain expenses, and other business impacts.

The duration and intensity of inflation fluctuations, alterations in consumer shopping and consumption patterns, and shifts in geopolitical events, such as the ongoing Russia-Ukraine conflict, may lead to increased supply chain expenses and other business impacts.

Moreover, our industry is anticipating the possibility of increased supply chain challenges, input cost increases and consumer and economic uncertainty as a result of U.S.

government tariffs and the imposition of any counter-tariffs.

We continually assess the nature and extent of these potential and evolving impacts on our business, consolidated operational results, liquidity, and capital resources.

Comparison of Three Months Ended December 31, 2024 to Three Months Ended December 31, 2023

Comparison of Three Months Ended March 31, 2025 to Three Months Ended March 31, 2024

Consolidated Results

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the three months ended December 31, 2024 and 2023 (dollars in thousands, other than per share amounts and percentages, which may not add due to rounding):

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the three months ended March 31, 2025 and 2024 (dollars in thousands, other than per share amounts and percentages, which may not add due to rounding):

Three Months Ended

December 31, 2024

December 31, 2023

March 31, 2025

March 31, 2024

Cost of sales

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Goodwill impairment

Intangibles and long-lived asset impairment

Long-lived asset and intangibles impairment

Productivity and transformation costs

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Loss before income taxes and equity in net loss of equity-method investees

Provision (benefit) for income taxes

(Benefit) provision for income taxes

Equity in net loss of equity-method investees

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* Percentage is not meaningful due to one or more numbers being negative.

Net sales for the three months ended December 31, 2024 were $411.5 million, a decrease of $42.6 million, or 9.4%, including an unfavorable impact of $16.3 million or 3.3% related to divestitures, discontinued brands and exited product categories and a favorable impact of $3.1 million or 0.7% from foreign exchange, as compared to the prior year quarter.

** Percentage is not meaningful due to significantly lower number or nil value in the comparative period.

Net sales for the three months ended March 31, 2025 were $390.4 million, a decrease of $48.0 million, or 11.0%, including an unfavorable impact of $23.3 million, or 4.8%, related to divestitures, discontinued brands and exited product categories and an unfavorable impact of $3.8 million, or 0.9%, from foreign exchange, as compared to the prior year quarter.

Organic net sales, defined as net sales adjusted to exclude the impact of foreign exchange, acquisitions, divestitures, discontinued brands and exited product categories, decreased $21.0 million, or 5.3%, from the prior year quarter.

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Further details of changes in net sales by segment are provided below in the Segment Results section.

Gross profit for the three months ended December 31, 2024 was $93.5 million, a decrease of $8.8 million, or 8.6%, as compared to the prior year quarter.

Gross profit margin of 22.7% for the three months ended December 31, 2024, however, was higher when compared with 22.5% in the prior year quarter.

The decrease in gross profit was driven by both the North America and International reportable segments, mainly due to lower sales volume and unfavorable product mix, partially offset by productivity improvements.

Gross profit for the three months ended March 31, 2025 was $84.7 million, a decrease of $12.0 million, or 12.4%, as compared to the prior year period.

Gross profit margin of 21.7% for the three months ended March 31, 2025 was lower when compared with 22.1% in the prior year period, representing a 40-basis point decrease.

The decrease in gross profit was driven primarily by the North America reportable segment, mainly due to lower sales volume and unfavorable pricing, partially offset by productivity improvements.

The International reportable segment also had a decrease in gross profit mainly driven by lower margin due to pricing and product mix, partially offset by higher volume.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $70.2 million for the three months ended December 31, 2024, a decrease of $3.8 million, or 5.1%, from $74.0 million for the prior year quarter.

The decrease was primarily due to lower employee-related expenses.

Selling, general and administrative expenses were $62.9 million for the three months ended March 31, 2025, a decrease of $3.8 million, or 5.7%, from $66.7 million for the prior year quarter.

The decrease was primarily due to a reduction in selling expenses.

Goodwill Impairment

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.

Consequently, during the three months ended December 31, 2024, the Company recorded a non-cash goodwill impairment charge of $91.3 million within the North America segment related to its U.S.

reporting unit.

See Note 8, Goodwill and Intangible Assets in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Intangibles and Long-Lived Asset Impairment

During the three months ended December 31, 2024, the Company recorded a non-cash impairment charge of $15.7 million within its North America segment related to the indefinite and definite lived intangible assets associated with its personal care brands (namely, Avalon Organics ® , JASON ® , and Live Clean ® ) and $2.3 million related to an asset group primarily comprised of certain production assets in the North America reportable segment.

During the three months ended December 31, 2023, the Company recognized a non-cash impairment charge of $20.7 million related to an asset group primarily comprised of certain production assets in the North America reportable segments.

See Note 6 , Property, Plant and Equipment, Net , and Note 13 , Financial Instruments Measured at Fair Value, in the Notes of the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

As a result of a significant reduction in actual and projected performance and cash flows, as well as a continued decline in the Company’s market capitalization during the three months ended March 31, 2025, 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 March 31, 2025.

Consequently, the Company recorded aggregate non-cash goodwill impairment charge of $110.3 million within the North America segment related to such reporting units.

See Note 9, Goodwill and Other Intangible Assets in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Long-Lived Asset and Intangibles Impairment

During the three months ended March 31, 2025, the Company recorded non-cash impairment charges of $24.0 million, primarily related to the personal care assets held for sale.

See Note 4, Assets and Liabilities Held for Sale in the Notes of the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

During the three months ended March 31, 2024, the Company recognized aggregate non-cash impairment charges of $49.4 million primarily related to ParmCrisps ® , Thinsters ® , and certain North America personal care intangible asset.

See Note 9, Goodwill and Other Intangible Assets in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Productivity and Transformation Costs

Productivity and transformation costs were $4.2 million for the three months ended December 31, 2024, a decrease of $2.7 million, or 39.0%, from $6.9 million in the prior year quarter.

The decrease was primarily due to reduced restructuring costs incurred in connection with the Hain Reimagined Program.

Productivity and transformation costs were $7.3 million for the three months ended March 31, 2025, an increase of $0.1 million, or 1.6%, from $7.2 million in the prior year quarter.

The increase was primarily due to the increase in restructuring costs incurred in connection with the Hain Reimagined Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $1.8 million for the three months ended December 31, 2024, an increase of $0.3 million from $1.5 million in the prior year quarter.

Amortization of acquired intangibles was $1.2 million for the three months ended March 31, 2025 compared to $1.3 million for the prior year quarter.

Operating Loss

Operating loss for the three months ended December 31, 2024 was $91.9 million compared to $0.8 million in the prior year quarter as a result of the items described above.

Operating loss for the three months ended March 31, 2025 was $121.1 million compared to operating loss of $27.9 million in the prior year quarter as a result of the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense, net totaled $12.8 million for the three months ended December 31, 2024, a decrease of $3.3 million, or 20.7%, from $16.1 million in the prior year quarter.

Interest and other financing expense, net totaled $11.9 million for the three months ended March 31, 2025, a decrease of $2.3 million, or 16.0%, from $14.1 million in the prior year quarter.

The decrease resulted primarily from a lower outstanding debt balance and a reduction in borrowing rates compared to the prior year quarter.

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Other Income, Net

Other income, net totaled $4.0 million for the three months ended December 31, 2024 and was primarily comprised of net foreign exchange gains of $2.4 million and the recognition of a $1.6 million pretax gain on the sale of assets related to the Company’s former Bell, CA production facility .

Other income, net was not significant for the three months ended December 31, 2023.

Other income, net totaled $1.2 million for the three months ended March 31, 2025 compared to $0.1 million in the prior year quarter.

The increase in net income was primarily comprised of net foreign exchange gains of $1.3 million.

Loss Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Loss before income taxes and equity in net loss of our equity-method investees for the three months ended December 31, 2024 was $100.7 million compared to $16.9 million in the prior year quarter.

The decrease in the loss before income taxes and equity in net loss of our equity-method investees was due to the items discussed above.

Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes includes federal, foreign, state and local income taxes.

Our income tax expense was $2.7 million for the three months ended December 31, 2024 compared to income tax benefit of $4.2 million in the prior year quarter.

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 income tax expense for the three months ended December 31, 2024 reflected foreign tax expense in certain jurisdictions, impairment of goodwill and personal care intangibles and movement in the valuation allowance for both federal and state income taxes.

The effective income tax rate for the three months ended December 31, 2023 was impacted by tax expense related to stock-based compensation, global intangible low-taxed income (“GILTI”), and limitations on the deductibility of executive compensation.

Loss before income taxes and equity in net loss of our equity-method investees for the three months ended March 31, 2025 was $134.1 million compared to $42.1 million in the prior year quarter.

The increase in the loss before income taxes and equity in net loss of our equity-method investees was due to the items discussed above.

(Benefit) Provision for Income Taxes

The (benefit) provision for income taxes includes federal, foreign, state and local income taxes.

Our income tax benefit was $0.5 million for the three months ended March 31, 2025 compared to income tax expense of $5.1 million in the prior year quarter.

The effective income tax rate was a benefit of 0.4% and an expense of 12.1% for the three months ended March 31, 2025 and 2024, respectively.

The income tax expense for the three months ended March 31, 2025 reflected foreign tax expense in certain jurisdictions, impairment of goodwill and intangibles and movement in the valuation allowance for both federal and state income taxes.

The effective income tax rate for the three months ended March 31, 2024 was impacted by tax expense related to stock-based compensation, global intangible low-taxed income, and limitations on the deductibility of executive compensation.

Equity in Net Loss of Equity-Method Investees

Equity in net loss from our equity-method investments for the three months ended December 31, 2024 was a loss of $0.6 million compared to a $0.9 million loss in the prior year quarter.

Net loss for the three months ended December 31, 2024 was $104.0 million, or $1.15 per diluted share, compared to $13.5 million, or $0.15 per diluted share, in the prior year quarter.

The decrease in net loss was attributable to the factors noted above.

Equity in net loss from our equity-method investments for each of the three months ended March 31, 2025 and March 31, 2024 was a loss of $1.0 million.

Net loss for the three months ended March 31, 2025 was $134.6 million, or $1.49 per diluted share, compared to $48.2 million, or $0.54 per diluted share, in the prior year quarter.

The increase in net loss was attributable to the factors noted above.

Adjusted EBITDA

Adjusted EBITDA was $37.9 million and $47.1 million for the three months ended December 31, 2024 and 2023, respectively, as a result of the factors discussed above.

Adjusted EBITDA was $33.6 million and $43.8 million for the three months ended March 31, 2025 and 2024, respectively, as a result of the factors discussed above.

See Reconciliation of Non-U.S.

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Segment Results

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the three months ended December 31, 2024 and 2023:

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the three months ended March 31, 2025 and 2024:

(Dollars in thousands)

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North America

Our net sales in the North America reportable segment for the three months ended December 31, 2024 were $229.3 million, a decrease of $38.4 million, or 14.3%, including an unfavorable impact of $16.2 million or 5.3% related to divestitures, discontinued brands and exited product categories, as compared to the prior year quarter.

Our net sales in the North America reportable segment for the three months ended March 31, 2025 were $222.4 million, a decrease of $45.7 million, or 17.0%, including an unfavorable impact of $22.5 million, or 6.9%, related to divestitures, discontinued brands and exited product categories, as compared to the prior year quarter.

Organic net sales decreased $21.7 million, or 9.6%, to $204.4 million from $226.1 million in the prior year quarter.

The decrease in net sales was primarily due to lower sales in the snacks, personal care, and meal preparation categories.

The decrease in organic net sales was primarily due to lower sales in the snacks and personal care categories.

The decrease in the snacks category was driven by in-store marketing activation and promotion effectiveness, while the decrease in the personal care category was due to SKU simplification initiatives.

Adjusted EBITDA for the three months ended December 31, 2024 was $25.3 million, a decrease of $5.9 million, or 18.9%, from Adjusted EBITDA of $31.2 million in the prior year quarter.

The decrease resulted primarily from pricing due to higher trade spend and deleverage on lower volume, partially offset by productivity.

The decrease in organic net sales was primarily due to lower sales in the snacks and baby & kids categories.

The decrease in the snacks category was driven by lower volume and continued category softness.

Adjusted EBITDA for the three months ended March 31, 2025 was $17.3 million, a decrease of $10.6 million, or 37.9%, from Adjusted EBITDA of $27.9 million in the prior year quarter.

The decrease was primarily driven by lower volume/mix and higher trade spend, partially offset by productivity.

Adjusted EBITDA margin was 7.8%, a 260-basis point decrease from the prior year period.

International

Our net sales in the International reportable segment for the three months ended December 31, 2024 were $182.2 million, a decrease of $4.2 million, or 2.3%, including a favorable impact of $3.8 million or 2.1% related to foreign exchange, as compared to the prior year quarter.

Organic net sales decreased $7.9 million or 4.2% to $178.2 million from $186.1 million the prior year quarter.

The decrease in net sales was primarily due to lower sales in the meal preparation, and snacks categories, partially offset by an increase in the baby & kids category.

The decrease in organic net sales was primarily due to lower sales in the meal preparation category and short-term service challenges.

The decrease in the meal preparation category was due to short-term softness in private label spreads and drizzles, partially offset by growth in yogurt and continued strong soup performance across brands.

Adjusted EBITDA for the three months ended December 31, 2024 was $22.5 million, a decrease of $3.4 million, or 13.3%, from Adjusted EBITDA of $26.0 million in the prior year quarter.

The decrease was primarily driven by a decrease in gross profit reflecting lower volume and product mix, partially offset by productivity.

Our net sales in the International reportable segment for the three months ended March 31, 2025 were $167.9 million, a decrease of $2.3 million, or 1.4%, including an unfavorable impact of $2.3 million, or 0.5%, related to foreign exchange, as compared to the prior year quarter.

Organic net sales increased $0.8 million, or 0.5%, to $169.8 million from $169.0 million the prior year quarter.

The decrease in net sales was primarily due to lower sales in the beverage and snacks categories, partially offset by an increase in the meal preparation category.

The increase in organic net sales was primarily due to increases in the meal preparation and baby & kids categories and the supply chain recovery from the service issues discussed last quarter, partially offset by lower sales in the beverage and snacks categories.

The increase in the meal preparation category was due to continued strong soup performance across brands.

Adjusted EBITDA for the three months ended March 31, 2025 was $22.2 million, a decrease of $2.4 million, or 9.7%, from Adjusted EBITDA of $24.5 million in the prior year quarter.

The decrease was primarily driven by inflation and net pricing, inclusive of own label contracts, partially offset by favorable volume/mix.

Adjusted EBITDA margin was 13.2%, a 120-basis point decrease from the prior year period.

Corporate and Other

Corporate and Other expenses remained relatively flat compared to the prior year period.

The decrease in Corporate and Other expenses primarily reflected a decrease in consulting charges.

Refer to Note 18, Segment Information , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Comparison of Six Months Ended December 31, 2024 to Six Months Ended December 31, 2023

Comparison of Nine Months Ended March 31, 2025 to Nine Months Ended March 31, 2024

Consolidated Results

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the six months ended December 31, 2024 and 2023 (amounts in thousands, other than per share data and percentages, which may not add due to rounding):

Six Months Ended

December 31, 2024

December 31, 2023

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the nine months ended March 31, 2025 and 2024 (amounts in thousands, other than per share data and percentages, which may not add due to rounding):

Nine Months Ended

March 31, 2025

March 31, 2024

Cost of sales

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Goodwill impairment

Intangibles and long-lived asset impairment

Long-lived asset and intangibles impairment

Productivity and transformation costs

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* Percentage is not meaningful due to one or more numbers being negative.

Net sales for the six months ended December 31, 2024 were $806.1 million, a decrease of $73.0 million, or 8.3%, including an unfavorable impact of $29.4 million or 3.0% related to divestitures, discontinued brands and exited product categories and a favorable impact of $6.4 million or 0.7% from foreign exchange, as compared to the prior year period.

** Percentage is not meaningful due to significantly lower number or nil value in the comparative period.

Net sales for the nine months ended March 31, 2025 were $1,196.4 million, a decrease of $121.1 million, or 9.2%, including an unfavorable impact of $61.5 million, or 4.2%, related to divestitures, discontinued brands and exited product categories and a favorable impact of $2.8 million, or 0.2%, from foreign exchange, as compared to the prior year period.

The decrease in each of net sales and organic net sales was primarily due to decline in the North America reportable segments.

Additionally, the decrease in organic net sales was comprised of a 4.3% decrease in volume/mix and a 1.6% decrease in price primarily reflecting promotional activity.

The decrease in each of net sales and organic net sales was primarily due to declines in both the North America and International reportable segments.

Additionally, the decrease in organic net sales was comprised of a 3.4% decrease in volume/mix and a 1.9% decrease in price.

Further details of changes in net sales by segment are provided below in the Segment Results section.

Gross profit for the six months ended December 31, 2024 was $175.1 million, a decrease of $11.1 million, or 6.0%, as compared to the prior year period.

Gross profit margin of 21.7% for the six months ended December 31, 2024, however, was higher when compared with 21.2% in the prior year period.

Gross profit for the nine months ended March 31, 2025 was $259.7 million, a decrease of $23.1 million, or 8.2%, as compared to the prior year period.

The gross profit margin of 21.7% was higher for the nine months ended March 31, 2025, when compared with 21.5% in the prior year period.

The decrease in gross profit was driven primarily by the North America reportable segment, mainly due to lower sales volume and unfavorable product mix, partially offset by productivity improvements.

The International reportable segment had a decrease in gross profit mainly due to increased promotional activity and product mix.

The International reportable segment had a decrease in gross profit mainly due to lower sales volume and unfavorable pricing, partially offset by favorable product mix.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $141.5 million for the six months ended December 31, 2024, a decrease of $9.6 million, or 6.5%, from $151.1 million for the prior year period.

The decrease was primarily due to lower employee-related expenses and marketing and advertising expense.

Selling, general and administrative expenses were $204.4 million for the nine months ended March 31, 2025, a decrease of $13.4 million, or 6.2%, from $217.8 million for the prior year period.

The decrease was primarily due to lower employee-related expenses, broker expenses and professional fees.

Goodwill Impairment

As discussed above, during the six months ended December 31, 2024, the Company recorded a non-cash goodwill impairment charge of $91.3 million within the North America segment related to its U.S.

reporting unit.

See Note 8, Goodwill and Intangible Assets , in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Intangibles and Long-Lived Asset Impairment

During the six months ended December 31, 2024, the Company recognized a non-cash impairment charge of $15.7 million in the North America segment related to the indefinite and definite-lived intangible assets associated with its personal care business (namely, Avalon Organics ® , JASON ® , and Live Clean ® ) and $2.3 million related to an asset group primarily comprised of certain production assets in the North America reportable segment.

During the six months ended December 31, 2023, the Company recognized a non-cash impairment charge of $20.7 million related to an asset group primarily comprised of certain production assets in the North America reportable segments.

As discussed above, during the nine months ended March 31, 2025, the Company recorded a non-cash goodwill impairment charge of $201.5 million within the North America segment related to its U.S.

and Canada reporting units.

See Note 9, Goodwill and Other Intangible Assets , in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Long-Lived Asset and Intangibles Impairment

During the nine months ended March 31, 2025, the Company recorded a non-cash impairment charge of $42.0 million, primarily related to the personal care assets held for sale and indefinite and definite-lived intangible assets associated with its personal care business.

See Note 4, Assets and Liabilities Held for Sale and Note 9, Goodwill and Other Intangible Assets in the Notes of the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q

During the nine months ended March 31, 2024 the Company recognized a $20.7 million charge related to a decline in actual and projected performance and cash flows related to its personal care business in the North America reportable segment.

See Note 7, Property, Plant and Equipment, Net , and Note 14, Fair Value Measurements , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

In addition, results for the nine months ended March 31, 2024 also included non-cash impairment charges of $42.2 million primarily related to ParmCrisps ® , Thinsters ® , and certain North America personal care intangible assets.

See Note 9, Goodwill and Other Intangible Assets , and Note 14, Fair Value Measurements , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Productivity and Transformation Costs

Productivity and transformation costs were $9.2 million for the six months ended December 31, 2024, a decrease of $4.1 million, or 30.6%, from $13.3 million in the prior year period.

Productivity and transformation costs were $16.5 million for the nine months ended March 31, 2025, a decrease of $3.9 million, or 19.3%, from $20.4 million in the prior year period.

The decrease primarily reflected a reduction in restructuring costs incurred in connection with the Hain Reimagined Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $3.9 million for the six months ended December 31, 2024, an increase of $0.4 million from $3.5 million in the prior year period.

Amortization of acquired intangibles was $5.2 million for the nine months ended March 31, 2025, an increase of $0.5 million from $4.7 million in the prior year period.

Operating Loss

Operating loss for the six months ended December 31, 2024 was $88.8 million compared to $3.1 million in the prior year period as a result of the items described above.

Operating loss for the nine months ended March 31, 2025 was $210.0 million compared to $31.0 million in the prior year period as a result of the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense, net totaled $26.5 million for the six months ended December 31, 2024, a decrease of $2.8 million, or 9.7%, from $29.4 million in the prior year period.

The decrease resulted primarily from a lower outstanding debt balance and impact of a reduction in borrowing rates compared to the prior year period.

Interest and other financing expense, net totaled $38.4 million for the nine months ended March 31, 2025, a decrease of $5.1 million, or 11.7%, from $43.5 million in the prior year period.

The decrease resulted primarily from a lower outstanding debt balance and the impact of a reduction in borrowing rates compared to the prior year period.

See Note 10 , Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Other Expense (Income), Net

Other expense, net totaled $1.3 million for the six months ended December 31, 2024, compared to $0.3 million of other income, net in the prior year period.

The change was primarily due to pretax loss of $3.9 million on the sale of ParmCrisps ® , partially offset by a $1.6 million pretax gain on the sale of assets related to the Company’s former Bell, CA production facility and $0.8 million of foreign exchange gains.

Other expense, net totaled $2.4 million for the nine months ended March 31, 2025, compared to $0.2 million of other income, net in the prior year period.

The change was primarily due to a pretax loss of $3.9 million on the sale of ParmCrisps ® , partially offset by a $1.6 million pretax gain on the sale of assets related to the Company’s former Bell, CA production facility.

Loss Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Loss before income taxes and equity in net loss of our equity-method investees was $116.6 million for the six months ended December 31, 2024, compared to a $32.1 million loss in the prior year period.

The decrease in the loss before income taxes and equity in net loss of our equity-method investees was due to the items discussed above.

Loss before income taxes and equity in net loss of our equity-method investees was $250.8 million for the nine months ended March 31, 2025, compared to a $74.3 million loss in the prior year period.

The increase in the loss before income taxes and equity in net loss of our equity-method investees was due to the items discussed above.

Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes includes federal, foreign, state and local income taxes.

Our income tax expense was $6.3 million for the six months ended December 31, 2024 compared to income tax benefit of $9.6 million in the prior year comparable period.

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 income tax expense for the six months ended December 31, 2024 reflected foreign tax expense in certain jurisdictions, impairment of goodwill and personal care intangibles and movement in the valuation allowance for both federal and state income taxes.

The effective income tax rate for the six months ended December 31, 2023 was impacted by tax expense related to stock-based compensation, GILTI, and limitations on the deductibility of executive compensation.

Our income tax provision was $5.7 million for the nine months ended March 31, 2025 compared to income tax benefit of $4.5 million in the prior year comparable period.

The effective income tax rate was an expense of 2.3% and a benefit of 6.1% for the nine months ended March 31, 2025 and 2024, respectively.

The income tax provision for the nine months ended March 31, 2025 reflected foreign tax expense in certain jurisdictions, impairment of goodwill and intangibles and movement in the valuation allowance for both federal and state income taxes.

The effective income tax rate for the nine months ended March 31, 2024 was impacted by tax expense related to stock-based compensation, global intangible low-taxed income, and limitations on the deductibility of executive compensation.

Equity in Net Loss of Equity-Method Investees

Equity in net loss from our equity-method investments for the six months ended December 31, 2024 was a loss of $0.7 million compared to a $1.4 million loss in the prior year period.

Net loss for the six months ended December 31, 2024 was $123.6 million, or $1.37 per diluted share, compared to $23.9 million, or $0.27 per diluted share, in the prior year period.

The decrease in net loss was attributable to the factors noted above.

Equity in net loss from our equity-method investments for the nine months ended March 31, 2025 was a loss of $1.7 million compared to a $2.4 million loss in the prior year period.

Net loss for the nine months ended March 31, 2025 was $258.2 million, or $2.87 per diluted share, compared to $72.1 million, or $0.80 per diluted share, in the prior year period.

The increase in net loss was attributable to the factors noted above.

Adjusted EBITDA

Adjusted EBITDA was $60.3 million and $71.2 million for the six months ended December 31, 2024 and 2023, respectively, as a result of the factors discussed above.

Adjusted EBITDA was $93.9 million and $115.0 million for the nine months ended March 31, 2025 and 2024, respectively, as a result of the factors discussed above.

See Reconciliation of Non-U.S.

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Segment Results

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the six months ended December 31, 2024 and 2023:

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the nine months ended March 31, 2025 and 2024:

(Dollars in thousands)

International

Six months ended 12/31/24

Six months ended 12/31/23

Nine months ended 3/31/25

Nine months ended 3/31/24

Adjusted EBITDA

Six months ended 12/31/24

Six months ended 12/31/23

Nine months ended 3/31/25

Nine months ended 3/31/24

Adjusted EBITDA margin

Six months ended 12/31/24

Six months ended 12/31/23

Nine months ended 03/31/25

Nine months ended 03/31/24

See the Reconciliation of Non-U.S.

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North America

Our net sales in the North America reportable segment for the six months ended December 31, 2024 were $460.4 million, a decrease of $67.3 million, or 12.8%, including an unfavorable impact of $29.0 million or 5.0% related to divestitures, discontinued brands and exited product categories, as compared to the prior year quarter.

Organic net sales decreased $37.0 million, or 7.6% to $449.2 million from $486.2 million in the prior year quarter.

The decrease in each of net sales and organic net sales was primarily due to lower sales in the snacks and personal care categories.

The decrease in net sales in the snacks category was primarily due to in-store marketing activation and promotion effectiveness while the personal care category net sales decline was primarily driven by SKU simplification initiatives.

Adjusted EBITDA for the six months ended December 31, 2024 was $37.8 million, a decrease of $12.1 million, or 24.4%, from Adjusted EBITDA of $49.9 million in the prior year quarter.

The decrease was primarily related to reduced gross profit driven by lower volume partially offset by productivity.

Our net sales in the North America reportable segment for the nine months ended March 31, 2025 were $682.8 million, a decrease of $113.0 million, or 14.2%, including an unfavorable impact of $60.1 million, or 6.4%, related to divestitures, discontinued brands and exited product categories, as compared to the prior year period.

Organic net sales decreased $50.4 million, or 7.5%, to $623.8 million from $674.1 million in the prior year period.

The decrease in net sales was primarily due to lower sales in the snacks and personal care categories.

The decrease in net sales in the snacks category reflected reduced volume and in-store marketing activation and promotion effectiveness, and the reduction in net sales in the personal care category was mainly due to SKU simplification initiatives and service issues.

The decrease in organic net sales was primarily due to lower sales in the snacks category discussed above and, to a lesser extent, reduced volume in the meal preparation category.

Adjusted EBITDA for the nine months ended March 31, 2025 was $55.1 million, a decrease of $22.8 million, or 29.2%, from Adjusted EBITDA of $77.8 million in the prior year period.

The decrease was primarily related to reduced gross profit driven by lower volume and unfavorable pricing, partially offset by productivity.

Adjusted EBITDA margin was 8.1%, a 170-basis point decrease from the prior year period.

International

Our net sales in the International reportable segment for the six months ended December 31, 2024 were $345.7 million, a decrease of $5.8 million, or 1.6%, including a favorable impact of $7.7 million or 2.2% related to foreign exchange, as compared to the prior year quarter.

Organic net sales decreased $13.0 million or 3.7% to $337.6 million from $350.6 million the prior year quarter.

The decrease in both net sales and organic net sales was primarily due to lower sales in the meal preparation and snacks categories.

The decrease in the meal preparation category was due to supply issues and short-term softness in private label spreads and drizzles, partially offset by growth in yogurt and continued strong soup performance across brands.

The decrease in the snacks category was due to lower volumes.

Adjusted EBITDA for the six months ended December 31, 2024 was $42.9 million, a slight decrease of $0.5 million, or 1.2%, from Adjusted EBITDA of $43.4 million in the prior year quarter.

Adjusted EBITDA margin was 12.4% for both the six months ended December 31, 2024 and 2023.

Our net sales in the International reportable segment for the nine months ended March 31, 2025 were $513.6 million, a decrease of $8.1 million, or 1.5%, including a favorable impact of $5.3 million or 1.0% related to foreign exchange, as compared to the prior year period.

Organic net sales decreased $12.0 million, or 2.3%, to $506.4 million from $518.5 million in the prior year period.

The decrease in both net sales and organic net sales was primarily due to lower sales in the beverage, meal preparation and snacks categories.

The decrease in the beverage and snacks categories was due to lower volumes.

The decrease in the meal preparation category was due to unfavorable pricing.

Adjusted EBITDA for the nine months ended March 31, 2025 was $65.1 million, a decrease of $2.9 million, or 4.3%, from Adjusted EBITDA of $68.0 million in the prior year period.

Adjusted EBITDA margin was 12.7%, a 30-basis point decrease from the prior year period.

Corporate and Other

The decrease in Corporate and Other expenses primarily reflected a decrease in consulting charges.

The decrease in Corporate and Other expenses primarily reflected a decrease in consulting charges primarily offset by employee-related expenses.

Refer to Note 18, Segment Information , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

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See Note 8, Leases .

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.

Credit Agreement

On December 22, 2021, the Company entered into a Fourth Amended and Restated Credit Agreement (as subsequently amended, the “Credit Agreement”).

The Credit Agreement originally provided for senior secured financing of $1,100.0 million in the aggregate, consisting of (1) $300.0 million in aggregate principal amount of term loans (the “Term Loans”) and (2) an $800.0 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and was originally comprised of a $440.0 million U.S.

revolving credit facility and $360.0 million global revolving credit facility) (the “Revolver”).

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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.

As of December 31, 2024, the Company’s consolidated secured leverage ratio, consolidated leverage ratio and consolidated interest coverage ratio were 4.06:1.00, 4.06:1.00 and 3.25:1.00, respectively, and the Company was in compliance with all associated covenants.

On August 22, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement.

See below for a description of the Third Amendment (as defined below), which amended the Company’s maximum consolidated secured leverage ratio commencing with the quarter ending June 30, 2025.

Pursuant to the Credit Agreement, the Company’s maximum consolidated leverage ratio is 6.00:1.00 and its minimum interest coverage ratio is 2.50:1.00.

As of March 31, 2025, the Company’s consolidated secured leverage ratio, consolidated leverage ratio and consolidated interest coverage ratio were 4.23:1.00, 4.23:1.00 and 3.22:1.00, respectively, and the Company was in compliance with all associated covenants.

The aforementioned financial covenants are being reported as calculated under the Credit Agreement and not pursuant to U.S.

Please refer to the Credit Agreement filed as an exhibit to our periodic reports for further information related to the calculation thereof.

For risks related to our indebtedness and compliance with these covenants, please refer to the risk factor “Any default under our credit agreement could have significant consequences” set forth in Part I, Item 1A of our most recent annual report on Form 10-K.

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 impact 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 was 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.

Our cash and cash equivalents balance increased by $1.9 million at December 31, 2024 to $56.2 million as compared to $54.3 million at June 30, 2024.

Our working capital was $259.2 million at December 31, 2024, a decrease of $16.4 million from $275.6 million at the end of fiscal 2024.

Additionally, our total debt decreased by $15.4 million at December 31, 2024 to $728.6 million as compared to $744.1 million at June 30, 2024 as a result of net repayments carried out during the period.

From the date of the Second Amendment until the date of the Third Amendment, loans under the Credit Agreement bore interest at (a) the Secured Overnight Financing Rate plus a credit spread adjustment of 0.10% (“Term SOFR”) plus 2.5% per annum or (b) the Base Rate (as defined in the Credit Agreement) plus 1.5% per annum.

On May 5, 2025, the Company entered into a Third Amendment (the “Third Amendment”) to the Credit Agreement.

Pursuant to the Third Amendment, the Company’s maximum consolidated secured leverage ratio was amended to be 4.75:1.00 for the quarter ending June 30, 2025 through (and including) the quarter ending March 31, 2026, 4.50:1.00 for the quarter ending June 30, 2026, and 4.25:1.00 for the quarter ending September 30, 2026 and thereafter.

Commencing on the date of the Third Amendment, loans under the Credit Agreement bear interest at (a) Term SOFR plus 3.00% per annum or (b) the Base Rate plus 2.00% per annum.

The Third Amendment also reduced the size of the Revolver from $800.0 million to $700.0 million in the aggregate, with the U.S.

revolving credit facility reduced from $440.0 million to $385.0 million and the global revolving credit facility reduced from $360.0 million to $315.0 million.

Excluding the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at March 31, 2025 was 7.36%.

The Company uses interest rate swaps to hedge a portion of the interest rate risk related to its outstanding variable rate debt.

As of March 31, 2025, the notional amount of the interest rate swaps was $400.0 million with fixed rate payments of 5.10%, which increased to 6.10% on May 5, 2025 in connection with the Third Amendment.

Including the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at March 31, 2025 was 6.41%.

Additionally, the Credit Agreement contains a commitment fee of 0.25% per annum on the amount unused under the Credit Agreement.

As of March 31, 2025, there were $445.0 million of loans under the Revolver, $264.9 million of Term Loans, and $2.8 million of letters of credit outstanding under the Credit Agreement.

As of March 31, 2025, $352.2 million was available under the Credit Agreement, subject to compliance with the financial covenants.

As of March 31, 2025, the Company was in compliance with all associated covenants.

Our cash and cash equivalents balance decreased by $9.9 million at March 31, 2025 to $44.4 million as compared to $54.3 million at June 30, 2024.

Our working capital was $247.7 million at March 31, 2025, a decrease of $27.9 million from $275.6 million at the end of fiscal 2024.

Additionally, our total debt decreased by $35.1 million at March 31, 2025 to $709.0 million as compared to $744.1 million at June 30, 2024 as a result of net repayments carried out during the period.

Our cash balances are held in the U.S., U.K., Canada, Western Europe, the Middle East and India.

As of December 31, 2024, substantially all cash was held outside of the U.S.

As of March 31, 2025, substantially all cash was held outside of the U.S.

We maintain our cash and cash equivalents primarily in money market funds or their equivalent.

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Cash provided (used in) by operating, investing and financing activities is summarized below.

Six Months Ended December 31,

Nine Months Ended March 31,

(Dollars in thousands)

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Effect of exchange rate changes on cash

Net increase in cash and cash equivalents

Cash provided by operating activities was $20.1 million for the six months ended December 31, 2024, a decrease of $14.6 million from cash provided by operating activities of $34.7 million in the prior year period.

This decrease in cash provided by operating activities versus the prior year period resulted primarily from higher cash utilization of $16.8 million for our working capital accounts which was mainly due to lower accounts payable and accrued expenses of $24.8 million, primarily reflecting timing of payments to suppliers in North America and cash restructuring charges, partially offset by an increase in accounts receivable recovery.

Cash provided by investing activities was $4.2 million for the six months ended December 31, 2024, an increase of $15.6 million from cash used in investing activities of 11.4 million in the prior year period.

The increase in cash provided by investing activities was primarily due to an increase in proceeds from asset sales of $12.4 million, primarily related to the sale of ParmCrisps ® , and the receipt of a $2.6 million dividend from Hutchison Hain Organic Holdings Limited, a joint venture with HUTCHMED (China) Limited.

Cash used in financing activities was $17.1 million for the six months ended December 31, 2024, a decrease of $7.0 million compared to $24.1 million in the prior year period.

The decrease in cash used in financing activities was primarily due to lower net borrowings during the six months ended December 31, 2024.

Net decrease in cash and cash equivalents

Cash provided by operating activities was $24.8 million for the nine months ended March 31, 2025, a decrease of $52.2 million from cash provided by operating activities of $77.0 million in the prior year period.

This decrease in cash provided by operating activities versus the prior year period resulted primarily from higher cash utilization of $54.1 million for our working capital accounts, which was mainly due to higher inventory and a reduced benefit from accounts payable and accrued expenses, partially offset by an increase in accounts receivable recovery.

Cash used by investing activities was $0.4 million for the nine months ended March 31, 2025, a decrease of $22.9 million from cash used in investing activities of $23.2 million in the prior year period.

The decrease in cash used by investing activities was

primarily due to an increase in proceeds from asset sales of $12.3 million, primarily related to the sale of ParmCrisps ® , and the receipt of a $2.6 million dividend from Hutchison Hain Organic Holdings Limited, a joint venture with HUTCHMED (China) Limited.

Cash used in financing activities was $36.5 million for the nine months ended March 31, 2025, a decrease of $19.6 million compared to $56.1 million in the prior year period.

The decrease in cash used in financing activities was primarily due to lower net borrowings during the nine months ended March 31, 2025.

Free Cash Flow

Our free cash flow was $8.0 million for the six months ended December 31, 2024, a decrease of $14.0 million from free cash flow of $22.0 million in the six months ended December 31, 2023.

Our free cash flow was $5.7 million for the nine months ended March 31, 2025, a decrease of $46.5 million from free cash flow of $52.2 million in the nine months ended March 31, 2024.

The period-over-period change resulted primarily from a decrease in cash flows from operations of $52.2 million driven by the reasons explained above, partially offset by lower capital expenditures.

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

During the six months ended December 31, 2024, the Company did not repurchase any shares under the repurchase program.

As of December 31, 2024, the Company had $173.5 million of remaining authorization under the share repurchase program.

During the nine months ended March 31, 2025, the Company did not repurchase any shares under the repurchase program.

As of March 31, 2025, the Company had $173.5 million of remaining authorization under the share repurchase program.

Reconciliation of Non-U.S.

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Organic Net Sales

As noted above, we define organic net sales as net sales excluding the impact of acquisitions, divestitures, discontinued brands and exited product categories and foreign exchange.

As noted above, we define organic net sales as net sales excluding the impact of acquisitions, divestitures, held for sale businesses, discontinued brands, exited product categories and foreign exchange.

To adjust organic net sales for the impact of acquisitions, the net sales of an acquired business are excluded from fiscal quarters constituting or falling within the current period and prior period where the applicable fiscal quarter in the prior period did not include the acquired business for the entire quarter.

To adjust organic net sales for the impact of divestitures, discontinued brands and exited product categories, the net sales of a divested business, discontinued brand or exited product category are excluded from all periods.

To adjust organic net sales for the impact of divestitures, held for sale businesses, discontinued brands and exited product categories, the net sales of a divested business, held for sale business, discontinued brand or exited product category are excluded from all periods.

To adjust organic net sales for the impact of foreign exchange, current period net sales for entities reporting in currencies other than the U.S.

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International

Net sales - Three months ended December 31, 2024

Impact of divestitures, discontinued brands and exited product categories

Net sales - Three months ended March 31, 2025

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Impact of foreign currency exchange

Organic net sales - Three months ended December 31, 2024

Net sales - Three months ended December 31, 2023

Impact of divestitures, discontinued brands and exited product categories

Organic net sales - Three months ended December 31, 2023

Organic net sales - Three months ended March 31, 2025

Net sales - Three months ended March 31, 2024

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Organic net sales - Three months ended March 31, 2024

Net sales decline

Impact of divestitures, discontinued brands and exited product categories

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Impact of foreign currency exchange

Organic net sales decline

Net sales - Six months ended December 31, 2024

Impact of divestitures, discontinued brands and exited product categories

Organic net sales (decline) growth

Net sales - Nine months ended March 31, 2025

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Impact of foreign currency exchange

Organic net sales - Six months ended December 31, 2024

Net sales - Six months ended December 31, 2023

Impact of divestitures, discontinued brands and exited product categories

Organic net sales - Six months ended December 31, 2023

Organic net sales - Nine months ended March 31, 2025

Net sales - Nine months ended March 31, 2024

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Organic net sales - Nine months ended March 31, 2024

Net sales decline

Impact of divestitures, discontinued brands and exited product categories

Impact of divestitures, held for sale businesses, discontinued brands and exited product categories

Impact of foreign currency exchange

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Adjusted EBITDA

The Company defines Adjusted EBITDA as net loss before 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 expenses, net, plant closure related costs, net, productivity and transformation costs, costs associated with acquisitions, divestitures and other transactions, (gain) loss on sale of assets, impairment of goodwill, intangibles and long-lived assets and other adjustments.

The Company defines Adjusted EBITDA as net loss before 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 expenses, net, plant closure related costs, net, warehouse and manufacturing consolidation and other costs, net, productivity and transformation costs, costs associated with acquisitions, divestitures and other transactions, (gains) losses on sales of assets, goodwill impairment, long-lived asset and intangibles impairment and other adjustments.

The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition.

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A reconciliation of net loss to Adjusted EBITDA is as follows:

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

(Dollars in thousands)

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Interest expense, net

Provision (benefit) for income taxes

(Benefit) provision for income taxes

Stock-based compensation, net

Unrealized currency gains

Unrealized currency losses

Certain litigation expenses, net (a)

1 unchanged sentence

Productivity and transformation costs

Plant closure related costs, net

Warehouse/manufacturing consolidation and other costs, net

Plant closure related costs, net

Acquisitions, divestitures and other

3 unchanged sentences

Goodwill impairment

Intangibles and long-lived asset impairment

Long-lived asset and intangibles impairment

Adjusted EBITDA

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A reconciliation from cash flows provided by operating activities to Free Cash Flow is as follows:

Six Months Ended December 31,

Nine Months Ended March 31,

(Dollars in thousands)

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Impairments to goodwill and other intangible assets may be caused by factors outside our control, such as increasing competitive pricing pressures, changes in discount rates based on changes in cost of capital (i.e., as a result of changes in interest rates or other conditions), lower than expected sales and profit growth rates, changes in industry EBITDA multiples, the inability to quickly replace lost co-manufacturing business, or the bankruptcy of a significant customer, among others.

As of December 31, 2024, we performed an assessment of factors to determine whether it was more likely than not that the fair value of our reporting units within both of the North America and International reportable segments was less than its respective carrying amount, including goodwill.

We concluded that, due to 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, an interim quantitative impairment test for goodwill for both its U.S.

and Canada reporting units was warranted.

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.

As of March 31, 2025, 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.

and Canada reporting units within the North America reportable segment as of March 31, 2025.

For the U.K., 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, while noting a recent decline in performance within the U.K.

reporting unit.

During the three months ended March 31, 2025, the Company conducted interim quantitative impairment tests of goodwill for the U.S.

and Canada reporting units.

The fair values were estimated using a blended approach of the DCF income approach and the 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 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.

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 March 31, 2025, the U.S.

reporting unit’s carrying amount exceeded its estimated fair value of $690,000, resulting in the recognition of a non-cash impairment charge of $88,712 to reduce the carrying value of the U.S.

reporting unit goodwill to $450,503.

Aggregate goodwill impairment charges associated with the U.S.

reporting unit were $179,979 for the nine months ended March 31, 2025.

The Canada reporting unit’s carrying amount exceeded its estimated fair value of $28,549, resulting in the recognition of a non-cash impairment charge of $21,539 to reduce the carrying value of the Canada reporting unit goodwill to $17,549.

The goodwill related to the U.S., Canada and U.K.

reporting units is at risk of potential impairment if the fair value of these reporting units, and their 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.

See Note 8, Goodwill and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

As of December 31, 2024, we considered our market capitalization and our net book value and performed a market capitalization reconciliation with the expectation that the market capitalization should reconcile within a reasonable range to the sum of the fair values of the Company's individual reporting units.

As of March 31, 2025, we considered our market capitalization and our net book value and performed a market capitalization reconciliation with the expectation that the market capitalization should reconcile within a reasonable range to the sum of the fair values of the Company's individual reporting units.

Upon performing the market capitalization reconciliation, we noted a reasonable reconciliation between the sum of the reporting unit fair values and the Company’s market capitalization once adjusted for the impact of corporate costs not allocated to the reporting units.

7 unchanged sentences

Quantitative and Qua litative Disclosures About Market Risk

There have been no material changes from the discussion of the material factors contained in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on August 27, 2024.

There have been no significant changes in market risk from those addressed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 during the nine months ended March 31, 2025.

See the information set forth in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Controls an d Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.

Our disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Based on this review, our CEO and CFO have concluded that the disclosure controls and procedures for the Company were effective as of December 31, 2024.

Our Interim Chief Executive Officer (“Interim CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.

Our disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our Interim CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Based on this review, our Interim CEO and CFO have concluded that the disclosure controls and procedures for the Company were effective as of March 31, 2025.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the three months ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal controls over financial reporting that occurred during the three months ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

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What changed 10-Q

Item 2. Management’s Discussion and Analysis