Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS
THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, 2025 AND JUNE 30, 2025
(In thousands, except par values)
September 30,
June 30,
2025
2025
ASSETS
Current assets:
Cash and cash equivalents
$
47,886
$
54,355
Accounts receivable, less allowance for doubtful accounts of $ 1,298 and $ 1,337 , respectively
170,731
154,440
Inventories
229,498
248,731
Prepaid expenses and other current assets
46,131
43,169
Assets held for sale
28,773
29,603
Total current assets
523,019
530,298
Property, plant and equipment, net
255,992
264,730
Goodwill
498,159
500,961
Trademarks and other intangible assets, net
207,321
210,905
Operating lease right-of-use assets, net
69,993
71,171
Other assets
28,415
25,213
Total assets
$
1,582,899
$
1,603,278
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
175,667
$
188,307
Accrued expenses and other current liabilities
81,321
68,426
Current portion of long-term debt
7,647
7,653
Liabilities related to assets held for sale
12,202
12,987
Total current liabilities
276,837
277,373
Long-term debt, less current portion
708,563
697,168
Deferred income taxes
41,404
40,332
Operating lease liabilities, noncurrent portion
63,798
65,284
Other noncurrent liabilities
47,308
48,116
Total liabilities
1,137,910
1,128,273
Commitments and contingencies (Note 17)
Stockholders’ equity:
Preferred stock - $ .01 par value, authorized 5,000 shares; issued and outstanding: none
—
—
Common stock - $ .01 par value, authorized 150,000 shares; issued: 112,584 and 112,491 shares, respectively; outstanding: 90,344 and 90,284 shares, respectively
1,126
1,125
Additional paid-in capital
1,240,405
1,238,402
Retained earnings
26,053
46,678
Accumulated other comprehensive loss
( 92,378
)
( 81,053
)
1,175,206
1,205,152
Less: Treasury stock, at cost, 22,240 and 22,207 shares, respectively
( 730,217
)
( 730,147
)
Total stockholders’ equity
444,989
475,005
Total liabilities and stockholders’ equity
$
1,582,899
$
1,603,278
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 MONTHS ENDED September 30, 2025 AND 2024
(In thousands, except per share amounts)
Three Months Ended September 30,
2025
2024
Net sales
$
367,883
$
394,596
Cost of sales
299,805
312,986
Gross profit
68,078
81,610
Selling, general and administrative expenses
65,512
71,328
Productivity and transformation costs
8,219
5,018
Amortization of acquired intangible assets
1,212
2,180
Long-lived asset impairment
—
31
Operating (loss) income
( 6,865
)
3,053
Interest and other financing expense, net
15,499
13,746
Other (income) expense, net
( 656
)
5,292
Loss before income taxes and equity in net loss of equity-method investees
( 21,708
)
( 15,985
)
(Benefit) provision for income taxes
( 1,256
)
3,523
Equity in net loss of equity-method investees
173
155
Net loss
$
( 20,625
)
$
( 19,663
)
Net loss per common share:
Basic
$
( 0.23
)
$
( 0.22
)
Diluted
$
( 0.23
)
$
( 0.22
)
Shares used in the calculation of net loss per common share:
Basic
90,309
89,861
Diluted
90,309
89,861
See notes to consolidated financial statements.
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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED )
FOR THE THREE MONTHS ENDED September 30, 2025 AND 2024
(In thousands)
Three Months Ended
September 30, 2025
September 30, 2024
Pretax
amount
Tax
benefit
(expense)
After tax
amount
Pretax
amount
Tax
benefit
(expense)
After tax
amount
Net loss
$
( 20,625
)
$
( 19,663
)
Other comprehensive (loss) income:
Foreign currency translation adjustments before reclassifications
$
( 10,798
)
$
-
( 10,798
)
$
47,815
$
-
47,815
Change in deferred losses on cash flow hedging instruments
( 1,008
)
230
( 778
)
( 9,702
)
2,438
( 7,264
)
Change in deferred gains on fair value hedging instruments
52
( 14
)
38
151
( 38
)
113
Change in deferred gains (losses) on net investment hedging instruments
287
( 74
)
213
( 3,777
)
949
( 2,828
)
Total other comprehensive (loss) income
$
( 11,467
)
$
142
$
( 11,325
)
$
34,487
$
3,349
$
37,836
Total comprehensive (loss) income
$
( 31,950
)
$
18,173
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 MONTHS ENDED September 30, 2025
(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, 2025
112,491
$
1,125
$
1,238,402
$
46,678
22,207
$
( 730,147
)
$
( 81,053
)
$
475,005
Net loss
( 20,625
)
( 20,625
)
Other comprehensive loss
( 11,325
)
( 11,325
)
Issuance of common stock pursuant to stock-based compensation plans
93
1
1
Employee shares withheld for taxes
33
( 70
)
( 70
)
Stock-based compensation expense
2,003
2,003
Balance at September 30, 2025
112,584
$
1,126
$
1,240,405
$
26,053
22,240
$
( 730,217
)
$
( 92,378
)
$
444,989
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 MONTHS ENDED SEPTEMBER 30, 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
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 THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(In thousands)
Three Months Ended September 30,
2025
2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
( 20,625
)
$
( 19,663
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
15,411
11,427
Deferred income taxes
160
( 671
)
Equity in net loss of equity-method investees
173
155
Stock-based compensation, net
2,003
2,876
Long-lived asset impairment
—
31
(Gain) loss on sale of assets
( 886
)
3,934
Other non-cash items, net
232
1,085
(Decrease) increase in cash attributable to changes in operating assets and liabilities:
Accounts receivable
( 15,707
)
( 3,926
)
Inventories
16,210
2,282
Other current assets
( 4,103
)
( 2,471
)
Other assets and liabilities
( 2,858
)
579
Accounts payable and accrued expenses
1,510
( 6,425
)
Net cash used in operating activities
( 8,480
)
( 10,787
)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
( 5,227
)
( 5,757
)
Proceeds from sale of assets
13
12,066
Net cash (used in) provided by investing activities
( 5,214
)
6,309
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under bank revolving credit facility
68,000
59,000
Repayments under bank revolving credit facility
( 54,500
)
( 61,000
)
Repayments under term loan
( 1,875
)
( 1,875
)
Payments of other debt, net
( 2,511
)
( 21
)
Employee shares withheld for taxes
( 70
)
( 302
)
Net cash provided by (used in) financing activities
9,044
( 4,198
)
Effect of exchange rate changes on cash
( 1,819
)
11,222
Net (decrease) increase in cash and cash equivalents
( 6,469
)
2,546
Cash and cash equivalents at beginning of period
54,355
54,307
Cash and cash equivalents at end of period
$
47,886
$
56,853
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, 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 ® 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.
Strategic Review
We are focused on five actions to win in the marketplace and drive growth: aggressively streamlining our portfolio, accelerating brand renovation and innovation, implementing price increases along with broader revenue growth management, driving productivity and working capital efficiency, and enhancing our digital capabilities, inclusive of ecommerce.
During the fourth quarter of fiscal year 2025, we announced that our Board of Directors was conducting a comprehensive review of the Company’s portfolio with the assistance of our independent financial advisor. The Board is considering a broad range of strategic options to enhance value. Also, in the third quarter of fiscal year 2025, we announced that we were exploring strategic alternatives regarding our personal care business to focus on our portfolio of better-for-you food and beverages.
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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 generally accepted accounting principles 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, 2025 (the “Form 10-K”). The amounts as of and for the periods ended June 30, 2025 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 months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2026. Please refer to the Notes to the Consolidated Financial Statements as of June 30, 2025 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 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 $ 73,689 and $ 56,959 during the three months ended September 30, 2025 and 2024, respectively. The incremental cost of financing receivables under these arrangements is included in selling, general and administrative expenses on the Company’s consolidated statements of operations. The proceeds from the sale of receivables are included in cash used in operating activities on the consolidated statements of cash flows.
Recently Adopted Accounting Pronouncements
There have been no new accounting standards adopted since the filing of the Form 10-K for the fiscal year ended June 30, 2025 that have significance, or potential significance, to the interim condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-07 “Derivatives and Hedging and Revenue from Contracts with Customers, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606)”. The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. The amendments are effective for fiscal years beginning after December 15, 2026, and interim reporting
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periods, with early adoption permitted. The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40) — Targeted Improvements to the Accounting for Internal-Use Software”, which modernizes the guidance in Accounting Standards Codification (“ASC”) 350-40, Intangibles — Goodwill and Other — Internal-Use Software, to better align with current software development practices, including agile methodologies. The amendments are effective for fiscal years beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, “Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which will provide a practical expedient in developing reasonable and supportable forecasts as part of estimating expected credit losses: all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments are effective for fiscal years beginning after December 15, 2025 and for interim periods within fiscal years beginning after December 15, 2025. The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements.
In November 2024, the FASB issued 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.
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 September 30,
2025
2024
Numerator:
Net loss
$
( 20,625
)
$
( 19,663
)
Denominator:
Basic and diluted weighted average shares outstanding
90,309
89,861
Basic and diluted net loss per common share
$
( 0.23
)
$
( 0.22
)
Due to the Company’s net loss in each of the three months ended September 30, 2025 and September 30, 2024, 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 or performance goals and such conditions or goals had not been achieved during the respective periods.
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4. ASSETS AND LIABILITIES HELD FOR SALE
During the third quarter of fiscal year 2025, the Company announced that it was exploring strategic alternatives regarding its personal care (“PC”) business to focus on its portfolio of better-for-you food and beverages. The Company determined that its PC business was held for sale and ascribed an aggregate $ 11,000 of goodwill from its U.S. and Canada reporting units, which comprise the North America reportable segment, to the PC business. The operating results of the business were not significant. The Company anticipates entering into a definitive agreement to sell these assets within 12 months from when it was initially classified as held for sale.
During the three months ended September 30, 2025, due to changes in the carrying value of the net assets compared to estimated fair value less cost to dispose, the Company recorded a reversal of non-cash charges of $ 1,113 to the allowance for reduction of assets held for sale, reducing the balance to $ 25,730 . The reversal was reflected within other (income) expense, net on the consolidated statements of operations. The following table presents the major classes of assets and liabilities of the PC business classified as held for sale:
September 30,
2025
June 30, 2025
ASSETS
Accounts receivable, net
$
5,085
$
7,121
Inventories
31,227
30,347
Prepaid expenses and other current assets
846
1,112
Property, plant and equipment, net
916
918
Goodwill
11,000
11,164
Other noncurrent assets
50
80
Operating lease right-of-use assets, net
5,379
5,704
Allowance for reduction of assets held for sale
( 25,730
)
( 26,843
)
Assets held for sale
$
28,773
$
29,603
LIABILITIES
Accounts payable
$
5,206
$
5,432
Operating lease liabilities
5,441
5,793
Accrued expenses and other current liabilities
1,555
1,762
Liabilities held for sale
$
12,202
$
12,987
5. 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 three months ended September 30, 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, net.
6. INVENTORIES
Inventories consisted of the following:
September 30, 2025
June 30, 2025
Finished goods
$
164,824
$
177,990
Raw materials, work-in-progress, and packaging
64,674
70,741
$
229,498
$
248,731
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7. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net consisted of the following:
September 30, 2025
June 30, 2025
Land
$
11,815
$
11,926
Buildings and improvements
61,177
61,788
Machinery and equipment
348,064
347,867
Computer hardware and software
57,262
56,466
Furniture and fixtures
22,387
22,599
Leasehold improvements
38,726
38,680
Construction in progress
11,676
12,692
551,107
552,018
Less: Accumulated depreciation
295,115
287,288
$
255,992
$
264,730
Depreciation expense for the three months ended September 30, 2025 and 2024 was $ 11,444 and $ 7,910 , respectively.
8. 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. 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 is 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 months ended September 30, 2025 and 2024 were as follows:
Three Months Ended
September 30, 2025
September 30, 2024
Operating lease expenses
$
3,481
$
4,109
Finance lease expenses
66
37
Variable lease expenses
25
173
Short-term lease expenses
311
426
Total lease expenses
$
3,883
$
4,745
9. 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, 2025 (1)
$
312,321
$
188,640
$
500,961
Translation
—
( 2,802
)
( 2,802
)
Balance as of September 30, 2025
$
312,321
$
185,838
$
498,159
(1) The total carrying value of goodwill is reflected net of $ 563,159 of accumulated impairment charges, of which $ 365,379 is related to the North America reportable segment and $ 197,780 is related to the International reportable segment.
As of September 30, 2025, the Company performed an assessment of factors to determine whether it was more likely than not that the fair value of its reporting units was less than its carrying amount, including goodwill. The Company concluded that there were no events or circumstances that warranted an interim quantitative impairment test for goodwill during the three months ended September 30, 2025. As of September 30, 2025, goodwill associated with the U.S. and U.K. reporting units had a carrying value of $ 312,321 and $ 114,021 , respectively. The goodwill related to the U.S. and U.K. reporting units are at risk of potential
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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.
Other Intangible Assets
The following table includes the gross carrying amount and accumulated amortization, where applicable, for intangible assets, excluding goodwill:
September 30, 2025
June 30, 2025
Non-amortized intangible assets:
Trademarks and tradenames (1)
$
177,261
$
179,282
Amortized intangible assets:
Other intangibles (2)
157,174
159,162
Less: Accumulated amortization
( 127,114
)
( 127,539
)
Net amortized intangible assets
30,060
31,623
Net other intangible assets
$
207,321
$
210,905
(1) The gross carrying value of trademarks and tradenames is reflected net of accumulated impairment charges of $ 275,990 as of each of September 30, 2025 and June 30, 2025.
(2) The gross carrying value of other intangible assets is reflected net of accumulated non-cash impairment charges of $ 30,326 as of each of September 30, 2025 and June 30, 2025 .
There were no events or circumstances that warranted an interim impairment test for indefinite-lived intangible assets during the three months ended September 30, 2025 or 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 7.9 years.
Amortization expense included in the consolidated statements of operations is as follows:
Three Months Ended September 30,
2025
2024
Amortization of acquired intangibles
$
1,212
$
2,180
10. DEBT AND BORROWINGS
Debt and borrowings consisted of the following:
September 30, 2025
June 30, 2025
Revolving credit facility
$
464,000
$
450,500
Term loans
253,675
255,550
Less: Unamortized issuance costs
( 2,033
)
( 1,844
)
Other borrowings (1)
568
615
716,210
704,821
Short-term borrowings and current portion of long-term debt (2)
7,647
7,653
Long-term debt, less current portion
$
708,563
$
697,168
(1) Includes $ 568 (June 30, 2025: $ 615 ) of finance lease obligations.
(2) Includes $ 147 (June 30, 2025: $ 153 ) of short-term finance lease obligations.
Amended and Restated Credit Agreement
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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 $ 1,100,000 in the aggregate, consisting of (1) $ 300,000 in aggregate principal amount of term loans (the “Term Loans”) and (2) an $ 800,000 senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and was originally comprised of a $ 440,000 U.S. revolving credit facility and $ 360,000 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. On August 22, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement. Pursuant to the Second Amendment, the Company’s maximum consolidated secured leverage ratio was amended to be 5.00 :1.00 until September 30, 2023, 5.25 :1.00 until December 31, 2023, 5.00 :1.00 until December 31, 2024, and 4.25 :1.00 thereafter. See below for a description of the Third Amendment and Fourth Amendment (each as defined below). Following the Fourth Amendment, the Company’s maximum consolidated secured leverage ratio under the Credit Agreement was 5.00 :1.00 for the quarter ended June 30, 2025 and is 5.50 :1.00 for the quarter ending September 30, 2025 and thereafter. Pursuant to the Credit Agreement, the Company’s maximum consolidated leverage ratio is 6.00 :1.00, and, through June 30, 2025, its minimum interest coverage ratio was 2.50 :1.00.
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 bore 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 $ 800,000 to $ 700,000 in the aggregate, with the U.S. revolving credit facility reduced from $ 440,000 to $ 385,000 and the global revolving credit facility reduced from $ 360,000 to $ 315,000 .
On September 11, 2025, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement. Pursuant to the Fourth Amendment, (x) the Company’s maximum consolidated secured leverage ratio was amended to be 5.00 :1.00 for the quarter ending June 30, 2025 and 5.50 :1.00 for the quarter ending September 30, 2025 and thereafter, (y) the Company’s minimum consolidated interest coverage ratio was amended to be 2.00 :1.00 for the quarter ending September 30, 2025 and thereafter and (z) a covenant was added requiring the Company to maintain a minimum Consolidated EBITDA (as such term is defined in the Credit Agreement as amended by the Fourth Amendment) of (i) $ 17,000 for the quarter ending September 30, 2025 and (ii) $ 52,000 for the cumulative two quarters ending September 30, 2025 and on December 31, 2025. The aforementioned financial covenants use financial measures that are defined under the Credit Agreement and not pursuant to U.S. GAAP.
Commencing on the date of the Fourth Amendment, loans under the Credit Agreement bear interest at (a) Term SOFR plus 4.00 % per annum or (b) the Base Rate plus 3.00 % per annum.
The Fourth Amendment also reduced the size of the Revolver from $ 700,000 to $ 600,000 in the aggregate, with the U.S. revolving credit facility reduced from $ 385,000 to $ 330,000 and the global revolving credit facility reduced from $ 315,000 to $ 270,000 .
Excluding the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at September 30, 2025 was 7.78 %. The Company uses interest rate swaps to hedge a portion of the interest rate risk related to its
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outstanding variable rate debt. As of September 30, 2025, the notional amount of the interest rate swaps was $ 400,000 with fixed rate payments of 7.12 %. Including the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at September 30, 2025 was 7.31 %. Additionally, the Credit Agreement contains a commitment fee of 0.25 % per annum on the amount unused under the Credit Agreement.
As of September 30, 2025, there were $ 464,000 of loans outstanding under the Revolver, $ 253,675 of outstanding Term Loans, and $ 2,667 of letters of credit outstanding under the Credit Agreement. As of September 30, 2025 and June 30, 20 25, $ 133,333 and $ 246,725 , respectively, was available under the Credit Agreement, subject to compliance with the financial covenants. As of September 30, 2025, the Company was in compliance with all associated covenants.
Credit Agreement Issuance Costs
In connection with the Fourth Amendment to its Credit Agreement during the first quarter of fiscal year 2026, the Company incurred debt issuance costs of approximately $ 2,846 , of which $ 2,529 was deferred. Of the total deferred costs, $ 1,996 were associated with the Revolver and are being amortized on a straight-line basis within Other assets on our Consolidated Balance Sheets, and $ 533 are being amortized on a straight-line basis, which approximates the effective interest method, as an adjustment to the carrying amount of the Term Loans as a component of Interest and other financing expense, net over the term of the Credit Agreement. Further, the Fourth Amendment decreased the borrowing capacity of the Revolver, resulting in write-off of $ 604 of previously capitalized deferred costs.
Interest paid during the three months ended September 30, 2025 and September 30, 2024 was $ 13,602 and $ 12,455, respectively.
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11. 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 has been the case for certain jurisdictions for the quarter ended September 30, 2025. 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 a benefit of 5.8 % and an expense of 22.0 % for the three months ended September 30, 2025 and 2024, respectively. The income tax benefit for the three months ended September 30, 2025 reflected foreign tax benefit in certain jurisdictions and an increase in the valuation allowance for both federal and state income taxes. The income tax expense for the three months ended September 30, 2024 reflected foreign tax expense in certain jurisdictions and an increase in the valuation allowance for both federal and state income taxes.
On July 4, 2025, new U.S. tax legislation, the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the tax effects of changes in tax rates and tax law be recognized in the period in which the legislation is enacted. The Company completed its initial assessment of OBBBA for the quarter ended September 30, 2025. For the provisions effective in fiscal 2026, there was no material impact to the Company’s effective tax rate for the quarter ended September 30, 2025. The Company will continue to evaluate the impact of the new legislation on its consolidated financial statements as additional guidance is issued.
Many countries where the Company operates have adopted a global minimum corporate income tax as introduced by the Organization for Economic Cooperation and Development (“OECD”). This new minimum tax was not significant for the quarter ended September 30, 2025.
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12. ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table presents the changes in accumulated other comprehensive loss (“AOCL”):
Foreign
Currency
Translation
Adjustment,
Net
Deferred
(Losses) Gains on
Cash Flow
Hedging
Instruments,
Net
Deferred
(Losses) Gains on
Fair Value
Hedging
Instruments,
Net
Deferred
(Losses) Gains on
Net
Investment
Hedging
Instruments,
Net
Total
Balance at June 30, 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
)
Balance at June 30, 2025
$
( 75,749
)
$
2,583
$
184
$
( 8,071
)
$
( 81,053
)
Other comprehensive (loss) income before reclassifications
( 10,798
)
320
142
575
( 9,761
)
Amounts reclassified into income
—
( 1,098
)
( 104
)
( 362
)
( 1,564
)
Net change in accumulated other comprehensive (loss) income for the three months ended September 30, 2025 (1)
( 10,798
)
( 778
)
38
213
( 11,325
)
Balance at September 30, 2025
$
( 86,547
)
$
1,805
$
222
$
( 7,858
)
$
( 92,378
)
(1) See Note 15, Derivativ es and Hedging Activities, for the amounts reclassified into income for deferred gains on hedging instruments recorded in the consolidated statements of operations during the three months ended September 30, 2025 and 2024.
13. STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS
The Company maintains a stockholder-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 each of the Company’s 2024 Annual Meeting of Shareholders held on October 31, 2024 and the Company’s 2025 Annual Meeting of Stockholders held on October 30, 2025. The 2022 Plan permits the Company to continue making equity-based and other incentive awards in a manner intended to properly incentivize its employees, directors, consultants and other service providers by aligning their interests with the interests of the Company’s stockholders. The 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 14, 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 (expense) benefit recognized in the consolidated statements of operations for stock-based compensation plans were as follows:
Three Months Ended September 30,
2025
2024
Selling, general and administrative expense
Stock-based awards
$
2,003
$
2,876
Cash-settled awards
106
—
Total selling, general and administrative expense
2,109
2,876
Related income tax (expense) benefit
$
( 16
)
$
283
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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 September 30, 2025 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 three months ended September 30, 2025 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, 2025
2,624
$
9.09
Granted
—
$
—
Vested
( 93
)
$
14.50
Forfeited
( 283
)
$
18.09
Non-vested RSUs and PSUs outstanding at September 30, 2025
2,248
$
7.74
The fair value of RSUs granted and of shares vested, and the tax benefit recognized from restricted shares vesting was as follows:
Three Months Ended September 30,
2025
2024
Fair value of RSUs granted
$
—
$
86
Fair value of shares vested
$
158
$
823
Tax benefit recognized from restricted shares vesting
$
22
$
100
No PSUs were granted or vested during the three months ended September 30, 2025. At September 30, 2025, there was $ 8,194 of unrecognized stock-based compensation expense related to non-vested restricted stock awards, which is expected to be recognized over a weighted average period of 1.19 years.
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 September 30, 2025 was recorded ratably based on the Company's projected achievement at the end of the measurement period. The cash incentive award liability was $ 803 at September 30, 2025, all of which is classified as a liability and reported in accrued expenses and other current liabilities.
During the three months ended September 30, 2025, the estimated fair value of granted cash-settled awards was $ 2,610 . For the reporting period, the Company recognized a forfeiture adjustment of $ 219 .
At September 30, 2025, there was $ 1,807 of unrecognized cash-based compensation expense related to non-vested awards, which is expected to be recognized over a weighted average period of 2.08 years.
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14. FAIR VALUE MEASUREMENTS
The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:
• Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
• Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
• Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
The following table presents assets and liabilities measured at fair value on a recurring basis as of September 30, 2025:
Total
Quoted
prices in
active
markets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Assets:
Derivative financial instruments
$
4,659
$
—
$
4,659
$
—
Liabilities:
Derivative financial instruments
$
19,352
$
—
$
19,352
$
—
The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2025:
Total
Quoted
prices in
active
markets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Assets:
Derivative financial instruments
$
5,835
$
—
$
5,835
$
—
Liabilities:
Derivative financial instruments
$
19,706
$
—
$
19,706
$
—
There were no transfers of financial instruments between the three levels of fair value hierarchy during the three months ended September 30, 2025 or 2024.
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 discounted cash flow (“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 September 30, 2025 and June 30, 2025 were classified as Level 2.
Nonrecurring Fair Value Measurements
The Company measures certain non-financial assets, such as goodwill, indefinite and definite lived intangible assets, and long-lived 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,
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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, 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 where goodwill resides are estimated using a blended analysis of the DCF income approach and the Guideline Public Company Method (“GPCM”) market approach, which involve significant management judgment and Level 3 inputs, such as economic conditions and customer demand. For long-lived assets, the Company compares the fair value of the assets to their carrying value utilizing a valuation technique commensurate with the underlying assets. 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.
15. DERIVATIVES AND HEDGING ACTIVITIES
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages its exposures to a wide variety of business and operational risks. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s receivables and borrowings.
Certain of the Company’s foreign operations expose the Company to fluctuations of foreign exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of its functional currency, the U.S. Dollar. Accordingly, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not use derivatives for speculative or trading purposes.
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During the three months ended September 30, 2025 and 2024, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in AOCL related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate deb t. During the next 12 months, the Company estimates that an additional $ 2,221 will be reclassified as a decrease to interest expense.
As of September 30, 2025, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Interest Rate Derivative
Number of Instruments
Notional Amount
Interest rate swap
4
$
400,000
Cash Flow Hedges of Foreign Exchange Risk
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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 no amount relat ing to the foreign currency forward contracts will be reclassified to interest expense.
As of September 30, 2025, 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
3
£
1,964
€
2,250
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 September 30, 2025, 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
$
103,312
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 recogniti on 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 an additional $ 476 relating to cross currency s waps will be reclassified as a decrease to interest expense.
As of September 30, 2025, the Company had the following outstanding foreign currency derivatives that were used to hedge changes in fair value attributable to foreign exchange risk:
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Foreign Currency Derivative
Number of Instruments
Notional Sold
Notional Purchased
Cross-currency swap
1
€
24,700
$
25,453
As of September 30, 2025 and June 30, 2025, 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
September 30, 2025
June 30, 2025
September 30, 2025
June 30, 2025
Intercompany loan receivable
$
28,954
$
28,982
$
( 27
)
$
2,517
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 September 30, 2025:
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
$
2,218
Accrued expenses and other current liabilities
$
—
Interest rate swaps
Other noncurrent assets
103
Other noncurrent liabilities
—
Cross-currency swaps
Prepaid expenses and other current assets
2,338
Accrued expenses and other current liabilities
—
Cross-currency swaps
Other noncurrent assets
—
Other noncurrent liabilities
19,352
Total derivatives designated as hedging instruments
$
4,659
$
19,352
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, 2025:
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
$
3,091
Accrued expenses and other current liabilities
$
—
Interest rate swaps
Other noncurrent assets
140
Other noncurrent liabilities
—
Cross-currency swaps
Prepaid expenses and other current assets
2,335
Accrued expenses and other current liabilities
—
Cross-currency swaps
Other noncurrent assets
—
Other noncurrent liabilities
19,706
Foreign currency forward contracts
Prepaid expenses and other current assets
269
Accrued expenses and other current liabilities
—
Total derivatives designated as hedging instruments
$
5,835
$
19,706
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 months ended September 30, 2025 and 2024:
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Amount of Gain (Loss) Recognized in AOCL on Derivatives
Three Months Ended
September 30,
2025
2024
Derivatives in cash flow hedging relationships:
Interest rate swaps
$
430
$
( 7,366
)
Derivatives in net investment hedging relationships:
Cross-currency swaps
771
( 3,282
)
Derivatives in fair value hedging relationships:
Cross-currency swaps
190
( 809
)
$
1,391
$
( 4,091
)
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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 the consolidated statements of operations, recorded in interest and other financing expense, net, for the three months ended September 30, 2025 and 2024:
Amount of Gain (Loss) Reclassified from AOCL into Income (Expense)
Three Months Ended
September 30,
2025
2024
Derivatives in cash flow hedging relationships:
Interest and other financing expense, net:
Interest rate swaps
$
1,340
$
2,336
Cost of sales:
Foreign currency forward contracts
98
—
Derivatives in net investment hedging relationships:
Cross-currency swaps
484
495
Derivatives in fair value hedging relationships:
Cross-currency swaps (1)
138
( 960
)
$
2,060
$
1,871
(1) Net of amount that is excluded from effectiveness testing. The amount of gain, excluded from effectiveness testing, reclassified from AOCL into income for the three months ended September 30, 2025 and 2024 was $ 111 and $ 123 , respectively.
16. TRANSFORMATION PROGRAM
During the first quarter of fiscal year 2024, the Company initiated a multi-year growth, transformation and restructuring program (the “Restructuring Program”). The Restructuring 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 Restructuring 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 September 30, 2025, expenses associated with the Restructuring Program in the amount of $ 8,219 and $ 5,283 , were recorded in productivity and transformation costs and cost of sales, respectively, on the consolidated statements of operations. For the three months ended September 30, 2024, expenses associated with the Restructuring Program in the amount of $ 5,018 , $ 376 , and $ 31 , were recorded in productivity and transformation costs, cost of sales, and long-lived asset impairment, r espectively, on the consolidated statements of operations.
The table below sets forth expenses associated with the Restructuring Program for the three-month periods ended September 30, 2025 and September 30, 2024 by reportable segments and Corporate and Other.
Three Months Ended
September 30, 2025
Three Months Ended
September 30, 2024
North America
$
9,406
$
2,241
Corporate and Other
3,328
1,990
International
768
1,194
$
13,502
$
5,425
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The following table displays the activities and liability balances relating to the Restructuring Program for the three-month period ended September 30, 2025. The Company expects to pay the remaining accrued restructuring costs during the next 12 months.
Balance at
June 30,
2025
Charges
Amounts
Paid
Non-cash settlements/
Adjustments
Balance at
September 30,
2025
Employee-related costs 1
$
2,430
$
6,085
$
( 2,099
)
$
—
$
6,416
Contract termination costs
208
286
( 233
)
—
261
Asset write-downs 2
—
3,550
—
( 3,550
)
—
Other transformation-related expenses 3
380
3,581
( 1,925
)
( 239
)
1,797
$
3,018
$
13,502
$
( 4,257
)
$
( 3,789
)
$
8,474
1 Employee-related costs include $ 833 of severance related to executive officer succession.
2 Represents non-cash asset write downs due to accelerated depreciation.
3 Other transformation-related expenses primarily include consultancy charges related to reorganization of global functions and related personnel resource requirements, and rationalizing sourcing and supply chain processes.
17. COMMITMENTS AND CONTINGENCIES
Securities Class Actions Filed in Federal Court
The Company and certain of its former officers (collectively, the “Defendants”) are defendants in a consolidated class action complaint in the Eastern District of New York under the caption In re The Hain Celestial Group, Inc. Securities Litigation (the “Consolidated Securities Action”). A Corrected Consolidated Amended Complaint was filed in the summer of 2017, which asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls.
After Defendants’ initial motion to dismiss was granted without prejudice to replead in October 2017, the Co-Lead Plaintiffs filed a Second Amended Consolidated Class Action Complaint on May 6, 2019 (the “Second Amended Complaint”), which made allegations similar to those in the previous complaint. After several years of motion practice and related court orders, on September 29, 2023, the District Court granted Defendants’ Motion to Dismiss the Second Amended Complaint. Co-Lead Plaintiffs filed a notice of appeal on October 26, 2023, appealing the District Court’s decision dismissing the Second Amended Complaint to the Second Circuit, and the appeal was fully briefed as of June 3, 2024. On September 29, 2025, the Second Circuit reversed and remanded the matter for further proceedings. Defendants filed a petition for panel rehearing or rehearing en banc on October 27, 2025 and 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 caption In re The Hain Celestial Group, Inc. Stockholder Class and Derivative Litigation (the “Consolidated Stockholder Class and Derivative Action”). The plaintiffs allege 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 claim breach of fiduciary duty, unjust enrichment and corporate waste.
After several years of motion practice and related court orders in the related Consolidated Securities Action, on July 24, 2020, the plaintiffs made a stockholder litigation demand on the 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 had finished investigating and resolved, among other things, that the demand should be rejected. In light of developments in the Consolidated Securities Action referenced above that remanded that case for further proceedings, the parties submitted a joint status report on December 29, 2021 requesting that the District Court continue the temporary stay pending the District Court’s reconsideration of the Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action. The parties have agreed to extend the stay during the pendency of the pending appeal in the Consolidated Securities Action, most
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recently through the earlier of September 29, 2025 or 30 days after the Second Circuit issues a decision on plaintiffs’ appeal. Following the Second Circuit’s reversal and remand on September 29, 2025, the Court further ordered a further status update to be provided on November 14, 2025.
Baby Food Class Action 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 were 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”). In the Consolidated Proceeding, the plaintiffs generally allege that the Company violated various state consumer protection laws and assert 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. 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 ongoing. 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.
Baby Food Multidistrict Litigation
On January 4, 2024, plaintiffs in federal cases across the country filed a Motion to Transfer Actions 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. On April 15, 2024, the court issued an order staying all outstanding discovery proceedings and pending motions and vacating all previously scheduled hearing dates. There are approximately 100 federal cases filed against the Company pending in the multi-district litigation (“MDL”). Plaintiffs filed their Master Complaint on July 15, 2024. On December 18, 2024, Defendants filed motions to dismiss the Master Complaint, which the Court granted in part and denied in part. The MDL is first
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proceeding with general causation discovery. Expert discovery has closed. The parties Rule 702 motions have been fully briefed. The Court will hold Rule 702 hearings during the week of December 8, 2025.
Baby Food California State Court Cases
There are currently ten personal injury cases against the Company pending in California State Superior Courts relating to the same allegations regarding trace levels of heavy metals in the Products. These cases are now (or will be) included in Judicial Council Coordinated Proceedings (“JCCP”). In June 2024, the cases were assigned a trial coordination judge. All but three of the cases are currently stayed.
In Landon R. v. The Hain Celestial Group, Inc., et al., No. 23STCV24844, discovery has closed. The Court held hearings on the parties’ Sargon and Summary Judgment Motions on August 11-13, 2025. The Court will continue to hold hearings on the parties’ motions in fall 2025. Trial is currently set for March 16, 2026.
On September 30, 2025, the Court lifted the discovery and pleading stay in two additional cases: Kaleb R. v. Hain Celestial Group, Inc. et al. (No. 23STCV30542) and Samuel R. v. Hain Celestial Group, Inc. et al. (No. 23CV057126). Discovery is ongoing in both cases.
Palmquist v. The Hain Celestial Group
During a jury trial in February 2023 in the baby food-related matter Palmquist v. The Hain Celestial Group, Inc., the court granted the Company’s motion for a directed verdict, finding no liability for the Company. The Court entered Final Judgment in the Company’s favor on March 3, 2023.
Plaintiffs appealed in the Fifth Circuit, 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 Company successfully petitioned the United States Supreme Court for a writ of certiorari, and the appeal is fully briefed as of September 10, 2025. The Court heard oral argument on November 4, 2025 and the parties await a decision.
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, but the trial has been continued pending a decision at the United States Supreme Court.
With respect to all of the above-described baby food matters, 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.
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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18. SEGMENT INFORMATION
The Company’s organizational structure consists of two geographic based reportable segments: North America and International, which are also the operating segments. This structure is in line with how the Company’s Chief Operating Decision Maker (“CODM”) asse sses the Company’s performance and allocates resources. The Interim President and Chief Executive Officer is the CODM of the Company. The Company’s measure of segment profitability is Adjusted EBITDA and the CODM also uses net sales in order to analyze segment results and trends to allocate resources. On a monthly basis, the CODM reviews how actual results compare to forecasts and prior periods when making decisions regarding strategic initiatives and capital investments to segments.
Segment Adjusted EBITDA excludes: net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses, certain litigation and related costs, plant closure related costs, net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, net, costs associated with acquisitions, divestitures and other transactions, (gain) loss on sale of assets, long-lived asset impairments and other adjustments. In addition, Segment Adjusted EBITDA does not include Corporate and Other expenses related to the Company’s centralized administrative functions, which do not specifically relate to a reportable segment. Such Corporate and Other expenses are comprised mainly of compensation and related expenses of certain of the Company’s senior executive officers and other employees who perform duties related to the entire enterprise, litigation expense and expenses for certain professional fees, facilities, and other items which benefit the Company as a whole.
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The following tables set forth financial information about each of the Company’s reportable segment’s revenue, significant segment expenses and measure of segment profit or loss for the three months ended September 30, 2025 and 2024. 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 September 30,
2025
2024
Net Sales:
North America
$
203,920
$
231,140
International
163,963
163,456
367,883
394,596
Cost of sales, adjusted to exclude restructuring activities:
North America
( 157,716
)
( 183,527
)
International
( 138,299
)
( 129,130
)
( 296,015
)
( 312,657
)
Marketing expense:
North America
( 6,924
)
( 8,645
)
International
( 3,978
)
( 4,391
)
( 10,902
)
( 13,036
)
Other selling, general and administrative expenses, adjusted to exclude restructuring activities and depreciation and amortization:
North America
( 24,843
)
( 30,927
)
International
( 16,000
)
( 16,424
)
( 40,843
)
( 47,351
)
Depreciation and amortization and other adjustments:
North America
2,572
4,418
International
6,869
6,859
9,441
11,277
Segment Adjusted EBITDA:
North America
17,009
12,459
International
12,555
20,370
Total Reportable Segments Adjusted EBITDA
29,564
32,829
Corporate and Other
( 9,832
)
( 10,454
)
19,732
22,375
Depreciation and amortization
( 15,411
)
( 11,427
)
Equity in net loss of equity-method investees
( 173
)
( 155
)
Interest expense, net
( 13,142
)
( 12,995
)
Benefit (provision) for income taxes
1,256
( 3,523
)
Stock-based compensation, net
( 2,003
)
( 2,876
)
Unrealized currency losses
( 265
)
( 1,194
)
Certain litigation expenses, net (a)
( 827
)
( 827
)
Restructuring activities
Productivity and transformation costs
( 8,219
)
( 5,018
)
Plant closure related costs, net
( 286
)
( 376
)
Acquisitions, divestitures and other
Transaction and integration costs, net
( 2,173
)
318
Gain (loss) on sale of assets
886
( 3,934
)
Impairment charges
Long-lived asset impairment
—
( 31
)
Net loss
$
( 20,625
)
$
( 19,663
)
(a) Expenses and items relating to securities class action, baby food litigation and SEC investigation.
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The Company’s net sales by product category are as follows:
Three Months Ended September 30,
2025
2024
Snacks
$
80,015
$
99,475
Baby & Kids
55,792
60,768
Beverages
59,574
56,676
Meal Preparation
159,622
159,392
Personal Care
12,880
18,285
$
367,883
$
394,596
The Company’s net sales by geographic region, which are generally based on the location of the Company’s subsidiaries, are as follows:
Three Months Ended September 30,
2025
2024
United States
$
178,155
$
202,773
United Kingdom
117,896
122,406
Western Europe
46,066
41,050
Canada
25,766
28,367
$
367,883
$
394,596
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, 2025.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.